Broadridge Financial Solutions, Inc. · NYSE:BR
Broadridge Financial Solutions — Q3 2012 Earnings Presentation
25 slides from Broadridge Financial Solutions's earnings presentation, May 8, 2012
Slide 1: Earnings Webcast & Conference Call
Exhibit 99.2 Earnings Webcast & Conference Call Third Quarter Fiscal Year 2012 © 2012 Broadridge Financial Solutions, Inc. Broadridge and the Broadridge logo are registered trademarks of Broadridge Financial Solutions, Inc. May 8, 2012
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 Other Rich Daly, CEO Key Topics Third Quarter and YTD FY 2012 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 3
Slide 5: Financial Highlights
Financial Highlights Solid revenue growth Revenues were up 4% for the quarter • Recurring revenues were up 9% – Approximately 50% organic and 50% from acquisitions • Event-driven revenues down slightly for the quarter Year-to-date revenues were up 8% • Recurring revenues were up 13% Non-GAAP diluted
Slide 6: Closed Sales Performance
Closed Sales Performance Year-to-date recurring revenue closed sales were $79M vs $72M in the prior year ICS recurring revenue closed sales year-to-date were $44M SPS recurring revenue closed sales year-to-date were $35M Pipeline remains strong across existing and new products Reaffirming our full y
Slide 7: Revenue Growth Drivers, EBIT and Free Cash Flow
Revenue Growth Drivers, EBIT and Free Cash Flow Historical CAGR Actual 3Q 3Q YTD Forecast (FY05-FY10) FY11 FY12 FY12 FY12 6% (2)% Total Revenue Growth 4% 8% 7-8% 4% 3% Closed Sales (Recurring) 3% 3% 4% (2)% (1)% Client Losses (1)% (1)% (1)% 2% 2% Net New Business 2% 2% 3% (a) 3% 1% Internal Growth 1
Slide 8: Penson – Impairment Analysis
Penson – Impairment Analysis Note Receivable - full principal amount of ~$21M charge in Q3 – Balance $0M (cancellation due to Penson restructuring) Long-Term Investments (Penson Stock) - ~$11M charge YTD – Balance ~$2M (Other-than-temporary impairment/mark-to- market) Deferred Client Conversion and
Slide 9: Segment Results & Forecast – Investor Communication Solutions
Segment Results & Forecast – Investor Communication Solutions Revenue/Growth EBIT/Growth (Non-GAAP) Margin/Growth (Non-GAAP) Q3: $374M / 1% $37M / 23% 9.9% / 170 bps YTD: $1,004M / 7% $56M / 43% 5.6% / 150 bps FY12: $1,648 to 1,655M / 6% $241 to 251M / 13 to 18% 14.6 to 15.0% / 90 to 150 bps Recurri
Slide 10: Segment Results & Forecast – Securities Processing Solutions
Segment Results & Forecast – Securities Processing Solutions Revenue/Growth EBIT/Growth (Non-GAAP) Margin/Growth (Non-GAAP) Q3: $169M / +10% $25M / (8)% 14.6% / (300) bps YTD: $489M / +11% $73M / +8% 14.9% / (30) bps FY12: $654 to 660M / +10 to +11% $91 to 97M / +5 to +11% 13.9 to 14.7% / (80) to +0
Slide 11: Summary
Summary Solid operating results for the quarter and year-to-date Recurring fee revenue and closed sales results continue to be strong Event-driven revenues have not returned to historical normal levels Non-GAAP earnings were up for the quarter and year-to-date Strong closed sales pipeline, strong br
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: Other & Foreign Exchange (FX)
Segment Results & Forecast – Other & Foreign Exchange (FX) YTD FY12 Range 3Q12 3Q12 Low High Corporate Expenses $(5)M $(18)M $(28)M $(32)M IBM Migration costs $(6)M $(13)M $(33)M $(33)M Penson Impairment charges $(22)M $(32)M $(32)M $(32)M Interest Expense, net $(3)M $(10)M $(14)M $(14)M FX - P&L -
Slide 16: Broadridge 3Q and YTD from Continuing Operations
Broadridge 3Q and YTD from Continuing Operations Revenue Earnings FY11 FY12 FY11 FY12 FY11 FY12 FY11 FY12 Q3 Q3 YTD Q3 YTD Q3 ($ in millions) Q3 Q3 YTD Q3 YTD Q3 $369 $374 $942 $1,004 ICS $30 $37 $39 $56 3% 1% -11% 7% Growth % / Margin % 8.2% 9.9% 4.1% 5.6% $154 $169 $442 $489 SPS $27 $25 $67 $73 15
Slide 17: Broadridge FY12 Guidance from Continuing Operations
Broadridge FY12 Guidance from Continuing Operations Revenue Earnings FY11 FY12 Range FY11 FY12 Range Actual Low High ($ in millions) Actual Low High $1,559 $1,648 $1,655 ICS $213 $241 $251 -7% 6% 6% Growth % / Margin % 13.7% 14.6% 15.2% $594 $654 $660 SPS $87 $91 $97 11% 10% 11% Growth % / Margin %
Slide 18: Cash Flow – YTD FY12 Results and FY12 Forecast
Cash Flow – YTD FY12 Results and FY12 Forecast Free Cash Flow (Non-GAAP) Unaudited (In millions) Nine Months Ended FY12 Range (a) March 2012 Low High Free Cash Flow(Non-GAAP) : Net earnings from continuing operations (GAAP) $ 42 $ 150 $ 162 Depreciation and amortization (includes other LT assets) 68
Slide 19: Closed Sales to Revenue Contribution
Closed Sales to Revenue Contribution Recurring Closed Sales to Revenue (a) ($ in millions) Closed Sales Revenue Contribution (b) Forecast Forecast Backlog FY12 FY12 ICS $65-85 ~$45-65 ~$40-50 ~Contribution to revenue growth ~4% SPS $45-65 ~$30-35 ~$80-100 ~Contribution to revenue growth ~5% Total Re
Slide 20: Revenues and Closed Sales FY05-FY12
Revenues and Closed Sales FY05-FY12 ($ in millions) FY05-10 Forecast FY11-12 Recurring Fee Revenues FY05 FY06 FY07 FY08 FY09 FY10 CAGR FY11 FY12 Growth Rates ICS $ 444 $ 513 $ 519 $ 558 $ 583 $ 610 7% $ 650 $702-705 8% Growth 16% 1% 8% 4% 5% 7% SPS $ 459 $ 458 $ 509 $ 515 $ 537 $ 513 2% $ 522 $545-5
Slide 21: Reconciliation of Non-GAAP to GAAP Measures
Reconciliation of Non-GAAP to GAAP Measures EBIT Reconciliation 3Q11 3Q12 YTD11 YTD12 FY11 FY12 Range ($ in millions) Actual Actual Actual Actual Actual Low High EBIT from continuing operations (Non-GAAP / excluding IBM Migration costs) $53 $60 $94 $120 $285 $314 $328 Margin % 10.1% 11.1% 6.8% 8.0%
Slide 22: One-time Items
One-time Items (For Informational Purposes Only) One-Time Restructuring and Acquisition Related Costs (a) 3Q11 3Q12 YTD11 YTD12 FY11 FY12 Range Actual Actual Actual Actual Actual Low High Deal Costs (b) ($2) $0 ($3) ($2) ($2) ($2) ($2) Amortization of Intangibles ($5) ($7) ($9) ($18) ($15) ($24) ($2
Slide 23: ICS Key Segment Revenue Stats
ICS Key Segment Revenue Stats Fee Revenues 3Q11 3Q12 YTD FY11 YTD FY12 Type RC= Recurring Proxy Equities $ 31.1 $ 31.7 $ 81.2 $ 80.1 RC ED= Event-Driven Stock Record Position Growth 0% 4% -1% 1% In millions Pieces 25.6 24.5 69.6 66.1 Mutual Funds $ 12.8 $ 5.5 $ 30.1 $ 19.3 ED Pieces 16.9 6.6 41.0 29
Slide 24: SPS and Outsourcing Key Segment Revenue Stats
SPS and Outsourcing Key Segment Revenue Stats 3Q11 3Q12 YTD FY11 YTD FY12 Type RC= Recurring ED= Event-Driven In millions Equity Transaction-Based Equity Trades (a) $ 40.7 $ 36.4 $ 109.3 $ 108.1 RC Internal Trade Volume 1,120 996 964 975 Internal Trade Growth 14% -11% 0% 1% Trade Volume (Average Tra
Slide 25: 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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