Ncr Voyix Corporation · NYSE:VYX
Ncr Voyix — NCR — Q1 2021 Earnings Presentation
28 slides from Ncr Voyix's earnings presentation, Apr 27, 2021
Slide 1: Q1 2021 Earnings Conference Call
1 Q1 2021 EARNINGS CONFERENCE CALL MICHAEL HAYFORD, PRESIDENT & CEO OWEN SULLIVAN, COO TIM OLIVER, CFO April 27, 2021
Slide 2: Forward-Looking Statements
2 FORWARD-LOOKING STATEMENTS. Comments made during this conference call and in these materials 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 amended, pursuant to the safe ha
Slide 3: Non-GAAP Measures; Notes to Investors
3 NON-GAAP MEASURES. While NCR reports its results in accordance with generally accepted accounting principles in the United States, or GAAP, comments made during this conference call and in these materials will include or make reference to certain "non-GAAP" measures, including: selected measures,
Slide 4: Overview
4 Anticipate mid-year close with CARDTRONICS, subject to regulatory and shareholder approval OVERVIEW FREE CASH FLOW of $98M in Q1 RECURRING REVENUE up 9% Y/Y in Q1 Adjusted EBITDA MARGIN EXPANSION 420 bps Y/Y to 16.7% Completed FINANCING for pending Cardtronics transaction
Slide 5: Strategic Update
5 STRATEGIC UPDATE • Successful progress on 80/60/20 goals • Banking – Digital banking momentum and accelerating shift to recurring software revenue • Retail - Gaining traction on NCR EmeraldTM and self-checkout solutions • Hospitality - Momentum in AlohaTM Essentials continues • Accelerating NCR-as
Slide 6: Q1 2021 Financial Results
6 Adjusted EBITDA up 37% and margin rate up 420 bps y/y due to higher revenue and expense reduction Non-GAAP EPS up y/y due to higher operating earnings Driving more linear free cash flow production Total Revenue/Recurring Adjusted EBITDA Non-GAAP Diluted EPS Free Cash Flow Revenue up 3% y/y due to
Slide 7: Banking: digital banking and shift to recurring revenue
7 Q1 2020 Q2 2020 Q3 2020 Q4 2020 Q1 2021 $100 $125 $150 $ in millions, except registered users BANKING Revenue Adjusted EBITDA Q1 20 Q2 20 Q3 20 Q4 20 Q1 21 $0 $250 $500 $750 $1,000 Q1 20 Q2 20 Q3 20 Q4 20 Q1 21 $0 $60 $120 $180 $756$763 $154 $140 20.4% 18.3% Q1 20 Q2 20 Q3 20 Q4 20 Q1 21 22.0 24.0
Slide 8: Retail: Momentum in Self-Checkout and Platform Lanes
8 Momentum in Self-Checkout and Platform Lanes $ in millions, except platform lanes RETAIL Revenue Adjusted EBITDA Q1 20 Q2 20 Q3 20 Q4 20 Q1 21 $0 $200 $400 $600 Q1 20 Q2 20 Q3 20 Q4 20 Q1 21 $0 $40 $80 $120$569 $472 $73 $37 13.7% 7.8% SCO Revenue Platform Lanes Q1 20 Q2 20 Q3 20 Q4 20 Q1 21 3,000
Slide 9: Hospitality: Conversion to Aloha Essentials
9 $ in millions, except Aloha Essential sites HOSPITALITY Revenue Adjusted EBITDA Q1 20 Q2 20 Q3 20 Q4 20 Q1 21 $0 $50 $100 $150 $200 Q1 20 Q2 20 Q3 20 Q4 20 Q1 21 $0 $10 $20 $30$179$169 $25 $7 4.1% 14.0% Aloha Essential Sites Recurring Revenue Q1 20 Q2 20 Q3 20 Q4 20 Q1 21 2,500 3,750 5,000 Up 61%
Slide 10: Progress on 80/60/20 Goals
10 Q1 2021 Q4 2020 Q1 2020 80% of NCR's revenue will come from software and services 72% 71% 74% 60% of NCR's revenue will come from recurring revenue 57% 54% 53% 20% goal for Adjusted EBITDA as a percent of revenue 16.7% 15.8% 12.5% Progress on 80/60/20 Goals
Slide 11: Free Cash Flow, Net Debt & EBITDA
11 Free Cash Flow Q1 2021 Q1 2020 Cash provided by operating activities $155 $54 Less: Total capital expenditures ($61) ($79) Plus: Pension contributions $4 $5 Free Cash Flow $98 ($20) $ in millions FREE CASH FLOW, NET DEBT & EBITDA Net Debt & EBITDA Q1 2021 Q4 2020 Q1 2020 Debt $3,401 $3,278 $4,385
Slide 12: Outlook Q2 2021
12 OUTLOOK Q2 2021 • Revenue - Up 9% to 10% year over year • Adjusted EBITDA Margin Rate – Expands 250-300 bps to >16% • Free Cash Flow - Similar to Q1 2021
Slide 13: Cardtronics Transaction Update
13 Transaction is under South African and UK antitrust regulatory review CARDTRONICS Transaction Update The HSR waiting period expired on March 11, 2021 Secured transaction financing Entered into Definitive Agreement on January 25, 2021 Subject to Cardtronics shareholder approval; Meeting scheduled
Slide 14: Looking Forward
14 • Maintain momentum of NCR-as-a-Service 80/60/20 strategy • Accelerate growth • Increase revenue and cash flow linearity • Cost discipline and positive operating leverage drive margin expansion • Allocate capital to highest growth and return on investment opportunities LOOKING FORWARD
Slide 15: Supplementary Materials
15 SUPPLEMENTARY MATERIALS
Slide 16: Q1 2021 GAAP Results
16 Q1 2021 Q1 2020 % Change Revenue $1,544 $1,503 3% Gross Margin 414 397 4% Gross Margin Rate 26.8% 26.4% Operating Expenses 304 320 (5)% % of Revenue 19.7% 21.3% Operating Income 110 77 43% % of Revenue 7.1% 5.1% Interest and other expense (62) (52) 19% Income Tax Expense (Benefit) 17 1 1,600% Eff
Slide 17: Q1 2021 Operational Results
17 Q1 2021 Q1 2020 % Change Revenue $1,544 $1,503 3% Gross Margin (non-GAAP) 425 404 5% Gross Margin Rate (non-GAAP) 27.5% 26.9% 60 bps Operating Expenses (non-GAAP) $277 $300 (8%) % of Revenue 17.9% 20.0% (200 bps) Operating Income (non-GAAP) $148 $104 42% % of Revenue 9.6% 6.9% 270 bps Interest an
Slide 18: Adjusted EBITDA by Segment
18 Q1 2021 Q4 2020 Q3 2020 Q2 2020 Q1 2020 Banking $ 154 $ 132 $ 144 $ 130 $ 140 Retail 73 88 81 49 37 Hospitality 25 27 24 15 7 Other 10 11 10 10 8 Adjusted EBITDA by Segment $ 262 $ 258 $ 259 $ 204 $ 192 OIE (3) (1) (9) (3) (3) Minority Interest (1) 1 (1) — (1) Adjusted EBITDA $ 258 $ 258 $ 249 $
Slide 19: Non-GAAP measure definitions
19 While NCR reports its results in accordance with generally accepted accounting principles (GAAP) in the United States, comments made during this conference call and in these materials will include non-GAAP measures. These measures are included to provide additional useful information regarding NC
Slide 20: Net Debt and Adjusted EBITDA definitions
20 Net Debt and Adjusted Earnings Before Interest, Taxes, Depreciation and Amortization (Adjusted EBITDA). NCR determines Net Debt based on its total debt less cash and cash equivalents, with total debt being defined as total short-term borrowings plus total long-term debt. NCR believes that Net Deb
Slide 21: GAAP to Non-GAAP Reconciliation
21 Q1 2021 Q4 2020 Q3 2020 Q2 2020 Q1 2020 Net (Loss) Income from Continuing Operations Attributable to NCR (GAAP) $ 30 $ (125) $ 31 $ 64 $ 23 Pension Mark-to-Market Adjustments — 34 — — — Transformation & Restructuring Costs 8 202 19 8 5 Acquisition-Related Amortization of Intangibles 20 19 21 19 2
Slide 22: GAAP to Non-GAAP Reconciliation (LTM)
22 Q1 2021 LTM Q4 2020 LTM Q1 2020 LTM Net (Loss) Income from Continuing Operations Attributable to NCR (GAAP) $ — $ (7) $ 600 Pension Mark-to-Market Adjustments 34 34 75 Transformation & Restructuring Costs 237 234 37 Acquisition-Related Amortization of Intangibles 79 81 87 Acquisition-Related Cost
Slide 23: Q1 2021 GAAP to non-GAAP reconciliation
23 Q1 QTD 2021 GAAP Transformation Costs Acquisition- related amortization of intangibles Acquisition- related costs Q1 QTD 2021 non-GAAP Product revenue $482 $— $— $— $482 Service revenue 1,062 — — — 1,062 Total revenue 1,544 — — — 1,544 Cost of products 408 — (3) — 405 Cost of services 722 (4) (4)
Slide 24: Q1 2021 Diluted EPS reconciliation
24 Q1 QTD 2021 GAAP Q1 QTD 2021 non- GAAP Income from continuing operations attributable to NCR common stockholders: Income from continuing operations (attributable to NCR) $30 $73 Dividends on convertible preferred shares (4) — Income from continuing operations attributable to NCR common stockholde
Slide 25: Q1 2020 GAAP to non-GAAP reconciliation
25 Q1 QTD 2020 GAAP Transformation Costs Acquisition- related amortization of intangibles Q1 QTD 2020 non-GAAP Product revenue $474 $— $— $474 Service revenue 1,029 — — 1,029 Total revenue 1,503 — — 1,503 Cost of products 391 — (3) 388 Cost of services 715 — (4) 711 Gross margin 397 — 7 404 Gross ma
Slide 26: Q1 2020 Diluted EPS reconciliation
26 Q1 QTD 2020 GAAP Q1 QTD 2020 non-GAAP Income from continuing operations attributable to NCR common stockholders: Income from continuing operations (attributable to NCR) $23 $44 Dividends on convertible preferred shares ($6) $— Income from continuing operations attributable to NCR common stockhold
Slide 27: GAAP to Non-GAAP Reconciliation: Free Cash Flow
27 Q1 2021 Q4 2020 Q1 2020 Cash provided by operating activities $155 $146 $54 Less: Total capital expenditures ($61) ($63) ($79) Plus: Pension contributions $4 $75 $5 Free Cash Flow $98 $158 ($20) $ in millions GAAP TO NON-GAAP RECONCILIATION
Slide 28: Thank You
28 THANK YOU