Broadridge Financial Solutions, Inc. · NYSE:BR
Broadridge Financial Solutions — Q2 2013 Earnings Presentation
24 slides from Broadridge Financial Solutions's earnings presentation, Feb 7, 2013
Slide 1: Earnings Webcast & Conference Call Second Quarter 2013
Exhibit 99.2 Earnings Webcast & Conference Call Second Quarter 2013 © 2013 Broadridge Financial Solutions, Inc. Broadridge and the Broadridge logo are registered trademarks of Broadridge Financial Solutions, Inc. February 7, 2013
Slide 2: Forward-Looking Statements
Forward-Looking Statements This presentationand 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 Other Rich Daly, CEO Key Topics Second Quarter and YTD 2013 Dan Sheldon, CFO Highlights and Segment Results Summary Rich Daly, CEO Q&A Rich Daly, CEO Dan Sheldon, CFO Closing Remarks Rich Daly, CEO 2
Slide 4: Key Topics
Opening Remarks Key Topics: Financial Highlights Closed Sales Performance Key Activities Update 3
Slide 5: Financial Highlights
Financial Highlights Recurring revenues for the quarter and YTD were up 3% Primarily due to net new business (closed sales less client losses) Event-driven activity was flat for the quarter Trade volumes challenging, trend is improving for four straight months Non-GAAP diluted earnings per share (EP
Slide 6: Closed Sales Performance
Closed Sales Performance Year-to-date recurring revenue closed sales were down ~45% Primarily due to longer than anticipated sales cycles for large transactions No large transactions of >$5M for the first half • $22M in same period prior year Transactions of <$5M: • ICS recurring revenue closed sale
Slide 7: Key Activities Update
Key Activities Update Penson/Apex Penson Canada substantially completed winding down its operations Questrade, Penson Canada’s largest correspondent, has been converted, and operating on our Outsourcing platform Do not expect any material financial impact from Penson bankruptcy Apex/COR Clearing tra
Slide 8: Revenue Growth Drivers and EBIT Margin
Revenue Growth Drivers and EBIT Margin Historical CAGR 2Q 2Q YTD Actual Forecast (FY07-FY12) FY13 FY13 FY12 FY13 2% Total Revenue Growth 3% 3% 6% 3-4% 3% Closed Sales (Recurring) 3% 3% 3% 4-5% (2%) Client Losses (1%) (1%) (1%) (1)% 1% Net New Business 2% 2% 2% 3-4% (a) 1% Internal Growth (0%) (1%) 1
Slide 9: Segment Results & Forecast – Investor Communication Solutions
Segment Results & Forecast – Investor Communication Solutions Revenue/Growth EBIT/Growth (Non-GAAP) Margin/Growth (Non-GAAP) Q2: $327M / 3% $16M / 56% 5.0% / 170 bps Q2 YTD: $666M / 6% $44M / 130% 6.6% / 360 bps FY13: $1,695 to 1,707M / 4% $291 to 299M / 20 to 23% 17.2 to 17.5% / 230 to 260 bps FY13
Slide 10: Segment Results & Forecast – Securities Processing Solutions
Segment Results & Forecast – Securities Processing Solutions Revenue/Growth EBIT/Growth (Non-GAAP) Margin/Growth (Non-GAAP) Q2: $164M / +2% $20M / (1)% 12.2% / (30) bps Q2 YTD: $318M / (1)% $29M / (39)% 9.3% / (570) bps FY13: $658 to 683M / 0 to +4% $79 to 102M / (13) to +12% 12.0 to 15.0% / (190) t
Slide 11: Summary
Summary Solid operating results year-to-date Recurring fee revenue continues to grow Closed sales pipeline is very strong Clear and executable strategy ICS is a great business, continues on a very strong value creation path SPS is a good business, focused on growth opportunities, streamlining operat
Slide 12: Q&A
Q&A There are no slides during this portion of the presentation 11
Slide 13: Closing Comments
Closing Comments There are no slides during this portion of the presentation 12
Slide 14: Appendix
13 Appendix Bg Broadridge
Slide 15: Segment Results & Forecast – Other & Foreign Exchange (FX)
Segment Results & Forecast – Other & Foreign Exchange (FX) YTD FY13 Range 2Q13 2Q13 Low High Corporate Expenses $(8)M $(15)M $(30)M $(37)M Interest Expense, net $(4)M $(7)M $(17)M $(21)M FX - P&L - Revenue $3M $5M $13M $13M - EBIT $3M $7M $14M $14M - Transaction Activity $(0)M $(1)M $(1)M $(1)M Rest
Slide 16: Broadridge FY13 Q2 and YTD from Continuing Operations
Broadridge FY13 Q2 and YTD from Continuing Operations Revenue Earnings FY12 FY13 FY12 FY13 FY12 FY13 FY12 FY13 Q2 Q2 Q2 YTD Q2 YTD Q2 Q2 Q2 YTD Q2 YTD $317 $327 $630 $666 ICS $11 $16 $19 $44 Growth % / Margin % 8% 3% 10% 6% 3.3% 5.0% 3.0% 6.6% SPS $161 $164 $319 $318 Growth % / Margin % $20 $20 $48
Slide 17: Broadridge FY13 Guidance from Continuing Operations
Broadridge FY13 Guidance from Continuing Operations Revenue Earnings FY12 FY13 Range ($ in millions) FY12 FY13 Range Actual Low High Actual Low High ICS $1,634 $1,695 $1,707 Growth % / Margin % 5% 4% 4% $243 $291 $299 SPS 14.9% 17.2% 17.5% $655 $658 $683 Growth % / Margin % $91 $79 $102 10% 0% 4% To
Slide 18: Cash Flow – YTD FY13 Results and FY13 Forecast
Cash Flow –YTD FY13 Results and FY13 Forecast Free Cash Flow - Non-GAAP Unaudited ($ millions) Six Months Ended FY13 Range (a) December 2012 Low High Free Cash Flow (Non-GAAP) : Round Net earnings from continuing operations (GAAP) 34.1 $ 34 $ 205 $ 218 Depreciation and amortization (includes other L
Slide 19: Recurring Closed Sales to Revenue Contribution
Recurring Closed Sales to Revenue Contribution Recurring Closed Sales to Revenue (a) (b) ($ in millions) Closed Sales Revenue Contribution Backlog Forecast Forecast Forecast FY13 FY13 FY13 ICS $50-70 ~$50-60 ~$35-45 ~Contribution to revenue growth ~3% SPS $60-80 ~$40-50 ~$85-105 ~Contribution to rev
Slide 20: Revenues and Closed Sales FY07-FY13
Revenues and Closed Sales FY07-FY13 ($ in millions) Forecast Recurring Fee Revenues FY07 FY08 FY09 FY10 FY11 FY12 CAGR FY13 ICS $ 529 $ 567 $ 594 $ 632 $ 720 $ 798 9% $862-874 Growth 3% 7% 5% 6% 14% 11% 8-10% SPS $ 527 $ 534 $ 559 $ 536 $ 594 $ 655 4% $658-683 Growth 11% 1% 5% -4% 11% 10% 0-4% Total
Slide 21: Reconciliation of Non-GAAP to GAAP Measures
Reconciliation of Non-GAAP to GAAP Measures Reconciliation of EPS Guidance 2Q12 2Q13 YTD12 YTD13 FY10 FY11 FY12 FY13 Range Actual Actual Actual Actual Actual Actual Actual Low High Guidance Provided in August 2012 - Diluted EPS (Non-GAAP) $0.12 $0.14 $0.27 $0.29 $1.56 $1.37 $1.55 $1.65 $1.75 Acquisi
Slide 22: ICS Key Segment Revenue Stats
ICS Key Segment Revenue Stats RC= Recurring Fee Revenues 2Q12 2Q13 YTD FY12 YTD FY13 Type ED= Event-Driven In millions Proxy Equities $ 24.8 $ 25.3 $ 48.4 $ 50.9 RC Stock Record Position Growth -1% 4% 0% 1% Pieces 21.2 20.8 41.6 41.1 Mutual Funds $ 8.6 $ 9.1 $ 13.8 $ 15.6 ED Pieces 16.6 15.4 23.0 23
Slide 23: SPS and Outsourcing Key Segment Revenue Stats
SPS and Outsourcing Key Segment Revenue Stats RC= Recurring 2Q12 2Q13 YTD12 YTD13 Type ED= Event-Driven In millions Equity Transaction-Based Equity Trades $ 32.8 $ 31.1 $ 69.3 $ 61.1 RC Internal Trade Volume 911 852 963 837 Internal Trade Growth -2% -6% 9% -13% Trade Volume (Average Trades per Day i
Slide 24: 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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