Trading Statement
1st May 2025 07:00
London Stock Exchange Group plc: Q1 2025 Trading Update
Strong start to the year: accelerating D&A growth and excellent performance from Markets division, full year guidance confirmed
David Schwimmer, CEO said:
"We have started the year strongly, delivering another quarter of good growth. Our Data & Analytics business accelerated further, and Risk Intelligence and FTSE Russell continued to perform well. Our Markets division saw strong broad-based growth against a backdrop of elevated volatility, which has persisted into April reflecting continuing uncertainty around the outlook for financial markets and the global economy more broadly.
"We continue to drive the strategic transformation of our business - building a strong product pipeline, investing in our engineering talent and delivering on the Microsoft partnership.
"Our strong first quarter performance is testament to the value of our diversified business model. We look forward to further progress in the rest of the year, consistent with our financial targets."
Q1 2025 highlights | |
(All growth rates on an organic constant currency basis unless otherwise stated) | |
· | Strong growth: Total income (excl. recoveries) +8.7% incl. M&A, +7.8% organic. |
· | Good performance from all divisions: Data & Analytics +5.1%, FTSE Russell +9.6%, Risk Intelligence +10.7%, Markets +10.7%. |
· | Acceleration in Data & Analytics: sequential improvement in growth led by Analytics and Data & Feeds. |
· | Broad-based strength in Markets: double-digit growth across FX, Tradeweb and OTC Derivatives; elevated activity continuing into April. |
· | Shareholder returns: £245 million of £500 million share buyback completed by 30 April. |
· | Confident of continued growth and improving profitability: on track to deliver on all financial guidance issued in February's FY 2024 results. |
This release contains revenues, cost of sales and key performance indicators (KPIs) for the three months ended 31 March 2025 (Q1). Certain columns and rows may not add due to the use of rounded numbers for disclosure purposes. To reflect underlying performance, all constant currency variances compare the current and prior period at consistent exchange rates. Organic variance is calculated on a constant currency basis, adjusting the results to remove disposals from the entirety of the current and prior year periods, and including acquisitions from the date of acquisition with a comparable adjustment to the prior year.
Q1 2025 summary
|
|
|
|
|
|
|
| Q1 2025£m | Q1 2024£m | Variance % | Constant currency variance % | Organic constant currency variance % | |
|
| |||||
Workflows | 493 | 479 | 2.9% | 3.4% | 3.4% | |
Data & Feeds | 491 | 465 | 5.6% | 6.6% | 6.6% | |
Analytics | 59 | 55 | 7.3% | 7.4% | 7.4% | |
Data & Analytics | 1,043 | 999 | 4.4% |
| 5.1% | 5.1% |
|
|
|
|
|
|
|
Subscription | 156 | 144 | 8.3% | 8.2% | 8.2% | |
Asset-based | 83 | 74 | 12.2% | 12.5% | 12.5% | |
FTSE Russell | 239 | 218 | 9.6% |
| 9.6% | 9.6% |
|
| |||||
Risk Intelligence | 143 | 131 | 9.2% |
| 9.3% | 10.7% |
|
| |||||
Equities | 62 | 60 | 3.3% | 3.1% | 3.1% | |
Fixed Income, Derivatives & Other | 394 | 318 | 23.9% | 24.4% | 17.3% | |
FX | 69 | 61 | 13.1% | 12.3% | 12.3% | |
OTC Derivatives | 161 | 138 | 16.7% | 16.8% | 16.8% | |
Securities & Reporting | 56 | 62 | (9.7%) | (9.8%) | (9.8%) | |
Non-Cash Collateral | 27 | 28 | (3.6%) | (0.4%) | (0.4%) | |
Net Treasury Income | 65 | 69 | (5.8%) | (6.3%) | (6.3%) | |
Markets | 834 | 736 | 13.3% |
| 13.5% | 10.7% |
|
| |||||
Other | 2 | 5 | (60.0%) | (52.1%) | (52.1%) | |
Total Income (excl. recoveries) | 2,261 | 2,089 | 8.2% |
| 8.7% | 7.8% |
Recoveries | 93 | 93 | 0.0% | 0.6% | 0.6% | |
Total Income (incl. recoveries) | 2,354 | 2,182 | 7.9% |
| 8.3% | 7.5% |
Cost of sales | (308) | (289) | 6.6% | 7.2% | 7.2% | |
Gross Profit | 2,046 | 1,893 | 8.1% |
| 8.5% | 7.5% |
Total income (excluding recoveries) was up 8.7% including M&A, and 7.8% on an organic basis.
· | Data & Analytics was up 5.1%, accelerating from the prior year period. The drivers were broad-based with continued strong retention, good sales and a contribution from pricing consistent with the previous year. |
o | Workflows was up 3.4%, with continued product enhancements driving good sales activity and retention. Commodities was an area of particular strength during the quarter. The business remains on track to sunset Eikon by June 2025. |
o | Data & Feeds was up 6.6%. We continue to drive innovation and expansion of our leading Real Time offering, adding new low latency feeds and cloud solutions. In our Pricing and Reference business we saw good demand for newer capabilities such as fixed income corporate actions data and our expanded evaluated pricing offering. |
o | Analytics was up 7.4%, with good growth in Yield Book fixed income analytics and Lipper fund data. We continue to see strong demand for our Analytics API and launched new Visual Studio code capabilities in the quarter, both developed in partnership with Microsoft, making it easier for customers to create and deploy their insights using our models. |
· | FTSE Russell was up 9.6%. Strong demand for flagship equity products continued to support good growth in underlying subscription revenues. Asset-based revenues grew strongly driven by both inflows and higher average market levels. |
· | Risk Intelligence was up 10.7% driven by strong business momentum and customer demand in our screening business, World-Check, and expansion in our digital identity and fraud businesses. |
· | Annual Subscription Value (ASV): Period-end organic ASV growth was 6.4%, reflecting continued good sales, strong retention and a contribution from pricing consistent with the previous year. |
· | Markets was up 10.7%, and up 13.5% including the benefit of the ICD acquisition, as our capital markets venues and post trade businesses saw elevated activity in response to the heightened political and economic uncertainty in the quarter. |
o | Equities was up 3.1%. We saw strong, volume-driven growth in secondary markets, although this was partly offset by subdued primary revenue growth. |
o | Fixed Income, Derivatives & Other was up 17.3% organically with another record quarter for Tradeweb. Average Daily Volume (ADV) of $2.55 trillion in Q1 (up 19.1% organically, or +33.7% including ICD) reflected continued share gains across Tradeweb's rates and credit asset classes. This was complemented by strong market activity across Tradeweb's global asset classes as a result of heightened political and economic uncertainty. |
o | FX was up 12.3%, led by market-driven strength in dealer-to-client activity on our FXall platform. This was accompanied by good growth in interbank volumes on our Matching platform. |
o | OTC Derivatives was up 16.8%. Growth was broad-based across asset classes and in both cleared and uncleared instruments, reflecting elevated financial market volatility in the period and greater uncertainty over the global outlook for interest rates. |
o | Securities & Reporting was down (9.8)%, with strong volume growth in fixed income clearing more than offset by last year's loss of business from Euronext. |
o | Non-Cash Collateral was broadly unchanged at (0.4)%, with mix effects limiting the benefit from higher collateral balances. |
o | Net Treasury Income was down (6.3)% reflecting the reduction in cash balances following last year's loss of business from Euronext. |
· | Group cost of sales was up 7.2%, slightly below the growth rate in revenue reflecting business mix and the partially fixed nature of the costs. |
· | Gross profit was up 7.5%, very slightly behind growth in Total Income (excl. recoveries) as a result of the more modest growth in recoveries revenues. |
Capital allocation
In February we announced our intention to return £500 million to shareholders via a share buyback. At the end of April 2025, shares worth £245 million had been acquired under this programme.
In March we repurchased $250 million of the group's US dollar bond maturing in 2031, an NPV-positive transaction that takes advantage of the current interest rate environment.
Financial guidance
We are confident of further growth and improvement to our EBITDA margin in 2025, leading to strong growth in equity free cash flow. We confirm our guidance for 2025 as follows:
· | Organic constant currency growth in total income excluding recoveries of 6.5-7.5% including an acceleration in Data & Analytics organic growth and more normalised growth at Tradeweb |
· | An improvement in constant currency EBITDA margin of 50-100 basis points |
· | Capex intensity of c 10% of total income excluding recoveries |
· | Equity free cash flow of at least £2.4 billion, based on foreign exchange rates of £1 = $1.28 and €1.18 |
· | Underlying effective tax rate of 24-25% |
Q1 investor and analyst conference call:
LSEG will host a conference call for its Q1 Trading Update for analysts and investors today at 8.30am (UK time). On the call will be David Schwimmer, LSEG's Chief Executive officer (CEO), and Michel-Alain Proch, Chief Financial Officer (CFO).
To access the webcast or telephone conference call please register in advance using the following link:
https://sparklive.lseg.com/LondonStockExchangeGroup/events/c72ab92d-f61e-4ee2-b083-790e69775c58/lseg-q1-results-2025-investor-analyst-call
To ask a question live you will need to register for the telephone conference call here:
https://registrations.events/direct/LON201413
Contacts: London Stock Exchange Group plc |
|
Peregrine Riviere / Chris Turner - Investor Relations |
|
Media | |
Lucie Holloway / Rhiannon Davies - External Communications | +44 (0) 20 7797 1222 |
Additional information can be found at www.lseg.com.
Divisional non-financial KPIs
Subscriptions1
| Q1 2025 | Q1 2024 |
Annual Subscription Value growth (%) 2 | 6.4% | 6.0% |
Subscription revenue growth (%) 2, 3 | 6.1% | 6.6% |
1 Subscription revenues in Data & Analytics, FTSE Russell and Risk Intelligence
2 Organic, constant currency variance
3 12-month rolling constant currency variance
FTSE Russell
| Q1 2025 | Q1 2024 | Variance % |
Index - ETF AUM ($bn): | |||
- Period end | 1,434 | 1,328 | 8.0% |
- Average | 1,449 | 1,255 | 15.5% |
Markets
| Q1 2025 | Q1 2024 | Variance% |
Equities |
| ||
UK Value Traded (£bn) - average daily value | 5.0 | 3.9 | 28.2% |
| |||
Fixed income, Derivatives and Other | |||
Tradeweb average daily volume ($m) | |||
Rates - Cash | 558,883 | 461,826 | 21.0% |
Rates - Derivatives | 884,151 | 798,871 | 10.7% |
Credit - Cash | 18,264 | 17,418 | 4.9% |
Credit - Derivatives | 30,427 | 17,502 | 73.8% |
FX | |||
Average daily total volume ($bn) | 522 | 456 | 14.5% |
OTC Derivatives | |||
SwapClear - IRS notional cleared ($trn) | 464 | 406 | 14.4% |
SwapClear - Client trades ('000) | 1,248 | 912 | 36.8% |
ForexClear - Notional cleared ($bn) | 11,113 | 8,287 | 34.1% |
ForexClear - Members | 39 | 38 | 2.6% |
Securities & Reporting | |||
EquityClear trades (m) | 304 | 268 | 13.4% |
RepoClear - nominal value (€trn) | 84.3 | 74.4 | 13.3% |
Collateral | |||
Average non-cash collateral (€bn) | 211.2 | 197.1 | 7.1% |
Average cash collateral (€bn) | 104.8 | 110.5 | (5.2%) |
Foreign Exchange
The majority of LSEG revenues are in US dollars followed by sterling, euro and other currencies. A 10 cent devaluation in the US dollar and euro against sterling has an adverse impact on Total Income (excl. recoveries) of approximately 4.5% and 1.5% respectively. The impact on EBITDA is slightly greater, at approximately 5.0% and 2.0% respectively. These sensitivities are approximate and exclude the impact of embedded derivatives and other FX-related balance sheet revaluations.
USD | GBP | EUR | Other | |
Total Income1,2 | 58% | 16% | 17% | 9% |
Data & Analytics1 | 61% | 9% | 15% | 15% |
FTSE Russell | 72% | 20% | 3% | 6% |
Risk Intelligence | 62% | 9% | 16% | 13% |
Markets | 49% | 24% | 24% | 2% |
1 Total income includes recoveries
2 Percentage splits based on Q1 2025
Due to rounding, income percentages may not add to 100%.
Spot / Average Rates
Average rate3 months ended31 March 2025 | Closing rate at31 March 2025 | Average rate3 months ended31 March 2024 | Closing rate at31 March 2024 | |
GBP : USD | 1.259 | 1.294 | 1.268 | 1.263 |
GBP : EUR | 1.197 | 1.196 | 1.168 | 1.170 |
Total income and gross profit by quarter
| 2024 |
| 2025 | ||||
£m | Q1 | Q2 | Q3 | Q4 | FY |
| Q1 |
|
|
|
|
|
|
| |
Workflows | 479 | 479 | 472 | 480 | 1,910 | 493 | |
Data & Feeds | 465 | 472 | 465 | 478 | 1,880 | 491 | |
Analytics | 55 | 55 | 55 | 55 | 220 | 59 | |
Data & Analytics | 999 | 1,006 | 992 | 1,013 | 4,010 |
| 1,043 |
| |||||||
Subscription | 144 | 153 | 156 | 158 | 611 | 156 | |
Asset-Based | 74 | 81 | 71 | 81 | 307 | 83 | |
FTSE Russell | 218 | 234 | 227 | 239 | 918 |
| 239 |
| |||||||
Risk Intelligence | 131 | 132 | 131 | 137 | 531 |
| 143 |
| |||||||
Equities | 60 | 60 | 60 | 56 | 236 | 62 | |
Fixed Income, Derivatives & Other | 318 | 317 | 341 | 358 | 1,334 | 394 | |
FX | 61 | 64 | 67 | 66 | 258 | 69 | |
OTC Derivatives | 138 | 141 | 148 | 155 | 582 | 161 | |
Securities & Reporting | 62 | 65 | 55 | 53 | 235 | 56 | |
Non-Cash Collateral | 28 | 28 | 28 | 27 | 111 | 27 | |
Net Treasury Income | 69 | 65 | 66 | 66 | 266 | 65 | |
Markets | 736 | 740 | 765 | 781 | 3,022 |
| 834 |
| |||||||
Other | 5 | 3 | 2 | 3 | 13 | 2 | |
Total Income (excl. recoveries) | 2,089 | 2,115 | 2,117 | 2,173 | 8,494 |
| 2,261 |
Recoveries | 93 | 92 | 89 | 90 | 364 | 93 | |
Total Income (incl. recoveries) | 2,182 | 2,207 | 2,206 | 2,263 | 8,858 |
| 2,354 |
Cost of sales | (289) | (299) | (283) | (302) | (1,173) | (308) | |
Gross Profit | 1,893 | 1,908 | 1,923 | 1,961 | 7,685 |
| 2,046 |
Organic, constant-currency revenue growth by quarter
| 2024 |
| 2025 | ||||
% | Q1 | Q2 | Q3 | Q4 | FY |
| Q1 |
|
|
|
|
|
|
| |
Workflows | 1.7% | 3.1% | 3.2% | 3.4% | 2.9% | 3.4% | |
Data & Feeds | 6.8% | 5.5% | 6.1% | 6.4% | 6.2% | 6.6% | |
Analytics | 6.5% | 3.8% | 5.2% | 4.2% | 4.9% | 7.4% | |
Data & Analytics | 4.3% | 4.3% | 4.6% | 4.8% | 4.5% |
| 5.1% |
| |||||||
Subscription | 6.2% | 13.2% | 13.1% | 8.8% | 10.3% | 8.2% | |
Asset-Based | 16.4% | 14.1% | 1.8% | 16.0% | 11.9% | 12.5% | |
FTSE Russell | 9.5% | 13.5% | 9.2% | 11.2% | 10.9% |
| 9.6% |
| |||||||
Risk Intelligence | 12.5% | 10.4% | 10.4% | 12.0% | 11.3% |
| 10.7% |
| |||||||
Equities | 1.6% | 6.2% | 8.5% | 2.1% | 4.6% | 3.1% | |
Fixed Income, Derivatives & Other | 21.3% | 27.9% | 27.3% | 17.2% | 23.1% | 17.3% | |
FX | (2.2%) | 3.9% | 12.8% | 10.1% | 6.1% | 12.3% | |
OTC Derivatives | 0.1% | 6.6% | 18.4% | 19.0% | 10.8% | 16.8% | |
Securities & Reporting | (0.5%) | 2.5% | (11.1%) | (15.9%) | (6.3%) | (9.8%) | |
Non-Cash Collateral | 6.5% | 5.4% | 5.3% | 2.5% | 4.9% | (0.4%) | |
Net Treasury Income | (2.6%) | (14.7%) | (5.5%) | (1.5%) | (6.3%) | (6.3%) | |
Markets | 8.1% | 11.4% | 15.0% | 10.5% | 11.2% |
| 10.7% |
| |||||||
Other | (43.9%) | (48.6%) | (75.1%) | (52.6%) | (54.5%) | (52.1%) | |
Total Income (excl. recoveries) | 6.4% | 7.8% | 8.7% | 7.7% | 7.7% |
| 7.8% |