In the first quarter of 2024, Xerox implemented organisational redesign.
During the quarter, Xerox took initial actions to unlock savings associated with a simplified product offering and global routes to market, including the decision to exit certain Production Print manufacturing operations and sell, or agree to sell, direct operations in four Latin American countries.
Equipment sales of $290 million (€271 million) in the first quarter 2024 declined 25.8% as compared to the first quarter 2023. Total equipment revenue outpaced equipment installation activity. Installations declined across all product groups primarily due to prior year backlog reductions.
Post-sale revenue of $1.2 billion (€1.12 billion) declined 8.5% as compared to first quarter 2023. Xerox said that the decline was primarily due to reductions in non-strategic, lower margin paper and IT endpoint device placements, as well as the effects of geographic simplification, the termination of the Fuji Royalty and the absence of PARC revenue.
“This quarter, Xerox orchestrated one of its most intense periods of structural change in recent history, continuing the hard work required to reposition our business for long-term, sustainable growth. We implemented comprehensive and strategic operating model changes to align our organisation more closely with our buyers’ needs and improve efficiency,” said Steve Bandrowczak, Chief Executive Officer at Xerox. “While results were below our expectations in Q1, I have full confidence we have the right team and the right strategy to execute Xerox’s Reinvention and deliver on our adjusted operating income targets.”
Core business revenue is expected to be roughly flat year-over-year, reflecting stable Print demand, growth in Digital and IT Services and neutral macroeconomic conditions.
Xerox added: “We expect 2024 pre-tax income and adjusted operating income margins to improve in 2024 to approximately 5.1% and at least 7.5%, respectively. These increases will primarily be driven by structural simplification actions enabled by our reorganization, including the effects of the workforce reduction decisions announced in January 2024.”
