Broadridge Financial Solutions, Inc. · NYSE:BR
Broadridge Financial Solutions — Investor Presentation (September 2018)
29 slides from Broadridge Financial Solutions's investor presentation, Sep 5, 2018
Slide 1: Investor Presentation September 2018
EXHIBIT 99.1 INVESTOR PRESENTATION SEPTEMBER 2018
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 is Ready For Next
Broadridge is Ready For Next Market dynamics driving strong growth for Broadridge’s technology-driven solutions Proven strategy and experienced management team to drive sustainable growth Uniquely positioned to deliver network value and capture additional, large market opportunities Successful track
Slide 5: Broadridge platform-based business model creates unique value
Broadridge platform-based business model creates unique value Deep financial services knowledge • Domain expertise • Trusted Multi-client Network managed value • Unique Capability • Scale leadership services • Data & Analytics • Significant IP approach © 2018 | 5
Slide 6: Broadridge's directly addressable market is $25-40B
Broadridge’s directly addressable market is $25-40B Large Growth Opportunity Key Market Trends CAPITAL GOVERNANCE & MARKETS COMMUNICATIONS MUTUALIZATION $10-15B $9-13B DIGITIZATION $6-12B DATA & ANALYTICS WEALTH MANAGEMENT 100% = $25-40B © 2018 | 6
Slide 7: The industry's leading choice
The industry’s leading choice GOVERNANCE CAPITAL MARKETS WEALTH MANAGEMENT • Process 80% of outstanding • Clear and settle over $5T • Support 50M+ accounts shares in the United States, per day through our technology 50%+ for rest of world platform • Serve 18 of 23 US primary • Distribute 90%+ of bro
Slide 8: Executing Against Investor Day Themes
Executing Against Investor Day Themes Extend Governance Drive Capital Markets Build Wealth Management • Driving next-gen • Extending global post • Continued strong interest regulatory communications trade technology platform from key clients in 30e-3 and Enhanced Continued progress integrated We
Slide 9: Extend Governance
Extend Governance 5,000+ 150,000+ CORPORATE ISSUERS INSTITUTIONAL SHAREHOLDERS Key Opportunities • Transform regulatory communications • Develop omni-channel communications 24,000+ 140M+ • Expand issuer services MUTUAL FUNDS RETAIL SHAREHOLDER and continue to bring 1,100+ ACCOUNTS transparency to BA
Slide 10: Drive Capital Markets
Drive Capital Markets Asset Class and Function Coverage Equities Fixed Trade & Foreign Exchange Exchange Income Position & Money Traded Financing Markets Derivatives Drive global technology platform SOLUTION COMPONENTS Managed Services Options Extend with additional Unified Portal solutions Core Com
Slide 11: Build Wealth Management
Build Wealth Management • Educational content • Enriched, digital communications • Clearance & settlement • Trading and account • Client and regulatory • Wealth management servicing reporting Drive winning targeted tools • Business process solutions • Targeted marketing automation & workflows • Weal
Slide 12: Broadridge business model is strong
Broadridge business model is strong • Large, recurring revenue base with good visibility Sustainable Growth • Organic strength driven by large addressable market opportunity Steady Margin • Continued scale and operational leverage Expansion • Focus on operational efficiencies • 100+% free cash flow
Slide 13: Fiscal Year 2018 Revenue Growth Drivers
Fiscal Year 2018 Revenue Growth Drivers ▪ Fiscal Year 2018 Total revenues grew 5% to $4.3 billion +2% +4% 0% +5% -1% $4,330M $ 4,143M ▪ Fiscal Year 2018 Recurring fee revenues grew 6% to $2.6 billion Organic Growth: 5% +1% +6% +6% -3% +2% $2,610M $2,451M Note: Amounts may not sum due to rounding © 2
Slide 14: Fiscal Year 2018 GAAP and Adjusted Operating Income and Adjusted EPS
Fiscal Year 2018 GAAP and Adjusted Operating Income and Adjusted EPS $ in millions, except per share amounts Year-over-Year Change in Operating Income Year-over-Year Change in EPS and and Adjusted Operating Income Adjusted EPS +10% +34% +32% +12% © 2018 | 14
Slide 15: Capital Allocation and Summary Balance Sheet
Capital Allocation and Summary Balance Sheet $ in millions Select Uses of Cash in Free Cash Flow FY18 (a) FY18 Free cash flow includes $41 million from excess tax benefits from stock-based compensation (b) Includes purchase of intellectual property assets (c) Purchases of Treasury stock, net of proc
Slide 16: Record Sales Building Revenue Backlog
Record Sales Building Revenue Backlog $ in millions Year-over-Year Closed Sales Recurring Revenue Backlog as of Performance1 June 301,2 Total ~$295 +14% (1) Closed sales and Recurring Revenue Backlog are Broadridge estimates and subject to revision. (2) Recurring Revenue Backlog represents an estima
Slide 17: Fiscal Year 2019 Guidance
Fiscal Year 2019 Guidance* Recurring fee revenue growth 5 - 7% Total revenue growth 3 - 5% Operating income margin - GAAP ~14.5% Adjusted Operating income margin - Non-GAAP ~16.5% Diluted earnings per share growth 12 - 16% Adjusted earnings per share growth - Non-GAAP 9 - 13% Free cash flow - Non-GA
Slide 18: FY17 - FY20 three year growth objectives
FY17 - FY20 three year growth objectives Winning formula for top quartile TSR Recurring Fee Revenue Growth 7-9% Total Revenue Growth 5-7% Adjusted Op Income Margin Expansion ~50bps/yr Adjusted EPS Growth 14-18% Note: Compound annual growth rates (CAGRs), except margin. Three year Adjusted EPS Growth
Slide 19: Appendix
Appendix: Ba Broadridge™
Slide 20: Supplemental Reporting Detail
Supplemental Reporting Detail © 2018 | 20
Slide 21: Fourth Quarter 2018 Revenue Growth Drivers
Fourth Quarter 2018 Revenue Growth Drivers ▪ Fourth Quarter 2018 Total revenues declined 2% to $1.3 billion +4% 0% -2% -2% $1,346M -4% $1,320M ▪ Fourth Quarter 2018 Recurring fee revenues grew 7% to $862 million Organic Growth: 6% +7% +5% +3% +1% $862M $806M - 2% Note: Amounts may not sum due to rou
Slide 22: Fourth Quarter 2018 GAAP and Adjusted Operating Income and Adjusted EPS
Fourth Quarter 2018 GAAP and Adjusted Operating Income and Adjusted EPS $ in millions, except per share amounts Year-over-Year Change in Operating Income Year-over-Year Change in EPS and and Adjusted Operating Income Adjusted EPS +9% +10% -10% -11% © 2018 | 22
Slide 23: Segment Results
Segment Results ($ in millions) Investor Communication Solutions ("ICS") 4Q Fiscal Year 2017 2018 Change 2017 2018 Change Recurring fee revenues $589 $628 7% $1,626 $1,699 5% Event-driven fee revenues 91 61 (33)% 219 284 30% Distribution revenues 476 423 (11)% 1,554 1,513 (3)% Total revenues $1,156
Slide 24: Annual Excess Tax Benefits: FY14-FY18
Annual Excess Tax Benefits: FY14-FY18 © 2018 | 24
Slide 25: Tax Act Impact to Broadridge
Tax Act Impact to Broadridge 2017 2018 2019 FY FY FY $ in millions Indicative Effective Tax Rate (GAAP) 33.1% 23.7% ~20% Net Tax Charges1 - ($15) - Tax Rate Excluding Non-Recurring Gains & Charges2 33.7% 21.0% ~20% Effective Tax Rate (GAAP) 33.1% 23.7% ~20% Net Tax Charges1 - ($15) - Excess Tax Bene
Slide 26: GAAP Reconciliations
GAAP Reconciliations © 2018 |
Slide 27: Reconciliation of GAAP to Non-GAAP Measures
Reconciliation of GAAP to Non-GAAP Measures (Unaudited - Note: Amounts may not sum due to rounding) $ in millions, except per share amounts Three Months Ended June 30, Fiscal Year 2018 2017 2018 2017 Operating income (GAAP) $ 265.4 $ 297.0 $ 594.9 $ 531.6 Adjustments: Amortization of Acquired Intang
Slide 28: Reconciliation of GAAP to Non-GAAP Measures
Reconciliation of GAAP to Non-GAAP Measures (Unaudited - Note: Amounts may not sum due to rounding) Three Months Ended June 30, Fiscal Year 2018 2017 2018 2017 Diluted earnings per share (GAAP) $ 1.72 $ 1.57 $ 3.56 $ 2.70 Adjustments: Amortization of Acquired Intangibles and Purchased Intellectual P
Slide 29: Reconciliation of GAAP to Non-GAAP Measures - FY19 Guidance
Reconciliation of GAAP to Non-GAAP Measures - FY19 Guidance (Unaudited) Adjusted Earnings Per Share Growth Rate (1) Diluted earnings per share (GAAP) 12% - 16% Adjusted earnings per share (Non-GAAP) 9% - 13% Adjusted Operating Income Margin (2) Operating income margin % (GAAP) ~14.5% Adjusted Operat
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