Total System Services Inc

Total System Services — Investor Day (May 2015)

49 slides from Total System Services's investor day presentation, May 20, 2015

  1. Slide 1: TSYS Analyst Day

    TSYS Analyst Day May 20, 2015 © 2015 Total System Services, Inc.® All rights reserved worldwide.

  2. Slide 2: Forward-Looking Statements

    > FORWARD-LOOKING STATEMENTS This 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 assumptions and are subje

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

    > 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: revenues before reimbursable items; operatin

  4. Slide 4: TSYS Corporate Overview

    TSYS Corporate Overview M. Troy Woods Chairman, President & Chief Executive Officer © 2015 Total System Services, Inc.® All rights reserved worldwide. 4

  5. Slide 5: Agenda

    > AGENDA ! TSYS at a Glance ! Scale…. Reach…. Strength…. ! Our Transformation Journey ! Strategic Priorities ! Dynamic Industry Themes ! Commitment to Win © 2015 Total System Services, Inc.® All rights reserved worldwide. 5

  6. Slide 6: TSYS at a Glance

    > TSYS AT A GLANCE $2.2 Billion $324 Million $712.3 Million Revenues Before Free Cash Flow Adjusted EBITDA Reimbursable Items Financial Governments Corporations Small Retailers Consumers Institutions Businesses $7.5 Billion ~10,000 17.8 Billion Market Cap* Team Members Transactions Processed** (*) a

  7. Slide 7: Scale, Reach, Strength

    SCALE!! REACH!! STRENGTH!! #1 North America 80 Countries Investment Grade Third-party Processor Credit Rating 27 Locations #1 China S&P 500 Third-party Processor 2.3 Million Point-of-Sale FORTUNE 1000 #2 Europe Locations Third-party Processor 375,000 Direct Merchant Locations #2 USA Prepaid Card Pro

  8. Slide 8: Our Transformation Journey

    > OUR TRANSFORMATION JOURNEY!! REVENUE MIX 2008 2008 2014 2014 !"# North America $&# International !"# !&# $%# %$# Merchant $"# NetSpend ® © 2015 Total System Services, Inc.® All rights reserved worldwide. 8

  9. Slide 9: Strategic Priorities

    > STRATEGIC PRIORITIES #1 Global Top-10 Global #1 Provider Provider of Credit Merchant Solutions of Self Banking Card Issuer Solutions Provider Services P E O P L E - C E N T E R E D PAY M E N T S Improving lives and businesses by putting people at the center of payments © 2015 Total System Services

  10. Slide 10: Dynamic Industry Themes

    > DYNAMIC INDUSTRY THEMES ! Digitization of Financial Services ! Growing Omni-channel ! Payments Landscape ! Increased Regulation © 2015 Total System Services, Inc.® All rights reserved worldwide. 10

  11. Slide 11: Commitment to Win

    > COMMITMENT TO WIN ! Customers: Customer Experience Initiative ! Team Members: People Investment ! Shareholders: Capital Allocation © 2015 Total System Services, Inc.® All rights reserved worldwide. 11

  12. Slide 12: North America Services

    North America Services William A. Pruett Senior Executive Vice President & President, North America Services © 2015 Total System Services, Inc.® All rights reserved worldwide. 12

  13. Slide 13: North America Solutions for Financial Institutions

    > NORTH AMERICA SOLUTIONS FOR FINANCIAL INSTITUTIONS #1 Provider of Processing & Related Solutions to North American Consumer & Commercial Credit Card Issuers SERVICES >! Credit, debit and >! Data analytics >! Call center services >! Card and print services healthcare payment and business >! Value-a

  14. Slide 14: 1Q 2015 North America Segment Highlights

    > 1Q 2015 NORTH AMERICA SEGMENT HIGHLIGHTS Accounts on File* 653.2 ➔ Bank of America® conversion completed YOY Growth % ➔ All-time quarterly highs (in millions) 550.0 － Revenue and operating income 541.4 510.3 － Accounts on file up 31.8% to 653.2M 495.5 － Transactions increased 42.2% to 3.3B 17.2% 1

  15. Slide 15: North America Strategy

    > NORTH AMERICA STRATEGY EXECUTE ON THE FUNDAMENTALS Grow & Perfect Our Market-leading Position >! Exceptional conversion history >! Stable economic and regulatory environment >! Customer service standard >! Innovation and delivery of new solutions GROWTH OPPORTUNITIES Innovate, Diversify & Deliver

  16. Slide 16: International Services

    International Services Gaylon Jowers Jr. Senior Executive Vice President & President, International Services © 2015 Total System Services, Inc.® All rights reserved worldwide. 16

  17. Slide 17: International Solutions for Financial Institutions

    > INTERNATIONAL SOLUTIONS FOR FINANCIAL INSTITUTIONS Completing Multi-year Margin Improvement Plan SERVICES >! Credit and debit >! Software licensing >! Call center services >! Value-added offerings payment processing KEY METRICS 130+ Unique 70.5 Million 572.0 Million Customers Accounts on File Tran

  18. Slide 18: 1Q 2015 International Segment Highlights

    > 1Q 2015 INTERNATIONAL SEGMENT HIGHLIGHTS Accounts on File ➔ Virgin Money migration completed (in millions) YOY Growth % 70.5 ➔ Revenue up across all lines of business 66.6 64.1 ➔ Accounts on file increased 16.1% to 70.5M 60.7 62.3 ➔ Transactions increased 10.5% to 572.0M ➔ Margin improvement plan

  19. Slide 19: International Strategy

    > INTERNATIONAL STRATEGY EXECUTE ON THE FUNDAMENTALS Grow & Perfect Our Market-leading Position >! “Accelerate Growth” in targeted markets >! Extend product penetration with existing clients and prospects >! Ongoing secure, consistent, and high-touch differentiated service delivery GROWTH OPPORTUNIT

  20. Slide 20: TSYS Global Product Group Areas of Strategic Focus

    > TSYS GLOBAL PRODUCT GROUP AREAS OF STRATEGIC FOCUS Chip/EMV® Enterprise Tokenization Digital Engagement Data Analytics DATA ANALYTICS EMV is a registered trademark or trademark of EMVCo LLC in the United States and other countries. © 2015 Total System Services, Inc.® All rights reserved worldwide.

  21. Slide 21: Merchant Services

    Merchant Services Mark D. Pyke Senior Executive Vice President & President, Merchant Services Tom Boyer President, TSYS Merchant Solutions © 2015 Total System Services, Inc.® All rights reserved worldwide. 21

  22. Slide 22: Merchant Solutions for Businesses

    > MERCHANT SOLUTIONS FOR BUSINESSES Direct Acquiring & Related Offerings for Merchants Indirect Third-party Processing for Acquirers DIRECT KEY METRICS INDIRECT KEY METRICS #12 in U.S. 2% Share 61% DIRECT ~200 ~40% Share Based on Based on Processing Based on 39% INDIRECT Clients Revenue Revenue Reve

  23. Slide 23: 1Q 2015 Merchant Segment Highlights

    > 1Q 2015 MERCHANT SEGMENT HIGHLIGHTS Segment Revenue by LOB ➔ Revenue up 5.5% and operating margin up ($ in millions) YOY Growth % 207 bps YOY ➔ Direct revenue mix at 61%; 39% Indirect $59 $62 $65 $64 $67 ➔ SBS sales volume at $5.8B, up 9.9% YOY 4% 1% 4% 3% 13% ➔ POS transactions increased 5.6%, ex

  24. Slide 24: Merchant Segment Strategy

    > MERCHANT SEGMENT STRATEGY EXECUTE ON THE FUNDAMENTALS Expand Distribution & Product Capabilities >! Improve sales productivity and capacity >! Develop new distribution channels (e.g. ISV) >! Offer new and innovative products and solutions GROWTH OPPORTUNITIES Play More in Higher Growth Areas of th

  25. Slide 25: NetSpend

    ® NetSpend Charles J. Harris Senior Executive Vice President, TSYS, & President, NetSpend © 2015 Total System Services, Inc.® All rights reserved worldwide. 25

  26. Slide 26: NetSpend Solutions

    > NETSPEND SOLUTIONS Alternative-banking Services for the Self-banked Customer SERVICES >! Open-loop GPR and >! Reloadable deposits >! Usable at ATMs and >! Protected by Regulation E Paycard (Visa/ may be made at anywhere Visa/ and FDIC-insured MasterCard branded) non-bank locations MasterCard are a

  27. Slide 27: 1Q 2015 NetSpend Segment Highlights

    > 1Q 2015 NETSPEND SEGMENT HIGHLIGHTS ® Gross Dollar Volume $7.7 ➔ Completed launch of Brink’s Prepaid MasterCard ($ in billions) YOY Growth % ➔ All-time quarterly revenue high $6.6 ➔ Gross Dollar Volume (GDV) of $7.7B, up 16.7% ➔ Total Active Cards of 4.2M, up 14.7% $4.6 $4.7 ➔ Direct Deposit Activ

  28. Slide 28: NetSpend Strategy

    > NETSPEND STRATEGY EXECUTE ON THE FUNDAMENTALS Optimize Distribution Channels & Drive Retention >! Product innovation to maintain leadership >! Acquire customers directly and through partners >! Loyalty and lifecycle marketing to drive retention >! Cross-selling opportunity with North America & Mer

  29. Slide 29: 2015 Financial Summary

    2015 Financial Summary Paul M. Todd Senior Executive Vice President & Chief Financial Officer © 2015 Total System Services, Inc.® All rights reserved worldwide. 29

  30. Slide 30: 1Q 2015 Consolidated Highlights

    > 1Q 2015 CONSOLIDATED HIGHLIGHTS ➔ Double digit organic revenue growth Revenue by Segment* ➔ Strong cross segment delivery of performance ➔ Volume gains: North America − AOF increased 30.1% 26% International − All-time AOF high of 724M 43% Merchant − Transactions increased 36.5% 19% NetSpend − GDV

  31. Slide 31: Consolidated Selected Financial Highlights

    > CONSOLIDATED SELECTED FINANCIAL HIGHLIGHTS (in thousands, except per share data) YTD YTD Percent 2015 2014 Change Total Revenues $662,156 $592,848 11.7% Revenues Before Reimbursable Items 595,784 532,750 11.8 Adjusted EBITDA* 193,454 149,596 29.3 Adjusted EBITDA Margin* 32.47% 28.08% 439 bps Adjus

  32. Slide 32: M&A Priorities

    > M&A PRIORITIES Our M&A Priorities are Focused on Two Major Areas MERCHANT SOLUTIONS >!Large-scale, high-growth direct acquirers >!Integrated payments acquiring >!eCommerce, mCommerce & OmniCommerce >!Smaller tuck-ins PRODUCT/DISTRIBUTION/SCALE IN OTHER BUSINESS AREAS >!NetSpend - new products, cus

  33. Slide 33: Key Take-Aways

    > KEY TAKE-AWAYS ! Financial Results ! Financial Strengths ! Growth Opportunities ! Unique Payments Platform ! People-Centered Payments © 2015 Total System Services, Inc.® All rights reserved worldwide. 33

  34. Slide 34: Q&A

    Q&A © 2015 Total System Services, Inc.® All rights reserved worldwide. 34

  35. Slide 35: Appendix

    Appendix © 2015 Total System Services, Inc.® All rights reserved worldwide. 35

  36. Slide 36: Non-GAAP Items – Adjusted EBITDA and Adjusted EPS

    > APPENDIX: Non-GAAP Items – Adjusted EBITDA and Adjusted EPS ➔ Adjusted EBITDA is net income excluding equity in income of equity investments, nonoperating income/(expense), taxes, depreciation, amortization and stock-based compensation expenses and NetSpend merger & acquisition expenses. ➔ Adjuste

  37. Slide 37: Accounts on File Portfolio Summary

    > APPENDIX: Accounts on File Portfolio Summary (in millions) Mar Mar % Mar Dec % 2015 2014 Change 2015 2014 Change Consumer Credit 364.5 234.8 55.3 364.5 270.0 35.0 Retail 28.3 27.5 2.6 28.3 28.4 (0.5) Total Consumer 392.8 262.3 49.8 392.8 298.4 31.6 Commercial 42.3 40.4 4.8 42.3 41.6 1.8 Other 22.7

  38. Slide 38: Non-GAAP Reconciliation – Revenues Before Reimbursable Items

    > APPENDIX: Non-GAAP Reconciliation – Revenues Before Reimbursable Items (in thousands) Three Months Ended 3/31/15 3/31/14 Total Revenues $662,156 $592,848 Reimbursable Items 66,372 60,098 Revenues Before Reimbursable Items $595,784 $532,750 © 2015 Total System Services, Inc.® All rights reserved wo

  39. Slide 39: Non-GAAP Reconciliation – Revenues Before Reimbursable Items

    > APPENDIX: Non-GAAP Reconciliation – Revenues Before Reimbursable Items (in thousands) Twelve Months Ended 12/31/14 12/31/13 Total Revenues $2,446,877 $2,064,305 Reimbursable Items 253,899 240,597 Revenues Before Reimbursable Items $2,192,978 $1,823,708 © 2015 Total System Services, Inc.® All right

  40. Slide 40: Non-GAAP Reconciliation – Adjusted Segment Operating Income and Margin

    > APPENDIX: Non-GAAP Reconciliation – Adjusted Segment Operating Income and Operating Margin Three Months Ended (in thousands) 3/31/15 3/31/14 Operating Income $122,496 $80,697 Add: Acquisition Intangible Amort 23,867 24,313 Add: Corporate Admin and Other 32,772 33,008 Total Segment Adjusted Operati

  41. Slide 41: Non-GAAP Reconciliation – Constant Currency

    > APPENDIX: Non-GAAP Reconciliation – Constant Currency (in thousands) Three Percentage Months Ended Change Consolidated: 3/31/15 3/31/14 Constant Currency (1) $669,863 $592,848 13.0% Foreign Currency (2) (7,707) --- Total Revenues $662,156 $592,848 11.7% International Services: Constant Currency (1

  42. Slide 42: Non-GAAP Reconciliation – Constant Currency

    > APPENDIX: Non-GAAP Reconciliation – Constant Currency (in thousands) Three Percentage Months Ended Change Consolidated: 3/31/15 3/31/14 Constant Currency (1) $602,902 $532,750 13.2% Foreign Currency (2) (7,118) --- Revenues Before Reimbursable Items $595,784 $532,750 11.8% International Services:

  43. Slide 43: Non-GAAP Reconciliation – EBITDA and Adjusted EBITDA

    > APPENDIX: Non-GAAP Reconciliation – EBITDA and Adjusted EBITDA (in thousands) Three Months Ended Mar Mar 2015 2014 Net Income : As Reported (GAAP) (a) $78,899 $51,625 Adjusted for: Add/(Deduct): Loss/(Income) from Discontinued Operations -- (980) Deduct: Equity in Income of Equity Investments (5,3

  44. Slide 44: Non-GAAP Reconciliation – Adjusted EPS

    > APPENDIX: Non-GAAP Reconciliation – Adjusted EPS (in thousands) Three Months Ended Mar Mar 2015 2014 Income from Continuing Operations Available to TSYS common shareholders: As Reported (GAAP) (a) $77,755 $49,321 Adjusted for Amounts Attributable to TSYS Common Shareholders (net of taxes): Acquisi

  45. Slide 45: Non-GAAP Reconciliation – Free Cash Flow

    > APPENDIX: Non-GAAP Reconciliation – Free Cash Flow (in thousands) Trailing Twelve Months Ended 3/31/2015 Cash Flows from Operating Activities $569,987 Less: Purchases of Property and Equipment (72,320) Additions to Licensed Computer Software from Vendors (35,256) Additions to Internally Developed

  46. Slide 46: Non-GAAP Reconciliation – Free Cash Flow

    > APPENDIX: Non-GAAP Reconciliation – Free Cash Flow (in thousands) Twelve Months Ended 12/31/2014 Cash Flows from Operating Activities $560,201 Less: Purchase of Property and Equipment (75,913) Additions to Licensed Computer Software from Vendors (29,638) Additions to Internally Developed Computer

  47. Slide 47: Non-GAAP Reconciliation – EBITDA and Adjusted EBITDA

    > APPENDIX: Non-GAAP Reconciliation – EBITDA and Adjusted EBITDA Trailing Twelve (in thousands) Months Ended 3/31/2015 Net Income $356,679 Adjusted for: Deduct: Discontinued Operations (47,674) Deduct: Equity in Income of Equity Investments (18,881) Add: Income Taxes 145,207 Add: Non-operating Expen

  48. Slide 48: Non-GAAP Reconciliation – EBITDA and Adjusted EBITDA

    > APPENDIX: Non-GAAP Reconciliation – EBITDA and Adjusted EBITDA (in thousands) Twelve Months Ended 12/31/2014 Net Income $329,406 Adjusted for: Deduct: Discontinued Operations (48,655) Deduct: Equity in Income of Equity Investments (17,583) Add: Income Taxes 129,761 Add: Non-operating Expense 38,71

  49. Slide 49: 2015 Revised Guidance Assumptions

    > APPENDIX: 2015 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 significant movement in foreign currenc

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