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

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Page 1: Mike Salfity, WW General Manager and Global Head …...2. Other includes: information prints, publishing, design, direct mail, photo, and decoration 2015 Graphics Market Value1 (HW

Graphics Solutions BusinessMike Salfity, WW General Manager and Global Head

March 23, 2016

Page 2: Mike Salfity, WW General Manager and Global Head …...2. Other includes: information prints, publishing, design, direct mail, photo, and decoration 2015 Graphics Market Value1 (HW

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.

Page 3: Mike Salfity, WW General Manager and Global Head …...2. Other includes: information prints, publishing, design, direct mail, photo, and decoration 2015 Graphics Market Value1 (HW

Impact of HP graphics printing is all around us

3

Page 4: Mike Salfity, WW General Manager and Global Head …...2. Other includes: information prints, publishing, design, direct mail, photo, and decoration 2015 Graphics Market Value1 (HW

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

Page 5: Mike Salfity, WW General Manager and Global Head …...2. Other includes: information prints, publishing, design, direct mail, photo, and decoration 2015 Graphics Market Value1 (HW

$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

Page 6: Mike Salfity, WW General Manager and Global Head …...2. Other includes: information prints, publishing, design, direct mail, photo, and decoration 2015 Graphics Market Value1 (HW

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

Page 7: Mike Salfity, WW General Manager and Global Head …...2. Other includes: information prints, publishing, design, direct mail, photo, and decoration 2015 Graphics Market Value1 (HW

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

Page 8: Mike Salfity, WW General Manager and Global Head …...2. Other includes: information prints, publishing, design, direct mail, photo, and decoration 2015 Graphics Market Value1 (HW

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

Page 9: Mike Salfity, WW General Manager and Global Head …...2. Other includes: information prints, publishing, design, direct mail, photo, and decoration 2015 Graphics Market Value1 (HW

Robust support attach

Compelling hardware margins

Graphics Business Model

High supplies consumption

9

Page 10: Mike Salfity, WW General Manager and Global Head …...2. Other includes: information prints, publishing, design, direct mail, photo, and decoration 2015 Graphics Market Value1 (HW

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) • • •

Page 11: Mike Salfity, WW General Manager and Global Head …...2. Other includes: information prints, publishing, design, direct mail, photo, and decoration 2015 Graphics Market Value1 (HW

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

Page 12: Mike Salfity, WW General Manager and Global Head …...2. Other includes: information prints, publishing, design, direct mail, photo, and decoration 2015 Graphics Market Value1 (HW

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

Page 13: Mike Salfity, WW General Manager and Global Head …...2. Other includes: information prints, publishing, design, direct mail, photo, and decoration 2015 Graphics Market Value1 (HW

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

Page 14: Mike Salfity, WW General Manager and Global Head …...2. Other includes: information prints, publishing, design, direct mail, photo, and decoration 2015 Graphics Market Value1 (HW

• 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

Page 15: Mike Salfity, WW General Manager and Global Head …...2. Other includes: information prints, publishing, design, direct mail, photo, and decoration 2015 Graphics Market Value1 (HW

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

Page 16: Mike Salfity, WW General Manager and Global Head …...2. Other includes: information prints, publishing, design, direct mail, photo, and decoration 2015 Graphics Market Value1 (HW

© 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.

Page 17: Mike Salfity, WW General Manager and Global Head …...2. Other includes: information prints, publishing, design, direct mail, photo, and decoration 2015 Graphics Market Value1 (HW

Q&Ahttp://www.hp.com/investor/home