Ncr Voyix Corporation · NYSE:VYX
Ncr Voyix — NCR — Q1 2020 Earnings Presentation
28 slides from Ncr Voyix's earnings presentation, Apr 30, 2020
Slide 1: Q1 2020 Earnings Conference Call
Q1 2020 EARNINGS CONFERENCE CALL MICHAEL HAYFORD, PRESIDENT & CEO OWEN SULLIVAN, COO ANDRE FERNANDEZ, CFO April 30, 2020 1
Slide 2: Notes to Investors: Forward-Looking Statements
NOTES TO INVESTORS FORWARD-LOOKING STATEMENTS. Comments made during this conference call and in these materials contain “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, pursua
Slide 3: Notes to Investors: Non-GAAP Measures
NOTES TO INVESTORS NON-GAAP MEASURES. While NCR reports its results in accordance with generally accepted accounting principles in the United States (GAAP), comments made during this conference call and in these materials will include or make reference to certain "non-GAAP" measures, including: sele
Slide 4: COVID-19 Update
COVID-19 UPDATE • Q1 2020 impacted by COVID-19 and Global Fulfillment Center outage • Expect COVID-19 to impact at least the remainder of 2020 • Build cash reserve to improve financial liquidity and flexibility ◦ Taking steps to preserve cash ◦ Issued $400M senior unsecured notes due in 2025 • Seeki
Slide 5: Q1 2020 Overview
Q1 2020 OVERVIEW Managing through COVID-19 UNCERTAINTY Overall Revenue down, but REVENUE GROWTH in Banking RECURRING REVENUE up 7% CC Solid Revenue Growth in SOFTWARE and SERVICES STRONG LIQUIDITY Position 5
Slide 6: Q1 2020 Financial Results
Q1 2020 FINANCIAL RESULTS Revenue FX Impact Adjusted EBITDA $(21) million $1.54 $218 $1.50 $188 billion million billion million Q1 2019 Q1 2020 Q1 2019 Q1 2020 Revenue down 2% as reported and down 1% CC; Adjusted EBITDA down 14%; COVID-19 & Nashville outage negatively COVID-19 & Nashville outage neg
Slide 7: Banking
BANKING $ in millions Revenue Operating Income $763 $758 $103 $95 Q1 2019 Q1 2020 Q1 2019 Q1 2020 Key Highlights • Revenue up 3% CC due to growth in software and services partially offset by a 5% CC decrease in ATM revenue. The ATM revenue decline was mainly the result of COVID-19 border closures an
Slide 8: Retail
RETAIL $ in millions Revenue Operating Income $511 $472 $26 $5 Q1 2019 Q1 2020 Q1 2019 Q1 2020 Key Highlights • Revenue down 7% CC driven by a decline in hardware revenue partially offset by growth in software and services revenue. The decline in hardware due to large customer rollout in PY as well
Slide 9: Hospitality
HOSPITALITY $ in millions Revenue Operating Income $193 $169 $16 ($9) Q1 2019 Q1 2020 Q1 2019 Q1 2020 Key Highlights • Revenue down 12% CC mainly driven by lower hardware. This decline was largely attributable to the Nashville outage and the COVID-19 pandemic. • Operating Income down driven by the r
Slide 10: Supplemental Revenue
SUPPLEMENTAL REVENUE $ in millions Q1 2020 Q1 2019 % Change % Change CC Software $474 $467 1% 3% Services $636 $585 9% 10% Hardware $393 $484 (19%) (18%) ATM $218 $236 (8%) (5%) SCO/POS $175 $248 (29%) (29%) Total Revenue $1,503 $1,536 (2%) (1%) Recurring Revenue $802 $759 6% 7% Recurring Revenue %
Slide 11: Free Cash Flow, Net Debt & EBITDA
FREE CASH FLOW, NET DEBT & EBITDA $ in millions Free Cash Flow Q1 2020 Q1 2019 Cash provided by Operating Activities $61 ($16) Total capital expenditures ($79) ($65) Cash used in Discontinued Operations $3 ($6) Free Cash Flow ($15) ($87) Net Debt & EBITDA Q1 2020 Q4 2019 Q1 2019 Debt $4,385 $3,559 $
Slide 12: Proactive Steps to Manage Through COVID-19 Pandemic
PROACTIVE STEPS TO MANAGE THROUGH COVID-19 PANDEMIC • Expect COVID-19 to impact at least 2020 performance • Building a cash reserve • Increased financial flexibility • Stay strong and build for future • Helping our customers manage through the pandemic • Long-term strategy remains intact 12
Slide 13: Supplementary Materials
SUPPLEMENTARY MATERIALS 13
Slide 14: Q1 2020 GAAP Results
Q1 2020 GAAP RESULTS $ in millions, except per share amounts % Change Q1 2020 Q1 2019 As Reported Revenue $1,503 $1,536 (2%) Gross Margin 397 411 (3)% Gross Margin Rate 26.4% 26.8% Operating Expenses 320 311 3% % of Revenue 21.3% 20.2% Operating Income 77 100 (23)% % of Revenue 5.1% 6.5% Interest an
Slide 15: Q1 2020 Operational Results
Q1 2020 OPERATIONAL RESULTS $ in millions, except per share amounts % Change % Change Q1 2020 Q1 2019 As Constant Reported Currency Revenue $1,503 $1,536 (2%) (1%) Gross Margin (non-GAAP) 404 425 (5)% (3)% Gross Margin Rate (non-GAAP) 26.9% 27.7% (80 bps) (60 bps) Operating Expenses (non-GAAP) 300 2
Slide 16: Non-GAAP Measures
NON-GAAP MEASURES While NCR reports its results in accordance with generally accepted accounting principles (GAAP) in the United States, comments made during this conference call and in these materials will include non-GAAP measures. These measures are included to provide additional useful informati
Slide 17: Non-GAAP Measures: Constant Currency, Net Debt, Adjusted EBITDA
NON-GAAP MEASURES Constant Currency. NCR presents certain financial measures, such as period-over-period revenue growth, on a constant currency basis, which excludes the effects of foreign currency translation by translating prior period results at current period monthly average exchange rates. Due
Slide 18: Non-GAAP Measures
NON-GAAP MEASURES NCR management's definitions and calculations of these non-GAAP measures may differ from similarly-titled measures reported by other companies and cannot, therefore, be compared with similarly-titled measures of other companies. These non-GAAP measures should not be considered as s
Slide 19: GAAP to Non-GAAP Reconciliation
GAAP TO NON-GAAP RECONCILIATION $ in millions Net Income from Continuing Operations (GAAP) to Adjusted EBITDA (non-GAAP) Q1 2020 Q1 2019 Q4 2019 LTM LTM LTM Q1 2020 Q1 2019 Net (Loss) Income from Continuing Operations Attributable to NCR (GAAP) $ 600 $ (54) $ 614 $ 23 $ 37 Pension Mark-to-Market Adj
Slide 20: GAAP to Non-GAAP Reconciliation Q1 2020
GAAP TO NON-GAAP RECONCILIATION Q1 2020 $ in millions, except per share amounts Acquisition- related Q1 QTD 2020 GAAP Transformation & amortization of Q1 QTD 2020 non- Restructuring Costs intangibles GAAP Product revenue $474 $— $— $474 Service revenue 1,029 — — 1,029 Total revenue 1,503 — — 1,503 C
Slide 21: GAAP to Non-GAAP Reconciliation Q1 2020
GAAP TO NON-GAAP RECONCILIATION Q1 2020 $ in millions, except per share amounts Q1 QTD 2020 Q1 QTD 2020 GAAP non-GAAP Income from continuing operations attributable to NCR common stockholders: Income from continuing operations (attributable to NCR) $23 $44 Dividends on convertible preferred shares (
Slide 22: GAAP to Non-GAAP Reconciliation Q1 2019
GAAP TO NON-GAAP RECONCILIATION Q1 2019 $ in millions, except per share amounts Acquisition- Q1 QTD 2019 Transformation & related Q1 QTD 2019 GAAP Restructuring amortization of non-GAAP Costs intangibles Product revenue $539 $— $— $539 Service revenue 997 — — 997 Total revenue 1,536 — — 1,536 Cost o
Slide 23: GAAP to Non-GAAP Reconciliation Q1 2019
GAAP TO NON-GAAP RECONCILIATION Q1 2019 $ in millions, except per share amounts Q1 QTD 2019 Q1 QTD 2019 GAAP non-GAAP Income from continuing operations attributable to NCR common stockholders: Income from continuing operations (attributable to NCR) $37 $73 Dividends on convertible preferred shares (
Slide 24: GAAP to Non-GAAP Reconciliation Q1 2020
GAAP TO NON-GAAP RECONCILIATION Q1 2020 $ in millions Q1 2020 Q1 2019 Operating Income Operating Income Banking $103 $95 Retail 5 26 Hospitality (9) 16 Other 5 10 Total Operating Income (non-GAAP) 104 147 Less: Transformation and restructuring costs 5 26 Acquisition-related amortization of intangibl
Slide 25: GAAP to Non-GAAP Reconciliation Q1 2020
GAAP TO NON-GAAP RECONCILIATION Q1 2020 Q1 2020 Favorable (unfavorable) FX Constant Currency Revenue Revenue Growth % Reported impact Growth % (non-GAAP) Banking 1% (2%) 3% Retail (8%) (1%) (7%) Hospitality (12%) —% (12%) Other 34% —% 34% Total Revenue (2%) (1%) (1%) 25
Slide 26: GAAP to Non-GAAP Reconciliation Q1 2020
GAAP TO NON-GAAP RECONCILIATION Q1 2020 Q1 2020 Favorable (unfavorable) FX Constant Currency Revenue Revenue Growth % Reported impact Growth % (non-GAAP) Software 1% (2%) 3% Services 9% (1%) 10% Hardware (19%) (1%) (18%) ATM (8%) (3%) (5%) SCO/POS (29%) —% (29%) Total Revenue (2)% (1%) (1%) Recurrin
Slide 27: GAAP to Non-GAAP Reconciliation Q1 2020
GAAP TO NON-GAAP RECONCILIATION Q1 2020 Favorable % Change Q1 2020 Operational Results % Change As (unfavorable) FX Constant Reported impact Currency Revenue (2%) (1%) (1%) Gross Margin (non-GAAP) (5%) (2%) (3%) Gross Margin Rate (non-GAAP) (80 bps) (20 bps) (60 bps) Operating Expenses (non-GAAP) 8%
Slide 28: Thank You
THANK YOU 28