Broadridge Financial Solutions, Inc. · NYSE:BR
Broadridge Financial Solutions — Investor Presentation (December 2012)
32 slides from Broadridge Financial Solutions's investor presentation, Dec 3, 2012
Slide 1: Continued Market Leadership through Execution and Innovation
Exhibit 99.1 Continued Market Leadership through Execution and Innovation Investor Presentation © 2012 Broadridge Financial Solutions, Inc. Broadridge and the Broadridge logo are registered trademarks of Broadridge Financial Solutions, Inc. December 2012
Slide 2: Forward-Looking Statements
Forward-Looking Statements This presentationand other written or oral statements made from time to time by representativesof 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: Broadridge Overview
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Slide 4: Broadridge is a strong, resilient business with significant growth potential
Broadridge is a strong, resilient business with significant growth potential History of market leadership – Proven ability to address increasingly complex customer needs through technology – Innovation and thought leader in industry for >50 years Strong position in large and attractive markets – Lea
Slide 5: Broadridge Strategy Statement
Broadridge Strategy Statement Our vision is to be the leading provider of Investor Communications and Technology and Operations Solutions to Banks/Broker-Dealers, Mutual Funds, and Corporate Issuers globally – Our mission is to drive the industry we serve to higher levels of efficiency and complianc
Slide 6: Our market position is differentiated and sustainable
Our market position is differentiated and sustainable Investor Communication Solutions Securities Processing Solutions • Proxy services for ~85% of outstanding shares in US • Processed >600 billion shares in 2012 • Used by >5,500 institutional investors globally Processes >$4.5 trillion Enable clien
Slide 7: We are the leader in several markets
We are the leader in several markets Investor Communication Securities Processing Solutions Solutions Market Rank 1 Market Rank 1 Bank/Broker-Dealer US Brokerage Regulatory #1 Processing #1 Communications US Fixed Income Broker-Dealer Processing #1 Transactional #1 Communications Canadian Brokerage
Slide 8: Investor Communication Solutions (ICS)
Investor Communication Solutions (ICS) 7
Slide 9: Large and attractive markets – Investor Communications is a $10B+ market
Large and attractive markets – Investor Communications is a $10B+ market Total addressable market $10B+ fee revenue Bank/Broker-Dealer (BBD)—Core Regulatory communications (proxy, interims, etc.) Mutual Fund—Natural adjacencies Customer communications Transaction reporting (transaction statements, e
Slide 10: ICS Unique Business Systems Processing Model
ICS Unique Business Systems Processing Model PROXY & INTERIMS PROCESSING OVERVIEW "THE PLUMBING" Equity and Mutual Fund Shareholders Street-side Processing Registered Processing BROADRIDGE Broker/Bank 1 Proxy Processing System Issuer 1 / Fund 1 Over 8 million lines of code and approximately 500,000
Slide 11: ICS Product and Client Revenue Overview
ICS Product and Client Revenue Overview We have a strong and diverse product …and we have deep and longstanding offering… client relationships FY12 Product Revenues FY12 Client Revenues (Based on who pays BR as agent) Proxy $327M (20%) Interims Distribution Mutual Fund Corporate $160M (10%) $704M (4
Slide 12: ICS-Bank/Broker-Dealer
ICS-Bank/Broker-Dealer What We Do: Competitive Advantages: Indispensible data hub with established Regulatory communications relationships with majority of BBDs – Beneficial proxy and interims for equities – Beneficial mutual fund compliance Strong market position and innovative communications leade
Slide 13: ICS-Mutual Funds
ICS-Mutual Funds What We Do: Competitive Advantages: Long-standing relationships across Mutual Fund trade processing in the industry defined contribution/trust space — Serve every mutual fund and majority of (Matrix) banks/broker-dealers Data aggregation and analytics Unique data capabilities (Acces
Slide 14: ICS-Issuers
ICS-Issuers What We Do: Competitive Advantages: Beneficial proxy service Market Position – only full service provider of shareholder communications to all types of Registered shareholder communications shareholders – Registered proxy Unmatched Scale – able to leverage one billion plus – Interim comm
Slide 15: Securities Processing Solutions (SPS)
Securities Processing Solutions (SPS) 14
Slide 16: Technology and Operations spend adds ~$14B to our SPS addressable market
Technology and Operations spend adds ~$14B to our SPS addressable market Securities and investment firms’ overall technology and operations spend is over $100 billion and growing at 5% Total addressable market ~ $14B fee revenue US Brokerage Processing Core equities and fixed income Adjacent markets
Slide 17: Broadridge global processing behind the scenes
Broadridge global processing behind the scenes CLIENT EXPERIENCE TECHNOLOGY/OPERATIONS INFRASTRUCTURE Trading Post Trade WEBPORTAL Books & Records Clearing & Regulatory RECORDKEEPING Order Routing Settlement Reporting • Client positions and transactions Trade Fail ACCOUNT • Tax-lot accounting Suppor
Slide 18: Securities Processing North America Market Share Overview
Securities Processing North America Market Share Overview 1 Equity Processing Client Volume FY12 Product Revenues Broadridge ~30% Competitors M ~20% A In-house ~50% R K U.S. $ Fixed Income Client Volume E T Equity (~72%) Fixed Income (~15%) Transactions, $54M Broadridge Transactions, $137M ~55% Non-
Slide 19: SPS Top 15 Clients for FY12
SPS Top 15 Clients for FY12 Top Equity Processing Fixed Income Clients Retail Institutional Processing Outsourcing Alliance Bernstein Bank of America/Merrill Lynch Barclays Capital Services BMO Nesbitt Burns CIBC World Markets Deutsche Bank E*Trade Group Edward Jones Jefferies & Company JP Morgan Ch
Slide 20: SPS-Technology and Operations
SPS-Technology and Operations What We Do: Competitive Advantages: Best-of-breed processing solutions Unique global technology platform – Leading global platform provides processing access to over 50 – Broad asset class coverage countries Broad suite of add-on or point solutions – Desk top applicatio
Slide 21: Financial Strategy
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Slide 22: Our financial strategy is a key part of our value creation strategy
Our financial strategy is a key part of our value creation strategy ~40% dividend payout, but expect no less than 72 cents per share annually subject to Board approval Organic growth with limited financial risk – Avoid significant balance sheet risk – Invest in projects delivering at least 20% IRR T
Slide 23: Appendix
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Slide 24: Revenue Growth Drivers and EBIT Margin
Revenue Growth Drivers and EBIT Margin Historical CAGR 1Q Forecast (FY07-FY12) FY13 FY13 2% Total Revenue Growth 4% 3-4% 3% Closed Sales (Recurring) 3% 4-5% (2%) Client Losses (1%) (1)% 1% Net New Business 2% 3-4% (a) 1% Internal Growth (1%) 0% 2% Acquisitions 1% 0% 4% Total Recurring 2% 3-4% (b) (1
Slide 25: Broadridge FY13 Q1 from Continuing Operations
Broadridge FY13 Q1 from Continuing Operations Revenue Earnings FY12 FY13 FY12 FY13 Q1 Q1 Q1 Q1 ICS $313 $339 Growth % / Margin % $8 $27 12% 8% 2.7% 8.0% SPS $158 $154 Growth % / Margin % $28 $9 12% -3% 17.6% 6.1% Total Segments $471 $493 $36 $37 Margin % 12% 5% 7.7% 7.4% (a) $0 $0 Other ($7) ($7) (b
Slide 26: Broadridge FY13 Guidance from Continuing Operations
Broadridge FY13 Guidance from Continuing Operations Revenue Earnings FY12 FY13 Range FY12 FY13 Range Actual Low High ($ in millions) Actual Low High $1,634 $1,695 $1,707 ICS $243 $291 $299 5% 4% 4% Growth % / Margin % 14.9% 17.2% 17.5% $655 $658 $683 SPS $91 $79 $102 10% 0% 4% Growth % / Margin % 13
Slide 27: Cash Flow – Q1 FY13 Results and FY13 Forecast
Cash Flow –Q1 FY13 Results and FY13 Forecast Free Cash Flow - Non-GAAP Unaudited ($ millions) Three Months Ended FY13 Range (a) September 2012 Low High Free Cash Flow (Non-GAAP) : Net earnings from continuing operations (GAAP) $ 18 $ 205 $ 218 Depreciation and amortization (includes other LT assets)
Slide 28: Revenues and Closed Sales FY07-FY13
Revenues and Closed Sales FY07-FY13 ($ in millions) Forecast Recurring Fee Revenues FY07 FY08 FY09 FY10 FY11 FY12 FY13 ICS $ 529 $ 567 $ 594 $ 632 $ 720 $ 798 $862-874 Growth 3% 7% 5% 6% 14% 11% 8-10% SPS $ 527 $ 534 $ 559 $ 536 $ 594 $ 655 $658-683 Growth 11% 1% 5% -4% 11% 10% 0-4% Total Recurring
Slide 29: Reconciliation of Non-GAAP to GAAP Measures
Reconciliation of Non-GAAP to GAAP Measures Reconciliation of EPS Guidance 1Q12 1Q13 FY12 FY13 Range Actual Actual Actual Low High Guidance Provided in August 2012 - Diluted EPS (Non-GAAP) $0.15 $0.15 $1.55 $1.65 $1.75 Acquisition Amortization and Other Costs $0.03 0.03 $0.12 0.11 0.11 Current Guida
Slide 30: ICS Key Segment Revenue Stats
ICS Key Segment Revenue Stats Fee Revenues 1Q12 1Q13 Type RC= Recurring Proxy Equities $ 23.6 $ 25.6 RC Stock Record Position Growth 1% -4% ED= Event-Driven Pieces 20.4 20.3 In millions Mutual Funds $ 5.2 $ 6.5 ED Pieces 6.4 8.2 Contests/Specials $ 3.3 $ 3.0 ED Pieces 3.7 2.7 Total Proxy $ 32.1 $ 35
Slide 31: SPS and Outsourcing Key Segment Revenue Stats
SPS and Outsourcing Key Segment Revenue Stats 1Q12 1Q13 Type RC= Recurring ED= Event-Driven In millions Equity Transaction-Based Equity Trades (a) $ 36.4 $ 30.0 RC Internal Trade Volume 1,013 821 Internal Trade Growth 20% -19% Trade Volume (Average Trades per Day in '000) 1,020 828 Non-Transaction O
Slide 32: 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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