Aci Worldwide, Inc. · NASDAQ:ACIW
Aci Worldwide — Investor Day (March 2010)
172 slides from Aci Worldwide's investor day presentation, Mar 4, 2010
Slide 1: ACI Investor Day 2010
ACI INVESTOR DAY 2010 BOSTON, MASSACHUSETTS MARCH 4, 2010
Slide 2: 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 of the Private Securities Litigation Reform Act of 1995. A discussion of these forward-loo
Slide 3: Agenda
3 Investor Day 2010 AGENDA PHIL HEASLEY.......................................................... Welcome LOUIS BLATT............................................................ Agile Payments Solution(tm) GARETH PRIEST...................................................... Initiate LYNN HOLLAND.....
Slide 4: Welcome
WELCOME PHIL HEASLEY CHIEF EXECUTIVE OFFICER
Slide 5: ACI Agile Payments Solution
ACI AGILE PAYMENTS SOLUTION(tm) LOUIS BLATT, PHD CHIEF PRODUCT OFFICER
Slide 6: Unified solution that initiates, manages, secures and operates payments
6 Be the leading provider of a unified solution that initiates, manages, secures, and operatespayments to maximize the total economic impact for our customers.
Slide 7: Strategic Plan 2010-2014
ACI 2014 ONE ACI Payments Industry Leader Unified Payments Loyal Customers Market Leader Profitable Growth Through Innovation, Quality and Acquisition Keeping the momentum: From control to growth STRATEGIC PLAN: 2010 - 2014 ACI 2010 35 Year Payments Veteran Organic Growth and Acquisitions Provider o
Slide 8: Trends
TRENDS Economic Upheaval Fraud Payment Frameworks Consolidation Globalization Convergence Regulatory Pressure Mobility SOA ed Web 2.0
Slide 9: We Must Free Up Resources
9 We Must Free Up Resources Sources: US Department of Commerce; Forrester Research
Slide 10: Total Banking IT Spend is $90B per year globally
Total Banking IT Spend is $90B per year globally 10 Source: Financial Insights -- Worldwide Banking IT Spending Guide 2009
Slide 11: Payments Market External Software and Services Spend
Payments Market External Software and Services Spend is $21B per year globally 11 Source: Financial Insights - Worldwide Payments Market Sizing 2009
Slide 12: ACI's Addressable Market Spend is $5B per year
ACI's Addressable Market Spend is $5B per year 12 Source: Financial Insights - Worldwide Payments Market Sizing 2009
Slide 13: Global Addressable Market Overview
Global Addressable Market Overview INITIATE MANAGE WHOLESALE MANAGE RETAIL OPERATE SECURE $25B in 2014 $5B 4,373 7,841 5,746 8,086 6,137 8,456 6,588 9,091 7,089 9,198 7,305 9,652 7,643 4,622 4,745 5,013 5,246 5,472 1,010 1,169 1,227 1,293 1,354 1,418 2008 2009 2010 2011 2012 2013 2014 $10B $15B $20B
Slide 14: ACI's Serviceable Software Market Opportunity
ACI's Serviceable Software Market Opportunity 5YR CAGR = 2.3% Other Homegrown, etc. SOFTWARE PROVIDERS Clear2Pay Norkom Bottomline Dovetail Fortent Actimize IBM ACI Fair Issac Intuit S1 SAS Fundtech Bottomline Market Share ($B as of 2008) SERVICEABLE MARKET IN 2014 = $5.6B 2,632 2,700 1,747 1,849 2,
Slide 15: Market Views of ACI Strategy
15 Market Views of ACI Strategy July 2009: Susan Feinberg, TowerGroup " You will not find a single bank that disagrees with the agile payments concept, but all of them are challenged on how to get there." December 2008: AITE: Demystifying Payments Hubs " ... Strongly believes that legacy payments sy
Slide 16: The Drive to Achieve Payment Efficiencies
16 The Drive to Achieve Payment Efficiencies "Enterprise payments requires taking a holistic view of a bank's payment activities, providing consistent oversight of all payment operations, and removing processing and technology inefficiencies. It is essential to remove the redundancy of processes and
Slide 17: ACI's Opportunity: Introduce an ERP for Payments
17 ACI's Opportunity: Introduce an ERP for Payments Initiate, manage, secure and operate payments COO Agile Payments Solution CATEGORY COMPONENTS CHAMPION Word Processing, Spreadsheet, Presentation, etc. Manufacturing, Financials, Human Resources Sales Force Automation, Automated Marketing, Customer
Slide 18: Delivering Industry-Leading Products and Solutions
18 Delivering 11 Industry-Leading Products and Solutions
Slide 19: Network Infrastructure Complexity
Network Infrastructure Complexity 19
Slide 20: Network Infrastructure Complexity and Duplication in Services
Network Infrastructure Complexity ACI Worldwide, Inc. Proprietary & Confidential Duplication in Services 20
Slide 21: Redundancies between Stakeholders
Redundancies between Stakeholders 21
Slide 22: Processes Occur in Silos
Processes Occur in Silos 22
Slide 23: Phase 1: Removing the Silos Today
23 PHASE 1: Removing the Silos Today
Slide 24: Phase 2: Collectively Comprises Services
24 PHASE 2: Collectively Comprises 15 Services
Slide 25: Phase 2: Collectively Comprises Services
25 PHASE 2: Collectively Comprises 15 Services
Slide 26: Phase 2: Collectively Comprises Services
PHASE 2: Collectively Comprises 15 Services 26
Slide 27: A Single Holistic Solution
27 A Single Holistic Solution
Slide 28: Unified Information Payment Model
28 Unified Information Payment Model Payment Intelligence SELECTED
Slide 29: Brief illustration of APS Video
29 Brief illustration of APS VIDEO
Slide 30: Journey to Becoming an Agile Payments Enterprise
Journey to Becoming an Agile Payments Enterprise 30
Slide 31: Mapping Customer Goals to ACI Capabilities
31 Mapping Customer Goals to ACI Capabilities
Slide 32: Developing an Agile Payments Solution Roadmap
32 Developing an Agile Payments Solution Roadmap
Slide 33: Market Segmentation Analysis
Market Segmentation Analysis Macro statistics were gathered from CIA World Factbook, except for Spending data, which was drawn from Financial Insights. All bank data has been gathered from BankScope.com. GLOBAL BANK MARKET $1.4B opportunity in cross-selling full APS to ACI's 97 largest customers amo
Slide 34: Opportunity with our largest customers and prospects
Potential $2.6B Annual Sales Opportunity $1.4B opportunity in cross-selling full APS to ACI's 97 largest customers among thetop 556 global banks $1.2B opportunity in selling the full APS to a select group of 46 prospects who rank among the top 80 global banks Current 97 bank customers among global 5
Slide 35: Opportunity with the net new market
Opportunity with the net new market Potential $2.0B Annual Sales Opportunity Current 408 bank customers outside global 556 $1.0B opportunity in winning remaining 413 of top 556 global banks for full APS $1.0B opportunity in winning remaining 17K+ global banks for full APS $204M Revenue 35 Sources: S
Slide 36: The Economic Impact of ACI Agile Payments Solution
The Economic Impact of ACI Agile Payments Solution LOWER COST LESS HARDWARE, SOFTWARE & LABOR LOWER RISK Easier to roll out payment process efficiencies across merged enterprise Acquisition, deployment, operations (efficiency/FTE) More data & real time analysis IMPROVE TIME TO MARKET LEVERAGE PAYMEN
Slide 37: In Summary...
In Summary... ACI Agile Payments Solution will be incrementally launched as a series of capability solutions The roadmap to our vision has two distinct phases Our execution on this strategy has already begun Our opportunity is clear, compelling, and achievable 37
Slide 38: Online Banking Solutions Overview
ONLINE BANKING SOLUTIONS OVERVIEW GARETH PRIEST VP & GENERAL MANAGER
Slide 39: Outline & Agenda
Outline & Agenda Market Overview Market definition Global market overview Market sizing and growth by segment and ACI market share Global market drivers Product Overview ACI products offered by segment, with brief functional summary Competitive landscape Customer profile Product value propositions b
Slide 40: Market Overview
40 MARKET OVERVIEW
Slide 41: Defining the ACI Online Banking Market
Sources: Tower : April 2009 Defining the ACI Online Banking Market STRATEGIES MARKETS Leading presence in US online business banking market PRODUCTS Market leading US online banking product TECHNOLOGY Unique on demand offering Some customers lead expansion into retail banking Separate product for As
Slide 42: Global Market Overview
Global Market Overview 42 The online banking market is established in the U.S. & EMEA and opportunities exist as banks consolidate & look for next generation online solutions In AP opportunities exist in the growth of online & mobile banking in new regions such as China, India & SE Asia Customer exp
Slide 43: Global Market Sizing & ACI Market Share
Global Market Sizing & ACI Market Share Included in the Financial Insights Initiate market spend analysis Global spend for online and mobile channels for corporate banking only Business banking is approx 33% of overall online banking market NA & EMEA two largest markets, AP fastest growing Near term
Slide 44: Global adoption of Internet drives online banking
Global adoption of Internet drives online banking 44 Growth of the Internet Global Internet usage 2000 360MM users Global Internet usage 2009 1700MM users Growth 380% Population penetration 2009 25.6% Asia 783MM users EMEA 418 MM users NA 252 MM users Technology Trends Growing use & acceptance of Sa
Slide 45: Product Overview
45 PRODUCT OVERVIEW
Slide 46: ACI Corporate & Retail Online Banking
ACI Corporate & Retail Online Banking Enterprise Banker: A powerful & flexible online banking system providing payments, reporting & cash management functionality that can scale from consumer needs to providing sophisticated cash management capabilities to the largest corporate customers of any bank
Slide 47: Competitive Landscape (Selected Players)
Competitive Landscape (Selected Players) 47 47 Key Messages ACI is recognized as a leading provider in the market At the lower end of the market online banking capabilities are offered by core processors and core bank system providers but they typically do not offer best of breed functionality New c
Slide 48: Online & Mobile Banking are Key Channels
Online & Mobile Banking are Key Channels for 21st Century Banking, joining Branches, ATMs, and Call Centers 48 Sources: Financial Insight, ACI " .....the market is too competitive to allow banks to rest on their innovation laurels, and customer demands are forcing banks to shift gears and refocus th
Slide 49: Enterprise Banker Value Proposition
Enterprise Banker Value Proposition One Product for All Online Markets Commercial Middle Market Small Business Micro Business Single platform for targeting all the Banks business customers leads to significant cost take out Enables a Bank to price, package and market using our granular entitlements
Slide 50: Strategy Summary
50 STRATEGY SUMMARY
Slide 51: Global Market Focus - Online Banking
Global Market Focus - Online Banking Strong product & strong market presence Available product & modest market presence No available product & no market presence 51
Slide 52: Market Opportunities
Market Opportunities ‘Online System Consolidation across Bank customer segments Increased penetration into existing accounts & new sales via ACI direct sales team Upgrade to next generation Online offerings Targeted systems upgrades Expansion to new regions — AP & EMEA Initial expansion through ACI
Slide 53: Product Launches
Product Launches 53 Online Banking Continued investment & releases in supporting Banks system consolidation strategies Integrating fraud management Increasing sophistication of cash management functionality for large corporate market Convergence of 2 ACI products to one global online banking platfor
Slide 54: Evolution of Initiate
Evolution of Initiate Enterprise Banker is the foundation for Initiate New releases of Enterprise Banker will provide APS integration with other applications Capability solutions will be created with business services provided by Enterprise Banker Onboard APS Service for all ACI products The converg
Slide 55: Road Map Specific to Agile Payments - Phase II
Road Map Specific to Agile Payments - Phase II 55
Slide 56: Summary Online Business Banking
Sources: Tower : April 2009 Summary Online Business Banking STRATEGIES MARKETS Continue US market penetration success & existing account expansion CORE Market ADJACENT Market / PARTIAL Solution ADJACENT Market / NO Solution Online Retail Banking Enrollments & Account Opening Remote Deposit Security
Slide 57: Retail Payments Solutions Overview
RETAIL PAYMENTS SOLUTIONS OVERVIEW LYNN HOLLAND VP & PRODUCT LINE MANAGER
Slide 58: Outline & Agenda
Outline & Agenda Market Overview Market definition Global market overview Market sizing and growth by segment and ACI market share Product Overview ACI products offered by segment, with brief functional summary Regional product availability and focus Competitive landscape Strategy Summary Global mar
Slide 59: Market Overview
59 MARKET OVERVIEW
Slide 60: Defining the ACI Retail Payments Market
Defining the ACI Retail Payments Market Bill Pay Payment Engines STRATEGIES MARKETS CORE Market / Total Solution ADJACENT Market / PARTIAL Solution ADJACENT Market / NO Participation Merchant Mgmt. Collections PRODUCTS TECHNOLOGY P2P Settlement Card/Account Mgmt. Token Mgmt. Loyalty Disputes Check A
Slide 61: Defining the ACI Retail Payments Market (Jan 2010)
Defining the ACI Retail Payments Market Bill Pay STRATEGIES MARKETS CORE Market / Total Solution ADJACENT Market / PARTIAL Solution ADJACENT Market / NO Participation Loyalty Collections PRODUCTS TECHNOLOGY P2P Payment Engines Merchant Acquiring Settlement Token Mgmt. Disputes Check Authorization &
Slide 62: Global Market Overview
Global Market Overview 62 Regulation is driving change and obsolescence Banks are looking for new sources of revenue to replace losses in credit card profits. This places further pressure on the payments infrastructure to deliver new products to market Globalization (SEPA, Internet, cross-border tra
Slide 63: Market Growth by Segment & ACI Share
Market Growth by Segment & ACI Share Included in the Financial Insights Retail Market Spend Analysis Global spend for credit, debit and pre-paid card solutions Software spend IT Services spend Modest growth rates but a large market opportunity, $8 - $9 billion annually Software spend of over $3.5 bi
Slide 64: Product Overview
64 PRODUCT OVERVIEW
Slide 65: Offerings By Segment
Offerings By Segment 65 65 ACI Payments Engines BASE24-eps: Flagship open architecture multi-channel payment engine providing authorization, routing and channel management for banks and processors Retail Commerce Server: Complete suite of products for merchants providing payments processing, check m
Slide 66: Global Market Focus - BASE24-eps
Global Market Focus - BASE24-eps Customer Live, in Project, or Country/Region features available Functionality enabled, Country/Region Specific features need developed Will Not Sell in this Market in 2010 66
Slide 67: Global Market Focus - Retail Commerce Server
Global Market Focus - Retail Commerce Server Customer Live, in Project, or Country/Region features available Functionality enabled, Country/Region Specific features need developed Will Not Sell in this Market in 2010 67
Slide 68: Global Market Focus - Back Office Services
Global Market Focus - Back Office Services Customer Live, in Project, or Country/Region features available Functionality enabled, Country/Region Specific features need developed Will Not Sell in this Market in 2010 68
Slide 69: Competitive Landscape (Selected Players)
Competitive Landscape (Selected Players) 69 69 Key Messages Competitive landscape is diverse Software market is highly fragmented The processor segment represent a direct market opportunity and an alternative channel to reach smaller institutions Large number of small regional providers Globally ACI
Slide 70: Strategy Summary
70 STRATEGY SUMMARY
Slide 71: Expand The Offering - Market Opportunities
Expand The Offering Modernization Consolidation Opportunity* $3.6B Spend 2010 3.77% CAGR Market Opportunities 71 71 + + = *Source: Financial Insights - Worldwide Payments Market Sizing 2009 Retail Manage (excludes acquiring and channel spend for ATM/POS)
Slide 72: Road Map Specific to Agile Payments Solution
Road Map Specific to Agile Payments Solution 72
Slide 73: Evolution of Retail Manage
Evolution of Retail Manage BASE24-eps is the core of the Manage ? Transact service for retail payments ACI Issuer and ACI Acquirer form the core of Manage ? Account for retail payments Payments Manager and ACI Interchange will converge to become the APS Manage ? Complete service for retail payments
Slide 74: Summary
Summary Bill Pay STRATEGIES MARKETS CORE Market / Total Solution ADJACENT Market / PARTIAL Solution ADJACENT Market / NO Participation Loyalty Collections PRODUCTS TECHNOLOGY P2P Payment Engines Merchant Acquiring Settlement Token Mgmt. Disputes Check Authorization & Switching BASE24-eps Resilient a
Slide 75: Wholesale Payments Solutions Overview
WHOLESALE PAYMENTS SOLUTIONS OVERVIEW BARRY RHODES VP & PRODUCT LINE MANAGER
Slide 76: Outline & Agenda
Outline & Agenda Market Overview Market definition Global market overview Market sizing and growth by segment and ACI market share Product Overview ACI products offered by segment, with brief functional summary Competitive landscape Product value propositions by segment Regional product availability
Slide 77: Market Overview
MARKET OVERVIEW ” IMEI
Slide 78: Defining the ACI Wholesale Payments Market
Core Lending AP/AR Outsource Defining the ACI Wholesale Payments Market STRATEGIES MARKETS Domestic payments for high value (RTGS) and low value (Bulk/ACH) Trade Finance - -2% (Amer) 9% (AP) CAGR EIPP PRODUCTS Industry leading high value payment solution - ACI Money Transfer System TECHNOLOGY Resili
Slide 79: Global Market Overview
Global Market Overview 79 Increased expectations for client experience and customer service Unified payment information flows Consolidation of existing platforms STP improvement for ACH and WIRE Centralized fraud and risk Bulk networks moving to real time settlement Global Market Drivers Bulking cle
Slide 80: Global Market Sizing & ACI Market Share
Global Market Sizing & ACI Market Share 80 Included in the Financial Insights Wholesale Market Spend Analysis Global spend for high and low value payment solutions Software spend IT Services spend Modest but steady growth rates but a huge market opportunity Total Addressable Market Size 2010: $6,137
Slide 81: Product Overview
81 PRODUCT OVERVIEW
Slide 82: Offerings by Segment
Offerings by Segment 82 82 ACI Worldwide, Inc. Proprietary & Confidential ACI Transaction Banking ACI Money Transfer System (MTS) : A financial payment clearing and routing engine providing for both high value payment processing (SWIFT and RTGS), low value bulk payment processing and a robust messag
Slide 83: Competitive Landscape (Selected Players)
Competitive Landscape (Selected Players) 83 83 ACI Worldwide, Inc. Proprietary & Confidential Key Messages Competitive landscape is diverse Software market is highly fragmented Large number of smaller regional providers and in-house solutions
Slide 84: Improve Transaction Services for Long-term Health
Improve Transaction Services for Long-term Health 84 84 Sources: Financial Insights, ACI "For the sake of the long-term health of the business, the cost important strategic responses will focus on clients to minimize churn and win clients away from competitors. These strategies include tailoring sol
Slide 85: Global Market Focus - Money Transfer System
Global Market Focus - Money Transfer System Customer Live, in Project, or Country/Region features available Functionality enabled, Country/Region Specific features need developed Will Not Sell in this Market in 2010 85
Slide 86: Strategy Summary
86 STRATEGY SUMMARY
Slide 87: Market Opportunities
Market Opportunities ‘SEPA Payment Services Directive (PSD) Focus on the European countries that are part of| ‘SEPA and those banks that took the path of ‘modifying internal systems that now cannot be maintained easily. 180 20022 and SWIFT MX messaging Utilize the industry change as a catalyst for i
Slide 88: Getting to Agile Payments - Phase I Capability Solution
Getting to Agile Payments - Phase I Capability Solution SEPA Payments Unified Payment View Product Integration Enterprise Banker PRM Architectural & technology progression towards APS Adoption of ACI standard browser framework and user centered design Adoption of unified payment information model Ad
Slide 89: Enhancement of MTS
Enhancement of MTS MTS is the foundation for Manage for Wholesale Payments New releases of MTS will provide APS integration with other applications Capability solutions will be created with business services provided by MTS for Manage Party best of breed products under APS infrastructure Road Map to
Slide 90: Summary
Core Lending AP/AR Outsource Summary STRATEGIES MARKETS Domestic payments for high value (RTGS) and low value (Bulk/ACH) Trade Finance - -2% (Amer) 9% (AP) CAGR EIPP PRODUCTS Industry leading high value payment solution - ACI Money Transfer System TECHNOLOGY Resilient and scalable architecture Cross
Slide 91: Secure Solutions Overview
SECURE SOLUTIONS OVERVIEW DAVID NUSSENBAUM VP & PRODUCT LINE MANAGER
Slide 92: Outline & Agenda
Outline & Agenda Market Overview Market definition Global market overview Market sizing and growth by segment and ACI market share Product Overview ACI financical crimes solution Product value propositions by segment Regional product availability and focus Strategy Summary Global market opportunitie
Slide 93: Market Overview
93 MARKET OVERVIEW
Slide 94: Defining the ACI Secure Market
Defining the ACI Secure Market STRATEGIES MARKETS Card Fraud Compliance Loans PRODUCTS PRM- deployed at 150+ institutions, globally TECHNOLOGY Resilient and scalable architecture Enterprise Risk and Opportunity Mgt New ACM and AG offerings APS integration to payments engines and channels Financial C
Slide 95: Global Market Overview
Global Market Overview 95 Financial crime continues to increase in frequency and sophistication Payments fraud: ATM/debit card , online banking, check, first party, internal fraud and money laundering Current economic climate puts pressure on banks to reduce spend and fraud losses Financial institut
Slide 96: Global Market Sizing & ACI Market Share
Global Market Sizing & ACI Market Share 96 96 ACI Worldwide, Inc. Proprietary & Confidential 2008 FCM Enterprise Platforms Market Share Public and ACI proprietary data
Slide 97: Product Overview
97 PRODUCT OVERVIEW
Slide 98: ACI Financial Crimes Solution
CHANNELS ACI financial crimes solution 98 ATM / Debit Card Credit Card ACH Wire Online Banking Mobile Banking Checks Branch/Teller EVENT DATA PROACTIVE RISK MANAGER AUTOMATED CASE MANAGEMENT DETECT RESOLVE INTELLIGENCE Score Rule Queue Contact Confirm Block Investigate Mark Deactivate Write Off Noti
Slide 99: How we defend attacks on multiple payment silos
Enterprise Risk and Opportunity Mgmt. Deposit Account Fraud and AML Card Fraud How we defend attacks on multiple payment silos 99 99
Slide 100: Global Market Focus - Secure
Global Market Focus - Secure Customer Live, in Project, or Country/Region features available Functionality enabled, Country/Region Specific features need developed Will Not Sell in this Market in 2010 100
Slide 101: Strategy Summary
101 STRATEGY SUMMARY
Slide 102: Market Opportunities and Customer Stories
Market Opportunities and Customer Stories 102 Client Opportunity Response US Diversity of attacks Enhanced enterprise detection platform for detection and workflowNew Analytic Gateway module for enhanced analyticsExpand existing relationships: Manage new channel risks CANADA Timed, surprise attacks
Slide 103: Getting to Agile Payments - Phase I Capability Solutions
Getting to Agile Payments - Phase I Capability Solutions Remote Banking Security and Compliance Consumer Risk and Opportunity Management Corporate Risk and Opportunity Management Product Integration PRM - ACM PRM - BASE24eps-Card Issuer/Acquirer PRM - MTS PRM - Enterprise Banker Architectural & tech
Slide 104: Evolution of Secure
Evolution of Secure SOA enablement of existing business processes Adoption and integration of reference architecture Deconstruction of current high value capabilities as services Development of net new services under APS Integration of 3rd party capabilities Road Map to Agile Payments PHASE 1 APS Se
Slide 105: Summary
Summary STRATEGIES MARKETS Card Fraud Compliance Loans PRODUCTS PRM- deployed at 150+ institutions, globally TECHNOLOGY Resilient and scalable architecture Enterprise Risk and Opportunity Mgt New ACM and AG offerings APS integration to payments engines and channels Financial Crimes Management COMPET
Slide 106: Operate Solutions Overview
OPERATE SOLUTIONS OVERVIEW KEN SCUDDER VP & PRODUCT LINE MANAGER
Slide 107: Outline & Agenda
Outline & Agenda Market Overview Market definition Global market overview Product Overview ACI products by segment Competitive landscape Regional product availability and focus Strategy Summary Market strategy Roadmap to ACI Agile Payments Solution Customer success story 107
Slide 108: Market Overview
108 MARKET OVERVIEW
Slide 109: Defining the ACI Operate Market
Defining the ACI Operate Market STRATEGIES MARKETS Extend Solutions in Adjacent Markets PRODUCTS Partner with Leading Technology Providers TECHNOLOGY Resilient and Scalable Architecture Deliver Value to Additional Stakeholders Expand with Cross-payment Solutions Multi-platform Reference Architecture
Slide 110: Global Market Overview
Global Market Overview 110 Payment Integration & Middleware Migration to open-standards reducing costs Complex infrastructures continue to provide integration and connectivity challenges Payment Testing Periodic network mandates and changes create on-going challenge Enterprise application testing so
Slide 111: Product Overview
111 PRODUCT OVERVIEW
Slide 112: Offerings by Segment
Offerings by Segment ACI Payment Testing Payments testing solutions encompassing ATM, POS, network interfaces, performance, risk management and network certification ACI Payment Integration & Middleware Data-comms solutions providing a range of communication services to enable message exchange on mu
Slide 113: Competitive Landscape
Competitive Landscape 113 113 Key Messages Large vendors dominate overall market but lack payment specialization Many point solution vendors
Slide 114: Global Market Focus - Operate
Global Market Focus - Operate Customer live, in project, or country/region features available Functionality enabled, country/region specific features may need to developed Will not sell in this market in 2010 114
Slide 115: Strategy Summary
115 STRATEGY SUMMARY
Slide 116: Market Strategy
Market Strategy OPERATE Payment Integration > Target infrastructure complexity and proprietary protocols to reduce cost and risk Leverage IBM alliance and other partner relationships for integrated solutions that lower overall TCO Eiadeware | ” clayton scars » Fats migatono BASE2+-aps nd Nevo Fest p
Slide 117: Road Map to Agile Payments
Road Map to Agile Payments PAYMENT INTELLIGENCE (W/ PAYMENT INFO MODEL) APS INFRASTRUCTURE (W/ REFERENCE ARCHITECTURES) PAYMENT SERVICE MANAGEMENT INFRASTRUCTURE & TOOLS PAYMENT TESTING PHASE 1 PHASE 1 PHASE 1 PHASE 2 PHASE 2 Evolution of Operate Infrastructure & Tools provides the basis for evoluti
Slide 118: Operate Customer Success
118 Operate Customer Success "ACI Worldwide Helps SunTrust Process Growing ATM Transaction Volumes" ACI PRESS RELEASE, JANUARY 6, 2010 ACI Communications Services for Advanced Networking enabled SunTrust to: Align its infrastructure Exceed throughput requirements Reduce response times Lower demand o
Slide 119: Summary
Summary STRATEGIES MARKETS Extend Solutions in Adjacent Markets PRODUCTS Partner with Leading Technology Providers TECHNOLOGY Resilient and Scalable Architecture Deliver Value to Additional Stakeholders Expand with Cross-payment Solutions Multi-platform Reference Architectures Global Reach Payments
Slide 120: ACI Agile Payments Solution
ACI AGILE PAYMENTS SOLUTION(tm) LOUIS BLATT, PHD CHIEF PRODUCT OFFICER
Slide 121: Market Overview
MARKET OVERVIEW RALPH DANGELMAIER SENIOR VICE PRESIDENT, ACI GLOBAL MARKETS & SERVICES
Slide 122: ACI Global Markets - Topics
ACI Global Markets - Topics Key Points Major Trends by Region Current Market Penetration Go to Market Strategy Recent Key Wins 122
Slide 123: ACI Global Markets - Key Points
ACI Global Markets - Key Points Continue to see good market opportunity in all geos In an extremely difficult market, Americas sales grew 9.6% and revenue grew 7.0% compound since 2007 >3x market growth Result of strengthening the organization and implementing Best Practices for Sales and Services N
Slide 124: Major Trends by Region
124 MAJOR TRENDS BY REGION
Slide 125: Global Market Trends and Drivers
Global Market Trends and Drivers Growth in electronic payment transaction volumes Consolidation creates very large scale needs And inefficient platform redundancies Intense focus on fraud and risk management Continued desire to reduce costs and increase productivity Search for new revenue sources Gl
Slide 126: Key Trends by Region
Latin America Economic growth and "banking" of the population Replacing legacy technologies Migration to new versions X-selling risk, wholesale, back office Key Trends by Region 126 North America Continued growth in payment volumes Need for payment silo consolidation Banks "in-sourcing" to leverage
Slide 127: Key Trends by Region (Africa, Middle East, Asia)
Africa Nascent economies, but large opportunity base Entry opportunity for leapfrog technologies (mobile, prepaid) ACI brand and reputation creates opportunities Key Trends by Region 127 Middle East Sophistication and economic growth Replacing legacy technologies X-sell risk wholesale, back office M
Slide 128: Internal Drivers
Internal Drivers Migrations to new solutions versions Phased migration approaches beginning to gain traction Extended support models designed to support customers on older products Better services models Project scoping, rates, processes AOD alternative Getting good traction Alliances IBM - more foc
Slide 129: Current Market Penetration - A Snapshot
129 CURRENT MARKET PENETRATION - A SNAPSHOT
Slide 130: ACI Market Share
ACI Market Share 130 9 of the top 10 in Canada 22 of the top 25 in the U.S. 4 of the top 5 in Brazil 4 of the top 10 in Mexico 7 of the top 10 in Saudi Arabia 7 of the top 10 in the U.K. 4 of the top 5 in South Africa 3 of the top 5 in Greece 3 of the top 5 in Netherlands 3 of the top 5 in Australia
Slide 131: ACI Market Share (Banking)
ACI Market Share 131 BANKING 22 of the top 25 in the U.S. 4 of the top 5 in Brazil 3 of the top 5 in Australia 9 of the top 10 in Canada 7 of the top 10 in Saudi Arabia 4 of the top 10 in Malaysia 42 customers in the top 100 world banks 7 of the top 10 in India 7 of the top 10 in the U.K. 4 of the t
Slide 132: Sample Customers - Retail Banking Americas
132 Sample Customers - Retail Banking Americas Sample Customers - Retail Banking Americas
Slide 133: Sample Customers - Retail Banking - EMEA
Sample Customers - Retail Banking - EMEA 133 133 133 133
Slide 134: Sample Customers - Asia Pacific
Sample Customers - Asia Pacific 134 134 134 134 134 (Taishin)
Slide 135: Sample Customers - Wholesale Banking
135 Sample Customers - Wholesale Banking Sample Customers - Wholesale Banking
Slide 136: Sample Customers - Fraud Management Solutions
Sample Customers - Fraud Management Solutions 136 136 136
Slide 137: Sample Customers - Retailers
Sample Customers - Retailers 137 137 137 137 137
Slide 138: Markets with the Biggest Opportunity
Markets with the Biggest Opportunity 138 A focused strategy on strategic markets A focus on large and/or high-growth markets United States United Kingdom Canada Japan China Germany Australia France Brazil India Italy Mexico
Slide 139: Key Growth Markets - Americas
Brazil Very sophisticated payments market Old underlying platform technology in need of change-out Structural advances (e.g. ATM network sharing) are driving change IBM partnership is key in Brazil Key Growth Markets - Americas 139 United States ACI's largest market Electronic payment volumes contin
Slide 140: Key Growth Markets - EMEA
United Kingdom Very old underlying platform technology, particularly for wholesale payments and back office Regulatory drivers persist (SEPA, Faster Payments, EMV) ACI has a leadership position in retail payments and risk management Key Growth Markets - EMEA 140 Germany Very old underlying platform
Slide 141: Key Growth Markets - Asia/Pacific
Japan Very sophisticated payments market Old underlying platforms in need of change-out Japanese banks' international aspirations will lead them to new solutions ACI will need effective partnerships to penetrate the market, including IBM Key Growth Markets - Asia/Pacific 141 China Relatively limited
Slide 142: Go To Market Strategy
142 GO TO MARKET STRATEGY
Slide 143: Sales and Services Best Practices
Sales and Services Best Practices 143 Driving global consistency to facilitate local autonomy Consistent sales processes Consistent and accurate forecasting Fair and equitable pricing Sales Services Consistent project practices and disciplines Consistent management reporting to drive results Focus o
Slide 144: 5-Step Sales Process
Discovery Account Profile Strawman/Strategy ROI Analysis Close 5-Step Sales Process 144 A structured, proven approach
Slide 145: ACI Product Assets - Sample Customer
FRAUD & RISK MANAGEMENT SOLUTIONS FRAUD DETECTION ACI Proactive Risk Manager COMMON INFRASTRUCTURE & TOOLS CASE MANAGEMENT ACI Automated Case Management System COMMUNICATIONS ACI Network Express ACI Comm Services for Advanced Networking GoldenGate RETAIL PAYMENTS SOLUTIONS ACI Product Assets - Sampl
Slide 146: Global Payment Solutions Strategy
146 Global Payment Solutions Strategy FRAUD & RISK MGMT SOLUTION Scoring, Business Rules, Alert Management, Trend Analysis, Model Development, Case Management CHANNELS WHOLESALE PAYMENTS SOLUTION Data Management, Workflow Queues, Routing & Exception Handling Rules, Liquidity, Monitoring, Fraud Detec
Slide 147: Discovery - Customer Current Assets Example
147 U.S. East Legacy Vendor Sun Solaris Australia/NZ Legacy IBM System z UK BASE24 HP Non-stop Scandanavia Outsourced Germany Inhouse IBM Sysem z Holland BASE24 HP Non-stop "Discovery" - Customer* Current Assets Example Italy BASE24 HP Non-Stop Canada BASE24-pos HP Non-stop U.S. West Outsourced Braz
Slide 148: Clear efficiencies from regional hub deployment
Clear efficiencies available from regional hub deployment 148 Asia Pacific BASE24-eps PRM, Back Office Latin America BASE24-eps PRM, Back Office "Strawman" - Customer Sample End State North America BASE24-eps PRM, Back Office EMEA BASE24-eps PRM, Back Office Northern Asia BASE24-eps PRM, Back Office
Slide 149: Example Retail Payments Consolidation Opportunities
Authorization Settlement Example Retail Payments Consolidation Opportunities 149 Provider A Prepaid Outsourced Provider B Debit Outsourced Provider B Credit Outsourced Risk ATM-Driving Card Products Provider D AML Provider A/B Debit and PrePaid Outsourced Provider G Checks, Kiting Provider A Prepaid
Slide 150: Sample ROI Upgrade to BASE24-eps
Sample ROI Upgrade to BASE24-eps Software & customizations $ 9 M Single ATM message standard $ 8 M Consolidate auth across all channels $ 18 M Bring outsourced processing in-house $ 15 M Consolidate Fraud Detection $ 26 M Consolidate Credit Systems $ 20 M Consolidate Authorization Platforms $ 20 M C
Slide 151: Key Benefits to the Customer
Key Benefits to the Customer Reduced overall costs due to the elimination of redundant silos for payments and risk management Increased efficiency through an integrated end-to-end solution Improved time to market for new products and services leveraging next-generation payment technologies Improved
Slide 152: Best Practices
152 BEST PRACTICES
Slide 153: Sales and Services Best Practices
Sales and Services Best Practices 153 Driving global consistency to facilitate local autonomy Consistent sales processes Consistent and accurate forecasting Fair and equitable pricing Sales Services Consistent project practices and disciplines Consistent management reporting to drive results Focus o
Slide 154: Professional Services Improvements
Professional Services Improvements Best Practices in Action Americas Services Rates in 2009 Americas PS Bill Rates (average) increased 15% Americas Billable Utilization increased 15% Americas Average Weekly revenue earned increased 20% Projects Significant decline in customer projects at risk Servic
Slide 155: Recent Key Wins
155 RECENT KEY WINS
Slide 156: Recent Significant Wins
Leading South African Bank Consolidating redundant payment silos on a single enterprise hub Enhancing overall ability to scale and support next-generation ATM's Competitive KO for ACI BASE24-eps on IBM System z Recent Significant Wins 156 Large French Bank New account for ACI in a key market Replaci
Slide 157: Finance Update
FINANCE UPDATE SCOTT BEHRENS CHIEF FINANCIAL OFFICER
Slide 158: Calendar Year Revenue Mix
158 158 Calendar Year Revenue Mix 57% 29% 14% 16% 30% 17% 54% 24% 20% 59% 23% 57% 19% 21% 60% $318 $356 $374 $418 $406 $418 - $428
Slide 159: CY 2009 Revenue Concentration
159 CY 2009 Revenue Concentration CY 2009 Revenue Concentration = Revenue from Top 20 Customers = Revenue from All Other Customers Represents Top 20 out of 749 Customers Top 1 3% Top 5 12% Top 10 20% Top 20 30% Not reliant on an individual customer relationship Top 20 individual customers change fro
Slide 160: 60-Month Backlog
160 60-Month Backlog Consistent Backlog Growth Year-over-Year Monthly Recurring portion growing at a higher rate Monthly Recurring includes higher margin MLF, Maintenance, and Processing Services Stable Non-Recurring Backlog reflects ability to move projects in to GAAP revenue at the same rate that
Slide 161: Relative Attrition by Geography and Product
161 Relative Attrition by Geography and Product 3% Global Attrition, a reduction from 4% in 2008 Relative Attrition by Channel Americas slightly higher than average EMEA and Asia-Pacific slightly lower than average Relative Attrition by Product Retail payment engine products better than the average
Slide 162: Operating Income / EBITDA 2007-2010
162 Operating Income / EBITDA 2007-2010 Operating Income Operating EBITDA Operating EBITDA Operating EBITDA
Slide 163: 2010 Guidance
163 2010 Guidance Revenue Expect revenue growth even as we anticipate fewer term renewals in 2010 where revenue recognition occurs immediately Operating Income Operating income improves from the on-going focus on profitable sales and efficient expense management 15%-20% growth range Implies expense
Slide 164: Ongoing Margin Improvement Initiatives
164 Ongoing Margin Improvement Initiatives ACI's profitability is driven by four main sources of revenue: Maintenance, Application, Services and On Demand. Maintenance Reliable & predictable revenue and cash flow stream Higher maintenance pricing on mature + sunset products or move to newer version
Slide 165: Every Second. Every Day.
IMG EVERY SECOND. EVERY DAY.
Slide 166: Non-GAAP Financial Measures
Non-GAAP Financial Measures Management generally compensates for limitations in the use of non-GAAP financial measures by relying on comparable GAAP financial measures and providing investors with a reconciliation of non-GAAP financial measures only in addition to and in conjunction with results pre
Slide 167: Non-GAAP Financial Measures
Non-GAAP Financial Measures Backlog is considered a non-GAAP financial measure as defined by SEC Regulation G. Our 60-month backlog estimate represents expected revenues from existing customers using the following key assumptions: Maintenance fees are assumed to exist for the duration of the license
Slide 168: Non-GAAP Financial Measures
Non-GAAP Financial Measures Estimates of future financial results are inherently unreliable. Our backlog estimates require substantial judgment and are based on a number of assumptions as described above. These assumptions may turn out to be inaccurate or wrong, including for reasons outside of mana
Slide 169: Non-GAAP Financial Measures
Non-GAAP Financial Measures Operating EBITDA is defined as operating income plus depreciation and amortization and non cash compensation. The presentation of these non-GAAP financial measures should be considered in addition to our GAAP results and is not intended to be considered in isolation or as
Slide 170: 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 171: Forward-Looking Statements
Forward-Looking Statements All of the forward-looking statements are expressly qualified by the risk factors discussed in our filings with the Securities and Exchange Commission. Such factors include, but are not limited to, risks related to the global financial crisis, restrictions and other financ
Slide 172: Every Second. Every Day.
IMG EVERY SECOND. EVERY DAY.