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Fourth quarter and Full Year 2014
Financial Results
February 11th 2015
2
Important notice
Forward-looking statements
This presentation contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and
Section 21E of the Securities Exchange Act of 1934. All statements, other than statements of historical facts, included in this
presentation that address activities, events or developments that Markit Ltd. (“Markit” or the “Company”) expects, believes or
anticipates will or may occur in the future are forward-looking statements. Without limiting the generality of the foregoing, forward-
looking statements contained in this presentation may include the expectations of management regarding plans, strategies,
objectives and anticipated financial and operating results of the Company. Markit’s estimates and forward-looking statements are
mainly based on its current expectations and estimates of future events and trends, which affect or may affect its businesses and
operations. Although Markit believes that these estimates and forward-looking statements are based upon reasonable
assumptions, they are subject to several risks and uncertainties and are made in light of information currently available to Markit.
When used in this presentation, the words “anticipate,” “believe,” “intend,” “expect,” “plan,” “will” or other similar words are
intended to identify forward-looking statements. Such statements are subject to a number of assumptions, risks and uncertainties,
many of which are beyond the control of Markit, which may cause actual results to differ materially from those implied or
expressed by the forward-looking statements. Further information on such assumptions, risks and uncertainties is available in
Markit’s filings with the United States Securities and Exchange Commission (“SEC”). Markit’s SEC filings are available at
www.sec.gov or on the investor relations section of its website, www.markit.com. Markit undertakes no obligation and does not
intend to update these forward-looking statements to reflect events or circumstances occurring after the date of this presentation.
You are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date of this press
release. All forward-looking statements are qualified in their entirety by this cautionary statement.
Non-IFRS financial measures
This presentation also includes measures defined by the SEC as non-IFRS financial measures. Markit believes that these non-
IFRS measures can provide useful supplemental information to securities analysts, investors and other interested parties
regarding financial and business trends relating to its financial condition and results of operations when read in conjunction with
the company’s reported results. Definitions and reconciliations of these non-IFRS measures to most directly comparable IFRS
financial measures are available in the Appendix of this presentation and in Markit’s earnings release dated February 11, 2015.
Copyright Š2015, Markit Group Limited. All rights reserved and all intellectual property rights are retained by Markit.
3
Agenda
Full year 2014 overview
Lance Uggla, CEO
Fourth quarter and full year 2014 financial results
Jeff Gooch, CFO
Appendix
4
Full year 2014 overview
Lance Uggla
5
2014 results
2014 overview
─ Successful IPO listing on Nasdaq
─ Strong full year 2014 financial performance
─ Revenue increased 12.4% to a record of $1.065 billion
─ Constant currency revenue growth +10.9% (7.8% organic, 3.1% acquired)
─ Driven by revenue growth in all three business segments:
 Information +5.9%, organic growth +4.4%
 Processing +7.4%, organic growth +5.1%
 Solutions +31.7%, organic growth +17.8%, acquired growth +13.1%
─ Adjusted EBITDA grew 15.9%; Adjusted EBITDA margin of 46%
─ Adjusted Earnings up 12.3% and Adjusted EPS diluted up 7.1%
─ Continued innovation through product enhancements and new
product launches to address the needs of our customers
─ Completed two acquisitions – thinkFolio and CTI
─ Well positioned to deliver on our longterm financial objectives
6
Q4 and FY 2014 financial results
Jeff Gooch
7
Q4 and FY 2014 financial results
Summary financial results
($ million)
Q4 2014 Q4 2013 YoY% FY 2014 FY 2013 YoY%
Revenue 271.4 243.8 11.3% 1,065.1 947.9 12.4%
Constant currency growth - - 12.4% - - 10.9%
Adjusted EBITDA(1) 124.7 108.4 15.0% 488.2 421.3 15.9%
Adjusted EBITDA margin (2) 46.3% 44.5% N/A 46.0% 45.6% N/A
Adjusted Earnings (3) 69.1 65.4 5.7% 279.0 248.4 12.3%
Adjusted EPS diluted (4) $0.37 $0.37 - $1.51 $1.41 7.1%
Weighted average number of shares
used to compute earnings per share,
diluted
187.3 176.7 6.0% 184.5 175.6 5.1%
1. Adjusted EBITDA is defined as profit for the period from continuing operations before income taxes, net finance costs, depreciation and amortisation on fixed assets and
intangible assets (including acquisition related intangible assets), acquisition related items, exceptional items, share based compensation and related items, net other
gains or losses, including Adjusted EBITDA attributable to joint ventures and excluding Adjusted EBITDA attributable to non-controlling interests.
2. Adjusted EBITDA margin is defined as Adjusted EBITDA divided by revenue, excluding revenue attributable to non-controlling interests.
3. Adjusted Earnings is defined as profit for the period from continuing operations before amortisation of acquired intangibles, acquisition related items, exceptional items,
share based compensation, net other gains or losses and unwind of discount, less the tax effect of these adjustments and excluding Adjusted Earnings attributable to
non-controlling interests.
4. Adjusted EPS diluted is defined as Adjusted Earnings divided by the weighted average number of shares used to compute earnings per share diluted.
8
Q4 and FY 2014 financial results
Revenue growth
($ million)
$243.8
$21.6
$8.6 $(2.6) $271.4
$200
$210
$220
$230
$240
$250
$260
$270
$280
Q4 2013
revenue
Organic
growth
Acquired
growth
FX /
Currency
impact
Q4 2014
revenue
+8.9%
+3.5%
(1.1)%
+11.3%
$947.9
$73.4
$29.2
$14.6
$700
$750
$800
$850
$900
$950
$1,000
$1,050
$1,100
FY 2013
revenue
Organic
growth
Acquired
growth
FX /
Currency
impact
FY 2014
revenue
+7.8%
+3.1%
+1.5%
+12.4%
Q4 2014 vs. Q4 2013 FY 2014 vs. FY 2013
$1,065.1
9
Q4 and FY 2014 financial results
Revenue mix – Q4 2014
$ million / % Q4 2014 % Q4 2013 % Q4 YoY FY 2014 % FY 2013 % FY YoY
Recurring fixed $146.0 53.8% $124.3 51.0% $21.7 $559.2 52.5% $479.6 50.6% $79.6
Recurring variable $111.0 40.9% $108.3 44.4% $2.7 $450.5 42.3% $429.4 45.3% $21.1
Non-recurring $14.4 5.3% $11.2 4.6% $3.2 $55.4 5.2% $38.9 4.1% $16.5
Total Revenue $271.4 $243.8 $27.6 $1,065.1 $947.9 $117.2
53.8%
40.9%
5.3%
Recurring fixed
Recurring variable
Non-recurring
Q4 2014: $271.4
million
Q4 highlights:
─ Recurring fixed revenue
increased due primarily to
new business wins
─ Recurring variable revenue
decreased as a percentage
of total revenue
─ Non-recurring revenue
increased due to new
business wins in Solutions
10
Q4 and FY 2014 financial results
Operating expenses
($ million)
Q4 2014 Q4 2013 YoY% FY 2014 FY 2013 YoY%
Personnel
costs
(85.3) (75.8) 12.5% (350.4) (307.3) 14.0%
Non
personnel
costs
(54.0) (59.6) (9.4)% (218.8) (207.8) 5.3%
Total
operating
expenses
(139.3) (135.4) 2.9% (569.2) (515.1) 10.5%
Q4 highlights:
─ Personnel costs increased
due to acquisitions and new
hires
─ Employee growth was
predominantly in low cost
locations
─ Non personnel costs
decreased following closure
of Credit Centre and other
items
11
Q4 and FY 2014 financial results
Information
($ million)
116.9
123.2
56.4
64.3
0
20
40
60
80
100
120
140
Q4 2013 Q4 2014
Revenue Adjusted EBITDA
+5.4%
Q4 2014 Q4 2013 YoY% FY 2014 FY 2013 YoY%
Revenue 123.2 116.9 5.4% 486.5 459.6 5.9%
Organic growth - - 6.8% - - 4.4%
Adjusted EBITDA 64.3 56.4 14.0% 239.2 217.2 10.1%
Adjusted
EBITDA margin
52.2% 48.2% - 49.2% 47.3% -
Q4 highlights:
─ Growth in Pricing and
Reference Data, primarily in
Fixed Income
─ Strong operating leverage
leading to increased EBITDA
margins
─ Customer retention and
renewals remain strong
12
Q4 and FY 2014 financial results
Processing
($ million)
Q4 highlights:
─ Derivatives processing revenue
benefitted from higher volumes
─ Limited revenue impact from
SEF regulations
─ Cost savings are starting be to
delivered
65.0
68.5
29.8
36.5
0
10
20
30
40
50
60
70
80
Q4 2013 Q4 2014
Revenue Adjusted EBITDA
+5.4%
Q4 2014 Q4 2013 YoY% FY 2014 FY 2013 YoY%
Revenue 68.5 65.0 5.4% 284.9 265.3 7.4%
Organic growth - - 6.2% - - 5.1%
Adjusted EBITDA 36.5 29.8 22.5% 156.6 138.1 13.4%
Adjusted
EBITDA margin
53.3% 45.8% - 55.0% 52.1% -
13
Q4 and FY 2014 financial results
Solutions
($ million)
61.9
79.7
22.2 24.3
0
10
20
30
40
50
60
70
80
90
Q4 2013 Q4 2014
Revenue Adjusted EBITDA
+28.8%
Q4 2014 Q4 2013 YoY% FY 2014 FY 2013 YoY%
Revenue 79.7 61.9 28.8% 293.7 223.0 31.7%
Organic growth - - 15.7% - - 17.8%
Acquisition related - - 13.9% - - 13.1%
Adjusted EBITDA 24.3 22.2 9.5% 93.1 77.5 20.1%
Adjusted EBITDA
margin
30.5% 35.9% - 31.7% 34.8% -
Q4 highlights:
─ Double digit organic revenue
growth driven by new business
wins across both Managed
Services and Enterprise Software
─ Continued momentum in KYC
across both buy and sell side
─ Margin decrease reflects
continued investment in new
initiatives
14
Q4 and FY 2014 financial results
Exceptional items
($ million)
Q4 2014 Q4 2013 FY 2014 FY 2013
Legal advisory costs (1.6) (2.5) (5.6) (6.3)
Impairments (31.5) (40.8) (39.8) (53.5)
Profit on sale of available-for-sale financial
asset
- - - 4.2
IPO preparation and execution costs - - (12.1) -
Accelerated share based compensation
charges
- - (7.3) -
Recognition of liability for social security
costs on option exercise
- - (20.1) -
Indirect taxes - (5.0) - (5.0)
Total exceptional items (33.1) (48.3) (84.9) (60.6)
15
Q4 and FY 2014 financial results
Net debt / leverage
($ million)
December
31st 2014
December
31st 2013
Bank borrowings 224.5 268.0
Share buyback 211.1 306.6
Total borrowings 435.6 574.6
Cash and cash equivalents (117.7) (75.3)
Net debt 317.9 499.3
Adjusted EBITDA 488.2 421.3
Leverage
(Net debt/ Adjusted EBITDA)
0.65x 1.19x
Highlights:
─ Operating cash flow was $369.9
million for the full year 2014, up
8.9% year on year
─ Capital expenditure full year 2014
was $124.9 million, down 4.3% or
$5.6 million year on year
─ Net debt down 36.3% or $181.4
million
16
Appendix
17
Q4 and FY 2014 financial results
Shares outstanding
Summary
─ Average share price is a key driver of the
dilution calculation, an indicative estimate of
the impact of share price fluctuations on
diluted share count is shown in the table
─ Weighted average number of shares, diluted
is calculated in accordance with IFRS
─ The majority of options priced at below
$26.70 vested on IPO
─ Options priced at $26.70 largely vest in
tranches over a 5 year period from IPO date
or January 2014
─ Option exercises will generate substantial
cash inflows as well as cash tax benefits
(million except share price)
2014 2013
Number of shares outstanding at the reporting date 182.5 176.8
Weighted average number of shares, basic 180.6 175.4
Option dilution 5.7 0.7
Restricted shares dilution 1.0 0.6
Weighted average number of shares, diluted 187.3 176.7
Share price used for Q414 dilution calculation $23.97 -
Illustrative average
share price
Illustrative diluted average
number of shares (million)
$23 186.4
$27 190.3
$30 195.8
Exercise price Outstanding (million) Unvested (million)
< $15.00 4.7 –
$15.00- $19.99 5.8 0.7
$20.00- $26.69 22.0 6.3
> $26.69 33.7 33.0
Total 66.2 40.0
Three months ended December 31st – Reported
Illustrative weighted average diluted number of shares
three months ended December 31st 2014
Total outstanding options at December 31st 2014
18
Sub-segment revenue summary
Sub-segment revenue – 3 year summary
($ million)
Segments FY 2012 FY 2013 FY 2014
CAGR %
FY2012 – 2014
Pricing and Reference Data 159.0 182.8 199.8 12.1%
Indices 80.3 86.6 91.5 6.7%
Valuation and Trading Services 192.0 190.2 195.2 0.8%
Information 431.3 459.6 486.5 6.2%
Processing 238.8 265.3 284.9 9.2%
Managed Services 108.3 131.6 167.6 24.4%
Enterprise Software 82.2 91.4 126.1 23.9%
Solutions 190.5 223.0 293.7 24.2%
Group 860.6 947.9 1,065.1 11.2%
Note: We reorganised certain products within our Information segment between the Pricing and Reference Data, Indices and Valuation and Trading Services sub-segments in 2014. For
comparability purposes, all prior year figures above have been presented to reflect this change.
19
5 year historic financial performance
Note: Financials presented under IFRS accounting guidelines. Adjusted EBITDA, Adjusted Earnings, Adjusted earnings per share, diluted and Adjusted EBITDA margin are non-IFRS financial measures.
Please see Appendix for definitions of these measures and a reconciliation of non-IFRS financial measures to IFRS financial measures.
5 year historic financial performance
($ million)
668.4
762.5
860.6
947.9
1,065.1
261.0
305.0
358.2
421.3
488.2
144.9
184.8
218.4
248.4
279.0
46.2% 45.8%
47.0%
45.6%
46.0%
25%
30%
35%
40%
45%
50%
0
200
400
600
800
1,000
1,200
1,400
2010 2011 2012 2013 2014
Revenue Adjusted EBITDA Adjusted Earnings Adjusted EBITDA margin
20
Reconciliation
Reconciliation to Adjusted EBITDA
($ million)
FY 2010 FY 2011 FY 2012 FY 2013 FY 2014 Q4 2013 Q4 2014
Profit for the period 151.2 156.2 153.1 147.0 164.1 2.9 15.7
Income tax expense 43.8 50.6 42.7 63.7 56.5 11.6 19.7
Finance costs – net 18.2 22.9 28.9 19.4 16.9 4.4 4.1
Depreciation and amortisation - other 48.2 62.7 66.7 86.0 100.1 23.6 28.2
Amortisation – acquisition related 28.5 34.4 46.2 50.1 57.9 13.1 14.6
Acquisition related items (11.3) 4.8 0.9 (1.4) (12.4) (1.6) (1.4)
Exceptional items 30.9 11.6 40.3 60.6 84.9 48.3 33.1
Share based compensation and related items 14.9 11.7 16.2 8.1 16.0 2.2 9.2
Other losses / (gains) – net 0.1 4.6 11.6 (0.7) 6.0 3.9 3.0
Share of results from joint venture not attributable
to Adjusted EBITDA
- - - - (1.1) - (1.1)
Adjusted EBITDA attributable to non-controlling
interests
(63.5) (54.5) (48.4) (11.5) (0.7) - (0.4)
Adjusted EBITDA 261.0 305.0 358.2 421.3 488.2 108.4 124.7
21
Reconciliation
Reconciliation to Adjusted Earnings
($ million)
FY 2010 FY 2011 FY 2012 FY 2013 FY 2014 Q4 2013 Q4 2014
Profit for the period 151.2 156.2 153.1 147.0 164.1 2.9 15.7
Amortisation – acquisition related 28.5 34.4 46.2 50.1 57.9 13.1 14.6
Acquisition related items (11.3) 4.8 0.9 (1.4) (12.4) (1.6) (1.4)
Exceptional items 30.9 11.6 40.3 60.6 84.9 48.3 33.1
Share based compensation and related items 14.9 11.7 16.2 8.1 16.0 2.2 9.2
Other losses / (gains) – net 0.1 4.6 11.6 (0.7) 6.0 3.9 3.0
Unwind of discount
(1)
3.4 8.9 9.3 12.4 10.5 2.6 2.7
Tax effect of above adjustments (14.6) (7.6) (24.1) (18.0) (47.4) (6.0) (6.9)
Adjusted Earnings attributable to non-controlling
interests
(58.2) (39.8) (35.1) (9.7) (0.6) - (0.9)
Adjusted Earnings 144.9 184.8 218.4 248.4 279.0 65.4 69.1
Weighted average number of shares for
computation of earnings per share, diluted
175,550,760 184,467,540 176,667,290 187,335,924
1. Unwind of discount represents the non-cash unwinding of discount, recorded through finance costs – net in the income statement, primarily in relation to our share buyback liability.
22
Q4 and FY 2014 financial results
Definitions
Revenue growth
We measure revenue growth in terms of organic revenue growth, acquisition related revenue growth, foreign currency impact on revenue growth and constant currency revenue growth. We
define these components as follows:
Organic – Revenue growth from continuing operations from factors other than acquisitions and foreign currency fluctuations. We derive organic revenue growth from the development of new
products and services, increased penetration of existing products and services to new and existing customers, price changes for our products and services and market driven factors such as
increased trading volumes or changes in customer assets under management.
Acquisition related – Revenue growth from acquired businesses through the end of the fiscal year following the fiscal year in which the acquisition was completed. This growth results from our
strategy of making targeted acquisitions that facilitate growth by complementing our existing products and services and addressing market opportunities.
Foreign currency – The impact on revenue growth resulting from the difference between current revenue at current exchange rates and current revenue at the corresponding prior period
exchange rates.
Constant currency – Total revenue growth, excluding the impact of exchange rate movements from the prior period to the current period. This is equal to the combination of organic and
acquisition related revenue growth, as described above.
Revenue by type
Revenue by type is how we classify the income recognised from the sale of our products and services into three groups as defined below:
Recurring fixed revenue – Revenue generated from contracts specifying a fixed fee for services delivered over the life of the contract. The fixed fee is typically paid annually, semiannually or
quarterly in advance. These contracts are typically subscription contracts where the revenue is recognised across the life of the contract. The initial term of these contracts can range from one to
five years and usually includes auto-renewal clauses.
Recurring variable revenue – Revenue derived from contracts that specify a fee for services which is typically not fixed. The variable fee is typically paid monthly in arrears. Recurring variable
revenue is based on, among other factors, the number of trades processed, assets under management or the number of positions we value. Many of these contracts do not have a maturity
date while the remainder have an initial term ranging from one to five years.
Non-recurring revenue – Revenue that relates to certain software license sales and the associated consulting revenue.
Other Non-IFRS Measures
Adjusted EBITDA is defined as profit for the period from continuing operations before income taxes, net finance costs, depreciation and amortisation on fixed assets and intangible assets
(including acquisition related intangible assets), acquisition related items, exceptional items, share based compensation and related items, net other gains or losses, including Adjusted EBITDA
attributable to joint ventures and excluding Adjusted EBITDA attributable to non-controlling interests.
Adjusted EBITDA margin is defined as Adjusted EBITDA divided by revenue, excluding revenue attributable to non-controlling interests.
LTM Adjusted EBITDA is defined as Adjusted EBITDA for the previous twelve month period from date reported.
Adjusted Earnings is defined as profit for the period from continuing operations before amortisation of acquired intangibles, acquisition related items, exceptional items, share based
compensation, net other gains or losses and unwind of discount, less the tax effect of these adjustments and excluding Adjusted Earnings attributable to non-controlling interests.
Adjusted EPS diluted is defined as Adjusted Earnings divided by the weighted average number of shares used to compute earnings per share, diluted.

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Q4 14 results presentation final

  • 1. Fourth quarter and Full Year 2014 Financial Results February 11th 2015
  • 2. 2 Important notice Forward-looking statements This presentation contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. All statements, other than statements of historical facts, included in this presentation that address activities, events or developments that Markit Ltd. (“Markit” or the “Company”) expects, believes or anticipates will or may occur in the future are forward-looking statements. Without limiting the generality of the foregoing, forward- looking statements contained in this presentation may include the expectations of management regarding plans, strategies, objectives and anticipated financial and operating results of the Company. Markit’s estimates and forward-looking statements are mainly based on its current expectations and estimates of future events and trends, which affect or may affect its businesses and operations. Although Markit believes that these estimates and forward-looking statements are based upon reasonable assumptions, they are subject to several risks and uncertainties and are made in light of information currently available to Markit. When used in this presentation, the words “anticipate,” “believe,” “intend,” “expect,” “plan,” “will” or other similar words are intended to identify forward-looking statements. Such statements are subject to a number of assumptions, risks and uncertainties, many of which are beyond the control of Markit, which may cause actual results to differ materially from those implied or expressed by the forward-looking statements. Further information on such assumptions, risks and uncertainties is available in Markit’s filings with the United States Securities and Exchange Commission (“SEC”). Markit’s SEC filings are available at www.sec.gov or on the investor relations section of its website, www.markit.com. Markit undertakes no obligation and does not intend to update these forward-looking statements to reflect events or circumstances occurring after the date of this presentation. You are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date of this press release. All forward-looking statements are qualified in their entirety by this cautionary statement. Non-IFRS financial measures This presentation also includes measures defined by the SEC as non-IFRS financial measures. Markit believes that these non- IFRS measures can provide useful supplemental information to securities analysts, investors and other interested parties regarding financial and business trends relating to its financial condition and results of operations when read in conjunction with the company’s reported results. Definitions and reconciliations of these non-IFRS measures to most directly comparable IFRS financial measures are available in the Appendix of this presentation and in Markit’s earnings release dated February 11, 2015. Copyright Š2015, Markit Group Limited. All rights reserved and all intellectual property rights are retained by Markit.
  • 3. 3 Agenda Full year 2014 overview Lance Uggla, CEO Fourth quarter and full year 2014 financial results Jeff Gooch, CFO Appendix
  • 4. 4 Full year 2014 overview Lance Uggla
  • 5. 5 2014 results 2014 overview ─ Successful IPO listing on Nasdaq ─ Strong full year 2014 financial performance ─ Revenue increased 12.4% to a record of $1.065 billion ─ Constant currency revenue growth +10.9% (7.8% organic, 3.1% acquired) ─ Driven by revenue growth in all three business segments:  Information +5.9%, organic growth +4.4%  Processing +7.4%, organic growth +5.1%  Solutions +31.7%, organic growth +17.8%, acquired growth +13.1% ─ Adjusted EBITDA grew 15.9%; Adjusted EBITDA margin of 46% ─ Adjusted Earnings up 12.3% and Adjusted EPS diluted up 7.1% ─ Continued innovation through product enhancements and new product launches to address the needs of our customers ─ Completed two acquisitions – thinkFolio and CTI ─ Well positioned to deliver on our longterm financial objectives
  • 6. 6 Q4 and FY 2014 financial results Jeff Gooch
  • 7. 7 Q4 and FY 2014 financial results Summary financial results ($ million) Q4 2014 Q4 2013 YoY% FY 2014 FY 2013 YoY% Revenue 271.4 243.8 11.3% 1,065.1 947.9 12.4% Constant currency growth - - 12.4% - - 10.9% Adjusted EBITDA(1) 124.7 108.4 15.0% 488.2 421.3 15.9% Adjusted EBITDA margin (2) 46.3% 44.5% N/A 46.0% 45.6% N/A Adjusted Earnings (3) 69.1 65.4 5.7% 279.0 248.4 12.3% Adjusted EPS diluted (4) $0.37 $0.37 - $1.51 $1.41 7.1% Weighted average number of shares used to compute earnings per share, diluted 187.3 176.7 6.0% 184.5 175.6 5.1% 1. Adjusted EBITDA is defined as profit for the period from continuing operations before income taxes, net finance costs, depreciation and amortisation on fixed assets and intangible assets (including acquisition related intangible assets), acquisition related items, exceptional items, share based compensation and related items, net other gains or losses, including Adjusted EBITDA attributable to joint ventures and excluding Adjusted EBITDA attributable to non-controlling interests. 2. Adjusted EBITDA margin is defined as Adjusted EBITDA divided by revenue, excluding revenue attributable to non-controlling interests. 3. Adjusted Earnings is defined as profit for the period from continuing operations before amortisation of acquired intangibles, acquisition related items, exceptional items, share based compensation, net other gains or losses and unwind of discount, less the tax effect of these adjustments and excluding Adjusted Earnings attributable to non-controlling interests. 4. Adjusted EPS diluted is defined as Adjusted Earnings divided by the weighted average number of shares used to compute earnings per share diluted.
  • 8. 8 Q4 and FY 2014 financial results Revenue growth ($ million) $243.8 $21.6 $8.6 $(2.6) $271.4 $200 $210 $220 $230 $240 $250 $260 $270 $280 Q4 2013 revenue Organic growth Acquired growth FX / Currency impact Q4 2014 revenue +8.9% +3.5% (1.1)% +11.3% $947.9 $73.4 $29.2 $14.6 $700 $750 $800 $850 $900 $950 $1,000 $1,050 $1,100 FY 2013 revenue Organic growth Acquired growth FX / Currency impact FY 2014 revenue +7.8% +3.1% +1.5% +12.4% Q4 2014 vs. Q4 2013 FY 2014 vs. FY 2013 $1,065.1
  • 9. 9 Q4 and FY 2014 financial results Revenue mix – Q4 2014 $ million / % Q4 2014 % Q4 2013 % Q4 YoY FY 2014 % FY 2013 % FY YoY Recurring fixed $146.0 53.8% $124.3 51.0% $21.7 $559.2 52.5% $479.6 50.6% $79.6 Recurring variable $111.0 40.9% $108.3 44.4% $2.7 $450.5 42.3% $429.4 45.3% $21.1 Non-recurring $14.4 5.3% $11.2 4.6% $3.2 $55.4 5.2% $38.9 4.1% $16.5 Total Revenue $271.4 $243.8 $27.6 $1,065.1 $947.9 $117.2 53.8% 40.9% 5.3% Recurring fixed Recurring variable Non-recurring Q4 2014: $271.4 million Q4 highlights: ─ Recurring fixed revenue increased due primarily to new business wins ─ Recurring variable revenue decreased as a percentage of total revenue ─ Non-recurring revenue increased due to new business wins in Solutions
  • 10. 10 Q4 and FY 2014 financial results Operating expenses ($ million) Q4 2014 Q4 2013 YoY% FY 2014 FY 2013 YoY% Personnel costs (85.3) (75.8) 12.5% (350.4) (307.3) 14.0% Non personnel costs (54.0) (59.6) (9.4)% (218.8) (207.8) 5.3% Total operating expenses (139.3) (135.4) 2.9% (569.2) (515.1) 10.5% Q4 highlights: ─ Personnel costs increased due to acquisitions and new hires ─ Employee growth was predominantly in low cost locations ─ Non personnel costs decreased following closure of Credit Centre and other items
  • 11. 11 Q4 and FY 2014 financial results Information ($ million) 116.9 123.2 56.4 64.3 0 20 40 60 80 100 120 140 Q4 2013 Q4 2014 Revenue Adjusted EBITDA +5.4% Q4 2014 Q4 2013 YoY% FY 2014 FY 2013 YoY% Revenue 123.2 116.9 5.4% 486.5 459.6 5.9% Organic growth - - 6.8% - - 4.4% Adjusted EBITDA 64.3 56.4 14.0% 239.2 217.2 10.1% Adjusted EBITDA margin 52.2% 48.2% - 49.2% 47.3% - Q4 highlights: ─ Growth in Pricing and Reference Data, primarily in Fixed Income ─ Strong operating leverage leading to increased EBITDA margins ─ Customer retention and renewals remain strong
  • 12. 12 Q4 and FY 2014 financial results Processing ($ million) Q4 highlights: ─ Derivatives processing revenue benefitted from higher volumes ─ Limited revenue impact from SEF regulations ─ Cost savings are starting be to delivered 65.0 68.5 29.8 36.5 0 10 20 30 40 50 60 70 80 Q4 2013 Q4 2014 Revenue Adjusted EBITDA +5.4% Q4 2014 Q4 2013 YoY% FY 2014 FY 2013 YoY% Revenue 68.5 65.0 5.4% 284.9 265.3 7.4% Organic growth - - 6.2% - - 5.1% Adjusted EBITDA 36.5 29.8 22.5% 156.6 138.1 13.4% Adjusted EBITDA margin 53.3% 45.8% - 55.0% 52.1% -
  • 13. 13 Q4 and FY 2014 financial results Solutions ($ million) 61.9 79.7 22.2 24.3 0 10 20 30 40 50 60 70 80 90 Q4 2013 Q4 2014 Revenue Adjusted EBITDA +28.8% Q4 2014 Q4 2013 YoY% FY 2014 FY 2013 YoY% Revenue 79.7 61.9 28.8% 293.7 223.0 31.7% Organic growth - - 15.7% - - 17.8% Acquisition related - - 13.9% - - 13.1% Adjusted EBITDA 24.3 22.2 9.5% 93.1 77.5 20.1% Adjusted EBITDA margin 30.5% 35.9% - 31.7% 34.8% - Q4 highlights: ─ Double digit organic revenue growth driven by new business wins across both Managed Services and Enterprise Software ─ Continued momentum in KYC across both buy and sell side ─ Margin decrease reflects continued investment in new initiatives
  • 14. 14 Q4 and FY 2014 financial results Exceptional items ($ million) Q4 2014 Q4 2013 FY 2014 FY 2013 Legal advisory costs (1.6) (2.5) (5.6) (6.3) Impairments (31.5) (40.8) (39.8) (53.5) Profit on sale of available-for-sale financial asset - - - 4.2 IPO preparation and execution costs - - (12.1) - Accelerated share based compensation charges - - (7.3) - Recognition of liability for social security costs on option exercise - - (20.1) - Indirect taxes - (5.0) - (5.0) Total exceptional items (33.1) (48.3) (84.9) (60.6)
  • 15. 15 Q4 and FY 2014 financial results Net debt / leverage ($ million) December 31st 2014 December 31st 2013 Bank borrowings 224.5 268.0 Share buyback 211.1 306.6 Total borrowings 435.6 574.6 Cash and cash equivalents (117.7) (75.3) Net debt 317.9 499.3 Adjusted EBITDA 488.2 421.3 Leverage (Net debt/ Adjusted EBITDA) 0.65x 1.19x Highlights: ─ Operating cash flow was $369.9 million for the full year 2014, up 8.9% year on year ─ Capital expenditure full year 2014 was $124.9 million, down 4.3% or $5.6 million year on year ─ Net debt down 36.3% or $181.4 million
  • 17. 17 Q4 and FY 2014 financial results Shares outstanding Summary ─ Average share price is a key driver of the dilution calculation, an indicative estimate of the impact of share price fluctuations on diluted share count is shown in the table ─ Weighted average number of shares, diluted is calculated in accordance with IFRS ─ The majority of options priced at below $26.70 vested on IPO ─ Options priced at $26.70 largely vest in tranches over a 5 year period from IPO date or January 2014 ─ Option exercises will generate substantial cash inflows as well as cash tax benefits (million except share price) 2014 2013 Number of shares outstanding at the reporting date 182.5 176.8 Weighted average number of shares, basic 180.6 175.4 Option dilution 5.7 0.7 Restricted shares dilution 1.0 0.6 Weighted average number of shares, diluted 187.3 176.7 Share price used for Q414 dilution calculation $23.97 - Illustrative average share price Illustrative diluted average number of shares (million) $23 186.4 $27 190.3 $30 195.8 Exercise price Outstanding (million) Unvested (million) < $15.00 4.7 – $15.00- $19.99 5.8 0.7 $20.00- $26.69 22.0 6.3 > $26.69 33.7 33.0 Total 66.2 40.0 Three months ended December 31st – Reported Illustrative weighted average diluted number of shares three months ended December 31st 2014 Total outstanding options at December 31st 2014
  • 18. 18 Sub-segment revenue summary Sub-segment revenue – 3 year summary ($ million) Segments FY 2012 FY 2013 FY 2014 CAGR % FY2012 – 2014 Pricing and Reference Data 159.0 182.8 199.8 12.1% Indices 80.3 86.6 91.5 6.7% Valuation and Trading Services 192.0 190.2 195.2 0.8% Information 431.3 459.6 486.5 6.2% Processing 238.8 265.3 284.9 9.2% Managed Services 108.3 131.6 167.6 24.4% Enterprise Software 82.2 91.4 126.1 23.9% Solutions 190.5 223.0 293.7 24.2% Group 860.6 947.9 1,065.1 11.2% Note: We reorganised certain products within our Information segment between the Pricing and Reference Data, Indices and Valuation and Trading Services sub-segments in 2014. For comparability purposes, all prior year figures above have been presented to reflect this change.
  • 19. 19 5 year historic financial performance Note: Financials presented under IFRS accounting guidelines. Adjusted EBITDA, Adjusted Earnings, Adjusted earnings per share, diluted and Adjusted EBITDA margin are non-IFRS financial measures. Please see Appendix for definitions of these measures and a reconciliation of non-IFRS financial measures to IFRS financial measures. 5 year historic financial performance ($ million) 668.4 762.5 860.6 947.9 1,065.1 261.0 305.0 358.2 421.3 488.2 144.9 184.8 218.4 248.4 279.0 46.2% 45.8% 47.0% 45.6% 46.0% 25% 30% 35% 40% 45% 50% 0 200 400 600 800 1,000 1,200 1,400 2010 2011 2012 2013 2014 Revenue Adjusted EBITDA Adjusted Earnings Adjusted EBITDA margin
  • 20. 20 Reconciliation Reconciliation to Adjusted EBITDA ($ million) FY 2010 FY 2011 FY 2012 FY 2013 FY 2014 Q4 2013 Q4 2014 Profit for the period 151.2 156.2 153.1 147.0 164.1 2.9 15.7 Income tax expense 43.8 50.6 42.7 63.7 56.5 11.6 19.7 Finance costs – net 18.2 22.9 28.9 19.4 16.9 4.4 4.1 Depreciation and amortisation - other 48.2 62.7 66.7 86.0 100.1 23.6 28.2 Amortisation – acquisition related 28.5 34.4 46.2 50.1 57.9 13.1 14.6 Acquisition related items (11.3) 4.8 0.9 (1.4) (12.4) (1.6) (1.4) Exceptional items 30.9 11.6 40.3 60.6 84.9 48.3 33.1 Share based compensation and related items 14.9 11.7 16.2 8.1 16.0 2.2 9.2 Other losses / (gains) – net 0.1 4.6 11.6 (0.7) 6.0 3.9 3.0 Share of results from joint venture not attributable to Adjusted EBITDA - - - - (1.1) - (1.1) Adjusted EBITDA attributable to non-controlling interests (63.5) (54.5) (48.4) (11.5) (0.7) - (0.4) Adjusted EBITDA 261.0 305.0 358.2 421.3 488.2 108.4 124.7
  • 21. 21 Reconciliation Reconciliation to Adjusted Earnings ($ million) FY 2010 FY 2011 FY 2012 FY 2013 FY 2014 Q4 2013 Q4 2014 Profit for the period 151.2 156.2 153.1 147.0 164.1 2.9 15.7 Amortisation – acquisition related 28.5 34.4 46.2 50.1 57.9 13.1 14.6 Acquisition related items (11.3) 4.8 0.9 (1.4) (12.4) (1.6) (1.4) Exceptional items 30.9 11.6 40.3 60.6 84.9 48.3 33.1 Share based compensation and related items 14.9 11.7 16.2 8.1 16.0 2.2 9.2 Other losses / (gains) – net 0.1 4.6 11.6 (0.7) 6.0 3.9 3.0 Unwind of discount (1) 3.4 8.9 9.3 12.4 10.5 2.6 2.7 Tax effect of above adjustments (14.6) (7.6) (24.1) (18.0) (47.4) (6.0) (6.9) Adjusted Earnings attributable to non-controlling interests (58.2) (39.8) (35.1) (9.7) (0.6) - (0.9) Adjusted Earnings 144.9 184.8 218.4 248.4 279.0 65.4 69.1 Weighted average number of shares for computation of earnings per share, diluted 175,550,760 184,467,540 176,667,290 187,335,924 1. Unwind of discount represents the non-cash unwinding of discount, recorded through finance costs – net in the income statement, primarily in relation to our share buyback liability.
  • 22. 22 Q4 and FY 2014 financial results Definitions Revenue growth We measure revenue growth in terms of organic revenue growth, acquisition related revenue growth, foreign currency impact on revenue growth and constant currency revenue growth. We define these components as follows: Organic – Revenue growth from continuing operations from factors other than acquisitions and foreign currency fluctuations. We derive organic revenue growth from the development of new products and services, increased penetration of existing products and services to new and existing customers, price changes for our products and services and market driven factors such as increased trading volumes or changes in customer assets under management. Acquisition related – Revenue growth from acquired businesses through the end of the fiscal year following the fiscal year in which the acquisition was completed. This growth results from our strategy of making targeted acquisitions that facilitate growth by complementing our existing products and services and addressing market opportunities. Foreign currency – The impact on revenue growth resulting from the difference between current revenue at current exchange rates and current revenue at the corresponding prior period exchange rates. Constant currency – Total revenue growth, excluding the impact of exchange rate movements from the prior period to the current period. This is equal to the combination of organic and acquisition related revenue growth, as described above. Revenue by type Revenue by type is how we classify the income recognised from the sale of our products and services into three groups as defined below: Recurring fixed revenue – Revenue generated from contracts specifying a fixed fee for services delivered over the life of the contract. The fixed fee is typically paid annually, semiannually or quarterly in advance. These contracts are typically subscription contracts where the revenue is recognised across the life of the contract. The initial term of these contracts can range from one to five years and usually includes auto-renewal clauses. Recurring variable revenue – Revenue derived from contracts that specify a fee for services which is typically not fixed. The variable fee is typically paid monthly in arrears. Recurring variable revenue is based on, among other factors, the number of trades processed, assets under management or the number of positions we value. Many of these contracts do not have a maturity date while the remainder have an initial term ranging from one to five years. Non-recurring revenue – Revenue that relates to certain software license sales and the associated consulting revenue. Other Non-IFRS Measures Adjusted EBITDA is defined as profit for the period from continuing operations before income taxes, net finance costs, depreciation and amortisation on fixed assets and intangible assets (including acquisition related intangible assets), acquisition related items, exceptional items, share based compensation and related items, net other gains or losses, including Adjusted EBITDA attributable to joint ventures and excluding Adjusted EBITDA attributable to non-controlling interests. Adjusted EBITDA margin is defined as Adjusted EBITDA divided by revenue, excluding revenue attributable to non-controlling interests. LTM Adjusted EBITDA is defined as Adjusted EBITDA for the previous twelve month period from date reported. Adjusted Earnings is defined as profit for the period from continuing operations before amortisation of acquired intangibles, acquisition related items, exceptional items, share based compensation, net other gains or losses and unwind of discount, less the tax effect of these adjustments and excluding Adjusted Earnings attributable to non-controlling interests. Adjusted EPS diluted is defined as Adjusted Earnings divided by the weighted average number of shares used to compute earnings per share, diluted.