Total System Services Inc

Total System Services — Q1 2017 Earnings Presentation

25 slides from Total System Services's earnings presentation, Apr 25, 2017

  1. Slide 1: 2017 First Quarter

    2017 FIRST QUARTER April 25, 2017 ©2017 Total System Services, Inc.® Proprietary. All rights reserved worldwide.

  2. Slide 2: Forward-Looking Statements

    2017 First Quarter FORWARD-LOOKING STATEMENTS This slide presentation and comments made by management contain forward- looking statements including, among others, statements regarding the expected future operating results of TSYS. These statements are based on management’s current expectations and a

  3. Slide 3: Use of Non-GAAP Financial Measures

    2017 First Quarter USE OF NON-GAAP FINANCIAL MEASURES This slide presentation contains certain non-GAAP financial measures determined by methods other than in accordance with generally accepted accounting principles. Such non-GAAP financial measures include the following: net revenue, operating marg

  4. Slide 4: M. Troy Woods, Chairman and Chief Executive Officer

    M. Troy Woods Chairman and Chief Executive Officer ©2017 Total System Services, Inc.® Proprietary. All rights reserved worldwide. 4

  5. Slide 5: Paul Todd, Chief Financial Officer

    Paul Todd Chief Financial Officer ©2017 Total System Services, Inc.® Proprietary. All rights reserved worldwide. 5

  6. Slide 6: Consolidated Selected Financial Highlights

    2017 First Quarter CONSOLIDATED SELECTED FINANCIAL HIGHLIGHTS (in thousands, except per share data) QTD QTD Percent 2017 2016 Change Total Revenues $1,184,725 $739,378 60.2% Net Revenue(1) 832,892 671,644 24.0 Adjusted EBITDA(1) 287,237 230,829 24.4 Adjusted Diluted EPS(1) $0.82 $0.66 25.4 (1) Non-G

  7. Slide 7: Consolidated Highlights

    2017 First Quarter CONSOLIDATED HIGHLIGHTS 1st Quarter Net Revenue by Segment(1)(2) ➜ New segment structure to better align the business ➜ Record level of net revenue Netspend 24% Issuer Solutions 45% ➜ YOY margin expansion Merchant Solutions 31% Consolidated Net Revenue(1) Adjusted Operating Income

  8. Slide 8: Issuer Solutions Segment Highlights

    2017 First Quarter ISSUER SOLUTIONS SEGMENT HIGHLIGHTS Traditional Accounts on File YOY Growth % ➜ Record level of net revenue (in millions) 521.8 532.3 ➜ Record level of traditional AOF 488.8 501.1 511.2 ➜ Operating margin in 1Q16 benefited from non-recurring items 6.8% 7.0% 9.2% 8.7% 8.9%  3.7% (

  9. Slide 9: Merchant Solutions Segment Highlights

    2017 First Quarter MERCHANT SOLUTIONS SEGMENT HIGHLIGHTS Segment Net Revenue per Transaction(1) YOY Growth % ➜ TransFirst integration on-track and synergies on target $0.225 $0.223 $0.227 $0.231 ➜ Predictable revenue stream focused on fast growing SMB and integrated channels $0.111 ➜ Strong and impr

  10. Slide 10: Netspend Segment Highlights

    2017 First Quarter NETSPEND SEGMENT HIGHLIGHTS Gross Dollar Volume ➜ Signed key agreements to continue ($ in billions) YOY Growth % $9.6 $9.2 product diversification ➜ Record level of debit active cards at 5.1 million $6.6 $6.4 $6.6 ➜ Strong YOY margin expansion 19.6% 19.6% 18.1% 15.6% 4.9% 1Q16 2Q1

  11. Slide 11: Segment Operating Margin and Consolidated Adjusted Operating Margin

    2017 First Quarter SEGMENT OPERATING MARGIN AND CONSOLIDATED ADJUSTED OPERATING MARGIN Three Months Ended March 31, 2017 Adjusted Segment Adjusted Operating (1) (1) (1) Operating Income Net Revenue Margin (in thousands) Issuer Solutions $133,873 $387,255 34.57% Merchant Solutions 91,279 260,561 35.0

  12. Slide 12: 2017 Revised Guidance

    2017 First Quarter 2017 REVISED GUIDANCE* (in millions, except per share data) Range Range Percent Change Revenue: Total revenues (GAAP) $4,770 to $4,870 14% to 17% Net revenue (non-GAAP) (1) $3,295 to $3,395 8% to 12% Earnings per share: Diluted EPS (GAAP) $2.25 to $2.32 30% to 34% Adjusted diluted

  13. Slide 13: Q&A

    Q&A ©2017 Total System Services, Inc.® Proprietary. All rights reserved worldwide. 13

  14. Slide 14: Thank You

    THANK YOU ©2017 Total System Services, Inc.® Proprietary. All rights reserved worldwide.

  15. Slide 15: Appendix

    APPENDIX ©2017 Total System Services, Inc.® Proprietary. All rights reserved worldwide. 15

  16. Slide 16: Accounts on File Portfolio Summary

    2017 First Quarter APPENDIX: Accounts on File Portfolio Summary (in millions) March March % March December % 2017 2016 Change 2017 2016 Change Consumer 450.0 414.8 8.5 450.0 442.9 1.6 Commercial 50.0 46.3 8.0 50.0 47.9 4.3 Other 32.3 27.7 16.5 32.3 31.0 4.2 Traditional AOF 532.3 488.8 8.9 532.3 521.

  17. Slide 17: Non-GAAP Items – Net Revenue, Adjusted EBITDA and Adjusted Diluted EPS

    2017 First Quarter APPENDIX: Non-GAAP Items – Net Revenue, Adjusted EBITDA and Adjusted Diluted EPS ➔ Net revenue is defined as total revenues less reimbursable items (such as postage), as well as, merchant acquiring interchange and assessment fees charged by the card associations or payment network

  18. Slide 18: Non-GAAP Reconciliation – Net Revenue

    2017 First Quarter APPENDIX: Non-GAAP Reconciliation – Net Revenue (in thousands) Three Months Ended 3/31/17 3/31/16 Total revenues $1,184,725 $739,378 Less: reimbursable items, interchange and assessments expenses* 351,833 67,734 Net revenue $832,892 $671,644 * Relates to acquisition of TransFirst,

  19. Slide 19: Non-GAAP Reconciliation – Adjusted Segment Operating Income and Operating Margin

    2017 First Quarter APPENDIX: Non-GAAP Reconciliation – Adjusted Segment Operating Income and Operating Margin Three Months Ended (in thousands) 3/31/17 3/31/16 Adjusted segment operating income By segment: Issuer Solutions (a) $133,873 $135,077 Merchant Solutions (b) 91,279 38,357 Netspend (c) 48,64

  20. Slide 20: Non-GAAP Reconciliation – Constant Currency Net Revenue

    2017 First Quarter APPENDIX: Non-GAAP Reconciliation – Constant Currency Net Revenue (in thousands) Three Months Ended Percentage 3/31/17 3/31/16 Change Consolidated: Constant currency(1) $843,231 $671,644 25.5% Foreign currency impact(2) (10,339) -- Net revenue $832,892 $671,644 24.0% Issuer soluti

  21. Slide 21: Non-GAAP Reconciliation – Constant Currency Total Revenues

    2017 First Quarter APPENDIX: Non-GAAP Reconciliation – Constant Currency Total Revenues (in thousands) Three Months Ended Percentage 3/31/17 3/31/16 Change Consolidated: Constant currency(1) $1,195,848 $739,378 61.7% Foreign currency impact(2) (11,123) -- Total revenues $1,184,725 $739,378 60.2% Iss

  22. Slide 22: Non-GAAP Reconciliation – EBITDA and Adjusted EBITDA

    2017 First Quarter APPENDIX: Non-GAAP Reconciliation – EBITDA and Adjusted EBITDA Three Months Ended (in thousands) 3/31/17 3/31/16 Net income : As reported (GAAP) $107,107 $92,408 Adjust for: Less: Equity in income of equity investments (12,909) (6,248) Add: Income taxes 43,082 43,429 Add: Nonopera

  23. Slide 23: Non-GAAP Reconciliation – Adjusted Diluted EPS

    2017 First Quarter APPENDIX: Non-GAAP Reconciliation – Adjusted Diluted EPS Three Months Ended (in thousands, except per share data) 3/31/17 3/31/16 Income from continuing operations attributable to TSYS common shareholders: As reported (GAAP) (a) $105,868 $90,628 Adjust for amounts attributable to

  24. Slide 24: 2017 Revised Guidance

    2017 First Quarter 2017 REVISED GUIDANCE* (in millions, except per share data) Range Range Percent Change Total revenues (GAAP) $4,770 to $4,870 14% to 17% Less: reimbursable items, interchange and assessments expenses 1,475 to 1,475 Net revenue (non-GAAP) $3,295 to $3,395 8% to 12% Diluted EPS (GAA

  25. Slide 25: 2017 Revised Guidance Assumptions

    2017 First Quarter APPENDIX: 2017 Revised Guidance Assumptions The guidance assumes: • There will be no significant movements in the London Interbank Offered Rate, and TSYS will not make any significant draws on the remaining balance of its credit facility; • There will be no additional significant

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