Ncr Voyix Corporation · NYSE:VYX
Ncr Voyix — NCR — Q4 2022 Earnings Presentation
44 slides from Ncr Voyix's earnings presentation, Feb 7, 2023
Slide 1: Full Year & Q4 2022 Earnings Conference Call
1 FULL YEAR & Q4 2022 EARNINGS CONFERENCE CALL MICHAEL HAYFORD, CEO OWEN SULLIVAN, PRESIDENT & COO TIM OLIVER, CFO February 7, 2023
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
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: 2022 Overview
4 2022 OVERVIEW Strong execution advancing strategic growth initiatives Continued increase in customer satisfaction Revenue up 13% CC Y/Y Adjusted EBITDA growth of 16% CC Y/Y Recurring revenue up 20% CC Y/Y
Slide 5: 2022 Headwinds
5 2022 HEADWINDS Pandemic War in Eastern Europe Supply chain disruptions Interest rates Inflation Foreign exchange
Slide 6: Business Update
6 BUSINESS UPDATE Plan to separate NCR into two public companies Retail - Continue growth in NCR EmeraldTM Hospitality - Momentum in AlohaTM Digital Banking – Winning in the market Payments - Gaining traction across Merchant acquiring and AllpointTM networks Self-Service Banking - Acceleration in AT
Slide 7: Q4 2022 Financial Results
7 Adjusted EBITDA up 8% y/y as reported and up 14% CC Non-GAAP diluted EPS up 4% y/y as reported and up 8% CC; FX impact $(0.03) Free Cash Flow improving Total Revenue/Recurring Adjusted EBITDA Non-GAAP Diluted EPS Free Cash Flow Revenue down 1% y/y as reported and up 2% CC; Recurring revenue up 3%
Slide 8: 2022 Financial Results
8 Adjusted EBITDA up 10% y/y as reported and up 16% CC Non-GAAP diluted EPS up 2% y/y as reported and up 12% CC; FX impact $(0.22) Free Cash Flow impacted by near term investments in working capital Total Revenue/Recurring Adjusted EBITDA Non-GAAP Diluted EPS Free Cash Flow Revenue up 10% y/y as rep
Slide 9: Retail
9 $ in millions, except platform lanes RETAIL Revenue Adjusted EBITDA Q4 21 Q1 22 Q2 22 Q3 22 Q4 22 $0 $70 $140 SCO RevenuePlatform Lanes ARR Up 3% y/y Key Strategic Metrics Up 1% y/yUp 211% y/y $608 $575 $119 $128 16,973 52,849 $1,038 $1,039 $1,008 $575 $116 $1,049 $895 4,249 $992 FY22 Flat CC FY22
Slide 10: Hospitality
10 $ in millions, except site counts HOSPITALITY Revenue Adjusted EBITDA Platform Sites ARR Up 20% y/y Up 6% y/y Key Strategic Metrics $231 $238 $39 $51 24,490 $479 $239 $54 $510 29,391 $423 18,467 Payments Sites Up 64% y/y 2,957 4,851 659 FY22 22% CCFY22 10% CC
Slide 11: Digital Banking
11 $ in millions DIGITAL BANKING Revenue Adjusted EBITDA $133 Active Users ARR Up 5% y/y Up 3% y/y Key Strategic Metrics $137 $60 $52 18.0M 18.9M $465 $481 $139 $54 17.7M $428 Registered Users Up 5% y/y 25.5M 26.9M 24.5M FY22 6% CC FY22 6% CC
Slide 12: Payments & Network
12 $ in millions PAYMENTS & NETWORK* Revenue Adjusted EBITDA $295 Endpoints (in thousands) Transactions (in millions) ARR Up 24% y/y Up 27% y/y Up 8% y/y Key Strategic Metrics $336 17 $114$105 1,765 $1,170 $1,267 103 $319 $96 2,250 128 346 $74 FY22 96% CC FY22 76% CC * Fiscal 2021 includes the resul
Slide 13: Self-Service Banking
13 $ in millions, except units and percentages SELF-SERVICE BANKING Revenue Adjusted EBITDA $707 Software & Services Revenue Mix ATMaaS Units ARR Flat to prior year Up 226% y/y Up 4% y/y Key Strategic Metrics $640 66% $150$148 4,377 $1,38868% $691 $161 14,287 $1,444 68% 628 $1,337 FY22 1% CC FY22 4%
Slide 14: Free Cash Flow, Net Debt & EBITDA
14 $ in millions Free Cash Flow Q4 2022 FY 2022 Cash provided by operating activities $202 $447 Less: Total capital expenditures (88) (377) Plus: Restricted cash settlement activity 33 27 Plus: Pension contributions 55 67 Free Cash Flow $202 $164 FREE CASH FLOW, NET DEBT & EBITDA Net Debt & EBITDA Q
Slide 15: 2023 Guidance
15 In millions, except per share amounts Guidance (1) Q1 2023 FY 2023 Revenue $1,800 - $1,900 $7,800 - $8,000 Adjusted EBITDA ~$300 $1,450 - $1,550 Non-GAAP Diluted EPS (2) $0.55 - $0.60 $3.30 - $3.50 Non-GAAP Diluted EPS (prior convention) (2) $0.35 - $0.40 $2.55 - $2.75 Free Cash Flow $100 - $200
Slide 16: EBITDA Casual Walks
16 EBITDA CASUAL WALKS $ in millions External Impacts Inflation Temporal Actions Permanent Actions Volume Shift to Recurring Price M&A & Other 2021 2022 2022 2023 Outlook $1,244 $1,370 $1,370 $1,450 - $1,550
Slide 17: NCR Separation Plan
17 NCR SEPARATION PLAN(1) (1) There can be no guarantee that the planned separation will be completed in the expected form or within the expected time frame or at all. Nor can there be any guarantee that the commerce business and ATM business after a separation will be able to realize any of the pot
Slide 18: Creating Two Leading Companies
18 Independent Businesses CREATING TWO LEADING COMPANIES NCR (RemainCo) #1 Provider of POS software #1 Provider of self- checkout #1 User footprint among independent digital banking providers Retail Hospitality Digital Banking Merchant Services JetPayTerafina Attractive combination of revenue growth
Slide 19: NCR Separation Roadmap
@ncr NCR SEPARATION ROADMAP [EE COMPLETE COMPLETE ON TRACK ON TRACK ON TRACK Separation Business Align Shared Execute Reduce Financial Management Office Separation Plan Functions Leverage Launched Defined On track to complete separation activities by the end of 2023 19
Slide 20: Looking Forward
20 LOOKING FORWARD Transformation to a software-led as-a-service company Drive margin expansion Increase cash flow generation Continue to execute strategic growth initiatives Plan to separate NCR into two public companies Cost take out actions
Slide 21: Supplementary Materials
@ncr SUPPLEMENTARY MATERIALS
Slide 22: Q4 2022 GAAP Results
22 Q4 2022 Q4 2021 % Change Revenue $2,009 $2,034 (1)% Gross Margin 485 503 (4)% Gross Margin Rate 24.1% 24.7% Operating Expenses 319 380 (16)% % of Revenue 15.9% 18.7% Operating Income 166 123 35% % of Revenue 8.3% 6.0% Interest and other expense, net (83) 49 (269)% Income Tax Expense (Benefit) 92
Slide 23: Q4 2022 Operational Results
23 Q4 2022 Q4 2021 % Change as Reported % Change Adjusted Constant Currency Revenue (non-GAAP) $2,009 $2,034 (1)% 2% Gross Margin (non-GAAP) 520 549 (5)% (1)% Gross Margin Rate (non-GAAP) 25.9% 27.0% Operating Expenses (non-GAAP) 288 334 (14)% (11)% % of Revenue 14.3% 16.4% Operating Income (non-GAA
Slide 24: Non-GAAP Measures Definitions
24 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 25: Net Debt and Adjusted EBITDA Definitions
25 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 26: Constant Currency Definition
26 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 to the overall
Slide 27: GAAP to Non-GAAP Reconciliation
27 Q4 2022 Q3 2022 Q4 2021 Net (Loss) Income from Continuing Operations Attributable to NCR (GAAP) $ (7) $ 69 $ 64 Pension Mark-to-Market Adjustments 8 — (118) Transformation & Restructuring Costs 30 17 46 Acquisition-Related Amortization of Intangibles 42 44 44 Acquisition-Related Costs 1 1 6 Separ
Slide 28: GAAP to Non-GAAP Reconciliation LTM
28 Q4 2022 LTM Q3 2022 LTM Q4 2021 LTM Net (Loss) Income from Continuing Operations Attributable to NCR (GAAP) $ 64 $ 135 $ 97 Pension Mark-to-Market Adjustments 8 (118) (118) Transformation & Restructuring Costs 123 139 66 Acquisition-Related Amortization of Intangibles 172 174 132 Acquisition-Rela
Slide 29: Adjusted EBITDA by Segment
29 Q4 2022 Q3 2022 Q4 2021 Retail $ 116 $ 128 $ 119 Hospitality 54 51 39 Digital Banking 54 60 52 Payments & Network 96 114 105 Self-Service Banking 161 150 148 Corporate and Other (92) (112) (104) Eliminations (9) (11) (6) Adjusted EBITDA $ 380 $ 380 $ 353 ADJUSTED EBITDA BY SEGMENT $ in millions
Slide 30: Q4 2022 GAAP to Non-GAAP
30 Q4 QTD 2022 GAAP Transformation Costs Acquisition- related amortization of intangibles Acquisition- related costs Separation Costs Valuation Allowance & Other Tax Pension Mark- to-Market Adjustments Q4 QTD 2022 non-GAAP Product revenue $631 $— $— $— $— $— $— $631 Service revenue 1,378 — — — — — —
Slide 31: FY 2022 GAAP to Non-GAAP
31 FY 2022 GAAP Transformation Costs Acquisition- related amortization of intangibles Acquisition- related costs Separation Costs Russia Valuation Allowance & Other Tax Pension Mark-to- Market Adjustments FY 2022 non- GAAP Product revenue $2,351 $— $— $— $— $(5) $— $— $2,346 Service revenue 5,493 —
Slide 32: Q4 2022 Diluted EPS Reconciliation
32 Q4 QTD 2022 GAAP Q4 QTD 2022 non-GAAP Income (loss) from continuing operations attributable to NCR common stockholders: Income (loss) from continuing operations (attributable to NCR) $(7) $119 Dividends on convertible preferred shares $(4) $— Income (loss) from continuing operations attributable
Slide 33: FY 2022 Diluted EPS Reconciliation
33 FY 2022 GAAP FY 2022 non- GAAP Income from continuing operations attributable to NCR common stockholders: Income from continuing operations (attributable to NCR) $64 $394 Dividends on convertible preferred shares $(16) $— Income from continuing operations attributable to NCR common stockholders $
Slide 34: Q4 2021 GAAP to Non-GAAP
34 Q4 QTD 2021 GAAP Transfor mation Costs Acquisition- related amortization of intangibles Acquisition - related costs Debt Refinancing & Extinguish- ment Tax Related Items Pension mark-to- market adjustments Q4 QTD 2021 non- GAAP Product revenue $640 $— $— $— $— $— $— $640 Service revenue 1,394 — —
Slide 35: FY 2021 GAAP to Non-GAAP
35 FY 2021 GAAP Transfor mation Costs Acquisition- related amortization of intangibles Acquisition - related costs Debt Refinancing & Extinguishment Tax Related Items Pension mark- to- market FY 2021 non- GAAP Product revenue $2,193 $— $— $— $— $— $— $2,193 Service revenue 4,963 — — — — — — 4,963 To
Slide 36: Q4 2021 Diluted EPS Reconciliation
36 Q4 QTD 2021 GAAP Q4 QTD 2021 non-GAAP Income from continuing operations attributable to NCR common stockholders: Income from continuing operations (attributable to NCR) $64 $114 Dividends on convertible preferred shares (4) — Income from continuing operations attributable to NCR common stockholde
Slide 37: FY 2021 Diluted EPS Reconciliation
37 FY 2021 GAAP FY 2021 non- GAAP Income from continuing operations attributable to NCR common stockholders: Income from continuing operations (attributable to NCR) $97 $380 Dividends on convertible preferred shares (16) — Income from continuing operations attributable to NCR common stockholders $81
Slide 38: Free Cash Flow Reconciliation Quarterly
38 Q4 2022 Q3 2022 Q4 2021 Cash provided by operating activities $202 $127 $270 Less: Total capital expenditures $(88) $(115) $(106) Less: Sale of accounts receivables $— $— $(26) Plus: Pension contributions $55 $3 $4 Plus: Restricted cash settlement activity $33 $(43) $(42) Free Cash Flow $202 $(28
Slide 39: Free Cash Flow Reconciliation Annual
39 FY 2022 FY 2021 FY 2020 FY 2019 Cash provided by operating activities $447 $1,077 $641 $634 Less: Total capital expenditures $(377) $(348) $(263) $(329) Less: Sale of accounts receivables $— $(300) $— $— Plus: Pension contributions $67 $17 $89 $23 Plus: Restricted cash settlement activity $27 $(4
Slide 40: Q4 2022 Constant Currency Revenue Reconciliation
40 Q4 2022 Revenue Growth % (GAAP) Favorable (Unfavorable) FX Impact Revenue Growth % Constant Currency (non-GAAP) Retail (5) % (4) % (1) % Hospitality 3 % (2) % 5 % Digital Banking 5 % — % 5 % Payments & Network 8 % (3) % 11 % Self-Service Banking (2) % (4) % 2 % Other (16) % (2) % (14) % Eliminati
Slide 41: FY 2022 Constant Currency Revenue Reconciliation
41 FY 2022 Revenue Growth % (GAAP) Favorable (Unfavorable) FX Impact Revenue Growth % Constant Currency (non-GAAP) Retail 1 % (4) % 5 % Hospitality 9 % (1) % 10 % Digital Banking 6 % — % 6 % Payments & Network 91 % (5) % 96 % Self-Service Banking — % (4) % 4 % Corporate and Other (18) % (4) % (14) %
Slide 42: Q4 2022 Constant Currency Adjusted EBITDA Reconciliation
42 Q4 2022 Adjusted EBITDA Growth % Favorable (Unfavorable) FX Impact Adjusted EBITDA Growth % Constant Currency (non-GAAP) Retail (3) % (5) % 2 % Hospitality 38 % — % 38 % Digital Banking 4 % — % 4 % Payments & Network (9) % (4) % (5) % Self-Service Banking 9 % (4) % 13 % Corporate and Other 12 % (
Slide 43: FY 2022 Constant Currency Adjusted EBITDA Reconciliation
43 FY 2022 Adjusted EBITDA Growth % Favorable (Unfavorable) FX Impact Adjusted EBITDA Growth % Constant Currency (non-GAAP) Retail (6) % (6) % — % Hospitality 22 % — % 22 % Digital Banking 6 % — % 6 % Payments & Network 70 % (6) % 76 % Self-Service Banking (3) % (4) % 1 % Corporate and Other (8) % (
Slide 44: Thank You
THANK YOU @NCcR