全錄公司 (XRX) 2023 Q3 法說會逐字稿

Welcome to the Xerox Holdings Corporation Third Quarter 2023 Earnings Release Conference Call. After the presentation, there will be a question-and-answer session. (Operator Instructions).

歡迎參加施樂控股公司 2023 年第三季財報發布電話會議。演講結束後，將進行問答環節。 （操作員說明）。

At this time, I would like to turn the meeting over to Mr. David Beckel, Vice President of Investor Relations. Please go ahead, sir.

現在，我想把會議交給投資人關係副總裁大衛貝克爾先生。請繼續，先生。

Good morning, everyone. I'm David Beckel, Vice President and Head of Investor Relations at Xerox Holdings Corporation. Welcome to the Xerox Holdings Corporation Third Quarter 2023 Earnings Release Conference Call hosted by Steve Bandrowczak, Chief Executive Officer. He is joined by Xavier Heiss, Executive Vice President and Chief Financial Officer.

大家，早安。我是大衛貝克 (David Beckel)，施樂控股公司副總裁兼投資人關係主管。歡迎參加由執行長 Steve Bandrowczak 主持的施樂控股公司 2023 年第三季收益發布電話會議。執行副總裁兼財務長 Xavier Heiss 也加入了他的行列。

At the request of Xerox Holdings Corporation, today's conference call is being recorded. Other recording and/or rebroadcasting of this call are prohibited without the expressed permission of Xerox. During this call, Xerox executives will refer to slides that are available on the web at www.xerox.com/investor and will make comments that contain forward-looking statements, which, by their nature, address matters that are in the future and uncertain. Actual future financial results may be materially different than those expressed herein.

應施樂控股公司的要求，今天的電話會議正在錄音。未經施樂明確許可，禁止本次通話進行其他錄音和/或轉播。在本次電話會議中，施樂高層將參考 www.xerox.com/investor 網站上提供的幻燈片，並發表包含前瞻性陳述的評論，這些前瞻性陳述本質上解決的是未來和不確定的問題。未來的實際財務結果可能與本文所述的結果有重大差異。

At this time, I'd like to turn the meeting over to Mr. Bandrowczak.

現在，我想把會議交給 Bandrowczak 先生。

Good morning, and thank you for joining our Q3 2023 earnings call. Before I get to this quarter's results, I would like to start today's call by acknowledging the tragic events unfolding in the Middle East. Our thoughts and prayers are with the victims and their families, which include our local employees, clients and partners. We are all hoping for a peaceful resolution.

早安，感謝您參加我們的 2023 年第三季財報電話會議。在公佈本季業績之前，我想在今天的電話會議開始時承認中東正在發生的悲慘事件。我們的思念和祈禱與受害者及其家人同在，其中包括我們當地的員工、客戶和合作夥伴。我們都希望和平解決。

In Q3, the successful execution of our strategic priorities resulted in another quarter of growth in adjusted operating income, EPS and free cash flow. Summarizing results for the quarter, revenue of $1.65 billion declined 5.7% in actual currency and 7.4% in constant currency. Adjusted EPS was $0.46, $0.27 higher year-over-year. Free cash flow was $112 million compared to a use of $18 million in the prior year quarter. And adjusted operating margin of 4.1% was higher year-over-year by 40 basis points.

第三季度，我們策略重點的成功執行導致調整後營業收入、每股盈餘和自由現金流又成長了一個季度。總結本季的業績，營收為 16.5 億美元，以實際貨幣計算下降 5.7%，以固定匯率計算下降 7.4%。調整後每股收益為 0.46 美元，年增 0.27 美元。自由現金流為 1.12 億美元，而去年同期的使用量為 1,800 萬美元。調整後營業利益率為 4.1%，較去年同期高出 40 個基點。

While I'm never pleased to report a decline in revenue, this quarter's top line results were largely anticipated. The decline in revenue reflects a relatively stable demand environment for our products and services, offset by declines in certain cyclical low-margin post-sale revenue categories as well as declines in revenues associated with strategic actions put in place to simplify our business.

雖然我從來不高興報告收入下降，但本季的營收結果在很大程度上是預料之中的。收入下降反映出我們的產品和服務的需求環境相對穩定，但被某些週期性低利潤售後收入類別的下降以及與為簡化業務而採取的策略行動相關的收入下降所抵消。

Despite a reduction in revenue in Q3, we once again grew operating income and operating income margin on a year-over-year basis. This growth is due to a reduction in costs associated with recent business simplification efforts, our ability to offset product cost increases with higher prices and the purposeful avoidance of revenue opportunities bearing low levels of profitability. As I will discuss, we expect the continued simplification of our business to drive substantial incremental improvement in profit margin and profit levels over the next few years.

儘管第三季收入減少，但我們的營業收入和營業利潤率再次較去年同期成長。這種增長是由於與最近的業務簡化工作相關的成本降低、我們透過提高價格抵消產品成本增加的能力以及有目的地避免盈利水平較低的收入機會。正如我將討論的，我們預計業務的持續簡化將在未來幾年推動利潤率和利潤水準的大幅提高。

Free cash flow improved $130 million year-over-year in Q3 and has increased by more than $330 million year-to-date. Growth in free cash flow was due in part to a change in FITTLE strategy and its approach to funding new originations, which we expect will generate meaningful amounts of incremental free cash flow for many years to come.

第三季自由現金流年增 1.3 億美元，今年迄今增加超過 3.3 億美元。自由現金流的成長部分歸因於 FITTLE 策略及其資助新項目的方法的變化，我們預計這將在未來許多年產生大量的增量自由現金流。

As always, we remain focused on our 3 strategic priorities: client success, profitability and shareholder returns. Client success is a strategic imperative for Xerox. Our ability to solve clients' most challenging workplace productivity needs and offset the effects of rising inflation, labor constraints and higher cost of capital with productivity-enhancing solutions helps us not only gain market share in print, but expand client wallet share through incremental services.

一如既往，我們仍然專注於我們的 3 個策略重點：客戶成功、獲利能力和股東回報。客戶成功是施樂的策略要務。我們能夠透過提高生產力的解決方案來解決客戶最具挑戰​​性的工作場所生產力需求，並抵消通貨膨脹上升、勞動力限制和資本成本上升的影響，這不僅幫助我們贏得了印刷市場份額，還透過增量服務擴大了客戶的錢包份額。

This quarter, Xerox was recognized as a leader in IDC Marketscape's Worldwide Print Transformation Vendor Assessment for our breadth of transformative workplace technology solutions both related to and adjacent to print. Our advanced solutions provide us a distinct advantage as we compete for new and renewal business. This quarter and year-to-date, service signings grew double digits in constant currency, led by growth in digital services. Increasingly, digital services such as advanced customer engagement and intelligent document processing are replacing traditional print demand as contracts with existing clients renew. Year-to-date, the revenue replacement rate for a majority of renewed service contract is 100% or higher despite the ongoing consolidation of print demand as companies adapt to more permanent hybrid workplace arrangements.

本季度，施樂在 IDC Marketscape 的全球印刷轉型供應商評估中被評為領導者，因為我們提供與列印相關和鄰近的變革性工作場所技術解決方案。我們先進的解決方案為我們競爭新業務和續訂業務提供了獨特的優勢。本季和年初至今，在數位服務成長的帶動下，以固定匯率計算，服務簽約量實現了兩位數成長。隨著與現有客戶的合約續約，高級客戶參與和智慧文件處理等數位服務越來越多地取代傳統的列印需求。今年迄今為止，儘管隨著公司適應更永久的混合工作場所安排，印刷需求不斷整合，但大多數續約服務合約的收入替代率仍為 100% 或更高。

Moving to profitability. In Q3, we took additional actions to simplify our operations and improve the efficiency of our cost structure. In August, we sold our 3D Print business, Elem Additive Solutions, to ADDiTEC. And in September, we announced the expansion of our relationship with Peak Solutions, an affiliate of HBS Investment Partners, to include the provision of leasing services to FITTLE's network of independent dealers. Both actions improve the flexibility of our cost base, while enabling greater focus on our core capabilities in and around print, digital and IT services.

轉向盈利。在第三季度，我們採取了額外的行動來簡化營運並提高成本結構的效率。 8 月，我們將 3D 列印業務 Elem Additive Solutions 出售給 ADDiTEC。 9 月，我們宣布擴大與 HBS Investment Partners 附屬公司 Peak Solutions 的合作關係，包括向 FITTLE 的獨立經銷商網路提供租賃服務。這兩項措施都提高了我們成本基礎的靈活性，同時使我們能夠更加關注印刷、數位和 IT 服務及其周邊的核心能力。

Finally, shareholder returns. A few weeks ago, we repurchased roughly 34 million shares previously owned by Carl, Icahn and Affiliates, resulting in a reduction of our share count of around 22%. The decision to repurchase these shares was consistent with the capital allocation and shareholder return philosophy, which is to deploy cash in areas providing the highest return for shareholders. Management and the Board of Directors believe this transaction will create substantial value for shareholders over time as the reduction of shares allows equity holders greater participation in the expected earnings growth associated with our transformation, which I will discuss shortly. The transaction is expected to be EPS accretive, while preventing the type of market overhang normally associated with an open market disposal of significant equity states.

最後是股東回報。幾週前，我們回購了卡爾、伊坎和關聯公司之前持有的約 3,400 萬股股票，導致我們的股份數量減少了約 22%。回購這些股份的決定符合資本配置和股東回報理念，即將現金配置在為股東提供最高回報的領域。管理層和董事會相信，隨著時間的推移，這項交易將為股東創造巨大的價值，因為股份的減少使股東能夠更多地參與與我們轉型相關的預期盈利增長，我將很快討論這一點。該交易預計將增加每股收益，同時防止通常與公開市場處置重要股權相關的市場過剩類型。

Our 3 strategic priorities have been instrumental in laying the groundwork for our direction moving forward. On our Q2 call, we provided examples of the ways in which we are simplifying our business to refocus on our core operations of print, digital and IT services. Those actions were critical enablers of an even more significant transformation of our business. For the past year, with the help of outside experts, we have analyzed our business model, competitive strengths and market opportunities to define an optimal strategic path. And today, we are sharing with investors the preliminary framework for a multiyear strategic transformation plan, which we refer to as Reinvention.

我們的 3 項策略重點為我們的前進方向奠定了基礎。在第二季的電話會議上，我們提供了一些範例，說明我們如何簡化業務，重新專注於印刷、數位和 IT 服務的核心業務。這些行動是我們業務實現更重大轉型的關鍵推動力。過去一年，在外部專家的幫助下，我們分析了我們的商業模式、競爭優勢和市場機會，以確定最佳的策略路徑。今天，我們與投資者分享多年戰略轉型計劃的初步框架，我們稱之為「重塑」。

First, let me define what Reinvention means to Xerox. Reinvention is a comprehensive and operational simplification of our business resulting in a strategic repositioning of the company to take advantage of favorable macro trends, including the digitalization of document workflows associated with the power of AI, while managing the secular headwinds associated with traditional print. Reinvention does not mean we are abandoning our core print business, which we expect to continue generating strong profits and cash flow for many years.

首先，讓我定義一下重塑對施樂意味著什麼。重塑是對我們業務的全面和營運簡化，從而對公司進行策略性重新定位，以利用有利的宏觀趨勢，包括與人工智慧的力量相關的文檔工作流程的數位化，同時管理與傳統印刷相關的長期阻力。重塑並不意味著我們放棄我們的核心印刷業務，我們預計該業務將在多年內繼續產生強勁的利潤和現金流。

Reinvention means building new capabilities on top of a solid print core. Management and the Board believe the most direct and probable path to sustainable growth in profit, free cash flow and shareholder returns requires a structural redesign of our operations, combined with selected reinvestment in capabilities essential to addressing clients' most challenging workplace productivity needs.

重塑意味著在堅實的列印核心之上建立新功能。管理層和董事會認為，實現利潤、自由現金流和股東回報可持續增長的最直接、最可能的途徑需要對我們的營運進行結構性重新設計，並結合對滿足客戶最具挑戰​​性的工作場所生產力需求所必需的能力進行有選擇的再投資。

The workplace has evolved, and Xerox is evolving with it to ensure we power the productive workplace of today and tomorrow. The ultimate goal of Reinvention is to facilitate Xerox's shift from a leader in print technology to an unparalleled technology and service provider.

工作場所已經發展，施樂也隨之發展，以確保我們為今天和明天的高效工作場所提供動力。 Reinvention的最終目標是促進施樂從印刷技術的領導者轉變為無與倫比的技術和服務提供者。

There are 3 primary components of the Reinvention. First is a geographic optimization, which entails taking a more selective approach to direct operations in certain markets and, when appropriate, shifting to a partner-led distribution model. This optimization of our go-to-market approach is expected to result in lower revenue initially, but provide a stronger and more profitable foundation from which to grow revenue going forward.

重塑有 3 個主要組成部分。首先是地域優化，這需要在某些市場採取更有選擇性的直接運作方式，並在適當的時候轉向合作夥伴主導的分銷模式。我們對上市方法的優化預計最初會導致收入下降，但將為未來增加收入提供更強大、更有利可圖的基礎。

Second is the optimization of our product offering and pricing models. Through the Reinvention, we will streamline our product offerings to maximize profitability and allow greater internal focus on the delivery of products and services that address the evolving needs of a hybrid workplace. We will introduce a more consumer-like touchless experience to improve client satisfaction, and we'll simplify our pricing models to deliver faster and more effective decisioning, when pursuing new and renewal business.

其次是我們的產品供應和定價模型的最佳化。透過重塑，我們將簡化我們的產品供應，以最大限度地提高盈利能力，並讓內部更加關注提供產品和服務，以滿足混合工作場所不斷變化的需求。我們將引入更像消費者的非接觸式體驗，以提高客戶滿意度，並且我們將簡化定價模型，以便在追求新業務和續訂業務時提供更快、更有效的決策。

The optimization of our geographic footprint, product offerings and pricing models will in turn enable an end-to-end organizational and structural simplification of our business, unlocking the third component of the Reinvention: operating efficiencies across IT, business support functions and the supply chain.

我們的地理足跡、產品供應和定價模型的優化反過來將實現我們業務的端到端組織和結構簡化，解鎖重塑的第三個組成部分：IT、業務支援功能和供應鏈的營運效率。

While the Reinvention is expected to result in a more profitable and streamlined organization, it is not simply a cost-cutting program. Equally important, if not more so, is Xerox' ability to transition over time to become a services-led, software-enabled provider of advanced workplace solutions. A transition of this magnitude requires select investment in organic and inorganic growth opportunities.

雖然重塑預計將帶來更多利潤和精簡的組織，但它不僅僅是一個成本削減計劃。同樣重要（甚至更重要）的是，施樂有能力隨著時間的推移轉型成為一家以服務為主導、軟體支援的先進工作場所解決方案提供者。如此大規模的轉型需要對有機和無機成長機會進行選擇性投資。

These investments are expected to be self-funded and will target opportunities to grow our share of wallet in print and print services as well as high-growth adjacent markets, where we have a clear path to win, such as managed IT services for small and midsized clients and digital services. In total, Reinvention is expected to generate substantial improvement in operating income and income margin over the next few years.

這些投資預計將是自籌資金，並將瞄準增加我們在印刷和列印服務以及高成長相鄰市場中的份額的機會，我們在這些市場上有明確的獲勝之路，例如為小型和中小型企業提供託管IT 服務。中型客戶和數位服務。總的來說，Reinvention 預計將在未來幾年大幅改善營業收入和利潤率。

By 2026, we expect to deliver an improvement to 2023 adjusted operating income of at least $300 million, resulting in return to double-digit adjusted operating income margins. Importantly, this improvement is inclusive of investments in growth, which are expected to drive a more diversified revenue mix with greater exposure to markets with high rates of growth. We will provide more specifics and the phasing of operating income improvements as specific actions are taken in future quarters.

到 2026 年，我們預計將在 2023 年調整後營業收入的基礎上提高至少 3 億美元，從而使調整後營業收入利潤率恢復到兩位數。重要的是，這種改善包括對成長的投資，預計這將推動收入組合更加多元化，並更多地接觸高成長率的市場。隨著未來幾季採取具體行動，我們將提供更多細節和營業收入改善的階段性資訊。

To recap, we are confident in our ability to successfully execute this Reinvention. Project Own It has instilled in this company a culture of continuous operating improvement. Our management team is more than capable of delivering a transformation of this magnitude and our brand, client relationships and history of innovation give us the right to play and win in digital and managed IT services. Reinvention will not only improve Xerox profitability, but reposition the company for long-term sustainable growth. And with strong free cash flow supporting our dividend, investors will be rewarded as the strategy progresses.

總而言之，我們對成功執行這項重塑的能力充滿信心。 Project Own It 向該公司灌輸了持續改善營運的文化。我們的管理團隊完全有能力實現如此大規模的轉型，我們的品牌、客戶關係和創新歷史使我們有權利在數位化和託管 IT 服務領域參與並獲勝。重塑不僅將提高施樂的獲利能力，還將重新定位公司以實現長期永續成長。憑藉強勁的自由現金流支持我們的股息，隨著策略的進展，投資者將獲得回報。

I will now hand over to Xavier.

我現在將交給澤維爾。

Thank you, Steve, and good morning, everyone. As Steve mentioned, we delivered another quarter of growth in adjusted operating income and income margin despite a decline in revenue, evidencing our ability to manage profitability amid fluctuation in revenue. The year-over-year decline in revenue this quarter was driven mainly by a decline in transactional noncontractual post-sales revenue components. Equipment revenue declined modestly relative to the prior year due in large part to a reduction in equipment backlog in the prior year quarter.

謝謝你，史蒂夫，大家早安。正如史蒂夫所提到的，儘管收入下降，但我們的調整後營業收入和利潤率又實現了一個季度的增長，這證明了我們在收入波動的情況下管理盈利能力的能力。本季營收年減的主要原因是交易性非合約售後營收部分的下降。設備收入較上年略有下降，很大程度是由於上年季度設備積壓的減少。

Turning to profitability. We delivered our first consecutive quarter of year-over-year improvement in growth on operating profit margin. Gross margin improved 60 basis points over the prior year quarter, mainly due to the benefit associated with pricing increases on cost efficiency actions, partially offset by a 50 basis point headwind from the termination of Fuji royalties. Increases in product costs were more than offset by improvement in supply chain related expense and pricing actions.

轉向盈利能力。我們實現了營業利潤率連續第一個季度同比增長。毛利率比去年同期提高了 60 個基點，主要是由於成本效率行動的定價上漲帶來的好處，但部分被富士特許權使用費終止帶來的 50 個基點的阻力所抵消。產品成本的增加被供應鏈相關費用和定價行為的改善所抵銷。

Adjusted operating margin of 4.1% increased 40 basis points year-over-year as the effect of lower revenue and gross profit, along with higher compensation and bad debt expenses, were offset by close to 400 basis points of improvement from ongoing operating efficiencies and pricing actions. Adjusted other expenses net were $29 million lower year-over-year due to higher gains from the sales of non-core business assets and lower non-financing interest expense.

調整後營業利潤率為 4.1%，年成長 40 個基點，原因是收入和毛利下降以及薪酬和壞帳費用增加的影響被持續營運效率和定價提高近 400 個基點所抵消行動。由於非核心業務資產銷售收益增加以及非融資利息支出減少，調整後其他費用淨額年減 2,900 萬美元。

Adjusted tax rate was 7.3% compared to 42.1% in the same quarter last year, largely due to the tax benefit associated with the release of uncertain tax positions and the remeasurement of deferred tax assets in the current year period as well as a nonrecurring unfavorable effect of changes in certain tax returns in the prior year period.

調整後稅率為7.3%，而去年同期為42.1%，主要是由於本年度不確定納稅狀況釋放和遞延所得稅資產重新計量帶來的稅收優惠以及非經常性不利影響上一年期間某些納稅申報表的變化。

Adjusted EPS of $0.46 in the third quarter was $0.27 higher than the prior year, driven by an increase in the sale of non-core business assets on a lower tax rate. GAAP EPS of $0.28 was $2.76 higher than the prior year, mainly due to an after-tax non-cash goodwill impairment charge of $395 million or $2.54 per share in the prior year. There were no EPS impact this quarter associated with the recent repurchase of shares from Carl, Icahn and Affiliates.

第三季調整後每股收益為 0.46 美元，比去年同期高出 0.27 美元，這是由於在較低稅率下非核心業務資產的銷售增加所致。 GAAP 每股盈餘為 0.28 美元，比前一年增加 2.76 美元，主要是因為去年稅後非現金商譽減損費用為 3.95 億美元，即每股 2.54 美元。最近從卡爾、伊坎和附屬公司回購股票不會對本季每股收益產生影響。

Let me now review revenue and cash flow in more details. Turning to revenue. Equipment sales of $386 million in Q3 declined 1% year-over-year in actual currency or 2% in constant currency. The decline in equipment revenue reflect stabled among conditions, offset by the effect of EMEA backlog reductions in the prior year. Consistent with recent quarter, revenue trend outpaced equipment in solution activity due to favorable product on geographic mix as well as higher prices. This was particularly true with our A3 product, which experienced unfavorable geographic mix effect in the prior year, due to backlog reduction in EMEA. Entry A4 installations were lower again this quarter due to the ongoing normalization of work-from-home trends.

現在讓我更詳細地回顧一下收入和現金流。轉向收入。第三季設備銷售額為 3.86 億美元，以實際貨幣計算年減 1%，以固定匯率計算年減 2%。設備收入的下降反映了環境的穩定，但被上一年歐洲、中東和非洲積壓訂單減少的影響所抵消。與最近一個季度一致，由於地理組合上有利的產品以及更高的價格，解決方案活動中的收入趨勢超過了設備。我們的 A3 產品尤其如此，由於歐洲、中東和非洲地區的積壓訂單減少，該產品在去年經歷了不利的地理混合效應。由於在家工作趨勢的持續正常化，本季入門級 A4 安裝量再次下降。

Constant revenue of $1.3 billion declined 9% in constant currency year-over-year and 7% in actual currency. As noted, post sale decline were mainly driven by a reduction in cyclical transactional items, most notably a significant decline in low-margin paper sales on lower IT and polling device placements. Wholesale revenue was further impacted by the termination of Fuji royalties on the effect of specific strategic actions, which resulted in lower financing on PARC revenue.

固定收入為 13 億美元，以固定匯率計算年減 9%，以實際貨幣計算年減 7%。如前所述，售後下降主要是由於週期性交易項目的減少造成的，最明顯的是由於 IT 和投票設備安裝量減少導致低利潤紙張銷售大幅下降。富士專利費終止對具體策略行動的影響進一步影響了批發收入，導致 PARC 收入融資減少。

Revenues from contractual print and digital services declined slightly as digital and managed IT services revenue growth was offset by a decline in print services for production clients, which have generally been more affected by macroeconomic pressure than office clients. Geographically, both regions declined in actual and constant currency. The decline in EMEA was more pronounced given the substantial reduction in EMEA backlog in the prior year quarter on a weakening macroeconomic outlook.

合約印刷和數位服務的收入略有下降，因為數位和託管 IT 服務收入的成長被面向生產客戶的印刷服務的下降所抵消，而生產客戶通常比辦公室客戶更容易受到宏觀經濟壓力的影響。從地理上看，這兩個地區的實際貨幣和不變貨幣都出現下降。由於宏觀經濟前景疲弱，上一季歐洲、中東和非洲地區積壓訂單大幅減少，因此歐洲、中東和非洲地區的下降更為明顯。

In the Americas, an increase in equipment revenue was more than offset by a decline in post sales revenue due in part to lower sales of the aforementioned cyclical transactional items.

在美洲，設備收入的成長被售後收入的下降所抵消，部分原因是上述週期性交易項目的銷售額下降。

Let's now review cash flow. Free cash flow was $112 million in Q3, higher by $130 million year-over-year. Operating cash flow was $124 million in Q3 compared to a use of $8 million in Q3 2022. Improvements were mainly driven by a net source of cash associated with financing assets and an improvement in working capital. Finance asset activity was a use of cash this quarter of $51 million compared to a use of cash of $54 million in the prior year, reflecting the benefit of our work-flow program with HPS, partially offset by higher origination.

現在讓我們回顧一下現金流。第三季自由現金流為 1.12 億美元，較去年同期增加 1.3 億美元。第三季的營運現金流為 1.24 億美元，而 2022 年第三季的使用量為 800 萬美元。改善主要是由與融資資產相關的淨現金來源和營運資本的改善所推動的。本季金融資產活動的現金使用量為 5,100 萬美元，而上一年的現金使用量為 5,400 萬美元，反映了我們與 HPS 的工作流程計劃的好處，但部分被較高的來源所抵消。

Working capital was a source of cash of $27 million, resulting in a $41 million year-over-year increase in cash driven mainly by a reduction in inventory. Investing activity were a source of cash of $25 million compared to a use of cash of $33 million in the prior year due to higher proceeds from sale of non-core business assets in the current quarter and the prior year acquisition of Go Inspire.

營運資金是 2,700 萬美元的現金來源，主要由於庫存減少，現金年增 4,100 萬美元。投資活動帶來了 2,500 萬美元的現金來源，而前一年的現金使用量為 3,300 萬美元，原因是本季出售非核心業務資產和去年收購 Go Inspire 帶來的收益增加。

Financing activity consumed $94 million of cash this quarter, which includes a payment of around $60 million of secured debt on dividend totaling $43 million. In addition, we secured a $555 million bridge loan facility, the proceeds of which were used to repurchase share from Carl Icahn and Affiliate. This facility is expected to be replaced in the near term with an alternative debt instrument.

本季融資活動消​​耗了 9,400 萬美元的現金，其中包括支付約 6,000 萬美元的擔保債務以及總計 4,300 萬美元的股息。此外，我們還獲得了 5.55 億美元的過橋貸款融資，其收益用於從 Carl Icahn 和 Affiliate 回購股份。預計該工具將在短期內被替代債務工具取代。

Turning to segments. FITTLE origination volume grew 9% year-over-year. Captive product origination were up 24 points, while non-captive channel origination, which includes third-party dealers on non-Xerox vendor, fell 8%, a reflection of the recent change in FITTLE strategy to return its focus towards captive-only financing solutions. As expected, FITTLE finance receivables were down roughly 4% sequentially in actual currency, reflecting the runoff of existing finance receivable on HPS funding of more than 50% of FITTLE Q3 originations.

轉向細分市場。 FITTLE 的發行量年增 9%。自保產品起源上升了24 個百分點，而非自保通路起源（包括非施樂供應商的第三方經銷商）下降了8%，這反映了FITTLE 策略最近的變化，將重點重新轉向僅自保融資解決方案。如預期，FITTLE 融資應收帳款以實際貨幣計算連續下降約 4%，反映出 FITTLE 第三季超過 50% 的 HPS 融資現有融資應收帳款的流失。

As a result of the change in FITTLE strategy, we expect its finance receivable balance to decline and normalize closer to $1 billion by 2027. FITTLE revenue was flat year-over-year in Q3 as higher commission from the sales of finance receivable asset were offset by lower finance income and other fees associated with the decline in FITTLE finance receivable asset base.

由於FITTLE 策略的變化，我們預計其財務應收帳款餘額將下降，並在2027 年正常化至接近10 億美元。由於應收帳款融資資產銷售產生的佣金增加被抵消，FITTLE 第三季收入年比持平由於 FITTLE 融資應收帳款資產基礎下降，財務收入和其他費用降低。

Segment profit for FITTLE was $4 million, up $2 million year-over-year primarily due to lower bad debt expense and lower intercompany commissions. As previously indicated, we expect further improvement to bad debt expense going forward as our finance receivable book decline.

FITTLE 的部門利潤為 400 萬美元，年增 200 萬美元，主要是由於壞帳費用減少和公司間佣金減少。如前所述，隨著我們的財務應收帳款下降，我們預計壞帳費用將進一步改善。

Print and Other revenue fell 6% year-over-year in Q3, primarily to lower post sales revenue. Print and Other segment profit improved by around 2% versus the prior year quarter resulting in a 30 basis point expansion in segment profit margin year-over-year, driven by the benefit of price and cost actions, partially offset by lower revenue.

第三季印刷和其他收入年減 6%，主要是因為售後收入下降。印刷及其他部門利潤較上年同期增長約 2%，導致部門利潤率同比擴大 30 個基點，這主要得益於價格和成本行動的好處，但部分被收入下降所抵消。

Turning to capital structure. We ended Q3 with approximately $620 million of cash, cash equivalents and restricted cash. Roughly $2.5 billion of the remaining $3.6 billion of our outstanding debt support our finance asset, with the remaining debt of around $1.1 billion attributable to the non-leasing business. Total debt consists of senior unsecured bonds, finance asset securitization, the bridge loan associated with the Q3 share repurchase and borrowing under our asset-backed credit facility. We maintained a balanced bond maturity ladder over the next few years.

轉向資本結構。第三季末，我們擁有約 6.2 億美元的現金、現金等價物和限制性現金。剩餘的 36 億美元未償債務中約有 25 億美元支持我們的金融資產，剩餘債務約 11 億美元來自非租賃業務。總債務包括優先無抵押債券、金融資產證券化、與第三季股票回購相關的過橋貸款以及我們的資產支持信貸安排下的借款。在接下來的幾年裡，我們保持了平衡的債券期限階梯。

Finally, I will address guidance. Our outlook for full year revenue remained unchanged at flat-to-down low-single-digit at constant currency. We continue to see momentum in demand for our product and services particularly in the Americas and for our faster-growing digital services. However, in the past 3 months, we have seen a mild softening of demand for print services and equipment in our European market, reflecting a weakening macroeconomic condition. As a result, we now expect full year revenue to come in at the lower end of our guided range.

最後，我將談談指導。我們對全年收入的展望保持不變，以固定匯率計算，為持平至下降的低個位數。我們繼續看到對我們的產品和服務的需求勢頭，特別是在美洲以及對我們快速增長的數位服務的需求。然而，在過去三個月中，我們看到歐洲市場對印刷服務和設備的需求溫和疲軟，反映出宏觀經濟狀況疲軟。因此，我們現在預計全年收入將處於我們指導範圍的下限。

As a reminder, we face a difficult equipment revenue comparing Q4 due to a significant reduction in backlog in the prior year. Further, we expect some of the headwind affecting post-sale revenue in Q3 to persist in Q4. Despite a slight reduction to our revenue outlook, we maintain our guidance for full year adjusted operating margin of 5.5% to 6% due to the successful implementation of ongoing cost efficiency program and the other events of low or unprofitable revenue opportunities. Q4 operating margin is expected to improve sequentially, but will be lower year-over-year as margins in the prior year benefited from an unusual high mix of highly profitable A3 equipment installed.

提醒一下，由於去年積壓訂單大幅減少，與第四季相比，我們面臨困難的設備收入。此外，我們預計影響第三季售後營收的一些不利因素將在第四季持續存在。儘管我們的收入前景略有下調，但由於持續的成本效率計劃的成功實施以及其他低收入或無利可圖的收入機會事件，我們維持對全年調整後營業利潤率5.5% 至6% 的指導。第四季度的營業利潤率預計將環比提高，但同比會有所下降，因為上一年的利潤率受益於安裝的高利潤 A3 設備的異常高組合。

As noted by Steve, we expect significant improvement in operating income margin in future years as we progress along our Reinvention. Finally, we maintained our free cash flow guidance of at least $600 million.

正如史蒂夫所指出的，隨著我們重塑的進展，我們預計未來幾年營業利潤率將顯著改善。最後，我們維持至少 6 億美元的自由現金流指引。

In summary, we remain on track to deliver our full year guidance as we balance a dynamic macroeconomic backdrop with a rigorous approach to managing operating costs. So one work is being laid for a multiyear improvement in profit and revenue mix, including a return to double-digit operating profit margin, the details of which we will share in the coming year. We'll now open the line for Q&A.

總之，我們仍有望實現全年指引，因為我們平衡了動態的宏觀經濟背景和嚴格的營運成本管理方法。因此，我們正在進行一項工作，以實現利潤和收入組合的多年改善，包括恢復兩位數的營業利潤率，我們將在來年分享相關細節。我們現在將開通問答熱線。

(Operator Instructions) And our first question comes from the line of Ananda Baruah from Loop Capital.

（操作員說明）我們的第一個問題來自 Loop Capital 的 Ananda Baruah。

So I guess there's a bunch of near-term and bigger picture stuff to sort of get into. I guess I'll start with bigger picture, just with regards to Reinvention. Can you talk to any degree to which you're getting a bit of, I guess, I'll call it like a running start into the revenue component and the Reinvention? Steve, I think you kind of referred to it as software and services enabled or software and services led.

所以我想有很多近期和更大的問題需要討論。我想我會從更大的前景開始，就重塑而言。你能談談你所得到的程度嗎，我想，我會稱之為收入部分和重塑的開始？史蒂夫，我認為您將其稱為“軟體和服務啟用”或“軟體和服務主導”。

Sort of what's going on there already that we may not be super aware of that might sort of lend itself to Reinvention? And then I know you talked about making comments in the future about what rev potential looks like. But can you give us any sense of maybe with like the rev growth rate of the areas of the services market and software market, the TAM, I guess, looks like today. So at least we get a sense of what you guys are shooting against from a TAM perspective. I guess I'll start with that.

那裡已經發生了一些我們可能沒有意識到的事情，這可能有助於重塑？然後我知道你談到了未來對轉速潛力的看法。但是您能否給我們一些感覺，例如服務市場和軟體市場領域的轉速成長率，我想 TAM 看起來就像今天一樣。因此，至少我們從 TAM 的角度了解了你們所針對的目標。我想我會從那裡開始。

Yes. Great question. So let me make a couple of comments. So first of all, from a Reinvention standpoint, really looking at a comprehensive and structural simplification of our business, right, which strategically reposition us going forward. What does that mean? We're looking at focus areas around geographic optimization, where we can think about how we sell direct versus indirect, use a partner-led distribution models in subscale areas, focusing on simplification of both our product offering and pricing, which will generate more revenue and generate more demand in those areas as we accelerate that.

是的。很好的問題。讓我發表幾點評論。首先，從重塑的角度來看，真正著眼於我們業務的全面和結構簡化，這對我們未來的策略重新定位。這意味著什麼？我們正在研究圍繞地理優化的重點領域，我們可以考慮如何直接銷售與間接銷售，在小規模區域使用合作夥伴主導的分銷模式，專注於簡化我們的產品供應和定價，這將產生更多收入隨著我們的加速，這些領域會產生更多的需求。

And then operating efficiencies, really looking at our business end-to-end from order-to-cash to hire-to-retire all across our entire business and really thinking about both simplification as well as enabling technology in each one of those processes. You've heard me talk about, where we've embedded AI and augmented reality. And we're seeing significant, not only in terms of productivity, but differentiation in our service model and our service offerings as we go forward. So I said that as the foundation, right? And from a high level, right, delivering double-digit operating income margins, getting back to that. We thought it was really important that we have to go drive and we get back to double-digit operating income margins. And obviously, we talked about $300 million of operating income by 2026.

然後是營運效率，真正審視我們整個業務中從訂單到現金到僱用到退休的端到端業務，並真正考慮每個流程中的簡化和支援技術。你已經聽我說過，我們已經嵌入了人工智慧和擴增實境。隨著我們的發展，我們不僅在生產力方面看到了顯著的差異化，而且在我們的服務模式和服務產品方面也出現了差異化。所以我說這是基礎，對嗎？從高水準來看，對吧，實現兩位數的營業利潤率，回到這一點。我們認為，非常重要的是，我們必須繼續努力，讓營業利潤率回到兩位數。顯然，我們談到到 2026 年營業收入將達到 3 億美元。

What have we already started? And what do you see in terms of the run rate and some of the acceleration going into 2024? We've obviously been working on -- and I've talked about this for a while now, how do we expand our wallet share inside of our existing clients with new products and services, IT services, digital services? And we talked about client success, really focusing on how do we drive the outcomes for our clients in many areas that we see in terms of verticals that need productivity help significantly, specifically in areas like we see in health care, we see in education, we see inside of law firms and driving very specific solutions. We are seeing direct results of that strategy in our renewals. And we talked about it, we're seeing our renewal rate -- revenue renewal rate over 100% now.

我們已經開始做什麼了？您對 2024 年的運行率和一些加速有何看法？顯然，我們一直在努力——我已經談論這個問題有一段時間了，我們如何透過新產品和服務、IT 服務、數位服務來擴大現有客戶的錢包份額？我們討論了客戶的成功，真正關注的是我們如何在垂直行業的許多領域為客戶帶來成果，這些領域需要生產力的顯著幫助，特別是在醫療保健、教育等領域，我們看到律師事務所的內部並推動非常具體的解決方案。我們在續約中看到了策略的直接成果。我們談到了這一點，我們看到我們的續訂率——收入續訂率現在超過 100%。

What does that mean? That means that as we're seeing some of the secular decline in some of our clients in terms of renewals, we're now topping it up with new products and services that are very specifically led and driven by client success either in IT services and I'm talking about endpoints, I'm talking about services like RPA and security as well as digital services, which help them with productivity. So that's given us both a run rate improvement in terms of our revenue and growing inside those existing accounts. and it's also given us a running start in productivity in areas like supply chain, areas like service delivery, areas like our ordering process and order to cash process. Xavier, any other comments?

這意味著什麼？這意味著，當我們看到一些客戶在續約方面出現長期下降時，我們現在正在用新產品和服務來補充，這些產品和服務是由客戶在 IT 服務和我說的是端點，我說的是RPA 和安全性以及數位服務等服務，這些服務可以幫助他們提高生產力。因此，這使我們的收入和現有帳戶的成長都提高了。它也使我們在供應鏈、服務交付、訂購流程和訂單到現金流程等領域的生產力有了良好的開端。澤維爾，還有其他意見嗎？

Yes. Just -- hi, Ananda, just to comment on the revenue side or the revenue shift we are expecting here. So we know the trend on print. The print business is still a strong business for us, generate a lot of margin on profit and cash here. At the same time, you know that we have started the foundation on developing IT services and digital services there. The market growth of the company is large.

是的。只是 - 嗨，阿南達，只是對收入方面或我們在這裡預期的收入變化發表評論。所以我們知道印刷的趨勢。印刷業務對我們來說仍然是一項強勁的業務，在這裡產生大量利潤和現金。同時，你知道我們已經在那裡開始了開發IT服務和數位服務的基礎。公司市場成長空間大。

It is large tons in this market. IT service is above $600 billion, digital services in the range of $70 billion. And when we look at the data from this market, we are between 5% to 10% growth. So at the end of the day, what we are planning to do with Reinvention is to drive the revenue shift from a print only or print-centric company into a company, where print will still be present, but also targeting higher ongoing market that will give the revenue -- improve the revenue trajectory of the company, not relying only on print.

這個市場的數量很大。 IT 服務價值超過 6,000 億美元，數位服務價值約 700 億美元。當我們查看這個市場的數據時，我們的成長率在 5% 到 10% 之間。因此，歸根結底，我們計劃透過重塑來推動收入從僅印刷或以印刷為中心的公司轉變為印刷仍然存在的公司，但也瞄準更高的持續市場提供收入——改善公司的收入軌跡，而不僅僅是依賴印刷。

That's all really helpful context. I appreciate all of that. That's super helpful. And then I guess, as a quick follow-up, the sort of the revenue environment from the September quarter that you guys talked about, sounds like Europe may have been a little softer than you thought it was going into the quarter. You're not the first ones for us that we've heard that from. So that seems to be kind of foundational.

這都是非常有用的背景。我很欣賞這一切。這非常有幫助。然後我想，作為一個快速的後續行動，你們談論的九月季度的收入環境，聽起來歐洲可能比你們想像的進入本季度要軟一些。你不是我們第一個聽到這樣的消息的人。這似乎是一種基礎。

Anything other than Europe that was softer than anticipated that you saw during the quarter? And I guess, sort of any meaningful leverage impact you got from the softer revenue? You guys grew margins 40 basis points year-over-year. But I guess, would it have been stronger, the year-over-year growth, margin growth year expansion, if not for the softer revenue? So that's the scenario.

除歐洲以外，您在本季看到的其他地區是否比預期更疲軟？我想，您從收入疲軟中獲得了任何有意義的槓桿影響嗎？你們的利潤率年增了 40 個基點。但我想，如果不是營收疲軟，年成長、利潤率成長是否會更強勁？這就是場景。

No, no, Ananda, your comment are fair here. So Europe has been a little bit worse than what we were thinking here. However, at the same time, and you know that since we have implemented Own It, Own It DNA is still within the company. We have created what we call a flexible cost base and within as well being able to adjust some of the costs, but also being selective in the type of revenue we are targeting there.

不，不，阿難，你的評論在這裡是公平的。所以歐洲的情況比我們想像的還要糟糕。然而，與此同時，您知道，自從我們實施了 Own It 以來，Own It DNA 仍然存在於公司內部。我們創建了所謂的彈性成本基礎，並且能夠在其中調整一些成本，而且還可以選擇性地選擇我們的目標收入類型。

I give you an example, we saw certain erosion on margin on, I call that, non-cyclical, not contractual type of business. Simple example is paper. Another one is endpoint solution in IT services. We aren't interested in going after like revenue only with no profitability. As you know it, this team is driven by a very balanced execution mindset model there. And we have discipline on driving our investment, on our revenue call based on strict return [IRR] or ROIC project.

我給你舉個例子，我們看到了我所說的非週期性、非合約類型業務的利潤率受到一定程度的侵蝕。簡單的例子就是紙張。另一種是IT服務中的端點解決方案。我們對只追求沒有獲利能力的收入不感興趣。如您所知，這個團隊是由非常平衡的執行思維模式所驅動的。我們在推動投資和基於嚴格回報 [IRR] 或 ROIC 專案的收入方面有嚴格的紀律。

So paper, I can quote it here because the paper market is very different to what it was before, and we are not willing, as an example, to go after a paper deal with no margin here.

所以紙質，我可以在這裡引用它，因為紙質市場與以前有很大不同，舉個例子，我們不願意在這裡追求沒有保證金的紙質交易。

And our next question comes from the line of Erik Woodring from Morgan Stanley.

我們的下一個問題來自摩根士丹利的艾瑞克‧伍德林。

This is Maya on for Eric. Maybe a first question for Steve. Can you talk a little bit about the change in strategy with FITTLE? Earlier this year, we were talking about expanding the portfolio to more third parties, but now it's reverting back to kind of a captive financing solution. So my first question is how that impacts your receivables factoring program.

這是 Maya 為 Eric 做的。也許這是史蒂夫的第一個問題。您能談談與 FITTLE 的策略變化嗎？今年早些時候，我們曾討論過將投資組合擴展到更多第三方，但現在又回到了自保融資解決方案。所以我的第一個問題是這對您的應收帳款保理計畫有何影響。

And second, there was once a thought that you could sell the FITTLE business. But given it's now becoming a captive financing business, that seems less likely. Is that correct, that FITTLE would likely no longer be for sale? And I have a follow-up.

其次，曾經有人想過可以出售 FITTLE 業務。但鑑於它現在正在成為一家自保融資業務，這種可能性似乎較小。 FITTLE 可能不再出售，對嗎？我有一個後續行動。

Yes. So let me -- and I stated it, I think, in previous calls. With the changing interest rate environment, it was no longer palatable for us to leverage our balance sheet in the leasing business. And we changed the strategy mid-to-late last year, and we were no longer going to use Xerox balance sheet for this business and we were going to look for other sources of capital to help us with that business. However, it was extremely important that it is a big component of driving our value in the field that we have the ability to be able to do leasing and bundle pricing in the field with leasing.

是的。所以讓我——我想我在之前的電話會議中已經說過了。隨著利率環境的變化，我們不再願意在租賃業務中利用資產負債表。去年中後期我們改變了策略，我們不再使用施樂的資產負債表來開展這項業務，我們將尋找其他資金來源來幫助我們開展這項業務。然而，極其重要的是，我們有能力在該領域進行租賃和捆綁定價，這是推動我們在該領域價值的重要組成部分。

And so we turn to HPS and PEAC, and we are being -- and using them strategically so that we don't leverage our balance sheet. You're absolutely right. Two years ago, we were trying to target growing that business, and potentially, it would have been an operation that potentially would have been up for sale. We have reversed that. It is now going back to an internal captive business and we're not expanding beyond just supporting our business. Xavier?

因此，我們轉向 HPS 和 PEAC，我們正在策略性地使用它們，這樣我們就不會利用我們的資產負債表。你是絕對正確的。兩年前，我們試圖以發展該業務為目標，並且有可能將其出售。我們已經扭轉了這個局面。現在它又回到了內部專屬業務，我們不會將業務擴展到支援我們的業務之外。澤維爾？

Yes. No. You said it, Steve, there on the -- Maya, the other focus that we have there is to make it an offer that support our business rather than looking at it as a pure separated business here. As Steve mentioned it as well, our balance sheet, the current interest rate environment make us -- more than 2 years ago, making this decision here. And at the end of the day, if I look at the current free cash flow being generated on the maybe you spotted when we -- I commented what will be the benefit of this transaction, until 2027, we are expecting the finance receivables balance to decrease up to $1 billion.

是的。不。你說過，史蒂夫，瑪雅，我們的另一個重點是讓它成為支持我們業務的要約，而不是將其視為純粹的獨立業務。正如史蒂夫也提到的那樣，我們的資產負債表、當前的利率環境使我們在兩年多前做出了這個決定。歸根結底，如果我看看當前產生的自由現金流，也許你發現我們——我評論了這筆交易的好處是什麼，到 2027 年，我們預計應收帳款財務餘額將達到最多減少 10 億美元。

And if you look at the current situation, [$2.6 billion] currently going down there. This will be, over time, free cash flow being generated supporting and driving the case for also the Reinvention that we are building at this time. So at the end of the day, the good decision was made 2 years ago. This decision is helping us currently from a balance sheet point of view, and we have kept this ability to be captive and develop our business without hurting it.

如果你看看目前的情況，[26 億美元]目前正在下降。隨著時間的推移，這將產生自由現金流，支持並推動我們目前正在建立的重塑。所以歸根究底，兩年前就做了正確的決定。從資產負債表的角度來看，這項決定目前對我們有幫助，我們保留了這種能力，在不損害業務的情況下發展我們的業務。

Got it. So maybe just if we take a step back. Printing is a secularly declining market. And while I realize that you're leaning into IT and digital service to try and offset some of those pressures, this business is still overwhelmingly print-focused. But there is a huge TAM in Asia that's untapped for Xerox with no licensing restrictions in place now. So why not go after the Asia market? And what are kind of the barriers to entry there?

知道了。所以也許只要我們退一步。印刷是一個長期衰退的市場。雖然我意識到您正在傾向於 IT 和數位服務來嘗試抵消其中一些壓力，但這項業務仍然絕大多數以印刷為重點。但亞洲有一個巨大的 TAM 尚未為施樂開發，目前沒有任何許可限制。那為什麼不進軍亞洲市場呢？進入那裡有哪些障礙？

I think there's a couple of different things. First of all, I've stated a couple of times, I think we can grow in our existing accounts with our existing TAM today both in the EMEA region and here in the Americas region. And so we've got a tremendous amount of opportunity to grow and just execute on what we already have today. If you take a look at our share, there's a significant share growth opportunity even inside of print. And I believe our services differentiation and our product differentiation, if we execute, we can actually grow TAM.

我認為有幾個不同的事情。首先，我已經說過幾次了，我認為我們現在可以透過現有的 TAM 在 EMEA 地區和美洲地區擴大現有帳戶。因此，我們有大量的機會來發展並執行我們今天已經擁有的東西。如果您看一下我們的份額，即使在印刷品內部也存在巨大的份額成長機會。我相信，如果我們執行我們的服務差異化和產品差異化，我們實際上可以發展 TAM。

To go expand into Asia into other markets, you have to go build the supply chain, you've got to go build the go to market, you've got to go build a logistics infrastructure in and around spare parts. It's a significant capital outlay to go expand in those margins. Even if you go with partner-led strategy, you still have significant cash and capital outlay. We believe that the focus that we have on the capital that we already have, we could expand and grow operating margin, as we've shared with you are significantly, faster if we do it in the Americas and EMEA and not expand into that region.

要擴展到亞洲其他市場，你必須建立供應鏈，你必須建立進入市場，你必須建立備用零件及其周圍的物流基礎設施。擴大這些利潤是一筆龐大的資本支出。即使您採用合作夥伴主導的策略，您仍然擁有大量現金和資本支出。我們相信，我們將重點放在現有的資本上，如果我們在美洲和歐洲、中東和非洲地區而不是擴展到該地區，我們可以擴大和提高營業利潤率，正如我們與您分享的那樣。

And our next question comes from the line of Samik Chatterjee from JPMorgan.

我們的下一個問題來自摩根大通的 Samik Chatterjee。

I guess if I can start on Project Reinvention. Can you just help us understand, when you're thinking about the $300 million of improvement there how should we think about impact on profitability of a sale or essentially benefit to cost of goods sold or gross profit relative to how much of this is an improvement on OpEx? And any thoughts around how long these changes on the go-to-market take for you and how sort of the timing of this $300 million should we be expecting in terms of the linearity of the improvement through the next couple or 3 years? And I have a follow-up.

我想我是否可以開始「重塑計畫」。您能否幫助我們理解，當您考慮 3 億美元的改進時，我們應該如何考慮對銷售盈利能力的影響，或者相對於改進的程度而言對銷售商品成本或毛利潤的實質效益運營支出？您是否想過這些上市變化需要多長時間？以及就未來幾年或三年的線性改進而言，我們應該預期這 3 億美元的時間安排如何？我有一個後續行動。

Yes. Thanks, Samik. And thanks for asking a question on Reinvention because this is really a strategic movement for the company, and we are pleased to unveil more on this strategy here. So from a profit point of view, as we mentioned it, we are expecting roughly to double like the operating margin that we have on profitability until 2026. So it will be like 3 years journey that will continue beyond 2026. But we wanted to plant a seed and give you a number so you can, I would say, model and look at the trajectory of the profitability here.

是的。謝謝，薩米克。感謝您就 Reinvention 提出問題，因為這確實是公司的一項策略舉措，我們很高興在此公佈有關該策略的更多資訊。因此，從利潤的角度來看，正如我們所提到的，我們預計到2026 年我們的獲利能力營運利潤率將大致翻倍。因此，這將是一個3 年的旅程，將持續到2026 年之後。但我們希望種植一個種子並給你一個數字，這樣你就可以，我想說，建模並查看這裡的盈利軌跡。

We're expecting the vast majority of the benefit to be in OpEx. Some of it will be in cost of goods sold, but it will be mainly in OpEx because this is where we will rewire entirely the company and look at not only like the key function or some of the function like a go-to-market. You have heard about geo simplification. At the end of the day, what does geo simplification is? Again, back to this concept of balanced execution on a very disciplined way of looking at [IRR] is where should we be present. It does not mean leaving geographies there, but what is the best go-to-market model we should have in all the countries that we are representing here?

我們預計絕大多數收益將來自營運支出。其中一些將計入銷售商品成本，但主要將計入營運支出，因為我們將在這方面對公司進行徹底重組，並且不僅關注關鍵功能或某些功能（如進入市場）。您聽說過地理簡化。歸根究底，地理簡化是什麼？再次回到平衡執行的概念，以非常嚴格的方式看待[IRR]，這就是我們應該出現的地方。這並不意味著離開那裡的地區，但我們在我們代表的所有國家中應該擁有的最佳進入市場模式是什麼？

So OpEx will be a key driver there. And obviously, we are expecting, combined with the benefit of FITTLE free cash flow to go up significantly. As we mentioned it as well, we are expecting this initiative to be self-funded. So we are not expecting to leverage further more the company here. As you know it, we have just completed the transaction with Carl Icahn. We are always opportunistic, when we are looking at accretive and value-accretive acquisition. But at the same time, we have a journey on the trajectory, which is modeled now that will create this profit improvement on the $300 million operating profit that we mentioned here.

因此，營運支出將成為那裡的關鍵驅動因素。顯然，我們預計，結合 FITTLE 自由現金流的好處，將顯著上升。正如我們也提到的，我們預計該計劃將是自籌資金的。因此，我們預計不會進一步利用該公司。如你所知，我們剛剛完成了與卡爾伊坎的交易。當我們考慮增值性和增值性收購時，我們總是機會主義的。但與此同時，我們已經在這條軌跡上走了一段旅程，現在已經建模，這將在我們在這裡提到的 3 億美元營業利潤的基礎上帶來利潤的提高。

Got it, got it. And for my follow-up, you did mention the weakness you're seeing in the transaction business, and I think particularly in EMEA is what you're calling out. I just wanted to understand the nature of what you're hearing from your customers. Is it really a budget consideration and pushing some of those sales out to next year? Or are they rethinking sort of their installed base or something else on a more structural basis on the devices or printer front? Any insights there, please?

明白了，明白了。在我的後續行動中，您確實提到了您在交易業務中看到的弱點，我認為特別是在歐洲、中東和非洲地區，這正是您所指出的。我只是想了解您從客戶那裡聽到的消息的本質。這真的是出於預算考慮並將部分銷售推遲到明年嗎？或者他們是否正在重新考慮他們的安裝基礎或其他在設備或印表機方面更具結構性的基礎？請問有什麼見解嗎？

Yes, let me start. And so if you think about the headwinds that we're seeing, macro headwinds around inflation, around interest rates, around labor, and so what we're hearing from our clients and aligns really well with our strategy, and that is we've got to drive their success through our solutions in products and services. And that's why I talk about we could expand in existing clients today, and that's why we're seeing our renewal rate higher. So things like Robotics as a Service, things like digital workflow in terms of driving productivity inside a very specific verticals.

是的，讓我開始吧。因此，如果你考慮我們所看到的逆風，圍繞通膨、利率、勞動力的宏觀逆風，以及我們從客戶那裡聽到的並且與我們的策略非常吻合的，那就是我們已經透過我們的產品和服務解決方案來推動他們的成功。這就是為什麼我說我們今天可以擴大現有客戶，這就是為什麼我們的續約率更高。因此，諸如機器人即服務之類的東西，諸如數位工作流程之類的東西，可以在非常特定的垂直領域內提高生產力。

So where we are aligning what we're hearing from our clients, number one, is they're looking for help to be able to offset some of these macro trends and drive more productivity, helping them with the challenges around labor, helping them with the challenges around higher cost of capital, things like as a service and subscription model. All of those are actually playing very well into new products and services that we can bring into our clients to help them offset some of the challenges. Xavier?

因此，我們從客戶那裡聽到的第一點是，他們正在尋求幫助，以抵消其中一些宏觀趨勢並提高生產力，幫助他們應對勞動力方面的挑戰，幫助他們圍繞較高資本成本的挑戰，例如服務和訂閱模式。所有這些實際上都在新產品和服務中發揮了很好的作用，我們可以將這些產品和服務帶給客戶，幫助他們應對一些挑戰。澤維爾？

Yes, on the -- back to also to your point, Samik, here. From a macro point of view, so Europe, we are not the only one quoting it there, but a little bit of softening. This is not -- a full decline or a more -- really more than what we are expecting, but we are seeing a softening there. What we have seen as well, I mentioned the paper business.

是的，回到你的觀點，Samik，在這裡。從宏觀角度來看，歐洲並不是唯一引用它的國家，但有一點軟化。這並不是——全面下降或更多——確實超出了我們的預期，但我們看到了那裡的疲軟。我們也看到了，我提到了造紙業務。

The paper business, just also to clarify, this is not a significant business for Xerox. This is like a very low single-digit number in revenue. But compared to last year, where this paper business with certainly some scarcity of paper, we have been able to benefit from later. This year is not as good and we see more flow of Asian paper currently on the market, putting pressure on prices there.

也要澄清的是，紙張業務對施樂來說並不是一項重要業務。這就像一個非常低的個位數收入。但與去年相比，這裡的造紙業務用紙肯定有些稀缺，我們後來才能夠受益。今年的情況不太好，我們看到目前市場上有更多的亞洲紙張流動，這給那裡的價格帶來了壓力。

The other element we are monitoring currently is on the high-end production business. This business obviously is highly connected to, I would say, GDP evolution and the trend on the market share, but also on the access to capital for our high-end production customer. And what we have seen recently is a little bit -- due to interest rate increasing, a little bit more scarcity on the ability or the capacities that this customer have to invest in this equipment. Not highly concerned at this stage, but this is something that we are monitoring, and we will provide updates during the quarter.

我們目前正在監控的另一個要素是高端生產業務。我想說，這項業務顯然與 GDP 演變和市場佔有率趨勢高度相關，而且也與我們高端生產客戶獲得資本的機會密切相關。我們最近看到的是，由於利率上升，該客戶投資該設備的能力變得更加稀缺。現階段並不高度關注，但這是我們正在監控的事情，我們將在本季度提供更新。

All of this, everything that I'm describing here is included in our revenue guidance. And we also expect that we will be able to deliver the profitability and free cash flow guidance that we have maintained compared to prior quarter.

所有這些，我在這裡描述的所有內容都包含在我們的收入指導中。我們也預期我們將能夠實現與上一季相比保持的獲利能力和自由現金流指引。

This does conclude the question-and-answer session of today's program. I'd like to hand the program back to Steve for any further remarks.

今天節目的問答環節到此結束。我想將程式交還給史蒂夫以供進一步評論。

Thank you for listening to our earnings conference call this morning. Balanced execution of our strategic priorities has resulted in a simplified, more profitable Xerox. And Reinvention is the next step along our journey towards sustainable improvement in profits and revenue. We look forward to sharing our progress along that journey in future quarters.

感謝您今天早上收聽我們的收益電話會議。我們均衡地執行我們的策略重點，從而使施樂變得更加簡單、盈利能力更強。重塑是我們利潤和收入可持續改善的下一步。我們期待在未來幾季分享我們在這過程中取得的進展。

Have a wonderful day.

祝你有美好的一天。

Thank you, ladies and gentlemen, for your participation in today's conference. This does conclude the program. You may now disconnect. Good day.

女士們、先生們，感謝你們參加今天的會議。這確實結束了該程式。您現在可以斷開連線。再會。