LSEG chief confirms plans for Blackstone buyback following strong 2022 results

The exchange group reported a 5.7% growth in total income, with CEO David Schwimmer calling it a “strong year” and highlighting the benefits of diversification.  

David Schwimmer

The diversification strategy undertaken by the London Stock Exchange Group (LSEG) is paying off, according to CEO David Schwimmer as he reported the group’s 2022 results today: highlighting broad-based growth and strong execution.  

“LSEG has had a strong year, successfully integrating Refinitiv and significantly improving its performance, while also delivering strong results in our Capital Markets and Post Trade businesses,” said Schwimmer. “The resilience of our business model and the quality of our earnings, diversified by customer, geography, product and asset class, and over 70% subscription-based, are becoming increasingly clear.” 

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The group posted total income (excluding recoveries) of £7.428 billion for the year, up 5.7% on 2021 (6.6% excluding the impact of the Russia/Ukraine war), along with (adjusted) operating profit of £2.728 billion – an increase of 4.6% on the previous year. Data and analytics grew 4.2% (5.3% ex. Russia/Ukraine) while capital markets grew 9.8% and post-trade was up 7.5%.  

Adjusted earnings per share grew 16.7% to £3.17 while equity free cash flow remained strong at £1.7 billion before dividends.  

The steady growth and strong profits would seem to justify LSEG’s diversification plan, which Schwimmer has promoted since joining in 2018, led by the flagship £27 billion acquisition of Refinitiv from Thomson Reuters in 2021.  

“Our strategy is working. We are an increasingly important strategic partner to customers across the financial markets value chain, and that is translating into growth,” said Schwimmer. The group continues to invest in new products and services, including the acquisitions of margin processing specialist Acadia in 2022 to strengthen its post-trade processes, along with market data solutions provider Maystreet, and cloud-based technology provider TORA, as well as signing a 10-year strategic partnership with Microsoft which includes an equity investment by the latter into LSEG shares.  

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In addition to the group’s existing share buyback, which commenced in August 2022 and of which around £300 million has already been executed, Schwimmer today confirmed plans to seek shareholder approval for a buyback of the stake currently owned by the Blackstone/Thomson Reuters consortium. The stake accounted for around 30% at the time of the acquisition; and is expected to be worth up to £750 million by April 2024.  

“We are shifting from integration to transformation. Our strategic partnership with Microsoft, as well as the investments we are making in our market-leading infrastructure and venues, will create an even stronger platform for long-term sustainable growth,” said Schwimmer.