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GXS Company Presentation Barclays 2010 High Yield Bond and Syndicated Loan Conference March 25 th , 2010 Bob Segert, President & CEO

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Page 1: GXS Company Presentation · B2B Software & Services 4.7% ... enabling vendor managed inventory – Trading partner community changing resulting from expanded product mix and low-cost

GXS Company PresentationBarclays 2010 High Yield Bond and

Syndicated Loan ConferenceMarch 25th, 2010

Bob Segert, President & CEO

Page 2: GXS Company Presentation · B2B Software & Services 4.7% ... enabling vendor managed inventory – Trading partner community changing resulting from expanded product mix and low-cost

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.

Page 4: GXS Company Presentation · B2B Software & Services 4.7% ... enabling vendor managed inventory – Trading partner community changing resulting from expanded product mix and low-cost

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

Page 5: GXS Company Presentation · B2B Software & Services 4.7% ... enabling vendor managed inventory – Trading partner community changing resulting from expanded product mix and low-cost

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

Page 6: GXS Company Presentation · B2B Software & Services 4.7% ... enabling vendor managed inventory – Trading partner community changing resulting from expanded product mix and low-cost

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

Page 7: GXS Company Presentation · B2B Software & Services 4.7% ... enabling vendor managed inventory – Trading partner community changing resulting from expanded product mix and low-cost

March 25, 2010 | Slide 7 © 2010 GXS, Inc.

Diversified Customer Base

Auto & Transport

CPG

Retail

Financial Services

Hi Tech

Page 8: GXS Company Presentation · B2B Software & Services 4.7% ... enabling vendor managed inventory – Trading partner community changing resulting from expanded product mix and low-cost

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”

Page 9: GXS Company Presentation · B2B Software & Services 4.7% ... enabling vendor managed inventory – Trading partner community changing resulting from expanded product mix and low-cost

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

Page 10: GXS Company Presentation · B2B Software & Services 4.7% ... enabling vendor managed inventory – Trading partner community changing resulting from expanded product mix and low-cost

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

Page 11: GXS Company Presentation · B2B Software & Services 4.7% ... enabling vendor managed inventory – Trading partner community changing resulting from expanded product mix and low-cost

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)

Page 12: GXS Company Presentation · B2B Software & Services 4.7% ... enabling vendor managed inventory – Trading partner community changing resulting from expanded product mix and low-cost

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

Page 13: GXS Company Presentation · B2B Software & Services 4.7% ... enabling vendor managed inventory – Trading partner community changing resulting from expanded product mix and low-cost

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

Page 14: GXS Company Presentation · B2B Software & Services 4.7% ... enabling vendor managed inventory – Trading partner community changing resulting from expanded product mix and low-cost

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)

Page 15: GXS Company Presentation · B2B Software & Services 4.7% ... enabling vendor managed inventory – Trading partner community changing resulting from expanded product mix and low-cost

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)

Page 16: GXS Company Presentation · B2B Software & Services 4.7% ... enabling vendor managed inventory – Trading partner community changing resulting from expanded product mix and low-cost

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

Page 17: GXS Company Presentation · B2B Software & Services 4.7% ... enabling vendor managed inventory – Trading partner community changing resulting from expanded product mix and low-cost

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