Broadridge Financial Solutions, Inc. · NYSE:BR
Broadridge Financial Solutions — Investor Presentation (September 2023)
54 slides from Broadridge Financial Solutions's investor presentation, Sep 13, 2023
Slide 1: Scaling a Global Fintech Leader Investor Presentation
Scaling a Global Fintech LeaderInvestor PresentationSeptember 2023 EXHIBIT 99.1
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") contains “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act
Slide 3: Use of Non-GAAP Financial Measures
Use of Non-GAAP Financial Measures This presentation includes certain Non-GAAP financial measures including Adjusted Operating income, Adjusted Operating income margin, Adjusted EBITDA, EBITDAR, Adjusted Net earnings, Adjusted earnings per share (“EPS”), Free cash flow, Free cash flow conversion, an
Slide 4: A clear path for long term growth
A clear path for long term growth A global Fintech leader addressing a large and growing market Three franchise businesses executing on clear growth strategies grounded in long term trends Long track record delivering consistent growth and strong total shareholder returns 2014 Invest for Growth 2017
Slide 5: Broadridge is a global Fintech leader
Broadridge is a global Fintech leader Managing proxy voting for ~800M equity shareholder positions Powering $10T per day in fixed income and equity trades Distributing more than 7B critical communications each year 800 million $10 TRILLION 7 billion Broadridge powers the critical infrastructure behi
Slide 6: $60 billion and growing market opportunity
Technology and operations spend by global banks estimated to be over $200 Billion $60 billion and growing market opportunity $60B CURRENT OPPORTUNITY $22B GOVERNANCE $23B CAPITAL MARKETS $16B WEALTH
Slide 7: Three strong growing franchises with $4 billion in Recurring revenue
Capital Markets $965M Recurring Revenue 14% Average Annual Growth Wealth & Investment Management $560M Recurring Revenue10% Average Annual Growth Governance$2.5B Recurring Revenue 9% Average Annual Growth $4.0B FY’23 RECURRING REVENUE Three strong growing franchises with $4 billion in Recurring reve
Slide 8: Executing across Governance, Capital Markets, and Wealth & Investment Management
Broadridge is executing across Governance, Capital Markets, and Wealth & Investment Management Extend Governance Grow Capital Markets Build Wealth & Investment Mgmt. $2.5B +9% YoY $965M +11% YoY $560M+4% YoY Revenue growth paced by strong demand for digital solutions and new clients Equity and fund/
Slide 9: The Broadridge financial model
The Broadridge financial model is focused on driving steady revenue growth and consistent earnings per share growth, generated by: Continued margin expansion from our scale and operational efficiencies Balanced capital allocation leveraging our strong free cash flow businesses Investments in our lon
Slide 10: Strong track record of delivering growth and value
Strong track record of delivering growth and value $M except for per share measures Information about our use of Non-GAAP measures and reconciliations to GAAP measures may be found on slides 43 – 53 $4.06 $3.95 $4.65 $4.55 $5.30 DILUTED EPS (GAAP) FY’2019 – FY’2023 $4.0B9% 10% Recurring revenue aver
Slide 11: Consistent margin expansion
15.0% 13.8% 13.6% 13.3% 15.4% Consistent margin expansion Note: Information about our use of Non-GAAP measures and reconciliations to GAAP measures may be found on slides 43 – 53 +40 bps +60 bps +60 bps EfficiencyContributions from business reengineering and internal growth Digital Margin expansion
Slide 12: Long-term record of consistent revenue and earnings growth
Long-term record of delivering consistent revenue and earnings growth FY’14 – FY’17 (CAGR) FY’17 – FY’20 (CAGR) FY’20 – FY’23(CAGR) Organic Recurring revenue growth1 5% 5% 8% Recurring revenue growth2 7%3 7% 11% Adj. Operating Income Margin expansion (bps/ year) (Non-GAAP) 533 80 77 Adj. Earnings pe
Slide 13: Investor Communication Solutions Segment overview
Investor Communication Solutions Segment overview
Slide 14: ICS Strategy
ICS StrategyExtend our strong and growing Governance franchise Grow End-to-EndIssuer Solutions Build Data-Driven Fund Solutions Drive Next-Gen Regulatory Transform Omni-Channel Communications A leader at the heart of a powerful governance network Recurring revenues of $2.5B and average annual growth
Slide 15: Our network links investors, asset managers, and issuers across North America
Our network links investors, asset managers, and issuers across North America 170M+Retail shareholder accounts 120,000+Institutional shareholders 30,000+Mutual funds and ETFs ISSUERS OF SECURITIES SHAREHOLDERS 200,000+Financial advisors 9,000+Corporate issuers REGULATORY BODIES & TRADE ASSOCIATIONS
Slide 16: Key volume drivers: position and trade volume growth
EQUITY & MUTUAL FUND/ETF POSITION GROWTH Key volume drivers: position and trade volume growth (4)% 8% 3% 2% 3% 13% 6% 9% 12% 1% 4% 1. Reflects position growth processed in the same time period of both years. Therefore, quarterly and annual data may not align2. Represents the estimated change in dail
Slide 17: Innovation and digitization driving shareholder engagement
Broadridge’s focus on innovation and digitization is driving shareholder engagement Enhancing the effectiveness of critical shareholder communications Voting choice pilots are enabling millions of ETF shareholders to register their voting preferences. Our innovative Tailored Shareholder Report solut
Slide 18: ICS segment financial overview
ICS segment financial overview 9% ICS FISCAL YEAR recurring Revenues Avg. Annual Growth 7% 6% $2.5B 11% 11% +9% 13% 10% 12% 7% $2,461 9% YoY Growth Regulatory Customer Comms. Data-Driven Fund Solutions Issuer $ in millions; growth in constant currency
Slide 19: Global Technology and Operations Segment overview
Global Technology and Operations Segment overview
Slide 20: GTO fiscal year recurring revenues
$701M $558M GTO FISCAL YEAR recurring Revenues $1,525 +11% + 4% YoY Growth Wealth & Investment Management Capital Markets 18% 4% 24% 12% Avg. Annual Growth $1.5B GTO Strategy: Grow Capital Markets franchise and continue building next-gen Wealth & Investment Management franchise 7% +8% 8% $ in millio
Slide 21: Capital Markets overview
Capital Markets overview In equity and fixed income trades processed on average per day A global leader in post-trade processing for cash securities Continued growth driven by evolution of global banks Launching AI-powered fixed income trading platform Itiviti adds strength, scale, and attractive re
Slide 22: Wealth & Investment Management overview
Leading provider of back-office capabilities Strong set of differentiated component solutions for front- and middle-office Launching the industry’s only unified front-to-back technology platform Growing Integrated Investment Management Suite Wealth & Investment Management overview 10% Avg. Annual Gr
Slide 23: Fiscal fourth quarter and full year 2023 summary
Fiscal fourth quarter and full year 2023 summary
Slide 24: Key messages from August 8, 2023 earnings call
Key messages as of August 8, 2023, earnings call Broadridge reported strong fourth quarter results, including 8% Recurring revenue growth constant currency and 21% Adjusted EPS growth These results powered a strong Fiscal Year 2023, with 9% Recurring revenue growth constant currency, 9% Adjusted EPS
Slide 25: Summary financial performance
Summary financial performance Q4’23 Inc./(Dec.) FY’23 Inc./(Dec.) Recurring revenues $1,259 7% $3,987 7% Total revenues 1,839 7% 6,061 6% Operating income 454 33% 936 23% Adjusted Operating income (Non-GAAP) 531 22% 1,199 12% Adjusted Operating income margin (Non-GAAP) 28.9% 360bps 19.8% 110bps Dilu
Slide 26: Investor Day FY20-FY23 growth objectives vs performance
Investor Day FY20-FY23 Growth Objectives FY20-FY23 Performance Organic Recurring revenue growth 5 – 7% 8% Recurring revenue growth 7 – 9% 11% Adjusted Operating income margin – Non-GAAP 50+ bps/yr 77 bps Adjusted earnings per share growth – Non-GAAP 8 – 12% 12% Broadridge delivered at or above the h
Slide 27: Fiscal fourth quarter and full year 2023 appendix
Fiscal fourth quarter and full year 2023 appendix
Slide 28: Recurring revenue increased 8% in fourth quarter 2023
$1,259 16% 10% $ in millions; growth in constant currency 10% +8% 9% Fiscal Year Recurring Revenue growth Q4 Recurring Revenue Recurring revenue increased 8% in fourth quarter 2023 Information about our use of Non-GAAP measures and reconciliations to GAAP measures may be found on slides 43 – 53
Slide 29: ICS fourth quarter and fiscal year 2023 Recurring revenues
Regulatory Customer Comms. Data-Driven Fund Solutions Issuer 7% 7% 12% 5% ICS Q4 Recurring Revenues Ics fiscal year recurring Revenues $858 +7% Information about our use of Non-GAAP measures and reconciliations to GAAP measures may be found on slides 43 – 53 +9% $ in millions; growth in constant cur
Slide 30: GTO fourth quarter and fiscal year 2023 Recurring revenues
GTO Q4 Recurring Revenues Gto fiscal year recurring Revenues $1,525 11% 4% +9% Information about our use of Non-GAAP measures and reconciliations to GAAP measures may be found on slides 43 – 53 +8% $ in millions; growth in constant currency Capital Markets Wealth & Investment Management $401 12% 4%
Slide 31: Key volume drivers: position and trade growth
8% 6% 5% 1% 3% internal trade growth ITG EQUITY & MUTUAL FUND/ETF POSITION GROWTH Key volume drivers: position and trade growth 1. Q4’22 equity position growth represented 55% of total fiscal year 2022 positions. Q1’22: 7% | Q2’22: 9% | Q3’22: 29% 2. Reflects position growth processed in the same ti
Slide 32: Fourth quarter 2023 Recurring revenue growth drivers
Fourth quarter 2023 Recurring revenue growth drivers RECURRING REVENUE GROWTH CONSTANT CURRENCY WAS 8% ICS $805M 5 pts (1) pt 3 pts 0 pts 7% 0 pts $858M GTO $372M 7 pts (3) pts 5 pts 0 pts 9% (1) pt $401M 5 pts (1) pt 4 pts 0 pts 7% (1) pt 8% Organic Growth: 7 pts $1,259 $ in millions. Pts contribut
Slide 33: Fourth quarter 2023 Total revenue growth drivers
Fourth quarter 2023 Total revenue growth drivers quarterly event-driven revenue 5 pts (1) pt 3 pts 7% fourth QUARTER 2023 total Revenue growth DRIVERS $59M FY’17-FY’23 Quarterly Average $ in millions. Pts contribution to growth 0 pts $1,839 $52
Slide 34: Operating income margin and Adjusted Operating income margin
13.8% 13.6% 13.3% 24.7% 19.8% +40 bps +60 bps +60 bps OPERATING INCOME MARGIN ADJUSTED OPERATING INCOME MARGIN (Non-GAAP) Operating income margin and Adjusted Operating income margin OPERATING INCOME MARGIN 15.4% 28.9% +110 bps Information about our use of Non-GAAP measures and reconciliations to GA
Slide 35: Closed sales
Closed sales $ in millions CLOSED SALES RECURRING REVENUE BACKLOG 12% 10% % of Recurring revenue
Slide 36: Client platform spend and Free cash flow conversion
Client platform spend and Free cash flow conversion Net investments on new client conversions, including development of platform capabilities Last twelve months (LTM) Free cash flow conversion equals Free cash flow for the most recent four quarters divided by Adjusted Net earnings for the same four
Slide 37: Total Capital Returns
Total Capital Returns $2.16 $2.30 $2.56 $2.90 $3.20 11% 6% 11% 13% 10% Dividends per share Capital allocation 2 Net investments on new client conversions, including development of platform capabilities Includes Software purchases and capitalized internal use software Includes acquisitions and minori
Slide 38: Fiscal Year 2024 Guidance
Fiscal Year 2024 Guidance as of August 8, 2023 earnings call FY’24 Guidance Recurring revenue growth constant currency - Non-GAAP 6 - 9% Adjusted Operating income margin - Non-GAAP ~20% Adjusted Earnings per share growth - Non-GAAP 8 - 12% Closed sales $280M - $320M
Slide 39: Fiscal year 2023 Recurring revenue growth drivers
Fiscal year 2023 Recurring revenue growth drivers RECURRING REVENUE GROWTH CONSTANT CURRENCY WAS 9% ICS $2,270M 6 pts (1) pt 5 pts 0 pts 9% (0) pts $2,461M GTO $1,452M 6 pts (2) pts 4 pts 0 pts 8% (3) pts $1,525M 6 pts (2) pts 4 pts 0 pts 7% Organic Growth: 9 pts (1) pt 9% Organic Growth: 9 pts Orga
Slide 40: Fiscal year 2023 Total revenue drivers
Fiscal year 2023 Total revenue drivers FISCAL YEAR 2023 REVENUE DRIVERS 6 pts (1) pt 3 pts (1) pt 6% $ in millions Pts contribution to growth $6,061 $5,709
Slide 41: Fiscal year 2023 Event-driven revenue
$234M FY’17-FY’23 Average Fiscal year 2023 Event-driven Revenue Fiscal year 2023 Event-driven revenue $ in millions
Slide 42: Save the date: Broadridge's Investor Day
Save the date Broadridge’s Investor Day Broadridge will host its Investor Day on December 7, 2023 in New York City Additional details to come W. Edings Thibault Greg FajeSean Silva broadridgeir@broadridge.com Broadridge Investor Relations Contacts
Slide 43: 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
Slide 44: Non-GAAP measures
Non-GAAP 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 circumstances, results have
Slide 45: Adjusted EBITDA and EBITDAR definitions
Adjusted EBITDA reflects Net earnings before interest, taxes, other non-operating (income)/expenses net, depreciation, amortization, Acquisition and Integration Costs, Restructuring charges, and Russia-related exit costs. EBITDAR reflects Adjusted EBITDA before operating lease cost. Our management u
Slide 46: Reconciliation of Operating Income to Adjusted Operating Income
Year ended June 30, Year ended June 30, Year ended June 30, Dollars in millions 2023 2022 2021 2020 2019 2018 2017 2016 2015 2014 Operating Income (GAAP) $936.4 $759.9 $678.7 $624.9 $652.7 $598.1 $534.0 $502.3 $468.5 $418.3 Adjustments: Amortization of acquired intangibles and purchased intellectual
Slide 47: Reconciliation of Diluted EPS to Adjusted EPS
(Unaudited) Year ended June 30, Year ended June 30, Year ended June 30, Fiscal Year Ended June 30 Dollars in millions, except per share amounts 2023 2022 2021 2020 2019 2018 2017 2016 2015 2014 Diluted earnings per share (GAAP) $5.30 $4.55 $4.65 $3.95 $4.06 $3.56 $2.70 $2.53 $2.32 $2.12 Adjustments:
Slide 48: Reconciliation of GAAP to Non-GAAP Measures: Q4 2023
Reconciliation of GAAP to Non-GAAP Measures (Unaudited) Three Months Ended June 30, 2023 Investor Communication Solutions Regulatory Data-Driven Fund Solutions Issuer Customer Comms. Total Recurring revenue growth (GAAP) 5% 11% 7% 7% 7% Impact of foreign currency exchange —% —% —% —% —% Recurring re
Slide 49: Reconciliation of GAAP to Non-GAAP Measures: FY2023
Reconciliation of GAAP to Non-GAAP Measures (Unaudited) Fiscal Year Ended June 30, 2023 Investor Communication Solutions Regulatory Data-Driven Fund Solutions Issuer Customer Comms. Total Recurring revenue growth (GAAP) 6% 11% 12% 9% 8% Impact of foreign currency exchange —% 1% —% —% —% Recurring re
Slide 50: Reconciliation of GAAP to Non-GAAP Measures
Reconciliation of GAAP to Non-GAAP Measures (Unaudited) 3 Months Ended June 30 Fiscal Year Ended June 30 Dollars in millions 2023 2022 2023 2022 2021 Operating income (GAAP) $454.2 $341.7 $936.4 $759.9 $678.7 Adjustments: Amortization of Acq. Intangibles and Purchased Intellectual Property 51.6 58.2
Slide 51: Reconciliation of GAAP to Non-GAAP Measures notes
Reconciliation of GAAP to Non-GAAP Measures (Unaudited) (a) Real Estate Realignment Expenses were $22.6 million for the three months ended June 30, 2022, and $0.0 million, $23.0 million, and $29.6 million, for the fiscal years ended June 30, 2023, 2022, and 2021, respectively. Covid-19 Related Expen
Slide 52: Reconciliation of GAAP to Non-GAAP Measures: Free cash flow and net earnings
Reconciliation of GAAP to Non-GAAP Measures (Unaudited) FY 2022 FY 2023 Dollars in millions Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Net cash flows (used in) provided by operating activities (GAAP) $ (135.4) $ 40.8 $ 80.7 $ 457.4 $ (204.5) $ 123.1 $ 175.6 $ 729.2 Capital expenditures and Software purchases and capit
Slide 53: Reconciliation of GAAP to Non-GAAP Measures: Fiscal Year 2024 Guidance
Reconciliation of GAAP to Non-GAAP Measures: Fiscal Year 2024 Guidance Fiscal Year, 2024 FY24 Recurring revenue growth Impact of foreign currency exchange (a) 0.5% Recurring revenue growth constant currency – Non-GAAP 6-9% FY24 Adjusted Operating income margin (b) Operating income margin % – GAAP ~1
Slide 54: Reconciliation of GAAP to Non-GAAP Measures: Adjusted EBITDA and leverage
Reconciliation of GAAP to Non-GAAP Measures (Unaudited) Fiscal Year Ended June 30, Dollars in millions 2023 Net Earnings $630.6 Provision for income taxes 164.3 Interest expense, net 135.5 Other non-operating expenses 6.0 Operating income 936.4 Adjustments Depreciation and Amortization 84.4 Amortiza
Broadridge Financial Solutions — Investor Presentation (September 2023) on 6ix