Deluxe Corporation · NYSE:DLX
Deluxe — Investor Presentation (May 2019)
31 slides from Deluxe's investor presentation, May 15, 2019
Slide 1: Investor Presentation May 2019
Investor Presentation MAY 2019
Slide 2: Cautionary Statement
Cautionary Statement Financial estimates, projections, and management’s intentions and expectations regarding the Company's future performance, are forward-looking in nature as defined in the Private Securities Litigation Reform Act of 1995. These comments are subject to risks and uncertainties, whi
Slide 3: Company Overview
Company Overview PYDELUXE ;
Slide 4: Deluxe Today and Path Ahead
Deluxe Today and Path Ahead The Company currently Deluxe is transforming manages and reports the into a trusted, tech- Revenue has business based on three enabled solutions increased for 9 end-customer channels company for enterprises, consecutive years, Small Business Services small businesses and
Slide 5: Deluxe Today and Path Ahead Continued
Deluxe Today and Path Ahead Continued Barry McCarthy joined Deluxe as President and Chief 4.8+ M 4,600 Executive Officer in November 2018 SMALL BUSINESS FINANCIAL INSTITUTION CUSTOMERS CUSTOMERS Deluxe historically operated as a “Company of Companies” Under Barry’s leadership, we are fundamentally c
Slide 6: DLX – A Compelling Investment Opportunity
DLX – A Compelling Investment Opportunity Leverage existing core competencies Fundamentally changing how Deluxe goes to and assets to accelerate organic market and operates - “One Deluxe” strategy revenue growth Continue our commitment to responsible Plan to compete in four primary areas; management
Slide 7: Strategy
Strategy 7
Slide 8: Core Competencies & Key Assets
Core Competencies & Key Assets Our goal is to Broad base of existing customers leverage these competencies Proven, trusted partner and assets to transform into a Highly respected brand, opportunity to drive more business within current customer base Trusted, Tech-Enabled Cost-efficient service provi
Slide 9: Four Primary Areas Of Focus Going Forward
Four* Primary Areas Of Focus Going Forward A Company of Products GROWTH AREA VALUE AREA PromotionalPromotional PaymentsPayments CloudCloud ChecksChecks ProductsProducts • remote deposit capture • shared & managed hosting • business forms • printed checks • disbursements & eChecks • digital engagemen
Slide 10: Fundamentally Different Transformation
Fundamentally Different Transformation Transform into a Much deeper and broader impact on the enterprise, more than diversification Company of Products and Fundamental changes to go-to-market strategy, operating model, and Operate as organizational design One Technology platform integration and cent
Slide 11: It's a New Day at Deluxe
It’s a New Day at Deluxe Paradigm Shift in Revenue Maximization • Empower employees to think and act as owners - in April 2019, all North American INNOVATE employees received Deluxe RSUs THROUGH NEW & IMPROVED SOLUTIONS • Keep customers at the center of all we do by listening to their needs ONE DELU
Slide 12: Business Characteristics for Growth
Business Characteristics for Growth Recurring revenue streams Scalable business models Attractive cost structures Strong PE multiples 12
Slide 13: Payments: Leveraging an Already Strong Platform
• Founded as a payments company Payments Leveraging an Already Strong • Trusted, well recognized brand Platform • Highly effective solutions valued by our customers • Integrated receivables, leveraging existing treasury management solutions augmented by new product innovation • Card-based payments a
Slide 14: Cloud: Leveraging Existing Vertical Expertise and Expanding Capabilities
• Existing vertical expertise can be leveraged to develop and Cloud deliver even more solutions into the market Leveraging Existing • Data-driven marketing and other data services through Vertical Expertise and FMCG, Datamyx and other existing capabilities Expanding Capabilities • Incorporation serv
Slide 15: Promotional Products and Checks
Promotional • Broad range of existing products Products • Web to Print, retail packaging, banners, business forms, etc. Leveraging Existing Capabilities • Personalization of products at scale with quick turnaround and great value • Products that help businesses manage and promote brands • Leverage e
Slide 16: Deluxe Competitive Landscape
Deluxe Competitive Landscape Promotional Payments Cloud Promotional Checks Payments Cloud Products Checks Products • Fiserv, Fidelity, Jack Henry, • Cimpress, 123 Print, Zazzle, • Local Printers • Harland Clarke, Main Street Finastra, CSI, FIS, First Data, Digital Room DH/Fundtech, Pegasystems, Exel
Slide 17: One Deluxe: Selling all products to all customers
In the future, we will approach the market as One a Company of Products Deluxe selling ALL of our products to ALL of our customers
Slide 18: New Growth Initiatives
New Growth Initiatives Necessary infrastructure investments to scale the business and advance our ability to accelerate revenue growth $30M to $60M in each of the next two years (expense and capital items) Investments primarily focused in ERP, CRM, HR and technology areas efficiency savings wi
Slide 19: Goals of New Strategy
Goals of New Strategy Promotional Payments Cloud Products Checks Expect to deliver Targeting sustained mid- Expect to maintain $300M of incremental new single digit organic revenue adjusted EBITDA margins net revenue in 2023 after growth in the low-to-mid 20 percent offsetting future check range dec
Slide 20: Financials
Financials PYDELUXE
Slide 21: Revenue Growth & Cash Returned to Shareholders
Revenue Growth & Cash Returned to Shareholders Revenue $ in millions $2.0B to $2.05B $1,998 $2,000 $1,966 $1,849 $1,800 $1,773 $1,674 $1,585 $1,600 $1,515 $1,402 $1,418 $1,400 $1,200 $1,000 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019** Cash from Operations $214M $237M $246M $264M $285M $310M $
Slide 22: Historical Segmentation & Product Revenue View
Historical Segmentation & Product Revenue View 2018 Revenue by Category 2018 Revenue Penetration by Category 2018 Revenue by $ in millions Category/Segment 100% 13% 16% 19% $1,966 $1,998 22% 2,000 26% 11% $1,849 30% $1,773 33% 38% 80% 42% 5% $1,674 37% 59% $1,585 23% 1,600 $1,515 23% $1,418 $617 $75
Slide 23: 2019 Outlook
2019 Outlook 2019 Outlook* 2018 Actual Revenue $2.0B - $2.05B $1.998B FULL YEAR Adjusted Diluted EPS** $6.65 - $6.95 $6.88 Revenue $490M - $505M $488.2M SECOND QUARTER Adjusted Diluted EPS** $1.55 - $1.65 $1.67 * Outlook as of April 25, 2019 is not being re-affirmed by reference in this document – n
Slide 24: Summary
Summary PYDELUXE ~ |
Slide 25: Compelling Investment Opportunity
Compelling Investment Opportunity Leverage existing core competencies Fundamentally changing how Deluxe goes to and assets to accelerate organic market and operates - “One Deluxe” strategy revenue growth Continue our commitment to responsible Plan to compete in four primary areas; management of shar
Slide 26: Trusted Tech-Enabled Solutions Company
: Trusted Tech-Enabled Solutions Company Businesses How We Who We Are We’re In Business Strategy Get There 4.8M SB customers One Deluxe: go to SMB cash management, including fraud and market as one 4,600 FI customers Payments Growth security company Integrated disbursements and receivables World-cla
Slide 27: Investor Contacts
Investor Contacts Barry McCarthy Keith Bush Ed Merritt President and Chief Financial Officer and Treasurer and Vice President Chief Executive Officer Senior Vice President of Investor Relations Investor Relations Tel: 651-787-1370 investorrelations@deluxe.com 27
Slide 28: Appendix: GAAP to Non-GAAP Reconciliations
APPENDIX GAAP TO NON-GAAP RECONCILIATIONS 28
Slide 29: 2018 Adjusted EPS Reconciliation
2018 Adjusted EPS Reconciliation Reconciliation to reported EPS – Diluted 1st Quarter 2018 2nd Quarter 2018 3rd Quarter 2018 4th Quarter 2018 Total Year 2018 Reported Diluted EPS $1.31 $1.25 ($0.67) $1.25 $3.16 Asset impairment charges 0.03 — 1.93 — 1.96 Acquisition amortization 0.27 0.29 0.33 0.35
Slide 30: Revenue Growth Reconciliation From GAAP to Non-GAAP
Revenue Growth Reconciliation From GAAP to Non-GAAP – Enterprise Summarized Q1 2019 Revenue Growth 1.5% Acquisitions (5.8%) Exited Business 0.1% Other (incl. FX and business day adj.) 1.5% Adjusted Organic Growth / (Decline) (2.7%) Adjusted organic growth/(decline) is provided to assist in understan
Slide 31: 051519
051519