Computershare Limited Full Year Results 2005 Presentation Chris Morris Tom Honan 16 August 2005 1
CEO’s Report Financial Results Introduction 2
Introduction Chief Financial Officer Tom Honan 3
Summary of Results Introduction � Normalised EPS (pre goodwill, post pref. dividend) of 24.27 cents, up 28% � Net Profit After Tax of A$105.4m, up 26% � Total revenue of A$1,098.9m, up 23% or up 13% excluding FY05 acquisitions � Operating Cash Flows of A$146.8 m, up 7.8%. � Operating Costs (excluding cost of sales and FY05 acquisitions) of A$618.3 m, a 7.2% increase � Days Sales Outstanding at 62 days, up 5 days on the same period last year � Final dividend of 6 cents per share. Full year dividend of 11 cents per share Note: Includes EquiServe’s results since date of acquisition * All comparisons are against FY04 4
CPU Revenues continue to diversify Introduction Revenue Type 6% 5% 5% Register Maintenance Corporate Actions Stakeholder Relationship Management 11% Employee Share Plans 48% Document Services Mutual Funds Technology & Other Revenue 10% 15% 5
Global Equities Market Introduction Historical Equity Issuance Data Annual M & A Book to Bill Ratio 4000 2.0 3500 1.8 3000 2500 $ Billions 1.5 2000 1500 1.3 1000 500 1.0 0 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005E 0.8 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005E Global Completed M&A Volume Book-to-bill ratio Average 2005 YTD Total Volume: 2005 Est. Annualized Volume: 2005 YTD 2005 YTD vs. 2000 - 2004 Avg $719 bn $1,233 bn 1.85x 82.4% 2004 Total Volume: Est. 2005 vs. 2004: 2000-2004 Average 2005 YTD vs. 1991 - 2004 Avg. $1,525 bn -19.1% 1.02x 59.2% 1991-2004 Avg Volume: Est. 2005 vs. 1991-2004 Avg: 1991-2004 Average $1,382 bn -10.8% 1.16x Source: SDC Thomson Financial and UBS Securities Australia Ltd � Great result considering stable M&A market 6
Global Interest Rate Market Introduction % % UK US 8 8 6 6 4 4 2 2 0 0 1997 1999 2001 2003 2005 1997 1999 2001 2003 2005 % Canada 8 6 4 2 0 1997 1999 2001 2003 2005 7
Computershare Strengths Introduction � Recurring Revenue – >70% of revenue is of a recurring nature � Global Diversification – Across more than 21 countries � High Margins – EBITDA margins >20% � Exposure to northern hemisphere interest rates � Technological innovation and capabilities � Integration of businesses � Strong 5 year EPS growth 8
CEO’s Report Financial Results Introduction 9
Group Financial Performance – A$m Financial Results FY05 FY04 Variance Sales Revenue 1,063.5 871.3 22% Interest & Other Income* 35.4 23.4 51% Total Revenue 1,098.9 894.7 23% Operating Costs* 878.7 711.1 (24%) Share of Net (Profit)/Loss of Associates (1.8) 0.1 Normalised EBITDA 222.1 183.4 21% Non-Recurring Items (9.0) (0.7) EBITDA 231.0 184.1 25% Normalised EPS (pre goodwill, post pref. dividend) 24.27 19.02 28% 10 * Excludes proceeds & costs relating to non-recurring items
Normalised Basic EPS Performance (pre goodwill, post pref. dividend) Financial Results Normalised Basic EPS ( pre goodwill post pref. dividend ) cents 25 23 21 19 17 15 13 11 9 7 FY02 FY03 FY04 FY05 Normalised Basic EPS (pre goodwill, post pref. dividend) 11
Analysis of EPS – Half Year Comparison Financial Results 0.30 – EquiServe 2H05 impact EPS (pre goodwill, post preference dividend) 16 14 12 10 cents 8 14.06 6 10.53 10.21 8.49 8.04 4 2 3.76 0 1H03 2H03 1H04 2H04 1H05 2H05 EPS (pre goodwill, post preference dividend) 12
Full Year Comparisons – Revenue & EBITDA Financial Results Revenue & EBITDA $Am $Am 1200 250 222.1 200 183.4 900 147.6 R E 133.9 e B 150 v I e T 600 n D u A 100 e 300 50 781.0 719.8 894.7 1098.9 0 0 FY02 FY03 FY04 FY05 Revenue Normalised EBITDA 13
Half Year Comparisons – Revenue & EBITDA Financial Results 1H Revenue & EBITDA 2H Revenue & EBITDA $Am $Am $Am $Am 650 140 650 140 127.8 600 600 120 120 103.3 550 550 94.3 100 100 500 80.1 500 79.5 73.2 80 74.4 450 80 450 400 54.4 60 400 596.9 60 350 502.1 350 495.2 40 40 300 396.5 399.5 300 384.5 355.7 364.1 20 20 250 250 200 0 200 0 1H02 1H03 1H04 1H05 2H02 2H03 2H04 2H05 Rev enue Normalised EBITDA Rev enue Normalised EBITDA 14
Return On Invested Capital Vs. WACC Financial Results Stable Returns, Cost of Capital Declines 18% 16% 14% 12% 10% 8% 6% FY02 FY03 FY04 FY05 WACC ROIC 15
Regional Analysis – FY05 Revenue & EBITDA Financial Results Total Revenue Breakdown EBITDA Breakdown 31% 37% 42% 43% 26% 21% Asia Pacific Europe North America Asia Pacific Europe North America 16
Half Year Comparisons – Operating Costs Financial Results Operating Costs Equiserve $Am 30.5 450 300 408.4 439.8 283.1 317.9 393.3 300.8 150 0 1H03 2H03 1H04 2H04 1H05 2H05 17
Technology Costs – Establishing Global Platform Financial Results A$m % 120 22% 106.6 20% 100 18% 87.9 92.1 83.5 16% 80 14% 12% 12% 11% 12% 10% 60 10% 8% 40 6% 4% 20 2% 0 0% FY02 FY03 FY04 FY05 Total Technology costs Technology costs % of sales revenue 18
Analysis of FY05 Technology Costs Financial Results Analysis of Technology Spend 1% 2% 36% 42% 19% Development Infrastructure Maintenance External Bureau Administration 19
Net Operating Cash Flows Financial Results Operating Cash Flows & Capital Expenditure $Am 146.8 136.1 140 120 100 79.4 76.2 80 56.9 60 40 31.6 21.4 17.9 20 0 FY02 FY03 FY04 FY05 Operating Cash Flows Capital Expenditure 20
Capital Expenditure Financial Results CPU Group Capex $Am 60.0 2.2 55.0 50.0 45.0 29.1 40.0 35.0 2.7 30.0 5.8 25.0 0.5 7.7 2.4 6.4 20.0 4.2 2.7 15.0 1.7 1.0 10.0 16.8 17.9 12.8 5.0 14.0 0.0 FY02 FY03 FY04 FY05 Information Technology Document Services Facilities Occupancy Other 21
Working Capital Management Financial Results DSO Days 70 66 62 61 57 60 Receivable Days 50 40 30 20 10 0 FY02 FY03 FY04 FY05 22
Debt Re-financing Financial Results � Settled US Private Placement in March 2005 • Raised USD318.5million for 6 to 12 years � Re-negotiated Multi Currency Revolving Facility in March 2005 • Facility of AUD400million for 1 to 3 years � Average tenor on debt almost 6 years � Significant headroom maintained � Gearing increased to 41% from 33% at December 04 23
Interest Rate Sensitivity Financial Results A$m PBT 120 Impact 100 80 60 40 20 0 -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% -20 -40 -60 Exposure Hedged exposure 100% Hedged -80 Reflects 12 month impact of Equiserve 24
Equity Management – Final Dividend of 6 cps Financial Results � EPS – Normalised Basic (post goodwill) 17.91 cents � EPS – Normalised Basic (pre goodwill) 24.27 cents � Final Dividend (unfranked) 6.0 cents � Full Year Dividend (10% franked half year only) 11 cents � Current Yield * 1.8% * Based on share price of A $6.22 25
Impact of IFRS on Computershare Financial Results Issue Change Impact on CPU Goodwill Annual impairment • FY05 goodwill amortisation of $44.1m will be reversed in FY06 opening Amortisation testing of goodwill balances. instead of amortisation • Impairment testing has been reviewed at both 30 June 2004 and 30 June 2005. No impairment expense is expected. Acquired Separately identified • Impacts FY05 Acquisitions only. CPU elected to “grandfather” pre 30 June Intangible from Goodwill on the 2004 acquisitions. Assets balance sheet • Intangibles of $6.4m have been reclassified from goodwill * • Finite Life Intangibles – amortised over useful life. Results in cumulative amortisation charge of $0.8m in FY05. • Infinite Life Intangibles – subject to annual impairment test. No impairment is expected at 30 June 2005. Restructuring No longer included in • Results in a post tax reduction to Goodwill and net profit of $14.8m in FY05. Provisions goodwill when related • This is a non-recurring item. to an acquisition Share Based Share based • All share based payments recorded as expenses over the relevant vesting Payments remuneration period. expensed in the period • Results in a decrease to Net Profit of $9.0m in FY05. in which the employee provides service 26 * Excludes Equiserve & Pacific Corporate Trust Canada
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