Hewlett Packard Enterprise Announces FY18 Outlook

Hewlett Packard Enterprise (NYSE:HPE) today held its annual Securities Analyst Meeting and provided strategy and financial updates from CEO Meg Whitman, President Antonio Neri, Executive Vice President and CFO Tim Stonesifer and other business leaders.  The webcast and presentations can be found on the HPE Investor Relations Website: investors.hpe.com/SAM2017

HPE Strategy & Market Opportunity
HPE CEO Meg Whitman discussed the progress the company has made since launching in November 2015 and the company’s vision, strategy and market opportunity going forward.

“The progress we’ve made during the past two years has created a company that is more nimble and more focused on the solutions our customers want. We are delivering cutting-edge innovation faster than our competitors.  And, we have improved our financial profile and increased shareholder value by more than 90% since we launched,” said Meg Whitman, CEO of HPE.  “Going forward, we will accelerate profitable growth through a focus on higher margin services and solutions. We will redesign our company to deliver Hybrid IT and Edge innovations tailored to our services strengths.”

HPE’s strategy remains focused on three key pillars.  First, to make Hybrid IT simple through its data center technology, systems software, private cloud and public cloud partnerships.  Second, to power the Intelligent Edge through offerings from Aruba in campus and branch networking, and the Industrial Internet of Things with products like Edgeline and the Universal IOT software platform.  Third, to provide Advisory, Professional and Operational Services capabilities, including giving customers financial flexibility through consumption-based models.

HPE Next
HPE President Antonio Neri gave additional detail on an initiative called HPE Next. Through HPE Next, the company will simplify the organizational structure, redesign business processes and prioritize investments in growth areas.  The company will also right-size its end-to-end cost structure.

“The goal of HPE Next is to simplify our operations, strengthen our execution and shift our investments in innovation towards high growth and higher margin solutions and services,” said Antonio Neri, President of HPE.  “Ultimately, HPE Next will create a fit-for-purpose company and deliver the next wave of shareholder value.”

The HPE Next program will drive significant net savings with an attractive return on investment.  Over the next three years, the program will drive gross cost savings of $1.5 billion. HPE will reinvest about $700 million of that back into the company in the form of go-to-market, operational and R&D investments in key growth areas.  Net cost savings will be approximately $800 million on a run rate basis exiting fiscal year 2020.

In order to achieve this level of cost savings, HPE expects approximately $1.1 billion in cash funding payments over the duration of the program.  Approximately two thirds of the funding will be utilized to optimize the workforce.  The remainder will be used to upgrade and simplify IT systems, in addition to other non-labor actions.  These payments will be partially offset by real estate sales, which should generate approximately $300 million in cash over the next three years.
more at: https://news.hpe.com/hewlett-packard-enterprise-announces-fy18-outlook/

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