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  "documentTitle": "Automatic Data Processing (ADP) (ADP)",
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  "authorName": "William Ackman",
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  "presentationDate": "2017-08-17 00:00:00",
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  "notes": "Uses a 'preempt_rebuttal' style to dismantle management's narrative.",
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      "text": "The vast majority of what ADP calls “service” is product support to compensate for weak software and technology, which when fixed, will improve growth and margins",
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      "text": "Unlike competitors, ADP has a large PEO. We have segmented PEO performance and focused on Employer Services margins which we estimate are ~19%. Competitors do not have PEOs.",
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      "text": "ADP has an outsourcing business which is lower margin. ADP reported ~$200m of HR BPO in 2010; we believe this is ~$500m today. Management noted HR BPO has a margin profile roughly in line with our overall margin profile of ~20%.",
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      "text": "Unlike ADP's competitors, ADP provides 'service' to its customers. The vast majority of what ADP calls 'service' is product support to compensate for weak software and technology. Value-added service should generate better pricing and higher growth.",
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      "text": "“roughly in line... with our overall margin profile” — ADP management",
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      "text": "(1) Q3'2010 Earnings Conference Call commentary (April 27, 2010). (2) Q2'2016 Earnings Conference Call commentary (February 3, 2016).",
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      "text": "Excuses for Lower Margins Don't Add Up",
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