RNS Number : 8829P
London Stock Exchange Group PLC
22 October 2021
 

 

 

London Stock Exchange Group plc: Q3 2021 Trading Statement

This release contains revenues and key performance indicators (KPIs) for the three months ended 30 September 2021 (Q3). All figures quoted in this release are on an underlying basis.  Figures are stated on both a statutory and pro-forma basis for Q3 2021 and Q3 2020. Pro-forma figures assume that the acquisition of Refinitiv took place on 1 January 2021 and the prior year comparator assumes that the acquisition of Refinitiv occurred on 1 January 2020. All pro-forma and statutory figures exclude the financial contribution from Borsa Italiana which was divested in H1 2021. Constant currency variance is calculated on the basis of consistent FX rates applied across the current and prior year period, the conversions have been made from the transactional values, which will eliminate any transactional and translational movements along with any related accounting adjustments. For more information, please refer to the "Accounting and modelling notes" section below. Organic variances have been removed from our disclosure due to the large variances associated with the acquisition of Refinitiv.

Highlights

Note: Unless otherwise stated, variances refer to Q3 growth rates on a pro-forma constant currency basis, excluding the impact of a deferred revenue accounting adjustment1, to provide the best view of underlying performance

·    Strong performance across all divisions driving 7.6% growth in Q3 total income1 and gross profit growth of 7.3%

·    Continued good progress on the integration of Refinitiv and comfortably on target for full year run-rate cost synergy delivery of £125 million, ahead of original phasing; 10 new products launched in Q3 as part of revenue synergy programme, taking the total to 37 year-to-date

·    Data & Analytics revenue grew 6.0% and continues to perform well with growth in Annual Subscription Value increasing from 3.9% at H1 to 4.0% in Q3, reflecting strength in subscription-based new business wins

·    Capital Markets revenue grew 17.2% driven by double-digit growth at Tradeweb, strong primary issuance within Equities and good dealer-to-client volumes at FXall

·    Post Trade revenue grew 11.5% driven by increased clearing activity from both new and existing customers; total income up 2.3%, reflecting lower investment returns in Net Treasury Income compared to the strong comparator in Q3 2020

·    Year-to-date total income1 grew 5.6%, reflecting the good performance across the Group

·    As previously guided, the Group expects total income1 to grow between 4-5% for full year 2021, with Q4 2021 income not expected to grow as fast as Q3 on a constant currency basis due to the strong comparator in Q4 2020; no change to previous cost or capex guidance although supply chain pressures may impact timing of some technology spend this year

·    The Group's second Investor Education Event on 1 October confirmed the strong growth ambitions for Data & Analytics, with revenues to increase by 4-6% annually over the medium term, reflecting multiple supportive trends and our ongoing focus on rigorous performance management and improvement of the customer experience. FX trading is also well-positioned for continued growth in electronic trading and the planned migration to new technology will strengthen it further. Replays of the two Investor Education Events are available online

1 Excluding recoveries and a deferred revenue accounting impact. As previously stated, the 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 have been re-evaluated upon acquisition by LSEG under purchase price accounting rules. The result of this accounting treatment is a £1m adjustment reducing revenue for Q3 2021, (£24m reduction for Q3 YTD). The vast majority impacts the Data & Analytics business with a smaller impact applied to the FX venues business within Capital Markets. There will be further immaterial impacts in Q4 2021. Further information is available in the "Accounting and modelling notes" section. Constant currency variance shows underlying financial performance, excluding currency impacts, by comparing the current and prior year periods at consistent exchange rates. 

 

David Schwimmer, CEO said:

"The Group has delivered a strong Q3 financial performance with revenue growth across all divisions.

"We are making excellent progress on the integration of Refinitiv and are comfortably on-track to achieve £125 million of cost synergies in 2021, ahead of our original phasing. We continue to execute across a number of workstreams to deliver the target revenue synergies. The Group is well placed as we make targeted investments in product and technology enhancements to help us meet the needs of our customers and capitalise on the growth trends driving change across our industry."

 

Q3 2021 Summary - Pro-forma

For the pro-forma table, variances are provided on a reported and constant currency basis. Commentary is provided on the constant currency variance (excluding deferred revenue adjustment) to provide the best insight into underlying performance. Please refer to the "Accounting and modelling notes" section for more information on relevant accounting adjustments.

 

Pro-forma underlying1

Continuing operations

Q3 2021
£m

Q3 2020
£m

Reported Variance 2
%

 

Constant Currency Variance 3
%

Constant Currency Variance (excl. deferred revenue adjustment) 3,4
%

 

 

 

 

 

 

 

Trading & Banking Solutions

372 

399 

(6.8%)

 

(0.5%)

(0.3%)

Enterprise Data Solutions

283 

290 

(2.4%)

 

4.1% 

4.1% 

Investment Solutions

293 

278 

5.4% 

 

11.1%

11.1% 

Wealth Solutions

115 

123 

(6.5%)

 

(0.8%)

(0.8%)

Customer & Third-Party Risk Solutions

92 

69 

33.3% 

 

40.6% 

40.6% 

Data & Analytics

1,155 

1,159 

(0.3%)

 

5.9% 

6.0% 

 

 

 

 

 

 

 

Equities

60 

52 

15.4% 

 

15.4% 

15.4% 

FX

56 

56 

- 

 

7.1% 

7.1% 

Fixed Income, Derivatives & Other

195 

170 

14.7% 

 

21.1% 

21.1% 

Capital Markets

311 

278 

11.9% 

 

17.2% 

17.2% 

 

 

 

 

 

 

 

OTC Derivatives

86 

80 

7.5% 

 

11.4% 

11.4% 

Securities & Reporting

61 

58 

5.2% 

 

8.8% 

8.8% 

Non-Cash Collateral

24 

21 

14.3% 

 

19.0% 

19.0% 

Net Treasury Income

47 

63 

(25.4%)

 

(21.0%)

(21.0%)

Post Trade

218 

222 

(1.8%)

 

2.3% 

2.3% 

 

 

 

 

 

 

 

Other

9 

6 

- 

 

- 

- 

Total Income (excl. recoveries)

1,693 

1,665 

1.7% 

 

7.5% 

7.6% 

Recoveries

90 

82 

9.8% 

 

(1.1%)

(1.1%)

Total Income (incl. recoveries)

1,783 

1,747 

2.1% 

 

7.1% 

7.2% 

 

 

 

 

 

 

 

Cost of sales

(228)

(228)

- 

 

5.7% 

5.7% 

Gross Profit

1,555 

1,519 

2.4% 

 

7.2% 

7.3% 

1 Pro-forma underlying assumes that the acquisition of Refinitiv took place on 1 January 2021 for the current financial year and 1 January 2020 for the prior financial year comparator figure. Both figures exclude the financial contribution from the businesses contained within the Borsa Italiana divestment

2  Reported variance is the difference between current and prior year periods on a pro-forma underlying basis, using year-to-date FX rates prevalent in each period, therefore any changes in the FX rates are also reflected in the variance percentage alongside business performance. The Q3 results are derived by deducting the H1 results, which have been translated using the average exchange rates for the 6 months to 30 June 2021, from the 9 months figure

3 Constant currency variance shows underlying financial performance, excluding currency impacts, by comparing the current and prior period at consistent exchange rates

4 The deferred revenue adjustment is explained in the "Accounting and modelling notes" section

 

Pro-forma1 Q3 2021 Highlights

·    Data & Analytics: revenues up 6.0%

o Annual Subscription Value growth for the division increased from 3.9% at H1, to 4.0% at Q3; ahead of the subscription revenue growth in Q3 year-to-date of 3.5%. This indicates that the current book of business covered by the ASV metric (c.87% of Data & Analytics revenue) is growing faster than the associated subscription revenues so far this year

o Trading & Banking Solutions revenues down 0.3% - Banking segment delivered a good performance, reflecting product and customer service enhancements, including Workspace; in the Trading segment the pace of decline in Eikon Premium continues to slow

o Enterprise Data Solutions revenues up 4.1% - strong sales in the period in Pricing & Reference Services (PRS) and Real Time Data, with low, early-stage revenue synergies now contributing

o Investment Solutions revenues up 11.1% - double-digit growth in Benchmark Rates, Indices & Analytics with good sales. Asset-based ETF AUM remained above $1 trillion with strong growth

o Wealth Solutions revenues down 0.8% - Advisor & Investor Services revenues were flat as cancellations offset new client wins. Operations Management (BETA) saw a small decline in revenue despite increased volumes due to the mix of customers using the service

o Customer & Third-Party Risk Solutions revenues up 40.6% - strong growth continues, with double-digit growth at World-Check, GIACT and Due Diligence

·    Capital Markets: revenues up 17.2% 

o Equities revenues up 15.4% - large scale and high-profile listings on London Stock Exchange, the world's most international exchange. Secondary markets revenues have grown due to higher volumes across our orderbooks

o FX revenues up 7.1% - strong volumes in dealer-to-client (FXall) driving growth, reflecting the investment in new product capabilities, relationship management and better customer service

o Fixed Income, Derivatives & Other revenues up 21.1% - Tradeweb2 continues to grow strongly, as it expands its offering to meet demand from increased electronification of trading markets

·    Post Trade: revenue up 11.5%; total income up 2.3% (impacted by Net Treasury Income)

o OTC Derivatives revenues up 11.4% - strong performance across services with increased SwapClear revenues driven by growth in the number of active clients

o Securities & Reporting revenues up 8.8% - RepoClear activity growth continues to drive revenue with record volumes in September across Euro debt clearing

o Non-Cash Collateral revenues up 19.0% - partly due to increased activity at SwapClear and RepoClear

o Net Treasury Income down 21.0% - rate of investment return reduced compared to a strong comparator in Q3 2020, alongside flat cash collateral balances. NTI expected to continue at current levels for time being

1 Pro-forma assumes that the acquisition of Refinitiv took place on 1 January 2021 for the current financial year and 1 January 2020 for the prior financial year comparator figure. Both figures exclude the financial contribution from the businesses contained within the Borsa Italiana divestment

2 Tradeweb Q3 2021 results will be released on 28 October 2021

 

Q3 2021 Summary - Statutory

Unless otherwise stated, all figures refer to continuing operations for the three months ended 30 September 2021 (Q3 2021). Comparative figures are for continuing operations for the three months ended 30 September 2020 (Q3 2020).

 

 

Statutory underlying1

Continuing operations

Q3 2021
£m

Q3 2020
£m

 

 

 

Trading & Banking Solutions

372 

4 

Enterprise Data Solutions

283 

32 

Investment Solutions

293 

172 

Wealth Solutions

115 

- 

Customer & Third-Party Risk Solutions

92 

- 

Data & Analytics

1,155 

208 

 

 

 

Equities

60 

52 

FX

56 

- 

Fixed Income, Derivatives & Other

195 

16 

Capital Markets

311 

68 

 

 

 

OTC Derivatives

86 

80 

Securities & Reporting

61 

58 

Non-Cash Collateral

24 

21 

Net Treasury Income

47 

63 

Post Trade

218 

222 

 

 

 

Other

9 

- 

Total Income (excl. recoveries)

1,693 

498 

Recoveries

90 

- 

Total Income (incl. recoveries)

1,783 

498 

 

 

 

Cost of sales

(228)

(44)

Gross Profit

1,555 

454 

1 Statutory underlying figures for Q3 2021 are equivalent to the pro-forma figures presented. Figures associated with the Borsa Italiana Group divestment are excluded from Q3 2020

 

Contacts: London Stock Exchange Group plc

 

Investors

 

 

Paul Froud - Group Head of Investor Relations

ir@lseg.com

 

Media

 

Lucie Holloway / Rhiannon Davies - Financial Communications

+44 (0) 20 7797 1222

newsroom@lseg.com

       

 

Additional information can be found at www.lseg.com 

 

Q3 investor and analyst conference call:

The Group will host an audio-only webcast and conference call on its Q3 Trading Statement for analysts and institutional shareholders today at 09:00am (UK time). On the call will be David Schwimmer (Chief Executive Officer), Anna Manz (Chief Financial Officer) and Paul Froud (Group Head of Investor Relations).

 

To access the telephone conference call or webcast please register in advance using the following link and instructions below:

 

https://www.lsegissuerservices.com/spark/LondonStockExchangeGroup/events/1be2d3b3-dddc-4d42-8827-12facb646b4f 

 

·     Please register with your full name, company name and email address.

·     If you wish to participate in Q&A, questions can be provided in written form via the Q&A tool on the webcast page or by emailing the LSEG Investor Relations team at . Questions can be submitted in advance and during the event itself, with written questions prioritised

·     If you wish to ask a question live, you will need to register for the telephone conference call. The telephone conference registration link can be found in the link above and here:

 

As is normal with quarterly trading statements, there will be no slides published for Q3.

 

Accounting and modelling notes

Reclassified revenues within Trading & Banking

 

In the 2021 Q3 results, there has been a small reclassification of revenues within Trading & Banking, with revenue moving from Trading into Banking to better align with our operating model. The income by quarter table in the appendix has been adjusted to reflect the changes. 

 

Renamed revenue lines

 

The following revenue lines have been renamed to better describe our business. Beyond the names, there have been no further changes to the businesses or revenues within the lines.

 

Investment Solutions

·     Benchmark Rates, Indices & Analytics - was previously named 'Index - Subscription'

·     Index - Asset-Based - was previously named 'Index - AUM'

·     Data & Workflow - was previously named 'Investment Solutions Data & Analytics'

 

Wealth Solutions

·     Advisor & Investor Services - was previously named 'Wealth Data & Analytics'

·     Operations Management (BETA) - was previously named 'BETA'

 

Deferred revenue accounting adjustment

 

As a result of the acquisition of Refinitiv and the associated purchase price accounting rules, Refinitiv's deferred revenue balances are subject to a one-time haircut at the time of acquisition. This is a non-cash adjustment. Q3 2021 saw a £1 million negative revenue impact following £22 million in Q1 and £1 million in Q2. The remaining impact will be immaterial in Q4 2021. The impact is mostly in the Group's Data & Analytics division, with a much smaller impact on the Group's FX venues business sitting within Capital Markets.

 

An adjusted variance, excluding the deferred revenue adjustment, has been presented to show true underlying business growth on the prior year.

 

FX conversion

 

As a result of the acquisition of Refinitiv, the majority of LSEG revenues and expenses are in USD followed by GBP, EUR and other currencies. All guidance given by LSEG, including the longer-term targets associated with the acquisition of Refinitiv as well as specific guidance for the 2021 financial year, has been given on a constant currency basis.

 

The results for the 9 months to 30 September 2021 have been translated into Sterling using the average exchange rates for the period. The Q3 results are then derived by deducting the H1 results, which have been translated using the average exchange rates for the 6 months to 30 June 2021. The rates for the largest two currency pairs are shown in the table below.

 

 

Average rate
9 months ended
30-Sep-21

Closing rate at
30-Sep-21

Average rate
9 months ended
30-Sep-20

Closing rate at
30-Sep-20

GBP : USD

1.385

1.343

1.271

1.287

GBP : EUR

1.157

1.157

1.131

1.095

 

Divisional revenue, gross profit and non-financial KPIs

1.   Data & Analytics

Pro-forma1

Continuing operations

Q3 2021
£m

Q3 2020
£m

Reported Variance 2
%

 

Constant Currency Variance 3
%

Constant Currency Variance (excl. deferred revenue adjustment) 3,4
%

 

 

 

 

 

 

 

Trading & Banking Solutions

372 

399 

(6.8%)

 

(0.5%)

(0.3%)

    Trading

295 

318 

(7.2%)

 

(0.6%)

(0.6%)

    Banking

77 

81 

(4.9%)

 

0.9% 

1.2% 

Enterprise Data Solutions

283 

290 

(2.4%)

 

4.1% 

4.1% 

    Real Time Data

182 

191 

(4.7%)

 

2.6% 

2.6% 

    PRS

101 

99 

2.0% 

 

8.1% 

8.1% 

Investment Solutions

293 

278 

5.4% 

 

11.1% 

11.1% 

    Benchmark Rates, Indices & Analytics

135 

125 

8.0% 

 

12.8% 

12.8% 

    Index - Asset-Based

62 

56 

10.7% 

 

15.8% 

15.8% 

    Data & Workflow

96 

97 

(1.0%)

 

5.2% 

5.2% 

Wealth Solutions

115 

123 

(6.5%)

 

(0.8%)

(0.8%)

    Advisor & Investor Services

69 

71 

(2.8%)

 

- 

- 

    Operations Management (BETA)

46 

52 

(11.5%)

 

(1.1%)

(1.1%)

Customer & Third-Party Risk Solutions

92 

69 

33.3% 

 

40.6% 

40.6% 

Total Revenue (excl. recoveries)

1,155 

1,159 

(0.3%)

 

5.9% 

6.0% 

Recoveries

90 

82 

9.8% 

 

(1.1%)

(1.1%)

Total Revenue (incl. recoveries)

1,245 

1,241 

0.3% 

 

5.5% 

5.6% 

Cost of sales

(191)

(195)

(2.1%)

 

3.6% 

3.6% 

Gross Profit

1,054 

1,046 

0.8% 

 

5.9% 

6.0% 

 

Pro-forma Non-financial KPIs1

 

Q3 2021

Q3 2020

Reported Variance

%

 

 

 

 

Annual Subscription Value growth (%) 5

4.0%

-

-

Subscription revenue growth (%) 5, 6

3.5%

-

-

Index - ETF AUM ($bn)

1,036

718

44%

Index - ESG Passive AUM ($bn) 7

132

46

187%

BETA transaction volumes (m)

130

121

7%

1 Pro-forma assumes that the acquisition of Refinitiv took place on 1 January 2021 for the current financial year and 1 January 2020 for the prior financial year comparator figure. Both figures exclude the financial contribution from the businesses contained within the Borsa Italiana divestment

2 Reported variance is the difference between current and prior year periods on a pro-forma underlying basis, using year-to-date FX rates prevalent in each period, therefore any changes in the FX rates are also reflected in the variance percentage alongside business performance. The Q3 results are derived by deducting the H1 results, which have been translated using the average exchange rates for the 6 months to 30 June 2021, from the 9 months figure

3 Constant currency variance shows underlying financial performance, excluding currency impacts, by comparing the current and prior period at consistent exchange rates

4 The deferred revenue adjustment is explained in the "Accounting and modelling notes" section

5 The variance is a constant currency variance excluding the impact of the deferred revenue accounting adjustment

6 The growth rate is based on Q3 year-to-date

7 ESG Passive AUM is as at 31 December 2020 and prior period comparator is at 31 December 2019 and is as presented at H1 2021. The metric is updated bi-annually with June 2021 available at our 2021 Preliminary Results

 

2.   Capital Markets

Pro-forma1

Continuing operations

Q3 2021
£m

Q3 2020
£m

Reported Variance 2
%

 

Constant Currency Variance 3
%

Constant Currency Variance (excl. deferred revenue adjustment) 3,4
%

 

 

 

 

 

 

 

Equities

60 

52 

15.4%

 

15.4%

15.4%

FX

56 

56 

-

 

7.1%

7.1%

Fixed Income, Derivatives & Other

195 

170 

14.7%

 

21.1%

21.1%

Total Revenue

311 

278 

11.9%

 

17.2%

17.2%

Cost of sales

(7)

(6)

16.7%

 

16.7%

16.7%

Gross Profit

304 

272 

11.8%

 

17.2%

17.2%

 

Pro-forma Non-financial KPIs1

 

 

Q3 2021

Q3 2020

Reported Variance
%

Equities

 

 

 

Primary Markets

 

 

 

New issues

45

12  

275% 

Total money raised (£bn)

6.9

8.3  

(17%)

 

 

 

 

Secondary Markets - Equities

 

 

 

UK Value Traded (£bn) - Average Daily Value

4.1

3.8  

8% 

SETS Yield (bps)

0.75

0.76  

(1%)

 

 

 

 

FX

 

 

 

Average daily total volume ($bn)

426

416  

2% 

 

 

 

 

Fixed income, Derivatives and Other

 

 

 

Tradeweb Average Daily ($m)

 

 

 

Rates - Cash

337,167

311,033  

8% 

Rates - Derivatives

246,981

179,054

38% 

 

 

 

 

Credit - Cash

8,440

7,036  

20% 

Credit - Derivatives

13,796

12,507  

10% 

1 Pro-forma assumes that the acquisition of Refinitiv took place on 1 January 2021 for the current financial year and 1 January 2020 for the prior financial year comparator figure. Both figures exclude the financial contribution from the businesses contained within the Borsa Italiana divestment

2 Reported variance is the difference between current and prior year periods on a pro-forma underlying basis, using year-to-date FX rates prevalent in each period, therefore any changes in the FX rates are also reflected in the variance percentage alongside business performance. The Q3 results are derived by deducting the H1 results, which have been translated using the average exchange rates for the 6 months to 30 June 2021, from the 9 months figure

3 Constant currency variance shows underlying financial performance, excluding currency impacts, by comparing the current and prior period at consistent exchange rates

4 The deferred revenue adjustment is explained in the "Accounting and modelling notes" section

 

3.   Post Trade

Pro-forma1

 Continuing operations

Q3 2021
£m

Q3 2020
£m

Reported Variance 3
%

 

Constant Currency Variance 4
%

 

 

 

 

 

 

OTC Derivatives

86 

80 

7.5% 

 

11.4% 

Securities & Reporting

61 

58 

5.2% 

 

8.8% 

Non-Cash Collateral

24 

21 

14.3% 

 

19.0% 

Total Revenue

171 

159 

7.5% 

 

11.5% 

Net Treasury Income

47 

63 

(25.4%)

 

(21.0%)

Total Income

218 

222 

(1.8%)

 

2.3% 

Cost of sales 2

(30)

(26)

15.4% 

 

24.0% 

Gross Profit

188 

196 

(4.1%)

 

(0.5%)

 

Pro-forma Non-financial KPIs1

 

Q3 2021

Q3 2020

Reported Variance
%

 

 

 

 

OTC

 

 

 

SwapClear

 

 

 

IRS notional cleared ($trn)

        202

       209

(3%)

SwapClear members

        122

        122

- 

Client trades ('000)

     516

        367

41% 

Client average 10-year notional equivalent ($trn)

             3.8 

3.2

19% 

 

 

 

 

ForexClear

 

 

 

Notional cleared ($bn)

     5,528

     4,556

21% 

ForexClear members

          35

          35

- 

 

 

 

 

CDSClear

 

 

 

Notional cleared (€bn)

        467

        495

(6%)

CDSClear members

        25

          26

(4%)

 

 

 

 

Securities & Reporting

 

 

 

EquityClear trades (m) 5

        493

        424

16% 

Listed derivatives contracts (m)

          66.3

          70.8

(6%)

RepoClear - nominal value (€trn)

          62.0

          52.1

19% 

 

 

 

 

Non-Cash Collateral

 

 

 

Average non-cash collateral (€bn)

       167.2

        165.5

1% 

 

 

 

 

Net Treasury Income

 

 

 

Average cash collateral (€bn)

        103.9

        103.9

-

1 Pro-forma assumes that the acquisition of Refinitiv took place on 1 January 2021 for the current financial year and 1 January 2020 for the prior financial year comparator figure. Both figures exclude the financial contribution from the businesses contained within the Borsa Italiana divestment

2 Cost of sales incorporates the elimination of intercompany transactions in the Post Trade division as part of the pro-forma financial disclosure

3 Reported variance is the difference between current and prior year periods on a pro-forma underlying basis, using year-to-date FX rates prevalent in each period, therefore any changes in the FX rates are also reflected in the variance percentage alongside business performance. The Q3 results are derived by deducting the H1 results, which have been translated using the average exchange rates for the 6 months to 30 June 2021, from the 9 months figure

4 Constant currency variance shows underlying financial performance, excluding currency impacts, by comparing the current and prior period at consistent exchange rates

5 EquityClear trades exclude interoperability trades, these will differ to the volumes published on the LCH website which includes these trades

 

Appendix - Pro-forma1 Q3 YTD results

The table below shows LSEG's pro-forma results to gross profit for the nine months ended 30 September 2021.

 

Pro-forma underlying1

Continuing operations

Q3 9m 2021
£m

Q3 9m 2020
£m

Reported Variance 2
%

 

Constant Currency Variance 3
%

Constant Currency Variance (excl. deferred revenue adjustment) 3,4
%

 

 

 

 

 

 

 

Trading & Banking Solutions

1,116 

1,205 

(7.4%)

 

(1.0%)

(0.3%)

Enterprise Data Solutions

840 

872 

(3.7%)

 

2.3% 

3.0% 

Investment Solutions

851 

832 

2.3% 

 

8.8% 

9.2% 

Wealth Solutions

353 

380 

(7.1%)

 

0.3% 

0.5% 

Customer & Third-Party Risk Solutions

267 

205 

30.2% 

 

38.2% 

39.7% 

Data & Analytics

3,427 

3,494 

(1.9%)

 

4.6% 

5.2% 

 

 

 

 

 

 

 

Equities

180 

170 

5.9% 

 

4.7% 

4.7% 

FX

166 

177 

(6.2%)

 

1.7% 

1.7% 

Fixed Income, Derivatives & Other

584 

531 

10.0% 

 

17.6% 

17.6% 

Capital Markets

930 

878 

5.9% 

 

12.0% 

12.0% 

 

 

 

 

 

 

 

OTC Derivatives

255 

249 

2.4% 

 

4.4% 

4.4% 

Securities & Reporting

188 

168 

11.9% 

 

13.0% 

13.0% 

Non-Cash Collateral

70 

61 

14.8% 

 

18.0% 

18.0% 

Net Treasury Income

155 

212 

(26.9%)

 

(23.6%)

(23.6%)

Post Trade

668 

690 

(3.2%)

 

(0.9%)

(0.9%)

 

 

 

 

 

 

 

Other

24 

23 

4.3% 

 

8.7% 

8.7% 

Total Income (excl. recoveries)

5,049 

5,085 

(0.7%)

 

5.2% 

5.6% 

Recoveries

268 

246 

8.9% 

 

(1.1%)

(0.8%)

Total Income (incl. recoveries)

5,317 

5,331 

(0.3%)

 

4.8% 

5.3% 

 

 

 

 

 

 

 

Cost of sales

(682)

(714)

(4.5%)

 

2.0% 

2.0% 

Gross Profit

4,635 

4,617 

0.4% 

 

5.3% 

5.8% 

 

1 Pro-forma underlying assumes that the acquisition of Refinitiv took place on 1 January 2021 for the current financial year and 1 January 2020 for the prior financial year comparator figure. Both figures exclude the financial contribution from the businesses contained within the Borsa Italiana divestment

2  Reported variance is the difference between current and prior year periods on a pro-forma underlying basis, using year-to-date FX rates prevalent in each period, therefore any changes in the FX rates are also reflected in the variance percentage alongside business performance

3 Constant currency variance shows underlying financial performance, excluding currency impacts, by comparing the current and prior period at consistent exchange rates

4 The deferred revenue adjustment is explained in the "Accounting and modelling notes" section

 

Appendix - Statutory1 Q3 YTD results

The table below shows LSEG's pro-forma results to gross profit for the nine months ended 30 September 2021.

 

Statutory underlying1

Continuing operations

Q3 9m 2021
£m

Q3 9m 2020
£m

 

 

 

Trading & Banking Solutions

991 

13 

Enterprise Data Solutions

755 

96 

Investment Solutions

818 

508 

Wealth Solutions

311 

- 

Customer & Third-Party Risk Solutions

239 

- 

Data & Analytics

3,114 

617 

 

 

 

Equities

180 

170 

FX

147 

- 

Fixed Income, Derivatives & Other

526 

45 

Capital Markets

853 

215 

 

 

 

OTC Derivatives

255 

249 

Securities & Reporting

188 

168 

Non-Cash Collateral

70 

61 

Net Treasury Income

155 

212 

Post Trade

668 

690 

 

 

 

Other

23 

4 

Total Income (excl. recoveries)

4,658 

1,526 

Recoveries

238 

- 

Total Income (incl. recoveries)

4,896 

1,526 

 

 

 

Cost of sales

(622)

(158)

Gross Profit

4,274 

1,368 

1 Statutory underlying figures for Q3 9 months 2021 incorporate figures from Refinitiv for February to September 2021. Figures associated with the Borsa Italiana Group divestment are excluded from both periods

 

Appendix - Pro-forma1 income by type

 

 

Pro-forma underlying1

Continuing operations

Q3 2021
£m

Q3 2020
£m

Reported Variance 2
%

 

Constant Currency Variance 3
%

Constant Currency Variance (excl. deferred revenue adjustment) 3, 4
%

 

 

 

 

 

 

 

Recurring

1,180

1,196

(1.3%)

 

4.7% 

4.9% 

Transactional

457

401

14.0% 

 

19.7% 

19.7% 

Net Treasury Income

47

63

(25.4%)

 

(21.0%)

(21.0%)

Other income

9

6

- 

 

- 

- 

Total income (excl. recoveries)

1,693

1,665

1.7% 

 

7.5% 

7.6% 

Recoveries

90

82

9.8% 

 

(1.1%)

(1.1%)

Total income (incl. recoveries)

1,783

1,747

2.1% 

 

7.1% 

7.2% 

 

1 Pro-forma underlying assumes that the acquisition of Refinitiv took place on 1 January 2021 for the current financial year and 1 January 2020 for the prior financial year comparator figure. Both figures exclude the financial contribution from the businesses contained within the Borsa Italiana divestment

2 Reported variance is the difference between current and prior year periods on a pro-forma underlying basis, using year-to-date FX rates prevalent in each period, therefore any changes in the FX rates are also reflected in the variance percentage alongside business performance. The Q3 results are derived by deducting the H1 results, which have been translated using the average exchange rates for the 6 months to 30 June 2021, from the 9 months figure

3 Constant currency variance shows underlying financial performance, excluding currency impacts, by comparing the current and prior period at consistent exchange rates

4 The deferred revenue adjustment is explained in the "Accounting and modelling notes" section

 

Appendix - Pro-forma1 income by quarter

The table below has used FX rates on a YTD average basis which is the basis upon which the Group presents its financials. The split between Trading and Banking has been updated to recognise the reclassification at Q3 2021.

£m

Q1

Q2

Q3

Q4

2020

 

Q1

Q2

Q3

 

 

 

 

 

 

 

 

 

 

Trading & Banking Solutions

396 

410 

399 

391 

1,596 

 

372 

372 

372 

    Trading

316 

328 

318 

311 

1,273 

 

296 

295 

295 

    Banking

80 

82 

81 

80 

323 

 

76 

77 

77 

Enterprise Data Solutions

285 

297 

290 

291 

1,163 

 

277 

280 

283 

    Real Time Data

187 

197 

191 

191 

766 

 

177 

182 

182 

    PRS

98 

100 

99 

100 

397 

 

100 

98 

101 

Investment Solutions

272 

282 

278 

279 

1,111 

 

272 

286 

293 

    Benchmark Rates, Indices & Analytics

118 

127 

125 

125 

495 

 

121 

126 

135 

    Index - Asset-Based

58 

54 

56 

57 

225 

 

58 

64 

62 

    Data & Workflow

96 

101 

97 

97 

391 

 

93 

96 

96 

Wealth Solutions

126 

131 

123 

120 

500 

 

122 

116 

115 

    Advisor & Investor Services

66 

72 

71 

69 

278 

 

69 

70 

69 

    Operations Management (BETA)

60 

59 

52 

51 

222 

 

53 

46 

46 

Customer & Third-Party Risk Solutions

67 

69 

69 

78 

283 

 

85 

90 

92 

Data & Analytics

1,146 

1,189 

1,159 

1,159 

4,653 

 

1,128 

1,144 

1,155 

 

 

 

 

 

 

 

 

 

 

Equities

62 

56 

52 

57 

227 

 

61 

59 

60 

FX

64 

57 

56 

57 

234 

 

57 

53 

56 

Fixed Income, Derivatives & Other

186 

175 

170 

178 

709 

 

201 

188 

195 

Capital Markets

312 

288 

278 

292 

1,170 

 

319 

300 

311 

 

 

 

 

 

 

 

 

  

 

OTC Derivatives

87 

82 

80 

85 

334 

 

87 

82 

86 

Securities & Reporting

59 

51 

58 

62 

230 

 

65 

62 

61 

Non-Cash Collateral

19 

21 

21 

21 

82 

 

22 

24 

24 

Net Treasury Income

67 

82 

63 

57 

269 

 

55 

53 

47 

Post Trade

232 

236 

222 

225 

915 

 

229 

221 

218 

 

 

 

 

 

 

 

 

 

 

Other

11 

6 

6 

6 

29 

 

5 

10 

9 

Total Income (excl. recoveries)

1,701 

1,719 

1,665 

1,682 

6,767 

 

1,681 

1,675 

1,693 

Recoveries

87 

77 

82 

92 

338 

 

88 

90 

90 

Total Income (incl. recoveries)

1,788 

1,796 

1,747 

1,774 

7,105 

 

1,769 

1,765 

1,783 

Cost of sales

(242)

(244)

(228)

(232)

(946)

 

(231)

(223)

(228)

Gross Profit

1,546 

1,552 

1,519 

1,542 

6,159 

 

1,538 

1,542 

1,555 

1Pro-forma assumes that the acquisition of Refinitiv took place on 1 January 2021 for the current financial year and 1 January 2020 for the prior financial year comparator figure. All figures exclude the financial contribution from the businesses contained within the Borsa Italiana divestment

 

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