Slide 1: Fourth Quarter 2023 Earnings Conference Call
Fourth Quarter 2023 Earnings Conference Call February 28, 2024
Slide 2: Forward-looking Statements; Use of Non-GAAP Measures
Forward-looking Statements Certain statements in this presentation constitute “forward-looking statements” within the meaning of, and subject to the protection of, the Private Securities Litigation Reform Act of 1995. Such forward-looking statements involve known and unknown risks, uncertainties, an
Slide 3: Business Summary
Business Summary Mac Schuessler, President and CEO
Slide 4: 2023 Financial Highlights
2023 Financial Highlights Total Revenue $694.7 million, 12% increase Adjusted EBITDA $292.0 million, 6% increase Strong Results Adjusted EBITDA margin of 42.0% Adjusted EPS $2.82, 11% increase Delivered operating cash flow of approximately $224.3 million Cash Flow and Returned $49 millio
Slide 5: Puerto Rico Update: Key Economic Indicators trending positively
Puerto Rico Update: Key Economic Indicators trending positively Economic Activity Index (EAI) Employment Thousand Individuals +157.7 +6% 1,138.5 (Nov 2023) 130 1,150 121.7 129.5 (Nov 2023) 1,100 120 1,050 110 1,000 950 100 900 0 0 01/2015 01/16 01/17 01/18 01/19 01/20 01/21 01/22 01/23 01/2024 01/20
Slide 6: Puerto Rico Update: Relief and Reconstruction funds supporting economic growth
Puerto Rico Update: Relief and Reconstruction funds supporting economic growth Covid-19 Relief Funds as a % of Gross Domestic Product (%) 49 46 PR vs States 19 14 14 14 13 13 13 13 Puerto Rico* Minnesota Alaska Vermont Rhode Island Mississippi Oklahoma Louisiana District of Hawaii Columbia FEMA Fund
Slide 7: Puerto Rico Update: Federal Funds expected to continue to positively impact the economy
Puerto Rico Update: Federal Funds are expected to continue to positively impact the economy Forecast Package Detail 2021(B$) 2022(B$) 2023(B$) 2024(B$) 2025(B$) Main Economic Sectors Impacted Disaster Total: $73.78B* Main sectors: Recovery Time: 2018 - 2035 1.50 2.19 3.37 3.79 3.48 Construction Covi
Slide 8: Puerto Rico Update: Manufacturing operations and capacity expansions
Puerto Rico Update: Manufacturing operations and capacity expansions contributing to long-term growth Sartorious: German biotech company inaugurates manufacturing plant in Yauco, Puerto Rico (July 2023) • $33M investment • Production/”harvest” of cell culture media for drugs • Additionally, current
Slide 9: Brazil Update: Macroeconomic environment supportive of growth
Brazil Update: Brazil macroeconomic environment supportive of growth 2022 2023 Drivers Political stability, rising purchasing power, and commodities performance, Real GDP growth 2.9% 2.9% particularly in agriculture Inflation 5.8% 4.5% Normalization of production and supply chains and deflation of f
Slide 10: Brazil Update: Well positioned to extract value from the Pix ecosystem
Brazil Update: Evertec is well positioned to extract value from the soaring Pix ecosystem Since launch, Pix has been gaining share and To have a strong pix offer companies must With the upgraded license, Evertec will is expected to maintain its momentum rely on partners have a comprehensive pix offe
Slide 11: Brazil Update: Areas of Focus 2024
Brazil Update: Areas of Focus 2024 Revenue synergies Technology M&A Modernization Customer Margin Focus Optimization 11
Slide 12: Other Updates
Other Updates GetNet Acquiring contract extension into 2027 Expanded GetNet relationship to include Chile ATMs Key Wins Compensar in Bogotá renewed New relationship with Sears for issuing services in Mexico Capital $70M Accelerated Share Repurchase to be entered into in the Allocation next
Slide 13: Financial Summary
Financial Summary Joaquin Castrillo, Chief Financial Officer
Slide 14: Consolidated Results Q4 and Full-Year 2023
Consolidated Results Q4 and Full- Year 2023 (in USD mm, except per share) Q4 2023 Y-o-Y % 2023 Y-o-Y % Revenue $194.6 20% $694.7 12% Adjusted EBITDA(1) $71.7 4% $292.0 6% Adj. EBITDA margin 36.8% -590bps 42.0% -262bps Adjusted Net Income(1) $40.8 -6% $185.5 6% Adjusted EPS(1) $0.62 -6% $2.82 11% T
Slide 15: Merchant Acquiring 2023
Merchant Acquiring 2023 (in USD mm, except per share) Q4 2023 Y-o-Y % 2023 Y-o-Y % Revenue $40.2 1% $162.4 7% Adjusted EBITDA(1) $14.4 -5% $61.0 -4% Adj. EBITDA margin 35.9% -190bps 37.6% -450bps Slight increase in revenue driven by higher sales volume offset by lower spread as we anniversary pric
Slide 16: Payment Services, PR and Caribbean 2023
Payment Services, PR and Caribbean 2023 (in USD mm, except per share) Q4 2023 Y-o-Y % 2023 Y-o-Y % Revenue $52.4 10% $203.2 14% Adjusted EBITDA(1) $30.9 10% $118.3 17% Adj. EBITDA margin 58.9% 40bps 58.2% 170bps Revenue growth was driven by an increase in transaction volumes, ATH Movil Business gr
Slide 17: Latin America Payments and Solutions 2023
Latin America Payments and Solutions 2023 (in USD mm, except per share) Q4 2023 Y-o-Y % 2023 Y-o-Y % Revenue $66.0 89% $186.5 45% Adjusted EBITDA(1) $18.3 55% $60.2 41% Adj. EBITDA margin 27.7% -620bps 32.3% -90bps Increase in revenue mainly driven by Sinqia acquisition for the quarter as well as
Slide 18: Business Solutions 2023
Business Solutions 2023 (in USD mm, except per share) Q4 2023 Y-o-Y % 2023 Y-o-Y % Revenue $57.8 -2% $227.0 -4% Adjusted EBITDA(1) $20.0 -19% $86.9 -14% Adj. EBITDA margin 34.6% -770bps 38.3% -440bps Revenue decrease primarily a result of a decrease in core banking services as the prior year inclu
Slide 19: Corporate and Other 2023
Corporate and Other 2023 (in USD mm, except per share) Q4 2023 Y-o-Y % 2023 Y-o-Y % Adjusted EBITDA(1) -$11.8 12% -$34.3 9% % of Total Revenue 6.1% 50bps 4.9% 20bps Corporate and Other Adjusted EBITDA as a percentage of total revenues of 6.1%. *See Non-GAAP reconciliation summary in appendix, p.27
Slide 20: Roll Forward of 2023 Cash Balance
Roll Forward of 2023 Cash Balance ($ in millions) New Debt, Net (SQIA) $640.5 Operating Activities Ending $(394.7) $(5.5) Balance2 $224.3 Fx Impact Beginning SQIA Equity $343.7 Investments $8.5 Balance1 Acquisition $(188.1) $(85.0) $215.7 $(22.9) $($49.1) CAPEX Debt (Net) & Paysmart Other3 Repurchas
Slide 21: Debt Summary
Debt Summary December 31, (in USD mm, except per share) 2023 2022 Unrestricted Cash $295.6 $197.2 Total Debt $1,002.8 $435.2 Term A Loan (2027 Maturity) S+150bps(4) 453.5 415.0 S+350bps Term B Loan (2030 Maturity) 540.0 - Revolver ($200M) - 20.0 Other 9.4 0.2 EVTC Net Debt $707.2 $238.0 Lev. Ratio N
Slide 22: Outlook 2024
Outlook 2024 (in USD mm, except per share) Low High Total Revenue $844 $854 Growth, % 21.5% 22.9% GAAP EPS – Diluted $1.45 $1.61 Adjusted EPS $2.82 $2.94 Growth, % - 4.3% Capital Expenditures $80 Assumptions: Adjusted EBITDA Margin 38.5% 39.5% Tax Rate 7% 8% Share Count to compute Adjusted EPS 65.5m
Slide 23: Q&A
Q&A
Slide 24: Appendix
Appendix
Slide 25: Non-GAAP Reconciliation Summary
Non-GAAP Reconciliation Summary The non-GAAP measures referenced in this release material are supplemental measures of the Company’s performance and are not required by, or presented in accordance with, accounting principles generally accepted in the United States of America (“GAAP”). They are not m
Slide 26: Reconciliation of GAAP to Non-GAAP Operating Results
Reconciliation of GAAP to Non-GAAP Operating Results Three months ended December 31, Year ended December 31, (Dollar amounts in thousands, except share data) 2023 2022 2023 2022 Net income $11,807 $28,708 $79,876 $238,869 Income tax expense 931 6,072 5,477 28,983 Interest expense, net 11,979 5,688 2
Slide 27: Reconciliation of Q4 2023 Segment Non-GAAP Results
Reconciliation of Q4 2023 Segment Non-GAAP Results Three months ended December 31, 2023 Payment Services - Latin America Puerto Rico & Payments and Merchant Business Corporate and (In thousands) Caribbean Solutions Acquiring, net Solutions Other (1) Total Revenues $ 52,408 $ 65,955 $ 40,214 $ 57,772
Slide 28: Reconciliation of 2023 Segment Non-GAAP Results
Reconciliation of 2023 Segment Non-GAAP Results Year ended December 31, 2023 Payment Services - Latin America Puerto Rico & Payments and Merchant Business Corporate and (In thousands) Caribbean Solutions Acquiring, net Solutions Other (1) Total Revenues $ 203,232 $ 186,503 $ 162,366 $ 226,960 $ (84,
Slide 29: Reconciliation of Q4 2022 Segment Non-GAAP Results
Reconciliation of Q4 2022 Segment Non-GAAP Results Three months ended December 31, 2022 Payment Services - Latin America Puerto Rico & Payments and Merchant Business Corporate and (In thousands) Caribbean Solutions Acquiring, net Solutions Other (1) Total Revenues $ 47,803 $ 34,913 $ 40,006 $ 58,679
Slide 30: Reconciliation of 2022 Segment Non-GAAP Results
Reconciliation of 2022 Segment Non-GAAP Results Year ended December 31, 2022 Payment Services - Latin America Puerto Rico & Payments and Merchant Business Corporate and (In thousands) Caribbean Solutions Acquiring, net Solutions Other (1) Total Revenues $ 178,481 $ 128,221 $ 151,085 $ 235,299 $ (74,
Slide 31: Outlook Summary and Reconciliation to Non-GAAP Adjusted EPS
Outlook Summary and Reconciliation to Non-GAAP Adjusted Earnings per Share 2023 2024 Outlook Actual (Dollar amounts in millions, except share data) Low High Revenues $844 to $854 $695 Earnings per Share (EPS) (GAAP) $1.45 to $1.61 $1.21 Per share adjustment to reconcile GAAP EPS to Non-GAAP Adjusted
Slide 32: Instant Payment (Pix) – How does Pix work?
Instant Payment (Pix) – How does pix work? PIX is an Instant Payment Platform developed and managed by the Brazilian Central Bank, that reduced the costs & settlement time for transfers and transactions PAY M E N T I N I T I AT I O N SETTLEMENT C O N F I R M AT I O N A N D T R A N S F E R 2a • Merch
Slide 33: Thanks