Computershare : 2017 AGM CEO and Chairman speeches

Computershare 2017 Annual General Meeting

Chairman's speech

Welcome to the Computershare 2017 Annual General Meeting. My name is Simon Jones and I am your Chair. We have a quorum and I am pleased to declare the meeting open.

This year, as part of our ongoing commitment to making our meetings accessible to as many shareholders as possible, I am delighted to be able to welcome our shareholders who are participating through our online meeting platform.

I will now introduce my fellow directors. (Introductions)

Also attending here today are representatives of our auditors, PricewaterhouseCoopers. Bart Oude- Vrielink is also in attendance from our lawyers, Minter Ellison.

The Minutes of the 2016 Annual General Meeting are available for inspection by any shareholder by contacting the Company Secretary.

The Notice of Meeting was distributed to all shareholders and copies are also available at the back of the room. I will take the Notice of Meeting as read.

We will begin with a short presentation from me, followed by a presentation by your CEO Stuart Irving.

We will be happy to take any questions on these presentations at that point. We will then go through the formal proceedings which this year comprise five resolutions, as outlined in the Notice of Meeting. The resolutions will be decided by poll, based on votes received before the meeting as well as the votes cast in the room here today via your handsets and by shareholders using the online meeting platform. Questions will also be taken on each resolution.

Please note that voting on the resolutions is now open. For those attending here in person using handsets, the resolutions should appear on your screen. For those attending using the online meeting platform, the voting icon will appear on the navigation bar. Once you click on this, the resolutions will appear on your screen.

You can vote any time during the proceedings until I declare the voting closed after all resolutions have been considered and voted on. You can also change your vote at any time throughout the proceedings, until voting is closed. I will give you a clear prompt later in the meeting to warn of the close in voting.

I will talk in more detail about using the voting technology when we come to formal consideration of the resolutions later in the meeting.

We will also take the opportunity for general business questions and discussion, which incorporates questions from in the room and online. If you are attending online, you can start submitting questions now and we will address them later in the proceedings.

I should reiterate that due to time constraints we may not be able to address all questions today. Questions sent via the online meeting platform will also be moderated to avoid repetition, and if questions are particularly lengthy we may need to summarise them, for reasons of brevity.

In the event that we are unable to address your question in the time available today, we will send you an answer to your question after the meeting.

I will now move to my presentation.

I am pleased to report that Computershare delivered solid earnings growth, strong free cash flow and an increased dividend for shareholders in FY17.

With our growth, profitability and capital management strategies improving returns, FY17 marked an important inflection point in the Company's earnings.

We delivered FY17 Management EPS in line with upgraded guidance, an increase of 3.5% on FY16 in constant currency terms. Management EBITDA was $557.2m, an increase of 4.6%; and pleasingly our Free Cash Flow was up nearly 8%.

We are optimistic that we are starting to deliver sustained earnings growth at Computershare.

These are solid results given the challenges we faced in 2017. These included cyclically depressed corporate actions revenues, the lowest margin income yield in the Company's history and a higher tax rate.

Given these challenges, our results show the strength of our underlying business performance. Stuart will talk in more detail about our strategies to build earnings potential and sustained growth in a short while.

2017 was a busy and productive year at Computershare. Let me touch on some of the operational highlights during the year. Given our scale and breadth across multiple continents there are some staggering numbers here.

We have over 15,000 full time employees operating from 95 offices across 21 countries. We have a broad, strong client base with around 16,000 clients. We handled almost 14 million calls into our call centres last year.

We are trusted to administer $125 billion of share plan assets. We assist 125 million shareholders and participants. At June 30th we serviced $60 billion dollars of mortgages in the US with a further 64 billion pounds in the UK and we hold on average $16.7 billion dollars of client cash balances. As I said, Computershare is a strong, trusted and well established international company.

This business strength drives recurring revenues and strong free cash flow. Over 70% of the group's revenues recur. This provides us with some predictability and certainty. It provides the Board the privilege of being able to make long term plans, and strategies to drive shareholder value. Stuart will talk more about our "deliberate designs" later.

With our tight cost controls and good margins, we generate strong free cash flow. This chart shows we have generated around $3.2 billion of free cash flow over the last ten years. The consistency of these cash flows is also impressive. They self-fund our growth strategies, provide for good shareholder distributions and continue to strengthen our balance sheet.

The performance of the balance sheet is one of the stand-out features of our FY17 results and it continues to strengthen given our significant cash flow and our moves to simplify our business. In the pursuit of that simplicity, we sold both our Melbourne Headquarters and our investment in INVeSHARE this year. Our debt leverage ratio is now below our policy range. This enabled us to announce a share buy-back program. The buy-back is well underway with over 40 million Australian dollars of shares having been acquired and cancelled to date. Our philosophy with the buyback is to have regard to both earnings accretion and long term value. Put simply, it's another sign of our confidence in our future.

Our improved operating performance and strengthened capital position have enabled us to declare one of the largest dividend increases in Computershare's history.

Our final FY17 dividend was 19 Australian cents, a rise of 11.8%. This brought the total dividend for the year to 36 Australian cents, an overall increase of 9% for the year.

Since our IPO on the 27th May 1994, Computershare has distributed $55.74 in dividends to shareholders, nearly four times the current share price.

Talking more of strong shareholder returns, it was pleasing to see the Computershare share price increase nicely during the year. Our market capitalisation is now over $8 billion Aussie dollars. This shows the investment community recognises the value we are adding as we execute on our deliberate strategies.

As this chart shows, from the date we listed on the ASX in May '94, to 30th June 2017 our share price has risen by 12,409%. This compares to the ASX 200 which has increased by 181%. Not a bad return!

It is part of the special Computershare culture that we share our success with others less fortunate than ourselves. That culture has been embedded in our company from the beginning. This is a very important issue to all of us that work here.

Founded in 2005, Change a Life is our global community giving program that invests in projects that provide long term solutions to the communities involved. We focus on long term change that is felt on a global stage and provides an opportunity for people to build up their skills for a brighter and more sustainable future.

Over 8 million Australian dollars has been raised since the program was launched. Donations of nearly a million dollars supported projects in financial year 2017. Computershare matches all employee