London Stock Exchange Group Plc · LSE:LSEG
London Stock Exchange — H1 2023 Earnings Presentation
39 slides from London Stock Exchange's earnings presentation, Aug 3, 2023
Slide 1: H1 2023 financial results
2 * H1 2023 financial results Ast
Slide 2: Delivering on our growth potential
Delivering on our growth potential Strong and broad-based growth: * Total income (excl. recoveries) up 7.9% * Accelerating growth in Q2: total income (excl. recoveries) +8.4% (Q1 +7.5%) * All divisions contributing to growth: -— Data & Analytics +7.6% all businesses growing well — Capital Markets +1
Slide 3: Strong growth and continued transformation
Strong growth and» continued transformation . Anna Manz, CFO
Slide 4: Strong H1 growth; confidence in full year outlook
Strong H1 growth; confidence in full year outlook Strong and sustained growth EBITDA margin reflecting growth investments Strong cash flow, funding investment and capital returns 2023 guidance unchanged
Slide 5: Strong revenue and EBITDA growth in H1
Strong revenue and EBITDA growth in H1 sm H1 2023 H1 2022 Growth Conese currency growth Total income (excl. recoveries) 3,990 3,569 11.8% 7.9% Adjusted EBITDA 1,872 1,799 4.1% 5.8% Adjusted EBITDA margin 46.9% 50.4% Adjusted EBITDA margin excl. 47.7% 48.8% non-cash FX gains/losses Adjusted operating
Slide 6: FX items and tax rate impacting on AEPS
FX items and tax rate impacting on AEPS £m H1 2023 H1 2022 Growth Adjusted operating profit 1,418 1,408 0.7% Adjusted net finance expense (63) (81) (22.2%) Adjusted tax expense (321) (262) 22.5% Adjusted effective tax rate 23.7% 19.7% Adjusted profit for the period 1,034 1,065 (2.9%) Adjusted profit
Slide 7: Strong and sustained growth across divisions
Strong and sustained growth across divisions £m 7.9% growth 19.2% 7.6%! 1.5% a H1 2022! Data & Capital Post Analytics Markets Trade Growth rates on a constant currency basis unless otherwise noted 4, Total income excluding recoveries 2. Includes the impact of other revenues FX & other? H1 2023!
Slide 8: All Data & Analytics businesses performing well
All Data & Analytics businesses performing well £m 7.6% growth H1 2022! Trading & Enterprise 6.1% 5.8% 18.02 eee 26 Pe te) —<—< a7 29 . /O Investment Wealth Customer & Solutions Solutions Third-Party Banking Data Growth rates on a constant currency basis, unless otherwise noted, 1. Total income excl
Slide 9: Continuing strong momentum in our Data & Analytics businesses
Continuing strong momentum in our Data & Analytics businesses Trading & Banking Enterprise Data Investment Solutions Record customer Strong demand for proprietary Strong subscription satisfaction realtime data growth: Q2 at 9.5% Improved retention Accelerating revenue Accelerating asset-based amplif
Slide 10: Retention, sales and price driving strong ASV growth
Retention, sales and price driving strong ASV growth 6.9% +390bps increase since acquisition 5.4% 3.9% March H1 H2 H1 H2 H1 2021 2021 2021 2022 2022 2023 IB ASV growth rate IB impact of Ukraine/Russia conflict Annual subscription value (ASV) growth is a constant currency pointin-time year-on-year or
Slide 11: Capital Markets: ongoing strength in Fixed Income
Capital Markets: ongoing strength in Fixed Income £m 1.5% growth cE | -10.9% 1.9% H1 2022! Equities FX Fixed Income, FX H1 2023! Trading Derivatives & Other Equities: Market conditions FX Trading: Lower Fixed Income, Derivatives & Other: impacting primary and market volumes; growth Record transactio
Slide 12: Post Trade: outstanding H1 performance; building innovative industry solutions
Post Trade: outstanding H1 performance; building innovative industry solutions £m H1 2022! OTC Derivatives OTC Derivatives: Strong client activity driven by global interest rate uncertainty Growth rates on a constant currency basis, unless otherwise noted. 4, Total income 19.2% growth 19.4% 1.8% 7.9
Slide 13: Operating expenses: 6.1% organic cost growth
Operating expenses: 6.1% organic cost growth £m 3.4% 99 3.0% a 31% a H1 2022 Ongoing Investment Acquisitions FX adj. base operating for growth! costs 4, Comprises investment in technology modernisation, increasing cloud usage, costs of product development as part of the Microsoft partnership, costs
Slide 14: EBITDA margin on track to deliver in line with guidance
CORPORATE EBITDA margin on track to deliver in line with guidance 48.8% i +0.1% (1.2%) H1 2022 Announced Underlying H1 2023 adj. margin! _ investments? business adj. margin? performance 1. _H12022 margin adjusted to remove the impact of the non-cash FX-related balance sheet adjustment of £59m, 2. An
Slide 15: Non-underlying items mainly relate to Refinitiv integration
Non-underlying items mainly relate to Refinitiv integration sm H1 2023 H1 2022 Adjusted operating profit 1,418 1,408 Transaction costs (64) (24) Integration & restructuring costs (119) (136) Profit on disposal & remeasurement gains 69 156 Amortisation & impairment of purchased intangible assets (570
Slide 16: Strong free cash flow
Strong free cash flow 175 £m 1,249 — ‘ (24) H12023 Depreciation, Other Working H12023 _— Net interest Other Taxes Profit from amortisation, items! capital Operating & royalties dividends, paid continuing impairments cash flow paid net operations 1. _ Includes share-based payments and P&L charges for
Slide 17: Deploying our strong cash flow for growth and shareholder returns
Deploying our strong cash flow for growth and shareholder returns Acquisitions Significant progress in organic investment strategy Completion of Acadia acquisition Broad capital . o. Capex deployment in Dividends Interim dividend of 35.7p H1 2023 per share, up 12.6% £400m of the on-market share buyb
Slide 18: Higher target leverage range of 1.5 - 2.5x reflects improving earnings quality
Higher target leverage range of 1.5 - 2.5x reflects improving earnings quality Delivery on the Recurring, subscription revenues Strong cash flow and Refinitiv acquisition disciplined capital allocation De-levered >12 months 72% faster than original Robust cash generation timeline 43% Returning surpl
Slide 19: All 2023 guidance unchanged; more positive outlook on income
CORPORATE All 2023 guidance unchanged; more positive outlook on income Total income (excl. recoveries): EBITDA margin: BAU capex: Revenue synergies: Cost synergies: 4. Excluding the Acadia acquisition, on a constant currency basis 2. Based on GBP:USD of 1.21 and GBP:EUR of 1.4, includes Microsoft an
Slide 20: Strong H1 growth; confidence in full year outlook
Strong H1 growth; confidence in full year outlook Strong and sustained growth EBITDA margin reflecting growth investments Strong cash flow, funding investment and capital returns 2023 guidance unchanged
Slide 21: Driving the transformation of our business
Driving the transformation of our business 4 David Schwimmer, CEO = : , Te Pal A
Slide 22: Driving the transformation of our business
Driving the transformation of our business We’re capitalising on key trends... .. and transforming our business * Data significantly more valuable * Customers automating workflows * Increasing focus on regulation and reputational risk * Trading increasingly borderless * Rising need for risk manageme
Slide 23: Delivering exceptional performance across the Group
1 Delivering exceptional performance across the Group Data & Analytics Capital Markets Post Trade Total income’ H1 2023 total income excluding recoveries Data & Analytics: * Accelerating growth; almost double that of H1 2022 * >4% growth in Trading & Banking, following a decade of decline ¢ Winning
Slide 24: Converting robust customer demand into strong sales performance
Converting robust customer demand into strong sales performance Sales cycles remain firm Consistent with previous quarters Deals are 15% larger year-over-year Driven by our solution- focused sales approach We are winning more mandates Win-rates up 700 bps since Refinitiv acquisition SOR LSEG .
Slide 25: Case study — creating value by partnering with HSBC
Case study — creating value by partnering with HSBC By replacing product-level agreements with an enterprise-wide agreement we are: Annual savings Driving growth Account growing $30m if >A Creating cost benefits for ..driving growth ..and generating attractive the customer... for both parties... eco
Slide 26: Enterprise Data — our data is becoming more valuable
Enterprise Data — our data is becoming more valuable Growing at 10% in H1 Historical data ever more critical in decision-making Used together, our proprietary datasets drive additional value Virtuous circle: historical data driving demand for real-time 4, Packet capture data is a more granular form
Slide 27: Workspace — entering a new era of data & analytics workflow
Workspace — entering a new era of data & analytics workflow Customer satisfaction! Expanding functionality: 130 new Providing features implemented in H1 powerful analytics Excellent customer feedback Ease of sharing Full launch with Microsoft in news/analysis H2 2024 Functionality . . . across multi
Slide 28: The AI is only as good as the quality of the data
The Al is only as good It’s vital that customers Customers have to be Customers need to as the quality of the have confidence in the able to audit the have immense trust in data it’s trained on... integrity of the data... lineage of the data... their data provider... es OO ee 28
Slide 29: We are already leveraging the power of AI technology
We are already leveraging the power of Al technology Enhancing customer productivity Using Al tools to create more powerful, efficient and intuitive workflow solutions: * AiEX * Advanced Dealing *« Workspace Driving more valuable insight Leveraging our data and expertise to develop proprietary Al-po
Slide 30: Advanced Dealing — changing the face of FX trading
Advanced Dealing — changing the face of FX trading 7 . With an Advanced Dealing workflow solution Replacing our decades old “Dealing” product Cloud-based FX trading environment on industry-standard technology Integrated with Workspace; providing real-time news and insights * “Swivel-chair” workflow;
Slide 31: Microsoft partnership — building strong momentum
CORPORATE Microsoft partnership — building strong momentum Hundreds of people working in cross-company product development teams Microsoft Fabric data platform fuelled by LSEG’s financial markets intelligence First enhanced Workspace functionality in development Design Partner Programme with major c
Slide 32: Transformation well under way
Transformation well under way Well positioned in growing markets Investing in our high-quality assets to drive growth Innovating to enhance our customer offering Significant value creation opportunity with Microsoft
Slide 33: Slide 33
Slide 34: Appendix
Appendix
Slide 35: Key performance indicators for H1 2023
CORPORATE Key performance indicators for H1 2023 n ASV growth Subscription ESG AUM®?) ETF AUM (average) Oo revenue growth” 5 $311bn $1,079bn Z O +6.9% @O +6.0% OQ x19% A) +1% . TRADEWEB ADV 2 4 UK Equity ADV FX ADV Rates - Derivatives Credit - Cash EY £3.9bn $453bn << $469bn $t1bn 2 OQ 26% G “4% Os
Slide 36: Currency and regional breakdown
CORPORATE Americas EMEA Asia USD GBP EUR Other USD GBP EUR Other
Slide 37: Currency exposure
CORPORATE USD GBP EUR Other USD GBP EUR Other USD GBP EUR Other
Slide 38: Quarterly revenue progression
CORPORATE Quarterly revenue progression &m a Q2 Q3 a4 2022 a Q2 H12023 Trading & Banking Solutions 378 391 a7 426 1,612 425 42 837 Trading 298 308 330 339 1,275, 336 325 661 Banking 80 83 87 87 337 89 87 176 Enterprise Data Solutions’ 303 317 332 354 1,306 347 357 704 Real-Time Data! 194 202 212 229
Slide 39: Contacts and further information
Contacts and further information Peregrine Riviere Group Head of Investor Relations Tel: +44 (0)7 977 379 063 | Email: peregrine.riviere@lseg.com Chris Turner Investor Relations Senior Director Tel: +44 (0)7 769 931 614 | Email: chris.turner@lseg.com Neha Kasabia Investor Relations Director Tel: +44
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