REG - LondonStockExGroup - Trading Statement
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RNS Number : 9315G London Stock Exchange Group PLC 01 May 2025
London Stock Exchange Group plc: Q1 2025 Trading Update
Strong start to the year: accelerating D&A growth and excellent
performance from Markets division, full year guidance confirmed
David Schwimmer, CEO said:
"We have started the year strongly, delivering another quarter of good growth.
Our Data & Analytics business accelerated further, and Risk Intelligence
and FTSE Russell continued to perform well. Our Markets division saw strong
broad-based growth against a backdrop of elevated volatility, which has
persisted into April reflecting continuing uncertainty around the outlook for
financial markets and the global economy more broadly.
"We continue to drive the strategic transformation of our business - building
a strong product pipeline, investing in our engineering talent and delivering
on the Microsoft partnership.
"Our strong first quarter performance is testament to the value of our
diversified business model. We look forward to further progress in the rest of
the year, consistent with our financial targets."
Q1 2025 highlights
(All growth rates on an organic constant currency basis unless otherwise
stated)
· Strong growth: Total income (excl. recoveries) +8.7% incl. M&A, +7.8%
organic.
· Good performance from all divisions: Data & Analytics +5.1%, FTSE Russell
+9.6%, Risk Intelligence +10.7%, Markets +10.7%.
· Acceleration in Data & Analytics: sequential improvement in growth led by
Analytics and Data & Feeds.
· Broad-based strength in Markets: double-digit growth across FX, Tradeweb and
OTC Derivatives; elevated activity continuing into April.
· Shareholder returns: £245 million of £500 million share buyback completed by
30 April.
· Confident of continued growth and improving profitability: on track to deliver
on all financial guidance issued in February's FY 2024 results.
(This release contains revenues, cost of sales and key performance indicators
(KPIs) for the three months ended 31 March 2025 (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 2025 summary
Q1 2025 Q1 2024 Variance( Constant currency variance( Organic constant currency
£m
£m ) % ) %
variance
%
Workflows 493 479 2.9% 3.4% 3.4%
Data & Feeds 491 465 5.6% 6.6% 6.6%
Analytics 59 55 7.3% 7.4% 7.4%
Data & Analytics 1,043 999 4.4% 5.1% 5.1%
Subscription 156 144 8.3% 8.2% 8.2%
Asset-based 83 74 12.2% 12.5% 12.5%
FTSE Russell 239 218 9.6% 9.6% 9.6%
Risk Intelligence 143 131 9.2% 9.3% 10.7%
Equities 62 60 3.3% 3.1% 3.1%
Fixed Income, Derivatives & Other 394 318 23.9% 24.4% 17.3%
FX 69 61 13.1% 12.3% 12.3%
OTC Derivatives 161 138 16.7% 16.8% 16.8%
Securities & Reporting 56 62 (9.7%) (9.8%) (9.8%)
Non-Cash Collateral 27 28 (3.6%) (0.4%) (0.4%)
Net Treasury Income 65 69 (5.8%) (6.3%) (6.3%)
Markets 834 736 13.3% 13.5% 10.7%
Other 2 5 (60.0%) (52.1%) (52.1%)
Total Income (excl. recoveries) 2,261 2,089 8.2% 8.7% 7.8%
Recoveries 93 93 0.0% 0.6% 0.6%
Total Income (incl. recoveries) 2,354 2,182 7.9% 8.3% 7.5%
Cost of sales (308) (289) 6.6% 7.2% 7.2%
Gross Profit 2,046 1,893 8.1% 8.5% 7.5%
Total income (excluding recoveries) was up 8.7% including M&A, and 7.8% on
an organic basis.
· Data & Analytics was up 5.1%, accelerating from the prior year period. The
drivers were broad-based with continued strong retention, good sales and a
contribution from pricing consistent with the previous year.
o Workflows was up 3.4%, with continued product enhancements driving good sales
activity and retention. Commodities was an area of particular strength during
the quarter. The business remains on track to sunset Eikon by June 2025.
o Data & Feeds was up 6.6%. We continue to drive innovation and expansion of
our leading Real Time offering, adding new low latency feeds and cloud
solutions. In our Pricing and Reference business we saw good demand for newer
capabilities such as fixed income corporate actions data and our expanded
evaluated pricing offering.
o Analytics was up 7.4%, with good growth in Yield Book fixed income analytics
and Lipper fund data. We continue to see strong demand for our Analytics API
and launched new Visual Studio code capabilities in the quarter, both
developed in partnership with Microsoft, making it easier for customers to
create and deploy their insights using our models.
· FTSE Russell was up 9.6%. Strong demand for flagship equity products continued
to support good growth in underlying subscription revenues. Asset-based
revenues grew strongly driven by both inflows and higher average market
levels.
· Risk Intelligence was up 10.7% driven by strong business momentum and customer
demand in our screening business, World-Check, and expansion in our digital
identity and fraud businesses.
· Annual Subscription Value (ASV): Period-end organic ASV growth was 6.4%,
reflecting continued good sales, strong retention and a contribution from
pricing consistent with the previous year.
· Markets was up 10.7%, and up 13.5% including the benefit of the ICD
acquisition, as our capital markets venues and post trade businesses saw
elevated activity in response to the heightened political and economic
uncertainty in the quarter.
o Equities was up 3.1%. We saw strong, volume-driven growth in secondary
markets, although this was partly offset by subdued primary revenue growth.
o Fixed Income, Derivatives & Other was up 17.3% organically with another
record quarter for Tradeweb. Average Daily Volume (ADV) of $2.55 trillion in
Q1 (up 19.1% organically, or +33.7% including ICD) reflected continued share
gains across Tradeweb's rates and credit asset classes. This was complemented
by strong market activity across Tradeweb's global asset classes as a result
of heightened political and economic uncertainty.
o FX was up 12.3%, led by market-driven strength in dealer-to-client activity on
our FXall platform. This was accompanied by good growth in interbank volumes
on our Matching platform.
o OTC Derivatives was up 16.8%. Growth was broad-based across asset classes and
in both cleared and uncleared instruments, reflecting elevated financial
market volatility in the period and greater uncertainty over the global
outlook for interest rates.
o Securities & Reporting was down (9.8)%, with strong volume growth in fixed
income clearing more than offset by last year's loss of business from
Euronext.
o Non-Cash Collateral was broadly unchanged at (0.4)%, with mix effects limiting
the benefit from higher collateral balances.
o Net Treasury Income was down (6.3)% reflecting the reduction in cash balances
following last year's loss of business from Euronext.
· Group cost of sales was up 7.2%, slightly below the growth rate in revenue
reflecting business mix and the partially fixed nature of the costs.
· Gross profit was up 7.5%, very slightly behind growth in Total Income (excl.
recoveries) as a result of the more modest growth in recoveries revenues.
Capital allocation
In February we announced our intention to return £500 million to shareholders
via a share buyback. At the end of April 2025, shares worth £245 million had
been acquired under this programme.
In March we repurchased $250 million of the group's US dollar bond maturing in
2031, an NPV-positive transaction that takes advantage of the current interest
rate environment.
Financial guidance
We are confident of further growth and improvement to our EBITDA margin in
2025, leading to strong growth in equity free cash flow. We confirm our
guidance for 2025 as follows:
· Organic constant currency growth in total income excluding recoveries of
6.5-7.5% including an acceleration in Data & Analytics organic growth and
more normalised growth at Tradeweb
· An improvement in constant currency EBITDA margin of 50-100 basis points
· Capex intensity of c 10% of total income excluding recoveries
· Equity free cash flow of at least £2.4 billion, based on foreign exchange
rates of £1 = $1.28 and €1.18
· Underlying effective tax rate of 24-25%
Q1 investor and analyst conference call:
LSEG will host a conference call for its Q1 Trading Update for analysts and
investors today at 8.30am (UK time). On the call will be David Schwimmer,
LSEG's Chief Executive officer (CEO), and Michel-Alain Proch, Chief Financial
Officer (CFO).
To access the webcast or telephone conference call please register in advance
using the following link:
https://sparklive.lseg.com/LondonStockExchangeGroup/events/c72ab92d-f61e-4ee2-b083-790e69775c58/lseg-q1-results-2025-investor-analyst-call
(https://sparklive.lseg.com/LondonStockExchangeGroup/events/c72ab92d-f61e-4ee2-b083-790e69775c58/lseg-q1-results-2025-investor-analyst-call)
To ask a question live you will need to register for the telephone conference
call here:
https://registrations.events/direct/LON201413
(https://registrations.events/direct/LON201413)
Contacts: London Stock Exchange Group plc
Peregrine Riviere / Chris Turner - Investor Relations ir@lseg.com (mailto:ir@lseg.com)
Media
Lucie Holloway / Rhiannon Davies - External Communications +44 (0) 20 7797 1222
newsroom@lseg.com (mailto:newsroom@lseg.com)
Additional information can be found at www.lseg.com (http://www.lseg.com) .
Divisional non-financial KPIs
Subscriptions(1)
Q1 2025 Q1 2024
Annual Subscription Value growth (%) (2) 6.4% 6.0%
Subscription revenue growth (%) (2, 3) 6.1% 6.6%
( )
(1 Subscription revenues in Data & Analytics, FTSE Russell and Risk
Intelligence)
(2 Organic, constant currency variance)
(3 12-month rolling constant currency variance)
( )
FTSE Russell
Q1 2025 Q1 2024 Variance
%
Index - ETF AUM ($bn):
- Period end 1,434 1,328 8.0%
- Average 1,449 1,255 15.5%
Markets
Q1 2025 Q1 2024 Variance
%
Equities
UK Value Traded (£bn) - average daily value 5.0 3.9 28.2%
Fixed income, Derivatives and Other
Tradeweb average daily volume ($m)
Rates - Cash 558,883 461,826 21.0%
Rates - Derivatives 884,151 798,871 10.7%
Credit - Cash 18,264 17,418 4.9%
Credit - Derivatives 30,427 17,502 73.8%
FX
Average daily total volume ($bn) 522 456 14.5%
OTC Derivatives
SwapClear - IRS notional cleared ($trn) 464 406 14.4%
SwapClear - Client trades ('000) 1,248 912 36.8%
ForexClear - Notional cleared ($bn) 11,113 8,287 34.1%
ForexClear - Members 39 38 2.6%
Securities & Reporting
EquityClear trades (m) 304 268 13.4%
RepoClear - nominal value (€trn) 84.3 74.4 13.3%
Collateral
Average non-cash collateral (€bn) 211.2 197.1 7.1%
Average cash collateral (€bn) 104.8 110.5 (5.2%)
Foreign Exchange
The majority of LSEG revenues are in US dollars followed by sterling, euro and
other currencies. A 10 cent devaluation in the US dollar and euro against
sterling has an adverse impact on Total Income (excl. recoveries) of
approximately 4.5% and 1.5% respectively. The impact on EBITDA is slightly
greater, at approximately 5.0% and 2.0% respectively. These sensitivities are
approximate and exclude the impact of embedded derivatives and other
FX-related balance sheet revaluations.
USD GBP EUR Other
Total Income(1,2) 58% 16% 17% 9%
Data & Analytics(1) 61% 9% 15% 15%
FTSE Russell 72% 20% 3% 6%
Risk Intelligence 62% 9% 16% 13%
Markets 49% 24% 24% 2%
(1 Total income includes recoveries)
(2 Percentage splits based on Q1 2025)
(Due to rounding, income percentages may not add to 100%.)
Spot / Average Rates
Average rate Closing rate at Average rate Closing rate at
3 months ended
31 March 2025
3 months ended
31 March 2024
31 March 2025
31 March 2024
GBP : USD 1.259 1.294 1.268 1.263
GBP : EUR 1.197 1.196 1.168 1.170
( )
Total income and gross profit by quarter
2024 2025
£m Q1 Q2 Q3 Q4 FY Q1
Workflows 479 479 472 480 1,910 493
Data & Feeds 465 472 465 478 1,880 491
Analytics 55 55 55 55 220 59
Data & Analytics 999 1,006 992 1,013 4,010 1,043
Subscription 144 153 156 158 611 156
Asset-Based 74 81 71 81 307 83
FTSE Russell 218 234 227 239 918 239
Risk Intelligence 131 132 131 137 531 143
Equities 60 60 60 56 236 62
Fixed Income, Derivatives & Other 318 317 341 358 1,334 394
FX 61 64 67 66 258 69
OTC Derivatives 138 141 148 155 582 161
Securities & Reporting 62 65 55 53 235 56
Non-Cash Collateral 28 28 28 27 111 27
Net Treasury Income 69 65 66 66 266 65
Markets 736 740 765 781 3,022 834
Other 5 3 2 3 13 2
Total Income (excl. recoveries) 2,089 2,115 2,117 2,173 8,494 2,261
Recoveries 93 92 89 90 364 93
Total Income (incl. recoveries) 2,182 2,207 2,206 2,263 8,858 2,354
Cost of sales (289) (299) (283) (302) (1,173) (308)
Gross Profit 1,893 1,908 1,923 1,961 7,685 2,046
( )
Organic, constant-currency revenue growth by quarter
2024 2025
% Q1 Q2 Q3 Q4 FY Q1
Workflows 1.7% 3.1% 3.2% 3.4% 2.9% 3.4%
Data & Feeds 6.8% 5.5% 6.1% 6.4% 6.2% 6.6%
Analytics 6.5% 3.8% 5.2% 4.2% 4.9% 7.4%
Data & Analytics 4.3% 4.3% 4.6% 4.8% 4.5% 5.1%
Subscription 6.2% 13.2% 13.1% 8.8% 10.3% 8.2%
Asset-Based 16.4% 14.1% 1.8% 16.0% 11.9% 12.5%
FTSE Russell 9.5% 13.5% 9.2% 11.2% 10.9% 9.6%
Risk Intelligence 12.5% 10.4% 10.4% 12.0% 11.3% 10.7%
Equities 1.6% 6.2% 8.5% 2.1% 4.6% 3.1%
Fixed Income, Derivatives & Other 21.3% 27.9% 27.3% 17.2% 23.1% 17.3%
FX (2.2%) 3.9% 12.8% 10.1% 6.1% 12.3%
OTC Derivatives 0.1% 6.6% 18.4% 19.0% 10.8% 16.8%
Securities & Reporting (0.5%) 2.5% (11.1%) (15.9%) (6.3%) (9.8%)
Non-Cash Collateral 6.5% 5.4% 5.3% 2.5% 4.9% (0.4%)
Net Treasury Income (2.6%) (14.7%) (5.5%) (1.5%) (6.3%) (6.3%)
Markets 8.1% 11.4% 15.0% 10.5% 11.2% 10.7%
Other (43.9%) (48.6%) (75.1%) (52.6%) (54.5%) (52.1%)
Total Income (excl. recoveries) 6.4% 7.8% 8.7% 7.7% 7.7% 7.8%
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