Computershare Limited · ASX:CPU
Computershare — H1 2015 Earnings Presentation
64 slides from Computershare's earnings presentation, Feb 11, 2015
Slide 1: Half Year Results 2015 Presentation
Computershare Limited Half Year Results 2015 Presentation Stuart Irving Mark Davis 11 February 2015 V1DIS
Slide 2: Introduction and Financial Results
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 Management results are used, along with other measures, 1H15 Vs 2H14 Vs 1H14 (pcp) to assess operating business performance. The Company Earnings per share (post NCI) 2.79 cents Down 86.1% Down 88.9% believes that exclusion of certain items permits bett
Slide 5: Management Results Summary
Management Results Summary Introduction 1H 2015 @ 1H 2014 1H 2015 2H 2014 v 2H 2014 1H 2014 v 1H 2014 exchange rates US 28.88 US 30.83 US 29.41 US 28.79 Management Earnings per share (post NCI) cents cents Down 6.3% cents Down 1.8% cents Total Operating Revenue $959.5 $1,045.7 Down 8.2% $976.9 Down
Slide 6: Drivers Behind 1H15 Financial Performance
Drivers Behind 1H15 Financial Performance Introduction › Register Maintenance revenues were broadly flat compared to 1H14. There continues to be challenging conditions across many markets and lower shareholder activity has impacted the USA. Decreases have been largely offset by contributions from th
Slide 7: Computershare Strengths
Computershare Strengths Introduction › Leading 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 operationa
Slide 8: Guidance
Guidance Introduction › In August we said that we anticipated Management EPS for the full year FY15 to be around 5% higher than FY14 which we confirmed at our AGM in November. This guidance assumed that foreign exchange and interest rates remained at the levels that prevailed at that time. › While o
Slide 9: Introduction and Financial Results
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 to % variance to 1H 2015 2H 2014 1H 2014 2H 2014 1H 2014 Sales Revenue $954.4 $1,040.3 (8.3%) $971.1 (1.7%) Interest & Other Income $5.1 $5.4 (4.3%) $5.8 (11.5%) Total Management Revenue $959.5 $1,045.7 (8.2%) $976.9 (1.8%) Operating Costs $69
Slide 12: Management EPS
Management EPS Financial Results 70 60.24 60 54.85 49.09 50 40 US Cents 30.83 29.41 28.88 30 26.87 27.98 26.00 23.09 20 10 0 2012 2013 2014 2015 1H 2H FY 12
Slide 13: 1H15 Management NPAT Analysis
1H15 Management NPAT Analysis Financial Results 170 165 2.8 6.5 0.4 160 1.5 155 4.6 22.3 0.3 150 USD M 3.6 163.6 145 160.6 160.6 5.5 5.6 6.2 140 147.3 135 130 1H14 EBITDA - EBITDA - EBITDA - EBITDA - EBITDA - EBITDA - EBITDA - Tax Interest Dep'n & NCI 1H15 NPAT USA Canada ANZ UCIA ASIA CEU Tech & Ex
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 1,000 959.5 50% 781.4 Revenue & EBITDA USD M 800 40% Operating Margin % 600 27.3% 30% 27.1% 26.2% 27.0% 25.9% 23.9% 24.4% 400 20% 268.4 267.0 273.6 259.3 247.5 241.4 211.5 200 10% 0 0% 1
Slide 15: Management Revenue Breakdown
Management Revenue Breakdown Financial Results % variance to % variance to Revenue Stream 1H 2015 2H 2014 1H 2014 2H 2014 1H 2014 Register Maintenance $387.3 $432.3 (10.4%) $389.5 (0.6%) Corporate Actions $72.8 $77.0 (5.4%) $77.2 (5.7%) Business Services $245.8 $241.0 2.0% $246.9 (0.4%) Stakeholder
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 1,045.7 259.3 987.6 976.9 247.5 1,000 99.5 959.5 250 241.4 43.6 110.5 102.2 44.3 43.5 97.0 90.0 48.9 96.7 211.5 50.8 45.1 781.4 800 2
Slide 17: Margin Income Analysis
Margin Income Analysis Financial Results 200 18 16.7 180 15.4 15.1 16 14.4 14.0 160 13.6 14 140 12.1 12 117.4 120.0 120 USD Billion 104.9 105.8 10 USD Million 100 89.0 86.8 89.4 8 80 6 60 4 40 20 2 0 0 1H12 2H12 1H13 2H13 1H14 2H14 1H15 Margin Income Average balances AVERAGE MARKET INTEREST RATES *
Slide 18: 1H15 Client Balances Interest Rate Exposure
1H15 Client Balances Interest Rate Exposure Financial Results Average funds (USD 15.1b) held during 1H15 CPU had an average of USD15.1b of client Exposure to funds under management during 1H15. interest rates 37% ($5.6b) No exposure For 31% ($4.7b) of the 1H15 average client funds under management,
Slide 19: Client Balances Interest Rate Exposure and Currency
1H15 Client Balances Interest Rate Exposure and Currency Financial Results Exposed Funds by Currency (1H15 Average Balances) Average exposed funds Average exposed funds balance prior to hedging balance net of hedging Other AUD AUD Other 4% ($0.4b) 3% ($0.3b) 5% ($0.3b) 5% ($0.3b) CAD 16% ($1.7b) CAD
Slide 20: Client Balances Fixed and Floating Term Deposits
Client Balances Fixed and Floating Term Deposits Financial Results Including Fixed Rate Derivatives 7,000 Floating Rate Deposits Fixed Rate Deposits Derivatives 6,000 5,000 4,000 USD M 3,000 2,000 1,000 0 Jan-15 Jan-16 Jan-17 Jan-18 Jan-19 20
Slide 21: Total Management Operating Costs
Total Management Operating Costs Half Year Comparisons Financial Results 900 790.2 800 768.9 771.6 746.3 709.2 699.0 700 196.8 168.3 196.2 193.4 164.9 165.0 600 569.9 500 132.0 USD M 400 300 593.4 577.9 578.3 572.7 544.3 534.0 437.9 200 100 0 1H12 2H12 1H13 2H13 1H14 2H14 1H15 Controllable Costs (ex
Slide 22: Management Operating Costs
Management Operating Costs Half Year Comparisons Financial Results 450 373.2 370.4 365.9 361.6 352.1 400 342.4 350 290.4 300 USD M 250 196.8 196.2 193.4 168.3 165.0 164.9 200 132.0 131.9 129.4 123.1 122.6 118.8 117.8 150 89.9 100 60.6 47.7 44.3 43.3 41.4 39.2 38.3 37.4 37.3 37.1 36.9 34.5 30.3 20.7
Slide 23: Technology Costs
Technology Costs Continued Investment to Maintain Strategic Advantage Financial Results 14% 13.1% 160 12.7% 12.4% 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 5.7 117.8 118.8 120 7.2 4.9 10% 8.9 5.6 32.4 100 44.2 31.6 89.9 32.2 8% 45.8 30.2 USD M 2.9
Slide 24: 1H15 Operating Cash Flow Analysis
1H15 Operating Cash Flow Analysis Financial Results 250 200 61.1 150 0.0 0.5 6.3 10.2 USD M 100 191.9 147.7 50 0 Net Operating Net Receipts & Loan Servicing Dividends & Interest Paid & Income Taxes Net Operating Cash Flow 1H14 Payments Advances Interest Other Finance Paid Cash Flow 1H15 Received Cos
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 13.0 0.6 2.1 10.3 0.9 9.5 1.3 10 0.3 1.5 0.6 17.2 1.3 2.7 0.9 14.6 2.6 11.1 5 10.2 7.6 6.4 4.9 0 1H12 2H12 1H13 2H13 1H14 2H14 1H15 Information Technology Communic
Slide 26: Free Cash Flow
Free Cash Flow Financial Results 250 217.4 200.8 200 188.2 191.9 146.4 147.7 150 133.3 USD M 100 50 30.1 23.6 20.2 10.0 6.3 10.2 10.3 0 1H12 2H12 1H13 2H13 1H14 2H14 1H15 Operating Cash Flows Cash outlay on Capital Expenditure Note: Excludes assets purchased through finance leases which are not cash
Slide 27: Balance Sheet at December 2014
Balance Sheet at 31 December 2014 Financial Results Dec-14 Jun-14 Variance USD M USD M Dec-14 to Jun-14 Current Assets $1,057.9 $1,117.5 (5.3%) See CPU interim Financial Statements Appendix 4D as at 31 December 2014 for full details. Non Current Assets $2,569.9 $2,690.7 (4.5%) Total Assets, Liabilit
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 8 2.0 Times Times 13.2 6 1.5 2.92 2.86 2.72 9.5 10.2 2.47 8.6 2.26 2.13 2.28 4 7.3 7.7 8.4 1.0 2 0.5 0 0.0 1H12 2H12 1H13 2H13 1H14 2H14 1H15 1H12 2H12 1H13 2H13 1H14 2H14 1H15 D
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 Mar-15 124.5 124.5 124.5 FY16 Dec-15 93.3 150.0 FY17 Mar-17 21.0 21.0 21.0 FY18 Jul-17 434.3 450.0 450.0 Feb-18 40.0 40.0 40.0 FY19 Jul-18 235
Slide 30: Working Capital Management
Working Capital Management Financial Results Days sales outstanding 50 48 46 45 45 45 43 42 42 40 35 30 No. Of Days 25 20 15 10 5 0 1H12 2H12 1H13 2H13 1H14 2H14 1H15 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% 27.24% 25.80% 25% 22.34% 20% 16.38% 16.65% 15.84% 14.37% 15% 10% 8.97% 9.51% 9.33% 8.61% 5% 0% FY12 FY13 FY14 1H15 WACC ROIC ROE • ROIC = (Mgt EBITDA less Depreciation less Income Tax expense)/(Total Debt add Total
Slide 32: Equity Management – Interim Dividend of 15 cents (AU)
Equity Management Interim Dividend of 15 cents (AU) Financial Results EPS - Statutory US 2.79 cents EPS - Management US 28.88 cents Interim Dividend AU 15 cents (20% franked) Current Yield* 2.6% * Based on 12 month dividend and share price of AU$11.65 (close 9th Feb 2015). 32
Slide 33: Financial Summary – Final Remarks
Financial Summary – Final Remarks Financial Results › Despite the impact of previously flagged headwinds and the ongoing challenging trading conditions, Group earnings were only marginally lower than pcp. › Ongoing disciplined cost management continues to support results with new cost control measur
Slide 34: Introduction and Financial Results
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 Recent, albeit modest, acquisitions have been fully integrated and the synergies expected have been achieved along with high levels of customer retention. Limited opportunities in our traditional registry space remain. We have expanded our Loan S
Slide 38: USA Update
USA Update CEO’s Report › We continue to achieve strong client retention and satisfaction in Transfer Agency and Employee Share Plans; including clients of the recently acquired R&T business. › Continued low interest rates and a slower-than-anticipated rebound in completed M&A activity, especially f
Slide 39: Canada Update
Canada Update CEO’s Report › IPO activity remains well below historical levels but we are seeing an increase in new Exchange Traded Fund issuances. Client retention continues to be strong. Expansion of offshore operational activities (both transaction types and clients covered) continues. › Signific
Slide 40: UCIA Update
UCIA Update CEO’s Report › The integration of the Morgan Stanley Global Stock Plan business was completed successfully and on schedule in December 2014. › Transactional activity in Employee Share Plans is lower due to increased equity market volatility and fewer large vesting events occurring. Howev
Slide 41: Continental Europe Update
Continental Europe Update CEO’s Report › Agreed to purchase the issuer services business of Istifid S.p.A, the 3rd largest provider in the Italian market, to further strengthen our market leading position. › Despite political and competitive pressure in Russia increasing we had a strong 2nd quarter,
Slide 42: Asia Update
Asia Update CEO’s Report › The Investor Service business has seen continued growth in new clients from IPOs in recent periods. › The Employee Share Plans business continued to show strong growth. › Our Shareholder Analytics and Proxy business in China gained new clients and was helped by the increas
Slide 43: Australia & New Zealand Update
Australia & New Zealand Update CEO’s Report › The Australian Investor Services business continues to hold its market leading position. In addition to retaining a number of important clients, 1H15 saw some significant new registry client wins including QBE. › Computershare’s unique ability to provide
Slide 44: Computershare Limited Half Year Results 2015 Presentation
Computershare Limited Half Year Results 2015 Presentation Stuart Irving Mark Davis 11 February 2015 V1DIS
Slide 45: Appendix
Appendix: Half Year Results 2015 Presentation 11 February 2015 45
Slide 46: Appendix 1: Group Comparisons
Appendix 1: Group Comparisons Group Comparisons 46
Slide 47: Management Revenue Half Year Comparisons
Management Revenue Half Year Comparisons Financial Results 100% 3% 2% 2% 1% 2% 1% 1% 9% 10% 10% 10% 10% 10% 12% 90% 11% 12% 11% 13% 13% 13% 80% 11% 5% 3% 4% 3% 4% 2% 4% 70% 23% 24% 60% 19% 24% 25% 23% 26% 50% 9% 9% 9% 7% 8% 7% 8% 40% 30% 20% 43% 42% 41% 41% 40% 40% 40% 10% 0% 1H12 2H12 1H13 2H13 1H1
Slide 48: Management Revenue by Product
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 14.1 976.9 959.5 1,000 91.7 16.3 99.8 15.6 100.0 14.3 98.3 94.8 96.7 112.3 124.6 134.6 781.4 112.5 800 52.2 124.9 121.6 21.5 45.4 46.7 31.2 90.3 28.0 21.1 234.7 US D M 85.0 247.3 241.0
Slide 49: Management Revenue Half Year Comparisons
Management Revenue Half Year Comparisons Financial Results 500 440.6 432.3 429.4 450 394.7 389.5 387.3 400 334.2 350 300 247.3 246.9 245.8 241.8 241.0 234.7 250 USD M 200 148.3 134.6 124.9 124.6 121.6 112.5 112.3 150 100.0 99.8 98.3 96.7 94.8 92.8 91.7 90.3 88.7 85.0 77.2 77.0 76.6 72.8 100 67.4 52.
Slide 50: 1H15 Management Revenue Regional Analysis
1H15 Management Revenue Regional Analysis Financial Results 250 189.4 200 150 121.4 USD M 100 64.4 62.9 54.3 52.3 49.4 37.4 32.3 50 32.2 30.2 28.5 21.6 20.0 18.5 16.4 15.6 14.3 13.6 11.2 10.7 8.7 8.7 6.9 6.5 5.8 3.8 3.8 3.1 2.9 2.3 1.6 1.6 1.6 1.5 1.2 1.1 0.7 0.5 0.5 0.3 0.0 0 Register Corporate Bus
Slide 51: Effective Tax Rate
Effective Tax Rate Statutory & Management Financial Results 70% 63.3% 60% The Group’s effective statutory tax rate is 63.3% for the half 50% year ended 31 December 2014. The Group’s effective statutory tax rate for the comparative prior period was 19.4%. Tax Rate % 40% The increase in the group’s 30
Slide 52: Appendix 2: Country Summaries
Appendix 2: Country Summaries Country Summaries 52
Slide 53: Australia Half Year Comparison
Australia Half Year Comparison Financial Results Total Revenue Revenue Breakdown 250 80 74.7 71.9 218.3 71.5 71.0 69.7 211.3 69.3 68.2 67.8 66.2 70 198.1 64.5 63.9 193.5 189.0 188.5 187.9 200 56.5 55.7 60 53.0 50 150 39.2 38.8 AUD M AUD M 37.0 35.8 40 35.3 100 30 22.1 20.4 18.9 18.3 17.2 16.7 16.3 1
Slide 54: Hong Kong Half Year Comparison
Hong Kong Half Year Comparison Financial Results Total Revenue Revenue Breakdown 400 200 183.8 177.9 180 350 161.2 160.8 159.4 157.7 156.6 160 282.6 300 264.6 253.9 140 247.6 231.7 226.8 225.0 250 120 HKD M HKD M 200 100 72.5 80 150 50.6 60 48.1 46.2 46.0 42.1 100 40.3 36.5 36.1 31.3 40 28.0 20.8 16
Slide 55: India Half Year Comparison
India Half Year Comparison Financial Results Total Revenue 1,400 Revenue Breakdown 1,600 1,451.3 1,140.5 1,200 1,299.1 1,255.4 1,400 1,246.3 1,127.5 940.0 1,200 1,000 895.8 1,018.5 870.1 998.0 1,000 723.0 800 660.0 INR M 632.5 INR M 800 600 600 356.1 336.0 334.8 330.6 400 292.9 292.7 260.0 400 110.4
Slide 56: United States Half Year Comparison
United States Half Year Comparison Financial Results Total Revenue Revenue Breakdown 600 250 215.1 210.4 208.8 196.0 468.1 500 189.4 455.2 452.5 184.9 200 437.9 409.3 407.2 400 150 131.2 131.1 121.4 116.7 USD M USD M 112.5 112.0 300 107.0 217.7 100 200 48.8 45.2 40.0 38.8 37.9 37.9 50 35.0 34.4 34.3
Slide 57: Canada Half Year Comparison
Canada Half Year Comparison Financial Results Total Revenue Revenue Breakdown 120 50 46.7 46.3 110.2 108.8 106.6 103.5 43.2 45 41.3 98.6 40.2 96.9 39.0 94.0 38.7 100 38.1 37.8 40 37.2 36.8 35.6 34.8 32.7 35 80 30 CAD M CAD M 60 25 20 15.0 40 12.3 15 11.0 10.6 9.6 9.5 9.5 9.0 8.7 8.6 8.5 8.2 10 7.8 7
Slide 58: 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 89.2 33.7 33.6 87.8 35 31.9 90 82.5 82.4 31.3 79.8 76.1 28.7 80 30 70 24.0 25 21.5 21.0 GBP M 20.7 GBP M 20.5 20.5 20.5 20.3 60 20.1 19.7 19.2 17.9 17.6 20 50 40 15 3
Slide 59: South Africa Half Year Comparison
South Africa Half Year Comparison Financial Results Total Revenue Revenue Breakdown 130.3 200 140 128.3 128.1 124.9 123.6 117.7 180 112.4 120 160 144.5 144.0 142.5 138.0 135.8 130.3 100 140 125.4 120 80 RAND M RAND M 100 60 80 60 40 40 20 7.8 20 7.8 7.5 7.4 7.2 7.2 7.1 6.0 5.4 4.8 3.8 3.5 3.5 3.4 2.
Slide 60: Germany Half Year Comparison
Germany Half Year Comparison Financial Results Total Revenue Revenue Breakdown 14 30 27.7 27.1 12.4 25.7 11.6 12 25 10.4 9.5 10 20 8.4 8.4 8.3 8.2 16.0 8 7.4 15.4 EUR M EUR M 14.8 15 6.2 12.9 6 4.8 10 3.5 4 3.4 2.9 2.3 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 1.2 1.1 0.9 0.8 0.8 0.7 0
Slide 61: Russia Half Year Comparison
Russia Half Year Comparison Financial Results Total Revenue Revenue Breakdown 600 600 532.2 511.5 500 500 450.3 430.6 421.2 418.5 403.5 393.5 373.8 400 363.4 361.2 353.3 400 342.5 340.1 RUB M RUB M 300 300 200 200 100 100 25.0 23.3 20.5 19.7 18.7 17.9 17.7 2.9 0.0 0.0 0.0 0.0 0 0 Register Maintenanc
Slide 62: Appendix 3: Assumptions
Appendix 3: Assumptions Financial Results Assumptions 62
Slide 63: Assumptions: Exchange Rates
Assumptions: Exchange Rates Financial Results Average exchange rates used to translate profit and loss to US dollars 1H15 1H14 USD 1.0000 1.0000 AUD 1.10921 1.08746 HKD 7.75365 7.75463 NZD 1.22548 1.24547 INR 60.96397 62.31423 CAD 1.10205 1.04514 GBP 0.60963 0.63533 EUR 0.7702 0.74692 RAND 10.83311
Slide 64: 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