Broadridge Financial Solutions, Inc. · NYSE:BR

Broadridge Financial Solutions — Investor Presentation (May 2023)

44 slides from Broadridge Financial Solutions's investor presentation, May 15, 2023

  1. Slide 1: Scaling a Global Fintech Leader

    0© 2023 | Scaling a Global Fintech Leader Investor Presentation May 2023 EXHIBIT 99.1

  2. Slide 2: Forward-Looking Statements

    1© 2023 | This presentation and other written or oral statements made from time to time by representatives of Broadridge Financial Solutions, Inc. ("Broadridge" or the "Company") contains “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. Stateme

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

    2© 2023 | Use of Non-GAAP Financial Measures This presentation includes certain Non-GAAP financial measures including Adjusted Operating income, Adjusted Operating income margin, Adjusted Net earnings, Adjusted earnings per share (“EPS”), Free cash flow, Free cash flow conversion, and Recurring reve

  4. Slide 4: A clear path for long term growth

    3© 2023 | A clear path for long term growth A global Fintech leader addressing a large and growing market Three franchise businesses executing on clear growth strategies grounded in long term trends Long track record delivering consistent growth and strong total shareholder returns 2014 Invest for G

  5. Slide 5: Broadridge is a global Fintech leader

    4© 2023 | Broadridge is a global Fintech leader Managing proxy voting for 750M equity shareholder positions Powering $9T per day in fixed income and equity trades Distributing more than 7B critical communications each year 750 MILLION $9 TRILLION 7 BILLION Broadridge powers the critical infrastructu

  6. Slide 6: $60 billion and growing market opportunity

    5© 2023 | Technology and operations spend by global banks is over $190 Billion Broadridge has a $60 billion and growing market opportunity $60B CURRENT OPPORTUNITY $22B GOVERNANCE $23B CAPITAL MARKETS $16B WEALTH

  7. Slide 7: Three strong growing franchises with $3.7 billion in Recurring revenue

    6© 2023 | Capital Markets $903M Recurring Revenue 14% Average Annual Growth Wealth & Investment Management $550M Recurring Revenue 11% Average Annual Growth Governance $2.3B Recurring Revenue 8% Average Annual Growth $3.7B FY’22 RECURRING REVENUE Three strong growing franchises with $3.7 billion in

  8. Slide 8: The Broadridge financial model

    7© 2023 | The Broadridge financial model is focused on driving steady revenue growth and consistent earnings per share growth, generated by: Continued margin expansion from our scale and operational efficiencies Balanced capital allocation leveraging our strong free cash flow businesses Investments

  9. Slide 9: Strong track record of delivering growth and value

    8© 2023 | $4.19 $4.66 $5.03 $5.66 $6.46 2.5 3.5 4.5 5.5 6.5 7.5 1000 1500 2000 2500 3000 3500 4000 FY'18 FY'19 FY'20 FY'21 FY'22 Recurring revenue growth Adjusted EPS Strong track record of delivering growth and value $M except for per share measures 10% Recurring revenue average annual growth 11% A

  10. Slide 10: Consistent margin expansion

    9© 2023 | 13.8% 15.0% 13.8% 13.6% 13.3% Consistent margin expansion Note: Information about our use of Non-GAAP measures and a reconciliation to closest GAAP measures may be found on slides 33 - 41 15.9% 17.1% 17.5% FY'18 FY'19 FY'20 FY'21 FY'22 +120 bps +40 bps +60 bps Efficiency Contributions from

  11. Slide 11: Track record of delivering consistent growth and strong TSR

    10© 2023 | Track record of delivering consistent growth and strong TSR FY’14 – FY’17 (CAGR) FY’17 – FY’20 (CAGR) Three-year Growth Objectives (CAGR) FY’20 – FY’23 Organic Recurring revenue growth1 5% 5% 5-7% Recurring revenue growth 7%2 7% 7-9% Adj. Operating Income Margin expansion (bps/ year) (Non

  12. Slide 12: Investor Communication Solutions Segment Overview

    11© 2023 | Investor Communication Solutions SEGMENT OVERVIEW

  13. Slide 13: ICS Strategy

    12© 2023 | ICS Strategy Extend our strong and growing Governance franchise Grow End-to-End Issuer Solutions Build Data-Driven Fund Solutions Drive Next-Gen Regulatory Transform Omni-Channel Communications A leader at the heart of a powerful governance network Recurring revenues of $2.3B and average

  14. Slide 14: Our network links investors, asset managers, and issuers

    13© 2023 | Our network links investors, asset managers, and issuers across North America 170M+ Retail shareholder accounts 120,000+ Institutional shareholders 30,000+ Mutual funds and ETFs ISSUERS OF SECURITIES SHAREHOLDERS 200,000+ Financial advisors 9,000+ Corporate issuers REGULATORY BODIES & TRA

  15. Slide 15: Key volume drivers: position and trade volume growth

    14© 2023 | 1% 2% 8% 7% 3% 8% 11% 6% 10% 26% 18% 9% 11% 11% 8% 4% 4% 10% 9% 2% 10% 14% FY'12 FY'13 FY'14 FY'15 FY'16 FY'17 FY'18 FY'19 FY'20 FY'21 FY'22 Equity MF/ETF ITG EQUITY & MUTUAL FUND/ETF POSITION GROWTH Key volume drivers: position and trade volume growth 1% (4)% 8% 3% 2% 3% 13% 6% 9% 12% 1%

  16. Slide 16: The importance of corporate governance continues to grow

    15© 2023 | The importance of corporate governance continues to grow Technology is driving increased participation and diversification for retail investors New technologies are lowering the cost of investing and bringing in new investors.  ETFs  Managed Accounts  Zero commission trading  Enhanced

  17. Slide 17: ICS segment overview

    16© 2023 | ICS segment overview FY'18 FY'19 FY'20 FY'21 FY'22 8% ICS FISCAL YEAR RECURRING REVENUES $615 $216 $364 $1,075 FY'21 FY'22 +11% $2,270 YoY Growth +15% +6% +14% 8% Regulatory Customer Communications Data-Driven Fund Solutions Issuer Avg. Annual Growth 4% 7% 6% $2.3B11% 11%

  18. Slide 18: Global Technology and Operations Segment Overview

    17© 2023 | Global Technology and Operations SEGMENT OVERVIEW

  19. Slide 19: GTO fiscal year recurring revenues

    18© 2023 | $701M $558M GTO FISCAL YEAR RECURRING REVENUES $550 $903 FY'21 FY'22 $1,452 +39% +5% YoY Growth FY'18 FY'19 FY'20 FY'21 FY'22 Wealth & Investment Management Capital Markets 18% 4%10% 24%13% Avg. Annual Growth $1.5B GTO Strategy: Grow Capital Markets franchise and continue building next-ge

  20. Slide 20: Capital Markets overview

    19© 2023 | Capital Markets overview 1. In equity and fixed income trades processed on average per day • A global leader in post-trade processing for cash securities • Continued growth driven by evolution of global banks • Launching AI-powered fixed income trading platform • Itiviti adds strength, sc

  21. Slide 21: Itiviti acquisition is delivering value for Broadridge

    20© 2023 | Itiviti (BTCS) acquisition is delivering value for Broadridge 1 Significantly strengthen Capital Markets franchise  Deepening relationships at key clients  Enhancing liquidity, market making, and trade processing across trade lifecycle  Developing capabilities to drive front-to-back so

  22. Slide 22: Wealth & Investment Management overview

    21© 2023 | • Leading provider of back-office capabilities • Strong set of differentiated component solutions for front- and middle-office • Launching the industry’s only unified front-to-back technology platform • Growing Integrated Investment Management Suite Wealth & Investment Management overview

  23. Slide 23: Fiscal third quarter 2023 summary

    22© 2023 | Fiscal third quarter 2023 summary

  24. Slide 24: Key messages as of May 2, 2023 earnings call

    23© 2023 | Key messages as of May 2, 2023 earnings call Broadridge delivered strong third quarter results, including 9% growth in Recurring revenue constant currency, 10% growth in Adjusted Operating income, 6% growth in Adjusted EPS, and increased Free cash flow 1 2 3 4 Broadridge poised to deliver

  25. Slide 25: Summary financial results

    24© 2023 | Summary financial results THIRD QUARTER $ in millions, except per share data 2023 2022 Inc./(Dec.) Recurring revenues $1,082 $1,003 8% Total revenues 1,646 1,534 7% Operating income 287 246 17% Adjusted Operating income – Non-GAAP 345 313 10% Diluted earnings per share $1.67 $1.49 12% Adj

  26. Slide 26: Third quarter 2023 segment Recurring revenues

    25© 2023 | $143 $246 Q3'22 Q3'23 $188 $58 $102 $346 Q3'22 Q3'23 Regulatory Customer Comms. Data-Driven Fund Solutions Issuer 25% 10% 14% 8% ICS RECURRING REVENUES GTO RECURRING REVENUES Third quarter 2023 segment Recurring revenues $693 Capital Markets Wealth & Investment Management $388 5% 10% +11%

  27. Slide 27: Key volume drivers: position and trade growth

    26© 2023 | INTERNAL TRADE GROWTH (6)% 8% 6% 5% 1% ITG 17% 17% 9% 9% 10%10% 10% 11% 6% 6% Q3'22 Q4'22 Q1'23 Q2'23 Q3'23 EQUITY & MUTUAL FUND/ETF POSITION GROWTH Key volume drivers: position and trade growth 1. Q3’22 equity position growth represented 29% of total fiscal year 2022 positions. Q1’22: 7%

  28. Slide 28: Third quarter 2023 Total revenue growth drivers

    27© 2023 | $59 $70 $63 $38 $52 Q3'22 Q4'22 Q1'23 Q2'23 Q3'23 Q3'22 Total Revenue Recurring Event-Driven Distribution FX Q3'23 Total Revenue Third quarter 2023 Total revenue growth drivers QUARTERLY EVENT-DRIVEN REVENUE 5 pts (0) pts 3 pts 7% THIRD QUARTER 2023 TOTAL REVENUE GROWTH DRIVERS $58M FY’16

  29. Slide 29: Closed sales

    28© 2023 | FY'21 FY'22 FY'23 Guidance $231 $280 Closed sales $ in millions CLOSED SALES YTD'22 YTD'23 $169 $156 Near low end of $270 – $310

  30. Slide 30: Client platform spend and FCF conversion

    29© 2023 | Client platform spend and FCF conversion 1. Net investments on new client conversions, including development of platform capabilities 2. Last twelve months (LTM) Free cash flow conversion equals Free cash flow for the most recent four quarters divided by Adjusted Net earnings for the same

  31. Slide 31: Capital allocation

    30© 2023 | TOTAL CAPITAL RETURNS $1.94 $2.16 $2.30 $2.56 $2.90 33% 11% 6% 11% 13% DIVIDENDS PER SHARE M&A Client Platform Investments CapEx and Software Capital allocation 2 1. Includes Software purchases and capitalized internal use software 2. Net investments on new client conversions, including d

  32. Slide 32: Fiscal Year 2023 Guidance

    31© 2023 | Fiscal Year 2023 Guidance as of May 2, 2023 Prior FY’23 Guidance Updates/ Changes Recurring revenue growth constant currency - Non-GAAP 6 - 9% Higher end Adjusted Operating income margin - Non-GAAP Increase of ~ 50 bps No Change Adjusted earnings per share growth - Non-GAAP 7 - 11% No Cha

  33. Slide 33: FY20-FY23 growth objectives performance

    32© 2023 | INVESTOR DAY FY20-FY23 GROWTH OBJECTIVES FY20-FY23 CAGR PERFORMANCE Organic Recurring revenue growth 5 – 7% Above Recurring revenue growth 7 – 9% Above Adjusted Operating income margin – Non-GAAP 50+ bps/yr In line Adjusted earnings per share growth – Non-GAAP 8 – 12% Higher end Broadridg

  34. Slide 34: Explanation of Non-GAAP measures and Reconciliation

    33© 2023 | Explanation of Non-GAAP measures and Reconciliation of GAAP to Non-GAAP measures

  35. Slide 35: Non-GAAP measures explanation

    34© 2023 | Non-GAAP 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 circumstances, r

  36. Slide 36: Non-GAAP measures explanation continued

    35© 2023 | We exclude Acquisition and Integration Costs, IBM Private Cloud Charges, Real Estate Realignment and Covid-19 Related Expenses, Investment Gains, Russia- Related Exit Costs, the Software Charge, and Loss (Gain) on Acquisition-Related Financial Instrument and the Gain on Sale of a Joint Ve

  37. Slide 37: Adjusted operating income reconciliation

    36© 2023 | Confidential and Proprietary | Year ended June 30, Dollars in millions 2022 2021 2020 2019 2018 2017 2016 2015 2014 Operating Income (GAAP) $759.9 $678.7 $624.9 $652.7 $598.1 $534.0 $502.3 $468.5 $418.3 Adjustments: Amortization of acquired intangibles and purchased intellectual property

  38. Slide 38: Adjusted earnings per share reconciliation

    37© 2023 | Confidential and Proprietary | (Unaudited) Year ended June 30, Dollars in millions, except per share amounts 2022 2021 2020 2019 2018 2017 2016 2015 2014 Diluted earnings per share (GAAP) $4.55 $4.65 $3.95 $4.06 $3.56 $2.70 $2.53 $2.32 $2.12 Adjustments: Amortization of acquired intangibl

  39. Slide 39: Reconciliation of GAAP to Non-GAAP Measures

    38© 2023 | Confidential and Proprietary | Reconciliation of GAAP to Non-GAAP Measures (Unaudited) Global Technology and Operations Capital Markets Wealth and Investment Management Total Recurring revenue growth (GAAP) 2% 7% 4% Impact of foreign currency exchange 3% 2% 3% Recurring revenue growth con

  40. Slide 40: Reconciliation of GAAP to Non-GAAP Measures

    39© 2023 | Confidential and Proprietary | Reconciliation of GAAP to Non-GAAP Measures (Unaudited) Global Technology and Operations Capital Markets Wealth and Investment Management Total Recurring revenue growth (GAAP) 5% 2% 4% Impact of foreign currency exchange 5% 2% 4% Recurring revenue growth con

  41. Slide 41: Reconciliation of GAAP to Non-GAAP Measures

    40© 2023 | Confidential and Proprietary | Reconciliation of GAAP to Non-GAAP Measures (Unaudited) (a) Real Estate Realignment Expenses impacted Adjusted earnings per share by $0.01 and less than $0.01 for the three and nine months ended March 31, 2022, respectively. Covid-19 Related Expenses impacte

  42. Slide 42: Reconciliation of GAAP to Non-GAAP Measures

    41© 2023 | Confidential and Proprietary | Reconciliation of GAAP to Non-GAAP Measures (Unaudited) (a) Last twelve months (LTM) sums the last four quarters of free cash flow for the given period (b) Last twelve months (LTM) sums the last four quarters of adjusted net earnings for the given period (c)

  43. Slide 43: Reconciliation: Fiscal Year 2023 Guidance

    42© 2023 | Confidential and Proprietary | Reconciliation of GAAP to Non-GAAP Measures: Fiscal Year 2023 Guidance Fiscal Year, 2023 FY23 Recurring revenue growth (a) Impact of foreign currency exchange – Recurring revenue growth constant currency – Non-GAAP 6-9% FY23 Adjusted Operating income margin

  44. Slide 44: Broadridge Investor Relations Contacts

    43© 2023 | W. Edings Thibault Greg Faje Sean Silva broadridgeir@broadridge.com Broadridge Investor Relations Contacts

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