Slide 1: Fourth Quarter and Full Year 2019 Earnings Conference Call
Fourth Quarter and Full Year 2019 Earnings Conference Call February 25, 2020
Slide 2: Disclosures
Disclosures Forward-looking statements Certain statements in this presentation constitute “forward-looking statements” within the meaning of, and subject to the protection of, the Private Securities Litigation Reform Act of 1995. Such forward-looking statements involve known and unknown risks, uncer
Slide 3: Business Summary
Business Summary Mac Schuessler, President and CEO
Slide 4: 2019 Financial Highlights
2019 Financial Highlights Total Revenue $487 million, 7% increase Solid Results Adjusted EPS $1.96, 7% increase Delivered significant operating cash flow of $180 million Significant operating Returned $46 million to shareholders through: cash flow o stock buybacks o dividends *See Non-GAAP r
Slide 5: Puerto Rico Q4 Update
Puerto Rico Q4 Update • Benefited from one-time revenues and new managed services in Growth and Business Solutions Innovation • Transactions up 6% as compared to last year with average ticket continuing to normalize • HUD appoints financial monitor and releases $8.5B Macro Environment • Employment t
Slide 6: Puerto Rico – New Medicare Payment Process
Puerto Rico – New Medicare Payment Process Supports benefit distribution via benefit card Benefit Card 6
Slide 7: Latin America Q4 Update
Latin America Q4 Update • Santander Chile continues to progress and first transaction in pilot has been processed Implementation • Citibank brings on additional clients to the collections platform Progress and Citibanamex implementation progressing • Compensar implements mobile wallet in Colombia •
Slide 8: Latin America – Strategy
Latin America – Strategy Execute, leverage client base and multi-product offering, presence and capacity Focus on executing on new Focused on execution of Santander Chile and agreements Citibank agreements Leverage the strong client base for cross sell opportunities Continuing transition to proc
Slide 9: Evertec Values
Evertec Values We are proud to be recognized as a global leader in the advancement of gender equality Diversity = Innovation and High Performing Workforce Focused on recruiting, retaining and developing top talent 9
Slide 10: Financial Summary
Financial Summary Joaquin Castrillo, CFO
Slide 11: Consolidated Results Q4 and Full Year 2019
Consolidated Results Q4 and Full Year 2019 Q4 2019 (#039;s in millions, except per share) Y-O-Y % Full Year Y-O-Y % Revenue $ 127.2 8% $ 487.4 7% Adjusted EBITDA $ 55.3 5% $ 226.2 6% Adjusted EBITDA margin 43.5% -100 bps 46.4% -40 bps Adjusted Net Income $ 34.9 1% $ 143.7 5% Adjusted EPS $ 0.48 4% $ 1.
Slide 12: Merchant Acquiring
Merchant Acquiring (#039;s in millions, except per share) Q4 2019 Y-O-Y % Full Year Y-O-Y % Revenue $ 27.2 5% $ 106.4 7% Adjusted EBITDA $ 11.7 -3% $ 47.2 1% Adjusted EBITDA margin 43.2% -360 bps 44.3% -240 bps • Q4 revenue increase reflects higher pricing and non-transactional fees partially offset by
Slide 13: Payment Services, PR and Caribbean
Payment Services, PR and Caribbean (#039;s in millions, except per share) Q4 2019 Y-O-Y % Full Year Y-O-Y % Revenue $ 32.6 9% $ 125.5 10% Adjusted EBITDA $ 18.7 -8% $ 78.6 5% Adjusted EBITDA margin 57.1% -1,030 bps 62.6% -320 bps • Q4 revenue reflects organic transaction volumes growth of ~6% and the b
Slide 14: Payment Services, Latin America
Payment Services, Latin America (#039;s in millions, except per share) Q4 2019 Y-O-Y % Full Year Y-O-Y % Revenue $ 21.9 (2)% $ 84.5 4% Adjusted EBITDA $ 7.1 (25)% $ 30.7 11% Adjusted EBITDA margin 32.2% -980 bps 36.3% 200 bps • Q4 revenue impacted negatively by prior year license sales that did not rec
Slide 15: Business Solutions
Business Solutions (#039;s in millions, except per share) Q4 2019 Y-O-Y % Full Year Y-O-Y % Revenue $ 57.2 11% $ 216.7 10% Adjusted EBITDA $ 25.0 27% $ 97.4 11% Adjusted EBITDA margin 43.8% 550 bps 45.0% 60 bps • Q4 revenue reflects benefit from CPI increase, one-time project completion and benefit fro
Slide 16: Corporate and Other
Corporate and Other (#039;s in millions, except per share) Q4 2019 Y-O-Y % Full Year Y-O-Y % Adjusted EBITDA $ (7.1) -19% $ (27.7) 12% % of Total Revenue 5.6% 180 bps 5.7% (30) bps • Q4 corporate expense was lower than prior year due to corporate initiatives completed in last year's Q4 • Full-year resu
Slide 17: Roll Forward of 2019 Cash Balance
Roll Forward of 2019 Cash Balance ($’s in Millions) Operating Activities Ending Balance 2 Cap ex Beginning M&A Balance 1 Debt (Net) & Other 3 Repurchases & Dividends 12/31/2018 12/31/2019 (1) Includes $17M in restricted cash. (2) Includes $20M in restricted cash. (3) Includes net decrease in total d
Slide 18: Debt Summary
Debt Summary (#039;s in millions) 12/31/19 12/31/18 Unrestricted Cash $ 111.0 $ 70.0 Total Debt $ 533.4 $ 545.3 Term A Loan (2023 Maturity) L+225bps $ 209.0 $ 220.0 Term B Loan (2024 Maturity) L+350bps $ 321.8 $ 325.0 Revolver (2023 Maturity, $125M) L+225bps $ — $ — Other $ 2.6 $ 0.3 Net Debt $ 422.3 $
Slide 19: 2020 Outlook
2020 Outlook (#039;s in millions, except per share) Low High Total Revenue $ 501 $ 508 Growth % 3% 4% GAAP EPS - Diluted $ 1.45 $ 1.51 Adjusted EPS $ 2.00 $ 2.06 Growth % 2% 5% Capital Expenditures $ 45 $ 45 Assumptions: Adjusted EBITDA Margin 46% 47% Tax rate 13% 13% Share Count used to compute Adjust
Slide 20: Q&A
Q&A
Slide 21: Non-GAAP Financial Information
Non-GAAP Financial Information The non-GAAP measures referenced in this release material are supplemental measures of the Company’s performance and are not required by, or presented in accordance with, accounting principles generally accepted in the United States of America (“GAAP”). They are not me
Slide 22: Reconciliation of GAAP to Non-GAAP Operating Results
Reconciliation of GAAP to Non-GAAP Operating Results Quarter ended December 31, Year ended December 31, (Dollar amounts in thousands, except share data) 2019 2018 2019 2018 Net income $ 25,043 $ 20,247 $ 103,700 $ 86,569 Income tax expense 2,957 2,247 12,975 12,596 Interest expense, net 6,267 6,882
Slide 23: Reconciliation of Q4 2019 Segment Non-GAAP Results
Reconciliation of Q4 2019 Segment Non-GAAP Results Quarter Ended December 31, 2019 Payment Services - Payment Puerto Rico & Services - Merchant Business Corporate and (Dollar amounts in thousands) Caribbean Latin America Acquiring, net Solutions Other (1) Total Revenues $ 32,634 $ 21,920 $ 27,185 $
Slide 24: Reconciliation of 2019 Segment Non-GAAP Results
Reconciliation of 2019 Segment Non-GAAP Results Year Ended December 31, 2019 Payment Payment Services - Services - Puerto Rico Latin Merchant Business Corporate (Dollar amounts in thousands) & Caribbean America Acquiring, net Solutions and Other (1) Total Revenues $ 125,544 $ 84,453 $ 106,388 $ 216,
Slide 25: Reconciliation of Q4 2018 Segment Non-GAAP Results
Reconciliation of Q4 2018 Segment Non-GAAP Results Quarter Ended December 31, 2018 Payment Services - Payment Puerto Rico & Services - Merchant Business Corporate and (Dollar amounts in thousands) Caribbean Latin America Acquiring, net Solutions Other (1) Total Revenues $ 29,957 $ 22,365 $ 25,826 $
Slide 26: Reconciliation of 2018 Segment Non-GAAP Results
Reconciliation of 2018 Segment Non-GAAP Results Year Ended December 31, 2018 Payment Payment Services - Services - Puerto Rico Latin Merchant Business Corporate (In thousands) & Caribbean America Acquiring, net Solutions and Other (1) Total Revenues $ 114,119 $ 80,899 $ 99,655 $ 197,602 $ (38,406) $
Slide 27: Outlook Summary and Reconciliation to Non-GAAP Adjusted Earnings per Share
Outlook Summary and Reconciliation to Non-GAAP Adjusted Earnings per Share 2019 2020 Outlook Actual (Dollar amounts in millions, except share data) Revenues $ 501 to $ 508 $ 454 Earnings per Share (EPS) (GAAP) $ 1.45 to $ 1.51 $ 1.41 Per share adjustment to reconcile GAAP EPS to Non-GAAP Adjusted EP