London Stock Exchange Group plc Preliminary results for the year ended 31 December 2023

Continued strong performance: accelerating growth, significant strategic progress, substantial returns to shareholders

David Schwimmer, CEO said:

“2023 was another strong year for LSEG. We continued our track record of broad-based growth, despite an uncertain environment, and delivered on all the targets we set at the time of the Refinitiv acquisition. We also significantly improved our products and services, further strengthened our leadership team and made great progress on creating a high-performance culture throughout the organisation.

“We continue to build the foundations for sustained, profitable growth across all of our businesses. In Data & Analytics, customers will shortly be using the first products from our partnership with Microsoft: together, we will transform how financial markets participants communicate, research, analyse data and trade. In Capital Markets, we are collaborating more extensively with Tradeweb, creating new avenues for growth. We are also seeing an encouraging IPO pipeline for the London Stock Exchange. Our Post Trade business is in the early phase of its next stage of growth, helping financial institutions manage risk and improve capital efficiency across the whole trading book.

“We look forward to further progress in 2024. Our model – global, multi-asset class, and operating across the entire trade lifecycle – is proven to thrive regardless of market conditions, and we will continue to invest to deliver the best possible services for our customers and returns for our shareholders.”

 

Reported	2023  £m	2022  £m	Variance %	Constant currency variance %	Organic constant currency variance %
Total Income (excl. recoveries)	8,009	7,428	7.8%	8.3%	7.1%
Recoveries	370	315	17.5%	2.8%	2.8%
Total Income (incl. recoveries)	8,379	7,743	8.2%	8.1%	6.9%

 

Reported	2023  £m	2022  £m	Variance %
Operating Profit	1,371	1,417	(3.2%)
Profit Before Tax	1,195	1,241	(3.7%)
Basic Earnings per Share (p)	138.9	141.8	(2.0%)
Dividends per Share (p)	115.0	107.0	7.5%

 

Adjusted	2023  £m	2022  £m	Variance %	Constant currency variance %	Organic constant currency variance %
EBITDA	3,777	3,550	6.4%	8.6%	8.8%
EBITDA Margin	47.2%	47.8%
Operating Profit	2,862	2,728	4.9%	7.9%	8.4%
Earnings per Share (p)	323.9	317.8	1.9%

Financial highlights

(all growth rates are expressed on a constant currency basis, unless otherwise stated)

· Total income (excl. recoveries) up 8.3%; up 7.7% excluding the Acadia acquisition, towards the upper end of 6%-8% guidance range

· Broad-based growth: Data & Analytics +7.3%, Capital Markets +6.1%, Post Trade +17.4%

· Good profitability: adjusted EBITDA up 8.6%. Excluding impact of FX-related items, EBITDA margin of 47.7%, consistent with guidance

· Adjusted operating profit: up 7.9% reflecting strong EBITDA growth slightly offset by faster recognition of depreciation

· Continued adjusted earnings growth: adjusted EPS +1.9% to 323.9 pence; basic EPS -2.0% (both at actual FX rates)

· Highly cash generative: £1.8 billion equity free cash flow, 100% cash conversion

Strategic progress and outlook

· Successful integration and accelerated performance of Refinitiv: 2021-2023 organic total income (excl. recoveries) CAGR of 6.5%[1] at the upper end of acquisition targets

· Medium-term guidance set out at the Capital Markets Day further raises growth aspiration: targeting mid-to-high single digit organic growth annually, accelerating after 2024

· Attractive acquisitions: Acadia reinforces our leading position in Post Trade Solutions; acquired full ownership of LCH SA; increased ownership of LCH Group

· Good progress on Microsoft partnership: first products expected in H1 2024, embedding AI technologies and revolutionising industry workflows

· Significant shareholder returns: final dividend +5.3%, taking full year payout to 115 pence; £1.2 billion returned via buybacks in 2023; plan to execute up to £1 billion of buybacks in 2024, with intention to acquire this directly from the Blackstone/Thomson Reuters consortium

This release contains revenues, costs and earnings on a continuing basis, and key performance indicators (KPIs) for the twelve months ended 31 December 2023. FY 2023 is compared against FY 2022 on a statutory basis. Constant currency variances are calculated on the basis of consistent FX rates applied across the current and prior year period. Organic growth is calculated on a constant currency basis, adjusting the results to remove disposals from the entirety of the current and prior year periods, and by including acquisitions from the date of acquisition with a comparable adjustment to the prior year.  Within the financial information and tables presented, certain columns and rows may not add due to the use of rounded numbers for disclosure purposes.