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Broadridge Financial Solutions Inc (BR) Q4 2019 Earnings Call Transcript

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Broadridge Financial Solutions Inc (NYSE: BR)
Q4 2019 Earnings Call
Aug 1, 2019, 8:30 a.m. ET

Contents:

  • Prepared Remarks
  • Questions and Answers
  • Call Participants

Prepared Remarks:

Operator

Good morning and welcome to the Broadridge Fourth Quarter and Fiscal Year 2019 Earnings Conference Call. [Operator Instructions].

I would now like to turn the conference over to Edings Thibault, Head of Investor Relations. Please go ahead, sir.

W. Edings Thibault -- Head of Investor Relations

Thank you, Rocco. Good morning everyone and welcome to Broadridge's Fourth Quarter and Fiscal Year 2019 Earnings Conference Call. Our earnings release and the slides accompanying this release may be found on the Investor Relations section of broadridge.com. Joining me on the call this morning are Tim Gokey, our CEO and President; and our CFO, Jim Young. Before I turn the call over to Tim, a few standard reminders.

We will be making forward-looking statements on today's call regarding Broadridge that involve risks. A summary of these risks can be found on the second page of the slides and a more complete description on our Annual Report on Form 10-K. We will also be referring to several non-GAAP measures, which we believe provide investors with a more complete understanding of Broadridge's underlying operating results. An explanation of these non-GAAP measures and reconciliations to their comparable GAAP measures can be found in the earnings release and presentation.

Let me now turn the call over to Tim Gokey.

Timothy C. Gokey -- President and Chief Executive Officer

Thank you, Edings and good morning, everyone. Broadridge delivered strong fourth quarter and fiscal year 2019 results. Our outlook for fiscal year '20 calls for yet another strong year, including high single-digit growth in recurring revenue and 8% to 12% adjusted EPS growth. This morning I will provide a brief review of our 2019 results including the strong close to another record sales year and then talk about the acquisition of RPM Technologies, which was announced after our last earnings call. Finally, I will give you an update on our progress against the priorities I laid out in my first earnings call as CEO, earlier this year. Jim will then provide a closer look at our financial results and give you more details regarding our 2020 guidance. We'll close with your questions. Let's get started.

I'm really pleased with both our strong fiscal year 2019 results and with how well we are positioned to deliver sustained growth in fiscal '20. FY '19 recurring fee revenues rose 6% to $2.8 billion, more than offsetting the decline in low to no margin distribution revenue and lower event driven revenues. In all, total revenues rose 1% to $4.4 billion. Adjusted operating income rose 8%, thanks to strong margin expansion. And adjusted EPS rose 11%. After a strong fourth quarter and the landmark UBS Wealth Management deal, full year closed sales rose 9% to $233 million marking another record sales year. Just as importantly, we hit those marks, while continuing to fund investments in new products and technologies. We also made three tuck-in acquisitions that will strengthen and grow our business, especially in Wealth Management. 6% recurring fee growth, double-digit earnings growth, record sales, continued investment, that's why we feel so strongly about 2019.

Based on these results, we're announcing an 11% increase in our annual dividend to $2.16. Broadridge has now increased its dividend every year since becoming a public company in 2007 and 2019 marks the eighth consecutive double-digit increase. Looking ahead, we expect higher growth in 2020. Specifically, we expect recurring growth -- revenue growth -- recurring revenue growth of 8% to 10%, including 5% to 7% organic revenue growth, and factoring in lower Event and tight Distribution revenues 3% to 6% total revenue growth. We further expect continued margin expansion with adjusted operating income margin to be approximately 18%, which will drive adjusted EPS growth of 8% to 12%. Lastly, we expect another year of strong closed sales in the range of $190 million to $230 million.

Based on our 2019 results, together with our outlook for continued growth in fiscal '20, put us in a very strong position to deliver the three year targets we shared at our last Investor Day, including recurring revenue growth, margin expansion and adjusted EPS growth. I'm particularly pleased to note that the midpoint of our adjusted EPS guidance range implies an 18% three year CAGR right at the high end of our 14% to 18% three year target.

Now let's turn to Slide 5 for an update on our business. Keep in mind that when I discussed our ICS and GTO results, I'll be referring to growth rates that better represent the underlying business trends by excluding the impact of the ASC 606 accounting change. I'll start with closed sales where we ended a record year on a strong note. $72 million of closed sales represents our third strongest quarterly result trailing only last year's Q4 and the second quarter of this year and propelling us for full-year record of $233 million. I'm especially pleased with the breadth of our sales results with two-thirds coming from ticket sizes of less than $2 million. While large deals are as critical, the most important driver of our sales in recent years has been these core deals, literally hundreds of them every year. Our success in making these kind of bread and butter sales, most of them up sales to existing clients is a direct result of the breadth of our product offering and the quality of our client relationships.

I'm also pleased to note that our fourth quarter acquisitions contributed to these results, with RPM notching a nice strategic sale of wealth management software for major Canadian banks. Our ICS segment continued to perform well in the fourth quarter, with 6% recurring revenue growth on an underlying basis. Excluding customer communications, ICS recurring revenues rose 8% in the fourth quarter, driven in part by solid stock and interim record growth of 6% and 5%, respectively. For the full year, stock record growth was also 6%, and interim record growth was 9% in each case slightly stronger than the average growth of the past 10 years. The long-term trend for this greater portfolio diversification, coupled with the growing number of managed accounts and more recently model-driven investment shows no sign of easing. Our ICS business also benefited from continuing momentum from our data and analytics products and strong growth in our corporate issuer business, where we are seeing strong demand for our disclosure solution services.

Customer communications and fulfillment revenues declined 1% in the fourth quarter and 3% for the year. Although the growth trajectory of our customer communications business has been disappointing in recent quarters, we expect revenue declines to narrow as we complete the off-boarding of a large customer over the balance of the calendar '19 and as recent sales wins our bottom line. Our GTO segment performed well in the fourth quarter. GTO revenues rose 8% driven by a rebound in organic growth to 5%. We expect this organic reacceleration to continue in FY '20 as GTO returns to stronger growth, especially in second half. Much of this growth will come from new client on-boardings while our strong revenue backlog gives us good line of sight for FY '20 growth. GTO revenue growth also benefit from the acquisitions of Rockall, which closed in May and RPM, which closed in early June.

Speaking of M&A. I am pleased we could be as active as we were in the fourth quarter. We acquired three businesses for approximately $400 million, the largest of these was RPM, which we acquired for CAD400 million or about $300 million. The acquisition of RPM broadens and deepens our business in Canada by extending our product offering for Canadian Wealth market. Much of the market in Canada is served through the bank channel and RPM extends and deepens our already strong relationships with several leading Canadian banks and brings newer relationships as well. RPM has been growing at low-double digits and with the acquisition offering [Phonetic] a promising start, we expect continued strong growth going forward.

The acquisition of RPM together with Rockall and TD acquisitions are great examples of how targeted tuck-in acquisitions, broaden our product lineup, deepen our relationship with key clients and drive attractive long-term returns. Looking ahead, our strong balance means we are well positioned balance sheet means, we are well positioned to pursue additional tuck-in opportunities, that will strengthen our governance, Capital Markets and Wealth Management strategies. We'll also stay disciplined in ensuring that any transactions meet our financial and strategic hurdles.

With that overview complete, let's turn to Slide 6, with an update on the progress Broadridge has made against the priorities I discussed in my first earnings call as CEO. At that time, I identified three key priorities all of which are aligned tightly with our Investor Day strategy, to continue to transform Broadridge and to build world-class franchises governance capital markets and Wealth Management. The first priority I outlined in February is to deliver on our near-term financial objectives. Both our FY '19 guidance and the FY '20 expectations are embedded in our Investor Day targets. The second is to executing as our multi-year growth objectives across our governance and capital markets franchises and in building our Wealth franchise. My final priority is to continue to strengthen the long-term foundations of our growth that continue to build on a strong culture and world-class capabilities of product and next generation technology.

Across all three priorities, I said we will maintain a keen focus on strong balanced capital management. So let's take each one in order. The first one is straightforward. With 2019 in the books, we delivered 6% recurring revenue growth, 110 basis points of margin expansion and 11% adjusted EPS growth. All in line or above our guidance. We also achieved another year of record closed sales giving us further visibility into future growth. As I noted earlier, our FY '20 guidance puts us on track to meet our three year Investor Day objectives for recurring revenue growth and margin expansion and to deliver at the high end of our adjusted EPS growth rate. Balance capital stewardship is a key part of our financial and growth strategy. Our first use of cash remains our dividends and the 11% increase we announced this morning, further reinforces the importance of a strong and growing dividend.

In 2019, we continue to balance investments in our products and technology with returning additional capital to shareholders, investing approximately $400 million in M&A and $367 million to repurchase shares, ending the year on track with our leverage targets. You should expect us to continue to take a balanced and long-term approach to our capital stewardship.

The second priority I discussed is multi-year growth execution. In governance, our strategy is simple and clear. We are building the next generation of [Indecipherable] and extending the complementary web of services to all parts of the network we serve. Over the past year Broadridge has rolled out innovative new digital capabilities, including a new voting app that can be accessed stand-alone or through NAPI. We are working with more than 130 mutual funds to put them in position to take full advantage of the new 30-E3 notice and access regulations in 2021. Last but not least, we began work with our clients to ensure that they will be able to fulfill the requirements of the EU's shareholder rights directive when it goes into effect in late 2020.

These are all important steps forward in building the next generation of regulatory communications. We're also extending our services across the governance network. Thanks to the disclosure [Phonetic] capabilities we acquired in 2017. Our recurring revenues from corporate issuers grew almost 20% in 2019. As we handle more and more of our clients' critical governance needs, from annual meeting services to regulatory filings. Our data and analytics offering, we are marrying our own proprietary data with other sources to get mutual funds, critical information and worldwide fund flows, also generated double-digit growth. Finally, our acquisition of TD Ameritrade's retirement plan custody and trust assets will help us continue to link our mutual fund clients and financial advisors to administer independent 401k plans and fund additional platform development.

In capital markets, we continue to make progress on on-boarding new clients, including to our new GPTM global platform. That strong backlog and our visibility in terms of bringing these client out online is a key driver behind our expectations for accelerated growth in our GTO business. Included in that backlog in the significant GPTM sale to a leading Asian bank, another sign that our global growth strategy continues to pay off. In addition, we signed a multi-million-dollar deal in the fourth quarter with a large US bank to extend the reach of our GPTM platform. Finally we made good strides in developing enhanced network benefits for fixed income market participants.

2019 has been a big year for our Wealth Management business. During the second quarter, we signed a large deal with UBS, to build a technology platform leasing front, middle and back office capabilities. Six months later we are making good progress against our product road map. We also strengthened our Wealth Management capabilities via the acquisition of Rockall and RPM. So, I feel good about how we're executing the growth strategy across governance, capital markets, and Wealth Management.

My third focus is on securing the future by continuing to transform Broadridge, building on the world-class capabilities that make us the right industry partner now and for the long term. That means, strengthening our client-focused culture, building on our world-class product and technology capabilities and investing in talent. On culture, I'm pleased to announce that our revenue retention rate has remained a strong 97% and that Broadridge was again awarded multiple workplace awards including being identified as a great place to work in the US, Canada and India. And issuing a perfect score at a recent ranking of best places to work for LGBT quality by Human Rights campaign. We're proud of these accomplishments.

At the same time, we've increased our focus on product development and we continue to make strides in integrating next generation technologies across artificial intelligence, blockchain, cloud and digital. During 2019 Broadridge drilled out enhanced digital communications, accelerated our push to cloud, continue to invest in blockchain and advanced our work on our AI for our fixed income business among many other accomplishments. These achievements are not going unnoticed by our clients. Finally, the market for world-class talent is fierce, so I'm especially pleased with some of the recent additions to our senior management team.

Samir Pandiri has joined us from BNY Mellon, where he ran the asset servicing division, a business larger than Broadridge by revenue. He will lead Broadridge International. Fred Duden joined us from JP Morgan and previously Charles Roth to lead our global product management. Fred has led to build some of the most innovative digital wealth products for the past few years. I'm convinced that our ability to increasingly link our individual products to form more powerful solution suites will drive our success. So I'm delighted to welcome both Samir and Fred to the company and their choice to align their careers with Broadridge is emblematic of the opportunity, we all see ahead. Speaking of additions, I'm also excited to welcome Amit Zavery to our Board of Directors. Amit, is a seasoned technology leader with experience building leading technology businesses at both Oracle and Google. And he will be a tremendous value to our Board and to our management team. So Broadridge is making progress against all three of our key priorities financial, strategic and foundational.

Let me sum up, Broadridge delivered strong financial results while continuing to invest even in a lower event environment. We have real growth momentum across our two strong franchises and in building a third. We continue to make the investments across product technology and talent that further strengthen our position as a trusted partner. As a result Broadridge has never been better positioned for growth. The financial services industry's need to leverage next generation technology to reduce cost and increased differentiation continues to increase. And Broadridge has the unique capabilities, deep experience and ability to invest to accomplish these goals. The combination of strong underlying demand, continued execution and continued investment puts us in position to deliver another strong year in 2020 at a sustained continued growth over the long term. For my part, I'm as excited as ever about Broadridge's prospects to create value for our associates, shareholders and the millions of people all over the world who rely on our clients to help them meet their financial goals.

Before I turn it over to Jim for a review of the financials, I want to pause and I want to thank the more than 11,000 Broadridge associates around the world, who are enabling better financial lives for millions and are making our vision of transformation a reality. Jim.

James M. Young -- Corporate Vice President and Chief Financial Officer

Thanks, Tim, and good morning, everyone. I will begin my comments I'll begin my comments with a few call-outs. First, closed sales and backlogs. Another record closed sales performance pushed our recurring revenue backlog, up to $330 million at the end of fiscal '19 from $295 million at the end of fiscal '18. Second, Q4 revenue growth under ASC 606; once again, we are providing in today's presentation revenue growth rates on both an as reported basis and fiscal '18 adjusted for ASC 606 to provide a more meaningful view of our top line performance.

So on ASC 606 adjusted basis recurring fee revenue grew a healthy 6% in the fourth quarter. Full year recurring fee growth was also 6%, right in line with our guidance. Importantly, while the ASC 606 change did have a big impact on our quarterly recurring revenue recognition, especially in our third and fourth quarters, it had virtually no impact on full year result comparisons. Third, capital deployment; acquisitions, we invested approximately $400 million including deferred payments in the fourth quarter for three acquisitions that will strengthen our growth profile and broaden our product line up, especially in Wealth Management. We expect these acquisitions to contribute approximately 3 points of recurring fee revenue growth in fiscal '20. The earnings contribution of fiscal '20 is expected to be modest after accounting for the financing costs.

Share repurchase, we also deployed $270 million in the quarter to repurchase shares for a total of $367 million in fiscal 2019. As a result of this capital deployment, we exited the year just below our long-term target leverage ratio. Fourth and final, guidance; our fiscal '20 guidance calls for organic recurring fee growth of 5% to 7%, plus 3 points of growth from M&A for a total of 8% to 10% recurring revenue growth. We expect this to result in 8% to 12% adjusted EPS growth.

Let's move to Slide 7. On a reported basis, recurring revenues were down 6% and total revenues were down 8%. However, as I noted, the implementation of the ASC 606 accounting standard in fiscal 2019 shifted a significant chunk of equity proxy revenues out of the fourth quarter and into the third quarter and the fiscal '18 results are reported under the old ASC 605 standard. Therefore, the most meaningful comparison is to fiscal '18's Q4 revenue results under ASC 606 as shown on this page. Using this like-for-like basis, recurring revenue grew a healthy 6% and total revenue grew 1%.

Slide 8 provides the same view on a full year basis. As you can see, the impact of ASC 606 on full year revenue results is negligible. In both cases, recurring revenues rose 6% in fiscal '19 to $2.8 billion and total revenues rose 1% to $4.4 billion. With ASC 606 now fully implemented, fiscal '20 results starting with the first quarter, were reported on the same basis as fiscal '19.

Let's turn to Slide 9 to dig a little deeper into our quarterly revenue growth. Keep in mind that the numbers in this slide are presented on the ASC 606 adjusted basis I just talked about. I'll start with recurring revenues on the bottom half of the slide, because those are the revenues that is the biggest driver of our overall economics. Recurring revenues rose 6% in the quarter, including organic growth of 5%. The biggest driver of that growth came from the on-boarding of new business or closed sales as shown here. As expected, internal growth rebounded nicely in the fourth quarter after a lull in Q3, contributing 2 points of growth, driven by higher stock record growth and higher GTO revenues. Acquisitions contributed only 1 point of growth in the fourth quarter as the RPM acquisition did not close until early June and the TD deal closed at the end of June. As I noted earlier, these deals will contribute more meaningfully in fiscal '20.

Total revenues grew 1% to $1.2 billion in the quarter as the growth in recurring revenues was offset by lower event driven and distribution revenues. Event driven revenues came in at a healthy $51 million but were down from a year ago. The continued decline in low to no margin distribution revenues contributed a 2 point drag and the strength in the US dollar versus the Canadian dollar and British pound lowered revenue growth by 1 point.

Next, I'll cover the performance of our ICS and GTO segments on Slide 10. ICS recurring fee revenues declined 11% on an as reported basis as the accounting change shifted approximately $100 million of mostly proxy revenue to the third quarter. Adjusting for ASC 606, recurring revenues rose 6% in the fourth quarter. Looking at the growth drivers behind that 6% increase, steady net new business gains kept pace even with the ongoing run-off of the known client loss in customer communications. Solid equity in the rental [Phonetic] position growth and excellent issuer performance helped to drive 2 points of internal growth in the fourth quarter. The acquisitions of FundAssist and MackayWilliams in the fourth quarter of fiscal '18 also contributed 1 point to growth.

Turning to GTO; GTO rebounded nicely in the fourth quarter with 8% total revenue growth and 5% organic growth up from flat in Q3, contributing to GTO's return to healthy organic growth levels was 2 points of internal growth compared to a negative 3 points last quarter. That rebound was driven by a combination of modestly higher trading volumes and better licenses and other revenues performance.

Let's turn to profits on Slide 11. On a reported to reported basis, adjusted operating income declined 8% to $267 million and adjusted EPS declined 8% to $1.72 per share. The decline in fourth quarter earnings was a result of the ASC 606 shift of proxy fee revenues and related earnings from the fourth quarter to the third quarter. These results were right in line with the guidance we gave on our May earnings call.

And now for the full year on Slide 12. Looking through all the noise around the timing of revenue recognition caused by ASC 606 and typical seasonality, Broadridge delivered another strong full year with adjusted operating income growth of 8% and adjusted EPS growth of 11%. Moving to capital allocation on Slide 13. Broadridge generated $544 million of free cash flow in fiscal '19, approximately $20 million below our guidance range as a result of higher working capital, a slightly lower excess tax benefit or ETB and higher client on-boarding investments, which should serve to drive future growth. We invested approximately $550 million back into our business. The biggest use of cash was for acquisitions, which as Tim noted, will extend our product breadth and strengthen our Wealth Management business. In total, we invested approximately $400 million to buy RPM, Rockall and the TD assets with $350 million of the aggregated purchase price coming out of cash in fiscal '19 another $43 million that will be paid in Q1 of fiscal '20.

Given our typical reinvestment in newly acquired businesses and deal financing costs, we expect modest EPS contribution in fiscal 2020 from these deals, although we expect all three to generate very attractive returns over time. We also invested more than $70 million in capex and software, another large area of investment for us. Approximately $70 million net of client reimbursements was in the client driven work we are doing to build our global GPTM post-trade technology platform and our new wealth product. Linking these product development efforts to long-term client contracts gives us the confidence and ability to accelerate our product development efforts. And we expect this area of investment to pick up further in fiscal '20 as large efforts accelerate and push the investment to greater than $100 million. In conjunction with our revenue backlog, we view the spend as a positive sign of our growth and future cash flows. Given this increase in investment, we expect fiscal '20 free cash flow to be equivalent to that of fiscal '19.

In fiscal '19, we also balanced those investments with returning capital to shareholders. In total, we returned $578 million equivalent to about $5 per share to our shareholders in fiscal 2019. $211 million was in the form of dividends, a figure that will climb to greater than $240 million in fiscal '20, as a result of 11% increase in the dividend that we announced this morning. We also deployed $367 million net of option proceeds to repurchase 3.2 million shares, including 2.3 million shares in the fourth quarter.

We closed fiscal 2019 with an EBITDAR debt leverage ratio of 1.9 times, in line with our long term target of 2.0 times adjusted leverage. Our free cash flow and balance sheet position Broadridge well for continued balanced capital allocation in fiscal '20 and beyond.

Before I give some additional insight into our guidance. I want to touch on our recurring revenue backlog on slide 14. As a reminder our recurring revenue backlog represents an estimate of first year revenue from closed sales that has not yet been recognized. Our recurring revenue backlog grew 12% to approximately $330 million from $295 million at the end of fiscal '18 as our record closed sales more than outstripped revenues on-boarded over the course of fiscal '19. This equates to 12% of fiscal '19 recurring revenues, further the not yet live portion grew to $240 million. We believe the backlog is a good indicator of our ability to generate ongoing revenue growth.

Now let's look ahead into fiscal '20. Our full year guidance, can be found on Slide 15. First, we expect recurring fee revenue growth to be in the range of 8% to 10%, which includes organic growth of 5% to 7%, and approximately 3 points of growth coming from our fourth quarter acquisitions. The midpoint represents acceleration from fiscal '19, driven mostly by acceleration of growth in our GTO segment. We expect GTO's recurring revenue growth to be in the mid-teens as a steady stream of new client on-boardings should push up GTO's full-year organic growth rate to mid to high single-digit levels. RPM a $40 million to $50 million revenue business and Rockall, a $10 million to $15 million revenue business will contribute the balance.

In ICS we expect another year of mid single-digit organic growth, driven by continued healthy mid to upper single digit position growth, and growth in our data and analytics product lines, partially offset by a flattish top line performance in customer communication. Next, we expect total revenue growth to be in the range of 3% to 6% as we expect low margin distribution revenues to be roughly flat or contract in the low single digits, thus weighing down total revenue growth. Rounding out total revenue growth, we expect an approximate 5% to 15% decline in event driven revenues. And we expect FX loss to widen at a rate greater than recurring growth with the addition of more non-US revenue, including from our recent acquisitions.

Third, we expect adjusted operating income margin to be approximately 18%, up from 17% in fiscal '19, which is more or less in line with our target of a 50 plus basis point per annum increase. The margin expansion is being driven by higher recurring revenues and modest expense growth, offset in part by lower event driven revenues. This means we are targeting high-single digit or better growth in adjusted operating income.

Moving down the income statement, the increase in leverage should result in higher interest expense. Our overall tax rate should be steady at 21% as our core tax rate, which excludes the excess tax benefit remains unchanged at 24%. And we are projecting ETB of $20 million in fiscal '20 in line with fiscal '19, $19.3 million benefit. We also expect a modest benefit from lower share count as a result of our fourth quarter share repurchases. As a result, we expect adjusted EPS growth to be 8% to 12%. And last, we expect closed sales to be in the range of $190 million to $230 million.

Finally, a word on Q1 fiscal '20 in earnings seasonality. As you think about the quarterization of your estimates, please recall that our event fees were 30% -- we're up 30% in Q1 fiscal '19 and represented the largest quarter for event driven fees in fiscal '19. Consequently, we expect event fees to contract in the first quarter of fiscal 2020 by approximately 30% to 35% to a more normalized level, which will also have an impact on first quarter EPS. With event driven revenues at this level we believe fiscal '20 Q1 EPS is likely to be consistent with the approximately 13% of full year adjusted EPS that the first quarter typically represents.

In closing, we maintain our strong business momentum exiting fiscal '19 and are positioned well for another good year marked by healthy mid-single digit organic recurring fee revenue growth and double-digit adjusted EPS growth.

We will now go to questions. Rocco?

Questions and Answers:

Operator

Yes, sir.

We will now begin the question-and-answer session. [Operator Instructions] Today's first question comes from David Togut of Evercore ISI. Please go ahead.

David Togut -- Evercore ISI -- Analyst

Thank you. Good morning, Jim and Tim, and good to see the strong finish on closed sales. Just to dig into the 2020 closed sales target of $190 million to $230 million, could you drill down a little bit on what you expect to be the main drivers of that closed sales target more ICS more GTO any thoughts by product?

Timothy C. Gokey -- President and Chief Executive Officer

Yes, it's Tim. Thank you very much for the commentary. And we are really excited about the continued momentum that we see in the business and as reflected in sales and as reflected in our pipeline. And in 2019, we obviously had the very large wealth win and and so when we think about '20 this target that we're putting out represents a nice growth above where we were in '19 when you exclude that big wealth. So I think that's, it's a sign of the confidence and momentum that we see in the business. It's really across the board and if I were to try to focus in on any one area, there is not some giant big deal that is baked in here. We continue to see really good momentum in our various ICS solutions that fit all around the regulatory communications business. We continue to see really good underlying momentum in the GTO areas both in capital markets and in wealth and investment management.

We don't see another UBS type thing in this next calendar year, that is something that will take longer to develop, but we have a lot of other wealth solutions that have a good head of steam on them. And, and we're having really good results in the area serving mutual funds as well with a good head of steam there around our data and analytics product. So we're really seeing very balanced growth across all of our product lines. We are -- and this growth, we think will carry us to a very good result in '20 without any specific large deal driving that. And frankly, we are planning in terms of how we believe that we can continue to grow sales in the years beyond, because we see a lot of demand for what we're doing.

Let me just take a minute on this because over the past seven months, I have met more than 20 CEOs of our clients in my -- as I'm introducing myself and really talking to them about what are the issues driving them and the themes that we've been talking about, and I'll come back to this as we go through other questions, but are really resonating. And so we see, we see good demand across each of the growth themes that we're pursuing.

David Togut -- Evercore ISI -- Analyst

Appreciate that. Just as a quick follow-up. Jim, what are your assumptions on share repurchase for 2020? I don't think you called out any share repurchase in your 2020 EPS guide.

James M. Young -- Corporate Vice President and Chief Financial Officer

No, we don't really have any explicit assumptions for '20. As you know, most of the -- like all of the share count implications are coming from our FY '19 activities. So we were happy that we're able to deploy 300 -- almost $370 million against share repurchases. So, no really additional contributions in '20.

David Togut -- Evercore ISI -- Analyst

Understood. Thank you very much.

Operator

And our next question today comes from Darrin Peller of Wolfe Research. Please go ahead.

Darrin Peller -- Wolfe Research -- Analyst

Hey, thanks guys. Look, we are happy to see the reacceleration in GTO in the quarter. If you could just help us understand, I mean I know you had a few large clients that you have been working toward. Are you starting to see the final -- the actual revenue roll on to that now? I think you were alluding to a couple in your prepared remarks. And then just think about the cadence for GTO as we look forward to 2020 -- to the fiscal '20 year.

Timothy C. Gokey -- President and Chief Executive Officer

Sure. Darrin it's Tim. And as you know these are -- these large projects are complex and some of them come in right at time -- right on time. Some of them take longer and sometimes that's due to us and sometimes that is due to them. And so the acceleration that we and so the acceleration that you -- that we saw in GTO in this last quarter, it was not the result of any major client on-boarding and that's something that is still to come and we like the fact that we are seeing acceleration, even though some of the stuff is taking a little bit longer than we like, but it definitely will be one of the things driving us as the year goes on. So that 8% to 10% that we're seeing in recurring revenue for the company is take all this into account, and it is -- we feel very good about it.

James M. Young -- Corporate Vice President and Chief Financial Officer

And, Darrin, this is Jim. On the cadence for GTO, obviously as we said, we're pretty excited about mid-teens growth that we're targeting for GTO. At the moment it looks pretty even in terms of the growth across the quarters. So what you'll get is a bit of a mix between the organic and the acquisitions over the quarter's acquisitions, obviously they are a bit heavier in the early quarters as we annualize and then organic, we would expect to start more modestly and then ramp over the year as we start working through the big backlog and get the on-boardings going.

Darrin Peller -- Wolfe Research -- Analyst

Okay, all right. Look guys, I mean your business performed well, pretty broad base, I'd be curious to hear more about that you were trying to not do [Phonetic] any more, but one of the areas even growing in on wealth. First of all, you've done deals there. Now, M&A has been more pronounced there. Can you just help us understand the split, first of all, between GTO and ICS? And then more importantly what's the -- what do you expect the growth profile of that overall of Wealth Management could be and is that something worth splitting out as a separate business or almost a separate line item for modeling purposes?

Timothy C. Gokey -- President and Chief Executive Officer

Yeah, it's -- Darrin, thanks for asking that question. And just as a reminder for everyone listening, the opportunity here is that firms are having to really evolve their business model due to commoditization of asset management, all the other trends in Wealth Management and there's no real scale technology player serving wealth management firms. They have to either build it themselves or they have to buy a plethora of point solutions and try to integrate them together and we think that's a big opportunity. And one of the things that I've been talking to the CEOs that I just mentioned, as we talked about our vision for creating something that -- if you buy part of it works, but the more you buy the better it is. That vision is really resonating with them.

And so, that's just I think the big picture. We do see this as something that is going to be an ongoing growth engine for us. It is -- and recognizing that regulatory communications has a lot to do with wealth management is really in part because of regulatory communications business that we do serve 20 of the top 20 wealth managers today. Some of this growth though is probably more on the GTO side than the ICS side. We do have some good products in ICS like advisor websites, data aggregation and some other offers. But it's a bit more -- it's a bit more on the GTO side and this is something that in this near future, you're going to see the impact from the M&A that we've done. And just as a reminder, Rockall's a really good securities based lending platform. Previously, we did advisor compensation, with RPM we're really bringing on the ability to integrate the banking side with Wealth Management in Canada now and maybe more than that eventually. The -- all the digital communications conversation we're having really resonate well with wealth managers. So there is a lot there, but we'll see, I think initially, the impacts on the M&A, we'll see the impacts from our existing point solutions and then probably not in 2020, but beyond 2020, we'll begin to see the impacts on some of these larger transformative deals.

James M. Young -- Corporate Vice President and Chief Financial Officer

On the reporting side, Darrin, obviously, we'll be excited to showcase our results in the area and we will give that some thought as to when the best time to break that out is, but obviously we're really excited about the progress as well [Phonetic].

Operator

And our next question today comes from Peter Heckmann of D.A. Davidson & Company. Please go ahead.

Alexis Huseby -- D.A. Davidson & Company -- Analyst

Hi guys. This is Alexis Huseby on for Pete. Thanks for taking our questions. Could you just remind us of the annual revenue contribution of the three recent acquisitions?

Timothy C. Gokey -- President and Chief Executive Officer

Yeah. We talked about the business in Canada, RPM which in US dollars about $40 million to $50 million, the Rockall business based in Ireland is about $10 million to $15 million and the TD assets represent a business that's approaching about $20 million in fee revenues. So good contribution. That's where we get the 3 points of growth next year from acquisitions.

Alexis Huseby -- D.A. Davidson & Company -- Analyst

Great. Thank you. And then are you aware of the timing of any proposed rule changes on mutual fund interim distribution or any other regulatory changes pending that we should be monitoring?

Timothy C. Gokey -- President and Chief Executive Officer

Yeah, let me grab that one. So really two areas on regulatory. There is the implementation of 30e-3 and is there and what is the next generation of client experience for fund companies and as context there over the past 10 years, we've reduced the overall cost per transaction by 40% saving the industry $400 million. So we feel really good about the impact that we've made here and we're pleased that more than 130 funds are adopting our solution for implementing 30e-3. We think that is -- that there is a future opportunity to make those notices that will be sent even more valuable by having enhanced content on them. And that's something that we continue to discuss with players in the industry and the implementation of this, which is in 2021, as we said before is a modest positive for us. But for us, we really see is it more of an investment in the ecosystem. So that's the 30e-3 please.

There is ongoing, I'd say, research by the SEC in terms of how to further enhance the client experience, and we are certainly giving input into that, which we think can help the investors' closure to be even at a higher level and I think both ourselves and the Investment Company Institute have talked about the idea of summary documents and making these documents much more legible and easier read for investors. And then, the other big area is proxy plumbing and the discussions there that have followed from the round table last fall and there's good momentum there really around the notion of end-to-end confirmation, and that is something we do. We wrote a letter along with the Council of Institutional Investors, Society of Corporate Secretaries and [Indecipherable] this past winter, all supporting the idea of end-to-end confirmation.

We currently tabulate for about half of the industry, and we're going to introduce end-to-end confirmation for the part where we can make it happen beginning next year. And there is an industry working group around how to bring that to the other half of the industry. And again we think this is something that will just continue to increase investors' confidence in the current system and allow through end-to-end confirmation to eliminate any possibility of -- I think like omnibus proxies that transfer and things like that, that is some sort of edge cases that will be surfaced through end-to-end confirmation that will really improve the integrity of the entire process.

Operator

And our next question today comes from Oscar Turner of SunTrust. Please go ahead.

Oscar Turner -- SunTrust -- Analyst

Okay. Good morning, guys.

James M. Young -- Corporate Vice President and Chief Financial Officer

Hey, Oscar.

Oscar Turner -- SunTrust -- Analyst

So first question is on customer communications. Just wondering, if you can give some color on the pipeline in that segment. And I think Tim discussed a couple of recent wins, but are those anything that you think would move the needle?

Timothy C. Gokey -- President and Chief Executive Officer

Hey Oscar, it's Tim. I think the thing on customer communications is -- so probably, I'm going to come back to sales. I do want to just -- one thing, we always talk about the revenue, but I also want to take us back to our thesis, and the strong synergies that we have achieved 2 times on the synergies. So we are -- we've had declining revenues that has not been affecting earnings. I think that's just something to have out there. We right now are seeing lots of small and medium sales and we have a nice backlog of business to on-board. That amount of business to on-board is probably not enough to sort of significantly accelerate the growth. And this is enough to sort of move it to what we're talking about for next year, which is sort of roughly flat. We have been moving through this large client that has been off-boarding and it's an interesting one and it's interesting one because the fact that it is off-boarding more slowly than expected has, I mean we've been talking about this decline for a lot longer than we expected. If we personally owned this business we will be happy the longer stays the better it is, but as a public company it means we're talking about a lot longer. So we do expect to be, to be finally done with that sort of at the end of the calendar year. And at that time, we would, expect the rate of sales that we have to sort of get us to even balance and beyond that, then it's really looking forward to are there larger conversations that could make a bigger difference.

We do think things like that are out there, there are large players, but those are long complex conversations you can't really tell about the timing of those, but they would be meaningful when they occurred. And of course in the longer run that is the whole digital idea and definitely in the conversations that I have with CEOs of wealth management firms when we talked about what the future of communications is and how this all needs to be delivered through mobile experience with abilities to drill down and to take action. That is a vision that people really see as what the future is, and so our thought is really about how do we focus all of this in terms of helping our clients transition to thier future, timing of which is, intermittent [Phonetic] but important.

Oscar Turner -- SunTrust -- Analyst

Okay, thanks for that color. And then second question just on M&A, seen a pickup in the deal pace recently with the tuck-ins that you mentioned. Just wondering, how we should think about your appetite for a larger transformational deal in any of those spaces you mentioned, I think you talked about governance, capital markets and wealth management.

Timothy C. Gokey -- President and Chief Executive Officer

Absolutely. So, first of all, just looking at tuck-in M&A, in FinTech[Phonetic] is an evergreen strategy. It is -- there is, there are always new solutions. There are always management teams getting things to a certain size, wanting to take it to the next level and wanting to partner with someone like us and we have a strong track record of doing that really for growth and making growth accretive, and it's something that's just we view as an ongoing piece of our business. And we were fairly active in the last quarter. I'd say, our approach hasn't changed. We continue to have the same criteria that we always have in terms of good returns that we're the very best owner and we do have a very -- and we've been active in the fourth quarter and we have a very active pipeline right now because there are a lot of properties for sale because it's a good time to be a seller, which also means you have to be careful, as a buyer.

And so our criteria around are we really the best owner and do they align with our strategic theme. When we think about larger transactions it is -- there's a version of that, that's an extension of what I just talked about, where it's still sort of tuck-in, but bigger tuck-in and and we would have, definitely appetite for the right thing that met all those criteria around strategic fit and around the ability to have a good financial return over time. And then when one thinks about something that is even more transformative than that, I think it becomes pretty opportunistic. In terms of, are there any situations that make sense and we -- it's just, it's not something you can really analyze ahead of time. And we just are really focused on what we can control, and which is a steady pipeline of things that are very visible at looking 100 deals a year and we think we can be very repeatable for the long-term.

Operator

And our next question today comes from Chris Donat of Sandler O'Neill. Please go ahead.

Christopher Donat -- Sandler O'Neill -- Analyst

Hi, good morning. Thanks for taking my questions. Just wanted to follow up on that last one as it relates to your share repurchase activity in fiscal '19, because, is it fair to say that when you're more active on the share repurchase side like your last alternative to investing in the business and M&A, is that the right way to think about your priorities?

James M. Young -- Corporate Vice President and Chief Financial Officer

Hey Chris, it's Jim. But we continue to be very focused on the balance capital allocation and so we look over a long period of time and not necessarily formulaically [Phonetic], but we certainly arrive at a pretty good balance between M&A and share repurchase. In a given year clearly, we keep an eye on what our M&A pipeline looks like, and obviously we also look opportunistically at our share price and clearly there is some opportunities this year to jump in and get some shares at good prices, and obviously it helps when it's toward the end of the year, we've got better visibility in the high free cash flow quarter for us. It helps us align that. So, and still finishing the year just below our target leverage ratio. So this is going to continue to be part of our MO and we're pleased with sort of what we accomplished, but good M&A goals, as well as a meaningful share repurchase in the year. As Tim said, the pipeline and M&A remains strong. Timing is always fool's errand and figure out exactly the timing.

Christopher Donat -- Sandler O'Neill -- Analyst

Okay. And then one question about your guidance for event driven revenue and I recognize that it's event driven. So it's hard to predict, but first just, do you have at this point, being August 1st, pretty good visibility into your fiscal first quarter? And then second, what are the big swing factors for the full year on the difference between down 5 or down 15. Is it mostly on the mutual fund side or is it more contest specials, like just what would you expect to be more likely to move the needle?

Timothy C. Gokey -- President and Chief Executive Officer

Yes, Chris. That as a reminder for others. As you know remember, this is about 5% of our revenue, but clearly we like it when it's there. I would just highlight before getting to your question, I think one of the things that we're very pleased with is what we had -- we had some good amount of [Phonetic] years. We have chances to reinvest significantly at a year like this events down and it was much of a ripple, even our guidance we're expecting to be down again and still teeing up similar earnings growth target. So obviously we always keep an eye on it. There's not a lot to manage with it, but our goal is to sort of manage through that, whether it's up or down. So as we look at the given year, yes, we have decent visibility as we've always said as we look out 90 plus days, we always feel pretty good about what we can see. We've got one decent sized fund in the queue for the year, as you get out into the second half of the year much harder to determine where it's going to come from, that said.

We've been at this for a while. And so we have pretty good analytics on understanding some base level of event to recognizing the forecasting challenges in this area. And so we feel pretty good. On the funds, I'd say in a more chance for upside coming from equity contest with specials and on the fund side and as you know those are certainly hard to handicap. But we don't have any heroic assumptions in there on that and obviously we get a lot of little contributions across a lot of small deals and occasionally some larger deals. So we feel good. I mean, we're focused on delivering on the things, we've got plans to deliver against and good visibility on a good base level of event fees.

Operator

And our final question today comes from Patrick O'Shaughnessy of Raymond James. Please go ahead.

Patrick O'Shaughnessy -- Raymond James -- Analyst

Hey, good morning, guys. So normally, I think as we look at your deals you guys paid maybe around 3 times revenue for the companies that you're buying. Think you paid around 6.5 times for RPM. What were the characteristics that you sold RPM that justified that price in your view?

Timothy C. Gokey -- President and Chief Executive Officer

Yes. Patrick it's Tim. And RPM has a really strong growth trajectory and is a really good strategic fit and it is -- has good profitability. So when we look at -- we model all this out obviously like everyone does in terms of what do we expect is going to happen over time in terms of its future revenues, how they're going to translate into contribution for us. And what's the return we are going to get. And so the the revenue multiple can definitely vary on those, but this is one that is, something that is -- we think is going to be a really nice really nice fit for us really help us grow our Wealth Management business in Canada. But also you have some optionality over time as a really nice technology architecture that they can do some other things for us too.

Operator

Thank you, this concludes our question-and-answer session. I'd like to turn the conference back over to the management team for any final remarks.

Timothy C. Gokey -- President and Chief Executive Officer

Great. I just wanted to thank everyone for participating in the call and I just want to reiterate that really the significant opportunity that we see ahead and how well positioned we think Broadridge is to really help make a difference for the industry and just look forward to talking to you next quarter when we have more progress to report. Thank you.

Operator

[Operator Closing Remarks].

Duration: 60 minutes

Call participants:

W. Edings Thibault -- Head of Investor Relations

Timothy C. Gokey -- President and Chief Executive Officer

James M. Young -- Corporate Vice President and Chief Financial Officer

David Togut -- Evercore ISI -- Analyst

Darrin Peller -- Wolfe Research -- Analyst

Alexis Huseby -- D.A. Davidson & Company -- Analyst

Oscar Turner -- SunTrust -- Analyst

Christopher Donat -- Sandler O'Neill -- Analyst

Patrick O'Shaughnessy -- Raymond James -- Analyst

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