Securities Analyst Meeting 2016

Transcription

1 Securities Analyst Meeting 2016

2 Forward-looking statements Today s presentations 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 from those expressed or implied by such forward-looking statements and assumptions. All statements other than statements of historical fact are statements that could be deemed 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, deferred tax assets, share repurchases, currency exchange rates or other financial items; any projections of the amount, timing or impact of cost savings or restructuring and other charges; any statements of the plans, strategies and objectives of management for future operations, including the execution of restructuring plans and any resulting cost savings, 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 ofexpectation orbelief; and any statements ofassumptions underlying any ofthe 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, clients 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 plans, including estimates and assumptions related to the cost (including any possible disruption of HP s business) and the anticipated benefits of the restructuring plans; 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, HP s Quarterly Reports on Form 10-Q for the fiscal quarters ended January 31, 2016, April 30, 2016 and July 31, 2016, and HP s other filings with the Securities and Exchange Commission. As in prior periods, the financial information set forth in today s presentations, 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 Annual Report on Form 10-K for the fiscal year ending October 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 its website from time to time, as information is updated and new information is posted.

3 Securities Analyst Meeting 2016 Securities Analyst Meeting 2016 Positioned for success Ron Coughlin President Personal Systems

4 Confident and optimistic Delivering against commitments Large and growing TAM Clear and consistent strategy Transforming Personal Systems Strong execution and building business momentum $320B +3% 1 Scaling across core, growth and future Reinvention of both PC and portfolio 1) TAM based on HP internal analysis as of June 2016 and August IDC forecasts for PC Clients, slate tablets and detachable. Projections based on currently available data and estimates. Time frame 2016; Market CAGR based on CY

5 Strong operational execution Reducing Declining error rates = costs 1 improved quality 1 Improving customer satisfaction 2 All time high share (%) 3 Significantly improved profit margin (%) 4 $500M+ FY16 savings Annual intervention rates (AIR) % Indexed to FQ1 14 (100) 100 Net Promoter Score % change across Commercial and Consumer pts % platform reduction FY14 to FY Q3 15Q3 16Q3 HP PCs +30% 19.8 C14Q4 Commercial PC PS PC C15Q2 C15Q C16Q Q Q Q3 1) HP Internal; 2) 2016 HP customer survey (timeframe 2014 vs 2016), Question: How likely are you to recommend HP based on recent purchase experience? ; 3) IDC CQ PC Tracker share includes workstation, excludes tablet and Thin client; 4) HP internal analysis; Profit margin = Operating profit.

6 Delivered against strategic priorities Core Growth Gain share in core, strategic segments +1.8pts Commercial PC Accelerate premium and gaming Scale commercial mobility +4.2pts 184% Consumer Share growth 1 premium Share growth 1 Unit growth % +5.0pts Education PC Share growth 1 PC gaming Revenue growth 2 Commercial detachable Double digit Commercial mobility Revenue growth 2 Expand commercial services Double digit Commercial services Order growth Countries Where HP services available 1) Market share from IDC WW Quarterly PC and Tablet Tracker CQ2 2016; Commercial PC excludes Detachables and Slate Tablets; Consumer Premium defined as > $800 and Excludes Detachables. Time frame CQ YoY; 2) HP internal financial data, projected FY16 based on currently available data and estimates.

7 Unleashing unprecedented innovation Core PC Chrome Premium Gaming Mobility Elite Slice Chromebook 11 HP Spectre 13 HP Omen X Elite x2 EliteBook with privacy screen Chromebook 13 HP EliteBook Folio Omen X VR PC backpack Elite x3

8 Unleashing unprecedented innovation Core PC Chrome Elite Slice Chromebook 11 once-staid HP is reinventing the PC today. And the hits just keep on coming EliteBook with privacy screen Chromebook 13 HP s Chromebook 13 is the MacBook Air of the Google world

9 Unleashing unprecedented innovation finally a Windows laptop that can give the 12-inch MacBook a run for its money Premium HP Spectre 13 Gaming HP Omen X Meet Omen X, a gaming PC that lives on the edge HP EliteBook Folio Omen X VR PC backpack

10 Unleashing unprecedented innovation Our top pick among hybrids Top-notch detachable design Game changer Mobility Elite x2 It s a phone, it s a PC, it s HP s new Elite x3 phablet Elite x3

11 $320B TAM growing at +3% with adjacencies growing faster Personal Systems TAM ($B) Displays and accessories Commercial services Commercial mobility and retail point of sales % CAGR 1.6% 3.5% 13.5% +6.8% CAGR PC clients, including consumer detachables % CY2016 CY2017 CY2018 CY2019 Source : Projections based on currently available data and estimates; PC clients includes notebooks, desktops, workstations, thin client & consumer detachables; commercial services includes DaaS, Commercial mobility devices includes slate tablets, phablets and detachables. Numbers rounded and may not equal sum total in chart. Displays & Accessories, Commercial Services, Retail point of sales and phablets sourced from HP internal analysis (as of Jun 2016). PC Clients, slate tablets and detachable sourced from August 2016 IDC forecast.

12 As projected, PC market growth rate improving Quarterly PC client and detachable market growth (units, Y/Y) 1 Pockets of growth in PC market (LTM) 0.0 Category 2 % of market 3 Market growth 3 HP share -4.5 Premium and gaming Hybrids ~45% +3% Low Low-medium -9.0 Mobile workstations Comm. PC, rest of Cons. PC, rest of ~55% -11% High High Medium C15Q1 C15Q2 C15Q3 C15Q4 C16Q1 C16Q2 C16Q3 C16Q4 Source: IDC WW Quarterly PC and Tablet Tracker 2016 CQ2; 1) Excludes Slate Tablets; 2) Premium: defined as Consumer $800+ and Commercial $1,000+ (excludes Detachable and Convertible); Hybrids: defined as Detachable and Convertible NB; 3) % of market revenue for last 12 months CQ to CQ2 2016; market growth defined as Y/Y market revenue growth for last 12 months.

13 Profound changes impacting our industry One life Device continuum Everything as a service Potential TAM expansion

14 Consistent strategy to drive profitable growth Reinvent PC Transform portfolio Our market spaces Core Growth Future Best price-feature value Most innovative Disruptive innovation Our strategic priorities 2-in-1s, Premium and gaming Multi OS Workstations and thin client Commercial mobility Device as a Service Retail point of sale 3D scanning / immersive Augmented and virtual reality Office and classroom of the future Our foundation Services and solutions Industry-leading scale / supply and quality World class supply chain, go-to-market and marketing

15 CORE Core: Pursue profitable share and pockets of growth Share gain in core PC Price-feature value Sprinkles of magic 1.7 PCs shipped per second 1 Source 1) IDC PC Tracker 2016 C2Q

16 Core: Pursue profitable share and pockets of growthcore Share gain in core PC Premium and gaming acceleration Price-feature value Sprinkles of magic Form factor and design leadership HP is reinventing the PC. And the hits just keep on coming 1 Source: 1) Forget Microsoft Surface and by all means ignore Apple's Mac. Because it is once-staid HP that is reinventing the PC today. And the hits just keep on coming. Thurrott.com, Paul Thurrott

17 Premium PC unit trend CORE Premium PC unit change YoY 1 (%) +42% EliteBook Folio G1 feels like the MacBook that could ve been -13% Spectre 13 Thinnest laptop possible without compromises CQ1 15 CQ2 15 CQ3 15 CQ4 15 CQ1 16 CQ2 16 1) Source: IDC PC Tracker CQ Premium defined as Consumer $800+ and Commercial $1,000+; excludes detachables

18 Core: Pursue profitable share and pockets of growthcore Share gain in core PC Premium and gaming acceleration Multi OS and verticals growth Form factor and design leadership >100 HP PCs shipped per min 2 HP is reinventing the PC. And the hits just keep on coming. 1 #1 in education 1 1) Source: IDC PC Tracker CQ2 2016

19 Growth: Redefining $42B 1 + commercial mobility market GROWTH 2-in-1 / Detachable Next gen compute Mobile workflow transformation Commercial IT leadership go-to-market Enterprise class mobile device Win 10 Continuum / workspace Partner and ISV ecosystem 1) Source: Commercial mobility devices includes slate tablets, phablets and detachables. Phablet TAM sourced from HP internal market analysis and projections as of information available June Slate tablets and detachable TAM sourced from IDC August Time frame CY2016.

20 Growth: Establish leadership in Device as a Service GROWTH Core services growth Device as a Service adoption +0.8pts growth in penetration in FY16 40% of customers have engaged in DaaS or would consider it in the next 12 months 1 1) IDC Survey, May 2016, PC as a Service (PCaaS) Threatens to Shake Up the PC Deployment Game: U.S. Commercial PC Survey, 2016: 40% of customers surveyed by IDC have either engaged in DaaS in the previous 12 months (26%) or would consider it in the next 12 months (14%).

21 Future: Innovate to create new categories FUTURE Immersive computing and 3D scanning Augmented and virtual reality Office and classroom of the future $9.7B market, 13% CAGR 1 $25B+ market by #1 Education market share 3 66 Learning studios Source: 1) Industry Arc, Markets & Markets, Technavio, BCC Research, HP internal analysis, CAGR; 2) Goldman Sachs: >$25B AR/VR market by 2020; 3) IDC PC Tracker CQ2 2016, excludes detachables.

22 Executing strategy will transform portfolio and drive long-term profitable growth Potential Personal Systems revenue mix 1 Core: Traditional PC FY16 FY17 FY18 FY19 FY20 FY21 FY22 FY23 FY24 FY25 1) Source: HP internal analysis revenue mix for FY16 and beyond are projections based on currently available data and estimates.

23 Executing strategy will transform portfolio and drive long-term profitable growth Potential Personal Systems revenue mix 1 Core: Growth PC Core: Traditional PC 1. Reinvent PC business Win in pockets of growth Profitable share gain FY16 FY17 FY18 FY19 FY20 FY21 FY22 FY23 FY24 FY25 1) Source: HP internal analysis revenue mix for FY16 and beyond are projections based on currently available data and estimates.

24 Executing strategy will and drive long-term profitable growth Potential Personal Systems revenue mix 1 transform portfolio Future Growth: Non PC portfolio 2. Transform portfolio Nurture future areas Scale commercial mobility and services Accelerate retail point of sale Core: Growth PC Core: Traditional PC 1. Reinvent PC business Win in pockets of growth Profitable share gain FY16 FY17 FY18 FY19 FY20 FY21 FY22 FY23 FY24 FY25 1) Source: HP internal analysis revenue mix for FY16 and beyond are projections based on currently available data and estimates.

25 Summary: Confident about our execution, optimistic about our future Large market opportunity Consistent strategy World class execution Breakthrough innovation Leading go-to-market $320B TAM 1 growing at +3% Pockets of growth Core Growth Future Cost Quality Customer satisfaction World class design Sprinkles of magic Global brand Inspired marketing Unparalleled GTM Transforming Personal Systems 1) TAM based on HP internal analysis as of June 2016 and August IDC forecasts for PC Clients, slate tablets and detachable. Projections based on currently available data and estimates. Time frame 2016; Market CAGR based on CY

26 Securities Analyst Meeting 2016 Thank you