FIS makes early progress against its synergy targets and overall integration of Worldpay

Maria Nikolova

Teams across the combined company have identified opportunities to accelerate the timing of synergy attainment following the transaction close.

Financial services technology provider FIS (NYSE:FIS) has just posted its third quarter 2019 results.

On a GAAP basis, revenue increased 35% to $2,822 million in the three months to end-September 2019 from $2,084 million in the prior year period, primarily driven by the acquisition of Worldpay. Net earnings attributable to common stockholders totalled $154 million for the quarter or $0.29 per diluted share.

On an adjusted basis, organic revenue increased 5% over the prior year period. Adjusted EBITDA margin expanded 350 basis points over the prior year period to 42.2%. Adjusted net earnings amounted to $751 million or $1.43 per diluted share.

Gary Norcross, FIS chairman, president and chief executive officer, commented:

“We are pleased by the robust demand for our new merchant offerings and are making early progress against our synergy targets and overall integration of Worldpay. These successes combined with the fundamental strength of our business model and ongoing sales success give us confidence that we are well positioned to drive further value for our clients and shareholders.”

After the close of the Worldpay acquisition, FIS began realizing revenue and expense synergies during the third quarter of 2019. Teams across the combined company are working well together and have identified opportunities to accelerate the timing of synergy attainment following the transaction close. FIS says that these promising early integration efforts further solidify its confidence in accelerating organic revenue growth, approaching 7% in 2020 with a target of 8 to 9% in the future.

FIS achieved annual run-rate synergies exiting the third quarter 2019 as follows:

  • Revenue synergies of over $30 million;
  • Expense synergies of over $200 million, inclusive of over $100 million of interest expense savings.

The company reiterates full-year 2020 annual run-rate revenue synergy target and increases full-year 2020 annual run-rate expense synergy target to:

  • Revenue synergies of $150 million, which was increased $50 million in the second quarter of 2019;
  • Expense synergies of over $350 million, an increase of $50 million.

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