Xerox`s Mulcahy emphasises innovation

Johannesburg, 10 Feb 2005

Anne Mulcahy, CEO of Xerox, today addressed the graphic communications and printing community in SA at a Xerox event, Marketing Innovations 05, in Sandton.

Announcing the launch of Xerox iGen3 Digital Production Press in Africa and the product`s first two customers on the continent - Ince and Burlington Dataprint - Mulcahy outlined Xerox`s vision for a "new business of printing".

[VIDEO]"The challenge most businesses face is how to get ahead in today`s economy...in what are pretty difficult and challenging times," she said. "Innovation always gives you the edge, moves you ahead."

Mulcahy said when she took over as CEO at Xerox, "we had to reengineer every part of our business. But one thing that didn`t change was our investment in R&D - it is 5% of our revenue or just under $1 billion. That investment drives the future of the company."

Xerox is helping its customers develop a "new business of printing", said Mulcahy, "with completely new business models in graphics communications and printing".

<B>A noteworthy turnaround</B>

Anne Mulcahy took over as CEO at Xerox in August 2001, inheriting a group that had incurred a net loss of $257 million and a net operating cash flow of -$663 million the previous financial year.

For the year to December 2001, Xerox reported a $94 million loss on revenue of $17.01 billion.

Mulcahy took the role of chairman on 1 January 2002, steering the group to a turnaround resulting in full-year net income of $91 million on revenue of $15.85 billion.

The turnaround has been sustained, with Xerox recently reporting net income of $859 million or $0.86 per share for the 2004 financial year, on revenue of $15.7 billion. The group achieved an operating cash flow of $1.8 billion and had a year-end cash balance of $3.2 billion.

Mulcahy pointed to the three lynchpins in this new business model: on-demand, value-added services and workflow solutions. "Printing is moving away from the old manufacturing model to a services model, from a people-based to a Web-based model."

Mulcahy said Xerox`s view of IT is made up of the big "I" and the small "T".

"Over the last half century, businesses and governments have poured billions of dollars into technology, and I think it would be fair to say that return on investment has not always lived up to expectations. [...] That`s because in the old world of IT the focus was always on technology. We are working very hard to focus on information, to demonstrate to our customers that information is a lot more important than technology."

In July 2001, Mulcahy, then 46, took over the reins of the company beleaguered by financial problems and a SEC accounting investigation. She had worked at Xerox for 24 years, mostly in sales. She has brought the business to profitability and last year ranked fourth on Fortune magazine`s list of most powerful women in business.

Xerox is represented in over 20 African countries by Bytes Document Solutions.