London Stock Exchange Group plc · LSE:LSEG
London Stock Exchange — H1 2002 Earnings Presentation
18 slides from London Stock Exchange's earnings presentation, Nov 7, 2002
Slide 1: London Stock Exchange Interim Results
London Stock Exchange Interim Results 7 November 2002
Slide 2: Agenda
Agenda Introduction Don Cruickshank Chairman Financial Review Jonathan Howell Director of Finance CEO Overview Clara Furse Chief Executive Officer Q&A 2
Slide 3: Introduction
Introduction • Robust performance despite difficult market conditions • Continuing to shape market landscape - Euroclear / CrestCo merger - Lobbying on European Directives 3
Slide 4: Jonathan Howell, Director of Finance
Jonathan Howell Director of Finance
Slide 5: Overview of Results
Overview of Results Strong growth in turnover and profit Six months ended Year ended 30 September 31 March 2002 2001 Change 2002 £m £m % £m Turnover Issuer Services 19.2 13.8 39% 26.9 Broker Services 43.7 39.9 10% 81.2 Information Services 50.7 47.2 7% 94.9 Other income 5.9 5.9 - 12.6 Gross turnover
Slide 6: Issuer Services
Issuer Services Selective tariff changes underpin increase Turnover up 39% Key metrics • Annual Fees represent 55% of Issuer £19.2m Services’ turnover (H1 2001/02: 45%) £13.8m • UK new issues fell 25% from 170 to 128 • Companies: 2,849 (H1 2001/02: 2,912) • AIM companies up 13% to 686 H1 2001/02 H1
Slide 7: Broker Services
Broker Services Turnover increase driven by strength of SETS Turnover up 10% Key metrics • Average daily equity bargains up 10% £43.7m to 210,000 £39.9m • Order book bargains up 59%, contributing 55% of Broker Services’ turnover • Average value of a SETS bargain down 29% to £29,000 • Average daily o
Slide 8: Information Services
Information Services Turnover growth reflects increased revenue from RNS and FTSE Turnover up 7% Key metrics • Terminal population 100,000 £50.7m (H1 2001/02: 109,000) £47.2m • Professional investor terminals at 94,000 (H1 2001/02: 101,000) • H1 2002/03 RNS turnover £3.4m (H1 2001/02: £1.0m) • FTSE
Slide 9: Operating and development costs
Operating and development costs Improved cost/income ratio Cost/income* 67% 64% £73.4m £68.4m • Total costs up 7% - reflecting £9.6m additional IT network costs £8.9m • Depreciation up following systems investment £63.8m £59.5m H1 2001/02 H1 2002/03 Other operating costs Depreciation * before except
Slide 10: Summarised Cash Flow
Summarised Cash Flow Strong free cash flow Six months ended Year ended 30 September 31 March 2002 2001 2002 £m £m £m Net cash inflow from: - ongoing operating activities 53.8 41.5 82.4 Taxation (6.7) (0.3) (15.8) Capital expenditure (8.4) (7.5) (15.8) Dividends paid (7.3) (6.4) (9.7) Exceptional ite
Slide 11: Summarised Balance Sheet
Summarised Balance Sheet Balance sheet remains strong 30 September 31 March 2002 2001 2002 £m £m £m Fixed assets 127.6 131.3 129.0 Current assets - debtors 49.2 43.0 46.8 - cash 237.1 173.0 189.9 Creditors: due within one year (75.6) (63.8) (62.7) Provisions (28.4) (22.1) (21.7) Net assets 309.9 261
Slide 12: Financial summary
Financial summary H1 2002/03 • Volatile markets led to robust Broker Services’ turnover • Continued improvement in operating margins • Strong cash flow Current trading and prospects • Strong SETS volumes • Weak IPO market continues • Difficult conditions impacting terminal numbers • Expect satisfact
Slide 13: Clara Furse, Chief Executive Officer
Clara Furse Chief Executive Officer
Slide 14: Financial performance
Financial performance H1 2002/03 • Creditable performance in difficult market conditions • Growth across all revenue lines • Operating margin up from 33% to 36% • Strengthened balance sheet 14
Slide 15: Issuer Services
Issuer Services H1 2002/03 • Companies raised £12 billion • More IPOs than NYSE and NASDAQ combined • 80 new AIM companies, largest IPO ever • 13 new international companies • Hong Kong, Nordic initiatives progressing well 15
Slide 16: Broker Services
Broker Services H1 2002/03 • SETS trades increased 59% • Continuing to reduce settlement costs – CCP, netting • Covered Warrants launched 28 October 2002 • RSP Gateway and Crest Network Service rolled out 16
Slide 17: Information Services
Information Services H1 2002/03 • Since 31 March 2002, overall terminals decreased 5% • RNS: £3.4 million turnover, attracted over 90 FTSE 100 companies • Implementing strategic review / diversifying information income • Introducing Corporate Data Warehouse FY2003 • Developing global SEDOL solution
Slide 18: Outlook
Outlook • Significant capital and revenue investment for new initiatives • Strong performance however given current market conditions: - Issuer Services – weak IPO market, well positioned to benefit from upturn - Broker Services – strong SETS volumes, difficult to forecast future activity - Informat
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