Broadridge Financial Solutions, Inc. · NYSE:BR
Broadridge Financial Solutions — Q4 FY2022 Earnings Presentation
33 slides from Broadridge Financial Solutions's earnings presentation, Aug 12, 2022
Slide 1: Scaling a Global Fintech Leader: Q4 and Fiscal Year 2022 Earnings
0© 2022 | Scaling a Global Fintech Leader E A R N I N G S C O N F E R E N C E C A L L Fourth Quarter and Fiscal Year 2022 EXHIBIT 99.2
Slide 2: Forward-Looking Statements
1© 2022 | 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
Slide 3: Use of Non-GAAP financial measures, KPIs and foreign exchange rates
2© 2022 | 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 (“
Slide 4: Key messages
3© 2022 | Key messages Broadridge delivered very strong fourth quarter results, including 15% recurring revenue growth (12% organic) and 21% Adjusted EPS growth 1 2 3 4 Broadridge’s growth is being powered by strong execution on key growth initiatives, the performance of Itiviti, increased investor
Slide 5: We are extending our Governance franchise
4© 2022 | We are extending our Governance franchise… FY'18 FY'19 FY'20 FY'21 FY'22 $2.3B 8% 11% HIGHLIGHTS 1 2 3 Double-digit growth in both equity and fund records sustained despite weaker markets Driving Governance innovation with multiple product launches Continued digitization gains are reducing
Slide 6: Growing our Capital Markets franchise
5© 2022 | . . . growing our Capital Markets franchise. . . $661M FY'18 FY'19 FY'20 FY'21 FY'22 $921M HIGHLIGHTS 1 2 3 Strong growth driven by successful Itiviti acquisition and organic growth Platform investments are driving organic growth Digital Ledger Repo and other network solutions continue to
Slide 7: Itiviti acquisition is delivering value for Broadridge
6© 2022 | Itiviti 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 solutions
Slide 8: Building our Wealth & Investment Management franchise
7© 2022 | $525M FY'18 FY'19 FY'20 FY'21 FY'22 …and building our Wealth & Investment Management franchise $554M HIGHLIGHTS 1 2 New sales in the U.S. and Canada drove continued growth On track to launch Wealth Management Platform in mid- calendar year 2023 FY’22 RECURRING REVENUE 3 Modular value propo
Slide 9: Broadridge's business model is built for growth through the economic cycle
8© 2022 | Broadridge’s business model is built for growth through the economic cycle Broadridge delivered another year of strong financial and operating results1 2 3 Fiscal 23 guidance calls for continued growth and positions Broadridge to deliver at or above the higher end of its three-year growth
Slide 10: Summary financial performance
9© 2022 | Summary financial performance Q4’22 Inc./(Dec.) FY’22 Inc./(Dec.) Recurring revenues $1,189 15% $3,749 16% Total revenues 1,723 12% 5,709 14% Operating income 342 21% 760 12% Adjusted Operating income (Non-GAAP) 436 25% 1,066 18% Adjusted Operating income margin (Non-GAAP) 25.3% 250 bps 18
Slide 11: Recurring revenue increased 15% in fourth quarter 2022
10© 2022 | $1,189 Q4'21 Q4'22FY'19 FY'20 FY'21 FY'22 Recurring revenue increased 15% in fourth quarter 2022 RECURRING REVENUE GROWTH 10%10% $ in millions 6% +15% 16% $1,033
Slide 12: ICS fourth quarter and fiscal year 2022 recurring revenues
11© 2022 | $134 $155 $106 $125 $93 $375 $424 Q4'21 Q4'22 Regulatory Customer Comms. Data-Driven Fund Solutions Issuer $ in millions 18% 15% 11% 13% ICS QUARTERLY RECURRING REVENUES ICS FISCAL YEAR RECURRING REVENUES ICS fourth quarter and fiscal year 2022 Recurring revenues $807 $709 YoY Growth $103
Slide 13: GTO fourth quarter and fiscal year 2022 recurring revenues
12© 2022 | $136 $142 $188 $240 Q4'21 Q4'22 $525 $554 $661 $921 FY'21 FY'22 $ in millions GTO QUARTERLY RECURRING REVENUES GTO FISCAL YEAR RECURRING REVENUES GTO fourth quarter and fiscal year 2022 Recurring revenues Capital Markets Wealth & Investment Management $324 28% 4% YoY Growth 18% 24% $382 Y
Slide 14: Internal trade growth and position growth
13© 2022 | INTERNAL TRADE GROWTH (ITG) 33% 39% 20% 17% 17% 11% 9% 12% 10% 10% Q4'21 Q1'22 Q2'22 Q3'22 Q4'22 Equity MF/ETF EQUITY & MUTUAL FUND/ETF POSITION GROWTH Key volume drivers: position and trade volume growth (1)% 2% 1% (6)% 8% FY’21 FY’22 18% 14% 26% 10% ITG 1%12% 1. SRG Q4’22 positions repr
Slide 15: Fourth quarter 2022 recurring revenue growth drivers
14© 2022 | $1,033 $1,189 Q4'21 Recurring Revenue Closed Sales Client Losses Internal Growth Acquisitions Q4'22 Recurring Revenue GTO $324M 7 pts (2) pts 4 pts 9 pts $382M ICS $709M 5 pts (1) pt 10 pts 0 pt $807M Fourth quarter 2022 Recurring revenue growth drivers FOURTH QUARTER 2022 RECURRING REVEN
Slide 16: Fourth quarter 2022 total revenue growth drivers
15© 2022 | $72 $76 $65 $59 $70 Q4'21 Q1'22 Q2'22 Q3'22 Q4'22 $1,532 $1,723 Q4'21 Total Revenue Recurring Event-Driven Distribution FX Q4'22 Total Revenue Fourth quarter 2022 Total revenue growth drivers QUARTERLY EVENT-DRIVEN REVENUE +10 pts (0) pt +3 pts (1) pt 12% FOURTH QUARTER 2022 TOTAL REVENUE
Slide 17: Operating income margin and Adjusted Operating income margin
16© 2022 | 17.1% 17.5% 18.1% FY'19 FY'20 FY'21 FY'22 15.0% 13.8% 13.6% 19.8%18.4% 22.8% 25.3% Q4'21 Q4'22 +120 bps +40 bps +60 bps OPERATING INCOME MARGIN (GAAP) ADJUSTED OPERATING INCOME MARGIN (NON- GAAP) 18.7% Operating income margin and Adjusted Operating income margin OPERATING INCOME MARGIN 13
Slide 18: Fiscal year 2022 Closed sales
17© 2022 | % OF RECURRING REVENUE FY'20 FY'21 FY'22 $228 $232 Fiscal year 2022 Closed sales $ in millions CLOSED SALES FY'21 FY'22 RECURRING REVENUE BACKLOG $385 $440 $282 12% 12% +14%
Slide 19: Capital allocation
18© 2022 | 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
Slide 20: Fiscal Year 2023 Guidance
19© 2022 | Fiscal Year 2023 Guidance FY’23 Guidance Recurring revenue growth 6 - 9% Adjusted Operating income margin (Non-GAAP) Increase of ~ 50 bps Adjusted earnings per share growth (Non-GAAP) 7 - 11% Closed sales $270M - $310M
Slide 21: Investor Day FY20-FY23 growth objectives
20© 2022 | INVESTOR DAY FY20-FY23 GROWTH OBJECTIVES FY20-FY23 CAGR PERFORMANCE Organic recurring fee revenue growth 5 – 7% Above Recurring fee revenue growth 7 – 9% Above Adjusted Operating income margin expansion ~50 bps/yr In line Adjusted earnings per share growth 8 – 12% Higher end Broadridge is
Slide 22: Appendix
Appendix oe es Broadridge:
Slide 23: Supplemental Reporting Detail - Product Line Reporting
22© 2022 | Confidential and Proprietary | Supplemental Reporting Detail ‒ Product Line Reporting (Unaudited) In the second quarter of fiscal year 2021, the Company changed its presentation of disaggregated revenue by product line disclosures to reflect internal realignment of the Company’s revenue r
Slide 24: Fiscal year 2022 Recurring revenue growth drivers
23© 2022 | $3,228 $3,749 FY'21 Recurring Revenue Closed Sales Client Losses Internal Growth Acquisitions FY'22 Recurring Revenue $576M $1,211M $623 FISCAL YEAR 2022 RECURRING REVENUES GREW 16% TO $3.7B +6 pts (2) pts +5 pts +7 pts 16% $ in millions Pts contribution to growth 9% ORGANIC GROWTH Fiscal
Slide 25: Fiscal year 2022 Total revenue drivers
24© 2022 | Fiscal year 2022 Total revenue drivers $4,994 $5,709 FY'21 Total Revenue Recurring Event-Driven Distribution FX FY'22 Total Revenue FISCAL YEAR 2022 REVENUE DRIVERS +10 pts +1 pt +3 pts (0) pt 14% $ in millions Pts contribution to growth
Slide 26: Fiscal year 2022 Event-driven revenue
25© 2022 | FY'16 FY'17 FY'18 FY'19 FY'20 FY'21 FY'22 $233M FY’16-FY’22 AVERAGE FISCAL YEAR 2022 EVENT-DRIVEN REVENUE Fiscal year 2022 Event-driven revenue $ in millions $284 $199 $219 $244 $176 $235 $270
Slide 27: Explanation of Non-GAAP measures and Reconciliation of GAAP to Non-GAAP measures
26© 2022 | Explanation of Non-GAAP measures and Reconciliation of GAAP to Non-GAAP measures
Slide 28: Non-GAAP measures explanation
27© 2022 | 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
Slide 29: Non-GAAP measures
28© 2022 | Non-GAAP measures We exclude Acquisition and Integration Costs, IBM Private Cloud Charges, Real Estate Realignment and Covid-19 Related Expenses, the Russia-Related Exit Costs, Investment Gains, the Software Charge, the Gain on Acquisition-Related Financial Instrument and the Gain on Sale
Slide 30: Reconciliation of GAAP to Non-GAAP Measures
29© 2022 | Confidential and Proprietary | Reconciliation of GAAP to Non-GAAP Measures (Unaudited) 3 Months Ended June 30 Fiscal Year Ended June 30 Dollars in millions 2022 2021 2022 2021 2020 Operating income (GAAP) $341.7 $281.4 $759.9 $678.7 $624.9 Adjustments: Amortization of Acq. Intangibles and
Slide 31: Reconciliation of GAAP to Non-GAAP Measures (footnotes)
30© 2022 | Confidential and Proprietary | Reconciliation of GAAP to Non-GAAP Measures (Unaudited) (a) Real Estate Realignment Expenses were $22.6 million and ($3.3 million) for the three months ended June 30, 2022 and 2021, respectively, and $23.0 million, $29.6 million, and $0.0 million for the fis
Slide 32: Fiscal Year 2023 Adjusted Earnings Per Share Growth
31© 2022 | Confidential and Proprietary | Fiscal Year, 2023 Adjusted Earnings Per Share Growth Rate (a) Diluted earnings per share – GAAP ~13-17% growth Adjusted earnings per share – Non-GAAP 7-11% growth Adjusted Operating Income Margin (b) Operating income margin % - GAAP Increase of ~150 bps Adju
Slide 33: Contacts
32© 2022 | Contacts W. Edings Thibault Edings.Thibault@Broadridge.com Sean Silva Sean.Silva@Broadridge.com Replay Options Online replay available at broadridge-ir.com Telephone replay available through August 19, 2022 Domestic Dial-In: 1-877-344-7529 Access Code: 2334448 International Toll Dial-In:
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