Broadridge Financial Solutions, Inc. · NYSE:BR
Broadridge Financial Solutions — Investor Day (June 2011)
123 slides from Broadridge Financial Solutions's investor day presentation, Jun 22, 2011
Slide 1: Continued Market Leadership through Execution and Innovation
June 22, 2011 Continued Market Leadership through Execution and Innovation Investor Day © 2011 Broadridge Financial Solutions, Inc. Broadridge and the Broadridge logo are registered trademarks of Broadridge Financial Solutions, Inc. Exhibit 99.1
Slide 2: Introduction
June 22, 2011 Introduction Rick Rodick © 2011 Broadridge Financial Solutions, Inc. Broadridge and the Broadridge logo are registered trademarks of Broadridge Financial Solutions, Inc. Continued Market Leadership through Execution and Innovation
Slide 3: Agenda
Introduction Rick Rodick Vice President, Investor Relations 9:00 – 9:05 Opening Remarks Rich Daly Chief Executive Officer 9:05 – 9:20 Strategy Overview Tim Gokey Chief Development Officer 9:20 – 9:40 Bank/Broker-Dealer Communications (ICS) Bob Schifellite President, Investor Communication Solutions
Slide 4: 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, such as our fiscal year fi
Slide 5: Use of non-GAAP financial measures
Use of non-GAAP financial measures This presentation includes 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 measures provide in
Slide 6: Opening Remarks
June 22, 2011 Opening Remarks Rich Daly © 2011 Broadridge Financial Solutions, Inc. Broadridge and the Broadridge logo are registered trademarks of Broadridge Financial Solutions, Inc. Continued Market Leadership through Execution and Innovation
Slide 7: Broadridge is a strong, resilient business with significant growth potential
Broadridge is a strong, resilient business with significant growth potential History of market leadership – Proven ability to address increasingly complex customer needs through technology – Innovation and thought leader in industry for >40 years Strong position in large and attractive markets – Lea
Slide 8: Delivered TSR greater than S&P since spin-off
Delivered TSR greater than S&P 500 since spin-off Consistent shareholder returns through careful capital stewardship Strong expected Total Shareholder Return (TSR) over next three years through a balanced return model with low risk to investors – Mid-to-high single-digit revenue growth in current an
Slide 9: Broadridge delivered strong shareholder value through the financial crisis
Broadridge delivered strong shareholder value through the financial crisis We have led the industry in shareholder value creation through challenging times DST Systems -9.4 -6.3 Fidelity National -5.4 -0.4 Fiserv 3.6 Broad- ridge 6.2 Jack Henry 10.4 Annual TSR %, 2007–11 S&P 500 1.2% 1. TSR for Comp
Slide 10: Our market position is differentiated and sustainable
New businesses Revenue growth Returns and FCF Investor Communication Services Securities Processing Services Broadridge is well positioned to accelerate growth and continue driving significant free cash flow 1 Our market position is differentiated and sustainable 1. All metrics are for FY11 (forecas
Slide 11: We are the leader in several markets
Investor Communication Services Securities Processing Services We are the leader in several markets Market Rank Bank/Broker-Dealer Regulatory Communications Broker-Dealer Transactional Communications Corporate Issuer Regulatory Communications Mutual Fund Proxy Mail and Tabulation Market Rank US Brok
Slide 12: Our vision is clear
Our vision is clear Leading provider of investor communications and technology-driven solutions to broker-dealers, mutual funds, and corporate issuers globally
Slide 13: We are building a strong future
Continued strong financial discipline We are building a strong future Small-cap financial services outsourcing company with a strong position serving U.S. brokerage industry Leading provider of investor communications and technology-driven solutions to broker-dealers, mutual funds, and corporate iss
Slide 14: Focused on managing three pillars of value creation
Commitment to the Service Profit Chain Top quartile Total Shareholder Return Financial strategy Portfolio Operational excellence Leading market positions World-class operations and service Focused on managing three pillars of value creation Value-creating management of a complex portfolio Strong cas
Slide 15: In last four years we have strengthened our position and returned significant cash
In last four years we have strengthened our position, restructured our portfolio and returned significant cash Since spin-off, we have focused on the drivers of TSR TSR driver Key actions Portfolio Drive profitable growth Spending >$300M annually on technology Introduced >20 new products since spin-
Slide 16: Our future is bright, even assuming weak market environment continues
Next three years (FY11– FY14) Careful capital stewardship to deliver strong TSR Our future is bright, even assuming weak market environment continues Grow revenue by 6–9% Increase EBIT margins from ~13% to 17-19% Continue shareholder- friendly use of cash Top-quartile TSR Well-positioned for high si
Slide 17: Broadridge's investment thesis
ICS is a highly defensible, scalable and recession-resistant business with new growth opportunities SPS is a market share leader in mission-critical services with high client retention and emerging growth opportunities Industry trends becoming tailwinds instead of headwinds Broadridge is an emerging
Slide 18: Strategy Overview
June 22, 2011 Continued Market Leadership through Execution and Innovation Strategy Overview Tim Gokey © 2011 Broadridge Financial Solutions, Inc. Broadridge and the Broadridge logo are registered trademarks of Broadridge Financial Solutions, Inc.
Slide 19: Strategy discussion
Strategy discussion Large markets with favorable macro-trends Broadridge’s unique position Our evolving strategy
Slide 20: Large and attractive markets – Investor Communications is a $10B+ market
Mutual Fund—Core Retirement processing Data aggregation Marketing communications Proxy/solicitation Large and attractive markets – Investor Communications (ICS) is a $10B+ market BBD—Emerging products Global proxy and communications Tax reporting and outsourcing Security class actions Advisor servic
Slide 21: Technology and Operations (SPS) adds ~$14B to our addressable market
Sources: Tower Group, Chartis, Aite, IM2, Broadridge internal estimates Technology and Operations (SPS) adds ~$14B to our addressable market Securities and investment firms’ overall technology and operations spend is over $100 billion and growing at 5% $1.2B $2.8B ~$5.0B Examples Adjacent markets Mi
Slide 22: Favorable macro trends
Favorable macro trends Industry trends Implications for Broadridge Increasingly strict requirements are creating new demand for our services Broadridge’s content, connectivity, and unique channels create new competitive advantages Will drive higher margins over time Broadridge participates in market
Slide 23: Broadridge has built a uniquely advantaged position
Broadridge has built a uniquely advantaged position Indispensible information and transaction hub for financial services industry Deep, lasting client relationships driven by strong value proposition and excellent service Industry-leading platforms that enable scaling up in existing and new markets
Slide 24: Broadridge has a diverse client and revenue base
Broadridge has a diverse client and revenue base As normally described By who pays Broadridge as agent Brokers—Middle and Back Office Brokers— Communications Issuers Mutual Funds Total revenue percentage by client group, FY11 Brokers Issuers Mutual Funds
Slide 25: Our vision is clear
Our vision is clear Leading provider of investor communications and technology-driven solutions to broker-dealers, mutual funds, and corporate issuers globally
Slide 26: Multiple ways to win
Multiple ways to win Our strategy is to leverage our market role to expand our client relationships Reinforce role as the industry thought leader to lead e-transition Drive growth in adjacent markets through new organic or acquired solutions Grow core Bank/Broker-Dealer Communications Build leading
Slide 27: We will continue to strategically shape our business portfolio
Consistent with our commitment to shareholder-focused capital stewardship We will continue to strategically shape our business portfolio Acquisitions are another way of carrying out our growth strategy—they give us additional ways to win Prudent portfolio management philosophy with clear ownership l
Slide 28: Focused on tuck-in acquisitions that drive our strategy
Focused on tuck-in acquisitions that drive our strategy We have clear criteria for acquisitions Tightly linked to Broadridge’s strategic priorities Broadridge must be a natural owner Emphasis on leveraging Broadridge core assets Accretive to growth, margins, and earnings Revenue growth accretive Mar
Slide 29: Our M&A track record is strong overall
Acquisitions and divestitures are an important part of strategically managing our business 31% 19% 13% 23% Our M&A track record is strong overall Divested, freeing up $250M of shareholder capital Product Year acquired Revenue when acquired ($M) Revenue FY11E ($M) CAGR Impact <2 MBSE <1 Dataphile Acc
Slide 30: Why we are confident
Why we are confident Strong brand trusted by clients Unique market position with an extensive network of clients Deep industry expertise in core markets and natural adjacencies Brand Strength, 2010 Source: CoreBrand 89% 71% Favorable Impression Would Consider (Unaided)
Slide 31: Tangible progress against strategic focus areas
Tangible progress against strategic focus areas Positioned well on Concept Release, NYSE Pricing Review Created $15M+ EBIT opportunity with NewRiver, postage restructure Continued to implement MSSB Acquired Forefield; launched Advisor Mailbox and Mobile ProxyVote; initiated Volly Digital Mail partne
Slide 32: Conclusion
Conclusion Broadridge is well-positioned in large, attractive markets We have a clear strategy for growth Elements required for success are already in place We are making tangible progress
Slide 33: Financial Overview
Financial Overview Dan Sheldon June 22, 2011 © 2011 Broadridge Financial Solutions, Inc. Broadridge and the Broadridge logo are registered trademarks of Broadridge Financial Solutions, Inc. Continued Market Leadership through Execution and Innovation
Slide 34: We plan to deliver top-quartile TSR through FY14
Top-quartile Total Shareholder Return Financial strategy Portfolio Operational excellence 6–9% revenue growth Drive organic growth in current markets Exploit adjacent market opportunities Leverage economies of scale Further optimize infrastructure Generate strong FCF enabled by high ROIC Continue re
Slide 35: Broadridge expects mid-to-high single-digit revenue growth through FY14
Top-quartile Total Shareholder Return Portfolio Drive organic growth in current markets Exploit adjacent market opportunities Broadridge expects mid-to-high single- digit revenue growth through FY14 6–9% revenue growth 1. EBIT margins are expected to be ~13% in FY11 guidance and are expected to expa
Slide 36: Anticipated growth is recurring and highly sustainable
Anticipated growth is recurring and highly sustainable By FY14, we plan to grow recurring revenues by $300-600M FY14 estimate ~$2,500–2,800M FY11 guidance ~$2,200M Market growth Net new business Tuck-in acquisitions Note: New closed sales offset by increased e-deliveries. Numbers may not add up due
Slide 37: Driven by growth in traded securities
Driven by growth in traded securities 1–2% annual growth from increase in market volumes FY14 estimate ~$2,500–2,800M ~$70-130M FY11 guidance ~$2,200M +1–2% CAGR Recurring revenue Note: New closed sales offset by increased e-deliveries. Numbers may not add up due to rounding. Market growth
Slide 38: Driven by closed sales and client retention
Driven by closed sales and client retention 3–4% annual growth from net new business ~$200-300M ~$70-130M FY11 guidance ~$2,200M FY14 estimate ~$2,500–2,800M +1–2% +3–4% CAGR Recurring revenue Note: New closed sales offset by increased e-deliveries. Numbers may not add up due to rounding. Market gro
Slide 39: Driven by strategic tuck-in acquisitions
Driven by strategic tuck-in acquisitions Tuck-in acquisitions are anticipated to add 1–2% to annual growth FY14 estimate ~$2,500–2,800M ~$70–130M ~$200-300M ~$70-130M FY11 guidance ~$2,200M +1–2% +3–4% +1–2% CAGR Recurring revenue Note: New closed sales offset by increased e-deliveries. Numbers may
Slide 40: Total expected annual growth of 5–8% through FY14
=5–8% Total expected annual growth of 5–8% through FY14 from recurring FY14 estimate ~$2,500–2,800M ~$70–130M ~$200-300M ~$70-130M FY11 guidance ~$2,200M +1–2% +3–4% +1–2% CAGR Recurring revenue Note: New closed sales offset by increased e-deliveries. Numbers may not add up due to rounding. Market g
Slide 41: Event-driven revenue should provide additional opportunity
=5–8% =6–9% Primarily mutual fund activity (MF proxies) Event-driven should provide additional opportunity ~$200-300M ~$70-130M ~$2,200M FY11 guidance ~$70–130M FY14 estimate incl. event-driven ~$2,600–2,900M Event-driven FY14 estimate ~$70M ~$2,500–2,800M Potential upside +1–2% +3–4% +1–2% CAGR +~1
Slide 42: Margin expansion from ~13% to 17–19%
Top-quartile Total Shareholder Return Operational excellence Scale and key initiatives Leverage economies of scale Further optimize infrastructure Margin expansion from ~13% to 17–19% 1. EBIT margins are expected to be ~13% in FY11 guidance and are expected to expand to ~17-19% by FY14
Slide 43: By FY14 we plan to expand EBIT margin to ~17%
By FY14 we plan to expand EBIT margin to ~17% from recurring revenues 12.7–13.4% FY11 guidance FY14 estimate (recurring + key initiatives) 16.7–17.4% Economies of scale (core plus acquisitions) Key initiatives
Slide 44: Revenue growth leverages scale
Revenue growth leverages scale 120–150bps margin improvement due to growth under economies of scale FY14 estimate (recurring) FY11 guidance 13.9–14.9% Economies of scale (core plus acquisitions) FY14 estimate (recurring + key initiatives) 12.7–13.4% 120–150bps 16.7–17.4% 3–4% CAGR
Slide 45: Implementation of IBM, Penson, MSSB & restructuring
Implementation of IBM, Penson, MSSB & restructuring Additional 250-280bps margin expansion from implementation of current projects Key initiatives 250–280bps FY14 estimate (recurring) 13.9–14.9% FY14 estimate (recurring + key initiatives) 16.7–17.4% 12.7–13.4% Economies of scale (core plus acquisiti
Slide 46: Total EBIT margin improvement of ~400bps by FY14
=9–10% Total EBIT margin improvement of ~400bps by FY14 before event-driven FY14 estimate (recurring + key initiatives) 16.7–17.4% Key initiatives 250–280bps FY14 estimate (recurring) 13.9–14.9% Economies of scale (core plus acquisitions) 120–150bps FY11 guidance 12.7–13.4% +6% 3–4% CAGR
Slide 47: Further potential upside from event-driven revenues
=9–10% =11–13% Further potential upside from event-driven revenues 12.7–13.4% Key initiatives 17.6-18.9% Event-driven 250–280bps FY14 estimate (recurring) 90–150bps FY14 estimate (recurring + key initiatives) 13.9–14.9% Economies of scale (core plus acquisitions) 120–150bps FY11 guidance 16.7–17.4%
Slide 48: By FY14 cash generation planned to expand
By FY14 cash generation planned to expand to $270-315M, plus $20–40M event-driven $290-355M Event-driven $20–40M FY14 FCF estimate (non-GAAP) $270-315M Core operations (recurring revenue) $55-100M Key initiatives and restructuring ~$45M FY11 FCF guidance (non-GAAP) ~$170M FY14 FCF estimate (non- GAA
Slide 49: Financial strategy
Top-quartile Total Shareholder Return Financial strategy Financial strategy Generate strong FCF enabled by high ROIC Continue returning large share of FCF to shareholders 35% payout that currently yields 2–3%, plus buybacks 1. EBIT margins are expected to be ~13% in FY11 guidance and are expected to
Slide 50: Focus on prudent capital stewardship
Focus on prudent capital stewardship Since spin-off, we have reduced “spin debt” and returned capital Change in cash Dividends Freed-up capital FCF (non- GAAP) 1,099 Capex Cash flow from operations (GAAP) 1,292 Use of cash FY07–11, $M 1. Gross buy-backs of $509 less proceeds from stock option exerci
Slide 51: Our financial strategy is a key part of our value creation strategy
Our financial strategy is a key part of our value creation strategy 35% dividend payout, but no less than 60 cents per share Organic growth with limited financial risk – Avoid significant balance sheet risk – Invest in projects delivering at least 20% IRR Tuck-in acquisitions with clear growth profi
Slide 52: Broadridge's TSR math through FY14
1-2% tuck-in acquisitions 3-4% organic growth 1-2% market growth 6-9% revenue growth ~1% event-driven growth Broadridge's TSR math through FY14 Top-quartile TSR 17–22% earnings growth 2–3% dividend yield, plus buybacks Free cash flow 120-150bps recurring margin improvement (3-4% CAGR) 250-280bps mar
Slide 53: Financial summary
Financial summary Clear focus on shareholder value – Driving all TSR levers – growth, margins and FCF Strong and disciplined capital stewardship Maintain healthy balance sheet
Slide 54: Appendix
Appendix
Slide 55: Reconciliation of non-GAAP to GAAP measures
Reconciliation of non-GAAP to GAAP measures Period Cash flow from Operations (GAAP), $M CapEx and Purchases of Intangibles, $M Free Cash Flow (non-GAAP), $M Q4 2007 FY2008 FY2009 FY2010 FY2011 est. Total 1,292 1,099 Note: Numbers may not add up due to rounding
Slide 56: Bank/Broker-Dealer Communications (ICS)
June 22, 2011 Bank/Broker-Dealer Communications (ICS) Bob Schifellite © 2011 Broadridge Financial Solutions, Inc. Broadridge and the Broadridge logo are registered trademarks of Broadridge Financial Solutions, Inc. Continued Market Leadership through Execution and Innovation
Slide 57: Broadridge simplifies complex processes
Broadridge simplifies complex processes Our clients have complex communication and transaction processing needs Bank/broker-dealers Corporate issuers Individual investors Mutual funds Institutional investors
Slide 58: Broadridge connects the financial services industry
Broadridge connects the financial services industry Bank/broker-dealers Corporate issuers Mutual funds Institutional investors Broadridge is the transaction and information hub for the financial industry Individual investors
Slide 59: What we do
Regulatory communications – Beneficial proxy, interims, etc. for equities – Beneficial mutual fund compliance communications Customer communications – Transaction statements, trade confirmations and other reporting Global and emerging products – Advisor services – Global proxy and communications – T
Slide 60: Deeply penetrated in core businesses with large growth potential
Deeply penetrated in core businesses with large growth potential in emerging and adjacent markets $1.3B Total Bank/Broker-Dealer market >$4B fee revenue Emerging and global communication products Advisor services Global proxy and communications Tax reporting and outsourcing Securities class actions
Slide 61: Our unique competitive advantage
Our unique competitive advantage Strong market position—indispensible data hub connecting Bank and Broker–Dealers (BBDs) to thousands of issuers/mutual funds and 100+ million shareholders Thought leadership leading to numerous innovations – First/only certified voting results – First e-delivery, pho
Slide 62: Our growth strategy
1 2 3 4 Our growth strategy Lead in a changing corporate governance environment to drive industry benefit and new revenue Leverage unique multi-channel capabilities (e.g. content, compliance, connectivity, delivery channels) to drive new growth Build on our success in our core markets to expand our
Slide 63: SEC's recent Concept Release
1 SEC's recent Concept Release comments have confirmed current proxy approach works well Regulatory change will drive new opportunities – Enhanced broker Internet platforms e.g., Investor Mailbox – End-to-end vote confirmation – Client-directed voting – Strong push to increase retail vote participat
Slide 64: Broadridge is well-positioned in the pricing review
1 Broadridge is well-positioned in the pricing review Broadridge technology enabled nearly 7% annual cost savings for issuers (~45% overall decrease) vs. Regulated beneficial vs. unregulated registered prices Total issuer cost per position Prices in unregulated (registered) market are nearly 3x the
Slide 65: Regulatory changes create new opportunities
1 Regulatory changes create new opportunities Regulations are increasingly making the process more complex We continue to offer solutions to meet the new regulatory complexities – Notice and Access – Say-when-on-pay – Access to the Proxy (proposed) Leverage technology to increase investor vote parti
Slide 66: Drive multi-channel and e-solutions across the business
2 rd Drive multi-channel and e-solutions across the business Create aligned value proposition for clients and investors through better content in the format desired Leverage unique multi-channel capabilities (e.g. content, compliance, connectivity, delivery channels) to drive new growth Enhance clie
Slide 67: Drive growth in emerging products and global services
Market opportunity > $900M 3 Drive growth in emerging products and global services Build on Global Proxy to develop a broader global business serving Banks, Brokers and Issuers (e.g. Tokyo Stock Exchange, Euroclear) Drive a portfolio of emerging products for banks, brokers and advisors ~24% CAGR
Slide 68: Grow Customer Communications business
4 Grow Customer Communications business Complete on-boarding of Morgan Stanley Smith Barney Leverage our multi-channel capabilities to bridge migration to electronic channels and provide better investor experience Expand scope of current product set with enhanced capabilities – Digital data manageme
Slide 69: Continued market leadership
Continued market leadership Strong position in current regulated markets Well-positioned for "e"-leadership Market momentum in emerging and global products FY11 guidance ~$1,570M FY14 estimate ~$1,350M ~5% CAGR Revenue
Slide 70: Appendix
Appendix
Slide 71: Key terminology: Registered vs. beneficial shareholders
Key terminology: Registered vs. beneficial shareholders A registered shareholder holds shares directly in their name, in certificate or book-entry form, and is listed on the records of a corporation as owner of the corporation's stock A beneficial shareholder holds the shares of a corporation in the
Slide 72: Mutual Fund Solutions (ICS)
June 22, 2011 Mutual Fund Solutions (ICS) Gerry Scavelli © 2011 Broadridge Financial Solutions, Inc. Broadridge and the Broadridge logo are registered trademarks of Broadridge Financial Solutions, Inc. Continued Market Leadership through Execution and Innovation
Slide 73: What we do
Mutual Fund trade processing in the defined contribution/trust space (Matrix) Data aggregation and analytics (Access Data) Marketing/Regulatory communications including content (NewRiver) Registered proxy and solicitation What we do Service relationships with every mutual fund Market intelligence fo
Slide 74: Strong progress in the last three years
Strong progress in the last three years Major wins: BlackRock, iShares, State Street SPDR, Invesco PowerShares Dec-2008 Reorganization of ICS into BBD and Mutual Funds May-2009 Access Data acquisition Jan-2011 Matrix Acquisition Oct-2010 Market Intelligence ETF client wins represent > 90% of all ETF
Slide 75: Large and growing underlying market
Large and growing underlying market Source: Aite —Q4 2010, ICI 8.4 Non-retirement Retirement 3.4 7.2 11.8 5.0 4.6 Mutual fund and ETF assets, $T ~7% CAGR
Slide 76: Addressable Mutual Fund market ~$3.5B fee revenue
Fund processing/ transfer agent 3rd party mutual fund spend on support services ~$115B Current Broadridge's target market ~$3.5B $50B $45B $7B Investment management Distribution and underwriting $0.6B Marketing communications Retirement processing Data aggregation Proxy / solicitation ~$0.1B Address
Slide 77: Broadridge connects the financial services industry
Broadridge connects the financial services industry Bank/broker-dealers Corporate issuers Mutual funds Institutional investors Broadridge is the transaction and information hub for the financial industry Individual investors
Slide 78: Our unique competitive advantage
Our unique competitive advantage Long-standing relationships across industry Serve every mutual fund and majority of bank/broker-dealers Unique data capabilities Proprietary platform to allow mutual funds to understand their clients Innovative business applications that address unique industry issue
Slide 79: Create the leading data-driven mutual fund solutions provider
Create the leading data-driven mutual fund solutions provider 1 2 3 4 Our growth strategy Drive retirement fund transaction processing Grow data aggregation, management and reporting services Leverage Investor Communications product set and scale for mutual funds Increase market share in mutual fund
Slide 80: Drive retirement fund transaction processing
Leverage Broadridge relationships, processes and sales organization 1 Drive retirement fund transaction processing Automated processing Same-day market portal Single net settlement Reduced cost Improved accuracy Data hub & processing engine Matrix overview 1. Assets Under Administration Over 130 Thi
Slide 81: Growing retirement assets
1 Growing retirement assets Recurring contributions Convert in-house processors to BR platforms and/or services Matrix's unique growth opportunities 1. TPA = Third-Party Administrator Capture new plans within existing 401(k) clients Leverage BBD relationships with Open Architecture, RetireToolkit Ca
Slide 82: Open architecture retirement plan example
1 Chosen by dozens of brokerage, advisory and banking institutions to service and grow their open architecture retirement plan businesses Create unique benefits for Bank/Broker-Dealers and their F/A’s Model is readily expandable to other Bank/Broker-Dealers Brokerage example: Open Architecture and R
Slide 83: Grow data aggregation, management and reporting services
2 ICS hub Access Data rules engine Broker 1 Broker 2 Broker 3 Broker 4 Broker 5 Broker 6 Fund 1 Fund 2 Fund 3 Fund 4 Fund 5 Fund 6 Broker 1 Broker 2 Broker 3 Broker 4 Broker 5 Broker 6 Fund 1 Fund 2 Fund 3 Fund 4 Fund 5 Fund 6 Market intelligence Sales reporting Wholesaler/distributor compensation 2
Slide 84: Access Data's unique growth opportunities
2 Leverage ICS connectivity to enable unique data- driven capabilities (e.g. market intelligence, sales reporting, compliance, etc.) Industry Hub for distribution payments and fee processing at new levels of trust and accuracy New market for Access Data Charles Schwab relationship Cross-selling oppo
Slide 85: Charles Schwab example
2 Today – Access Data acquisition (2009) 540+ Client runway via Schwab Charles Schwab example Exclusive data aggregator co-branded with Schwab to service marketplace fund complexes Explicit authorization to provide core product set and services to 600 mutual fund complexes using Schwab's data for Sc
Slide 86: Leverage Investor Communications product set and scale for mutual funds
3 Leverage Investor Communications product set and scale for mutual funds Apply existing Bank/Broker-Dealer products to mutual funds – Marketing materials – Statements – Confirms – Prospectuses Develop new products for mutual funds – Department of Labor – Fee Disclosure – Summary Prospectus
Slide 87: Increase market share in mutual fund proxy/solicitation
4 Increase market share in mutual fund proxy/solicitation Leverage our innovative Optimal Proxy solution – Scientific approach – Enhanced shareholder experience – Cost efficiency Increase market share in annuity space – Annuity Partner Solutions
Slide 88: Leading data-driven mutual fund solutions provider: growth ambition
Leading data-driven mutual fund solutions provider Our growth ambition Established client relationships Unique data capabilities ICS products and scale Strong positions in niche markets Revenue ~23% CAGR ~$60M in FY09 ~$160M ~$370M FY11 guidance with Matrix annualized FY14 estimate
Slide 89: Corporate Issuer Solutions (ICS)
June 22, 2011 Corporate Issuer Solutions (ICS) Bob Schifellite © 2011 Broadridge Financial Solutions, Inc. Broadridge and the Broadridge logo are registered trademarks of Broadridge Financial Solutions, Inc. Continued Market Leadership through Execution and Innovation
Slide 90: Broadridge connects the financial services industry
Broadridge connects the financial services industry Bank/broker-dealers Corporate issuers Mutual funds Institutional investors Broadridge is the transaction and information hub for the financial industry Individual investors
Slide 91: What we do
Beneficial proxy service Registered shareholder communications – Registered proxy – Interim communications Transfer agency (TA) – Stock share registry, ownership transfers, dividend calculation, etc. Enhanced issuer solutions – Shareholder analytics – Virtual shareholder meetings – Shareholder forum
Slide 92: Large attractive Corporate Issuer market
Large attractive Corporate Issuer market Investor communications Shareholder forums Virtual shareholder meetings IR websites Solicitation Other Other adjacencies Entity management Board services Exchange listing services, etc. Shareholder data/analytics Issuer analytics Ownership data Targeting, etc
Slide 93: Our unique competitive advantage
Our unique competitive advantage Market Position – only full service provider of shareholder communications to all shareholders Relationships – relationships with and connectivity to virtually every US broker–dealer create a unique network that facilitates shareholder communications and intelligence
Slide 94: Our growth strategy
Our growth strategy Leverage strong beneficial proxy service relationships Continue to take share in registered proxy market Build a leading transfer agency business by transforming industry Scale new enhanced and global issuer solutions
Slide 95: Leverage strong beneficial proxy service relationships
1 Leverage strong beneficial proxy service relationships %=“Very Well Known”/ “Familiar” %=“Strongly Favorable”/ “Somewhat Favorable” %= the number of Broadridge mentions Source: Broadridge Brand Study – Corebrand
Slide 96: Continue to take share in registered proxy market
2 Continue to take share in registered proxy market Number of registered proxy clients 20% CAGR Our proven success Future growth drivers Offer unique consolidated processing and reporting – Combines beneficial and registered services – Helps our clients significantly streamline their operations Prov
Slide 97: Build a leading transfer agency business by transforming the industry
3 Build a leading transfer agency business by transforming the industry Number of TA clients • Serve and communicate with all shareholders • Leverage our infrastructure and scale to be the most cost-effective provider of TA services • Drive shareholder migration from registered to street to further
Slide 98: Scale new enhanced and global issuer solutions
4 Scale new enhanced and global issuer solutions Analytics – Notice and Access analytics – Stratified mailings – Investor preferences, etc. Enhanced Meeting Services – Shareholder Forums – Virtual Shareholder Meetings Global Services – Serve top nine global custodians – Proxy share representation ap
Slide 99: Our growth ambition
Our growth ambition Large market Unique position Strong recent progress ~29% CAGR $14 M in FY07 Revenue
Slide 100: BB Broadridge’
BB Broadridge’
Slide 101: Key definitions
Key definitions A beneficial shareholder holds the shares of a corporation in the name of a broker/dealer, custodian, or bank nominee but enjoys the same benefits of ownership that a registered shareholder would have A registered shareholder holds shares directly in their name, in certificate or boo
Slide 102: Global Technology and Operations Solutions (SPS)
June 22, 2011 Global Technology and Operations Solutions (SPS) John Hogan © 2011 Broadridge Financial Solutions, Inc. Broadridge and the Broadridge logo are registered trademarks of Broadridge Financial Solutions, Inc. Continued Market Leadership through Execution and Innovation
Slide 103: How the investor experiences securities processing
Commercial How the investor experiences securities processing
Slide 104: Broadridge simplifies complex processes
Client Set-up Validation & Confirmation Clearing and Settlement Asset Servicing Broadridge simplifies complex processes Transaction Capture/ Execution Investor account set up on system Investor initiates order to buy securities Confirmation of all trade details produced for investor and selling brok
Slide 105: Best-of-breed securities processing solutions
Best-of-breed securities processing solutions – Leading global platform – Broad asset class coverage Broad suite of add-on or point solutions – Desk top applications used by brokers and traders – Workflow and reconciliation applications – Data aggregation and warehousing tools Industry-leading globa
Slide 106: Underlying asset markets are growing
Underlying asset markets are growing Average equity transactions per day on major US exchanges Global equity market capitalization (M) 17% CAGR ($T) 6% CAGR Asia EMEA Americas We serve healthy underlying asset markets with strong long-term growth in transactions and asset values Source: World federa
Slide 107: Large Technology and Operations (SPS) opportunity
$1.2B Sources: Tower Group, Chartis, Aite, IM2, Broadridge internal estimates Large Technology and Operations (SPS) opportunity Securities and investment firms’ overall technology and operations spend is over $100 billion and growing at 5% $2.8B ~$5.0B Examples Adjacent markets Middle-office (e.g. R
Slide 108: Why we win: Our competitive advantage
Why we win: Our competitive advantage
Slide 109: SPS well-positioned going forward
SPS well-positioned going forward SPS has been resilient through industry consolidation and challenges Over the past five years we have retained 13 of our top 15 customers (one lost due to a merger, and one due to bankruptcy) Over this period, there have been 9 M&A transactions where one or both par
Slide 110: SPS has a strong sales trajectory
SPS has a strong sales trajectory and will significantly benefit from BR's initiatives Over the past 3 years we have won 29 of 33 prospects who have switched their securities processing systems in North America Revenue back-log of ~$76M annualized, associated with 20 current or recently completed on
Slide 111: Five key strategies
1 2 3 4 5 Five key strategies Further grow core U.S. middle- and back-office solutions Grow platform and non-platform BPO globally Expand international business Pursue logical adjacencies that leverage our market position Improve margins across the business
Slide 112: Further grow core U.S. middle- and back-office solutions
1 On-board current client pipeline Leverage global capabilities to continue sales momentum Continue record of innovation and thought leadership Leverage IBM alliance Further grow core U.S. middle- and back- office solutions
Slide 113: Recent new client example: large international bank
1 Large international bank Institutional equities and fixed income Displacing current in-house solution Supporting institutional clients and high-frequency trading using a full suite of SPS technologies – Equities processing – Fixed income processing – Mortgage Backed Securities processing – Collate
Slide 114: Grow platform and non-platform BPO globally
2 Leverage our technology platform Leverage unique onshore and offshore “domain expertise” Provide high-value discrete solutions – Global – Fixed income – Reconciliations Work with IBM to sell Broadridge solutions to IBM client base Grow platform and non-platform BPO globally
Slide 115: Global processing for a major US retail brokerage
2 Global processing for a major US retail brokerage Solution enabling customers access to purchase and sell international securities in local currencies Seamlessly integrate with the client's in-house domestic solution Significant potential for additional organic expansion Recent new client example
Slide 116: Expand international business
3 Facilitate North American clients such as RBC, Scotia, State Street, BAML, etc. to expand into global markets and asset classes Accelerate providing North American market access to our Global clients/ prospects such as Nomura, Mizuho, Barclays etc. Further penetrate the recently acquired City Netw
Slide 117: Global Prime Brokerage
3 Global Prime Brokerage International equities and fixed income securities Following the acquisition of the Lehman European prime brokerage business, Nomura needed to rapidly create a new processing solution Leveraged the flexibility of our international platforms and implemented the client's books
Slide 118: Exploring targeted opportunities in near-adjacent markets
4 Exploring targeted opportunities in near-adjacent markets where we can leverage our existing capabilities and relationships Pursue logical adjacencies that leverage our market position • Middle-office • Buy-side services • Derivative processing • Fixed-income data and analytics
Slide 119: Recent adjacent market expansion example
4 Acquisition increased Broadridge's middle-office capabilities (reconciliations, multi-asset process automation, operational risk management) Accelerates Broadridge's international growth, bringing over 400 new relationships in 40 countries Extends growing range of solutions and competencies to exi
Slide 120: Complete migration of data center from ADP to IBM
5 Complete migration of data center from ADP to IBM Reduce complexity and increase scale by consolidating broker and investor desk top applications over the next two years Migrate clients on our legacy U.S. centric processing solution to our global solution over the next two years Fully leverage the
Slide 121: Our market leadership and growth ambition
Our market leadership and growth ambition Leverage unique and sustainable geographic and asset class position as markets “globalize” Strong momentum in core business Further penetrate global outsourcing (BPO) market Continued thought leadership and innovation FY11 guidance ~$760M FY14 estimate ~$600
Slide 122: Closing Remarks
June 22, 2011 Closing Remarks Rich Daly Continued Market Leadership through Execution and Innovation © 2011 Broadridge Financial Solutions, Inc. Broadridge and the Broadridge logo are registered trademarks of Broadridge Financial Solutions, Inc.
Slide 123: Broadridge's investment thesis
ICS is a highly defensible, scalable and recession-resistant business with new growth opportunities SPS is a market share leader in mission-critical services with high client retention and emerging growth opportunities Industry trends becoming tailwinds instead of headwinds Broadridge is an emerging
Broadridge Financial Solutions — Investor Day (June 2011) on 6ix