Graphics Solutions Business. Mike Salfity, WW General Manager and Global Head March 23, 2016

Transcription

1 Graphics Solutions Business Mike Salfity, WW General Manager and Global Head March 23, 2016

2 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. ( HP ) may differ materially from those expressed or implied by such forward-looking statements and assumptions. All statements other than statements of historical fact are forward-looking statements, including but not limited to any projections of net revenue, margins, expenses, effective tax rates, net earnings, net earnings per share, cash flows, benefit plan funding, share repurchases, currency exchange rates or other financial items; any projections of the amount, timing or impact of cost savings or restructuring charges; any statements of the plans, strategies and objectives of management for future operations, as well as the execution of the restructuring plan and any resulting cost savings or revenue or profitability improvements; any statements concerning the expected development, performance, market share or competitive performance relating to products or services; any statements regarding current or future macroeconomic trends or events and the impact of those trends and events on HP and its financial performance; any statements regarding pending investigations, claims or disputes; any statements of expectation or belief; and any statements or assumptions underlying any of the foregoing. Risks, uncertainties and assumptions include the need to address the many challenges facing HP s businesses; the competitive pressures faced by HP s businesses; risks associated with executing HP s strategy; the impact of macroeconomic and geopolitical trends and events; the need to manage third-party suppliers and the distribution of HP s products and the delivery of HP s services effectively; the protection of HP s intellectual property assets, including intellectual property licensed from third parties; risks associated with HP s international operations; the development and transition of new products and services and the enhancement of existing products and services to meet customer needs and respond to emerging technological trends; the execution and performance of contracts by HP and its suppliers, customers and partners; the hiring and retention of key employees; integration and other risks associated with business combination and investment transactions; the results of the restructuring plan, including estimates and assumptions related to the cost (including any possible disruption of HP s business) and the anticipated benefits of the restructuring plan; the resolution of pending investigations, claims and disputes; and other risks that are described in HP s Annual Report on Form 10-K for the fiscal year ended October 31, 2015, and HP s other filings with the Securities and Exchange Commission. As in prior periods, the financial information set forth in this presentation, including any tax-related items, reflects estimates based on information available at this time. While HP believes these estimates to be reasonable, these amounts could differ materially from reported amounts in HP s Quarterly Report on Form 10-Q for the fiscal quarter ended January 31, HP assumes no obligation and does not intend to update these forward-looking statements. HP s Investor Relations website at contains a significant amount of information about HP, including financial and other information for investors. HP encourages investors to visit our website from time to time, as information is updated and new information is posted. 2 Copyright 2016 HP Inc. The information contained herein is subject to change without notice.

3 Impact of HP graphics printing is all around us 3

4 Graphics is a large, growing segment of the overall printing market Represents all printing outside of the home or office (90% of ~51.3T printed pages worldwide) Media Graphics Services & Solutions 3 Total Printing Market (Rev $B) CAGR 1.3% -0.5% 1.9% 4.4% Analog Digital Graphics: Analog to digital shift Graphics TAM ($B, 2016) 2-3x Digital CAGR ( ) Business 2 0.6% Disruptive opportunity with digital printing Home 1-4.5% Source: HP internal market analysis & planning (3Q15) 1. Includes HW & Supplies; 2. Includes HW & Supplies. Includes Lasers, Scanners, and Business Ink; 3. Includes services portion of Managed Print Services, HW Support, Doc Process Outsourcing, Doc Consulting and Scanning; Includes software which Includes Fleet Management, Mobility, Output Management, Security, Image/Data Capture Software, Workflow & Business Process Management Suites; Includes Pay For Print

5 $35B (68%) of the market is currently addressable 54% of the addressable market is composed of Packaging & Marketing Collateral $60 $50 $ Graphics Market Value 1 (HW & Ink) $51B $16B $35B Addressable Market 2 15% Marketing Collateral $5B 11% Signage $4B $30 $20 $10 $0 54% 46% $19B Analog $16B Digital Graphics Not Addressable Addressable CAGR % 0.1% 1.9% 39% Packaging $14B $35 B 35% Other $12B Source: HP internal market analysis & planning (3Q15) 1. Value = 2015 Hardware and ink revenues does not include media Digital Media of $13.5B is sometimes added to addressable = $48.0B 2. Other includes: information prints, publishing, design, direct mail, photo, and decoration 5

6 Graphics represents ~ 90% of WW page opportunity Total printed pages (trillions of pages, 2015) Total Graphics pages by category (trillions of pages, 2015) Home & Office 4.7 Marketing Collateral 6.6 Publishing 21.7 Packaging Graphics 51.3 Trillion pages Decoration 0.4 Other Trillion pages Info Prints 2.0 Direct Mail/Transaction 0.8 Signage 0.2 Source: HP internal market analysis & planning (3Q15) 1. Other = Retail transactions, cards, games, calendars, and other 6

7 GSB ecosystem HP is leading the analog to digital transformation Brand Needs communication campaign, mailing, packaging for its products, etc. Agency Works on communication campaign based on Brand needs and interacts with PSP Print service provider Serves agency requests 7

8 Printing outside of the home and office Provides large-format, commercial and industrial printing solutions to PSPs, organizations and content owners Photography Design Sign & Display Direct Mail & Info Prints Marketing Collateral Publishing Packaging Decoration 8

9 Graphics Business Model Compelling hardware margins High supplies consumption Robust support attach 9

10 Industry s broadest and deepest system portfolio HP covers all applications with a diverse set of intellectual property Division PWP (Inkjet High-speed Printing Solutions) Proprietary Printing Technologies Technical Design Technical Production Application Signage Photos Packaging Direct Mail Info Prints Marketing Collateral Publishing PageWide (TIJ) Decoration Indigo SIP (Scitex Industrial Presses) Latex LF Design (Large Format) SPS (Specialty Printing Systems) Liquid Electro Photography (LEP) Piezo (PIJ) Thermal Inkjet (TIJ) Thermal Inkjet (TIJ) & PageWide Thermal Inkjet (TIJ) 10

11 CY Q Unit Market Share 75% 60% 45% 30% 15% 0% Competitive landscape: CQ unit market share HP is #1 in most markets where we play with different competitors in each segment LF Design Mid Volume Low Volume 75% 75% 60% 60% 52% 45% 37% 45% 30% 15% 28% 13% 7% 31% 8% 13% 11% 30% 15% 29% 25% 21% 8% 17% 0% HP Canon Epson Other HP Agfa Oce EFI Others 0% HP Roland Mimaki Epson Others Source: CQ IDC Tracker 11

12 Strategy: Driving page growth is key to driving supplies growth Drive Page Growth 1 Scale with 2 Technologies Enable Compelling Customer Economics $ Transform Selective Industries R (Indigo LEP & Inkjet) Packaging Publishing Drive world-class quality, customer experience and enable end-to-end services and solutions 12

13 Cost per Page Compelling customer economics Disruptive opportunity with Digital printing Economical shorter runs 5k 10k 15k 20k 25k Print Job Run Length Digital Analog Waste Inventory cost Shipping cost Mass personalization Faster time to market Physical to Digital 13

14 Transform select industries: Packaging Coca Cola utilizes digital printing to create custom Coke bottles with your name on it Challenge More success stories Create brand pull Reinvigorate the brand in select countries Generate a viral marketing effect Strategy Results Share-a-Coke 2.0 Diet Coke Extraordinary collection Utilize 30 HP Indigo presses across 11 print companies in Europe Coca-Cola s largest-ever YoY growth (20-ounce package) >19% 1 Use HP ElectroInk spot color, certified by Coca-Cola, for reproducing the brand color >5B HP Indigo printed labels, and counting Campaign rolled out in more than 50 countries Bru s your clan by Irn-Bru Bud Light 200,000 unique can designs 1. Source: 14

15 Transform select industries: Publishing Lexus partnered with Time magazine to create personalized ads within each magazine Personalized Content Personalized Content Increase market awareness and drive customers to Lexus website Increase sales Challenge Strategy Partner with Time magazine to include customized campaign in magazine Ads personalized with name, home town, state, and more 31,000 print edition subscribers Results Subscribers opting for more info increased from 9% benchmark to 17% After the campaign, Ford adopted a similar marketing campaign 15

16 Experience how print is relevant in the digital world and a key growth driver for print service providers and their brand customers with HP at drupa Join us in Hall 17 for a personalized demonstration this May in Dusseldorf. 16 Copyright 2016 HP Inc. The information contained herein is subject to change without notice.

17 Q&A