State Street Corporation · NYSE:STT
State Street — Merrill Lynch Banking and Financial Services Investor Conference 2007
30 slides from State Street's conference presentation, Nov 13, 2007
Slide 1: Building a Strong Growth Company: Extending Market Leadership
BUILDING A STRONG GROWTH COMPANY EXTENDING MARKET LEADERSHIP Ronald E. Logue Chairman and Chief Executive Officer State Street. Merrill Lynch Banking and Financial Services Investor Conference 13 November 2007
Slide 2: Agenda
Building a Strong Growth Company Agenda Continuing Momentum Achieving Goals Extending Market Leadership
Slide 3: Forward-looking statements
This presentation contains forward-looking statements as defined by United States securities laws, including statements about the recently completed acquisition of Investors Financial Services Corp., as well as about our financial goals, the financial outlook and business environment. These statemen
Slide 4: Continuing Momentum
CONTINUING MOMENTUM
Slide 5: Executing the Strategy
Building a Strong Growth Company Continuing Momentum – Executing the Strategy Customer Growth New Revenue Streams Successful Integration Geographic Reach Core Business Strength LEADERSHIP MARKET
Slide 6: Geographic Reach
Building a Strong Growth Company Continuing Momentum – Geographic Reach Geographic Reach LEADERSHIP MARKET Customer Growth New Revenue Streams Successful Integration Core Business Strength
Slide 7: Geographic Reach
25% 28% % Non-US 30% 42% % Non-US 9/30/07 9/30/02 Nine months ended 4,616/18,800 $.8B/$2.9B 7,883 /26,425 Non-US Employees/Employees $2.5B /$5.9B Non-US Revenue /Total Revenue Building a Strong Growth Company Continuing Momentum – Geographic Reach Non-US Revenue: 25.3% Total Company Revenue: 15.6% 5
Slide 8: Geographic Reach: Percentage of Revenue That Is Non-US
Building a Strong Growth Company Continuing Momentum – Geographic Reach Source: Merrill Lynch, October, 2007 Percentage of revenue that is non-US 51% 40% 40% STT 43% 39% 37% STT By net income 18% 29% 26% 29% 35% 27% Median 26% 21% BK 35% 27% NTRS 30% 30% 30% 2006 2005 2004 25% 25% 21% Median 25% BK
Slide 9: Successful Integration
Building a Strong Growth Company Continuing Momentum – Successful Integration Geographic Reach Customer Growth New Revenue Streams Successful Integration Core Business Strength LEADERSHIP MARKET
Slide 10: Successful Integration
Building a Strong Growth Company Continuing Momentum – Successful Integration EPS impact and achievement excludes merger and integration costs in 2003 and 2007. Leadership in hedge fund servicing Strategy Slightly accretive Slightly dilutive 99% IFS 2002 EPS Achieved in Year One EPS Impact Targeted
Slide 11: New Revenue Streams
Building a Strong Growth Company Continuing Momentum – New Revenue Streams Geographic Reach Customer Growth New Revenue Streams Successful Integration Core Business Strength LEADERSHIP MARKET
Slide 12: New Revenue Streams
OTC Derivatives Servicing PIMCO Offer servicing through new technology platform and provide trading through SSGM Building a Strong Growth Company Continuing Momentum – New Revenue Streams Insurance Lucida plc Pearl Group Limited Paternoster Leverage insurance company relationships through Princeton
Slide 13: Geographic Reach
Building a Strong Growth Company Continuing Momentum – Core Business Strength Geographic Reach Customer Growth New Revenue Streams Successful Integration Core Business Strength LEADERSHIP MARKET
Slide 14: Revenue mix 2002 vs 2007
Building a Strong Growth Company Continuing Momentum – Core Business Strength 28% 4% 6% 12% 11% 39% Year-to-date 2002 and year-to-date 2007 revenues are presented on an operating basis, and also exclude net gains (losses) on sales of available-for-sale securities; for additional detail, refer to the
Slide 15: Non-US Transaction and Non-interest-bearing Account Balances
Building a Strong Growth Company Continuing Momentum – Core Business Strength Total non-US transaction account & non-interest-bearing account balances ($BN) Time Series of Total Non-us Transaction and Non-interest-bearing Account Balances and Total Assets Under Custody Total assets under custody ($T
Slide 16: Customer Growth
Building a Strong Growth Company Continuing Momentum – Customer Growth Geographic Reach Customer Growth New Revenue Streams Successful Integration Core Business Strength LEADERSHIP MARKET
Slide 17: Customer Growth: Revenue from Existing Customers
Building a Strong Growth Company Continuing Momentum – Customer Growth Between 70% and 80% of State Street’s new revenue growth in each of the past five years, excluding the 2003 acquisition of GSS, came from existing customer relationships. 75% 80% 75% 70% 75% 2002 2006 2005 2004 2003 In 2002 our t
Slide 18: Added New Customers
Added 100 new customers AUA has grown from $35 billion in 2002 to $367 billion at September 2007, a CAGR of 60% IFS Growth Statistics Building a Strong Growth Company Continuing Momentum – Customer Growth Added 37 to the top 100 State Street customers In 2003, revenue (11 months) was $573 million an
Slide 19: Achieving Goals
ACHIEVING GOALS
Slide 20: Achieving Goals
Information reflects operating-basis financial information; refer to the reconciliation provided in the attached appendix. *Management expects to achieve growth in operating-basis revenue of 20%–22% for 2007 compared to 2006. Building a Strong Growth Company Achieving Goals 17.1% 15.2% 22.7% 2006 15
Slide 21: Achieving Goals: Tactics
Building a Strong Growth Company Achieving Goals 24.4% 35.3% 24.1% 34.9% 21.3% 31.0% Make SSgA a larger percent of State Street’s pre-tax income and Improve SSgA’s pre-tax margin 16.9% 25.7% NIM = 1.25% 300 BPS 43% 2006 NIM = 1.08% 300 BPS 39% 2005 Actively manage the Balance Sheet Generate positive
Slide 22: Extending Market Leadership
EXTENDING MARKET LEADERSHIP
Slide 23: Extending Market Leadership
Building a Strong Growth Company Extending Market Leadership MARKET LEADERSHIP Customer Growth New Revenue Streams Successful Integration Geographic Reach Core Business Strength
Slide 24: China, India and Eastern Europe
Building a Strong Growth Company Extending Market Leadership China and India and Eastern Europe Geographic Reach Customer Growth New Revenue Streams Successful Integration Core Business Strength
Slide 25: Selective Acquisitions
Selective Acquisitions Building a Strong Growth Company Extending Market Leadership Customer Growth New Revenue Streams Successful Integration Geographic Reach Core Business Strength
Slide 26: Derivatives, Insurance, Private Equity and Real-time FX
Building a Strong Growth Company Extending Market Leadership New Revenue Streams Successful Integration Geographic Reach Derivatives, Insurance, Private Equity and Real-time FX Core Business Strength Customer Growth
Slide 27: Focus and Consistency
Focus and Consistency Building a Strong Growth Company Extending Market Leadership Customer Growth Core Business Strength New Revenue Streams Successful Integration Geographic Reach
Slide 28: Continued Cross Sell
Building a Strong Growth Company Extending Market Leadership Customer Growth Core Business Strength New Revenue Streams Successful Integration Geographic Reach Continued Cross Sell
Slide 29: Extending Market Leadership
Building a Strong Growth Company Extending Market Leadership Customer Growth New Revenue Streams Successful Integration Geographic Reach Core Business Strength LEADERSHIP MARKET
Slide 30: Appendix: Reconciliation of Reported to Operating-Basis Results
APPENDIX STATE STREET CORPORATION State Street presents supplemental financial information on an “operating” basis in order to provide financial information that is comparable from period to period, and to present comparable financial trends with respect to its ongoing business operations. Managemen
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