Broadridge Financial Solutions, Inc. · NYSE:BR

Broadridge Financial Solutions — 45th Annual JP Morgan TMT Investor Conference (May 2017)

29 slides from Broadridge Financial Solutions's conference presentation, May 24, 2017

  1. Slide 1: 45th Annual JP Morgan TMT Investor Conference May 24, 2017

    45th Annual JP Morgan TMT Investor Conference May 24, 2017

  2. Slide 2: Forward-Looking Statements

    1 © 2017 | 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 Litigat

  3. Slide 3: Use of Non-GAAP Financial Measures

    2 © 2017 | 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

  4. Slide 4: What is Broadridge?

    3 © 2017 | What is Broadridge? Unique Franchises with Ubiquitous Presence Growing and Predictable Revenues • 6% Revenue CAGR since FY2011 with 98% client revenue retention rate Strong Free Cash Flow • FY2016 CapEx:Revenue ratio of 2.6% Balanced Capital Allocation • 45% dividend payout ratio target a

  5. Slide 5: Broadridge's Unique Franchise in Financial Services

    4 © 2017 | Broadridge’s Unique Franchise in Financial Services 98% client revenue retention rate 50+ years of financial services experience of the top-101 global banks are our clients 10 #1 leading provider of U.S. beneficial proxy and prospectus, U.S. fixed income & Canadian equity processing Billi

  6. Slide 6: Strong and Predictable Business Model

    5 © 2017 | Strong and Predictable Business Model 98% client revenue retention rate Consistently high retention rate reflects the strength of our client relationships Long-term contracts Expanding portfolio of growth products Growth products contributing a growing % of revenue NACC acquisition should

  7. Slide 7: Broadridge Brings Technology Solutions to its Core Client Segments

    6 © 2017 | Broadridge Brings Technology Solutions to its Core Client Segments Capital Markets Wealth Management Asset Management Corporates Communications Processing Data & Analytics • 1,100 Banks & Broker-dealers • 6,700 Institutional Investors • 140,000,000 Individual Accounts • 100,000 Financial

  8. Slide 8: $24B Market Propelled By Key Market Trends

    7 © 2017 | $24B Market Propelled By Key Market Trends Current Addressable Market Key Market Trends $16B $8B Global Technology & Operations Investor Communication Solutions Mutualization Strong drive to standardize duplicative, non-differentiating industry capabilities Digitization Digital technologi

  9. Slide 9: Fiscal Year 2016 Total Revenues of $2.9 Billion

    8 © 2017 | Fiscal Year 2016 Total Revenues of $2.9 Billion FY 2016 Revenues by Type Recurring Fee Revenue Growth FY2011-FY2016 $0.9 29% $1.9 64% $0.2 7% Distribution Recurring Fees Event-Driven FY 2016 Revenues by Segment $2.2 75% $0.7 25% ICS GTO $ in billions FY 2011 FY 2012 FY 2013 FY 2014 FY 201

  10. Slide 10: ICS Revenue Breakdown and Growth Trends

    9 © 2017 | $1,647 $1,776 $1,881 $2,030 $2,220 $1,500 $1,600 $1,700 $1,800 $1,900 $2,000 $2,100 $2,200 $2,300 FY 2012 FY 2013 FY 2014 FY 2015 FY 2016 $ in millions ICS Revenue Breakdown and Growth Trends FY 2016 ICS Revenues of $2.22 billion1 Broad Client Base $864 39% $290 13% $321 14% $193 9% $353

  11. Slide 11: Customer Communications Combination Highlights

    10 © 2017 | Customer Communications Combination Highlights Compelling financial and strategic opportunities Compelling near term financial benefits Attractive medium term expansion opportunity Larger long term digital opportunity  Projected to be accretive to EPS and Adjusted EPS in FY 2017 (EPS ac

  12. Slide 12: GTO Revenue Breakdown and Growth Trends

    11 © 2017 | $642 $645 $681 $693 $738 $300 $400 $500 $600 $700 $800 $900 FY 2012 FY 2013 FY 2014 FY 2015 FY 2016 $ in millions GTO Revenue Breakdown and Growth Trends By Product1 Strong Market Position Clears and settles in over 70 countries Processes avg. of over $5 trillion in equity and fixed inco

  13. Slide 13: Executing Our Capital Stewardship Strategy To Enhance Shareholder Value

    12 © 2017 | $97 $203 $53 $538 $86 $97 $122 $137 $114 $192 $80 $240 $76 $167 $0 $100 $200 $300 $400 $500 $600 $700 $800 $900 FY 2013 FY 2014 FY 2015 FY 2016 9M 2017 Net Share Repurchase Dividends Acq / Inv. Pr io ri ty Executing Our Capital Stewardship Strategy To Enhance Shareholder Value Committed

  14. Slide 14: On Track to Achieve Three Year Financial Objectives

    13 © 2017 | FY15–FY17F FY16A FY17F* Recurring Fee Revenue Growth 7-10% 9% 29-31% Total Revenue Growth 5-7% 8% 43-45% Adjusted Operating Income Margin +50-60bps/yr. 18.5% ~15% Adjusted Earnings Growth 9-11% 8% 12-17% On Track to Achieve Three Year Financial Objectives* 3-Year CAGR * As of May 10, 201

  15. Slide 15: Fiscal Year 2017 Guidance as of 5/10/17

    14 © 2017 | Fiscal Year 2017 Guidance as of 5/10/17* Recurring fee revenue growth 29 - 31% Expected to be at lower end of range Total revenue growth 40 - 42% Expected to be at upper end of range Adjusted Operating income margin - Non-GAAP ~15% Diluted earnings per share growth 2 - 7% Adjusted earnin

  16. Slide 16: Sustainable Growth, Operational Excellence, and Sound Capital Deployment Drive Performance

    15 © 2017 | Sustainable Growth, Operational Excellence, and Sound Capital Deployment Drive Performance • Drive organic growth in current markets • Exploit adjacencies 7–10% Recurring Fee 3-Year CAGR (FY14–FY17F) Sustainable Growth • Realize efficiencies • Increase operational leverage Consistent Mar

  17. Slide 17: Broadridge Third Quarter and First Nine Months Fiscal Year 2017 Highlights

    Broadridge Third Quarter and First Nine Months Fiscal Year 2017 Highlights

  18. Slide 18: Third Quarter 2017 Summary

    17 © 2017 | Third Quarter 2017 Summary  Strong financial results o Total revenues rose 46% and recurring fee revenues rose 30% o Operating income rose 9% and Diluted EPS was up 21% o Adjusted Operating income rose 22% and Adjusted EPS was up 19%  Record Closed sales up 66% o Record YTD Closed sale

  19. Slide 19: Business Update

    18 © 2017 | Business Update  Broad momentum across both GTO and ICS o Mid-single digit growth from Net New Business o Broad product breadth driving growth  Stock position growth at 6% in third quarter - on track for another year of mid-single digit growth  Stronger mutual fund position growth in

  20. Slide 20: 3Q 2017 Revenue Growth Drivers

    19 © 2017 | 3Q 2017 Revenue Growth Drivers ▪ Third Quarter 2017 Recurring fee revenue grew 30% to $592 million ▪ Third Quarter 2017 Total revenue grew 46% to $1,009 million $1,009 M +20% +2% +25% 0% $689 M $455 M $592 M +7% -2% -1% +26% +30% +46% Organic Growth: 4%

  21. Slide 21: Nine Months 2017 Revenue Growth Drivers

    20 © 2017 | Nine Months 2017 Revenue Growth Drivers ▪ Nine Months 2017 Recurring fee revenue grew 32% to $1.6 billion ▪ Nine Months 2017 Total revenue grew 45% to $2.8 billion $2.8 B +21% -1% +26% -1% $1.9 B $1.2 B $1.6 B +7% -2% 0% +27% +32% +45% Organic Growth: 5%

  22. Slide 22: Third Quarter 2017 Operating Income and EPS Comparison

    21 © 2017 | Third Quarter 2017 Operating Income and EPS Comparison $ in millions, except per share amounts 3Q17 Change in Operating Income and Adjusted Operating Income 3Q 2017 Change in EPS and Adjusted EPS 19% 22% 9% 21%

  23. Slide 23: Nine Months Fiscal Year 2017 Operating Income and EPS Comparison

    22 © 2017 | Nine Months Fiscal Year 2017 Operating Income and EPS Comparison $ in millions, except per share amounts 9 Months Fiscal 2017 Change in Operating Income and Adjusted Operating Income 9 Months Fiscal 2017 Change in EPS and Adjusted EPS 12% 16% 2% 2%

  24. Slide 24: Segment Results

    23 © 2017 | ($ in millions) Investor Communication Solutions ("ICS") Q3 2016 Q3 2017 Change 9M 2016 9M 2017 Change Recurring fee revenues $263 $389 48% $698 $1,053 51% Total revenues $515 $826 60% $1,417 $2,259 59% Earnings before income taxes $67 $74 10% $147 $125 (15)% Pre-tax margins 13.0 % 8.9 %

  25. Slide 25: Capital Allocation and Summary Balance Sheet

    24 © 2017 | Capital Allocation and Summary Balance Sheet Select Uses of Cash in 3Q 2017 • $37 million in capital expenditures and software investment • $20 million* to acquire Message Automation • $100 million to acquire BR shares Summary Balance Sheet as of March 31, 2017 Assets Cash and equivalent

  26. Slide 26: Closing Summary

    25 © 2017 | Closing Summary  On pace for another "Broadridge year" o Expecting 5-7% revenue growth excluding impact of NACC o Expecting double digit growth in Adjusted EPS  Balanced capital allocation enables internal investment o Investments have aligned Broadridge with key industry growth trends

  27. Slide 27: GAAP Reconciliations

    26 © 2017 | GAAP Reconciliations

  28. Slide 28: Reconciliation of GAAP to Non-GAAP Measures

    27 © 2017 | Reconciliation of GAAP to Non-GAAP Measures $ in millions, except per share figures Three Months Ended March 31, Nine Months Ended March 31, 2017 2016 2017 2016 Operating income (GAAP) $ 109.7 $ 100.6 $ 234.6 $ 229.9 Adjustments: Amortization of Acquired Intangibles and Purchased Intelle

  29. Slide 29: Reconciliation of GAAP to Non-GAAP Measures - FY17 Guidance

    28 © 2017 | Reconciliation of GAAP to Non-GAAP Measures - FY17 Guidance (Unaudited) Adjusted Earnings Per Share Growth Rate (1) Diluted earnings per share (GAAP) 2% - 7% Adjusted earnings per share (Non-GAAP) 12% - 17% Adjusted Operating Income Margin (2) Operating income margin % (GAAP) ~13% Adjust

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