Broadridge Financial Solutions, Inc. · NYSE:BR
Broadridge Financial Solutions — Investor Presentation (May 2014)
32 slides from Broadridge Financial Solutions's investor presentation, May 14, 2014
Slide 1: Continued Market Leadership through Execution and Innovation
Exhibit 99.1 Continued Market Leadership through Execution and Innovation Investor Presentation © 2014 Broadridge Financial Solutions, Inc. Broadridge and the Broadridge logo are registered trademarks of Broadridge Financial Solutions, Inc. May 2014
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: Broadridge Overview
‘Peries Overview ’ ea Broadridge
Slide 4: Broadridge's Strategic Vision and Journey to Drive Top Quartile Stockholder Returns
Broadridge’s Strategic Vision and Journey to Drive Top Quartile Stockholder Returns Leading provider of Investor Communications and Technology-Driven Solutions to banks, broker-dealers, mutual funds, and corporate issuers globally We have strong positions in large and attractive markets with lots of
Slide 5: Broadridge's Business Unit Strategy
Broadridge’s Business Unit Strategy Leading provider of Investor Communications and Technology-Driven Solutions to banks, broker-dealers, mutual funds, and corporate issuers globally Bank/Broker-Dealer Bank/Broker-Dealer Communications and Mutual Fund and Retirement Technology and Operations Issuer
Slide 6: We are a Leader in a Number of Large and Attractive Markets
We are a Leader in a Number of Large and Attractive Markets Investor Communication Solutions Securities Processing Solutions U.S. and Global Banks/Broker- U.S. Brokerage Processing Dealers Regulatory Communications U.S. Fixed Income Processing U.S. Banks/Broker-Dealers Transactional Communications C
Slide 7: Throughout our Journey, we will Continue to Enhance our Capabilities to Drive Growth
Throughout our Journey, we will Continue to Enhance our Capabilities to Drive Growth FY10 0% FY14F ~.1% HORIZON 3 • Disruptive, transformative and longer term businesses FY10 • Examples: Macro trends- digital communications, ~10% cost/capability mutualization, intelligence from unique FY14F data ~30
Slide 8: Investor Communication Solutions (ICS)
Investor Communication Solutions (ICS) 7
Slide 9: Large and attractive markets – Investor Communications is a $10B+ market
Large and attractive markets – Investor Communications is a $10B+ market Total addressable market $10B+ fee revenue Bank/Broker-Dealer (BBD)—Core Regulatory communications (proxy, interims, etc.) Mutual Fund—Natural adjacencies Customer communications Transaction reporting (transaction statements, e
Slide 10: ICS Operates a Unique Business Systems Processing Model
ICS Operates a Unique Business Systems Processing Model Accounts may require Shareholder special Shareholder Preferences processing Consent Database Database Hard Copy Mailings May Be Eliminated via E-Delivery and Suppressions Shares Can Be Voted Electronically Proxy and Interim processing system is
Slide 11: ICS has a Diversified Revenue Base
ICS has a Diversified Revenue Base 1 By product Broad client base Banks Broker-Dealers Mutual Funds Corporate Issuers Increase in electronic distribution reduces postage revenue and increases profits ICS is highly resilient due to our deep customer relationships with our Bank/Broker-Dealer clients 1
Slide 12: ICS-Bank/Broker-Dealer Communications
ICS-Bank/Broker-Dealer Communications What We Do: Competitive Advantages: Indispensible data hub with established Regulatory communications relationships with majority of BBDs – Beneficial proxy and interims for equities – Beneficial mutual fund compliance Strong market position and innovative commu
Slide 13: ICS-Issuer Services
ICS-Issuer Services What We Do: Competitive Advantages: Market Position – only full service provider of Beneficial proxy service shareholder communications to all types of shareholders Registered shareholder communications – Registered proxy services Unmatched Scale – able to leverage one billion –
Slide 14: ICS-Mutual Fund and Retirement Solutions
ICS-Mutual Fund and Retirement Solutions What We Do: Competitive Advantages: Long-standing relationships across Mutual Fund trade processing in the industry defined contribution/trust space Serve every mutual fund and majority of (Matrix) banks/broker-dealers Data aggregation and analytics Unique da
Slide 15: Securities Processing Solutions (SPS)
Securities Processing Solutions (SPS) 14
Slide 16: Technology and Operations spend adds ~$14B to our SPS addressable market
Technology and Operations spend adds ~$14B to our SPS addressable market Securities and investment firms’ overall technology and operations spend is over $100 billion and growing at 5% Total addressable market ~ $14B fee revenue US Brokerage Processing Core equities and fixed income Adjacent markets
Slide 17: Broadridge global processing behind the scenes
Broadridge global processing behind the scenes Broadridge simplifies complex processes 16
Slide 18: Securities Processing North America Market Share Overview
Securities Processing North America Market Share Overview 1 Equity Processing Client Volume FY13 Product Revenues Broadridge ~30% Competitors ~20% M In-house A ~50% R K U.S. $ Fixed Income Client Volume E Equity (~74%) Fixed Income (~16%) T Transactions, $127M Transactions, $57M Broadridge Non-trans
Slide 19: SPS's Client Base is Diversified Across Large Financial Institutions
SPS’s Client Base is Diversified Across Large Financial Institutions Top Equity Processing Fixed Income Outsourcing Clients Retail Institutional Processing Apex Clearing Bank of America/Merrill Lynch Barclays Capital Services BMO Nesbitt Burns CIBC World Markets Deutsche Bank E*Trade Group Edward Jo
Slide 20: SPS-Technology and Operations
SPS-Technology and Operations What We Do: Competitive Advantages: Best-of-breed processing solutions Unique global technology platform – Leading global platform provides processing access to over – Broad asset class coverage 50 countries Broad suite of add-on or point solutions Breadth of asset clas
Slide 21: Financial Strategy
_ y, fence Strategy me Bg Broadridge 20
Slide 22: Our Financial Strategy is a key part of our value creation strategy
Our Financial Strategy is a key part of our value creation strategy Target paying out 40% of net earnings in dividends, but expect no less than 84 cents per share annually (subject to quarterly Board approval) Organic growth with limited financial risk – Avoid significant balance sheet risk – Invest
Slide 23: Appendix
Appendix me 22 Big Broadridge
Slide 24: Key Financial Drivers
oa Key Financial Drivers 3Q 3Q YTD FY14 FY14 Growth Drivers as a % of Recurring Revenue Closed Sales (Recurring) 7% 7% 6% 7% Client Losses (3%) (3%) (1%) (3%) Net New Business 4% 4% 5% 4% Internal Growth® 4% 4% (1%) 2-3% Organic Growth 8% 8% 4% 6-7% Acquisitions 1% 1% 0% 1% | Total Recurring Revenue
Slide 25: Broadridge Q3 and YTD FY14
| Broadridge Q3 and YTD FY14 24 _- $430 $1,071 $1,152 Ics 6% 7% 8% 4 Growth % /Margin% > $178 $487 $521 SPS 5% 0% I% << Growth % /Margin% > $608 $1,558 $1,673 Total Segments 6% 4% 7™ Margin % so (80) $0 (0) Other™ ($8) (14) ($23) (28)| $3 2) $8 61) Fx® $4 $4 $10 $14 S577 $606 $1,566 $1,672 Total Bro
Slide 26: Broadridge FY14 Guidance
Broadridge FY14 Guidance Revenue Earnings FY13 FY14 Range FY13 FY14 Range Actual Low High ($ in millions) Actual Low High $1,760 $1,832 $1,848 ICS $302 $335 $344 8% 4% 5% Growth % / Margin % 17.2% 18.3% 18.6% $661 $687 $695 SPS $85 $117 $125 1% 4% 5% Growth % / Margin % 12.9% 17.0% 18.0% $2,421 $2,5
Slide 27: Cash Flow –YTD FY14 Results and FY14 Forecast
Cash Flow –YTD FY14 Results and FY14 Forecast 26
Slide 28: Revenues and Closed Sales FY08-FY13
Revenues and Closed Sales FY08-FY13 ($ in millions) CAGR Forecast Recurring Fee Revenues FY08 FY09 FY10 FY11 FY12 FY13 FY08-FY13 FY14 ICS $ 567 $ 594 $ 632 $ 720 $ 798 $ 850 8% $923-931 Growth 7% 5% 6% 14% 11% 7% 8-9% SPS $ 534 $ 559 $ 536 $ 594 $ 655 $ 661 4% $687-695 Growth 1% 5% -4% 11% 10% 1% 4-
Slide 29: Reconciliation of Non-GAAP to GAAP Measures
Reconciliation of Non-GAAP to GAAP Measures Free Cash Flow - Non-GAAP Unaudited ($ millions) Nine Months FY14 Range (b) Ending Low High Free Cash Flow (Non-GAAP): Round March 2014 Net earnings from operations (GAAP) Round $ 123 $ 252 $ 265 Depreciation and amortization (includes other LT assets) $ 1
Slide 30: ICS Key Segment Revenue Stats
ICS Key Segment Revenue Stats RC= Recurring ED= Event-Driven Fee Revenues 3Q13 3Q14 YTD FY13 YTD FY14 Type In millions Proxy Equities $ 34.0 $ 37.9 $ 84.8 $ 88.3 RC Stock Record Position Growth 7% 7% 3% 3% Pieces 27.1 30.6 68.1 72.1 0.6 Mutual Funds $ 7.1 $ 9.5 $ 22.7 $ 36.0 ED Pieces 13.0 12.1 36.7
Slide 31: SPS Key Segment Revenue Stats
SPS Key Segment Revenue Stats RC= Recurring ED= Event-Driven In millions Note: Outsourcing is now included in Other Equity Services 30
Slide 32: Broadridge ICS Definitions
Broadridge ICS Definitions Proxy Equities - Refers to the proxy services we provide in connection with annual stockholder meetings for publicly traded corporate issuers. Annual meetings of public companies include shares held in "street name" (meaning that they are held of record by brokers or banks
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