Bread Financial Holdings, Inc. · NYSE:BFH
Bread Financial — Alliance Data Systems — Q1 2017 Earnings Presentation
15 slides from Bread Financial's earnings presentation, Apr 20, 2017
Slide 1: Alliance Data Q1 2017 Results
Alliance Data NYSE: ADS Q1, 2017 ResultsApril 20, 2017 Exhibit 99.2
Slide 2: 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 3: Agenda
Agenda Speakers: Ed Heffernan President and CEO Charles Horn EVP and CFO First Quarter 2017 Consolidated ResultsSegment ResultsFull Year 2017 Outlook 1 2
Slide 4: First Quarter 2017 Consolidated Results
First Quarter 2017 Consolidated Results(MM, except per share) Quarter Ended March 31, 2017 2016 % Change Revenue $ 1,879 $ 1,676 +12% Net Income $ 146 $ 159 -8% EPS $ 2.58 $ 2.35 +10% Core EPS $ 3.91 $ 3.84 +2% Adjusted EBITDA $ 501 $ 493 +2% Adjusted EBITDA, net $ 440 $ 440 —% Diluted shares 56.7 6
Slide 5: LoyaltyOne
LoyaltyOne® (MM) Soft quarter for AIR MILES® operating results, but adjustments to program are on track. Collector activity and engagement are improving. BrandLoyalty’s results down for the quarter due to program timing differences between years. Quarter Ended March 31, 2017 2016 % Change Revenue $
Slide 6: Epsilon
Epsilon® (MM) Best organic revenue growth since fourth quarter of 2015.Cost controls working.Conversant Agency (referred to as Conversant Audience going forward) stabilizing. Quarter Ended March 31, 2017 2016 % Change Revenue $ 529 $ 493 +7% Adjusted EBITDA $ 85 $ 81 +5% Adjusted EBITDA % 16% 16% —%
Slide 7: Card Services
Card Services (MM) Quarter Ended March 31, 2017 2016 % Change Revenue $ 1,023 $ 836 +22% Operating expenses 316 308 +3% Provision for loan losses 315 172 +83% Funding costs 61 48 +29% Adjusted EBITDA, net $ 331 $ 308 +8% Adjusted EBITDA, net % 32% 37% -5% 5 Revenue growth aided by 80 bps increase in
Slide 8: Card Services key metrics and loan loss reserve
Card Services (MM) Allowance for loan loss reserve is 6.6 percent of $15.4 billion in reservable card receivables at March 31.Equivalent to 12 months forward coverageDelinquency rate of 4.8 percent consistent with guidance. Quarter Ended March 31, Key metrics: 2017 2016 Change Credit sales $ 6,579 $
Slide 9: First Quarter 2017 Consolidated: +12 percent revenue and +2 percent core EPS growth
9 First Quarter 2017 Consolidated: +12 percent revenue and +2 percent core EPS growthGuidance was for high-single-digit topline/flat core EPS growthBeginning to see more balanceCard Services growth continues to be strongEpsilon’s topline growth of +7 percent Strongest organic growth since 2015Loya
Slide 10: Full Year 2017 Outlook: Epsilon and LoyaltyOne
10 Epsilon:Strong first quarter: +7 percent topline; +5 percent adjusted EBITDA growthFull year guidance remains unchanged:$2.24 billion in revenue, +4 percent$500 million in adjusted EBITDA, +4 percentTechnology platform (25 percent of Epsilon revenue)Goal: move from negative revenue growth to flat
Slide 11: Full Year 2017 Outlook: Card Services
Full Year 2017 Outlook Card Services:Card receivables growth of $2.4 billion, +15 percentPipeline robust: expect another $2 billion vintageGross yields stable; 20 bps of operating leverage (operating expenses/average receivables) Credit normalization on-trackDelinquencies tracking to wedge:Q1: 50 bp
Slide 12: Delinquency Wedge
Delinquency Wedge Delinquency Rates 53% 5.0% an = 2017 Es —2016 45% 2015 ea —2014 3.5% Delinquency rates are tracking as expected which Management believes will result in a flat net loss rate for 2018 as compared to 2017 3.0% Jan Feb Mar Apr = May-Jun. Jul’ «= Aug. «Sep, Oct’ «Ss Nove. a1
Slide 13: 2017 Outlook Consolidated Guidance
2017 Outlook Consolidated Guidance Revenue $7.7 bn, ~5 percent Core EPS $18.50, ~10 percent 2017 Growth Rates Q1 Q2 Q3 Q4 Guidance Actual Guidance Revenue High-single +12% Mid-single Mid-single Low-teens Core EPS Flat +2% Flat Mid-teens Mid-teens 2018 “Slingshot” on-track 12
Slide 14: Financial Measures
13 13 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 EB
Slide 15: Q & A
Q & A 14
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