Bread Financial Holdings, Inc. · NYSE:BFH
Bread Financial — Alliance Data Systems — Q1 2016 Earnings Presentation
15 slides from Bread Financial's earnings presentation, Apr 21, 2016
Slide 1: Alliance Data Q1, 2016 Results
Alliance Data NYSE: ADS Q1, 2016 ResultsApril 21, 2016
Slide 2: Agenda
Agenda Speakers: Ed Heffernan President and CEO Charles Horn EVP and CFO Bryan Pearson President and CEO of LoyaltyOne ® First Quarter Consolidated ResultsSegment ResultsFirst Quarter and Full Year Scorecard2016 Guidance 1
Slide 3: First Quarter 2016 Consolidated Results
First Quarter 2016 Consolidated Results(MM, except per share) Quarter Ended March 31, 2016 2015 % Change Revenue $ 1,676 $ 1,601 +5% EPS $ 2.35 $ 2.32 +1% Core EPS $ 3.84 $ 3.65 +5% Adjusted EBITDA $ 493 $ 474 +4% Adjusted EBITDA, net $ 440 $ 430 +2% Diluted shares 60.2 63.6 Revenue and core EPS inc
Slide 4: LoyaltyOne
LoyaltyOne (MM) Strong quarter for AIR MILES® as constant currency revenue and adjusted EBITDA increased 4 percent and 11 percent, respectively. AIR MILES ® reward miles issued increased 5 percent for the quarter, driven by strength in the financial vertical. BrandLoyalty’s revenue decreased 9 perce
Slide 5: Epsilon
Epsilon® (MM) Digital & Technology Platforms grew 8 percent from the first quarter of 2015, with a building backlog.Agency Media & Services decreased 23 percent from the first quarter of 2015, an unexpected drop due to broad-based weakness. Adjusted EBITDA decreased 22 percent from the first quarter
Slide 6: Card Services
Card Services (MM) Quarter Ended March 31, 2016 2015 % Change Revenue $ 836 $ 715 +17% Operating expenses 308 262 +18% Provision for loan losses 172 135 +27% Funding costs 48 36 +33% Adjusted EBITDA, net $ 308 $ 282 +9% Adjusted EBITDA, net % 37% 39% -2% 5 Revenue increased 17 percent to $836 millio
Slide 7: Card Services key metrics
Card Services (MM) Operating expenses down 70 bps expressed as a percentage of average card receivables as we continue to drive operating leverage. Principal loss rates came in 10 bps better than our guidance of 5.3 percent for the first quarter. Quarter Ended March 31, Key metrics: 2016 2015 Change
Slide 8: First Quarter Scorecard
Consolidated$1.676 billion in revenue, +5 percent; $3.84 core EPS, +5 percentPerformance consistent with guidanceFX headwinds $26 million in revenue, $0.05 in core EPSToughest comp of year (Q1, 2015 30 percent top/bottom vs 2014)Buyback: $414 million (~2 million shares)Card ServicesPortfolio +27 per
Slide 9: First Quarter Scorecard (cont.)
First Quarter Scorecard (cont.) EpsilonFirst quarter results below expectations (agency & salesforce investments)Agency media & services 23 percent (1/4th of segment)Digital & Technology Platforms 8 percent (3/4ths of segment)India office ramping quickly (400 associates vs zero in Q1 2015)Conversant
Slide 10: Full Year Outlook
9 ConsolidatedReiterate FY guidance: revenue of $7.1 billion, up 10 percent; core EPS of $16.75, up 11 percentQ2 guidance: revenue of $1.62 billion, up 8 percent; core EPS of $3.58, up 8 percentCard Services Principal loss rate forecast on track Q1 Q2 Q3 Q4 FY 5.3% 5.1% 4.9% 4.9% = 5.0% (5.2% act)Do
Slide 11: Full Year (cont.)
Full Year (cont.) LoyaltyOne BrandLoyalty - Q2 biggest growth quarter - Strong double-digit revenue/adj. EBITDA full year (cc)AIR MILES - Issuance +4 percent for year - Low single-digit revenue/adj. EBITDA full year (cc)Overall Several moving pieces, but full year shaping upNo stress seen on the con
Slide 12: 2016 Guidance
2016 Guidance($MM, except per share) 2015 2016 ’16 / ’15 Increase Actual Revenue $ 6,440 $ 7,100 +10% Core EPS $ 15.05 $ 16.75 +11% 11 Double-digit revenue and core EPS growthOrganic revenue growth above 3x GDP target~ $1.4 billion in free cash flowGuidance will be adjusted for FX changes as year pr
Slide 13: Forward-Looking Statements
Forward-Looking StatementsThis presentation contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. Forward-looking statements give our expectations or forecasts of future events and can generally be
Slide 14: Financial Measures
Financial MeasuresIn addition to the results presented in accordance with generally accepted accounting principles, or GAAP, the Company may present financial measures that are non-GAAP measures, such as constant currency financial measures, adjusted EBITDA, adjusted EBITDA margin, adjusted EBITDA,
Slide 15: Q & A
Q & A
Alliance Data Systems — Q1 2016 Earnings Presentation on 6ix