Paychex, Inc. · NASDAQ:PAYX

Paychex — FY2015 Earnings Presentation

16 slides from Paychex's earnings presentation, Sep 21, 2015

  1. Slide 1: Highlights and Financial Results Fiscal 2015

    Highlights and Financial Results Fiscal 2015 © 2015, PAYCHEX, Inc. All rights reserved.

  2. Slide 2: Forward Looking Statements

    Forward Looking Statements You should be aware that certain written and oral statements made by management may constitute “forward-looking statements” within the meaning of the safe-harbor provisions of the United States Private Securities Litigation Reform Act of 1995. Forward-looking statements ar

  3. Slide 3: Contents

    Contents § Company Overview § Fiscal 2015 Financial Results § Fiscal 2016 Outlook © 2015, PAYCHEX, Inc. All rights reserved. 3

  4. Slide 4: Paychex Overview

    Paychex Overview Paychex is a leading provider of integrated payroll, human resource, insurance, and benefits outsourcing solutions for small to mid-sized businesses § Market capitalization of approximately $17B § Strong financial position with no debt § Approximately 590,000 clients at May 31, 2

  5. Slide 5: Revenue Source

    Revenue Source Small Business Payroll § Small business targets businesses with 1-50 employees HRS Mid-Market Payroll 39% § Mid-market targets businesses with 50-1,000 employees § Growing portfolio of standalone services – expense management; applicant tracking; time and labor Payroll Human Resour

  6. Slide 6: Product Highlights

    Product Highlights 10M #1 Small Business (1-50 EE’s) Payroll 590,000 clients! Employees paid #2 Mid-Market (50-500 EE’s) HR Outsourcing 858,000 Top ASO/PEO for Small 31,000 clients WSEs Business Retirement 70,000 plans > 770,000 #1 Recordkeeper – # Plans participants Insurance 114,000 clients 142,00

  7. Slide 7: Fiscal 2015 Highlights

    Fiscal 2015 Highlights § Results reflected growth and progress against key initiatives § Continued to expand the Paychex Flex platform, an industry-leading solution that streamlines workforce management through innovative technology and flexible choice of service § Released the newest version of

  8. Slide 8: Fiscal 2015 Financial Highlights

    Fiscal 2015 Financial Highlights § Total service revenue up 9% § Operating income, excluding interest on funds held for clients, increased 7%, with operating margin of 38% § Average balances of funds held for clients increased 3% § Combined interest on funds held for clients and investment incom

  9. Slide 9: Fiscal 2015 Financial Results

    Fiscal 2015 Financial Results (In millions, except per share amounts) Three Months Year Ended % Ended % Change Change May 31, 2015 May 31, 2015 Payroll Service Revenue $ 409.0 4% $ 1,656.8 4% Human Resource Services Revenue 272.4 16% 1,040.7 18% Total Service Revenue 681.4 8% 2,697.5 9% Interest on

  10. Slide 10: Strong Earnings History

    Strong Earnings History Net Income (in millions) EPS 700 $2.00 650 $1.75 600 550 $1.50 500 $1.25 450 400 $1.00 FY11 FY12 FY13 FY14 FY15 FY11 FY12 FY13 FY14 FY15 © 2015, PAYCHEX, Inc. All rights reserved.

  11. Slide 11: Accelerating Performance

    Accelerating Performance (in millions) Service Revenue Operating Income 2,800 (Net of Certain Items)** 1,050 2,600 950 2,400 850 2,200 2,000 750 1,800 650 FY11 FY12 FY13 FY14 * FY15 FY11 FY12 FY13 FY14 FY15 *Reflects change to classify certain PEO direct costs as operating expenses rather than a red

  12. Slide 12: Investment Portfolios Results

    Investment Portfolios Results May 31, 2015 May 31, 2014 % Change Average Investment Portfolios (in billions): Funds Held for Clients $4.1 $4.0 3% Corporate Investments $1.0 $1.0 4% Average Rate of Return Earned: Funds Held for Clients 1.0% 1.0% Corporate Investments 0.7% 0.7% Realized Gains, Net (in

  13. Slide 13: Balance Sheet and Cash Flows

    Balance Sheet and Cash Flows May 31, 2015 May 31, 2014 Cash & Investments $936.4 $936.8 Debt $0 $0 Return on Equity 36% 35% For the fiscal year-to-date ended: May 31, 2015 May 31, 2014 Operating Cash Flow $895.2 $880.9 Dividends Paid $551.8 $510.6 Dividend Coverage Ratio* 1.4x 1.5x * Ratio is calcul

  14. Slide 14: Fiscal Year 2016 Outlook

    Fiscal Year 2016 Outlook Payroll Service Revenue 4% – 5% Human Resource Services Revenue (HRS) 10% – 13% Total Service Revenue 7% – 8% Net Income 8% – 9% Operating Income, Net of Certain Items, as a Percent of Approximately 38% Service Revenue © 2015, PAYCHEX, Inc. All rights reserved. 14

  15. Slide 15: Long-Term Capital Strategy

    Long-Term Capital Strategy § Cash deployment § Investment for organic growth § Strategic, accretive acquisitions § Return cash to shareholders through dividends and stock repurchase § Authorization of stock repurchase up to $350 million through May 31, 2017. $182.4 million, for 3.9 million shar

  16. Slide 16: © 2015, PAYCHEX, Inc. All rights reserved.

    © 2015, PAYCHEX, Inc. All rights reserved.

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