Blackhawk Network 8K This presentation may contain certain forward-looking statements within the meaning of Section | SEC 1 Apr 14

Roadshow Presentation

April 2014

Roadshow Presentation

April 2014

Exhibit 99.1

Forward Looking Statements

This presentation may contain certain forward-looking statements within the meaning of Section

27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934.

Forward-looking statements are indicated by words or phrases such as "guidance," "believes,"

"expects," "anticipates," "estimates," "plans," "continuing," "ongoing," and similar words or phrases

and the negative of such words and phrases. Forward-looking statements are based on our current

plans

and

expectations

and

involve

risks

and

uncertainties

which

are,

many

instances,

beyond

our control, and which could cause actual results to differ materially from those included in or

contemplated or implied by the forward-looking statements. Such risks and uncertainties include

the following: the risk that Safeway Inc. does not complete the anticipated spin-off to Safeway

stockholders of the Blackhawk stock that it holds (the Spin-Off); our ability to realize some or all of

the potential benefits of the Spin-Off, including the potential tax benefit and new business

opportunities; our ability to grow adjusted operating revenues and adjusted net income as

anticipated, our ability to grow at historic rates or at all, the consequences should we lose one or

more of our top distribution partners or fail to attract new distribution partners to our network or if

the financial performance of our distribution partners' businesses decline, our reliance on our

content providers, the demand for their products and our exclusivity arrangements with them, our

reliance on relationships with card issuing banks, the consequences to our future growth if our

distribution partners fail to actively and effectively promote our products and services, the

requirement

that

comply

with

applicable

laws

and

regulations,

including

increasingly

stringent

money-laundering rules and regulations, risks related to our ongoing relationship with Safeway and

other risks and uncertainties described in our reports and filings with the Securities and Exchange

Commission, including the risks and uncertainties set forth in Item 1A under the heading Risk

Factors in our recent Annual Report on Form 10-K. We undertake no obligation to update forward-

looking statements to reflect developments or information obtained after the date hereof and

disclaim any obligation to do so other than as may be required by law.

Blackhawk

Network

Confidential

–

Reproduction

Redistribution

Prohibited

Blackhawk Overview

•

Full range of prepaid products

•

Broadest gift card selection

•

Distribution

countries

400

distribution partners

•

Proprietary platform for activation,

processing and settlement

•

API-based solutions for digital and

mobile channels

•

Corporate incentives and rewards

channel

The Gift Card Mall

Adjusted

Operating Revenue¹

Adjusted

EBITDA¹

Note 1: Adjusted for non-cash and non-recurring items

including

Safeway

commission

changes

through

2013

–

see

appendix for reconciliation.

$216

$541

2009

2013

$43

$114

2009

2013

Blackhawk Network Confidential – Reproduction or Redistribution Prohibited

Blackhawk Overview –

Network Benefits

Consumers

Estimated 300 million

visits per week

Broad selection in convenient,

one-stop location

Multi-channel: in-store, online

and mobile

Distribution Partners

Over 180,000 active retail distribution locations

Highly productive, growing product category

“Store-within-the-store”

destinations that drive traffic and sales

Processed 242 million load

transactions and $10 billion

load value in 2013

Content Providers

Over 600 leading

consumer brands

Drive incremental traffic and

sales

Expand consumer reach and

acquisition

Blackhawk Network Confidential – Reproduction or Redistribution Prohibited

Expanding Market Opportunities

History Of Innovation

Diversified Revenue Base, Good Visibility

Growth Track Record

A Leading Prepaid Payment Network

Blackhawk Investment Highlights

Blackhawk Network Confidential – Reproduction or Redistribution Prohibited

•

Channel shift to third-party gift

cards with creation of

“destination card malls”

•

“Self-use”

of gift cards

•

Recent growth of prepaid

telecom products

•

Digitalization of gift cards and

wallets through online and

mobile use

•

Incentives & rewards shifting

from physical and travel

products to gift cards

Significant Market Opportunity

Incentives &

Rewards

Third-Party

Gift Cards

General Purpose

Reloadable

Prepaid Telecom

Total Addressable Prepaid Market ($B)

Powerful Trends

Substantial Opportunity for Growth

$88

$56

$40

$37

$10

$221

Blackhawk 2013

Load Value

Total Prepaid Market

2015E Load Value

Source: Mercator, U.S. Prepaid Cards Market Forecasts 2012-2015; Mercator, Prepaid Distribution Strategies in the United States 2013. Third-party gift cards consist of

closed loop gift cards sold through third-party in-store card malls, all open loop gift cards and digital media cards. We believe that the majority of all open loop gift and digital

media cards distributed are third-party distributed.

Strong IPO Year

•

Worldwide load value growth 17%

Productivity improvements:

8% growth

New Content and Distribution

Partners: 7% growth

Acquisitions of Retailo and

InteliSpend in late Q4’13: 2%

growth

+23%

+24%

+27%

21%

Adjusted Operating

Revenue Growth YoY

Adjusted EBITDA

Growth YoY

Adjusted Net Income

Growth YoY

Adjusted EBITDA

Margin

+21%

+15%

+14%

21%

Pro-forma

FY 2013

Financial Performance Since IPO

Key Milestones

Blackhawk Network Confidential – Reproduction or Redistribution Prohibited

Reported

Spin-off Transaction Overview

•

On March 24, 2014 Safeway announced they anticipate

completing the distribution of remaining Blackhawk shares to

Safeway Inc. stockholders on April 14, 2014

Note 1: Total outstanding includes 12,419 (3.0% voting) Class A Shares and 40,168 (97.0% voting)

Class B Shares.

in 000s (as of March 22, 2014)

# Shares

% Outstanding

Shares sold at IPO on 4/18/13

11,500

Additional

shares sold post IPO

773

Total public float

12,273

23.3%

Safeway

37,849

72.0%

Other (partners, management)

2,465

4.7%

Total outstanding (1)

52,587

100.0%

Blackhawk Network Confidential – Reproduction or Redistribution Prohibited

Spin-off Transaction Benefits

Expands Distribution

Opportunities

Strengthens Strategic

Positioning

Independent Capital

Structure

Increases Float

Significantly increases from <25% to ~95%

Eliminates competitive concerns with certain retail

partners; flexibility to pursue government opportunities

Enhances ability to evaluate strategic opportunities

Provides financial flexibility with greater access to

capital and ability to pursue acquisition opportunities

Retention of Key

Personnel

Better positioned to retain and hire top performing

employees

Tax Benefit to

Blackhawk

Substantial benefit ($450M over 15 years) if Safeway

Albertsons merger is consummated

Blackhawk Network Confidential – Reproduction or Redistribution Prohibited

Potential Tax Benefit

Overview

Approximate Financial Impact

($M except per share)(1)

•

If Safeway –

Albertsons merger

consummated, Safeway to bear

the cost on taxable distribution of

Blackhawk stock

•

Blackhawk retains the benefit of

the tax basis step-up

•

Subject to terms of Tax Sharing

Agreement and, among other

things, Blackhawk generating

adequate taxable income to fully

utilize the additional deductions

Note 1: Estimates for illustrative

purposes based on Blackhawk closing

price on 3/31/14. Actual step-up and

subsequent tax deductions are

dependent on value of Blackhawk on

date of distribution

Tax Savings (@ 39% Tax Rate)

~$450

PV @

10%

~$230

Annual Benefit

(15 years)

~$30

PV per

~$4.50

Blackhawk Network Confidential – Reproduction or Redistribution Prohibited

Growth Opportunities

Enhance Productivity at Retail

Expand Content, Products and Services

Expand Domestic Distribution

Grow International Business

Address New Payment Markets

Strategic Acquisitions

Blackhawk Network Confidential – Reproduction or Redistribution Prohibited

Enhance Productivity at Retail

•

Continue migrating U.S.

grocery stores into Best

Practices

•

One additional top 10

distribution partner with fuel

loyalty

•

Continue to expand open loop

gift including variable load

•

Add local/regional content

and more discount deals

•

New planogramming and data

analysis tools

Blackhawk Network Confidential – Reproduction or Redistribution Prohibited

Expand Products and Services

•

Cardpool target revenue

growth of 45%

•

Telecom Online Top-Up and

SIM Cards

•

T-Mobile Mobile Money

•

Continue development of

partners and technology to

win in digital and mobile

channels

Blackhawk Network Confidential – Reproduction or Redistribution Prohibited

Expand Distribution

2014 Prospects

New Opportunities

Other

Q4 2013

Continuing to sign well recognized,

top brands

Many opportunities to continue

expansion with top names in pipeline

Independence from Safeway provides

access to new prospects

New digital channels beginning to

contribute to growth

Blackhawk Network Confidential – Reproduction or Redistribution Prohibited

Grow International Business

•

Expanding distribution: Japan, Korea, Brazil, South Africa and

Singapore

•

Retailo acquisition provided sizable market share in Germany

2014 forecast Adjusted Operating Revenue $19M

•

Recruiting major retailers, banks and telco’s as digital partners

•

Google Play launching in all markets in 2014

•

International load value grew 41% in 2013 and expected to grow

59% in 2014

Blackhawk Network Confidential – Reproduction or Redistribution Prohibited

Addressing New Payment Markets: Incentives

& Rewards Payments Market

Incentives &

Rewards Solutions

Loyalty Solutions

Wellness Solutions

Program

Management

Peer-to-Peer

Sales

Tracking

Rebates

Loyalty

Solution Bundling

Product Features

Fulfillment

Client Services

Customer Service

Card Networks

ATM Networks

Processors

Issuing Banks

Solution

Providers

Technology

Platforms

Program

Managers

Payment

Networks

Blackhawk Network Confidential – Reproduction or Redistribution Prohibited

Addressing New Payment Markets:

•

Integrate BHN and InteliSpend product offerings

•

Closed loop, physical and digital cards

•

Launch new capabilities

•

Solution

Sales

Incentec

technology

platform

•

International open loop offering

•

Improve fulfillment efficiencies including real time activation

2014 Outlook

$ in millions

Load Value

$665 -

$690

Adjusted Operating Revenue

$43 -

$45

Blackhawk Network Confidential – Reproduction or Redistribution Prohibited

Strategic Acquisitions

Criteria for

Acquisitions

Recent

Acquisitions

Well Positioned

to Execute

Independent capital structure and free cash

flow make Blackhawk well positioned to

evaluate strategic acquisitions

•

Strategic fit

•

Earnings accretion

•

Positive free cash flow

•

Synergies –

revenue and expense

InteliSpend and Retailo are examples of

strategic opportunities that extend our core

business and/or provide additional solutions

for our partner base

Blackhawk Network Confidential – Reproduction or Redistribution Prohibited

FINANCIAL REVIEW AND

2014 GUIDANCE

Blackhawk Network Confidential – Reproduction or Redistribution Prohibited

2014 Growth Targets

•

Adjusted Operating Revenue target mid-point +26%

–

InteliSpend contributes +7%

•

Adjusted EBITDA target mid-point +22%

–

Impacted by T-Mobile launch, deferred revenue accounting on

InteliSpend and higher distribution program development expenses

•

Adjusted Net Income target mid-point +13%

–

Interest expense (acquisitions funding + credit costs post SWY spin)

–

Higher depreciation (acquisitions and technology investments)

–

Planned tax rate increase due to state taxes (mitigation possible)

•

For 2015, would not expect these YOY negative impacts

Blackhawk Network Confidential – Reproduction or Redistribution Prohibited

2014 Annual Financial Guidance

2014

2013

% increase

Adjusted Operating Revenue

$ 670M -

$ 690M

$ 541M

24% -

28%

Adjusted EBITDA

$ 137M -

$ 142M

$ 114M

20% -

24%

Adjusted Net Income

$ 64M -

$ 67M

$ 58M

11% -

16%

Adjusted Net Income per Share

$ 1.19 -

$ 1.24

$ 1.09

9% -

14%

•

Tax rate on “Adjusted Pre-tax Income”

of 41% for 2014 has 5%

negative impact on growth in Adjusted Net Income

–

Longer term tax rate should trend to 39% or lower

•

Slower rate of CapEx growth will reduce depreciation increase

•

Forecast 54.0 million weighted average shares (diluted) +3%

Blackhawk Network Confidential – Reproduction or Redistribution Prohibited

Quarterly Guidance

millions

except

per

amounts

Q1’14:

Reminder

–

small

earnings

base

Q1-Q3

can

result

large

swings

minor

variances

Q2’14:

YOY impacted by lumpy Visa gift breakage revenue in Asia-Pac in 2013 ($3.5M)

Q2’14-Q3’14:

Impacted by T-Mobile ongoing launch costs, higher program development and net

marketing expense, transition to insourced call center, depreciation, interest expense and tax rate

Q4’14:

YOY growth normalizes based on typical holiday seasonality

Note:

Annual guidance remains per previous slide and Feb 20, 2014 Investor Conference

Q1 through Q3 comprised of 12 weeks; Q4 is 16 weeks in 52 week year, 17 weeks in 53 week year (2014 is 53 week year)

Adjusted Operating Revenues

Adjusted EBITDA

Adjusted Net Income

Adjusted EPS (rounded)

$111.0

$116.0

$9.5 -

$11.0

$2.3 -

$3.1

$0.04 -

$0.06

$89.1

$7.4

$2.0

$0.04

25%-30%

29%-50%

17%-58%

33%-100%

Q1 2014

Preliminary

Q1 2013

Actual

% Increase

Adjusted Operating

Revenue Growth

Adjusted EBITDA

Margin¹

Adjusted EPS

Growth

Mid-

to Long-Term Financial Targets

20%+

Low 20s

20%+

1. Calculated as Adjusted EBITDA divided by Adjusted Operating Revenue.

Credit Facility Overview

•

$225M Term Loan, $175M initial draw

–

$50M delayed draw available through September 2014

–

Amortization: 5% year 1; 10% year 2; 15% year 3

•

$200M revolving line of credit

–

Short-term working capital needs

–

$100M sublimit for trade credit (L/Cs)

–

Additional $100M with L/C sublimit of $200M during holidays

•

Closed on March 28, 2014

•

Total debt cap = 2.75X LTM Adjusted EBITDA

$525M four-year credit facility

Blackhawk Network Confidential – Reproduction or Redistribution Prohibited

APPENDIX

Blackhawk Network Confidential – Reproduction or Redistribution Prohibited

Adjusted Operating Revenues Reconciliation

(including Pro forma)

(amounts in millions)

2013

2009

Total Operating Revenues

$ 1,138

$ 504

Less: Distribution Partner Commissions

(597)

(266)

Less: Issuing bank contract amendment fee adj.

(12)

Adjusted Operating Revenues

$ 541

$ 226

Adjust for Safeway commission change

(10)

Pro forma Adjusted Operating Revenues

$ 541

$ 216

Blackhawk Network Confidential – Reproduction or Redistribution Prohibited

Adjusted EBITDA Reconciliation

(including Pro forma)

(amounts in millions)

2013

2009

Net income before allocation to NCI

$ 54

Interest income and other income, net

(2)

Interest expense

Income tax expense

Depreciation and amortization

EBITDA

$ 57

Adjustments to EBITDA:

Employee stock-based compensation

Distribution partner mark-to-market expense

Change in fair value of contingent consideration

(15)

Issuing bank contract amendment fee adjustment

(12)

Adjusted EBITDA

$ 114

$ 53

Adjust for Safeway commission change

(10)

Pro forma adjusted EBITDA

$ 114

$ 43

Blackhawk Network Confidential – Reproduction or Redistribution Prohibited

$ 27

$ 112

Thank You

Blackhawk Network Inactive 8-KThis presentation may contain certain forward-looking statements within the meaning of Section