INVESTOR PRESENTATION NOVEMBER 2017
EXECUTIVE SUMMARY UNIQUE FRANCHISE, SIGNIFICANT OPPORTUNITIES, DEFINED STRATEGY AND GOALS Mission Strategy We bring together ingenuity, integrity, Leverage our market technology and and insights to deliver markets that information analytics expertise across accelerate economic progress and our global capital markets customer empower people to achieve their base. greatest ambitions. Results Targets $2.4 Billion LTM net revenues 1 Mid-single digit organic growth Across non-transactional segments 75% Recurring/subscription revenues 2 Over medium term (3-5 years) 50% EBITDA margin in 2016 • Market Technology: mid to high single digits 27% 5-Yr average annual TSR 3 • Information Services: mid single digits • Corporate Services: low single digits We target to deliver double digit total shareholder return (TSR) ¹Represents revenues less transaction-based expenses. 2 Represents LTM revenues from our Corporate Services, Information Services and Market Technology segments, plus our Trade Management Services business. 3 5-year annual total shareholder return through 10/31/17. 2 November 2017 Investor Presentation
NASDAQ’S RECURRING BUSINESS MIX FROM LEADING TECHNOLOGY, CONTENT AND CONNECTIVITY Recurring/Subscription Rev. ($B) and % of Total Net Rev. 75% 75% 75% 73% 73% 70% 68% 67% 66% 66% Corporate Services 1.8 1.7 1.6 1.5 27% 1.4 1.2 1.1 1.0 1.0 1.0 $2.4B 2008 2009 2010 2011 2012 2013 2014 2015 2016 LTM Trading LTM Net Revenue Revenue Organic Revenue Growth across Non-Trading Segments 25% 75% Information Services 6% 6% 24% Recurring & 4% 4% 4% Subscription 1 Trade Mgmt. Market Services Technology 2013 2014 2015 2016 LTM 12% 12% Medium-Term (3-5Yr) Organic Revenue Growth Outlook NON-TRADING MARKET INFORMATION CORPORATE SEGMENTS TECHNOLOGY SERVICES SERVICES (IS, MT, CS) Mid to High Low Single Mid-Single Digits Mid Single Digits Single Digits Digits ¹Represents LTM revenues from our Corporate Services, Information Services and Market Technology segments, plus our Trade Management Services business. 3 November 2017 Investor Presentation
EVOLUTION OF INDUSTRY CREATES OPPORTUNITY M a r k e t p l a c e E c o n o m y Increasingly commerce is being transacted via electronic marketplaces and financial institutions are seeking to digitize processes to gain efficiencies. D a t a A “trillion sensor” economy creates new real -time data E x p l o s i o n sources, new investment processes and need for new analytic capabilities. E v o l u t i o n o f I n v e s t m e n t Alternative investment and financing options are M a n a g e m e n t becoming more accessible, creating new opportunities and challenges. B a n k s E m b r a c e C h a n g e a s Banks will succeed by leveraging technology & scaled client network, and will manage costs by outsourcing T h e y E v o l v e non-differentiating capabilities and processes. 4 November 2017 Investor Presentation
NASDAQ’S STRATEGY & ORIENTATION LEVERAGE OUR MARKET TECHNOLOGY AND INFORMATION ANALYTICS EXPERTISE ACROSS OUR GLOBAL CAPITAL MARKETS CUSTOMER BASE Growth Engines Information Services Market Technology Providing Transparency & Software that powers Analytics to the investment markets including trading, community. post-trade, surveillance Impact Themes D a t a M a r k e t p l a c e E x p l o s i o n E c o n o m y E v o l u t i o n E v o l u t i o n I n v . M g m t . o f B a n k s Foundation Market Services & Corporate Services Global marketplace platform spanning: Equity Derivatives, Cash Equities and FICC asset classes Strong network effects between: Issuing Corporations, Investors, Traders, Banks/Brokers 5 November 2017 Investor Presentation
OPTIMIZE INVESTMENT CAPITAL AND RESOURCES MAINTAINING RESILIENT FOUNDATION WHILE INVESTING IN GREATEST OPPORTUNITIES Increase Investment In Our I n c r e a s e Sizable, defined opportunities Strongest Growth Assets R e s o u r c e s that leverage our foundation: F o r Market Technology Continue To Invest In New G r o w t h Information Services Opportunities NPM/NFX With High Potential S u s t a i n Sustain Investment Nasdaq’s leading marketplaces O u r in Core Assets and listings franchises: F o u n d a t i o n Focus On Market Services Corporate Services Operational Excellence De-emphasize resources O p t i m i z e Capital/resources can be and capital allocation S l o w e r released for reinvestment towards higher returns: G r o w t h Focus On Efficiency B u s i n e s s e s Business unit sub-segments 6 November 2017 Investor Presentation
12% OF 2016 53% OF 7% OF NET 2016 NON-TRADING 2016 EBITDA REVENUES ORGANIC GROWTH MARKET TECHNOLOGY Organic Growth Outlook: Mid-to-High Single Digits LEADING TECHNOLOGY PROVIDER LEVERAGING MARKET CORE Investing In • Nasdaq Financial Framework (NFF) Market Opportunity • SMARTS product and customer expansion MARKET PUBLIC & MARKETS INFRA-STRUCTURE SELL-SIDE BUY-SIDE PRIVATE • Deeper surveillance and behavioral EVERYWHERE OPERATORS COMPANIES capabilities through Sybenetix Expanding into Multiple Customer Segments Growth Opportunities Service Delivery Model • Moving from deployed software to a Add New Exchange SMARTS Trade Non-Financial Launching Clients and Expand Surveillance & Market Bwise GRC Platform-as-a-Service over time as SMARTS Services to Existing Reg Tech Transaction Growth cloud capabilities and market Buy-side Exchanges Growth Applications acceptance mature Leverage Host Single- Non-Financial Mandates with Sybenetix Dealer Trading Surveillance New Regulators Behavioral Platforms Opportunities Analytics 7 November 2017 Investor Presentation
24% OF 2016 NET 34% OF 2016 REVENUES EBITDA INFORMATION SERVICES Organic Growth Outlook: Mid-Single Digits EXPANDING OUR VALUE PROPOSITION GROWTH DRIVERS Analytics Hub Analytics Hub Investment Data Proprietary/3 rd -party data sets with powerful analytics Products • Expect to expand number of products on platform from single digits at launch to dozens by first year, broadening appeal Index Licensing • Growth driven by addition of customers Core Market Investment Data Products Data Information clearinghouse for the institutional buy-side • Investment Managers need better measurement and transparency to win mandates from asset owners • Geographic and private-asset expansion opportunities TARGET MARKETS Index Licensing Sell-side, Licensing proprietary benchmark and smart-beta indices Investment Management, • Benefits from passive and smart-beta secular flows Retail • Opportunity to increase share from higher contribution Investment Management of smart-beta segment, robust product creation pipeline ( Passive/Smart Beta ETP Sponsors ) Core Market Data Investment Management Information used to navigate our leading marketplaces ( Asset managers, asset owners, consultants ) • Continue line extension • Geographic expansion of core trading data distribution Investment Management ( Investment/trading • Periodic pricing adjustments strategies ) 8 November 2017 Investor Presentation
36% OF 2016 NET 43% OF 2016 REVENUES EBITDA MARKET SERVICES A RESILIENT BUSINESS WITH STRATEGIC ASSET CLASSES AND GEOGRAPHIC EXPANSION OPPORTUNITIES TACTICAL OPPORTUNITIES TO Equity BUILD ON STRATEGIC ASSETS Derivatives Leader in U.S. Equity Derivatives equity options and Nordic • Capitalize on multiple options exchange medallions equity-linked • Emphasis on the positioning of our exchanges across the derivatives various client segments Cash Market Cash Equities FICC Equities Services • Expand Auction-on-Demand service from Nordic centric U.S. treasury to a Pan-European solution U.S. and Nordic trading, plus • markets with Nasdaq’s leading Leverage Nasdaq Financial Framework to strengthen our trading/clearing leading share in marketplaces & platforms in Nordic Nasdaq-listed associated FI/Commodities securities connectivity FICC • Expand energy/commodity product suite Trade • Auctions and midpoint matching for liquidity events Management • Increase geographical coverage for bond listings Services Connectivity and other value- Trade Management Services added services • Expand point-of-presence locations globally • On premise cloud-based solutions RELENTLESS COMMITMENT TO TECHNOLOGY , MARKET QUALITY AND SERVICE 9 November 2017 Investor Presentation
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