John Visentin, CEO of Xerox
On Tuesday, Xerox (NYSE: XRX) held an Investor Day to provide the investment community and other stakeholders details on its strategic initiatives and financial plans.
“With a history of designing breakthrough technologies, Xerox is ‘made to think.’ We are taking a disciplined approach to creating the next generation of innovative technologies and intelligent work solutions to meet our clients’ evolving needs,” said John Visentin, vice chairman and CEO, Xerox.
“By simplifying our operations, instilling a culture of continuous improvement, investing in growth areas and capitalizing on new and adjacent market opportunities, we anticipate that we can achieve flat to growing revenue by 2021, while driving continued annual adjusted earnings per share expansion, including at least $4.00 of adjusted earnings per share in 2020, and delivering over $3 billion of cumulative free cash flow over the next three years,” Visentin added.
The event included:
Review of Xerox’s financial plans and three-year roadmap highlighting:
- Expected annual improvements in its revenue trajectory that result in flat to growing revenue by 2021;
- Expected adjusted operating margin expansion of more than 200 basis points over the next three years;
- Expected adjusted EPS expansion of at least 7 percent annually, including at least $4.00 of adjusted EPS in 2020;
- Expected cumulative free cash flow in excess of $3 billion over the next three years; and
- Delivering greater than 50 percent of free cash flow back to shareholders through dividends and share repurchases in each of the next three years.
A detailed review of Project Own It, the company’s enterprise-wide transformation program to simplify its business and drive greater operational efficiency while establishing a culture of continuous improvement. Project Own It is expected to generate:
- An increasingly frictionless, high-velocity business for clients;
- More significant investments, including funding of longer-term innovation, to support the company’s revenue roadmap; and
- Bottom-line annual profit growth.
Presentation of a comprehensive strategy to improve the company’s revenue trajectory. Elements of the strategy include plans to:
- Improve the company’s Core Technology business;
- Expand Services and Software;
- Capitalize on the opportunity in SMB;
- Transform the client digital experience; and
- Drive innovation and new business growth.
Details on how the company plans to re-energize innovation by leveraging its intellectual property in adjacent areas, exploring opportunities where it can gain traction in high-growth markets. The company’s Powered by Xerox strategy is designed to leverage Xerox technology to drive developments in digital packaging and print; 3D printing; AI workflow assistants; and sensors and services for the Internet of Things.
A replay of the audio webcast, along with relevant presentation materials is available here.
Non-GAAP Measures
This release refers to the following non-GAAP financial measures for the full year 2020 and for the next three-year period (2019 through 2021):
Adjusted EPS – reported GAAP EPS adjusted for restructuring and related costs (including our share of Fuji Xerox restructuring), the amortization of intangibles, non-service retirement-related costs, transaction and related costs, net and other discrete or unusual adjustments.
Adjusted operating margin – reported GAAP pre-tax margin adjusted for the EPS adjustments noted above as well as the remainder of Other expenses, net, which are primarily non-financing interest expense and certain other non-operating costs and expenses.
Free cash flow – cash flow from continuing operations less capital expenditures.
Reconciliations of the above measures to GAAP, for the periods noted, cannot be provided without unreasonable effort due to the uncertainty of the reconciliation amounts such as restructuring, non-service retirement costs, intangible amortization, other expenses, net and the related income taxes effects on those items.
###
About Xerox
In the era of intelligent work, we’re not just thinking about the future, we’re making it. Xerox Corporation (NYSE: XRX) is a technology leader focused on the intersection of digital and physical. We use automation and next-generation personalization to redefine productivity, drive growth and make the world more secure. Every day, our innovative technologies and intelligent work solutions—Powered by Xerox—help people communicate and work better.
