London Stock Exchange Group plc · LSE:LSEG
London Stock Exchange — Investor Day (October 2021)
76 slides from London Stock Exchange's investor day presentation, Oct 1, 2021
Slide 1: London Stock Exchange Group Investor Education Event
London Stock Exchange Group Investor Education Event – 1 October 2021
Slide 2: Today's event
Today’s event – Introduction David Schwimmer, CEO – Investment Solutions Lea Carty, Group Head of Investment Solutions – Wealth Solutions Sabrina Bailey, Group Head of Wealth Solutions – Capital Markets Murray Roos, Group Head, Capital Markets – FX Solutions Neill Penney, Group Head of FX – Q&A 2
Slide 3: Strong and experienced business leadership
Strong and experienced business leadership Investment Wealth Capital Markets Foreign Exchange Solutions Solutions £1.1bn £0.5bn £1.2bn £0.23bn 2020 pro-forma revenue 2020 pro-forma revenue 2020 pro-forma revenue 2020 pro-forma revenue Solutions for investment product Solutions for wealth advisory, G
Slide 4: Good H1 performance - executing on integration and synergies
Good H1 performance - executing on integration and synergies Good financial results – All divisions reporting strong revenue growth Integration and – Cost synergy programme progressing ahead of target and Revenue synergies on track synergy programme on target Strong financial position – Strong cash
Slide 5: Serving the entire value chain with virtuous circle
Serving the entire value Data & chain – with virtuous circle Analytics of connected products and Data Analytics services Distribution Benefits of combination with LSEG – scalable platforms, operational efficiencies and delivery of synergies Investment programme to support new platforms and technolog
Slide 6: Clear priorities to drive growth
Clear priorities to drive growth – Product development across businesses and market segments 1 Focus on execution – Optimising customer offerings and using Group-wide capabilities and distribution Enhance the – Improved technology and platforms to provide better services 2 customer experience – Tail
Slide 7: Data & Analytics: 4-6% p.a. revenue growth in the medium term
Data & Analytics: 4-6% p.a. revenue growth in the medium term LSEG Data & Analytics (Pro Forma) Historic Growth Growth performance(1) of TAM ambition Data & Analytics +1-3% +4-6% +4-6% Enterprise +4-5% +4-6% Mid single digit Data Solutions Trading & (1-2)% +2-4% Low single digit Banking Solutions Cu
Slide 8: Investment Solutions
Investment Solutions Lea Carty
Slide 9: Overview of our business
Overview of our business $68 LSEG
Slide 10: We serve customers across the entire investment ecosystem
We serve customers across the entire investment ecosystem Our core businesses Aligned to Delivered at scale to a customer communities broad range of customers Data ‒ 40,000+ data & Enterprise Data Solutions Asset owners analytics customers in We collect, aggregate and 190 countries manage risk-relat
Slide 11: What does our business do?
What does our business do? What we provide Who we provide it to How we commercialise Solutions that power the development, The global investing ecosystem, including: our offering execution and communication of investment We generate recurring revenue through: strategies, including: ‒ Asset owners ‒
Slide 12: A rapidly evolving and growing investment industry
A rapidly evolving and growing investment industry Trends driving growth in the market Our segment in 2025 Growth in global investable assets £11-12bn | +5-7% 2025 estimated TAM(2) | 2020-25 CAGR Advancing data and technology Our segment in 2020 Industry cost pressures and fee £8.0-9.5bn compression
Slide 13: Our portfolio of businesses – Investment Solutions
Our portfolio of businesses – Investment Solutions Benchmark Rates, Indices & Analytics Data & Workflow Subscription Index – Asset-based Commercial Recurring revenue for benchmark Revenue that fluctuates in line with Recurring subscription revenue for data and software that is rates, indices and ana
Slide 14: A diversified base of high-quality recurring revenues
A diversified base of high-quality recurring revenues Investment Solutions FY 2020 revenues £1.1bn(1) High proportion of recurring revenues Global footprint Diverse revenue stream 63% Americas 45% Benchmark Rates, Indices & 99.8% recurring Analytics – Subscription 29% EMEA 0.2% non-recurring 20% Ind
Slide 15: Driving long-term sustainable growth
Driving long-term sustainable growth Factors driving growth: Investment Solutions revenues: Data & Workflow 2018-2020 H1 21 vs. – Technology and content innovation CAGR % H1 20 % for Quantitative analytics and content – Modest Eikon growth while investing in +4% CAGR +8% Workspace – Lipper business
Slide 16: Competitive advantages
Competitive advantages $68 LSEG
Slide 17: Our competitive advantages
Our competitive advantages We have a strong base …generating powerful differentiators 1. Global technology and data platform – Only leading multi-asset class index and sophisticated analytics firm with the customer reach, with distribution and customer reach data and technology required to distribut
Slide 18: We create market standards used throughout the investment ecosystem
We create market standards used throughout the investment ecosystem Key decision makers Key decision-makers select agreed upon market Asset owners standards for the performance and risk characteristics of their desired investment strategies – These market standards are defined by our benchmark Imple
Slide 19: WM/Refinitiv FX Benchmark Rates: independent, objective benchmark rates
WM/Refinitiv FX Benchmark Rates: independent, objective benchmark rates that are trusted and fundamental components of market infrastructure Key decision makers Asset The trusted choice in FX rates for marking owners global assets to market – Use cases include fund valuation, reporting, trade Implem
Slide 20: FTSE Russell and Pricing & Referencing Services: A powerful revenue synergy
FTSE Russell and Pricing & Referencing Services: A powerful revenue synergy Our reference data is now the key input to FTSE Russell Fixed Income Multi-Asset Class Indices, making our reference data essential for customers We can now go to market with a combined index and reference data solution Comm
Slide 21: Strong Sustainable Investment credentials underpin opportunities
Strong Sustainable Investment credentials underpin opportunities across our business – 450 ESG metrics for 10,000+ companies across bonds Competitive advantages in and equities Scale and breadth – Green Revenues data on 16,000 companies in 133 Sustainable Investment micro-sectors – 20 years of exper
Slide 22: Delivering on our growth plan
Delivering on our growth plan
Slide 23: Our priorities to achieve above market growth
Our priorities to achieve above market growth – Continued execution on new product development 1 Focus on execution – Utilise LSEG’s global distribution to optimise customer engagement – Workspace and Data Platform to provide an integrated customer Enhance the 2 customer experience experience – Acce
Slide 24: #1 Focus on execution
#1 Focus on execution Now to 2022 – Green Impact Bond Indices, Paris-aligned climate benchmarks, Frontier EM Government Bond Continued execution – Sustainable Investment Index, digital asset indices on new product – Launch of flagship Russell US ESG Indices development – Workspace – Integrated ESG a
Slide 25: #2 Enhance the customer experience
#2 Enhance the customer experience Now to 2022 Mid-term – ongoing – Fixed Income analytics and data in Workspace Workspace and Data – FTSE Russell indices on Workspace and delivered via Platform for an – Broadening distribution the Group’s Data Platform integrated customer – Deeper integration exper
Slide 26: #3 Prioritise synergies and growth through targeted investment
#3 Prioritise synergies and growth through targeted investment – Innovative sustainable investment models Focus on high-growth – Provide solutions for Direct Indexing areas – Fixed Income and Multi-Asset (FIMA) indices and analytics – FIMA indices and PRS synergies enable cross-sell and up-sell oppo
Slide 27: In summary
☐ Portfolio of high-quality businesses, providing multi-asset class investment In summary solutions to the global investment community ☐ Deep customer relationships throughout the investment ecosystem, creating a strong network effect ☐ Well-positioned for macro trends supporting this market ☐ Clear
Slide 28: Wealth Solutions
Wealth Solutions Sabrina Bailey
Slide 29: Overview of our business
Overview of our business $68 LSEG
Slide 30: What our business does
What our business does What we provide Who we provide it to How we commercialise our offering Solutions that power the wealth The wealth management community management process, including: around the globe, including: We generate revenue through a mix of: ‒ Advisor & Investor Services ‒ Banks (priva
Slide 31: A diversified base of high-quality revenues
A diversified base of high-quality revenues Diverse revenue sources Global footprint Diverse wealth services revenues 56% recurring 78% Americas 56% Advisor & Investor Services (Wealth Data & Analytics) 44% non-recurring 11% EMEA 44% Operations Management 11% APAC (BETA) Note: Revenue refers to pro-
Slide 32: We serve customers across the wealth management ecosystem
We serve customers across the wealth management ecosystem Our core businesses Aligned to Delivered at scale to a customer communities broad range of customers Data We collect, aggregate and manage risk-related data from Enterprise Data Solutions − Power 180,000 Banks (private advisors across open so
Slide 33: Facilitating trusted connections between wealth managers and their clients
Facilitating trusted connections between wealth managers and their clients Across our wealth businesses we: Provide workflows, Support flexible delivery Provide interoperable content, analytics and models services across front-to- operational services back processing Building trusted relationships G
Slide 34: Our delivery is highly configurable to meet clients needs
Our delivery is highly configurable to meet clients needs WEALTH MANAGEMENT FIRMS Chief Digital Officer Chief Information Officer Head of Wealth Chief Operating Officer “I need content and analytics to “I need content and analytics “I need a full experience “I need back-office operations power my we
Slide 35: A rapidly evolving and growing industry
A rapidly evolving and growing industry Trends driving growth in the market Our market segment in 2025 £11-12bn | +5-7%(1) Advancing digital technology 2025 estimated TAM(2) | 2020-25 CAGR Our addressable segment in 2020 £8-9bn Demand for hyper-personalisation FY 2020 TAM Rise of self-directed inves
Slide 36: A diversified portfolio of businesses
A diversified portfolio of businesses Advisor & Investor Services Operations Management Addressable market segment £5.4-6.0bn £2.7-3.1bn Segment growth 5-7% 3-5% LSEG position Improving Competitive – Digital transformation of customer experience – Changes in regulation Market trends – Focus on susta
Slide 37: Majority of business delivering growth, offset by decline in platform business
Majority of business delivering growth, offset by decline in platform business Wealth Solutions revenues: Key drivers Advisor & Investor Services 2018-2020 H1 21 vs. (Wealth Data & Analytics) CAGR % H1 20 % ‒ 3-year revenue decline reflects previous underinvestment in legacy platform +2% CAGR +1% (T
Slide 38: Competitive advantages
Competitive advantages $68 LSEG
Slide 39: Our competitive advantages
Our competitive advantages We have a strong base …generating powerful differentiators 1. Global scale and flexibility of our delivery – Ability to leverage Q1-21 launch of Workspace for Wealth to accelerate global growth mechanisms – Service of wealth customers globally with consistent platform, con
Slide 40: Targeted investment is furthering competitive advantage
Targeted investment is furthering competitive advantage We are focused on… And delivered in 2021… Delivering more personalised insights Integration of firm’s proprietary investment – Enhancing advisor efficiency so they can focus on information with market data and news clients Driving stronger conn
Slide 41: Delivering on our growth plan
Delivering on our growth plan
Slide 42: Our priorities to accelerate growth
Our priorities to accelerate growth Focus on – Improve product through stronger customer engagement 1 execution – Optimise offering to better respond to customers’ shifting need Enhance the – Improve customer workflow tools to drive business efficiency 2 customer experience – Create a more flexible
Slide 43: #1 Focus on execution: Customer engagement driving revenue growth
#1 Focus on execution: Customer engagement driving revenue growth Customer needs Our response Key differentiators “I need to have access to the latest investment – Responded to customer’s request for a fully hosted, Web-based insight and data to ensure premium support of information insight solution
Slide 44: #1 Focus on execution: delivering on a customer-centric roadmap
#1 Focus on execution: delivering on a customer-centric roadmap Now – 2022 Mid-term – ongoing ✓ Launched Workspace for Wealth globally − Deliver personalised wealth insights, powered by data ✓ Launched self-directed investor solution for customers − Incorporate advanced workflows and predictive anal
Slide 45: #2 Enhance customer experience: investing in client-centric services
#2 Enhance customer experience: investing in client-centric services We deliver flexible services to meet client-specific needs via APIs, widgets or fully hosted services CONTENT (power behind personalisation and control) Data platform Client data layer + Interoperable services Interoperable service
Slide 46: #3 Prioritise growth and adjacencies
#3 Prioritise growth and adjacencies − Focus on continued improvement of Workspace workflows to deliver a seamless, global solution Focus on higher growth segments − Increase global footprint with focused, strategic expansion into APAC and Europe − Enhance partnerships structured to deliver locally
Slide 47: Growth plan summary: key initiatives
Growth plan summary: key initiatives Now – 2022 Mid-term and beyond – Enhance user experience across our platforms Focus on – Deliver expanded solutions across the value chain 1 execution – Provide proactive customer upgrade transition support – Improve discoverability and transparency of data Enhan
Slide 48: In summary
☐ Accelerate growth by leveraging investments across the broader Data & Analytics division e.g., Workspace, content, analytics In summary ☐ Invest in higher-growth areas, including Advisor & Investor Services and continued APAC and Europe expansion ☐ Deliver on business adjacencies related to Invest
Slide 49: Capital Markets
Capital Markets Murray Roos $8 LSEG
Slide 50: Overview of our business
Overview of our business $68 LSEG
Slide 51: A global multi-asset Capital Markets business
A global multi-asset Capital Markets business What we provide Who we provide it to How we commercialise our offering ‒ Capital raising through Primary ‒ Corporates Markets operated by London Stock ‒ Primary Markets Exchange ‒ Funds – Admission fees – Main Market ‒ Sovereigns – Annual charge for issu
Slide 52: Capital Markets sets up the value chain for LSEG
Capital Markets sets up the value chain for LSEG Capital Formation & Issuance Pre-Trade & Liquidity Discovery Trade Execution Post-Trade & Capital Optimisation Private Public Issuance & Investment Reference Pre-Trade Price & Trade Execution Clearing Settlement Reporting Post-Trade Placements Issuer
Slide 53: We are a market operator enabling trading and capital raising globally
We are a market operator enabling trading and capital raising globally across asset classes We have powerful differentiators… … resulting in leading market positions – 200+ year heritage – Leading European exchange for money raised in H1(1) – Deep pools of international capital – More international
Slide 54: Our global footprint positions us well to provide services across multiple customer segments
Our global footprint positions us well to provide services across multiple customer segments Most global listing venue with issuers from 100+ countries Most global FX trading venue with presence in over 130 countries and over 80 currency pairs offered Leading global Issuer location (country) fixed i
Slide 55: A significant and growing contributor to LSEG's financial performance
A significant and growing contributor to LSEG’s financial performance Capital Markets revenues: Factors contributing to performance Equities 2018-2020 H1 21 vs. Capital Markets contributes 18% of Group income(1) CAGR % H1 20 % ‒ 2020 Covid-19 volatility and increase in capital raises driving uplift,
Slide 56: We operate a scalable business with network effects
We operate a scalable business with network effects − Common technology, including trading platforms We derive scale benefits from common − Customer connectivity and member onboarding infrastructure, − Operations and compliance processes and expertise − Regulatory engagement Integration of the FX −
Slide 57: Capital Markets drives value across LSEG
Capital Markets drives Data & value across LSEG Analytics Data Analytics Distribution Post Capital Trade Trading information and Markets workflow integration 57
Slide 58: In summary
☐ Capital Markets is a market operator enabling securities trading and capital raising globally across asset classes In summary ☐ We have a leading market position in equities, FX and fixed income ☐ We are growing strongly with the potential for further growth ☐ We have significant scale and a stron
Slide 59: Foreign Exchange
Foreign Exchange Neill Penney
Slide 60: Overview of our business
Overview of our business $68 LSEG
Slide 61: Introduction to FX
– LSEG is a market leader in FX, with several key differentiators: Introduction to FX – Unique product capabilities – Unrivalled global footprint and quality of customer base – Strength of overall end-to-end offering across LSEG’s divisions – Brand strength – In recent years, parts of the business h
Slide 62: A market-leading FX business with global presence
A market-leading FX business with global presence What we provide Who we provide to How we commercialise Solutions that provide electronic trading to The whole institutional FX market: our offering the institutional foreign exchange FXall community ‒ Banks ‒ Banks pay brokerage fees on FXall is a De
Slide 63: Our business generates diversified revenues
Our business generates diversified revenues Participation in all segments of the FX Market Global footprint(1) Multiple revenue types 45% Banks & Broker/Dealers 53% EMEA 62% FXall revenue 27% Asset Managers 30% Americas 24% Matching revenue 17% Corporates 17% APAC 14% Matching Data revenue 12% Hedge
Slide 64: A day in the life of an FX trade
A day in the life of an FX trade 1. Requirement to 2. GBP-USD trade 3. Bank A hedges trade trade GBP-USD executed over FXall in Matching with Bank B FXall Matching Asset Manager Bank Trader A Bank Trader B 4. Matching trade becomes market data Matching Data 5. Matching Data used as a reference for f
Slide 65: LSEG's FX capabilities provide end-to-end solutions for customers
LSEG’s FX capabilities provide end-to-end solutions for customers LSEG solves four main problems for its FX customers: ‒ Trading: ability for customers to access their counterparties and trade at competitive prices FXall Matching ‒ Workflow: tools to help customers organise their Trading Trading Pla
Slide 66: Significant growth opportunities
Significant growth opportunities Market leading scale in both FXall and Matching FX is the world’s largest market by volume traded (2) − The highest volume FX trading platform provider at Global FX Market $446bn average per day $6.6 trn/day − Our FX network is comprised of 2,400 buy-side customers a
Slide 67: Evolving markets drive growth
Evolving markets drive growth FX turnover continues to grow, Customers are moving from directly Customers continue to migrate trading from with companies executing increasing trading with their banks towards voice to electronic amounts of FX specialised solutions such as FXall Daily Foreign Exchange
Slide 68: We are positioned to accelerate growth in FXall and return Matching to growth
We are positioned to accelerate growth in FXall and return Matching to growth FXall Foreign Exchange revenues: 2018-2020 H1 21 vs. ‒ A strong product in a growing part of the CAGR % H1 20 % market ‒ Highly quality customer base helps us -1% CAGR -1% launch new capabilities ‒ Increased investment wil
Slide 69: Our competitive advantages
Our competitive advantages We have a strong base … generating powerful differentiators 1. Industry leading network and global relevance – The highest volume FX trading platform provider at $446bn average per day – Network is comprised of 2,400 buy-side customers and 300 banks – We sit on eight key C
Slide 70: Delivering our growth plan
Delivering our growth plan $68 LSEG
Slide 71: Growth plan summary
Growth plan summary 1 Accelerate FXall growth 2 Pursue currently available Matching opportunities 3 Transform Matching using LSEG Technology 71
Slide 72: New technology driving growth in FXall
New technology driving growth in FXall Case study: LCH's ForexClear integration – More sophisticated execution – Regulators are driving changes that will increase adoption of FX clearing by buy-side management, workflow and users (eg Uncleared Margin Rules) analytics – To help companies transition t
Slide 73: Partnering with customers to enhance Matching
Partnering with customers to enhance Matching Case study: FX Swaps – FX Swaps are the largest single FX product traded by volume – Matching is the market leading dealer-to- dealer platform for FX Swaps – Enhanced ultra-low latency data feed (2020) – Currently, this is traded manually, but banks Purs
Slide 74: Creating a platform for future growth in dealer to dealer
Creating a platform for future growth in dealer to dealer Case study: NDFs – Non-Deliverable Forwards (NDFs) are an important part of the FX market in countries with In the short term: currency exchange restrictions. Usage of NDFs is growing – Enhance core Matching offering – Our customers have been
Slide 75: In summary
☐ LSEG is a market leader in FX ☐ Growth of the business is underpinned by multiple competitive advantages: In summary – Unrivalled global footprint and quality of customer base – Unique product capabilities in FXall – Strength of overall end-to-end offering across LSEG’s divisions – Acknowledged in
Slide 76: Contacts and further information
Contacts and further information Paul Froud London Stock Exchange Group plc Group Head of Investor Relations 10 Paternoster Square Tel: +44 (0)20 7797 1186 London email: paul.froud@lseg.com EC4M 7LS Chris Turner Investor Relations Director For investor relations information: Tel: +44 (0)77 6993 1614
London Stock Exchange Group — Investor Day (October 2021) on 6ix