SlideShare une entreprise Scribd logo
1  sur  27
Télécharger pour lire hors ligne
Earnings Presentation
February 23, 2016
Fourth Quarter and Full Year 2015
The contents of this presentation that are not statements of historical fact are
forward-looking statements and involve risks and uncertainties that are discussed in
the Safe Harbor section of our earnings releases and SEC filings. Actual results
may differ materially from such statements. Lexmark undertakes no obligation to
update any forward-looking statements.
This presentation contains non-GAAP financial measures, unless otherwise noted.
Lexmark has provided reconciliations of GAAP to non-GAAP financial measures
and a discussion of management’s use of non-GAAP financial measures on its
investor relations website located at http://investor.lexmark.com.
Safe Harbor Statement
© Lexmark International, Inc. All rights reserved. 2
Key Points
Solid Financial Results1,2
 Fourth quarter revenue in line with guidance
 Strong fourth quarter Enterprise Software (ES) operating income margin of 24%
 Fourth quarter EPS exceeded October guidance range
 Full year Core revenue (Laser + ES) grew 6% at constant currency
 16th consecutive year of MPS revenue growth, grew 7% at constant currency
Strategic Alternatives Process Progressing
 Positive interest in strategic alternatives process, continuing evaluation
 Focused on execution and our commitment to customers, partners, suppliers and
employees while unlocking shareholder value
 Demonstrated ongoing commitment to shareholders with 18th consecutive quarterly
dividend announced recently
2016 Restructuring Program Expected to Generate ~$100M Annualized Pretax Savings
 2016 restructuring program focused on optimizing the ISS structure, primarily as a result of
the continued strong U.S. dollar, aligned with the previously announced strategic
alternatives process
Next Generation Color Lasers Announced
 Next generation of color lasers and smart MFPs optimized for MPS and business process
solutions; integrated with Kofax Onboarding Agility, which automates and streamlines new
customer onboarding processes
3© Lexmark International, Inc. All rights reserved.
1) Non-GAAP, numbers rounded
2) Constant currency calculated adjusting current year and prior year results to remove estimated currency rate impacts and related hedge gains or losses
 Core revenue grew 2% at constant currency2
 Higher Value Solutions revenue (MPS + Enterprise Software) grew 19%
 Enterprise Software revenue grew $75M, operating income increased $31M
 Achieved $500M revenue target one year early
 Segment operating income margin percentage more than doubled to 24%
 Nearly achieved 25% target3 one year early
 Subscriptions and maintenance revenue grew 22% and 97%, respectively,
supporting annuity revenue base
 Deferred software revenue grew 61%, annualized subscription value grew 24%
 MPS constant currency growth more than offset by currency and Non-MPS
hardware/supplies softness
 MPS revenue of $233M, second highest reported quarter
 Generated free cash flow of $75M
 Paid 17th consecutive quarterly dividend of $22M
Fourth Quarter Financial Highlights1
4© Lexmark International, Inc. All rights reserved.
1) Non-GAAP, numbers rounded
2) Constant currency calculated adjusting current year and prior year results to remove estimated currency rate impacts and related hedge gains or losses
3) 2016 Enterprise Software operating income exit rate target of 25%
Higher Value Solutions Revenue Growing*
5
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4
Enterprise Software
16
Consecutive Years
of Revenue Growth
~$700M
Revenue Run Rate
& Expanding Margin
Managed Print Services
2011 2012 2013 2014 2015
* Non-GAAP, in millions, totals may not foot due to rounding, numbers rounded
4Q14 4Q15
$407
$341
4Q Higher Value Solutions RevenueHigher Value Solutions Revenue
% of Total Revenue 33% 41%
2011 2012 2013 2014 2015
Enterprise
Software
MPS
~$1.4B Enterprise
Software
Managed Print
Services
19%
Higher Value Solutions
Revenue Growth
Full Year 2015
© Lexmark International, Inc. All rights reserved.
Enterprise Software Tracking to Target*
$162
$239
$313
$579
2012 2013 2014 2015
Revenue
*Non-GAAP, in $ Millions, numbers rounded
-15%
-1% 5%
2013 2014 2015
Operating Income Margin
2012
6© Lexmark International, Inc. All rights reserved.
2016 Exit Rate
Target: 25%
2016 Target: $500
~24%
2015 Exit Rate
19%
~$700
2015 Exit Run Rate
Lexmark Financial Summary1
1) Non-GAAP, totals may not foot due to rounding, in millions unless otherwise noted
2) Core revenue includes Enterprise Software, MPS, and Non-MPS and excludes Inkjet Exit revenue
3) 4Q14 and FY14 YTD revised for income tax accounting revisions. See footnote slide for additional information.
Revenue $982 -5% +13% $3,596 -4%
Core2 Revenue $953 -2% +14% $3,454 0%
Gross Profit Margin 42.6% +3.7 pts +1.8 pts 42.0% +1.8 pts
Operating Expense $304 +$13 +$14 $1,156 +$53
Operating Income $114 +$4 +$50 $354 -$42
Operating Income Margin 11.6% +0.9 pts +4.2 pts 9.8% -0.8 pts
EBITDA $156 +$3 +$52 $521 -$52
EBITDA Margin 15.9% +1.1 pts +3.9 pts 14.5% -0.9 pts
Net Earnings $72 +$2 +$37 $218 -$35
EPS $1.16 +$0.023 +$0.59 $3.53 -$0.463
4Q15 YTY SEQ FY15 YTY
© Lexmark International, Inc. All rights reserved. 7
Segment Financial Summaries*
*Non-GAAP, totals may not foot due to rounding, in millions unless otherwise noted
Revenue $808 -13 % +15 % $3,017 -12 %
Laser $779 -11 % +16 % $2,875 -9 %
MPS $233 -4 % +12 % $828 +1 %
Non-MPS $547 -14 % +18 % $2,047 -12 %
Inkjet Exit $29 -50 % -7 % $143 -44 %
Gross Profit Margin 37.0 % +0.3 pts +2.5 pts 37.2 % -1.3 pts
Operating Expense $147 -$22 +$6 $586 -$65
R&D $50 -$8 +$3 $201 -$24
SG&A $97 -$13 +$3 $385 -$41
Operating Income $152 -$22 +$51 $538 -$126
Operating Income Margin 18.8 % +0.2 pts +4.4 pts 17.8 % -1.6 pts
Perceptive Software 2Q14 YTY SEQEnterprise Software 4Q15 YTY SEQ FY15 YTY
ISS 4Q15 YTY SEQ FY15 YTY
Revenue $174 +75 % +5 % $579 +85 %
Licenses $55 +112 % +28 % $170 +110 %
Subscriptions $13 +22 % -10 % $49 +56 %
Maintenance $74 +97 % +1 % $237 +99 %
Professional Services / Other $31 +26 % -7 % $122 +50 %
Gross Profit Margin 74.5 % +7.4 pts +1.0 pts 72.7 % +3.1 pts
Operating Expense $88 +$32 -$3 $311 +$107
R&D $24 +$6 -$3 $92 +$20
SG&A $64 +$26 -$1 $218 +$88
Operating Income $42 +$31 +$12 $110 +$95
Operating Income Margin 23.9 % +13.2 pts +5.7 pts 19.0 % +14.4 pts
© Lexmark International, Inc. All rights reserved. 8
Revenue1
Total $982 +13% -5% 0% $3,596 -4% +2%
Core2 $953 +14% -2% +2% $3,454 0% +6%
Enterprise Software $174 +5% +75% +83% $579 +85% +93%
Laser $779 +16% -11% -7% $2,875 -9% -3%
Higher Value Solutions3 $407 +9% +19% +26% $1,407 +24% +32%
Enterprise Software $174 +5% +75% +83% $579 +85% +93%
MPS $233 +12% -4% +1% $828 +1% +7%
Inkjet Exit $29 -7% -50% -48% $143 -44% -42%
Geographic
U.S. $455 +9% +2% +2% $1,668 +4% +4%
EMEA $367 +28% -7% -1% $1,280 -7% +2%
Rest of World $160 -2% -15% -4% $648 -12% 0%
4Q15 SEQ YTY YTY CC4 FY15 YTY YTY CC4
• Total full year revenue grew 2% at constant currency4 YTY
• Full year Core revenue grew 6% at constant currency YTY
• Full year Higher Value Solutions revenue at constant currency grew 32%, comprised of
93% growth in Enterprise Software and 7% growth in MPS
• Worldwide laser supplies channel inventory within 6 to 10 weeks target range
1) Non-GAAP, totals may not foot due to rounding, in millions unless otherwise noted, numbers rounded
2) Core revenue includes Enterprise Software, MPS, and Non-MPS revenue and excludes Inkjet Exit revenue
3) Higher Value revenue includes Enterprise Software and MPS
4) Constant currency calculated adjusting current year and prior year results to remove estimated currency rate impacts and related hedge gains or losses
© Lexmark International, Inc. All rights reserved. 9
Product Revenue1
Laser Hardware -11% -18% +8%
Large Workgroup -8% -10% +3%
Small Workgroup -29% -29% 0%
4Q15 YTY Rev Units AUR
© Lexmark International, Inc. All rights reserved. 10
Total $982 -5% +13% $3,596 -4%
Hardware2 $210 -11% +27% $706 -10%
Large Workgroup5 $183 -8% +29% $602 -8%
Small Workgroup6 $25 -29% +15% $94 -23%
Other $2 -24% +29% $9 +7%
Supplies3 $551 -15% +12% $2,129 -13%
Laser $522 -11% +13% $1,986 -9%
Inkjet Exit $29 -50% -7% $142 -45%
Software & Other4 $221 +48% +5% $762 +53%
Software $156 +53% +5% $536 +71%
Other $65 +38% +7% $226 +25%
4Q15 YTY SEQ FY15 YTY Comments
Laser Hardware -10% -12% +2%
Large Workgroup -8% -6% -2%
Small Workgroup -23% -20% -4%
FY15 YTY Rev Units AUR
4Q15 FY15
Enterprise Software +75% +85%
1) Non-GAAP, totals may not foot due to rounding, in millions unless otherwise noted, numbers rounded
2) Includes laser, inkjet, and dot matrix hardware, associated features sold on a unit basis or through a managed service agreement and miscellaneous non-printing hardware related to a software solution
3) Includes laser, inkjet, and dot matrix supplies and associated supplies services sold on a unit basis or through a managed service agreement
4) Includes parts and service related to hardware maintenance and includes software licenses and the associated software maintenance services sold on a unit basis or as a subscription service
5) Includes departmental, large workgroup, and medium workgroup lasers, dot matrix printers and features
6) Includes small workgroup lasers and personal lasers
$3.6B
Total
Revenue
Supplies
Hardware
Software & Other
$2.9B
Laser
Revenue
Laser Supplies
FY15
$0.6B
Enterprise
Software
Subscriptions
MaintenanceLicenses
Professional Services & OtherLaser Hardware
Gross Profit Margin*
11
 4Q gross profit margin improved 370 bps YTY driven by increased mix of
Enterprise Software
 Enterprise Software gross profit margin increased 740 bps, primarily driven by the
addition of Kofax
 ISS gross profit margin increased 30 bps, primarily driven by improved hardware
margins
• 4Q gross profit margin increased 180 bps sequentially, driven by ISS
 Sequential growth in ISS gross profit margin primarily driven by higher hardware and
supplies margin
 Enterprise Software gross profit margin increased 100 bps, primarily driven by
favorable product mix
Total 42.6% +370 bps +180 bps 42.0% +180 bps
Enterprise Software 74.5% +740 bps +100 bps 72.7% +310 bps
ISS 37.0% +30 bps +250 bps 37.2% -130 bps
4Q15 YTY SEQ FY15 YTY
* Non-GAAP, totals may not foot due to rounding, in millions unless otherwise noted
© Lexmark International, Inc. All rights reserved.
Operating Expense1
1) Non-GAAP, totals may not foot due to rounding, in millions unless otherwise noted
2) All Other expenses are for corporate functions including IT, finance, human resources, facilities, legal, corporate staff, and total company equity compensation
4Q15 YTY SEQ FY15 YTY
Total $304 +$13 +$14 $1,156 +$53
Enterprise Software $88 +$32 -$3 $311 +$107
ISS $147 -$22 +$6 $586 -$65
All Other2 $69 +$3 +$11 $260 +$10
R&D $81 -$4 $0 $325 -$8
Enterprise Software $24 +$6 -$3 $92 +$20
ISS $50 -$8 +$3 $201 -$24
All Other $7 -$1 -$1 $31 -$4
SG&A $224 +$18 +$14 $832 +$61
Enterprise Software $64 +$26 -$1 $218 +$88
ISS $97 -$13 +$3 $385 -$41
All Other $62 +$4 +$12 $228 +$14
• Disciplined cost and expense management, restructuring and lowered performance-based
compensation helped mitigate expense growth YTY
© Lexmark International, Inc. All rights reserved. 12
Operating Income1
• 4Q15 sequential increase mostly driven by ISS
• 4Q15 YTY increase driven by Enterprise Software
• FY15 Enterprise Software Operating Income increase of $95M YTY, more than
offset by currency and Inkjet Exit
Operating Income % 11.6% +90 bps +420 bps 9.8% -80 bps
Operating Income $ $114 +$4 +$50 $354 -$42
Enterprise Software $42 +$31 +$12 $110 +$95
ISS $152 -$22 +$51 $538 -$126
All Other2 -$80 -$5 -$12 -$293 -$12
4Q15 YTY SEQ FY15 YTY
© Lexmark International, Inc. All rights reserved. 13
1) Non-GAAP, totals may not foot due to rounding, in millions unless otherwise noted
2) All Other expenses are for corporate functions including IT, finance, human resources, facilities, legal, corporate staff and total company equity compensation
 Currency headwind of ~$0.28 per share and ~$1.53 per share year to year in
4Q15 and FY15, respectively
Earnings1
14
1. Non-GAAP, totals may not foot due to rounding, EBITDA, net earnings and average diluted shares outstanding in millions, numbers rounded
2. Adjusted EBITDA defined as net earnings plus net interest expense (income), provision for income taxes, depreciation and amortization, excluding restructuring charges and project costs, acquisition and divestiture related adjustments, pension plan
actuarial gains or losses, and remediation-related adjustments
3. 4Q14 and FY14 revised for income tax accounting revisions. See footnote slide for additional information
EBITDA2 $156 +$3 +$52 $521 -$52
Net Earnings3 $72 +$2 +$37 $218 -$35
EPS3 $1.16 +$0.02 +$0.59 $3.53 -$0.46
Avg. diluted shares outstanding 61.9 +0.3 +0.2 61.6 -1.6
4Q15 YTY SEQ FY15 YTY
© Lexmark International, Inc. All rights reserved.
4Q15 EPS Guidance Midpoint $1.10
Operational Performance +0.06
4Q15 EPS $1.16
4Q14 EPS2 $1.14
Operational Performance +0.32
Approximate Currency Impact -0.28
Non-Operational Items -0.02
4Q15 EPS $1.16
+ Enterprise Software improvement
+ Laser improvement
+ Belgium copyright levy accrual release ($5M)
- Inkjet Exit decline
4Q15 Guidance vs. Actual
4Q15 EPS Overview1
1) Non-GAAP, numbers rounded
2) FY14 EPS revised for income tax accounting revisions. See footnote slide for additional information
4Q14 vs. 4Q15
© Lexmark International, Inc. All rights reserved. 15
+ Belgium copyright levy accrual release ($5M)
+ Laser performance
FY14 EPS2 $3.99
Operational Performance +1.06
Approximate Currency Impact -1.53
Non-Operational -0.08
Lower Average Diluted Shares Outstanding +0.09
FY15 EPS $3.53
+ Enterprise Software improvement
+ Laser improvement
- Inkjet Exit decline
FY15 EPS Overview1
1) Non-GAAP, numbers rounded
2) 4Q14 EPS revised for income tax accounting revisions. See footnote slide for additional information
FY14 vs. FY15
© Lexmark International, Inc. All rights reserved. 16
Balance Sheet and Cash Flow1
1) GAAP, totals may not foot due to rounding, in millions unless otherwise noted, numbers rounded
2) Includes current short-term marketable securities
3) Net cash provided by operating activities
4) Free cash flow = cash from operations – capital expenditures + proceeds from the sale of fixed assets
5) Includes non-GAAP adjustments of approximately $38 million
6) Long Term Bonds of $700 million, net of unamortized debt issuance cost and original issue discount
• Generated Cash from Operations of $103M in the fourth quarter
• Credit facilities include $500M Revolver, $100M Uncommitted Facility, $125M A/R Program
• Maintaining an Investment Grade Debt Rating
Credit Facilities $364
Long Term Bonds6 $697
Total Debt $1,061
Highlights
Cash Conversion Days
Debt
Dec. 31, 2015
Cash2 $158
U.S. Cash $50
Non-U.S. Cash $108
Net cash / (debt) ($903)
4Q15 Cash Flow
Cash from Operations3 $103
Free Cash Flow4 $75
Depreciation & Amortization5 $80
Capital Expenditures -$29
Cash Flow Impact
Accounts Receivable +$8
Inventory +$26
Accounts Payable +$23
Balance Sheet & 4Q15 Cash Flow
© Lexmark International, Inc. All rights reserved. 17
4Q14 1Q15 2Q15 3Q15 4Q15
Receivables 37 42 47 47 40
Inventory 34 44 48 44 36
Payables 72 92 85 81 77
Cash
Conversion
(1) (6) 10 9 (1)
 As previously announced, Lexmark’s Board of Directors has authorized the exploration of
strategic alternatives to enhance shareholder value and unlock the intrinsic value created by the
company
 On the company’s third quarter 2015 earnings call, Lexmark indicated that these alternatives
could include a sale of the entire company or spin-off of a portion of the company to either
strategic or financial buyers
 Lexmark is very pleased with both the progress and positive interest in the company’s strategic
alternatives process, and is continuing its evaluation
 Given the ongoing exploration of strategic alternatives, the company is not providing guidance,
will not host a conference call with securities analysts and investors in conjunction with today’s
earnings release, and is remaining in its quiet period
 Lexmark does not intend to comment on the exploration process or disclose further developments
until the Board approves a specific transaction or otherwise concludes the exploration of strategic
alternatives. No assurance can be given of the outcome of the strategic alternatives review
process, including whether any transaction will result or the associated timing or terms
 During this process, Lexmark remains squarely focused on the execution of its strategy,
commitment to its customers, partners, suppliers and employees and driving value for our
shareholders
Positive Interest in Strategic Alternatives Process
18© Lexmark International, Inc. All rights reserved.
Restructuring Summary
19© Lexmark International, Inc. All rights reserved.
Charges Cash Cost3
FY15 $40 $0
FY16 $25 $59
Total Program $65 $59
1) Restructuring-related charges for 2016 actions and related project costs only, in millions unless otherwise noted
2) Restructuring-related charges for July 2015 actions and related project costs only, in millions unless otherwise noted
3) Cash restructuring charges are estimates based on timing of related activities
4) Beginning in FY17, estimated allocation of 90% operating expense / 10% cost of goods sold
2016
Program1
Cash Savings
FY16 $67
FY17 & Ongoing Annual4 $100
Charges Cash Cost3
FY15 $36 $8
FY16 $19 $47
Total Program $55 $552015
Program2
Cash Savings
FY15 $2
FY16 $55
FY17 & Ongoing Annual4 $65
• Revenue trends
• Deferred software revenue and annualized subscription value
• Deferred software revenue trend by quarter
• Outstanding shares / dividends
• Currency
Supplemental Materials
© Lexmark International, Inc. All rights reserved. 20
Revenue Trends1
1) Non-GAAP, totals may not foot due to rounding, in millions unless otherwise noted. Periodic modifications to category definitions may change previously stated values
2) Includes laser, inkjet, and dot matrix hardware, and associated features sold on a unit basis or through a managed service agreement
3) Includes laser, inkjet, and dot matrix supplies and associated supplies services sold on a unit basis or through a managed service agreement
4) Includes departmental, large workgroup, and medium workgroup lasers, dot matrix printers and options
5) Includes small workgroup lasers and personal lasers
6) Includes miscellaneous non-printing revenue related to a software solution
7) Includes software licenses and the associated software maintenance services sold on a unit basis or as a subscription service
8) Includes parts and service related to hardware maintenance
© Lexmark International, Inc. All rights reserved. 21
Revenue Trends1
($M) 1Q13 2Q13 3Q13 4Q13 1Q14 2Q14 3Q14 4Q14 1Q15 2Q15 3Q15 4Q15 FY 2013 FY 2014 FY 2015
Geography 886 890 896 1,011 881 894 921 1,032 855 891 868 982 3,684 3,728 3,596
US 377 386 401 424 383 373 406 448 386 409 418 455 1,589 1,610 1,668
EMEA 335 325 311 386 316 341 332 394 309 318 287 367 1,357 1,382 1,280
Rest of World 174 179 183 201 183 180 183 189 161 164 163 160 737 735 648
Segment 886 890 896 1,011 881 894 921 1,032 855 891 868 982 3,684 3,728 3,596
ISS 840 828 837 939 817 830 835 933 766 740 703 808 3,444 3,415 3,017
Laser 718 729 753 839 744 764 775 875 718 706 672 779 3,039 3,158 2,875
MPS 160 170 184 208 180 195 205 242 185 203 207 233 722 821 828
Non MPS 558 559 569 631 565 569 570 633 533 503 465 547 2,317 2,337 2,047
Inkjet Exit 122 99 84 100 73 67 60 58 48 35 31 29 405 257 143
Enterprise Software 46 62 59 72 64 64 86 99 90 150 165 174 239 313 579
Licenses 13 24 17 23 16 15 24 26 19 53 43 55 78 81 170
Subscriptions 5 3 5 5 6 6 9 11 10 12 14 13 18 32 49
Maintenance 17 19 19 24 24 25 32 38 36 52 74 74 79 119 237
Professional Services / Other 6
11 16 17 19 18 17 22 25 24 33 33 31 64 81 122
Product 886 890 896 1,011 881 894 921 1,032 855 891 868 982 3,684 3,728 3,596
Hardware 2
181 171 182 228 167 183 196 236 152 179 165 210 763 782 706
Large Workgroup 4
149 139 153 190 137 151 164 199 127 149 142 183 631 651 602
Small Workgroup 5
29 30 28 36 27 30 31 35 23 25 22 25 124 123 94
Other 6
0 1 1 2 2 2 2 2 2 4 1 2 4 9 9
Inkjet Exit 2 1 0 0 0 0 0 0 0 0 0 0 4 0 0
Supplies 3
609 608 606 661 605 602 593 646 568 517 493 551 2,484 2,446 2,129
Laser 490 510 522 562 532 535 533 589 520 482 461 522 2,083 2,189 1,986
Inkjet Exit 120 98 84 100 73 67 60 58 48 35 31 29 401 257 142
Software & Other 97 111 107 122 109 109 132 150 135 195 210 221 436 500 762
Software 7
54 67 64 77 66 66 88 102 87 144 149 156 262 322 536
Other 8
43 44 43 45 43 43 44 47 48 51 61 65 175 178 226
$133
$214
4Q14 4Q15
Growing Enterprise Software Revenue Base*
4Q14 4Q15
YTY
+24%
Annualized Subscription Contract Value
Forward 12 Months Value
YTY
+61%
Deferred Software Revenue
$57
$46
* Non-GAAP, totals may not foot due to rounding, in millions unless otherwise noted, numbers rounded
© Lexmark International, Inc. All rights reserved. 22
Deferred Software Revenue Trend*
GAAP Non-GAAP
1Q14 $88 $96
2Q14 $90 $96
3Q14 $104 $123
4Q14 $117 $133
1Q15 $118 $130
2Q15 $178 $226
3Q15 $175 $206
4Q15 $197 $214
* In millions
© Lexmark International, Inc. All rights reserved. 23
Outstanding Shares / Dividends
Actual Diluted
Period Ending Average
4Q15 61.9 61.9
3Q15 61.8 61.7
2Q15 61.6 61.5
1Q15 61.3 62.4
4Q14 61.3 61.6
FY15 61.9 61.6
FY14 61.3 63.2
FY13 62.0 64.1
FY12 63.9 69.5
FY11 71.4 77.9
Declaration Record Payment
Date Date Date
02/18/16 02/29/16 03/11/16
04/21/16 06/03/16 06/17/16
07/21/16 09/02/16 09/16/16
10/20/16 12/02/16 12/16/16
Outstanding Share Counts1 Anticipated Dividend Schedule2
1) Millions
2) Future quarterly dividend payments subject to Board of Directors’ approval
© Lexmark International, Inc. All rights reserved. 24
Currency*
* Based on foreign currency exchange rates as of 12/31/15, includes hedging program, numbers rounded
Revenue by Geography
58%
42%
EMEA: Mostly Euro (75%-80%) and
British Pound (5%-10%)
Other International: Primarily Canadian Dollar, Brazilian
Real and Australian Dollar
Cost by Currency
Non-USD: Primarily Canadian Dollar, Mexican Peso,
British Pound, Euro, Brazilian Real, and Swedish
Krona each at 10%-20%, and a number of other
currencies each representing less than 10%.
Operating Expense by Currency
Non-USD: Euro (25%-30%), Swiss Franc (10%-15%),
and a number of other currencies each representing
less than 10% including the British Pound, Swedish
Krona, Philippine Peso, Australian Dollar, and
Canadian Dollar.
Other Factors
• Company generally acts to harmonize supplies prices globally to the U.S. dollar
• Price increases cannot immediately impact laser supplies that are sold under contract
(~70% or more at any given point in time)
• Lexmark hedges transaction and also income statement exposures such that less than
1/3rd of total revenue is exposed
96%
4%
46%
18%
36%
4Q15 vs. 3Q15 -1%
4Q15 vs. 4Q14 -4%
4Q15 vs. Guidance 0%
2015 vs. 2014 -6%
4Q15 Revenue Impact
FY Revenue Impact*
USD
U.S.
USD
2015 Exposure
© Lexmark International, Inc. All rights reserved. 25
Footnotes Slide
© Lexmark International, Inc. All rights reserved. 26
.As reported in Lexmark’s 2014 Annual Report on Form 10-K, Lexmark identified a material weakness in accounting for income taxes. As part of the
company’s continued income tax accounting remediation efforts, tax revisions have been made to correct errors for prior fiscal periods. Revisions
to GAAP EPS were as follows: 3Q14 EPS of -0.05, 4Q14 EPS of +0.05, and Full Year 2014 of +0.01. Revisions to non-GAAP EPS were as follows:
3Q14 EPS of -0.09, 4Q14 EPS of +0.03, and Full Year 2014 of -0.05. All tax revisions made for prior annual periods will be reported in the
company’s annual report on Form 10-K for the period ended December 31, 2015.
© Lexmark International, Inc. All rights reserved. 27

Contenu connexe

Tendances

2008 Q1 TRW Auto Earnings Presentation
2008 Q1 TRW Auto Earnings Presentation 2008 Q1 TRW Auto Earnings Presentation
2008 Q1 TRW Auto Earnings Presentation
finance18
 
4q10 pressrelease-june
4q10 pressrelease-june4q10 pressrelease-june
4q10 pressrelease-june
a3
 

Tendances (20)

Q415 nielsen earnings webcast final
Q415 nielsen earnings webcast finalQ415 nielsen earnings webcast final
Q415 nielsen earnings webcast final
 
4 q15 earnings presentation
4 q15 earnings presentation4 q15 earnings presentation
4 q15 earnings presentation
 
June 2017 investor deck final
June 2017 investor deck finalJune 2017 investor deck final
June 2017 investor deck final
 
Q217 nielsen-earnings webcast-final 640 pm
Q217 nielsen-earnings webcast-final 640 pmQ217 nielsen-earnings webcast-final 640 pm
Q217 nielsen-earnings webcast-final 640 pm
 
Morgan stanley behind final
Morgan stanley behind finalMorgan stanley behind final
Morgan stanley behind final
 
Final
FinalFinal
Final
 
Visa inc. q2 2017 financial results conference call presentation
Visa inc. q2 2017 financial results conference call   presentationVisa inc. q2 2017 financial results conference call   presentation
Visa inc. q2 2017 financial results conference call presentation
 
151124 arc investor overview
151124   arc investor overview151124   arc investor overview
151124 arc investor overview
 
Rockwell Automation Q1 FY17
Rockwell Automation Q1 FY17Rockwell Automation Q1 FY17
Rockwell Automation Q1 FY17
 
1Q16 Earnings Presentation
1Q16 Earnings Presentation1Q16 Earnings Presentation
1Q16 Earnings Presentation
 
2008 Q1 TRW Auto Earnings Presentation
2008 Q1 TRW Auto Earnings Presentation 2008 Q1 TRW Auto Earnings Presentation
2008 Q1 TRW Auto Earnings Presentation
 
Q117 nielsen-earnings webcast final
Q117 nielsen-earnings webcast finalQ117 nielsen-earnings webcast final
Q117 nielsen-earnings webcast final
 
CFO update
CFO updateCFO update
CFO update
 
Q1 fy17 earnings slides final no guidance
Q1 fy17 earnings slides final no guidanceQ1 fy17 earnings slides final no guidance
Q1 fy17 earnings slides final no guidance
 
2015 investor deck december v1
2015 investor deck december v12015 investor deck december v1
2015 investor deck december v1
 
Business services
Business services Business services
Business services
 
Belden Investor Day
Belden Investor DayBelden Investor Day
Belden Investor Day
 
Slides q4 2015_final
Slides q4 2015_finalSlides q4 2015_final
Slides q4 2015_final
 
4q10 pressrelease-june
4q10 pressrelease-june4q10 pressrelease-june
4q10 pressrelease-june
 
Brink's second quarter 2018 results presentation 07252018
Brink's second quarter 2018 results presentation 07252018Brink's second quarter 2018 results presentation 07252018
Brink's second quarter 2018 results presentation 07252018
 

Similaire à Lexmark 4 q15 earnings presentation

Textura q4 15 earnings release presentation 2.24 final
Textura q4 15 earnings release presentation 2.24 finalTextura q4 15 earnings release presentation 2.24 final
Textura q4 15 earnings release presentation 2.24 final
TexturaCorp
 
Financial Analyst Day 2012
Financial Analyst Day 2012Financial Analyst Day 2012
Financial Analyst Day 2012
InvestorSymantec
 
Textura q1 15 earnings release presentation v4
Textura q1 15 earnings release presentation v4Textura q1 15 earnings release presentation v4
Textura q1 15 earnings release presentation v4
TexturaCorp
 
Mrkt q3 14 results presentation
Mrkt q3 14 results presentationMrkt q3 14 results presentation
Mrkt q3 14 results presentation
InvestorMarkit
 

Similaire à Lexmark 4 q15 earnings presentation (20)

Textura q4 15 earnings release presentation 2.24 final
Textura q4 15 earnings release presentation 2.24 finalTextura q4 15 earnings release presentation 2.24 final
Textura q4 15 earnings release presentation 2.24 final
 
Textura q3 15 earnings release presentation
Textura q3 15 earnings release presentationTextura q3 15 earnings release presentation
Textura q3 15 earnings release presentation
 
Textura q2 15 earnings release presentation
Textura q2 15 earnings release presentationTextura q2 15 earnings release presentation
Textura q2 15 earnings release presentation
 
2 q14 slides final
2 q14 slides final2 q14 slides final
2 q14 slides final
 
Intuit IR Deck - March 2015
Intuit IR Deck - March 2015Intuit IR Deck - March 2015
Intuit IR Deck - March 2015
 
Q417 earnings slides final 08 feb18
Q417 earnings slides final 08 feb18Q417 earnings slides final 08 feb18
Q417 earnings slides final 08 feb18
 
Financial Analyst Day 2012
Financial Analyst Day 2012Financial Analyst Day 2012
Financial Analyst Day 2012
 
Q3 2015 earnings presentation
Q3 2015 earnings presentationQ3 2015 earnings presentation
Q3 2015 earnings presentation
 
Verifone Q1 2017 Earnings
Verifone Q1 2017 EarningsVerifone Q1 2017 Earnings
Verifone Q1 2017 Earnings
 
Internap Q4 2014 Earnings Presentation
Internap Q4 2014 Earnings PresentationInternap Q4 2014 Earnings Presentation
Internap Q4 2014 Earnings Presentation
 
Textura q1 15 earnings release presentation v4
Textura q1 15 earnings release presentation v4Textura q1 15 earnings release presentation v4
Textura q1 15 earnings release presentation v4
 
Hershey Presentation at 2024 CAGY Conference
Hershey Presentation at 2024 CAGY ConferenceHershey Presentation at 2024 CAGY Conference
Hershey Presentation at 2024 CAGY Conference
 
Ofx 260515 fy15_presentation
Ofx 260515 fy15_presentationOfx 260515 fy15_presentation
Ofx 260515 fy15_presentation
 
Sap debt_investorpresentationq2_2014
Sap  debt_investorpresentationq2_2014Sap  debt_investorpresentationq2_2014
Sap debt_investorpresentationq2_2014
 
Mrkt q3 14 results presentation
Mrkt q3 14 results presentationMrkt q3 14 results presentation
Mrkt q3 14 results presentation
 
PFS Web Investor Presentation
PFS Web Investor PresentationPFS Web Investor Presentation
PFS Web Investor Presentation
 
Uct investor presentation spring 2018
Uct investor presentation   spring 2018Uct investor presentation   spring 2018
Uct investor presentation spring 2018
 
UCT Investor Presentation April 2017
UCT Investor Presentation April 2017UCT Investor Presentation April 2017
UCT Investor Presentation April 2017
 
Verifone Q2 2017 Earnings
Verifone Q2 2017 EarningsVerifone Q2 2017 Earnings
Verifone Q2 2017 Earnings
 
Winter 2018
Winter 2018Winter 2018
Winter 2018
 

Plus de Arzish Baaquie

Geometric limited-analyst-presentation-q3 fy16
Geometric limited-analyst-presentation-q3 fy16Geometric limited-analyst-presentation-q3 fy16
Geometric limited-analyst-presentation-q3 fy16
Arzish Baaquie
 
Acquisition of tumi announcement presentation (2016 03-04)
Acquisition of tumi  announcement presentation (2016 03-04)Acquisition of tumi  announcement presentation (2016 03-04)
Acquisition of tumi announcement presentation (2016 03-04)
Arzish Baaquie
 
Npx results presentation 18 feb 2016
Npx results presentation 18 feb 2016Npx results presentation 18 feb 2016
Npx results presentation 18 feb 2016
Arzish Baaquie
 
Npx 1 h16 presentation 18 feb 2016
Npx 1 h16 presentation 18 feb 2016Npx 1 h16 presentation 18 feb 2016
Npx 1 h16 presentation 18 feb 2016
Arzish Baaquie
 

Plus de Arzish Baaquie (20)

Indiabulls-investor preso
Indiabulls-investor presoIndiabulls-investor preso
Indiabulls-investor preso
 
Improved offer presentation_amc
Improved offer presentation_amcImproved offer presentation_amc
Improved offer presentation_amc
 
Updated investor presentation final
Updated investor presentation finalUpdated investor presentation final
Updated investor presentation final
 
Asml 20160615 presentation_asml_hmi
Asml 20160615 presentation_asml_hmiAsml 20160615 presentation_asml_hmi
Asml 20160615 presentation_asml_hmi
 
Annual+result+2015
Annual+result+2015Annual+result+2015
Annual+result+2015
 
Mhps sale announcement
Mhps sale announcementMhps sale announcement
Mhps sale announcement
 
FY2015 presentation
FY2015 presentationFY2015 presentation
FY2015 presentation
 
160216 investor-presentation-final pacific
160216 investor-presentation-final pacific160216 investor-presentation-final pacific
160216 investor-presentation-final pacific
 
Geometric limited-analyst-presentation-q3 fy16
Geometric limited-analyst-presentation-q3 fy16Geometric limited-analyst-presentation-q3 fy16
Geometric limited-analyst-presentation-q3 fy16
 
Hac presentation slides_fy2015
Hac presentation slides_fy2015Hac presentation slides_fy2015
Hac presentation slides_fy2015
 
Qub transaction presentation
Qub transaction presentationQub transaction presentation
Qub transaction presentation
 
Amc carmike transaction presentation
Amc carmike transaction presentationAmc carmike transaction presentation
Amc carmike transaction presentation
 
Epa presentation
Epa presentationEpa presentation
Epa presentation
 
Acquisition of tumi announcement presentation (2016 03-04)
Acquisition of tumi  announcement presentation (2016 03-04)Acquisition of tumi  announcement presentation (2016 03-04)
Acquisition of tumi announcement presentation (2016 03-04)
 
Q3 15 results slides final
Q3 15 results slides finalQ3 15 results slides final
Q3 15 results slides final
 
Qub presentation
Qub presentationQub presentation
Qub presentation
 
Npx results presentation 18 feb 2016
Npx results presentation 18 feb 2016Npx results presentation 18 feb 2016
Npx results presentation 18 feb 2016
 
Npx 1 h16 presentation 18 feb 2016
Npx 1 h16 presentation 18 feb 2016Npx 1 h16 presentation 18 feb 2016
Npx 1 h16 presentation 18 feb 2016
 
Gxl investor preso
Gxl investor presoGxl investor preso
Gxl investor preso
 
20150811 terex konescranes merger joint investor presentation
20150811 terex konescranes merger joint investor presentation20150811 terex konescranes merger joint investor presentation
20150811 terex konescranes merger joint investor presentation
 

Dernier

Mckinsey foundation level Handbook for Viewing
Mckinsey foundation level Handbook for ViewingMckinsey foundation level Handbook for Viewing
Mckinsey foundation level Handbook for Viewing
Nauman Safdar
 
The Abortion pills for sale in Qatar@Doha [+27737758557] []Deira Dubai Kuwait
The Abortion pills for sale in Qatar@Doha [+27737758557] []Deira Dubai KuwaitThe Abortion pills for sale in Qatar@Doha [+27737758557] []Deira Dubai Kuwait
The Abortion pills for sale in Qatar@Doha [+27737758557] []Deira Dubai Kuwait
daisycvs
 
Jual Obat Aborsi ( Asli No.1 ) 085657271886 Obat Penggugur Kandungan Cytotec
Jual Obat Aborsi ( Asli No.1 ) 085657271886 Obat Penggugur Kandungan CytotecJual Obat Aborsi ( Asli No.1 ) 085657271886 Obat Penggugur Kandungan Cytotec
Jual Obat Aborsi ( Asli No.1 ) 085657271886 Obat Penggugur Kandungan Cytotec
ZurliaSoop
 
Al Mizhar Dubai Escorts +971561403006 Escorts Service In Al Mizhar
Al Mizhar Dubai Escorts +971561403006 Escorts Service In Al MizharAl Mizhar Dubai Escorts +971561403006 Escorts Service In Al Mizhar
Al Mizhar Dubai Escorts +971561403006 Escorts Service In Al Mizhar
allensay1
 

Dernier (20)

Mckinsey foundation level Handbook for Viewing
Mckinsey foundation level Handbook for ViewingMckinsey foundation level Handbook for Viewing
Mckinsey foundation level Handbook for Viewing
 
New 2024 Cannabis Edibles Investor Pitch Deck Template
New 2024 Cannabis Edibles Investor Pitch Deck TemplateNew 2024 Cannabis Edibles Investor Pitch Deck Template
New 2024 Cannabis Edibles Investor Pitch Deck Template
 
The Abortion pills for sale in Qatar@Doha [+27737758557] []Deira Dubai Kuwait
The Abortion pills for sale in Qatar@Doha [+27737758557] []Deira Dubai KuwaitThe Abortion pills for sale in Qatar@Doha [+27737758557] []Deira Dubai Kuwait
The Abortion pills for sale in Qatar@Doha [+27737758557] []Deira Dubai Kuwait
 
Organizational Transformation Lead with Culture
Organizational Transformation Lead with CultureOrganizational Transformation Lead with Culture
Organizational Transformation Lead with Culture
 
How to Get Started in Social Media for Art League City
How to Get Started in Social Media for Art League CityHow to Get Started in Social Media for Art League City
How to Get Started in Social Media for Art League City
 
Berhampur 70918*19311 CALL GIRLS IN ESCORT SERVICE WE ARE PROVIDING
Berhampur 70918*19311 CALL GIRLS IN ESCORT SERVICE WE ARE PROVIDINGBerhampur 70918*19311 CALL GIRLS IN ESCORT SERVICE WE ARE PROVIDING
Berhampur 70918*19311 CALL GIRLS IN ESCORT SERVICE WE ARE PROVIDING
 
Falcon Invoice Discounting: The best investment platform in india for investors
Falcon Invoice Discounting: The best investment platform in india for investorsFalcon Invoice Discounting: The best investment platform in india for investors
Falcon Invoice Discounting: The best investment platform in india for investors
 
SEO Case Study: How I Increased SEO Traffic & Ranking by 50-60% in 6 Months
SEO Case Study: How I Increased SEO Traffic & Ranking by 50-60%  in 6 MonthsSEO Case Study: How I Increased SEO Traffic & Ranking by 50-60%  in 6 Months
SEO Case Study: How I Increased SEO Traffic & Ranking by 50-60% in 6 Months
 
PHX May 2024 Corporate Presentation Final
PHX May 2024 Corporate Presentation FinalPHX May 2024 Corporate Presentation Final
PHX May 2024 Corporate Presentation Final
 
Berhampur 70918*19311 CALL GIRLS IN ESCORT SERVICE WE ARE PROVIDING
Berhampur 70918*19311 CALL GIRLS IN ESCORT SERVICE WE ARE PROVIDINGBerhampur 70918*19311 CALL GIRLS IN ESCORT SERVICE WE ARE PROVIDING
Berhampur 70918*19311 CALL GIRLS IN ESCORT SERVICE WE ARE PROVIDING
 
Jual Obat Aborsi ( Asli No.1 ) 085657271886 Obat Penggugur Kandungan Cytotec
Jual Obat Aborsi ( Asli No.1 ) 085657271886 Obat Penggugur Kandungan CytotecJual Obat Aborsi ( Asli No.1 ) 085657271886 Obat Penggugur Kandungan Cytotec
Jual Obat Aborsi ( Asli No.1 ) 085657271886 Obat Penggugur Kandungan Cytotec
 
Ooty Call Gril 80022//12248 Only For Sex And High Profile Best Gril Sex Avail...
Ooty Call Gril 80022//12248 Only For Sex And High Profile Best Gril Sex Avail...Ooty Call Gril 80022//12248 Only For Sex And High Profile Best Gril Sex Avail...
Ooty Call Gril 80022//12248 Only For Sex And High Profile Best Gril Sex Avail...
 
WheelTug Short Pitch Deck 2024 | Byond Insights
WheelTug Short Pitch Deck 2024 | Byond InsightsWheelTug Short Pitch Deck 2024 | Byond Insights
WheelTug Short Pitch Deck 2024 | Byond Insights
 
Dr. Admir Softic_ presentation_Green Club_ENG.pdf
Dr. Admir Softic_ presentation_Green Club_ENG.pdfDr. Admir Softic_ presentation_Green Club_ENG.pdf
Dr. Admir Softic_ presentation_Green Club_ENG.pdf
 
Al Mizhar Dubai Escorts +971561403006 Escorts Service In Al Mizhar
Al Mizhar Dubai Escorts +971561403006 Escorts Service In Al MizharAl Mizhar Dubai Escorts +971561403006 Escorts Service In Al Mizhar
Al Mizhar Dubai Escorts +971561403006 Escorts Service In Al Mizhar
 
Buy gmail accounts.pdf buy Old Gmail Accounts
Buy gmail accounts.pdf buy Old Gmail AccountsBuy gmail accounts.pdf buy Old Gmail Accounts
Buy gmail accounts.pdf buy Old Gmail Accounts
 
Falcon Invoice Discounting: Empowering Your Business Growth
Falcon Invoice Discounting: Empowering Your Business GrowthFalcon Invoice Discounting: Empowering Your Business Growth
Falcon Invoice Discounting: Empowering Your Business Growth
 
Escorts in Nungambakkam Phone 8250092165 Enjoy 24/7 Escort Service Enjoy Your...
Escorts in Nungambakkam Phone 8250092165 Enjoy 24/7 Escort Service Enjoy Your...Escorts in Nungambakkam Phone 8250092165 Enjoy 24/7 Escort Service Enjoy Your...
Escorts in Nungambakkam Phone 8250092165 Enjoy 24/7 Escort Service Enjoy Your...
 
Unveiling Falcon Invoice Discounting: Leading the Way as India's Premier Bill...
Unveiling Falcon Invoice Discounting: Leading the Way as India's Premier Bill...Unveiling Falcon Invoice Discounting: Leading the Way as India's Premier Bill...
Unveiling Falcon Invoice Discounting: Leading the Way as India's Premier Bill...
 
Putting the SPARK into Virtual Training.pptx
Putting the SPARK into Virtual Training.pptxPutting the SPARK into Virtual Training.pptx
Putting the SPARK into Virtual Training.pptx
 

Lexmark 4 q15 earnings presentation

  • 1. Earnings Presentation February 23, 2016 Fourth Quarter and Full Year 2015
  • 2. The contents of this presentation that are not statements of historical fact are forward-looking statements and involve risks and uncertainties that are discussed in the Safe Harbor section of our earnings releases and SEC filings. Actual results may differ materially from such statements. Lexmark undertakes no obligation to update any forward-looking statements. This presentation contains non-GAAP financial measures, unless otherwise noted. Lexmark has provided reconciliations of GAAP to non-GAAP financial measures and a discussion of management’s use of non-GAAP financial measures on its investor relations website located at http://investor.lexmark.com. Safe Harbor Statement © Lexmark International, Inc. All rights reserved. 2
  • 3. Key Points Solid Financial Results1,2  Fourth quarter revenue in line with guidance  Strong fourth quarter Enterprise Software (ES) operating income margin of 24%  Fourth quarter EPS exceeded October guidance range  Full year Core revenue (Laser + ES) grew 6% at constant currency  16th consecutive year of MPS revenue growth, grew 7% at constant currency Strategic Alternatives Process Progressing  Positive interest in strategic alternatives process, continuing evaluation  Focused on execution and our commitment to customers, partners, suppliers and employees while unlocking shareholder value  Demonstrated ongoing commitment to shareholders with 18th consecutive quarterly dividend announced recently 2016 Restructuring Program Expected to Generate ~$100M Annualized Pretax Savings  2016 restructuring program focused on optimizing the ISS structure, primarily as a result of the continued strong U.S. dollar, aligned with the previously announced strategic alternatives process Next Generation Color Lasers Announced  Next generation of color lasers and smart MFPs optimized for MPS and business process solutions; integrated with Kofax Onboarding Agility, which automates and streamlines new customer onboarding processes 3© Lexmark International, Inc. All rights reserved. 1) Non-GAAP, numbers rounded 2) Constant currency calculated adjusting current year and prior year results to remove estimated currency rate impacts and related hedge gains or losses
  • 4.  Core revenue grew 2% at constant currency2  Higher Value Solutions revenue (MPS + Enterprise Software) grew 19%  Enterprise Software revenue grew $75M, operating income increased $31M  Achieved $500M revenue target one year early  Segment operating income margin percentage more than doubled to 24%  Nearly achieved 25% target3 one year early  Subscriptions and maintenance revenue grew 22% and 97%, respectively, supporting annuity revenue base  Deferred software revenue grew 61%, annualized subscription value grew 24%  MPS constant currency growth more than offset by currency and Non-MPS hardware/supplies softness  MPS revenue of $233M, second highest reported quarter  Generated free cash flow of $75M  Paid 17th consecutive quarterly dividend of $22M Fourth Quarter Financial Highlights1 4© Lexmark International, Inc. All rights reserved. 1) Non-GAAP, numbers rounded 2) Constant currency calculated adjusting current year and prior year results to remove estimated currency rate impacts and related hedge gains or losses 3) 2016 Enterprise Software operating income exit rate target of 25%
  • 5. Higher Value Solutions Revenue Growing* 5 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Enterprise Software 16 Consecutive Years of Revenue Growth ~$700M Revenue Run Rate & Expanding Margin Managed Print Services 2011 2012 2013 2014 2015 * Non-GAAP, in millions, totals may not foot due to rounding, numbers rounded 4Q14 4Q15 $407 $341 4Q Higher Value Solutions RevenueHigher Value Solutions Revenue % of Total Revenue 33% 41% 2011 2012 2013 2014 2015 Enterprise Software MPS ~$1.4B Enterprise Software Managed Print Services 19% Higher Value Solutions Revenue Growth Full Year 2015 © Lexmark International, Inc. All rights reserved.
  • 6. Enterprise Software Tracking to Target* $162 $239 $313 $579 2012 2013 2014 2015 Revenue *Non-GAAP, in $ Millions, numbers rounded -15% -1% 5% 2013 2014 2015 Operating Income Margin 2012 6© Lexmark International, Inc. All rights reserved. 2016 Exit Rate Target: 25% 2016 Target: $500 ~24% 2015 Exit Rate 19% ~$700 2015 Exit Run Rate
  • 7. Lexmark Financial Summary1 1) Non-GAAP, totals may not foot due to rounding, in millions unless otherwise noted 2) Core revenue includes Enterprise Software, MPS, and Non-MPS and excludes Inkjet Exit revenue 3) 4Q14 and FY14 YTD revised for income tax accounting revisions. See footnote slide for additional information. Revenue $982 -5% +13% $3,596 -4% Core2 Revenue $953 -2% +14% $3,454 0% Gross Profit Margin 42.6% +3.7 pts +1.8 pts 42.0% +1.8 pts Operating Expense $304 +$13 +$14 $1,156 +$53 Operating Income $114 +$4 +$50 $354 -$42 Operating Income Margin 11.6% +0.9 pts +4.2 pts 9.8% -0.8 pts EBITDA $156 +$3 +$52 $521 -$52 EBITDA Margin 15.9% +1.1 pts +3.9 pts 14.5% -0.9 pts Net Earnings $72 +$2 +$37 $218 -$35 EPS $1.16 +$0.023 +$0.59 $3.53 -$0.463 4Q15 YTY SEQ FY15 YTY © Lexmark International, Inc. All rights reserved. 7
  • 8. Segment Financial Summaries* *Non-GAAP, totals may not foot due to rounding, in millions unless otherwise noted Revenue $808 -13 % +15 % $3,017 -12 % Laser $779 -11 % +16 % $2,875 -9 % MPS $233 -4 % +12 % $828 +1 % Non-MPS $547 -14 % +18 % $2,047 -12 % Inkjet Exit $29 -50 % -7 % $143 -44 % Gross Profit Margin 37.0 % +0.3 pts +2.5 pts 37.2 % -1.3 pts Operating Expense $147 -$22 +$6 $586 -$65 R&D $50 -$8 +$3 $201 -$24 SG&A $97 -$13 +$3 $385 -$41 Operating Income $152 -$22 +$51 $538 -$126 Operating Income Margin 18.8 % +0.2 pts +4.4 pts 17.8 % -1.6 pts Perceptive Software 2Q14 YTY SEQEnterprise Software 4Q15 YTY SEQ FY15 YTY ISS 4Q15 YTY SEQ FY15 YTY Revenue $174 +75 % +5 % $579 +85 % Licenses $55 +112 % +28 % $170 +110 % Subscriptions $13 +22 % -10 % $49 +56 % Maintenance $74 +97 % +1 % $237 +99 % Professional Services / Other $31 +26 % -7 % $122 +50 % Gross Profit Margin 74.5 % +7.4 pts +1.0 pts 72.7 % +3.1 pts Operating Expense $88 +$32 -$3 $311 +$107 R&D $24 +$6 -$3 $92 +$20 SG&A $64 +$26 -$1 $218 +$88 Operating Income $42 +$31 +$12 $110 +$95 Operating Income Margin 23.9 % +13.2 pts +5.7 pts 19.0 % +14.4 pts © Lexmark International, Inc. All rights reserved. 8
  • 9. Revenue1 Total $982 +13% -5% 0% $3,596 -4% +2% Core2 $953 +14% -2% +2% $3,454 0% +6% Enterprise Software $174 +5% +75% +83% $579 +85% +93% Laser $779 +16% -11% -7% $2,875 -9% -3% Higher Value Solutions3 $407 +9% +19% +26% $1,407 +24% +32% Enterprise Software $174 +5% +75% +83% $579 +85% +93% MPS $233 +12% -4% +1% $828 +1% +7% Inkjet Exit $29 -7% -50% -48% $143 -44% -42% Geographic U.S. $455 +9% +2% +2% $1,668 +4% +4% EMEA $367 +28% -7% -1% $1,280 -7% +2% Rest of World $160 -2% -15% -4% $648 -12% 0% 4Q15 SEQ YTY YTY CC4 FY15 YTY YTY CC4 • Total full year revenue grew 2% at constant currency4 YTY • Full year Core revenue grew 6% at constant currency YTY • Full year Higher Value Solutions revenue at constant currency grew 32%, comprised of 93% growth in Enterprise Software and 7% growth in MPS • Worldwide laser supplies channel inventory within 6 to 10 weeks target range 1) Non-GAAP, totals may not foot due to rounding, in millions unless otherwise noted, numbers rounded 2) Core revenue includes Enterprise Software, MPS, and Non-MPS revenue and excludes Inkjet Exit revenue 3) Higher Value revenue includes Enterprise Software and MPS 4) Constant currency calculated adjusting current year and prior year results to remove estimated currency rate impacts and related hedge gains or losses © Lexmark International, Inc. All rights reserved. 9
  • 10. Product Revenue1 Laser Hardware -11% -18% +8% Large Workgroup -8% -10% +3% Small Workgroup -29% -29% 0% 4Q15 YTY Rev Units AUR © Lexmark International, Inc. All rights reserved. 10 Total $982 -5% +13% $3,596 -4% Hardware2 $210 -11% +27% $706 -10% Large Workgroup5 $183 -8% +29% $602 -8% Small Workgroup6 $25 -29% +15% $94 -23% Other $2 -24% +29% $9 +7% Supplies3 $551 -15% +12% $2,129 -13% Laser $522 -11% +13% $1,986 -9% Inkjet Exit $29 -50% -7% $142 -45% Software & Other4 $221 +48% +5% $762 +53% Software $156 +53% +5% $536 +71% Other $65 +38% +7% $226 +25% 4Q15 YTY SEQ FY15 YTY Comments Laser Hardware -10% -12% +2% Large Workgroup -8% -6% -2% Small Workgroup -23% -20% -4% FY15 YTY Rev Units AUR 4Q15 FY15 Enterprise Software +75% +85% 1) Non-GAAP, totals may not foot due to rounding, in millions unless otherwise noted, numbers rounded 2) Includes laser, inkjet, and dot matrix hardware, associated features sold on a unit basis or through a managed service agreement and miscellaneous non-printing hardware related to a software solution 3) Includes laser, inkjet, and dot matrix supplies and associated supplies services sold on a unit basis or through a managed service agreement 4) Includes parts and service related to hardware maintenance and includes software licenses and the associated software maintenance services sold on a unit basis or as a subscription service 5) Includes departmental, large workgroup, and medium workgroup lasers, dot matrix printers and features 6) Includes small workgroup lasers and personal lasers $3.6B Total Revenue Supplies Hardware Software & Other $2.9B Laser Revenue Laser Supplies FY15 $0.6B Enterprise Software Subscriptions MaintenanceLicenses Professional Services & OtherLaser Hardware
  • 11. Gross Profit Margin* 11  4Q gross profit margin improved 370 bps YTY driven by increased mix of Enterprise Software  Enterprise Software gross profit margin increased 740 bps, primarily driven by the addition of Kofax  ISS gross profit margin increased 30 bps, primarily driven by improved hardware margins • 4Q gross profit margin increased 180 bps sequentially, driven by ISS  Sequential growth in ISS gross profit margin primarily driven by higher hardware and supplies margin  Enterprise Software gross profit margin increased 100 bps, primarily driven by favorable product mix Total 42.6% +370 bps +180 bps 42.0% +180 bps Enterprise Software 74.5% +740 bps +100 bps 72.7% +310 bps ISS 37.0% +30 bps +250 bps 37.2% -130 bps 4Q15 YTY SEQ FY15 YTY * Non-GAAP, totals may not foot due to rounding, in millions unless otherwise noted © Lexmark International, Inc. All rights reserved.
  • 12. Operating Expense1 1) Non-GAAP, totals may not foot due to rounding, in millions unless otherwise noted 2) All Other expenses are for corporate functions including IT, finance, human resources, facilities, legal, corporate staff, and total company equity compensation 4Q15 YTY SEQ FY15 YTY Total $304 +$13 +$14 $1,156 +$53 Enterprise Software $88 +$32 -$3 $311 +$107 ISS $147 -$22 +$6 $586 -$65 All Other2 $69 +$3 +$11 $260 +$10 R&D $81 -$4 $0 $325 -$8 Enterprise Software $24 +$6 -$3 $92 +$20 ISS $50 -$8 +$3 $201 -$24 All Other $7 -$1 -$1 $31 -$4 SG&A $224 +$18 +$14 $832 +$61 Enterprise Software $64 +$26 -$1 $218 +$88 ISS $97 -$13 +$3 $385 -$41 All Other $62 +$4 +$12 $228 +$14 • Disciplined cost and expense management, restructuring and lowered performance-based compensation helped mitigate expense growth YTY © Lexmark International, Inc. All rights reserved. 12
  • 13. Operating Income1 • 4Q15 sequential increase mostly driven by ISS • 4Q15 YTY increase driven by Enterprise Software • FY15 Enterprise Software Operating Income increase of $95M YTY, more than offset by currency and Inkjet Exit Operating Income % 11.6% +90 bps +420 bps 9.8% -80 bps Operating Income $ $114 +$4 +$50 $354 -$42 Enterprise Software $42 +$31 +$12 $110 +$95 ISS $152 -$22 +$51 $538 -$126 All Other2 -$80 -$5 -$12 -$293 -$12 4Q15 YTY SEQ FY15 YTY © Lexmark International, Inc. All rights reserved. 13 1) Non-GAAP, totals may not foot due to rounding, in millions unless otherwise noted 2) All Other expenses are for corporate functions including IT, finance, human resources, facilities, legal, corporate staff and total company equity compensation
  • 14.  Currency headwind of ~$0.28 per share and ~$1.53 per share year to year in 4Q15 and FY15, respectively Earnings1 14 1. Non-GAAP, totals may not foot due to rounding, EBITDA, net earnings and average diluted shares outstanding in millions, numbers rounded 2. Adjusted EBITDA defined as net earnings plus net interest expense (income), provision for income taxes, depreciation and amortization, excluding restructuring charges and project costs, acquisition and divestiture related adjustments, pension plan actuarial gains or losses, and remediation-related adjustments 3. 4Q14 and FY14 revised for income tax accounting revisions. See footnote slide for additional information EBITDA2 $156 +$3 +$52 $521 -$52 Net Earnings3 $72 +$2 +$37 $218 -$35 EPS3 $1.16 +$0.02 +$0.59 $3.53 -$0.46 Avg. diluted shares outstanding 61.9 +0.3 +0.2 61.6 -1.6 4Q15 YTY SEQ FY15 YTY © Lexmark International, Inc. All rights reserved.
  • 15. 4Q15 EPS Guidance Midpoint $1.10 Operational Performance +0.06 4Q15 EPS $1.16 4Q14 EPS2 $1.14 Operational Performance +0.32 Approximate Currency Impact -0.28 Non-Operational Items -0.02 4Q15 EPS $1.16 + Enterprise Software improvement + Laser improvement + Belgium copyright levy accrual release ($5M) - Inkjet Exit decline 4Q15 Guidance vs. Actual 4Q15 EPS Overview1 1) Non-GAAP, numbers rounded 2) FY14 EPS revised for income tax accounting revisions. See footnote slide for additional information 4Q14 vs. 4Q15 © Lexmark International, Inc. All rights reserved. 15 + Belgium copyright levy accrual release ($5M) + Laser performance
  • 16. FY14 EPS2 $3.99 Operational Performance +1.06 Approximate Currency Impact -1.53 Non-Operational -0.08 Lower Average Diluted Shares Outstanding +0.09 FY15 EPS $3.53 + Enterprise Software improvement + Laser improvement - Inkjet Exit decline FY15 EPS Overview1 1) Non-GAAP, numbers rounded 2) 4Q14 EPS revised for income tax accounting revisions. See footnote slide for additional information FY14 vs. FY15 © Lexmark International, Inc. All rights reserved. 16
  • 17. Balance Sheet and Cash Flow1 1) GAAP, totals may not foot due to rounding, in millions unless otherwise noted, numbers rounded 2) Includes current short-term marketable securities 3) Net cash provided by operating activities 4) Free cash flow = cash from operations – capital expenditures + proceeds from the sale of fixed assets 5) Includes non-GAAP adjustments of approximately $38 million 6) Long Term Bonds of $700 million, net of unamortized debt issuance cost and original issue discount • Generated Cash from Operations of $103M in the fourth quarter • Credit facilities include $500M Revolver, $100M Uncommitted Facility, $125M A/R Program • Maintaining an Investment Grade Debt Rating Credit Facilities $364 Long Term Bonds6 $697 Total Debt $1,061 Highlights Cash Conversion Days Debt Dec. 31, 2015 Cash2 $158 U.S. Cash $50 Non-U.S. Cash $108 Net cash / (debt) ($903) 4Q15 Cash Flow Cash from Operations3 $103 Free Cash Flow4 $75 Depreciation & Amortization5 $80 Capital Expenditures -$29 Cash Flow Impact Accounts Receivable +$8 Inventory +$26 Accounts Payable +$23 Balance Sheet & 4Q15 Cash Flow © Lexmark International, Inc. All rights reserved. 17 4Q14 1Q15 2Q15 3Q15 4Q15 Receivables 37 42 47 47 40 Inventory 34 44 48 44 36 Payables 72 92 85 81 77 Cash Conversion (1) (6) 10 9 (1)
  • 18.  As previously announced, Lexmark’s Board of Directors has authorized the exploration of strategic alternatives to enhance shareholder value and unlock the intrinsic value created by the company  On the company’s third quarter 2015 earnings call, Lexmark indicated that these alternatives could include a sale of the entire company or spin-off of a portion of the company to either strategic or financial buyers  Lexmark is very pleased with both the progress and positive interest in the company’s strategic alternatives process, and is continuing its evaluation  Given the ongoing exploration of strategic alternatives, the company is not providing guidance, will not host a conference call with securities analysts and investors in conjunction with today’s earnings release, and is remaining in its quiet period  Lexmark does not intend to comment on the exploration process or disclose further developments until the Board approves a specific transaction or otherwise concludes the exploration of strategic alternatives. No assurance can be given of the outcome of the strategic alternatives review process, including whether any transaction will result or the associated timing or terms  During this process, Lexmark remains squarely focused on the execution of its strategy, commitment to its customers, partners, suppliers and employees and driving value for our shareholders Positive Interest in Strategic Alternatives Process 18© Lexmark International, Inc. All rights reserved.
  • 19. Restructuring Summary 19© Lexmark International, Inc. All rights reserved. Charges Cash Cost3 FY15 $40 $0 FY16 $25 $59 Total Program $65 $59 1) Restructuring-related charges for 2016 actions and related project costs only, in millions unless otherwise noted 2) Restructuring-related charges for July 2015 actions and related project costs only, in millions unless otherwise noted 3) Cash restructuring charges are estimates based on timing of related activities 4) Beginning in FY17, estimated allocation of 90% operating expense / 10% cost of goods sold 2016 Program1 Cash Savings FY16 $67 FY17 & Ongoing Annual4 $100 Charges Cash Cost3 FY15 $36 $8 FY16 $19 $47 Total Program $55 $552015 Program2 Cash Savings FY15 $2 FY16 $55 FY17 & Ongoing Annual4 $65
  • 20. • Revenue trends • Deferred software revenue and annualized subscription value • Deferred software revenue trend by quarter • Outstanding shares / dividends • Currency Supplemental Materials © Lexmark International, Inc. All rights reserved. 20
  • 21. Revenue Trends1 1) Non-GAAP, totals may not foot due to rounding, in millions unless otherwise noted. Periodic modifications to category definitions may change previously stated values 2) Includes laser, inkjet, and dot matrix hardware, and associated features sold on a unit basis or through a managed service agreement 3) Includes laser, inkjet, and dot matrix supplies and associated supplies services sold on a unit basis or through a managed service agreement 4) Includes departmental, large workgroup, and medium workgroup lasers, dot matrix printers and options 5) Includes small workgroup lasers and personal lasers 6) Includes miscellaneous non-printing revenue related to a software solution 7) Includes software licenses and the associated software maintenance services sold on a unit basis or as a subscription service 8) Includes parts and service related to hardware maintenance © Lexmark International, Inc. All rights reserved. 21 Revenue Trends1 ($M) 1Q13 2Q13 3Q13 4Q13 1Q14 2Q14 3Q14 4Q14 1Q15 2Q15 3Q15 4Q15 FY 2013 FY 2014 FY 2015 Geography 886 890 896 1,011 881 894 921 1,032 855 891 868 982 3,684 3,728 3,596 US 377 386 401 424 383 373 406 448 386 409 418 455 1,589 1,610 1,668 EMEA 335 325 311 386 316 341 332 394 309 318 287 367 1,357 1,382 1,280 Rest of World 174 179 183 201 183 180 183 189 161 164 163 160 737 735 648 Segment 886 890 896 1,011 881 894 921 1,032 855 891 868 982 3,684 3,728 3,596 ISS 840 828 837 939 817 830 835 933 766 740 703 808 3,444 3,415 3,017 Laser 718 729 753 839 744 764 775 875 718 706 672 779 3,039 3,158 2,875 MPS 160 170 184 208 180 195 205 242 185 203 207 233 722 821 828 Non MPS 558 559 569 631 565 569 570 633 533 503 465 547 2,317 2,337 2,047 Inkjet Exit 122 99 84 100 73 67 60 58 48 35 31 29 405 257 143 Enterprise Software 46 62 59 72 64 64 86 99 90 150 165 174 239 313 579 Licenses 13 24 17 23 16 15 24 26 19 53 43 55 78 81 170 Subscriptions 5 3 5 5 6 6 9 11 10 12 14 13 18 32 49 Maintenance 17 19 19 24 24 25 32 38 36 52 74 74 79 119 237 Professional Services / Other 6 11 16 17 19 18 17 22 25 24 33 33 31 64 81 122 Product 886 890 896 1,011 881 894 921 1,032 855 891 868 982 3,684 3,728 3,596 Hardware 2 181 171 182 228 167 183 196 236 152 179 165 210 763 782 706 Large Workgroup 4 149 139 153 190 137 151 164 199 127 149 142 183 631 651 602 Small Workgroup 5 29 30 28 36 27 30 31 35 23 25 22 25 124 123 94 Other 6 0 1 1 2 2 2 2 2 2 4 1 2 4 9 9 Inkjet Exit 2 1 0 0 0 0 0 0 0 0 0 0 4 0 0 Supplies 3 609 608 606 661 605 602 593 646 568 517 493 551 2,484 2,446 2,129 Laser 490 510 522 562 532 535 533 589 520 482 461 522 2,083 2,189 1,986 Inkjet Exit 120 98 84 100 73 67 60 58 48 35 31 29 401 257 142 Software & Other 97 111 107 122 109 109 132 150 135 195 210 221 436 500 762 Software 7 54 67 64 77 66 66 88 102 87 144 149 156 262 322 536 Other 8 43 44 43 45 43 43 44 47 48 51 61 65 175 178 226
  • 22. $133 $214 4Q14 4Q15 Growing Enterprise Software Revenue Base* 4Q14 4Q15 YTY +24% Annualized Subscription Contract Value Forward 12 Months Value YTY +61% Deferred Software Revenue $57 $46 * Non-GAAP, totals may not foot due to rounding, in millions unless otherwise noted, numbers rounded © Lexmark International, Inc. All rights reserved. 22
  • 23. Deferred Software Revenue Trend* GAAP Non-GAAP 1Q14 $88 $96 2Q14 $90 $96 3Q14 $104 $123 4Q14 $117 $133 1Q15 $118 $130 2Q15 $178 $226 3Q15 $175 $206 4Q15 $197 $214 * In millions © Lexmark International, Inc. All rights reserved. 23
  • 24. Outstanding Shares / Dividends Actual Diluted Period Ending Average 4Q15 61.9 61.9 3Q15 61.8 61.7 2Q15 61.6 61.5 1Q15 61.3 62.4 4Q14 61.3 61.6 FY15 61.9 61.6 FY14 61.3 63.2 FY13 62.0 64.1 FY12 63.9 69.5 FY11 71.4 77.9 Declaration Record Payment Date Date Date 02/18/16 02/29/16 03/11/16 04/21/16 06/03/16 06/17/16 07/21/16 09/02/16 09/16/16 10/20/16 12/02/16 12/16/16 Outstanding Share Counts1 Anticipated Dividend Schedule2 1) Millions 2) Future quarterly dividend payments subject to Board of Directors’ approval © Lexmark International, Inc. All rights reserved. 24
  • 25. Currency* * Based on foreign currency exchange rates as of 12/31/15, includes hedging program, numbers rounded Revenue by Geography 58% 42% EMEA: Mostly Euro (75%-80%) and British Pound (5%-10%) Other International: Primarily Canadian Dollar, Brazilian Real and Australian Dollar Cost by Currency Non-USD: Primarily Canadian Dollar, Mexican Peso, British Pound, Euro, Brazilian Real, and Swedish Krona each at 10%-20%, and a number of other currencies each representing less than 10%. Operating Expense by Currency Non-USD: Euro (25%-30%), Swiss Franc (10%-15%), and a number of other currencies each representing less than 10% including the British Pound, Swedish Krona, Philippine Peso, Australian Dollar, and Canadian Dollar. Other Factors • Company generally acts to harmonize supplies prices globally to the U.S. dollar • Price increases cannot immediately impact laser supplies that are sold under contract (~70% or more at any given point in time) • Lexmark hedges transaction and also income statement exposures such that less than 1/3rd of total revenue is exposed 96% 4% 46% 18% 36% 4Q15 vs. 3Q15 -1% 4Q15 vs. 4Q14 -4% 4Q15 vs. Guidance 0% 2015 vs. 2014 -6% 4Q15 Revenue Impact FY Revenue Impact* USD U.S. USD 2015 Exposure © Lexmark International, Inc. All rights reserved. 25
  • 26. Footnotes Slide © Lexmark International, Inc. All rights reserved. 26 .As reported in Lexmark’s 2014 Annual Report on Form 10-K, Lexmark identified a material weakness in accounting for income taxes. As part of the company’s continued income tax accounting remediation efforts, tax revisions have been made to correct errors for prior fiscal periods. Revisions to GAAP EPS were as follows: 3Q14 EPS of -0.05, 4Q14 EPS of +0.05, and Full Year 2014 of +0.01. Revisions to non-GAAP EPS were as follows: 3Q14 EPS of -0.09, 4Q14 EPS of +0.03, and Full Year 2014 of -0.05. All tax revisions made for prior annual periods will be reported in the company’s annual report on Form 10-K for the period ended December 31, 2015.
  • 27. © Lexmark International, Inc. All rights reserved. 27