COMPUTERSHARE LIMITED. - Investor Presentation 2015

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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:	1 September 2015
To:	Australian Securities Exchange
Subject:	Investor conferences – Asia, United Kingdom and United States – September and October 2015

Attached is the presentation to be delivered at various investor conferences in Asia, the United Kingdom and the United States of America during September and October 2015.

For further information contact:

Mr Darren Murphy Head of Treasury and Investor Relations Ph +61-3-9415-5102 [email protected]

About Computershare Limited (CPU)

Computershare (ASX: CPU) is a global market leader in transfer agency and share registration, employee equity plans, proxy solicitation and stakeholder communications. We also specialise in corporate trust, mortgage, bankruptcy, class action and utility administration, and a range of other diversified financial and governance services.

Founded in 1978, Computershare is renowned for its expertise in high integrity data management, high volume transaction processing and reconciliations, payments and stakeholder engagement. Many of the world’s leading organisations use us to streamline and maximise the value of relationships with their investors, employees, creditors and customers.

Computershare is represented in all major financial markets and has over 15,000 employees worldwide. For more information, visit www.computershare.com.

Computershare Limited Investor Conferences Presentation Asia, United Kingdom and United States September & October 2015

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V1DIS
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Management Results Summary – FY2015

				FY 2015 at FY
	FY 2015	FY 2014	versus FY 2014	2014 exchange rates versus
				FY 2014
Management Earnings per share (post NCI)	US 59.82 cents	US 60.24 cents	Down 0.7%	Up 1.9%
Total Operating Revenue	$1,976.1	$2,022.6	Down 2.3%	Up 1.4%
Operating Costs	$1,419.7	$1,480.9	Down 4.1%	Down 0.04%
Management Earnings before Interest, Tax, Depreciation and
Amortisation (EBITDA)	$554.1	$540.6	Up 2.5%	Up 5.3%
EBITDA Margin	28.0%	26.7%	Up 130 bps	Up 100 bps
Management Net Profit post NCI	$332.7	$335.0	Down 0.7%	Up 1.9%
Cash Flow from Operations	$372.1	$409.3	Down 9.1%
Free Cash Flow	$343.7	$392.8	Down 12.5%
Days Sales Outstanding	48 days	45 days	Up 3 days
Capital Expenditure	$38.6	$19.8	Up 94.9%
Net Debt to EBITDA ratio	2.10 times	2.13 times	Down 0.03 times
Final Dividend	AU 16 cents	AU 15 cents	Up 1 cent
Final Dividend franking amount	25%	20%	Up from 20%

Note: all results are in USD millions unless otherwise indicated.

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Drivers Behind FY2015 Financial Performance

› Given a range of known headwinds entering FY2015, underlying operating performance was sound with Management EBITDA up 2.5% against FY2014 in actual terms and up 5.3% in constant currency terms. Management revenue was down 2.3% but up 1.4% in constant currency terms. The revenue benefit from the net impact of acquisitions and disposals was partially offset by the headwinds.
› Register maintenance revenues were down 2.8% in actual terms and 1.4% higher in constant currency, benefiting from recent acquisitions in Canada and the US. Corporate Actions revenues fell to their lowest level in many years, impacted by reductions in Canadian and Australian cash rates and the maturity of the USD deposit facility in FY2014.
› Employee plans revenue fell 4.6% in FY2015 and was 1.8% lower in constant currency terms. Lower margin income contribution and weaker transactional volumes impacted the segment.
› Business services experienced overall revenue growth. Australian revenues were impacted by the loss of Serviceworks’ largest client due to takeover. UCIA benefited from the HML acquisition and a pick-up in voucher services revenue. Class actions administration grew but was more than offset by weaker revenues in bankruptcy administration. US mortgage servicing grew marginally, offsetting revenue losses from the sale of Highlands Insurance in June 2014 and the loss of a material subservicing contract in March 2014.
› Stakeholder relationship management revenues fell significantly as a result of the sale of the Pepper Group in June 2014. Communication services revenues were also down, further impacted by currency translation due to the significant AUD revenues in this segment.
› Costs were down 4.1%. Expenses were flat in constant currency terms notwithstanding the increased costs associated with recently acquired businesses.
› The Management effective tax rate for FY2015 was higher at 26.1%.

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Computershare Strengths

› 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 efficiency; and
a joined-up global platform and seamless execution of cross-border solutions.
› Consolidating position and continuing to extract synergies from acquisitions within our chosen business lines.
› More generally:
over 70% of revenues recurring in nature;
long track record of excellent cash realisation from operations; and
strong balance sheet and prudent gearing, with average maturity of debt facilities of 3.8 years.

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Guidance statement provided on 12 August 2015

› Looking to the year ahead, the Company expects underlying business performance to be broadly similar to FY2015.
› 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 business is also anticipating some increased costs including those associated with investments in product development and efficiency initiatives. Taking all factors into account the Company expects Management EPS for FY2016 to be around 7.5% lower than FY2015.
› This assessment of the outlook assumes that equity, foreign exchange and interest rate markets remain at current levels and that corporate action activity is similar to FY2015, and is also subject to the important notice on slide 22 regarding forward looking statements.

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Group Financial Performance

	FY 2015	FY 2014	% variance to FY 2014 2H 2015	1H 2015	2H 2014	1H 2014
Sales Revenue Interest & Other Income	$1,966.2 $9.9	$2,011.4 $11.2	Fav/(Unfav) (2.3%) $1,011.8 (11.7%) $4.7	$954.4 $5.1	$1,040.3 $5.4	$971.1 $5.8
Total Management Revenue	$1,976.1	$2,022.6	(2.3%) $1,016.5	$959.5	$1,045.7	$976.9
Operating Costs	$1,419.7	$1,480.9	4.1% $720.7	$699.0	$771.7	$709.2
Share of Net (Profit)/Loss of Associates	$2.3	$1.1	$1.1	$1.2	$0.5	$0.7
Management EBITDA	$554.1	$540.6	2.5% $294.8	$259.3	$273.6	$267.0
Statutory NPAT	$153.6	$251.4	(38.9%) $138.1	$15.5	$112.0	$139.4
Management NPAT	$332.7	$335.0	(0.7%) $172.1	$160.7	$171.5	$163.6
Management EPS (US cents)	59.82	60.24	(0.7%) 30.94	28.88	30.83	29.41
Statutory EPS (US cents)	27.61	45.20	(38.9%) 24.82	2.79	20.13	25.07

Note: all results are in USD millions unless otherwise indicated.

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FY2015 Management NPAT Analysis

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355
350
345
14.0
340 0.9
21.1
4.8
5.1
335
11.0 0.6
18.1
330 8.0
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 CEU Tech & Expense Expense Amort NPAT
Corp
USD M
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Management Revenue & EBITDA Half Year Comparisons

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1,200 60%
1,037.5 1,045.7
1,016.5
987.6
976.9
1,000 959.5 50%
800 40%
29.0%
600 30%
27.3% 27.0%
25.9% 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 1H15 2H15
Revenue Management EBITDA Operating Margin
Operating Margin %
Revenue & EBITDA USD M
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Management Revenue Breakdown

Revenue Stream	FY 2015	FY 2014	% variance to FY 2014 FY 2015 @ FY 2014 exchange rates	FY 2015 at FY 2014 exchange rates versus FY 2014
Register Maintenance	$798.9	$821.9	(2.8%) $833.5	1.4%
Corporate Actions	$144.2	$154.2	(6.5%) $149.7	(2.9%)
Business Services	$519.1	$487.9	6.4% $532.0	9.0%
Stakeholder Relationship Mgt	$58.2	$74.7	(22.0%) $59.2	(20.7%)
Employee Share Plans	$247.6	$259.5	(4.6%) $254.7	(1.9%)
Communication Services	$179.8	$194.8	(7.7%) $193.0	(0.9%)
Technology & Other Revenue	$28.2	$29.7	(5.1%) $29.8	0.1%
Total Revenue	$1,976.1	$2,022.6	(2.3%) $2,051.8	1.4%

Note: all results are in USD millions unless otherwise indicated.

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Management Operating Revenue Analysis

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2,100
2,080
15.5
2,060 40.7 1.9 1.8 0.0 9.8
2,040
0.9
14.5
2,020
75.7
2,000
1,980
2,051.8
1,960 2,022.6
1,940
1,976.1
1,920
1,900
USD M
FX
Actions
Register Corporate Employee rates
Revenue Maintenance Share Plans Services Revenue
FY14 Operating Business Services Stakeholder Relationship Mgt Communication Technology & Other Revenue Margin Income FY15 Operating Revenue @ LY FY15 Operating
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Margin Income Analysis

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200 18
16.7
180 15.1 15.2 16
14.4
14.0
160 13.6
14
140
12
120.0
120
104.9 105.8 10
100
89.4
86.8 86.4
8
80
6
60
4
40
2
20
0 0
1H13 2H13 1H14 2H14 1H15 2H15
Margin Income Average balances
USD Billion
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AVERAGE	MARKET	CASH	RATES
	1H13	2H13	1H14	2H14	1H15	2H15
UK	0.50%	0.50%	0.50%	0.50%	0.50%	0.50%
USA	0.25%	0.25%	0.25%	0.25%	0.25%	0.25%
Canada	1.00%	1.00%	1.00%	1.00%	1.00%	0.78%
Australia	3.34%	2.93%	2.55%	2.50%	2.50%	2.22%

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FY2015 Client Balances Interest Rate Exposure

Average funds (USD 15.2b) held during FY2015

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Exposure to
interest rates
38% ($5.7b) No exposure
31% ($4.7b)
Effective
hedging:
natural
7% ($1.1b)
Effective
hedging:
derivative /
fixed rate
24% ($3.7b)
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CPU had an average of USD15.2b of client funds under management during FY2015.

For 31% ($4.7b) of the FY2015 average client funds under management, CPU had no exposure to interest rate movements either as a result of not earning margin income, or receiving a fixed spread on these funds.

The remaining 69% ($10.5b) of funds were “exposed” to interest rate movements. For these funds:

 24% had effective hedging in place (being either derivative or fixed rate deposits).  7% was naturally hedged against CPU’s own floating rate debt.

The remaining 38% was exposed to changes in interest rates.

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Client Balances Fixed and Floating Rate Term Deposits

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7,000
Floating Rate Deposits Fixed Rate Deposits
6,000
5,000
4,000
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
1,000
500
0
Jul-15 Jul-16 Jul-17 Jul-18 Jul-19
USD M
USD M
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Total Management Operating Costs Half Year Comparisons

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900
800 768.9 771.6
746.3
720.7
709.2
699.0
700
196.2 193.4
168.3
164.9 181.2
165.0
600
500
400
300
577.9 572.7 578.3
544.3 534.0 539.5
200
100
0
1H13 2H13 1H14 2H14 1H15 2H15
Controllable Costs (excl COS) Cost of Sales (COS)
USD M
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Capital Expenditure vs. Depreciation

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30
25.6 25.6
25 23.9 1.6 1.7
2.0
5.6
7.8
20
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 Occupancy Other Depreciation
USD M
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Free Cash Flow

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250
224.4
217.4
200.8
200 191.9
147.7
150
133.3
100
50
23.6
20.2 18.1
10.2 10.3
6.3
0
1H13 2H13 1H14 2H14 1H15 2H15
Operating Cash Flows Cash outlay on Capital Expenditure
USD M
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Note: Excludes assets purchased through finance leases which are not cash outlays.

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Key Financial Ratios

	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 times	Down0.03 times

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12
EBITDA Interest Coverage
10
8
6
10.7
10.2
4 7.3 7.7 8.4 8.6
2
0
1H13 2H13 1H14 2H14 1H15 2H15
Cash includes cash that is classified as an asset held for sale.
Times
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Net Financial Indebtedness to EBITDA

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3.0 2.72
2.47
2.5 2.26 2.28
2.13 2.10
2.0
1.5
2.57
2.33
1.0 2.09 1.96 2.10 1.86
0.5
0.0
1H13 2H13 1H14 2H14 1H15 2H15
Net debt (excl. non-recourse SLS Advance debt) to EBITDA ratio
Net debt to EBITDA ratio
Times
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Debt Facility Maturity Profile

Maturity Dates USD M	Debt	Committed	Bank	Private Placement
	Drawn	Debt Facilities	Debt Facility	Facility
FY16 Dec-15 Apr-16 FY17 Mar-17 FY18 Jul-17 Feb-18 FY19 Jul-18 Feb-19 FY20 Jul-19 FY22 Feb-22 FY24 Feb-24	141.0 25.9 21.0 445.0 40.0 235.0 70.0 291.5 220.0 220.0	150.0 50.0 21.0 450.0 40.0 235.0 70.0 450.0 220.0 220.0	450.0 450.0	21.0 40.0 235.0 70.0 220.0 220.0
TOTAL	1,709.4	1,906.0	900.0	806.0

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500.0
450.0
445.0 450.0
450.0
400.0
350.0
300.0 291.5
250.0 235.0
220.0 220.0
200.0
200.0
166.9
150.0
100.0
70.0
50.0 40.0
21.0
0.0
FY16 FY17 FY18 FY19 FY20 FY21 FY22 FY23 FY24 FY25
SLS non-recourse Advance Facility drawn SLS non-recourse Advance Facility USPP Syndicated Debt drawn Syndicated Debt Facility
Note: Average debt facility maturity is 3.8 years as at 30-Jun-15.
USD M
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Return On Invested Capital vs. WACC and Return on Equity

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35%
30% 28.01% 28.62%
25.80%
25%
20%
16.38% 16.48%
15.84%
15%
10%
9.51% 9.46%
8.97%
5%
0%
FY13 FY14 FY15
WACC ROIC ROE
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ROIC = (Mgt EBITDA less Depreciation less Income Tax expense)/(Total Debt add Total Equity less Cash).

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Group Strategy and Priorities

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 and efficiency through measurement, benchmarking and technology.
We continue to prioritise our focus on those areas that best assure our future by:
› Protecting profitability in mature businesses via new revenue and cost initiatives.
› Investing in growth initiatives for businesses that offer that potential.
› Evaluating new business opportunities but with disciplined investment hurdle thresholds.
› Taking the opportunity to simplify the business where we can.

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Delivery Against Strategy and Priorities

› 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 of non-strategic assets were also achieved following the completion of the disposals of VEM, ConnectNow and our Russian business.
› We are investing in a number of front office initiatives, using improved data measurement metrics across all business lines to develop opportunities, identify areas for improvements and enhance the customer experience in pursuit of organic growth.
› While the competitive landscape remains challenging, we continue to achieve high levels of customer satisfaction and client retention and our investments in integrated products helped us win a number of new clients across the group.
› We remain cost disciplined, and have continued to add volume to our Global Service Model. The US operations centralisation project investment phase is underway.

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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', 'guidance' and similar expressions. Indications of plans, strategies, management objectives, sales and financial performance are also forward-looking statements.

› Such statements are not guarantees of future performance, and involve known and unknown risks, uncertainties and other factors, many of which are outside the control of Computershare. Actual results, performance or achievements may vary materially from any forward-looking statements. Readers are cautioned not to place undue reliance on forwardlooking statements, which are current only as at the date of this announcement.

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COMPUTERSHARE LIMITED. Investor Presentation 2015

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