Slide 1: Second Quarter 2024 Earnings
Second Quarter 2024 Earnings July 31, 2024 © 2024 Deluxe Corporation
Slide 2: Brian Anderson, Vice President, Strategy & Investor Relations
Brian Anderson Vice President, Strategy & Investor Relations 2
Slide 3: Today's Presenters
Today’s Presenters Barry McCarthy Chip Zint Brian Anderson President and Senior Vice President and Vice President, Chief Executive Officer Chief Financial Officer Strategy & Investor Relations 3
Slide 4: Cautionary Statement
Cautionary Statement Statements made in this presentation concerning Deluxe, the company’s or management’s intentions, expectations, outlook or predictions about future results or events are “forward- looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. Suc
Slide 5: Barry McCarthy
Barry McCarthy President and Chief Executive Officer 5
Slide 6: Q2'24 Highlights
Q2'24 Highlights (in millions) -5.9% -3.0% +25.0% -4.6% +1.6% 6
Slide 7: North Star Progress & Timelines
North Star Progress & Timelines 7
Slide 8: Q2'24 Highlights
Q2'24 Highlights (in millions) -5.9% -3.0% +25.0% -4.6% +1.6% 8
Slide 9: Q2'24 Segment Highlights
Q2'24 Segment Highlights Focused execution sustains YTD Comp Adjusted Earnings and FCF growth Merchant Services Data Solutions ◦ Revenue increased 7.7% vs Q2'23, reflecting ◦ Revenue decreased 3.2% vs Q2'23 lapping very generally stable economic environment and significant FI deposit seeking activit
Slide 10: Long-term Value Creation Algorithm
Long-term Value Creation Algorithm 10
Slide 11: Chip Zint
Chip Zint Chief Financial Officer 11
Slide 12: Q2'24 Financial Summary
Q2'24 Financial Summary TOTAL REVENUE NET INCOME Adjusted EBITDA Adj. EBITDA margin Adj. Diluted EPS $537.8M $20.5M $101.8M 19.0% $0.85 Down 5.9% Or $0.46 per share Increased 1.6% Increased 80 Up 4.9% compared to '23; on a diluted basis; compared to '23 basis points versus '23 Comparable Up from $16
Slide 13: Merchant Services
Merchant Services Payment Processing & Omnichannel Payments Terminals & Devices Reporting (in millions) +7.7% +11.0% Adjusted EBITDA margin was 19.5%, up 60 basis points year-over- year on strong revenue and cost leverage 13
Slide 14: B2B Payments
B2B Payments Treasury Management B2B/Digital Payments Fraud & Security Receivables as a Service Payables as a Service Protection (in millions) -8.0% -7.9% Adjusted EBITDA margin was 19.9%, flat year-over-year, while YTD margins improved by 60bps 14
Slide 15: Data Solutions
Data Solutions Data Driven Marketing Data Analytics and SMB SaaS Solutions (in millions) -3.2% +17.9% Adjusted EBITDA margin was 27.5%, up 490 basis points year-over-year driven by revenue mix and on-going expense management 15
Slide 16: Print
Print Consumer and Extensive range of Web Storefront Platform Business Essentials for Branded Products Business Checks Promotional offerings (in millions) -4.8% -10.4% Adjusted EBITDA margin was 30.4%, down 190 basis points year-over-year driven by specific Q2 A/R reserve adjustments and lower reven
Slide 17: Balance Sheet and Cash Flow
Balance Sheet and Cash Flow Net Debt to Adjusted EBITDA Free Cash Flow (in millions) (in millions) For the 12 Months Ended For the Six Months Ended June 30, 6/30/2024 12/31/2023 Variance 6/30/2024 06/30/2023 Variance Cash Provided by Net Debt $1,534.9 $1,520.9 $14.0 $66.2 $47.3 $18.9 Operating Activ
Slide 18: Capital Structure - Debt maturity ladder
Capital Structure - Debt maturity ladder 18
Slide 19: 2024 Guidance
2024 Guidance Declared regular dividend of $0.30 per share Additional modeling assumptions: ◦ Interest expense of approximately $120 - $125 million ◦ Adjusted tax rate of 26% ◦ Depreciation and amortization of $160 million, of which acquisition amortization is approximately $70 million ◦ Average out
Slide 20: Long-term Value Creation Algorithm
Long-term Value Creation Algorithm 20
Slide 21: Deluxe
» « dlx
Slide 22: Brian Anderson, Vice President, Strategy & Investor Relations
Brian Anderson Vice President, Strategy & Investor Relations 22
Slide 23: Upcoming Conferences/Events
Upcoming Conferences/Events 23
Slide 24: Appendix
Appendix dlx
Slide 25: Consolidated Condensed Statements of Income
Consolidated Condensed Statements of Income in millions, except per share amounts (Unaudited) Quarter Ended June 30, Six Months Ended June 30, 2024 2023 2024 2023 Product revenue $309.2 $323.8 $609.6 $634.1 Service revenue 228.6 247.9 463.2 483.0 Total revenue 537.8 571.7 1,072.8 1,117.1 Cost of pro
Slide 26: Segment Information
Segment Information in millions (Unaudited) Quarter Ended June 30, Six Months Ended June 30, 2024 2023 2024 2023 Effective January 1, 2024, the Revenue: company realigned its organization Merchant Services $98.5 $91.5 $195.0 $180.6 structure to better reflect its portfolio B2B Payments 70.2 76.3 139
Slide 27: Reconciliation of GAAP to Non-GAAP Measures: Adjusted EBITDA
Reconciliation of GAAP to Non-GAAP Measures EBITDA, Adjusted EBITDA and Adjusted EBITDA margin in millions (Unaudited) Quarter Ended June 30, Six Months Ended June 30, 2024 2023 2024 2023 Net income $20.5 $16.4 $31.3 $19.2 Non-controlling interest — — — (0.1) Interest expense 30.2 31.9 61.0 61.9 Inc
Slide 28: Adjusted Diluted EPS - Q2 2024
Reconciliation of GAAP to Non-GAAP Measures Adjusted Diluted EPS - Q2 2024 dollars and shares in millions, except per share amounts (Unaudited) Gain on Acquisition and Restructuring Share-based sale of Income tax Q2 2024 accelerated and integration compensation businesses/ impact of Q2 2024 GAAP amo
Slide 29: Adjusted Diluted EPS - Q2 2023
Reconciliation of GAAP to Non-GAAP Measures Adjusted Diluted EPS - Q2 2023 dollars and shares in millions, except per share amounts (Unaudited) Gain on Restructuring Share-based sale of Income tax Q2 2023 Acquisition and integration compensation Certain legal- businesses/ impact of Q2 2023 GAAP amor
Slide 30: Adjusted Diluted EPS - June YTD 2024
Reconciliation of GAAP to Non-GAAP Measures Adjusted Diluted EPS - June YTD 2024 dollars and shares in millions, except per share amounts (Unaudited) Gain on Acquisition and Restructuring Share-based Certain legal- sale of Income tax June YTD June YTD 2024 accelerated and integration compensation re
Slide 31: Adjusted Diluted EPS - June YTD 2023
Reconciliation of GAAP to Non-GAAP Measures Adjusted Diluted EPS - June YTD 2023 dollars and shares in millions, except per share amounts (Unaudited) Gain on Restructuring Share-based Certain legal- sale of Income tax June YTD 2023 Acquisition and integration compensation related businesses/ impact
Slide 32: Comparable Adjusted Revenue and EBITDA
Reconciliation of GAAP to Non-GAAP Measures Comparable Adjusted Revenue / Comparable Adjusted EBITDA / Comparable Adjusted EBITDA Margin in millions (Unaudited) Quarter Ended June 30, Six Months Ended June 30, 2024 2023 2024 2023 Total revenue $537.8 $571.7 $1,072.8 $1,117.1 Business exits (2.9) (20
Slide 33: Comparable Adjusted Outlook Reconciliation
Reconciliation of GAAP to Non-GAAP Measures Comparable Adjusted Revenue / Comparable Adjusted EBITDA / Comparable Adjusted EPS Outlook (Unaudited) Total Year 2024 Outlook 2023 Actual (in billions) Total revenue $2.120 - $2.160 $2.192 Less: Business exits — (0.056) Comparable adjusted revenue $2.120
Slide 34: Net Debt to Adjusted EBITDA
Reconciliation of GAAP to Non-GAAP Measures Net Debt to Adjusted EBITDA dollars in millions (Unaudited) December 31, June 30, 2024 2023 Total debt $1,558.0 $1,592.9 Cash and cash equivalents (23.1) (72.0) Net debt $1,534.9 $1,520.9 TRAILING 12 MONTHS ADJUSTED EBITDA: 12 Months Ended 12 Months Ended
Slide 35: Free Cash Flow
Reconciliation of GAAP to Non-GAAP Measures Free Cash Flow in millions (Unaudited) Quarter Ended June 30, Six Months Ended June 30, 2024 2023 2024 2023 Net cash provided (used) by operating activities $39.6 $54.1 $66.2 $47.3 Purchases of capital assets (28.2) (30.4) (48.6) (55.9) Free cash flow $11.
Slide 36: Deluxe
deluxe