London Stock Exchange Group plc · LSE:LSEG
London Stock Exchange — Investor Presentation (April 2013)
27 slides from London Stock Exchange's investor presentation, April 2013
Slide 1: LSEG Information Services Division Investor and Analyst presentation
LSEG Information Services Division Investor and Analyst presentation Mark Makepeace Group Director of Information Services, CEO of FTSE –1–
Slide 2: Table of Contents
Table of Contents SECTION 1) Introduction by Xavier Rolet (CEO, London Stock Exchange Group) 3 2) Background to LSEG Information Services and FTSE 4 3) LSEG Information Services has maintained growth in difficult 9 market conditions 4) Adding FTSE accelerates growth 11 5) Information Services - a gl
Slide 3: Introduction by Xavier Rolet (CEO, London Stock Exchange Group)
Introduction by Xavier Rolet (CEO, London Stock Exchange Group) –3–
Slide 4: Background to LSEG Information Services and FTSE
Background to LSEG Information Services and FTSE –4–
Slide 5: LSEG Information Services delivers a range of critical content and innovative IP
LSEG Information Services delivers a range of critical content and innovative IP LSE Information Services Division Revenues (£M) FTSE FTSE Real Time Data Other IS • Global indices • Index analytics £350 Real-time Data £300 • UK and Italian price, trading and analytical data £66 £250 Reference and Hi
Slide 6: FTSE: A Leading Global Index Provider
FTSE: A Leading Global Index Provider Wholly-owned by LSEG, FTSE is a worldwide leader in the provision of investment decision support tools £130 million total sales (LTM Dec. 2012) Originally launched in 1995 as a joint venture between LSEG and The Financial Times, FTSE has grown into a worldwide
Slide 7: FTSE's Global Reach
FTSE‘s Global Reach Fourteen offices in ten countries London Beijing San Francisco Toronto Boston Paris New York Tokyo Shanghai Milan Hong Kong Mumbai Dubai Sydney –7–
Slide 8: FTSE's Business Model
FTSE‘s Business Model Subscription Fees Asset Based Fees c60% turnover c40% turnover Revenue Lines Index Data and Data Services IPR Licensing for Index-based Financial Products Annual subscriptions Linked to growth in assets 94%+ renewal rates High margin High quality data Builds on succ
Slide 9: LSEG Information Services has maintained growth in difficult market conditions
LSEG Information Services has maintained growth in difficult market conditions –9–
Slide 10: LSEG Information Services has maintained growth through the market cycle
LSEG Information Services has maintained growth through the market cycle • Track record of growing revenues through product innovation supplemented by bolt-on acquisitions (FSA‘s Transaction Reporting Service in 2011) despite challenging market environment as banks downsize LSE Market Data Revenues
Slide 11: Adding FTSE accelerates growth
Adding FTSE accelerates growth – 11 –
Slide 12: Adding FTSE accelerates growth
Adding FTSE accelerates growth • FTSE‘s growth reflects the success of product innovation and building on positive market dynamics, including the move from active to passive management and the emergence of an Asian pool of pension and sovereign wealth assets • The combination of Information Services
Slide 13: Adding FTSE also diversifies revenues by geography
Adding FTSE also diversifies revenues by geography • FTSE‘s global reach complements Information Services‘ strength in the UK and Italy and brings exposure to high growth Asian markets and the world‘s largest pool of pension assets in the US Revenues by location pre-FTSE Revenues by location post-FT
Slide 14: FTSE has a strong track record of growth
FTSE has a strong track record of growth FTSE Revenues by Category (£M) (FY March) Data Services IP Licensing £150 £124 £125 £107 £100 £91 £47 £77 £41 £75 £63 £35 £26 £50 £18 £76 £66 £25 £51 £56 £45 £0 2008 2009 2010 2011 2012 Growth Rate 12% 22% 18% 18% 16% Subscription 97% 96% 96% 97% 95% Retentio
Slide 15: Information Services – a global growth strategy
Information Services – a global growth strategy – 15 –
Slide 16: Information Services – a global growth strategy
Information Services – a global growth strategy Mission To support the decisions and operations of market participants through the delivery of proprietary content and value-added information Strategy • Maintain historical FTSE growth rates through continued product innovation and expansion into addi
Slide 17: Many opportunities exist to support continued FTSE growth
Many opportunities exist to support continued FTSE growth – 17 –
Slide 18: Many opportunities exist to support continued FTSE growth
Many opportunities exist to support continued FTSE growth • Increasing ETFs assets linked to FTSE • Adoption of FTSE in North America • Opening up of China market • Demand for multi-price fixed income indices – 18 –
Slide 19: Increasing ETF assets linked to FTSE
Increasing ETF assets linked to FTSE AUM ($M) • Rapid growth in ETF AUM and share driven by Vanguard benchmark switch announced in October 2012 • Opportunities for further growth driven by: ‒ Continuing expansion in ETF penetration of institutional and retail markets globally ‒ Product innovation an
Slide 20: Adoption of FTSE in North America
Adoption of FTSE in North America • North America represents the World‘s largest plan sponsor (pension) market; Canada alone ranks #4 in the world • Vanguard benchmark switch ($170 BN in mutual fund and ETF assets, previously benchmarked to MSCI) emphasizes the quality of FTSE‘s international equity
Slide 21: China Market
China Market • International investors can only access China ‗A‘ Share Market through quota schemes – Qualified Foreign Institutional Investor (―QFII‖) & Renminbi Qualified Foreign Institutional Investor (―RQFII‖) — QFII is a program launched in 2002 in China to allow licensed foreign investors to b
Slide 22: China Market
China Market • Various scenarios emerge depending on the speed of reform: China equity market evolution – including A-shares After A Share Inclusion Existing QFII 10 x Existing Before A Share No Quota / No Quota / No China Quota / 30% QFII Quota / Inclusion 30% FOR FOR FOR 30% FOR Number of Constitu
Slide 23: China Market
China Market • FTSE 1st global index provider in China in 2000 through J.V. with Xinhua News Agency • World‘s largest China ETFs on FTSE China indexes in New York, London & Hong Kong • FTSE China A50 index has established a strong position in ETFs on QFII & RQFII schemes in Hong Kong; AUM $11bn and
Slide 24: China Market
China Market • Hong Kong‘s pension scheme, MPF (assets of £55bn) will soon start to allow investment in China A shares & fixed income – FTSE provides the benchmark indices to MPF Market share of Hong Kong listed China ETFs by AUM – 24 –
Slide 25: Demand for multi-price fixed income indices
Demand for multi-price fixed income indices Relative growth in Equity and Fixed Income ETFs • Fixed income is the fastest growing asset class in the ETF and mutual fund segments Equity Fixed Income 800% • Fixed income accounts for 17% of total ETF assets globally, growing by 24% in 2011 to 600% US$2
Slide 26: Appendix
Appendix 4 London @aess Stock Exchange Group -26-
Slide 27: Pro forma revenues (£M)
Pro forma revenues (£M) Information Services Revenues FY08 FY09 FY10 FY11 FY12 4-yr. CAGR Data services £45 £51 £56 £66 £76 14% IP Licensing 18 26 35 41 47 26% Total FTSE £63 £77 £91 £107 £124 18% Real Time Data £106 £114 £104 £100 £103 (1%) Other Information Services 35 51 56 60 66 17% Total Other
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