Topic of Influence: Financial Strength · Working collaboratively to drive process ... innovate can...

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HP Managed Print Services Topic of Influence: Financial Strength February 2020

Transcript of Topic of Influence: Financial Strength · Working collaboratively to drive process ... innovate can...

Page 1: Topic of Influence: Financial Strength · Working collaboratively to drive process ... innovate can be risky. In the current business climate, organisations demand long-term partners

HP Managed Print Services Topic of Influence: Financial Strength February 2020

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IntroductionOrganisations are looking for more than just somebody to take care of their office printing needs. They want a partner who can look at their environment and processes more holistically and support the onsite and offsite printing needs of all their departments, from legal and accounting to marketing and engineering. Essentially, companies are shifting from a product-based to an outcome-based approach.

The Topics of Influence series covers the significant factors driving the agenda. In this brochure, discover how HP invests in the future to create long-term value for our clients. Other topics of influence include the following (for details, click the name to open the brochure for that topic):

• Diversity. Helping your organisation realise the benefits of diversity and inclusion as a business value.

• Doing Good. Discover how HP employees contribute to communities around the world to create a brighter future for all.

• Global. Harnessing technology internationally and optimising its use to reduce operational costs.

• Mobility. Implementing a strategy that works for your organisation as it adjusts to changing processes around paper, devices, and the workplace.

• Security. Providing the latest security technologies and processes for the advanced management of devices, data, and documents.

• Service and Delivery. Ensuring quality, predictability, and reliability with a seamless transition.

• Sustainability. Providing the services, products, and solutions to help you optimise resource use and recycling.

• Vision. Continually reinventing our company and our technologies so that industries, communities, and individuals can keep creating what matters most to them.

• Workflow. Working collaboratively to drive process efficiencies in document capture and digitisation.

• Workplace. Transforming your organisation to deliver an efficient work environment for the future.

HP has the most flexible, comprehensive, and scalable offering in the industry. HP Managed Print Services (MPS) is a comprehensive suite of hardware, software, and services delivered in a consultative engagement. With global expertise, we leverage our experience to help you meet business outcomes.

Read how HP, as your global, innovative, and strategic partner, is ready to work with you to create solutions that meet your unique needs and help position you at the forefront of your industry.

6 OF THE

TOP 10Utilities

are HP MPS clients2

7 OF THE

TOP 10

Automotive Manufacturers

are HP MPS clients1

6 OF THE

TOP 10Technology Hardware and Equipment

companies are HP MPS clients1

4 OF THE

TOP 10Telecommunications Services

companies are HP MPS clients2

6 OF THE

TOP 10Conglomerates

are HP MPS clients1

8 OF THE

TOP 10 Banksare HP MPS clients1

8 OF THE

TOP 10 Pharmaceuticalcompanies are HP MPS clients1

6 OF THE

TOP 10Insurance

companies are HP MPS clients1

1 Claims based on Forbes 2018 – Global 2000 World’s Leading Companies, published June 6, 2018; HP Internal Data.2 Claims based on Fortune 2018 – Global 500, published July 19, 2018; HP Internal Data.

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Current situationAs business innovation continues to move faster, the technologies that organisations depend on are changing at lightning speed. New solution providers emerge with promising concepts and products, but choosing from among the many untested solutions is a gamble: Which technologies have longevity potential? Which vendors have the financial stability to take an innovation beyond its initial form? In a world filled with a bewildering number of competing visions and strategies, how can a company find a reliable solutions provider—for the long term?

Managing this tech diversity requires industry foresight and partnerships with solution providers who have the proven financial stability to weather the ups and downs. Supply chains can be unpredictable. Software fads and hardware fashions come and go. Radical shifts in consumer habits and appetites happen more and more frequently. Today’s market leaders actively seek partners who can support their needs reliably while delivering innovative business solutions.

Decision-makers are sometimes reluctant to adopt a new solution, concerned with the provider’s long-term ability to back its offerings. Investing in a solution provider who lacks the financial strength to adapt and innovate can be risky. In the current business climate, organisations demand long-term partners with products that not only solve business problems, but that also integrate well with other vendors’ solutions.

Connectivity is another current concern for market leaders. While carefully navigating the field of competing technologies, organisations must also demonstrate relevance in today’s connected world. Appealing to the current generation of consumers requires an emphasis on improving life globally rather than focusing solely on profits.

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Challenges facing clients Topics trending with our clients include:

• Financial stability of tech suppliers. Organisations risk losing their investment if their new tech provider fails—not just the financial cost of products and services, but also the supporting data and the time invested in adopting those solutions.

• Grave concern over cybersecurity. Organisations are increasingly reluctant to work with a new solutions partner until they are satisfied that the security measures are robust and highly effective. Protecting sensitive customer data from attackers is just as vital as securing the organisation’s proprietary data.

• The ripple effect of supply chain disruptions. In this globalised business environment, there is very little tolerance for inefficient or costly suppliers. Organisations seek to automate ordering and just-in-time delivery to ensure they have the right supplies and materials they need, at the right time, while saving money and reducing storage expenses.

• Increased importance of reducing environmental impact. Recycling and reducing waste are no longer merely good ideas—they are business necessities. Leaders are cost-conscious and, even more, today’s leaders are world-conscious. More executives are seeking ways to have a positive global impact.

• Cost and time constraints of keeping up-to-date on constantly evolving equipment and software. More executives prefer affordable technology-as-a-service solutions, to save time spent on updating software and installing current equipment.

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VisionThe longevity of your organisation depends upon building a reliable network of suppliers and partners. When the key players are financially stable, highly efficient, and able to innovate and adapt to changes in the market, then your team can rely on the technology and systems in place. Their focus can instead be on reaching goals, such as building a solid customer base, developing new products, or securing top talent.

Your preferred solutions provider should show:

• Proven long-term viability

• Leadership with experience and vision

• Financial strength to innovate and adapt

• Global perspective and eco-friendly practices

• Ongoing investment in keeping pace with market shifts and technology improvements

While technologies may come and go, a trustworthy solutions provider that meets your high standards can provide worry-free support to your organisation’s growth—now and in the future.

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Photo

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HP MPS capabilities Since our beginning in a Palo Alto garage, HP has been a symbol of innovation. We’ve spent decades learning to scale our growth, master our supply chains and, above all, reimagine and reinvent.

Our recent efforts have been creating the strong financial results and cashflow that our shareholders have come to expect. Like every company in this constantly changing world, HP has to work ahead to maintain our position in the market, but we have never been more competitive, more focused on the customer, more innovative, and more capable of operational excellence than we are today.

• HP is a consistent, reliable, and stable place of constant innovation with an unmatched portfolio that will enable us to grow sustainably over time.

• Our strength is in our talent and our culture. HP teams are hitting their stride and creating amazing results. HP will continue our drive to preserve the best talent, best culture, and the best technology to become better, stronger, and faster.

• We are investing in the future to create long-term value. We focus on maintaining the speed, skills, and agility to meet shifting challenges and engage with customers in today’s instant, on-demand digital economy.

• Analysts and investors seeking long-term growth continue to choose HP. We constantly strive to reduce costs, improve workflows, and create new opportunities for our clients.

• Our commitment as a global citizen is unparalleled. From improving opportunities for tech education in developing areas of the globe to worldwide Earth Day educational activities, HP innovates in ways that matter to the future of our world.

“We are building from a position of strength. We are one of the world’s most iconic and trusted brands. We have highly differentiated technology and intellectual property (IP). We have huge global scale and reach. And we have a strong leadership team and talent across the company that’s united behind a high-performance, purpose-driven culture. As your CEO, I’m committed to leveraging these strengths to create new sources of value in the near term and long term.” –Enrique Lores

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Problem HP solution

• Rural Indian population does not have access to the tech education needed to improve digital literacy

• Infrastructure in rural areas often cannot support a permanent educational installation

• Even at established schools, students do not always have access to current, industry-standard equipment and software

• Digital literacy labs, built into customised buses, bring education to rural areas

• Mobile labs are entirely powered by solar panels and battery packs

• Labs are equipped with HP computers and printers, current software suites, and e-learning tools

• The programme is guided by the Indian government’s Digital India initiatives

• Young professionals have access to business tools and online courses to improve their skills

• Students are gaining valuable tech education needed to become competitive in the business world

• Artisans can use online research tools to improve their marketing reach and business success

• General business services are available to citizens without traditional access

• Digital literacy is improving in those areas where the infrastructure cannot meet the high demand for tech education

Case study Creating Global Good: HP World on Wheels

Results

The world needs leadership from organisations that are not only strong financially, but that consciously use their financial power to help important causes around the world. Because of our history and market focus, we are passionate about worldwide tech education.

Developing a global, tech-savvy workforce is key to ensuring the continued innovation that drives technological advances. HP seeks to broaden the rising generation’s access to tech education, through initiatives such as HP World on Wheels. This programme is bringing 48 mobile learning labs to bridge the tech-education gap in India’s rural areas. This fleet of self-contained digital literacy labs teaches programming and entrepreneurship to those in rural areas of India in support of the Indian government’s Digital India initiative. HP World on Wheels is forecasted to reach 6,400 Indian villages within six years and improve the access to technology for 15 million people.

“Providing people with access to learning that boosts economic opportunity and employability requires technology combined with innovative thinking.”

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Financial strengthThe top three priorities for HP continue to be meeting the needs of our customers, delivering strong results to our shareholders, and investing for the future. Our 2019 results demonstrate the value of these priorities.

FY19 highlights• $4.7 billion in net cash provided by operating activities and $4.0 billion of

free cash flow in fiscal 2019.

• HP utilised approximately $2.4 billion of cash during fiscal 2019 to repurchase approximately 118 million shares of common stock in the open market. When combined with the almost $1.0 billion of cash used to pay dividends, HP returned 85% of its free cash flow to shareholders in fiscal 2019.

FY19 revenue breakdown• Printing net revenue was down 6% year over year (down 5% in constant

currency) with a 15.6% operating margin. Total hardware units were down 9% with Commercial hardware units down 1% and Consumer hardware units down 10%. Supplies net revenue was down 7% (down 7% in constant currency).

• Personal Systems net revenue was up 4% year over year (up 5% in constant currency) with a 5.3% operating margin. Commercial net revenue increased 8% and Consumer net revenue decreased 4%. Total units were up 8% with Notebooks units up 9% and Desktops units up 5%.

Our success lies in the strength of our business segments. There is solid competition in all areas of our business on price, quality, reputation, security, and technology. Because we enable each of our business segments to pursue their own go-to-market strategy, their core competencies and collaboration make our brand strong.

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HP innovation at work3D printingHP is now a global leader in 3D printing. Products can be designed with unprecedented speed, flexibility, and efficiency. Advances in 3D printing are leading to never-before-dreamed-of products that are changing our world.

We are thrilled to be in this market and excited about its future. We introduced the world’s first commercial 3D printers for prototyping and manufacturing. Signs point that high-volume 3D printing is just around the corner.

The time is right to reinvent this $12 trillion market as it matures and becomes profitable. Managed print servicesThe HP managed print services team is reinventing the power of print. Segment revenue has grown for 20 straight quarters as result of the team’s incredible work. This team helps every client reduce print and workflow costs, increase efficiencies, secure their print infrastructure, and transition their businesses into the digital age.

Digital securityA Clark School study at the University of Maryland is one of the first to quantify the near-constant rate of hacker attacks of computers with Internet access—every 39 seconds on average.3

HP takes data security seriously, and so devotes a large proportion of profits to proactive investments in leading-edge security initiatives. As a result, HP has the broadest and deepest portfolio of security solutions in the industry.4

HP’s research on security issues and effective countermeasures has helped to raise security standards across the industry. HP is leading the competition by raising awareness and visibility for print and document security concerns.5

“It is great what HP is doing. The problem is people are not looking at security enough even with all the news of the breaches on TV and in newspapers. They are not taking the time to look at their whole network and what is going on. They are growing their networks faster than they are growing their security.” — Pat Grillo of Atrion, security solution provider

3 Cybint, “15 Alarming Cyber Security Facts and Stats”, cybintsolutions.com/cyber-security-facts-stats, Devon Milkovich, September 2019.

4 IDC MarketScape: Worldwide Security Solutions and Services Hardcopy 2019-2020 Vendor Assessment (#US44811119), December 2019.

5 Quocirca Global Print Security Landscape, 2019, Louella Fernandes, February 2019.

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Analysts cite HP as a leader in MPS

HP is a leader in the BLI PaceSetter Awards for Healthcare: Group Practices; Education: K-12; Financial Services; Retail, Mobile Print; Document Imaging Security; Reliability, MFP Accessibility, Sustainability: Programs.6

HP named a leader in IDC MarketScape Contractual Print and Document Services Vendor Assessment.7

HP: a market leading innovator and disrupter.8

HP remains a leader in Quocirca’s evaluation of the MPS market.9

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Our commitmentDuring HP’s long history of technological advancement and market prominence, we have outperformed competitors by listening with obsessive attention to the needs of our customers and partners. We will continue this focus, intent on maintaining our market leadership well into the future.

Many of our markets are consolidating, or even shrinking, yet we continue to grow in those markets. We look forward to creating new markets that will blossom and change our world for the better. As the competition intensifies, HP continues to focus on investing in the future and leading the industry by delivering on our brand promises.

Why HP?• Proven long-term viability

• Leadership with experience and vision

• Financial strength to innovate and adapt

• Global perspective and eco-friendly practices

• Ongoing investment in keeping pace with market shifts and technology improvements

6 Keypoint Intelligence, BLI PaceSetter 2017-2018; BLI PaceSetter 2018-2019; BLI PaceSetter 2019-2020 (various awards also in printer, MFP, scanner product categories).

7 IDC MarketScape: Contractual Print and Document Services Hardcopy Vendor Assessment (#US44387318), December 2018.8 Quocirca, PRINT2025: The journey to digital reinvention, Quocirca, Louella Fernandes, November 2019 (Second Edition).9 Quocirca, Managed Print Services Landscape, 2019; Louella Fernandes, December 2019.

Reports are available on hp.com/go/analystscorner.

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37 billion annual pages under an HP MPS contract

HP manages 1 millionHP is an MPS market leader - IDC14

KeyPoint Intelligence awards10

6,600 enterprise

clients

HP remains an MPS leader - Quocirca12

HP serves

solution-enabled devices (laser and ink)

Leader

for print and document security solutions and services11

#11 of best-managed companies13

10 HP has received awards in the healthcare, education, retail, financial services, security and mobility categories, as well as numerous product awards.11 IDC MarketScape: Worldwide Security Solutions and Services Hardcopy 2019-2020 Vendor Assessment (#US44811119), December 2019.12 Quocirca, Managed Print Services Landscape, 2019; Louella Fernandes, December 2019.13 The Wall Street Journal, 2019.14 “IDC MarketScape: Contractual Print and Document Services Hardcopy Vendor Assessment” (#US44387318), December 2018.

© Copyright 2018-2020 HP Development Company, L.P. The information contained herein is subject to change without notice. The only warranties for HP products and services are set forth in the express warranty statements accompanying such products and services. Nothing herein should be construed as constituting an additional warranty. HP shall not be liable for technical or editorial errors or omissions contained herein.

4AA7-2596EEW, February 2020, Rev. 3