Fidelity National Information Services, Inc. · NYSE:FIS
Fidelity National Information Services — Q2 2023 Earnings Presentation
31 slides from Fidelity National Information Services's earnings presentation, Aug 2, 2023
Slide 1: Second Quarter 2023 Earnings Call
SECOND QUARTER 2023 EARNINGS CALL f August 2, 2023
Slide 2: Speakers
Our Stephanie Ferris 1 Commitments Chief Executive Officer and President & Results Speakers Financial Erik Hoag 2 Results & Chief Financial Officer Guidance 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: Our Commitments & Results
1 Our Commitments & Results 4
Slide 5: Accelerating Our Path Forward
ACCELERATING OUR PATH FORWARD 1 2 3 4 Q1 2023: Q2 2023 Q3 2023 2023 / 2024 Strategic Review Driving Delivering on our Accelerating shareholder New CEO agenda financial and strategic separation through value at FIS commitments announced majority Operational focus and Announced sale of Worldpay Future
Slide 6: Delivering on Financial Commitments
DELIVERING ON FINANCIAL COMMITMENTS FINANCIAL COMMITMENTS • FIS organic recurring revenue growth of 4% (Banking + Capital Markets) 2Q Guidance 2Q Actuals Revenue $3,675 - $3,725 $3,746 • Sequential margin improvement across all segments Adj. EBITDA $1,510 - $1,540 $1,551 • On track to deliver free c
Slide 7: Positioning FIS & Worldpay to Succeed
POSITIONING FIS & WORLDPAY TO SUCCEED Worldpay Accelerates separation and better positions both companies to succeed relative to spin approach Transaction Update Ensures continued commercial partnership for the benefit of • GTCR Committed Debt and both businesses Equity Financing; Transforms FIS bal
Slide 8: FIS Positioned for Sustainable Growth
FIS POSITIONED FOR SUSTAINABLE GROWTH Financial Institutions Shifting from Liquidity Focus to Profitability Focus MARKET TRENDS CLIENT NEEDS FIS OPPORTUNITIES • Modernize Technology Stacks ➢ Cloud-Native Offerings: Componentized Core Increased Demand for with Open APIs Digitization Across All • Impr
Slide 9: Key Wins Across Breadth of Capabilities
KEY WINS ACROSS BREADTH OF CAPABILTIES ENTERPRISE CORE INSTITUTIONAL PAYMENTS & NETWORK PLATFORMS SOLUTIONS Digital One Premium Payback Treasury Solutions Core Processing NYCE Insurance Payments One Acquiring Cleared Derivatives ROBUST SALES PIPELINE FURTHER SUPPORTED BY “AMPLIFY” INITIATIVE 9
Slide 10: Driving FIS' Future Forward
DRIVING FIS’ FUTURE FORWARD Shifting Costs to Client-Centered Outcomes • Building an intuitive client experience; EFFICIENCY: simple, human • Third-party spend • Enhanced automation of processes • Investing in new talent to enable new • Artificial Intelligence capabilities and client outcomes • Enha
Slide 11: Financial Results & Guidance
2 Financial Results & Guidance 11
Slide 12: Financial Results
FINANCIAL RESULTS 2Q 2023 RESULTS TOTAL REVENUE ADJ. EBITDA MARGIN ADJUSTED EPS 3.7B 41.4 % $1.55 +2% ORGANIC (160) BPS (10)% REPORTED 2Q 2023 KEY METRICS FREE CASH FLOW CAPEX CAPITAL RETURN BALANCE SHEET $953M $267M $309M $19.5B 3.2x 3.4% 104% Conversion 7% of Revenue Dividends Paid Total Debt Leve
Slide 13: Banking & Capital Markets Financial Results
BANKING & CAPITAL MARKETS FINANCIAL RESULTS 2Q 2023 RESULTS TOTAL REVENUE BACKLOG RECURRING REVENUE 2.4B +3% ORGANIC $23B 0% ORGANIC +4% ORGANIC BANKING SOLUTIONS CAPITAL MARKETS REVENUE GROWTH +3% REVENUE GROWTH +10% +2% Recurring Revenue Growth +7% Recurring Revenue Growth ORGANIC (10)% ORGANIC +8
Slide 14: Worldpay Financial Results
WORLDPAY FINANCIAL RESULTS 2Q 2023 RESULTS TOTAL REVENUE ADJ. EBITDA MARGIN GLOBAL VOLUME 1.3B +1% ORGANIC 48.3 % +120 BPS $591B +6% CONSTANT CURRENCY MERCHANT SOLUTIONS +12 % (4) % (3) % Global eCommerce Enterprise Organic SMB Organic Growth Organic Growth Growth (3)% (8)% North America Growth Inte
Slide 15: Future Forward: Financial Update
FUTURE FORWARD: FINANCIAL UPDATE Operational Expense (Adj. EBITDA Impact) $700M $600M $600M Value Drivers of Future Forward $500M $450M • Efficiency: Automating and improving processes to optimize expense base $400M $300M • Effectiveness: Improving ways of working to accelerate $300M delivery and ti
Slide 16: FIS Capital Allocation Priorities
FIS CAPITAL ALLOCATION PRIORITIES SHARE DEBT REDUCTION DIVIDENDS REPURCHASE / M&A Prioritizing Debt Repayment Maintain ~35% Payout Ratio Incremental Capital Returned Targeting long-term range of 2.5x - 3.0x Continue target payout ratio post Further capital returned to shareholders leverage transacti
Slide 17: Updated 2023 Outlook
UPDATED 2023 OUTLOOK(1) ($ millions) METRICS 3Q 2023 FY 2023 Revenue $3,640 - $3,690 $14,500 - $14,631 Organic Revenue Growth 1% - 2% ~1% Banking Solutions 0% - 2% 1% - 2% Merchant Solutions (2)% - 0% (2)% - (1)% Capital Market Solutions 6% - 8% 5% - 6% Adjusted EBITDA $1,580 - $1,625 $6,025 - $6,14
Slide 18: Post Transaction Close Considerations
POST TRANSACTION CLOSE CONSIDERATIONS FIS’ Equity Stake of Worldpay Valued at Over $4 Billion Effective Tax Rate Weighted Average Interest Rate • Following the close of the transaction, anticipate • Following the close of the transaction, anticipate FIS effective tax rate of ~19% - 21% reducing gros
Slide 19: Q&A
Q&A 19
Slide 20: Appendix
APPENDIX 20
Slide 21: 2023 Guidance – Additional Assumptions
2023 Guidance – Additional Assumptions (1) ($ millions) METRICS 3Q 2023 GUIDANCE Positive F/X Impact to Revenue ~$35 Corporate and Other Revenue ~$60 METRICS FY 2023 GUIDANCE Positive F/X Impact to Revenue ~$25 Corporate and Other Revenue ~$225 (1) The Company plans to present the operating results
Slide 22: Forward-Looking Statements
Forward-Looking Statements This earnings release 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 or pr
Slide 23: Forward-Looking Statements
Forward-Looking Statements • uncertainties as to the timing of the consummation of the pending Worldpay transaction or whether such sale will be completed; • risks associated with the impact, timing or terms of the pending Worldpay transaction; • risks associated with the expected benefits and costs
Slide 24: FIS Use of Non-GAAP Financial Information
FIS Use of NON-GAAP Financial Information 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 summarizi
Slide 25: Reconciliation of GAAP to Non-GAAP Financials
Reconciliation of GAAP to Non-GAAP Financials THREE MONTHS ENDED JUNE 30, 2023 CAPITAL MARKET CORPORATE AND BANKING SOLUTIONS MERCHANT SOLUTIONS TOTAL SOLUTIONS OTHER Revenue $1,702 $1,312 $672 $60 $3,746 FX 2 (1) 2 - 3 Constant Currency Revenue $1,704 $1,311 $674 $60 $3,749 THREE MONTHS ENDED JUNE
Slide 26: Reconciliation of GAAP to Non-GAAP Financials
Reconciliation of GAAP to Non-GAAP Financials THREE MONTHS ENDED JUNE 30, 2023 Net cash provided by operating activities $1,087 Non-GAAP adjustments: Acquisition, integration and other payments (1) 81 Settlement activity 52 Adjusted cash flows from operations $1,220 Capital expenditures (2) (267) Fr
Slide 27: Reconciliation of GAAP to Non-GAAP Financials
Reconciliation of GAAP to Non-GAAP Financials THREE MONTHS ENDED JUNE 30, 2023 2022 Net earnings (loss) attributable to FIS common stockholders $(6,596) $277 Provision (benefit) for income taxes 72 77 Interest expense, net 153 47 Other, net 55 (27) Operating income (loss), as reported $(6,316) $374
Slide 28: Reconciliation of GAAP to Non-GAAP Financials
Reconciliation of GAAP to Non-GAAP Financials THREE MONTHS ENDED JUNE 30, 2023 2022 Earnings (loss) before income taxes $(6,522) $357 (Provision) benefit for income taxes (72) (77) Net (earnings) loss attributable to noncontrolling interest (2) (3) Net earnings (loss) attributable to FIS common stoc
Slide 29: Notes to Unaudited Supplemental GAAP to Non-GAAP Reconciliations
Notes to Unaudited - Supplemental GAAP to Non-GAAP Reconciliations (1) This item represents purchase price amortization expense on all intangible assets acquired through various Company acquisitions, including customer relationships, contract value, technology assets, trademarks and trade names. Thi
Slide 30: Notes to Unaudited Supplemental GAAP to Non-GAAP Reconciliations
Notes to Unaudited - Supplemental GAAP to Non-GAAP Reconciliations (4) Non-operating (income) expense primarily consists of other income and expense items outside of the Company’s operating activities, including fair value adjustments on certain non-operating assets and liabilities and foreign curre
Slide 31: Reconciliation of GAAP to Non-GAAP Financials
Reconciliation of GAAP to Non-GAAP Financials JUNE 30, 2023 2022 CHANGE GROWTH (1) Backlog (2) $23.0 $23.0 $0.0 0% Organic adjustments (3) 0% Organic Backlog 0% (unaudited) (1) Backlog growth percentage may not calculate due to rounding. (2) Backlog reflects the approximate transaction price allocat
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