London Stock Exchange Group plc · LSE:LSEG
London Stock Exchange — H1 2003 Earnings Presentation
21 slides from London Stock Exchange's earnings presentation, Nov 6, 2003
Slide 1: London Stock Exchange Interim Results
London Stock Exchange Interim Results 6 November 2003
Slide 2: Agenda
Agenda Introduction Chris Gibson-Smith Chairman Financial Review Jonathan Howell Director of Finance CEO Overview Clara Furse Chief Executive Officer Q&A 2
Slide 3: Introduction
Introduction • Satisfactory half-year performance • Interim dividend up 8% to 1.4 pence per share • Investing for growth – new products and services launched 3
Slide 4: Jonathan Howell, Director of Finance
Jonathan Howell Director of Finance
Slide 5: Overview of results
Overview of results Satisfactory earnings growth in difficult market conditions Six months ended Year ended 30 September 31 March 2003 2002 Change 2003 £m £m % £m Turnover Issuer services 18.4 19.2 (4) 36.0 Broker services 43.7 43.7 - 87.3 Information services 50.2 50.7 (1) 102.2 Derivative services
Slide 6: Overview of results (continued)
Overview of results (continued) Six months ended Year ended 30 September 31 March 2003 2002 Change 2003 £m £m % £m Operating profit* 41.7 40.5 3 81.7 Exceptional items - (2.3) - (11.6) Profit before tax 44.7 47.4 (6) 79.5 Tax (11.2) (15.1) (26) (26.8) Profit after tax** 33.5 32.3 4 52.7 Earnings per
Slide 7: Issuer Services
Issuer Services Weak IPO market Turnover down 4% Key metrics • Annual Fees represent 59% of Issuer Services’ turnover (H1 2002/03: 55%) £19.2m £18.4m • New issues fell 27% from 128 to 94 • Companies: 2,692 (H1 2002/03: 2,849) • AIM companies up 5% to 718 H1 2002/03 H1 2003/04 7
Slide 8: Broker Services
Broker Services SETS volumes continue to grow Key metrics Turnover flat • Average daily equity bargains up 4% to 219,000 - order book bargains up 30% to £43.7m £43.7m 126,000 per day - off book bargains up 2% to 55,000 per day - international bargains down 36% to 38,000 per day • Total value of equi
Slide 9: Information Services
Information Services Terminal numbers continue to decline Key metrics Turnover down 1% • Terminal population 90,000 (March 2003: 94,000, H1 2002/03: 100,000) £50.7m £50.2m • Professional investor terminals at 81,000 (March 2003: 88,000, H1 2002/03: 94,000) • Over 1,500 Proquote screens (March 2003:
Slide 10: Operating and development costs
Operating and development costs Focus on cost control Cost/income* 64% 63% £73.4m £72.4m • Total costs down 1% reflecting £9.6m £10.7m - IT cost savings - reductions in other operational spend £63.8m £61.7m • Depreciation up following systems investment • Higher incremental costs in H2 H1 2002/03 H1
Slide 11: Summarised Cash Flow
Summarised Cash Flow Positive free cash flow Six months ended Year ended 30 September 31 March 2003 2002 2003 £m £m £m Net cash inflow from: - ongoing operating activities* 54.8 53.8 89.8 Taxation (8.6) (6.7) (25.2) Capital expenditure (18.3) (8.4) (28.1) Dividends paid (8.8) (7.3) (11.1) Free cash
Slide 12: Summarised Balance Sheet
Summarised Balance Sheet Balance sheet remains strong 30 September 31 March 2003 2003 £m £m Fixed assets Goodwill 27.3 14.1 Tangible assets & Investments 146.8 137.9 Total fixed assets 174.1 152.0 Current assets - debtors 66.7 64.3 - cash 225.6 211.0 Creditors: due within one year (72.4) (64.0) Cred
Slide 13: Financial summary
Financial summary H1 2003/04 • Weak IPO market continues and difficult conditions impacting terminal numbers • SETS growing at slower rate Current trading and prospects • No improvement in IPO market • SETS expected to underpin Broker services performance • Terminal numbers remain under pressure • C
Slide 14: Clara Furse, Chief Executive Officer
Clara Furse Chief Executive Officer
Slide 15: Financial performance
Financial performance • Demonstrated resilience – operating profit and earnings increased • Issuer and Information services impacted by tough markets, Broker services unchanged • Focus on cost control – savings in IT costs and other operational spend • Continued investment in business – new initiati
Slide 16: Issuer Services
Issuer Services • £10 billion new capital raised • 87% of Western European IPO’s (2002/03: 77%) • Yell – largest IPO in Europe this year • AIM continues to grow – 718 companies (2002/03: 686) • AIM fast track service launched May 2003 • Success in listing Russian and Canadian companies • OFT – outco
Slide 17: Broker services
Broker services • SETS continues to grow • Iceberg facility launched September 2003 • SETSmm launched this week – additional 200 securities • EUROSETS – Dutch trading service to launch March 2004 17
Slide 18: Information Services
Information Services • Terminals under pressure, growth from other products • Proquote – 1,500 screens and over 100 corporate customers • Corporate Data Warehouse launched - Stage 1 providing historic trading information (May 2003) - Stage 2 providing enhanced real-time data (June 2003) • SEDOL on t
Slide 19: Derivatives
Derivatives Covered Warrants • October most successful month with 3,700 bargains • Expanded range of underlyings – oil, gold, property, Russian stocks, currencies • Turnover £250,000 • 16,000 bargains EDX • EDX London commenced trading June 2003 • Turnover £1.6 million • 3.7 million EDX contracts tr
Slide 20: Outlook
Outlook • New initiatives contributing to turnover • Weak IPO market continues • SETS underpinning Broker Services • Terminal numbers remain under pressure • Confident performance for the year will remain resilient 20
Slide 21: London Stock Exchange
London STOCK EXCHANGE
London Stock Exchange Group — H1 2003 Earnings Presentation on 6ix