London Stock Exchange Group plc

Good morning and welcome to the investor and analyst call for ELSEG's first quarter 2025 trading update. At this time, all participants are in listen-only mode. Later, we will conduct a question and answer session through the phone lines and instructions will follow at that time. I would like to remind all participants that this call is being recorded. I will now hand over to Peregrine Riviere, Head of Investor Relations, to open the presentation. Please go ahead.

Thanks, Paulie. Good morning, everyone, and welcome to LSEC's First Quarter Update. I'm here with David and Matt. Matt will make some brief opening remarks on our Q1 performance, and then we'll open up to questions on the conference call line. So let me hand over to him right now.

Thanks, Peregrine, and good morning, everyone. Glad to be with you today. We have started the year well, with total income growth of 8.7% on a constant currency basis. This includes 90 basis points of M&A benefit, mainly from the ICD acquisition within TradeWeb. That leaves organic growth of 7.8%, and I will actually refer to this metric through the rest of my comments. Our subscription businesses all perform well, with DNA showing continued slight acceleration, while our market businesses capture the upside of higher volumes. So this good all-around performance shows the strengths of our diversified all-weather model. Turning first to data and analytics, organic growth was 5.1%, a slight acceleration from the previous quarter, 4.8%. All three businesses performed well. Workflow's revenue was up 3.4% with commodities, an area of particular strength in the quarter. We continue to enhance the platform with a very strong pipeline of new features in the months ahead. We are closely supporting customers on the final ICON migration, and we are on track to sunset ICON at the end of June. In data and feeds, growth of 6.6% was a little ahead of the Q4 rate, with both real-time and PRS performing well. We continued to add new low latency feeds and cloud solution, and we saw good demand for fixed income corporate action data and our expanded evaluated pricing offering. And in analytics, we showed strong acceleration to 7.4%, driven by demand for YieldBook and Leaper, and enhanced by the good take-up of our analytics API, one of the first products we've built with Microsoft. product development with Microsoft continues to make good progress with a number of significant launches in the second half of 2025, including open directory. Finally, a couple of weeks ago, we were delighted to announce the co-heads of DNA. We have hired Gianluca Biagini from S&P, bringing over 25 years of financial information industry experience with him. And he will be joined by Ron Lefferts, who moves over from his role running sales and account management. They bring together highly complementary skills and track records. Turning now to FTSE Russell, our index and benchmark business. Overall organic growth was 9.6%, very similar to the growth rate seen through 2024. Subscription growth was 8.2%, reflecting ongoing demand for flagship equity indices and benchmarks. Asset-based revenue was up 12.5%, supported by good inflows and higher average market values. The decline in U.S. markets over the past weeks, as well as flows from the U.S. fund into global fund, will likely lead to a slightly lower contribution to growth from asset-based fees in the coming quarters. Risk intelligence continues to grow double-digit at 10.7%. WorldCheck maintains its strong momentum, and our digital identity and fraud business also perform well. Now a word on ASV, which encompasses all of the subscription business of the three divisions I just covered. ASV grows to that 6.4% at the end of Q1, a small increase from the end of Q4. Within this, DNA has improved strongly year on year, reflecting the good progress we've made with new products and displacement. FTSE Russell and Risk Intelligence are showing slightly slower ASV growth than a year ago, which just reflects some normalization of their growth rates. Moving on to our new markets division, which combined the previous capital markets and post-trade division. This reflects both their management under Daniel McGuire and also how customers think about their own businesses, Growth in Q1 was 10.7%, a slight improvement on Q4 and a continuation of the double-digit growth over the last four quarters. TradeWeb started the year well, combining strong execution with favorable market conditions. The business continued to grow its shares in rates and credit. Fixed income growth overall was 17.3%. ICD acquired in August last year is performing very well, and the integration is progressing as planned. Equities growth was 3.1%. We saw strong volume-driven growth in secondary markets, although this was partly offset by subdued primary revenue growth. FX achieved a third consecutive quarter of double-digit growth at 12.3%, mainly reflecting a very active market. We have continued to see strong trading volumes across all asset classes throughout April. Moving on to our post-trade businesses, performance here continue to be very strong considering the headwinds of the Euronext exit, which will last through August of this year, with an impact of around £30 million. And I will end my opening remarks on capital allocation and our balance sheet. As you know, we announced a buyback with our full year result in February. And as of last night, we had completed £245 million of the £500 million programme at an average price of £110.31. We also undertook another tender offer of our 2031 bond, buying back a further $250 million in a repeat of our December tender in another NPV positive transaction. So all in all, it has been another good quarter and we have started the year well. The combination of attractive growth in our subscription businesses and the market exposure in our high-quality market infrastructure platform is continuing to deliver positive results. The rate of investment and innovation remains high, ensuring a strong pipeline of new services in the months and years ahead. And we are reconfirming all our financial guidance, demonstrating the resilience of our all-weather model in the face of an uncertain outlook. And so now we are happy to take your questions again.