Ncr Voyix Corporation · NYSE:VYX
Ncr Voyix — NCR — Q3 2021 Earnings Presentation
26 slides from Ncr Voyix's earnings presentation, Oct 26, 2021
Slide 1: Q3 2021 Earnings Conference Call
1 Q3 2021 EARNINGS CONFERENCE CALL MICHAEL HAYFORD, CEO OWEN SULLIVAN, PRESIDENT & COO TIM OLIVER, CFO October 26, 2021
Slide 2: Forward-Looking Statements
2 FORWARD-LOOKING STATEMENTS. Comments made during this conference call and in these materials contain “forward- looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, pursuant to the safe h
Slide 3: Non-GAAP Measures
3 NON-GAAP MEASURES. While NCR reports its results in accordance with generally accepted accounting principles in the United States, or GAAP, comments made during this conference call and in these materials will include or make reference to certain "non-GAAP" measures, including: selected measures,
Slide 4: Overview
4 OVERVIEW Free Cash Flow of $125M in Q3 Revenue up 20% Y/Y; Recurring revenue up 39% Adjusted EBITDA growth of 41% Y/Y Adjusted EBITDA margin expansion of 280 bps to 18.5% Cardtronics integration on-track
Slide 5: Strategic Update
5 STRATEGIC UPDATE Accelerating NCR-as-a-Service transformation Strong momentum across strategic growth platforms Retail - Accelerating growth in NCR EmeraldTM software platform Hospitality - AlohaTM Essentials momentum across both Enterprise and SMB customers Banking – Digital banking momentum and
Slide 6: Q3 2021 Financial Results
6 Adjusted EBITDA up 41% and margin rate up 280 bps y/y Non-GAAP EPS up 28% y/y Driving strong and linear free cash flow production Total Revenue/Recurring Adjusted EBITDA Non-GAAP Diluted EPS Free Cash Flow Revenue up 20% y/y; Recurring revenue up 39% y/y; Pro forma revenue up 3%; Pro forma(1) recu
Slide 7: Banking
7 Q3 19 Q3 20 Q3 21 $100 $125 $150 $ in millions, except registered users BANKING Revenue Adjusted EBITDA Q3 20 Q4 20 Q1 21 Q2 21 Q3 21 $0 $500 $1,000 $1,500 Q3 20 Q4 20 Q1 21 Q2 21 Q3 21 $0 $125 $250 $777 Q3 19 Q3 20 Q3 21 20.0 24.0 28.0 Digital Banking Revenue Digital Banking Registered Users Recu
Slide 8: Retail
8 Conversion to Platform Lanes gaining traction $ in millions, except platform lanes RETAIL Revenue Adjusted EBITDA Q3 20 Q4 20 Q1 21 Q2 21 Q3 21 $0 $250 $500 $750 Q3 20 Q4 20 Q1 21 Q2 21 Q3 21 $0 $40 $80 $120 SCO Revenue Platform Lanes Q3 19 Q3 20 Q3 21 0 8,000 16,000 Recurring Revenue Down 11% y/y
Slide 9: Hospitality
9 $ in millions, except Aloha Essential sites HOSPITALITY Revenue Adjusted EBITDA Q3 20 Q4 20 Q1 21 Q2 21 Q3 21 $0 $80 $160 $240 Q3 20 Q4 20 Q1 21 Q2 21 Q3 21 $0 $10 $20 $30 Aloha Essential Sites Recurring Revenue Q3 19 Q3 20 Q3 21 2,500 5,000 7,500 Up 102% y/y Up 19% y/y Q3 19 Q3 20 Q3 21 $90 $105
Slide 10: Progress on NCR 80/60/20 Goals
10 Q3 2021 Q3 2020 80% of NCR's revenue will come from software and services 76% 71% 60% of NCR's revenue will come from recurring revenue 62% 53% 20% goal for Adjusted EBITDA as a percent of revenue 18.5% 15.7% Progress on NCR 80/60/20 Goals
Slide 11: Free Cash Flow, Net Debt & EBITDA
11 Free Cash Flow Q3 2021 Q3 2020 Cash provided by operating activities $497 $212 Less: Total capital expenditures ($102) ($60) Less: Initial sale of Trade Accounts Receivable ($274) $0 Plus: Settlement Restricted Cash Activity $0 $3 Plus: Pension contributions $4 $5 Free Cash Flow $125 $160 $ in mi
Slide 12: Looking Forward
12 LOOKING FORWARD Capitalize on Cardtronics opportunities Accelerate payments and transaction processing solutions Allocate capital to highest growth and return on investment opportunities Focus on customer satisfaction initiatives Virtual Investor Day scheduled for December 9th, 2021 Continue to e
Slide 13: Supplementary Materials
13 SUPPLEMENTARY MATERIALS
Slide 14: Q3 2021 GAAP Results
14 Q3 2021 Q3 2020 % Change Revenue $1,901 $1,589 20% Gross Margin 520 427 22% Gross Margin Rate 27.4% 26.9% Operating Expenses 363 309 17% % of Revenue 19.1% 19.4% Operating Income 157 118 33% % of Revenue 8.3% 7.4% Interest and other expense (115) (86) 34% Income Tax Expense (Benefit) 29 — Effecti
Slide 15: Q3 2021 Operational Results
15 Q3 2021 Q3 2020 % Change Revenue $1,901 $1,589 20% Gross Margin (non-GAAP) 546 446 22% Gross Margin Rate (non-GAAP) 28.7% 28.1% Operating Expenses (non-GAAP) $331 $288 15% % of Revenue 17.4% 18.1% Operating Income (non-GAAP) $215 $158 36% % of Revenue 11.3% 9.9% Interest and other expense (non-GA
Slide 16: Non-GAAP measure definitions
16 While NCR reports its results in accordance with generally accepted accounting principles (GAAP) in the United States, comments made during this conference call and in these materials will include non-GAAP measures. These measures are included to provide additional useful information regarding NC
Slide 17: Net Debt and Adjusted EBITDA definitions
17 Net Debt and Adjusted Earnings Before Interest, Taxes, Depreciation and Amortization (Adjusted EBITDA). NCR determines Net Debt based on its total debt less cash and cash equivalents, with total debt being defined as total short-term borrowings plus total long-term debt. NCR believes that Net Deb
Slide 18: GAAP to Non-GAAP Reconciliation
18 Q3 2021 Q2 2021 Q3 2020 Net (Loss) Income from Continuing Operations Attributable to NCR (GAAP) $ 12 $ (9) $ 31 Transformation & Restructuring Costs 5 7 19 Acquisition-Related Amortization of Intangibles 45 23 21 Acquisition-Related Costs 9 56 — Loss on Debt Extinguishment 42 — 20 Interest Expens
Slide 19: GAAP to Non-GAAP Reconciliation (LTM)
19 Q3 2021 LTM Q2 2021 LTM Q3 2020 LTM Net (Loss) Income from Continuing Operations Attributable to NCR (GAAP) $ (92) $ (73) $ 502 Pension Mark-to-Market Adjustments 34 34 75 Transformation & Restructuring Costs 222 236 43 Acquisition-Related Amortization of Intangibles 107 83 84 Acquisition-Related
Slide 20: Adjusted EBITDA by Segment
20 Q3 2021 Q2 2021 Q3 2020 Banking $ 242 $ 151 $ 144 Retail 70 92 81 Hospitality 35 30 24 Other 10 9 10 Adjusted EBITDA by Segment $ 357 $ 282 $ 259 Corporate and Other (5) (1) (10) Adjusted EBITDA $ 352 $ 281 $ 249 ADJUSTED EBITDA BY SEGMENT $ in millions
Slide 21: Q3 QTD 2021 GAAP to non-GAAP
21 Q3 QTD 2021 GAAP Transform ation Costs Acquisition- related amortization of intangibles Acquisition- related costs Debt Refinancing & Extinguishment Tax Related Items Q3 QTD 2021 non- GAAP Product revenue $520 $— $— $— $— $— $520 Service revenue 1,381 — — — — — 1,381 Total revenue 1,901 — — — — —
Slide 22: Q3 QTD 2021 EPS reconciliation
22 Q3 QTD 2021 GAAP Q3 QTD 2021 non-GAAP Income from continuing operations attributable to NCR common stockholders: Income from continuing operations (attributable to NCR) $12 $102 Dividends on convertible preferred shares (4) — Income from continuing operations attributable to NCR common stockholde
Slide 23: Q3 QTD 2020 GAAP to non-GAAP
23 Q3 QTD 2020 GAAP Transformation Costs Acquisition- related amortization of intangibles Debt Financing Q3 QTD 2020 non- GAAP Product revenue $521 $— $— $— $521 Service revenue 1,068 — — — 1,068 Total revenue 1,589 — — — 1,589 Cost of products 452 (10) (2) — 440 Cost of services 710 (4) (3) — 703 G
Slide 24: Q3 QTD 2020 EPS reconciliation
24 Q3 QTD 2020 GAAP Q3 QTD 2020 non-GAAP Income from continuing operations attributable to NCR common stockholders: Income from continuing operations (attributable to NCR) $31 $77 Dividends on convertible preferred shares ($6) $— Income from continuing operations attributable to NCR common stockhold
Slide 25: Free Cash Flow GAAP to Non-GAAP Reconciliation
25 Q3 2021 Q2 2021 Q3 2020 Cash provided by operating activities $497 $155 $212 Less: Total capital expenditures ($102) ($79) ($60) Less: Sale of Accounts Receivables ($274) $— $— Plus: Pension contributions $4 $5 $5 Plus: Settlement Restricted Cash Activity $— $6 $3 Plus: Acquisition Related Items
Slide 26: Thank You
26 THANK YOU