Broadridge Financial Solutions, Inc. · NYSE:BR
Broadridge Financial Solutions — Q3 2020 Earnings Presentation
30 slides from Broadridge Financial Solutions's earnings presentation, May 8, 2020
Slide 1: Q3 Earnings Webcast and Conference Call Third Quarter Fiscal Year 2020
EXHIBIT 99.2 Q3 Earnings Webcast and Conference Call Third Quarter Fiscal Year 2020
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") may contain “forward-looking statements” within the meaning of the Private Securities Litigation Reform
Slide 3: Use of Non-GAAP Financial Measures
Use of Non-GAAP Financial 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 circumstan
Slide 4: Broadridge
Broadridge’ ea Broadridge’ ©2020 | 4
Slide 5: Overview
Overview 1▪ The Covid-19 crisis has reinforced the essential nature of Broadridge’s work – what we do matters 2▪ The health and safety of our associates is our top priority 3▪ We have delivered strong operational performance 4▪ As a result, we are seeing continued growth and solid financial results
Slide 6: Covid-19 Has Reinforced the Essential Nature of Broadridge's Work
Covid-19 Has Reinforced the Essential Nature of 1 Broadridge’s Work ▪ Supporting dynamic capital markets processing trillions of dollars of trading activity ▪ Providing investors key information about their investments in a time of high volatility and uncertainty ▪ Ensuring strong and timely corpora
Slide 7: Ensuring the Health and Safety of our Associates
2 Ensuring the Health and Safety of our Associates ▪ Importance of the Service-Profit Chain ▪ Moved to 100% work-from-home for non-production associates • Began in January in Asia-Pacific • North America and Europe staff in early March • India staff starting in mid-March ▪ Strong measures to protect
Slide 8: Delivered Strong Operational Performance
3 Delivered Strong Operational Performance ▪ Our resilient and scalable technology successfully supported unprecedented market volumes ▪ Delivering an effective proxy season to support strong corporate governance ▪ Managed very strong spike in transactional communications driven by market volatility
Slide 9: Expecting Continued Growth and Solid Financial Results
Expecting Continued Growth and 4 Solid Financial Results ▪ Broadridge reported solid third quarter results • Recurring fee revenue growth of 9% • 20% increase in Closed sales including stronger March ▪ Fiscal Year 2020 guidance calls for continued growth • 8 – 10% Recurring fee revenue growth, inclu
Slide 10: Third Quarter Financial Summary
Third Quarter Financial Summary Third Quarter Financial Highlights 2020 2019 Change 1.1 Solid results: 9% increase in Total revenues $1,250 $1,225 2% Recurring revenues and Adjusted Recurring fee revenues 835 767 9% EPS growth of 5% Event-driven fee revenues $39 $68 (43)% 2.2 Event-driven revenue we
Slide 11: Third Quarter 2020 Revenue Growth Drivers
Third Quarter 2020 Revenue Growth Drivers ▪ Third Quarter 2020 Recurring fee revenues grew 9% to $835 million Organic Growth: 3% $623M +6 pts. +9% $576M +5 pts. $835M (2) pts. 0 pt. $767M ▪ Third Quarter 2020 Total revenues grew 2% to $1,250 million +5 pts. $1,225M +2% (2) pts. 0 pt. (1) pt. $1,250M
Slide 12: Third Quarter Fiscal 2020 ICS Results
Third Quarter Fiscal 2020 ICS Results Total Revenues Recurring Revenues Highlights -3% +2% • Covid-19 related production shifts $1,006 $980 $520 $529 reduced Equity proxy revenues by $15- 20 million, offsetting impact of 7% stock $136 $153 record growth $520 $529 $87 $82 • Higher volumes led by post
Slide 13: Event-Driven Revenue: lowest Q3 since FY'14
Event-Driven Revenue: lowest Q3 since FY’14 Dollars in millions Q3 FY14-19 FY14 FY15 FY16 FY17 FY18 FY19 FY20 Average Equity & Other 16 16 17 18 40 35 22 24 Mutual Fund 22 32 32 43 27 33 17 31 Total 38 48 48 61 67 68 39 55 Year to Date FY14-19 FY14 FY15 FY16 FY17 FY18 FY19 FY20 Average Equity & Othe
Slide 14: Third Quarter Fiscal 2020 GTO Results
Third Quarter Fiscal 2020 GTO Results Total GTO Revenues Highlights • 23% revenue growth, including 11% +23% organic growth and continued benefit $305 from recent acquisitions • Scalable and resilient technology $248 processed record volumes • Client onboarding activity remains on track despite work
Slide 15: Strong Balance Sheet
Strong Balance Sheet BBB+ (S&P, Fitch) Investment-Grade Credit Ratings Baa1 (Moody’s) March 31, 2020 Cash and cash equivalents $402M Available Borrowing Capacity1 $1.1B Total Liquidity $1.5B Leverage Ratios (Non-GAAP) Net Debt2 1.9x Adjusted Gross Debt3 2.4x Next Maturity $400M in September 2020 (1)
Slide 16: Fiscal Year 2020 Guidance – As of May 8, 2020
Fiscal Year 2020 Guidance – As of May 8, 2020 Guidance - Updated Change / Update(1) Recurring fee revenue growth 8 – 10% No Change Total revenue growth Expected to be at low 3 – 6% end of range Operating income margin – GAAP ~14% No Change Adjusted Operating income ~18% No Change margin – Non-GAAP D
Slide 17: Recurring Revenue in 2008/09 Global Financial Crisis
Recurring Revenue in 2008/09 Global Financial Crisis Total Recurring Fee Revenue Growth1 Organic Revenue Growth 12% Revenue Growth from Acquisitions 8% 5% 4% 1% 4% FY08 FY09 FY10 FY11 (1) Total recurring fee revenue growth %s, as reported © 2020 | 17
Slide 18: Early Thinking on FY'21
Early Thinking on FY’21 ▪ Our preliminary planning contemplates a prolonged recession ▪ Resilient business model supported by secular growth drivers . . . • Strong $330M+ backlog • Single digit position growth: Total equity / mutual fund position growth remained positive through Global Financial Cri
Slide 19: Long-Term Impact Confirms Broadridge Business Model and Supports Future Growth
Long-Term Impact Confirms Broadridge Business Model and Supports Future Growth ▪ Broadridge will continue investing to support future growth ▪ Covid-19 crisis strengthens long-term trends on mutualization, digitization and data driving Broadridge’s growth ▪ New focus on resiliency and enhanced digit
Slide 20: Nine Months Fiscal Year 2020 vs. Nine Months Fiscal Year 2019
Nine Months Fiscal Year 2020 vs. Nine Months Fiscal Year 2019 © 2020 | 20
Slide 21: Nine Months 2020 Revenue Growth Drivers
Nine Months 2020 Revenue Growth Drivers ▪ Nine Months Fiscal 2020 Recurring fee revenues grew 8% to $2,106 million Organic Growth: 2% $623M +6 pts. $1,272M+8% $576M +6 pts. $2,106M $1,179M (2) pts. (1) pt. $1,947M ▪ Nine Months Fiscal 2020 Total revenues grew by 1% to $3,167 million $576M +5 pts. +1
Slide 22: Nine Months 2020 Segment Revenue Growth and Drivers
Nine Months 2020 Segment Revenue Growth and Drivers Dollars in millions 9M 2019 2020 Growth Investor Communication Solutions Revenues1 Recurring Fee Revenues $ 1,214 $ 1,246 3 % Event-Driven Fee Revenues 193 110 (43)% Distribution Revenues 1,082 1,042 (4)% Total ICS Revenues $ 2,489 $ 2,398 (4)% Glo
Slide 23: Supplemental Reporting Detail - Product Line Reporting
Supplemental Reporting Detail - Product Line Reporting1 (1) FY2019 revenues have been revised to reflect the Broadridge Advisor Solutions organizational change. This change had the effect of transferring revenues previously reported in the ICS segment to the GTO segment. In the aggregate, the Total
Slide 24: 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 © 2020 | 24
Slide 25: Non-GAAP Financial Measures
Non-GAAP Financial Measures Adjusted Operating Income, Adjusted Operating Income Margin, Adjusted Net Earnings and Adjusted Earnings Per Share, Adjusted EBITDA and EBITDAR Adjusted Operating income, Adjusted Operating income margin, Adjusted Net earnings and Adjusted earnings per share reflect Opera
Slide 26: Reconciliation of GAAP to Non-GAAP Measures (Unaudited)
Reconciliation of GAAP to Non-GAAP Measures (Unaudited) (a) Calculated using the GAAP effective tax rate, adjusted to exclude $1.9 million and $9.9 million of excess tax benefits associated with stock-based compensation for the three and nine months ended March 31, 2020, and $1.3 million and $9.2 mi
Slide 27: Reconciliation of GAAP to Non-GAAP Measures (Unaudited)
Reconciliation of GAAP to Non-GAAP Measures (Unaudited) (a) Calculated using the GAAP effective tax rate, adjusted to exclude $1.9 million and $9.9 million of excess tax benefits associated with stock-based compensation for the three and nine months ended March 31, 2020, and $1.3 million and $9.2 mi
Slide 28: Reconciliation of GAAP to Non-GAAP Measures (Unaudited)
Reconciliation of GAAP to Non-GAAP Measures (Unaudited) Note: Amounts may not sum due to rounding. © 2020 | 28
Slide 29: Reconciliation of GAAP to Non-GAAP Measures - FY20 Guidance (Unaudited)
Reconciliation of GAAP to Non-GAAP Measures - FY20 Guidance (Unaudited) FY20 Adjusted Earnings Per Share Growth Rate (a) Diluted earnings per share growth (GAAP) (7) – (3) % Adjusted earnings per share growth (Non-GAAP) 5 – 7 % FY20 Adjusted Operating Income Margin (b) Operating income margin % (GAA
Slide 30: Broadridge Investor Relations Contacts
Broadridge Investor Relations Contacts W. Edings Thibault Tel: 516-472-5129 Email: edings.thibault@broadridge.com Elsa Ballard Tel: 212-973-6197 Email: elsa.ballard@broadridge.com © 2020 | 30
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