Broadridge Financial Solutions, Inc. · NYSE:BR
Broadridge Financial Solutions — Q4 FY2018 Earnings Presentation
25 slides from Broadridge Financial Solutions's earnings presentation, Aug 7, 2018
Slide 1: Earnings Webcast & Conference Call Fourth Quarter and Fiscal Year 2018
EXHIBIT 99.2 Earnings Webcast & Conference Call Fourth Quarter and Fiscal Year 2018 © 2017 | 1
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
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
Slide 4: Use of Non-GAAP Financial Measures: Free Cash Flow
Use of Non-GAAP Financial Measures Free Cash Flow In addition to the Non-GAAP financial measures discussed above, we provide Free cash flow information because we consider Free cash flow to be a liquidity measure that provides useful information to management and investors about the amount of cash g
Slide 5: Highlights
Highlights . Strong fiscal year 2018 financial results • Recurring fee revenues rose 6% and Event-driven revenues up 30% • Diluted EPS growth of 32% and Adjusted EPS growth of 34% . 33% dividend increase emphasizes commitment to long-term shareholder value creation and balanced capital allocation •
Slide 6: Outlook and Fiscal Year 2019 Guidance
Outlook and Fiscal Year 2019 Guidance . Broadridge firmly positioned to capitalize on long-term opportunities • Evolution in financial services driving need to mutualize costs and integrate new technologies • Recent SEC announcements on mutual fund communications and proxy process an opportunity for
Slide 7: Business Update
Business Update . Strong Closed sales reflect momentum across Governance, Capital markets and Wealth management . ICS benefiting from continued growth in recurring revenues • Strong stock and interim record growth fueled strength in core governance • Data and analytics also contributing to growth •
Slide 8: Executing Against Investor Day Themes
Executing Against Investor Day Themes Extend Governance Drive Capital Markets Build Wealth Management • Driving next-gen • Extending global post • Continued strong interest regulatory communications trade technology platform from key clients in 30e-3 and Enhanced Continued progress integrated We
Slide 9: Fourth Quarter 2018 Revenue Growth Drivers
Fourth Quarter 2018 Revenue Growth Drivers ▪ Fourth Quarter 2018 Total revenues declined 2% to $1.3 billion +4% 0% -2% -2% $1,346M -4% $1,320M ▪ Fourth Quarter 2018 Recurring fee revenues grew 7% to $862 million Organic Growth: 6% +7% +5% +3% +1% $862M $806M - 2% Note: Amounts may not sum due to rou
Slide 10: Fiscal Year 2018 Revenue Growth Drivers
Fiscal Year 2018 Revenue Growth Drivers ▪ Fiscal Year 2018 Total revenues grew 5% to $4.3 billion +2% +4% 0% +5% -1% $4,330M $ 4,143M ▪ Fiscal Year 2018 Recurring fee revenues grew 6% to $2.6 billion Organic Growth: 5% +1% +6% +6% -3% +2% $2,610M $2,451M Note: Amounts may not sum due to rounding © 2
Slide 11: Fourth Quarter 2018 GAAP and Adjusted Operating Income and Adjusted EPS
Fourth Quarter 2018 GAAP and Adjusted Operating Income and Adjusted EPS $ in millions, except per share amounts Year-over-Year Change in Operating Income Year-over-Year Change in EPS and and Adjusted Operating Income Adjusted EPS +9% +10% -10% -11% © 2018 | 11
Slide 12: Fiscal Year 2018 GAAP and Adjusted Operating Income and Adjusted EPS
Fiscal Year 2018 GAAP and Adjusted Operating Income and Adjusted EPS $ in millions, except per share amounts Year-over-Year Change in Operating Income Year-over-Year Change in EPS and and Adjusted Operating Income Adjusted EPS +10% +34% +32% +12% © 2018 | 12
Slide 13: Segment Results
Segment Results ($ in millions) Investor Communication Solutions ("ICS") 4Q Fiscal Year 2017 2018 Change 2017 2018 Change Recurring fee revenues $589 $628 7% $1,626 $1,699 5% Event-driven fee revenues 91 61 (33)% 219 284 30% Distribution revenues 476 423 (11)% 1,554 1,513 (3)% Total revenues $1,156
Slide 14: Capital Allocation and Summary Balance Sheet
Capital Allocation and Summary Balance Sheet $ in millions Select Uses of Cash in Free Cash Flow FY18 (a) FY18 Free cash flow includes $41 million from excess tax benefits from stock-based compensation (b) Includes purchase of intellectual property assets (c) Purchases of Treasury stock, net of proc
Slide 15: Record Sales Building Revenue Backlog
Record Sales Building Revenue Backlog $ in millions Year-over-Year Closed Sales Recurring Revenue Backlog as of Performance1 June 301,2 Total ~$295 +14% (1) Closed sales and Recurring Revenue Backlog are Broadridge estimates and subject to revision. (2) Recurring Revenue Backlog represents an estima
Slide 16: Fiscal Year 2019 Guidance
Fiscal Year 2019 Guidance Recurring fee revenue growth 5 - 7% Total revenue growth 3 - 5% Operating income margin - GAAP ~14.5% Adjusted Operating income margin - Non-GAAP ~16.5% Diluted earnings per share growth 12 - 16% Adjusted earnings per share growth - Non-GAAP 9 - 13% Free cash flow - Non-GAA
Slide 17: Closing Summary
Closing Summary . Strong fiscal year 2018 results • Recurring revenues up 6% • Diluted EPS and Adjusted EPS rose 32% and 34%, respectively • Record Closed sales . Strong fourth quarter finish to fiscal year 2018 • Recurring revenues up 7% • Closed sales of $115 million . Broadridge enters fiscal yea
Slide 18: Appendix
Appendix ©2018 | 18 Ba Broadridge:
Slide 19: Tax Act Impact to Broadridge
Tax Act Impact to Broadridge 2017 2018 2019 FY FY FY $ in millions Indicative Effective Tax Rate (GAAP) 33.1% 23.7% ~20% Net Tax Charges1 - ($15) - Tax Rate Excluding Non-Recurring Gains & Charges2 33.7% 21.0% ~20% Effective Tax Rate (GAAP) 33.1% 23.7% ~20% Net Tax Charges1 - ($15) - Excess Tax Bene
Slide 20: Annual Excess Tax Benefits: FY14-FY18
Annual Excess Tax Benefits: FY14-FY18 © 2018 | 20
Slide 21: FY17-FY20 Three Year Growth Objectives
FY17-FY20 Three Year Growth Objectives FY17 - FY20 Three Year Objectives Recurring fee revenue growth 7 - 9% Total revenue growth 5 - 7% Adjusted Operating income margin expansion ~50bps/yr Adjusted EPS Growth1 14 - 18% (1) FY17 - FY20 Three year Adjusted EPS growth objective was updated February 8,
Slide 22: Reconciliation of GAAP to Non-GAAP Measures
Reconciliation of GAAP to Non-GAAP Measures (Unaudited - Note: Amounts may not sum due to rounding) $ in millions, except per share amounts Three Months Ended June 30, Fiscal Year 2018 2017 2018 2017 Operating income (GAAP) $ 265.4 $ 297.0 $ 594.9 $ 531.6 Adjustments: Amortization of Acquired Intang
Slide 23: Reconciliation of GAAP to Non-GAAP Measures
Reconciliation of GAAP to Non-GAAP Measures (Unaudited - Note: Amounts may not sum due to rounding) Three Months Ended June 30, Fiscal Year 2018 2017 2018 2017 Diluted earnings per share (GAAP) $ 1.72 $ 1.57 $ 3.56 $ 2.70 Adjustments: Amortization of Acquired Intangibles and Purchased Intellectual P
Slide 24: Reconciliation of GAAP to Non-GAAP Measures - FY19 Guidance
Reconciliation of GAAP to Non-GAAP Measures - FY19 Guidance (Unaudited) Adjusted Earnings Per Share Growth Rate (1) Diluted earnings per share (GAAP) 12% - 16% Adjusted earnings per share (Non-GAAP) 9% - 13% Adjusted Operating Income Margin (2) Operating income margin % (GAAP) ~14.5% Adjusted Operat
Slide 25: Broadridge Investor Relations
Broadridge Investor Relations W. Edings Thibault Investor Relations Tel: 516-472-5129 Email: edings.thibault@broadridge.com © 2018 | 25
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