Aci Worldwide, Inc. · NASDAQ:ACIW
Aci Worldwide — Investor Presentation (March 2010)
38 slides from Aci Worldwide's investor presentation, Mar 9, 2010
Slide 1: ACI Investor Presentation March 2010
ACI INVESTOR PRESENTATION MARCH 2010
Slide 2: Safe Harbor For Forward-Looking Statements
This presentation contains forward-looking statements based on current expectations that involve a number of risks and uncertainties. The forward- looking statements are made pursuant to safe harbor provisions of the Private Securities Litigation Reform Act of 1995. A discussion of these forward- lo
Slide 3: Agenda
Agenda Who is ACI ACI's Marketplace Opportunity Product Overview Financial Summary 3
Slide 4: Tamar Gerber, Vice President, Investor Relations & Financial Communications
Tamar Gerber, Vice President, Investor Relations & Financial Communications
Slide 5: A global company with customers in countries
5 A global company with customers in 92 countries Strategic Centers Regional Sales Office Distributors/Sales Agents Country with ACI customers
Slide 6: Global Market Trends and Drivers
Global Market Trends and Drivers Our target market driven by growth in electronic payment transaction volumes Consolidation creates very large scale needs And inefficient platform redundancies Intense focus on fraud and risk management Continued desire to reduce costs and increase productivity Searc
Slide 7: ACI Product History
ACI Product History 1975 1982 1985 1990 1995 2000 2005 2008 BASE24-atm TRANS24 Payments Manager ICE Smart Chip Manager Proactive Risk Manager OCM24 MTS ASx Trade Finance Enterprise Banker ON/2 OpeN/2 Retail Banking Wholesale Banking Risk Management Tools & Infrastructure BASE24-eps Network Express A
Slide 8: ACI Market Share
ACI Market Share 8 BANKING 22 of the top 25 in the U.S. 4 of the top 5 in Brazil 3 of the top 5 in Australia 9 of the top 10 in Canada 7 of the top 10 in Saudi Arabia 4 of the top 10 in Malaysia 42 customers in the top 100 world banks 7 of the top 10 in India 7 of the top 10 in the U.K. 4 of the top
Slide 9: Key Trends by Region
Latin America Economic growth and "banking" of the population Replacing legacy technologies Migration to new versions X-selling risk, wholesale, back office Key Trends by Region 9 North America Continued growth in payment volumes Need for payment silo consolidation Banks "in-sourcing" to leverage th
Slide 10: Key Trends by Region
Africa Nascent economies, but large opportunity base Entry opportunity for leapfrog technologies (mobile, prepaid) ACI brand and reputation creates opportunities Key Trends by Region 10 Middle East Sophistication and economic growth Replacing legacy technologies X-sell risk wholesale, back office Mi
Slide 11: Markets with the Biggest Opportunity
Markets with the Biggest Opportunity 11 A focused strategy on strategic markets A focus on large and/or high-growth markets United States United Kingdom Canada Japan China Germany Australia France Brazil India Italy Mexico
Slide 12: Key Growth Markets - Americas
Brazil Very sophisticated payments market Old underlying platform technology in need of change-out Structural advances (e.g. ATM network sharing) are driving change IBM partnership is key in Brazil Key Growth Markets - Americas 12 United States ACI's largest market Electronic payment volumes continu
Slide 13: Key Growth Markets - EMEA
United Kingdom Very old underlying platform technology, particularly for wholesale payments and back office Regulatory drivers persist (SEPA, Faster Payments, EMV) ACI has a leadership position in retail payments and risk management Key Growth Markets - EMEA 13 Germany Very old underlying platform t
Slide 14: Key Growth Markets - Asia/Pacific
Japan Very sophisticated payments market Old underlying platforms in need of change-out Japanese banks' international aspirations will lead them to new solutions ACI will need effective partnerships to penetrate the market, including IBM Key Growth Markets - Asia/Pacific 14 China Relatively limited
Slide 15: The Agile Payments Strategy in Action
The Agile Payments Strategy in Action Be the leading provider of a unified solution that initiates, manages, secures and operates payments to maximize the total economic impact for our customers. Identified key products required for a holistic solution. Deconstructing products into software services
Slide 16: ACI Product Assets - Sample Customer
FRAUD & RISK MANAGEMENT SOLUTIONS FRAUD DETECTION ACI Proactive Risk Manager COMMON INFRASTRUCTURE & TOOLS CASE MANAGEMENT ACI Automated Case Management System COMMUNICATIONS ACI Network Express ACI Comm Services for Advanced Networking GoldenGate RETAIL PAYMENTS SOLUTIONS ACI Product Assets - Sampl
Slide 17: Multiple redundant platforms leads to excess cost and complexity
17 U.S. East Legacy Vendor Sun Solaris Australia/NZ Legacy IBM System z UK BASE24 HP Non-stop Scandanavia Outsourced Germany Inhouse IBM Sysem z Holland BASE24 HP Non-stop "Discovery" - Customer* Current Assets Example Italy BASE24 HP Non-Stop Canada BASE24-pos HP Non-stop U.S. West Outsourced Brazi
Slide 18: Clear efficiencies available from regional hub deployment
Clear efficiencies available from regional hub deployment 18 Asia Pacific BASE24-eps PRM, Back Office Latin America BASE24-eps PRM, Back Office "Strawman" - Customer Sample End State North America BASE24-eps PRM, Back Office EMEA BASE24-eps PRM, Back Office Northern Asia BASE24-eps PRM, Back Office
Slide 19: Key Benefits to the Customer
Key Benefits to the Customer Reduced overall costs due to the elimination of redundant silos for payments and risk management Increased efficiency through an integrated end-to-end solution Improved time to market for new products and services leveraging next-generation payment technologies Improved
Slide 20: General 2009 Sales Market Summary
General 2009 Sales Market Summary Demonstrated ability to renew contracts at profitable rates in 2009 Resulted in higher recurring revenue business throughout the year Impact of financial markets crisis Led to further sales cycle elongation so new contracts/new apps did not sell at the same rate as
Slide 21: Financial Review
Financial Review Scott Behrens, Chief Financial Officer
Slide 22: Calendar Year Revenue Mix
22 22 Calendar Year Revenue Mix 57% 29% 14% 16% 30% 17% 54% 24% 20% 59% 23% 57% 19% 21% 60% $318 $356 $374 $418 $406 $418 - $428
Slide 23: Customer Revenue by Industry Type
Customer Revenue by Industry Type Reduction in bank/credit union revenue due to variance related to Faster Payments license fees recognized in 2008 'Processor' segment is down due to the significant project completion for Mastercard in 2008 which did not recur in 2009 3% attrition rates across the c
Slide 24: CY 2009 Revenue Concentration
24 CY 2009 Revenue Concentration 2009 Rank 2008 Rank Channel #1 #15 Americas #2 #1 Americas #3 #2 Global #4 #48 Americas #5 #8 EMEA #6 #6 EMEA #7 #5 Americas #8 #166 Americas #9 #19 Americas #10 #3 Americas #11 #292 EMEA #12 #17 Americas #13 #14 Americas #14 #33 Americas #15 #16 Asia-Pacific #16 #12
Slide 25: Revenue Phasing is consistent over past two years
Revenue Phasing is consistent over past two years Revenue Phasing is consistent over past two years Q2 2008 revenue was higher than a normal quarter due to Faster Payments regulatory mandate in the UK Generally we see stronger revenue in the second half of the year
Slide 26: 60-Month Backlog
26 60-Month Backlog Consistent Backlog Growth Year-over-Year Monthly Recurring portion growing at a higher rate Monthly Recurring includes higher margin MLF, Maintenance, and Processing Services Stable Non-Recurring Backlog reflects ability to move projects in to GAAP revenue at the same rate that s
Slide 27: Relative Attrition by Geography and Product
27 Relative Attrition by Geography and Product 3% Global Attrition, a reduction from 4% in 2008 Relative Attrition by Channel Americas slightly higher than average EMEA and Asia-Pacific slightly lower than average Relative Attrition by Product Retail payment engine products better than the average W
Slide 28: Operating Income / EBITDA 2007-2010
28 Operating Income / EBITDA 2007-2010 Operating Income Operating EBITDA Operating EBITDA Operating EBITDA
Slide 29: Operating Income doubled over the past quarters
Operating Income doubled over the past 8 quarters Operating income also remains back-half loaded and has grown significantly as we rationalized expenses globally grown significantly as we rationalized expenses globally grown significantly as we rationalized expenses globally
Slide 30: 2010 Guidance
30 2010 Guidance Revenue Expect revenue growth even as we anticipate fewer term renewals in 2010 where revenue recognition occurs immediately Operating Income Operating income improves from the on-going focus on profitable sales and efficient expense management 15%-20% growth range Implies expense g
Slide 31: Ongoing Margin Improvement Initiatives
31 Ongoing Margin Improvement Initiatives ACI's profitability is driven by four main sources of revenue: Maintenance, Application, Services and On Demand. Maintenance Reliable & predictable revenue and cash flow stream Higher maintenance pricing on mature + sunset products or move to newer version A
Slide 32: Non-GAAP Financial Measures
Non-GAAP Financial Measures Management generally compensates for limitations in the use of non-GAAP financial measures by relying on comparable GAAP financial measures and providing investors with a reconciliation of non-GAAP financial measures only in addition to and in conjunction with results pre
Slide 33: Non-GAAP Financial Measures
Non-GAAP Financial Measures Backlog is considered a non-GAAP financial measure as defined by SEC Regulation G. Our 60-month backlog estimate represents expected revenues from existing customers using the following key assumptions: Maintenance fees are assumed to exist for the duration of the license
Slide 34: Non-GAAP Financial Measures
Non-GAAP Financial Measures Estimates of future financial results are inherently unreliable. Our backlog estimates require substantial judgment and are based on a number of assumptions as described above. These assumptions may turn out to be inaccurate or wrong, including for reasons outside of mana
Slide 35: Non-GAAP Financial Measures - Operating EBITDA
Non-GAAP Financial Measures Operating EBITDA is defined as operating income plus depreciation and amortization and non-cash stock compensation. Operating EBITDA is considered a non-GAAP financial measure as defined by SEC Regulation G. The presentation of these non-GAAP financial measures should be
Slide 36: Forward Looking Statements
Forward Looking Statements This presentation contains forward-looking statements based on current expectations that involve a number of risks and uncertainties. Generally, forward-looking statements do not relate strictly to historical or current facts and may include words or phrases such as "belie
Slide 37: Forward Looking Statements (Cont)
Forward Looking Statements (Cont) All of the foregoing forward-looking statements are expressly qualified by the risk factors discussed in our filings with the Securities and Exchange Commission. Such factors include, but are not limited to, risks related to the global financial crisis, restrictions
Slide 38: Every Second. Every Day.
Ml EVERY SECOND. EVERY DAY.