LondonStockExGroup - Trading Statement

London Stock Exchange

01/05/2025 07:00

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
 £m
Q1 2024
 £m
Variance %
Constant currency variance %
Organic constant currency
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 & Analyticswas 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
Workflowswas 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 & Feedswas 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
Analyticswas 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 Russellwas 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 Intelligencewas 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.
·
Marketswas 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
Equitieswas 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 & Otherwas 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
FXwas 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 Derivativeswas 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 & Reportingwas 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 Collateralwas broadly unchanged at (0.4)%, with mix effects limiting the benefit from higher collateral balances.
o
Net Treasury Incomewas down (6.3)% reflecting the reduction in cash balances following last year's loss of business from Euronext.
·
Group cost of saleswas up 7.2%, slightly below the growth rate in revenue reflecting business mix and the partially fixed nature of the costs.
·
Gross profitwas 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

 

To ask a question live you will need to register for the telephone conference call here:

https://registrations.events/direct/LON201413

 

 

Contacts: London Stock Exchange Group plc
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

Subscriptions1

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 Income1,2
58%
16%
17%
9%
Data & Analytics1
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
 3 months ended
 31 March 2025
Closing rate at
 31 March 2025
Average rate
 3 months ended
 31 March 2024
Closing rate at
 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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