Slide 1: 2Q Fiscal 2018 ADP Earnings Call & Webcast
2Q Fiscal 2018 ADP Earnings Call & Webcast January 31, 2018 Copyright © 2018 ADP, LLC.
Slide 2: Forward Looking Statements
Forward Looking Statements This presentation 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 identifie
Slide 3: CEO's Perspective
CEO’s Perspective • Solid second quarter revenue growth of 8% with adjusted diluted EPS growth of 14% in the quarter • Positive contribution to EPS growth from corporate tax reform • New Business Bookings growth of 6% • Continued investments in innovation, service, and distribution • Subsequent to q
Slide 4: 2Q Fiscal 2018 Financial Highlights
2Q Fiscal 2018 Financial HighlightsAdjusted Diluted EPS Adjusted Earnings before Interest and Total Revenues (unaudited) Taxes (EBIT) (unaudited) (a) (b) (unaudited) (a) $3.2B $0.99 $3.0B $0.6B $0.6B 8% Reported 2% $0.87 14% 7% Organic (c) (a) “Adjusted Earnings before Interest and Taxes (EBIT)” and
Slide 5: 2Q Fiscal 2018 New Business Bookings and Segment Results
2Q Fiscal 2018 New Business Bookings and Segment Results Worldwide New Employer Services PEO Services Business Bookings • h 6% compared with Q2 FY17 • Revenues h 6% Reported • Revenues h 15% representing annualized h 4% Organic (a) • Average worksite employees paid recurring revenues anticipated h 1
Slide 6: Fiscal 2018 Outlook
Fiscal 2018 Outlook Revenues % Margin Adjusted Diluted EPS (b) h 7% - 8% Reported (a) Adjusted EBIT Margin (b) h 12% - 13% ES Revenue h 4% - 5% (a) ~50 basis points PEO Revenue h 12% - 13% ES Margin 75 - 50 basis points PEO Margin Flat to 25 basis points Worldwide New Adjusted Effectiv
Slide 7: Appendix
Appendix 7 Copyright © 2018 ADP, LLC.
Slide 8: Client Funds Portfolio Extended Investment Strategy
Client Funds Portfolio Extended Investment Strategy • Average Client Funds Balances h 4% to 5% FY18 Forecast from $23.0 billion in FY17 compared to the prior Average Client Funds Average Yield forecast of h ~3% Balance Interest Client Short ~$4.7B ~1.2% ~$55M • Yield on the Client Funds Portfolio h
Slide 9: GAAP Reconciliations
GAAP Reconciliations In addition to our GAAP results, we use the adjusted results and other non-GAAP metrics set forth in the table below to evaluate our operating performance in the absence of certain items and for planning and forecasting of future periods: Adjusted Financial Measure U.S. GAAP Mea
Slide 10: GAAP Reconciliations
GAAP Reconciliations ($ in millions, except per share data) % Change 2Q FY18 2Q FY17 As Reported Constant Dollar Net earnings $467.5 $510.9 (8%) (9%) Provision for income taxes 98.2 275.3 All other interest expense (a) 15.0 14.9 All other interest income (a) (4.4) (4.4) Gain on sale of business - (2
Slide 11: Fiscal 2018 Outlook - GAAP Reconciliations
Fiscal 2018 Outlook - GAAP Reconciliations ($ in millions) Twelve Months Ended Fiscal 2018 June 30, 2017 Forecast Earnings before income taxes / margin (GAAP) $2,531.1 20.4% ~(200)bps All other interest expense (a) 59.3 +50bps - All other interest income (a) (22.4) (20)bps - Gain on sale of business
Slide 12: Fiscal 2018 Outlook - GAAP Reconciliations
Fiscal 2018 Outlook - GAAP Reconciliations Twelve Months Ended Fiscal 2018 June 30, 2017 Forecast Diluted EPS (GAAP) $3.85 18% 8% - 9% Gain on sale of business – 2Q F17 (a) (0.27) (7%) ~ +7% Workforce Optimization Effort – 4Q F17 (b) (0.01) (0%) ~ +0% Service Alignment Initiative – F17 (c) 0.12 +3%
Slide 13: ADP Fiscal 2018 Guidance History
ADP Fiscal 2018 Guidance History (a) (b) 1/31/18 Forecast 11/2/17 Forecast 7/27/17 Forecast (c) Total ADP Revenues h 7% - 8% Reported h 6% - 8% Reported h 5% - 6% Reported (d) Adj. EBIT Margin ~ 50 bps 50 - 25 bps 50 - 25 bps (d) Adj. Effective Tax Rate Decline to 26.9% h Increase to 31.7% h