ACI Worldwide, Inc. · NASDAQ:ACIW
ACI Worldwide — Davidson Conference (May 2010)
35 slides from ACI Worldwide's conference presentation, May 2010
Slide 1: ACI Investor Presentation May 2010
ACI INVESTOR PRESENTATION May 2010 1
Slide 2: Safe Harbor For Forward-Looking Statements
Private Securities Litigation Reform Act of 1995 Safe Harbor For Forward-Looking Statements This presentation contains forward-looking statements based on current expectations that involve a number of risks and uncertainties. The forward- looking statements are made pursuant to safe harbor provision
Slide 3: Agenda
Agenda • Who is ACI • ACI’s Marketplace Opportunity • Product Overview • Financial Summary 3
Slide 4: Tamar Gerber, Vice President, Investor Relations & Financial Communications
Tamar Gerber, Vice President, Investor Relations & Financial Communications
Slide 5: A global company with customers in 92 countries
A global company with customers in 92 countries Country with ACI customers 5 Strategic Centers Regional Sales Office Distributors/Sales Agents
Slide 6: Global Market Trends and Drivers
Global Market Trends and Drivers • Our target market driven by growth in electronic payment transaction volumes • Consolidation creates very large scale needs – And inefficient platform redundancies • Intense focus on fraud and risk management • Continued desire to reduce costs and increase producti
Slide 7: The Agile Payments Strategy in Action
The Agile Payments Strategy in Action Be the leading provider of a unified solution that initiates, manages, secures and operates payments to maximize the total ™ economic impact for our customers. • Identified key products required for a holistic solution. • Deconstructing products into software se
Slide 8: ACI Market Share
ACI Market Share BANKING 42 customers in the top 100 world banks 9 of the top 10 3 of the top 5 7 of the top 10 in Canada in Netherlands in India 3 of the top 5 4 of the top 5 22 of the top 25 in Greece in Indonesia in the U.S. 7 of the top 10 4 of the top 10 in the U.K. in Malaysia 4 of the top 10
Slide 9: Key Trends by Region
Key Trends by Region North America Latin America ▸ Continued growth in payment volumes ▸ Economic growth and “banking” of the ▸ Need for payment silo consolidation population ▸ Banks “in-sourcing” to leverage their scale ▸ Replacing legacy technologies ▸ Migrating older ACI solutions to newer ▸ Migr
Slide 10: Key Trends by Region
Key Trends by Region Middle East Africa ▸ Sophistication and economic growth ▸ Nascent economies, but large opportunity ▸ Replacing legacy technologies base ▸ X-sell risk wholesale, back office ▸ Entry opportunity for leapfrog technologies (mobile, prepaid) ▸ Migrating older ACI solutions to newer v
Slide 11: Markets with the Biggest Opportunity
Markets with the Biggest Opportunity A focused strategy on strategic markets Canada United Kingdom France Germany United States Italy China Japan Mexico India Brazil Australia A focus on large and/or high-growth markets 11
Slide 12: ACI Product Assets – Sample Customer
ACI Product Assets – Sample Customer RETAIL PAYMENTS SOLUTIONS WHOLESALE PAYMENTS SOLUTIONS ENTERPRISE PAYMENT SETTLEMENT ENTERPRISE ONLINE BANKING PAYMENTS & ACCOUNT MANAGEMENT PAYMENTS ▸ ACI Enterprise Bankers ▸ ACI Money Transfer ▸ ACI Global Banker ▸ BASE24 Card Management System ▸ ACI Issuer an
Slide 13: "Discovery" - Customer Current Assets Example
“Discovery” - Customer* Current Assets Example Germany Inhouse IBM Sysem z * Note - fictitious customer Scandanavia Outsourced UK BASE24 Canada HP Non-stop Holland BASE24-pos BASE24 HP Non-stop HP Non-stop Spain Outsourced Japan Legacy U.S. West U.S. East IBM System z Outsourced Legacy Vendor Italy
Slide 14: "Strawman" - Customer Sample End State
“Strawman” - Customer Sample End State Northern Asia North America BASE24-eps BASE24-eps PRM, Back Office PRM, Back Office EMEA BASE24-eps PRM, Back Office Asia Pacific BASE24-eps Latin America PRM, Back Office BASE24-eps PRM, Back Office Clear efficiencies available from regional hub deployment 14
Slide 15: Key Benefits to the Customer
Key Benefits to the Customer • Reduced overall costs due to the elimination of redundant silos for payments and risk management • Increased efficiency through an integrated end-to-end solution • Improved time to market for new products and services leveraging next-generation payment technologies • I
Slide 16: General 2009/Early 2010 Sales Market Summary
General 2009/ Early 2010 Sales Market Summary • Demonstrated ability to renew contracts at profitable rates in 2009 – Resulted in higher recurring revenue business throughout the year – Strong Q1 2010 add on/term renewal business • Impact of financial markets crisis – Led to further sales cycle elon
Slide 17: Financial Review
Financial Review Scott Behrens, Chief Financial Officer
Slide 18: Q1 2010 Update
Q1 2010 Update • Stronger business performance compared to prior year • Sales of $81.1 million, up $20 million versus Q1-09 sales • Stronger expense management • Stronger OFCF • Stronger recurring revenue led by maintenance • Tracking to full year guidance 18
Slide 19: Calendar Year Revenue Mix
Calendar Year Revenue Mix $450 $418 - $428 $418 $406 $400 $374 $356 20% 19% $350 $318 17% 16% $300 14% 24% 23% 21% $250 (millions) 30% $200 29% $150 60% 59% 57% 57% 54% $100 $50 $0 CY 2005 CY 2006 CY 2007 CY 2008 CY 2009 CY 2010 (proj.) Total Recurring Revenue Total Non-Recurring License Fees Total
Slide 20: Customer Revenue by Industry Type
Customer Revenue by Industry Type Industry Type CY 2009 Revenue % Finance 283,699 68% Banks and credit unions Other 16,495 5% Healthcare, Colleges, Government, social svcs, etc Processor 72,660 17% Processors and credit card companies Retail 32,900 10% Retail Grand Total 405,755 100% Industry Type P
Slide 21: CY 2009 Revenue Concentration
CY 2009 Revenue Concentration Top 1 3% 30% Top 5 12% Top 10 20% Top 20 30% 2009 Rank 2008 Rank Channel #1 #15 Americas #2 #1 Americas #3 #2 Global #4 #48 Americas #5 #8 EMEA #6 #6 EMEA 70% #7 #5 Americas #8 #166 Americas #9 #19 Americas #10 #3 Americas #11 #292 EMEA = Revenue from Top 20 Customers #
Slide 22: Revenue Phasing is consistent over past two years
Revenue Phasing is consistent over past two years 140.0 120.0 100.0 80.0 60.0 125.9 109.2 108.6 109.2 104.5 90.7 88.2 87.2 87.7 40.0 20.0 0.0 Q1'08 Q2'08 Q3'08 Q4'08 Q1'09 Q2'09 Q3'09 Q4'09 Q1'10 • Q2 2008 revenue was higher than a normal quarter due to Faster Payments regulatory mandate in the UK •
Slide 23: Sales by Agile Payments Type
Sales by Agile Payments Type Product Division Qtr. Ended Qtr. Ended Qtr. Ended Qtr. Ended Qtr. Ended Product Focus Mar. 09 Jun. 09 Sep. 09 Dec. 09 Mar. 10 Initiate 6,262 13,819 7,000 42,305 890 Manage 38,334 61,698 63,817 107,041 55,198 Secure 4,904 5,615 7,339 8,705 12,945 Operate 11,303 16,195 18,
Slide 24: 60-Month Backlog Is Driven By Maintenance
60- Month Backlog Is Driven By Maintenance 60-Month Backlog Imp & Prof Services On-Demand 6% • Implementation and 13% Professional Services more Applications (License) 35% significant in 12-month backlog • Recurring revenues (maintenance, license, and Maintenance & hosting fees) comprise Enhanced Su
Slide 25: Operating Income / EBITDA 2007-2010
Operating Income / EBITDA 2007-2010 Operating Income Operating EBITDA $60 $100 $85 $49 $80 $73 $45 $42 $60 $52 $30 $22 $40 $27 $15 $20 $0 $0 $0 CY 2007 CY 2008 CY 2009 CY 2010G CY 2007 CY 2008 CY 2009 CY 2010G 25
Slide 26: Operating Income doubled over the past 8 quarters
Operating Income doubled over the past 8 quarters 50.0 40.0 30.0 20.0 35.0 10.0 19.6 11.9 1.3 3.0 - (2.1) (2.1) (0.9) (3.2) 08 08 08 08 09 09 09 09 10 1' 2' 3' 4' 1' 2' 3' 4' 1' Q Q Q Q Q Q Q Q Q (10.0) • Operating income also remains back-half loaded and has grown significantly as we rationalized e
Slide 27: Ongoing Margin Improvement Initiatives
Ongoing Margin Improvement Initiatives ACI’s profitability is driven by four main sources of revenue: Maintenance, Application, Services and On Demand. • Maintenance – Reliable & predictable revenue and cash flow stream – Higher maintenance pricing on mature + sunset products or move to newer versio
Slide 28: 2010 Guidance
2010 Guidance Key Metrics 2009 Actuals 2010 Growth Range 2010 Low 2010 High Revenue $405.8 3-5% $418 $428 Operating Income $41.6 15-20% $48 $50 Operating EBITDA $72.9 14-18% $83 $86 • Revenue – Expect revenue growth even as we anticipate fewer term renewals in 2010 where revenue recognition occurs i
Slide 29: Non-GAAP Financial Measures
Non-GAAP Financial Measures Management generally compensates for limitations in the use of non- GAAP financial measures by relying on comparable GAAP financial measures and providing investors with a reconciliation of non-GAAP financial measures only in addition to and in conjunction with results pr
Slide 30: Non-GAAP Financial Measures
Non-GAAP Financial Measures Operating EBITDA is defined as operating income plus depreciation and amortization and non-cash stock compensation. Operating EBITDA is considered a non-GAAP financial measure as defined by SEC Regulation G. ($ in millions) Years ended December 31, 2009 2008 2007 Operatin
Slide 31: Non-GAAP Financial Measures
Non-GAAP Financial Measures ACI also includes backlog estimates which are all software license fees, maintenance fees and services specified in executed contracts, as well as revenues from assumed contract renewals to the extent that we believe recognition of the related revenue will occur within th
Slide 32: Non-GAAP Financial Measures
Non-GAAP Financial Measures Estimates of future financial results are inherently unreliable. Our backlog estimates require substantial judgment and are based on a number of assumptions as described above. These assumptions may turn out to be inaccurate or wrong, including for reasons outside of mana
Slide 33: Forward-Looking Statements
Forward-Looking Statements This presentation contains forward-looking statements based on current expectations that involve a number of risks and uncertainties. Generally, forward-looking statements do not relate strictly to historical or current facts and may include words or phrases such as “belie
Slide 34: Forward-Looking Statements
Forward-Looking Statements All of the forward-looking statements are expressly qualified by the risk factors discussed in our filings with the Securities and Exchange Commission. Such factors include, but are not limited to, risks related to the global financial crisis, restrictions and other financ
Slide 35: Every Second. Every Day.
IMAI EVERY SECOND. EVERY DAY. 35