London Stock Exchange Group Plc – Preliminary Results 2017

·    Continued execution of strategy driving strong operational and financial performance – deployment of capital for acquisitions and organic investment to drive multiple growth opportunities

·    Strong financial results – headline growth across all core business divisions – Information Services, Post Trade and Capital Markets – underpins confidence in delivery of three-year financial targets

·    Well positioned to drive further growth as a diversified, global financial markets infrastructure business – operating on an Open Access basis in partnership with customers

2017 Highlights

·    Total revenue up 17% to £1,768 million (2016: £1,515 million)

·    Total income up 18% to £1,955 million (2016: £1,657 million) 

·    FTSE Russell delivered 33% revenue growth (up 15% on an underlying basis); LCH OTC revenues up 21% (up 17% on an underlying basis)

·    Adjusted operating expenses² up 6% on an organic and constant currency basis reflecting continued investment in growth and efficiency projects

·    Adjusted operating profit³ up 18% at £812 million (2016: £686 million); operating profit up 47% at £626 million (2016: £427 million); adjusted EBITDA² up 19% at £915 million (2016: £771 million)

·    Adjusted EPS³ up 19% at 148.7 pence (2016: 124.7 pence); basic EPS of 153.6 pence (2016: 63.8 pence)

·    Proposed final dividend increased to 37.2 pence per share – a 19% increase in the full year dividend to 51.6 pence per share – reflecting the strong outlook for the Group

·    Capital management continues in-line with policy: £200 million share buyback completed; new medium term debt with €1 billion Eurobond issuance to support further growth and leverage reduced to 1.7 times

·    New initiatives and achievements in the year include:

–      SwapAgent started new service providing efficiencies for non-cleared products

–      CurveGlobal making good progress one year on from launch and investing for next stage developments

–      Completed acquisitions of The Yield Book and Mergent, further building data and analytics capabilities in our Information Services businesses

–      Increased shareholding in LCH Group to 65.9% (up from 57.8%); expect to acquire a further 2% in March 2018

–      Strong flow of IPOs in London and Italy helped companies raise over £44 billion in new and further issues

–      Turquoise Block Discovery saw 600% rise in  total value traded to €54.5 billion as customers started to adjust their trading strategies ahead of MiFID II

·    Good progress on recruitment of new CEO with a strong field of high quality candidates

¹ Continuing operations exclude businesses sold, being Russell Investment Management.

² Before depreciation, amortisation and non-underlying items.

³ 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 Russell Investment Management, SwapMatch, ISPS, Mergent and The Yield Book. 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 Warren, CFO and Interim Group Chief Executive, said:

“We have delivered another year of strong performance with growth across all of our core businesses, including double-digit revenue increases at FTSE Russell and LCH OTC. The Group has also continued to invest in new initiatives and acquisitions to drive further expansion of our global client offering.  Reflecting the strong results, as well as confidence in outlook and focus on shareholder returns, the dividend per share increased in line with earnings at 19%, and the Group completed a £200 million buyback during the year. 

“The Group is strategically, operationally and financially well positioned to capitalise on a range of opportunities ahead and to enhance shareholder returns. We also remain focused on delivering the financial targets we have set for the next two years. Our Open Access approach in partnership with customers will enable us to benefit from MiFID II and to adapt to an evolving regulatory and macroeconomic environment.”

Financial Summary

Unless otherwise stated, all figures below refer to continuing operations for the year ended 31 December 2017.  Comparative figures are for continuing operations for the year ended 31 December 2016.  Variance is also provided on an organic and constant currency basis.