Annual Results Annual Results Presentation 2010 2010 .............................................. London 19 May 2010 London, 19 May 2010
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Financial results a c a esu ts Solid performance with increased revenue and EPS +1% +3% +1% -5% Revenue* DPS Profit** EPS*** * From continuing operations ** From continuing operations pre-tax profit before amortisation and impairment of intangibles arising on consolidation and exceptional items 3 *** Adjusted basic – Continuing operations
Matthew Lester Group Finance Director 4
Financial summary Financial summary • More diverse business lapping strong 08/09 comparators More diverse business lapping strong 08/09 comparators • Improving volumes and lower costs producing good profit growth in electronic broking g g • Strong revenue and profit growth in post trade risk and information services • Non-voice broking activities moving towards 50% of group profits • Strong balance sheet and cash flow • Europe/Asia agency cash equities treated as discontinued businesses 5
Group profit before tax Group profit before tax Year to Year to Var vs Headline results Underlying performance 31 Mar 10 31 Mar 09 PY £m £m Revenue 1,605 1,585 1% % 0 Net operating (1,251) (1,251) (1,220) (1,220) (3)% (3)% expenses (6%) Operating profit 354 365 (3)% Net finance charge (28) (24) (17)% -5 5 Associates 7 9 (22)% (13%) Profit before tax 333 350 (5)% -10 Mar 10 Mar 09 -15 Operating profit margin 22% 23% Revenue Operating profit The above table is from continuing operations and excludes amortisation and impairment of intangibles arising on consolidation and exceptional items. Underlying growth excludes the impact of foreign exchange. 6
Core voice Core voice Year to Headline Headline results Underlying performance 31 Mar 10 variance £m vs prior year % EMEA Revenue 506 (3)% 0 EMEA Operating profit p g p 115 (15)% ( ) -2 2 US US Margin 23% - 3 ppts Total -4 (4)% US -6 Revenue 434 3% (6%) (6%) ) ( ) ( (7%) (7%) Operating profit 80 5% -8 Margin 18% - -10 Asia -12 (12%) (12%) Revenue 96 0% -14 Operating profit 1 n/m% Margin 1% +3 ppts -16 Revenue Operating Profit Total core voice Revenue 1,036 0% Revenue Operating profit Memo Operating profit 196 (6)% Asia underlying (9%) n/m% Margin g 19% - 1 ppt pp The above table is from continuing operations and excludes amortisation and impairment of intangibles arising on consolidation and exceptional items. Underlying growth excludes the impact of foreign exchange. 7
Electronic, post trade risk & information , p Year to Headline results Underlying performance 31 Mar 10 Headline variance £m vs prior year % Revenue Operating Profit Electronic 6 5% Electronic 4 4 Revenue 252 0% Post trade 2% Operating profit 100 14% risk & info 2 Margin 40% +5 ppt 0 -2 -4 Post Trade Risk and Information Services -6 -6 Revenue 142 15% -8 Operating profit 69 13% Margin 49% - -10 (11%) -12 (13%) -14 The above table is from continuing operations and excludes amortisation and impairment of intangibles arising on consolidation and exceptional items. Underlying growth excludes the impact of foreign exchange. 8
Diversifying operating profit Diversifying operating profit Operating profit coming from non voice Comments broking businesses (2003 – 2010) broking businesses (2003 2010) • Almost 50% operating profit from 50% electronic broking, post trade risk and 45% 45% i f information ti 40% • TriOptima will increase this further 35% 30% 25% 20% 20% 15% 10% 5% 0% 2003 2004 2005 2006 2007 2008 2009 2010 The above table is from continuing operations and excludes amortisation and impairment of intangibles arising on consolidation and exceptional items. 9
Impact of investment strategy Impact of investment strategy Largest areas of New businesses £m investment Revenue 175 • Emerging markets – Operating profit * (11 ) Brazil • New Products – Impact on current year margin -3 ppts patents 2010 2009 Revenue from new business started or acquired in 10% 14% Total voice brokers** the last two years** Y Year Y Year to t March 09 2,221 31 Mar 10 31 Mar 09 Staff compensation / revenue** 59% 59% New Business 129 Revenue per voice broker** £533k £542k Other (66) March 10 2,284 IT Spend as a percentage of revenue ** p p g 11% % 11% % * The above table is from continuing operations and excludes amortisation and impairment of intangibles arising on consolidation and exceptional items. ** From continuing operations 10
Net operating expenses Net operating expenses Year to March 2010 (continuing operations) £m % point (4)% 4% 6% 0% (2)% (1)% 3% • Substantial movement 1,300 investments in new b businesses i 6 (23) • Cost savings (52) particularly focused p y 44 68 68 on IEB and US (12) voice broking 1,250 1,251 1,220 1,200 Mar-09 FX Performance Investments IT Cost Savings Re-Org in 09 Mar-10 commissions in new businesses The above table is from continuing operations and excludes amortisation and impairment of intangibles arising on consolidation and exceptional items. 11
Exchange rate sensitivities Exchange rate sensitivities Impact on 2009/10 Transactional (2) Translational (3) Total PBT (1) PBT (1) £m £m £m £m £m £m Profit increase 32 21 53 Estimated impact at forecast FX rates for Transactional Translational Total 2010/11 on PBT (1) (4) 2010/11 on PBT £m £m £m £m £m £m Dollar 10 4 14 Hedged 2010/11 Hedged 2010/11 79% @ $1.51/£ 79% @ $1.51/£ Euro (5) 17 (1) 16 Hedged 2010/11 84% @ €1.14/£ (1) PBT from continuing operations (2) Effective transactional rates for year to 31 March 2010 are $1.64/£ and €1.27/£ (3) 2009/10 yearly translational rates of $1.59/£ and €1.13/£ 12 (4) Assumes average rates of $1.55/£ and €1.15/£ for 10/11 (5) Includes impact from TriOptima based on profits to 31 December 2009
Earnings – total operations Earnings total operations Year to Year to 31 Mar 10 31 Mar 09 £m £m Profit before tax* 333 350 Effective tax rate 32% 33% Tax* (107) (117) Profit for the year* 226 233 Exceptional items (52) - Loss for the year from discontinued operations (18) (4) Amortisation and impairment of intangibles (40) (43) Profit for the year – total operations 116 186 Att ib t bl Attributable to - t Owners of the group 116 175 Minority interests - 11 Earnings per share – basic g p 18.0p p 27.6p p * From continuing operations and before amortisation and impairment of intangibles arising on consolidation and exceptional items. Adjusted weighted average number of shares 12 months ended Mar 10 - 643m (Mar 09 - 634m). 13 .
Earnings – continuing operations Earnings continuing operations Year to Year to 31 Mar 10 31 Mar 09 £m £m Profit for the year from continuing operations* 226 233 Earnings per share – Adjusted basic** 35.1p 34.7p Dividend per share 17.55p 17.05p * From continuing operations and before amortisation and impairment of intangibles arising on consolidation and exceptional items. ** From continuing operations 14 Adjusted weighted average number of shares 12 months ended Mar 10 - 643m (Mar 09 - 634m).
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