Fidelity National Information Services, Inc. · NYSE:FIS
Fidelity National Information Services — Q2 2017 Earnings Presentation
32 slides from Fidelity National Information Services's earnings presentation, Aug 2, 2017
Slide 1: Second Quarter 2017 Earnings Call
Second Quarter 2017 Earnings Call August 2, 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 futur
Slide 4: Business Summary
Business Summary Gary Norcross President and CEO 4
Slide 5: Strategic Accomplishments
Strategic Accomplishments • CONSISTENT execution • ENHANCING and FOCUSING asset portfolio • Global footprint creates OPPORTUNITY • POSITIONED for continued long-term growth 5
Slide 6: Second Quarter Highlights
Second Quarter Highlights • $2.3 BILLION adjusted revenue • $1.02 adjusted EPS • CONFIDENCE in outlook 6
Slide 7: Second Quarter Business Update
Second Quarter Business Update • Integrated Financial Solutions (IFS) – Broad-based solution growth – Consistent growth in corporate and digital solutions – Small business solution growth continues • Global Financial Solutions (GFS) – Growth in international payments – Another strong quarter from de
Slide 8: Strategic Growth Levers
Strategic Growth Levers • EXECUTE on differentiating capabilities • CAPITALIZE on global scale • ATTRACTIVE capital allocation principles 8
Slide 9: Financial Summary
Financial Summary Woody Woodall Chief Financial Officer 9
Slide 10: Consolidated Results
Consolidated Results Second Quarter (Q2) and Six Months (YTD) 2017 ($ millions) METRICS Q2 2017 Y-o-Y vs Q2 2016 Adj. Revenue $ 2,343 2.3% Organic(1) Adj. EBITDA $ 746 7.2% Adj. EBITDA Margin 31.8% 240 bps Adj. EPS $ 1.02 13.3% METRICS YTD 2017 Y-o-Y vs YTD 2016 Adj. Revenue $ 4,601 2.0% Organic(1)
Slide 11: Integrated Financial Solutions
Integrated Financial Solutions Second Quarter (Q2) and Six Months (YTD) 2017 ($ millions) METRICS Q2 2017 Y-o-Y vs Q2 2016 Revenue $ 1,181 2.6% Organic(1) Adj. EBITDA $ 469 4.8% Adj. EBITDA Margin 39.7% 90 bps METRICS YTD 2017 Y-o-Y vs YTD 2016 Revenue $ 2,310 2.1% Organic(1) Adj. EBITDA $ 911 4.6%
Slide 12: Integrated Financial Solutions
Integrated Financial Solutions Revenue Contribution Revenue Composition – Q2 ($ millions) RECURRING REVENUE | 87% Second ORGANIC Quarter GROWTH Banking and Wealth $ 515 2.5% PROF. SERVICES | 8% Payments 464 1.1% OTHER | 5% Corporate and Digital 202 6.1% Total Integrated $ 1,181 2.6% Financial Soluti
Slide 13: Global Financial Solutions
Global Financial Solutions Second Quarter (Q2) and Six Months (YTD) 2017 ($ millions) METRICS Q2 2017 Y-o-Y vs Q2 2016 Revenue $ 1,076 3.9% Organic(1) Adj. EBITDA $ 331 15.5% Adj. EBITDA Margin 30.8% 340 bps METRICS YTD 2017 Y-o-Y vs YTD 2016 Revenue $ 2,095 3.5% Organic(1) Adj. EBITDA $ 614 14.2% A
Slide 14: Global Financial Solutions
Global Financial Solutions Revenue Contribution Revenue Composition – Q2 ($ millions) RECURRING REVENUE | 66% Second ORGANIC Quarter GROWTH Institutional and $ 513 1.4% PROF. SERVICES | 28% Wholesale Banking and 414 6.2% Payments Consulting 149 6.7% OTHER | 6% Total Global $ 1,076 3.9% Financial Sol
Slide 15: Corporate and Other
Corporate and Other Second Quarter (Q2) and Six Months (YTD) 2017 ($ millions) METRICS Q2 2017 Y-o-Y vs Q2 2016 Adj. Revenue $ 86 (17.8)% Organic(1) Adj. EBITDA $ (54) n/a Corporate Expense $ 75 (4.5)% METRICS YTD 2017 Y-o-Y vs YTD 2016 Adj. Revenue $ 196 (12.0)% Organic(1) Adj. EBITDA $ (97) n/a Co
Slide 16: Cash Flow and Capital Allocation Strategy
Cash Flow and Capital Allocation Strategy • Cash flow generation – Free cash flow of $275 million in Q2 2017 and $637 million YTD • Maintaining a strong balance sheet – $9.7 billion debt outstanding as of June 30, 2017 • Shareholder returns – Dividends of $97 million in Q2 2017 and $192 million YTD
Slide 17: Recent Transactions
Recent Transactions • Consulting divestiture – Announced May 23, 2017 and closed July 31, 2017 – Net cash proceeds of $441 million – FIS to retain 40 percent equity interest • Refinancing activities – Highlights value of global footprint – Access to broader investor base and new sources of capital –
Slide 18: 2017 Organic Revenue Growth Reiterated
2017 Organic Revenue Growth Reiterated ($ millions) FY 2017 Guidance FY 2017 Guidance METRICS % Growth $ Range Consolidated Organic 2% – 3% $9,100 – $9,200 Revenue Growth IFS Organic 3% – 4% $4,620 – $4,670 Revenue Growth GFS Organic 4% – 5% $4,150 – $4,200 Revenue Growth Reflects impact of divestit
Slide 19: 2017 Adjusted EPS Guidance Increased
2017 Adjusted EPS Guidance Increased METRICS FY 2017 Guidance Original Adjusted EPS Guidance $4.15 – $4.30 Net impact of divestitures $(0.10) Impact of debt refinance $0.05 Year-to-date results, outlook and tax rate $0.07 – $0.12 Net Impact to FY 2017 Adjusted EPS +$0.07 / +$0.02 Updated Adjusted EP
Slide 20: Appendix
APPENDIX His
Slide 21: Consolidated Q2 GAAP to Organic Growth Bridge
Consolidated Q2 GAAP to Organic Growth Bridge Second Quarter 2016 Second Quarter 2017 $2,380 $2,380 $59 $2,360 $2,360 $2,352 $9 $2,341 $2 $2,340 $2,340 $2,320 $2,320 $2,305 $2,300 $2,300 $2,300 $(64) $2,280 $2,280 $2,260 $2,260 Q2 2016 Deferred M&A Q2 2016 Q2 2017 Deferred F/X Q2 2017 GAAP Revenue A
Slide 22: Consolidated YTD GAAP to Organic Growth Bridge
Consolidated YTD GAAP to Organic Growth Bridge Six Months 2016 Six Months 2017 $4,650 $4,650 $140 $11 $4,612 $5 $4,600 $4,600 $4,596 $4,550 $4,550 $4,521 $(105) $4,500 $4,500 $4,486 $4,450 $4,450 $4,400 $4,400 YTD 2016 Deferred M&A YTD 2016 YTD 2017 Deferred F/X YTD 2017 GAAP Revenue Adjustment Orga
Slide 23: Forward-Looking Statements
Forward-Looking Statements This presentation and today’s webcast contain “forward-looking statements” within the meaning of the U.S. federal securities laws. Statements that are not historical facts, including statements about anticipated financial outcomes, including any earnings guidance of the Co
Slide 24: Forward-Looking Statements
Forward-Looking Statements • internal or external security breaches of our systems, including those relating to unauthorized access, theft, corruption or loss of personal information and computer viruses and other malware affecting our software or platforms, and the reactions of customers, card asso
Slide 25: Non-GAAP Financial Information and Reconciliation
Non-GAAP Financial Information and Reconciliation Generally Accepted Accounting Principles (GAAP) is the term used to refer to the standard framework of guidelines for financial accounting. GAAP includes the standards, conventions, and rules accountants follow in recording and summarizing transactio
Slide 26: Non-GAAP Financial Information and Reconciliation
Non-GAAP Financial Information and Reconciliation Adjusted revenue consists of reported revenue, increased to reverse the purchase accounting deferred revenue adjustment made upon the acquisition of SunGard. The deferred revenue adjustment represents revenue that would have been recognized in the no
Slide 27: Non-GAAP Financial Information and Reconciliation
Non-GAAP Financial Information and Reconciliation Adjusted net earnings from continuing operations excludes the impact of certain costs and other transactions which management deems non-operational in nature, the removal of which improves comparability of operating results across reporting periods.
Slide 28: Organic Revenue Growth Calculation
Organic Revenue Growth Calculation Second Quarter (Q1) 2017 ($ millions) Three months ended June 30, 2017 Integrated Global Financial Financial Corporate Solutions Solutions and Other Consolidated Processing and services revenue $ 1,181 $ 1,076 $ 84 $ 2,341 Non-GAAP adjustments: Acquisition deferred
Slide 29: Organic Revenue Growth Calculation
Organic Revenue Growth Calculation Six Months (YTD) 2017 ($ millions) Six months ended June 30, 2017 Integrated Global Financial Financial Corporate Solutions Solutions and Other Consolidated Processing and services revenue $ 2,310 $ 2,095 $ 191 $ 4,596 Non-GAAP adjustments: Acquisition deferred rev
Slide 30: Reconciliation of GAAP to Non-GAAP Financials
Reconciliation of GAAP to Non-GAAP Financials ($ millions, Except per Share Data, Unaudited) Three months ended Six months ended June 30, June 30, 2017 2016 2017 2016 Net earnings from continuing operations attributable to FIS $ 132 $ 120 $ 270 $ 175 Provision for income taxes 132 66 211 97 Interest
Slide 31: Reconciliation of GAAP to Non-GAAP Financials
Reconciliation of GAAP to Non-GAAP Financials ($ millions, Except per Share Data, Unaudited) Three months ended Six months ended June 30, June 30, 2017 2016 2017 2016 Earnings from continuing operations before income taxes $ 272 $ 189 $ 495 $ 279 Provision for income taxes 132 66 211 97 Net earnings
Slide 32: Reconciliation of GAAP to Non-GAAP Financials
Reconciliation of GAAP to Non-GAAP Financials ($ millions, Except per Share Data, Unaudited) Three months ended Six months ended June 30, 2017 June 30, 2017 Net cash provided by operating activities $ 74 $ 528 Non-GAAP adjustments: Acquisition, integration and severance payments 46 62 Tax payments o
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