Deluxe Corporation · NYSE:DLX
Deluxe — Q2 2020 Earnings Presentation
25 slides from Deluxe's earnings presentation, 2020
Slide 1: Operations Investor Presentation Second Quarter 2020
Operations Investor Presentation Second Quarter 2020 © 2020 Deluxe Enterprise Operations, Inc. Proprietary and Confidential.
Slide 2: Cautionary Statement
Cautionary Statement » This presentation highlights management’s intentions, projections, financial estimates or expectations about the company's future strategy or performance and are forward-looking in nature as defined in the Private Securities Litigation Reform Act of 1995. These items are subje
Slide 3: Deluxe Vision and Strategy
Deluxe Vision and Strategy » Become a Fortune 500 company recognized as a Trusted Business Technology leader in payments and cloud-delivered platforms. » Customers build their business on our platforms at all stages of their lifecycle and our platforms are offered on a recurring basis via our unpara
Slide 4: Deluxe Strategy - continued
Deluxe Strategy - continued “Trusted Business Technology leader in payments and cloud-delivered platforms” § Payments encompasses all of our products that help our customers pay and get paid, including our legacy check business § Cloud-delivered platforms includes hosting, data-driven marketing, pro
Slide 5: Deluxe Today and Path Ahead
Deluxe Today and Path Ahead Revenue has The Company now manages and increased for 10 reports the business based in consecutive years, four segments setting an all-time revenue Payments record in 2019 at $2.009B Cloud Solutions Promotional Solutions Checks Deluxe is transforming into a trusted, techn
Slide 6: Deluxe is a Fintech Company with Unparalleled Scale
Deluxe is a Fintech Company with Unparalleled Scale EXISTING RELATIONSHIPS WITH NEARLY: 4,000 ~4.5M ~4M Financial Institutions SMBs Consumers $2.8T 400K 150K Annual payments volume New SMBs added each year Packages shipped each day 6
Slide 7: A Compelling Investment Opportunity
A Compelling Investment Opportunity Transforming into a Adopt new go-to-market strategy, operating model, and organizational design Company of Products and Enhance cross-sell opportunities by leveraging existing customers Operating as within Checks and Promotional Solutions Market and sell our produ
Slide 8: Positioned for Success and Already Delivering Results
Positioned for Success and Already Delivering Results STRONG FINANCIAL POSITIONED FOR ALREADY DELIVERING HEALTH SUCCESS RESULTS » Attractive quarterly » Prospects in clear growth » Transformation well dividend markets underway » Bought back $320M of » High growth businesses » Right strategy and righ
Slide 9: Deluxe Helps Companies Across a Business Lifecycle
Deluxe Helps Companies Across a Business Lifecycle START YOUR BRAND YOUR GROW YOUR OPTIMIZE YOUR BUSINESS BUSINESS BUSINESS BUSINESS Checks Payroll Digital Forms Website & Solutions Payments Hosting Retail Licenses Data-Driven Packaging and IDs Print Marketing TM Marketing Trademark Merchant Filings
Slide 10: Four New Business Segments
Four New Business Segments The New Deluxe: A Company of Products & Solutions Payments Cloud Solutions Promotional Solutions Checks High Growth High Growth Moderate Growth Cash Generator Treasury Management Solutions Hosted Solutions » Business Forms » Printed Checks » Lockbox » Digital Engagement »
Slide 11: 2019 Segment Operating Results
2019 Segment Operating Results FY 2019* Revenue Adj. EBITDA Adj. EBITDA Segment ($ millions) ($ millions) Margin % DLX Total 2,009 481 23.9 Payments 270 74 27.5 Cloud 318 82 25.9 Promotional 641 100 15.6 Checks 780 399 51.2 Cost Segment % of Revenue ($ millions) Corporate 175 8.7 * Please Note: 2019
Slide 12: Payments – led by Mike Reed
Payments – led by Mike Reed Accelerate growth in digital payments, build receivables for future and expand products set within SMB cash flow management. Receiving Payments Receivables as a Service (RaaS) Security and protection Fraud Protection Aggregate all payments in an Identity Protection integr
Slide 13: The Medical Payment Exchange (MPX)
The Medical Payment Exchange (MPX) Delivering efficient electronic payments to health care providers. These payments account for 40% of all medical claim payment transactions and 88% of dental claim payments Send electronic payment and explanation of PROVIDER payment (EOP) Electronically notified an
Slide 14: Cloud Solutions – led by Garry Capers
Cloud Solutions – led by Garry Capers Grow data driven marketing and SMB services through an integrated suite of SaaS Solutions. CUSTOMER PROFILES OFFERINGS ~$35B SMBs » MyCorporation Market Size* Increasing use of digital marketing; typically remain loyal to service providers » Logo / Web Design »
Slide 15: Promotional Solutions – led by Tom Riccio
Promotional Solutions – led by Tom Riccio Enable customers to use technology to easily build their business brand and drive efficiencies to reinvest in future-state capabilities & market opportunities. Consumers: » ~$50B market; single digit growth rate » Highly competitive and fragmented market 80%
Slide 16: Checks – led by Tracey Engelhardt
Checks – led by Tracey Engelhardt Grow market share, grow revenue with existing customers and continually improve upon our competitive differentiation. » Checks’ strong cash flow generation supports higher growth businesses and One Deluxe’s capital allocation priorities » Rich pasture to cross-sell
Slide 17: Sales driven revenue growth – led by Chris Thomas
Sales driven revenue growth – led by Chris Thomas GO TO MARKET PRIORITIES APPROACH Apply digital-first mindset to drive demand across key sales channels. Become hyper-focused on Demand customer needs and vertical data to create a targeted strategy. Drive cross-sell by exposing current Generation cus
Slide 18: Consistent Revenue Growth
Consistent Revenue Growth Attractive cash returns to shareholders REVENUE Dollars in Millions $1,998 $2,009 $1,966 $1,849 $1,773 2015 2016 2017 2018 2019 Cash from Operations $310M $319M $338M $339M $287M % of cash returned to 39% 36% 36% 76% 59% shareholders * * Cash provided by operating activitie
Slide 19: Disciplined Capital Allocation
Disciplined Capital Allocation CAPITAL ALLOCATION 2015-2019 Dollars in Millions 260 118 208 214 178 11 2015-2017 2018 2019 Acquisitions Dividends / Share Repurchases 19
Slide 20: A Compelling Investment Opportunity
A Compelling Investment Opportunity Adopt new go-to-market strategy, operating model, and Transforming into a organizational design Company of Products and Enhance cross-sell opportunities by leveraging existing customers Operating as within Checks and Promotional Solutions Market and sell our produ
Slide 21: Appendix
APPENDIX © 2020 Deluxe Enterprise Operations, Inc. Proprietary and Confidential. 21
Slide 22: The Deluxe Product and Service Portfolio
The Deluxe Product and Service Portfolio Payments Cloud Solutions Promotional Solutions Checks Receivables Hosting / Other Business Essentials Personal Checks § Remittance Processing § Deluxe Rewards § Cash Management § Remote Deposit Capture § Business Hosting Services § Forms Business Checks § Pap
Slide 23: Deluxe Competitive Landscape
Deluxe Competitive Landscape Promotional Promotional Payments Payments Cloud Cloud Checks Checks Products Products • Fiserv, FIS, Global Payments • LegalZoom, BizFilings, IncNow • Web to Print and Local Printers • Harland Clarke, Main Street • Paychex, ADP, Paycor, Gusto, • Cimpress/VistaPrint, • En
Slide 24: First Quarter 2020 Segment Results
First Quarter 2020 Segment Results Better/ Q1 ’20 Q1 ‘19 (Worse) $ in millions except EPS data Revenue: Payments $77.0 $65.2 $11.8 Cloud Solutions 76.0 78.3 (2.3) Promotional Solutions 142.8 155.8 (13) Checks 190.6 199.8 (9.2) Consolidated $486.4 $499.1 $(12.7) SG&A Expense $237.2 $230.1 $(7.1) 48.8
Slide 25: deluxe
deluxe trusted business technology