Aci Worldwide, Inc. · NASDAQ:ACIW
Aci Worldwide — Investor Day (November 2019)
82 slides from Aci Worldwide's investor day presentation, Nov 21, 2019
Slide 1: ACI Analyst Day 2019
* R . ie Ret ie. POMS tee 2° Exhibit 99.1 CREATING WHAT - " ACI ANALYST DAY 2019 -
Slide 2: Private Securities Litigation Reform Act of 1995 Safe Harbor
Private Securities Litigation Reform Act of 1995 Safe Harbor for Forward-Looking Statements This presentation contains forward-looking statements based on current expectations that involve a number of risks and uncertainties. The forward-looking statements are made pursuant to safe harbor provisions
Slide 3: Welcome
CREATING WHAT’S- | \4 . an. » ACI ANALYST DAY 2019 © _ Welcome _ John Kraft: VICE PRESIDENT * i eee INVESTOR RELATIONS AND STRATE! WEL 35%
Slide 4: Today's Agenda
CREATING WHAT'S. 7 TODAY'S AGENDA ‘4 AC| ANALYST DAY 2019 * The ACI Transformation Journey | 2 An ACI ‘Overview. ACI Solutions Opportunity _ + Financial Opportunity “+ BREAK _ : = Strategy and Momentum: Banks and Intermediaries * Strategy and Momentum: Billers and Merchants _ ACI Technology: Creatin
Slide 5: The ACI Transformation Journey
CREATING WHAT’S - i \4 ene. ACI ANALYST DAY 2019 =. = . | The ACI Tr formation Journey — : Philip Heasley Se PRESIDENTANDCEO 8 ie Ts
Slide 6: The ACI Transformation Journey 2009 - 2019
The ACI Transformation Journey 2009 - 2019
Slide 7: The ACI Transformation Journey 2009 vs. 2019
The ACI Transformation Journey 2009 vs. 2019 Business Model (Licensed/Platform) 90/10 vs. 45/55 Revenue $406M vs. $1.315B+ Adjusted EBITDA $73M vs. $360M+ Enterprise Value $660M vs. $5.3B Stock Price . $34.1 |
Slide 8: A Sea Change in Payments
A Sea Change in Payments * Unprecedented M&A activity * Changing economics of payments + Reinvention of roles in the payments value chain + New “big tech” players
Slide 9: Our Vision and Mission
Any Payment, Every Possibility.” OUR VISION AClis a highly focused and unified payments software enterprise that enables any-to-any payment transactions to occur regardless of time, location or type, supporting multi-party payments with the notion that the purchaser directs the payments to his/her p
Slide 10: ACI Overview
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Slide 11: ACI by the Numbers
ACI by the Numbers Americas 4,600* EMEA Asia/Pacific 400* 200* Support 18 of top 20 banks worldwide Prevent fraud for 1,5 anks, intermediaries and merchants Support 3,700* billers Serve thousands of merchants directly and through payment service provider: tf >] ®
Slide 12: Payments Value Chain
Payments Value Chain = Merchants g Intermediaries Acai y (Heme) (Heme) Banks l= LY Pps Schemes Bank Process ers Networks POM Prehe
Slide 13: Payments Value Chain: Solution Areas
Payments Value Chain = Merchants 3 Intermediaries a PSPs Schemes oC Hill = Banks D) e& Networks proens = A Billers eet 6 SOLUTION AREAS ACL iter @, Payments Intelligence Seen a
Slide 14: Payments Value Chain: Market Segments
Payments Value Chain = Merchants Intermediaries me oe ill =Banks acauivers Netware POM RiReRS#Ors A Biller ye Bos 4 MARKET SEGMENTS ‘ss FR Q ee © Merchants Billers intermediaries
Slide 15: Payments Value Chain: Business Models
Payments Value Chain = Merchants Intermediaries pr =? seh Mill = Banks acauirers — Networns "E ntechss Os A Biller ye Bos 2 BUSINESS MODELS icensed Software Model On Premise or Public Cloud
Slide 16: Payments Value Chain: Global Team and Intellectual Property
Payments Value Chain = Merchants Intermediaries pr =? seh Mill = Banks acauirers — Networns "E ntechss Os A Biller ye Bos 1 GLOBAL TEAM AND INTELLECTUAL PROPERTY TACI
Slide 17: Balance of Foundational & High Growth Solutions
Balance of Foundational & High Growth Solutions Platform ©) (3) HIGH GROWTH NS IN SOLUTIONS ~ Real-Time bboy airtel eCommerce Payments —__ Payments Payments Intelligence Intelligence aa Retail —— Payments FOUNDATIONAL SOLUTIONS Bill Payments igh Margin and Revenue
Slide 18: Transformation of Customer-Centricity: Continued
TRANSFORMATION OF CUSTOMER-CENTRICITY: CONTINUED SALES & CUSTOMER SPEED & AGILITY BUILDOUT OF SUCCESS. PLATFORM & UP® SOLUTIONS AACE ois: 8
Slide 19: Industry Trends
Industry Trends Card-Centric Branded Payment Acceptance Ownership Standalone Payments Data Exploitation uuu Real-Time Universal Acceptance - Consumption Frictionless Experiences Responsible Data Use
Slide 20: ACI Solutions Opportunity
CREATING WHAT’S - 4 \4 . eB. ACI ANALYST pay 28 f : : ACI Solutio Opportunity i Mike Beate. CHIEF PRODUCT. AND MARKETING | HOREER. INC pisses:
Slide 21: 5.8 TRILLION 2.9 2.9 TRILLION TRILLION5.8 TRILLION 2.9 2.9 TRILLION TRILLION
5.8 TRILLION 2.9 2.9 TRILLION TRILLION5.8 TRILLION 2.9 2.9 TRILLION TRILLION
Slide 22: 2.9 1.8 TRILLION TRILLION 14.6 B B B B B 1150 B 914 B
2.9 1.8 TRILLION TRILLION 14.6 B 20 B 154 B 235 B 713 B 1150 B 914 B 1440 B2.9 1.8 TRILLION TRILLION 14.6 B 20 B 154 B 235 B 713 B 1150 B 914 B 1440 B
Slide 23: ACI Product Strategy
ACI Product Strategy Enable Real-Time, Any-to-Any Payments a @ * Enable Real-Time Any-to-Any . Software/SaaS + All payment types + Any sender owering payments + All rails + Any recipient for Billers, Merchants, Intermediaries, Banks + Card and non-card + Any channel
Slide 24: Product Capabilities & Initiatives
Product Capabilities & Initiatives Spanning Our Solutions §B Merchants & Intermediaries - adit AMOR Omggregesos HE Banks 2 Endpoints: Connectivity to channels, DDAs, payment types and participants * Cloud Optimized: Scalable, low-cost payments infrastructure in a consumption model © Open APIs: Seaml
Slide 25: Product Strategy & Capabilities: Billers
Product Strategy & Capabilities: Billers fR Billers ® Intermediaries Ps Schemes Bank Processors acquirers Networs PM miSehe + Leader in U.S. biller direct market: 4,000 billers, 5S00M annual transactions + Speedpay front end + ACI back end * Digital-first consumer experience - presentment and paymen
Slide 26: Product Strategy & Capabilities: Merchants
Product Strategy & Capabilities: Merchants A Billers + Merchant Payments: 12% revenue CAGR 2016-2019 * Integrated omni-channel platform ® Intermediaries Ps Schemes Bank Processors acquirers Networs PM miSehe By * Digital-first consumer experience ‘ * 350+ global endpoints: acquirers, cards, non-card
Slide 27: Product Strategy & Capabilities: Banks & Intermediaries
Product Strategy & Capabilities: Banks & Intermediaries EB Merchants + Real-Time Payments: 26% revenue CAGR 2016-2019 + Retail Payments: 65% margin + Integrated platform/hub for card and non-card payments + Direct connectivity to DDA accounts globally - “good funds” + Digital overlay services - Mind
Slide 28: Wind in Our Sails
Wind in Our Sails Product strategies align to industry trends Key Takeaways Driving Growth R&D investment heavily weighted to the biggest growth opportunities Gaining Share Well positioned to gain share of the 2.9 trillion
Slide 29: Financial Opportunity
CREATING WHAT’S- | \4 ene. ACI ANALYST DAY 2019 =~ _ Scott Behrens — CHIEF FINANCIAL OFFICER tees DCL Beis
Slide 30: Multiple Drivers to Accelerate Revenue Growth and Margin Expansion
Multiple Drivers to Accelerate Revenue Growth and Margin Expansion FA ACI & ACI ON PREMISE ON DEMAND + Expand base of customers and win new New platform-based logos running Woeredloanell multi-tenant product releases Retail Payments sok * Win new logos + New Real-Time reverts ‘solution + Accelerate
Slide 31: Three-Year Growth Rates
Three-Year Growth Rates* 4% Avg CAGR Real-Time Merchant Payments Payments Payments Intelligence Bi Retail Digital Payments Payments Channels s Represents thre:year CAGR ening September 30,2018, excising CFS and Speedy,
Slide 32: Fast-Growing Solutions Becoming a Bigger Share
Fast-Growing Solutions Becoming a Bigger Share 9, 27% Bill Payments Bill Payments 38% petal 2019 Payments 13% 8% Digital Digital chanmels channels ol 1% Real Tim Real-Time Merchant inteligence inteligence 19% 27%
Slide 33: Net Adjusted EBITDA Margin
Net adjusted EBITDA marginNet adjusted EBITDA margin
Slide 34: Cash Flow Allows for Rapid Deleveraging
Cash Flow Allows for Rapid Deleveraging Bspeedpay 2 3B 3x & $25 x = 2 tae levernge of 25x Bisx 8 1x 0s x ° i 2017 2018 2019 2020€ 2021E 2015 2016
Slide 35: 2019 Guidance
2019 Guidance + Revenue of $1.315 billion to $1345 billion . fowses EBITDA of $860 m million to $380 million h fic $190 * Thien to $200 milion 2020 Guidance \ + Adjusted EBITDA of $425 million to $445 million a
Slide 36: Financial Summary: Five-Year Targets
Financial Summary: Five-Year Targets + Organic revenue growth Mid-to-upper single digits - Adjusted EBITDA margin 100+ bps expansion per year + Operating free cash flow | Track adjusted EBITDA growth a - Target leverage ratio 25x EBITDA
Slide 37: Investment Highlights
Investment Highlights Long-term, blue-chip, geographically diverse customer base with low customer concentration and strong renewal rates Large contractual backlog provides revenue and earnings visibility Transaction-based software contracts drive high-quality, recurring revenue High-margin software
Slide 38: Break
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Slide 39: Strategy and Market Momentum: Banks & Intermediaries
CREATING WHAT’S - i \4 ene. ACI ANALYST DAY 2019 * ¢ or Se ges ‘Stratégy and Market Momentum: Banks & Intern bias. ae Jeremy Wilmot GROUP PRESIDENT, ACI ON PREMISE. j ACL yee OO a
Slide 40: Marketplace Challenges & Opportunities for Banks & Intermediaries
Marketplace Challenges & Opportunities for Banks & Intermediaries Increasing competition and regulation SZ sCValue is derived from the service not the rives need for == rent, placi di Iggl Pace of change in payments >). Legacy tech has run its course; ecosystem necessitates change to modern technolo
Slide 41: UP Solution Areas
UP SOLUTION AREAS • • • • • • • •UP SOLUTION AREAS • • • • • • • •
Slide 42: Modern Technology Drives Secure, Real-Time Payments
Modern Technology Drives Secure, Real-Time Payments The Opportunity Westpac, a global top 50 bank and Australia’s first bank, sought Ws to become a dominant player in Australia’s NPP real-time scheme. estpac The Solution Westpac utilized the full suite of ACI’s solutions, adding to its UP Retail Pay
Slide 43: Payments Hub-Led Modernization
Payments Hub-Led Modernization The Opportunity BMO Financial Group, the eighth largest bank in North America with over 12 million customers, is actively engaged in Canada’s BMO Payments Modernization implementation, seeking to offer new and innovative real-time services to its customers. The Solutio
Slide 44: Customer Speaker: Bank of Montreal Financial Group
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Slide 45: Digitalization to Improve Customer Experience in India
Digitalization to Improve Customer Experience in India The Opportunity India’s payments market is expected to triple in five years, with growth fueled by UPI as well as increased card and non-card volumes. Winning in this market means providing services, not just payments. Mindgate provides digital
Slide 46: Boosting Competitiveness Among Business Customers
Boosting Competitiveness Among Business Customers The Opportunity Associated Bank, a top 50 publicly traded U.S. bank holding company, . wanted to enhance its competitive offerings for small business and Associated Bank corporate customers and outpunch their weight class. The Solution Associated Ban
Slide 47: Customer Speaker: Associated Bank
CREATING WHAT’S- j \4 ; eb. » ACI ANALYST DAY 2019 © Chuck Garcia EVP AND DIRECTOR OF TREASURY. MANAGEME! ASSOCIATED BANK UNIVERSAL PAYMENTS. rie]
Slide 48: Strategy & Momentum: Billers
CREATING WHAT’S - 4 \4 ene.) ACI ANALYST DAY 2019 ~~ Strategy & ‘Momentum: Billers Dan Frate: = GROUP PRESIDENT, ACI ON DEMAND UNIVERSAL PAYMENTS. AC
Slide 49: Marketplace Challenges & Opportunities for Billers
Za all @ we be Marketplace Challenges & Opportunities for Billers Consumers are demanding more convenient, simplified ways to view bills and pay. Digital/gig economy is creating a new billing segment at the intersection of commerce and subscriptions. Increasingly mobile-first consumers are driving t
Slide 50: UP Solution Areas
UP SOLUTION AREAS • • • • • • •UP SOLUTION AREAS • • • • • • •
Slide 51: Simplifying Bill Delivery and Payment
Simplifying Bill Delivery and Payment The Opportunity Southern Company Gas is an American Fortune 500 ys energy services holding company headquartered in 4 Southern Company Gas Atlanta, Georgia. * Sought ways to better digitally engage its energy consumer: Wanted a simple solution not only for thems
Slide 52: Louise Scott
| iF Louise Scott VICE PRESIDENT, C rie] sa
Slide 53: In Action: moBills
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Slide 54: ACI Speedpay In Action: moBills
ACI Speedpay In Action: moBills From the company’s website, consumers with Apple or Android phones simply tap “Add to Wallet / Save to Phone” and enroll. Receive and Pay a Bill with your Smartphone's Mobile Wallet! A chattanooga Gas Ancora Avia Natural Gs ig evotnent:
Slide 55: ACI Speedpay In Action: moBills
ACI Speedpay In Action: moBills Summary bill data is delivered to the mobile easy access to statements, notification settings and payment options. S. a S18 Comurytinn $585 ita @ suarrvcks card Bo Bi ovecteneroy. sth 2% IHG =~ Got Ancora: 5 1S Danuta Jaworska Nicor Gas moBill? © {
Slide 56: ACI Speedpay In Action: moBills
ACI Speedpay In Action: moBills ‘When tapping to pay, oaous tite te ABE Co, consumers are taken to the 7 web payment experience soe communion wsze with no further authentication required — no remembering credentials or keying information.
Slide 57: ACI Speedpay In Action: moBills
ACI Speedpay In Action: moBills Timely communications via mobile wallet Consumers aware of new bills, due dates and payment confirmations.
Slide 58: Strategy and Momentum: Merchants
CREATING WHAT’S - i \4 ene. ACI ANALYST DAY 2019 =~ omentum: Merchants E Debbie Guerra eee CS EVP, MERCHANT & PAYMENTS INTELLIGENCE SOLUTIONS, ; ACI ON DEMAND IACI bens:
Slide 59: Marketplace Challenges & Opportunities for Merchants
z all we Marketplace Challenges & Opportunities for Merchants Speed of innovation and increasing onan. needs drive need for implicity. Omni-channel payments acceptance is blurring the lines of physical and digital commerce. Market is evolving to mobile first, from POS to mPOS. is) @ 7 Globalization
Slide 60: UP Solution Areas
UP SOLUTION AREAS • • • • •UP SOLUTION AREAS • • • • •
Slide 61: Merchant Mobile Innovation: Pay-in-Aisle
Merchant Mobile Innovation: Pay-in-Aisle The Opportunity The Co-operative Group (Co-op) is one of the U.K.’s largest convenience food retailers with more than 2,600 on stores and fuel sites across the country. + Saw opportunity for innovating the in-store buying experience for its customers Required
Slide 62: Creating What's Next
CREATING WHAT’S - | \4 ene. ACI ANALYST DAY 2019 =~ Creatine What's Next EXECUTIVE VICE PRESIDENT, " PRODUCT DEVELOPMENT ~~ UNIVERSAL PAYMENTS. AC
Slide 63: Customer Choice of Deployment Options
Customer Choice of Deployment Options Public Cloud On Premise ACI’s Private Cloud (ess Hybrid > WCE ois
Slide 64: Microsoft Guest Speaker
CREATING WHAT’S- \4 1-7 Le Pee » AC| ANALYST DAY 2019*. Fy Peter Hazou ‘DIRECTOR, BUSINESS D -_ MICROSOFT =
Slide 65: Impact of Modern Technologies
Impact of Modern Technologies e 4 & Cloud-Ready Scalability Self-Service Solutions Innovation
Slide 66: Developer Portal Drives Innovation
Developer Portal Drives Innovation * Provides customers o with access to APIs * Drives innovation in g self-service environment ¢ Resides in public cloud
Slide 67: UP Solutions In Action
CREATING WHAT’S- j \4 ; eb. » ACI ANALYST DAY 2019 ©
Slide 68: UP Solutions In Action
UP Solutions In Action * The consumer enters a shopping app on his mobile device as usual. + The surfing and shopping experience remain the same as he selects his items. oot Check out rectly th EAL Time toca double fay pola! $5.99
Slide 69: UP Solutions In Action
UP Solutions In Action + As mobile payments grow globally, “front of hone” is the new “front of wallet. In a mobile shopping context, the ssly pushed type experience customers are used to. BD Banking that’ fun and safe
Slide 70: UP Solutions In Action
UP Solutions In Action apeoareas Sek Sep ang ce * The banking app becomes the primary payment instrument in this eCommerce scenario. + The bank creates the opportunity to build its relationship with customer as a trusted financial advisor as well as to cross-sell.
Slide 71: The customer authenticates
The customer authenticates himself in a familiar way, moon eran a combining this with other is r nfo (lo: ails, 2tc.). This meets Factor/Secure Customer Authentication.
Slide 72: UP Solutions In Action
UP Solutions In Action The customer returns to merchant app through the same h experience and is reminded of the benefits of paying in this way, with his loyalty rewards outlined. ‘our parent of $5.99 ACI Sock Shop Succes Pome
Slide 73: UP Solutions In Action
UP Solutions In Action * Your order is on its way. Your order is on its way.
Slide 74: UP Solutions In Action
UP Solutions In Action BD Bank Mobile App a LL BD Bank
Slide 75: Q&A
CREATING WHAT'S: 7 eS . af. * ACI ANALYST DAY 2019
Slide 76: Appendix
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Slide 77: Non-GAAP financial measures
• To supplement our financial results presented on a GAAP basis, we use the non-GAAP measures indicated in the tables, which exclude significant transaction-related expenses, as well as other significant non-cash expenses such as depreciation, amortization, and non-cash compensation, that we believe
Slide 78: Adjusted operating free cash flow definition
ACI presents adjusted operating free cash flow, which is defined as net cash provided by operating activities and net after- tax payments associated with significant transaction-related expenses, less capital expenditures. Adjusted operating free cash flow is considered a non-GAAP financial measure
Slide 79: Adjusted EBITDA reconciliation
Adjusted EBITDA (millions) 2009 Net income $ 20 Plus: Income tax expense 13 Net interest expense 2 Net other expense 7 Depreciation expense 6 Amortization expense 17 Non-cash compensation expense 8 Adjusted EBIDTA $ 73 AOD Segment Net Adjusted EBITDA Margin 2017 2018 2019* Segment Adjusted EBITDA $
Slide 80: Forward-Looking Statements
Forward-Looking Statements is statements based on current expectations that involve a number of risks ord uncertainties. Sencaiin forward-looking statements do not relate seetly to historical or current facts and may include words or phrases such as “believes,” “will,” “expects,” “anticipates,” “int
Slide 81: Forward-Looking Statements
Forward-Looking Statements All -going a risk in ou flings v and demi services industry, customer reluctance to switch t the accuracy of mana strategy sto our to obtain such renewals on favorable terms, delay or cancellation of custom projects a pr volatility and disruption of the capital and credit
Slide 82: Thank you
» Wel “UNIVERSAL ‘PAYMENTS.