London Stock Exchange Group plc · LSE:LSEG
London Stock Exchange — Merger or Acquisition (March 2012)
21 slides from London Stock Exchange's merger presentation, Mar 9, 2012
Slide 1: A Global Leader in Clearing and Risk Management Services
London Stock Exchange Group plc and LCH.Clearnet Group Ltd A Global Leader in Clearing and Risk Management Services 9th March, 2012
Slide 2: Disclaimer
DISCLAIMER No representation or warranty, expressed or implied, is made or given by or on behalf of London Stock Exchange Group plc (“LSEG”) or LCH.Clearnet Group Limited (“LCH.Clearnet” or “LCHC” and together with LSEG, the “Companies”) or any of their respective subsidiaries, directors, officers,
Slide 3: Partnership Transforms LSEG's Global Clearing and Trading Capabilities
Partnership Transforms LSEG’s Global Clearing and Trading Capabilities A global leader in multi-asset, multi-venue clearing services Delivers diversification, builds on LSEG’s existing assets and Strategically Compelling expertise Strongly positions Enlarged Group for long-term, leading role i
Slide 4: Transaction Summary
Transaction Summary • London Stock Exchange Group plc to be the majority owner, acquiring between 50% + 1 share and 60% of LCH.Clearnet Group Ltd existing shares for a maximum cash consideration of up to €463m • LCH.Clearnet shareholders will receive €20 per LCHC Share acquired; €19 LSEG cash Offer,
Slide 5: LCH.Clearnet Governance
LCH.Clearnet Governance • LCH.Clearnet SA executive power maintained in France • LCH.Clearnet Group will continue to be lead regulated by ACP • LCH.Clearnet Ltd will continue to be regulated by FSA and CFTC • London Stock Exchange Group has the right to appoint LCH.Clearnet’s CEO • Ian Axe to remain
Slide 6: Enhanced Financial Scale and Diversification for LSEG
Enhanced Financial Scale and Diversification for LSEG Post Trade to contribute c.45% of Enlarged Group Total Income Other income, 1% Capital Markets, (1) 25% Post Trade Services, 23% LCH.Clearnet, Capital Markets, 29% 35% Technology Services, 6% (1) LSEG Post Trade Services, 16% Information (2) Info
Slide 7: Compelling Strategic Rationale for LSEG
Compelling Strategic Rationale for LSEG A global leader in multi - Long-term leading role in pan-European market infrastructure, providing strong, asset, multi-venue competitive and customer-focused clearing operations clearing - Capture anticipated growth in clearing services globally Accelerates g
Slide 8: Compelling Strategic Rationale for LCH.Clearnet
Compelling Strategic Rationale for LCH.Clearnet - Will assist LCH.Clearnet in stabilising its listed product flow - Provides a strong foundation from which to compete for new Benefits of scale business - Assists geographic expansion Horizontal - Governance structure underpins horizontal model throug
Slide 9: LCH.Clearnet Today: A Leading Global Clearing House
LCH.Clearnet Today: A Leading Global Clearing House • A genuine multi-asset, multi-venue provider of clearing, Central Counterparty and risk management service: − Fixed Income, OTC derivatives, commodities, listed derivatives and cash equities − One of the largest clearers of fixed income and repo p
Slide 10: Transformation Plan: Driving Efficiency and Growth
Transformation Plan: Driving Efficiency and Growth • Improve efficiency and customer focus • Align businesses closer to clients One Firm • Reduce duplication of systems across group • Putting in place the talent to drive the business • Diversify business composition to increase volumes Promote multi
Slide 11: Further Growth Opportunities
Further Growth Opportunities • Global OTC derivatives grew by circa 20% p.a. in terms of notional outstanding value between 1998 and 2011 • IRS: leading interest rate swap clearing service; industry value of IRS cleared through CCP Pre-eminent expected to be $340.5 trillion by 2013(1) OTC Clearer •
Slide 12: Significant Cost Efficiencies and Synergy Potential
Significant Cost Efficiencies and Synergy Potential Current • LCH.Clearnet’s current strategy includes: LCH.Clearnet o Increasing efficiency Transformation o Streamlining technology to better serve its customers’ needs Plan o Further develop its sophisticated risk and collateral management capabilit
Slide 13: Transaction Financing and LSEG Financial Position
Transaction Financing and LSEG Financial Position • Completion will require the payment by the London Stock Exchange Group of a maximum of €463m in cash for 60% of LCH.Clearnet Financing • LSEG intends to finance the Transaction, its related costs and expenses and the ongoing operations of the Enlar
Slide 14: LSEG Timetable / Key Approvals
LSEG Timetable / Key Approvals Timetable Key Approvals • LSEG class 1 circular • France - Autorité de Control Prudentiel (ACP) and Autorité • Offer document Posting of des Marchés Financiers (AMF)(1) • LCH.Clearnet circular Documentation • March 2012 • Netherlands - De Nederlandsche Bank (DNB) / Aut
Slide 15: A Global Leader in Clearing Services Ideally Positioned with Customers to Deliver Growth
A Global Leader in Clearing Services Clear strategic rationale – long term leading role in global market infrastructure Further growth, diversification and scale to deliver value for shareholders Unites LCH.Clearnet’s open horizontal model with LSEG’s proven track record in customer partnershi
Slide 16: Appendix
Appendix mie tondon COOLCH.CLEARNET FLX Stock Exchange Group
Slide 17: Post Trade - Organisational Structure
Post Trade - Organisational Structure London Stock Exchange Group plc London Stock CC&G Monte Titoli Exchange (C) Ltd (Milan/Rome) (Milan/Rome) • LCH.Clearnet Group Ltd incorporated in the UK • Owned by LSEG (50%+1 share to 60%) LCH.Clearnet Group Ltd • Lead regulated by ACP LCH.Clearnet Ltd LCH.Cle
Slide 18: LSEG: Proven, Successful, Customer Partner
LSEG: Proven, Successful, Customer Partner 2007 2007 2007 2007 2009 2010 2011 • Strong • Leading Italian • Prospered since • Successful customer • A leading • Successful customer • A leading global representation of settlement services LSEG acquisition centric governance technology centric governanc
Slide 19: Reconciliations of LCHC financials to LSEG accounting policies (1/2)
Reconciliations of LCHC financials to LSEG accounting policies (1/2) LCHC adjusted EBITDA €m LSEG & Enlarged Group EBITDA Calculations £m Total income (1) 391.5 LSEG LTM 30 Sep 2011 – as reported (-) Operating expenses (before impairment and non-recurring) (323.9) EBITDA y/e 31 Mar 2011 390.6 (+) Un
Slide 20: Reconciliations of LCHC financials to LSEG accounting policies (2/2)
Reconciliations of LCHC financials to LSEG accounting policies (2/2) LCHC adjusted Net Income €m Profit before tax 35.1 (+) Unrealised net investment loss 39.3 (+) Impairment and non-recurring items 22.5 Adjusted profit before tax 96.9 (-) Tax charged to income statement (13.9) (-) Tax effect on unr
Slide 21: Financial promotion and forward-looking information notice
This communication is directed only at persons who have professional experience in matters relating to investments pursuant to section 19 of The Financial Services and Markets Act 2000 (Financial Promotion) Order 2005 or to whom it may otherwise lawfully be communicated (all such persons together be
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