Investor & Analyst Briefing Computershare Limited Presentation 2008.pdf · Investor & Analyst Briefing ... › Sub-prime market situation hitting our bank and brokerage competitors

Investor & Analyst BriefingComputershare Limited

13 March 2008

Investor & Analyst Briefing

Darren Murphy Head of Treasury and Investor Relations

Welcome

Computershare Global Footprint

3. Analyst Briefing of Computershare Limited.


Stuart CrosbyChief Executive Officer

Introduction

13 March 2008

Market Environment

› General slowdown in merger and acquisition activity

› Obviously less merger and acquisition value than before the sub-prime

› Biggest drop - private equity buy outs - long term benefit for Computershare

› Corporate to corporate cash and equity deals still happening

› Fundraising continues - rights issues in many markets

› Post Merger Clean-up relating to prior M&A deals will occur over the next 24 months


Interest Rates

› Materially lower than recent peaks, especially in the United States, but also in other Northern hemisphere markets

› As disclosed in ½ year results, significant hedging of core balances (about ½ of recent average daily balances)

› Continue to grow capture of balances, even if earning margin at lower rates


Interest Rate Sensitivity on Core Balances

-80

-60

-40

-20

0

20

40

60

80

-3.00% -2.50% -2.00% -1.50% -1.00% -0.50% Current 0.50% 1.00% 1.50% 2.00% 2.50% 3.00%

US$m PBTImpact

Exposure

Hedged exposure

This graph outlines the sensitivity of northern hemisphere interest rate changes when measured against core client balances (long term sustainable balances), adjusted by the impact of floating rate debt, corporate cash balances and derivative positions.


Steven RothbloomHead of Computershare USA

Business Overview United States of America

13 March 2008

Regional Overview: United States of America

› State of Play

›› No. 1 or 2No. 1 or 2 ranking across all our core businesses › Phenomenal tax season, great momentum› Significant focus on new product and service

enhancements›› CrossCross--sell effortssell efforts paying big dividends›› Adding top talentAdding top talent across the board



› Major wins› Home Depot Dutch Auction >one of theone of the largest in historylargest in history

› Proxy Solicitation for TXU Corporation Acquisition >the largest ever the largest ever publicpublic--toto--private transaction private transaction

› Plans Software Services & Software in two prominent,two prominent, complex complex spinspin--off transactions:off transactions: Tyco and Temple-Inland

› Mutual Fund Proxy Solicitation for top funds;top funds;

› Nuveen

› AIM Funds

› UBS Funds

› Pioneer Funds – included “notice and access” component.



› Challenges and Opportunities› Consolidation/exiting/reshaping of competitors

› Private equity no longer competing with us for acquisitions and taking clients

› Renewed Acquisitions Focus

› Computershare Executive Services (formerly RSS)

› Administar

› Sub-prime market situation hitting our bank and brokerage competitors

› Computershare USA an increasingly attractive partner and expert resource to other financial institutions

› Merger and acquisition activity & interest rate environment


Regional Overview: United States of AmericaInvestor Services

› State of Play › Major market share of top-tier clients

› Dow 30 – 63%› S&P 500 – 36%› Fortune 500 – 31%

› Fiscal year to date: 110 new appointments› Awarded significant amount of IPO-related business› Acquired UMB Bank transfer agent business


Regional Overview: United States of America Investor Services

› Challenges and Opportunities › Implement quality methodology to:

› Improve productivity› Reduce operating risks› Differentiate us in the marketplace

› Market dynamics› New products and innovations› Cross-sell initiatives and realize synergies› Merger and acquisition activity› Interest rate environment


Regional Overview: United States of America Corporate Actions and Asset Reunification Programs

› State of Play› Involved in more than 200 deals this FY to date› Several high profile M&A and private equity deals

› Challenges and opportunities› M&A activity› Interest rate environment


Regional Overview: United States of America Corporate Proxy Solicitation and Funds Services

› State of Play› Georgeson ranked No. 1 Merger and Acquisition proxy

solicitor/information agent by Corporate Control Alert › 8th consecutive year at top› Over 30% of M&A transactions tracked by the publication

› Fund Services continues to handle more than 70% of the deals in the industry

› Call center built out for both businesses

› Challenges and Opportunities› Market dynamics› New talent on board, to build key market areas› Regulatory changes > specifically notice and access


Regional Overview: United States of America Plan Managers and Plans Software

› State of Play

Plan Managers› 27 new clients› Market share top-tier clients

› Fortune 500 – 15%› S&P 500 – 14%

Plans Software› 150 new clients› Enhanced version of flagship Express Options product

› Challenges and Opportunities

› Computershare Executive Services (RSS/10b5-1 compliance)› Market dynamics > especially sub-prime situation › Competitive environment for Plans Software becoming more

favorable



Steven RothbloomHead of Computershare USA

Question Time

13 March 2008


Wayne NewlingHead of Computershare Canada

Business Overview Canada

13 March 2008

Regional Overview: Canada

› State of Play› National presence: Vancouver, Calgary, Toronto, Montreal,

Halifax› Investor Services, Corporate Trust, Plans, Georgeson

represented across all regions› Market leadership across all lines of business› Significant EBITDA growth over past five years› Costs flat› Strong management team – ongoing focus succession

planning› On target to deliver 07/08 goals


Regional Strategy: Canada

› Challenges and opportunities› Operational effectiveness/client retention› Acquisitions› New product introduction› Continued focus/development on risk management› M&A activity and interest rate environment

Regional Overview: CanadaInvestor Services

› State of Play› Strong year

› Winning more than 63% of IPOs

› Robust Corporate Actions

› IPSCO sale to SSAB Stal > $7.7B

› Prime West Energy Trust sale to ABU Dhabi NEC > valued $5B

› CanWest Comms acquisition of Atlantis Alliance > valued $2.2B

› Gained depositary role for Non-CPU clients

› Rio Tinto/Alcan > valued $37.6B

› Norilisk Nickel/Lionore > valued $6.2B

› Telus Corp./Take over Emergis > valued $763M


Regional Overview: CanadaInvestor Services

› Challenges › Regional T/As› Corporate actions >volume strong >value lower

› Opportunities› Really benefiting from global operations initiatives› Ongoing centralization› Acquisitions› Global cross border transaction ability proven› Rational pricing


Regional Overview: CanadaCorporate Trust

› State of Play › Continuing to win mandates

› Displaying strong predictable earnings

› Ongoing margin enhancement

› Seen as “industry experts”

› Cost base remains flat through successful integration of

acquisitions onto CPU platform

› Continued process improvement

› Strong leadership

› TD Corporate Trust business integrated


Regional Overview: CanadaCorporate Trust

› Challenges › Consolidation of issuer companies and trusts could result in

client loss› New debt and structured product issuances have slowed due

to market uncertainty

› Opportunities› Continued acquisition in local markets in both core and

non-traditional areas› New product development leveraging trust license and

core competencies› Increase in defaults in short term has led to increased

trustee “special services”


Regional Overview: CanadaCommunication Services

› State of Play

› Successful in winning six commercial clients

› Quality at all time high for both internal and external clients

› Tapping into registry client base e.g. BNS, BMO and quarterly

mailings for small cap market

› Strong management team


Regional Overview: CanadaCommunication Services

› Challenges › Gaining foothold in commercial markets

› Efficiently managing season spikes

› Regulatory landscape changing

› Opportunities

› Strong commercial relationships and the opportunity to

introduce new solutions to upsell and cross sell existing clients

› Access to TA client base allows for upsell and cross sell

› Fragmented market allows for consolidation

› Conversion from print to electronic distribution26. Analyst Briefing of Computershare Limited.


Wayne NewlingHead of Computershare Canada

Question Time

13 March 2008


James WongHead of Computershare Asia

Business OverviewAsia

13 March 2008

Regional Overview: AsiaHong Kong

› Review

› Main business line > Investor Services› Product extension through eIPO and allotment results

hosting has enhanced business proposition and created pricing premium

› Good growth for Plans business in Hong Kong› Also introduced Proxy and IML Services into Hong Kong


Regional Overview: AsiaHong Kong

› Threats and Opportunities

› IPO pipeline from China influenced by macro economic control

› Working on e-Comm initiative and applying for direct clearing system participation

› HKEx shareholder communications initiatives offer new revenues

› Appetite for more value added product


Regional Overview: AsiaChina

› Review

› Beijing Office opened in Oct 2007> currently has two staff

› Initially provides onshore customer service and regulatory liaison

› Excellent relationship with regulators and market infrastructure


Regional Overview: AsiaChina


› Fast changing regulatory environment difficult to navigate

› Plan to relocate Plan Managers China team to Beijing, and introducing proxy service to Chinese issuers

› Helps secure Hong Kong’s lead by building a bridge between the Hong Kong and Mainland China markets


Regional Overview: AsiaIndia

› Review

› 50:50 JV with Karvy Group › Biggest player in India in Investor Services and

second biggest player in Fund Services› Our partner has strong distribution capability that helps

to attract business


Regional Overview: AsiaIndia


› Highly competitive but fast growing market > we are the only viable volume player

› More consolidation possible but valuation expectations high


Regional Overview: AsiaJapan

› Review

› 50:50 JV with Mitsubishi UFJ Trust Bank › Main business lines – Shareholder ID and Corporate

Proxy› We have invested more resources to strengthen this

business for more volume throughput› More merger and acquisition deals seen as well as up

tick of shareholder activism, generating more high value proxy opportunities



James WongHead of Computershare Asia

Question Time

13 March 2008


Paul ConnHead of Global Capital Markets

Business Overview Notice and Access Proxy Distribution

13 March 2008

SEC Requires Internet Availability & Notification“Shareholder Choice Regarding Proxy Materials”

› What is required by companies?

› Proxy materials must be posted on a publicly-accessible Internet site other than EDGAR

› Notification of availability must be provided to shareholders per specific SEC rules

› Company mailing options

› Notice-only > one page notification of Internet availability› Full-set > traditional mailing of materials with notification

of Internet availability› Mix of notice and full-sets


SEC Requires Internet Availability & Notification“Shareholder Choice Regarding Proxy Materials”

› Effective dates

› January 1, 2008 for large accelerated filers ($700 mil US market value end of fiscal 2Q)

› January 1, 2009 for all companies and registered investment companies

›› Release available atRelease available atwww.sec.gov/rules/final/2007/34-56135.pdf .


http://www.sec.gov/rules/final/2007/34-56135.pdf

Computershare’s ProxyAccess Services for Notice-Only Mailings

› eTree®environmental incentive programs

ProxyAccess Basic ProxyAccess Plusoptional services*

Supplemental Services*

Consultation and analysis

› Delivery preference campaign prior to annual meeting

› Custom notice

› Mailing list segmentation for mixed mailing

› Proxy card follow-up mailing

› Customized Web site text

Notice document design and printing

› In-depth analysis of voting projections, as well as proxy solicitation [Georgeson]

› Complete financial printing and EDGAR filing services

Notice document distribution

› Distribution to proxy list› Householding*

Access to materials and voting

Fulfillment

› Notice and access rule guidance › Cost savings identification› Fulfillment projections› Mailing strategy guidance

› Standard notice document

› Interactive document presentation and hosting

› Standard Web screens › Voting site link› Interactive telephone system for voting› Material requests via Web, email and toll free

number

› Fulfillment of material requests in 3 business days

› Proxy materials warehousing and mailing through meeting date

eTree®environmental incentive to promote enrollment in electronic delivery


Computershare Notice Document

SAMPLE

SAMPLE

Issuer logo

Instructions to requests copies

List of voting items


Computershare Document Presentation Solution

Issuer logo and color

Thumbnails of materials

Animated link to secure voting site


Computershare Document Presentation Solution

• One-page and two-page magazine views with animated page turning


Computershare Client Participation

› Early results

› Five clients have mailed notice-only to date› All pleased with results:

› Company A fewer registered holders voted, quorum increased

› Company B fewer registered holders voted, quorum decreased less than 1%, reduced print volume by 92%, saved $500,000

› Company C foreign company not required by SEC and first annual meeting

› Company D fewer registered holders voted, quorum increased less than 1%

› Company E (in process: meeting March 26)



› Early results

› Fulfillment requests were less than 3%› 3 of the 5 used our online document presentation and

hosting solution› Internet press cites success:

www.environmentalleader.com/2007/12/10/new-sec-rule-saved-sun-500000-and-100-million-sheets-of-paper/


http://www.environmentalleader.com/2007/12/10/new-sec-rule-saved-sun-500000-and-100-million-sheets-of-paper/

http://www.environmentalleader.com/2007/12/10/new-sec-rule-saved-sun-500000-and-100-million-sheets-of-paper/


› Client adoption for 2008 › 108 clients have decided to use our notice and access

product› 37 Notice Only› 10 Mixed Mailings › 50 Full-Set Solution

› Approximately 65% are using our hosting solution › Others required to comply intend to mail full sets and

host own documents


Industry Trends

› Voluntary “fall season” participation

› Early adopters mailed only notices› Fulfillment requests in the 2-3% range› Type of meeting

› Over 60% routine› About 30% included non-routine management

proposal› Balance included non-routine shareholder proposal

› Decline in number of holders voting (~15% to 5%)› Total shares voted – minimal change +/- 1%


Industry Trends

› A recent independent survey of companies shows that for 2008 spring season:

› Use of N&A › 24% plan to use notice-only or a stratified notice

and full-set mailing› 51% will mail full-sets and post materials › 22% are undecided› 3% had already used N&A

› Expected savings with N&A 25-50%.


Industry Trends

› Increased participation in 2009+, as issuers and retail investors get comfortable with the Notice and Access environment.

› Other key geographic markets to facilitate notice and access style shareholder communications to reduce costs for issuers, drive efficiencies, increase engagement with investors and reduce environmental waste!



Paul ConnHead of Global Capital Markets

Question Time

13 March 2008

Investor & Analyst Briefing Computershare Limited

Coffee Break 13 March 2008


Mr Mark DavisHead of Computershare Australasia

Business Overview Australasia

13 March 2008

Regional Overview: Australasia


›› 9 Computershare Sites9 Computershare Sites

› Perth (2) › Adelaide› Melbourne (2)› Sydney (2)› Brisbane› Auckland

5 Business lines5 Business lines

› Investor Services› Communication Services› Plan Managers› Corporate Proxy› Fund Services.

Regional Overview: AustralasiaInvestor Services Australia

› State of Play

› Market leader with approximately 60% market share

› Capitalised well on strong market conditions

› Range of key clients retained without tender at better rates


› Strong focus on improving our annuity business

› Good achievements with self service but real benefits still to come

› Global footprint benefits being realised now more than ever

› Market conditions currently uncertain


Regional Overview: AustralasiaInvestor Services - New Zealand

› State of Play

› Mature market with approximately 85% market share

› Clear market leader

› Focused on bringing ongoing innovation to market


› Market is small and getting smaller

› New products best path to growth


Regional Overview: AustralasiaCommunication Services

› State of Play› Now become a leading provider of specialised one-to-one

communication solutions that integrate print and mail with electronic solutions

› Settled and strong management team

› Permail acquisition outcomes very positive

› Registry outcomes strong but non-registry sales a highlight› QMT acquisition transforming and will provide a range of benefits

› Challenges and Opportunities› Integration of QMT priority #1› Impressed by QMT capabilities that we will be able to market › On-line annual report legislation › Electronic communications


Regional Overview: AustralasiaPlan Managers

› State of Play› Clear market leader in Australia

› Less opportunity in New Zealand due to absence of regulatory incentives

› Global footprint key to our recent major successes eg. BHP

› Continues to achieve good organic growth

› Challenges and Opportunities › Good organic growth opportunities within CIS book remain

› Citibank alliance – dealing

› Ongoing development of China book of business by Sydney team


Regional Overview: AustralasiaProxy Solicitation

› State of Play

› Market leader in Australia having advised on over $160 billion of Merger and Acquisition transactions over the last few years

› Premium offering recognised in the market and we are winning all the big jobs eg. Coles, BHP, QMT


› Increased competition – but not on price

› Market conditions

› New product initiatives


Regional Overview: AustralasiaFund Services

› State of Play

› Retained anchor client

› Bought new technology through Portfolio Server acquisition and so system strategy settled and now very close to roll out

› We now have substantially greater industry knowledge and expertise

› Market has shown us that there exists significant opportunity but we’ve been cautious going to market while on legacy technology.


› Automation – move from manual to STP

› Old legacy systems causing problems in industry.



Mr Mark DavisHead of Computershare Australasia

Question Time

13 March 2008


Mr Steffen HerfurthHead of Computershare Germany

Business Overview Germany>Austria>Switzerland

13 March 2008

Regional Overview: Germany> Austria> Switzerland

› With the acquisition of VEM we now have a lot higher market profile, and opportunity to cross sell other CPU products like Georgeson and Governance Services

› Focussed on expanding our services into the bearer market

›› GermanyGermany > 90% of issuers are bearer shares, only 10% registered shares (with a shareholder base of ~10m.)

›› SwitzerlandSwitzerland > has a stronger registry and share plan market than Germany but smaller

›› Austria Austria > is a rather small market, but an important gateway into the growing Eastern European markets (i.e. Romania, Bulgaria, etc)


Regional Overview: Germany> Austria> SwitzerlandRegistry & AGM

› State of Play

› Dominant position in AGM market with almost 400 clients and 27 out of 30 DAX companies

› In registry business #1 by number of issuers, but not servicing companies with large shareholder base, market still 90% bearer shares


› Keep position in AGM market with 2 new competitors founded in 2007

› Governmental initiative will probably lead to an increasing number of companies with registered shares in 2009

› CPU is well positioned for small/midcaps due to cost efficiency and market access via VEM


pictures


pictures


pictures


pictures


Regional Overview: Germany> Austria> SwitzerlandRegistry & AGM

› State of Play

› Dominant position in AGM market with almost 400 clients and 27 out of 30 DAX companies

› In registry business #1 by number of issuers, but not servicing companies with large shareholder base, market still 90% bearer shares


› Keep position in AGM market with 2 new competitors founded in 2007

› Governmental initiative will probably lead to an increasing number of companies with registered shares in 2009

› CPU is well positioned for small/midcaps due to cost efficiency and market access via VEM


Regional Overview: Germany> Austria> SwitzerlandCommunication Services

› State of Play

› Integration of 2 acquired print & mail businesses completed

› CCS well positioned as provider for secure and transactional document outsourcing

› Communication and Document Services market is just at the beginning of the outsourcing curve in secure and transactional business

› Challenges & Opportunities

› Enlarging internal business (until now ~5% of revenue) by aggressive cross-selling (i.e. invitation process for AGM)

› Further cleansing of client and project base towards higher margin transactional business


Regional Overview: Germany> Austria> Switzerland Plans

› State of Play› Up until 2006, only German banks (in co-operation with IT provider)

visible as providers in Plans market› Plans market currently relatively small, but governmental initiatives

underway› CPU launched new Solution (Plan Manager) in 11/07› 2 DAX clients won in 2007 (Linde AG and Allianz SE)


› Using CPU’s client base (esp. AGM) to cross-sell› Up-Sell potential through greater acceptance of ESPP (right now

mainly executive programmes)› Dealing/margin income now possible with VEM


Regional Overview: Germany> Austria> SwitzerlandVEM

› State of Play› Germany’s leading corporate actions bank for SMEs (over 250

transactions since 1997)

› Market leader in Designated Sponsoring

› CPU’s stake ~92%

› Challenges and Opportunities› Integrate CPU’s and VEM’s service portfolio to create a fully

integrated issuer business in Germany (full banking license needed)

› Leverage on benefits for CPU’s broader global business by direct connectivity to Clearstream/Euroclear



› Cross-Sell / Up-Sell opportunities (national)

› Registry business: influence companies at IPO to use registered shares to increase the take up of registered shares in the market

› Ability to manage cash and stock on behalf of our clients which will allow us to provide a full corporate actions service to issuers -> effective alternative to Deutsche Bank and Dresdner Bank

› Offering a complete one-stop service together with AGM, registry, plans (“post-IPO service”)

› Offering dividend payment service and “Anmeldestelle”(invitation/ticket issuing office for bearer share AGMs) which needs a banking license

› Integrated solution (i.e. including dealing) for the nascent Employee Plans business in Germany



› Cross-Sell / Up-Sell opportunities (international)› Due to full Clearstream connectivity we can manage share transfers

and cash payments on behalf of issuers inside Clearstream

› Ability to access Euroclear directly or indirectly (through the Clearstream/Euroclear bridge) facilitates cross-border business allowing us to retain more transactional revenue in-house

› i.e. Ireland: ability to offer Exchange Traded Funds (ETFs) which settle in Clearstream (and potentially Euroclear) to the clients of our Irish business (which has developed a substantial ETF business in recent years)



Steffen HerfurthHead of Computershare Germany

Question Time

13 March 2008


Chris Morris Head of EMEA

Business Overview EMEA

13 March 2008

Regional Overview: UK & Ireland

› Structure› New structure in place, I will manage until end CY 2009 › Senior managers all in place and all UK residents› Some excellent next level management hired

› Lloyds registry sold to Advent named Equiniti

› Setup New Business Development Unit› Across all business lines› Increase our profile in the market› Release of InSearch

› Operations› Quality number 1 priority › Same day turnaround of transactions and complaints› Major improvement in call centre and correspondence.


Regional Overview: UK & IrelandRegistry

› State of Play

› More rational pricing in the market› Still not number 1 but getting there


› Opportunity as Equiniti manages new owners and new system

› Cross sell other CPU products to a blue chip client list

› Increase in DI listings › Maximising opportunities in local and global Corporate Actions

Rio/Alcan, Rio/BHP, RBS/ABN Amro


Regional Overview: UK & IrelandBusiness Services

› State of Play

› NHS improved profitability› Gilts best client reference in the UK› Corgi > business as usual› DPS > Brilliant business > 90% on the internet› LPS > Letting Protection Services will launch April


› Expand DPS in UK and globally› Look for other BPO opportunities where we can use our skill

sets


Regional Overview: UK & IrelandPlans

› State of Play› Number 1 in the UK› Global tax calculator live for Shell, other companies lined up› BHP voted best international plan› Released CPU broker accounts for trading and purchase of

other products i.e. ISA› Introduced full self service model, reduce risk, increase profit


› Low share prices affect dealing and number of participants

› Increase number of broker accounts

› System and operational improvements enabling us to scale up without increased headcount


Regional Overview: UK & IrelandGeorgeson

› State of Play› Total restructure of Georgeson in EMEA now profitable› Increase in lost assets business (PMC), now using US

system› Now in UK, South Africa, France, Germany, Spain and

Italy

› Challenges and Opportunities› Strong competition but we are still the only global

provider› Expansion into Russia and other European countries› Developing new information tools to increase success

rates


› State of Play

› Integration complete of Datacare and World Records› All development now done in Monahan (Ireland) › Released GEM best of both systems› Strong presence in NA & Europe weak in the UK


› Increase market share in the UK, strong competitor in ICSA› Expand into Asia Pacific› Integrate with other CPU products i.e. Issuer Online


Regional Overview: UK & IrelandCorporate Governance Services

› State of Play› Rapid expansion

› Purchased distributors in Australia, US, and Belgium

› Still considered the number 1 product in the market globally› Large increase in marketing meetings› Setting up businesses in Germany and Hong Kong

› Challenges & Opportunities› Manage growth › Train enough staff for expansion› Increase product development


Regional Overview: UK & IrelandIML

› State of Play› New Manager appointed› 90% of work is for registry and plans clients› Finally have work for colour printers

› Challenges and Opportunities› Expand commercial work › Improved service levels


Regional Overview: UK & IrelandCommunication Services UK

Regional Overview: EMEA

› South Africa

› Maintaining profitability in spite of lower Rand › Increasing market share› Providing services to other CPU EMEA offices

› Russia

› Acquiring another 15% of NRC taking us to 80%› Options to buy other registry businesses› Huge opportunities to sell other CPU services like proxy and

Plans› If DI’s take off then hold on



Chris Morris Head of EMEA

Question Time

13 March 2008

Investor & Analyst BriefingComputershare Limited

Meeting Closed

13 March 2008

Documents

Investor & Analyst Briefing Computershare Limited Presentation 2008.pdf · Investor & Analyst Briefing ... › Sub-prime market situation hitting our bank and brokerage competitors