Computershare Limited · ASX:CPU
Computershare — FY2015 Earnings Presentation
65 slides from Computershare's earnings presentation, Aug 12, 2015
Slide 1: Computershare Limited 2015 Full Year Results Presentation
Computershare Limited 2015 Full Year Results Presentation Stuart Irving Mark Davis 12 August 2015 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 FY15 Vs FY14 Earnings per share (post NCI) 27.61 cents Down 38.9% Management results are used, along with other measures, to assess operating business Total Revenues $1,984.0m Down 3.2% performance. The Company believes that Total Expenses $1,738.5m Up
Slide 5: Management Results Summary
Management Results Summary Introduction FY 2015 @ FY FY 2015 FY 2014 v FY 2014 2014 exchange rates Management Earnings per share (post NCI) US 59.82 cents US 60.24 cents Down 0.7% US 61.39 cents Total Operating Revenue $1,976.1 $2,022.6 Down 2.3% $2,051.8 Operating Costs $1,419.7 $1,480.9 Down 4.1%
Slide 6: Drivers Behind FY15 Financial Performance
Drivers Behind FY15 Financial Performance Introduction › Given a range of known headwinds entering FY15, underlying operating performance was sound with Management EBITDA up 2.5% against FY14 in actual terms and up 5.3% in constant currency. Management revenue was down 2.3% but up 1.4% in constant c
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; - quality excellence and operational e
Slide 8: Guidance
Guidance Introduction › Looking to the year ahead, the Company expects underlying business performance to be broadly similar to FY15, however, the translation impact of the stronger USD and the anticipated lower yields on client balances are again expected to be significant earnings headwinds. The b
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 to FY 2015 FY 2014 2H 2015 1H 2015 2H 2014 1H 2014 FY 2014 Sales Revenue $1,966.2 $2,011.4 (2.3%) $1,011.8 $954.4 $1,040.3 $971.1 Interest & Other Income $9.9 $11.2 (11.7%) $4.7 $5.1 $5.4 $5.8 Total Management Revenue $1,976.1 $2,022.6 (2.3%)
Slide 12: Management EPS
Management EPS Financial Results 70 60.24 59.82 60 54.85 50 40 US Cents 30.83 30.94 29.41 28.88 30 26.87 27.98 20 10 0 2013 2014 2015 1H 2H FY 12
Slide 13: FY15 Management NPAT Analysis
FY15 Management NPAT Analysis Financial Results 355 350 345 14.0 340 0.9 4.8 21.1 5.1 335 11.0 0.6 18.1 330 8.0 USD M 325 5.5 1.5 320 335.0 332.7 332.7 315 321.1 310 305 FY14 EBITDA - EBITDA - EBITDA - EBITDA - EBITDA - EBITDA - EBITDA - Tax Interest Dep'n & NCI FY15 NPAT USA Canada ANZ UCIA ASIA CE
Slide 14: Management Revenue & EBITDA Half Year Comparisons
Management Revenue & EBITDA Half Year Comparisons Financial Results 1,200 60% 1,037.5 1,045.7 1,016.5 987.6 976.9 1,000 959.5 50% Revenue & EBITDA USD M 800 40% Operating Margin % 29.0% 600 27.0% 30% 25.9% 27.3% 26.2% 24.4% 400 20% 294.8 268.4 267.0 273.6 259.3 241.4 200 10% 0 0% 1H13 2H13 1H14 2H14
Slide 15: Management Revenue Breakdown
Management Revenue Breakdown Financial Results % variance Revenue Stream FY 2015 FY 2014 2H 2015 1H 2015 2H 2014 1H 2014 to FY 2014 Register Maintenance $798.9 $821.9 (2.8%) $411.6 $387.3 $432.3 $389.5 Corporate Actions $144.2 $154.2 (6.5%) $71.4 $72.8 $77.0 $77.2 Business Services $519.1 $487.9 6.4
Slide 16: Management Operating Revenue Analysis
16 USD M 1,900 1,920 1,940 1,960 1,980 2,000 2,020 2,040 2,060 2,080 2,100 FY14 Operating Revenue 2,022.6 Register Maintenance 14.5 Corporate 0.9 Actions Business Services 40.7 Stakeholder 15.5 Relationship Mgt Employee 1.9 Share Plans Communication 1.8 Services Management Operating Revenue Analysis
Slide 17: Management Revenue & EBITDA – Regional Analysis
Management Revenue & EBITDA – Regional Analysis Half Year Comparisons Financial Results Revenue Breakdown EBITDA Breakdown 1,200 350 1,037.5 1,045.7 1,016.5 294.8 987.6 976.9 300 1,000 99.5 959.5 102.2 89.2 273.6 268.4 267.0 97.0 90.0 259.3 39.1 96.7 250 241.4 43.6 44.3 43.5 800 48.9 45.1 455.3 468.
Slide 18: Margin Income Analysis
Margin Income Analysis Financial Results 200 18 16.7 180 15.1 15.2 16 14.4 14.0 160 13.6 14 140 12 120.0 120 USD Billion 104.9 105.8 USD Million 10 100 86.8 89.4 86.4 8 80 6 60 4 40 20 2 0 0 1H13 2H13 1H14 2H14 1H15 2H15 Margin Income Average balances AVERAGE MARKET CASH RATES 1H13 2H13 1H14 2H14 1H
Slide 19: FY15 Client Balances Interest Rate Exposure
FY15 Client Balances Interest Rate Exposure Financial Results Average funds (USD 15.2b) held during FY15 CPU had an average of USD15.2b of client Exposure to funds under management during FY15. interest rates No exposure For 31% ($4.7b) of the FY15 average client 38% ($5.7b) funds under management,
Slide 20: FY15 Client Balances Interest Rate Exposure and Currency
FY15 Client Balances Interest Rate Exposure and Currency Financial Results Exposed Funds by Currency (FY15 Average Balances) Average exposed funds Average exposed funds balance prior to hedging balance net of hedging Other AUD AUD Other 5% ($0.4b) 2% ($0.2b) 4% ($0.2b) CAD 6% ($0.3b) 15% ($1.6b) CAD
Slide 21: Client Balances Fixed and Floating Rate Term Deposits
Client Balances Fixed and Floating Rate Term Deposits Financial Results 7,000 Floating Rate Deposits Fixed Rate Deposits 6,000 5,000 4,000 USD M 3,000 2,000 1,000 0 Jul-15 Jul-16 Jul-17 Jul-18 Jul-19 Fixed Rate Derivatives 2,000 Derivatives 1,500 USD M 1,000 500 0 Jul-15 Jul-16 Jul-17 Jul-18 Jul-19
Slide 22: Total Management Operating Costs
Total Management Operating Costs Half Year Comparisons Financial Results 900 800 768.9 771.6 746.3 709.2 720.7 699.0 700 168.3 196.2 193.4 164.9 181.2 165.0 600 500 USD M 400 300 577.9 578.3 572.7 544.3 534.0 539.5 200 100 0 1H13 2H13 1H14 2H14 1H15 2H15 Controllable Costs (excl COS) Cost of Sales (
Slide 23: Management Operating Costs
Management Operating Costs Half Year Comparisons Financial Results 450 373.2 370.4 361.6 352.1 351.5 342.4 400 350 300 USD M 250 196.2 193.4 181.2 168.3 165.0 164.9 200 131.9 129.4 118.8 117.8 123.1 117.3 150 100 47.7 39.6 38.3 43.3 37.4 37.1 41.4 34.5 39.2 37.3 31.0 30.3 50 0 Cost of Sales Personne
Slide 24: Technology Costs
Technology Costs Continued Investment to Maintain Strategic Advantage Financial Results 13.1% 14% 160 12.7% 12.4% 12.1% 11.8% 11.5% 12% 140 129.4 131.9 Technology costs as a % of revenue 6.2 123.1 5.7 117.8 118.8 117.3 120 4.9 10% 8.9 5.6 8.6 32.4 100 44.2 31.6 32.2 8% 30.2 30.3 USD M 80 6% 56.6 46.
Slide 25: FY15 Operating Cash Flow Analysis
FY15 Operating Cash Flow Analysis Financial Results 420 410 400 390 36.8 USD M 380 409.3 3.6 370 10.2 8.3 1.4 360 372.1 350 340 Net Operating Net Receipts & Loan Servicing Dividends & Interest Paid & Income Taxes Net Operating Cash Flow FY14 Payments Advances Interest Other Finance Paid Cash Flow FY
Slide 26: Capital Expenditure vs. Depreciation
Capital Expenditure vs. Depreciation Financial Results 30 25.6 25.6 25 23.9 1.6 1.7 2.0 5.6 7.8 20 USD M 3.8 12.9 0.8 15 13.0 0.6 0.9 10.3 9.5 1.3 10 0.3 1.5 0.6 0.9 1.3 2.7 15.3 14.6 2.6 5 10.2 7.6 6.4 4.9 0 1H13 2H13 1H14 2H14 1H15 2H15 Information Technology Communication Services Facilities Occu
Slide 27: Free Cash Flow
Free Cash Flow Financial Results 250 224.4 217.4 200.8 200 191.9 147.7 150 133.3 USD M 100 50 23.6 20.2 18.1 6.3 10.2 10.3 0 1H13 2H13 1H14 2H14 1H15 2H15 Operating Cash Flows Cash outlay on Capital Expenditure Note: Excludes assets purchased through finance leases which are not cash outlays. 27
Slide 28: Balance Sheet at June 2015
Balance Sheet at 30 June 2015 Financial Results Jun-15 Jun-14 Variance See ASX Appendix 4E as at 30 June USD M USD M Jun-15 to Jun-14 2015 for full details. Current Assets $1,227.8 $1,117.5 9.9% › Current assets increased due to higher cash balances and an Non Current Assets $2,573.6 $2,690.7 (4.3%)
Slide 29: Key Financial Ratios
Key Financial Ratios Financial Results Jun‐15 Jun‐14 Variance USD M USD M Jun‐15 to Jun‐14 Interest Bearing Liabilities $1,769.1 $1,659.3 6.6% Less Cash ($604.1)* ($509.0)* 18.7% Net Debt $1,165.0 $1,150.2 1.3% Management EBITDA $554.1 $540.6 2.5% Net Financial Indebtedness to EBITDA 2.10 times 2.13
Slide 30: 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 FY16 Dec-15 141.0 150.0 Apr-16 25.9 50.0 FY17 Mar-17 21.0 21.0 21.0 FY18 Jul-17 445.0 450.0 450.0 Feb-18 40.0 40.0 40.0 FY19 Jul-18 235.0 235.0 235
Slide 31: Working Capital Management
Working Capital Management Financial Results Days sales outstanding 50 48 48 46 45 45 45 42 40 35 30 No. Of Days 25 20 15 10 5 0 1H13 2H13 1H14 2H14 1H15 2H15 31
Slide 32: Return On Invested Capital vs. WACC and Return on Equity
Return On Invested Capital vs. WACC and Return on Equity Financial Results 35% 30% 28.01% 28.62% 25.80% 25% 20% 15.84% 16.38% 16.48% 15% 10% 8.97% 9.51% 9.46% 5% 0% FY13 FY14 FY15 WACC ROIC ROE • ROIC = (Mgt EBITDA less Depreciation less Income Tax expense)/(Total Debt add Total Equity less Cash). 3
Slide 33: Equity Management
Equity Management Final Dividend of 16 cents (AU) Financial Results EPS - Statutory US 27.61 cents EPS - Management US 59.82 cents Interim Dividend AU 15 cents (20% franked) Final Dividend AU 16 cents (25% franked) Current Yield* 2.6% * Based on 12 month dividend and share price of AU$11.96 (close 6
Slide 34: Financial Summary – Final Remarks
Financial Summary – Final Remarks Financial Results › Group earnings held up well in FY15 in the context of known headwinds, translation impact of strengthening USD and higher effective tax rate. › Overall revenue growth remained challenging, especially in context of unconventional monetary policy p
Slide 35: Introduction, Financial Results, CEO's Report
Financial CEO’s Introduction Results Report 35
Slide 36: CEO's Report: Stuart Irving
CEO’s Report Stuart Irving PRESIDENT & CHIEF EXECUTIVE OFFICER CEO PRESENTATION V1DIS
Slide 37: Group Strategy and Priorities
Group Strategy and Priorities CEO’s Report Our group strategy remains: › 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 operations quality
Slide 38: Delivery Against Strategy and Priorities
Delivery Against Strategy and Priorities CEO’s Report › Further refinements to our business portfolio were achieved with the HML acquisition opening up new opportunities in the UK mortgage servicing sector and the Valiant acquisition further strengthening our Canadian market position. › Divestitures
Slide 39: USA Update
USA Update CEO’s Report › Registry revenue was down impacted by both lower margin income and shareholder transaction volumes partially offset by the benefits of the Registrar and Transfer Company acquisition. › Client retention in all our businesses continues to be strong reflecting high client sati
Slide 40: Canada Update
Canada Update CEO’s Report › Investor Services achieved strong client retention and recent acquisitions helped underpin revenue growth, however IPO activity remains subdued and well below historical levels. › Significant cross border M&A activity benefited Corporate Actions in FY15. › The Valiant Tr
Slide 41: UCIA Update
UCIA Update CEO’s Report › UK Investor Services was voted number one in this year’s independent Capital Analytics survey of UK registrars underpinned by our heightened focus on front office initiatives. › With the Employee Share Plans recent European acquisitions now behind us, our focus has moved t
Slide 42: Continental Europe Update
Continental Europe Update CEO’s Report › The Employee Share Plans business continued to win clients across the region benefiting from the increased sales focus following the European organisational restructure. › The Italian Investor Services business performed well and also benefited from the succe
Slide 43: Asia Update
Asia Update CEO’s Report › The Investor Services business has seen continued growth due to new clients from recent period IPOs and higher meeting services revenues. › The Employee Share Plans business continued its strong growth trajectory, winning new clients and benefiting from increased trading a
Slide 44: Australia & New Zealand Update
Australia & New Zealand Update CEO’s Report › The Australian Investor Services business continued to hold its market leading position in FY15 in a highly competitive market. › During the year a number of high profile and complex corporate actions were successfully executed including the A$5.7billion
Slide 45: Computershare Limited 2015 Full Year Results Presentation
Computershare Limited 2015 Full Year Results Presentation Stuart Irving Mark Davis 12 August 2015 V1DIS
Slide 46: Appendix: 2015 Full Year Results Presentation
Appendix: 2015 Full Year Results Presentation 12 August 2015 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% 2% 1% 2% 1% 1% 1% 10% 10% 10% 10% 10% 8% 90% 12% 12% 11% 13% 13% 13% 80% 3% 4% 4% 3% 4% 2% 70% 24% 24% 25% 26% 27% 60% 23% 50% 9% 7% 8% 7% 8% 7% 40% 30% 20% 40% 41% 40% 41% 40% 40% 10% 0% 1H13 2H13 1H14 2H14 1H15 2H15 Register Maintenan
Slide 49: Management Revenue by Product
Management Revenue by Product Half Year Comparisons Financial Results 1,200 1,037.5 1,045.7 1,016.5 987.6 14.5 14.1 976.9 959.5 13.9 1,000 16.3 99.8 15.6 100.0 14.3 83.1 98.3 94.8 96.7 124.6 134.6 126.0 112.5 124.9 800 121.6 45.4 46.7 37.2 31.2 28.0 21.1 USD M 247.3 241.0 273.3 600 241.8 246.9 245.8
Slide 50: Management Revenue Half Year Comparisons
Management Revenue Half Year Comparisons Financial Results 500 432.3 429.4 411.6 450 394.7 389.5 387.3 400 350 273.3 300 247.3 246.9 245.8 241.8 241.0 250 USD M 200 134.6 126.0 124.9 124.6 121.6 112.5 150 100.0 99.8 98.3 96.7 94.8 92.8 83.1 77.2 77.0 76.6 72.8 71.4 100 46.7 45.4 37.2 31.2 28.0 21.1
Slide 51: FY15 Management Revenue Regional Analysis
FY15 Management Revenue Regional Analysis Financial Results 450 402.3 400 350 300 256.0 250 USD M 200 128.1 150 110.9 110.2 108.1 97.0 70.4 100 68.8 68.5 62.5 60.3 58.7 45.0 35.0 34.9 31.8 30.9 21.4 20.5 50 19.4 18.7 17.8 14.9 13.3 12.4 12.3 7.0 5.5 5.2 5.0 4.1 4.0 3.7 3.3 2.5 2.1 1.6 0.8 0.8 0.6 0.
Slide 52: Effective Tax Rate
Effective Tax Rate Statutory & Management Financial Results 40% The increase in the Group’s 35.3% statutory effective tax rate from 35% 21.8% to 35.3% is primarily driven by the asset impairment 30% of US$109.5m, which is not tax 26.1% deductible. 25% The increase in the Group’s 22.6% 21.8% 22.4% Ta
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 80 218.3 71.9 71.5 211.3 71.0 69.7 69.3 68.2 66.2 70 193.5 64.5 189.0 188.5 62.4 200 55.7 163.8 60 55.0 53.0 150 50 39.2 38.8 AUD M AUD M 37.0 35.8 40 100 30 22.1 19.3 18.9 18.3 16.7 16.1 15.7 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 200 183.8 183.3 400 177.9 180 161.2 160.8 350 156.6 160 292.8 282.6 300 264.6 140 247.6 231.7 225.0 250 120 HKD M HKD M 200 100 80 150 57.2 50.6 60 48.1 46.0 44.5 42.1 40.3 100 36.5 36.1 31.3 40 28.0 20.8 50 20 8.6 7.8
Slide 56: India Half Year Comparison
India Half Year Comparison Financial Results 1,400 Total Revenue Revenue Breakdown 1,600 1,451.3 1,414.8 1,140.5 1,200 1,299.1 1,041.8 1,400 1,255.4 1,246.3 1,127.5 940.0 1,000 895.8 1,200 870.1 723.0 1,000 800 INR M INR M 800 600 600 336.0 334.8 328.1 400 292.9 292.7 260.0 400 200 110.4 200 68.5 55
Slide 57: United States Half Year Comparison
United States Half Year Comparison Financial Results Total Revenue Revenue Breakdown 600 250 212.9 210.4 208.8 472.4 468.1 196.0 500 455.2 189.4 437.9 184.9 200 409.3 407.2 400 134.5 150 131.2 131.1 121.4 116.7 USD M USD M 300 107.0 100 200 48.8 38.8 37.9 37.9 36.6 50 35.0 34.3 34.1 34.0 33.2 32.2 3
Slide 58: Canada Half Year Comparison
Canada Half Year Comparison Financial Results Total Revenue Revenue Breakdown 120 50 46.6 110.3 46.3 108.8 106.6 103.5 43.2 45 41.3 40.2 96.9 94.0 39.0 100 38.7 38.7 40 37.2 35.6 34.8 32.7 35 80 30 CAD M 25 CAD M 60 20 15.0 40 15 11.2 10.6 9.6 9.5 9.5 9.0 8.9 8.7 8.5 8.2 10 7.8 20 3.3 3.2 3.1 5 2.7
Slide 59: United Kingdom & Channel Islands Half Year Comparison
United Kingdom & Channel Islands Half Year Comparison Financial Results Total Revenue Revenue Breakdown 60 49.2 140 50 114.5 40.6 120 39.6 39.1 94.0 40 33.7 33.3 100 89.2 31.9 87.8 31.3 82.4 79.8 30 GBP M GBP M 80 24.0 21.5 21.5 20.5 20.5 20.5 20.3 20.1 60 17.9 17.6 20 40 10 6.7 5.1 20 2.4 2.3 2.3 2
Slide 60: South Africa Half Year Comparison
South Africa Half Year Comparison Financial Results Total Revenue Revenue Breakdown 140 130.3 128.3 200 128.1 124.9 180 112.4 120 108.2 160 144.5 144.0 142.5 135.8 100 140 125.4 119.0 120 80 RAND M RAND M 100 60 80 60 40 40 20 20 7.8 7.8 7.7 7.4 7.2 7.1 6.0 5.4 4.8 3.5 3.5 3.4 2.9 2.4 0.6 0.4 0.3 0.
Slide 61: Germany Half Year Comparison
Germany Half Year Comparison Financial Results Total Revenue Revenue Breakdown 14 12.9 30 27.7 12.4 25.7 25.7 11.6 12 25 9.5 9.5 10 20 8.4 8.3 8.2 16.0 8 7.4 15.4 EUR M EUR M 15 12.9 6 10 4 3.4 2.9 2.3 2.3 2.3 2.2 2.1 2.0 1.9 1.7 5 1.7 1.5 2 1.2 1.2 1.1 0.9 0.8 0.7 0.7 0.6 0.5 0.4 0.3 0.1 0.1 0.1 0.
Slide 62: Russia Half Year Comparison
Russia Half Year Comparison Financial Results Total Revenue Revenue Breakdown 700 636.4 700 612.4 600 600 532.2 511.5 500 450.3 500 421.2 430.6 403.5 373.8 361.2 400 353.3 400 342.5 RUB M RUB M 300 300 200 200 100 100 20.5 20.3 19.7 18.7 17.9 17.7 3.8 2.9 0 0 1H13 2H13 1H14 2H14 1H15 2H15 Register M
Slide 63: Appendix 3: Assumptions
Appendix 3: Assumptions Financial Results Assumptions 63
Slide 64: Assumptions: Exchange Rates
Assumptions: Exchange Rates Financial Results Average exchange rates used to translate profit and loss to US dollars FY15 FY14 USD 1.0000 1.0000 AUD 1.19208 1.09422 HKD 7.75359 7.75614 NZD 1.28103 1.21756 INR 61.87461 61.56622 CAD 1.16655 1.07060 GBP 0.63239 0.61811 EUR 0.82950 0.73834 RAND 11.31205
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