Slide 1: ADP Earnings Call & Webcast 4Q Fiscal 2019
ADP Earnings Call & Webcast 4Q Fiscal 2019 July 31, 2019 Copyright © 2019 ADP, LLC
Slide 2: Forward Looking Statements; Non-GAAP Measures
Forward Looking Statements This presentation and other written or oral statements made from time to time by ADP may contain “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. Statements that are not historical in nature and which may be identifie
Slide 3: CEO's Perspective
CEO’s Perspective • Continued momentum through transformation 6% revenue growth, 7% organic constant currency (a) Robust 160bps Adj. EBIT (a) margin expansion 20% adjusted diluted EPS growth (a) • Solid ES New Business Bookings performance with 8% growth to $1.6B • Investments to improve the c
Slide 4: Fiscal 2019 Financial Highlights
Fiscal 2019 Financial Highlights (unaudited) Total Revenues Adjusted EBIT (a) Adjusted Diluted EPS (a) h 6% h 15% h 20% h 7% Organic Constant Currency (a) $5.45 $14.2B $3.2B $13.3B $2.8B $4.53 2018 2019 2018 2019 2018 2019 Copyright © 2019 ADP, LLC (a) For a reconciliation of these non-GAAP financia
Slide 5: Fiscal 2019 ES Segment Results
Fiscal 2019 ES Segment Results (unaudited) ES Revenues ES Margin Highlights h 5% h 230bps • Continued focus on improving client satisfaction on core strategic h 5% Organic Constant Currency (a) platforms contributing to improved $9.9B 27.5% 29.7% retention $9.5B • Ongoing investment in innovative so
Slide 6: Fiscal 2019 PEO Segment Results
Fiscal 2019 PEO Segment Results (unaudited) PEO Revenues PEO Margin Highlights h 9% h 60bps • Continued focus on growth of average Worksite Employees 14.6% • Workers’ Compensation and SUI $3.9B $4.2B 14.0% pricing expected to remain source of pressure to revenue growth through FY20 2018 2019 2018 20
Slide 7: Cash Flow and Balance Sheet Strength
Cash Flow and Balance Sheet Strength (unaudited) Robust Cash Flow Year-End Balance Sheet Strong track record of cash generation $1.9B in cash $2.2B in combined dividends and share $2.0B in debt repurchases AA credit rating • Target 55-60% dividend payout ratio • Includes A1+/P1 commercial paper rati
Slide 8: Fiscal 2020 Outlook
Fiscal 2020 Outlook Fiscal 2019 Fiscal 2020 (unaudited) Outlook (a) Revenues $14,175M h 6% - 7% Adj. EBIT Margin (b) 22.3% h 100 - 125 bps Total ADP Adj. Effective Tax Rate (b) 23.8% Flat at 23.8% Adj. Diluted EPS (b) $5.45 h 12% - 14% Revenues $9,943M h 4% - 5% Margin 29.7% h 100 - 125 bps Employer
Slide 9: FY21 Targets Under ASC 606
FY21 Targets Under ASC 606 • FY21 targets provided at Investor Day 2018 were baselined off FY18 guidance provided 3Q18 under ASC 605 • Information below reflects recasting of the original FY18 baseline and FY21 targets for actual FY18 results and ASC 606 • Revenue and tax rate not materially impacte
Slide 10: Appendix: Client Funds Investment Strategy Detail
Appendix: Client Funds Investment Strategy Detail Fiscal 2020 Outlook Average Balance ($) Average Yield Interest ($) Client Short 5.0 – 5.1B ~1.6% 75 - 80M Client Extended 11.5 – 11.6B ~2.1% 245 - 250M Client Long 10.0 – 10.1B ~2.6% ~260M Total Client Funds (a) ~26.5 – 26.8B ~2.2% 580 - 590M Corpora
Slide 11: Appendix: Client Fund Portfolio Maturities
Appendix: Client Fund Portfolio Maturities Client Funds Portfolio at June 30, 2019 Available for Sale Securities Maturities and Book Yields $ Billions 7 2.2% 6 2.0% 5 2.2% 2.4% 4 3 2.7% 2 2.8% 3.0% 1 2.9% 3.1% 0 FY20 FY21 FY22 FY23 FY24 FY25 FY26 FY27 >FY27 Copyright © 2019 ADP, LLC 11