Deluxe Corporation · NYSE:DLX
Deluxe — Investor Presentation (March 2021)
24 slides from Deluxe's investor presentation, Mar 2, 2021
Slide 1: Investor Presentation March 2, 2021
© 2020 Deluxe Corporation Investor Presentation March 2, 2021
Slide 2: Cautionary Statement
2 Cautionary Statement This presentation highlights management’s intentions, projections, financial estimates or expectations about the company's future strategy or performance and are forward-looking in nature as defined in the Private Securities Litigation Reform Act of 1995. These comments are su
Slide 3: Technology Company with Strong Cash Flow
3 Technology Company with Strong Cash Flow Revenue diversity & reliable cash flow from millions of customers of all sizes across multiple industries Powerful reach, sales and distribution channels Focus on capital efficient, scalable businesses in growth markets Recurring and re-occurring revenue mo
Slide 4: Payments: High Growth Segment Enabling Businesses to Pay and Get Paid
4 Payments High Growth Segment Enabling Businesses to Pay and Get Paid Our Solutions Receivables as a Service Software automation and intelligence plus massive lockbox operations scale Our Scale Digital Disbursements Digital payouts and electronic remittance data without friction Cash Flow Managemen
Slide 5: Cloud Solutions: Moderate Growth Segment
5 Cloud Solutions Moderate Growth Segment to Grow Enterprises and Start / Manage SMBs Solutions SaaS Solutions DIY and DIFM models. Incorporation, logo, web design services, etc. Web Hosting Online presence supporting commerce Where We Win SMBs and FIs Increasing need for digital tools and support t
Slide 6: Promotional Solutions
Where We Win SMBs, Enterprises, Global Brands TraditionalSupport Rapidly Changing Mkt Demands Turn-Key Branded Solutions 6 Promotional Solutions Manage and Produce Physical Products that Promote Brand Image • Branded forms • Branded direct mailing pieces • Branded physical products • Branded merchan
Slide 7: Checks: Profitable Strategic Asset to Self-Fund Growth
7 Checks Profitable Strategic Asset to Self-Fund Growth Why We Win: • Superior Product – appropriate continued investment; design and customization options • Superior Service – dedicated customer/account teams • Superior Quality – minimal COVID-19 downtime/lost production • Trust – 106-year history
Slide 8: Powering Companies Throughout Lifecycle
8 Powering Companies Throughout Lifecycle Meaningful cross-sell opportunities START YOUR BUSINESS BRAND YOUR BUSINESS GROW YOUR BUSINESS OPTIMIZE YOUR BUSINESS ChecksCloud PromoPayments Checks Forms Print Marketing Promotional Products Retail Packaging Merchant Services Payroll Solutions Remote Depo
Slide 9: Executing Clear and Durable Strategy Pillars Driving Future Growth
9 Executing Clear and Durable Strategy 4 Pillars Driving Future Growth Sales Growth Businesses Promotional Solutions Profitability Checks • Unified Go-To-Market sales approach • Sell to new and existing customers • End dependence on acquisition-only growth • Focus on growing Payments and Cloud • Sel
Slide 10: 2020 Accomplishments
10 2020 Accomplishments Positioned for Growth in 2021 and Beyond Delivered 20.4% Adjusted EBIDTA Margin Kept our promise from Q120 despite COVID-19 Financial Strength Lowest net debt in 2.5 years Transformation Significant progress made on historic transformation Leadership Executed on segment opera
Slide 11: Delivering Sales-Driven Growth in 2020
11 Delivering Sales-Driven Growth in 2020 • Signed >3,900 new and expanded deals • Signed 6 of the top 10 deals in last decade • Added Truist to our Check segment, largest deal in company’s history • Achieved highest Check’s retention rate in 5 years • Expanded relationships with Alliance Data and C
Slide 12: Accelerating Transformation
12 Accelerating Transformation Positioned for Sustainable Growth Talent • Added and expanded in product and business development, and innovation • Advanced empowerment, inclusion, diversity & equity • Achieved Great Place to Work certification Technology Infrastructure • Continued to upgrade and mod
Slide 13: 2020 Summary: Q4 and Full Year
13 2020 Summary: Q4 and Full Year Fourth Quarter Results • Total revenue was $454.5 million, down 12.9% compared to the same period last year - Improved by 3.4% from third quarter • GAAP net income was $24.7 million • Adjusted EBITDA was $94.9 million • Adjusted EBITDA margin was 20.9% Exited 2020 w
Slide 14: 2020 Cash Flow
See appendix for GAAP to Non-GAAP Reconciliations 14 2020 Cash Flow • Delivered free cash flow of $155.0M, down $65.1M y/y - Decline due to COVID-related impacts, non-core Cloud business exits described last year, and continued secular check declines - All partially offset by lower interest, taxes,
Slide 15: Segment Trends
15 Segment Trends • Expect double-digit revenue growth for 2021 - Q1 revenue growth in low single digits as expected while we continue to implement new clients - Continue to invest to drive growth, assuming FY adjusted EBITDA margins in low 20% area PAYMENTS CLOUD • Expect loss of revenue associated
Slide 16: Positioned for Growth in 2021
16 Positioned for Growth in 2021 Resilient Business Model Full Year 2021 Outlook • Expect to achieve full year revenue growth of 0% to 2% • First quarter 2021 financial performance expected to be a continuation of fourth quarter 2020 as a result of continued pandemic impacts • Expect recovery to beg
Slide 17: Deluxe: A Compelling Investment Opportunity
17 Deluxe: A Compelling Investment Opportunity Fintech Hidden Gem: Payments | Cloud Solutions | Promotional Solutions | Checks Purpose “Champions of business so communities thrive” Values Customers First | Earn Trust | Create What’s Next | Deliver for Shareholders | Get-it-done Team Who We Are Trust
Slide 18: deluxe. trusted business technology
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Slide 20: Consolidated Condensed Statements of Income (Loss)
20 Consolidated Condensed Statements of Income (Loss) » $ in millions, except per share amounts (Unaudited) Quarter Ended December 31, Year Ended December 31, 2020 2019 2020 2019 Product revenue $322.5 $365.3 $1,230.7 $1,409.1 Service revenue 132.0 156.8 560.1 599.6 Total revenue 454.5 522.1 1,790.8
Slide 21: Segment Information
21 Segment Information $ in millions (Unaudited) See appendix for GAAP to Non-GAAP Reconciliations Quarter Ended December 31, Year Ended December 31, 2020 2019 2020 2019 Revenue: Payments $78.0 $75.7 $301.9 $269.6 Cloud Solutions 59.2 81.2 252.8 318.4 Promotional Solutions 144.0 172.7 529.6 640.9 Ch
Slide 22: Reconciliation of GAAP to Non-GAAP Measures (EBITDA and adjusted EBITDA)
22 Reconciliation of GAAP to Non-GAAP Measures (EBITDA and adjusted EBITDA) Management discloses EBITDA and Adjusted EBITDA because it believes they are useful in evaluating the company's operating performance, as the calculations eliminate the effect of interest expense, income taxes, the accountin
Slide 23: Reconciliation of GAAP to Non-GAAP Measures: Adjusted Diluted EPS
23 Reconciliation of GAAP to Non-GAAP Measures Adjusted Diluted EPS By excluding the impact of non-cash items or items that may not be indicative of ongoing operations, management believes that Adjusted Diluted EPS provides useful comparable information to assist in analyzing the company's current a
Slide 24: Net Debt and Free Cash Flow
24 Net Debt and Free Cash Flow $ in millions, except per share amounts (Unaudited) December 31, 2020 December 31,2019 Total debt $840.0 $883.5 Cash and cash equivalents (123.1) (73.6) Net debt $716.9 $809.9 NET DEBT Net debt is not a GAAP financial measure. Nevertheless, management believes that net