Broadridge Financial Solutions, Inc. · NYSE:BR
Broadridge Financial Solutions — Q2 FY2019 Earnings Presentation
27 slides from Broadridge Financial Solutions's earnings presentation, Feb 7, 2019
Slide 1: Earnings Webcast & Conference Call Second Quarter and First Six Months of Fiscal Year 2019
EXHIBIT 99.2 Earnings Webcast & Conference Call Second Quarter and First Six Months of Fiscal Year 2019 © 2018 | ‹#›
Slide 2: Forward-Looking Statements
Forward-Looking Statements This presentation and other written or oral statements made from time to time by representatives of BroadridgeFinancial Solutions, Inc. ("Broadridge" or the "Company") may contain “forward-looking statements” within the meaning of the Private Securities Litigation Reform A
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 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 circumstan
Slide 4: Highlights
Highlights . Strong second quarter 2019 financial results • Recurring fee revenues rose 7% • Closed sales of $106 million, a second quarter record o Strong Closed sales growth even excluding landmark sale to UBS • As expected, event-driven revenues of $48 million declined relative to near record $97
Slide 5: Key Stakeholder Messages
Key Stakeholder Messages . Broadridge's role powering the critical infrastructure behind Investing, Governance, and Communications strengthens our clients and enables better financial lives . Broadridge has transformed over the past seven years as demonstrated by recent "Most Admired Company" award
Slide 6: Business Update
Business Update . 2Q 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 strong . ICS Recurring fee revenues up 10% • 25% Recurring fee revenue growth ex-Customer Communicat
Slide 7: Second Quarter 2019 Revenue Growth Drivers
Second Quarter 2019 Revenue Growth Drivers ▪ Second Quarter 2019 Total revenues declined 6% to $953 million +4% (5)% (6)% $1,013M (5)% (0)% $953M ▪ Second Quarter 2019 Recurring fee revenues grew 7% to $604 million Organic Growth: 6% +7% +6% +3% +1% +1% (3)% $604M $562M Note: Amounts may not sum due
Slide 8: 1H 2019 Revenue Growth Drivers
1H 2019 Revenue Growth Drivers ▪ Six Months Fiscal 2019 Total revenues declined 1% to $1.93 billion +4% (2)% (1)% $1.94B (2)% (0)% $1.93B ▪ Six Months Fiscal 2019 Recurring fee revenues grew 6% to $1.18 billion Organic Growth: 5% +6% +1% 0% +6% $1.18B (3)% +2% $1.11B Note: Amounts may not sum due to
Slide 9: 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 Year-over-Year Change in EPS and and Adjusted Operating Income Adjusted EPS -27% -29% -33% -19% 2019 | 9
Slide 10: Six Months Fiscal Year 2019 GAAP and Adjusted Operating Income and EPS
Six Months Fiscal Year 2019 GAAP and Adjusted Operating Income and EPS $ in millions, except per share amounts Year-over-Year Change in Operating Income Year-over-Year Change in EPS and and Adjusted Operating Income Adjusted EPS -9% +2% -11% +14% 2019 | 10
Slide 11: 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 $141.2 Growth 21% 1% 11% 2019 | 11
Slide 12: First Half Contribution to Full Year EPS
First Half Contribution to Full Year EPS Adjusted EPS - Non-GAAP Diluted EPS 32% 29%1 26% 26% 26%1 23% 1 FY19 first half Diluted and Adjusted (Non-GAAP) EPS % of Full Year EPS based on mid-point of full year FY19 Diluted and Adjusted (Non-GAAP) EPS guidance. 2019 | 12
Slide 13: Segment Results
Segment Results ($ in millions) Investor Communication Solutions ("ICS") 2Q 1H 2018 2019 Change 2018 2019 Change Recurring fee revenues $334 $367 10% $667 $715 7% Event-driven fee revenues 97 48 (51)% 157 125 (20)% Distribution revenues 370 323 (13)% 705 664 (6)% Total revenues $802 $738 (8)% $1,529
Slide 14: Capital Allocation and Summary Balance Sheet
Capital Allocation and Summary Balance Sheet $ in millions Select Uses of Cash in Summary Balance Sheet First Half 2019 as of December 31, 2018 Assets Cash and cash equivalents $ 250 Other assets 3,108 Total assets $ 3,358 Liabilities and Stockholders' Equity Total debt outstanding $ 1,194 Other lia
Slide 15: 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
Slide 16: 3Q FY2019 Supplemental Guidance
3Q FY2019 Supplemental Guidance Q3 FY19 Growth vs Estimated Range ($'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
Slide 17: Appendix
Appendix Bi Broadridge 2019 | 17
Slide 18: Tax Act & ETB Impact
Tax Act & ETB Impact 2018 2019 2018 2019 2018 2019 FY 2Q 2Q 1H 1H FY $ in millions 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
Slide 19: Pro Forma Accounting Change Impact to FY 2018 Total Revenues
Pro Forma Accounting Change Impact to FY 2018 Total Revenues 2018 $ in millions Q1 Q2 Q3 Q4 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
Slide 20: Pro Forma Accounting Change Impact to FY 2018 Recurring Revenues
Pro Forma Accounting Change Impact to FY 2018 Recurring Revenues 2018 $ in millions Q1 Q2 Q3 Q4 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 $ 2,610.4 % of FY Recurri
Slide 21: 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 2019 | 21
Slide 22: Supplemental Reporting Detail - Product Line Reporting
Supplemental Reporting Detail - Product Line Reporting1 $ in millions Q1FY18 Q2FY18 Q3FY18 Q4FY18 FY 2018 Q1FY19 Q2 FY19 YTD FY19 Investor Communication Solutions ("ICS") Equity proxy $ 30.0 $ 33.6 $ 45.1 $ 298.1 $ 406.8 $ 31.0 $ 41.7 $ 72.7 Mutual fund & ETF interims 49.2 46.9 67.0 58.3 221.4 57.8
Slide 23: Reconciliation of GAAP to Non-GAAP Measures
Reconciliation of GAAP to Non-GAAP Measures (Unaudited) $ in millions, except per share amounts Three Months Ended December 31, Six Months Ended December 31, 2018 2017 2018 2017 Operating income (GAAP) $ 78.2 $ 115.9 $ 178.3 $ 201.1 Adjustments: Amortization of Acquired Intangibles and Purchased Int
Slide 24: Reconciliation of GAAP to Non-GAAP Measures
Reconciliation of GAAP to Non-GAAP Measures (Unaudited) $ in millions, except per share amounts Three Months Ended December 31, Six Months Ended December 31, 2018 2017 2018 2017 Diluted earnings per share (GAAP) $ 0.42 $ 0.52 $ 1.06 $ 0.93 Adjustments: Amortization of Acquired Intangibles and Purcha
Slide 25: Reconciliation of GAAP to Non-GAAP Measures
Reconciliation of GAAP to Non-GAAP Measures Fiscal Years Ended June 30, 2018 2017 2016 2015 2014 Diluted earnings per share (GAAP) $ 3.56 $ 2.70 $ 2.53 $ 2.32 $ 2.12 Adjustments: Amortization of Acquired Intangibles and Purchased Intellectual Property 0.68 0.60 0.26 0.20 0.18 Acquisition and Integra
Slide 26: Reconciliation of GAAP to Non-GAAP Measures - Third Quarter and FY19 Guidance
Reconciliation of GAAP to Non-GAAP Measures - Third Quarter and FY19 Guidance (Unaudited) (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 Adjus
Slide 27: Broadridge Investor Relations
Broadridge Investor Relations W. Edings Thibault Investor Relations Tel: 516-472-5129 Email: edings.thibault@broadridge.com 2019 | 27
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