Fidelity National Information Services, Inc. · NYSE:FIS
Fidelity National Information Services — Q2 2012 Earnings Presentation
30 slides from Fidelity National Information Services's earnings presentation, Jul 17, 2012
Slide 1: Second Quarter 2012 Earnings Call Supplemental Materials
July 17, 2012 Second Quarter 2012 Earnings Call Supplemental Materials
Slide 2: Agenda
Agenda 2 Topic Speaker Second Quarter 2012 Highlights Frank Martire, Chairman and CEO Operations Review Gary Norcross President and Chief Operating Officer Financial Summary Mike Hayford Chief Financial Officer Q & A Martire, Norcross and Hayford
Slide 3: Forward Looking Statements
Forward Looking Statements This presentation and today’s conference call contain “forward-looking statements” within the meaning of the U.S. federal securities laws. Statements that are not historical facts, including statements about revenue, organic revenue, earnings before interest, taxes, deprec
Slide 4: Use of Non-GAAP Measures
Use of Non-GAAP Measures Generally Accepted Accounting Principles (GAAP) is the term used to refer to the standard framework of guidelines for financial accounting. GAAP includes the standards, conventions, and rules accountants follow in recording and summarizing transactions and in the preparation
Slide 5: Second Quarter 2012 Highlights
Frank Martire Chairman and CEO Second Quarter 2012 Highlights
Slide 6: Solid Execution – 2nd Quarter 2012 Highlights
Solid Execution – 2nd Quarter 2012 Highlights •5.1% organic revenue growth •7.7% EBITDA growth, as adjusted •120 bps margin expansion •22% EPS growth, as adjusted Organic Revenue Growth Trends FY-09 FY-10 FY-11 YTD-12 0.3% 3.2% 5.2% 5.2% 6
Slide 7: Driving Performance
Driving Performance • Definitive agreement to divest healthcare business • Maintaining strong client focus • Investing for continued growth • Ongoing commitment to improve information security and risk management • Executing the strategy communicated at Investor Day 7
Slide 8: Operations Review
Gary Norcross President and Chief Operating Officer Operations Review
Slide 9: North America
North America • Ongoing client engagement • Continued demand for professional services, outsourced technology and consulting expertise • Strength in global commercial services 9
Slide 10: Update on M&I Migration Plans
Update on M&I Migration Plans • FIS will retain a substantial relationship with the combined entity • Anticipate core migration in Q4-2012 • Continue to negotiate service arrangements and terms 10
Slide 11: International
International • Growth across all regions • Less than one-half of one percent of consolidated revenue generated by clients in Portugal, Italy, Ireland, Greece and Spain • Pursuing growth opportunities in emerging markets 11
Slide 12: Ongoing Focus on Information Security
Ongoing Focus on Information Security • Ongoing investment in information security • Continue to execute improvement plan • Proactively engaging with regulated financial institution clients 12
Slide 13: Key Takeaways
Key Takeaways • Delivering on plan to drive organic revenue growth and margin expansion • Anticipate fourth quarter conversion of M&I accounts • Information security and risk management are a top priority • Remain focused on sales and driving value to clients 13
Slide 14: Financial Summary
Mike Hayford Chief Financial Officer Financial Summary
Slide 15: Consolidated Results
Q2 2012 YTD 2012 Revenue $1,457 $2,871 Growth 3% 4% Organic growth 5% 5% Adjusted EBITDA $438 $833 Growth 8% 9% Adjusted EBITDA Margin 30.0% 29.0% Y-O-Y change +120 bps +130 bps Consolidated Results 15 ($ millions) Refer to www.investor.fisglobal.com for reconciliation of GAAP to non-GAAP items.
Slide 16: Financial Solutions
Q2 2012 YTD 2012 Revenue $563 $1,102 Growth 9% 8% Organic Growth 8% 7% EBITDA $215 $423 Growth 3% 5% EBITDA Margin 38.2% 38.4% Y-O-Y change -210 bps -110 bps Financial Solutions 16 ($ millions) Refer to www.investor.fisglobal.com for reconciliation of GAAP to non-GAAP items.
Slide 17: Payment Solutions
Q2 2012 YTD 2012 Revenue $606 $1,203 Growth 0.4% 1% Growth, as adjusted(1) 3% 3% EBITDA $250 $488 Growth 9% 11% EBITDA Margin 41.2% 40.5% Y-O-Y change +310 bps +340 bps Payment Solutions 17 (1) Excludes check-related businesses which declined $10.7 million to $108.9 million in the current year quart
Slide 18: International Solutions
International Solutions 18 ($ millions) Q2 2012 YTD 2012 Revenue $287 $564 Growth -2% 1% Organic growth 10% 9% EBITDA $63 $115 Growth 3% 4% EBITDA Margin 22.0% 20.3% Y-O-Y change +110 bps +70 bps Refer to www.investor.fisglobal.com for reconciliation of GAAP to non-GAAP items.
Slide 19: Consolidated Results – Adjusted Net Earnings
Consolidated Results 19 ($ millions, except per share data) Q2-2012 YTD 2012 GAAP Net Earnings from Continuing Operations $156 $247 Stock and other compensation charges(1) - 12 Debt refinancing costs(2) - 12 Net earnings, excluding other items 156 272 Acquisition Related Purchase Amortization 42 83
Slide 20: Free Cash Flow
Q2 2012 YTD 2012 Cash flow from operations(1) $259 $463 Capital expenditures (91) (156) 168 307 Settlement activity 10 8 Free Cash Flow(2) $178 $315 Free Cash Flow 20 (1) Q1-2012 includes a $42 million final payment related to an interest rate swap assumed in the acquisition on Metavante Technologie
Slide 21: Executing Capital Allocation Strategy
Executing Capital Allocation Strategy • Investing for growth • Focused on strengthening balance sheet • Returning cash to shareholders – $118 million in shareholder dividends year-to-date – $151 million (5.2 million) shares repurchased year-to-date • Continued focus on product acquisitions 21
Slide 22: Healthcare Divestiture
Healthcare Divestiture • All-cash transaction valued at $335 million • Consistent with strategy to operate in markets where we have meaningful scale • $0.02 reduction in adjusted earnings per share from continuing operations in Q2-2012 and up to $0.07 impact for the full year 2012 • Intend to deploy
Slide 23: Key Takeaways
23 Key Takeaways • Executing strategy that we communicated at Investor Day • Increased clarity on M&I migration plan • Positioned to deliver 2012 growth targets and margin expansion • Raising 2012 full year EPS guidance from continuing operations
Slide 24: 2012 Earnings Per Share Outlook
24 2012 Earnings Per Share Outlook Guidance Low High Earnings per share, as adjusted (2-14-2012) $2.47 $2.57 Healthcare Benefit Solutions discontinued operations (0.07) (0.07) Subtotal 2.40 2.50 Tax rate benefit 0.05 0.05 Earnings per share, as adjusted (7-17-2012) $2.45 $2.55
Slide 25: Q & A
Q & A
Slide 26: = a) = ® 2. < FIs
= a) = ® 2. 2 < FIs
Slide 27: Debt Summary
Debt Summary 27 Note: Mandatory quarterly debt payments of $26.25 million in 2012. ($ millions) June 30, 2012 March 31, 2012 Balance Rate Balance Rate Term Loan A 2014 Maturity 250$ L + 2.25% 250$ L + 2.25% 2017 Maturity 2,074 L + 2.00% 2,100 L + 2.00% Revolver 548 L + 2.00% 300 L + 2.00% Term Loan
Slide 28: Non-GAAP Financial Results – Q2 2012
Organic revenue growth is calculated as the difference between (A) reported revenue for the current period excluding the impact of current period acquisitions and foreign currency impacts and (B) reported revenue for the prior period plus pre-acquisition revenues for prior period acquisitions exclud
Slide 29: Non-GAAP Financial Results – YTD 2012
Organic revenue growth is calculated as the difference between (A) reported revenue for the current period excluding the impact of current period acquisitions and foreign currency impacts and (B) reported revenue for the prior period plus pre-acquisition revenues for prior period acquisitions exclud
Slide 30: Non-GAAP Financial Measures
Non-GAAP Financial Measures EBITDA is earnings from continuing operations before interest, taxes and depreciation and amortization. Adjusted EBITDA (2012 full year comparative data) excludes accelerated vesting of certain stock options and restricted stock grants and for a non-compete and change in
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