Preliminary Results Presentation London Wednesday May 23 2007 - PowerPoint PPT Presentation

Preliminary Results Presentation London Wednesday May 23 2007

These materials do not constitute an offer to sell or the solicitation of an offer to purchase any security. These materials contain "forward-looking statements" as defined in the U.S. Private Securities Litigation Reform Act of 1995. These statements are based on current Company expectations and are subject to risks and uncertainties, which could cause actual results to differ materially. Such risks and uncertainties include, but are not limited to: fluctuations in interest rates and foreign currency exchange rates; market acceptance of new trading technologies; global and regional economic conditions and legislative, regulatory and political developments; and domestic and international competition in the Company's global markets. Additional information regarding these and other factors is available in the Company's reports available on request from the Company. This document may not be distributed where to do so would be unlawful. This document may not be distributed in the UK except to persons falling within article 19 of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2001.

Agenda 1 Financial Review 2 Business Review 3 Strategic Overview

Financial results Strong growth in revenue, profit and adjusted EPS +23% +20% +14% Revenue Profit* EPS (adjusted) * Pre-taxation profit before amortisation and impairment of intangibles arising on consolidation and exceptional items.

Profit before taxation Year to Headline variance to Underlying Growth 31 Mar 2007 prior year 20 £m £m % 16% 15 Revenue 1,106.3 187.1 20% 12% Net operating expenses (858.6) (135.7) (19%) 10 Operating profit 247.7 51.4 26% Net finance charge (2.1) (6.9) n/m 5 Associates 6.0 2.8 88% Profit before taxation 251.6 47.3 23% 0 Revenue Operating profit Mar 07 Mar 06 Margin 22% 21% The above table excludes amortisation and impairment of intangibles arising on consolidation and exceptional items. Underlying growth excludes the impact of foreign exchange and net acquisitions.

Movement in profit * £m 260 251.6 28.3 Net Acquisitions principally include: - 240 • Acquisition of United Fuels (October 05) (4.1) 32.0 • Korea (subsidiary since February 06) 220 • Acquisition of Reset (April 06) (8.9) 204.3 • Acquisition of EBS (June 06) 200 • Disposal of Exotix (Mar 07) 180 X s g t 6 7 s n F n 0 0 e o i y r r r i a e t l a i r M s t M e n i d u I o o n q & t t U c r r s A a a e e e t t Y Y a e i N * c t t i o f i f o s o r s r P A P * Pre-taxation profit before amortisation and impairment of intangibles arising on consolidation and exceptional items.

Europe Year to Headline Underlying Growth 31 Mar 2007 variance 50 £m vs 05/06 38% Revenue 502.4 27% 40 Net operating expenses 378.0 22% 30 Operating profit 124.4 46% 20% 20 10 Mar 07 Mar 06 Margin 25% 22% 0 Revenue Operating profit The above table excludes amortisation and impairment of intangibles arising on consolidation and exceptional items. Underlying growth excludes the impact of foreign exchange and net acquisitions.

Americas Year to Headline Underlying Growth 5 31 Mar 2007 variance £m vs 05/06 3% Revenue 458.3 7% Net operating expenses 354.1 9% 0 Operating profit 104.2 0% (2)% Mar 07 Mar 06 Margin 23% 24% -5 Revenue Operating Profit The above table excludes amortisation and impairment of intangibles arising on consolidation and exceptional items. Underlying growth excludes the impact of foreign exchange and net acquisitions.

Asia Pacific Year to Headline Underlying Growth 31 Mar 2007 variance 35 £m vs 05/06 30 Revenue 145.6 52% 24% 25 Net operating expenses 126.5 42% 20 Operating profit 19.1 169% 15 12% 10 Mar 07 Mar 06 5 Margin 13% 7% 0 Revenue Operating profit The above table excludes amortisation and impairment of intangibles arising on consolidation and exceptional items. Underlying growth excludes the impact of foreign exchange and net acquisitions.

Segment analysis Year to Revenue Variance against prior year 31 Mar 2007 £m Headline Underlying Voice division 867.4 9% 12% Electronic division 199.1 103% 7% Information division 39.8 54% 4% Headline margin Year to Year to 31 Mar 07 31 Mar 06 Voice division 20% 19% Electronic division 28% 30% The above tables exclude amortisation and impairment of intangibles arising on consolidation and exceptional items. Underlying growth excludes the impact of foreign exchange and net acquisitions.

Percentage ICAP operating profit 06/07 05/06 31% 22% 9% 7% 15% 22% 69% 78% Voice Electronic Information The above charts exclude amortisation and impairment of intangibles arising on consolidation and exceptional items.

Net operating expenses (3)% 11% 2% 1% 6% 2% 15.5 858.6 850 9.4 10.8 44.6 12 mths to 12 mths to 31 Mar 07 31 Mar 06 Broker 800 remuneration 47% 51% £m % of revenue 13.2 Variable % of 66.7 broker 60% 58% remuneration 750 (24.5) 722.9 700 19% 650 6 X T 7 S s r s s e 0 I 0 F B n u e h o s b r E r t a a i u O t w M M n i s e o i o n ) o u b s t t u q t m r s n m c e o e a 2 k 2 v B 1 o 1 t n e . r c n B I x E r e ( h t O The above table excludes amortisation and impairment of intangibles arising on consolidation and exceptional items.

EBS synergies Projected Annual Synergies - US$ millions $m $58m 60 Non-Technology Technology � Increased synergies – significant IT 50 contract cancellation � EBS staff now relocated to 2 Broadgate 40 � Integration of front office staff complete � Technology integration on track 30 20 10 0 Exceptional costs to achieve the synergies are forecast to be $48m, of 2006/7 2007/8 2008/9 Full impact which $21m will be recognised in 2006/07.

Earnings Year Year ended ended 31/03/07 31/03/06 £m £m Profit before taxation* 251.6 204.3 Amortisation and impairment of intangibles (42.6) (11.3) Exceptional items 4.8 - Taxation (88.1) (72.2) Profit for the period 125.7 120.8 Attributed to: Equity holders of parent 121.3 117.2 Minority interests 4.4 3.6 Earnings per share – basic 19.3p 19.6p Earnings per share – adjusted 24.6p 21.5p Full year dividend per share 12.3p 10.0p * Before amortisation and impairment of intangibles arising on consolidation and exceptional items. Note: At reported exchange rates.

Exchange rate sensitivities Impact on 2006/07 PBT Transactional Translational Total £m £m £m PBT reduction 2 7 9 Anticipated impact on 07/08 PBT Dollar Euro Total £m £m £m Translational 5 0 5 P&L rate 07/08 vs 06/07 1.97 vs 1.89 n/a Transactional 2 1 3 Effective rate 07/08 vs 06/07 1.85 vs 1.80 1.47 vs 1.46 * Assumes Spot $/£1.97 for balance of year.

Movement in free cash flow Cash from operations £m 350 Calculation of free cash flow 12 mths to 12 mths to 303.5 22.0 31 Mar 07 31 Mar 06 300 20.6 £m £m 64.6 260.9 250 Cash from operations 303.5* 150.3* Interest and taxation (86.2) (57.3) 6.3 39.7 200 Cash flow from operating activities 217.3 93.0 150.3 150 Capital Expenditure (31.1) (19.6) Dividends from associates 3.9 0.8 100 Free cash flow 190.1 74.2 50 0 06/07 net 06/07 06/07 Adjusted 06/07 cash 05/06 05/06 cash 05/06 cash impact Operating cash from inflow on initially outflow on of initially ops exceptionals increase in unsettled exceptionals unsettled cash trades trades * This figure includes the impact of initially unsettled matched transactions. Usually, in a matched principal transaction, both sides settle on the same day. Occasionally, for various reasons, only one side of the transaction may settle giving rise to a temporary cash position which reverses on the completion of the other side of the transaction, normally within 24 hours.

Mar-07 20 (22) FX/Other (69) Dividends Free cash 190 flow (290) Acquistions 211 Mar-06 Net cash 250 200 150 100 50 0 -50 -100 £m Borrowings Cash

CRD waiver Waiver granted • c.£300m of regulatory capital headroom • Can make acquisitions for debt without reducing headroom •

Financial Summary • Strong top and bottom line performance • Margins increasing • EBS integration providing more opportunities • Cashflow providing strong balance sheet

Agenda 1 Financial Review 2 Business Review 3 Strategic Overview

Powerful, positive business drivers… 1. Low global interest rates 2. Strong growth in derivatives volumes 3. Emerging Markets opening up 4. Technology impact 5. Regulatory change

…and a strong close to 2006/7 UK Credit Derivatives Volumes EU Carbon Emission Volumes Electronic Monthly Volumes Monthly Volumes Voice Jul Aug Sep Oct Nov Dec Jan Feb Mar Jul Aug Sep Oct Nov Dec Jan Feb Mar US Equity Derivatives Volumes US Treasury Volumes Monthly Volumes Monthly Volumes Jul Aug Sep Oct Nov Dec Jan Feb Mar Jul Aug Sep Oct Nov Dec Jan Feb Mar