Broadridge Financial Solutions, Inc. · NYSE:BR
Broadridge Financial Solutions — Q4 FY2020 Earnings Presentation
30 slides from Broadridge Financial Solutions's earnings presentation, Aug 11, 2020
Slide 1: Earnings Webcast and Conference Call: Fourth Quarter and Fiscal Year 2020
EXHIBIT 99.2 Earnings Webcast and Conference Call FOURTH QUARTER AND FISCAL YEAR 2020 August 11, 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 Solu tions, 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 ("G AAP") except where otherwise noted. In certain circumsta
Slide 4: Highlights
Highlights ▪ Broadridge is executing well in this new and challenging environment • Health and safety of our associates remains our top priority • Our associates and technology are processing record investor communication levels and heavy trading volumes ▪ Exceptional Fourth Quarter results highligh
Slide 5: Fiscal Year 2020 Results: ICS and GTO Revenues
Fiscal Year 2020 Results: ICS and GTO Revenues ICS GTO Dollars in millions +1% $3,468 $3,491 +18% $1,174 $996 Recurring $1,764 $1,862 +6% Event- Driven $244 $178 (27)% Distribution $1,460 $1,451 FY19 FY20 FY19 FY20 Note: Amounts may not sum due to rounding. | © 2020 4
Slide 6: Record Sales Building Revenue Backlog
Record Sales Building Revenue Backlog Year-over-Year Closed Sales Recurring Revenue Backlog as of Performance1 June 301,2 • Record full year Closed Sales of $239M; Dollars in millions including Q4 as second highest quarter in +8% our history • Next-gen Governance included strong VSM sales and new ma
Slide 7: Performance vs. FY17-FY20 Three Year Growth Objectives
Performance vs. FY17-FY20 Three Year Growth Objectives Performance Investor Day FY17-FY20 Growth Objectives 3-year CAGR Organic recurring fee revenue growth 5 – 7% 5% ✓ Recurring fee revenue growth 7 – 9% 7% ✓ Total revenue growth 5 – 7% 3% Adjusted Operating income margin expansion ~50bps/yr. ~83bp
Slide 8: Regulatory Update
Regulatory Update Modernization • Proposes summary annual, semi-annual reports to replace current long-form reports of mutual fund and eliminates overlapping annual prospectus as part of layered approach • Positive direction for fund industry, individual investors, and Broadridge communications • Re
Slide 9: Broadridge Remains Well-Positioned for Growth
Broadridge Remains Well-Positioned for Growth ▪ Covid-19 pandemic is accelerating long-term trends driving our growth • Need for resiliency is adding urgency to mutualization discussions • Digitization is likely to accelerate • Ability to adapt data and new technologies critical to driving different
Slide 10: Financial Highlights
Financial Highlights ▪1 Strong finish to the fiscal year ▪2 Event-Driven activity at highest point this year in Q4, but an overall modest year ▪3 Record full year Closed Sales demonstrate the strength and resilience of the Broadridge model ▪4 We have good visibility into our Recurring revenue backlo
Slide 11: Fourth Quarter 2020 Revenue Growth Drivers
Fourth Quarter 2020 Revenue Growth Drivers ▪ Fourth Quarter 2020 Recurring revenues grew 14% to $930 million Organic Growth: 10% $623M $576M +5 pts. +4 pts. +14% +7 pts. $0.9B $0.8B (2) pts. ▪ Fourth Quarter 2020 Total revenues grew 12% to $1.362 billion +3 pts. +12% +10 pts. +1 pt. (1) pt. $1,362M$
Slide 12: Fourth Quarter Fiscal 2020 ICS Results
Fourth Quarter Fiscal 2020 ICS Results Total Revenues Recurring Revenues Highlights Dollars in millions • Strong organic growth driven by 11% +12% +12% stock record growth, Covid-19 related production shifts, and record number $1,093 $616 of VSMs $980 $550 • Data and analytics product growth $265 $6
Slide 13: Event-Driven Revenues FY07 – FY20
Event-Driven Revenues FY07 – FY20 Dollars in millions $300 284 256 $250 244 59 219 203 200 199 134 $200 180 173 107 178 $194M 59 156 156 86 73 83 $150 67 135 132 71 80 54 58 52 $100 197 57 141 149 137 130 117 132 $50 113 101 98 101 98 83 75 $0 FY07 FY08 FY09 FY10 FY11 FY12 FY13 FY14 FY15 FY16 FY17 F
Slide 14: Fourth Quarter Fiscal 2020 GTO Results
Fourth Quarter Fiscal 2020 GTO Results Total GTO Revenues Highlights Dollars in millions • 19% revenue growth driven by balance +19% of organic growth and contribution $314 from acquisitions $263 • 9% Organic growth propelled by continued increase in trading volumes in both the U.S and Canada (equit
Slide 15: Fourth Quarter 2020 Operating Income and EPS
Fourth Quarter 2020 Operating Income and EPS Dollars in millions, except per share amounts Year-over-Year Change in Operating Income Year-over-Year Change in EPS and Adjusted Operating Income and Adjusted EPS | © 2020 14
Slide 16: Capital Allocation and Summary Balance Sheet
Capital Allocation and Summary Balance Sheet Select Uses of Cash Year To Date Summary Balance Sheet As of June 30, 2020 As of June 30, 2020 Dollars in millions Assets Cash and cash equivalents $ 477 1 Client Platform Spend $157 Other assets 4,413 $255 Total assets $ 4,890 CapEx2 $99 Liabilities and
Slide 17: Fiscal Year 2021 Guidance
Fiscal Year 2021 Guidance Guidance Recurring Revenue growth 2 – 6% Total revenue growth 0 – 4% Adjusted Operating income margin Increase of ~100 bps Adjusted earnings per share growth 4 – 10% Closed Sales $190 – $235M | © 2020 16
Slide 18: Fiscal Year 2020 vs. Fiscal Year 2019
Fiscal Year 2020 vs. Fiscal Year 2019 | © 2020 17
Slide 19: Fiscal Year 2020 Revenue Growth Drivers
Fiscal Year 2020 Revenue Growth Drivers ▪ Fiscal Year 2020 Recurring revenues grew 10% to $3.036 billion Organic Growth: 4% +6 pts. +10%$623M +6 pts. +1 pt. $3.0B $576M (2) pts. $2.8B ▪ Fiscal Year 2020 Total revenues grew by 4% to $4.529 billion +6 pts. $3,151M +4% (2) pts. (0) pt. -1 pt. $4.5B $4.
Slide 20: Full Year Fiscal 2020 Results
Full Year Fiscal 2020 Results ICS GTO Dollars in millions Total Revenues Recurring Revenues +18% +1% +6% $3,468 $3,491 $1,862 $1,174 $1,764 $473 $996 Equity Proxy $437 Recurring $1,764 $1,862 MF & ETF Interims $266 $285 Event Driven $244 $178 Customer Comms. $736 $735 Distribution $1,460 $1,451 Othe
Slide 21: Fiscal Year 2020 Operating Income and EPS
Fiscal Year 2020 Operating Income and EPS Dollars in millions, except per share amounts Year-over-Year Change in Operating Income Year-over-Year Change in EPS and Adjusted Operating Income and Adjusted EPS | © 2020 20
Slide 22: 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 23: 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 22
Slide 24: Non-GAAP Measures
Non-GAAP 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 Operating incom
Slide 25: 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 $5.8 million and $15.6 million of excess tax benefits associated with stock-based compensation for the three months and fiscal year ended June 30, 2020, and $10.1 million and
Slide 26: Reconciliation of GAAP to Non-GAAP Measures (Unaudited)
Reconciliation of GAAP to Non-GAAP Measures (Unaudited) Dollars in millions, except per share amounts Three Months Ended June 30, Fiscal Year 2020 2019 2020 2019 Diluted earnings per share (GAAP) $ 1.97 $ 1.55 $ 3.95 $ 4.06 Adjustments: Amortization of Acquired Intangibles and Purchased Intellectual
Slide 27: 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 26
Slide 28: Reconciliation of GAAP to Non-GAAP Measures (Unaudited)
Reconciliation of GAAP to Non-GAAP Measures (Unaudited) Dollars in millions, except per share amounts Fiscal Year 2020 2017 Diluted earnings per share (GAAP) $ 3.95 $ 2.70 Adjustments: Amortization of Acquired Intangibles and Purchased Intellectual Property 1.05 0.60 Acquisition and Integration Cost
Slide 29: Reconciliation of GAAP to Non-GAAP Measures - FY21 Guidance (Unaudited)
Reconciliation of GAAP to Non-GAAP Measures - FY21 Guidance (Unaudited) FY21 Adjusted Earnings Per Share Growth Rate (a) Diluted earnings per share growth (GAAP) 10 – 18% growth Adjusted earnings per share growth (Non-GAAP) 4 – 10% growth FY21 Adjusted Operating Income Margin (b) Operating income ma
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 29
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