Slide 1: ADP Earnings Call & Webcast Q3 Fiscal 2020
ADP Earnings Call & Webcast Q3 Fiscal 2020 April 29, 2020 Copyright © 2020 ADP, LLC
Slide 2: Forward Looking Statements
Forward Looking Statements This document and other written or oral statements made from time to time by ADP may contain “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. Statements that are not historical in nature and which may be identified by
Slide 3: CEO's Perspective
CEO’s Perspective Solid third quarter and momentum prior to COVID-19 COVID-19 Response and Near-term Impacts Our Associates Our Clients Our Financials • Successful Business Resiliency Plan • Significantly elevated call volume • Significant impact to ES New execution • Clients seeking guidance and su
Slide 4: Q3 Fiscal 2020 Financial Highlights
Q3 Fiscal 2020 Financial Highlights (unaudited) Total Revenues Adjusted EBIT (a) Adjusted Diluted EPS (a) h 6% h 8% h 8% h 6% Organic Constant Currency (a) $1.1B $4.0B $1.0B $1.92 $3.8B $1.77 Q3 FY19 Q3 FY20 Q3 FY19 Q3 FY20 Q3 FY19 Q3 FY20 (a) For a reconciliation of these non-GAAP financial metrics
Slide 5: Employer Services Segment Results
Q3 Fiscal 2020 Employer Services Segment Results (unaudited) ES Revenues ES Margin Q3 Highlights h 3% h 100bps • Revenue growth and margin expansion in line with expectations h 4% Organic Constant Currency (a) • Retention above expectations and $2.8B 35.4% 36.5% $2.7B guidance range in Q3 and YTD •
Slide 6: PEO Services Segment Results
Q3 Fiscal 2020 PEO Services Segment Results (unaudited) PEO Revenues PEO Margin Q3 Highlights h 11% h 10bps • Acceleration in Average WSE growth and revenue in Q3 following strong sales results year-to-date $1.1B $1.2B 13.9% 13.9% • ADP Indemnity full year expectation for 75 bps of pressure, from 50
Slide 7: Macro Assumptions for the Remainder of the Year
Macro Assumptions for the Remainder of the Year (unaudited) Macro Driver Current Observation Q4 Assumption No major uptick, Elevated level of Out-of-Business but seeing leading indicators out-of-business losses Down double-digits; Pays Per Control Down mid-teens most severe in downmarket Client Fund
Slide 8: Fiscal 2020 Outlook
Fiscal 2020 Outlook Fiscal 2019 July 31, 2019 October 30, 2019 January 29, 2020 April 29, 2020 (a) Revised , Fiscal 2020 Fiscal 2020 Fiscal 2020 Fiscal 2020 (b) (b) (b) (b) unaudited Outlook Outlook Outlook Outlook Revenues $14,110M h 6 - 7% h 6 - 7% h 6% h3% (c) Adj. EBIT Margin 22.4% h 100 - 125 b
Slide 9: Appendix: Client Funds Investment Strategy Detail
Appendix: Client Funds Investment Strategy Detail Fiscal 2020 Outlook Average Balance ($) Average Yield Interest ($) Client Short ~4.9B ~1.2% 50 - 60M Client Extended ~11.1B ~2.1% 235M Client Long ~9.8B ~2.6% ~255M Total Client Funds (a) ~25.8B ~2.1% 540 - 550M Corporate Extended Interest Income (b)