Fidelity National Information Services, Inc. · NYSE:FIS
Fidelity National Information Services — Q2 2020 Earnings Presentation
27 slides from Fidelity National Information Services's earnings presentation, Aug 4, 2020
Slide 1: Second Quarter 2020 Earnings Call
SECOND QUARTER 2020 EARNINGS CALL August 04, 2020
Slide 2: Speakers
SPEAKERS COVID & BUSINESS Gary Norcross STRATEGY Chairman, President and Chief Executive Officer UPDATE 2Q 2020 Woody Woodall RESULTS Chief Financial Officer
Slide 3: Disclosures
DISCLOSURES Forward-looking Statements Our discussions today, including this presentation and any comments made by management, contain “forward-looking statements” within the meaning of the U.S. federal securities laws. Any statements that refer to future events or circumstances, including our futur
Slide 4: COVID Update
COVID UPDATE
Slide 5: FIS Response to COVID-19
SUPPORTING OUR COLLEAGUES, CLIENTS AND COMMUNITIES COLLEAGUES: Remote Operations: SAFETY FIRST 1 Enabling work from home • Focusing on well-being of our colleagues • Fostering a culture of innovation and growth • Implemented COVID pay and illness benefits • Quickly moved from approximately 10% to FI
Slide 6: Business Update
BUSINESS UPDATE
Slide 7: Exceptional Performance in Trying Times
EXCEPTIONAL PERFORMANCE IN TRYING TIMES 1. Excludes 6%, or ~$60 million headwind impacting processing revenue from the U.S. tax filing deadline shift 7 For a description of non-GAAP measures and a reconciliation of GAAP to non-GAAP measures, see Appendix.
Slide 8: One Year Ago: Advancing the Way the World Pays, Banks and Invests
ONE YEAR AGO Pay Merchant Banking Capital Market Solutions Solutions Solutions WHAT WE DO WHAT WE DO WHAT WE DO Bank We provide a unique Our solutions allow We facilitate the Invest capability to power people to borrow, movement, global omni- save, pay and management commerce invest and growth of mo
Slide 9: Integration Update
INTEGRATION UPDATE Optimized Signed First 2 Signed First First Prepaid Accelerated Began Worldpay Debit Bank Referral Premium Cross-sell Innovation with Implementation DELIVERING Joins FIS Routing Agreements Payback Client Win FIS Ventures of Site Strategy ON OUR TARGETS July 31 Q3 2019 Q4 2019 Q1 2
Slide 10: Journey to the Future
JOURNEY TO THE FUTURE Today 2019 Global Leader Upgraded and in Digital 2018 Integrated Payments, Launched One enterprise toolsets Banking and 2017 FIS approach to Investments Accelerated client delivery and investment in service 2015 modular and Embarked componentized on network architecture for mod
Slide 11: Corporate Strategy
CORPORATE STRATEGY We have a blueprint for FIS’ continued success PIVOT TO GROWTH I II III INVEST IN STRATEGICALLY DRIVE EFFICIENCY TECHNOLOGY AND ALLOCATE AND SCALABILITY INNOVATION CAPITAL ACCELERATE MAXIMIZE EXPAND REVENUE SHAREHOLDER MARGINS GROWTH VALUE WE CONTINUE TO STRENGTHEN OUR EXECUTION C
Slide 12: Our Clients Are Responding
OUR CLIENTS ARE RESPONDING CAPITAL BANKING MERCHANT MARKETS Top 30 Bank Top U.S. Pharmacy Top German Bank 9th Modern Banking Platform Implementing Premium Consolidating multiple Win, including 4 in the Top 30 Payback across approximately providers with our integrated (7th Large Win in 3 Quarters) 10
Slide 13: 2Q 2020 Results
2Q 2020 RESULTS
Slide 14: Highlights & Accomplishments
HIGHLIGHTS & ACCOMPLISHMENTS REVENUE ($ in millions) 2Q 2020 RESULTS demonstrate the durability of FIS’ unique business model 2Q20 $2,962 • Organic revenue decreased 7%, as growth in Banking and Capital Markets was offset by lower Merchant payment volumes primarily due to the impacts of COVID-19 2Q1
Slide 15: Segment Results
SEGMENT RESULTS BANKING SOLUTIONS REVENUE ($ in millions) • 4% organic revenue growth primarily due to continued strong growth in 2Q20 $1,479 2Q20 recurring revenue • Organic revenue growth includes a 1% headwind from lower transactional revenue associated with the ongoing COVID pandemic 2Q19 2Q19 $
Slide 16: Merchant Trends
MERCHANT TRENDS Monthly Volume and Transaction Trends 1 Dollar Volume Transaction Count 4% -1% -7% -7% -11% -11% -18% -21% April May June Q2 • Merchant trends improved throughout the second quarter as restrictions related to the COVID pandemic were relaxed • Merchant trends have also continued to im
Slide 17: Balance Sheet, Cash Flow and Liquidity
BALANCE SHEET, CASH FLOW AND LIQUIDITY BALANCE SHEET AND CASH FLOW JUNE 30, 2020 LIQUIDITY POSITION JUNE 30, 2020 Cash and Cash Dividends Paid 1 $217M Equivalents $1.2B Available Borrowing Debt Paydown 1 $544M Capacity3 $2.3B Free Cash Flow 1 $655M Total Liquidity $3.5B • Robust cash flow of 22% con
Slide 18: Technology and Innovation: Committed to Growth
COMMITTED TO GROWTH FOR OUR COLLEAGUES • Becoming the FinTech employer of choice TECHNOLOGY • Maintaining an inclusive and diverse AND environment • Fostering a culture of innovation and growth INNOVATION AT SCALE FOR OUR CLIENTS • Delivering innovative solutions to solve complex problems • Fully le
Slide 19: Advancing the Way the World Pays, Banks and Invests
(— | So | ADVANCING THE WAY THE WORLD PAYS, BANKS AND INVESTS™
Slide 20: Appendix
APPENDIX
Slide 21: Forward-Looking Statements
FORWARD-LOOKING STATEMENTS This presentation and today’s webcast contain “forward-looking statements” within the meaning of the U.S. federal securities laws. Statements that are not historical facts, including statements about anticipated financial outcomes, including any earnings guidance of the Co
Slide 22: Forward-Looking Statements
FORWARD-LOOKING STATEMENTS • the reaction of current and potential customers to communications from us or regulators regarding information security, risk management, internal audit or other matters; • competitive pressures on pricing related to the decreasing number of community banks in the U.S., t
Slide 23: FIS Use of Non-GAAP Financial Information
FIS USE OF NON-GAAP FINANCIAL INFORMATION Generally Accepted Accounting Principles (GAAP) is the term used to refer to the standard framework of guidelines for financial accounting in the United States. GAAP includes the standards, conventions, and rules accountants follow in recording and summarizi
Slide 24: Reconciliation of GAAP to Non-GAAP Financials
RECONCILIATION OF GAAP TO NON-GAAP FINANCIALS ($ millions, unaudited) Three months ended June 30, 2020 Capital Merchant Banking Market Corporate Solutions Solutions Solutions and Other Total Revenue $ 812 $ 1,479 $ 629 $ 42 $ 2,962 FX 5 15 4 - 24 Constant Currency Revenue $ 817 $ 1,494 $ 633 $ 42 $
Slide 25: Reconciliation of GAAP to Non-GAAP Financials
RECONCILIATION OF GAAP TO NON-GAAP FINANCIALS ($ millions, unaudited) Three months ended June 30, 2020 2019 Net earnings attributable to FIS common stockholders $ 19 $ 154 Provision (benefit) for income taxes 4 40 Interest expense, net 88 72 Other, net (65) 125 Operating income, as reported $ 46 $ 3
Slide 26: Reconciliation of GAAP to Non-GAAP Financials
RECONCILIATION OF GAAP TO NON-GAAP FINANCIALS Three months ended ($ millions, unaudited) June 30, 2020 2019 Earnings (loss) before income taxes and equity method investment earnings (loss) $ 32 $ 199 (Provision) benefit for income taxes (4) (40) Equity method investment earnings (loss) (7) (4) Net (
Slide 27: Reconciliation of GAAP to Non-GAAP Financials
RECONCILIATION OF GAAP TO NON-GAAP FINANCIALS Three months ended ($ millions, unaudited) June 30, 2020 Net cash provided by operating activities $ 1,231 Non-GAAP adjustments: Acquisition, integration and other payments 208 Settlement activity (541) Adjusted cash flows from operations $ 898 Capital e
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