computershare limited half year results 2013 presentation management presentation.pdf · stuart...
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Computershare LimitedHalf Year Results 2013 Presentation
Stuart CrosbyPeter Barker
13 February 2013
2
Introduction Financial Results
CEO’s Report
PRESIDENT & CHIEF EXECUTIVE OFFICER
Stuart Crosby
Introduction
4
Results SummaryStatutory Results
Introduction
* Prior period Statutory results were restated due to re-measurement of put option liability. Refer to ASX Appendix 4D Note 2
Note: all figures in this presentation are in USD M unless otherwise indicated
Management adjusted results are used, along with other measures, to assess operating business performance. The Company believes that exclusion of certain items permits better analysis of the Company’s performance on a comparative basis and provides a better measure of underlying operating performance.
Management adjustments are made on the same basis as in prior years. They are predominantly non-cash items.
This year’s non-cash management adjustments include significant amortisation of identified intangible assets from businesses acquired in recent years, which will recur in subsequent years, and one-off charges.
Cash adjustments are predominantly expenditure on acquisition-related and other restructures, and will cease once the relevant acquisition integrations and restructures are complete.
A full description of all management adjustment items is included in the ASX Appendix 4D Note 8.
The non-IFRS financial information contained within this document has not been reviewed or audited in accordance with Australian Auditing Standards.
1H13 Vs 2H12 Vs 1H12 (pcp)
Earnings per share (post NCI) 17.02 cents 54.1%* (15.2%)*
Total Revenues $987.6m (7.7%) 25.4%Total Expenses $895.0m (9.2%) 38.8%Statutory Net Profit (post NCI) $94.6m 54.1%* (15.2%)*
Reconciliation of Statutory results to Management Adjusted results 1H13
Net profit after tax per statutory results $94.6m
Management Adjustments (after tax)Recurring – Amortisation – Intangibles 33.0Recurring – Marked to Market (0.4)Recurring – Indian acquisition put option liability 0.8Non Recurring – Acquisition costs 20.9Non Recurring – Provision for tax liability 0.4Total Management Adjustments $54.7m
Net Profit after tax per Management Adjusted results $149.3m
5
Note: all results are in USD M unless otherwise indicated
Results SummaryManagement Adjusted Results
Introduction
1H 2013 2H 2012 v 2H 2012 1H 2012 v 1H 2012
1H 2013 @ 1H 2012 exchange rates
Management Earnings per share (post NCI)US 26.87 cents
US 26.00 cents Up 3.3%
US 23.09 cents Up 16.4%
US 27.26 cents
Total Revenue $987.6 $1,037.3 Down 4.8% $781.4 Up 26.4% $1,003.4
Operating Costs $746.3 $790.2 Down 5.6% $569.9 Up 30.9% $758.9
Management Earnings before Interest, Tax, Depreciation and Amortisation (EBITDA) $241.4 $247.5 Down 2.4% $211.5 Up 14.1% $244.6
EBITDA Margin 24.4% 23.9% Up 60 bps 27.1% Down 270 bps 24.4%
Management Net Profit after NCI $149.3 $144.5 Up 3.3% $128.3 Up 16.4% $151.5
Days Sales Outstanding 48 days 43 days Up 5 days 42 days Up 6 days
Cash Flow from Operations $133.3 $188.2 Down 29.2% $146.4 Down 8.9%
Free Cash Flow $109.7 $158.1 Down 30.6% $136.4 Down 19.6%
Capital Expenditure $23.9 $37.9 Down 36.9% $24.2 Down 1.2%
Net Debt to EBITDA ratio 2.72 times 2.86 times Down 0.14 times 2.92 times Down 0.20 times
Interim Dividend AU 14 cents AU 14 cents Flat AU 14 cents Flat
Interim Dividend franking amount 20% 60% Down from 60% 60% Down from 60%
6
Drivers Behind 1H13 Financial PerformanceIntroduction
› Revenue in transactional business lines, especially corporate actions, remain depressed. Proxy solicitation (corporate and mutual fund) still suffering.
› Register maintenance revenues better, but still soft due to lower activity based fees and holder attrition.
› Continued strong cost focus in traditional business lines, to some extent masked by technology investment and capex to support integration. A simple example –if all synergies expected from the Shareowner Services integration were already realised, EBITDA margin would be nearly 3% higher.
› Employee share plans continue to perform strongly, with continuing realisation of benefits from the HBOS EES acquisition (migrations almost completed).
› Margin balances remain strong, but today’s liquidity environment puts pressure on what banks will pay for deposits and therefore on yields on rolled hedges.
› Serviceworks group continues to track well and ahead of plan.
› SLS continues to win business but growth has slowed as some on-boardings have been delayed by external factors. We remain very confident about the business going forward, but are realising that growth can be quite lumpy.
Computershare Strengths
7
Introduction
› Leading market position in all major markets for equity investor record-keeping and employee stock plan administration based on:
› sustainable advantages in technology, operations, domain knowledge and product development;
› sustained quality excellence and operational efficiency; and
› a joined-up global platform (20+ countries including China, India and Russia), and seamless development and execution of cross-border solutions.
› Demonstrated track record for successfully moving into new business lines with similar operational and market profiles, and integrating and delivering synergies from acquisitions in existing business lines.
› Well over 70% of revenues recurring in nature.
› Long track record of excellent cash realisation from operations.
› Balance sheet remains strong and gearing remains prudent, with average maturity 5 years and no more than USD 305M maturing in any one financial year.
Guidance
8
Introduction
› In November 2012 at the AGM we said that we expect Management eps to be between 10% and 15% higher than in FY12.
› Since November, there has been an increase in optimism about a range of the economies in which we operate and equity market price levels have risen. To date, we have seen no material flow through of these factors to our businesses.
› We continue to expect Management eps for FY13 to be between 10% and 15% higher than in FY12.
› As usual, our assessment of the outlook assumes that equity, foreign exchange and interest rate markets remain at current levels.
9
Introduction Financial Results
CEO’s Report
CHIEF FINANCIAL OFFICER
PETER BARKER
FinancialResults
11
Group Financial Performance
Note: all results are in USD M unless otherwise indicated
FinancialResults
1H 2013 2H 2012 % variance to 2H 2012 1H 2012 % variance to
1H 2012
Sales Revenue $974.7 $1,030.6 (5.4%) $772.0 26.3%
Interest & Other Income $12.9 $6.7 92.6% $9.4 37.2%
Total Revenue $987.6 $1,037.3 (4.8%) $781.4 26.4%
Operating Costs $747.6 $790.2 (5.4%) $569.9 31.2%
Share of Net (Profit)/Loss of Associates ($1.4) ($0.3) ($0.1)
Management EBITDA $241.4 $247.5 (2.4%) $211.5 14.1%
Statutory NPAT $94.6 $61.4 54.1% $111.5 (15.2%)
Management NPAT $149.3 $144.5 3.3% $128.3 16.4%
Management EPS (US cents) 26.87 26.00 3.3% 23.09 16.4%
Statutory EPS (US cents) 17.02 11.04 54.1% 20.06 (15.2%)
12
Management EPS FinancialResults
31.38 26.96
23.09 26.87 26.42
28.71 26.00
57.80 55.67
49.09
0
10
20
30
40
50
60
70
2010 2011 2012 2013
US
Cen
ts
1H 2H FY
13
1H13 Management NPAT Analysis FinancialResults
128.3
149.3
34.3
1.8 0.01.6 0.5
9.65.7
2.514.7
3.40.4
100
110
120
130
140
150
160
170
180
1H12NPAT
EBITDA -USA
EBITDA -Canada
EBITDA -ANZ
EBITDA -UCIA
EBITDA -ASIA
EBITDA -CEU
EBITDA -Tech &Corp
TaxExpense
InterestExpense
Dep'n &Amort
NCI 1H13NPAT
USD
M
14
Revenue & Management EBITDAHalf Year Comparisons
FinancialResults
807.5 812.1781.0
837.6781.4
1,037.3987.6
274.8 236.1 246.0 247.6
211.5247.5 241.4
34.0%
29.1%31.5%
29.6%27.1%
23.9% 24.4%
0%
10%
20%
30%
40%
50%
60%
0
200
400
600
800
1,000
1,200
1H10 2H10 1H11 2H11 1H12 2H12 1H13
Ope
rati
ng M
argi
n %
Rev
enue
& E
BIT
DA
USD
M
Revenue Management EBITDA Operating Margin
15
Revenue Breakdown FinancialResults
Note: all results are in USD M unless otherwise indicated
Revenue Stream 1H 2013 2H 2012 % variance to 2H 2012 1H 2012 % variance to
1H 2012
Register Maintenance $394.7 $440.6 (10.4%) $334.2 18.1%
Corporate Actions $92.8 $88.7 4.7% $67.4 37.7%
Business Services $241.8 $234.7 3.0% $148.3 63.1%
Stakeholder Relationship Mgt $31.2 $52.2 (40.2%) $34.6 (9.9%)
Employee Share Plans $112.5 $112.3 0.1% $85.0 32.3%
Communication Services $98.3 $91.7 7.3% $90.3 8.9%
Technology & Other Revenue $16.3 $17.2 (5.0%) $21.5 (24.3%)
Total Revenue $987.6 $1,037.3 (4.8%) $781.4 26.4%
Revenue & Management EBITDA – Regional AnalysisHalf Year Comparisons
16
Revenue Breakdown EBITDA Breakdown
FinancialResults
41.6 31.6 31.6 27.2 36.0
30.8
19.9 19.4 15.0
18.1
56.8
62.4 60.7 56.9
60.7
2.2 12.4
3.1 7.4
4.0
66.2 69.1
43.2 90.2 77.6
48.4 52.2
53.6
50.8 45.1
246.0 247.6
211.5
247.5 241.4
0
50
100
150
200
250
300
1H11 2H11 1H12 2H12 1H13
USD
M
Australia & NZ Asia UCIA Continental Europe USA Canada
184.3 180.9 214.1 200.7 232.2
68.3 57.5 57.1 54.0
59.7
141.2 162.9 147.9 156.9
150.4 34.3 58.1 45.1 62.9 41.1
258.5 266.4 217.7
452.5 407.2 94.5
111.7 99.4
110.5 97.0
781.0 837.6
781.4
1,037.3 987.6
0
200
400
600
800
1,000
1,200
1H11 2H11 1H12 2H12 1H13
USD
M
Australia & NZ Asia UCIA Continental Europe USA Canada
17
Margin Income Analysis
Average Market Interest rates *
1H10 2H10 1H11 2H11 1H12 2H12 1H13UK 0.50% 0.50% 0.50% 0.50% 0.50% 0.50% 0.50%US 0.25% 0.25% 0.25% 0.25% 0.25% 0.25% 0.25%Canada 0.25% 0.29% 0.88% 1.00% 1.00% 1.00% 1.00%
Australia 3.24% 4.10% 4.58% 4.76% 4.64% 4.05% 3.34%
FinancialResults
Note 1: Some balances attract no interest or a set margin for ComputershareNote 2: Analysis includes Shareowner Services client funds from 2H12* UK – Bank of England MPC Rate; US – Fed Funds Rate; Canada – Bank of Canada Overnight Target Rate; Australia – RBA Cash Rate
74.5 77.5 84.5 87.0 89.0
117.4 120.0
8.2 8.8 9.2
11.212.1
15.416.7
0
2
4
6
8
10
12
14
16
18
0
20
40
60
80
100
120
140
160
180
200
1H10 2H10 1H11 2H11 1H12 2H12 1H13
USD
Bill
ion
USD
Mill
ion
Margin Income Average balances
18
1H13 Client Balances –Interest Rate Exposure
Average funds (USD 16.7b) held during 1H13
FinancialResults
No exposure22% ($3.6b)
Effective hedging: natural
6% ($0.9b)
Effective hedging:
derivative / fixed rate
24% ($4.0b)
Exposure to interest rates48% ($8.1b)
CPU had an average of USD16.7b of client funds under management during 1H13.
For 22% ($3.6b) of the 1H13 average client funds under management, CPU had no exposure to interest rate movements either as a result of not earning margin income, or receiving a fixed spread on these funds.
The remaining 78% ($13.1b) of funds were “exposed” to interest rate movements. For these funds: 24% had effective hedging in place (being either derivative or fixed rate deposits). 6% was naturally hedged against CPU’s own floating rate debt.
The remaining 48% was exposed to changes in interest rates.
1H13 Client Balances –Interest Rate Exposure and Currency
19
“Exposed Funds” by Currency (1H13 Average Balances)
Average exposed funds balance net of hedging US$8.1b
(US$16.7b x 48%)
Average exposed funds balance prior to any hedging
US$13.1b(US$16.7b x 78%)
Total Exposed Funds(both hedged and non-hedged)
Non-hedged Exposed Funds
FinancialResults
AUD3% ($0.3b)
CAD19% ($2.5b)
GBP25% ($3.3b)
USD49% ($6.5b)
Other4% ($0.5b)
AUD3% ($0.3b)
CAD28% ($2.3b)
GBP20% ($1.6b)
USD44% ($3.5b)
Other5% ($0.4b)
Client Balances – Forward view of HedgesFixed Rate Deposits and Derivatives in place at 31 Dec 2012
20
FinancialResults
Policy:Minimum hedge of 25% / Maximum hedge of 100%Minimum term 1 year / Maximum term 5 years (some exceptions permitted under the Board policy)
Current Strategy:Continue to monitor medium term swap rates with the intention of accumulating cover should rates rise materially
0
500
1,000
1,500
2,000
2,500
3,000
3,500
4,000
4,500
Jan-13 Jan-14 Jan-15 Jan-16 Jan-17
Hedging (fixed rate deposits) Hedging (derivatives)
USD
M T
otal
hedg
es
21
Total Management Operating Costs Half Year Comparisons
FinancialResults
396.8 427.1 395.4436.2 437.9
593.4 577.9
138.8148.6
139.6
154.2 132.0
196.8168.3
535.6575.7
535.1
590.4569.9
790.2746.3
0
100
200
300
400
500
600
700
800
900
1H10 2H10 1H11 2H11 1H12 2H12 1H13
USD
M
Controllable Costs (excl COS) Cost of Sales (COS)
22
Management Operating CostsHalf Year Comparisons
* Corporate operating costs have been allocated and reported under the five main cost categories – cost of sales, personnel, occupancy, other direct and technology. Technology costs includes personnel, occupancy and other direct costs attributable to technology services.
FinancialResults
138.
8
263.
7
30.3
22.7
80.0
148.
6
283.
7
34.8
26.8
81.8
139.
6
256.
1
33.9
24.6
80.7
154.
2
293.
4
34.6
28.9
79.3
132.
0
290.
4
36.9
20.7
89.9
196.
8
365.
9
44.3 60
.6
122.
6168.
3
361.
6
39.2
47.7
129.
4
0
50
100
150
200
250
300
350
400
450
Cost of Sales Personnel Occupancy Other Direct Technology
USD
M
1H10 2H10 1H11 2H11 1H12 2H12 1H13
23
Technology CostsContinued Investment to Maintain Strategic Advantage
FinancialResults
32.9 33.0 28.8 26.634.7
23.031.2
23.3 26.320.2 23.9
21.8 46.5
48.4
19.9 19.027.6 26.1
30.5
45.9
44.2
3.9 3.4 4.1 2.7
2.9
7.25.7
80.0 81.8 80.7 79.3
89.9
122.6129.4
10.0% 10.1% 10.3%
9.5%
11.5%11.8%
13.1%
0%
2%
4%
6%
8%
10%
12%
0
20
40
60
80
100
120
140
160
1H10 2H10 1H11 2H11 1H12 2H12 1H13
Tech
nolo
gy c
osts
as
a %
of
reve
nue
USD
M
Development Infrastructure Maintenance Admin Technology costs as a % of revenue
24
Free Cash Flows
Note 1: 1H10 US$49.7m includes acquisition of Land and Buildings in the UK (US$34.7m)Note 2: Excludes assets purchased through finance leases which are not cash outlays
FinancialResults
206.7 207.7
148.4
171.2
146.4
188.2
133.3
49.7
7.3 8.015.4 10.0
30.123.6
0
50
100
150
200
250
1H10 2H10 1H11 2H11 1H12 2H12 1H13
USD
M
Operating Cash Flows Cash outlay on Capital Expenditure
25
1H13 Operating Cash Flows Analysis FinancialResults
146.4133.3
42.1
46.4
16.5 49.6
35.5
0
20
40
60
80
100
120
140
160
180
200
Net OperatingCash Flow 1H12
Statutory Profitafter Tax
Non-Cash P&LItems
Increase inAssets
Increase inLoan Servicing
Advances
Increase inPayables,
Provisions &Tax
Net OperatingCash Flow 1H13
USD
M
26
Balance Sheet as at 31 December 2012FinancialResults
Dec-12 Jun-12 Variance
USD M USD M Dec-12 to Jun-12
Current Assets $992.0 $956.6 3.7%
Non Current Assets $2,759.7 $2,725.0 1.3%
Total Assets $3,751.6 $3,681.7 1.9%
Current Liabilities $767.1 $550.9 39.3%
Non Current Liabilities $1,796.2 $1,976.5 (9.1%)
Total Liabilities $2,563.3 $2,527.3 1.4%
Total Equity $1,188.3 $1,154.3 2.9%
See CPU interim Financial Statements Appendix 4D as at 31 December 2012 for full details.
Dec-12 current liabilities includes the USD 250M club debt facility which matures in October 2013.
27
Key Financial Ratios
EBITDA Interest Coverage Net Financial Indebtedness to EBITDA
FinancialResults
Dec‐12 Jun‐12 VarianceUSDM USDM Dec‐12 to Jun‐12
Interest Bearing Liabilities $1,771.3 $1,754.4 1.0%
Less Cash ($442.4) ($441.4) 0.2%
Net Debt $1,328.8 $1,313.0 1.2%
Management EBITDA (rolling 12 months) $488.8 $459.0 6.5%
Net Debt to Management EBITDA 2.72 times 2.86 times Down 0.14 times
22.1 22.3
17.015.1
13.29.5
7.3
0
5
10
15
20
25
1H10 2H10 1H11 2H11 1H12 2H12 1H13
Tim
es
1.42 1.40 1.42 1.35
2.92 2.86 2.72
0.0
0.5
1.0
1.5
2.0
2.5
3.0
3.5
1H10 2H10 1H11 2H11 1H12 2H12 1H13
Tim
es
28
Debt Facility Maturity Profile
Note: Average debt facility maturity is now 5.0 years
Maturity DatesUSD M
Debt Committed BankPrivate
PlacementDrawn Debt Facilities Debt Facility Facility
FY13 Nil Nil Nil NilFY14 Oct-13 245.7m 250.0m 250.0mFY15 Dec-14 72.7m 150.0m
Mar-15 124.5m 124.5m 124.5mFY16 Oct-15 295.9m 300.0m 300.0mFY17 Oct-16 150.8m 250.0m 250.0m
Mar-17 21.0m 21.0m 21.0mFY18 Feb-18 40.0m 40.0m 40.0mFY19 Jul-18 235.0m 235.0m 235.0m
Feb-19 70.0m 70.0m 70.0mFY22 Feb-22 220.0m 220.0m 220.0mFY24 Feb-24 220.0m 220.0m 220.0m
TOTAL $1,695.6m $1,880.5m $800.0m $930.5m
124.5
21.0
235.0
40.0
70.0
220.0 220.0
150.0
72.7
250.0
300.0
250.0245.7
295.9
150.8
0
50
100
150
200
250
300
350
FY13 FY14 FY15 FY16 FY17 FY18 FY19 FY20 FY21 FY22 FY23 FY24
USD
M
USPP New USPP SLS Advance Facility SLS Advance Facility drawn Syndicated Debt Facility Syndicated Debt drawn
29
Capital Expenditure vs. Depreciation FinancialResults
Notes: 1H10 US$49.7m includes acquisition of UCIA HQ building in Bristol, UK.2H10 US$44.2M includes conversion of group HQ building in Melbourne, Australia from operating lease to finance lease.
9.2 10.4
4.7
14.617.2
11.16.4
1.7 0.8
1.0
4.63.9
2.1
2.7
35.930.0
1.0
2.53.2
23.7
12.9
3.0
3.0
2.0
1.8
0.9
2.0
49.7
44.2
8.7
23.5 24.2
37.9
23.9
0
10
20
30
40
50
60
1H10 2H10 1H11 2H11 1H12 2H12 1H13
USD
M
Information Technology Communication Services Facilities Occupancy Other Depreciation
30
Working Capital Management FinancialResults
40 41
38
41 42 43
48
0
5
10
15
20
25
30
35
40
45
50
1H10 2H10 1H11 2H11 1H12 2H12 1H13
No.
Of
Day
s
Days Sales Outstanding
31
Return On Invested Capital vs. WACC andReturn on Equity
FinancialResults
The FY12 ROIC calculation included a full year proforma for Serviceworks, SLS and Shareowner Services
10.41% 9.83%8.61% 8.63%
17.36% 16.94%
13.57% 13.61%
19.90%18.45%
14.37% 14.73%
31.44%
26.93%
22.34%24.28%
0%
5%
10%
15%
20%
25%
30%
35%
FY10 FY11 FY12 1H13
WACC ROIC (Previous) ROIC (Revised) * ROE
* ROIC = (EBITDA less Depreciation less Income Tax expense)/(Total Debt add Total Equity less Cash)
Equity ManagementInterim Dividend of 14 cents (AU)
32
FinancialResults
EPS ‐ Statutory US 17.02 cents
EPS ‐Management US 26.87 cents
Interim Dividend AU 14 cents (20% franked)
Current Yield* 2.8%
* Based on 12 month dividend and share price of AU$10.07 (close 8th Feb 2013)
33
Financial Summary – Final Remarks FinancialResults
› We continue to experience generally difficult trading conditions across most business lines.
› However, ongoing disciplined expense and capital expenditure management continue to drive solid results and cash flow.
› The Serviceworks and SLS acquisitions are both performing well and are anticipated to be future growth engines.
› The Shareowner Services acquisition is also performing well with integration and synergy realisation on track.
› DRP further diversifies options for future sources of funding.
› Maintained strong and conservative balance sheet.
› Interim dividend unchanged at AUD 14 cents per share, franked to 20% (down from 60%).
34
Introduction Financial Results
CEO’s Report
PRESIDENT & CHIEF EXECUTIVE OFFICERCEO PRESENTATION
Stuart Crosby
CEO’sReport
Group Strategy and Priorities
36
CEO’sReport
Our group strategy remains as it has been:› Continue to drive operations quality and efficiency through measurement,
benchmarking and technology.› Improve our front office skills to protect and drive revenue.› Continue to seek acquisition and other growth opportunities where we can add
value and enhance returns for our shareholders.
In addition, we continue to commit priority resources in three areas:› Integration of recent acquisitions.› Lifting our market position.› Engaging with regulatory developments and market structure change in the
many jurisdictions in which we operate.
37
Delivery against strategyCEO’sReport
Delivering on the first two limbs of the strategy (cost & revenue) is as always a key priority:
› Our processes of measuring and benchmarking operational and shared services costs continue to deliver benefits. Over the next period, the Shareowner Services business’s off-shore capabilities are expected to bring meaningful quality benefits and savings when deployed to the legacy US client base, into other geographies, and beyond operations (e.g. for technology).
› Our position at the top of independent service surveys across the world evidences our quality achievements.
› Revenue initiatives continue to deliver benefits, and there is some evidence of pricing benefits from the sustained quality and innovation we have delivered, but these are being overpowered by revenue drag from shareholder attrition and soft transactional volumes.
Our search for inorganic growth opportunities in existing business areas (including some of the newer business services lines) is quite active.
Acquisitions update – Shareowner Services
38
› While revenues remain softer than originally expected (as with most of our investor services assets around the world), the integration has been very smooth, with accompanying client benefits (many major clients re-signed or re-signing), and migrations and synergy realisation are running on or ahead of plan.
› Post migration management structure agreed and announced.
› Client attrition remains within our acquisition assumptions.
CEO’sReport
Costs to realise USD M
Said we expected 50.0
To date (as at Dec 12) 23.4
Expect to come 30.1
Increase 3.5
Synergies expected (as at Aug 12)USD M
FY12 FY13 FY14 FY15
Said we expected 9.3 25.0 35.0 5.0
Cumulative expected 34.3 69.3 74.3
Synergies (current expectations)
FY12 FY13 FY14 FY15
Delivered 9.3 11.0
Incremental expected 15.7 36.8 5.0
Cumulative expected 36.0 72.8 77.8
USA Update
› Encouraging new business outcomes across the combined US TA business, winning the majority of IPOs and several competitive tenders, but M&A activity is still weak.
› Employee Plans is also winning business and revenue for the Shareowner Services Plans business is tracking well.
› Fund Services activity continues to plumb new depths. Headcount has been reduced by a further 33%.
› Corporate Proxy continues to win a majority of the opportunities from the Shareowner Services book. M&A activity remains pretty flat.
› KCC Corporate Restructuring maintains its leadership in both the total and mega case market. KCC Class Actions is yet to achieve ideal name recognition with some law firms in chasing the mega deals in specific areas. However it is winning more deals overall and, through our major company relationships, being added to the tender panels of major class action targets.
CEO’sReport
39
Canada Update
› The Canadian market continues to be competitive so client retention remains a priority.
› Transactional activity continues to be down from prior years, however, client revenues holding up well.
› Corporate Actions remain soft, however, we have benefitted from larger transactions in the mining and commodities sector.
› Employee Plans and Fixed Income see revenue growth against 1H12.
› Communication Services continues to win commercial mandates through financial institution relationships.
› Operational costs continue to see year over year reduction driven by lower transactional activity and efficiency programs.
› Working closely with all major participants in continued market structure debate.
CEO’sReport
40
41
UCIA UpdateCEO’sReport
› Employee Plans business continues to perform well with good new client wins and up-sell to its existing client base. Recovery in equity markets has helped improve transactional revenue although this remains volatile.
› The tenancy deposit franchise continues to grow. In addition to DPS in England and Wales and LPS Scotland, a new scheme set to launch in Northern Ireland as well as a new complimentary insurance scheme in England and Wales
› Investor Services business is stable with no immediate signs of material uplift in corporate actions activity. Anticipating market structure changes in the UK and Ireland driven by new EU legislation which will impact in the medium term.
› Voucher Services is performing satisfactorily, and operational restructure and relocation to our main UK facility is helping to unlock further efficiencies. We continue to track and influence the public policy debate that may impact this service in the future.
42
Continental Europe UpdateCEO’sReport
› Flat markets in most of CEU region, but the IPO pipeline in the Nordics and in Germany starting to fill up.
› Germany saw largest IPO for the last 5 years (Telefonica Germany). We run the register and will provide meeting services. Spin-off of Osram from Siemens will happen in April, CPU chosen as registrar and meeting services provider.
› Strong performances by Servizio Titoli in Italy due to extraordinary meetings.
› Less market activity and weak 1H13 for Corporate Proxy in Southern Europe.
› Russian business performing well and running corporate actions with high visibility (eg, share buy-back of Baltika Breweries). We have moved from 80% to 100% ownership of the former NRC.
› Continue to look for growth opportunities in an uncertain market environment. EU initiatives (i.e. T2S, CSD-R, SLD) gain momentum and will change the industry with upside potential.
43
Asia UpdateCEO’sReport
› HK IPO activities were still subdued in 1H13, but some signs of improvement this year. The pipeline is still healthy so with a recovery in market sentiment these deals will come through.
› Other corporate action activity has also been subdued due to market uncertainty.
› Registry revenue remained stable.
› Planning for dematerialisation of the HK equities market slipped further with possible implementation moving into 2016.
› Chinese Employee Plans and Proxy businesses continue with healthy growth in both mandates and revenue. The new AGM administration business in China continues to do well and win clients.
› In India a small number of IPOs have got away while the improvement in stock market performance boosted the AUM and therefore fees for the mutual fund services business.
44
Australia & New Zealand UpdateCEO’sReport
› Our quality, service and client retention levels remain excellent across all our businesses.
› Our Investor Services businesses in Australia and NZ continue to maintain their market leading positions. The corporate actions market remains subdued but we won our share – eg, Woolworths/SCA and Fonterra transactions.
› Although the Communication Services market remains tough we continue to see opportunities, especially in leveraging our inbound capabilities.
› The Plan Managers business continues to grow satisfactorily.
› Serviceworks continues to grow revenue in Australia. Serviceworks has also had a small US presence for nine months with encouraging early signs.
› In December 2012 we increased our investment in Digital Post Australia to 80%. During the last half we conducted a successful private launch and look forward to the public launch in the coming months.
Computershare LimitedHalf Year Results 2013 Presentation
Stuart CrosbyPeter Barker
13 February 2013
46
Appendix:Half Year Results 2013 Presentation
13 February 2013
47
Group Comparisons
Appendix 1: Group Comparisons
CPU RevenuesHalf Year Comparisons
48
FinancialResults
39% 42% 42% 44% 43% 42% 40%
14% 9%12% 10% 9% 9%
9%
17%17%
17% 16% 19% 23% 24%
10%10% 5% 7% 4%
5% 3%
6% 9% 9% 10% 11%11% 11%
10% 10% 11% 10% 12%9% 10%
4% 4% 3% 3% 3% 2% 2%
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
1H10 2H10 1H11 2H11 1H12 2H12 1H13
Register Maintenance Corporate Actions Business Services Stakeholder Relationship M'ment Employee Share Plans Communication Services Tech & Other Revenue
49
Revenue by ProductHalf Year Comparisons
FinancialResults
317.3 342.9 330.8 367.7 334.2 440.6
394.7
112.2 71.0 96.8 82.7
67.4
88.7 92.8
139.8 136.5 131.2 134.9
148.3
234.7 241.8 81.6 81.9 39.5
57.6 34.6
52.2 31.2
49.6 70.1 74.0
83.6
85.0
112.3 112.5
78.1 80.9 84.7
87.5 90.3
91.7 98.3
28.8 28.8 24.1
23.6 21.5
17.2 16.3
807.5 812.1 781.0
837.6 781.4
1,037.3 987.6
0
200
400
600
800
1,000
1,200
1H10 2H10 1H11 2H11 1H12 2H12 1H13
US
D M
Register Maintenance Corporate Actions Business Services Stakeholder Relationship M'ment Employee Share Plans Communication Services Tech & Other Revenue
50
RevenueHalf Year Comparisons
FinancialResults
317.
3
112.
2 139.
8
81.6
49.6 78
.1
28.8
342.
9
71.0
136.
5
81.9
70.1 80
.9
28.8
330.
8
96.8
131.
2
39.5
74.0 84
.7
24.1
367.
7
82.7
134.
9
57.6 83
.6
87.5
23.6
334.
2
67.4
148.
3
34.6
85.0
90.3
21.5
440.
6
88.7
234.
7
52.2
112.
3
91.7
17.2
394.
7
92.8
241.
8
31.2
112.
5
98.3
16.3
0
50
100
150
200
250
300
350
400
450
500
RegisterMaintenance
Corporate Actions Business Services StakeholderRelationship
M'ment
Employee SharePlans
CommunicationServices
Tech & OtherRevenue
USD
M
1H10 2H10 1H11 2H11 1H12 2H12 1H13
51
1H13 RevenueRegional Analysis
FinancialResults
77.9
20.6
40.3
1.4
14.2
74.4
3.3
26.3
5.6
21.2
2.4
3.9
0.0
0.3
50.7
5.0
33.3
1.2
55.4
2.2
2.6
20.0
2.1
1.3 5.
4
0.5 9.
4
2.4
184.
9
48.8
107.
0
19.8 30
.6
9.7
6.3
34.8
10.6
38.8
1.0 7.
8
2.6
1.4
0
20
40
60
80
100
120
140
160
180
200
RegisterMaintenance
CorporateActions
BusinessServices
StakeholderRelationship
M'ment
Employee SharePlans
CommunicationServices
Tech & OtherRevenue
USD
M
ANZ Asia UCIA CEU USA Canada
52
Effective Tax Rate - Statutory & Management FinancialResults
26.6% 27.0%
22.3%
-2.5%
27.8%
25.6% 25.1%
18.3%
-5%
0%
5%
10%
15%
20%
25%
30%
FY10 FY11 FY12 1H13
Tax
Rat
e %
Statutory Management
The Group’s effective tax rate is negative 2.5% for the half-year ended 31 December 2012. The Group’s effective tax rate for the comparative six month period was 20.8%. Deductible interest expense and intangible asset amortisation has increased in the US as a result of its major acquisitions (which were debt funded) in November and December 2011. Consequently, the US is anticipated to be in a tax loss position which gives rise to a negative tax expense. As the US has a relatively higher statutory tax rate compared to other countries, the credit has the impact of reducing the Group’s overall effective tax rate.
53
Country Summaries
Appendix 2: Country Summaries
54
Australia Half Year Comparison
FinancialResults
217.
3
165.
2
192.
6
167.
4
198.
1
187.
9
218.
3
0
50
100
150
200
250
1H1
0
2H1
0
1H1
1
2H1
1
1H1
2
2H1
2
1H1
3
AU
D M
Total Revenue
73.5
45.8
3.6
2.7
9.1
73.1
9.4
54.4
19.3
4.2
1.4
8.9
70.9
6.2
80.0
21.5
1.8 3.2
9.6
72.4
4.1
59.9
24.2
1.5 3.1
10.0
61.6
7.0
74.7
17.2 20
.4
1.8
11.8
67.8
4.4
56.5
16.3
35.3
0.9
12.6
63.9
2.5
71.0
18.3
38.8
1.4
13.7
71.9
3.2
0
10
20
30
40
50
60
70
80
90
RegisterMaintenance
CorporateActions
BusinessServices
StakeholderRelationship
M'ment
EmployeeShare Plans
CommunicationServices
Tech & OtherRevenue
AU
D M
Revenue Breakdown
1H10 2H10 1H11 2H11 1H12 2H12 1H13
55
New Zealand Half Year Comparison
FinancialResults
8.3
7.4 7.5
7.2
8.0
6.4
7.8
0
1
2
3
4
5
6
7
8
9
1H1
0
2H1
0
1H1
1
2H1
1
1H1
2
2H1
2
1H1
3
NZD
M
Total Revenue
5.8
2.3
5.6
1.8
0.1
5.5
2.0
0.1
5.7
1.5
5.8
2.0
0.2
5.2
0.9
0.3
5.5
2.1
0.2
0
1
2
3
4
5
6
7
Register Maintenance Corporate Actions Business Services
NZD
M
Revenue Breakdown
1H10 2H10 1H11 2H11 1H12 2H12 1H13
56
Hong Kong Half Year Comparison
FinancialResults
297.
0
210.
3
327.
6
234.
1
253.
9
226.
8
225.
0
0
50
100
150
200
250
300
350
400
1H1
0
2H1
0
1H1
1
2H1
1
1H1
2
2H1
2
1H1
3
HK
D M
Total Revenue
155.
1
135.
3
1.0 5.
6
0.0
151.
5
52.2
2.3
4.2
0.0
147.
9
172.
0
0.6 7.
1
0.0
153.
8
62.4
0.4 3.0 14
.5
157.
7
72.5
3.3
4.4 16
.0
159.
3
46.2
3.8
1.3
16.1
156.
0
40.3
2.9
4.5
20.8
0
20
40
60
80
100
120
140
160
180
200
RegisterMaintenance
CorporateActions
BusinessServices
StakeholderRelationship
M'ment
EmployeeShare Plans
HK
D M
Revenue Breakdown
1H10 2H10 1H11 2H11 1H12 2H12 1H13
57
India Half Year Comparison
FinancialResults
1,13
4.2
1,06
0.1
1,10
1.7
1,07
4.4
998.
0
1,01
8.5
1,45
1.3
0
200
400
600
800
1,000
1,200
1,400
1,600
1H1
0
2H1
0
1H1
1
2H1
1
1H1
2
2H1
2
1H1
3
INR
M
Total Revenue
301.
6
61.0
771.
6
235.
3
26.5
798.
4
278.
7
135.
2
687.
8
290.
5
69.8
714.
2
330.
6
7.4
660.
0
356.
1
29.9
632.
5
292.
7
18.2
1,14
0.5
0
200
400
600
800
1,000
1,200
1,400
Register Maintenance Corporate Actions Business Services
INR
M
Revenue Breakdown
1H10 2H10 1H11 2H11 1H12 2H12 1H13
58
United States Half Year Comparison
FinancialResults
297.
131
2.2
258.
326
6.4
217.
745
2.5
407.
2
0
50
100
150
200
250
300
350
400
450
500
1H1
02H
10
1H1
12H
11
1H1
22H
12
1H1
3
USD
M
Total Revenue
117.
4
21.3
58.3 65
.8
17.5
5.3 11
.6
138.
8
21.3
48.1 65
.4
17.8
9.1
11.6
126.
4
22.3
51.4
22.7
16.5
6.5 12
.4
135.
8
23.3 39
.8
37.8
14.9
9.0
5.7
112.
5
17.9
40.0
19.4
13.3
6.8
7.8
215.
1
45.2
112.
0
34.4
31.6
8.9
5.2
184.
9
48.8
107.
0
19.8 30
.6
9.7
6.3
0
50
100
150
200
250
RegisterMaintenance
CorporateActions
BusinessServices
StakeholderRelationship
M'ment
EmployeeShare Plans
CommunicationServices
Tech & OtherRevenue
USD
M
Revenue Breakdown
1H10 2H10 1H11 2H11 1H12 2H12 1H13
59
Canada Half Year Comparison
FinancialResults
94.3
109.
597
.710
9.0
98.6
110.
296
.9
85
90
95
100
105
110
115
1H1
02H
10
1H1
12H
11
1H1
22H
12
1H1
3
CA
D M
Total Revenue
38.3
12.6
32.0
1.3
7.2
1.8
1.0
45.9
14.0
36.1
1.6
8.0
1.7
2.1
37.0
13.0
36.3
1.5
7.2
1.7
1.1
48.3
12.2
36.1
1.6
8.5
1.9
0.5
37.8
12.3
36.8
1.1
7.6
2.0
1.0
46.7
11.0
38.1
2.2
8.6
2.3
1.3
34.8
10.6
38.7
1.0
7.8
2.6
1.4
0
10
20
30
40
50
60
RegisterMaintenance
CorporateActions
BusinessServices
StakeholderRelationship
M'ment
EmployeeShare Plans
CommunicationServices
Tech & OtherRevenue
CA
D M
Revenue Breakdown
1H10 2H10 1H11 2H11 1H12 2H12 1H13
60
United Kingdom & Channel IslandsHalf Year Comparison
FinancialResults
67.4
77.7
73.5
82.0
76.1
82.5
79.8
0
10
20
30
40
50
60
70
80
90
1H1
0
2H1
0
1H1
1
2H1
1
1H1
2
2H1
2
1H1
3
GB
P M
Total Revenue
24.3
9.6
19.6
1.8
9.0
1.0 2.
1
26.1
3.5
20.6
2.2
21.4
1.3 2.
6
20.2
7.1
17.2
1.7
24.2
1.1 1.9
19.9
5.8
23.2
2.6
27.0
1.5
1.9
19.7
2.5
20.7
1.4
28.7
1.1 2.
0
21.0
2.8
19.2
2.2
33.6
1.6 2.1
20.1
2.3
20.5
0.6
33.7
1.4
1.3
0
5
10
15
20
25
30
35
40
RegisterMaintenance
CorporateActions
BusinessServices
StakeholderRelationship
M'ment
Employee SharePlans
CommunicationServices
Tech & OtherRevenue
GB
P M
Revenue Breakdown
1H10 2H10 1H11 2H11 1H12 2H12 1H13
61
Ireland Half Year Comparison
FinancialResults
4.5
5.5
5.4
4.4
5.7
4.2
4.7
0
1
2
3
4
5
6
1H1
0
2H1
0
1H1
1
2H1
1
1H1
2
2H1
2
1H1
3
EUR
M
Total Revenue
3.4
0.3
0.7
0.1
3.3
1.3
0.8
0.1
3.5
1.1
0.8
0.1
3.3
0.0
1.0
0.1
3.6
1.2
0.8
0.1
3.4
0.0
0.7
0.1
3.2
0.7 0.8
0.1
0
1
1
2
2
3
3
4
4
RegisterMaintenance
Corporate Actions Employee SharePlans
Tech & OtherRevenue
EUR
M
Revenue Breakdown
1H10 2H10 1H11 2H11 1H12 2H12 1H13
62
South Africa Half Year Comparison
FinancialResults
123.
5 125.
712
7.7
132.
613
0.3
138.
014
2.5
110
115
120
125
130
135
140
145
1H1
02H
10
1H1
12H
11
1H1
22H
12
1H1
3
RA
ND
M
Total Revenue
111.
5
9.1
2.3
0.7
113.
5
9.4
2.4
0.5
109.
9
6.3
3.3
0.4 7.
8
118.
4
2.5
2.4
0.3
9.0
117.
7
2.6
2.3
0.5 7.
2
123.
6
3.8
2.6
0.4 7.
5
128.
1
3.5
2.9
0.3 7.
8
0
20
40
60
80
100
120
140
RegisterMaintenance
CorporateActions
BusinessServices
StakeholderRelationship
M'ment
EmployeeShare Plans
RA
ND
M
Revenue Breakdown
1H10 2H10 1H11 2H11 1H12 2H12 1H13
63
Germany Half Year Comparison
FinancialResults
16.3
22.9
16.8
24.2
14.8
27.1
16.0
0
5
10
15
20
25
30
1H1
0
2H1
0
1H1
1
2H1
1
1H1
2
2H1
2
1H1
3
EUR
M
Total Revenue
3.7
1.4
0.0
5.2
0.5
4.5
1.0
10.4
1.4
0.0
4.8
0.2
3.6
2.4
2.2
1.7
0.0
5.5
0.2
6.0
1.3
10.9
1.2
0.3
3.0
0.2
7.0
1.72.
1
1.4
0.3
3.5
0.1
6.2
1.2
10.4
2.2
0.4
4.8
0.2
8.4
0.8
2.3
1.7
0.3
3.4
0.1
7.4
0.8
0
2
4
6
8
10
12
RegisterMaintenance
CorporateActions
BusinessServices
StakeholderRelationship
M'ment
Employee SharePlans
CommunicationServices
Tech & OtherRevenue
EUR
M
Revenue Breakdown
1H10 2H10 1H11 2H11 1H12 2H12 1H13
Italy Half Year Comparison
64
0.6
1.6
1.1
6.9
5.8
6.8
5.5
0
1
2
3
4
5
6
7
8
1H1
0
2H1
0
1H1
1
2H1
1
1H1
2
2H1
2
1H1
3
EUR
M
Total Revenue
0.0
0.6
0.1
0.0
1.6
0.0
0.0
1.0
0.0
5.3
1.4
0.2
4.0
1.3
0.6
5.1
1.3
0.4
4.5
0.5
0.5
0
1
2
3
4
5
6
Register Maintenance Stakeholder RelationshipM'ment
Tech & Other Revenue
EUR
M
Revenue Breakdown
1H10 2H10 1H11 2H11 1H12 2H12 1H13
FinancialResults
65
Russia Half Year Comparison
FinancialResults
135.
3 182.
1
312.
1
402.
1
418.
5
363.
4
373.
8
0
50
100
150
200
250
300
350
400
450
1H1
0
2H1
0
1H1
1
2H1
1
1H1
2
2H1
2
1H1
3
RU
B M
Total Revenue
129.
2
6.2
175.
3
6.8
293.
2
17.7
1.2
371.
3
26.8
4.0
393.
5
25.0
0.0
340.
1
23.3
0.0
353.
3
20.5
0.0
0
50
100
150
200
250
300
350
400
450
Register Maintenance Business Services StakeholderRelationship M'ment
RU
B M
Revenue Breakdown
1H10 2H10 1H11 2H11 1H12 2H12 1H13
66
Assumptions
Appendix 3: Assumptions FinancialResults
67
Assumptions: 1H13 Exchange Rates
Average exchange rates used to translate profit and loss to US dollars
USD 1.0000
AUD 0.9666
HKD 7.7534
NZD 1.2323
INR 54.8980
CAD 0.9997
GBP 0.6290
EUR 0.7890
RAND 8.4619
RUB 31.8425
AED 3.6728
DKK 5.8775
SEK 6.7229
FinancialResults