Slide 1: Earnings Announcement
Data courtesy of Print my Leg Earnings Announcement NOVEMBER 22, 2022 | Q4 FY22
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 generally accepted accounting principles (“GAAP”) basis. Definitions of these non-GAAP financial measures and reconciliations of
Slide 4: Q4 FY22 Highlights
Q4 FY22 Highlights • Net revenue of $14.8 billion, down 11.2% from the prior-year period and down 8.0% in constant currency1 • Non-GAAP diluted net earnings per share2 of $0.85, within the previously provided outlook of $0.79 to $0.89 per share • GAAP diluted net earnings per share was negligible, a
Slide 5: FY22 Highlights
FY22 Highlights • Net revenue of $63.0 billion, down 0.8% from the prior-year period and up 0.7% in constant currency1 • Non-GAAP diluted net earnings per share2 of $4.08, within the previously provided outlook of $4.02 to $4.12 per share • GAAP diluted net earnings per share of $3.05, below the pre
Slide 6: Key Growth Areas
Key Growth Areas Collectively generated over $11B1 in revenue in FY22, each growing double digit1 PERIPHERALS Revenue grew double digit in FY22 excluding impact of the Poly acquisition. Poly acquisition closed, with Q4 results better than expectations. HyperX launched 36 new products including the A
Slide 7: Q4 FY22 Results Overview
Q4 FY22 Results Overview Non-GAAP $ in Net Growth Growth CC1 Non-GAAP Non-GAAP Non-GAAP OP % of rev millions revenue y/y% y/y % OP $3 OP % of rev3 OP $ y/y3 y/y3 Printing $4,533 (7.1)% (5.7)% $903 19.9% $73 2.9 pts Personal $10,267 (13.0)% (8.9)% $458 4.5% $(306) (2.0) pts Systems Corporate Investme
Slide 8: FY22 Results Overview
FY22 Results Overview Non-GAAP $ in Net Growth Growth CC1 Non-GAAP Non-GAAP Non-GAAP OP % of rev millions revenue y/y% y/y % OP $3 OP % of rev3 OP $ y/y3 y/y3 Printing $18,902 (6.1)% (5.5)% $3,651 19.3% $15 1.2 pts Personal $44,084 1.7% 3.6% $2,908 6.6% $(193) (0.6) pts Systems Corporate Investments
Slide 9: Q4 FY22 Mix by Segment and Region
Q4 FY22 Mix by Segment and Region Net revenue Non-GAAP operating profit2 Net revenue By key segment and business unit1 By key segment3 By region Workstations & Other Personal Systems 8% Printing Supplies $1.4 billion Desktops 19% AMERICAS EMEA APJ 17% Printing Commerical4 44% 31% 25% 7% Printing 19.
Slide 10: FY22 Mix by Segment and Region
FY22 Mix by Segment and Region Net revenue Non-GAAP operating profit2 Net revenue By key segment and business unit1 By key segment3 By region Workstations & Other Personal Systems 7% Printing Supplies $6.6 billion Desktops 19% AMERICAS EMEA APJ 17% Printing Commerical4 42% 34% 24% 7% Printing 19.3%
Slide 11: Revenue & Non-GAAP Diluted Net EPS Performance
Revenue & Non-GAAP Diluted Net EPS Performance Revenue (Billions) y/y growth (%) Non-GAAP diluted net EPS y/y growth (%) $18 17 35% $1.20 140% 16.7 16.5 $1.10 15.6 15.9 $1.08 $16 15.3 15.3 30% $1.04 14.8 $0.94 120% 27.3% 14.7 $1.00 $1.00 25% $0.92 $0.93 $14 $0.85 100% 20% 104.1% $12 25.4% $0.80 15%
Slide 12: Regional Revenue Trends
Regional Revenue Trends Billions % growth Billions % growth Americas United 40% 40% $7 $7 (including U.S.) 30% States 30% $6 20% $6 20% 10% 10% $5 $5 0% 0% $4 $4 (10)% (10)% $3 (20)% $3 (20)% 4Q20 1Q21 2Q21 3Q21 4Q21 1Q22 2Q22 3Q22 4Q22 4Q20 1Q21 2Q21 3Q21 4Q21 1Q22 2Q22 3Q22 4Q22 Billions % growth
Slide 13: Personal Systems Q4 FY22
Personal Systems Q4 FY22 Mix shift towards higher-value categories in commercial premium and peripherals, with Commercial mix improving by 5 pts y/y. Revenue declined y/y driven by continued Revenue Operating profit market softness, unfavorable FX impacts $10.3 $458 and continuing supply chain cha
Slide 14: Printing Q4 FY22
Printing Q4 FY22 HP+ and Big Tank printers continue to become a larger portion of our portfolio mix, representing 55% of printer shipments in Q4. Revenue declined y/y driven by lower Revenue Operating profit Supplies and lower Consumer hardware units, partially offset by higher Commercial $4.5 $903
Slide 15: Sustainable Impact
Sustainable Impact 1 Climate Action Human Rights Digital Equity The only tech company globally to receive an Recognized by Ethisphere as one of the Last year we reached 4.3 million people “A” rating from CDP for our disclosure and world’s most ethical companies 3 years in a through our digital equit
Slide 16: Select Cash & Debt Balances
Select Cash & Debt Balances $ Billions Net cash (debt)1 $6.0 $3.0 $ Billions 4Q21 1Q22 2Q22 3Q22 4Q22 $0.0 Gross cash2 4.3 3.4 4.5 5.4 3.2 ($3.0) Gross debt 7.6 7.1 9.1 11.1 11.2 ($6.0) Net cash (debt)1,3 (3.3) (3.7) (4.7) (5.8) (8.0) ($9.0) ($12.0) 4Q21 1Q22 2Q22 3Q22 4Q22 Gross cash2 Gross debt 1.
Slide 17: Cash Flow & Shareholder Return
Cash Flow & Shareholder Return $ Millions Cash Flow $ Millions Shareholder Return $7,187 $7,000 $7,000 Share repurchase $6,409 Dividend payment $6,000 $6,000 $5,334 $5,000 $5,000 $4,463 $4,167 $3,853 $4,000 $4,000 6,249 $2,848 4,297 $3,000 $3,000 $1,904 $1,821 $1,973 $2,000 $2,000 $938 $999 $1,000 $
Slide 18: Value Creation Plan Summary
Value Creation Plan Summary Exceeded key profitability metrics Value Creation Plan1 Performance vs. Plan Non-GAAP EPS2 FY22 $3.25 - $3.65 $4.08 Exceeded Non-GAAP operating profit2 FY22 $4.7 - $5.1B $5.5B Exceeded Cumulative FCF3 (’20-’22) $10.7 - $11.7B $11.9B Exceeded Cumulative capital returns4 (‘
Slide 19: Future Ready Transformation by end of FY25
Future Ready Transformation by end of FY25 Enabling increased investment in our key growth areas to drive long term value creation Gross Annualized Run Rate Savings >$1.4B At least 40% of run-rate savings target by end of FY23 Restructuring & Digital Transformation ~40% ~$1.0B Unlock efficiencies wi
Slide 20: Timeline of major cost transformation initiatives
Timeline of major cost transformation initiatives FY2023 FY2024 FY2025 Digitization of End-to-end Processes Digital Transformation Build Connected Experiences through Digital Platforms Greg Baxter, Vik Batra, & Dave Shull Modernize and Streamline Data Infrastructure Platform Reductions Portfolio Opt
Slide 21: FY23 Earnings Outlook & Assumptions
FY23 Earnings Outlook & Assumptions FY23 outlook FY23 key assumptions GAAP diluted net EPS $2.22–$2.62 Currency GAAP only charges Non-GAAP diluted net EPS1,3 $3.20–$3.60 ~5% Y/Y ~$1.2B negative impact to Free cash flow1,2 $3.0B–$3.5B revenue OI&E Transformation Savings Q1 FY23 outlook ~$0.5B >$1.4B
Slide 22: Non-GAAP Financial Information
Non-GAAP1 Financial Information $ in millions, except per share amounts Q4 FY22 Q3 FY22 Q4 FY21 % of Revenue % of Revenue % of Revenue Revenue $14,801 $14,664 $16,675 Cost of revenue 12,084 81.6% 11,764 80.2% 13,410 80.4% Total OpEx 1,571 10.7% 1,511 10.3% 1,919 11.5% Operating profit $1,146 7.7% $1
Slide 23: Q4 FY22 GAAP to Non-GAAP Bridge
Q4 FY22 GAAP to Non-GAAP Bridge Non-operating $ in millions, except Amortization of Restructuring Acquisition and Tax retirement tax rate and per GAAP intangible and other divestiture Non-GAAP adjustments related (credits) / share amounts assets charges charges charges Revenue $14,801 $14,801 Cost o
Slide 24: FY22 GAAP to Non-GAAP Bridge
FY22 GAAP to Non-GAAP Bridge Non-operating Amortization of Restructuring Acquisition and Russia exit Tax retirement $ in millions, except GAAP intangible and other divestiture Non-GAAP charges adjustments related (credits) / tax rate and per assets charges charges share amounts1 charges Revenue $62,
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Slide 26: Supplemental Slides
Supplemental Slides @
Slide 27: Inventory & Accounts Receivable
Inventory & Accounts Receivable INVENTORY ACCOUNTS RECEIVABLE In Billions Percentage of Revenue1 In Billions Percentage of Revenue1 $10 18% $6 16% $5.5 $9.0 $8.9 $5.3 $5.4 $9 16% $5.2 $5.0 $4.9 14% $8.2 $7.9 $8.2 $5 $8 $7.5 $7.6 $4.4 $4.5 14% 12% $6.7 13.9% 13.7% $7 13.2% 12.5% 12% $4 12.3% 12.6% 10
Slide 28: PP&E & Accounts Payable
PP&E & Accounts Payable PP&E ACCOUNTS PAYABLE In Billions Percentage of Revenue1 In Billions $3 8% $20 $2.8 $18.1 $2.5 $2.6 $2.6 $2.6 $2.5 $2.5 $2.5 7% $17.0 $15.9 $16.1 $16 $15.0 $15.5 $15.3 $15.2 6% $2 5% $12 4.4% 4.4% 4% 4.2% 4.0% 4.0% 4.0% 4.0% 4.0% $8 3% $1 2% $4 1% $0 0% $0 Jan21 Apr21 Jul21 O
Slide 29: Working Capital Metrics
Working Capital Metrics 140 120 100 80 60 40 20 0 (20) (40) 1Q21 2Q21 3Q21 4Q21 1Q22 2Q22 3Q22 4Q22 Days receivables 30 28 29 30 27 29 27 28 Days inventory 49 54 62 53 59 61 63 57 Days payable 109 110 120 108 119 116 119 114 Cash conversion cycle1 (30) (28) (29) (25) (33) (26) (29) (29) 1. Cash conv
Slide 30: Q3 FY22 GAAP to Non-GAAP Bridge
Q3 FY22 GAAP to Non-GAAP Bridge Non-operating $ in millions, except Amortization of Restructuring Acquisition- Russia exit Tax retirement tax rate and per GAAP intangible and other related Non-GAAP charges adjustments related (credits) / share amounts assets charges charges charges Revenue $14,664 $
Slide 31: Q2 FY22 GAAP to Non-GAAP Bridge
Q2 FY22 GAAP to Non-GAAP Bridge $ in millions, except Restructuring Acquisition- Non-operating Amortization of Tax tax rate and per GAAP and other related retirement related Non-GAAP intangible assets adjustments share amounts charges charges (credits) / charges Revenue $16,490 $16,490 Cost of reven
Slide 32: Q1 FY22 GAAP to Non-GAAP Bridge
Q1 FY22 GAAP to Non-GAAP Bridge $ in millions, except Restructuring Non-operating tax rate and per Amortization of and other Acquisition- retirement related share amounts GAAP intangible assets charges related charges Tax adjustments (credits) / charges Non-GAAP Revenue $17,028 $17,028 Cost of reven
Slide 33: FY21 GAAP to Non-GAAP Bridge
FY21 GAAP to Non-GAAP Bridge Non-operating $ in millions, except Amortization Restructuring Acquisition- Debt Defined benefit Oracle retirement tax rate and per of intangible and other related Extinguishment plan settlement Tax litigation related (credits) / share amounts GAAP assets charges charges
Slide 34: Q4 FY21 GAAP to Non-GAAP Bridge
Q4 FY21 GAAP to Non-GAAP Bridge Defined Benefit Non-operating $ in millions, except Amortization Restructuring Acquisition- plan settlement Oracle retirement tax rate and per of intangible and other related (gains) / Tax litigation related (credits) share amounts GAAP assets charges charges charges
Slide 35: Q3 FY21 GAAP to Non-GAAP Bridge
Q3 FY21 GAAP to Non-GAAP Bridge Non-operating $ in millions, except Amortization Restructuring Acquisition- Debt retirement tax rate and per of intangible and other related extinguishment Tax related (credits) / share amounts GAAP assets charges charges costs adjustments charges Non-GAAP Revenue $15
Slide 36: Q2 FY21 GAAP to Non-GAAP Bridge
Q2 FY21 GAAP to Non-GAAP Bridge $ in millions, except Restructuring Non-operating tax rate and per Amortization of and other Acquisition- retirement related share amounts GAAP intangible assets charges related charges Tax adjustments (credits) / charges Non-GAAP Revenue $15,877 $15,877 Cost of reven
Slide 37: Q1 FY21 GAAP to Non-GAAP Bridge
Q1 FY21 GAAP to Non-GAAP Bridge $ in millions, except Restructuring Non-operating tax rate and per Amortization of and other Acquisition- retirement related share amounts GAAP intangible assets charges related charges Tax adjustments (credits) / charges Non-GAAP Revenue $15,646 $15,646 Cost of reven
Slide 38: FY20 GAAP to Non-GAAP Bridge
FY20 GAAP to Non-GAAP Bridge Defined Non-operating $ in millions, except Amortization Restructuring Acquisition- Debt Benefit plan retirement tax rate and per of intangible and other related extinguishme settlement Tax related (credits) share amounts GAAP assets charges charges nt costs charges adju
Slide 39: Q4 FY20 GAAP to Non-GAAP Bridge
Q4 FY20 GAAP to Non-GAAP Bridge Defined Benefit $ in millions, except Amortization Restructuring Acquisition- plan settlement Non-operating tax rate and per of intangible and other related (gains) / Tax retirement related share amounts GAAP assets charges charges charges adjustments (credits) / char