Bread Financial Holdings, Inc. · NYSE:BFH
Bread Financial — Alliance Data Systems — Investor Presentation (March 2008)
19 slides from Bread Financial's investor presentation, Mar 13, 2008
Slide 1: Alliance Data Investor/Analyst Call
Exhibit 99.2 Alliance Data Investor/Analyst Call NYSE:ADS March 13, 2008 ©2008 ADS Alliance Data Systems, Inc.
Slide 2: Safe Harbor Statement/Forward-Looking Statements
Investor/Analyst Call– March 13, 2008 2 Alliance Data’s Safe Harbor Statement/Forward-Looking Statements • This presentation may contain forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as
Slide 3: Financial Measures
Investor/Analyst Call– March 13, 2008 3 Financial Measures • In addition to the results presented in accordance with generally accepted accounting principles, or GAAP, the Company presents financial measures that are non-GAAP measures, such as adjusted EBITDA, operating EBITDA and cash earnings per
Slide 4: Agenda
Investor/Analyst Call– March 13, 2008 4 Agenda • Introduction • Business Update • Q&A ©2008 ADS Alliance Data Systems, Inc.
Slide 5: Business Update
Investor/Analyst Call– March 13, 2008 5 Business Update • Business Model & Key Financial Objectives • Loyalty Services (AIR MILES ® Reward Program - Canada) • Epsilon Marketing Services • Private Label Services • Private Label Credit • New Segmentation and Discontinued Operations • Consolidated Alli
Slide 6: Business Model
Investor/Analyst Call– March 13, 2008 6 Business Model Largest and Most Comprehensive Provider of Transaction- based Marketing and Loyalty Solutions • Highly sophisticated transaction-based programs are measurable, trackable and allow for micro-segmentation of clients’ customers. • Drives high ROIs
Slide 7: Business Model
Investor/Analyst Call– March 13, 2008 7 Business Model Through our We develop, We capture analysis over Our micro- implement and segmentation past and the past 25 drive complex current years we know drives marketing and significant ROIs consumer this is the best loyalty transactions predictor of for
Slide 8: Four Key Financial Objectives
Investor/Analyst Call– March 13, 2008 8 Four Key Financial Objectives 1. Double-digit Organic Growth 2. Strong Free Cash Flow Conversion • Double-digit organic business growth, plus • Margin expansion: 14% (2000) 32% (2007); >250bps a year • Capex improving from 5% 3% of top-line 3. Strong Visibilit
Slide 9: 2008 Outlook: Loyalty Services - Canada
Investor/Analyst Call– March 13, 2008 9 2008 Outlook: Loyalty Services - Canada • AIR MILES ® Reward Program is the Largest Mass Consumer Coalition Loyalty Program in Canada • 70% of Canadian Households Active in the Program • One of Canada’s Most Recognizable Brands • Despite Name, Revenues are not
Slide 10: 2008 Outlook: Epsilon Marketing Services
Investor/Analyst Call– March 13, 2008 10 2008 Outlook: Epsilon Marketing Services • Only Recognized Leader in Both Database Marketing and Email Marketing Services by Forrester • Most Comprehensive and Only Integrated Database Marketing Services Firm in the Industry • Marketing Strategy • Database Ma
Slide 11: 2008 Outlook: Private Label Services
Investor/Analyst Call– March 13, 2008 11 2008 Outlook: Private Label Services • Fully Integrated Loyalty-driven Private Label and Co-brand Programs • Loyalty & Marketing Programs • High-end Customer Care • Transaction Processing • Consumer’s Choice Driven by Loyalty and Relationship to Retailer, not
Slide 12: 2008 Outlook: Private Label Credit
Investor/Analyst Call– March 13, 2008 12 2008 Outlook: Private Label Credit • 11MM Active Households Each Month • 85% Female; Mid-to High-Income • Customer Views as Loyalty Program, not an Extension of Credit • 700 Average Bureau Score; Small Average Balances ($350/acct.) • No Sub-prime Targeting •
Slide 13: Historical Segment Presentation
Investor/Analyst Call– March 13, 2008 13 Historical Segment Presentation Segment: Marketing Transaction Credit • Loyalty AIR MILES • Transaction • Credit (Private Label) Products Reward Program Processing/Customer • Corporate and (Canada) Care/Marketing (Private Services: • Epsilon Marketing Label)
Slide 14: New Segment Presentation
Investor/Analyst Call– March 13, 2008 14 New Segment Presentation Transparency Objective Plus Shift in Business Mix Dictate “More User Friendly” Approach Segment: Loyalty Epsilon Private Label Private Label Services Marketing Services Credit Services Services and Loyalty Epsilon Private Label Privat
Slide 15: 2008 Outlook – Consolidated Alliance Data
Investor/Analyst Call– March 13, 2008 15 2008 Outlook – Consolidated Alliance Data 2007 Operating EBITDA* 2008 • Loyalty Services $174MM • Epsilon Marketing Services $118MM • Private Label Services $ 99MM • Private Label Credit $350MM $741MM • Corporate $(67)MM • Operating EBITDA $674MM >$730MM • Ad
Slide 16: 2008 Guidance
Investor/Analyst Call– March 13, 2008 16 2008 Guidance • Reiterate Organic Growth Targets: • Operating EBITDA >$730MM • Adjusted EBITDA >$700MM • Cash EPS $4.30 Cash EPS: Mid-teens Organic Growth Q1: Flat (-) Lane Bryant Drag ($.98-1.00) (-) 2008’s Most Difficult Comps Q2: Low to Mid-teens (-) Lane
Slide 17: 2008 Est. Free Cash Flow
Investor/Analyst Call– March 13, 2008 17 2008 Est. Free Cash Flow ($MM, Except per Share) Adjusted EBITDA > $700 Loyalty Adjustment 30 Operating EBITDA > $730 Less Capex/Int./Taxes (330) Free Cash Flow $400 Per Share $5.00 (11% yield) + Asset Sales / Other Initiatives TBD ©2008 ADS Alliance Data Sys
Slide 18: Liquidity - $1.5 Billion New or Renewed Since October
Investor/Analyst Call– March 13, 2008 18 Liquidity - $1.5 Billion New or Renewed Since October - Barclay’s, Wachovia, J.P. Morgan, RBS } 1. CDs 2. Conduits (Off B/S) 3. Revolver (Off B/S) $3.8 Billion $1.8 Billion 4. Warehouse (Off B/S) Capacity Unused 5. Cash 6. Net Debt (excludes CDs) $655 Corp. 2
Slide 19: 2003-2008e Adjusted EBITDA and Cash EPS
Investor/Analyst Call– March 13, 2008 19 2003-2008e (in $MM, except per share) Adjusted EBITDA Cash EPS >$700 $4.30 $632 $3.88 $3.14 $498 $321 $1.99 $255 $1.54 $189 $1.00 2003 2004 2005 2006 2007 2008e 2003 2004 2005 2006 2007 2008e ©2008 ADS Alliance Data Systems, Inc.
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