INFORMATION PACK CORPORATE PRESENTATION
DISCLAIMER This presentation may contain ‘forward - looking statements’ with As a result, the Group’s actual future financial condition, respect to certain of the Group’s plans and its current goals and performance and results may differ materially from the plans, goals expectations relating to its future financial performance condition, and expectations set forth in the Group’s forward looking performance, results, strategic initiatives and objectives. Generally, statements. words such as “may”, “could”, “will”, “expect”, “intend”, “estimate”, “anticipate”, “aim”, “outlook”, “believe”, “plan”, Forward-looking statements in this presentation are currently only “seek”, “continue” or similar expressions identify ‘forward -looking as of the date on which such statements are made. The Group statements. undertakes no obligation to update any forward-looking statements, save in respect of any requirement under applicable These forward-looking statements involve risk and uncertainty law or regulation. Nothing in the presentation should be construed because they relate to future events and circumstances which are as a profit forecast. beyond the Group’s control, including amongst other things, UK domestic and global economic business conditions, market-related risks such as fluctuation in interest rates, the policies and actions of regulatory authorities, the impact of competition, inflation, deflation, the timing impact and other uncertainties of future acquisitions or combinations within relevant industries, as well as the impact of tax and other legislation or regulations in the jurisdictions in which the Group operates. 2
INTRODUCTION TO EQUINITI
Equiniti is a leading provider of technology and solutions for complex and regulated administration, serving blue-chip enterprises and public sector organisations 4 4
WHAT WE DO …THAT SHARE A SET OF EQUINITI PROVIDES SERVICES AND SOLUTIONS THAT SUPPORT COMPLEX COMMON CAPABILITIES AND REGULATED PROCESSES… 2015 EST. MARKET KEY SERVICES MARKET POS. SHARE REVENUE SHARE 1 Registration REGISTRATION #1 Shareholder services 50% Technology-led SERVICES INVESTMENT SOLUTIONS Corporate actions and dividends FTSE 100 REGISTERS 32% - £118.3m Employee benefit schemes EMPLOYEE SERVICES #1 25% Employee share plans Data-driven Retail investor services Executive share dealing INVESTMENT Wealth management solutions #4 SERVICES 7% White label share dealing Payments Processing International payments Bn 38% - £142.5m Pension administration to public #2 and private sectors PENSION Regulated, Embedded 15% Pension administration software SOLUTIONS #1 Processes Data analytics PUBLIC SECTOR 27% - £98.9m Loan administration #4 10% INTELLIGENT Enterprise workflow & case management SOLUTIONS Data analytics End-user Engagement COMPLAINTS, CASE MANAGEMENT, AND REGULATORY SERVICES Source: Management information, management estimates 5 1. Interest income accounts for 3% (£9.3m) of 2015 revenue
INVESTMENT SOLUTIONS
INVESTMENT SOLUTIONS - PRODUCTS AND SERVICES REGISTRATION SERVICES EMPLOYEE SERVICES INVESTMENT SERVICES • • • Share registration service Allows employees to save a portion Execution-only trading services • • Administration and payment of of their gross salary Provision of trading services from Retail • dividends SAYE Option to invest in their company’s nominee, ISA, and SIP accounts Registration Share • Management of AGMs, EGMs, other shares (Sharesave) Dealing corporate events • • • Company secretarial services SIP, bespoke Executive and Discretionary Executive and Employee share dealing • Investor relations services SIP & share plans services Co Sec & Specialist • • • Investor analytics services Tax-efficient way of owning a stake in Certificated and online investment Executive Investor Share the company through share incentive dealing Share Dealing Relations plans Plans • • • Servicing the initial notification of Direct management of flexible benefits Foreign exchange services for corporates Bereavement and individuals death and account closing plans • • Services “White labelled’ online execution -only share process Provides ability for staff to shape benefit International Flexible dealing platform with custody and selections Payments settlement solutions Benefits • & Wealth Management of corporate actions, Corporate e.g. rights issues, M&A, corporate Actions activity PROPRIETARY Xanite Payfac TECHNOLOGY PLATFORM 7% MARKET SHARE 50% OF FTSE 100 AND 40% OF FTSE 350 25% MARKET SHARE #4 EXECUTION ONLY RETAIL SHARE DEALING #1 IN SHARE REGISTRATION #1 IN UK EMPLOYEE SHARE PLANS 7
INVESTMENT SOLUTIONS – REVENUE MODEL REGISTRATION SERVICES EMPLOYEE SERVICES INVESTMENT SERVICES • Fixed fee • Trading commissions Retail • Based on No. of shareholders • • Interest earned on balances Registration SAYE ISA administration fee Share • Contract of 3-7 years • • Inactivity fee Dealing fee (Sharesave) • Dealing Fees per transaction for shareholder services Co Sec & • Day rate and running fees Investor SIP & • Specialist Dealing commissions • (contracted) Admin fee paid by corporate client Relations • Executive Share Foreign exchange • Dealing fee paid by employee • Custody fee Share Dealing • Plans Transactional fee Bereavement • Bereavement BPO – corporate fee Services paid by financial institution • • FX margin and transaction fees Contracted • • Share trading commissions Flexible International Paid by the corporate client • Assets under administration charges Payments Benefits Corporate • • Project fee Platform hosting and maintenance & Wealth Actions CONTRACTED REVENUE CONTRACTED REVENUE TRANSACTIONAL REVENUE REVENUE c. 60% c. 80% c. 80% VISIBILITY Reported Reported Organic Investment Solutions 2015 Change % Change % Revenue (£m) 118.3 24.7 9.8 EBITDA prior to exceptional items (£m) 35.5 21.2 EBITDA margin prior to exceptional items (%) 30.0 (0.9)pt 8
PENSION SOLUTIONS
PENSION SOLUTIONS - PRODUCTS AND SERVICES Proprietary Technology Platform: DESCRIPTION Pension Administration: • Outsourced administration and software services for a number of public and private sector pension schemes Life & Pensions: CONTRACTED • Prudential administered schemes outsourced to Equiniti • Resilient core business • Administering annuity books – Visible, high margin and cash generative NHS: • Market leadership , brand & • Provide software and specialist admin services reputation – Long heritage with services since 1836 Data Solutions: • High client fidelity • Data analytics, complex and bulk calculation services to pension schemes and – Long-standing customer relationships with life insurance companies PROJECT & some of the largest UK companies SOFTWARE Pension Software: • • Customised software to efficiently and effectively manage the rules of all Supportive macroeconomic and pension schemes regulatory trends • Platform for cross-selling of additional • Pension administration services to the Civil Service services • 51% owned JV with government MyCSP – Strong expansion in add-on services MARKET POSITION #1 #2 ~15% PUBLIC SECTOR THIRD PARTY MARKET SHARE ADMINISTRATION 10
PENSION SOLUTIONS – REVENUE MODEL REVENUE TYPE REVENUE MODEL • Pension Administration and Life & Pensions: Transactional – Fixed yearly fee for core administration – Most contracts include variable components based on members or administrative tasks Project • NHS: CONTRACTED – Payroll admin revenue based on number of pensioners – Software project income charged on a time and materials basis – Ancillary income charged as cost + pricing Contracted • CONTRACTED REVENUE Data Solutions: REVENUE – Project fees charged on ongoing basis for c. 70% VISIBILITY services provided PROJECT & • Pension Software: SOFTWARE – License fees (perpetual or recurring) – Maintenance fees (fixed) – Specific fees for implementation / development projects Reported Reported Organic PENSION SOLUTIONS • Fixed fee contract with yearly fees agreed 2015 Change % Change % upfront Revenue (£m) 142.5 40.7 8.0 • Project income charged on a time and MyCSP materials basis EBITDA prior to exceptional items (£m) 26.8 23.5 EBITDA margin prior to exceptional items (%) 18.8 (2.6)pt 11
INTELLIGENT SOLUTIONS
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