Broadridge Financial Solutions, Inc. · NYSE:BR
Broadridge Financial Solutions — Q1 2014 Earnings Presentation
24 slides from Broadridge Financial Solutions's earnings presentation, Nov 7, 2013
Slide 1: Earnings Webcast & Conference Call First Quarter 2014
Exhibit 99.2 Earnings Webcast & Conference Call First Quarter 2014 © 2013 Broadridge Financial Solutions, Inc. Broadridge and the Broadridge logo are registered trademarks of Broadridge Financial Solutions, Inc. November 7, 2013
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 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: Today's Agenda
Today’s Agenda Opening Remarks and Other Rich Daly, CEO Key Topics First Quarter 2014 Dan Sheldon, CFO Highlights and Segment Results Summary Rich Daly, CEO Q&A Rich Daly, CEO Dan Sheldon, CFO Closing Remarks Rich Daly, CEO 2
Slide 4: Key Topics
Opening Remarks Key Topics: Financial Highlights Closed Sales Performance Key Updates 3
Slide 5: Financial Highlights
Financial Highlights Very strong recurring revenue growth Recurring and total revenues were up 11% and 10%, respectively Recurring revenue performance was primarily due to Net New Business (closed sales less client losses), as expected, and by internal growth Event-driven fees increased ~$8M primari
Slide 6: Closed Sales Performance
Closed Sales Performance Recurring revenue closed sales for the quarter were up 10% Recurring revenue closed sales were $15M compared to ~$14M the previous year No large transactions of $5M or greater Usually, Q1 closed sales of less than $5M contribute the smallest amount to the full year Pipeline
Slide 7: Key Updates
Key Updates SEC approved NYSE’s proposal on proxy distribution fees and EBIP Approval is a win for all constituents - investors, corporate issuers, broker- dealers, regulators and Broadridge Approval of the Enhanced Broker Internet Platform (EBIP) is expected to add additional momentum to our growin
Slide 8: Key Financial Drivers
Key Financial Drivers 1Q Actual FY14 FY14 FY13 Range Growth Drivers as a % of Recurring Revenues Closed Sales (Recurring) 8% 6% 7-8% Client Losses (2%) (1%) (3%) Net New Business 6% 5% 4-5% (a) Internal Growth 4% (1%) 0-1% Organic Growth 10% 4% 4-6% Acquisitions 1% 0% 1% Total Recurring Revenue Grow
Slide 9: Segment Results & Forecast – Investor Communication Solutions
Segment Results & Forecast – Investor Communication Solutions Recurring/Growth (Non-GAAP)Revenue/Growth EBIT/Growth (Non-GAAP) Margin/Growth (Non-GAAP) Q1: $175M / 11% $376M / 11% $41M / 50% 10.9% / 290 bps FY14: $903 to $921M / 6 to 8% $316 to $328M / 5 to 9% 17.7% to 18.1% / 50 $1,785 to $1,812M /
Slide 10: Segment Results & Forecast – Securities Processing Solutions
Segment Results & Forecast – Securities Processing Solutions Revenue/Growth EBIT/Growth (Non-GAAP) Margin/Growth (Non-GAAP) Q1 $169M / 10% $32M / 237% 18.8% / 1270 bps FY14: $678M to $695M / 3 to 5% $100M to $117M / 18 to 38% 14.8% to 16.8% / 190 to 390 bps Total revenue was higher in Q1: Net New Bu
Slide 11: Summary
Summary Great start to our fiscal year 2014 Recurring revenues continue to be strong Recurring closed sales pipeline is robust and growing Positive equity volume and mutual fund trends driving favorable market-based activities across Broadridge Will have a clearer view of any ongoing full year impac
Slide 12: Q&A
Q&A There are no slides during this portion of the presentation 11
Slide 13: Closing Comments
Closing Comments There are no slides during this portion of the presentation 12
Slide 14: Appendix
13 Appendix Bg Broadridge
Slide 15: Segment Results & Forecast – Other & Foreign Exchange (FX)
Segment Results & Forecast – Other & Foreign Exchange (FX) FY14 Range 1Q14 Low High Corporate Expenses $(3)M $(39)M $(47)M Interest Expense, net $(6)M $(26)M $(28)M FX - P&L - Revenue $0M $10M $10M - EBIT $5M $15M $15M - Transaction Activity $1M $(1)M $(1)M Corporate Expenses: Q1 FY14 Corporate Expe
Slide 16: Broadridge Q1 FY14
Broadridge Q1 FY14 Revenue Earnings FY13 FY14 FY13 FY14 Q1 Q1 Q1 Q1 $339 $376 ICS $27 $41 8% 11% Growth % / Margin % 8.0% 10.9% $154 $169 SPS $9 $32 -3% 10% Growth % / Margin % 6.1% 18.8% $493 $545 Total Segments $37 $73 5% 10% Margin % 7.4% 13.3% $0 ($0) Other (a) ($7) ($3) $2 $0 FX (b) $3 $6 $496
Slide 17: Broadridge FY14 Guidance
Broadridge FY14 Guidance Revenue Earnings FY13 FY14 Range FY13 FY14 Range Actual Low High ($ 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 % 12.9% 14.8% 16.8% $2,421 $2,4
Slide 18: Cash Flow – Q1 FY14 Results and FY14 Forecast
Cash Flow –Q1 FY14 Results and FY14 Forecast Free Cash Flow - Non-GAAP Unaudited ($ millions) Three Months Ending FY14 Range(a) September 2013 Low High Free Cash Flow (Non-GAAP) : Net earnings from operations (GAAP) $ 44 $ 233 $ 246 Depreciation and amortization (includes other LT assets) 23 100 110
Slide 19: Recurring Revenue Closed Sales to Revenue Contribution
Recurring Revenue Closed Sales to Revenue Contribution (a) (b) ($ in millions) Closed Sales Revenue Contribution Backlog Forecast Forecast Forecast FY14 FY14 FY14 ICS (less than $5M deals) $60-70 ~$50-60 ~$50-60 ~Contribution to revenue growth 2-3% SPS (less than $5M deals) $30-40 ~$50-60 ~$80-100 ~
Slide 20: Revenues and Closed Sales FY08-FY13
Revenues and Closed Sales FY08-FY13 ($ in millions) CAGR Forecast Recurring Fee Revenues FY08 FY09 FY10 FY11 FY12 FY13 FY08-FY13 FY14 ICS $ 567 $ 594 $ 632 $ 720 $ 798 $ 850 8% $903-921 Growth 7% 5% 6% 14% 11% 7% 6-8% SPS $ 534 $ 559 $ 536 $ 594 $ 655 $ 661 4% $678-695 Growth 1% 5% -4% 11% 10% 1% 3-
Slide 21: Reconciliation of Non-GAAP to GAAP Measures
Reconciliation of Non-GAAP to GAAP Measures Reconciliation of EPS Guidance 1Q13 1Q14 FY11 FY12 FY13 FY14 Range Actual Actual Actual Actual Actual Low High Diluted EPS (Non-GAAP) $0.18 $0.39 $1.47 $1.67 $1.88 $2.00 $2.10 Acquisition Amortization and Other Costs ($0.03) (0.03) ($0.10) ($0.12) ($0.12)
Slide 22: ICS Key Segment Revenue Stats
ICS Key Segment Revenue Stats RC= Recurring Fee Revenues 1Q13 1Q14 Type ED= Event-Driven In millions Proxy Equities $ 25.6 $ 26.0 RC Stock Record Position Growth -4% 1% Pieces 20.3 21.5 Mutual Funds $ 6.5 $ 15.8 ED Pieces 8.2 20.4 Contests/Specials $ 3.0 $ 4.2 ED Pieces 2.7 4.4 Total Proxy $ 35.1 $
Slide 23: SPS Key Segment Revenue Stats
SPS Key Segment Revenue Stats RC= Recurring 1Q13 1Q14 Type ED= Event-Driven In millions Equity Transaction-Based Equity Trades $ 30.0 $ 32.4 RC Internal Trade Volume 780 891 Internal Trade Growth -19% 14% Trade Volume (Average Trades per Day in '000) 828 908 Non-Transaction Other Equity Services 98.
Slide 24: 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
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