Aci Worldwide, Inc. · NASDAQ:ACIW
Aci Worldwide — Investor Day (March 2008)
104 slides from Aci Worldwide's investor day presentation, Mar 10, 2008
Slide 1: ACI Investor Day New York City March 10, 2008
ACI Investor Day New York City March 10, 2008
Slide 2: Safe Harbor for Forward-Looking Statements
2 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-lo
Slide 3: Agenda
3 Agenda • Phil Heasley - Opening Remarks • Bob Koscheski - Marketing • Charlie Linberg - IBM Alliance • Mark Vipond - Product Update • Steve Wright - EMEA Review • Jeremy Wilmot - Asia-Pacific Review • Ralph Dangelmaier - Americas Review • Scott Behrens - Finance Review • Q&A
Slide 4: Welcome Phil Heasley, CEO
Welcome Phil Heasley, CEO
Slide 5: ACI Worldwide Management Team
ACI Worldwide Management Team Charlie Linberg IBM Alliance Executive Dennis Byr nes SVP and General Counsel Mar k Vipond President Global Product Dave Morem SVP Customer Operations Bobby Koscheski VP Marketing Phil Heasley Ron Totaro SVP Office of the COO President and CEO Ralph Dangelmaier Presiden
Slide 6: Strategic Goals
6 Strategic Goals • Enhance the ACI brand • Grow the organic business across products and geographies • Penetrate underserved markets • Expand our On Demand business • Improve the efficiency of our operations • Retain, attract and develop high potential and high performing employees
Slide 7: Global Marketing
Global Marketing Bobby Koscheski, VP, Global Marketing
Slide 8: Topics
8 Topics • Business overview • Payments market overview • ACI-IBM alliance market opportunity
Slide 9: The Global Leader in Payment Solutions
9 The Global Leader in Payment Solutions
Slide 10: Global Footprint
10 Global Footprint Strategic Centers Regional Sales Office Distributors/Sales Agents Country with ACI customers Americas 1284 Employees 428 Customers 18 Countries Asia/Pacific 296 Employees 159 Customers 14 Countries EMEA 615 Employees 234 Customers 54 Countries
Slide 11: Serving the Largest Banks in the World
11 Serving the Largest Banks in the World
Slide 12: Customers by Segment and Solution
12 0 50 100 150 200 250 300 350 400 450 Customers Finance Retail Processors Other 0 50 100 150 200 250 300 350 400 450 500 Customers Retail Payment Engines Wholesale Payment Engines/EB Risk Mgt ACI has a diversified customer base ... but clearly strongest in banking Significant cross-selling opportu
Slide 13: ACI is the Clear Gold Standard for Payments
13 ACI is the Clear Gold Standard for Payments Top 500 Banks – Retail Payment Hubs 25% Outsource 41% Software Vendors 34% In-house Developed ACI • Plus 47 of the top 500 banks running ACI Proactive Risk Manager for fraud detection • Plus 14 of the top 25 U.S. banks running the ACI Money Transfer Sys
Slide 14: Where ACI Plays in Payments
14 Where ACI Plays in Payments CONSUMER BUS / GOV BUS / GOV CONSUMER PAYEE PAYER Leader Contender Participant Absent ACH, Wire, Cards, Trade ACH, Wire Person to Person, Remittance Credit, Debit, ACH, Wire =56% 44% $513 Trillion Electronic Check and Cash (ATM) 56% 44% 59% 41% $376 Trillion $57 Trilli
Slide 15: Electronic Transactions – Growth by Region
15 Global Electronic Transactions (bn per year) 1999 2004 2009 World 117.4 209.8 384.2 Nafta 44.9 78.3 140.0 South America 3.8 12.5 24.7 Western Europe 50.2 74.8 111.9 Eastern Europe 3.8 9.7 25.8 Asia Pacific 12.9 31.1 74.8 Middle East/Africa 1.8 3.3 6.9 Electronic Transactions – Growth by Region 12
Slide 16: ACI Core Markets for Payments
16 73% of electronic payment volumes are concentrated within 10 countries Source: ACI 2006 Global Market Forecast ACI Core Markets for Payments
Slide 17: Top Countries for Payments: 2007 Snapshot
17 Top 10 Countries for Payments: 2007 Snapshot 11.95% 9.73% 15.93% 7.41% 31.63% 4.42% 13.87% 5.86% 7.10% 5.69% Growth Rate 2000-2007 Refresh Upsell/Xsell 100% 8 8B 9. Australia Penetrate 33% 9 10B 8. South Korea Refresh Upsell/Xsell 86% 7 12B 7. Canada Penetrate 33% 15 14B 6. China Penetrate 9% 33
Slide 18: Top Countries for Payments: Projections by 2014
18 Top 10 Countries for Payments: Projections by 2014 5B 5B 12B 14B 10B 20B 16B 23B 14B 95B 2007 Volume 15B 17B 23B 26B 29B 33B 40B 47B 65B 189B 2014 Volume #12 #14 #7 #5 #8 #3 #4 #2 #6 #1 2007 Rank 16% 19% 9% 8% 17% 7% 14% 10% 25% 10% Growth Rate +5 9. Mexico -1 8. Canada -2 7. France +2 6. South K
Slide 19: ACI and IBM System z Market Coverage
19 Mega Large Medium Small Banks Running IBM System z Top 2000 Banks Worldwide • 164 Mega Banks (>$100BB) • 361 Large Banks (>$25BB) • 506 Medium Banks (>$10BB) • 969 “Small” Banks (>$3BB) ACI and IBM System z Market Coverage Banks Running ACI Payment Engines (Retail and Wholesale) Banks Running Pay
Slide 20: ACI Market Segmentation
20 Mega Large Medium Small ACI Market Segmentation 6. Banks who do not run ACI Payment Engines and do not have IBM System z. 6 Key Market Segments (Attractiveness) 2 2. Banks running ACI Payment Engines who also have IBM System z but no payment workload running on it. 4. Banks running ACI Payment En
Slide 21: ACI Deal Flow
21 ACI Deal Flow Mega Large Medium Small.
Slide 22: ACI-IBM Market Coverage Summary
22 ACI-IBM Market Coverage Summary Mega Large Medium Small Banks running IBM System z (Within the Hashed Blue Triangle) ~1200 using System z for Banking Top 2000 Banks Worldwide (Within the Black Triangle) 164 Mega Banks (>$100BB) 361 Large Banks (>$25BB) 506 Medium banks (>$10BB) 969 “Small” Banks
Slide 23: IBM Alliance
IBM Alliance Charlie Linberg, Alliance Executive and CTO
Slide 24: Topics
24 Topics • Alliance overview • What it means to ACI and IBM • How our customers will benefit • Alliance organization and governance
Slide 25: Alliance Overview
25 Alliance Overview • ACI enhancing its wholesale and retail payment solutions to take full advantage of IBM hardware, software and services • ACI and IBM dedicating a worldwide team of sales and technical specialists to sell combined solutions on System z • The formation of a "migration factory" t
Slide 26: What this Means to ACI
26 What this Means to ACI • Accelerates and strengthens ACI's strategy to deliver optimized end-to-end payments solutions – System z provides an ideal platform for the realization of our IT consolidation / payments convergence strategy – Proximity to core systems will enable more robust, efficient i
Slide 27: What this Means to IBM
27 What this Means to IBM • Compelling combined solution will drive new workloads to System z • ACI leverage of IBM middleware will facilitate new software sales (e.g., DB2, MQSeries, WebSphere, Tivoli) • Migration factory will increase demand for IBM services • Better positions IBM to lead strategi
Slide 28: How Customers Benefit
28 How Customers Benefit • Comprehensive payments solution that reduces cost and complexity – Eliminates redundant payment services and data – Pre-packaged integration relieves the customer’s burden of integrating point solutions – Leverages existing operating environment – Reduces power consumption
Slide 29: Governance – Structure and Hierarchy
29 Governance – Structure and Hierarchy Senior Alliance Executive William Zeitler Alliance Management Council • Alliance Executives • Sales Executives • Development Executives • Migration Executives • Finance Executives Senior Alliance Executive Phil Heasley Alliance Management Team Leaders DC S&MC
Slide 30: Alliance Operating Tenets
30 Alliance Operating Tenets • All customer engagement is guided by the alliance – Co-marketing products, solutions and services – Joint account planning and selling – Coordinated delivery and support • Preferred platform is System z – Leverage best-of-breed middleware – Take advantage of unique har
Slide 31: Product Update
Product Update Mark Vipond, President, Global Product
Slide 32: Agenda
32 Agenda • ACI product history • ACI product assets • Market needs • Moving to a payments hub
Slide 33: ACI Product History
33 ACI Product History 1975 1982 1985 1990 1995 2000 2005 2008 BASE24-atm TRANS24 Payments Manager ICE Smart Chip Manager Proactive Risk Manager OCM24 MTS ASx Trade Finance Enterprise Banker ON/2 OpeN/2 Retail Banking Wholesale Banking Risk Management Tools & Infrastructure BASE24-eps Network Expres
Slide 34: ACI Product Assets
34 ACI Product Assets ACI Global Retail Payments • Payment Hubs – BASE24 – BASE24-eps • Payment Settlement and Card Management – Card Management • ACI Payments Manager • ACI Smart Chip Manager – Payment Settlement • ACI Payments Manager – Dispute Management • ACI Dispute Management System ACI Global
Slide 35: Market Needs
35 Market Needs • Productivity and efficiency – Convergence of payment system silos – Reduced complexity – Cost elimination • Enhancement of services – New channels (e.g., mobile payments) – Chip technology – High-availability attributes • Comprehensive solutions in lieu of products • Integrated/ent
Slide 36: Global Payment Solutions Product Strategy
Enrollments ACI Infrastructure & Tools Backup and Recovery Activity Monitoring Communications Testing & Simulation Web Services Tools Global Payment Solutions Product Strategy Retail Payments Hub Endpoint Devices; Rules for Authorization, Routing, etc. Data Management Monitoring, Static Data and Fee
Slide 37: EMEA Channel
EMEA Channel Steve Wright, President, EMEA
Slide 38: Topics
38 Topics • EMEA – ACI business model – The EMEA market – EMEA customers • EMEA payments – Growth in electronic payments – Faster Payments – SEPA • Country profiles – Key markets • Summary
Slide 39: ACI's Proposition in Europe
39 ACI’s Proposition in Europe • VISA EU: running the largest transaction processing network in Europe • Emporiki Bank: creating opportunities in issuing cards with EMV chips • BNP Paribas: identifying and preventing fraud in debit accounts • Fortis Bank: creating a payments hub for wholesale paymen
Slide 40: ACI in EMEA: Europe
40 ACI in EMEA : Europe >10 5-9 2-4 1 Number of Customers 171 total customers
Slide 41: ACI in EMEA: Africa and Middle East
41 ACI in EMEA : Africa and Middle East >10 5-9 2-4 1 Number of Customers 63 total customers
Slide 42: EMEA – Three Discrete Sectors
42 EMEA – Three Discrete Sectors • Developed market – EU + Norway, Switzerland – Established (debit) card market – Established wholesale payment infrastructure • Emerging market – Eastern Europe, Middle East, Russia, North Africa – Rapidly growing volumes – Less established wholesale payment systems
Slide 43: Customers by Segment and Solution
43 Customers by Segment and Solution 0 20 40 60 80 100 120 140 Customers Finance Retail Processors Other 0 20 40 60 80 100 120 140 160 Customers Retail Payment Engines Wholesale Payment Engines/EB Risk Mgt As of 12/31/07
Slide 44: Electronic Transactions – Growth by Region
44 Global Electronic Transactions (bn per year) 1999 2004 2009 World 117.4 209.8 384.2 Nafta 44.9 78.3 140.0 South America 3.8 12.5 24.7 Western Europe 50.2 74.8 111.9 Eastern Europe 3.8 9.7 25.8 Asia Pacific 12.9 31.1 74.8 Middle East/Africa 1.8 3.3 6.9 Electronic Transactions – Growth by Region 12
Slide 45: Convergence: Faster Payments in UK
45 Convergence: Faster Payments in UK Back Office Applications Real Time Available Funds ACI MTS Central Infrastructure LINK/Voca Channel System ISCD Outbound Payments: Single Immediate Diarised Standing Order File Journal Extracts Inbound Payments: Single Transactions Authorisation Host Security Mo
Slide 46: Eurozone Payment Systems
46 Eurozone Payment Systems UK: Maestro / VISA Belgium/Lux: MrCash / Bancontact Finland: Pankikkoritti France: CB Ireland Laser Italy: Bancomat Netherlands: PIN Greece: Maestro / Electron Austria: Maestro / Bankomat Germany: ecCash Portugal: Multibanco / Electron Spain: 4B / CECA / ServiRed (Electro
Slide 47: Single Euro Payment Area (SEPA)
47 Single Euro Payment Area (SEPA) • SEPA spend by Europe's banks to top EUR8 billion • The top 100 banks in Europe are projected to spend more than EUR3 billion to comply with EU requirements for a SEPA, according to a survey conducted by Accenture. Researchers questioned 47 senior payments experts
Slide 48: Key Territories: UK and Ireland
48 Key Territories: UK and Ireland • 33 customers • Top five banks – Barclays, RBS, HSBC, HBOS, LTSB • Key processors – First Data Europe and Wincor • Visa EU • Top three Irish banks – AIB, Bank of Ireland, Den Danske • Top independent ATM deployer – VocaLink – Over 30,000 ATMs • Significant player
Slide 49: Key Territories: France
49 Key Territories: France • 10 customers • Key banks and processors – Cedicam – ING Direct – BNP Paribas – Societe Generale – Natixis – Europay France • Key market drivers – SEPA has driven payment transformation in card market – Replacement of legacy systems and the need to go international – Oppo
Slide 50: Key Territories: Germanic
50 Key Territories: Germanic • 26 customers • Key customers – PLUSCard – Commerzbank – UBS – Credit Suisse – First Data Deutschland • Market drivers – SEPA – PCI – EMV – Consolidation – Greater realisation of fraud issues
Slide 51: Key Territories: Iberia (inc. N Africa)
51 Key Territories: Iberia (inc. N Africa) • 13 customers • Key customers – El Corte Ingles – Sistema 4B – Deutsche Bank – ING Direct – Societe Monetique Tunisie • Market drivers – SEPA – Processor consolidation – EMV – Fraud awareness
Slide 52: Key Territories: Italy
52 Key Territories: Italy • 10 customers • Key customers – Unicredit – SIA/SSB – Seceti – Setefi – Banca Sella – Bank of Valetta (Malta) • Market drivers – SEPA – Aggressive M&A – Liberalisation of national market – Fraud awareness – EMV
Slide 53: Key Territories: Benelux
53 Key Territories: Benelux • 7 customers • Key customers – ING – ABN/Amro – Rabobank – Fortis – Equens • Market drivers – SEPA – EMV – Fraud – Aggressive M&A – Consolidation / centralisation
Slide 54: Key Territories: Eastern Europe
54 Key Territories: Eastern Europe • Key customers – Polcard, BGZ (Poland) – First Data (Slovakia) – Global Payments Europe (Czech Republic) – GBC, Erste, OTP (Hungary) – Emporiki, NBG (Greece) • Market drivers – Aggressive M&A – EMV – SEPA (Slovenia has joined Euro) – Fraud – High growth in transac
Slide 55: Key Territories: Russia
55 Key Territories: Russia • 14 customers • Key customers – Gazprombank – Bank VTB – AK Bars Bank – Impexbank – Russian Agricultural Bank • Market drivers – Market potential – Positioning to exploit growth potential
Slide 56: Key Territories: Saudi Arabia
56 Key Territories: Saudi Arabia • 10 customers • Key customers – NCB – Al Rajhi – Saudi Hollandi Bank – Banque Saudi Fransi • Market drivers – Greenfield banks – Oil $ – Innovation at branch and self-service – Wholesale bank transformation – SPAN2 project – Chip card issuance (EMV)
Slide 57: Key Territories: Middle East
57 Key Territories: Middle East • 30 customers • Key customers – EBI United Arab Emirates – OIB Oman – QNB Qatar – BLOM Bank SAL Lebanon – MCB Pakistan – KNet Kuwait • Market drivers – Oil $ – Innovation at branch and self-service – Chip card issuance
Slide 58: Key Territories: Africa
58 Key Territories: Africa • 17 customers • Key customers – ABSA, Standard Bank, FNB South Africa – Unity Bank, Zenith Bank Nigeria – SBM Mauritius – Dashen Bank Ethiopia • Key drivers – Compliance software (AML) – Infrastructure (switching) – Innovative payment systems (mobile) – EMV (South Africa)
Slide 59: EMEA Summary
59 EMEA Summary • Innovative market for ACI solutions – Transaction processing – Wholesale and retail payments – Back office functions – Risk • ACI business model in EMEA focuses on local marketing and support • Convergence in retail and wholesale payments – Faster Payments – SEPA • Strong position
Slide 60: Asia-Pacific Channel
Asia-Pacific Channel Jeremy Wilmot, President, Asia-Pacific
Slide 61: Topics
61 • Territory overview • Market trends and opportunities • Strategies • Summary Topics
Slide 62: ACI in Asia Pacific
62 ACI in Asia Pacific • North Asia • Greater China • India • ASEAN • Pacific 15 159 total customers
Slide 63: Electronic Transactions – Growth by Region
63 Global Electronic Transactions (bn per year) 1999 2004 2009 World 117.4 209.8 384.2 Nafta 44.9 78.3 140.0 South America 3.8 12.5 24.7 Western Europe 50.2 74.8 111.9 Eastern Europe 3.8 9.7 25.8 Asia Pacific 12.9 31.1 74.8 Middle East/Africa 1.8 3.3 6.9 Electronic Transactions – Growth by Region 12
Slide 64: Customers by Segment and Solution
64 0 20 40 60 80 100 120 Customers Finance Retail Processors Other 0 10 20 30 40 50 60 70 80 90 Customers Retail Payment Engines Wholesale Payment Engines/EB Risk Mgt Customers by Segment and Solution As of 12/31/07
Slide 65: ACI Market Share
65 • #1 retail payment engine in India • #1 retail payment engine in ASEAN • #1 retail payment engine in Pacific • #1 fraud detection in Greater China and Pacific • #1 credit card acquiring in South Korea • #1 corporate banking systems in Thailand and Singapore • Wholesale payment engine customers i
Slide 66: Market Trends and Drivers
66 Market Trends and Drivers • 4 billion people and growing • Export-driven economies • Risk management of high-volume and complex transactions • Wealth management opportunities • CHINDIA 10% growth • Asian Bank internationalization and regionalization • Emergence of Islamic banking • Increased regu
Slide 67: CHINDIA
67 CHINDIA • China: “One country, two systems” – 30,000 banks – Fragmented and regionalized payment system – Chinese National Advanced Payment System or “CNAPS” – China Union Pay or “CUP” – SAR of Hong Kong – Bank consolidation and internationalization • India – Strong focus on growing retail paymen
Slide 68: Opportunities
68 Opportunities • Size and growth of Chinese payments market • India growth of card-based payments • Export economies require trade finance and corporate products • Risk management of payments is a concern • Leverage IBM position and investment • Large growth of debit card usage expected in ASEAN a
Slide 69: Strategies
69 Strategies • Move to direct distribution model where appropriate • Use trade finance as the lead for corporate and wholesale sales • Transaction-based contracts • Grow services revenues profitably by leveraging low cost resource centers • Strengthen management team • Talent management focus
Slide 70: Asia-Pacific Summary
70 Asia-Pacific Summary • Open office in Shanghai, China • Establish direct operations in India (Mumbai) • Form close cooperation with IBM Japan • Strong sales performances in Australia and ASEAN • Strong sales performance in corporate/wholesale banking • Grow resource center in Malaysia to 50 emplo
Slide 71: Americas Channel
Americas Channel Ralph Dangelmaier, President, Americas
Slide 72: Topics
72 Topics • Territory overview • The market • Territory reviews • Strategies for success
Slide 73: ACI in the Americas
73 ACI in the Americas 307 29 32 17 40 428 total customers • Canada 29 • US 307 • Mexico 32 • Brazil 17 • Argentina 3 • Distributor Operations 40 3 As of 12/31/07
Slide 74: Customers by Segment and Solution
74 0 50 100 150 200 250 Customers Finance Retail Processors Other 0 50 100 150 200 250 Customers Retail Payment Engines Wholesale Payment Engines/EB Risk Mgt Americas has a diversified customer base Significant cross-selling opportunity Customers by Segment and Solution As of 12/31/07
Slide 75: Electronic Transactions – Growth by Region
75 Global Electronic Transactions (bn per year) 1999 2004 2009 World 117.4 209.8 384.2 Nafta 44.9 78.3 140.0 South America 3.8 12.5 24.7 Western Europe 50.2 74.8 111.9 Eastern Europe 3.8 9.7 25.8 Asia Pacific 12.9 31.1 74.8 Middle East/Africa 1.8 3.3 6.9 Electronic Transactions – Growth by Region 12
Slide 76: Market Trends and Drivers
76 Market Trends and Drivers • Continued desire to reduce costs and increase productivity – Need for end-to-end solutions – Need for platform and solutions convergence – Need to automate manual, cumbersome processes – ACI will drive customers to new releases to address these needs • Electronic payme
Slide 77: U.S. Market
77 U.S. Market • ACI is leading provider of enterprise electronic payment systems – Systems deployed in 24 of the top 25 banks, 33 of the top 100 retailers, major processors and switches • Market dynamics will create a migration from legacy solutions and processors to new solutions • Pressure on cos
Slide 78: Canada
78 Canada • ACI is leading provider of enterprise electronic payment systems • Market is moving to EMV – will create stress on legacy systems and opportunity for ACI Smart Chip Manager • Migration to IBM-based systems will create services and new licensing opportunities • Merchant retail segment yet
Slide 79: Emerging Latin America
79 Emerging Latin America • 21 countries, 535 million people, 60% unbanked • ATM penetration rates at 1/6 to 1/2 of U.S. • POS penetration rates at 1/30 to 1/10 of U.S. • Faster growth in electronic payments forecast Key opportunities: o Economic growth o Shift to electronic payments o Age of legacy
Slide 80: Brazil
80 Brazil • Market is dominated by in-house developed payment systems • ACI beginning to gain traction, particularly in fraud detection/prevention space • IBM relationship will be key to driving replacement of legacy technologies, representing a greenfield opportunity for ACI • ATM sharing and movem
Slide 81: ACI On Demand
81 ACI On Demand • ACI hosts image of its solutions on behalf of the customer • Expands market to those who lack internal IT sophistication or scale • Common theme for companies to look at solutions on-demand – Reduces customer costs while maintaining control – Results in faster deployment for the c
Slide 82: Key Strategies for the Americas
82 Key Strategies for the Americas • Selling the breadth of the ACI Payments Framework – Expanding penetration for retail payment hubs – Expanding penetration for wholesale payment hubs – Driving demand by leveraging the power of the IBM relationship • More focus on professional services • Growing o
Slide 83: Americas Summary
83 Americas Summary • Addressable market is over $2 billion per year • Electronic payments market has annual growth over 13% per year • ACI has less than 10% share across the geography • Focused strategies in place for 2008 to begin driving more growth Room to Run Significant market opportunities in
Slide 84: Financial Review
Financial Review Scott Behrens, Principal Financial Officer
Slide 85: Agenda
85 Agenda 1. ACIWW Business Model • Typical New Customer or Application Business Model (ILF / PUF) • Typical New Customer or Application Business Model (MLF) • Typical Renewal Business Model (MLF) 2. Select Trending of Financial Data • EBITDA (Adj.) & OFCF Trending • CY 2007 CY 2008 Capital Expendit
Slide 86: Typical New Customer or Application Business Model (ILF/PUF)
86 Typical New Customer or Application Business Model (ILF/PUF) Project Scoping 1 2 3 4 5 Years Detail Design High Level Design Development Integration / System Testing ~ 3 Months Implementation / User Acceptance Testing 2 4 6 8 10 Go Live! Implementation Project Life Cycle Deliver “Vanilla” Sys tem
Slide 87: Typical New Customer or Application Business Model (MLF)
87 Implementation Project Life Cycle Project Scoping 1 2 3 4 5 Years Detail Design High Level Design Development Integration / System Testing ~ 3 Months Implementation / User Acceptance Testing 2 4 6 8 10 Go Live! Deliver “Vanilla” Sys tem 90 Days Warranty “Enhanced Support” or “Normal Maintenance”
Slide 88: Typical Renewal Business Model (MLF)
88 Base24 EPS “Large” Customer Renewal Typical Renewal Business Model (MLF) 1 2 3 4 5 “Enhanced Support” or “Normal Maintenance” % Effort Years Capacity Ev ent Capacity Ev ent % Revenue % OFCF Post Go-Live Opportunities: • Additional Functionality • Additional Capacity • Additional Services • Upgrad
Slide 89: EBITDA (Adj.) & OFCF Trending
89 EBITDA (Adj.) & OFCF Trending *2008 Guidance provided on February 19th, 2008 EBITDA (Adj.) - OFCF Trending 63.2 72.8 39.7 65.0 52.5 45.9 39.3 ~ $65MM Guidance 0 10 20 30 40 50 60 70 80 CY 2005 CY 2006 CY 2007 CY 2008* $'s in Millions EBITDA (Adj.) OFCF CY 2005 CY 2006 CY 2007 Net cash flows from
Slide 90: CY 2007 CY 2008 Capital Expenditures Walk
90 CY 2007 CY 2008 Capital Expenditures Walk 30MM 25MM 7.7 CY 2007 Capex 5.6 Property & Equipment Softw are & Distribution Rights New Omaha Facility Investments* 20MM 15MM 10MM 5MM CY 2008 Capex 1.3 23.3 * Know ledge Center Support, Collaborative Tool Set, ACM, Contracting Process, etc 3.7 5.0
Slide 91: Deferred Revenue Metrics & Trending
91 Deferred Revenue Metrics & Trending 15,000 30,000 45,000 60,000 75,000 90,000 105,000 120,000 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 CY06 CY07 Revenue Total Deferred Revenue (ST) Total Deferred Revenue (LT) Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Revenue 89,833 84,764 88,230 93,289 89,948 98,109 84,872 101,282 Total Deferred R
Slide 92: P&L Margin Trending
92 P&L Margin Trending Software - Maintenance & Services Margins (4pt Simple Moving Average) 50% 55% 60% 65% 70% 75% 80% 85% 90% Q1 CY06 Q2 CY06 Q3 CY06 Q4 CY06 Q1 CY07 Q2 CY07 Q3 CY07 Q4 CY07 Software Margin Maintenance & Services Margin Software Margin (SMA) Maintenance & Services Margin (SMA)
Slide 93: P&L Margin Trending
93 P&L Margin Trending *G&A Adjusted to exclude Amortization of Acquisition Intangibles + Non-Recurring Items Percentage of Total Revenue (4pt Simple Moving Average) 10% 12% 14% 16% 18% 20% 22% Q1 CY06 Q2 CY06 Q3 CY06 Q4 CY06 Q1 CY07 Q2 CY07 Q3 CY07 Q4 CY07 Research & Development Selling & Marketing
Slide 94: P&L Margin Trending
94 P&L Margin Trending ($ in millions) Q1 CY05 Q2 CY05 Q3 CY05 Q4 CY05 CY 2005 Q1 CY06 Q2 CY06 Q3 CY06 Q4 CY06 CY 2006 Q1 CY07 Q2 CY07 Q3 CY07 Q4 CY07 CY 2007 Software License Fees 43.0 37.7 40.0 43.4 164.0 47.7 42.0 42.6 41.2 173.4 38.5 40.9 28.9 46.3 154.6 Maintenance 22.6 24.9 23.8 25.3 96.7 24.7
Slide 95: Disciplined Capital Allocation
95 ACI Confidential and Proprietary Disciplined Capital Allocation Objective: Allocate capital to optimize shareholder returns Organic Business Growth Acquisition Share Repurchase Program • Internal Investments – Geographic build out – Product development – Cost effectiveness • Capital expenditures
Slide 96: Historical Capital Allocation
96 Historical Capital Allocation $9 $8 $47 $30 $46 $37 $169 $11 $90 $65 $6 $208 $0 $30 $60 $90 $120 $150 $180 $210 $240 CY2005 CY2006 CY2007 CapEx Share Repurchase Acquisitions Operat ing Cash Flow (Pre-CapEx) Capital deployed to support growth strategy and enhance shareholder returns (dollars in mi
Slide 97: Historical Acquisition Expenditures
97 1 1 Historical Acquisition Expenditures Name Time Enterprise Value Geography Rationale S2 Systems Jul '05 $37 U.S., EMEA, AP • Payments software • Consolidation Electronic Payment Systems AG May '06 30 Germany, Romania • Payments software • Germanic market • Offshore development P&H Solutions Aug
Slide 98: Non-GAAP Financial Measures
98 Non-GAAP Financial Measures • This presentation includes operating free cash flow and backlog estimates. ACI is presenting these non-GAAP guidance measures to provide more transparency to its earnings, focusing on operations before selected non-cash items, operating free cash flow and backlog. •
Slide 99: Non-GAAP Financial Measures
99 Non-GAAP Financial Measures • ACI also includes backlog estimates which are 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 100: Non-GAAP Financial Measures
100 Non-GAAP Financial Measures • This presentation includes non-GAAP information: EBITDA, EBITDA Adjusted and Adjusted General and Administrative Expense. EBITDA is defined as net income before interest, taxes, depreciation and amortization. EBITDA Adjusted is EBITDA less non-recurring items that a
Slide 101: Forward-Looking Statements
101 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 “b
Slide 102: Forward-Looking Statements
102 Forward-Looking Statements • Expectations relating to future product development strategies, the ability of the Company to address market and customer needs, the growth of resource centers and technical headcount investment and the ability of the Company to gain traction in the fraud detection /
Slide 103: Forward-Looking Statements
103 Forward-Looking Statements • The risks identified in the Company’s filings with the Securities and Exchange Commission include: • Risks associated with the restatement of the Company’s financial statements; • Risks associated with the Company’s performance which could be materially adversely aff
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