Computershare Limited · ASX:CPU
Computershare — FY2014 Earnings Presentation
65 slides from Computershare's earnings presentation, Aug 13, 2014
Slide 1: Full Year Results 2014 Presentation
Computershare Limited Full Year Results 2014 Presentation Stuart Irving Mark Davis 13 August 2014 V1DIS
Slide 2: Introduction, Financial Results, CEO's Report
Financial CEO’s Introduction Results Report 2
Slide 3: Introduction: Stuart Irving
Introduction Stuart Irving PRESIDENT & CHIEF EXECUTIVE OFFICER V1DIS
Slide 4: Results Summary
Results Summary Statutory Results Introduction FY14 vs FY13 Earnings per share (post NCI) 45.20 cents Up 60.1% Management results are used, along with other measures, to assess operating business performance. The Company Total Revenues $2,048.6m Up 0.1% believes that exclusion of certain items permi
Slide 5: Management Results Summary
Management Results Summary Introduction FY 2014 @ FY FY 2014 FY 2013 v FY 2013 2013 exchange rates Management Earnings per share (post NCI) US 60.24 cents US 54.85 cents Up 9.8% US 59.86 cents Total Operating Revenue $2,022.6 $2,025.1 Down 0.1% $2,079.9 Operating Costs $1,480.9 $1,515.2 Down 2.3% $1
Slide 6: Drivers Behind FY14 Financial Performance
Drivers Behind FY14 Financial Performance Introduction › Overall Register maintenance revenues were slightly down. The contributions from recent acquisitions and modest improvements in shareholder activity were offset primarily by the strengthening US dollar. › Revenue in transactional business line
Slide 7: Computershare Strengths
Computershare Strengths Introduction › Leading market position in all major markets for equity investor record-keeping and employee stock plan administration based on: - sustainable advantages in technology, operations, domain knowledge and product development; - sustained quality excellence and ope
Slide 8: Guidance
Guidance Introduction › Looking to the year ahead, lower yields on client balances and some short term headwinds are expected to be a drag on earnings, but we are seeing modest improvements in some of our key operating environments. Taking all factors into account we expect Management EPS for FY15 t
Slide 9: Introduction, Financial Results, CEO's Report
Financial CEO’s Introduction Results Report 9
Slide 10: Financial Results: Mark Davis
Financial Results Mark Davis CHIEF FINANCIAL OFFICER V1DIS
Slide 11: Group Financial Performance
Group Financial Performance Financial Results % variance FY 2014 FY 2013 2H 2014 1H 2014 2H 2013 1H 2013 to FY 2013 Sales Revenue $2,011.4 $2,015.7 (0.2%) $1,040.3 $971.1 $1,041.1 $974.7 Interest & Other Income $11.2 $9.4 19.2% $5.4 $5.8 ($3.5) $12.9 Total Management Revenue $2,022.6 $2,025.1 (0.1%)
Slide 12: Management EPS
Management EPS Financial Results 70 60.24 60 54.85 49.09 50 40 US Cents 30.83 29.41 30 26.87 27.98 26.00 23.09 20 10 0 2012 2013 2014 1H 2H FY 12
Slide 13: FY14 Management NPAT Analysis
FY14 Management NPAT Analysis Financial Results 350 340 5.9 3.3 1.9 1.3 0.4 2.9 7.6 7.6 330 4.6 3.7 36.9 320 USD M 310 335.0 300 304.9 290 280 FY13 EBITDA - EBITDA - EBITDA - EBITDA - EBITDA - EBITDA - EBITDA - Tax Interest Dep'n & NCI FY14 NPAT USA Canada ANZ UCIA ASIA CEU Tech & Expense Expense Am
Slide 14: Management Revenue & EBITDA Half Year Comparisons
Management Revenue & EBITDA Half Year Comparisons Financial Results 1,200 60% 1,037.3 1,037.5 1,045.7 987.6 976.9 1,000 50% 781.4 Revenue & EBITDA USD M 800 40% Operating Margin % 600 27.3% 30% 27.1% 26.2% 25.9% 23.9% 24.4% 400 20% 268.4 267.0 273.6 247.5 241.4 211.5 200 10% 0 0% 1H12 2H12 1H13 2H13
Slide 15: Management Revenue Breakdown
Management Revenue Breakdown Financial Results % variance Revenue Stream FY 2014 FY 2013 2H 2014 1H 2014 2H 2013 1H 2013 to FY 2013 Register Maintenance $821.9 $824.1 (0.3%) $432.3 $389.5 $429.4 $394.7 Corporate Actions $154.2 $169.4 (8.9%) $77.0 $77.2 $76.6 $92.8 Business Services $487.9 $489.1 (0.
Slide 16: Management Revenue & EBITDA – Regional Analysis
Management Revenue & EBITDA – Regional Analysis Half Year Comparisons Financial Results Revenue Breakdown EBITDA Breakdown 1,200 300 273.6 268.4 267.0 1,037.3 1,037.5 1,045.7 987.6 976.9 247.5 241.4 1,000 99.5 250 43.6 110.5 102.2 44.3 43.5 97.0 90.0 211.5 50.8 45.1 781.4 800 200 99.4 53.6 452.5 455
Slide 17: Margin Income Analysis
Margin Income Analysis Financial Results 200 18 16.7 180 15.4 16 14.4 14.0 160 13.6 14 12.1 140 12 117.4 120.0 120 USD Billion 104.9 105.8 10 USD Million 100 89.0 86.8 8 80 6 60 4 40 20 2 0 0 1H12 2H12 1H13 2H13 1H14 2H14 Margin Income Average balances AVERAGE MARKET CASH RATES 1H12 2H12 1H13 2H13 1
Slide 18: FY14 Client Balances Interest Rate Exposure
FY14 Client Balances Interest Rate Exposure Financial Results Average funds (USD 14.2b) held during FY14 CPU had an average of USD14.2b of client funds under management during FY14. No exposure 24% ($3.4b) For 24% ($3.4b) of the FY14 average client Exposure to funds under management, CPU had no inte
Slide 19: Client Balances Interest Rate Exposure and Currency
FY14 Client Balances Interest Rate Exposure and Currency Financial Results Exposed Funds by Currency (FY14 Average Balances) Average exposed funds Average exposed funds balance prior to hedging balance net of hedging Other AUD Other AUD 4% ($0.5b) 3% ($0.3b) 4% ($0.3b) 4% ($0.3b) CAD 18% ($1.9b) CAD
Slide 20: Fixed and Floating Rate Term Deposits
Client Balances Fixed and Floating Rate Term Deposits Financial Results 8,000 Floating Rate Deposits Fixed Rate Deposits 7,000 6,000 5,000 4,000 USD M 3,000 2,000 1,000 0 Jul-14 Jul-15 Jul-16 Jul-17 Jul-18 20
Slide 21: Total Management Operating Costs
Total Management Operating Costs Half Year Comparisons Financial Results 900 790.2 800 768.9 771.6 746.3 709.2 700 196.8 168.3 196.2 193.4 164.9 600 569.9 500 132.0 USD M 400 300 593.4 577.9 572.7 578.3 544.3 437.9 200 100 0 1H12 2H12 1H13 2H13 1H14 2H14 Controllable Costs (excl COS) Cost of Sales (
Slide 22: Management Operating Costs Half Year Comparisons
Management Operating Costs Half Year Comparisons Financial Results 450 373.2 370.4 365.9 361.6 400 352.1 350 290.4 300 USD M 250 196.8 196.2 193.4 168.3 164.9 200 131.9 132.0 129.4 123.1 122.6 117.8 150 89.9 100 60.6 47.7 44.3 43.3 41.4 39.2 37.4 37.3 37.1 36.9 30.3 20.7 50 0 Cost of Sales Personnel
Slide 23: Technology Costs
Technology Costs Continued Investment to Maintain Strategic Advantage Financial Results 14% 13.1% 160 12.7% 12.1% 11.8% 11.8% 11.5% 12% 140 131.9 129.4 Technology costs as a % of revenue 122.6 6.2 123.1 5.7 117.8 120 7.2 4.9 10% 8.9 32.4 100 44.2 31.6 89.9 8% 45.8 30.2 USD M 2.9 80 30.5 6% 56.6 46.8
Slide 24: FY14 Operating Cash Flow Analysis
FY14 Operating Cash Flow Analysis Financial Results 450 10.2 0.5 3.3 2.4 400 85.0 350 300 USD M 250 200 409.3 334.0 150 100 50 0 Net Operating Net Receipts & Loan Servicing Dividends & Interest Paid & Income Taxes Net Operating Cash Flow FY13 Payments Advances Interest Other Finance Paid Cash Flow F
Slide 25: Capital Expenditure vs. Depreciation
Capital Expenditure vs. Depreciation Financial Results 40 37.8 0.9 35 30 25.6 24.3 23.9 25 23.7 1.6 3.2 2.0 USD M 5.6 20 3.9 3.8 12.9 15 2.1 10.3 9.5 10 0.3 1.5 0.6 17.2 1.3 2.7 0.9 14.6 2.6 11.1 5 7.6 6.4 4.9 0 1H12 2H12 1H13 2H13 1H14 2H14 Information Technology Communication Services Facilities O
Slide 26: Free Cash Flow
Free Cash Flow Financial Results 250 217.4 200.8 200 188.2 191.9 146.4 150 133.3 USD M 100 50 30.1 23.6 20.2 10.0 6.3 10.2 0 1H12 2H12 1H13 2H13 1H14 2H14 Operating Cash Flows Cash outlay on Capital Expenditure Note: Excludes assets purchased through finance leases which are not cash outlays. 26
Slide 27: Balance Sheet at June 2014
Balance Sheet at 30 June 2014 Financial Results Jun-14 Jun-13 Variance See ASX Appendix 4E as at 30 June 2014 for full details. USD M USD M Jun-14 to Jun-13 › Current assets increased Current Assets $1,117.5 $982.4 13.8% mainly due to SLS and other receivables as well as cash (cash partially include
Slide 28: Key Financial Ratios
Key Financial Ratios Financial Results EBITDA Interest Coverage Net Financial Indebtedness to EBITDA 14 3.5 12 3.0 10 2.5 Times 8 2.0 Times 13.2 6 1.5 2.92 2.86 2.72 9.5 2.47 8.6 2.26 2.13 4 7.3 7.7 8.4 1.0 2 0.5 0 0.0 1H12 2H12 1H13 2H13 1H14 2H14 1H12 2H12 1H13 2H13 1H14 2H14 Jun-14 Jun-13 Varianc
Slide 29: Debt Facility Maturity Profile
Debt Facility Maturity Profile Financial Results Private Maturity Dates Debt Committed Bank Placement USD M Drawn Debt Facilities Debt Facility Facility FY15 Dec-14 90.6 150.0 Mar-15 124.5 124.5 124.5 FY17 Mar-17 21.0 21.0 21.0 FY18 Jul-17 443.5 450.0 450.0 Feb-18 40.0 40.0 40.0 FY19 Jul-18 235.0 23
Slide 30: Working Capital Management
Working Capital Management Financial Results Days sales outstanding 50 48 45 45 45 43 42 42 40 35 30 No. Of Days 25 20 15 10 5 0 1H12 2H12 1H13 2H13 1H14 2H14 30
Slide 31: Return On Invested Capital vs. WACC and Return on Equity
Return On Invested Capital vs. WACC and Return on Equity Financial Results 30% 28.01% 25.80% 25% 22.34% 20% 15.84% 16.38% 14.37% 15% 10% 8.97% 9.51% 8.61% 5% 0% FY12 FY13 FY14 WACC ROIC ROE • ROIC = (Mgt EBITDA less Depreciation less Income Tax expense)/(Total Debt add Total Equity less Cash). 31
Slide 32: Equity Management: Final Dividend of 15 cents (AU)
Equity Management Final Dividend of 15 cents (AU) Financial Results EPS - Statutory US 45.20 cents EPS - Management US 60.24 cents Interim Dividend AU 14 cents (20% franked) Final Dividend AU 15 cents (20% franked) Current Yield* 2.3% * Based on 12 month dividend and share price of AU$12.36 (close 8
Slide 33: Financial Summary – Final Remarks
Financial Summary – Final Remarks Financial Results › Trading conditions are still challenging across some business lines, but the group remains well positioned to benefit from the improving economic environment. › Ongoing disciplined cost management continues to drive solid results and cash flow. ›
Slide 34: Introduction, Financial Results, CEO's Report
Financial CEO’s Introduction Results Report 34
Slide 35: CEO's Report: Stuart Irving
CEO’s Report Stuart Irving PRESIDENT & CHIEF EXECUTIVE OFFICER CEO PRESENTATION V1DIS
Slide 36: Group Strategy and Priorities
Group Strategy and Priorities CEO’s Report Our group strategy remains as it has been: - Continue to seek acquisition and other growth opportunities where we can add value and enhance returns for our shareholders. - Improve our front office skills to protect and drive revenue. - Continue to drive ope
Slide 37: Delivery against strategy and priorities
Delivery against strategy and priorities CEO’s Report The Shareowner Services synergies are nearing completion and recent acquisitions are all progressing well and meeting expected milestones. However, the opportunities for further acquisitions in our traditional registry space are becoming more lim
Slide 38: Acquisitions update – Shareowner Services
Acquisitions update – Shareowner Services CEO’s Report › Synergy realisation continues to track in line with expectation. › At 30 June 2014, 95% of total synergies have been achieved. Cumulative Cost Synergies (USD M) Cost to Realise Synergies (USD M) Expected realisation of Update at 30 Jun At 31 D
Slide 39: USA Update
USA Update CEO’s Report › The US continued to experience historically low interest rates but saw improvements in both M&A activity and shareholder trading activity. › Shareowner Services and Loan Servicing integrations are now behind us both having surpassed our expectations and early indications ar
Slide 40: Canada Update
Canada Update CEO’s Report › Corporate Trust continues to grow despite the persistently low interest rate environment. › Corporate Actions deal flow remains soft, particularly IPOs. › Client retention continues to be the key priority for Investor Services, along with ongoing focus on cross and upsel
Slide 41: UCIA Update
UCIA Update CEO’s Report › The integration of the Morgan Stanley Global Stock Plan business is progressing well and we remain on schedule to complete the migration of all clients by the end of 2014. › Transactional volumes in Plan Managers continue to be positive. We have also seen increased activit
Slide 42: Continental Europe Update
Continental Europe Update CEO’s Report › In Italy, our Registry and Meeting Services business has been stable, but with no major IPOs or EGMs this year, organic growth has been subdued. › While we have not seen an uplift in market activity in Germany, our Registry business has achieved a number of c
Slide 43: Asia Update
Asia Update CEO’s Report › The Hong Kong IPO market remains active, although application levels remain lack lustre. New issuer acquisition and cross-selling of services have both been very positive. › Growth in the employee share plan business remains strong and due to strength of the US stock marke
Slide 44: Australia & New Zealand Update
Australia & New Zealand Update CEO’s Report › The Australian Investor Services business maintained its market leading position and a number of important client contracts were renewed. › Improved market conditions resulted in appointments to a number of IPOs. Significant client corporate actions incl
Slide 45: Full Year Results 2014 Presentation
Computershare Limited Full Year Results 2014 Presentation Stuart Irving Mark Davis 13 August 2014 V1DIS
Slide 46: Appendix: Full Year Results 2014 Presentation
Appendix: Full Year Results 2014 Presentation 13 August 2014 46
Slide 47: Appendix 1: Group Comparisons
Appendix 1: Group Comparisons Group Comparisons 47
Slide 48: Management Revenue Half Year Comparisons
Management Revenue Half Year Comparisons Financial Results 100% 3% 2% 2% 1% 2% 1% 9% 10% 10% 10% 10% 12% 90% 11% 12% 11% 13% 13% 80% 11% 5% 3% 4% 3% 4% 4% 70% 23% 24% 60% 19% 24% 25% 23% 50% 9% 9% 9% 7% 8% 7% 40% 30% 20% 43% 42% 41% 41% 40% 40% 10% 0% 1H12 2H12 1H13 2H13 1H14 2H14 Register Maintenan
Slide 49: Management Revenue by Product Half Year Comparisons
Management Revenue by Product Half Year Comparisons Financial Results 1,200 1,037.3 1,037.5 1,045.7 17.2 987.6 14.5 976.9 14.1 1,000 91.7 16.3 99.8 15.6 100.0 98.3 94.8 112.3 124.6 134.6 781.4 112.5 800 52.2 124.9 21.5 45.4 46.7 31.2 90.3 28.0 234.7 US D M 85.0 247.3 241.0 600 241.8 246.9 34.6 148.3
Slide 50: Management Revenue Half Year Comparisons
Management Revenue Half Year Comparisons Financial Results 500 440.6 432.3 429.4 450 394.7 389.5 400 334.2 350 300 247.3 246.9 241.8 241.0 234.7 250 USD M 200 148.3 134.6 124.9 124.6 112.5 112.3 150 100.0 99.8 98.3 94.8 92.8 91.7 90.3 88.7 85.0 77.2 77.0 76.6 67.4 100 52.2 46.7 45.4 34.6 31.2 28.0 2
Slide 51: FY14 Management Revenue Regional Analysis
FY14 Management Revenue Regional Analysis Financial Results 450 406.5 400 350 262.4 300 250 USD M 200 133.0 128.7 119.8 150 106.1 74.0 73.9 73.8 100 69.2 66.7 59.5 57.4 56.2 51.9 33.5 31.5 26.3 24.1 23.8 50 16.6 16.6 16.0 15.4 11.7 10.9 10.7 6.0 5.9 5.5 5.0 4.6 3.8 3.8 3.6 2.7 1.8 1.4 1.1 0.8 0.6 0.
Slide 52: Effective Tax Rate
Effective Tax Rate Statutory & Management Financial Results 30% The group’s effective statutory tax rate is 21.8% for the full year ended 30 June 2014. The 25.1% group’s effective statutory tax 25% rate for the comparative prior 22.3% 22.6% 22.4% period was 16.6%. 21.8% 20% In FY13, the US was in a
Slide 53: Appendix 2: Country Summaries
Appendix 2: Country Summaries Country Summaries 53
Slide 54: Australia Half Year Comparison
Australia Half Year Comparison Financial Results Total Revenue Revenue Breakdown 250 80 74.7 218.3 71.9 71.5 211.3 71.0 69.3 68.2 67.8 198.1 70 64.5 63.9 189.0 188.5 187.9 200 56.5 55.7 60 53.0 150 50 AUD M AUD M 39.2 38.8 37.0 35.8 40 35.3 100 30 20.4 18.3 17.2 16.7 16.3 16.1 20 14.1 13.8 13.7 12.9
Slide 55: Hong Kong Half Year Comparison
Hong Kong Half Year Comparison Financial Results Total Revenue Revenue Breakdown 400 200 177.9 180 350 161.2 160.8 159.4 157.7 156.6 160 300 264.6 253.9 140 247.6 231.7 226.8 225.0 250 120 HKD M HKD M 200 100 72.5 80 150 50.6 60 46.2 46.0 40.3 100 36.5 36.1 31.3 40 28.0 20.8 16.1 16.0 50 20 4.6 4.5
Slide 56: India Half Year Comparison
India Half Year Comparison Financial Results 1,400 Total Revenue Revenue Breakdown 1,600 1,451.3 1,140.5 1,200 1,299.1 1,255.4 1,400 1,127.5 940.0 1,000 895.8 1,200 1,018.5 998.0 723.0 1,000 800 660.0 INR M 632.5 INR M 800 600 600 356.1 336.0 330.6 400 292.9 292.7 260.0 400 200 110.4 200 68.5 55.4 2
Slide 57: United States Half Year Comparison
United States Half Year Comparison Financial Results Total Revenue Revenue Breakdown 600 250 215.1 210.4 208.8 196.0 468.1 500 455.2 452.5 184.9 200 437.9 407.2 400 150 131.2 131.1 116.7 USD M 112.5 USD M 112.0 107.0 300 217.7 100 200 48.8 45.2 40.0 38.8 37.9 37.9 50 35.0 34.4 34.3 34.1 33.2 31.6 31
Slide 58: Canada Half Year Comparison
Canada Half Year Comparison Financial Results Total Revenue Revenue Breakdown 120 50 46.7 110.2 46.3 108.8 103.5 43.2 45 98.6 96.9 40.2 94.0 39.0 100 38.7 38.1 37.8 40 37.2 36.8 34.8 32.7 35 80 30 CAD M CAD M 60 25 20 40 15 12.3 11.0 10.6 9.5 9.5 9.0 8.7 8.6 8.5 8.2 10 7.8 7.6 20 3.1 5 2.7 2.6 2.3 2
Slide 59: United Kingdom & Channel Islands Half Year Comparison
United Kingdom & Channel Islands Half Year Comparison Financial Results Total Revenue Revenue Breakdown 45 40.6 39.6 39.1 40 94.0 100 87.8 33.7 33.6 90 35 82.5 82.4 79.8 76.1 28.7 80 30 70 24.0 25 GBP M 21.5 GBP M 21.0 20.7 60 20.5 20.5 20.5 20.1 19.7 19.2 17.9 17.6 20 50 40 15 30 10 20 6.7 5 2.8 2.
Slide 60: South Africa Half Year Comparison
South Africa Half Year Comparison Financial Results Total Revenue Revenue Breakdown 130.3 160 140 128.3 128.1 144.5 144.0 124.9 142.5 123.6 138.0 135.8 117.7 130.3 140 120 120 100 100 80 RAND M RAND M 80 60 60 40 40 20 20 7.8 7.5 7.4 7.2 7.2 7.1 6.0 5.4 3.8 3.5 3.5 3.4 2.9 2.6 2.6 2.3 0.5 0.4 0.3 0.
Slide 61: Germany Half Year Comparison
Germany Half Year Comparison Financial Results Total Revenue Revenue Breakdown 30 14 27.7 27.1 12.4 25.7 11.6 12 25 10.4 9.5 10 20 8.4 8.4 8.3 16.0 15.4 8 7.4 EUR M EUR M 14.8 15 6.2 6 4.8 10 3.5 4 3.4 2.9 2.3 2.3 2.2 2.2 2.1 2.1 2.0 5 1.7 1.7 1.5 2 1.4 1.2 1.2 1.1 0.9 0.8 0.8 0.4 0.4 0.3 0.3 0.2 0.
Slide 62: Russia Half Year Comparison
Russia Half Year Comparison Financial Results Total Revenue Revenue Breakdown 600 500 430.6 450 403.5 393.5 500 450.3 400 353.3 421.2 418.5 342.5 340.1 350 373.8 363.4 361.2 400 300 RUB M RUB M 300 250 200 200 150 100 100 25.0 50 23.3 20.5 19.7 18.7 17.7 0 0 1H12 2H12 1H13 2H13 1H14 2H14 Register Ma
Slide 63: Appendix 3: Assumptions
Appendix 3: Assumptions Financial Results Assumptions 63
Slide 64: Assumptions: FY14 Exchange Rates
Assumptions: FY14 Exchange Rates Financial Results Average exchange rates used to translate profit and loss to US dollars USD 1.0000 AUD 1.09422 HKD 7.75614 NZD 1.21756 INR 61.56622 CAD 1.07060 GBP 0.61811 EUR 0.73834 RAND 10.35299 RUB 33.86180 AED 3.67313 DKK 5.50849 SEK 6.53662 64
Slide 65: Important Notice
Important Notice Forward looking statements › This announcement may include 'forward-looking statements'. Such statements can generally be identified by the use of words such as 'may', 'will', 'expect', 'intend', 'plan', 'estimate', 'anticipate', 'believe', 'continue', 'objectives', 'outlook', 'guid