Hp Inc. · NYSE:HPQ
Hp — Q1 FY20 Earnings Presentation
32 slides from Hp's earnings presentation, Feb 24, 2020
Slide 1: HP INC. Q1 FY20
HP INC. Q1 FY20 February 24, 2020 http://investor.hp.com
Slide 2: Forward-looking statements
Forward-looking statements This document contains forward-looking statements that involve risks, uncertainties and assumptions. If the risks or uncertainties ever materialize or the assumptions prove incorrect, the results of HP Inc. and its consolidated subsidiaries (“HP”) may differ materially fro
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: Q1 FY20 highlights
Q1 FY20 highlights • Net revenue of $14.6 billion, down 0.6% from the prior-year period and up 0.5% in constant currency1 • Non-GAAP diluted net earnings per share2 of $0.65, above the previously provided outlook of $0.53 to $0.56 per share • GAAP diluted net earnings per share of $0.46, above the p
Slide 5: Q1 FY20 results overview
Q1 FY20 results overview Non-GAAP Non-GAAP Non-GAAP Growth Growth Non-GAAP $ in millions Net revenue y/y% CC1 y/y% OP $3 OP OP OP % of rev3 $ y/y3 % of rev y/y3 Printing $4,724 (6.6)% (5.8)% $754 16.0% ($67) (0.2) pts Personal Systems $9,892 2.4% 3.8% $662 6.7% $252 2.5 pts Corp investments / Other
Slide 6: Q1 FY20 mix by segment and region
Q1 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 Systems Printing – Supplies 7% 21% Desktops 20% $1.4 billion $14.6 Printing – Commercial Printing 53% of total 16.0% OP mar
Slide 7: Revenue and non-GAAP diluted net EPS performance
Revenue and non-GAAP diluted net EPS performance 1 Revenue (Billions) Non-GAAP diluted net EPS1 $18 $0.80 $0.70 $0.65 $16 $0.60 $0.54 $0.58 $0.60 $0.52 $0.52 $0.53 $0.48 $0.48 $0.50 $14 $0.40 $12 $0.30 $0.20 $10 $0.10 $14.5 $14.0 $14.6 $15.4 $14.7 $14.0 $14.6 $15.4 $14.6 $8 $0.00 1Q18 2Q18 3Q18 4Q18
Slide 8: Revenue growth
Revenue growth y/y growth (%) 15% 14.5% 13.1% 11.7% 12.8% 10.3% 10% 9.9% 8.8% 9.4% 5% 2.0% 2.3% 2.1% 1.8% 0.2% 0.1% 0.5% 0.3% 0% 1.3% (0.6)% (5%) 1Q18 2Q18 3Q18 4Q18 1Q19 2Q19 3Q19 4Q19 1Q20 Revenue growth in constant currency 1 Revenue growth as reported 1. Adjusted to exclude the effect of foreign
Slide 9: Regional revenue trends
Regional revenue trends y/y revenue growth % y/y revenue growth in constant currency%1 Americas $8 15% $8 15% United (including U.S.) $7 10% $7 10% States 5% 5% $6 0% $6 0% (5%) (5%) $5 $5 (10%) (10%) $4 (15%) $4 (15%) billions 1Q18 2Q18 3Q18 4Q18 1Q19 2Q19 3Q19 4Q19 1Q20 % growth billions 1Q18 2Q18
Slide 10: Personal Systems
Personal Systems Q1 FY20 • Continued y/y revenue growth driven by commercial, Revenue Operating profit with a focus on innovation across the portfolio $9.9 $662 Key • Consistent operational execution and profitable share gains billion million messages • Innovation: Launched new products which includ
Slide 11: Printing
Printing Q1 FY20 • Continued revenue growth in contractual businesses including Revenue Operating profit Instant Ink and MPS $4.7 $754 • Continued good market acceptance of JetFusion 5200 series for Key the 3D market billion million messages • Innovation: Began shipment of the new LaserJet 100/200 s
Slide 12: Non-GAAP financial information
Non-GAAP financial information 1 $ in millions, except Q1 FY20 Q4 FY19 Q1 FY19 per share amounts Revenue $14,618 $15,407 $14,710 Cost of revenue 11,746 80.4% 12,483 81.0% 12,098 82.2% Total OpEx 1,690 11.5% 1,794 11.7% 1,592 10.9% Operating profit $1,182 8.1% $1,130 7.3% $1,020 6.9% Interest and oth
Slide 13: Q1 FY20 GAAP to non-GAAP 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 14: Select cash and debt balances
Select cash and debt balances $ Billions Net cash (debt)1 $20.0 $15.0 $10.0 $ Billions 1Q19 2Q19 3Q19 4Q19 1Q20 $5.0 Gross cash2 3.8 3.6 4.9 4.5 4.5 Gross debt 5.0 5.1 5.1 5.2 4.9 $0.0 Net cash (debt)1,3 (1.2) (1.5) (0.2) (0.6) (0.4) ($5.0) ($10.0) 1Q19 2Q19 3Q19 4Q19 1Q20 Gross cash 2 Gross debt 1.
Slide 15: Cash flow
Cash flow $ Millions 5,000 $4,654 $3,983 4,000 3,000 2,000 $1,285 $1,285 $1,121 $1,121 1,000 $862 $673 0 FY19 YTD FY20 Q119 Q120 Net cash provided by operations Free cash flow1 1. Free cash flow = Net cash provided by operations adjusted for net investment in leases and net investment in property, p
Slide 16: Shareholder return
Shareholder return $ Millions 4,000 $3.4 billion 3,000 2,405 2,000 1,000 $0.9 billion $1.0 billion $0.9 billion 691 720 691 970 256 249 256 0 FY19 FY20 YTD Q119 Q120 Shares repurchased 117.7 million 33.8 million 32.4 million 33.8 million Dividend per share $0.6408 $0.1762 $0.1602 $0.1762 Dividend pa
Slide 17: Outlook
Outlook Q2 FY20 net EPS guidance GAAP diluted net EPS $0.46 – $0.50 Non-GAAP diluted net EPS1 $0.49 – $0.53 Full year FY20 net EPS guidance GAAP diluted net EPS $2.03– $2.13 Non-GAAP diluted net EPS2 $2.33 – $2.43 Full year FY20 free cash flow Free cash flow3 $3.0-3.5B 1. Second quarter fiscal 2020
Slide 18: Supplemental slides
Slide 19: Inventory and accounts receivable
Inventory and accounts receivable Inventory Accounts receivable In Billions In Billions $7.0 16.0% $7.0 16.0% $6.1 $6.1 $6.0 $6.0 $5.6 $5.7 $5.7 14.0% 14.0% $5.6 $6.0 $5.4 $5.4 $5.3 $4.9 12.0% $5.1 $5.1 $5.0 $4.9 12.0% $5.0 $4.6 $4.6 % of revenue1 % of revenue1 10.7% 10.0% 10.0% 10.4% $4.0 10.0% 9.6
Slide 20: PP&E and accounts payable
PP&E and accounts payable PP&E Accounts payable In Billions In Billions $3.0 $2.8 6.0% $16.0 $2.8 $14.8 $14.6 $14.6 $14.8 $14.2 $13.8 $2.4 $2.5 $14.0 $13.1 $2.3 5.0% $12.8 $2.4 $2.2 $2.1 $2.1 4.8% 4.7% $12.0 % of revenue1 4.2% 4.0% $1.8 4.1% $10.0 3.9% 3.7% 3.7% 3.8% 3.0% $8.0 $1.2 $6.0 2.0% $4.0 $0
Slide 21: Working capital metrics
Working capital metrics 140 120 100 80 60 40 20 0 -20 -40 Apr18 Jul18 Oct18 Jan19 Apr19 Jul19 Oct19 Jan20 Days receivables 30 28 30 31 35 33 35 30 Days inventory 44 46 43 42 43 44 41 38 Days payable 104 108 105 108 110 113 107 98 Cash conversion cycle 1 -30 -34 -32 -35 -32 -36 -31 -30 1. Cash conver
Slide 22: FY19 GAAP to non-GAAP bridge
FY19 GAAP to non-GAAP bridge $ in millions, except Non-operating Amortization Restructuring and Acquisition- retirement 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 23: Q4 FY19 GAAP to non-GAAP 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 24: Q3 FY19 GAAP to non-GAAP 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 25: Q2 FY19 GAAP to non-GAAP 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 26: Q1 FY19 GAAP to non-GAAP 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 27: FY18 GAAP to non-GAAP 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 28: Q4 FY18 GAAP to non-GAAP 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 29: Q3 FY18 GAAP to non-GAAP bridge
Q3 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 30: Q2 FY18 GAAP to non-GAAP bridge
Q2 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 31: Q1 FY18 GAAP to non-GAAP bridge
Q1 FY18 GAAP to non-GAAP bridge Non-operating Amortization Defined $ in millions, except Restructuring Acquisition- U.S. tax retirement of benefit plan Tax tax rate and per GAAP and other related reform related Non-GAAP intangible settlement indemnification share amounts charges charges adjustment (
Slide 32: Thank you