Broadridge Financial Solutions, Inc. · NYSE:BR
Broadridge Financial Solutions — Q2 2012 Earnings Presentation
27 slides from Broadridge Financial Solutions's earnings presentation, Feb 7, 2012
Slide 1: Earnings Webcast & Conference Call
Earnings Webcast & Conference Call Second Quarter Fiscal Year 2012 February 7, 2012 © 2012 Broadridge Financial Solutions, Inc. Broadridge and the Broadridge logo are registered trademarks of Broadridge Financial Solutions, Inc. 0
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 Second 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: Opening Remarks Key Topics
Opening Remarks Key Topics: Financial Highlights Closed Sales Performance Acquisitions Update 3
Slide 5: Financial Highlights
Financial Highlights Strong revenue growth Revenues were up 8% for the quarter • Primarily due to net new business (closed sales less client losses), internal growth, acquisitions and the Penson outsourcing services agreement • Event-driven revenues down slightly for the quarter Year-to-date r
Slide 6: Closed Sales Performance
Closed Sales Performance Year-to-date recurring revenue closed sales were $63M vs $52M in the prior year ICS recurring revenue closed sales year-to-date were $34M vs $15M in the prior year SPS recurring revenue closed sales year-to-date were $29M Signed a meaningful business process outsourc
Slide 7: Acquisitions Update
Acquisitions Update Since the spin-off, we have spent over $450M on acquisitions For fiscal year 2012, we expect these acquisitions to generate over $200M in revenue and $40M in EBITDA Based on our current projections, our acquisition portfolio is achieving our required hurdle rate When we c
Slide 8: FY12 Financial Highlights
FY12 Financial Highlights Revenues and earnings before income taxes margins (Non-GAAP) both up for the quarter and YTD Q2 and YTD recurring fee revenues (~50/50 split core/acquisitions) added 9 points of growth. Expect FY fee recurring revenues to add 7 to 8 points Q2 and YTD event-driven 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) Q2: $317M/ 8% $11M/ 308% 3.3%/ 240 bps YTD: $630M/ 10% $19M/ 111% 3.0%/ 140 bps FY12: $1,677 to 1,688M / 7 to 8% $247 to 257M / 16 to 20% 14.7 to 15.2% / 100 to 150 bps Recu
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: $161M / +10% $20M / +5% 12.5% / (70) bps YTD: $319M / +11% $48M / +19% 15.0% / +100 bps FY12: $656 to 672M / +10 to +13% $96 to 112M / +10 to +28% 14.7 to 16.6% / 0 to +190
Slide 11: Summary
Summary Solid operating results 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 year-to-date Penson conversion completed Anticipate IBM conversion will be subst
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 ea Broadridge
Slide 15: Segment Results & Forecast – Other & Foreign Exchange (FX)
Segment Results & Forecast – Other & Foreign Exchange (FX) YTD FY12 Range 2Q12 2Q12 Low High Corporate Expenses $(6)M $(13)M $(30)M $(36)M Interest Expense, net $(4)M $(6)M $(14)M $(14)M IBM Migration costs $(4)M $(7)M $(33)M $(33)M Penson OTTI charge $(10)M $(10)M $(10)M $(10)M FX - P&L - Revenue $
Slide 16: Revenue Growth Drivers
Revenue Growth Drivers Historical CAGR Actual 2Q 2Q YTD Forecast (FY05-FY10) FY11 FY12 FY12 FY12 6% (2)% Total Revenue Growth 8% 11% 8-9% 4% 3% Closed Sales (Recurring) 4% 3% 4-5% (2)% (1)% Client Losses (1)% (1)% (1)% 2% 2% Net New Business 3% 2% 3-4% 3% 1% Internal Growth (a) 1% 2% ~1% 0% 4% Acqui
Slide 17: Broadridge 2Q and YTD from Continuing Operations
Broadridge 2Q and YTD from Continuing Operations Revenue Earnings FY11 FY12 FY11 FY12 FY11 FY12 FY11 FY12 Q2 Q2 YTD Q2 YTD Q2 ($ in millions) Q2 Q2 YTD Q2 YTD Q2 $294 $317 $574 $630 ICS $3 $11 $9 $19 -25% 8% -18% 10% ◄ Growth % / Margin % ► 0.9% 3.3% 1.6% 3.0% $146 $161 $288 $319 SPS $19 $20 $40 $48
Slide 18: Broadridge FY12 Guidance from Continuing Operations
Broadridge FY12 Guidance from Continuing Operations Revenue Earnings FY11 FY12 Range FY11 FY12 Range Actual Low High ($ in millions) Actual Low High $1,559 $1,677 $1,688 ICS $213 $247 $257 -7% 7% 8% ◄ Growth % / Margin % ► 13.7% 14.7% 15.2% $594 $656 $672 SPS $87 $96 $112 11% 10% 13% ◄ Growth % / Ma
Slide 19: Cash Flow – YTD FY12 Results and FY12 Forecast
Cash Flow – YTD FY12 Results and FY12 Forecast Free Cash Flow (Non-GAAP) Unaudited ($ in millions) Six Months Ended FY12 Range (a) December 2011 Low High Free Cash Flow (Non-GAAP) : Net earnings from continuing operations (GAAP) $ 24 $ 165 $ 179 Depreciation and amortization (includes other LT asset
Slide 20: Closed Sales to Revenue Contribution
Closed Sales to Revenue Contribution Recurring Fee Closed Sales to Revenue ($ in millions) Closed Sales Revenue Contribution (a) Forecast Forecast Backlog (b) FY12 FY12 ICS $65-85 ~$45-65 ~$40-50 ~Contrib ution to revenue growth 3-4% SPS $45-65 ~$30-35 ~$80-100 ~Contrib ution to revenue growth 6% To
Slide 21: Revenues and Closed Sales FY05-FY12
Revenues and Closed Sales FY05-FY12 ($ 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 $706-715 9-10% Growth 16% 1% 8% 4% 5% 7% SPS $ 459 $ 458 $ 509 $ 515 $ 537 $ 513 2% $ 522 $54
Slide 22: Reconciliation of Non-GAAP to GAAP Measures
Reconciliation of Non-GAAP to GAAP Measures EBIT Reconciliation 2Q11 2Q12 YTD11 YTD12 FY11 FY12 Range ($ in millions) Actual Actual Actual Actual Actual Low High EBIT from continuing operations (Non-GAAP / excluding IBM Migration costs and Penson OTTI charge) $19 $28 $42 $59 $285 $319 $341 Margin %
Slide 23: One-time Items (For Informational Purposes Only)
One-time Items (For Informational Purposes Only) One-Time Restructuring and Acquisition Related Costs (a) 2Q11 2Q12 YTD11 YTD12 FY11 FY12 Range Actual Actual Actual Actual Actual Low High Deal Costs (b) - ($1) ($1) ($2) ($2) ($2) ($2) Amortization of Intangibles ($6) ($2) ($11) ($4) ($15) ($23) ($23
Slide 24: ICS Key Segment Revenue Stats
ICS Key Segment Revenue Stats RC= Recurring Fee Revenues 2Q11 2Q12 YTD FY11 YTD FY12 Type ED= Event-Driven $ in millions Proxy Equities $ 24.6 $ 24.8 $ 50.1 $ 48.4 RC Stock Record Position Growth -2% -1% -1% 0% Pieces 21.0 21.2 44.0 41.6 2.50 Mutual Funds $ 11.1 $ 8.6 $ 17.3 $ 13.8 ED Pieces 16.1 16
Slide 25: SPS and Outsourcing Key Segment Revenue Stats
SPS and Outsourcing Key Segment Revenue Stats 2Q11 2Q12 YTD FY11 YTD FY12 Type RC= Recurring ED= Event-Driven $ in millions Equity Transaction-Based Equity Trades (a) $ 59.1 $ 56.2 $ 114.2 $ 116.1 RC Internal Trade Volume (b ) 1,474 1,456 1,445 1,522 Internal Trade Growth -1% -1% -2% 5% Trade Volume
Slide 26: 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
Slide 27: Use of Material Contained Herein
Use of Material Contained Herein The information contained in this presentation is being provided for your convenience and information only. This information is accurate as of the date of its initial presentation. If you plan to use this information for any purpose, verification of its continued acc
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