London Stock Exchange Group Plc – Half Year Announcement

LONDON STOCK EXCHANGE GROUP PLC

INTERIM RESULTS FOR THE 6 MONTHS ENDED 30 JUNE 2020

Unless otherwise stated, all figures below refer to continuing operations for the six months ended 30 June 2020 (H1 or H1 2020).  Comparative figures are for continuing operations for the six months ended 30 June 2019 (H1 2019). 

• Good financial and operational performance in H1 drives 11% increase in AEPS
• Further good income growth in Information Services and Post Trade; resilient underlying result in Capital Markets
• Strong operational resilience across the Group's trading, clearing and data platforms during unprecedented period; majority of employees continue to work remotely
• Group in strong financial position; confidence in future prospects supports increase in the interim dividend (up 16%) to 23.3 pence per share
• Good progress with foreign investment, antitrust and other regulatory approvals for the Refinitiv transaction, a nd integration planning is well developed; the Group expects to close the transaction by the end of the year or in early 2021

H1 Summary

• Total Revenue up 4% to £1,058 million (H1 2019: £1,018 million); total income up 8% to £1,235 million (H1 2019: £1,140 million)
• FTSE Russell revenue up 5% to £330 million (H1 2019: £315 million) with growth in subscription revenues and flat asset-based revenues reflecting lower ETF AUM levels
• Post Trade revenue up 9% to £372 million (H1 2019: £342 million), driven by strong growth in LCH; record activity in CDS, FX and cash equities clearing; total income up 19% to £548 million (H1 2019: £462 million), mainly reflecting higher cash margin held
• Capital Markets revenue down 4% on a reported basis to £217 million, and up 12% on a like-for-like basis excluding the one-off benefit of an IFRS 15 adjustment in prior year
• Adjusted operating expenses, before depreciation and amortisation¹, were up 8% (up 5% on a constant currency basis) and up 1% compared with H2 2019
• Adjusted operating profit¹ up 8% to £575 million (H1 2019: £533 million); operating profit was down 2% at £391 million (H1 2019: £399 million); profit before tax of £362 million (H1 2019: £363 million); profit after tax of £261 million (H1 2019: £265 million)
• Adjusted EBITDA¹  margin broadly unchanged at 54.6% (2019 H1: 54.5%)
• Adjusted EPS¹ up 11% to 112.0 pence (H1 2019: 100.6 pence); basic EPS down 9% at 64.6 pence (H1 2019: 70.7 pence)
• Strong balance sheet position with leverage at 1.4 times net debt: pro forma EBITDA

Commenting on performance for the period, David Schwimmer, CEO said:

“The Group has delivered a good financial performance and demonstrated strong operational resilience.  During this unprecedented period, we have focused on ensuring the welfare of our employees and on continuity of services to our customers, maintaining access to our markets and clearing venues, with record volumes executed across our services. 

“We are making good progress on the proposed transaction with Refinitiv, securing a number of regulatory approvals and engaging constructively with authorities on remaining approvals.  We also continue to make good progress on integration planning to ensure we are ready to deliver the benefits of the transaction to our shareholders, customers and other stakeholders.  We expect to close the transaction by the end of the year or in early 2021.” 

Organic growth combined with new product development and investment continued throughout the period.  Highlights include:

Information Services

• FTSE Russell announced a 10-year extension to a global index derivatives agreement with Cboe Global Markets to develop and list options based on FTSE Russell indices
• FTSE Russell launched a series of co-branded fixed income indices in partnership with Johannesburg Stock Exchange and new index derivatives launched by Singapore Stock Exchange using FTSE Russell indices

Post Trade

• LCH SwapClear became the first clearing house to clear Singapore Dollar swaps benchmarked to alternative reference rate Singapore Overnight Rate Average (SORA)
• LCH EquityClear went live with a new LSEG Technology post trade platform, processing record equity clearing volumes in March 2020
• UnaVista approved by ESMA to be a trade repository under Securities Financing Transactions Regulation (SFTR)

Capital Markets

• £19.8 billion equity capital raised across new and further issues up 29%, with 17% increase in value traded across venues
• China Pacific Insurance Group (CPIC) listed GDRs in London on Shanghai-London Stock Connect, the largest capital raise via an admission to London Stock Exchange in 2020 to date, raising US$2 billion
• London Stock Exchange celebrated the 25^th anniversary of AIM, the London Stock Exchange's growth market, with over 3,800 companies admitted since launch, raising £118 billion in equity capital