Fidelity National Information Services, Inc. · NYSE:FIS
Fidelity National Information Services — Q3 2019 Earnings Presentation
25 slides from Fidelity National Information Services's earnings presentation, Nov 5, 2019
Slide 1: Third Quarter 2019 Earnings Call
THIRD QUARTER 2019 EARNINGS CALL November 5, 2019
Slide 2: Agenda
AGENDA Gary Norcross, Business Summary Chairman, President and CEO Woody Woodall, Financial Summary Chief Financial Officer
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 Summary
BUSINESS SUMMARY GARY NORCROSS Chairman, President and CEO
Slide 5: 3Q 2019 Highlights
3Q 2019 HIGHLIGHTS Revenue (millions) EXCEEDED EXPECTATIONS for revenue, EBITDA and EPS in the third quarter 3Q19 $2,822 RAISING GUIDANCE for the fourth quarter and full-year 2019 3Q18 35% Growth SYNERGIES ACCELERATING as integration (5.4% Organic) moves from planning to execution Adjusted EBITDA (m
Slide 6: Growth Strategy
GROWTH STRATEGY Roadmap to Acceleration Secular Growth Opportunities Future ✓ Merchant Solutions benefiting from Today ~7 – 9% secular growth in Global eCommerce and Integrated Payments ~6% ✓ Banking Solutions developing innovative technology to create seamless digital and omni-channel experiences •
Slide 7: Financial Summary
FINANCIAL SUMMARY WOODY WOODALL Chief Financial Officer
Slide 8: FIS 3Q 2019 Consolidated Results
FIS 3Q 2019 CONSOLIDATED RESULTS Reported Organic Consolidated Results 3Q 2019 3Q 2018 Growth Growth1 Revenue $ 2,822 $ 2,084 35% 5% Merchant Solutions 720 50 * 8% Banking Solutions 1,491 1,433 4% 5% Capital Market Solutions 611 589 4% 5% Corporate and Other - 12 * * Adjusted EBITDA $ 1,192 $ 808 48
Slide 9: Integration Update
INTEGRATION UPDATE ($ millions, annual run-rate achievement) REVENUE SYNERGIES COST SYNERGIES $500M Goal $500M >$500M Goal >$500M $500M by YE 2022 $500M by YE 2022 $400M $400M Increasing Target to >$350M >$350M3 by YE 2020 $300M $300M >$200M2 Achieved $200M $200M >$200M in 3Q 2019 $150M1 Target $150
Slide 10: 3Q 2019 Segment Summary
3Q 2019 SEGMENT SUMMARY Merchant Solutions Revenue (millions) • 8% organic revenue growth, including 2 months 3Q19 $720 of Worldpay during the quarter • Growth expected to accelerate to 10% organically in 4Q19 with revenue synergies 3Q18 Significant Growth • 3Q19 EBITDA margin of 51.5% (8% Organic)
Slide 11: Capital Allocation Strategy
CAPITAL ALLOCATION STRATEGY GENERATE HIGH RATE REDUCE MAXIMIZE OF FREE CASH FLOW LEVERAGE SHAREHOLDER CONVERSION RETURNS • Free cash flow of $640 million • Reduced debt by $700 million • Significant capital return with in 3Q 2019, nearly double the since the close of the dividends nearly doubling to
Slide 12: 2019 Guidance Update
2019 GUIDANCE UPDATE $ millions except per share data 4Q 2019 Guidance(1) FY 2019 Guidance(1) Revenue $ 3,295 – $ 3,335 $ 10,286 – $ 10,326 Adjusted EBITDA $ 1,480 – $ 1,510 $ 4,194 – $ 4,224 Adjusted EPS $ 1.50 – $ 1.55 $ 5.47 – $ 5.56 4Q 2019 Guidance Assumptions FY 2019 Guidance Assumptions • Neg
Slide 13: Compelling Investment Thesis
COMPELLING INVESTMENT THESIS ACCELERATING POWERING POWERFUL COMPELLING GROWTH THE DIGITAL CLIENT VALUE FINANCIAL STRATEGY ECONOMY PROPOSITION PROFILE • Worldpay acquisition • Secular growth across • Providing access to • Highly recurring will increase FIS segments innovation to create and visible or
Slide 14: Advancing the Way the World Pays, Banks and Invests
eee (— | So ADVANCING THE WAY THE WORLD PAYS, BANKS AND INVESTS.
Slide 15: Appendix
APPENDIX KIS
Slide 16: 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 of the Co
Slide 17: Forward-Looking Statements
FORWARD-LOOKING STATEMENTS • changes in the growth rates of the markets for our solutions; • failures to adapt our solutions to changes in technology or in the marketplace; • internal or external security breaches of our systems, including those relating to unauthorized access, theft, corruption or
Slide 18: Use of Non-GAAP Financial Information
USE OF NON-GAARP 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 summarizing
Slide 19: Use of Non-GAAP Financial Information
USE OF NON-GAARP FINANCIAL INFORMATION Adjusted EBITDA is EBITDA, as defined above, excluding certain costs and other transactions which management deems non-operational in nature, the removal of which improves comparability of operating results across reporting periods. This measure is reported to
Slide 20: Organic Revenue Growth Calculation
ORGANIC REVENUE GROWTH CALCULATION ($ millions, unaudited) Three months ended September 30, 2019 Capital Merchant Banking Market Corporate Solutions Solutions Solutions and Other Consolidated Revenue $ 720 $ 1,491 $ 611 $ - $ 2,822 Currency translation adjustment 9 5 5 - 19 Constant currency (A) $ 7
Slide 21: Organic Revenue Growth Calculation
ORGANIC REVENUE GROWTH CALCULATION ($ millions, unaudited) Nine months ended September 30, 2019 Capital Merchant Banking Market Corporate Solutions Solutions Solutions and Other Consolidated Revenue $ 896 $ 4,317 $ 1,778 $ - $ 6,991 Currency translation adjustment 11 33 19 - 63 Constant currency (A)
Slide 22: Reconciliation of GAAP to Non-GAAP
RECONCILIATION OF GAAP TO NON-GAAP ($ millions, unaudited) Three months ended Nine months ended September 30, September 30, 2019 2018 2019 2018 Net earnings attributable to FIS common stockholders $ 154 $ 154 $ 456 $ 548 Provision (benefit) for income taxes 48 37 119 122 Interest expense, net 95 80
Slide 23: Reconciliation of GAAP to Non-GAAP
RECONCILIATION OF GAAP TO NON-GAAP ($ millions, except per share amounts, unaudited) Three months ended September 30, Nine months ended September 30, 2019 2018 2019 2018 Earnings before income taxes and equity method investment earnings (loss) $ 209 $ 204 $ 596 $ 704 Provision (benefit) for income t
Slide 24: Reconciliation of GAAP to Non-GAAP
RECONCILIATION OF GAAP TO NON-GAAP ($ millions, unaudited) Three months ended Nine months ended September 30, 2019 September 30, 2019 Net cash provided by operating activities $ 921 $ 1,741 Non-GAAP adjustments: Acquisition, integration and other payments 171 260 Tax payments on divestitures - 10 Se
Slide 25: 3Q 2019 Segment Results
3Q 2019 SEGMENT RESULTS ($ millions, unaudited) Three months ended September 30, 2019 Capital Merchant Banking Market Corporate Solutions Solutions Solutions and Other Consolidated Revenue $ 720 $ 1,491 $ 611 - $ 2,822 Reported Growth * 4.0% 3.7% - 35.4% Organic revenue growth 7.8% 4.6% 4.6% - 5.4%
Fidelity National Information Services — Q3 2019 Earnings Presentation on 6ix