Hp Inc. · NYSE:HPQ
Hp — Q2 FY21 Earnings Presentation
32 slides from Hp's earnings presentation, May 27, 2021
Slide 1: Q2 FY21 Earnings announcement
HP INC. Q2 FY21 Earnings announcement May 27, 2021 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: Q2 FY21 highlights
Q2 FY21 highlights • Net revenue of $15.9 billion, up 27.3% from the prior-year period and up 25.4% in constant currency1 • Non-GAAP diluted net earnings per share2 of $0.93, above the previously provided outlook of $0.84 to $0.90 per share • GAAP diluted net earnings per share of $0.98, above the p
Slide 5: Q2 FY21 results overview
Q2 FY21 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 $5,323 28.0% 26.9% $951 17.9% $403 4.7 pts Personal Systems $10,555 27.0% 24.6% $710 6.7% $158 0.1 pts Corporate Investments /
Slide 6: Q2 FY21 mix by segment and region
Q2 FY21 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 – 5% $ 1.7 billion Supplies 21% Desktops 14% 17.9% $15.9 Printing – 4 Commercial 7% Printing 57% of total
Slide 7: Revenue and non-GAAP diluted net EPS performance
1 Revenue and non-GAAP diluted net EPS performance 1 Revenue (Billions) Non-GAAP diluted net EPS $16 $1.00 $0.92 $0.93 $14 $0.80 $12 $0.65 $0.62 $0.60 $10 $0.58 $0.60 $0.53 $0.51 $0.49 $8 $0.40 $6 $4 $0.20 $2 $14.0 $14.6 $15.4 $14.6 $12.5 $14.3 $15.3 $15.6 $15.9 $0 $0.00 2Q19 3Q19 4Q19 1Q20 2Q20 3Q2
Slide 8: Revenue growth
Revenue growth y/y growth (%) 30% 27.3% 25% 25.4% 20% 15% 10% 6.6% 5% 2.1% 7.0% 2.3% 1.8% 0.5% (0.2%) 0.1% 0% 0.2% 0.1% 0.3% (0.6%) (1.0%) (5%) (10.1%) (2.1%) (10%) (11.2%) (15%) 2Q19 3Q19 4Q19 1Q20 2Q20 3Q20 4Q20 1Q21 2Q21 Revenue growth in constant currency 1 Revenue growth as reported 1. Adjusted
Slide 9: Regional revenue trends
Regional revenue trends y/y revenue growth % y/y revenue growth in constant currency %1 $7 35% $7 35% Americas (including U.S.) 30% 30% United 25% 20% 25% States $6 $6 20% 15% 15% 10% 10% 5% $5 $5 5% 0% (5%) 0% (10%) (5%) $4 (15%) $4 (10%) billions 2Q19 3Q19 4Q19 1Q20 2Q20 3Q20 4Q20 1Q21 2Q21 % grow
Slide 10: Personal Systems
Personal Systems Q2 FY21 • PC is essential to create, consume and collaborate; continued strong Revenue Operating profit demand in notebooks, despite industry wide shortages $10.6 $710 • Strong double-digit growth in high value categories including billion million Key consumer premium, consumer peri
Slide 11: Printing
Printing Q2 FY21 Revenue Operating profit • Strong momentum continued, driven by strength of the portfolio and led by Home $5.3 billion $951 million Key messages • Double-digit growth in Instant Ink subscriptions, reaching 9.7 million subscribers 1 h 28% y/y h 27% CC 17.9% of revenue • Innovation: G
Slide 12: Non-GAAP financial information
Non-GAAP1 financial information $ in millions, except Q2 FY21 Q1 FY21 Q2 FY20 per share amounts Revenue $15,877 $15,646 $12,469 Cost of revenue 12,437 78.3% 12,322 78.8% 9,976 80.0% Total OpEx 1,997 12.6% 1,847 11.8% 1,554 12.5% Operating profit $1,443 9.1% $1,477 9.4% $939 7.5% Interest and other,
Slide 13: Q2 FY21 bridge
Q2 FY21 GAAP to non-GAAP bridge $ in millions, except Non-operating Amortization of Restructuring and Acquisition-related tax rate and per share GAAP Tax adjustments retirement related Non-GAAP intangible assets other charges charges amounts (credits) / charges Revenue $15,877 $15,877 Cost of revenu
Slide 14: Select cash and debt balances
Select cash and debt balances Net cash (debt) 1 $ Billions $8.0 $ Billions $6.0 $4.0 Gross cash $ Billions 2Q20 3Q20 4Q20 1Q21 2Q21 $2.0 Gross debt $0.0 Gross cash 2 4.1 4.9 5.1 4.2 3.4 Net cash (de ($2.0) Gross debt 5.5 6.3 6.3 6.2 6.2 ($4.0) Net cash (debt) 1,3 (1.4) (1.4) (1.1) (2.1) (2.8) ($6.0)
Slide 15: Cash flow
Cash flow $ Millions $5,000 $4,316 $4,000 $3,891 $3,000 $2,468 $2,254 $2,000 $1,446 $1,346 $1,000 $0 $(510) $(605) $(1,000) FY20 YTD FY21 Q220 Q221 1 Net cash provided by (used in) operations Free cash flow 1. Free cash flow = Net cash provided by operations adjusted for net investment in leases and
Slide 16: Shareholder return
Shareholder return $ Millions $4.1 billion $4,000 $3.5 billion $3,000 3,107 $2,000 2,988 $1.8 billion $1,000 1,610 997 $0.4 billion 489 123 252 239 $0 FY20 YTD FY21 Q220 Q221 Shares repurchased 166.5 million 113.7 million 5.6 million 53.5 million Dividend per share $0.7048 $0.3876 $0.1762 $0.1938 Di
Slide 17: Outlook
Outlook Q3 FY21 net EPS guidance GAAP diluted net EPS $0.77 – $0.81 Non-GAAP diluted net EPS1 $0.81– $0.85 FY21 net EPS guidance GAAP diluted net EPS $3.24– $3.34 Non-GAAP diluted net EPS1 $3.40 – $3.50 FY21 Free Cash Flow Guidance Free Cash Flow At least $4.0 Billion 1. Third quarter and fiscal 202
Slide 18: Supplemental slides
" Supplemental slides
Slide 19: Inventory and accounts receivable
Inventory and accounts receivable Inventory Accounts receivable In Billions In Billions $8.0 $7.5 16.0% $7.0 16.0% $7.0 $6.7 14.0% $6.0 $6.4 $6.0 14.0% $5.9 $6.0 $5.3 $5.3 $5.4 $5.3 $6.0 $5.7 $5.7 12.0% $5.1 $5.0 12.0% % of revenue1 $4.9 % of revenue1 12.3% $5.0 $4.9 11.6% % of Rev $5.0 11.1% 10.0%
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% $2.8 $2.7 $2.7 $16.0 $14.6 $14.8 $14.7 $15.0 $15.2 $2.6 $14.2 $14.3 $2.5 $2.5 $2.5 $14.0 5.0% $12.8 $2.4 4.8% 4.7% 4.8% 4.7% $12.0 PP&E 4.6% % of revenue1 4.2% 4.4% 4.2% 4.0% $1.8 $10.0 3.0% $8.0 $1.2 2.0% $6.0 $0
Slide 21: Working capital metrics
Working capital metrics 140 120 100 80 60 40 20 0 -20 -40 Jul19 Oct19 Jan20 Apr20 Jul20 Oct20 Jan21 Apr21 Days receivables 33 35 30 37 33 32 30 28 Days inventory 44 41 38 57 45 43 49 54 Days payable 113 107 98 128 108 105 109 110 Cash conversion cycle 1 1 -36 -31 -30 -34 -30 -30 -30 -28 1. Cash conv
Slide 22: Q1 FY21 bridge
Q1 FY21 GAAP to non-GAAP bridge $ in millions, except Non-operating Amortization of Restructuring and Acquisition-related tax rate and per share GAAP Tax adjustments retirement related Non-GAAP intangible assets other charges charges amounts (credits) / charges Revenue $15,646 $15,646 Cost of revenu
Slide 23: 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 24: 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 25: Q3 FY20 bridge
Q3 FY20 GAAP to non-GAAP bridge Amortization Non-operating $ in millions, except Restructuring Debt of Acquisition- Tax retirement related tax rate and per GAAP and other extinguishment Non-GAAP intangible related charges adjustments (credits) / share amounts charges costs assets charges Revenue $14
Slide 26: 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 27: 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 28: FY19 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 29: 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 30: Q3 FY19 bridge
Q3 FY19 GAAP to non-GAAP bridge Non-operating $ in millions, except Amortization Restructuring Acquisition- Defined benefit retirement Tax tax rate and per GAAP of and other related credits plan settlement related Non-GAAP adjustments share amounts intangible assets charges (charges) charges (credit
Slide 31: 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 32: Thank you
Thank you