INVESTOR PRESENTATION
MARCH 2018
EXHIBIT 99.1
2© 2018 |
Forward-Looking Statements
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 Litigation Reform Act of 1995. Statements that are not
historical in nature, and which may be identified by the use of words such as “expects,” “assumes,” “projects,” “anticipates,” “estimates,” “we believe,” “could
be” and other words of similar meaning, are forward-looking statements. In particular, information appearing in the “Fiscal Year 2018 Financial Guidance”
section are forward-looking statements.
These statements are based on management’s expectations and assumptions and are subject to risks and uncertainties that may cause actual results to differ
materially from those expressed. These risks and uncertainties include those risk factors discussed in Part I, “Item 1A. Risk Factors” of our Annual Report on
Form 10-K for the fiscal year ended June30, 2017 (the “2017 Annual Report”), as they may be updated in any future reports filed with the Securities and
Exchange Commission. All forward-looking statements speak only as of the date of this presentation and are expressly qualified in their entirety by reference to
the factors discussed in the 2017 Annual Report.
These risks include: the success of Broadridge in retaining and selling additional services to its existing clients and in obtaining new clients; Broadridge’s reliance
on a relatively small number of clients, the continued financial health of those clients, and the continued use by such clients of Broadridge’s services with
favorable pricing terms; any material breach of Broadridge security affecting its clients’ customer information; changes in l aws and regulations affecting
Broadridge’s clients or the services provided by Broadridge; declines in participation and activity in the securities markets; the failure of Broadridge’s
outsourced data center services provider to provide the anticipated levels of service; a disaster or other significant slowdown or failure of Broadridge’s systems
or error in the performance of Broadridge’s services; overall market and economic conditions and their impact on the securities markets; Broadridge’s failure to
keep pace with changes in technology and demands of its clients; Broadridge’s ability to attract and retain key personnel; the impact of new acquisitions and
divestitures; and competitive conditions. Broadridge disclaims any obligation to update or revise forward-looking statements that may be made to reflect
events or circumstances that arise after the date made or to reflect the occurrence of unanticipated events, other than as required by law.
3© 2018 |
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 ("GAAP") except where otherwise noted. In certain
circumstances, results have been presented that are not generally accepted accounting principles measures (“Non-GAAP”). These Non-GAAP measures are Adjusted Operating income,
Adjusted Operating income margin, Adjusted Net earnings, Adjusted earnings per share, and Free cash flow. These Non-GAAP financial measures should be viewed in addition to, and not
as a substitute for, the Company’s reported results.
The Company believes its Non-GAAP financial measures help investors understand how management plans, measures and evaluates the Company’s business performance. Management
believes that Non-GAAP measures provide consistency in its financial reporting and facilitates investors’ understanding of the Company’s operating results and trends by providing an
additional basis for comparison. Management uses these Non-GAAP financial measures to, among other things, evaluate the Company's ongoing operations, for internal planning and
forecasting purposes and in the calculation of performance-based compensation. In addition, and as a consequence of the importance of these Non-GAAP financial measures in managing
its business, the Company’s Compensation Committee of the Board of Directors incorporates Non-GAAP financial measures in the eva luation process for determining management
compensation.
Adjusted Operating Income, Adjusted Operating Income Margin, Adjusted Net Earnings and Adjusted Earnings per Share
These Non-GAAP measures reflect Operating income, Operating income margin, Net earnings, and Diluted earnings per share, as adjusted to exclude the impact of certain costs, expenses,
gains and losses and other specified items that management believes are not indicative of our ongoing operating performance. These adjusted measures exclude the impact of
Amortization of Acquired Intangibles and Purchased Intellectual Property, Acquisition and Integration Costs, and Tax Act items. Amortization of Acquired Intangibles and Purchased
Intellectual Property represents non-cash expenses associated with the Company's acquisition activities. Acquisition and Integration Costs represent certain transaction and integration
costs associated with the Company’s acquisition activities. Tax Act items represent the net impact of a U.S. federal transition tax on earnings of certain foreign subsidiaries, foreign
jurisdiction withholding taxes and certain benefits related to the remeasurement of the Company's net U.S. federal and state deferred tax liabilities attributable to the Tax Cuts and Jobs
Act (the "Tax Act"). The Company excludes Amortization of Acquired Intangibles and Purchased Intellectual Property, Acquisition and Integration Costs, and Tax Act items from these
measures because excluding such information provides the Company with an understanding of the results from the primary operations of its business and these items do not reflect
ordinary operations or earnings. Management believes these measures may be useful to an investor in evaluating the underlyingoperating performance of the Company's business.
Free Cash Flow
In addition to the Non-GAAP financial measures discussed above, we provide Free cash flow information because we consider Free c ash flow to be a liquidity measure that provides useful
information to management and investors about the amount of cash generated that could be used for dividends, share repurchases, strategic acquisitions, other investments, as well as
debt servicing. Free cash flow is a Non-GAAP financial measure and is defined by the Company as Net cash flows provided by opera ting activities less Capital expenditures as well as
Software purchases and capitalized internal use software.
Use of Material Contained Herein
The information contained in this presentation is being provided for your convenience and information only. This information is accurate as of the date of its initial presentation. If you
plan to use this information for any purpose, verification of its continued accuracy is your responsibility. Broadridge assumes no duty to update or revise the information contained in this
presentation.
4© 2018 |
Track record of growth and value creation
$1.1B
$2.5B
FY
0
8
FY
0
9
FY
1
0
FY
1
1
FY
1
2
FY
1
3
FY
1
4
FY
1
5
FY
1
6
FY
1
7
$20
$100
4
/1
/0
7
1
/1
/0
8
1
0
/1
/0
8
7
/1
/0
9
4
/1
/1
0
1
/1
/1
1
1
0
/1
/1
1
7
/1
/1
2
4
/1
/1
3
1
/1
/1
4
1
0
/1
/1
4
7
/1
/1
5
4
/1
/1
6
1
/1
/1
7
1
0
/1
/1
7
9%
CAGR
RECURRING FEE REVENUE GROWTH BROADRIDGE SHARE PRICE
19%
Annualized TSR
$100 share price as of 2/28/18
5© 2018 |
Market dynamics driving strong growth for
Broadridge’s technology-driven solutions
Broadridge is Ready For Next
Proven strategy and experienced management team to
drive sustainable growth
Uniquely positioned to deliver network value and capture
additional, large market opportunities
Successful track record balancing top quartile total shareholder return
with continued reinvestment
6© 2018 |
Broadridge platform-based business
model creates unique value
Network
value
Deep financial services
knowledge
Multi-client
managed
services
approach
• Domain expertise
• Trusted
• Unique Capability
• Data & Analytics
• Scale leadership
• Significant IP
7© 2018 |
The industry’s leading choice
GOVERNANCE CAPI TAL MARKETS WEALTH MANAGEMENT
• Process 80% of outstanding
shares in the United States,
50%+ for rest of world
• Distribute 90%+ of broker
regulatory communications
to 140M individual accounts
• Serve most brokers, funds,
and public companies in
North America
• Reach 80% of North
American households
• No “snake pit”
• Clear and settle over $5T
per day
• Serve 18 of 23 US primary
dealers for fixed income
• Process Equities for 7 of
the top 10 global
investment banks
• Support clearance and
settlement in over 80
countries
• Support 50M+ accounts
through our technology
platform
• 25%+ of US Financial
Advisors utilize Broadridge’s
front office solutions
• Provide data aggregation
service for 228K+ agents
and advisors
• Maintain 100K retirement
plans through Broadridge’s
mutual fund settlements
platform
GROWING FRANCHISEGROWING FRANCHISE FRANCHISE OPPORTUNITY
8© 2018 |
Extend Governance
Key Opportunities
• Transform regulatory
communications
• Develop omni-channel
communications
• Expand issuer services
and continue to bring
transparency to
governance
140M+
RETAIL SHAREHOLDER
ACCOUNTS
150,000+
INSTITUTIONAL
SHAREHOLDERS
24,000+
MUTUAL FUNDS 1,100+
BANKS and BROKER-DEALERS
5,000+
CORPORATE ISSUERS
Fee Revenue = $1.7B
9© 2018 |
Drive Capital Markets
Drive global technology
platform
Extend with additional
solutions
Create network value
Data Fabric
Unified Portal
Global Position Manager Global P&L Global Sub-Ledger
Managed Services Options
Core Components
Connectivity Reference
Data
Netting &
Allocation
Clearance &
Settlement
Books &
Records
Funding/
Collateral/
Fees
Asset
Servicing
Reconciliation Regulatory Operational
Risk
Asset Class and Function Coverage
Equities Exchange
Traded
Derivatives
Trade &
Position
Financing
Foreign Exchange
& Money
Markets
Fixed
Income
SOLUTION COMPONENTS
Fee Revenue = $0.5B
10© 2018 |
Build Wealth Management
Drive winning targeted
solutions
Deliver front-to-back global
institutional platform of the
future
Wrap in next-generation
digital and data processing
capabilities
Drive best-of-suite solutions
for investment managers
Advisors Investors
• Wealth management
tools
• Targeted marketing
• Wealth mobile portal
• Educational content
• Enriched, digital
communications
• Trading and account
servicing
• Clearance & settlement
• Client and regulatory
reporting
• Business process
automation & workflows
ICS GTO
Fee Revenue = $0.4B
11© 2018 |
Broadridge business model is strong
Sustainable Growth
• Large, recurring revenue base with good visibility
• Organic strength driven by large addressable market
opportunity
Steady Margin
Expansion
• Continued scale and operational leverage
• Focus on operational efficiencies
Strong Free Cash Flow
• 100+% free cash flow conversion
• Largely predictable model
Balanced Capital
Allocation
• Target ~45% dividend payout ratio1
• Balance of targeted M&A and share repurchase
1 Dividend payout ratio is a percentage of prior year Adjusted Net Earnings and is subject to Board Approval
12© 2018 |
Recurring Fee Revenue Growth 7-9%
Total Revenue Growth 5-7%
Adjusted Op Income Margin Expansion ~50bps/yr
Adjusted EPS Growth 14-18%
Winning formula for top quartile TSR
FY17 - FY20 three year growth objectives (As of 2/8/18)
Note: Compound annual growth rates (CAGRs), except margin. Three year Adjusted EPS Growth objective includes benefit from change in U.S. tax law
13© 2018 |
CEO scorecard
Strength of our Governance
and Capital Markets
franchises with growing
breadth of products built or
acquired
EXISTING BUSINESSES
Positioned to go after real
opportunities based on
existing capabilities,
supported by investments
we have already made
NEW OPPORTUNITIES
Market demand, pipeline
and quality of client
dialogues are strong and
growing
SALES PIPELINE
“Broadridge has never been better positioned for future growth”