Personal Systems – Positioned for Growth - HPh30261./media/Files/H/HP-IR/documents/events/09-15... · Personal Systems – Positioned for Growth ... Aged installed base drives replacement

© Copyright 2015 HP Development Company, L.P. The information contained herein is subject to change without notice.

Personal Systems – Positioned for Growth Ron Coughlin September 15,2015

© Copyright 2015 HP Development Company, L.P. The information contained herein is subject to change without notice. 1


Sizable TAM and opportunity

to grow

$340B+ market, with growth segments

Sizeable TAM market, operational leadership and disruptive innovation

Strong Share Momentum

Driven by breakthrough innovation, world class cost structure, & leading go-to-market

Clear Strategy to Expand

Leverage scale to drive share growth, expand into profitable adjacencies, and create new categories

Leading Operational

Execution

Over $1B of cost savings in last year and a negative cash conversion cycle



$340B+ Personal Systems TAM growing at 4%

3

CONSUMER DETACHABLES

DISPLAYS & ACCESSORIES

PC CLIENTS

COMMERCIAL MOBILITY DEVICES

COMMERCIAL PC & MOBILITY SERVICES

THIN CLIENT & RPOS

74

45

36 9

2014

347

200

4

66

45

24 9

+4%

2018

387

168

6

97

51

53

12

2017

372

170

5

88

49

49

11

2016

358

171

5

80

47

44 10

2015

345

176

5

‘15-’18 CAGR

New PC form factors, mobility, and adjacencies are key growth drivers

10% 14% 4%

9%

-2%

9%

PC CLIENT SOURCE: IDC WORLDWIDE QUARTERLY PC FORECAST (AUGUST 2015) NON-PC CLIENT SOURCE: HP INTERNAL MARKET ANALYSIS & PLANNING (3Q15) MOBILITY SERVICES TAM BASED ON HP PRIMARY RESEARCH (2H15) RPOS = RETAIL POINT OF SALE


A best seller available at Best Buy HP 25vx 25” LED HD Monitor

Oscar winning HP DreamColor Displays HP DreamColor LP2480zx Professional Display

HP 25vx HP DreamColor LP2480ZX


$340B+ Personal Systems TAM growing at 4%

5

CONSUMER DETACHABLES

DISPLAYS & ACCESSORIES

PC CLIENTS

COMMERCIAL MOBILITY DEVICES

COMMERCIAL PC & MOBILITY SERVICES

THIN CLIENT & RPOS

74

45

36 9

2014

347

200

4

66

45

24 9

+4%

2018

387

168

6

97

51

53

12

2017

372

170

5

88

49

49

11

2016

358

171

5

80

47

44 10

2015

345

176

5

‘15-’18 CAGR

New PC form factors, mobility, and adjacencies are key growth drivers

10% 14% 4%

9%

-2%

9%

PC CLIENT SOURCE: IDC WORLDWIDE QUARTERLY PC FORECAST (AUGUST 2015) NON-PC CLIENT SOURCE: HP INTERNAL MARKET ANALYSIS & PLANNING (3Q15) MOBILITY SERVICES TAM BASED ON HP PRIMARY RESEARCH (2H15) RPOS = RETAIL POINT OF SALE


CY15 CY16

PC market declines expected to moderate in second half 2016

2014 2015 2016

Windows XP migration NA

Currency driven pricing

Windows 8 NA Windows 10

launch Core Processor

Architecture Transition

New Form Factors

PC market Y/Y trends Factors shaping market trajectory

CY14

SOURCE: IDC WORLDWIDE QUARTERLY PC FORECAST (AUGUST 2015) 6

-15%

-10%

-5%

0%

5%

FORECAST


Clear opportunities for growth

SOURCE: INTEL, 2015

Windows 10, Skylake, and new form factors to catalyze growth

Aged installed base drives replacement opportunity

7

INSTALLED BASE OLDER THAN 4 YRS (UNITS)

589M

• 7 © Copyright 2015 HP Development Company, L.P. The information contained herein is subject to change without notice.



SOURCE: IDC WORLDWIDE QUARTERLY PC TRACKER, 2Q15 SOURCE: INTEL, 2015

AGGREGATE PC CLIENT VENDOR MIX (UNITS, %)

Average Y/Y share gain +1.9% pts Y/Y last 3 quarters

2011 2012 2013 2014 2015 2Q15 UNITS/ SHR

13.6M 21%

11.5M 18%

40.2M 61%

OTHERS

ACER, ASUS, TOSHIBA, FUJITSU

HP, LENOVO, DELL, APPLE

Further market concentration

8 • 8 © Copyright 2015 HP Development Company, L.P. The information contained herein is subject to change without notice.




NEW CATEGORIES = HOME AUTOMATION, DAAS, WEARABLES, IMMERSIVE COMPUTING

SOURCE: HP INTERNAL, MAP ( (2Q15)

PERSONAL SYSTEM GROWTH CATEGORIES (TAM, $B)

HP Inc. Comm. Services & Mobility YTD Revenue growth +21% Y/Y

PC & MOBILITY SERVICES

COMMERCIAL MOBILITY

WORKSTATION, THIN CLIENT

NEW CATEGORIES

Adjacencies & new categories

$10

$138

2018

$51

$53

$23

2014

$92

$45

$24 $9

$14

11% CAGR

9


• 9 © Copyright 2015 HP Development Company, L.P. The information contained herein is subject to change without notice.




NEW CATEGORIES = HOME AUTOMATION, DAAS, WEARABLES, IMMERSIVE COMPUTING

SOURCE: HP INTERNAL, MAP ( (2Q15)


SOURCE: HP INTERNAL

Targeted share growth plans underway

Under penetrated segments

GEOGRAPHIES

PRODUCT SEGMENTS

ATTACH

Target markets with below average share

Focus on Premium and Detachables

Accelerate Accessories & Displays

10 • 10 © Copyright 2015 HP Development Company, L.P. The information contained herein is subject to change without notice.

PC & MOBILITY SERVICES

COMMERCIAL MOBILITY

WORKSTATION, THIN CLIENT

NEW CATEGORIES

$10

$138

2018

$51

$53

$23

2014

$92

$45

$24 $9

$14

11% CAGR


Relentless focus on taking cost out, quality and customer satisfaction Solid execution in the face of significant headwinds

FY15 COMMERCIAL PC SHARE CHANGE

Growing share in a tough market

SOURCE: IDC WORLDWIDE QUARTERLY PC TRACKER, Q2 2015 TIMEFRAME COVERS CQ4’14 THROUGH CQ2’15

11

+2.1 pts



SOURCE: HP INTERNAL COMPONENT REDUCTION = NOTEBOOK ONLY CONSUMER AND COMMERCIAL INCLUDED

• Warranty, logistics, overhead cost reductions

• Relentless focus on Price-Feature-Value

• Complexity reduction

Reducing costs


FY15 Y/Y PLATFORM REDUCTION

FY15 Y/Y COMPONENT REDUCTION

-23% -18%



SOURCE:HP INTERNAL (HP FINANCIAL PLANNING & ANALYSIS) SOURCE: HP INTERNAL COMPONENT REDUCTION = NOTEBOOK ONLY CONSUMER AND COMMERCIAL INCLUDED

PS OPERATING PROFIT %

14Q1 15Q1 15Q3

3.3% 3.5%

4.0% 4.0% 3.7%

3.0% 3.0%

Relatively consistent profitability


13



SOURCE:HP INTERNAL (HP FINANCIAL PLANNING & ANALYSIS) SOURCE: HP INTERNAL COMPONENT REDUCTION = NOTEBOOK ONLY CONSUMER AND COMMERCIAL INCLUDED

* We ask customers to rate how likely they would be to recommend HP based on their recent purchase experience on an 11-point scale, from (0) not at all likely to (10) extremely likely. We take the percentage of customers that gave a rating of 9 or 10 and subtract the percentage that gave a rating of 0-6 to obtain the net promoter score (NPS).

NET PROMOTER SCORE % CHANGE (3Q15 VS FY14)

+23% +12%

Consumer Commercial

Improving customer satisfaction


14


SOURCE: : IDC WORLDWIDE QUARTERLY PC, ENTERPRISE CLIENT DEVICE AND WORKSTATION TRACKERS (CQ215). BUSINESS DESKTOP AND NOTEBOOK SHARE INCLUDES WORKSTATIONS, EXCLUDES ENTERPRISE CLIENT DEVICE

Personal Systems PC client leadership & scale

Global share leadership in major personal computing categories

Commercial Desktop

CQ215 Category Share

#1 20.7%

Commercial Notebook

#1 25.0%

Workstation

#1 42.0%

Thin Client

#1 27.9%

Consumer PC Client

#2 14.5%

HP Inc.’s Commercial PC Client Rank – CQ215

#1| #2 3+

HP Inc.’s Commercial PCs rank #1 or #2 in 44 of the top 50 countries

23% 28%

USA WW

7%

21% 24%

CAN DEU

19%

JPN CHN UK

27%

IND

34%

FRA ITA AUS

33% 31% 28%

CQ215 HP Inc.’s Commercial PC client share by top 10 markets (%)

HP ships 1.7 PCs every second

SOURCE: HP INTERNAL FINANCIAL UNITS FISCAL 4Q14-3Q15, PC CLIENTS, EXCLUDES WORKSTATIONS AND THIN CLIENTS

15


Leading edge products launched 1H15 – driving share gains

Curved display

Spectre x360

Elitebook 1020

“The HP Spectre x360 is the best HP laptop ever and a top pick for any business user” - Inc. Mag

FIRST 34” CURVED DISPLAY

“World’s thinnest lightest business-class notebook”

“HP's New Displays Push Curves, VR And A 5K Priced So Low You MUST Read This Story” - PCWorld

“HP’s ZBook 14 G2 and 15u G2 pack power for productivity” – Digital Trends

ElitePad Healthcare Tablet

“The magic is the silver ions in the white frame, which can kill germs on contact.” – betanews

ELITEBOOK THIN AND LIGHT CLAIM IS BASED ON BUSINESS CLASS NOTEBOOKS AS OF JANUARY 9, 2015 WITH >1 MILLION UNIT ANNUAL SALES HAVING PRE-INSTALLED ENCRYPTION, AUTHENTICATION, MALWARE PROTECTION AND BIOS-LEVEL PROTECTION, PASSING MIL STD 810G TESTS, WITH OPTIONAL DOCKING INCORPORATING POWER DELIVERY.

Zbook Workstation Ultrabooks™

16


Breakthrough innovation across the portfolio

Core Growth The Future

HP ELITEBOOK 1020 SPROUT BY HP

18

HP SPECTRE X360


We will empower and transform how customers work and play Personal systems strategy to drive profitable growth

19

World Class Supply Chain, Go-to-Market & Marketing Our foundation


We will empower and transform how customers work and play Personal systems strategy to drive profitable growth

Core Growth The Future

Best Price-Feature Value Most Innovative Disruptive Innovation

Leverage scale advantages to drive share World class E2E cost & quality Leading innovation Targeted country & segment growth

2 in 1s & Premium Commercial Mobility PC & Mobility Services

Immersive Computing Office, School and Home of the future

20

Our strategic priorities

Our market spaces

World Class Supply Chain, Go-to-Market & Marketing Our foundation


Y/Y SHR CHG +1.3% +1.2% +1.3% +2.9% +2.2% +1.0%

Winning in Core Play to win in Commercial, and play where attractive in Consumer

HP ELITEBOOK 1020

Growth actions • Industry leading Price-Feature-Value • Maniacal focus on end-to-end cost reduction • Leverage ecosystem partnerships • Innovation focused on sprinkles of magic

SOURCE: IDC WORLDWIDE QUARTERLY PC TRACKER (Q2 2015)

21

21.6%

22.0%

22.8% 22.7%

CQ114

20.9%

CQ215

23.0%

Commercial PC Client Share (%)


HP CHROMEBOOK 11 HP STREAM

HP ELITEBOOK 840 #1 HP COMMERCIAL NOTEBOOK

HP ELITEDESK 700 MINI

22

HP ZBOOK WORKSTATION ULTRABOOKS


Growth – new form factors & premium

Growth actions • Leading product & marketing innovation in 2-in-1s • Security and serviceability in Commercial hybrids • Premium growth through design & curated experience

SOURCE: THE NPD GROUP / RETAIL TRACKING SERVICE, NOTEBOOK COMPUTERS, JAN 2014-JUNE 2015

+16

CQ215 CQ114

27.7%

11.9%

CQ114

9.8%

CQ215

+3 13.2%

HP US Convertible Quarterly share trend (%)

HP US Premium Notebook >$999 Quarterly share trend (%)

23


Immersive Computing – the on-ramp for Blended Reality

Growth and The Future to drive long term growth

24

SOURCE: HP INTERNAL (HP FINANCIAL PLANNING & ANALYSIS) *COMMERCIAL MOBILITY INCLUDES TABLET AND DETACHABLE ** HP SERVICEONE 2.0 PROGRAM LAUNCHED NOV 11, 2014

• Consumer launched in ‘15

• Commercial launching in ‘16

Healthcare Retail Field Service

Driving expansion in Commercial Services

Expanding the Commercial Mobility Solutions portfolio

20%+ growth in Commercial Services since 2013

40% growth in number of Service One partners since launch

Growth The Future

Commercial Mobility

Revenue Growth 3Q15 Y/Y

2X

Education


HP positioned to win and capture growth opportunities

Powerful innovation Leading global brand

World class execution Inspired marketing Unparalleled go-to-

market coverage

• Product Life Cycle

management • Portfolio simplification • End to End cost structure • Account planning

discipline

19K+ RETAIL

PARTNERS

200K+ COMMERCIAL PARTNERS

26

Over 45M views Sprout by HP Presents “Jane”

#BendTheRules

Documents

Personal Systems – Positioned for Growth - HPh30261./media/Files/H/HP-IR/documents/events/09-15... · Personal Systems – Positioned for Growth ... Aged installed base drives replacement