HP at Citi Conference Notes

Cathie Lesjak – CFO

Japanese competitors have benefited from weak yen but that is normalizing

“So, when it comes to Japanese competitors, one of the advantages that they have had and this isn’t an alternatives question, this is kind of the core business. The Japanese have had a fairly weak yen if you look at oh the last couple of years that has enabled them to be very price aggressive on a unit prices perspective. What we’re seeing is that that hasn’t stepped up significantly despite the fact that the yen has weakened a bit. And so it seems that it kind of normalizing.”

Buying market share can be bad economics

“As the CFO, I get quite nervous about having a goal of market share, because you could go out and buy a lot of bad units. And you could high-five on the market share. So, it’s important that it’s profitable and then it’s then consistent with our strategy.”

Price increases as commodity prices increase

“So, as we talked about earlier, using our balance sheet is one of the levers that we use. That is not related to price increases directly. The second lever that’s available to us to deal with commodity cost increases, is increasing prices. And we’ve done several price increases.”

Customers may expect price decreases now that the dollar has come down

“we keep talking about the fact that commodity costs are increasing, which they are and as well the fact that until recently the currency has been a bit of a challenge as well. So, when you sit and talk to the customer and you help them understand why you’re increasing prices, you have heightened their awareness as to what drives price increases. So, we expect that with the weakening dollar, we will have to drop prices much more rapidly than we had in the past. The customers are going to basically say, I stuck with you when you were raising prices, because I understood why you needed to do it. Now, there is an opportunity for you to lower prices, we expect to lower price. And so we do expect the prices will come down if the dollar stays kind of at the levels that we’re seeing or weakens further.”

Have the opportunity to disrupt manufacturing with 3D printing

“We have the opportunity to disrupt a $12 trillion manufacturing industry. We are playing today in plastics, 3D-printed plastics, which is the biggest market for 3D at this point in time. You are seeing huge companies, just look at this opportunity and realize that it’s going to make a difference to their manufacturing.”