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Investor Presentation
September 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
presentation. 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 Annual Report on Form 20-F.
Copyright ©2015, Markit Group Limited. All rights reserved and all intellectual property rights are retained by Markit.
3
Agenda
Introduction to Markit
Business segment overview
Q2 2015 results review
Financial overview
Appendix
Introduction to Markit
5
Investing in a growing, profitable and cash generative
leader in financial information services
— Leading global provider of financial information services with a scalable and
stable business model
— Trusted partner to a diverse global customer base and deeply embedded in their
systems and workflows
— Solid organic revenue growth, favorable margins, high recurring revenues, and
strong cash flow generation
— Large and rapidly growing addressable market due to increased regulation and
cost pressures in the financial industry
— Strong track record of innovation and well positioned to capitalize on future
growth opportunities
— Strong balance sheet that provides flexibility to accelerate growth through value
enhancing acquisitions
— Management team highly incentivized to execute
Introduction to Markit
6
Leading global provider of financial information services
Enhancing transparency | Reducing risk | Improving operational efficiency
Customers UsersAsset classes
Banks Corporates
Asset managers Insurance companies
Hedge funds Securities firms
PE / VC funds Clearing firms
Pension funds Software / data vendors
Equities FX
Credit Structured finance
Loans Commodities
Rates CDS
Bonds Environmental
Traders Valuation analysts
Risk managers Actuaries
IT professionals Research analysts
Investment professionals Portfolio managers
Introduction to Markit
1 Includes $495m in share repurchases conducted in August 2012 payable in quarterly installments through to May 2017. As of December 31, 2014, outstanding amount of $211.1m. Leverage ratio as
presented is calculated using Markit’s publicly reported definition of Adjusted EBITDA and Net Debt and not the definitions and methodology set forth in its revolving credit facility.
2003
founded
3,500+
institutional
customers
$1.1bn
2014 revenue
$488m
2014 Adjusted
EBITDA
0.65x
2014 Net debt /
Adjusted EBITDA
1
7
Trusted partner to a diverse and global customer base
Introduction to Markit
Other2
Global revenue base Key highlights
FY 2014 revenue: $1.1bn
Broad diverse customer base1
─ 3,500+ institutional customers
─ Renewal rate of approximately
90% for recurring fixed fee contracts
─ Largest customer accounts for
<5% of revenue
─ Well-recognized brand
Diversified global blue-chip customer base
1 Chart figures represent composition of customer base by number of customers.
2 "Other" includes consultants, accountants, NGOs, law firms, individuals, media/press, project developers, trade associations, self-regulatory organizations, and other.
US
50%
European
Union
39%
Other
11%
0%0%0%0%0%0%0%0%
Other 2
Institutional investors
Government and academic
Software / data vendors
Banks
Securities and clearing firms
Corporates and insurance
Hedge fund and private equity / Venture capital
Asset managers
0%0%0%0%0%0%0%0%
Other 2
Institutional investors
Government and academic
Software / data vendors
Banks
Securities and clearing firms
Corporates and insurance
Hedge fund and private equity / Venture capital
Asset managers
0%0%0%0%0%0%0%0%
Other 2
Institutional investors
Government and academic
Software / data vendors
Banks
Securities and clearing firms
Corporates and insurance
Hedge fund and private equity / Venture capital
Asset managers
0%0%0%0%0%0%0%0%
Other 2
Institutional investors
Government and academic
Software / data vendors
Banks
Securities and clearing firms
Corporates and insurance
Hedge fund and private equity / Venture capital
Asset managers
0%0%0%0%0%0%0%0%
Other 2
Institutional investors
Government and academic
Software / data vendors
Banks
Securities and clearing firms
Corporates and insurance
Hedge fund and private equity / Venture capital
Asset managers
0%0%0%0%0%0%0%0%
Other 2
Institutional investors
Government and academic
Software / data vendors
Banks
Securities and clearing firms
Corporates and insurance
Hedge fund and private equity / Venture capital
Asset managers0%0%0%0%0%0%0%0%
Other 2
Institutional investors
Government and academic
Software / data vendors
Banks
Securities and clearing firms
Corporates and insurance
Hedge fund and private equity /
Venture capital
Asset managers
19%
22%
12%
8%
10%
5%
4% 0%
20%
Asset managers
Hedge fund and private
equity / Venture capital
Corporates and insurance
Securities and
clearing firms
Banks
Software / data vendors
Government and academic
Institutional investors
Other 2
8
Leveraging our industry expertise and leading
technologies across three complementary divisions
Critical financial market information
sourced, created, enriched and
delivered
Trade processing solutions for OTC
derivatives, FX and syndicated loans
Advanced enterprise solutions tied to
Markit technology and software
Information
Processing
Solutions
Introduction to Markit
$294m
27.6%
$285m
26.8%
$486m
45.6%
Pricing & reference data
Indices
Valuation and trading
services
MarkitSERV
Loan settlement
Managed services
Enterprise software
2014 revenue
(m)
2014 adj.
EBITDA margin
Information $486 49.2%
Processing $285 55.0%
Solutions $294 31.7%
Markit $1,065 46.0%
9
Introduction to Markit
Top 10 products comprise ~80% of 2014 revenue
Managed
services
16%
Enterprise
software
12%
Processing
27%
Valuation
and trading
services
18%
Indices
8%
Pricing and
reference
data
19%
Pricing and reference data
─ Fixed income (CDS, Loans, Bonds)
─ Securities lending data
Indices
─ Fixed income indices (iBoxx, iTraxx)
Valuation and trading services
─ Totem
─ Portfolio valuations
OTC derivatives, loans, FX processing
─ OTC derivatives (IRS, CDS, Equity) and FX
─ Syndicated loan settlement
Enterprise software / Managed services
─ WSO software / WSO services
─ On Demand
─ Enterprise Data Management (EDM)
InformationProcessingSolutions
Total 2014 revenue
$1.1bn
10
Acquiring and building businesses that expand the
breadth and depth of our products and services
CDS pricing
CDS
reference
entity
identifiers
Dividend
forecasting
Index
management
Loan pricing
Daily equity &
commodities
data
ABS pricing
Credit event
auctions
OTC
derivatives
buy-side
valuations
Metrics
Research
aggregation
Instant
messaging
Desktop and
data feed
solutions
OTC
derivative
trade
processing
Portfolio
reconciliation
Structured
finance
cashflow
modelling
Loan CDS
indices
& pricing
Bespoke
indices
Document
management
Macro -
economic data
Portfolio
compression
Syndicated
loan portfolio
management
software
Trade
confirmations
Loan mapping
service
Environmental
registry
Evaluated
bond pricing
Credit trade
confirmation
Market share
analysis
Loan
settlement
Valuations
management
Entity
identifiers
Mobile
applications
Broker voting
SmartText
Online
advertising
manager
Liquidity
metrics
Loan
processing
Risk analytics
Quantitative
research
and trading
analytics
FX trade
processing
Commission
management
Loan index
Securities
finance
Enterprise
data
management
Credit factors
Instrument
reference data
ETF data &
analytics
ISDA
amendment
service
RED
acquired
Totem &
DaDD
acquired
LoanX
acquired
Chasen
acquired
Communicator
acquired
MarketXS
acquired
BOAT
acquired
CDS IndexCo
acquired
International
Index
Company
acquired
NTC
Economics
acquired
FCS acquired
SwapsWire
acquired
DTCC
DerivSERV
joint venture
created
TZ1 acquired
ClearPar
acquired
STORM
acquired
Wall Street on
Demand
acquired
QuIC acquired
Logicscope
acquired
QSG acquired
Data
Explorers
acquired
Cadis
acquired
26 94 140 313 470 1,081 1,439 2,041 2,414 2,849 3,278
CLO pricing
RMBS index
Tri-Party repo
data
Corporate
actions
Private equity
valuations
Loan analytics
Credit
checking
Tax document
management
Collaboration
services
50% of
MarkitSERV
acquired
GCA acquired
Credit indices
European
ABS
performance
monitoring
European
equity trade
reporting
platform
Quote
parsing
Operational
benchmarking
2004
2005
2006
2008
2009
2011
2012
2013
2007
2010
2003
Investment
management
solutions
Social media
research
signals
Flash Japan
manufacturing
PMI
Client
onboarding
Intraday
iNAVs
Tax
compliance
services
RMB bond
index
2014
thinkFolio
acquired
Majority stake
in CTI
acquired
3,616
Employees
Introduction to Markit
AcquisitionsProducts
Securities
processing
Loan trade
closing
FX broker
affirmations
FX option
confirmations
Prime
brokerage
software
Loan
custodian
services
FX pre-trade
processing
4,000+
2015
Agreed to
acquire
Halifax House
Price Index
Information
Mosaic
acquired
Agreed to
acquire
CoreOne
Technologies
DealHub
acquired
11
Accretive acquisitions to drive growth
Introduction to Markit
─ Positions Markit as a leading
provider of end to end
securities processing solutions
─ Strong synergies with Markit
Corporate Actions allows us to
support the full corporate
actions trade lifecycle
─ Helps customers improve
operational efficiency through
automation
─ Closed July 1st and will be
integrated into Solutions
division
─ A leading provider of index
management, data management,
regulatory reporting and prime
brokerage services to financial
institutions
─ Will benefit from our global sales
relationships and distribution
capabilities
─ Further strengthens Markit executive
team
─ To be integrated across Information
and Solutions divisions
─ Timing subject to customary closing
conditions
─ Provides trading solutions, post-trade
processing and transaction lifecycle
support for the $5 trillion FX market
─ Complementary to Markit’s offerings
and positions us to deliver a more
comprehensive set of solutions to our
combined set of customers
─ DealHub will benefit from the scale
provided by Markit’s global sales and
customer service capabilities and from
synergies with Markit’s multi asset
class trade processing services
─ Closed September 4th and will be
integrated into Processing division
12
Secular trends offer long term growth opportunities
Introduction to Markit
Markit is addressing the most critical areas in a large market that is undergoing
unprecedented change
Growing markets…
Focus on efficiency in financial services
Emerging markets and developing economy growth
Shifting investment styles
Changing regulatory landscape
Evolving technology and communication
Financial data
Order management systems
Data management
Risk management
Reporting and compliance
Indices
…driven by key industry trends
Business segment overview
14
Overview of Information division
— Provides pricing and reference data, indices and valuation
and trading services across multiple asset classes
and geographies
— Products used for independent valuations, research, trading,
and liquidity and risk assessments
— Serves over 2,700 customers including buyside firms, sellside
firms, exchanges, central banks, regulators, government
agencies, rating agencies, research organizations, accounting
firms, consultancies, technology and service providers, and
other companies using both direct and third-party
distribution channels
— Predominantly recurring fixed fee, subscription
based revenue
— Principal competitors are Bloomberg L.P., FactSet, Interactive
Data Corporation and Thomson Reuters Inc.
Pricing and
reference data
CDS, Loans, Bonds
Securities lending data
Indices
Cash Bond Indices (iBoxx)
Credit Derivative Indices (iTraxx)
Securitized Product Indices
Economic Indices (PMI)
Custom Indices
Valuation and trading services
Totem
Portfolio valuations
Investment services
Research and OTC services
Information division
113k
CDS
instruments
priced daily
2.3m
Bonds priced daily
$15.5tn
Lendable inventory in
securities finance
dataset
85% of global GDP
Covered by PMI
surveys
$81bn
AuM in ETFs
15
Information division financial performance
Information division
431.3
459.6
486.5
214.5 217.2
239.2
0
100
200
300
400
500
600
2012 2013 2014
Revenue Adjusted EBITDA
49.7% 47.3% 49.2%
40%
41%
19% Valuation and
trading services
Pricing and
reference data
Indices
Adjusted
EBITDA
margin
Revenue ($m)
Subsegments 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%
FY 2014 revenue: $486.5m
Subsegment revenue split Financial performance
($ million)
16
Overview of Processing division
— Offers trade processing solutions globally for OTC
derivatives, FX and syndicated loans
— Enables interdealer brokers, buyside and sellside firms
to confirm transactions rapidly and increase efficiency by
optimizing post-trade workflow
— Reduces operational risk, facilitates compliance with
global reporting regulations and supports clearing
connectivity to 16 OTC clearinghouses
— Predominantly recurring variable-fee revenue model
— Principal competitors are Bloomberg L.P., Intercontinental
Exchange, Inc. and Traiana, Inc.
MarkitServ Loan Settlement
Rates
Credit
Equities
FX
US Syndicated Loans
European Syndicated Loans
Processing division
2,000
customers
90,000
Derivative
transactions
processed daily
16
Clearinghouse
connections
14
Swap execution
facilities (“SEF”)
connections
238.8
265.3
284.9
124.5
138.1
156.6
0
50
100
150
200
250
300
2012 2013 2014
Revenue Adjusted EBITDA
Financial performance
($ million)
52.1% 52.1% 55.0%Adjusted
EBITDA
margin
17
Overview of Solutions division
Solutions division
8,000
Counterparty
Manager
buyside
subscribers
$264bn
WSO Services
AUM
2m
Corporate actions
securities
2.1bn
On Demand webpage
views served weekly
105
WSO Software
customers
Enterprise Software
Enterprise Data Management (EDM)
WSO Software
Analytics
thinkFolio
Information Mosaic
Managed Services
On Demand
WSO Services
Counterparty Manager
Corporate Actions
Tax Solutions
kyc.com
— Provides configurable enterprise software platforms and end-
to-end managed services; designs, builds and hosts mobile
and web applications for financial services customers
— Offerings capture, organize, process, display and analyze
information, manage risk and meet our customers’ regulatory
requirements
— Broad customer base including buyside and sellside firms,
custodians, private equity firms, wealth management firms
and retail brokerages
— Combination of recurring fixed and variable-fee revenue
model, with non-recurring revenue from software sales and
associated services
— Compete with firms such as Clarient Global LLC,
GoldenSource, IBM Algorithmics and Intralinks Holdings, Inc.
18
190.5
223.0
293.7
67.6 77.5
93.1
0
50
100
150
200
250
300
350
2012 2013 2014
Revenue Adjusted EBITDA
Solutions division financial performance
Solutions division
35.5% 34.8% 31.7%Adjusted
EBITDA
margin
57%
43%
Managed Services
Enterprise Software
Subsegment revenue split Financial performance
($ million)
Revenue ($m)
Subsegments FY 2012 FY 2013 FY 2014
CAGR %
FY2012 – 2014
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%
FY 2014 revenue: $293.7m
Q2 2015 results review
20
Q2 2015 results review
Q2 2015 financial highlights and recent developments
─ Revenue increased +6.7% on a constant currency basis with
organic revenue growth +5.1%
─ Information organic revenue growth +4.9%
─ Solutions organic revenue growth +13.2%, acquired growth +6.1%
─ Processing organic revenue decline (2.5)%
─ Continued profitability with strong margins maintained
─ Adjusted EBITDA margin of 44.6%
─ Adjusted Earnings of $68.4 million
─ Adjusted diluted EPS of $0.36
─ Announced acquisitions of Information Mosaic, CoreOne
Technologies and DealHub
─ Completed $650m secondary offering with $350m concurrent
share repurchase
21
Q2 2015 results review
Information
($ million)
122.2 123.3
58.6 59.3
0
20
40
60
80
100
120
140
Q2 2014 Q2 2015
Revenue Adjusted EBITDA
+0.9%
Q2 2015 Q2 2014 YoY% 6M 2015 6M 2014 YoY %
Revenue 123.3 122.2 0.9% 243.9 239.9 1.7%
Organic growth - - 4.9% - - 5.6%
Adjusted EBITDA 59.3 58.6 1.2% 117.5 113.8 3.3%
Adjusted EBITDA margin 48.1% 48.0% 0.1% 48.2% 47.4% 0.8%
Q2 overview:
─ Continued growth across
fixed income pricing and
reference data products
─ Double digit organic growth
in Indices
─ Maintained strong Adjusted
EBITDA margin
Organic
revenue
growth
+4.9%
22
Q2 2015 results review
Processing
($ million)
Q2 overview:
─ Impact from electronic trading
and clearing reduced revenue by
approximately $5m
─ Increased volumes in the rates
asset class were partially offset
by weaker performance in credit
─ Strong Adjusted EBITDA margin
72.1
67.5
38.9 36.2
0
10
20
30
40
50
60
70
80
Q2 2014 Q2 2015
Revenue Adjusted EBITDA
(6.4)%
Q2 2015 Q2 2014 YoY% 6M 2015 6M 2014 YoY %
Revenue 67.5 72.1 (6.4)% 134.9 144.2 (6.4)%
Organic growth - - (2.5%) - - (2.4)%
Adjusted EBITDA 36.2 38.9 (6.9)% 71.6 78.2 (8.4)%
Adjusted EBITDA margin 53.6% 54.0% (0.4)% 53.1% 54.2% (1.1)%
Organic
revenue
growth
(2.5)%
23
Q2 2015 results review
Solutions
($ million)
70.3
82.3
22.5 25.8
0
10
20
30
40
50
60
70
80
90
Q2 2014 Q2 2015
Revenue Adjusted EBITDA
+17.1%
Q2 2015 Q2 2014 YoY% 6M 2015 6M 2014 YoY%
Revenue 82.3 70.3 17.1% 165.8 139.9 18.5%
Organic growth - - 13.2% - - 13.8%
Acquisition related - - 6.1% - - 6.9%
Adjusted EBITDA 25.8 22.5 14.7% 53.6 44.7 19.9%
Adjusted EBITDA margin 31.3% 32.0% (0.7)% 32.3% 32.0% 0.3%
Q2 overview:
─ Strong organic revenue growth
─ Largest businesses – On
Demand, WSO, EDM – continue
to deliver strong growth
─ Corporate Actions continues to
grow strongly; acquisition of
Information Mosaic expected to
enhance future growth
─ Maintained Adjusted EBITDA
margin while continuing to invest
in new initiatives
Organic
revenue
growth
+13.2%
24
Management actions to deliver EPS1 growth
Management actions in 2015:
─ Share buyback of $350m as part of secondary
offering
─ Agreed to acquire Halifax House Price Index
─ Acquisition of Information Mosaic
─ Announced acquisition of CoreOneTechnologies2
─ Expected execution of remaining $150m share
buyback authorisation3
─ Expected terming out of debt structure3
~10%
2016 Adjusted Diluted
EPS
2016 Adjusted Diluted
EPS (inclusive of
management actions)
Additional Adjusted
Diluted EPS growth
expected from
management actions4
1. Adjusted diluted earnings per share
2. Subject to regulatory approval and closing conditions
3. Subject to conditions at the time
4. Net impact of all management action through 2015
Q2 2015 results review
25
Q2 2015 results review
Net debt / leverage
($ million)
June
30th, 2015
December
31st, 2014
Bank borrowings 371.9 224.5
Share buyback 170.2 211.1
Total borrowings 542.1 435.6
Cash and cash equivalents (119.5) (117.7)
Net debt 422.6 317.9
LTM Adjusted EBITDA(1) 493.1 488.2
Leverage (2)
H2 2015 management actions
0.86x 0.65x
─ Acquisition of Information Mosaic
─ Acquisition of CoreOne Technologies3
─ Expected $150 million share buyback4
Pro forma leverage
(Year end 2015)
~ 1.5x
6M overview:
─ Strong operating cash flow of
$197.9 million with significant
contribution from positive
working capital movements
─ Disciplined deployment of capital
expenditure of $63.6 million for
6M 2015
─ $394.1 million outflow on share
buybacks
─ Net debt increased $104.7
million
1. LTM Adjusted EBITDA is defined as Adjusted EBITDA for the previous twelve month period to date reported
2. Leverage is defined as net debt divided by LTM Adjusted EBITDA
3. Subject to regulatory approval and closing conditions
4. Subject to conditions at the time
26
187.3
191.7
190.8
~182
~180
~182
4.4
2.3
~2
~2
3.2
~11
~4
Q4 2014 Dilution Q1 2015 Dilution Share
repurchase
Q2 2015 Dilution Share
repurchase
Q3 2015 Dilution Share
repurchase
Q4 2015 FY 2016
Estimated in-quarter weighted average number of shares, diluted
Managing diluted shares outstanding
1
─ $350m share repurchase (~14m shares) completed June 10th, 2015
─ $150m remainder of authorised share buyback programme expected to be utilised by year end
─ Future buybacks expected to offset dilutive impact of annual compensation awards and option exercises
(million)
Expected
Dilution refers to dilutive impact of employee options and restricted stock.
Q2 and Q3 share repurchase totals refer to June 10, 2015 share repurchase of approximately $350m. Q4 share repurchase total is time-weighted and assumes utilisation of remaining
$150m authorisation in Q4 2015 (subject to conditions at the time) and share price of $26.30.
Q3 and Q4 dilution assumes average share price of $26.30 and option exercise of over 3m shares in each quarter.
2016 assumes a flat average share price, the exercise of 12.6m options and that all proceeds from exercise are utilised to repurchase shares.
Q2 2015 results review
27
Q2 2015 results review
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 with a strike price
below $26.70 vested on IPO
─ Options with a strike price 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) Q2 2015 Q2 2014
Number of shares outstanding at the reporting date 176.7 180.9
Weighted average number of shares, basic 183.1 177.3
Option dilution 6.5 4.8
Restricted shares dilution 1.2 0.7
Weighted average number of shares, diluted 190.8 182.8
Share price used for 2Q15 dilution calculation $26.30 $21.80
Illustrative average
share price
Illustrative diluted average
number of shares (million)
$23 188.0
$27 191.3
$30 196.5
Exercise price Outstanding (million) Unvested (million)
< $15.00 3.4 –
$15.00- $19.99 4.3 –
$20.00- $26.69 18.3 6.2
> $26.69 30.5 27.5
Total 56.5 33.7
Three months ended June 30th – Reported
Illustrative weighted average diluted number of shares three
months ended June 30th 2015
Total outstanding options at June 30th 2015
Financial overview
29
Track record of consistent financial performance
Financial overview
$261
$305
$358
$421
$488
2010 2011 2012 2013 2014
Adjusted EBITDA
Adjusted EBITDA margin
$145
$185
$218
$248
$279
2010 2011 2012 2013 2014
$668
$763
$861
$948
$1,065
2010 2011 2012 2013 2014
Note: Financials presented under IFRS accounting guidelines. Adjusted EBITDA, Adjusted Earnings and Adjusted EBITDA margin are non-IFRS financial measures.
Please see Appendix for definitions of these measures and a reconciliation of non-IFRS financial measures to IFRS financial measures.
─ Recurring revenue ~95%: products and services primarily offered through recurring fixed fee and
variable fee agreements
─ Strong organic growth: breadth of offerings and large, global customer base allow cross-selling of
products and services
─ High cash generation: high adjusted EBITDA margins and low capital requirements
Revenue ($m) Adjusted EBITDA ($m) and margin Adjusted Earnings ($m)
46.2% 45.8% 47.0% 45.6% 46.0%
30
Stable and diversified revenue streams
Financial overview
Revenue growth composition
2014 revenue by geography
Note: Acquisition related growth is defined as revenue growth from acquired businesses through the end of the fiscal year following the fiscal year in which the acquisition was completed.
Recurring fixed
renewal rate: ~90%
2014 revenue by type
US
50%
European
Union
39%
Other
11%
5.9% 6.1%
7.8%
7.0%
4.0%
4.6%
12.9%
10.1%
12.4%
2012 2013 2014
Organic growth Acquired growth & FX
Recurring fixed
53%
Recurring
variable
42%
Non-recurring
5%
31
Consistent delivery across divisions
Financial overview
48%
53% 50%
49%
36%
30% 32%
32%
16%
17%
18%
19%
$360
$407
$433
$489
2011 2012 2013 2014
49%
50% 48% 46%
30%
28%
28%
27%
21%
22%
24%
27%
$763
$861
$948
$1,065
2011 2012 2013 2014
Revenue ($m) Adjusted EBITDA1 ($m)
1 Adjusted EBITDA by business segment shown before any deduction of non-controlling interest. Please see Appendix for reconciliation of non-IFRS financial measures to IFRS financial measures.
‘11 – ‘14 CAGR
11.8%
22.0%
7.8%
9.2%
‘11 – ‘14 CAGR
10.8%
18.3%
6.7%
11.1%
Adjusted EBITDA Margin
Solutions 34.7% 35.5% 34.8% 31.7%
Processing 56.7% 52.1% 52.1% 55.0%
Information 46.7% 49.7% 47.3% 49.2%
Processing
Solutions
Information
11.8%
7.8%
9.2%
11.1%
6.7%
22.0%
18.3%
10.8%
32
Financial overview
Acquisitions
43%
Internal
investments
21%
Share
repurchases
36%
1. Internal investments 2. Acquisitions 3. Share repurchases
2010 – 2014 cumulative capital allocation
Total: $2,395m
$70 $75 $99 $131 $125
$242
$67
$381
$224
$129
$183
$52
$619
$495
$194
$1,099
$355
$254
2010 2011 2012 2013 2014
($mm)
Internal investments Acquisitions Share repurchases
─ Target leverage ratio of 1.5 – 2.0x
─ In order to maintain or adjust the capital structure, Markit returns capital to shareholders, issues new shares or sells
assets to reduce debt
1
1 Includes $495m in share repurchases conducted in August 2012 payable in quarterly installments through to May 2017.
2 Does not reflect $350m share repurchase completed June 10, 2015.
($m)
Balanced and flexible capital allocation framework
2
33
Committed to long-term financial objectives
─ Maintain 5-7% organic revenue growth
─ Double digit revenue growth with acquisitions
─ Maintain low to mid 40% Adjusted EBITDA margin
Disclaimer: These objectives are forward-looking, are subject to significant business, economic, regulatory and competitive uncertainties and contingencies, many of
which are beyond the control of the Company and its management, and are based upon assumptions with respect to future decisions, which are subject to
change. Actual results will vary and those variations may be material. Nothing in this presentation should be regarded as a representation by any person that these
objectives will be achieved and the Company undertakes no duty to update its objectives as circumstances change.
Financial overview
Appendix
35
Impact of electronic trading on Processing
~40%
~60%
Loans /
FX /
Equities
Rates /
Credit
~30%
~30%
Rates /
Credit not
impacted
Rates /
Credit
impacted
2014 Processing revenue by asset class
Rates / Credit revenue
Regulation will introduce trading rules over the next three
years that affect standardized OTC derivatives
─US: CFTC already enacted rules, SEC yet to issue final rules
─Europe: likely implementation late 2016 or 2017
─Asia: various jurisdictions in different stages of implementation
Loans / FX / Equities
─No anticipated material impact from new regulations
─Future growth will come from strong market volume increases in Loans and
increased market share and new solutions in FX and Equities
Rates / Credit
─Half of Rates / Credit revenue derives from less liquid products and markets which
are unlikely to be impacted by trading rules
─For electronic/cleared trades, simpler processing results in lower revenues per
ticket (up to ~80% lower ticket price)
─Electronic/cleared trading impact on market share and volumes not fully known
─Revenue impact estimated to be phased in over three years through 2017
Gross estimated annual revenue impact of $50–60m
─Pricing discounts implemented in Q2 2015 estimated $3–5m revenue impact per
quarter ($12–20m annual revenue impact)
Potential mitigants to financial impact:
─Further growth in Loans, Equities, and FX
─New services such as FX Options
─Trade volume increases due to electronic trading
─Managing costs to minimize the Adjusted EBITDA impact
FY 2014 revenue: $284.9m
Appendix: Processing division
36
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 recognized 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 recognized 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.
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 and related items, 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.
Appendix: Definitions
37
Appendix: reconciliation of non-IFRS financial measures to IFRS financial measures
Reconciliation to Adjusted EBITDA
($ million)
Q2 2015 Q2 2014 6M 2015 6M 2014 FY2014
LTM ended
June 2015
Profit for the period 44.5 29.4 99.0 69.2 164.1 193.9
Income tax expense 22.6 9.6 43.4 25.2 56.5 74.7
Finance costs – net 3.7 3.9 7.8 8.3 16.9 16.4
Depreciation and amortisation - other 26.4 23.5 51.3 46.8 100.1 104.6
Amortisation – acquisition related 14.4 14.1 28.8 28.3 57.9 58.4
Acquisition related items - 2.2 - 5.0 (12.4) (17.4)
Exceptional items 1.8 31.3 3.2 42.4 84.9 45.7
Share based compensation and related
items
8.7 3.1 18.6 6.1 16.0 28.5
Other (gains) / losses – net (0.2) 2.9 (8.1) 5.4 6.0 (7.5)
Share of results from joint venture not
attributable to Adjusted EBITDA
(0.6) -- (1.3) - (1.1) (2.4)
Adjusted EBITDA attributable to non-
controlling interests
(0.4) -- (1.1) - (0.7) (1.8)
Adjusted EBITDA 120.9 120.0 241.6 236.7 488.2 493.1
38
Reconciliation to Adjusted EBITDA
2010 2011 2012 2013 2014
Profit for the period 151.2 156.2 153.1 147.0 164.1
Income tax expense 43.8 50.6 42.7 63.7 56.5
Finance costs – net 18.2 22.9 28.9 19.4 16.9
Depreciation and amortisation - other 48.2 62.7 66.7 86.0 100.1
Amortisation – acquisition related 28.5 34.4 46.2 50.1 57.9
Acquisition related items (11.3) 4.8 0.9 (1.4) (12.4)
Exceptional items 30.9 11.6 40.3 60.6 84.9
Share based compensation and related items 14.9 11.7 16.2 8.1 16.0
Other losses / (gains) – net 0.1 4.6 11.6 (0.7) 6.0
Share of results from joint venture not
attributable to Adjusted EBITDA
0.0 0.0 0.0 0.0 (1.1)
Adjusted EBITDA attributable to non-controlling
interests
(63.5) (54.5) (48.4) (11.5) (0.7)
Adjusted EBITDA 261.0 305.0 358.2 421.3 488.2
($m)
Appendix: reconciliation of non-IFRS financial measures to IFRS financial measures
39
Appendix: reconciliation of non-IFRS financial measures to IFRS financial measures
Reconciliation to Adjusted Earnings
($ million)
Q2 2015 Q2 2014 6M 2015 6M 2014
Profit for the period 44.5 29.4 99.0 69.2
Amortisation – acquisition related 14.4 14.1 28.8 28.3
Acquisition related items - 2.2 - 5.0
Exceptional items 1.8 31.3 3.2 42.4
Share based compensation and related items 8.7 3.1 18.6 6.1
Other (gains) / losses – net (0.2) 2.9 (8.1) 5.4
Unwind of discount
(1)
2.3 2.4 4.8 4.9
Tax effect of above adjustments (2.7) (17.1) (8.3) (20.1)
Adjusted Earnings attributable to non-controlling interests (0.4) - (1.1) -
Adjusted Earnings 68.4 68.3 136.9 141.2
Weighted average number of shares for computation of
earnings per share, diluted
190,780,009 182,777,170 191,085,644 180,724,370
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.
40
Reconciliation to Adjusted Earnings
2010 2011 2012 2013 2014
Profit for the period 151.2 156.2 153.1 147.0 164.1
Amortisation – acquisition related 28.5 34.4 46.2 50.1 57.9
Acquisition related items (11.3) 4.8 0.9 (1.4) (12.4)
Exceptional items 30.9 11.6 40.3 60.6 84.9
Share based compensation and related
items
14.9 11.7 16.2 8.1 16.0
Other losses / (gains) – net 0.1 4.6 11.6 (0.7) 6.0
Unwind of discount
1
3.4 8.9 9.3 12.4 10.5
Tax effect of above adjustments (14.6) (7.6) (24.1) (18.0) (47.4)
Adjusted Earnings attributable to non-
controlling interests
(58.2) (39.8) (35.1) (9.7) (0.6)
Adjusted Earnings 144.9 184.8 218.4 248.4 279.0
Weighted average number of shares for
computation of earnings per share, diluted
182,347,790 181,730,830 180,020,120 175,550,760 184,467,540
($m)
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.
Appendix: reconciliation of non-IFRS financial measures to IFRS financial measures
mines data,
pools intelligence,
surfaces information,
enables transparency,
builds platforms,
provides access,
scales volume,
extends networks,
& transforms business.

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Markit Investor Presentation - September 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 presentation. 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 Annual Report on Form 20-F. Copyright ©2015, Markit Group Limited. All rights reserved and all intellectual property rights are retained by Markit.
  • 3. 3 Agenda Introduction to Markit Business segment overview Q2 2015 results review Financial overview Appendix
  • 5. 5 Investing in a growing, profitable and cash generative leader in financial information services — Leading global provider of financial information services with a scalable and stable business model — Trusted partner to a diverse global customer base and deeply embedded in their systems and workflows — Solid organic revenue growth, favorable margins, high recurring revenues, and strong cash flow generation — Large and rapidly growing addressable market due to increased regulation and cost pressures in the financial industry — Strong track record of innovation and well positioned to capitalize on future growth opportunities — Strong balance sheet that provides flexibility to accelerate growth through value enhancing acquisitions — Management team highly incentivized to execute Introduction to Markit
  • 6. 6 Leading global provider of financial information services Enhancing transparency | Reducing risk | Improving operational efficiency Customers UsersAsset classes Banks Corporates Asset managers Insurance companies Hedge funds Securities firms PE / VC funds Clearing firms Pension funds Software / data vendors Equities FX Credit Structured finance Loans Commodities Rates CDS Bonds Environmental Traders Valuation analysts Risk managers Actuaries IT professionals Research analysts Investment professionals Portfolio managers Introduction to Markit 1 Includes $495m in share repurchases conducted in August 2012 payable in quarterly installments through to May 2017. As of December 31, 2014, outstanding amount of $211.1m. Leverage ratio as presented is calculated using Markit’s publicly reported definition of Adjusted EBITDA and Net Debt and not the definitions and methodology set forth in its revolving credit facility. 2003 founded 3,500+ institutional customers $1.1bn 2014 revenue $488m 2014 Adjusted EBITDA 0.65x 2014 Net debt / Adjusted EBITDA 1
  • 7. 7 Trusted partner to a diverse and global customer base Introduction to Markit Other2 Global revenue base Key highlights FY 2014 revenue: $1.1bn Broad diverse customer base1 ─ 3,500+ institutional customers ─ Renewal rate of approximately 90% for recurring fixed fee contracts ─ Largest customer accounts for <5% of revenue ─ Well-recognized brand Diversified global blue-chip customer base 1 Chart figures represent composition of customer base by number of customers. 2 "Other" includes consultants, accountants, NGOs, law firms, individuals, media/press, project developers, trade associations, self-regulatory organizations, and other. US 50% European Union 39% Other 11% 0%0%0%0%0%0%0%0% Other 2 Institutional investors Government and academic Software / data vendors Banks Securities and clearing firms Corporates and insurance Hedge fund and private equity / Venture capital Asset managers 0%0%0%0%0%0%0%0% Other 2 Institutional investors Government and academic Software / data vendors Banks Securities and clearing firms Corporates and insurance Hedge fund and private equity / Venture capital Asset managers 0%0%0%0%0%0%0%0% Other 2 Institutional investors Government and academic Software / data vendors Banks Securities and clearing firms Corporates and insurance Hedge fund and private equity / Venture capital Asset managers 0%0%0%0%0%0%0%0% Other 2 Institutional investors Government and academic Software / data vendors Banks Securities and clearing firms Corporates and insurance Hedge fund and private equity / Venture capital Asset managers 0%0%0%0%0%0%0%0% Other 2 Institutional investors Government and academic Software / data vendors Banks Securities and clearing firms Corporates and insurance Hedge fund and private equity / Venture capital Asset managers 0%0%0%0%0%0%0%0% Other 2 Institutional investors Government and academic Software / data vendors Banks Securities and clearing firms Corporates and insurance Hedge fund and private equity / Venture capital Asset managers0%0%0%0%0%0%0%0% Other 2 Institutional investors Government and academic Software / data vendors Banks Securities and clearing firms Corporates and insurance Hedge fund and private equity / Venture capital Asset managers 19% 22% 12% 8% 10% 5% 4% 0% 20% Asset managers Hedge fund and private equity / Venture capital Corporates and insurance Securities and clearing firms Banks Software / data vendors Government and academic Institutional investors Other 2
  • 8. 8 Leveraging our industry expertise and leading technologies across three complementary divisions Critical financial market information sourced, created, enriched and delivered Trade processing solutions for OTC derivatives, FX and syndicated loans Advanced enterprise solutions tied to Markit technology and software Information Processing Solutions Introduction to Markit $294m 27.6% $285m 26.8% $486m 45.6% Pricing & reference data Indices Valuation and trading services MarkitSERV Loan settlement Managed services Enterprise software 2014 revenue (m) 2014 adj. EBITDA margin Information $486 49.2% Processing $285 55.0% Solutions $294 31.7% Markit $1,065 46.0%
  • 9. 9 Introduction to Markit Top 10 products comprise ~80% of 2014 revenue Managed services 16% Enterprise software 12% Processing 27% Valuation and trading services 18% Indices 8% Pricing and reference data 19% Pricing and reference data ─ Fixed income (CDS, Loans, Bonds) ─ Securities lending data Indices ─ Fixed income indices (iBoxx, iTraxx) Valuation and trading services ─ Totem ─ Portfolio valuations OTC derivatives, loans, FX processing ─ OTC derivatives (IRS, CDS, Equity) and FX ─ Syndicated loan settlement Enterprise software / Managed services ─ WSO software / WSO services ─ On Demand ─ Enterprise Data Management (EDM) InformationProcessingSolutions Total 2014 revenue $1.1bn
  • 10. 10 Acquiring and building businesses that expand the breadth and depth of our products and services CDS pricing CDS reference entity identifiers Dividend forecasting Index management Loan pricing Daily equity & commodities data ABS pricing Credit event auctions OTC derivatives buy-side valuations Metrics Research aggregation Instant messaging Desktop and data feed solutions OTC derivative trade processing Portfolio reconciliation Structured finance cashflow modelling Loan CDS indices & pricing Bespoke indices Document management Macro - economic data Portfolio compression Syndicated loan portfolio management software Trade confirmations Loan mapping service Environmental registry Evaluated bond pricing Credit trade confirmation Market share analysis Loan settlement Valuations management Entity identifiers Mobile applications Broker voting SmartText Online advertising manager Liquidity metrics Loan processing Risk analytics Quantitative research and trading analytics FX trade processing Commission management Loan index Securities finance Enterprise data management Credit factors Instrument reference data ETF data & analytics ISDA amendment service RED acquired Totem & DaDD acquired LoanX acquired Chasen acquired Communicator acquired MarketXS acquired BOAT acquired CDS IndexCo acquired International Index Company acquired NTC Economics acquired FCS acquired SwapsWire acquired DTCC DerivSERV joint venture created TZ1 acquired ClearPar acquired STORM acquired Wall Street on Demand acquired QuIC acquired Logicscope acquired QSG acquired Data Explorers acquired Cadis acquired 26 94 140 313 470 1,081 1,439 2,041 2,414 2,849 3,278 CLO pricing RMBS index Tri-Party repo data Corporate actions Private equity valuations Loan analytics Credit checking Tax document management Collaboration services 50% of MarkitSERV acquired GCA acquired Credit indices European ABS performance monitoring European equity trade reporting platform Quote parsing Operational benchmarking 2004 2005 2006 2008 2009 2011 2012 2013 2007 2010 2003 Investment management solutions Social media research signals Flash Japan manufacturing PMI Client onboarding Intraday iNAVs Tax compliance services RMB bond index 2014 thinkFolio acquired Majority stake in CTI acquired 3,616 Employees Introduction to Markit AcquisitionsProducts Securities processing Loan trade closing FX broker affirmations FX option confirmations Prime brokerage software Loan custodian services FX pre-trade processing 4,000+ 2015 Agreed to acquire Halifax House Price Index Information Mosaic acquired Agreed to acquire CoreOne Technologies DealHub acquired
  • 11. 11 Accretive acquisitions to drive growth Introduction to Markit ─ Positions Markit as a leading provider of end to end securities processing solutions ─ Strong synergies with Markit Corporate Actions allows us to support the full corporate actions trade lifecycle ─ Helps customers improve operational efficiency through automation ─ Closed July 1st and will be integrated into Solutions division ─ A leading provider of index management, data management, regulatory reporting and prime brokerage services to financial institutions ─ Will benefit from our global sales relationships and distribution capabilities ─ Further strengthens Markit executive team ─ To be integrated across Information and Solutions divisions ─ Timing subject to customary closing conditions ─ Provides trading solutions, post-trade processing and transaction lifecycle support for the $5 trillion FX market ─ Complementary to Markit’s offerings and positions us to deliver a more comprehensive set of solutions to our combined set of customers ─ DealHub will benefit from the scale provided by Markit’s global sales and customer service capabilities and from synergies with Markit’s multi asset class trade processing services ─ Closed September 4th and will be integrated into Processing division
  • 12. 12 Secular trends offer long term growth opportunities Introduction to Markit Markit is addressing the most critical areas in a large market that is undergoing unprecedented change Growing markets… Focus on efficiency in financial services Emerging markets and developing economy growth Shifting investment styles Changing regulatory landscape Evolving technology and communication Financial data Order management systems Data management Risk management Reporting and compliance Indices …driven by key industry trends
  • 14. 14 Overview of Information division — Provides pricing and reference data, indices and valuation and trading services across multiple asset classes and geographies — Products used for independent valuations, research, trading, and liquidity and risk assessments — Serves over 2,700 customers including buyside firms, sellside firms, exchanges, central banks, regulators, government agencies, rating agencies, research organizations, accounting firms, consultancies, technology and service providers, and other companies using both direct and third-party distribution channels — Predominantly recurring fixed fee, subscription based revenue — Principal competitors are Bloomberg L.P., FactSet, Interactive Data Corporation and Thomson Reuters Inc. Pricing and reference data CDS, Loans, Bonds Securities lending data Indices Cash Bond Indices (iBoxx) Credit Derivative Indices (iTraxx) Securitized Product Indices Economic Indices (PMI) Custom Indices Valuation and trading services Totem Portfolio valuations Investment services Research and OTC services Information division 113k CDS instruments priced daily 2.3m Bonds priced daily $15.5tn Lendable inventory in securities finance dataset 85% of global GDP Covered by PMI surveys $81bn AuM in ETFs
  • 15. 15 Information division financial performance Information division 431.3 459.6 486.5 214.5 217.2 239.2 0 100 200 300 400 500 600 2012 2013 2014 Revenue Adjusted EBITDA 49.7% 47.3% 49.2% 40% 41% 19% Valuation and trading services Pricing and reference data Indices Adjusted EBITDA margin Revenue ($m) Subsegments 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% FY 2014 revenue: $486.5m Subsegment revenue split Financial performance ($ million)
  • 16. 16 Overview of Processing division — Offers trade processing solutions globally for OTC derivatives, FX and syndicated loans — Enables interdealer brokers, buyside and sellside firms to confirm transactions rapidly and increase efficiency by optimizing post-trade workflow — Reduces operational risk, facilitates compliance with global reporting regulations and supports clearing connectivity to 16 OTC clearinghouses — Predominantly recurring variable-fee revenue model — Principal competitors are Bloomberg L.P., Intercontinental Exchange, Inc. and Traiana, Inc. MarkitServ Loan Settlement Rates Credit Equities FX US Syndicated Loans European Syndicated Loans Processing division 2,000 customers 90,000 Derivative transactions processed daily 16 Clearinghouse connections 14 Swap execution facilities (“SEF”) connections 238.8 265.3 284.9 124.5 138.1 156.6 0 50 100 150 200 250 300 2012 2013 2014 Revenue Adjusted EBITDA Financial performance ($ million) 52.1% 52.1% 55.0%Adjusted EBITDA margin
  • 17. 17 Overview of Solutions division Solutions division 8,000 Counterparty Manager buyside subscribers $264bn WSO Services AUM 2m Corporate actions securities 2.1bn On Demand webpage views served weekly 105 WSO Software customers Enterprise Software Enterprise Data Management (EDM) WSO Software Analytics thinkFolio Information Mosaic Managed Services On Demand WSO Services Counterparty Manager Corporate Actions Tax Solutions kyc.com — Provides configurable enterprise software platforms and end- to-end managed services; designs, builds and hosts mobile and web applications for financial services customers — Offerings capture, organize, process, display and analyze information, manage risk and meet our customers’ regulatory requirements — Broad customer base including buyside and sellside firms, custodians, private equity firms, wealth management firms and retail brokerages — Combination of recurring fixed and variable-fee revenue model, with non-recurring revenue from software sales and associated services — Compete with firms such as Clarient Global LLC, GoldenSource, IBM Algorithmics and Intralinks Holdings, Inc.
  • 18. 18 190.5 223.0 293.7 67.6 77.5 93.1 0 50 100 150 200 250 300 350 2012 2013 2014 Revenue Adjusted EBITDA Solutions division financial performance Solutions division 35.5% 34.8% 31.7%Adjusted EBITDA margin 57% 43% Managed Services Enterprise Software Subsegment revenue split Financial performance ($ million) Revenue ($m) Subsegments FY 2012 FY 2013 FY 2014 CAGR % FY2012 – 2014 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% FY 2014 revenue: $293.7m
  • 19. Q2 2015 results review
  • 20. 20 Q2 2015 results review Q2 2015 financial highlights and recent developments ─ Revenue increased +6.7% on a constant currency basis with organic revenue growth +5.1% ─ Information organic revenue growth +4.9% ─ Solutions organic revenue growth +13.2%, acquired growth +6.1% ─ Processing organic revenue decline (2.5)% ─ Continued profitability with strong margins maintained ─ Adjusted EBITDA margin of 44.6% ─ Adjusted Earnings of $68.4 million ─ Adjusted diluted EPS of $0.36 ─ Announced acquisitions of Information Mosaic, CoreOne Technologies and DealHub ─ Completed $650m secondary offering with $350m concurrent share repurchase
  • 21. 21 Q2 2015 results review Information ($ million) 122.2 123.3 58.6 59.3 0 20 40 60 80 100 120 140 Q2 2014 Q2 2015 Revenue Adjusted EBITDA +0.9% Q2 2015 Q2 2014 YoY% 6M 2015 6M 2014 YoY % Revenue 123.3 122.2 0.9% 243.9 239.9 1.7% Organic growth - - 4.9% - - 5.6% Adjusted EBITDA 59.3 58.6 1.2% 117.5 113.8 3.3% Adjusted EBITDA margin 48.1% 48.0% 0.1% 48.2% 47.4% 0.8% Q2 overview: ─ Continued growth across fixed income pricing and reference data products ─ Double digit organic growth in Indices ─ Maintained strong Adjusted EBITDA margin Organic revenue growth +4.9%
  • 22. 22 Q2 2015 results review Processing ($ million) Q2 overview: ─ Impact from electronic trading and clearing reduced revenue by approximately $5m ─ Increased volumes in the rates asset class were partially offset by weaker performance in credit ─ Strong Adjusted EBITDA margin 72.1 67.5 38.9 36.2 0 10 20 30 40 50 60 70 80 Q2 2014 Q2 2015 Revenue Adjusted EBITDA (6.4)% Q2 2015 Q2 2014 YoY% 6M 2015 6M 2014 YoY % Revenue 67.5 72.1 (6.4)% 134.9 144.2 (6.4)% Organic growth - - (2.5%) - - (2.4)% Adjusted EBITDA 36.2 38.9 (6.9)% 71.6 78.2 (8.4)% Adjusted EBITDA margin 53.6% 54.0% (0.4)% 53.1% 54.2% (1.1)% Organic revenue growth (2.5)%
  • 23. 23 Q2 2015 results review Solutions ($ million) 70.3 82.3 22.5 25.8 0 10 20 30 40 50 60 70 80 90 Q2 2014 Q2 2015 Revenue Adjusted EBITDA +17.1% Q2 2015 Q2 2014 YoY% 6M 2015 6M 2014 YoY% Revenue 82.3 70.3 17.1% 165.8 139.9 18.5% Organic growth - - 13.2% - - 13.8% Acquisition related - - 6.1% - - 6.9% Adjusted EBITDA 25.8 22.5 14.7% 53.6 44.7 19.9% Adjusted EBITDA margin 31.3% 32.0% (0.7)% 32.3% 32.0% 0.3% Q2 overview: ─ Strong organic revenue growth ─ Largest businesses – On Demand, WSO, EDM – continue to deliver strong growth ─ Corporate Actions continues to grow strongly; acquisition of Information Mosaic expected to enhance future growth ─ Maintained Adjusted EBITDA margin while continuing to invest in new initiatives Organic revenue growth +13.2%
  • 24. 24 Management actions to deliver EPS1 growth Management actions in 2015: ─ Share buyback of $350m as part of secondary offering ─ Agreed to acquire Halifax House Price Index ─ Acquisition of Information Mosaic ─ Announced acquisition of CoreOneTechnologies2 ─ Expected execution of remaining $150m share buyback authorisation3 ─ Expected terming out of debt structure3 ~10% 2016 Adjusted Diluted EPS 2016 Adjusted Diluted EPS (inclusive of management actions) Additional Adjusted Diluted EPS growth expected from management actions4 1. Adjusted diluted earnings per share 2. Subject to regulatory approval and closing conditions 3. Subject to conditions at the time 4. Net impact of all management action through 2015 Q2 2015 results review
  • 25. 25 Q2 2015 results review Net debt / leverage ($ million) June 30th, 2015 December 31st, 2014 Bank borrowings 371.9 224.5 Share buyback 170.2 211.1 Total borrowings 542.1 435.6 Cash and cash equivalents (119.5) (117.7) Net debt 422.6 317.9 LTM Adjusted EBITDA(1) 493.1 488.2 Leverage (2) H2 2015 management actions 0.86x 0.65x ─ Acquisition of Information Mosaic ─ Acquisition of CoreOne Technologies3 ─ Expected $150 million share buyback4 Pro forma leverage (Year end 2015) ~ 1.5x 6M overview: ─ Strong operating cash flow of $197.9 million with significant contribution from positive working capital movements ─ Disciplined deployment of capital expenditure of $63.6 million for 6M 2015 ─ $394.1 million outflow on share buybacks ─ Net debt increased $104.7 million 1. LTM Adjusted EBITDA is defined as Adjusted EBITDA for the previous twelve month period to date reported 2. Leverage is defined as net debt divided by LTM Adjusted EBITDA 3. Subject to regulatory approval and closing conditions 4. Subject to conditions at the time
  • 26. 26 187.3 191.7 190.8 ~182 ~180 ~182 4.4 2.3 ~2 ~2 3.2 ~11 ~4 Q4 2014 Dilution Q1 2015 Dilution Share repurchase Q2 2015 Dilution Share repurchase Q3 2015 Dilution Share repurchase Q4 2015 FY 2016 Estimated in-quarter weighted average number of shares, diluted Managing diluted shares outstanding 1 ─ $350m share repurchase (~14m shares) completed June 10th, 2015 ─ $150m remainder of authorised share buyback programme expected to be utilised by year end ─ Future buybacks expected to offset dilutive impact of annual compensation awards and option exercises (million) Expected Dilution refers to dilutive impact of employee options and restricted stock. Q2 and Q3 share repurchase totals refer to June 10, 2015 share repurchase of approximately $350m. Q4 share repurchase total is time-weighted and assumes utilisation of remaining $150m authorisation in Q4 2015 (subject to conditions at the time) and share price of $26.30. Q3 and Q4 dilution assumes average share price of $26.30 and option exercise of over 3m shares in each quarter. 2016 assumes a flat average share price, the exercise of 12.6m options and that all proceeds from exercise are utilised to repurchase shares. Q2 2015 results review
  • 27. 27 Q2 2015 results review 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 with a strike price below $26.70 vested on IPO ─ Options with a strike price 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) Q2 2015 Q2 2014 Number of shares outstanding at the reporting date 176.7 180.9 Weighted average number of shares, basic 183.1 177.3 Option dilution 6.5 4.8 Restricted shares dilution 1.2 0.7 Weighted average number of shares, diluted 190.8 182.8 Share price used for 2Q15 dilution calculation $26.30 $21.80 Illustrative average share price Illustrative diluted average number of shares (million) $23 188.0 $27 191.3 $30 196.5 Exercise price Outstanding (million) Unvested (million) < $15.00 3.4 – $15.00- $19.99 4.3 – $20.00- $26.69 18.3 6.2 > $26.69 30.5 27.5 Total 56.5 33.7 Three months ended June 30th – Reported Illustrative weighted average diluted number of shares three months ended June 30th 2015 Total outstanding options at June 30th 2015
  • 29. 29 Track record of consistent financial performance Financial overview $261 $305 $358 $421 $488 2010 2011 2012 2013 2014 Adjusted EBITDA Adjusted EBITDA margin $145 $185 $218 $248 $279 2010 2011 2012 2013 2014 $668 $763 $861 $948 $1,065 2010 2011 2012 2013 2014 Note: Financials presented under IFRS accounting guidelines. Adjusted EBITDA, Adjusted Earnings and Adjusted EBITDA margin are non-IFRS financial measures. Please see Appendix for definitions of these measures and a reconciliation of non-IFRS financial measures to IFRS financial measures. ─ Recurring revenue ~95%: products and services primarily offered through recurring fixed fee and variable fee agreements ─ Strong organic growth: breadth of offerings and large, global customer base allow cross-selling of products and services ─ High cash generation: high adjusted EBITDA margins and low capital requirements Revenue ($m) Adjusted EBITDA ($m) and margin Adjusted Earnings ($m) 46.2% 45.8% 47.0% 45.6% 46.0%
  • 30. 30 Stable and diversified revenue streams Financial overview Revenue growth composition 2014 revenue by geography Note: Acquisition related growth is defined as revenue growth from acquired businesses through the end of the fiscal year following the fiscal year in which the acquisition was completed. Recurring fixed renewal rate: ~90% 2014 revenue by type US 50% European Union 39% Other 11% 5.9% 6.1% 7.8% 7.0% 4.0% 4.6% 12.9% 10.1% 12.4% 2012 2013 2014 Organic growth Acquired growth & FX Recurring fixed 53% Recurring variable 42% Non-recurring 5%
  • 31. 31 Consistent delivery across divisions Financial overview 48% 53% 50% 49% 36% 30% 32% 32% 16% 17% 18% 19% $360 $407 $433 $489 2011 2012 2013 2014 49% 50% 48% 46% 30% 28% 28% 27% 21% 22% 24% 27% $763 $861 $948 $1,065 2011 2012 2013 2014 Revenue ($m) Adjusted EBITDA1 ($m) 1 Adjusted EBITDA by business segment shown before any deduction of non-controlling interest. Please see Appendix for reconciliation of non-IFRS financial measures to IFRS financial measures. ‘11 – ‘14 CAGR 11.8% 22.0% 7.8% 9.2% ‘11 – ‘14 CAGR 10.8% 18.3% 6.7% 11.1% Adjusted EBITDA Margin Solutions 34.7% 35.5% 34.8% 31.7% Processing 56.7% 52.1% 52.1% 55.0% Information 46.7% 49.7% 47.3% 49.2% Processing Solutions Information 11.8% 7.8% 9.2% 11.1% 6.7% 22.0% 18.3% 10.8%
  • 32. 32 Financial overview Acquisitions 43% Internal investments 21% Share repurchases 36% 1. Internal investments 2. Acquisitions 3. Share repurchases 2010 – 2014 cumulative capital allocation Total: $2,395m $70 $75 $99 $131 $125 $242 $67 $381 $224 $129 $183 $52 $619 $495 $194 $1,099 $355 $254 2010 2011 2012 2013 2014 ($mm) Internal investments Acquisitions Share repurchases ─ Target leverage ratio of 1.5 – 2.0x ─ In order to maintain or adjust the capital structure, Markit returns capital to shareholders, issues new shares or sells assets to reduce debt 1 1 Includes $495m in share repurchases conducted in August 2012 payable in quarterly installments through to May 2017. 2 Does not reflect $350m share repurchase completed June 10, 2015. ($m) Balanced and flexible capital allocation framework 2
  • 33. 33 Committed to long-term financial objectives ─ Maintain 5-7% organic revenue growth ─ Double digit revenue growth with acquisitions ─ Maintain low to mid 40% Adjusted EBITDA margin Disclaimer: These objectives are forward-looking, are subject to significant business, economic, regulatory and competitive uncertainties and contingencies, many of which are beyond the control of the Company and its management, and are based upon assumptions with respect to future decisions, which are subject to change. Actual results will vary and those variations may be material. Nothing in this presentation should be regarded as a representation by any person that these objectives will be achieved and the Company undertakes no duty to update its objectives as circumstances change. Financial overview
  • 35. 35 Impact of electronic trading on Processing ~40% ~60% Loans / FX / Equities Rates / Credit ~30% ~30% Rates / Credit not impacted Rates / Credit impacted 2014 Processing revenue by asset class Rates / Credit revenue Regulation will introduce trading rules over the next three years that affect standardized OTC derivatives ─US: CFTC already enacted rules, SEC yet to issue final rules ─Europe: likely implementation late 2016 or 2017 ─Asia: various jurisdictions in different stages of implementation Loans / FX / Equities ─No anticipated material impact from new regulations ─Future growth will come from strong market volume increases in Loans and increased market share and new solutions in FX and Equities Rates / Credit ─Half of Rates / Credit revenue derives from less liquid products and markets which are unlikely to be impacted by trading rules ─For electronic/cleared trades, simpler processing results in lower revenues per ticket (up to ~80% lower ticket price) ─Electronic/cleared trading impact on market share and volumes not fully known ─Revenue impact estimated to be phased in over three years through 2017 Gross estimated annual revenue impact of $50–60m ─Pricing discounts implemented in Q2 2015 estimated $3–5m revenue impact per quarter ($12–20m annual revenue impact) Potential mitigants to financial impact: ─Further growth in Loans, Equities, and FX ─New services such as FX Options ─Trade volume increases due to electronic trading ─Managing costs to minimize the Adjusted EBITDA impact FY 2014 revenue: $284.9m Appendix: Processing division
  • 36. 36 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 recognized 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 recognized 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. 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 and related items, 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. Appendix: Definitions
  • 37. 37 Appendix: reconciliation of non-IFRS financial measures to IFRS financial measures Reconciliation to Adjusted EBITDA ($ million) Q2 2015 Q2 2014 6M 2015 6M 2014 FY2014 LTM ended June 2015 Profit for the period 44.5 29.4 99.0 69.2 164.1 193.9 Income tax expense 22.6 9.6 43.4 25.2 56.5 74.7 Finance costs – net 3.7 3.9 7.8 8.3 16.9 16.4 Depreciation and amortisation - other 26.4 23.5 51.3 46.8 100.1 104.6 Amortisation – acquisition related 14.4 14.1 28.8 28.3 57.9 58.4 Acquisition related items - 2.2 - 5.0 (12.4) (17.4) Exceptional items 1.8 31.3 3.2 42.4 84.9 45.7 Share based compensation and related items 8.7 3.1 18.6 6.1 16.0 28.5 Other (gains) / losses – net (0.2) 2.9 (8.1) 5.4 6.0 (7.5) Share of results from joint venture not attributable to Adjusted EBITDA (0.6) -- (1.3) - (1.1) (2.4) Adjusted EBITDA attributable to non- controlling interests (0.4) -- (1.1) - (0.7) (1.8) Adjusted EBITDA 120.9 120.0 241.6 236.7 488.2 493.1
  • 38. 38 Reconciliation to Adjusted EBITDA 2010 2011 2012 2013 2014 Profit for the period 151.2 156.2 153.1 147.0 164.1 Income tax expense 43.8 50.6 42.7 63.7 56.5 Finance costs – net 18.2 22.9 28.9 19.4 16.9 Depreciation and amortisation - other 48.2 62.7 66.7 86.0 100.1 Amortisation – acquisition related 28.5 34.4 46.2 50.1 57.9 Acquisition related items (11.3) 4.8 0.9 (1.4) (12.4) Exceptional items 30.9 11.6 40.3 60.6 84.9 Share based compensation and related items 14.9 11.7 16.2 8.1 16.0 Other losses / (gains) – net 0.1 4.6 11.6 (0.7) 6.0 Share of results from joint venture not attributable to Adjusted EBITDA 0.0 0.0 0.0 0.0 (1.1) Adjusted EBITDA attributable to non-controlling interests (63.5) (54.5) (48.4) (11.5) (0.7) Adjusted EBITDA 261.0 305.0 358.2 421.3 488.2 ($m) Appendix: reconciliation of non-IFRS financial measures to IFRS financial measures
  • 39. 39 Appendix: reconciliation of non-IFRS financial measures to IFRS financial measures Reconciliation to Adjusted Earnings ($ million) Q2 2015 Q2 2014 6M 2015 6M 2014 Profit for the period 44.5 29.4 99.0 69.2 Amortisation – acquisition related 14.4 14.1 28.8 28.3 Acquisition related items - 2.2 - 5.0 Exceptional items 1.8 31.3 3.2 42.4 Share based compensation and related items 8.7 3.1 18.6 6.1 Other (gains) / losses – net (0.2) 2.9 (8.1) 5.4 Unwind of discount (1) 2.3 2.4 4.8 4.9 Tax effect of above adjustments (2.7) (17.1) (8.3) (20.1) Adjusted Earnings attributable to non-controlling interests (0.4) - (1.1) - Adjusted Earnings 68.4 68.3 136.9 141.2 Weighted average number of shares for computation of earnings per share, diluted 190,780,009 182,777,170 191,085,644 180,724,370 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.
  • 40. 40 Reconciliation to Adjusted Earnings 2010 2011 2012 2013 2014 Profit for the period 151.2 156.2 153.1 147.0 164.1 Amortisation – acquisition related 28.5 34.4 46.2 50.1 57.9 Acquisition related items (11.3) 4.8 0.9 (1.4) (12.4) Exceptional items 30.9 11.6 40.3 60.6 84.9 Share based compensation and related items 14.9 11.7 16.2 8.1 16.0 Other losses / (gains) – net 0.1 4.6 11.6 (0.7) 6.0 Unwind of discount 1 3.4 8.9 9.3 12.4 10.5 Tax effect of above adjustments (14.6) (7.6) (24.1) (18.0) (47.4) Adjusted Earnings attributable to non- controlling interests (58.2) (39.8) (35.1) (9.7) (0.6) Adjusted Earnings 144.9 184.8 218.4 248.4 279.0 Weighted average number of shares for computation of earnings per share, diluted 182,347,790 181,730,830 180,020,120 175,550,760 184,467,540 ($m) 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. Appendix: reconciliation of non-IFRS financial measures to IFRS financial measures
  • 41. mines data, pools intelligence, surfaces information, enables transparency, builds platforms, provides access, scales volume, extends networks, & transforms business.