Fidelity National Information Services, Inc. · NYSE:FIS
Fidelity National Information Services — Q2 2019 Earnings Presentation
28 slides from Fidelity National Information Services's earnings presentation, Aug 6, 2019
Slide 1: Second Quarter 2019 Earnings Call
SECOND QUARTER 2019 EARNINGS CALL August 6, 2019
Slide 2: 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 3: FIS of the future
FIS of the future Powering the Digital Economy Pivot To Growth Future ~7 – 9% Pay Today ~6% Invest Roadmap to Acceleration • Combination increases FIS organic Bank revenue growth from ~4% to ~6% • Revenue synergy opportunities further enhance top-line growth to ~7 – 9% For a description of non-GAAP
Slide 4: FIS 2Q 2019 consolidated results
FIS 2Q 2019 consolidated results FIS Results 2Q 2019 2Q 2018 % Growth Revenue(1) $ 2,112 $ 2,107 5% Integrated financial solutions 1,179 1,124 6% Global financial solutions 865 899 4% Corporate and other 68 84 3% Adjusted EBITDA $ 794 $ 757 5% Adjusted EBITDA margin 37.6% 35.9% 170 bps Adjusted EPS
Slide 5: FIS operating segment results
FIS operating segment results Integrated financial solutions 2Q 2019 2Q 2018 % Growth Revenue(1) $ 1,179 $ 1,124 6% Banking and wealth 560 538 6% Payments 399 377 6% Corporate and digital 221 209 6% Adjusted EBITDA $ 535 $ 492 9% Adjusted EBITDA margin 45.3% 43.8% 150 bps Global financial solutions
Slide 6: Worldpay 2Q 2019 consolidated results
Worldpay 2Q 2019 consolidated results Worldpay Results 2Q 2019 2Q 2018 % Growth Revenue(1) $ 1,073 $ 1,007 9% Technology solutions 466 402 19% Merchant solutions 520 520 2% Issuer solutions 87 85 2% Adjusted EBITDA $ 561 $ 493 14% Adjusted EBITDA margin 52.3% 49.0% 330 bps Adjusted EPS $ 1.24 $ 1.04
Slide 7: New segments for a new company
New segments for a new company Positioned to capture market share in key verticals • Leading Global eCommerce and Integrated Payments solutions • Exposure to secular high growth markets and focused on Merchant increasing market share • Cloud-based banking solutions and issuer processing solutions fo
Slide 8: Powerful client value proposition
Powerful client value proposition CREATING SEAMLESS END-TO-END EXPERIENCES ACROSS THE GLOBAL FINANCIAL ECOSYSTEM ACCESS TO DATA AND WORLD-CLASS INNOVATION INSIGHTS SCALE Client Create innovative, secure, Embrace our unique Leverage our global reach outcomes enterprise-grade solutions approach to sol
Slide 9: Compelling financial profile
Compelling financial profile High-Quality • Resilient business with high visibility and predictability Recurring • Diverse customer base with long-term contracts Revenue • Multiple secular opportunities to accelerate organic growth • One-to-many model and superior cost structure Expanding • Acquisit
Slide 10: Clear path to revenue synergies
Clear path to revenue synergies 2021 - 2022 Increased Confidence in Achieving $500M • Global expansion into Revenue Synergies high growth • Executive ownership of emerging workstreams to meet or 2020 markets exceed targets • Optimization of • Enhanced • First to market with this solution suite autho
Slide 11: Increasing synergy expectations
Increasing synergy expectations Expect to achieve more than $500 million in annual savings(1) 2020 2021 2022 Operational Efficiencies Technology $200 $300 $400 Optimization MILLION MILLION MILLION Corporate Alignment Interest PLUS MORE THAN Expense $100 MILLION ANNUALLY (1) More than $500 million an
Slide 12: Capital allocation strategy
Capital allocation strategy GENERATE HIGH MAXIMIZE REDUCE RATE OF FREE CASH SHAREHOLDER LEVERAGE FLOW CONVERSION RETURNS • Free cash flow of $413 • Leverage of 3.5x post • Significant capital return million in 2Q 2019, merger close, with with dividends of $113 20% of revenue targeted leverage of 2.7
Slide 13: 2019 guidance update
2019 guidance update 3Q 2019 4Q 2019 $ millions except per share data Guidance(1) Guidance(1) Revenue $ 2,775 – $ 2,800 $ 3,285 – $ 3,330 Adjusted EBITDA $ 1,145 – $ 1,160 $ 1,470 – $ 1,500 Adjusted EPS (Prior Method) $ 1.33 – $ 1.37 $ 1.47 – $ 1.53 3Q 2019 Guidance Assumptions 4Q 2019 Guidance Assu
Slide 14: Compelling investment thesis
Compelling investment thesis POWERING ACCELERATING POWERFUL COMPELLING THE DIGITAL ORGANIC CLIENT VALUE FINANCIAL ECONOMY GROWTH PROPOSITION PROFILE • Serving global • Immediate • Modern and cloud • Highly recurring markets combined annual enabled solution and visible • With leading-edge organic gro
Slide 15: Appendix
APPENDIX KIS
Slide 16: Combined company 2Q 2019 results
Combined company 2Q 2019 results Combined Company Results 2Q 2019 2Q 2018 % Growth Revenue(1) $ 3,185 $ 3,114 6% Merchant Solutions 1,098 1,017 10% Banking Solutions 1,493 1,495 5% Capital Market Solutions 594 584 3% Corporate and Other - 18 Adjusted EBITDA $ 1,330 $ 1,211 10% Adjusted EBITDA margin
Slide 17: Adjusted EPS reconciliation
Adjusted EPS reconciliation 3Q 2019 4Q 2019 Guidance Guidance Adjusted EPS (New Method): $ 1.69 - $ 1.72 $ 1.80 - $1.84 Excludes all depreciation and amortization Less: Net Impact of D&A of Non-Purchase Accounting Assets $ 0.35 - $0.36 $ 0.31 - $0.33 Adjusted EPS (Prior Method): Excludes amortizatio
Slide 18: Forward-looking statements
Forward-looking statements This presentation and today’s webcast contain “forward-looking statements” within the meaning of the U.S. federal securities laws. Statements that are not historical facts, including statements about anticipated financial outcomes, including any earnings guidance of the Co
Slide 19: Forward-looking statements
Forward-looking statements • changes in the growth rates of the markets for our solutions; • failures to adapt our solutions to changes in technology or in the marketplace; • internal or external security breaches of our systems, including those relating to unauthorized access, theft, corruption or
Slide 20: FIS use of non-GAAP financial information
FIS use of non-GAAP financial information Generally Accepted Accounting Principles (GAAP) is the term used to refer to the standard framework of guidelines for financial accounting in the United States. GAAP includes the standards, conventions, and rules accountants follow in recording and summarizi
Slide 21: FIS use of non-GAAP financial information
FIS use of non-GAAP financial information Adjusted EBITDA is EBITDA, as defined above, excluding certain costs and other transactions which management deems non-operational in nature, the removal of which improves comparability of operating results across reporting periods. This measure is reported
Slide 22: Worldpay use of non-GAAP financial information
Worldpay use of non-GAAP financial information This presentation presents non-GAAP and pro forma financial information including adjusted EBITDA, adjusted net income, and adjusted net income per share. These have been important financial performance measures for Worldpay, but are not financial measu
Slide 23: FIS organic revenue growth calculation
FIS organic revenue growth calculation ($ millions, unaudited) Three months ended June 30, 2019 Integrated Global Financial Financial Corporate Solutions Solutions and Other Consolidated Revenue $ 1,179 $ 865 $ 68 $ 2,112 Currency translation adjustment 1 17 - 18 Constant currency (A) $ 1,180 $ 882
Slide 24: FIS reconciliation of GAAP to non-GAAP financials
FIS reconciliation of GAAP to non-GAAP financials ($ millions, unaudited) Three months ended June 30, 2019 2018 Net earnings attributable to FIS common stockholders $ 154 $ 212 Provision (benefit) for income taxes 40 51 Interest expense, net 72 73 Other, net 125 17 Operating income, as reported $ 39
Slide 25: FIS reconciliation of GAAP to non-GAAP financials
FIS reconciliation of GAAP to non-GAAP financials ($ millions, except per share amounts, unaudited) Three months ended June 30, 2019 2018 Earnings before income taxes and equity method investment earnings (loss) $ 199 $ 276 Provision (benefit) for income taxes 40 51 Equity method investment earnings
Slide 26: FIS reconciliation of GAAP to non-GAAP financials
FIS reconciliation of GAAP to non-GAAP financials ($ millions, unaudited) Three months ended June 30, 2019 Net cash provided by operating activities $ 526 Non-GAAP adjustments: Acquisition, integration and other payments 46 Tax payments on divestitures 10 Settlement activity (29) Adjusted cash flows
Slide 27: WP reconciliation of GAAP to non-GAAP financials
WP reconciliation of GAAP to non-GAAP financials ($ millions, unaudited) Three months ended June 30, 2019 2018 Net income (loss) $ 144.5 $ (1.5) Income tax expense (benefit) 18.6 12.8 Non-operating (income) expense 4.2 22.0 Interest expense - net 69.2 79.9 Share-based compensation 24.6 39.0 Transiti
Slide 28: WP reconciliation of GAAP to non-GAAP financials
WP reconciliation of GAAP to non-GAAP financials ($ millions, except per share data, unaudited) Three months ended June 30, 2019 2018 Income (loss) before applicable income taxes $ 163.1 $ 11.3 Non-GAAP Adjustments: Transition, acquisition and integration costs 46.2 52.8 Share-based compensation 24.
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