Pershing Square Highlights 15 Irrefutable Facts about ADP’s Opportunity for Improvement
03 Novembro 2017 - 3:18PM
Business Wire
Pershing Square Capital Management, L.P. (“Pershing Square”)
today highlighted for shareholders 15 irrefutable facts about ADP’s
(NASDAQ:ADP) opportunity for improvement:
1. ADP’s labor productivity trails competitors by 28%, with
revenue per employee of $161,000 versus $223,000 for competitors.
2. From 2009 to 2017, Paychex’s net operational revenue per
employee has increased 35% from $158,000 to $214,000. Over the same
period, ADP’s net operational revenue per employee has increased
2%. 3.
ADP’s Employer Services has net
operational margins of 19%, while Paychex has net operational
margins of 41%. 35% of Employer Services revenue is directly
comparable to Paychex.
4. ADP’s Employer Services’ gross margins trail its direct
competitors’ (in all segments) gross margins by 1,600 basis points
(~58% vs. ~74%). 5. Since 2009, ADP’s Enterprise segment has
lost market share and shown a reduction in revenues while
competitors (Workday, Ultimate Software and Ceridian Dayforce) have
seen revenue growth of more than $2 billion and increases in
enterprise value of more than $25 billion over the same period.
6. ADP does not have a best-in-class Enterprise product nor
has it announced a timeline for its current offering’s replacement.
7. ADP’s technology spend of $860 million is more than the
combined budgets of its competitors’, yet it remains a technology
laggard. 8. Businesses which ADP has divested over the past
decade (including Solera, CDK, and, most recently, its CHSA/COBRA
business) have made massive margin gains now that they are no
longer overseen and controlled by ADP. 9. ADP’s Employer
Services’ organic growth has declined from 6% to 4% in FY 2017, and
is projected by ADP management to decline further to 2-3% in FY
2018. 10. ADP’s long-term plan announced during the proxy
contest achieves only 100 to 200 basis points of operating margin
expansion by 2020. 11. In the U.S. alone, ADP has six
discrete corporate campuses and ~130 sales and services centers.
12. ADP’s 12 most senior executives have an average tenure
at ADP of 20 years – none of these operating executives has worked
at another company in more than a decade. 13. ADP’s
Glassdoor rankings on all measures (anonymous employee rankings of
their employers) are last or 2nd to last amongst all of its
competitors. 14. ADP’s underperformance has been obfuscated
by confusing, limited and reduced disclosures to shareholders.
15. ADP rejected multiple settlement proposals from Pershing
Square and our request for a universal ballot.
These facts are irrefutable and have not been addressed by
ADP.
Pershing Square has highlighted the need for ADP to pursue a
transformation focused on operational efficiency and technology
leadership, which would allow Employer Services’ revenue growth to
accelerate to 7%+ and its margins to increase from 19% to 35% in
line with its potential.
Pershing Square held a webcast on November 1st to summarize our
case for change at ADP. We encourage shareholders to watch a replay
of this presentation here. Shareholders can download a copy of that
presentation here and a transcript of the event will be available
here shortly.
We have enjoyed an open dialogue with our fellow shareholders
and appreciate their support. We encourage shareholders to reach
out to us directly if they have any questions.
For additional information, visit our website:
www.ADPascending.com. Follow ADPascending on Facebook, Twitter and
YouTube.
To vote for Pershing Square’s Nominees for ADP’s Transformation
and ensure that Bill Ackman, Veronica Hagen and Paul Unruh are
elected to the board, shareholders should vote the GOLD Proxy Card
or GOLD Voting Instruction Form.
THE ONLY WAY TO VOTE FOR BILL
ACKMAN AND THE NOMINEES FOR ADP’S TRANSFORMATION IS TO VOTE THE
GOLD PROXY CARD OR VOTING INSTRUCTION FORM.
You can vote by Internet or telephone by following the
directions on your GOLD Proxy Card or Voting Instruction Form. You
should no longer vote by mail as mailed Proxy Cards and Voting
Instruction Forms will not arrive in time to be counted in the
November 7 election. We urge you NOT to vote using any white proxy
card or voting instruction form you receive from ADP. Please
discard the white proxy card.
If you have any questions about how to vote your shares, please
contact our proxy solicitor, D.F. King & Co., Inc., at (866)
342-1635.
About Pershing Square Capital Management, L.P.
Pershing Square Capital Management, L.P., based in New York
City, is a SEC-registered investment advisor to investment
funds.
This press release relates to Pershing Square’s solicitation of
proxies in connection with the 2017 annual meeting of stockholders
of ADP.
The information contained in this press release (the
“Information”) is based on publicly available information about
Automatic Data Processing, Inc. (“ADP” or the “Company”), which has
not been independently verified by Pershing Square Capital
Management, L.P. (“Pershing Square”). Pershing Square recognizes
that there may be confidential or otherwise non-public information
in the possession of ADP or others that could lead ADP or others to
disagree with Pershing Square’s conclusions. This press release and
the Information is not a recommendation or solicitation to buy or
sell any securities.
The analyses provided may include certain forward-looking
statements, estimates and projections prepared with respect to,
among other things, general economic and market conditions, changes
in management, changes in board composition, actions of ADP and its
subsidiaries or competitors, the ability to implement business
strategies and plans and pursue business opportunities in the human
capital management industry. Such forward-looking statements,
estimates, and projections reflect various assumptions by Pershing
Square concerning anticipated results that are inherently subject
to significant uncertainties and contingencies and have been
included solely for illustrative purposes, including those risks
and uncertainties detailed in the continuous disclosure and other
filings of ADP with the Securities and Exchange Commission at
www.sec.gov. No representations, express or implied, are made as to
the accuracy or completeness of such forward-looking statements,
estimates or projections or with respect to any other materials
herein. Actual results may vary materially from the estimates and
projected results contained herein.
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version on businesswire.com: http://www.businesswire.com/news/home/20171103005743/en/
Pershing SquareFran McGill, 212-909-2455McGill@persq.com
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