Broadridge Financial Solutions, Inc. · NYSE:BR
Broadridge Financial Solutions — Q1 2022 Earnings Presentation
51 slides from Broadridge Financial Solutions's earnings presentation, Sep 9, 2021
Slide 1: Scaling a Global Fintech Leader
0© 2021 | Scaling a Global Fintech Leader First Quarter Fiscal Year 2022 Investor Presentation EXHIBIT 99.1
Slide 2: Forward-Looking Statements
1© 2021 | 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 Litigati
Slide 3: Use of Non-GAAP financial measures and KPIs
2© 2021 | Use of Non-GAAP financial measures and KPIs 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 (“EPS”), Adjusted EBITDA,
Slide 4: A clear plan for sustained growth and top quartile TSR
3© 2021 | A clear plan for sustained growth and top quartile TSR A global Fintech leader addressing a large and growing market Three franchise businesses executing on clear growth strategies Balanced capital allocation driving sustainable and consistent revenue and earnings growth 2014 Invest for Gr
Slide 5: Broadridge is a global Fintech leader
4© 2021 | Broadridge is a global Fintech leader Managing more than 2 billion critical shareholder communications per year for mutual fund and equity shareholders Powering $9T per day in fixed income and equity trades >2 BILLION $9 TRILLION Broadridge powers the critical infrastructure behind investi
Slide 6: Strong track record of delivering growth and value
5© 2021 | $2,452 $2,612 $2,760 $3,036 $3,333 $3.13 $4.19 $4.66 $5.03 $5.66 0 1 2 3 4 5 6 0 500 1000 1500 2000 2500 3000 3500 FY'17 FY'18 FY'19 FY'20 FY'21 Recurring revenue Adjusted EPS We have a strong track record of delivering growth and value $M except for per share measures 11% Recurring revenu
Slide 7: $52 billion and growing market opportunity
6© 2021 | Technology and operations spend by global banks is over $190 Billion Broadridge has a $52 billion and growing market opportunity $52B CURRENT OPPORTUNITY $19B GOVERNANCE $21B CAPITAL MARKETS $12B WEALTH
Slide 8: Committed to ongoing investment that supports future growth
7© 2021 | • Platform development including for Wealth and Global Post-Trade Management (GPTM) • Continue to scale key products such as SRD II • Enhancing data intelligence capabilities • Scaling to meet incremental position growth and trade growth • Adding QR codes to facilitate mobile proxy voting
Slide 9: Recurring revenue is broad based and growing
8© 2021 | $2.1B FY’21 RECURRING REVENUE $1.3B FY’21 RECURRING REVENUE Our recurring revenue is broad based and growing across business segments and product categories INVESTOR COMMUNICATION SOLUTIONS GLOBAL TECHNOLOGY & OPERATIONS $0.2B $1.5B $1.9B Regulatory Customer Communications Issuer Wealth &
Slide 10: Broadridge acquired Itiviti for $2.6 billion
9© 2021 | Significantly strengthens Capital Markets Franchise, with a highly complementary product suite extending our reach into the front office and enhancing its multi-asset capabilities Drives additional global scale and reach outside of North America, enhancing Broadridge’s ability to serve its
Slide 11: Segment Strategy: Investor Communication Solutions
10© 2021 | Segment Strategy: Investor Communication Solutions (“ICS”)
Slide 12: ICS Strategy
11© 2021 | 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 Leading position at the heart of a powerful governance network Recurring revenues of $2.1B and
Slide 13: Our network links investors, asset managers, and issuers
12© 2021 | 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 14: ICS Segment Overview
13© 2021 | ICS Segment Overview FY'17 FY'18 FY'19 FY'20 FY'21 $2.1B7% ICS FISCAL YEAR 2021 RECURRING REVENUES $573 $574 $157 $189 $339 $358 $792 $954 FY'20 FY'21 $1,862 $2,075 YoY Growth +20% +5% +21% 0% Regulatory Customer Communications Data-Driven Fund Solutions Issuer CAGR $1,626 $1,699 $1,764 $
Slide 15: Key volume drivers: position and trade volume growth
14© 2021 | 1% 2% 8% 7% 3% 8% 11% 6% 10% 26% 9% 11% 11% 8% 4% 4% 10% 9% 2% 10% FY'12 FY'13 FY'14 FY'15 FY'16 FY'17 FY'18 FY'19 FY'20 FY'21 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%INTERNAL TRADE GR
Slide 16: Segment Strategy: Global Technology & Operations
15© 2021 | Segment Strategy: Global Technology & Operations (“GTO”)
Slide 17: GTO Strategy: Grow Capital Markets and Wealth franchises
16© 2021 | GTO Strategy: Grow Capital Markets franchise and continue building next-gen Wealth & Investment Management franchise 1. In equity and fixed income trades processed on average per day Capital Markets Wealth & Investment Management • Leading provider of back-office capabilities • Strong set
Slide 18: GTO Segment Overview
17© 2021 | GTO Segment Overview $701M $558M GTO FISCAL YEAR 2021 RECURRING REVENUES $524 $558 $650 $701 FY'20 FY'21 $1,174 $1,258 +8% +6% YoY Growth FY'17 FY'18 FY'19 FY'20 FY'21 Wealth & Investment Management Capital Markets $1,174 $996$958 $869 $1.2B10% CAGR Note: Amounts may not sum due to roundi
Slide 19: Itiviti positions Broadridge as a global leader across the trade lifecycle
18© 2021 | Simplification Clients are looking to simplify their technology stack and operating models and reduce solution fragmentation Mutualization Market pressures are accelerating front office mutualization Front-to-back digitization Firms are looking to drive deeper integration and automation a
Slide 20: Broadridge Business Model
19© 2021 | Broadridge Business Model
Slide 21: Financial model focused on steady revenue growth
20© 2021 | 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 22: Long runway for growth and high-quality revenue mix
21© 2021 | Note: Percentages based on gross revenues before impact of FX. Amounts may not sum due to rounding. $52B ADDRESSABLE MARKET $50B $1B $2B $3B $4B Total Addressable Market Long runway for growth and a high-quality revenue mix 41% FY’17 RECURRING REVENUE GROWTH AS % OF TOTAL $4.1B 59% 67% ■
Slide 23: Record sales drove an increase in backlog
22© 2021 | FY'20 FY'21 Another year of record sales drove an increase in our backlog… FISCAL YEAR CLOSED SALES PERFORMANCE FY'18 FY'19 FY'20 FY'21 FY’21 SALES BACKLOG $242 $355 $400 $215 $233 $239 12% 12% % OF RECURRING REVENUE $ in millions
Slide 24: We continued to expand our margin
23© 2021 | Efficiency Contributions from business reengineering and internal growth Digital Margin expansion due to mix shift toward digital M&A Primarily weighted to early-stage businesses Investment Strategic investment aligned with client demand Scale Natural OpEx leverage from a SaaS business …a
Slide 25: Balanced capital allocation model
24© 2021 | We have a balanced capital allocation model… DIVIDENDS PER SHARE M&A Client Investment Spend CapEx and Software 2 1. Includes Software Purchases and capitalized internal use software. 2. Net cash spent on new client conversions, including development of platform capabilities. 3. Acquisiti
Slide 26: Steady earnings over time resulting in top quartile TSR
25© 2021 | This simple financial model has produced steady and consistent earnings over time resulting in top quartile TSR growth FY’14 – FY’17 (CAGR) FY’17 – FY’20 (CAGR) FY’21 Organic Recurring revenue growth1 5% 5% 8% Recurring revenue growth 7%2 7% 10% Adj. Operating Income Margin expansion (bps
Slide 27: FY'21 results against three-year financial objectives
26© 2021 | FY’21 results provided a strong start against our three-year financial objectives Three-year Growth Objectives (CAGR) FY20 – FY23 FY’21 Results Organic Recurring revenue growth 5-7% 8% Recurring revenue growth 7-9% 10% Adj. Operating Income Margin expansion (bps/year) (Non-GAAP) 50+ 60+ A
Slide 28: FY'22 Guidance
27© 2021 | FY’22 Guidance Recurring revenue growth 12-15% Adj. Operating Income Margin (Non-GAAP) ~19% Adj. Earnings per Share Growth (Non- GAAP) 11-15% Closed sales $240-280M Full-year guidance for fiscal year 2022 as of August 12, 2021
Slide 29: Earnings Conference Call: Fourth Quarter and Fiscal Year 2021
28© 2021 | Scaling a Global Fintech Leader E A R N I N G S C O N F E R E N C E C A L L Fourth Quarter and Fiscal Year 2021
Slide 30: Summary financial performance
29© 2021 | Summary financial performance 4Q’21 Inc./(Dec.) FY’21 Inc./(Dec.) Recurring revenues $1,065 15% $3,333 10% Total revenues 1,532 12% 4,994 10% Operating income (GAAP) 281 (6%) 679 9% Operating income margin (GAAP) 18.4% (350 bps) 13.6% (20 bps) Adjusted Operating income (Non-GAAP) 349 4% 9
Slide 31: ICS Fourth quarter and fiscal year 2021 recurring revenues
30© 2021 | $137 $136 $89 $106 $90 $97 Q4'20 Q4'21 Regulatory Customer Communications Data-Driven Fund Solutions Issuer $ in millions +20% (1%) +7% +27% ICS QUARTERLY RECURRING REVENUES ICS FISCAL YEAR RECURRING REVENUES YoY Growth ICS Fourth quarter and fiscal year 2021 Recurring revenues $300 $381
Slide 32: GTO Fourth quarter and fiscal year 2021 recurring revenues
31© 2021 | $524 $558 $650 $701 FY'20 FY'21 $143 $145 $171 $201 4Q'20 4Q'21 Capital Markets Wealth & Investment Management +18% +1% GTO QUARTERLY RECURRING REVENUES GTO FISCAL YEAR RECURRING REVENUES YoY Growth $1,174 $1,258 $314 $346 GTO Fourth quarter and fiscal year 2021 Recurring revenues +8% +6%
Slide 33: Fourth quarter 2021 recurring revenue growth drivers
32© 2021 | $930 $1,065 Q4'20 Recurring Revenue Closed Sales Client Losses Internal Growth Acquisitions Q4'21 Recurring Revenue Fourth quarter 2021 Recurring revenue growth drivers FOURTH QUARTER 2021 RECURRING REVENUES GREW 15% TO $1.1B Note: Amounts may not sum due to rounding. +6 pts (2) pts +7 pt
Slide 34: Fourth quarter total revenue growth drivers
33© 2021 | $51 $40 $31 $39 $68 $46 $45 $74 $73 Q4'19 Q1'20 Q2'20 Q3'20 Q4'20 Q1'21 Q2'21 Q3'21 Q4'21 Fourth quarter Total revenue growth drivers QUARTERLY EVENT DRIVEN REVENUE $1,362 $1,532 Q4'20 Total Revenue Recurring Event-Driven Distribution FX Q4'21 Total Revenue +10 pts 0 pts +2 pts 1 pt 12% F
Slide 35: Operating and Adjusted Operating Income Margin
34© 2021 | 13.8% 15.0% 13.8% 13.6% 18.4%21.9% Q4'20 Q4'21 Fourth quarter and Fiscal year 2021 Operating and Adjusted Operating Income Margin 15.9% 17.1% 17.5% FY'18 FY'19 FY'20 FY'21 18.1% 24.6% 22.8% +80 bps +120 bps +40 bps +60 bps OPERATING INCOME MARGIN OPERATING INCOME MARGIN (GAAP) ADJUSTED OP
Slide 36: Appendix
Appendix oe es Broadridge:
Slide 37: Quarterly revenue by segment and product
36© 2021 | Confidential and Proprietary | 2020 2021 YoY % Dollars in millions Q1 Q2 Q3 Q4 FY Q1 Q2 Q3 Q4 FY Growth Investor Communication Solutions ("ICS") Regulatory $120 $130 $241 $300 $792 $136 $147 $290 $381 $954 20% Data-driven fund solutions 79 82 89 90 339 82 89 90 97 358 5% Issuer 15 18 35 8
Slide 38: Fiscal year 2021 recurring revenue growth drivers
37© 2021 | $3,036 $3,333 FY'20 Recurring Revenue Closed Sales Client Losses Internal Growth Acquisitions FY'21 Recurring Revenue $576M $1,211M $623 FISCAL YEAR 2021 RECURRING REVENUES GREW 10% TO $3.3B Note: Amounts may not sum due to rounding. +6 pts (2) pts +3 pts +2 pts 10% $ in millions Pts cont
Slide 39: Fiscal year 2021 total revenue drivers
38© 2021 | Fiscal year 2021 Total revenue drivers $4,529 $4,994 FY'20 Total Revenue Recurring Event-Driven Distribution FX FY'21 Total Revenue FISCAL YEAR 2021 REVENUE DRIVERS +7 pts +1 pt +2 pts 0 pts 10% $ in millions Pts contribution to growth
Slide 40: Fiscal year 2021 event-driven revenue
39© 2021 | $173 $199 $219 $244 $178 $237 FY'15 FY'16 FY'17 FY'18 FY'19 FY'20 FY'21 $219M FY’15-FY’21 AVERAGE FISCAL YEAR 2021 EVENT-DRIVEN REVENUE Fiscal year 2021 Event-driven revenue $ in millions $284
Slide 41: Explanation of Non-GAAP Measures and Reconciliation of GAAP to Non-GAAP Measures
40© 2021 | Explanation of Non-GAAP Measures and Reconciliation of GAAP to Non-GAAP Measures
Slide 42: Non-GAAP measures
41© 2021 | 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 43: Non-GAAP measures: Adjusted EBITDA and EBITDAR
42© 2021 | Non-GAAP measures Adjusted EBITDA reflects Net earnings before interest, taxes, other non-operating (income)/expenses net, depreciation, amortization, Acquisition and Integration Costs, Real Estate Realignment and Covid-19 Related Expenses and Software Charge. EBITDAR reflects Adjusted EB
Slide 44: Reconciliation of GAAP to Non-GAAP Measures
43© 2021 | Confidential and Proprietary | (Unaudited) Reconciliation of GAAP to Non-GAAP Measures Note: Amounts may not sum due to rounding. 3 Months Ended June 30 Fiscal Year Ended June 30 Dollars in millions 2021 2020 2021 2020 Operating income (GAAP) $281.4 $298.8 $678.7 $624.9 Adjustments: Amort
Slide 45: Reconciliation of GAAP to Non-GAAP Measures
44© 2021 | Confidential and Proprietary | Reconciliation of GAAP to Non-GAAP Measures Note: Amounts may not sum due to rounding. Year ended June 30, Dollars in millions 2021 2020 2019 2018 2017 2016 2015 2014 Operating Income (GAAP) $678.7 $624.9 $652.7 $598.1 $534.0 $502.3 $468.5 $418.3 Adjustments
Slide 46: Reconciliation of GAAP to Non-GAAP Measures
45© 2021 | Confidential and Proprietary | Reconciliation of GAAP to Non-GAAP Measures (Unaudited) Year ended June 30, Dollars in millions, except per share amounts 2021 2020 2019 2018 2017 2016 2015 2014 Diluted earnings per share (GAAP) $4.65 $3.95 $4.06 $3.56 $2.70 $2.53 $2.32 $2.12 Adjustments: A
Slide 47: Reconciliation of GAAP to Non-GAAP Measures
46© 2021 | Confidential and Proprietary | Reconciliation of GAAP to Non-GAAP Measures (a) Calculated using the GAAP effective tax rate, adjusted to exclude $2.4 million and $16.9 million of excess tax benefits associated with stock-based compensation for the three months and fiscal year ended June 3
Slide 48: Reconciliation of GAAP to Non-GAAP Measures
47© 2021 | Confidential and Proprietary | 3 Months Ended June 30 Fiscal Year Ended June 30 Dollars in millions, except per share amounts 2021 2020 2021 2020 Diluted earnings per share (GAAP) $2.20 $1.97 $4.65 $3.95 Adjustments: Amortization of acquired intangibles and purchased intellectual property
Slide 49: Combined Entity Proforma Reconciliation Fiscal Year 2021
48© 2021 | Confidential and Proprietary | Fiscal Year Ended June 30 Dollars in millions 2021 Net earnings (GAAP) $547.5 Provision for income taxes 148.7 Earnings before income taxes (GAAP) 696.2 Interest expense, net 55.2 Other non-operating income/expense, net (72.7) Operating income (GAAP) 678.7 N
Slide 50: Combined Entity Proforma Reconciliation Fiscal Year 2021
49© 2021 | Confidential and Proprietary | Fiscal Year Ended June 30 Dollars in millions 2021 Net earnings (GAAP) (a) $547.5 Pro forma net earnings $514.9 Combined provision for income taxes (b) 135.7 Pro forma earnings before income taxes 650.6 Interest expense, net (b) 87.9 Other non-operating inco
Slide 51: Broadridge Investor Relations Contacts
50© 2021 | W. Edings Thibault Tel: 516-472-5129 Email: Edings.Thibault@Broadridge.com Broadridge Investor Relations Contacts
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