Slide 1: HP Inc. Q4 FY19
HP INC. Q4 FY19 November 26, 2019 http://investor.hp.com 1
Slide 2: Forward-looking statements
Forward-looking statements This presentation 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
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 FY19 highlights
Q4 FY19 highlights • Net revenue of $15.4 billion, up 0.3% from the prior-year period and up 1.8% in constant currency1 • Non-GAAP diluted net earnings per share2 of $0.60, above the previously provided outlook of $0.55 to $0.59 per share • GAAP diluted net earnings per share of $0.26, below the pre
Slide 5: FY19 highlights
FY19 highlights • Net revenue of $58.8 billion, up 0.5% from the prior-year period and up 2.0% in constant currency1 • Non-GAAP diluted net earnings per share2 of $2.24, above the previously provided outlook of $2.18 to $2.22 per share • GAAP diluted net earnings per share of $2.07, below the previo
Slide 6: Q4 FY19 results overview
Q4 FY19 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 $4,982 (6.0)% (5.1)% $777 15.6% ($72) (0.4) pts Personal Systems $10,426 3.6% 5.4% $556 5.3% $180 1.6 pts Corp investments / Other
Slide 7: FY19 results overview
FY19 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 $20,066 (3.6)% (3.0)% $3,202 16.0% $(112) 0.1 pts Personal Systems $38,694 2.7% 4.9% $1,898 4.9% $496 1.2 pts Corp investments / Othe
Slide 8: Q4 FY19 mix by segment and region
Q4 FY19 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 20% Desktops 20% 7% $1.3 billion $15.4 Printing – Commercial Printing 58% of total 15.6% OP mar
Slide 9: FY19 mix by segment and region
FY19 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 Print – Supplies 22% Desktops 21% 6% $5.1 billion $58.8 Print – Commercial4 Printing 63% of total 16.0% OP margin Amer
Slide 10: Revenue and non-GAAP diluted net EPS performance
Revenue and non-GAAP diluted net EPS performance 1 Revenue (billions) Non-GAAP diluted net EPS1 $0.60 $18 Revenue $0.58 $0.60 Non-GAAP diluted net EPS $0.54 1 $0.53 $0.52 $0.52 $16 $0.48 $0.48 $0.50 $0.44 $14 $0.40 $12 $0.30 $10 $13.9 $14.5 $14.0 $14.6 $15.4 $14.7 $14.0 $14.6 $15.4 $8 $0.20 4Q17 1Q1
Slide 11: Revenue growth
Revenue growth y/y growth (%) 15% 14.5% 13.1% 11.7% 11.7% 12.8% 10.3% 10% 11.3% 9.9% 8.8% 9.4% 5% 2.0% 2.3% 2.1% 1.8% 0.2% 0.3% 1.3% 0.1% 0% 4Q17 1Q18 2Q18 3Q18 4Q18 1Q19 2Q19 3Q19 4Q19 Revenue growth in constant currency 1 Revenue growth as reported 1. Adjusted to exclude the effect of foreign curr
Slide 12: 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 4Q17 1Q18 2Q18 3Q18 4Q18 1Q19 2Q19 3Q19 4Q19 % growth billions 4Q17 1Q18
Slide 13: Personal Systems Q4 FY19
Personal Systems Q4 FY19 Revenue Operating profit • Continued y/y revenue growth driven by commercial, with a focus on innovation across the portfolio $10.4 billion $556 Key • Consistent operational execution million messages • Innovation: Launched new products which include the new HP Elite Dragonf
Slide 14: Printing Q4 FY19
Printing Q4 FY19 Revenue Operating profit • Continued revenue growth in contractual businesses including Instant Ink and MPS $5.0 $777 Key • 3D ecosystem continues to expand; continued good market acceptance of JetFusion 5200 series billion million messages • Innovation: Began shipment of the new La
Slide 15: Non-GAAP financial information
Non-GAAP financial information 1 $ in millions, except Q4 FY19 Q3 FY19 Q4 FY18 per share amounts Revenue $15,407 $14,603 $15,366 Cost of revenue 12,483 81.0% 11,698 80.1% 12,669 82.4% Total OpEx 1,794 11.7% 1,789 12.3% 1,617 10.6% Operating profit $1,130 7.3% $1,116 7.6% $1,080 7.0% Interest and oth
Slide 16: Q4 FY19 GAAP to non-GAAP bridge
Q4 FY19 GAAP to non-GAAP bridge $ in millions, except Amortization Non-operating Restructuring of Acquisition- Tax retirement tax rate and per GAAP intangible and other related charges adjustments related (credits) / Non-GAAP share amounts charges assets charges Revenue $15,407 $15,407 Cost of reven
Slide 17: FY19 GAAP to non-GAAP bridge
FY19 GAAP to non-GAAP bridge Non- $ in millions, except Amortization operating Restructuring Acquisition- of Tax retirement tax rate and per GAAP intangible and other related adjustments related Non-GAAP share amounts charges charges assets credits / (charges) Revenue $58,756 $58,756 Cost of revenue
Slide 18: Select cash and debt balances
Select cash and debt balances Net cash (debt)1 In billions $20.0 $ in billions 4Q18 1Q19 2Q19 3Q19 4Q19 $15.0 Gross cash2 5.9 3.8 3.6 4.9 4.5 $10.0 Gross debt 6.0 5.0 5.1 5.1 5.2 $5.0 Net cash (debt)1,3 (0.2) (1.2) (1.5) (0.2) (0.6) $0.0 ($5.0) 2 Gross cash Gross debt ($10.0) 4Q18 1Q19 2Q19 3Q19 4Q1
Slide 19: Cash flow
Cash flow $ millions 5,000 $4,654 $4,528 $4,154 $3,983 4,000 3,000 2,000 $968 $843 1,000 $588 $392 0 FY18 FY19 Q418 Q419 Net cash provided by operations Free cash flow 1 1. Free cash flow = Net cash provided by operations less the net of investments in and proceeds from sales of property, plant, and
Slide 20: Shareholder return
Shareholder return $ millions 4,000 $3.5 billion $3.4 billion 3,000 2,557 2,405 2,000 1,000 $0.8 billion $0.7 billion 899 970 598 461 219 236 0 FY18 FY19 Q418 Q419 Shares repurchased 111.5 million 117.7 million 24.4 million 25.3 million Dividend per share $0.5572 $0.6408 $0.1393 $0.1602 Dividend pay
Slide 21: Outlook
Outlook Q1 FY20 net EPS guidance GAAP diluted net EPS $0.39 – $0.42 Non-GAAP diluted net EPS1 $0.53 – $0.56 Full year FY20 net EPS guidance GAAP diluted net EPS $2.00– $2.10 Non-GAAP diluted net EPS2 $2.24 – $2.32 Full year FY20 free cash flow Free cash flow At least $3.0B 1. First quarter fiscal 20
Slide 22: Supplemental slides
SUPPLEMENTAL SLIDES 22
Slide 23: Inventory and accounts receivable
Inventory and accounts receivable Inventory Account receivable In billions In billions $7.0 16.0% $7.0 16.0% $6.1 $6.1 $6.0 $6.0 $5.7 $5.6 $5.7 $5.7 14.0% 14.0% $5.6 $6.0 $5.4 $5.4 $5.3 12.0% $5.1 $5.1 12.0% $5.0 $5.0 $4.6 $4.6 $4.4 % of revenue1 % of revenue1 10.5% 10.7% 10.0% 10.0% 10.4% $4.0 10.0
Slide 24: PP&E and accounts payable
PP&E and accounts payable PP&E Accounts payable In billions In billions $3.0 6.0% $16.0 $2.8 $14.8 $14.6 $14.6 $14.8 $14.2 $13.8 $14.0 $12.8 $13.1 $2.4 $2.5 $2.3 5.0% $2.4 $2.2 $2.1 $12.0 $2.0 $2.1 4.8% 4.2% 4.0% % of revenue1 $10.0 $1.8 4.1% 3.9% 3.8% 3.7% 3.7% 3.8% 3.0% $8.0 $1.2 $6.0 2.0% $4.0 $0
Slide 25: Working capital metrics
Working capital metrics 140 120 100 80 60 40 20 0 -20 -40 Jan18 Apr18 Jul18 Oct18 Jan19 Apr19 Jul19 Oct19 Days receivables 27 30 28 30 31 35 33 35 Days inventory 43 44 46 43 42 43 44 41 Days payable 97 104 108 105 108 110 113 107 Cash conversion cycle 1 -27 -30 -34 -32 -35 -32 -36 -31 1. Cash conver
Slide 26: Q3 FY19 GAAP to non-GAAP bridge
Q3 FY19 GAAP to non-GAAP bridge $ in millions, except Amortization Defined Non-operating Restructuring Acquisition- of benefit plan Tax retirement tax rate and per GAAP intangible and other related (credits) settlement adjustments related (credits) / Non-GAAP share amounts charges charges assets cha
Slide 27: Q2 FY19 GAAP to non-GAAP bridge
Q2 FY19 GAAP to non-GAAP bridge $ in millions, except Amortization Non-operating Restructuring of Acquisition- Tax retirement tax rate and per GAAP intangible and other related charges adjustments related (credits) / Non-GAAP share amounts charges assets charges Revenue $14,036 $14,036 Cost of reven
Slide 28: Q1 FY19 GAAP to non-GAAP bridge
Q1 FY19 GAAP to non-GAAP bridge $ in millions, except Amortization Non-operating Restructuring of Acquisition- Tax retirement tax rate and per GAAP intangible and other related charges adjustments related (credits) / Non-GAAP share amounts charges assets charges Revenue $14,710 $14,710 Cost of reven
Slide 29: FY18 GAAP to non-GAAP bridge
FY18 GAAP to non-GAAP bridge $ in millions, except Amortization Defined Non-operating Restructuring Acquisition- Debt of benefit plan Tax retirement tax rate and per GAAP intangible and other related settlement extinguishment adjustments related (credits) / Non-GAAP share amounts charges charges cos
Slide 30: Q4 FY18 GAAP to non-GAAP bridge
Q4 FY18 GAAP to non-GAAP bridge $ in millions, except Amortization Defined Non-operating Restructuring Acquisition- Debt of benefit plan Tax retirement Non- tax rate and per GAAP and other related extinguishment intangible charges charges settlement costs adjustments related (credits) / GAAP share a
Slide 31: Q3 FY18 GAAP to non-GAAP bridge
Q3 FY18 GAAP to non-GAAP bridge $ in millions, except Amortization Defined Non-operating Restructuring Acquisition- Debt of benefit plan Tax retirement tax rate and per GAAP intangible and other related settlement extinguishment adjustments related (credits) / Non-GAAP share amounts charges charges
Slide 32: Q2 FY18 GAAP to non-GAAP bridge
Q2 FY18 GAAP to non-GAAP bridge $ in millions, except Amortization Defined Non-operating Restructuring Acquisition- Debt of benefit plan Tax retirement tax rate and per GAAP intangible and other related settlement extinguishment adjustments related (credits) / Non-GAAP share amounts charges charges
Slide 33: Q1 FY18 GAAP to non-GAAP bridge
Q1 FY18 GAAP to non-GAAP bridge $ in millions, except Amortization Defined Non-operating Restructuring Acquisition- US tax of benefit plan Tax retirement tax rate and per GAAP intangible and other related settlement indemnification reform related (credits) / Non-GAAP share amounts charges charges ad
Slide 34: FY17 GAAP to non-GAAP bridge
FY17 GAAP to non-GAAP bridge Valuation $ in millions, except Amortization Non-operating Restructuring Acquisition- Defined benefit allowances, net of Tax retirement Discontinued tax rate and per GAAP intangible and other related plan settlement indemnification and separation related (credits) / oper
Slide 35: Q4 FY17 GAAP to non-GAAP bridge
Q4 FY17 GAAP to non-GAAP bridge Valuation $ in millions, except Amortization Non-operating Restructuring Acquisition- Defined benefit allowances, net of Tax retirement Discontinued tax rate and per GAAP intangible and other related plan settlement indemnification and separation related (credits) / o
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