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Payment & Merchandising Technologies Kurt Gallo, Senior Vice President

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Page 1: Kurt Gallo, Senior Vice President · RETAILERS COMBAT RISING LABOR COST THROUGH PRODUCTIVITY INITIATIVES 7 $28 $31 $34 $37 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 “Walmart

Payment & Merchandising Technologies

Kurt Gallo, Senior Vice President

Page 2: Kurt Gallo, Senior Vice President · RETAILERS COMBAT RISING LABOR COST THROUGH PRODUCTIVITY INITIATIVES 7 $28 $31 $34 $37 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 “Walmart

AGENDA

Results and Guidance

Market Trends

Growth Initiatives

Productivity and Efficiency

Summary

2

Page 3: Kurt Gallo, Senior Vice President · RETAILERS COMBAT RISING LABOR COST THROUGH PRODUCTIVITY INITIATIVES 7 $28 $31 $34 $37 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 “Walmart

»

Payment & Merchandising Technologies

38%

Crane Payment

Innovations53%Crane

Merchandising Systems

17%

Crane Currency

30%

U.S./Canada51%

Western Europe

16%

Emerging Markets

24%

Developed Asia-Pacific

9%

PAYMENT & MERCHANDISING TECHNOLOGIES

• CONTINUED GROWTH AT ATTRACTIVE MARGINS

* For 2020G, we included acquisition-related revenue, which constitutes revenue reflected as pre-acquisition deferred revenue that would otherwise be recognized but for the purchase accounting treatment of acquisitions. Please see non-GAAP Financial Measures tables for details. ** Excludes Special Items. Please see non-GAAP Financial Measures tables for details.Note: Charts based on 2019 actual results.

»3

($ Millions) 2016 2017 2018 2019 2020G

Sales* 746 777 1,257 1,158 1,345

Operating Profit** 134 159 218 187 215

Operating Margin** 17.9% 20.5% 17.4% 16.2% 16.0%

Page 4: Kurt Gallo, Senior Vice President · RETAILERS COMBAT RISING LABOR COST THROUGH PRODUCTIVITY INITIATIVES 7 $28 $31 $34 $37 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 “Walmart

1.8%

5.9%

7.8%7.0%

10.3%11.2%

6.1%7.0%

8.0%

10.1%10.7%

12.8%

15.1%

17.9%

20.5%

17.4%

16.2% 16.0%

2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020G*

Cummins Allison

Acquisition

MEI Acquisition

Target Margin Range

of 18–22%

Currency Acquisition

TRACK RECORD OF SUCCESS

4

Adjusted Segment Margin* Improved ~1400 BPS since 2003,

even with Temporary Acquisition Related Dilution

*Excludes Special Items. Please see non-GAAP Financial Measures tables for details.

Page 5: Kurt Gallo, Senior Vice President · RETAILERS COMBAT RISING LABOR COST THROUGH PRODUCTIVITY INITIATIVES 7 $28 $31 $34 $37 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 “Walmart

AGENDA

Results and Guidance

Market Trends

Growth Initiatives

Productivity and Efficiency

Summary

5

Page 6: Kurt Gallo, Senior Vice President · RETAILERS COMBAT RISING LABOR COST THROUGH PRODUCTIVITY INITIATIVES 7 $28 $31 $34 $37 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 “Walmart

»

MARKET GROWTH: GLOBAL CASH IN CIRCULATION CONTINUES TO GROW

• THE DEMISE OF CASH IS HIGHLY OVER-EXAGGERATED»6

0%

2%

4%

6%

8%

10%

12%

14%

16%

18%

Africa Asia Europe North America South America

2011 2012 2013 2014 2015 2016 2017 2018

Page 7: Kurt Gallo, Senior Vice President · RETAILERS COMBAT RISING LABOR COST THROUGH PRODUCTIVITY INITIATIVES 7 $28 $31 $34 $37 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 “Walmart

RETAILERS COMBAT RISING LABOR COST THROUGH PRODUCTIVITY INITIATIVES

7

$28

$31

$34

$37

2010 2011 2012 2013 2014 2015 2016 2017 2018 2019

“Walmart to use more robot technology for store tasks.”

“U.S. companies facing worker shortage race to automate.”

Employer Costs for Employee Compensation

Source: Bureau of Labor Statistics

“Japan firms near crisis as labor shortage

deepens”

“Increases in Britain’s minimum wage are

putting a growing number of workers at

risk of being replaced by machines”

“As mandated minimum

wages…continue to rise, retailers are

forced to pursue automated alternatives.”

Page 8: Kurt Gallo, Senior Vice President · RETAILERS COMBAT RISING LABOR COST THROUGH PRODUCTIVITY INITIATIVES 7 $28 $31 $34 $37 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 “Walmart

AGENDA

Results and Guidance

Market Trends

Growth Initiatives

Productivity and Efficiency

Summary

8

Page 9: Kurt Gallo, Senior Vice President · RETAILERS COMBAT RISING LABOR COST THROUGH PRODUCTIVITY INITIATIVES 7 $28 $31 $34 $37 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 “Walmart

BUSINESS GROWTH FUELED BY STRONG FUNDAMENTALS

Strategic Acquisitions

Continuing to build out the full cash cycle offering that provides

best in class products coupled with the service network.

New Product Development

Transforming our business from

component suppliers into customer-ready,

packaged solutions.

Technology Innovation

The connected vision brings all elements of the

customer cash cycle in to a unified, easy to

manage offering.

9

Page 10: Kurt Gallo, Senior Vice President · RETAILERS COMBAT RISING LABOR COST THROUGH PRODUCTIVITY INITIATIVES 7 $28 $31 $34 $37 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 “Walmart

Evolving the Business to a Full Solution Supplier

NEW PRODUCT DEVELOPMENT: EXPANDING INTOPACKAGED SOLUTIONS

10

Page 11: Kurt Gallo, Senior Vice President · RETAILERS COMBAT RISING LABOR COST THROUGH PRODUCTIVITY INITIATIVES 7 $28 $31 $34 $37 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 “Walmart

NEW PRODUCT DEVELOPMENT: CASHLESS AND CONNECTIVITY DEVICES INCREASE SHARE OF WALLET

11

All-in-One Cashless

Reader/Telemeter

Page 12: Kurt Gallo, Senior Vice President · RETAILERS COMBAT RISING LABOR COST THROUGH PRODUCTIVITY INITIATIVES 7 $28 $31 $34 $37 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 “Walmart

FULLY CONNECTED VISIONACROSS OEM AND CRANE PACKAGED SOLUTIONS

All

Payment

Loyalty

Programs

Digital

Advertising

Route

Analytics

Device

Management

CPI

Network

Vending Machines

Consumer

Coin Redemption

Back-Office

Note Counter

Attended Lane &

Smart SafesFully Connected Systems, Supported by aNational Service Network 12

Page 13: Kurt Gallo, Senior Vice President · RETAILERS COMBAT RISING LABOR COST THROUGH PRODUCTIVITY INITIATIVES 7 $28 $31 $34 $37 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 “Walmart

»

DESIGN AND TECHNOLOGY DRIVE GROWTH

• STRONGER THAN EVER ADOPTION OF CRANE MICRO-OPTICS IN LAST 10 YEARS

13

2014 20192009

»

32 Denominations

11 Countries, 1 Product 62 Denominations

27 Countries, 2 Products

137 Denominations

48 Countries

137 Denominations

48 Countries, 5 Products,

Page 14: Kurt Gallo, Senior Vice President · RETAILERS COMBAT RISING LABOR COST THROUGH PRODUCTIVITY INITIATIVES 7 $28 $31 $34 $37 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 “Walmart

STRATEGIC ACQUISITIONS:SOLUTIONS FOR THE ENTIRE PAYMENT CYCLE

Validation & Processing Equipment

for OEMs

Back Office Automation for Operators

Currency Design & Manufacturefor Central Banks

Packaged Product Solutions for Operators

14

Page 15: Kurt Gallo, Senior Vice President · RETAILERS COMBAT RISING LABOR COST THROUGH PRODUCTIVITY INITIATIVES 7 $28 $31 $34 $37 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 “Walmart

»

CUMMINS ALLISON: BUILDING OUT THE CASH CYCLE OFFERING

• OUR CONNECTED VISION COMBINED WITH CUMMINS BACK-OFFICE AND SERVICE NETWORK

PROVIDE A PLATFORM FOR GROWTH

15

Remote Monitoring,Service Dispatching, & Back

Office Software

Back Office Currency Processing

Direct Consumer Applications

»

Page 16: Kurt Gallo, Senior Vice President · RETAILERS COMBAT RISING LABOR COST THROUGH PRODUCTIVITY INITIATIVES 7 $28 $31 $34 $37 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 “Walmart

PMT HISTORY OF STRONG PROFITABLE GROWTH

16

$0

$200

$400

$600

$800

$1,000

$1,200

$1,400

2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020G

CMS CPI CURRENCY

$ M

illi

on

s ~15% Sales CAGR

2009 Op. Profit*

$18M

2020G Op. Profit*

$215M

~25% Op. Profit*

CAGR

*Excludes Special Items. Please see non-GAAP Financial Measures tables for details.

Page 17: Kurt Gallo, Senior Vice President · RETAILERS COMBAT RISING LABOR COST THROUGH PRODUCTIVITY INITIATIVES 7 $28 $31 $34 $37 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 “Walmart

AGENDA

Results and Guidance

Market Trends

Growth Initiatives

Productivity and Efficiency

Summary

17

Page 18: Kurt Gallo, Senior Vice President · RETAILERS COMBAT RISING LABOR COST THROUGH PRODUCTIVITY INITIATIVES 7 $28 $31 $34 $37 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 “Walmart

RELENTLESS PURSUIT OF CONTINUOUS IMPROVEMENT

18

Accelerated / Strategic

Integration

Innovation in Design

Utilizing 3P and Break Through on Cost

Core Business Productivity

Page 19: Kurt Gallo, Senior Vice President · RETAILERS COMBAT RISING LABOR COST THROUGH PRODUCTIVITY INITIATIVES 7 $28 $31 $34 $37 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 “Walmart

ACQUISITIONS DRIVING SIGNIFICANT BUSINESSWIDE SAVINGS

19

»2010 2015 2020

Over $60M in Integration Savings on the Past 10 Years

~$60M

Page 20: Kurt Gallo, Senior Vice President · RETAILERS COMBAT RISING LABOR COST THROUGH PRODUCTIVITY INITIATIVES 7 $28 $31 $34 $37 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 “Walmart

MANUFACTURING INNOVATION

20

Page 21: Kurt Gallo, Senior Vice President · RETAILERS COMBAT RISING LABOR COST THROUGH PRODUCTIVITY INITIATIVES 7 $28 $31 $34 $37 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 “Walmart

»

VALUE ANALYSIS & VALUE ENGINEERING

• RIGOROUS AND STRUCTURED ENGINEERING-BASED APPROACH TO COST REDUCTION

21

»2013 2014 2015 2016 2017 2018 2019

4.9% Year-on-Year

Cost Reduction CAGR

Page 22: Kurt Gallo, Senior Vice President · RETAILERS COMBAT RISING LABOR COST THROUGH PRODUCTIVITY INITIATIVES 7 $28 $31 $34 $37 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 “Walmart

AGENDA

Results and Guidance

Organic Growth Initiatives

Productivity and Efficiency

Market Trends

Summary

22

Page 23: Kurt Gallo, Senior Vice President · RETAILERS COMBAT RISING LABOR COST THROUGH PRODUCTIVITY INITIATIVES 7 $28 $31 $34 $37 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 “Walmart

»

SUMMARY

• FUNDAMENTALS THAT DRIVE FUTURE GROWTH

23

»

Continued Solid Performance Track Record1

Positive Long-term Market Drivers2

Technology Leadership3

Scale Across Cash Cycle is a Differentiator4

Page 24: Kurt Gallo, Senior Vice President · RETAILERS COMBAT RISING LABOR COST THROUGH PRODUCTIVITY INITIATIVES 7 $28 $31 $34 $37 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 “Walmart

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