Annual Results Annual Results Presentation 2011 2011 .............................................. London 18 May 2011 London, 18 May 2011
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Financial results a c a esu ts Solid growth in revenue, profit and EPS +13% +8% +4% Revenue Profit* EPS** * Pre-tax profit before acquisition and disposal costs and exceptional items ** Adjusted basic – Continuing operations 3
Iain Torrens Group Finance Director 4
Group profit before tax Group profit before tax Year to Year to Var vs. Underlying growth Headline results Mar 11 Mar 10 PY £m £m % 9% Revenue 8% Revenue 1,741 1,605 8% 7% 2% 6% Net Operating Expenses (1,366) (1,251) (9%) 5% 3% 4% 8% Operating Profit 375 354 6% 3% 2% 3% 3% Net finance charge (28) (26) (8%) 1% - Associates 3 7 (57%) Underlying FX TriOptima Headline Profit before Tax 350 335 4% Operating profit p g p 8% 6% 3% 4% 6% 2% - 10% (2%) (2%) (7%) Mar 11 Mar 10 (4%) (6%) Operating profit margin 22% 22% (8%) Underlying FX TriOptima Headline The above table is from continuing operations and excludes acquisition and disposal costs and exceptional items. Underlying growth excludes the impact of foreign exchange and recently acquired businesses 5
Voice broking Voice broking Year to Year to Year to Commentary New businesses Mar 11 Mar 10 Core Voice Mar 11 Variance £m vs. prior year £m £m EMEA Revenue 578 1% Operating Profit 114 (4%) M Margin i 20% 20% (1 (1ppt) t) Revenue 72 54 Operating Profit (21) (24) Americas Revenue 471 2% Impact on margin (2ppt) (2ppt) Operating Profit p g 83 0% Margin 18% - Asia Pacific Revenue 134 6% Revenue from voice businesses started O Operating Profit ti P fit (3) (3) (143%) (143%) or acquired in the last two years 4% 10% Margin (2%) (8ppt) Total Core Voice Revenue 1,183 2% Operating Profit 194 (7%) Margin 16% (2ppt) The above table is from continuing operations and excludes acquisition and disposal costs and exceptional items. Underlying growth excludes the impact of foreign exchange. 6 Headline variance and underlying growth has been measured against the restated numbers published at half year.
Electronic, post trade & information , p Year to Operating profit coming from non voice broking Headline Results Mar 11 Variance businesses (2003 – 2011) businesses (2003 2011) £m vs. prior year Electronic 60% Post trade Revenue Revenue 302 302 20% 20% Electronic 50% Operating Profit 123 23% Margin 41% 1ppt 21% 40% 19% Post Trade Risk & Information Services 13% 17% 30% Revenue 184 30% Operating Profit 79 14% 12% Margin 43% (6ppt) 20% 7% 8% 33% 33% 29% 29% 26% 24% 10% 19% 9% 15% 14% 3% - 2003 2004 2005 2006 2007 2008 2009 2010 2011 The above tables are from continuing operations and excludes acquisition and disposal costs and exceptional items. 7
Key performance indicators Key performance indicators Year to Year to Mar 11 Mar 10 Voice revenue per voice broker* £542k £533k IT spend as a percentage of revenue* 12% 11% Average daily electronic volumes $778bn $630bn Global market share estimate 23-25% 22-24% Average proportion of profits converted to cash** Average proportion of profits converted to cash** 107% 107% 118% 118% As at As at Mar 11 Mar 10 Total voice broker headcount 2,312 2,284 The above table is from continuing operations and excludes acquisition and disposal costs and exceptional items. * From continuing operations for twelve months to March 2011 vs twelve months to March 2010 ** 3 year average of profits and free cashflow, both from continuing operations and excluding acquisition and disposal costs and exceptional items 8
Net operating expenses Net operating expenses Year to 31 March 2011 (2)% (3)% (2)% % point (2)% movement 1,400 One off costs O ff t Other 17 1,350 11 Other new 22 businesses TriOptima 19 £m 1,300 23 1,366 23 1 250 1,250 1,251 1,200 Mar 10 FX New businesses IT Other costs Mar 11 The above table is from continuing operations and excludes acquisition and disposal costs and exceptional items. 9
Exchange rate sensitivities Exchange rate sensitivities Impact on 2010/11 Transactional (2) Translational (3) Total O Operating Profit (1) ti P fit (1) £m £m £m Profit increase 27 3 30 Estimated impact at current FX rates Transactional Translational Total for 2011/12 on Operating Profit ( 1 )(4) £m £m £m Dollar (8) (11) (19) Hedged 2011/12 89% @ $1.60/£ Euro (1) - (1) Hedged 2011/12 80% @ €1.16/£ (1) Operating Profit from continuing operations (2) Effective transactional rates for year to 31 March 2011 are $1.53/£ and €1.15/£ (3) 2010/11 yearly translational rates of $1.56/£ and €1.17/£ (4) Assumes average rates of $1.65/£ and €1.15/£ for 11/12 10
Earnings – total operations Earnings total operations Year to Year to Effective tax rate Mar 11 Mar 11 Mar 10 Mar 10 £m £m % Profit before Tax * 350 335 2009/10 ETR 32 2009/10 ETR 32 Effective tax rate 26% 32% Ongoing reduction (1) Tax (90) (107) One off settlement of Profit for the year * Profit for the year 260 260 228 228 PY matters (5) Exceptional items (15) (52) Total 26 Loss for the year from discontinued operations 4 (18) Net exceptional items Net exceptional items*** Amortisation and impairment of intangibles (62) (42) £m Profit for the year - total operations 187 116 Write down of assets (15) Write down of assets (15) Earnings per share - basic 28.7p 18.0p Excess provision release - Earnings per share - adjusted basic** 39.9p 35.4p Discontinued business 4 Dividend per share Dividend per share 19.95p 19 95p 17.55p 17 55p Total (11) T t l (11) * From continuing operations and before acquisition and disposal costs and exceptional items. ** From continuing operations 11 *** Post tax Adjusted weighted average number of shares year ended Mar 11 – 652m (Mar 10 - 643m).
Movement in free cash flow Movement in free cash flow Year to Year to Profits* vs. free Mar 11 Mar 10 Cash from continuing operations g p cash flow £m £m Profit pre amortisation 260 228 400 Ongoing free cash flow 210 264 Cash > Profit Cash > Profit (50) (50) 36 36 3 year average of profits converted to cash* 107% 118% 375 38 £m Year to Year to Year to Year to £ 8 Mar 10 Mar 11 24 350 21 £m 390 Calculation of free cash flow £m 363 Cash from ongoing operations C h f i ti 363 363 390 390 325 Interest and tax (86) (69) Cash flow from ongoing operating activities 277 321 Capital expenditure (69) (66) 300 300 Dividends from associates and investments 2 9 Mar 10 Net impact of Change in FX on Other Mar 11 initially restricted working Ongoing free cash flow 210 264 unsettled funds capital items Discontinued and exceptionals (21) (46) Free cash flow Free cash flow 189 189 218 218 * Profits after tax from continuing operations excluding acquisition and disposal costs and exceptional items. 12
Net debt Net debt Movement in net borrowings Cash and Debt As at 31 March 2011 £m +£68m Cash C h 404 404 (161) (229) Gross debt (565) Net debt (161) (90) £m Restricted funds £m 189 (29) (2) 31 March 2011 73 31 March 2010 81 (148) Free cash Dividends Acquisitions Other Mar 11 Gross debt : EBITDA** 31 March 2011 1.3x 31 March 2010 1.6x * Net debt for 2010 is represented after adjusting for restricted funds 13 ** From continuing operations
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