London Stock Exchange Group - Final Results
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LONDON STOCK EXCHANGE GROUP PLC
PRELIMINARY RESULTS FOR THE YEAR ENDED 31 DECEMBER 2019
Unless stated otherwise, all figures in the highlights below refer to 12 months to 31 December 2019 and comparisons with the prior 12 month period on the same basis.
- Strong financial performance - revenue growth continues across our businesses as the Group continues to invest successfully for growth
- Acquisition of Refinitiv will accelerate the Group's growth strategy and position as a global financial markets infrastructure leader - increasing its global footprint and adding leading data and analytics and multi-asset class capital markets capabilities
- Detailed integration planning underway to ensure delivery of Refinitiv transaction benefits; regulatory approvals processes ongoing and on track for completion in H2 2020
2019 Financial Highlights
- Total revenue and total income both up 8% to £2,056 million (2018: £1,911 million) and £2,314 million (2018: £2,135 million) respectively
- FTSE Russell delivered 10% revenue growth (up 6% on a constant currency basis)
- LCH OTC revenues up 15% (up 13% on a constant currency basis) driven by record SwapClear volumes with over $1.2 quadrillion of notional cleared
- Cost of sales decreased 8%, in part driven by an updated SwapClear agreement with partner banks delivering a more than £30 million reduction in the year
- Continued cost discipline, operating expenses (excluding depreciation and amortisation)1 up only 1%, helped by achievement of cost savings; total costs up 7% reflecting higher depreciation and amortisation mainly arising from increased capital investment
- Adjusted operating profit2 up 14% to £1,065 million (2018: £931 million); operating profit down 2% to £738 million (2018: £751 million); adjusted EBITDA2 up 19% to £1,265 million (2018: £1,066 million) and EBITDA margin of 54.7%
- Adjusted EPS2 up 15% to 200.3 pence (2018: 173.8 pence); basic EPS down 14% to 119.5 pence (2018: 138.3 pence)
- Proposed final dividend of 49.9 pence per share, resulting in a 16% increase in the full year dividend to 70.0 pence per share, reflecting good performance and confident outlook for the Group
Continued organic and inorganic development, including:
- Acquisition of Beyond Ratings, a provider of Environmental, Social and Governance (ESG) data for fixed income investors
- FTSE Russell launched Climate WGBI, an innovative government bond index incorporating climate risk factors
- Record volumes reported by all LCH OTC clearing services - SwapClear, CDSClear, ForexClear and RepoClear
- LCH continues to facilitate migration to alternative reference rates and was the first CCP to launch clearing for €STR swaps
- ForexClear launched the clearing of deliverable FX Forwards
- Acquisition of a 4.92% minority stake in Euroclear with a seat on the Board, strengthening the commercial relationship between the businesses
- Capital Markets launched Shanghai-London Stock Connect with Huatai Securities as its first issuer
- Capital Markets launched the Green Economy Mark, enabling investors to identify issuers that generate 50% or more of their revenues from green initiatives; and the Sustainable Bond Market, a new dedicated segment for social and sustainability bonds
1 Before depreciation, amortisation and non-underlying items.
2 Before amortisation of purchased intangible assets and non-underlying items.
Organic growth is calculated in respect of businesses owned for at least 12 months in either period and so 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.
Commenting on performance for the year, David Schwimmer, CEO, LSEG said:
"It was another strong year for London Stock Exchange Group - delivering a good financial performance, making meaningful progress executing on our strategic objectives, and taking significant steps on a number of Group-wide initiatives. The Group continued to perform well, navigating an evolving macroeconomic and geopolitical landscape and remains well positioned for the future. We continue to partner with our customers to develop innovative services in a range of areas, from reference rate reform to sustainable investment.
"Our proposed acquisition of Refinitiv, a leading provider of data, analytics and financial markets services, will significantly accelerate our strategy to be a leading global financial markets infrastructure provider. Refinitiv brings highly complementary capabilities in data, analytics and capital markets as well as deep customer relationships across a global business. Detailed integration planning is underway to ensure we are ready to deliver the benefits of the transaction to our shareholders, customers and other stakeholders. We remain on track to close the transaction in the second half of this year."