Slide 1: Acquisition of Wells Fargo Corporate Trust Services and Equity Raising
ACQUISITION OF WELLS FARGO CORPORATE TRUST SERVICES AND EQUITY RAISING Stuart Irving Nick Oldfield CEO and President Chief Financial Officer 24 March 2021 Not for distribution or release in the United States 1
Slide 2: Important notice and disclaimer
Important notice and disclaimer This investor presentation (Presentation) is dated 24 March 2021 and has been prepared by Computershare Limited (ABN 71 005 485 825) (Computershare or CPU) and approved for release to the ASX by the CPU Board. By attending an investor presentation or briefing, or acce
Slide 3: Important notice and disclaimer
Important notice and disclaimer Not financial product advice or offer continued Neither the entitlements nor the New Shares have been, or will be, registered under the U.S. Securities Act of 1933, as amended (U.S. Securities Act), or the securities laws of any state or other jurisdiction of the Unit
Slide 4: Important notice and disclaimer
Important notice and disclaimer Past performance Past performance, including past share price performance of Computershare and pro forma financial information given in this Presentation, is given for illustrative purposes only and should not be relied upon as (and is not) an indication of Computersh
Slide 5: Important notice and disclaimer
Important notice and disclaimer Disclaimer continued You represent, warrant and agree that you have not relied on any statements made by the Underwriters or any Underwriter Party in relation to the Entitlement Offer and you further expressly disclaim that you are in a fiduciary relationship with any
Slide 6: Contents
Contents 1 Transaction overview 6 2 Strategic rationale 11 3 Overview of Wells Fargo Corporate Trust Services 16 4 Financial impacts 20 5 Computershare trading update 23 6 The Entitlement Offer and transaction funding 25 A Appendices 29 6 Not for distribution or release in the United States
Slide 7: Computershare builds leading North American corporate trust business
Computershare builds leading North American corporate trust business ‒ CTS provides trust and agency services for corporate and government capital markets needs in the US ‒ Leading market share positions across all key products ‒ A portfolio of ~26,000 mandates with an average life of ~9 years, prov
Slide 8: Acquisition of CTS is a highly strategic, financially accretive transaction
Acquisition of CTS is a highly strategic, financially accretive transaction for Computershare Clear strategic fit, Increasing exposure to Stable, capital light, expanding North A market leading US long term growth in recurring revenue American corporate corporate trust position trust and securitisat
Slide 9: Compelling financial outcomes for Computershare shareholders
Compelling financial outcomes for Computershare shareholders ‒ 15%+ Management EPS accretive on a pro-forma FY21 basis1, including full run rate Management EPS synergies2 accretive ‒ Management EPS neutral on a pro-forma FY21 basis1, excluding synergies With full run rate synergies 1 %+ Attractive r
Slide 10: Funding plan
Funding plan Total capital deployed of US$1.0bn1 funded Total Capital Deployed: US$1.0bn through a combination of debt and equity ‒ US$372m of debt from new acquisition debt facilities US$257m Transaction & ‒ Pro-forma leverage (net debt / Management EBITDA) of Stand-up Capex, approximately 2.5x, wi
Slide 11: Contents
Contents 1 Transaction overview 6 2 Strategic rationale 11 3 Overview of Wells Fargo Corporate Trust Services 16 4 Financial impacts 20 5 Computershare trading update 23 6 The Entitlement Offer and transaction funding 25 A Appendices 29 11 Not for distribution or release in the United States
Slide 12: Building scale in corporate trust, a key growth strategy for Computershare
Building scale in corporate trust, a key growth strategy for Computershare Computershare’s corporate trust presence ‒ Computershare has been operating its CTS corporate trust business for 20 years Experience ‒ One of the largest operators in Canada with a smaller presence in US Conventional ‒ Transa
Slide 13: Acquisition expected to leapfrog Computershare to a top 4 position in US corporate trust market
Acquisition is expected to leapfrog Computershare to a top 4 position in the attractive US corporate trust market Attractive features of corporate trust market US corporate trust market ranking (2020)2 Conventional Debt Structured Products ‒ US$20 trillion of corporate trust assets under administrat
Slide 14: Significant opportunity to drive meaningful efficiencies
Significant opportunity to drive meaningful efficiencies Three main A Operations & IT B Shared services functions C Front office and other admin. categories of ‒ Transformation programs including ‒ Leveraging Computershare's global ‒ Front and middle office efficiencies deployment of new technologie
Slide 15: Acquisition enhances the proportion of high quality revenue
Acquisition enhances the proportion of high quality revenue in Computershare’s portfolio Revenue Mix by Business Revenue Mix by Type Revenue Mix by Geography 4% 6% 7% 11 % 23 % 8% 41 % 9% 13 % 52 % 27 % 77 % 21 % 5% 3% 8% 17 % 6% 6% 34 % 7% 9% including CTS 11 % 18 % 60 % 23 % 92 % 2 Issuer Services
Slide 16: Contents
Contents 1 Transaction overview 6 2 Strategic rationale 11 3 Overview of Wells Fargo Corporate Trust Services 16 4 Financial impacts 20 5 Computershare trading update 23 6 The Entitlement Offer and transaction funding 25 A Appendices 29 16 Not for distribution or release in the United States
Slide 17: CTS is a leading US corporate trust service provider
CTS is a leading US corporate trust service provider ‒ CTS offers trustee, agency and fiduciary/custody services in connection with securities ~9 years ~2,000 ~26,000 and related transactions backed by a variety of asset classes Avg. contract Full time Mandates expected life employees ‒ Established
Slide 18: High quality recurring trust fee revenue
High quality recurring trust fee revenue Trust Fees per CY half (US$m) ‒ Trust fees are durable and recurring in nature; derived from trustee, agency and fiduciary/custody services provided on long dated contracts 177.6 178.9 171.6 ‒ Generated from serving in variety of fee-based 170.1 capacities pe
Slide 19: Consistent long term growth in client balances
Consistent long term growth in client balances Average Client Balances per CY half (US$bn) NIM (% Deposits1) 0.8% 0.9% 1.1% 1.2% 1.1% 0.9% 0.5% 0.3% MMF Fees (% MMFs) 0.10% 0.11% 0.11% 0.11% 0.11% 0.10% 0.10% 0.09% 63.1 61.4 59.4 7.2 51.2 52.8 6.9 7.8 49.4 50.3 49.8 Exposed 6.9 14.8 9.9 8.2 7.7 7.4
Slide 20: Contents
Contents 1 Transaction overview 6 2 Strategic rationale 11 3 Overview of Wells Fargo Corporate Trust Services 16 4 Financial impacts 20 5 Computershare trading update 23 6 The Entitlement Offer and transaction funding 25 A Appendices 29 20 Not for distribution or release in the United States
Slide 21: Pro-forma income statement
Pro-forma income statement LTM to 31-Dec-20, US$ in millions1 CPU CTS Adjustments Pro-Forma Basis of preparation ‒ The pro-forma information is presented to show the impact of the CTS acquisition had it been acquired as of Fee Income 2,120.5 392.4 2,512.8 1 January 2020 Margin Income 138.9 84.9 223.
Slide 22: Pro forma balance sheet
Pro forma balance sheet As at Dec-20, US$ in millions1 CPU CTS Adjustments Pro forma Basis of preparation ‒ The pro forma balance sheet is presented to show the impact of the Current assets 1,491.1 55.7 115.0 1,661.8 A acquisition had it occurred as of 31 December 2020 ‒ Computershare prepares its f
Slide 23: Contents
Contents 1 Transaction overview 6 2 Strategic rationale 11 3 Overview of Wells Fargo Corporate Trust Services 16 4 Financial impacts 20 5 Computershare trading update 23 6 The Entitlement Offer and transaction funding 25 A Appendices 29 23 Not for distribution or release in the United States
Slide 24: Trading update – FY21 guidance unchanged
Trading update – FY21 guidance unchanged Maintain FY21 Management EPS to be down around 8%, pre-Entitlement Offer1 ‒ In constant currency, for FY21 we expect: ‒ Management EPS to be down by around 8%, on a pre-Entitlement Offer basis1 Guidance ‒ We expect Management EPS for 2H21 to be around 30.0 ce
Slide 25: Contents
Contents 1 Transaction overview 6 2 Strategic rationale 11 3 Overview of Wells Fargo Corporate Trust Services 16 4 Financial impacts 20 5 Computershare trading update 23 6 The Entitlement Offer and transaction funding 25 A Appendices 29 25 Not for distribution or release in the United States
Slide 26: Details of the offer
Details of the offer Offer Size and ‒ Underwritten 1 for 8.8 pro rata accelerated renounceable entitlement offer with retail entitlements trading to raise approximately Structure A$835 million / US$6341 million (“Entitlement Offer”) Use of ‒ Proceeds from the Entitlement Offer will be used to partia
Slide 27: The Entitlement Offer timetable
The Entitlement Offer timetable Event Date1 Trading halt and announcement of Entitlement Offer, Institutional Entitlement Offer opens Wednesday, 24 March, 2021 Institutional Entitlement Offer closes Thursday, 25 March, 2021 Institutional Entitlement Offer Shortfall book closes Friday, 26 March, 2021
Slide 28: Compelling strategic acquisition, firmly within Computershare's core competencies
Compelling strategic acquisition, firmly within Computershare’s core competencies • Clear strategic fit, expanding North American trust operations • CTS is a market leading corporate trust business, with top 4 market share positions across all key products • Adds stable, recurring revenue stre
Slide 29: Contents
Contents 1 Transaction overview 6 2 Strategic rationale 11 3 Overview of Wells Fargo Corporate Trust Services 16 4 Financial impacts 20 5 Computershare trading update 23 6 The Entitlement Offer and transaction funding 25 A Appendices 29 29 Not for distribution or release in the United States
Slide 30: A. Key risks
A. Key risks This section discusses some of the key risks associated with any investment in Computershare, which may affect the value of Computershare shares. The risks set out below are not listed in order or importance and do not constitute an exhaustive list of all risks involved with an investme
Slide 31: A. Key risks – strategic and regulatory risks
A. Key risks Strategic and regulatory risks Computershare operates in highly regulated markets around the world and its success can be impacted by changes to the regulatory environment and the structure of these markets. Many of Computershare’s key businesses are also subject to direct regulatory ov
Slide 32: A. Key risks – financial risks
A. Key risks Financial risks Computershare’s annual financial performance is underpinned by significant annuity style revenue. Such a revenue source cannot be assured, particularly if Computershare’s competitive position deteriorates and competitors offer better customer value propositions. There is
Slide 33: A. Key risks – operational risks
A. Key risks Operational risks Computershare relies on its information technology systems to perform functions that are crucial to its ability to service customers, including the processing of a high volume of daily transactions. Computershare also processes and transfers the personal and account in
Slide 34: A. Key risks – operational risks
A. Key risks Operational risks Computershare undertakes high volumes of transactional processes, some of which are complex. There is a risk that failure to process these transactions correctly could result in liabilities being incurred to third parties. Failure to maintain policies, processes and co
Slide 35: A. Key risks – operational risks
A. Key risks Operational risks Computershare’s mortgage servicing business in the United States of America provides advances to mortgagees when mortgagors fail to make payments on their loans or miss payments for tax and insurance. These advances are predominantly funded through external non-recours
Slide 36: A. Key risks – acquisition risks
A. Key risks Acquisition risks Completion of the Acquisition is subject to satisfaction or waiver of conditions precedent in the Asset Purchase Agreement, including regarding regulatory approvals (Approval from the Office of the Comptroller of the Currency under 12 C.F.R. § 5.53, the expiration or e
Slide 37: A. Key risks – acquisition risks
A. Key risks Acquisition risks Computershare is required to undertake an assessment of the fair value of the identifiable assets acquired and liabilities assumed (including contingent liabilities) of CTS at the date of the Acquisition. If this assessment is incomplete as at the end of a Computershar
Slide 38: A. Key risks – acquisition risks
A. Key risks Acquisition risks Certain mandates In the structured product sector, CTS acts as a back-up advancing agent. In certain circumstances arising from a primary servicer default, Computershare is required to advance funds to cover principal contain contingent and interest payments and other
Slide 39: A. Key risks – general investment risks
A. Key risks General investment risks There are general risks associated with investments in equity capital such as Computershare shares. The trading price of Computershare shares may fluctuate with movements in equity capital markets in Australia and internationally. This may result in the market p
Slide 40: A. Key risks – Entitlement Offer risks
A. Key risks Entitlement Offer risks Shareholders who do not take up all of their entitlement under the Entitlement Offer will be diluted in their percentage security holding by not participating to the full extent in the Offer. Risk of dilution This will be the case regardless of whether eligible r
Slide 41: B. Summary of underwriting agreement
B. Summary of underwriting agreement Computershare has entered into an underwriting agreement with the Underwriters (Underwriting Agreement), pursuant to which the Underwriters are acting as joint lead managers, underwriters and bookrunners of the Entitlement Offer subject to the terms and condition
Slide 42: B. Summary of underwriting agreement
B. Summary of underwriting agreement ‒ *an event or circumstance occurs or becomes known that would, in the reasonable opinion of the Underwriter, have required Computershare to give ASX a notice in accordance with section 708AA(12)(a) of the Corporations Act (as included in the Corporations Act by
Slide 43: C. International offer restrictions
C. International offer restrictions International Offer Restrictions This document does not constitute an offer of entitlements ("Entitlements") or new ordinary shares ("New Shares") of the Company in any jurisdiction in which it would be unlawful. In particular, this document may not be distributed
Slide 44: C. International offer restrictions
C. International offer restrictions Hong Kong WARNING: This document has not been, and will not be, registered as a prospectus under the Companies (Winding Up and Miscellaneous Provisions) Ordinance (Cap. 32) of Hong Kong, nor has it been authorised by the Securities and Futures Commission in Hong K
Slide 45: C. International offer restrictions
C. International offer restrictions Norway This document has not been approved by, or registered with, any Norwegian securities regulator under the Norwegian Securities Trading Act of 29 June 2007 no. 75. Accordingly, this document shall not be deemed to constitute an offer to the public in Norway w
Slide 46: C. International offer restrictions
C. International offer restrictions United Kingdom Neither this document nor any other document relating to the offer has been delivered for approval to the Financial Conduct Authority in the United Kingdom and no prospectus (within the meaning of section 85 of the Financial Services and Markets Act
Slide 47: D. Exchange Rates
D. Exchange Rates Currency FY20 USD 1.0000 AUD 1.4889 HKD 7.7999 NZD 1.5683 INR 71.9578 CAD 1.3391 GBP 0.7931 EUR 0.9030 RAND 15.5385 RUB 66.6767 AED 3.6729 DKK 6.7424 SEK 9.6389 CHF 0.9782 47 Not for distribution or release in the United States