Total System Services — Q4 2018 Earnings Presentation
24 slides from Total System Services's earnings presentation, Jan 29, 2019
Slide 1: 2018 Fourth Quarter
2018 Fourth Quarter January 29, 2019 ©2019 Total System Services, Inc.® Proprietary. All rights reserved worldwide.
Slide 2: Forward-looking Statements
Forward-looking Statements This slide presentation and comments made by management contain forward-looking statements including, among others, statements regarding the expected future operating results of TSYS. These statements are based on management’s current expectations and assumptions and are s
Slide 3: Use of Non-GAAP Financial Measures
Use of Non-GAAP Financial Measures This slide presentation and comments made by management contain certain non-GAAP financial measures determined by methods other than in accordance with generally accepted accounting principles. Such non-GAAP financial measures include the following: net revenue, op
Slide 4: M. Troy Woods
M. Troy Woods Chairman, President & Chief Executive Officer ©2019 Total System Services, Inc.® Proprietary. All rights reserved worldwide.
Slide 5: Paul Todd
Paul Todd Chief Financial Officer ©2019 Total System Services, Inc.® Proprietary. All rights reserved worldwide.
Slide 6: Consolidated Selected Financial Highlights
Consolidated Selected Financial Highlights (in thousands, except per share data) 4th Qtr 4th Qtr Percent YTD YTD Percent 2018 2017 Change 2018 2017 Change $1,018,090 $1,273,289 (20.0%) Total Revenues $4,028,211 $4,927,965 (18.3%) 959,261 870,613 10.2 Net Revenue(1) 3,815,900 3,400,332 12.2 346,022 2
Slide 7: Consolidated Highlights
Consolidated Highlights 4th Quarter Net Revenue by Segment(1)(2) ➜ Record net revenue and adjusted Consumer Solutions Issuer Solutions segment operating income for 2018 21% 44% ➜ Strong organic net revenue growth ➜ Purchased 2.0 million shares for $171.9 million Merchant Solutions 35% Consolidated N
Slide 8: Issuer Solutions Segment Highlights
Issuer Solutions Segment Highlights Traditional Accounts on File YOY Growth % (in millions) 614.0 ➜ Record net revenue for the quarter and the 578.6 588.9 594.4 571.9 year ➜ Record traditional accounts on file and transaction volume ➜ Solid pipeline of new business and product expansion 9.6% 8.7% 8.
Slide 9: Merchant Solutions Segment Highlights
Merchant Solutions Segment Highlights Segment Net Revenue per Transaction YOY Growth % ➜ Double digit organic net revenue growth for 2018 $0.231 $0.237 $0.231 $0.226 $0.223 ➜ Record 2018 adjusted segment operating income ➜ 2018 Margin up 54 BPS over 2017 2.1% 2.6% 2.4% 1.0% (3.8%) 4Q17 1Q18 2Q18 3Q1
Slide 10: Consumer Solutions Segment Highlights
Consumer Solutions Segment Highlights Gross Dollar Volume YOY Growth % ($ in billions) $9.7 ➜ Extended Wal-Mart and other key distribution agreements $8.3 $8.4 $8.1 ➜ Over $34 billion of gross dollar volume in 2018 $7.6 ➜ Over $800 million of net revenue in 2018 15.2% 0.9% 9.6% 11.2% 10.6% 4Q17 1Q18
Slide 11: Adjusted Segment Operating Margin
Adjusted Segment Operating Margin Three Months Ended December 31, 2018 Adjusted Segment Segment Net Adjusted Segment Operating Income Revenue Operating Margin (in thousands) Issuer Solutions $151,804 $439,255 34.6% Merchant Solutions 124,213 334,617 37.1% Consumer Solutions 44,384 199,839 22.2% Inte
Slide 12: Adjusted Segment Operating Margin
Adjusted Segment Operating Margin Twelve Months Ended December 31, 2018 Adjusted Segment Segment Net Adjusted Segment Operating Income Revenue Operating Margin (in thousands) Issuer Solutions $608,392 $1,718,177 35.4% Merchant Solutions 484,197 1,344,718 36.0% Consumer Solutions 193,472 806,430 24.0
Slide 13: 2019 Guidance
2019 Guidance* Range (in millions, except per share data) Range Percent Change Revenue: Total revenues (GAAP) $4,190 to $4,290 4% to 6% Net revenue(1) (non-GAAP) $3,990 to $4,090 5% to 7% Earnings per share: Diluted EPS (GAAP) $3.48 to $3.63 11% to 16% Adjusted diluted EPS attributable to TSYS commo
Slide 14: Q&A
Q&A ©2019 Total System Services, Inc.® Proprietary. All rights reserved worldwide.
Slide 15: Thank You
Thank You ©2019 Total System Services, Inc.® Proprietary. All rights reserved worldwide.
Slide 16: Appendix
Appendix ©2019 Total System Services, Inc.® Proprietary. All rights reserved worldwide.
Slide 17: Appendix: Accounts on File Portfolio Summary
Appendix: Accounts on File Portfolio Summary (in millions) December December % December September % 2018 2017 Change 2018 2018 Change Consumer 514.6 481.3 6.9 514.6 499.3 3.1 Commercial 57.8 54.2 6.5 57.8 55.6 4.0 Other 41.6 36.4 14.1 41.6 39.5 5.2 Traditional AOF 614.0 571.9 7.4 614.0 594.4 3.3 Pre
Slide 18: Net Revenue, Adjusted EBITDA and Adjusted Diluted EPS
Net Revenue, Adjusted EBITDA and Adjusted Diluted EPS Appendix: Non-GAAP Items • Net revenue is defined as total revenues less reimbursable items (such as postage), as well as, merchant acquiring interchange and assessment fees charged by the card associations or payment networks that are recorded b
Slide 19: Net Revenue
Net Revenue Appendix: Non-GAAP Reconciliation (in thousands) Three Months Ended Twelve Months Ended 12/31/18 12/31/17 12/31/18 12/31/17 $1,018,090 $1,273,289 Total revenues $4,028,211 $4,927,965 Less: reimbursable items, interchange and payment 58,829 402,676 network fees 212,311 1,527,633 $959,261
Slide 20: Constant Currency Total Revenues and Net Revenue
Constant Currency Total Revenues and Net Revenue Appendix: Non-GAAP Reconciliation Twelve Months (in thousands) Three Months Ended Ended Percentage Percentage 12/31/18 12/31/17 Change 12/31/18 12/31/17 Change Consolidated: Total revenues (GAAP) $1,018,090 $1,273,289 (20.0%) $4,028,211 $4,927,965 (18
Slide 21: Adjusted EBITDA
Adjusted EBITDA Appendix: Non-GAAP Reconciliation Three Months Ended Twelve Months Ended (in thousands) 12/31/18 12/31/17 12/31/18 12/31/17 Net income (GAAP) (a) $136,420 $243,871 $577,917 $592,216 Adjust for: Less: Equity in income of equity investments (9,843) (9,613) (45,156) (40,532) Less: Incom
Slide 22: Adjusted Diluted EPS
Adjusted Diluted EPS Appendix: Non-GAAP Reconciliation (in thousands, except per share data) Three Months Ended Twelve Months Ended 12/31/18 12/31/17 12/31/18 12/31/17 Net income attributable to TSYS common $136,420 $242,208 $576,656 $586,185 shareholders: (GAAP) (a) Adjust for: Add: Acquisition int
Slide 23: 2019 Guidance
2019 Guidance* (in millions, except per share data) Range Range Percent Change Total revenues (GAAP) $4,190 to $4,290 4% to 6% Less: reimbursable items, interchange and payment network fees 200 to 200 Net revenue (non-GAAP) $3,990 to $4,090 5% to 7% Diluted EPS (GAAP) $3.48 to $3.63 11% to 16% Acqui
Slide 24: Appendix: 2019 Guidance Assumptions
Appendix: 2019 Guidance Assumptions The guidance assumes: • There will be no significant movements in the London Interbank Offered Rate; • There will be no additional significant movement in foreign currency exchange rates related to TSYS’ business; • TSYS will not incur significant expenses associa
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