London Stock Exchange Group plc · LSE:LSEG
London Stock Exchange — H1 2016 Earnings Presentation
25 slides from London Stock Exchange's earnings presentation, Aug 4, 2016
Slide 1: London Stock Exchange Group plc Interim results
London Stock Exchange Group plc Interim results – six months period ended 30 June 2016 4 August 2016 London Stock Exchange Group
Slide 2: Key financial highlights
Key financial highlights • Continued good financial performance with growth across all core business areas • Revenue1 up 9% • Good growth from organic investments • Total income up 11% • Expenses well controlled while investing for growth – up 5% on organic basis2 • AOP up 9% to £333.3m • AEPS up 16
Slide 3: Overview of results
Overview of results Six months ended Organic and 30 June constant currency 2016 1 2015 1 Change variance £m £m % % Revenue 721.9 663.0 9% 5% Total income 785.8 705.9 11% 7% Cost of sales (77.0) (58.1) 33% 25% Gross profit 708.8 647.8 9% 6% Share of profit / (loss) after tax of associates (3.0) - Adj
Slide 4: Income growth
Income growth Good organic growth from investment in new products Note: figures include continuing operations only London Stock Exchange Group Page 4
Slide 5: Good control of underlying expenses and benefits of cost synergies
Good control of underlying expenses and benefits of cost synergies Expenses controlled – Cost of sales up as revenue increases Note: Excluding amortisation of purchased intangibles and non-recurring items and cost of sales. Figures include continuing operations only London Stock Exchange Group Page
Slide 6: Diversified by business activity
Diversified by business activity Segmental growth 2016 H1 vs 2015 H1 Organic and constant currency Variance variance Continuing operations: % % Revenue Capital Markets 7% 4% Post Trade Services - CC&G and Monte Titoli 3% (3%) Post Trade Services - LCH 12% 8% Information Services 12% 7% Technology Se
Slide 7: Diversified by currency
Diversified by currency 2016 H1 Income £785.8m 2016 H1 Expenses £449.5m Continuing operations only; expenses include cost of sales London Stock Exchange Group Page 7
Slide 8: Summarised cash flow
Summarised cash flow Good cash generation £ million • £57.6m capex – mainly technology upgrades, new projects and integration of LCH and FTSE Russell • Discretionary free cash flow remains strong at 107.7p per share1 (2015 H1: 38.8p) Note: All above figures include continuing and discontinuing opera
Slide 9: Borrowings
Borrowings Facilities • Operating net debt £870m (£1,273m 31 December 2015) • Net debt: Pro forma EBITDA 1.3x (excluding £784m restricted cash) • Committed undrawn credit lines available for Group purposes at 30 June 2016 total Leverage* £1.1 billion, extending out to 2020 • 2016 Bond repaid in July
Slide 10: Xavier Rolet
Xavier Rolet London Stock Exchange Group Page 10
Slide 11: Successful strategy drives growth
Successful strategy drives growth • Strategy is delivering – resilient business, well diversified across products and geographies • Growth across core business areas – consistent investment in growth opportunities continues to drive revenue increases • Operational leverage – continued good cost cont
Slide 12: Investment in growth and innovation
Investment in growth and innovation FTSE Russell − Derivatives on FTSE Russell indexes – continued growth − FTSE4Good ASEAN 5 Index launched1 − FTSE Russell launched innovative data model which measures “green” revenues of 13,400 public companies Capital Markets − CurveGlobal Interest Rate futures p
Slide 13: OTC clearing - Interest rate swaps
OTC clearing - Interest rate swaps SwapClear – global leader in interest rate swap clearing SwapClear H1 2016: • $73 trillion Client notional cleared - up 78% • 460k Client trades cleared – up 48% • 4,500 clients accounts in H1 2016 (up 150% from H1 2015 ) – driven by European mandatory clearing • 9
Slide 14: OTC clearing - Compression
OTC clearing - Compression SwapClear – global leader in interest rate swap clearing • $180 trillion compressed (2015 H1: $164trn) • 1.4 million trade sides compressed (2015 H1: 1.5m) • $9 billion estimated capital savings for customers London Stock Exchange Group Page 14
Slide 15: OTC clearing – CDS and FX
OTC clearing – CDS and FX CDSClear • Good growth in share of European indices clearing, Single Name CDS volumes also progressing • European mandate implementation from February 2017; initial frontloading begins in September 2016 • €173bn cleared in 2015 up 180% • €264bn cleared in H1 2016 up 298% Fo
Slide 16: Turquoise – partnership and innovation
Turquoise – partnership and innovation Turquoise share of Pan-European trading 12% (June 2016) Turquoise Integrated Lit Order Book - 2016 H1 value traded: €674bn, up 32% (2015 H1: €510bn) Turquoise Midpoint Dark Order Book - 2016 H1 value traded: €85bn, up 40% (2015 H1: €60bn) Turquoise Block Discov
Slide 17: Proposed merger with Deutsche Börse
Proposed merger with Deutsche Börse • Industry-defining combination, creating a global markets infrastructure group anchored in Europe • Significant customer and shareholder benefits from complementary growth strategies, products, services and geographic footprint • Significant cost savings (€450m p
Slide 18: Successful strategy drives growth
Successful strategy drives growth • Strategy is delivering – resilient business, well diversified across products and geographies • Growth across core business areas – consistent investment in growth opportunities continues to drive revenue increases • Operational leverage – continued good cost cont
Slide 19: Appendices
Appendices London Stock Exchange Group Page 19
Slide 20: Notes
Notes Adjusted operating profit - excludes amortisation of purchased intangible assets and non- recurring items, to enable comparison of the underlying earnings of the business with prior periods. Adjusted earnings per share Based on number of shares 348.1m (CY 2015 H1: 346.3m), excludes ESOP Exchan
Slide 21: Key performance indicators
Key performance indicators Capital Markets - Primary Markets Capital Markets - Secondary Markets Six months ended Six months ended 30 June Variance 30 June Variance 2016 2015 % Equity 2016 2015 % New Issues Totals for period UK Main Market, PSM & SFM 25 47 (47%) UK value traded (£bn) 637 655 (3%) UK
Slide 22: Key performance indicators
Key performance indicators Post Trade Services - CC&G and Monte Titoli Post Trade Services - LCH Six months ended Six months ended 30 June Variance 30 June Variance 2016 2015 % 2016 2015 % CC&G Clearing OTC derivatives Contracts (m) 68.5 61.5 11% SwapClear Initial margin held (average €bn) 11.8 12.3
Slide 23: Revenues - Quarterly
Revenues - Quarterly CY 2015 CY 2016 £ millions Q1 Q2 Q3 Q4 CY 2015 Q1 Q2 Primary Markets 21.4 24.0 19.1 24.3 88.8 22.2 22.0 Secondary Markets - Equities 38.2 36.5 35.1 33.9 143.7 42.2 40.9 Secondary Markets - Fixed income, derivatives & other 26.3 23.6 22.9 25.0 97.8 28.0 26.3 Capital Markets 85.9
Slide 24: Contacts
Contacts Paul Froud Tom Woodley Head of Investor Relations Investor Relations Manager Tel: +44 (0)207 797 1186 Tel: +44 (0)207 797 1293 email: pfroud@lseg.com email: twoodley@lseg.com London Stock Exchange Group plc 10 Paternoster Square London EC4M 7LS For information on the Group: www.lseg.com Lon
Slide 25: Stock Exchange Group plc (the “Company”) or any of its directors or any other
No representation or warranty, expressed or implied, is made or given by or on behalf of London Stock Exchange Group plc (the “Company”) or any of its directors or any other person as to the accuracy, completeness or fairness of the information or opinions contained in this presentation and no respo
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