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- 1. 18 Sheetal Shah Operations Increasing efficiency anddiscipline Joe Mach June Felix Carlos Lima Steve Aliferis Regional Leadership Delivering global solutions locally Marc Rothman Finance Driving improved results and delivering greater shareholder value Paul Galant Vision Driven by clients’ current and future needs Vin D’Agostino Strategy Defining market dynamics and strategy for growth Glen Robson Solutions Launching next- generation, client- centric devices and services Agenda 18
- 2. 19 Our strategy isshaped by market forces impacting our clients and our key assets Forces impacting our clients 1 Acceleration away from cash to electronic payments 2 Proliferation of POS solutions 3 Increasing complexity of consumer payments 4 Convergence of payments and commerce 5 Growing consumer expectation for omni-channel experiences Verifone’s key assets Differentiated relationship management, product and engineering talent Deep experience in payments security and regulations Global scale and local execution Comprehensive portfolio of devices and services A trusted brand Our Strategy
- 3. OUR STRATEGY Build next-generationdevices and connect them with our expanded services to enable the future of payments and commerce 20
- 4. 21 3% 4% 4% 3% 3% 4% 4% 5% 7% 85% Cash Debit 2020 Credit 2016 88% 2014 90% Other Accelerationaway from cash to electronic payments1 Card payments are growing Consumer transactions by type Drivers of the shift • Growing consumer income (e.g., urban consumer income in China growing 4% per annum) • Modernizing payment systems (e.g., cashless initiatives in Thailand, Indonesia) • Growing financial inclusion (e.g., World Bank Universal Financial Access 2020 initiative) • Expanding fiscalization (e.g., Turkey directive on tax office communications) • Demonetizing paper currency (e.g., India ceasing usage of ₹500 and ₹1,000 notes) MARKET FORCES Growing use of electronic payments is increasing demand for payment devices and services Source: McKinsey Global Payment Map
- 5. 22 Proliferation of POSsolutions 79% 31% FY20FY13 ~80% of US retailers are projected to have implemented mPOS/iPOS in some form by FY20 2 Large and small merchants are increasing their demand for new types of payment devices • Larger merchants looking for new checkout solutions to create new personalized shopping experiences for their consumers • Small merchants who view mPOS/iPOS as an appealing, lower-cost alternative Drivers of the shift MARKET FORCES Source: Business Intelligence July 2017
- 6. 23 Increasing complexity ofconsumer payments3 Clients are seeking a technology partner who can help navigate the complex payments landscape 1 New payment types are expanding with increases in cross-border commerce and the rise of digital wallets 2 Payment formats are expanding as payment becomes embedded into different devices 3 Security challenges and new regulatory requirements are raising the bar in payments MARKET FORCES
- 7. 24 Convergence of paymentsand commerce4 MARKET FORCES Merchantservicesproviders Targeted Marketing Loyalty and Incentives Payments and Financial Services Convergence creates demand for next- generation devices and services The “Last Inch” of consumer payments
- 8. 25 5 Single-channel Omni-channel Lower complexityHigher complexity e-commerce channel and stores exist next to each other e-commerce channel closely integrated with store network No e-commerce channel, traditional stores Omni-channel requires the integration and inter-operability of card-present and card-not-present solutions Businesses are moving from silo-channel to omni-channel Silo-channel MARKET FORCES Growing consumer expectation for omni-channel experiences
- 9. 26 Verifone’s key assetsposition us to provide solutions to our clients as they navigate these market forces OUR CAPABILITIES Brand Talent ExperienceDistribution Devices & Services Next-generation devices and services to execute our vision and achieve our goals Accepting payments in >150 countries with global insight and local execution 35 years of experience and a brand that stands for security and ubiquity in payment acceptance ~6,000 people working towards delivering the most comprehensive suite of solutions Deep understanding of our clients’ business objectives and security needs
- 10. 27 Leveraging our assetsto solve clients' opportunities and challenges by launching next-generation devices… OUR STRATEGY Forces impacting our clients Our key assetsScaling next- generation devices 1 Acceleration away from cash to electronic payments A trusted brand 2 Proliferation of POS solutions Differentiated relationship management, product and engineering talent 3 Increasing complexity of consumer payments Deep experience in payments security and regulations 4 Convergence of payments and commerce Global scale partnered with local execution 5 Growing consumer expectations for omni- channel experiences Engage Value E-series Carbon Comprehensive portfolio of devices and services
- 11. 28 … and connectingour clients to Verifone Services platform to enable the future of payments and commerce OUR STRATEGY Forces impacting our clients Our key assetsVerifone Services offerings 1 Acceleration away from cash to electronic payments A trusted brand 2 Proliferation of POS solutions 3 Increasing complexity of consumer payments Deep experience in payments security and regulations Global scale partnered with local execution Comprehensive portfolio of devices and services Differentiated relationship management, product and engineering talent 4 Convergence of payments and commerce 5 Growing consumer expectations for omni- channel experiences Device Services Payment Services Commerce Services Omni- channel
- 12. 29 Mid-single Digit 2017 >$4.4B ~$3.8B 2020 VerifoneMarket ex-Verifone Maturemarkets are expanding as economies grow and merchants embrace evolving payment standards such as PCI and EMV Emerging market growth lead by government mandates such as fiscalization and demonetization Global growth in new product segments such as iPOS and mPOS By executing this strategy, Verifone’s next-generation devices will capture a larger share of the overall device market… 29 Sources: ABI Research, Verifone estimates, TAMS
- 13. 30 … and, combinedwith our new services platform, deliver complete solutions to increase our lifetime revenue per device Commerce Services Advertising Card-based loyalty programs Paid search Big Data analytics Coupons Mobile ads Device management E-commerce hosting Payment Services Devices mPOS Traditional Payment gateways Integrated cloud POS Identity authentication Pay with points Warranty Internet of Things Value Device services Standalone device sale… …with Payment Services… …and with Commerce Services Lifetime revenue per devices Illustrative
- 14. 31 I Provide new solutions inthe market segments where we operate II Expand our share in under-penetrated geographies Capture new segments with new solutions Our success provides a foundation from which we will establish three pillars of growth… Value CarbonSystems Device Services Payment Services Commerce Services Omni- channel Services Engage E-series
- 15. 32 …and generates revenuegrowth 51 Total Revenue Growth +5-6% Systems Revenue Growth +4-5% Services Revenue Growth +7-8% Note: P&L figures are non-GAAP