TIDMLSEG

RNS Number : 0146V

London Stock Exchange Group PLC

05 August 2022

London Stock Exchange Group plc: H1 2022 Interim Results

David Schwimmer, CEO said:

"LSEG has delivered a strong first half performance with continued revenue growth across our businesses. We are managing costs well and we continue to make progress on achievement of synergies.

"We provide solutions solving critical issues for our customers, with a high proportion of recurring subscription revenues and structurally growing transactional revenues that benefit from volatility. Our cash generation is allowing us to actively deploy capital across organic and inorganic investments, grow our dividend and commence a share buy-back programme, driving further value for our shareholders. We are successfully executing on our strategy, have good momentum going into the second half and our targets remain unchanged."

 
 H1 2022 highlights - Execution on strategy driving strong financial 
  performance 
 Note: Unless otherwise stated, variances refer to growth rates on 
  a constant currency basis, with the comparator, H1 2021, on a pro-forma 
  basis which also excludes the impact of a deferred revenue accounting 
  adjustment(1) . 
 --   Strong progress in H1 across all divisions, and momentum continuing 
       into H2 
 --   Continued delivery on revenue and cost synergies; all targets unchanged 
 --   Successfully executing on organic and inorganic investment opportunities 
       to drive growth, build a more agile and efficient business and enhance 
       our customer offering 
 --   Well positioned for the current environment; providing high value 
       solutions for customers' critical needs 
 --   Launching GBP750 million share buy-back over 12 months with the 
       first tranche to commence immediately 
 --   Strong income growth across all divisions, with pro-forma total 
       income (excluding recoveries) up 6.2%; up 7.0% adjusting for Ukraine 
       and Russia conflict impact(2) 
 --   ASV growth metric on a like-for-like basis continues to improve, 
       up 5.4% at the end of H1 (Q1: 4.9%); improved retention and new 
       sales driving the increase 
 --   Pro-forma adjusted operating expense increase of 4.3% reflects lower 
       phasing of costs in H1 2021; cost guidance for low-single digit 
       growth in 2022 maintained despite inflationary backdrop 
 --   Adjusted EBITDA margin of 48.8%(3) ; on track to deliver margin 
       target of at least 50% by end of 2023 
 --   Pro-forma AEPS up 21% to 167.4p 
 --   Robust cash generation in H1 and completion of two acquisitions 
       - GDC and MayStreet; Quantile and TORA expected to complete in H2 
 --   Leverage is inside our 1-2x target range within 18 months of the 
       Refinitiv acquisition 
 --   Interim dividend up 27% to 31.7 pence per share 
---  ------------------------------------------------------------------------- 
 

This release contains revenues, costs, earnings and key performance indicators (KPIs) for the six months ended 30 June 2022 (H1). H1 2022 is compared against H1 2021 on both a statutory and pro-forma basis. Pro-forma figures assume that the acquisition of Refinitiv took place on 1 January 2021. 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 H1 2021, are also excluded. Constant currency variance is calculated on the basis of consistent FX rates applied across the current and prior year period. For more information on accounting treatments and approach to FX please refer to the "Accounting and modelling notes" section below. Within the financial information and tables presented, certain columns and rows may not add due to the use of rounded numbers for disclosure purposes.

(1) 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. This reduced H1 2021 revenue by GBP23m, mainly in Data & Analytics with a smaller impact in the FX business within Capital Markets. There is no material impact in 2022. More details can be found in the "Accounting and modelling notes" section

(2) Growth rates excluding the Ukraine / Russia conflict impact have been calculated by excluding income in the region and from sanctioned customers and related business from both periods

(3) This margin figure has been adjusted to remove a non-cash FX-related balance sheet adjustment which is a GBP59m credit within adjusted operating expenses in H1 2022. This is explained further in the 'Year-on-year pro-forma financial performance' and 'Embedded Derivatives' sections. Adjusted EBITDA margin is adjusted EBITDA divided by Total Income (excl. Recoveries).

H1 2022 Statutory results(1)

The statutory results in the table below and the commentary beneath that compare LSEG continuing results for H1 2022 against the comparable H1 period in 2021 that only included 5 months of contribution from Refinitiv following completion of the acquisition at the end of January 2021. For an analysis of results on a pro-forma basis, please see the following section. Both statutory and pro-forma results treat BETA as discontinued and therefore the revenues and costs associated with the divestment are excluded from all periods.

 
 Continuing operations                         H1 2022   H1 2021(1) 
                                                 GBPm       GBPm 
                                              -------- 
 Data & Analytics                                2,354        1,872 
                                                        ----------- 
 Capital Markets                                   720          539 
                                                        ----------- 
 Post Trade                                        483          446 
                                                        ----------- 
 Other                                              12           13 
--------------------------------------------  --------  ----------- 
 Total income (excl. recoveries)                 3,569        2,870 
 Recoveries                                        166          148 
--------------------------------------------  --------  ----------- 
 Total income (incl. recoveries)                 3,735        3,018 
 
 Cost of sales                                   (504)        (392) 
                                              --------  ----------- 
 Gross profit                                    3,231        2,626 
                                              --------  ----------- 
 
 Operating expenses before depreciation, 
  amortisation and impairment                  (1,593)      (1,401) 
                                              --------  ----------- 
 Adjusted operating expenses before 
  depreciation, amortisation and 
  impairment (2)                               (1,433)      (1,219) 
 Non-underlying operating expenses 
  before depreciation, amortisation 
  and impairment                                 (160)        (182) 
                                              --------  ----------- 
 Non-underlying profit on disposal                 133            - 
  of property, plant and equipment 
                                                        ----------- 
 Non-underlying remeasurement gain                  23            - 
                                                        ----------- 
 Income from equity investments                      -           11 
                                                        ----------- 
 Share of profit / (loss) after 
  tax of associates                                  1          (2) 
--------------------------------------------  --------  ----------- 
 Earnings before interest, tax, 
  depreciation, amortisation and 
  impairment                                     1,795        1,234 
                                              --------  ----------- 
 Adjusted earnings before interest, 
  tax, depreciation, amortisation 
  and impairment (2)                             1,799        1,416 
 Non-underlying earnings before 
  interest, tax, depreciation, amortisation 
  and impairment                                   (4)        (182) 
                                              --------  ----------- 
 
 Depreciation, amortisation and 
  impairment                                     (898)        (684) 
                                              --------  ----------- 
 Adjusted depreciation, amortisation 
  and impairment (2)                             (391)        (297) 
 Non-underlying depreciation, amortisation 
  and impairment                                 (507)        (387) 
                                              --------  ----------- 
 
 Operating profit                                  897          550 
                                              --------  ----------- 
 Adjusted operating profit (2)                   1,408        1,119 
 Non-underlying operating loss                   (511)        (569) 
                                              --------  ----------- 
 
 Net finance expense                              (94)         (87) 
                                              --------  ----------- 
 Adjusted net finance expense (2)                 (81)         (86) 
 Non-underlying net finance expense               (13)          (1) 
                                              --------  ----------- 
 
 Profit before tax                                 803          463 
                                              --------  ----------- 
 Adjusted profit before tax (2)                  1,327        1,033 
 Non-underlying loss before tax                  (524)        (570) 
                                              --------  ----------- 
 
 Taxation                                        (159)        (254) 
                                              --------  ----------- 
 Adjusted tax (2)                                (262)        (215) 
 Non-underlying tax                                103         (39) 
                                              --------  ----------- 
 
 Profit for the period (from continuing 
  operations)                                      644          209 
                                              --------  ----------- 
 Adjusted profit (2)                             1,065          818 
 Non-underlying loss                             (421)        (609) 
                                              --------  ----------- 
 
 Profit from continuing operations 
  attributable to: 
 Equity holders                                    548          143 
                                              --------  ----------- 
 Underlying                                        934          721 
 Non-underlying                                  (386)        (578) 
                                              --------  ----------- 
 Non-controlling interest                           96           66 
                                              --------  ----------- 
 Underlying                                        131           97 
 Non-underlying                                   (35)         (31) 
                                              --------  ----------- 
 
 Continuing basic earnings per 
  share (p) (3)                                   98.0         27.2 
 Adjusted continuing basic earnings 
  per share (p) (3)                              167.4        139.0 
--------------------------------------------  --------  ----------- 
 

(1) The comparator H1 2021 figures are statutory results, incorporating Refinitiv from acquisition at the end of January 2021. Revenues and costs associated with the BETA divestment have been classified as discontinued and are excluded from all periods. Revenues and costs associated with the Borsa Italiana group divestment, which completed in H1 2021, are also excluded

(2) The Group reports adjusted operating expenses before depreciation, amortisation and impairment, adjusted earnings before interest, tax, depreciation, amortisation and impairment (EBITDA), adjusted depreciation, amortisation and impairment, adjusted operating profit and adjusted basic earnings per share (EPS). These measures are not measures of performance under IFRS and should be considered in addition to, and not as a substitute for, IFRS measures of financial performance and liquidity. Adjusted performance measures provide supplemental data relevant to an understanding of the Group's financial performance and exclude non-underlying items of income and expense that are material by their size and/or nature. Non-underlying items include: amortisation and impairment of goodwill and purchased intangible assets (including customer relationships, trade names, and databases and content, all of which are recognised as a result of acquisitions); incremental depreciation and amortisation of the fair value adjustments on tangible assets and intangible assets recognised as a result of acquisitions; and other non-underlying income or expenses not related to day-to-day operations, such as transaction costs related to acquisitions and disposals of businesses, as well as integration costs

(3) Weighted average number of shares used to calculate basic earnings per share and adjusted basic earnings per share from continuing operations is 558 million (H1 2021: 519 million)

H1 2022 Statutory results highlights

Total Income grew by GBP717 million to GBP3,735 million. This increase is partly due to the additional month of contribution in H1 2022 compared with H1 2021, associated with the Refinitiv acquisition, which completed on 29 January 2021.

 
 --   Data & Analytics : revenues up GBP482 million to GBP2,354 million. 
       Each business across the division performed well, with good 
       momentum continuing into H2. GBP292 million of this increase 
       is due to the additional month of contribution in H1 2022 compared 
       with H1 2021, associated with the acquisition of Refinitiv. 
       GBP85 million was driven by broad based growth in subscription 
       revenues through new sales, strong customer retention and price 
       increases, partially offset by the impact of the Ukraine / Russia 
       conflict. Other factors, which included the strengthening USD 
       rate vs GBP offset by the deferred revenue accounting adjustment 
       in H1 2021, contributed GBP85 million in the period. 
 --   Capital Markets : revenues up GBP181 million to GBP720 million. 
       Each of the underlying asset classes have seen good growth in 
       H1 2022. GBP57 million of this increase is due to the additional 
       month of contribution from our FX venues and Tradeweb. Other 
       factors such as the strengthening of USD vs GBP contributed 
       a further GBP21 million. 
 --   Post Trade : total income up GBP37 million to GBP483 million. 
       Growth has primarily been driven by a strong performance in 
       OTC Derivatives as we support customers to manage risk in an 
       uncertain rate environment and in Net Treasury Income and Non-Cash 
       Collateral, which was the result of high cash and non-cash collateral 
       balances. Overall the FX impact was neutral. 
 

H1 2022 Pro-forma summary

 
  Continuing operations             H1 2022    Pro-forma    Variance(2)          Constant        Constant 
                                                                                 Currency        Currency 
                                                                                Variance(3)      Variance 
                                      GBPm     H1 2021(1)        %                   %            (excl. 
                                                                                                 deferred 
                                                                                                  revenue 
                                                                                                adjustment) 
                                                                                                   (3,4) 
                                                  GBPm                                               % 
                                  ---------  ------------                     ------------- 
 Data & Analytics                     2,354         2,164          8.8%                5.0%            4.0% 
 Capital Markets                        720           616         16.9%               13.0%           12.9% 
 Post Trade                             483           446          8.3%                8.5%            8.5% 
 Other                                   12            14       (14.3%)             (14.2%)         (14.2%) 
--------------------------------  ---------  ------------  ------------       -------------  -------------- 
 Total income (excl. 
  recoveries)                         3,569         3,240         10.2%                6.9%            6.2% 
 Recoveries                             166           178        (6.7%)                2.9%            1.8% 
--------------------------------  ---------  ------------  ------------       -------------  -------------- 
 Total income (incl. 
  recoveries)                         3,735         3,419          9.2%                6.7%            6.0% 
 Cost of sales                        (504)         (452)         11.5%                6.6%            6.6% 
--------------------------------  ---------  ------------  ------------       -------------  -------------- 
 Gross profit                         3,231         2,967          8.9%                6.7%            5.9% 
 
 Adjusted operating expenses 
  before depreciation, 
  amortisation and impairment 
  (5)                               (1,433)       (1,397)          2.6%                4.3%            4.3% 
 Income from equity investments           -            11             -                   -               - 
 Share of profit / (loss) 
  after tax of associates                 1           (2)             -                   -               - 
--------------------------------  ---------  ------------  ------------  ---  -------------  -------------- 
 Adjusted earnings before 
  interest, tax, depreciation, 
  amortisation and impairment 
  (5)                                 1,799         1,579         13.9%                8.4%            6.8% 
 Adjusted EBITDA Margin 
  (6)                                 50.4%         48.7% 
 
 Adjusted depreciation, 
  amortisation and impairment 
  (5)                                 (391)         (347)         12.7%               16.3%           16.3% 
 Adjusted operating profit 
  (5)                                 1,408         1,233         14.2%                6.2%            4.3% 
 
 Adjusted net finance 
  expense (5)                          (81)         (124)       (34.7%) 
--------------------------------  ---------  ------------  ------------       -------------  -------------- 
 Adjusted profit before 
  tax (5)                             1,327         1,108         19.8% 
 
 Adjusted tax (5)                     (262)         (233)         12.4% 
--------------------------------  ---------  ------------  ------------       -------------  -------------- 
 Adjusted profit for 
  the period (5)                      1,065           874         21.9% 
 
 Adjusted profit attributable 
  to: 
 Equity holders                         934           767         21.8% 
 Non-controlling interest               131           107         22.4% 
 
 Continuing adjusted 
  basic earnings per share 
  (p)                                 167.4         138.0         21.3% 
 
   Weighted average shares 
   (m)                                  558           556 
--------------------------------  ---------  ------------  ------------       -------------  -------------- 
 

Variances are provided on a pro-forma and constant currency basis. Unless stated otherwise, commentary below is provided on the constant currency variance (excluding the deferred revenue adjustment) to provide insight into performance on a comparable basis. Revenues and costs associated with the BETA divestment have been classified as discontinued and are excluded from all periods. Revenues and costs associated with the Borsa Italiana group divestment, which completed in H1 2021, are also excluded.

(1) The H1 2021 comparator is pro-forma and assumes that the acquisition of Refinitiv took place on 1 January 2021

(2) Variance is the difference between current and prior year periods using FX rates prevalent at each time, therefore any changes in the FX rates are 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) Excludes the deferred revenue adjustment further explained in the "Accounting and modelling notes" section

(5) Before non-underlying items

(6) Adjusted EBITDA margin is adjusted EBITDA divided by Total Income (excl. Recoveries)

H1 2022 Pro-forma highlights

Total Income (excluding recoveries) grew 6.2% at constant currency; up 7.0% excluding Ukraine / Russia conflict impacts.

 
 --   Data & Analytics : revenues up 4.0%; up 5.0% excluding Ukraine 
       / Russia conflict impacts 
      --   Trading & Banking Solutions down 1.1%; but grew 0.7% excluding 
            Ukraine / Russia conflict impacts - Momentum continues with 
            underlying revenue growth and improved retention. Trading 
            showed growth in Q2 for the first time in many years when 
            excluding Ukraine / Russia. Further progress in the rollout 
            of Workspace in Banking 
      --   Enterprise Data Solutions up 6.3% - Improved retention and 
            sales growth partly offset by business lost through Ukraine 
            / Russia conflict. Data demand continues to grow as customers 
            move more investment strategies to a "big data focus". MayStreet 
            acquisition completed at the end of May, enhances the breadth 
            of our low-latency offering 
      --   Investment Solutions up 8.0% - Benchmark, Indices and Analytics 
            growth at FTSE Russell continues strongly, up 10.4% with 
            15 new ESG products through our revenue synergy programme, 
            more than 2021's total number of products launched. Asset-based 
            revenues rose 8.0% with strong growth in Q1 but broadly flat 
            in Q2 as AUM declined 
      --   Wealth Solutions up 2.3% - Good net sales and retention, 
            offsetting Ukraine / Russia conflict cancellations. Performance 
            excludes the contribution from the low growth, non-core BETA 
            business moved to discontinued operations; divestment completed 
            on 1 July 
      --   Customer & Third-Party Risk Solutions up 7.3% - Double-digit 
            organic growth continued in H1. Strong performance at World-Check. 
            GDC acquisition completed at the end of May, broadening our 
            capability in the digital identity and anti-fraud sector 
 
 
 --   Capital Markets : revenues up 12.9%; up 13.4% excluding Ukraine 
       / Russia conflict impacts 
      --   Equities up 7.8% - Higher market capitalisation of listed 
            companies at the end of last year, helped drive annual fees 
            revenue, partly offset by reduction in new issues in challenging 
            primary market conditions. Strong secondary market activity 
            driven by market volatility but with lower average yield 
      --   FX up 6.1% - Strong growth at FXall with broadly flat performance 
            at Matching. Announced plans to launch NDF Matching in Singapore, 
            supporting strong demand from Asia markets. Modernising our 
            FX venue technology by re-platforming onto LSEG technology 
      --   Fixed Income, Derivatives & Other up 16.5% - Strong performance 
            at Tradeweb in H1(1) , with double-digit revenue growth across 
            Rates, Credit and Equity asset classes. Tradeweb and FXall 
            collaboration announced to develop hedging workflow solutions 
            for emerging market products 
 
 
 --   Post Trade : total income up 8.5%; up 8.6% excluding Ukraine 
       / Russia conflict impacts 
      --   OTC Derivatives up 12.0% - Strong activity across SwapClear 
            and SwapAgent as we support customers to manage risk in an 
            uncertain rate environment. Record volumes at ForexClear 
            and CDSClear 
      --   Securities & Reporting up 1.9% - Good volume growth at RepoClear 
            and EquityClear, with the benefit limited by increased competition. 
            Value at Risk (VAR) model introduced at LCH SA RepoClear 
            to improve margin efficiency for members 
      --   Non-Cash Collateral up 6.2% - Driven by higher non-cash collateral 
            balances due to strong volumes 
      --   Net Treasury Income up 11.3% - Growth driven by increased 
            cash collateral balances, unlikely to remain at current level 
            and expected to reduce towards normalised levels across the 
            rest of 2022 
 

(1) Tradeweb H1 2022 results were released on 3 August 2022 and provided more detailed commentary on performance

Contacts: London Stock Exchange Group plc

 
 
   Investors 
 Paul Froud / Chris Turner - Investor Relations   ir@lseg.com 
 Media 
 Lucie Holloway / Rhiannon Davies - Financial     +44 (0) 20 7797 1222 
  Communications                                  newsroom@lseg.com 
 

Additional information can be found at www.lseg.com

H1 investor and analyst conference call:

LSEG will host a webcast and conference call for its H1 Interim Results 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 webcast or telephone conference call please register in advance using the following link and instructions below:

https://www.lsegissuerservices.com/spark/LondonStockExchangeGroup/events/82c50574-0690-4f15-8ff7-1a48298a8fc8

 
 --   If you wish to participate in Q&A, questions can be submitted 
       by clicking the 'Ask a question' button on the page or by 
       emailing the LSEG Investor Relations team at ir@lseg.com . 
       Questions can be submitted in advance and during the event 
       itself 
 --   If you wish to ask a question live, you will need to register 
       for the telephone conference call here: https://cossprereg.btci.com/prereg/key.process?key=P9AGY89KE 
 --   NOTE: Once you have registered for the conference call, you 
       will be provided with the information you need to join the 
       conference, including dial-in numbers and passcodes. Please 
       save this information to your calendar or print this information 
 

Presentation slides can be viewed at www.lseg.com/investor-relations

Chief Executive's Statement

Overview of H1

We have delivered strong H1 results. All divisions have shown good growth with momentum continuing into H2. Our financial targets are unchanged and we have made good progress in realising further revenue and cost synergies. We continue to execute on organic and inorganic investment opportunities to drive growth, build a more agile and efficient business and enhance our customer offering. We are well positioned for the current environment, providing high value solutions for customers' critical needs.

A leading global provider of financial markets infrastructure and data

LSEG supplies business critical solutions globally, to customers that include almost all of the top 100 global banks and three-quarters of the top 100 asset managers by total assets. We serve over 40,000 customers worldwide with a c.98% annual customer retention rate in Data & Analytics.

We operate world-class assets and maintain systemically important global infrastructure, delivering across asset classes and along the whole financial markets value chain. Our open model approach, which allows customers to choose which of our solutions they use and then access on a fair and non-discriminatory basis, is strongly preferred by customers.

We are well positioned for the current environment of rising interest rates and inflation. Our income is diversified across geographies, products and customers, with 73% recurring and subscription-like. Our transactional revenues are structurally growing and benefit from volatility, with leading global positions for electronic trading in FX (FXall) and fixed income (Tradeweb) and in the clearing of interest rate swaps (SwapClear) and European repos (RepoClear). We have multiple levers to manage our costs and run a business model that maintains a prudent balance sheet.

Announcement of share buy-back and capital allocation approach

Our business is highly cash generative and our capital management framework remains consistent. We actively deploy capital for select organic and inorganic investments and will continue to evaluate other shareholder returns alongside growing our dividend.

Today, we have announced a share buy-back programme of GBP750 million which is expected to be phased over multiple tranches over 12 months, with the first commencing today. This is being funded, in large part, using the proceeds of the divestment of the BETA business which completed on 1 July 2022.

A separate RNS with full details on the share buy-back announcement is available on the IR section of our website at: www.lseg.com/investor-relations .

Integrating our world-class businesses

We continue to successfully execute on our multi-year integration of the Refinitiv business, partner with customers to create valued solutions and build our revenue synergies.

We are improving sales execution across the Group, with better aligned incentives, more rigorous pipeline management and a greater focus on cross-selling, driving an improvement in retention and sales. We are simplifying our sales approach in Data & Analytics, leveraging more than 240 products to focus customer engagement around 9 core industry themes and introducing single points of contact for customers. This has resulted in a more than 350bps increase in product retention with our large customer segment since 2020.

Our revenue synergies continue to increase, with GBP44 million run-rate achieved by the end of H1 2022. We are creating new index and analytic products, improving distribution of our existing data products and cross-selling FTSE Russell data products to Enterprise Data customers. We now expect to deliver at the top end of our GBP40-60 million run-rate target for the end of 2022.

Driving growth

As a Group, we are very well positioned to create innovative products and services, drawing on the natural linkages across our business. Our global end-to-end proposition across asset classes is deepening and expanding our customer relationships, meaning we can better understand their needs. This helps us to know how best we can support them while creating targeted and innovative solutions.

To illustrate this, a differentiator for us is our ability to aggregate insight from across our business and rapidly deliver it in a flexible way. In H1, we have been able to do this by drawing on our proprietary data from across Tradeweb, SwapClear and Yield Book, to implement a novel solution for customers that meets their regulatory requirements of the Fundamental Review of Trading Book (FRTB).

The rollout of our Workspace product has continued well in H1 and is ahead of schedule. Over 50% of users have been migrated onto Workspace from legacy solutions. Having already launched Workspace for FX Trading, we are targeting to go live or be in beta-testing for all remaining user types by the end of 2022. The feedback received has been very positive, with Banking customer satisfaction more than 10 percentage points above the equivalent Eikon product across quality of search functionality, ease of content sharing, multi-device capabilities and value for money.

Building an efficient and scalable platform

We continue to develop connections across our businesses to create a more seamless customer workflow. In H1, we announced a connection between FXall and Tradeweb. This allows emerging market products (bonds and currency swaps) to be traded and hedged efficiently, reducing execution risk for customers. We have also embedded our Yield Book product directly into Eikon and Workspace to benefit from the broader distribution and ease of access that is possible through our platforms.

Investments continue to drive efficiencies and scalability, as we build our data platform and migrate to the cloud. Our software defined network infrastructure is delivering better agility, higher capacity and increased resilience.

Our cost synergy programme is on track to deliver at least GBP400 million run-rate savings by end of 2025, with our 2022 target of GBP220 million run-rate already delivered in H1. Over 80 percent of our real estate optimisation programme is complete and we are through over 60 percent of our data centre rationalisation programme. We now expect to deliver GBP250 million run-rate cost synergies by end of 2022.

Enhancing growth and creating shareholder value through strategic M&A

We have completed two acquisitions in H1. MayStreet enhances the breadth of our Enterprise Data offering in low-latency services and GDC globalises our digital identity and fraud prevention offering in the Customer & Third-Party Risk business. These contributed income in the period of GBP1 million and GBP2 million respectively. A summary of the financial contribution of both businesses can be found in the "Financial details on completed acquisitions" section later in the release.

Two other acquisitions that have previously been announced are expected to close in H2, subject to merger control and other regulatory approvals. These are TORA, which provides Trading & Banking customers with multi-asset order and execution management capabilities, and Quantile, which will help customers more effectively manage both capital and margin in Post Trade.

On 1 July, we completed the divestment of the non-core, lower-growth BETA wealth transaction business, and will return a significant proportion of the proceeds to shareholders via the share buy-back we have announced today.

We will continue to assess further bolt-on acquisitions in a disciplined manner to accelerate our strategy.

Statutory financial performance

The commentary below refers to continuing operations. It excludes BETA, which has been treated as a discontinued operation in both the current and prior periods, and the Borsa Italiana group which was treated as a discontinued operation in H1 2021.

Total income grew by GBP717 million to GBP3,735 million. This increase reflects the strong business performance as well as the additional month of contribution in H1 2022 compared with H1 2021 associated with the Refinitiv acquisition, which completed on 29 January 2021.

Operating expenses before depreciation amortisation and impairment increased by GBP192 million to GBP1,593 million, with the additional costs associated with the extra month from Refinitiv in H1 2022 compared with H1 2021. Included within operating expenses are GBP160 million (H1 2021: GBP182 million) of non-underlying costs which mainly relate to Refinitiv integration costs.

Depreciation, amortisation and impairment increased by GBP214 million to GBP898 million primarily as a result of the acquisition of Refinitiv, including the amortisation associated with the acquired intangible assets.

Operating profit was GBP897 million (H1 2021: GBP550 million).

Net financing expense increased by GBP7 million to GBP94 million. Tax of GBP159 million (H1 2021: GBP254 million) is net of a GBP103 million non-underlying tax benefit which mainly reflects the tax impact of the Group's non-underlying items. The effective tax rate was 19.8%.

Profit for the period amounted to GBP644 million (H1 2021: GBP209 million), within which GBP548 million (H1 2021: GBP143 million) is attributable to equity holders. Non-controlling interest has increased by GBP30 million to GBP96 million, in part reflecting the strong performance from Tradeweb and LCH in the period.

Basic earnings per share from continuing operations has increased by 70.8p to 98.0p.

Year-on-year pro-forma financial performance

LSEG has delivered strong income growth across all divisions in H1, with total income (excluding recoveries and the deferred revenue accounting adjustment) up 6.2%. This growth has been driven by good new sales and retention in Data & Analytics, strong activity at Tradeweb in Capital Markets and high volumes across OTC in Post Trade. Our ASV growth metric on a like-for-like basis (adjusted for the Ukraine / Russia conflict) continues to improve, up 5.4% at the end of H1 (Q1: 4.9%) with improved retention and new sales driving the increase.

In the period, there was a minor impact from M&A, with the addition of one month of contribution from MayStreet and GDC, after they both closed on 31 May. This was more than offset by the divestment of the ERMT business at the end of 2021. On an organic basis (which excludes the impact of M&A) total income (excluding recoveries) grew 6.4%. Within this, on an organic basis, Data & Analytics was up 4.2%, with Enterprise Data up 6.1% and Customer & Third-Party Risk Solutions up 10.6%.

Following LSEG's actions taken in response to the Ukraine and Russia conflict, there was a GBP23 million impact in H1 (with GBP7 million in Q1 and GBP16 million in Q2). The expected revenue impact is c.GBP60 million in 2022. Excluding the impact of the conflict, total income (excluding recoveries), grew 7.0%.

We continue to make good progress on our revenue synergy programme, with GBP44 million run-rate achieved by the end of H1 2022. We now expect to deliver at the top end of our GBP40-60 million run-rate target for the end of 2022.

Cost management continues to be strong, with adjusted operating expense growth of 4.3%, and on track to deliver our organic low-single digit guidance for the full year. In the period, the cost growth comprised of ongoing operating costs and investment for growth, offset by the continued strong delivery of our cost synergy programme. The investment for growth includes investment in technology modernisation, increasing cloud usage, the costs of delivering strong growth at Tradeweb and costs relating to the delivery of our revenue synergy programme.

To simplify our business and manage inflationary pressures, we are leveraging our global footprint. Excluding Tradeweb, over 65% of new hires in H1 2022 were hired into lower cost locations. We continue to take a strategic approach to technology, for example, consolidating our low latency real time data products onto a single efficient platform and we are increasing the efficiency of our cloud estate.

Our cost synergy programme is on track to deliver at least GBP400 million run-rate savings by end of 2025, with our 2022 target of GBP220 million run-rate already delivered in H1. We now expect to achieve GBP250 million of run-rate savings by the end of 2022.

Adjusted operating expenses were also impacted by FX during the period as USD strengthened vs GBP, with 48% of our costs recognised in USD. The impact was reduced by a GBP59 million FX-related credit, that is recognised as a balance sheet adjustment. For more details please see the Embedded Derivatives section. This GBP59 million credit does not impact our adjusted operating expenses' constant currency growth rate or therefore our guidance.

We are on track to deliver our organic cost guidance for 2022 of low-single digit growth, despite the inflationary backdrop, with robust levers in place to manage cost pressure going forward. H1's growth is higher than the low-single digit full year guidance due to phasing of costs and the annualisation of investment in sales and resilience capacity in H2 2021.

In H2 2022, adjusted operating expenses are expected to show modest growth to deliver our 2022 cost guidance, with further M&A cost annualisation and a small H1 vs H2 cost phasing impact. If FX rates stay at the current USD / GBP spot rate, our reported Sterling figure at the end of year would likely see a more material FX headwind.

Excluding the GBP59 million FX credit in operating expenses, we have achieved an adjusted EBITDA margin of 48.8% in H1. On an equivalent basis this is up 160bps from 47.2% at full year 2021. We are confident of delivering a margin of at least 50% by the end of 2023, as we continue to invest to secure future growth and are well positioned to manage inflationary pressures.

Adjusted depreciation, amortisation and impairment was GBP391 million. The previous full year guidance of GBP820 million was provided before the announcement of the divestment of BETA. The divestment reduced 2021 depreciation by GBP49 million. Therefore our 2022 guidance has been updated accordingly and on a constant currency basis from 2021 we expect depreciation, amortisation and impairment to be GBP790 million, depending on the timing of and phasing of H2 capital expenditure.

Adjusted net financing expense reduced by 35% to GBP81 million, largely driven by the higher cost of debt in early 2021, before refinancing in April 2021. Interest rates have risen in the US, UK and Euro zone in H1. 18% of our debt as of H1 is floating and therefore sensitive to rate increases. At current FX rates, a 1% increase in rates would result in an annualised GBP15 million higher financing expense. In light of the higher rates and the strengthen USD, our full year guidance at current rates is c.GBP180 million.

The underlying tax rate was 20.5%, and 19.7% when adjusted for a small benefit related to the prior year. The effective tax rate for the full year is estimated to be between 21-22%. For 2023 and 2024, the underlying tax rate is expected to be in the range of 22-24% based on the current tax landscape.

Non-controlling interest has increased by 22% to GBP131 million, reflecting the strong performance from Tradeweb and LCH in the period.

Adjusted basic earnings per share has increased 21% to 167.4 pence demonstrating our continued strong financial delivery.

Capital expenditure, cash and balance sheet

Capital expenditure in H1 on an accrued, constant currency basis was GBP384 million, with GBP310 million of investment in business-as-usual initiatives and GBP74 million of integration-related investment, of which GBP71 million relates to cost to achieve synergies. Our business-as-usual capex guidance is unchanged, expecting GBP650-700 million per annum until the end of 2023, before tapering thereafter.

Cash generated from operating activities was GBP1,338 million in H1, showing a strong underlying performance. Net cash generated after net interest and royalties paid, taxes paid, capex and other investments was GBP531 million and GBP73 million after dividends. We are a highly cash generative business, often weighted towards the second half due to the phasing of our dividend. We expect to generate over GBP1 billion of post-dividend free cash flow this year, plus the proceeds from the BETA disposal.

As of 30 June 2022, the Group had operating net debt of GBP7,207 million after setting aside GBP1,372 million for regulatory and operational requirements. The Group's operating net debt increased during the period due to adverse movements in foreign exchange rates, the payment of the 2021 final dividend and timing of M&A transactions, with MayStreet and GDC acquired in H1 but proceeds from the BETA divestment received on 1 July 2022. Leverage temporarily increased to 2.1x from 1.9x as of 31 December 2021. Including the net proceeds received from the BETA divestment, leverage would have been 1.9x.

The Group did not issue or redeem any bonds during the first half of 2022. The Group retains access to GBP2.5 billion of committed liquidity via its revolving credit facilities, of which GBP1.425 billion matures in December 2024 and GBP1.075 billion matures in December 2026. As of 30 June 2022, $80 million (GBP66 million) was drawn under the revolving credit facilities (31 December 2021: GBPnil).

Both Standard & Poor's and Moody's maintained their respective LSEG long-term credit ratings of A and A3 with stable outlook and short-term ratings of A-1 and P-2 throughout the first half of 2022. Standard & Poor's also maintained its long-term rating of LCH Limited and LCH SA at AA- with a stable outlook and short-term rating at A-1+ throughout the period.

The Group had net assets of GBP27,864 million at 30 June 2022 (31 December 2021: GBP25,519 million), including GBP2,520 million in cash and cash equivalents (31 December 2021: GBP2,665 million).

Interim Dividend

In line with the Group's dividend policy, the interim dividend is calculated as one-third of the prior full year dividend. Accordingly, the Directors have declared an interim dividend of 31.7 pence per share, an increase of 27% (H1 2021: 25.0 pence per share). The interim dividend will be paid on 20 September 2022 to shareholders on the register on 19 August 2022.

Outlook

LSEG has delivered a strong first half performance with continued revenue growth across our businesses. We are managing costs well and we continue to make progress to achieve our synergies. We are successfully executing on our strategy, with good momentum going into the second half.

Accounting and modelling notes

Financial details on completed acquisitions

On 31 May 2022, we closed our acquisitions of both MayStreet and GDC. They have a negligible impact on our H1 2022 results, contributing revenue of GBP1 million and GBP2 million respectively.

As a reminder:

 
       MayStreet: Provides high-quality low latency technology 
  --    and market data, expanding our leading real-time data offering. 
        It contributes to Enterprise Data Solutions, Data & Analytics 
       GDC: Provides identity verification data for Know Your Customer 
  --    purposes, expanding our capabilities in the high growth Digital 
        Identity and Fraud solutions area. It contributes to Customer 
        & Third-Party Risk Solutions, Data & Analytics 
 

To help incorporate the contribution of MayStreet and GDC within models, below are the acquisitions' implied contributions in 2021, as if they were within the Group. As our cost guidance is on an organic constant currency basis, the inclusion of these businesses' costs will not impact the guidance, and therefore will need to be added when modelling for the full year, with the full annualisation in 2023.

 
 2021 GBPm            MayStreet   GDC 
 Total Income            GBP11m    GBP14m 
                     ----------  -------- 
 Cost of Sales          (GBP3m)   (GBP7m) 
                     ----------  -------- 
 Gross Profit             GBP8m     GBP7m 
                     ----------  -------- 
 Operating Expenses    (GBP16m)   (GBP5m) 
                     ----------  -------- 
 EBITDA                 (GBP8m)     GBP2m 
                     ----------  -------- 
 Depreciation           (GBP1m)         - 
                     ----------  -------- 
 Operating profit       (GBP9m)     GBP2m 
                     ----------  -------- 
 

Both businesses saw strong income growth in 2021 and have continued to grow in 2022 from a low base. These acquisitions will complement our existing offerings to support growth in Enterprise Data and Customer & Third-Party Risk Solutions.

Deferred revenue accounting adjustment

This adjustment is as previously described in 2021. There is no material impact in 2022. An adjusted variance, excluding the deferred revenue adjustment, has been presented to show comparable business growth on the prior year.

As a reminder, the adjustment results from the acquisition of Refinitiv and the associated purchase price accounting rules. Refinitiv's deferred revenue balances were subject to a one-time haircut at the time of acquisition. This was a non-cash adjustment. 2021 saw a negative revenue impact of GBP25 million, with GBP22 million in Q1; GBP1 million in Q2; GBP1 million in Q3; GBP1 million in Q4. 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.

Organic growth

Organic growth rates are a non-IFRS measure, intended to remove the impact of acquisitions and disposals. Organic growth is calculated on a constant currency basis, adjusting the pro-forma 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.

Embedded derivatives

LSEG has embedded foreign currency derivatives which arise primarily in revenue contracts where the currency of the contract is different from the functional or local currencies of the parties involved. The local-currency-based contract determines the revenue and LSEG records the derivative instruments at fair value in the balance sheet as either assets or liabilities, in accordance with IFRS 9. Changes in fair value, which are based on latest FX rates and forecasts, are recognised in the income statement, within the operating expense line.

In H1 2022, due to the considerable strengthening of USD vs GBP, particularly in June 2022, there was a significant FX gain recognised within operating expense. In H1 2022 this totalled GBP59 million. Typically, and in previous periods, the gain or loss has been immaterial. This is purely a non-cash accounting gain and does not impact our organic constant currency operating expenses guidance.

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 2022 financial year, has been given on a constant currency basis.

 
                                  USD   GBP   EUR   Other 
 2022 H1 - Total Income 
  (1)                             57%   18%   17%      8% 
                                 ----  ----  ----  ------ 
 2022 H1 - Underlying Expenses 
  (2)                             48%   26%   10%     16% 
                                 ----  ----  ----  ------ 
 
 
 2022 H1 - Total Income    USD   GBP   EUR   Other 
  by division (1) 
 Data & Analytics          64%   12%   13%     11% 
                          ----  ----  ----  ------ 
 Capital Markets           58%   21%   20%      1% 
                          ----  ----  ----  ------ 
 Post Trade                19%   43%   36%      2% 
                          ----  ----  ----  ------ 
 Other                     15%   30%   51%      4% 
                          ----  ----  ----  ------ 
 

(1) Total Income includes recoveries

(2) Underlying expenses includes cost of sales, underlying operating expenses and underlying depreciation and amortisation

The results for H1 2022 have been translated into Sterling using the average exchange rates for the period. The rates for the largest two currency pairs are shown in the table below.

 
              Average rate   Closing rate   Average rate   Closing rate 
               6 months       at             6 months       at 
               ended          30-Jun-22      ended          30-Jun-21 
               30-Jun-22                     30-Jun-21 
 GBP : USD           1.300          1.212          1.388          1.384 
             -------------  -------------  -------------  ------------- 
 GBP : EUR           1.188          1.157          1.152          1.163 
             -------------  -------------  -------------  ------------- 
 

Statutory divisional revenues and adjusted operating profit

   1.   Data & Analytics 

Results to adjusted operating profit (1)

 
 Continuing operations 
                                        H1 2022    Statutory 
                                         GBPm      H1 2021(1) 
                                                      GBPm 
                                      --------- 
 
 Trading & Banking Solutions                770           621 
   Trading                                  606           494 
   Banking                                  163           127 
 Enterprise Data Solutions                  620           477 
   Real Time Data                           397           305 
   PRS                                      224           172 
 Investment Solutions                       637           525 
   Benchmark Rates, Indices 
    & Analytics                             285           243 
   Index - Asset-based                      141           122 
   Data & Workflow                          210           160 
 Wealth Solutions                           131           102 
 Customer & Third-Party 
  Risk Solutions                            196           147 
------------------------------------  ---------  ------------ 
 Total revenue (excl. recoveries)         2,354         1,872 
 Recoveries                                 166           148 
------------------------------------  ---------  ------------ 
 Total revenue (incl. recoveries)         2,520         2,020 
 Cost of sales                            (420)         (322) 
------------------------------------  ---------  ------------ 
 Gross profit                             2,100         1,698 
 Adjusted operating expenses 
  before depreciation, amortisation 
  and impairment                          (963)         (820) 
------------------------------------  ---------  ------------ 
 Adjusted earnings before 
  interest, tax, depreciation, 
  amortisation and impairment             1,137           878 
 Depreciation, amortisation 
  and impairment                          (291)         (221) 
------------------------------------  ---------  ------------ 
 Adjusted operating profit                  846           657 
------------------------------------  ---------  ------------ 
 

(1) The H1 2021 comparator is statutory, incorporating Refinitiv from acquisition at the end of January 2021. 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 H1 2021, are also excluded

   2.   Capital Markets 

Results to adjusted operating profit (1)

 
 Continuing operations                 H1 2022    Statutory 
                                         GBPm     H1 2021(1) 
                                                     GBPm 
                                      -------- 
 Equities                                  129           120 
 FX                                        124            91 
 Fixed Income, Derivatives 
  & Other                                  467           328 
------------------------------------  --------  ------------ 
 Total revenue                             720           539 
 Cost of sales                            (16)          (11) 
------------------------------------  --------  ------------ 
 Gross profit                              704           528 
 Adjusted operating expenses 
  before depreciation, amortisation 
  and impairment                         (314)         (250) 
------------------------------------  --------  ------------ 
 Adjusted earnings before 
  interest, tax, depreciation, 
  amortisation and impairment              390           278 
 Depreciation, amortisation 
  and impairment                          (48)          (30) 
------------------------------------  --------  ------------ 
 Adjusted operating profit                 342           248 
------------------------------------  --------  ------------ 
 

(1) The H1 2021 comparator is statutory, incorporating Refinitiv from acquisition at the end of January 2021. Revenues and costs associated with the Borsa Italiana group divestment, which completed in H1 2021, are excluded from all periods

   3.   Post Trade 

Results to adjusted operating profit (1)

 
 Continuing operations                 H1 2022    Statutory 
                                         GBPm     H1 2021(1) 
                                                     GBPm 
                                      -------- 
 OTC Derivatives                           191           169 
 Securities & Reporting                    122           123 
 Non-Cash Collateral                        49            46 
------------------------------------  --------  ------------ 
 Total revenue                             362           338 
 Net Treasury Income                       121           108 
------------------------------------  --------  ------------ 
 Total income                              483           446 
 Cost of sales                            (68)          (59) 
------------------------------------  --------  ------------ 
 Gross profit                              415           387 
 Adjusted operating expenses 
  before depreciation, amortisation 
  and impairment                         (155)         (147) 
------------------------------------  --------  ------------ 
 Adjusted earnings before 
  interest, tax, depreciation, 
  amortisation and impairment              260           240 
 Depreciation, amortisation 
  and impairment                          (52)          (46) 
------------------------------------  --------  ------------ 
 Adjusted operating profit                 208           194 
------------------------------------  --------  ------------ 
 

(1) The H1 2021 comparator is statutory, incorporating Refinitiv from acquisition at the end of January 2021. Revenues and costs associated with the Borsa Italiana group divestment, which completed in H1 2021, are excluded from all periods

Pro-forma divisional revenues, adjusted operating profit and non-financial KPIs

   1.   Data & Analytics 

Results to adjusted operating profit (1)

 
  Continuing operations                                                              Constant         Constant 
                                                                                     Currency         Currency 
                                                                                    Variance(3)       Variance 
                                                                                         %         (excl. deferred 
                                                                                                       revenue 
                                                                                                     adjustment) 
                                                                                                       (3,4) % 
                                        H1 2022    Pro-forma     Variance(2) 
                                                   H1 2021(1) 
                                          GBPm        GBPm            % 
                                      ---------  ------------                     ------------- 
 Trading & Banking Solutions                770           745           3.4%             (0.1%)             (1.1%) 
   Trading                                  606           594           2.0%             (1.0%)             (2.0%) 
   Banking                                  163           151           7.9%               3.7%               2.6% 
 Enterprise Data Solutions                  620           562          10.3%               7.5%               6.3% 
   Real Time Data                           397           360          10.3%               7.2%               5.9% 
   PRS                                      224           202          10.9%               7.9%               6.9% 
 Investment Solutions                       637           560          13.8%               8.7%               8.0% 
   Benchmark Rates, Indices 
    & Analytics                             285           247          15.4%              10.6%              10.4% 
   Index - Asset-based                      141           122          15.6%               8.0%               8.0% 
   Data & Workflow                          210           191           9.9%               6.6%               4.9% 
 Wealth Solutions                           131           123           6.5%               3.0%               2.3% 
 Customer & Third-Party Risk 
  Solutions                                 196           175          12.0%               8.5%               7.3% 
------------------------------------  ---------  ------------  -------------      -------------  ----------------- 
 Total revenue (excl. recoveries)         2,354         2,164           8.8%               5.0%               4.0% 
 Recoveries                                 166           178         (6.7%)               2.9%               1.8% 
------------------------------------  ---------  ------------  -------------      -------------  ----------------- 
 Total revenue (incl. recoveries)         2,520         2,343           7.6%               4.9%               3.9% 
 Cost of sales                            (420)         (381)          10.2%               4.3%               4.3% 
------------------------------------  ---------  ------------  -------------      -------------  ----------------- 
 Gross profit                             2,100         1,962           7.0%               5.0%               3.8% 
 Adjusted operating expenses 
  before depreciation, amortisation 
  and impairment                          (963)         (957)           0.6%               2.4%               2.4% 
------------------------------------  ---------  ------------  -------------      -------------  ----------------- 
 Adjusted earnings before 
  interest, tax, depreciation, 
  amortisation and impairment             1,137         1,005          13.1%               7.5%               5.1% 
 Depreciation, amortisation 
  and impairment                          (291)         (264)          10.2%              13.9%              13.9% 
------------------------------------  ---------  ------------  -------------      -------------  ----------------- 
 Adjusted operating profit                  846           741          14.2%               5.3%               2.1% 
------------------------------------  ---------  ------------  -------------      -------------  ----------------- 
 Adjusted EBITDA margin                   48.3%         46.4% 
 

Non-financial KPIs (1)

 
                                      H1 2022   H1 2021   Variance 
                                                              % 
                                     --------  -------- 
 
 Annual Subscription Value growth 
  (%) (5)                                4.1%      3.9% 
 Annual Subscription Value growth 
  excl. U/R impact (%) (5, 6)            5.4%      3.9% 
 Subscription revenue growth (%) 
  (5, 7)                                 4.5% 
 Subscription revenue growth excl. 
  U/R impact (%) (5, 6, 7)               5.0% 
 Index - ETF AUM ($bn)                    962     1,040       (8%) 
 Index - ESG Passive AUM ($bn) (8)        261       132        98% 
-----------------------------------  --------  --------  --------- 
 

(1) The H1 2021 comparator is pro-forma and assumes that the acquisition of Refinitiv took place on 1 January 2021. 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 H1 2021, are also excluded

(2) Variance is the difference between current and prior year periods using FX rates prevalent at each time, therefore any changes in the FX rates are 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) Excludes the deferred revenue adjustment further explained in the "Accounting and modelling notes" section

(5) The variance is a constant currency variance adjusted for acquisitions and disposals

(6) Growth rates excluding the Ukraine / Russia conflict impact have been calculated by excluding income in the region and from sanctioned customers and related business from both periods

(7) The variance is a 12-month rolling constant currency variance excluding the impact of the deferred revenue accounting adjustment. The comparator is not available due to different methodologies applied to the data for the periods before the completion of the Refinitiv acquisition

(8) ESG Passive AUM is at 31 December 2021 and prior period comparator is at 31 December 2020. The metric is updated bi-annually

   2.   Capital Markets 

Results to adjusted operating profit (1)

 
  Continuing operations                                                              Constant         Constant 
                                                                                     Currency         Currency 
                                                                                    Variance(3)       Variance 
                                                                                         %         (excl. deferred 
                                                                                                       revenue 
                                                                                                     adjustment) 
                                                                                                       (3,4) % 
                                        H1 2022    Pro-forma     Variance(2) 
                                                   H1 2021(1) 
                                          GBPm        GBPm            % 
                                      ---------  ------------                     ------------- 
 Equities                                   129           120           7.5%               7.8%               7.8% 
 FX                                         124           109          13.8%               6.3%               6.1% 
 Fixed Income, Derivatives 
  & Other                                   467           386          21.0%              16.5%              16.5% 
------------------------------------  ---------  ------------  -------------      -------------  ----------------- 
 Total revenue                              720           616          16.9%              13.0%              12.9% 
 Cost of sales                             (16)          (13)          23.1%              16.3%              16.3% 
------------------------------------  ---------  ------------  -------------      -------------  ----------------- 
 Gross profit                               704           603          16.7%              12.9%              12.9% 
 Adjusted operating expenses 
  before depreciation, amortisation 
  and impairment                          (314)         (291)           7.9%              10.7%              10.7% 
------------------------------------  ---------  ------------  -------------      -------------  ----------------- 
 Adjusted earnings before 
  interest, tax, depreciation, 
  amortisation and impairment               390           312          25.0%              15.0%              14.9% 
 Depreciation, amortisation 
  and impairment                           (48)          (37)          29.7%              19.3%              19.3% 
------------------------------------  ---------  ------------  -------------      -------------  ----------------- 
 Adjusted operating profit                  342           275          24.4%              14.4%              14.3% 
------------------------------------  ---------  ------------  -------------      -------------  ----------------- 
 Adjusted EBITDA margin                   54.2%         50.6% 
 

Non-financial KPIs (1)

 
                                 H1 2022   H1 2021    Variance 
                                                          % 
                                --------  --------- 
 Equities 
 Primary Markets 
 New issues                           40         75      (47%) 
 Total money raised (GBPbn)          6.3       15.6      (60%) 
 
 Secondary Markets - Equities 
 UK Value Traded (GBPbn) 
  - Average Daily Value              5.3        4.7        13% 
 SETS Yield (bps)                   0.66       0.72       (9%) 
 
 FX 
 Average daily total volume 
  ($bn)                              470        455         3% 
 
 Fixed income, Derivatives 
  and Other 
 Tradeweb Average Daily 
  ($m) 
 Rates - Cash                    364,423    348,673         5% 
 Rates - Derivatives             364,323    272,063        34% 
 
 Credit - Cash                    10,483      9,951         5% 
 Credit - Derivatives             19,449     12,628        54% 
------------------------------  --------  ---------  --------- 
 

(1) The H1 2021 comparator is pro-forma and assumes that the acquisition of Refinitiv took place on 1 January 2021. Revenues and costs associated with the Borsa Italiana group divestment, which completed in H1 2021, are excluded from all periods

(2) Variance is the difference between current and prior year periods using FX rates prevalent at each time, therefore any changes in the FX rates are 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) Excludes the deferred revenue adjustment further explained in the "Accounting and modelling notes" section

   3.   Post Trade 

Results to adjusted operating profit (1)

 
  Continuing operations                                                              Constant 
                                                                                     Currency 
                                                                                    Variance(3) 
                                                                                         % 
                                        H1 2022    Pro-forma     Variance(2) 
                                                   H1 2021(1) 
                                          GBPm        GBPm            % 
                                      ---------  ------------ 
 OTC Derivatives                            191           169          13.0%              12.0% 
 Securities & Reporting                     122           123         (0.8%)               1.9% 
 Non-Cash Collateral                         49            46           6.5%               6.2% 
------------------------------------  ---------  ------------  -------------      ------------- 
 Total revenue                              362           338           7.1%               7.5% 
 Net Treasury Income                        121           108          12.0%              11.3% 
------------------------------------  ---------  ------------  -------------      ------------- 
 Total income                               483           446           8.3%               8.5% 
 Cost of sales                             (68)          (58)          17.2%              20.2% 
------------------------------------  ---------  ------------  -------------      ------------- 
 Gross profit                               415           388           7.0%               6.7% 
 Adjusted operating expenses before 
  depreciation, amortisation and 
  impairment                              (155)         (147)           5.4%               5.1% 
------------------------------------  ---------  ------------  -------------      ------------- 
 Adjusted earnings before interest, 
  tax, depreciation, amortisation 
  and impairment                            260           241           7.9%               7.7% 
 Depreciation, amortisation and 
  impairment                               (52)          (46)          13.0%              28.5% 
------------------------------------  ---------  ------------  -------------      ------------- 
 Adjusted operating profit                  208           195           6.7%               3.3% 
------------------------------------  ---------  ------------  -------------      ------------- 
 Adjusted EBITDA Margin                   53.8%         54.0% 
 

Non-financial KPIs (1)

 
                                    H1 2022   H1 2021   Variance 
                                                            % 
                                   --------  -------- 
 
 OTC 
 SwapClear 
 IRS notional cleared ($trn)            597       468        28% 
 SwapClear members                      123       122         1% 
 Client trades ('000)                 1,334     1,066        25% 
 Client average 10-year notional 
  equivalent ($trn)                     4.0       4.4       (9%) 
 
 ForexClear 
 Notional cleared ($bn)              12,708    10,776        18% 
 ForexClear members                      36        35         3% 
 
 CDSClear 
 Notional cleared (EURbn)             1,742     1,038        68% 
 CDSClear members                        25        25          - 
 
 Securities & Reporting 
 EquityClear trades (m)               1,199       976        23% 
 Listed derivatives contracts 
  (m)                                 147.2     150.3       (2%) 
 RepoClear - nominal value 
  (EURtrn)                            137.3     113.4        21% 
 
 Non-Cash Collateral 
 Average non-cash collateral 
  (EURbn)                             169.5     161.5         5% 
 
 Net Treasury Income 
 Average cash collateral 
  (EURbn)                             130.0     106.4        22% 
---------------------------------  --------  --------  --------- 
 

(1) The H1 2021 comparator is pro-forma and assumes that the acquisition of Refinitiv took place on 1 January 2021

(2) Variance is the difference between current and prior year periods using FX rates prevalent at each time, therefore any changes in the FX rates are 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

Appendix - Synergies and cost to achieve

 
 
                                H1 2022 
                                 GBPm 
 
 Revenue synergies 
 
 Run-rate realised                   44 
 
 Cost to achieve                     64 
 of which: 
   Capital expenditure               44 
   Non-underlying operating 
    expenses                         21 
 
 
 Cost synergies 
 
 Run-rate realised                  221 
 In-period benefit                   31 
 
 Cost to achieve                    121 
 of which: 
   Capital expenditure               27 
   Non-underlying operating 
    expenses                         94 
 
 

Appendix - Total income by type (1)

 
  Continuing operations              H1 2022    Pro-forma    Variance(2)          Constant         Constant 
                                                                                  Currency         Currency 
                                                                                 Variance(3)       Variance 
                                                                                                (excl. deferred 
                                                                                                    revenue 
                                                                                                  adjustment) 
                                                                                                     (3,4) 
                                       GBPm     H1 2021(1)        %                   %                % 
                                                   GBPm 
                                   ---------  ------------  ------------       -------------  ----------------- 
 Recurring                             2,604         2,389          9.0%                5.4%               4.5% 
 Transactional                           832           729         14.1%               11.7%              11.7% 
 Net Treasury Income                     121           108         12.0%               11.3%              11.3% 
 Other income                             12            14       (14.3%)             (14.2%)            (14.2%) 
 Total income (excl. recoveries)       3,569         3,240         10.2%                6.9%               6.2% 
 Recoveries                              166           178        (6.7%)                2.9%               1.8% 
---------------------------------  ---------  ------------  ------------       -------------  ----------------- 
 Total income (incl. recoveries)       3,735         3,419          9.2%                6.7%               6.0% 
---------------------------------  ---------  ------------  ------------       -------------  ----------------- 
 

(1) The H1 2021 comparator is pro-forma and assumes that the acquisition of Refinitiv took place on 1 January 2021

(2) Variance is the difference between current and prior year periods using FX rates prevalent at each time, therefore any changes in the FX rates are 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) Excludes the deferred revenue adjustment further explained in the "Accounting and modelling notes" section

Appendix - Total income and gross profit by quarter (1)

 
 GBPm                                Q1      Q2      Q3      Q4     2021     Q1      Q2 
                                   ------  ------  ------  ------  ------  ------ 
 
 Trading & Banking Solutions          372     373     373     375   1,493     378     391 
                                                                           ------  ------ 
    Trading                           297     297     296     296   1,186     298     308 
                                           ------  ------  ------  ------  ------  ------ 
    Banking                            75      76      77      79     307      80      83 
                                           ------  ------  ------  ------  ------  ------ 
 Enterprise Data Solutions            279     282     284     296   1,141     304     317 
                                           ------  ------  ------  ------  ------  ------ 
    Real Time Data                    178     182     182     188     730     195     202 
                                           ------  ------  ------  ------  ------  ------ 
    PRS                               101     100     102     108     411     109     115 
                                           ------  ------  ------  ------  ------  ------ 
 Investment Solutions                 274     286     294     302   1,156     308     328 
                                           ------  ------  ------  ------  ------  ------ 
    Benchmark Rates, Indices 
     & Analytics                      122     126     136     134     518     137     148 
                                           ------  ------  ------  ------  ------  ------ 
    Index - Asset-Based                58      64      62      69     253      70      71 
                                           ------  ------  ------  ------  ------  ------ 
    Data & Workflow                    94      96      96      99     385     101     109 
                                           ------  ------  ------  ------  ------  ------ 
 Wealth Solutions                      61      62      61      65     249      63      68 
                                           ------  ------  ------  ------  ------  ------ 
 Customer & Third-Party 
  Risk Solutions                       85      90      92      92     359      94     102 
---------------------------------  ------  ------  ------  ------  ------  ------  ------ 
 Data & Analytics                   1,071   1,093   1,104   1,130   4,398   1,147   1,207 
                                           ------  ------  ------  ------  ------  ------ 
 
 Equities                              61      59      60      61     241      67      62 
                                           ------  ------  ------  ------  ------  ------ 
 FX                                    57      53      56      57     223      60      63 
                                           ------  ------  ------  ------  ------  ------ 
 Fixed Income, Derivatives 
  & Other                             200     187     193     205     785     232     235 
---------------------------------  ------  ------  ------  ------  ------  ------  ------ 
 Capital Markets                      318     299     309     323   1,249     359     361 
                                           ------  ------  ------  ------  ------  ------ 
 
 OTC Derivatives                       87      82      86     103     358      93      98 
                                           ------  ------  ------  ------  ------  ------ 
 Securities & Reporting                63      60      60      63     246      64      58 
                                           ------  ------  ------  ------  ------  ------ 
 Non-Cash Collateral                   22      24      24      25      95      24      25 
                                           ------  ------  ------  ------  ------  ------ 
 Net Treasury Income                   55      53      47      52     207      57      64 
---------------------------------  ------  ------  ------  ------  ------  ------  ------ 
 Post Trade                           227     219     217     243     906     238     245 
                                           ------  ------  ------  ------  ------  ------ 
 
 Other                                  5      10       9      10      34       7       5 
---------------------------------  ------  ------  ------  ------  ------  ------  ------ 
 Total income (excl. recoveries)    1,621   1,621   1,639   1,706   6,587   1,751   1,818 
                                           ------  ------  ------  ------  ------  ------ 
 Recoveries                            88      90      90      86     354      80      86 
---------------------------------  ------  ------  ------  ------  ------  ------  ------ 
 Total income (incl. recoveries)    1,709   1,711   1,729   1,792   6,941   1,831   1,904 
                                           ------  ------  ------  ------  ------  ------ 
 Cost of sales                      (230)   (222)   (227)   (241)   (920)   (240)   (264) 
---------------------------------  ------  ------  ------  ------  ------  ------  ------ 
 Gross profit                       1,479   1,489   1,502   1,551   6,021   1,591   1,640 
---------------------------------  ------  ------  ------  ------  ------  ------  ------ 
 

The table above has used FX rates on a YTD average basis which is the basis upon which the Group presents its financials. Revenues and cost of sales associated with the BETA divestment have been classed as discontinued and are excluded in all periods. Revenues and cost of sales associated with the Borsa Italiana group divestment, completed in H1 2021, are also excluded.

(1) Q1 2021 is pro-forma and assumes that the acquisition of Refinitiv took place on 1 January 2021

Condensed consolidated income statement

 
Six months ended 30 
 June                                                    2022                                 2021 
                                                       Unaudited                   Unaudited (re-presented)(1) 
                                          -----------------------------------  ----------------------------------- 
                                          Underlying  Non-underlying    Total  Underlying  Non-underlying    Total 
                                   Notes        GBPm            GBPm     GBPm        GBPm            GBPm     GBPm 
---------------------------------  -----  ----------  --------------  -------  ----------  --------------  ------- 
Continuing operations 
---------------------------------  -----  ----------  --------------  -------  ----------  --------------  ------- 
                                      4, 
Revenue                                5       3,602               -    3,602       2,897               -    2,897 
Net treasury income                   4, 
 from CCP clearing business            5         121               -      121         108               -      108 
                                      4, 
Other income                           5          12               -       12          13               -       13 
---------------------------------  -----  ----------  --------------  -------  ----------  --------------  ------- 
Total income                                   3,735               -    3,735       3,018               -    3,018 
 
Cost of sales                          4       (504)               -    (504)       (392)               -    (392) 
Gross profit                                   3,231               -    3,231       2,626               -    2,626 
 
Operating expenses before 
 depreciation, amortisation           6, 
 and impairment                        7     (1,433)           (160)  (1,593)     (1,219)           (182)  (1,401) 
Profit on disposal of 
 property, plant and equipment         7           -             133      133           -               -        - 
                                    2.1, 
Remeasurement gain                     7           -              23       23           -               -        - 
Income from equity investments                     -               -        -          11               -       11 
Share of profit/(loss) 
 after tax of associates                           1               -        1         (2)               -      (2) 
---------------------------------  -----  ----------  --------------  -------  ----------  --------------  ------- 
Earnings before interest, 
 tax, depreciation, amortisation 
 and impairment                                1,799             (4)    1,795       1,416           (182)    1,234 
 
Depreciation, amortisation 
 and impairment                        7       (391)           (507)    (898)       (297)           (387)    (684) 
Operating profit/(loss)                4       1,408           (511)      897       1,119           (569)      550 
 
Finance income                                    40               -       40          19               -       19 
Finance expense                                (121)            (13)    (134)       (105)             (1)    (106) 
                                          ----------  --------------  -------  ----------  --------------  ------- 
                                      7, 
Net finance expense                    8        (81)            (13)     (94)        (86)             (1)     (87) 
---------------------------------  -----  ----------  --------------  -------  ----------  --------------  ------- 
Profit/(loss) before 
 tax                                           1,327           (524)      803       1,033           (570)      463 
 
                                      7, 
Taxation                               9       (262)             103    (159)       (215)            (39)    (254) 
---------------------------------  -----  ----------  --------------  -------  ----------  --------------  ------- 
Profit/(loss) from continuing 
 operations                                    1,065           (421)      644         818           (609)      209 
---------------------------------  -----  ----------  --------------  -------  ----------  --------------  ------- 
 
Discontinued operations 
---------------------------------  -----  ----------  --------------  -------  ----------  --------------  ------- 
Profit/(loss) after tax 
 from discontinued operations          3          55             (2)       53         121           2,517    2,638 
---------------------------------  -----  ----------  --------------  -------  ----------  --------------  ------- 
Profit/(loss) for the 
 period                                        1,120           (423)      697         939           1,908    2,847 
---------------------------------  -----  ----------  --------------  -------  ----------  --------------  ------- 
(1) The results for the six months ended 30 June 2021 have been re-presented 
 to exclude the results of discontinued operations (refer to note 3) 
 
 

Condensed consolidated income statement (continued)

 
Six months ended 30 June                                2022                                 2021 
                                                      Unaudited                   Unaudited (re-presented)(1) 
                                         -----------------------------------  ----------------------------------- 
                                         Underlying  Non-underlying    Total  Underlying  Non-underlying    Total 
                                  Notes        GBPm            GBPm     GBPm        GBPm            GBPm     GBPm 
--------------------------------  -----  ----------  --------------  -------  ----------  --------------  ------- 
Profit/(loss) from continuing 
 operations attributable 
 to: 
--------------------------------  -----  ----------  --------------  -------  ----------  --------------  ------- 
Equity holders                                  934           (386)      548         721           (578)      143 
Non-controlling interests                       131            (35)       96          97            (31)       66 
--------------------------------  -----  ----------  --------------  -------  ----------  --------------  ------- 
Profit/(loss) from continuing 
 operations                                   1,065           (421)      644         818           (609)      209 
--------------------------------  -----  ----------  --------------  -------  ----------  --------------  ------- 
 
Profit/(loss) from discontinued 
 operations attributable 
 to: 
--------------------------------  -----  ----------  --------------  -------  ----------  --------------  ------- 
Equity holders                                   55             (2)       53         117           2,518    2,635 
Non-controlling interests                         -               -        -           4             (1)        3 
--------------------------------  -----  ----------  --------------  -------  ----------  --------------  ------- 
Profit/(loss) from discontinued 
 operations                           3          55             (2)       53         121           2,517    2,638 
--------------------------------  -----  ----------  --------------  -------  ----------  --------------  ------- 
Profit/(loss) for the 
 period                                       1,120           (423)      697         939           1,908    2,847 
--------------------------------  -----  ----------  --------------  -------  ----------  --------------  ------- 
 
Earnings per share attributable 
 to equity holders: 
--------------------------------  -----  ----------  --------------  -------  ----------  --------------  ------- 
Continuing operations 
--------------------------------  -----  ----------  --------------  -------  ----------  --------------  ------- 
Basic earnings per share             10                                98.0p                                27.2p 
Diluted earnings per share           10                                97.3p                                27.2p 
Adjusted basic earnings 
 per share                           10      167.4p                               139.0p 
Adjusted diluted earnings 
 per share                           10      166.1p                               138.1p 
--------------------------------  -----  ----------  --------------  -------  ----------  --------------  ------- 
 
Total operations 
--------------------------------  -----  ----------  --------------  -------  ----------  --------------  ------- 
Basic earnings per share             10                               107.6p                               535.3p 
Diluted earnings per share           10                               106.8p                               532.2p 
Adjusted basic earnings 
 per share                           10      177.4p                               161.5p 
Adjusted diluted earnings 
 per share                           10      176.0p                               160.5p 
--------------------------------  -----  ----------  --------------  -------  ----------  --------------  ------- 
 
Dividend per share in 
 respect of the financial 
 period 
--------------------------------  -----  ----------  --------------  -------  ----------  --------------  ------- 
Dividend per share paid 
 during the period                   11                                70.0p                                51.7p 
Dividend per share declared 
 for the period                      11                                31.7p                                25.0p 
--------------------------------  -----  ----------  --------------  -------  ----------  --------------  ------- 
(1) The results for the six months ended 30 June 2021 have been re-presented 
 to exclude the results of discontinued operations (refer to note 3) 
 
 
 

Condensed consolidated statement of comprehensive income

 
Six months ended 30 June                                                 2022               2021 
                                                                    Unaudited          Unaudited 
                                                                               (Re-presented)(1) 
Continuing operations                                        Notes       GBPm               GBPm 
-----------------------------------------------------------  -----  ---------  ----------------- 
Profit from continuing operations                                         644                209 
-----------------------------------------------------------  -----  ---------  ----------------- 
 
Other comprehensive income 
 
Items that will not be subsequently reclassified 
 to the income statement 
Actuarial (losses)/gains on retirement benefit 
 obligations                                                            (105)                 77 
Gain on equity instruments at fair value through 
 other comprehensive income                                     13         21                  - 
Income tax relating to above items                               9         35               (19) 
                                                                         (49)                 58 
-----------------------------------------------------------  -----  ---------  ----------------- 
 
Items that may be subsequently reclassified to 
 the income statement 
Gain on cash flow hedges                                        14          -                 22 
Gain on cash flow hedge recycled to the income 
 statement                                                      14        (1)                  - 
Net (losses)/gains on net investment hedges                     14       (85)                 72 
Debt instruments at fair value through other comprehensive 
 income (FVOCI) 
-- Net gains/(losses) from changes in fair value                            5                (4) 
-- Gains recycled to the income statement                                   -                (3) 
Net exchange gains/(losses) on translation of 
 foreign operations                                                     2,329              (264) 
Income tax relating to above items                               9        (2)                  1 
                                                                        2,246              (176) 
-----------------------------------------------------------  -----  ---------  ----------------- 
 
Other comprehensive income/(loss) net of tax 
 from continuing operations                                             2,197              (118) 
-----------------------------------------------------------  -----  ---------  ----------------- 
 
Total comprehensive income from continuing operations                   2,841                 91 
-----------------------------------------------------------  -----  ---------  ----------------- 
 
Discontinued operations 
-----------------------------------------------------------  -----  ---------  ----------------- 
Total comprehensive income from discontinued 
 operations                                                      3         53              2,630 
-----------------------------------------------------------  -----  ---------  ----------------- 
 
Total comprehensive income for the period                               2,894              2,721 
-----------------------------------------------------------  -----  ---------  ----------------- 
 
Total comprehensive income from continuing operations 
 attributable to: 
-----------------------------------------------------------  -----  ---------  ----------------- 
Equity holders                                                          2,566                 39 
Non-controlling interests                                                 275                 52 
-----------------------------------------------------------  -----  ---------  ----------------- 
Total comprehensive income from continuing operations                   2,841                 91 
-----------------------------------------------------------  -----  ---------  ----------------- 
 
Total comprehensive income from discontinued 
 operations attributable to: 
-----------------------------------------------------------  -----  ---------  ----------------- 
Equity holders                                                             53              2,627 
Non-controlling interests                                                   -                  3 
-----------------------------------------------------------  -----  ---------  ----------------- 
Total comprehensive income from discontinued 
 operations                                                      3         53              2,630 
-----------------------------------------------------------  -----  ---------  ----------------- 
Total comprehensive income for the period                               2,894              2,721 
-----------------------------------------------------------  -----  ---------  ----------------- 
(1) The results for the six months ended 30 June 2021 have been re-presented 
 to exclude the results of discontinued operations (refer to note 3) 
 
 

Condensed consolidated balance sheet

 
                                                         30 June  31 December 
                                                            2022         2021 
                                                       Unaudited 
                                                Notes       GBPm         GBPm 
---------------------------------------------  ------  ---------  ----------- 
Assets 
Non-current assets 
Property, plant and equipment                                759          832 
Intangible assets                                  12     34,567       31,724 
Investment in associates                                      33           25 
Deferred tax assets                                          602          508 
Derivative financial instruments                   14         10            2 
Investments in financial assets                13, 14        385          351 
Retirement benefit assets                                    472          568 
Trade and other receivables                        14        213          202 
                                                          37,041       34,212 
---------------------------------------------  ------  ---------  ----------- 
Current assets 
Trade and other receivables                        14      1,334          967 
Derivative financial instruments                   14         65           25 
Clearing member financial assets                         734,107      665,031 
Clearing member cash and cash equivalents                110,795       83,795 
                                                       ---------  ----------- 
Clearing member assets                             14    844,902      748,826 
Current tax receivable                                       553          398 
Cash and cash equivalents                          14      2,520        2,665 
Assets held for sale                                3        274           16 
---------------------------------------------  ------  ---------  ----------- 
                                                         849,648      752,897 
---------------------------------------------  ------  ---------  ----------- 
Total assets                                             886,689      787,109 
---------------------------------------------  ------  ---------  ----------- 
Liabilities 
Current liabilities 
Trade and other payables                           14      1,598        1,782 
Contract liabilities                                         424          245 
Derivative financial instruments                   14         22            7 
Clearing member financial liabilities              14    844,651      748,644 
Current tax payable                                          163           73 
Borrowings                                     14, 15         60            - 
Provisions                                                    10           16 
Liabilities directly associated with assets 
 held for sale                                      3         42            - 
---------------------------------------------  ------  ---------  ----------- 
                                                         846,970      750,767 
---------------------------------------------  ------  ---------  ----------- 
Non-current liabilities 
Borrowings                                     14, 15      8,258        7,654 
Derivative financial instruments                   14         90           45 
Contract liabilities                                          96          101 
Deferred tax liabilities                                   2,141        1,835 
Retirement benefit obligations                                87           85 
Other payables                                     14      1,126        1,059 
Provisions                                                    57           44 
---------------------------------------------  ------  ---------  ----------- 
                                                          11,855       10,823 
Total liabilities                                        858,825      761,590 
---------------------------------------------  ------  ---------  ----------- 
Net assets                                                27,864       25,519 
---------------------------------------------  ------  ---------  ----------- 
Equity 
Capital and reserves attributable to the Company's 
 equity holders 
Ordinary share capital                                        39           39 
Share premium                                                978          978 
Retained earnings                                          4,028        3,816 
Other reserves                                            20,876       18,807 
---------------------------------------------  ------  ---------  ----------- 
Total shareholders' funds                                 25,921       23,640 
Non-controlling interests                                  1,943        1,879 
---------------------------------------------  ------  ---------  ----------- 
Total equity                                              27,864       25,519 
---------------------------------------------  ------  ---------  ----------- 
 
 

Condensed consolidated cash flow statement

 
Six months ended 30 June                                             2022               2021 
                                                                Unaudited          Unaudited 
                                                                           (Re-presented)(1) 
                                                         Notes       GBPm               GBPm 
----------------------------------------------------  --------  ---------  ----------------- 
Operating activities 
Profit from continuing operations                                     644                209 
Adjustments to reconcile profit to net cash 
 flow: 
- Depreciation and impairment of property, 
 plant and equipment                                                  154                113 
- Amortisation and impairment of intangible 
 assets                                                     12        744                571 
- Taxation                                                   9        159                254 
- Profit on disposal of property, plant and 
 equipment                                                   7      (133)                  - 
- Share based payments                                                 71                 64 
- Net finance expense                                        8         94                 87 
- Net foreign exchange losses                                          68                162 
- Dividend income                                                       -               (11) 
- Other movements                                                      12                 59 
- (Increase)/decrease in receivables, contract 
 and other assets                                                   (331)                444 
- Decrease in payables, contract and other 
 liabilities                                                         (89)              (575) 
- Increase in clearing member financial assets                   (68,887)           (79,777) 
- Increase in clearing member financial liabilities                68,832             79,714 
----------------------------------------------------  --------  ---------  ----------------- 
Cash generated from operations                                      1,338              1,314 
Interest received                                                       -                  7 
Interest paid                                                        (77)               (67) 
Taxes paid                                                          (212)               (85) 
Withholding tax received                                                5                  - 
Royalties paid                                                       (40)               (30) 
----------------------------------------------------  --------  ---------  ----------------- 
Net cash flows from continuing operations                           1,014              1,139 
Net cash flows from discontinued operations                  3         37               (36) 
----------------------------------------------------  --------  ---------  ----------------- 
Net cash flows from operating activities                            1,051              1,103 
----------------------------------------------------  --------  ---------  ----------------- 
Investing activities 
Purchase of property, plant and equipment                           (110)               (25) 
Proceeds from disposal of property, plant 
 and equipment                                                        153                  - 
Purchase of intangible assets                               12      (363)              (204) 
Acquisition of subsidiaries, net of cash acquired     2.1, 2.2      (359)                774 
Proceeds from sale of disposal group, net 
 of cash disposed                                                       -              3,592 
Dividends received                                                      -                 11 
Other investing activities                                           (35)               (15) 
----------------------------------------------------  --------  ---------  ----------------- 
Net cash flows from continuing operations                           (714)              4,133 
Net cash flows from discontinued operations                  3       (16)               (18) 
----------------------------------------------------  --------  ---------  ----------------- 
Net cash flows from investing activities                            (730)              4,115 
----------------------------------------------------  --------  ---------  ----------------- 
Financing activities 
Payment of principal portion of lease liabilities                    (71)               (45) 
Proceeds from borrowings                                    15         62              5,043 
Repayment of borrowings                                     15          -            (8,852) 
Dividends paid to equity holders of the parent              11      (390)              (287) 
Dividends paid to non-controlling interests                          (68)               (70) 
Other financing activities                                          (123)                 12 
----------------------------------------------------  --------  ---------  ----------------- 
Net cash flows from continuing operations                           (590)            (4,199) 
Net cash flows from discontinued operations                  3          -                (4) 
----------------------------------------------------  --------  ---------  ----------------- 
Net cash flows from financing activities                            (590)            (4,203) 
----------------------------------------------------  --------  ---------  ----------------- 
(Decrease)/increase in cash and cash equivalents                    (269)              1,015 
Foreign exchange translation                                          124               (58) 
Cash and cash equivalents at beginning of 
 period                                                             2,665              1,785 
----------------------------------------------------  --------  ---------  ----------------- 
Cash and cash equivalents at end of period                          2,520              2,742 
----------------------------------------------------  --------  ---------  ----------------- 
(1) The results for the six months ended 30 June 2021 have been re-presented 
 to exclude the results of discontinued operations (refer to note 3) 
 
 

Condensed consolidated statement of changes in equity

 
                                                   Attributable to equity holders 
                                      -------------------------------------------------------- 
                                                                                         Total 
                                      Ordinary                                   attribu-table           Non- 
                                         share     Share   Retained      Other       to equity   control-ling    Total 
                                       capital   premium   earnings   reserves         holders      interests   equity 
                               Notes      GBPm      GBPm       GBPm       GBPm            GBPm           GBPm     GBPm 
-----------------------------  -----  --------  --------  ---------  ---------  --------------  -------------  ------- 
1 January 2021                              24       971        911      1,805           3,711            414    4,125 
Total comprehensive income 
 for the period                              -         -      2,823      (157)           2,666             55    2,721 
Issue of shares                              -         1          -          -               1              -        1 
Issue of shares for 
 acquisition 
 of subsidiaries (with 
 non-controlling 
 interest)                                  15         -       (25)     16,981          16,971          1,442   18,413 
Dividends paid in the period      11         -         -      (287)          -           (287)           (76)    (363) 
Share-based payments                         -         -         36          -              36              4       40 
Tax benefit in relation 
 to share-based payments           9         -         -          4          -               4              -        4 
Disposal of business                         -         -          -       (44)            (44)           (65)    (109) 
Adjustment to non-controlling 
 interests                                   -         -          -          -               -           (11)     (11) 
30 June 2021 (Unaudited)(1)                 39       972      3,462     18,585          23,058          1,763   24,821 
-----------------------------  -----  --------  --------  ---------  ---------  --------------  -------------  ------- 
 
1 January 2022                              39       978      3,816     18,807          23,640          1,879   25,519 
Total comprehensive income 
 for the period                              -         -        550      2,069           2,619            275    2,894 
Dividends paid in the period      11         -         -      (390)          -           (390)           (68)    (458) 
Share-based payments                         -         -         42          -              42             32       74 
Tax benefit/(expense) in 
 relation to share-based 
 payments                          9         -         -          6          -               6           (84)     (78) 
Deferred tax on investments 
 in partnerships                   9         -         -          -          -               -             35       35 
Purchase of non-controlling 
 interests                                   -         -          4          -               4           (19)     (15) 
Tradeweb share buyback                       -         -          -          -               -           (43)     (43) 
Shares withheld from employee 
 options exercised (Tradeweb)                -         -          -          -               -           (64)     (64) 
30 June 2022 (Unaudited)                    39       978      4,028     20,876          25,921          1,943   27,864 
-----------------------------  -----  --------  --------  ---------  ---------  --------------  -------------  ------- 
(1) The condensed consolidated balance sheet as at 30 June 2021 has 
 been revised from that reported in the H1 2021 interim results to reflect 
 the adjustment to the provisional accounting in respect of Refinitiv 
 Parent Ltd and its subsidiaries acquired on 29 January 2021. 
 
 

N otes to the interim condensed consolidated financial statements

   1.   Basis of preparation and changes to accounting policies 

1.1 Reporting entity

The interim condensed consolidated financial statements (interim statements) of London Stock Exchange Group plc (the 'Group' or the 'Company') for the six months ended 30 June 2022 were approved by the Directors on 4 August 2022.

The Company is a public company, incorporated and domiciled in England and Wales. The address of its registered office is 10 Paternoster Square, London, EC4M 7LS.

On 31 May 2022, the Group acquired:

 
 --   Global Data Consortium Inc (GDC) (refer to note 2.1). The results 
       of GDC have been consolidated since the date of acquisition. 
 --   MayStreet Inc. (MayStreet) (refer to note 2.2). The results of MayStreet 
       have been consolidated since the date of acquisition. 
 

On 21 March 2022, the disposal of the BETA, Maxit and Digital Investor businesses (collectively BETA) was assessed to be highly probable and the collective business was treated as a disposal group from that date. BETA is also deemed to be a discontinued operation as it represented a separate major line of business of the Group. Its profits, losses and cash flows have therefore been separated from the Group's continuing operations and are shown as discontinued operations. The comparative period has been re-presented accordingly.

1.2. Basis of preparation

The interim statements of the Group for the six months ended 30 June 2022 have been prepared in accordance with the Disclosure and Transparency Rules of the Financial Conduct Authority and UK-adopted International Accounting Standard 34 Interim Financial Reporting.

The interim statements are unaudited but have been reviewed by the auditors and their review opinion is included in this report.

Comparative amounts presented for the condensed consolidated balance sheet relate to the Group's position as at 31 December 2021 . All other comparative amounts presented relate to the six months ended 30 June 2021 (referred to as H1 2021).

The interim statements do not include all the information and disclosures required in the annual financial statements, and should be read in conjunction with the Group's consolidated financial statements for the year ended 31 December 2021, which were prepared in accordance with UK-adopted international accounting standards in conformity with the requirements of the Companies Act 2006. The interim statements do not constitute statutory financial statements within the meaning of section 434 of the Companies Act 2006.

The statutory financial statements of London Stock Exchange Group plc for the year ended 31 December 2021 , which carried an unqualified audit report and did not contain a statement under section 498 of the Companies Act 2006, have been delivered to the Registrar of Companies.

All notes to the interim statements include amounts for continuing operations, unless otherwise stated.

Going concern

The Group has prepared these interim statements on the basis that it will continue to operate as a going concern. In assessing the appropriateness of the going concern assumption, management has stress tested the Group's most recent financial projections using severe but plausible downside scenarios as determined by the Group Risk Committee and considering the Group's principal risks. No scenario leads to an inability to meet the Group's obligations through insufficient headroom. Therefore, the Directors consider there to be no material uncertainties that may cast significant doubt on the Group's ability to continue to operate as a going concern. The Directors have a reasonable expectation that the Group has adequate resources to continue in operational existence for the foreseeable future, being at least 12 months from approval of these interim statements.

1.3 New standards, interpretations, and amendments

The principal accounting policies adopted in the preparation of these interim statements are consistent with those applied in the preparation of the Group's annual consolidated financial statements for the year ended 31 December 2021, except for the adoption of amended standards effective as of 1 January 2022. None of the amendments adopted on 1 January 2022 have had a material impact on the interim statements of the Group.

The Group has not early adopted any other standards, amendments or interpretations that have been issued but are not yet effective.

1.4 Significant accounting judgements, estimates and assumptions

The preparation of the interim statements requires management to make judgements, estimates and assumptions that affect the reported income and expense, assets and liabilities, and the disclosure of contingencies at the date of the interim statements. Although these judgements, estimates and assumptions are based on management's best judgement at the date of the interim statements, actual results may differ from these estimates.

Judgements and estimates are regularly evaluated based on historical experience, current circumstances and expectations of future events. The significant judgements made by management in applying the Group's accounting policies and the key sources of estimation uncertainty are the same as those described in the audited 31 December 2021 annual financial statements note 1.7 (significant accounting judgements, estimates and assumptions), except for the judgements and sources of estimation uncertainty related to the acquisitions of GDC and MayStreet, and the Russian tax audit as described below:

 
       Intangible assets acquired as part of a business combination : 
  -- 
       -     The fair value of the intangible assets (and therefore the 
              resulting goodwill recognised on acquisition) is significantly 
              affected by a number of factors including management's best 
              estimates of future performance and estimates of the return 
              required to determine an appropriate discount rate. Further 
              detail of the valuation methodologies is provided in note 2. 
       -     The intangible assets are amortised over their estimated useful 
              economic lives, which are also based on management's best estimates 
              of the periods over which value from the intangible assets 
              is realised. Further detail of the estimated useful economic 
              lives of the intangible assets acquired during the period is 
              provided in note 2. 
 
       Russian tax audit: The Group has used its judgement in assessing 
  --    the financial reporting implications of its ongoing audit by the 
        Russian Tax Authorities. The Group has used guidance under IFRIC 
        23 Uncertainty over Income Tax Treatments to determine the possible 
        outcomes and to assign a probability to each of those outcomes. 
        Further detail is provided in note 9. 
 
 

1.5 Other information

There have been no material related party transactions in H1 2022 and no material changes to the related party transactions described in the audited 31 December 2021 annual financial statements that could have a material effect on the H1 2022 financial position or performance.

   2.   Business combinations 

2.1 GDC acquisition

On 31 May 2022, the Group acquired 89% of GDC, a global provider of high-quality identity verification data to support clients with Know Your Customer (KYC) requirements. Prior to the acquisition LSEG held an 11% interest in GDC and on 31 May 2022, recognised a remeasurement gain on this investment in associate of GBP23 million.

GDC's services are currently used within LSEG's Customer & Third-Party Risk Solutions business within the Data & Analytics division, to provide global digital identity verification to customers. Adding GDC to the Group's suite of digital identity solutions will enable the Group to continue to expand capabilities in this segment, through both direct sales and channel partnerships.

The purchase price allocation (PPA) has been prepared on a provisional basis in accordance with IFRS 3 Business Combinations. If new information obtained within one year of the acquisition date, about facts and circumstances that existed at the acquisition date, identifies adjustments to the amounts below or any additional provisions that existed at the date of acquisition, then the accounting for the acquisition will be revised.

 
Goodwill arising from the acquisition has been recognised as follows: 
 
                                                                     Estimated 
                                                                        useful 
                                               Notes   US$m  GBPm        lives 
--------------------------------------------  ------  -----  ----  ----------- 
Purchase consideration 
- Cash (including settlement of share 
 options)                                               269   213 
- Fair value of previous equity interest 
 held in GDC                                             36    28 
--------------------------------------------  ------  -----  ----  ----------- 
Total purchase consideration                            305   241 
--------------------------------------------  ------  -----  ----  ----------- 
 
Less: Fair value of identifiable 
 net assets acquired 
- Intangible assets: Customer and 
 supplier relationships                           12   (85)  (67)  15-18 years 
- Intangible assets: Software                     12   (35)  (28)     10 years 
- Other non-current assets                              (1)     - 
- Other current assets                                  (5)   (4) 
- Cash and cash equivalents                             (6)   (5) 
- Total liabilities, excluding deferred 
 tax liabilities                                          5     4 
- Deferred tax liabilities                               15    12 
--------------------------------------------  ------  -----  ----  ----------- 
Fair value of identifiable net assets 
 acquired                                             (112)  (88) 
--------------------------------------------  ------  -----  ----  ----------- 
 
Goodwill                                          12    193   153 
--------------------------------------------  ------  -----  ----  ----------- 
 

The fair values of the net assets acquired were determined based on assumptions that reasonable market participants would use in the principal (or most advantageous) market and primarily included significant unobservable inputs (Level 3 of the fair value hierarchy). The following valuation methodologies were used to determine fair value:

 
 --   Customer relationships: multi-period excess earnings method 
       (MEEM) (income approach) 
 --   Supplier relationships: replacement cost approach 
 --   Software: relief from royalty method (income approach) 
 

The deferred tax liability mainly comprises the tax effect of the intangible assets.

The goodwill is attributable to:

 
 --   growth in the underlying business; 
 --   future data and technology not yet developed; and 
 --   expected synergies which will drive growth in the combined 
       business. 
 

Goodwill has been provisionally allocated to the Data & Analytics cash-generating unit. None of the goodwill recognised is expected to be deductible for income tax purposes.

Revenue and profit before tax

From the date of acquisition, GDC contributed revenue of GBP2 million and immaterial profit before tax.

If the acquisition had occurred on 1 January 2022, estimated Group revenue for the period from continuing operations would have been GBP3,610 million, with operating profit before non-underlying items of GBP1,407 million.

Acquisition related costs

The Group incurred acquisition related costs of GBP1 million on advisor and professional fees and management retention costs. These costs are recognised as non-underlying transaction costs in the income statement (refer to note 7).

2.2 MayStreet acquisition

On 31 May 2022, the Group acquired MayStreet, a market data solutions provider. MayStreet provides global low latency technology and market data to over 65 industry participants, including banks, asset managers and hedge funds. MayStreet has an existing commercial partnership with LSEG to support LSEG's Real-Time Direct feed offering. It has also served as a market data provider to the SEC's Market Information Data Analytics System (MIDAS) since 2019.

The acquisition enhances LSEG's Enterprise Data Solutions business, within the Data & Analytics division, expanding LSEG's capabilities across the latency spectrum through a global low latency network of over 300 cross asset, exchange and trading venue feeds. This broadens and complements LSEG's real-time feeds and historical market data value proposition, particularly for front office customers, who use these solutions to support research and strategy development and to power electronic trading applications.

The PPA has been prepared on a provisional basis in accordance with IFRS 3. If new information obtained within one year of the acquisition date, about facts and circumstances that existed at the acquisition date, identifies adjustments to the amounts below or any additional provisions that existed at the date of acquisition, then the accounting for the acquisition will be revised.

Goodwill arising from the acquisition has been recognised as follows:

 
                                                                  Estimated 
                                                                     useful 
                                               Notes  US$m  GBPm      lives 
---------------------------------------------  -----  ----  ----  --------- 
Purchase consideration 
-- Cash (including settlement of 
 share options)                                        194   153 
---------------------------------------------  -----  ----  ----  --------- 
Total purchase consideration                           194   153 
---------------------------------------------  -----  ----  ----  --------- 
 
Less: Fair value of identifiable 
 net assets acquired 
-- Intangible assets: Customer relationships      12  (35)  (28)   15 years 
-- Intangible assets: Software                    12  (49)  (39)   10 years 
-- Other non-current assets                            (1)   (1) 
-- Other current assets                                (3)   (3) 
-- Cash and cash equivalents                           (2)   (2) 
-- Total liabilities, excluding deferred 
 tax liabilities                                        24    19 
-- Deferred tax liabilities                             11     9 
---------------------------------------------  -----  ----  ----  --------- 
Fair value of identifiable net assets 
 acquired                                             (55)  (45) 
---------------------------------------------  -----  ----  ----  --------- 
 
Goodwill                                          12   139   108 
---------------------------------------------  -----  ----  ----  --------- 
 

The fair values of the net assets acquired were determined based on assumptions that reasonable market participants would use in the principal (or most advantageous) market and primarily included significant unobservable inputs (Level 3 of the fair value hierarchy). The following valuation methodologies were used to determine fair value:

   --    Customer relationships: multi-period excess earnings method (MEEM) (income approach) 
   --    Software: relief from royalty method (income approach) 

The deferred tax liability mainly comprises the tax effect of the intangible assets.

The goodwill is attributable to:

 
 --   growth in the underlying business; 
 --   future data and technology not yet developed; and 
 --   expected synergies which will drive growth in the combined 
       business. 
 

Goodwill has been provisionally allocated to the Data & Analytics cash-generating unit. None of the goodwill recognised is expected to be deductible for income tax purposes.

Revenue and profit before tax

From the date of acquisition, MayStreet contributed revenue of GBP1 million and a loss before tax of GBP1 million.

If the acquisition had occurred on 1 January 2022, estimated Group revenue for the period from continuing operations would have been GBP3,607 million, with operating profit before non-underlying items of GBP1,401 million.

Acquisition related costs

The Group incurred acquisition related costs of GBP4 million on advisor and professional fees and management retention costs. These costs are recognised as non-underlying transaction costs in the income statement (refer to note 7).

Employment-linked management incentive and earn-out arrangements

As part of the purchase agreement, employment-linked management incentive and earn-out arrangements have been agreed with the former founders and senior management. These arrangements are contingent on continuing employment and will be recognised as post-combination compensation over the arrangement period.

   3.   Discontinued operations and assets held for sale 

Agreed disposal of BETA during the period ended 30 June 2022

On 21 March 2022, the disposal of BETA was assessed to be highly probable and it has been treated as a disposal group from that date. BETA is also deemed to be a discontinued operation as it represented a separate major line of business. Its results have been excluded from the continuing results of the Group for the period ended 30 June 2022. The results for the period ended 30 June 2021 have been re-presented to exclude the BETA results from the continuing operations of the Group.

On 1 July 2022, BETA was sold for a total cash consideration of US$1.1 billion (GBP0.9 billion), realising an estimated profit on disposal of GBP0.6 billion, before separation costs and tax.

Disposal of the Borsa Italiana group during the period ended 30 June 2021

On 29 April 2021, the Group disposed of Borsa Italiana. It was presented as a discontinued operation and its results are excluded from the continuing operations of the Group for the period ended 30 June 2021.

As part of the disposal agreement the Group continues to provide services to the Borsa Italiana group on an arm's length basis.

 
Summary income statement and statement of other comprehensive income 
The results for BETA and the Borsa Italiana group included in the income 
 statement and statement of comprehensive income as discontinued operations 
 are as follows: 
 
Six months ended 30 June                                        2022            2021 
                                                           Unaudited       Unaudited 
                                                                      (Re-presented) 
Discontinued operations                                         GBPm            GBPm 
--------------------------------------------------------   ---------  -------------- 
BETA 
Total income                                                     132              95 
Cost of sales and expenses (excluding non-underlying 
 expenses)                                                      (59)            (45) 
---------------------------------------------------------  ---------  -------------- 
Adjusted profit before tax                                        73              50 
Non-underlying expenses                                          (2)             (3) 
---------------------------------------------------------  ---------  -------------- 
Profit before tax                                                 71              47 
Taxation                                                        (18)            (12) 
Profit from discontinued operations - BETA                        53              35 
 
Profit from discontinued operations - Borsa 
 Italiana group                                                    -           2,603 
Other comprehensive income from discontinued 
 operations - Borsa Italiana group                                 -             (8) 
---------------------------------------------------------  ---------  -------------- 
Total comprehensive income from discontinued operations           53           2,630 
---------------------------------------------------------  ---------  -------------- 
 
 
Summary cash flow statement 
The results for BETA and the Borsa Italiana group included in the cash 
 flow statement as discontinued operations are as follows: 
 
Six months ended 30 June                                 2022            2021 
                                                    Unaudited       Unaudited 
                                                               (Re-presented) 
Discontinued operations                                  GBPm            GBPm 
-----------------------------------------------    ----------  -------------- 
Operating activities 
BETA                                                       37              42 
Borsa Italiana group                                        -            (78) 
-------------------------------------------------  ----------  -------------- 
Net cash flows from operating activities                   37            (36) 
-------------------------------------------------  ----------  -------------- 
Investing activities 
BETA                                                     (16)            (16) 
Borsa Italiana group                                        -             (2) 
-------------------------------------------------  ----------  -------------- 
Net cash flows from investing activities                 (16)            (18) 
-------------------------------------------------  ----------  -------------- 
Financing activities 
Borsa Italiana group                                        -             (4) 
-------------------------------------------------  ----------  -------------- 
Net cash flows from financing activities                    -             (4) 
-------------------------------------------------  ----------  -------------- 
 
Net cash flows from discontinued operations 
 for the period                                            21            (58) 
-------------------------------------------------  ----------  -------------- 
 
The BETA business holds no cash on its own account and is funded by 
 the Group. 
 
The cash flow statement above excludes the net sale proceeds of the 
 Borsa Italiana group of GBP3,592 million. 
 
 
Net assets held for sale 
The major classes of assets and liabilities classified as held for 
 sale are as follows: 
 
                                                     30 June 
                                                        2022  31 December 
                                                   Unaudited         2021 
                                                        GBPm         GBPm 
-----------------------------------------------    ---------  ----------- 
Assets 
Property, plant and equipment                             37           16 
Intangible assets                                        190            - 
Other assets                                              47            - 
-------------------------------------------------  ---------  ----------- 
Assets held for sale                                     274           16 
-------------------------------------------------  ---------  ----------- 
 
Liabilities 
Other liabilities                                         42            - 
-------------------------------------------------  ---------  ----------- 
Liabilities directly associated with assets 
 held for sale                                            42            - 
-------------------------------------------------  ---------  ----------- 
 
Net assets held for sale                                 232           16 
-------------------------------------------------  ---------  ----------- 
 
 
   4.   Segment information 

The Group reports three main operating segments: Data & Analytics, Capital Markets and Post Trade.

The results are presented on a continuing basis and exclude the results of the BETA business for the periods ended 30 June 2022 and 30 June 2021 and the Borsa Italiana group for the period ended 30 June 2021 (refer to note 3).

Some revenue items have been reallocated between business lines to better reflect our current operating model. The comparative results have been re-presented to reflect this. At a divisional level, the impact on the H1 2021 results previously reported is:

 
 --   GBP3 million of revenue from Capital Markets to Data & Analytics 
 --   GBP4 million of revenue from Post Trade to Data & Analytics 
 
 
Segment reporting for the six months ended 30 June 2022 is as follows: 
 
                                                       Data   Capital    Post 
Continuing operations                           & Analytics   Markets   Trade  Other    Group 
Unaudited                               Notes          GBPm      GBPm    GBPm   GBPm     GBPm 
--------------------------------------  -----  ------------  --------  ------  -----  ------- 
Revenue from external customers             5         2,520       720     362      -    3,602 
Net treasury income from CCP 
 clearing business                          5             -         -     121      -      121 
Other income                                5             -         -       -     12       12 
Total income                                          2,520       720     483     12    3,735 
 
Cost of sales                                         (420)      (16)    (68)      -    (504) 
Gross profit                                          2,100       704     415     12    3,231 
 
Adjusted operating expenses 
 before depreciation, amortisation, 
 and impairment                                       (963)     (314)   (155)    (1)  (1,433) 
Share of profit after tax of 
 associates                                               -         -       -      1        1 
Adjusted earnings before interest, 
 tax, depreciation, amortisation 
 and impairment                                       1,137       390     260     12    1,799 
 
Underlying depreciation, amortisation 
 and impairment                                       (291)      (48)    (52)      -    (391) 
Adjusted operating profit                               846       342     208     12    1,408 
 
Non-underlying depreciation, 
 amortisation and impairment                7                                           (507) 
Other non-underlying items 
 excluding net finance expense              7                                             (4) 
Operating profit                                                                          897 
 
Net finance expense (including 
 non-underlying items)                      8                                            (94) 
Profit before tax from continuing 
 operations                                                                               803 
 
Profit before tax from discontinued 
 operations                                 3                                              71 
Profit before tax                                                                         874 
 
 
Re-presented results by operating segment for the six months ended 
 30 June 2021 are as follows: 
 
                                               Data   Capital    Post 
Continuing operations                   & Analytics   Markets   Trade  Other    Group 
Unaudited                                      GBPm      GBPm    GBPm   GBPm     GBPm 
 
Revenue from external customers       5       2,020       539     338      -    2,897 
Net treasury income from 
 CCP clearing business                5           -         -     108      -      108 
Other income                          5           -         -       -     13       13 
Total income                                  2,020       539     446     13    3,018 
 
Cost of sales                                 (322)      (11)    (59)      -    (392) 
Gross profit                                  1,698       528     387     13    2,626 
Adjusted operating expenses 
 before depreciation, amortisation, 
 and impairment                               (820)     (250)   (147)    (2)  (1,219) 
Income from investments                                                   11       11 
Share of loss after tax 
 of associates                                    -         -       -    (2)      (2) 
 
Adjusted earnings before 
 interest, tax, depreciation, 
 amortisation and impairment                    878       278     240     20    1,416 
 
Underlying depreciation, 
 amortisation and impairment                  (221)      (30)    (46)      -    (297) 
Adjusted operating profit                       657       248     194     20    1,119 
Non-underlying depreciation, 
 amortisation and impairment          7                                         (387) 
Other non-underlying items 
 excluding net finance expense        7                                         (182) 
Operating profit                                                                  550 
 
Net finance expense (including 
 non-underlying items)                8                                          (87) 
Profit before tax from 
 continuing operations                                                            463 
 
Profit before tax from 
 discontinued operations                                                        2,656 
Profit before tax                                                               3,119 
 
 
 
5. Total income 
 
The Group's revenue from contracts with customers disaggregated by 
 segment, major product and service line, and timing of revenue recognition 
 for the six months ended 30 June 2022 is as follows: 
 
                                          Data &    Capital 
Continuing operations                  Analytics    Markets   Post Trade  Other  Group 
Unaudited                                   GBPm       GBPm         GBPm   GBPm   GBPm 
Revenue from external customers 
Major product and service 
 lines 
Trading & banking solutions                  770          -            -      -    770 
Enterprise data solutions                    620          -            -      -    620 
Investment solutions                         637          -            -      -    637 
Wealth solutions                             131          -            -      -    131 
Customer & third-party risk 
 solutions                                   196          -            -      -    196 
Recoveries                                   166          -            -      -    166 
Equities                                       -        129            -      -    129 
FX                                             -        124            -      -    124 
Fixed income, derivatives 
 and other                                     -        467            -      -    467 
OTC derivatives                                -          -          191      -    191 
Securities & reporting                         -          -          122      -    122 
Non cash collateral                            -          -           49      -     49 
Total revenue                              2,520        720          362      -  3,602 
Net treasury income                            -          -          121      -    121 
Other income                                   -          -            -     12     12 
Total income                               2,520        720          483     12  3,735 
 
Timing of revenue recognition 
Services satisfied at a point 
 in time                                      75        504          356      -    935 
Services satisfied over time               2,445        216            6      -  2,667 
Total revenue                              2,520        720          362      -  3,602 
 
 
 
  The Group's re-presented revenue from contracts with customers disaggregated 
  by segment, major product and service line, and timing of revenue recognition 
  for the six months ended 30 June 2021 is as follows: 
 
 
                                            Data &    Capital 
Continuing operations                    Analytics    Markets     Post Trade  Other  Group 
Unaudited                                     GBPm       GBPm           GBPm   GBPm   GBPm 
Revenue from external customers 
Major product and service 
 lines 
Trading & banking solutions                    621          -              -      -    621 
Enterprise data solutions                      477          -              -      -    477 
Investment solutions                           525          -              -      -    525 
Wealth solutions                               102          -              -      -    102 
Customer & third-party risk 
 solutions                                     147          -              -      -    147 
Recoveries                                     148          -              -      -    148 
Equities                                         -        120              -      -    120 
FX                                               -         91              -      -     91 
Fixed income, derivatives 
 and other                                       -        328              -      -    328 
OTC derivatives                                  -          -            169      -    169 
Securities & reporting                           -          -            123      -    123 
Non cash collateral                              -          -             46      -     46 
Total revenue                                2,020        539            338      -  2,897 
Net treasury income                              -          -            108      -    108 
Other income                                     -          -              -     13     13 
Total income                                 2,020        539            446     13  3,018 
 
Timing of revenue recognition 
Services satisfied at a point 
 in time                                        66        366            331      -    763 
Services satisfied over time                 1,954        173              7      -  2,134 
Total revenue                                2,020        539            338      -  2,897 
 
 
Geographical disclosures 
The Group's revenue from continuing operations disaggregated by geographical 
 location of services provided is as follows: 
 
Six months ended 
 30 June                                            2022                         2021 
                                               Unaudited                    Unaudited 
                                                                       (Re-presented) 
                                                    GBPm                         GBPm 
                                       -----------------  --------------------------- 
UK                                                 1,131                          953 
USA                                                1,270                          965 
Europe                                               563                          526 
Asia                                                 465                          317 
Other                                                173                          136 
Total revenue                                      3,602                        2,897 
 
 
 
6. Operating expenses before depreciation, amortisation and impairment 
 
Operating expenses before depreciation, amortisation and impairment 
 comprise the following: 
 
Six months ended 30 June                                    2022            2021 
                                                       Unaudited       Unaudited 
                                                                  (Re-presented) 
Continuing operations                            Note       GBPm            GBPm 
Employee costs                                               905             770 
IT costs                                                     258             189 
Professional fees                                            191             133 
Short-term lease costs                                         6              24 
Foreign exchange gains                                      (19)             (5) 
Other costs                                                   92             108 
                                                       --------- 
Underlying operating expenses before 
 depreciation, amortisation and impairment                 1,433           1,219 
 
Non-underlying operating expenses before 
 depreciation, amortisation and impairment          7        160             182 
Total operating expenses before depreciation, 
 amortisation and impairment                               1,593           1,401 
 
   7.   Non-underlying items 

The Group separately identifies results before non-underlying items (adjusted). This provides the reader with supplemental data relevant to an understanding of the Group's financial performance, as non-underlying items of income and expense are material by their size and/or nature.

The Group uses its judgement to classify items as non-underlying. They include:

 
 --   Incremental depreciation, amortisation and impairment of any 
       fair value adjustments of tangible or intangible assets recognised 
       as a result of acquisitions 
 --   Amortisation and impairment of goodwill and purchased intangible 
       assets. Purchased intangible assets include customer relationships, 
       trade names, and databases and content, all of which are as 
       a result of acquisitions 
 --   Other income or expenses not considered to drive the operating 
       results of the Group (including transaction, integration and 
       restructuring costs) 
 --   Significant gains or losses on disposals 
 --   Tax on non-underlying items 
 
 
Six months ended 30 June                                       2022             2021 
                                                                           Unaudited 
                                                          Unaudited   (Re-presented) 
Continuing operations                              Notes       GBPm             GBPm 
                                                          ---------  --------------- 
Non-underlying expenses before interest, 
 tax, depreciation, amortisation and impairment 
Transaction costs                                                24               69 
Integration costs                                               122              112 
Restructuring and other costs                                    14                1 
Non-underlying operating expenses before 
 depreciation, amortisation and impairment                      160              182 
Profit on disposal of property, plant and 
 equipment                                                    (133)                - 
Remeasurement gain                                             (23)                - 
Total non-underlying expenses before interest, 
 tax, depreciation, amortisation and impairment                   4              182 
 
Non-underlying depreciation, amortisation 
 and impairment 
Depreciation and impairment of property, plant 
 and equipment                                                   24                7 
Amortisation of intangible assets                     12        483              380 
Total non-underlying depreciation, amortisation 
 and impairment                                                 507              387 
 
Non-underlying items before interest and 
 tax                                                            511              569 
                                                   ----- 
 
Non-underlying net finance expense                     8         13                1 
Non-underlying items before tax                                 524              570 
 
Non-underlying tax                                            (103)               39 
Non-underlying items                                            421              609 
 

Transaction costs mainly relate to the following acquisitions:

 
 --   GDC (note 2.1) 
 --   MayStreet (note 2.2) 
 --   Refinitiv - mainly fair value adjustments to the outstanding 
       Tradeweb equity-settled awards of GBP7 million (H1 2021: GBP17 
       million) 
 

Integration costs relate to activities to integrate acquired businesses with the Group and mainly consist of Refinitiv integration costs of GBP108 million (H1 2021: GBP93 million)

On 5 January 2022, the Group completed the sale of one of its freehold properties in the UK for a cash sum of GBP153 million realising a gain on disposal of GBP133 million.

Prior to the acquisition of GDC on 31 May 2022, LSEG held an 11% equity interest in GDC. The acquisition date fair value of the previously held interest resulted in a remeasurement gain of GBP23 million.

We have continued to review our property needs following the acquisition of Refinitiv. The decision to exit and sub-let some of our property has resulted in a GBP24 million impairment to right-of-use property assets and some fixtures and fittings.

Amortisation of intangibles of GBP483 million mainly relates to the amortisation of intangible assets recognised as a result of the acquisition of Refinitiv.

We have also recognised a GBP103 million non-underlying tax benefit which mainly reflects the tax impact of the Group's non-underlying items computed based on the tax rates applicable to the respective territories.

 
8. Net finance expense 
 
Six months ended 30 June                                       2022            2021 
                                                          Unaudited       Unaudited 
                                                                     (Re-presented) 
Continuing operations                               Note       GBPm            GBPm 
Finance income 
Interest income on retirement benefit 
 assets                                                          36              16 
Bank deposit and other interest income                            4               2 
Other finance income                                              -               1 
Underlying finance income                                        40              19 
 
Finance expense 
Interest payable on bank and other borrowings(1)               (70)            (83) 
Interest cost on retirement benefit obligations                (31)            (14) 
Lease interest expense                                          (7)             (6) 
Other finance expenses                                         (13)             (2) 
Underlying finance expense                                    (121)           (105) 
 
Non-underlying net finance expense                     7       (13)             (1) 
Net finance expense                                            (94)            (87) 
(1) Interest payable includes amounts where the Group incurs negative 
 interest on its cash deposits. 
 
 
9. Taxation 
 
Six months ended 30 June                                     2022            2021 
                                                        Unaudited       Unaudited 
                                                                   (Re-presented) 
Continuing operations                                        GBPm            GBPm 
Tax recognised in the income statement 
Current tax 
UK corporation tax for the period                              20              13 
Overseas tax for the period                                    91              48 
Adjustments in respect of previous years                       22               2 
Total current tax                                             133              63 
 
Deferred tax 
Deferred tax for the period                                    44             205 
Adjustments in respect of previous years                      (8)               1 
Deferred tax benefit on amortisation and impairment 
 of purchased intangible assets                              (10)            (15) 
Total deferred tax                                             26             191 
 
Total tax                                                     159             254 
 
 
 
Six months ended 30 June                                           2022            2021 
                                                              Unaudited       Unaudited 
                                                                         (Re-presented) 
Continuing operations                                              GBPm            GBPm 
Tax on items recognised in other comprehensive 
 income 
Deferred tax (benefit)/expense 
Actuarial losses/gains on retirement benefit 
 obligations                                                       (35)              19 
Net gains/losses of financial assets (at FVOCI)                       2             (1) 
Total tax recognised in other comprehensive 
 income                                                            (33)              18 
 
Tax recognised directly in equity 
Current tax benefit 
Share-based payments in excess of expense recognised                (6)             (6) 
Share-based payments in excess of expense recognised 
 (in non-controlling interests)                                     (7)               - 
Deferred tax expense 
Share-based payments in excess of expense recognised                  -               2 
Share-based payments in excess of expense recognised 
 (in non-controlling interests)                                      91               - 
Investment in partnerships (recognised in non-controlling 
 interests)                                                        (35)               - 
Total tax recognised in equity                                       43             (4) 
 
Total tax recognised in other comprehensive 
 income and equity                                                   10              14 
 
Factors affecting the tax charge for the period 
The income statement tax charge for the period differs from the standard 
 rate of corporation tax in the UK of 19% (30 June 2021: 19%) as explained 
 below: 
 
Six months ended 30 June                                           2022            2021 
                                                              Unaudited       Unaudited 
                                                                         (Re-presented) 
Continuing operations                                              GBPm            GBPm 
Profit before tax from continuing operations                        803             463 
 
Profit multiplied by standard rate of corporation 
 tax in the UK                                                      152              88 
 
Overseas earnings taxed at higher rate                                9               4 
Adjustment arising from changes in tax rates                       (12)             159 
Income not taxable                                                  (2)               - 
Adjustments in respect of previous years                             14               3 
Other                                                               (2)               - 
Taxation charge from continuing operations                          159             254 
 
 

Uncertain tax positions

EU State Aid

The Group continues to monitor developments in relation to EU State Aid investigations. On 25 April 2019, the EU Commission's final decision regarding its investigation into the UK's Controlled Foreign Company (CFC) regime was published. It concluded that the Finance Company Partial Exemption (FCPE) rules in the UK tax legislation partially represent illegal State Aid. The Group had financing arrangements that utilised the FCPE during this period.

In December 2019 and the beginning of 2021, HMRC issued determinations to the Group totalling GBP10.5 million, excluding interest and penalties, which the Group paid.

The Group, several other UK PLCs and the UK Government submitted appeals to the EU General Court to annul the EU Commission's findings. On 8 June 2022, the EU General Court rejected the appeals. Affected parties have until 18 August 2022 to appeal this decision to the European Court of Justice (ECJ). If the decision is appealed, it will be some time before the issues are conclusively determined by the ECJ. Until then, the UK Government is required to continue recovering amounts determined to be State Aid.

Currently, the Group's view is that an appeal is likely and no provision is required. Additionally, and in accordance with IFRIC 23, the Group continues to recognise a receivable against the HMRC determinations paid to date of GBP10.5 million. The maximum potential exposure excluding interest remains between nil and GBP65 million.

IRS Audit

The Group continues to be under audit in the US by the Internal Revenue Service (IRS) in relation to the interest rate applied on certain cross border intercompany loans from the UK to the US. In 2020, the IRS issued a Notice of Proposed Adjustment. The maximum tax exposure is approximately US$145 million; however, this is the upper bound of a range of nil to US$145 million (plus interest and penalties) over the lifetime of the loans. The Group has an uncertain tax liability of GBP12 million ($16 million) recorded on the balance sheet related to this issue. The liability was measured based on a probability weighted average of potential outcomes. The issue is currently under appeal, and we expect to agree on a satisfactory settlement in H2 2022.

HMRC audit of intellectual property valuation

HMRC is auditing the value of certain intellectual property purchased from Thomson Reuters as part of the formation of Refinitiv. Intellectual property valuation is complex and significantly affected by multiple inputs of assumptions. As the outcome is uncertain, especially given the inherent subjectivity of the topic, the Group has recorded an uncertain tax liability in accordance with the requirements of IFRS. Management and HMRC continue to actively discuss this topic.

Diverted Profits Tax to Thomson Reuters

HMRC continues to issue notices of assessment under the Diverted Profits Tax (DPT) regime to Thomson Reuters largely related to its Financial and Risk Business for years prior to the sale of the business to Refinitiv. As required by the notices and as directed by Thomson Reuters, the Group makes payments to HMRC which are immediately reimbursed by Thomson Reuters in accordance with an indemnity agreement. Thomson Reuters does not agree with the assessments and will continue to defend their position by contesting the assessments through all available administrative and judicial remedies.

Russian tax audit

The Group is under audit by the Russian Tax Authorities for the period 2018-2020, which could result in additional taxes being paid locally. We do not agree with the Tax Authorities' view and will continue to defend our position through all available administrative and judicial remedies. We have recorded an uncertain tax liability in accordance with the requirements of IFRS.

 
10. Earnings per 
 share 
 
Earnings per share is presented on four bases: basic earnings per share, 
 diluted earnings per share, adjusted basic earnings per share and adjusted 
 diluted earnings per share and is calculated on actual values (before 
 any rounding effects). Basic earnings per share is in respect of all 
 activities. Diluted earnings per share takes into account the dilutive 
 effect that would arise on conversion or vesting of all outstanding 
 share options and share awards under the Group's share option and award 
 schemes. Adjusted basic earnings per share and adjusted diluted earnings 
 per share exclude non-underlying items. 
 
Six months ended 
 30 June                                                2022                                 2021 
                                                      Unaudited                    Unaudited (Re-presented) 
                                         Continuing  Discontinued      Total  Continuing  Discontinued      Total 
Basic earnings per 
 share                                        98.0p          9.6p     107.6p       27.2p        508.1p     535.3p 
Diluted earnings 
 per share                                    97.3p          9.5p     106.8p       27.2p        505.0p     532.2p 
Adjusted basic earnings 
 per share                                   167.4p         10.0p     177.4p      139.0p         22.5p     161.5p 
Adjusted diluted earnings 
 per share                                   166.1p          9.9p     176.0p      138.1p         22.4p     160.5p 
 
Profit and adjusted profit for the period attributable to the Company's 
 equity holders 
 
Six months ended 
 30 June                                                2022                                 2021 
                                                      Unaudited                    Unaudited (Re-presented) 
                                         Continuing  Discontinued      Total  Continuing  Discontinued      Total 
                                   Note        GBPm          GBPm       GBPm        GBPm          GBPm       GBPm 
                                   ---- 
Profit for the financial 
 period attributable 
 to the Company's equity 
 holders                                        548            53        601         143         2,635      2,778 
Adjustments: 
Non-underlying items 
 net of tax                           7         421             2        423         609       (2,517)    (1,908) 
Non-underlying items 
 attributable to non-controlling 
 interests                                     (35)             -       (35)        (31)           (1)       (32) 
Adjusted profit for 
 the financial period 
 attributable to the 
 Company's equity holders                       934            55        989         721           117        838 
 
Weighted average number of shares 
 
Six months ended 
 30 June                                                                2022                                 2021 
                                                                   Unaudited                            Unaudited 
                                                                    millions                             millions 
Weighted average 
 number of shares(1)                                                     558                                  519 
Dilutive effect of 
 share options and 
 awards                                                                    4                                    3 
Diluted weighted 
 average number of 
 shares                                                                  562                                  522 
(1) The weighted average number of shares excludes those held in the 
 Employee Benefit Trust. 
 
 
 
11. Dividends 
 
Six months ended 30 June                                2022       2021 
                                                   Unaudited  Unaudited 
                                                        GBPm       GBPm 
Final dividend for 31 December 2020 paid 26 May 
 2021: 51.7p per Ordinary share                            -        287 
Final dividend for 31 December 2021 paid 25 May 
 2022: 70.0p per Ordinary share                          390          - 
                                                         390        287 
 

Dividends are only paid out of available distributable reserves of the Company.

The Board has proposed an interim dividend in respect of the six months ended 30 June 2022 of 31.7p per share, which amounts to an expected payment of GBP177 million, to be paid in September 2022. This is not reflected in these interim condensed consolidated financial statements.

 
12. Intangible 
 assets 
 
                                                      Purchased intangible assets 
                                                                                       Software   Software, 
                                              Customer                                 licences    contract 
                                          and supplier              Database   and intellectual       costs 
                              Goodwill   relationships  Brands   and content           property   and other   Total 
                                  GBPm            GBPm    GBPm          GBPm               GBPm        GBPm    GBPm 
Cost 
1 January 2022                  17,953           8,721   1,956         2,434                702       3,232  34,998 
Acquisition of subsidiaries 
 (note 2)                          261              95       -             -                 67           -     423 
Additions(1)                         -               -       -             -                  -         369     369 
Disposals and write-offs             -               -       -             -                  -        (21)    (21) 
Transfer to assets 
 held for sale                       -               -    (48)             -                  -       (162)   (210) 
Foreign exchange 
 translation                     1,545             942     190           276                 43         219   3,215 
30 June 2022 (Unaudited)        19,759           9,758   2,098         2,710                812       3,637  38,774 
 
Accumulated amortisation 
 and impairment 
1 January 2022                     467             956     398           224                315         914   3,274 
Amortisation charge 
 for the period (2)                  -             279      72           112                 17         273     753 
Disposals and write-offs             -               -       -             -                  -        (21)    (21) 
Transfer to assets 
 held for sale                       -               -     (4)             -                  -        (29)    (33) 
Foreign exchange 
 translation                        12              99      38            33                  8          44     234 
30 June 2022 (Unaudited)           479           1,334     504           369                340       1,181   4,207 
 
Net book values 
30 June 2022 (Unaudited)        19,280           8,424   1,594         2,341                472       2,456  34,567 
31 December 2021                17,486           7,765   1,558         2,210                387       2,318  31,724 
 

(1) Includes additions for continuing and discontinued operations. Consideration for additions for continuing operations includes GBP363 million in cash

(2) Includes amortisation of intangible assets from continuing and discontinued operations. Amortisation from continuing operations of GBP744 million includes non-underlying amortisation of GBP483 million

Goodwill and purchased intangible assets: Impairment testing

The Group performs its annual impairment testing for goodwill and purchased intangible assets in December and when circumstances indicate that the carrying values may be impaired. The Group's impairment testing is based on value-in-use calculations. The key assumptions used to determine the value-in-use for the different cash generating units were disclosed in the annual consolidated financial statements for the year ended 31 December 2021.

There were no circumstances indicating that the goodwill and purchased intangible assets may be impaired during the current reporting period.

 
13. Investments in financial assets 
 
Equity instruments 
The Group holds equity investments in a number of companies, the largest 
 of which is its stake in Euroclear. Movements in the period in the 
 fair value of the investments in equity instruments (which are almost 
 entirely classified as Level 3) are as follows: 
 
                                                                         2022 
                                                                         GBPm 
                                                                        ----- 
1 January 2022                                                            351 
Revaluation gains recognised in other comprehensive 
 income                                                                    21 
Foreign exchange translation                                               13 
30 June 2022 (Unaudited)                                                  385 
 

Fair value of equity instruments

In the absence of any relevant third-party data on the fair value of its investments, the Group undertakes its own internal valuations, as detailed in the annual consolidated financial statements for the year ended 31 December 2021. The Group regularly reviews the financial information of its investments which is available publicly or received as a shareholder.

   14.   Financial assets and financial liabilities 

The Group has a range of financial assets and financial liabilities, the largest of which are clearing member trading assets and liabilities. The Group classifies its financial instruments as fair value though profit or loss (FVPL), fair value through other comprehensive income (FVOCI) or amortised cost. Management has assessed that the fair values of financial assets and financial liabilities categorised as being at amortised cost approximate to their carrying values, with the exception of Group borrowings. The fair values of the Group's borrowings are disclosed in note 15.

The Group's financial assets and financial liabilities held at fair value consist largely of securities which are restricted in use for the operations of the Group's Central Counterparties (CCPs) as managers of their respective clearing and guarantee systems.

The Group adopts a forward-looking approach to estimating impairment losses on financial assets. An expected credit loss (ECL) arises if the expected cash flows are lower than the contractual cash flows due. As at 30 June 2022, there are no provisions for expected credit losses in relation to any of the CCP businesses' financial assets held at amortised cost or FVOCI (31 December 2021: nil). The Group closely monitors its CCP investment portfolio and invests only in government debt and other collateralised instruments where the risk of loss is minimal. There was no increase in credit risk in the period and none of the assets are past due (31 December 2021: nil).

 
Financial instruments by category 
The financial instruments are categorised as follows: 
 
Financial assets 
 
                                             Amortised 
30 June 2022                                      cost   FVOCI      FVPL     Total 
Unaudited                                         GBPm    GBPm      GBPm      GBPm 
                                           -----------  ------  --------  -------- 
Clearing business financial assets 
Clearing member trading assets                   4,977       -   707,456   712,433 
Other receivables from clearing 
 members                                         6,129       -         -     6,129 
Other financial assets                               -  15,545         -    15,545 
Clearing member cash and cash 
 equivalents(1)                                110,795       -         -   110,795 
                                           -----------  ------  --------  -------- 
                                               121,901  15,545   707,456   844,902 
 
Trade and other receivables(2)                   1,336       -        18     1,354 
Cash and cash equivalents                        2,520       -         -     2,520 
Investments in financial assets 
 - equity instruments                                -     385         -       385 
Derivative financial instruments                     -       -        75        75 
 
Total financial assets                         125,757  15,930   707,549   849,236 
                                           -----------  ------  --------  -------- 
 
(1) Clearing member cash and cash equivalents represents amounts received 
 from the clearing members to cover initial and variation margins, and 
 default fund contributions that are not invested in bonds. These amounts 
 are deposited with banks, including central banks, or invested securely 
 in short-term reverse repurchase contracts (reverse repos). 
(2) Prepayments and contract assets within trade and other receivables 
 are not classified as financial instruments. 
 
 
Financial assets measured at 
 fair value 
The following table provides the fair value measurement hierarchy of 
 the Group's financial assets measured at fair value: 
 
                                         Quoted 
                                         prices  Significant    Significant 
                                      in active   observable   unobservable 
                                        markets       inputs         inputs 
                                         (Level       (Level         (Level        Total 
30 June 2022                                 1)           2)             3)   fair value 
Unaudited                                  GBPm         GBPm           GBPm         GBPm 
                                     ----------  -----------  -------------  ----------- 
Clearing business financial assets 
Derivative instruments                      232       17,785              -       18,017 
Non-derivative instruments                    -      689,439              -      689,439 
Other financial assets                   15,545            -              -       15,545 
                                         15,777      707,224              -      723,001 
Investments in financial assets 
 - equity instruments                         1            -            384          385 
Derivatives not designated as 
 hedges 
Foreign exchange forward contracts            -           75              -           75 
Trade and other receivables - 
 convertible loan notes                       -            -             18           18 
 
Total financial assets at fair 
 value                                   15,778      707,299            402      723,479 
                                     ----------  -----------  -------------  ----------- 
 
There were no transfers between levels during the period. 
 
 
Financial liabilities 
 
                                                Amortised 
30 June 2022                                         cost     FVPL    Total 
Unaudited                                            GBPm     GBPm     GBPm 
Clearing business financial liabilities 
Clearing member trading liabilities                 4,977  707,456  712,433 
Other payables to clearing members                132,218        -  132,218 
                                                  137,195  707,456  844,651 
Trade and other payables(1)                         2,311        -    2,311 
Borrowings                                          8,318        -    8,318 
Derivative financial instruments                        -      112      112 
 
Total financial liabilities                       147,824  707,568  855,392 
(1) Social security and other taxes within trade and other payables 
 are not classified as financial instruments. 
 
 
Financial liabilities measured at fair value 
The following table provides the fair value measurement hierarchy of 
 the Group's financial liabilities measured at fair value: 
 
                                              Quoted 
                                              prices  Significant    Significant 
                                           in active   observable   unobservable 
                                             markets       inputs         inputs 
                                              (Level       (Level         (Level        Total 
30 June 2022                                      1)           2)             3)   fair value 
Unaudited                                       GBPm         GBPm           GBPm         GBPm 
                                          ----------  -----------  -------------  ----------- 
Clearing business financial liabilities 
Derivative instruments                           232       17,785              -       18,017 
Non-derivative instruments                         -      689,439              -      689,439 
                                                 232      707,224              -      707,456 
 
Derivatives not designated as 
 hedges 
Foreign exchange forward contracts                 -           22              -           22 
 
Derivatives designated as hedges 
Cross-currency interest rate swaps                 -           90              -           90 
 
Total financial liabilities at 
 fair value                                      232      707,336              -      707,568 
                                          ----------  -----------  -------------  ----------- 
 
There were no transfers between levels during the period. 
 
 
The financial instruments of the Group at 31 December 2021 were categorised 
 as follows: 
 
Financial assets 
 
                                              Amortised 
31 December 2021                                   cost    FVOCI      FVPL     Total 
                                                   GBPm     GBPm      GBPm      GBPm 
                                            -----------  -------  --------  -------- 
Clearing business financial assets 
Clearing member trading assets                    1,476        -   645,587   647,063 
Other receivables from clearing 
 members                                          4,184        -         -     4,184 
Other financial assets                                -   13,784         -    13,784 
Clearing member cash and cash 
 equivalents                                     83,795        -         -    83,795 
                                                 89,455   13,784   645,587   748,826 
 
Trade and other receivables                       1,020        -         6     1,026 
Cash and cash equivalents                         2,665        -         -     2,665 
Investments in financial assets 
 - equity instruments                                 -      351         -       351 
Derivative financial instruments                      -        -        27        27 
 
Total financial assets                           93,140   14,135   645,620   752,895 
 
 
Financial assets measured at 
 fair value 
The following table provides the fair value measurement hierarchy of 
 the Group's financial assets at 31 December 2021: 
 
                                         Quoted 
                                         prices  Significant    Significant 
                                      in active   observable   unobservable 
                                        markets       inputs         inputs 
                                         (Level       (Level         (Level        Total 
31 December 2021                             1)           2)             3)   fair value 
                                           GBPm         GBPm           GBPm         GBPm 
                                     ----------  -----------  -------------  ----------- 
Clearing business financial assets 
Derivative instruments                       47        2,631              -        2,678 
Non-derivative instruments                    -      642,909              -      642,909 
Other financial assets                   13,784            -              -       13,784 
                                         13,831      645,540              -      659,371 
Investments in financial assets 
 - equity instruments                         1            -            350          351 
 
Derivatives not designated as 
 hedges 
Foreign exchange forward contracts            -           27              -           27 
Trade and other receivables - 
 convertible loan notes                       -            -              6            6 
Total financial assets at fair 
 value                                   13,832      645,567            356      659,755 
 
There were no transfers between levels during the year to 31 December 
 2021. 
 
 
Financial liabilities 
 
                                           Amortised 
31 December 2021                                cost     FVPL    Total 
                                                GBPm     GBPm     GBPm 
                                           ---------  -------  ------- 
Clearing business financial liabilities 
Clearing member trading liabilities            1,476  645,587  647,063 
Other payables to clearing members           101,581        -  101,581 
                                             103,057  645,587  748,644 
 
Trade and other payables                       2,727        -    2,727 
Borrowings                                     7,654        -    7,654 
Derivative financial instruments                   -       52       52 
 
Total financial liabilities                  113,438  645,639  759,077 
 
 
Financial liabilities measured 
 at fair value 
The following table provides the fair value measurement hierarchy of 
 the Group's financial liabilities measured at fair value at 31 December 
 2021: 
 
                                              Quoted 
                                              prices  Significant    Significant 
                                           in active   observable   unobservable 
                                             markets       inputs         inputs 
                                              (Level       (Level         (Level        Total 
31 December 2021                                  1)           2)             3)   fair value 
                                                GBPm         GBPm           GBPm         GBPm 
                                          ----------  -----------  -------------  ----------- 
Clearing business financial liabilities 
Derivative instruments                            47        2,631              -        2,678 
Non-derivative instruments                         -      642,909              -      642,909 
                                                  47      645,540              -      645,587 
 
Derivatives not designated as 
 hedges 
Foreign exchange forward contracts                 -            8              -            8 
 
Derivatives designated as hedges 
Cross-currency interest rate swaps                 -           44              -           44 
 
Total financial liabilities at 
 fair value                                       47      645,592              -      645,639 
                                          ----------  -----------  -------------  ----------- 
 
There were no transfers between levels during the year to 31 December 
 2021. 
 

Derivatives and hedging

As at 30 June 2022, the Group had derivative financial assets of GBP75 million (31 December 2021: GBP27 million) and derivative financial liabilities of GBP112 million (31 December 2021: GBP52 million). The components of this are set out below.

The Group uses foreign exchange contracts to manage its foreign exchange risk. The fair value of these derivatives as at 30 June 2022 was an asset of GBP14 million (31 December 2021: GBP14 million) and a liability of GBP22 million (31 December 2021: GBP5 million).

The Group has embedded foreign currency derivatives primarily in revenue contracts where the currency of the contract is different from the functional or local currencies of the parties involved. The fair value of embedded derivatives as at 30 June 2022 was an asset of GBP61 million (31 December 2021: GBP13 million) and a liability of nil (31 December 2021: GBP3 million).

Hedge accounting has not been applied to foreign currency forwards or embedded derivatives.

In September 2017, the Group entered into cross-currency interest rate swaps to swap EUR700 million of bonds into US$836 million. The fair value of these swaps as at 30 June 2022 was a liability of GBP90 million (31 December 2021: GBP44 million). The cross-currency interest rate swaps have been designated as a hedging instrument and a loss of GBP47 million has been recognised in other comprehensive income for the period ended 30 June 2022 (H1 2021: GBP13 million).

In February 2021, the Group entered into a series of US dollar interest rate swaps, which were designated as cash flow hedges. The interest rate swaps were settled in March and April 2021 and a gain of US$31 million (GBP22 million) was recognised in the hedging reserve. During the period GBP1 million was recycled to the income statement (H1 2021: nil).

Non derivative hedges

EUR800 million of the Group's bonds and the EUR700 million of bonds swapped into US dollars via cross-currency interest rate swaps have been designated as a net investment hedge. For the period to 30 June 2022, a loss of GBP38 million (H1 2021: GBP85 million gain) was recognised in other comprehensive income.

 
15. Borrowings and net debt 
Borrowings 
                                                            30 June  31 December 
                                                               2022         2021 
                                                          Unaudited 
                                                               GBPm         GBPm 
Current 
Bank borrowings - committed bank facilities(1)                   60            - 
Total current borrowings                                         60            - 
 
Non-current 
Bonds                                                         6,760        6,306 
Bank borrowings - committed bank facilities 
 and term loans                                               1,497        1,347 
Trade finance loans                                               1            1 
Total non-current borrowings                                  8,258        7,654 
 
Total borrowings                                              8,318        7,654 
(1) Balances are shown net of capitalised arrangement 
 fees of GBP6 million 
 
During the period, US$250 million, EUR42 million and GBP32 million 
 was drawn down on the multi-currency revolving credit facility; US$170 
 million, EUR42 million and GBP32 million was repaid, with US$80 million 
 (GBP66 million) outstanding as at 30 June 2022 (31 December 2021: nil). 
 
The movement in non-current bonds and bank borrowings during the period 
 relates to foreign exchange translation movements. 
 
The fair value of total borrowings as at 30 June 2022 was GBP7,911 
 million (31 December 2021: GBP7,765 million). 
 
 
 
Analysis of net debt 
Net debt comprises cash and cash equivalents less interest-bearing 
 loans and borrowings, lease liabilities, and derivative financial instruments. 
 
                                                             30 June       31 December 
                                                                2022              2021 
                                                           Unaudited 
                                                                GBPm              GBPm 
Current 
Cash and cash equivalents                                      2,520             2,665 
Bank borrowings                                                 (60)                 - 
Lease liabilities                                              (126)             (168) 
Derivative financial assets                                       65                25 
Derivative financial liabilities                                (22)               (7) 
Total due within one year                                      2,377             2,515 
 
Non-current 
Bonds                                                        (6,760)           (6,306) 
Bank borrowings                                              (1,497)           (1,347) 
Trade finance loans                                              (1)               (1) 
Lease liabilities                                              (559)             (547) 
Derivative financial assets                                       10                 2 
Derivative financial liabilities                                (90)              (45) 
Total due after one year                                     (8,897)           (8,244) 
 
Net debt                                                     (6,520)           (5,729) 
 
   16.   Commitments and contingencies 

The Group has no contracted capital commitments which are not provided for in the interim condensed consolidated financial statements. The Group has a long-term agreement with Reuters News, to receive news and editorial content in return for a minimum CPI adjusted payment, which amounted to around US$340 million for the 2021 financial year.

The Group has commitments of GBP12 million for professional fees relating to the divestment of BETA. The amount was payable on the successful completion of the divestment (30 June 2021: nil).

In the normal course of business, the Group can receive legal claims including, for example, in relation to commercial matters, service and product quality or liability, employee matters and tax audits. The Group is also involved in legal proceedings and actions, engagement with regulatory authorities and in dispute resolution processes. These are reviewed on a regular basis and, where possible, an estimate is made of the potential financial impact on the Group.

In appropriate cases a provision is recognised based on advice, best estimates and management judgement. Where it is too early to determine the likely outcome of these matters, no provision is made. Whilst the Group cannot predict the outcome of any such current or future matters with any certainty, it currently believes the likelihood of any material liabilities to be low, and that these will not have a material adverse effect on its consolidated income, financial position or cash flows.

   17.   Events after the reporting period 

On 1 July 2022, BETA was sold for a total cash consideration of US$1.1 billion (refer to note 3).

Principal Risks

The effective management of risk is critical to the execution of the Group's strategy. Accordingly, the Group maintains a robust Enterprise-wide Risk Management Framework (ERMF), which sets out the Group's approach to risk management and its appetite for taking risks. Our regulated entities, including clearing houses, manage their risks in-line with both local regulation and internal risk and investment policies.

As well as our principal risks, we continue to identify and monitor emerging risks which are either new to the Group or are difficult to quantify due to their remote or evolving nature. In most cases, the mitigation for such emerging risks is to establish appropriate contingency plans and monitor the development of the risk until it can be quantified and removed or included as a principal risk. The Group does not consider the landscape of principal risks and uncertainties set out on pages 50 to 59 of its Annual Report for the year ended 31 December 2021 to have changed materially.

Strategic Risks

Risks related to our strategy (including the implementation of strategic initiatives and external threats to the achievement of our strategy). The category also includes risks associated with reputation or brand values.

Global economic and Geo-political (Executive Lead: Chief Executive Officer)

As a financial markets infrastructure and data provider, we operate in a broad range of equity, fixed income, foreign exchange and derivative markets servicing customers who increasingly seek global products and innovative solutions. If the global economy underperforms, or there is reduced activity in our markets, it may lead to lower revenue. Throughout the COVID-19 pandemic, the global economy received unprecedented support from central banks and governments. Although longer term impacts to the global economy remain uncertain, rising inflation, during H1 2022, has led to central banks to be less accommodative and raise interest rates; this has impacted financial markets and is expected to slow economic growth during the remainder of 2022. More broadly, geopolitical relations continue to influence global financial markets, particularly the ongoing conflict between Russia and Ukraine which resulted in our decision to terminate services to Russian clients and close most of our operations in Russia. In addition, the Group continues to monitor Western relations with China. Whilst well diversified, these global risks could have an adverse impact on the Group's businesses, operations, financial condition and cash flows.

Reputation/Brand/IP (Executive Lead: Chief Executive Officer)

Several of the Group's businesses are iconic and trusted international brands. Their strong reputations are valuable for the Group and its business credibility with regulators and attractiveness to customers alike. Some events or actions could damage the reputation and brand of the Group, such as miscommunication on social media, misrepresentation, interruption of services or regulatory censure which could as a consequence adversely impact the Group's business, financial condition and operating results. The Group has a portfolio of intellectual property including brands, products and services which are proprietary and protected by patent, trademark and copyright. Some of the Group's products and processes may include subject matter not subject to intellectual property protection by the Group. And competitors of the Group may also independently develop and patent, or otherwise protect products or processes, that are the same or similar to our products and processes. In either scenario, failure to protect the Group's intellectual property rights appropriately could result in reputational damage and affect the Group's ability to compete. Additionally, any financial impact would be compounded by costs incurred to defend or enforce our intellectual property rights.

Transformation (Executive Lead: Chief Executive Officer, Chief Operating Officer)

The Group is materially exposed to risk of loss or failure resulting from transformation or integration as it continues to grow rapidly both organically and inorganically. Acquisitions may, in some cases, be complex or necessitate change to operating models, business models, technology and people. The Group's success has a high dependency on its ability to integrate all parts of its business, including acquisitions, realise synergies across the Group, and ensure that the Group is able to compete on a global scale. A failure to align the businesses of the Group successfully may lead to: an increased cost base without a commensurate increase in revenue; a failure to capture future product and market opportunities; and risks in respect of capital requirements, regulatory relationships and management time.

In particular, some of the key challenges associated with the integration of Refinitiv include coordinating and consolidating services, technology and operations spanning different countries, regulatory regimes and cultures. Furthermore, the divestment of the Borsa Italiana Group in April 2021 that includes exiting transitional services in 2022 and ongoing support to Borsa Italiana Group's trading platforms until 2023, carries additional risk related to the separation of two technology estates and associated operations. The Group has engaged in further M&A activity, both acquisitions and divestments, in 2022. Acquisitions require the Group to operate and integrate different technology platforms and systems. In addition, challenges for the Group include maintaining the operational resilience and security of legacy platforms, and consolidating services, or developing new services, where underlying assets used to provide those services are subject to contractual commitments with third parties.

The Group faces significant competition in each of its main business areas. The businesses have to respond to this at the same time as navigating through various transformation and integration activities. The markets for the Group's data, information, services and products are highly competitive and are subject to rapid technological changes and evolving customer demands and needs. Accordingly, the Group has a sizeable strategic change agenda to transform its products, services and platforms as it leverages growth synergies and upgrades and replaces legacy infrastructure.

Financial and Model Risks

The risk of financial failure, loss of earnings and/or capital as a result of investment activity, lack of liquidity, funding or capital, and/or the inappropriate use of models.

CCP Risk (Executive Lead: Group Head of Post Trade)

The Group's CCP activities expose it to a number of financial risks that arise from the CCP's obligation to guarantee the performance of cleared contracts between its members in the event a member defaults. In the event of a member default the CCP must restore a matched book by liquidating or transferring the defaulting member's positions held with the CCP. This can expose the CCP to both adverse changes in the market value of the positions (such as changes in asset prices, interest rates, credit spreads and foreign exchange) and liquidation costs (such as the cost of finding liquidity to exit the positions). In addition, the CCP has treasury investment risk arising from the investment of member cash and liquidity risk arising from its ongoing payment obligations. If the CCP does not have sufficient cash available, there is a risk of a liquidity shortfall (i.e. the CCP failing to meet its payments). Non-financial risks arise as a result of the CCP's day to day operations, such as operational risk, legal & compliance risk and reputational risk.

Model Risk (Executive Lead: Divisional Group Heads, Chief Risk Officer)

The Group's model risks could arise from errors during the development, implementation, use, or decisions based on outputs, of models. The Group utilises a suite of models, including Artificial Intelligence (AI), across all three of its business divisions (e.g. margin models used within our CCPs, market abuse detection models within the Capital Markets division, as well as Risk's capital and climate stress models). Model risks could impact both the reputation and the financial condition of the Group.

Operational Risks

The risk of loss, or other adverse consequences to the business, resulting from inadequate, or failures associated with, internal processes, people and systems, or from external events.

Technology (Executive Lead: Chief Information Officer)

LSEG is highly dependent on the development and operation of its sophisticated technology and advanced information systems and those of its third-party service and outsourcing providers. Technology failures potentially leading to system outages may impact our customers and the orderly running of our markets, data services and distribution. There has been some disruption primarily to Refinitiv client services this year caused by legacy issues identified in Refinitiv's technology estate , but overall, the number and severity of incidents continues to decline. The integration of Refinitiv's larger technology footprint and operations, increased reliance on third-party services, continued movement to cloud-based platforms and the shift to hybrid working practices all increase the technology risk for the Group.

Information and cyber security threats (Executive Lead: Chief Information Officer)

As a global Financial Markets Infrastructure (FMI) and data provider, LSEG is exposed to cyber risk. Significant cyber events continue to be observed in the financial sector and in the broader economy that demonstrate the motivation and sophistication of cyber adversaries and the impact they can have on the victim organisation. LSEG is the sum of its networks, users and devices. It consists of an eco-system of trusted vendors and business partners with a workforce that is increasingly dynamic in terms of how, when and where they are authorised to gain access to our technology environment and digital assets. In addition to the direct impact on ourselves, our role as an FMI provider underscores the systemic impact a cyber event would have on the UK financial sector and the global markets that we serve. Cyber risk does not respect and is not bound by organisational perimeters and high profile external cyber events reinforce this inter-connectivity and inter-dependency and highlight the exposure to risks arising outside of a firm's own control environment. We must acknowledge, to remain competitive in this era of digitalisation and open platforms, that cyber risk cannot be eliminated, however, it can be managed to a level of risk that we are prepared to take as a cost of doing business.

Business Continuity (Executive Lead: Chief Information Officer, Chief Risk Officer, Divisional Group Heads)

Business continuity is one of the key objectives of the Group's Operational Resilience strategy, helping to address the Group's ability to prevent, adapt, respond and recover from operational disruptions to minimise the impact on our customers and on the financial stability of capital markets. Whilst the Group has processes and controls in place to ensure the continuity of its services and operations, unforeseen events such as physical security and system security threats, epidemic or pandemic, or a major system breakdown, could impact the continuity of the Group's services, its reputation and its financial condition, causing financial detriment both internally and externally to the wider market. The Group's operations in Ukraine and Russia were impacted by the Russian invasion requiring us to comply with relevant sanctions, local legislative concerns and ensuring the wellbeing of impacted colleagues. This initially triggered a decision to suspend service for Russian clients followed by the exit of our Russian business (excluding Kortes). Ongoing political and economic disruption in Sri Lanka meant the Group put in place mitigations to ensure operations are not impacted.

Third-party risk (Executive Lead: Chief Operating Officer, Divisional Group Heads, Chief Information Officer)

Failure to manage the risks associated with the selection, management and oversight of critical third-party suppliers could impact the Group's ability to deliver its strategic objectives. Our suppliers are exposed to a range of risks, including Geo-Political, Cyber Security Threats and Regulatory Compliance, whereby events may result in suppliers being unable to meet their contractual, regulatory, confidentiality or other obligations to the Group. This could lead to material financial loss, higher costs, regulatory actions and reputational harm. The Group and its entities engage third-party service providers, and external service providers, including Cloud Service Providers (CSPs).

The Group has engaged CSPs to host critical services and data. The Group also relies on access to certain data used in its business through licences with third-parties. Some of this data is provided exclusively by suppliers and may not be obtained from other sources.

Data governance (Executive Lead: Divisional Group Heads, Chief Operating Officer)

LSEG plays a significant role in the financial markets infrastructure and data provider landscapes with commitments to its customers, counterparties, owners, vendors, regulators and the public in the proper usage of its data. LSEG collects, processes, licenses, calculates, owns, transforms, administers and distributes data in many formats (e.g. structured, unstructured, electronic and print formats, audio-visual data, production, testing, archive data, derived data and personal data).

Failure to govern the Group's data successfully could result in those data being unfit for purpose with respect to quality and usage. This could result in the Group or its customers and stakeholders utilising deficient data when making decisions, which could adversely affect the Group's reputation, financial condition and operating results. Data privacy breaches, misuse of personal data or failure to protect confidential information could adversely affect the Group's reputation, expose it to litigation or other legal or regulatory actions. Unauthorised data access or privacy breaches may cause some of the Group's customers to lose confidence in its security measures and could impact the Group's financial performance.

People and Talent (Executive Lead: Chief People Officer)

People and culture risks could arise from a lack of critical skills, talent and knowledge, resulting in the Group being unable to achieve its objectives. These risks can arise from ineffective career development, organisational structures and leadership, all of which could impact on the engagement and wellbeing of our people. Furthermore, increased market competition can result in inability to attract and retain diverse, high-performing talent, and/or it could lead to a disengaged workforce.

Regulatory Change and Compliance (Executive Lead: General Counsel, Chief Executive Officer, Divisional Group Heads)

LSEG is a global business operating within many regulatory environments. The Group is exposed to risks associated with changes to regulatory requirements, and how we manage that change. These include: risks arising from the conditions under which LSEG can access a particular market (e.g. EU equivalence for UK CCPs); the regulation and supervision of new activities; the overall reforms in the wholesale markets in the EU and the UK; and the greater focus on information and cyber security, data localisation, and ESG data and scoring providers. There is also a risk that one or more of the Group's entities may fail to comply with the laws and regulatory requirements to which it is subject. In this event, the entity may be subject to censures, fines and other regulatory or legal proceedings.

Directors

The Directors of London Stock Exchange Group plc at 30 June 2022 were as follows:

Don Robert

David Schwimmer

Anna Manz

Dominic Blakemore

Martin Brand

Erin Brown

Professor Kathleen DeRose

Tsega Gebreyes

Cressida Hogg CBE

Dr Val Rahmani

Douglas M. Steenland

Ashok Vaswani

Statement of directors' responsibilities

The directors confirm that, to the best of their knowledge, the interim condensed consolidated financial statements have been prepared in accordance with UK adopted IAS 34 and that the interim report herein includes a fair review of the information required by the Financial Conduct Authority's Disclosure and Transparency Rules 4.2.7 and 4.2.8, namely:

 
 --   an indication of important events that have occurred during 
       the first six months of the financial year and their impact 
       on the interim condensed consolidated financial statements, 
       and a description of the principal risks and uncertainties 
       for the remaining six months of the financial year; and 
 
 --   material related party transactions in the first six months 
       of the current financial year and any material changes in 
       the related party transactions described in the last annual 
       report. 
 

By order of the Board

David Schwimmer

Group CEO

Anna Manz

Group CFO

4 August 2022

Independent review report to London Stock Exchange Group plc

Conclusion

We have been engaged by London Stock Exchange Group plc (the "Company") and its subsidiaries (together the "Group") to review the condensed set of financial statements in the half-yearly financial report for the six months ended 30 June 2022 which comprises the Condensed Consolidated Income Statement, the Condensed Consolidated Statement of Comprehensive Income, the Condensed Consolidated Balance Sheet, the Condensed Consolidated Cash Flow Statement, the Condensed Consolidated Statement of Changes in Equity and related explanatory notes 1 to 17. We have read the other information contained in the half yearly financial report and considered whether it contains any apparent misstatements or material inconsistencies with the information in the condensed set of financial statements.

Based on our review, nothing has come to our attention that causes us to believe that the condensed set of financial statements in the half-yearly financial report for the six months ended 30 June 2022 is not prepared, in all material respects, in accordance with UK adopted International Accounting Standard 34 and the Disclosure Guidance and Transparency Rules of the United Kingdom's Financial Conduct Authority.

Basis for Conclusion

We conducted our review in accordance with International Standard on Review Engagements ('ISRE') 2410 (UK) "Review of Interim Financial Information Performed by the Independent Auditor of the Entity" issued by the Financial Reporting Council. A review of interim financial information consists of making enquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures. A review is substantially less in scope than an audit conducted in accordance with International Standards on Auditing (UK) and consequently does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion.

As disclosed in note 1, the annual financial statements of the Group are prepared in accordance with UK adopted international accounting standards. The condensed set of financial statements included in this half-yearly financial report has been prepared in accordance with UK adopted International Accounting Standard 34, "Interim Financial Reporting".

Conclusions Relating to Going Concern

Based on our review procedures, which are less extensive than those performed in an audit as described in the Basis of Conclusion section of this report, nothing has come to our attention to suggest that management have inappropriately adopted the going concern basis of accounting or that management have identified material uncertainties relating to going concern that are not appropriately disclosed.

This conclusion is based on the review procedures performed in accordance with this ISRE, however future events or conditions may cause the entity to cease to continue as a going concern.

Responsibilities of the directors

The directors are responsible for preparing the half-yearly financial report in accordance with the Disclosure Guidance and Transparency Rules of the United Kingdom's Financial Conduct Authority.

In preparing the half-yearly financial report, the directors are responsible for assessing the company's ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the directors either intend to liquidate the company or to cease operations, or have no realistic alternative but to do so.

Auditor's Responsibilities for the review of the financial information

In reviewing the half-yearly report, we are responsible for expressing to the Company a conclusion on the condensed set of financial statements in the half-yearly financial report. Our conclusion, including our Conclusions Relating to Going Concern, are based on procedures that are less extensive than audit procedures, as described in the Basis for Conclusion paragraph of this report.

Use of our report

This report is made solely to the company in accordance with guidance contained in International Standard on Review Engagements 2410 (UK) "Review of Interim Financial Information Performed by the Independent Auditor of the Entity" issued by the Financial Reporting Council. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the company, for our work, for this report, or for the conclusions we have formed.

Ernst & Young LLP

London

04 August 2022

FINANCIAL CALENDAR

 
Ex-dividend date for interim dividend     18 August 2022 
Interim dividend record date              19 August 2022 
Interim dividend payment date          20 September 2022 
Q3 Trading Statement (revenues only)     21 October 2022 
Financial year end                      31 December 2022 
Preliminary results                           March 2022 
Annual General Meeting                        April 2022 
 

The financial calendar is updated on a regular basis throughout the year.

P lease refer to our website http://www.lseg.com/investor-relations and click on the shareholder services section for up-to-date details.

INVESTOR RELATIONS CONTACTS

 
Investor Relations                          Independent auditors 
 
London Stock Exchange Group plc             Ernst & Young LLP 
 10 Paternoster Square                       1 More London Place 
 London                                      London 
 EC4M 7LS                                    SE1 2AF 
 
For enquiries relating to shareholdings     T +44 (0)20 7951 2000 
 in London Stock Exchange Group plc: 
Shareholder helpline: +44 (0)20 
 7797 3322 
email: ir@lseg.com 
 
Visit the investor relations section 
 of our website for up-to-date information 
 including the latest share price, 
 announcements, financial reports 
 and details of analysts and consensus 
 forecasts 
 http://www.lseg.com/investor-relations 
 
Registered office                           Principal legal adviser 
 
London Stock Exchange Group plc             Freshfields Bruckhaus Deringer LLP 
 10 Paternoster Square                       65 Fleet Street 
 London                                      London 
 EC4M 7LS                                    EC4Y 1HT 
 
Registered company number                   T +44 (0)20 7936 4000 
 London Stock Exchange Group plc: 
 5369106 
 
Registrar information                       Corporate brokers 
 
Equiniti                                    Citi 
 Aspect House                                33 Canada Square 
 Spencer Road                                Canary Wharf London 
 Lancing                                     E14 5LB 
 West Sussex                                 Telephone: +44 (0)20 7500 5000 
 BN99 6DA                                    www.citigroup.com 
T +44 (0)371 384 2233 or +44 (0)121         Morgan Stanley 
 415 7065                                    25 Cabot Square 
 Lines open 8.30 to 17.30, Monday            Canary Wharf 
 to Friday.                                  London 
 www.shareview.co.uk                         E14 4QA 
                                             Telephone +44 (0)20 7425 8000 
                                             www.morganstanley.com 
                                            Goldman Sachs 
                                             Plumtree Court 
                                             25 Shoe Lane 
                                             London 
                                             EC4A 4AU 
                                             Telephone +44 (0)20 7774 1000 
                                             www.goldmansachs.com 
 

AIM, London Stock Exchange, London Stock Exchange Group, LSE, the London Stock Exchange Coat of Arms Device, FTSE Russell, SEDOL, SETS and UnaVista, are registered trade marks of London Stock Exchange plc. Main Market and the Green Economy Mark are un-registered trade marks of London Stock Exchange plc.

CDSClear is a registered trade mark of LCH S.A..

FTSE and FTSE Russell are registered trade marks of the London Stock Exchange Group companies and are used by FTSE International Limited under licence.

GIACT is a registered trade mark of Giact Systems, LLC.

Global Data Consortium is a trade mark of Global Data Consortium, Inc.

LCH, SwapClear, SwapAgent, EquityClear, ForexClear and RepoClear are registered trade marks of LCH Limited.

LSEG and the LSEG Coat of Arms are trade marks of London Stock Exchange Group plc

MAYSTREET is a trade mark of MayStreet, Inc.

MillenniumIT is a registered trade mark of Millennium Information Technologies Limited.

Refinitiv, the Refinitiv logo, Refinitiv Workspace, Lipper, World-Check, REDI, FXall, Eikon, Red Flag Group, Scivantage and Datastream are registered trademarks of Financial & Risk Organisation Limited and Refinitiv US Organization LLC, as applicable.

Tradeweb is a registered trade mark of Tradeweb Markets LLC

Turquoise is a registered trade mark of Turquoise Global Holdings Limited.

The Yield Book and WGBI are registered trade marks of The Yield Book, Inc.

Other logos, organisations and company names referred to may be the trade marks of their respective owners.

This information is provided by RNS, the news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact rns@lseg.com or visit www.rns.com.

RNS may use your IP address to confirm compliance with the terms and conditions, to analyse how you engage with the information contained in this communication, and to share such analysis on an anonymised basis with others as part of our commercial services. For further information about how RNS and the London Stock Exchange use the personal data you provide us, please see our Privacy Policy.

END

IR FFFFLTVISIIF

(END) Dow Jones Newswires

August 05, 2022 02:00 ET (06:00 GMT)

London Stock Exchange (LSE:LSEG)
Historical Stock Chart
From Feb 2024 to Mar 2024 Click Here for more London Stock Exchange Charts.
London Stock Exchange (LSE:LSEG)
Historical Stock Chart
From Mar 2023 to Mar 2024 Click Here for more London Stock Exchange Charts.