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LondonStockExGroup - Annual Financial Report



Unless stated otherwise, all figures in the highlights below refer to 12 months to 31 December 2018 and comparisons with the prior 12 month period on the same basis.

·    Continued successful execution of strategy driving strong operational and financial performance, and enhanced shareholder returns

·    Strong growth across core business divisions - Information Services, LCH and Capital Markets

·    Well positioned as a global financial markets infrastructure provider, operating on an Open Access basis in partnership with customers

·    Investment and a focus on greater collaboration to drive further growth opportunities and efficiency

2018 Highlights

·    Total revenue up 8% to £1,911 million (2017: £1,768 million)

·    Total income up 9% to £2,135 million (2017: £1,955 million) 

·    FTSE Russell delivered 15% revenue growth (up 8% on an organic constant currency basis)

·    LCH OTC revenues up 16% (up 17% on a constant currency basis)

·    Adjusted operating expenses1 well controlled with 2% increase (up 6% including depreciation) reflecting continued investment in growth and efficiency

·    Adjusted operating profit2 up 15% at £931 million (2017: £812 million); operating profit up 20% at £751 million (2017: £626 million); adjusted EBITDA2 up 17% at £1,066 million (2017: £915 million)

·    Adjusted EPS2 up 17% at 173.8 pence (2017: 148.7 pence); basic EPS of 138.3 pence (2017: 153.6 pence)

·    Proposed final dividend increased to 43.2 pence per share - a 17% increase in the full year dividend to 60.4 pence per share - reflecting the strong performance and confident outlook for the Group

Continued organic and inorganic developments including:

Majority ownership of LCH Group increased to 82.6%

LCH SwapClear - 23% growth to $1 quadrillion notional cleared; $773 trillion compressed

LCH ForexClear - 54% increase in cleared notional - successful launch of FX options

Acquisition of a 4.9% minority stake in Euroclear - strengthens operational and commercial partnerships

FTSE Russell $16 trillion assets under benchmark to FTSE Russell with increased multi-asset capabilities and data and analytics opportunities

CurveGlobal delivered 88% increase in trading and 148% rise in open interest over the last 12 months

Acquisition of minority stake in Nivaura to support capital markets innovation

·    Good progress towards achievement of financial targets with strong revenue and margin growth; prioritisation of further investment in growth opportunities means the Group does not plan to achieve cost and Group margin targets in 2019

Commenting on performance for the year, David Schwimmer, CEO, LSEG said:

"Since joining LSEG, my early impressions of its strengths have only been reinforced. The Group is distinguished by its open access and customer partnership approach, a set of world class businesses across the capital markets lifecycle and a team of committed colleagues.

"LSEG continues to be well positioned in an evolving macroeconomic and regulatory landscape.  Our businesses, including those perceived to be most exposed to Brexit, such as clearing, continue to perform very well, with no change in our market position.

"We have delivered another year of strong performance across the Group, with a 9% increase in income and 17% growth in both adjusted earnings and proposed dividend.  We have continued to invest in new initiatives, developing our information services business and increasing our majority holding in LCH, as well as taking a minority stake in Euroclear.

"The strategic positioning of each of our businesses has reinforced for me the continued opportunities for growth. We will continue to invest in our businesses and to increase Group-wide collaboration to better meet the needs of our clients and to continue to drive strong returns for our shareholders."

Earnings per share

The Group delivered a 17% increase in adjusted basic earnings per share, which excludes amortisation of purchased intangible assets and non-underlying items, to 173.8 pence (2017: 148.7 pence). Basic earnings per share were 138.3 pence (2017: 146.4 pence).


The Board is proposing a final dividend of 43.2 pence per share, which together with the interim dividend of 17.2 pence per share paid to shareholders in September 2018, results in a 17% increase in the total dividend to 60.4 pence per share. The final dividend will be paid on 29 May 2019 to shareholders on the register as at 3 May 2019.

Looking forward

Collaboration is a strategic and commercial imperative for LSEG. I firmly believe it will allow us to take the Group to the next level of operational, financial and strategic success. Across the Group's businesses and global locations, we will continue to deepen our partnership approach, delivering innovative products and services that meet the needs of our global customers.

We are mindful of the macroeconomic, technological and regulatory challenges in our industry. We must continue to address an evolving landscape. We are committed to continuing to invest in technology and deliver operational excellence, while investing for growth across our core businesses.

In summary, our strategic vision remains the same - to be the world's leading financial markets partner. Together with LSEG's highly capable and experienced team, I look forward to continuing to focus on the opportunities ahead for our business, investing for growth and driving efficiency, while operating as a unified Group for the benefit of our customers, shareholders and broader stakeholders.