Broadridge Financial Solutions, Inc. · NYSE:BR
Broadridge Financial Solutions — Investor Presentation (September 2019)
32 slides from Broadridge Financial Solutions's investor presentation, Sep 4, 2019
Slide 1: Investor Presentation Fiscal First Quarter 2020
INVESTOR PRESENTATION FISCAL FIRST QUARTER 2020
Slide 2: Forward-Looking Statements
Forward-Looking Statements 2 © 2019 | 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
Use of Non-GAAP Financial Measures 3 © 2019 | 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
Slide 4: The Broadridge Story
The Broadridge Story Strong market position across Governance, 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 m
Slide 5: Broadridge Focused on Capturing Opportunity
Broadridge Focused on Capturing Opportunity Achieved FY2019 Guidance including 6% Recurring fee revenue growth and double-digit EPS growthRecord Closed sales in FY2019FY2020 Guidance positions Broadridge to meet high-end of three- year EPS objectiveBalanced execution against capital allocation prior
Slide 6: 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 accountsServe most brokers, funds, and public companies in North AmericaReac
Slide 7: Broadridge Platform-based Business Model Creates Unique Value
Broadridge Platform-based Business Model Creates Unique Value Networkvalue Deep financial services knowledge Multi-client managed services approach Domain expertiseTrusted 7 © 2019 | Unique CapabilityData & Analytics Scale leadershipSignificant IP
Slide 8: Broadridge's Directly Addressable Market is $25-40B
Broadridge’s Directly Addressable Market is $25-40B $9-13B 8 © 2019 | $6-12B $10-15B GOVERNANCE & COMMUNICATIONS WEALTH MANAGEMENT CAPITALMARKETS 100% = $25-40B DATA & ANALYTICS DIGITIZATION MUTUALIZATION Large Growth Opportunity Key Market Trends
Slide 9: 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 Regulatory
Slide 10: Growth Opportunity: Drive Capital Markets
Growth Opportunity: Drive Capital Markets Serve 19 of the 24 US Fixed Income primary dealersProcess Equities for 7 of the top 10 global investment banksClear and settle in over90 markets globally Strongmarket position Support 40+ clients for both technology and operations including 7 of 27 US Fixed
Slide 11: Growth Opportunity: Build Wealth Management
Growth Opportunity: Build Wealth Management Advisors Investors Wealth management toolsTargeted marketingWealth mobile portal Educational contentEnriched, digital communicationsTrading and account servicing Clearance & settlementClient and regulatory reportingBusiness process automation & workflows E
Slide 12: Record Sales Building Revenue Backlog
Record Sales Building Revenue Backlog Annual Closed Sales Performance Recurring Revenue Backlog as of June 30 2,3 FY20 Closed sales Guidance Range as of August 1st, 2019 Earnings Call.Recurring Revenue Backlog as of August 1st, 2019 Earnings Call and are Broadridge estimates and subject to revision.
Slide 13: Broadridge Business Model is Strong
Broadridge Business Model is Strong Sustainable Growth Large, recurring revenue base with good visibility aided by $330 million revenue backlogOrganic strength driven by large addressable market Steady Margin Expansion Continued scale and operational leverageFocus on operational efficiencies Strong
Slide 14: Driving Next-Gen Regulatory Communications
Driving next-gen regulatory communicationsStrengthening digital products to enhance regulatory and other communications30e-3 and Enhanced Content opportunitiesBlockchain proxy capabilityfor North American market Growing data & analytics suite Broadening corporate issuer solution setBuilding omni-cha
Slide 15: Three Year Growth Objectives
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 15 © 2019 | Note: FY17 - FY20 three year Adjusted EPS growth objective up
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 2021Working with 130+ fund familiesFinancial impact: higher recurring fee revenues, lower distribution revenues, modestly net positive impact
Slide 17: Supplemental Reporting Detail - Product Line Reporting
Supplemental Reporting Detail - Product Line Reporting Note: Amounts may not sum due to rounding. 17 © 2019 |
Slide 18: Fiscal Year 2019 Financial Summary
Fiscal Year 2019 Financial Summary as of August 1st 2019 Earnings Call: 18 © 2019 |
Slide 19: Highlights
Highlights 19 © 2019 | Strong fiscal year 2019 resultsRecurring fee revenues up 6% to $2.8 billion, Diluted EPS growth up 14% and Adjusted EPS up 11% to $4.66Record Closed sales of $233 million, up 9%Ongoing investments in new products and M&A expected to strengthen and grow our business11% annual d
Slide 20: Fiscal Year 2019 Revenue Growth Drivers
Fiscal Year 2019 Revenue Growth Drivers Fiscal year 2019 Recurring fee revenues grew 6% to $2.8 billionOrganic Growth: 5% $4,330M $4,362M (1) pt. (1) pt. (1) pt. Fiscal Year 2019 Total revenues grew 1% to $4.4 billion+3 pts. +1% $2,610M $2,759M +6% +6 pts. 20 © 2019 | +1 pt. +1 pt. (3) pts. Notes:(1
Slide 21: FY 2019 Segment Results (Reported and ASC 606)
FY 2019 Segment Results (Reported and ASC 606) FY18Dollars in millions FY19 Growth Reported ASC 606 Reported Reported ASC 606 Investor Communication Solutions Recurring Fee Revenues $ 1,699 $ 1,700 $ 1,806 6 % 6 % Event-Driven Fee Revenues 284 282 244 (14 )% (13 )% Distribution Revenues 1,513 1,523
Slide 22: Fiscal Year 2019 Operating Income and EPS
Fiscal Year 2019 Operating Income and EPS Dollars 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 +8% 22 © 2019 | +9% +11% +14%
Slide 23: Fiscal Year 2020 Guidance
Fiscal Year 2020 Guidance (as of August 1, 2019) 23 © 2019 | As of August 1, 2019 Recurring fee revenue growth 8 - 10% Total revenue growth 3 - 6% Operating income margin - GAAP ~15% Adjusted Operating income margin - Non-GAAP ~18% Diluted earnings per share growth1 5 - 9% Adjusted earnings per shar
Slide 24: Appendix
Appendix i Broadridge: ©2019; 24
Slide 25: Tax Act and Excess Tax Benefit Impact
Tax Act and Excess Tax Benefit ("ETB") Impact 4Q FY 2020 Dollars in millions 2018 2019 2018 2019 FYIndicative Earnings before income taxes $258.0 $230.0 $561.0 $607.3 Provision for income taxes (excluding ETB and non-recurring gains and charges) $74.2 $56.9 $158.6 $144.5 Net Tax Charges (0.7) — 15.4
Slide 26: FY2018 Total Revenues: Impact of ASC 606
FY2018 Total Revenues: Impact of ASC 6062018 Dollars 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 ) (17.4 ) (18.6 ) (
Slide 27: GAAP Reconciliations
GAAP Reconciliations 27 © 2019 |
Slide 28: Dollars in millions Fiscal Year 2019 2018 Operating income (GAAP) $ 652.7 $ 598.1
Dollars in millions Fiscal Year 2019 2018 Operating income (GAAP) $ 652.7 $ 598.1 Adjustments: Amortization of Acquired Intangibles and Purchased Intellectual Property 87.4 81.4 Acquisition and Integration Costs 6.4 8.8 Adjusted Operating income (Non-GAAP) $ 746.5 $ 688.2 Operating income margin (GA
Slide 29: Note: Amounts may not sum due to rounding. )) Dollars in millions, except per
Note: Amounts may not sum due to rounding. 29 © 2019 | )) Dollars in millions, except per share amounts Fiscal Year 2019 2018 Diluted earnings per share (GAAP) $ 4.06 $ 3.56 Adjustments: Amortization of Acquired Intangibles and Purchased Intellectual Property 0.74 0.68 Acquisition and Integration Co
Slide 30: Reconciliation of GAAP to Non-GAAP Measures
Reconciliation of GAAP to Non-GAAP Measures(Unaudited) Three Months Ended Fiscal Year Dollars in millions Sept. 30, 2017 Dec. 31, 2017 March 31, 2018 June 30 , 2018 2018 Total Revenues $ 924.8 $ 1,012.8 $ 1,071.9 $ 1,320.4 $ 4,329.9 ASC 606 Accounting Impact (a) 59.1 (65.2 ) 136.3 (122.5 ) 7.7 ASC 6
Slide 31: FY20 Adjusted Earnings Per Share Growth Rate
FY20 Adjusted Earnings Per Share Growth Rate (a) Diluted earnings per share (GAAP) 5% - 9% Adjusted earnings per share (Non-GAAP) 8% - 12% FY20 Adjusted Operating Income Margin (b) Operating income margin % (GAAP) ~15% Adjusted Operating income margin % (Non-GAAP) ~18% 31 © 2019 | Adjusted earnings
Slide 32: Broadridge Investor Relations Contacts
Broadridge Investor Relations Contacts 32 © 2019 | W. Edings ThibaultTel: 516-472-5129Email: edings.thibault@broadridge.comJames UllenesTel: 516-472-5016Email: james.ullenes@broadridge.com
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