1 Tom Honan Chief Financial Officer Market Overview and Financial - - PDF document

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Financial Year 2004 Final Results Presentation

19 August 2004

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Market Overview and Financial Results

Tom Honan Chief Financial Officer

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Summary of Results

Normalised EPS (pre goodwill) of 19.0 cents, up 61%. 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%. Days Sales Outstanding at 57 days. Final dividend increased to 5 cents per share (fully franked)

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Context of Results

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

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This presentation is structured around the following framework

Market Overview Financial Results CEO’s Report

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CPU Revenues are driven by multiple factors

Market Overview

Revenue Type

52% 16% 11% 6% 1% 6% 8%

Register Maintenance Corporate Actions Investor Relations Services Employee Share Plans Document Services Mutual Funds Technology & Other Revenue

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

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Global Equities Market

Market Overview

CPU impact mainly felt in Australia and Hong Kong.

Historical Equity Issuance Data Annual M & A Book to Bill Ratio

Source: SDC Thomson Financial and UBS Securities Australia Ltd

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Global Interest Rate Market

Market Overview

US

2 4 6 8 1996 1997 1998 1999 2000 2001 2002 2003 2004 %

UK

2 4 6 8 1996 1997 1998 1999 2000 2001 2002 2003 2004 %

Canada

2 4 6 8 1996 1997 1998 1999 2000 2001 2002 2003 2004 %

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Computershare Strengths

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

Market Overview

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Market Overview Financial Results CEO’s Report

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Group Financial Performance – A$m’s

Financial Results

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

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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.

Financial Results

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Half Year Comparisons – Revenue & EBITDA

Financial Results

Revenue & EBITDA

355.7 495.2 399.5 364.1 80.1 103.3 79.5 54.4

200 250 300 350 400 450 500 550 1H03 2H03 1H04 2H04

$Am

20 40 60 80 100 120

$Am

Revenue EBITDA

R e v e n u e E B I T D A

Increased revenues have delivered significant improvements in EBITDA.

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Regional Analysis – Revenue & EBITDA

Total Revenue Breakdown

32% 28% 40% Asia Pacific Europe North America

EBITDA Breakdown

35% 26% 39% Asia Pacific Europe North America

Financial Results

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Half Year Comparisons - Costs

Operating Costs

300.8 283.1 294.6

19.2 98.6

298.7

100 200 300 400 1H03 2H03 1H04 2H04

$Am

Acquisitions

Financial Results

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

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Progress on Cost Savings

Expected FY04 Savings Realised FY04 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.

Financial Results

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Analysis of NPAT

Financial Results

Normalised Net Profit After Tax

57.9 45.8 77.8

10 20 30 40 50 60 70 80

FY02 FY03 FY04

A$m

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Normalised Basic EPS Performance (pre goodwill)

Financial Results

Normalised Basic EPS (pre goodwill) (rolling 12 months)

2 4 6 8 10 12 14 16 18 20

Dec'01 Jun'02 Dec'02 Jun'03 Dec'03 Jun'04 cents

Normalised Basic EPS (pre goodwill)

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Returns improving, Cost of Capital declining

ROIC vs. WACC

Financial Results

6% 8% 10% 12% 14% 16% 18% FY02 FY03 FY04 WACC ROIC

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Effective Tax Rate

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

Financial Results

Headline Effective Tax Rate

44.5 31.0 41.8 24.4

5 10 15 20 25 30 35 40 45 50 FY01 FY02 FY03 FY04 %

Underlying Effective Tax Rate

30.9 26.1 10.6 23.8

5 10 15 20 25 30 35 FY01 FY02 FY03 FY04 %

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Technology Costs – Establishing Global Platform

Financial Results

92.0 92.1 106.7 14% 13% 11% 80 85 90 95 100 105 110 115 120 FY02 FY03 FY04 A$m 0% 2% 4% 6% 8% 10% 12% 14%

%

Technology costs Technology costs % of sales revenue

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

Financial Results

35.5 38.6 41.1 2.8 2.5 2.3 27.2 24.8 25.6 14.4 16.6 21.1 26.8 2.0 9.5 10 20 30 40 50 60 70 80 90 100 110

FY02 FY03 FY04

$Am External Bureau Infrastructure Maintenance Application Maintenance Administration Research & Development

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Net Operating Cash Flows

Financial Results

• Increase in Operating Cash

Flows

• Gearing on a net debt to

equity basis – 36.6%

• Committed debt facility -

A$360m

• Debtors days outstanding

have fallen from 61 to 57 days

Net Operating Cash Flows (after Capex)

25.0 22.5 58.3 114.7

20 40 60 80 100 120 140 FY01 FY02 FY03 FY04 $Am

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Key Financial Ratios

EBITDA interest coverage

14.5 11.9 21.2

5 10 15 20 25 FY02 FY03 FY04

times

Total Financial Indebtedness to EBITDA

0.7 1.4 1.7

1 2 3 FY02 FY03 FY04

times

Gearing (Net Debt / Net Debt + Equity)

5% 12% 27%

0% 10% 20% 30% 40% 50% 60% FY02 FY03 FY04

%

Funds Flow to Total Debt

82% 50% 50%

0% 20% 40% 60% 80% 100% FY02 FY03 FY04

% Financial Results

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Capital Expenditure

Financial Results

17.9 12.8 14.0

7.7 2.7 29.1 1.7 4.2 1.0

0.5 2.4 2.2 10 20 30 40 50 60

FY02 FY03 FY04

$Am

Other Occupancy Document Services Facilities Information Technology

CPU Group Capex

56.9 17.9 21.4

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Working Capital Management

Financial Results

DSO & DPO

61 57

51 41 54

66

10 20 30 40 50 60 70 FY02 FY03 FY04

Days

Receivable Days Payable Days

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Interest Rate Sensitivity

Financial Results

• 60
• 40
• 20

20 40 60 80 100

• 2.50% -2.00% -1.50% -1.00% -0.50% 0.00%

0.50% 1.00% 1.50% 2.00% 2.50% 3.00% 3.50% 4.00% 4.50% A$m PBT Impact

Exposure Hedged exposure 100% Hedged

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

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Equity Management – Fully Franked Final Dividend of 5 cps EPS – Normalised Basic (post goodwill) 12.89 cents EPS – Normalised Basic (pre goodwill) 19.02 cents Final Dividend 5 cents (fully franked) Full Year Dividend 8 cents (fully franked) Current yield * 2.5% Franking Benefit – Total return 3.6%

* Based on share price of AUD $3.20

Financial Results

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Equity Management – Preference Share Conversion

Financial Results

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

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Equity Management – Share Buy Back: Reset Preference Shares

Financial Results

Announced 19th December 2003 - Buy back a maximum of 17% (250,000 preference shares). Commenced 5th January 2004. Changes announced on 19th March 2004 – Buy back a further 500,000 shares. Acquired 315,193 preference shares by 16th August 2004. Average price AUD $103.83.

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Equity Management – Ordinary Share Buyback

Financial Results

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

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Financial Summary

Financial Results

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). Revenues increased 24% to $894.7m. Normalised EBITDA up 37% to $183.4m Operating expenses were $711.1m (inclusive of cost of sales). Excluding cost of sales & acquisitions, operating costs declined 1%. Days Sales Outstanding were 57 days, down 4 days from June 2003. Capital Expenditure was in line with expectation at $21.4 million.

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Market Overview Financial Performance CEO’s Report

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Increased Revenue & Profit Major focus on capital management Capital Expenditure Cash Flow Focus on EPS for future reporting

CEO’s Report

Highlights - Financial

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Regional Highlights – Asia/Pacific

India Hong Kong Philippines Australia New Zealand

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Relocated to Global Headquarters

Regional Highlights – Asia/Pacific

CEO’s Report

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Call Centre (from worst to first)

Regional Highlights – Asia/Pacific

CEO’s Report

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Regional Highlights – Asia/Pacific

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

CEO’s Report

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Ireland United Kingdom Germany South Africa Russia

Regional Highlights - EMEA

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Regional Highlights - EMEA

South Africa significant turnaround in EBITDA Germany Design and implementation of new registry system All companies migrated from Deutsche Bourse system Creation of Plans division Now operating profitably Gilts & NHS in UK Appointed Geoff Price, Managing Director Plans

CEO’s Report

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Regional Highlights – North America

United States of America Canada

CEO’s Report

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Georgeson

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

Regional Highlights – North America

CEO’s Report

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Regional Highlights – North America

Transcentive

Les Trachtman, Global head of business development for Plans Expanding their products globally Europe Hong Kong, China India Selling web-based solutions hosted in USA 22 New clients have been signed since acquisition Exceeding financial forecast

CEO’s Report

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Growing our Cross-Sell opportunities in North America

New Business from cross sales $15.1 million

Benefits spread across all business solutions

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

Regional Highlights – North America

CEO’s Report

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Canada efficiency gains (overtime 5% of a year ago) Restructured Canadian Trust business - now showing solid growth Centralization of sales and marketing in North America Significant business wins in the US include:

News Corporation Alltel

Regional Highlights – North America

CEO’s Report

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Document Services

Brilliant results The only global print/mail operation Seeking opportunities to expand in Perth South Africa Ireland Alamo gives us an East coast facility

Highlights - Global

CEO’s Report

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Analytics

Integration into Georgesons’ Stock ID completed Appointed Paul Conn as Global Managing Director IR Track released Deal with NASDAQ and in discussions with other major exchanges Some work outsourced to our Philippine business Global development completed

Highlights - Global

CEO’s Report

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Highlights - Global

Pepper

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

Australia – Landcare Australia 32 Major Australian companies participating 446,000 trees planted or planned US – American Forests Canada – Tree Canada Foundation UK – Future Forests

CEO’s Report

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WHERE TO FROM HERE?

CEO’s Report

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Margin Income and Corporate Action Revenue Trends

500 550 600 650 700 750 800 850 900 2001 2002 2003 2004 Total Revenue (A$m) 60 80 100 120 140 160 180 Revenue from Margin Income & Corporate Actions (A$m) Total Revenue Revenue from Margin Income & Corporate Actions

Market Conditions and Progress Report

CEO’s Report

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Integrated Shareholder Relationship Management Integrated Employee Relationship Management SRM Proxy Solicitation Analytics ERM Global Share Plans

Investor Services Plan Administration Call Centre Fulfilment (CDS) Data Processing EDC Workflow

Technology Value Processing

Growth Strategy

CEO’s Report

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Revenue growth > 10% Growth in EPS > 20% Guidance for FY 2005 will be established within the context of these metrics

Outlook

CEO’s Report

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QUESTIONS?

CEO’s Report

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Financial Year 2004 Final Results Presentation

19 August 2004

Financial Results

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Appendix 1: Group Comparisons

Financial Results

Group Comparisons

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Half Year Comparisons - Revenue

Financial Results 224.2 50.3 7.2 40.5 1 9.0 0.0 235.0 43.1 7.1 39.7 20.1 0.0 21 5.0 74.7 1 5.8 45.7 21 .2 0.8 244.2 69.1 55.2 29.8 8.9 60.2

Register Maintenance Corporate Actions Investor Relations Employee Share Plans Document Services Mutual Funds

$Am

1H03 2H03 1H04 2H04

Excludes proceeds on the sale of UK premises

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Regional Analysis

Financial Results 133.8 69.4 6.4 8.8 33.4 2.2 160.6 15.1 30.1 26.7 12.5 0.0 164.8 59.3 39.5 65.3 5.1 7.5

Register Maintenance Corporate Actions Investor Relations Employee Share Plans Document Services Mutual Funds $Am

Asia Pacific Europe North America

Excludes proceeds on the sale of UK premises

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Half Year Comparisons - Costs

Financial Results

Operating Cost Breakdown

56.7 136.5 18.0 40.6 40.4 8.6 58.8 25.9 4.0 67.4 139.3 19.3 36.7 41.6 13.9 92.5 174.8 26.6 34.5 48.5 16.1 42.1 133.5 18.8

Cost of Sales Personnel Occupancy Other Direct Technology Corporate

$Am

1H03 2H03 1H04 2H04

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Risk Management - Interest Rate Sensitivity

Exposure to interest rates 26% Effective hedging in place - both natural & synthetic 37% No exposure 37%

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%

Financial Results

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

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

Financial Results

By Category

Sharesave 22% Broker Trust 23% Corporate Actions 16% Dissenter 8% Dividend 14% Regular Trust 17%

By Country

Canada 49% UK 39% US 10% Australia 2%

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Appendix 2: Country Summaries

Financial Results

Country Summaries

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Australia Half Year Comparison

Revenue Breakdown

38.9 19.7 1.2 2.6 15.8 18.8 1.3 2.7 43.5 31.1 2.1 4.4 16.3 47.4 25.2 4.2 4.4 17.1 39.7 14.2

Register Maintenance Corporate Actions Investor Relations Employee Share Plans Document Services

$Am

1H03 2H03 1H04 2H04

Total Revenue

86.8 86.6 109.3 114.9

1H03 2H03 1H04 2H04

$Am

Financial Results

63

New Zealand Half Year Comparison

Revenue Breakdown

7.1 1.6

6.3 0.8

6.9 1.4

6.3 1.0

Register Maintenance Corporate Actions

$NZm

1H03 2H03 1H04 2H04

Total Revenue

8.7 7.1 7.4 8.3

1H03 2H03 1H04 2H04

$NZm Financial Results

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Hong Kong Half Year Comparison

Total Revenue

89.6 97.4 71.1 99.1

1H03 2H03 1H04 2H04

$HKm

Revenue Breakdown

66.9 32.2 59.7 11.1 58.1 31.5 24.0 73.4

Register Maintenance Corporate Actions

$HKm

1H03 2H03 1H04 2H04

Financial Results

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United Kingdom Half Year Comparison

Revenue Breakdown

23.0 2.7 1.4 4.5 1.2 21.0 22.6 2.9 3.2 5.0 1.6 25.3 1.5 4.8 6.0 3.6 3.0 2.0 3.9 1.3

Register Maintenance Corporate Actions Investor Relations Employee Share Plans Document Services

1H03 2H03 1H04 2H04

GBPm

Total Revenue

33.8 33.7 41.6 36.3 1H03 2H03 1H04 2H04 GBPm

Financial Results

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Ireland Half Year Comparison

Revenue Breakdown

2.3 0.4 2.8 0.7 2.2 0.7 2.3 0.9

Register Maintenance Corporate Actions

EUROm

1H03 2H03 1H04 2H04

Total Revenue

2.7 3.8 4.3 3.6

1H03 2H03 1H04 2H04

EUROm

Financial Results

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South Africa Half Year Comparison

Revenue Breakdown

83.4 3.4 92.2 1.2 86.5 3.4 0.2 83.7 4.5 0.5

Register Maintenance Corporate Actions Investor Relations Services

ZARm

1H03 2H03 1H04 2H04

Total Revenue

86.8 93.4 90.5 90.1 1H03 2H03 1H04 2H04 ZARm

Financial Results

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United States Half Year Comparison

Revenue Breakdown

14.5 3.5 1.2 11.3 0.0 1.5 12.4 17.9 11.6 3.3 15.7 0.6 0.6 21.4 18.5 20.9 22.6 2.7 4.8

1.4

0.2 19.9

Register Main Corp Actions Investor Relations Employee Share Plans Document Services Mutual Funds USDm

1H03 2H03 1H04 2H04

Total Revenue

30.8 35.4 98.8 50.9

1H03 2H03 1H04 2H04

USDm

Financial Results

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Canada Half Year Comparison

Revenue Breakdown

46.6 5.7 4.3 0.0 8.0 4.6 0.1 46.6 9.5 0.2 5.4 0.3 54.7 5.5 4.7 4.3 0.2 56.1

Register Maintenance Corporate Actions Investor Relations Services Employee Share Plans Document Services

CADm

1H03 2H03 1H04 2H04

Total Revenue

56.8 68.8 70.0 62.9 1H03 2H03 1H04 2H04

CADm

Financial Results