Total System Services Inc

Total System Services — Q1 2016 Earnings Presentation

29 slides from Total System Services's earnings presentation, Apr 26, 2016

  1. Slide 1: 2016 First Quarter

    2016 FIRST QUARTER April 26, 2016 ©2016 Total System Services, Inc.® Proprietary. All rights reserved worldwide.

  2. Slide 2: Forward-Looking Statements

    2016 First Quarter FORWARD-LOOKING STATEMENTS This presentation and comments made by management contain forward-looking statements including, among others, statements regarding the expected future operating results of TSYS. These statements are based on management’s current expectations and assumpti

  3. Slide 3: Use of Non-GAAP Financial Measures

    2016 First Quarter USE OF NON-GAAP FINANCIAL MEASURES This slide presentation contains certain non-GAAP financial measures determined by methods other than in accordance with generally accepted accounting principles. Such non-GAAP financial measures include the following: net revenue; operating marg

  4. Slide 4: M. Troy Woods

    M. Troy Woods Chairman, President and Chief Executive Officer ©2016 Total System Services, Inc.® Proprietary. All rights reserved worldwide. 4

  5. Slide 5: Paul Todd

    Paul Todd Chief Financial Officer ©2016 Total System Services, Inc.® Proprietary. All rights reserved worldwide. 5

  6. Slide 6: Consolidated Selected Financial Highlights

    2016 First Quarter CONSOLIDATED SELECTED FINANCIAL HIGHLIGHTS (in thousands, except per share data) YTD YTD Percent 2016 2015 Change Total Revenues $739,378 $662,156 11.7% Net Revenue* 671,644 595,784 12.7 Adjusted EBITDA* 230,829 193,454 19.3 Adjusted EPS* from Continuing Operations $0.66 $0.54 22.

  7. Slide 7: Consolidated Highlights

    2016 First Quarter CONSOLIDATED HIGHLIGHTS Revenue by Segment* ➔ Announced TransFirst acquisition ➔ Continued strong volume growth NetSpend North America across all segments 27% 44% ➔ Increased adjusted operating margin by 178 basis points Merchant International 18% 11% Consolidated Net Revenue Adju

  8. Slide 8: North America Segment Highlights

    2016 First Quarter NORTH AMERICA SEGMENT HIGHLIGHTS Traditional Accounts on File YOY Growth % ➔ Renewed focus on cross sell and (in millions) proactive delivery of innovative 423.3 415.1 solutions 405.4 404.6 396.3 ➔ Record number Traditional AOF along with double-digit transaction growth 49.4% 46.3

  9. Slide 9: International Segment Highlights

    2016 First Quarter INTERNATIONAL SEGMENT HIGHLIGHTS Traditional Accounts on File YOY Growth % ➔ Continued focus on growth and (in millions) margin expansion ➔ Record number Traditional AOF along with transaction growth at 8.1% 63.1 63.3 65.1 65.5 61.5 ➔ Net revenue up 9.2% constant currency 7.6% 8.4

  10. Slide 10: Merchant Segment Highlight

    2016 First Quarter MERCHANT SEGMENT HIGHLIGHT Segment Revenue by LOB ($ in millions) YOY Growth % ➔ Strong performance leading up to the TransFirst acquisition $43 $46 $50 $48 $47 ➔ SMB sales volume up 11.9% YOY (4%) (0%) (1%) 10% 7% ➔ Net revenue up 9.3% $67 $71 $74 $74 $74 13% 16% 14% 15% 11% 1Q15

  11. Slide 11: NetSpend Segment Highlights

    2016 First Quarter NETSPEND SEGMENT HIGHLIGHTS Gross Dollar Volume ($ in billions) YOY Growth % ➔ Launched small business pilot; signed $9.2 3 year renewal with Family Dollar $7.7 ➔ Gross Dollar Volume (GDV) up 19.6%; exceeded 100,000 distributing $5.5 $5.4 $5.7 locations and employers 16.7% 19.5% 2

  12. Slide 12: Segment Operating Margin and Consolidated Adjusted Operating Margin

    2016 First Quarter SEGMENT OPERATING MARGIN AND CONSOLIDATED ADJUSTED OPERATING MARGIN Three Months Ended March 31, 2016 Adjusted Segment Adjusted Operating (in thousands) Operating Income Net Revenue Margin North America $124,788 $303,641 41.10% International 10,289 75,354 13.65% Merchant 38,357 12

  13. Slide 13: Rollforward of Quarterly Cash Balance

    2016 First Quarter ROLLFORWARD OF QUARTERLY CASH BALANCE (in millions) $600 Operating Activities Cap Ex $146 ($44) Debt Pmts ($10) Dividends Other Ending $500 ($18) ($18) Balance Beginning $445 (1) Balance $389 $400 $300 $200 $100 (1) Excludes proceeds from borrowings of $1.487 billion received in M

  14. Slide 14: Cash Flow Strength: 2016 TTM Consolidated Financial Highlights

    2016 First Quarter CASH FLOW STRENGTH: 2016 TTM Consolidated Financial Highlights (in millions) $975 $900 $871 $825 $750 $675 $612 $600 $525 $445 (1) $450 $408 $382 $375 $300 $225 $150 $75 $0 Adjusted Cash flow from Free cash flow Net income Ending cash EBITDA operations (TTM = Trailing Twelve Month

  15. Slide 15: 2016 Revised Guidance

    2016 First Quarter 2016 REVISED GUIDANCE* (in millions, except per share data) Range Range Percent Change Total Revenues $4,182 to $4,264 50% to 53% Net Revenue $3,040 to $3,102 22% to 24% Adjusted EPS attributable to TSYS common shareholders from continuing operations $2.78 to $2.85 13% to 16% Aver

  16. Slide 16: Q&A

    Q&A ©2016 Total System Services, Inc.® Proprietary. All rights reserved worldwide. 16

  17. Slide 17: Thank You

    THANK YOU ©2016 Total System Services, Inc.® Proprietary. All rights reserved worldwide.

  18. Slide 18: Appendix

    APPENDIX ©2016 Total System Services, Inc.® Proprietary. All rights reserved worldwide. 18

  19. Slide 19: Non-GAAP Items – Net Revenue, Adjusted EBITDA and Adjusted EPS

    2016 First Quarter APPENDIX: Non-GAAP Items – Net Revenue, Adjusted EBITDA and Adjusted EPS ➔ Net revenue is defined as total revenues less reimbursable items (such as postage), as well as, merchant acquiring interchange and assessment fees charged by the card associations or payment networks that a

  20. Slide 20: Accounts on File Portfolio Summary

    2016 First Quarter APPENDIX: Accounts on File Portfolio Summary (in millions) March March % March December % 2016 2015 Change 2016 2015 Change Consumer 414.8 392.8 5.6 414.8 408.2 1.6 Commercial 46.3 42.3 9.3 46.3 45.4 1.9 Other 27.7 22.7 22.5 27.7 26.6 4.5 Traditional AOF 488.8 457.8 6.8 488.8 480.

  21. Slide 21: Non-GAAP Reconciliation – Net Revenue

    2016 First Quarter APPENDIX: Non-GAAP Reconciliation – Net Revenue (in thousands) Three Months Ended 3/31/16 3/31/15 Total revenues $739,378 $662,156 Reimbursable items 67,734 66,372 Interchange and assessments expense* - - Net revenue $671,644 $595,784 * Relates to acquisition of TransFirst, which

  22. Slide 22: Non-GAAP Reconciliation – Adjusted Segment Operating Income and Operating Margin

    2016 First Quarter APPENDIX: Non-GAAP Reconciliation – Adjusted Segment Operating Income and Operating Margin Three Months Ended (in thousands) 3/31/16 3/31/15 Adjusted segment operating income By segment: North America services (a) $124,788 $102,570 International services (b) 10,289 6,983 Merchant

  23. Slide 23: Non-GAAP Reconciliation – Constant Currency Net Revenue

    2016 First Quarter APPENDIX: Non-GAAP Reconciliation – Constant Currency Net Revenue Three Months Ended Percentage (in thousands) 3/31/16 3/31/15 Change Consolidated: Constant currency (1) $676,845 $595,784 13.6% Foreign currency (2) (5,201) -- Net revenue $671,644 $595,784 12.7% International servi

  24. Slide 24: Non-GAAP Reconciliation – Constant Currency Total Revenue

    2016 First Quarter APPENDIX: Non-GAAP Reconciliation – Constant Currency Total Revenue (in thousands) Three Months Ended Percentage 3/31/16 3/31/15 Change Consolidated: Constant currency (1) $744,974 $662,156 12.5% Foreign currency (2) (5,596) --- Total revenues $739,378 $662,156 11.7% International

  25. Slide 25: Non-GAAP Reconciliation – EBITDA and Adjusted EBITDA

    2016 First Quarter APPENDIX: Non-GAAP Reconciliation – EBITDA and Adjusted EBITDA Three Months Ended (in thousands) 3/31/16 3/31/15 Net income : As reported (GAAP) $92,408 $78,899 Adjusted for: Deduct: Equity in income of equity investments (6,590) (5,394) Add: Income taxes 43,429 39,782 Add: Nonope

  26. Slide 26: Non-GAAP Reconciliation – Adjusted EPS

    2016 First Quarter APPENDIX: Non-GAAP Reconciliation – Adjusted EPS Three Months Ended (in thousands) Mar Mar 2016 2015 Income from continuing operations available to TSYS common shareholders: As reported (GAAP) (a) $90,628 $77,755 Adjusted for amounts attributable to TSYS common shareholders (net o

  27. Slide 27: Non-GAAP Reconciliation – Free Cash Flow

    2016 First Quarter APPENDIX: Non-GAAP Reconciliation – Free Cash Flow Trailing Twelve (in thousands) Months Ended 3/31/2016 Cash flows from operating activities $611,741 Less: Purchases of property and equipment (54,607) Additions to licensed computer software from vendors (44,041) Additions to inte

  28. Slide 28: Non-GAAP Reconciliation – EBITDA and Adjusted EBITDA

    2016 First Quarter APPENDIX: Non-GAAP Reconciliation – EBITDA and Adjusted EBITDA Trailing Twelve (in thousands) Months Ended 3/31/2016 Net Income $382,550 Adjusted for: Deduct: Discontinued operations (1,410) Deduct: Equity in Income of Equity Investments (23,303) Add: Income Taxes 155,012 Add: Non

  29. Slide 29: 2016 Revised Guidance Assumptions

    2016 First Quarter APPENDIX: 2016 Revised Guidance Assumptions The guidance assumes: • There will be no significant movements in the London Interbank Offered rate and TSYS will not make any significant draws on the remaining balance of its credit facility; • There will be no significant movement in

Total System Services — Q1 2016 Earnings Presentation on 6ix