Broadridge Financial Solutions, Inc. · NYSE:BR
Broadridge Financial Solutions — Investor Presentation (November 2022)
39 slides from Broadridge Financial Solutions's investor presentation, Nov 15, 2022
Slide 1: Scaling a Global Fintech Leader
0© 2022 | Scaling a Global Fintech Leader Investor Presentation November 2022 EXHIBIT 99.1
Slide 2: Forward-Looking Statements
1© 2022 | 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") contains “forward-looking statements” within the meaning of the Private Securities Litigation
Slide 3: Use of Non-GAAP financial measures, KPIs and foreign exchange rates
2© 2022 | Use of Non-GAAP financial measures, KPIs and foreign exchange rates Use of Non-GAAP Financial Measures This presentation includes certain Non-GAAP financial measures including Adjusted Operating income, Adjusted Operating income margin, Adjusted Net earnings, Adjusted earnings per share (“
Slide 4: A clear path for long term growth
3© 2022 | A clear path for long term growth A global Fintech leader addressing a large and growing market Three franchise businesses executing on clear growth strategies grounded in long term trends Long track record delivering consistent growth and strong total shareholder returns 2014 Invest for G
Slide 5: Broadridge is a global Fintech leader
4© 2022 | Broadridge is a global Fintech leader Managing proxy voting for 750 million equity shareholder positions Powering $9T per day in fixed income and equity trades Distributing more than 7B critical communications each year 750 MILLION $9 TRILLION 7 BILLION Broadridge powers the critical infra
Slide 6: Strong track record of delivering growth and value
5© 2022 | $4.19 $4.66 $5.03 $5.66 $6.46 2.5 3.5 4.5 5.5 6.5 7.5 1000 1500 2000 2500 3000 3500 4000 FY'18 FY'19 FY'20 FY'21 FY'22 Recurring revenue growth Adjusted EPS Strong track record of delivering growth and value $M except for per share measures 10% Recurring revenue average annual growth 11% A
Slide 7: Broadridge has a $60 billion and growing market opportunity
6© 2022 | Technology and operations spend by global banks is over $190 Billion Broadridge has a $60 billion and growing market opportunity $60B CURRENT OPPORTUNITY $22B GOVERNANCE $23B CAPITAL MARKETS $16B WEALTH
Slide 8: Three strong growing franchises with $3.7 billion in Recurring revenue
7© 2022 | Capital Markets $903M Recurring Revenue 14% Average Annual Growth Wealth & Investment Management $550M Recurring Revenue 11% Average Annual Growth Governance $2.3B Recurring Revenue 8% Average Annual Growth $3.7B FY’22 RECURRING REVENUE Three strong growing franchises with $3.7 billion in
Slide 9: Track record of delivering consistent growth and strong TSR
8© 2022 | Track record of delivering consistent growth and strong TSR FY’14 – FY’17 (CAGR) FY’17 – FY’20 (CAGR) Three-year Growth Objectives (CAGR) FY’20 – FY’23 Organic Recurring revenue growth1 5% 5% 5-7% Recurring revenue growth 7%2 7% 7-9% Adj. Operating Income Margin expansion (bps/ year) (Non-
Slide 10: Investor Communication Solutions Segment Overview
9© 2022 | Investor Communication Solutions SEGMENT OVERVIEW
Slide 11: ICS Strategy
10© 2022 | ICS Strategy Extend our strong and growing Governance franchise Grow End-to-End Issuer Solutions Build Data-Driven Fund Solutions Drive Next-Gen Regulatory Transform Omni-Channel Communications A leader at the heart of a powerful governance network Recurring revenues of $2.3B and average
Slide 12: Our network links investors, asset managers, and issuers across North America
11© 2022 | Our network links investors, asset managers, and issuers across North America 170M+ Retail shareholder accounts 120,000+ Institutional shareholders 30,000+ Mutual funds and ETFs ISSUERS OF SECURITIES SHAREHOLDERS 200,000+ Financial advisors 9,000+ Corporate issuers REGULATORY BODIES & TRA
Slide 13: Key volume drivers: position and trade volume growth
12© 2022 | 1% 2% 8% 7% 3% 8% 11% 6% 10% 26% 18% 9% 11% 11% 8% 4% 4% 10% 9% 2% 10% 14% FY'12 FY'13 FY'14 FY'15 FY'16 FY'17 FY'18 FY'19 FY'20 FY'21 FY'22 Equity MF/ETF ITG EQUITY & MUTUAL FUND/ETF POSITION GROWTH Key volume drivers: position and trade volume growth 1% (4)% 8% 3% 2% 3% 13% 6% 9% 12% 1%
Slide 14: The importance of corporate governance continues to grow
13© 2022 | The importance of corporate governance continues to grow Technology is driving increased participation and diversification for retail investors New technologies are lowering the cost of investing and bringing in new investors. ETFs Managed Accounts Zero commission trading Enhanced
Slide 15: ICS Segment Overview
14© 2022 | ICS Segment Overview FY'18 FY'19 FY'20 FY'21 FY'22 8% ICS FISCAL YEAR RECURRING REVENUES $615 $216 $364 $1,075 FY'21 FY'22 +11% $2,270 YoY Growth +15% +6% +14% 8% Regulatory Customer Communications Data-Driven Fund Solutions Issuer Avg. Annual Growth 4% 7% 6% $2.3B11% 11%
Slide 16: Global Technology and Operations Segment Overview
15© 2022 | Global Technology and Operations SEGMENT OVERVIEW
Slide 17: GTO Fiscal Year Recurring Revenues
16© 2022 | $701M $558M GTO FISCAL YEAR RECURRING REVENUES $550 $903 FY'21 FY'22 $1,452 +39% +5% YoY Growth FY'18 FY'19 FY'20 FY'21 FY'22 Wealth & Investment Management Capital Markets 18% 4%10% 24%13% Avg. Annual Growth $1.5B GTO Strategy: Grow Capital Markets franchise and continue building next-ge
Slide 18: Capital Markets Overview
17© 2022 | Capital Markets Overview 1. In equity and fixed income trades processed on average per day • A global leader in post-trade processing for cash securities • Continued growth driven by evolution of global banks • Launching AI-powered fixed income trading platform • Itiviti adds strength, sc
Slide 19: Itiviti (BTCS) acquisition is delivering value for Broadridge
18© 2022 | Itiviti (BTCS) acquisition is delivering value for Broadridge 1 Significantly strengthen Capital Markets franchise Deepening relationships at key clients Enhancing liquidity, market making, and trade processing across trade lifecycle Developing capabilities to drive front-to-back so
Slide 20: Wealth & Investment Management Overview
19© 2022 | • Leading provider of back-office capabilities • Strong set of differentiated component solutions for front- and middle-office • Launching the industry’s only unified front-to-back technology platform • Growing Integrated Investment Management Suite Wealth & Investment Management Overview
Slide 21: Broadridge Business Model
20© 2022 | Broadridge Business Model
Slide 22: The Broadridge financial model
21© 2022 | The Broadridge financial model is focused on driving steady revenue growth and consistent earnings per share growth, generated by: Continued margin expansion from our scale and operational efficiencies Balanced capital allocation leveraging our strong free cash flow businesses Investments
Slide 23: Closed sales
22© 2022 | FY'20 FY'21 FY'22 $224 $231 Closed sales $ in millions CLOSED SALES FY'21 FY'22 FY’22 SALES BACKLOG $385 $430 12% 12% % OF RECURRING REVENUE $279 +12%
Slide 24: Operating income margin
23© 2022 | 13.8% 15.0% 13.8% 13.6% 13.3% Operating income margin Note: Information about our use of Non-GAAP measures and a reconciliation to closest GAAP measures may be found on slides 29-37 15.9% 17.1% 17.5% FY'18 FY'19 FY'20 FY'21 FY'22 +120 bps +40 bps +60 bps Efficiency Contributions from busi
Slide 25: Total Capital Returns
24© 2022 | TOTAL CAPITAL RETURNS $1.94 $2.16 $2.30 $2.56 $2.90 33% 11% 6% 11% 13% DIVIDENDS PER SHARE M&A Client Platform Investments CapEx and Software Capital allocation 2 1. Includes Software purchases and capitalized internal use software. 2. Net investments on new client conversions, including
Slide 26: Fiscal Year 2023 Guidance
25© 2022 | Fiscal Year 2023 Guidance FY’23 Guidance Updates/ Changes Recurring revenue growth constant currency - Non-GAAP 6 - 9% No Change Adjusted Operating income margin - Non-GAAP Increase of ~ 50 bps No Change Adjusted earnings per share growth - Non-GAAP 7 - 11% No Change Closed sales $270M -
Slide 27: Key messages as of November 2, 2022 earnings call
26© 2022 | Key messages as of November 2, 2022 earnings call Broadridge reported strong first quarter results with 9% Recurring revenue growth constant currency, and earnings modestly above our expectations 1 2 3 4 Broadridge is driving continued innovation and progress on key initiatives across Gov
Slide 28: Summary financial results
27© 2022 | Summary financial results $ in millions, except per share data FIRST QUARTER SUMMARY FINANCIAL RESULTS 2023 2022 Inc./(Dec.) Recurring revenues $806 $750 7% Total revenues 1,283 1,193 8% Operating income 88 103 (15%) Adjusted Operating income – Non-GAAP 150 177 (15%) Diluted earnings per
Slide 29: Explanation of Non-GAAP measures and Reconciliation of GAAP to Non-GAAP measures
28© 2022 | Explanation of Non-GAAP measures and Reconciliation of GAAP to Non-GAAP measures
Slide 30: Non-GAAP measures
29© 2022 | Non-GAAP 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 circumstances, r
Slide 31: Non-GAAP measures
30© 2022 | Non-GAAP measures We exclude Acquisition and Integration Costs, IBM Private Cloud Charges, Real Estate Realignment and Covid-19 Related Expenses, the Russia-Related Exit Costs, Investment Gains, the Software Charge, the Gain on Acquisition-Related Financial Instrument and the Gain on Sale
Slide 32: Reconciliation of GAAP to Non-GAAP Measures
31© 2022 | 1Confidential and Proprietary | Reconciliation of GAAP to Non-GAAP Measures Note: Amounts may not sum due to rounding. Year ended June 30, Dollars in millions 2022 2021 2020 2019 2018 2017 2016 2015 2014 Operating Income (GAAP) $759.9 $678.7 $624.9 $652.7 $598.1 $534.0 $502.3 $468.5 $418.
Slide 33: Reconciliation of GAAP to Non-GAAP Measures (Unaudited)
32© 2022 | 1Confidential and Proprietary | Reconciliation of GAAP to Non-GAAP Measures (Unaudited) Year ended June 30, Dollars in millions, except per share amounts 2022 2021 2020 2019 2018 2017 2016 2015 2014 Diluted earnings per share (GAAP) $4.55 $4.65 $3.95 $4.06 $3.56 $2.70 $2.53 $2.32 $2.12 Ad
Slide 34: Reconciliation of GAAP to Non-GAAP Measures (Unaudited)
33© 2022 | 1Confidential and Proprietary | Reconciliation of GAAP to Non-GAAP Measures (Unaudited) Three Months Ended Sept. 30 Dollars in millions 2022 2021 Operating income (GAAP) $87.5 $103.3 Adjustments: Amortization of Acquired Intangibles and Purchased Intellectual Property 55.9 68.7 Acquisitio
Slide 35: Reconciliation of GAAP to Non-GAAP Measures (Unaudited)
34© 2022 | 1Confidential and Proprietary | Reconciliation of GAAP to Non-GAAP Measures (Unaudited) (a) Real Estate Realignment Expenses impacted Adjusted earnings per share by $0.00 for the three months ended September 30, 2021. Covid-19 Related Expenses impacted Adjusted earnings per share by $0.02
Slide 36: Reconciliation of GAAP to Non-GAAP Measures (Unaudited)
35© 2022 | 1Confidential and Proprietary | Reconciliation of GAAP to Non-GAAP Measures (Unaudited) Global Technology and Operations Capital Markets Wealth and Investment Management Total Recurring revenue growth (GAAP) 9% 4% 7% Impact of foreign currency exchange 5% 2% 4% Recurring revenue growth co
Slide 37: Reconciliation of GAAP to Non-GAAP Measures (Unaudited)
36© 2022 | 1Confidential and Proprietary | Reconciliation of GAAP to Non-GAAP Measures (Unaudited) (a) Real Estate Realignment Expenses were $23.0 million, $29.6 million, and $0.0 million for the year ended June 30, 2022, 2021, and 2020, respectively. Covid-19 Related Expenses were $7.5 million, $15
Slide 38: Fiscal Year 2023 guidance reconciliation
37© 2022 | 1Confidential and Proprietary | Fiscal Year, 2023 FY23 Recurring revenue growth (a) Impact of foreign currency exchange – Recurring revenue growth constant currency – Non-GAAP 6-9% FY23 Adjusted Operating income margin (b) Operating income margin % - GAAP Increase of ~150 bps Adjusted Ope
Slide 39: Broadridge Investor Relations Contacts
38© 2022 | W. Edings Thibault Sean Silva broadridgeir@broadridge.com Broadridge Investor Relations Contacts
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