Fidelity National Information Services, Inc. · NYSE:FIS
Fidelity National Information Services — Q2 2022 Earnings Presentation
30 slides from Fidelity National Information Services's earnings presentation, Aug 4, 2022
Slide 1: Second Quarter 2022 Earnings Call
SECOND QUARTER 2022 EARNINGS CALL August 4, 2022
Slide 2: Speakers
SPEAKERS BUSINESS & Gary Norcross STRATEGY Chairman and Chief Executive Officer UPDATE OPERATING [] PERFORMANCE Stephanie Ferris President FINANCIAL Woody Woodall Chief Financial Officer RESULTS & Erik Hoag GUIDANCE Deputy Chief Financial Officer
Slide 3: Disclosures
DISCLOSURES Forward-looking Statements Our discussions today, including this presentation and any comments made by management, contain “forward-looking statements” within the meaning of the U.S. federal securities laws. Any statements that refer to future events or circumstances, including our futur
Slide 4: Business & Strategy Update
BUSINESS & STRATEGY UPDATE
Slide 5: Resilient Business Model
RESILIENT BUSINESS MODEL TOTAL REVENUE ADJUSTED EBITDA / MARGIN ADJUSTED EPS $3.7B $1.6B $1.73 43.0% 8% ORGANIC 5% GROWTH 7% GROWTH SEGMENT PERFORMANCE BANKING SOLUTIONS MERCHANT SOLUTIONS CAPITAL MARKETS CONSTANT CURRENCY REVENUE GROWTH 6% 14% 7% $1,663M $1,302M $663M ADJ. EBITDA MARGIN 44% 47% 48%
Slide 6: 2Q 2022 Highlights and Achievements
2Q 2022 HIGHLIGHTS AND ACHIEVEMENTS Enhancing client experiences across each of our operating segments CAPITAL BANKING MERCHANT MARKETS Modern Banking Platform Guaranteed Payments Cleared Derivatives Suite Two client signings in the quarter with Industry-first solution to guarantee Next generation t
Slide 7: Strong Balance Sheet to Endure Uncertain Times
STRONG BALANCE SHEET TO ENDURE UNCERTAIN TIMES Resumed share repurchase in the quarter while reducing leverage sequentially ✓Reached target leverage of 2.9x ✓Returned ~$600M to shareholders in the second quarter through share repurchase and dividends ✓Strength of balance sheet remains differentiator
Slide 8: Operating Performance
OPERATING PERFORMANCE
Slide 9: Banking Solutions
BANKING SOLUTIONS Strategic technology investment and differentiated competitive position Key Metrics Notable Client Wins Modern Banking Platform • +6% ~44% Expanding international presence with MBP through Microsoft Azure partnership Organic Revenue Adj. EBITDA Core Consolidation Growth Margin • Co
Slide 10: Capital Markets
CAPITAL MARKETS Leading end-to-end solutions and growing mix of SaaS-based recurring revenue Key Metrics Notable Client Wins +7% ~48% Risk Analytics Manager Organic • Consolidated risk platform for existing and future requirements Revenue Adj. EBITDA Growth Margin WHY WE WIN Cleared Derivatives • In
Slide 11: Merchant Solutions
MERCHANT SOLUTIONS Leading global eCommerce and software-led capabilities Key Metrics Notable Client Wins Guaranteed Payments • Seamless integration with +14% ~47% enhanced authorization rates CC Top 3 Global Grocer Expanded Relationship Revenue Adj. EBITDA • Adding incremental banking Growth Margin
Slide 12: Merchant Sub-Segments
MERCHANT SUB-SEGMENTS Balanced growth across all client types in first half of the year Merchant 28% 45% 27% Revenue Mix Global Enterprise Software-led eCommerce SMB A leading global Digital only merchants Physical or Omnichannel Small merchants with merchant acquirer and Payrix leveraging merchants
Slide 13: Financial Results & Guidance
FINANCIAL RESULTS & GUIDANCE
Slide 14: 2Q 2022 Financial Results
2Q 2022 FINANCIAL RESULTS CONSOLIDATED FINANCIAL RESULTS REVENUE ($ in millions) • Revenue increased 8% on an organic basis, reflecting strength 2Q 22 $3,719 across all operating segments • Adjusted EBITDA increased 5%, and Adjusted EPS increased 7% to $1.73 2Q 21 7% Growth / 8% Organic SEGMENT FINA
Slide 15: Balance Sheet and Free Cash Flow
BALANCE SHEET AND FREE CASH FLOW RETURN OF CAPITAL 2Q 2022 STRONG BALANCE SHEET 2Q 2022 Free Cash Flow $806M Total Debt $18.5B Dividends Paid $287M Weighted Average Interest Rate 1.2% (1) Debt Reduction $(675)M Leverage Ratio 2.9x 2Q 2022 Highlights: • Repurchased approximately $300 million in share
Slide 16: Macro and Divest Adjustments to FY 2022 Guidance
MACRO AND DIVEST ADJUSTMENTS TO FY 2022 GUIDANCE ($ millions, except per share data) METRICS REVENUE ADJ. EBITDA ADJ. EPS (1) Macroeconomic Factors: FX Translation (2) $(200) $(90) $(0.13) (Strengthening USD) Interest Expense - - $(0.13) Divestitures $(45) $(20) $(0.03) (Non-strategic Assets) Total
Slide 17: 3Q and Full Year 2022 Guidance
3Q AND FULL YEAR 2022 GUIDANCE ($ millions, except per share data) METRICS 3Q 2022 FY 2022 Revenue $3,580 - $3,635 $14,615 - $14,700 Organic Revenue Growth 5% - 6% ~8% Adjusted EBITDA $1,595 - $1,625 $6,500 - $6,550 Adjusted EBITDA Margin ~45% ~44.5% Adjusted EPS $1.74 - $1.78 $7.00 - $7.10 For a de
Slide 18: Appendix Slides
APPENDIX SLIDES
Slide 19: 3Q 2022 Guidance – Additional Assumptions
3Q 2022 GUIDANCE – ADDITIONAL ASSUMPTIONS ($ millions) METRICS 3Q 2022 GUIDANCE Negative F/X Impact to Revenue ~$80 Corporate and Other Revenue ~$60 Depreciation and Amortization(1) ~$310 (Excluding Purchase Price Amortization) Net Interest Expense ~$80 Effective Tax Rate ~12% Weighted Average Share
Slide 20: FY 2022 Guidance – Additional Assumptions
FY 2022 GUIDANCE – ADDITIONAL ASSUMPTIONS ($ millions) METRICS FY 2022 GUIDANCE Negative F/X Impact to Revenue ~$250 Corporate and Other Revenue ~$260 Depreciation and Amortization(1) ~$1,240 - $1,245 (Excluding Purchase Price Amortization) Net Interest Expense ~$280 - $290 Effective Tax Rate ~14% W
Slide 21: Forward-Looking Statements
FORWARD-LOOKING STATEMENTS This presentation and today’s webcast contain “forward-looking statements” within the meaning of the U.S. federal securities laws. Statements that are not historical facts, including statements about anticipated financial outcomes, including any earnings guidance or projec
Slide 22: Forward-Looking Statements
FORWARD-LOOKING STATEMENTS • competitive pressures on pricing related to the decreasing number of community banks in the U.S., the development of new disruptive technologies competing with one or more of our solutions, increasing presence of international competitors in the U.S. market and the entry
Slide 23: FIS Use of Non-GAAP Financial Information
FIS USE OF NON-GAAP FINANCIAL INFORMATION Generally Accepted Accounting Principles (GAAP) is the term used to refer to the standard framework of guidelines for financial accounting in the United States. GAAP includes the standards, conventions, and rules accountants follow in recording and summarizi
Slide 24: Reconciliation of GAAP to Non-GAAP Financials
RECONCILIATION OF GAAP TO NON-GAAP FINANCIALS ($ millions, unaudited) THREE MONTHS ENDED JUNE 30, 2022 MERCHANT BANKING CAPITAL MARKET CORPORATE TOTAL SOLUTIONS SOLUTIONS SOLUTIONS AND OTHER Revenue $1,302 $1,663 $663 $91 $3,719 FX 35 10 13 2 60 Constant Currency Revenue $1,337 $1,673 $676 $92 $3,77
Slide 25: Reconciliation of GAAP to Non-GAAP Financials
RECONCILIATION OF GAAP TO NON-GAAP FINANCIALS ($ millions, unaudited) THREE MONTHS ENDED JUNE 30, 2022 Net cash provided by operating activities $1,024 Non-GAAP adjustments: Acquisition, integration and other payments (1) 145 Settlement activity (56) Adjusted cash flows from operations $1,113 Capita
Slide 26: Reconciliation of GAAP to Non-GAAP Financials
RECONCILIATION OF GAAP TO NON-GAAP FINANCIALS ($ millions, unaudited) THREE MONTHS ENDED JUNE 30, 2022 2021 Net earnings (loss) attributable to FIS common stockholders $277 $341 Provision (benefit) for income taxes 77 302 Interest expense, net 47 48 Other, net (27) (328) Operating income, as reporte
Slide 27: Reconciliation of GAAP to Non-GAAP Financials
RECONCILIATION OF GAAP TO NON-GAAP FINANCIALS THREE MONTHS ENDED JUNE 30, ($ millions, unaudited) 2022 2021 Earnings (loss) before income taxes and equity method investment earnings (loss) $357 $639 (Provision) benefit for income taxes (77) (302) Equity method investment earnings (loss) - 5 Net (ear
Slide 28: Notes to Unaudited Supplemental GAAP to Non-GAAP Reconciliations
NOTES TO UNAUDITED - SUPPLEMENTAL GAAP TO NON-GAAP RECONCILIATIONS (1) This item represents purchase price amortization expense on all intangible assets acquired through various Company acquisitions, including customer relationships, contract value, technology assets, trademarks and trade names. For
Slide 29: Reconciliation of GAAP to Non-GAAP Financials on Guidance
RECONCILIATION OF GAAP TO NON-GAAP FINANCIALS ON GUIDANCE (unaudited) THREE MONTHS ENDED TWELVE MONTHS ENDED SEPTEMBER 30, 2022 DECEMBER 31, 2022 LOW HIGH LOW HIGH Net earnings per share-diluted attributable to FIS common stockholders $0.40 $0.50 $1.75 $2.05 Estimated adjustments (1) $1.34 $1.28 $5.
Slide 30: Advancing the Way the World Pays, Banks and Invests
(— | — ADVANCING THE WAY THE WORLD PAYS, BANKS AND INVESTS™
Fidelity National Information Services — Q2 2022 Earnings Presentation on 6ix