2023 Preliminary Results
29 February 2024
David Schwimmer, CEO said:
“2023 was another strong year for LSEG. We continued our track record of broad-based growth, despite an uncertain environment, and delivered on all the targets we set at the time of the Refinitiv acquisition. We also significantly improved our products and services, further strengthened our leadership team and made great progress on creating a high-performance culture throughout the organisation.
“We continue to build the foundations for sustained, profitable growth across all of our businesses. In Data & Analytics, customers will shortly be using the first products from our partnership with Microsoft: together, we will transform how financial markets participants communicate, research, analyse data and trade. In Capital Markets, we are collaborating more extensively with Tradeweb, creating new avenues for growth. We are also seeing an encouraging IPO pipeline for the London Stock Exchange. Our Post Trade business is in the early phase of its next stage of growth, helping financial institutions manage risk and improve capital efficiency across the whole trading book.
“We look forward to further progress in 2024. Our model – global, multi-asset class, and operating across the entire trade lifecycle – is proven to thrive regardless of market conditions, and we will continue to invest to deliver the best possible services for our customers and returns for our shareholders.”
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2023 highlights - Continued strong performance: accelerating growth, significant strategic progress, substantial returns to shareholders
Note: (all growth rates are expressed on a constant currency basis, unless otherwise stated)
- Total income (excl. recoveries) up 8.3%; up 7.7% excluding the Acadia acquisition, towards the upper end of 6%-8% guidance range
- Broad-based growth: Data & Analytics +7.3%, Capital Markets +6.1%, Post Trade +17.4%
- Good profitability: adjusted EBITDA up 8.6%. Excluding impact of FX-related items, EBITDA margin of 47.7%, consistent with guidance
- Adjusted operating profit: up 7.9% reflecting strong EBITDA growth slightly offset by faster recognition of depreciation
- Continued adjusted earnings growth: adjusted EPS +1.9% to 323.9 pence; basic EPS -2.0% (both at actual FX rates)
- Highly cash generative: £1.8 billion equity free cash flow, 100% cash conversion
- Successful integration and accelerated performance of Refinitiv: 2021-2023 organic total income (excl. recoveries) CAGR of 6.5%1 at the upper end of acquisition targets
- Medium-term guidance set out at the Capital Markets Day further raises growth aspiration: targeting mid-to-high single digit organic growth annually, accelerating after 2024
- Attractive acquisitions: Acadia reinforces our leading position in Post Trade Solutions; acquired full ownership of LCH SA; increased ownership of LCH Group
- Good progress on Microsoft partnership: first products expected in H1 2024, embedding AI technologies and revolutionising industry workflows
- Significant shareholder returns: final dividend +5.3%, taking full year payout to 115 pence; £1.2 billion returned via buybacks in 2023; plan to execute up to £1 billion of buybacks in 2024, with intention to acquire this directly from the Blackstone/Thomson Reuters consortium
1Organic, constant currency income (excl. recoveries) growth, excluding deferred revenue accounting adjustment in 2021 and 2022, and the impact of Ukraine/ Russia war in 2022
LSEG 2023 Preliminary Results presentation
LSEG hosted a presentation and conference call for its 2023 Preliminary Results for analysts and investors on 29 February 2024 at 10:00am (UK time). The presentation was hosted by David Schwimmer (Chief Executive Officer), Anna Manz (Chief Financial Officer) and Peregrine Riviere (Head of Investor Relations). View a replay below.
(upbeat music)- Good morning and welcome to our 2023 financial results.It's great to have people here in Paternoster Square,and welcome to those who are joining us online.I am here with Anna,and we are also joined by Michel-Alain or MAPas he's widely known,who has joined us this week as our new CFO.We have had a very good 2023.We delivered at the top end of our growth guidancefor the year and have compounded organic growth at 6.5%over the last three years.We also accelerated within 2023, exiting the yearwith organic growth at 8.5% in Q4.So this is a great setup as we head into 2024.I'm pleased to say that we've metor exceeded all of our Refinitiv acquisition targets,which Anna will talk you through in a moment.Cash generation was very strongwith all of our profit converted to cash.This means we can invest in growth and our platformand still have significant excess capitalto return to investors.You have seen us do this with over a billion poundsof buybacks in the past year,and further growth in our dividend announced today.At our Capital Markets state in November,we set new upgraded targets for growthwith an acceleration over the medium term.I'll give more detail on our progressand our plans in a few moments.First though, let me hand over to Anna to take youthrough our 2023 financial performance.- Thanks David and good morning.2023 marked the end of our initial guidance periodfollowing the Refinitiv acquisition,and I'm pleased to say that thanksto a strong track record of performance,we've beaten all of our acquisition targets,we've delivered good cash generationand have been active in our approach to capital allocation.Looking forward, we are confident in our deliveryof our upgraded medium term guidance.So let's start with the performanceagainst our three year Refinitiv acquisition targets.Income growth has been consistently at the upper endof our 5 to 7% rangeand our organic growth has acceleratedthrough the period from 6.1% in 2021to 7.1% in 2023.Excluding the impact of the Ukraine/Russia conflict,a three year organic income CAGR was 6.5%.Our 2023 margin on a like for like basisand that's reflecting a constant perimeter from the timethat guidance was set was 50.3%ahead of our guidance of a 50% exit run rate.There's a bridge in the appendix which walks youthrough the perimeter changes.These changes strengthen our business for the future.Turning to revenue synergies,here, we're on track to deliveragainst our upgraded targets.For 2023, we aim to double the prior year run rateof 68 million.In fact, we've significantly exceeded that,exiting the year at a run rate of 158 million.Our cost synergy program is largely completewith a bit more to come in 2024.We are well ahead of the upgraded targets with a run rateof 442 million.In short, we've delivered against allof our acquisition targets.Now for the rest of this presentation,I will as usual focus on constant currency growth rates,and you can see the strengthof our 2023 performance on this slide.Total income excluding recoveries rose up by over 8%and EBITDA was up nearly 9%.Depreciation and amortization was up about 11%.There's two drivers of this.Firstly, we've continued to invest at a high level,and secondly during 2023,we've embedded a more agile product engineering culture.And this means we're delivering productto our customers faster in regular releasesand we're starting to depreciate earlier.This accelerated depreciation in 2023and will have a further impact in 2024.Growth in adjusted operating profit was about 8%,fairly consistent with EBITDA growth.Turning to the lower half of the P&L on the next slide.Our finance expense includes 30 millionof FX losses mainly relatedto the group's funding arrangements.Previously, these FX movements were includedin operating expense and this changes to bring us in linewith best practice disclosure.16 million of the 30 million relates to the first half,which at the time was reported in OpEx.Our effective tax rate has gone up 2.2 percentage pointsfrom last year, and that reflectsthe higher UK corporate tax rate in place from April, 2023.Tradeweb and LCH performed strongly in the yearand this has resulted in higher profit attributableto non-controlling interests.The combination of depreciation, FX impacts,and higher tax has impactedour EPS performance relative to EBITDA.All our divisions grew well.Data & Analytics grew 7.3% with higher pricing,improved retention and stronger sales.Capital Markets grew 6.1% with good growth at Tradeweb,partly offset by market driven weakness in equities and FX.Post Trade had an exceptional year up 17%as interest rate uncertainty drove strong client demandfor our SwapClear services,and there was also a contribution from M&A.Let's start with Data & Analyticswhere all of our businesses performed well.Trading and banking grew over 3% this yearor two and a half percent organically.We've turned around a business that have been in declinefor over a decade,to one achieving consistent, solid growthfor the last two yearsand we continue to get better and better feedbackon Workspace as David will cover later.This improved product delivered better price realizationand higher retention.Enterprise Data grew strongly up over 9% drivenby demand for our proprietary real-time data.Within Investment Solutions,subscription revenues have acceleratedand we've seen double digit growth this year.Improved sales execution is drivinga better customer experienceand helping us meet the strong demandfor our core benchmark products.We also saw a recovery in asset based revenues over the yearwith Q4 up 11%.Asset under management at year end were 23% higherthan December, 2022.Wealth was up 4% driven by digital solutionswhere we have seen sustained demand for data feeds.Customer and Third Party Risk grew 16%.World check continued to show excellent growth benefitedfrom both regulatoryand reputational risk management tailwinds.Turning to ASV.ASV growth continues to be good evidenceof the improvements we're making in our business.Subscription revenues in Data & Analyticsare growing nearly 4% faster thanwhen we acquired Refinitiv.ASV growth was 6.7% at the end of the year.As we saw over the course of the year,this metric will fluctuate from quarter to quarter,so while it remains indicative of future growth,it won't always perfectly align.The 6.7% in December includes a small impactof Credit Suisse with some more to comein the first half of 2024.We continue to monitor our sales metrics closelyand they remain strongand David will talk more about that in a minute.Turning to Capital Markets, we grew 6.1%.Equity revenues declined due to market conditionsas 2023 was a pretty weak year globally for equities.In FX, market volumes were also weaker impacting activityacross both FXall and matching.In fixed income, Tradeweb, which drives two thirdsof our Capital Markets revenues,saw record transaction volumes in both rates and credit.Variable fees per million were lower due to product mixand a skew towards shorter duration instruments.So overall revenue growth was a bit behind volumesbut still very strong and accelerating in the second half.Our Post Trade business deliveredan exceptional performance up 17%.Interest rate volatility drove strong client demandfor SwapClear servicesand that was the primary driverof the organic growth in OTC derivatives.In addition, we helped our clientsthrough U.S. LIBOR reference rate reform,contributing 18 million in one-time revenues.The acquisitions of Acadia and Quantile,which round out our Post-Trade solutions offeringcontributed a further 15% to OTC derivatives growth.Securities and reporting grew 7%as revenues relating to the early terminationof the Euronext Clearing agreement,more than offset the in year impact of the business lostand we also saw strength in RepoClear.Net treasury income was up nearly 13%as interest margins benefited from the shapeof the yield curve in 2023.We saw higher levels of cash collateral in the first half,which moderated in the second half as balances normalizedand members optimized their collateral between cashand non-cash.Turning to costs on slide 13.Before I go into the drivers of our cost growth,I want to touch on FX.In 2022, you'll remember we had a 68 million benefit in OpExand this year we saw an adverse impact of 42 million.These FX impacts are a resultof being a global organization operatingin over 170 countries,and that's why constant currency growth rates area better indicator of underlying performance.Organic cost growth of 5.3% was broadly balancedbetween ongoing operating costs and investment for growth.Average pay increases in 2023 were around 6%,but at the same time we've delivered further cost synergies,which partly offset this.Acquisitions added 2.4% to our cost growth.Ongoing operating cost growth reduced from 6.4%in the first half to 3% in the second half.This reflects the phasing of investment and efficiencies.Looking ahead, Refinitiv synergieswill continue to benefit us in 2024,but that's not the end of the efficiency opportunity.Our broader transformation program is buildinga more scalable platformwhich will deliver cost efficienciesover the medium term.Turning to margins, on slide 14,we delivered an EBITDA margin of 47.2%,which included 110 basis point improvementin our underlying efficiency.As I mentioned earlier,the FX related items are impacting margins in both years,and the impact is clearly shown in the table on this slide.When laying out our 2023 EBITDA margin guidance,I explained how our investment with Microsoftand recent acquisitions would impact this year's marginand you can see that the impact was 120 basis points.Our guidance was set excludingthe Acadia acquisition and FX.On this basis, we delivered an in year margin of 48%in line with guidance.The reconciling items between adjustedand reporting operated profit relate to the acquisitionsthat we've closed over the last few yearsand most materially Refinitiv.The 69 million re measurement gain relatesto the fair value adjustmentof our previously held 14% in Acadia.Moving from the P&L to cash flow,our business is highly cash generativeas you can see on slide 16.we delivered 3.2 billion of operating cash in the year.As a reminder, the CapEx fee figure here is the cash costof both business as usual and integration CapEx.Equity free cash flow was again substantial at 1.8 billionand we converted all of our profit into cash this year.Let's look at how we're deploying this capitalon the next slide.We continue to deploy our strong cash generation backinto the business for future growthwhilst also returning any excess to shareholders.The level of CapEx reflects the transformation we're drivingin our business and investments in our broad rangeof growth opportunities.On dividends, we're proposing a final dividendof 79.3 pence, totalling 115 pence for the year,up 7.5% from last year.We completed the acquisitions of Acadia and Yieldbrokerand the buyout of the LCH SA minorities in the year.We returned 1.2 billion to shareholdersvia share buybacks in the year.We carried out the remaining 450 millionof the on market buyback announced in 2022,followed by 750 million directed buybacktargeting the former Refinitiv shareholders.At our Capital Markets Day in November,we announced a further 1 billion share buyback in 2024.As we announced this morning,we intend to do that through directed buybacksfrom the former Refinitiv shareholders.Looking ahead, we are reiteratingour upgraded medium term targetsthat we announced at our Capital Markets day.We expect revenue to grow organicallyat mid to high single digits accelerating after 2024.2024 is impacted by a numberof known one-offs including Credit Suisseand the Euronext Clearing termination.These impacts are well understoodand reflected in consensus.We expect underlying EBITDA margin to increase over time.The improvement won't be linearbecause it will depend partly on the phasingof investments in efficiencies.With regards to CapEx, for 2024,this will remain at current levels of 11 to 12% of incomereducing over time to high single digitsas a percentage of income.And lastly, over the medium term,our cumulative free cash flow will exceed net income.For 2024, we're confident of continued growthand improving profitability in linewith our medium term guidanceand we expect the adjusted tax rate to be 24 to 25%.As noted at the CMD, we'll be movingto our new reporting structure from the first quarter.So in summary, we built a strong track recordof performance and met and beator beaten all of our Refinitiv acquisition targets.2023 was another great year of delivery across the top lineand in profitability,and we continue to be very active and thoughtfulabout how we allocate capitalcombining investments in the long-term growthwith returns today.It's been a privilege and a pleasure to be partof the LSEG journey these last few years,and now see the transformation that we've been driving.I'll be eager at watching the group deliverthe next phase of growth.And with that, David,- Thank you Anna.Now we gave you a pretty detailed updateat the CMD back in November.So for the next few minutes,I wanna briefly look at our plansfor accelerating growth in three key ways.One, by delighting our customers, improving retentionand pricing power as a result,two, by transforming our salesand account management approach to deepenand scale our customer relationships,and three, by improving existing productsand bringing new solutions to market,these are the building blocks of our growth goalto deliver mid to high single digit growth acceleratingafter this year.So first, our customers are recognizingthe ongoing transformation of our business and our products.Customer satisfaction is up across all of our key productswith the biggest improvement seen in our largest accounts.Our customers also tell us they feel better informedabout our products and find it easier to get things done.We are significantly improving our customer service.We've already reduced the time it takes usto resolve customer queries by 25%,and we plan to lower it much more.Second, we are deepening and scaling our relationships.You've heard us talk before about the successwe've been having with our key strategic accounts,those 20 or so global institutionsthat are our biggest customers.The combination of LSEGand Refinitiv has created a truly strategic partnerand we have resourced our account managementto reflect that.These relationships involve regular top to top dialoguesand more strategic partnerships that have ledto faster growth from our biggest customers.The Design Partner Programmewith Microsoft is a great example of this.We're now putting in placea similar account coverage program for our top 250 accounts.Across all of these accounts,we are focused on solution selling,a comprehensive sales training programselling the LSEG way is on targetfor global rollout completion by the end of next month.And then for our smaller customers, we are improvinghow we serve them by consolidatingand standardizing our approach.We have already migrated 10,000 customersto be served out of three global hubswith two further hubs to follow.At the end of last year,we launched our E-commerce platform,empowering our smaller customers to self-serveand giving us a tool to upselland cross sell much more effectively.We will be launching new productsonto that platform throughout 2024,and as you know, we continueto keep a close eye on sales cycle trends.The data remain very consistentwith what we shared at the first half,deal sizes are up year on year,win rates are up strongly since acquisition,and we are not seeing any lengthening in those cycles.And now, onto product where I'll update you onwhat we're doing and the breadthof opportunity in front of us.You recognize this slide from the CMD.It underlines the waves of growth as they contributeto our acceleration.Half of LSEG, Enterprise Data, Tradeweb and Post-Tradeare businesses driving industry leading growth.Another set of businesses such as Trading and Bankingand Investment Solutions have great market positionsand are the focus of investment programsto make them even better.And then we have our partnerships with Microsoftand with the world's leading financial institutionswhere we are transforming the industry.Let's look at Enterprise Data first,which is just under a fifth of our revenue.This has been a continuing success story,building on our leadership in Real Timeand our growing share in Pricing and Reference Services.Our continuing investment in contentis driving strong growth.We're having real successwith fixed income and evaluated pricing data.A recent major win with an Asian bank reflectsthe new LSEG's unrivalled breadth and depth,as well as the quality of our dataset.This was business that Refinitiv lostto a competitor pre LSEG, largely becauseof that competitor's extremely aggressive pricing.But this customer has come back to LSEGbecause of the quality of our product.Our real-time optimized service in the cloudnow has over 500 new customerssince its launch a couple years agoand opens up a real-time service to many more customerswho previously would not have investedin on-premise infrastructure to take the service.We're also seeing growing demand for data managementand storage, which is an encouraging signfor our move into this space with Microsoft.Looking ahead, we are expanding on the same winning formula.We're investing in our content,transforming our data operationsso we can onboard data much more efficiently and accurately.And as we make it easier for customers to accessand combine data sets and drive insights from them,usage and value are only going to increase.Moving to Tradeweb, which is about 13% of our revenue,it was another strong yearwith a notable acceleration in the second half.This business has a number of really strong growth vectors.Overall, electronification is an ongoing tailwind,but one the team is adding to with market share gains,particularly in credit where Tradeweb represents a quarterof the high grade credit market.Innovation in core markets continuesas does international expansion.In 2023, Tradeweb moved into the Australian marketwith the acquisition of Yieldbroker.Looking at 2024,Tradeweb is adding more trading tools,pushing further into emerging marketswhere electronification is in its very early stages,and looking to make further share gains in credit.Overall, we've stepped up the level of collaborationbetween Tradeweb and the restof LSEG building better products for customers.The FTSE Russell partnershipand the integration with FXall are great examples of this,but there is much more to go for.Turning to our businesses where we are driving improvementthrough investment.Trading and Banking has probably been the areawith the most upside surprise for our investors.After years of revenue declines, it's fair to saythat expectations of a turnaround were low,but we have now delivered eight straight quartersof organic growth.What's changed?Put simply, Workspace is a great productand we are continuing to improve it week in and week out.In 2023 alone, we made nearly 400 updates,we integrated some of the TORA functionality,and we launched the AI driven advanced dealing for FX.Customers with multiple desktop services are spending 59%of their time on Workspace compared to 43% for Eikon.And that is showing up in improved retentionand better pricing.We also continue to make inroads in volumesand competitor displacement.UNICREDIT is a great example of this.They were lining up to cancel, but they saw how goodand cost effective the new product was,and we are confident that this progress can continue.As you know, we plan to have nearly allof Eikon customers migrated to Workspace by the endof this year before sunsetting Eikon in 2025.And the first applications from the Microsoft partnershipwill be in customers' hands in the first half of this yearwith Meeting Prep and Open Directory pilots scheduledfor the next month or two.Now we have also seen improving performancein our FTSE Russell Index business, which forms the bulkof Investment Solutions.We are selling more to our existing customers,and we have also generated significantRefinitiv revenue synergies as we link index salesto underlying data subscriptions much more effectively.Together, these measures have ledto an acceleration in subscription revenue in 2023as you can see on the right.Looking to 2024 and beyond, we see further growthfrom better commercialization of our existing productsand improved distribution boththrough partnerships and technology.On top of that, we'll improve functionalityas we complete our index refactoring program,accelerating time to market,and giving our customers better tools and functionality.Now, moving on to our truly transformational opportunitieswhere we are making a step change to our addressable marketsthrough deep partnership with the industry.For Post Trade, it's worth reflecting on 2023before we go on to the new opportunities in '24 and beyond.The division achieved total income growth of over 17%and 12% on an organic basis,not bad for a supposedly mature business.That extends a double digit compound growth recordover five years.In addition to market volatility,the drivers were continued expansionwith our first two Singaporean members onboarded,product innovation and a strong demonstrationof our partnership credentials.We helped our customers migrate 600,000 contractsworth $45 trillion from LIBOR to SOFRin the first half of the year.Looking ahead, we will continueto innovate in our core clearing businesswith a move into clearing of derivatives on digital assets,CDS in the U.S. market,and the development of our FX forward service.But the big opportunity is in Post Trade Solutions.We thought it would be useful on this slide justto frame the opportunity in the simplest way possible.Over the last 10 years,LCH has achieved extraordinary growth,tripling revenues and increasing profits six times.It now generates well over a billion poundsin revenue and is still growing.Almost all of its income is generated from clearing,but this is only half of the OTC derivatives marketas you can see from the pie chart.At the end of 2022, the total valueof OTC derivatives contracts outstanding was $21 trillion.Obviously, the amount tradedduring any year is many multiples of that.Almost all of that cleared business is in Swaps whereas you know, we are the market leader.Two important changes are taking place in the industry.First, regulations such as Sackerare making it much more expensive from a capital perspectivefor banks to enter into bilateral trades.We think this will see more and more business migrateto clearing over time as liquidity improvesand the relative cost comes down.Note that FX,the second biggest OTC market is still over 90% uncleared.Second, the industry is crying outfor common standards in the uncleared space.Participants want a consistent frameworkfor contracting, documentation, valuation,and dispute resolution, and they want us to provide that.We are combining our existing SwapAgent businesswith Quantile, which offers trade, compressionand optimization across multiple counterpartiesand with Acadia, which provides risk management, margining,and collateral services for uncleared markets.Together, these businesses offer a full suite of servicesto manage risk and capital efficiencyacross the whole OTC market,i.e. cleared and uncleared.So we are effectively doubling our market opportunity.And finally, a brief update on our Microsoft partnership.We covered this in some detail at the CMD,but progress continues to be encouraging,and we are very close to having product in the handsof our customers a few months ahead of our original plan.Now I know you have found the demo videosthat we have shared in the past very helpfulin visualizing the types of service we will be providing.So here is another one.This is actually a recording of a live demo doneby Nej D'Jelal, our Head of Workspace, to our board,and it shows the integration of Workspace with Meeting Prepand the broader team suiteand just how flexible and embedded it is.So please play the video.- [Nej] Let's start with the Microsoft Teams calendar screenwhere I select this upcoming client meeting with Home Depot.From here I'm able to select Meeting Prep, which prompts meto enter the name of the client.The suggestive search is actually Workspace search,which has been integrated Teams allowing meto select Home Depot and get started.I've got a list of different insightsthat I can select from, so I simply select Create.The result is a report of high quality insightsthat takes seconds to generate,covering everything from key meeting highlightsto LSEG powered news and financial information.And I'm able to expand on this information where I see fit.As you can see here, relevant articles,if I continue to scroll down, you can see other sourcesof information as well.Following on from this, I may wantto send my client an email ahead of the meeting,in which case I can conveniently generate a draft emailthat can be copied into Outlook for me to review,edit and send on.But that's not where the journey ends.I may also want to delve deeperinto the information presentedin which case I simply select a deep link.And what you can see now is LSEG Workspace,which has been seamlessly integratedwith Teams into one single workflow.I'm able to navigate to the statement viewand realize that oneof my colleagues may be interestedin this richer information.So now it's time to share and I simply right clickand select share via Microsoft Teams,type the name of my colleague,and say, "Check this out" and click Share.And the card is then presented back in Teams chatfor my colleague to open,he has an option of opening in Teams or in Workspace.He will open in Teams allowing himto recreate the same detailed view within his Teams chat.And in the event my colleague decidesthat he wants even deeper information,well, he's always got the option of opening in Workspace.- So pretty powerful in terms of that embedded nature.And one point to notethat the video doesn't emphasize Meeting Prep usesMicrosoft's AI to combine our datawith the customer's own data in their email,other files or CRM system to write those briefing materials.We are rolling out pilots of this two customersover the course of the next month or two.As we've said before,the first meaningful revenuesfrom the partnership will begin to flow in 2025.We have gotten some questionsas to how we will commercialize these products.We will get paid usage of our data and Workspace licenses.Microsoft revenue will comefrom cloud consumption and their licenses.Of course, the precise commercial model will varyfrom product to product and will also dependon the distribution mechanism,whether that's through our sales organizationor Microsoft's enterprise relationships.But the bigger point is clear,we are developing productswhich will significantly enhance insightand efficiency for financial markets participants,and the value proposition will be compelling.And as we highlighted at the CMD,we see at least two significantnew opportunities opening up for us.First, an adjacent TAM of around 50 billion poundsin data management services,and second, penetrating the 300 million plusTeams user base with our data.So to sum up, in 2023, we drove growth in allof our divisions with acceleration through each quarter,we made significant strategic progressthrough the Refinitiv integration benefits,the deeper collaboration across the group,the investments in our platforms,and our partnership with Microsoft.We have an exciting set of plans to accelerate growthand are confident of executing on themand we will continue to allocate capital actively for growthand shareholder returns.Now we're very happy to take your questions,which Peregrine will moderate,and I already see hands popping up.- Thank you, David.Morning everyone.So we'll take the questions in the room firstand then we'll go to the conference line.So Tom, I saw you first.- Thanks very much.It's Tom Mills from Jefferies.So I saw the FCA's wholesale data market study final reportalso came out this morning.I guess nobody's really had that much timeto look through it in much detail,but I mean certainly the headlines look fairly neutralfrom a sort of outcomes perspective.I just wondered if you had any other takes beyond that.And then I also wanted to pick up on the demothat you just showed there.Is it right to think that people would,or users would need to sort of paythe additional copilot subscription with Microsoftin order to get the benefitsthat you showed there?And I guess some of the early feedback on copilothad been that people found it interestingbut perhaps didn't meet the $30 a month price tagthat it sort of currently applies.Do you think that the sort of additional capabilitieswithin Workspace will significantly addto what it has to offer?Thank you.- So I'll take your second question first.Short answer is I think yes,I think this is a very clear use casethat is going to add significant efficiency to users,as I think we all know,how much time is spent in terms of preparing for meetingsand the notion that you can havea pretty effective briefing memo preparedin about 15 seconds is going to be pretty compelling.So I think that it will proveto be an attractive element bothfrom a Microsoft perspective but alsoin terms of users of our data.Just a point to mention on that.If you are not a user of Refinitiv dataand you have access to the Microsoft productand you are using Meeting Prep, you will be given accessto basically a teaser element of our dataand then a link to accessing moreof our data via a subscription.So we see that as a very interesting openingto a larger set of Microsoft customers.Your first question really around the FCA,I took a quick look at it this morning.For those of you who haven't seen it,it indicates there will be no,I think the phrase they used was,"no significant intervention in the markets,"but that they will continue to focus on fair,reasonable and transparent distribution of data.That's exactly how we approach data.We are both a provider of and a consumer of data,so we look at it from both sides and try to take that fairand reasonable and transparent approach at all times.So again, early days just came out this morning,but it looks to be, you know,not a material event from our perspectiveand one where we will continue to work with the FCA.- Tom, (indistinct). - Sorry, can I just checkon the first point you made.Is it the case that people would needto take the co-pilot subscription to benefit from, you know,what we saw in the demo there?- At this point, yes,but I can't speak for Microsoftin terms of whether they may modify that over time.- Okay, thank you - Enrico.- Thank you, it's Enrico Bolzoni, JP Morgan.Couple of questions from me.So one, again, related to the demo you showed us.I would like to understand from your point of view,where is the biggest opportunityin terms of winning market share?And I'm referring to the different divisionswithin banks, for example.So you have markets historically they've been,you know, adopter of Bloomberg,my understanding is it's very difficult to displace those,this product seems to be more targetedto investment banking possibly or other,I guess other division within banks.Can you just give us some colorwhether you think you can generally,you know, take market share with the partnership,at least in the early phases.My second question relates to the synergies.I mean, clearly you are ahead of your original schedule.You gave us an indication of where the run rate weretowards the end of the year.What should we expect for 2024?So related to that,where these run rate achievedtowards the very end of the year.So shall we expect already from first, second quartera meaningful benefitfrom a cost and revenue standpoint.And then finally, among the things you mentioned,you have this E-commerce opportunityto service smaller clientsand I was thinking whether it relates alsoto clients that might be served betterwith the adoption of the cloud technology.So can you just remind uswhat is the addressable market there?What is the opportunityfor revenue? - Sure,maybe I'll take your first and thirdand if you want to touch on the synergies.So in terms of where we lookto be taking market share within different segmentsin Capital Markets, we're not limiting itand we're not targeting it at any one area.You may see in our different demos,a use case that may be more relevant for investment bankingor for trading or for wealth or for data management,but we think this is goingto be a kind of step change product that is goingto be significantly better in terms of the user experience,in terms of the flexibility, in terms of the availabilityof data analytics workflow.And so I think that the market opportunities applyacross banking, wealth, trading, corporates,and we have seen that kind of interest.As you know, we have the Design Partner Programmewhere we are working with a number of our biggest customersand we're not working with any one divisionof those big institutions,these are both buy side and sell side.We are working with them across their different segments.On E-commerce, the real opportunity here isto have our sales force workmuch, much more effectively and efficiently.So if we have tens of thousands of customers,in the past we used to deal with all of themin basically the same way,i.e. human intervention.So we could have a human dealingwith a very large international bankthat we might have hundreds of millions of dollarsor pounds of business withand we could also have a human dealingwith a small hedge fund that might need a little bitof data and workflow from us.What we are doing is creating the E-commerce capability.So for the long tail of customersthat might want a single data set from us,they can access that themselves electronicallyand do that quickly, efficiently, no human intervention,more efficient for them, more efficient for us.That allows our sales force to focus the human interactionon those who either need more individual helpor on the bigger customers which have more complex needsand requirements.So in terms of the E-commerce platform,we have rolled out a beta version at the endof last year on Workspace for wealthand then this year we haveWorld-Check becoming available on the platformand then we'll be making more and more product availableon it over the course of this year and into next year.Over to you on the synergies question.- Synergies, yeah.So just to recap a little bit,so starting with revenue synergies, we've saidthat we exited the year at 158 million run rate synergiesand you've seen that grow fairly consistentlyand it will, you know, continue to grow consistently.So I wouldn't look at any specific phasing around thatbut really good momentum there.And in terms of cost synergies,we exited the year at 442 million run rate synergiesat the end of the yearand we've said there's a little bit more to come.So 442 won't be the final number,it'll be a little bit higher,and we'll see the benefits of the annualization of the 400and the incremental piece that we've delivered this year,which has been relatively evenly spread,plus the benefits that we'll seefrom those further synergies flowing through to 2024.- Come over this side, Andy.- Thank you, good morning, it's Andrew Coombs from Citi.Firstly, just wish Anna all the best in her new endeavorsand let's take advantage of thatand ask you a few numbers questions beforehand.- We got this coming. - The first thingjust on the ASV metric.You do reference there is some Credit Suisse impactin there.You said that Credit Suisse was well capturedfor the full year consensus figure,but can you give us an ideaof how much you've already recognized in the ASV figureversus how much is still to come?Second question would just be coming back to the OpEx.You made this pointthat the second half organic growth run rate was notablybelow the first half in 2023because of the timing of investments.So when we're thinking ahead to 2024,should we be thinking about the full year of run rateas the base or the second half run rateas the base intrigued on your thoughts there?And final question buybacks, just given the referenceto the AGM authorizations, can you just provide uswith an idea of how many authorizationsdo you have outstanding still from last yearversus the timing of the buybackand hence your comment about potentially rolling thoseat the end of April with the new AGM.- You do the first two, I'll do the third.- Yeah, sure.So with respect to Credit Suisse,just to kind of recap the things that we've said so far.So firstly we've said it's less than a pointof D&A revenue growth in total,and we've said that the effectis fully reflected in 2024 consensus.In terms of ASV, there was a smaller impact in Q4and there'll be a larger impact as we look aheadto first half 2024.In terms of OpEx, I'm afraid I'm not goingto give you the detail of the phasingin part because we work our waythrough making investments in a thoughtful wayand we don't sort of manage to an overarching number.We manage to investing when we've got the teams readyand capable to deliver.Now in terms of phasing,well, firstly we've given you guidance on margin,it will improve as we look forward to 2024,and in terms of OpEx phasing you, it would be right to thinkthat the second half growth rateas we exit the year gives you a senseof where we enter the year and then we'll continueto drive efficiencies and investmentsas we manage our way through.- And on your buyback question, the authorizationthat we got at last year's AGM goes through the yearuntil this year's AGM.And so, then to do anythingafter this year's AGM needs the shareholder voteat this year's AGM.- In terms of launching that directive buyback,there's no constraint on you doing itbefore the AGM potentially.It's just you're saying that should you choose to do itafter the AGM you would...- So the authorization we got at last year's AGM,I believe was a percentage amount up to just under 5%.And so then we needto get the new authorization going forwardafter this year's AGM at at this year's AGM.- Thank you - Russell,just behind you, Andrew.- Hi, it's Russell Quelch from Redburn Atlantic.I've got a few questions on the go to market strategyand I'm just gonna give you thesein the order I wrote them down,but you can answer them in any order.When you roll out product, particularlyaround when you start adding predictive analyticsto generative AI into the product suiteand you're moving more as you mentioned David,towards a sort of consumption or usage based model,some call that like a token based pricing model, I wonderedhow that affect ASV growth givenyou'll have less visibility at the upfrontwhen you actually make the,when you put the contract on the total size of the contract.That's my number one.In terms of these clients where you've done,where you're targetingthrough your 250 clients implementingthis new structured enterprise sales approach,can you give us some details on where you're atin that sort of 250, how far you are through.In terms of your investments in the sales teamto deliver that, can you give us some idea asto where you are in your spending on your sales team?Is there an incremental expensewhich you expect in 2024 in the sales teams?And then just any flavor you can give us.I assume you've done some trials with your customersaround the new product, so just any flavor you can give usaround sort of feedback insights,any statistics you can share from some of those trials.Thanks.- Okay, let me see how much of that we can tackle.So your first question around movingto a consumption based model.So we will not be shiftingto a fully consumption based model,it will basically be,and please take, this is all still work in process here,but it is likely that we would be shifting to a modelwhere we're maintaining the subscription relationshipand sort of a base level of subscriptionwith consumption-based pricing,consumption-based charging on top of that.And so you're right that in the ASV construct,there will not be an ability to predictthe exact levels of the incremental consumption on topof the base level subscription,and that's something that as we move into that space,we'll all get comfortable with that together.On the 250 clients.So as I mentioned in my remarks,we've gone through a processof training our full sales forceand this is not a light endeavor in termsof our overall sales and account management team,that's about 2,700 people,so very substantial part of the organization,in terms of thinking in this way,in terms of focusing on our customers in this way,and in terms of allocating the resources appropriately.And this includes the focus on the 250 accounts,but also as I mentioned, the focus on the shiftof the 10,000 smaller tail accountsto basically call center hubsand we're still in that process,so we're not completely done on either part of that.In terms of the spending,I don't know if there's nothing specificI would add on that,but if Anna wants to touch on.- A couple of thoughts.If you think about it,historically we've been serving 40,000 customerswith humans, which hasto be a deeply inefficient way of doing it.And so what you're seeing us do here is really make surethat we are targeting our resource,the those really biggest customersthat can drive incremental valueand removing the sales force focus from those onesthat can and would actually prefer to engagewith us electronically.So this is not about incremental spend and sales,it's actually about efficiency,but it's about efficiency, greater returns focus,and frankly a better experience for our customer.- And then on your last question, with respect to trialswith new customers,so we have had our design partners actively engagedin the product build process and the development.And then in terms of, to use your word, trials,we will have pilot versions of these productswith a subset of membersof the Design Partnership around kind of end of march,April timeframe that applies to Meeting Prep.We are also going to be piloting Open Directorywith probably one close partner on the same timeframeand then we will be rollingthat out further over the course of the year.- Arnaud?- Good morning,it's Arnaud Giblat from BNP Paribas Exane,three questions, please.Firstly, could we come back on the adoption of Workspace?I think from the stats you gave on the timeyour clients have taken on Workspace,it sounded like usage had increased by about 20, 25%.Could you confirm that or give the accurate number?My second question is,you talked about sunsetting Eikon in 2025.I mean, given that Eikon's on premiseand Workspace on the cloud,I'm just wondering if there areany significant cost synergies to extract from that event?And thirdly, really interesting the Meeting Prep demoyou showed us.I think one of the big advantages is the AI being ableto access the client's data.I'm just wondering if particularly knowing how banks work,if you're finding any pushback in terms of giving AI accessto client's data, how difficult is itto convince what sort of safeguards needto be put in place so that the client's adopt it?- You know, I'll take the first and third,if you wanna touch on the cost question.So maybe a little bit of a correctionor adjustment in terms of your first question around usage.So we have a customer experience monitor,which ongoing process in terms of tracking our customersand their customer satisfaction scores, their usage.What we have found is that usagewhen you are a Workspace user,that your Workspace is the desktopthat you use 59% of the time.This is for multiple desktop users,so if a customer has other services.That compares to,if you were an Eikon user before Workspace,if I have the percentage right, 43-- Yep. - Yeah,you used Eikon 43% of the time.So that's a significant uptick in termsof where our customers who have access to multiple desktopsand have a choice where they are spending their time.That's probably not, what that does imply is greater usage,but I just wanna be careful it's not exactly the same thingas what you said in terms of usage increasing by 25% or so.But that is a very clear and strong indicatorand we have other customer metricsthat are comparable to thatin terms of our customers like Workspace,it's a great product.Just while I'm going here and then I'll turn it over to you.Pushback from customers on data,Microsoft is perceived to be a very good enterprise partner.And if you think about how embedded Microsoft already isin many of these institutions, we use them,I'm sure many of you use them,it is a question, but it is a question that is addressed.And I'll say, I'm a pilot user of Copilot nowand so I am now using some of these toolsthat have access to all of my files.And I would say initially, you ask questions likewho else has access to this?I actually ask that question.And for the files that are just in my OneDrive,I'm the only person who has access to them,if you put 'em into SharePoint, anybody has access to 'em.So it certainly, it raised the question in my mind,I'm sure it raises the question for our customers,but once you address those questions,the power of the product is impressive.Just quickly to Anna on...- Yeah, so sunsetting Eikonand does it give us a big synergy benefit?So as I've said before,there's quite a big opportunity for us to continueto drive efficiency actually across our whole platformas we continue to modernize our infrastructureand improve the qualityof the applications across the top and move to the cloud.And that's why there is a sustained cost opportunityto create cost efficiencies,to allow further investment beyond the Refinitiv synergies.And sunsetting Eikon is part of that.I wouldn't see it as a single big lumpin of itself,actually, there's lots of small applicationsthat sit around it and we sunset them sort of, you know,one by one over time.So what you'll see is consistent cost efficiencyas we've delivered through the synergies to datebut coming through other movesto make our platform more scalable and it's part of that.- Hubert.- Thanks, it's Hubert Lam from Bank of America.I've got three questions, firstly on EBITDA margin.I know your target is to have that growing over time,but any guidance for this year and the moving partslike how much more of a hit is EBITDA margin gonna befrom the Microsoft investments and other moving parts?That's the first question.A second question is on capital allocation.Just wondering what your thoughts arein terms of further possibly M&A for this year.I know you've got your management time mainlyaround Microsoft, but just wonderingwhat other opportunities potentially you could seeor maybe even another buyback by the year end.And lastly another regulation question on EU derivatives,I'm just wondering what your thoughts are on that.It seems to not be that significant for you,but just wondering what your thoughts are on itand after the EU proposal.Thank you. - Thank you, Hubert,you want to take the first question?I'll take the other two.- It's gonna be a bit of a non-answer I'm afraid.You know, EBITDA margin will improvein 2024 is what we've said.The moving path to think about,you've got the annualizationof some of the Refinitiv synergies that we've seen,you've got some more to come through,and we will be making investment,you'll see the Microsoft investment ramp up a little bitand there'll be some areas of investment,but overall it will give us margin enhancement.- And on capital allocation, you know,Anna had a slide on this in the presentation,you should expect to see us continueto manage our capital in a very similar way.So this is a business that generates a lot of cash flowand we are continuing to invest in the business.You shouldn't be surprised to see us dothe more modest sized kind of bolt-on M&A going forward,we've done a number of those over the past couple yearsand they've all been very additiveto us strategically and financially.I think, you know, we've talked aboutthe buyback we announced today.I think that is probably a good place to startfor this year, but that gives you a sense,we will continue to actively manageour capital going forward.And then on EU clearing, you know this has been a topicthat we've talked about a lot over the last six, seven yearsand I think you're absolutely right.So it looks as if the EU regulatorshave come out with a proposal and a new regimethat I think is being described as pragmaticand from a risk management perspective,this notion of having active accountsfor various market participants.But in terms of impact on our business, I'll say,you know, de minimis kind of impactand you've seen our business continuingto grow very attractivelyand I think it ends up being a healthy outcomefor the markets, including our memberswho are based in the EU who want to have accessto our liquidity in LCH.- Ian?- Thanks, it's Ian Whitefrom Autonomous Research.A couple follow-ups from my side, please.Just, first of all, is there any particular reasonyou might offer as to why maybe you haven't been seeingthe sales cycle pressuresthat some of your North American peers have called outover the last few months?That's question one.And just on question two, I'm keen to understand a bit moreor a slightly bit more detail about the progresson the Workspace migration following onfrom the numbers you put up on slide 27.I guess where is Eikon continuingto provide mission critical functionality for clientsand what operationally kind of still needsto happen from your side in order for that functionalityto transfer to Workspace and those users to transfer too?Thank you. - Sure.So on your first question,I can't comment on the North American peersand the challenges that they might be facing,but what I can say very clearly is our business issignificantly more diversifiedthan those you are talking about,and we serve our customers in a much broader waythan most of our peers.We don't have a particular focus or particular exposure,for example, to buy-side or particular exposureto a segment like wealth, a relatively small percentageof our business is charged on a per useror per desktop basis.So you put all of those things togetherand the diversity of our business, as I said,we're not seeing those kinds of dynamicsthat some of our U.S. competitorsor peers have spoken about.In terms of the migration of Workspace,so there, there are a couple things here.Overall, I would say the big picture answer isthat this is just about working with our customers,and we need to work with them on their timeframesto make sure that these migrations go smoothly.There are a couple aspects ofif a customer has been using Eikon for many, many years,they may have certain tailoredor bespoke aspects associated with it.And so in certain cases like that,we may be working to make sure thatwhen the migration happens,it's relatively seamless so that they can accesssome of the same bespoke functionality on Workspace.So in certain cases that is an elementof what we are working through,but broadly speaking it's about workingon customer timelines and on their timeframe.- Got it, thanks - Ben?- Hi, it's Ben Bathurst from RBC.I've got a question on Microsoft.At the CMD, I think it was apparentthat there could be opportunitiesto expand the existing partnership.I just wondered firstly if you'd agree with that,and then secondly over what sorts of time horizons you thinkthose conversations might be starting to happen.- I guess the way I would answer that,I'm not sure I would describe it as anything unusualin terms of expanding the partnership,I would just say the partnership is evolvingand a lot has changed over the last year plus,and we and Microsoft are working very well together.You know, when we announced the partnership,generative AI had just been announced,ChatGPT had just been launched two weeksbefore we announced the partnership.Microsoft Fabric had not been announced yet,that's a platform that we're working very actively with.And so some of the productsthat we're talking about now in terms of Meeting Prep,you know, those were not fully formed a year and a half ago.So I think the point, and you probably heardsome of this from Satvinder at the Capital Markets Day,there's a lot that we are doing togetherand as the market is evolving,as the technology is evolving,as we're learning more and more about each other,we are seeing how we can do more and more together.It's proving to be, I would say a very healthy,successful partnership and we look forward to continuingto build on it as we go forward.- Mike, sorry.- Thank you.Mike Werner from UBS, two questions please.In terms of the rollout of the Microsoft enhancements,it's taken some time to fully roll out Workspace,as you say, it's gonna be done by the end of this year.How long will that rolloutand some of these new products take?Is this something that takes us into the middle of '25?I'm just trying to get an idea there.And then second, I think in the past you've notedhow there's a quite a big disparitybetween your desktop product, the Workspace product,and some competitors.As these new functionalities and capabilitiesand the strength of this product becomes evidentto the market, when you think about pricingin terms of narrowing that gap, is that something you expectto do incrementally over timeor do you expect over a year or twowhere you kind of narrow that gap a little bit more quickly?Thank you. - Actually,I think your two questions are pretty closely related,and what I mean by that is the factthat we will be rolling out new capabilitiesand new products and new functions kind of incrementally.So if you go back to probably the product launch of Eikon,I don't know, 15, 20 years ago, there was a big launch.We don't expect to have a big launchof a completely new system or a completely new platform.You are going to start to see really high quality productsrolling out incrementally, and Meeting Prepis a great example of this.It's coming in, in a few monthsand that will have a big impact on our customers,but it's not going to be a massive launch,it's going to be a new button on the screen.I think you'll see more of that,Open Directory, similarly, this will enable Teams usersto communicate across different companies.Today, Teams is only an intracompany platformand I think we can all see how powerful it would beto have that kind of communication flexibilityacross the industry.But again, there will be a launch of that functionality,but it will not be a massive new launch of Workspace.So you'll see more and more of that.And then if you go to your second questionin terms of what does the pricing look like,I think that as we add more valueand as we make this platform more and more powerfuland better and better for our customers,you'll see the pricing adjust appropriately.- Oliver.- Hi there,I'm Oliver Carruthers from Goldman Sachs.Maybe just one final one from me,zooming out this Design Partnership Programme with Microsoftand your strategic customers, you know,feels like an environmentthat you can drive innovation in a fairly de-risk waybecause you know, you're figuring outwhat your customers want and you're piloting itwith them as you go.When you have these top to top dialogues,what is your sense of what your competitors are doingor potentially will doin terms of building out these new solutions, you know,like this Meeting Prep product for your customers?- Hard for us to speculate on that.I think we can only assumethat our competitors will try to respond.And of course everyone across the industryis putting out announcementsabout how much they're doing with AI,you know, and you all can evaluate those as as they come.But I think we feel very good about our positioning.We are viewed culturally if I can use that wordas a partner to the industry,the partnership with Microsoft is working very well,Microsoft is viewed as a good enterprise partnerfor the industry.So that is a very strong triangleif I couldn't put it that way in terms of our positionas a very strong partner systemic to the industry,Microsoft's position as a very strong partner,and we can't control what our competition is gonna do,but we like our position, like our chances,and the receptivity from the customer base is,I'll say very encouraging.- Thanks. - Great, I think that's itin the room.So operator, could you open the lines for Q&Afrom the conference call, please?- [Operator] Thank you.And if you would like to ask a question on the phone lines,please press *1 on your telephone keypadto raise your hand and join the queue.And your first question comes from the lineof Kyle Voigt from KBW, your line is open.- [Kyle] Hi, good morning.Maybe just a few follow ups for Anna on expenses.First on slide 14, you showed the walkand impacts to your EBITDA margins with marginsexcluding the impact of FX coming in at 47.7%,which is very slightly below the 48% guide.But that is despite over delivering your cost synergy targetin the year and with organic revenue growth coming instronger than you initially guided to.So I'm just wondering on a core basis,where did the incremental expense growth come from in 2023versus your initial expectations?Was there simply a higher level of investments paidfor growth during the year,or was the core operating expense inflationa bit higher than expected?Then my second question,on slide thirteen's expense growth walk,you show 4.6% growth in coreand 4% growth for investments in 2023.It sounds like there will still be some increase relatedto Microsoft spend in 2024,but is it fair to think that investmentsfor growth bucket will significantly decelerate in 2024given that we've already had the big step upin 2023 related to Microsoft?And can you remind us where you stand todayon the 250 to 300 millionof incremental cash costs you expectedwhen you laid out that Microsoft deal?Thank you.- So if I start with your first question,which I think if I boil it right down, is reallywhat has changed during the year?Have you seen incremental inflation or is it phasing?And I would say, the thing that has changedduring the year is really the phasingof efficiencies and investments.And we don't go into the yearwith that completely fixed because we investwhen we're ready to invest well and deliver welldeliver those returns,and we ramp up at the speed, we're confidentthat the teams are ready and delivering.And the same with efficiencies,we work our way through it so that the changethat we're implementing doesn't impactthe business as a whole.So you do see phasing move around a little bit in the year.With respect to your questionaround Microsoft costs year on yearand also what that means for the levelof investment in 2024,I'm not gonna answer it directly,but I can give you a bit of a sense.So the step up in 2023, some of that was Microsoft,but actually not a huge piece of it wasin that we were ramping up our Microsoft investmentback to that we do it thoughtfully.Some of it was in other areas because,you know, as you can see we're investingto transform our sales force for example.So I wouldn't sort of read that straightas a Microsoft thing, year on year,we'll spend a little bit more on Microsoft,in terms of investments in efficiencies,we will be making some more investments to drive growth,you see the benefit that's having on the top nine,but you also see the work that we're doing on efficiencies.So across the two you can be comfortablethat we'll see margin enhancement year on year.- Thanks Kyle.Next question. - Your next question comesfrom the line of Johannes Thormann from HSBC.Your line is open. - Hello everybody,Johannes Thormann,two follow up questions please.First of all, on your pricing policyregarding the mix of consumptionand subscription based models,will the clients have a choice in choosinghow much subscription and how much consumption they want,or will you put in pillars where everybody hasto take a certain level of subscriptionand a certain level of consumption based pricing?And secondly, looking at your strong rise in OTC revenues,if we look at previous years,has there been any incremental shift like in the mixfrom SwapClear and other clearing products,or have both buckets, if I may say so,SwapClear and the other clearing product like CSDand so on increased similarly in the last year?Thank you. - Thanks Johannes.So on the pricing question,probably the best way to answer that is to say early days.I think we have a good track record over many yearsof partnering with our customers in a way,demonstrating flexibility to our customersto make sure that what we're doing worksfrom their perspective.So it's probably premature for me to give youa detailed framework of exactly what that's goingto look like,but I think the subscription revenue modelwill certainly continue.And we will not be inventing this,there are plenty of other industriesthat have seen these kinds of models,so we'll keep you posted as this comes closer to delivery.You wanna touch on the breakdown in termsof the OTC revenues?- Yeah, so our cleared business is of courseby far the majority of our OTC lineand that is what is driving the majority of that.But within that,you've also got some really good momentumin the pieces that we're buildingto create Post Trade Solutions.And while it's off a smaller base, an early stage,really good momentum and strong growth thereand that's, you know, building for the futureand of course there's some acquisition benefitin the year as well.- Okay, thanks Johannes. - Your next questioncomes from the line of Benjamin Goy from Deutsche Bank.Your line is open.- [Benjamin] Yes, hi, good morning, two questions please.First, given we are now two months into the first quarter,maybe you can comment a bit on the a S3 trendsgoing into 2024 considering Q1 was a strong yearwith the pricing.So what's the pricing impact we can expect this year,and then credit space and other moving parts maybe.And the second is,it's now three years after the Refinitiv deal closed,our restructuring charges,integration charges falling, going forwardand how do you think about movingto a reporting structure,EBITDA operating profits other than adjustingfor purchase price amortization I think is fair.Thank you.- So shall I take those?So with respect to ASV,so we ended the year at 6.7%.We've said to you before that we expectto see the similarly higher levelof pricing increase in 2024 that we saw in 2023and that's really on the back of all of the improvementsthat we've made in our productsand the improvement in customer satisfaction.And we've said to you that there will be an impactin the first half of Credit Suissethat would be bigger than the impact that we've seen so far.I guess stepping back from it,I would point you back to the strong sales metricsthat we are seeing,I think, which gives me comfort going into the year.And the second question was, sorry?- Restructuring integration,all that mostly... - Yes, Refinitiv synergies.- Yes. - So as we move to the endof our Refinitiv cost synergies,the cost associated with the delivery of those synergies,we'll start to tail off.There is still more to do on the Refinitiv revenue synergiesand you will see that cost associatedwith delivering those revenue synergies continueas we move from the 158 million run ratethat we are at today to into the 350 million to 400 zone.So bit more to go,but I mean, you know, really more than broken the back of itand the machine is working well.- [Operator] And a final reminder for those on the phones,please press *1.And there are no final questions,I would like to hand the call back over to David Schwimmer,Chief Executive Officer. - Thank you.Before we wrap up, I would just liketo recognize Anna's huge contribution to LSEGover the last three years.She has been a great partner to me,to the executive committee, to the board,and she has combined a strong sense of strategic direction,high standards, rigorous attention to detail.We are sorry to see her go,but if I could pick out two amongthe many areas of contribution just to highlight,Anna played a critical role in drivingthe Microsoft partnership over the line,and of of course has played a critical rolein driving a lot of the integration,financial and otherwise around Refinitiv.She's had a great impact throughout the organizationculturally as a role model, great impact on her team.We all wish you the best,we will be watching your successes at Nestle,and thank you and congratulations.- Thank you. (audience applauding)- Think we're all set.(upbeat music)
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