Xerox releases Q2 2020 results

Xerox financials – pandemic havoc

John Visentin, vice chairman and chief executive officer, Xerox
John Visentin, vice chairman and chief executive officer, Xerox

Xerox Holdings Corporation announced its second-quarter 2020 financial results on 28 July 2020. Xerox reports Q2 revenue for is US$ 1.47 billion, a decrease of 35.3% year-over-year or 34.6% in constant currency or US$ 800 million. Operating cash flow from continuing operations US$ 34 million, down US$ 242 million year-over-year, and free cash flow is down to US$ 15 million from US$ 245 million year-over-year.

The adjusted operating margin of 4.2% is down 820 basis points year-over-year. The GAAP earnings per share (EPS) from continuing operations are US$ 0.11 per share, down US$ 0.49 year-over-year. And the adjusted EPS of US$ 0.15, are down from US$ 0.64 year-over-year.

“I am proud of our employees who did what was necessary during this unprecedented disruption to support our business and clients, especially those delivering essential services. While the bulk of our markets were fully or partially shut down during the quarter, our team’s financial discipline enabled us to deliver positive earnings per share and cash flow while continuing to invest in key areas of growth,” said Xerox vice chairman and CEO John Visentin. “No one can control or accurately predict what happens next. We have modeled numerous scenarios to ensure we have flexibility no matter how the pandemic continues to impact global business.”

Notably, Xerox added several Fortune 500 and public sector clients such as HM Land Registry; Ministry of Citizens’ Services, BC Mail Plus; Veterans Affairs of Montana & Wyoming; and Allianz.

The company expanded its software portfolio with the launch of the Xerox Team Availability App to support flexible workplace needs. It introduced the next-generation AltaLink C8100/B8100 Series with ConnectKey apps and automation that speeds digital transformation and supports workers in and out of the office.

Of interest to digital printers in India, Xerox has announced the Adaptive CMYK+ Kit for the Xerox Versant, an enhancement that allows print providers to offer higher value, embellishment solutions without a major investment. This adds seven special colours to the standard CMYK, claimed to make the press capable of producing ‘a million colour hues and shades,’ by adding gold, silver, white, clear and fluorescent colours.

Xerox has focused its development efforts around five ‘innovation pillars’ – 3D, sensors and the Internet of Things, clean tech, digital packaging, and Artificial Intelligence. The group said that the Covid-19 situation had accelerated trends and needs in some critical supply chain areas. “AccorXerox’s liquid metal 3D printing solution can help strengthen supply chains with locally manufactured parts, and we remain on track to deliver our first product by year end,” Xerox stated.

2023 promises an interesting ride for print in India

Indian Printer and Publisher founded in 1979 is the oldest B2B trade publication in the multi-platform and multi-channel IPPGroup. While the print and packaging industries have been resilient in the past 33 months since the pandemic lockdown of 25 March 2020, the commercial printing and newspaper industries have yet to recover their pre-Covid trajectory.

The fragmented commercial printing industry faces substantial challenges as does the newspaper industry. While digital short-run printing and the signage industry seem to be recovering a bit faster, ultimately their growth will also be moderated by the progress of the overall economy. On the other hand book printing exports are doing well but they too face several supply-chain and logistics challenges.

The price of publication papers including newsprint has been high in the past year while availability is diminished by several mills shutting down their publication paper and newsprint machines in the past four years. Indian paper mills are also exporting many types of paper and have raised prices for Indian printers. To some extent, this has helped in the recovery of the digital printing industry with its on-demand short-run and low-wastage paradigm.

Ultimately digital print and other digital channels will help print grow in a country where we are still far behind in our paper and print consumption and where digital is a leapfrog technology that will only increase the demand for print in the foreseeable future. For instance, there is no alternative to a rise in textbook consumption but this segment will only reach normality in the next financial year beginning on 1 April 2023.

Thus while the new normal is a moving target and many commercial printers look to diversification, we believe that our target audiences may shift and change. Like them, we will also have to adapt with agility to keep up with their business and technical information needs.

Our 2023 media kit is ready, and it is the right time to take stock and reconnect with your potential markets and customers. Print is the glue for the growth of liberal education, new industry, and an emerging economy. We seek your participation in what promises to be an interesting ride.

– Naresh Khanna

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