London Stock Exchange Group plc · LSE:LSEG
London Stock Exchange — FY2015 Earnings Presentation
27 slides from London Stock Exchange's earnings presentation, Mar 4, 2016
Slide 1: Preliminary results – Year ended 31 December 2015
London Stock Exchange Group plc Preliminary results – Year ended 31 December 2015 4 March 2016 Page 1 London Stock Exchange Group
Slide 2: Key financial highlights
Key financial highlights • Strong financial performance: • Revenue up 78% • Growth from organic development and acquisitions • Revenue up 11% on a continuing basis1 • Total income up 72% • Expenses well controlled while investing for growth – up 1% on organic basis2 • AOP up 27% to £709.6m • AEPS up
Slide 3: Overview of results
Overview of results Twelve months ended Organic and 31 December constant currency 2015 2014 1 Change variance £m £m % % Revenue 2,285.4 1,283.2 78% 2% Total income 2,381.5 1,381.1 72% 2% Cost of sales2 (620.4) (120.9) Gross profit 1,761.1 1,260.2 Share of gain after tax of associates 0.5 0.1 Adjuste
Slide 4: Income growth
Income growth Growth – both organically and from acquisitions Note: figures include continuing and discontinuing operations London Stock Exchange Group Page 4
Slide 5: Good control of underlying expenses and benefits of cost synergies
Good control of underlying expenses and benefits of cost synergies Organic costs held broadly flat (excluding Cost of sales) Note: Excluding amortisation of purchased intangibles and non-recurring items and cost of sales. Figures include continuing and discontinuing operations London Stock Exchange
Slide 6: Diversified income by business and geography
Diversified income by business and geography London Stock Exchange Group Page 6
Slide 7: Summarised cash flow
Summarised cash flow Good cash generation £ million • £117m capex – mainly technology upgrades, new projects and integration of LCH and FTSE Russell • Discretionary free cash flow after investment activities remains strong at 118.6p per share1 (2014 : 79.5p) Note: All above figures include continuin
Slide 8: Borrowings
Borrowings Facilities • Operating net debt £1,273m (£1,520m 30 June 2015) • Net debt: Pro forma EBITDA 1.7x (excluding £888m restricted cash) • Pro forma# for Russell IM proceeds 1.5x • Committed undrawn credit lines available for Group purposes at 31 December 2015 total £0.5 billion, extending out
Slide 9: Capital Management Framework
Capital Management Framework Balance sheet prudency Flexibility to operate within this range for normal investment / development and to go Maintain existing leverage above this range in the short term for compelling strategic opportunities target of 1.0x – 2.0x Net Debt / EBITDA Manage credit ra
Slide 10: Xavier Rolet
Xavier Rolet London Stock Exchange Group Page 10
Slide 11: Growth opportunities and integration
Growth opportunities and integration FTSE Russell Indexes – focus on integration and growth • “FTSE Russell” global brand launched • Integration making good progress: • Sales and marketing teams merged • Cost synergies $78m by end of year three – on track • Revenue synergies $48m by end of year five
Slide 12: Positioned for further growth
Positioned for further growth Open access / customer partnerships defining the opportunities ahead FTSE Russell − New CME futures licence in US; CBOE – options licence − FTSE China A50 – strong position in ETF assets and derivatives LCH.Clearnet − Compression providing client benefits - $328 trn com
Slide 13: ETFs
ETFs • LSEG strong growth in ETF trading Exchange Traded Products LSEG order book value traded £ billion 152 • £152bn traded in 2015 +33% • LSEG strong growth in ETF listings 99 113 114 • 2,265 ETPs listed +11% • 5 new ETF issuers from around the world joined our market: BMO (Canada), CCBI (China),
Slide 14: FTSE Russell - A global derivatives business
FTSE Russell - A global derivatives business 240 million derivative contracts traded on FTSE Russell indexes in 2015 up 23% Europe North America Asia Africa FTSE 100, FTSE 250, MIB, Russell 1000 & 2000 FTSE China A50, Eurofirst 80/100, series, FTSE 100, FTSE 100 JSE Top/40 FTSE China 50 94m contract
Slide 15: OTC clearing - Interest rate swaps
OTC clearing - Interest rate swaps SwapClear – global leader in interest rate swap clearing SwapClear 2015 • $93 trillion Client notional cleared • 678k trades cleared +67% • Currently near 95% share of Clearing notional value • 2-5bps spread* advantage using SwapClear for USD, • early signs spread
Slide 16: OTC clearing - Interest rate swaps
OTC clearing - Interest rate swaps SwapClear – global leader in interest rate swap compression Compression • $328 trillion compressed • $25 billion estimated capital savings for customers • $111 trillion reduction in outstanding London Stock Exchange Group Page 16
Slide 17: OTC clearing – CDS and FX
OTC clearing – CDS and FX CDSClear • Good growth in share of European indices clearing • European indices OTR intraday share over 20% in December 2015, January 2016 & February 2016 • €173bn cleared in 2015 up 180% ForexClear – good volume growth, well positioned to serve increasing customer’s requir
Slide 18: Successful strategy drives good results
Successful strategy drives good results • Strategy is delivering - customers benefitting from diversified business, continued innovation and global scale • Operational leverage – continuing cost control and delivering integration synergies • Significant opportunities for growth – M&A and organic inv
Slide 19: Summary of Potential Merger of Equals between LSEG and Deutsche Börse
Summary of Potential Merger of Equals between LSEG and Deutsche Börse Key Terms Announced to Date • Industry-defining combination, creating a European-based global markets infrastructure group • Significant customer benefits from complementary growth strategies, products, services and geographic foo
Slide 20: Appendices
Appendices London Stock Exchange Group Page 20
Slide 21: Notes
Notes Adjusted operating profit - excludes amortisation of purchased intangible assets and non- recurring items, to enable comparison of the underlying earnings of the business with prior periods. Adjusted earnings per share Based on number of shares 347.0m (CY 2014 : 317.1m), excludes ESOP (2014 ad
Slide 22: Segmental highlights
Segmental highlights • Capital Markets − UK equity value traded up 6%, Italy trades Organic and Twelve months constant up 7% 31 December currency • LCH.Clearnet 2015 2014 Variance variance 1 £m £m % % − Revenue ex-LME and at constant Revenue currency up 7%, OTC incl SwapClear Capital Markets 330.3 3
Slide 23: Key performance indicators
Key performance indicators Capital Markets - Secondary Markets Capital Markets - Primary Markets Twelve months ended 31 December Variance Twelve months ended Equity 2015 2014 % 31 December Variance Totals for period 2015 2014 % UK value traded (£bn) 1,236 1,165 6% New Issues Borsa Italiana (no of tr
Slide 24: Key performance indicators
Key performance indicators Post Trade Services - CC&G and Monte Titoli Post Trade Services - LCH.Clearnet Twelve months ended Twelve months ended 31 December Variance 31 December Variance 2015 2014 % 2015 2014 % CC&G Clearing Contracts (m) 120.1 108.7 10% OTC derivatives Initial margin held (average
Slide 25: Revenues - Quarterly
Revenues - Quarterly CY 2014 CY 2015 £ millions Q1 Q2 Q3 Q4 CY 2014 Q1 Q2 Q3 Q4 CY 2015 Primary Markets 20.7 25.3 20.1 22.7 88.8 21.4 24.0 19.1 24.3 88.8 Secondary Markets - Equities 36.3 34.5 32.5 35.9 139.2 38.2 36.5 35.1 33.9 143.7 Secondary Markets - Fixed income, derivatives & other 27.2 27.2 2
Slide 26: Contacts
Contacts Paul Froud Tom Woodley Head of Investor Relations Investor Relations Manager Tel: +44 (0)207 797 1186 Tel: +44 (0)207 797 1293 email: [email protected] email: [email protected] London Stock Exchange Group plc 10 Paternoster Square London EC4M 7LS For information on the Group: www.lseg.com Lon
Slide 27: 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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