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(No Transcript)
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Peter JobChief Executive
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Reuters in the Internet age 8th February 2000
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Reuters vision
Reuters will makefinancial markets reallywork
on the internet.
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Electronic trading value chain
Reuters
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Redefining our potential audience

• Audience Revenue Brand Current How size growth d
  evelopment reach millions potential
• Professional 1.1 ? ? Reutersfinancial networ
  k
• Retail 65 ?? ? ? Internet /financial intranet
  s
• Consumers 125 ?? ? ? Internetat work /B2B market

Source Reuters estimates of potential audience
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Reuters structure

• Reuters Financial information, transaction and
  solution products for the global financial
  community
• Reuters Instinet complements Reuters vision to
  help remodel financial markets world-wide
• Reuterspace extending Reuters skills into new
  markets outside the financial sector

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Reuters Financial
ReutersFinancial
Million
RTS RI
1999 results
Revenue
Contribution
EBITDA
EBITDA numbers include Reuterspace and RBB and
exclude TSI and Instinet EBITDA. Divisional
EBITDA is not published.
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News from Reuters
ReutersFinancial

• New business model for the internet
• Cross geographic boundaries
• Low cost infrastructure
• Products at more price points
• Raise margins

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Segment profitability
ReutersFinancial
Product margin
High tier
Low tier
Note taken from existing client case studies
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News from Reuters
ReutersFinancial

• New business model for the internet
• Cross geographic boundaries
• Low cost infrastructure
• Products at more price points
• Raise margins

• Expect 5-10 market growth in professional
  financial markets

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From systems to solutions
ReutersFinancial
Million
379m

• Historically slowed down by EMU / Millennium
• Double-digit compound annual growth forecast

1999 results
Systems Revenue
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Transactions - FX
ReutersFinancial
Weekly D2000-1 conversations '000s
Daily D2000-2trades '000s
July
Aug
Sept
Oct
Nov
Dec1999
Jan2000
Note figures are seasonally adjusted
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Management and organisation
ReutersFinancial

• Simpler organisation
• Reduce layers of management
• Better visibility of business segments
• Faster decision making
• Focus development centres
• Sharpen marketing skills for the internet

• Remodelling the cost base

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New venture with Equant
ReutersFinancial
Reuters
Equant
Newco

• Creates communication business
• Aids move to IP and reduced costs

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Reuters Financial cost savings
ReutersFinancial
To become an Internet company

• Costs over next four years of 500 million
• Including one-off costs of 300 million over next
  two years

• Resulting cost savings 150 million a year in
  2002 (relative to 1999 cost base)

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Reuters Instinet
ReutersInstinet
Million
525m
1999 results
164m
129m
Revenue
Contribution
EBITDA
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News from Instinet
ReutersInstinet

• Investment plans of 130 million this year
• Forthcoming entry to US retail market
• New fixed income trading product
• Joint venture serving market for IPOs
• Strategic options including IPO under
  consideration

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Reuterspace
Reuterspace
Reuterspace
ReutersFinancial
B2C
B2B
Reuterspace
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The internet plays to our strengths
Reuterspace

• It brings the world to real-time
• It demands facts from a trusted brand
• Established presence on the Internet

• Launch differentiated financial portal
• Unique assets
• User base in tens of millions

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E-commerce requirements
Reuterspace

• News Wealth Health Sports Politics Economics Multi
  -language character
• Presentation Figures Text Pictures Video Graphics
• Added-value Research Opinion Appraisal Historical
  Specialist Mutual Advice database database cr
  edit
• Applications Trans- Risk Order Account actions ma
  nage- entry overview ment
• Infrastructure Security ISP Tibco Person- Enabling
  portal alisation mobile software software s
  oftware

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News from Reuterspace
Reuterspace

• 50/50 joint venture with Multex to establish
  service giving European private investors access
  to broker research and Reuters data
• Target 2-3 million members in 2 years
• Reuters investment 30 million

• 40/60 joint venture with Aether Systems to become
  major wireless application services provider to
  enterprises in Europe
• Reuters investment 22 million plus relevant
  assets

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Greenhouse fund
Reuterspace

• Segment Private Public Names
• E-commerce 9 2 US Web, Sports.com
• E-markets 4 1 Edgar Online
• Mobile 1 1 phone.com
• Navigation 6 3 Yahoo!, Go.com, Star Media
• Performance 4 2 Persistence, Fantastic
• Security 2 3 VeriSign, Intertrust, Digimarc

• Larger investments
• More e-commerce investments

Note Holdings as at 31/12/99
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Value considerations
Billions
13.2 Bn
OtherGreenhouse Tibco
4.3 Bn
Reuters marketcapitalisation
Quoted marketvalue
All values as at 31/01/00. Tibco value shows
Reuters shareof the economic interest on a fully
undiluted basis.
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Reuters in the Internet age