Broadridge Financial Solutions, Inc. · NYSE:BR
Broadridge Financial Solutions — Q4 2023 Earnings Presentation
38 slides from Broadridge Financial Solutions's earnings presentation, Aug 8, 2023
Slide 1: Scaling a Global Fintech Leader
Scaling a Global Fintech Leader EARNINGS CONFERENCE CALL Fiscal Fourth Quarter and Full-Year 2023 | © 2023 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 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, KPIs and Foreign exchange rates
Use of Non-GAAP financial measures, KPIs and Foreign exchange rates Use of Non-GAAP Financial Measures This presentation includes certain Non-GAAP financial measures including Adjusted Operating income, Adjusted Operating income margin, Adjusted Net earnings, Adjusted earnings per share (“EPS”), Fre
Slide 4: Key messages
Key messages Broadridge reported strong fourth quarter results, including 8% Recurring 1 revenue growth constant currency and 21% Adjusted EPS growth These results powered a strong Fiscal Year 2023, with 9% Recurring revenue 2 growth constant currency, 9% Adjusted EPS growth, and 90% free cash flow
Slide 5: Broadridge delivered at or above the higher end of its 3-year objectives
Broadridge delivered at or above the higher end of its 3-year objectives INVESTOR DAY FY20-FY23 FY20-FY23 GROWTH OBJECTIVES PERFORMANCE Organic Recurring revenue growth 5 – 7% 8% Recurring revenue growth 1 7 – 9% 11% Adjusted Operating income margin – Non-GAAP 50+ bps/yr 77 bps Adjusted earnings per
Slide 6: We are extending our Governance franchise…
We are extending our Governance franchise… 9% $2.5B HIGHLIGHTS Y-O-Y FY’23 RECURRING 1 Revenue growth paced by strong GROWTH REVENUE demand for digital solutions and new clients 9% Avg. Annual $2.5B 2 Equity and fund/ETF position growth normalized at 9% and 8%, respectively Growth after two strong y
Slide 7: …growing our Capital Markets franchise…
…growing our Capital Markets franchise… 11% $965M HIGHLIGHTS Y-O-Y FY’23 RECURRING 1 Continued strong growth from BTCS GROWTH REVENUE highlights demands for trading innovation and simplification $965M 14% Avg. Annual 2 Extending global post-trade implementations across multiple large clients Growth
Slide 8: …and building our Wealth & Investment Management franchise
…and building our Wealth & Investment Management franchise 4% $560M HIGHLIGHTS Y-O-Y FY’23 RECURRING 1 Growth driven by strong demand for Growth REVENUE advisor tools, including digital marketing capabilities, and other $560M component solutions 10% Avg Annual 2 Finalized rollout of wealth managemen
Slide 9: Broadridge continues to build on its track-record of long-term, sustainable growth
Broadridge continues to build on its track-record of long- term, sustainable growth Broadridge recorded another strong year in Fiscal 2023, delivering strong 1 financial results and achieving key financial and operational milestones Our growth continues to be propelled by long-term trends, including
Slide 10: Summary financial performance
Summary financial performance $ in millions, except per share data Q4’23 Inc./(Dec.) FY’23 Inc./(Dec.) Recurring revenues $1,259 7% $3,987 7% Constant currency growth (Non-GAAP) 8% 9% Total revenues 1,839 7% 6,061 6% Operating income 454 33% 936 23% Adjusted Operating income (Non-GAAP) 531 22% 1,199
Slide 11: Recurring revenue increased 8% in fourth quarter 2023
Recurring revenue increased 8% in fourth quarter 2023 $ in millions; growth in constant currency FISCAL YEAR RECURRING REVENUE GROWTH Q4 RECURRING REVENUE 16% +8% $1,259 10% 10% 9% FY'20 FY'21 FY'22 FY'23 Q4'22 Q4'23 Information about our use of Non-GAAP measures and reconciliations to GAAP measures
Slide 12: ICS fourth quarter and fiscal year 2023 Recurring revenues
ICS fourth quarter and fiscal year 2023 Recurring revenues $ in millions; growth in constant currency ICS Q4 RECURRING REVENUES ICS FISCAL YEAR RECURRING REVENUES +7% +9% $858 $2,461 $1,141 7% Regulatory $444 5% $404 12% Data-Driven $113 12% Fund Solutions $243 13% Issuer $134 7% Customer $673 10% C
Slide 13: GTO fourth quarter and fiscal year 2023 Recurring revenues
GTO fourth quarter and fiscal year 2023 Recurring revenues $ in millions; growth in constant currency GTO Q4 RECURRING REVENUES GTO FISCAL YEAR RECURRING REVENUES +9% +8% $1,525 $401 Capital $965 11% $257 12% Markets Wealth & Investment $143 4% $560 4% Management Q4'22 Q4'23 FY'22 FY'23 Information
Slide 14: Key volume drivers: position and trade growth
Key volume drivers: position and trade growth EQUITY & MUTUAL FUND/ETF POSITION GROWTH FY’22 FY’23 10Y Avg. 18% 9% 11% 14% 8% 8% ITG 3 1% 4% 6% 17% 10% 11% 10% 9% 8% 9% 6% 6% 6% Q4'22 Q1'23 Q2'23 Q3'23 Q4'23 INTERNAL TRADE 8% 6% 5% 1% 3% GROWTH 1. Q4’22 equity position growth represented 55% of tota
Slide 15: Fourth quarter 2023 Recurring revenue growth drivers
Fourth quarter 2023 Recurring revenue growth drivers $ in millions. Pts contribution to growth RECURRING REVENUE GROWTH CONSTANT CURRENCY WAS 8% Organic Growth: 8 pts 4 pts 8% 7% 5 pts 0 pts (1) pt (1) pt $1,177 $1,259 Q4'22 Recurring Closed Sales Client Losses Internal Growth Acquisitions Q4'23 Rec
Slide 16: Fourth quarter 2023 Total revenue growth drivers
Fourth quarter 2023 Total revenue growth drivers $ in millions. Pts contribution to growth FOURTH QUARTER 2023 TOTAL REVENUE GROWTH DRIVERS 5 pts 3 pts 7% (1) pt 0 pts $1,839 $1,723 Q4'22 Total Revenue Recurring Event-Driven Distribution FX Q4'23 Total Revenue QUARTERLY EVENT-DRIVEN REVENUE $70 $63
Slide 17: Operating income margin and Adjusted Operating income margin
Operating income margin and Adjusted Operating income margin OPERATING INCOME MARGIN OPERATING 13.8% 13.6% 13.3% 15.4% 19.8% 24.7% INCOME MARGIN 28.9% 19.8% 25.3% 18.7% ADJUSTED 18.1% OPERATING 17.5% INCOME MARGIN (NON- GAAP) +40 +60 +60 +110 bps bps bps bps FY'20 FY'21 FY'22 FY'23 Q4'22 Q4'23 | © 2
Slide 18: Closed sales
Closed sales $ in millions CLOSED SALES RECURRING REVENUE BACKLOG $280 $430 $400 $246 $224 $231 FY'20 FY'21 FY'22 FY'23 FY'22 FY'23 % OF RECURRING 12% 10% REVENUE | © 2023 17
Slide 19: Client platform spend and Free cash flow conversion
Client platform spend and Free cash flow conversion $ in millions NET CLIENT PLATFORM SPEND1 FREE CASH FLOW CONVERSION (LTM)2,3 90% $163 63% $97 $78 $74 51% $54 48% 41% Q4'22 Q1'23 Q2'23 Q3'23 Q4'23 Q4'22 Q1'23 Q2'23 Q3'23 Q4'23 1. Net investments on new client conversions, including development of
Slide 20: Capital allocation
Capital allocation $ in millions, except per share data SELECT USES OF CASH FY’23 TOTAL CAPITAL RETURNS 4 CapEx and Software 1 $75 Client Platform $578 $312 Investments 2 $369 $269 $248 $253 M&A3 $0 Debt Paydown $385 FY'20 FY'21 FY'22 FY'23 FY'24 (E) 6 DIVIDENDS PER SHARE $2.16 $2.30 $2.56 $2.90 $3.
Slide 21: Fiscal Year 2024 Guidance
Fiscal Year 2024 Guidance 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 | © 2023 20
Slide 22: 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 | © 2023 21
Slide 23: Appendix
Appendix aoc & Ve Broadridge’
Slide 24: Supplemental Reporting Detail ‒ Product Line Reporting
Supplemental Reporting Detail ‒ Product Line Reporting (Unaudited) 2021 2022 2023 YoY % Dollars in millions FY Q1 Q2 Q3 Q4 FY Q1 Q2 Q3 Q4 FY Growth Investor Communication Solutions ("ICS") Regulatory Solutions $938 $165 $166 $ 321 $ 423 $1,075 $171 $181 $346 $ 444 $1,141 6% Data-Driven Fund Solution
Slide 25: Fiscal year 2023 Recurring revenue growth drivers
Fiscal year 2023 Recurring revenue growth drivers $ in millions. Pts contribution to growth RECURRING REVENUE GROWTH CONSTANT CURRENCY WAS 9% Organic Growth: 9 pts 4 pts 0 pts 9% 6 pts 7% (1) pt (2) pts $3,987 $3,723 FY'22 Recurring Closed Sales Client Losses Internal Growth Acquisitions FY'23 Recur
Slide 26: Fiscal year 2023 Total revenue drivers
Fiscal year 2023 Total revenue drivers $ in millions Pts contribution to growth FISCAL YEAR 2023 REVENUE DRIVERS 6 pts 3 pts 6% (1) pt (1) pt $5,709 $6,061 FY'22 Total Recurring Event-Driven Distribution FX FY'23 Total Revenue Revenue | © 2023 25
Slide 27: Fiscal year 2023 Event-driven revenue
Fiscal year 2023 Event-driven revenue $ in millions FISCAL YEAR 2023 EVENT-DRIVEN REVENUE $284 $269 $244 $235 $234M $219 FY’17-FY’23 $211 AVERAGE $176 FY'17 FY'18 FY'19 FY'20 FY'21 FY'22 FY'23 | © 2023 26
Slide 28: 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 | © 2023 27
Slide 29: 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 30: Non-GAAP Measures
Non-GAAP Measures We exclude Acquisition and Integration Costs, IBM Private Cloud Charges, Real Estate Realignment and Covid-19 Related Expenses, Investment Gains, Russia- Related Exit Costs, the Software Charge, Loss (Gain) on Acquisition-Related Financial Instrument, and Restructuring Charges from
Slide 31: Reconciliation of GAAP to Non-GAAP Measures
Reconciliation of GAAP to Non-GAAP Measures (Unaudited) Three Months Ended June 30, 2023 Data-Driven Customer Investor Communication Solutions Regulatory Issuer Total Fund Solutions Comms. Recurring revenue growth (GAAP) 5% 11% 7% 7% 7% Impact of foreign currency exchange —% —% —% —% —% Recurring re
Slide 32: Reconciliation of GAAP to Non-GAAP Measures
Reconciliation of GAAP to Non-GAAP Measures (Unaudited) Fiscal Year Ended June 30, 2023 Data-Driven Customer Investor Communication Solutions Regulatory Issuer Total Fund Solutions Comms. Recurring revenue growth (GAAP) 6% 11% 12% 9% 8% Impact of foreign currency exchange —% 1% —% —% —% Recurring re
Slide 33: 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 34: 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, except per share amounts 2023 2022 2023 2022 2021 Diluted Earnings per share (GAAP) $2.72 $2.09 $5.30 $4.55 $4.65 Adjustments: Amortization of Acq. Intangibles and Purchased
Slide 35: Reconciliation of GAAP to Non-GAAP Measures
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 36: Reconciliation of GAAP to Non-GAAP Measures: Fiscal Year 2024 Guidance
Reconciliation of GAAP to Non-GAAP Measures: Fiscal Year 2024 Guidance (Unaudited) 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
Slide 37: Reconciliation of GAAP to Non-GAAP Measures
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
Slide 38: Broadridge Fourth Quarter and Fiscal Year 2023 Earnings Conference Call
Broadridge Fourth Quarter and Fiscal Year 2023 Earnings Conference Call Contacts Replay Options W. Edings Thibault Online replay available at Greg Faje broadridge-ir.com Sean Silva broadridgeir@broadridge.com Telephone replay available through August 15, 2023 Live Call Information Domestic Date: Aug
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