Fidelity National Information Services, Inc. · NYSE:FIS

Fidelity National Information Services — Q4 2018 Earnings Presentation

37 slides from Fidelity National Information Services's earnings presentation, Feb 12, 2019

  1. Slide 1: Fourth Quarter 2018 Earnings Call

    Fourth Quarter 2018 Earnings Call February 12, 2019 ©2019 FIS and/or its subsidiaries. All Rights Reserved.

  2. Slide 2: Agenda

    Agenda Gary Norcross, Business Summary Chairman, President and CEO Woody Woodall, Financial Summary Chief Financial Officer 2

  3. 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

  4. Slide 4: Business Summary

    Business Summary Gary Norcross Chairman, President and CEO 4

  5. Slide 5: Full-Year 2018 Highlights

    Full-Year 2018 Highlights • ACCELERATED revenue growth • GENERATED significant margin expansion • DELIVERED double-digit earnings growth 5

  6. Slide 6: Strategic Growth Levers

    Strategic Growth Levers INNOVATE DRIVE BUILD for long-term strong sales with on our global growth market-leading scale solutions 6

  7. Slide 7: Financial Summary

    Financial Summary Woody Woodall Chief Financial Officer 7

  8. Slide 8: Consolidated Results

    Consolidated Results Fourth Quarter (Q4) and Full-Year (FY) 2018 ($ millions, except per share amounts) METRICS Q4 2018 YOY vs Q4 2017 Adj. Revenue $ 2,167 3.2% Organic(1) Adj. EBITDA $ 864 5.3% Adj. EBITDA Margin 39.9% 200 bps Adj. EPS $ 1.60 29.0% METRICS FY 2018 YOY vs FY 2017 Adj. Revenue $ 8,42

  9. Slide 9: Integrated Financial Solutions

    Integrated Financial Solutions Fourth Quarter (Q4) and Full-Year (FY) 2018 ($ millions) METRICS Q4 2018 YOY vs Q4 2017 Revenue $ 1,126 2.5% Organic(1) Adj. EBITDA $ 523 4.5% Adj. EBITDA Margin 46.4% 90 bps METRICS FY 2018 YOY vs FY 2017 Revenue $ 4,401 3.9% Organic(1) Adj. EBITDA $ 1,962 4.7% Adj. E

  10. Slide 10: Integrated Financial Solutions Revenue Contribution

    Integrated Financial Solutions REVENUE CONTRIBUTION ($ millions) Fourth Organic Organic Full-Year Quarter Growth Growth Banking and Wealth $ 500 1.5% $ 2,037 4.3% Payments 408 5.2% 1,521 3.3% Corporate and Digital 219 0.3% 844 3.7% Total Integrated $ 1,126 2.5% $ 4,401 3.9% Financial Solutions(1) (1

  11. Slide 11: Global Financial Solutions

    Global Financial Solutions Fourth Quarter (Q4) and Full-Year (FY) 2018 ($ millions) METRICS Q4 2018 YOY vs Q4 2017 Revenue $ 976 3.7% Organic(1) Adj. EBITDA $ 418 9.1% Adj. EBITDA Margin 42.8% 400 bps METRICS FY 2018 YOY vs FY 2017 Revenue $ 3,718 2.1% Organic(1) Adj. EBITDA $ 1,391 5.1% Adj. EBITDA

  12. Slide 12: Global Financial Solutions Revenue Contribution

    Global Financial Solutions REVENUE CONTRIBUTION ($ millions) Fourth Organic Organic Full-Year Quarter Growth Growth Institutional and $ 516 (2.0)% $ 2,000 - Wholesale Banking and 460 10.7% 1,719 5.0% Payments Total Global $ 976 3.7% $ 3,718 2.1% Financial Solutions(1) (1) Amount may not sum due to r

  13. Slide 13: Corporate and Other

    Corporate and Other Fourth Quarter (Q4) and Full-Year (FY) 2018 ($ millions) METRICS Q4 2018 YOY vs Q4 2017 Adj. Revenue $ 65 8.3% Organic(1) Adj. EBITDA $ (77) n/a Corporate Expense $ 87 10.1% METRICS FY 2018 YOY vs FY 2017 Adj. Revenue $ 308 (3.1)% Organic(1) Adj. EBITDA $ (220) n/a Corporate Expe

  14. Slide 14: Debt Review and Capital Allocation

    Debt Review and Capital Allocation • Cash flow generation – Free cash flow of $551 million in Q4 2018 – Free cash flow of $1,482 million in FY 2018 • Maintaining a strong balance sheet – $9.0 billion debt outstanding as of December 31, 2018 – Effective weighted average interest rate of 3.3% • Shareh

  15. Slide 15: Joint Venture Dissolution and D&A Revision

    Joint Venture Dissolution and D&A Revision • Brazilian JV dissolution closed 12/31/18 – $225 million reduction to annual revenue – $0.08 impact to annual adjusted EPS • Bullish outlook on Latin American region • Change to Adjusted EPS definition – Previously excluded cost of amortization of purchase

  16. Slide 16: Adjusted EPS Bridge

    Adjusted EPS Bridge METRICS FY 2018 Adjusted EPS (Prior Method) $5.23 Impact of D&A Change $1.70 Adjusted EPS (New Method) $6.93 Impact of Brazilian JV Dissolution ($0.08) Impact of Divestitures ($0.04) Adjusted EPS Base $6.81 16

  17. Slide 17: Full-Year 2018 Organic Revenue Base

    Full-Year 2018 Organic Revenue Base METRICS ($ millions) FY 2018 Adjusted Revenue $8,427 Impact of Brazilian JV Dissolution $(225) Impact of Divestitures $(83) FY 2018 Organic Base $8,119 17

  18. Slide 18: Full-Year 2019 Guidance Summary

    Full-Year 2019 Guidance Summary ($ millions, except per share data) METRICS GUIDANCE Consolidated Revenue ~$8,360 – $8,440 Organic Growth 3.5% – 4.5% Adjusted EBITDA Margin Expansion 150 – 200 bps Adjusted EPS $7.35 – $7.55 Year-over-year growth(1) 8% – 11% (1) Compared to FY 2018 Adjusted EPS of $6

  19. Slide 19: Why Invest in FIS

    Why Invest in FIS Continued High-quality Double-digit Strong Compelling Market Recurring EPS Growth Cash Flow Investment Leadership Revenue Generation Thesis 19

  20. Slide 20: Appendix

    APPENDIX His

  21. Slide 21: FY 2019 Guidance – Additional Assumptions

    FY 2019 Guidance – Additional Assumptions METRICS GUIDANCE Negative F/X Impact to Revenue ~$45 million Net Interest Expense ~$295 - $305 million Effective Tax Rate ~19% Capital Expenditures ~7.5% of revenue Free Cash Flow Conversion ~20% of revenue 21

  22. Slide 22: Organic Revenue Adjustments

    Organic Revenue Adjustments Q1 – Q4 2018 ($ millions) METRICS Q1 2018 Q2 2018 Q3 2018 Q4 2018 Integrated Financial Solutions $(8) $(9) $(8) $(7) Global Financial Solutions (60) (53) (52) (63) Corporate and Other (18) (18) (12) - Consolidated FIS $(86) $(80) $(72) $(70) 22

  23. Slide 23: Debt Summary

    Debt Summary ($ in millions) *May not foot due to rounding (1) Weighted average rate as of December 31, 2018 (2) EUR Notes converted at EURUSD 1.14, GBP Notes converted at GBPUSD 1.27, negative fx impact of $25 (3) Inclusive of swaps executed in Q4 2018 Confidential and Proprietary 23

  24. Slide 24: 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

  25. Slide 25: 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

  26. Slide 26: 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 in the United States. GAAP includes the standards, conventions, and rules accountants follow in recording and s

  27. Slide 27: Non-GAAP Financial Information and Reconciliation

    Non-GAAP Financial Information and Reconciliation Adjusted revenue consists of 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 cour

  28. Slide 28: Non-GAAP Financial Information and Reconciliation

    Non-GAAP Financial Information and Reconciliation Adjusted net earnings (New Method) 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. It also exclud

  29. Slide 29: Reconciliation of Prior Method to New Method EPS

    Reconciliation of Prior Method to New Method EPS Q1 – Q4 2018 and Full-Year 2018, 2017 (unaudited) Three months ended Years ended Mar. 31, Jun. 30, Sept. 30, Dec. 31, December 31, 2018 2018 2018 2018 2018 2017 Adjusted net earnings, net of tax (Prior Method) $ 363 $ 408 $ 438 $ 526 $ 1,737 $ 1,433 P

  30. Slide 30: Organic Revenue Growth Calculation

    Organic Revenue Growth Calculation Fourth Quarter (Q4) 2018 ($ millions, unaudited) Three months ended December 31, 2018 Integrated Global Financial Financial Corporate Solutions Solutions and Other Consolidated Revenue $ 1,126 $ 976 $ 65 $ 2,167 Non-GAAP adjustments: Acquisition deferred revenue ad

  31. Slide 31: Organic Revenue Growth Calculation

    Organic Revenue Growth Calculation Full-Year (FY) 2018 ($ millions, unaudited) Year ended December 31, 2018 Integrated Global Financial Financial Corporate Solutions Solutions and Other Consolidated Revenue $ 4,401 $ 3,718 $ 304 $ 8,423 Non-GAAP adjustments: Acquisition deferred revenue adjustment -

  32. Slide 32: Reconciliation of GAAP to Non-GAAP Financials

    Reconciliation of GAAP to Non-GAAP Financials ($ millions, unaudited) Three months ended Year ended December 31, December 31, 2018 2017 2018 2017 Net earnings attributable to FIS common stockholders $ 299 $ 934 $ 846 $ 1,261 Provision (benefit) for income taxes 85 (581) 208 (321) Interest expense, n

  33. Slide 33: Reconciliation of GAAP to Non-GAAP Financials (Prior Method)

    Reconciliation of GAAP to Non-GAAP Financials (Prior Method) ($ millions, except per share amounts, unaudited) Three months ended Year ended December 31, December 31, 2018 2017 2018 2017 Earnings before income taxes and equity method investment earnings (loss) $ 400 $ 365 $ 1,104 $ 976 Provision (be

  34. Slide 34: Reconciliation of GAAP to Non-GAAP Financials

    Reconciliation of GAAP to Non-GAAP Financials ($ millions, unaudited) Three months ended Year ended December 31, 2018 December 31, 2018 Net cash provided by operating activities $ 705 $ 1,993 Non-GAAP adjustments: Acquisition, integration and other payments 19 96 Tax payments on divestitures - 24 Se

  35. Slide 35: Reconciliation of GAAP to Non-GAAP Financials

    Reconciliation of GAAP to Non-GAAP Financials Year ended December 31, 2019 Low High Consolidated GAAP revenue increase/(decrease) - - Estimated adjustments 3.5% 4.5% Consolidated organic revenue increase/(decrease) 3.5% 4.5% Estimated adjustments for the full-year 2018 needed to create a comparable

  36. Slide 36: Reconciliation of GAAP to Non-GAAP Financials

    Reconciliation of GAAP to Non-GAAP Financials Year ended December 31, 2019 Low High Net earnings margin attributable to FIS common stockholders 13.5% 14.5% Estimated adjustments 25.2% 24.7% Adjusted EBITDA margin 38.7% 39.2% Estimated adjustments for the full-year 2019 include acquisition, integrati

  37. Slide 37: Reconciliation of GAAP to Non-GAAP Financials

    Reconciliation of GAAP to Non-GAAP Financials Year ended December 31, 2019 Low High Net earnings per share - diluted attributable to FIS common stockholders $ 3.50 $ 3.80 Estimated adjustments 3.85 3.75 Adjusted net earnings per share - diluted attributable to FIS common stockholders (New Method) $

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