DISCLAIMER - Equiniti/media/Files/E/Equiniti...2018/09/27 · Loan affordability issues Investment advice Pensions freedom Open banking Regulation of CMCs Interest-only mortgages

This presentation may contain ‘forward-looking statements’ with respect to certain of the Group’s plans and its current goals and expectations relating to its future financial performance condition, performance,

results, strategic initiatives and objectives. Generally, words such as “may”, “could”, “will”, “expect”, “intend”, “estimate”, “anticipate”, “aim”, “outlook”, “believe”, “plan”, “seek”, “continue” or similar

expressions identify ‘forward-looking statements.

These forward-looking statements involve risk and uncertainty because they relate to future events and circumstances which are beyond the Group’s control, including amongst other things, UK domestic and

global economic business conditions, market-related risks such as fluctuation in interest rates, the policies and actions of regulatory authorities, the impact of competition, inflation, deflation, the timing impact and other uncertainties of future acquisitions or combinations within relevant industries, as well as the

impact of tax and other legislation or regulations in the jurisdictions in which the Group operates.

As a result, the Group’s actual future financial condition, performance and results may differ materially from the plans, goals and expectations set forth in the Group’s forward looking statements.

Forward-looking statements in this presentation are currently only as of the date on which such statements are made. The Group undertakes no obligation to update any forward-looking statements,

save in respect of any requirement under applicable law or regulation. Nothing in the presentation should be construed as a profit forecast.

DISCLAIMER

3 | Equiniti Group plc 2018

ACCELERATING GROWTH INTO INTERNATIONAL MARKETSGroup Strategy

Capital Markets Day 27th September 2018


AGENDA

INTELLIGENT SOLUTIONSA Digital Innovator

EQ USA Catalyst For Growth

1

2

3

4

GROUP STRATEGY

SUMMARY


TO CREATE SUSTAINABLE VALUE THROUGH

PAYMENTS, ADMINISTRATION AND DIGITAL SOLUTIONS FOR

CLIENTS, THEIR EMPLOYEES AND CUSTOMERS

GROUP STRATEGY


GROUP STRATEGY

RELATIONSHIPS

HIGH FIDELITY

TECHNOLOGY

PROPRIETARY

PEOPLE

SKILLED

DIFFERENTIATED ASSETS

Strategy based on high value regulatory specialism


GROUP STRATEGY

• Non-discretionary anchor services

• Risk averse purchasers

• Focus on regulation, payments and compliance

• Strategic account management

– 70 Years

– 58 Years

– 33 Years

– 36 Years

– 21 Years

– 36 Years

– 24 Years

– 59 Years

LONG TERM TECHNOLOGY BASED RELATIONSHIPS

NEW CLIENTS

– 22 Years

– 21 Years

– 18 Years – 14 Years

Average client relationship – 29 years


GROUP STRATEGY

• Compendia pension

administration and payroll

• Custody and settlement,

investment and wealth

management

• Share registration,

dividend and shareplan

administration

• Enterprise workflow

and case & complaints

management

PROPRIETARY TECHNOLOGY PLATFORMS

Over £100m invested in core platforms since 2008


GROUP STRATEGY

PEOPLE

US

c500 COLLEAGUES

Share registration

UK

c3,900 COLLEAGUES

Share registration & equity products

Pensions

Technology

INDIA

c900 COLLEAGUES

Operations

Support & IT

Resilient 24/7 global infrastructure


GROUP STRATEGY

GROWTH DRIVERS: BUSINESS CHALLENGES CREATE OPPORTUNITIES

REGULATION

• Onboarding• Credit servicing• Data protection• Risk and fraud• Consumer rights• Remediation

DIGITISATION

• Reduced cost to serve• Consumer expectation• Client acquisition• Technical debt

COST REDUCTION

• Low economic growth• Inescapable cost pressures• Drivers for outsourcing

Multiple opportunities for tech-enabled specialist services


GROUP STRATEGY

VALUE CREATION ALGORITHM

Grow sales to existing clients

Win new B2B Clients

Develop & acquire new capabilities

Reinvest strong cash flows

Operating leverage

• Renewal of all UK registration clients including BAE Systems, GSK, Royal Mail and Santander

• Credit services to Admiral and MotoNovo Finance

• Large scale remediation and fulfilment projects now running with major UK banks

• Key accounts now take >10 products

• New mandates for registration including Dunelm, Hiscox, JLT, Howdens and Segro

• New mandates for Shareplans including Avast and National Grid

• New client wins in the US including National Bank Holdings, Perspecta and Inmarsat

• 70% of new company listings including Aston Martin, Avast and Funding Circle

• Multiple technology sales including Admiral, Neilson and Ulster Bank

• US transfer agency capability in place following 1st February completion of EQ US

• Boudicca Proxy Services acquired in April 2018, cross-sold to 18 registration clients

• Estate management model growing, including ‘tell-us-once’ pilot for six major UK banks

• Blockchain registration and proxy solicitation now running in test

• c900 IT and operations staff now offshore in Chennai and mobilising a new 400-seat technology centre in Bangalore

• Continuing efficiency gains in the UK business with further margin expansion

• Multiple automation and digitisation opportunities arising from MiFID II

• Target cash flow conversion of 95% target

• Continuing investment in development capex for core operating platform and new fintech products

• Pipeline of late-stage bolt-on acquisitions under evaluation

Proven strategy for sustainable value generation


GROUP STRATEGY

GROW SALES TO EXISTING CLIENTS

84

155

0

20

40

60

80

100

120

140

160

180

2014 2018

Key Account growth(2014-2018**)Revenue £m

59

117

0

20

40

60

80

100

120

140

2014 2018

Registration-only Key Account growth (2014-2018**)

Revenue £m

CAGR 17% CAGR 19% 100%85%

**Annualised ytd

Established and sustainable cross-selling through key account relationships

291369 383 406

195254

0

100

200

300

400

500

600

FY 2014 FY 2015 FY 2016 FY 2017 H1 2017 H1 2018

Group Revenue £m

CAGR 12%

+30%


GROUP STRATEGY

INTELLIGENTSOLUTIONS

PENSIONSSOLUTIONS

INVESTMENTSOLUTIONS

COMPETITOR TRANSFERS NEW IPOS

WIN NEW B2B CLIENTS

70% of IPOs and almost all register transfers


GROUP STRATEGY

DEVELOP AND ACQUIRE NEW CAPABILITIES

CAPABILITIES

• Loan servicing

• Remediation

• Data analysis

• Global payments

• Proxy solicitation

• Risk and fraud

ACQUISITION CRITERIA

• Strong revenue synergy

• Proprietary technology

• Focus on regulation, payments, data

• No competitive process

• Multiple arbitrage

• 15% ROCE hurdle

Current ROCE = 39%, Year 1 multiple = 5.0x, Current year multiple = 3.0x

EQ Acquisition Service Year of Acquisition

EV (£m)

EBITDA Average 14-18

(£m)

Pancredit Credit Apr-14 11.3 2.4

JP Morgan CDS Exec Dealing Sep-14 13.0 2.0

Invigia Remediation Sep-14 19.5 5.2

Selftrade Share dealing Jan-15 17.6 4.1

Transglobal Payment Solutions Payments Sep-15 3.9 2.1

KYCnet Risk Mar-16 15.7 3.4

Riskfactor Risk Mar-16 6.5 1.3

Toplevel Workflow Jul-16 2.8 0.6

Marketing Source Data Jan-17 15.5 4.3

Nostrum Credit Jul-17 8.0 2.8


GROUP STRATEGY

OPERATING LEVERAGE

Offshore capabilities

Scale

AutomationDigitisation

MULTIPLE OPPORTUNITIES

TO DRIVE MARGINS

• c900 people in Chennai with 2nd centre in Bangalore

• Multiple automation and digitisation opportunities

• Robotics and artificial intelligence increasingly relevant

Revenue CAGR of 12%, EBITDA CAGR of 14%

67

86 92 98

4255

10

15

20

25

0

20

40

60

80

100

120

140

FY 2014 FY 2015 FY 2016 FY 2017 H1 2017 H1 2018

EBITDA £m EBITDA %

23.1 23.4 24.2 24.3

+32%


GROUP STRATEGY

CASHFLOW GENERATION AND DISTRIBUTION SINCE IPO (2016 – H1 2018)

REINVESTING STRONG CASH FLOWS

Non-Operating charges: £12.5m WFSS integration costs, £11.5m WFSS transaction costs, £5.7m restructuring and transformation costs and excludes IPO related costs in 2016. Rounding to nearest £1m for simplicity

246

(5)

240

(30)

(77)(6)

(10)

117

(23)

(55) (32) 8

£114m net proceeds from Rights Issue£(18)m IPO related costs£62m borrowings£(213)m net acquisition costs


GROUP STRATEGY

INTRODUCING THE TEAMS

• The combination of proprietary technology and specialised skills to complex regulatory problems

• The driver for cross-sell into key accounts

• Business overview and product demonstrations

• A generational opportunity to extend the leading UK share registration franchise into the largest global capital market

• Business overview, synergies, integration and demonstrations


AGENDA

REGULATORY REMEDIATION

CREDIT SERVICES

INTRODUCTION

SUMMARY

KNOW-YOUR-CUSTOMER (KYC)

DATA ANALYTICS

1

2

3

4

5

6


TO ACCELERATE GROWTH THROUGHNEW AND ESTABLISHED EQUINITI RELATIONSHIPS

We harness the power of our technology, data and people to help our clients respond to challenges of regulation, digitisation and cost reduction

INTELLIGENT SOLUTIONS


REVENUEDRIVERS

• Regulatory and legislative changes

• Complex remediation and complaints management projects

• Licence sales of proprietary technology: Loan servicing, KYC, Workflow

• Recurring support and maintenance revenue

• Revenue generated through provision of data solutions including providing clients with access to consumer, business and targeted online data

MARGINEXPANSION

• Driving and maximising operational efficiencies, including nearshoring/offshoring

• Continuous automation of processes

• Cost synergies across our portfolio of products and capabilities

90 92109

124

5578

0

20

40

60

80

100

120

140

FY 2014 FY 2015 FY 2016 FY 2017 H1 2017 H1 2018

1622

2833

1318

0

5

10

15

20

25

30

35

FY 2014 FY 2015 FY 2016 FY 2017 H1 2017 H1 2018

CAGR 11%

CAGR 27%

Revenue £m

EBITDA £m

10%

15%

25%

50%

% Revenue by Service LineFY 2017

Data

KYC

Credit

Remediation +42%

+33%



GROWTH DRIVERS

ANTI MONEY LAUNDERING

FRAUDDETECTION

AND PREVENTION

REMEDIATION AND

COMPLAINTS

CYBER DEFENCE

DATAANALYTICS

ANDCOMPLIANCE



Complaints Management -Ongoing

Customer Targeting

Unsecured Consumer Credit Software

Complaints Management -Remediation

Factoring Fraud Analytics

Cyber Security

Asset Reunification

KYCNet Services

7

8

9

10

11

12

13

14

15

16

17

18

19

20

7 8 9 10 11 12 13 14 15 16 17 18 19 20

EQ S

olu

tio

n T

ran

sfe

rab

ility

Sco

re

Customer Needs Score

GROWTH DRIVERS: ALSO RELEVANT TO US MARKET

Factoring Fraud Analytics

• Highly applicable and already have initial success with new clients

Asset Reunification• Higher regulatory risks in the US drive significant need• Applicable solution and entry point as registrar

Workflow / Case Management• Other opportunities for our Digital Transformation platforms

Data Analytics• Opportunities around customer data analytics / data science

KYC / AML Services• Highly applicable solution in area of clear need for financial

institutions

Bubble size indicates revenue opportunity

Source: Company data



REGULATORY REMEDIATION : MARKET OVERVIEW

TARGET MARKET

MARKET SHARE MARKET GROWTH

COMPETITORS

• Financial services • Utilities providers • Ombudsmen and regulators

• Clients wish to reduce resource spend through automating processes – Equiniti is a leading provider in this area

• Constant change and new FCA activity, such as in the consumer credit market, will lead to increased opportunities

PREFERRED SUPPLIER TO

4 OF THE 5 LARGEST UK RETAIL BANKS

AND 3 RAPIDLY GROWINGCHALLENGER BANKS

WE ARE

#2REMEDIATION SERVICES PROVIDER


Non-PPI revenues have grown 58% (H1 2018 versus H1 2017)




REGULATORY REMEDIATION : MARKET OPPORTUNITIES

Industry-generic issues

Firm-specific issues

FCA focusPotential

miss-selling

Formal redress programmes, typically industry-wide

Some customer redress observed following firm or FCA

investigations

Issues where the FCA has demonstrated interest (e.g.

conducted studies or thematic reviews)

Consumer and business complaints“Accidents waiting to happen”

Arrears management

Pension review

KYC / AML

Annuities

SIPP transfer review

Packaged bank accounts

Consumer credit

Mortgage mis-selling

High-value lending

Structured products

Financial crime

Insurance add-ons

Loan affordability issues

Investment advice

Pensions freedom

Open banking

Regulation of CMCs

Interest-only mortgages

Pension transfers

Long-term savings

Data security Unsecured loans

Rent-to-own Utilities

Travel



REGULATORY REMEDIATION : CLIENTS

GENERAL INSURANCE COMPLAINTS

INVESTMENT REVIEW AND ADVISORY

SERVICES OUTSOURCE

UNSECURED LOAN REMEDIATION

CONSUMER CREDIT COMPLAINTS

WEALTH COMPLAINT HANDLING AND PPI

REVIEW

REMEDIATION DESIGN, PBA AND PPI REVIEW

REMEDIATION DESIGN AND LOAN

REMEDIATION

PPI REVIEW PPI REVIEW

PENSIONS TRANSFER REVIEW

PPI REVIEW AND CREDIT COMPLAINTS

GENERAL INSURANCE CLAIMS SUPPORT

FINANCIAL SANCTIONS AND CREDIT

COMPLAINTS

ANNUITY AND DRAWDOWN

ADMINISTRATION

UTILITIES COMPLAINTS

http://www.google.co.uk/url?sa=i&rct=j&q=&esrc=s&source=images&cd=&cad=rja&uact=8&ved=0ahUKEwiPqeSigNrPAhVHvRQKHYgDC9wQjRwIBw&url=http://www.logospike.com/aa-logo-1712/&psig=AFQjCNGBDgQqNb7O57Tj9CHDKbagKJ63Nw&ust=1476524379727913

http://www.google.co.uk/url?sa=i&rct=j&q=&esrc=s&source=images&cd=&cad=rja&uact=8&ved=0ahUKEwiPqeSigNrPAhVHvRQKHYgDC9wQjRwIBw&url=http://www.logospike.com/aa-logo-1712/&psig=AFQjCNGBDgQqNb7O57Tj9CHDKbagKJ63Nw&ust=1476524379727913

https://www.google.co.uk/url?sa=i&rct=j&q=&esrc=s&source=images&cd=&cad=rja&uact=8&ved=0ahUKEwi0qYqm_dnPAhVBsRQKHfPGB4sQjRwIBw&url=https://uk.virginmoney.com/virgin/news-centre/gallery.jsp&psig=AFQjCNHZLQPdwm-Y6A7LOEMOdFn8bj8-xQ&ust=1476523615738971

https://www.google.co.uk/url?sa=i&rct=j&q=&esrc=s&source=images&cd=&cad=rja&uact=8&ved=0ahUKEwi0qYqm_dnPAhVBsRQKHfPGB4sQjRwIBw&url=https://uk.virginmoney.com/virgin/news-centre/gallery.jsp&psig=AFQjCNHZLQPdwm-Y6A7LOEMOdFn8bj8-xQ&ust=1476523615738971



REGULATORY REMEDIATION : CASE STUDY

Remediation for major UKretail bankIn 2017 we were selected by a large retail bank to provide outsourced services for remediation of 500,000 unsecured debts acrossmultiple brands. The bank had conducted a proactive review and identified a potential breach which could have been detrimental to customers. We worked collaboratively with the retail bank to:

• Identify the population and define a strategy to deal with each category• Provide a comprehensive management structure• Introduce a robust case-handling system to drive automation• Share remediation best practice – from concept to delivery• Adhere to stringent physical and information security standards

Outcomes:• Reviewed cases and introduced a heavily automated process• Quality checked cases to ensure standards remained high• Handled customer queries and exceptions• Issued redress offer letters and made payments• Traced customers who were non-responsive

500,000policies across multiple brands

85%reduction in handling time (automated vs manual)

18 case categoriescomplex project requiring different workflows

12 month project duration

£14mof cost savings passed through to client from automation

65%of cases automated



RECTIFICATION MASTER PROCESS: TYPICAL HIGH LEVEL RECTIFICATION WORKFLOWS

COMMUNICATION ONLY

“STRAIGHT TO PAY”

CASE REVIEW

MASTER RECTIFICATION PROCESS



CREDIT SERVICES : MARKET OVERVIEW

TARGET MARKETS


COMPETITORS

CORE MARKETS:

• Unsecured Loans

• Motor Finance

• Retail Credit

FUTURE MARKETS:

• Mortgages

• SME Lending

• Revolving Credit

Significant competitor remains internal client IT systems, though internal build diminishing

#1Unsecured Loans

Retail Finance

Platform provider

#2Motor Finance

Platform provider 8.5%+ paConsumer debt continues to increase

by spend on third party resource

Source: Company data Source: Bank of England



CREDIT SERVICES : CONSUMER INSIGHT

44%Millennials research

a loan on their smartphone

47% 83%Millennials and Gen X want e-signature for

quicker funds

Source: Equiniti Credit Services, Consumer Research Report, 2017

Prepared to borrow from an unfamiliar

lender



CREDIT SERVICES : SOLUTIONS



CREDIT SERVICES : CLIENTS

UNSECURED RETAIL FINANCE UNSECUREDRETAIL FINANCEUNSECURED /MOTOR FINANCE

RETAIL FINANCE

PEER2PEER RETAIL FINANCE UNSECUREDUNSECUREDUNSECURED RETAIL FINANCE

UNSECURED UNSECURED MOTOR FINANCEMOTOR FINANCEUNSECURED MOTOR FINANCE



CREDIT SERVICES : CASE STUDY

Implementation at aMajor UK TelcoIn 2017 we were selected by a major UK telco seeking to launch a competitive proposition in the handset finance market. An extensive evaluation of potential suppliers was undertaken and, based on our proven domain expertise with other operators such as Virgin Media and Telefonica, Equiniti was selected to provide the loan management technology and associated services to support the programme.

We are currently working with the client and its SI partner and are delivering:

• A rich API led platform which allows the client to define and manage its own customer experience independently of the loan platform

• Very high levels of automation to support high transaction throughput at low operational cost ; loans average £500 at 0% APR

• Secure and performant hosting environment capable of addressing overall volumes and sales spikes; e.g. iPhone launches, black Friday etc

• Robust compliance framework and processing; telcos have not generally been exposed to the FCA

• Domain expertise to address edge cases and subtle nuances of low value loans

18 monthsProject duration

3 Channels Number of distinct distribution channels supported

1.5mNew customers per annum

c1,000Client users accessing platform

30+Platforms being integrated as part of programme

200Size of store network supported



KYC : MARKET OVERVIEW

• Banking sector• Financial Services sector• Data / KYC Utilities• Payments / Payment solution sector• Large Corporates (multi-supplier profile)• ICOs Main competitor remains the client’s internal IT systems

WE ARE

#1IRISH MARKET

SERVICE & SYSTEMS PROVIDER IN THE9%+

AML SOFTWARE MARKET WILL GROW AT:

TARGET MARKETS


COMPETITORS

Source: LTP: Global RegTech 2018

by spend on third party resource




KYC : MARKET SIZING

$99 Billion AML Global

Spending PER YEAR by

2021

$70 Billion AML

Compliance Global

Spending PER YEAR in

2017

• Global money laundering is estimated to be 2% - 5% of

global GDP (up to $2 Trillion annually)

• Less than 1% of money laundering is currently caught

• Global regulators have responded to the increase in

global terrorism and “Panama papers events” with

increased AML / CTF regulations and fines: AML4, FATCA,

BSA, FinCEN, FATF, MiFID II, PSD2….

• $160 billion of fines have been issued to over 12 major

banks globally to date

KYC is a growing and sustainable longer-term global market

Source: Statistics from PWC, Technavio and LTP: Global RegTech 2018



KYC : CLIENTS



KYC : SOLUTIONS

LOCATIONSOur KYC Centre of Excellence is in Amsterdam, wherewe have a team of 100+ multi-national and multi-lingual KYC experts. We also offer UK locations andoffshore capability in Chennai (India).

KYC ComponentsComponents from our KYC suite to support clientswho only need part of our end-to-end solution orwho need tools to integrate with data sources, CRMsetc.

KYC CONSULTANCYWe offer KYC consultancy services, delivered fromour specialist team in Amsterdam.

KYC Out of the BoxAward winning specialist KYC process and casemanagement platform. Pre-configured to best ofbreed processes. Super-quick to implement.

KYC NETAward winning specialist KYC process and casemanagement platform. Super-configurable andcustomisable per client.

KYC EXTRAFor clients who undertake their own KYC, we offercomplementary services including QA, training, datatool management etc, in addition to providingoverflow services to boost clients’ capacity.

KYC SERVICESWe offer full KYC service outsourcing from our teamof KYC specialists. We provide CDD processes forNatural Persons and Corporate entities, whethercustomers, employees or suppliers.



KYC : CASE STUDY

Remediation for Major Irish & UK retail bank

In 2016 we embarked on a transformation programme with a leading retail and commercial bank in Ireland. Their ambition was to streamline and digitise Customer Due Diligence (CDD) and Know Your Customer (KYC) processes, so that they could better compete in on-line markets where new customer applications are turned around in seconds, whilst ensuring that appropriate checks were undertaken to manage associated customer risk. They wanted innovative, strategic partners who could support the bank’s omni-channel strategy, providing them with:

• Fast and effective digital CDD/KYC capability, enabling onboarding checks in a matter of seconds• Seamless integration with back office and other systems to support straight-through processing• Compliance with AML, CFT and Sanctions regulation• Flexible and configurable settings to support bank risk policy• Controlled and audited processes to demonstrate appropriate risk management of cases • A scalable, enterprise-wide and effective due diligence solution

Outcomes:• An integrated KYC-specific system deployed for the bank, reflecting their risk policies and procedures• Straight through processing for customers with happy path cases turned around in seconds• Structured workflows and processes for cases with potential hits, enabling a controlled objective review and

discounting of false positives• Improved new business onboarding times across multiple business lines, “Through our partnership with Equiniti

KYC Solutions we have improved the effectiveness and efficiency of our customer due diligence activity thereby reducing the risks to our business”

15+ productsCatering for a wide range of product types

95% STPCases in straight-through processing

350,000Applications processed each year

5+ Case TypesRanging from Natural Persons to complex corporate entities

85%Reduction in handling time for complex cases



DATA ANALYTICS : MARKET OVERVIEW

• UK Consumer business • Medium, Large, Enterprise• Financial Services• Marketing, Risk, Remediation, Customer Relations

4/10of the UK’s biggest spending Direct Mailers have appointed Equiniti as their Data Partner

TARGET MARKETS


COMPETITORS

Source: Data Monetization Market Report – ResearchAndMarkets

1.1Bn1.3Bn

1.5Bn1.8Bn

2.1Bn2.4Bn

2018 2019 2020 2021 2022 2023

CAGR: 16.9%




DATA ANALYTICS : CLIENTS

Customer & Shareholder Tracing

Personalised, 1-2-1 Marketing Database

Full-Service Direct Marketing

Contact Data Validation

Cyber Security Services Personalised, 1-2-1 Marketing Database


Full-Service Direct Marketing Full-Service Direct Marketing Contact Data Validation

Full-Service Direct Marketing







DATA ANALYTICS : SOLUTIONS



DATA ANALYTICS : CASE STUDY

Fully-Managed Direct Marketing for UK’s Number 1 Life Insurance CompanyFollowing the introduction of GDPR in the UK, our client required a low-risk solution to enable high-volume, personalised Direct Mail marketing including personalised quotations:

14.4mUK Consumers identified as prospects

100%Increase in Direct Mail activity

50%Reduction in time spent planning campaigns


AGENDA

DEMO





EQ AMPLIFY: THE NEED

• Understand customers

• Businesses collect data points in huge volumes

• Know what the user does. But what makes them tick?

• Better segmentation

• Personalisation

• Advanced planning and execution



EQ AMPLIFY: THE DEVELOPMENT PROCESS

ELT & Processing

Descriptions & Imagery

EQ ReachElectoral Roll

Contributor Sources

Third Party DataAttitudes & Lifestyle

IncomeCommunication Preferences

Government DataCouncil Tax BandCrime Statistics

Census

Open DataLand Registry

Energy Certificates



EQ AMPLIFY: THE DEVELOPMENT PROCESS



WHY CHOOSE EQ AMPLIFY

• Privacy by design

• Largest underlying data-set

• Best-in-class data science

• Accessible and easy to use

• Intuitive campaign planning and analysis



MONETISATION

• Licence fees (cost per annum)

• Data usage fees (cost per thousand)

GO-TO-MARKET

• UK Consumer businesses

• Medium, Large, Enterprise

• ‘3D Customer’ Product Marketing Campaign

ROADMAP

• Enhanced interactive features

• “Click and Deploy” campaign planning

• Custom datasets for industry-specific insights

EQ AMPLIFY: MARKET PLAN

SUMMARY



MULTIPLE DRIVERS OF GROWTH

Increasing regulatory activity

Cross-sell opportunities to new and existing Equiniti relationships

International opportunities, particularly in the US

New market segments and product development


EQ US


AGENDA

MARKET OVERVIEW

BUSINESS TRANSITION

STRATEGIC RATIONALE

OPERATING COST SYNERGIES

OPPORTUNITIES TO GROW

1

2

3

4

5

66

BUSINESS STRATEGY


STRATEGIC RATIONALE

The acquisition of Wells Fargo Shareowner Servicestransforms Equiniti into

a multinational share registration and corporate services business with:

• Immediate scale benefits

• Growth of market share

• Strong alignment of competency and skills

• Platform and operating cost synergy

• Cross sell and revenue synergy


EQ US

MARKET OVERVIEW

Industry overview

• The US shareholder services industry is mature and highly concentrated

• Competitors are falling behind on service and technology

• Multiple opportunities for organic growth and consolidation

#3 Market Share by Number of Issuers Served (2)

Source: Audit Analytics, Bloomberg, Group 5, FactSet, equity research.

(1) Based on Group 5 survey results; represents net promoter score based on range from -100 to +100 based upon the percent of promoter and detractor scores.

(2) Group 5 survey

#2 Market Share by Number of Shareholders Served (2)

62%22%

8%7% 1%

Computershare WFSSAST BroadridgeOther

48%

10%

31%

4%7%

Computershare WFSSAST BroadridgeOther

EQ

EQ

Services delivered at close

• Transfer agent services• Corporation actions• Escheatment services• Annual meeting• Direct Stock Purchase Plans• Employee Stock Purchase Plans• Dividend Reinvestment Plans

EQ US

• 1447 organisations served

• Rich heritage 1929

• Interactions with 5m shareholders

• Relationships with c15% NYSE

• 20 million transactions annually

• $85 billion dividends processes YTD

Shareholder Services – 5 year average client satisfaction(1)

80

82

84

86

88

90

92

94

EQ Provider A Provider B Provider C


EQ US

MARKET POSITIONING

Market share: 10%

Average No. of products/key client: 2

Organic growth (CAGR 2014 – 2017): 6%

No. of Issuers: 18,464

No. of EQ clients: c690

No. of share plan clients: -

Average all in price per shareholder: High

EBITDA margin(1): 10%

Market share: 50%

Average No. of products/key client: 10

Organic growth (CAGR 2014 – 2017): 5%

No. of Issuers: 2,576

No. of EQ clients: c700

No. of share plan clients: 200

Average all in price per shareholder: Low

EBITDA margin(1): 30%

Significant opportunity to win market share

US Transfer Agency UK Share Registration

(1) FY 2017, excluding interest income


EQ US

BUSINESS TRANSITION

July 2017 Announcement

Regulatory permissions

PLANNING CARVE OUT TRANSITION

• Trust Co. charter and licenses secured ahead of schedule• Seamless operational day-1 transition• Implementation of HR, Finance and CRM Systems• Data centres installed and configured• Launch new products• Second operational site selected Ready Q1 2019• Separation from Wells Fargo bank in process Ready Q1 2019• Operating business as usual Summer 2019• System of record build underway Transition 2020

Operational Completion

Separation from Wells Fargo

$5m Synergies in Year 1

$10m Synergies in Year 2

IT and business infrastructure New product and platform development


EQ US

STRATEGY

Grow sales to existing clients

Win new B2B Clients

Develop & acquire new capabilities

Reinvest strong cash flows

Operating leverage

• Client base of 690• Highest industry service

levels and loyalty• Relationship centred

approach – average experience of Relationship Manager 16 years

• Growing client engagement and Client Advisory Board

• Chief Customer Office to enhance customer experience and deepen relationships

• Product capability based on needs

• New clients including Mastercard, Perspecta, National Bank Holdings

• Offering market leading digital technologies and customer approach

• Growing sales team

• 250 new business leads and new ways to reach market opportunities

• Broader client markets served

• Reg A+ Cross Border opportunities

• Acquiring talent to support business opportunities

• Execution strategy with defined outcomes to measure against progress

• Riskfactor

• Private company M&A

• Proxy solicitation and governance

• Global share plans

• Investing in customer care centre

• Partnership between US and UK teams to effectively execute on opportunities

• New technology and best practices

• Automation• Digitisation• Offshore• Steering committee

between the US and UK

• Create capacity through synergies and invest in new clients and products

• Support new product servicing

• State of the art centre in Milwaukee

• Investment in digital roadmap

• Acquisition strategy


EQ US

BUSINESS STRATEGY : GROW SALES TO EXISTING CLIENTS

95% of clients and 97% of revenues preserved through transition


EQ US

BUSINESS STRATEGY : GROW SALES TO EXISTING CLIENTS

Significant Fortune 500 pipeline plus early new business wins

GE – 3 years• Renewed 2018• Fortune 100• Creative commercial offer

and increasing service excellence

MDU Resources – 89 years• Renewed 2018• 12,000 shareholders• Longest servicing client

3M – 31 years• Renewed 2018• Fortune 100• 76,000 shareholders• Minneapolis based

customer service centre

P&G – 2 years• Fortune 100• 200,000 shareholders

Honeywell – 3 years• 46,000 shareholders• Recent spin• Retained Honeywell• Anticipated future spin

Wells Fargo – 89 years• Fortune 100• 200,000 shareholders • Employee plan• Proxy • Executive share services

• J.P. Morgan – 10 years • Renewed 2018• 757 American depository

receipts (ADR) clients• Global partnership

UnitedHealth Group– 31 years• Rank 5 in Fortune 500• Corporate actions


EQ US

Private M&A

Serve new and existing clients in

administering private M&A transactions

July 2018 Q4 2018 2019 2019 2019 2019 2019

Data analytics

Increase data analytics services to our clients and

the market

Proxy services

Potential solutions include, proxy

solicitation, virtual annual meeting

Employee plans

Stock plan administration, enhanced ESPP

Global payments

Hire sales staff and build out

capabilities to support

technology enabled payments

Riskfactor

RiskfactorFraud

management. US team recruited

and sales campaign commenced

Complaints management

MMX technology and complaint

handling processes

BUSINESS STRATEGY : DEVELOP AND DEPLOY NEW CAPABILITIES


EQ US

BUSINESS STRATEGY : STRENGTHEN AND SCALE OPERATIONS

Separation from Wells Fargo

• By end Q1 2019

• Applications

• Phoenix, AZ and Bangalore

• BCP

Increased resilience

• Management information

• New telephony

• New datacentres

• Broader labour pool

Global support

• Chennai

• Bangalore

• UK

Best practice & continuous improvement

• Operational excellence

• Complex services team

• Creative solution architects

• Digitisation and robotics

• Expand delivery options

Creating scale and resilience for significant organic growth


EQ US

OPERATING COST SYNERGIES

$10m of Year 2 operating synergies already on track

Carve out efficiencies

• Deposit insurance

• FIS contract

• Disaster recovery

• Contractors

• Hosting & data

* once separated from Wells Fargo

Operating efficiencies

• Incoming Mail Digitisation

• Printing & Materials

• Robotics automation

• Digitisation

Group capabilities

• Foreign payments

• Digital platforms

• Telephony

• Expand offshore

• Knowledge automation

• Complaints management

• Speech analytics

Business process improvement

• Alternative work schedule

• Load balancing expansion

• Client event processing

• Contractors

Already solidified 30%*

Programmes Planned


EQ US

UX led | CX methodologies | Best in class

• EQ Insight R1 –code complete

• EQ Insight R1 launch

• WebChat, ChatBots, AI launch

• Shareowner – code complete

• Alexa Voice – code complete

• Shareowner iOS development

• Shareowner responsive launch

• Alexa Voice launch

• EQ Insight R2

• Shareowner iOS app

• Shareowner R2

• Shareowner Android app

• EQ Insight R3

• Shareowner R3

• iOS and Android R2

EQ US DIGITAL ROADMAP

Q42018

Q12019

Q22019

Q32019

Q42019


EQ US

EQ Insight homepage

EQ Insight user journey

Shareowner online

../wetransfer-ab19f5/Hompage to Dashboard.mp4

../wetransfer-ab19f5/Hompage to Dashboard.mp4

../Shareview online iOS app.mp4

../Shareview online iOS app.mp4


EQ US

OPPORTUNITIES TO GROWACCELERATING ORGANIC GROWTH

$m1 432

Increase addressable market

Capture market share

Increase product penetration

Develop adjacent capabilities

• Substantial pipeline

• Banks / financial

• Riskfactor

• IPO/Pre-IPO

• Reg A

• KYC/AML

• Innovative technology

• Superior customer/shareholder experience

• 50+ prospect pitches

• Impactful events – c98 leads

• Intense digital brand campaigns – c150 leads

• High fidelity testimony

• Cross-sell opportunities

• Value added upselling

• Enhanced Corporate Actions

• Broader product set

• Proxy solicitation

• Data analysis

• Private company M&A

• Global shareplans


EQ US

BUSINESS STRATEGY : WIN NEW CLIENTS

Industrial

Logistic

Properties

Trust

Significant Fortune 500 pipeline plus early new business wins

Transfer agent transfer Transfer agent transfer Pre-IPO

IPO and transfer agent

Transfer agent

Transfer agent Corporate actions and transfer agent Pre-IPO


EQ US

CONCLUSION

• The investment principals of acquisition on track

• Completion of separation of Wells Fargo on track

• $10m of operating synergies on track

• Delivering the products, services and digital capabilities the market is looking for

• Executing on a plan for growth through new client acquisition and product enhancements


CONCLUSION


CONCLUSION

1Leadership positions in large and growing markets, giving us significant growth opportunities and strong momentum

Long-term contracts with high-fidelity, blue-chip clients, contributing to high revenue visibility and organic growth

Well-invested and scalable proprietary technology, which gives us a competitive advantage and supports growth

A strong M&A track record, adding capabilities to boost our growth

Robust cash generation, providing funds to invest whilst reducing net debt and growing our dividend

SUMMARY


CONCLUSION

1

OUTLOOK

Continuing market leadership in the UK with emerging opportunities in

the US

01 02

Further transformation

and margin expansion

opportunities exist

Continuing organic growth, cash

generation and resilience

03 04

Our prior full year expectations / guidance is affirmed

Documents

DISCLAIMER - Equiniti/media/Files/E/Equiniti...2018/09/27 · Loan affordability issues Investment advice Pensions freedom Open banking Regulation of CMCs Interest-only mortgages