Broadridge Financial Solutions, Inc. · NYSE:BR
Broadridge Financial Solutions — Investor Presentation (September 2013)
32 slides from Broadridge Financial Solutions's investor presentation, Sep 13, 2013
Slide 1: Continued Market Leadership through Execution and Innovation
Exhibit 99.1 Continued Market Leadership through Execution and Innovation Investor Presentation © 2013 Broadridge Financial Solutions, Inc. Broadridge and the Broadridge logo are registered trademarks of Broadridge Financial Solutions, Inc. September 2013
Slide 2: Forward-Looking Statements
Forward-Looking Statements This presentationand other written or oral statements made from time to time by representativesof 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: Broadridge Overview
\Geties Overview ’ ea Broadridge
Slide 4: Broadridge is a strong, resilient business with significant growth potential
Broadridge is a strong, resilient business with significant growth potential History of market leadership – Proven ability to address increasingly complex customer needs through technology – Innovation and thought leader in industry for >50 years Strong position in large and attractive markets – Lea
Slide 5: Broadridge Strategy Statement
Broadridge Strategy Statement Our vision is to be the leading provider of Investor Communications and Technology and Operations Solutions to Banks/Broker-Dealers, Mutual Funds, and Corporate Issuers globally – Our mission is to drive the industry we serve to higher levels of efficiency and complianc
Slide 6: Our market position is differentiated and sustainable
Our market position is differentiated and sustainable 73% of revenue 27% of revenue Investor Communication Solutions Securities Processing Solutions Includes bank, broker-dealer Includes bank/broker-dealer technology communications, mutual funds and and operations retirement solutions and corporate
Slide 7: We are the leader in several markets
We are the leader in several markets Investor Communication Securities Processing Solutions Solutions Market Rank 1 Market Rank 1 Bank/Broker-Dealer US Brokerage Regulatory #1 Processing #1 Communications US Fixed Income Broker-Dealer Processing #1 Transactional #1 Communications Canadian Brokerage
Slide 8: Investor Communication Solutions (ICS)
Investor Communication Solutions (ICS) 7
Slide 9: Large and attractive markets – Investor Communications is a $10B+ market
Large and attractive markets – Investor Communications is a $10B+ market Total addressable market $10B+ fee revenue Bank/Broker-Dealer (BBD)—Core Regulatory communications (proxy, interims, etc.) Mutual Fund—Natural adjacencies Customer communications Transaction reporting (transaction statements, e
Slide 10: ICS Operates a Unique Business Systems Processing Model
ICS Operates a Unique Business Systems Processing Model PROXY & INTERIMS PROCESSING OVERVIEW "THE PLUMBING" Equity and Mutual Fund Shareholders S t r e e t-s i d e P r o c e s s i n g Registered Processing Broker/Bank 1 BROADRIDGE Issuer 1 / Fund 1 Proxy Processing System Broker/Bank 2 Issuer 2 / Fu
Slide 11: ICS has a Diversified Revenue Base
ICS has a Diversified Revenue Base By product 1 Broad client base Proxy $356M (20%) Banks Distribution Interims $191M (11%) $755M (43%) Primarily Broker-Dealers Postage Transaction Mutual Funds Reporting $165M (9%) Fulfillment Corporate Issuers $143M (8%) Other $151M (9%) Increase in electronic dist
Slide 12: ICS-Bank/Broker-Dealer
ICS-Bank/Broker-Dealer What We Do: Competitive Advantages: Indispensible data hub with established Regulatory communications relationships with majority of BBDs – Beneficial proxy and interims for equities – Beneficial mutual fund compliance Strong market position and innovative communications leade
Slide 13: ICS-Mutual Funds
ICS-Mutual Funds What We Do: Competitive Advantages: Long-standing relationships across Mutual Fund trade processing in the industry defined contribution/trust space – Serve every mutual fund and majority of (Matrix) banks/broker-dealers Data aggregation and analytics Unique data capabilities (Acces
Slide 14: ICS-Issuers
ICS-Issuers What We Do: Competitive Advantages: Beneficial proxy service Market Position – only full service provider of shareholder communications to all types of shareholders Registered shareholder communications – Registered proxy Unmatched Scale – able to leverage one billion – Interim communica
Slide 15: Securities Processing Solutions (SPS)
Securities Processing Solutions (SPS) 14
Slide 16: Technology and Operations spend adds ~$14B to our SPS addressable market
Technology and Operations spend adds ~$14B to our SPS addressable market Securities and investment firms’ overall technology and operations spend is over $100 billion and growing at 5% Total addressable market ~ $14B fee revenue US Brokerage Processing Core equities and fixed income Adjacent markets
Slide 17: Broadridge global processing behind the scenes
Broadridge global processing behind the scenes Broadridge simplifies complex processes 16
Slide 18: Securities Processing North America Market Share Overview
Securities Processing North America Market Share Overview 1 Equity Processing Client Volume FY13 Product Revenues Broadridge ~30% Competitors ~20% M In-house A ~50% R K U.S. $ Fixed Income Client Volume E Equity (~74%) Fixed Income (~16%) T Transactions, $127M Transactions, $57M Broadridge Non-trans
Slide 19: SPS's Client Base is Diversified Across Large Financial Institutions
SPS’s Client Base is Diversified Across Large Financial Institutions Top Equity Processing Fixed Income Outsourcing Clients Retail Institutional Processing Apex Clearing Bank of America/Merrill Lynch Barclays Capital Services BMO Nesbitt Burns CIBC World Markets Deutsche Bank E*Trade Group Edward Jo
Slide 20: SPS-Technology and Operations
SPS-Technology and Operations What We Do: Competitive Advantages: Best-of-breed processing solutions Unique global technology platform – Leading global platform provides processing access to over 50 – Broad asset class coverage countries Broad suite of add-on or point solutions – Desk top applicatio
Slide 21: Financial Strategy
_ y, ee Strategy me Bg Broadridge 20
Slide 22: Our financial strategy is a key part of our value creation strategy
Our financial strategy is a key part of our value creation strategy Target paying out 40% of net earnings in dividends, but expect no less than 84 cents per share annually (subject to quarterly Board approval) Organic growth with limited financial risk – Avoid significant balance sheet risk – Invest
Slide 23: Appendix
Appendix me 22 Big Broadridge
Slide 24: Key Financial Drivers and Free Cash Flow
Key Financial Drivers and Free Cash Flow Historical CAGR Actual FY14 (FY08-FY13) FY13 Range 3% Total Revenue Growth 6% 2-4% 3% Closed Sales (Recurring) 4% 4-5% (1%) Client Losses (1%) (2%) 2% Net New Business 3% 2-3% 0% Internal Growth (a) (0%) 0-1% 2% Acquisitions 0% 0% 4% Total Recurring 3% 2-4% (
Slide 25: Broadridge FY13 Q4 and FY13 from Continuing Operations
Broadridge FY13 Q4 and FY13 from Continuing Operations Revenue Earnings FY12 FY13 FY12 FY13 FY12 FY13 FY12 FY13 Q4 Q4 Full Year Full Year Q4 Q4 Full Year Full Year $630 $690 $1,634 $1,760 ICS $187 $208 $243 $302 2% 9% 5% 8% Growth % / Margin % 29.7% 30.1% 14.9% 17.2% $167 $173 $655 $661 SPS $18 $27
Slide 26: Broadridge FY14 Guidance from Continuing Operations
Broadridge FY14 Guidance from Continuing Operations Revenue Earnings FY13 FY14 Range FY13 FY14 Range Actual Low High ($ in millions) Actual Low High $1,760 $1,785 $1,812 ICS $302 $316 $328 8% 1% 3% Growth % / Margin % 17.2% 17.7% 18.1% $661 $678 $695 SPS $85 $100 $117 1% 3% 5% Growth % / Margin % 12
Slide 27: Cash Flow –FY13 Results and FY14 Forecast
Cash Flow –FY13 Results and FY14 Forecast Free Cash Flow - Non-GAAP Unaudited ($ millions) Year Ended FY14 Range (a) June 2013 Low High Free Cash Flow (Non-GAAP): Net earnings from continuing operations (GAAP) $ 212 $ 233 $ 246 Depreciation and amortization (includes other LT assets) 93 100 110 Stoc
Slide 28: Revenues and Closed Sales FY07-FY13
Revenues and Closed Sales FY07-FY13 ($ in millions) CAGR Forecast Recurring Fee Revenues FY07 FY08 FY09 FY10 FY11 FY12 FY13FY07-FY13 FY14 ICS $ 529 $ 567 $ 594 $ 632 $ 720 $ 798 $ 850 8% $903-921 Growth 7% 5% 6% 14% 11% 7% 6-8% SPS $ 527 $ 534 $ 559 $ 536 $ 594 $ 655 $ 661 4% $678-695 Growth 1% 5% -
Slide 29: Reconciliation of Non-GAAP to GAAP Measures
Reconciliation of Non-GAAP to GAAP Measures Reconciliation of EPS Guidance 4Q12 4Q13 FY11 FY12 FY13 FY14 Range Actual Actual Actual Actual Actual Low High Diluted EPS (Non-GAAP) $1.02 $1.15 $1.47 $1.67 $1.88 $2.00 $2.10 Acquisition Amortization and Other Costs ($0.02) ($0.04) ($0.10) ($0.12) ($0.12)
Slide 30: ICS Key Segment Revenue Stats
ICS Key Segment Revenue Stats RC= Recurring Fee Revenues 4Q12 4Q13 FY12 FY13 Type ED= Event-Driven Proxy Equities $ 202.7 $ 211.8 $ 282.8 $ 296.6 RC In millions Stock Record Position Growth 1% 2% 1% 2% Pieces 214.4 219.1 280.5 287.3 Mutual Funds $ 8.9 $ 20.8 $ 28.2 $ 43.5 ED Pieces 12.0 29.9 41.7 66
Slide 31: SPS and Outsourcing Key Segment Revenue Stats
SPS and Outsourcing Key Segment Revenue Stats RC= Recurring ED= Event-Driven 4Q12 4Q13 FY12 FY13 Type In millions Equity Transaction-Based Equity Trades $ 32.4 $ 31.6 $ 137.1 $ 126.5 RC Internal Trade Volume 883 936 948 894 Internal Trade Growth -7% 6% -1% -6% Trade Volume (Average Trades per Day in
Slide 32: Broadridge ICS Definitions
Broadridge ICS Definitions Proxy Equities - Refers to the proxy services we provide in connection with annual stockholder meetings for publicly traded corporate issuers. Annual meetings of public companies include shares held in "street name" (meaning that they are held of record by brokers or banks
Broadridge Financial Solutions — Investor Presentation (September 2013) on 6ix