COMPUTERSHARE LIMITED. — Annual Report 2003

Aug 27, 2003

Financial Year 2003 Results Presentation

28 August 2003

Market Overview and Financial Results

Tom Honan Chief Financial Officer

Summary of results

• $\triangleright$ Normalised EPS 6.1 cents
• $\triangleright$ EBITDA in line with guidance at \$133.9 m
• $\triangleright$ Reduction of over \$60 m in operating costs 10% on an annualised basis
• $\triangleright$ Generated operating cash flows of \$76.2 m
• $\triangleright$ Capital Expenditure of \$17.9 m, 68% down on prior year
• $\triangleright$ Share Buy-Back 18.7 m shares acquired at an average of \$2.05

Commercien

• $\triangleright$ Final ordinary share dividend 2.5 cents, fully franked
• $\triangleright$ Net Debt \$77.7 m, Funding Capacity of A\$250 m

Context of the Results

• $\triangleright$ Normalised EBITDA in line with guidance, higher end of expectations
• $\triangleright$ Revenues impacted by slow down in corporate actions activity and low interest rates
• $\triangleright$ Operating cost savings of \$60 m, in excess of revenue declines
• $\triangleright$ Continued spend on Technology development
• $\triangleright$ Restructuring costs of \$35.1 m, providing ongoing savings of \$22.7 m per year
• $\triangleright$ Capital expenditure down 68%

This presentation is structured around the following framework

CPU Revenues are driven by multiple factors

Revenue type

□ Register Maint. & Recoveries □ Corporate Actions ■ Margin Income □ Non Registry

■ Other

Revenue	Driver	Risk mitigation
Register Maint. & Recoveries	Growth in clients and holders	Retain existing clients, win market share
Corporate Actions	Market conditions, M&A activity	Win new business: link to key stakeholders, clients
Margin Income	Interest rates, hedging balances	Hedging, flow on effect from Maintenance & Corp Actions
Non-Registry	Growth in non- registry businesses	Increase proportion on non-registry business

Market Overview

Market Overview

Global Equities Market

Market Overview

Global Interest Rate Market

íO

Q

Financial Results

Group Financial Performance

A\$m's

Revenue	2003	2002	%Difference
Registry maintenance	334.0	358.3	(6.8%)
Corporate actions	43.6	58.0	(24.7%)
Margin income (including sharesave admin)	63.7	71.3	(10.7%)
Non Registry fees/sales	145.6	147.2	$(1.1\%)$
Recoveries	107.5	121.1	$(11.2\%)$
Interest income	3.6	4.2	(13.9%)
Other	10.5	20.9	(49.7%)
Total Revenue	708.6	781.0	(9.3%)
Operating costs	572.7	633.4	$(9.6\%)$
Share of losses of associates	2.0	0.0
EBITDA	133.9	147.6	(9.3%)
Depreciation and amortisation	29.5	25.3	16.7%
Amortisation of goodwill	31.3	29.9	4.7%
Borrowing costs	8.3	10.2	$(18.4\%)$
Other	0.3	(1.5)
Non-recurring items	35.1	0 0
Pre tax Profit	29.5	83.7	$(64.8\%)$
Income tax	12.3	26.0	(52.6%)
NPAT before OEI	17.1	57.8	(70.3%)
NPAT after OEI	16.3	71.3	(77.2%)
Normalised NPAT after OEI	41.1	57.9	(29.0%)

Financial Results

Half Year Comparison

Restructuring costs of \$35.1 m will provide ongoing cost savings of \$22.7 m per annum

	Restructure Costs	Annualised Savings	Savings realised in FY 03
Redundancies	23.2	21.2	3.5
Property write offs	9.7	0.3	0.0
Other restructure costs 2.2		1.2	0.0
Total	35.1	22.7	3.5

Analysis of NPAT

Explanation

• Normalised NPAT for FY'03 was \$41.1 m

• Normalised NPAT for FY'03 after tax losses written off was $$45.8 m$

Note: Actual NPAT + Non-Recurring + Tax losses written off = Normalised NPAT

Effective Tax Rate

• $\triangleright$ Headline effective tax rate FY'03 41.8% (FY'02 31.0%)
• $\triangleright$ Normalised headline effective tax rate FY'03 20.7% (FY'02 $31.0\%$
• $\triangleright$ Headline rate adversely affected by benefit of losses not brought to account \$6.2 m

Financial
Results

Headcount

Headcount*

Geographic Breakdown

• $\blacktriangleright$ Gross reduction of 575 FTE_s
• $\triangleright$ Redundancy programs in Australia, UK, Canada & South Africa
• $\blacktriangleright$ Headcount increases in high growth businesses (i.e. Non Registry)

Computershore

* Headcount excludes Technology and Corporate Services

Technology Costs - Establishing Global Platform

All $A\$ fm – internal cash costs only All technology costs are expensed Major events:

• SCRIP implementation: US, Canada, ➤ South Africa and Hong Kong
• Global Options system development ≻ (including BP)

Analysis of Technology Costs

Analysis of Technology Costs

Balance Sheet Strength

Net Debt / Equity	$\equiv$	$13.2\%$
Net Debt	$\equiv$	A\$ 77.7m
Committed Debt facility	$\equiv$	A\$ 250m

Net Debt / Equity has increased as a result of the share buy-back, increased dividends and business acquisitions and investments.

Financial Results

Cash Flow

Capital Expenditure down 68% from June '02

	CPU Group Capex A\$M
Occupancy	1.7
Document Services Facilities	1.0
Information Technology	12.8
Other	2.4
TOTAL	17.9

Working Capital Management Improving but not enough

Financial Results

Margin Income - Interest Rate Sensitivity

Margin Income Exposure

Risk Management - Funds Balances at 30 June 2003

FY03 average balance range A\$3.1b - A\$5.4b

Risk Management - Interest Rate Sensitivity

Equity Management – Fully Franked Final Dividend of 2.5 cps

• EPS Normalised 6.1 cents $\blacktriangleright$
• Dividend $\blacktriangleright$ 5.0 cents per year
• Current yield * $2.6%$ ➤
• Franking Benefit Total return $3.7\%$ ➤
• * Based on share price of A\$ 1.90

Financíal Results

Equity Management - Share Buy Back

• $\triangleright$ Commenced 11^th September 2002
• $\triangleright$ Acquired 18,710,000 shares
• $\triangleright$ Average price A\$2.05
• $\triangleright$ Completed 11^th March 2003

Financial Summary

• $\triangleright$ EBITDA strong given market conditions
• $\triangleright$ Significant cost reductions
• $\triangleright$ Capex down 68% on last year
• $\triangleright$ Working capital slowly improving
• $\triangleright$ Share buy back, increased dividends
• $\triangleright$ Substantial debt capacity
• $\triangleright$ Major improvement in reporting time frames and quality

CEO's Report

Chris Morris Chief Executive Officer

• $\triangleright$ Reducing costs
• $\triangleright$ Use of technology to gain sustained efficiencies
• $\triangleright$ Implementation of a client-centric model
• $\triangleright$ Board structure
• $\triangleright$ Our people

• $\triangleright$ Reduction in operating costs of 10%
• $\triangleright$ Gross reduction in FTE numbers of 575
• $\triangleright$ Capital expenditure down by 68%
• $\triangleright$ On-going cost base reduced substantially
• $\triangleright$ Businesses now positioned to withstand further decline and/or benefit from increase in market activity/interest rates

• ▶ Migrated systems in US/Canada/South Africa/Hong Kong
• $\triangleright$ Global options management and dealing platform
• $\triangleright$ Total redesign of web site
• $\triangleright$ New global platform live
• $\triangleright$ Workflow allowing flexibility in operations

Client focussed teams

Shared services across all businesses

≻P&L accountability

Management of the Business

Asia/Pacific

• $\triangleright$ Won majority of IPO's in Australia
• $\geq$ 50% increase in holders under management (Fixed Interest)
• $\geq$ 22% increase in value of employee plans under management

Regional Highlights

Kommunadur

North America

• $\triangleright$ Acquired Fifth Third Bancorp registry and plans businesses (retained all clients – no additional staff)

• Acquired Charles Schwab Employee stock Purchase Plan business

• $\triangleright$ Independent customer surveys place Computershare No 1 in service quality
• $\triangleright$ Dealing service volumes for employee plans up 80%

EMEA Region

• $\triangleright$ Acquired 27% Computershare Pepper AG (option on a further 10%)
• ▶ Acquired 30% National Registry Company of Russia
• $\triangleright$ Plans Business strong growth

• $\triangleright$ 5 Australia
• $\geq 2$ USA
• $\triangleright$ 1 United Kingdom
• $\triangleright$ 6 Non Executive

$\triangleright$ Chris Morris CEO $\triangleright$ Rob Chapman (New) EMEA North America $\triangleright$ Steven Rothbloom ≻Stuart Crosby Asia/Pacific $\triangleright$ Paul Tobin Legal Counsel $\triangleright$ Paul Conn Global Services $\triangleright$ Tom Honan CFO ≻Penny Maclagan Technology Services

	Asia / Pacific	EMEA	NA
Time Zone	S. Crosby	*R. Chapman	S. Rothbloom
Business Development & Marketing	*W.Angus	TBA	*M. Deleray
Finance	*T.Ristevski	D.Corney	*S.Tulloch
Operations	*G.Giannini	*K.Rayner	*W.Newling

* Appointed FY2002/03

FOCUS FOR THE YEAR

• $\triangleright$ To complete the restructure in Canada
• $\triangleright$ To re-engineer the business in the UK
• $\triangleright$ Leverage off our global reach
• $\triangleright$ Improve and extend our cross selling opportunities
• $\triangleright$ Continue to achieve cost reductions
• $\triangleright$ Seek to acquire related businesses

Key drivers for increased profitability continue to be interest rates and corporate actions

▶ EBITDA in range \$140 million to \$160 million

Financial Year 2003 Results Presentation

28 August 2003

Appendix A

Revenue Breakdown by Country

Competitive Environment

	Clients	Competitors
Australia	1,209	APRL
New Zealand	266
Hong Kong	416
UK	682	Lloyds, Capita
Ireland	175
South Africa	582
USA	1,245	BoNY, DST, Mellon
Canada	2,289	CIBC Mellon

Australia - Half Year Comparison

New Zealand - Half Year Comparison

Hong Kong - Half Year Comparison

United Kingdom - Half Year Comparison

Ireland - Half Year Comparison

South Africa - Half Year Comparison

United States - Half Year Comparison

Canada - Half Year Comparison