January 26, 2021
Fourth quarter 2020 total revenue decreased 21.0% as compared to fourth quarter 2019. Supplies, paper and other sales including unbundled supplies and other sales revenues decreased 13.2% as compared to fourth quarter 2019. Xerox said that lower supplies revenues associated with lower page volume trends have been partially offset by higher IT revenues from our XBS channel and from recently acquired IT dealers outside of the U.S.
Xerox added that the decrease in supplies was significantly impacted by lower sales through indirect channels, as resellers, in response to the lower demand caused by the pandemic, have reduced their inventory purchases to manage liquidity.
Equipment sales revenue decreased 17.2% as compared to fourth quarter 2019. The COVID-19 pandemic significantly impacted Xerox’s equipment sales revenue during the fourth quarter 2020 as a result of business closures and office building capacity restrictions that slowed its customers’ purchasing decisions. Entry level device installs were down 22%, mid-range devices were down 28% and high-end device install were down 26%.
“Times of adversity require working in unison, and I couldn’t be prouder of the way our team came together. We put our strategy to the test in 2020, delivering positive earnings per share and free cash flow, while returning capital to shareholders and continuing to invest in our future. The team’s discipline allowed us to turn on a dime, tightly controlling expenses while steadfastly supporting clients,” said Xerox Vice Chairman and CEO John Visentin. “Though the impact of the pandemic continues in 2021, we expect to return to growth this year as we increase the breadth of offerings and reach new customers in existing and new businesses.”
Xerox also announced its intention to stand up its Software, Financing and Innovation organisations as separate and distinct businesses by 2022.
- The Software business will include a growing portfolio comprised of: DocuShare®, a cloud-based content management system; XMPie, software that supports multichannel marketing campaigns; and CareAR, an augmented reality business Xerox acquired in late 2020. CareAR has signed agreements with a number of major companies.
- Xerox Financial Services (XFS) will become a global payment solutions business, offering leasing for Xerox and third-party technology and office equipment. This will expand the company’s customer base, create cross-selling opportunities and provide more leasing options for small and medium-sized businesses.
- The Palo Alto Research Center (PARC) has been central in advancing the company’s innovation portfolio including 3D Printing and Digital Manufacturing, IoT Sensors and Services, and Clean Technology. Xerox installed its first 3D printer for a client in December, and IoT solutions are at work with the U.S. Defense Advanced Research Projects Agency and other clients.
In the coming months, Xerox said it will establish a $250 million (€206 million) corporate venture capital fund to invest in start-ups and early and mid-stage growth companies aligned with the company’s innovation pillars and targeted adjacencies. The corporate venture capital fund will further enhance the company’s existing innovation ecosystem and drive growth through investment, commercial partnerships and co-development of new technologies.
For 2021, Xerox is targeting revenues of at least $7.2 billion (€5.92 billion) in constant currency.
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