October 21, 2022

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.

Continuing operations	Q3 2022 £m	Q3 2021 £m	Variance %	Constant Currency Variance %


Trading & Banking Solutions	417	373	11.8%	1.0%
Enterprise Data Solutions	332	284	16.9%	6.2%
Investment Solutions	344	294	17.0%	4.7%
Wealth Solutions	71	61	16.4%	5.0%
Customer & Third-Party Risk Solutions	110	92	19.6%	8.5%
Data & Analytics	1,274	1,104	15.4%	4.1%

Equities	60	60	0.0%	1.2%
FX	68	56	21.4%	4.3%
Fixed Income, Derivatives & Other	241	193	24.9%	12.1%
Capital Markets	369	309	19.4%	8.6%

OTC Derivatives	103	86	19.8%	14.5%
Securities & Reporting	55	60	(8.3%)	(7.4%)
Non-Cash Collateral	25	24	4.2%	0.8%
Net Treasury Income	66	47	40.4%	30.7%
Post Trade	249	217	14.7%	10.4%

Other	13	9	44.4%	23.4%
Total Income (excl. recoveries)	1,905	1,639	16.2%	5.9%
Recoveries	80	90	(11.1%)	4.5%
Total Income (incl. recoveries)	1,985	1,729	14.8%	5.9%
Cost of sales	(289)	(227)	27.3%	12.4%
Gross Profit	1,696	1,502	12.9%	4.9%

[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

Continuing operations	Q3 9m 2022 £m	Q3 9m 2021 £m

Trading & Banking Solutions	1,186	994
Enterprise Data Solutions	953	761
Investment Solutions	980	819
Wealth Solutions	202	163
Customer & Third-Party Risk Solutions	306	239
Data & Analytics	3,627	2,976

Equities	190	180
FX	191	147
Fixed Income, Derivatives & Other	708	521
Capital Markets	1,089	848

OTC Derivatives	294	255
Securities & Reporting	177	183
Non-Cash Collateral	74	70
Net Treasury Income	187	155
Post Trade	732	663

Other	25	22
Total Income (excl. recoveries)	5,474	4,510
Recoveries	246	238
Total Income (incl. recoveries)	5,720	4,747

Cost of sales	(793)	(619)
Gross Profit	4,927	4,128

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

Pro-forma Q3 YTD results


Continuing operations	Q3 9m 2022 £m	Q3 9m 2021 £m	Variance %	Constant Currency Variance %	Constant Currency Variance (excl. deferred revenue adjustment) 1 %

Trading & Banking Solutions	1,186	1,118	6.1%	0.3%	(0.4%)
Enterprise Data Solutions	953	845	12.8%	7.0%	6.2%
Investment Solutions	980	854	14.8%	7.3%	6.8%
Wealth Solutions	202	184	9.8%	3.7%	3.2%
Customer & Third-Party Risk Solutions	306	267	14.6%	8.5%	7.6%
Data & Analytics	3,627	3,268	11.0%	4.7%	4.0%

Equities	190	180	5.6%	5.6%	5.6%
FX	191	166	15.1%	5.7%	5.5%
Fixed Income, Derivatives & Other	708	580	22.1%	15.0%	15.0%
Capital Markets	1,089	926	17.6%	11.5%	11.5%

OTC Derivatives	294	255	15.3%	12.9%	12.9%
Securities & Reporting	177	183	(3.3%)	(1.2%)	(1.2%)
Non-Cash Collateral	74	70	5.7%	4.3%	4.3%
Net Treasury Income	187	155	20.6%	17.2%	17.2%
Post Trade	732	663	10.4%	9.1%	9.1%

Other	25	24	4.2%	0.3%	0.3%
Total Income (excl. recoveries)	5,474	4,881	12.1%	6.6%	6.1%
Recoveries	246	268	(8.2%)	3.5%	2.7%
Total Income (incl. recoveries)	5,720	5,149	11.1%	6.4%	5.9%
Cost of sales	(793)	(679)	16.8%	8.6%	8.6%
Gross Profit	4,927	4,470	10.2%	6.1%	5.6%

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

LSEG (London Stock Exchange Group) is a leading global financial markets infrastructure and data provider, playing a vital social and economic role in the world’s financial system.

With our open approach, trusted expertise and global scale, we enable the sustainable growth and stability of our customers and their communities. We are dedicated partners with extensive experience, deep knowledge and a worldwide presence in data and analytics; indices; capital formation; and trade execution, clearing and risk management across multiple asset classes. 

LSEG is headquartered in the United Kingdom, with significant operations in over 60 countries across EMEA, North America, Latin America and Asia Pacific. We employ 25,000 people globally, more than half located in Asia Pacific. LSEG’s ticker symbol is LSEG.