Log in
E-mail
Password
Remember
Forgot password ?
Become a member for free
Sign up
Sign up
New member
Sign up for FREE
New customer
Discover our services
Settings
Settings
Dynamic quotes 
OFFON

MarketScreener Homepage  >  Equities  >  Nasdaq  >  Automatic Data Processing, Inc.    ADP

AUTOMATIC DATA PROCESSING, INC.

(ADP)
  Report
SummaryQuotesChartsNewsRatingsCalendarCompanyFinancialsConsensusRevisions 
SummaryMost relevantAll NewsAnalyst Reco.Other languagesPress ReleasesOfficial PublicationsSector news

Automatic Data Processing : ADP Earnings Call & Webcast Q1 Fiscal 2021

11/19/2020 | 09:19am EST

ADP Earnings Call & Webcast

Q1 Fiscal 2021

October 28, 2020

Copyright © 2020 ADP, Inc.

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" "is designed to" and other words of similar meaning, are forward-looking statements. These statements are based on management's expectations and assumptions and depend upon or refer to future events or conditions 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 or that could contribute to such difference include: ADP's success in obtaining, and retaining, clients, and selling additional services to clients; the pricing of products and services; the success of our new solutions; compliance with existing or new legislation or regulations; changes in, or interpretations of, existing 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 ratings and the impact on our funding costs and profitability; security or cyber breaches, fraudulent acts, and system interruptions and failures; employment and wage levels; changes in technology; availability of skilled technical associates; the impact of new acquisitions and divestitures; the adequacy, effectiveness and success of our business transformation initiatives; and the impact of and uncertainties related to major natural disasters or catastrophic events, including the COVID-19 pandemic. ADP disclaims any obligation to update any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by law. These risks and uncertainties, along with the risk factors discussed under "Item 1A. Risk Factors" of our most recent Annual Report on Form 10-K, and in other written or oral statements made from time to time by ADP, should be considered in evaluating any forward-looking statements contained herein.

Non-GAAP Measures

Adjusted EBIT, adjusted EBIT margin, adjusted diluted earnings per share, adjusted effective tax rate, and organic constant currency are all non-GAAP financial measures. Please refer to the Q1 fiscal 2021 earnings release available at investors.adp.com for a discussion of why ADP believes these measures are important and for a reconciliation of non-GAAP financial measures to their comparable GAAP financial measures.

This presentation is a supplement to our Q1 fiscal 2021 earnings release; it is intended to be read in conjunction with, not as a substitute for, or in isolation from, the earnings release.

2

Copyright © 2020 ADP, Inc

CEO's Perspective

  • Strong Q1 FY21 results driven by revenue and margin outperformance versus expectations
    • Revenue decline of 1%, adjusted EBIT (a) margin increase of 120 basis points, and adjusted diluted EPS (a) growth of 5%
  • Employment gradually improved with US pays per control decline of (9)% in Q1 FY21, compared to decline of (11)% in Q4 FY20
  • Record Q1 Employer Services New Business Bookings
    • Continued recovery in client purchase activity and sales productivity driving broad-based outperformance
  • Record Q1 Employer Services client retention
    • Client service and product innovation remain differentiators, with client satisfaction levels at or near record levels across portfolio
  1. For a reconciliation of these non-GAAP financial metrics to their closest comparable GAAP metrics see our Q1 fiscal

2021 earnings release available at investors.adp.com.

3

Q1 Fiscal 2021 Financial Highlights

(unaudited)

Total Revenues

Adjusted EBIT (a)

Adjusted Diluted EPS (a)

i 1%

h 5%

h 5%

i 1% Organic Constant Currency (a)

Adjusted EBIT (a) Margin h 120 bps

$3,496M

$3,471M

$745M

$781M

$1.34

$1.41

Q1 FY20

Q1 FY21

Q1 FY20

Q1 FY21

Q1 FY20

Q1 FY21

(a) For a reconciliation of these non-GAAP financial metrics to their closest comparable GAAP metrics see our Q1 fiscal 2021 earnings release available at investors.adp.com.

4

Copyright © 2020 ADP, Inc.

Q1 Fiscal 2021 Employer Services Segment Results

(unaudited)

ES RevenuesES MarginQ1 Highlights

i 3%

h 120 bps

Record Q1 ES bookings and

i 3% Organic Constant Currency (a)

retention driving significant revenue

upside to expectations

$2,441M

$2,377M

27.8%

29.0%

PPC in line with expectations

• Client funds balances stronger than

Q1 FY20

Q1 FY21

Q1 FY20

Q1 FY21

expectations but interest income

remains significant drag

ES New Business Bookings h 2%

Resilient revenue performance

U.S. Pays Per Control i 9%

Continued cost containment

Average client funds balances i 7%

Execution of transformation

Average client funds yield i 30 bps

initiatives

  • Intense focus on operational execution
  • Continued cost containment and headcount control

(a) For a reconciliation of this non-GAAP financial metric to its closest comparable GAAP metric see our Q1 fiscal 2021 earnings release available at investors.adp.com.

5

Copyright © 2020 ADP, Inc

Q1 Fiscal 2021 PEO Services Segment Results

(unaudited)

PEO Revenues

PEO Margin

Q1 Highlights

  • 4%

$1,057M $1,096M

Q1 FY20

Q1 FY21

h 40 bps

Better-than-expected revenue and

WSE performance in the quarter

14.1%

14.5%

WSE outperformance on stronger

retention

• Same-store pays performance down

mid-single digits, in line with

Q1 FY20

Q1 FY21

expectations

Revenues excluding zero-margin

Includes 60 basis points of

benefits pass-throughsi 1%

benefit from ADP Indemnity

  • Average Worksite Employees paid i 3% to 547,000
  • NPS continues upward trend
  • Margin performance against expectations driven by cost containment and further supported by actuarial benefit at ADP Indemnity

6

Copyright © 2020 ADP, Inc

Updated Macroeconomic Assumptions for Fiscal 2021

Macro Driver

Prior

Current

Pays Per Control

Negative through Q3, positive in Q4;

Unchanged

(4) to (3)% average for full year

Out-of-Business

Elevated losses Q1 through Q3

Elevated losses in Q2 and Q3

Client Funds Balances

Balance decline of (8) to (6)%

Balance decline of (3) to (1)%

and Interest

Average yield of 1.6%

Average yield of 1.6%

7

Copyright © 2020 ADP, Inc

Fiscal 2021 Outlook

Fiscal 2020

July 29, 2020

(a)

October 28, 2020

(a)

(unaudited)

Fiscal 2021 Outlook

Fiscal 2021 Outlook

Revenues

$14,590M

(4) to (1)%

(1) to 1%

Total ADP

Adj. EBIT Margin(b)

23.0%

~(300) bps

(150) to (100) bps

Adj. Effective Tax Rate(b)

22.6%

23.1%

23.1%

Adj. Diluted EPS(b)

$5.92

(18) to (13)%

(7) to (3)%

Revenues

$10,087M

(5) to (3)%

(2)% to flat

Margin

30.3%

~(300) bps

(150) to (100) bps

Employer Services

ES New Business Bookings

$1.2B

Flat to 10%

10 to 20%

Client Revenue Retention

90.5%

(100) to (50) bps

(50) bps to flat

Pays Per Control

(1.0)%

(4) to (3)%

(4) to (3)%

Revenues

$4,511M

(2) to 2%

Flat to 3%

PEO Services

Revenues Ex Zero-MarginPass-throughs

$1,604M

(4) to (1)%

(1) to 1%

Margin

13.5%

~(100) bps

(50) bps to flat

Average WSEs

571,000

(3)% to flat

(1) to 1%

Average Client Funds Balances

$26.0B

(8) to (6)%

(3) to (1)%

Client Funds

Yield on Client Funds Portfolio

2.1%

(50) bps to 1.6%

(50) bps to 1.6%

Interest

Client Funds Interest Revenue

$545M

$390 to $400M

$400 to $410M

Extended Investment Strategy

$561M

$430 to $440M

$435 to $445M

  1. Outlook contemplates the anticipated impact of foreign currency in revenue and operating results.
  2. For a reconciliation of these non-GAAP financial metrics to their closest comparable GAAP metrics see our Q1 fiscal 2021 earnings release available at investors.adp.com.

8

Copyright © 2020 ADP, Inc

Appendix: Client Funds Investment Strategy Detail

Fiscal 2021 Outlook

Average Balance ($)

Average Yield

Interest ($)

Client Short

5.9

- 6.0B

~0.1%

~10M

Client Extended

10.7

- 10.9B

1.7 - 1.8%

185 - 190M

Client Long

8.8

- 9.0B

2.3 - 2.4%

205 - 210M

Total Client Funds (a)

25.4

- 25.9B

~1.6%

400 - 410M

Corporate Extended Interest Income (b)

~2.3B

~1.7%

~40M

Borrowing Days Interest Expense

~2.3B

~0.1%

~(5)M

Net Impact From Client Funds

435 - 445M

Extended Investment Strategy

Interest on the Extended Portfolio flows into two separate sections of the Statements of Consolidated Earnings.

  1. Reported as Interest on Funds Held for Clients in the revenue section of the Statements of Consolidated Earnings.
  2. A component of Interest Income on Corporate Funds, reported within Other Income, net, on the Statements of Consolidated Earnings.

9

Copyright © 2020 ADP, Inc

Disclaimer

ADP - Automatic Data Processing Inc. published this content on 26 October 2020 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 19 November 2020 14:18:00 UTC


© Publicnow 2020
All news about AUTOMATIC DATA PROCESSING, INC.
01/21ADP CANADA NATIONAL EMPLOYMENT REPOR : Employment in Canada Decreased by 28,800 ..
AQ
01/20AUTOMATIC DATA PROCESSING : Customer Reviews Drive More Than 30 Accolades for AD..
PU
01/15S&P 500 Posts 1.5% Weekly Decline, Led by Communication Services, Technology;..
MT
01/14MEDIA ALERT : December 2020 ADP Canada National Employment Report to be released..
AQ
01/13INSIDER TRENDS : 90-Days of Insider Buying at ADP Interrupted with Share Disposi..
MT
01/13AUTOMATIC DATA PROCESSING : to Pay Unchanged Quarter Dividend of $0.93/Share; Pa..
MT
01/13AUTOMATIC DATA PROCESSING : ADP Declares Regular Quarterly Dividend
PR
01/13AUTOMATIC DATA PROCESSING : Evercore ISI Downgrades Automatic Data Processing to..
MT
01/12INTERCONTINENTAL EXCHANGE : Automatic Data Processing Launch New Data Solution C..
MT
01/06INSIDER TRENDS : ADP Sees 90 Days of Insider Buying Trend Reducing with Share Di..
MT
More news
Financials (USD)
Sales 2021 14 591 M - -
Net income 2021 2 397 M - -
Net cash 2021 381 M - -
P/E ratio 2021 29,0x
Yield 2021 2,30%
Capitalization 69 459 M 69 459 M -
EV / Sales 2021 4,73x
EV / Sales 2022 4,44x
Nbr of Employees 58 000
Free-Float 67,0%
Chart AUTOMATIC DATA PROCESSING, INC.
Duration : Period :
Automatic Data Processing, Inc. Technical Analysis Chart | MarketScreener
Full-screen chart
Technical analysis trends AUTOMATIC DATA PROCESSING, INC.
Short TermMid-TermLong Term
TrendsBearishBullishNeutral
Income Statement Evolution
Consensus
Sell
Buy
Mean consensus HOLD
Number of Analysts 20
Average target price 165,47 $
Last Close Price 161,98 $
Spread / Highest target 23,5%
Spread / Average Target 2,16%
Spread / Lowest Target -16,0%
EPS Revisions
Managers and Directors
NameTitle
Carlos A. Rodriguez President, Chief Executive Officer & Director
John P. Jones Non-Executive Chairman
Kathleen Anne Winters Chief Financial Officer & Vice President
Richard T. Clark Independent Director
Peter E. Bisson Independent Director
Sector and Competitors
1st jan.Capitalization (M$)
AUTOMATIC DATA PROCESSING, INC.-8.61%69 459
TATA CONSULTANCY SERVICES14.36%165 981
ACCENTURE PLC-2.47%163 595
INTERNATIONAL BUSINESS MACHINES CORPORATION-5.78%117 308
INFOSYS LIMITED6.68%77 915
VMWARE, INC.-4.11%56 288