ADP 2007 Annual Report Download - page 8

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Is ADP where it expected to
be post spin-off?
Yes, the direction for the new ADP
has been set and we are executing
well against our strategic growth
program which consists of five key
elements to continue to grow our
leadership position.
1. Strengthening and growing our
core business
2.Growing our differentiated HR
BPO offerings
3.Expanding internationally
4.Entering adjacent markets which
leverage our core strategic assets
5.Expanding profit margins through
increased operating efficiency
We will maintain market leadership
through World Class Service and
Product Leadership, and by being
an Employer of Choice. Service
is a high priority for us; without it
we don’t have a business. Product
Leadership is key for driving new busi-
ness sales and organic revenue growth.
Gary C. Butler
PRESIDENT &CHIEF EXECUTIVE OFFICER
S. Michael Martone
CHIEF OPERATING OFFICER
Christopher R. Reidy
CHIEF FINANCIAL OFFICER
How will ADP continue to
expand margins?
Employer Services and Dealer Services
are scale businesses that can be further
leveraged for pretax margin expansion
as we continue to grow the businesses.
Continued margin expansion is a key
element to increasing shareholder
value. To that end, ADP has divested
slower-growing, less-profitable, non-
strategic businesses. With a more
focused ADP, we are continuing to
next three to five years and Dealer
Services is the first global DMS provider
to the Asian market. We expect strong
international new business sales to con-
tribute to an annual organic revenue
growth rate of 9% to 10% in the next
five years at Dealer Services.
Can you update us on your
distribution enhancement
initiative in Employer Services?
ADP has one of the best salesforces
around and our terrific sales results
this year reflect that. We are, therefore,
focused on continuing to increase
the productivity of our sales associates
and enhancing our distribution
channels, which both contribute
to margin expansion.
We are very excited about our newly
established telesales distribution
channel. We exited fiscal 2007 with
about 125 telesales associates and
anticipate increasing that number to
about 250 over the next few months.
Our telesales associates sold over $35
million of new business in fiscal 2007
and we expect the amount generated
from telesales to grow substantially
next year.
higher than historical levels, but not
at the aggressive pace of the last five
fiscal quarters.
Following a 19% increase in the
calendar year 2006 dividend, ADP’s
board of directors increased the
calendar year 2007 dividend 24%,
resulting in a dividend yield of about
2% and payout ratio approaching
50% – both higher than historical
levels. ADP has raised its annual div-
idend for over 30 consecutive years.
We remain committed to returning
excess cash to our shareholders
through a combination of share
buybacks and cash dividends, and
are pleased to have maintained a
triple-A credit rating from both
credit rating agencies – Standard &
Poor’s and Moody’s.