Broadridge Financial Solutions, Inc. · NYSE:BR
Broadridge Financial Solutions — Q3 2010 Earnings Presentation
30 slides from Broadridge Financial Solutions's earnings presentation, May 10, 2010
Slide 1: Earnings Webcast & Conference Call – Third Quarter Fiscal Year 2010
Exhibit 99.2 Broadridge Financial Solutions, Inc. Earnings Webcast & Conference Call Third Quarter Fiscal Year 2010 © 2010 Broadridge Financial Solutions, Inc. Broadridge and the Broadridge logo are registered trademarks of Broadridge Financial Solutions, Inc. May 10, 2010
Slide 2: Forward-Looking Statements
Forward-Looking Statements This presentation and other written or oral statements made from time to time by representatives of Broadridge may contain “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. Statements that are not historical in nature,
Slide 3: Today's Agenda
Today’s Agenda Opening Remarks and Key Topics Rich Daly, CEO Third Quarter 2010 Results and Dan Sheldon, CFO Full Year Guidance Summary Summary and Closing Comments Rich Daly, CEO Q&A Rich Daly, CEO Dan Sheldon, CFO Rick Rodick, VP Investor Relations Closing Remarks Rich Daly, CEO 2
Slide 4: Opening Remarks: Key Topics
Opening Remarks Key Topics: Executive summary Financial results for the third quarter of fiscal year 2010 A review of closed sales performance Business update 3
Slide 5: Opening Remarks – Key Topics Executive Summary
Opening Remarks – Key Topics Executive Summary: Business execution remains strong • Year-to-date record closed sales were 41% higher than last year and client revenue retention rates were at 98% • We continue to grow in all of our markets during this down cycle • We were recently upgraded by Moody’s
Slide 6: Third Quarter Fiscal Year 2010 Financial Results
Opening Remarks – Key Topics Third Quarter Fiscal Year 2010 Financial Results: Revenues for the quarter were up 6%, slightly below expectations • The results were primarily driven by the continued growth in event-driven mutual fund proxy revenues and recurring revenues from the MSSB transaction • Ke
Slide 7: Sales Performance Overview
Opening Remarks – Key Topics Sales Performance Overview: Year-to-date closed sales of $130M increased 41% compared to the same period last year • Recurring revenue sales increased 32% year-to-date • Event-driven revenue sales increased 60% year-to-date Closed three significant Securities Processing
Slide 8: Business Update: Investor Communication Solutions
Business Update Investor Communication Solutions: Equity Proxy • Approximately 25% of the business • Stock record growth down 1% • Client retention and service levels remain very strong • Notice & Access penetration increased to approximately 52% • Global proxy activity is up • Registered clients in
Slide 9: Business Update: Securities Processing & Outsourcing Solutions
Business Update Securities Processing & Outsourcing Solutions: Retention rates are high. No new large concessions Closed three significant sales during the quarter to foreign- based multi-national companies totaling approximately $15M • Three diverse sales, the largest of which was an outsourcing sa
Slide 10: Business Update: IBM Agreements
Business Update IBM Agreements: Key strategic decision that positions Broadridge with the industry leader Business Alliance Agreement • The IBM/Broadridge business alliance is structured to deliver a comprehensive portfolio of technology-based solutions and services to the financial services industr
Slide 11: Broadridge Results From Continuing Operations – Q3 & YTD FY 2010
Broadridge Results From Continuing Operations – Q3 & YTD FY 2010 Key Highlights: Q3 $491M/YTD $1,459M - Revenue Q3 revenues were up 6% all coming from ICS as SPS still down due to planned client losses and concessions YTD revenues up 8% all coming from ICS Q3 10%/YTD 11% EBIT Margin (non-GAAP) Q3 do
Slide 12: Revenue Drivers – Historical and FY10
Revenue Drivers- Historical and FY10 (Continuing Operations) Historical (FY05-FY09) Actual Forecast & FY10 Forecast CAGR YTD FY10 FY10 6% Total Revenue Growth 8% 7% 4% Sales (Recurring) 4% 4% -2% Client Losses -2% -2% 2% Net New Business 2% 2% 3% Internal Growth (a) -2% -2% to -1% 1% Event-Driven (b
Slide 13: Segment Results – Investor Communication Solutions
Segment Results – Investor Communication Solutions 3Q10 3Q09 3Q10 YTD 3Q09 YTD FY09 FY10 Range ($ in millions) Actual Actual Actual Actual Actual Low High Revenues $357 $335 $1,060 $944 $1,531 $1,671 $1,688 Growth Rate 7% -2% 12% 0% -3% 9% 10% Fee Revenues $182 $161 $548 $453 $774 $890 $897 Growth R
Slide 14: Business Results – Securities Processing Solutions
Business Results – Securities Processing Solutions 3Q10 3Q09 3Q10 YTD 3Q09 YTD FY09 FY10 Range ($ in millions) Actual Actual Actual Actual Actual Low High Revenues $127 $130 $379 $403 $534 $503 $507 Growth Rate -2% 1% -6% 6% 4% -6% -5% Trade $69 $72 $213 $236 $311 $283 $286 Growth Rate -4% -7% -10%
Slide 15: Business Results – Outsourcing Solutions
Business Results – Outsourcing Solutions (Continuing Operations) 3Q10 3Q09 3Q10 YTD 3Q09 YTD FY09 FY10 Range 4Q10 ($ in millions) Actual Actual Actual Actual Actual Low High "Run-rate" Revenues $6 $6 $18 $19 $25 $28 $26 $14 Growth Rate 0% 34% -6% 36% 31% 11% 4% Pre-tax Loss -$3 -$2 -$7 -$6 -$9 -$15
Slide 16: Penson Update
Penson Update Evolution of the Penson Deal FY09 Actual results to Continuing Operations GAAP FY09 GAAP Continuing Operations to Fully Converted Penson Phases 1 & 2 (1) (2) (3) (4) (5) (6) (7) Pre-Penson Transaction - Discontinued Operations = Continuing Operations + Penson Phase 1 = FY10 Proforma +
Slide 17: Segment Results – Other & Foreign Exchange
Segment Results – Other & Foreign Exchange (FX) 3Q10 3Q09 3Q10 YTD 3Q 09 YTD FY09 FY10 Range ($ in millions) Actual Actual Actual Actual Actual Low High Other Fees Revenues $0 $1 $2 $1 $2 $2 $2 Other Fees Margin $0 $1 $2 $1 $2 $2 $2 FX Revenues $1 -$8 -$1 -$11 -$18 $4 $6 FX P&L Margin $1 -$2 $2 -$2
Slide 18: Cash Flow – YTD and FY10 Forecast
Cash Flow – YTD and FY10 Forecast Unaudited (In millions) Nine Months Ended FY10 Range (a) March 2010 Low High Cash Flow - Continuing Operations Net earnings from continuing operations (GAAP) $ 109 $ 220 $ 228 Depreciation and amortization (includes other LT assets) 43 60 58 Stock-based compensation
Slide 19: FY 2010 Continuing Operations Financial Guidance Summary
Broadridge - FY 2010 Continuing Operations Financial Guidance Summary Revenue growth around 7% Closed sales forecast for the year remains at $185-205M Earnings before interest and taxes margin of 15.8-16.2% (Non-GAAP) Diluted Earnings Per Share: GAAP EPS (continuing operations) in the range of $1.58
Slide 20: Summary
Summary Earnings per share within the range of original guidance Weaker recurring revenue volumes due to the weak market conditions impacting our business Record event-driven revenues offset weaker recurring revenue volumes Strong future given our consistent ability to execute Strong client revenue
Slide 21: Summary (continued)
Summary (continued) New communications growth opportunities in mutual funds and transfer agency businesses Unique ability to leverage “street” processing leadership Expect securities processing outsourcing annual revenue will be about $100 million when Penson is fully converted IBM agreements create
Slide 22: Q&A
Q&A There are no slides during this portion of the presentation 21
Slide 23: Closing Comments
Closing Comments There are no slides during this portion of the presentation 22
Slide 24: Appendix
Ce ee Appendix Appendix 23 Ba Broadridge
Slide 25: Broadridge 3Q and YTD 2010 from Continuing Operations
Broadridge 3Q and YTD 2010 from Continuing Operations Revenue ($ in millions) EBIT Revenue ($ in millions) EBIT FY09 FY10 FY09 FY10 FY09 FY10 FY09 FY10 Q3 Q3 Q3 Q3 Q3 YTD Q3 YTD Q3 YTD Q3 YTD $335 $357 ICS $33 $28 $944 $1,060 ICS $76 $102 -2% 7% Growth % / Margin % 9.9% 7.9% 0% 12% Growth % / Margin
Slide 26: Broadridge FY10 Guidance from Continuing Operations
Broadridge FY10 Guidance from Continuing Operations Revenue ($ in millions) EBIT FY09 FY10 Range FY09 FY10 Range Actual Low High Actual Low High $1,531 $1,671 $1,688 ICS $249 $279 $285 -3% 9% 10% Growth % / Margin % 16.3% 16.7% 16.9% $559 $531 $533 SPS $134 $87 $94 5% -5% -5% Growth % / Margin % 23.
Slide 27: Closed Sales to Revenue Contribution
Closed Sales to Revenue Contribution Closed Sales Revenue Contribution FY09 FY10 FY09 FY10 FY11 FY12 ($ millions) Actual Forecast Actual Forecast Forecast Forecast Total Revenues 2,073 2,208-2,230 $ Growth 135-157 % Growth 7% Total Closed Sales 140 60 60 20 % Contribution to FY09 Total Revenues 3% 3
Slide 28: Segment Results – Securities Processing Solutions with Outsourcing
Segment Results – Securities Processing Solutions with Outsourcing 3Q10 3Q09 3Q10 YTD 3Q09 YTD FY09 FY10 Range ($ in millions) Actual Actual Actual Actual Actual Low High Revenues $134 $136 $398 $422 $559 $531 $533 Growth Rate -2% 2% -6% 7% 5% -5% -5% Trade $69 $72 $213 $236 $311 $283 $286 Growth Ra
Slide 29: Reconciliation of Non-GAAP to GAAP Measures
Reconciliation of Non-GAAP to GAAP Measures EBIT Reconciliation 3Q09 3Q10 YTD09 YTD10 FY09 FY10 Range ($ in millions) Actual Actual Actual Actual Actual Low High EBIT (Non-GAAP)* $58 $51 $166 $167 $352 $348 $361 Margin % 12.5% 10.4% 12.2% 11.5% 17.0% 15.8% 16.2% Interest & Other ($3) ($3) ($3) ($8)
Slide 30: Key Financial Tactical Points
Key Financial Tactical Points Key transactions and financial impact to FY11: MF Proxy- two large unique jobs which are not expected to repeat in FY11. This is expected to have approximately $(60)M impact on revenues and $(35)M on EBIT Penson transaction is expected to have an incremental $35M impact
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