REUTERS GROUP PLC ANNUAL REPORT AND ACCOUNTS 1999

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TO FIND OUT MORE VISITwww.reuters.com/Reuters Information (RI) is responsible for thedevelopment and sale of information products forprofessionals in financial institutions and their clients.Brad Rickerby/ReutersTom Glocer, Chief ExecutiveReuters Information.99 98 97Revenue 1,619 1,531 1,477Cost (1,366) (1,373) (1,320)Contribution 253 158 157Margin 16% 10% 11%Employees 9,239 9,306 8,863The division’s broad product rangeextends from full service information andsoftware applications for traders in thedealing room, brokers and investmentmanagers, through to internet-deliveredsolutions linking financial professionalsto their clients. 3000Xtra launched in1999 is our new flagship professionalproduct exploiting the latestdevelopments in applicationstechnology.RI had a successful year financially in1999 showing good profit growth againsta background of revenues building moreslowly. As described below, we aremaking the investments we believe areneeded to grow our business in theyears ahead.The professional financial market issegmenting into two groups: a moremature, upper segment of around amillion users expanding at single-digitgrowth rates; and a larger enterprisewidemarket with faster growth in usersand revenue. RI is well positioned inboth these segments. In 1999 thenumber of users of the upper tier 3000product line grew to 71,000 and thenumber of off-trading floor users grewto just short of 100,000.The market consisting of the clients(both individual and institutional) offinancial professionals is expanding evenmore rapidly. In close co-operation withthe Reuters Trading Solutions division(RTS), we offer a variety of solutions toenable financial professionals to deliverReuters content to their clients.We have announced a major investmentprogramme costing £500 million toaccelerate the transformation of RI’sbusiness to an IP-based, e-commercemodel. This investment includes areorganisation charge of £300 millionover the next two years and a further £50million per annum over four years todevelop e-architecture. This migrationwill be facilitated by the recentlyannounced joint venture with Equant tocreate a business-to-business IP network.Through these investments, we expectto expand our customer base by offeringnew products at more price points,delivered and supported through a lowercost infrastructure. We will also workclosely with RTS and Reuterspace tobuild loyal communities of users offinancial information and applications.We are excited about the challengeahead of us and believe we have thepeople, skills and resources to succeed.10 Reuters Group PLC Annual Report 1999
TO FIND OUT MORE VISITwww.reuters.com/Reuters Trading Solutions. Reuters financial customersare increasingly looking for global solutions to theirinformation and technology needs as they face thechallenges of a rapidly changing business landscape.Mark Baker/ReutersPhilip Green, Chief ExecutiveReuters Trading Solutions.99 98 97Revenue 780 827 800Cost (550) (541) (524)Contribution 230 286 276Margin 30% 35% 35%Employees 4,105 3,887 3,870They are establishing new business modelsand adapting them to the Internet.Reuters believes it is uniquely placed toprovide total solutions and support forits customers across the world. ReutersTrading Systems is renamed ReutersTrading Solutions (RTS) to reflect this.The division’s mission is to become aglobal leader in technology, knowledgeand related services, enabling customersto maximise performance in the evolvingfinancial community.RTS encompasses two businesselements: Solutions and Transactions.The level of service will be extended bythe formation of a Reuters Consultinggroup, tasked with developing andimplementing customer solutions basedon Reuters technology products.Reuters believes the solutions businessto be a growth market as customers lookfor assistance in reaching and retainingtheir own clients through electronicmeans and increasing internal efficiencythrough straight-through-processing.The Solutions business is subdivided intotwo main elements: Applications andEnterprise Solutions and Retail Solutions.Applications and Enterprise Solutionsinclude the software infrastructurebusiness, which provides sophisticatedsoftware for the enterprise-widedistribution of real-time information andorder flow data within customerorganisations, and for pre- and posttraderisk management applications.Progress in 1999 was affected by thereluctance of customers to install newsystems at the beginning of the yearbecause of the euro and the millenniumrestrictions on project implementation inthe second half of the year.Retail Solutions focuses on enablingReuters customers to better serve theircustomers via the Internet. This rangesfrom efficiently gathering order flowinformation from individuals buyingsecurities, through to building andproviding information content forinternet portals.The Transactions group comprisesMoney/Foreign Exchange and SecuritiesTransactions. Its objective is to focus ondeveloping and maintaining efficientbusiness-to-business transactioncommunities with managed services acrossthe full range of financial instruments.Foreign exchange trading remains avaluable and profitable business forReuters although the market hascontracted, trading volumes havedeclined and there has been a shift awayfrom traditional instruments such as spotFX to more complex ones. Reutersrecently launched Dealing 3000, the newgeneration of Reuters Dealing products,as a first step towards meeting thedemands of the changing market.Reuters Group PLC Annual Report 1999 11
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17. Stocks1999 1998 1997£M £M £M
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26. Capital and reservesPROFIT ANDC
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29. Employee share option plansReut
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Balance sheet of Reuters Group PLC
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Accounting policiesAccounting basis
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Summary of differences between UK a
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38. Adjustments to shareholders’
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1999 1998H1 H2 FY H1 H2 FYCosts £M
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1999 1998Net assets £M £MReuters
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Where to find usCorporate headquart
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