Deluxe Corporation
Ninth Annual Institutional Investor Forum Sidoti & Company, LLC
Jeff Johnson, Treasurer and Vice President Investor Relations September 24, 2010
Presentation Scope
■ Comments are limited to information already publicly released:
– 10-K for 2009, filed February 19, 2010 – 10-Q for Q2 2010, filed August 5, 2010
■ All estimates and projections are subject to risks and uncertainties that could cause actual future results to differ materially from those estimated or projected. Additional information about various factors that could cause actual results to differ from those projected are contained in the Company’s Form 10-K for the year ended December 31, 2009 ■ Non-GAAP financial measures are reconciled to the
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wth
2009 Revenue Mix Strengthen Products and Services
Stabilizing and pursuing check share gain Better optimizing business product portfolio Growing business services
Business Services 7% Business Products 30%
Customers
Improving customer experience Driving clearer customer segmentation Adding new customers Unified delivery services platform Investing in developing services offers
Checks 63%
Technology
Future Revenue Mix
Business Services 25%
Brand Awareness and Positioning
Advertising through radio and on-line media Direct response advertising Sponsoring marketing lab for small businesses
Checks 45%
Business Products 30%
10
Cost Reduction Plan
$ in millions
Cumulative Savings Cumulative Savings
$325
Go-to-Market
(Selling, Marketing, Customer Care)
Channel optimization Sales / Marketing operations Marketing and analytics integration Call center productivity
1/3 COGS 1/3 COGS 2/3 SG&A 2/3 SG&A
~ 45%
$260
Fulfillment
(Manufacturing and Supply Chain) $155 $105
Manufacturing productivity / Lean Direct spend reductions Finish automating flat check packaging in Q3 2010; complete the expansion of our digital printing Common manufacturing platform Strategic supplier sourcing
~ 25%
$15
Infrastructure
Q3-Q4 2006 2007 2008 2009 2010 Target
(IT, Finance, HR, Legal, Real Estate)
I/T infrastructure including data center reduction Outsourcing relationships Standardization and best practices Aligned structures Real
The second service targets the enticement of new customers while also catering to loyal customers. This service would consist of
There is a new commission based on the product gross margin , but neither commission will be paid until gross exceeded 70% at the early stages of the measuring year because the people will not be optimistic in achieving the 70% cap (de-motivating factor).
Service innovation. Customers are open to increasingly outsourcing supply chain and logistics activities to third parties. Flexible and innovative solutions are highly important to gain and retain profitable market share.
1.1 Communicate to customers their organisation’s service offer, how it balances organisational and customer needs and how it meets customer expectations
Figures are taken from the Income statement and Balance sheet as at 30 January 2009 and as at 30 January 2010.
While it may have been a good idea to acquire the new equipment because of its greater capabilities, the calculations of the cost savings were in error. The original calculations
“The knowledge that the Microsoft Services team brought to the table, plus their willingness to work with us, was all very critical to the success of the project.”
Current and historical Financial Statements (Income Statement (I/S), Balance Sheet (B/S) and Statement of Cash Flows) from the three most current years for the firm
It is for these reasons we are looking to outsource ALL aspects of the operations and management of the company’s data center. The chart below provides a high level view of the services that we will be looking at within the scope of the project.
A few weeks earlier, John M. Case, board chairman, president, and sole owner of the
How could this be? Circuit City was known for their appliances. It is what made the company a household name. Larger priced items brought in more money. To stop selling your big ticket items, just was not smart. Ramstad reports, the cause was due to the rise in competition from Lowe's and Home Depot. But, laying off your top employees? The sales people are your pillars in a sales driven company Removing commission was not a good idea either. It changed the company from a reward leadership culture, impacting the employee's motivation to sell, to an environment that offered little motivation to promote the company's products. This had an impact on the company's revenue.
The advertising strategy was also to be an immediate market follower. J.D.B.T.’s advertisements were modified by comparing them to the top rated brands’ advertisements. This worked well until R&D came into effect. Other companies were able to advertise titles such as Highest Performance Processor, and Technical Leader Most R&D. We had a decline in our advertising because we did not strategize in the beginning to invest in the R&D as fully as other companies.
3. Centralized IT system for the affiliates with the rollout of new technologies outsourced –
2. Compares the returns of the asset to the market over a period of time (Beta)
Service firms are increasingly using customer service to develop sustainable competitive advantage – through value generation as well as differentiation. This