Slide 1: Q2 2013 Earnings Conference Call
NCR Confidential Q2 2013 EARNINGS CONFERENCE CALL BILL NUTI, CHAIRMAN AND CEO July 30, 2013
Slide 2: Notes to Investors
NCR Confidential NOTES TO INVESTORS 2 Comments made during this conference call and in these materials may contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements use words such as “seek,” “potential,” “expect,” “striv
Slide 3: Q2 2013 Key Takeaways
NCR Confidential 3 Q2 2013 KEY TAKEAWAYS NCR Reinvention continues; Demonstrated vision to execution Strong Software(1)/SaaS growth Q2 Software(1) revenues of $190 million, up 44% y/y Q2 SaaS revenues up 64% y/y Software(1) revenue guidance of $725-$775M in 2013 and $1B in 2015 on track Expand
Slide 4: Q2 2013 Financial Highlights
NCR Confidential 4 Q2 2013 FINANCIAL HIGHLIGHTS Q2 2012 Q2 2013 REVENUE $1.54 billion $1.41 billion Q2 2012 Q2 2013 GROSS MARGIN(1) 28.9% 27.3% Q2 2012 Q2 2013 NPOI(1) $182 million $154 million All-time high (2) NPOI margin (3) OF 11.9% Full-year 2013 guidance(4) reaffirmed (1) See reconciliation of
Slide 5: Segment Highlights: Financial Services, Retail, Hospitality
NCR Confidential Industry Highlights Key Developments Financial Revenue of $782M, a decrease of 1% y/y Operating margin of 12.1%, up 120 bps y/y Margin aided by lower costs & expenses Software growth of 3% y/y Continued U.S. market share gains 37 new customers in Q2; 537 since 1Q 2011 So
Slide 6: Update: Retalix Acquisition
NCR Confidential 6 UPDATE: RETALIX ACQUISITION KEY ACQUISITION OBJECTIVES PROGRESS UPDATE Demonstrates commitment to be a leader in omni-channel retail solutions enabling effortless transactions across multiple touch points and channels Improves revenue mix with a higher percentage of software a
Slide 7: Q2 2013 Summary
NCR Confidential 7 Q2 2013 SUMMARY 9% Revenue growth led by Retail, Hospitality & Services Revenue diversity by industry, geography and channel offsetting Financial Services weakness, primarily in North America Software/SaaS growth contributes meaningfully to gross margin expansion Strong re
Slide 8: Pension
NCR Confidential PENSION BOB FISHMAN, CFO July 30, 2013
Slide 9: Phase III Pension Strategy Goals
NCR Confidential GAAP pension expense reduced to a run-rate basis of ~$20M in 2013 Underfunded status reduced to ~$100M by end of 2014 Pension liability decreased by at least $1B by end of 2014(2) Free cash flow improvements of ~$50-70M (net of interest) by 2015, due to reduction of pension
Slide 10: Phase III Pension Update
NCR Confidential 10 SERP Termination executed in late February. First round payments in June. Final round of payments scheduled for Q2 2014. ~$95 million unfunded liability removed from pension liability. ERO Program successful. US Plan Lump Sum Offers Lump sum to certain remaining term-vest
Slide 11: Supplementary Non-GAAP Materials
NCR Confidential SUPPLEMENTARY NON-GAAP MATERIALS
Slide 12: Non-GAAP Measures
NCR Confidential NON-GAAP MEASURES 12 While NCR reports its results in accordance with generally accepted accounting principles (GAAP) in the United States, comments made during this conference call and the related presentation materials will include non-GAAP measures in an effort to provide additio
Slide 13: Non-GAAP Measures: NPOI and Operational Gross Margin
NCR Confidential NON-GAAP MEASURES 13 NPOI and Operational Gross Margin. The non-GAAP income from operations (i.e., non-pension operating income, or NPOI) and operational gross margin included in these materials exclude the impact of pension expense and certain special items. Due to the significant
Slide 14: Non-GAAP Reconciliations
NCR Confidential NON-GAAP RECONCILIATIONS 14 Q2 2013 Q2 2012 Q2 2013 Q2 2012 Gross Margin as a % of Revenue (GAAP) 27.8% 26.5% Income from Operations (GAAP) $139 $130 Pension Expense 0.3% 0.4% Pension Expense 9 10 Acquisition-Related Amortization of Intangibles 0.6% 0.4% Acquisition-Related Amortiza
Slide 15: Non-GAAP Reconciliations: Constant Currency Revenue Growth
NCR Confidential 15 NON-GAAP RECONCILIATIONS Revenue Growth % (GAAP) to Constant Currency Revenue Growth % (non-GAAP) Q2 2013 Revenue growth % (GAAP) 9% Unfavorable foreign currency fluctuation impact 1% Constant currency revenue growth % (non-GAAP) 10%