Evertec, Inc. · NYSE:EVTC
Evertec — Q1 2021 Earnings Presentation
30 slides from Evertec's earnings presentation, May 2021
Slide 1: Investor Presentation
Investor Presentation May 2021
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: Investment Highlights
Investment Highlights Transaction Processor Uniquely Focused on Latin America 1 Resilient Business Model 2 Attractive Secular Industry Trends 3 Comprehensive and Scalable Service Offering 4 Aligned Strategic Growth Initiatives 5 3
Slide 4: Transaction Processor Uniquely Focused on Latin America
1 Transaction Processor Uniquely Focused on Latin America
Slide 5: A Comprehensive and Scalable End-to-End Payments Processor
A Comprehensive and Scalable End-to-End Payments Processor… Front-End Back-End Reporting and Loyalty & Rewards Customer Service Merchant Merchant Analytics Programs & Support Processing Processing Merchant Acquiring (22%1) Card Issuer Acquirer Electronic Electronic Benefit Payment ATH Network Proces
Slide 6: With A Unique Focus on Latin American Markets
… With A Unique Focus on Latin American Markets … Snapshot of Regional Operating Platform, EVTC Operating Footprint in Numbers ~2,500 Employees across 11 Countries including +1,100 Outside of PR +30,000 Merchants Served +80,000 POS Terminals +2,000 Connected ATMs Presence in 26 Countries 6
Slide 7: And a Growing Record of Partnerships
… And a Growing Record of Partnerships … Year 2016 2017 2019 2019 2019 Entered Mexico and Country / Region Colombia Chile Chile Colombia Guatemala Acquired 65% stake Acquired 100% of Expanded regional 5-year processing Acquired 100% in Processa, a EFT Group S.A., a agreement with agreement
Slide 8: Led By A Team of Proven Industry Professionals
… Led By A Team of Proven Industry Professionals Mac Schuessler President and CEO +6 years of experience with Evertec. Former President of International for Global Payments with +20 years of payment industry leadership experience Joaquin Castrillo Chief Financial Officer Luis A. Rodriguez +9 years o
Slide 9: Resilient Business Model
2 Resilient Business Model
Slide 10: Attractive Cash Flow Generation and Strong Liquidity
Attractive Cash Flow Generation and Strong Liquidity Free Cash Flow(1) ▪ Attractive cash flow generation despite Increased ($ in millions) Hurricane headwinds Maria Capex $150 $144 o Hurricane Maria occurred September $131 2017 $120 $112 o Increased one-time technology spend in 2019 ~$15M for infras
Slide 11: Resilient, Recurring and Growing Revenue Base
Resilient, Recurring and Growing Revenue Base Revenue Base Overview Historical Revenue, by Segment ▪ Resilient revenue base Payment Services Latin America CAGR 2017- ($ in millions) 1Q21 was ~11% ▪ Long-term contracts with financial institutions, merchants, $528 corporations and governments $487 $51
Slide 12: Regional Operating Scale Driving Industry Leading Margins and Financial Results
Regional Operating Scale Driving Industry Leading Margins and Financial Results Operating Scale As a Key Strategic Advantage Adjusted EBITDA(1) ($ in millions) $253 ▪ Operating presence in 11 countries; headquartered in San Juan, $240 $226 Puerto Rico $212 − Commercial presence in 26 countries $178
Slide 13: Disciplined Approach to Capital Deployment
Disciplined Approach to Capital Deployment • Maintenance capital expenditures of ~$20-$25M Priority – Invest for • Growth capital expenditures of ~$20-$25M* Growth, Internal & M&A • Potential acquisition targets typically up to $100M ‒ Revolver capacity of $125M Target Leverage of • Capacity of 4.0x
Slide 14: Attractive Secular Industry Trends
3 Attractive Secular Industry Trends
Slide 15: Industry Tailwinds
Industry Tailwinds Target Markets are Dominated by Cash1 • There is a significant growth opportunity in Core LatAm markets and Puerto Rico in Mature Market Key Regions LatAm High-Low the shift towards non-cash Proxy payments. Cash 13% Cash 20% Cash Cash 38% • Cash continues to represent 55% Cash Cas
Slide 16: Significant Opportunity in Large, Underpenetrated Regional Market
Significant Opportunity in Large, Underpenetrated Regional Market Bank Account Penetration Among Adults by Region1 • Increasing proportion of banked customers from previously unbanked population 94% % Total Adult Population 69% 62% • Shift from paper (cash & check) to electronic 51% 51% 46% forms of
Slide 17: And Benefit from Revitalization of Puerto Rico
… And Benefit from Revitalization of Puerto Rico • Promesa plan includes $83 billion over 15 years(1) Rebuilding and Relief • FEMA funds of $13B for electrical grid and education awarded in September 2020 Funds • Water and wastewater funds of $3.7B awarded in January 2021 • HUD funds of $8.2B releas
Slide 18: Comprehensive and Scalable Service Offering
4 Comprehensive and Scalable Service Offering
Slide 19: Comprehensive Suite of Value-Adding Payments Services
Comprehensive Suite of Value-Adding Payments Services … PR │ LatAm ▪ Issuing, acquiring & switch modules ▪ End-to-end platform to issue, route, authorize, settle and administer card programs ▪ Comprehensive POS and Internet card payment solutions ▪ Analytics-driven fraud monitoring & detection platf
Slide 20: With Growing Portfolio of Digital Payments Solutions
... With Growing Portfolio of Digital Payments Solutions … P2P/B payments service and acquiring platform P2B platform allows merchants to receive Own and operate PIN debit mobile payments from registered ATH debit card network enabling merchants to accept users ATH debit cards +1.5M +35k +340M
Slide 21: Aligned Strategic Growth Initiatives
5 Aligned Strategic Growth Initiatives
Slide 22: Aligned Strategic Initiatives to Drive Growth
Aligned Strategic Initiatives to Drive Growth Payment Services Puerto Rico & Merchant Acquiring Payment Services LatAm Business Solutions Caribbean Leverage local capability to Create leading digital payment Convert license-based to develop market specific experience by continuously processing produ
Slide 23: And a Commitment to Environment, Social and Governance Priorities
… And a Commitment to Environment, Social and Governance Priorities* Evertec is committed to conducting our business operations in a manner Environment that is compatible and balanced with the communities that we serve and promoting efforts that reduce our environmental footprint and use of natural
Slide 24: Appendix
A Appendix
Slide 25: Non-GAAP Reconciliation Summary
Non-GAAP Reconciliation Summary 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 m
Slide 26: Non-GAAP Reconciliation Annual Results Summary
Non-GAAP Reconciliation Annual Results Summary GAAP Net Income to Adjusted EBITDA ($ in millions) 2017 2018 2019 2020 1Q21 LTM $ Net Income $ 55.4 $ 86.6 $ 103.7 $ 104.9 118.2 Income tax expense (benefit) 4.8 12.6 13.0 19.0 19.2 Interest expense, net 29.1 29.3 27.6 23.5 22.7 Depreciation and amortiz
Slide 27: Non-GAAP Reconciliation Summary
Non-GAAP Reconciliation Summary Free Cash Flow ($ in millions) 2017 2018 2019 2020 1Q21 LTM Operating Cash Flows $ 145.8 $ 172.7 $ 179.9 $ 199.0 $ 199.9 Capital Expenditures (1) (33.5 $ (41.3) (59.9) (48.6) (55.9) Free Cash Flow (2) $ 112.3 $ 131.4 $ 120.0 $ 150.4 $ 144.0 Notes: (1) Capital expendit
Slide 28: Non-GAAP Reconciliation Summary
Non-GAAP Reconciliation Summary Net Debt to Adjusted EBITDA ($ in millions) 2017 2018 2019 2020 1Q21 LTM Unrestricted Cash ($50.4) ($69.9) ($111.0) ($202.6) ($156.4) Total Debt 624.7 545.3 533.4 501.0 479.5 Net Debt $574.3 $475.4 $422.4 $298.4 $323.1 Adjusted EBITDA LTM 178.0 212.5 226.2 240.5 253.1
Slide 29: Non-GAAP Reconciliation
Non-GAAP Reconciliation Segment Revenues and Adjusted EBITDA ($ in millions) Twelve months ended March 31, 2021 Payment Payment Services - Merchant Business Corporate and Services - Latin Total Puerto Rico & Acquiring, net Solutions Other(1) America Caribbean Revenues $ 131.1 $ 88.0 $ 115.5 $ 239.6
Slide 30: ome evertec
ome evertec e Technology that speaks your language