Xerox announces three-year growth plan

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Xerox Corp. has outlined a three-year strategy to expand its market and boost its bottom line.

At an Investor Day meeting, Xerox Vice Chairman and CEO John Visentin said the company will focus on four key areas to position Xerox for success: optimizing operations; a focus on cash flow; re-energizing the company’s innovation; and driving revenue.

Xerox believes it has the opportunity to expand its market by $54 billion, particularly in new areas of digital packing, 3D, IoT sensors and services and artificial intelligence workflow assistants, but also within adjacent markets including digital services and software.

“No matter what it is, it starts with digital,” Visentin told investors.

The company’s Powered by Xerox initiative will leverage the document company’s intellectual property through partnerships with others, Visentin said, rather than supplying physical products. Xerox will invest in robotics, analytics and IT solutions/cloud.

“The fact that we have areas that we’re focusing on gives us confidence today to show you a three-year roadmap,” Visentin said. “(2018) was to simplify business; 2019 it’s all about transforming the portfolio and getting our sales accelerated and investing in it; 2020 is a stabilization and our road to growth in 2021.”

Visentin spoke often about how Xerox has “earned the right” to do a multitude of things, including to “go and get what we want to get.” Each of the company’s 32,000 employees has been asked to think critically, he said.

“Tell us what we don’t know. Tell us the ideas. What are areas that we can improve our business, be better?” he said.

Xerox’s three-year strategy represents a sea change from where the company stood this time last year. The tempestuous year started with the announcement of a $6.1 billion merger with Fujifilm Holdings Corp. Through a series of majority shareholder-filed lawsuits, as well as an injunction blocking the merger, Xerox abandoned the deal and replaced a number of executives, including then-CEO Jeff Jacobson, as well as its board. Fuji, in turn, sued for breach of contract.

With much of the controversy in the rear-view mirror, Xerox in January posted full-year earnings of $3.46 per share, a 1-cent increase over 2017. Net income climbed to $361 million for the year, from $195 million in the previous year. Revenues were $9.83 billion for the full year, a decrease of 4.2 percent.

But Visentin and team were optimistic in Wednesday’s investor day. As a result of simplifying operations, instilling a culture of continuous improvement and investing in growth, Visentin said Xerox expects adjusted earnings in 2019 of $3.70 to $3.80, while 2020’s per-share earnings will top $4. And he expects free cash flow in excess of $3 billion over the next three years.

“With a history of designing breakthrough technologies, Xerox is ‘made to think,’” Visentin said, referring to the company’s roadmap to stabilize and grow revenue by improving core technologies and driving innovation and new business growth. “We are taking a disciplined approach to creating the next generation of innovative technologies and intelligent work solutions to meet our clients’ evolving needs.”

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