Total System Services Inc

Total System Services — Q2 2016 Earnings Presentation

25 slides from Total System Services's earnings presentation, Jul 26, 2016

  1. Slide 1: 2016 Second Quarter

    2016 SECOND QUARTER July 26, 2016 ©2016 Total System Services, Inc.® Proprietary. All rights reserved worldwide.

  2. Slide 2: Forward-Looking Statements

    2016 Second Quarter FORWARD-LOOKING STATEMENTS This slide presentation and comments made by management contain forward- looking statements including, among others, statements regarding the expected future operating results of TSYS. These statements are based on management’s current expectations and

  3. Slide 3: Use of Non-GAAP Financial Measures

    2016 Second Quarter USE OF NON-GAAP FINANCIAL MEASURES This slide presentation contains certain non-GAAP financial measures determined by methods other than in accordance with generally accepted accounting principles. Such non-GAAP financial measures include the following: net revenue, operating mar

  4. Slide 4: M. Troy Woods, Chairman and CEO

    M. Troy Woods Chairman and Chief Executive Officer ©2016 Total System Services, Inc.® Proprietary. All rights reserved worldwide. 4

  5. Slide 5: Paul Todd, Chief Financial Officer

    Paul Todd Chief Financial Officer ©2016 Total System Services, Inc.® Proprietary. All rights reserved worldwide. 5

  6. Slide 6: Consolidated Selected Financial Highlights

    2016 Second Quarter CONSOLIDATED SELECTED FINANCIAL HIGHLIGHTS (in thousands, except per share data) QTD QTD Percent YTD YTD Percent 2016 2015 Change 2016 2015 Change $1,151,587 $692,652 66.3% Total Revenues $1,890,965 $1,354,808 39.6% 794,937 622,084 27.8 Net Revenue(1) 1,466,581 1,217,868 20.4 274

  7. Slide 7: Consolidated Highlights

    2016 Second Quarter CONSOLIDATED HIGHLIGHTS 2nd Quarter Net Revenue by Segment(1) ➜ $125 million debt repayment ➜ Margin expansion of 202 basis points NetSpend North America 37% ➜ Record net revenue of $794.9 million 20% Merchant International 33% 10% Consolidated Net Revenue(1) Adjusted Operating I

  8. Slide 8: North America Segment Highlights

    2016 Second Quarter NORTH AMERICA SEGMENT HIGHLIGHTS Traditional Accounts on File ➜ Focus on client experience contributed (in millions) YOY Growth % to revenue growth 435.1 423.3 ➜ Record level of traditional AOF; Total 405.4 404.6 415.1 AOF down due to Prepaid reductions ➜ Net revenue growth from

  9. Slide 9: International Segment Highlights

    2016 Second Quarter INTERNATIONAL SEGMENT HIGHLIGHTS Traditional Accounts on File YOY Growth % ➜ Net revenue up 4.2% constant currency (in millions) and operating margin up over 330 basis points ➜ Four client extensions signed 63.1 63.3 65.1 65.5 66.0 ➜ Record traditional AOF processed; 8.4% 6.5% 8.

  10. Slide 10: Merchant Segment Highlights

    2016 Second Quarter MERCHANT SEGMENT HIGHLIGHTS Segment Net Revenue by LOB(1) YOY Growth % ➜ TransFirst integration and synergy ($ in millions) achievement are both on target $46 $50 $48 $47 $49 6% (0%) (1%) 10% 7% ➜ Strong revenue growth driven by focus on SMB market and integrated $71 $74 $74 $212

  11. Slide 11: NetSpend Segment Highlights

    2016 Second Quarter NETSPEND SEGMENT HIGHLIGHTS Gross Dollar Volume YOY Growth % ➜ Signed 10-year Blackhawk strategic ($ in billions) $9.2 partnership and 3-year CVS extension ➜ Grew direct deposit active cards by $6.6 16.6% $5.5 $5.4 $5.7 ➜ Achieved double-digit revenue growth 19.5% 22.3% 21.3% 19.

  12. Slide 12: Segment Operating Margin and Consolidated Adjusted Operating Margin (Q2)

    2016 Second Quarter SEGMENT OPERATING MARGIN AND CONSOLIDATED ADJUSTED OPERATING MARGIN Three Months Ended June 30, 2016 Adjusted Segment Adjusted Operating (1) (1) (1) Operating Income Net Revenue Margin (in thousands) North America $112,737 $297,168 37.94% International 15,751 81,771 19.26% Mercha

  13. Slide 13: Segment Operating Margin and Consolidated Adjusted Operating Margin (Six Months)

    2016 Second Quarter SEGMENT OPERATING MARGIN AND CONSOLIDATED ADJUSTED OPERATING MARGIN Six Months Ended June 30, 2016 Adjusted Segment Adjusted Operating (1) (1) (1) Operating Income Net Revenue Margin (in thousands) North America $237,525 $600,809 39.53% International 26,040 157,125 16.57% Merchan

  14. Slide 14: Q&A

    Q&A ©2016 Total System Services, Inc.® Proprietary. All rights reserved worldwide. 14

  15. Slide 15: Thank You

    THANK YOU ©2016 Total System Services, Inc.® Proprietary. All rights reserved worldwide.

  16. Slide 16: Appendix

    APPENDIX ©2016 Total System Services, Inc.® Proprietary. All rights reserved worldwide. 16

  17. Slide 17: Accounts on File Portfolio Summary

    2016 Second Quarter APPENDIX: Accounts on File Portfolio Summary (in millions) June June % June March % 2016 2015 Change 2016 2016 Change Consumer 425.3 400.5 6.2 425.3 414.8 2.5 Commercial 47.0 44.0 7.1 47.0 46.2 1.7 Other 28.8 24.0 19.6 28.8 27.8 3.7 Traditional AOF 501.1 468.5 7.0 501.1 488.8 2.5

  18. Slide 18: Non-GAAP Items – Net Revenue, Adjusted EBITDA and Adjusted EPS

    2016 Second Quarter APPENDIX: Non-GAAP Items – Net Revenue, Adjusted EBITDA and Adjusted EPS ➔ Net revenue is defined as total revenues less reimbursable items (such as postage), as well as, merchant acquiring interchange and assessment fees charged by the card associations or payment networks that

  19. Slide 19: Non-GAAP Reconciliation – Net Revenue

    2016 Second Quarter APPENDIX: Non-GAAP Reconciliation – Net Revenue (in thousands) Three Months Ended Six Months Ended 6/30/16 6/30/15 6/30/16 6/30/15 $1,151,587 $692,652 Total revenues $1,890,965 $1,354,808 66,137 70,568 Less reimbursable items 133,871 136,940 Less interchange and assessments 290,5

  20. Slide 20: Non-GAAP Reconciliation – Adjusted Segment Operating Income and Operating Margin

    2016 Second Quarter APPENDIX: Non-GAAP Reconciliation – Adjusted Segment Operating Income and Operating Margin Three Months Ended Six Months Ended (in thousands) 6/30/16 6/30/15 6/30/16 6/30/15 Adjusted segment operating income By segment: North America services (a) $112,737 $108,385 $237,525 $210,9

  21. Slide 21: Non-GAAP Reconciliation – Constant Currency Net Revenue

    2016 Second Quarter APPENDIX: Non-GAAP Reconciliation – Constant Currency Net Revenue (in thousands) Three Months Ended Six Months Ended Percentage Percentage 6/30/16 6/30/15 Change 6/30/16 6/30/15 Change Consolidated: Constant currency(1) $800,586 $622,084 28.7% $1,477,432 $1,217,868 21.3% Foreign

  22. Slide 22: Non-GAAP Reconciliation – Constant Currency Total Revenues

    2016 Second Quarter APPENDIX: Non-GAAP Reconciliation – Constant Currency Total Revenues (in thousands) Three Months Ended Six Months Ended Percentage Percentage 6/30/16 6/30/15 Change 6/30/16 6/30/15 Change Consolidated: Constant currency(1) $1,157,633 $692,652 67.1% $1,902,607 $1,354,808 40.4% For

  23. Slide 23: Non-GAAP Reconciliation – EBITDA and Adjusted EBITDA

    2016 Second Quarter APPENDIX: Non-GAAP Reconciliation – EBITDA and Adjusted EBITDA (in thousands) Three Months Ended Six Months Ended 6/30/16 6/30/15 6/30/16 6/30/15 Net income : As reported (GAAP) $71,748 $83,375 $164,156 $162,274 Adjust for: Deduct: Equity in income of equity investments (6,278) (

  24. Slide 24: Non-GAAP Reconciliation – Adjusted EPS

    2016 Second Quarter APPENDIX: Non-GAAP Reconciliation – Adjusted EPS Three Months Ended Six Months Ended (in thousands, except per share data) 6/30/16 6/30/15 6/30/16 6/30/15 Income from continuing operations available to TSYS common shareholders: As reported (GAAP) (a) $69,708 $82,839 $160,336 $160

  25. Slide 25: Non-GAAP Reconciliation – Trailing Twelve Months EBITDA and Adjusted EBITDA

    2016 Second Quarter APPENDIX: Non-GAAP Reconciliation – Trailing Twelve Months EBITDA and Adjusted EBITDA Trailing Twelve (in thousands) Months Ended 6/30/2016 Net Income $370,923 Adjusted for: Deduct: Discontinued operations (1,411) Deduct: Equity in Income of Equity Investments (25,003) Add: Incom

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