Slide 1: Third Quarter 2024 Earnings
Third Quarter 2024 Earnings November 6, 2024 © 2024 Deluxe Corporation
Slide 2: Brian Anderson
Brian Anderson Vice President, Strategy & Investor Relations 2
Slide 3: Today’s Presenters
Today’s Presenters Barry McCarthy Chip Zint Brian Anderson President and Senior Vice President and Vice President, Chief Executive Officer Chief Financial Officer Strategy & Investor Relations 3
Slide 4: Cautionary Statement
Cautionary Statement Statements made in this presentation concerning Deluxe, the company’s or management’s intentions, expectations, outlook or predictions about future results or events are “forward- looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. Suc
Slide 5: Barry McCarthy
Barry McCarthy President and Chief Executive Officer 5
Slide 6: Q3'24 Highlights
Q3'24 Highlights (in millions) -1.7% -0.7% n/m +2.9% +6.9% n/m - not meaningful 6
Slide 7: North Star Progress & Timelines
North Star Progress & Timelines 7
Slide 8: Q3'24 Highlights
Q3'24 Highlights (in millions) -1.7% -0.7% n/m +2.9% +6.9% n/m - not meaningful 8
Slide 9: Merchant Services, Data Solutions, B2B Payments, Print results
Merchant Services Data Solutions ◦ Revenue grew 6.3% vs Q3'23, reflecting ◦ Revenue declined 4.5% vs Q3'23 against continued robust processing volumes across new outsized prior-year FI deposit gathering activity and existing merchant base within prior-year comparable ◦ YTD Revenue has increased 7.4%
Slide 10: Long-term Value Creation Algorithm
Long-term Value Creation Algorithm 10
Slide 11: Chip Zint
Chip Zint Chief Financial Officer 11
Slide 12: Q3'24 Financial Summary
Q3'24 Financial Summary TOTAL REVENUE NET INCOME Adjusted EBITDA Adj. EBITDA margin Adj. Diluted EPS $528.4M $8.9M $104.5M 19.8% $0.84 Down 1.7% Or $0.20 per share Increased 6.9% Increased 140 Up 12.0% versus Q3'23; on a diluted basis; versus Q3'23 basis points compared to Comparable Up from ($8.0M)
Slide 13: Merchant Services
Merchant Services Payment Processing & Omnichannel Payments Terminals & Devices Reporting (in millions) +6.3% +2.3% Adjusted EBITDA margin was 19.0%, down 80 basis points year-over- year on overall channel mix, while remaining 20.2%, up 40 basis points, on a Q3’YTD basis 13
Slide 14: B2B Payments
B2B Payments Treasury Management B2B/Digital Payments Fraud & Security Receivables as a Service Payables as a Service Protection (in millions) +0.7% -5.0% Adjusted EBITDA margin was 20.4%, sequentially improving 50 basis points from Q2'24 14
Slide 15: Data Solutions
Data Solutions Data Driven Marketing Data Analytics and SMB SaaS Solutions (in millions) -4.5% +14.4% Adjusted EBITDA margin was 28.6%, up 470 basis points year-over-year driven by operating expense management and overall campaign mix 15
Slide 16: Print
Print Consumer and Extensive range of Web Storefront Platform Business Essentials Business Checks Promotional offerings for Branded Products (in millions) -2.3% -0.7% Adjusted EBITDA margin was 32.8%, expanding 60 basis points year-over-year on strong operating efficiency across core printed offerin
Slide 17: Balance Sheet and Cash Flow
Balance Sheet and Cash Flow Net Debt to Adjusted EBITDA Free Cash Flow (in millions) (in millions) For the 12 Months Ended For the Nine Months Ended September 30, 9/30/2024 12/31/2023 Variance 9/30/2024 09/30/2023 Variance Cash Provided by Net Debt $1,490.2 $1,520.9 ($30.7) $134.1 $114.9 $19.2 Opera
Slide 18: Capital Structure - Debt maturity ladder
Capital Structure - Debt maturity ladder 18
Slide 19: 2024 Guidance
2024 Guidance Declared regular dividend of $0.30 per share Additional modeling assumptions: ◦ Interest expense of approximately $120 million ◦ Adjusted tax rate of 26% ◦ Depreciation and amortization of $165 million, of which acquisition amortization is approximately $75 million ◦ Average outstandin
Slide 20: Long-term Value Creation Algorithm
Long-term Value Creation Algorithm 20
Slide 21: dlx
» « dlx
Slide 22: Brian Anderson
Brian Anderson Vice President, Strategy & Investor Relations 22
Slide 23: Upcoming Conferences/Events
Upcoming Conferences/Events 23
Slide 24: Appendix
Appendix dlx
Slide 25: Consolidated Condensed Statements of Income (Loss)
Consolidated Condensed Statements of Income (Loss) in millions, except per share amounts (Unaudited) Quarter Ended September 30, Nine Months Ended September 30, 2024 2023 2024 2023 Product revenue $298.6 $304.8 $908.2 $938.9 Service revenue 229.8 233.0 693.0 716.0 Total revenue 528.4 537.8 1,601.2 1
Slide 26: Segment Information
Segment Information in millions (Unaudited) Quarter Ended September 30, Nine Months Ended September 30, 2024 2023 2024 2023 Effective January 1, 2024, the Revenue: company realigned its organization Merchant Services $93.5 $88.0 $288.5 $268.6 structure to better reflect its portfolio B2B Payments 75
Slide 27: Reconciliation of GAAP to Non-GAAP Measures
Reconciliation of GAAP to Non-GAAP Measures EBITDA, Adjusted EBITDA and Adjusted EBITDA margin in millions (Unaudited) Quarter Ended September 30, Nine Months Ended September 30, 2024 2023 2024 2023 Net income (loss) $8.9 ($8.0) $40.3 $11.2 Non-controlling interest — — (0.1) (0.1) Interest expense 2
Slide 28: Adjusted Diluted EPS - Q3 2024
Reconciliation of GAAP to Non-GAAP Measures Adjusted Diluted EPS - Q3 2024 dollars and shares in millions, except per share amounts (Unaudited) Gain on Acquisition and Restructuring Share-based Asset Certain sale of Income tax Q3 2024 accelerated and integration compensation impairment legal-related
Slide 29: Adjusted Diluted EPS - Q3 2023
Reconciliation of GAAP to Non-GAAP Measures Adjusted Diluted EPS - Q3 2023 dollars and shares in millions, except per share amounts (Unaudited) Loss on Restructuring Share-based Certain legal- sale of Income tax Q3 2023 Acquisition and integration compensation related businesses/ impact of Q3 2023 G
Slide 30: Adjusted Diluted EPS - Sept YTD 2024
Reconciliation of GAAP to Non-GAAP Measures Adjusted Diluted EPS - Sept YTD 2024 dollars and shares in millions, except per share amounts (Unaudited) Acquisition Gain on and Restructuring Share-based Asset Certain sale of Income tax Sept YTD Sept YTD 2024 accelerated and integration compensatio impa
Slide 31: Adjusted Diluted EPS - Sept YTD 2023
Reconciliation of GAAP to Non-GAAP Measures Adjusted Diluted EPS - Sept YTD 2023 dollars and shares in millions, except per share amounts (Unaudited) Gain on Restructuring Share-based Certain legal- sale of Income tax Sept YTD 2023 Acquisition and integration compensation related businesses/ impact
Slide 32: Comparable Adjusted Revenue and EBITDA
Reconciliation of GAAP to Non-GAAP Measures Comparable Adjusted Revenue / Comparable Adjusted EBITDA / Comparable Adjusted EBITDA Margin in millions (Unaudited) Quarter Ended September 30, Nine Months Ended September 30, 2024 2023 2024 2023 Total revenue $528.4 $537.8 $1,601.2 $1,654.9 Business exit
Slide 33: Comparable Adjusted Outlook Reconciliation
Reconciliation of GAAP to Non-GAAP Measures Comparable Adjusted Revenue / Comparable Adjusted EBITDA / Comparable Adjusted EPS Outlook (Unaudited) Total Year 2024 Outlook 2023 Actual (in billions) Total revenue $2.120 - $2.140 $2.192 Less: Business exits — (0.056) Comparable adjusted revenue $2.120
Slide 34: Net Debt to Adjusted EBITDA
Reconciliation of GAAP to Non-GAAP Measures Net Debt to Adjusted EBITDA dollars in millions (Unaudited) December 31, September 30, 2024 2023 Total debt $1,531.5 $1,592.9 Cash and cash equivalents (41.3) (72.0) Net debt $1,490.2 $1,520.9 TRAILING 12 MONTHS ADJUSTED EBITDA: 12 Months Ended 12 Months E
Slide 35: Free Cash Flow
Reconciliation of GAAP to Non-GAAP Measures Free Cash Flow in millions (Unaudited) Quarter Ended September 30, Nine Months Ended September 30, 2024 2023 2024 2023 Net cash provided (used) by operating activities $67.9 $67.6 $134.1 $114.9 Purchases of capital assets (21.2) (24.9) (69.8) (80.8) Free c
Slide 36: deluxe.
deluxe.