TIDMLSEG
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 adjustment(1) , to provide the
best view of underlying performance
-- Strong performance across all divisions driving 7.6% growth
in Q3 total income(1) 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 GBP125 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 income(1) grew 5.6%, reflecting the good performance across the Group
-- As previously guided, the Group expects total income(1) 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 GBP1m adjustment reducing revenue for Q3
2021, (GBP24m 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 GBP125 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 underlying(1)
--------------------------------------------------------------
Continuing operations Q3 2021 Q3 2020 Reported Constant Constant
Variance Currency Currency
(2) Variance Variance
(3) (excl.
deferred
revenue
adjustment)
(3,4)
GBPm GBPm % % %
-------- -------- ---------- ---------- -------------
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-forma(1) 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% -
Tradeweb(2) 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 underlying(1)
--------------------------
Continuing operations Q3 2021 Q3 2020
GBPm GBPm
------------ ------------
Trading & Banking Solutions 372 4
------------
Enterprise Data Solutions 283 32
------------
Investment Solutions 293 172
------------
Wealth Solutions 115 -
------------
Customer & Third-Party Risk 92 -
Solutions
--------------------------------- ------------ ------------
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 ir@lseg.com
Media
Lucie Holloway / Rhiannon Davies - Financial Communications +44 (0) 20 7797 1222
newsroom@lseg.com
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 ir@lseg.com .
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:
https://cossprereg.btci.com/prereg/key.process?key=PN3G9JCK6
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 GBP1
million negative revenue impact following GBP22 million in Q1 and
GBP1 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 Closing rate Average rate Closing rate
9 months at 9 months at
ended 30-Sep-21 ended 30-Sep-20
30-Sep-21 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-forma(1)
Continuing operations Q3 2021 Q3 2020 Reported Constant Constant
Variance Currency Currency
(2) Variance Variance
(3) (excl.
deferred
revenue
adjustment)
(3,4)
GBPm GBPm % % %
-------- -------- ----------
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 KPIs(1)
Q3 2021 Q3 2020 Reported
Variance
%
-------- --------
Annual Subscription Value 4.0% - -
growth (%) (5)
Subscription revenue growth 3.5% - -
(%) (5, 6)
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-forma(1)
Continuing operations Q3 2021 Q3 2020 Reported Constant Constant
Variance Currency Currency
(2) Variance Variance
(3) (excl.
deferred
revenue
adjustment)
(3,4)
GBPm GBPm % % %
-------- -------- ----------
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 KPIs(1)
Q3 2021 Q3 2020 Reported
Variance
%
-------- --------
Equities
Primary Markets
New issues 45 12 275%
Total money raised (GBPbn) 6.9 8.3 (17%)
Secondary Markets - Equities
UK Value Traded (GBPbn)
- 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-forma(1)
Continuing operations Q3 2021 Q3 2020 Reported Constant
Variance Currency
(3) Variance
(4)
GBPm GBPm % %
-------- --------
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 KPIs(1)
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 (EURbn) 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
(EURtrn) 62.0 52.1 19%
Non-Cash Collateral
Average non-cash collateral
(EURbn) 167.2 165.5 1%
Net Treasury Income
Average cash collateral
(EURbn) 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-forma(1) 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 underlying(1)
------------------------------------------------------------
Continuing operations Q3 9m Q3 9m Reported Constant Constant
2021 2020 Variance Currency Currency
(2) Variance Variance
(3) (excl.
deferred
revenue
adjustment)
(3,4)
GBPm GBPm % % %
------- ------- ---------- ---------- -------------
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 - Statutory(1) Q3 YTD results
The table below shows LSEG's pro-forma results to gross profit
for the nine months ended 30 September 2021.
Statutory underlying(1)
--------------------------
Continuing operations Q3 9m Q3 9m
2021 2020
GBPm GBPm
------------ ------------
Trading & Banking Solutions 991 13
------------
Enterprise Data Solutions 755 96
------------
Investment Solutions 818 508
------------
Wealth Solutions 311 -
------------
Customer & Third-Party Risk 239 -
Solutions
--------------------------------- ------------ ------------
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-forma(1) income by type
Pro-forma underlying(1)
--------------------------------------------------------------
Continuing operations Q3 2021 Q3 2020 Reported Constant Constant
Variance Currency Currency
(2) Variance Variance
(3) (excl.
deferred
revenue
adjustment)
(3, 4)
GBPm GBPm % % %
-------- -------- ---------- ---------- -------------
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-forma(1) 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.
GBPm 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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