Broadridge Financial Solutions, Inc. · NYSE:BR
Broadridge Financial Solutions — Bank of America - Merrill Lynch SMid Cap Conference 2009
25 slides from Broadridge Financial Solutions's conference presentation, Sep 21, 2009
Slide 1: Broadridge Financial Solutions at BofA Merrill Lynch SMid Cap Conference 2009
Broadridge Financial Solutions, Inc . September 2009 Bank of America - Merrill Lynch SMid Cap Conference 2009 Presentation Richard J. Daly, Chief Executive Officer Exhibit 99.1
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 may contain “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. Statements that are not historical in nature,
Slide 3: Use of Material Contained Herein
Use of Material Contained Herein The information contained in this presentation is being provided for your convenience and information only. This information is accurate as of the date of its initial presentation. If you plan to use this information for any purpose, verification of its continued acc
Slide 4: Agenda
AGENDA Broadridge Overview and Summary Business Overview Business Expansion Strategy Overview Financial Overview Conclusion
Slide 5: Broadridge: Investment Thesis
Broadridge: Investment Thesis Generate very strong and highly predictable free cash flows Strong core Investor Communications business which generates over 70% of annual revenues and earnings Market leader with high client retention rates driven by product innovation Approximately 80% in recurring a
Slide 6: Broadridge: Free Cash Flow & Capital Allocation
Forecast Broadridge: Free Cash Flow & Capital Allocation Note: Free Cash Flow excludes financing activities in the Clearing and Outsourcing Solutions segment Dividends Stock Repurchases Acquisitions Strong predictable free cash flow allows for flexible capital allocation options High: $270 $252 $290
Slide 7: Broadridge Mission
Broadridge Mission Partner with Financial Institutions to: Reduce Risk & Cost Increase Performance Our Mission is To Reduce Clients’ Risk While Lowering Their Total Cost of Ownership • Enable the financial services industry to achieve higher levels of performance by allowing firms to focus on their
Slide 8: Integrated Solutions Spanning the Investment Lifecycle
Integrated Solutions Spanning the Investment Lifecycle Investment Decision (Pre-Trade) Trade Processing & Books and Records Asset Servicing (Post-Trade) New Accounts Welcome Kits Proxy Fulfillment Archival Confirms Processing Reporting Statements Individual (Retail) and Institutional Clients Broker-
Slide 9: Revenue Drivers
Revenue Drivers Market Leader with High Retention Rates Recurring Revenue Complex Proprietary Processing Platforms High Client Satisfaction and Highly Engaged Associates Recurring Revenue (~80%) Indispensable Provider for Mission Critical Processing Resilient and Predictable Business Model Business
Slide 10: Business is Resilient in Changing Markets
Business is Resilient in Changing Markets Our revenue growth has been resilient through various economic and market cycles Stock Market Rebounds Decimalization of Trades Internet Bubble Impact Financial Crisis Note: Fiscal year is based on June year end $1,000 $1,200 $1,400 $1,600 $1,800 $2,000 $2,2
Slide 11: Business Overview
Ba Broadridge
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Slide 14: This is Broadridge
This is Broadridge Investor Communications $1,531M (71%) Securities Processing Businesses $635M (29%) Investor Communications EBIT $249M Margin 16.3% Securities Processing Businesses EBIT $134M Margin 21.0% Investor Communications (2) Securities Processing Businesses (2) • We are a market leader in
Slide 15: ICS Unique Business Systems Processing Model
ICS Unique Business Systems Processing Model Broker/Bank 1 Issuer 1 / Fund 1 Broker/Bank 2 Issuer 2 / Fund 2 Broker/Bank 3 Issuer 3 / Fund 3 Broker/Bank 4 Issuer 4 / Fund 4 Broker/Bank 5 Issuer 5 / Fund 5 Broker/Bank 6 Issuer 6 / Fund 6 Broker/Bank 7 Issuer 7 / Fund 7 Broker/Bank 8 Issuer 8 / Fund 8
Slide 16: ICS Product and Client Revenue Overview
Distribution $757M (49%) ICS Product and Client Revenue Overview: ICS is highly resilient due to our deep customer relationships with our Bank/Broker-Dealer clients Primarily Postage Bank/Broker- Dealer $1,383M (90%) Other $46M (3%) Fulfillment $110M (7%) Transaction Reporting $132M (9%) Interims $1
Slide 17: Broadridge's Unique Securities Processing Model
Broadridge’s Unique Securities Processing Model Clearing and Outsourcing business has high growth potential and allows us to serve the entire investment process Securities Processing Self-Clearing with Service Bureau Clearing Fully-Disclosed Clearing Outsourcing Provided by Broadridge Provided by Br
Slide 18: Securities Processing Solutions Top Clients
Securities Processing Solutions Top 15 Clients SPS client relationship are stable in volatile market Equity Processing Fixed Income Processing Retail Institutional Top Clients Broadridge has faired well during the recent industry consolidations and financial crisis The top 15 SPS clients generate ap
Slide 19: Business Expansion Strategy
Business Expansion Strategy Foundation Five Pillars Be Indispensable! We enable the financial services industry to achieve superior levels of performance through our passion to deliver extraordinary value to our clients, shareholders, and associates Client Retention Accelerate Sales Offer New Soluti
Slide 20: Business Expansion Focus
Business Expansion Focus Closed Sales Long-Term Growth Challenges Broadridge is well-positioned and on the high ground as a result of our recurring revenue base, great value propositions, new initiatives, free cash flow and solid balance sheet CAGR = 11% ED = 17% RC = 9% Forecast $81 $96 $76 $85 $11
Slide 21: Financial Performance is Driven by Recurring Revenues
Financial Performance is Driven by Recurring Revenues $352 $371 $347 $304 $275 $1,726 $1,724 $1,651 $1,565 $1,393 $423 $483 $487 $368 $324 Recurring Revenues: 81% 81% 77% 78% 80% Margins: 16.0% 15.7% 16.2% 16.8% 16.4% $1,717 $2,149 FY09 FY08 FY07 FY06 FY05 Earnings Before Interest and Taxes as adjus
Slide 22: Financial Guidance
Financial Guidance (1) Non-GAAP Fiscal Year 2009 EPS excludes one-time gain of $0.04 from purchase of senior notes and $0.03 per share from the state tax credit true-up benefit for prior fiscal year. (2) The Fiscal Year 2010 EPS guidance is a GAAP measure as we are not anticipating any one-time item
Slide 23: Focused on Capital Stewardship and Long-Term Shareholder Value
Focused on Capital Stewardship and Long-Term Shareholder Value Cash Level on Balance Sheet Strong Predictable FCF Allows for Flexible Capital Allocation Options Manage to a Debt to EBITDA Ratio 1:1 Debt Mid-single-digit organic revenue growth in the long-run Improve Margins Aim to invest through exi
Slide 24: Summary
Summary Broadridge is a dependable mid-single-digit revenue grower with a scalable business model providing opportunity for margin expansion We expect to continue to invest in our existing businesses and execute strategic acquisitions to generate mid to high single-digit average revenue growth We ex
Slide 25: Questions & Answers
Q&A Questions & Answers
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