Slide 1: HP Inc. Q4 FY20
HP INC. Q4 FY20 November 24, 2020 http://investor.hp.com
Slide 2: Forward-looking statements
Forward-looking statements This presentation contains forward-looking statements based on current expectations and assumptions that involve risks and uncertainties. If the risks or uncertainties ever materialize or the assumptions prove incorrect, the results of HP Inc. and its consolidated subsidia
Slide 3: Use of non-GAAP financial information
Use of non-GAAP financial information HP has included non-GAAP financial measures in this presentation to supplement HP’s consolidated financial statements presented on a GAAP basis. Definitions of these non-GAAP financial measures and reconciliations of these non-GAAP financial measures to the most
Slide 4: Q4 FY20 highlights
Q4 FY20 highlights • Net revenue of $15.3 billion, down 1.0% from the prior-year period and up 0.1% in constant currency1 • Non-GAAP diluted net earnings per share2 of $0.62, above the previously provided outlook of $0.50 to $0.54 per share • GAAP diluted net earnings per share of $0.49, above the p
Slide 5: FY20 highlights
FY20 highlights • Net revenue of $56.6 billion, down 3.6% from the prior-year period and down 2.3% in constant currency1 • Non-GAAP diluted net earnings per share2 of $2.28, above the previously provided outlook of $2.16 to $2.20 per share • GAAP diluted net earnings per share of $2.00, above the pr
Slide 6: Q4 FY20 results overview
Q4 FY20 results overview Growth CC 1 Non-GAAP OP Non-GAAP OP Non-GAAP OP Non-GAAP OP $ in millions Net revenue Growth y/y% y/y% $3 % of rev 3 $ y/y 3 % of rev y/y 3 Printing $4,826 (3.1)% (2.4)% $713 14.8% $(64) (0.8) pts Personal Systems $10,432 0.1% 1.4% $528 5.1% $(28) (0.2) pts Corporate Investm
Slide 7: FY20 results overview
FY20 results overview Growth CC 1 Non-GAAP OP Non-GAAP OP Non-GAAP OP Non-GAAP OP $ in millions Net revenue Growth y/y% y/y% $3 % of rev 3 $ y/y 3 % of rev y/y 3 Printing $17,641 (12.1)% (11.2)% $2,495 14.1% $(707) (1.9) pts Personal Systems $38,997 0.8% 2.3% $2,312 5.9% $414 1.0 pts Corporate Inves
Slide 8: Q4 FY20 mix by segment and region
Q4 FY20 mix by segment and region Net revenue Non-GAAP operating profit 2 By key segment and business unit1 By key segment3 Net revenue by region Workstations and Other Personal Sy stems Printing – 4% Supplies $ 1.2 billion Desktops 21% 15% Printing – 14.8% $15.3 Printing Commercial Hardware 4 57% o
Slide 9: FY20 mix by segment and region
FY20 mix by segment and region Net revenue Non-GAAP operating profit2 By key segment and business unit1 By key segment3 Net revenue by region Workstations and Other Personal Sy stems Printing – 7% Supplies Desktops 17% 20% $ 4.8 billion Printing – 14.1% $56.6 Printing Commercial Hardware 4 52% of to
Slide 10: Revenue and non-GAAP diluted net EPS performance
Revenue and non-GAAP diluted net EPS performance 1 1 Revenue (Billions) Non-GAAP diluted net EPS $18 $0.70 $0.65 $0.62 $0.60 $0.58 $0.60 $16 $0.54 $0.53 $0.52 $0.51 $0.49 $0.50 $14 $0.40 $0.30 $12 $0.20 $10 $0.10 $15.4 $14.7 $14.0 $14.6 $15.4 $14.6 $12.5 $14.3 $15.3 $8 $0.00 4Q18 1Q19 2Q19 3Q19 4Q19
Slide 11: Revenue growth
Revenue growth y/y growth (%) 15% 10.3% 10% 9.4% 5% 2.0% 2.3% 2.1% 1.8% 0.5% 0.1% (0.2)% 0% 1.3% 0.2% 0.1% 0.3% (0.6)% (1.0)% (5)% (10.1)% (2.1)% (10)% (11.2)% (15)% 4Q18 1Q19 2Q19 3Q19 4Q19 1Q20 2Q20 3Q20 4Q20 Revenue growth in constant currency 1 Revenue growth as reported 1. Adjusted to exclude t
Slide 12: Regional revenue trends
Regional revenue trends y/y revenue growth % y/y revenue growth in constant currency %1 $7 10% $7 10% Americas (including U.S.) United 5% 5% States $6 $6 0% 0% (5%) $5 $5 (5%) (10%) $4 (15%) $4 (10%) billions 4Q18 1Q19 2Q19 3Q19 4Q19 1Q20 2Q20 3Q20 4Q20 % growth billions 4Q18 1Q19 2Q19 3Q19 4Q19 1Q2
Slide 13: Personal Systems
Personal Systems Q4 FY20 • PC is essential - work from home and distance learning drove Revenue Operating profit strong demand in notebooks Key $10.4 $528 • Delivered strong growth in high valued categories of Consumer Premium, Gaming, Services and Consumer Accessories billion million messages • Inn
Slide 14: Printing
Printing Q4 FY20 • Strong momentum in Home print, including Instant Ink, Revenue Operating profit benefitting from working and learning from home $4.8 billion $713 million Key • Office usage improved in SMB though revenue declined due to impacts of COVID-19 messages • Innovation: Launched HP+ a comp
Slide 15: Non-GAAP financial information
Non-GAAP1 financial information $ in millions, except Q4 FY20 Q3 FY20 Q4 FY19 per share amounts Revenue $15,258 $14,294 $15,407 Cost of revenue 12,579 82.4% 11,901 83.3% 12,483 81.0% Total OpEx 1,625 10.7% 1,515 10.6% 1,794 11.7% Operating profit $1,054 6.9% $878 6.1% $1,130 7.3% Interest and other,
Slide 16: Q4 FY20 bridge
Q4 FY20 GAAP to non-GAAP bridge Non-operating $ in millions, except Restructuring Defined benefit Amortization of Acquisition- retirement tax rate and per share GAAP and other plan settlement Tax adjustments Non-GAAP intangible assets related charges related (credits) amounts charges charges / charg
Slide 17: FY20 bridge
FY20 GAAP to non-GAAP bridge Non-operating $ in millions, except Restructuring Debt Defined benefit Amortization of Acquisition- retirement tax rate and per share GAAP and other extinguishment plan settlement Tax adjustments Non-GAAP intangible assets related charges related (credits) amounts charge
Slide 18: Select cash and debt balances
Select cash and debt balances Net cash (debt)1 $ Billions $8.0 $6.0 $4.0 $ Billions 4Q19 1Q20 2Q20 3Q20 4Q20 $2.0 Gross cash 2 4.5 4.5 4.1 4.9 5.1 $0.0 Gross debt 5.2 4.9 5.5 6.3 6.3 ($2.0) Net cash (debt) 1,3 (0.6) (0.4) (1.4) (1.4) (1.1) ($4.0) ($6.0) ($8.0) 4Q19 1Q20 2Q20 3Q20 4Q20 2 Gross cash G
Slide 19: Cash flow
Cash flow $ Millions $5,000 $4,654 $4,316 $3,983 $3,891 $4,000 $3,000 $2,000 $1,874 $1,798 $1,000 $588 $392 $0 FY19 FY20 Q419 Q420 1 Net cash provided by operations Free cash flow 1. Free cash flow = Net cash provided by operations adjusted for net investment in leases and net investment in property
Slide 20: Shareholder return
Shareholder return $ Millions $4.1 billion $4,000 $3.4 billion $3,000 3,107 2,405 $2,000 $1.6 billion $1,000 $0.7 billion 1,340 970 997 461 236 238 $0 FY19 FY20 Q419 Q420 Shares repurchased 117.7 million 166.5 million 25.3 million 71.0 million Dividend per share $0.6408 $0.7048 $0.1602 $0.1762 Divid
Slide 21: Outlook
Outlook Q1 FY21 net EPS guidance GAAP diluted net EPS $0.58 – $0.64 Non-GAAP diluted net EPS1 $0.64 – $0.70 1. First quarter fiscal 2021 non-GAAP diluted net EPS estimates exclude restructuring and other charges, acquisition-related charges, defined benefit plan settlement charges, amortization of i
Slide 22: Supplemental slides
Slide 23: Inventory and accounts receivable
Inventory and accounts receivable Inventory Accounts receivable In Billions In Billions $7.0 16.0% $7.0 16.0% $6.4 $5.9 $6.0 $6.0 $6.0 $5.6 $5.7 $5.7 14.0% $6.0 14.0% $5.4 $5.4 $5.3 $5.3 $5.4 $4.9 $5.1 $5.1 12.0% $4.9 12.0% $5.0 % of revenue1 $5.0 % of revenue1 11.1% 10.0% 10.0% 10.4% 10.5% $4.0 9.7
Slide 24: PP&E and accounts payable
PP&E and accounts payable PP&E Accounts payable In Billions In Billions $3.0 $2.8 6.0% $2.8 $2.7 $16.0 $2.7 $2.6 $14.6 $14.6 $14.8 $14.7 $13.8 $14.2 $14.3 $2.4 $2.5 $14.0 $2.3 5.0% $12.8 $2.4 % of revenue1 4.8% 4.7% 4.8% 4.7% $12.0 4.6% 4.2% 4.0% 4.1% $1.8 3.9% $10.0 3.0% $8.0 $1.2 2.0% $6.0 $4.0 $0
Slide 25: Working capital metrics
Working capital metrics 140 120 100 80 60 40 20 0 -20 -40 Jan19 Apr19 Jul19 Oct19 Jan20 Apr20 Jul20 Oct20 Days receivables 31 35 33 35 30 37 33 32 Days inventory 42 43 44 41 38 57 45 43 Days payable 108 110 113 107 98 128 108 105 Cash conversion cycle 1 1 -35 -32 -36 -31 -30 -34 -30 -30 1. Cash conv
Slide 26: Q3 FY20 bridge
Q3 FY20 GAAP to non-GAAP bridge Non-operating Amortization $ in millions, except Restructuring Debt retirement of Acquisition- Tax tax rate and per GAAP and other extinguishment related Non-GAAP intangible related charges adjustments share amounts charges costs (credits) / assets charges Revenue $14
Slide 27: Q2 FY20 bridge
Q2 FY20 GAAP to non-GAAP bridge Non-operating $ in millions, except Amortization Restructuring and Acquisition-related Tax retirement related tax rate and per GAAP of Non-GAAP other charges charges adjustments (credits) / share amounts intangible assets charges Revenue $12,469 $12,469 Cost of revenu
Slide 28: Q1 FY20 bridge
Q1 FY20 GAAP to non-GAAP bridge Non-operating $ in millions, except Amortization Restructuring and Acquisition-related Tax retirement related tax rate and per GAAP of Non-GAAP other charges charges adjustments (credits) / share amounts intangible assets charges Revenue $14,618 $14,618 Cost of revenu
Slide 29: FY19 bridge
FY19 GAAP to non-GAAP bridge Non-operating $ in millions, except Amortization retirement Restructuring and Acquisition- tax rate and per GAAP of other charges related charges Tax adjustments related (credits) Non-GAAP share amounts intangible assets / charges Revenue $58,756 $58,756 Cost of revenue
Slide 30: Q4 FY19 bridge
Q4 FY19 GAAP to non-GAAP bridge Non-operating $ in millions, except Amortization Restructuring and Acquisition-related Tax retirement related tax rate and per GAAP of Non-GAAP other charges charges adjustments (credits) / share amounts intangible assets charges Revenue $15,407 $15,407 Cost of revenu
Slide 31: Q3 FY19 bridge
Q3 FY19 GAAP to non-GAAP bridge Non-operating Amortization $ in millions, except Restructuring Acquisition- Defined benefit retirement of Tax tax rate and per GAAP and other related credits plan settlement related Non-GAAP intangible adjustments share amounts charges (charges) charges (credits) / as
Slide 32: Q2 FY19 bridge
Q2 FY19 GAAP to non-GAAP bridge $ in millions, except Non-operating Amortization Restructuring and Acquisition- retirement related tax rate and per GAAP of other charges related charges Tax adjustments (credits) / Non-GAAP share amounts intangible assets charges Revenue $14,036 $14,036 Cost of reven
Slide 33: Q1 FY19 bridge
Q1 FY19 GAAP to non-GAAP bridge Non-operating $ in millions, except Amortization Restructuring and Acquisition-related Tax retirement related tax rate and per GAAP of Non-GAAP other charges charges adjustments (credits) / share amounts intangible assets charges Revenue $14,710 $14,710 Cost of revenu
Slide 34: FY18 bridge
FY18 GAAP to non-GAAP bridge Non-operating Amortization Defined $ in millions, except Restructuring Acquisition- Debt retirement of benefit plan Tax tax rate and per GAAP and other related extinguishment related Non-GAAP intangible settlement adjustments share amounts charges charges costs (credits)
Slide 35: Q4 FY18 bridge
Q4 FY18 GAAP to non-GAAP bridge Non-operating Amortization Defined $ in millions, except Restructuring Acquisition- Debt retirement of benefit plan Tax tax rate and per GAAP and other related extinguishment related Non-GAAP intangible settlement adjustments share amounts charges charges costs (credi
Slide 36: Thank you