2. 1
Disclaimer
Forward-Looking Statements
This presentation includes “forward-looking statements” within the meaning of the Securities Act of 1933, as amended (the “Securities Act”), the Securities Exchange
Act of 1934, as amended and “forward-looking information” within the meaning of Canadian securities laws. Forward-looking statements and information are not
based on historical information and include, without limitation, statements and information regarding our future financial condition and results of operations, cash
flows, business strategy and plans and objectives of management for future operations. Forward-looking statements and information reflect our current views with
respect to future events. The words “may,” “will,” “expect,” “intend,” “anticipate,” “believe,” “project,” “estimate” and similar expressions identify forward-looking
statements and information. These forward-looking statements and information are based upon estimates and assumptions made by us or our officials that, although
believed to be reasonable, are subject to certain known and unknown risks and uncertainties that could cause actual results to differ materially and adversely as
compared to those contemplated or implied by such forward-looking statements and information. All forward-looking statements and information involve risks,
assumptions and uncertainties. You should not rely upon forward-looking statements or information as predictors of future events. The occurrence of the events
described, and the achievement of the expected results, depend on many factors, some or all of which are not predictable or within our control. Actual results may
differ materially from expected results. See the sections “Risk Factors,” “Forward-Looking Statements, “Management’s Discussion and Analysis of Financial Condition
and Results of Operations” and elsewhere in our Prospectus filed on October 9, 2015 with the Securities and Exchange Commission (the “SEC”) pursuant to rule
424(b) under the Securities Act and on SEDAR for a more complete discussion of these risks, assumptions and uncertainties and for other risks and uncertainties.
These risks, assumptions and uncertainties are not necessarily all for the important factors that could cause actual results to differ materially from those expressed in
any of our forward-looking statements and information. Other unknown or unpredictable factors also could harm our results. All of the forward-looking statements and
information we have included in this presentation are based on information available to us on the date of this presentation. We undertake no obligation, and
specifically decline any obligation, to update publicly or revise any forward-looking statements or information, whether as a result of new information, future events or
otherwise. In light of these risks, uncertainties and assumptions, the forward-looking events discussed in this presentation might not occur.
Industry and Market Data
This presentation includes references to certain industry and market data included in our initial public offering prospectus, which was derived from a report prepared
by First Annapolis Consulting. For additional information, please see our Prospectus filed with the SEC and on SEDAR on October 9, 2015.
Non-GAAP Financial Information
Generally Accepted Accounting Principles (“GAAP”) is the term used to refer to the standard framework of guidelines for financial accounting. GAAP includes the
standards, conventions and rules accountants follow in recording and summarizing transactions and in the preparation of financial statements. In addition to reporting
financial results in accordance with GAAP, CPI has provided certain non-GAAP financial measures, including Adjusted EBITDA and Adjusted Net Income. CPI
defines Adjusted EBITDA as income from continuing operations before interest expense, net, provision for income taxes, and depreciation and amortization, plus
adjustments for restructuring and other charges, stock-based compensation expense, including non-cash compensation expense related to our phantom stock plan
that was terminated in connection our IPO, performance bonuses earned in connection with the EFT Source acquisition, loss on debt modification and early
extinguishment, investment banking and related fees, and foreign currency gain or loss. Adjusted Net Income is defined as net income from continuing operations,
excluding restructuring and other costs associated with the closure of the Petersfield U.K. facility, amortization of intangible assets, stock-based compensation
expense, including non-cash compensation expense related to our phantom stock plan that was terminated in connection our IPO, loss on debt modification and early
extinguishment, and EFT Source acquisition performance payments, all net of their income tax impact. Adjusted EBITDA and Adjusted Net Income should not be
considered an alternative to net income, income before income taxes, cash flows from operating activities, or any other measure of financial performance calculated
in accordance with GAAP as those items are used to measure operating performance, liquidity or the ability to service debt obligations. CPI believes that Adjusted
EBITDA and Adjusted Net Income present a transparent view of its recurring operating performance and allows management to readily view operating trends,
perform analytical comparisons and identify strategies to improve operating performance. Further, Adjusted EBITDA and Adjusted Net Income, as CPI defines them,
may not be comparable to Adjusted EBITDA and Adjusted Net Income or similarly titled measures used by other entities.
For a reconciliation of Adjusted EBITDA and Adjusted Net Income to net income from continuing operations, the most comparable GAAP measure, please refer to our
Prospectus filed with the SEC and on SEDAR on October 9, 2015, our earnings press release for the fourth quarter of 2015 on our Investor Relations website at
http://www.cpicardgroup.com/investor-relations/ and our “Non-GAAP Adjustments” slide in the appendix of this presentation
3. 2
CPI is a North American Leader
in Payment Card Solutions
#1 Market Position
in the
U.S. Prepaid Debit Card market
Leading Position
in the U.S. Large Issuer market,
serving the majority of the top 20
U.S. card issuers
#1 Market Position
in the highly attractive
U.S. Small Issuer market
$374 million & 29% CAGR(1)
Net Sales
FY2015
$96 million & 52% CAGR(1)
Adjusted EBITDA
FY2015
Market Leadership Attractive Financial Profile
Financial Performance Enhanced by EMV Market Conversion
$39 million
Free Cash Flow(2)
FY2015
Source: First Annapolis Industry Research (May 2015).
Note: Relative market positions are by unit volume and represent management estimates.
(1) CAGR measured from 2012 – 2015
(2) Free Cash Flow defined as cash flow from operations less capital expenditures. Adjusted for discontinued operations and a $13.9 million payment related
to the settlement of the Company’s Phantom Stock Plan in conjunction with the IPO.
4. 3
Large and Growing
Addressable Market
U.S. Card Production Volume
1.4BN
2019E
~4%
‘14-’19E CAGR
Increasing Demand for
Value-Added Services
Outsourced U.S. Card
Personalization Revenue
$604MM
2019E
~8%
‘14-’19E CAGR
Increasing Participation
of Card Payments
U.S. Payment Transactions
~69%
Card-Based in
2018E
~38%
Card-Based in
2005
EMV Conversion
U.S. Card Production Revenue
$1.3BN
2019E
~26%
‘14-’19E CAGR
CPI Serves a Large and Growing Market
CPI is at the
Center of
Powerful
Long-term
Trends
Source: First Annapolis Industry Research (May 2015), The Nilson Report (issue 1054).
5. 4
Comprehensive Card Solutions and Services
Instant Card
Issuance Systems
EMV Financial
Payment Cards
Non-EMV
Payment Cards
Tamper-Evident
Security Packaging
Solutions
Card Data
Personalization
• Feature a chip that
interfaces with an
EMV payment
terminal
• Utilize magnetic
stripe, RFID
contactless
technology, or both
• Encoding information
on financial cards
• Data integration with
over 3,200 U.S.
banks
• In branch financial
card issuance
• Installed base of
more than 3,900 units
at bank branches
• Solutions designed
for feature and anti-
fraud function for
Prepaid Debit Cards
CPI Provides a Broad End-to-end Suite of Solutions
6. 5
Key Investment Highlights
Leading Market Positions
Well-Positioned for EMV Conversion in the United States
Comprehensive End-to-End Suite of Offerings
Long-term, Trusted Customer Relationships
Multiple Drivers of Growth
Attractive Financial Model
7. 6
Leading Industry Positions / Long-Term, Trusted
Customer Relationships
Industry Experience and Know-How
A Market Leader in North America with over 20 Years of
Experience
Long-Term, Trusted Customer Relationships
Average Tenure With Top 5 Customers of 10+ Years
~4,000 total customers
Deep Customer Integration
Integration with Customers on Value-Added Services
Intellectual Property
Patents, Licenses and Exclusive Production Rights
Payment Card Brand Certifications
7 High-Security Facilities, Each Certified by One or More of the
Payment Card Brands
U.S. Prepaid Debit Card
market
U.S. Large Issuer market
U.S. Small Issuer market
#1
Market
Position
#1
Market
Position
Leading
Position
Note: Relative market positions are by unit volume and represent management estimates.
#1 Position in U.S. Financial Payment Card Market with ~35% Cards Produced
8. 7
$238
$657
$991
$1,201 $1,229 $1,251
$167
$117
$76
$51 $47 $47
$405
$774
$1,067
$1,251 $1,275 $1,297
2014 2015E 2016E 2017E 2018E 2019E
(22%)
39%
26%
CAGR
Source: First Annapolis Industry Research (May 2015).
(1) Includes cards produced for the U.S. market for the Visa, MasterCard, American Express and Discover networks and Private Label Credit Cards.
U.S. EMV Conversion
The Liability Shift
Enhanced Payment
Security
Global Interoperability of
the Acceptance Network
17%
42%
59%
69% 70% 71%
83%
58%
41%
31% 30% 29%
1,150
1,249 1,305 1,360 1,393 1,423
2014 2015E 2016E 2017E 2018E 2019E
(15%)
39%
4%
CAGR
EMV Non-EMV
Drivers of EMV Conversion
(in millions)
Card Volume – U.S. Market(1)
($ in millions)
Revenue – U.S. Market(1)
Market Size Expected to Triple Through EMV Conversion to $1.3 billion in 2019
9. 8
Highly Visible and Recurring Demand
53%
19%
16%
12%
Expiration (53%)
Lost / Stolen / Fraud (19%)
Portfolio Churn (16%)
Portfolio Growth (12%)
(% of total cards issued)
2014 Total Annual Card Issuance Detail(1)
Existing Card
Replacement
Significant annual recurring
card demand
Card life shorter than
expiration cycle
Vast majority of cards issued
annually replace existing cards
Source: First Annapolis Industry Research (May 2015).
(1) Includes Private Label Credit Cards.
Approximately 88% of Annual Demand Driven by Reissuance of Existing Cards
10. 9
Well Positioned for Long-Term
Growth and Expansion
Continued organic
growth and expansion
of the U.S. card market
Increase share of
wallet of ~4,000 clients
by cross selling new
and value-added
services
Develop new products
and solutions to expand
offer
Identify and develop
new vertical market
opportunities within
existing customer base
and new prospects
Execute and integrate
acquisitions to
strengthen market
position and maximize
growth
Leverage Existing
Customer Base
Expand to New Customers
and Offerings
Grow with
Existing
Customers
Further
Penetrate
Existing
Customer
Base
Innovate
and Enhance
Suite of
Solutions
Selectively
Pursue
Strategic
Acquisitions
Expand
Reach in
Card Market
CPI Expects to Utilize its Proven Strategy to Deliver Above Market Growth
11. 10
EMV cards issued in the U.S. to
date primarily have been Contact
EMV cards
Dual-Interface Growth Beyond Initial EMV
Conversion
Magnetic Stripe
ASP of $0.20
Contact EMV
ASP of $1.00
Dual-Interface EMV
ASP of $2.00
Dual-Interface EMV card issuance
growing globally:
Note: Figures represent management estimates.
Dual-Interface Provides Significant Additional Future Growth Opportunity
Momentum of Dual-Interface
12. 11
Long-term, Trusted Customer Relationships
Substantial Cross-Selling Opportunities
EMV Financial Payment Cards
Non-EMV Financial Payment
Cards and Retail Gift Cards
Instant Card Issuance Systems
Card Data Personalization
Tamper-Evident Security
Packaging Solutions
Instant Card Issuance Services
Comprehensive End-to-End Solutions
Expected to Continue to Enhance CPI’s Market Share Positions
Small Issuers
and
Group Service
Providers
Large
Issuers
Prepaid
Issuers and
Program
Managers
13. 12
Tamper-Evident Packaging
Continuous Innovation and Product Enhancement
• Accelerated customer
onboarding
• Increased new card
usage
• Enhanced profitability
• Brand differentiation
Patented technology allows branches to
instantly issue fully personalized debit cards
• Customized unique
solutions
• Patented tamper-evident
and functional features
• Card protection
• Creative design options
Innovative products protect CPI’s customers’
cards from fraud prior to sale
Broad Range of Innovative Payment Solutions
Card@Once® Instant Issuance
Deepens Existing Customer Penetration and Attracts New Customers
14. 13
2008
2010
2012
2014
Acquisitions Have Added Growth
and Strengthened Market Positions
Enhance Existing
End-to-End solutions
Enter Attractive
Markets and Verticals
Broaden Production
Capabilities
• Extended
personalization
capabilities in
Small Issuer
market including
Instant Issuance
• Expanded
Prepaid Debit
Card market
position
• Strengthened
Small Issuer
market position
• Established
geographical
presence in
Canada and U.K.
Acquisition Rationale Delivered
Strengthen Market
Position
Strengthen Customer
Base
• Expanded
secure
capabilities
geographically
Highly Successful Track Record of Integrating and Growing Acquired Businesses
15. 14
Attractive Financial Profile
Strong Growth Profile
• High revenue visibility with strong industry trends
• Net sales CAGR of 29% (FY2012 – FY2015)
• Adjusted EBITDA CAGR of 52% (FY2012 – FY2015)
Significant Operating
Leverage
• Scale and efficiency further enhanced by continued top line growth
• Adjusted EBITDA margin of 26% (FY2015)
• Major infrastructure investment completed
Attractive Free Cash
Flow Profile
• $39.1 million FY2015(1)
• Strong deleveraging profile that should enhance future earnings
• Financial flexibility to pursue corporate initiatives, strategic
opportunities and capital return
(1) Free Cash Flow defined as cash flow from operations less capital expenditures. Adjusted for discontinued operations and a $13.9 million
payment related to the settlement of the Company’s Phantom Stock Plan in conjunction with the IPO.
16. 15
Net Sales Adjusted EBITDA Adjusted Net Income
$85 $95 $102
$133
$99
$101
$159
$242
$184
$196
$261
$374
2012 2013 2014 2015
Services Products
Strong Historical Performance
($ in millions) ($ in millions)
$31
$38
$54
$96
17%
20% 21%
26%
2012 2013 2014 2015
Adjusted EBITDA
Adjusted EBITDA Margin
($ in millions)
$10
$13
$23
$47
2012 2013 2014 2015
Adjusted Net Income
