Broadridge Financial Solutions, Inc. · NYSE:BR
Broadridge Financial Solutions — Investor Presentation (November 2013)
32 slides from Broadridge Financial Solutions's investor presentation, Nov 13, 2013
Slide 1: Continued Market Leadership through Execution and Innovation
Exhibit 99.1 Continued Market Leadership through Execution and Innovation Investor Presentation © 2013 Broadridge Financial Solutions, Inc. Broadridge and the Broadridge logo are registered trademarks of Broadridge Financial Solutions, Inc. November 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: Broadridge Overview
\Geties Overview ’ ea Broadridge
Slide 4: Broadridge's Strategic Vision and Journey to Drive Top Quartile Stockholder Returns
Broadridge’s Strategic Vision and Journey to Drive Top Quartile Stockholder Returns Leading provider of Investor Communications and Technology-Driven Solutions to banks, broker- dealers, mutual funds, and corporate issuers globally We have strong positions in large and attractive markets with lots o
Slide 5: Broadridge's Business Unit Strategy
Broadridge’s Business Unit Strategy Leading provider of Investor Communications and Technology-Driven Solutions to banks, broker-dealers, mutual funds, and corporate issuers globally Bank/Broker-Dealer Bank/Broker-Dealer Communications and Mutual Fund and Retirement Technology and Operations Issuer
Slide 6: We are a Leader in a Number of Large and Attractive Markets
We are a Leader in a Number of Large and Attractive Markets Investor Communication Solutions Securities Processing Solutions U.S. and Global Banks/Broker- U.S. Brokerage Processing Dealers Regulatory Communications U.S. Fixed Income Processing U.S. Banks/Broker-Dealers Transactional Communications C
Slide 7: Throughout our Journey, we will Continue to Enhance our Capabilities to Drive Growth
Throughout our Journey, we will Continue to Enhance our Capabilities to Drive Growth FY10 * 0% FY14F ~.1% HORIZON 3 * Disruptive, transformative and longer term FY10 ~10% businesses FY14F Examples: Macro-trends- digital comm., cost ~30% mutualization, unique data HORIZON 2 FY10 * Adjacencies to buil
Slide 8: Investor Communication Solutions (ICS)
Investor Communication Solutions (ICS) 7
Slide 9: Large and attractive markets – Investor Communications is a $10B+ market
Large and attractive markets – Investor Communications is a $10B+ market Total addressable market $10B+ fee revenue Bank/Broker-Dealer (BBD)—Core Regulatory communications (proxy, interims, etc.) Mutual Fund—Natural adjacencies Customer communications Transaction reporting (transaction statements, e
Slide 10: ICS Operates a Unique Business Systems Processing Model
ICS Operates a Unique Business Systems Processing Model Proxy and Interim processing system is the “plumbing” supporting the voting process for corporate governance 9
Slide 11: ICS has a Diversified Revenue Base
ICS has a Diversified Revenue Base 1 By product Broad client base Proxy $356M (20%) Banks Distribution Interims $755M (43%) $191M (11%) Primarily Broker-Dealers Postage Transaction Mutual Funds Reporting $165M (9%) Fulfillment Corporate Issuers $143M (8%) Other $151M (9%) Increase in electronic dist
Slide 12: ICS-Bank/Broker-Dealer Communications
ICS-Bank/Broker-Dealer Communications What We Do: Competitive Advantages: Indispensible data hub with established Regulatory communications relationships with majority of BBDs – Beneficial proxy and interims for equities – Beneficial mutual fund compliance Strong market position and innovative commu
Slide 13: ICS-Issuer Services
ICS-Issuer Services What We Do: Competitive Advantages: Beneficial proxy service Market Position – only full service provider of shareholder communications to all types of shareholders Registered shareholder communications – Registered proxy services Unmatched Scale – able to leverage one billion pl
Slide 14: ICS-Mutual Fund and Retirement Solutions
ICS-Mutual Fund and Retirement Solutions What We Do: Competitive Advantages: Long-standing relationships across Mutual Fund trade processing in the industry defined contribution/trust space — Serve every mutual fund and majority of (Matrix) banks/broker-dealers Data aggregation and analytics Unique
Slide 15: Securities Processing Solutions (SPS)
Securities Processing Solutions (SPS) 14
Slide 16: Technology and Operations spend adds ~$14B to our SPS addressable market
Technology and Operations spend adds ~$14B to our SPS addressable market Securities and investment firms’ overall technology and operations spend is over $100 billion and growing at 5% Total addressable market ~ $14B fee revenue US Brokerage Processing Core equities and fixed income Adjacent markets
Slide 17: Broadridge global processing behind the scenes
Broadridge global processing behind the scenes Broadridge simplifies complex processes 16
Slide 18: Securities Processing North America Market Share Overview
Securities Processing North America Market Share Overview 1 Equity Processing Client Volume FY13 Product Revenues Broadridge ~30% Competitors ~20% M In-house A ~50% R K U.S. $ Fixed Income Client Volume E Equity (~74%) Fixed Income (~16%) T Transactions, $127M Transactions, $57M Broadridge Non-trans
Slide 19: SPS's Client Base is Diversified Across Large Financial Institutions
SPS’s Client Base is Diversified Across Large Financial Institutions Top Equity Processing Fixed Income Outsourcing Clients Retail Institutional Processing Apex Clearing Bank of America/Merrill Lynch Barclays Capital Services BMO Nesbitt Burns CIBC World Markets Deutsche Bank E*Trade Group Edward Jo
Slide 20: SPS-Technology and Operations
SPS-Technology and Operations What We Do: Competitive Advantages: Best-of-breed processing solutions Unique global technology platform – Leading global platform provides processing access to over 50 – Broad asset class coverage countries Broad suite of add-on or point solutions – Desk top applicatio
Slide 21: Financial Strategy
_ y, ee Strategy me Bg Broadridge 20
Slide 22: Our Financial Strategy is a key part of our value creation strategy
Our Financial Strategy is a key part of our value creation strategy Target paying out 40% of net earnings in dividends, but expect no less than 84 cents per share annually (subject to quarterly Board approval) Organic growth with limited financial risk – Avoid significant balance sheet risk – Invest
Slide 23: Appendix
Appendix me 22 Big Broadridge
Slide 24: 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 Gro
Slide 25: Broadridge Q1 FY14
Broadridge Q1 FY14 24 FY13 FY13 at at $339 $376 Ics $27 $41 8% 11%) << Growth % / Margin % > 6.0% 10.9% $154 $169 SPS $9 $32 3%, 10% | 4 Growh % / Margin % & 6.1% 18B%| $493 $545 Total Segments $37 S73 5% 10% Margin % 74% 133% $0 ($0) Other” ($7) (83) $2 $0 Fx” $3 $6 $496 $545 Total Broadridge (Non-
Slide 26: Broadridge FY14 Guidance
(Sin millions) ics $302 $316 $328 << Sromh % | Manin ® > 12% 77% *B.1% SPS $85 $100 $117 1% a es Grom % / Margin % > 129% 14.0% “00% $2,421 $2463 $2,506 Total Segments $387 $H16 $445 6% me 4% Margin % 16.0% 16.9% ‘78% $o $0 so Other” ($44) ($39) 47)) $10 $10 $10 Fx® $15 $14 $14 $2431 $2473 $2517 Tot
Slide 27: Cash Flow – Q1 FY14 Results and FY14 Forecast
Cash Flow –Q1 FY14 Results and FY14 Forecast Free Cash Flow - Non-GAAP Unaudited ($ 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 28: Revenues and Closed Sales FY08-FY13
Revenues and Closed Sales FY08-FY13 27
Slide 29: Reconciliation of Non-GAAP to GAAP Measures
Reconciliation of Non-GAAP to GAAP Measures 28
Slide 30: ICS Key Segment Revenue Stats
ICS Key Segment Revenue Stats Fee Revenues 1Q13 1Q14 Type RC= Recurring Proxy Equities $ 25.6 $ 26.0 RC ED= Event-Driven Stock Record Position Growth -4% 1% In millions 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 31: SPS Key Segment Revenue Stats
SPS Key Segment Revenue Stats RC= Recurring ED= Event-Driven In millions 1Q13 1Q14 Type 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 32: 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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