SS&C Technologies (NASDAQ:SSNC) Needham & Co. Growth Conference January 11, 2016

Transcription

1 SS&C Technologies (NASDAQ:SSNC) Needham & Co. Growth Conference January 11, 2016

2 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. 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.

3 Leading provider of mission-critical cloud-based software for financial services providers with a flexible, on-demand delivery model 3

4 4 SS&C Summary About Founded in 1986, 7,500+ employees, 73 offices worldwide, NASDAQ: SSNC (since Q1 2010) Clients, Revenues 10,000+ clients 92% LTM contractually recurring revenues 2016 Guidance Adjusted Revenue for 2016 of $1,513.4 million - $1,522.4 million Adjusted Diluted EPS of $1.61 $1.63 Cash from Operating Activities of $380.0 to $390.0

5 Global Operations 73 offices, 7,500+ Employees 5

6 6 Experienced Management Team WILLIAM C. STONE Chairman & Chief Executive Officer NORMAND A. BOULANGER Chief Operating Officer PATRICK J. PEDONTI Chief Financial Officer PAUL G. IGOE General Counsel RAHUL KANWAR Managing Director of Alternative Assets Average 20+ Years of Experience

7 7 Broad Solutions Footprint Portfolio Management Private Equity Hedge Funds Fund of Funds Registered Investment Advisors Reconciliation Valuation Performance and Attribution Reporting Risk Management Regulatory Solutions Investor Services Asset Managers Managed Accounts Software Outsource SaaS Wealth Managers Family Offices Training Banks Real Estate Endowment/ Pension Funds Insurance Companies

8 8 Business Distribution Business Alternative Assets Institutional and Investment Management Advisory Targeted Solutions Hedge Funds Fund of Funds Private Equity Fund Administration Institutional Asset Management Insurance REITs Pension Funds Wealth Management RIAs Property Management Municipal Finance Financial Modeling Money Market processing Training Research Management 2015 Revenue Business Distribution by End Market* Advisory Institutional and Investment Management 9% Targeted Solutions 31% 8% 49% Alternative Assets *Includes FY 2015 Advent Revenue

9 Industry Dynamics

10 10 The SS&C Solution Fund Administration / Operations Financial Technology SS&C is a leading provider of financial software and services, and offers best-in-class solutions to the investment management industry

11 11 Attractive Industry Dynamics Market Drivers Total Worldwide Banking and Securities IT Spending by Software Segment (US$Bn) $57 $61 $66 $69 $73 $79 $84 $90 GLOBALIZING WEALTH INFORMATION ANYTIME, ANYWHERE Source: Gartner Alternative Asset Growth (US$tn) INCREASING REGULATORY BURDENS CLOUD CAPABILITIES $13.6 $4.6 $5.3 $7.9 $2.9 $2.5 $2.5 $1.0 $0.5 $1 $2.0 $1.4 $0.8 $7 $4 $ E Source: PwC PE RE HF + FoF

12 12 Market In Transition Fund Administration Alternatives Administrator Ranking June 2016 (AUA $bil)* Company $ AUA % of Total 1 State Street 1, % 2 SS&C GlobeOp 1, % 3 CITCO Fund Services 1, % 4 BNY Mellon % 5 Northern Trust % 6 SEI % 7 MUFG Investor Services % 8 Morgan Stanley Fund Services % SS&C started a fund administration business in 2002, and has since grown organically and through acquisition to be the 2 nd largest fund administrator in the world Two large acquisitions include GlobeOp in 2012 and Citi Alternative Investor Services in RBC Investor & Treasury Services % 10 Deutsche Bank Fund Services % Top 10 7, % Total 7, % *Source: evestment Alternative Administration Survey 2016

13 13 Market In Transition Financial Technology Top Companies by Revenue in Fintech 2006* Top Companies by Revenue in Fintech 2016* Rank Company Company 1 Fiserv, Inc. 2 FIS 3 Sungard 4 NCR Corporation 5 First Data Corporation 6 Unisys 7 Diebold, Inc 8 Reuters Group 9 Total System Services 10 DST Systems 1 Tata Consultancy Services (TCS) 2 FIS 3 Cognizant Technology Solutions 4 Fiserv, Inc. 5 NTT DATA 6 Infosys Limited 7 NCR Corporation 8 Total System Services, Inc. (TSYS) 9 Nomura Research Institute, Ltd. 10 Diebold, Incorporated 54 Advent Software 20 SS&C Technologies 55 SS&C Technologies *Source: IDC Financial Insights: The FinTech Rankings categorize and evaluate technology providers based on calendar year revenues from financial institutions for hardware, software and/or services

14 14 Investing in Innovation SS&C HAS COMPLETED 47 ACQUISITIONS TO DATE CHALKE, INC. SHEPRO BRAUN QUANTRA THE SAVID GROUP HEDGEWARE, INC. DIGITAL VISIONS REAL-TIME USA DBC OMR SYSTEMS NEOVISION HYPERSYSTEMS EISNERFAST FMC ZOOLOGIC NORTHPORT MICRODESIGN SERVICES MAXIMIS TRADEWARE THENEXTROUND, INC. GELLER INVESTMENT PARTNERSHIP SERVICES PORTIA GLOBEOP PRIME MANAGEMENT DST GLOBAL SOLUTIONS ADVENT SOFTWARE VARDEN TECHNOLOGIES CITI AIS SALENTICA WELLS FARGO GFS CONIFER

15 15 Recent M&A Acquisition Closed Price Rationale Advent Software 7/6/2015 $2.7 bil Varden Technologies 9/2/2015 $25 mil Primatics Financial 11/16/2015 $116 mil Citi Fund Services 3/10/2016 $321 mil Salentica 10/24/ Wells Fargo s Global Fund Services Conifer Financial Services 12/1/ /15/2016 $88.5 mil Ownership of fund administration platform, Geneva Best-in-class portfolio accounting software solutions Foothold in fast growing RIA market Tuck-in acquisition that provides advanced client communications solutions Leveragable across SS&C s client base About $50 million in revenue Evolv, end-to-end loan risk and finance solution Will make SS&C 2 nd largest fund administrator Private equity presence in Asia Can bring margins to corporate average Leading CRM solution for Advisory Integrates with both Microsoft Dynamics CRM and Salesforce CRM $42 billion in AUA Complex hedge fund strategies Global offices and operating center in Minneapolis, MN $110 billion AUA Strong in family office, endowments, foundations, and L.P. s Recognized as global outperformer in the 2016 Global Custodian Hedge Fund Administration Survey

16 16 Wells Fargo Global Fund Services and Conifer Financial Services Combined $152 billion in assets under administration and 330 clients Oppenheimer & Co., Athena Capital Advisors, Garda Capital Partners, and New Silk Road Investments Wells Fargo GFS expands our expertise in complex hedge funds, as well as our presence in Asia-Pacific Conifer Financial Services strengthens our market position on the West Coast, and enhances our offering for foundations, endowments, pensions, and outsourced CIO portfolios

17 Competition and Clients

18 18 Key Competitors by Market Alternative Asset Fund Administration Institutional and Investment Management Advisory SS&C is the only company that provides software and services solutions across all three markets, and offers a flexible, on demand delivery model

19 19 Diverse, Blue Chip Financial Services Clients ALTERNATIVE INVESTMENTS ASSET MANAGEMENT INSTITUTIONAL TREASURY, BANKS & CUSTODY OTHER

20 Financials

21 21 Revenue Distribution LTM 9/30/16 Business Distribution LTM 9/30/16 Currency Exposure LTM 9/30/16 Geographic Distribution Non-Recurring 8% $ AUD Other GBP 3% 2% 3% $ CAD 3% EMEA 14% APAC 6% 92% 89% 80% Recurring $ USD Americas Recurring: Software Enabled Services, Maintenance, Term license revenue Non-Recurring: Perpetual license, professional service revenue Other: EUR, RM, THB, $ SGD, ZAR, CNY, $ HKD

22 22 High Margin Business Model $1,800 $1,600 $1,400 $1,200 $1,000 $800 $600 $400 $200 41% 41% $329 $371 $136 $152 $220 40% $553 $292 41% $713 42% 42% $1,056 $768 $442 $320 $607 E* 40% E $1,518 E Strong Revenue performance and high margin business model Q3 Adjusted Revenue increased 25.8% to $391.9 million compared to Q Q Adj. Con. EBITDA is $156.7 million, increased 19.7% since Q $ E Adjusted Consolidated Ebitda Adjusted Revenue EBITDA Margin *Analyst Estimates

23 23 High Quality Earnings $400 $350 $333 E $385 E Adjusted net income increased 27.5% to $87.5 million in Q $300 $250 $200 $150 $100 $66 $76 $86 $110 $117 $134 $169 $208 $206 $253 $254 $231 Net cash from operating activities was $237.0 million for ninemonths ended September 30, 2016, a 96.6% increase $50 $ E Adjusted Net Income Operating Cash Flow

24 24 Resilient during Economic Downturn SS&C Revenue ($MM) $280 $ SS&C EBITDA ($MM) and Margin (%) Advent Revenue ($MM) $260 $ Advent EBITDA ($MM) and Margin (%) High level of revenue visibility and flexible cost base allowed for SS&C and Advent management to predict revenue headwinds in 2009, and implement cost control initiatives to increase EBITDA margin $113 $111 $62 40% 41% $47 20% 24%

25 25 Proven History of Deleveraging Historical Leverage (1) 6.8x 5.4x 3.0x 4.2x 4.1x 1.5x 1.5x (2) (3) (4) (5) (6) (7) LBO IPO Follow-on GlobeOp 3/31/2015 Pro Forma 9/30/ /23/ SS&C is taken private by the Carlyle Group and SS&C management for $1.05bn 3/31/ SS&C completes its IPO, raising $135MM 2/9/ SS&C issues a follow-on offering, raising $52MM 3/14/ SS&C acquires GlobeOp for $834MM after acquiring PORTIA for $170MM Standalone at 3/31/15 Pro Forma for Advent Acquisition Standalone at 9/30/16 1. Reflected as net debt / consolidated EBITDA 2. Balance sheet data and LTM consolidated EBITDA as of 9/30/05, as adjusted to give effect to the debt incurred related to the leveraged buyout 3. Balance sheet data and LTM consolidated EBITDA as of 3/31/10 4. Balance sheet data and LTM consolidated EBITDA as of 12/31/10 5. Balance sheet data and LTM consolidated EBITDA as of 6/30/12 6. Balance sheet data and LTM consolidated EBITDA as of 3/31/15 7. Balance sheet data as of 3/31/15 and based on LTM 3/31/15 combined Acquisition Adj. EBITDA of $532MM, which includes anticipated synergies of approximately $45MM.

26 26 Adjusted Diluted EPS Since 2010 IPO $2.00 $1.62 E Q adjusted diluted EPS $0.42 $1.50 $1.18 $ % CAGR since SSNC s 2010 IPO $1.00 $0.99 $0.71 $0.50 $0.45 $0.54 $ E

27 27 Q Financial Highlights Metric Q Q $ +/- % +/- Adjusted Revenue ($mm) $391.9 $311.4 $ % Adjusted Net Income ($mm) $87.5 $68.6 $ % Operating Cash flow nine months ended September 2016 ($mm) $237.0 $120.6 $ % Adjusted Operating Income ($mm) $150.5 $125.3 $ % Adjusted Consolidated EBITDA ($mm) $156.7 $130.8 $ %

28 28 Q4 and Full Year 2016 Guidance Q Guidance Metric Range ($mm) Revenue $ $403.0 Adjusted Diluted EPS $ $0.44 Full Year 2016 Guidance Metric Range ($mm) Revenue $1, $1,522.4 Adjusted Diluted EPS $ $1.63 Cash from Operating activities $380.0 to $390.0

29 29 Target Operating Model Organic revenue growth of 5%-10%, and acquisition growth of 5-10% Disciplined acquisition strategy to provide further upside EBITDA margins of 41-43% near term with potential for future growth Operating cash flow to fund acquisitions, pay down debt, or pay quarterly dividend Capex consistent with historical levels of % of revenue

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