Automatic Data Processing, Inc. · NASDAQ:ADP

Automatic Data Processing — Q4 2018 Earnings Presentation

16 slides from Automatic Data Processing's earnings presentation, Aug 1, 2018

  1. Slide 1: 4Q Fiscal 2018 ADP Earnings Call & Webcast

    4Q Fiscal 2018 ADP Earnings Call & Webcast August 1, 2018 Copyright © 2018 ADP, LLC.

  2. Slide 2: Forward Looking Statements

    Forward Looking Statements This presentation and other written or oral statements made from time to time by ADP may contain “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. Statements that are not historical in nature and which may be identifie

  3. Slide 3: CEO's Perspective

    CEO’s Perspective • Building momentum in 2018 – revenue and new business bookings growth of 8%; adjusted diluted EPS growth of 18% • Strategic investments in Global Cash Card, WorkMarket, and Celergo to accelerate presence in key growth markets • Adjusted EBIT margin up 10 basis points to 19.8%, ref

  4. Slide 4: Fiscal 2018 Financial Highlights

    Fiscal 2018 Financial Highlights Adjusted Earnings before Interest Adjusted Diluted EPS Total Revenues (unaudited) and Taxes (EBIT) (unaudited) (a) (b) (unaudited) (a) $13.3B $2.6B $4.35 $12.4B 8% Reported $2.4B 8% $3.70 18% 6% Organic (c) (a) “Adjusted Earnings before Interest and Taxes (EBIT)” and

  5. Slide 5: Fiscal 2018 New Business Bookings and Segment Results

    Fiscal 2018 New Business Bookings and Segment Results Worldwide New Employer Services PEO Services Business Bookings • $1.8 billion, h 8% compared • Revenues h 5% Reported • Revenues h 12% with FY17 representing h 4% Organic (a) • Average worksite employees paid annualized recurring revenues • Clien

  6. Slide 6: Fiscal 2019 Outlook

    Fiscal 2019 Outlook as compared to fiscal 2018 pro-forma financials (a) Revenues % Margin Expansion Adjusted Diluted EPS (c) h 5% - 7% Reported (b) Adjusted EBIT Margin (c) up 100 to 125 h 13% - 15%, as compared to $4.53 in basis points fiscal 2018, pro-forma (a)  ES Revenues h 4% - 6% (b)  ES Mar

  7. Slide 7: Appendix

    Appendix 7 Copyright © 2018 ADP, LLC.

  8. Slide 8: Client Funds Portfolio Extended Investment Strategy

    Client Funds Portfolio Extended Investment Strategy • Average Client Funds Balances h 3% - 4% from FY19 Forecast $24.3 billion in FY18 Average Client Funds Average Yield • Yield on the Client Funds Portfolio h ~30bps Balance ($) Interest ($) compared to 1.9% in FY18 Client Short 4.2 – 4.3B ~1.9% ~80

  9. Slide 9: GAAP Reconciliations

    GAAP Reconciliations In addition to our GAAP results, we use the adjusted results and other non-GAAP metrics set forth in the table below to evaluate our operating performance in the absence of certain items and for planning and forecasting of future periods: Adjusted Financial Measure U.S. GAAP Mea

  10. Slide 10: GAAP Reconciliations

    GAAP Reconciliations ($ in millions, except per share data) % Change FY18 FY17 As Reported Constant Currency Net earnings $1,620.8 $1,733.4 (6)% (8)% Provision for income taxes 550.3 797.7 All other interest expense (a) 59.4 59.3 All other interest income (a) (25.5) (22.4) Gain on sale of business -

  11. Slide 11: Fiscal 2019 Outlook – Pro-forma GAAP Reconciliations

    Fiscal 2019 Outlook – Pro-forma GAAP Reconciliations ($ in millions) Fiscal 2018 Fiscal 2019 Pro-forma (a) Forecast Earnings before income taxes / margin (pro-forma GAAP) $2,282.6 17.1% ~420 – 455bps All other interest expense (b) 59.4 +45bps (5)bps All other interest income (b) (25.5) (20)bps +5bps

  12. Slide 12: Fiscal 2019 Outlook – Pro-forma GAAP Reconciliations

    Fiscal 2019 Outlook – Pro-forma GAAP Reconciliations Fiscal 2018 Fiscal 2019 Pro-forma (a) Forecast Diluted EPS (pro-forma GAAP) $4.28 19% - 21% Proxy contest matters – F18 (b) 0.05 ~ (1%) Transformation initiatives – F18 (c) 0.89 ~ (21%) Tax Cuts and Jobs Act – F18 (d) (0.70) ~ 16% Transformation i

  13. Slide 13: ADP Fiscal 2019 Guidance History

    ADP Fiscal 2019 Guidance History (a) Aug 1, 2018 Forecast Total ADP Estimated ASC 606 impact, as provided on June 12, 2018 Revenues h 5% - 7% FY18 FY19 (b) (b) Adj. EBIT Margin h 100 - 125 bps Adj. EBIT Margin , ASC 605 19.8% ** (b) Adj. Effective Tax Rate  Decline to 25.1% + Impact from Change h 5

  14. Slide 14: Bridge to Pro-Forma Financials – Segment

    Bridge to Pro-Forma Financials – Segment ($ in millions, except New Business Bookings) (a) Other adjustments include the inclusion of client fund interest in our segments at actual interest rates, the inclusion of ADP Indemnity in the PEO segment, and changes to certain corporate allocations. 14 Cop

  15. Slide 15: Bridge to Pro-Forma Financials – Consolidated

    Bridge to Pro-Forma Financials – Consolidated ($ in millions, except per share data) (a) ASU 2017-07 (Compensation - Retirement Benefits (Topic 715): Improving the Presentation of Net Periodic Pension Cost and Net Periodic Post-retirement Benefit Cost) has no impact on earnings, margin, or EPS. (b)

  16. Slide 16: Pro-Forma GAAP Reconciliations

    Pro-Forma GAAP Reconciliations ($ in millions, except per share data) 1Q FY18 2Q FY18 3Q FY18 4Q FY18 FY18 Pro-Forma Net earnings $412.5 $681.5 $662.6 $141.3 $1,897.9 Provision for income taxes 152.3 (94.0) 212.5 113.6 384.7 All other interest expense (a) 15.0 15.0 14.8 14.6 59.4 All other interest

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