NASDAQ Investor Program Jan Siegmund Chief Financial Officer December 5, 2012
NASDAQ Investor Program Jan Siegmund Chief Financial Officer
December 5, 2012
Forward Looking Statements
This document and other written or oral statements made from time to time by ADP 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 like “expects,” “assumes,” “projects,” “anticipates,” “estimates,” “we believe,” “could be” and other words of similar meaning, 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. Factors that could cause actual results to differ materially from those contemplated by the forward-looking statements include: ADP’s success in obtaining, retaining and selling additional services to clients; the pricing of products and services; changes in laws regulating payroll taxes, professional employer organizations and employee benefits; overall market and economic conditions, including interest rate and foreign currency trends; competitive conditions; auto sales and related industry changes; employment and wage levels; changes in technology; availability of skilled technical associates and the impact of new acquisitions and divestitures. ADP disclaims any obligation to update any forward-looking statements, whether as a result of new information, future events or otherwise. These risks and uncertainties, along with the risk factors discussed under “Item 1A. Risk Factors” in our Annual Report on Form 10-K for the fiscal year ended June 30, 2012, should be considered in evaluating any forward-looking statements contained herein.
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Discussion Points
Business Overview
Market Trends & ADP Strategy
Financial Strength and Capital Allocation
Summary
Q&A
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Who is ADP?
One of the world’s largest providers of business outsourcing solutions and services for… Human Resources
Payroll
Benefits
Retirement Administration
Tax Payments & Compliance
Vehicle Dealers
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A Global Provider
600,000 clients in more than 125 countries – Includes 425,000 small businesses – Includes 26,000 auto dealerships – Over 80% of Fortune® 500 companies – Over 90 Fortune® 100 companies
Associates in 40 countries
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Organized to Meet Business Needs
Dealer Services Provides fully integrated technology services & solutions to vehicle dealerships and manufacturers
Employer Services Helps organizations in every facet of the employment cycle
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ADP Fast Facts. . .
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Industry Leadership
ADP pays 24 million (1 in 6) workers in U.S., and 10 million abroad Moved about $1.3 trillion in U.S. client funds in 2012* Processed nearly 48 million W-2s* as the largest IRS taxpayer Hosts more than 2 million completed performance reviews Invested $1 billion in HCM product development and acquisitions over last 4 years #68 on Forbes’ “World's Most Innovative Companies” list in 2012
Our People
57,000 associates worldwide Manage 2,000+ tax agency relationships in U.S. and abroad Provide service and support in 26 languages
Financial Stability and Resources
1 of only 4 U.S. companies rated AAA by S&P and Moody’s $10.7 billion in revenue* – #269 in the 2012 Fortune® 500 Fiscally conservative – minimal long-term debt Dividends paid to shareholders continuously since 1974
*ADP’s Fiscal Year 2012, ended June 30
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Market Trends & ADP Strategy
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Innovation is picking up pace
Human Capital Management
Market trends and external forces are reshaping the industry
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Agile development and adoption (e.g., talent management)
Shift to SaaS and cloud-based solutions
“Consumerization” of enterprise apps
Growth of social media
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Human Capital Management
Market trends and external forces are reshaping the industry (continued)
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Clients needs are changing
Integration within solution and operating / reporting systems
Globalization of workforce
Insights from Big Data
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Human Capital Management
Market trends and external forces are reshaping the industry (continued)
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Disruptive forces in the market
• Impact of healthcare reform
• Increasing state / federal employment, tax regs
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Former pillars
Expand profit margins through increased operating efficiency
Refined pillars
Strengthen our core business
Grow integrated suite of cloud-based HCM, benefits, and payroll solutions to serve the U.S. market
Grow our differentiated HRBPO offerings
Invest to grow and scale our market leading HRBPO solutions by leveraging our platforms and processes
Grow share and improve margins in International markets
Leverage our global presence to offer clients HCM, benefits, and payroll solutions where they do business
Enter adjacent markets which leverage our core strategic assets
Grow and deepen our solutions offering to ensure our key adjacencies are market leaders (Dealer, AdvancedMD, CFO suite)
Business Process Innovation (BPI)
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Part of being adaptable means being clear about where we want to take the company
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Human capital management 2012 market size U.S. $ billion
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10 8
8 7
4 5
3 2
2 2 1 1 51
Insurance
Retirement
BPO
Benefits
Talent Management
Payroll – Service Bureau
Payroll – Software
HRIS
Time and Labor Management
Accountants
Tax Credit Services
Expense Management Total
43%
57%
$90 billion global market
International U.S.
We believe that the HCM market is attractive – growing at 7%
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ADP Employer Services Worldwide Footprint
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In-country, GlobalView and Streamline GlobalView and Streamline Streamline Only
Australia Brazil Canada China France Germany India Ireland Italy Netherlands New Zealand
Poland Portugal Spain Switzerland UK USA*
* FY’13 for STL
Argentina Austria Belgium Czech Republic Denmark Finland Hong Kong Hungary Indonesia Japan
Korea Malaysia Mexico Norway Philippines Romania Russia Singapore Slovakia Sweden
Taiwan Thailand Turkey Vietnam
Algeria* Bahamas* Bahrain Bangladesh* Bermuda* Bulgaria Bosnia Channel Islands* Chile Colombia Costa Rica Croatia Cyprus
Domenican Rep* Ecuador Egypt El Salvador Estonia Greece Guatemala Honduras Israel Jordan Kazakhstan Kenya* Kuwait
Latvia Lebanon Lithuania Luxembourg Macedonia Monaco* Morocco Nicaragua* Oman Pakistan* Panama Peru Puerto Rico*
Qatar Saudi Arabia Serbia Slovenia South Africa Sri Lanka Tunisia UAE Ukraine Uruguay* Venezuela
* Planned
Today, ADP has the potential to cover over 95% of all multinational employees
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ADP is the n°1 for HR outsourcing services in Europe 30,000 clients 10 million employees served
ADP Market Position in Europe
ADP In-Country Offerings
ADP Multinational Offerings
Rest of Europe n°2 n°2
n°1 n°1
n°1
n°1
n°1
n°1
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Key Employer Services Offerings
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ADP Mobile
Functionality
Human Resources Administration
Global/Multinational
HR Outsourcing
Added Value Services (Tax, Insurance)
Payroll
Time & Labor Management
Benefits
Talent Management
Recruiting
Employer Size
Small
Mid-size
Large
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We Can Help You Manage the Employee Lifecycle And Maximize Your Most Valuable Assets
Performance Management
Learning
Engagement, Goal Alignment
Sourcing, Screening, Selection
Recognition, Merit, Pay
On-Boarding
Succession Planning
Benefits Administration
Career and Individual Development
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ADP Human Capital Management: Complete, End-to-End, Global
Compensation Succession Learning Performance Recruiting
Delivered as a Service
Reporting
Analytics
Processing Managed Comprehensive
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Seamless integration. Complete, End-to-End Suite. Innovative, Cloud-Based Delivery
Cloud-based Software
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HR System of Record
Time and Labor Management
Payroll
Mob
ile
Port
al
Key Dealer Services Offerings
Dealer Management System
Business Intelligence
Business Process Outsourcing
Deal Management
Digital Marketing
Mobile Solutions
Phone Systems & Networking
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Segm
ents
Auto Marine PowerSports Heavy Truck RV Heavy Equip Agriculture
Total Market Opportunity = $17.5 Billion
Financial Strength & Capital Allocation
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ADP is one of four non-financial companies rated AAA by both leading U.S. rating agencies
Large recurring revenue base resulting in strong, consistent cash flow generation, enables investment in business
Low capital requirements
Capital allocation and shareholder friendly actions
– Strategic acquisitions – international expansion and entering adjacent markets that complement our core solutions
– Consistent share repurchase program via open market; reduced common stock outstanding ~10% over past 5 years
– Dividend payout ratio of 55-60%; increased dividend 38 consecutive years
ROE of over 20% last five years
Financial Strength and Capital Allocation
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Summary
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ADP: Helping Organizations Focus On What They Do Best
Innovation Product Leadership Service Excellence
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Recognition
© Copyright 2012 ADP, Inc. The ADP logo and ADP are registered trademarks of ADP, Inc. All other marks are the property of their respective owners.
2012 - Rank #7
2012 - Rank #68
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