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Investor Factsheet - Xchanging

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									Xchanging investor snapshot
                                                                                                                                 Inspiring Innovation
Xchanging was established in 1999 and listed on the London Stock Exchange                                                                                  r
in 2007. Headquartered in London, Xchanging employs over 7,500 staff                                                                                       f

servicing customers in 42 countries.

What we are                                   What we do                                 What we want to be
Xchanging provides business                   Xchanging brings innovation,               Xchanging wants to be regarded
processing, technology and                    thought leadership and passion to its      as the best provider in its chosen
procurement services internationally for      customers’ businesses so as to enhance     markets by delivering services that
customers across multiple industries.         performance and value. Our values are      are recognised for outstanding quality,
                                              embedded into everything we do.            reliability and innovation.


Business Processing                           Technology                                 Procurement




Financial highlights continuing operations                  2011                  2010   Strengths
                                                                                         In competing to win, we have six
Adjusted revenue                                         £650.0m            £681.8m      core strengths that differentiate our
Adjusted operating profit                                  £43.2m            £56.1m      service offerings:

Adjusted operating margin                                   6.6%                  8.2%   Domain expertise
                                                                                         We combine functional and technology
Adjusted basic earnings per share                      8.01pence          12.30pence     expertise with deep industry domain
                                                                                         knowledge.
Operating cash flow                                        £35.9m            £49.9m
                                                                                         Complex and critical processes
Equity free cash flow                                      £21.3m            £33.8m      Management of complex and critical
                                                                                         processes takes a major burden away
Net cash                                                   £45.2m            £33.5m
                                                                                         from our customers.
                                                                                         On-near-offshore
Key management                                                                           Strength in delivering the right balance
                                                                                         of onshore, near-shore and offshore
Geoff Unwin                                                                Chairman      resources for each individual customer.
Ken Lever                                                     Chief Executive Officer    Adaptability
                                                                                         We blend business processing and
David Bauernfeind                                              Chief Financial Officer   technology into a bundled offering that
                                                                                         delivers enhanced solutions.
                                                                                         End-to-end services
Market trends
                                                                                         Our end-to-end capability allows a
Against a backdrop of an uncertain economic environment the overall market
                                                                                         much wider range of organisations to
for business processing and technology services continues to offer opportunities.        utilise the full benefits of outsourcing.
                        Customer requirements         Our offering                       Corporate values
                                                                                         We take our values very seriously and
Developed               Reducing costs                Procurement services/              seek to embed them in everything we do.
world                                                 back-office transformation
                                                                                         Share information
Developing              Business processing           Competitive
                                                                                         Ticker code                                               XCH
world                   as a service                  strength in India
                                                                                         Sector                                Business Support Services

Overall                 Technology-enabled            Processing ‘as-a-service’          FTSE Index                                       FTSE All Share

                        value-added solutions                                            Shares in issue                                        239.1m




Key facts                                                                                Contact details
                                                                                         Alexandra Hockenhull
• In 2011 we handled over 1 million claim notifications for Lloyd’s of London            Head of Corporate Communications and Investor Relations
  and international insurance markets with an incurred value of £13.4 billion.           Tel: +44 20 7780 6999
                                                                                         investor.relations@xchanging.com
• Our technology handles 97% of the world’s non-ferrous metals trading.                  www.xchanging.com
• We manage 20% of the UK’s outsourced indirect spend, making us the                     Download the Xchanging plc
  second largest provider in the UK.                                                     IR app from the iTunes Store
Business model

Sector
                                             Business Processing                                                               Technology                                                                          Procurement



Service                                      Insurance Services        Financial Services            Other                     Infrastructure              Software                      Application               Sourcing                                   P2P
                                                                                                                               Management                                                Management
                                                                                                                               Services                                                  Services
What we do                                   • Policies and            • All aspects of              • Wide range of           • Comprehensive,            • Insurance specific          • Comprehensive           • Knowledge-based,                         • Process and
                                               premiums, and claims      securities processing         business processes        flexible infrastructure     software                      application               establishing supplier                      transaction-based
                                               handling for Lloyd’s    • Investment account            across many               and outsourcing           • Genius.X – Property           management and            framework and contracts                  • Optimisation of payment
                                             • Own intellectual          administration                industries                solutions                   and Casualty market           testing services        • Cost savings, policy                       process to achieve savings
                                               property                • Fund administration         • Offshore capabilities   • Includes bundled and      • Iris.X – Lloyd’s,           • Offshore capabilities     compliance and                             and efficiencies
                                             • Premiums, claims          and portfolio                                           consumption-based           London Market                                           efficiency benefits                      • Streamline back-office
                                               and other processing      management                                              services                    and international                                     • Administration support                     operational interaction
                                               and handling for        • Offshore capabilities                                                               reinsurance                                             for category managers                      with suppliers
                                               commercial insurance                                                                                          underwriters                                                                                     • Supplier data management
                                               brokers                                                                                                     • Elgar.X – International                                                                            and reporting to improve control
                                             • Workers’                                                                                                      reinsurance
                                               compensation                                                                                                • Brokasure.X – Full
                                               administration                                                                                                insurance life-cycle
                                               services in Australia                                                                                         processing
                                             • Offshore capabilities
Market growth 2010-2015                      5 – 10%                   5 – 10%                       5 – 10%                   > 10%                       > 10%                         > 10%                     > 10%                                      > 10%
Market profitability                         > 10%                     > 10%                         > 10%                     5 – 10%                     5 – 10%                       5 – 10%                   > 5%                                       > 5%
Capital intensity                            Medium                    Medium                        Medium                    Medium                      High                          Medium                    Low                                        Medium
Revenue model                                • Gainshare               • Annuity/retail              • Transaction-based       • Project-based             • Licence fee                 • Project-based           • Gainshare                                • Fixed fee
                                             • Cost plus               • Project-based               • Time and materials      • Annuity                   • Project-based               • Time and materials      • Annuity                                  • Transaction-based
                                             • Largely annuity         • Cost plus                   • Project-based           • Time and materials        • Maintenance fees            • Fixed fee               • Advisory                                 • Annuity
                                             • Transaction-based       • Transaction-based                                     • Fixed fee
                                                                       • Time and materials
Competitive position                         • Domain expertise        • Domain expertise            • On/near/offshore        • Critical technology/      • Niche                       • Transaction-based       • Expertise                                • Flexibility (type of service)
                                             • Intellectual property   • On/near/offshore              service delivery          national or core          • Intellectual Property       • Flexibility             • Flexibility (type of service)            • Expertise
                                             • On/near/offshore          service delivery                                        infrastructure                                          • Horizontal offering
                                               service delivery                                                                • Flexibility
                                                                                                                               • Niche
Growth drivers                               • Corporate change                                                                • Technical cycle                                                                   • Increasing adoption rate – size and term reductions
                                             • Market maturity                                                                 • Corporate change                                                                  • Cost reduction
                                             • Offshore platform                                                               • Everything-as-a-service                                                           • F&A outsourced decision
                                                                                                                               • Geographic expansion




Performance by segment                                                                                                         Foundation for growth                                                               2012 Objectives – build on our strengths
                                          2011                                                   2010
                                                                                                                               We are building the foundation for growth                                           These are the simple objectives we are setting
                                      Adjusted          Adjusted                             Adjusted            Adjusted
                                                                                                                               around the service offerings in each of our                                         for 2012 to build on our strengths.
                          Adjusted   operating         operating         Adjusted           operating           operating      business sectors where we have a strong                                             Compete to win
                           revenue       profit          margin           revenue               profit            margin
                                £m         £m                 %               £m                  £m                   %
                                                                                                                               competitive position, demonstrable experience                                       Increase revenue from existing customers
                                                                                                                               and customer endorsement and where we
Insurance Services           189.0        36.6               19.3           179.8                 33.4               18.6                                                                                          Achieve ‘One Xchanging’
                                                                                                                               consider we are best in class.
Financial Services           179.8        12.3                6.8           174.2                 11.2                 6.4                                                                                         Year-on-year improvement in financial performance

Technology                    97.9         7.0                7.2           116.2                 17.3               14.9      Insurance                          Develop BPaaS around software platform
Procurement                  183.3         7.2                3.9           211.6                 11.1                 5.3     Financial Services                 Back office transformation
Corporate                        –       (19.9)                  –               –               (16.9)                   –    Technology                         Complex processing and critical technology
Total                        650.0        43.2                6.6           681.8                 56.1                 8.2     Procurement                        Gain share, P2P, entry level consulting                                                                             Inspiring Innovation
                                                                                                                                                                                                                                                                                                             ro
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