Deluxe Corporation · NYSE:DLX
Deluxe — Investor Presentation (February 2014)
23 slides from Deluxe's investor presentation, Feb 10, 2014
Slide 1: Deluxe Corporation Investor Presentation
Deluxe Corporation Investor Presentation February 10, 2014 Exhibit 99.1
Slide 2: Forward Looking Statements
2 Forward Looking Statements This presentation contains forward-looking statements based upon information available to management as of the date hereof and management assumes no obligation to update or revise any such forward-looking statements. All estimates and projections are subject to risks and
Slide 3: Presenters and Agenda
3 Lee Schram Chief Executive Officer Terry Peterson Senior Vice President, Chief Financial Officer Deluxe Investor Contacts Ed Merritt Treasurer, Vice President of Investor Relations Business Overview Strategy – Corporate & Segment Looking Ahead Summary
Slide 4: Who Is Deluxe?
4 Who Is Deluxe? Financial Services Small Business Services Direct Checks Leading provider of products & services to financial institutions ~5,500 FI customers Adjusted operating margin 25.3% America’s leading direct-to-consumer check supplier ~6 million customers Adjusted operating margin 3
Slide 5: Vision and Key Strategic Focus Areas
Small Business Core Products Grow online, distributor, dealer, major accounts Improve segmented customer focus Small Business Marketing Solutions & Other Services Grow web design / hosting, web-to-print, SEM/SEO, logo, e-mail marketing, social media, payroll, e-checks, fraud & security Financi
Slide 6: Key Transformative Actions & Drivers
6 Key Transformative Actions & Drivers Actions Manage Secular Check Decline Velocity 6% Personal 4-5% Business Drivers Personal Rate of adoption of auto bill pay, housing stock/starts, price sensitivity Small Business Speed of adoption of electronic payment Use of check book to control cos
Slide 7: Marketing Solutions & Other Services
7 Marketing Solutions & Other Services Revenue 7 Categories / Examples 2012 % of Total 2013 % of Total 2014 Expected % of Total & Growth Rates Key Revenue Growth Initiatives SBS Marketing − Web-to-print − Apparel − Promotional Products − Bags & Bows®, Safeguard® and Healthcare Services 41% 40% 38% M
Slide 8: 2013 Financial Highlights
2013 Financial Highlights MOS FORMS Revenue growth of nearly 5% in 2013 -- represents 4th consecutive year of growth Adjusted EPS growth of nearly 10% in 2013 Cash flow from operations growth of over 7% to $262 million -- representing 5th straight year of increasing operating cash flow Net d
Slide 9: Growth Driven by Diversified Product Mix
9 Growth Driven by Diversified Product Mix Revenue by Product Type Revenue Penetration by Product Type $ in millions $854 $897 $872 $890 $885 $328 $317 $323 $339 $357 $162 $188 $223 $286 $343 0 200 400 600 800 1,000 1,200 1,400 2009 2010 2011 2012 2013 64% 64% 61% 59% 56% 24% 23% 23% 22% 22% 12% 13%
Slide 10: SBS Strategic Growth Execution Roadmap
10 Social Media BI & Analytics Branding Promoting Operating Mobile Branding Logo Design Imaging/ Promo Mobile Promotions SEM /SEO Services E-mail Marketing Direct Mail Full Color/ Web-to-Print Security/ Fraud Prot. Payroll Services Other Printed Prod. Checks, Forms Web Hosting Web Design Selling Sma
Slide 11: Key Small Business Services Differentiators
11 Key Small Business Services Differentiators* In Thousands 2012 2013 550 730 700 900 4,250 4,500 # of Web Sites # of MOS # Customers Financial Institutions Wholesale Services Retail Services Distributors Dealers Major Accounts Call Centers Online Partners Web-to- Print Social Media Web Hosting Web
Slide 12: FS Strategic Growth Execution Roadmap
12 Grow check share (technology focus) & maintain high retention rates FS Strategic Growth Execution Roadmap Grow marketing solutions & other services Customer Acquisition Fraud, Security, & Risk Management Account Activation & Retention Online Account Opening / Anchoring Targeting & Campaign Servic
Slide 13: Deluxe Competitive Landscape
13 Deluxe Competitive Landscape Small Business Services Financial Service Direct Checks Checks Harland Clarke Intuit Vistaprint Ennis Harland Clarke Main Street Harland Clarke (Checks in the Mail) Bradford Exchange Current Carousel Marketing Solutions & Other Services Vista Print 1&1, Go Daddy, Web.
Slide 14: Deluxe Longer-Term Goals
14 Revenue Organic revenue growth in mid-single digits augmented by small to-medium-sized acquisitions MOS growth from 22% of revenue in 2013 to 40% percent of total revenue by 2018 Forms, Accessories & Other revenue from 22% of revenue in 2013 to 20% of total revenue by 2018 Check revenue f
Slide 15: Adjusted EBITDA Margin Rates Expected to Grow Slightly
Adjusted EBITDA Margin Rates Expected to Grow Slightly 15 Core Corp Total MOS A d j. E BI T D A % (S c a le d o e s n o t sta rt at 0 ) Ranges from historic to strategic time frames 1. (Corp Total) - Expect longer-term corporate adjusted EBITDA margin rates to increase slightly 2. (Core) – Expect fa
Slide 16: Capital Structure & Priorities
16 Capital Structure & Priorities Strong balance sheet and cash flow provides for a flexible capital structure - continue advancing our transformation Expected use(s) of cash: ‒ Invest organically ‒ Small to medium-sized acquisitions ‒ Maintain current dividend level ‒ Repurchase shares to off-s
Slide 17: Positioning Deluxe for Long-Term Growth
17 Positioning Deluxe for Long-Term Growth Management team continues to deliver improving results 2013 marks our fourth consecutive year of revenue growth with 2014 guidance for fifth year Growing MOS at double-digit rates and now 22% of revenue Existing customer base provides foundation for
Slide 18: Investor Contact
18 Investor Contact Ed Merritt Treasurer & Vice President of Investor Relations ed.merritt@deluxe.com Tel: 651-787-1370
Slide 19: Thank You
19 Thank You
Slide 20: Appendix - Reconciliations
Appendix - Reconciliations B)
Slide 21: Reconciliation to reported EPS – Diluted
21 Reconciliation to reported EPS – Diluted Year Ended December 31, 2013 2012 2011 2010 2009 Adjusted Diluted EPS $3.87 $3.53 $3.11 $3.18 $2.44 Restructuring related costs (0.14) (0.13) (0.18) (0.14) (0.18) Net gain/(loss) on repurchase of debt - (0.07) (0.11) - 0.11 Tax impact of health care legisl
Slide 22: EBITDA and Adjusted EBITDA Reconciliation
22 EBITDA and Adjusted EBITDA Reconciliation Reconciliation from net income to adjusted EBITDA $ in millions Year Ended December 31, 2013 as a % of revenue Total Revenue $1,584.8 ADJUSTED EBITDA $401.0 25.3% Restructuring and related costs (10.9) (0.7%) Asset impairment charge (5.0) (0.3%) Transacti
Slide 23: Adjusted Operating Income and Net Debt Reconciliations
23 Adjusted Operating Income and Net Debt Reconciliations Adjusted operating income reconciliation to reported operating income 2013 Annual Operating Income Small Business Services Financial Services Direct Checks Consolidated $ in millions Operating Income % of Revenue Operating Income % of Revenue