EMEA Supplies Slide Hits Hp.

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EMEA Supplies Slide Hits Hp.

HP Inc has reported that sales of its lucrative print supplies in the EMEA region fell in the mid-teens during the company’s third quarter.

By Andy Braithwaite

Palo Alto (CA), USA, HP Inc has reported that sales of its lucrative print supplies in the EMEA region fell in the mid-teens during the company’s third quarter.

 

HP’s total supplies revenue in the quarter ended 31 July was around $3.2 billion, a 7% year-on-year constant-currency decline. The decrease was driven by the EMEA region where supplies sales dropped in the mid-teens as the company faces the triple whammy of increased competition from aftermarket products, secular headwinds in the print category and soft economic conditions in Europe.

 

As a result, HP now expects FY2019 declines in supplies sales to be the 4-5% range – versus its previous forecast of -3% – and is not predicting supplies growth in its next financial year either.

 

The company has been implementing a number of initiatives to try and rectify the situation. These include improving channel partnerships, shifting to a more contractual business model, gaining improved visibility in online channels, increased brand and intellectual property protection and centralising pricing decisions. Actions are also being taken to take “significantly more cost out of the business” and there have been some senior management changes in EMEA.

 

Overall Q3 sales in the Printing division were $4.91 billion, down 5% year on year. In addition to the lower supplies sales, consumer hardware revenue fell by 10%, although this was partially offset by a 3% increase in the commercial channel. In terms of units, commercial hardware fell by 4% and consumer by 10%. Despite this, HP says it has been increasing its market share, with an overall hardware share of 44% and A3 now up to around 10% following the acquisition of the Samsung print business.

 

Q3 operating profit at the division was $765 million, a year-on-year drop of around 9%, while operating margin fell by 40 basis points to 15.6%.

 

There was better news from HP’s Personal Systems division where Q3 was described as “an exceptional quarter”. Sales grew by 6% in constant currencies to $9.7 billion driven by commercial customers, while operating profit jumped 51% to $547 million.

https://www.opi.net/news/region/001-north-america/emea-supplies-slide-hits-hp/

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August 27, 2019 at 11:37 AM