TIDMLSEG
RNS Number : 5364J
London Stock Exchange Group PLC
27 April 2022
LONDON STOCK EXCHANGE GROUP PLC
Annual General Meeting
Wednesday 27 April 2022
Good morning, everyone. Welcome to London Stock Exchange Group's
Annual General Meeting.
I'm pleased to resume our annual meeting in-person this year and
thank you for your understanding over the last couple of years.
Let me begin by introducing my colleagues here today, from your
left to your right: Erin Brown, Ashok Vaswani, Martin Brand, Tsega
Gebreyes, Cressida Hogg, David Schwimmer, Lisa Condron, Dominic
Blakemore, Anna Manz, Kathleen DeRose, Val Rahmani and Jacques
Aigrain. Unfortunately, Douglas Steenland could not be here today
due to a pre-existing commitment.
This is the first AGM for Tsega Gebreyes and Ashok Vaswani who
joined the Board in June 2021 as Independent Non-Executive
Directors, bringing their deep financial services and commercial
experience to the Group.
In August, Stephen O'Connor, stepped down from the Board and as
Chair of the Risk Committee and we are very grateful to him for his
significant contribution to the Group over the past eight
years.
Jacques Aigrain also steps down today having served nine years
on the board. LSEG has come a long way since you joined, Jacques
and I would like to thank you for the valuable role you have played
in the Group's success both as a director and, until recently,
Chair of the Remuneration Committee.
Today, I'd like to make a few comments on the past year and also
on the year ahead. I will then hand over to David Schwimmer, Group
CEO, who will give a brief overview of the Group's performance,
strategy and outlook.
2021 was a very important milestone for LSEG following the
completion of the acquisition of Refinitiv. We are now a leading
global financial markets infrastructure and data provider across
the trading lifecycle, well positioned for long-term sustainable
growth.
We are committed to working in partnership with our customers,
and this will remain a fundamental pillar of our multi-year
business strategy to accelerate our growth and increase
scalability.
The Board is pleased with the progress of the Refinitiv
integration and the delivery against our financial targets.
We recognise the importance of meeting your expectations and
delivering long-term shareholder value. I'm pleased to report that
LSEG delivered another strong financial performance across all
three business divisions in 2021.
Total income was up 6.1% to GBP6.8 billion and adjusted earnings
per share up 46%, reflecting the benefits of incorporating
Refinitiv. We maintain a strong financial position with good cash
generation supporting strategic investment and product development,
and we have proposed a final dividend of 70 pence per share,
representing a total dividend of 95 pence per share, up 27%.
Consistent with our capital allocation framework, we have also
announced plans for a share buyback, starting in Q3, while
continuing to support organic and inorganic growth opportunities
and maintaining our leverage ratio within the target range of 1-2x
net debt to EBITDA.
Building on the Group's strong performance in 2021, I am also
pleased to share our Q1 2022 results, which we announced this
morning.
The Group has delivered a good first quarter with strong
underlying performance across all divisions. Total income
(excluding recoveries) rose 6.3% to GBP1.8 billion driven by new
business growth and high customer retention.
Now, before taking any questions on the business of the meeting,
I would like to invite David to provide an update on the Group's
performance and strategic priorities.
Thank you, Don.
Firstly, let me make a brief comment on LSEG's response to the
war in Ukraine.
We have taken a number of actions including suspending all
products and services for all customers in Russia; deleting Russian
securities from our FTSE Russell indices; and suspending trading in
a number of stocks listed on the London Stock Exchange.
We are also focused on supporting the safety and wellbeing of
impacted colleagues to ensure they have the assistance that they
need.
As Don said, we have made excellent progress on the Refinitiv
integration.
Let me remind you of the deal's strategic rationale and its
benefits:
-- Prior to last year, we had a primarily European footprint; we are now truly global.
-- Prior to last year, we were an important but niche provider
of index data & fixed income analytics; today we are one of the
world's leading providers of financial data & analytics.
-- Prior to last year, our trading businesses were primarily in
equities; today we are a leading provider of execution venues in
equities, fixed income and foreign exchange.
We are focused on improving the customer experience and bringing
rigour to how we run the business.
We have brought our sales functions together, simplifying the
structure. We have also invested in capabilities that make us more
responsive to our customers. This has led to record retention rates
and high quality recurring revenues.
We are also improving how we execute across the business,
operations and technology and are embedding a commercially focused
culture.
The natural linkages across the Group are our real strength and
are driving opportunities for our customers.
A few examples -
-- Our data and execution businesses are mutually reinforcing.
Executions on our venues generate data; that data informs market
participants as they execute additional trades.
-- Yield Book is now available to thousands more customers through Refinitiv's distribution.
-- And, we have substantially improved the data and analytics we
make available to issuers on the London Stock Exchange.
We are investing in our content, products and workflow. We are
roughly a quarter of the way through the roll out of Workspace.
Our ongoing migration of services to the cloud and
simplification of our data platform is improving our offering. As a
result, we added over 230 new customers to our cloud-based real
time data service in 2021.
With these investments in technology and infrastructure, we are
building a more agile and efficient operating platform for the
future.
Our cost synergies are ahead of schedule with GBP151 million run
rate achieved in 2021, up from the GBP88 million originally
forecast. And we have announced an additional GBP50 million cost
synergies, increasing the 5-year target to total savings of at
least GBP400 million per year.
We have reduced our debt faster than planned, including through
the disposal of the Borsa Italiana Group.
We are also beginning to realise revenue synergies. For example,
our pricing and reference data is now used in FTSE Russell's fixed
income indices construction, allowing us to sell customers our
index product and the corresponding reference data.
Our EBITDA margin improved by 1.9% in 2021 with good cost
control, and we are on track for our 5-year plan for revenue
synergies, with around 25% of our target synergy-related products
launched in 2021. We expect to achieve GBP40-60m of run-rate
revenue synergies this year.
Our business benefits from being aligned to long-term industry
trends, as well as ongoing regulatory change. Our customers are
looking for efficiency and simplicity, with fewer but deeper
relationships with key partners.
We are seeing growing demand for sustainable finance investment
data and analytical tools, and we are embedding these services
throughout our business. We are also taking a leadership role in
our own approach to sustainability.
To this end, our three strategic sustainability priorities
are:
-- accelerate the transition to net zero;
-- enable the growth of the green economy; and
-- create inclusive economic opportunity.
Last month, we were also pleased to publish our own Climate
Transition Plan, outlining how we will reduce our carbon footprint
to Net Zero by 2040, and we have put this report as resolution for
your approval at today's meeting.
LSEG has the right combination of capabilities and assets that
position us as a key partner to help our customers navigate trends
across the financial markets value chain.
We are also creating shareholder value through strategic
M&A. In recent months, we have announced the acquisitions of
TORA, GDC and Quantile, further improving our capabilities.
In March, we also announced the sale of BETA, while entering
into a strategic partnership that positions our Wealth business for
further growth.
You should expect us to continue to make strategic investments
to strengthen and grow our customer offering.
In summary, LSEG is well positioned for the current environment
with growth across our businesses; we are likely to benefit from
additional volatility or economic uncertainty. We recognise the
customer and societal demand for sustainable finance data. We are
improving an already strong operating margin. We are investing and
building for the future while being highly disciplined in how we
use our capital.
Looking ahead, we are continuing to execute our multi-year
strategy of integration, growth and scalability. The Executive
Committee & I look forward to delivering on our strategic
objectives and creating value for all our stakeholders.
Further information is available from:
London Stock Exchange Group plc
Lucie Holloway, Rhiannon Davies
(Media) +44 (0)20 7797 1222
Paul Froud (Investors) ir@lseg.com
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END
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