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LondonStockExGroup (LSEG)

  Print          Annual reports

Friday 22 October, 2021

LondonStockExGroup

2021 Q3 Trading Statement

RNS Number : 8829P
London Stock Exchange Group PLC
22 October 2021
 

 

 

London Stock Exchange Group plc: Q3 2021 Trading Statement

This release contains revenues and key performance indicators (KPIs) for the three months ended 30 September 2021 (Q3). All figures quoted in this release are on an underlying basis.  Figures are stated on both a statutory and pro-forma basis for Q3 2021 and Q3 2020. Pro-forma figures assume that the acquisition of Refinitiv took place on 1 January 2021 and the prior year comparator assumes that the acquisition of Refinitiv occurred on 1 January 2020. All pro-forma and statutory figures exclude the financial contribution from Borsa Italiana which was divested in H1 2021. Constant currency variance is calculated on the basis of consistent FX rates applied across the current and prior year period, the conversions have been made from the transactional values, which will eliminate any transactional and translational movements along with any related accounting adjustments. For more information, please refer to the "Accounting and modelling notes" section below. Organic variances have been removed from our disclosure due to the large variances associated with the acquisition of Refinitiv.

Highlights

Note: Unless otherwise stated, variances refer to Q3 growth rates on a pro-forma constant currency basis, excluding the impact of a deferred revenue accounting adjustment1, to provide the best view of underlying performance

· Strong performance across all divisions driving 7.6% growth in Q3 total income1 and gross profit growth of 7.3%

· Continued good progress on the integration of Refinitiv and comfortably on target for full year run-rate cost synergy delivery of £125 million, ahead of original phasing; 10 new products launched in Q3 as part of revenue synergy programme, taking the total to 37 year-to-date

· Data & Analytics revenue grew 6.0% and continues to perform well with growth in Annual Subscription Value increasing from 3.9% at H1 to 4.0% in Q3, reflecting strength in subscription-based new business wins

· Capital Markets revenue grew 17.2% driven by double-digit growth at Tradeweb, strong primary issuance within Equities and good dealer-to-client volumes at FXall

· Post Trade revenue grew 11.5% driven by increased clearing activity from both new and existing customers; total income up 2.3%, reflecting lower investment returns in Net Treasury Income compared to the strong comparator in Q3 2020

· Year-to-date total income1 grew 5.6%, reflecting the good performance across the Group

· As previously guided, the Group expects total income1 to grow between 4-5% for full year 2021, with Q4 2021 income not expected to grow as fast as Q3 on a constant currency basis due to the strong comparator in Q4 2020; no change to previous cost or capex guidance although supply chain pressures may impact timing of some technology spend this year

· The Group's second Investor Education Event on 1 October confirmed the strong growth ambitions for Data & Analytics, with revenues to increase by 4-6% annually over the medium term, reflecting multiple supportive trends and our ongoing focus on rigorous performance management and improvement of the customer experience. FX trading is also well-positioned for continued growth in electronic trading and the planned migration to new technology will strengthen it further. Replays of the two Investor Education Events are available online

1 Excluding recoveries and a deferred revenue accounting impact. As previously stated, the deferred revenue impact is a one-time, non-cash, negative revenue impact resulting from the accounting treatment of deferred revenue within Refinitiv's accounts which have been re-evaluated upon acquisition by LSEG under purchase price accounting rules. The result of this accounting treatment is a £1m adjustment reducing revenue for Q3 2021, (£24m reduction for Q3 YTD). The vast majority impacts the Data & Analytics business with a smaller impact applied to the FX venues business within Capital Markets. There will be further immaterial impacts in Q4 2021. Further information is available in the "Accounting and modelling notes" section. Constant currency variance shows underlying financial performance, excluding currency impacts, by comparing the current and prior year periods at consistent exchange rates. 

 

David Schwimmer, CEO said:

"The Group has delivered a strong Q3 financial performance with revenue growth across all divisions.

"We are making excellent progress on the integration of Refinitiv and are comfortably on-track to achieve £125 million of cost synergies in 2021, ahead of our original phasing. We continue to execute across a number of workstreams to deliver the target revenue synergies. The Group is well placed as we make targeted investments in product and technology enhancements to help us meet the needs of our customers and capitalise on the growth trends driving change across our industry."

 

Q3 2021 Summary - Pro-forma

For the pro-forma table, variances are provided on a reported and constant currency basis. Commentary is provided on the constant currency variance (excluding deferred revenue adjustment) to provide the best insight into underlying performance. Please refer to the "Accounting and modelling notes" section for more information on relevant accounting adjustments.

 

Pro-forma underlying1

Continuing operations

Q3 2021
£m

Q3 2020
£m

Reported Variance 2
%

 

Constant Currency Variance 3
%

Constant Currency Variance (excl. deferred revenue adjustment) 3,4
%

 

 

 

 

 

 

 

Trading & Banking Solutions

372  

399  

(6.8%)

 

(0.5%)

(0.3%)

Enterprise Data Solutions

283  

290  

(2.4%)

 

4.1%  

4.1%  

Investment Solutions

293  

278  

5.4%  

 

11.1%

11.1%  

Wealth Solutions

115  

123  

(6.5%)

 

(0.8%)

(0.8%)

Customer & Third-Party Risk Solutions

92  

69  

33.3%  

 

40.6%  

40.6%  

Data & Analytics

1,155  

1,159  

(0.3%)

 

5.9%  

6.0%  

 

 

 

 

 

 

 

Equities

60  

52  

15.4%  

 

15.4%  

15.4%  

FX

56  

56  

-  

 

7.1%  

7.1%  

Fixed Income, Derivatives & Other

195  

170  

14.7%  

 

21.1%  

21.1%  

Capital Markets

311  

278  

11.9%  

 

17.2%  

17.2%  

 

 

 

 

 

 

 

OTC Derivatives

86  

80  

7.5%  

 

11.4%  

11.4%  

Securities & Reporting

61  

58  

5.2%  

 

8.8%  

8.8%  

Non-Cash Collateral

24  

21  

14.3%  

 

19.0%  

19.0%  

Net Treasury Income

47  

63  

(25.4%)

 

(21.0%)

(21.0%)

Post Trade

218  

222  

(1.8%)

 

2.3%  

2.3%  

 

 

 

 

 

 

 

Other

9  

6  

-  

 

-  

-  

Total Income (excl. recoveries)

1,693  

1,665  

1.7%  

 

7.5%  

7.6%  

Recoveries

90  

82  

9.8%  

 

(1.1%)

(1.1%)

Total Income (incl. recoveries)

1,783  

1,747  

2.1%  

 

7.1%  

7.2%  

 

 

 

 

 

 

 

Cost of sales

(228)

(228)

-  

 

5.7%  

5.7%  

Gross Profit

1,555  

1,519  

2.4%  

 

7.2%  

7.3%  

1 Pro-forma underlying assumes that the acquisition of Refinitiv took place on 1 January 2021 for the current financial year and 1 January 2020 for the prior financial year comparator figure. Both figures exclude the financial contribution from the businesses contained within the Borsa Italiana divestment

2  Reported variance is the difference between current and prior year periods on a pro-forma underlying basis, using year-to-date FX rates prevalent in each period, therefore any changes in the FX rates are also reflected in the variance percentage alongside business performance. The Q3 results are derived by deducting the H1 results, which have been translated using the average exchange rates for the 6 months to 30 June 2021, from the 9 months figure

3 Constant currency variance shows underlying financial performance, excluding currency impacts, by comparing the current and prior period at consistent exchange rates

4 The deferred revenue adjustment is explained in the "Accounting and modelling notes" section

 

Pro-forma1 Q3 2021 Highlights

· Data & Analytics : revenues up 6.0%

o Annual Subscription Value growth for the division increased from 3.9% at H1, to 4.0% at Q3; ahead of the subscription revenue growth in Q3 year-to-date of 3.5%. This indicates that the current book of business covered by the ASV metric (c.87% of Data & Analytics revenue) is growing faster than the associated subscription revenues so far this year

o Trading & Banking Solutions revenues down 0.3% - Banking segment delivered a good performance, reflecting product and customer service enhancements, including Workspace; in the Trading segment the pace of decline in Eikon Premium continues to slow

o Enterprise Data Solutions revenues up 4.1% - strong sales in the period in Pricing & Reference Services (PRS) and Real Time Data, with low, early-stage revenue synergies now contributing

o Investment Solutions revenues up 11.1% - double-digit growth in Benchmark Rates, Indices & Analytics with good sales. Asset-based ETF AUM remained above $1 trillion with strong growth

o Wealth Solutions revenues down 0.8% - Advisor & Investor Services revenues were flat as cancellations offset new client wins. Operations Management (BETA) saw a small decline in revenue despite increased volumes due to the mix of customers using the service

o Customer & Third-Party Risk Solutions revenues up 40.6% - strong growth continues, with double-digit growth at World-Check, GIACT and Due Diligence

· Capital Markets: revenues up 17.2% 

o Equities revenues up 15.4% - large scale and high-profile listings on London Stock Exchange, the world's most international exchange. Secondary markets revenues have grown due to higher volumes across our orderbooks

o FX revenues up 7.1% - strong volumes in dealer-to-client (FXall) driving growth, reflecting the investment in new product capabilities, relationship management and better customer service

o Fixed Income, Derivatives & Other revenues up 21.1% - Tradeweb2 continues to grow strongly, as it expands its offering to meet demand from increased electronification of trading markets

· Post Trade : revenue up 11.5%; total income up 2.3% (impacted by Net Treasury Income)

o OTC Derivatives revenues up 11.4% - strong performance across services with increased SwapClear revenues driven by growth in the number of active clients

o Securities & Reporting revenues up 8.8% - RepoClear activity growth continues to drive revenue with record volumes in September across Euro debt clearing

o Non-Cash Collateral revenues up 19.0% - partly due to increased activity at SwapClear and RepoClear

o Net Treasury Income down 21.0% - rate of investment return reduced compared to a strong comparator in Q3 2020, alongside flat cash collateral balances. NTI expected to continue at current levels for time being

1 Pro-forma assumes that the acquisition of Refinitiv took place on 1 January 2021 for the current financial year and 1 January 2020 for the prior financial year comparator figure. Both figures exclude the financial contribution from the businesses contained within the Borsa Italiana divestment

2 Tradeweb Q3 2021 results will be released on 28 October 2021

 

Q3 2021 Summary - Statutory

Unless otherwise stated, all figures refer to continuing operations for the three months ended 30 September 2021 (Q3 2021). Comparative figures are for continuing operations for the three months ended 30 September 2020 (Q3 2020).

 

 

Statutory underlying1

Continuing operations

Q3 2021
£m

Q3 2020
£m

 

 

 

Trading & Banking Solutions

372  

4  

Enterprise Data Solutions

283  

32  

Investment Solutions

293  

172  

Wealth Solutions

115  

-  

Customer & Third-Party Risk Solutions

92  

-  

Data & Analytics

1,155  

208  

 

 

 

Equities

60  

52  

FX

56  

-  

Fixed Income, Derivatives & Other

195  

16  

Capital Markets

311  

68  

 

 

 

OTC Derivatives

86  

80  

Securities & Reporting

61  

58  

Non-Cash Collateral

24  

21  

Net Treasury Income

47  

63  

Post Trade

218  

222  

 

 

 

Other

9  

-  

Total Income (excl. recoveries)

1,693  

498  

Recoveries

90  

-  

Total Income (incl. recoveries)

1,783  

498  

 

 

 

Cost of sales

(228)

(44)

Gross Profit

1,555  

454  

1 Statutory underlying figures for Q3 2021 are equivalent to the pro-forma figures presented. Figures associated with the Borsa Italiana Group divestment are excluded from Q3 2020

 

Contacts: London Stock Exchange Group plc

 

Investors

 

 

Paul Froud - Group Head of Investor Relations

[email protected]

 

Media

 

Lucie Holloway / Rhiannon Davies - Financial Communications

+44 (0) 20 7797 1222

[email protected]

       

 

Additional information can be found at www.lseg.com  

 

Q3 investor and analyst conference call:

The Group will host an audio-only webcast and conference call on its Q3 Trading Statement for analysts and institutional shareholders today at 09:00am (UK time). On the call will be David Schwimmer (Chief Executive Officer), Anna Manz (Chief Financial Officer) and Paul Froud (Group Head of Investor Relations).

 

To access the telephone conference call or webcast please register in advance using the following link and instructions below:

 

https://www.lsegissuerservices.com/spark/LondonStockExchangeGroup/events/1be2d3b3-dddc-4d42-8827-12facb646b4f  

 

· Please register with your full name, company name and email address.

· If you wish to participate in Q&A, questions can be provided in written form via the Q&A tool on the webcast page or by emailing the LSEG Investor Relations team at . Questions can be submitted in advance and during the event itself, with written questions prioritised

· If you wish to ask a question live, you will need to register for the telephone conference call. The telephone conference registration link can be found in the link above and here:

 

As is normal with quarterly trading statements, there will be no slides published for Q3.

 

Accounting and modelling notes

Reclassified revenues within Trading & Banking

 

In the 2021 Q3 results, there has been a small reclassification of revenues within Trading & Banking, with revenue moving from Trading into Banking to better align with our operating model. The income by quarter table in the appendix has been adjusted to reflect the changes. 

 

Renamed revenue lines

 

The following revenue lines have been renamed to better describe our business. Beyond the names, there have been no further changes to the businesses or revenues within the lines.

 

Investment Solutions

· Benchmark Rates, Indices & Analytics - was previously named 'Index - Subscription'

· Index - Asset-Based - was previously named 'Index - AUM'

· Data & Workflow - was previously named 'Investment Solutions Data & Analytics'

 

Wealth Solutions

· Advisor & Investor Services - was previously named 'Wealth Data & Analytics'

· Operations Management (BETA) - was previously named 'BETA'

 

Deferred revenue accounting adjustment

 

As a result of the acquisition of Refinitiv and the associated purchase price accounting rules, Refinitiv's deferred revenue balances are subject to a one-time haircut at the time of acquisition. This is a non-cash adjustment. Q3 2021 saw a £1 million negative revenue impact following £22 million in Q1 and £1 million in Q2. The remaining impact will be immaterial in Q4 2021. The impact is mostly in the Group's Data & Analytics division, with a much smaller impact on the Group's FX venues business sitting within Capital Markets.

 

An adjusted variance, excluding the deferred revenue adjustment, has been presented to show true underlying business growth on the prior year.

 

FX conversion

 

As a result of the acquisition of Refinitiv, the majority of LSEG revenues and expenses are in USD followed by GBP, EUR and other currencies. All guidance given by LSEG, including the longer-term targets associated with the acquisition of Refinitiv as well as specific guidance for the 2021 financial year, has been given on a constant currency basis.

 

The results for the 9 months to 30 September 2021 have been translated into Sterling using the average exchange rates for the period. The Q3 results are then derived by deducting the H1 results, which have been translated using the average exchange rates for the 6 months to 30 June 2021. The rates for the largest two currency pairs are shown in the table below.

 

 

Average rate
9 months ended
30-Sep-21

Closing rate at
30-Sep-21

Average rate
9 months ended
30-Sep-20

Closing rate at
30-Sep-20

GBP : USD

1.385

1.343

1.271

1.287

GBP : EUR

1.157

1.157

1.131

1.095

 

Divisional revenue, gross profit and non-financial KPIs

1.  Data & Analytics

Pro-forma1

Continuing operations

Q3 2021
£m

Q3 2020
£m

Reported Variance 2
%

 

Constant Currency Variance 3
%

Constant Currency Variance (excl. deferred revenue adjustment) 3,4
%

 

 

 

 

 

 

 

Trading & Banking Solutions

372  

399  

(6.8%)

 

(0.5%)

(0.3%)

  Trading

295  

318  

(7.2%)

 

(0.6%)

(0.6%)

  Banking

77  

81  

(4.9%)

 

0.9%  

1.2%  

Enterprise Data Solutions

283  

290  

(2.4%)

 

4.1%  

4.1%  

  Real Time Data

182  

191  

(4.7%)

 

2.6%  

2.6%  

  PRS

101  

99  

2.0%  

 

8.1%  

8.1%  

Investment Solutions

293  

278  

5.4%  

 

11.1%  

11.1%  

  Benchmark Rates, Indices & Analytics

135  

125  

8.0%  

 

12.8%  

12.8%  

  Index - Asset-Based

62  

56  

10.7%  

 

15.8%  

15.8%  

  Data & Workflow

96  

97  

(1.0%)

 

5.2%  

5.2%  

Wealth Solutions

115  

123  

(6.5%)

 

(0.8%)

(0.8%)

  Advisor & Investor Services

69  

71  

(2.8%)

 

-  

-  

  Operations Management (BETA)

46  

52  

(11.5%)

 

(1.1%)

(1.1%)

Customer & Third-Party Risk Solutions

92  

69  

33.3%  

 

40.6%  

40.6%  

Total Revenue (excl. recoveries)

1,155  

1,159  

(0.3%)

 

5.9%  

6.0%  

Recoveries

90  

82  

9.8%  

 

(1.1%)

(1.1%)

Total Revenue (incl. recoveries)

1,245  

1,241  

0.3%  

 

5.5%  

5.6%  

Cost of sales

(191)

(195)

(2.1%)

 

3.6%  

3.6%  

Gross Profit

1,054  

1,046  

0.8%  

 

5.9%  

6.0%  

 

Pro-forma Non-financial KPIs1

 

Q3 2021

Q3 2020

Reported Variance

%

 

 

 

 

Annual Subscription Value growth (%) 5

4.0%

-

-

Subscription revenue growth (%) 5, 6

3.5%

-

-

Index - ETF AUM ($bn)

1,036

718

44%

Index - ESG Passive AUM ($bn) 7

132

46

187%

BETA transaction volumes (m)

130

121

7%

1 Pro-forma assumes that the acquisition of Refinitiv took place on 1 January 2021 for the current financial year and 1 January 2020 for the prior financial year comparator figure. Both figures exclude the financial contribution from the businesses contained within the Borsa Italiana divestment

2 Reported variance is the difference between current and prior year periods on a pro-forma underlying basis, using year-to-date FX rates prevalent in each period, therefore any changes in the FX rates are also reflected in the variance percentage alongside business performance. The Q3 results are derived by deducting the H1 results, which have been translated using the average exchange rates for the 6 months to 30 June 2021, from the 9 months figure

3 Constant currency variance shows underlying financial performance, excluding currency impacts, by comparing the current and prior period at consistent exchange rates

4 The deferred revenue adjustment is explained in the "Accounting and modelling notes" section

5 The variance is a constant currency variance excluding the impact of the deferred revenue accounting adjustment

6 The growth rate is based on Q3 year-to-date

7 ESG Passive AUM is as at 31 December 2020 and prior period comparator is at 31 December 2019 and is as presented at H1 2021. The metric is updated bi-annually with June 2021 available at our 2021 Preliminary Results

 

2.  Capital Markets

Pro-forma1

Continuing operations

Q3 2021
£m

Q3 2020
£m

Reported Variance 2
%

 

Constant Currency Variance 3
%

Constant Currency Variance (excl. deferred revenue adjustment) 3,4
%

 

 

 

 

 

 

 

Equities

60  

52  

15.4%

 

15.4%

15.4%

FX

56  

56  

-

 

7.1%

7.1%

Fixed Income, Derivatives & Other

195  

170  

14.7%

 

21.1%

21.1%

Total Revenue

311  

278  

11.9%

 

17.2%

17.2%

Cost of sales

(7)

(6)

16.7%

 

16.7%

16.7%

Gross Profit

304  

272  

11.8%

 

17.2%

17.2%

 

Pro-forma Non-financial KPIs1

 

 

Q3 2021

Q3 2020

Reported Variance
%

Equities

 

 

 

Primary Markets

 

 

 

New issues

45

12 

275%  

Total money raised (£bn)

6.9

8.3 

(17%)

 

 

 

 

Secondary Markets - Equities

 

 

 

UK Value Traded (£bn) - Average Daily Value

4.1

3.8 

8%  

SETS Yield (bps)

0.75

0.76 

(1%)

 

 

 

 

FX

 

 

 

Average daily total volume ($bn)

426

416 

2%  

 

 

 

 

Fixed income, Derivatives and Other

 

 

 

Tradeweb Average Daily ($m)

 

 

 

Rates - Cash

337,167

311,033 

8%  

Rates - Derivatives

246,981

179,054

38%  

 

 

 

 

Credit - Cash

8,440

7,036 

20%  

Credit - Derivatives

13,796

12,507 

10%  

1 Pro-forma assumes that the acquisition of Refinitiv took place on 1 January 2021 for the current financial year and 1 January 2020 for the prior financial year comparator figure. Both figures exclude the financial contribution from the businesses contained within the Borsa Italiana divestment

2 Reported variance is the difference between current and prior year periods on a pro-forma underlying basis, using year-to-date FX rates prevalent in each period, therefore any changes in the FX rates are also reflected in the variance percentage alongside business performance. The Q3 results are derived by deducting the H1 results, which have been translated using the average exchange rates for the 6 months to 30 June 2021, from the 9 months figure

3 Constant currency variance shows underlying financial performance, excluding currency impacts, by comparing the current and prior period at consistent exchange rates

4 The deferred revenue adjustment is explained in the "Accounting and modelling notes" section

 

3.  Post Trade

Pro-forma1

  Continuing operations

Q3 2021
£m

Q3 2020
£m

Reported Variance 3
%

 

Constant Currency Variance 4
%

 

 

 

 

 

 

OTC Derivatives

86  

80  

7.5%  

 

11.4%  

Securities & Reporting

61  

58  

5.2%  

 

8.8%  

Non-Cash Collateral

24  

21  

14.3%  

 

19.0%  

Total Revenue

171  

159  

7.5%  

 

11.5%  

Net Treasury Income

47  

63  

(25.4%)

 

(21.0%)

Total Income

218  

222  

(1.8%)

 

2.3%  

Cost of sales 2

(30)

(26)

15.4%  

 

24.0%  

Gross Profit

188  

196  

(4.1%)

 

(0.5%)

 

Pro-forma Non-financial KPIs1

 

Q3 2021

Q3 2020

Reported Variance
%

 

 

 

 

OTC

 

 

 

SwapClear

 

 

 

IRS notional cleared ($trn)

  202

  209

(3%)

SwapClear members

  122

  122

-  

Client trades ('000)

  516

  367

41%  

Client average 10-year notional equivalent ($trn)

  3.8 

3.2

19%  

 

 

 

 

ForexClear

 

 

 

Notional cleared ($bn)

  5,528

  4,556

21%  

ForexClear members

  35

  35

-  

 

 

 

 

CDSClear

 

 

 

Notional cleared (€bn)

  467

  495

(6%)

CDSClear members

  25

  26

(4%)

 

 

 

 

Securities & Reporting

 

 

 

EquityClear trades (m) 5

  493

  424

16%  

Listed derivatives contracts (m)

  66.3

  70.8

(6%)

RepoClear - nominal value (€trn)

  62.0

  52.1

19%  

 

 

 

 

Non-Cash Collateral

 

 

 

Average non-cash collateral (€bn)

  167.2

  165.5

1%  

 

 

 

 

Net Treasury Income

 

 

 

Average cash collateral (€bn)

  103.9

  103.9

-

1 Pro-forma assumes that the acquisition of Refinitiv took place on 1 January 2021 for the current financial year and 1 January 2020 for the prior financial year comparator figure. Both figures exclude the financial contribution from the businesses contained within the Borsa Italiana divestment

2 Cost of sales incorporates the elimination of intercompany transactions in the Post Trade division as part of the pro-forma financial disclosure

3 Reported variance is the difference between current and prior year periods on a pro-forma underlying basis, using year-to-date FX rates prevalent in each period, therefore any changes in the FX rates are also reflected in the variance percentage alongside business performance. The Q3 results are derived by deducting the H1 results, which have been translated using the average exchange rates for the 6 months to 30 June 2021, from the 9 months figure

4 Constant currency variance shows underlying financial performance, excluding currency impacts, by comparing the current and prior period at consistent exchange rates

5 EquityClear trades exclude interoperability trades, these will differ to the volumes published on the LCH website which includes these trades

 

Appendix - Pro-forma1 Q3 YTD results

The table below shows LSEG's pro-forma results to gross profit for the nine months ended 30 September 2021.

 

Pro-forma underlying1

Continuing operations

Q3 9m 2021
£m

Q3 9m 2020
£m

Reported Variance 2
%

 

Constant Currency Variance 3
%

Constant Currency Variance (excl. deferred revenue adjustment) 3,4
%

 

 

 

 

 

 

 

Trading & Banking Solutions

1,116  

1,205  

(7.4%)

 

(1.0%)

(0.3%)

Enterprise Data Solutions

840  

872  

(3.7%)

 

2.3%  

3.0%  

Investment Solutions

851  

832  

2.3%  

 

8.8%  

9.2%  

Wealth Solutions

353  

380  

(7.1%)

 

0.3%  

0.5%  

Customer & Third-Party Risk Solutions

267  

205  

30.2%  

 

38.2%  

39.7%  

Data & Analytics

3,427  

3,494  

(1.9%)

 

4.6%  

5.2%  

 

 

 

 

 

 

 

Equities

180  

170  

5.9%  

 

4.7%  

4.7%  

FX

166  

177  

(6.2%)

 

1.7%  

1.7%  

Fixed Income, Derivatives & Other

584  

531  

10.0%  

 

17.6%  

17.6%  

Capital Markets

930  

878  

5.9%  

 

12.0%  

12.0%  

 

 

 

 

 

 

 

OTC Derivatives

255  

249  

2.4%  

 

4.4%  

4.4%  

Securities & Reporting

188  

168  

11.9%  

 

13.0%  

13.0%  

Non-Cash Collateral

70  

61  

14.8%  

 

18.0%  

18.0%  

Net Treasury Income

155  

212  

(26.9%)

 

(23.6%)

(23.6%)

Post Trade

668  

690  

(3.2%)

 

(0.9%)

(0.9%)

 

 

 

 

 

 

 

Other

24  

23  

4.3%  

 

8.7%  

8.7%  

Total Income (excl. recoveries)

5,049  

5,085  

(0.7%)

 

5.2%  

5.6%  

Recoveries

268  

246  

8.9%  

 

(1.1%)

(0.8%)

Total Income (incl. recoveries)

5,317  

5,331  

(0.3%)

 

4.8%  

5.3%  

 

 

 

 

 

 

 

Cost of sales

(682)

(714)

(4.5%)

 

2.0%  

2.0%  

Gross Profit

4,635  

4,617  

0.4%  

 

5.3%  

5.8%  

 

1 Pro-forma underlying assumes that the acquisition of Refinitiv took place on 1 January 2021 for the current financial year and 1 January 2020 for the prior financial year comparator figure. Both figures exclude the financial contribution from the businesses contained within the Borsa Italiana divestment

2  Reported variance is the difference between current and prior year periods on a pro-forma underlying basis, using year-to-date FX rates prevalent in each period, therefore any changes in the FX rates are also reflected in the variance percentage alongside business performance

3 Constant currency variance shows underlying financial performance, excluding currency impacts, by comparing the current and prior period at consistent exchange rates

4 The deferred revenue adjustment is explained in the "Accounting and modelling notes" section

 

Appendix - Statutory1 Q3 YTD results

The table below shows LSEG's pro-forma results to gross profit for the nine months ended 30 September 2021.

 

Statutory underlying1

Continuing operations

Q3 9m 2021
£m

Q3 9m 2020
£m

 

 

 

Trading & Banking Solutions

991  

13  

Enterprise Data Solutions

755  

96  

Investment Solutions

818  

508  

Wealth Solutions

311  

-  

Customer & Third-Party Risk Solutions

239  

-  

Data & Analytics

3,114  

617  

 

 

 

Equities

180  

170  

FX

147  

-  

Fixed Income, Derivatives & Other

526  

45  

Capital Markets

853  

215  

 

 

 

OTC Derivatives

255  

249  

Securities & Reporting

188  

168  

Non-Cash Collateral

70  

61  

Net Treasury Income

155  

212  

Post Trade

668  

690  

 

 

 

Other

23  

4  

Total Income (excl. recoveries)

4,658  

1,526  

Recoveries

238  

-  

Total Income (incl. recoveries)

4,896  

1,526  

 

 

 

Cost of sales

(622)

(158)

Gross Profit

4,274  

1,368  

1 Statutory underlying figures for Q3 9 months 2021 incorporate figures from Refinitiv for February to September 2021. Figures associated with the Borsa Italiana Group divestment are excluded from both periods

 

Appendix - Pro-forma1 income by type

 

 

Pro-forma underlying1

Continuing operations

Q3 2021
£m

Q3 2020
£m

Reported Variance 2
%

 

Constant Currency Variance 3
%

Constant Currency Variance (excl. deferred revenue adjustment) 3, 4
%

 

 

 

 

 

 

 

Recurring

1,180

1,196

(1.3%)

 

4.7%  

4.9%  

Transactional

457

401

14.0%  

 

19.7%  

19.7%  

Net Treasury Income

47

63

(25.4%)

 

(21.0%)

(21.0%)

Other income

9

6

-  

 

-  

-  

Total income (excl. recoveries)

1,693

1,665

1.7%  

 

7.5%  

7.6%  

Recoveries

90

82

9.8%  

 

(1.1%)

(1.1%)

Total income (incl. recoveries)

1,783

1,747

2.1%  

 

7.1%  

7.2%  

 

1 Pro-forma underlying assumes that the acquisition of Refinitiv took place on 1 January 2021 for the current financial year and 1 January 2020 for the prior financial year comparator figure. Both figures exclude the financial contribution from the businesses contained within the Borsa Italiana divestment

2 Reported variance is the difference between current and prior year periods on a pro-forma underlying basis, using year-to-date FX rates prevalent in each period, therefore any changes in the FX rates are also reflected in the variance percentage alongside business performance. The Q3 results are derived by deducting the H1 results, which have been translated using the average exchange rates for the 6 months to 30 June 2021, from the 9 months figure

3 Constant currency variance shows underlying financial performance, excluding currency impacts, by comparing the current and prior period at consistent exchange rates

4 The deferred revenue adjustment is explained in the "Accounting and modelling notes" section

 

Appendix - Pro-forma1 income by quarter

The table below has used FX rates on a YTD average basis which is the basis upon which the Group presents its financials. The split between Trading and Banking has been updated to recognise the reclassification at Q3 2021.

£m

Q1

Q2

Q3

Q4

2020

 

Q1

Q2

Q3

 

 

 

 

 

 

 

 

 

 

Trading & Banking Solutions

396  

410  

399  

391  

1,596  

 

372  

372  

372  

  Trading

316  

328  

318  

311  

1,273  

 

296  

295  

295  

  Banking

80  

82  

81  

80  

323  

 

76  

77  

77  

Enterprise Data Solutions

285  

297  

290  

291  

1,163  

 

277  

280  

283  

  Real Time Data

187  

197  

191  

191  

766  

 

177  

182  

182  

  PRS

98  

100  

99  

100  

397  

 

100  

98  

101  

Investment Solutions

272  

282  

278  

279  

1,111  

 

272  

286  

293  

  Benchmark Rates, Indices & Analytics

118  

127  

125  

125  

495  

 

121  

126  

135  

  Index - Asset-Based

58  

54  

56  

57  

225  

 

58  

64  

62  

  Data & Workflow

96  

101  

97  

97  

391  

 

93  

96  

96  

Wealth Solutions

126  

131  

123  

120  

500  

 

122  

116  

115  

  Advisor & Investor Services

66  

72  

71  

69  

278  

 

69  

70  

69  

  Operations Management (BETA)

60  

59  

52  

51  

222  

 

53  

46  

46  

Customer & Third-Party Risk Solutions

67  

69  

69  

78  

283  

 

85  

90  

92  

Data & Analytics

1,146  

1,189  

1,159  

1,159  

4,653  

 

1,128  

1,144  

1,155  

 

 

 

 

 

 

 

 

 

 

Equities

62  

56  

52  

57  

227  

 

61  

59  

60  

FX

64  

57  

56  

57  

234  

 

57  

53  

56  

Fixed Income, Derivatives & Other

186  

175  

170  

178  

709  

 

201  

188  

195  

Capital Markets

312  

288  

278  

292  

1,170  

 

319  

300  

311  

 

 

 

 

 

 

 

 

   

 

OTC Derivatives

87  

82  

80  

85  

334  

 

87  

82  

86  

Securities & Reporting

59  

51  

58  

62  

230  

 

65  

62  

61  

Non-Cash Collateral

19  

21  

21  

21  

82  

 

22  

24  

24  

Net Treasury Income

67  

82  

63  

57  

269  

 

55  

53  

47  

Post Trade

232  

236  

222  

225  

915  

 

229  

221  

218  

 

 

 

 

 

 

 

 

 

 

Other

11  

6  

6  

6  

29  

 

5  

10  

9  

Total Income (excl. recoveries)

1,701  

1,719  

1,665  

1,682  

6,767  

 

1,681  

1,675  

1,693  

Recoveries

87  

77  

82  

92  

338  

 

88  

90  

90  

Total Income (incl. recoveries)

1,788  

1,796  

1,747  

1,774  

7,105  

 

1,769  

1,765  

1,783  

Cost of sales

(242)

(244)

(228)

(232)

(946)

 

(231)

(223)

(228)

Gross Profit

1,546  

1,552  

1,519  

1,542  

6,159  

 

1,538  

1,542  

1,555  

1 Pro-forma assumes that the acquisition of Refinitiv took place on 1 January 2021 for the current financial year and 1 January 2020 for the prior financial year comparator figure. All figures exclude the financial contribution from the businesses contained within the Borsa Italiana divestment

 

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