Broadridge Financial Solutions, Inc. · NYSE:BR
Broadridge Financial Solutions — Q4 FY2010 Earnings Presentation
26 slides from Broadridge Financial Solutions's earnings presentation, Aug 12, 2010
Slide 1: Earnings Webcast & Conference Call
Exhibit 99.2 Broadridge Financial Solutions, Inc. Earnings Webcast & Conference Call Fourth Quarter and Fiscal Year 2010 © 2010 Broadridge Financial Solutions, Inc. Broadridge and the Broadridge logo are registered trademarks of Broadridge Financial Solutions, Inc. August 12, 2010
Slide 2: Forward-Looking Statements
Forward-Looking Statements This presentation and other written or oral statements made from time to time by representatives of Broadridge may contain “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. Statements that are not historical in nature,
Slide 3: Today's Agenda
Today’s Agenda Opening Remarks and Key Topics Rich Daly, CEO Fourth Quarter and Fiscal Year 2010 Dan Sheldon, CFO Results and Fiscal Year 2011 Guidance Summary and Closing Comments Rich Daly, CEO Q&A Rich Daly, CEO Dan Sheldon, CFO Rick Rodick, VP Investor Relations Closing Remarks Rich Daly, CEO 2
Slide 4: Opening Remarks Key Topics
Opening Remarks Key Topics: Financial performance Key Accomplishments Closed sales performance Regulatory update 3
Slide 5: Financial Performance
Financial Performance Financial performance for the quarter and full year in line with expectations Record full-year closed sales were 26% higher than last year and client revenue retention rate was 98% Revenues for the year increased 7% Increase primarily due to unplanned event-driven mutual fund (
Slide 6: Key Accomplishments
Key Accomplishments Exited the clearing business by selling the business to Penson and signing an 11-year operations outsourcing agreement with Penson Freed-up $240M in capital Record closed sales of $175M Does not include the annual $55M 11-year agreement with Penson Signed a 7-year agreement to pr
Slide 7: Closed Sales Performance
Closed Sales Performance Sales Performance Overview: Closed Sales (Fee Only, $ in millions) Closed sales of $175M grew 26% for the year, Recurring (RC) Event-Driven (ED) while recurring fee sales increased 25% and event-driven revenue sales increased 29% High: $215 • Closed sales in Investor Communi
Slide 8: Regulatory Update
Regulatory Update The Securities and Exchange Commission (SEC) issued its Concept Release on the U.S. Proxy System on July 14, 2010 We welcome opportunities to create even greater levels of technology-driven efficiency and participation in shareholder communications and proxy voting We are in the pr
Slide 9: Broadridge Results and Forecast (Continuing Operations)
Broadridge Results and Forecast (Continuing Operations) Revenue/Growth EBIT/Growth (Non-GAAP) Margin/Growth (Non-GAAP) EPS (Non-GAAP) EPS (GAAP) 4Q10: $751M / +5% $185M / (1)% 24.6% / (140) bps $0.84 $0.84 FY10: $2,209M / +7% $352M / 0% 15.9% / (110) bps $1.56 $1.62 FY11: $2,237 to 2,304M/ +1 to +4%
Slide 10: Revenue Drivers - Historical and Forecast FY11
Revenue Drivers- Historical and Forecast FY11 (Continuing Operations) Historical (FY05-FY10) Actual Forecast CAGR FY10 FY11 6% Total Revenue Growth 7% 1-4% 4% Sales (Recurring) 4% 3-4% (2)% Client Losses (2)% (1)% 2% Net New Business 2% 2-3% 3% Internal Growth (a) (2)% 0-1% 1% Event-Driven (b) 4% (4
Slide 11: Segment Results & Forecast – Investor Communication Solutions
Segment Results & Forecast – Investor Communication Solutions Revenue/Growth EBIT/Growth (Non-GAAP) Margin/Growth (Non-GAAP) FY10: $1,670M / +9% $273M / + 10% 16.3% / 0 bps FY11: $1,641 to 1,682M/ (2) to +1% $271 to 284M / (1) to +4% 16.5 to 16.9% / +20 to +60 bps FY10: Revenue at the low end of our
Slide 12: Segment Results & Forecast – Securities Processing Solutions
Segment Results & Forecast – Securities Processing Solutions (Continuing Operations) Revenue/Growth EBIT/Growth (Non-GAAP) Margin/Growth (Non-GAAP) FY10: $536M/ (4)% $99M / (26)% 18.5% / (540) bps FY11: $589 to 615M / +10 to +15% $80 to 96M / (19) to (3)% 13.5 to 15.6% / (500) to (290) bps The numbe
Slide 13: Business Results & Forecast – Previous SPS Segment View
Business Results & Forecast – (Previous SPS Segment View) Revenue/Growth EBIT/Growth (Non-GAAP) Margin/Growth (Non-GAAP) FY10: $511M / (4)% $110M / (23)% 21.5% / (520) bps FY11: $525 to 545M / +3 to +7% $95 to 110M / (14)% to flat 18.2 to 20.1% / (330) to (140) bps FY10: Q4 both revenue and margin w
Slide 14: Business Results & Forecast – Outsourcing & Penson
Business Results & Forecast – Outsourcing & Penson (Continuing Operations) Revenue/Growth Expenses EBIT(Non-GAAP ) FY10: $25M / 0% $36M $(11)M Penson Phase 1 +$23M $39M $(16)M Penson Phase 2 & New Sales +$17 to +22M $6 to 9M $11 to 13M FY11: $65 to 70M / +160 to +180% $81 to 84M $(16) to (14)M Penso
Slide 15: Segment Results & Forecast – Other & Foreign Exchange
Segment Results & Forecast – Other & Foreign Exchange (FX) Revenue EBT FY10: Other - Fees $2M $2M - Interest Expense $(10)M - Corp. Expenses & Investments $(28)M FX - P&L $1M $4M - Transaction Activity $1M FY11: Other - Fees $0M $0M - Interest Expense $(11)M - Corp. Expenses & Investments $(27) to (
Slide 16: FY11 Continuing Operations Financial Guidance Summary
Broadridge - FY11 Continuing Operations Financial Guidance Summary Revenue growth in the range of 1-4% Closed sales forecast for the year at $160-215M Non-GAAP Earnings before interest and taxes margin of 14.8-15.2% Diluted Earnings Per Share: GAAP EPS (continuing operations) in the range of $1.55-1
Slide 17: Summary
Summary Revenue and earnings per share from continuing operations in line with expectations Achieved revenue growth from unplanned event-driven mutual fund proxy activities Market-driven revenue growth has struggled due to low volumes Had the best strategic and sales execution since our spin-off fro
Slide 18: Q&A
Q&A There are no slides during this portion of the presentation 17
Slide 19: Closing Comments
Closing Comments There are no slides during this portion of the presentation 18
Slide 20: Appendix
Ce ee Appendix Appendix 19 Ba Broadridge
Slide 21: Broadridge 4Q and FY 2010 from Continuing Operations
Broadridge 4Q and FY 2010 from Continuing Operations Revenue ($ in millions, except EPS) Earnings Revenue ($ in millions, except EPS) Earnings FY09 FY10 FY09 FY10 FY09 FY10 FY09 FY10 Q4 Q4 Q4 Q4 Full Year Full Year Full Year Full Year $587 $610 ICS $173 $171 $1,531 $1,670 ICS $249 $273 -7% 4% Growth
Slide 22: Broadridge FY11 Guidance from Continuing Operations
Broadridge FY11 Guidance from Continuing Operations Revenue ($ in millions, except EPS) Earnings FY10 FY11 Range FY10 FY11 Range Actual Low High Actual Low High $1,670 $1,641 $1,682 ICS $273 $271 $284 9% -2% 1% Growth % / Margin % 16.3% 16.5% 16.9% $536 $589 $615 SPS $99 $80 $96 -4% 10% 15% Growth %
Slide 23: Cash Flow – FY10 Results and FY11 Forecast
Cash Flow – FY10 Results and FY11 Forecast Unaudited (In millions) FY11 Range (a) FY10 Low High Free Cash Flow (Non-GAAP) : Net earnings from continuing operations per GAAP $ 225 $ 201 $ 212 Depreciation and amortization (includes other LT assets) 57 65 75 Stock-based compensation expense 27 30 30 O
Slide 24: Closed Sales to Revenue Contribution
Closed Sales to Revenue Contribution ($ in millions) Forecast Closed Sales Stats: Recurring FY09 FY10 FY11 Recurring ICS $55 $80 $35-50 • Both ICS and SPS trending toward longer revenue recognition cycle ~ Revenue Contribution Year 1-3 55% 35% 10% 50% 40% 10% 35% 40% 25% • Larger strategic deal coul
Slide 25: Reconciliation of Non-GAAP to GAAP Measures
Reconciliation of Non-GAAP to GAAP Measures EBIT Reconciliation 4Q09 4Q10 FY09 FY10 FY11 Range (a) ($ in millions) Actual Actual Actual Actual Low High EBIT (Non-GAAP)* $186 $185 $352 $352 $330 $350 Margin % 26.0% 24.6% 17.0% 17.0% 14.8% 15.2% Interest & Other ($3) ($2) ($6) ($0) ($11) ($11) Total E
Slide 26: FY11 Grow-over
FY11 Grow-over ($ in millions, except for EPS) Forecast FY11 Strategic Revenue EBIT Penson $35 ($6) MSSB and Penson are expected to be ~ Forecast Q1/2/3/4 Distribution $6/9/9/11 $(5) / (2) / (1) /2 accretive in FY12 and FY13 driven by MSSB $19 $2 revenue growth and scale in the ~ Forecast Q1/2/3/4 D
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