Strategic report Governance Financial statements Other information GLOSSARY OF ALTERNATIVE FINANCIAL PERFORMANCE MEASURES Measure Calculation Why we use this measure Activity costs Total cost related to stockbroking and financial services costs on a transactional basis Provides further detail into the increasing costs that are associated with increasing related to the volume of activity undertaken by our clients. This measure is the same as client numbers and increasing transactional revenues, to allow comparison from year the dealing and financial services costs within note 1.3. to year Dividend pay-out ratio (%) The totaldividend per share divided by the earnings per share (EPS) for a financial year. Provides a measure of the level of profits paid out to shareholders and the level retained in the business. Dividend per share (pence per share) Total dividend payable relating to a financial year divided by the total number of shares Dividend per share is pertinent information to shareholders and investors and provides eligible to receive a dividend. Note ordinary shares held in the Hargreaves Lansdown them with the ability to assess the dividend yield of Hargreaves Lansdown plc shares. Employee Benefit Trust have agreed to waive all dividends. Ongoing revenue Revenue that is received every month depending on the value of assets held on the We believe ongoing revenue provides greater profit resilience and hence is of higher platform, including platform fees, management fees and interest earned quality than transactional revenue. on client money. Operating profit margin Profits after deducting operating costs but before the impact of finance income and Provides a measure of profitability of the core operating activities and excludes other gains or losses divided by revenue. non-core items. Percentage of ongoing revenue (%) The total value of renewal commission (after deducting loyalty bonuses), platform fees, Provides a measure of the quality of our earnings. We believe ongoing revenue provides management fees and interest earned on client money divided by the total revenue. greater profit resilience and hence is of higher quality than non-ongoing revenue. Revenue margin (bps) Total revenue divided by the average value of assets under administration which Provides the most comparable means of tracking, over time, the margin earned on the includes the Portfolio Management Services assets under management held in funds assets under administration and is used by management to assess business performance. on which a platform fee is charged. Revenue margin from cash (bps) Revenue from cash (net interest earned on the value of client money held on the Provides a means of tracking, over time, the margin earned on cash held by our clients. platform divided by the average value of assets under administration held as client money). Revenue margin from funds (bps) Revenue derived from funds held by clients (platform fees, initial commission less Provides the most comparable means of tracking, over time, the margin earned on loyalty bonus) divided by the average value of assets under administration held as funds held by our clients. funds, which includes the Portfolio Management Services assets under management held in funds on which a platform fee is charged. Revenue margin from HL Funds (bps) Management fees derived from HL Funds (but excluding the platform fee) divided Provides a means of tracking, over time, the margin earned on HL Funds. by the average value of assets held in the HL Funds. Revenue margin from shares (bps) Revenue from shares (stockbroking commissions, management fees where shares Provides a means of tracking, over time, the margin earned on shares held by are held in a SIPP or ISA, less the cost of dealing errors) divided by the average value our clients. of assets under administration held as shares. Third party data and technology costs Costs associated with the use of third party software and data feeds used in the Provides a means of understanding the impact that increasing or changing our performance of daily business. The measure is the same as data and technology costs proposition has on our costs. within note 1.3 182 Hargreaves Lansdown Report and Financial Statements 2021