Broadridge Financial Solutions, Inc. · NYSE:BR
Broadridge Financial Solutions — Q1 2023 Earnings Presentation
28 slides from Broadridge Financial Solutions's earnings presentation, Nov 2, 2022
Slide 1: Scaling a Global Fintech Leader
Scaling a Global Fintech Leader EARNINGS CONFERENCE CALL Fiscal First Quarter 2023 | © 2022 0
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") contains “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act
Slide 3: Use of Non-GAAP financial measures, KPIs and foreign exchange rates
Use of Non-GAAP financial measures, KPIs and foreign exchange rates 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”), Fre
Slide 4: Key messages
Key messages Broadridge reported strong first quarter results with 9% Recurring 1 revenue growth constant currency, and earnings modestly above our expectations 2 Investor participation remained strong, with first quarter stock record growth of 9% and interim record growth of 11% Broadridge is drivi
Slide 5: Broadridge is executing across Governance, Capital Markets, and Wealth & Investment Management
Broadridge is executing across Governance, Capital Markets, and Wealth & Investment Management $ in millions; growth rates in constant currency Q1’23 Highlights Extend Governance • Investor participation remains robust across funds and equities $443M +9% YoY • Pass-through voting with Schwab highlig
Slide 6: Broadridge's business model is built for growth through the economic cycle
Broadridge’s business model is built for growth through the economic cycle Robust demand trends and strong execution have Broadridge on track to 1 achieve FY’23 guidance and deliver at the higher end of our 3-year growth objectives Our growth is being propelled by the ongoing transformation and 2 di
Slide 7: Summary financial results
Summary financial results $ in millions, except per share data FIRST QUARTER SUMMARY FINANCIAL RESULTS 2023 2022 Inc./(Dec.) Recurring revenues $806 $750 7% Constant currency growth – Non-GAAP 9% Total revenues 1,283 1,193 8% Operating income 88 103 (15%) Adjusted Operating income – Non-GAAP 150 177
Slide 8: Recurring revenue increased 9% in first quarter 2023
Recurring revenue increased 9% in first quarter 2023 $ in millions RECURRING REVENUE GROWTH CONSTANT CURRENCY 16% +9% $806 10% 10% 6 - 9% FY'20 FY'21 FY'22 FY'23 Q1'22 Q1'23 Guidance Information about our use of Non-GAAP measures and reconciliations to GAAP measures may be found on slides 20 – 26 |
Slide 9: First quarter 2023 segment Recurring revenues
First quarter 2023 segment Recurring revenues $ in millions ICS RECURRING REVENUES GTO RECURRING REVENUES Constant Currency +9% +10% Growth $443 $363 $171 4% Regulatory Capital Markets $227 14% Data-Driven $93 13% Fund Solutions $24 16% Issuer Wealth & Customer Investment $156 11% Management $136 5%
Slide 10: Key volume drivers: position and trade growth
Key volume drivers: position and trade growth EQUITY & MUTUAL FUND/ETF POSITION GROWTH FY’21 FY’22 10Y Avg. 26% 18% 10% 10% 14% 8% ITG 12% 1% 5% 39% 20% 17% 17% 12% 9% 10% 10% 11% 9% Q1'22 Q2'22 Q3'22 Q4'22 Q1'23 INTERNAL TRADE 2% 1% (6)% 8% 6% GROWTH (ITG) 3 1. SRG Q1’22 positions represented 7% of
Slide 11: First quarter 2023 Recurring revenue growth drivers
First quarter 2023 Recurring revenue growth drivers $ in millions. Pts contribution to growth RECURRING REVENUE GROWTH CONSTANT CURRENCY WAS 9% 9 pts ORGANIC GROWTH +5 pts 0 pts 9% 7% +7 pts (2) pts (2) pts $750 $806 Q1'22 Recurring Closed Sales Client Losses Internal Growth Acquisitions Q1'23 Recur
Slide 12: First quarter 2023 Total revenue growth drivers
First quarter 2023 Total revenue growth drivers $ in millions. Pts contribution to growth FIRST QUARTER 2023 TOTAL REVENUE GROWTH DRIVERS +6 pts +4 pts 8% (1) pt (1) pt $1,283 Q1'22 Total Revenue Recurring Event-Driven Distribution FX Q1'23 Total Revenue QUARTERLY EVENT-DRIVEN REVENUE $76 $70 $65 $6
Slide 13: Operating income margin and Adjusted Operating income margin
Operating income margin and Adjusted Operating income margin OPERATING INCOME MARGIN OPERATING 13.8% 13.6% 13.3% 8.7% 6.8% INCOME MARGIN 18.7% ~50bps 18.1% 14.8% ADJUSTED 17.5% OPERATING INCOME MARGIN (NON- GAAP) +40 +60 +60 11.7% bps bps bps FY'20 FY'21 FY'22 FY'23 Q1'22 Q1'23 Guidance | © 2022 12
Slide 14: Closed sales remain on track with fiscal year 2023 guidance
Closed sales remain on track with fiscal year 2023 guidance $ in millions CLOSED SALES $280 $270 – $310 $231 $30 $29 FY'21 FY'22 FY'23 Q1'22 Q1'23 | © 2022 13
Slide 15: Capital allocation
Capital allocation $ in millions, except per share data SELECT USES OF CASH Q1’23 TOTAL CAPITAL RETURNS 4 CapEx and $14 Software 1 $578 Client Platform Investments 2 $163 $269 $248 $253 M&A 3 $0 $47 FY'19 FY'20 FY'21 FY'22 FY'23 6 DIVIDENDS PER SHARE $1.94 $2.16 $2.30 $2.56 $2.90 YOY GROWTH 33% 11%
Slide 16: Fiscal Year 2023 Guidance
Fiscal Year 2023 Guidance FY’23 Guidance Updates/ Changes Recurring revenue growth 6 - 9% No Change constant currency - Non-GAAP Adjusted Operating income margin Increase of No Change - Non-GAAP ~ 50 bps Adjusted earnings per share growth 7 - 11% No Change - Non-GAAP Closed sales $270M - $310M No Ch
Slide 17: Broadridge is on track to deliver at or above the higher end of our 3-year objectives
Broadridge is on track to deliver at or above the higher end of our 3-year objectives INVESTOR DAY FY20-FY23 FY20-FY23 CAGR GROWTH OBJECTIVES PERFORMANCE 1 Organic Recurring revenue growth 5 – 7% Above Recurring revenue growth 2 7 – 9% Above Adjusted Operating income margin expansion ~50 bps/yr In l
Slide 18: Appendix
Appendix aoc & Ve Broadridge’
Slide 19: Supplemental Reporting Detail - Product Line Reporting
Supplemental Reporting Detail ‒ Product Line Reporting (Unaudited) 2021 2022 2023 Q1% Dollars in millions FY Q1 Q2 Q3 Q4 FY Q1 Growth Investor Communication Solutions ("ICS") Regulatory $938 $165 $166 $321 $423 $1,075 $171 3% Data-driven fund solutions 342 83 89 90 102 364 93 11% Issuer 189 21 24 46
Slide 20: Explanation of Non-GAAP measures and Reconciliation of GAAP to Non-GAAP measures
Explanation of Non-GAAP measures and Reconciliation of GAAP to Non-GAAP measures | © 2022 19
Slide 21: Non-GAAP Measures
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, results have
Slide 22: Non-GAAP Measures
Non-GAAP Measures We exclude Acquisition and Integration Costs, IBM Private Cloud Charges, Real Estate Realignment and Covid-19 Related Expenses, Russia-Related Exit Costs, and the Software Charge from our Adjusted Operating income (as applicable) and other adjusted earnings measures because excludi
Slide 23: Reconciliation of GAAP to Non-GAAP Measures
Reconciliation of GAAP to Non-GAAP Measures (Unaudited) Three Months Ended Sept. 30 Dollars in millions 2022 2021 Operating income (GAAP) $87.5 $103.3 Adjustments: Amortization of Acquired Intangibles and Purchased Intellectual Property 55.9 68.7 Acquisition and Integration Costs 4.1 2.9 Real Estate
Slide 24: Reconciliation of GAAP to Non-GAAP Measures
Reconciliation of GAAP to Non-GAAP Measures (Unaudited) Three Months Ended Sept. 30 Dollars in millions, except per share amounts 2022 2021 Diluted earnings per share (GAAP) $0.42 $0.57 Adjustments: Amortization of Acquired Intangibles and Purchased Intellectual Property 0.47 0.58 Acquisition and In
Slide 25: Reconciliation of GAAP to Non-GAAP Measures
Reconciliation of GAAP to Non-GAAP Measures (Unaudited) Three Months Ended September 30, 2022 Data-Driven Customer Investor Communication Solutions Regulatory Issuer Total Fund Solutions Comms. Recurring revenue growth (GAAP) 3% 11% 16% 11% 8% Impact of foreign currency exchange —% 2% —% —% 1% Recur
Slide 26: Reconciliation of GAAP to Non-GAAP Measures
Reconciliation of GAAP to Non-GAAP Measures (Unaudited) Year ended June 30, Dollars in millions 2022 2021 2020 Operating income (GAAP) $759.9 $678.7 $624.9 Adjustments: Amortization of Acquired Intangibles and Purchased Intellectual Property 250.2 153.7 122.9 Acquisition and Integration Costs 24.5 1
Slide 27: Reconciliation of Non-GAAP to GAAP measures: Fiscal Year 2023 guidance
Reconciliation of Non-GAAP to GAAP measures: Fiscal Year 2023 guidance (Unaudited) 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 (b) Operating income margin %
Slide 28: Broadridge Fiscal First Quarter 2023 Earnings Conference Call
Broadridge Fiscal First Quarter 2023 Earnings Conference Call Contacts Replay Options W. Edings Thibault Online replay available at Sean Silva broadridge-ir.com broadridgeir@broadridge.com Telephone replay available through November 9, 2022 Live Call Information Domestic Date: November 2, 2022 Dial-
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