Business News

Xerox Chairman to Shareholders: Growth Strategy, Financial Strength Build Value for Customers, Investors

Monday 26. May 2008 - At its annual shareholder meeting held here today, Anne Mulcahy, chairman and CEO of Xerox Corporation (NYSE: XRX), and Xerox president Ursula Burns highlighted the strategic steps Xerox is taking to capitalize on its $125 billion market opportunity

In her address to shareholders this morning, Mulcahy said, “Xerox has evolved into a services-led technology company that is known for innovation and customer focus. We help manage the massive flow of information and communication in businesses today. We’re a content management provider and a trusted partner who can help our customers make the most of their IT infrastructure and bridge the paper and digital worlds.”

Mulcahy also detailed steps Xerox has taken to build shareholder value, including:

Upgrade to investment grade by all the credit rating agencies.
Generation of $1.9 billion in operating cash flow last year.
Reinstatement of a dividend.
Investment of $1.6 billion in strategic acquisitions that broaden Xerox’s distribution and expand its document-related services and software portfolio.
Repurchase of $631 million in Xerox stock last year and another $334 million in the first quarter of this year, bringing the total repurchased since 2005 to $2.5 billion through the first quarter of 2008.
With the industry’s broadest portfolio of document technology and services and the launch of over 100 products in the last three years, Xerox’s investments in innovation are paying off with more demand for Xerox products and services, noted Burns. “Our consistent and focused growth strategy gives us the benefit of a healthy annuity stream. And, our acquisitions bring us added technology and talent that further strengthen our core competency in document management,” she said.

Mulcahy and Burns also updated shareholders on the progress Xerox is making on its growth strategy centered on color printing leadership, document management services, digital production printing and the small and mid-sized business (SMB) market. Some examples of Xerox’s success in these areas include:

Xerox color presses produce the highest volume of pages in the industry and last year more than 40 billion color pages were printed on Xerox technology. Half of all of the digital color production pages in the industry are printed on Xerox presses.
The company significantly ramped up its distribution to small and mid-size businesses through the acquisition of Global Imaging Systems in May 2007. And, last month, Xerox announced plans to acquire Veenman, an office technology dealer in the Netherlands. In the last 18 months Xerox has launched 17 products that are tailored for the needs of the SMB workplace.
Xerox Global Services grew signings by 18 percent in 2007 and generated $3.4 billion in annuity revenue. Expanding its offerings in industries that are known for generating high volumes of digital and paper documents, Xerox last year acquired Advectis, which provides one of the mortgage industry’s most widely used solutions for electronic document collaboration.
Xerox continued to lead the digital production publishing industry with technology, services and software that help commercial printers profit from producing short runs of books, personalized brochures, customized direct mail and more. The company has installed more than 2,000 units of its flagship iGen3 Digital Production Press and 275 customers have purchased more than one iGen system.
Xerox’s business operations are based on a set of values declared by its founder more than 50 years ago. “Long before green was in vogue, Xerox embedded environmental sustainability practices and principles into all aspects of our business and throughout our supply chain,” said Burns.

Last year, Xerox strengthened its environmental leadership with innovations such as High Yield Business Paper, which is produced with half as many trees as needed to make conventional paper. This type of breakthrough innovation along with Xerox’s reduction of greenhouse gas emissions that amounts to taking 18,000 cars off the road are among the reasons that the Environmental Protection Agency just named Xerox the first technology company to become a Performance Track Corporate Leader. The honor acknowledges Xerox’s sustained compliance record and excellent facilities management in all five of its U.S. manufacturing facilities, and a superior level of commitment to reducing its environmental footprint. Xerox was also awarded the EPA’s Climate Protection Award for significantly reducing energy use and greenhouse gas emissions.

Also at the annual meeting, shareholders elected by significant majority vote 10 members of the Xerox board of directors. Re-elected to the board are Glenn A. Britt, Ursula M. Burns, Richard J. Harrington, William Curt Hunter, Vernon E. Jordan, Jr., Robert A. McDonald, Anne M. Mulcahy, N.J. Nicholas, Jr., Ann N. Reese, and Mary Agnes Wilderotter.

Shareholders also approved the selection of PricewaterhouseCoopers LLP as the company’s independent auditors for 2008. In addition, shareholders voted to amend the company’s certificate of incorporation to require majority voting in non-contested director elections, and against a shareholder proposal related to the reporting of vendor compliance with Xerox’s code of conduct.