Aci Worldwide, Inc. · NASDAQ:ACIW
Aci Worldwide — BofAML Leveraged Finance Conference 2015
30 slides from Aci Worldwide's conference presentation, Dec 2, 2015
Slide 1: ACI Worldwide (ACIW) BofAML Leveraged Finance Conference
UP ACI Worldwide (ACIW) BofAML Leveraged Finance Conference December 2, 2015
Slide 2: Safe Harbor For Forward-Looking Statements
Private Securities Litigation Reform Act of 1995 Safe Harbor For Forward-Looking Statements This presentation contains forward-looking statements based on current expectations that involve a number of risks and uncertainties. The forward-looking statements are made pursuant to safe harbor provisions
Slide 3: About ACI Worldwide
About ACI Worldwide Founded in 1975, ACI is a leading provider of software products and SaaS-based solutions focused on facilitating real-time electronic and ecommerce payments for financial institutions, retailers, processors and billers worldwide High quality products and services drive strong ren
Slide 4: ACI is a Leader in Payments Solutions
ACI is a Leader in Payments Solutions Solutions Incorporate a Suite of Applications Subscription License or SaaS/Cloud Delivery (offerings by % of revenue below) Online Banking 22% Consumer and Business Internet Banking, Mobile, Trade Finance and Branch Automation sold to large banks globally and co
Slide 5: Global Distribution and Customer Base
Global Distribution and Customer Base 5,600+ customers in over 80 countries depend on ACI solutions 18 of the top 20 and 67 of the top 100 global banks use ACI for payment solutions Customers: 3600+ US billers, ~180 processors globally and 300+ global retailers AMERICAS 1,950+ customers EMEA 500+ cu
Slide 6: Diverse Customer Base of Top Global Banks, Processors, Billers and Retailers
Diverse Customer Base of Top Global Banks, Processors, Billers and Retailers Provide Significant Cross Sell Opportunities WELLS FARGO Bank of America Merrill Lynch PNC Santander FIFTH THIRD BANK REGIONS HSBC TD Bank usbank SUNTRUST FY 2014 Revenue by Customer Customer # 1 2.3% Customer # 2 2.3% Cust
Slide 7: Delivering an Omni-channel Customer Experience
Delivering an Omni-channel Customer Experience UP for one of the world’s largest banks CHALLENGE Aspirations to be the primary bank of its customers held back by inconsistent experience caused by legacy technology Improve cross sell and retention rates BENEFITS Significant operating cost improvement
Slide 8: Complex Payments Environment Leads to Inconsistent Customer Experience
Complex Payments Environment Leads to Inconsistent Customer Experience Before UP CORE BANKING Core interface Payment engine Payment engine Online banking Payment engine Branch system Payment engine Payment engine Call center Fraud detection AML Fraud detection Fraud detection Mobile POS ATM Tablet U
Slide 9: Streamlined, Consistent Omni-channel Experience After UP
Streamlined, Consistent Omni-channel Experience After UP Payment engine Core banking Payment engine Online banking Fraud detection and AML Mobile Tablet POS ATM Call Center Branch system Future payment types and channels UP FRAMEWORK UP MEETS THE CHALLENGE OF CHANGE ACI UNIVERSAL PAYMENTS 9
Slide 10: Acquisition of PAY.ON
Acquisition of PAY.ON Global Leader in eCommerce Gateway Services Transaction Details €180 million (approximately $198 million) 92% cash and 8% ACIW shares Leading eCommerce Payment Provider PAY.ON adds eCommerce payments gateway capabilities Global connectivity to more than 300 alternative payment
Slide 11: Payments Market Growing Fast
Payments Market Growing Fast Estimated 2015 transaction volume and 2015-2020 CAGR Billions TXNs 400 350 300 250 200 150 100 50 - Direct Debit Debit Card Credit Card ATM POS Checks Billers* e-commerce SWIFT & FED Wire Fraud^ 25% 20% 15% 10% 5% 0% -5% -10% 2015 Estimate (Billions) 2020 Estimate (Billi
Slide 12: Favorable Industry and Customer Trends
Favorable Industry and Customer Trends Market Sizing1 Total addressable market is ~$25bn in 2015 and growing mid to upper single digits, with highest growth coming from SaaS ~50% of addressable market are homegrown applications (ACI share <10%) eCommerce transaction growth expected to be 3-5x in-sto
Slide 13: Strategy to Drive Superior Performance
Strategy to Drive Superior Performance Continued Focus on Control, Profitability and Growth Growth Drivers Continue to increase recurring revenue base Expand customer relationships by cross-selling (on average customers use 3 ACI products or less) Lead payments transformation with Universal Payments
Slide 14: Financial Overview
ACI UNIVERSAL PAYMENTS UP FINANCIAL OVERVIEW 14
Slide 15: High Quality Software Model Drives Superior Performance
High Quality Software Model Drives Superior Performance Leading market position High retention and renewal rates Pricing power and large barriers to entry Significant recurring revenue Scalable model with improving margin Low cash investment required Strong cash flow and balance sheet Value enhancin
Slide 16: Bookings Growth Leads to Large Backlog
Bookings Growth Leads to Large Backlog Provides Revenue and Earnings Visibility Renewal rates across ACI products in the mid-high 90%s >95% of our contracts are transaction-based NET NEW SALES BOOKINGS(1) SNET 19%+ CAGR $315 $330 $501 $600 $702 $728 2010 2011 2012 2013 2014 LTM 9/30/15 (millions) HI
Slide 17: ACI's Financial Summary, 2011 – 2015
ACI’s Financial Summary, 2011 – 2015 2014 revenue geographic mix: 69% Americas, 23% EMEA and 8% Asia/Pacific NON-GAAP REVENUE 23% CAGR $465 $689 $871 $1,018 $1,055 2011 2012 2013 2014 2015E (millions) ADJUSTED EBITDA 24% CAGR $113 $191 $239 $261 $268 2011 2012 2013 2014 2015E (millions) Notes: 1- Re
Slide 18: Fixed Costs Provide Leverage in Model
Fixed Costs Provide Leverage in Model Quarterly Revenue (millions) $350 $300 $250 $200 $150 $100 $50 $0 Non Recurring Revenue: Ongoing Implementations, Services, Capacity Sales and Annual License Fees Month Recurring Revenue: SaaS Subscriptions & Transactions, Maintenance and License Fees (Paid Mont
Slide 19: SaaS Subscriptions and Transactions Contribution Growth
SaaS Subscriptions and Transactions Contribution Growth 2009 segment contribution Monthly license fees, 18% Initial licenses fees, 20% Services, 20% Maintenance, 32% SaaS subscriptions & transactions, 10% 9/30/15 LTM segment contribution Monthly license fees 8% Initial licenses fees 15% Services 10%
Slide 20: Low Cap Ex and Strong Cash Flow
Low Cap Ex and Strong Cash Flow CAPITAL EXPENDITURES $13 $19 $17 $33 $35 $40 3% 4% 2% 4% 3% 4% 2010 2011 2012 2013 2014 LTM 9/30/15 (millions) % of Non-GAAP Revenue Low capital expenditures needed to maintain existing client base OPERATING FREE CASH FLOW $63 $67 $24 $151 $134 $164 2010 2011 2012 201
Slide 21: Backlog is Foundation, Cross Sales Add Growth
Backlog is Foundation, Cross Sales Add Growth Existing customer base and low customer attrition provide baseline for future revenue Competitive positioning and high R&D spending provides pricing power Electronic payment growth of mid-high single digits Cross sales typically account for 2/3 of net ne
Slide 22: 2015 Guidance Key Metrics
2015 Guidance Key Metrics 2015 Non-GAAP Guidance Non-GAAP Revenue 1,040 - 1,070 Adjusted EBITDA 265 - 270 $s in millions, 9/30/15 fx rates Guidance - Reaffirming full year non-GAAP revenue guidance. - Represents 3%-6% organic growth after adjusting for foreign currency fluctuations - Full year adjus
Slide 23: Financial Summary - Five-year Targets
Financial Summary - Five-year Targets Organic revenue growth Mid-to-upper single digits Adjusted EBITDA margin 100 bps expansion per year Operating free cash flow Track adjusted EBITDA growth Sales net of term extension growth High single digits UP MEETS THE CHALLENGE OF CHANGE ACI UNIVERSAL PAYMENT
Slide 24: Questions? The Advantage
Questions? UP The Advantage Leading market position High retention and renewal rates Significant recurring revenue Scalable, fixed-cost model with improving margin Low cash investment required UP MEETS THE CHALLENGE OF CHANGE ACI UNIVERSAL PAYMENTS 24
Slide 25: Non-GAAP Financial Measures
Non-GAAP Financial Measures To supplement our financial results presented on a GAAP basis, we use the non-GAAP measure indicated in the tables, which exclude certain business combination accounting entries related to the acquisitions of Online Resources and significant transaction related expenses,
Slide 26: Non-GAAP Financial Measures
Non-GAAP Financial Measures Non-GAAP Revenue (millions) 2010 2011 2012 2013 2014 LTM Revenue $418 $465 $667 $865 $1,016 $1,028 Deferred revenue fair value adjustement - - 22 6 2 1 Non-GAAP revenue $418 $465 $689 $871 $1,018 $1,028 Adjusted EBITDA (millions) 2010 2011 2012 2013 2014 LTM Net Income (l
Slide 27: Non-GAAP Financial Measures
Non-GAAP Financial Measures ACI is also presenting operating free cash flow, which is defined as net cash provided by operating activities, plus payments associated with the cash settlement of acquisition related options and significant acquired opening balance sheet liabilities, plus net after-tax
Slide 28: Non-GAAP Financial Measures
Non-GAAP Financial Measures ACI also includes backlog estimates, which include all software license fees, maintenance fees and services specified in executed contracts, as well as revenues from assumed contract renewals to the extent that we believe recognition of the related revenue will occur with
Slide 29: Forward-Looking Statements
Forward-Looking Statements This presentation contains forward-looking statements based on current expectations that involve a number of risks and uncertainties. Generally, forward-looking statements do not relate strictly to historical or current facts and may include words or phrases such as “belie
Slide 30: ACI UNIVERSAL PAYMENTS UP
ACI UNIVERSAL PAYMENTS UP 30
ACI Worldwide — BofAML Leveraged Finance Conference 2015 on 6ix