Interim results for six months ended 30 June 2024
Delivering on all fronts in H1: consistent growth, improving profitability, strong product pipeline and significant shareholder returns
David Schwimmer, CEO said:
“We have finished the first half strongly, maintaining our momentum in Q2 with every business line contributing to revenue growth. This reflects the strength of our proposition, the improvements we have made to our products and the depth of our relationships with customers.
“Our high pace of innovation continues. We have made significant enhancements to Workspace, leading to several competitor displacements. We are building on our leadership in data, expanding our pricing and reference content substantially and adding over 70 new feeds to our low-latency data coverage. The recent strategic partnership with Dow Jones also brings leading breadth in news coverage. In FTSE Russell, we are seeing strong demand for our differentiated climate transition and multi-asset solutions. Our Post Trade Solutions businesses are gaining momentum, particularly in FX forwards optimisation. Tradeweb had an outstanding first half, growing share in a strong marketplace. Our partnership with Microsoft is approaching commercialisation as the first product becomes more widely available by year-end.
“We are also delivering efficiency improvements, with underlying margin improving year-on-year despite ongoing investment, and we expect this trend to continue. We look forward to further progress in the second half of the year, and are reiterating all of our medium-term guidance.”
| Six months ending 30 June, reported | 2024 £m | 2023 £m | Variance % | Constant currency variance% | Organic constant currencyvariance% | |
| Total income (excl. recoveries) | 4,204 | 3,990 | 5.4% | 7.6% | 7.1% | |
| Recoveries1 | 185 | 189 | (2.1%) | 0.6% | 0.6% | |
| Total income (incl. recoveries) | 4,389 | 4,179 | 5.0% | 7.3% | 6.8% | |
| Reported | ||||||
| EBITDA | 1,944 | 1,774 | 9.6% | |||
| Operating profit | 812 | 745 | 9.0% | |||
| Profit before tax | 693 | 662 | 4.7% | |||
| Basic earnings per share | 64.7 | 77.2 | (16.2%) | |||
| Dividends per share | 41.0 | 35.7 | 14.8% | |||
| Adjusted2 | ||||||
| Operating expenses before depreciation, amortisation and impairment | (1,759) | (1,718) | 2.4% | 6.4% | 5.7% | |
| EBITDA | 2,040 | 1,888 | 8.1% | 8.4% | 8.4% | |
| EBITDA margin | 48.5% | 47.3% | ||||
| Operating profit | 1,563 | 1,434 | 9.0% | 8.8% | 8.9% | |
| Adjusted earnings per share | 174.0 | 160.9 | 8.1% |
| Financial highlights | |
| (All growth rates relate to H1 and are expressed on an organic, constant currency basis unless otherwise stated) | |
| · | Total income (excl. recoveries) up 7.1%; up 5.4% on a reported basis |
| · | Good momentum in Q2: Total income (excl. recoveries) +7.8% |
| · | All divisions performing well: Data & Analytics +4.3%, FTSE Russell +11.5%, Risk Intelligence +11.5%, Capital Markets +17.4%, Post Trade stable after strong 2023 |
| · | Annual subscription value (ASV) up 6.4% at June 2024, in line with guidance |
| · | Improving profitability: Adjusted EBITDA margin 48.5%, +120 bps. Underlying performance +50 bps and FX-related impacts +70 bps |
| · | Adjusted net finance costs of £112 million, mainly reflecting the cost of refinancing in the current higher interest rate environment and higher net debt |
| · | Adjusted EPS +8.1% to 174.0p reflecting strong income growth, good cost control and a lower share count |
| · | Basic EPS -16.2% on a reported basis due to increasing non-underlying amortisation from the Refinitiv acquisition and a higher reported tax rate |
| · | Free cash flow up 29% to £761 million; leverage (net debt to EBITDA) 2.0x |
| Strategic progress and outlook | |
| · | All medium-term guidance reiterated: mid to high single digit organic revenue growth annually, accelerating after 2024; underlying EBITDA margin to increase over time; capex to decline to high single digit % of income ex recoveries over time |
| · | Strong cadence of product innovation: multiple Workspace enhancements, significant expansion of low-latency feeds, new climate transition and multi-asset index products, initial traction in Post Trade Solutions |
| · | Dow Jones content agreement creates leading news offering across LSEG platforms |
| · | Joint product development with Microsoft on-track: first products in general availability in H2 |
| · | Tradeweb entering attractive corporate segment with acquisition of ICD |
| · | Significant shareholder returns: £1 billion returned via buybacks in H1, directed at holdings of Blackstone consortium. Interim dividend +14.8% to 41.0p per share3, to be paid on 18 September 2024 to all shareholders on the share register at the record date of 16 August 2024. The ex-dividend date is 15 August 2024. |
| · | Share overhang eliminated with Blackstone consortium holdings now under 2% |