Slide 1: HP Inc. Q3 FY19
HP INC. Q3 FY19 August 22, 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: Q3 FY19 highlights
Q3 FY19 highlights • Net revenue of $14.6 billion, up 0.1% from the prior-year period and up 2.1% in constant currency1 • Non-GAAP2 diluted net earnings per share of $0.58, above the previously provided outlook of $0.53 to $0.56 per share • GAAP diluted net earnings per share of $0.78, above the pre
Slide 5: Q3 FY19 results overview
Q3 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 $4,912 (5.3)% (4.5)% $765 15.6% ($64) (0.4) pts Personal Systems $9,690 3.1% 5.8% $547 5.6% $185 1.7 pts Corp investments / Other
Slide 6: Q3 FY19 mix by segment and region
Q3 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 22% Desktops 21% 6% $1.3 billion $14.6 Printing – Commercial Printing 58% of total 15.6% 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 $0.58 $0.60 Revenue Non-GAAP diluted net EPS $0.54 1 $0.53 $0.52 $0.52 $16 $0.48 $0.48 $0.50 $0.43 $0.44 $14 $0.40 $12 $0.30 $10 $13.1 $13.9 $14.5 $14.0 $14.6 $15.4 $14.7 $14.0 $14.6 $8 $0.20 3Q17 4Q1
Slide 8: Revenue growth
Revenue growth y/y growth (%) 15% 14.5% 13.1% 10.9% 11.7% 11.7% 12.8% 10.3% 10% 11.3% 9.8% 9.9% 8.8% 9.4% 5% 2.0% 2.3% 2.1% 1.3% 0.2% 0.1% 0% 3Q17 4Q17 1Q18 2Q18 3Q18 4Q18 1Q19 2Q19 3Q19 Revenue growth in constant currency 1 Revenue growth as reported 1. Adjusted to exclude the effect of foreign cur
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 3Q17 4Q17 1Q18 2Q18 3Q18 4Q18 1Q19 2Q19 3Q19 % growth billions 3Q17 4Q17
Slide 10: Personal Systems
Personal Systems Q3 FY19 Revenue Operating profit • Continued y/y revenue growth driven by commercial, with a focus on innovation $9.7 $547 Key and strategic growth areas • Consistent operational execution billion million messages • Innovation: Launched new products which include the new Envy line-u
Slide 11: Printing
Printing Q3 FY19 Revenue Operating profit • Continued revenue growth in contractual businesses including Instant Ink and MPS $4.9 $765 Key • 3D ecosystem continues to expand; opened Barcelona innovation center • Innovation: Launched Neverstop, the world’s first toner tank, designed for small billion
Slide 12: Non-GAAP financial information
Non-GAAP financial information 1 $ in millions, except Q3 FY19 Q2 FY19 Q3 FY18 per share amounts Revenue $14,603 $14,036 $14,586 Cost of revenue 11,698 80.1% 11,307 80.6% 11,898 81.6% Total OpEx 1,789 12.3% 1,692 12.0% 1,636 11.2% Operating profit $1,116 7.6% $1,037 7.4% $1,052 7.2% Interest and oth
Slide 13: 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 14: Select cash and debt balances
Select cash and debt balances Net cash (debt)1 In billions $20.0 $ in billions 3Q18 4Q18 1Q19 2Q19 3Q19 $15.0 Gross cash2 7.1 5.9 3.8 3.6 4.9 $10.0 Gross debt 7.2 6.0 5.0 5.1 5.1 $5.0 Net cash (debt)1,3 (0.2) (0.2) (1.2) (1.5) (0.2) $0.0 ($5.0) 2 Gross cash Gross debt ($10.0) 3Q18 4Q18 1Q19 2Q19 3Q1
Slide 15: Cash flow
Cash flow $ millions 5,000 $4,528 $4,154 $4,066 4,000 $3,591 3,000 $2,343 $2,171 2,000 $1,514 $1,397 1,000 0 FY18 FY19 YTD Q318 Q319 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
Slide 16: Shareholder return
Shareholder return $ millions 4,000 $3.5 billion 3,000 $2.7 billion 2,557 2,000 1,944 $0.9 billion $0.8 billion 1,000 696 533 899 734 223 240 0 FY18 FY19 YTD Q318 Q319 Shares repurchased 111.5 million 92.4 million 30.4 million 26.5 million Dividend per share $0.5572 $0.4806 $0.1393 $0.1602 Dividend
Slide 17: Outlook
Outlook Q4 FY19 net EPS guidance GAAP diluted net EPS $0.51 – $0.55 Non-GAAP diluted net EPS1 $0.55 – $0.59 Full year FY19 net EPS guidance GAAP diluted net EPS $2.31 – $2.35 Non-GAAP diluted net EPS2 $2.18 – $2.22 1. Fourth quarter fiscal 2019 non-GAAP diluted net EPS estimates exclude restructurin
Slide 18: Supplemental slides
SUPPLEMENTAL SLIDES 18
Slide 19: 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 $5.8 $5.7 $5.6 $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 11.1% $4.4 $4.4 % of revenue1 % of revenue1 10.5% 10.7% 10.0% 10.0% 10.4% $4.
Slide 20: PP&E and accounts payable
PP&E and accounts payable PP&E Accounts payable In billions In billions $3.0 6.0% $16.0 $14.8 $14.6 $14.6 $14.2 $13.8 $14.0 $13.3 $13.1 $2.4 $2.5 $12.8 $2.3 5.0% $2.4 $2.2 $2.1 $12.0 $2.0 $2.1 $1.9 4.0% % of revenue1 4.1% 4.2% $10.0 $1.8 3.8% 3.9% 3.7% 3.7% 3.8% 3.6% 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 Oct17 Jan18 Apr18 Jul18 Oct18 Jan19 Apr19 Jul19 Days receivables 29 27 30 28 30 31 35 33 Days inventory 46 43 44 46 43 42 43 44 Days payable 105 97 104 108 105 108 110 113 Cash conversion cycle 1 -30 -27 -30 -34 -32 -35 -32 -36 1. Cash conver
Slide 22: Q2 FY19 GAAP to non-GAAP bridge
Q2 FY19 GAAP to non-GAAP bridge $ in millions, except Amortization Defined Non-operating Restructuring of Acquisition- benefit plan Tax retirement tax rate and per GAAP intangible and other related charges settlement adjustments related (credits) / Non-GAAP share amounts charges assets charges charg
Slide 23: Q1 FY19 GAAP to non-GAAP bridge
Q1 FY19 GAAP to non-GAAP bridge $ in millions, except Amortization Defined Non-operating Restructuring of Acquisition- benefit plan Tax retirement tax rate and per GAAP intangible and other related charges settlement adjustments related (credits) / Non-GAAP share amounts charges assets charges charg
Slide 24: 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 25: 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 26: 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 27: 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 28: 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 29: 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 30: 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
Slide 31: Q3 FY17 GAAP to non-GAAP bridge
Q3 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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