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1 Market Overview and Financial Results Tom Honan Chief Financial - PowerPoint PPT Presentation

May 25, 2023 •103 likes •728 views

Interim Results 2004 Presentation 26 February 2004 1 Market Overview and Financial Results Tom Honan Chief Financial Officer 2 Summary of Results Net operating profit after tax (excluding outside equity interests) of $42.4m, up 986%.

  1. Interim Results 2004 Presentation 26 February 2004 1

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

  3. Summary of Results Net operating profit after tax (excluding outside equity interests) of $42.4m, � up 986%. Half year total revenues (excluding proceeds on sale of UK premises) of � $394.5m, up 13% or up 7% excluding recent acquisitions. � Half year operating costs excluding the effect of recent acquisitions and excluding cost of sales was $233.9, down 5%. EBITDA (excluding non recurring items) $80.1m, up 47% � Basic Earnings per Share 7.05 cents per share � Interim Dividend payable of 3 cents (fully franked), 20% increase. � 3

  4. Context of Results � 1H’04 EBITDA up significantly from last year. � Revenues reflect improved market conditions (especially Asia Pacific) and the contribution from acquisitions. � Operating costs reflect cost savings from restructuring and continued focus on cost control. � Capital expenditure of $7.2m (down 37%.) � DSO 63 days, down 4 days from 30 June 2003. � Increased ‘non registry’ revenues due to acquisition of Georgeson Shareholder Communications Inc. 4

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

  6. Market CPU Revenues are driven by multiple factors Overview Revenue type Revenue Driver Risk mitigation Register Maint & Growth in clients and Retain existing 4% Recoveries holders clients, win market share 26% Corporate Market conditions, Win new business; Actions M&A activity link to key stakeholders, 54% clients Margin Income Interest rates, Hedging, flow on 7% hedging balances effort from Maintenance & 9% Corp Actions Non- Registry Growth in non- Increase proportion Register Maint. & Recoveries Corporate Actions (includes registry businesses, on non-registry Margin Income Non Registry(incl GSC) Georgesons) clients & proxy businesses, win Other solicitation market share & new business 6

  7. Market Global Equities Market Overview M&A Value of Historical Equity Issuance Data M&A Number of Annual M&A Book to Bill Ratio Transactions (US$m) Transactions 1.5 2,500,000 18,000 1.4 16,000 1.3 2,000,000 14,000 1.2 12,000 1.1 1,500,000 10,000 1.0 8,000 1,000,000 0.9 6,000 0.8 4,000 500,000 0.7 2,000 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 0 0 Book-to-bill ratio Average 1H92 2H92 1H93 2H93 1H94 2H94 1H95 2H95 1H96 2H96 1H97 2H97 1H98 2H98 1H99 2H99 1H00 2H00 1H01 2H01 1H02 2H02 1H03 2H03 2003 YTD 1.17x 2003 YTD vs. 2000 - 2002 Avg 34.5% 2000-2002 Average 0.87x 2003 YTD vs. 1991 - 2002 Avg. 7.1% M&A Value ofTransactions (US$m) M&A Number ofTransactions 1991-2002 Average 1.10x Source: SDC Thomson Financial � Positive for first time in four years. � CPU impact mainly felt in Australia and Hong Kong. 7

  8. Market Global Interest Rate 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. Market Financial CEO’s Report Overview Results 9

  10. Financial Group Financial Performance – AUD $m’s Results Revenue 1H’04 1H’03 %Difference Registry maintenance 165.7 168.0 (1%) Corporate actions 34.4 21.8 58% Margin income (including sharesave admin) 26.6 31.9 (17%) Non Registry fees/sales 101.5 71.4 42% Recoveries 50.0 49.3 1% Interest income 1.7 1.8 (6%) Other 14.6 4.5 224% Total Revenue 394.5 348.7 13% Operating costs 312.9 293.8 (7%) Share of losses of associates 1.5 0.5 (200%) EBITDA 80.1 54.4 47% Depreciation and amortisation 14.5 15.4 6% Amortisation of goodwill 13.5 16.2 17% Borrowing costs 3.8 3.8 0% Other 0.0 (2.0) NA Non-recurring items (5.7) 7.1 NA Pre tax Profit 54.0 13.9 289% Income tax 11.2 9.0 24% NPAT before OEI 42.8 4.8 792% NPAT after OEI 42.4 3.9 986% 10

  11. Financial Half Year Comparisons Results $AUDm Revenue Breakdown 168.0 166.0 165.7 $AUDm 394.5 ** 396.5 384.5 359.9 348.7 101.5 74.2 71.4 80.1 79.5 74.6 73.0 34.4 31.9 31.8 54.4 26.6 21.8 21.8 1H'02 2H'02 1H'03 2H'03 1H'04 * Register Main Corp Actions Margin Income Non Registry Sales/Fees 1H'03 2H'03 1H'04 Revenue EBITDA * Non registry sales/fees includes income from Georgesons ** Excludes proceeds on the sale of Pavilions 11

  12. Financial Revenue Analysis Results Revenue Breakdown Total Revenue $AUDm 57.4 56.2 52.1 49.7 34% 37% * 28.6 22.9 23.3 16.6 13.9 12.9 12.1 13.1 11.6 29% 6.2 1.6 Asia Pacific Europe North America Register Main Corp Actions Margin Income Recoveries Non Registry * includes revenues from Georgesons. * Sales/Fees Asia Pacific Europe North America *Non registry sales/fees includes revenues from Georgesons. 12

  13. Financial Cost Analysis Results Operating Costs $AUDm Operating Cost Breakdown $AUDm 323.5 312.9 * 309.9 139.3 293.8 136.5 133.5 278.9 62.2 54.6 49.7 40.6 42.1 40.4 41.6 36.7 25.9 19.3 18.8 18.0 13.9 8.6 4.0 Recov Exp Personnel Occupancy Other Direct Technology Corporate 1H'02 2H'02 1H'03 2H'03 1H'04 1H'03 2H'03 1H'04 * Includes Georgeson costs. Excludes book value of Pavilions 13

  14. Financial EBITDA generated from diversified portfolio Results $AUDm Total EBITDA EBITDA Breakdown FY 2003 80.1 * 79.5 74.6 73.0 54.4 39% 39% 22% Asia Pacific Europe North America 1H'02 2H'02 1H'03 2H'03 1H'04 * Excludes non recurring items 14

  15. Financial Progress on cost savings Results Expected 1H’04 2H’04 Savings Annualised Realised Expected Excess/ Savings Savings Savings (Shortfall) Personnel 21.2 9.3 9.0 (2.9) Property 0.3 0.1 0.4 0.2 Other 1.2 0.0 1.9 0.7 Total 22.7 9.4 11.3 (2.0) 15

  16. Financial Personnel Cost Control Results Personnel Costs $161.4 2H FY03 $0.5 UK Mgt Team $4.5 Oz Mkt Recovery $5.6 Salary Increase $6.4 Acquisitions ($9.3) Restructuring 1H FY04 $169.1 A$m 150 155 160 165 170 175 180 185 Half Year Comparison 16

  17. Financial Analysis of NPAT Results $AUDm 50 40 Actual NPAT 30 42.4 20 33.4 24.5 10 12.4 3.9 0 1H'02 2H'02 1H'03 2H'03 1H'04 Note: Normalised NPAT for 1H’03 = 13.2, 2H’03 = 32.7 17

  18. Financial Returns Improving, Cost of Capital Declining Results ROIC vs WACC 14% 12% ROIC WACC 10% 8% Jun '02 Dec '02 Jun '03 Dec '03 Rolling 12 month period 18

  19. Financial Effective Tax Rate Results � Headline effective tax rate 1H’04: 20.8% (1H’03: 65.2%) � Normalised headline effective tax rate 1H’04: 31.7% (1H’03: 30.3%) � The underlying effective tax rate being the tax rate adjusted for one off, non- recurring items and non-deductible goodwill charges for the 1H’04 is 27.7% (1H’03: 10.6%) 19

  20. Financial Headcount (excluding Georgeson) Results Total FTE's 5,321 5,079 5,029 4,966 5,000 4,300 4,000 3,000 2,591 2,053 2,000 1,000 0 June '98 June '99 June '00 June '01 June '02 June '03 Dec '03 20

  21. Financial Headcount* Results Geographic Breakdown 1,200 1,113 1,102 1,000 892 800 600 522 524 400 150 200 79 73 0 Australia Hong New UK Ireland S. Africa US Canada Kong Zealand * Headcount excludes Technology, Corporate Services and Georgesons. 21

  22. Financial Technology Costs – Establishing Global Platform Results 50 42.1 45 41.6 40.4 40 � All AUD $m – internal cash costs only 35 � All technology costs are 30 expensed 25 Major events: 20 � Acquisition of EFA assets February 2003 15 10 5 0 1H'03 2H'03 1H'04 22

  23. Financial Analysis of Technology Costs Results Category Cost Type 2% 3% 2% 8% 5% 3% 42% 30% External bureau Computer Costs 82% Comms Development 23% Infrastructure Occupancy Maintenance External bureau Personnel & on-costs Admin 23

  24. Financial Analysis of Technology Costs Results $AUD 50.0 8.0 1.5 1.0 40.0 8.0 9.6 8.6 External Bureau 30.0 12.1 Infrastructure Maintenance 12.7 12.7 Application Maintenance Administration 1.3 20.0 1.3 Development 1.3 20.8 10.0 18.0 17.8 0.0 1H'03 2H'03 1H'04 24

  25. Financial Balance Sheet Strength Results � Net Debt / Equity = 25.7% � Net Debt = AUD $157.9m � Committed Debt facility = AUD $360m � Net Debt / Equity has increased as a result of business acquisitions. 25

  26. Financial Cash Flow Results $AUDm Gearing on a net � 70.0 debt to equity basis – 25.7% 60.0 Committed debt � 51.6 facility - A$360m 50.0 43.1 42.6 � Debtors days 40.0 outstanding have 33.1 28.5 fallen from 67 to 27.8 28.4 30.0 63 days 20.0 11.5 7.2 10.0 6.3 0.0 1H'02 2H'02 1H'03 2H'03 1H'04 Cashflow from Ops Cap Ex - PPE 26

  27. Financial Capital Expenditure down 37% on 1H’03 Results CPU Group Capex AUD $m Occupancy 0.4 Document Services Facilities 0.7 Information Technology 5.9 Other 0.2 TOTAL 7.2 27

  28. Financial Working Capital Management Improving Results 80 75 70 67 70 63 60 52 51 50 45 41 Receivable days 40 Payable days 30 20 10 0 days FY'01 FY'02 FY'03 1H'04 28

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