Fidelity National Information Services, Inc. · NYSE:FIS
Fidelity National Information Services — Q2 2018 Earnings Presentation
28 slides from Fidelity National Information Services's earnings presentation, Jul 31, 2018
Slide 1: Second Quarter 2018 Earnings Call
Second Quarter 2018 Earnings Call July 31, 2018 ©2018 FIS and/or its subsidiaries. All Rights Reserved.
Slide 2: Agenda
Agenda Gary Norcross, Business Summary Chairman, President and CEO Woody Woodall, Financial Summary Chief Financial Officer 2
Slide 3: Disclosures
Disclosures Forward-Looking Statements Our discussions today, including this presentation and any comments made by management, contain “forward-looking statements” within the meaning of the U.S. federal securities laws. Any statements that refer to future events or circumstances, including our futur
Slide 4: Business Summary
Business Summary Gary Norcross Chairman, President and CEO 4
Slide 5: Key Themes for the Quarter
Key Themes for the Quarter • INCREASING full-year EPS guidance • IMPROVING sales • STRENGTHENING pipeline • CONTINUING shift towards outsourcing 5
Slide 6: Strategic Growth Levers
Strategic Growth Levers INNOVATE DRIVE BUILD for long-term strong sales with on our global growth market-leading scale solutions 6
Slide 7: Financial Summary
Financial Summary Woody Woodall Chief Financial Officer 7
Slide 8: Consolidated Results
Consolidated Results Second Quarter (Q2) and Six Months (YTD) 2018 ($ millions, except per share data) METRICS Q2 2018 Y-o-Y vs Q2 2017 Adj. Revenue $ 2,107 0.8% Organic(1) Adj. EBITDA $ 757 0.7% Adj. EBITDA Margin 35.9% 260 bps Adj. EPS $ 1.23 18.3% METRICS YTD 2018 Y-o-Y vs YTD 2017 Adj. Revenue $
Slide 9: Integrated Financial Solutions
Integrated Financial Solutions Second Quarter (Q2) and Six Months (YTD) 2018 ($ millions) METRICS Q2 2018 Y-o-Y vs Q2 2017 Revenue $ 1,124 4.3% Organic(1) Adj. EBITDA $ 492 5.6% Adj. EBITDA Margin 43.8% 90 bps METRICS YTD 2018 Y-o-Y vs YTD 2017 Revenue $ 2,185 3.7% Organic(1) Adj. EBITDA $ 943 4.2%
Slide 10: Integrated Financial Solutions
Integrated Financial Solutions ($ millions) REVENUE CONTRIBUTION ($ millions) Second Organic Six Organic Quarter Growth Months Growth Banking and Wealth $ 538 5.1% $ 1,042 5.4% Payments 377 2.0% 727 0.2% Corporate and Digital 209 6.5% 416 6.1% Total Integrated $ 1,124 4.3% $ 2,185 3.7% Financial Sol
Slide 11: Global Financial Solutions
Global Financial Solutions Second Quarter (Q2) and Six Months (YTD) 2018 ($ millions) METRICS Q2 2018 Y-o-Y vs Q2 2017 Revenue $ 899 (3.0)% Organic(1) Adj. EBITDA $ 314 (7.5)% Adj. EBITDA Margin 34.9% 370 bps METRICS YTD 2018 Y-o-Y vs YTD 2017 Revenue $ 1,826 1.1% Organic(1) Adj. EBITDA $ 618 2.5% A
Slide 12: Global Financial Solutions
Global Financial Solutions ($ millions) REVENUE CONTRIBUTION ($ millions) Second Organic Six Organic Quarter Growth Months Growth Institutional and Wholesale $ 487 (5.1)% $ 988 0.2% Banking and Payments 412 (0.3)% 838 2.2% Total Global $ 899 (3.0)% $ 1,826 1.1% Financial Solutions(1) (1) Amount may
Slide 13: Corporate and Other
Corporate and Other Second Quarter (Q2) and Six Months (YTD) 2018 ($ millions) METRICS Q2 2018 Y-o-Y vs Q2 2017 Adj. Revenue $ 84 (3.0)% Organic(1) Adj. EBITDA $ (49) n/a Corporate Expense $ 62 (17)% METRICS YTD 2018 Y-o-Y vs YTD 2017 Adj. Revenue $ 164 (8.7)% Organic(1) Adj. EBITDA $ (99) n/a Corpo
Slide 14: Debt Review and Capital Allocation
Debt Review and Capital Allocation • Free cash flow was approximately $350 million • Maintaining a strong balance sheet – $8.9 billion debt outstanding as of June 30, 2018 – Weighted average interest rate of 3.5% • Shareholder returns – Share repurchases of approximately $200 million in Q2 2018 – Di
Slide 15: 2018 Guidance Raised
2018 Guidance Raised ($ millions, except per share data) FY 2018 Guidance FY 2018 Guidance METRICS (as of 5/1/18) (as of 7/31/18) Consolidated Organic 2.5% – 3.5% 2.5% – 3.5% Revenue Growth IFS Organic 2% – 3% 3% – 4% Revenue Growth GFS Organic 4% – 5% 3% – 4% Revenue Growth Adjusted EBITDA Margin 3
Slide 16: Why Invest in FIS
Why Invest in FIS Continued High-quality Double-digit Strong Compelling Market Recurring EPS Growth Cash Flow Investment Leadership Revenue Generation Thesis 16
Slide 17: Appendix
APPENDIX His
Slide 18: Debt Summary
Debt Summary ($ in millions) Dec 31, Jun 30, Rate 2017 2018 Revolver (2021 Maturity) L+125 bps $ 195 $ 410 Undrawn revolver capacity 15 bps 2,805 2,590 2018 Notes (April) 2.000% 250 - 2018 Notes (October) 2.850% 750 - 2020 Notes (October) 3.625% 1,150 1,150 2021 EUR Notes (January) (1) 0.400% 599 58
Slide 19: Forward-Looking Statements
Forward-Looking Statements This presentation and today’s webcast contain “forward-looking statements” within the meaning of the U.S. federal securities laws. Statements that are not historical facts, including statements about anticipated financial outcomes, including any earnings guidance of the Co
Slide 20: Forward-Looking Statements
Forward-Looking Statements • changes in the growth rates of the markets for our solutions; • failures to adapt our solutions to changes in technology or in the marketplace; • internal or external security breaches of our systems, including those relating to unauthorized access, theft, corruption or
Slide 21: Non-GAAP Financial Information and Reconciliation
Non-GAAP Financial Information and Reconciliation Generally Accepted Accounting Principles (GAAP) is the term used to refer to the standard framework of guidelines for financial accounting in the United States. GAAP includes the standards, conventions, and rules accountants follow in recording and s
Slide 22: Non-GAAP Financial Information and Reconciliation
Non-GAAP Financial Information and Reconciliation Adjusted revenue consists of revenue, increased to reverse the purchase accounting deferred revenue adjustment made upon the acquisition of SunGard. The deferred revenue adjustment represents revenue that would have been recognized in the normal cour
Slide 23: Non-GAAP Financial Information and Reconciliation
Non-GAAP Financial Information and Reconciliation Adjusted net earnings excludes the impact of certain costs and other transactions which management deems non- operational in nature, the removal of which improves comparability of operating results across reporting periods. It also excludes the impac
Slide 24: Organic Revenue Growth Calculation
Organic Revenue Growth Calculation Second Quarter (Q2) 2018 ($ millions, unaudited) Three months ended June 30, 2018 Integrated Global Financial Financial Corporate Solutions Solutions and Other Consolidated Revenue $ 1,124 $ 899 $ 83 $ 2,106 Non-GAAP adjustments: Acquisition deferred revenue adjust
Slide 25: Organic Revenue Growth Calculation
Organic Revenue Growth Calculation Six Months (YTD) 2018 ($ millions, unaudited) Six months ended June 30, 2018 Integrated Global Financial Financial Corporate Solutions Solutions and Other Consolidated Revenue $ 2,185 $ 1,826 $ 161 $ 4,172 Non-GAAP adjustments: Acquisition deferred revenue adjustme
Slide 26: Reconciliation of GAAP to Non-GAAP Financials
Reconciliation of GAAP to Non-GAAP Financials ($ millions, unaudited) Three months ended Six months ended June 30, June 30, 2018 2017 2018 2017 Net earnings attributable to FIS common stockholders $ 212 $ 139 $ 394 $ 269 Provision (benefit) for income taxes 51 136 85 210 Interest expense, net 73 91
Slide 27: Reconciliation of GAAP to Non-GAAP Financials
Reconciliation of GAAP to Non-GAAP Financials ($ millions, except per share data, unaudited) Three months ended Six months ended June 30, June 30, 2018 2017 2018 2017 Earnings before income taxes and equity method investment earnings (loss) $ 276 $ 283 $ 501 $ 493 Provision (benefit) for income taxe
Slide 28: Reconciliation of GAAP to Non-GAAP Financials
Reconciliation of GAAP to Non-GAAP Financials ($ millions, unaudited) Three months ended Six months ended June 30, 2018 June 30, 2018 Net cash provided by operating activities $ 469 $ 823 Non-GAAP adjustments: Acquisition, integration and severance payments 34 61 Tax payments on divestitures - 19 De
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