- Markit reported strong financial results for Q3 2014, with revenue increasing 13.1% to a quarterly record of $269.7 million, driven by growth in all three business segments.
- Recurring revenue was 94.9% of total revenue, and recurring fixed revenue increased to 53.6% from 50.8% in Q3 2013. Adjusted EBITDA grew 14.5% to $126.8 million.
- The company saw organic growth across all segments, with Information growing 6.8% and Processing growing 12.5% due to increased trading volumes. Solutions achieved 26.2% growth driven by demand for its major products.
Get the financial highlights and an overview of our performance per business.
You can view our financial reports here: www.sgs.com/en/Our-Company/Investor-Relations/Financial-Reports
SGS 2021 Full Year Results Alternative Performance MeasuresSGS
We've delivered a strong financial performance in 2021, making significant progress on our new strategic plan.
#SGS #SGSGroup #WeAreSGS #FinancialResults
Get the financial highlights and an overview of our performance per business.
You can view our financial reports here: www.sgs.com/en/Our-Company/Investor-Relations/Financial-Reports
SGS 2021 Full Year Results Alternative Performance MeasuresSGS
We've delivered a strong financial performance in 2021, making significant progress on our new strategic plan.
#SGS #SGSGroup #WeAreSGS #FinancialResults
Get the financial highlights and an overview of our performance per business.
You can view our financial reports here: www.sgs.com/en/Our-Company/Investor-Relations/Financial-Reports
Get the financial highlights and an overview of our performance per business.
You can view our financial reports here: https://www.sgs.com/en/Our-Company/Investor-Relations/Financial-Reports.
Get the financial highlights and an overview of our performance per business.
You can view our financial reports here: www.sgs.com/en/Our-Company/Investor-Relations/Financial-Reports
Get the financial highlights and an overview of our performance per business.
You can view our financial reports here: https://www.sgs.com/en/Our-Company/Investor-Relations/Financial-Reports.
Presentation given by CEO Jeff Weiner, and CFO Steve Sordello, at LinkedIn Q1 2014 Earnings Call. For more information, check out http://investors.linkedin.com/.
Shutterfly Earnings for 1Q 2014 released after market close today. Released in tandem with their conference call - which starts in about 20 minutes: http://www.media-server.com/m/p/o42tycb9
Looks like they beat by $0.05 and gave updated guidance more or less in-line with consensus. Note that Goldman upgraded the stock 2 weeks ago...
Wolters Kluwer, a global leader in professional information services, released its 2015 Full-Year Results. For the full report, visit http://wolterskluwer.com/investors.
5. 5
Q3 2014 financial results overview
Strong third quarter financial performance
Revenue increased 13.1% to a quarterly record of $269.7 million
Constant currency revenue growth +11.1% (8.1% organic, 3.0% acquired)
Driven by revenue growth in all three business segments:
Information +6.8%, organic growth +4.8%
Processing +12.5%, organic growth +9.4%
Solutions +26.2%, organic growth +13.1%, acquired growth +12.1%
Recurring revenue of 94.9%; recurring fixed revenue increased to 53.6% of total
revenue from 50.8%
Continued profitability and strong margins maintained
Adjusted EBITDA grew 14.5%; Adjusted EBITDA margin of 47.3%
Adjusted Earningswas $68.7 million and Adjusted EPS diluted was $0.37
Adjusted EBITDA is defined as profit for the period from continuing operations before income taxes, net finance costs, depreciation and amortisation on fixed assets and intangible assets
(including acquisition related intangible assets), acquisition related items, exceptional items, share based compensation and net other gains or losses and excluding Adjusted EBITDA
attributable to non-controlling interests. Adjusted EBITDA margin is defined as Adjusted EBITDA divided by revenue, excluding revenue attributable to non-controlling interests.
Adjusted Earnings is defined as profit for the period from continuing operations before amortisation of acquired intangibles, acquisition related items, exceptional items, share based
compensation, net other gains or losses and unwind of discount, less the tax effect of these adjustments and excluding Adjusted Earnings attributable to non-controlling interests.
Adjusted EPS diluted is defined as Adjusted Earnings divided by the weighted average number of shares used to compute earnings per share, diluted.
6. 6
Q3 2014 financial results overview
Third quarter 2014 highlights
Strong financial performance and organic growth across all three
business segments
Organic growth in Information through product enhancements and
penetrating new customers
Strong Processing volumes driven by market volatility; no significant
revenue impact from electronic trading
Solutions achieved double digit growth driven by demand across all
major products
Well positioned to deliver on longterm financial objectives
7. 7
Q3 and 9 months 2014 financial results
Jeff Gooch
8. 8
Q3 and 9M 2014 financial results
Summary financial results
($ million)
Q3 2014 Q3 2013 YoY% 9M 2014 9M 2013 YoY%
Revenue 269.7 238.4 13.1% 793.7 704.1 12.7%
Constant currency growth - - 11.1% - - 10.4%
Adjusted EBITDA(1) 126.8 110.7 14.5% 363.5 312.9 16.2%
Adjusted EBITDA margin (2) 47.3% 46.4% - 45.9% 46.0% -
Adjusted Earnings (3) 68.7 64.7 6.2% 209.9 183.0 14.7%
Adjusted EPS diluted (4) $0.37 $0.37 - % $1.14 $1.04 9.6%
Weighted average number of shares
used to compute earnings per share,
diluted
187.9 176.5 6.5% 183.6 175.8 4.4%
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 net other gains or losses
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.
10. 10
Q3 and 9M 2014 financial results
Revenue mix - Q3 2014
53.6%
41.3%
5.1%
Recurring fixed
Recurring variable
Non-recurring
Q3 2014: $269.7
million
$ million/ % Q3 2014 % Q3 2013 % YoY YoY%
Recurring fixed $144.6 53.6% $121.1 50.8% $23.5 2.8%
Recurring variable $111.4 41.3% $108.0 45.3% $3.4 (4.0)%
Non-recurring $13.7 5.1% $9.3 3.9% $4.4 1.2%
Total Revenue $269.7 $238.4 $31.3
Key features:
Recurring fixed revenue
increased due primarily to
new business wins
Recurring variable revenue
decreased as a percentage
of total revenue
Non-recurring revenue
increased due to new
business wins in Solutions
11. 11
Q3 and 9M 2014 financial results
Operating expenses
($ million)
Q3 2014 Q3 2013 YoY% 9M 2014 9M 2013 YoY%
Personnel
costs
(86.7) (77.9) 11.3% (265.1) (231.5) 14.5%
Non
personnel
costs
(55.9) (49.8) 12.2% (164.8) (148.2) 11.2%
Total
operating
expenses
(142.6) (127.7) 11.7% (429.9) (379.7) 13.2%
Q3 highlights:
Personnel costs increased
due to acquisitions and new
hires
Employee growth was
predominantly in low cost
locations
Non personnel costs
increased due to public
company running costs and
investments in new product
development
14. 14
Q3 and 9M 2014 financial results
Impact of electronic trading on Processing
9M 2014 Processing revenue by asset class
~40%
~60%
Loans /
FX /
Equities
Rates /
Credit
~30%
~30%
Rates /
Credit not
impacted
Rates /
Credit
impacted
Rates / Credit revenue
Regulation will introduce trading rules that affect
standardized OTC derivatives over the next three years
US: CFTC already enacted rules, SEC yet to issue final rules
Europe: consultation late 2014 with likely implementation late 2016 or 2017
Asia: various jurisdictions in different stages of implementation
Loans / FX / Equities
No anticipated material impact from new regulations, low double digit 2014 YTD
growth
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
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 EBITDA impact
9M 2014: $216.4 million
15. 15
Q3 and 9M 2014 financial results
Solutions
($ million)
58.7
74.1
+26.2%
21.7 24.1
100
75
50
25
0
Q3 2013 Q3 2014
Revenue Adjusted EBITDA
Q3 2014 Q3 2013 YoY% 9M 2014 9M 2013 YoY%
Revenue 74.1 58.7 26.2% 214.0 161.1 32.8%
Organic growth - - 13.1% - - 18.9%
Acquisition related - - 12.1% - - 12.8%
Adjusted EBITDA 24.1 21.7 11.1% 68.8 55.3 24.4%
Adjusted EBITDA
margin
32.5% 37.0% - 32.1% 34.3% -
Q3 highlights:
Double digit organic revenue
growth driven by new business
wins across Managed Services
and Enterprise Software
Markit Corporate Actions,
thinkFolio, and CTI acquisitions
contributed +12.1% to revenue
growth
Adjusted EBITDA margins lower
due to continued investment in
growth initiatives
16. 16
Q3 and 9M 2014 financial results
Exceptional items
($ million)
Q3 2014 Q3 2013 9M 2014 9M 2013
Legal advisory costs (1.1) (1.6) (4.0) (3.8)
Impairments (8.3) (12.7) (8.3) (12.7)
Profit on sale of available-for-sale financial
asset
- - - 4.2
IPO preparation and execution costs - - (12.1) -
Accelerated IFRS 2 charges - - (7.3) -
Recognition of liability for social security
costs on option exercise
- - (20.1) -
Total exceptional items (9.4) (14.3) (51.8) (12.3)
17. 17
Q3 and 9M 2014 financial results
Net debt / leverage
($ million)
September
30th 2014
December
31st 2013
Bank borrowings 274.3 268.0
Share buyback 235.1 306.6
Total borrowings 509.4 574.6
Cash and cash equivalents (81.1) (75.3)
Net debt 428.3 499.3
LTM Adjusted EBITDA(1) 471.9 421.3
Leverage
(Net debt/ LTM Adjusted EBITDA)
0.91x 1.19x
1. LTM Adjusted EBITDA is defined as Adjusted EBITDA for the previous twelve month period to date reported
Q3 highlights:
Net debt down 14.2% or $71.0
million
Leverage remains low at 0.91x
$88.0 million capital expenditure
YTD 2014, down 7.1% or $6.7
million year on year
19. 19
Q3 and 9M 2014 financial results
Definitions
Revenue growth
We measure revenue growth in terms of organic revenue growth, acquisition related revenue growth and foreign currency impact on 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 net other gains or losses 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.
20. 20
Q3 and 9M 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
Surplus cash will be used for general
corporate purposes including investment in
our business and to pursue acquisitions
Three months ended September 30th – Reported
(million except share price)
2014 2013
Weighted average number of shares, basic 180.0 175.3
Option dilution 6.9 0.8
Restricted shares dilution 1.0 0.4
Weighted average number of shares, diluted 187.9 176.5
Share price used for Q314 dilution calculation $25.14 -
Illustrative weighted average diluted number of shares
three months ended September 30th 2014
Illustrative average
share price
Illustrative diluted average
number of shares (million)
$23 186.0
$27 189.9
$30 195.6
Total outstanding options at September 30th 2014
Exercise price Outstanding (million) Unvested (million)
$15.00 4.8 –
$15.00- $19.99 6.1 1.1
$20.00- $26.69 22.3 8.9
$26.69 33.7 33.2
Total 66.9 43.2
21. 21
Q3 and 9M 2014 financial results
Reconciliation to Adjusted EBITDA
($ million)
Q3 2014 Q3 2013 9M 2014 9M 2013 FY 2013
LTM
ended
Sep. 2014
Profit for the period 79.2 32.4 148.4 144.1 147.0 151.3
Income tax expense 11.6 16.5 36.8 52.1 63.7 48.4
Finance costs – net 4.5 4.7 12.8 15.0 19.4 17.2
Depreciation and amortisation 25.1 21.9 71.9 62.4 86.0 95.5
Amortisation – acquisition related 15.0 12.6 43.3 37.0 50.1 56.4
Acquisition related items (16.0) 0.1 (11.0) 0.2 (1.4) (12.6)
Exceptional items 9.4 14.3 51.8 12.3 60.6 100.1
Share based compensation and related items 0.7 2.0 6.8 5.9 8.1 9.0
Other losses/ (gains) – net (2.4) 6.2 3.0 (4.6) (0.7) 6.9
Adjusted EBITDA attributable to non-controlling
interests
(0.3) - (0.3) (11.5) (11.5) (0.3)
Adjusted EBITDA 126.8 110.7 363.5 312.9 421.3 471.9
22. Q3 2014 Q3 2013 9M 2014 9M 2013
Profit for the period 79.2 32.4 148.4 144.1
Amortisation – acquisition related 15.0 12.6 43.3 37.0
Acquisition related items (16.0) 0.1 (11.0) 0.2
Exceptional items 9.4 14.3 51.8 12.3
Share based compensation and related items 0.7 2.0 6.8 5.9
Other losses/ (gains) – net (2.4) 6.2 3.0 (4.6)
2.9 3.0 7.8 9.8
Tax effect of above adjustments (20.4) (5.9) (40.5) (12.0)
Adjusted Earnings attributable to non-controlling interests 0.3 - 0.3 (9.7)
Adjusted Earnings 68.7 64.7 209.9 183.0
187,893,323 176,547,638 183,630,386 175,835,360
22
Q3 and 9M 2014 financial results
Reconciliation to Adjusted Earnings
($ million)
Unwind of discount
(1)
Weighted average number of shares for computation of
earnings per share, diluted
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.