August 03, 2023
London Stock Exchange Group plc Interim results for six months ended 30 June 2023
Delivering on our growth potential: strong H1 performance; 2023 revenue growth expected to be towards the upper end of 6-8% guidance
David Schwimmer, CEO said:
“LSEG delivered strong, broad-based growth in the first half. Data & Analytics is growing faster than it has for many years, with the ongoing improvements to our offering and strengthened customer relationships increasingly reflected in financial performance. Post Trade once again demonstrated the critical role it plays in helping customers manage risk in uncertain markets, delivering outstanding growth. Our Capital Markets businesses also made progress, despite a very strong prior period. LSEG’s resilient business model and the quality of our earnings, diversified by customer, geography, product and asset class, position us well for further growth in the second half and beyond.
“Through our multi-year investment programme we are delivering better solutions and higher customer satisfaction, and building a faster-growing, more scalable business. We are progressing well with the implementation phase of our transformational strategic partnership with Microsoft, with customers beginning to see the benefits from next year.”
| Six months ending 30 June, reported | 2023 £m |
2022 £m |
Variance % |
Constant currency variance % | Organic variance % |
| Total income (excl. recoveries) | 3,990 | 3,569 | 11.8% | 7.9% | 6.5% |
| Recoveries1 | 189 | 166 | 13.9% | 4.4% | 4.4% |
| Total income (incl. recoveries) | 4,179 | 3,735 | 11.9% | 7.8% | 6.4% |
| Adjusted2 | |||||
| EBITDA | 1,872 | 1,799 | 4.1% | 5.8% | 6.4% |
| EBITDA margin | 46.9% | 50.4% | |||
| Operating profit | 1,418 | 1,408 | 0.7% | 4.1% | 5.0% |
| Adjusted earnings per share | 160.9 | 167.4 | (3.9%) |
| Reported | |||||
| Operating profit | 729 | 897 | (18.7%) | ||
| Profit before tax | 662 | 803 | (17.6%) | ||
| Basic earnings per share |
77.2 |
98.0 |
(21.2%) |
||
| Dividends per share | 35.7 |
31.7 |
12.6% |
Financial highlights
(All growth rates relate to H1 and are expressed on a constant currency basis unless otherwise stated)
- Total income (excl. recoveries) up 7.9%; up 11.8% on a reported basis
- Accelerating growth in Q2: Total income (excl. recoveries) up 8.4% vs Q2 2022
- Broad-based growth: Data & Analytics +7.6%, Capital Markets +1.5%, Post Trade +19.2%
- Strong subscription revenue: organic annual subscription value (ASV) up 6.9% at June 2023, consolidating the significant improvements made over the last two years
- Good profitability: adjusted EBITDA up 5.8%. EBITDA and margin impacted by non-cash FX-related balance sheet adjustments. On track to deliver full year adjusted EBITDA margin around 48%3 excluding these items
- Basic EPS -21.2% on a reported basis; adjusted EPS -3.9% to 160.9 pence, impacted by non-cash FX items and higher effective tax rate
- Updated leverage target of 1.5-2.5x operating net debt to adjusted EBITDA (previously 1.0-2.0x) reflecting diversified and recurring nature of the Group’s revenues; day-to-day leverage expected around the middle of this range (H1 2023: 1.8x); no credit rating impact anticipated
Strategic progress and outlook
- Full year constant currency growth in total income (excl. recoveries) now expected to be towards the upper end of the +6-8% guidance range
- Other 2023 targets reiterated: adjusted EBITDA margin c.48%3, business-as-usual capex c.£750 million4
- Connecting our businesses: £107 million runrate revenue synergy delivery at end of H1; FXall/Tradeweb solution for EM debt now live
- Investing in our products: Acadia acquisition reinforces our leading position in Post Trade solutions; new FX Matching platform to launch in H2
- Harnessing the power of AI technologies: AI embedded in many products, incl. new Advanced Dealing solution for FX; partnering with customers as they deploy AI technologies
- Strong start to Microsoft partnership: good progress on product development, Design Partner Programme set up
- Significant shareholder returns: interim dividend +12.6% to 35.7p, £400 million returned via buyback in H1; up to £750 million directed buyback expected by April 2024
This release contains revenues, costs, earnings and key performance indicators (KPIs) for the six months ended 30 June 2023. Revenues and costs associated with the BETA divestment were classified as discontinued and excluded from the prior period. Constant currency variances are calculated on the basis of consistent FX rates applied across the current and prior year period. Organic growth is calculated on a constant currency basis, adjusting the results to remove disposals from the entirety of the current and prior year periods, and by including acquisitions from the date of acquisition with a comparable adjustment to the prior year. Within the financial information and tables presented, certain columns and rows may not add due to the use of rounded numbers for disclosure purposes.
1Recoveries mainly relate to fees for third-party content, such as exchange data, that is distributed directly to customers.
2For definition, see page 9.
3Based on GBP:USD of 1.21 and GBP:EUR of 1.14, excluding Acadia and non-cash balance sheet FX movements.
4 Excludes ROU assets.
About LSEG
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 70 countries across EMEA, North America, Latin America and Asia Pacific. We employ 23,000 people globally, more than half located in Asia Pacific. LSEG’s ticker symbol is LSEG.
Contacts: London Stock Exchange Group plc
Media:
Lucie Holloway / Rhiannon Davies
+44 (0)20 7797 1222
newsroom@lseg.com
Investor relations:
Peregrine Riviere / Chris Turner
ir@lseg.com
