Xerox Holdings Corporation · NASDAQ:XRX
Xerox — Q1 2022 Earnings Presentation
28 slides from Xerox's earnings presentation, Apr 21, 2022
Slide 1: Earnings Presentation Q1 2022 Results
Earnings Presentation Q1 2022 Results April 21, 2022
Slide 2: Forward-Looking Statements
Forward-Looking Statements This presentation, 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: Q1 2022 Key Financial Measures
Q1 2022 Key Financial Measures Revenue ($B) Adj1 Operating Margin Free Cash Flow1 ($M) $1.71 $1.67 5.2% $100 $50 2021 2022 (0.2)% 2021 2022 Operating 2022 % Change: (2.5)% @ AC, (0.7)% @ CC1 2021 2022 Cash Flow $117 $66 Revenue and Backlog Trend ($M) Adj1 Earnings (Loss) Per Share Shareholder Return
Slide 4: Strategic Initiatives to Transform Xerox
Strategic Initiatives to Transform Xerox • Continuously improve operating efficiency, revenue flow through and return Optimize operations on assets Invest in augmented reality, robotic process automation, business process for simplicity • outsourcing, analytics and system enhancements to drive effic
Slide 5: Business Update: Q1 2022
Business Update: Q1 2022 FITTLE CareAR PARC Innovation • Rebranded XFS as FITTLE, signifying • Pipeline progress: $22 million of ACV Elem Additive Manufacturing (3D Print) an increased focus on providing added; 34% sequential growth • Announced partnerships with Vertex, Oak business financing and so
Slide 6: Frequently Asked Questions
Frequently Asked Questions Are you seeing an increase in page volumes and revenue as employees return to work? We saw slight improvements in page volumes and volume-driven post sale revenue in Q1, particularly in March as the Omicron variant Return to Office waned and more businesses welcomed employ
Slide 7: Financial Results Summary
Financial Results Summary (in millions, except per share data) B/(W) % Change P&L Measures Q1 2022 YOY YOY P&L Ratios Q1 2022 B/(W) YOY (2.5)% AC Revenue $ 1,668 $ (42) Gross Margin 31.8% (390) bps (0.7)% CC1 Operating Loss – $ (3) $ (92) NM RD&E % 4.7% (40) bps Adjusted1 Other Expenses, net2 $ 57 $
Slide 8: Revenue
Revenue % Change YOY Quarterly Revenue Trend ($B) $1.79 $1.76 $1.78 $1.67 $1.71 Q1 (in millions) % Mix AC CC1 2022 Equipment $314 19% (17.6)% (16.1)% Q1 21 Q2 21 Q3 21 Q4 21 Q1 22 Post Sale $1,354 81% 1.9% 3.7% Equipment Backlog as a % of ESR: 34% 41% 59% 82% 115% Total Revenue $1,668 100% (2.5)% (0
Slide 9: Cash Flow
Cash Flow (in millions) Q1 2022 Q1 2021 Pre-tax (Loss) Income $ (89) $ 53 1 Non-Cash Add-Backs 119 123 Restructuring Payments (7) (27) Pension Contributions (38) (41) 2 Working Capital, net 93 43 Change in Finance Assets3 5 9 Other4 (17) (43) Cash from Operations $ 66 $ 117 Cash used in Investing $
Slide 10: Profitability and Earnings
Profitability and Earnings Adjusted1 Operating Margin Project Own It 7.0% 5.2% 4.8% 4.2% • Project Own It is a multi-year program to simplify our (0.2)% operations and instill Q1 21 Q2 21 Q3 21 Q4 21 Q1 22 a culture of continuous improvement • Achieved ~$1.8B of Adjusted1 Earnings (Loss) Per Share g
Slide 11: Segment Results
Segment Results Revenue and (Loss) Profit Q1 2022 B/(W) YoY Print & Financing Intersegm ent Print & Financing (in m illions) Other (FITTLE) Elim inations 1 Total Xerox Other (FITTLE) Total Xerox Total Revenue $ 1,550 $ 158 $ (40) $ 1,668 Total Revenue (2.0)% (12.2)% (2.5)% Segm ent (Loss) Profit $ (
Slide 12: Capital Structure
Capital Structure Debt and Cash Senior Unsecured Debt Maturity Ladder ($B) 2 (in billions) Q1 2022 Q4 2021 Total Debt $(4.3) $(4.2) $1.00 $0.75 $0.75 Less: FITTLE Allocated Debt 2.9 2.9 $0.30 $0.35 $0.25 Core Debt (1.4) (1.3) Less: Cash1 1.8 1.9 Net Core Cash $0.4 $0.6 • Ending net core cash of $0.4
Slide 13: 2022 Guidance
2022 Guidance Full-Year Guidance • Revenue: At least $7.1 billion of revenue, in actual currency • Free Cash Flow 1: At least $400M • Shareholder Returns: At least 50% of annual Free Cash Flow1 Our business is facing a range of operational challenges in 2022, including supply chain disruption, infla
Slide 14: Appendix
Appendix 14 20 April 2022 14
Slide 15: Operating Trends – Continuing Operations
Operating Trends – Continuing Operations 2020 2021 2022 (in millions, except EPS) FY Q1 Q2 Q3 Q4 FY Q1 Total Revenue $7,022 $1,710 $1,793 $1,758 $1,777 $7,038 $1,668 % Change (22.5)% (8.1)% 22.4% (0.5)% (7.9)% 0.2% (2.5)% CC1 % Change (22.7)% (10.4)% 18.1% (1.6)% (7.4)% (1.4)% (0.7)% Adj1 Operating
Slide 16: Non-GAAP Financial Measures
Non-GAAP Financial Measures We have reported our financial results in accordance with generally accepted accounting principles (GAAP). In addition, we have discussed our financial results using the non-GAAP measures described below. We believe these non-GAAP measures allow investors to better unders
Slide 17: Non-GAAP Financial Measures
Non-GAAP Financial Measures • Other discrete, unusual or infrequent items: We excluded the following items given their discrete, unusual or infrequent nature and their impact on our results for the period: • Non-cash Goodwill impairment charge. • Losses on early extinguishment of debt. • Contract te
Slide 18: Net (Loss) Income and EPS Reconciliation
Net (Loss) Income and EPS Reconciliation 18
Slide 19: Effective Tax Rate Reconciliation
Effective Tax Rate Reconciliation 19
Slide 20: Operating (Loss) Income and Margin Reconciliation
Operating (Loss) Income and Margin Reconciliation 20
Slide 21: Free Cash Flow Reconciliation
Free Cash Flow Reconciliation 21
Slide 22: Other Expenses, Net Reconciliation
Other Expenses, Net Reconciliation Three Months Ended March 31, (in m illio ns ) 2022 2021 Reported (1) $57 $4 Less: non-service retirement-related costs (7) (20) Less: contract termination cost - product supply 33 - Adjusted $31 $24 22
Slide 23: Net Income (Loss) and EPS Reconciliation - Historical
Net Income (Loss) and EPS Reconciliation - Historical 23
Slide 24: Operating Income (Loss) and Margin Reconciliation - Historical
Operating Income (Loss) and Margin Reconciliation - Historical 24
Slide 25: Free Cash Flow Reconciliation - Historical
Free Cash Flow Reconciliation - Historical 25
Slide 26: 2021 Quarterly Segment Results
2021 Quarterly Segment Results External Net Intersegment Total Segment % of Total Segment (in millions) Revenue Net Revenue (1) Revenues Revenue Segment Profit Margin(2) Q1 2021 Print & Services $ 1,533 $ 48 $ 1,581 90% $ 71 4.6% Financing (FITTLE) 177 3 180 10% 18 10.2% Total $ 1,710 $ 51 $ 1,761 1
Slide 27: Free Cash Flow - Guidance
Free Cash Flow - Guidance (in millions) Fy 2022 Operating Cash Flow“ Atleast $475 Less: capital expenditures (75) Free Cash Flow Atleast $400 ‘) Net cash provided by operating activities. Xerox’ ar
Slide 28: © 2022 Xerox Corporation. All rights reserved. Xerox® is a trademark of Xerox Corporation
© 2022 Xerox Corporation. All rights reserved. Xerox® is a trademark of Xerox Corporation in the United States and/or other countries.