London Stock Exchange Group plc: Q3 2022 Trading Update

Broad based growth, sustained execution, guidance unchanged

David Schwimmer, CEO said:
“We have delivered another strong quarter, with good growth across all businesses. The consistency of delivery in recent quarters demonstrates the strength of our business model, generating quality recurring revenues from a range of services that are highly valued by our customers.

“Our strategy is working, delivering growth and increasing efficiency. We are investing organically for growth and completed the acquisition of TORA during the quarter to strengthen our offering in Trading & Banking. We are also making good progress on returning surplus capital to shareholders through our share buyback programme.

“With sustained execution, a broad base of businesses and leading market positions, we remain well positioned.”

Q3 2022 highlights

• Strong growth continues across all divisions: total income excluding recoveries up 16.2% on a reported basis, to £1,905m. Up 5.9% on a constant currency basis, and up 7.0% adjusting for Ukraine and Russia conflict impact[1]

• High-quality recurring revenue: like-for-like ASV growth continues to improve, up 5.8% in Q3 (up 280 basis points since Refinitiv acquisition in Q1 2021); driven by new sales and improved retention

• Continued good progress on integration: revenue and cost synergies in line with targets

• Active capital management:

- TORA acquisition completed, enhancing Trading & Banking Solutions in Data & Analytics; provisional clearance achieved for Quantile acquisition, expected to complete in Q4

- Share buyback: £235 million returned in Q3 as part of our active 12 month, £750 million share buyback programme

• Well-positioned for further growth: strong progress, no change to guidance or targets

Note: Unless otherwise stated, variances refer to growth rates relative to Q3 2021 on a constant currency basis

This release contains revenues, cost of sales and key performance indicators (KPIs) for the three months ended 30 September 2022 (Q3), certain columns and rows may not add due to the use of rounded numbers for disclosure purposes. Throughout this document, revenues and cost of sales associated with the BETA divestment, completed on 1 July 2022, and the Borsa Italiana divestment, completed in H1 2021, have been classed as discontinued and are excluded from all periods. To reflect underlying performance, all constant currency variances compare the current and prior period at consistent exchange rates. For more information on accounting treatments and approach to FX please refer to the “Accounting and modelling notes” section below.

[1] Growth rates excluding the Ukraine / Russia conflict impact exclude income in the region and from sanctioned customers and related business from both periods

Q3 2022 summary

The deferred revenue accounting adjustment[1] was immaterial to growth rates in Q3.

[1] The deferred revenue adjustment is further explained in the “Accounting and modelling notes” section

Q3 2022 business highlights
Constant currency basis

• Data & Analytics: revenues up 4.1%; up 5.4% excluding impact of Ukraine / Russia conflict, with good growth across all businesses. In particular:

- Trading & Banking Solutions: up 1.0%; up 3.5% excluding impact of Ukraine / Russia conflict with an improved product offering reflected in stronger sales and continued good retention. First time contribution from acquisition of TORA.
- Enterprise Data Solutions: up 6.2%; up 7.1% excluding impact of Ukraine / Russia conflict as investment in data content improved retention and sales growth; contribution of MayStreet’s low-latency capabilities.
- Investment Solutions: up 4.7%; continued strong growth across Benchmark, Indices and Analytics, up c.8% adjusting for prior year effects; resilient Asset-based revenues with encouraging product inflows.

• Capital Markets: revenues up 8.6% with strong demand for our services and benefit of volatility at the end of the quarter. In particular:

- Fixed Income, Derivatives & Other: strong performance at Tradeweb, with double-digit revenue growth across Rates, Credit, Equity and Money Market asset classes.

• Post Trade: total income up 10.4% reflecting strong demand for clearing services; good performance in OTC markets as we helped customers manage their risk in an uncertain market environment. Higher Net Treasury Income (NTI) reflects increased cash collateral (up 45% yoy to €151 billion).

• Cost of sales: up 12.4% reflecting strong SwapClear performance where revenue share arrangements are in place, additional cost of sales from acquisitions, and continued growth in Data & Analytics.

Share buyback programme

In August 2022, we announced a £750 million on-market share buyback programme through three tranches over a 12 month period. We made good progress in Q3, repurchasing 3.0 million shares for £235 million. The first tranche of £250 million (3.1 million shares) completed on 5 October 2022. The next tranche will commence on 1 December 2022.

Board appointment

William Vereker joined the Board as a Non-Executive Director with effect from 3 October 2022 and will also serve on the Risk, Remuneration and Nomination Committees. William brings a strong track record in the global financial services sector. His international experience in developing senior relationships, managing risk and organisational change will benefit the Group as we look to further capitalise on the trends shaping our industry.

Statutory[1] Q3 YTD results

[1] Statutory figures for 9 months to 30 Sep 2021 incorporate figures from Refinitiv for February to September 2021.

Pro-forma Q3 YTD results

[1] Excludes the deferred revenue adjustment further explained in the “Accounting and modelling notes” section

Contacts

Investors
Peregrine Riviere
Chris Turner – Investor Relations
ir@lseg.com

Media
Lucie Holloway
Rhiannon Davies – Financial Communications
+44 (0) 20 7797 1222
newsroom@lseg.com