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GXS Company PresentationBarclays 2010 High Yield Bond and
Syndicated Loan ConferenceMarch 25th, 2010
Bob Segert, President & CEO
March 25, 2010 | Slide 2 © 2010 GXS, Inc.
Forward Looking Statements CERTAIN FORWARD-LOOKING STATEMENTS:
The information set forth in the presentation materials, as well as statements made by representatives of the Company during the course of the presentation, include “forward-looking statements” as defined in the Private Securities Litigation Reform Act of 1995. All statements, other than statements of historical facts, made during the course of the presentation, that address activities, events or developments that the Company expects, believes or anticipates will or may occur in the future are forward-looking statements. These forward-looking statements are affected by risks, uncertainties and assumptions. Accordingly, actual results or outcomes may differ materially from those expressed in the forward-looking statements. You should not place undue reliance on these statements and we undertake no obligation to update or revise any forward-looking statements to reflect events or circumstances that may arise.
March 25, 2010 | Slide 3 © 2010 GXS, Inc.
GXS Today
Award winning B2B e-commerce company
providing Managed Services around the world
Headquartered outside of Washington DC,
servicing customers in 50+ countries
Approximately 30,000 customers and 2,000 B2B
e-commerce professionals
Large recurring revenue stream with strong cash
flow generation
Acquisitions to expand scale and
drive growth
Selected by key global partners as B2B service
provider of choice
March 25, 2010 | Slide 4 © 2010 GXS, Inc.
What We Do…On Demand Access to the Global B2B Ecosystem
GXS Trading Grid ®: Powering the Information Supply Chain
March 25, 2010 | Slide 5 © 2010 GXS, Inc.
Market-Leading B2B Outsourcing GXS Managed Services: People, Process and Technology
250+ Customers use GXS’ Managed Services Today…and New Customer Signings are up 60% Year over Year
Intra-Enterprise Inter-Enterprise
March 25, 2010 | Slide 6 © 2010 GXS, Inc.
Custom Outsourcing
6.6%
Managed Services22.5%
Messaging Services61.9%
B2B Software & Services
4.7%
Data Synchronization
4.3%
Business Overview
Electronic network for real time exchange of electronic documents and data between business partners around the world through the GXS Trading Grid
Outsourced management of customers’ B2B integration infrastructure, including on-boarding of trading partners and mapping / translation services
Tools and services that enhance customers’ abilities to exchange data with trading partners and manage data more efficiency within their enterprise
Software and services that allow customers to effectively manage their day-to-day supply chain activities internally
Custom software and messaging solutions, which consist of applications and products developed to address specific customer needs
LTM 9/30/09 Total Revenue: $346.7mm
Messaging Services
Managed Services
GXS Services and Solutions
B2B Software & Services
Custom Outsourcing
Data Synchronization
LTM 9/30/09 Revenue
March 25, 2010 | Slide 7 © 2010 GXS, Inc.
Diversified Customer Base
Auto & Transport
CPG
Retail
Financial Services
Hi Tech
March 25, 2010 | Slide 8 © 2010 GXS, Inc.
Recognized Industry Leadership
Source: Gartner Research Note G00172249, “Magic Quadrant for Integration Service Providers,” 20 November 2009
“GXS is still by far the leading provider of integration services, as measured by
integration service revenue, international reach and customer base.”
Source: Forrester, The Forrester Wave: B2B Service Providers, Q4 2009, October 2009
“GXS has a strong focus on providing complete managed services for B2B
integration”
March 25, 2010 | Slide 9 © 2010 GXS, Inc.
Leading Retailer Case Study
e-Commerce Strategy– Consolidate multiple VANs and data
exchange systems to GXS – Offer broad range of options to
suppliers of all sizes and locations– Seek a low-touch, black box
outsourcing approach – Redeploy resources to reporting,
exceptions and new projects
Supply Chain Benefits– Real time transmission of information
enabling vendor managed inventory– Trading partner community changing
resulting from expanded product mix and low-cost country sourcing
– Automating electronic business processes to enable warehouse cross-docking; direct-from-supplier shipments Local
SuppliersInternational
SuppliersThird PartyLogistics
Back Office(A/P, Purchasing)
DistributionCenters
RetailStorefronts
Purchase OrdersOrder Confirmations
Ship NoticesCredit & Debit Notes
AS2 – Internet EDITradacoms
Flat FileEDIFACT
Category Sales DataRecalls & Returns
Market IntelBanks
B2B e-Commerce Outsourcing
March 25, 2010 | Slide 10 © 2010 GXS, Inc.
Global Financial Services Case Study
Corporate Accounts Payable – Goal was to increase competitiveness of corporate cash management services through service delivery excellence
– Increased flexibility for security, networking and file formats
– Accelerated new client implementation time frames
– Lowered implementation costs
– Supported 300+ projects in Asia, Americas and Europe
– Expanded into securities and trade finance services
Payables Services
Receivables Services
ACH & Wire TransferPositive Pay & Fraud
Account Reconciliation
Wholesale & Retail LockboxCash ConcentrationACH & Wire Transfer
Transaction Services
Corporate Accounts Receivable
March 25, 2010 | Slide 11 © 2010 GXS, Inc.
$72
$59
$43$34
$0
$20
$40
$60
$80
2005 2006 2007 2008
Driving a New Growth Engine: Managed Services
Managed Services Revenue Growth
Managed Services Pipeline by Quarter
$341$411 $463
$0$100$200$300$400$500
2009 Q1 2009 Q2 2009 Q3
Strong New Business Pipeline
Contract signings up 92% year over year(1)
1) YTD 9/30/09 compared to YTD 9/30/08.
Sampling of customers:
($mm) ($mm)
March 25, 2010 | Slide 12 © 2010 GXS, Inc.
• Industry transforming merger– Combines industry leaders with rich
histories in B2B electronic commerce
– Creates the industry’s premier provider dedicated to B2B with the broadest and deepest portfolio of capabilities.
– Customers expected to benefit from decreased B2B integration costs and improvements in performance, transaction visibility and process control.
• Strong ownership and financial backing continues
– Francisco Partners, Golden Gate Capital, Cerberus, and Norwest Venture Partners
Inovis Merger
• Established 1967 as a division of the General Electric Company
• Approximately 30,000 customers in 50+ countries
• Established 1983 as Harbinger• Over 16,000 customers in 50+
countries
• GXS and Inovis announced on December 8, 2009 an intention to merge companies
March 25, 2010 | Slide 13 © 2010 GXS, Inc.
Cost Savings Analysis – First 12 Months
Commentary
Significant executive and administrative headcount reductions
Redundant internal IT systems and services
Overlapping financial and legal services including auditors, insurance, etc.
Reduction of combined sales force and commission savings
Cost savings through reduction of combined marketing headcount
Reduction in discretionary S&M spend including marketing materials and travel expense
Data Center savings through headcount reduction, third party applications, rent and other services
Transaction Engine savings from platform migrations and reduction of combined headcount
Software engineering savings through elimination of redundant headcount and globalization
Headcount reduction and off-shoring
Elimination of duplicative third party professional and client support spend
$27MM of net run-rate cost savings within the first 12 months after merger
Sales and Marketing
Operations and Engineering
Total Cost Savings
G&A
Client & Professional Services
Savings Areas
March 25, 2010 | Slide 14 © 2010 GXS, Inc.
As of September 30, 2009Pro Forma Pro Forma
($ in Millions) GXS Combined
Cash and Cash Equivalents $45.1 $49.6Restricted Cash 230.0 -
Revolving Credit Facility - -GXS First Lien Term Loan - -GXS Second Lien Term Loan - -New Senior Secured Notes 785.0 785.0
Total Debt $785.0 $785.0
Adjusted EBITDA (1) $119.0 $192.1
Net Secured Debt / Adjusted EBITDA 4.3x 3.8x
Pro Forma Capitalization
(1) Adjusted EBITDA is a non-GAAP measure(2) Adjusted for net cost savings, restructuring, one time fees and related charges
Pro Forma 9/30/09 LTM Capitalization
(2)
March 25, 2010 | Slide 15 © 2010 GXS, Inc.
($ in Millions) PF LTM9/30/2009
GXS Revenue $346.7Inovis Revenue 138.0
Total Revenues $484.7
EBITDA $146.8% margin 30.3%
Adjusted EBITDA (1) $192.1% margin 39.6%
Net Secured Debt / Adjusted EBITDA 3.8x
Adjusted EBITDA / Cash Interest Expense 2.3x
Pro Forma Combined Financial Performance
Pro Forma Financial Performance
(1) Adjusted EBITDA is a non-GAAP measure(2) Adjusted for net cost savings, restructuring, one time fees and related charges
(2)
March 25, 2010 | Slide 16 © 2010 GXS, Inc.
Summary Highlights
Robust Technology
Platform
Recurring Revenue Base
and Strong Free Cash Flow
Scalable Global Infrastructure and Domain
ExpertiseDiversified
Business Mix
Leading Industry Position
Highly Experienced in
B2B eCommerce
March 25, 2010 | Slide 17 © 2010 GXS, Inc.
Questions
North America | gxs.com EMEA | gxs.eu
Bob SegertPresident & CEO
Work +1.301.340.5500E-Mail: [email protected]
ASPAC | gxs.asia.com