Broadridge Financial Solutions, Inc. · NYSE:BR

Broadridge Financial Solutions — Investor Presentation (March 2019)

39 slides from Broadridge Financial Solutions's investor presentation, Mar 4, 2019

  1. Slide 1: Investor Presentation Fiscal Third Quarter 2019

    Investor Presentation FISCAL THIRD QUARTER 2019

  2. Slide 2: Forward-Looking Statements

    Forward-Looking StatementsThis 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 Litigation Reform A

  3. Slide 3: Use of Non-GAAP Financial Measures

    Use of Non-GAAP Financial Measures Explanation and Reconciliation of the Company’s Use of Non-GAAP Financial MeasuresThe Company’s results in this presentation are presented in accordance with U.S. generally accepted accounting principles ("GAAP") except where otherwise noted. In certain circumstanc

  4. Slide 4: The Broadridge Story

    The Broadridge Story Strong market position across governance and capital markets and wealth management Platform-based business model creates unique value for our clients Significant growth opportunity supported by long-term trends of mutualization, digitization, and data & analytics Strong business

  5. Slide 5: The industry's leading choice

    The industry’s leading choice Governance Capital Markets Wealth Management Process 80% of outstanding shares in the United States, 50%+ for rest of worldDistribute 90%+ of broker regulatory communications to 140M individual accounts Serve most brokers, funds, and public companies in North AmericaRea

  6. Slide 6: Broadridge platform-based business model creates unique value

    Broadridge platform-based business model creates unique value Network value Deep financial services knowledge Multi-client managed services approach Domain expertiseTrusted Unique CapabilityData & Analytics Scale leadershipSignificant IP

  7. Slide 7: Broadridge's directly addressable market is $25-40B

    Broadridge’s directly addressable market is $25-40B Key Market Trends GOVERNANCE & COMMUNICATIONS WEALTH MANAGEMENT CAPITAL MARKETS 100% = $25-40B DATA & ANALYTICS DIGITIZATION MUTUALIZATION Large Growth Opportunity

  8. Slide 8: Growth Opportunity: Extend Governance

    Growth Opportunity: Extend Governance 140M+RETAIL SHAREHOLDER ACCOUNTS 150,000+INSTITUTIONAL SHAREHOLDERS 27,000+ MUTUAL FUNDS AND ETFs 1,100+ BANKS and BROKER-DEALERS 5,000+CORPORATE ISSUERS EXTEND GOVERNANCEFee Revenue = $1.7B BUILD WEALTH MANAGEMENT DRIVE CAPITAL MARKETS Driving Next-gen Regulato

  9. Slide 9: Growth Opportunity: Drive Capital Markets

    Growth Opportunity: Drive Capital Markets Process for 18 of the 23 US Fixed Income primary dealersProcess Equities for 7 of the top 10 global investment banksClear and settle in over 80 markets globally Strong market position Support 30 clients for both technology and operations including 7 of 23 US

  10. Slide 10: Growth Opportunity: Build Wealth Management

    Growth Opportunity: Build Wealth Management Grow AdvisorBusiness Enhance ClientExperience Drive EnterpriseProductivity Advisors Investors Wealth management tools Targeted marketing Wealth mobile portal Educational content Enriched, digital communicationsTrading and account servicing Clearance & sett

  11. Slide 11: UBS Joining Broadridge Wealth Platform

    UBS Joining Broadridge Wealth PlatformSigning UBS as anchor client represents a major milestone in creating a Wealth Management franchiseBroadridge Wealth Platform will provide next-gen mission critical infrastructure to wealth managersBroadridge's platform will bring together capabilities across th

  12. Slide 12: Record Sales Building Revenue Backlog

    Record Sales Building Revenue Backlog FY2014 - FY2019 YTD Closed Sales Recurring Revenue Backlog as of FY20182,3 (1) FY19 Closed sales Guidance Range as of February 7th, 2019 Earnings Call(2) Recurring Revenue Backlog as of August 7th, 2018 Earnings Call and are Broadridge estimates and subject to r

  13. Slide 13: Broadridge business model is strong

    Broadridge business model is strong Sustainable Growth Large, recurring revenue base with good visibility aided by $295 million revenue backlogOrganic strength driven by large addressable market Steady Margin Expansion Continued scale and operational leverageFocus on operational efficiencies Strong

  14. Slide 14: Driving next-gen regulatory communications

    Driving next-gen regulatory communications30e-3 and Enhanced Content opportunitiesStrengthening digital products to enhance regulatory and other communicationsBlockchain proxy capability for North American market Growing data & analytics suiteBroadening corporate issuer solution setBuilding omni-cha

  15. Slide 15: Winning formula for top quartile TSR

    Organic Recurring Fee Revenue Growth 5-7% Recurring Fee Revenue Growth 7-9% Adjusted Op Income Margin Expansion ~50bps/yr Adjusted EPS Growth 14-18% Winning formula for top quartile TSR FY17 - FY20 three year growth objectives Note: FY17 - FY20 three year Adjusted EPS growth objective updated Februa

  16. Slide 16: Regulatory Update

    Regulatory Update June 2018SEC Approves 30e-3“Notice-and-access” Allows mutual funds to opt-in their shareholders to receive “notice-and-access” beginning in 2021Preference management solution delivered December 2018Financial impact: higher recurring fee revenues, lower distribution revenues, modest

  17. Slide 17: Broadridge focused on capturing opportunity

    Deliver on FY2019 guidance and FY2020 growth objectives Deliver results Build on current capabilities like culture, product and technology Build on capabilities Execute against Investor Day growth plans across Governance, Capital Markets and Wealth Management Execute against strategy Broadridge focu

  18. Slide 18: Fiscal Year 2018 and Second Quarter 2019 Financial Summary

    Fiscal Year 2018 and Second Quarter 2019 Financial Summary as of February 7th 2019 Earnings Call:

  19. Slide 19: Business Update

    Business Update2Q record Closed sales of $106 million in second quarter Year to date Closed sales of $124 million, up 102% Strong Closed sales result even excluding UBS sale Pipeline remains strongICS Recurring fee revenues up 10%25% Recurring fee revenue growth ex-Customer Communications driven by

  20. Slide 20: Second Quarter 2019 Revenue Growth Drivers

    Second Quarter 2019 Revenue Growth Drivers Second Quarter 2019 Recurring fee revenues grew 7% to $604 million Second Quarter 2019 Total revenues declined 6% to $953 million $953M +4% (5)% (5)% (0)% $1,013M $562M $604M +1% +6% (3)% +3% +7% (6)% Note: Amounts may not sum due to rounding Organic Growth

  21. Slide 21: Fiscal Year 2018 Revenue Growth Drivers

    Fiscal Year 2018 Revenue Growth Drivers Fiscal Year 2018 Recurring fee revenues grew 6% to $2.6 billion Fiscal Year 2018 Total revenues grew 5% to $4.3 billion $4,330M +4% +2% -1% 0% $ 4,143M $2,451M $2,610M +6% -3% +2% +1% +6% +5% Note: Amounts may not sum due to rounding Organic Growth: 5%

  22. Slide 22: Second Quarter 2019 GAAP and Adjusted Operating Income and EPS

    Second Quarter 2019 GAAP and Adjusted Operating Income and EPS $ in millions, except per share amounts Year-over-Year Change in Operating Income and Adjusted Operating Income Year-over-Year Change in EPS and Adjusted EPS -27% -33% -29% -19%

  23. Slide 23: Second Quarter Cost of Revenues & SG&A Expenses

    Second Quarter Cost of Revenues & Selling, General, and Administrative Expenses ($'s in millions) 2Q FY17 2Q FY18 2Q FY19 Cost of Revenues $707.4 $769.3 $734.0 Gross Margin 20.7% 24.0% 23.0% SG&A $125.9 $127.7 $141.2 Growth 21% 1% 11%

  24. Slide 24: First Half Contribution to Full Year EPS

    First Half Contribution to Full Year EPS 32% 29%1 26% 1 FY19 first half Diluted and Adjusted (Non-GAAP) EPS % of Full Year EPS based on mid-point of full year FY19 Diluted and Adjusted (Non-GAAP) EPS guidance. Diluted EPS Adjusted EPS - Non-GAAP 26% 26%1 23%

  25. Slide 25: Fiscal Year 2018 GAAP and Adjusted Operating Income and Adjusted EPS

    Fiscal Year 2018 GAAP and Adjusted Operating Income and Adjusted EPS $ in millions, except per share amounts Year-over-Year Change in Operating Income and Adjusted Operating Income Year-over-Year Change in EPS and Adjusted EPS +10% +12% +34% +32%

  26. Slide 26: Fiscal Year 2019 Guidance - Reaffirmed

    Fiscal Year 2019 Guidance - Reaffirmed Recurring fee revenue growth 5 - 7% Total revenue growth 3 - 5% Operating income margin - GAAP ~14.5% Adjusted Operating income margin - Non-GAAP ~16.5% Diluted earnings per share growth 12 - 16% Adjusted earnings per share growth - Non-GAAP 9 - 13% Free cash f

  27. Slide 27: 3Q FY2019 Supplemental Guidance

    3Q FY2019 Supplemental Guidance Q3 FY19 Estimated Range Growth vs ($'s in millions, except per share amounts) FY18 As Reported FY18 Pro Forma Recurring fee revenues $755 - $780M 18% - 22% 3% - 6% Total revenues $1,195 - $1,245M 11% - 16% (1)% - 3% Diluted earnings per share $1.25 - $1.41 39% - 57% A

  28. Slide 28: Additional Revenue Information

    Additional Revenue Information

  29. Slide 29: Appendix

    Appendix Bs Broadridge ©2019 | 29

  30. Slide 30: Tax Act & ETB Impact

    Tax Act & ETB Impact 2018 2019 2018 2019 2018 2019 $ in millions 2Q 2Q 1H 1H FY FY Outlook Earnings before income taxes $103.5 $64.3 $177.8 $153.6 $561.0 Provision for income taxes (Excluding ETB and non-recurring gains & charges) $26.7 $15.2 $52.7 $34.8 $158.6 Net Tax Charges 16.1 — 16.1 — 15.4 — E

  31. Slide 31: Revenues As Reported and As Adjusted for Accounting Change

    2018 2018 $ in millions Q1 Q1 Q2 Q2 Q3 Q3 Q4 Q4 FY FY Revenues As Reported Recurring Fee Revenues $ 547.8 $ 562.4 $ 638.6 $ 861.5 $ 2,610.4 Event-Driven Fee Revenues 59.3 97.3 66.5 60.7 283.9 Distribution Revenues 334.2 370.4 385.4 422.9 1,512.9 FX (16.5 ) (17.4 ) (18.6 ) (24.8 ) (77.3 ) Total Reven

  32. Slide 32: Pro Forma Accounting Change Impact to FY 2018 Recurring Revenues

    Pro Forma Accounting Change Impact to FY 2018 Recurring Revenues 2018 2018 $ in millions Q1 Q1 Q2 Q2 Q3 Q3 Q4 Q4 FY FY Recurring Fee Revenues As Reported ICS $ 332.9 $ 334.4 $ 403.5 $ 628.0 $ 1,698.9 GTO 214.9 228.0 235.2 233.5 911.6 Total Recurring Fee Revenues $ 547.8 $ 562.4 $ 638.6 $ 861.5 $ 2,6

  33. Slide 33: Pro Forma Accounting Change Impact to FY 2019 Revenue Growth

    Pro Forma Accounting Change Impact to FY 2019 Revenue Growth 2019 Growth Q1 Q2 1H Recurring Fee Revenues: As Reported 5% 7% 6% Pro Forma 6% 7% 6% Total Revenues: As Reported 5% (6)% (1)% Pro Forma (1)% 1% —% Note: For FY18 Pro Forma results refer to page 19 of the presentation

  34. Slide 34: GAAP Reconciliations

    GAAP Reconciliations Bis Broadridge ©2019 | 4

  35. Slide 35: Reconciliation of GAAP to Non-GAAP Measures

    Reconciliation of GAAP to Non-GAAP Measures Note: Amounts may not sum due to rounding Three Months Ended December 31, Three Months Ended December 31, Fiscal Year Ended June 30, Six Months Ended December 31, 2018 2018 2017 2017 2018 2018 2017 2017 Net earnings (GAAP) $ 49.9 $ 62.1 $ 427.9 $ 326.8 Adj

  36. Slide 36: Reconciliation of GAAP to Non-GAAP Measures

    Reconciliation of GAAP to Non-GAAP Measures Note: Amounts may not sum due to rounding (Unaudited) $ in millions, except per share amounts Three Months Ended December 31, Three Months Ended December 31, Fiscal Year Ended June 30, Six Months Ended December 31, 2018 2018 2017 2017 2018 2018 2017 2017 O

  37. Slide 37: Reconciliation of GAAP to Non-GAAP Measures

    Reconciliation of GAAP to Non-GAAP Measures (b) Calculated using the GAAP effective tax rate, adjusted to exclude the net $15.4 million charges associated with the Tax Act, as well as $40.9 million of excess tax benefits associated with stock-based compensation for the fiscal year ended June 30, 201

  38. Slide 38: Third Quarter and FY19 Adjusted Earnings Per Share Guidance

    (Dollars in millions, except per share amounts) Third Quarter FY19 Adjusted Earnings Per Share (1) Diluted earnings per share (GAAP) $1.25 - $1.41 Adjusted earnings per share (Non-GAAP) $1.40 - $1.56 FY19 Adjusted Earnings Per Share Growth Rate (1) Diluted earnings per share (GAAP) 12% - 16% Adjuste

  39. Slide 39: Broadridge Investor Relations

    Broadridge Investor Relations W. Edings Thibault Investor Relations Tel: 516-472-5129 Email: edings.thibault@broadridge.com

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