Fiscal 2017 Results. August 1, 2017

Transcription

1 Fiscal 2017 Results August 1,

2 Safe Harbr fr Frward-Lking Statements This presentatin cntains "frward-lking statements" within the meaning f the Private Securities Litigatin Refrm Act f All statements, ther than statements f histrical fact, including: CDK s business utlk and frecasted and adjusted results fr CDK s fiscal year ending June 30, 2018; CDK s bjectives fr its multi-year business transfrmatin plan; ther plans; bjectives; frecasts; gals; beliefs; business strategies; future events; business cnditins; results f peratins; financial psitin and business utlk and trends; and ther infrmatin, may be frward-lking statements. Wrds such as "might," "will," "may," "culd," "shuld," "estimates," "expects," "cntinues," "cntemplates," "anticipates," "prjects," "plans," "ptential," "predicts," "intends," "believes," "frecasts," "future," "assumes," and variatins f such wrds r similar expressins are intended t identify frward-lking statements. These statements are based n management's expectatins and assumptins and are subject t risks and uncertainties that may cause actual results t differ materially frm thse expressed, r implied by, these frward-lking statements. Factrs that culd cause actual results t differ materially frm thse cntemplated by the frward-lking statements include: CDK's success in btaining, retaining and selling additinal services t custmers; the pricing f prducts and services; verall market and ecnmic cnditins, including interest rate and freign currency trends, and technlgy trends; adverse glbal ecnmic cnditins and credit markets and vlatility in the cuntries in which we d business; aut sales and advertising and related industry changes; cmpetitive cnditins; changes in regulatin; changes in technlgy; security breaches, interruptins, failures and ther errrs invlving CDK's systems; availability f skilled technical emplyees/labr/persnnel; the impact f new acquisitins and divestitures; emplyment and wage levels; availability f capital fr the payment f debt service bligatins r dividends r the repurchase f shares; any changes t CDK s credit ratings and the impact f such changes n CDK s financing csts, rates, terms, debt service bligatins, access t capital market and wrking capital needs; the impact f CDK s indebtedness, access t cash and financing, and ability t secure financing, r financing at attractive rates; litigatin invlving cntract, intellectual prperty, cmpetitin, sharehlder, and ther matters, and gvernmental investigatins; CDK's ability t timely and effectively implement its transfrmatin plan, which is intended t increase perating efficiency and imprve CDK's glbal cst structure, while limiting r mitigating business disruptin; and the ability f CDK's significant stckhlders and their affiliates t significantly influence CDK's decisins. There may be ther factrs that may cause CDK's actual results, perfrmance r achievements t differ materially frm thse expressed in, r implied by, the frwardlking statements. CDK gives n assurances that any f the events anticipated by the frward-lking statements will ccur r, if any f them d, what impact they will have n its results f peratins and financial cnditin. Yu shuld carefully read the factrs described in CDK's reprts filed with the Securities and Exchange Cmmissin ("SEC"), including thse discussed under "Part I, Item 1A. Risk Factrs" in CDK's mst recent Annual Reprt n Frm 10-K and its mst recent Quarterly Reprt n Frm 10-Q fr a descriptin f certain risks that culd, amng ther things, cause CDK's actual results t differ frm any frward-lking statements cntained herein. These filings can be fund n CDK's website at and the SEC's website at All frward-lking statements speak nly as f the date f this presentatin even if subsequently made available by CDK n its website r therwise. CDK disclaims any bligatin t update r revise any frward-lking statements that may be made t reflect new infrmatin r future events r circumstances that arise after the date made r t reflect the ccurrence f unanticipated events, ther than as required by law. 2

3 Fiscal 2017 Highlights Furth quarter results capped ff a slid year with 5% revenue grwth and 200 bps f net earnings attributable t CDK margin expansin and 550 bps adjusted EBITDA margin expansin Cntinued prgress in ur business transfrmatin MveUp! Wrkfrce Efficiency and Ftprint Streamline Implementatin Investments in prduct and imprving custmer experience resnating with ur custmers A recnciliatin f the mst directly cmparable measure t each measure can be fund in the tables accmpanying ur August 1, 2017 press release that we furnished t the SEC and psted t the Financial Infrmatin sectin f ur Investr Relatins website, 3

4 Business Transfrmatin Plan Key wrkstreams WORKSTREAM DESCRIPTION 1 MveUp! Migrate custmers t latest sftware versins; engineer t reduce custmizatins 2 Streamline implementatin 3 Enhance custmer service 4 Optimize sales and prduct ffering 5 Simplify qute t cash 6 Wrkfrce efficiency and ftprint Streamline installatin and training prcess thrugh imprved technlgy, prcess, tls, and wrkflw Decrease reslutin times thrugh ptimized case management and technlgyenabled, intelligent, user-driven supprt Adjust sales structure; reduce prduct cmplexity; expand bundling; ptimize discunt management; standardize pricing Reduce business cmplexity thrugh integrated g-t-market mdel that leverages an autmated cntracting prcess, SKU ratinalizatin, and streamlined invicing Increase efficiency thrugh fewer layers and larger spans f cntrl, gegraphic wage arbitrage, and reduced facility ftprint 7 Strategic surcing Disciplined vendr management and vendr cnslidatin 8 CDK Internatinal Cmprehensive ptimizatin acrss back ffice, R&D, implementatin, and supprt 4

5 Business Transfrmatin Plan Q4 updates MveUp! Wrkfrce efficiency and ftprint Streamline implementatin Sftware versins under 400 frm initial ~1500 level Exceeded Q4 target f 500 versins Clsed 7 facilities in Q4 Clsed 20 facilities t date, exceeding riginal target f 18 clsures by fiscal % reductin in cycle times 5

6 Fiscal 2017 Financial Results Ttal CDK; represents grwth frm Fiscal 2016 Revenues $2, % $2, % Earnings befre incme taxes % % Net earnings attributable t CDK % % Diluted net earnings attributable t CDK per share Margin % % Net earnings attributable t CDK margin EBITDA margin 13.3% 200bps 32.1% 550bps FY2017 effective tax rate was 30.5% cmpared t 33.1% in FY2016; FY2017 adjusted effective tax rate was 31.8% cmpared t 33.8% in FY2016 A recnciliatin f the mst directly cmparable measure t each measure can be fund in the tables accmpanying ur August 1, 2017 press release that we furnished t the SEC and psted t the Financial Infrmatin sectin f ur Investr Relatins website, 6

7 Fiscal 2017 Financial Results By segment; represents grwth frm Fiscal 2016 Revenues Pretax Earnings Pretax Margin Cnstant Currency Cnstant Currency Retail Slutins Nrth America $1, % 5% $ % $ % 26% 37.8% 620bps 37.9% 630bps Advertising Nrth America % 10% % % 61% 14.4% 460bps 14.4% 460bps CDK Internatinal % 5% % % 23% 24.0% 450bps 24.0% 450bps A recnciliatin f the mst directly cmparable measure t each measure can be fund in the tables accmpanying ur August 1, 2017, press release that we furnished t the SEC and psted t the Financial Infrmatin sectin f ur Investr Relatins website, 7

8 Q4 FY17 Financial Results Ttal CDK; represents grwth frm Q4 FY16 Revenues $ % $ % Earnings befre incme taxes % % Net earnings attributable t CDK % % Diluted net earnings attributable t CDK per share Margin % % Net earnings attributable t CDK margin EBITDA margin 10.4% 40bps 32.3% 390bps Q4 FY2017 effective tax rate was 35.3% cmpared t 31.5% in Q4 FY2016; Q4 FY2017 adjusted effective tax rate was 35.7% cmpared t 33.1% in Q4 FY2016 A recnciliatin f the mst directly cmparable measure t each measure can be fund in the tables accmpanying ur August 1, 2017 press release that we furnished t the SEC and psted t the Financial Infrmatin sectin f ur Investr Relatins website, 8

9 Q4 FY17 Financial Results By segment; represents grwth frm Q4 FY16 Revenues Pretax Earnings Pretax Margin Cnstant Currency Cnstant Currency Retail Slutins Nrth America $ % 6% $ % $ % 20% 39.0% 460bps 39.2% 480bps Advertising Nrth America % 1% % % 30% 16.6% 370bps 16.6% 370bps CDK Internatinal % 7% % % 27% 24.5% 460bps 24.5% 460bps A recnciliatin f the mst directly cmparable measure t each measure can be fund in the tables accmpanying ur August 1, 2017, press release that we furnished t the SEC and psted t the Financial Infrmatin sectin f ur Investr Relatins website, 9

10 Fiscal 2017 Financial Results Segment Revenues $307.6 $311.9 ~ 8% f revenue is transactin based $179.5 $159.8 Apprximately 70% f revenue is subscriptin based $1,261.4 CDKI RSNA Subscriptin RSNA Transactin RSNA Other ANA Segment revenue details can be fund in the tables accmpanying ur August 1, 2017, press release that we furnished t the SEC and psted t the Financial Infrmatin sectin f ur Investr Relatins website, 10

11 Fiscal 2018 Guidance Ttal CDK; represents grwth frm Fiscal 2017 Revenues 4.0% - 5.0% 4.0% - 5.0% Diluted net earnings attributable t CDK per share Grwth Margin $2.37 $2.47 $2.90 $ % 24.0% 13.0% 17.0% Net earnings attributable t CDK 11.0% % Net earnings attributable t CDK margin 14.0% % EBITDA 13.0% % EBITDA margin 35.0% % A recnciliatin f the mst directly cmparable measure t each measure can be fund in the tables accmpanying ur August 1, 2017 press release that we furnished t the SEC and psted t the Financial Infrmatin sectin f ur Investr Relatins website, 11

12 Earnings per Share Recnciliatin Ttal CDK; represents grwth frm Fiscal Stck-based cmpensatin adjustment $2.43 $0.34 ($0.20) $2.57 $0.53 FY18 cntributrs t EPS grwth $0.24 ($0.20) ($0.03) ($0.09) ($0.07) $ A recnciliatin f the mst directly cmparable measure t each measure can be fund in the tables accmpanying ur August 1, 2017 press release that we furnished t the SEC and psted t the Financial Infrmatin sectin f ur Investr Relatins website, 12

13 Appendix 13

14 Glssary f Nn- Measures Within this presentatin, we disclse the financial measures listed belw n bth a and a nn- (adjusted) basis. The nn- financial measures disclsed shuld be viewed in additin t, and nt as an alternative t, results prepared in accrdance with. Our use f each f the fllwing nn- financial measures may differ frm similarly titled nn- financial measures presented by ther cmpanies, and ther cmpanies may nt define these nn- financial measures, r recncile them t the cmparable financial measures, in the same way. A recnciliatin between the fllwing nn- measures and their mst cmparable measure and an explanatin f why management believes the nn- measures are useful fr bth management and investrs can be fund at the end f the press release psted t ur Investr Relatins website, in the Financial Infrmatin sectin and furnished by us t the SEC n August 1, Nn- Financial Measure earnings befre incme taxes prvisin fr incme taxes net earnings attributable t CDK diluted earnings attributable t CDK per share EBITDA EBITDA margin Cnstant currency adjusted revenues Cnstant currency adjusted earnings befre incme taxes Cmparable Financial Measure Earnings befre incme taxes Prvisin fr incme taxes Net earnings attributable t CDK Diluted earnings attributable t CDK per share Net earnings attributable t CDK Net earnings attributable t CDK margin Revenues Earnings befre incme taxes 14