LSEG Revenue Growth Expected to be at Upper End of Guidance

LSEG Revenue Growth Expected to be at Upper End of Guidance

Delivering on our growth potential: strong H1 performance; 2023 revenue growth expected to be towards the upper end of 6-8% guidance

David Schwimmer, CEO said:“LSEG delivered strong, broad-based growth in the first half. Data & Analytics is growing faster than it has for many years, with the ongoing improvements to our offering and strengthened customer relationships increasingly reflected in financial performance. Post Trade once again demonstrated the critical role it plays in helping customers manage risk in uncertain markets, delivering outstanding growth. Our Capital Markets businesses also made progress, despite a very strong prior period. LSEG’s resilient business model and the quality of our earnings, diversified by customer, geography, product and asset class, position us well for further growth in the second half and beyond.“

Through our multi-year investment programme we are delivering better solutions and higher customer satisfaction, and building a faster-growing, more scalable business. We are progressing well with the implementation phase of our transformational strategic partnership with Microsoft, with customers beginning to see the benefits from next year.”

Six months ending 30 June, reported 2023
Constant currency variance % Organic
variance %
Total income (excl. recoveries) 3,990 3,569 11.8% 7.9% 6.5%
Recoveries1 189 166 13.9% 4.4% 4.4%
Total income (incl. recoveries) 4,179 3,735 11.9% 7.8% 6.4%
EBITDA 1,872 1,799 4.1% 5.8% 6.4%
EBITDA margin 46.9% 50.4%
Operating profit 1,418 1,408 0.7% 4.1% 5.0%
Adjusted earnings per share 160.9 167.4 (3.9%)
Operating profit 729 897 (18.7%)
Profit before tax 662 803 (17.6%)
Basic earnings per share 77.2 98.0 (21.2%)
Dividends per share 35.7 31.7 12.6%

Financial highlights

(All growth rates relate to H1 and are expressed on a constant currency basis unless otherwise stated)

  • Total income (excl. recoveries) up 7.9%; up 11.8% on a reported basis
  • Accelerating growth in Q2: Total income (excl. recoveries) up 8.4% vs Q2 2022
  • Broad-based growth: Data & Analytics +7.6%, Capital Markets +1.5%, Post Trade +19.2%
  • Strong subscription revenue: organic annual subscription value (ASV) up 6.9% at June 2023, consolidating the significant improvements made over the last two years
  • Good profitability: adjusted EBITDA up 5.8%. EBITDA and margin impacted by non-cash FX-related balance sheet adjustments. On track to deliver full year adjusted EBITDA margin around 48%3 excluding these items
  • Basic EPS -21.2% on a reported basis; adjusted EPS -3.9% to 160.9 pence, impacted by non-cash FX items and higher effective tax rate
  • Updated leverage target of 1.5-2.5x operating net debt to adjusted EBITDA (previously 1.0-2.0x) reflecting diversified and recurring nature of the Group’s revenues; day-to-day leverage expected around the middle of this range (H1 2023: 1.8x); no credit rating impact anticipated

Strategic progress and outlook

  • Full year constant currency growth in total income (excl. recoveries) now expected to be towards the upper end of the +6-8% guidance range
  • Other 2023 targets reiterated: adjusted EBITDA margin c.48%3, business-as-usual capex c.£750 million4
  • Connecting our businesses: £107 million runrate revenue synergy delivery at end of H1; FXall/Tradeweb solution for EM debt now live
  • Investing in our products: Acadia acquisition reinforces our leading position in Post Trade solutions; new FX Matching platform to launch in H2
  • Harnessing the power of AI technologies: AI embedded in many products, incl. new Advanced Dealing solution for FX; partnering with customers as they deploy AI technologies
  • Strong start to Microsoft partnership: good progress on product development, Design Partner Programme set up
  • Significant shareholder returns: interim dividend +12.6% to 35.7p, £400 million returned via buyback in H1; up to £750 million directed buyback expected by April 2024
Source: LSEG

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