Broadridge Financial Solutions, Inc. · NYSE:BR
Broadridge Financial Solutions — J.P. Morgan 2009 SMid Cap Conference
33 slides from Broadridge Financial Solutions's conference presentation, Dec 2, 2009
Slide 1: J.P. Morgan 2009 SMid Cap Conference Presentation
Exhibit 99.1 Broadridge Financial Solutions, Inc. J.P. Morgan 2009 SMid Cap Conference Presentation Richard J. Daly Chief Executive Officer December 2009
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: Use of Material Contained Herein
Use of Material Contained Herein The information contained in this presentation is being provided for your convenience and information only. This information is accurate as of the date of its initial presentation. If you plan to use this information for any purpose, verification of its continued acc
Slide 4: Presentation of Certain Financial Information
Presentation of Certain Financial Information This presentation may include certain Non-GAAP (generally accepted accounting principles) financial measures in describing Broadridge’s performance. Management believes that such Non-GAAP measures, when presented in conjunction with comparable GAAP measu
Slide 5: Agenda
Agenda Broadridge Overview and Summary Business Overview Business Expansion Strategy Overview Financial Overview Conclusion 5
Slide 6: Broadridge: Investment Thesis
Broadridge: Investment Thesis Market leader with high Approximately 80% client retention rates in recurring annual revenues driven by product innovation Highly experienced Generate management team very strong and Dependable mid-single-digit (averaging 14 years) revenue growth business focused on del
Slide 7: Broadridge: Free Cash Flow & Capital Allocation
Broadridge: Free Cash Flow & Capital Allocation •Doubled annual dividend Free Cash Flow (Non-GAAP)(1) Dividends from $0.28 to $0.56 per share for FY10, or ($ in millions) approximately 35% payout of FY09 GAAP net earnings $290 High: $270 •Authorized repurchase of Stock up to 10 million shares, or Re
Slide 8: Broadridge Mission
Broadridge Mission • Enable the financial services industry to achieve higher levels of performance by allowing firms to focus on their core business Increase • Help manage their regulatory compliance risk by improving Partner with Performance clients’ processing, Financial Institutions communicatio
Slide 9: Integrated Solutions Spanning the Investment Lifecycle
Integrated Solutions Spanning the Investment Lifecycle Across the Investment Trade Processing Asset investment Decision & Servicing lifecycle... (Pre-Trade) Books and Records (Post-Trade) ...Broadridge Welcome Kits New Accounts Processing Confirms Reporting Archival Proxy Statements Fulfillment touc
Slide 10: Resilient and Predictable Business Model
Resilient and Predictable Business Model A Market Leader Revenue Drivers with Recurring Revenue High Retention Rates Shareholder Positions Investor Communication Images and Pieces Solutions Processed Recurring Revenue (~80%) Securities Processing Fees (Trades Per Day) Processing Solutions Event- Dri
Slide 11: Business is Resilient in Changing Markets
Business is Resilient in Changing Markets Dow Jones Industrial Average Broadridge Net Revenues 14,000 $2,400 13,000 $2,200 Internet Bubble Financial 12,000 Impact Crisis $2,000 Stock Market 11,000 Rebounds $1,800 Decimalization of Trades 10,000 $1,600 9,000 $1,400 8,000 $1,200 7,000 $1,000 FY01 FY02
Slide 12: This is Broadridge
This is Broadridge BR FY09 Business Revenues (1) BR FY09 Business EBIT & Margins •We are a market leader in processing and distributing shareholder communications, and Securities Securities provider of choice for mission-critical Processing Processing securities processing solutions Businesses Busin
Slide 13: ICS Unique Business Systems Processing Model
ICS Unique Business Systems Processing Model Proxy and Interim processing system is the “plumbing” supporting the voting process for corporate governance (1) Represents Broadridge’s estimated total number of brokerage firms and banks in the U.S. and international markets (2) Represents Broadridge’s
Slide 14: ICS Product and Client Revenue Overview
ICS Product and Client Revenue Overview: We have a strong and diverse product …and we have deep and longstanding offering… client relationships ICS FY09 Product Revenues ICS FY09 Client Revenues Proxy $350M (23%) Bank/Broker- Distribution Dealer $757M (49%) $1,383M Interims (90%) $136M (9%) Primaril
Slide 15: Securities Processing & Outsourcing – Target Market Landscape
Securities Processing & Outsourcing –Target Market Landscape How Firms Clear Trades Self-Clearing Broker-Dealer Firms Trade Clearing Method #1 (Firms that clear trades directly through the DTC) Type of Self-Clearing Firms Traditional B/D Firms Clearing B/D Firms •Primarily clear trades for accounts
Slide 16: Broadridge - Revenue Summary for Penson Transaction
Broadridge - Revenue Summary for Penson Transaction Broadridge Broadridge Clearing & Outsourcing Before Penson Transaction Penson Clearing & Outsourcing After Penson Transaction Signs 10-Year BR Sells clearing Acquired Revenue - ~ $75M Outsourcing Contract Clearing Related Revenue client contracts 1
Slide 17: Broadridge's Simplified Securities Processing Model
Broadridge’s Simplified Securities Processing Model Outsourcing Securities Processing Self-Clearing with Ops. Clearing Third Party Clearing Self-Clearing with Outsourcing & Service Fully-Disclosed Clearing Clients Service Bureau Bureau Technology & Provided by Provided by Outsourced to Data Center B
Slide 18: Securities Processing Solutions Top Clients
Securities Processing Solutions Top 15 Clients Equity Processing Fixed Broadridge has faired well Top during the recent industry Income Clients consolidations and financial Retail Institutional Processing crisis Alliance Bernstein The top 15 SPS clients generate Bank of America/Merrill Lynch* approx
Slide 19: Business Expansion Strategy
Business Expansion Strategy Be Indispensable! We enable the financial services industry to achieve superior levels of performance through our passion to deliver Vision extraordinary value to our clients, shareholders, and associates Client Offer Leverage Margin Accelerate Retention New Industry Impr
Slide 20: Business Expansion Focus
Business Expansion Focus Closed Sales •Strong and growing pipeline with large (Fee Only $ in millions) Closed opportunities in all segments Event-Driven (ED) Recurring (RC) Sales •Winning a meaningful percentage of each year’s market-driven sales activity High: $205 •Growth in recurring closed sales
Slide 21: Financial Performance is Driven by Recurring Revenues
Financial Performance is Driven by Recurring Revenues Net Revenues Earnings Before Interest andTaxes as adjusted (1)(2) ($ in Millions) $2,149 $371 $347 $352 $483 $423 $487 $1,717 $304 $368 $275 $324 ` $1,651 $1,724 $1,726 $1,565 $1,393 FY05 FY06 FY07 FY08 FY09 FY05 FY06 FY07 FY08 FY09 Recurring Rev
Slide 22: Financial Guidance
Financial Guidance $ in millions (except EPS ) Actual Forecast (1) FY09 FY10 Net Revenues $2,149 $2,271 - $2,317 % growth -3% 6% to 8% (2) (3) Earning Before Interest & Taxes (Non-GAAP) $352 $348 - $371 % margin 16.4% 15.3% to 16.0% Earning Before Interest & Taxes (GAAP) $361 $316 - $339 % margin 16
Slide 23: Focused on Capital Stewardship and Long-Term Shareholder Value
Focused on Capital Stewardship and Long-Term Shareholder Value Mid-single-digit • Capitalize on fundamentals driving long-term market growth organic revenue • Invest in and drive new sales of existing solutions growth in the • Rollout new solutions to enable client efficiencies and facilitate client
Slide 24: Summary
Summary Broadridge is a dependable mid-single-digit revenue grower with a scalable business model providing opportunity for margin expansion We expect to continue to invest in our existing businesses and execute strategic acquisitions to generate mid to high single-digit average revenue growth We ex
Slide 25: Appendix
ee ee Appendix Appendix Ba Broadridge 25
Slide 26: Cash Flow (Non-GAAP) – 1Q10 and FY10 Forecast and GAAP Reconciliation
Cash Flow (Non-GAAP) – 1Q10 and FY10 Forecast and GAAP Reconciliation Unaudited (In millions) Three Months Ended FY10 Range(c) September 2009 Low High Ridge Clearing Core Financing Processing Broadridge Core Processing Activities Free Cash Flow (Non-GAAP) : Activities Activities (b) Total Earnings (
Slide 27: Historical Free Cash Flow Non-GAAP to GAAP Reconciliation
Historical Free Cash Flow Non-GAAP to GAAP Reconciliation Reconciliation of Non-GAAP to GAAP Measures Free Cash Flow ($ in millions) (Unaudited) FY06 FY07 FY08 FY09 Actual Actual Actual Actual Net cash flow provided by operating activities (GAAP) $ 426 $ 161 $ 482 $ 359 (a) Securities clearing activ
Slide 28: Broadridge FY10 Guidance
Broadridge FY10 Guidance Revenue ($ in millions) EBIT FY09 FY10 Range FY09 FY10 Range Actual Low High Actual Low High $1,531 $1,715 $1,737 ICS $249 $292 $309 -3% 12% 13% Growth % / Margin % 16.3% 17.0% 17.8% $534 $504 $515 SPS $143 $107 $118 4% -6% -4% Growth % / Margin % 26.7% 21.2% 22.9% $101 $82
Slide 29: Closed Sales-To-Revenue Overview
Closed Sales-To-Revenue Overview Closed Sales-To-Revenue General Conversion Time Frames Closed Sales-to-Revenue Conversion Segment Sales Categories General Time Frames Investor Communication Solutions Registered Mutual Fund Sales 1 to 6 Months Registered Equity Sales Issuer's Next Annual Meeting Tra
Slide 30: (1) These items represent fee revenues only and exclude distribution revenues which are set
(1) These items represent fee revenues only and exclude distribution revenues which are set out separately. The historical numbers have been adjusted to exclude distribution revenues (2) Other includes pieces of 18.6M for FY07, 12.6M for FY08 and 14.4M for FY09 primarily related to corporate actions
Slide 31: Broadridge SPS Key Statistics
Broadridge SPS Key Statistics RC= Recurring FY07 FY08 FY09 Type ED= Event-Driven Equity Transaction-Based Equity Trades $ 262.9 $ 261.5 $ 260.4 RC (1) (2) Trade Volume (Average Trades per Day in '000) 1,454 1,559 1,648 Non-Transaction Other Equity Services $ 172.9 $ 177.2 $ 191.7 RC Total Equity $ 4
Slide 32: Broadridge COS Key Statistics
Broadridge COS Key Statistics RC= Recurring ED= Event-Driven FY07 FY08 FY09 Type Clearing Net Interest Income (1) $ 30.9 $ 27.1 $ 13.0 RC Average Margin Debits $ 687.7 $ 898.3 $ 638.0 Clearing Fees/Other $ 39.4 $ 49.6 $ 63.3 RC Trade Volume (Average Trades per Day in '000) 33.6 47.5 63.8 Outsourcing
Slide 33: Broadridge ICS Definitions
Broadridge ICS Definitions 33
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