COMPUTERSHARE LIMITED. — Earnings Release 2004

Aug 18, 2004

Financial Year 2004 Final Results Presentation

$\blacktriangleleft$

19 August 2004

Market Overview and Financial Results

Tom Honan Chief Financial Officer

Summary of Results

• $\triangleright$ Normalised EPS (pre goodwill) of 19.0 cents, up 61%.
• $\triangleright$ Operating Cash Flows of \$136.1m, up 79%.

• Total revenue of \$894.7m, up 24% or up 5% excluding FY04 acquisitions.

• ▶ Operating Costs (excluding FY04 acquisitions, & cost of sales) of \$457.8m, down 1%.
• $\triangleright$ Days Sales Outstanding at 57 days.
• $\triangleright$ Final dividend increased to 5 cents per share (fully franked)

Context of Results

• $\triangleright$ Significant gains in Revenue, Net Profit, Earnings per Share and Cash Flows.
• $\triangleright$ Increased revenues reflect improved market conditions (especially in the Asia Pacific region) and the contribution
  from FY04 acquisitions.
• $\triangleright$ Significantly improved profit contribution from North America.
• $\triangleright$ Delivered expected cost savings from FY03 restructuring.
• $\triangleright$ Continued focus on capital management.

This presentation is structured around the following framework

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CPU Revenues are driven by multiple factors

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Revenue Type

ဂြ

Revenue	Diffusi	Risk mitigation
Register Maintenance	Growth in clients &	Retain existing clients, win
	holders	market share
Corporate Actions	Market conditions & M&A	Win new business; link to
	activities	key stakeholders, clients
Investor Relations	Growth in products &
Services	clients.	Leverage from existing
	Governance	clients, win new clients &
Employee Share Plans	Growth in clients	develop new products &
Document Services	Growth in comercial	service offerings
	clients & support internal
	business.
Mutual Funds	Growth in clients.	Broaden service range
	Governance

Register Maintenance

E Corporate Actions

Im Investor Relations Services

Employee Share Plans

Document Services

Mutual Funds

■ Technology & Other Revenue

Global Equities Market

Historical Equity Issuance Data

Annual M & A Book to Bill Ratio

Source: SDC Thomson Financial and UBS Securities Australia Ltd

$\triangleright$ CPU impact mainly felt in Australia and Hong Kong.

Global Interest Rate Market

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• $\triangleright$ Recurring Revenue >70% of revenue is of a recurring nature.
• $\triangleright$ Global Diversification across more than 15 countries.
• $\triangleright$ High Margins EBITDA margins > 20% and increasing.
• $\triangleright$ Low Capital Requirements Capex $\leq$ depreciation expense.
• $\triangleright$ Profit increases deliver substantial free cash flow increases.
• $\triangleright$ Exposure to northern hemisphere interest rates.

Group Financial Performance - A\$m's

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	FY04	FY03	Variance
Sales Revenue	871.3	705.7	23%
Interest & Other Income*	23.4	14.1	66%
Total Revenue	894.7	719.8	24%
Operating Costs*	711.1	583.9	(22%)
Share of net (profit)/loss of Associates	0.1	2.0	n/a
Normalised EBITDA	183.4	133.9	37%
Non-Recuring Items	(0.7)	35.1	n/a
EBITDA	184.1	98.8	86%
Pre Tax Profit	110.7	29.5	276%
NPAT after OEI	80.0	16.3	392%
Normalised NPAT after OEI	77.8	45.8	70%

* Excludes proceeds & disposal costs of sale of UK premises

Revenue Breakdown

	FY04	FY03	Var
Register Maintenance	459.2	459.2	$0\%$
Corporate Actions	143.8	93.3	54%
Investor Relations Services	76.0	14.4	428%
Employee Share Plans	100.9	80.2	26%
Document Services	51.0	39.1	30%
Mutual Funds	9.8	0.0	n/a
Technology & Other Revenues	53.9	33.6	61%
Total Revenue	894.7	719.8	24%

Note: Included in the revenue results are \$56.7m of Margin Income (FY03: \$63.7m) and \$124.6m of Recoverable Income (FY03: \$107.5m). FY'03 restated for cost of sales adjustment.

Half Year Comparisons - Revenue & EBITDA

$\triangleright$ Increased revenues have delivered significant improvements in EBITDA.

Regional Analysis - Revenue & EBITDA

Total Revenue Breakdown

EBITDA Breakdown

Half Year Comparisons - Costs

Note: FY03 & 1 H FY04 restated for cost of sales adjustment. 15

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Progress on Cost Savings

	Expected FY04 Realised FY04 Savings	Savings	Savings Excess (Shortfall)
Personnel	20.7	18.4	(2.3)
Property	0.4	0.6	0.2
Other	1.2	1.6	0.4
Total	22.3	20.6	(1.7)

Expected personnel savings impacted by market & business growth

Note: cost savings translated at FY04 exchange rates.

Analysis of NPAT

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Normalised Basic EPS Performance (pre goodwill)

-Normalised Basic EPS (pre goodwill)

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Returns improving, Cost of Capital declining

Effective Tax Rate

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• $\triangleright$ Headline effective tax rate for FY04 is 24.4% (FY03: 41.8%)
• $\triangleright$ Normalised headline effective tax rate for FY04 is 29.9% (FY03: 20.7%)
• $\triangleright$ The underlying effective tax rate being the tax rate adjusted for one off, nonrecurring items and non-deductible goodwill charges for FY04 is 23.8% (FY03: $10.6\%$ ).

Technology Costs - Establishing Global Platform

• All R & D technology costs are expensed

• ▶ FY04 includes \$7.7m in Technology costs from businesses acquired

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Analysis of Technology Costs

Net Operating Cash Flows

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Key Financial Ratios

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Capital Expenditure

CPU Group Capex

Working Capital Management

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Interest Rate Sensitivity

• A 25 bps movement in global interest rates impacts PBT by A\$2.5m p.a. $\bullet$
• No significant change in effective hedging from last year. $\bullet$

Equity Management - Fully Franked Final Dividend of 5 cps

$\triangleright$ EPS – Normalised Basic (post goodwill)	12.89 cents
$\triangleright$ EPS – Normalised Basic (pre goodwill)	19.02 cents
$\triangleright$ Final Dividend	5 cents (fully franked
$\triangleright$ Full Year Dividend	8 cents (fully franked
$\triangleright$ Current yield *	$2.5\%$
$\triangleright$ Franking Benefit - Total return	$3.6\%$

* Based on share price of AUD \$3.20

Equity Management - Preference Share Conversion

• ▶ Recent changes in Accounting Standards treat Reset Preference Shares (RPS) as debt (at 5.5% post tax).
• $\triangleright$ Announced conversion of RPS to Equity on 19th August, 2004.
• Converting on 30 September 2004 at trailing 20 day VWAP (with 2.5% discount). $\blacktriangleright$
• $\triangleright$ Expected dilution of approximately 6%, gross increase in EPS of 1.3 cents (or 10% in FY04).

Equity Management – Share Buy Back: Reset Preference Shares ≥

• $\triangleright$ Announced 19^th December 2003 Buy back a maximum of 17% (250,000) preference shares).
• $\triangleright$ Commenced 5^th January 2004.
• $\triangleright$ Changes announced on 19th March 2004 Buy back a further 500,000 shares.
• $\triangleright$ Acquired 315,193 preference shares by 16^th August 2004.

• Average price AUD \$103.83.

Results

Equity Management - Ordinary Share Buyback

• $\triangleright$ Announced 26^th May 2004 Buy back a maximum of 27,500,000 shares.
• $\triangleright$ Commenced 10^th June 2004.
• $\triangleright$ Acquired 15,970,000 shares by 16^th August 2004.
• $\triangleright$ Completion expected 17^th December 2004.
• $\triangleright$ Average price AUD \$3.18.

Financial Summary

• $\triangleright$ Normalised Earnings per Share (pre goodwill) rose from 11.79 to 19.02 cents per share.
• Net operating Cash Flows were \$136.1m (an increase of 79% on FY 2003). ➤
• $\triangleright$ Revenues increased 24% to \$894.7m.
• Normalised EBITDA up 37% to \$183.4m ➤
• $\triangleright$ Operating expenses were \$711.1m (inclusive of cost of sales). Excluding cost of sales & acquisitions, operating costs declined 1%.
• $\triangleright$ Days Sales Outstanding were 57 days, down 4 days from June 2003.
• Capital Expenditure was in line with expectation at \$21.4 million. ➤

• Increased Revenue & Profit

• $\triangleright$ Major focus on capital management
• $\triangleright$ Capital Expenditure
• $\triangleright$ Cash Flow
• $\triangleright$ Focus on EPS for future reporting

Australia

New Zealand

Regional Highlights - Asia/Pacific

Regional Highlights - Asia/Pacific

Regional Highlights - Asia/Pacific

$\triangleright$ Call Centre (from worst to first)

Anstrantan RESERVICES AS ISLAMAN

УІСТСКІА СНАРТЕК

• $\triangleright$ Australia: Significant improvement in productivity, accuracy and efficiency
• $\triangleright$ Introduction of Workflow / EDC resulted in 65% productivity improvement over 18 months
• $\triangleright$ IAG significant win
• $\triangleright$ More than 75% of clients have taken our integrated offering
• $\triangleright$ India Results better than budget
• $\triangleright$ Consistent flows in IPOs from mainland China into Hong Kong with 23 IPOs won between February and July 2004

Ireland

Regional Highlights - EMEA

$\triangleright$ South Africa significant turnaround in EBITDA

$\triangleright$ Germany

$\triangleright$ Design and implementation of new registry system

$\triangleright$ All companies migrated from Deutsche Bourse system

$\triangleright$ Creation of Plans division

$\triangleright$ Now operating profitably

• $\triangleright$ Gilts & NHS in UK
• ▶ Appointed Geoff Price, Managing Director Plans

United States of America

Canada

Regional Highlights - North America

Regional Highlights - North America

$\triangleright$ Georgeson

• $\triangleright$ Integration benefits better than expected
• $\triangleright$ Major synergies starting to be realised
• $\triangleright$ Rationalization of offices underway
• $\triangleright$ Significant savings in operational areas
• $\triangleright$ Now have 35 people in sales force in US
• $\triangleright$ Inherited great staff who have added to management strength
• $\triangleright$ Plenty of upside to come
• $\triangleright$ Acquisition of Alamo to merge with GSC, creating endto-end proxy service for Mutual Funds (print/solicitation/tabulation)

$\triangleright$ Transcentive

• Les Trachtman, Global head of business development for Plans

• $\triangleright$ Expanding their products globally
• $\blacktriangleright$ Europe
• ≻Hong Kong, China
• $\triangleright$ India
• $\triangleright$ Selling web-based solutions hosted in USA
• $\geq$ 22 New clients have been signed since acquisition
• $\triangleright$ Exceeding financial forecast

Regional Highlights - North America

Growing our Cross-Sell opportunities in North America

$\triangleright$ New Business from cross sales \$15.1 million

$\triangleright$ Benefits spread across all business solutions

$\triangleright$ Analytics	\$0.4 million
$\triangleright$ Corporate Actions	\$1.0 million
$\triangleright$ Plans	\$0.1 million
$\triangleright$ Post Merger Clean-up	\$3.2 million
> Document Services	\$4.0 million
$\triangleright$ Proxy Solicitation	\$1.7 million
$\triangleright$ Small Shareholder Plans	\$3.7 million
$\triangleright$ Transfer Agency (Registrar)	\$1.0 million

$\triangleright$ Canada efficiency gains (overtime 5% of a year ago)

• $\triangleright$ Restructured Canadian Trust business now showing solid growth
• $\triangleright$ Centralization of sales and marketing in North America
• $\triangleright$ Significant business wins in the US include:
• $\triangleright$ News Corporation
• $\triangleright$ Alltel

Highlights - Global

> Document Services

$\triangleright$ Brilliant results

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• $\triangleright$ The only global print/mail operation
• $\triangleright$ Seeking opportunities to expand in
• $\triangleright$ Perth
• ≻South Africa
• $\blacktriangleright$ Ireland

• Alamo gives us an East coast facility

Highlights - Global

$\triangleright$ Analytics

• Integration into Georgesons' Stock ID completed

• ≻ Appointed Paul Conn as Global Managing Director
• $\triangleright$ IR Track released
• $\triangleright$ Deal with NASDAQ and in discussions with other major exchanges
• $\triangleright$ Some work outsourced to our Philippine business
• $\triangleright$ Global development completed

Highlights - Global

$\triangleright$ Pepper

• $\triangleright$ ERM forecast revenues this year > \$15m plus + \$\$ to Plan Managers
• $\triangleright$ CRM expanded to Asia Pacific and North America: revenues now over \$25m per year
• $\triangleright$ SRM strong in the UK and Australia, first clients signed up in the US, adds significant value to our other businesses like SSP

$\triangleright$ eTree

$\triangleright$ Australia – Landcare Australia

• 32 Major Australian companies participating
• 446,000 trees planted or planned

$\triangleright$ US - American Forests

• $\triangleright$ Canada Tree Canada Foundation
• $\triangleright$ UK Future Forests

WHERE TO FROM HERE?

Market Conditions and Progress Report

> Margin Income and Corporate Action Revenue Trends

Growth Strategy

Outlook

$\triangleright$ Revenue growth > 10%

$\triangleright$ Growth in EPS > 20%

$\triangleright$ Guidance for FY 2005 will be established within the context of these metrics

QUESTIONS?

Financial Year 2004 Final Results Presentation

Appendix 1: Group Comparisons

Group Comparisons

Half Year Comparisons - Revenue

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Regional Analysis

Half Year Comparisons - Costs

Risk Management - Interest Rate Sensitivity

Interest Rate Hedging

Strategy:

• Minimise downside risk in current low interest rate environment

Policy:

• Minimum hedge of 25% / Maximum hedge of 75%

• Minimum term 1 year / Maximum term 5 years

Current hedging: 37%

Risk Management - Average Funds Balances for 12 months ending 30 June 2004

By Category

By Country

Balance range A\$2.7b to A\$4.1b Average fund balance A\$3.3b

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Appendix 2: Country Summaries

Country Summaries

Australia Half Year Comparison

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New Zealand Half Year Comparison

Hong Kong Half Year Comparison

United Kingdom Half Year Comparison

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Ireland Half Year Comparison

South Africa Half Year Comparison

United States Half Year Comparison

Canada Half Year Comparison