Slide 1: Alliance Data Q2 2016 Results
Alliance Data NYSE: ADS Q2, 2016 ResultsJuly 21, 2016
Slide 2: Agenda
Agenda Speakers: Ed Heffernan President and CEO Charles Horn EVP and CFO Melisa Miller President of Alliance Data Card Services Second Quarter Consolidated ResultsSegment ResultsSecond Quarter and Full Year Scorecard2016 Guidance 1
Slide 3: Second Quarter 2016 Consolidated Results
Second Quarter 2016 Consolidated Results(MM, except per share) Quarter Ended June 30, 2016 2015 % Change Revenue $ 1,749 $ 1,501 +17% Net income $ 141 $ 130 +8% EPS 1 $ 1.24 $ 2.11 -41% Core EPS $ 3.68 $ 3.32 +11% Adjusted EBITDA $ 472 $ 432 +9% Adjusted EBITDA, net $ 422 $ 393 +7% Diluted shares 59
Slide 4: LoyaltyOne
LoyaltyOne® (MM) AIR MILES® revenue increased 6 percent on a constant currency basis, driven by instant rewards redemptions. BrandLoyalty had a stellar quarter with revenue up 44 percent on a constant currency basis.AIR MILES reward miles issued decreased 3 percent, due to fewer promotions and an on
Slide 5: Epsilon
Epsilon® (MM) Revenue growth for digital & technology platforms accelerated during the quarter, but agency media & services continues to struggle.Several initiatives were undertaken during quarter to improve future performance.Adjusted EBITDA growth still negative but improving.A combination of acce
Slide 6: Card Services
Card Services (MM) Quarter Ended June 30, 2016 2015 % Change Revenue $ 886 $ 710 +25% Operating expenses 332 268 +24% Provision for loan losses 228 155 +47% Funding costs 50 36 +39% Adjusted EBITDA, net $ 276 $ 251 +10% Adjusted EBITDA, net % 31% 35% -4% 5 Revenue increased 25 percent to $886 millio
Slide 7: Card Services key metrics
Card Services (MM) Growth of 5 percent in core cardholder spending driven by an 180 basis point tender share gain. Operating expenses improved 40 bps expressed as a percentage of average card receivables.Principal loss rates consistent with our guidance provided in the first quarter. Quarter Ended J
Slide 8: Second Quarter Scorecard
Consolidated$1.75 billion in revenue, +17 percent; $3.68 core EPS, +11 percentNicely ahead of guidance of 8 percent growth for both revenue and core EPS Raising annual guidanceBuyback: ~$540 million year-to-date (~2.6 million shares) out of $1.0 billon authorizationCard ServicesPortfolio +24 percent
Slide 9: Second Quarter Scorecard (cont.)
Second Quarter Scorecard (cont.) EpsilonRevenue growth of 5 percent, up from minus 2 percent in the first quarterCost structure still needs some work but getting thereAdjusted EBITDA down 9 percent in the second quarter vs down 22 percent in the first quarterIndia office ramping quickly; need to eli
Slide 10: Full Year Guidance
9 ConsolidatedRaising FY guidance: revenue of $7.15 billion, up 11 percent; core EPS of $16.85, up 12 percentNew guidance reflects flow-through of second quarter beat to guidanceWill flow-through additional over-performance, if any, as it occursCard Services Double-digit growth in revenue and adjust
Slide 11: Full Year (cont.)
Full Year (cont.) LoyaltyOneMid single-digit growth in revenue for AIR MILES on a constant currency basisAIR MILES issued expected to increase 4 percentStrong double-digit revenue growth for BrandLoyalty on a constant currency basisOverall 2007-2015: CAGR of +15 percent and +18 percent for revenue &
Slide 12: Forward-Looking Statements
Forward-Looking StatementsThis presentation contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. Forward-looking statements give our expectations or forecasts of future events and can generally be
Slide 13: Financial Measures
Financial MeasuresIn addition to the results presented in accordance with generally accepted accounting principles, or GAAP, the Company may present financial measures that are non-GAAP measures, such as constant currency financial measures, adjusted EBITDA, adjusted EBITDA margin, adjusted EBITDA,
Slide 14: Q & A
Q & A