Broadridge Financial Solutions, Inc. · NYSE:BR
Broadridge Financial Solutions — Q2 2014 Earnings Presentation
23 slides from Broadridge Financial Solutions's earnings presentation, Feb 6, 2014
Slide 1: Earnings Webcast & Conference Call
Exhibit 99.2 Earnings Webcast & Conference Call Second Quarter 2014 © 2014 Broadridge Financial Solutions, Inc. Broadridge and the Broadridge logo are registered trademarks of Broadridge Financial Solutions, Inc. February 6, 2014
Slide 2: Forward-Looking Statements
Forward-Looking Statements This presentation and other written or oral statements made from time to time by ay belay gbige of Broadridge “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. Statements that ai not historical in nature, and which may
Slide 3: Today's Agenda
Today’s Agenda Opening Remarks Rich Daly, President and CEO Second Quarter and YTD 2014 Michael Liberatore, Highlights and Segment Results Acting Principal Financial Officer Summary Rich Daly, President and CEO Q&A Rich Daly, President and CEO Michael Liberatore, Acting Principal Financial Officer C
Slide 4: Financial Highlights
Financial Highlights Recurring revenue growth momentum continues Q2 Recurring revenue was up 9% (YTD 10%) Primarily due to Net New Business (closed sales less client losses) and internal growth Q2 Event-driven fees were flat (YTD were up $9M primarily from mutual fund proxy activities) Q2 Non-GAAP d
Slide 5: Closed Sales Performance
Closed Sales Performance Q2 Recurring revenue closed sales were up 13% (YTD 12%) Recurring revenue closed sales were $23M compared to $20M in the prior year (YTD $38M compared to $34M) Historically, first half closed sales of less than $5M contribute a lower amount than second half to the full year
Slide 6: Key Updates
Key Updates Current favorable market-based activities continue to positively impact internal growth Expect equity and Interim position growth to remain in a positive and stable range Trade volumes and Post-sale activity are less predictable and expect growth to continue for remainder of the year We
Slide 7: Key Financial Drivers
Key Financial Drivers 2Q 2Q YTD Actual FY14 FY14 FY14 FY13 Range Growth Drivers as a % of Recurring Revenue Closed Sales (Recurring) 7% 8% 6% 7% Client Losses (3%) (3%) (1%) (3%) Net New Business 4% 5% 5% 4% Internal Growth (a) 4% 4% (1%) 2-3% Organic Growth 8% 9% 4% 6-7% Acquisitions 1% 1% 0% 1% To
Slide 8: Segment Results & Forecast – Investor Communication Solutions
Segment Results & Forecast – Investor Communication Solutions Q2 and YTD recurring revenue growth driven by continued higher than expected internal growth from market-based activities (Interims and Post-sale) and expected Net New Business Raising full year recurring revenue guidance as favorable mar
Slide 9: Segment Results & Forecast – Securities Processing Solutions
Segment Results & Forecast – Securities Processing Solutions Revenue/Growth EBIT/Growth (Non-GAAP) Margin/Growth (Non-GAAP) Q2: $174M / 6% $35M / 73% 19.9% / 770 bps Q2 YTD: $343M / 8% $66M / 126% 19.3% / 1000 bps FY14: $687 to 695M / 4 to 5% $117 to 125M / 38 to 47% 17.0% to 18.0% / 410 to 510 bps
Slide 10: Summary
Summary Record first half diluted EPS with both segments contributing Recurring revenue continues to be strong led by Net New Business Recurring closed sales pipeline is very strong and growing Positive impact from favorable market-based activities Strong client revenue retention rate of 98% Raising
Slide 11: Q&A
Q&A There are no slides during this portion of the presentation 10
Slide 12: Closing Comments
Closing Comments There are no slides during this portion of the presentation 11
Slide 13: Appendix
12 Appendix Bg Broadridge
Slide 14: Segment Results & Forecast – Other & Foreign Exchange (FX)
Segment Results & Forecast – Other & Foreign Exchange (FX) Corporate Expenses: Increased full year guidance range as expenses are expected to be in line with growth in the business and increased strategic investments Interest Expense, net: Reflects higher interest rate from previous year due to refi
Slide 15: Broadridge Q2 and YTD FY14
Broadridge Q2 and YTD FY14 (a) FY13 Q2 excludes Restructuring Charges of $4M (after tax $2M, or $0.01 EPS impact). FY13 Q2 YTD excludes Restructuring Charges of $4M (after tax $3M, or $0.02 EPS impact). (b) Includes impacts of FX P&L and FX transaction activity. (c) Represents amortization charges a
Slide 16: Broadridge FY14 Guidance
Broadridge FY14 Guidance (a) FY13 excludes Restructuring and Impairment Charges, net of $20M (after tax $13M, or $0.10 EPS impact). (b) Includes impacts of FX P&L and FX Transaction Activity. (c) Represents amortization charges associated with intangible asset values as well as other deal costs asso
Slide 17: Cash Flow – YTD FY14 Results and FY14 Forecast
Cash Flow –YTD FY14 Results and FY14 Forecast Free Cash Flow - Non-GAAP Unaudited ($ millions) Six Months Ending FY14 Range (a) December 2013 Low High Free Cash Flow (Non-GAAP) : Net earnings from operations (GAAP) $ 72 $ 252 $ 265 Depreciation and amortization (includes other LT assets) 46 100 110
Slide 18: Recurring Revenue Closed Sales to Revenue Contribution
Recurring Revenue Closed Sales to Revenue Contribution (a) (b) ($ in millions) Closed Sales Revenue Contribution Backlog Forecast Forecast Forecast FY14 FY14 FY14 ICS (less than $5M deals) $60-70 ~$45-55 ~$60-70 ~Contribution to recurring revenue growth ~6% SPS (less than $5M deals) $30-40 ~$50-55 ~
Slide 19: Revenues and Closed Sales FY08-FY13
Revenues and Closed Sales FY08-FY13 (a) Includes reclassification of Pre-sale Fulfillment from event-driven revenues to recurring revenues. (b) Includes reclassification of Pre-sale Fulfillment related distribution revenues from event-driven distribution to recurring distribution and Matrix pass-thr
Slide 20: Reconciliation of Non-GAAP to GAAP Measures
Reconciliation of Non-GAAP to GAAP Measures Free Cash Flow - Non-GAAP Unaudited ($ millions) 19
Slide 21: ICS Key Segment Revenue Stats
ICS Key Segment Revenue Stats RC= Recurring Fee Revenues 2Q13 2Q14 YTD FY13 YTD FY14 Type ED= Event-Driven In millions Proxy Equities $ 25.3 $ 24.4 $ 50.9 $ 50.4 RC Stock Record Position Growth 4% 1% 1% 1% Pieces 20.8 20.0 41.1 41.5 Mutual Funds $ 9.1 $ 10.7 $ 15.6 $ 26.5 ED Pieces 15.4 15.5 23.6 35
Slide 22: SPS Key Segment Revenue Stats
SPS Key Segment Revenue Stats RC= Recurring ED= Event-Driven In millions 2Q13 2Q14 YTD FY13 YTD FY14 Type Equity Transaction-Based Equity Trades $ 31.1 $ 33.4 $ 61.1 $ 65.9 RC Internal Trade Volume 792 934 786 913 Internal Trade Growth -6% 18% -13% 16% Trade Volume (Average Trades per Day in '000) 8
Slide 23: Broadridge ICS Definitions
Broadridge ICS Definitions 22
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