Fidelity National Information Services, Inc. · NYSE:FIS
Fidelity National Information Services — Q4 2016 Earnings Presentation
33 slides from Fidelity National Information Services's earnings presentation, Feb 7, 2017
Slide 1: Fourth Quarter 2016 Earnings Call
Fourth Quarter 2016 Earnings Call February 7, 2017 ©2017 FIS and/or its subsidiaries. All Rights Reserved.
Slide 2: Agenda
Agenda TOPIC SPEAKER Gary Norcross, Business Summary President and CEO Woody Woodall, Financial Summary Chief Financial Officer 2
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 futu
Slide 4: Business Summary
Business Summary Gary Norcross President and CEO
Slide 5: Full Year Highlights
Full Year Highlights • Integration efforts EXCEEDED expectations • SIGNIFICANT returns to shareholders • GENERATED exceptional cash flow • STRONG sales pipeline for 2017 5
Slide 6: Fourth Quarter Highlights
Fourth Quarter Highlights • Integrated Financial Solutions (IFS) – Strong sales in corporate liquidity – Continued exceptional digital solutions growth – EMV growth comparables • Global Financial Solutions (GFS) – Exceptional product sales in institutional and wholesale – Full quarter benefit of add
Slide 7: Consistent Execution of Strategy
Consistent Execution of Strategy • FOCUS on integration • DE-LEVER the balance sheet • Invest for GROWTH 7
Slide 8: Financial Summary
FINANCIAL SUMMARY Woody Woodall Chief Financial Officer
Slide 9: Consolidated Non-GAAP Results
Consolidated Non-GAAP Results Fourth Quarter (Q4) and Full Year (FY) 2016 ($ millions) Q4 METRICS Q4 2016 Y-o-Y vs Q4 2015 Adj. Revenue $ 2,460 4.8% Organic(1) Adj. EBITDA $ 846 15.2%(2) Adj. EBITDA Margin 34.4% 340 bps(2) Adj. EPS $ 1.14 22.6% FY METRICS FY 2016 Y-o-Y vs FY 2015 Adj. Revenue $ 9,43
Slide 10: Integrated Financial Solutions
Integrated Financial Solutions Fourth Quarter (Q4) and Full Year (FY) 2016 ($ millions) Q4 METRICS Q4 2016 Y-o-Y vs Q4 2015 Revenue $ 1,158 2.5% Organic(1) Adj. EBITDA $ 478 5.0%(2) Adj. EBITDA Margin 41.3% 110 bps(2) FY METRICS FY 2016 Y-o-Y vs FY 2015 Revenue $ 4,566 5.0% Organic(1) Adj. EBITDA $
Slide 11: Integrated Financial Solutions
Integrated Financial Solutions Revenue Contribution Revenue Composition – Full Year ($ millions) ORGANIC Full ORGANIC RECURRING REVENUE | 87% Q4 GROWTH Year GROWTH PROFESSIONAL SERVICES | 9% Banking and Wealth $ 477 0.1% $ 1,950 4.7% OTHER | 4% Payments 471 1.1% 1,840 5.3% Corporate and Digital 212
Slide 12: Global Financial Solutions
Global Financial Solutions Fourth Quarter (Q4) and Full Year (FY) 2016 ($ millions) Q4 METRICS Q4 2016 Y-o-Y vs Q4 2015 Revenue $ 1,143 7.7% Organic(1) Adj. EBITDA $ 412 31.3%(2) Adj. EBITDA Margin 36.0% 700 bps(2) FY METRICS FY 2016 Y-o-Y vs FY 2015 Revenue $ 4,250 5.0% Organic(1) Adj. EBITDA $ 1,2
Slide 13: Global Financial Solutions
Global Financial Solutions Revenue Contribution Revenue Composition – Full Year ($ millions) RECURRING REVENUE | 66% ORGANIC Full ORGANIC Q4 GROWTH Year GROWTH PROFESSIONAL SERVICES | 27% Institutional and $ 582 8.7% $ 2,104 5.1% Wholesale Banking and 419 2.5% 1,584 4.5% Payments OTHER | 7% Consulti
Slide 14: Corporate and Other
Corporate and Other Fourth Quarter (Q4) and Full Year (FY) 2016 ($ millions) METRICS Q4 2016 FY 2016 Adj. Revenue $ 159 $ 617 Adj. EBITDA $ (44) $ (158) Q4 2016 and Full Year 2016 Adj. EBITDA inclusive of $88M and $316M of Corporate Expense, respectively Revenue Contribution Revenue Composition – Fu
Slide 15: Cash Flow and Capital Allocation Strategy
Cash Flow and Capital Allocation Strategy • Cash flow generation – $435 million Q4 2016 free cash flow and $1.5 billion FY 2016 • Maintaining a strong balance sheet – $10.5 billion debt outstanding as of December 31, 2016 – Reduced debt outstanding by $1 billion during 2016 • Shareholder returns – R
Slide 16: 2017 Overview
2017 Overview • PS&E divestiture, March 2022 bond call, dividend increase – $0.13 net adjusted EPS impact due to PS&E divestiture in 2017 – Total debt below $9.0 billion by end of 2017 – Increased quarterly dividend 12% to $0.29 per share • Drivers of segment outlook – Continued bank consolidation a
Slide 17: 2017 Consolidated Guidance
FINANCIAL OVERVIEW 2017 Consolidated Guidance METRIC GUIDANCE Consolidated Organic Revenue Growth 2.0% to 3.0% Integrated Financial Solutions 3.0% to 4.0% Organic Revenue Growth Global Financial Solutions 4.0% to 5.0% Organic Revenue Growth Adjusted EBITDA $ 3.04 to $ 3.12 billion Earnings per share
Slide 18: Competitive Business Model
Competitive Business Model STRONG cash flow generation MAINTAIN strong balance sheet INVEST in growth 18
Slide 19: Appendix
APPENDIX
Slide 20: 2017 Guidance – Additional Assumptions
FINANCIAL OVERVIEW 2017 Guidance – Additional Assumptions METRIC GUIDANCE Negative F/X Impact to Revenue ~ 75 million Adjusted D&A ~ 610 million (Excludes Purchase Accounting Amort.) Net Interest Expense ~ 360 million Effective Tax Rate ~ 32.0% Minority Interest ~ 20 million Diluted Weighted Shares
Slide 21: Debt Summary
Debt Summary ($ in millions) Dec 31, Dec 31, Rate 2016 2015 (1) Revolver (2021 Maturity) L+125 bps $ 36 $ 1,250 Undrawn revolver capacity 15 bps 2,964 1,750 Term Loan (2017 Maturity) L+125 bps - 1,300 Term Loan (2018 Maturity) L+125 bps 550 1,500 2017 Notes (June) 1.450% 300 300 2018 Notes (April) 2
Slide 22: Global Financial Solutions Revenue by Currency
Global Financial Solutions Revenue by Currency Full Year (FY) 2016 GBP STERLING 10% EURO 9% BRAZIL REAL 8% OTHER 16% US DOLLAR 57% 22
Slide 23: 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 24: Forward-Looking Statements
Forward-Looking Statements • the risk that implementation of software (including software updates) for customers or at customer locations may result in the corruption or loss of data or customer information, interruption of business operations, exposure to liability claims or loss of customers; • th
Slide 25: Non-GAAP Financial Information and Reconciliation
Non-GAAP Financial Information and Reconciliation Generally Accepted Accounting Principles (GAAP) is the term used to refer to the standard framework of guidelines for financial accounting. GAAP includes the standards, conventions, and rules accountants follow in recording and summarizing transactio
Slide 26: Definitions of Non-GAAP Financial Measures
Definitions of Non-GAAP Financial Measures Adjusted revenue consists of reported revenue, increased to reverse the purchase accounting deferred revenue adjustment made upon the acquisition of SunGard. The deferred revenue adjustment represents revenue that would have been recognized in the normal co
Slide 27: Definitions of Non-GAAP Financial Measures
Definitions of Non-GAAP Financial Measures Constant currency revenue represents (i) adjusted revenue in respect of the consolidated results and the corporate and other segment and (ii) reported revenue in respect of the IFS and GFS segments, in each case excluding the impact of fluctuations in forei
Slide 28: Organic Revenue Growth Calculation
Organic Revenue Growth Calculation Fourth Quarter (Q4) 2016 ($ millions) 2016 2015 Adjusted Constant Adjusted In Year Adjusted Organic Revenue FX Currency Revenue Adjustments Base Growth Integrated Financial Solutions $ 1,158 $2 $ 1,160 $ 1,043 $ 89 $ 1,132 2.5% Global Financial Solutions 1,143 17 1
Slide 29: Organic Revenue Growth Calculation
Organic Revenue Growth Calculation Full Year (FY) 2016 ($ millions) 2016 2015 Adjusted Constant Adjusted In Year Adjusted Organic Revenue FX Currency Revenue Adjustments Base Growth Integrated Financial Solutions $ 4,566 $ 5 $ 4,571 $ 3,846 $ 506 $ 4,352 5.0% Global Financial Solutions 4,250 92 4,34
Slide 30: Reconciliation of GAAP to Non-GAAP Financial Measures
Reconciliation of GAAP to Non-GAAP Financial Measures ($ in Millions, Except per Share Data, Unaudited) Three Months Ended December 31, 2016 Integrated Global Financial Financial Corporate Solutions Solutions and Other Consolidated Processing and services revenue $ 1,158 $ 1,143 $ 144 $ 2,455 Non-GA
Slide 31: Reconciliation of GAAP to Non-GAAP Financial Measures
Reconciliation of GAAP to Non-GAAP Financial Measures ($ in Millions, Except per Share Data, Unaudited) Three months ended Year ended December 31, December 31, 2016 2015 2016 2015 Net earnings from continuing operations attributable to FIS $ 207 $ 105 $ 567 $ 639 Provision for income taxes 117 65 31
Slide 32: Reconciliation of GAAP to Non-GAAP Financial Measures
Reconciliation of GAAP to Non-GAAP Financial Measures ($ in Millions, Except per Share Data, Unaudited) Three months ended Year ended December 31, December 31, 2016 2015 2016 2015 Earnings from continuing operations before income taxes $ 333 $ 176 $ 906 $ 1,037 Provision for income taxes 117 65 317
Slide 33: Reconciliation of GAAP to Non-GAAP Financial Measures
Reconciliation of GAAP to Non-GAAP Financial Measures ($ in Millions, Except per Share Data, Unaudited) Three months ended Year ended December 31, 2016 December 31, 2016 Net cash provided by operating activities $ 583 $ 1,925 Non-GAAP adjustments: Capco acquisition related payments 6 27 Acquisition,
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