ADP Corrects False and Misleading Statements by Pershing Square
"ADP strongly rejects the false and misleading statements made yesterday by
"ADP will be submitting a complaint with the
Here are the facts:
Labor Productivity Has Increased
Page 30 of the investor presentation shows new business bookings have increased at a 7% compound annual growth rate (CAGR) from FY 2011 to FY 2017 while ADP's sales force only grew at a 4% CAGR over the same period. Similarly, adjusted EBIT per full-time employee, excluding client funds, grew at a 7% CAGR from FY 2011 to FY 2017.
New Products Disclosed in Investor Presentation
Page 20 of the investor presentation references a "low code" application development platform that will launch in 2018. While ADP has not described this as "Vantage 2.0," based on its core functions and capabilities that is likely what ISS referenced in its report. ADP has dramatically increased spending on R&D and innovation and is now the largest HCM provider in the cloud, with 83% of its clients on strategic cloud-based platforms. ADP was the first company to harness Big Data for HCM applications and develop mobile solutions - and today it has the #1 HCM mobile app.
ADP Client Retention Consistently Above 90%
ADP's Enterprise client count between FY 2009 and FY 2017 has remained largely consistent, and
Page 48 of the investor presentation notes the total number of comparable up-market clients between FY 2009 and FY 2017 has remained largely consistent. Further, ADP's overall client retention has remained above 90% every year since FY 2011.
"Operational Margins" Appropriately Capture ADP Profitability
Page 35 of ADP's investor presentation clearly shows expected operational margin contribution to adjusted EBIT margin of 500 basis points from FY 2017 to FY 2020, driven by forecasted growth in operating leverage, platform migrations, service alignment and productivity initiatives, before pressure from incremental PEO pass-throughs and client funds interest revenues. This approach of isolating the impact of PEO pass-throughs and client funds on adjusted EBIT margin is consistent with margin disclosures historically provided in ADP's financial results and guidance, and best captures progress in ADP's underlying operations.
A chart within a corporate video that was posted on
Margin Comparisons Between ADP and CDK Global Are Misleading
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About ADP (NASDAQ: ADP)
Powerful technology plus a human touch. Companies of all types and sizes around the world rely on ADP cloud software and expert insights to help unlock the potential of their people. HR. Talent. Benefits. Payroll. Compliance. Working together to build a better workforce. For more information, visit ADP.com.
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SAFE HARBOR STATEMENT
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; 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 privacy breaches, fraudulent acts, and system interruptions and failures; employment and wage levels; changes in technology; availability of skilled technical associates; and the impact of new acquisitions and divestitures. 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" in our Annual Report on Form 10-K should be considered in evaluating any forward-looking statements contained herein.
ADP, its directors and certain of its executive officers may be deemed to be participants in the solicitation of proxies from Company shareholders in connection with the matters to be considered at the Company's 2017 Annual Meeting. The Company has filed a definitive proxy statement and WHITE proxy card with the
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