Automatic Data Processing, Inc. · NASDAQ:ADP
Automatic Data Processing — ADP — Investor Presentation (August 2024)
23 slides from Automatic Data Processing's investor presentation, August 2024
Slide 1: ADP Overview and Strategy | Governance and ESG
ADP Overview and Strategy | Governance and ESG August 2024 Copyright © 2024 ADP, Inc.
Slide 2: Forward Looking Statements; Non-GAAP Measures
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
Slide 3: We are the Pioneer and a Global Leader of HCM
We are the Pioneer and a Global Leader of HCM Company Overview Unrivaled HCM Footprint ▪ Leader in Human Capital Management software and solutions ▪ 1.1M+ Clients | 140+ Countries | ~64,000 Global ADP Associates ✓ Small Business Client Size Large Enterprise ✓ ▪ Deliver payroll for over 42 million wo
Slide 4: The HCM Market is Growing and Evolving
The HCM Market is Growing and Evolving Our Market is Big Our Market is Growing $175B Total addressable market 5-6% Expected market growth Payroll | Workforce Management | HR | Benefits in FY25 and beyond Talent | HR Outsourcing | Analytics | Payments Sources: Internal ADP estimates calculated based
Slide 5: Our Market is Constantly Changing, and Change is Good
Our Market is Constantly Changing, and Change is Good PRODUCT PURCHASE SERVICE Work Global | Distributed | Dynamic | Legal Pricing Self-Service Transparent | Consumer-like Guided | Intuitive | AI-assisted Pay Flexible | Early Wage Access | Card Decision Making Channels HR More Research | Consultativ
Slide 6: Our Portfolio is Strong and Diversified
Our Portfolio is Strong and Diversified Our HCM Portfolio PEO 32% Small Business 16% FY21 Revenue ($15B total): $2.5B Small Business Major $2.4B Major Accounts Accounts 16% $1.1B National Accounts $2.2B International Complementary $1.0B ES HRO Solutions National $1.1B Complementary Solutions 7% ES H
Slide 7: We are Innovating Across our Product Portfolio
We are Innovating Across our Product Portfolio New User Experience Small Business Midmarket / Upmarket Upmarket / International International HCM Platforms Roll Run Workforce Now Next Gen HCM iHCM Global Payroll ADP Ecosystem ADP Wisely ADP ADP DataCloud by ADP Mobile App Marketplace Digital Service
Slide 8: Distribution: Our Market Leadership Drives Scale Benefits
Distribution: Our Market Leadership Drives Scale Benefits $2B+ 8.5K+ 170K+ in worldwide new sellers, all new logos business bookings virtually enabled sold annually 140+ 50%+ 800+ countries with of new logos sold Marketplace apps sales coverage through partnership globally Copyright © 2024 ADP, Inc.
Slide 9: Service: We are Becoming More Digitally Enabled
Service: We are Becoming More Digitally Enabled A modern client and associate experience for satisfaction, speed and efficiency Efficient onboarding Intuitive client self-service Digital support Digital tools that automate Empowering clients to view data and Automated or interactive, real-time imple
Slide 10: We Have Strengthened our Foundation in Several Key Ways
We Have Strengthened our Foundation in Several Key Ways 25%+ 20%+ 40%+ Increase in revenue per FTE Decrease in contacts per client Increase in total client count 30 pt 40 pt 92.0% Average relationship NPS Average implementation NPS Near record retention in ES Segment in FY24 50 bps Average annual
Slide 11: We Take a Disciplined Approach to Capital Allocation
We Take a Disciplined Approach to Capital Allocation • Product: $1.3B invested in Research and Development in FY24 1 Organic reinvestment to drive both revenue and margins • Go-To-Market: Sales headcount, marketing, and channel partnerships • Service: Digital transformation and AI • Thoughtful and d
Slide 12: We Have Delivered Steady Revenue Growth
We Have Delivered Steady Revenue Growth A history of consistent revenue growth… …including growing through headwinds related to COVID-19 PEO Services Segment Employer Services Segment 10-Year CAGR1 FY20 FY21 FY22 FY23 FY24 through FY19 6.2B ES 6.0B 5% 1% 1% 8% 10% 8% 5.5B Segment 4.2B 4.5B 4.8B $3.5
Slide 13: We Issued Medium-Term Targets at our 2021 Investor Day
We Issued Medium-Term Targets at our 2021 Investor Day 7 to 8% 10 to 12% Revenue Growth Adjusted EBIT Growth Organic Constant Currency; Supported by approximately 75bps About 6% ES and 10 to 12% PEO Segment Growth annual Adj. EBIT Margin expansion 11 to 13% 13 to 15% Adjusted EPS Growth Total Shareh
Slide 14: Governance and ESG
Governance and ESG Copyright © 2024 ADP, Inc.
Slide 15: We Remain Focused on Being a Leader in ESG
We Remain Focused on Being a Leader in ESG Environment Social • Commitment to Net-Zero GHG • Commitment to an Emissions by 2050 inclusive workplace • Reducing Scope 1 & 2 GHG emissions • Always Designing for 25.2% by 2025 and 50% by 2030 People – all people • Issued December 2023 GHG Update • Key HC
Slide 16: Governance: Committed to Shareholder Engagement
Governance: Committed to Shareholder Engagement We are committed to proactively engaging with shareholders; our Board is highly attuned to shareholder feedback, including governance & compensation best practices Monitoring & Assessment Outreach & Engagement • Board and management review: • ADP regul
Slide 17: Governance: Responsive to Shareholder Feedback
Governance: Responsive to Shareholder Feedback Topics of Discussion ADP Actions Taken • Board composition, self-assessment, and refreshment ✓ Ongoing Board Refreshment: New Board members joined in May 2019, April 2020, Board & process November 2020 and February 2022; Committee chair and membership r
Slide 18: Governance: Leading with Best Practices
Governance: Leading with Best Practices ADP is committed to shareholder-friendly corporate governance practices that help to drive long-term value creation ✓ Proxy access right at 3% / 3 year ownership threshold ✓ Annually elected Board; directors may be removed without (adopted August 2016) cause ✓
Slide 19: Governance: Best-in-Class Board With Balanced Skill Set
Governance: Best-in-Class Board With Balanced Skill Set Deliberate Board Composition Skill Set Aligns and Evolves With Corporate Strategy ▪ Commitment to both continuity and fresh perspectives – 4 of our 10 independent Directors have a tenure of 5 years or less1 Director Skill Set2 – Average indepen
Slide 20: Compensation: Rigorous Approach
Compensation: Rigorous Approach Five Guiding Principles Compensation Governance Ensures Alignment with Principles Emphasize variable, performance-based compensation 1 Robust Clawback Policy applicable to cash and equity incentives to ensure that pay and performance are closely aligned ➢ ➢ Stock Owne
Slide 21: Compensation: Pay Closely Aligned to Performance
Compensation: Pay Closely Aligned to Performance Balanced, Performance-Based Compensation Policy Transformation, Client Satisfaction and ESG Objectives ▪ Designed to incentivize sustainable value creation ▪ Transformation, Client Satisfaction and ESG objectives represent 20%, 10% and 10%, respective
Slide 22: Enterprise Risk Management
Enterprise Risk Management Board and key committees maintain disciplined risk assessment process to effectively pursue strategic goals * Copyright © 2024 ADP, Inc. 22
Slide 23: Corporate Social Responsibility Report
Corporate Social Responsibility Report Most Recent CSR Report Issued March 2022 ✓ Commitment to Strong Governance, Ethics, and Compliance ✓ Associate Inclusion, Engagement and Wellness ✓ Client Betterment Through Innovation ✓ Community Engagement and Volunteer Involvement ✓ Environmental Sustainabil