Computershare Limited · ASX:CPU
Computershare — H1 2010 Earnings Presentation
65 slides from Computershare's earnings presentation, Feb 10, 2010
Slide 1: Computershare Limited Half Year Results 2010 Presentation
Computershare Limited Half Year Results 2010 Presentation Stuart Crosby Peter Barker 10 February 2010
Slide 2: Introduction, Financial Results, CEO's Report
Introduction Financial CEO’s Report Results 2
Slide 3: Introduction: Stuart Crosby, President & CEO
Introduction Stuart Crosby President & Chief Executive Officer 3
Slide 4: Results Highlights
Results Highlights Introduction Management Adjusted Results Note: all results are in USD millions unless otherwise indicated 4
Slide 5: Computershare Strengths
Computershare Strengths Introduction › Strong balance sheet, low gearing and continued robust cash generation › Diversification into counter and non cyclical businesses continues to strengthen revenue and profit base › More than 70% of revenue recurring in nature › Demonstrated ability to acquire an
Slide 6: Outlook
Outlook Introduction Since the start of 2010, markets globally have been less buoyant than they were late last year, and there is no certainty that some of the larger transactions behind the strong first half result will be matched in the second half. These factors, combined with the fact that over
Slide 7: Introduction, Financial Results, CEO's Report
Introduction Financial CEO’s Report Results 7
Slide 8: Financial Results: Peter Barker, CFO
Financial Results Peter Barker Chief Financial Officer 8
Slide 9: Drivers Behind 1H 2010 Financial Performance
Drivers Behind 1H 2010 Financial Performance Financial Results › Strong corporate action [CA] activity in Australia (secondary capital raisings) and Hong Kong (IPOs) significantly offsets the reduction in UK CA (the UK having had record CA activity in 2H08 and 1H09) › Strong stakeholder relationship
Slide 10: Group Financial Performance
Group Financial Performance Financial Results Note: all results are in USD millions unless otherwise indicated 10
Slide 11: Analysis of Management EPS
Analysis of Management EPS Financial Results 11
Slide 12: 1H 2010 Management NPAT Analysis
1H 2010 Management NPAT Analysis Financial Results 12
Slide 13: Free Cash Flows
Free Cash Flows Financial Results Note: of the USD 49.7m Capital expenditure in 1H10, USD 34.7m is related to the acquisition of Land and Buildings in the UK and USD 4.9m is related to finance lease agreements entered into during 1H 2010. 13
Slide 14: Revenue & EBITDA
Revenue & EBITDA Financial Half Year Comparisons Results 14
Slide 15: Revenue Breakdown
Revenue Breakdown Financial Results Note: All results are in USD millions. Included in the revenue results are $74.5m of Margin Income (1H09: $86.4m) and $122.6m of Recoverable Income (1H09: $116.4m) 15
Slide 16: FY10 Regional Analysis & Revenue Breakdown
FY10 Regional Analysis & Revenue Financial Breakdown Results Regional Reporting Previous Structure Current Structure North America USA Asia Pacific Canada Europe, Middle East & Africa Australia & NZ Asia Europe, Middle East & Africa Revenue Segments Previous Structure Current Structure Register Main
Slide 17: Margin Income Analysis
Margin Income Analysis Financial Results Average Market Interest Rates UK 5.71% 5.19% 4.16% 0.82% 0.50% US 4.85% 2.67% 1.53% 0.27% 0.25% Canada 4.45% 3.51% 2.58% 0.64% 0.25% Australia 6.52% 7.12% 6.23% 3.35% 3.24% •Note: some balances attract no interest or a set margin for Computershare. • Source:
Slide 18: 1H 2010 Revenue & EBITDA Regional Analysis
1H 2010 Revenue & EBITDA Financial Regional Analysis Results Total Revenue EBITDA breakdown breakdown 18
Slide 19: Operating Costs
Operating Costs Financial Half Year Comparisons Results 19
Slide 20: Technology Costs
Technology Costs Financial Continued Investment to Maintain Strategic Advantage Results 20
Slide 21: Balance Sheet as at 31 December 2009
Balance Sheet as at 31 December 2009 Financial Results 21
Slide 22: Key Financial Ratios
Key Financial Ratios Financial Results EBITDA Interest Coverage Net Financial Indebtedness to EBITDA 22
Slide 23: Debt Facility Maturity Profile
Debt Facility Maturity Profile Financial Results 23
Slide 24: Capital Expenditure vs. Depreciation
Capital Expenditure vs. Depreciation Financial Results 24
Slide 25: Working Capital Management
Working Capital Management Financial Results 25
Slide 26: Return On Invested Capital vs. WACC and Return on Equity
Return On Invested Capital Vs. WACC and Financial Return on Equity Results 26
Slide 27: Equity Management – Interim Dividend of 14 cps (AU)
Equity Management – Interim Dividend Financial of 14 cps (AU) Results 27
Slide 28: Financial Summary – Final Remarks
Financial Summary – Final Remarks Financial Results › Record revenue, EBITDA, gross margin, operating cash flow and management EPS › The results of decisions made in the past two years (strategic acquisitions, combined with disciplined cost and capital expenditure management) are evidenced in the re
Slide 29: Market Overview, Financial Results, CEO's Report
Market Financial CEO’s Report Overview Results 29
Slide 30: CEO Presentation: Stuart Crosby
CEO Presentation CEO’s Report Stuart Crosby President & Chief Executive Officer 30
Slide 31: Group Strategy and Priorities
Group Strategy and Priorities CEO’s Report Our group strategy remains as it has been: › continue to drive operations quality and efficiency through measurement, benchmarking and technology › improve our front office skills to protect and drive revenue › continue to seek acquisition and other growth
Slide 32: Delivery Against Strategy
Delivery Against Strategy CEO’s Report Delivering on the first two limbs of the strategy (cost and revenue) has been a key factor in growing our profits: › operational productivity (and therefore margin) continues to trend upwards across the globe › returns from revenue initiatives have partially of
Slide 33: Priority - Lifting our Market Position
Priority - Lifting our Market Position CEO’s Report › We continue to enhance the quality of our operational and client directed processes › We continue to release a range of new and enhanced products across the full range of our businesses › Third party shareholder and issuer satisfaction surveys, a
Slide 34: Priority - Market Structure Projects
Priority - Market Structure Projects CEO’s Report › We continue to work on a range of market structure projects around the world - some are driven by brokers’ and custodians’ desire for back-office efficiencies - in these cases, the interests of our clients (issuers of securities) are often at risk,
Slide 35: USA Update
USA Update CEO’s Report › Excellent service levels and quality are being maintained across all businesses › The Computershare Fund Services mutual fund solicitation business had a very strong first half › The performance of the KCC bankruptcy administration business continues to exceed expectations,
Slide 36: Canada Update
Canada Update CEO’s Report › The corporate trust business is performing well, with balances showing strong growth and encouraging levels of bond issuance › M&A has been very slow, impacting both investor services and proxy solicitation. There have been some signs of improvement over the past quarter
Slide 37: EMEA Update
EMEA Update CEO’s Report › Investor Services UK competing strongly and revenues holding up well despite GFC-related client losses and reduced corporate actions - IPO activity increasing and winning more than our share › HBOS Employee Equity Solutions acquisition complete and now clear leader in UK P
Slide 38: Asia Update
Asia Update CEO’s Report › HK IPOs were the highlight for Asia – good volumes and reasonable participation levels drove strong revenues › Better capture of related revenue streams (eIPO, corporate actions, print management, etc) also helped › Market structure developments to reduce the reliance on p
Slide 39: Australia & New Zealand Update
Australia & New Zealand Update CEO’s Report › Strong levels of capital raising generally drove good corporate actions revenues and the Myer IPO was a highlight › Communication Services business had a disappointing mid 2009 but much more encouraging recently › The Government retreated from proposed t
Slide 40: Computershare Limited Half Year Results 2010 Presentation
Computershare Limited Half Year Results 2010 Presentation Stuart Crosby Peter Barker 10 February 2010
Slide 41: Appendix
Appendix: Half Year Results 2010 Presentation 10 February 2010 41
Slide 42: Appendix 1: Group Comparisons
Appendix 1: Group Comparisons Group Comparisons 42
Slide 43: CPU Revenues
CPU Revenues Financial Results 43
Slide 44: 1H 2010 Revenue Regional Analysis
1H 2010 Revenue Financial Regional Analysis Results 44
Slide 45: Revenue Half Year Comparisons
Revenue Financial Half Year Comparisons Results 45
Slide 46: Operating Costs Half Year Comparisons
Operating Costs Financial Half Year Comparisons Results 46
Slide 47: Underlying Effective Tax Rate
Underlying Effective Tax Rate Financial Results 47
Slide 48: Hedge Lifecycles
Hedge Lifecycles Financial Results Hedging of Long Term Sustainable Balances 100% 80% 60% 40% 20% 0% Jan-10 Jan-11 Jan-12 Jan-13 Total Hedging (derivatives, term deposits and floating rate debt) 48
Slide 49: Interest Rate Sensitivity
Impact Interest Rate Sensitivity Financial Results US$m PBT 80 Impact Reflects estimated contribution of derivatives and fixed deposits over the next twelve months 60 assuming cash rates remain unchanged. 40 20 0 -3.00% -2.50% -2.00% -1.50% -1.00% -0.50% Current 0.50% 1.00% 1.50% 2.00% 2.50% 3.00% -
Slide 50: Interest Rate Hedging
Interest Rate Hedging Financial Risk Management Results Interest Rate Hedging Current Strategy Continue to monitor medium term swap rates with the intention of accumulating cover should rates rise Policy - Minimum hedge of 25% / Maximum hedge of 100% - Minimum term 1 year / Maximum term 5 years - Cu
Slide 51: Risk Management – Average Funds Balances
Risk Management – Average Funds Balances Financial for half year ending 31 December 2009 Results * Average funds balance US$8.2b 51
Slide 52: Appendix 2: Country Summaries
Appendix 2: Country Summaries Financial Results Country Summaries 52
Slide 53: Australia Half Year Comparison
Australia Financial Half Year Comparison Results 53
Slide 54: New Zealand Half Year Comparison
New Zealand Financial Half Year Comparison Results 54
Slide 55: Hong Kong Half Year Comparison
Hong Kong Financial Half Year Comparison Results 55
Slide 56: India Half Year Comparison
India Financial Half Year Comparison Results 56
Slide 57: United States Half Year Comparison
United States Financial Half Year Comparison Results 57
Slide 58: Canada Half Year Comparison
Canada Financial Half Year Comparison Results 58
Slide 59: United Kingdom Half Year Comparison
United Kingdom Financial Half Year Comparison Results 59
Slide 60: Ireland Half Year Comparison
Ireland Financial Half Year Comparison Results 60
Slide 61: Germany Half Year Comparison
Germany Financial Half Year Comparison Results 61
Slide 62: South Africa Half Year Comparison
South Africa Financial Half Year Comparison Results 62
Slide 63: Russia Half Year Comparison
Russia Financial Half Year Comparison Results 63
Slide 64: Appendix 3: Assumptions
Appendix 3: Assumptions Financial Results Assumptions 64
Slide 65: Assumptions: Exchange Rates
Assumptions: Exchange Rates Financial Results Average exchange rates used to translate profit and loss to US dollars USD 1.00000 AUD 1.15886 HKD 7.75017 NZD 1.44504 INR 47.67861 CAD 1.08927 GBP 0.60997 EUR 0.68995 ZAR 7.65754 RUB 30.42774 AED 3.67258 CNY 6.82944 DKK 5.13507 SEK 7.16533 65