ADP: ‘All In’ on HCM · –Talent Management –Retirement Administration ... –Over 90...

ADP: ‘All In’ on HCM

Jan Siegmund, CFO December 2, 2014

Forward Looking Statements

2 © Copyright 2014 ADP, LLC

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” 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, or interpretations of, existing legislation or regulations, or

compliance with new legislation or regulations; overall market, political and economic conditions, including

interest rate and foreign currency trends; competitive conditions; our ability to maintain our current credit

rating and the impact on our funding costs and profitability; vulnerability to security breaches, fraudulent

acts, and system interruptions and failures; 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, 2014 should be

considered in evaluating any forward-looking statements contained herein.

3

Discussion Points

Business Overview

Market Trends & ADP Strategy

Financial Strength and Capital Allocation

Q&A

© Copyright 2014 ADP, LLC

About ADP

One of the world’s largest

providers of HCM solutions

and services

–Human Resources

–Payroll

–Benefits

–Time & Attendance

–Talent Management

–Retirement Administration

–Tax Payments & Compliance


A Global Provider

610,000 clients in 100

countries

– Includes 425,000 small businesses

– Over 80% of Fortune® 500 companies

– Over 90 Fortune® 100 companies

Associates in 40 countries


ADP Worldwide Footprint

© Copyright 2014 ADP,LLC 6

Today, ADP has the potential to serve 99% of all

multinational employees

We Are ‘All In’ on HCM

© Copyright 2014 ADP, LLC

®

We focus on our clients’ biggest investment, challenge and opportunity – people.

IN THE BUSINESS OF YOUR SUCCESS

HUMAN CAPITAL MANAGEMENT

Technology Innovation

Service

Support Compliance Insights FROM RECRUITMENT

TO RETIREMENT

7

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Market Trends

& ADP Strategy


What Are Buyers Seeking?

© Copyright 2014 ADP, LLC . 9

Expertise beyond

software

New insights to

help them manage

Global solutions A comprehensive

suite of solutions

Our Strategic Pillars

Grow an integrated

suite of cloud-based

HCM solutions to

serve the US market

Leverage our global

presence to offer

clients HCM

solutions where they

do business

Invest to grow & scale

our market leading

HRBPO solutions by

leveraging our

platforms & processes


Gaining Momentum with Our HCM Portfolio

Opt ional Comprehensive BPO Serv ices

Small Market

• 410,000

clients

• Avg. ~10

employees

ADP RUNSM ADP Workforce

Now®

Mid-Market

• 54,000

clients

• Avg. ~200 employees

ADP Vantage

HCMSM

Large Market

• 150 clients

• Avg. ~4,000

employees

Global Market

• 130 clients

• Typically

>50,000

employees

ADP GlobalView®

Over 75% of our clients are now on a cloud-based HCM platform

ADP Differentiation: User Experience


One source of truth for full spectrum of stakeholders

Unique user interactions and intuitive interface

Rich analytics

Personalized dashboard

Search

Business Intelligence

Workflow / Inbox

Talent profiles

Org charts

Calendar

Reporting

Employee self service

ADP Differentiation: Mobility

‘Anywhere’ HCM access

for executives, managers

and employees

>3 million mobile users

Tablet app – purpose-built


ADP Differentiation: Global Solutions

Uniform solutions for mid-market

and larger employers help enable

easier workforce management

across multiple geographies and

regulatory environments

ADP Workforce Now –

33 countries

ADP GlobalView

ADP Streamline

iHCM


ADP Differentiation: Compliance

Assistance with HR

regulations in all

geographies

ADP Health

Compliance

Global compliance


ADP Differentiation: Big Data

Big data: Software/tools for

benchmarking, integrating

3rd-party data and predictive

capabilities

ADP Analytics

ADP Workforce Vitality Index


ADP Differentiation: Social HCM


Enhance peer-to-peer

collaboration for

onboarding, benefits,

recruiting, etc.

In Pilot:

Peer-to-peer feedback

Social performance

Team health and

network analysis

Winning in the Marketplace

Highest client count ever in Employer Services

and PEO

91.4% retention – best ever

12-year avg. tenure

>3M mobile users –

market leader

460,000 cloud clients

© Copyright 2014 ADP, LLC 18

Financial Overview &

Capital Allocation


ADP announced spinoff of Dealer Services business in

April 2014, spin completed on Sept. 30, 2014

–Received $825 million in cash from newly formed company

called CDK Global, Inc.

– Intend to return this cash to shareholders via share repurchases

by June 30, 2015, subject to market conditions

ADP revenues $10.3 billion in Fiscal 2014 excluding

Dealer Services business

Completed Spinoff of Dealer Services Business


Financial Highlights – 1Q Fiscal 2015


Revenue in Billions

(unaudited)

1Q 2014 1Q 2015

$2.4 B $2.6 B

9% growth,

nearly all

organic

Diluted Earnings Per Share from

Continuing Operations (unaudited)

1Q 2014 1Q 2015

13%

growth1 $0.55

$0.62

1 During the first quarter of fiscal 2015, ADP sold a portfolio of notes receivable to a third-party in connection

with the spin-off of Dealer Services which contributed approximately 2 cents to diluted earnings per share

from continuing operations.

Financial Highlights – 1Q Fiscal 2015


11% representing annualized recurring revenues anticipated from new

orders

• Revenues 7%, nearly all organic

• Worldwide client revenue retention

70 basis points

• U.S. pays per control 3.1%

• Average client funds balances 7%

• Pretax margin 120 basis points

Worldwide New Business Bookings

Employer Services PEO Services

• Revenues 18%, all organic

• Average worksite employees paid

15% to 345,000

• Pretax margin 90 basis points

ES PEO

Exceptionally strong AA rating by both Moody’s® and

S&P® -- the highest credit rating in our industry

Large recurring revenue base resulting in strong,

consistent cash flow generation

–Enables investment in business, return of cash to

shareholders

ROE of nearly 20% over the last three years

Financial Strength


Low capital requirements

Opportunity for strategic, tuck-in acquisitions that complement our

core human capital management offerings

Return of cash to shareholders

– On Nov. 11, 2014, announced 40th consecutive year of dividend increases, despite recent

spin-off of CDK Global

– Target dividend payout ratio remains 55-60%. Currently above this range due to recent

spin-off, but expect to grow dividend at a slower rate than earnings growth to return to the

targeted 55-60% in approximately 2 years.

– Consistent share repurchase program via open market; reduced common stock

outstanding approximately 4% over the past 5 years

During Fiscal 2014, returned over $1.5 billion in cash to shareholders

through dividends and share repurchases

Capital Allocation


Thank You


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. ADP assumes

no duty to update or revise the information contained in this presentation. You may reproduce

information contained in this presentation provided you do not alter, edit, or delete any of the

content and provided you identify the source of the information as ADP, LLC, which owns the

copyright.

Use of Material Contained Herein

© Copyright 2014 ADP, LLC 26

ADP: ‘All In’ on HCM · –Talent Management –Retirement Administration ... –Over 90...

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