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Graphics Solutions BusinessMike Salfity, WW General Manager and Global Head
March 23, 2016
Forward-looking statements
2 © Copyright 2016 HP Inc. The information contained herein is subject to change without notice.
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, 2016. HP assumes no
obligation and does not intend to update these forward-looking statements. HP’s Investor Relations website at http://www.hp.com/investor/home 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.
Impact of HP graphics printing is all around us
3
Graphics is a large, growing segment of the overall printing market
4
Represents all printing outside of the home or office (90% of ~51.3T printed pages worldwide)
’15-’18 CAGR
-4.5%
0.6%
1.9%
4.4%
-0.5%
1.3%238 243241
2015 2016 20172014
232 234
2018
Services & Solutions3
Business2
Home1
Graphics
Media
Graphics: Analog to digital shift
16
19
Digital
Analog
35
Graphics TAM ($B, 2016)
2-3xDigital CAGR
(2015-18)
Disruptive opportunity with digital printing
Total Printing Market (Rev $B)
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
$16B
$51B $16B
$19B
$35B
$0
$10
$20
$30
$40
$50
$60
Graphics Not Addressable Addressable
39%Packaging
$14B
15%Marketing Collateral
$5B
11%Signage
$4B
35%Other$12B
$35B (68%) of the market is currently addressable54% of the addressable market is composed of Packaging & Marketing Collateral
Addressable Market2
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
2015 Graphics Market Value1 (HW & Ink)
$35 B
Digital
Analog
46%
54%
CAGR2015-2018 1.3% 1.9%0.1%
46%
54%
5
4.7
46.6
Graphics represents ~ 90% of WW page opportunity
6
Trillion pages
51.3Trillion pages
Graphics
Home &Office
46.6
Total Graphics pages by category(trillions of pages, 2015)
Total printed pages(trillions of pages, 2015)
Source: HP internal market analysis & planning (3Q15)
1. ‘Other’ = Retail transactions, cards, games, calendars, and other
Publishing21.7
Marketing Collateral
6.6
Packaging9.6
Info Prints2.0
Direct Mail/Transaction0.8
Signage0.2
Other5.0
Decoration0.4
1
Serves agency requestsWorks on communication campaign based on Brand needs and interacts with PSP
Needs communication campaign, mailing, packaging for its products, etc.
Print service providerAgencyBrand
GSB ecosystem
7
HP is leading the analog to digital transformation
Printing outside of the home and officeProvides large-format, commercial and industrial printing solutions to PSPs, organizations and content owners
Direct Mail & Info Prints
8
Sign & Display
Packaging
Design
Decoration
Photography
PublishingMarketing Collateral
Robust support attach
Compelling hardware margins
Graphics Business Model
High supplies consumption
9
Industry’s broadest and deepest system portfolio
10
HP covers all applications with a diverse set of intellectual property
Division
ProprietaryPrintingTechnologies
ApplicationTechnical
DesignTechnical
ProductionSignage Photos Packaging Direct Mail Info Prints
Marketing Collateral
Publishing Decoration
PWP(Inkjet High-speed Printing Solutions)
PageWide(TIJ) • • • • •
Indigo
Liquid Electro Photography (LEP) • • • • • •
SIP(Scitex Industrial Presses)
Piezo (PIJ) • •
LatexThermal Inkjet (TIJ) • • •
LF Design(Large Format)
Thermal Inkjet (TIJ) & PageWide • • • •
SPS(Specialty Printing Systems)
Thermal Inkjet (TIJ) • • •
Competitive landscape: CQ4 2015 unit market shareHP is #1 in most markets where we play with different competitors in each segment
LF Design Mid Volume
Source: CQ4 2015 IDC Tracker
31%
8%
13%11%
37%
0%
15%
30%
45%
60%
75%
HP Agfa Oce EFI Others
52%
28%
13%
7%
0%
15%
30%
45%
60%
75%
HP Canon Epson Other
CY
Q4
20
15
Un
it M
arke
t S
har
e
Low Volume
29%
25%21%
8%
17%
0%
15%
30%
45%
60%
75%
HP Roland Mimaki Epson Others
11
Drive Page Growth
(Indigo LEP & Inkjet)
Scale with 2Technologies
Enable CompellingCustomer Economics
Transform Selective Industries$
R
Drive world-class quality, customer experience and enable end-to-end services and solutions
Packaging Publishing
Strategy: Driving page growth is key to driving supplies growth
1
12
Disruptive opportunity with Digital printing
Compelling customer economics
13
Print Job Run Length
Co
st p
er
Pag
e
5k 10k 15k 20k 25k
DigitalAnalog
Economical shorter runs
• Waste
• Inventory cost
• Shipping cost
• Mass personalization
• Faster time to market
• Physical to Digital
• Coca-Cola’s largest-ever YoY growth (20-ounce package) >19%1
• >5B HP Indigo printed labels, and counting
• Campaign rolled out in more than 50 countries
• Utilize 30 HP Indigo presses across 11 print companies in Europe
• Use HP ElectroInk spot color, certified by Coca-Cola, for reproducing the brand color
• Create brand pull
• Reinvigorate the brand in select countries
• Generate a viral marketing effect
Transform select industries: PackagingCoca Cola utilizes digital printing to create custom Coke bottles with your name on it
Challenge
ResultsStrategy
Diet Coke Extraordinary
collection
‘Bru’s your clan’ by Irn-Bru
1. Source: http://www.usatoday.com/story/money/2015/04/13/coca-cola-coke-soft-drinks-beverages-marketing-promotion/25732157/
Share-a-Coke 2.0
Bud Light 200,000 unique can designs
14
More success stories
Transform select industries: PublishingLexus partnered with Time magazine to create personalized ads within each magazine
Personalized Content
Personalized Content
• Partner with Time magazine to include customized campaign in magazine
• Ads personalized with name, home town, state, and more
• 31,000 print edition subscribers
• Subscribers opting for more info increased from 9% benchmark to 17%
• After the campaign, Ford adopted a similar marketing campaign
• Increase market awareness and drive customers to Lexus website
• Increase sales
StrategyChallenge Results
15
© Copyright 2016 HP Inc. The information contained herein is subject to change without notice.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 2016. Join us in Hall 17 for a personalized demonstration this May in Dusseldorf.
Q&Ahttp://www.hp.com/investor/home