NORWALK, Conn., Jan. 28, 2020 — Xerox Holdings Corporation (NYSE: XRX) announced its fourth- quarter and full-year 2019 financial results and 2020 guidance.
“We are delivering on our three-year plan. We grew earnings per share, increased cash flow and expanded adjusted operating margin for the full year, and we improved our revenue trajectory in the second half of the year as our investments in the business gained traction,” said Xerox Vice Chairman and CEO John Visentin. “We accomplished this while returning more than 70 percent of free cash flow to shareholders, paying down approximately $950 million in debt and increasing investments in our innovation areas. We are well-positioned to carry this momentum into 2020 and lead the way for long-overdue industry consolidation.”
Fourth-quarter and full-year 2019 results include the benefit from $77 million of revenue associated with an OEM license agreement with Fuji Xerox received as part of a series of transactions with FUJIFILM Holdings Corporation (FUJIFILM). This benefit was included in Xerox’s updated 2019 guidance measures filed with the U.S. Securities and Exchange Commission on Form 8-K on December 3, 2019 that reflected adjustments resulting from the transactions with FUJIFILM.
Full-Year Key Business Highlights:
- Implemented a new supply chain and supplier strategy, which included expanding Xerox’s relationship with HP and favorably structuring terms with FUJIFILM that monetized the company’s investment in Fuji Xerox at over 20 times 2019 expected aggregate cash flow.
- Expanded Xerox’s services portfolio with the launch of Intelligent Workplace Services; IT Services for the small and mid-size business market in the U.S.; and vertical services targeting healthcare, retail, insurance, and the public sector.
- Invested in several industry firsts within Xerox’s core technology business such as the Iridesse® Production Press, BaltoroTM HF Inkjet Press and Adaptive CMYK Plus Technology.
- Made progress on our three-year innovation roadmap with products for 3D printing and AI Workflow Assistants becoming commercially available in 2020 and monetizing innovations through partners.
- Added and renewed several Fortune 500 and public sector clients such as Morgan Stanley, Office Depot, Generali, BAE Systems, the Commonwealth of Massachusetts, the Texas Department of Information Resources and the California Department of State Hospitals.
The company expects continued progress on its strategic initiatives, as projected in its 2020 financial guidance:
- Revenue decline of approximately 4 percent at constant currency, excluding revenue from the $77 million OEM license in 2019.
- Adjusted operating margin of approximately 13 percent.
- GAAP EPS from continuing operations in the range of $2.80 to $2.90.
- Adjusted EPS in the range of $3.60 to $3.70.
- Operating cash flow from continuing operations of approximately $1.3 billion and free cash flow of approximately $1.2 billion.
- Company expects at least $300 million of share repurchases and return of at least 50 percent of annual free cash flow to shareholders in 2020.