London Stock Exchange Group plc · LSE:LSEG
London Stock Exchange — H1 2015 Earnings Presentation
25 slides from London Stock Exchange's earnings presentation, Aug 5, 2015
Slide 1: London Stock Exchange Group plc Interim results
London Stock Exchange Group plc Interim results – six months period ended 30 June 2015 5 August 2015 Page 1 London Stock Exchange Group
Slide 2: Key financial highlights
Key financial highlights • Good H1 financial performance: • revenue up 90% • organic and acquisitions both delivering • revenue on a continuing basis1 up 9% (up 14% adjusting for loss of LME) • Total income up 83% • expenses on organic basis up 4%2 with investment in growth initiatives • adjusted op
Slide 3: Overview of results
Overview of results Six months ended1 Organic and 30 June constant currency 2015 2014 Change variance £m £m % % Revenue 1,164.9 611.5 90% 1% Total income 1,208.7 661.2 83% 0% Share of loss after tax of associates (0.1) - Adjusted operating expenses2 (842.5) (372.4) 126% 4% Adjusted operating profit2
Slide 4: Segmental highlights
Segmental highlights • Capital Markets − Underlying growth in Primary & Organic and Six months ended constant Secondary markets 30 June 2015 2014 Variance currency variance1 • LCH.Clearnet £m £m % % − Revenue ex-LME and at Revenue Capital Markets 170.0 171.2 (1%) 4% constant currency up 5% Post Trad
Slide 5: Income growth
Income growth Growth – both organically and from acquisitions Note: All above figures include continuing and discontinuing operations London Stock Exchange Group Page 5
Slide 6: Good control of operating expenses
Good control of operating expenses Organic costs held flat (excluding Cost of sales) Note: Excluding amortisation of purchased intangibles and non-recurring items. All above figures include continuing and discontinuing operations London Stock Exchange Group Page 6
Slide 7: Summarised cash flow
Summarised cash flow Good cash generation £ million • £48.6m capex – mainly technology upgrades, new projects and integration of LCH and FTSE Russell • Discretionary free cash flow after investment activities remains strong at 38.8p per share1 (2014 H1 : 46.5p) Note: All above figures include contin
Slide 8: Borrowings
Borrowings Facilities • Operating net debt £1,454m (£1,587m 31 December 2014) • Net debt: Pro forma EBITDA 2.0x (excluding £922m restricted cash) • Committed undrawn credit lines available for Group purposes at 30 June 2015 total £0.5 billion, extending out to 2018 Leverage Ratings: • LSEG: S&P BBB+
Slide 9: Capital allocation / dividend
Capital allocation / dividend Continue to review ways to enhance shareholder value • Focus remains on leverage − Target leverage ratio 1.0 – 2.0x net debt : EBITDA • Flexibility to invest for growth – organic/inorganic • Interim dividend increased 11.4% to 10.8p per share − reflects good H1 results
Slide 10: Xavier Rolet
Xavier Rolet London Stock Exchange Group Page 10
Slide 11: Strategy delivering good results
Strategy delivering good results • Open access is working - CBOE and CME to trade FTSE Russell index derivatives • Strategy is delivering - customers benefitting from diversified business, continued innovation and global scale • Operational leverage – continuing cost control and delivering integrati
Slide 12: Innovation – leveraging assets
Innovation – leveraging assets LCH.Clearnet − Compression providing client benefits - $164 trn compressed in H1 − Inflation Swaps launched − Portfolio margining being developed for 2016 launch − FX and Repo opportunities FTSE Russell − New CME futures licence in US − CBOE – options licence signed −
Slide 13: FTSE Russell
FTSE Russell 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 – on track • Integratio
Slide 14: Post Trade - Multiple growth opportunities
Post Trade - Multiple growth opportunities • Work underway to achieve incremental revenue opportunities totalling €175m to €250m (by exit 2018): • Client clearing €30m - 40m p.a. • Compression €10m - 15m p.a. • Inflation swaps €10m p.a. • European Repo service €10m - 20m p.a. • ForexClear €25m - 40m
Slide 15: Global growth - China
Global growth - China Delivering on strategy to extend global reach • FTSE Russell − Over 70% of A Share ETF AUMs listed in Hong Kong are based on FTSE China indexes, with $21bn assets benchmarked; leading futures contract licenced to SGX − FTSE launched China offshore and onshore bond indexes - rel
Slide 16: Outlook
Outlook • Strategy is delivering - customers benefitting from diversified business, continued innovation and global scale • Open access is delivering in indices and further growth opportunities in Post Trade from Portfolio Margining • Continued integration of Russell and FTSE indexes to achieve cost
Slide 17: Appendices
Appendices London Stock Exchange Group Page 17
Slide 18: 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 346.3m (CY 2014 H1 : 293.7m), excludes ESOP and a
Slide 19: Operating expenses
Operating expenses Cost : Income ratio 1 57% (CY 2014 H1 56%) 1 Excluding discontinuing operations (Russell Investment Management and a smaller business line held for sale) Costs exclude discontinuing operations, amortisation of purchased intangibles and non-recurring items Note: Minor rounding diff
Slide 20: Key performance indicators
Key performance indicators Capital Markets - Primary Markets Capital Markets - Secondary Markets Six months ended Six months ended 30 June Variance 30 June Variance 2015 2014 % Equity 2015 2014 % New Issues Totals for period UK Main Market, PSM & SFM 47 48 (2%) UK value traded (£bn) 655 587 12% UK A
Slide 21: Key performance indicators
Key performance indicators Post Trade Services - CC&G and Monte Titoli Post Trade Services - LCH.Clearnet Six months ended Six months ended 30 June Variance 30 June Variance 2015 2014 % 2015 2014 % CC&G Clearing OTC derivatives Contracts (m) 61.5 55.9 10% SwapClear Initial margin held (average €bn)
Slide 22: Revenues - Quarterly
Revenues - Quarterly CY 2014 CY 2015 £ millions Q1 Q2 Q3 Q4 CY 2014 Q1 Q2 H1 Annual Fees 10.6 11.0 11.3 11.2 44.2 11.3 11.2 22.5 Admission Fees 10.1 14.3 8.8 11.5 44.6 10.1 12.8 22.9 Cash equities UK & Turquoise 26.4 24.5 23.8 26.5 101.2 28.1 26.8 54.9 Cash equities Italy 9.9 10.0 8.7 9.4 38.0 10.1
Slide 23: Revenues – Quarterly (continued)
Revenues – Quarterly (continued) CY 2014 CY 2015 £ millions Q1 Q2 Q3 Q4 CY 2014 Q1 Q2 H1 FTSE 45.9 44.4 48.3 48.2 186.8 51.2 50.0 101.2 Russell Indexes - - - 10.0 10.0 33.8 36.2 70.0 Real time data 23.3 21.3 21.3 18.4 84.3 21.3 20.7 42.0 Other information 22.8 22.3 23.4 23.4 91.9 24.5 23.3 47.8 Info
Slide 24: 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 25: Stock Exchange Group plc (the “Company”) or any of its directors or any other
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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