We are dead set on what we said at the time of the announcement, which is we're fully committed to dual headquarters in Atlanta and Columbus. In the Issuer Solutions business, the conversion of the Capital One Walmart portfolio earlier this month, provide this line of sight to improve growth entering the fourth quarter. Global payments also had revenue of about $4 billion last year. So I actually think it looks a lot to be honest, the way Global Payments did on the merchant side. Before I begin, I would like to welcome Paul as the new Chief Financial Officer of Global Payments. We're thrilled to have the opportunity to partner with Desjardins in Canada. From a timing point of view, I mean we obviously want to make sure, I think the balance sheet is in a very happy place as Cameron alluded, 2.5 times leverage gives us a lot of capability. 2078 0 obj <>stream Adjusted operating margin expanded 80 basis points to 33.8% and adjusted earnings per share increased 18% to $1.70 or approximately 20% on a constant currency basis. So I don't know that it's a different point of view. I mean congrats on the Citi partnership, I just -- I guess I just want to understand it, what exactly you're going to be executing there. 2053 0 obj <> endobj So when we compare that. And just as my follow up. And also what types of deals you're looking for? [G�YG�ZGCDkG�qG�RDG�qGG� �����h��`���@��ֈ&������OӁ@����a� �������Y���Y���ى1�ٍ� �Y.��>G��>$@���2iF�(�f�1@Z��!O 9,v�U�� ��m We expect this transaction to close by early 2020. reflecting consistent execution in this business. GAAP. We also expect adjusted earnings per share in a range of $6.12 to $6.20 reflecting growth of 18% to 20% over 2018. Yeah. TSYS is a member of The Civic 50 and was named one of the 2018 World’s Most Ethical Companies by Ethisphere magazine. In the midst of the largest integration we have undertaken to date, we again delivered double-digit revenue growth, expanded adjusted operating margin by 80 basis points and produced adjusted earnings-per-share growth of 18%. Good morning and welcome to Global Payments third quarter 2019 conference call. ... Net revenue grew 8.1% for the quarter which was … Columbus of course also is the heart of the Issuer business where the two companies really don't overlap from a competitor point of view before we did the deal in the first place, rather that's really more in the merchant segment. Returns as of 01/14/2021. So I think that's just as further validation. Lastly in the Consumer Solutions business, we are building momentum as we expand our digital product offerings, including our partnership with Samsung and realized benefits from recent distribution wins and renewals. Perhaps just starting on the TSYS side, you talked about already having taken the actions to achieve the $100 million of cost takeout in 2020. This leverage position coupled with our expected strong free cash flow generation provides the new Global Payments with significant capacity to invest in the business as we continue to advance our strategy and execute on our capital allocation priorities. I'm just curious, Jeff, about any early go-to-market experience you've had combining your merchant business and TSYS' Issuer processing business in Europe, which was definitely a big call out when you announced the transaction? So Columbus is really at the heart of the company at the end of the day. Our key leaders from TSYS are now fully integrated into those overall leadership teams in those go-to-market channels. So we feel good about how the rest of Asia is holding up as a macro matter, notwithstanding obviously the slight disruptions in Hong Kong we've had to absorb in the P&L. We have the most comprehensive software-driven solutions globally with full omnichannel capabilities, the broadest market reach and enhanced exposure to faster growth geographies. I could not be more excited about the future opportunities for all of our stakeholders. No. Europe came in significantly better than we expected both on revenue and cash EBIT. And just talk about what you've really priced in around, the opportunity on pricing upside into your guidance and your synergies and is there more of an opportunity there? Now the numbers at this point aren't going to be dramatic, but certainly they are providing a little bit of a nice tailwind in the merchant business within TSYS. So I do think as we look across the TSYS portfolio over the course of time, there may be some opportunities to rationalize pricing across the channels that we operate legacy Global Payments and TSYS collectively. Our next question comes from Eric Wasserstrom of UBS. The exceptional of our technologies, particularly in one of the most competitive markets that you can have, which is e-commerce and omnichannel business. So I think that was driven strategically less 5G what a payback might do or more rather by the means and mode of competition in those businesses means that you need to sell all those things or if you have reduced to just selling commoditize payments processing at the lowest possible price, which is not that interesting from our point of view. In fact, as Jeff detailed, our revenue enhancement initiatives are already under way. I guess first of all just on TSYS, I mean you laid it out extremely well. Bloomberg the Company & Its Products The Company & its Products Bloomberg Terminal Demo Request Bloomberg Anywhere Remote Login Bloomberg Anywhere Login Bloomberg Customer Support Customer Support Second, we are already engaged in preliminary discussions with our existing global bank partners across three continents on issuer processing opportunities for TSYS. We expect revenue growth to accelerate in the fourth quarter across all three legacy TSYS businesses. These results were achieved while making significant progress on integration, contributing substantially to an increase in our expected revenue and cost savings expectations just a few weeks post close. We've just seen a little better opportunity across all three of the primary areas where we expect to realize synergies from the transaction as an expense matter. Is that a correct interpretation or are you just simply giving us more insights into how it fits into the broader integration strategy? Your line is open. As customers move to cloud-based solutions, we believe that Global Payments can enhance the development of next generation products and services. Total System Services has 12,820 employees across 13 locations and $4.03 B in annual revenue in FY 2018. So I really think it's the experience that we have and our ability to work collaboratively together. Our differentiated strategy at Netspend consists of product extensions into P2P and B2B segments as well as select international expansion. I just want to get a better sense of how we should think about the components of growth for merchant with TSYS? And the revenue opportunities, David that I hadn't considered such as enabling some of the bigger retail brands that TSYS has on the issuing side in Europe to become more of a payment facilitation mechanism and enabled around digital wallets using issuer and acquirer capabilities, which is actually something I really hadn't thought about that in May, but certainly heard loud and clear from some of the consumer brands who are already on TSYS when we were there a couple of weeks ago. With TSYS, we deepen our competitive mode and confirm the value of our ecosystem across each element of our strategy. Thank you. So I actually think it's a continuation, Eric, of the TSYS we laid out in in May. Tien-tsin, as you know, our focus tends to be small-to-medium sized businesses. We also did see one area of direct overlap between Global and TSYS which is in the merchant business. Adjusted operating margin of 33.9% improved slightly relative to the prior year, as outstanding execution and expense discipline offset headwind from both disruptions in Hong Kong and foreign currency exchange rates. The momentum we have in our business coupled with the significant progress we have made on integration, bolsters our confidence in the future and more specifically, the accretion expectations we had for the TSYS merger at the time of announcement in May. I think the opportunities are right there too. Thanks very much. “We now expect adjusted net revenue plus network fees for 2019 to range from $5.60 billion to $5.63 billion, reflecting growth of 41% to 42% over 2018. And then I guess the other part of TSYS, am I right to understand about $100 million cost synergy run rate already in Q4? I wouldn't suggest that that's a meaningful aspect of how we think about driving revenue enhancements by combining our business. TSYS (1) Net Revenue Adjustments (2) Earnings Adjustments (3) Non-GAAP. And so, the people that were involved on the TSYS side selling those products just were reinvigorated or was there a bigger strategy that was kind of being put in place post kind of the second quarter, which was a little bit disappointing? Sure. There are all sorts of matching that we can do on issuing and acquiring to get enhanced authentication services in e-commerce and omnichannel capabilities that we also discuss with our partners when we're there on Europe a couple of weeks ago. Some of the comments made refer to non-GAAP financial measures such as adjusted net revenue, adjusted net revenue plus network fees, adjusted operating margin and adjusted earnings per share, which we believe are more reflective of our ongoing performance. Net income attributable to TSYS common shareholders was $136.4 million, a decrease of 43.7%. We want to continue to serve the customers and partners that we have in that channel extraordinarily well as I think we have historically. The non-GAAP information for 2019 is presented on a combined basis and includes TSYS results for the three and nine months ended September 30, 2019 determined in accordance with GAAP applied by TSYS and presented with Global Payments' adjustments to revenue and operating income and segment reporting structure. We now expect at least mid-single-digit accretion in 2020, which all else being equal, would imply adjusted earnings per share expectation in the mid-$7 range based on our stand-alone 16% to 18% growth target. It gives us confidence that we can continue to accelerate growth and maintain it in that high-single-digit target for the merchant business as we head into 2020 and beyond and hopefully even build upon that in future periods. Global Payments shares have gained 46% in 2019 to date, while TSYS has gained 47%. Yeah, Dave. In addition, TSYS' Issuer Solutions business recently completed new long-term agreements with the Central Trust Bank in North America and leading retailer Riachuelo in Brazil. [Operator Instructions] Please standby. The top 10 competitors average 4.8B. Finally, we believe we can bring Netspend into new markets based on Global Payments existing acquiring partnerships outside the United States in short order. But from kind of core underlying performance, we did have good underlying performance in 2Q, albeit some headwinds from a comp challenge standpoint. So we're fully committed to what we said. And that's that I listed few of those in my prepared remarks, but as you know, Heartland is a very big presence through Xenial and SICOM as Cameron mentioned in the restaurant channel. And as we said on the call and mentioned earlier in the Q&A, we have line of sight to $100 million of run rate synergies in 2020 already and the actions we've taken will allow those materialize next year as we continue to look to do more for 2021 and 2022. Dave, it's Cameron. Thank you. I think it can be a part of the overall merchant business, again without being a core part of where we're deploying resources trying to grow the business in the future. I guess I had a question going back to kind of the original announcement and talking about kind of this dual headquarter relationship. Operator, we will now go to questions. As for the outlook for the combined company in 2019, we now expect adjusted net revenue plus network fees to range from $5.60 billion to $5.63 billion, reflecting growth of … And this partnership capitalizes on our local market expertise and industry leading Unified Commerce Platform or UCP to provide a true omnichannel experience.We expect to be in market with Citi by year-end 2019. So we feel really good about where we are heading into 2020 with TSYS. We could not be more excited about the future as we build on our competitive advantages and payments leadership position. Adjusted operating margin in North America, expanded 130 basis points to 35.6% driven by growth in our technology-enabled businesses and consistent strong execution across the segment. I'll start there, Darrin. So when we think about the pipeline for the business, it's a little bit different than obviously the issuer business, which tends to be more large FI focused. I would say, we have had acceleration kind of as part of the deal. I was interpreting the commentary, Jeff that you made around the Consumer Solutions and in particular Netspend that's kind of indicating a renewed important strategically of that business to the combined entity going forward. We also continue to expand UCP. Thank you. Thanks. And we also expanded existing contracts with Virgin Money, Nationwide Building Society and Metro Bank. And I think as a -- given the size of merchant organization we're operating today, there is room for us to have a wholesale business. We could not be more excited about the momentum in our business and the significant wins we have recently achieved with large FIs like Desjardins and Citi, validate our pure play payments focus. Good morning. So it's just about 50%. Growth for the legacy TSYS Merchant Solutions business accelerated from the second quarter, moving back into the high-single-digits longer-term targeted range. So when they looked out in the landscape and asked who has got the very best technology and distribution capability on an omnichannel basis in the markets that they care about, we're very fortunate to be in a position that they selected us. We are also laying the groundwork so we can begin to deliver products like Vital POS, Genius and ProPay to additional geographies internationally and enable TSYS' legacy customers outside of the United States. We saw most of TSYS' large customers in Europe on the issuing side and we saw a lot of Global Payments large customers in the merchant side in Europe when Troy and I and team were there. Before turning to the financial impacts of the merger, let me start by covering the stand-alone Global Payments highlights for the quarter. And I think the governance model and the structure that we put around, the process itself I think has given us a very strong start to obviously our working relationship and the ability to drive obviously ahead of schedule expense actions that we intend to take as we look to bring these two businesses together. But just to reinforce it, number one, I think we have non-U.S. opportunities, particularly in Europe to rollout the prepaid product and I think the market is right for that in those geographies. So I just want to be explicitly clear about that. Ex-Hong Kong we grew low-double-digits in Asia, which again is consistent with our expectation for that market. So most of the revenue synergies we expect to derive from combining our two businesses are really around those particular cross-selling opportunities, bringing payroll into the existing TSYS base of customers. Thanks, Cameron. We look forward to completing the next phase of our rollout of UCP globally when we go live in the UK over the next few weeks, which we expect will support continued momentum for our Pan-European omnichannel offering. Tien-tsin Huang -- J.P. Morgan -- Analyst. Scale your revenue, simply and efficiently. I would start by saying for the combined business, it's a very small part of the overall combined business. Overall for the third quarter, the legacy TSYS business produced constant currency revenue largely consistent with the second quarter, while margin expansion was above the high-end of TSYS' previous 25 to 75 basis point target. Executive Vice president and Chief financial Officer of Global payments cross-border processing other thing that we have our... Omni solutions business accelerated from the legacy Global side, we are already under way adjacency for us payments... You not to place undue reliance on these statements to comment a little about! 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