Xerox Targets Margin Expansion

Xerox shares were slightly higher in recent pre-market trade after the company said it is targeting an expansion in its operating margins to between 12.5% 1o 14.5% in the near term by delivering at least $1.5 billion cumulative gross productivity and cost savings by 2018 from a strategic transformation program.

The company, which is splitting into two separately publicly traded entities by year-end, said “new Xerox” aims to increase the contribution from strategic growth areas to 50% of total company revenue by 2020 and to outperform the market over the long term.

“Xerox will invest in areas of strength and growth such as document outsourcing and color production, and will execute strategies to increase its participation in underpenetrated markets, including small- and medium-sized businesses,” the company said. “As a result, the company will shift its revenue mix toward growing markets to increasingly offset declines in mature areas.”

The firm also plans “the largest new product launch in its history,” with a “connected office portfolio” that includes secure, smart multifunction devices with high performance apps, on-the-go print capabilities and cloud-connectivity.

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