Slide 1: Xerox + HP: A Value-Creating Combination
Exhibit 99.1 Xerox + HP A Value-Creating CombinationExhibit 99.1 Xerox + HP A Value-Creating Combination
Slide 2: Forward-looking Statements
Forward-looking Statements This communication, and other written or oral statements made from time to time by management contain “forward-looking statements” as defined in the Private Securities Litigation Reform Act of 1995. The words “anticipate”, “believe”, “estimate”, “expect”, “intend”, “will”,
Slide 3: Additional Information
Additional Information This communication does not constitute an offer to buy or solicitation of an offer to sell any securities. This communication relates to a proposal that Xerox has made for a business combination transaction with HP. In furtherance of this proposal and subject to future develop
Slide 4: Introduction: Dear HP Shareholder
Introduction Dear HP Shareholder, There is a clear path to realizing increased value from your investment in HP — the proposed transaction with Xerox. We are offering a combination of cash and stock with an aggregate implied value of ~$31 per share (an 82% premium to HP’s unaffected 30-day (1) volum
Slide 5: Executive Summary
Executive Summary • Headline offer of ~$22 per share represents a 29% premium to HP’s unaffected 30-day volume weighted average price (VWAP) of $17 Compelling Value Creation • Pro forma implied value to HP shareholders of ~$31 per share Xerox’s offer provides immediate cash value 1• Combined company
Slide 6: Compelling Value Creation
1 Compelling Value Creation Xerox’s offer provides immediate cash value and significant equity upside 61 Compelling Value Creation Xerox’s offer provides immediate cash value and significant equity upside 6
Slide 7: Xerox's Offer Provides Immediate Cash Value and Significant Equity Upside
Xerox’s Offer Provides Immediate Cash Value and Significant Equity Upside (1) ▪ HP shareholders receive $17 per share in cash, representing 100% of HP’s unaffected 30-day VWAP Compelling ▪ ~$14 per share implied value through ownership of 48% of pro forma combined company, including $2bn of incremen
Slide 8: Equity Upside for HP Shareholders from Ownership in Combined Company
Equity Upside for HP Shareholders from Ownership in Combined Company The stock consideration of Xerox’s proposal results in HP shareholders owning ~48% of the combined company. This gives HP shareholders significant equity upside, which we conservatively value at ~$14 per share without multiple expa
Slide 9: Substantial Premium with Significant Upside
Substantial Premium with Significant Upside Xerox Offered a Significant Premium to HP Shareholders HP Shareholders Benefit From Significant Upside HP Inc. LTM Share Price Value Creation for HP Shareholders ($/share) ($/share) HP Shareholders’ ~48% ownership of combined company provides Implied Value
Slide 10: Headline Offer Exceeds Analysts' Unaffected Expectations for HP
Headline Offer (Excluding Any Synergies) Exceeds Analysts’ Unaffected Expectations for HP Premium Value to Wall Street Views HP Standalone Plan Has Significant Execution Risk ▪ “$1.0bn gross savings by end of FY22…most of this will be offset (1) Unaffected HP Price Targets by organic headwinds and i
Slide 11: 2020E Pro Forma Earnings Power
2020E Pro Forma Earnings Power Xerox HP Pro Forma (1) Revenue $8.7bn $58.1bn $66.8bn Incremental run-rate cost synergies of $2bn achieved within 24 months Adjusted $1.6bn $4.9bn $8.5bn (1) EBITDA 18.8% 8.4% 12.7% % Margin (Including Run-rate Synergies) Free Cash (2) (1) $1.1bn $3.5bn $5.7bn Flow 12.
Slide 12: Combined Company Leverage Can Be Significantly Reduced with Pro Forma FCF
Combined Company Leverage Can Be Significantly Reduced with Pro Forma FCF PF Leverage Level Is In Line With Tech Hardware Companies… …And Leverage Significantly Reduced Over 24 months ▪ Pro forma analysis based on Wall Street consensus shows strong ability (Net Leverage: Net Debt / 2019E EBITDA) for
Slide 13: Significant Cost Synergy Opportunities
2 Significant Cost Synergy Opportunities At least $2bn of incremental run-rate cost synergies only achievable through a combination 132 Significant Cost Synergy Opportunities At least $2bn of incremental run-rate cost synergies only achievable through a combination 13
Slide 14: The Xerox Approach to Transforming Operations While Reducing Costs
The Xerox Approach to Transforming Operations While Reducing Costs At its Investor Day in February 2019, Xerox detailed plans for Project Own It, an enterprise-wide initiative to simplify its operations, drive a culture of continuous improvement and free up capital to reinvest in the business. This
Slide 15: Project Own It Delivered Approximately $1bn of Gross Savings in 18 Months
Project Own It Delivered Approximately $1bn of Gross Savings in 18 Months PROJECT OWN IT SAVINGS* ($mm) H2 2018 300 2019 640 d 2020 170 280 H1 2021 110 Achieved & On Track Identified & Highly Probable Delivered approximately $1bn of Plans to deliver $1bn of gross gross savings on a $9bn cost base in
Slide 16: Xerox's Methodology to Deliver $2bn+ of Run-Rate Cost Synergies in 24 Months
CV Xerox’s Methodology to Deliver $2bn+ of Run-Rate Cost Synergies in 24 Months Shared Additional Supply Chain and Org Design & Manufacturing IT & R&D Delivery Services Centers Procurement Benefit Costs SG&A Target: $100 – 150mm* Target: $500 - 700mm* Target: $500 - 700mm* Target: $280 - 400mm* Targ
Slide 17: Examples of Key Drivers to Deliver $2bn+ of Cost Synergies
Examples of Key Drivers to Deliver $2bn+ of Incremental Run-Rate Cost Synergies F R O M* T O* COMBINED COMPANY ~3000 suppliers 10,000+ suppliers Procurement ~1.5% of revenue ~2% of revenue IT ~20% Sku simplification, improved inventory 1000’s of Sku increasing inventory cost Supply Chain controls ex
Slide 18: Projected Timing for Realization of Expected Cost Synergies
Projected Timing for Realization of Expected Cost Synergies Transaction Cost Synergies ($ in mm) YEAR 1 $500 YEAR 2 $1,500 YEAR 3 $2,000 RU N -RATE *See “Forward-Looking Statements” at the front of this document. 18Projected Timing for Realization of Expected Cost Synergies Transaction Cost Synergie
Slide 19: Undisputed Strategic Logic
3 Undisputed Strategic Logic $1-$1.5bn of potential growth opportunities only realized through a combination 193 Undisputed Strategic Logic $1-$1.5bn of potential growth opportunities only realized through a combination 19
Slide 20: Most Complete and Competitive Portfolio Across All Product Segments
Most Complete and Competitive Portfolio Across All Product Segments HP is a market leader in four segments (Home, Office A4, Production and Packaging) and is moving deeper into Industrial Printing, but key gaps remain in the segments where Xerox is a market leader (Office A3, Managed Services, Entry
Slide 21: Complementary Coverage Models Drive New Revenue Opportunities
Complementary Coverage Models Drive New Revenue Opportunities PRIMARY ROUTES-TO-MARKET COMBINATION BENEFITS Xerox has a strong direct sales force—both selling to enterprises and SMB. HP’s primary route-to-market is through its indirect channel. 45% 26 29 Our complementary hardware, software and % %
Slide 22: Revenue Roadmap Provides $1-$1.5bn of Potential Upside
Revenue Roadmap Provides $1-$1.5bn of Potential Upside Sell highly complementary portfolio into each’s existing • Most complete portfolio, providing clients a unified platform and install base experience • Ability to generate and capture demand in higher growth segments 3-year forecast: $540mm - $75
Slide 23: Leadership with Proven Track Record
4 Leadership with Proven Track Record Xerox management developed and is executing a strategic 3-year playbook to create shareholder value 234 Leadership with Proven Track Record Xerox management developed and is executing a strategic 3-year playbook to create shareholder value 23
Slide 24: Xerox Leadership
Xerox Leadership John Visentin Vice Chairman and CEO Steve Bandrowczak Bill Osbourn, Jr. Anne Marie Squeo Tracey Koziol President, COO CFO Chief Brand Officer SVP, Global Offerings Integrated 50+ acquisitions and Led product development for M&A and integration expertise; Launched Netflix in 130 coun
Slide 25: Proven Playbook to Increase Shareholder Value
Proven Playbook to Increase Shareholder Value The Xerox three-year strategic playbook has focused on four key initiatives: YTD Share Price Performance ($/share, rebased to Xerox Stock Price on January 2, 2019) • Optimize Operations: Simplify and streamline February 5, 2019 November 5, 2019 operation
Slide 26: Proven Value Creation through Strategic Decision-Making
Proven Value Creation through Strategic Decision-Making EXPANDED HP RELATIONSHIP RESET FUJIFILM RELATIONSHIP June 4, 2019 November 5, 2019 Xerox leveraged its sourcing spend to create incremental • Monetized otherwise illiquid assets at attractive growth opportunities that include: valuation – over
Slide 27: For Those Asking Why Now... We Say, Why Wait?
For Those Asking Why Now… We Say, “Why Wait? ” This is a compelling proposal that immediately increases the value of your investment in HP and achieves long overdue industry consolidation that spurs efficiencies of scale and growth. Urge HP to: • Engage with Xerox • Conduct three weeks of mutual due
Slide 28: Appendix
Appendix 28Appendix 28
Slide 29: Revenue Synergy Examples
Revenue Synergy Examples Four examples of how we can leverage each company’s technology and routes-to- market to drive $1-$1.5bn of incremental revenue 29Revenue Synergy Examples Four examples of how we can leverage each company’s technology and routes-to- market to drive $1-$1.5bn of incremental re
Slide 30: Integrate HP's Offerings into Xerox's Office-as-a-Service Offering
Integrate HP’s Offerings into Xerox’s Broader Office-as-a-Service Offering and Drive It Through Xerox’s Direct SMB Sales Force Few SMBs have the financial resources or ongoing need to have a full-time CIO. Xerox’s Office-as-a-Service solves for this challenge. The combined company can provide HP’s i
Slide 31: Opportunity to Sell Xerox Services to HP's Existing Clients and Partners
Opportunity to Sell Xerox Services to HP’s Existing Clients and Partners Xerox has a suite of horizontal and industry-specific service offerings that leverage its full portfolio of devices and software. Xerox is the only firm in the print market with this range of services. These offerings have move
Slide 32: Extensive Opportunity to Attach Xerox Software Across HP's Portfolio
Extensive Opportunity to Attach Xerox Software Across HP’s Portfolio Xerox FreeFlow Core ®: XMPie ®: Xerox DocuShare ®: Automates the process steps required to Customizes compliant printed and digital Enables secure content management with prepare a job for print with on-premise and communications.
Slide 33: Leveraging Xerox Financial Services Provides Accretive, High-Margin Growth
Leveraging Xerox Financial Services Provides Accretive, High-Margin Growth of $150-$300mm Today, HP doesn’t have a financing business. Instead, it relies on its relationship with HPE, missing out on high- margin, recurring business. Leveraging Xerox Financial Services provides the combined company w