Slide 1: Third Quarter 2019 Earnings Conference Call
Third Quarter 2019 Earnings Conference Call October 30, 2019 1
Slide 2: Disclosures
Disclosures Forward-looking Statements Certain statements in this presentation constitute “forward-looking statements” within the meaning of, and subject to the protection of, the Private Securities Litigation Reform Act of 1995. Such forward-looking statements involve known and unknown risks, uncer
Slide 3: Business Summary
Business Summary Mac Schuessler President and CEO 3
Slide 4: Q3 2019 Financial Highlights
Q3 2019 Financial Highlights Total Revenue $119 million - increased 6% Adjusted EBITDA* $55 million - increased 6% Strong Results Adjusted EPS* $0.47 - increased 4% Delivered YTD operating cash flow of $136 million Returned $39 million to shareholder Returning Cash to •~$28 million in shar
Slide 5: Latin America Update
Latin America Update • New clients onboarded into Citi's 'One Receivable' system Implementation • Progress on the Santander Chile implementation with an Progress anticipated early 2020 roll-out • Strong interest in our products with traditional clients and new, Pipeline Update emerging digital banks
Slide 6: Puerto Rico Update
Puerto Rico Update • Increased revenue 7%; pricing, new contracts, and completed Growth & projects Innovation • Launched pvot for restaurants • Increased EBT funding began in August Macro • Lowest unemployment Environment • Proposal to restructure PR debt • Supported Bahamas post-hurricane with $100
Slide 7: Financial Summary
Financial Summary Joaquin Castrillo Chief Financial Officer 7
Slide 8: Consolidated Results Q3 2019
Consolidated Results Q3 2019 Q3 2019 (#039;s in millions, except per share) Y-O-Y % YTD Y-O-Y % Revenue $ 118.8 6% $ 360.2 7% Adjusted EBITDA $ 55.5 6% $ 170.9 7% Adjusted EBITDA margin 46.7% 20 bps 47.4% -20 bps Adjusted Net Income $ 34.6 3% $ 108.8 6% Adjusted EPS $ 0.47 4% $ 1.48 7% • Q3 revenue gro
Slide 9: Merchant Acquiring
Merchant Acquiring (#039;s in millions) Q3 2019 Y-O-Y % YTD Y-O-Y % Revenue $ 26.4 8% $ 79.2 7% Adjusted EBITDA $ 11.2 2% $ 35.4 3% Adjusted EBITDA margin 42.4% -230 bps 44.7% -190 bps • Q3 revenue increase reflects impact from pricing initiatives partially offset by impact on spread of a declining ave
Slide 10: Payment Services, PR and Caribbean
Payment Services, PR and Caribbean (#039;s in millions) Q3 2019 Y-O-Y % YTD Y-O-Y % Revenue $ 30.4 5% $ 92.9 10% Adjusted EBITDA $ 18.4 -5% $ 60.0 9% Adjusted EBITDA margin 60.4% -600 bps 64.5% -70 bps • Q3 revenue reflects transaction volume growth of ~5%, impact from ATH Movil & ATH Movil Business tr
Slide 11: Payment Services, Latin America
Payment Services, Latin America (#039;s in millions) Q3 2019 Y-O-Y % YTD Y-O-Y % Revenue $ 20.6 9% $ 62.5 7% Adjusted EBITDA $ 7.6 16% $ 23.6 29% Adjusted EBITDA margin 36.8% 220 bps 37.8% 640 bps • Q3 revenue growth reflects increased intercompany revenue, partially offset by anticipated client attrit
Slide 12: Business Solutions
Business Solutions (#039;s in millions) Q3 2019 Y-O-Y % YTD Y-O-Y % Revenue $ 52.9 8% $ 159.5 9% Adjusted EBITDA $ 25.1 15% $ 72.4 6% Adjusted EBITDA margin 47.4% 280 bps 45.4% -120 bps • Q3 revenue growth favorably impacted by new managed services offered to Popular and completed projects of approxima
Slide 13: Corporate and Other
Corporate and Other (#039;s in millions) Q3 2019 Y-O-Y % YTD Y-O-Y % Adjusted EBITDA $ (6.8) 6% $(20.5) 29% % of Total Revenue (5.7)% — bps (5.7)% (100) bps • Q3 corporate expenses increase reflect the impact of intercompany eliminations in the current quarter *See Non-GAAP reconciliation summary in ap
Slide 14: Roll Forward of 2019 Cash Balance
Roll Forward of 2019 Cash Balance ($’s in Millions) Operating Activities Ending Capex Balance(2) Beginning Balance(1) Debt (Repayment) / Issuance, Net(3) Dividends and Share Repurchases 12/31/2018 9/30/2019 (1) Includes $17 million in restricted cash (2) Includes $13 million in restricted cash (3) I
Slide 15: Debt
Debt (#039;s in millions) 09/30/19 12/31/18 Unrestricted Cash $ 102.5 $ 69.9 Total Debt $ 534.5 $ 545.3 Term A Loan (2023 Maturity) L+200bps $ 211.8 $ 220.0 Term B Loan (2024 Maturity) L+350bps $ 322.6 $ 325.0 Revolver (2023 Maturity, $125M) L+200bps $ — $ — Other $ 0.2 $ 0.3 Net Debt $ 432.0 $ 475.4 W
Slide 16: 2019 Outlook
2019 Outlook (#039;s in millions, except per share) Low High Total Revenue $ 479 $ 482 Growth % 5% 6% GAAP EPS - Diluted $ 1.39 $ 1.42 Adjusted EPS $ 1.95 $ 1.98 Growth % 6% 8% Capital Expenditures $ 50 $ 55 Assumptions: Adjusted EBITDA Margin 47% 47% Tax rate - Non-GAAP 12% 12% Share Count used to com
Slide 17: Q&A
~ evertec Q&A
Slide 18: Non-GAAP Financial Information
Non-GAAP Financial Information The non-GAAP measures referenced in this release material are supplemental measures of the Company’s performance and are not required by, or presented in accordance with, accounting principles generally accepted in the United States of America (“GAAP”). They are not me
Slide 19: Reconciliation of GAAP to Non-GAAP Operating Results
Reconciliation of GAAP to Non-GAAP Operating Results Three months ended September 30, Nine months ended September 30, (Dollar amounts in thousands, except share data) 2019 2018 2019 2018 Net income $ 24,786 $ 23,075 $ 78,657 $ 66,322 Income tax expense 3,720 3,302 10,018 10,349 Interest expense, net
Slide 20: Reconciliation of Q3 2019 Segment Non-GAAP Results
Reconciliation of Q3 2019 Segment Non-GAAP Results Three months ended September 30, 2019 Payment Services - Payment Puerto Rico & Services - Merchant Business Corporate and (In thousands) Caribbean Latin America Acquiring, net Solutions Other (1) Total Revenues $ 30,411 $ 20,596 $ 26,436 $ 52,945 $
Slide 21: Reconciliation of Q3 2018 Segment Non-GAAP Results
Reconciliation of Q3 2018 Segment Non-GAAP Results Three months ended September 30, 2018 Payment Services - Payment Puerto Rico & Services - Merchant Business Corporate and (In thousands) Caribbean Latin America Acquiring, net Solutions Other (1) Total Revenues $ 28,951 $ 18,907 $ 24,486 $ 48,831 $
Slide 22: Outlook Summary and Reconciliation to Non-GAAP Adjusted EPS
Outlook Summary and Reconciliation to Non-GAAP Adjusted Earnings per Share 2019 Outlook 2018 Actual (Dollar amounts in millions, except per share data) Revenues $ 479 to $ 482 $ 454 Earnings per Share (EPS) - Diluted (GAAP) $ 1.39 to $ 1.42 $ 1.16 Per share adjustment to reconcile GAAP EPS to Non-GA