Broadridge Financial Solutions, Inc. · NYSE:BR
Broadridge Financial Solutions — Q2 2011 Earnings Presentation
31 slides from Broadridge Financial Solutions's earnings presentation, Feb 8, 2011
Slide 1: Earnings Webcast & Conference Call
Exhibit 99.2 Broadridge Financial Solutions, Inc. Earnings Webcast & Conference Call Second Quarter Fiscal Year 2011 © 2011 Broadridge Financial Solutions, Inc. Broadridge and the Broadridge logo are registered trademarks of Broadridge Financial Solutions, Inc. February 8, 2011
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 Key Topics Rich Daly, CEO First Half Fiscal Year 2011 Dan Sheldon, CFO Results and Full Year Guidance Summary and Closing Comments Rich Daly, CEO Q&A Rich Daly, CEO Dan Sheldon, CFO Rick Rodick, VP Investor Relations Closing Remarks Rich Daly, CEO 2
Slide 4: Opening Remarks Key Topics
Opening Remarks Key Topics: Year-to-Date Financial Highlights Business Update Highlights Closed Sales Performance Recurring Fee Revenues and Closed Sales Event-Driven Fee and Distribution Revenues Matrix acquisition 3
Slide 5: Year-to-Date Financial Highlights
Year-to-Date Financial Highlights Revenues were down significantly from last year Anticipated that event-driven revenues would be down, but they were lower than expected • Event-driven fee revenues were down 51% for the first six months of fiscal year 2011 as compared with same period last year, the
Slide 6: Business Update Highlights
Business Update Highlights Signed the largest Securities Processing Solutions (SPS) client contract in our history Acquired Matrix post quarter end The leading independent provider of mutual fund processing solutions for the defined contribution market Acquired Forefield A leading provider of real-t
Slide 7: Closed Sales Performance
Closed Sales Performance Closed sales for the quarter were $48M vs $58M compared to the same period last year Year-to-date closed sales of $72M vs $88M compared to the same period last year Strong recurring revenue closed sales SPS sales of $26M (includes the large $22M deal) for the quarter vs $3M
Slide 8: Recurring Fee Revenues and Closed Sales FY05-FY11
Recurring Fee Revenues and Closed Sales FY05-FY11 $ in millions $ in millions Total Recurring Fee Revenues $150 Recurring Closed Sales $1,500 +25% +16% +1% $1,284 $125 +5% +30% $119 $110-150 to $1,301 (32)% +5% +19% Recurring $1,250 +7% Growth Closed Sales +9% $1,133 Acquisitions Rate Growth $1,117
Slide 9: Event-Driven Fee and Distribution Revenues FY05-FY11
Event-Driven Fee and Distribution Revenues FY05-FY11 $ in millions Total Event-Driven Fee Revenues $300 $292 $1,000 $ in millions Total Distribution Revenues $250 $241 $821 $808 $237 $781 $216 $757 $750 $730 Distribution ~$700 $200 $242 $242 Revenues $186 $649 $201 $227 $178 Relatedto: $175 ~ $160 C
Slide 10: Matrix
Matrix Matrix Processing Model TPA Client #1 Matrix Has Long-Term TPA Client #2 Contractual Relationships with Mutual Fund (MF) Families TPA Client #3 and >130 TPA Clients with $30B Provides Connectivity In Assets Under Admin. (AUA) to >800 ETFs (Exchange Traded Funds) Matrix Provides Mutual Fund Ma
Slide 11: Matrix Value Proposition
Matrix Value Proposition Provides Broadridge with an entry into the attractive post-trade mutual fund processing market Post-trade processing is a large and growing market ($600M in 2010 and expected to grow to $1B in 2015) Matrix is competitively well positioned with attractive stand-alone economic
Slide 12: 1st Half Results and 2nd Half Guidance Addressing Key Initiatives
1st Half Results and 2 nd Half Guidance Addressing Key Initiatives (see next page for Revenue/EPS reconciliation year/year) 1st half historically represents ~40% of total year revenues and ~30% of total year EBIT due to seasonality of Issuer Equity Proxy activity 1st half EPS down $0.38 primarily du
Slide 13: FY11 Financial Guidance
FY11 Financial Guidance 1st Half FY11 2nd Half FY11 FY11 FY12 FY13 $ in millions, except EPS Actual Mid-Point Guidance Mid-Point Guidance Key Initiatives (A) Key Initiatives (A) Revenues EPS Revenues EPS Revenues EPS Revenues EPS Revenues EPS FY10 (GAAP) $ 968 $ 0.56 $ 1,241 $ 1.06 $ 2,209 $ 1.62 Co
Slide 14: FY11 Continuing Operations Financial Guidance Summary
Broadridge - FY11 Continuing Operations Financial Guidance Summary Revenue growth in the range of (2)-(1)% Closed sales forecast for the year at $140-190M (Recurring $110-150M) Non-GAAP Earnings before interest and taxes margin of 12.7-13.4% Diluted Earnings Per Share: GAAP EPS (continuing operation
Slide 15: Summary
Summary Disappointing results for the quarter and year-to-date Primarily due to the unprecedented low level of event-driven revenues Our confidence to create shareholder value going forward remains in place because of: 1) Improved growth in recurring fee revenues 2) Our excellent client revenue rete
Slide 16: Q&A
Q&A There are no slides during this portion of the presentation 15
Slide 17: Closing Comments
Closing Comments There are no slides during this portion of the presentation 16
Slide 18: Appendix
Ce ee Appendix Appendix 7 Ba Broadridge
Slide 19: Segment Results & Forecast – Investor Communication Solutions
Segment Results & Forecast – Investor Communication Solutions Revenue/Growth EBIT/Growth (Non-GAAP) Margin/Growth (Non-GAAP) Q2: $294M/ (25)% $3M/ (95)% 0.9%/ (1,200) bps YTD: $574M/ (18)% $9M/ (88)% 1.6%/ (900) bps FY11: $1,567 to 1,578M / (6)% $216 to 226M / (21) to (17)% 13.8 to 14.3% / (250) to
Slide 20: Segment Results & Forecast – Securities Processing Solutions
Segment Results & Forecast – Securities Processing Solutions Revenue/Growth EBIT/Growth (Non-GAAP) Margin/Growth (Non-GAAP) Q2 : $146M / +9% $19M / (18)% 13.2% / (430) bps YTD: $288M / +9% $40M / (18)% 14.0% / (460) bps FY11: $589 to 599M / +10 to 12% $80 to 88M / (19) to (11)% 13.5 to 14.6% / (500)
Slide 21: Segment Results & Forecast – Other & Foreign Exchange (FX)
Segment Results & Forecast – Other & Foreign Exchange (FX) FY11 Range 2Q11 2Q11 YTD Low High Other Fees Revenue $(0)M $(0)M $1M $1M Other Fees Margin $(0)M $(0)M $1M $1M Interest Expense $(2)M $(4)M $(10)M $(10)M Corp. Expenses & Investments $(5)M $(11)M $(29)M $(31)M FX - P&L - Revenue $2M $2M $8M
Slide 22: Broadridge 2Q and YTD from Continuing Operations
Broadridge 2Q and YTD from Continuing Operations Revenue ($ in millions) Earnings Revenue ($ in millions) Earnings FY10 FY11 FY10 FY11 FY10 FY11 FY10 FY11 Q2 Q2 Q2 Q2 Q2 YTD Q2 YTD Q2 YTD Q2 YTD $393 $294 ICS $51 $3 $703 $574 ICS $74 $9 33% -25% Growth % / Margin % 12.9% 0.9% 15% -18% Growth % / Mar
Slide 23: Broadridge FY11 Guidance from Continuing Operations
Broadridge FY11 Guidance from Continuing Operations Revenue ($ in millions) Earnings FY10 FY11 Range FY10 FY11 Range Actual Low High Actual Low High $1,670 $1,567 $1,578 ICS $273 $216 $226 9% -6% -6% Growth % / Margin % 16.3% 13.8% 14.3% $536 $589 $599 SPS $99 $80 $88 -4% 10% 12% Growth % / Margin %
Slide 24: Cash Flow – 2Q11 Results and FY11 Forecast
Cash Flow – 2Q11 Results and FY11 Forecast Unaudited (In millions) Six Months Ended FY11 Range (a) December 2010 Low High Free Cash Flow (Non-GAAP) : Net earnings from continuing operations (GAAP) $ 24 $ 166 $ 179 Depreciation and amortization (includes other LT assets) 32 65 75 Stock-based compensa
Slide 25: Closed Sales to Revenue Contribution
Closed Sales to Revenue Contribution ($ in millions) Forecast Recurring FY09 FY10 FY11 ICS $55 $80 $35-50 ~ Revenue ContributionYear 1-3 55% 35% 10% 50% 40% 10% 35% 35% 35% SPS $40 $40 $75-100 ~ Revenue ContributionYear 1-3 25% 50% 25% 10% 50% 40% 10% 30% 60% Event-Driven $45 $55 $30-40 ~ Revenue Co
Slide 26: Revenues and Closed Sales Charts FY05-FY11
Revenues and Closed Sales Charts FY05-FY11 ($ in millions) FY05-10 Forecast Recurring Fee Revenues FY05 FY06 FY07 FY08 FY09 FY10 CAGR FY11 ICS $ 414 $ 480 $ 481 $ 521 $ 547 $ 575 7% $608-615 Growth 16% 0% 8% 5% 5% SPS $ 459 $ 458 $ 509 $ 515 $ 537 $ 513 2% $512-522 Growth 0% 11% 1% 4% -4% Segment Re
Slide 27: Reconciliation of Non-GAAP to GAAP Measures
Reconciliation of Non-GAAP to GAAP Measures EBIT Reconciliation 2Q10 2Q11 YTD10 YTD11 FY10 FY11 Range (a) ($ in millions) Actual Actual Actual Actual Actual Low High EBIT (Non-GAAP)* $71 $19 $116 $42 $352 $274 $293 Margin % 13.4% 4.2% 12.0% 4.8% 15.9% 12.7% 13.4% Interest & Other ($3) ($2) ($5) ($4)
Slide 28: ICS Key Segment Revenue Stats
ICS Key Segment Revenue Stats $ in millions Fee Revenues 2Q10 2Q11 FY10 YTD FY11 YTD Type RC= Recurring ED= Event-Driven Proxy Equities $ 25.5 $ 24.6 $ 53.1 $ 50.1 RC Stock Record Position Growth -5% -2% -5% -1% Pieces 26.2 21.0 55.0 44.0 (0.833) Mutual Funds $ 78.0 $ 11.1 $ 98.8 $ 17.3 ED Pieces 10
Slide 29: SPS and Outsourcing Key Segment Revenue Stats
SPS and Outsourcing Key Segment Revenue Stats $ in millions 2Q10 2Q11 YTD10 YTD11 Type RC= Recurring ED= Event-Driven Equity Transaction-Based Equity Trades $ 60.0 $ 59.1 $ 118.9 $ 114.2 RC Internal Trade Volume (1) 1,491 1,481 1,480 1,452 Internal Trade Growth -9% -1% -5% -2% Trade Volume (Average
Slide 30: 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 31: 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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