SS&C Technologies (NASDAQ:SSNC) Jefferies Global TMT Conference May 7, 2013

Transcription

1 SS&C Technologies (NASDAQ:SSNC) Jefferies Global TMT Conference May 7, 2013

2 Safe Harbor Statement This presentation contains forward-looking statements, as defined by federal and state securities laws, which are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of Forward-looking statements include statements concerning plans, objectives, goals, strategies, expectations, intentions, projections, developments, future events, performance or products, underlying assumptions, and other statements which are other than statements of historical facts. In some cases, you can identify forward-looking statements by terminology such as ''may,'' ''will,'' ''should,'' hope,'' "expects,'' ''intends,'' ''plans,'' ''anticipates,'' "contemplates," ''believes,'' ''estimates,'' ''predicts,'' ''projects,'' ''potential,'' ''continue,'' and other similar terminology or the negative of these terms. From time to time, we may publish or otherwise make available forward-looking statements of this nature. All such forward-looking statements, whether written or oral, and whether made by us or on our behalf, are expressly qualified by the cautionary statements described on this message including those set forth below. All statements contained in this presentation are made only as of the date of this presentation. In addition, except to the extent required by applicable securities laws, we undertake no obligation to update or revise any forward-looking statements to reflect events, circumstances, or new information after the date of the information or to reflect the occurrence or likelihood of unanticipated events, and we disclaim any such obligation. Forward-looking statements are only predictions that relate to future events or our future performance and are subject to known and unknown risks, uncertainties, assumptions, and other factors that may cause actual results, outcomes, levels of activity, performance, developments, or achievements to be materially different from any future results, outcomes, levels of activity, performance, developments, or achievements expressed, anticipated, or implied by these forwardlooking statements. Other factors that could affect actual results, outcomes, levels of activity, performance, developments or achievements can be found under the heading Risk Factors in SS&C Technologies Holdings, Inc. s Form 10-k, filed March 1, As a result, we cannot guarantee future results, outcomes, levels of activity, performance, developments, or achievements, and there can be no assurance that our expectations, intentions, anticipations, beliefs, or projections will result or be achieved or accomplished. 2

3 SS&C Summary History Founded in 1986 NASDAQ (SSNC) since Q Recapitalization by management and Carlyle Group in 2005 Offices Mission Windsor, CT (Headquarters), New York, Boston, New Jersey, Chicago, Minneapolis, Salt Lake City, Toronto, London, Montreal, Amsterdam, Kuala Lumpur, Tokyo, Sydney, Mumbai, Grand Cayman, Bangkok, Hong Kong, Singapore Mission critical SaaS and BPO services and software for the global financial services industry Employees 4,115 as of March 31, 2013 Clients 6,000+ clients managing in aggregate, $26 trillion in assets 90% customer retention rates 1 Revenues $633MM LTM adjusted 2 revenue (including $478MM SaaS revenue) 3 93% contractually recurring revenues 4 40% LTM EBITDA margin Guidance Adjusted Revenue for 2013 of $712.0MM - $722.0MM Adjusted Net Income of $157.0MM - $160.0MM 1 Average revenue retention rates in each of the last five years of greater than 90% in software-enabled services and maintenance contracts for core enterprise products 2 Adjusted revenue represents revenue adjusted for one-time purchase accounting adjustments to fair value deferred revenue acquired in business combinations. Please see Note 1 Reconciliation of Revenue to Adjusted Revenue in the Form 8-K filed May 1, Adjusted Revenue is not a recognized measurement under GAAP, and investors should not consider Adjusted Revenue as a substitute for measures of our financial performance and liquidity as determined in accordance with GAAP, such as revenue, net income, operating income or net cash from operating activities. 3 Based on Q Contractually recurring revenues defined as software-enabled service and maintenance revenues 5 Margin based on Consolidated EBITDA less acquired EBITDA and cost savings; Acquired EBITDA and cost savings reflects the EBITDA impact of significant businesses that were acquired during the period as if the acquisition occurred at the beginning of the period and cost savings to be realized from such acquisitions. Consolidated EBITDA = net income + interest expense, net + income taxes + depreciation + amortization excluding unusual items and other adjustments. Please see Consolidated EBITDA reconciliation in the Form 10-K, filed March 1, Consolidated EBITDA is not a recognized measurement under GAAP, and investors should not consider Consolidated EBITDA as a substitute for measures of our financial performance and liquidity as determined in accordance with GAAP, such as net income, operating income or net cash provided by operating activities 3

4 SS&C Value Proposition Automation and Integration of Complex Business Processes Front to back seamless solution Middle and back office outsourcing services Enterprise scalability Secure, world-class data centers (24/7) Comprehensive security Compliance and auditing 4

5 Diverse, Blue Chip Financial Services Clients Alternative Investments Asset Management Institutional 6,000+ clients Top 10 clients ~14% of revenue¹ Client retention rates 90%+ Treasury, Banks & Custody Significant up-sell opportunity Other Significant penetration upside across new clients 1 For the year ended December 31,

6 Attractive Industry Dynamics Driving Significant Growth Opportunity Market Drivers Expense Management Hedge Fund AuM¹ ($TRN) CAGR: 20.1% Regulations Global SaaS Spend² ($TRN) Cloud / SaaS CAGR: 23.8% Transparency Operational Risk Global Financial Services IT Spend on Software & IT Services³ ($BN) CAGR: 5.2% Globalization ¹BoNY Mellon; ²IDC; ³ Gartner (Financial Services defined as Banking and Securities) 6

7 Growth Strategy Continued Focus on New Products and Technology Mobility/Web-based Solutions Expand SS&C Footprint with Cross-sell/Up-sell Selective Acquisitions Enhanced Delivery Options Business Model Embedded Growth Triggers Superior Client Support 7

8 SS&C Cloud Services Anything. Anytime. Anywhere. iphone / ipad Apps / Voice Recognition Portals Ink Chat Manage assets Update and monitor investment activities on any device. SS&C Cloud stores it Your transactions and updates are stored in the Cloud. And pushes it to your devices. Your changes automatically appear on your iphone/ipad and PC. 8

9 Mobility 9

10 Mobility 10

11 Mobility 11

12 Proprietary Technology Driven by R&D and Disciplined Acquisitions R&D M&A Select Organic Products Asset Class End-market Select Acquired Business Asset Class End-market Risk Analytics All asset classes Asset managers, Banks, Hedge funds, Insurance & Pension funds GlobeOp All Hedge Funds Web Portals Fixed Income, Real Estate Banks, Property Managers PORTIA Equities, Fixed Income, Derivatives Asset Managers CAMRA Equities, Fixed Income, FX, Loans, Derivatives Institutional Asset Managers, Insurance & Pension Funds, Alternative Investment Managers TheNextRound Private Equity, Alternative investments Alternative Investment Managers FundRunner Marathon Equities Alternative Investment Managers Financial Models Equities, Fixed Income, Derivatives Insurance & Pension Funds, Institutional Asset Managers LMS Loan Suite Loans Insurance & Pension Funds, Treasury, Banks & Credit Unions AdvisorWare Equities, Fixed Income, FX, Derivatives Alternative Investment Managers ~8% of revenue spent on R&D Acquisition philosophy: price discipline, proprietary technology, scalability 12

13 Successful Acquisition History SS&C has completed over 30 acquisitions to date Acquisition of Real-Time USA Acquisition of DBC Acquisition of Eisnerfast Acquisition of FMC Acquisition of Financial Interactive Acquisition of MarginMan Acquisition of Open Information Systems Acquisition of Achievement Technologies LLC Acquisition of Evare Acquisition of MAXIMIS business from Unisys Acquisition of Tradeware Acquisition of TheNextRound, Inc. Acquisition of Quantra Acquisition of The Savid Group Acquisition of OMR Systems Acquisition of Investment Advisory Network Acquisition of NeoVision Hypersystems Acquisition of Northport Acquisition of PORTIA Acquisition of GlobeOp Acquistion of Gravity Financial Acquisition of Hedgemetrix Acquisition of Chalke, Inc Acquisition of Mabel Systems Acquisition of Shepro Braun Acquisition of HedgeWare, Inc. Acquisition of The Brookside Corporation Acquisition of Digital Visions Acquisition of Amicorp Fund Services Acquisition of Cogent Management Acquisition of Zoologic Acquisition of Micro Design Services Acquisition of TimeShareWare Acquisition of thinkorswim Technologies, Inc. Acquisition of GIPS Acquisition of BDO Simpson Xavier Fund Administrator Acquisition of BenefitsXML 13

14 Creates a Top 4 Hedge Fund Administrator With Strong Offerings In Key Areas Hedge Fund Administrator Ranking (AuA $bn) Q $ % of total 1 State Street AIS $ % 2 Citico % 3 BNY Mellon % 4 SS&C/GlobeOp % 5 Citi % 6 Northern Trust % 7 Morgan Stanley % 8 SEI % 9 JP Morgan % 10 PNB Paribas % Top 10 $2, % Total $2, % Note: Represents Hedge Fund Assets under administration. Source: evestment s Hedge Fund Administrator Survey Q Acquisition Expands Product Offering / Capabilities Post acquisition, will allow SS&C to have substantial base across a number of fund strategies, including fixed income, volatility and active trading GlobeOp middle-office offerings will complement SS&C s core portfolio of accounting and management products and services Combined entity will provide a comprehensive array of product offerings, best in breed technologies, and complementary services under a public, independent, single platform Combined entity (a) with strong cloud based computing, mobility and sophisticated portal capabilities, backed by combined ~500 strong development organization a) Includes PORTIA. 14

15 Summary Highlights Since March 2010 IPO Quarterly Results Adjusted Revenue Adjusted Diluted EPS Highlights Attractive revenue growth Total: 85% Q Q Total: 49% Software-enabled services (SES): 110% Q Q % Continued new product introductions Global Markets Risk Web Portals Global Wealth Platform Value-enhancing acquisitions BenefitsXML Fund Services Ireland PORTIA GlobeOp Gravity Financial Hedgemetrix Expanding addressable markets Financial Markets Group 15

16 SSNC Q1 Highlights Adjusted revenue of $173.3 million Up 85.0% from Q Software-Enabled Services up 110.2% from Q % of revenue is recurring 2 EBITDA Margin of 39.6% 3 Compared to Q of 39.8% Net cash from operating activities was $20.6 million Up 57.1% over 2012 Recurring revenue 1 was $161.8 million, Annual Run Rate Basis (ARRB) was $647.0 million Up 2.9% from Q and up 92.4% from Q Paid down $45.0 million of debt. Leverage ratio Adjust revenue represents revenue adjusted for one-time purchase accounting adjustments to fair value deferred revenue acquired in business combinations. 2 Contractually recurring revenues defined as software-enabled service and maintenance revenues 3 Margin based on Consolidated EBITDA less acquired EBITDA and cost savings; Acquired EBITDA and cost savings reflects the EBITDA impact of significant businesses that were acquired during the period as if the acquisition occurred at the beginning of the period and cost savings to be realized from such acquisitions. Consolidated EBITDA = net income + interest expense, net + income taxes + depreciation + amortization excluding unusual items and other adjustments. Please see Consolidated EBITDA reconciliation in the Form 10-k, filed March 1, Consolidated EBITDA is not a recognized measurement under GAAP, and investors should not consider Consolidated EBITDA as a substitute for measures of our financial performance and liquidity as determined in accordance with GAAP, such as net income, operating income or net cash provided by operating activities 16

17 Strong Performance During All Economic Cycles Product, asset class diversity and continued market share gains drove strong results even at the height of the financial crisis ($MM) Non-Recurring 1 Recurring 1 S&P ¹ Recurring revenues defined as software-enabled service and maintenance revenues; Non-recurring revenues defined as professional service and software license revenues 17

18 Visible, Stable and Diversified Revenues LTM 3/31/13 Business Distribution LTM 3/31/13 Geographic Distribution Maintenance Software Licenses 16% Professional Services 4% 4% 76% Software- Enabled Services EMEA Canada Other APAC 3% 2% 10% 21% 64% United States Recurring Revenues 18

19 Experienced Management Team Leading execution track record Strong proprietary technology portfolio Successful, visiondriven acquisitions 19