Aci Worldwide, Inc. · NASDAQ:ACIW
Aci Worldwide — FY2009 Earnings Presentation
47 slides from Aci Worldwide's earnings presentation, Feb 25, 2010
Slide 1: December 31, 2009 Quarterly and Year End Results
December 31, 2009 Quarterly and Year End Results
Slide 2: Safe Harbor for Forward-Looking Statements
This presentation contains forward-looking statements based on current expectations that involve a number of risks and uncertainties. The forward- looking statements are made pursuant to safe harbor provisions of the Private Securities Litigation Reform Act of 1995. A discussion of these forward- lo
Slide 3: Agenda
Phil Heasley, Chief Executive Officer Ron Totaro, Chief Operating Officer Scott Behrens, Chief Financial Officer Q&A: Phil Heasley, Ron Totaro, and Scott Behrens Agenda
Slide 4: Year in Review
Phil Heasley, Chief Executive Officer Year in Review
Slide 5: 2009 Year-End Summary
2009 Year-End Summary Rise in all recurring revenue categories demonstrating intrinsic business improvement Particularly in maintenance revenue rise of $6.7 million over prior year Significant reduction in business operating costs Total savings of $31.8 million achieved over operating expenses in 20
Slide 6: Business Review
Ron Totaro, Chief Operating Officer Business Review
Slide 7: General 2009 Sales Market Summary
General 2009 Sales Market Summary Demonstrated ability to renew contracts at profitable rates in 2009 Resulted in higher recurring revenue business throughout the year Impact of financial markets crisis Led to further sales cycle elongation so new contracts/new apps did not sell at the same rate as
Slide 8: Q4 2009 Sales Results
Q4 2009 Sales Results Q4 2009 had fewer new account and term extension dollars than prior year Prior year impacted by larger term renewals compared to 2009 renewals Slight rise in new application and add-ons Top 5 customers accounted for 35% of sales performance in the quarter as compared to 45% in
Slide 9: Q4 2009 Channel Sales Results
Q4 2009 Channel Sales Results Sales (net of Term Extensions) Term Extension Sales Total Sales Q4 2009 v Q4 2008 Channel Performance: Americas ... Top 5 customers accounted for $57 million of sales in Q4 09 vs. $84.6 million of sales in Q4 08. Americas sales figures driven by the strong demand for wh
Slide 10: Historic Sales By Quarter 2008-2009
Historic Sales By Quarter 2008-2009 Historic Sales By Quarter 2008-2009
Slide 11: Americas Q4/Year in Review
Americas Q4/Year in Review Q4 revenue of $68.0 million, an increase of 18% over Q4 2008 Driven by non-recurring license fees and go-lives Annual revenue of $223.0 million, an increase of 8% over prior year Driven by increased recurring revenue and timely completion of services projects. Strong sales
Slide 12: 2010 Opportunities - Americas
2010 Opportunities- Americas Cross Selling Selling risk products into existing customer base Leveraging retail relationships to sell wholesale and online banking Canada Expansion of our risk footprint New BASE24-eps(r) business Extended Support Services Latin America Migration services to move custo
Slide 13: EMEA Q4/Year in Review
EMEA Q4/Year in Review Q4 revenue of $43.2 million, an increase of 9% over Q4 2008 revenue of $39.4 million Significant license fee revenue derived from Q4 sales Q4 large services deals at El Corte Ingles and Muslim Commercial Bank Annual revenue of $137.1 million, a decrease of 19% Prior year inclu
Slide 14: 2010 Opportunities - EMEA
2010 Opportunities- EMEA Wholesale Solutions Processors Consolidated license renewals Expansion of system footprint with correlating services Back office acquisitions and alliances substantially increase the value of the retail payments proposition Northern Europe Key renewals Several large UK banks
Slide 15: Asia-Pacific Q4/Year in Review
Asia-Pacific Q4/Year in Review Q4 revenue of $14.7 million, an increase of 23% due to significant project completion with Thai bank Recurring revenue up 6% due to customer go-lives Strong services revenues due to project completions in general Annual revenue of $45.7 million, an increase of 11% over
Slide 16: 2010 Opportunities - Asia
2010 Opportunities- Asia Online Banking Cross Selling Selling risk products into existing customer base Cross leveraging retail relationships to sell wholesale and online banking China Direct model Retail and risk opportunities ASEAN Wholesale payments Expansion of retail footprint
Slide 17: Customer Revenue by Industry Type
Customer Revenue by Industry Type Reduction in bank/credit union revenue due to variance related to Faster Payments license fees recognized in 2008 'Processor' segment is down due to the significant project completion for Mastercard in 2008 which did not recur in 2009 3% attrition rates across the c
Slide 18: Product and Cost Containment Initiatives
Product and Cost Containment Initiatives
Slide 19: Major Product Improvements/Initiatives 2009
Major Product Improvements/Initiatives 2009 Implemented first deployment of Proactive Risk Manager (PRM) on IBM System z using DB2 and Websphere MQ for a customer in Asia-Pacific Implemented BASE24-eps(r) 08.2 on IBM System z, with DB2 and WebSphere MQ for a customer in EMEA Delivered a significant
Slide 20: The Agile Payments Strategy in Action
The Agile Payments Strategy in Action Be the leading provider of a unified solution that initiates, manages, secures and operates payments to maximize the total economic impact for our customers. Identified key products required for a holistic solution. Deconstructing products into software services
Slide 21: Alliance Relationships Expand during 2009
Alliance Relationships Expand during 2009 Hired senior alliances leader to build and manage all synergistic third-party relationships Alliance approval model refinement begun Now instituting "Alliance Leadership Council" (ALC) approach Signed alliance with Bell ID Key IBM alliance deals in 2009 RBS
Slide 22: Business Improvement Achievements in 2009
Business Improvement Achievements in 2009 Rationalized headcount in mature markets and reinvested in growth regions Hired chief product officer, services leaders in EMEA and Asia as well as new EMEA sales leader Globalized Help24 customer support Purchased selected, strategic products and engineered
Slide 23: Financial Review
Financial Review Scott Behrens, Chief Financial Officer
Slide 24: Key Takeaways from the Quarter
Key Takeaways from the Quarter Strong Operating Income Rise of ~$15 million versus Q4 2008; rise of $23 million compared to Q3 OFCF of $29.8 million Sequential improvement of $40.2 million compared to Q3 2009 Revenue growth of 15%; achieved $125.9 million in the current quarter versus $109.2 million
Slide 25: Key Takeaways from the Year
Key Takeaways from the Year Higher Operating Income Rise of ~$20 million versus 2008 Recurring Revenue rise of approximately $8 million Revenue essentially flat y-o-y excluding impact of FX Expenses down dramatically as a result of restructuring ~$30 million reduction in personnel related costs Othe
Slide 26: Backlog is the Significant Driver of Current Period Revenue
Backlog is the Significant Driver of Current Period Revenue Larger reliance on go-lives (48 achieved in Q4) and revenue releases from backlog than in prior fourth quarters as more projects successfully reached the end of their implementations Fewer large renewals compared to 2008 resulted in lower r
Slide 27: Revenue Phasing is consistent over past two years
Revenue Phasing is consistent over past two years Revenue Phasing is consistent over past two years Q2 2008 revenue was higher than a normal quarter due to Faster Payments regulatory mandate in the UK Generally we see stronger revenue in the second half of the year
Slide 28: Operating Income doubled over the past quarters
Operating Income doubled over the past 8 quarters Operating income also remains back-half loaded and has grown significantly as we rationalized expenses globally significantly as we rationalized expenses globally significantly as we rationalized expenses globally
Slide 29: Performance versus 2009 Guidance
Performance versus 2009 Guidance Achieved $424.6 million in sales Signed $170 million of business in Q4 2009 alone Led by ~$107 million in US sales of which ~$80 million were wholesale accounts sold primarily to large banks First quarter wholesale purchases in US exceeded retail Revenue of ~ $406 mi
Slide 30: 2010 Guidance
2010 Guidance Revenue Expect revenue growth even as we anticipate fewer term renewals in 2010 where revenue recognition occurs immediately Operating Income Operating income improves from the on-going focus on profitable sales and efficient expense management 15%-20% growth range implies expense grow
Slide 31: Other factors impacting Guidance
Other factors impacting Guidance Sales will be flat over 2009 performance Expenses Cash expenses should grow approximately 2-3% in calendar year Dep'n and Amortization of approximately $26 million Non Cash compensation expense of approximately $7-8 million OFCF should trend higher in line with opera
Slide 32: Appendix
Appendix
Slide 33: Operating Free Cash Flow
Operating Free Cash Flow ($ millions) Quarter Ended December 31, Quarter Ended December 31, 2009 2008 Net cash provided by operating activities* $32.8 $ 31.6 Selected non-recurring items: Net after-tax cash payments associated with employee-related actions 1.3 2.0 Less capital expenditures (3.4) (0.
Slide 34: 60-Month Backlog
60-Month Backlog ($ millions) Quarter Ended Quarter Ended Quarter Ended December 31, September 30, December 31, 2009 2009 2008 Americas $850 $829 $773 EMEA 510 505 480 Asia/Pacific 157 156 157 Backlog 60-Month $1,517 $1,490 $1,410 ACI Deferred Revenue $138 $132 $124 ACI Other 1,379 1,358 1,286 Backl
Slide 35: Revenues by Channel
Revenues by Channel ($ millions) Quarter Ended December 31, Quarter Ended December 31, 2009 2008 Revenues: United States $55.7 $43.9 Americas International 12.3 13.9 Americas $68.0 $57.8 EMEA 43.2 39.4 Asia/Pacific 14.7 12.0 Revenues $125.9 $109.2
Slide 36: Monthly Recurring Revenue
Monthly Recurring Revenue ($ millions) Quarter Ended December 31, Quarter Ended December 31, 2009 2008 Monthly license fees $18.5 $18.3 Maintenance fees 37.1 31.7 Processing Services 8.3 8.1 Monthly Recurring Revenue $63.9 $58.1
Slide 37: Deferred Revenue & Expense
Deferred Revenue & Expense ($ millions) Quarter Ended Quarter Ended Quarter Ended Quarter Ended December 31, September 30, December 31, September 30, 2009 2009 2008 2008 Short Term Deferred Revenue $106.3 $103.4 $99.9 $107.3 Long Term Deferred Revenue 31.5 28.7 24.3 23.3 Total Deferred Revenue $137.
Slide 38: Non-Cash Compensation, Acquisition Intangibles and Non-Recurring Items
Non-Cash Compensation, Acquisition Intangibles and Non-Recurring Items Quarter ended December 31, 2009 Quarter ended December 31, 2009 Quarter ended December 31, 2008 Quarter ended December 31, 2008 Non-recurring items EPS Impact* $ in Millions EPS Impact* $ in Millions Employee-related $0.00 $0.0 $
Slide 39: Other Income/Expense
Other Income/Expense ($ millions) Quarter Ended Quarter Ended Quarter Ended Quarter Ended December 31, 2009 September 30, 2009 December 31, 2008 September 30, 2008 Interest Income $0.2 $0.1 $0.7 $0.6 Interest Expense (1.1) (0.5) (1.5) (1.1) FX Gain / Loss (1.2) 1.1 9.3 1.6 Interest Rate Swap Loss (0
Slide 40: Operating EBITDA
Operating EBITDA Year Ended December 31, 2009 Operating Income $41.6 Depreciation Expense 6.3 Amortization Expense 17.4 Non-Cash Compensation Expense 7.6 Operating EBITDA $72.9 Operating EBITDA is defined as operating income plus depreciation and amortization and non-cash compensation.
Slide 41: Non-GAAP Financial Measures
Non-GAAP Financial Measures ACI is presenting operating free cash flow, which is defined as net cash provided (used) by operating activities, excluding after tax cash payments associated with one-time employee related actions, IBM IT outsourcing transition and severance, and the early termination of
Slide 42: Non-GAAP Financial Measures
Non-GAAP Financial Measures Management generally compensates for limitations in the use of non-GAAP financial measures by relying on comparable GAAP financial measures and providing investors with a reconciliation of non-GAAP financial measures only in addition to and in conjunction with results pre
Slide 43: Non-GAAP Financial Measures
Non-GAAP Financial Measures Backlog is considered a non-GAAP financial measure as defined by SEC Regulation G. Our 60-month backlog estimate represents expected revenues from existing customers using the following key assumptions: Maintenance fees are assumed to exist for the duration of the license
Slide 44: Non-GAAP Financial Measures
Non-GAAP Financial Measures Estimates of future financial results are inherently unreliable. Our backlog estimates require substantial judgment and are based on a number of assumptions as described above. These assumptions may turn out to be inaccurate or wrong, including for reasons outside of mana
Slide 45: Forward Looking Statements
Forward Looking Statements This presentation contains forward-looking statements based on current expectations that involve a number of risks and uncertainties. Generally, forward-looking statements do not relate strictly to historical or current facts and may include words or phrases such as "belie
Slide 46: Forward Looking Statements (Cont)
Forward Looking Statements (Cont) All of the foregoing forward-looking statements are expressly qualified by the risk factors discussed in our filings with the Securities and Exchange Commission. Such factors include, but are not limited to, risks related to the global financial crisis, restrictions
Slide 47: Every Second. Every Day.
Ml EVERY SECOND. EVERY DAY.