Broadridge Financial Solutions, Inc. · NYSE:BR

Broadridge Financial Solutions — Investor Presentation (August 2020)

43 slides from Broadridge Financial Solutions's investor presentation, Aug 27, 2020

  1. Slide 1: Q1 FY21 Investor Presentation

    EXHIBIT 99.1 Q1 FY21 Investor Presentation AS OF AUGUST 11, 2020

  2. 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 Financial Solutions, Inc. ("Broadridge" or the "Company") may contain “forward-looking statements” within the meaning of the Private Securities Litigation Reform

  3. Slide 3: Use of Non-GAAP Financial Measures

    Use of Non-GAAP Financial 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 circumstan

  4. Slide 4: The Broadridge Story

    The Broadridge Story $3.0B 7% Strong market position across FY20 Recurring Fee 3-Year Recurring Governance, Capital Markets, and Wealth Revenue Revenue Growth CAGR Management FY17 – FY20 (1) (2) Platform-based business model creates 98% 17% unique value for our clients Recurring fee 3-Year Adjusted

  5. Slide 5: Performance vs. FY17-FY20 Three Year Growth Objectives

    Performance vs. FY17-FY20 Three Year Growth Objectives Performance Investor Day FY17-FY20 Growth Objectives 3-year CAGR Organic recurring fee revenue growth 5 – 7% 5%  Recurring fee revenue growth 7 – 9% 7%  Total revenue growth 5 – 7% 3% Adjusted Operating income margin expansion ~50bps/yr. ~83bp

  6. Slide 6: The Industry's Leading Choice

    The Industry’s Leading Choice GOVERNANCE CAPITAL MARKETS WEALTH MANAGEMENT • Process 80% of outstanding • Clear and settle on • Support 50M+ accounts shares in the United States, average over $8T in through our technology process in over 120 equity and fixed income platform international markets tra

  7. Slide 7: Platform-based Business Model Creates Unique Value

    Broadridge Platform-based Business Model Creates Unique Value Deep financial services knowledge • Domain expertise • Trusted Multi-client Network managed value • Unique Capability • Scale leadership services • Data & Analytics • Significant IP approach | © 2020 6

  8. Slide 8: Directly Addressable Market is $25-40B

    Broadridge’s Directly Addressable Market is $25-40B Large Growth Opportunity KEY MARKET TRENDS CAPITAL GOVERNANCE & MARKETS COMMUNICATIONS MUTUALIZATION $10-15B $9-13B DIGITIZATION $6-12B DATA & ANALYTICS WEALTH MANAGEMENT 100% = $25-40B | © 2020 7

  9. Slide 9: Broadridge Business Model is Strong

    Broadridge Business Model is Strong • Large, recurring revenue base with good visibility aided Sustainable Growth by $355 million revenue backlog • Organic strength driven by large addressable market Steady Margin • Continued scale and operational leverage Expansion • Focus on operational efficienci

  10. Slide 10: Executing Against Investor Day Themes

    Executing Against Investor Day Themes Extend Governance Drive Capital Markets Build Wealth Management • Driving next-gen • Extending global post • On track to deliver front regulatory trade technology platform to back wealth communications  Continued progress management platform for  Strengthening

  11. Slide 11: Fiscal Year 2021 Guidance

    Fiscal Year 2021 Guidance Guidance Recurring Revenue growth 2 – 6% Total revenue growth 0 – 4% Adjusted Operating income margin – Non-GAAP Increase of ~100 bps Adjusted earnings per share growth – Non-GAAP 4 – 10% Closed Sales $190 – $235M | © 2020 10

  12. Slide 12: Growth Opportunity: Extend Governance

    Growth Opportunity: Extend Governance 5,000+ 150,000+ CORPORATE ISSUERS INSTITUTIONAL SHAREHOLDERS 27,000+ 140M+ MUTUAL FUNDS AND RETAIL SHAREHOLDER ACCOUNTS ETFs 1,100+ BANKS and BROKER-DEALERS EXTEND GOVERNANCE DRIVE CAPITAL MARKETS BUILD WEALTH MANAGEMENT Fee Revenue = $1.7B Drive Next-gen Grow s

  13. Slide 13: ICS Stock and Interim Record Growth and FY20 Revenues

    ICS Stock and Interim Record Growth and FY20 Revenues FY20 ICS Revenue by Revenue Type FY20 ICS Recurring Revenue by Product Line (Dollars in millions) $3,491 $1,862 Equity Proxy $473 Recurring $1,862 MF & EFT Interims $285 Event- Driven $178 Customer Communications $735 Distribution $1,451 Other IC

  14. Slide 14: Event-Driven Revenues FY07-FY20

    Event-Driven Revenues FY07 – FY20 Dollars in millions $300 284 256 $250 244 59 219 203 200 199 134 $200 180 173 107 178 $194M 59 156 156 86 73 83 $150 67 135 132 71 80 54 58 52 $100 197 57 141 149 137 130 117 132 $50 113 101 98 101 98 83 75 $0 FY07 FY08 FY09 FY10 FY11 FY12 FY13 FY14 FY15 FY16 FY17 F

  15. Slide 15: Growth Opportunity: Drive Capital Markets

    Growth Opportunity: Drive Capital Markets Strong Unique managed Emerging Global market market position services model capabilities momentum • Serve 19 of the 24 US • Support 40+ clients for • Securities Financing & Fixed Income primary both technology and Collateral dealers operations including 7 Ma

  16. Slide 16: GTO Recurring Revenue and Organic Growth

    GTO Recurring Revenue and Organic Growth Annual Recurring Revenues1 Dollars in millions Organic Growth2 $1,200 $1,174 +10.5% $1,100 9% $996 $1,000 $958 7% 6% $900 $869 $800 4% $700 $600 $500 FY17 FY18 FY19 FY20 $400 FY17 FY18 FY19 FY20 1. FY17 – FY19 revenues have been revised to reflect the Broadri

  17. Slide 17: Growth Opportunity: Build Wealth Management

    Growth Opportunity: Build Wealth Management • Educational content • Enriched, digital communications • Trading and account servicing • Wealth management • Clearance & settlement tools • Client and regulatory • Targeted marketing reporting • Wealth mobile portal • Business process automation & workfl

  18. Slide 18: FY20 Record Sales Building Revenue Backlog

    FY20 Record Sales Building Revenue Backlog Recurring Revenue Backlog as of Annual Closed Sales Performance June 301,2 Dollars in millions $270 $239 $240 $233 +8% $215 $210 $188 $180 $146 $151 $150 12% $127 12% of FY20 $120 of FY19 $355 Recurring Recurring $330 Revenue $90 Revenue $60 $30 $0 FY19 FY2

  19. Slide 19: Recurring Revenue in 2008/09 Global Financial Crisis

    Recurring Revenue in 2008/09 Global Financial Crisis Total Recurring Fee Revenue Growth1 Organic Revenue Growth 12% Revenue Growth from Acquisitions 8% 5% 4% 1% 4% FY08 FY09 FY10 FY11 (1) Total recurring fee revenue growth %s, as reported | © 2020 18

  20. Slide 20: Capital Allocation and Summary Balance Sheet

    Capital Allocation and Summary Balance Sheet Select Uses of Cash Year To Date Summary Balance Sheet As of June 30, 2020 As of June 30, 2020 Dollars in millions Assets Cash and cash equivalents $ 477 1 Client Platform Spend $157 Other assets 4,413 $255 Total assets $ 4,890 2 CapEx $99 Liabilities and

  21. Slide 21: Regulatory Update

    Regulatory Update Modernization • Proposes summary annual, semi-annual reports to replace current long-form reports of mutual fund and eliminates overlapping annual prospectus as part of layered approach Positive direction for fund industry, individual investors, and Broadridge communications • • Re

  22. Slide 22: Fourth Quarter Fiscal 2020 Results

    Fourth Quarter Fiscal 2020 Results | © 2020 21

  23. Slide 23: Highlights

    Highlights . Broadridge is executing well in this new and challenging environment • Health and safety of our associates remains our top priority • Our associates and technology are processing record investor communication levels and heavy trading volumes . Exceptional Fourth Quarter results highligh

  24. Slide 24: Fiscal Year 2020 Results: ICS and GTO Revenues

    Fiscal Year 2020 Results: ICS and GTO Revenues ICS GTO Dollars in millions +1% $3,468 $3,491 +18% $1,174 $996 Recurring $1,764 $1,862 +6% Event- Driven $244 $178 (27)% Distribution $1,460 $1,451 FY19 FY20 FY19 FY20 Note: Amounts may not sum due to rounding. | © 2020 23

  25. Slide 25: Broadridge Remains Well-Positioned for Growth

    Broadridge Remains Well-Positioned for Growth . Covid-19 pandemic is accelerating long-term trends driving our growth • Need for resiliency is adding urgency to mutualization discussions • Digitization is likely to accelerate • Ability to adapt data and new technologies critical to driving different

  26. Slide 26: Financial Highlights

    Financial Highlights .1 Strong finish to the fiscal year .2 Event-Driven activity at highest point this year in Q4, but an overall modest year .3 Record full year Closed Sales demonstrate the strength and resilience of the Broadridge model .4 We have good visibility into our Recurring revenue backlo

  27. Slide 27: Fourth Quarter 2020 Revenue Growth Drivers

    Fourth Quarter 2020 Revenue Growth Drivers ▪ Fourth Quarter 2020 Recurring revenues grew 14% to $930 million Organic Growth: 10% $623M $576M +4 pts. +5 pts. +14% +7 pts. $0.9B $0.8B (2) pts. ▪ Fourth Quarter 2020 Total revenues grew 12% to $1.362 billion +3 pts. +12% +10 pts. +1 pt. (1) pt. $1,362M$

  28. Slide 28: Fourth Quarter Fiscal 2020 ICS Results

    Fourth Quarter Fiscal 2020 ICS Results Total Revenues Recurring Revenues Highlights Dollars in millions • Strong organic growth driven by 11% stock record growth, Covid-19 related +12% +12% production shifts, and record number $1,093 $616 of VSMs $980 $550 • Data and analytics product growth $265 $6

  29. Slide 29: Fourth Quarter Fiscal 2020 GTO Results

    Fourth Quarter Fiscal 2020 GTO Results Total GTO Revenues Highlights Dollars in millions • 19% revenue growth driven by balance +19% of organic growth and contribution $314 from acquisitions $263 • 9% Organic growth propelled by continued increase in trading volumes in both the U.S and Canada (equit

  30. Slide 30: Fourth Quarter 2020 Operating Income and EPS

    Fourth Quarter 2020 Operating Income and EPS Dollars in millions, except per share amounts Year-over-Year Change in Operating Income Year-over-Year Change in EPS and Adjusted Operating Income and Adjusted EPS | © 2020 29

  31. Slide 31: Fiscal Year 2020 vs. Fiscal Year 2019

    Fiscal Year 2020 vs. Fiscal Year 2019 | © 2020 30

  32. Slide 32: Fiscal Year 2020 Revenue Growth Drivers

    Fiscal Year 2020 Revenue Growth Drivers ▪ Fiscal Year 2020 Recurring revenues grew 10% to $3.036 billion Organic Growth: 4% +6 pts. +10%$623M +6 pts. +1 pt. $3.0B $576M (2) pts. $2.8B ▪ Fiscal Year 2020 Total revenues grew by 4% to $4.529 billion +6 pts. $3,151M +4% (2) pts. (0) pt. -1 pt. $4.5B $4.

  33. Slide 33: Full Year Fiscal 2020 Results

    Full Year Fiscal 2020 Results ICS GTO Dollars in millions Total Revenues Recurring Revenues +18% +1% +6% $3,468 $3,491 $1,862 $1,174 $1,764 $473 $996 Equity Proxy $437 Recurring $1,764 $1,862 $285 MF & ETF Interims $266 Event Driven $244 $178 Customer Comms. $736 $735 Distribution $1,460 $1,451 Othe

  34. Slide 34: Fiscal Year 2020 Operating Income and EPS

    Fiscal Year 2020 Operating Income and EPS Dollars in millions, except per share amounts Year-over-Year Change in Operating Income Year-over-Year Change in EPS and Adjusted Operating Income and Adjusted EPS | © 2020 33

  35. Slide 35: Supplemental Reporting Detail - Product Line Reporting

    Supplemental Reporting Detail - Product Line Reporting1 (1) FY2019 revenues have been revised to reflect the Broadridge Advisor Solutions organizational change. This change had the effect of transferring revenues previously reported in the ICS segment to the GTO segment. In the aggregate, the Total

  36. Slide 36: Explanation of Non-GAAP Measures and Reconciliation of GAAP to Non-GAAP Measures

    Explanation of Non-GAAP Measures and Reconciliation of GAAP to Non-GAAP Measures | © 2020 35

  37. Slide 37: Non-GAAP Measures

    Non-GAAP Measures Adjusted Operating Income, Adjusted Operating Income Margin, Adjusted Net Earnings and Adjusted Earnings Per Share, Adjusted EBITDA and EBITDAR Adjusted Operating income, Adjusted Operating income margin, Adjusted Net earnings and Adjusted earnings per share reflect Operating incom

  38. Slide 38: Reconciliation of GAAP to Non-GAAP Measures (Unaudited)

    Reconciliation of GAAP to Non-GAAP Measures (Unaudited) (a) Calculated using the GAAP effective tax rate, adjusted to exclude $5.8 million and $15.6 million of excess tax benefits associated with stock-based compensation for the three months and fiscal year ended June 30, 2020, and $10.1 million and

  39. Slide 39: Reconciliation of GAAP to Non-GAAP Measures (Unaudited)

    Reconciliation of GAAP to Non-GAAP Measures (Unaudited) Dollars in millions, except per share amounts Three Months Ended June 30, Fiscal Year 2020 2019 2020 2019 Diluted earnings per share (GAAP) $ 1.97 $ 1.55 $ 3.95 $ 4.06 Adjustments: Amortization of Acquired Intangibles and Purchased Intellectual

  40. Slide 40: Reconciliation of GAAP to Non-GAAP Measures (Unaudited)

    Reconciliation of GAAP to Non-GAAP Measures (Unaudited) Note: Amounts may not sum due to rounding. | © 2020 39

  41. Slide 41: Reconciliation of GAAP to Non-GAAP Measures (Unaudited)

    Reconciliation of GAAP to Non-GAAP Measures (Unaudited) Dollars in millions, except per share amounts Fiscal Year 2020 2017 Diluted earnings per share (GAAP) $ 3.95 $ 2.70 Adjustments: Amortization of Acquired Intangibles and Purchased Intellectual Property 1.05 0.60 Acquisition and Integration Cost

  42. Slide 42: Reconciliation of GAAP to Non-GAAP Measures - FY21 Guidance

    Reconciliation of GAAP to Non-GAAP Measures - FY21 Guidance (Unaudited) FY21 Adjusted Earnings Per Share Growth Rate (a) Diluted earnings per share growth (GAAP) 10 – 18% growth Adjusted earnings per share growth (Non-GAAP) 4 – 10% growth FY21 Adjusted Operating Income Margin (b) Operating income ma

  43. Slide 43: Broadridge Investor Relations Contacts

    Broadridge Investor Relations Contacts W. Edings Thibault Tel: 516-472-5129 Email: edings.thibault@broadridge.com Elsa Ballard Tel: 212-973-6197 Email: elsa.ballard@broadridge.com | © 2020 42

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