Broadridge Financial Solutions, Inc. · NYSE:BR
Broadridge Financial Solutions — Q1 2010 Earnings Presentation
24 slides from Broadridge Financial Solutions's earnings presentation, Nov 3, 2009
Slide 1: Earnings Webcast & Conference Call
Exhibit 99.2 Broadridge Financial Solutions, Inc. Earnings Webcast & Conference Call First Quarter Fiscal Year 2010 November 2, 2009
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 First Quarter 2010 Results and Dan Sheldon, CFO Full Year Guidance Summary Strategy Update Rich Daly, CEO Summary and Closing Comments Rich Daly, CEO Q&A Rich Daly, CEO Dan Sheldon, CFO Marvin Sims, VP Investor Relations Closing Remarks Ri
Slide 4: Opening Remarks - Key Topics
Opening Remarks Key Topics: • Financial results for the first quarter of fiscal year 2010 • A review of closed sales performance • Overview of the Penson transaction 3
Slide 5: Opening Remarks – Key Topics
Opening Remarks – Key Topics First Quarter Fiscal Year 2010 Financial Results: Financial performance for the quarter is in-line with expectations • Revenue and earnings per share for the operating businesses are tracking as planned for the year, before any impact resulting from the closing of the tw
Slide 6: Opening Remarks – Key Topics: Sales Performance Overview
Opening Remarks – Key Topics Sales Performance Overview: Closed sales for the quarter of $31M were in-line with expectations Strong event-driven sales as mutual fund proxy sales activity has gained momentum at a level better and slightly earlier than expected nd Expect mutual fund closed sales activ
Slide 7: Opening Remarks – Key Topics: Penson Transaction Overview
Opening Remarks – Key Topics Penson Transaction Overview: Broadridge to sell approximately $75M in annualized clearing revenues in exchange for approximately $65-75M in annualized outsourcing revenues, via a ten-year global outsourcing contract with Penson Broadridge will exit the clearing business
Slide 8: Penson Transaction - Overview
Penson Transaction - Overview Financial Overview: Frees up net cash of approximately $180-200M and eliminates the on- going clearing business balance sheet risks • Wind down the majority of the clearing balance sheet shortly after close of deal and thereby significantly reducing regulatory capital •
Slide 9: Penson Transaction – Overview (con't)
Penson Transaction – Overview (con’t) Transitioning of business – Two Phases: Phase 1: Sell clearing contracts that currently produce about $75M of annualized clearing revenue, and at close of deal, begin generating approximately $35-40M in annualized outsourcing revenue Phase 2: Penson outsources c
Slide 10: Broadridge Q1 Results and FY10 Guidance
Broadridge Q1 Results and FY10 Guidance Q1 – Revenue growth, earnings and EPS of $0.19 per share are all down, but in-line with expectations Fiscal year 2010 guidance (assumes Penson deal closes in our 3 rd quarter): Expected revenue growth of 6-8% vs. August 2009 guidance of 4-8%. “Low range” impro
Slide 11: Segment Results – Investor Communication Solutions
Segment Results – Investor Communication Solutions 1Q10 1Q09 FY10 Range ($ in millions) Actual Actual Low High Revenues $310 $314 $1,715 $1,737 Growth Rate -1% 5% 12% 13% Fee Revenues $158 $148 $897 $925 Growth Rate 6% 4% 16% 19% Recurring (RC) 7% 9% 11% 13% Event-driven (ED) 5% -4% 29% 35% Distribu
Slide 12: Segment Results – Securities Processing Solutions
Segment Results – Securities Processing Solutions 1Q10 1Q09 FY10 Range ($ in millions) Actual Actual Low High Revenues $124 $133 $504 $515 Growth Rate -7% 7% -6% -4% Trade $71 $81 $290 $299 Growth Rate -11% 7% -7% -4% Non-trade $53 $52 $214 $216 Growth Rate 2% 7% -3% -2% Margin $ $28 $37 $107 $118 M
Slide 13: Segment Results – Clearing and Outsourcing Solutions
Segment Results – Clearing and Outsourcing Solutions 1Q10 1Q09 FY10 Range (Revised) FY10 Range (Original) ($ in millions) Actuals Actuals Low High Low High Revenues $26 $23 $82 $84 $100 $105 Growth Rate 10% -6% -19% -17% -1% 4% Net Interest Income $2 $5 $5 $5 $9 $10 Other Clearing Revenue $18 $12 $3
Slide 14: Segment Results – Other & Foreign Exchange (FX)
Segment Results – Other & Foreign Exchange (FX) 1Q10 1Q09 FY10 Range ($ in millions) Actual Actual Low High Other Fees Revenues $0 $0 $0 $0 Other Fees Margin $0 $0 $0 $0 FX Revenues -$2 $2 -$30 -$20 FX P&L Margin $0 $1 -$10 -$7 Other Interest Expense -$3 -$5 -$11 -$10 Purchase of Senior Notes (one-t
Slide 15: Cash Flow (Non-GAAP) – 1Q10 and FY10 Forecast
Cash Flow (Non-GAAP) –1Q10 and FY10 Forecast Unaudited (In millions) Three Months Ended FY10 Range (c) September 2009 Low High Ridge Clearing Core Financing Processing Broadridge Core Processing Activities Free Cash Flow (Non-GAAP) : Activities Activities (b) Total Earnings $ - $ 26 $ 26 $ 199 $ 214
Slide 16: Broadridge - FY 2010 Financial Guidance Summary
Broadridge - FY 2010 Financial Guidance Summary Revenue growth in a range of 6-8% Closed sales forecast for the year of $185-205M Earnings before interest and taxes margin of 15.3-16.0%, excluding one-time items from Penson transaction (Non-GAAP), and 13.9-14.7% (GAAP) Diluted Earnings Per Share: No
Slide 17: Strategy Update: Investor Communications Strategy
Strategy Update Investor Communications Strategy: Leverage growth opportunities in the core proxy business • Through development of new products that will make the shareholder communications and governance process more transparent and efficient Capitalize on the meaningful growth opportunities in th
Slide 18: Strategy Update: Securities Processing & Outsourcing Strategy
Strategy Update Securities Processing & Outsourcing Strategy: Continue to believe that our core ASP model for securities processing needs a broader offering in order to close more transactions Broadridge remains in a position to offer a unique 3-tier securities processing model Our processing model
Slide 19: Summary
Summary Solid start to fiscal year 2010 as we are tracking to our full year expectations for both revenue and earnings per share, before the impact of one-time items Recurring fee revenues continue to grow and event-driven mutual fund proxy activity has returned Solid performance in closed sales act
Slide 20: Q&A
Q&A There are no slides during this portion of the presentation 19
Slide 21: Closing Comments
Closing Comments There are no slides during this portion of the presentation 20
Slide 22: Appendix
Ce ee Appendix Appendix 2a Ba Broadridge
Slide 23: Broadridge FY10 Guidance
Broadridge FY10 Guidance Revenue ($ in millions) EBIT FY09 FY10 Range FY09 FY10 Range Actual Low High Actual Low High $1,531 $1,715 $1,737 ICS $249 $292 $309 -3% 12% 13% Growth % / Margin % 16.3% 17.0% 17.8% $534 $504 $515 SPS $143 $107 $118 4% -6% -4% Growth % / Margin % 26.7% 21.2% 22.9% $101 $82
Slide 24: Broadridge Q1 Results and FY10 Guidance
Broadridge Q1 Results and FY10 Guidance 1Q10 1Q09 FY10 Range DRIVERS Actual Actual Low High Sales 3% 2% 4% 5% Losses -2% -1% -2% -2% Net New Business 1% 1% 2% 3% Internal Growth -2% 2% -1% 0% Event-Driven 1% 0% 3% 3% Distribution -3% 2% 3% 3% Acquisitions/Divestitures/Other/FX 0% 0% -1% -1% Total Re
Broadridge Financial Solutions — Q1 2010 Earnings Presentation on 6ix