London Stock Exchange Preliminary Results 19 May 2005

London Stock Exchange Preliminary Results 19 May 2005

Agenda Introduction Chris Gibson-Smith Chairman Financial Review Jonathan Howell Director of Finance CEO Overview Clara Furse Chief Executive Officer Q&A 2

Introduction · 4% growth in gross turnover · Total dividend payout up 26% to £ 18 m · Confident we will deliver value to shareholders 3

Jonathan Howell Director of Finance

Overview of results 5

Overview of results (continued) 6

Issuer Services New issues more than double previous year Turnover down 9% · New issues up from 236 to 514 of which: £ 38. 5 m £ 35. 2 m £ 16. 8 m £ 17. 8 m £ 21. 7 m Key metrics £ 17. 4 m – Main Market – 82 (2004: 43) – AIM – 432 (2004: 193) · Annual Fees represented 49% of Issuer Services turnover (2004: 56%) · 2, 916 companies (2004: 2, 693) including 1, 127 on AIM 7

Broker Services SETS continues to drive growth Turnover up 6% £ 94. 1 m £ 34. 3 m £ 59. 8 m £ 99. 8 m £ 33. 8 m £ 66. 0 m Key metrics · Average daily equity bargains up 16% to 271, 000 – order book bargains up 24% to 170, 000 per day – off book bargains down 16% to 48, 000 per day – international bargains up 30% to 52, 000 per day · Average SETS bargain size £ 21, 000 (2004: £ 22, 000) and average SETS yield down to c£ 1. 50 · SETS contributed 66% of Broker Services revenue 8

Information Services Increase in professional terminals Turnover up 9% £ 101. 0 m £ 7. 2 m £ 13. 3 m £ 80. 5 m £ 110. 3 m Key metrics · Terminal population 95, 000 (2004: 90, 000) · Professional investor terminals at 83, 000 (2004: 80, 000) · SEDOL turnover c£ 6 m · RNS turnover £ 7. 5 m (2004: £ 7. 2 m) · FTSE JV – share of turnover £ 15. 3 m (2004: £ 13. 3 m) £ 7. 5 m £ 15. 3 m £ 87. 5 m 9

Derivatives Services Core business steady Turnover up 11% £ 6. 8 m £ 6. 1 m £ 27. 1 m £ 16. 6 m Key metrics · 18. 3 m contracts traded (9 months to 31 March 2004: 13. 7 m) · Average daily contracts traded 73, 000 (9 months to 31 March 2004: 72, 000) 10

Operating costs 65% · Depreciation up £ 9 m £ 155. 8 m 1 Cost/income 66% £ 164. 4 m · IT costs down £ 1. 4 m £ 21. 9 m £ 30. 9 m · Staff costs up £ 3 m £ 40. 8 m £ 39. 4 m · Property/marketing/other costs down £ 2 m £ 44. 5 m £ 47. 5 m £ 48. 6 m £ 46. 6 m · Year end headcount of 519 (2004: 522) 1 before exceptional costs and goodwill amortisation 11

Summarised Cash Flow Continued strong cash generation 12

Summarised balance sheet 13

IFRS Summary of impact on 2004/05 • The impact of IFRS on PBT, EPS and net assets for 2004/05 financial year is estimated as follows: 1 before goodwill and exceptional items 14

Track Record Significant growth over 5 years 1 Operating profit (£m) CAGR 9% Net turnover (£m) CAGR 7% 188 207 226 237 81 244 83 82 71 3. 4 58 5. 0 1 1 before exceptional costs and goodwill amortisation 15

Track Record Continuous improvement in Adjusted EPS and Dividend per Share Adjusted EPS (p) Dividend per share (p) CAGR 12% CAGR 22% 7. 0 23. 5 20. 8 21. 2 18. 3 4. 8 4. 3 15. 2 3. 2 2. 2 1. 0 3. 6 2. 5 3. 0 5. 0 3. 4 2. 5 1. 1 1. 3 1. 4 2. 0 16

Current trading • Since year-end trends remain positive: — Good new issue activity on Main Market and AIM — Trading volumes on SETS have continued strongly — Professional terminals up from year end 17

Clara Furse Chief Executive Officer

Introduction Overview • London — the leading international equity market • Good customer relationships drive growth • New trading strategies improve market efficiency • Our technology leads • We are well positioned for the future 19

Operational milestones A few of last year’s highlights • First increase in professional terminals in 3 years • 1, 000 th company on AIM • Average total bargains/day exceed 300, 000 • Average SETS bargains/day exceed 200, 000 20

London Leading international equity market • Rigorous but intelligent approach to regulation • Regulatory regime provides integrity — foundation for growth • World leading corporate governance 21

UK Corporate Governance regime Leading standards Source: Governance Metrics International March 2005 22

Improving market efficiency Virtuous Circle 23

Our market Europe’s capital raising centre - 80% of Western European IPOs Share of Western European IPOs 24

UK equity trading SETS – growth driver 25

Broker services Strong SETS volumes 26

Narrower spreads Reducing implicit costs 27

Strong relative growth A conspicuous success story 26% 17% 16% 13% -13% -7% -9% -6% -9% -15% -25% Source: FESE monthly statistics 28

Technology Roadmap Leadership in technology driving market change • Current trading platform supports choice of market structure and product • TRM will deliver a radical shift • A combination of lower operating costs, cheaper capacity upgrades, and simpler diversification 29

Issuer Services Continued growth in Market and AIM new issues 52 248 184 30 25 117 76 18 30

Issuer Services Record growth on AIM 31

Success of SETSmm Extending the Virtuous Circle Average daily bargains in SETSmm securities 32

Information Services Pick up in terminal numbers 33

Information Services New initiatives support growth • Proquote — Up 50% to c 2, 700 screens (31 March 2004: 1, 800) — Proquote International launched in April 2005 • SEDOL — Over 1, 000 licences — Number of securities doubled from 225 k to 450 k • RNS — Over 90 FTSE 100 companies using RNS • FTSE — Ninth consecutive year of turnover growth 34

Derivatives Services Steady progress • Expanded product offering – Finnish derivatives • OTC clearing service launched • Steady growth in covered warrants 35

Summary • Core business growing as market quality improves • Delivering growth through: — Increasingly productive customer relationships — Technology that is “best in class” — An ever more Virtuous Circle • A successful business model well positioned for future growth 36

Q&A