ADP 2007 Annual Report Download - page 7

services. Our economic value propo-
sition to all-sized companies is based
on scalable, proprietary platforms
with excellent processing economies,
as well as proven service delivery.
Our distribution capabilities are
superior, with a strong field sales
organization of about 4,000.
Dealer Services is the leading global
provider of dealer management
system (DMS) solutions, and has a
significant market opportunity to
capture dealer and manufacturer
spend of about $9 billion worldwide.
Dealer Services’ growth opportunities
in the international marketplace
are significant, especially in the
Asia-Pacific region of the world.
Employer Services is the global market
leader for HR, payroll, and benefit
services. The opportunity in the
markets we serve is $85 billion. The
mid-market, which we define as
companies with 50 to 999 employees,
is the most penetrated and only 45%
to 50% of those businesses outsource
their payroll. Our other markets are
less than 30% penetrated for payroll
outsourcing. All of our markets
offer significant growth opportu-
nities for payroll and additional
a short period of time; as well as
transactions that bring new product
capabilities and capture emerging
growth opportunities. Fiscal 2007
was a good year for acquisitions and we
anticipate continuing along this course.
Shareholder-friendly cash distributions
are another key element of our
capital deployment strategy. Our
share buyback program is more
substantive than in past years, and
we are paying higher dividends to
our shareholders. In the fourth
quarter of fiscal 2006, upon the
receipt of cash from the sale of our
Claims Services Group business
combined with our strong recurring
cash flows, ADP stepped up the level
of share buybacks and acquired over
17 million shares of its stock for
treasury for approximately $800
million. During fiscal 2007, utiliz-
ing our strong recurring cash flows
and the cash received from the
spin-off of our Brokerage Services
Group business, we acquired over 40
million ADP shares for over $1.9
billion. Our intent is to continue to
buy back shares for treasury, depending
on market conditions. We anticipate
that the level of buybacks will be
Gary C. Butler
PRESIDENT &CHIEF EXECUTIVE OFFICER
S. Michael Martone
CHIEF OPERATING OFFICER
Christopher R. Reidy
CHIEF FINANCIAL OFFICER
5
ADP Summary Annual Report 2007
products to ADP with solid growth
potential, for example, sales of the
Employease®product are quite strong.
ADP’s international opportunities are
tremendous. In Employer Services,
our GlobalView offering that targets
large multinational companies is
unique in the marketplace. There has
been heavy demand for this service
offering. Most GlobalView clients are
new clients to ADP, and retention is
very high. We anticipate GlobalView
growing to a $500 million annual
revenue business over the next five years.
Dealer Services is also well positioned
as the global market leader of fully
integrated solutions for vehicle
dealers and manufacturers. Organic
revenue growth in Dealer Services
continued to improve in fiscal 2007,
and market opportunities have
increased. While the North American
core DMS markets are penetrated,
there are new emerging areas of
opportunity domestically such as
Digital Marketing and other layered
applications. Opportunities in Asia
and Eastern Europe are significant
since vehicle sales growth in recent
years has outpaced North America and
Western Europe. Asia is poised to
become the largest region for
automotive sales in the world over the