62
SOLUTIONS THAT FIT Investor Presentation October 25, 2016
1
SOLUTIONS THAT FIT
Investor PresentationOctober 25, 2016
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Forward-Looking Statements
This presentation contains certain statements that constitute forward-looking information within the meaning of applicable securities laws(“forwardlooking statements”), including without limitations, the statements contained in section entitled "Objectives, strategy and outlook”. Statementsconcerning D+H’s objectives, goals, strategies, priorities, intentions, plans, beliefs, expectations and estimates, and the business, operations, financialperformance and condition of D+H are forward-looking statements. The words “believe”, “expect”, “anticipate”, “estimate”, “intend”, “may”, “will”,“would”, “could”, “should”, “continue”, “goal”, “objective”, and similar expressions and the negative of such expressions are intended to identifyforward-looking statements, although not all forward-looking statements contain these identifying words.
Certain material factors and assumptions were applied in providing these forward-looking statements. Forward-looking information involves numerousassumptions including projections, completion of bookings, successful project implementation, operating expense levels, volumes and values forproducts and transaction processing services in the Canadian segment and implementation of our global operating realignment. Projections maybeimpacted by macroeconomic factors, changes in the value of the Canadian and U.S. dollar relative to other currencies, the timing of client decisioningon technology investments, the pace of implementation of technology by the customer, in addition to other factors not controllable by the Company.D+H has also made certain macroeconomic and general industry assumptions in the preparation of such forward-looking statements. Managementbelieves that the expectations reflected in forward-looking statements are based upon reasonable assumptions; however, Management can give noassurance that actual results will be consistent with these forward-looking statements. Not all factors which affect our forward-looking information areknown, and actual results may vary from the projected results in a material respect, and may be above or below the forward-looking informationpresented in a material respect.
These forward-looking statements are also subject to a number of risks and uncertainties that could cause actual results or events to differ materiallyfrom current expectations including the matters discussed in the "Business risks" section of this MD&A and include, among other things, those thatcan be found on the Company’s most recently filed Annual Information Form and the most recently filed annual MD&A for the year ended December31, 2015, copies of which are available on SEDAR at www.sedar.com. Forward-looking statements involve known and unknown risks, uncertaintiesand other factors that may cause D+H’s actual results, performance or achievements, or developments in its industry, to differ materially from theanticipated results, performance, achievements or developments expressed or implied by such forward-looking statements. Given these risks anduncertainties, readers are cautioned not to place undue reliance on such forward-looking statements. The documents referred to herein also identifyadditional factors that could affect the operating results and performance of the Company.
D+H does not undertake any obligation to update forward-looking statements should the factors and assumptions related its plans, estimates,projections, beliefs and opinions, including those listed above, change except as required by applicable securities laws.
All of the forward-looking statements made in this MD&A are qualified by these cautionary statements and other cautionary statements or factorscontained herein and there can be no assurance that the actual results or developments will be realized or, even if substantially realized, that they willhave the expected consequences to, or effects on, the Company.
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Gerrard SchmidChief Executive Officer and DirectorCEO of D+H since 2012, and previously served at CIBC as Chief Operating Officer of their retail bank, led transaction banking at Lloyds TSB Bank, and at McKinsey focusing on financial services and e-commerce.
David CaldwellChief Talent and Strategy Officer
Previously Managing Director of Corporate Development at CIBC World Markets.
EdwardHoPresident, Global Payments Solutions
Former President of Fundtech and EVP Misys Capital Markets Division.
Duncan HannayPresident, Global Lending Solutions
Previously held senior executive positions at Scotiabank and E*Trade.
William NevilleChief Operating Officer
Former D+H BoardMember. Previously Head of Citi North Am Hedge Fund Services.
KarenWeaverChief Financial Officer
Previously CFO at Brookfield Properties Canada and First Capital Realty.
KellieBickenbachChief Risk Officer
Previously Chief Risk Officer, Technology, at Bancorp and senior leadership positions at Bank of America.
Hugh CummingChief Technology Officer
Previously CTO at SecureKey and CIO at ADP.
44
Ellen Costello
Michael Foulkes
Cara Heiden
Deborah Kerr
Paul DampBoard Chair
GerrardSchmid
BradleyNullmeyer
CEO of D+H since 2012,Previously served at CIBC (COO of retail bank) and at Lloyds TSB Bank.
Retired CEO of BMO Financial Group, Director of Citigroup Inc.,D+H Director since 2014.
Retired Co-President of Wells Fargo Home Mortgage, D+H Director since 2014.
Retired President & CEO of TD Waterhouse UK, D+H Director since 2007.
Chief Product and Technology Officer of Sabre, Past Senior Executive at FICO, D+H Director since 2013.
Chief Executive Officer, Element Fleet Management Corp., D+H Director since 2001.
Managing Partner, Kestrel Capital Partners, Director since 2001
Ron Lalonde
Retired Chief Administrative Officer of CIBC, D+H Director since 2016.
Board of Directors: Experienced, Independent, Dedicated
Former CEO of First Data Corporation,D+H Director since 2016.
JonJudge
55
Enjoy privileged client access
Serving the Banking World
1) Based on D+H management determination.2) Relbanks – Top Banks in the World, 2015 ranked by asset size.
1
Our Vision: To be the leading FinTech provider to the financial services industry
66
D+H Products and Solutions – What We Do….
Providing financial institutions with software and solutions to serve their customers, compete, optimize and grow their business
Solid track record of long-term performance and growth Executing on a global growth strategy 5,500 team members globally
GTBS SolutionsPayment
technologies that modernize a bank’s payment processing
systems
Lending SolutionsSoftware and technology solutions that
streamline loan origination, management and compliance for financial institutions
Integrated Core SolutionsCore banking and channel technologies that allow banks to process and manage
data and serve their customers needs
Payments SolutionsCheque Program
Enhancement Services
Lending SolutionsMortgage Technology
Collateral ManagementStudent Lending
Global Transaction Banking (GTBS) Lending and Integrated Core (L&IC) Canada
77
Solid and Established Business Model
1) Adjusted revenues for the quarter ended September 30, 2016. 2) Non-IFRS measure, see Appendix A for details.
57%
43%Canada
U.S. and RoW
Geographically Diversified1
21%
Solid Free Cash Flow
Recurring Contracts
Q3 2016 Adjusted revenues1
Positioned In Key Growth Markets1,2
43%18%
22%
≈8,000 clients
Lending SolutionsCanadian
PaymentsSolutions
Global Payments
Integrated Core
17%
88
Drivers of Bank Investment In Technology
Large And Expanding Market Key Drivers
Globalization of commerce
Consumerization
Regulatory and compliance
Evolution of real time payments
Disruptive attackers
SaaS delivery models$200B
IT Spending
$90BExternal
Software/Service
Growing at 8%
per annum1
1. Source: Celent
99
Approximately 70% of Adjusted revenues from products where we hold market leading positions1,2
Well Positioned to Take Advantage Of Trends
Based on differentiated lending and payment products
Global Payments
U.S. Lending Compliance
U.S. Mortgage Lending
U.S. Commercial Lending
Canada Lending, Enhancement
Services & Cheques
U.S. Core Banking
1) Adjusted revenues for the quarter ended September 30, 2016. 2) Non-IFRS measure, see Appendix A for details.
1010
Relative Weighting of Business Segments
Q3 2016 Adjusted revenues1,2
%
Global Payments
Canadian Payment Solutions
Integrated Core
U.S. Lending
22%
18%
17%
18%
100%
Canadian Lending 25%
1) For the quarter ended September 30, 2016. 2) Non-IFRS measure. See Appendix A for details.
11© D+H 2016. All rights reserved. 11
Q3 Adjusted Revenue1 Composition
26%
21%18%
14%
11%
8%
SaaS
Transaction Processing
Canadian Payments Products/Solutions
Maintenance
Software Licenses
Professional Services
Other2%
+ = 79%
Contractually Recurring Revenue Long Term Contracts with Revenue Recurring in Nature
SaaS & Maintenance Transaction Processing & Canadian Payments Products
40% 39%
1) Non-IFRS measure. See Appendix A for details.
1212
$1.80 $1.82$2.02
$2.34
$2.56
$1.47
2011 2012 2013 2014 2015 Q32016YTD
166 168 165 171 189141
14 2982
181
218
132
69
179197
247
352
475
329
2011 2012 2013 2014 2015 Q32016YTDGTBS L&IC Canada
627 639 655 651 684
537
29 57
212
508
595
444
249
276
656695
866
1,159
1,528
1,258
2011 2012 2013 2014 2015 Q32016YTDGTBS L&IC Canada
27% 28% 31%30%
Solid Financial Performance
Adjusted revenues1,2
(All figures in C$ millions)
Adjusted EBITDA1,2 Adjusted Net Income per Share1
(All figures in C$ millions) (All figures in C$)
1) Non-IFRS measure. See Appendix A for details.2) Totals may not add due to rounding.
Adj. EBITDA Margin2
29% 26%
56
1313
204
282
193
103 94 90
58103
70
27
50
50
Strategic Uses of Cash
Adjusted Net Cash From Operating Activities1
C$ millions
1. Non-IFRS measure. See Appendix A for details.
2014 2015 Q3 2016 YTDAdjusted Net Cash From Operating Activities1
Net Debt Repayment
Capital Expenditures
Cash Dividends
Effect on cost of capital
Growth velocity
Risk
Current opportunities/costs
Shareholder returns
Effect on cost of capital
Growth velocity
Risk
Current opportunities/costs
Shareholder returns
Decision Drivers
1414
Long Term D+H Financial Objectives
Long Term Growth Objectives
Adjusted revenue and Adjusted EBITDA growth of 5% to 7%
High single-digit growth in Adjusted net income per share
Consolidated Adjusted EBITDA margins of 30%
Balanced reinvestment of cash in future business growth, debt repayments and risk management
Achieving an optimal capital allocation
1515
Strategic Objectives
Focused on growing and sustainable earnings
• Build on market-leading position in global payment technologies
• Build on capabilities in lending and integrated core solutions
• Defend market positions in Canada while expanding into additional customer segments and value propositions
• Invest in our business to promote long-term revenue growth and increase operating efficiency
• Continue to align the Company around a common brand
• Effective use of capital resources
1616
Solid Demand for Our Products
• Banks investing in FinTech for competitive advantage • “Consumerization” of banking technology• Increasing regulatory complexity • Legacy IT updating and replacement• Payment technology is a top priority IT spend for banks
Well-positioned for FinTech Market Opportunities
• Addressable market of over 12,000 U.S. banks and credit unions and the world’s largest global banks
• Market-leading in-demand products in payments and lending• Cross-selling opportunities with nearly 8,000 clients• Deep technical capability
Proven Business Modeland Strategies
• Long-term contracts• Highly recurring revenues with attractive margins• Strong cash flows to support growth, deleveraging, and dividend• Expecting medium term synergies and accretion from Fundtech
acquisition
Investment Thesis - DH Corporation (TSX:DH)
1717
D+H Financial
1818
$318 $370 $367 $445 $584 $656 $695 $866 $1,159
$1,528 $1,258
2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 Q3 2016YTD
$679M $923M$738M
$901M $1.1B $1.0B$1.3B
$2.4B
$3.2B $3.0B3$3.4B
90%Payments solutions % of
Adj. revenues 1
2004 2006 2008 2009 2011 2012 2013 2014 2015 Q3 2016
AVS
D+H FinTech Journey and Transformation
1) Non-IFRS measure. See Appendix A for details.2) Debt to EBITDA ratio, net of up to cash in bank of C$40M in 2014 and Q1 2015, C$50M thereafter.3) As of market close September 30, 2016.
Equity Market Capitalization
(C$ millions, unaudited)
19%Payments solutions % of Adj. revenues 1Revenue Growth and Diversification
Adjusted revenues1
Debt/EBITDA1
1.58X 1.26X 1.38X 2.08X 2.03X 3.05X 2.11X2 3.19X2 3.07X2,4
4) As reported for covenant purposes.
1919
Canadian Segment
Service AreaAdj. Rev. 1
2015YoY
Growth2015 % of Total
Lending $367 24% 5%
Collateral Management Solutions - Lien Registry & Collateral Recovery
Student Lending- Canada Student Loans Program Administration
Canadian Mortgage Technology - Broker Mortgage Origination Platform
Payments $317 21% 4.6%
Cheque supplier to Canada’s banks
Enhancement Services
Total Adj. revenues1 $684 45% 5%
Total Adj. EBITDA1 $189 40% 10%
Adj. EBITDA Margin1 28%
$1.5B ANNUAL ADJ. REVENUES1
$475M ADJUSTED EBITDA1
31% ADJUSTED EBITDA MARGIN1
3%+ DIVIDEND YIELD
Lending & Integrated Core
Service AreaAdj. Rev. 1
2015YoY
Growth2015 % of Total
Lending $326 21% 17%
LaserPro- Compliant Loan Documentation Solution
Mortgagebot POS / LOS - Loan Application and Origination Software
CreditQuest/CreditPath- Commercial Lending Software
Integrated Core $269 18% 17.0%
PhoenixEFE & UltraData - Core Banking Technology SolutionsChannel Products - Online, Mobile, Branch, Client SolutionsTotal Adj. revenues1 $596 39% 17%Total Adj. EBITDA1 $218 46% 20%
Adj. EBITDA Margin1 37%
Global Transaction Banking Solutions
Service Area
Adj. Rev.1 2015YoY
Growth2015 % of Total
GTBS Segment $249 16% 8%
Payments- Global PAYplus- U.S. Payments
Cash Management- Global CASHplus- CashPLUS
Financial Messaging- Global Messaging Plus- All financial messaging types including “SWIFT”
Merchant Services- eBilling and Remote Deposit Capture
Total Adj. revenues1 $249 16% 8%
Total Adj. EBITDA1 $69 14% na
Adj. EBITDA Margin1 28%
D+H Global Scope
8,000 customers 70 countries
29 of the top 50 global banks8 of top 10 U.S. banks
C$ Mil.
Business Structure Overview - 2015
1) Non-IFRS measure. See Appendix A for details. .
2020
$3,030 M
$459 M
$896M
$624 M
Bonds Credit Facility
Convertible Debentures Common Equity
Enterprise Value = $5.0B 1
Strong and Flexible Capital Structure – Q3 2016(All figures in C$ unless otherwise indicated, unaudited)
Secured Credit Facilities
• Non-Revolver: C$673M (US$ Denominated debt)• Revolver: C$223M• Revolver-Undrawn: C$327M
Secured Bonds
• C$100M and C$524M (US$ Denominated debt)
Convertible Debentures
• C$459M• 6% Convertible Unsecured Subordinated
Debentures maturing September 30, 2018 Conversion price of C$28.90
• 5% Convertible Unsecured Subordinated Debentures maturing September 30, 2020 Conversion price of C$52.75
Equity Capitalization
• 106.8 Million Shares Outstanding
1) Share price as at September 30, 2016 of C$28.36
2121
Financing Strategy and Current Debt Structure – Q3 2016
Historical Debt Balance and Leverage Ratio 2
(C$ Millions)
3
• Diversified funding sources
• Mix of fixed and floating rate debt
• Well staggered debt maturities
• Diversified institutional / retail investor base
1) As at September 30, 2016 before deferred financing costs2) Excludes convertible debentures
3) Debt/EBITDA ratio adjusted to remove the impacts of foreign exchange fluctuations4) Net Debt to EBITDA ratio includes LCs and is net of up to cash in bank of C$40M in 2014 and Q1 2015, C$50M thereafter.4) As reported for covenant purposes.
934 781 851
1,552 1,624 1,648 1,536 1,518 1,520
2.87x2.11x 2.34x
3.39x 3.44x 3.19x3.02x 2.998x 3.07x
2013 2014 Q1 2015 Q2 2015 Q3 2015 Q4 2015 Q1 2016 Q2 2016 Q3 2016
Debt Balance Debt / EBITDA
Debt Structure1
Weighted Average Debt Balance
Interest Rate
Term to Maturity (Years)
(C$M)
Credit Facility
BA/LIBOR + 2.25%; PRIME +2.25%
3.6 896
Bond 6.68% 0.7 80Bond (US$63M) 6.59% 4.5 83Bond (US$32M) 4.94% 5.7 41Bond 6.01% 6.9 20Bond (US$225M) 5.76% 6.9 295Bond (US$80M) 4.32% 5.6 105
Bonds 5.70% 5.7 624Convertible Debentures 5.50% 3.0 459
Total Debt 4.71%1 4.11 1,9791
4
2222
Appendices
Product/Service Profiles
Corporate
2323
Product Offerings
Service Areas ProductsGlobal
Transaction Banking
Solutions (GTBS)
GTBS Segment:• Global Payment Technology • Cash Management• Financial Messaging• Merchant Services
• Global PAYplus – integrated global payments solution• PAYplus and ACHplus – U.S. wire transfer solutions• Global Messaging Plus – financial messaging e.g. SWIFT• Global CASHplus – cash management solution• NetDeposit – remote deposit capture and e-Billing
LendingSolutions
L&IC Segment• Mortgage Lending• Consumer Lending• Commercial Lending
• LaserPro compliant loan documentation solution • POS - SaaS loan application – mortgage / consumer / commercial• LOS - SaaS loan origination – processing / compliance / closing• CreditQuest and CreditPath commercial lending solutions
Canadian Segment:• Mortgage Technology• Collateral Management • Student Lending
• Expert and Express broker-originated mortgage platform• Lien registration and collateral recovery management• Canada Student Loans Program and provincial programs
Integrated Core
L&IC Segment• Core • Channel• Optimization
• PhoenixEFE and UltraData core banking platforms• Bank branch and customer self-service channel products including
teller/online/mobile.• Compushare C3 full service cloud hosting
Payments Solutions
Canadian Segment:• Cheque programs• Enhancement Services
• Personal and business cheques• Credit Monitoring, Identity Protection, and Payment Management
subscription services for bank cheque and credit card customers
2424
Service Areas Key Business Drivers
Global Transaction
Banking Solutions
GTBS Segment:• Global Payment Technology • Cash Management• Financial Messaging• Merchant Services
• Proliferation of payment types, channels, and volumes• Bank focus on fee-based transaction banking• Replacement of outdated payment systems • Demand for technology solutions for regulatory compliance• Growth & electronification of corporate payments• Increasing bank spending on 3rd party technology
LendingSolutions
L&IC Segment:• Mortgage Lending• Consumer Lending• Commercial Lending
Canadian Segment:• Canadian Mortgage Technology• Collateral Management Solutions• Canadian Student Lending
• Regulatory changes / Bank demand for lending products• Residential mortgage activity• Economic growth, particularly in the auto sector• Post-secondary university and college enrolment levels
Integrated Core
L&IC Segment:• Core banking platforms• Channel Solutions• Optimization
• Core technology spend• Demand for self-service (e.g. online and mobile)• Migration to cloud hosting
Payments Solutions
Canadian Segment:• Cheque program• Enhancement Services
• Cheque usage • Large Canadian banks’ revenue strategies• Banks embracing new consumer product offerings
Product Offerings
2525
Global Transaction Banking Solutions Segment
2626
High growth market - payment technology is top priority for bank IT spend
Mission-critical payment solutions for banks
Profitable growth for D+H
Value for D+H Shareholders
Extends and broadens our relevancy to U.S. banks, including the largest U.S. banks
Fundtech - Strategic Expansion into Global Payments
2727
Strategic and Accretive Acquisition - Synergy
New clients plus new products for existing clients
LaserProMortgagebot POSMortgagebot LOS
Commercial Lending
Financial MessagingPayables/Receivables Automation
Payment TechnologyWire ServicesCash Management Merchant Services
Integrated CoreChannel Solutions
Optimization
Increased cross-selling
potential
2828
Legacy Banking Exceptionally Complex
CUSTOMER CUSTOMER
ACCOUNTSYSTEM
DOMESTIC CASHMANAGEMENT
SWIFT DOMESTIC HIGH-VALUEPAYMENTS SYSTEM
DOMESTIC LOW-VALUEPAYMENTS SYSTEM LOCAL ACH
INTERNATIONALPAYMENTS
INFORMATIONREPORTING
EDI/DIRECTTRANSMISSION
CHECKPROCESSING
GLOBAL CASHMANAGEMENT
CLIENTSERVICE
RISK/AML
WIRES
The Current Infrastructural Landscape: A ‘Complex Problem’
Source: Celent
2929
Simplifying the Banking Ecosystem
Tablet
Mobile
Internet Banking
New York London Prague Hong Kong
Suppliers and
CustomersCorporates
Paris
Denver
New YorkSaaS Origination Execution
Financial Networks
Clearing and Settlement
€
$
¥
£
Bank Operations and Branches
PAYMENTS
FINANCIALMESSAGING
MERCHANTSERVICES
Geneva
CASHMANAGEMENT
MERCHANT SERVICES
CASHMANAGEMENT
Online Channels
Enables a single solution across a bank’s entire global organization
Source – D+H Management.
3030
Americas 47%
EMEA 39%
APAC14%
SaaS 33%
Maintenance 23%
Services 35%
License 8%
Hardware 1%
$59 $68
$242 $263
2013 2014
Adj. Revenues
Adj. EBITDA
Historical Business Summary - Fundtech
Founded in 1993 – Fundtech, now referred to asGlobal Transaction Banking Solutions (“GTBS”), inD+H reporting, brings deep domain expertise inpayment solutions with approximately 1,600employees in 19 offices worldwide, includingdevelopment centers in the U.S., Israel, India, andthe UK
Diverse and growing client base of global moneycenter banks, mid-size banks and credit unions,non-bank financial institutions, sovereigns andcorporates, with limited client concentration risk
Approximately 1,200 clients including: 59 of the top 100 U.S. banks 7 of the top 10 U.S. banks 29 of the top 50 global banks
Products support high margin transaction bankingrevenue at a lower total cost of ownership thandisparate legacy systems
Product suite built on contemporary Service-Oriented Architecture (SOA) principles
Acquired by D+H April 30, 2015
2014 Revenue by Type2014 Revenue by Geography
Financial summary(1)Business Overview(US$ millions)
~56% Recurring Revenue
1) Non-IFRS measure. See Appendix A for details.
3131
Payment Technology’s Critical Role in Global BankingBanks must capture, manage, process and clear multiple payment types
SWIFT
ATM
MOBILE
TABLET
INTERNET BANKING
BRANCHES
DIRECTBANK OPS
Multi-Currency Multi-Channel
$ € £
₩
¥₨₹
Banks
Payment Technology
Banks need payment technology to compete, grow and manage
3232
Immediate Payments Poised To Transform Banking
5 Seconds
$ ¥
Transaction Initiated
Transaction Completed
Early stage of payment modernization trend expected to impact most banks
Time to Settlement
3333
Payment Hub Penetration in the Banking Industry
$10 to $50billion
$50 to $100billion
Over $100billion
33%
10%
2%
Significant opportunity for D+H across all asset tiers Significant opportunity for D+H across all asset tiers
1) Based on D+H Management estimate.
Banks by asset size in US$1
3434
Growth Catalysts in Our Available Markets
Estimated annual bank spend for our product types is $5-6 billion2
Primary Reason for Investing in Payments Capabilities1Percentage of Respondents
43%
31%
19%
Competitive Advantage
Process Improvement
Functionality Benefits
1) Source: CEB TowerGroup Technology Adoption and Investment Survey, 2013.2) Based on D+H management estimation.
Expected Spend on Payment Hubs1
Percentage of Respondents
No Change23% Significant
Increase 32%
ModerateIncrease
32%
Decrease13%
3535
Recurring Revenue and High Customer Retention
Adding a payment hub customer means a multi-year revenue stream
renewal rate on payment hub contracts
average annual revenue growth following initial deployment1
of payment hub revenue growth is from existing customers
Add-on licenses, maintenance for existing clients increases revenue stream
1. Based on 2010 client cohort for period from 2010 through 2014. Source D+H Management.
~ 80%
14%
98%
3636
GTBS Provides Deep Capability Set in Banking Ecosystem
PaymentsAllows financial institutions to consolidate multiple payment applications onto one platform and process payments across the globe
Financial Messaging Enables the efficient exchange of standardized transaction messages over a secure electronic network
Cash ManagementEnables financial institutions to offer their customers the functionality to effectively manage their cash and liquidity while optimizing their working capital
Merchant Services Modern payment solutions for merchant customers such as Remote Deposit Capture and Electronic Invoicing
Estimated annual bank IT spend in all of GTBS markets is ~US$5-6B(1)
1. Source – Prospectus Supplement dated April 1, 2015.
3737
GTBS Segment - Payments
OverviewOverview Flagship Product: Global PAYplus
Next-generation transaction banking software that allows FIs the ability to consolidate multiple payment applications onto one platform and process payments across the globe in a single-instance, globally extensible solution.Captures, manages and processes payments in local and international environments sourced from multiple initiating channels and settled to multiple clearing networks globally.
Within the FinTech industry, this type of solution is commonly referred to as a payment hub.
Competitive Differentiation: Multi-payment / channel /currency / entity capabilities, functionally rich, rules-based environment, high performance and scalability
Target clients: Tier 1 and 2 banks for GPP; Tier 3 and 4 banks for U.S. Payments
Delivery mode: Tier 1 and 2 banks On-site. Tier 3 and 4 banks SaaS delivery.
Global Payments
U.S. Payments
PAYMENTS
Centralizes payment systems and activity
Supports high value, low value and real-time payments
Multi-currency, multi-lingual, mutli-entity payments
End-to-End straight through processing
Fedwire and ACHplus
Focus on mid to small size U.S. banks
Revenue Model• Subscription
• Maintenance
• License
• Professional Services
3838
GTBS Segment - Payments
Global PAYplus
Customer Channels
Corporate Clients
Bank Clients
Branches
Electronic Banking
Internet Banking
Mobile
ClearingChannels
Check Clearing Networks
ACH Networks
Wire Networks
Card Networks
Interbank Networks
Immediate Payment Networks
Channel Management
OrderManagement
Clearing & Settlement
Messaging & Advising
Origination Validation Audit & Authorization ISO20022Validation Routing Workflow STP Fed/NACHAAdvising & Statement Enrichment & Mapping Routing, Fees & Validation SWIFT
Core Payment Functionality
Straight Through ProcessingValidation & Enrichment
FX
Warehouse
Compliance
Routing
Posting
Account Derivation
Fees
Monitoring
Value-Added CapabiliesDashboard Liquidity & Risk
Management Transformation Reporting & Analytics
O r c h e s t r a t i o n / C o n n e c t i v i t y
3939
GTBS Segment - Cash Management OverviewOverview Drivers and Value PropositionDrivers and Value Proposition
Market demand driven by geographic expansion, increased client demand for innovation, revenue growth
Value proposition: Improves operational efficiency with a multi-region, multi-currency cash management solution
Flagship Product: Global CASHplus Cash, liquidity, and working capital
management solution for banks and corporate clients.
Supports straight-through processing.
Comprehensive payment initiation, both wire and ACH;
Integrated payables and receivables management;
Supply chain finance;
Cash forecasting and balance reporting; and
Mobile banking.
Target clients: Tier 1 - 3 banks Delivery mode: On-Premises Target Geographies: APAC, EMEA, and
Americas
Revenue Model• Subscription
• Maintenance
• License
• Professional Services
4040
GTBS Segment - Financial Messaging
OverviewOverview Drivers and Value propositionDrivers and Value proposition
Market demand driven overall growth in payment transaction volumes, growth in corporate SWIFT access (a product that is highly relevant for any multi-national corporation), and implementation within smaller banks seeking to offer electronic payment products.
Value proposition: cost reduction, increased operational efficiency, easy integration with existing systems, improved usability and transparency
Ability to handle multiple formats, integrated payment logic, integrated compliance, work flow management, performance/scalability
Provides connectivity to networks employing SWIFT and non-SWIFT formats;
Interfaces with many banking applications Supports advanced straight-through payment
processing
Flagship Product: Global Messaging Plus Single-instance platform which enables the
exchange of standard transaction messages over secure networks with capacity for up to 7 million messages per hour. Provides financial institutions and corporate clients with connectivity to interbank services, such as the SWIFT messaging network.
Target clients: Tier 1 - 3 banks and multi-national corporations
Delivery mode: Primarily SaaS but available on premises
Target Geographies: Europe, Americas and APAC
Revenue Model• Primarily SaaS Subscription
4141
GTBS Segment - Merchant Services
OverviewOverview Drivers and Value PropositionDrivers and Value Proposition
Market Drivers: Market demand driven byregulatory requirement to process checkselectronically, competitive pressures toprovide the offering, and quick processing ofreceivables, reduced errors and fraud
Value proposition: security, risk mitigation and control, compliance and scalability
Centralized control of risk management, user management and system management;
Flexible tools for fraud monitoring, deposit review and reporting; and
Out-of-the-box compliance with security standards and regulatory requirements.
Flagship Product: NetDeposit
Merchant Services is a platform which primarilyprovides white-label remote deposit capture, e-billing products and internet payments solutionsfor banks and corporate customers
Secure and scalable remote deposit capture solutions scan cheques and transmit scanned images and/or ACH data to financial institutions for clearing, and settlement
Electronic invoice presentment and payment, which enables corporate clients to receive invoices and make or receive payments online; and
Target clients: Tier 2 through Tier 4 banks andcorporate clients
Delivery Model: Primarily SaaS Target Geographies: Asia Pacific, Americas,
Europe, Middle East and Africa
Revenue Model• SaaS Subscription
• Maintenance
• License
• Professional Services
4242
Lending & Integrated Core Segment
Lending
4343
L&IC Segment - Lending Solutions
The combination of LaserPro and other lending products together with the POS and LOS solutions positions D+H as the leading Lending Solutions provider to U.S. banks, community banks, credit unions and specialty lenders
• Our offerings enable the origination, compliance, and management of consumer, mortgage and commercial loans
• LaserPro - the Number 1 loan documentation compliance solution in the U.S.
• Mortgagebot POS “Point of Sale” and LOS “Loan Origination System” lending solutions serving U.S. banks, credit unions and mortgage lenders
• CreditQuest and CreditPath commercial lending underwriting, risk management, and portfolio management
Revenue Model
• Subscription
• Maintenance
• License
• Professional Services & Other
• Transaction Revenue
4444
The market’s most comprehensive lending solutions provider1
Deep Subject Matter Expertise Across Lending TypesServing the broader commercial, consumer and mortgage lending marketplace
Mortgages
Commercial Loans
Consumer Loans
Small Business
1) Based on D+H management estimation
4545
LaserPro serves nearly 25% of all U.S. financial institutions
Leader in Compliant Loan Documentation Technology Meets federal and state regulations for all loan and collateral types
3,300 clients
25% of all U.S. financial institutions
Complete, CompliantLoan Documentation and Origination Solution 50 U.S. States
1) Based on D+H management estimation.
1
4646
Lending & Integrated Core Segment
Integrated Core
4747
L&IC Segment - Integrated Core Solutions
Core banking and channel solutions - Teller, Online and Mobile Banking, Payments, and Cloud
• Innovative channel solutions support self-service, business intelligence and branch automation
• Online and Mobile banking provides key capabilities for retail bank customers
• Core processing platforms enable−Transaction recording / posting−Financial accounting−Content management−Payments solutions−Business Intelligence
• Cloud and Infrastructure solutions move mission critical data and systems to private cloud and provide lower cost to clients, with higher security and technology currency
Teller Platform –Encore, EZTeller
Online and Mobile Banking
Cavion, uBanking
Cloud Solutions / IaaS - Compushare
Business Intelligence -Touche
PaymentsDPXPay, EFT, EBPP
Core Banking Channel Solutions
4848
Contemporary Integrated Core Products
Customer data
Deposit/loan transactions
Interest calculations
Interface to general ledger
Comprehensive reporting tools
Detailed view of customer
Fast product integration
SaaS or license
4949
Product Matrix: Integrated Core
Description Consolidates & records all transaction & customer information Integrates all other applications, calculates interest, ensures transactions are
processed to the right customer accounts.
Value Proposition
Customer oriented (vs. transaction oriented) 360 degree view of bank’s customer at the click of button Enables easier launch &integration of new products & applications
Pricing Model Subscription, license and services
Competitive Advantage Modern architecture; integrated applications
5050
Product Matrix: Channel Solutions
Description Software for teller line, account servicing and call center
Value Proposition
Enhanced customer experience, reduced costs and increased efficiencies for the bank
Pricing Model Subscription based; per user/seat; transaction basedCompetitive Advantage Best of breed; easily integrated into core
Description Software for mobile and online banking
Value Proposition
Enhanced customer experience, reduced costs and increased efficiencies for the bank
Pricing Model Subscription based; per user/seat; transaction basedCompetitive Advantage Best of breed; easily integrated into core
Branch
Self‐Service
5151
Online BankingMobile Banking
Teller Applications
Client Management
Deposit Transactions
Customer informationPaymentsFinancial
accounting
Integrated Core - Cross-Sell Opportunity
Top Four U.S. Provider of Core Banking Technology
Channels Core Cloud
5252
Canadian Segment
5353
Meeting future needs of Big Five drives growth
Canada’s FinTech Leader
Serving 1,000 clients
Regional
Automotive Finance
Mono-lineLenders
Credit Union
D+H
5454
00
Market-leading positions in Canadian lending
Lending Solutions LeadershipD+H serves Canada’s lending ecosystem from front to back
17,000 mortgage broker desktops connect to over 70 lenders
4.3M lien registrations and 560,000 recovery assignments annually
$22B of student loans administered for 1.7 million students
17,000 mortgage broker desktops connect to over 70 lenders
4.3M lien registrations and 560,000 recovery assignments annually
$22B of student loans administered for 1.7 million students
5555
Credit UnionsBanks
Deep client engagement creates new growth opportunities
Payments Solutions Leadership
Provide direct services to clients’ customers
20M personal accountholders
2M business accountholders
Strong cash flow business
Recurring revenue model
Provide direct services to clients’ customers
20M personal accountholders
2M business accountholders
Strong cash flow business
Recurring revenue model
Canada’s Go-to Provider
Personal Cheques
PaymentManager
EnhancementServices
Business Cheques
5656
Canadian Segment - Canadian Mortgage Technology
• D+H Expert is a web-based residential mortgage origination solution that connects brokers with more than 70 banks/lenders and processes $80B+ of transactions annually‒ Application creation and submission, compliance,
marketing and reporting
• D+H Express automates the mortgage underwriting process‒ Provides clients with credit risk, cross-portfolio
exposure, and portfolio trends
• D+H Exchange provides flexible and secure document management
• Brokers originate 25-30% of all residential mortgages (40% of first-time home buyers)1
start
Credit bureaus
MortgageInsurersInsurance
companies
Express
Bank sales specialists
Mortgage brokers
Banks/Lenders
Expert
Recurring Revenue Model
• Blend of value and number of mortgages funded on our platform
• D+H paid by banks/lenders on basis of mortgages funded
1. Canadian Association of Accredited Mortgage Professionals (CAAMP), Mortgage Insight Report, December 2013.
5757
Canadian Segment - Collateral Management Solutions
Recovery Services• Market-leading integrated process and technology solutions for:
– Location, recovery, transportation, appraisal, and remarketing of automotive, marine and RVs
– Insolvency management
– Unsecured recoveries
– Real property recovery
• Leverage technology to link hundreds of independent recovery organizations across Canada
Banks/Lenders
Public Registries
Registry Services• Canada’s leading provider of technology and services for
search and lien registration management
• Automated links to all provincial and federal government registries to facilitate PPSA, Corporate, land, and Bank Act security transactions
– 4M+ lien-related transactions processed per year
– D+H eSearch is a web-based solution that fully meets global KYC standards
– Provides a managed service for the registration of Mortgage Discharges
Recovery Suppliers
Bankruptcy Trustees
Revenue Model Revenue Model
• Flat fee per transaction type (search, registration, amendment)
• Typically paid by bank customer at time of sale (e.g., contract for auto purchase)
• Recurring revenue based on term contracts and continuing volumes year-over-year
• Fees based on percentage of value of recovered or remarketed assets plus a file management or workflow fee
• Volumes growing due to higher lending activity
D+H is Canada’s leader in Lien Registration Management and Asset Recovery Technology
5858
Canadian Segment - Student Lending
DischargeRepaymentMaintenanceOrigination
• Document gathering and validation
• Adjudication• Funds disbursement• Customer service
• Product accounting• Payment processing• Statement issuance• Borrower communications• Customer service
• Repayment counseling• Campaign strategy and
management• Portfolio management• Loan restructuring
• Discharge of fully-amortized loans
Provincial Govts BanksFederal
Govt
• 1.7M post-secondary students serviced
• Customer loan portfolio of $22B
• D+H has been awarded the new Canada Student Loans Program contract.
• D+H expects to continue under the current terms, which were recently extended, until the new system becomes operational which is expected to be in by April 2018
• Eight year initial term with a further seven years at the Government’s option
Contract Renewal• A monthly servicing fee per student
based on status
• Servicing incentives
• Professional services
Recurring Revenue Model
1) Includes Federal Government and certain Provincial governments.
Exclusive program administrator for the Canada Students Loans Program1
5959
Canadian Segment - Payments Solutions
− Subscription-based value-added solutions that banks use to drive loyalty, increase acquisitions and enhance revenue from their banking customers
Credit UnionsBanks
Bank and Credit Union Customers
Credit Rating Agencies
Cheques PaymentManager
EnhancementServices
• Market leader in Canadian cheques supply
− 20 Million personal accounts
− 2 Million small business accounts
• Supplier to all major Canadian banks
• Reliable source of revenue and cash flow
Enhancement Services
Recurring Revenue Model• Subscription revenue is monthly from banks’ customers
• Additional revenue opportunity through increased deposit account customers, lending and insurance customers
Leading supplier of cheques to Canada’s Financial Institutions
Cheques
− Enables new bank customers to easily transfer their existing pre-authorized payments to their new account or credit card
6060
Appendix A - Non-IFRS Financial Measures
This presentation is prepared in accordance with International Financial Reporting Standards ("IFRS"). D+H reports several non-IFRS financialmeasures, including "Adjusted revenues", "Constant Currency", “Proforma Adjusted revenues”, "EBITDA", "EBITDA margin" (EBITDA divided byrevenues), "Adjusted EBITDA", "Adjusted EBITDA margin" (Adjusted EBITDA divided by Adjusted revenues), "Adjusted net income", "Adjustednet income per share" and "Adjusted net cash from operating activities". D+H also reports "Debt to EBITDA ratio", which is also not a definedterm under IFRS. See "Non-IFRS financial measures and key performance indicators" in D+H's MD&A for the three and nine months endedSeptember 30, 2016 for a more complete description of these terms and for reconciliations to their most directly comparable IFRS measure,where applicable. Any non-IFRS financial measures should be considered in context with the IFRS financial statement presentation and shouldnot be considered in isolation or as a substitute for IFRS revenues, net income or cash flows. Furthermore, D+H's financial measures may becalculated differently from similarly titled financial measures of other companies.
For all non-IFRS measures, refer to the Management Discussion & Analysis, Section 10.1 Non-IFRS financial measures and key performanceindicators for additional information and reconciliation to IFRS measures. Also refer to section 10.2 Non-IFRS financial measures and keyperformance indicators - Outlook for additional information and reconciliation of the revised 2016 outlook to IFRS measures.
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DisclaimerThis documentation is a presentation of general background information about D+H’s activities and is current as of the date of the presentation. It is information ina summary form and does not purport to be complete. It is not intended to be relied upon as advice to investors or potential investors and does not take intoaccount the investment objectives, financial situation or needs of any particular investor. These should be considered, with or without professional advice, whendeciding if an investment is appropriate.
The information contained in this presentation is derived from otherwise publicly available information concerning D+H and does not purport to be all-inclusive or tocontain all the information that an investor may desire to have in evaluating whether or not to make an investment in D+H. The information has not beenindependently verified and is subject to material updating, revision and further amendment, and is qualified entirely by reference to the D+H’s publicly disclosedinformation. Without limiting the generality of the foregoing, the selected financial information included in this presentation is qualified in its entirety by, and shouldbe read together with D+H’s Unaudited Condensed Interim Consolidated Financial Statements for the three and nine months ended September 30, 2016 as wellas all accompanying Management’s Discussion and Analysis, all of which are available on SEDAR at www.sedar.com.
No representation or warranty, express or implied, is made or given by or on behalf of D+H or any of its affiliates or subsidiary undertakings or any of the directors,officers or employees of any such entities as to the accuracy, completeness or fairness of the information or opinions contained in this presentation and noresponsibility or liability is accepted by any person for such information or opinions. In furnishing this presentation, D+H does not undertake or agree to anyobligation to provide the attendees with access to any additional information or to update this presentation or to correct any inaccuracies in, or omissions from, thispresentation that may become apparent. No person has been authorised to give any information or make any representations other than those contained in thispresentation and, if given and/or made, such information or representations must not be relied upon as having been so authorised. The information and opinionscontained in this presentation are provided as at the date of this presentation. The contents of this presentation are not to be construed as legal, financial or taxadvice. Each prospective investor should contact his, her or its own legal adviser, independent financial adviser or tax adviser for legal, financial or tax advice.
The securities of D+H have not been and will not be registered under the United States Securities Act of 1933, as amended (the "U.S. Securities Act") and may notbe offered or sold in the United States absent registration or an applicable exemption from the registration requirements of the U.S. Securities Act and applicablestate securities laws. This presentation does not constitute or form part of any offer or invitation for the sale or purchase of securities or any of the assets, businessor undertaking described herein nor shall it or any part of it form the basis of or be relied on in connection with, or act as any inducement to enter into, any contractor commitment whatsoever. Recipients of this presentation who are considering acquiring securities of D+H are reminded that any such purchase or subscriptionmust not be made on the basis of the information contained in this presentation but are referred to the entire body of publicly disclosed information regarding D+H.
This Presentation is being supplied to you solely for your information and may not be reproduced, further distributed or published in whole or in part by any otherperson. Distribution of this presentation may be restricted or prohibited by law. Recipients are required to inform themselves of, and comply with, all suchrestrictions or prohibitions and D+H does not accept liability to any person in relation thereto.
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Investor Relations Contacts:
Karen H. WeaverExecutive Vice President and Chief Financial Officer
[email protected] 696 7700www.dh.com
