Xerox Outlines Three-Year Strategy at Investor Day; Guides to over $3 Billion of Cumulative Cash Flow and Annual EPS Expansion

NEW YORK–(BUSINESS WIRE)–lt;a href=”https://twitter.com/search?q=%24XRX&src=ctag” target=”_blank”gt;$XRXlt;/agt; lt;a href=”https://twitter.com/hashtag/Xerox?src=hash” target=”_blank”gt;#Xeroxlt;/agt;–Today Xerox (NYSE: XRX) is holding an Investor Day to provide the
investment community and other stakeholders details on its strategic
initiatives and financial plans.

“With a history of designing breakthrough technologies, Xerox is ‘made
to think.’ We are taking a disciplined
approach to creating the next generation of innovative technologies and
intelligent work solutions to meet our clients’ evolving needs,” said
John Visentin, vice chairman and CEO, Xerox.

“By simplifying our operations, instilling a culture of continuous
improvement, investing in growth areas and capitalizing on new and
adjacent market opportunities, we anticipate that we can achieve flat to
growing revenue by 2021, while driving continued annual adjusted
earnings per share expansion, including at least $4.00 of adjusted
earnings per share in 2020, and delivering over $3 billion of cumulative
free cash flow over the next three years,” Visentin added.

The event includes:

• Review of Xerox’s financial plans and three-year roadmap
  highlighting:
  • Expected annual improvements in its revenue trajectory that result
    in flat to growing revenue by 2021;
  • Expected adjusted operating margin expansion of more than 200
    basis points over the next three years;
  • Expected adjusted EPS expansion of at least 7 percent annually,
    including at least $4.00 of adjusted EPS in 2020;
  • Expected cumulative free cash flow in excess of $3 billion over
    the next three years; and
  • Delivering greater than 50 percent of free cash flow back to
    shareholders through dividends and share repurchases in each of
    the next three years.
• A detailed review of Project Own It, the company’s
  enterprise-wide transformation program to simplify its business and
  drive greater operational efficiency while establishing a culture of
  continuous improvement. Project Own It is expected to generate:
  • An increasingly frictionless, high-velocity business for clients;
  • More significant investments, including funding of longer term
    innovation, to support the company’s revenue roadmap; and
  • Bottom-line annual profit growth.
• Presentation of a comprehensive strategy to improve the company’s
  revenue trajectory. Elements of the strategy include plans to:
  • Improve the company’s Core Technology business;
  • Expand Services and Software;
  • Capitalize on the opportunity in SMB;
  • Transform the client digital experience; and
  • Drive innovation and new business growth.
• Details on how the company plans to re-energize innovation by
  leveraging its intellectual property in adjacent areas, exploring
  opportunities where it can gain traction in high-growth markets. The
  company’s Powered by Xerox^® strategy is designed to
  leverage Xerox technology to drive developments in digital packaging
  and print; 3D printing; AI workflow assistants; and sensors and
  services for the Internet of Things.

A live audio webcast of today’s event along with relevant presentation
materials will be available at https://webinars.on24.com/xerox/Investor2019 at
1 p.m. ET. A replay of the webcast will be available via the same link
shortly after the presentation.

About Xerox

In the era of intelligent work, we’re not just thinking about the
future, we’re making it. Xerox
Corporation (NYSE: XRX) is a technology leader focused on the
intersection of digital and physical. We use automation and
next-generation personalization to redefine productivity, drive growth
and make the world more secure. Every day, our innovative technologies
and intelligent work solutions—Powered by Xerox ^®—help people
communicate and work better. Discover more at www.xerox.com
and follow us on Twitter at @Xerox.

Non-GAAP Measures

This release refers to the following non-GAAP financial measures for the
full year 2020 and for the next three-year period (2019 through 2021):

• Adjusted EPS – reported GAAP EPS adjusted for restructuring and
  related costs (including our share of Fuji Xerox restructuring), the
  amortization of intangibles, non-service retirement-related costs,
  transaction and related costs, net and other discrete or unusual
  adjustments.
• Adjusted operating margin – reported GAAP pre-tax margin adjusted for
  the EPS adjustments noted above as well as the remainder of Other
  expenses, net, which are primarily non-financing interest expense and
  certain other non-operating costs and expenses.
• Free cash flow –cash flow from continuing operations less capital
  expenditures.

Reconciliations of the above measures to GAAP, for the periods noted,
cannot be provided without unreasonable effort due to the uncertainty of
the reconciliation amounts such as restructuring, non-service retirement
costs, intangible amortization, other expenses, net and the related
income taxes effects on those items.

Forward-Looking Statements

This release, and other written or oral statements made from time to
time by management contain “forward-looking statements” as defined in
the Private Securities Litigation Reform Act of 1995. The words
“anticipate”, “believe”, “estimate”, “expect”, “intend”, “will”,
“should” and similar expressions, as they relate to us, are intended to
identify forward-looking statements. These statements reflect
management’s current beliefs, assumptions and expectations and are
subject to a number of factors that may cause actual results to differ
materially. Such factors include but are not limited to: our ability to
address our business challenges in order to reverse revenue declines,
reduce costs and increase productivity so that we can invest in and grow
our business; changes in economic and political conditions, trade
protection measures, licensing requirements and tax laws in the United
States and in the foreign countries in which we do business; changes in
foreign currency exchange rates; our ability to successfully develop new
products, technologies and service offerings and to protect our
intellectual property rights; the risk that multi-year contracts with
governmental entities could be terminated prior to the end of the
contract term and that civil or criminal penalties and administrative
sanctions could be imposed on us if we fail to comply with the terms of
such contracts and applicable law; the risk that partners,
subcontractors and software vendors will not perform in a timely,
quality manner; actions of competitors and our ability to promptly and
effectively react to changing technologies and customer expectations;
our ability to obtain adequate pricing for our products and services and
to maintain and improve cost efficiency of operations, including savings
from restructuring actions; the risk that individually identifiable
information of customers, clients and employees could be inadvertently
disclosed or disclosed as a result of a breach of our security systems;
reliance on third parties, including subcontractors, for manufacturing
of products and provision of services; our ability to manage changes in
the printing environment and expand equipment placements; interest
rates, cost of borrowing and access to credit markets; funding
requirements associated with our employee pension and retiree health
benefit plans; the risk that our operations and products may not comply
with applicable worldwide regulatory requirements, particularly
environmental regulations and directives and anti-corruption laws; the
outcome of litigation and regulatory proceedings to which we may be a
party; any potential termination or restructuring of our relationship
with FUJIFILM Holdings Corporation (“Fujifilm”); and other factors that
are set forth in the “Risk Factors” section, the “Legal Proceedings”
section, the “Management’s Discussion and Analysis of Financial
Condition and Results of Operations” section and other sections of our
2017 Annual Report on Form 10-K, as well as our Quarterly Reports on
Form 10-Q and Current Reports on Form 8-K filed with the SEC. Xerox
assumes no obligation to update any forward looking statements as a
result of new information or future events or developments, except as
required by law.

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Xerox^® and Powered by Xerox^® are trademarks of
Xerox in the United States and/or other countries.

Contacts

Media:
Caroline Gransee-Linsey, Xerox, +1-203-849-2359, Caroline.Gransee-Linsey@xerox.com