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

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19 August 2004 Final Results Presentation Financial Year 2004 1 Tom Honan Chief Financial Officer Market Overview and Financial Results 2 Summary of Results Normalised EPS (pre goodwill) of 19.0 cents, up 61%. Operating Cash Flows of

  1. 19 August 2004 Final Results Presentation Financial Year 2004 1

  2. Tom Honan Chief Financial Officer Market Overview and Financial Results 2

  3. 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) 3

  4. 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. 4

  5. This presentation is structured around the following framework Market Financial CEO’s Report Overview Results 5

  6. CPU Revenues are driven by multiple factors Market Overview Revenue Type Revenue Driver Risk mitigation Register Maintenance Growth in clients & Retain existing clients, win holders market share 1% 6% Corporate Actions Market conditions & M&A Win new business; link to 6% activities key stakeholders, clients Investor Relations Growth in products & Services clients. 11% Leverage from existing Governance clients, win new clients & Employee Share Plans Growth in clients develop new products & Document Services Growth in comercial 52% service offerings clients & support internal 8% business. Mutual Funds Growth in clients. Broaden service range Governance 16% Register Maintenance Corporate Actions Investor Relations Services Employee Share Plans Document Services Mutual Funds Technology & Other Revenue 6

  7. Global Equities Market Market Overview Historical Equity Issuance Data Annual M & A Book to Bill Ratio Source: SDC Thomson Financial and UBS Securities Australia Ltd � CPU impact mainly felt in Australia and Hong Kong. 7

  8. Global Interest Rate Market Market Overview % % UK US 8 8 6 6 4 4 2 2 0 0 1996 1997 1998 1999 2000 2001 2002 2003 2004 1996 1997 1998 1999 2000 2001 2002 2003 2004 % Canada 8 6 4 2 0 1996 1997 1998 1999 2000 2001 2002 2003 2004 8

  9. Computershare Strengths Market Overview � 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. 9

  10. CEO’s Report Financial Results Overview Market 10

  11. 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 11

  12. Revenue Breakdown Financial Results 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. 12

  13. Half Year Comparisons – Revenue & EBITDA Financial Results Revenue & EBITDA $Am $Am 550 120 � Increased 103.3 revenues have 500 delivered significant 100 improvements in 79.5 450 80.1 EBITDA. 80 R E e B 400 I v 54.4 60 e T n D 350 u A 40 e 399.5 495.2 300 364.1 355.7 20 250 200 0 1H03 2H03 1H04 2H04 Revenue EBITDA 13

  14. Regional Analysis – Revenue & EBITDA Financial Results Total Revenue Breakdown EBITDA Breakdown 32% 35% 40% 39% 28% 26% Asia Pacific Europe North America Asia Pacific Europe North America 14

  15. Half Year Comparisons - Costs Financial Results Operating Costs $Am Acquisitions 400 98.6 19.2 300 200 300.8 298.7 294.6 283.1 100 0 1H03 2H03 1H04 2H04 Note: FY03 & 1 H FY04 restated for cost of sales adjustment. 15

  16. Progress on Cost Savings Financial Results Savings Expected FY04 Realised FY04 Excess Savings Savings (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. 16

  17. Analysis of NPAT Financial Results Normalised Net Profit After Tax A$m 80 70 60 50 40 77.8 30 57.9 45.8 20 10 0 FY02 FY03 FY04 17

  18. Normalised Basic EPS Performance (pre goodwill) Financial Results cents Normalised Basic EPS (pre goodwill) 20 (rolling 12 months) 18 16 14 12 10 8 6 4 2 0 Dec'01 Jun'02 Dec'02 Jun'03 Dec'03 Jun'04 Normalised Basic EPS (pre goodwill) 18

  19. Financial Results FY04 ROIC Returns improving, Cost of Capital declining ROIC vs. WACC FY03 WACC FY02 18% 16% 14% 12% 10% 8% 6% 19

  20. Effective Tax Rate Financial Results � 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%). Headline Effective Tax Rate Underlying Effective Tax Rate % % 50 35 44.5 30.9 41.8 45 30 26.1 40 23.8 25 35 31.0 30 20 24.4 25 15 20 10.6 15 10 10 5 5 0 0 FY01 FY02 FY03 FY04 FY01 FY02 FY03 FY04 20

  21. Technology Costs – Establishing Global Platform Financial Results A$m % 120 14% 14% 115 13% 12% 106.7 110 11% 10% � All R & D technology costs are 105 expensed 8% � FY04 includes $7.7m in Technology 100 costs from businesses acquired 6% 95 92.1 92.0 4% 90 2% 85 80 0% FY02 FY03 FY04 Technology costs Technology costs % of sales revenue 21

  22. Analysis of Technology Costs Financial Results $Am 110 100 26.8 2.0 9.5 90 80 21.1 16.6 14.4 70 External Bureau 60 Infrastructure Maintenance 25.6 24.8 27.2 Application Maintenance 50 2.3 Administration 40 2.5 2.8 Research & Development 30 41.1 20 38.6 35.5 10 0 FY02 FY03 FY04 22

  23. Net Operating Cash Flows Financial Results $Am Net Operating Cash Flows (after Capex) 140 � Increase in Operating Cash 114.7 120 Flows � Gearing on a net debt to 100 equity basis – 36.6% � Committed debt facility - 80 A$360m 58.3 60 � Debtors days outstanding have fallen from 61 to 57 days 40 25.0 22.5 20 0 FY01 FY02 FY03 FY04 23

  24. Key Financial Ratios Financial Results EBITDA interest coverage Total Financial Indebtedness to EBITDA times times 3 25 21.2 20 2 14.5 1.7 15 11.9 1.4 10 1 0.7 5 0 0 FY02 FY03 FY04 FY02 FY03 FY04 Gearing (Net Debt / Net Debt + Equity) Funds Flow to Total Debt % % 60% 100% 82% 50% 80% 40% 60% 50% 50% 27% 30% 40% 20% 12% 20% 10% 5% 0% 0% FY02 FY03 FY04 FY02 FY03 FY04 24

  25. Capital Expenditure Financial Results CPU Group Capex $Am 56.9 60 2.2 50 40 29.1 Other Occupancy 30 Document Services 21.4 Facilities 0.5 17.9 7.7 Information Technology 20 2.4 4.2 2.7 1.7 1.0 10 17.9 14.0 12.8 0 FY02 FY03 FY04 25

  26. Working Capital Management Financial Results Days DSO & DPO 70 66 61 Receivable 57 60 Days 54 51 Payable 50 Days 41 40 30 20 10 0 FY02 FY03 FY04 26

  27. Interest Rate Sensitivity Financial Results A$m PBT 100 Impact 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 Exposure Hedged exposure 100% Hedged -60 • 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. 27

  28. Equity Management – Fully Franked Final Dividend of 5 cps Financial Results � 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 28

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