Slide 1: 2019 Full Year Results Presentation
COMPUTERSHARE LIMITED 2019 FULL YEAR RESULTS PRESENTATION Stuart Irving Chief Executive Officer and President Mark Davis Chief Financial Officer 14 August 2019
Slide 2: FY19 Executive summary
FY19 Executive summary Delivering strong results through sound execution Management results 1 Revenue EBITDA EPS $2,411.4m 4.8% $685.9m 10.2% 71.46 cents 12.8% Statutory EPS Return on Equity 3 Dividend per share Actual Actual Final 76.57 cents 2 38.8% 26.4% 30bps AU 23 cents 9.5% FY19 Management EPS
Slide 3: Executing strategic priorities continues to deliver strong returns
Executing strategic priorities continues to deliver strong returns Growth Profitability Capital Management › Computershare continues to lay the › Strong one off event based revenue, › Balance sheet remains strong post foundations for sustained growth increased the FY18 base, pleasing funding Equatex
Slide 4: FY19 key priorities – execution scorecard
FY19 key priorities – execution scorecard Disciplined execution drives growth and profitability PROGRESS RESULT PROGRESS RESULT 1. INVEST IN 4. TRANSITION THE FUTURE OF Shift from regional structure to Equatex acquired, technology TO GLOBAL OUR PLANS improve customer focus and integration underway,
Slide 5: FY20 outlook
FY20 outlook FY20 Guidance › In constant currency, for FY20 we expect: - Management EPS to be down by around 5.0% - Excluding UK Mortgage Services (delayed migration of UK loans to CPU platform as previously announced) and the adoption of IFRS16 accounting for leases, we expect Management EPS would
Slide 6: Growth: Employee Share Plans
Growth: Employee Share Plans Equatex performing well and integration program on track FY19 @ CC FY18 Actual CC Variance Fee revenue $133.7 $107.3 +24.6% Transactional revenue $123.9 $86.0 +44.1% Margin income $16.2 $16.7 -3.0% Other revenue $22.1 $18.4 +20.1% Total Employee Share Plans revenue $295.
Slide 7: Growth: Mortgage Services
Growth: Mortgage Services Strong 2H performance in the US with scope for sustained growth FY19 @ CC FY18 Actual CC Variance US Mortgage Services revenue $361.2 $306.1 +18.0% UK Mortgage Services revenue $263.4 $254.1 +3.7% Total Mortgage Services revenue $624.6 $560.2 +11.5% Total Mortgage Services
Slide 8: Profitability: Register Maintenance and Corporate Actions
Profitability: Register Maintenance and Corporate Actions Continuing growth and margin expansion in our largest business FY19 @ CC FY18 Actual CC Variance Register Maintenance revenue $727.1 $710.3 +2.4% Corporate Actions revenue $167.5 $160.6 +4.3% Total Register Maintenance & $894.6 $870.9 +2.7% C
Slide 9: Profitability: Structural cost out programs tracking to plan
Profitability: Structural cost out programs tracking to plan Stages 1, 2 and 3 total gross savings of $80.1m achieved to date Total cost Benefit realisation (cumulative) Activity savings estimates $m FY17A FY18A FY19A FY20E FY21E FY22E FY23E Stage 1 Total 25 - 30 7.8 14.0 21.8 27.6 28.0 28.0 28.0 St
Slide 10: Capital management
Capital management Strategies support growth investments and shareholder distributions Consistently high returns Conservative balance sheet Growth investments 1.84x - below mid point of Equatex $419.7m ROE 26.4%, ROIC 14.8% range LenderLive $31.8m 4.0 year average debt duration, $550m USPP completed
Slide 11: FY19 Management results summary
FY19 Management results summary Strong performance across all major business lines with margin income enhancing earnings FY19 @ CC FY18 Actual CC Variance FY19 Actual Total Revenue $2,411.4 $2,300.9 +4.8% $2,356.5 Margin income $250.7 $179.5 +39.7% $246.5 Operating Costs $1,724.4 $1,678.5 +2.7% $1,6
Slide 12: Management revenue bridge
Management revenue bridge Strong contributions from US Mortgage Services, Employee Share Plans and margin income 2,450 2,400 2,411.4 54.8 71.2 Included $65.9m of 2,350 large one off 2,356.5 event based 4.0 1.0 USD million revenues 4.8 14.6 16.3 68.0 2,300 2,300.9 26.8 2,250 2,200 FX FY18 Mgt Revenue
Slide 13: Management revenue by business stream
Management revenue by business stream All major business lines performing well Business stream FY19 @ CC FY18 Actual CC Variance FY19 Actual Business Services $945.6 $894.4 +5.7% $927.4 Register Maintenance $727.1 $710.3 +2.4% $711.2 Corporate Actions $167.5 $160.6 +4.3% $164.3 Employee Share Plans
Slide 14: Margin income
Margin income Margin income increased to $246.5m, +37.3% with $18.5bn average balances Impacted by weaker Corporate Action activity 21.0 21.0 140.0 18.0 120.0 125.2 121.2 17.3 16.6 16.8 16.6 16.3 16.1 15.0 Average Client Balances for period USD million 100.0 for period USD billion 15.1 15.2 15.0 Mar
Slide 15: Profile of fixed rate deposits and swaps
Profile of fixed rate deposits and swaps As at 30 June 2019 3,500 Fixed rate deposits 3,000 Swaps 2,500 USD million 2,000 1,500 1,000 500 0 Jul-19 Jul-20 Jul-21 Jul-22 Jul-23 As at 31 December 2018 3,500 Fixed rate deposits 3,000 Swaps 2,500 USD million 2,000 1,500 1,000 500 0 Jan-19 Jan-20 Jan-21 J
Slide 16: EBITDA and margins by business stream
EBITDA and margins by business stream Solid growth in EBITDA, +10.2% with ongoing margin expansion to 28.4%, up 130bps FY19 @ CC FY18 Actual CC Variance FY19 EBITDA FY18 Actual Margin in CC EBITDA Business Stream % Margin % Business Services $255.0 $240.1 +6.2% 27.0% 26.8% Register Maintenance & Cor
Slide 17: EBITDA and margin income by business stream
EBITDA and margin income by business stream EBITDA $685.9m, with margin income increasing by 39.7% FY19 FY19 FY19 FY18 FY18 FY18 CC EBITDA MI EBITDA EBITDA MI EBITDA Variance Business Stream @ CC @ CC ex MI @ ex MI CC Business Services $255.0 $116.8 $138.2 $240.1 $80.3 $159.9 -13.6% Register Mainten
Slide 18: Operating costs analysis
Operating costs analysis Disciplined cost controls with 2.7% opex growth Operating costs FY19 @ CC FY18 Actual CC Variance FY19 Actual Cost of sales $388.0 $380.7 +1.9% $378.4 Personnel $1,035.4 $992.6 +4.3% $1,009.5 Fixed/Perm $976.0 $925.8 +5.4% $951.7 Variable/Temp $59.4 $66.8 -11.1% $57.8 Occupa
Slide 19: Cash flow summary at actual fx rates
Cash flow summary at actual fx rates Positive free cash flows impacted by tax, interest and integration costs FY19 Actual FY18 Actual Net operating receipts and payments $585.2 $595.6 Net interest and dividends ($68.1) ($55.7) Income taxes paid ($105.5) ($86.9) Net operating cash flows excluding SLS
Slide 20: Balance sheet
Balance sheet Post acquisitions and growth investments, leverage ratio below mid point of target range (1.75x - 2.25x) Jun 19 Jun 18 Variance Current Assets $1,501.1 $1,241.9 +20.9% Non-Current Assets $3,183.9 $2,646.3 +20.3% Total Assets $4,685.0 $3,888.2 +20.5% Current Liabilities $701.1 $1,091.6
Slide 21: FY20 Execution priorities
FY20 Execution priorities Continuing focus on customers, technologies and efficiencies to drive growth and profitability 21
Slide 22: Conclusions
Conclusions › CPU continues to deliver strong results. Management EPS +12.8%, EBITDA +10.2%, EBITDA margins up to 28.4%, up 130 bps › Improved performances from all major business lines, margin income gains and a reduced tax rate › Execution progress in building Employee Share Plans, developing Issu
Slide 23: Appendices
APPENDICES Statutory results FY19 Management NPAT analysis FY19 Computershare at a glance Management EBITDA (ex MI) Management EPS – AUD equivalent Financial performance by half year at actual FX rates Revenue and EBITDA by business stream at actual FX rates Global Registry Maintenance and Employee
Slide 24: Statutory results
Statutory results Statutory EPS 76.57 cents exceeds Management EPS 70.24 FY19 FY18 Vs FY18 (pcp) Total Revenues $2,469.0m $2,301.1m +7.3% › Management results are used, along with Total Expenses $1,939.7m $1,911.5m +1.5% other measures, to assess operating business Statutory Net Profit (post NCI) $4
Slide 25: Management adjustment items
Management adjustment items Appendix 4E Note 3 Management adjustment items net of tax for the year ended 30 June 2019 were as follows: Amortisation › Customer relationships and most of other intangible assets that are recognised on business combinations or major asset acquisitions are amortised over
Slide 26: FY19 Management NPAT analysis
FY19 Management NPAT analysis Margin income assists NPAT growth FY18 included 450 $65.9m of large one off event 400 based revenues 17.7 5.8 1.4 5.0 6.7 71.2 388.0 381.4 350 8.0 344.7 300 USD million 250 200 150 100 50 0 Non-controlling FY18 NPAT Mgt EBITDA Margin Income Dep'n & Amort Tax FX FY19 NPA
Slide 27: FY19 Computershare at a glance
FY19 Computershare at a glance Management revenue @ CC Management EBITDA @ CC Canada ANZ ANZ Canada Asia 8% 10% Asia 4% 13% 6% By geography 5% UCIA 21% $2,411.4m UCIA $685.9m 25% USA CEU 47% 3% USA CEU 53% 5% Comms Services Corporate & Technology Corporate & Comms Services, 6% 8% 1% Technology, -2%
Slide 28: Management EBITDA excluding the impact of margin income and FX movements
Management EBITDA excluding the impact of margin income and FX movements 6 Year CAGR 9.0% Includes $66.2m of large one off event based revenues 434.8 428.4 405.3 372.8 357.7 321.5 255.3 FY13 FY14 FY15 FY16 FY17 FY18 FY19 Note: Management EBITDA translated at FY19 average exchange rates and excludes
Slide 29: Management EPS – AUD equivalent
Management EPS – AUD equivalent 140 0.9 0.8389 0.7758 0.8 0.7521 120 0.7273 0.7177 0.7 100 97.87 0.6 Cents per share 80 81.69 0.5 75.74 FX rate 71.31 72.35 0.4 60 0.3 40 81.69 ~ 75.74 72.35 71.31 0.2 ~ 20 0.1 0 0 FY15 FY16 FY17 FY18 FY19 AUD/USD average exchange rate 29
Slide 30: Financial performance by half year at actual FX rates
Financial performance by half year at actual FX rates 2H19 1H19 2H18 1H18 2H17 1H17 2H16 1H16 2H15 1H15 2H14 1H14 Total Management $1,228.7 $1,127.8 $1,173.1 $1,127.8 $1,110.8 $1,003.2 $1,035.5 $938.7 $1,016.5 $959.5 $1,045.7 $976.9 Revenue Operating Costs $885.2 $795.4 $843.4 $835.2 $811.6 $762.3 $
Slide 31: Revenue and EBITDA by business stream at actual FX rates
Revenue and EBITDA by business stream at actual FX rates FY19 FY19 FY19 Actual FY18 FY18 FY18 Actual Revenue EBITDA EBITDA Margin Revenue EBITDA EBITDA Margin % % Business Services $927.4 $249.7 26.9% $894.4 $240.1 26.8% Register Maintenance $711.2 $710.3 Corporate Actions $164.3 $160.6 Register Mai
Slide 32: Global Register Maintenance and Employee Share Plans revenue
Global Register Maintenance and Employee Share Plans revenue Registry Maintenance @ CC Employee Share Plans @ CC Oth Rev 7% Margin Holder/Broker Income 6% paid Issuer paid 28% FY19 @ CC 66% Fee 45% $727.1m $295.9m Margin Income Transaction 6% 42% Oth Rev 8% Margin Holder/Broker Income paid 7% 28% Is
Slide 33: Business Services revenue excluding Mortgage Services
Business Services revenue excluding Mortgage Services FY19 @ CC FY18 Other Other $9.8 $10.9 India Funds 3% 3% $17.5 India Funds Voucher 6% $45.1 Services Class Actions 14% $19.4 $122.2 Class Actions 6% 38% $136.1 Voucher 41% Services Deposit $20.8 Protection 6% Scheme $31.4 10% Deposit Protection $3
Slide 34: Management revenue and EBITDA at actual FX rates
Management revenue and EBITDA at actual FX rates Regional Analysis Revenue by region EBITDA by region 2,500 2,356.5 800 2,300.9 2,114.0 195.2 214.5 700 674.9 181.0 622.6 2,000 85.8 600 540.8 91.3 1,137.2 500 81.1 1,087.9 1,500 994.4 400 366.2 323.5 1,000 266.0 106.9 104.4 300 93.8 489.7 18.6 453.5 5
Slide 35: FY19 Management revenue at actual FX rates
FY19 Management revenue at actual FX rates Regional Analysis 550 494.9 450 382.2 320.9 350 USD millions 250 143.4 150 99.5 86.4 85.8 84.3 82.2 60.3 59.1 57.8 49.1 45.7 40.1 29.7 29.1 21.2 21.0 20.4 19.4 16.5 50 14.4 12.5 11.7 11.1 8.7 7.8 7.0 6.8 6.5 6.1 5.0 3.4 3.2 1.9 1.0 0.6 0.0 0.0 0.0 0.0 Regis
Slide 36: Australia
Australia Management revenue: AUD million FY17 FY18 FY19 325.0m 305.2m 294.5m 141.2 130.5 117.3 119.6 110.3 107.5 26.6 25.3 27.0 20.0 19.3 20.0 13.1 12.3 12.1 5.5 6.9 7.0 1.3 0.7 1.3 Register Maintenance Corporate Business Stakeholder Employee Share Communication Corporate & Actions Services Relatio
Slide 37: Hong Kong
Hong Kong Management revenue: HKD million FY17 FY18 FY19 631.8m 716.3m 742.5m 406.5 410.8 391.6 221.0 181.0 146.6 104.9 84.2 73.4 20.2 23.9 26.5 Register Maintenance Corporate Actions Stakeholder Relationship Mgt Employee Share Plans FY17 FY18 FY19 37
Slide 38: India
India* Management revenue: INR million FY17 FY18 FY19 3,451.4m 3,924.4m 1,608.6m 2,961.6 2,673.8 1,137.7 836.8 659.1 401.1 118.4 125.9 69.8 Register Maintenance Corporate Actions Business Services FY17 FY18 FY19 38 * Karvy disposal completed in November 18 and the sale included all operations.
Slide 39: United States
United States Management revenue: USD million FY17 FY18 FY19 Mortgage Services 994.4m 1,087.9m 1,159.7m FY17: 257.2 FY18: 306.1 FY19: 361.2 494.9 434.4 382.2 376.0 365.8363.1 Equatex FY19: 22.5 98.0 99.5 76.8 82.8 71.5 64.3 67.3 65.1 49.1 36.9 38.4 40.1 12.6 12.2 11.1 Register Corporate Business Sta
Slide 40: Canada
Canada Management revenue: CAD million FY17 FY18 FY19 240.3m 272.8m 258.7m 133.2 114.5 103.0 80.6 79.4 78.3 28.3 26.7 27.0 25.7 20.0 17.2 8.5 9.2 9.0 2.6 4.4 4.2 Register Maintenance Corporate Business Employee Share Plans Communication Services Corporate & Actions Services Technology FY17 FY18 FY19
Slide 41: United Kingdom and Channel Islands
United Kingdom and Channel Islands Management revenue: GBP million FY17 FY18 FY19 331.3m 335.0m 373.1m Mortgage Services FY17: 188.5 FY18: 188.7 FY19: 195.7 247.6 221.5222.3 59.8 54.2 55.0 39.4 41.2 43.2 3.9 3.3 7.7 4.2 4.9 5.0 4.8 4.7 5.0 3.3 3.5 4.7 Register Corporate Business Stakeholder Employee
Slide 42: South Africa
South Africa Management revenue: RAND million FY17 FY18 FY19 256.8m 272.9m 282.0m 241.7 228.8 217.3 21.9 26.1 25.3 16.9 16.7 14.5 0.7 1.3 0.5 Register Maintenance Corporate Actions Stakeholder Relationship Mgt Employee Share Plans FY17 FY18 FY19 42
Slide 43: Germany
Germany Management revenue: EUR million FY17 FY18 FY19 39.6m 42.8m 46.0m 26.0 23.9 20.0 15.9 15.5 14.3 4.0 3.9 3.1 0.5 0.6 0.6 Register Maintenance Employee Share Plans Communication Services Corporate & Technology FY17 FY18 FY19 43
Slide 44: Switzerland
Switzerland Management revenue: CHF million FY17 FY18 FY19 7.7m 11.1m 45.2m Equatex FY19: 36.2 38.2 6.9 7.0 4.8 4.1 2.8 0.1 0.1 0.0 Register Maintenance Employee Share Plans Corporate & Technology FY17 FY18 FY19 44
Slide 45: Tech costs as a % of revenue
Technology costs at actual FX rates 350 12.4% 11.4% 12% 11.3% 300 261.3 263.0 265.6 10% 9.6 10.0 10.0 250 Tech costs as a % of revenue 75.8 87.9 8% 84.2 200 USD million 6% 150 91.7 103.6 95.4 4% 100 50 2% 75.8 73.7 72.3 0 0% FY17 FY18 FY19 Development Infrastructure Maintenance Admin Technology cost
Slide 46: Capital expenditure versus depreciation
Capital expenditure versus depreciation at actual FX rates 80 45 70 40 35 60 57.2 1.2 30 50 12.3 25 40 37.3 6.6 Depreciation USD million 35.4 USD million 20 Capex 1.9 4.5 30 11.1 8.7 15 1.0 1.7 20 37.1 10 20.8 23.1 10 5 0 0 FY17 FY18 FY19 Information Technology Communication Services Facilities Occu
Slide 47: Breakdown of client balances – averages for FY19
Breakdown of client balances – averages for FY19 USD 18.5bn Total balances USD 12.1bn USD 6.4bn Exposed balances Non-exposed balances USD 2.9bn USD 9.2bn Hedged balances Non-hedged balances USD 7.6bn USD 1.6bn USD 1.6bn USD 1.3bn Non-hedged Natural hedge Fixed Rate Deposits Fixed Rate Swaps balances
Slide 48: Exposed and non-exposed balances by business
Exposed and non-exposed balances by business Margin income Margin income Business Activity FY19 Balances (USD billions) FY18 Balances (USD billions) (USD millions) (USD millions) Exposed Non-exposed Exposed Non-exposed Register 2.4 0.4 42.8 2.3 0.4 31.4 Maintenance Corporate Actions 3.0 2.4 73.5 2.8
Slide 49: Breakdown of exposed balances by currency
Breakdown of exposed balances by currency USD exposed balances continues to be the largest component Average exposed balances hedged CAD Average exposed balances prior to hedging 2% Other AUD 4% 3% GBP CAD 12% USD 2.9bn 40% (USD 12.1bn x 24%) USD 58% USD 12.1bn (USD 18.5bn x 65%) USD 50% GBP 31% Ave
Slide 50: Profile of floating rate deposits
Profile of floating rate deposits As at 30 June 2019 6,000 5,000 4,000 USD million 3,000 2,000 1,000 0 Jul-19 Jul-20 Jul-21 Jul-22 Jul-23 As at 31 December 2018 6,000 5,000 USD million 4,000 3,000 2,000 1,000 0 Jan-19 Jan-20 Jan-21 Jan-22 Jan-23 50 Floating rate deposits comprise both exposed and no
Slide 51: Debt maturity profile – June 2019
Debt maturity profile – 30 June 2019 Average debt facility maturity is 4.0 years Maturity Dates Debt Committed Bank Private SLS USD million Drawn Debt Debt Placement Advance Facilities Facility Facility Facility 800 FY20 Feb-20 61.2 125.0 125.0 FY21 Dec-20 160.9 225.0 225.0 Apr-21 243.0 450.0 450.0
Slide 52: Key financial ratios
Key financial ratios Jun 19 Jun 18 Variance USD m USD m Jun 19 to Jun 18 Interest Bearing Liabilities including SLS advance debt $2,036.3 $1,481.1 +37.5% Less Cash* ($561.3) ($534.7) +5.0% Net Debt (including SLS advance debt) $1,475.0 $946.5 +55.8% Management EBITDA $674.9 $622.6 +8.4% Net Financia
Slide 53: Effective tax rate
Effective tax rate Statutory and management (at actual FX rates) Tax rate % 35% 30% 29.2% 28.3% 26.5% 25.7% 25% › The Group’s statutory effective tax rate has slightly decreased from 20.9% in FY18 to 20.9% 20.7% 20.7% in FY19 20% › The Group’s management effective tax rate has decreased from 28.3% i
Slide 54: Dividend history and franking
Dividend history and franking 5 Year CAGR 8.7% 25.0 23 20.0 21 21 19 19 17 17 AU cents 15.0 16 16 15 15 14 10.0 5.0 0.0 1H14 2H14 1H15 2H15 1H16 2H16 1H17 2H17 1H18 2H18 1H19 2H19 Dividend (AU cents) Franking (%) 1H14 2H14 1H15 2H15 1H16 2H16 1H17 2H17 1H18 2H18 1H19 2H19 20% 20% 20% 25% 100% 20% 30
Slide 55: Mortgage Servicing
US and UK mortgage services - UPB and number of loans US mortgage services UPB up 25.7% ($101.8bn v $81.0bn) Performing Non-performing At 30 Jun 19 At 30 Jun 18 At 30 Jun 19 At 30 Jun 18 Fully-Owned $13.7bn $14.7bn $10.6bn $11.3bn MSRs 1 66K Loans 70K Loans 97K Loans 106K Loans Excess strip deals Ex
Slide 56: Mortgage Services Revenue and EBITDA at actual FX rates
Mortgage Services Revenue and EBITDA at actual FX rates 1H16 2H16 1H17 2H17 1H18 2H18 1H19 2H19 US Mortgage Services revenue $106.4 $115.6 $123.7 $133.5 $143.4 $162.7 $159.5 $201.6 UK Mortgage Services revenue $41.1 $52.2 $117.3 $122.4 $121.7 $132.4 $126.8 $126.8 Total Mortgage Services $147.5 $167.
Slide 57: Financial Snapshot – US Mortgage Services
Financial Snapshot – US Mortgage Services FY19 revenue composition Base Other servicing service fees fees 31% 56% • Base servicing fees, $202.3m, +18.3% • Servicing related fees $47.1m, -5.9% $361.2m • Other services fees $111.7m, +31.4% Servicing related fees 13% Jun-19 Jun-18 Annual Report referen
Slide 58: Mortgage services key terms
Mortgage services key terms Performing servicing: Servicing of a mortgage which is less than 30 days delinquent. Typically loans that meet the criteria of the Government Sponsored Entities e.g. “Fannie Mae”, “Freddie Mac”. Non-performing servicing: Servicing of a mortgage that is over 30 days delinq
Slide 59: Exchange rates
Exchange rates › Average FX rates used to translate profit and loss to US dollars for key reporting currencies › The USD has strengthened in FY19 against all currencies Movement FY19 FY18 Var Currency against USD: USD 1.0000 1.0000 AUD 1.3933 1.2890 8.1% Weakened HKD 7.8405 7.8219 0.2% Weakened NZD
Slide 60: Important notice
Important notice Summary information • This announcement contains summary information about Computershare and its activities current as at the date of this announcement. • This announcement is for information purposes only and is not a prospectus or product disclosure statement, financial product or