London Stock Exchange Group plc · LSE:LSEG
London Stock Exchange — Merger or Acquisition (December 2011)
17 slides from London Stock Exchange's merger presentation, Dec 12, 2011
Slide 1: London Stock Exchange Group plc to Acquire the Outstanding 50% of FTSE International Limited
GROWTH, OPPORTUNITY & DIVERSIFICATION London Stock Exchange Group plc to Acquire the Outstanding 50% of FTSE International Limited 12 December 2011
Slide 2: Agenda
AGENDA 1) Transaction highlights - Xavier Rolet, LSEG CEO 2) FTSE, platform for growth – David Lester, LSEG Director of Information Services, and Mark Makepeace, FTSE CEO 3) Financial overview – Doug Webb, LSEG CFO 4) Summary – Xavier Rolet
Slide 3: Top 3 Global Index Services Provider
Top 3 Global Index Services Provider • High quality, high growth global indices brand with excellent development opportunities • A leading worldwide provider of information solutions, helping users benchmark the performance of their investments and make informed investment decisions – Calculates ove
Slide 4: Transaction Highlights
Transaction Highlights Consideration • Outstanding 50% of business to be acquired for £450 million • Superior track record of growth – 22% revenue and EBITDA CAGR over last 5 years Growth • Strong market growth opportunities with further expansion of FTSE products and geographic presence • Immediate
Slide 5: Strong Strategic Rationale
Strong Strategic Rationale Full ownership of a global indices business with a superior track record of growth Expand and accelerate scope and growth of FTSE and LSEG – Focused strategy, investment and increased resources Complements and further diversifies LSEG’s businesses – Provides greater
Slide 6: FTSE – Rapid Growth and Success since 1995
FTSE – Rapid Growth and Success since 1995 • Rapid growth through organic development and partnerships • Track record of innovation, responding to growing complexity of markets and provision of market data, offering multiple services including: — Sale of real time, delayed and end of day index data
Slide 7: FTSE's Successful Revenue Model
FTSE’s Successful Revenue Model Subscription Fees Asset Based Fees Benchmark Indices Index Licences c.60% Revenue c.40% Revenue Data and services IPR Licensing • Annual subscriptions • Linked to growth in assets, • 97% renewal rates especially alternative • High quality data • Fast growing • Builds
Slide 8: Significant Industry and FTSE Growth Opportunities
Significant Industry and FTSE Growth Opportunities • FTSE is well positioned to benefit from Significant Growth Opportunities asset management trends • Global Equity Benchmarks — Underlying growth of global asset Benchmarking management industry (domestic to global) • Regional/Domestic Equity Benchm
Slide 9: Complementary Combination will Drive LSEG and FTSE Growth
Complementary Combination will Drive LSEG and FTSE Growth • Derivatives: Close collaboration to seek to develop innovative index products and derivative contracts to trade against them • Data Products: Enhancement of FTSE’s real-time calculations and data fees from improved service (faster distribut
Slide 10: Financially Attractive Transaction
Financially Attractive Transaction • Immediately accretive to earnings per share following completion Value and • ROIC expected to exceed WACC in year 3, including synergies Earnings • Transaction will make FTSE more visible and help enhance investor understanding Enhancement • LSEG benefits from 10
Slide 11: FTSE - Strong Track Record of Growth
FTSE - Strong Track Record of Growth • Strong growth track record and attractive financial profile – Consistently high historical growth: 2006-2010 revenue CAGR of 22% and EBITDA CAGR of 22% – Adds a substantial revenue stream, based on good customer relationships, which performed well in volatile m
Slide 12: Full Ownership of a Leading Global Index Business
Full Ownership of a Leading Global Index Business with Significant Growth Opportunities Top 3 Global indices provider with widely used benchmark products Opportunity and Diversification Highly attractive business – strong growth track record and experienced management team Increases diversific
Slide 13: “Company”) or any of its directors or any other person as to the accuracy,
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
Slide 14: Appendices
London Stock Exchange Group Appendices -14-
Slide 15: FTSE Financials
FTSE Financials £m 2006 2007 2008 2009 2010 CAGR Revenue 45.1 56.7 70.1 82.0 98.4 22% Growth 20% 26% 24% 17% 20% Costs 28.0 37.3 47.2 53.3 60.9 21% Growth 14% 32% 27% 13% 14% EBITDA 18.3 20.9 24.6 30.6 40.0 22% Growth 30% 16% 18% 24% 31% Margin 40% 37% 35% 37% 41% • FTSE to be reported as part of In
Slide 16: FTSE – A Global Index Provider
FTSE – A Global Index Provider FTSE revenue by region as at end 2010 Region Revenue £m % total Asia Pacific 12.4 13% EMEA ex UK 12.4 13% FTSE offices and trading venue partnerships UK 44.4 45% North America 29.2 30% – 16 –
Slide 17: Strong FTSE Governance Unchanged
Strong FTSE Governance Unchanged • The calculation, management and operation of FTSE Indices will remain unchanged by transaction • Index committees will continue to oversee independent management of indices • Key senior management committed to post transaction growth of business • Mark Makepeace to
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