Fidelity National Information Services, Inc. · NYSE:FIS

Fidelity National Information Services — Q4 2021 Earnings Presentation

42 slides from Fidelity National Information Services's earnings presentation, Feb 23, 2022

  1. Slide 1: Fourth Quarter 2021 Earnings Call

    FOURTH QUARTER 2021 EARNINGS CALL February 15, 2022

  2. Slide 2: Speakers

    SPEAKERS BUSINESS & Gary Norcross STRATEGY Chairman and Chief Executive Officer UPDATE UNLOCKING THE [] POWER OF FIS Stephanie Ferris President FINANCIAL RESULTS & Woody Woodall Chief Financial Officer GUIDANCE

  3. 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

  4. Slide 4: Business & Strategy Update

    BUSINESS & STRATEGY UPDATE

  5. Slide 5: Strong Execution Across Enterprise

    STRONG EXECUTION ACROSS ENTERPRISE Q4 RESULTS FY RESULTS TOTAL ADJUSTED ADJUSTED TOTAL ADJUSTED ADJUSTED REVENUE EPS EBITDA MARGIN REVENUE EPS EBITDA MARGIN 3.7 BILLION $1.92 13.9 BILLION $6.55 19% 46% +120 20% 44% +220 11% 11% (ORGANIC) BPS 11% 10% (ORGANIC) BPS SEGMENT REVENUE PERFORMANCE SEGMENT

  6. Slide 6: Landmark Client Wins

    LANDMARK CLIENT WINS Industry leaders look to FIS to help them innovate and grow CAPITAL BANKING MERCHANT MARKETS Top 15 Global Financial Institution Aerolíneas Argentinas Franklin Templeton Ongoing success with Modern Banking Differentiated capabilities for Establishes global Transfer Agency Platfo

  7. Slide 7: Componentized Capabilities Driving Differentiation

    COMPONENTIZED CAPABILITIES DRIVING DIFFERENTIATION Creating customizable client experiences by integrating solutions across our operating segments POWER OF FIS CUSTOMIZABLE CLIENT EXPERIENCES Banking Capital EMBEDDED GLOBAL MONEY Solutions Markets FINANCE MOVEMENT Deposits, lending, ACH, Wire, A2A o

  8. Slide 8: Awards and Priorities

    AWARDS AND PRIORITIES Focused on enhancing our client experience, new product innovation and shareholder value 2021 AWARDS 2022 PRIORITIES ❑ Componentize architecture and deliver compelling new solutions utilizing capabilities across all operating segments ❑ Expand into high-growth verticals capturi

  9. Slide 9: Unlocking the Power of FIS

    UNLOCKING THE POWER OF FIS

  10. Slide 10: Expanding Our eCommerce Value Proposition

    EXPANDING OUR ECOMMERCE VALUE PROPOSITION We are expanding our eCommerce offerings to address high-growth Platform and SMB opportunities Enterprise Platforms SMB Sophisticated capabilities Monetization of payments Automated onboarding for complex multinationals embedded within software through Acces

  11. Slide 11: FIS Is a Leader in Crypto

    FIS IS A LEADER IN CRYPTO 1 COMMERCIAL >$20B 4 of 5 100% LEADERSHIP “Card-to-Crypto”© TPV Top Crypto exchanges1 Logo retention2 2 PRODUCT 46 14 LEADERSHIP “Crypto-friendly” “Crypto-friendly” First to offer ApplePay Crypto Payment Service domestic acquiring markets payment methods for Crypto Provider

  12. Slide 12: Financial Results & Guidance

    FINANCIAL RESULTS & GUIDANCE

  13. Slide 13: Consolidated 4Q Financial Results

    CONSOLIDATED 4Q FINANCIAL RESULTS 4Q 2021 RESULTS REVENUE ($ in millions) • Revenue grew 11% reflecting strong operating segment growth 4Q21 $3,672 • Adjusted EBITDA margin expanded 120 basis points (bps) over the prior 1 year to 46.4%, and Adjusted EPS grew 19% to $1.92 4Q20 SEGMENT RESULTS 11% Gro

  14. Slide 14: Consolidated Full Year Financial Results

    CONSOLIDATED FULL YEAR FINANCIAL RESULTS FULL YEAR 2021 RESULTS REVENUE ($ in millions) • Revenue grew 11% as reported, exceeding the company’s mid-term FY21 $13,877 organic revenue growth target of 7-9% • Adjusted EBITDA margin expanded 220 basis points (bps) over the prior 1 year to 44.1% resultin

  15. Slide 15: Strong Balance Sheet and Free Cash Flow

    STRONG BALANCE SHEET AND FREE CASH FLOW RETURN OF CAPITAL FY 2021 STRONG BALANCE SHEET FY 2021 Free Cash Flow $3.6B Total Debt $20.4B Dividends Paid $961M Weighted Average Interest Rate 0.9% Shares Repurchased 15M Leverage Ratio 3.25x Share Repurchase Amount $2B Target Leverage Ratio <3.0x Achieved

  16. Slide 16: 2022 Guidance

    2022 GUIDANCE ($ millions, except per share data) METRICS 1Q 2022 FY 2022 Revenue $3,420 - $3,450 $14,780 - $14,925 Organic Revenue Growth 7% - 8% 7% - 9% Adjusted EBITDA $1,405 - $1,420 $6,625 - $6,700 Adjusted EBITDA Margin ~41% ~45% Margin Expansion ~50 bps ~50 - 100 bps Adjusted EPS $1.44 - $1.4

  17. Slide 17: Merchant Deep Dive

    MERCHANT DEEP DIVE

  18. Slide 18: Merchant Volume Growth vs. 2020 Compared to Networks

    MERCHANT VOLUME GROWTH VS. 2020 COMPARED TO NETWORKS FIS year-over-year growth tracking closely in-line with networks GLOBAL VOLUME GROWTH 50% 35% 40% 30% 17% 17% 20% 12% 4% 5% 6% 5% 5% 5% 10% -1% 0% -8% -10% -20% 1Q 2019 2Q 2019 3Q 2019 4Q 2019 1Q 2020 2Q 2020 3Q 2020 4Q 2020 1Q 2021 2Q 2021 3Q 202

  19. Slide 19: Merchant Volume Growth vs. 2019 Compared to Networks

    MERCHANT VOLUME GROWTH VS. 2019 COMPARED TO NETWORKS FIS U.S. Volume Growth accelerated 100 bps sequentially, and FIS Global Volume Growth remained constant at +23% primarily due to significant Omicron impact on UK volumes GLOBAL VOLUME GROWTH 40% 23% 30% 25% 23% 17% 20% 4% 5% 6% 5% 5% 5% 10% -1% 0%

  20. Slide 20: Pandemic Recovery Ongoing

    PANDEMIC RECOVERY ONGOING Omicron variant slowed – but did not stop – continued pandemic recovery Merchant 27% 45% 28% Revenue Mix Global Enterprise Software-led eCommerce SMB A leading global merchant Digital only merchants Physical merchants including Small merchants with acquirer before, during a

  21. Slide 21: Global eCommerce

    GLOBAL ECOMMERCE Track record of success with our ability to solve the most complex client problems Monthly Travel Volumes vs. 2019 Travel accelerated through November, $1.2 +31% +22% primarily driven by growth in cross-border then pulled back to May levels in December $7,000 0% $6,000 -10% 2021 Glo

  22. Slide 22: Enterprise

    ENTERPRISE Uniquely positioned to support large enterprise clients by creating global expansion opportunities INTERNATIONAL (UK) GROWTH Effects of Omicron in Dec. directly impacted Q4 growth 14% 14% 14% $2.0 +16% +8 % 9% 0% 3Q Oct Nov Dec 4Q 1 2021 Enterprise Revenue 4Q Revenue Growth 4Q Revenue Gro

  23. Slide 23: Software-Led Small and Medium-Sized Business (SMB)

    SOFTWARE-LED SMALL AND MEDIUM-SIZED BUSINESS (SMB) SMB growth impacted by Omicron during the back half of 4Q 1,2 PROFORMA REVENUE GROWTH VS 2019 28% 25% 25% 50% Software-led All Other Restaurant Retail SMB Verticals 18% 1Q 2Q 3Q 4Q 28% 11% ---% 23% 11% 17% -2% 17% 17% 16% -4% 11% 12% 1% -22% 1Q 2Q 3

  24. Slide 24: Summary: Global Acquiring TAM Enables Double-Digit Merchant Growth

    SUMMARY: GLOBAL ACQUIRING TAM ENABLES DOUBLE-DIGIT MERCHANT GROWTH Diverse business mix across high-growth TAM supports mid-term revenue growth outlook 1 TAM CAGR FIS MIX FIS OUTLOOK GLOBAL 2021 - 2024 2021 Revenue Mix ACQUIRING Global eCommerce 13-15% 27% Above TAM growth due 1 TAM to multinational

  25. Slide 25: Appendix

    APPENDIX

  26. Slide 26: 1Q 2022 Guidance – Additional Assumptions

    1Q 2022 GUIDANCE – ADDITIONAL ASSUMPTIONS ($ millions) METRICS 1Q 2022 GUIDANCE F/X Impact to Revenue Immaterial Corporate and Other Revenue ~$70 Depreciation and Amortization ~$310 (Excluding Purchase Price Amortization) Net Interest Expense ~$48 - $50 Effective Tax Rate ~15.0% Weighted Average Sha

  27. Slide 27: FY 2022 Guidance – Additional Assumptions

    FY 2022 GUIDANCE – ADDITIONAL ASSUMPTIONS ($ millions) METRICS FY 2022 GUIDANCE Negative F/X Impact to Revenue ~$50M Corporate and Other Revenue ~$305 Depreciation and Amortization ~$1,230 (Excluding Purchase Price Amortization) Net Interest Expense ~$190 - $200 Effective Tax Rate ~15.0% Weighted Av

  28. Slide 28: 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

  29. Slide 29: 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

  30. Slide 30: 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

  31. Slide 31: Reconciliation of GAAP to Non-GAAP Financials

    RECONCILIATION OF GAAP TO NON-GAAP FINANCIALS ($ millions, unaudited) THREE MONTHS ENDED DECEMBER 31, 2021 MERCHANT BANKING CAPITAL MARKET CORPORATE TOTAL SOLUTIONS SOLUTIONS SOLUTIONS AND OTHER Revenue $1,193 $1,667 $716 $96 $3,672 FX (2) 3 1 1 4 Constant Currency Revenue $1,191 $1,671 $717 $97 $3,

  32. Slide 32: Reconciliation of GAAP to Non-GAAP Financials

    RECONCILIATION OF GAAP TO NON-GAAP FINANCIALS ($ millions, unaudited) YEAR ENDED DECEMBER 31, 2021 MERCHANT BANKING CAPITAL MARKET CORPORATE TOTAL SOLUTIONS SOLUTIONS SOLUTIONS AND OTHER Revenue $4,496 $6,396 $2,624 $361 $13,877 FX (72) (18) (26) (2) (118) Constant Currency Revenue $4,424 $6,379 $2,

  33. Slide 33: Reconciliation of GAAP to Non-GAAP Financials

    RECONCILIATION OF GAAP TO NON-GAAP FINANCIALS ($ millions, unaudited) THREE MONTHS ENDED DECEMBER 31, 2021 Net cash provided by operating activities $961 Non-GAAP adjustments: Acquisition, integration and other payments 139 Settlement activity 75 Adjusted cash flows from operations $1,175 Capital ex

  34. Slide 34: Reconciliation of GAAP to Non-GAAP Financials

    RECONCILIATION OF GAAP TO NON-GAAP FINANCIALS ($ millions, unaudited) YEAR ENDED DECEMBER 31, 2021 Net cash provided by operating activities $4,810 Non-GAAP adjustments: Acquisition, integration and other payments 523 Settlement activity (653) Adjusted cash flows from operations $4,680 Capital expen

  35. Slide 35: Reconciliation of GAAP to Non-GAAP Financials

    RECONCILIATION OF GAAP TO NON-GAAP FINANCIALS ($ millions, unaudited) THREE MONTHS ENDED DECEMBER 31, 2021 2019 Growth Revenue $1,193 $1,090 9% Adjustment 4% Adjusted revenue growth vs. 20191 13% YEAR ENDED DECEMBER 31, 2021 2019 Growth Revenue $4,496 $4,113 9% Adjustment 1% Adjusted revenue growth

  36. Slide 36: Reconciliation of GAAP to Non-GAAP Financials

    RECONCILIATION OF GAAP TO NON-GAAP FINANCIALS ($ millions, unaudited) THREE MONTHS ENDED DECEMBER 31, 2021 2020 Net earnings (loss) attributable to FIS common stockholders $291 $103 Provision (benefit) for income taxes 125 2 Interest expense, net 46 82 Other, net (7) (20) Operating income, as report

  37. Slide 37: Reconciliation of GAAP to Non-GAAP Financials

    RECONCILIATION OF GAAP TO NON-GAAP FINANCIALS ($ millions, unaudited) YEAR ENDED DECEMBER 31, 2021 2020 Net earnings (loss) attributable to FIS common stockholders $417 $158 Provision (benefit) for income taxes 371 96 Interest expense, net 214 334 Other, net 53 (36) Operating income, as reported $1,

  38. Slide 38: Reconciliation of GAAP to Non-GAAP Financials

    RECONCILIATION OF GAAP TO NON-GAAP FINANCIALS ($ millions, unaudited) THREE MONTHS ENDED DECEMBER 31, 2021 2020 Earnings before income taxes and equity method investment earnings (loss) $416 $102 (Provision) benefit for income taxes (125) (2) Equity method investment earnings (loss) - 2 Net (earning

  39. Slide 39: Reconciliation of GAAP to Non-GAAP Financials

    RECONCILIATION OF GAAP TO NON-GAAP FINANCIALS ($ millions, unaudited) YEAR ENDED DECEMBER 31, 2021 2020 Earnings before income taxes and equity method investment earnings (loss) $789 $266 (Provision) benefit for income taxes (371) (96) Equity method investment earnings (loss) 6 (6) Net (earnings) lo

  40. Slide 40: Reconciliation of GAAP to Non-GAAP Financials

    RECONCILIATION OF GAAP TO NON-GAAP FINANCIALS ($ billions, unaudited) DECEMBER 31, 2021 2020 CHANGE GROWTH2 Backlog1 $23.0 $22.0 $1.0 6% Organic Adjustments3 2% Organic Backlog 8% 1 Backlog reflects the approximate transaction price allocated to the remaining unfulfilled performance obligations esti

  41. Slide 41: 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 MARCH 31, 2022 DECEMBER 31, 2022 LOW HIGH LOW HIGH Net earnings per share-diluted attributable to FIS common stockholders $0.15 $0.25 $2.10 $2.50 Estimated adjustments1 1.29 1.22 5.15 4.87 Ad

  42. Slide 42: Advancing the Way the World Pays, Banks and Invests

    (— | — ADVANCING THE WAY THE WORLD PAYS, BANKS AND INVESTS™

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