London Stock Exchange Group plc · LSE:LSEG
London Stock Exchange — Investor Day (2023)
16 slides from London Stock Exchange's investor day presentation, 2023
Slide 1: Accelerating growth and improving profitability
Accelerating growth and improving profitability Anna Manz, CFO
Slide 2: Today's key messages
Today’s key messages Strong track record of Medium term guidance: performance: delivering accelerating growth and against all our targets improving margins, capital intensity to moderate, with full cash conversion Robust cash generation – Revised reporting announcing £1bn of share structure to bette
Slide 3: Strong performance against our long-term targets
Strong performance against our long-term targets Total income EBITDA Revenue Cost Leverage growth margin synergies synergies Target 5-7% 50% >£225m >£350m 1.0–2.0x 2020PF - 2023 CAGR by exit 2023 run rate by end run rate by end within 24 months of 2025 of 2025 of completion Progress Income growth1 O
Slide 4: Medium term guidance: accelerating growth, good cash conversion
Medium term guidance: accelerating growth, good cash conversion Revenue EBITDA Margin Capex1 Cash Conversion Mid to high single Underlying Remain around Cumulative free digit organic margin to increase current levels of cash flow to C C C C growth annually, over time 11-12% of revenue exceed underly
Slide 5: Multiple growth drivers
Multiple growth drivers Revenue C Secular growth trends Strategic combination: Smarter New Geographic and LSEG + Refinitiv pricing product market expansion Revenue synergy Monetising investment Organic and inorganic Geographical expansion opportunities in existing products e.g. investment to expand
Slide 6: We will continue to invest for growth, reinvesting efficiencies
We will continue to invest for growth, EBITDAC Margin reinvesting efficiencies… 3,200 3,100 3,000 2,900 2,800 2,700 2,600 2,500 Prior period Inflation / Volume Investment for growth Efficiencies Current period Driving incremental revenue opportunities 2024 - final year of incremental benefit from co
Slide 7: Potential for margin improvement over time is clear
…and the potential for margin improvement over time is clear EBITDAC Margin 2022 EBITDA Margins Capital Markets & Post Trade are scaled businesses with margins in line with industry averages 52% 52% 51% 48% Opportunity to improve our 45% Data & Analytics margin: – Common data platform – Data and con
Slide 8: Significant investment will continue but intensity will moderate
Significant investment will continue but intensity will moderate Capex Capex profile 12.6% Investing ahead of peers due to: 11.5% – Historic underinvestment £184m – Capex related to cost and revenue synergies £109m – Investing for new capabilities £750m £750m £671m 2024: Capital intensity at 11-12%
Slide 9: Cash conversion will improve as Refinitiv integration costs cease
Cash conversion will improve as Refinitiv Cash Conversion C integration costs cease Refinitiv integration costs Over halfway through the Refinitiv integration related costs £86m £184m Remaining spend incurred over 2024 £103m – 2025, improving cash conversion in 2026 £205m £109m £98m Cumulative free
Slide 10: Investing today's cash generation proactively for future value
Investing today’s cash generation proactively for future value Excess capital Capex Proactively returned Capital intensity moderating to shareholders in medium term M&A Dividends Enhancing our value Updated progressive proposition policy 10
Slide 11: M&A focus: enhancing LSEG's value proposition across the trade lifecycle
M&A focus: enhancing LSEG’s value proposition across the trade lifecycle Value accretive to the Group… … and a compelling strategic rationale Scalability of the opportunity Building out functionality Opportunity cost versus organic development Deal structures to incentivise performance Expanding New
Slide 12: Attractive financial returns for investors
Attractive financial returns for investors Updated progressive dividend policy… …and returning excess capital to shareholders 2.5x – 3.0x cover ratio (c.33% – 40% £1.5bn returned since August last year pay-out based on full-year AEPS) Announcing a further £1bn of share Interim dividend to be ~1/3 of
Slide 13: Revised reporting structure to better reflect our business
Revised reporting structure to better reflect our business D&A structure Trading & Enterprise Data Wealth Investment Customer and to date Banking Solutions Solutions Solutions Third-Party Risk Future structure1 Data & Analytics FTSE Russell Risk Intelligence 2022 revenues: £3.7bn 2022 revenues : £78
Slide 14: In summary
In summary Strong track record of performance: delivering against all our targets Medium term guidance: Disciplined capital accelerating growth, allocation with a improving profitability further £1bn share and full cash conversion buybacks in 2024 14
Slide 15: Summary
Summary
Slide 16: Leading franchises across all our businesses
Leading franchises Growing with the best across all our of our peer group businesses Increasing profitability, Partner of choice across strong cash generation for the financial markets value-accretive growth and value chain shareholder returns 16