DB Technology Conference Markit CEO Presentation Final 9-9-14 v001 r0fn7m

8/11/2019 DB Technology Conference Markit CEO Presentation Final 9-9-14 v001 r0fn7m

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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 futureare 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, longterm objectives and anticipated financial and operating results of the Company. Markitsestimates 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 actualresults to differ materially from those implied or expressed by the forward-looking statements. Further information on such assumptions, risks and

uncertainties is available in Markitsfilings with the United States Securities and Exchange Commission (SEC) including the Risk Factors section

of its registration statement filed with the SEC. MarkitsSEC filings are available at www.sec.gov or on the investor relations section of its website,

www.markit.com. Markit undertakes no obligation and does not intend to update these forward-looking statements to reflect events or circumstances

occurring after the date of this presentation. You are cautioned not to place undue reliance on these forward-looking statements, which speak only

as of the date of this press release. All forward-looking statements are qualified in their entirety by this cautionary statement.

Non-IFRS financial measuresThis 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 companys 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 Markits

earnings release dated August 13, 2014.

Copyright 2014, Markit Group Limited. All rights reserved and all intellectual property rights are retained by Markit.


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Overview

Leading provider of financial information services globally

Banks

Asset managersHedge funds

Private equity funds

Venture capital funds

Corporates

Insurance companies

Securities firms

Clearing firms

Software / data vendors

Traders

Risk managers

Compliance officers

IT professionals

Investment professionals

Portfolio managers

Valuation analysts

Actuaries

Research analysts

Equities

Credit

Loans

Rates

Bonds

FX

Structured finance

Commodities

CDS

Environmental

2003founded

10countries

22offices

3,000+institutionalcustomers

3,200+employees

$948m2013 revenue

$421m2013 adjustedEBITDA

Customers Coverage End users

Enhancing transparency

Reducing risk

Improving operational efficiency


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Customer focus

Deeply embedded in our customers systems and workflows

Work closely with customers to develop and introduce new offerings that aredesigned to enhance transparency, reduce risk and improve operational efficiency

Chart figures represent composition of customer base by number of custom

ers

20%

2%5%5%10%

12%

12%

17%

18%Asset Managers

Hedge Fund, Private Equity

Corporates & Insurance

Securities and Clearing

Banks

Software / Data Vendors

Government & Academic

Institutional Investors

Other


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Our divisions

Our operating divisions

Enterprise Software

Managed Services

Information

Critical financial marketinformation sourced /created, enriched anddelivered

Pricing & reference data

Indices

Valuation and tradingservices

2013 revenue: $460m

Processing

Trade processing for OTCderivatives, FX andsyndicated loans

Trade processing

Multi asset class tradeconfirmation and settlementplatform

2013 revenue: $265m

Solutions

Advanced enterprisesolutions tied to Markittechnology / software

Enterprise software

Managed services

2013 revenue: $223m

48%

28%

24%


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Market positioning

Well positioned to address critical industry trends

Markit is addressing the most critical areas in a massive market that is undergoingunprecedented change

We operate in growing markets

Focus on efficiency in financial services

Emerging markets and developing economy growth

Shifting investment styles

Changing regulatory landscape

Evolving technology and communication

Pricing, reference and valuation data

OTC / ET derivatives processing

Reporting and compliance

Data management

Risk management

Order management systems

Indices

...that offer significant opportunity


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Key corporate events

Track record of acquiring and growing complementary

businesses

CDS Pricing

CDS ReferenceEntityIdentifiers

DividendForecasting

IndexManagement

OTCDerivativesSell-SideValuations

Loan Pricing

Daily Equity &CommoditiesData

ABS Pricing

Credit EventAuctions

OTCDerivativesBuy-SideValuations

Metrics

ResearchAggregation

Instant Messaging

Desktop and DataFeed Solutions

OTC DerivativeTrade Processing

PortfolioReconciliation

Structured FinanceCashflow Modeling

Loan CDS Indices& Pricing

Bespoke Indices

DocumentManagement

MacroeconomicData

PortfolioCompression

Syndicated LoanPortfolioManagementSoftware

TradeConfirmations

Loan MappingService

Environmental Registry

Evaluated Bond Pricing

Credit TradeConfirmation

Market Share Analysis

Loan Settlement

Valuations Management

Entity Identifiers

Mobile Applications

Broker Voting

SmartText

Online AdvertisingManager

Liquidity Metrics

LoanProcessing

Risk Analytics

QuantitativeResearchand TradingAnalytics

FX TradeProcessing

CommissionManagement

Loan Index

SecuritiesFinance

EnterpriseDataManagement

Credit Factors

InstrumentReferenceData

ETF Data &Analytics

ISDA Amend

TD Bank Spin Off

RED Acquired

Nine Banks Invest

Totem & DaDDAcquired

LoanX Acquired

Hedge Funds Invest

Chasen Acquired

CommunicatorAcquired

MarketXS Acquired

Three Banks Invest

BOAT Acquired

CDS IndexCoAcquired

International IndexCompany Acquired

NTC EconomicsAcquired

FCS Acquired

SwapsWireAcquired

DTCC DerivSERVJoint Venture created

TZ1 Acquired

ClearPar Acquired

STORM Acquired

General AtlanticInvests

Wall Street onDemandAcquired

QuIC Acquired

LogicscopeAcquired

QSG Acquired

Data ExplorersAcquired

Cadis Acquired

26 94 140 313 470 1,081 1,439 2,041 2,414 2,849 3,000+

CLO Pricing

RMBS IndexTri- Party Repoand DataAnalysis

CorporateActions

Private EquityValuations

Loan Analytics

CreditChecking

Tax DocumentManagement

Collaboration

Remaining 50% ofMarkitSERV Acquired

GCA Acquired

Temasek Invests

Employees

Product

offering

StrategicEvents

Credit Indices

European ABSPerformanceMonitoring

European EquityTradeReporting Platform

QuoteParsing

OperationalBenchmarking

20042005

2006

2008

2009

2011

2012

2013 Rev:$948mm

2007

2010

2003


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Case study

Markitsloan franchise (revenue in $m)

$3.7 $5.4 $6.0$10.6

$47.4

$103.2

$135.2$143.8

$158.7

$193.9

2004 2005 2006 2007 2008 2009 2010 2011 2012 2013

LoanX/Loans Pricing WSO Clearpar/Storm Loans Indices

Acquisition Build

AcquireLoanX(LoanPricing)

LaunchloanCDSindicesandpricingservices

Acquire FCS(Loansoftware,servicingand data)

Launch loanmappingserviceLaunchLiLLI(Liquid LoanIndex)

LaunchLiquidityMetrics andMiLLI (LoanIndex andLoanLiquidity)

LaunchMarkit EntityIdentifier(MEI)

AcquireClearParand Storm(LoanSettlement)

Launch ofMarkitLoanSettlementplatform

Demonstrated ability for product innovation and

accretive acquisitions


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Financial overview

Attractive financial model

Markit has historically delivered consistent margins and strong revenue, adjustedEBITDA and adjusted earnings growth

Note: Financials presented under IFRS accounting guidelines. Please see Appendix for reconciliation of non-IFRS financial measures to IFRS financial measures.

$ 478.1

$ 668.4

$ 762.5

$ 860.6

$ 947.9

$208.4

$261.0$305.0

$358.2

$421.3

$115.2$144.9

$184.8$218.4

$248.4

48.1 %46.2 % 45.8 %

47.0 %45.6 %

2009 2010 2011 2012 2013

Revenue Adjusted EBITDA Adjusted Earnings Adjusted EBITDA Margin

$ million


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Our longterm objectives

Longterm financial objectives

Maintain 5-7% organic revenue growth

Overall double digit revenue growth including acquisitions

Maintain low to mid 40s Adjusted EBITDA margin %


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Investment highlights

Key investment highlights

Well positioned to address critical industry trends

Trusted partner for diversified, global customer base

Demonstrated ability for product innovation and accretive acquisitions

Attractive financial model

Founder-led experienced management team incentivised by ownership

culture


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Appendix


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174.5

214.5 217.2

46.7% 49.7% 47.3%

2011 2012 2013

373.4431.3

459.6

2011 2012 2013

Information division

Information division

Description Revenue ($m)

Adjusted EBITDA ($m) and adjusted EBITDA margin (%)

Provides pricing and reference data, indices and valuation andtrading services across multiple asset classes and geographies.Offerings used for independent valuations, research, trading, andliquidity and risk assessments

Serves buyside firms, sellside firms, exchanges, central banks,regulators, government agencies, rating agencies, researchorganisations, academics, accounting firms, consultancies,

technology and service providers, and other companies using bothdirect and third-party distribution channels

Predominantly recurring fixed fee, subscription based revenuemodel

Providesindependent pricingacross majorgeographies andkey asset classesas well asinstrument andentity reference dataproducts

Pricing &

reference data

Leading indexfranchise coveringloans, bonds, creditdefault swaps,structured financeand economicindicators

Indices

Suite of valuation &trading servicesdesigned to help ourcustomers createindependentvaluations andacquire, integrate,distribute, analyseand verify data

Valuation &

Tradingservices

Information


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128.8 124.5 138.1

56.7%52.1% 52.1%

2011 2012 2013

Adjusted EBITDA Adjusted EBITDA margin

227.3 238.8

265.3

2011 2012 2013

Processing division

Processing division

Description Revenue ($m)

Adjusted EBITDA ($m) and adjusted EBITDA margin (%)

Offers trade processing solutions globally for OTC derivatives, FX

and syndicated loans, including infrastructure for pre-trade and post-

trade support

Enables inter-dealer brokers, buyside and sellside firms, to confirm

transactions rapidly, increasing efficiency by optimizing post-trade

workflow, reducing risk, complying with reporting regulations and

improving connectivity

Predominantly recurring variable-fee revenue model

Provides end-to-end tradeprocessing and workflowsolutions to support allparticipants in OTC trading

MarkitSERV

Provides loan trade processingfor the US and Europeansyndicated loan market

Loan Settlement

Processing


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56.2

67.6

77.5

34.7% 35.5% 34.8%

2011 2012 2013

161.8190.5

223.0

2011 2012 2013

Solutions division

Solutions division

Description Revenues ($m)

Adjusted EBITDA ($m) and adjusted EBITDA margin

Provides configurable enterprise software platforms; design, hostand build websites; and end-to-end managed services

Our offerings capture, organise, process, display and analyseinformation, manage risk and meet our customers regulatoryrequirements

Broad customer base within the financial services industry and othercorporates including buyside and sellside firms, custodians, private

equity firms, wealth management firms and retail brokeragesA combination of recurring fixed-fee revenue model and softwaresales and associated services revenue

Enterprise Data Management

thinkFolio

Analytics

WSO Software

Enterprise Software

On Demand

Counterparty Manager

KYC Services

Hosted reference data

WSO Services

Collaboration Services

Corporate Actions

CTI

Managed Services

Solutions


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Financial overview

Capital allocation strategy

Dec 31st2012 ($m) Dec 31st 2013 ($m)

Bank borrowings 240.5 268.0

Share buyback 398.7 306.6

Interest free promissory note 14.5 -

Total borrowings 653.7 574.6

Cash and cash equivalents (110.2) (75.3)

Net debt 543.5 499.3

Adjusted EBITDA 358.2 421.3

Leverage (Net debt /Adjusted EBITDA)

1.52x 1.19x

Invest to grow business organically through product development and innovation Historically, have returned capital to shareholders through buybacks

Recently amended revolving credit facility to provide a 5-year term $1.05bn in size with accordionto $1.45bn

Supplement organic growth with acquisitions that we can further grow organically

Expect to fund future acquisitions primarily with debt and cash flow


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Founder-led management team incentivised by

ownership cultureManagement team has substantial experience within the industry, with an averageindustry tenure of 22 years for top 35 senior managers

NameYears

experienceTenure with

Markit

Armins Rusis

Co-Head of Information

28 Since 2008

(Board membersince 2007)

Chip CarverCo-Head of Information

28 Since 2008

Brad LevyHead ofProcessing

22 Since 2012(Board membersince inception)

Dan SimpsonHead ofEnterpriseSoftware

19 Since 2012

Michele TrogniHead of ManagedServices

26 Since 2013

Roy FlintHead of Infrastructure

29 Since 2008

NameYears

experienceTenure with

Markit

Lance Uggla

Chief Executive Officer

28 Since inception

Kevin GouldPresident

28 Since inception

Jeff GoochChief Financial Officer

26 Since 2007(Board member

since 2003)

Adam KanslerChief AdministrativeOfficer & General Counsel

21 Since 2009

(Advisor sinceinception)

Shane AkeroydHead of Sales

28 Since 2008

Stephen WolffHead of GroupCorporate Strategy

22 Since 2014(Board member

since 2009)


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Industry awards

Markitsinnovative products continue to be recognised as best-in-class (2009-2014)

Risk Management System of the Year 2014

OTC Infrastructure Service of the Year 2013

Back-Office Technology Product of the Year2013

Lifetime Achievement Award: Markit CEO, Lance Uggla2012

Industry Platform of the Year 2009

Best Company 2014

Best CDS Data2013

Best new data product2014

Best Reference Data Initiative2013

Best Evaluated Prices2013, 2012

Best Reference Data Provider2012

Best Data Provider for Derivatives2010, 2009

Best Voluntary Carbon Registry 2013

Best Registry Provider2012, 2011, 2010

Best Tradable Index2013

Best EDM Platform 2013

Most Innovative Data Provider2013

Best Data Service Provider 2012

Best Data Management Initiative 2011

Technology Development of the Year2011

Best Third Party Asset Valuation Provider 2011, 2010, 2009

Sellside Technology Provider of the Year 2014

Best Pricing / Valuation Service 2013

Best EDM for Buy-Side2013

Best EDM Platform 2013

Best Corporate Actions Service2013

Best Buy-Side Data Management Product 2012

Best TCA Provider to the Buy-Side 2012

Best Overall Product / Technology Provider2012

Best Pricing and Valuation Service2012, 2011Best Buy-Side Pricing/Valuation Service2010

Best Innovation by an ISVRegulatory Change2013

Innovation for IT: Connectivity2011

Data Vendor of the Year2013

Best New Data Service2013

Data Firm of the Year2009

European Middle Office Provider2013, 2010

Best Index Provider2013

Rising Star Index Provider 2011

UK Entrepreneur of the Year (Lance Uggla)2012

Best information and Data Vendor2014

Best Information and Data Vendor (US)2013

Data Vendor of the Year2014

/
http://www.waterstechnology.com/inside-reference-data


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Reconciliation

Reconciliation to Adjusted EBITDA

($ million)

FY 2009 FY 2010 FY 2011 FY 2012 FY 2013

Profit for the period 92.2 151.2 156.2 153.1 147.0

Income tax expense 44.4 43.8 50.6 42.7 63.7

Finance costsnet 17.2 18.2 22.9 28.9 19.4

Depreciation and amortisation 32.4 48.2 62.7 66.7 86.0

Amortisationacquisition related 5.7 28.5 34.4 46.2 50.1

Acquisition related items 5.1 (11.3) 4.8 0.9 (1.4)

Exceptional items 3.0 30.9 11.6 40.3 60.6

Share-based compensation 9.3 14.9 11.7 16.2 8.1

Other losses / (gains)net 16.5 0.1 4.6 11.6 (0.7)

Adjusted EBITDA attributable to non-controlling interests

(17.4) (63.5) (54.5) (48.4) (11.5)

Adjusted EBITDA 208.4 261.0 305.0 358.2 421.3


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Reconciliation

Reconciliation to Adjusted Earnings

($ million)FY 2009 FY 2010 FY 2011 FY 2012 FY 2013

Profit for the period 92.2 151.2 156.2 153.1 147.0

Amortisationacquisition related 5.7 28.5 34.4 46.2 50.1

Acquisition related items 5.1 (11.3) 4.8 0.9 (1.4)

Exceptional items 3.0 30.9 11.6 40.3 60.6

Share-based compensation 9.3 14.9 11.7 16.2 8.1

Other losses / (gains)net 16.5 0.1 4.6 11.6 (0.7)

Unwind of discount(1)

0.7 3.4 8.9 9.3 12.4

Tax effect of above adjustments (1.0) (14.6) (7.6) (24.1) (18.0)

Adjusted Earnings attributable tonon-controlling interests

(16.3) (58.2) (39.8) (35.1) (9.7)

Adjusted Earnings 115.2 144.9 184.8 141.2 248.4

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.


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Definitions

Revenue growth

We measure revenue growth in terms of organic revenue growth, acquisition related revenue growth and foreign currency impact on revenuegrowth. We define these components as follows:

OrganicRevenue 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 existingcustomers, price changes for our products and services and market driven factors such as increased trading volumes or changes in customerassets under management.

Acquisition relatedRevenue growth from acquired businesses through the end of the fiscal year following the fiscal year in which theacquisition was completed. This growth results from our strategy of making targeted acquisitions that facilitate growth by complementing ourexisting products and services and addressing market opportunities.

Foreign currencyThe impact on revenue growth resulting from the difference between current revenue at current exchange rates and currentrevenue at the corresponding prior period exchange rates.

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 revenueRevenue generated from contracts specifying a fixed fee for services delivered over the life of the contract. The fixedfee is typically paid annually, semiannually or quarterly in advance. These contracts are typically subscription contracts where the revenue isrecognised across the life of the contract. The initial term of these contracts can range from one to five years and usually includes auto-renewalclauses.

Recurring variable revenueRevenue derived from contracts that specify a fee for services which is typically not fixed. The variable fee istypically paid monthly in arrears. Recurring variable revenue is based on, among other factors, the number of trades processed, assets undermanagement or the number of positions we value. Many of these contracts do not have a maturity date while the remainder have an initial termranging from one to five years.

Non-recurring revenueRevenue that relates to certain software license sales and the associated consulting revenue.

Other Non-IFRS Measures

Adjusted EBITDAis defined as profit for the period from continuing operations before income taxes, net finance costs, depreciation andamortisation 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 EBITDAis 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 relateditems, exceptional items, share-based compensation, net other gains or losses and unwind of discount, less the tax effect of these adjustmentsand excluding Adjusted Earnings attributable to non-controlling interests.

Adjusted EPS diluted is defined as Adjusted Earnings divided by the weighted average number of shares issued and outstanding, diluted.


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minesdata,

poolsintelligence,

surfacesinformation,

enablestransparency,buildsplatforms,

providesaccess,

scalesvolume,

extendsnetworks,& transforms business.

Documents

DB Technology Conference Markit CEO Presentation Final 9-9-14 v001 r0fn7m