STARTEEPO Comments on Xerox’s Disappointing Third Quarter Results

STARTEEPO Comments on Xerox’s Disappointing Third Quarter Results

Company’s Third Largest Shareholder Welcomes Actions Taken to Prioritize Debt Reduction and Increase Transparency for XFS Business Unit

Calls on Xerox Board to Explore Strategic Alternatives for XFS and Company

STARTEEPO SICAV a.s. (“STARTEEPO”), which beneficially owns 7.34% of Xerox Holdings Corporation (“Xerox” or the “Company”) (NASDAQ: XRX) in stocks and options, today commented on the Company’s third quarter results announcement.

František Bostl, STARTEEPO Founder and Chairman of the Board, said:

“Since announcing our substantial investment in Xerox earlier this year, we have privately and publicly encouraged the Xerox Board of Directors to take bold action to address the persistent gap between Xerox’s share price and the opportunity we see to unlock significant shareholder value. In light of the disappointing quarterly results and reduced guidance announced yesterday, we intend to significantly intensify our existing dialogue with management and the Board.

It is clear from the third quarter results that, in 2027, Xerox must execute more effectively and make greater progress on cash flow recovery and deleveraging. In that regard, we welcome the Company’s prioritization of debt reduction and balance sheet improvement and recognize management’s ongoing efforts to refinance and manage liabilities. We support the suspension of the common and preferred dividends as a responsible decision to preserve cash.

We were also pleased to see Xerox respond to our request for increased transparency around the financial performance of Xerox Financial Services (XFS) by providing detailed information about the business unit in the Company’s third quarter presentation. We regard XFS, which finances customer equipment purchases, as the hidden gem in Xerox’s portfolio, and believe that through this improved transparency, investors will be able to better understand the value of the business unit.

However, we believe it is imperative at this juncture that the Company’s Board and management team take more aggressive steps to increase shareholder value, including exploring strategic alternatives for XFS and potentially Xerox as a whole. These strategic review processes could be conducted in parallel with the ongoing efforts to improve the business and pay down debt. We offer our transaction advisory expertise, capital markets experience, and European relationships in support of these efforts.

In addition, we believe there is a near-term opportunity for Xerox to restructure its outstanding warrants to facilitate a meaningful debt-for-equity exchange before year-end and use the proceeds to help deleverage the Company. Through its own participation in warrant exercises, STARTEEPO has already helped Xerox retire several million dollars of outstanding debt principal, demonstrating the potential of this mechanism. This approach could accelerate debt reduction without using the Company’s cash, and we believe the benefits of lower leverage would outweigh the dilution associated with issuing additional shares.

As we have said previously, we believe that successful deleveraging of Xerox’s balance sheet will likely lead to a re-rating of the stock and better position Xerox to participate in industry consolidation and command a premium valuation. We have previously stated our belief that Xerox could be worth roughly $3.3 billion, or $18 per share, based on precedent transactions, should it decide to pursue additional strategic alternatives in the future. While we believe this remains achievable, realizing this potential will require bold and decisive action from Xerox’s management and Board. Without a more aggressive approach to deleveraging, operational improvements, and strategic alternatives, we believe this value could progressively erode over time, making timely action increasingly critical.

We remain convinced of Xerox’s long-term value and will continue to evaluate our investment exposure and how we can best assist the Company in creating shareholder value.”

Shareholders interested in learning more about STARTEEPO’s perspectives on Xerox can visit: www.starteepo.com/xerox.

About STARTEEPO SICAV

STARTEEPO SICAV a.s. is an alternative investment fund based in Prague, Czech Republic, focused on identifying high-conviction opportunities in public equity markets. The firm applies a fundamental, long-term investment approach, with a focus on disciplined analysis and constructive engagement.

Disclaimer

This communication expresses solely the opinion of STARTEEPO SICAV a.s. (“STARTEEPO”) and its affiliates and not any other party. This communication is for informational purposes only and does not constitute investment advice, a recommendation, or offer to buy or sell any securities. STARTEEPO’s opinions stated herein are based on publicly available information and its own analyses. STARTEEPO may, at any time and without notice, buy, sell, reduce, increase, or otherwise change its investment position, including for reasons that may be inconsistent with the views expressed in this communication. Investing in securities involves significant risks, including the potential loss of the principal amount invested. Past performance is not a reliable indicator of future results. Every investor should conduct their own independent research and due diligence or consult with a licensed financial, legal, or tax advisor before making any investment decision.

Investor Contact
František Bostl
bostl@starteepo.com
420 604 215 002
www.starteepo.com/en

Media Contact
Scott Deveau / Jeremy Jacobs
August Strategic Communications
STARTEEPO@augustco.com

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