Fidelity National Information Services, Inc. · NYSE:FIS
Fidelity National Information Services — Q2 2021 Earnings Presentation
27 slides from Fidelity National Information Services's earnings presentation, Aug 3, 2021
Slide 1: Second Quarter 2021 Earnings Call
SECOND QUARTER 2021 EARNINGS CALL August 3, 2021
Slide 2: Speakers
SPEAKERS BUSINESS & Gary Norcross STRATEGY Chairman and Chief Executive Officer UPDATE FINANCIAL RESULTS & Woody Woodall Chief Financial Officer GUIDANCE
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 & Strategy Update
BUSINESS & STRATEGY UPDATE
Slide 5: Results Exceed Expectations
RESULTS EXCEED EXPECTATIONS TOTAL REVENUE EXCEPTIONAL SEGMENT PERFORMANCE PIVOT TO GROWTH 17% STRATEGY SUCCESS 16% 3.5 Capital Banking $ Merchant G Market Continued Investment Driving Solutions Solutions 7-9% O R R Solutions O G W A Mid-term Revenue Growth BILLION N 8% 45% 6% T I Outlook through 202
Slide 6: Integrated Cloud-Native Ecosystem Creates Network Effect
INTEGRATED CLOUD-NATIVE ECOSYSTEM CREATES NETWORK EFFECT Clients are combining capabilities across Pay, Bank and Invest to innovate and grow PAY BANK INVEST Wealth and Omnichannel B2B Insurance Retirement Global Digital Banking Inv. Banking Cryptocurrency eCommerce and Core & Brokerage Inv. Integrat
Slide 7: Premium Payback Loyalty Network
PREMIUM PAYBACK LOYALTY NETWORK Exceptional value proposition for merchants, issuers and consumers is driving network adoption PREMIUM PAYBACK NETWORK REWARDS-CARD Real-Time Points MERCHANTS ISSUERS Redemption Wallet IN-STORE TAKE RATE 1 50% 1. 50% at retail merchants and 31% at fuel merchants in Ju
Slide 8: New Solution Revenue
NEW SOLUTION REVENUE 1 New solutions are creating cross-sell opportunities and contributing to our revenue acceleration Growing Revenue Mix from Increasing Contribution to Revenue New Solutions Growth from New Solutions (NSR as % of Total Revenue) (NSR Contribution to Total Revenue Growth) >4% 2-3%
Slide 9: Customized Innovation
CUSTOMIZED INNOVATION Integrated ecosystem of cloud-native capabilities enables clients to create tailored solutions Access Modern Banking Premium Payback Worldpay Loyalty Network Platform Single eCommerce Cloud-Native Core Software Gateway Integrated Data Analytics Digital One Payments Digital Bank
Slide 10: Financial Results & Guidance
FINANCIAL RESULTS & GUIDANCE
Slide 11: Consolidated Financial Results
CONSOLIDATED FINANCIAL RESULTS REVENUE ($ in millions) EXCEPTIONAL 2Q 2021 RESULTS with continuing acceleration across all three operating segments 2Q21 $3,475 • Pivot to Growth Strategy accelerated revenue growth to 17% year-over-year 2Q20 • Record new sales and cross-selling quarter drove 2021 gui
Slide 12: 2Q 2021 Segment Results
2Q 2021 SEGMENT RESULTS BANKING SOLUTIONS REVENUE ($ in millions) • Revenue increased 8% driven by innovative solutions, including 17% 2Q21 $1,578 Issuer Processing growth and approximately 30% Modern Banking Platform growth • Two Modern Banking Platform wins and first cross-sell this quarter 2Q20 •
Slide 13: Initiating 3Q and Raising FY 2021 Guidance
INITIATING 3Q AND RAISING FY 2021 GUIDANCE ($ millions, except per share data) METRICS 3Q 2021 FY 2021 Revenue $3,490 - $3,520 $13,900 - $14,000 Organic Revenue Growth 9% - 10% 10% - 11% Adjusted EBITDA $1,550 - $1,575 $6,125 - $6,200 Year-over-year Growth 14% - 16% 16% - 18% Margin Expansion 190 -
Slide 14: Appendix
APPENDIX
Slide 15: Strong Balance Sheet and Return of Capital
STRONG BALANCE SHEET AND RETURN OF CAPITAL RETURN OF CAPITAL 2Q 2021 STRONG BALANCE SHEET 2Q 2021 Free Cash Flow $1,005M Total Debt $19.4B Dividends Paid $242M Weighted Average Interest Rate 1.0% Shares Repurchased 2.7M Leverage Ratio 3.3x Share Repurchase Amount $400M Target Leverage Ratio <3.0x 15
Slide 16: 3Q 2021 Guidance – Additional Assumptions
3Q 2021 GUIDANCE – ADDITIONAL ASSUMPTIONS ($ millions) METRICS 3Q 2021 GUIDANCE Positive F/X Impact to Revenue ~$35 Corporate and Other Revenue Growth ~(10)% Depreciation and Amortization ~$295 (Excluding Purchase Price Amortization) Net Interest Expense ~$45 Effective Tax Rate ~14.5% Weighted Avera
Slide 17: FY 2021 Guidance – Additional Assumptions
FY 2021 GUIDANCE – ADDITIONAL ASSUMPTIONS ($ millions) METRICS FY 2021 GUIDANCE Positive F/X Impact to Revenue ~$150 Corporate and Other Revenue Growth ~(10)% Depreciation and Amortization ~$1,155 – $1,170 (Excluding Purchase Price Amortization) Net Interest Expense ~$210 – $215 Effective Tax Rate ~
Slide 18: Forward-Looking Statements
FORWARD-LOOKING STATEMENTS This presentation and today’s webcast contain “forward-looking statements” within the meaning of the U.S. federal securities laws. Statements that are not historical facts, including statements about anticipated financial outcomes, including any earnings guidance or projec
Slide 19: Forward-Looking Statements
FORWARD-LOOKING STATEMENTS • competitive pressures on pricing related to the decreasing number of community banks in the U.S., the development of new disruptive technologies competing with one or more of our solutions, increasing presence of international competitors in the U.S. market and the entry
Slide 20: FIS Use of Non-GAAP Financial Information
FIS USE OF NON-GAAP FINANCIAL INFORMATION Generally Accepted Accounting Principles (GAAP) is the term used to refer to the standard framework of guidelines for financial accounting in the United States. GAAP includes the standards, conventions, and rules accountants follow in recording and summarizi
Slide 21: Reconciliation of GAAP to Non-GAAP Financials
RECONCILIATION OF GAAP TO NON-GAAP FINANCIALS ($ millions, unaudited) THREE MONTHS ENDED JUNE 30, 2021 MERCHANT BANKING CAPITAL MARKET CORPORATE TOTAL SOLUTIONS SOLUTIONS SOLUTIONS AND OTHER Revenue $1,177 $1,578 $630 $90 $3,475 FX (32) (13) (12) (2) (59) Constant Currency Revenue $1,145 $1,566 $618
Slide 22: 2020 Organic Base
2020 ORGANIC BASE ($ millions) Organic Base 1Q 2020 2Q 2020 3Q 2020 4Q 2020 FY 2020 Banking Solutions $ 1,444 $ 1,462 $ 1,488 $ 1,551 $ 5,944 Merchant Solutions 935 812 1,017 1,003 3,767 Capital Market Solutions 597 593 587 663 2,440 Operating Segment Total $ 2,976 $ 2,867 $ 3,092 $ 3,217 $ 12,152 T
Slide 23: Reconciliation of GAAP to Non-GAAP Financials
RECONCILIATION OF GAAP TO NON-GAAP FINANCIALS ($ millions, unaudited) THREE MONTHS ENDED JUNE 30, 2021 2020 Net earnings (loss) attributable to FIS common stockholders $341 $19 Provision (benefit) for income taxes 302 4 Interest expense, net 48 88 Other, net (328) (65) Operating income, as reported
Slide 24: Reconciliation of GAAP to Non-GAAP Financials
RECONCILIATION OF GAAP TO NON-GAAP FINANCIALS ($ millions, unaudited) THREE MONTHS ENDED JUNE 30, 2021 2020 Earnings before income taxes and equity method investment earnings (loss) $639 $32 (Provision) benefit for income taxes (302) (4) Equity method investment earnings (loss) 5 (7) Net (earnings)
Slide 25: Reconciliation of GAAP to Non-GAAP Financials
RECONCILIATION OF GAAP TO NON-GAAP FINANCIALS ($ millions, unaudited) THREE MONTHS ENDED JUNE 30, 2021 Net cash provided by operating activities $1,028 Non-GAAP adjustments: Acquisition, integration and other payments 149 Settlement activity 112 Adjusted cash flows from operations $1,289 Capital exp
Slide 26: Reconciliation of GAAP to Non-GAAP Financials
RECONCILIATION OF GAAP TO NON-GAAP FINANCIALS ($ billions, unaudited) JUNE 30, 2021 2020 CHANGE GROWTH2 Backlog1 $22.5 $21.0 $1.5 7% Organic Adjustments: Corporate and Other 1% Acquisitions and Divestitures - Organic Backlog 8% 1 Backlog reflects the approximate transaction price allocated to the re
Slide 27: Advancing the Way the World Pays, Banks and Invests
(— | — ADVANCING THE WAY THE WORLD PAYS, BANKS AND INVESTS™
Fidelity National Information Services — Q2 2021 Earnings Presentation on 6ix