Slide 1: Fourth Quarter and Full Year 2023 Earnings
Fourth Quarter and Full Year 2023 Earnings February 1, 2024 © 2024 Deluxe Corporation
Slide 2: Brian Anderson, Vice President, Strategy & Investor Relations
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: Full Year 2023 Highlights
Full Year 2023 Highlights (in millions) Revenue Comparable Net Adjusted Comparable Adjusted Income - EBITDA Adjusted $2,238.0 Revenue GAAP EBITDA $2,192.3 $2,186.3 $2,192.3 $418.1 $417.1 $417.1 $65.5 $404.0 -2.0% +0.3% -60.0% -0.2% +3.2% $26.2 2022 2023 2022 2023 2022 2023 2022 2023 2022 2023 6
Slide 7: 2023 Segment Highlights
2023 Segment Highlights Strong Operating Leverage: Comp Adjusted EBITDA grew 3.2% vs 2022 Payments Data Solutions Modern Payments & Data Company Promotional Solutions Checks 7
Slide 8: North Star Progress & Timelines
North Star Progress & Timelines 8
Slide 9: Long-term Value Creation Algorithm
Long-term Value Creation Algorithm 9
Slide 10: Chip Zint, Chief Financial Officer
Chip Zint Chief Financial Officer 10
Slide 11: Full Year '23 Summary
Full Year '23 Summary TOTAL REVENUE NET INCOME Adjusted EBITDA Adj. EBITDA margin Adjusted EPS $2.19B $26.2M $417.1M 19.0% $3.32 Down 2% Or $0.59 per share Increased 3.2% Increased 50 Down from $4.08 compared to '22; on a diluted basis; on a comparable basis points on a compared to '22, Comparable D
Slide 12: Payments
Payments Treasury Management B2B/Digital Payments Merchant Services Receivables as a Service Payables as a Service (in millions) Revenue Adjusted EBITDA Revenue Adjusted EBITDA $174.9 $678.6 $690.7 $171.4 $144.6 $152.8 $42.3 $37.0 +2.0% +14.3% +1.8% +5.7% Q4'22 Q4'23 Q4'22 Q4'23 FY '22 FY '23 FY '22
Slide 13: Data Solutions
Data Solutions Data Driven Marketing SMB SaaS Solutions Data Analytics (in millions) Comparable Comparable Comparable Comparable Adjusted Revenue Adjusted EBITDA Adjusted Revenue Adjusted EBITDA $47.7 $229.0 $238.8 $44.1 $10.9 $54.8 $55.7 $7.3 -7.5% -33.0% +4.3% +1.6% Q4'22 Q4'23 Q4'22 Q4'23 FY'22 F
Slide 14: Promotional Solutions
Promotional Solutions Turn-Key Managed Extensive range of Web Storefront Platform Business Essentials Branded Solutions Promotional offerings for Branded Products (in millions) Comparable Comparable Comparable Comparable Adjusted Revenue Adjusted EBITDA Adjusted Revenue Adjusted EBITDA $153.6 $78.8
Slide 15: Checks
Checks Strong cash flows fund growth investments, and Long-standing customer relationships generate healthy return of capital to shareholders drive cross-selling opportunities (in millions) Revenue Adjusted EBITDA Revenue Adjusted EBITDA $175.6 $176.0 $78.9 $320.5 $320.3 $74.7 $729.0 $721.1 +0.2% +5
Slide 16: Balance Sheet and Cash Flow
Balance Sheet and Cash Flow Declared regular dividend of $0.30 per share Net Debt to Adjusted EBITDA Free Cash Flow (in millions) (in millions) 16
Slide 17: 2024 Guidance
2024 Guidance Well-positioned for sustainable growth Additional modeling assumptions: ◦ Interest expense of approximately $120 - $125 million ◦ Adjusted tax rate of 26% ◦ Depreciation and amortization of $150 million, of which acquisition amortization is approximately $55 million ◦ Average outstandi
Slide 18: Long-term Value Creation Algorithm
Long-term Value Creation Algorithm 18
Slide 19: Deluxe
» « dlx
Slide 20: Brian Anderson, Vice President, Strategy & Investor Relations
Brian Anderson Vice President, Strategy & Investor Relations 20
Slide 21: Upcoming Conferences/Events
Upcoming Conferences/Events 21
Slide 22: Appendix
Appendix dlx
Slide 23: Consolidated Condensed Statements of Income
Consolidated Condensed Statements of Income in millions, except per share amounts (Unaudited) Quarter Ended December 31, Year Ended December 31, 2023 2022 2023 2022 Product revenue $318.8 $329.5 $1,257.6 $1,286.2 Service revenue 218.6 234.5 934.7 951.8 Total revenue 537.4 564.0 2,192.3 2,238.0 Cost
Slide 24: Segment Information
Segment Information in millions (Unaudited) Quarter Ended December 31, Year Ended December 31, 2023 2022 2023 2022 Revenue: Payments $174.9 $171.4 $690.7 $678.6 Data Solutions 44.1 62.7 238.8 267.5 Promotional Solutions 142.4 154.3 541.7 562.9 Checks 176.0 175.6 721.1 729.0 Total $537.4 $564.0 $2,19
Slide 25: Segment Information (continued)
Segment Information (continued) in millions (Unaudited) Quarter Ended December 31, Year Ended December 31, 2023 2022 2023 2022 Comparable Adjusted Revenue: Payments $174.9 $171.4 $690.7 $678.6 Data Solutions 44.1 47.7 238.8 229.0 Promotional Solutions 142.4 153.6 541.7 549.7 Checks 176.0 175.6 721.1
Slide 26: 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 December 31, Year Ended December 31, 2023 2022 2023 2022 Net income $15.0 $19.0 $26.2 $65.5 Non-controlling interest — — (0.1) (0.1) Interest expense 31.7 29.0 125.6 9
Slide 27: Reconciliation of GAAP to Non-GAAP Measures
Reconciliation of GAAP to Non-GAAP Measures Adjusted Diluted EPS - Q4 2023 dollars and shares in millions, except per share amounts (Unaudited) Gain on sale of businesses/ long- Acquisition and Restructuring lived assets & Income tax Q4 2023 accelerated and integration Share-based loss on sale of im
Slide 28: Reconciliation of GAAP to Non-GAAP Measures
Reconciliation of GAAP to Non-GAAP Measures Adjusted Diluted EPS - Q4 2022 dollars and shares in millions, except per share amounts (Unaudited) Income tax Q4 2022 Acquisition Restructuring and Share-based Certain legal- impact of Q4 2022 GAAP amortization integration costs compensation related expen
Slide 29: Reconciliation of GAAP to Non-GAAP Measures
Reconciliation of GAAP to Non-GAAP Measures Adjusted Diluted EPS - Full Year 2023 dollars and shares in millions, except per share amounts (Unaudited) Gain on sale of businesses/ Acquisition long-lived Full Year and Restructuring Certain legal- assets & loss on Income tax Full Year 2023 accelerated
Slide 30: Reconciliation of GAAP to Non-GAAP Measures
Reconciliation of GAAP to Non-GAAP Measures Adjusted Diluted EPS - Full Year 2022 dollars and shares in millions, except per share amounts (Unaudited) Gain on sale of businesses/ long-lived assets & Full Year Restructuring Acquisition Certain legal- gain on Income tax Full Year 2022 Acquisition and
Slide 31: Reconciliation of GAAP to Non-GAAP Measures
Reconciliation of GAAP to Non-GAAP Measures Comparable Adjusted Revenue in millions (Unaudited) Quarter Ended December 31, Year Ended December 31, 2023 2022 2023 2022 Total Company: Total revenue $537.4 $564.0 $2,192.3 $2,238.0 Business exits — (15.7) — (51.7) Comparable adjusted revenue $537.4 $548
Slide 32: Reconciliation of GAAP to Non-GAAP Measures
Reconciliation of GAAP to Non-GAAP Measures Comparable Adjusted EBITDA and Comparable Adjusted EBITDA Margin in millions (Unaudited) Quarter Ended December 31, Year Ended December 31, 2023 2022 2023 2022 Total Company: Adjusted EBITDA $106.4 $112.2 $417.1 $418.1 Business exits — (6.5) — (14.1) Compa
Slide 33: Reconciliation of GAAP to Non-GAAP Measures
Reconciliation of GAAP to Non-GAAP Measures Comparable Adjusted Revenue / Comparable Adjusted EBITDA / Comparable Adjusted EPS Outlook (Unaudited) Total Year Payments Data Solutions Promotional Solutions 2024 Outlook 2023 Actual 2023 Actual 2023 Actual 2023 Actual (in billions) Total revenue $2.140
Slide 34: Reconciliation of GAAP to Non-GAAP Measures
Reconciliation of GAAP to Non-GAAP Measures Net Debt to Adjusted EBITDA dollars in millions (Unaudited) Dec. 31, September 30, 2023 2023 Total debt $1,592.9 $1,632.4 Cash and cash equivalents (72.0) (42.2) Net debt $1,520.9 $1,590.2 TRAILING 12 MONTHS ADJUSTED EBITDA: 12 Months Ended 12 Months Ended
Slide 35: Reconciliation of GAAP to Non-GAAP Measures
Reconciliation of GAAP to Non-GAAP Measures Free Cash Flow in millions (Unaudited) Quarter Ended December 31, Year Ended December 31, 2023 2022 2023 2022 Net cash provided by operating activities $83.4 $68.1 $198.4 $191.5 Purchases of capital assets (19.9) (31.1) (100.7) (104.6) Free cash flow $63.5
Slide 36: Reconciliation of GAAP to Non-GAAP Measures
Reconciliation of GAAP to Non-GAAP Measures We have not reconciled the adjusted EBITDA, comparable adjusted EBITDA, adjusted EPS, free cash flow or adjusted tax rate outlook guidance for 2024 to the directly comparable GAAP financial measures because we do not provide outlook guidance for the reconc
Slide 37: Deluxe
deluxe.