Broadridge Financial Solutions, Inc. · NYSE:BR
Broadridge Financial Solutions — Q2 2022 Earnings Presentation
47 slides from Broadridge Financial Solutions's earnings presentation, Dec 7, 2021
Slide 1: Scaling a Global Fintech Leader
Scaling a Global Fintech Leader Second Quarter Fiscal Year 2022 Investor Presentation Exhibit 99.1 Broadridge’
Slide 2: Forward-Looking Statements
. ° e . oe 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, KPIs and foreign exchange rates
. ° e . oe Use of Non-GAAP financial measures, KPIs and foreign exchange rates Use of Non-GAAP Financial Measures This presentation includes certain Non-GAAP financial measures including Adjusted Operating income, Adjusted Operating income margin, Adjusted Net earnings, Adjusted earnings per share (
Slide 4: A clear path for long term growth
A clear path for long term growth (© 2021-2023 S ; Scaling a 2020 Global O AGlobal Fintech 2017. ~*Fintech + Leader O Ready Leader 2014 for Next Invest for Growth ps Broadridge | Ready for Next A global Fintech leader addressing a large and growing market Three franchise businesses executing on clea
Slide 5: Broadridge is a global Fintech leader
Broadridge is a global Fintech leader Broadridge powers the critical infrastructure behind investing, governance, es Broadridge’ TRILLION Powering SOT per day in fixed income and equity trades Ready for Next and communications >? BILLION Manage more than 2 billion critical mutual fund and equity pro
Slide 6: Broadridge has a $52 billion and growing market opportunity
Broadridge has a $52 billion and growing market opportunity $12B WEALTH $52B S19B CURRENT OPPORTUNITY GOWERNBINEE $21B CAPITAL MARKETS Technology and operations spend by global banks is over $190 Billion ps Broadridge | Ready for Next © 2021 5
Slide 7: Three strong growing franchises with $3.2 billion in Recurring revenue
Three strong growing franchises with $3.2 billion in Recurring revenue $3.2B Capital Markets FY’21 $661M Recurring Revenue RECURRING 8% Four-Year Average Growth REVENUE Wealth & Investment Management $525M Recurring Revenue 13% Four-Year Average Growth pa Broadridge’ | — Ready for Next © 2021 6
Slide 8: Long term growth supported by commitment to ongoing investment
Long term growth supported by commitment to ongoing investment — NEAR-TERM ! MEDIUM-TERM — LONG-TERM Scaling to meet incremental position growth and trade growth Adding QR codes to facilitate mobile proxy voting Invested in Virtual Shareholder Meeting (VSM) solution Platform development including fo
Slide 9: Long track record of delivering consistent growth and top quartile TSR
Long track record of delivering consistent growth and top quartile TSR FY’14—-FY’17_—- FY’17 - FY’20 (CAGR) (CAGR) Organic Recurring revenue growth? 5% 5% Recurring revenue growth 7%? 7% Adj. Operating Income Margin expansion (bps/ year) (Non-GAAP) 3 Adj. Earnings per share growth (Non-GAAP) 12% 12%
Slide 10: Segment Strategy: Investor Communication Solutions (ICS)
Segment Strategy: Investor Communication Solutions (“ICS”) 2 7 ¢ . : OF 7 : - oO” 7 Oo” ce . - Fin a ae py a 5 - di - : - - i - . - gree - f° - Broadridge’
Slide 11: ICS Strategy
: } ICS Strategy '; Extend our strong and growing Governance franchise Drive Next-Gen Grow End-to-End A leader at the heart of a Regulatory Issuer Solutions powerful governance network Recurring revenues of $2.0B and 4-year average annual growth rate of 7% Strong and consistent Ba idoe: Broadridge u
Slide 12: Our network links investors, asset managers, and issuers across North America
: | Our network links investors, asset managers, and "issuers across North America INTERMEDIARIES 1,000+ : ISSUERS OF SECURITIES Banks and broker-dealers 9,000+ S. = 120,000+ Corporate issuers Institutional \ shareholders I Ly i yy] ‘ | pw Broadridge mug \ ree \ A _™ = 30,000+ “71. 170M+ Mutual fund
Slide 13: Key volume drivers: position and trade volume growth
Key volume drivers: position and trade volume growth EQUITY & MUTUAL FUND/ETF POSITION GROWTH 10Y Avg. 26% —e Equity 8% =—®=MF/ETF 8% ITG 5% 3% Fy'12 FY'13 FY'14 FY'15 FY'16 FY'17 FY'18 FY'19 FY'20 FY'21 INTERNAL 1% (4)% 8% 3% TRADE GROWTH (ITG) 2% 3% 13% 6% 9% 12% ps Broadridge | Ready for Next © 2
Slide 14: ICS Segment Overview
ICS Segment Overview ICS FISCAL YEAR RECURRING REVENUES 0 7% Avg. A\ | Growth vg. Annual Grow 11% YoY Growth +20% 7% 4% Regulatory Data-Driven +4% Fund Solutions Issuer +21% Customer 0% Communications FY'18 Fy'19 FY'20 FY'21 ps Broadridge | Ready for Next ©2021 «13
Slide 15: Segment Strategy: Global Technology & Operations (GTO)
Segment Strategy: Global Technology & Operations (“GTO”) Broadridge’
Slide 16: GTO Strategy: Grow Capital Markets franchise and build Wealth & Investment Management
i GTO Strategy: Grow Capital Markets franchise and continue : building next-gen Wealth & Investment Management franchise GTO FISCAL YEAR RECURRING REVENUES 10% Avg. Annual Growth 4% YoY 10% Capital Growth Markets +7% Wealth & Investment Management FY'18 FY'19 FY'20 FY'21 FY'20 FY'21 ps Broadridge |
Slide 17: Capital Markets Overview
Capital Markets Overview 8% Enterprise Trading Avg. Annual Growth 7% & Data nnovation Solutions 4% 10% SOT’ LEADING GLOBAL SaaS PLATFORM Network Value Global Simplification FY'18 Fy'19 FY'20 FY'21 ¢ A global leader in post-trade processing for cash securities ¢ Continued growth driven by evolution o
Slide 18: Broadridge acquired Itiviti
Broadridge acquired Itiviti for $2.6B, enhancing its position as a global tech leader across the trade life cycle Front-Office OEMS Connectivity, Network A modular, multi-asset offering that facilitates access to market liquidity, enables more effective market making, efficient post-trade processing
Slide 19: Wealth & Investment Management Overview
: Wealth & Investment Management Overview i |: er” ee 13% 29% 7% : a= Avg. Annual Growth Back Middle Front 10% 4% Office Office Office BROADRIDGE WEALTH PLATFORM FY'18 Fy'19 FY'20 FY'21 ¢ Leading provider of back-office capabilities ¢ Strong set of differentiated component solutions for front- and m
Slide 20: Broadridge Business Model
Broadridge Business Model 5 7 a ay A ; Z ve A j 2 , B eS ¢ Ziv Z P IPO e A Sty o Fics oem oe ete Par i - ee Ls ae Broadridge’
Slide 21: The Broadridge financial model
The Broadridge financial model is focused on driving steady revenue growth and consistent earnings per share growth, generated by: A oO oll oz Sustainable Investments in Continued margin recurring revenue our long-term expansion from growth growth strategy our scale and operational efficiencies Bala
Slide 22: Long runway for growth and a high-quality revenue mix
Long runway for growth and a high-quality revenue mix RECURRING REVENUE GROWTH AS % OF TOTAL $52B TOTAL ADDRESSABLE MARKET FY’18 FY’21 @ Recurring Revenue ™@ Event-Driven and Distribution Revenue Note: based on gross revenues before impact of FX. ps Broadridge | Ready for Next ©2021. 21
Slide 23: We are maintaining closed sales momentum
We are maintaining closed sales momentum... Sin millions CLOSED SALES FY’21 SALES BACKLOG ' $385 $355 \2" - $228 9232 Il leo80 FY'20 FY'21 FY'22 FY'20 FY'21 Guidance 12% 12% % OF RECURRING REVENUE ps Broadridge | Ready for Next ©2021 22
Slide 24: While continuing to expand margin
..While continuing to expand margin ADJUSTED OPERATING INCOME MARGIN (NON-GAAP) Scale : 75 bps annual Natural OpEx leverage from a SaaS 3 FY’18-21 average Adjusted Operating Income margin expansion business |-19% « Digital 18.1% . . . . 17.5% Margin expansion due to mix shift toward digital 17.1% A
Slide 25: Capital allocation
Capital allocation Sin millions, except per share data SELECT USES OF CASH FY’21 TOTAL CAPITAL RETURNS? DIVIDENDS PER SHARE CapEx and $101 $1.46 $1.94 $2.16 $2.30 $2.56° Software1 YoY Growth 11% 33% 11% 6% 11% Client Platform Investments? $298 M&A3 FY'18 Fy'19 FY'20 FY'21 FY'22 1. Includes Software
Slide 26: Full-year guidance for fiscal year 2022
Full-year guidance for fiscal year 2022 FY’22 GUIDANCE * Recurring revenue growth 12-15% Adjusted Operating Income Margin (Non-GAAP) ~19% Adjusted Earnings per Share Growth (Non-GAAP) 11-15% Closed sales $240-$280M 1. As of November 3, 2021 Broadridge’ Ready for Next © 2021
Slide 27: Earnings Conference Call: First Quarter Fiscal Year 2022
Scaling a Global Fintech Leader EARNINGS CONFERENCE CALL First Quarter Fiscal Year 2022 o 7 ea . c OF : on a . oa Oo” Ze ° oa Fin a 45 ° ¢ oo 4 Ow ¢ OP eee Ce OF a . - 7° - oe a . - F< - . - Oy - Broadridge’
Slide 28: Key messages
Key messages @) Broadridge delivered strong first quarter results Q) Recurring revenue grew 16% propelled by revenue from Closed sales, robust Governance trends, and the continued successful integration of Itiviti 3) Broadridge is executing its strategy across Governance, Capital Markets, and Wealth
Slide 29: Summary financial results
: | Summary financial results Sin millions, except per share data SUMMARY FINANCIAL RESULTS + Recurring revenues Total revenues Operating income Adjusted Operating income (Non-GAAP) Adjusted Operating income margin (Non-GAAP) Diluted earnings per share Adjusted earnings per share (Non-GAAP) Closed s
Slide 30: Recurring revenue increased 16% in first quarter 2022
Recurring revenue increased 16% in first quarter 2022 $ in millions RECURRING REVENUE GROWTH ] 12-15% J 10% 10% 6% FY'19 Fy'20 FY'21 FY'22 Qi'21 Q1'22 Guidance Broadridge’ | — Ready for Next ©2021 29
Slide 31: First quarter 2022 segment Recurring revenues
: First quarter 2022 segment Recurring revenues $ in millions ICS RECURRING REVENUES GTO RECURRING REVENUES $410 YoY Growth $23% Growth Regulatory +34% Data-Driven + 5% Capital Fund Solutions: Markets + 16% Issuer Customer 2% nvestire + 2% Investmen cone 6 vestment + 6% 1Q'21 1Q'22 1Q'21 1Q'22 ps Br
Slide 32: Key volume drivers: position and trade volume growth
Key volume drivers: position and trade volume growth EQUITY & MUTUAL FUND/ETF POSITION GROWTH 39% FY’20 FY’21 —e-Equity 10% 26% —e-MF/ETF 2% 10% ITS 9% 12% 16% 11% ; 9% 6% co Q1'21 Q2'21 Q3'21 Q4'21 Q1'22 TOTAL INTERNAL TRADE VOLUME 12% 24% 12% (1)% 2% GROWTH Note: Q1’21 positions represented 5% of
Slide 33: First quarter 2022 Recurring revenue growth drivers
First quarter 2022 Recurring revenue growth drivers Sin millions Pts contribution to growth FIRST QUARTER 2022 RECURRING REVENUES GREW 16% TO $751M 7% | ORGANIC GROWTH +9 pts 2p es (2) pts 16% 1Q'21 Recurring Closed Sales Client Losses = Internal Growth — Acquisitions Revenue Ics $369M 8 pts (2) pts
Slide 34: First quarter 2022 Total revenue growth drivers
First quarter 2022 Total revenue growth drivers Sin millions . Pts contribution to growth FIRST QUARTER 2022 TOTAL REVENUE GROWTH DRIVERS : 9 : +10 pts +3 pts ape 1pt ale : a Pe 1Q'21 Total Recurring Event-Driven Distribution FX 1Q'22 Total Revenue Revenue QUARTERLY EVENT-DRIVEN REVENUE $73 $72 $76
Slide 35: Operating income margin and Adjusted Operating income margin
Operating income margin and Adjusted Operating income margin OPERATING INCOME MARGIN OPERATING 15.0% 13.8% 13.6% 7.7% 8.7% INCOME MARGIN (GAAP) 18.1% ‘19% 17.5% ADJUSTED 17.1% OPERATING INCOME MARGIN (NON- 14.8% 14.8% GAAP) FY'19 FY'20 FY'21 FY'22 Q1'21 Q1'22 Guidance ps Broadridge | Ready for Next
Slide 36: Appendix
Appendix ee Broadridge’
Slide 37: Supplemental reporting detail — product line reporting
Supplemental reporting detail — product line reporting (Unaudited) — 22 Dotersin milion FY FY 2 Investor Communication Solutions ("ICS") : Regulatory $783 $135 $145 $285 $375 $940 $165 23% : Data-driven fund solutions 331 79 86 86 93 344 83 5% 3 Issuer 156 18 21 44 106 189 21 16% . Customer communic
Slide 38: Explanation of Non-GAAP measures and Reconciliation of GAAP to Non-GAAP measures
Explanation of Non-GAAP measures and Reconciliation of GAAP to Non-GAAP measures Poa _- = oe we a ee a eee A. SouDHOOOODOOOC sian anu Pa va r= 7 2 u ae oe Ls ee Broadridge:
Slide 39: Non-GAAP measures
Non-GAAP measures of the C s Use of Non-GAAP Financial Measures The Company’s results in this presentation are presented in accordance with U.S. generally accepted accounting principles ("GAAP") except where otherwise noted. In certain circumstances, results have been presented that are not generall
Slide 40: Non-GAAP measures
Non-GAAP measures We exclude Acquisition and Integration Costs, IBM Private Cloud Charges, Real Estate Realignment and Covid-19 Related Expenses, the Investment Gain, and the Software Charge, from our Adjusted Operating Income (as applicable), as well as other adjusted earnings measures, because exc
Slide 41: Reconciliation of GAAP to Non-GAAP Measures
Reconciliation of GAAP to Non-GAAP Measures : (Unaudited) : + : Operating Income (GAAP) $678.7 $624.9 $652.7 $598.1 $534.0 $502.3 $468.5 $418.3 : Adjustments: : Amortization of acquired intangibles and purchased 153.7 122.9 387.4 814 72.6 318 25.3 22.6 intellectual property Acquisition and integrati
Slide 42: Reconciliation of GAAP to Non-GAAP Measures
Reconciliation of GAAP to Non-GAAP Measures (Unaudited) r ended June 30, Dollars in millions, except per share amounts | 2021 | 2020 | Diluted earnings per share (GAAP) $4.65 $3.95 $406 $3.56 $2.70 $2.53 $2.32 $2.12 Adjustments: Amortization of acquired intangibles and purchased 1.30 1.05 0.74 0.68
Slide 43: Reconciliation of GAAP to Non-GAAP measures
Reconciliation of GAAP to Non-GAAP measures (Unaudited) i Operating income (GAAP) $103.3 $78.6 : Adjustments: : Amortization of Acquired Intangibles and Purchased Intellectual Property 68.7 32.3 : Acquisition and Integration Costs 2.9 1.7 : Real Estate Realignment and Covid-19 Related Expenses 1.8 3
Slide 44: Reconciliation of GAAP to Non-GAAP measures
Reconciliation of GAAP to Non-GAAP measures (Unaudited) 218 Dollars in millions, except per share amounts i Diluted earnings per share (GAAP) : Adjustments: : Amortization of Acquired Intangibles and Purchased Intellectual Property 0.58 0.28 : Acquisition and Integration Costs 0.02 0.01 ° Real Estat
Slide 45: Reconciliation of GAAP to Non-GAAP measures (Unaudited)
Reconciliation of GAAP to Non-GAAP measures 3 (Unaudited) : : 2 Dollars in millions 2021 2020 2019 : Operating income (GAAP) $678.7 $624.9 $652.7 : Adjustments: : Amortization of Acquired Intangibles and Purchased Intellectual Property 153.7 122.9 87.4 . Acquisition and Integration Costs 18.1 12.5 6
Slide 46: Reconciliation of Non-GAAP to GAAP measures: Fiscal Year 2022 guidance
Reconciliation of Non-GAAP to GAAP measures: Fiscal Year 2022 guidance (Unaudited) Adjusted Earnings Per Share Growth Rate (a) Diluted earnings per share — GAAP (5) — 0% growth Adjusted earnings per share — Non-GAAP 11-15% growth Adjusted Operating Income Margin (b) Operating income margin % - GAAP
Slide 47: Broadridge Investor Relations Contacts
Broadridge Investor Relations Contacts W. Edings Thibault Edings.Thibault@Broadridge.com Sean Silva Sean.Silva@Broadridge.com 7 5 7 Fin fa 7 oo ie on ¢ on a oo ¢ On ¢ eo lhl he - ei ma or & 7. ae ez i Broadridge’
Broadridge Financial Solutions — Q2 2022 Earnings Presentation on 6ix