Deluxe Corporation · NYSE:DLX
Deluxe — Investor Presentation (February 2013)
20 slides from Deluxe's investor presentation, Feb 26, 2013
Slide 1: First Quarter 2013 Deluxe Corporation Overview, Strategy and Financial Information
First Quarter – 2013 Deluxe Corporation Overview, Strategy and Financial Information
Slide 2: Presentation Scope
2 Presentation Scope Comments are limited to information already publicly released: 10-K for 2012, filed February 22, 2013 All estimates and projections are subject to risks and uncertainties that could cause actual future results to differ materially from those estimated or projected. Additional in
Slide 3: Deluxe Spokespeople
3 Lee Schram Chief Executive Officer Terry Peterson SVP and Chief Financial Officer Jeff Johnson Treasurer and VP, Investor Relations Deluxe Spokespeople
Slide 4: Who Is Deluxe?
4 Who Is Deluxe? Financial Services Small Business Services Direct Checks Leading provider of products and services to financial institutions ~5,700 FI customers Adjusted operating margin 23.4% America’s leading direct-to-consumer check supplier ~8 million customers Adjusted operating margin 31.4% (
Slide 5: Five Key Focus Areas to Deliver Strategy
Small Business Core Products Grow online, distributor, major accounts Improve segmented customer focus Small Business Marketing Solutions and Other Services Grow web design / hosting, web-to-print, SEM/SEO, logo, social media, payroll, fraud & security Financial Institutions Grow check share Expand
Slide 6: Growth Driven by Changing Mix
Growth Driven by Changing Mix 6 Checks SB – market declines; high security checks FS – ~5-6% unit decline; Titan gains; 90% retention DC – upper single-digit unit declines Differentiated technology flat packaging, digital, online portal / dashboard tools Marketing Solutions and Other Services SB – W
Slide 7: Marketing Solutions & Other Services
7 Marketing Solutions & Other Services Revenue Categories / Examples 2012 % of Total 2013 % of Total and Expected Growth Rates Key Revenue Growth Initiatives Small Business Marketing Web-to-Print Promotional Products Brochures, Post cards Apparel 41% ~40% Mid-Teens Scale web-to-print – cross sell ba
Slide 8: Brand Awareness Campaign
Advertising campaign: Television commercials, late 2012 Television, print ads, digital online and radio, staggered throughout 2013 Brand Awareness Campaign Link to Deluxe Work Happy videos
Slide 9: SBS Strategic Execution Roadmap
9 Social Media Market Intelligence Branding Promoting Operating Mobile Branding Logo Design Imaging/ Promo Mobile Promotions SEM /SEO Services E-mail Marketing Direct Mail Full Color/ Web-to-Print Security/ Fraud Prot. Payroll Services Other Printed Prod. Checks, Forms Web Hosting Web Design Selling
Slide 10: FS Strategic Execution Roadmap
10 Grow check share (technology focus) FS Strategic Execution Roadmap Grow marketing solutions & other services Financial Services Customer Acquisition Risk Management Loyalty SwitchAgentSM Onboarding Cornerstone Analytics Dashboard Provent® Detect Marketing Solutions & Other Services Offers COFS “A
Slide 11: Strong Financial Performance
11 Revenue $ in millions Cash from Operations $ in millions Net Debt Outstanding(2) $ in millions Adjusted EPS excludes $0.50 in 2009, $0.21 in 2010, $0.31 in 2011 and $0.21 in 2012 for costs related to net loss on repurchases of debt, restructuring, asset impairment charges, transaction related cos
Slide 12: EBITDA Margin Trends
EBITDA Margin Trends 12 Core Deluxe MOS EBITDA % (Scale does not start at 0) Ranges from historic to strategic time frames Key Highlights / Takeaways MOS currently contributing double-digit EBITDA margins & expanding Largest component of MOS, small business marketing (products), has higher gross mar
Slide 13: Capital Structure Strategy
13 Capital Structure Strategy Our strong cash flow, strengthened balance sheet and flexible capital structure position us well to continue advancing our transformation Expect to: Invest organically Small to medium-sized acquisitions Maintain current dividend level Repurchase shares to off-set diluti
Slide 14: Cost Reduction Plan
14 (1) The annual savings noted are net of investment – measured on a year-over-year basis (2) Reductions not linear in 2013 1/3 COGS 2/3 SG&A $15M $105M $155M $260M $325M Delivered $435M annual net cost savings mid-2006 to 2012(1) Target $50M incremental net cost savings in 2013(2) Cost Reduction P
Slide 15: Why is Deluxe an Attractive Investment?
15 Why is Deluxe an Attractive Investment? Aggressive Turnaround on Track Investing in scalable growing markets Strong 2012 results – delivered on our commitments Secular FI consumer check decline rate moderating Results-Oriented Management Team Experienced and united leadership team, focused sense
Slide 16: Appendix
Appendix
Slide 17: Adjusted Earnings Per Share (EPS) Reconciliation
17 Adjusted Earnings Per Share (EPS) Reconciliation to reported EPS – Diluted (from continuing operations) This table is provided to assist in understanding the comparability of the Company’s results of operations actuals for years ending December 31, 2012, 2011, 2010, and 2009 . The Company’s manag
Slide 18: Adjusted Operating Income Reconciliation
18 Adjusted Operating Income Reconciliation to reported operating income (1) Represents restructuring and transaction related costs. (2) The segment information reported here was calculated utilizing the methodology outlined in the Notes to Consolidated Financial Statements included in our Annual Re
Slide 19: Net Debt Reconciliation to Total Debt
19 Net Debt Reconciliation to Total Debt $ in millions 2012 2011 2010 2009 Net Debt $608 $713 $738 $756 Cash and Cash Equivalents 45 29 17 13 Total Debt $653 $742 $755 $769
Slide 20: Thank You
20 Thank You Investor Relations Contact: Jeff L. Johnson Treasurer & Vice President, Investor Relations Tel: 651-787-1068 Investor.Relations@deluxe.com