London Stock Exchange Group Plc · LSE:LSEG
London Stock Exchange — Bank of America Merrill Lynch Conference 2011
26 slides from London Stock Exchange's conference presentation, October 2011
Slide 1: London Stock Exchange Group plc - Bank of America Merrill Lynch Conference
London Stock Exchange Group plc Bank Of America Merrill Lynch Conference October 2011
Slide 2: David Lester, Director of Information Services
David Lester Director of Information Services London Stock Exchange Group • Joined the Group in 2001 • Previous experience – Accenture and Thomson Reuters • Responsible for LSE Information Services division (27% of Group Income) • Chairman of Turquoise, MillenniumIT and ProQuote • Chairman of FTSE I
Slide 3: Agenda
Agenda • Group strategy and progress • Information Services – Operations – Recent performance – Market opportunities • Capital Markets – Turquoise • Q&A 3
Slide 4: FY 2012 Q1
FY 2012 Q1 – Interim Management Statement 20 July 2011 • Strong increase in total income, up 14% on Q1 last year (up 12% at constant currency) to £190.2 million • Primary markets revenues up 22%, with growth in number of new issues and money raised • Turquoise progressing well – the no.2 MTF for pan
Slide 5: Diversified Group income
Diversified Group income FY 2012 Q1: £190.2m Total income £m Total income % FY 2012 Q1 £190.2m £167.3m Capital Post Trade Information Technology Other Markets 42% 27% 23% 6% 2% 5
Slide 6: Delivering on our strategy
Delivering on our strategy • Driving efficiency — Control operational costs Getting in shape — Implement new technology — Adjust business model and pricing to align with customer needs • Building scale — Service to international customers — Scale drives efficiencies • Increasing scope — Increase div
Slide 7: Information Services
Information Services Group provides a diverse range of data and tools that enable decision making and operational efficiencies of an international client base Real time Reference and Desktop and Global data historical data workflow indices ProQuote / SEDOL UK and Italian Market Connect price, tradin
Slide 8: Information Services
Information Services • Real time data - terminals stable for last 18 months — 40% / 60% split UK / International • New initiatives: — Non-displayed data fees implemented January 2011 — Direct reporting service live 2011 — Separate, low cost post trade data feed – to develop high quality data availab
Slide 9: Information Services – other products
Information Services – other products • FTSE — over $5 trillion of assets benchmarked to FTSE indices globally (3rd largest index provider worldwide) — FTSE/Xinhua index now 100% owned – largest Chinese ETF benchmark • UnaVista — post trade solutions: matching, validation and reconciliation — Swaps
Slide 10: Information Services FY 2011 results
Information Services FY 2011 - results Revenues Highlights Real time data professional terminals stable UK 93,000 unchanged on 31 March 2010 Italy 139,000, down 3,000 Non-displayed data increasing (HFTs, MTFs, Algo) Revenue from Other Information products up 13% FTSE - revenues up 18%
Slide 11: Information Services - Universe
Information Services - Universe Media Regulators Publishing, Electronic info Trust & Custody Banks News / Commentary Index Analytics Pricing / Valuation Market Data Real-time Historical D i Processing / STP v Engines / e Extranets / VPNs r Risk / Outsourcing s Software / Connectivity i Treasury Proc
Slide 12: Capital Markets - Turquoise
Capital Markets - Turquoise • Turquoise growing; now >6% of European cash equities trading – no 2 MTF in Europe • 28% share of European MTF dark segment; no 2 in Europe • Launch of Turquoise Derivatives – June 2011 12
Slide 13: Strength in diversification
Strength in diversification Attractive and established building blocks for growth Current strategic focus #1 market globally for international listings • Primary markets: Expand our global franchise – #1 global listing #1 cash equity trading business in Europe venue for international companies #1 ET
Slide 14: Summary
Summary Financial Performance • Solid FY 2011 financial results – total income up 7%, 4% reduction in operating expense and AEPS up 23% • Q1 FY 2012 income up 14% to £190m • Expect to deliver good H1 results Delivering on Strategy • Getting in shape – key steps taken include: • Millennium Exchange r
Slide 15: Appendices
London Stock Exchange Group Appendices
Slide 16: Regulation
Regulation Changing regulatory environment creates uncertainty and opportunity • MIFID/MIFIR review Proposal due 19 October 2011, Live 2013/14 • Transparency regimes for all non-equity trading – issues re “calibration” of regimes • Increased regulatory oversight of RMs, MTFs, BCNs (inc dark pools) •
Slide 17: Markets / business model
Markets / business model Capital Markets Post Trade Primary Secondary Clients- trading firms, banks, Clients – listed companies and Clients – trading issuers and fund managers other issuers firms/banks/brokers Revenues from: Revenues from: Revenues from trading: - Clearing of trades - Annual Listing
Slide 18: Capital Markets - Share of trading
Capital Markets - Share of trading • UK and Italy share of trading 63.5% and 83.6% (Jan-Aug 2011, excluding Turquoise) 18
Slide 19: Post Trade: Delivering on our strategy
Post Trade: Delivering on our strategy Clearing Net treasury income benefiting from: • Management changes – greater use of broader range of banks • Investment made in risk and treasury management • Increased margin collected from higher volumes, new markets and increased direct participation from no
Slide 20: Technology Services
Technology Services • Millennium Exchange successfully rolled out on Turquoise and LSE – and will be used by Johannesburg SE and Oslo Bors • World leading consistent low latency performance • IDEM roll out on SOLA and upgrade for Turquoise Derivatives 20
Slide 21: Summarised cash flow
Summarised cash flow Strong cash generation £ million Investment activities • £43m capex – includes trading platform implementations for Turquoise, UK equities and IDEM derivatives • £5.5m invested in the acquisitions of ProMac and MTS France • Free cash flow per share 80.4p (65.6p) 21
Slide 22: Shareholder returns - Dividends (pence per share)
Shareholder returns £110mm £139mm £52mm share share share repurchase repurchase repurchase Special Special dividend of dividend of £163mm £498mm Dividends (pence per share) Progressive dividend Policy Total dividends paid as a percentage of “Adjusted basic earnings per share” as reported by LSEG, FY
Slide 23: Borrowings
Borrowings • Net borrowings £245m • £125m cash reserved for regulatory and operational purposes LSEG ratings (updated July 2011) • S&P A- (stable) • Moody’s Baa2 (negative watch) 23
Slide 24: Annual Report 2011
Annual Report 2011 • London Stock Exchange Group Annual Report 2011 – Group at a glance - main types of revenue, customers and KPIs (page 4) – What we do – description of our business segments (page 6) – Strategy in action – strategic imperatives and drivers (page 14) – Segmental review – introducti
Slide 25: Contacts and Information
Contacts and Information Information on the full range of products and services can be found at: www.londonstockexchange.com If you need information on any Group products, please contact: Paul Froud Tom Woodley Head of Investor Relations Investor Relations Manager Tel: +44 (0)207 797 1186 Tel: +44 (
Slide 26: Disclaimer
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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