Ncr Atleos Corporation · NYSE:NATL
Ncr Atleos — Q4 2023 Earnings Presentation
33 slides from Ncr Atleos's earnings presentation, Feb 14, 2024
Slide 1: Fourth Quarter 2023 Earnings Call
Fourth Quarter 2023 Earnings Call February 14, 2024 (as corrected March 26, 2024)* Tim Oliver, President & Chief Executive Officer Paul Campbell, Chief Financial Officer Stuart Mackinnon, Chief Operating Officer * This presentation has been revised as described in Item 7.01 of the Form 8-K/A of NCR
Slide 2: Forward-Looking Statements
FORWARD-LOOKING STATEMENTS NCR Atleos Corporation (“NCR Atleos,” “Atleos” or the “Company”) cautions that comments made during this presentation and in these materials contain "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of
Slide 3: Forward-Looking Statements
FORWARD-LOOKING STATEMENTS Forward-looking statements are based on our current beliefs, expectations and assumptions, which may not prove to be accurate, and involve a number of known and unknown risks and uncertainties, many of which are out of the Company's control, including the failure of NCR At
Slide 4: Notes to Investors
NOTES TO INVESTORS NON-GAAP MEASURES. While Atleos reports its results in accordance with generally accepted accounting principles in the United States, or GAAP, comments made during this conference call and in these materials will include or make reference to certain "non-GAAP" measures, including:
Slide 5: Business Update
Business Update Tim Oliver President and Chief Executive Officer
Slide 6: Strong Performance and Momentum
Strong Performance and Momentum Positioned for a Good Q4 Outstanding 2023 Successful 2024 Reaffirmed 2024 financial Revenue up 3% y/y and Executed split and achieved targets sequentially; Recurring strategic objectives revenue up 10% y/y Strategy has been validated and Grew revenue 1% to $4 billion,
Slide 7: Segment Operational Highlights
Segment Operational Highlights Self-Service Banking Network • Installed 2,000 ATMaaS units, exceeding 20K • Strong profitability and cash flow generation installed units • ASDA retail locations online and providing increase • Q4 orders were very strong, boosting our H1 backlog to profit in Q4 • Achi
Slide 8: Key Objectives for 2024
Key Objectives for 2024 ■ Offer best-in-class solutions and service ■ Leverage existing operations Differentiate & Grow ■ Expand markets and transaction sets ■ Advance ATMaaS model ■ Establish a culture of continuous improvement Optimize ■ Identify and realize efficiency opportunities Resource ■ App
Slide 9: Financial Review
Financial Review Paul Campbell Chief Financial Officer
Slide 10: Q4 2023 Consolidated Financial Results
Q4 2023 CONSOLIDATED FINANCIAL RESULTS $ in millions, except percentages and per share amounts ■ Fourth Quarter Non-GAAP Diluted EPS of $0.64(1) Total Revenue/Recurring Adjusted EBITDA As Reported Normalized (1) As Reported Normalized (2) $1,065 $1,098 7% $187 7% $178 $777 $709 ■ Q4 '23 Revenue of $
Slide 11: Self-Service Banking
SELF-SERVICE BANKING $ in millions, except units and percentages Revenue Adjusted EBITDA As Reported Normalized(1) As Reported Normalized(1) $159 $683 1% $146 $665 2% Key Strategic Metrics Recurring Revenue % ATMaaS Units (in thousands) ARR(2) $1,607 20.4 $1,551 18.2 $1,532 59% 58% 14.3 49% $1,430 U
Slide 12: Network
NETWORK $ in millions, except units and ARPU Revenue Adjusted EBITDA $323 $298 $100 $81 Key Strategic Metrics Self-Service Banking Terminal LTM ARPU (in thousands) Network (in thousands) $15.1 $14.8 84 $14.1 83 83 Down 1% y/y Up 7% y/y 12
Slide 13: Segment Summary & Financial Position
Segment Summary & Financial Position $ in millions Segment Summary Balance Sheet & Liquidity Revenue Q4 2023 Q4 2022 December 31, 2023 Self-Service Banking $665 $683 Liquidity $676 Network 323 298 Revolving Credit Availability $337 Technology & Telecommunications 48 53 Cash (unrestricted)1 $339 Othe
Slide 14: 2024 Financial Outlook
2024 Financial Outlook $ in millions, except per share amounts Q1 2024 Targets FY 2024 Targets Consolidated Low High Low High Revenue $1,000 $1,050 $4,200 $4,400 Adjusted EBITDA $150 $160 $770 $800 Non-GAAP Diluted EPS $0.30 $0.40 $2.90 $3.20 Adjusted Free Cash Flow-Unrestricted Positive $170 $230 I
Slide 15: 2024 Outlook Revenue Growth Walk
2024 Outlook Revenue Growth Walk $ in millions 2023 2024 Guidance $ Growth y/y % Growth y/y Revenue Midpoint Self Service Banking Segment - Base $2,629 $2,686 $57 2.2% Self-Service Banking Segment - ATMaaS Hardware (48) (105) (57) NM2 Related Impact1 Self-Service Banking Segment 2,581 2,581 — —% Net
Slide 16: 2024 Outlook Adjusted EBITDA to FCF Walk
2024 Outlook Adjusted EBITDA to FCF Walk $ in millions 2024 Adj. EBITDA Target Mid-Point* ~($280M) ~$785M ~$785M ~($75M Cash Interest Expense(1) ) Cash Taxes (2) ~($180M) ~($5M) 2024 FCF Target Capex ~($45M) Mid-Point* • ATMaaS: ~$45M Working Capital / Other One Time • • Maintenance: ~$80M Other Gro
Slide 17: 2024 Financial Outlook EBITDA & EBITDA Margin Walks
2024 Financial Outlook EBITDA & EBITDA Margin Walks $ in millions Consolidated Adjusted Self-Service Banking Network EBITDA Adj. EBITDA Margin Adj. EBITDA Margin FY 2023 $732 FY 2023 $630 24.4% FY 2023 $379 29.9% Voyix Exits ($25) 2023 Continuing $707 Split Dis-Synergies (1.5%) Adj. EBITDA Base Vaul
Slide 18: Takeaways
Takeaways Solid Fourth Quarter and 2023 Results Effectively Advancing Our Strategy: ATM as a Service Positive Momentum Heading Into 2024 Strong Fundamentals and Opportunity to Create Value 18
Slide 19: Supplementary Materials
SUPPLEMENTARY MATERIALS ~ . ~ ‘ ‘
Slide 20: Non-GAAP Measures
NON-GAAP MEASURES While Atleos reports its results in accordance with generally accepted accounting principles (GAAP) in the United States, comments made during this conference call and in these materials will include non-GAAP measures. These measures are included to provide additional useful inform
Slide 21: Non-GAAP Measures
NON-GAAP MEASURES Net Debt. Atleos determines Net Debt based on its total debt less cash and cash equivalents, with total debt being defined as total short-term borrowings plus total long-term debt. Atleos believes that Net Debt provides useful information to investors because Atleos’ management rev
Slide 22: Non-GAAP Measures
NON-GAAP MEASURES With respect to our Adjusted EBITDA, adjusted free cash flow-unrestricted and non-GAAP diluted earnings per share forward-looking guidance, we do not provide a reconciliation of the respective GAAP measures because we are not able to predict with reasonable certainty the reconcilin
Slide 23: Q4 2023 GAAP Results
Q4 2023 GAAP RESULTS $ in millions, except per share amounts Q4 2023 Q4 2022 % Change Revenue $1,098 $1,065 3% Gross Margin 198 242 (18)% Gross Margin Rate 18.0% 22.7% Operating Expenses 163 152 7% % of Revenue 14.8% 14.3% Operating Income 35 90 (61)% % of Revenue 3.2% 8.5% Interest and other expens
Slide 24: Q4 2023 Operational Results (Non-GAAP)
Q4 2023 OPERATIONAL RESULTS (Non-GAAP) $ in millions, except per share amounts Q4 2023 Q4 2022 % Change Revenue $1,098 $1,065 3% Adjusted Gross Margin (non-GAAP) 272 267 2% Adjusted Gross Margin Rate (non-GAAP) 24.8% 25.1% Adjusted Operating Expenses (non-GAAP) 122 123 (1)% % of Revenue 11.1% 11.5%
Slide 25: GAAP to Non-GAAP Reconciliation
GAAP TO NON-GAAP RECONCILIATION $ in millions Q4 2023 Q4 2022 Net (Loss) Income Attributable to Atleos (GAAP) * $ (165) $ 7 Pension Mark-to-Market Adjustments 33 78 Transformation & Restructuring Costs 22 15 Acquisition-Related Amortization of Intangibles 24 24 Separation Costs 84 — Interest Expense
Slide 26: GAAP to Non-GAAP Reconciliation
GAAP TO NON-GAAP RECONCILIATION $ in millions FY 2023 Net Loss Attributable to Atleos (GAAP) $ (134) Pension Mark-to-Market Adjustments 27 Transformation & Restructuring Costs 28 Acquisition-Related Amortization of Intangibles 98 Separation Costs 170 Interest Expense (including Related party interes
Slide 27: GAAP to Non-GAAP Reconciliation Q4 2023
GAAP TO NON-GAAP RECONCILIATION Q4 2023 $ in millions, except per share amounts Income Interest & Diluted Gross Gross Operating Other Income Tax Effective Net Income (loss) from Expenses, Expense Income Tax attributable Earnings per Margin Margin rate Expenses operations (Benefit) * Rate* to Atleos*
Slide 28: GAAP to Non-GAAP Reconciliation Q4 2022
GAAP TO NON-GAAP RECONCILIATION Q4 2022 $ in millions, except per share amounts Income (loss) Interest & Gross Margin Operating Other Income Tax Effective Net Income Earnings per Gross Margin from Expense Income Tax attributable rate Expenses operations Expenses, Share(1) Net (Benefit) Rate to Atleo
Slide 29: Q4 2023 Segment Results - GAAP
Q4 2023 SEGMENT RESULTS - GAAP $ in millions Self-Service Corporate(2) Banking Network T&T Other(1) Total Unallocated Product Revenue $232 $22 $3 $25 $— $282 Service Revenue $433 $301 $45 $37 $— $816 Total Revenue $665 $323 $48 $62 $— $1,098 Cost of Products $169 $18 $2 $23 $15 $227 Cost of Services
Slide 30: Q4 2023 Segment Results - Non-GAAP
Q4 2023 SEGMENT RESULTS - NON-GAAP $ in millions Self-Service Corporate(2) Network T&T Other(1) Total Banking Unallocated Product Revenue $232 $22 $3 $25 $— $282 Service Revenue $433 $301 $45 $37 $— $816 Total Revenue $665 $323 $48 $62 $— $1,098 Adjusted Cost of Products (non-GAAP) $169 $18 $2 $23 $
Slide 31: Q4 2023 GAAP to Non-GAAP Segment Reconciliation
Q4 2023 GAAP TO NON-GAAP Segment Reconciliation $ in millions Transformation Stock Based Acquisition Related GAAP Amortization of Separation Costs Non-GAAP Costs Compensation Intangibles Self Service Banking $ 358 $ — $ — $ — $ (42) $ 316 Network 226 — — (20) — 206 T&T 38 — — — (5) 33 Other 32 (1) —
Slide 32: GAAP to Non-GAAP Reconciliation
GAAP TO NON-GAAP RECONCILIATION $ in millions Q4 2023 Q4 2022 Cash provided by operating activities* $8 $33 Total capital expenditures $(47) $(27) Initial sale of accounts receivables $(166) $— Pension contributions $145 $1 Restricted cash settlement activity* $(8) $36 Adjusted Free Cash Flow-Unrest
Slide 33: Thank You
THANK YOU . ~ ‘ ‘