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First Data Corporation's (FDC) CEO Frank Bisignano on Q1 2016 Results - Earnings Call Transcript

Q1 2016 Results Earnings Conference Call

April 25, 2016, 08:00 AM ET


Peter Poillon - Senior Vice President, Investor Relations

Frank Bisignano - Chairman and Chief Executive Officer

Himanshu Patel - Chief Financial Officer.


George Mihalos - Cowen & Company

Sara Gubins - Bank of America Merrill Lynch

Darrin Peller - Barclays Capital

Bryan Keane - Deutsche Bank

Ashwin Shirvaikar - Citigroup

Lisa Ellis - Bernstein

Tim Willi - Wells Fargo

Andrew Jeffrey - SunTrust

James Friedman - Susquehanna

James Schneider - Goldman Sachs

Neil Doshi - Mizuho

Craig Maurer - Autonomous

Glenn Greene - Oppenheimer

Arun Seshadri - Credit Suisse


Good morning, ladies and gentlemen. Welcome to the First Quarter 2016 First Data Corporation Earnings Conference Call. My name is Vanessa and I will be your operator for today's call. At this time, all participants are in a listen-only mode. Following the prepared remarks, there will be a question-and-answer session. [Operator Instructions]. As a reminder, this conference is being recorded for replay purposes.

I would now like to turn the presentation over to Mr. Peter Poillon, Senior Vice President, Investor Relations. You may begin, sir.

Peter Poillon

Thank you, and good morning everyone, and welcome to First Data's first quarter 2016 earnings conference call. Our call today is being hosted by Frank Bisignano, Chairman and Chief Executive Officer of First Data. Joining Frank on the call is Himanshu Patel, Chief Financial Officer. Frank and Himanshu will be referencing a slide presentation during their prepared remarks. A copy of the slide presentation as well as our earnings release and supplemental schedules are available on our website at

I would like to remind you that any forward-looking statements made during today's call are subject to risks and uncertainty. Factors that could cause actual results to be materially different than those expressed in our forward-looking statements are described in today's presentation and in our 10-K filed on February 25, 2016. We also will discuss items that do not conform to generally accepted accounting principles. We reconcile those measures to GAAP measures in the appendix of the presentation and as part of the quarterly results press release.

With that, I will hand the call over to Frank.

Frank Bisignano

Thank you and good morning, everyone. It is a pleasure to be on this call this morning. Let me start with slide three and discuss some of the highlights of the quarter. Our overall first quarter financial results were good. We saw a 5% in constant currency revenue growth and solid margin expansion through positive operating leverage that resulted in 13% EBITDA growth and strong free cash flow.

In our segments this quarter, GFS grew 12%, NSS was up 5% and GBS grew 2% driven by good growth in EMEA and Latin America. GBS North America was down modestly in the quarter. We have a concrete understanding of the issues that we face in this business and a detailed plan to turn it around that I will discuss with you in a few minutes.

We generated more than 200 million of free cash flow in the quarter, that’s up over $0.5 billion versus a year ago, reflecting a healthy improvement in our EBITDA and a significant reduction in cash interest payment. Generating free cash is and will be a mantra of this company, something that you are now beginning to see.

Finally, we remain focussed on proactively managing our balance sheet. This past quarter we send the maturities on over 4.5 billion of debt that was previously due in 2018. Now I’d like to update you on four of our major initiatives. First, let’s start with the expansion of our enterprise business, which is where we bring the full suite of our offerings to both financial institutions and large corporations. The pipeline is improving and includes opportunities in new verticals.