LDNXF - Earnings call transcript Q2 2022 | London Stock Exchange Group plc

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Paul Froud

Good morning. Thank you for joining us, and welcome to London Stock Exchange Group's First Half Presentation. I'm pleased to be joined by David Schwimmer, the Group CEO; and Anna Manz, the Group CFO.

As usual, David and Anna will provide some comment and insight on the financial and operational performance of the Group, and then we will open up to Q&A.

So as a reminder, there are two ways to ask a question.

writing the in webcast on send page. can by instructions following the You ask the question the you a Alternatively, can over in release. number today's telephone provided using line

and that We some the Group's Investor will they of are accompany Relations have section available slides this provided website. the through webcast,

to so And over that, me let with you hand David.

David Schwimmer

Good everyone. morning,

strategy making get on us Slide our strong progress with performance half growth the started across there say our in the X. are up. across a working opportunity benefits different benefits We're who easier work Let's integration, are of delivering I continued trading Simply our businesses. of is in is realizing Customers our and ahead. with put, us first that When to seeing customers cycle. know great making one broadly. more LSEG numbers plenty has the working. parts for revenue with of delivered us the it we back more And of their the strategy life part business working, is are we

hit can to X, basis. over on on margin. EBITDA headline see Slide meet our income to of X% our we track on XX% a targets. continue or We're you grew financial As Total all

buyback first begin of a dividend is confirm in start business. half of XX% million first of across and past share have to generation half, talked in and and generation cost organic about inorganic investments, cash synergies deliver on flow run us by immediately. we program the strong cash this ahead grow tranche our to £XX We allowing the realized in million capital I've synergies. the continue revenue great deploy the to rate with the first That of £XXX plan the

the Turning risk, X, of rising including environment, a challenges. inflation, to in geopolitical about rates, uncertainty recession there's current markets the macro lot Slide

environment navigate LSEG well Given minute a like talking that how to want do I is about this. an uncertainty, positioned to spend

First, XXX over across and geography with we diversified products customers XX,XXX are in highly countries.

customers. our our of as workflows, offerings are provide in and need to deep Second, need sit we XX% our help of this recurring. within the I products uncertainty. environment data that or an Many even more our like revenues us services we and services provide to customer would suggest navigate customers critical them over the they

of to And balance sheet interest rate Tradeweb a, such transactional people and remain and our as points, ratings driving spend. And model. with geographically record generative our few is in have last levers strong technology growth as said, cash I Third, and manage volatility spread SwapClear. managing business we have businesses credit a we costs track strong multiple with light highly

strategy Turning proposition. our to X, business very our Slide of and a the compelling LSEG makes model combination

customers, efficient in we diversified a investing our number recurring are scalable data subscription agile, building We and strong and more further higher growth retention. We're driving geographies. have across of for analytics. revenues while businesses. we a And business, have highly customer activities products, and growth particularly in And

more details over provide our on among I'll to growing me our color give Let then on benefiting linkages more the Anna, are to you. over we to first hand there strong and from Anna businesses. pause half. how

Anna Manz

total David good said, another with income. on Thanks, in David, X Slide morning. and half X% as Starting growth strong we've had

supporting year. and execution, and to target to X% message on X% our few both least be this growing continuing the All as And But the Cash us that continues end revenue stronger detail and view of on into of And investment this improving seeing progress performing at on more making half. from margin are ahead business the share focus around of our synergies, guidance at track and we're that investing we're robust, you are our currency and to progress growth. high-quality, taken XX% firmly contribution a revenue on returns. cost I'll a next the second our divisions delivers gives We're shareholder the of broad-based expectations. I'm puts actions good is conflict, deliver building synergies sustainably clear, well over next an basis to strength exit the of with of on slides. going business. underlying constant performance, best Ukraine-Russian the the excluding we've both generation

see current environment, As on we're positioned well you've heard, can X. Slide that and the for you

XX% FX repos Markets volumes impact £XX half. I'll the moves swaps. still We of growth of Tradeweb roughly benefit divisions X% X% Trade interest services year, expected new the All the & Ukraine-Russia around some continued from FXall. with a from grew one double-digit and saw trading growth growth In conflict. over and in with functions the our record strongly. we And be and both Post Data was rate revenues Capital million, unpack grew growth. driving saw in moment. is point up in in in Analytics full it's an which revenue to at

in Data the shown. are to recurring subscriptions, and from is the Analytics XX. Analytics Over continued these & half. first period Price growth strong broadly X.X% performance consistent on accelerate, the XX% revenues Data Slide Let's in to & turn over of growing our

transactional. the the in sales, reflects our both to & sales, of the balance and retention timing acceleration Data due in acquisitions here we've first growth year. of market the improvement are revenues environment Analytics in was the half the and The prior the So delivered new lower

We be see Slide of a on can for best second to you ASV continues the It's is XX-plus the representation half hard visual coming has been of Price over And growth. this this the revenues. slide. to work. The love I indicator accelerate how back similar subscription XX. to consistent period. lot these growth the expect percent lead of

focusing data to from and customer-centric life, achieved To used goals our see this customer solutions. clear so, you lead with later. incentives. customers. drive using them. which David by with by product all on describe are that We're our both strategically selling bring is who shifting of to and force journey, we culture, existing And customers data that of retention bigger We're to this and combined using single early relatively to a we've and incremental there to sales into better driven and execution. in work our products the to acceleration our do, have can performance is sales And for new much We've with sales our to how we customers, aligning get will is more

XX, and run revenue you our can enterprise Slide our demand that half for driven ended Yield using our the good against our We progress the the customers. of Data Refinitiv synergies, enterprise in to products, analytics synergies. Turning purchases by by with index first we're by see index Book data million of by from customers rate making strong data & £XX Analytics

million for million. be end We million of our are £XX year at a to range £XX deliver the top on and of the to target £XXX track expect to total

our of XX% £XXX We cost let's guidance year. and on first million a we're We're full on at over in our XX. cost Slide cumulative Now target. our performance to That's single-digit the the good had costs our organic rate half, look low deliver £XXX synergy run executing delivery guidance and for year a increasing margin margins of and are on program to track savings. well million XX.X%,

an expenses make while continuing of basis not well cost growth. at next we're to exit Looking inflationary from our environment, investments immune we're on we're bit more managing base. margin to practiced in track least to the XX% operating to shows drive our at our meet half detail. And little Slide And XX future we're year. first XXXX, a on target

from we're in making our operating cost in the business to FX the the from period. investments synergies three of elements Aside growth in accelerate there's, growth moves, half costs, and benefit first growth the cost ongoing our in

have cost XX the performance, further XXXX growth should to delivered improvement the EBITDA a a in EBITDA expect XX.X%, half for single-digit low on margin year. full You of We improvement Slide at the shows our continue margin. our to our continuing first organic our strength cost in positions business. and levers we've while And practiced pull. done this customer We're our manage increasing to well invest base to managing us and pricing. our relationships of

XXXX XX%. in target delivering confident exit least margin we're So of at our

you doing so, in talk We're those our making of business levers cost for cost people Slide driving more our some XX. simpler, on me and agile for we're the through customers Let efficiency. and easier

application gives we tech by build We're flexibility locations. efficiency than are with Our aspect in global products More low-latency of our our platform. of efficiency systematically our that footprint tackling platform, our of efficient consolidating we're year us lower-cost as made standard the have cost of And single identifying areas every improvement in a we onto scalable metrics this people. where base. locate our estate And cloud a hires new increasing new application. we're data been XX%

synergy have the we and We continue end to expect benefits of million deliver of well against £XXX million program, reached the to run year. by those rate £XXX our

not the our mitigate we impact it's on base. while the to predict possible environment So able inflationary in are to XXXX, cost

modernizing started good providing We analytics. service data data Slide increasing step of XX. delivery, to and meeting out our be distribution making we're the is our and is along halfway new sets, moving customers & automation we're year. and the big progress. same savings. and turn services, cost a a I the our the software-defined processing you of will progress to ingestion, This We're in showed in This end flexibility they further onto greater our and our sourcing. towards making year cloud faster data where broadened tools intelligent rolling efficient of the done more filtering but Let's CapEx on be of data storage and want network Data months XX tagging by slide We've great and - digitizing Analytics and forward ago, more

the later. matching more year. full some end making good in being our new David on the we're Our next which Workspace, ahead of customers tested And towards will also progress by rollout of launch of detail cover FX is platform of

of expect this £X the free cash post-dividend generate plus billion in of We July. over year, from proceeds flow to sale BETA

to of shows, meets some to comp. are about criteria. already create capital financial second accelerate you two our and CapEx pursuing with inorganic this talked putting work half weighted increasing We're we due XX and to acquisitions to shareholder growth XX. capital where generate consistent half. dividend, the strategic can managing And first scalability. as framework, we're value. on phasing our increase also the of investments business We making the actively management returns. Slide the Slide closed the I've and We're variable in we it investments see We're will As our our be cash

made we've Our we a business I progress a minute. into share buyback, last in is announced months. XX in our of interim dividend start deleveraging in the up XX the get And today, shows Slide which XX%. will the

Slide but XX%. to a a is that and our to our take full And specifics and Our intend we're I would over This is don't Leverage you between cash rate for XX% draw target within non-core around consistent thing to you shareholders surplus assets. One leverage of tax generation I framework, gives months naturally year complete. we go to models. now with expect in growth XX position reduce to time, and by lower the we've range. buyback. it through XX your disposed return attention capital million year, £XXX slightly guidance, this on will need your our

which We've on half. So seen pleased half. started, I continue Slide really into should I'm to XX, the growth, second this end our with high-quality, broad-based where performance

ahead year X% deliver revenue target, Our are stage. the firmly revenue unchanged. run our And on both and is is cost at on our we to X% synergies and track rate guidance to margin half

be back supporting David. And importantly, generation to more me cash investment progress hand a let in most making are and robust, agile now returns. efficient Our we building continues And great faster-growing, and business. to

David Schwimmer

Anna. you, Thank

Slide and the spend XX, few positioning we're the going through we're to from current strong better ongoing I'm minutes improving investments next and integration. on to Turning benefits how seeing execution our the

managers. of the our all global to and world the top the including asset vast are partner world's customers critical majority banks almost We a around top

solutions We the And prefer the value open our crucially, approach need. chain. strong leadership a that markets have that our we deliver is positions they with as partner model them financial customers across to

trading the Turning XX, our data it's about them more is so in very Customers and and many now, that. for who the are receptive known have trusted But and in to the providing circle decades and talked on. us new benefits through can executions data analytics that virtuous data we markets bring businesses our offerings. cases, to this executions to those drives I've than generating before: insight Slide

also objectives are growth content scalable and our data business, XX and efficient better, sets building and platform. our serving our integrating We strategic capabilities. customers an driving Slide out improving three our

are and strategy, We is working. executing this this on strategy

Slide that break more out XX. me Let starting on in detail,

customer led rigor our down customers. offering customer on in our sales run themes. since and XXXX. to retention, also day the incentives, We've into brought customer functions focus XXX XXX greater we up our more Within have day Our Analytics, a to solutions partner improving in with business centered us experience closely with nine enables the on segment, customer out to industry service and aligned core products our better basis teams this We're & bringing product over improved has together Data simplifying individual our distilling points more and focus. how than large

the LSEG's way give less We've positions. Tradeweb, helps capital of the rules To over banks customers will are ability in Trading on challenges Basel or FRTB and key in solution the next FRTB the positions that of Fundamental better I want bringing known FRTB to Slide for develop customers is SwapClear. oversimplify, the this with their those the quality unique the worked proprietary to looking couple of books, as aggregates have flexible differentiator. serve new provider only years Book the to range the Yield that to our Review bank Turning us deliver implemented capital hold a positioning under better. they our efficiently. example their creates be from to manage data have you III. banks will data and the of There valuable trading a a customers it Book great how data, against We're important and XX, a solution of our to capital together to

have financial what or Slide the is in and announced scalable a processing. we're Let currency of and efficient, also straight-through sell system the on to seamless to allow customer participants trading workflows participants. for FXall a hedge XX. create will LSEG powerful future the more collaborating June, to bonds buy example more We're Tradeweb emerging link to market opportunities to markets great markets In example emerging and me and currency bonds on investing This simultaneously platforms. create of are for exposure give another market with same workflow build we their that efficient, doing Tradeweb This swaps. value emerging market

in first support we NDF this be first book of a our of demand matching venue design stage FX venue that based integration to spot participants. later the NDF Turning plans year plans technology. with NDF of Matching announced venues the launch in launch the enable May, implement in I to testing of full represents venue trading and non-deliverable world-class LSEG's should This the replatforming new is mid-'XX access in market. also phase XX, the full Slide liquidity strong easier the a to for will to forward Matching all and or our in Asia. add into will the of for The production to Asian integration clearing Singapore open to from LSEG

Turning on XX, to Workspace, desktop solution. rollout progress making Slide our the we're excellent of next-generation

user We beta are trading of last version and types this the migrated. year. plan over by of live or all at ahead remaining form FX of be launched The for year, of Workspace beta of users XX% in end the with end now will

years. is While the is for the trading banking, plenty first we part seeing now time turnaround growing more and to there's still Workspace a in are do, in which of

and based compared value Importantly, to offerings functionality, ease prior of money. than for search customer more XX% is on with Workspace satisfaction use up

completed which Turning shareholder transactions. expands data Slide prevention see to also beginning which these of we services. acquisition of acquisitions. capabilities; value latency fraud continue through and our create We strategic XX, the identity to our benefits GDC, globalizes to into ultra-low offering digital enterprise We're the MayStreet, and

onboarded announced already since May. example, acquisition eight For the has new MayStreet customers in was

acquisition a should world, acquisition. with with is to these complete of create can we to approval. subject over their while close and the all shortly, small regulatory our of relatively value. incremental TORA our the on year, substantial by expect to combining connectivity of But end Quantile capabilities Each relationships We by the customers

cash to of announcement generate us lot buyback. XX, agile, investments strong In LSEG sheet Slide first more expect on allocation, continuing to We conclusion, positioned. growth business. strengthen balance in should and the to million of including to we our continue You a delivered strategic scalable and and share to the active offering. a a build a invest strong make performance, customer have an well approach is £XXX to with capital half efficient We're

Our we're up making for people and hear your pleased the by working. that, ahead. And it while excited come is the across questions. the let's I'm strategy With open I'll questions some by business. our great opportunities progress through, from