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 Vistaprint N.V.
Investor Day 2014
Webcast will begin at 8:30am ET
August 6, 2014
Investor Day 2014
Exhibit 99.1 |
 Welcome
Meredith Burns
Vice President, Investor Relations
Investor Day 2014 |
 Agenda and Presenters
3 |
 Housekeeping Items
Restrooms are located outside the
room and to the right
Please use the rear doors when
entering and exiting the room
Please silence all mobile devices
4 |
 Safe
Harbor Statement 5
Today’s presentations contain statements about our future expectations, plans
and prospects of our business that constitute forward-looking statements
for purposes of the safe harbor provisions under the Private Securities Litigation
Reform Act of 1995, including but not limited to our expectations for the growth,
development, and profitability of our business, products, markets, and
acquisitions, and our financial outlook and guidance for fiscal year 2015.
Forward- looking projections and expectations are inherently uncertain,
are based on assumptions and judgments by management, and may turn out to be
wrong. Our actual results may differ materially from those indicated by these forward-looking
statements as a result of various important factors, including but not limited to
flaws in the assumptions and judgments upon which our forecasts are based;
our failure to execute our strategy; our inability to make the investments in our
business that we plan to make; the failure of our strategy, investments, and
efforts to reposition the Vistaprint brand to have the effects that we
expect; our failure to promote and strengthen our brands; our failure to acquire new customers
and enter new markets, retain our current customers and sell more products to
current and new customers; our failure to identify and address the causes of
our revenue weakness; our failure to manage the complexity of our business and
expand our operations; costs and disruptions caused by acquisitions and strategic
investments; the failure of the businesses we acquire or invest in,
including People & Print Group and Pixartprinting, to perform as expected; difficulties
or higher than anticipated costs in integrating the systems and operations of our
acquired businesses into our systems and operations; the willingness of
purchasers of marketing services and products to shop online; the failure of our current
and new marketing channels to attract customers; our failure to manage growth and
changes in our organization; currency fluctuations that affect our revenues
and costs including the impact of currency hedging strategies and
intercompany transactions; unanticipated changes in our markets,
customers, or business; competitive pressures;
interruptions in or failures of our websites, network infrastructure or
manufacturing operations; our failure to retain key employees; our failure
to maintain compliance with the financial covenants in our revolving credit
facility or to pay our debts when due; costs and judgments resulting from
litigation; changes in the laws and regulations or in the interpretations of
laws or regulations to which we are subject, including tax laws, or the institution of new laws or
regulations that affect our business; general economic conditions; and other
factors described in our Form 10-Q for the
fiscal quarter ended March
31, 2014 and the other documents we periodically file with the U.S. Securities and
Exchange Commission. |
 Introduction & Overview
Robert Keane
President and Chief Executive Officer
Investor Day 2014 |
 Our
Focus 7
What we are
What we are
passionate
passionate
about
about
Where we can
Where we can
be the best in
be the best in
the world
the world
What drives
What drives
our economic
our economic
engine
engine |
 What
we are passionate about 8
Empowering people to make an impression
Empowering people to make an impression |
 Where we can be the best in the world
Where we can be the best in the world
9
Computer-Integrated Manufacturing
Computer-Integrated Manufacturing |
 Vistaprint
Volume
Low Volume Markets
High Volume
Markets
What drives our economic engine
10
Large scale in small quantities |
 Our
Focus: Mass Customization 11 |
 12
Mass customization is about producing, with
the reliability, quality
and affordability of
mass production, small individual orders
where each and every one embodies the
personal relevance inherent to customized
physical products. |
 Focus on Scale Advantage
Focus on Scale Advantage
13 |
 14
Shared
Computer-Integrated Manufacturing
Platform
New
Geographies |
 Driving Financial Returns
15
•
Strive to maximize intrinsic value per share (i.e. DCF/share)
o
Present value of free cash flow per share over the long-term, not
for the near-term or for a specific point in time
•
We seek to achieve this through thoughtful combination of
revenue growth, margin expansion, capital expenditures, M&A
& share buybacks
•
As anticipated, FY14 was a turning point year for us in which
we balanced investments in future growth and margin
expansion appropriately given revenue headwinds
•
Expect continued margin expansion, EPS and FCF growth in
FY15 |
 What You Will Hear Today
Steadfast in our move to reposition the Vistaprint brand
Even though it continues to create revenue headwinds, we believe
it is
important to long-term value creation
Manufacturing investments are driving significant value with
improvements to cost, productivity, quality and product selection
Scale drives competitive advantage and we believe thoughtful M&A
can drive further advantage for us
Anticipate continued improvements in profitability
As always, goal of building a transformational, enduring business
institution that will drive long-term returns for customers, employees
and long-term shareholders
16 |
 Investor Day 2014 |
 Vistaprint Brand
Trynka Shineman
President, Vistaprint Business Unit
Investor Day 2014 |
 Vistaprint Brand Overview
19
Context for our performance and brand evolution
FY 2014 investment examples
Why we are confident |
 A
great deal of opportunity to gain share in the $30B microbusiness
market* 20
Price
Primary
Higher
Expectations
Locally
Focused
* All segment views are illustrative only; not a precise view of
market sizes |
 Re-centering our target, widening our bulls-eye
Price Primary
(PP) Micro
Businesses
Higher
Expectations
(HE)
Micro
Businesses
Locally
Focused
Micro
Businesses
21 |
 HEs
tend to market themselves more, but many of the qualities of PP
and HE are similar Demographics of
Business
Products
Purchased
Purchase
Frequency/
Channel
PP-centric
Common
HE-centric
More Part-time
Businesses
A sub-segment only
buys business cards
1-3 per year
Online
Common in business
tenure, industry and
business size
Both purchase a
variety of business
cards and marketing
products
More Full-time
businesses
Additionally tend to
purchase a more
complex marketing
products
4+ per year
Online and Offline
22 |
 We’ve expanded our focus from PP to
also include HE; significant commonalities
Customer
Comms
PP-centric
Common
HE-centric
•
Promotions/
Deals
•
Low quantities
•
Basic products
•
Relevant marketing
•
Basic customer support
•
e-commerce standard
site experience
•
Design Help
•
Great value
•
Category credibility
•
Delivered quality
•
Reputable provider
•
Value-Added
Services
•
Broader assortment
within categories
•
Faster shipping
•
Low entry prices
•
Lower shipping prices
•
Pricing consistency
•
Lower prices on
higher quantities
End-to-End
Experience
(Site and Service)
Product
offering
Pricing
23 |
 24
Brand evolution video |
 Vistaprint Brand Overview
25
Context for our performance and brand evolution
FY 2014 investment examples
Why we are confident |
 Improving every aspect of our customer
experience
26
Customer
Communications
End-to-End
Experience
(Site and Service)
Product offering
Pricing |
 Communications Evolution: Personalized Content
Showing relevant products in our mass email communications proves
significant increases in $/customer and purchase rate
Lifts
$/customer: 5%
Purchase Rate: 4%
Dynamically rendering the
products and designs in a
customers cart with a goal to close
the sale
Dynamically rendering a
purchased product to drive a
replenishment order and upselling
additional product options
Promoting a product that a
customer has recently browsed
while showcasing content that
matches a previous designed
product
Lifts
$/customer: 11%
Purchase Rate: 10%
Lifts
$/customer: 9%
Purchase Rate: 6%
Product in Cart
Replenishment
Browsed
27 |
 Communications Evolution: More
Brand-Forward Site
28 |
 Communications Evolution: More
Brand-Forward Site
29 |
 Customers want and need Design Help
30
Received Design Assistance
(DIWH or DIFY) in the L12M
They lack the skill, both artistic and
technical, and time to do it themselves
“If I have to do it
myself, I’m not a pro
and I don’t know how to
do the technical things
like uploads and layout”
Claudia, HE, Germany
They want a customized design,
even
with DIY templates
“I want the design to be
unique to me….
I see even templates as
a starting point for
customization”
Various, HE/PP, US and EU |
 DIY
Templates and Build a Design
DIWH-
Recreation Services
DIFY-
Custom Design
Design Services: Examples across the continuum
31 |
 Website Experience: New Design Studio
32
Smart guides for
easy alignment
Tablet-friendly
user interface
Error detection
Access to
support |
 Website Experience: Product Rendering
33
33
Our new rendering technology allows customers to see their personalized
product in a real-life context. We measured a significant conversion rate
increase and reduced design complaint rates with these photo-realistic
previews. Spot Gloss Animation
Dynamic Image Preview
Standard Product Preview |
 34
Easy Process
Before & After |
 Product Offering Evolution: Delivered Quality
35
Planned initiatives to improve
Delivered Quality:
1.
Pre-printing design checks
2.
DIY error detection
Only half of customer dissatisfaction with quality is Vistaprint
controllable
Vistaprint
Controlled
Unknown
Customer
Design
Errors |
 Product Offering Evolution: Expanded
assortment to increase category credibility
36
36
From
a limited selection
per category
To
credible
assortment |
 Product
Offering
Evolution:
Digital -Physical
Innovation
37
Facebook Postcard Distribution
Use your postcard design to generate
a matching Facebook ad
Turn nearby Facebook users into
customers
Quick and easy way to trial social
media marketing
Strong take rate during vapor testing
indicated customer demand
37 |
 Pricing
Evolution:
Rationale
for
“
Reinvents”
38
•
Customers did not like our high shipping
prices; we weren’t e-commerce standard with our shipping
as a % of order value •
Too proactive up-
and cross-selling hurt customer trust and
satisfaction, especially charging for digital items like image
uploads •
We were encouraging a focus on price with the
inconsistency in pricing across
channels –
we trained customers to hunt for the lowest prices
•
Customers were flocking to paid channels, where
the prices were often the lowest (most competitive), creating less
acquisition efficiency |
 Pricing Evolution: maintaining PP leadership
39
Introducing lower quantities for our lead offer at a lower face price
|
 Pricing Evolution: balancing segment needs
40
Targeting HE vs. PP with different quantities/price points to increase
relevance |
 Vistaprint Brand Overview
41
Context for our performance and brand evolution
FY 2014 investment examples
Why we are confident |
 Canada’s growth has been driven by a
number
of
KPIs,
some
of
which
we’
re
starting to see in other, reinvented countries
42
Promising
trends in profit
per customer
Improved spend
leverage
Improvements
in customer
satisfaction
Better retention |
 Signs of Progress -
Canada
43
Better retention
Improved spend leverage
Improvements in customer satisfaction
Promising trends in profit per customer
YoY
change |
 Promising
trends in profit
per customer
Signs of Progress -
UK
44
Improvements
in customer
satisfaction
Improvements in customer
satisfaction
Promising trends in profit per
customer |
 Signs of Progress –
U.S. and Germany
45
Improvements
in customer
satisfaction |
 Why
do the Pricing Reinvents take so long to see improvements to Repeat
Rates? 46 |
 47
•
Higher quality customers
•
More efficient advertising
•
Stronger brand loyalty
What we expect to see long term with this
strategy |
 Real, Unscripted Customers
48 |
 Investor Day 2014 |
 Manufacturing and
Supply Chain (M+S)
Don Nelson
President, Software and Manufacturing Platform
Investor Day 2014 |
 Manufacturing
+
Supply
Chain
Overview
51
Current State of M+S
o
Our network and capabilities
o
Scale advantage through operational excellence
•
Superior quality and conformance
•
Low COGS
Changes to support our strategy
o
M+S and the Orion fulfillment system
o
Expanded selection
o
Commitment to conformance
o
Transferring scale advantage through PMI |
 Manufacturing + Supply Chain: Who we are
52
•
M+S is a unit deeply committed to providing distinctive
speed and value to our customers while operating with
best-in-class internal costs and maintaining a highly safe
and nurturing workplace for our employees
Manufacturing & Supply Chain
Manufacturing operations (COGS)
>1,000
FTE
Manufacturing + SC capabilities
(OPEX)
>160
FTE |
 M+S
operates a global delivery organization with > $1 billion in
output 53
Prod. plant
Windsor, CA
>500,000 ft
2
Software
Development
Lexington, MA
Prod. plant
Ypenburg, NL
Albumprinter
> 64,000 ft2
Prod. plant
Venlo, NL
>320,000 ft2
Design/Tech
Center
Winterthur, CH
>160 FTE
Prod. Plant
Treviso, IT
Pixartprinting
170,000 ft2
Asia Sourcing
Hong Kong
Prod. plant
Bhiwandi, IN
(Mumbai)
Launched Sept
2012
>27,000 ft2
Prod. plant
Deer Park, AU
>110,000 ft2
Vistaprint M&S globally 2014:
•
9 locations
•
~$1.1 billion output
•
Serves major worldwide markets |
 Manufacturing –
Capturing scale advantage
•
M+S is concluding a 3-year program that
greatly improved our operational
capabilities and performance
•
This has reinforced our unique
competitive advantage of combining scale
and
operational
excellence
in
a
mass
customization environment
•
As a result, we have improved our
delivery of customer value while capturing
significant reductions to key areas of
COGS
54 |
 We
have driven operational improvements in many key customer
facing areas 55
Improved speed,
quality, consistency,
and efficiency assure
excellent
conformance
to
customer expectations
at low cost
-72%
-38%
Quality Complaints
Production Throughput Time
2010
2014
2010
2014
2010
2014
Late Deliveries
-62%
+48%
Direct Labor Productivity
2010
2014
(-10% YOY Q4 FY14)
(+12% YOY Q4 FY14)
(-14% YOY Q4 FY14)
(-10% YOY Q4 FY14) |
 Combining scale advantage in ways others
cannot match
56
>5.5 billion business cards,
4 million
signs, 5.6 million
garments per year
>90,000
orders shipped per
average day with a focus on
lean manufacturing
>$1.2 billion
output/yr from
>1 million ft
2
of plant space,
with 24 hour operation
Very little direct labor
per order shipped
Excellent shipping rates
and service through
scale-based relationships
Very Low material costs
and waste levels |
 This scale and performance optimization has a
material impact on COGS and margin
57
Savings are
deployed to
fund
investments
in quality,
offset
inflation, or
increase
gross margin
•
ROIC:
increasing levels of volume and
revenue flowing across equipment and
facilities with 24 hours of daily
production
•
Shipping:
channeling
the
power
of
90,000 shipments per day to get the
best rates and service
•
Raw
material:
using
the
scale
advantage from 150,000 lbs. of daily
usage to drive superior material prices
•
Direct
labor:
using
proprietary
scheduling along with lean production
to significantly improve labor efficiency |
 Next Wave: Product Diversity
58
•
Even as we offer costs well below
competitors
•
3 to 5 year project similar in scope
and ambition as just finished
•
Includes:
o
Product types –
breadth and depth
o
Delivery options
o
Decoration method
o
Quantity available
Today we offer 8 colors of Men’s
embroidered polo
shirts.
In the future, we want much higher
selection across
multiple
product categories. |
 Manufacturing + Supply Chain Overview
59
Current State of M+S
o
Our network and capabilities
o
Scale advantage through operational excellence
•
Superior quality and conformance
•
Low COGS
Changes to support our strategy
o
M+S and the Orion fulfillment system
o
Expanded selection
o
Commitment to conformance
o
Transferring scale advantage through PMI |
 M+S
is
now
part
of
Orion,
a
platform
that
is
creating
scale
advantage
through
selection,
cost,
and
conformance
60
•
Multiple customer facing brands all leveraging mass
customization through shared computer integrated
manufacturing platform
Shared Computer-Integrated
Manufacturing Platform
New
Geographies |
 Why
this is difficult 61
•
SKU management without
inventory proliferation
•
Data systems to manage
massive increase in substrates
•
Off-the-shelf equipment either
o
Small job shop –
unreliable,
high unit costs
o
Mass volume –
high set up
costs not economic for small
order volumes
•
We want to do it differently
o
Innovative use of digitally
driven equipment
o
Proprietary production
methods developed in
over past 3 years –
all
capable of extremely low
units
o
E.g., embroidery |
 …
Platform to move toward a “long tail”
selection
62
Product line (category)
…
…
…
Traditional
Vistaprint
Conceptual
Flexible
Automation
Product & delivery platform
Product and Delivery Platform
Fringe products
Not offered
Outsourcing,
potentially in-sourced
decoration for low quantity |
 Dramatically increasing SKU selection
63
~600
~1800
~3300
~5700
Vistaprint
SKUs, start
of FY14
SKUs of
acquired
companies in
FY14
SKUs of
apparel, soft
goods and
other
products
planned in
FY15 (in
Beta phase)
Total potential
SKUs
M+S is increasing
selection by
>800% with Orion,
and we plan to
increase even
further over time |
 Example: Signage from acquired companies
64
Before
After
We will materially expand our signage offering for the Vistaprint
brand starting in H2 FY15 with knowledge from People & Print
Group and Pixartprinting
•
10 –
15 banner sizes
•
New substrates
•
New features like reinforced
grommets, roll-up banner stands
•
Plus, signage extensions in posters,
signs, decals and more! |
 Example: radical increase to apparel & soft
goods selection
65 |
 Distinctive internal M+S capabilities will drive
our entry in the apparel & soft goods market
66
By Q3 of FY15 we plan to make a large portion of the (currently
beta) product line available starting at QUANTITIES OF ONE
Traditionally high file processing and setup costs mean that the
market does not effectively serve small customized quantities –
therefore most logo apparel and soft goods products were out of
reach for the micro-business market
Multi-year manufacturing capabilities and supply chain strategies
we are making are designed to break this constraint |
 Large Scale in Small Quantities
67
Quantity of custom decorated items in a given order
Low Volume
High Volume
Vistaprint
(currently in
development)
Traditional resellers
of apparel & soft
goods importers
and decorators
Asian and other
LCC suppliers to
apparel & soft
goods importers |
 The
conformance lever: we will have great consistency while
expanding selection 68
As we further
develop our unique
approach to mass
customization, we
are building the
capability to
improve
conformance while
simultaneously
increasing
selection
Customization & Selection Level
VPNV today*
Our planned trajectory
* Conformance has actually been improving while selection is increasing
Traditional Manufacturing Approaches
Level of Conformance
Few, standard products
Many, custom products |
 We
leverage our scale advantage & capabilities as we greatly
expand selection 69
Level of advantage when offering high selection levels
Automated file
preparation software
Specialized lean direct
labor optimization
Fully automated high-
volume processing
lines
Volume material cost
advantage
Volume shipping cost
advantage
Equipment / facility
utilization advantage
No cost
advantage
Limited cost
advantage
Significant cost
advantage
Great cost
advantage |
 Cost: We are transferring our capabilities
and scale advantages to new acquisitions
and partners
70
Two pillars of transferrable cost advantage:
Orion makes these
advantages modular
and
easy to transfer.
Example: Albumprinter
achieved post-acquisition:
•
Reduction in cost of
purchased materials
•
Increased labor
productivity
•
Lower production
throughput time
Unique Capabilities
brought by VPNV:
•
Proprietary software
•
Patented scheduling
approach
•
Lean application in
mass customization
•
Proprietary
production platforms
Improved Scale from
joining with VPNV:
•
Production scale
•
Material purchasing
scale
•
Supply chain &
logistics scale
•
Engineering scale |
 Summary
71
•
Established history of technology-enabled operational
advantage has led to improvements in quality, cost, reliability
and throughput time
•
Proactively investing to further traditional advantages
•
Building new capabilities that likewise break traditional
constraints of low-volume production while maintaining low
costs
•
All in support of goal to build a common back-end platform
where scale drives advantages to conformance, selection and
cost |
 Investor Day 2014 |
 Long-Term Financial Strategy
Ernst Teunissen
EVP and Chief Financial Officer
Investor Day 2014 |
 Long
-Term
Financial
Strategy
74
•
Maximize long-term intrinsic value per share
(DCF/share)
•
In our core business return to pre-FY12 margins, while
continuing to invest for long-term health and growth
•
Use cash flow and balance sheet to drive DCF/share
beyond core business:
o
Synergistic M&A
o
Share repurchases
•
Prioritize by comparing cash returns between the above
levers |
 Still early in our journey
75
FY15 GAAP and non-GAAP EPS guidance as of July 30, 2014
Please see non-GAAP reconciliation at the end of this deck
|
 After
two
years
of
investment
in
advertising
and
opex,
increasing
margins
in
FY13 -15
76
*Midpoint Net Income margin guidance for fiscal year 2015 provided on July 30,
2014 |
 Margins improving most in advertising and G&A
77
P&L line items as a percent of revenue |
 Expect to continue margin expansion in FY15
Select P&L
Line Items
(as % of
revenue)
FY2014
Actual
FY2015
Midpoint
Guidance
Comments:
Expectations excluding
Recent Acquisitions*
Comments:
Expected Impact of
Recent Acquisitions*
Gross Margin
64.5%
~60% -
62%
Increased manufacturing
productivity, offset by investments
in product quality and selection,
Significant impact from lower GM of
acquired companies
Advertising
21.1%
~20%
Opportunity for slight investment for
Vistaprint brand if we believe
returns are there
Lower ad spend at acquired
companies more than offsets any
investments in Vistaprint brand
Other
Operating
Expense
36.6%
~34% -
35%
Drive for efficiencies in G&A
functions partially offset by targeted
Technology investments
Integration costs related to
acquisitions
Operating
Income
6.8%
Slightly
higher
Slowing down headcount growth,
drive for efficiencies
Accretive to OI $, but dilutive to OI
margin
Net Income
3.4%
~5.3%
Nonrecurrence of Namex losses
lifts FY15 margin
Increased interest expense from
recent borrowing partially offsets
Namex lift
Slower OI expansion than FY14, but FY14 was greater than originally planned;
Acquisitions disrupt margin distribution
*People & Print Group, Pixartprinting and FotoKnudsen
|
 Significant investments: Vistaprint brand
79
•
Continued upgrades to product substrates, formats and
shipping options
•
Pricing and marketing changes in remaining European
markets
•
Opportunity to increase advertising as a percent of
revenue for Vistaprint brand
•
Design service expansions |
 Significant investment: new capabilities
80
Additional investments beyond those we are making to reposition the
“Vistaprint” brand.
New Product Capabilities
Platform to Support
Multiple Front Ends
New Geographies |
 M&A Approach
81
•
As discussed for years, scale matters in our business model
o
Lower unit costs (supply chain, production focus & automation)
o
Expansion of product breadth and delivery options
o
Quality and engineering systems
•
Increasing interest in pursuing M&A to accelerate scale
o
Brands that are differentiated from our “Vistaprint”
brand
o
Yet which can benefit from and add to a common operational
platform to drive scale-based competitive advantages
•
Determined to be disciplined, only pursue opportunities that meet
o
Strategically clear objectives
o
Risk-adjusted IRR better than alternative investments (& WACC)
|
 Share Repurchases can be a powerful driver
of FCF per share
82
We
have
reduced
our
share
count
by
26%
since
the
end
of
FY10;
we
compare
any
allocation
of
capital
for
M&A
or
the
business
against
additional
share
repurchases
FY10
FY11
FY12
FY13
FY14
Shares
outstanding (MM)
43.9
43.1
34.1
32.8
32.3
Shares
purchased (MM)
-
1.3
9.9
1.9
1.0
Average cost per
share
-
$42.91
$31.28
$34.77
$40.24
Total purchase
spend ($MM)
-
$56.9
$309.7
$64.4
$42.0
Cumulative
Accretion to
FCF/share*
$0.04
$0.33
$0.39
$0.54
*Accretion
to
FCF/share
does
not
take
into
account
the
increased
interest
expense
from
funding
the
repurchases.
It
is
calculated
by
comparing
actual
FCF/share
to
a
hypothetical
FCF/share,
in
which
the
weighted
share
count
for
each
period
is
adjusted
(increased)
by
the
weighted
cumulative
effect
of
repurchases
up
to
that
date.
See
non-GAAP
reconciliations
at
the
end
of
this
presentation. |
 Sources and Uses of Capital
83
* Net debt defined as bank debt less cash and cash equivalents
|
 Financial Leverage
84
•
June 30, 2014 bank debt of $448M
o
Committed credit facility $794M
($640M revolver, $154M term loan A)
o
Floating rate debt at 1.81% (2.06% including swaps)
o
Leverage (Debt/TTM EBITDA) at 2.5x pro forma*
•
Total leverage covenant currently 3.25x
o
Q1 FY15 additional borrowing capacity limited to $153M pro
forma*
•
Total leverage covenant for M&A and share repurchases
currently 2.75x on proforma basis (additional limits can apply)
* Proforma includes impact of July 1, 2014 acquisition of Fotoknudsen AS
|
 Capital Structure Philosophy and Outlook
85
•
Given cost of borrowing we believe medium/long-term
leverage levels as allowed in credit facility are attractive
assuming we continue to find high-returning
opportunities to invest in
o
If opportunities are not there, FCF generated will
naturally decrease our leverage by paying down Revolver
o
For the right opportunities we could see leverage
temporarily go up
•
We will continue to evaluate various instruments,
including longer-term debt (not included in guidance)
|
 Summary
86
•
We continue to have multiple levers for driving long-term
profit and cash flow growth
•
We have demonstrated profit margin and FCF growth
and expect to continue this focus over a multi-year
period
•
We believe the investment options we have created by
leveraging our balance sheet are creating long-term
shareholder value |
 Investor Day 2014 |
 Closing Remarks
Robert Keane
President and Chief Executive Officer
Investor Day 2014 |
 89 |
 Our
Focus: Mass Customization 90 |
 Vistaprint means different things to different
stakeholders
91
•
Increasing divergence between Vistaprint the brand and
customer value proposition and Vistaprint the
corporation
•
Strategy to preserve the differentiation and
independence of acquired company brands, as well as
the Vistaprint brand
Compelling reasons to change the name
of the corporate parent company |
 92 |
 93 |
 Next Steps
94
•
This is a corporate name change, not a change to any
customer-facing brands
•
As a Dutch company, a name change requires
shareholder approval
•
This proposal will be on the ballot for our 2014 Annual
Meeting in November
•
We would expect the name change to take effect along
with a corresponding change to our ticker symbol shortly
after the Annual Meeting |
 Our
Big Picture Steadfast in our belief that we can drive excellent
long-term returns by consolidating our industry
•
Vistaprint brand
•
Thoughtful M&A
•
Shared CIM platform
We are committed to growing DCF per share
95 |
 Investor Day 2014 |
 Non-GAAP Reconciliation and
Reference Information
Investor Day 2014 |
 About
non-GAAP financial measures
To
supplement
Vistaprint’s
consolidated
financial
statements
presented
in
accordance
with
U.S.
generally
accepted
accounting
principles,
or
GAAP,
Vistaprint
has
used
the
following
measures
defined
as
non-
GAAP financial measures by Securities and Exchange Commission, or SEC, rules:
non-GAAP adjusted net income, non-GAAP adjusted net income per
diluted share, free cash flow, trailing twelve month return on invested
capital, constant-currency revenue growth and constant-currency revenue growth excluding
revenue from fiscal 2014 acquisitions. Please see the next slide for definitions
of these items. The presentation of non-GAAP financial information is
not intended to be considered in isolation or as a substitute for the
financial information prepared and presented in accordance with GAAP. For more
information on these non-GAAP financial measures, please see the tables
captioned “Reconciliations of Non-GAAP Financial
Measures” included at the end of this release. The tables have more
details on the GAAP financial measures that are most directly comparable to
non-GAAP financial measures and the related reconciliation between these
financial measures. Vistaprint’s management believes that these
non-GAAP financial measures provide meaningful supplemental information
in assessing our performance and liquidity by excluding certain items that may
not be indicative of our recurring core business operating results, which could be
non-cash charges or discrete cash charges that are infrequent in
nature. These non-GAAP financial measures also have facilitated
management’s internal comparisons to Vistaprint’s historical performance and our competitors’
operating results.
98 |
 Non-GAAP Financial Measures Definitions
99
Non-GAAP Measure
Definition
Non-GAAP Net
Income/EPS
The items excluded from the non-GAAP adjusted net income measurements are
share-based compensation expense and its related tax effect,
amortization of acquisition-related intangibles, tax charges related to the
alignment
of
acquisition-related
intellectual
property
with
global
operations,
changes
in
unrealized
gains
and
losses on currency forward contracts, unrealized currency transaction gains and
losses on intercompany financing arrangements and the related tax effect,
the charge for the disposal of our minority investment in China, and the
change in fair-value estimate of our potential acquisition-related earn-outs.
Non-GAAP weighted average shares outstanding excludes the impact of
unamortized share-based compensation included in the calculation of
GAAP diluted weighted average shares outstanding. Free Cash Flow
FCF = Cash Flow from Operations –
Capital Expenditures –
Purchases of Intangible assets not related to
acquisitions –
Capitalized Software Expenses
Trailing Twelve Month
Return on Invested Capital
ROIC = NOPAT / (Debt + Equity –
Excess Cash)
Net operating profit after taxes (NOPAT)
Excess cash is cash and investments of 5% of last twelve month revenues
Operating leases have not been converted to debt
Non-GAAP TTM ROIC excludes share-based compensation expense and its
related tax effect, amortization of acquired intangibles, charges related
to the alignment of Webs IP with our global operations, changes in
unrealized gains and losses on currency forward contracts, and unrealized currency
transaction gains and losses on intercompany financing arrangements and the
related tax effect Excess cash definition updated in period ending
03/31/2013 and for prior periods. Constant-Currency
Revenue Growth
Constant-currency revenue growth is estimated by translating all non-U.S.
dollar denominated revenue generated in the current period using the prior
year period’s average exchange rate for each currency to the U.S.
dollar and excludes the impact of gains and losses on effective currency hedges
recognized in revenue in the prior year periods.
Constant Currency
Revenue Growth, excluding
FY14 Acquisitions
Constant-currency revenue growth excluding revenue from fiscal 2014
acquisitions excludes the impact of currency as defined above and revenue
from People & Print Group and Pixartprinting. |
 Reconciliation:
GAAP
to
Non-GAAP
Results
Net
Income
(Loss)
–
Annual
($ in thousands)
FY 2006
FY 2007
FY 2008
FY 2009
FY2010
FY2011
FY2012
FY2013
FY2014
GAAP Net Income
$19,234
$27,143
$39,831
$55,686
$67,741
$82,109
$43,994
$29,435
$43,696
Share-based compensation
and related tax effect
$4,850
$8,765
$15,275
$20,177
$23,156
$22,400
$26,060
$33,662
$28,520
Amortization of acquired
intangible assets
-
-
-
-
-
-
$5,754
$10,361
$12,187
Tax Impact of Webs IP
transfer
-
-
-
-
-
-
$1,235
$2,387
$2,320
Changes in unrealized (gain)
loss on currency forward
contracts included in net
income
$425
Unrealized currency
transaction loss (gain) on
intercompany loan and the
related tax effect
$585
Loss on disposal of Namex
investment
$12,681
Change in fair value of
contingent consideration
$2,192
Non-GAAP
Adjusted Net Income
$23,146
$35,908
$55,106
$75,863
$90,897
$104,509
$77,043
$75,845
$102,606
Revenue
$152,149
$255,933
$400,657
$515,826
$670,035
$817,009
$1,020,269
$1,167,478
$1,270,236
GAAP Net Income as a
percent of revenue
12.6%
10.6%
9.9%
10.8%
10.1%
10.0%
4.3%
2.5%
3.4%
Non-GAAP Net Income as a
percent of revenue
15.2%
14.0%
13.8%
14.7%
13.6%
12.8%
7.6%
6.5%
8.1%
100 |
 Reconciliation: GAAP to Non-GAAP Results
Diluted Earnings Per Share -
Annual
FY 2006
FY 2007
FY 2008
FY 2009
FY2010
FY2011
FY2012
FY2013
FY2014
GAAP Net Income per share
$0.45
$0.60
$0.87
$1.25
$1.49
$1.83
$1.13
$0.85
$1.28
Share-based Compensation
and related tax effect per
share
$0.09
$0.18
$0.31
$0.43
$0.49
$0.47
$0.65
$0.95
$0.82
Amortization of acquired
intangible assets per share
-
-
-
-
-
-
$0.14
$0.29
$0.35
Tax Impact of Webs IP
Transfer per share
-
-
-
-
-
-
$0.03
$0.06
$0.06
Changes in unrealized (gain)
loss on currency forward
contracts included in net
income per share
$0.01
Unrealized currency
transaction loss (gain) on
intercompany loan and the
related tax effect per share
$0.01
Loss on disposal of Namex
investment
$0.36
Change in fair value of
contingent consideration
$0.06
Non-GAAP Adjusted Net
Income per share
$0.54
$0.78
$1.18
$1.68
$1.98
$2.30
$1.95
$2.15
$2.95
Weighted average shares
used in computing Non-
GAAP EPS
(millions)
42.651
45.825
46.780
45.099
45.989
45.448
39.426
35.201
34.793
101 |
 Reconciliation: GAAP to Non-GAAP Results
Free Cash Flow-
Annual
($ in thousands, except share and per share amounts and as noted)
FY 2006
FY 2007
FY 2008
FY 2009
FY2010
FY2011
FY2012
FY2013
FY2014
Net cash provided by
operating activities
$34,637
$54,240
$ 87,731
$120,051
$153,701
$162,634
$140,641
$140,012
$148,580
Purchase of property, plant,
and equipment
($24.929)
($62,845)
($62,740)
($76,286)
($101,326)
($37,405)
($46,420)
($78,999)
($72,122)
Purchases of intangible
assets not related to
acquisitions
-
-
($1,250)
-
-
($205)
($239)
($750)
($253)
Capitalization of software
and website development
costs
($2,656)
($4,189)
($5,696)
($7,168)
($6,516)
($6,290)
($5,463)
($7,667)
($9,749)
Free Cash Flow
$7,052
($12,794)
$18,045
$ 36,597
$45,859
$118,734
$ 88,519
$52,596
$66,456
Weighted average shares
used in computing Non-
GAAP EPS*
(millions)
42,651
45,825
46,780
45,099
45,989
45,448
39,426
35,201
34,793
Free cash flow per share
$ 0.17
($0.28)
$0.39
$0.81
$1.00
$2.61
$2.25
$1.49
$1.91
*GAAP weighted average/diluted shares for the full year used in FY 2006 and FY
2007 calculations, as Non-GAAP share count is not available.
102 |
 Reconciliation:
Constant-Currency/ex. Acquisition Revenue Growth Rates
Quarterly
ASIA-PACIFIC
Q1 FY12
Q2 FY12
Q3 FY12
Q4 FY12
Q1 FY13
Q2 FY13
Q3 FY13
Q4 FY13
Q1 FY14
Q2 FY14
Q3 FY14
Q4 FY14
Reported revenue growth
67%
41%
47%
28%
28%
26%
6%
4%
(11%)
(5%)
(3%)
3%
Currency impact
(22%)
(4%)
(7%)
5%
2%
(3%)
4%
4%
13%
11%
13%
5%
Revenue growth in constant
currency
45%
37%
40%
33%
29%
24%
10%
8%
2%
6%
10%
8%
EUROPE
Q1 FY12
Q2 FY12
Q3 FY12
Q4 FY12
Q1 FY13
Q2 FY13
Q3 FY13
Q4 FY13
Q1 FY14
Q2 FY14
Q3 FY14
Q4 FY14
Reported revenue growth
31%
36%
29%
18%
12%
11%
8%
3%
6%
1%
(4%)
50%
Currency impact
(10%)
1%
5%
12%
11%
2%
0%
(1%)
(4%)
(3%)
(3%)
(7%)
Revenue growth in constant
currency
21%
37%
34%
30%
23%
14%
8%
2%
2%
(2%)
(7%)
43%
Impact of FY14 acquisitions
(45%)
Revenue growth in constant
currency ex. FY14 acquisitions
(2%)
103 |
 Reconciliation:
Constant-Currency/ex. Acquisition Revenue Growth Rates
Quarterly
NORTH AMERICA
Q1 FY12
Q2 FY12
Q3 FY12
Q4 FY12
Q1 FY13
Q2 FY13
Q3 FY13
Q4 FY13
Q1 FY14
Q2 FY14
Q3 FY14
Q4 FY14
Reported revenue growth
17%
20%
23%
20%
22%
20%
15%
18%
14%
13%
2%
6%
Currency impact
0%
0%
0%
0%
0%
0%
0%
0%
1%
1%
1%
1%
Revenue growth in constant
currency
17%
20%
23%
21%
22%
20%
15%
18%
15%
14%
3%
7%
TOTAL COMPANY
Q1 FY12
Q2 FY12
Q3 FY12
Q4 FY12
Q1 FY13
Q2 FY13
Q3 FY13
Q4 FY13
Q1 FY14
Q2 FY14
Q3 FY14
Q4 FY14
Reported revenue growth
25%
28%
26%
20%
18%
16%
12%
12%
9%
6%
(1%)
21%
Currency impact
(5%)
0%
2%
5%
5%
1%
0%
0%
0%
0%
0%
(2%)
Revenue growth in constant
currency
20%
28%
28%
25%
23%
17%
12%
12%
9%
6%
(1%)
19%
Impact of FY14 acquisitions
(15%)
Revenue growth in constant
currency ex. FY14 acquisitions
4%
104 |
 Reconciliation:
Constant-Currency /ex. Acquisition Revenue Growth Rates
Annual
FY2010
FY2011
FY2012
FY2013
FY2014
Reported revenue growth
30%
22%
25%
14%
9%
Currency impact (favorable)/unfavorable
(2%)
-
0%
2%
(1%)
Revenue growth in constant currency
28%
22%
25%
16%
8%
Impact of FY14 acquisitions to growth in constant currency
(favorable)/unfavorable
-
-
-
-
(4%)
Revenue growth rate, ex FY2014 acquisitions, in constant
currency
28%
22%
25%
16%
4%
105 |
 FY2014
North America
Europe
Asia-Pacific
Total Company
Reported revenue growth
9%
11%
(4%)
9%
Currency impact (favorable)/unfavorable
-
(4%)
10%
(1%)
Revenue growth in constant currency
9%
7%
6%
8%
Impact of FY14 acquisitions to growth in constant
currency (favorable)/unfavorable
-
(10%)
-
(4%)
Revenue growth rate, ex 2014 acquisitions, in
constant currency
9%
(3%)
6%
4%
Reconciliation:
Constant-Currency/ex. Acquisition Revenue Growth Rates by Region
Annual
106 |
 Revenue and EPS Guidance*
(as of July 30, 2014)
The
Company
is
providing
the
following
assumptions
to
facilitate
non-GAAP
adjusted
net
income
per
diluted
share
comparisons
that
exclude
share-based
compensation
related
expenses,
amortization
of
acquired
intangible
assets,
tax
charges
related
to
the
alignment
of
IP
with
our
global
operations,
changes
in
the
fair-value
estimate
of
acquisition-related
earn-outs,
changes
in
unrealized
gains
and
losses
on
currency
forward
contracts,
and
unrealized
currency
transaction
gains
and
losses
on
intercompany
financing
arrangements:
FY15
ending 06/30/2015
Revenue
$1,470 -
$1,540
Revenue growth from FY 2014 period
16% -
21%
Constant currency revenue growth estimate
15% -
20%
GAAP EPS
$2.15 -
$2.65
EPS growth from FY 2014 period
68% -107%
GAAP share count
33.3 million
FY15
ending 06/30/2015
Non-GAAP adjusted EPS
$3.46 -
$3.96
EPS growth from FY 2014 period
17% –
34%
Non-GAAP share count
33.8 million
Non-GAAP exclusions
$45.4
* Millions, except share and per share amounts and as noted
107
Consolidate
d |
 Capital Expenditures Guidance
(as of July 30, 2014)
Expressed as percent of revenue
Actuals
Guidance
$63M
$63M
$76M
$100M
$80M
$101M
$37M
Consolidate
d
$46M
$79M
$72M
108 |