Close Menu
    Thursday, January 23
    Stock Market

    London Stock Exchange Group Reports Q3 2024 Trading Update

    9 Mins Read


    Outlook 2016: Alexander Lehmann, LSEG

    Strong Q3 performance, extending our track record of broad-based growth; further strategic progress
    David Schwimmer, CEO said:

    “We delivered a particularly strong quarter, with healthy growth in our subscriptions business and very strong performance in our high-quality volume-based businesses.

    “We are executing successfully on our strategy, delivering multiple new products in Q3. The ongoing transformation of our business with faster product innovation and more powerful solutions is driving higher user engagement and better outcomes for our customers. Our partnership with Microsoft continues to make strong progress and our product timetable is on track.

    “We are confident of continued growth as we look forward to 2025.”

    Q3 2024 highlights

    (All growth rates on an organic constant currency basis unless otherwise stated)

    • Strong growth: Total income (excl. recoveries) +9.5% constant currency and +8.7% organic
    • All divisions contributing to growth: Data & Analytics +4.6%, FTSE Russell +9.2%, Risk Intelligence +10.4%, Capital Markets +22.4%, Post Trade +4.8%
    • ASV growth in-line with guidance: Period-end ASV growth of +6.0% consistent with guidance; continue to expect ASV growth to remain around 6% for the rest of the year
    • High cadence of product innovation: Launched global cloud-based DataScope offering, new Main Market for UK equities, multiple Workspace enhancements, SOFR futures clearing for FMX
    • Product development with Microsoft progressing well: On track to deliver against our product timetable
    • Acquiring 8.3% of LCH Group, taking ownership to 94.2%: Agreement to acquire further minority interest in LCH Group for €433 million

    This release contains revenues, cost of sales and key performance indicators (KPIs) for the three months ended 30 September 2024 (Q3). Constant currency variances are calculated on the basis of consistent FX rates applied across the current and prior year period (GBP:USD 1.243 GBP:EUR 1.150).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. Certain columns and rows may not add due to the use of rounded numbers for disclosure purposes.

    Q3 2024 summary

    (Commentary on performance is on an organic constant currency basis, unless otherwise stated)

    Q3 2024
    £m    		 Q3 2023
    £m    		 Variance % Constant currency variance % Organic constant currency variance %
    Workflows 472 465 1.5% 3.2% 3.2%
    Data & Feeds 465 443 5.0% 6.1% 6.1%
    Analytics 55 55 0.0% 5.2% 5.2%
    Data & Analytics 992 962 3.1% 4.6% 4.6%
     
    Subscription 156 141 10.6% 13.1% 13.1%
    Asset-based 71 73 (2.7%) 1.8% 1.8%
    FTSE Russell 227 214 6.1% 9.2% 9.2%
     
    Risk Intelligence 131 123 6.5% 8.5% 10.4%
     
    Equities 60 55 9.1% 8.5% 8.5%
    Fixed Income, Derivatives & Other 341 259 31.7% 35.3% 27.3%
    FX 67 61 9.8% 12.8% 12.8%
    Capital Markets 468 375 24.8% 27.7% 22.4%
     
    OTC Derivatives 148 125 18.4% 18.4% 18.4%
    Securities & Reporting 55 64 (14.1%) (11.1%) (11.1%)
    Non-cash collateral 28 27 3.7% 5.3% 5.3%
    Net treasury Income 66 70 (5.7%) (5.5%) (5.5%)
    Post Trade 297 286 3.8% 4.8% 4.8%
     
    Other 2 7 (71.4%) (75.1%) (75.1%)
    Total income (excl. recoveries) 2,117 1,966 7.7% 9.5% 8.7%
    Recoveries 89 88 1.1% 2.6% 2.6%
    Total income (incl. recoveries) 2,206 2,054 7.4% 9.2% 8.4%
    Cost of sales (283) (282) 0.4% 3.8% 3.6%
    Gross profit 1,923 1,772 8.5% 10.0% 9.2%

    Total income (excluding recoveries) was up 9.5% including M&A, and 8.7% on an organic basis.

    • Data & Analytics was up 4.6% reflecting continued strong retention, good sales and a contribution from pricing consistent with the first half.
      • Workflows was up 3.2%, with particular strength in FX, commodities and banking users. The continuous improvement to our offering is resonating with customers, reflected in good retention, sales and competitive displacements. We remain on track to sunset Eikon in the first half of next year.
      • Data & Feeds was up 6.1%, driven by continued innovation and expansion in both our Real Time and Pricing and Reference Services. We launched Snowflake access to our leading DataScope product in Q3, with further expansion into other cloud environments to follow. The first datasets in our Data as a Service (DaaS) initiative entered into external pilot in Q3, with broader customer availability anticipated by year end.
      • Analytics was up 5.2%, primarily driven by growth in Yieldbook’s fixed income analytics and loan data.
    • FTSE Russell was up 9.2%. Subscription revenues remained strong, growing 13.1%, driven by demand for flagship equity indices and benchmarks. Growth in asset-based revenues, up 1.8%, slowed sequentially mainly due to adverse mix effects but also reflecting the termination of an ETF contract in the period. FTSE Russell added Asian and European interest rate benchmarks to LSEG’s ecommerce platform in Q3, demonstrating its continued innovation and natural linkages with the broader group.
    • Risk Intelligence was up 10.4% driven by strong business momentum and customer demand in our screening business, World-Check.
    • Annual Subscription Value (ASV): Period-end organic ASV growth was 6.0%, consistent with guidance. We saw a small incremental impact from Credit Suisse cancellations in the quarter. As previously communicated, we continue to expect ASV growth to remain around 6% for the rest of the year.
    • Capital Markets was up 22.4%, with positive growth across all venues and a particularly strong contribution from Tradeweb.
      • Equities was up 8.5% as the LSE continued to gain share against a backdrop of strong market activity. July saw the successful launch of the new Main Market, helping to ensure the continued competitiveness of the UK market.
      • Fixed Income, Derivatives & Other was up 27.3% with another record quarter for Tradeweb. Strong institutional client activity drove growth in interest rate revenues, supported by Tradeweb’s innovative trading protocols and an uncertain macroeconomic outlook. Credit volumes also grew strongly reflecting increased client adoption of execution tools like request-for-quote (RFQ) and portfolio trading. Tradeweb continues to increase its share of US investment grade and high yield trading, reaching 17.7% and 7.8% respectively. In August Tradeweb closed the acquisition of the corporate money market platform Institutional Cash Distributors (ICD), adding Corporates as a fourth client channel alongside Institutional, Wholesale and Retail.
      • FX was up 12.8% as the elevated market volatility and geopolitical uncertainty in the quarter supported growth in both interbank volumes on Matching and dealer-to-client volumes on FXall.
    • Post Trade was up 4.8% with very strong volume-driven growth at SwapClear more than offsetting the impact from completion of the Euronext migration in the quarter. As previously highlighted, the Euronext exit will have a greater impact on Q4 growth. Net treasury income was unchanged from the previous quarter, with collateral levels stabilising after recent declines. In September, LCH entered into the clearing of SOFR futures, supporting FMX’s launch in the space.
    • Group cost of sales was up 3.6%, below the growth rate in revenue reflecting business mix and the partially fixed nature of the costs.
    • Gross profit was up 9.2%, with growth slightly ahead of total income (excl. recoveries) as a result of the lower growth in cost of sales.

    Capital allocation

    In September, LSEG agreed to acquire an additional 8.3% of LCH Group from minority shareholders for €433 million. This will take LSEG’s ownership of LCH Group to 94.2%. The transaction is expected to close shortly.

    Also in September, we successfully raised c.£575 million across two debt instruments as part of the ongoing financing of the group: a €600 million bond and a $100 million private placement, with coupons of 2.75% and 4.00% respectively and 3-year maturities.

    Source: LSEG

    LSEG and Dun & Bradstreet Expand Access to Private Markets Data, Essential for Driving Impact in Capital Markets

    Increased visibility on financial information to drive enhanced investment opportunities

    LSEG (London Stock Exchange Group) and Dun & Bradstreet announced a multi-year strategic collaboration to broaden access to private market information. The combination of LSEG’s capital markets data, including deals, private equity, news and research, with Dun & Bradstreet’s trusted private market data providing visibility on officers and directors, ownership insights and financial information for millions of companies globally, will enable investment and capital market firms to drive better data-driven financial assessments and decisions.

    This strategic relationship also offers the ability to enhance content discoverability of data areas, including Ownership & Shareholder Information and Officers and Directors data, as well as the opportunity to further work together to develop new connected private market data sets to optimize capital market use cases.

    The industry-recognized Dun & Bradstreet D-U-N-S® Number, a unique nine-digit identifier for over a half billion public and private companies, will now be available to LSEG Workspace’s large customer community and therefore increase its reach into the capital markets as a new and expanding vertical. Using the D-U-N-S Number as the key to unlock data about a business, LSEG’s Workspace users will be able to easily search for private company data and download the data to improve mapping, discoverability and interoperability of content on global public and private companies. The D-U-N-S Number provides linkage across business relationships, employees, and subsidiaries, enabling users of LSEG Workspace to gain a better view of an enterprise’s corporate structure, ownership and financial health.

    “With growing demand for access to private company data, specifically financial information, LSEG has been working to expand our offering,” said Debbie Lawrence, Group Head of D&A Data Strategy and Management, LSEG. “This strategic relationship will provide unprecedented access to private company financial data, enhancing our already strong offering for the banking community and beyond. It will also support our customers in making informed decisions with the added flexibility in how they choose to receive and use the data.”

    “The collaboration with LSEG marks a new era in providing technology-powered transparency to private firm analysis. Together, we bring the power of our market-leading data assets to help capital market participants make more informed decisions, especially across the private markets,” said Brian Filanowski, General Manager, Finance & Risk Solutions and Capital Markets at Dun & Bradstreet. “With the exponential growth of private markets, Dun & Bradstreet plays a critical role providing more clarity and insights to help investors manage risk and discover new investment opportunities.”

    LSEG is also working with Dun & Bradstreet to develop a new private market data feed, which is expected to be available for customers in 2025, as the companies continue to explore additional use cases and distribution opportunities together. 

    Source: LSEG





    Source link

    Share.

    Related Posts

    Leave A Reply