Computershare Limited · ASX:CPU
Computershare — Morgan Stanley Asia Pacific Summit 2002
35 slides from Computershare's conference presentation, Oct 23, 2002
Slide 1: Morgan Stanley Asia Pacific Summit
Morgan Stanley Asia Pacific Summit Singapore October 23, 2002 1
Slide 2: Contents
Contents • Overview - Evolution of CPU – now in consolidation phase - CPU Business Model - Core Strategy - Competitive Advantage - Global Footprint - Financial Snapshot • Global Registry Operations • Other Global Integrated Businesses • CPU Board and Management • Outlook 2
Slide 3: Corporate Milestones 1978 - 2000
Corporate Milestones 1978 - 2000 Revenue Technology 1978: Founded as specialist in software registry Foundation 1994: Lists on ASX and NZSX $ 12 m Registry - Australia 1997: Acquisition of registry businesses in Australia $ 22 m 1998: Acquisition of offshore registry businesses $ 147 m - UK, South A
Slide 4: Corporate Milestones (continued)
Corporate Milestones (continued) Revenue 2000: Diversification of product offering into: - Document Services - print & mail operations (Australia and U.K) New Businesses - Analytics (Australia and U.K) - Employee Stock Purchase Plans (US - Merrill Lynch) 2001: Further expansion $ 754 m - Registry: H
Slide 5: CPU Integrated Customer Offering
CPU Integrated Customer Offering PRODUCTS SERVICES COSMOS TECHNOLOGY CUSTOMER SCRIP REGISTRY SYSTEM CIS CPM CAS CDS INTEGRATED INVESTOR PLAN ANALYTICS DOCUMENT SOLUTION INVESTOR SERVICES MANAGERS SERVICES SERVICES SPECIALIST CENTRE ISSUER ONLINE X-STREAM SMARTS CHAMP CUSTOMER CUSTOMER 5
Slide 6: Strategy - Maximise Opportunities to Deepen & Expand Customer Relationships
Strategy - Maximise Opportunities to Deepen & Expand our Global and Regional Customer Relationships Core Skills Strategy Growth Innovative e-transform: Leverage our technology Use technology to drive change, boost strengths globally development productivity, accelerate innovation & dramatically impr
Slide 7: CPU's Global Presence
CPU’s Global Presence North American Region European Region Asia Pacific Region Canada • UK Ireland • • USA • Germany • Hong Kong • Australia • • South Africa • New Zealand 7
Slide 8: Total Revenue - Geographic Breakdown
Total Revenue - Geographic Breakdown U. K 26% Australia 25% Canada 20% U.S.A 19% Hong Kong 3% S. Africa 3% Ireland 2% N. Zealand 2% 8
Slide 9: 2002 – The Redefining Year
2002 – The Redefining Year • Delivered steady profit levels in line with poor equity capital markets • Good quality result – maintained strong operating cash flows from all businesses and continue to expense technology costs • Increased capital management focus - share buyback & increased annual div
Slide 10: Financial Performance A$m's
Financial Performance A$m’s 2002 2001 Revenue Registry maintenance 348.1 344.3 Corporate actions 53.7 74.8 Margin income (including sharesave admin) 72.5 96.8 Non Registry fees/sales 163.7 105.6 Interest income 4.2 3.7 Recoveries 125.6 114.5 Other 13.2 14.6 781.0 754.3 Expenses Operating costs 631.9
Slide 11: Consolidated Results Half Year Comparison
Consolidated Results Half Year Comparison A$m 414.7 A$m Revenue Breakdown 396.5 384.5 181.5 185.5 339.6 162.8 164.6 94.8 68.0 68.9 79.7 74.6 46.9 49.8 71.9 73.0 38.7 36.2 41.9 37.7 32.6 28.6 21.1 HY Dec-00 HY Jun-01 HY Dec-01 HY Jun-02 Register Main Corp Actions Margin Income Non Registry Sales/Fees
Slide 12: Revenue by Region
Revenue by Region Total Revenue A$m Revenue Breakdown 140.5 109.2 30% 98.4 39% 68.7 65.2 52.5 41.7 37.1 36.0 29.8 28.7 21.2 19.6 12.9 2.1 31% Register Corp Actions Margin Recoveries Non Registry Main Income Sales/Fees Asia Pacific Europe North America Asia Pacific Europe North America 12
Slide 13: EBITDA generated from diversified portfolio
EBTIDA generated from diversified portfolio A$m Total EBITDA EBITDA Breakdown 151.7 FY 2002 147.6 28% 38% 91.7 34% FY'00 FY'01 FY'02 Asia Pacific Europe North America 13
Slide 14: Cost increases held to 5.5% for the FY02 year
Cost increases held to 5.5% for the FY02 year A$m Operating Costs A$m Operating Cost Breakdown 631.9 290.6 598.9 269.8 126.0 108.5 107.7 81.6 79.9 60.9 40.3 38.7 11.7 15.1 Recov Exp Personnel Occupancy Other Direct Technology Corporate FY'01 FY'02 FY'01 FY'02 14
Slide 15: Global Share Registry Operations
Global Share Registry Operations • Current Status & Growth Opportunities • CPU Market Share • Fee Structures in Key Global Markets • Leverage to ‘the cycle’ – corporate actions activity and interest rates 15
Slide 16: Global Registry
Global Registry • Still largest revenue producer • Over 8,000 clients globally to cross sell other services • Increased focus on selling integrated solutions • Asia Pacific - Australia • Represents 12% of total revenue • Service issues • Substantial changes to senior management - Hong Kong • Signifi
Slide 17: Global Registry Europe North America
Global Registry • Europe • Focus on gaining some major clients from Lloyds • Expansion into other European markets • Opportunity for better margins in South Africa • North America • US conversion completed now in a position to market registry to major companies • Relocations of all major offices com
Slide 18: Market Share Growth in Registry Operations
Market Share Growth in Registry Operations Actual (%) Aust 63 55 NZ 92 90 Hong Kong 83 60 US 5 5 Canada 62 60 UK 45 35 Ireland 75 60 S/Africa 88 60 Current 2001 18
Slide 19: Background - Fee Structure of Registry Revenues
Background - Fee Structure of Registry Revenues Geography Historic Providers Fee Structure CPU Main Competitors / market share * Australia - Chartered accountants - Bundled all encompassing for APRL (35%) - In-house processing and administration - Funds held in trust accounts - Separate fee for corp
Slide 20: Corporate Equity Issuance 30 June – US $ M
Corporate Equity Issuance 30 June – US $ M 2001/02 year lowest levels since 1994/95 International Equity Issuance - Year to June30 350,000 311,816 300,000 250,000 200,000 180,970 169,660 179,225 150,000 107,383 118,861 98,251 100,000 50,000 0 1995/96 1996/97 1997/98 1998/99 1999/00 2000/01 2001/02 S
Slide 21: Funds Balances Interest Rate Sensitivity
Funds Balances Interest Rate Sensitivity Interest Rate Hedging Exposure to No Strategy: - Minimise downside risk in current low interest rate interest rates environment exposure 20% 41% Policy: - Minimum hedge of 25% / Maximum hedge of 75% - Minimum term 1 year / Maximum term 5 years - Current hedgi
Slide 22: Funds Balances at 30 June 2002
Funds Balances at 30 June 2002 By Category By Country Dividend Sharesave US Australia 17% 18% 8% 1% Dissenter 9% Canada UK 51% 40% Corporate Actions Broker Trust 15% 37% Regular Trust 4% FY02 average balance range A$3.7b – A$4.5b 22
Slide 23: Other Global Businesses
Other Global Businesses • Plan Managers Non Registry Revenue - 2002 • Document Services Document Services • Technology Services $43.5 (28%) Plan • Analytics Managers $66.2m (43%) Technology Services Analytics $31.6m (20%) $13.2m (9%) 23
Slide 24: Plan Managers
Plan Managers • Over 1000 employee share plan (ESPP) clients globally • Market estimated to be over US$2bn only 30% outsourced • Computershare is the only global provider • Globally twice the size of nearest competitor • Plans is a truly global business • Major hiring for key people globally • Major
Slide 25: Plan Managers
Plan Managers • Asia Pacific • Strong growth in Australia • Established operation in Hong Kong • Europe • Major opportunities in Europe • Over 300 companies in the UK have applied for SIP plans • North America • Largest ESPP provider • Brokers exiting business • Options are not dead, more restricted
Slide 26: Document Services
Document Services • A global business leveraging off same technology platform • Operations now established in Australia, US, Canada & UK • Revenue $88.4m • Totally integrated with registry system • Substantial growth in selling commercial (non-registry) work to CPU clients • Major commercial wins in
Slide 27: Global Analytics
Global Analytics • Global data base will be completed by Dec 02 • IRtrack (proprietary web based global equity market share ownership & contacts management system) released in Australia, UK and Canada • Expanding into other issuer services (eg.proxy solicitation globally) • Two main business streams
Slide 28: Technology Services
Technology Services • Global options software released in Australia live for BP in November • Real time dealing live in the US live in the UK Dec 02 • Global Internet applications consistent across all regions • Developments in ‘workflow’ & ‘electronic data capture’ increasing labour efficiency – FY
Slide 29: Analysis of Technology Costs - 2002
Analysis of Technology Costs - 2002 Category Cost Type Admin External 3% bureau External bureau 25% 25% Development 25% Personnel & Computer on-costs Costs 56% 9% Comms 4% Infrastructure Occupancy Maintenance 13% 6% 25% 29
Slide 30: Citigroup Alliance
Citigroup Alliance Strategic Importance: • Citigroup – 200m customers in more than 100 countries • Credibility globally but especially in North America • Potential to leverage growth from banking relationships in North America • Expansion of CPU’s existing relationship with Citigroup’s Agency and Tr
Slide 31: Future Growth - Acquisitions / Partnerships
Future Growth - Acquisitions / Partnerships • North America – registry and employee plans • Continental Europe – registry and employee plans • China – registry and employee plans • Global plan advisor relationships • Cash management / financial services products • Sales channels via major brokers in
Slide 32: Board Breadth & Expertise - New Appointments
Board Breadth & Expertise - New Appointments Sandy Murdoch Non- Executive Chairman Chris Morris Penny Maclagan Tony Wales Peter Griffin CEO Head of IT Non-Executive Non-Executive New Appointments Iain Saville CBE Phil DeFeo European Time Zone Head Non-Executive • UK capital markets expertise & senio
Slide 33: CPU Global Structure
CPU Global Structure CEO CPU Ltd Chris Morris Corporate Technology Time Zone Operations Global Services Head Legal & European North America Australian Product CFO Head CTS Compliance Time Zone Time Zone Time Zone Specialists Tom Honan Penny Maclagan Paul Tobin Iain Saville Steve Rothbloom Stuart Cro
Slide 34: New Global Structure - Main Features
New Global Structure - Main Features – Release CEO from involvement in day to day running of business – Reporting structure for global operations based on 3 time zones (Europe, North America and Asia Pacific) • increased accountability for revenue & profit growth at the regional level • consolidate
Slide 35: Outlook
Outlook • At this stage we are confident that FY02 has been our redefining year, and provides the base for future growth. • Any revenue and earnings growth will depend on the recovery of global equity markets, and in particular a higher level of corporate actions. • Increases in interest rates will
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