H&R Block, Inc. · NYSE:HRB
H&R Block — FY2021 Earnings Presentation
24 slides from H&R Block's earnings presentation, Jun 15, 2021
Slide 1: Fiscal 2021 Earnings Call
FISCAL 2021 EARNINGS CALL June 15, 2021
Slide 2: Safe Harbor Statement: Forward-Looking Statements
Safe Harbor Statement Forward-Looking Statements This presentation contains forward-looking statements within the meaning of the securities laws. Forward-looking statements can be identified by the fact that they do not relate strictly to historical or current facts. They often include words or vari
Slide 3: Safe Harbor Statement: Non-GAAP Measures
Safe Harbor Statement Non-GAAP Measures We refer to certain Non-GAAP financial measures in this presentation, including earnings from continuing operations before interest, taxes, depreciation, and amortization (“EBITDA”), adjusted diluted earnings per share from continuing operations, normalized re
Slide 4: Jeff Jones, President and Chief Executive Officer
Jeff Jones President and Chief Executive Officer
Slide 5: Block Horizons Strategy
Block Horizons Strategy
Slide 6: Block Horizons Progress
Block Horizons Progress Small Business Financial Products Block Experience Expanded reach with Block Advisors, made strides in bookkeeping & payroll, and continued strong growth at Wave Completed design phase of new mobile banking alternative; beta release expected by calendar year- end Infusing hum
Slide 7: Tax Season Update
Tax Season Update
Slide 8: Tax Season 2021: Unique and fluid dynamics
Tax Season 2021: Unique and fluid dynamics ~— | Delayed IRS e-file open ee | Mid-season changes to tax One-month New policies : delay in filing regarding deadline Two rounds of pandemic laws unemployment and recovery rebate credits ee stimulus payments
Slide 9: Tax Season 2021 volumes represent best results in over 10 years
Tax Season (TS) 2021 volumes represent best results in over 10 years TS21 Returns % Change Estimated Share (000s) vs. TS20 Gain/Loss Assisted 11,595 +7.3% +70 bps DIY 8,830 -0.5% -20 bps Total 20,425 +3.8% +30 bps Note: Tax Season 2021 is measured as total H&R Block U.S. return volume from 1/1/2021-
Slide 10: Strong results reflect early wins from Block Horizons
Strong results reflect early wins from Block Horizons [| —————— [-- Assisted Tax * Grew clients ~7%; best result in over a decade * Digital engagement increased >50% Client satisfaction scores remain strong; improvement in new client scores DIY Tax * Clients adding human help through Tax Pro Review
Slide 11: Jeff Jones, President and Chief Executive Officer
Jeff Jones President and Chief Executive Officer an
Slide 12: Tony Bowen, Chief Financial Officer
Tony Bowen Chief Financial Officer
Slide 13: FY21 Results
FY21 Results
Slide 14: FY21 results from continuing operations
Note: All amounts are unaudited and represent results from continuing operations. 1 All per share amounts are based on weighted average fully diluted shares over the corresponding period. 2 Adjusted EPS is a non-GAAP financial measure. Please see the Safe Harbor Statement at the beginning of this pr
Slide 15: Capital allocation priorities unchanged
Capital allocation priorities unchanged, demonstrating confidence in our future Maintain adequate liquidity for operational needs, accounting for seasonality Fund investments in strategic imperatives Return excess capital through quarterly dividends and share repurchases
Slide 16: Committed to the dividend and opportunistic share repurchases
Committed to the dividend and opportunistic share repurchases Dividend O/ Increase in +4 Yo quarterly dividend Share Repurchases $188M nea +35% 6% Total increase in past 6 years Float repurchased in FY21
Slide 17: Renewed five-year line of credit with attractive terms
Renewed five-year line of credit with attractive terms Capacity aligned to Reduce expected business needs annual costs by F $1.58 & $3M Covenants aligned with new calendar Fa FY22 7
Slide 18: Upcoming change to fiscal year end
Upcoming change to fiscal year end to improve comparability of results |= Pe Better alignment of complete tax seasons in comparable fiscal periods and other related benefits Plan to file 10-QT for transition period months of May and June later this summer; FY22 to begin July 1, 2021 18
Slide 19: FY 2022 Outlook
FY 2022 Outlook
Slide 20: Normalizing FY21 Revenue and EBITDA
Normalizing FY21 Revenue and EBITDA for new fiscal year, last tax season, and pandemic FY21 Actuals (April FYE) $3,414 $932 coe pews aur 20 Rented = se FY21 Estimate (June FYE) | $3,543 | $997 Remove TS20 Activity in July 2020 $(250) $(205) E23 Emerald Card Stimulus $(45) $(38) Pandemic Sick Pay/PPE
Slide 21: FY22 outlook
FY22 outlook Revenue and EBITDA are an improvement to normalized FY21 results EBITDA growing faster than revenue as cost efficiencies offset variable expenses Revenue $3.25B - $3.35B EBITDA $765M - $815M Effective Tax Rate 16% - 18% Depreciation & Amortization $150M - $160M Interest Expense $90M - $
Slide 22: Remain confident in long-term plan to drive shareholder value
Remain confident in long-term plan to drive shareholder value Sustainable annual revenue growth of 3 to 6% EBITDA and EPS growing at a faster rate than revenue Redeploying cost savings to highest ROI opportunities Maintaining a strong balance sheet and liquidity position Continuing to return capital
Slide 23: Jeff Jones, President and Chief Executive Officer
Jeff Jones President and Chief Executive Officer 23
Slide 24: Q&A
Q&A