London Stock Exchange Group
plc: Q1 2024 Trading Update
Good start to the year,
driven by solid performance across the business
David Schwimmer, CEO
said:
"We have started the year well,
delivering another quarter of solid growth consistent with our
plans. We drove the strongest performances in FTSE Russell, Risk
Intelligence and Tradeweb, and our Equities business returned to
growth. The rapid pace of innovation continues, with new product
launches across LSEG throughout 2024.
"We continue to make strong progress
in our Microsoft partnership, with a number of products expected to
be in external pilot or general release this half. We are now
picking up the pace of migrating our datasets onto the Microsoft
platform, which will transform access to our data for customers. We
look forward to further progress in the rest of the
year."
|
Q1 2024
highlights
|
|
(All growth rates
on an organic constant currency basis unless otherwise
stated)
|
|
●
|
Solid growth: Total income
(excl. recoveries) +7.3% incl. M&A, +6.4% organic.
|
|
●
|
Robust performance from all divisions:
Data & Analytics +4.3%, FTSE Russell +9.5%,
Risk Intelligence +12.5%, Capital Markets +14.4%, Post Trade
revenues flat reflecting strong prior year comparator.
|
|
●
|
Organic Annual Subscription Value (ASV) growth
+6.0%: good underlying growth from
strong retention, robust sales and pricing, partly offset by
increasing impact of Credit Suisse losses, as expected, plus
initial step-down from entry into an attractive multi-year contract
renewal with another major bank. Organic ASV growth expected to
remain around these levels throughout 2024 despite further Credit
Suisse impact.
|
|
●
|
Active capital allocation: £500
million directed buyback completed in Q1, targeting £1 billion of
total buybacks in 2024; refinancing of $1.25 billion in 3-year and
10-year bonds; acquisitions of ICD by Tradeweb and minority stakes
in LCH Group.
|
|
●
|
Further strong progress in partnership with
Microsoft: delivering first products
in H1; successful ongoing migration of datasets to our cloud-based
data platform.
|
|
●
|
Confident of continued growth and improving
profitability: on track to deliver
all financial guidance provided in November 2023's Capital Markets
Day.
|
This release contains revenues,
cost of sales and key performance indicators (KPIs) for the three
months ended 31 March 2024 (Q1). Certain columns and rows may not
add due to the use of rounded numbers for disclosure
purposes. To reflect underlying
performance, all constant currency variances compare the current
and prior period at consistent exchange rates. Organic variance is
calculated on a constant currency basis, adjusting the results to
remove disposals from the entirety of the current and prior year
periods, and including acquisitions from the date of acquisition
with a comparable adjustment to the prior year.
Q1 2024
summary
|
|
|
|
|
|
|
|
|
|
Q1 2024
£m
|
Q1
2023
£m
|
Variance
%
|
|
Constant currency
variance
%
|
Organic constant
currency
variance
%
|
|
|
|
|
|
|
|
|
|
Workflows
|
479
|
488
|
(1.8%)
|
|
1.2%
|
1.7%
|
|
Data & Feeds
|
465
|
446
|
4.3%
|
|
6.8%
|
6.8%
|
|
Analytics
|
55
|
56
|
(1.8%)
|
|
6.5%
|
6.5%
|
|
Data
& Analytics
|
999
|
990
|
0.9%
|
|
4.0%
|
4.3%
|
|
|
|
|
|
|
|
|
|
Subscription
|
144
|
139
|
3.6%
|
|
6.2%
|
6.2%
|
|
Asset-based
|
74
|
66
|
12.1%
|
|
16.4%
|
16.4%
|
|
FTSE
Russell
|
218
|
205
|
6.3%
|
|
9.5%
|
9.5%
|
|
|
|
|
|
|
|
|
|
Risk
Intelligence
|
131
|
120
|
9.2%
|
|
12.5%
|
12.5%
|
|
|
|
|
|
|
|
|
|
Equities
|
60
|
59
|
1.7%
|
|
1.6%
|
1.6%
|
|
Fixed Income, Derivatives &
Other
|
318
|
269
|
18.2%
|
|
23.0%
|
21.3%
|
|
FX
|
61
|
66
|
(7.6%)
|
|
(2.2%)
|
(2.2%)
|
|
Capital Markets
|
439
|
394
|
11.4%
|
|
15.5%
|
14.4%
|
|
|
|
|
|
|
|
|
|
OTC Derivatives
|
138
|
126
|
9.5%
|
|
11.8%
|
0.1%
|
|
Securities & Reporting
|
62
|
64
|
(3.1%)
|
|
(0.5%)
|
(0.5%)
|
|
Non-Cash Collateral
|
28
|
26
|
7.7%
|
|
6.5%
|
6.5%
|
|
Net Treasury Income
|
69
|
73
|
(5.5%)
|
|
(2.6%)
|
(2.6%)
|
|
Post
Trade
|
297
|
289
|
2.8%
|
|
5.0%
|
(0.1%)
|
|
|
|
|
|
|
|
|
|
Other
|
5
|
9
|
(44.4%)
|
|
(43.9%)
|
(43.9%)
|
|
Total Income (excl. recoveries)
|
2,089
|
2,007
|
4.1%
|
|
7.3%
|
6.4%
|
|
Recoveries
|
93
|
93
|
-
|
|
3.8%
|
3.8%
|
|
Total Income (incl. recoveries)
|
2,182
|
2,100
|
3.9%
|
|
7.1%
|
6.3%
|
|
Cost of sales
|
(289)
|
(288)
|
0.3%
|
|
3.9%
|
2.8%
|
|
Gross Profit
|
1,893
|
1,812
|
4.5%
|
|
7.6%
|
6.9%
|
|
Total income (excluding recoveries)
was up 7.3% including M&A, and 6.4% on an organic
basis.
|
|
●
|
Data & Analytics was up
4.3% reflecting continued strong retention, good sales and a
contribution from pricing consistent with the previous year.
Overall Data & Analytics growth was impacted by cancellations
related to Credit Suisse as expected, and by entry into an
enterprise-wide LSEG Data Agreement (LDA) with a major bank
securing a multi-year period of attractive growth and greater
long-term value following an initial step down in
revenue.
|
|
|
Our partnership with Microsoft
continues to make good progress with a number of products expected
to be in external pilot or general release this half and the
ongoing migration of content sets into our cloud-based data
platform.
|
|
o
|
Workflows was up 1.7% with
growth across Trading, Banking, Investment Management and Wealth
customers. The roll-out of Workspace continues to progress well
and, following the successful migration of banking users, we
retired the legacy SDC Platinum platform in Q1, creating a more
seamless and integrated experience for customers and driving
increased usage.
|
|
o
|
Data & Feeds was up 6.8%,
driven by continued innovation and expansion in both our Data and
Feeds offerings. In Q1 we launched our first cloud-based service
offering customers access to full tick data in real time, further
broadening our extensive range of real time services. Demand for
our data content remains strong, especially in fixed income
following targeted investment over recent years.
|
|
o
|
Analytics was up 6.5%,
primarily driven by growth in Yieldbook's fixed income analytics
and loan data.
|
|
●
|
FTSE Russell was up 9.5%, with
inflows and more favourable year-on-year market trends driving a
stronger contribution from asset-based revenues (+16.4%). Strong
demand for flagship equity products continued to support good
growth in underlying subscription revenues, adjusting for one-time
revenues in the prior year period.
|
|
●
|
Risk Intelligence was up 12.5%
driven by strong business momentum and customer demand in our
screening business, World-Check. Growth in our digital identity and
fraud businesses continues to build as the expansion in
distribution partnerships over recent years feeds though to
increased usage.
|
|
●
|
Annual Subscription Value (ASV): Period-end organic ASV growth of 6.0% reflects an increasing
impact from Credit Suisse contract losses, as expected, plus the
near-term step-down following entry into an attractive long-term
agreement with a major bank noted above. We expect ASV growth to
remain around these levels throughout 2024 despite further Credit
Suisse cancellations.
|
|
●
|
Capital Markets was up 14.4%,
driven by growth at Tradeweb
|
|
o
|
Equities returned to growth, up
1.6%, with gains in secondary trading partly offset by lower market
activity.
|
|
o
|
Fixed Income, Derivatives & Other
was up 21.3% with a record quarter for Tradeweb.
Average Daily Volume (ADV) of $1.9 trillion in Q1 reflected
continued share gains, including a record 17.6% share of fully
electronic US high-grade bond volumes, complemented by strong
market activity across Tradeweb's global asset classes. Tradeweb
also expanded its capabilities in algorithmic execution in Q1 with
the acquisition of R8fin.
|
|
o
|
FX was down 2.2%. Good volume
growth in FXall was offset by a less favourable product mix. We saw
strong demand for our innovative Forward First Fixing capability
launched last year, with $64 billion traded using the automated
multi-dealer trading protocol in Q1. Matching was affected by
weakness in interbank volumes.
|
|
●
|
Post Trade was flat on an
organic basis, and up 5.0% in constant currency including the
benefit of the Acadia acquisition. Underlying OTC Derivatives
revenues grew strongly driven by higher clearing volumes and price
increases for LCH members and clients, with realised organic growth
flat due to the £8 million of one-time revenues from reference rate
reform in the prior year period. Net Treasury Income was slightly
lower (-2.6%) with higher treasury margins largely offsetting the
impact of a 21.5% decline in cash collateral balances. Following
the acquisition of minority interests in Q1, our ownership of LCH
Group rose to 85.9%.
|
|
●
|
Group cost of sales was up
2.8%, below the growth rate in revenue reflecting business mix and
the partially fixed nature of the costs.
|
|
●
|
Gross profit was up 6.9%, with
growth slightly ahead of Total Income (excl. recoveries) as a
result of the lower growth in cost of sales.
|
|
|
|
Capital
allocation
In March we participated in the
further placing of LSEG shares by the former Refinitiv
shareholders, committing £500 million to a directed buyback. During
the course of 2024 we intend to return an additional £500 million
in buybacks, similarly targeted at the Blackstone-led consortium,
and are seeking the requisite shareholder approvals at today's
AGM.
In March, we successfully issued a
total of $1.25 billion in 3-year and 10-year bonds, using the
proceeds to repay maturing bonds and commercial paper.
In April, Tradeweb announced the
acquisition of ICD, a cash management platform for Corporate
Treasurers, adding a new customer vertical with attractive
cross-sell opportunities.
Q1 investor and analyst
conference call:
LSEG will host a conference call for
its Q1 Trading Update for analysts and investors today at 8.30am
(UK time). On the call will be David Schwimmer (Chief Executive
Officer) and Michel-Alain Proch (Chief Financial
Officer).
To access the webcast or telephone
conference call please register in advance using the following
link:
https://www.lsegissuerservices.com/spark/LondonStockExchangeGroup/events/72b128c8-0a48-4bef-bfa6-dc423a0e1850
To ask a question live you will need
to register for the telephone conference call here:
https://registrations.events/direct/LON594689
Contacts: London Stock
Exchange Group plc
|
Investors
|
|
|
Peregrine Riviere / Chris Turner -
Investor Relations
|
ir@lseg.com
|
|
|
|
|
Media
|
|
|
Lucie Holloway / Rhiannon Davies -
External Communications
|
+44 (0) 20 7797 1222
newsroom@lseg.com
|
Additional information can be found
at www.lseg.com
Divisional non-financial
KPIs
1. Subscriptions1
|
|
Q1 2024
|
Q1
2023
|
|
Annual Subscription Value growth
(%) 2
|
6.0%
|
7.6%
|
|
Subscription revenue growth
(%) 2, 3
|
6.6%
|
5.5%
|
1 Subscription revenues in
Data & Analytics, FTSE Russell and Risk
Intelligence
2 Organic, constant currency
variance
3 12-month rolling constant
currency variance
2. FTSE
Russell
|
|
Q1 2024
|
Q1
2023
|
Variance
%
|
|
Index - ETF AUM ($bn):
|
|
|
|
|
- Period end
|
1,328
|
1,077
|
23.3%
|
|
- Average
|
1,255
|
1,063
|
18.1%
|
2.
Capital Markets
|
|
Q1 2024
|
Q1
2023
|
Variance
%
|
|
Equities
|
|
|
|
|
Secondary Markets - Equities
|
|
|
|
|
UK Value Traded (£bn) - Average Daily
Value
|
3.9
|
4.0
|
(2.5%)
|
|
SETS Yield (bps)
|
0.71
|
0.69
|
2.9%
|
|
|
|
|
|
|
Fixed income, Derivatives and Other
|
|
|
|
|
Tradeweb average daily volume ($m)
|
|
|
|
|
Rates - Cash
|
461,826
|
362,707
|
27.3%
|
|
Rates - Derivatives
|
798,871
|
508,675
|
57.0%
|
|
|
|
|
|
|
Credit - Cash
|
17,418
|
11,497
|
51.5%
|
|
Credit - Derivatives
|
17,502
|
20,806
|
(15.9%)
|
|
|
|
|
|
|
FX
|
|
|
|
|
Average daily total volume
($bn)
|
456
|
463
|
(1.5%)
|
|
|
|
|
|
3. Post
Trade
|
|
Q1 2024
|
Q1
2023
|
Variance
%
|
|
OTC
|
|
|
|
|
SwapClear
|
|
|
|
|
IRS notional cleared
($trn)
|
406
|
379
|
7.1%
|
|
Client trades ('000)
|
912
|
845
|
7.9%
|
|
|
|
|
|
|
ForexClear
|
|
|
|
|
Notional cleared ($bn)
|
8,287
|
6,225
|
33.1%
|
|
ForexClear members
|
38
|
36
|
5.6%
|
|
|
|
|
|
|
Securities & Reporting
|
|
|
|
|
EquityClear trades (m)
|
268
|
473
|
(43.3%)
|
|
Listed derivatives contracts
(m)
|
54.0
|
62.6
|
(13.7%)
|
|
RepoClear - nominal value
(€trn)
|
74.4
|
77.9
|
(4.5%)
|
|
|
|
|
|
|
Collateral
|
|
|
|
|
Average non-cash collateral
(€bn)
|
197.1
|
175.7
|
12.2%
|
|
Average cash collateral
(€bn)
|
110.5
|
140.7
|
(21.5%)
|
Foreign
Exchange
The majority of LSEG revenues are in
US dollars followed by sterling, euro and other
currencies.
|
|
USD
|
GBP
|
EUR
|
Other
|
|
Total Income by division1,2
|
59%
|
15%
|
17%
|
9%
|
|
Data &
Analytics1
|
63%
|
8%
|
15%
|
14%
|
|
FTSE Russell
|
72%
|
20%
|
3%
|
5%
|
|
Risk Intelligence
|
64%
|
9%
|
16%
|
12%
|
|
Capital Markets
|
62%
|
17%
|
20%
|
2%
|
|
Post Trade
|
27%
|
38%
|
34%
|
2%
|
1 Total income includes
recoveries
2 Percentage splits based on
Q1 2024
Due to rounding, income percentages may not add to
100%.
Spot / Average Rates
|
|
Average
rate
3 months ended
31 March 2024
|
Closing
rate at
31 March 2024
|
Average
rate
3 months ended
31 March 2023
|
Closing
rate at
31 March 2023
|
|
GBP : USD
|
1.268
|
1.263
|
1.214
|
1.238
|
|
GBP : EUR
|
1.168
|
1.170
|
1.132
|
1.135
|
For definitions of technical
terms - refer to the Glossary contained in the 2023 Annual Report,
page 255.
Total income and gross
profit by quarter
|
|
2023
|
|
2024
|
|
£m
|
Q1
|
Q2
|
Q3
|
Q4
|
FY
|
|
Q1
|
|
|
|
|
|
|
|
|
|
|
Workflows
|
488
|
473
|
465
|
477
|
1,903
|
|
479
|
|
Data & Feeds
|
446
|
454
|
443
|
467
|
1,810
|
|
465
|
|
Analytics
|
56
|
55
|
55
|
52
|
218
|
|
55
|
|
Data
& Analytics
|
990
|
983
|
962
|
996
|
3,931
|
|
999
|
|
|
|
|
|
|
|
|
|
|
Subscription
|
139
|
136
|
141
|
147
|
563
|
|
144
|
|
Asset-Based
|
66
|
71
|
73
|
71
|
281
|
|
74
|
|
FTSE
Russell
|
205
|
207
|
214
|
218
|
844
|
|
218
|
|
|
|
|
|
|
|
|
|
|
Risk
Intelligence
|
120
|
121
|
123
|
128
|
492
|
|
131
|
|
|
|
|
|
|
|
|
|
|
Equities
|
59
|
57
|
55
|
56
|
227
|
|
60
|
|
Fixed Income, Derivatives &
Other
|
269
|
246
|
259
|
294
|
1,068
|
|
318
|
|
FX
|
66
|
62
|
61
|
62
|
251
|
|
61
|
|
Capital Markets
|
394
|
365
|
375
|
412
|
1,546
|
|
439
|
|
|
|
|
|
|
|
|
|
|
OTC Derivatives
|
126
|
134
|
125
|
132
|
517
|
|
138
|
|
Securities & Reporting
|
64
|
63
|
64
|
63
|
254
|
|
62
|
|
Non-Cash Collateral
|
26
|
27
|
27
|
27
|
107
|
|
28
|
|
Net Treasury Income
|
73
|
77
|
70
|
69
|
289
|
|
69
|
|
Post
Trade
|
289
|
301
|
286
|
291
|
1,167
|
|
297
|
|
|
|
|
|
|
|
|
|
|
Other
|
9
|
6
|
7
|
7
|
29
|
|
5
|
|
Total Income (excl. recoveries)
|
2,007
|
1,983
|
1,966
|
2,053
|
8,009
|
|
2,089
|
|
Recoveries
|
93
|
96
|
88
|
93
|
370
|
|
93
|
|
Total Income (incl. recoveries)
|
2,100
|
2,079
|
2,054
|
2,146
|
8,379
|
|
2,182
|
|
Cost of sales
|
(288)
|
(284)
|
(282)
|
(289)
|
(1,143)
|
|
(289)
|
|
Gross Profit
|
1,812
|
1,795
|
1,772
|
1,857
|
7,236
|
|
1,893
|