Broadridge Financial Solutions, Inc. · NYSE:BR
Broadridge Financial Solutions — Investor Presentation (December 2018)
29 slides from Broadridge Financial Solutions's investor presentation, Dec 10, 2018
Slide 1: Investor Presentation December 2018
EXHIBIT 99.1 INVESTOR PRESENTATION DECEMBER 2018
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 Financial Solutions, Inc. ("Broadridge" or the "Company") may contain “forward‐looking statements” within the meaning of the Private Securities Litigation Reform
Slide 3: Use of Non-GAAP Financial Measures
Use of Non‐GAAP Financial Measures Explanation and Reconciliation of the Company’s Use of Non‐GAAP Financial Measures The Company’s results in this presentation are presented in accordance with U.S. generally accepted accounting principles ("GAAP") except where otherwise noted. In certain circumstan
Slide 4: Broadridge is Ready For Next
Broadridge is Ready For Next Market dynamics driving strong growth for Broadridge’s technology‐driven solutions Proven strategy and experienced management team to drive sustainable growth Uniquely positioned to deliver network value and capture additional, large market opportunities Successful track
Slide 5: FY17-FY20 three year growth objectives
FY17 ‐ FY20 three year growth objectives Winning formula for top quartile TSR 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% Note: Compound annual growth rates (CAGRs), except margin. Three year Adj
Slide 6: Broadridge is a Fintech Leader
Broadridge is a Fintech Leader GOVERNANCE CAPITAL MARKETS WEALTH MANAGEMENT • Process 80% of outstanding • Clear and settle over $5T • Support 50M+ accounts shares in the United States, per day through our technology 50%+ for rest of world platform • Serve 18 of 23 US primary • Distribute 90%+ of br
Slide 7: Executing Against Investor Day Themes
Executing Against Investor Day Themes Extend Governance Drive Capital Markets Build Wealth Management • Driving next‐gen • Extending global post • Continued strong interest regulatory communications trade technology platform from key clients in 30e‐3 and Enhanced Continued progress integrated We
Slide 8: Broadridge platform-based business model creates unique value
Broadridge platform‐based business model creates unique value Deep financial services knowledge • Domain expertise • Trusted Multi‐client Network managed value • Unique Capability • Scale leadership services • Data & Analytics • Significant IP approach © 2018 | 8
Slide 9: UBS Joining Broadridge Wealth Platform
UBS Joining Broadridge Wealth Platform . Signing UBS as anchor client represents a major milestone in creating a Wealth Management franchise • Broadridge Wealth Platform will provide next‐gen mission critical infrastructure to wealth managers • Broadridge's platform will bring together capabilities
Slide 10: Broadridge's directly addressable market is $25-40B
Broadridge’s directly addressable market is $25‐40B Large Growth Opportunity Key Market Trends CAPITAL GOVERNANCE & MARKETS COMMUNICATIONS MUTUALIZATION $10‐15B $9‐13B DIGITIZATION $6‐12B DATA & ANALYTICS WEALTH MANAGEMENT 100% = $25‐40B © 2018 | 10
Slide 11: Business Update
Business Update . Closed sales of $18 million in first quarter •UBS deal expected to contribute meaningfully to FY2019 Closed sales . ICS Recurring fee revenues up 4% • Recurring fee revenue growth of 14% excluding Customer Communications driven by strong growth in mutual fund interims • Event‐drive
Slide 12: Fiscal Year 2019 Guidance
Fiscal Year 2019 Guidance* Recurring fee revenue growth 5 ‐ 7% Total revenue growth 3 ‐ 5% Operating income margin ‐ GAAP ~14.5% Adjusted Operating income margin ‐ Non‐GAAP ~16.5% Diluted earnings per share growth 12 ‐ 16% Adjusted earnings per share growth ‐ Non‐GAAP 9 ‐ 13% Free cash flow ‐ Non‐GA
Slide 13: 2Q FY2019 Estimated Revenue Ranges
2Q FY 2019 Estimated Revenue Ranges* 2Q FY2019 Estimated 2Q FY2018 Reported Ranges* Recurring fee revenue $562 million Increase 5‐7% Event‐driven revenue $97 million Decline (40‐50%) Total revenue $1,013 million Decline (3‐6%) FY15‐FY19 Event‐driven revenue by quarter $’s in millions Event‐driven re
Slide 14: Broadridge business model is strong
Broadridge business model is strong • Large, recurring revenue base with good visibility aided Sustainable Growth by $295 million revenue backlog • Organic strength driven by large addressable market Steady Margin • Continued scale and operational leverage Expansion • Focus on operational efficienci
Slide 15: Additional Revenue Information
Additional Revenue Information ADDITIONAL PRODUCT LINE REPORTING Quarter Ended September 30, % Fiscal Year Ended June 30, % $ in millions 2018 2017 Change 2018 2017 Change Investor Communication Solutions ("ICS") Equity proxy $31.0 $30.0 3% $406.8 $382.0 6% Mutual fund & ETF interims 57.8 49.2 17% 2
Slide 16: Fiscal Year 2018 and First Quarter 2019 Financial Summary
Fiscal Year 2018 and First Quarter 2019 Financial Summary: © 2018 | 16
Slide 17: Fiscal Year 2018 Revenue Growth Drivers
Fiscal Year 2018 Revenue Growth Drivers ▪ Fiscal Year 2018 Total revenues grew 5% to $4.3 billion +2% +4% 0% +5% ‐1% $4,330M $ 4,143M ▪ Fiscal Year 2018 Recurring fee revenues grew 6% to $2.6 billion Organic Growth: 5% +1% +6% +6% ‐3% +2% $2,610M $2,451M Note: Amounts may not sum due to rounding © 2
Slide 18: First Quarter 2019 Revenue Growth Drivers
First Quarter 2019 Revenue Growth Drivers ▪ First Quarter 2019 Total revenues grew 5% to $973 million +2% +1% +3% +5% 0% $973M $925M ▪ First Quarter 2019 Recurring fee revenues grew 5% to $575 million Organic Growth: 4% +7% 0% +1% +5% ‐3% ‐1% $575M $548M Note: Amounts may not sum due to rounding © 2
Slide 19: Record Sales Building Revenue Backlog
Record Sales Building Revenue Backlog $ in millions Year‐over‐Year Closed Sales Recurring Revenue Backlog as of Performance1 June 301,2 Total ~$295 +14% (1) Closed sales and Recurring Revenue Backlog are Broadridge estimates and subject to revision. (2) Recurring Revenue Backlog represents an estima
Slide 20: Fiscal Year 2018 GAAP and Adjusted Operating Income and Adjusted EPS
Fiscal Year 2018 GAAP and Adjusted Operating Income and Adjusted EPS $ in millions, except per share amounts Year‐over‐Year Change in Operating Income Year‐over‐Year Change in EPS and and Adjusted Operating Income Adjusted EPS +10% +34% +32% +12% © 2018 | 20
Slide 21: First Quarter 2019 GAAP and Adjusted Operating Income and Adjusted EPS
First Quarter 2019 GAAP and Adjusted Operating Income and Adjusted EPS $ in millions, except per share amounts Year‐over‐Year Change in Operating Income Year‐over‐Year Change in EPS and and Adjusted Operating Income Adjusted EPS +46% +15% +17% +52% © 2018 |
Slide 22: Appendix
Appendix: i Broadridge
Slide 23: Tax Act & ETB Impact
Tax Act & ETB Impact 2018 2019 2018 2019 FY 1Q 1Q FY $ in millions Outlook Earnings before income taxes $74.3 $89.3 $561.0 Provision for income taxes (Excluding ETB and non‐ recurring gains & charges) $26.0 $19.6 $158.6 Net Tax Charges — — 15.4 — Excess Tax Benefits "ETB" (1.5) (7.0) (40.9) ~(25) Pr
Slide 24: Pro Forma Accounting Change Impact to FY 2018 Recurring Revenues
Pro Forma Accounting Change Impact to FY 2018 Recurring Revenues 2018 $ in millions Q1 Q2 Q3 Q4 FY Recurring Fee Revenues As Reported ICS $ 332.9 $ 334.4 $ 403.5 $ 628.0 $ 1,698.9 GTO 214.9 228.0 235.2 233.5 911.6 Total Recurring Fee Revenues $ 547.8 $ 562.4 $ 638.6 $ 861.5 $ 2,610.4 % of FY Recurri
Slide 25: Pro Forma Accounting Change Impact to FY 2018 Total Revenues
Pro Forma Accounting Change Impact to FY 2018 Total Revenues 2018 $ 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
Slide 26: GAAP Reconciliations
GAAP Reconciliations © 2018 |
Slide 27: Reconciliation of GAAP to Non-GAAP Measures
Reconciliation of GAAP to Non‐GAAP Measures (Unaudited ‐ Note: Amounts may not sum due to rounding) $ in millions, except per share amounts Three Months Ended Sept. 30, Fiscal Year 2018 2017 2018 2017 Operating income (GAAP) $ 100.1 $ 85.2 $ 594.9 $ 531.6 Adjustments: Amortization of Acquired Intang
Slide 28: Reconciliation of GAAP to Non-GAAP Measures
Reconciliation of GAAP to Non‐GAAP Measures (Unaudited ‐ Note: Amounts may not sum due to rounding) Three Months Ended Sept. 30, Fiscal Year 2018 2017 2018 2017 Diluted earnings per share (GAAP) $ 0.64 $ 0.42 $ 3.56 $ 2.70 Adjustments: Amortization of Acquired Intangibles and Purchased Intellectual
Slide 29: Reconciliation of GAAP to Non-GAAP Measures - FY19 Guidance
Reconciliation of GAAP to Non‐GAAP Measures ‐ FY19 Guidance (Unaudited) Adjusted Earnings Per Share Growth Rate (1) Diluted earnings per share (GAAP) 12% ‐ 16% Adjusted earnings per share (Non‐GAAP) 9% ‐ 13% Adjusted Operating Income Margin (2) Operating income margin % (GAAP) ~14.5% Adjusted Operat
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