CSG Systems Inc. - Jefferies Group...CSG helps the world’s leading service providers provide a more personalized customer experience while turning transactions into revenues We are
This presentation may contain statements that are forward looking. These statements are based on current expectations and assumptions that are subject to risks and uncertainties which may cause actual results to differ materially because of factors mentioned in this presentation, in management’s discussion and analysis section of the company’s 2012 Form 10-K or in other reports and filings with the Securities and Exchange Commission. We undertake no duty to update or revise any forward looking statements, whether as a result of new information, future events or otherwise. In addition, all non-GAAP/pro-forma numbers are reconciled in tables under the Investor Relations section of our website at www.csgsystems.com.
Turning what happens in the network into a personalized customer experience
CSG helps the world’s leading service providers provide a more
personalized customer experience
while turning transactions into revenues
Presenter
Presentation Notes
We are a leading provider of customer interaction management solutions to North American service providers; We help our clients manage and maximize their customers’ experience with them; We do this by helping clients identify the right package of products and services to offer a customer; By helping them acquire and activate those customers; By helping them service those customers through the most meaningful channel possible for that customer---whether that be through a call center, over the web, in person or over a customer’s mobile phone; And importantly, we help them charge for their services and collect those payments in the most efficient and effective manner
Market leader in complex and dynamic markets Long-term relationships with global leaders Company reinvests to ensure technology leadership
position Growth opportunities leveraging technology assets Strong business model with recurring, predictable
revenues plus strong cash flows
Presenter
Presentation Notes
So not only do we have important solutions for our clients, we translate this to a strong business model for our company. We are a leader in a complex and dynamic marketplace that is constantly reinventing itself. We are extremely fortunate in that our relationships with our clients span many years…and in some cases decades…..and we secure long-term contracts for our services. When you are an outsourced provider of services it is imperative that you continue to invest in your technology as in your client’s eyes---you are an extension of their own IT and Research & Development Department. CSG has a proven track record of investing a significant amount of dollars in R&D in order to continue to be the leader in this industry. And our growth comes from leveraging our core assets that we invest in—by either getting deeper in our existing client base within the Satellite and Cable market, or by taking those assets to new verticals where we have established relationships. And because so much of what we do is based on managing the customer lifecycle and enhancing the customer experience, our solutions are extremely sticky and provide us with an opportunity to continue to do more and more for our clients. Finally, as you will hear more from Randy, our business model is extremely strong---it is characterized by having highly predictable revenues as a result of our long-term contracts, as well as one that generates mid-single digit growth and strong cash flows.
2nd largest pure-play BSS/OSS provider worldwide 500+ clients Support majority of world’s 100 largest Tier 1 providers 3,600 employees in 24 countries Support for multiple vertical markets: cable, wireless,
fixed-line, satellite/DBS, utilities, media/entertainment, retail and more
Multiple delivery models: software, service bureau, managed services, hybrid & professional services
CSG International provides business-critical software systems and services to our clients, who depend upon us to generate revenue and maximize value from their
customers.
Presenter
Presentation Notes
With its acquisition of Intec in November 2010, CSG is now the second largest provider of business-critical software systems and services worldwide. With our extensive breadth and depth and experience in our respective markets and geographies, CSG’s clients depend on us to generate revenue and maximize value from their customers. We do this by delivering and evolving a comprehensive suite of business-critical solutions and services , ever watchful of the market forces that will create new opportunities and challenges for our clients.
We create recurring relationships with our clients by listening to their needs and solving their business challenges; We expand our product and services portfolio with a strong
focus on continuous innovation; We increase our value proposition to our clients through
continuous improvement; We deliver on our commitments; We bring new skills and talents to market to help manage the
pace of change in our clients’ and our own businesses.
Before diving into profiling some of our solutions and talking about our roadmap, I wanted to take a few minutes to baseline with you on the offerings we have today and to put it in a framework to help you see how this all ties together into a cohesive value proposition for our customers We have over 100 SKUs falling in to about a dozen categories. Rather than walking you through all the applications individually, I want to talk to you about the key themes our applications support When we think of our solutions, we group them into 3 categories: Transaction Management Platforms - generally high volume transaction processing engines that solve complex, often unglamourous functions for our clients. You can think of these transaction processing engines in 2 categories: traditional billing and customer care (BSS) applications for both retail and wholesale services (ex: WBMS, SV, ACP, TSM) Operations enablers – these are ancillary (BSS/OSS) capabilities that make billing and customer care applications more robust and more end-to-end. Examples include field force management applications, provisioning interfaces, payment gateways, product catalogs, etc. Interaction Channels – Transaction management engines perform valuable functions and their hard work is exposed to the clients’ workforce, or to the end customer in the form of interaction channels. The world of touching the customer used to be fairly easy: there were call center representatives contacted by phone, there were field technicians who arrived at your door, and there was the printed statement which arrived monthly. The communication service providers’ interaction touchpoints to the customer have exploded, and we have committed to supporting these touchpoints in an integrated manner: channels we support now include in-store kiosks, SMS texts, web self-service, mobile apps, etc. We believe managing the interaction touch points in a cohesive way is vital to successful customer care and operational efficiency. 3) Insight enablers – Where we see real value for the carrier is in closely marrying together these transaction management platforms with interaction channels via the middle category on this slide: insight enablers. We believe by combining the valuable data from the transaction management platforms with a customer interaction and preference management engine, we help the carriers develop key insights about their customers that will help them proactively address a customer with, for instance, a propensity to churn or a propensity to buy. We have a category of applications in the middle that help us track customer interactions, develop insights and leverage the right channel to touch the customer in the next interaction We also string together “solutions” which are generally combinations of transaction management platforms, interaction channels, and insight enablers. A “solution” example would include Direct Sales Express (DSX)…which we will profile shortly As you likely well know by now, we offer our solutions in a variety of models, from software through SaaS/Service bureau. (((Sean…get CSG scale slide)))
Top 3 clients into 2017; Each year 80 -85% visibility
Total in millions
Debt $296 Cash $173 Net Debt $123
5-yr. avg. 08-12 In millions
CFO $115 FCF $89 Low cap ex spend
500 clients; 3,600 staff
See reconciliations on Investor Relations section of website: www.csgi.com
Presenter
Presentation Notes
I want to go through four key characteristics to help demonstrate the financial strength of CSG First: we have the benefit of long-term processing and managed services contracts which generally range in length of term of three to five years which makes up 70% of our revenue base. This provides us with a recurring, profitable, and predictable source of revenues and cash flows on an annual basis. When combined with other predictable revenue sources such as software maintenance, we generally enter any given year with greater than 80% visibility for expected revenues and cash flows. Second, with over 80% of our revenues visible and long-term in nature, we can plan our costs structure to drive operational benefits. In addition, our business is one that can scale profitably with growth – therefore, we can benefit from any recovery in spending by communications providers as adding revenues does not result in us having to add a corresponding amount in expense, which I will go through later. Third, we are not a capital intensive business - therefore, our annual free cash flow generation is very strong. And Finally, as a result of our consistent strong free cash flow generation, we have a very solid balance sheet. This strong balance sheet allows us to be opportunistic as we look to continue to grow our business and create value for our shareholders.
Market leader in complex and dynamic markets Long-term relationships with global leaders Company reinvests to ensure technology leadership
position Growth opportunities leveraging technology assets Strong business model with recurring, predictable
revenues plus strong cash flows
Presenter
Presentation Notes
So not only do we have important solutions for our clients, we translate this to a strong business model for our company. We are a leader in a complex and dynamic marketplace that is constantly reinventing itself. We are extremely fortunate in that our relationships with our clients span many years…and in some cases decades…..and we secure long-term contracts for our services. When you are an outsourced provider of services it is imperative that you continue to invest in your technology as in your client’s eyes---you are an extension of their own IT and Research & Development Department. CSG has a proven track record of investing a significant amount of dollars in R&D in order to continue to be the leader in this industry. And our growth comes from leveraging our core assets that we invest in—by either getting deeper in our existing client base within the Satellite and Cable market, or by taking those assets to new verticals where we have established relationships. And because so much of what we do is based on managing the customer lifecycle and enhancing the customer experience, our solutions are extremely sticky and provide us with an opportunity to continue to do more and more for our clients. Finally, as you will hear more from Randy, our business model is extremely strong---it is characterized by having highly predictable revenues as a result of our long-term contracts, as well as one that generates mid-single digit growth and strong cash flows.
