Ncr Voyix Corporation · NYSE:VYX
Ncr Voyix — NCR — Q2 2021 Earnings Presentation
30 slides from Ncr Voyix's earnings presentation, Aug 3, 2021
Slide 1: Q2 2021 Earnings Conference Call
1 Q2 2021 EARNINGS CONFERENCE CALL MICHAEL HAYFORD, PRESIDENT & CEO OWEN SULLIVAN, COO TIM OLIVER, CFO August 3, 2021
Slide 2: Forward-Looking Statements
2 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, pursuant to the safe h
Slide 3: Non-GAAP Measures and Notes to Investors
3 NON-GAAP MEASURES. While NCR reports its results in accordance with generally accepted accounting principles in the United States, or GAAP, comments made during this conference call and in these materials will include or make reference to certain "non-GAAP" measures, including: selected measures,
Slide 4: Overview
4 Closed Cardtronics transaction; Announced LibertyX OVERVIEW Free Cash Flow of $142M in Q2 Revenue up 13% Y/Y Adjusted EBITDA growth of 40% Y/Y Adjusted EBITDA margin expansion of 330 bps to 16.8% NCR standalone revenue up 11%; Recurring revenue up 11%
Slide 5: Cardtronics Transaction Update
5 Continues to operate independently and integration activities on hold until UK antitrust regulatory approval CARDTRONICS Transaction Update Closed on June 21, 2021 Under UK antitrust regulatory review In Q2 2021, Cardtronics contributed $32M of revenue and $8M of Adjusted EBITDA for the ten days o
Slide 6: Strategic Update
6 STRATEGIC UPDATE Continue to invest in strategic platforms Accelerating NCR-as-a-Service transformation Strong momentum across all segments Retail - Gaining traction on NCR EmeraldTM and self- checkout solutions Hospitality - Momentum in AlohaTM Essentials continues Banking – Digital banking momen
Slide 7: Q2 2021 Financial Results
7 Adjusted EBITDA up 40% and margin rate up 330 bps y/y Non-GAAP EPS for NCR stand alone is $0.64 for Q2 21 Driving more linear free cash flow production Total Revenue/Recurring Adjusted EBITDA Non-GAAP Diluted EPS Free Cash Flow Revenue up 13% y/y; NCR stand alone up 11% including recurring revenue
Slide 8: Banking
8 Q2 20 Q3 20 Q4 20 Q1 21 Q2 21 $100 $125 $150 $ in millions, except registered users BANKING Revenue Adjusted EBITDA Q2 20 Q3 20 Q4 20 Q1 21 Q2 21 $0 $250 $500 $750 $1,000 Q2 20 Q3 20 Q4 20 Q1 21 Q2 21 $0 $60 $120 $180 $809$763 $130 $151 17.0% Q2 20 Q3 20 Q4 20 Q1 21 Q2 21 22.0 24.0 26.0 Digital Ba
Slide 9: Retail: Momentum in Self-Checkout and Platform Lanes
9 Momentum in Self-Checkout and Platform Lanes $ in millions, except platform lanes RETAIL Revenue Adjusted EBITDA Q2 20 Q3 20 Q4 20 Q1 21 Q2 21 $0 $250 $500 $750 Q2 20 Q3 20 Q4 20 Q1 21 Q2 21 $0 $40 $80 $120 $532 $483 $92 $49 16.0% 10.1% SCO Revenue Platform Lanes Q2 20 Q3 20 Q4 20 Q1 21 Q2 21 3,00
Slide 10: Hospitality
10 $ in millions, except Aloha Essential sites HOSPITALITY Revenue Adjusted EBITDA Q2 20 Q3 20 Q4 20 Q1 21 Q2 21 $0 $80 $160 $240 Q2 20 Q3 20 Q4 20 Q1 21 Q2 21 $0 $10 $20 $30 $215 $160 $30 $15 9.4% 14.0% Aloha Essential Sites Recurring Revenue Q2 20 Q3 20 Q4 20 Q1 21 Q2 21 2,000 4,000 6,000 Up 88% y
Slide 11: Progress on NCR 80/60/20 Goals
11 Q2 2021 Q2 2020 80% of NCR's revenue will come from software and services 69% 72% 60% of NCR's revenue will come from recurring revenue 55% 55% 20% goal for Adjusted EBITDA as a percent of revenue 16.6% 13.5% Progress on NCR 80/60/20 Goals Note - Metrics are based on NCR standalone results and ex
Slide 12: Free Cash Flow, Net Debt & EBITDA
12 Free Cash Flow Q2 2021 Q2 2020 Cash provided by operating activities $155 $229 Less: Total capital expenditures ($79) ($61) Plus: Pension contributions $5 $4 Less: Settlement Restricted Cash Activity $6 ($12) Less: Acquisition Related Items $55 $— Free Cash Flow $142 $160 $ in millions FREE CASH
Slide 13: Outlook 2H 2021
13 OUTLOOK 2H 2021 Risks • Supply chain costs including materials, labor & freight • Uncertainty on global Covid-19 recovery • Delay or success in integration of Cardtronics (1) Includes approx. $150 million of other income (expense), an effective income tax rate of approx. 26% and approx. 148 milli
Slide 14: NCR - Beyond Cash Digital Currency Capabilities
14 NCR - Beyond Cash Digital Currency Capabilities Crypto currency capabilities added to our banking and commerce platforms
Slide 15: Looking Forward
15 LOOKING FORWARD change format to boxes – Cardtronics integration – LibertyX – invest / expand – focus on customer sat – Investor Day Dec 8th or 9th Capitalize on Cardtronics opportunities Expand our solutions portfolio to include cryptocurrency capabilities Allocate capital to highest growth and
Slide 16: Supplementary Materials
16 SUPPLEMENTARY MATERIALS
Slide 17: Q2 2021 GAAP Results
17 Q2 2021 Q2 2020 % Change Revenue $1,677 $1,484 13% Gross Margin 456 372 23% Gross Margin Rate 27.2% 25.1% Operating Expenses 372 283 31% % of Revenue 22.2% 19.1% Operating Income 84 89 (6)% % of Revenue 5.0% 6.0% Interest and other expense (62) (59) 5% Income Tax Expense (Benefit) 31 (34) (191%)
Slide 18: Q2 2021 Operational Results
18 Q2 2021 Q2 2020 % Change Revenue $1,677 $1,484 13% Gross Margin (non-GAAP) 472 381 24% Gross Margin Rate (non-GAAP) 28.1% 25.7% Operating Expenses (non-GAAP) $299 $265 13% % of Revenue 17.8% 17.9% Operating Income (non-GAAP) $173 $116 49% % of Revenue 10.3% 7.8% Interest and other expense (non-GA
Slide 19: Non-GAAP Measures Definitions
19 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 information regarding NC
Slide 20: Net Debt and Adjusted EBITDA Definitions
20 Net Debt and Adjusted Earnings Before Interest, Taxes, Depreciation and Amortization (Adjusted EBITDA). NCR determines Net Debt based on its total debt less cash and cash equivalents, with total debt being defined as total short-term borrowings plus total long-term debt. NCR believes that Net Deb
Slide 21: GAAP to Non-GAAP Reconciliation
21 Q2 2021 Q1 2021 Q4 2020 Q3 2020 Q2 2020 Net (Loss) Income from Continuing Operations Attributable to NCR (GAAP) $ (9) $ 30 $ (125) $ 31 $ 64 Pension Mark-to-Market Adjustments — — 34 — — Transformation & Restructuring Costs 7 8 202 19 8 Acquisition-Related Amortization of Intangibles 23 20 19 21
Slide 22: GAAP to Non-GAAP Reconciliation (LTM)
22 Q2 2021 LTM Q1 2021 LTM Q2 2020 LTM Net (Loss) Income from Continuing Operations Attributable to NCR (GAAP) $ (73) $ — $ 576 Pension Mark-to-Market Adjustments 34 34 75 Transformation & Restructuring Costs 236 237 31 Acquisition-Related Amortization of Intangibles 83 79 85 Acquisition-Related Cos
Slide 23: Adjusted EBITDA by Segment
23 Q2 2021 Q1 2021 Q2 2020 Banking $ 151 $ 154 $ 130 Retail 92 73 49 Hospitality 30 25 15 Other 9 10 10 Adjusted EBITDA by Segment $ 282 $ 262 $ 204 Corporate and Other (1) (4) (3) Adjusted EBITDA $ 281 $ 258 $ 201 ADJUSTED EBITDA BY SEGMENT $ in millions
Slide 24: Q2 2021 GAAP to Non-GAAP Reconciliation
24 Q2 QTD 2021 GAAP Transformation Costs Acquisition- related amortization of intangibles Acquisition- related costs Tax Related Items Q2 QTD 2021 non-GAAP Product revenue $551 $— $— $— $— $551 Service revenue 1,126 — — — — 1,126 Total revenue 1,677 — — — — 1,677 Cost of products 453 — (2) — — 451 C
Slide 25: Q2 2021 EPS Reconciliation
25 Q2 QTD 2021 GAAP Q2 QTD 2021 non-GAAP Income from continuing operations attributable to NCR common stockholders: Income from continuing operations (attributable to NCR) ($9) $91 Dividends on convertible preferred shares (4) — Income from continuing operations attributable to NCR common stockholde
Slide 26: Q2 2020 GAAP to Non-GAAP Reconciliation
26 Q2 QTD 2020 GAAP Transformation Costs Acquisition- related amortization of intangibles Tax Related Items Q2 QTD 2020 non- GAAP Product revenue $481 $— $— $— $481 Service revenue 1,003 — — — 1,003 Total revenue 1,484 — — — 1,484 Cost of products 411 (3) (2) — 406 Cost of services 701 (2) (2) — 697
Slide 27: Q2 2020 EPS Reconciliation
27 Q2 QTD 2020 GAAP Q2 QTD 2020 non-GAAP Income from continuing operations attributable to NCR common stockholders: Income from continuing operations (attributable to NCR) $64 $38 Dividends on convertible preferred shares ($7) $— Income from continuing operations attributable to NCR common stockhold
Slide 28: Free Cash Flow Reconciliation
28 Q2 2021 Q1 2021 Q2 2020 Cash provided by operating activities $155 $155 $229 Less: Total capital expenditures ($79) ($61) ($61) Plus: Pension contributions $5 $4 $4 Plus: Settlement Restricted Cash Activity $6 ($5) ($12) Plus: Acquisition Related Items $55 $— $— Free Cash Flow $142 $93 $160 $ in
Slide 29: Revenue Growth Reconciliation
29 Q2 2021 Revenue Growth 13% Impact from Cardtronics 2% Revenue Growth - NCR Standalone 11% $ in millions GAAP TO NON-GAAP RECONCILIATION
Slide 30: Thank You
30 THANK YOU