Results for year ended 31 DECEMBER 2019 Guy Wakeley Chief Executive - - PowerPoint PPT Presentation

Results for year ended

31 DECEMBER 2019

Guy Wakeley – Chief Executive Rob Bloor – Group Financial Controller

Agenda

01

Introduction

05

Summary & Outlook

02

Summary

06

Q&A

03

Strategic & Operational Review

2 | Equiniti Group plc 2020

04

Financial Review

Summary Continuing strategic progress

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| Equiniti Group plc 2020

 Growth sustained in a challenging operating environment  North American business separation completed  Progress with cash generation, leverage and debt  Scale and resilience building

Strategic & Operational Review

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| Equiniti Group plc 2020

2019) 2018) Change) Revenue (£m) 555.7) 530.9) 4.7% Underlying EBITDA (£m) 136.0) 129.5) 5.0% Cash flow conversion (%) 91) 102) (11.0%) Profit before tax (£m) 39.8) 24.3) 63.8% Net Debt (£m) 343.6) 352.0) (2.4%) Leverage (x) 2.5) 2.7) 0.2x Underlying Earnings Per Share (pence) 18.1) 17.8) 1.7% Dividend (pence) 5.49 5.32 3.2%

Financial Highlights Continued progress in a challenging environment

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Challenges / Successes Resilience demonstrated in a challenging environment

Successes Challenges (Revenue)

US interest rates impact (£3m) UK/US corporate action weakness (£8m) Retail share dealing down (£3m) MyCSP price reduced (£2m) 15 client wins in share registration Remediation volumes up 6% 60 share plan launches Revenue growth excl pensions 7% Asset base up 7%

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Operational Highlights Investing for future growth

Infrastructure Investment Growth

• Separation from Wells Fargo achieved and $5m synergies delivered to plan; on track

to deliver $10m in 2020

• UK and US datacenters reprovisioned, and network operation centres deployed in

Chennai and Bangalore

• US HR and Finance systems transitioned to Workday in global deployment
• Operating scale and resilience transformed with new centres in Milwaukee,

Wisconsin and Bangalore

• New technology centre launched in Krakow for 160 new application developers
• £39m invested in core operating platforms
• Platform investment maintained despite economic environment
• Unprecedented number of wins for share plans and share registration
• Organic launch of equity compensation plans and proxy advisory in North America
• Remediation volumes resilient
• Acquisition of Monidee to transform global share plan proposition

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Divisional Review

Our purpose is to care for every customer and simplify every transaction

INTELLIGENT SOLUTIONS Regulatory technology and services for credit, remediation and risk/fraud PENSION SOLUTIONS Pensions administration, payments and software for Government and employers of life companies EQ US Transfer agency, equity compensation and related services for North American corporates INVESTMENT SOLUTIONS Share registration, share plans and governance solutions for UK listed businesses

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Organic Growth 3.7% Margin 33.5% Recurring Revenue c80%

Investment Solutions

Market Share c50%

15 60 £119bn

New clients New share plans for 33 clients Regulated & non- regulated AuA

£75bn

Total payment flows

Successes Challenges

• Corporate action weakness

£7m

• Retail share dealing

£3m

• Regulated assets

+7%

• New share plan launches

60

• New clients

15

• Boardroom Advisory Services Launched

Continuing market leadership

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Driving growth after separation Organic Growth 2.7% Margin 24.6% Recurring Revenue c70%

EQ US

Market Share c15%

• Separation completed 26 May 2019
• New shareholder portals launched
• 7 new clients for equity compensation

services including channel partnership with Vanguard and Wells Fargo

• ADR programmes for existing UK clients

including Barclays, GSK, Prudential & Royal Dutch Shell

5m 4 £185bn

Number of shareholders on register Net new clients mobilised Total payment flow

• Interest rates

£3m

• Corporate action weakness

£1m

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Successes Challenges

Growth driven by regulation Organic Growth 3.0% Margin 25.5% Recurring Revenue c40%

Intelligent Solutions

Market Share

• Emerging Regulatory Themes
• PCP car finance
• Pension freedoms
• Interest only mortgages
• Energy contracts
• Move to a market-led structure

2,100 36 £13bn

Remediation resources deployed New software licenses sold Total payment flows #1 Unsecured Loans (Retail Finance) #2 Motor Finance #2 Remediation Services

• Conversion of discretionary spend

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Opportunities Challenges

Progress with revenue stabilisation in H2 Organic Growth (5.5%) Margin 15.4% Recurring Revenue c80%

Pension Solutions

Market Share c25%

8 4 5m

Net new client wins Software licenses sold Pension members served

£27bn

Total payment flows

• Reduction and delays to project work
• Full year impact of change in scope to

NHS contract

• Step down in MyCSP contract
• Revenue stabilisation in H2
• New client wins
• Multiple sales of Aquila platform

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Successes Challenges

Structural Growth in Equiniti’s Core Shareholder Markets

17.6 20.1 21.9 25.4 25.3

2015 2016 2017 2018 2019

UK Regulated Assets under Administration £bn Non-Regulated Assets under Administration £bn Payment flows £bn On register shareholders and retail customers (m)

90 157 88 93 115

2015 2016 2017 2018 2019

UK US 72.2 80.1 90.2 80.2 93.5

2015 2016 2017 2018 2019

9.6 10.2 10.5 11.2 11.6

2015 2016 2017 2018 2019 519.7

CAGR 9% CAGR 35% (6% UK only) CAGR 14% (5% UK only)

4.8

CAGR 71% (7% UK only)

408.0

5.0

1 2 3 4

Structural growth in markets ahead of GDP

185 242

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Sustainable Financial Performance Continuing progress against key metrics

369.0 382.6 406.3 530.9 555.7

Revenue £m

FY 2015 FY 2016 FY 2017 FY 2018 FY 2019 86.2 92.4 98.2 129.5 136.0

Underlying EBITDA £m/Margin %

FY 2015 FY 2016 FY 2017 FY 2018 FY 2019

• 71.7

28.5 25.3 24.3 39.8

Profit Before Tax £m

FY 2015 FY 2016 FY 2017 FY 2018 FY 2019 113 100 93 102 91

Operating Cash Flow Conversion %

FY 2015 FY 2016 FY 2017 FY 2018 FY 2019 3.4 3.0 2.7 2.7 2.5

Leverage Post IFRS-16 X

FY 2015 FY 2016 FY 2017 FY 2018 FY 2019 9.5 9.7 9.6 9.8 9.8

ROCE %

FY 2015 FY 2016 FY 2017 FY 2018 FY 2019 23.4% 24.2% 24.2% 24.4% 24.5%

CAGR 12% CAGR 12%

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100% incl RFF 98% excl RFF

Organic business Operating cash flow deployment

Structural growth Strong cash generation Strong operating leverage

Shareholder returns 30%

• f underlying

profit Acquisitions > 15% ROCE Organic investment 6 – 7% of revenue

3 – 7% Organic revenue growth

Optimised capital allocation

Progressive earnings and dividend growth

Deleverage 2.0 – 2.5x

Capital Allocation Model

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Financial Review

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Group Income Statement

£m 2019) 2018*) Change %**)

Revenue 555.7) 530.9) 4.7) Underlying EBITDA 136.0) 129.5) 5.0) Depreciation (12.9) (12.0) 7.5) Amortisation – software (29.9) (23.9) 25.1) Amortisation – acquired intangibles (31.8) (31.7) 0.3) EBIT prior to non-operating charges 61.4) 61.9) (0.8) Non-operating charges (5.5) (20.8) (73.6) EBIT 55.9) 41.1) 36.0) Finance costs (16.1) (16.8) (4.2) Profit before tax 39.8) 24.3) 63.8)

• Amortisation of software higher due to the completion of the development of a number of significant projects, such as investment in the US

and MiFID II, where the work completed in 2018 and the assets became available to use with amortisation of the assets commencing

• Cessation of non-operating charges following separation of EQ US in May 2019

* 2018 numbers throughout this presentation have been revised to reflect impact of IFRS 16 ** Change at actual foreign exchange rates. Revenue change at constant foreign exchange rates is 4.0% and underlying EBITDA is 4.5%

Progress across key metrics

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Group Income Statement

*EQ US reported revenue change at constant foreign exchange rates is 11.0% and underlying EBITDA is 10.5%. **Organic change % is at constant foreign exchange rates ***The acquisition of EQ US completed on 1 February 2018 and results were consolidated into the Group from that date. Prior period performance is from 1 February 2018 to 31 December 2018

Good progress across the Group

£m 2019) 2018) Reported) Change %*) Organic) Change %**) Revenue Investment Solutions 149.7) 142.5) 5.1) 3.7) Intelligent Solutions 170.9) 165.9) 3.0) 3.0) Pension Solutions 127.0) 129.0) (1.6) (5.5) Interest Income 14.1) 12.1) 16.5) 16.5) Total UK & Europe 461.7) 449.5) 2.7) 1.1) EQ US*** 94.0) 81.4) 15.5) 2.7) Group Revenue 555.7) 530.9) 4.7) 1.4) Underlying EBITDA Investment Solutions 50.2) 48.5) 3.5) Intelligent Solutions 43.5) 41.1) 5.8) Pension Solutions 19.5) 22.3) (12.6) Interest Income 14.1) 12.1) 16.5) Total UK & Europe 127.3) 124.0) 2.7) EQ US*** 23.1) 20.3) 13.8) Divisional Total 150.4) 144.3) 4.2) Central Costs (14.4) (14.8) (2.7) Group Underlying EBITDA 136.0) 129.5) 5.0) Group Underlying EBITDA margin % 24.5) 24.4) 0.1)

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Trading Performance

Revenue

Reported growth 4.7% / Organic growth 1.4%

555.7 530.9

Investment Solutions Intelligent Solutions Pension Solutions Interest EQ US

7.2 5.0 (2.0) 2.0 12.6 136.0 129.5

Investment Solutions Intelligent Solutions Pension Solutions Interest EQ US

1.7 2.4 (2.8) 2.0 2.8 0.4

Central Costs

Underlying EBITDA

Reported growth 5.0%

2018 2019 2018 2019

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Intelligent Solutions

• Solid progress on

back of strong comparator in H2 2018 with growth driven by remediation and credit services Pension Solutions

• Pleasing performance

as revenue stabilised in H2 2019 with new client wins and good client retention

• Year on year decline

mainly driven by MyCSP price step-down Interest

• Growth in interest

income benefitting from UK interest rate rise of 25bps in August 2018

• Two thirds of UK client

balances hedged – on a 5 year rolling basis

• Two thirds of US client

balances hedged – to end 2020 EQ US

• Revenue growth

includes £11m from a full year of earnings and FX impact offset by lower level of corporate actions and interest rate cuts in H2 2019

• Corporate actions

revenue of £10.9m (2018: £12.3m)

• Delivery of synergies

supporting profit progress Central Costs

• Broadly flat, in line with

medium-term goal Investment Solutions

• Growth driven by

continued market share gains in registration and share plan services

• ffset by slower

corporate actions in H2 2019

• Corporate actions

revenue of £11.6m (2018: £18.8m)

The acquisition of EQ US completed on 1 February 2018 and results were consolidated into the Group from that date. Prior period performance is from 1 February 2018 to 31 December 2018.

H1/H2 Trading Performance Solid progress despite H2 headwinds

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Organic Change% Revenue – £m H1 2019) H2 2019) FY 2019) H1 2019) H2 2019) FY 2019) Investment Solutions 73.1) 76.6) 149.7) 5.0) 2.7) 3.7) Intelligent Solutions 83.9) 87.0) 120.9) 7.2) (0.6) 3.0) Pension Solutions 62.7) 64.3) 127.0) (8.6) (2.4) (5.5) Interest 6.6) 7.5) 14.1) 10.0) 21.0) 16.5) EQ US 48.8) 45.2) 94.0) 10.7) (4.6) 2.7) Total Revenue 275.1) 280.6) 555.7) 3.2) (0.4) 1.4) Total Underlying EBITDA 60.9) 75.1) 136.0)

Intelligent Solutions

• H2 slowed with a

delay in project work in run up to UK election combined with a strong comparator in 2018 when the business grew over 30% through remediation services

Pension Solutions

• Step down in MyCSP

contract impacted the year but business stabilising with a stronger performance in H2

Investment Solutions

• Lower level of

corporate actions and retail share dealing in H2 offset by a software licence sale for our FX software and a growing client base

EQ US

• Lower level of corporate

actions in H2 (£8.7m 2018: £5.4m 2019) and interest rate cuts

• Excluding timing of

corporate actions, the business grew 7% in H2 in line with our medium term expectations

Cash Flow Strong underlying cash flow in the period, with deleveraging profile in H2

£m 2019) 2018) Underlying EBITDA 136.0) 129.5) Working capital movement (12.9) 2.3) Operating cash flow prior to non-operating charges 123.1) 131.8) Operating cash flow conversion (%) 91) 102) Cash outflow on non-operating charges (11.0) (17.6) Capital expenditure (48.5) (39.8) Net interest costs (16.9) (10.3) Taxes paid (2.7) (4.5) Employee benefit trust – share purchase – (13.9) Finance lease payments (6.9) (7.1) Free cash flow attributable to equity holders 37.1) 38.6) Net (reduction) / increase in borrowings (21.4) 139.3) Net costs arising from rights issue – (0.8) Investment in current and prior year acquisitions (3.3) (177.6) Payments relating to prior year acquisitions (8.2) (4.0) Dividends paid (including payment to non-controlling interest) (21.9) (20.2) Net cash movement (17.7) (24.7)

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Free Cash Flow to Equity holders Strong free cash flow to equity holders in H2 2019 and going forward

£m H1 2019) H2 2019) FY 2019) FY 2018) Underlying EBITDA 60.9) 75.1) 136.0) 129.5) Working capital movement (10.2) (2.8) (12.9) 2.3) Operating cash flow prior to non-operating charges 50.7 72.3) 123.1) 131.8) Operating cash flow conversion (%) 83 96) 91) 102) Cash outflow on non-operating charges (11.0) – (11.0) (17.6) Capital expenditure (25.7) (22.8) (48.5) (39.8) Net interest costs (7.0) (9.9) (16.9) (10.3) Taxes paid 0.4) (3.1) (2.7) (4.5) Employee benefit trust – share purchase (0.2) 0.2) – (13.9) Finance lease payments (3.7) (3.2) (6.9) (7.1) Free cash flow attributable to equity holders 3.5) 33.6) 37.1) 38.6)

• Strong growth in free cash flow to equity holders in H2 and going forward
• Disciplined capital allocation between dividend, reduction of debt and selective M&A
• Strong cash flow conversion in H2 offset by the end of the beneficial US TSA arrangements and a further reduction of the receivables

financing facility

• H2 interest costs include £3.6m refinancing fee

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Operating Working Capital Movements

Key 2019 Movements

• Higher cash flow resulting from a strong collection of receivables in Q4 in both Intelligent Solutions and Pensions Solutions,

partly offset by an increase in contract assets (timing of the closure of deals at year end)

• Operating Payables: the decrease reflects the unwinding of the WFSS TSAs agreement in the US, a reduction in performance

related employee bonus accruals and timing of sales affecting VAT payments

£m 2019) 2018) Underlying EBITDA 136.0) 129.5) Change in receivables and accrued income 4.9) (16.4) Change in operating payables (16.5) 15.2) Share-based payments expense 1.6) 4.9) Other (2.9) (3.7) Operating cash flow prior to non-operating charges 123.1) 131.8)

Medium term guidance of c95% cash conversion

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Net Debt Reconciliation US separation concluded, clear deleveraging focus going forward

Non-recurring items

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Non-recurring = £15.2m

Accrued Income / Receivables Decrease in trade receivables with continued reduction in receivables financing facility

2018 Accrued Income and Trade Receivables valued at constant currency

• Accrued income increased due to timing of billing in Q4
• Trade receivables decreased despite the reduction in the

receivables financing facility due to strong Q4 collections

• DSO days maintained within 55 – 60 range; overall DSO

declined by 3 days versus FY 2018

Receivables £m Days Sales Outstanding

• No revenue recognised without a contract in place;

2019 bad debt expense of £0.3m (2018: £0.2m)

• The Group has access to a £20.0m receivables

financing facility of which £8.0m was utilised at the end

• f the period (2018: £10.3m); this facility is expected to

reduce further, subject to commercial requirements

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Non-Operating Charges Separation Of US Operations Complete – Cessation of Non-Operating Charges

£m FY 2019) FY 2018) FY 2017)

Transaction costs (0.3) (6.1) (6.3) Integration costs (5.2) (14.7) (3.6) Restructuring and transformation costs – – (0.6) Total Non-Operating Charges (5.5) (20.8) (10.5)

• Transaction costs reflect deal advisory and legal fees which were contingent on successful completion of the

WFSS transaction

• Integration costs only relate to the US and include programme delivery, the development of standalone

functions and delivery of systems and processes to run the business

• US separation completed in May 2019, zero non-operating charges recorded in H2 2019

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Capital Expenditure CAPEX will stabilise at 6 – 7% of revenue over the medium term

£m FY 2019) FY 2018) Property (2.5) ) (1.6) ) Software development and IT infrastructure (39.0) ) (27.5) ) EQ US integration (7.0) ) (10.7) ) Total capital expenditure (cash) (48.5) ) (39.8) ) As % of Group revenue

)888.7%)

7.5%) As % of Group revenue (excl US) 7.5%) 5.5%)

• Property spend driven by the consolidation and

improvement of our sites

• In 2019, we opened new sites in Bangalore,

Milwaukee and Krakow, expanding our ability to serve clients

• Software development and IT infrastructure spend

driven by a high level of projects such as transitioning

• ur Group Finance and HR systems to Workday, investing

in new portals, products and services for the US and our Life and Pensions software

• US integration spend reflects IT server purchases and software

development to enable the business to operate on a standalone basis

• US separation completed May 2019, expectation is that capex

will stabilise to 6 – 7% of revenue over the medium term

• Excluding US separation, capex was 7.5% in 2019, slightly

higher than guidance with new office openings, a high level

• f IT projects such as introducing Workday to the Group and

investing in new portals and products in the US

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Net Debt and Leverage Clear deleveraging profile going forward

• Leverage of 2.5x at year end, absent IFRS 16, leverage

would have been 2.3x

• Debt facility extended to July 2024; £520.0m facility split

between term loan and RCF; initial margin of 150bps; fees

• f £3.6m paid in July 2019
• The Group has substantial liquidity to support its growth

ambitions and ongoing working capital requirements

• Acquisitions will be very selective in the short-term as

the Group moves towards the lower end of 2.0 – 2.5x target leverage £m Reported) 2019) Revised) 2018) Reported) 2018) Term loan 260.1) 322.6) 322.6) Revolving credit facility 115.0) 76.7) 76.7) Finance lease liabilities 41.1) 43.6) 1.1) Cash and cash equivalents (72.6) (90.9) (90.9) Total net debt 343.6) 352.0) 309.5) Net debt/underlying EBITDA (x) 2.5) 2.7) 2.5)

3.4 3.0 2.7 2.7 2.5

FY 2015 FY 2016 FY 2017 FY 2018 FY 2019

Leverage Post-IFRS 16 Net Debt

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Medium Term Guidance Maintained

Revenue Growth Gradual Margin Improvement Progressive Dividend Policy

payout ratio of underlying profit per annum

3-7% c25bps c30%

Cash Tax Rate Cash Conversion Net Debt/Underlying EBITDA

pre capital expenditure Capital expenditure at 6-7%

• f revenue

15% for 2020 17% thereafter c95% 2.0 – 2.5x

Organic growth per annum Supplemented by capability-enhancing acquisitions 2020 organic growth comparable to 2019 held back by interest rates Post-IFRS 16

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Summary & Outlook

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COVID-19 Planning

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| Equiniti Group plc 2020

• Operational preparedness and resilience
• Few supply-chain dependencies
• Defensive and recurring revenue model
• Market uncertainty weighs on discretionary decisions
• Increased likelihood of interest rate cuts

Significant environmental uncertainties

Outlook Continuing strategic and financial progress

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 Long-term growth drivers unchanged  Near-term uncertainties in discretionary decisions and interest income  Client base and revenue model remain highly defensive  Multiple opportunities in North America  Disciplined focus on cash generation and deleverage  Continuing investment in product and digitisation

Summary Continuing strategic progress

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| Equiniti Group plc 2020

 Growth sustained in a challenging operating environment  North American business separation completed  Progress with cash generation, leverage and debt  Scale and resilience building

Questions

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| Equiniti Group plc 2020

Disclaimer

This presentation may contain ‘forward-looking statements’ with respect to certain of the Group’s plans and its current goals and expectations relating to its future financial performance condition, performance, results, strategic initiatives and

• bjectives. Generally, words such as “may”, “could”, “will”, “expect”, “intend”, “estimate”, “anticipate”, “aim”, “outlook”,

“believe”, “plan”, “seek”, “continue” or similar expressions identify ‘forward-looking statements. These forward-looking statements involve risk and uncertainty because they relate to future events and circumstances which are beyond the Group’s control, including amongst other things, UK domestic, US 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. As a result, the Group’s actual future financial condition, performance and results may differ materially from the plans, goals and expectations set forth in the Group’s forward looking statements. Forward-looking statements in this presentation are currently only as of the date on which such statements are made. The Group undertakes no obligation to update any forward-looking statements, save in respect of any requirement under applicable law or

• regulation. Nothing in the presentation should be construed as a profit forecast.

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• Appendix

Trading Performance

Reported Change % Organic Change% Revenue – £m H1 2019 H2 2019 H1 2019 H2 2019 H1 2019 H2 2019 Investment Solutions 73.1) 76.6) 6.1) 4.1) 5.0) 2.7) Intelligent Solutions 83.9) 87.0) 7.2) (0.6) 7.2) (0.6) Pension Solutions 62.7) 64.3) (4.1) 1.1) (8.6) (2.4) Interest 6.6) 7.5) 10.0) 21.0) 10.0) 21.0) Total UK & Europe 226.3) 235.4) 3.5) 1.9) 1.7) 0.5) EQ US 48.8) 45.2) 37.9) (1.7) 10.7) (4.6) Total Revenue 275.1) 280.6) 8.3) 1.3) 3.2) (0.4) Underlying EBITDA £m Investment Solutions 23.4) 26.8) 2.2) 4.7) Intelligent Solutions 19.8) 23.8) 8.8) 3.9) Pension Solutions 9.0) 10.5) (17.4) (7.9) Interest 6.6) 7.5) 10.0) 23.0) Total UK & Europe 58.8) 68.6) 1.4) 3.9) EQ US 10.6) 12.5) 32.5) 1.6) Divisional Total 69.4) 81.0) 5.2) 3.4) Central Costs (8.5) (5.9) 14.9) (20.3) Total Underlying EBITDA 60.9) 75.1) 3.9) 5.9)

Solid progress despite H2 headwinds

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Tax Attributes

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| Equiniti Group plc 2020

• The Group has recognised deferred tax on £767.1m of gross tax attributes representing future tax deductions which will reduce the cash

effective tax rate as compared to the underlying effective tax rate over time. Net future deductions are expected to be in the region of £128.0m, on which a net deferred tax asset of £20.3m has been recognised at the relevant local statutory rate.

• Included within intangibles above is the goodwill and customer relationship intangible assets related to the acquisition of EQ US on 1 February
• 2018. These intangible assets are tax deductible for US tax purposes.
• Tax losses above primarily relate to amounts carried forward within Equiniti Limited. These losses continue to be utilised at an increasing rate

and therefore the deferred tax asset is considered to be recoverable in full.

• A cash effective tax rate of 12% applies for 2019 and is estimated to be in the region of c15% for 2020 rising to c17% thereafter, reflecting the

completion of the integration, and forecast growth, of EQ US. The cash tax rate is determined through a detailed calculation of the future expected cash tax liabilities of the Group against our profit forecasts, adjusting for known variables such as changes in tax rates, known changes in tax legislation and full implementation of the Group transfer pricing policy.

• We consider the underlying cash effective tax rate to be an appropriate measure, as it best reflects the anticipated economic outflows from the

business, taking into account our assessment of how our deferred tax attributes will unwind and reduce our cash tax liabilities over time.

£m 2019 Future tax deductions on tax losses carried forward Future tax deductions on intangible assets Future tax deductions on property, plant and equipment Future tax deduction on employee benefits and other timing differences 200.7 479.7 28.3 58.4 Total tax assets 767.1

IFRS 16 – 0.2x Impact on Leverage

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| Equiniti Group plc 2020

• Only impact is on our property lease portfolio
• Tangible fixed assets increased by £36.2m on

1 January 2019

• Lease liabilities increased by £42.5m on 1 January 2019
• The above items were driven by the recognition of our

property lease portfolio on balance sheet

• The Group's net debt/underlying EBITDA measure will

increase by 0.2x in 2019

No Impact on Net Cash Outflows Or PBT For Year Ended 31 December 2019

Areas of impact

• Underlying EBITDA for the 12 months to 31

December 2019 is approximately £7.2m higher as a result of IFRS 16

• Depreciation expense for the 12 months to 31

December 2019 increased by £6.1m

• Interest expense for the 12 months to 31

December 2019 increased by £1.5m

• No impact on the net cash outflows or profit before

tax for the year ended 31 December 2019

The Group transitioned to IFRS 16 using the modified retrospective method, simplifying the complexity of transition. A fully retrospective approach would have given greater comparability, but many leases commenced in companies before they joined the Equiniti Group and the history of each of these leases was not readily available at the point of transition.