Ncr Voyix Corporation · NYSE:VYX
Ncr Voyix — NCR — Investor Day (December 2020)
63 slides from Ncr Voyix's investor day presentation, Dec 3, 2020
Slide 1: NCR Corporation Investor Day, December 3, 2020
December 3, 2020 NCR Corporation 1
Slide 2: Notes to Investors
N O N - G A A P D I L U T E D E P S Notes to Investors FORWARD-LOOKING STATEMENTS. Comments made during this presentation and in these materials contain forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange
Slide 3: Vision & Strategy
Mike Hayford, President & CEO Vision & Strategy 3
Slide 4: Investment Thesis
Investment Thesis NCR shareholder value creation will be driven by: 4 Mix shift to software and services Recurring revenue growth Margin expansion
Slide 5: Leader Across Our Business Lines
Leader Across Our Business Lines 5 ATM Other Software & Services Digital Banking Enterprise Point of Sale Self-Checkout BANKING RETAIL HOSPITALITY Restaurant Software Payments
Slide 6: Solutions That RUN Self-Directed Banking
Solutions That RUN Self-Directed Banking ATM business – hardware surrounded by annuity stream Digital Banking is $500M business today, 24M users 6
Slide 7: Solutions That RUN The Store
Solutions That RUN The Store Enterprise POS solutions Self-checkout 7
Slide 8: Solutions That RUN The Restaurant
Solutions That RUN The Restaurant Aloha cloud-based restaurant solutions 8
Slide 9: NCR Executive Leadership Team
NCR Executive Leadership Team 9 ENTERPRISE ACCOUNTS Dan Campbell EVP, Global Sales PROFESSIONAL SERVICES Mithu Bhargava SVP, Professional Services LEAN FACTORY Adrian Button EVP, Product & Service Operations INFORMATION TECHNOLOGY Bill VanCuren SVP, Chief Information Officer SW ENGINEERING & TECHNOL
Slide 10: NCR's Commitment To ESG
NCR’s Commitment To ESG NCR strives to be an ESG leader among peer technology companies 10 ENVIRONMENTAL SOCIAL GOVERNANCE ECO-FRIENDLY PRODUCT AND FACILITY DESIGNS E-WASTE AND PRODUCT RECYCLING PROGRAMS ROBUST DIVERSITY, PRIVACY, CYBERSECURITY PROGRAMS SUPPLY CHAIN OVERSIGHT, CODE OF CONDUCT SENIOR
Slide 11: Agenda
Agenda 11 Opening remarks + logistics Michael Nelson, VP Investor Relations & Treasurer Vision & strategy Mike Hayford, President & CEO Operational execution & introduction to Business Units Owen Sullivan, EVP, Chief Operating Officer Banking Frank Hauck, President and GM Banking Shawn Phillips, GM
Slide 12: Executing Our Strategy
Owen Sullivan, EVP, Chief Operating Officer Executing Our Strategy 12
Slide 13: 2018: Siloed Model
13 2018: Siloed Model FUNCTIONAL ORG MODEL Customer left to navigate NCR = Confusion & Frustration Banking SoftwareProfessional Services Banking FinanceBanking Services Banking SalesServices Sales ? ? ? Banking Product Management Manufacturing Engineering Banking Hardware
Slide 14: Today: Industry-Aligned GM Model
14 Today: Industry-Aligned GM Model BUSINESS UNIT MODEL One accountable voice to customer Industry GM Organization BANKING RETAIL HOSPITALITY Software Engineering ServicesLean Factory Corporate Functional Support
Slide 15: Leader Across Our Business Lines: Banking
Leader Across Our Business Lines 15 BANKING RETAIL HOSPITALITY
Slide 16: NCR Banking Solutions That RUN Self-Directed Banking
NCR Banking Solutions That RUN Self- Directed Banking Frank Hauck President & General Manager 16 Customer Screen shot
Slide 17: NCR Banking Business
NCR Banking Business $3.1B 2020e Revenue Representative customers ▪ Win in Digital Banking ▪ Broaden Digital First platform ▪ Shift to cloud, SaaS & subscription ▪ Maintain #1 self-service ATM share ▪ Expand multi-vendor ATM business ▪ Grow ATM-as-a-ServiceBanking Software & Services ATM Hardware Di
Slide 18: NCR Banking ATM-as-a-Service
NCR Banking ATM-as-a-Service Shawn Phillips General Manager ATMaaS 18
Slide 19: The Market is Shifting to ATM-as-a-Service
Everything a FI needs to RUN self-directed banking from the world’s #1 ATM provider* The Market is Shifting to ATM-as-a-Service 19 Hardware ``` Software SLM and FLM ATM Monitoring Serv ice Desk Security & Compliance Incident Mgmt Management Reporting Performance Management Vendor Mgmt Cash Managemen
Slide 20: The Economics of ATM-as-a-Service
The Economics of ATM-as-a-Service 20 Performance Mgmt Service Desk Security & Compliance Incident Mgmt Hardware Vendor Mgmt Software Mgmt Reporting SLM and FLM Cash Mgmt ATM Monitoring ATM Cleaning Advisory Service ▪ NCR ATM-as-a-Service ▪ Including Hardware, Software & Service As a Service: Shift t
Slide 21: NCR Digital Banking
NCR Digital Banking Doug Brown President Digital Banking 21
Slide 22: NCR Digital Banking – Leadership
NCR Digital Banking – Leadership Market Position 22 Digital Banking $500M 20 of Top 35 North American Banks for Mobile Transactions Top 3 Mobile in Consumer Experience (MagnifyMoney 2020) 4.8 Star App Rating24 Million Digital Users 12% YoY Growth 650 Banks and Credit Unions ~2,250 Branches live with
Slide 23: NCR Digital Banking – Positioned for Growth
NCR Digital Banking – Positioned for Growth Superior customer experience Innovation through fintech integration Highest ROI platform Bank and credit union domain expertise Digital Banking 23
Slide 24: NCR Banking – Growth Levers
NCR Banking – Growth Levers 24 Banking Growth DIGITAL BANKING ▪ Reinvigorating our Digital Banking business ▪ Broadening the Digital First platform ATMs & ATM-CENTRIC ▪ Surrounding with recurring service & software ▪ Shifting to ATM-as-a-Service
Slide 25: Leader Across Our Business Lines: Retail
Leader Across Our Business Lines 25 BANKING RETAIL HOSPITALITY
Slide 26: NCR Retail Core POS Software
David Wilkinson President and GM, NCR Retail 26 NCR Retail Core POS Software Solutions That RUN The Store
Slide 27: Run your store end-to-end
Run your store end-to-end Leading with digital, our next generation retail store architecture connects every customer touchpoint into a single, amazing experience that makes shopping effortless for your customers while making business easier, faster and more profitable for you. ENTERPRISE POS SOLUTI
Slide 28: NCR Retail Customers
NCR Retail Customers 28 >1.5M checkout lanes worldwide* Department & Specialty SMB Grocery & Big Box Convenience & Fuel * Source: NCR Product Management 67% 19% 9% 5%
Slide 29: NCR Retail Platform
NCR Retail Platform 29 ▪ Simplifies the needed refresh cycle of our massive install base ▪ Customers can simply convert sites to the platform, add new capabilities, attach new services and NCR can expand wallet share ▪ Strong NCR value proposition of faster time-to-market, lower cost of ownership an
Slide 30: NCR Retail – Positioned for Growth
NCR Retail – Positioned for Growth 30 Maintain self-checkout leadership and grow with the market Win the upgrade cycle for next-gen, cloud-based bundled POS software offerings Retail Growth
Slide 31: Leader Across Our Business Lines: Hospitality
Leader Across Our Business Lines 31 BANKING RETAIL HOSPITALITY
Slide 32: NCR Hospitality Core POS Software
NCR Hospitality Core POS Software Solutions That RUN The Restaurant Dirk Izzo President & GM, NCR Hospitality 32
Slide 33: NCR Hospitality (Restaurant) Business
NCR Hospitality (Restaurant) Business $700M 2020e Revenue ▪ Over 100,000 sites worldwide ▪ #1 Restaurant POS software provider in U.S. (source: RBR 2020) ▪ Half of the top 100 worldwide restaurant brands use NCR ▪ 32 of the top 50 quick service restaurant chains use NCR ▪ More restaurant employees a
Slide 34: We Provide Everything To RUN The Restaurant
We Provide Everything To RUN The Restaurant We're delighted to work with NCR to integrate Grubhub into the NCR Aloha POS for a ready-to-deploy solution that enhances the delivery experience and boosts efficiency for restaurant operators. “ “ Restaurant management platform (Aloha) Digital, mobile, co
Slide 35: Why We Will Win In The Market
Why We Will Win In The Market Increase our share of wallet Expand our market share – incremental site growth Only 3% of our base is converted to Aloha Essentials 35 Hospitality Growth
Slide 36: Functional Execution
Functional Execution Product & Services Operations − Quality & cost efficiency Professional Services − Integration touchpoint & innovation Software Engineering − Scalable software architecture & discipline Adrian Button EVP, Product & Service Operations Tim Vanderham SVP, Chief Technology Officer Ro
Slide 37: A Global, Efficient Network Delivering For Our Customers
A Global, Efficient Network Delivering For Our Customers 37 Distribution/Fulfillment Center/Warehouse Service Operations Center Hub Manufacturing Plant 13M Devices Supported 150K Parts Shipped Weekly 22M Service Calls/Year 14K Engineers 285K Units/Year 9.4M Dispatches/Year
Slide 38: NCR Platform Architecture
NCR Platform Architecture NCR Platform BSP/CSP Mobile Ordering and Order Management Buy Online/ Pick-Up In-Store/ Restaurant/Branch 3rd Party Order Aggregators and Loyalty Providers Data Analytics and Business Ops Payment Processing 38
Slide 39: Professional Software Services Delivering for Our Customers
Professional Software Services Delivering for Our Customers 39 7,100+ Projects Per Year 100+ Packaged PS Offers 55+ Countries 4,100+ Software Consultants Run The Store ▪ Services led migration to Next- Generation Retail Software Architecture ▪ Connected experiences across physical to digital channel
Slide 40: Financial Outlook: A Path to 80|60|20 Success
Tim Oliver, EVP, Chief Financial Officer Financial Outlook: A Path to 80|60|20 Success 40
Slide 41: Update on More Tactical Topics
Update on More Tactical Topics 41 No further 2020 updates or 2021 guidance today Q4 2020 ▪ Results to date are consistent with Oct. 27th commentary ▪ Revenue, EBITDA and cash flow expected to be similar to results in 2020 Q3 ▪ Productivity initiatives and asset reviews are ongoing ▪ Cost reduction a
Slide 42: NCR 2020-2024 Financial Objectives
$400-500M 2018A 2019A 2020E 2024E 2018A 2019A 2020E 2024E 2018A 2019A 2020E 2024E NCR 2020-2024 Financial Objectives 42 ~ $6.2B ~ $7.4B REVENUE $600-700M FREE CASH FLOW ~ 14% ~ 20% 2018 2019 2020 2024 Software & Services Revenue 68% 65% 72% ~80% Recurring Revenue 46% 46% 54% >60% Adj. EBITDA Margin
Slide 43: Defining 80|60|20
Defining 80|60|20 43 …of NCR’s revenue will come from software and services. …of NCR’s revenue will come from recurring revenue. Defined as contracts where there is a predictable revenue pattern that will occur at regular intervals. This includes hardware and software maintenance, cloud, payment pro
Slide 44: NCR Banking Financial Objectives
2018A 2019A 2020E 2024E2018A 2019A 2020E 2024E NCR Banking Financial Objectives 44 ~23% ~ 1 8 % 2018 2019 2020 2024 Software & Services Revenue 69% 64% 71% >80% Recurring Revenue 49% 46% 55% >60% Adj. EBITDA Margin 17% 19% 18% >20% REVENUE STRATEGIC EXECUTION ADJ. EBITDA MARGIN % Corporate overheadC
Slide 45: NCR Banking Business Revenue Composition
NCR Banking Business Revenue Composition 45 Products % Attach Online/Mobile Banking – DI/D3 0%Software – Remote Transactions Professional Services – Digital Banking Consulting Software – Enterprise Monitoring, Cx Marketing, Security, Transaction Processing, Cash Management 15-100% In Ascending Order
Slide 46: Banking: Other Software & Services and Digital Banking Financial Objectives
2018A 2019A 2020E 2024E 2018A 2019A 2020E 2024E 46 ~$2.6B ~16% Company avg. Adj. EBITDA REVENUE ADJ. EBITDA MARGIN % 2018A 2019A 2020E 2024E ~$0.5B 2018A 2019A 2020E 2024E ~28% REVENUE ADJ. EBITDA MARGIN % Company avg. Adj. EBITDA Banking: Other Software & Services Financial Objectives Banking: Digi
Slide 47: NCR Retail Financial Objectives
2018A 2019A 2020E 2024E2018A 2019A 2020E 2024E NCR Retail Financial Objectives 47 2018 2019 2020 2024 Software & Services Revenue 63% 63% 67% <80% Recurring Revenue 37% 41% 47% ~60% Adj. EBITDA Margin 12% 12% 12% <20% ~$2.1B ~18% ~ 1 2 % REVENUE STRATEGIC EXECUTION ADJ. EBITDA MARGIN % Corporate ove
Slide 48: NCR Hospitality Financial Objectives
2018A 2019A 2020E 2024E2018A 2019A 2020E 2024E NCR Hospitality Financial Objectives 2018 2019 2020 2024 Software & Services Revenue 70% 67% 75% >80% Recurring Revenue 48% 51% 61% >60% Adj. EBITDA Margin 18% 13% 10% ~20% ~$700M ~ 16% ~ 1 0 % REVENUE STRATEGIC EXECUTION ADJ. EBITDA MARGIN % Corporate
Slide 49: NCR Payments Business Financial Objectives
NCR Payments Business Financial Objectives 49 2024 Revenue: ~ 20-30% CAGR2020 Revenue: ~ $100M NCR POS Addressable Market: $1.5B - $2B Hospitality Non-NCR Retail
Slide 50: Revenue Growth Bridge
Revenue Growth Bridge 50 BY CAUSE BY PRODUCTBY SEGMENT ~$7.4B ~$6.2B 2024E Hospitality Retail Banking 2020E ~$7.4B ~$6.2B 2024E Services Software Hardware 2020E ~$7.4B ~$6.2B 2024E Acq Volume Organic Volume Price 2020E i
Slide 51: Impact on Revenue of Shift to Recurring Revenue Business Model
Impact on Revenue of Shift to Recurring Revenue Business Model 51 Net Impact is expected to become accretive in late 2022 $- $100 $200 $300 $400 $500 $600 2018A 2019A 2020E 2021E 2022E 2023E 2024E Net Impact Revenue recognized upfront under prior business model Cumulative effect on revenue of shift
Slide 52: Adj. EBITDA Margin Growth Bridge
Adj. EBITDA Margin Growth Bridge 52 BY CAUSE BY PRODUCTBY SEGMENT ~20% ~14% 2024E Banking Retail Hospitality 2020E ~20% ~14% 2024E Productivity Shift to Recurring Product Mix Shift 2020E ~20% ~14% 2024E Hardware Software Services 2020E
Slide 53: 2024 Free Cash Flow Generation
2024 Free Cash Flow Generation 53 * Free Cash Flow excludes discontinued operations and pension contributions $600- 700M * F re e C a s h F lo w $1.0- 1.1B O p e ra ti n g In c o m e
Slide 54: Cash Generation and Redeployment
Cash Generation and Redeployment 54 Approximately $2 Billion in cumulative free cash flow Redeployment PrioritiesCash Generation Opportunities ▪ Higher profitability ▪ Cap Ex Efficiency ▪ Cash cycle improvements ▪ Services inventory ▪ Invoice accuracy ▪ Vendor management ▪ Business Linearity Uses: 4
Slide 55: Debt & Preferred Stock Maturities Status
$450 $500 $650 $500 $750 $400 $275 $1,100 $300 2020 2021 2022 2023 2024* 2025+ 5.250% Notes due 2030 6.125% Notes due 2029 5.000% Notes due 2028 5.750% Notes due 2027 Term Loan B 8.125% Notes due 2025 Preferred Shares Revolver AR Securitization Pension Contributions Debt & Preferred Stock Maturities
Slide 56: NCR 2020-2024 Financial Objectives
$400-500M 2018A 2019A 2020E 2024E 2018A 2019A 2020E 2024E 2018A 2019A 2020E 2024E NCR 2020-2024 Financial Objectives 56 ~ $6.2B ~ $7.4B REVENUE $600-700M FREE CASH FLOW ~ 14% ~ 20% 2018 2019 2020 2024 Software & Services Revenue 68% 65% 72% ~80% Recurring Revenue 46% 46% 54% >60% Adj. EBITDA Margin
Slide 57: Call In With Your Questions
888-820-9413 Confirmation Code:1666001 Call In With Your Questions … 57
Slide 58: NCR Executive Chairman and Chairman of the Board
NCR Executive Chairman and Chairman of the Board Frank Martire 58
Slide 59: Investment Thesis
Investment Thesis NCR shareholder value creation will be driven by: 59 Mix shift to software and services Recurring revenue growth Margin expansion
Slide 60: Q&A
Q&A 60 Dial-In: 888-820-9413 Confirmation Code:1666001
Slide 61: Supplemental Materials
Supplemental Materials NCR Confidential - Internal Use Only 61
Slide 62: Adjusted EBITDA Margin definition
NCR believes the Adjusted EBITDA Margin percentage provides useful information to investors because it is an indicator of strength and performance of the Company’s ongoing business operations, including its ability to fund discretionary spending such as capital expenditures, strategic acquisitions a
Slide 63: GAAP to Non-GAAP Reconciliation: Free Cash Flow
GAAP TO NON-GAAP RECONCILIATION F R E E C A S H F L O W 63 2020E 2024E Cash provided by Operating Activities $675-775M $800-900M Total capital expenditures ($250-300M) (~$300M) Pension contributions $20-25M ~$100M Free Cash Flow $400-500M $600-700M