Fidelity National Information Services, Inc. · NYSE:FIS
Fidelity National Information Services — Q1 2019 Earnings Presentation
33 slides from Fidelity National Information Services's earnings presentation, Apr 30, 2019
Slide 1: First Quarter 2019 Earnings Call
First Quarter 2019 Earnings Call April 30, 2019 ©2019 FIS and/or its subsidiaries. All Rights Reserved.
Slide 2: Agenda
Agenda Gary Norcross, Business Summary Chairman, President and CEO Woody Woodall, Financial Summary Chief Financial Officer 2
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
Slide 4: Additional Information
Additional Information Additional Information and Where to Find It This communication is being made in respect of the proposed merger transaction between Fidelity National Information Services, Inc. (“FIS”) and Worldpay Inc (“Worldpay”). In connection with the proposed merger, FIS has filed with the
Slide 5: Business Summary
Business Summary Gary Norcross Chairman, President and CEO 5
Slide 6: First Quarter 2019 Highlights
First Quarter 2019 Highlights • ACCELERATED revenue growth • GENERATED significant margin expansion • ANNOUNCED transformative M&A transaction 6
Slide 7: Industry Leadership and Recognition
Industry Leadership and Recognition North American Leader in Most Advanced API Strategy Omnichannel and Digital among U.S. Core Banking Banking Providers 7
Slide 8: Worldpay Update
Worldpay Update • PROVEN • SIGNIFICANT • CONFIDENCE M&A strategy revenue in Q3 2019 synergy transaction opportunities closure Source: Company filings presentations, Wall Street research. (1) Based on 2018 IDC Fintech Rankings. (2) Based on number of transactions; analysis of data published in The Ni
Slide 9: Key Themes for First Quarter
Key Themes for First Quarter • Segment Highlights • Client Conference – Exceptional quarter for – Market remains focused IFS driving consolidated on modernization results – FIS offering improved – Demand for digital SLAs for digital offerings continues in GFS banking and payments 9
Slide 10: Strategic Growth Levers
Strategic Growth Levers INNOVATE DRIVE BUILD for long-term strong sales with on our global growth market-leading scale solutions 10
Slide 11: Financial Summary
Financial Summary Woody Woodall Chief Financial Officer 11
Slide 12: Consolidated Results
Consolidated Results First Quarter (Q1) 2019 ($ millions, except per share amounts) METRICS Q1 2019 YOY vs Q1 2018 Revenue $ 2,057 5.1% Organic Adj. EBITDA $ 729 3.4% Adj. EBITDA Margin 35.4% 130 bps Adj. EPS $ 1.64 9.3% For a description of non-GAAP measures and a reconciliation of GAAP to non-GAAP
Slide 13: Integrated Financial Solutions
Integrated Financial Solutions First Quarter (Q1) 2019 ($ millions) METRICS Q1 2019 YOY vs Q1 2018 Revenue $ 1,129 7.3% Organic Adj. EBITDA $ 499 10.4% Adj. EBITDA Margin 44.1% 160 bps For a description of non-GAAP measures and a reconciliation of GAAP to non-GAAP measures, see Appendix. 13
Slide 14: Integrated Financial Solutions
Integrated Financial Solutions REVENUE CONTRIBUTION ($ millions) Organic First Quarter Growth Banking and Wealth $ 530 7.2% Payments 385 9.7% Corporate and Digital 215 4.0% Integrated Financial Solutions(1) $ 1,129 7.3% (1) Amount may not sum due to rounding. For a description of non-GAAP measures a
Slide 15: Global Financial Solutions
Global Financial Solutions First Quarter (Q1) 2019 ($ millions) METRICS Q1 2019 YOY vs Q1 2018 Revenue $ 863 2.4% Organic Adj. EBITDA $ 309 1.4% Adj. EBITDA Margin 35.8% 290 bps For a description of non-GAAP measures and a reconciliation of GAAP to non-GAAP measures, see Appendix. 15
Slide 16: Global Financial Solutions
Global Financial Solutions REVENUE CONTRIBUTION ($ millions) Organic First Quarter Growth Institutional and Wholesale $ 476 (3.0)% Banking and Payments 386 9.6% Global Financial Solutions(1) $ 863 2.4% (1) Amount may not sum due to rounding. For a description of non-GAAP measures and a reconciliatio
Slide 17: Corporate and Other
Corporate and Other First Quarter (Q1) 2019 ($ millions) METRICS Q1 2019 YOY vs Q1 2018 Revenue $ 65 4.1% Organic Adj. EBITDA $ (79) n/a Corporate Expense $ 92 38.2% For a description of non-GAAP measures and a reconciliation of GAAP to non-GAAP measures, see Appendix. 17
Slide 18: Debt Review and Capital Allocation
Debt Review and Capital Allocation • Cash flow generation – Free cash flow of $249 million in Q1 2019 – 10% increase compared to prior year period • Maintaining a strong balance sheet – $9.2 billion debt outstanding as of March 31, 2019 – Effective weighted average interest rate of 3.3% • Shareholde
Slide 19: Worldpay Synergy Update
Worldpay Synergy Update • Revenue synergies of $500 million run-rate – $100 million ~12 to 18 months post-close – $400 million ~18 to 36 months post-close • Expense synergies of $400 million run-rate – Operational efficiencies of ~$200 million – Technology optimization of ~$100 million – Corporate a
Slide 20: 2019 Guidance Increased
2019 Guidance Increased FY 2019 Guidance FY 2019 Guidance METRICS (as of 2/12/19) (as of 4/30/19) Organic Revenue Growth 3.5% – 4.5% 4.0% – 4.5% Adjusted EBITDA Margin 150 – 200 bps 150 – 200 bps Expansion Adjusted EPS $7.35 – $7.55 $7.35 – $7.55 Year-over-year growth(1) 8% – 11% 8% – 11% (1) Compar
Slide 21: Why Invest in FIS
Why Invest in FIS Continued Global High-quality Strong Margin Compelling Market Scale Recurring Expansion Investment Leadership Revenue Thesis 21
Slide 22: Appendix
APPENDIX His
Slide 23: Debt Summary
Debt Summary ($ millions) Dec 31, Mar 31, Rate 2018 2019 Revolver (2023 Maturity) L+125 bps $ 208 $ 88 Undrawn revolver capacity 15 bps 3,792 3,912 Commercial Paper 2.790% (1) 250 600 2020 Notes (October) 3.625% 1,150 1,150 2021 EUR Notes (January) (2) 0.400% 572 561 2021 Notes (August) 2.250% 750 7
Slide 24: 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 of the Co
Slide 25: Forward-looking Statements
Forward-looking Statements • changes in the growth rates of the markets for our solutions; • failures to adapt our solutions to changes in technology or in the marketplace; • internal or external security breaches of our systems, including those relating to unauthorized access, theft, corruption or
Slide 26: Non-GAAP Financial Information and Reconciliation
Non-GAAP Financial Information and Reconciliation 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 s
Slide 27: Non-GAAP Financial Information and Reconciliation
Non-GAAP Financial Information and Reconciliation Adjusted revenue consists of revenue, increased to reverse the purchase accounting deferred revenue adjustment made upon the acquisition of SunGard. The deferred revenue adjustment represents revenue that would have been recognized in the normal cour
Slide 28: Non-GAAP Financial Information and Reconciliation
Non-GAAP Financial Information and Reconciliation Adjusted net earnings excludes the impact of certain costs and other transactions which management deems non- operational in nature, the removal of which improves comparability of operating results across reporting periods. It also excludes the impac
Slide 29: Organic Revenue Growth Calculation
Organic Revenue Growth Calculation First Quarter (Q1) 2019 ($ millions, unaudited) Three months ended March 31, 2019 Integrated Global Financial Financial Corporate Solutions Solutions and Other Consolidated Revenue $ 1,129 $ 863 $ 65 $ 2,057 Currency translation adjustment 1 25 - 26 Constant curren
Slide 30: Reconciliation of GAAP to Non-GAAP Financials
Reconciliation of GAAP to Non-GAAP Financials ($ millions, unaudited) Three months ended March 31, 2019 2018 Net earnings attributable to FIS common stockholders $ 148 $ 182 Provision (benefit) for income taxes 32 34 Interest expense, net 75 72 Other, net 60 6 Operating income, as reported $ 315 $ 2
Slide 31: Reconciliation of GAAP to Non-GAAP Financials
Reconciliation of GAAP to Non-GAAP Financials ($ millions, except per share amounts, unaudited) Three months ended March 31, 2019 2018 Earnings before income taxes and equity method investment earnings (loss) $ 188 $ 225 Provision (benefit) for income taxes 32 34 Equity method investment earnings (l
Slide 32: Reconciliation of GAAP to Non-GAAP Financials
Reconciliation of GAAP to Non-GAAP Financials ($ millions, unaudited) Three months ended March 31, 2019 Net cash provided by operating activities $ 294 Non-GAAP adjustments: Acquisition, integration and other payments 44 Settlement activity 56 Adjusted cash flows from operations $ 394 Capital expend
Slide 33: Reconciliation of GAAP to Non-GAAP Financials
Reconciliation of GAAP to Non-GAAP Financials Year ended December 31, 2019 Low High Consolidated GAAP revenue increase/(decrease) - 0.5% (1) Estimated adjustments 4.0% 4.0% Consolidated organic revenue increase 4.0% 4.5% Year ended December 31, 2019 Low High Net earnings margin attributable to FIS c
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