Deluxe Corporation · NYSE:DLX
Deluxe — Investor Presentation (September 2020)
20 slides from Deluxe's investor presentation, Sep 16, 2020
Slide 1: Investor Operations Presentation September 2020
InvestorOperations Presentation September 2020 © 2020 Deluxe Enterprise Operations, Inc. Proprietary and Confidential.
Slide 2: Cautionary Statement
Cautionary Statement » This presentation highlights management’s intentions, projections, financial estimates or expectations about the company's future strategy or performance and are forward-looking in nature as defined in the Private Securities Litigation Reform Act of 1995. These comments are su
Slide 3: New Deluxe = Technology Company with Strong Cash Flow
New Deluxe = Technology Company with Strong Cash Flow Payments | Cloud Solutions | Promotional Solutions | Checks Focus on capital efficient, scalable businesses in growth markets Powerful reach, sales and distribution channels Recurring revenue model with long-term relationships Revenue diversity &
Slide 4: Leading Market Position With Powerful Scale
Leading Market Position With Powerful Scale EXISTING RELATIONSHIPS: +4,000 ~4.5M ~4M Financial Institutions SMBs Consumers $2.8T 400K 150K Annual payments volume New SMBs added each year Packages shipped each day 4
Slide 5: Focus on Profitable, Growth Businesses
Focus on Profitable, Growth Businesses Payments Cloud Solutions Promotional Solutions Checks High Growth Moderate Growth Modest Growth Powerful Cash Generator Treasury Management Solutions SaaS Solutions Brand Building Platform » Printed Checks » Receivables as a service » Incorporation Services » T
Slide 6: Deluxe Helps Companies Across Lifecycle
Deluxe Helps Companies Across Lifecycle Meaningful cross-sell opportunities START YOUR BRAND YOUR GROW YOUR OPTIMIZE YOUR BUSINESS BUSINESS BUSINESS BUSINESS Payroll Digital Checks Forms Website & Solutions Payments Hosting Retail Data-Driven Licenses Packaging and IDs Print Marketing TM Marketing T
Slide 7: Comprehensive Go-To-Market Sales Strategy
Comprehensive Go-To-Market Sales Strategy “One Deluxe” Go-To-Market Approach Bringing the Best of Deluxe to Every Customer – Unified “Company of Products” Sales Approach Enterprise Demand Small Business Cross Sell eCommerce Distribution Account Model Generation Advisory Partners • Large, long-term •
Slide 8: Payments High Growth Segment
Payments High Growth Segment Enabling Businesses Pay and Get Paid Our Solutions Our Scale Where We Win Why We Win Receivables as a Helping our bank partners and » Lockbox as our foundation Service $ enterprise customers » Software intelligently matching 2.8T all payment options in one view Software
Slide 9: Cloud Solutions
Cloud Solutions Moderate growth segment with offerings to start and manage SMBs & grow Enterprises Market Solutions Growth* Where we Win Why We Win? SaaS Solutions — • Easy to use SMBs and FIs—increasing need for DIY and DIFM models. • Easy to find on-line +5-10% digital tools and support to Incorpo
Slide 10: Promotional Solutions
Promotional Solutions Platform to manage and produce physical products promoting brand image Market Growth Where We Win Why We Win Omni-channel distribution; turn-key platform; Flat + SMBs, Enterprises, Global Brands well-curated selection; rapid innovation Turn-Key Branded Web Storefronts for Suppo
Slide 11: Checks: Strategic asset to self fund growth
Checks Strategic asset to self fund growth Outstanding cash flow self funds growth investments AND generates healthy return of capital to shareholders Lead generation for cost-effective cross-selling other DLX solutions to existing customers Where We Win: financial institutions and other resellers o
Slide 12: Strong Financial Performance Amidst COVID-19
Strong Financial Performance Amidst COVID-19 Deluxe has a durable business model Q2 2020 Results DELIVERING SALES- ADVANCING IMPROVED FINANCIAL DRIVEN GROWTH TRANSFORMATION STRENGTH » Estimate second » Reduced real estate » Expanded liquidity consecutive quarter of footprint by ~30% revenue growth e
Slide 13: A Compelling Investment Opportunity
A Compelling Investment Opportunity Technology Hidden Gem: Payments, Cloud, Promo, Checks Who We Are 1. Focus on Optimizing Strong Growth Trends & Recurring Revenue: Focused on Payments & Cloud. Long-term contracts. Revenue diversity with customers Trusted Business from many sectors. Technology™ com
Slide 14: deluxe. trusted business technology
deluxe. trusted business technology
Slide 15: Appendix
Appendix © Deluxe Financial Services, LLC. Proprietary and Confidential. 15
Slide 16: Consolidated Condensed Statements of Income (Loss)
Consolidated Condensed Statements of Income (Loss) $ in millions, except per share amounts (Unaudited) Quarter Ended Six Months Ended June 30, June 30, 2020 2019 2020 2019 Product revenue $278.7 $347.1 $609.4 $697.6 Service revenue 131.7 146.9 287.4 295.5 Total revenue 410.4 494.0 896.8 993.1 Cost o
Slide 17: Segment Information
Segment Information Six Months Ended $ in millions June 30, (Unaudited) 2020 2019 $ Better/(Worse) % Better/(Worse) Revenue: Payments $149.2 $129.3 $19.9 15.4% Cloud Solutions 129.9 157.2 (27.3) -17.4% Promotional Solutions 260.7 311.4 (50.7) -16.3% Checks 357.0 395.2 (38.2) -9.7% Total $896.8 $993.
Slide 18: Reconciliation of GAAP to Non-GAAP Measures (EBITDA and Adjusted EBITDA)
Reconciliation of GAAP to Non-GAAP Measures (EBITDA AND ADJUSTED EBITDA) Management discloses EBITDA and Adjusted EBITDA because it believes they are useful in evaluating the Company's operating performance, as the calculations eliminate the effect of interest expense, income taxes, the accounting e
Slide 19: Reconciliation of GAAP to Non-GAAP Measures: Adjusted Diluted EPS
Reconciliation of GAAP to Non-GAAP Measures ADJUSTED DILUTED EPS By excluding the impact of non-cash items or items that may not be indicative of ongoing operations, management believes that Adjusted Diluted EPS provides useful comparable information to assist in analyzing the Company's current and
Slide 20: Free Cash Flow
Free Cash Flow $ in millions, except per share amounts (Unaudited) Six Months Ended June 30, 2020 2019 Net cash provided by operating activities $109.7 $105.1 Purchases of capital assets (27.1 ) (32.3 ) Free cash flow $82.6 $72.8 Management believes that free cash flow is an important indicator of c