COMPUTERSHARE LIMITED. — Investor Presentation 2017

May 3, 2017

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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:	4 May 2017
To:	Australian Securities Exchange
Subject:	Macquarie Australia Conference 2017

Attached is the presentation to be delivered at today’s investor conference in Sydney, Australia.

For further information contact:

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

About Computershare Limited (CPU)

Computershare (ASX: CPU) is a global market leader in transfer agency and share registration, employee equity plans, mortgage servicing, proxy solicitation and stakeholder communications. We also specialise in corporate trust, bankruptcy, class action 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 16,000 employees worldwide.

For more information, visit www.computershare.com

Building sustained earnings growth Macquarie Australia Conference 2017

Mark Davis Chief Financial Officer – Computershare

4 May 2017

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Robust underlying business performance continues

Management EBITDA excluding the impact of margin income and exchange rate movements increased by 10.6% in 1H17 versus pcp

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400
379.3
350 364.4
327.2
300
250
259.7
200
180.7
150 163.3 163.3
100
50
0
FY13 FY14 FY15 FY16 1H17
USD millions
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Management EBITDA excluding margin income for each period is translated at FY16 average exchange rates. 1H17 results translated to USD at 1H16 average exchange rates

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All figures throughout this presentation are in USD million unless otherwise stated

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Company overview

A leading global provider of administration services in our selected markets

Who we are

• › Global market leader in transfer agency and share registration, employee equity plan administration, proxy solicitation and stakeholder communications

• › Also specialise in mortgage servicing, corporate trust, bankruptcy, class action administration and a range of other business services

Our capabilities

• › Renowned for our expertise in high integrity data management, high volume transaction processing, reconciliation, payments and stakeholder communications

• › Many of the world’s leading organisations use Computershare’s services to streamline and maximise the value of relationships with their investors, employees, customers and other stakeholders

Our strategy and model

• › Our strategy is to be the leading provider of services in our selected markets by leveraging our core competencies to deliver outstanding client outcomes from engaged staff

• › We focus on new products and services to reinforce market leadership in established markets and invest in technology and innovation to deliver productivity gains and improve cost outcomes

• › We have a combination of annuity and activity based revenue streams, strong free cash flow and high ROE

Growth drivers

• › Organic: Investment in mortgage servicing and employee share plans and enterprise wide cost out program coupled with property rationalisation benefits to drive growth and improved returns

• › Macro: Leverage to rising interest rates on client balances, corporate action and equity market activity

• › Structural: Emerging trend of new non-share registry opportunities due to rising compliance, technology complexity and requirement for efficient processing, payments and reconciliations

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1H17 Computershare at a glance

Management revenue @ CC

Management EBITDA @ CC

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Canada ANZ Canada ANZ
8% 8%
13% 16% Asia
Asia 10%
6%
$1,041.2m $250.5m
USA UCIA
44% UCIA 23%
26%
USA
42% CEU
CEU
1%
3%
Communicati Technology & Communicati Technology &
on Services other on Services other
8% 2% 5% 3%
Employee Employee
Share Plans Share Plans
11% 10%
Stakeholder
Stakeholder Register Register
Relationship
Relationship Maintenance Maintenance
Mgt
Mgt 32% -1% & Corporate
2% $1,041.2m $250.5m Actions
49%
Corporate Business
Business Actions Services
Services 6% 32%
39%
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Figures are quoted in constant currency (CC). CC equals 1H17 results translated to USD at 1H16 average exchange rates

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• Mortgage Services (included in Business Services) revenue is $263.7m and Management EBITDA $35.1m in constant currency

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Delivering sustained earnings growth

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Growth Profitability Capital Optionality
Management
› Mortgage Services › Cost management › Strong free cash › Leveraged to rising
program underway flow deleveraging interest rates, tax
› Employee Share
and on track balance sheet cuts, inorganic
Plans
opportunities and
reduced
bureaucracy
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Building the UK Mortgage Servicing growth engine

• › UKAR contract remains on track to deliver £600m of revenue and £100m of PBT

UKAR contract performing well

› Key risks identified as part of the UKAR appointment have decreased in intensity

• › Circa 55% of the UKAR book has now been sold and all servicing has been retained

• › Integration of HML and UKAR has progressed faster than initially expected

Integration ahead of plan

• › Process to consolidate all mortgages onto a single scalable platform is now underway and will complete by mid 2019

• › Contracts signed with Sainsbury’s Bank, Vida Homeloans and a leading high street retailer Heads of terms signed with a leading Investment Bank

Success with challenger banks

› These new contracts are expected to deliver £20bn of UPB by FY22

› By around FY20/21 we would expect the growth of these new clients to exceed book run-off

• › UK Retail Banks remain under cost pressure with average RoE still well below pre-crisis levels

Opportunity with retail banks

• › Our scale and deep content knowledge leave us well placed to exploit the emerging structural outsourcing opportunities that we believe will emerge

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Our UK Mortgage Servicing business

Computershare is the largest third party mortgage servicer in the UK with over 60% market share

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The UK’s
largest
Mortgage
Servicer
58
Clients
600k MORTGAGES


35k accounts in arrears
The highest Mortgage Servicer
ratings globally

Regulated by and
compliant with
RECEIVE OVER MAKE OVER
Financial Conduct
102,000 170,000
Authority
INBOUND CALLS OUTBOUND CALLS
(FCA)
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US Mortgage Servicing

Execution on track for scale and anticipated returns

Compelling market dynamics create material opportunity for CPU

Attractive industry we know well that aligns with our core strengths

Addition of scale combined with operational effectiveness initiatives positions us for anticipated returns

Deployment of capital adds further differentiation and aids returns profile

Building competitive differentiation through focus on servicing quality, technology and product offering

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Point of reflection at scale (USD 100bn UPB). Financial returns at scale re-affirmed

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We expect to make substantial progress towards our target in FY18

Expand CMC volume

• › Targeting USD 1bn per month in FY18

Execute on current pipeline

• › Sub-servicing opportunities in both performing and non-performing sectors

Penetrate CMC network

• › Sub-servicing our no. 1 priority

Build out 3[rd] party business

• › Execute on growth plans for Altavera and Mortgage Solutions

Implement new loss mitigation system

• › Helps improve margins and control environment

Execute on margin expansion initiatives

• › A range of cost reduction opportunities will help drive margin improvement in FY18

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Global Employee Share Plans

Building a global growth engine

• › Our strategic aim is to combine best-in-class service and technology in order to grow our client base and maximise the value of assets under management; and drive strong revenue and earnings growth

• › Well-placed to continue to benefit from positive structural trends (equity as a growing part of compensation) and cyclical recovery (rising share prices in local currencies). Combination of recurring issuer paid revenues and employee paid transactional fees

• › Execution priorities:

• Implement new front end web interface

• Roll out data analytics and new reporting capabilities

• Complete current service improvement programme, including process automation

• › Regulator / competitor pressure represents a challenging environment in which to deliver both revenue growth and cost reduction

• › However our full service capability, deep market understanding, global franchise and strong track record in innovation and efficiency / cost reduction all lend themselves to meeting the challenge

• › Successful execution will optimise the base from which we can profit from equity market growth and interest rate rises

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Global Employee Share Plans

No. 1 in focus markets

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EUROPE
USA / CANADA
Largest provider
Largest provider of Contributory
536 clients
Schemes in both markets
335 clients in US; 206 clients in
Canada
HONG KONG
Largest provider
Major Indices
166 clients
25% Fortune Global 500
40% Dow Jones 30
43% FTSE 100
AUSTRALIA &
NEW ZEALAND
40% Stoxx Euro 50
Largest provider
24% ASX 200
100 clients
5% TSX
24% HSI
Excluding markets where CPU does not operate
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Global Registry

No. 1 or 2 by size in focus markets

NORTH AMERICA Largest provider in US 2,800 clients & 2 ADR banks (3,000 ADRs) Largest provider in Canada 2,900 clients

Major Indices

51% Fortune Global 500* 73% Dow Jones 30 30% FTSE 350 50% ASX 200 65% TSX 78% HSI

• Excluding markets where CPU does not operate

EMEA

No.2 in UK; largest provider in Jersey, Ireland, South Africa, Italy, Denmark & Switzerland Largest AGM Services provider in Germany & Netherlands; No. 2 in Sweden 1,840 clients in UCIA; 760 clients in Continental Europe

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HONG KONG
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2[nd] largest provider 879 clients

AUSTRALIA & NEW ZEALAND Largest provider in both markets 944 clients in Australia 240 clients in New Zealand

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Strategic Priorities: Update Structural cost out program underway

Stage 1 Louisville (unchanged)	25 - 30	28%	55%	69%	100%
Stage 2 Spans of control	~15	20%	90%	100%
Operational efficiencies	10 - 15	-	25%	75%	100%
Procurement	5 - 8	-	50%	100%
Process Automation	~20	-	20%	80%	100%
Other	10 - 12	-	50%	100%
Stage 3 Further initiatives	TBD
Total estimate	85 - 100

• › Programs underway to deliver operational and process efficiencies. Benefits to be delivered across FY17 – FY20

• › Total benefits, including Louisville, expected to be $85 – 100m* per annum

• › Stage 2 spans of control commenced in January 2017

• Excluding UKAR integration. Estimates of total cash costs to deliver Stage 1 remain unchanged at $80-85 million. Total cash costs to achieve stage 2 savings estimated to be $30-40 million inclusive of opex and capex. Stage 2 costs to be incurred in FY17 and FY18. All opex costs to be expensed and included in Management adjustments. Savings to be achieved across the Group. Note: Expected FY17 post tax management adjustment of $21-25m for Stages 1 and 2

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Capital management

Cash flow and capital efficiency help drive growth and enhanced returns

Cash flow

• Free cash flow and asset disposals fund strategic investments in mortgage services and Employee Share Plans and enhanced returns to shareholders. Net debt fell by $111.8m, -9.9%

Recycling capital

• Completed the disposal of the Company’s global headquarters in Melbourne and investment in INVeSHARE Inc (excluded from management earnings in 1H17)

Board Policy

• To maintain our gearing level such that net debt/EBITDA is between 1.75x – 2.25x (excluding the non-recourse SLS advance facility debt), with flexibility to temporarily go above this range to take advantage of compelling investment opportunities. We will consider capital management to maintain leverage within this target band

Share buy-back

• In 1H17, the Company purchased and cancelled 500,000 ordinary shares at a total cost of AU$4.6 million with an average price of AU$9.20 bringing the total number of ordinary shares bought back under the buy-back program to 9,877,069 at an average price of AU$10.65 per share

Increased dividend

• Interim dividend of AU17 cents franked at 30%, +6.3% on pcp

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• Our franking rate for FY17 is expected to be in the range of 20% to 30%

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Margin Income

Headwind becoming tailwind, FY18 expected to be higher than pcp

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18.0
16.0 105.8 16.6
16.3
15.1 15.2 15.0
14.0
14.4
14.0
12.0
89.4
86.8
86.4
10.0
79.0
74.3
8.0
66.6
6.0
4.0
2.0
0.0
1H14 2H14 1H15 2H15 1H16 2H16 1H17
Average balances Margin Income (USD m)
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• References throughout this presentation relate to 1H17 unless otherwise stated

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Breakdown of balances

Exposed and hedged

USD 16.6bn Total balances

USD 10.3bn Exposed balances

USD 6.3bn Non-exposed balances

1% = $55m USD 5.5bn annualised Non-hedged balances EBITDA USD 1.2bn USD 4.3bn Natural hedge Non-hedged floating rate balances corporate debt

USD 4.8bn Hedged balances

USD 2.8bn USD 2.0bn Fixed Rate Deposits Fixed Rate Swaps

Lagged impact from rate changes

Immediate impact from rate changes

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Headwind turning into tailwind

After a sustained period of interest rate declines rate curves are now improving

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%
6.00
5.00
USD
4.00
3.00
2.00
1.00
-
%
7.00
6.00
5.00
GBP
4.00
3.00
2.00
1.00
-
%
6.00
5.00
CAD 4.00
3.00
2.00
1.00
-
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Conclusions

Execution on track for sustained earnings growth

Delivering on growth, profitability and capital management strategies. Anticipated benefits beginning to emerge

Robust underlying business performance continues

Progress in building growth engines and reducing costs

Recycling capital to drive growth, scale and improved returns

Guidance re-affirmed: management EPS for FY17 expected to be between 56 - 58 cents in constant currency (FY16 55.09 cents)

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Simpler, more transparent, disciplined and profitable

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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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