Broadridge Financial Solutions, Inc. · NYSE:BR
Broadridge Financial Solutions — Q3 FY2021 Earnings Presentation
27 slides from Broadridge Financial Solutions's earnings presentation, May 4, 2021
Slide 1: Scaling a Global Fintech Leader: Third Quarter Fiscal Year 2021 Earnings
0© 2021 | Scaling a Global Fintech Leader E A R N I N G S C O N F E R E N C E C A L L Third Quarter Fiscal Year 2021
Slide 2: Forward-looking statements
1© 2021 | Forward-looking statements This presentation and other written or oral statements made from time to time by representatives of Broadridge Financial Solutions, Inc. ("Broadridge" or the "Company") may contain “forward-looking statements” within the meaning of the Private Securities Litigati
Slide 3: Forward-looking statements (Itiviti acquisition)
2© 2021 | Forward-Looking statements Factors related to the transactions discussed in this presentation that could cause actual results to differ materially from those contemplated by the forward-looking statements include: • uncertainties as to the timing to consummate the acquisition of Itiviti (t
Slide 4: Use of Non-GAAP financial measures and KPIs
3© 2021 | Use of Non-GAAP financial measures and KPIs Use of Non-GAAP Financial Measures This presentation includes certain Non-GAAP financial measures including Adjusted Operating income, Adjusted Operating income margin, Adjusted Net earnings, Adjusted earnings per share (“EPS”) and Free cash flow
Slide 5: Key messages
4© 2021 | Key messages Well-positioned to achieve long-term growth, including the higher end of the three-year growth objectives presented at Investor Day Executing on key strategic initiatives across Governance, Capital Markets and Wealth & Investment Management Broadridge is investing internally a
Slide 6: Executing on our clear growth strategy
5© 2021 | Executing on our clear growth strategy • Seamlessly processing record growth in shareholder positions • Delivering on Shareholder Rights Directive II capabilities • Enhanced Virtual Shareholder Meeting capabilities driving additional growth • Pending acquisition of Itiviti will extend Broa
Slide 7: On track to deliver at the higher end of long-term growth objectives
6© 2021 | On track to deliver at the higher end of long-term growth objectives 1 2 3 Revised outlook for FY21, increased investment, and acquisition of Itiviti position Broadridge to achieve the higher end of our three-year growth objectives Broadridge is delivering strong results and executing on o
Slide 8: Summary financial performance
7© 2021 | Summary financial performance $ in millions, except per share data THIRD QUARTER SUMMARY FINANCIAL RESULTS 2021 2020 Inc./(Dec.) Recurring revenues $900 $835 8% Total revenues 1,390 1,250 11% Operating income 239 226 6% Adjusted Operating income (Non-GAAP) 284 262 8% Adjusted Operating inc
Slide 9: Recurring revenue increased 8% in third quarter
8© 2021 | Recurring revenue increased 8% in third quarter 2021 RECURRING REVENUE GROWTH 6% 6% 10% FY'18 FY'19 FY'20 FY'21 8 - 10% Guidance $835 $900 Q3'20 Q3'21 +8% $ in millions
Slide 10: Third quarter 2021 segment recurring revenues
9© 2021 | Regulatory Customer Comms. Data-Driven Fund Solutions Issuer Note: Amounts may not sum due to rounding $164 $163 $35 $44 $89 $90 Q3'20 Q3'21 $529 $586 +11% $ in millions $136 $146 $169 $167 Q3'20 Q3'21 $305 $314 Capital Markets Wealth & Investment Management +3% +28% (1%) +1% +20% (1%) +7%
Slide 11: Key volume drivers: position and trade volume growth
10© 2021 | Key volume drivers: position and trade volume growth 7% 11% 7% 11% 16% 24% 20% 1% 6% 0% 2% 6% 5% 7% Q1'20 Q2'20 Q3'20 Q4'20 Q1'21 Q2'21 Q3'21 Equity MF/ETF EQUITY & MUTUAL FUND/ETF POSITION GROWTH TOTAL INTERNAL TRADE VOLUME GROWTH (1)% (11)% 26% 22% 12% 24% 12%
Slide 12: Third quarter 2021 recurring revenue growth drivers
11© 2021 | $576M $1,211M $623 $835 $900 Q3'20 Recurring Revenue Closed Sales Client Losses Internal Growth Acquisitions Q3'21 Recurring Revenue Third quarter 2021 Recurring revenue growth drivers THIRD QUARTER 2021 RECURRING REVENUES GREW 8% TO $900M Note: Amounts may not sum due to rounding. +6 pts
Slide 13: Third quarter 2021 total revenue growth drivers
12© 2021 | Third quarter 2021 total revenue growth drivers $68 $51 $40 $31 $39 $68 $46 $45 $74 Q3'19 Q4'19 Q1'20 Q2'20 Q3'20 Q4'20 Q1'21 Q2'21 Q3'21 EVENT-DRIVEN REVENUE $52M FY14-FY20 AVERAGE1 $ in millions Pts contribution to growth $1,250 $1,390 Q3'20 Total Revenue Recurring Event-Driven Distribu
Slide 14: Adjusted Operating Income Margin and Operating Income Margin
13© 2021 | Adjusted Operating Income Margin and Operating Income Margin 15.9% 17.1% 17.5% FY'18 FY'19 FY'20 FY'21 21.0% 20.4% Q3'20 Q3'21 ~18% Guidance +80bps +120bps +40bps 13.8% 15.0% 13.8% 18.1% 17.2% Adjusted Operating Income Margin (Non-GAAP) OPERATING INCOME MARGIN (GAAP)
Slide 15: Closed Sales remain on track with fiscal year guidance
14© 2021 | Closed Sales remain on track with fiscal year 2021 guidance CLOSED SALES PERFORMANCE $215 $233 $239 FY'18 FY'19 FY'20 FY'21 CLOSED SALES TO DATE $127 $124 Q3'20 Q3'21 $190- $235 $ in millions Guidance
Slide 16: Capital allocation
15© 2021 | Capital allocation $71 $0 $205 CapEx and Software M&A Client Platform Spend $2.5B acquisition of Itiviti 4. Capital returns to shareholder per share through Annual Dividend and total share repurchase net of option proceeds $391 $578 $269 FY18 FY19 FY20 1 1. Net cash spent on new client co
Slide 17: Itiviti on track to close in May with significant benefits
16© 2021 | Itiviti is on track to close in May and is expected to deliver significant near- and long-term benefits FY’21 FY’22 FY20 - FY23 Investor Day CAGR Objectives Recurring Revenue Growth Contribution 1 pt ~8 pts 2.5-3.0 pts Adjusted EPS1 Growth Contribution ~(1 pt) 2-3 pts 2 pts 1. Non-GAAP me
Slide 18: Full-year guidance for fiscal year 2021
17© 2021 | FY’21 Guidance Updates / Changes Recurring revenue growth 8-10% Raised from higher end of 3-6% Total revenue growth 8-10% Raised from higher end of 1-4% Adj. Operating Income Margin (Non-GAAP) ~18% No change Adj. Earnings per Share Growth (Non-GAAP) 11-13% Raised from higher end of 6-10%
Slide 19: Appendix
Appendix ae pa Broadridge’
Slide 20: Supplemental revenue reporting detail (Unaudited)
19© 2021 | Confidential and Proprietary | Supplemental revenue reporting detail (Unaudited) In the second quarter of fiscal year 2021, the Company recast its disaggregated revenue by product line disclosures to reflect internal realignment of the Company’s revenue reporting. Prior period amounts hav
Slide 21: Explanation of Non-GAAP Measures and Reconciliation of GAAP to Non-GAAP Measures
20© 2021 | Explanation of Non-GAAP Measures and Reconciliation of GAAP to Non-GAAP Measures
Slide 22: Non-GAAP measures
21© 2021 | Non-GAAP measures Explanation and Reconciliation of the Company’s Use of Non-GAAP Financial Measures The Company’s results in this presentation are presented in accordance with U.S. generally accepted accounting principles ("GAAP") except where otherwise noted. In certain circumstances, r
Slide 23: Non-GAAP measures
22© 2021 | Non-GAAP measures We exclude Acquisition and Integration Costs, IBM Private Cloud Charges, Real Estate Realignment and Covid-19 Related Expenses, the Investment Gain, the Software Charge and the Loss on Acquisition-Related Financial Instrument from our Adjusted Operating income (as applic
Slide 24: Reconciliation of GAAP to Non-GAAP measures (Unaudited)
23© 2021 | Confidential and Proprietary | Reconciliation of GAAP to Non-GAAP measures (Unaudited) (a) Calculated using the GAAP effective tax rate, adjusted to exclude $1.7 million and $14.6 million of excess tax benefits associated with stock-based compensation for the three and nine months ended M
Slide 25: Reconciliation of GAAP to Non-GAAP measures (Unaudited)
24© 2021 | Confidential and Proprietary | Reconciliation of GAAP to Non-GAAP measures (Unaudited) (a) Calculated using the GAAP effective tax rate, adjusted to exclude $1.7 million and $14.6 million of excess tax benefits associated with stock-based compensation for the three and nine months ended M
Slide 26: Reconciliation of GAAP to Non-GAAP measures (Unaudited)
25© 2021 | Confidential and Proprietary | Reconciliation of GAAP to Non-GAAP measures (Unaudited) Note: Amounts may not sum due to rounding. Year ended June 30, Dollars in millions 2020 2019 2018 2017 Operating income (GAAP) $624.9 $652.7 $598.1 $534.0 Adjustments: Amortization of Acquired Intangibl
Slide 27: Broadridge Investor Relations Contacts
26© 2021 | W. Edings Thibault Tel: 516-472-5129 Email: Edings.Thibault@Broadridge.com Broadridge Investor Relations Contacts
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