Ncr Atleos Corporation · NYSE:NATL
Ncr Atleos — Investor Presentation (December 2023)
35 slides from Ncr Atleos's investor presentation, Dec 5, 2023
Slide 1: NCR Atleos Investor Update
NCR Atleos Investor Update December 5, 2023 Tim Oliver, Chief Executive Officer Paul Campbell, Chief Financial Officer Stuart MacKinnon, Chief Operating Officer 1
Slide 2: Forward-Looking Statements
Forward-Looking Statements NCR Atleos Corporation (“NCR Atleos,” “Atleos” or the “Company”), cautions that comments made during this presentation 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 o
Slide 3: Forward-Looking Statements
Forward-Looking Statements Forward-looking statements are based on our current beliefs, expectations and assumptions, which may not prove to be accurate, and involve a number of known and unknown risks and uncertainties, many of which are out of the Company's control, including the failure of NCR At
Slide 4: Notes to Investors
Notes to Investors NON-GAAP MEASURES. While Atleos 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:
Slide 5: Business Update
5 Tim Oliver, Chief Executive Officer Business Update
Slide 6: Overview
Overview Separation Complete Strategic Progress: ATM-As-A-Service Positive Momentum Heading Into 2024 Solid Third Quarter Results Strong Fundamentals and Opportunity to Create Value
Slide 7: Self-Service Banking Overview
7 Recent Performance Services: 53% of Revenue Software: 17% of Revenue Hardware: 30% of Revenue • Stable organic revenue growth • Strong profitability and cash flow generation • Supports the largest footprint of ATM’s globally • Industry leading hardware and software solutions provided around the wo
Slide 8: Network Segment Overview
8 Located in Blue Chip Retail Partners • Stable organic revenue growth supported by traditional and emerging revenue streams • Strong profitability and cash flow generation • Delivering frictionless self-service experience • Migrating transactions from teller and retail service desk to the ATM +80,0
Slide 9: Takeaways
Takeaways Positive Momentum Heading Into 2024 Solid Third Quarter Results Strong Fundamentals and Opportunity to Create Value Strategic Progress: ATM-As-A-Service
Slide 10: Financial Review
10 Paul Campbell, Chief Financial Officer Financial Review
Slide 11: Q3 2023 Financial Results
Total Revenue/Recurring Adjusted EBITDA Non-GAAP Diluted EPS(1) Adjusted Free Cash Flow - Unrestricted $ in millions, except for EPS $140 $71 $111 $197 $198 $210 $1.47 $1.67 $1.77 (1) For all periods presented, non-GAAP diluted EPS is calculated using shares distributed to NCR Corporation shareholde
Slide 12: Self-Service Banking Revenue and Adjusted EBITDA
Revenue Adjusted EBITDA Key Strategic Metrics Self-Service Banking 12 $ in millions, except units and percentages $631 $654 $656 $173 $140 $172 Recurring Revenue % ATMaaS Units (in thousands) ARR Up 300 bps y/y Up 46% y/y Up 9% y/y 18.0 18.2 12.5 $1,500 $1,551 $1,420 56% 58% 59%
Slide 13: Network Revenue and Adjusted EBITDA
$ in millions, except units and ARPU Network 13 Revenue Adjusted EBITDA Key Strategic Metrics Down 3% y/y Self-Service Banking Terminal Network (in thousands) Up 8% y/y LTM ARPU (in thousands) $313 $309 $335 $99 $91 $113 $14.8 $14.4 $13.7 8384 86
Slide 14: Revenue & Adjusted EBITDA By Segment
Revenue Q3 2023 Q2 2023 Q3 2022 Self-Service Banking $656 $654 $631 Network 335 309 313 Technology & Telecommunications 49 49 53 Other(1) 27 28 33 Total Atleos $1,067 $1,040 $1,030 Adjusted EBITDA Q3 2023 Q2 2023 Q3 2022 Self-Service Banking $172 $173 $140 Network 113 91 99 Technology & Telecommunic
Slide 15: Preliminary Views on 2024
Preliminary Views on 2024 Revenue: $4.3 - $4.5 billion • Self Service Banking ~$2.6bn +1-3% y/y • Network ~$1.4bn +5-7% y/y • TNT ~$0.2bn flat y/y; Other $0.2bn • Mix shift to higher margin recurring revenues Free Cash Flow: ~$200 million1 [increased from $150M in Investors Day] • Reduce capital exp
Slide 16: ATMaaS and SSB Segment Model Drivers
16 ATMaaS 2023E 2024E 2027E Units Year End ~20K ~35K ~125K Units Avg. for Year) ~15K ~27.5K ~105K Revenue (millions) $150M $260M $1,250M Capex $ per Unit ~$10K ~$10K ~$10K SSB Total Segment Installed Base Units Avg. For Year ~520K+ ~520K+ ~520K+ Revenue (billions) ~$2.6B +1%-3% $3.5B Gross Margin ~3
Slide 17: Liquidity, Debt Schedule and Capital Allocation
17 ($ Values in millions) 9/30/23 10-Q Split Adjustments Adjusted Post Split Liquidity $923 $0 $775 Revolving Credit Availability 500 0 500 Cash (unrestricted)* 423 (148)* 275 Total Debt 2,110 835 2,945 Net Debt $1,687 $983 $2,670 Net Leverage Ratio1 NA NA 3.6x Debt Schedule Par Value ( $M) Rate Mat
Slide 18: Q&A
18 Q&A
Slide 19: Appendix
19 Appendix
Slide 20: Certain Terms & Key Performance Indicators
Certain Terms & Key Performance Indicators (KPIs) Recurring revenue - all revenue streams from contracts where there is a predictable revenue pattern that will occur at regular intervals with a relatively high degree of certainty. This includes hardware and software maintenance revenue, processing r
Slide 21: Q3 2023 GAAP Results
Q3 2023 Q3 2022 % Change Revenue $1,067 $1,030 4% Gross Margin 268 241 11% Gross Margin Rate 25.1% 23.4% Operating Expenses 177 138 28% % of Revenue 16.6% 13.4% Operating Income 91 103 (12)% % of Revenue 8.5% 10.0% Interest and other expense, net (1) (3) (67)% Income Tax Expense (Benefit) 147 36 308
Slide 22: Q3 2023 Operational Results
$ in millions, except per share amounts Q3 2023 OPERATIONAL RESULTS
Slide 23: Non-GAAP Measures
While Atleos 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 At
Slide 24: Net Debt and Adjusted EBITDA
Net Debt and Adjusted Earnings Before Interest, Taxes, Depreciation and Amortization (Adjusted EBITDA). Atleos 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, excluding original issue
Slide 25: Non-GAAP Reconciliations
Atleos management's definitions and calculations of these non-GAAP measures may differ from similarly-titled measures reported by other companies and cannot, therefore, be compared with similarly-titled measures of other companies. These non-GAAP measures should not be considered as substitutes for,
Slide 26: GAAP to Non-GAAP Reconciliation
GAAP TO NON-GAAP RECONCILIATION $ in millions
Slide 27: GAAP to Non-GAAP Reconciliation
GAAP TO NON-GAAP RECONCILIATION $ in millions
Slide 28: Q3 2023 QTD GAAP to Non-GAAP
Q3 2023 QTD GAAP Transformation Costs Stock-based Compensation Acquisition- related amortization of intangibles Separation Costs Pension Mark- to-Market Adjustments Q3 2023 QTD non-GAAP Product revenue 252 $— $— $— $— $— $252 Service revenue 815 — — — — — 815 Total revenue 1,067 — — — — — 1,067 Cost
Slide 29: Q2 2023 QTD GAAP to Non-GAAP
Q2 2023 QTD GAAP Transformation Costs Stock-based Compensation Acquisition- related amortization of intangibles Separation Costs Q2 2023 QTD non-GAAP Product revenue 262 $— $— $— $— 262 Service revenue 778 — — — — 778 Total revenue 1,040 — — — — 1,040 Cost of products 215 — (2) — — 213 Cost of servi
Slide 30: Q3 2022 QTD GAAP to Non-GAAP
Q3 2022 QTD GAAP Transformation Costs Stock-based Compensation Costs Acquisition- related amortization of intangibles Q3 2022 QTD non-GAAP Product revenue $260 $— $— $— $260 Service revenue 770 — — — 770 Total revenue 1,030 — — — 1,030 Cost of products 225 (1) (2) — 222 Cost of services 564 (2) (4)
Slide 31: Q3 2023 Non-GAAP Earnings Per Share
Q3 2023 QTD Q3 2023 QTD non- GAAP Net Income attributable to Atleos common stockholders $(58) $125 Number of basic and diluted shares outstanding 70.6 70.6 Earnings per share - basic and diluted(1) $(0.82) $1.77 (1) On October 16, 2023, the date of Separation, 70,606,892 shares of Atleos’s Common St
Slide 32: Q2 2023 Non-GAAP Earnings Per Share
Q2 2023 QTD Q2 2023 QTD non- GAAP Net Income attributable to Atleos common stockholders $53 $118 Number of basic and diluted shares outstanding 70.6 70.6 Earnings per share - basic and diluted(1) $0.75 $1.67 (1) On October 16, 2023, the date of Separation, 70,606,892 shares of Atleos’s Common Stock,
Slide 33: Q3 2022 Non-GAAP Earnings Per Share
Q3 2022 QTD GAAP Q3 2022 QTD non- GAAP Net Income attributable to Atleos common stockholders $64 $104 Number of basic and diluted shares outstanding 70.6 70.6 Earnings per share - basic and diluted $0.91 $1.47 (1) On October 16, 2023, the date of Separation, 70,606,892 shares of Atleos’s Common Stoc
Slide 34: Adjusted Free Cash Flow Reconciliation
Q3 2023 Q2 2023 Q3 2022 Cash provided by operating activities $147 $80 $226 Less: Total capital expenditures $(48) $(14) $(36) Plus: Pension contributions $9 $— $1 Plus: Restricted cash settlement activity $3 $5 $(51) Adjusted Free Cash Flow $111 $71 $140 $ in millions GAAP TO NON-GAAP RECONCILIATIO
Slide 35: Cash Usage and ATM Install Base – Additional Supporting Articles
Cash Usage and ATM Install Base – Additional Supporting Articles 35 ATM market has grown in more than half of countries analyzed by RBR U.S. ATM count grew by 21,000 terminals in 2022 21 states have enacted or are progressing cashless ban legislation Cash withdrawal value recovers after pandemic imp