TIDMLSE
RNS Number : 2691K
London Stock Exchange Group PLC
21 April 2020
21 April 2020
LONDON STOCK EXCHANGE GROUP plc
TRADING STATEMENT
INCLUDING REVENUES AND KPIs FOR THE THREE MONTHSED
31 MARCH 2020 (Q1)
-- Good Q1 performance against unprecedented market backdrop
-- Q1 total income up 13% year-on-year to GBP615 million, driven
by increased equity trading in Capital Markets and higher clearing
activity across listed and OTC products leading to higher NTI in
Post Trade
-- Resources focused on ensuring strong operational resilience
across the Group's systemically important market infrastructure
platforms and services; Group employees working almost entirely on
a remote basis across all locations
-- Integration planning for Refinitiv transaction progressing
well: CFIUS approval received and anti-trust filings prepared in
multiple jurisdictions; remain committed to achieving completion in
H2 2020
Q1 summary:
-- Information Services: revenues up 7% to GBP215 million - with
8% growth at FTSE Russell. Good growth in both subscription and
asset-based revenues, the latter reflecting growth in ETF AUM in
prior quarter; ETF AUM fell sharply at the end of Q1, reflecting
market turbulence in March
-- Post Trade: income up 17% to GBP271 million, with 11% growth
in LCH revenue, with strong listed and OTC clearing activity,
including record volumes in SwapClear. Good clearing volumes at
CC&G drove a 15% revenue increase. Increased clearing activity
drove higher cash margin, with consequent stronger NTI, up 39% in
LCH and 10% in CC&G
-- Capital Markets: revenues up 15% to GBP112 million,
principally reflecting higher equity secondary markets activity in
London and Milan
-- Technology Services: revenues unchanged at GBP14 million
Update on the Refinitiv transaction
The Group continues to make good progress on planning for the
integration of Refinitiv. A number of workstreams on business
structure and opportunities, including synergy realisation, are
well developed, and the Integration Management Office has been
expanded to bring additional resource to the Group.
The Group also continues to make progress with merger control,
foreign investment and financial regulatory filings. US foreign
investment clearance has been received from CFIUS. Merger control
clearance has been received from Botswana, Japan, Kenya and
Ukraine, and merger control reviews have commenced in several other
jurisdictions. As disclosed last month, the European Commission has
requested a delay to submission of filings by merger parties
generally; the Group continues to work constructively with the
European Commission case team and will file as soon as it is
possible to do so. The Group is committed to completion of the
transaction in H2 2020.
Comment on Q1 and outlook:
LSEG recognises the significant impact of the coronavirus
Covid-19 global pandemic on its employees, customers and other
stakeholders. Employee health and wellbeing has been a key focus.
The vast majority of our employees have been working remotely, and
we continue to adapt our technology and working practices to this
changing environment. LSEG is in regular contact with public health
authorities, governments and stakeholders around the world and will
continue to adjust our response as needed.
As a systemically important financial markets infrastructure
business, LSEG places a high priority on its responsibility to
ensure the orderly functioning of markets and continuity of
services for its customers and other stakeholders. During this
unprecedented period, the Group has prioritised operational
resilience across the Group's Capital Markets, Information Services
and Post Trade businesses.
In light of current circumstances, LSEG regularly assesses the
strength of its balance sheet and stress-tests its liquidity
positions under various market scenarios. The Group strongly
believes it has sufficient cash resources and access to liquidity
to maintain continuity of business and has no need to materially
adjust any its operations or incur significant additional costs. As
at 31 March 2020, the Group had committed facility headroom of over
GBP600 million available for general corporate purposes. Reflecting
the strong 2019 results and ongoing financial strength, the Group
intends to pay its final dividend in relation to the 2019 financial
year, subject to shareholder approval at today's AGM.
While the Group has performed well in Q1, it is too early to
comment specifically on the impact of the coronavirus pandemic on
the outlook for LSEG and its customers for the remainder of the
year. The Group believes the longer-term drivers of growth in each
of its business lines remain intact.
David Schwimmer, CEO said:
"The Group has delivered a good financial performance and strong
operational resilience during this unprecedented period. We have
had a focus on ensuring orderly functioning of markets and
continuity of service to customers across our businesses."
"A key priority has been the health and wellbeing of our
employees around the world. The vast majority of our colleagues are
working remotely as a key element of our business continuity
measures. I've been impressed by their adaptability, resiliency and
commitment to continue to support our customers. Although market
conditions are likely to remain challenging in the coming period,
we believe the Group is financially strong and has the necessary
resources to continue to operate effectively in this
environment."
Further information is available from:
Gavin Sullivan/Lucie Holloway
-
London Stock Exchange Media +44 (0) 20 7797 1222
Group plc Paul Froud - Investor Relations +44 (0) 20 7797 3322
The Group will host a conference call for analysts and investors
today, Tuesday 21 April at 08:30am (UK time). On the call will be
David Schwimmer (CEO), David Warren (CFO) and Paul Froud (Group
Head of Investor Relations).
To access the telephone conference call please pre-register
using the following link and instructions below:
http://emea.directeventreg.com/registration/5831128
-- Please register in advance of the conference using the link
above . Upon registering with your full name, company name and
email address, you will be provided with participant dial-in
numbers, Direct Event passcode and unique registrant ID
-- In the 10 minutes prior to the call start time, you will need
to use the conference access information provided in the email
received at the point of registering
Note: Due to regional restrictions some participants may receive
operator assistance when joining this conference call and will not
be automatically connected.
For further information, please call the Group's Investor
Relations team on
+44 (0) 20 7797 3322.
Q1 Revenue Summary
Revenues for three months ended 31 March 2020, referring to
continuing operations, with comparatives against performance for
the same period last year, are provided below. Growth rates for Q1
performance are also expressed on an organic and constant currency
basis. All figures are unaudited.
Organic
and
Three months ended constant
31 March currency
---------------------
2020 2019 Variance variance(1)
Continuing operations: GBPm GBPm % %
Revenue
Information Services 215 201 7% 6%
Post Trade 192 172 12% 13%
Capital Markets 112 97 15% 16%
Technology 14 14 - -
Other 2 2 - -
----------------------------- ---------- --------- --------- ------------
Total revenue 535 486 10% 10%
Net treasury income through
CCP businesses 79 59 34% 34%
Other income 1 1 - -
---------- --------- ------------
Total income 615 546 13% 13%
----------------------------- ---------- --------- --------- ------------
Cost of sales (60) (56) 8% 9%
---------- ---------
Gross profit 555 490 13% 13%
----------------------------- ---------- --------- --------- ------------
(1) Organic growth is calculated in respect of businesses owned
for at least the full 3 months in either period and excludes Beyond
Ratings. The Group's principal foreign exchange exposure arises
from translating and revaluing its foreign currency earnings,
assets and liabilities into LSEG's reporting currency of
Sterling
The Euro weakened by 1% against Sterling compared with the same
period last year while the US $ strengthened by 2%. To illustrate
our exposure to movements in exchange rates, a EUR0.05 change in
the average euro:sterling rate would have resulted in a change to
continuing operations total income of cGBP8 million for Q1, while a
US$0.05 move would have resulted in a cGBP7 million change.
More detailed revenues by segment are provided in tables
below:
Information Services
Organic
and
Three months ended constant
31 March currency
---------------------
2020 2019 Variance variance(1)
GBPm GBPm % %
Revenue
Index - Subscription 105 99 6% 6%
Index - Asset based 58 52 12% 9%
FTSE Russell 163 151 8% 7%
---------------------------- ---------- --------- --------- ------------
Real time data 25 24 3% 4%
Other information services 27 26 2% 1%
Total revenue 215 201 7% 6%
---------------------------- ---------- --------- --------- ------------
Cost of sales (17) (17) - -
---------- ---------
Gross profit 198 184 7% 6%
---------------------------- ---------- --------- --------- ------------
(1) Removal of Beyond Ratings from Other information services
(acquired June 2019)
Note: UnaVista previously reported in Other information services
is now reported in Post Trade, historical comparators have been
adjusted to reflect this
Post Trade
Three months ended Constant
31 March currency
---------------------
2020 2019 Variance variance
GBPm GBPm % %
Revenue
OTC - SwapClear, Forex &
CDSClear 82 76 8% 9%
Non OTC - Fixed income,
Cash equities & Listed derivatives 41 34 21% 22%
Other 26 24 7% 7%
Total LCH revenue 149 134 11% 12%
------------------------------------- ---------- --------- --------- ---------
Clearing 12 11 15% 17%
Settlement, Custody & other 15 14 6% 7%
Total Post Trade Italy revenue 27 25 10% 12%
------------------------------------- ---------- --------- --------- ---------
UnaVista 16 13 22% 22%
Total revenue 192 172 12% 13%
------------------------------------- ---------- --------- --------- ---------
LCH - Net treasury income 67 48 39% 39%
CC&G - Net treasury income 12 11 10% 12%
Total income 271 231 17% 18%
------------------------------------- ---------- --------- --------- ---------
Cost of sales (39) (35) 14% 15%
---------- ---------
Gross profit 232 196 18% 19%
------------------------------------- ---------- --------- --------- ---------
Capital Markets
Three months ended Constant
31 March currency
---------------------
2020 2019 Variance variance
GBPm GBPm % %
Revenue
Primary Markets 32 28 13% 14%
Secondary Markets - Equities 49 37 33% 33%
Secondary Markets - Fixed
income, derivatives and
other 31 32 (3%) (2%)
Total revenue 112 97 15% 16%
------------------------------ ---------- --------- --------- ---------
Cost of sales (1) (1) - -
---------- ---------
Gross profit 111 96 16% 17%
------------------------------ ---------- --------- --------- ---------
Technology Services
Three months ended Constant
31 March currency
---------------------
2020 2019 Variance variance
GBPm GBPm % %
Total revenue 14 14 - -
--------------- ---------- --------- --------- ---------
Cost of sales (2) (2) - -
---------- --------- --------- ---------
Gross profit 12 12 - -
--------------- ---------- --------- --------- ---------
Basis of Preparation
Results for the period ended 31 March 2019 have been translated
into sterling using the average exchange rates for the period.
Constant currency growth rates have been calculated by translating
prior period results at the average exchange rate for the current
period.
Average rate Average rate
Closing rate Closing rate
3 months ended at 3 months ended at
31 March 2020 31 March 2020 31 March 2019 31 March 2019
GBP : EUR 1.16 1.12 1.15 1.16
GBP : USD 1.28 1.24 1.30 1.30
--------------- -------------- --------------- --------------
Appendix - Key performance indicators
Information Services
As at
31 March Variance
-----------------
2020 2019 %
ETF assets under management
benchmarked ($bn)
FTSE 359 398 (10%)
Russell Indexes 224 256 (13%)
----------------------------- ---------
Total 583 654 (11%)
----------------------------- ------- -------- ---------
Terminals
UK 64,000 67,000 (4%)
Borsa Italiana Professional
Terminals 98,000 105,000 (7%)
Note: FTSE ETF assets under management benchmarked KPI has been
rebased to remove previously reported active ETFs. The previous
year comparator has also been adjusted, with a change of $15
billion
Post Trade - LCH
Three months ended
31 March Variance
---------------------
2020 2019 %
LCH OTC derivatives
SwapClear
IRS notional cleared ($tn) 402 318 26%
SwapClear members 123 119 3%
Client trades ('000) 565 411 37%
CDSClear
Notional cleared (EURbn) 776 352 120%
CDSClear members 26 26 -
ForexClear
Notional value cleared
($bn) 5,405 4,311 25%
ForexClear members 34 34 -
LCH Non-OTC
Fixed income - Nominal
value (EURtn) 51.6 52.4 (2%)
Listed derivatives contracts
(m) 104.2 72.8 43%
Cash equities trades (m) 558 362 54%
LCH average cash collateral
(EURbn) 115.9 91.1 27%
Note: CDSClear notional cleared and LCH Non-OTC volumes have
been rebased to count both sides of each cleared trade. This aligns
with how activity is reported on LCH's website. The previous year
comparator has also been adjusted
Post Trade - Italy
Three months ended
31 March Variance
---------------------
2020 2019 %
CC&G Clearing
Contracts (m) 38.9 25.0 56%
Initial margin held (average
EURbn) 14.3 13.7 4%
Monte Titoli
Settlement instructions
(trades m) 13.8 10.7 29%
Custody assets under management
(average EURtn) 3.34 3.29 2%
Capital Markets - Primary
Markets
Three months ended
31 March Variance
---------------------
2020 2019 %
New Issues
UK Main Market, PSM &
SFM 12 10 20%
UK AIM 6 5 20%
Borsa Italiana 1 7 (86%)
----------
Total 19 22 (14%)
--------------------------- ---------- --------- ---------
Money Raised (GBPbn)
UK New 0.4 0.5 (20%)
UK Further 2.3 3.0 (23%)
Borsa Italiana new and
further - - -
Total (GBPbn) 2.7 3.5 (23%)
--------------------------- ---------- --------- ---------
Capital Markets - Secondary Markets
Three months ended
31 March Variance
---------------------
Equity 2020 2019 %
Totals for period
UK value traded (GBPbn) 390 294 33%
Borsa Italiana (no of
trades m) 27.3 15.6 75%
Turquoise value traded
(EURbn) 166 163 2%
SETS Yield (basis points) 0.68 0.68 -
Average daily
UK value traded (GBPbn) 6.1 4.7 30%
Borsa Italiana (no of
trades '000) 427 248 72%
Turquoise value traded
(EURbn) 2.6 2.6 -
Derivatives
Contracts (m) 9.2 9.1 1%
Fixed Income
MTS cash and BondVision
(EURbn) 786 836 (6%)
MTS money markets (EURbn
term adjusted) 30,829 28,809 7%
Note: The Q1 2019 number of derivative contracts includes 0.8
million from LSE Derivatives. This service no longer accepted new
trades from November 2019
Total Income - Quarterly
2019 2020
GBP millions Q1 Q2 Q3 Q4 2019 Q1
----- ----- ----- ----- ------ -----
Index - Subscription 99 104 108 107 418 105
Index - Asset based 52 60 61 58 231 58
FTSE Russell 151 164 169 165 649 163
Real time data 24 24 24 25 97 25
Other information 26 27 27 29 109 27
---------------------------------------
Information Services 201 215 220 219 855 215
OTC - SwapClear, ForexClear &
CDSClear 76 72 80 79 307 82
Non OTC - Fixed income, Cash equities
& Listed derivatives 34 35 36 35 140 41
Other 24 25 28 26 103 26
--------------------------------------- ----- ----- ----- ----- ------ -----
Post Trade Services - LCH 134 132 144 140 550 149
Clearing 11 11 11 10 43 12
Settlement, Custody & other 14 15 16 15 60 15
--------------------------------------- ----- ----- ----- ----- ------ -----
Post Trade Services - CC&G and
MT 25 26 27 25 103 27
UnaVista 13 12 10 12 47 16
------
Post Trade 172 170 181 177 700 192
Primary Markets 28 62 30 31 151 32
Secondary Markets - Equities 37 37 39 38 151 49
Secondary Markets - Fixed income,
derivatives & other 32 30 33 29 124 31
--------------------------------------- ----- ----- ----- ----- ------ -----
Capital Markets 97 129 102 98 426 112
Technology 14 16 16 20 66 14
Other 2 2 2 3 9 2
Total Revenue 486 532 521 517 2,056 535
Net treasury income through CCP:
LCH 48 48 53 57 206 67
CC&G 11 13 12 13 49 12
Other income 1 1 1 - 3 1
Total income 546 594 587 587 2,314 615
--------------------------------------- ----- ----- ----- ----- ------ -----
Cost of sales (56) (53) (58) (43) (210) (60)
Gross profit 490 541 529 544 2,104 555
--------------------------------------- ----- ----- ----- ----- ------ -----
Note: UnaVista previously reported in Other information services
is now reported in Post Trade, historical comparators have been
adjusted to reflect this
This information is provided by RNS, the news service of the
London Stock Exchange. RNS is approved by the Financial Conduct
Authority to act as a Primary Information Provider in the United
Kingdom. Terms and conditions relating to the use and distribution
of this information may apply. For further information, please
contact rns@lseg.com or visit www.rns.com.
END
TSTPPUWCCUPUPGU
(END) Dow Jones Newswires
April 21, 2020 02:00 ET (06:00 GMT)
London Stock Exchange (LSE:LSEG)
Historical Stock Chart
From Mar 2024 to Apr 2024
London Stock Exchange (LSE:LSEG)
Historical Stock Chart
From Apr 2023 to Apr 2024
