COMPUTERSHARE LIMITED. — Call Transcript 2021

Dec 14, 2021

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Computershare Limited

MARKET ANNOUNCEMENT

ABN 71 005 485 825 Yarra Falls, 452 Johnston Street Abbotsford Victoria 3067 Australia PO Box 103 Abbotsford Victoria 3067 Australia Telephone 61 3 9415 5000 Facsimile 61 3 9473 2500 www.computershare.com

Date:	15 December 2021
To:	Australian Securities Exchange
Subject:	Financial disclosure review –Conference call script

Attached is a script of the presentations delivered by the CEO and CFO at Computershare’s financial disclosure review conference call held at 10am on 15[th] December 2021.

For further information contact:

Michael Brown Investor Relations Ph +61 (0) 400 24 8080 michael.brown@computershare.com.au

This announcement was authorised to be given to the ASX by the Group CEO

For more information, visit www.computershare.com

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CPU Financial Disclosure Review

December 15th 2021 - Conference Call Script

Stuart Irving, Chief Executive Officer and President

Good morning all, and thank you for joining us on this conference call today.

Nick Oldfield, our CFO, and I will take you through the new Financial Disclosure Review pack we released to the ASX last night. This pack aims to upgrade our financial reporting for investors. It’s the next step in our commitment to continuously improving the transparency and the user friendliness of our financial reporting.

A couple of years back, we worked on making the story in the front section of the results pack clearer and simpler.

We have now moved on to making the more detailed data in the appendix easier to use, and we sought and received some great feedback in this process. You wanted to see results in actual FX, others said we had lots of data but not all in the right places and they had to churn through the footnotes. And some also said it was tricky to interpret the underlying data in our bar charts and wanted to see the data in tables.

That was all very constructive feedback and we hope the end result here makes your life easier, especially late at night in reporting season. So, for those of you that assisted in this journey, a big thank you for your time.

So, what is new, and what have we done?

First, we have increased the amount of financial disclosure we are providing. There is new information on historical business segment P&Ls, reporting in actual FX and more detail on margin income and sensitivity analysis, for example.

We have also maintained all of the original data we provided. But we have presented this in much easier to use formats. The new pack is designed to be the single go-to place for all of our financial reporting.

What’s not in the pack?

Well, there is no commentary on current trading, or any changes to our outlook and guidance. That’s still intact. We report first-half results on February 9[th] and we will cover all that ground then. Nor have we restated any historical results or business segments. That consistency is important.

All of this information will also be downloadable in Excel via the investor section of our website. So, I would close by saying, please work your way through the materials at your own pace, and if any of you would like a follow-up call please let Michael know and we’d be pleased to connect.

Thank you once again for all your input and I’ll hand over to Nick to take you through the pack.

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Nick Oldfield, Chief Financial Officer

Thank you, Stuart and good morning, everyone.

I am going to keep my comments on slide 3, our contents page.

Here, in the middle column, you can see what has changed in our deck and, in bold, what the new disclosures are.

I will now run through what you can see on the key slides.

First, on slide 8, we show the key financial highlights over the last 10 halves. This slide is a regular part of our deck; however, it does provide a good summary of our long-term track record on one page. We have also now added in the weighted average number of shares by period, as we have noticed a few differences in people’s calculations here.

The next slide I will call out is slide 13. This is new disclosure – a full P&L breakdown for our key business segments, in actual currency, over the last six halves or three financial years. In all our recent investor outreach, this was a common request for this level of detail and at actual rates and we are happy to provide it. And then on slides 13-18 we show the same P&L format for each of our six business segments.

Importantly, this all is then readily reconcilable to the full management P&L we include at slide 9 and the statutory P&L reconciliation we show on slide 28.

And then to supplement the six business segments, we also show break outs of some of the individual P&Ls – Employee Share Plans, UK & US Mortgage Servicing - in the same format over slides 19-21.

The next new disclosure item is on slide 27 which breaks down our management revenues, taking out the impact of acquisitions and disposals, the UKAR fixed fee in UK Mortgage Servicing and margin income to show our underlying organic revenue performance.

I would now like to turn to margin income. This was another key topic highlighted to us where some additional insight was requested. Margin income is covered in slides 31-35 but let me call out some of the key points to note as you work through these slides:

Slide 31 is not new but we now provide client balance data in table format, making it much easier for investors to transpose into their models.

On the contrary, slide 32 is new. Here we show margin income split by exposed and nonexposed, we then split the exposed into hedged and non-hedged income, giving much greater transparency into the earnings we generate from our hedging activities. We then breakdown average yield across the various categories.

There is one point to draw out on slide 32. At the end of FY20, we unwound some hedges; however, the benefit derived from those hedges is amortising through the P&L over the period through to FY24. Accordingly, in the line at the bottom of the table, we strip out this benefit to show the underlying hedge performance right now.

Slide 34 shows our hedge book as at June 30th 2021 and how it runs off. Now, this isn’t totally new disclosure – we previously showed it as a bar chart. We now provide it in table

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form to make it easier to interpret and we also provide the breakdown by currency so you can see where that hedge book is.

And then on slide 35, we show some of the key sensitivities to margin income – if interest rates or our exposed balances change, or if the sterling or Canadian FX rates moved. The key points here:

One, in this slide, we are applying these sensitivities to our FY21 numbers.

Two, the sensitivities are applied to legacy balances only – there is no reflection of CCT in this slide but as we move forward, we will update these sensitivities to factor CCT balances in.

And then in terms of how to interpret the numbers, the bullet points below the table set that out for you but to be clear on some of the key points: if rates in FY21 had been 25 bps higher, margin income would have been $26.3m higher at $133.3m and overall EBIT would have been $26.3m higher. If rates had been 25 bps higher and exposed balances 10% higher, margin income would have been $38.4m higher at $145.4m and management EBIT would have been $38.4m higher as well.

So that concludes the key highlights of the pack. I will just wrap up with a couple of closing remarks:

As Stuart said at the outset, we really appreciate all the feedback we received prior to updating this deck. Thank you again to all of you who assisted, and we hope this updated pack addresses your comments.

There is no reduction in disclosure here – on the contrary, we have sought to expand disclosures where appropriate.

All of the data in the deck readily reconciles to the management P&L and down through the statutory P&L, all of which is included in the pack.

And finally, to reiterate, all the data is available to download on our website.

Thanks again for listening, I will now handover to Michael to co-ordinate the Q&A session.