FleetCor's Management Present At Barclays Emerging Payments Forum Conference (Transcript)

FleetCor Technologies, Inc. ( FLT)

Barclays Emerging Payments Forum Conference Transcript

March 28, 2012 2:45 PM ET

Executives

Eric Dey – Chief Financial Officer

Analysts

Darren – Barclays Capital

Presentation

Darren – Barclays Capital

Okay. Let’s get started. We are happy to have with us FleetCor today. It’s a great story. The company that obviously went public fairly recently, but it’s not extremely well since the IPO. But it’s gone back a lot problem managed, rolled up quite a bit of the fleet card industry through the years has really become the largest player in the industry surpassing many of the public names and obviously, the private name as well.

And so, it’s a name we’ve done pretty well, we do like the story and we happy to have Eric here with us today who is the CFO of the company. Eric Dey has been with the company I think since 2002, you just said, right, the CFO have been since 2003.

Eric Dey

Right.

Darren – Barclays Capital

And so, with that, let me just start off with the audience response and first, you currently own the stock, if you could just give us one, two, three, or four, yeah, you own a lot over rate, some under rate, or you don’t want it right now, we’ll see the answer.

Eric Dey

Really. I don’t know that.

Darren – Barclays Capital

Probably up there, probably up there, yeah, oh, yeah.

Eric Dey

If you may.

Darren – Barclays Capital

I know it’s amazing. Yeah. So there is a lot of room for additional investment, Eric. Question number two, what’s your general bias on the stock right now? Okay. Good. All right. Eric, thank you for being here with us, I wonder, we -- or you kick it off.

Eric Dey

Okay. Great. Excuse me, if I screw up the moving of the slide here, but I will do my best. As [Darren] indicated my name is Eric Dey. I’m CFO for FleetCor Technologies and I have been with the company since 2002, so it’s been quite while, and we’ll see that kind of on the next few pages.

I’m going to start the presentation by first Safe Harbor provision, there you go. I’m going to go over the agenda here. We are going to talk about four very, very brief topics. I think we’ve got about 20 to 30 minutes to actually present.

I’ll briefly go over the company kind of what we do. I’ll take a look at some key investment considerations. The company’s growth strategy, first both historically and then what our strategy is kind of going forward, and then I’ll do a financial overview very briefly, so again, we got about 20 to 30 minutes.

First and foremost, FleetCor is a leading global fleet card company and we are the number one fleet card, commercial fleet card company in the world today. Our core product today is a special purpose business charge card, primarily for the commercial fuel industry around the world. Approximately 90% of our revenue today is generated from the sale of these commercial fuel cards.

We also offer other products and services around the world today. We’ve got a commercial hotel card in the United States. We also have telematics products, primarily in Europe and we have a food card and food voucher business in Mexico.

Our target customers today are effectively all businesses and government entities of all sizes in the geographies in which we do business today. We also partner with major oil companies and other petroleum marketers in the United States and around the world as well.

I’m going to mention a couple names some of the major oil companies that we do partner with today and you guys have know some of these names, Chevron, BP, Arco, Citgo, just to mention a few and more recently, we partnered with Euroshell in our international business.

We are a global company. We are in 21 countries today and we’ve got 17 offices worldwide. However, we’re primarily in five countries. Most of our operations are in the United States today, the U.K., the Czech Republic, Russia and more recently, Mexico.

In 2011, approximately one-third of the company’s revenue was generated outside of the United States and that percentage is actually growing, and I’ve estimated that that percentage will actually grow to closer to 40% in 2012.

We also have a very strong track record of performance and now we’ve grown our revenue at a compounded annual growth rate of 28% since 2003, and we’ve grown our adjusted net income or cash net income at a compounded annual growth rate of 41% over that same kind of period of time.

I like to show this chart graphically and you can see the magnitude of the company’s growth. 2003, we had $73 million of revenue and we’ve grown to over $500 million in revenue in 2011. And we’ve guided the street to approximately $620 million in revenue in 2012.

Similarly from an adjusted net income perspective, $12 million back in 2003, we ended the year 2011 with over $180 million of adjusted net income or free cash flow. And again, our guidance to the street is approximately $220 million in 2012. So this impressive growth rate is projected to certainly continue.

Next, moving on to key investment considerations. First and foremost, the company has downsize protection. There are significant barriers to entry to get into our business, to that end -- today we operate 10 proprietary merchant networks around the world and we’ve contracted with 35,000 merchants individually. So this is not a very easy business to get into certainly from a merchant acceptance standpoint.

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