Wex Inc. · NYSE:WEX
Wex — Q4 2017 Earnings Presentation
21 slides from Wex's earnings presentation, Feb 21, 2018
Slide 1: WEX Fourth Quarter 2017 Earnings
WEX Fourth Quarter 2017 Earnings February 21, 2018
Slide 2: Forward Looking Statements
Forward Looking Statements The attached materials and our commentary relating to those materials contain statements about future plans and expectations, which constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Such forward looking statem
Slide 3: 4Q2017 Highlights
4Q2017 Highlights REVENUE +13.9% $ PER DILUTED SHARE +16.4% ADJUSTED NET INCOME EPS +18.7% 4Q2017 PURCHASE VOLUME $ MILLIONS BILLIONS FLEET TRAVEL & CORPORATE HEALTH & EMPLOYEE BENEFITS1 4Q2017 REVENUE GROWTH 14.3% 12.8% 13.6% 1. USA only for purchase volume 3
Slide 4: Strategic Pillars
Strategic Pillars HIGHLIGHTS Revenue from newly signed customers is at an all-time high due to an influx of additional strategic customers and partners.Continued international growth position us to capture additional global market share.High level of technology integration in all businesses, which e
Slide 5: Building Upon the Best-in-Class Growth Engine
Building Upon the Best-in-Class Growth Engine HEALTH & EMPLOYEE BENEFITS TRAVEL & CORPORATE FLEET ~147M global commercial vehicles1 <8% addressable market share $1.9T total spend2 <2% addressable market share $2.0B total revenue3 <9% US market share Per 2017 World Oil OutlookPer FirstPartner, Phocus
Slide 6: Leading with Superior Technology
Leading with Superior Technology HEALTH & EMPLOYEE BENEFITS TRAVEL & CORPORATE FLEET ClearView Analytics Tool—providing customers answers from their dataSignificant improvements for Mobile EnablementOpening up consumer vertical through GasBuddyChevron Conversion—provided scalable, innovative proprie
Slide 7: Achieved $25M Synergy Target
Achieved $25M Synergy Target Achieved our $25 million run rate target in synergiesCompleted all of the planned integration activities (excluding platform consolidation)Platform consolidation is well underway and should provide additional synergy EFS 7 KEY UPDATES $25M Run RateSynergies Achieved
Slide 8: WEX Fourth Quarter 2017 Financial Results
WEX Fourth Quarter 2017 Financial Results 8
Slide 9: Company Results – Q4 2017
Company Results – Q4 2017 4Q17 4Q16 $ ∆ Yr/Yr % ∆ Yr/Yr Total Revenue $331,305 $290,840 $40,465 13.9% GAAP Net Income $79,804 $5,288 $74,516 NM GAAP Net Income per Diluted Share $1.85 $0.12 $1.73 NM Adjusted Net Income $64,471 $55,169 $9,302 16.9% Adjusted Net Income per Diluted Share $1.49 $1.28 $0
Slide 10: Company Results – Full Year 2017
Company Results – Full Year 2017 2017 2016 $ ∆ Yr/Yr % ∆ Yr/Yr Total Revenue $1,250,548 $1,018,460 $232,088 22.8% Segment Revenue: Fleet Solutions 822,966 642,061 180,905 28.2% Travel and Corporate Solutions 224,047 215,247 8,800 4.1% Health and Employee Benefits 203,535 161,152 42,383 26.3% Record
Slide 11: Fleet Solutions
Fleet Solutions Robust payment processing growth and a strong quarter from EFS delivered solid results 4Q17 4Q16 $ ∆ Yr/Yr % ∆ Yr/Yr Total Segment Revenue ($) 219,761 192,269 27,492 14.3% Payment Processing Revenue ($) 95,948 81,767 14,181 17.3% Finance Fee Revenue ($) 45,582 38,884 6,698 17.2% All
Slide 12: Travel and Corporate Solutions
Travel and Corporate Solutions Positive revenue diversification trend carrying momentum in Travel and Corporate Solutions 4Q17 4Q16 $ ∆ Yr/Yr % ∆ Yr/Yr Total Segment Revenue ($) 60,308 53,454 6,854 12.8% Payment Processing Revenue ($) 39,332 45,390 (6,058) (13.3%) All Other Revenue ($) 20,976 8,064
Slide 13: Health and Employee Benefits Solutions
Health and Employee Benefits Solutions Account growth and spend volume both deliver double-digit increases year-over-year 4Q17 4Q16 $ ∆ Yr/Yr % ∆ Yr/Yr Total Segment Revenue ($) 51,236 45,117 6,119 13.6% Payment Processing Revenue ($) 10,452 10,144 308 3.0% Account Servicing Revenue ($) 28,184 23,14
Slide 14: Additional Income Statement Items
Additional Income Statement Items Salary costs up due to AOC acquisition, technology insourcing, growth and variable compensation Fraud related losses down to 3.3 basis pointsNon fraud fleet credit losses at 7.5 basis points an all time low for Q4 TOTAL OPERATING EXPENSES (GAAP) FLEET CREDIT LOSS (B
Slide 15: Quarterly Tax Update
Quarterly Tax Update Due to a $50M+ net gain from tax reform, Q4 GAAP tax rate is not representative of ongoing operations GAAP TAX RATE ANI TAX RATE 15 KEY UPDATES
Slide 16: Additional Balance Sheet Items
Additional Balance Sheet Items Leverage ratio reduced to 3.7 down from 4.5 last year$500M in new interest rate swaps at a weighted average annualized rate of 2.21% for 5 yearsA total of $1.7B swapped or fixed rateRepriced Term Loan B in January 2018, reducing spreads 50 basis points TOTAL FINANCIAL
Slide 17: Revenue Recognition Standard
Revenue Recognition Standard Est. Rev. Rec. Adjustments 2018 (in thousands)$29,000$(7,000)$(2,000)$20,000 No changes to earnings under the new revenue recognition standards Changes to reported revenue are a reclassification of certain partner rebates and network fees.Net increase to reported revenue
Slide 18: Guidance
Guidance 1Q18 OUTLOOK ∆ YR/YR FY2018 OUTLOOK ∆ YR/YR Revenue $333M - $343M 14% - 18% $1.40B - $1.44B 12% - 15% Adj. Net Income1 $72M - $75M 35% - 41% $315M- $332M 35% - 42% Adj. Net Income EPS1 $1.66 - $1.74 35% - 41% $7.30 - $7.70 35% - 42% Fleet Credit Loss 12-17 bps 11-16 bps Domestic Fuel Prices
Slide 19: AND PROPRIETARY
CONFIDENTIAL AND PROPRIETARY 19
Slide 20: Non-GAAP Reconciliation
Non-GAAP Reconciliation The Company's non-GAAP adjusted net income excludes unrealized gains and losses on derivatives, net foreign currency remeasurement gains and losses, acquisition-related ticking fees, acquisition-related intangible amortization, other acquisition and divestiture related items,
Slide 21: Non-GAAP Reconciliation – Q4 2017 and Full Year
Non-GAAP Reconciliation – Q4 2017 and Full Year In thousands 4Q17 FY2017 Net earnings attributable to shareholders 79,804 160,266 Unrealized gains on derivative instruments (2,163) (1,314) Net foreign currency remeasurement loss (gain) 3,659 (29,919) Acquisition-related intangible amortization 39,20