LONDON STOCK EXCHANGE GROUP PLC PRELIMINARY RESULTS FOR THE YEAR ENDED 31 DECEMBER 2020
Unless stated otherwise, all figures in the highlights below refer to 12 months to 31 December 2020 and comparisons with the prior 12 month period on the same basis.
- Strong financial performance – revenue growth continues across our businesses despite challenging market conditions
- Strong operational resilience across the Group’s data, trading and clearing platforms
- Successful completion of the acquisition of Refinitiv in January 2021 - transformational transaction brings together two highly complementary global businesses with a shared commitment to an Open Access philosophy, working in partnership with customers
- Acquisition will accelerate the Group’s growth strategy and position as a leading global financial markets infrastructure and data provider - increasing its global footprint and adding leading data, analytics and multi-asset class capital markets capabilities
- The Group is focused on delivering the strategic benefits of the transaction for customers, shareholders and broader stakeholders - extensive integration programme roll-out underway across the three core operating divisions: Data & Analytics, Capital Markets, and Post Trade
2020 Financial Highlights
- Total revenue up 3% to £2,124 million (2019: £2,056 million) and total income up 6% to £2,444 million (2019: £2,314 million) (up 5% on a constant currency basis)
- FTSE Russell revenue up 3% to £668 million (2019: £649 million) with growth in subscription revenues offset by a decline in asset-based revenues following significantly lower ETF AUM levels in H1
- Post Trade revenue up 7% to £751 million (2019: £700 million), driven by strong growth in LCH; record activity in CDS, FX and cash equities clearing; total income up 12% to £1,070 million (2019: £955 million), largely reflecting higher cash margin held
- Capital Markets revenue broadly flat on a reported basis at £427 million, and up 8% on a like-for-like basis excluding the one-off benefit of an IFRS 15 adjustment in prior year with strong performance in secondary markets
- Adjusted operating expenses, before depreciation and amortisation1, were up 6% (up 5% on a constant currency basis) to £887 million (2019: £839 million)
- Adjusted operating profit2 up 5% to £1,118 million (2019: £1,065 million); operating profit up 2% to £755 million (2019: £738 million); adjusted EBITDA2 up 5% to £1,329 million (2019: £1,265 million) and EBITDA margin of 54.4%
- Adjusted EPS2 up 5% to 209.7 pence (2019: 200.3 pence); basic EPS up 1% to 120.3 pence (2019: 119.5 pence)
- Proposed final dividend of 51.7 pence per share, resulting in a 7% increase in the full year dividend to 75.0 pence per share, reflecting good performance and confident outlook for the new Group
Continued organic and inorganic development, including:
- FTSE Russell index selected by BlackRock for the first climate risk-adjusted Government Bond ETF utilising the FTSE Advanced Climate EGBI
- FTSE Russell signed long-term expanded index derivative agreements with Cboe Global Markets and Singapore Stock Exchange
- LCH continued leadership on global reference rate reform - the transition to SOFR discounting saw US$120 trillion in notional transitioning to the risk-free rate in October 2020. LCH also became the first clearing house to offer Singapore Dollar swaps benchmarked to SORA
- ForexClear became the first service to launch clearing for non-deliverable FX options across nine currency pairs
- Over £718 billion raised on our fixed income markets of which £75 billion raised through Covid-19 response bonds
- China Yangtze Power Co. raised US$1.83 billion through Shanghai-London Stock Connect, the first Chinese issuer to receive London Stock Exchange’s Green Economy Mark, highlighting London’s position as an international centre for sustainable finance
1 Before depreciation, amortisation and non-underlying items.
2 Before amortisation of purchased intangible assets and non-underlying items.
Commenting on performance for the year, David Schwimmer, Chief Executive Officer, LSEG:
“The Covid-19 pandemic and broader geo-political events presented unprecedented challenges in 2020. Despite this environment, and with the vast majority of employees working remotely across our global locations, LSEG has delivered for its customers and provided a strong financial performance, demonstrating strong operational resilience. We continue to innovate and work in partnership with our customers to develop our services, in areas such as reference rate reform and sustainable investment.
“Completion of the acquisition of Refinitiv in early 2021 marked an important milestone in LSEG’s history. This transformational transaction brings together two highly complementary global businesses with a shared commitment to Open Access. LSEG is now truly global with a significant presence in North America, Europe, Asia and emerging markets, bringing together exceptional skills and experience at scale. While early days, the work we have done so far confirms the quality of the business and the extent of the opportunities across the Group as we focus on integration and delivering the strategic and financial benefits of the transaction to our customers, shareholders and other stakeholders. LSEG is well positioned for long-term sustainable growth in a continually evolving landscape as a leading global financial markets infrastructure and data provider.”