Slides
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I n v e s t o r O v e r v i e w / M a t e r i a l s
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2 Enabled by: • One Deluxe go-to-market model • Operational execution via North Star • Capital allocation discipline Built the foundation • Rationalized the portfolio • Modernized our infrastructure • Primed for growth: Acquired First American Statements made in this presentation concerning Deluxe, the company’s or management’s intentions, expectations, outlook or predictions about future results or events are “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. Such statements reflect management’s current intentions or beliefs and are subject to risks and uncertainties that could cause actual results or events to vary from stated expectations, which variations could be material and adverse. Factors that could produce such a variation include, but are not limited to, the following: changes in local, regional, national and international economic or political conditions, including those resulting from heightened inflation, rising interest rates, a recession, uncertainties surrounding trade policies or tariffs, or intensified international hostilities, and their impact on the company, its data, customers, or demand for the company’s products and services; the effects of proposed and enacted legislative and regulatory actions affecting the company or the financial services industry as a whole; ongoing cost increases and/or declines in the availability of data, materials, and other services;the company’s ability to execute its strategy and to realize the intended benefits; the inherent unreliability of earnings, revenue and cash flow predictions due to numerous factors, many of which are beyond the company’s control; declining demand for the company’s checks, check-related products and services and business forms; risks that the company’s strategies intended to drive sustained revenue and earnings growth, despite the continuing decline in checks and forms, are delayed or unsuccessful; intense competition; continued consolidation of financial institutions and/or bank failures, thereby reducing the number of potential customers and referral sources and increasing downward pressure on the company’s revenue andgross profit; risks related to acquisitions, including integration-related risks and risks that future acquisitions will not be consummated; risks that any such acquisitions do not produce the anticipated results or synergies; risks that the company’s cost reduction initiatives will be delayed or unsuccessful; risks related to any divestitures contemplated or undertaken by the company; performance shortfalls by one or more of the company’s major suppliers, licensors, data or service providers; continuing supply chain and labor supply issues; unanticipated delays, costs and expenses in the development and marketing of products and services, including financial technology and treasury management solutions; the failure of such products and services to deliver the expected revenues and other financial targets; risks related to security breaches, computer malware or other cyber-attacks; risks of interruptions to the company’s website operations or information technology systems; and risks of unfavorable outcomes and the costs to defend litigation and other disputes. The company’s forward-looking statements speak only as of the time made, and management assumes no obligation to publicly updateany such statements. Additional information concerning these and other factors that could cause actual results and events to differ materially from the company’s current expectations are contained in the company’s Form 10-K for the year ended December 31, 2024, and other filings made with the SEC. The company undertakes no obligation to update or revise any forward-looking statements to reflect subsequent events, new information or future circumstances. CAUTIONARY STATEMENT
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WHO WE ARE
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4 DELUXE ENTERPRISE OVERVIEW DLX AT A GLANCE Key Numbers Selected Operational Metrics Diversified Revenue Who We Serve Data 12% Merchant Svcs 18% B2B Payments 14% Print 56% FORTUNE 1000 COMPANY OPERATING IN FOUR MAIN SEGMENTS: Q1’25 LTM REV % by SEGMENT $2.1B LTM Q1’25 total revenue $409MM LTM Q1’25 Adjusted EBITDA >$40B Merchant processing volume (annually) >$2T In payments value processed (annually) $118MM LTM Q1’25 free cash flow ~6% Annual dividend yield MILLIONS of SMBs ACROSS AN ARRAY OF SERVICES OVER 4,000 FIs 180 OUT OF 200 TOP FIs HQ MPLS, MN F O U N D E D 1915 N Y S E DLX
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5 Declines within core Check & print portfolio accelerate • Secular decline trends solidify, as digital substitutes emerge/evolve • Customer relationships remain robust • Sales channel complexity expands – FI-partners, distributors, direct / increasingly eCommerce Built a cohesive foundation • Rationalized portfolio • Acquired First American • Scalable product platforms • Modern, cloud-based infrastructure • One Deluxe go-to-market model Driven by Payments & Data • Growth engines scale • Fit-for-purpose portfolio • Digital-first infrastructure Late 1990’s – 2007 2008–2018 Present–2026 WE ARE HERE Organic declines offset via aggressive Portfolio M&A • ‘Supermarket’ for Banks & Small biz Supermarket Portfolio • 50+ disconnected businesses • Uncoordinated go-to-market • Massive technical debt Inorganic / M&A category expansion: (exited / retained) SMB’s FI’s Logo creation / design CC Affinity / Rewards Web Hosting Branch P&L mgm’t (SaaS) Payroll / Incorp Svcs Misc. supply logistics Marketing Svcs - search / social Branded promo & retail packaging Select (exited) business lines: (US, CAD, AUS, EU) DLX HISTORY / TIMELINE:
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6 OUR STRATEGY IS SIMPLE GROW PAYMENTS & DATA, PAY DOWN DEBT, & CUT CORPORATE COSTS
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7 DELUXE TODAY TAM: ~$2B TAM: ~$26B TAM: ~$25B TAM: ~$33B TAM: ~$18B • Print & deliver checks for our bank and small business partners • Checks still 40% of all business payments today • Ship over 90K packages of checks per day • Branded forms, deposit tickets, & other customized items that complement checks • Often printed on the same equipment as checks • Helping merchants accept more than $40B of electronic payments every year anywhere their customers would like to pay • Helping our clients manage their most challenging B2B payments pain points w/ software & payments solutions • An industry leader in using data and analytics to help our clients add new customers • Deep expertise in Financial Institutions PAYM ENTS & DATA BUSINESSESLEGACY PRINT BUSINESSES Check Promotional Products Merchant Services B2B Payments Data
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8 Q1’25 Highlights Strong Execution within increasingly volatile macroeconomic conditions
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99 2025 Guidance Well-positioned for sustainable growth
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10 Drive profitable organic growth in Payments and Data Keep efficiency focus on Print & Corporate Increase our free cash flow by improving leverage ratio & reducing restructuring charges post -2024 Drive focused execution through North Star plan Maintain our dividend: continue to return capital to shareholders Sustain performance: Changing culture, talent, & processes through '26 & beyond OUR FOCUS BY 2026 ~2-4% y/y revenue growth, ~4-6% y/y EBITDA growth 3x leverage 30%+ FCF conversion +$80MM EBITDA & +$100MM FCF $0.30 per share per quarter 15%+ annual total shareholder return through 2026 CLEAR MULTI -YEAR VALUE CREATION ALGORITHM
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NORTH STAR INITIA TIVE
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12 ENTERPRISE-WIDE TRANSFORMATION PROGRAM… • Aligned to enterprise strategy & shareholder value • Contains highest priority growth & cost initiatives • Portfolio of 12+ workstreams • Comprehensive in scale OUR NORTH STAR INTEGRATED EXECUTION PLAN +$100MM incremental run-rate FCF +$80MM Incr. comp. adj. EBITDA BY 2026: …ACCELERATING EXECUTION AGAINST CORE DLX GOALS & DRIVERS OF TSR • Prioritizing rapid cash generation to fund long-term investment • Expanded operating leverage • 2024 YE: Initiatives comprising $100+ million of targeted gross $130 million Adjusted EBITDA improvements moved to execution
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1313 NORTH STAR WORKSTREAMS & TIMELINES
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14 $80 MILLION INCREMENTAL COMP. ADJ. EBITDA IN ‘26 VIA $130 MILLION NORTH STAR VALUE (~$70) ~$30 ~$120 ~$470 2023A Divestitures ~$10 2023 Comp Adj EBITDA Forecast secular decline of print Add’l base growth of the business North Star program value 2026 Target Comp. Adj. EBITDA (~$26) $391 $417 +$80North Star impact Incl. high priority growth initiatives Adjusted EBITDA bridge (2023 – 2026) ~$10 ($’s in Million’s)
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15 …AND $100MM INCREMENTAL FCF BY 2026 Incremental Comp. Adj. EBITDA Lower Interest Expense Lower Restructuring Costs Other Offsets Incremental Free Cash Flow +$80MM ~$15-20MM ~$30-40MM (~$25-30MM) +~$100MM 2026 Target: 30+% 2022 (pre-NS): 21% FCF Conversion (as a % of EBITDA)
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16 ADJ. EBITDA INCREASE ENABLES A LEVERAGE RATIO OF 3X BY ‘26 Leverage ratio = net debt / Adj. EBITDA 2022 2023 2024 2025F 2026F $0.0B $0.5B $1.0B $1.5B $2.0B 4.0x ~3x Net debt Adj. EBITDA 3.6x3.6x ~3.3x
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17 WE HAVE THREE CLEAR CAPITAL ALLOCATION PRIORITIES: Strengthen the balance sheet • Target 3x net leverage by 2026 by: • Growing EBITDA • Paying down debt with incr. FCF Invest in profitable organic growth • Invest in high-return (e.g., 15%+ risk adjusted IRR) profitable organic growth in line with our enterprise strategy and drivers of shareholder return Pay our dividend • Maintain dividend of $0.30/ share/ quarter & outgrow high yield over time through improved business performance
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18 Capital Structure – Debt maturity ladder
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3YR FINANCIAL PROJECTIONS
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20 Base business drivers: • Consumer spending • Merchant base growth • Growth in FI channel • Cross-sell via DLX's brand and FI relationships • Ongoing move to digital commerce & electronic payments Upside business drivers: • Growth of integrated software channel • Additional omnichannel features • Embedded banking & supporting services MERCHANT SERVICES: FINANCIAL OUTLOOK & BUSINESS DRIVERS $348MM 21 22 23 24 25F 26F $329MM +7-10% Revenue & Adj. EBITDA margin: Assuming stable macro & consumer spending Adj. EBITDA margin 20% 22-23% Revenue Pre-DLX Acquisition Revenue EV / Adj. EBITDA1 12-18x 12-18x +200-300 bps 1. High-level estimate based on peer comp analysis and DLX business mix 20 $364MM $384MM
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21 Revenue & Adj. EBITDA margin: Assuming stable macro & consumer spending Revenue 21 22 23 24 25F 26F $307MM Adj. EBITDA margin 20% 22-25% EV / Adj. EBITDA1 6-10x 8-12x +200-500 bps +3-7% B2B PAYMENTS: FINANCIAL OUTLOOK & BUSINESS DRIVERS Base business drivers: • Continued expansion of current Integrated Receivables and exception mgmt. tools • Efficiencies in item processing business Upside business drivers: • Commercialization of our investments in AR and AP SaaS solutions with: • Current customers & FI partners • New customers • Accelerating demand for better AR / AP efficiency 1. High-level estimate based on peer comp analysis and DLX business mix $295MM 21 $299MM $288MM
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22 DATA SOLUTIONS: FINANCIAL OUTLOOK & BUSINESS DRIVERS Base business drivers: • Growth in core verticals • Grow, develop & retain top data scientists and marketers • Continued evolution of our data assets Upside business drivers: • Expansion in B2B marketing (e.g., telco & business services) & credit card marketing • Additional wins from Deluxe FI customers 1. 2021F and 2022F do not include revenue and adj. EBITDA from Deluxe's Hosting business, which has since been divested. 2. High-level estimate based on peer comp analysis and DLX business mix Revenue & Adj. EBITDA margin: Comp. Adj. EBITDA margin1 22% 20-23% Comp. Adj. Revenue1 EV / Adj. EBITDA2 7-10x 7-10x Stable margins $169MM $197MM 21 22 23 24 25F 26F +6-10% 22 $212MM $234MM
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23 Base business drivers: • Continued share gain with FI customers • Stable margins via investments in print efficiencies & process improvements • Prioritization of higher-margin Promo products that more specifically complement Checks Upside business drivers: • Slower-than-expected secular decline in Checks volume • Competitive wins PRINT BUSINESS: FINANCIAL OUTLOOK & BUSINESS DRIVERS Revenue & Adj. EBITDA margin: Comp. Adj. EBITDA margin 32% ~33% Promo (Comp. Adjusted) Checks EV / Adj. EBITDA1 4-6x 4-6x Stable margins 1. High-level estimate based on peer comp analysis and DLX business mix 21 22 23 24 25F 26F $1,223MM $1,277MM (1-5)% 23 $1,261MM $1,205MM
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24 FORECAST 5 -7% COMP. ADJ. EBITDA GROWTH THROUGH 2026 1. Reported EBITDA and reported revenue for 2021 and 2022 include the performance of divested or expected to be divested business units (e.g., Payroll and Hosting businesses). 2. 2026 figures are illustrative based on our preliminary outlook provided for 2024 and longer-term outlook Note: Projections assume a relatively stable macro environment 3. $391MM represents removal of divested business impacts (baseline for ‘24 comp adjusted guidance) 21 22 23 24 25F Comp. Adj. EBITDA Reported EBITDA1 $418MM $417MM ~$470MM2 26F $408MM CAGR: 5-7% Adj. EBITDA Margin 18.7%20.2% ~19% ~21% Reported Revenue 1 $2.19B ~$2.25B2$2.02B $2.24B CAGR: 0 - 3% +~200bps $391MM3 Comp. Adj. EBITDA growth: $407MM
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25 Drive profitable organic growth in Payments and Data Keep efficiency focus on Print & Corporate Increase our free cash flow by improving leverage ratio & reducing restructuring charges post -2024 Drive focused execution through North Star plan Maintain our dividend: continue to return capital to shareholders Sustain performance: Changing culture, talent, & processes through '26 & beyond OUR FOCUS BY 2026 ~2-4% y/y revenue growth, ~4-6% y/y EBITDA growth 3x leverage 30%+ FCF conversion +$80MM EBITDA & +$100MM FCF $0.30 per share per quarter 15%+ annual total shareholder return through 2026 CLEAR 3 -YEAR VALUE CREATION ALGORITHM
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26 APPENDIX
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27 Consolidated Condensed Statements of Income in millions, except per share amounts (Unaudited)
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28 Segment Information in millions (Unaudited)
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29 Reconciliation of GAAP to Non-GAAP Measures EBITDA, Adjusted EBITDA, and Adjusted EBITDA margin in millions (Unaudited)
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30 Reconciliation of GAAP to Non-GAAP Measures Adjusted Diluted EPS – Q1 2025 dollars and shares in millions, except per share amounts (Unaudited)
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31 Reconciliation of GAAP to Non-GAAP Measures Adjusted Diluted EPS – Q1 2024 dollars and shares in millions, except per share amounts (Unaudited)
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32 Reconciliation of GAAP to Non-GAAP Measures Comparable Adjusted Revenue / Comparable Adjusted EBITDA / Comparable Adjusted EBITDA Margin in millions (Unaudited)
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33 Reconciliation of GAAP to Non-GAAP Measures Comparable Adjusted Revenue / Comparable Adjusted EBITDA / Comparable Adjusted EPS Outlook (Unaudited) Total Year 2025 Outlook 2024 Actual (in billions) Revenue $2.090 - $2.155 $2.122 Less: Business exits — (0.011) Comparable adjusted revenue $2.090 - $2.155 $2.111 Comparable adjusted revenue (decline) growth % (1%) - 2% (in millions) Adjusted EBITDA $415 - $435 $412 Less: Business exits — (6) Comparable adjusted EBITDA $415 - $435 $406 Comparable adjusted EBITDA growth % 2% - 7% Adjusted diluted EPS $3.25 - $3.55 $3.29 Less: Business exits — (0.03) Comparable adjusted diluted EPS $3.25 - $3.55 $3.26 Comparable adjusted diluted EPS growth 0% - 9% The company has not reconciled the adjusted EBITDA, adjusted diluted EPS, adjusted income tax rate or free cash flow outlook for 2025 to the directly comparable GAAP financial measures because the company does not provide outlook guidance for the reconciling items between net income, adjusted net income and adjusted EBITDA, and certain of these reconciling items impact cash flows from operating activities. Because of the substantial uncertainty and variability surrounding certain of these forward-looking reconciling items, including asset impairment charges, restructuring and integration expense, gains and losses on sales of businesses and long-lived assets, and certain legal-related expenses, a reconciliation of the outlook for these non-GAAP financial measures to the corresponding GAAP measures is not available without unreasonable effort. The probable significance of certain of these reconciling items is high and, based on historical experience, could be material.
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34 Reconciliation of GAAP to Non-GAAP Measures Net Debt to Adjusted EBITDA dollars in millions (Unaudited)
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35 Reconciliation of GAAP to Non-GAAP Measures Free Cash Flow in millions (Unaudited)