Specialist
Former SVP at Plantronics Inc
Agenda
- HP’s (NYSE: HPQ) enterprise communications equipment and peripherals and overall hybrid work equipment operating environment
- Competitive dynamics in video, voice hardware and desktop communications broadly
- Supply constraints, demand environment for Poly (NYSE: POLY) equipment, unit sales and engagement trends
- Return-to-office demand normalisation, HP-Poly business synergies from announced acquisition and potential integration timeline
Questions
1.
Could you give an overview of Poly and HP’s overall operating environments as they relate to peripherals, hybrid work solutions, gaming end markets and workflow collaboration tools in general?
2.
What key themes are impacting the current state of demand for PC communications products among enterprises or the general industry?
3.
What is your 1-3-year revenue momentum outlook for HP, Poly and other competitors post-pandemic, especially as some supply constraints continue to unwind through 2023? You mentioned more workers may transition from fully remote to hybrid or even in-office solutions.
4.
Could you outline the competitive dynamics for office communications, tools and peripherals? Who have historically been Poly’s main competitors in those lanes and how might the proposed acquisition by HP evolve dynamics in the space?
5.
Are there any smaller or disruptive players outside the traditional enterprise and consumer side competitors? Is anybody targeting specific verticals or customer bases with specific tools or kits? What threat might Poly-HP have from any smaller entrants into the industry?
6.
Do you expect the combined HP-Poly entity to continue prioritising enterprise headsets? As per Poly’s recent financial disclosures, consumer headsets have been shrinking from a net revenue perspective QoQ and YoY as a percentage of headsets overall sales. If we’re looking at what HP-Poly would prioritise, do you think there’ll be any cost optimisation within consumer headsets, in terms of R&D spend?
7.
Is your expectation for Poly to be fully integrated into HP about 1-2 years? What do you think that would look like over the initial roll-out?
8.
Which tools do you think will lead revenue growth in cross-selling, once the HP-Poly integration is complete? In what ways will Poly’s products augment HP’s peripherals and hybrid work portfolio?
9.
Do you think HP’s stated goal of improving Poly’s operating margin by roughly six points over the next three years is achievable? How do you think that margin can be pushed further over that period? There are definitely pockets of strong growth within Poly but other areas have been declining, such as voice collaboration. Are there any specific areas where HP might look to achieve that stated USD 500m revenue synergies outlined in the initial acquisition announcement?
10.
Are there any specific potentially underperforming parts of Poly’s portfolio that you think HP would target for cost-out initiatives?
11.
If HP’s management were to enact a lot of the initiatives we’ve discussed, what kind of CAGR or revenue performance growth do you think the business could experience over the next three years? What would be a conservative or optimistic estimate, based on the current demand environment and synergies we’ve discussed?
12.
How much pricing power might Poly, once integrated into HP, have to pass off increased COGS – such as freight costs to customers on renewals or replacement contracts? You mentioned the renewal replacement lifecycle for headsets.
13.
What is the overall value proposition for enterprise customers of an end-to-end, all-in-one office communication solution suite? How does that significantly increase the pricing power that the combined HP-Poly entity could have with customers?
14.
How far away do you think the combined HP-Poly entity could be from creating a sophisticated or complete end-to-end platform?
