ACI Worldwide, Inc. · NASDAQ:ACIW
ACI Worldwide — Transaction Systems Architects — Investor Presentation (May 2007)
38 slides from ACI Worldwide's investor presentation, May 16, 2007
Slide 1: Transaction Systems Architects, Inc. Investor Overview May 2007
Transaction Systems Architects, Inc. Investor Overview May 2007
Slide 2: Safe Harbor For Forward-Looking Statements
Private Securities Litigation Reform Act of 1995 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
Slide 3: Presentation Topics
Presentation Topics Our Company Our Industry Our Products How We Win How We Grow Our Strategic Vision How We Measure It Risks and Obstacles
Slide 4: Key Takeaways
Key Takeaways* “TSA is in the catbird seat for global payments” – Phil Heasley, TSA CEO Best Payments Solutions Gold Standard for enterprise payments technology Comprehensive features for the payments value chain TSA plays an “honest broker” role Strong cash flow Long-term revenue growth Long-term b
Slide 5: Our Company
Our Company* TSA has a highly differentiated global presence in the payments industry Strategic Centers Regional Sales Office Distributors/Sales Agents Key Metrics Over 800 customers 84 countries, 33 offices Over 2,100 staff > 800 engineers > 180 sales staff Over 75 billion retail payments per year
Slide 6: Our Industry
Our Industry R >|
Slide 7: Our Industry Position Today and Tomorrow
Our Industry Position Today and Tomorrow* Position Today Position Tomorrow Target Segments Segments Less than 25% of the top 500 world banks have TSA solutions Leadership in U.S. wholesale banking Leadership in North American retailer segment Less than 5% presence in top 500 banks for fraud solution
Slide 8: Global Electronic Payments Growth
Global Electronic Payments Growth Transaction Growth Compound Annual Growth Rate, 2004 to 2009 12.9% 13.1% 13.1% 10.5% -3.3% 10.3% 3.2% Electronic Retail Payments Retail Transfers Wholesale Checks Total Non-Cash Real GDP Source: 2006 ACI Payments Market Forecast TSA and its industry are growing in e
Slide 9: The Wholesale Banking Segment
The Wholesale Banking Segment TSA’s highest potential growth segment , with significant international opportunities TSA is a leader in the U.S. Target is top 2000 world banks TSA currently has over 120 customers Smaller banks addressed via ACI On Demand offering In-house developed solutions Third-pa
Slide 10: The Retail Banking Segment
The Retail Banking Segment TSA is investing to win additional market share in its traditional sweet spot TSA is a global software leader Target is top 2000 world banks TSA currently has over 470 customers Smaller banks to be addressed via ACI On Demand offering 3rd-party processors In-house develope
Slide 11: The Retailer Segment
The Retailer Segment TSA offers a compelling cost advantage for payments processing to large retailers TSA has a leadership position in North America Target is top 500 global retailers TSA currently has over 100 customers Smaller retailers to be addressed via ACI On Demand offering 3rd party process
Slide 12: The 3rd-Party Processor Segment
The 3rd-Party Processor Segment TSA is replacing aging technology and consolidating platforms for payment processors TSA is the global software leader Target is top 500 global and local processors TSA currently has over 140 customers In-house developed solutions Third-party software vendors, includi
Slide 13: Our Products
Our Products
Slide 14: End-to-end Solutions for Electronic Payments
End-to-end Solutions for Electronic Payments* Re-usable payments functions that are scalable, secure and enterprise-ready Transaction Acquiring Authentication Switching Authorization Payment Middleware, connectivity, security, data synchronization, testing and simulation, etc. Infrastructure Functio
Slide 15: Our Products
Our Products TSA has a comprehensive electronic payments suite Retail Payment Engines BASE24-eps BASE24 ACI Retail Commerce Server ACI Commerce Gateway ACI Payments Manager ACI SmartChip Manager ACI Card Manager ACI Claims Manager ACI Customer Dispute Management ACI Money Transfer System ACI Enterpr
Slide 16: What Our Products Do
What Our Products Do Enterprise support for the payments value chain Retail Payment Engines Device driving Authentication Switching Authorization Interface to payment networks Stand-in processing and disaster recovery Settlement and reconciliation Reporting Customer dispute management Card managemen
Slide 17: Powering the World's Payment Systems
Powering the World’s Payment Systems TSA is the technology behind the largest payment systems in the world Retail Payment Engines Largest bank-owned ATM network in the U.S. (Bank of America) Visa Europe switch Largest merchant-acquiring business in the U.K. (Royal Bank of Scotland) Largest merchant-
Slide 18: How We Win
How We Win* End-to-end solution Investment in regulatory compliance Scale, availability and manageability Platform for payments convergence Full-service offering, including On Demand Lower cost per transaction More control for the customer over pricing, packaging and service levels More flexibility
Slide 19: How We Grow
How We Grow
Slide 20: Elements of Our Growth
Elements of Our Growth* Volumes On Demand, Services Cross-sell Share Selling capacity-based licenses in an industry where electronic payment volumes are growing Replacing aging technology, including IBM-compatible and open-systems segments, and winning in the international wholesale payments space,
Slide 21: Acquisition Strategy
Acquisition Strategy Ensure strategic clarity (link business strategy to transactions) Programmatic approach We are integrators, not aggregators Must create shareholder value Fill product gaps (retail, wholesale, fraud, tools, delivery) Extend product portfolio Extend geographic reach (A/P, LA) Leve
Slide 22: ACI's Leading, Gold Standard Payment Engines
ACI’s Leading, Gold Standard Payment Engines Payment Engine Hub Identification Authorization Authentication Switching Settlement Communications STP / Exception Management Positive Human Factors Related-Function Technologies Risk Management Fraud AML Anti-Terror Smartcard EMV Liquidity Mgt Resiliency
Slide 23: How We Measure It
How We Measure It
Slide 24: Revenue, Backlog, Operating Free Cash Flow, Adjusted EPS
Revenue - $ millions Backlog - $ millions Operating Free Cash Flow* - $ millions Adjusted Non-GAAP EPS* *Free cash flow calculated as operating cash flow minus capex, adjusted for one-time items. For an explanation of why management believes this is a useful measure and for a reconciliation to the c
Slide 25: Key Financial Metrics - Revenue
Key Financial Metrics - Revenue Revenue by Geo Revenue by Type Revenue by Product Line Product Revenue Mix Over Time FY2006 FY2006 FY2006 CY2010E 53% of TSA’s revenue recurs on a monthly basis. On Demand revenue is expected to comprise 15-20% of total revenue in 2010 Americas Int'l 18% US 34% Asia-
Slide 26: Key Financial Metrics - Profitability
EBITDA* - $ millions Operating Income - $ millions $61 $69 $71 $54 $64 $62 $72 to $87 $97 to $112 Operating margin and EBITDA are adjusted for one-time items. *EBITDA is a Non-GAAP measure. For an explanation of why management believes this is a useful measure and for a reconciliation to the closest
Slide 27: TSA's Balance Sheet and ROIC
TSA’s Balance Sheet and ROIC Assets Liabilities Return on Equity and Invested Capital 9/30/06 9/30/06 Strong, leverageable balance sheet Minimum $75 million unused line available Significant incremental borrowing capacity High return on equity and invested capital relative to industry peers Equity,
Slide 28: Increasing Shareholder Value
Increasing Shareholder Value 28% compound growth rate in market capitalization over the past 3 years $605 $703 $1,037 $1,275 Forward multiple on CY07 guidance = 18.6x Forward multiple based on stock price @ 3/31/07, and based on midpoint of adjusted non-GAAP eps guidance. 0 250 500 750 1000 1250 150
Slide 29: Deployment of Capital
Deployment of Capital Profitable Growth Global revenue initiatives (e.g., On-Demand, Professional Services, Convergence) “Go-Direct” in selected countries (e.g., Asia/Pacific and Latin America) Productivity improvements Mergers, acquisitions, divestitures, partnerships Shareholder return focus Capit
Slide 30: Risks and Obstacles
Risks and Obstacles TSA has strategies in place to help address key industry and competitive risks Customer Inertia Issue High systems switching costs Mitigation Strategy Offer compelling advantages Ensure distribution model facilitates access to deals New Competition Issue Competition likely based
Slide 31: Closing
Closing TSA is a solid investment for the long-term growth investor Best Payments Solutions Gold Standard for enterprise payments technology Comprehensive features for the payments value chain TSA plays an “honest broker” role Strong cash flow Long-term revenue growth Long-term backlog growth Levera
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Slide 33: 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 the Co
Slide 34: Forward-Looking Statements (continued)
Forward-Looking Statements (continued) Any or all of the forward-looking statements may turn out to be wrong. They can be affected by the judgments and estimates underlying such assumptions or by known or unknown risks and uncertainties. Many of these factors will be important in determining the Com
Slide 35: Forward-Looking Statements (continued)
Forward-Looking Statements (continued) The risks identified in the Company’s filings with the Securities and Exchange Commission include: Risks associated with the restatement of the Company’s financial statements; Risks associated with not having current financial information available and the Comp
Slide 36: Forward-Looking Statements (continued) Backlog Estimates
Forward-Looking Statements (continued) Backlog Estimates The Company’s 12-month and 60-month backlog estimates are based on the Company’s judgment about future events which, as described above, involve a number of risks and uncertainties. The Company estimates backlog using the methodology described
Slide 37: Reconciliation of EBITDA and Operating Free Cash Flow
Forward-Looking Statements (continued) Reconciliation of EBITDA ($ thousands) FY ended Sept 30, 2004 2005 2006 CY2007e Operating income 54,294 64,251 53,778 72,000 to 87,000 Selected one-time items Lawsuit - - 8,450 - Goodwill impairment charge - - - - Stock Option Review - - - 4,000 Operating incom
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