London Stock Exchange Group plc Preliminary results for the year ended 31 December 2022

David Schwimmer, CEO said:

“LSEG has had a strong year, successfully integrating Refinitiv and significantly improving its performance, while also delivering strong results in our Capital Markets and Post Trade businesses. The resilience of our business model and the quality of our earnings, diversified by customer, geography, product and asset class, and over 70% subscription-based, are becoming increasingly clear.

“Our strategy is working. We are an increasingly important strategic partner to customers across the financial markets value chain, and that is translating into growth. We continue to invest in new products and services, and have completed four highly complementary acquisitions to further strengthen our offer. In addition to our existing share buyback, we are today announcing plans to seek shareholder approval for a buyback directed towards the Blackstone/Thomson Reuters consortium’s stake, which will benefit all shareholders.

“We are shifting from integration to transformation. Our strategic partnership with Microsoft, as well as the investments we are making in our market-leading infrastructure and venues, will create an even stronger platform for long-term sustainable growth.”

(all growth rates are expressed on a pro-forma constant currency basis, excluding the impact of the deferred revenue adjustment[1], unless otherwise stated)

• Full-year Total Income (excl. recoveries) up 5.7%, and up 6.6% excluding the impact of the Russia/Ukraine war[3]; up 19.6% on a reported basis
• Broad-based growth: Data & Analytics +4.2% (+5.3% ex Russia/Ukraine), Capital Markets +9.8%, Post Trade +7.5%
• Accelerating subscription revenue: Annual Subscription Value (ASV) up 6.2% (ex Russia/Ukraine) at December 2022; further progress expected in 2023
• Good cost control: opex +3.4% excluding the impact of acquisitions during the year
• Improving profitability: Adjusted EBITDA growth 6.0%, margin flat year-on-year, or up 110 basis points like-for-like[4] 
• Basic earnings per share growth +65.3% on a reported basis; AEPS +16.7% to 317.8 pence
• Continued strong cash generation: equity free cash flow (before dividends) £1.7 billion

• Strong and consistent execution on Refinitiv integration: Trading & Banking returned to growth; target 2022 runrate synergies delivered for both revenue and costs; runrate revenue synergy target raised from £225 million to £350-400 million by 2025
• From integration to transformation: strategic partnership with Microsoft for next generation of Workspace, innovative new solutions in modelling and analytics, and data platform in the cloud
• Active capital allocation towards growth: disposal of low-growth BETA business; four acquisitions completed in higher-growth areas, highly complementary to existing customer offering
• Significant shareholder returns: £300 million of £750 million buyback executed in 2022, balance to be completed by July 2023; full-year dividend +12.6% to 107.0 pence
• Seeking shareholder approval at the 2023 AGM for directed buyback from the Blackstone/Thomson Reuters consortium; expected to be up to £750 million by April 2024
• New guidance for 2023: constant currency revenue growth +6-8%, Adjusted EBITDA margin c.48%, business-as-usual capex c. £750 million (including Microsoft)

This release contains revenues, costs, earnings and key performance indicators (KPIs) for the twelve months ended 31 December 2022. FY 2022 is compared against FY 2021 on a statutory basis. Revenues and costs associated with the BETA divestment have been classed as discontinued and are excluded from all periods. Revenues and costs associated with the Borsa Italiana group divestment, which completed in 2021, are also excluded. Pro-forma constant currency variance assumes that the acquisition of Refinitiv took place on 1 January 2021 and is 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.

¹The deferred revenue impact is a one-time, non-cash, negative revenue impact resulting from the accounting treatment of deferred revenue within Refinitiv’s accounts which has been re-evaluated upon acquisition by LSEG under purchase price accounting rules. This reduced 2021 revenue by £23 million, mainly in Data & Analytics, with a smaller impact in the FX business within Capital Markets. There is no material impact in 2022.

² Recoveries mainly relate to fees for third-party content, such as exchange data, that is distributed directly to customers.

³ Growth rates excluding the Russia/Ukraine war impact have been calculated by excluding income in the region and from sanctioned customers and related business from both periods. This amounted to £80 million in 2021 and £18 million in Q1 2022, and nil beyond that.

⁴ The like-for-like margin calculation is on a constant currency pro-forma basis, and adjusts for the impact of the Russia/Ukraine war, acquisitions completed in 2022 and non-cash FX-related balance sheet adjustments. Adjusted EBITDA margin is adjusted EBITDA divided by Total Income (excl. recoveries).

Contacts

LSEG Press Office

Media:
Lucie Holloway / Rhiannon Davies
+44 (0)20 7797 1222
newsroom@lseg.com

Investor relations:
Peregrine Riviere / Chris Turner
ir@lseg.com

Additional information can be found at www.lseg.com