Broadridge Financial Solutions, Inc. · NYSE:BR
Broadridge Financial Solutions — Investor Presentation (September 2017)
29 slides from Broadridge Financial Solutions's investor presentation, Sep 15, 2017
Slide 1: Investor Presentation First Quarter Fiscal 2018
Investor Presentation First Quarter Fiscal 2018 EXHIBIT 99.1 Broadridge Investor Relations W. Edings Thibault Head of Investor Relations Tel: 516-472-5129 Email: edings.thibault@broadridge.com
Slide 2: Forward-Looking Statements
1 © 2017 | 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") may contain “forward-looking statements” within the meaning of the Private Securities Litigat
Slide 3: Use of Non-GAAP Financial Measures
2 © 2017 | Use of Non-GAAP Financial 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. GAAP except where otherwise noted. In certain circumstances, results have been presented t
Slide 4: What is Broadridge?
3 © 2017 | What is Broadridge? Unique Franchises with Ubiquitous Presence Growing and Predictable Revenues • 12% Revenue CAGR since FY2012 with 98% client revenue retention rate Strong Free Cash Flow • FY2017 CapEx:Revenue ratio of 2.7% Balanced Capital Allocation • 45% dividend payout ratio target
Slide 5: Broadridge's Unique Franchise in Financial Services
4 © 2017 | Broadridge’s Unique Franchise in Financial Services 98% client revenue retention rate 50+ years of financial services experience of the top-101 global banks are our clients 10 #1 leading provider of U.S. beneficial proxy and prospectus, U.S. fixed income & Canadian equity processing Billi
Slide 6: Strong and Predictable Business Model
5 © 2017 | Strong and Predictable Business Model 98% client revenue retention rate Consistently high retention rate reflects the strength of our client relationships Long-term contracts Expanding portfolio of growth products Growth products contributing a growing % of revenue NACC acquisition should
Slide 7: Broadridge Brings Technology Solutions to its Core Client Segments
6 © 2017 | Broadridge Brings Technology Solutions to its Core Client Segments Capital Markets Wealth Management Asset Management Corporates Communications Processing Data & Analytics • 1,100 Banks & Broker-dealers • 6,700 Institutional Investors • 140,000,000 Individual Accounts • 100,000 Financial
Slide 8: $24B Market Propelled By Key Market Trends
7 © 2017 | $24B Market Propelled By Key Market Trends Current Addressable Market Key Market Trends $16B $8B Global Technology & Operations Investor Communication Solutions Mutualization Strong drive to standardize duplicative, non-differentiating industry capabilities Digitization Digital technologi
Slide 9: Fiscal Year 2017 Total Revenues of $4.1 Billion
8 © 2017 | Fiscal Year 2017 Total Revenues of $4.1 Billion FY 2017 Revenues by Type Recurring Fee Revenue Growth FY2012-FY2017 $1.6 37% $2.5 58% $0.2 5% Distribution Recurring Fees Event-Driven FY 2017 Revenues by Segment $3.4 81% $0.8 19% ICS GTO $ in billions 1. Financial metrics in billions and s
Slide 10: ICS Revenue Breakdown and Growth Trends
9 © 2017 | ICS Revenue Breakdown and Growth Trends FY 2017 ICS Revenues of $3,421 million1 Broad Client Base $1,554 46% $305 9% $764 22% $198 6% $382 11% $219 6% B A N K S B R O K E R - D E A L E R S M U T U A L F U N D S C O R P O R AT E I S S U E R S Distribution Other ICS Customer Comm. & Fulfill
Slide 11: GTO Revenue Breakdown and Growth Trends
10 © 2017 | GTO Revenue Breakdown and Growth Trends By Product1 Strong Market Position Clears and settles in over 80 countries Processes avg. of over $5 trillion in equity and fixed income trades per day in US and Canadian securities 18 of the 23 primary fixed income dealers in the US are our client
Slide 12: Executing Our Capital Stewardship Strategy To Enhance Shareholder Value
11 © 2017 | Executing Our Capital Stewardship Strategy To Enhance Shareholder Value Committed to a strong dividend Targeting tuck-in acquisitions to drive growth Share repurchases Maintain investment grade credit rating Fiscal Years 2013 – 2017: Select Uses of Cash (a) Purchases of Treasury stock, n
Slide 13: Achieved Three Year Financial Objectives
12 © 2017 | FY15–FY17 FY15–FY171 Recurring Fee Revenue Growth 7-10% 14% Total Revenue Growth 5-7% 17% Adjusted Operating Income Margin +50-60bps/yr. 15%2 Adjusted Earnings Growth 9-11% 11% Achieved Three Year Financial Objectives 3-Year Objectives 1As of FY17 ended 6/30/17 - includes impact of acqui
Slide 14: Fiscal Year 2018 Guidance as of 8/10/17 Earnings Call
13 © 2017 | Fiscal Year 2018 Guidance as of 8/10/17 Earnings Call Recurring fee revenue growth 4 - 6% Total revenue growth 2 - 3% Operating income margin - GAAP ~14% Adjusted Operating income margin - Non-GAAP ~16% Diluted earnings per share growth* 15 - 19% Adjusted earnings per share growth* - Non
Slide 15: Sustainable Growth, Operational Excellence, and Sound Capital Deployment Drive Performance
14 © 2017 | Sustainable Growth, Operational Excellence, and Sound Capital Deployment Drive Performance • Drive organic growth in current markets • Exploit adjacencies 14% Recurring Fee 3-Year CAGR (FY14–FY17) Sustainable Growth • Realize efficiencies • Increase operational leverage Consistent Margin
Slide 16: Broadridge Fourth Quarter Fiscal Year 2017 Highlights
Broadridge Fourth Quarter Fiscal Year 2017 Highlights as of 8/10/17 Earnings Call
Slide 17: Highlights
16 © 2017 | Highlights Strong fiscal year 2017 financial results o 2017 recurring revenues rose 29%, including 6% organic growth o Diluted EPS growth of 7% and Adjusted EPS growth of 15% to $3.13 14% recurring fee revenue and 11% Adjusted Earnings CAGR in line or ahead of three year objectives
Slide 18: Business Update: Balanced Growth
17 © 2017 | Business Update: Balanced Growth ICS segment benefited from growth in asset servicing activity o Stock record growth accelerated to 8% from 3% in fiscal 2017 and mutual fund interim record growth strengthened through the year o NACC acquisition was the biggest driver of recurring fee r
Slide 19: 4Q 2017 Revenue Growth Drivers
18 © 2017 | 4Q 2017 Revenue Growth Drivers ▪ Fourth Quarter 2017 Recurring fee revenue grew 24% to $806 million ▪ Fourth Quarter 2017 Total revenue grew 38% to $1,346 million $1,346 M +16% +4% +19% -1% $975 M $649 M $806 M +5% -2% +4% +17% +24% +38% Organic Growth: 8%
Slide 20: Fiscal Year 2017 Revenue Growth Drivers
19 © 2017 | Fiscal Year 2017 Revenue Growth Drivers ▪ Fiscal Year 2017 Recurring fee revenue grew 29% to $2.5 billion ▪ Fiscal Year 2017 Total revenue grew 43% to $4.1 billion $4.1B +19% +1% +24% -1% $2.9 B $1.9 B $2.5 B +6% -2% 2% +24% +29% +43% Organic Growth: 6%
Slide 21: Fourth Quarter 2017 Operating Income and EPS Comparison
20 © 2017 | Fourth Quarter 2017 Operating Income and EPS Comparison $ in millions, except per share amounts 4Q 2017 Change in Operating Income and Adjusted Operating Income 4Q 2017 Change in EPS and Adjusted EPS 18% 16% 10% 12%
Slide 22: Fiscal Year 2017 Operating Income and EPS Comparison
21 © 2017 | Fiscal Year 2017 Operating Income and EPS Comparison $ in millions, except per share amounts Fiscal Year 2017 Change in Operating Income and Adjusted Operating Income Fiscal Year 2017 Change in EPS and Adjusted EPS 15% 16% 6% 7%
Slide 23: Segment Results
22 © 2017 | ($ in millions) Investor Communication Solutions ("ICS") 4Q 2016 4Q 2017 Change FY 2016 FY 2017 Change Recurring fee revenues $460 $596 30% $1,157 $1,649 42% Total revenues $804 $1,162 45% $2,220 $3,421 54% Earnings before income taxes $262 $296 13% $409 $421 3% Pre-tax margins 32.6 % 25
Slide 24: Capital Allocation and Summary Balance Sheet
23 © 2017 | Capital Allocation and Summary Balance Sheet Fiscal Years 2014 - 2017: Select Uses of Cash Summary Balance Sheet as of June 30, 2017 Assets Cash and equivalents $ 271 Other assets 2,879 Total assets $ 3,150 Liabilities and Stockholders' Equity Total debt outstanding $ 1,102 Other liabili
Slide 25: Fiscal Year 2018 Guidance
24 © 2017 | Fiscal Year 2018 Guidance Recurring fee revenue growth 4 - 6% Total revenue growth 2 - 3% Operating income margin - GAAP ~14% Adjusted Operating income margin - Non-GAAP ~16% Diluted earnings per share growth* 15 - 19% Adjusted earnings per share growth* - Non-GAAP 15 - 19% Free cash flo
Slide 26: Closing Summary
25 © 2017 | Closing Summary Strong Fourth Quarter and Fiscal Year 2017 results Achieved three year objectives laid out at December 2014 Investor Day 10th consecutive increase in annual dividend amount Fiscal Year 2018 calls for another "Broadridge type of year" Increased breadth and depth
Slide 27: GAAP Reconciliations
26 © 2017 | GAAP Reconciliations
Slide 28: Reconciliation of GAAP to Non-GAAP Measures
27 © 2017 | Reconciliation of GAAP to Non-GAAP Measures $ in millions, except per share figures Three Months Ended June 30, Fiscal Year 2017 2016 2017 2016 Operating income (GAAP) $ 297.0 $ 270.3 $ 531.6 $ 500.3 Adjustments: Amortization of Acquired Intangibles and Purchased Intellectual Property 19
Slide 29: Reconciliation of GAAP to Non-GAAP Measures - FY18 Guidance
28 © 2017 | Reconciliation of GAAP to Non-GAAP Measures - FY18 Guidance (Unaudited) Adjusted Earnings Per Share Growth Rate (1) (2) Diluted earnings per share (GAAP) 15% - 19% Adjusted earnings per share (Non-GAAP) 15% - 19% Adjusted Operating Income Margin (3) Operating income margin % (GAAP) ~14%
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