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Retalix Ltd.

Investor Presentation
NasdaqGS: RLTX & TASE: RETALIX
Shuky Sheffer, CEO Hugo Goldman, CFO January 2012

1 www.retalix.com

Copyright © 2012 Retalix

Copyright © 2010 Retalix

Forward-Looking Statements
 Use of Forward-Looking Statements: This presentation and management’s remarks include forwardlooking statements regarding a variety of items including the information we present under 2011 Financial Outlook and Focus. Such forward-looking statements are based upon current intentions and expectations and involve risks and uncertainties. Actual results may differ materially from those stated in any forwardlooking statement based on a number of important factors and risks, which are identified in the Company's most recent SEC filings, including its Annual Report on Form 20-F. Although Retalix may indicate and believe that the assumptions underlying the forward-looking statements are reasonable, any of the assumptions could prove inaccurate or incorrect and, therefore, there can be no assurance that the results contemplated in the forward-looking statements will be realized. Except as required by applicable law, Retalix undertakes no obligation to publicly release the results of any revisions to these forward-looking statements that may be made to reflect events or circumstances after the date hereof, or to reflect the occurrence of unanticipated events.  Use of Non-GAAP Information: In addition to reporting financial results in accordance with generally accepted accounting principles, or GAAP, this presentation includes certain non-GAAP financial measures. These non-GAAP results exclude non-cash equity-based compensation charges and amortization of acquisition-related intangibles. Retalix’s management believes that these non-GAAP measures are useful to investors because they provide supplemental information that analysts frequently use to analyze software companies. Management uses both GAAP and non-GAAP information to evaluate its financial results, develop budgets and manage expenditures. The method Retalix uses to produce non-GAAP results is not computed according to GAAP, may differ from the methods used by other companies and should not be regarded as a replacement for GAAP measures. Complete reconciliation between GAAP and non-GAAP results is available on Retalix’s web site at www.retalix.com.
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Copyright © 2012 Retalix

Content

  Retalix Overview   Our Market   Our Vision and Products   Financial Overview   Summary

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Copyright © 2012 Retalix

4m •  9 months 2011 $173.95m paid in 7/2011 for MTX acquisition 4 Copyright © 2012 Retalix . FIMI   Balance Sheet: $132.Retalix at a Glance   A leading global provider of software and services to retailers and distributors   Established: 1982   HQ: Raanana. no debt   Revenue: •  FY10 $207.550*   Publicly traded: NASDAQ & TASE   Major Shareholders: Alpha Group. Israel and Dallas.5m cash**. 2011 ** $18. USA   Employees: ~1.5m (13% YoY Growth) •  Expect to exceed guidance of $228m revenues for 2011 * September 30.

we sell Services. Maintenance and SaaS around our Products Key Segments GROCERY GENERAL MERCHANDISE CONVENIENCE FUEL FOOD SERVICES DEPARTMENT STORES HEALTH & BEAUTY 5 Copyright © 2012 Retalix . high complexity FMCG retailers & distributors worldwide We are a Product Led company.Offerings Mission-critical software & services for high volume. Leveraging our deep domain expertise.

Leading Global Retailers Select Retalix 13 out of top 30 global retailers are Retalix customers ~28% market share in NA Tier 0-2 grocery >50% market share in NA Tier 3-4 grocery 3 out of 3 of the Top 3 in Australia 3 out of the top 4 Tier 0 UK 6 Copyright © 2012 Retalix .

000 store locations globally Serving Leading Retailers in 50+ countries Israel 12% Sales EMEA & APAC 35% USA 53% 7 Copyright © 2012 Retalix .Strong Global Customer Footprint Our software solutions are deployed in more than 70.

as defined in 2010. adjacent retail segments •  M&A: whenever available to support our strategy 8 Copyright © 2012 Retalix .  Retalix 10 2. are firing across all business lines and geographies 1.  Software-as-a-Service (SaaS) / Cloud 4. geographies.Executing on Our Strategy: Growth Engines are Firing   Growth Engines.  Customer base.  Product-led Services (Delivery & SI) 3.

including Tier 0 retailers Adjacent Retail Segments and Geographies   Tops Markets selected Retalix to enhance their customer experience and operations   Walgreens selected Retalix’s demand driven replenishment.Executing on Our Strategy: Selected Customer Wins in 2011 R10   Tesco. upgrading stores worldwide to Retalix 10 (press release Jan.000 stores   Grocery chain in China selected Retalix store solutions 9 Copyright © 2012 Retalix . 2011)   North American Tier 0 retailer selected Retalix 10 as its store platform Services   Southern Co-operative (UK) Store + loyalty + replenishment + SI services   SI – numerous new wins in this new practice SaaS   Payments: several wins for new SaaS payments products. via SaaS   Russian grocer DIXY selected Retalix store and Loyalty across its ~1.

DAX 10 Copyright © 2012 Retalix . numerous good wins including a Tier 0 Retailer •  Relatively smooth PMI   Retalix will continue to innovate and expand payments offerings as well as introduce new SaaS and Cloud-based offerings: Retalix 10.Executing on Our Strategy: Acquired MTXEPS to Accelerate our SaaS business   July 2011: acquired MTXEPS for $18. Loyalty. profitable company •  In >20.95 million plus up to $6 million over the next two years based on certain performance metrics   MTXEPS Description: •  A provider of SaaS end-to-end electronic payments solutions •  Fast growing.  Enhance our capabilities in the fast growing and changing payments segment   Our first 6 months (PMI): •  Meeting our expectations.000 stores in North America (both SaaS and en premise models)   Deal Rationale: 1.  Growing demand from our Customers 2.  Support our SaaS Growth Engine 3.

Our Market 11 11 Copyright © 2012 Retalix .

AMR. Retalix Corp Dev Internal Analysis 2010 * Includes all applications. IDC. IHL. external and internal services 12 Copyright © 2012 Retalix . hardware. software. not including hardware and non-relevant applications ~$7-8 Billion GLOBAL MARKET Software & Maintenance $2B Services $5B Room for growth along all dimensions in our business Sources: Gartner.Retalix Operates in a Large Global Market   IT spend in segments addressed by Retalix today >$32B* •  ~50% of retailing IT spend is in and around the store •  ~25% of retailing IT spend is grocery and convenience store segments   Total addressable market for Retalix.

29 April 2011 2.  IDC: Best Practices: Grocers Fighting Fire with Fire – 2011 Survey Results.Industry Analysts Confirm Retalix’s Leadership Position and the Need to Upgrade Store Solutions   Point of sale (POS) has evolved into the Store Platform that supports all touch points with consumers and is the foundation for all the IT systems that operate in the store   Gartner on Leading Retail Software Vendors Worldwide   IDC: “2011 Survey Results Reveal Strong Technology Investment Trends”   RIS: Only 25% of retailers have a store solution in place that meets their current needs Sources: 1. July 2011 3.  “Evolution of the POS Platform” By RIS News.  Gartner: Market Share Analysis: Retail Vertical-Specific Software. 2010. November 2010 13 Copyright © 2012 Retalix . Worldwide.

Grocers sell fuel. mergers and acquisitions   Increasingly complex regulatory requirements   Retailers have multiple disparate systems that require lengthy. and to reward them for their loyalty   Retail segments are undeniably blurring.As We Enter a New Decade (2010’s) Retalix Observes New Industry Challenges A new generation of social shoppers   Empowered and demanding shoppers with a strong sense of entitlement   Well connected. costly integration   Inflexible architectures hold up delivery of new business capabilities   Legacy infrastructure is costly to maintain An aggressive. competitive retail business landscape Cost of ownership & time-to-market considerations 14 Copyright © 2012 Retalix . Drugstores sell food…   Proliferation of global expansions. knowledgeable and updated through social networks   Shoppers expect retailers to keep pace with the latest trends.

state-of-the-art. maintenance…)   Increase monitoring and control through centrally managed systems 15 Copyright © 2012 Retalix Run Flexible and Lean Operations . increase shopping frequency and spend   Attract new shoppers   Increase sales and profitability   Expand across geographies   Diversify across retail concepts and segments   Differentiate the brand Deliver a Differentiated Shopper Experience Gain Competitive Advantage   Implement innovative. agile store systems   Rapidly deliver new business capabilities to the market (TTM)   Reduce TCO (infrastructure.Retailers Are Focused On New Goals   Provide a superior Shopper experience   Boost brand loyalty through targeted personalized promotions   Retain shoppers.

Our Vision and Products 16 16 Copyright © 2012 Retalix .

Flyers.We Enable Retailers to Understand & Influence Shoppers Social Networks. seamless Customer experience Across all touch points Review transaction history Self-checkout Pump terminals. Coupons & Promotions Digital Signage and Tags Kiosks Influence & Empower Consumers During The Complete Shopping Cycle… Via a superior. Portals & Shopping Lists Ads. Fuel 17 Mobile Commerce Traditional POS Copyright © 2012 Retalix .

Retalix Product Portfolio Overview STORE & SALES CHANNELS SUITE CUSTOMER TOUCH POINTS POS SELF SCAN SCALE SELF CHECKOUT FUEL MOBILE POS QSR STORE MANAGEMENT STORE MANAGER MOBILE STORE MANAGER INVENTORY MANAGER FORECOURT MANAGER ELECTRONIC PAYMENTS &SERVICES ELECTRONIC PAYMENTS VALUE-ADDED ONLINE SERVICE MOBILE & E-COMMERCE MOBILE SHOPPER E-STORE SERVER KIOSK MOBILE PAYMENTS MOBILE MARKETING CUSTOMER MGMT & MARKETING SUITE MERCHANDISING SUITE SUPPLY CHAIN SUITE PROMOTION MANAGEMENT MULTI-CHANNEL TARGETED MARKETING LOYALTY MANAGEMENT LOYALTY & PROMO ENGINE CUSTOMER MANAGEMENT CAMPAIGN MANAGEMENT ITEM & ASSORTMENT MANAGEMENT INVENTORY MGMT & DEMAND-DRIVEN REPLENISHMENT PRICE & PROMOTIONS MANAGEMENT PROCUREMENT & SUPPLIER MANAGEMENT WAREHOUSE MANAGEMENT TRANSPORTATION MANAGEMENT RETALIX FOUNDATION ANALYTICS RETAIL MASTER DATA OPERATIONAL TOOLS 18 Copyright © 2012 Retalix .

The Retalix 10 Store Suite The Next Generation Store Solution Suite Touch Points and Sales Channels Store & Inventory Management Applications Chain Level Store Operations and Configuration Management 19 Cppyright © 2012 Retalix .

Retalix 10 Store Suite   Modular Suite •  Enabling implementation of select stand-alone components   Tightly Integrated with the Retalix extensive offerings of: •  Customer Management and Marketing solutions •  Merchandising and inventory optimization solutions •  Retail Foundation Components: Data. …providing flexibility and protection of previous IT investments   Supports growth and diversification across multiple segments. Utilities   Compatible with •  a large range of retail hardware platforms and •  a variety of legacy and third-party systems. Analytics. brands. geographies: •  Extensive support of multi-national features. regional business preferences and regional regulations 20 Copyright © 2012 Retalix .

Key Benefits for Retailers Quicker Time to Market •  Quick delivery of new business capabilities via easily extensible retail core. seamless customer experience across multiple touch points and channels •  Through sophisticated management and execution of personalized. dynamic promotions and loyalty programs •  And support of value-added online services •  Through integration with demand-driven merchandising and optimization solutions Copyright © 2012 Retalix . and the agile development methodologies •  Offered via flexible deployment alternatives (thin/thick/hybrid) Reduce TCO •  Variety of migration strategies to reduce risk •  Central management resulting in lower maintenance cost Differentiate and Compete Better Increase Customer Retention and Spend Optimize Operations 21 •  By delivering a superior. personalized.Retalix 10 . targeted.

Retalix 10 is Endorsed by Leading Industry Analysts – Garner and IDC 22 Copyright © 2012 Retalix .

Product Led Services – a differentiated business model   Fast growing business. winning new customers and increasing share of wallet through launch and integration of services offerings into our portfolio   Services offering tightly linked to our software   Covering full project life cycle   Gradually introducing new services e.g. testing   Differentiated due to: •  Short loop between development. deployment & support •  One point of accountability for end result •  Global deployment ability 23 Copyright © 2012 Retalix .

Retalix is Differentiated from the Competition Store Grocery Convenience Enterprise   Unique Business Model: Product Led Services   Retalix 10 Store Suite   Breadth of Offering   Domain Expertise   Focus on the Retail & Food verticals   Hardware agnostic   Large and prestigious customer base 24 Copyright © 2012 Retalix .

Financial Overview 25 25 Copyright © 2012 Retalix .

Revenue Mix 2010 and 2011 YTD 2010 9 months 2011 Professional Services 44% Maintenance 28% Professional Services 52% Maintenance 27% Hardware 15% SW Licenses 13% SW Licenses 10% Hardware 11% Improving quality of revenue and decreasing HW as a % of Revenues 26 Copyright © 2012 Retalix .

9 m – $0. $153.6 m •  14% growth in Net Income (Non-GAAP): $14. $13.Revenues and Net Income Non-GAAP Expect to exceed guidance of $217-228M   9 months 2011: •  13% growth in total Revenues: $173.1 m – $0.60 per share – vs.54 per share 27 Copyright © 2012 Retalix .5 m vs.

Retalix has a strong balance sheet No debt Note: In July 2011 Retalix used $18.95 million in cash to acquire MTXEPS 28 Copyright © 2012 Retalix .

com 29 Copyright © 2012 Retalix . Reconciliation to GAAP numbers is available on www. 20% growth in Net Income (Non-GAAP)   Seventh quarter of sequential growth.1M in Q3 and $20 million YTD Notes – Operating Income and Net Income presented are Non-GAAP. similar profitability while we continue building growth engines and investing in projects for strategic customers   Positive Cash Flow from Operations $4.Q3 11 P&L Highlights (Non-GAAP)   Q3 Revenue growth of 16% YoY.retalix.

2011 Financial Outlook   Profitable growth: •  Expected to exceed revenue guidance for 2011 – original guidance of $217-228M •  2011 growth was mainly organic – we expect MTXEPS to contribute in 2012 •  Expect to maintain profitability as in 2010. while we continue to invest in our products and our growth engines Note: The above guidance was issued on November 2. The Company undertakes no obligation to update its guidance. 2011. 30 Copyright © 2012 Retalix . updating guidance first given on March 2. 2011.

  best in class products 2.  deep domain expertise •  Financial strength to grow and serve large. blue chip customer base •  Retalix 10 – the world’s leading product •  Strong and growing SaaS business •  Unique Business Model: 1.  product led services 3.Summary   Great Opportunity: Large. multi-year contracts 31 Copyright © 2012 Retalix . transforming market with real and urgent IT needs   Retalix is positioned to win in this market: •  Focused strategy: defined growth engines contributing to double digit growth •  Strong management with a proven track record •  Market leader with global.

Thank you! 32 Copyright © 2012 Retalix .