London Stock Exchange : LSEG Annual Report 2023

O P E N M A K E S M O R E P O S S I B L E

London Stock Exchange Group plc Annual Report 2023

Partnering to transform our industry

O P E N M A K E S M O R E P O S S I B L E

Partnering to transform our industry

We build partnerships across our industry that facilitate innovation, build trust and improve efficiency. See the case studies on the following pages to learn more about our partnerships in action…

CASE STUDY		CASE STUDY
Partnering to transform		Partnering to transform
our industry: Microsoft		our industry: BlackRock

18		24
CASE STUDY		CASE STUDY
Partnering to transform		Partnering to transform
our industry: HSBC	our industry: Post Trade Solutions

3242

Contents

STRATEGIC REPORT

Who we are

LSEG is a leading global financial markets infrastructure and data provider. We play

a vital social and economic role in the world's financial system. With our trusted expertise and global scale, we enable the sustainable growth and stability of our customers and their communities.

Our purpose

Driving financial stability, empowering economies and enabling customers to create sustainable growth.

Strategic Report

Approval of the Strategic Report is provided in the

Directors' Report on page 154.

LSEG at a glance	02
Our business model	04
Market trends and our response	08
Chair's statement	10
Chief Executive Officer's statement	12
Executive management team	14
A compelling investment story	16
Partnering to transform our industry: Microsoft	18
Key performance indicators	20
Partnering to transform our industry: BlackRock	24
Our purpose and strategy	26
Partnering to transform our industry: HSBC	32
Divisional review: Data & Analytics	34
Divisional review: Capital Markets	38
Divisional review: Post Trade	40
Partnering to transform our industry: Post Trade Solutions	42
Chief Financial Officer review	44
Financial review	48
Sustainability	58
Board engagement with stakeholders	69
Section 172(1) Statement	75
Principal risks and uncertainties	79
Financial viability statement	89

Governance

Corporate governance introduction	92
Board of Directors	94
Corporate governance report	98
Complying with the provisions of the Code	105
Report of the Nomination Committee	106
Report of the Audit Committee	109
Report of the Risk Committee	115
Directors' Remuneration Report	117
Directors' Report	154
Statement of Directors' responsibilities	159

Financial Statements

Independent Auditor's Report	162
Consolidated income statement	171
Consolidated statement of comprehensive income	172
Consolidated balance sheet	173
Consolidated statement of changes in equity	174
Consolidated cash flow statement	175
Notes to the consolidated financial statements	176
Company balance sheet	241
Company statement of changes in equity	242
Notes to the Company financial statements	243

Shareholder Information

Glossary	255
Investor Relations	259

London Stock Exchange Group plc

10 Paternoster Square

London EC4M 7LS

Telephone: [phone]

Registered in England and Wales

No. 5369106

Further information on London Stock Exchange Group can be found at: www.lseg.com.

01	London Stock Exchange Group plc
	Annual Report 2023

LSEG at a glance

What we do

We are leaders in data and analytics; capital formation and trade execution; and clearing and risk management. Our businesses are discussed in depth in our divisional reviews on pages 34-41.

Our divisions

For more detail on our divisions - refer to pages 34-41.

We are an integral partner for our customers across every stage of the trade lifecycle, in multiple asset classes.

Data & Analytics

High-value data, analytics and indices, with solutions to manage risk, workflow and data.

Capital Markets

Venues/platforms to raise or transfer capital through issuance and secondary market trading for equities, fixed income and foreign exchange (FX).

Post Trade

Clearing, risk management, capital optimisation and regulatory reporting solutions.

Our purpose

We drive financial stability

by operating businesses that are of systemic importance, fundamental to the financial ecosystem and critical to our customers.

We empower economies

by helping our customers to raise capital, support employment, innovate and access global financial networks, across multiple asset classes.

We enable customers to create sustainable growth

by providing the tools and data that enable financial markets to manage risk and make informed investment decisions.

For more detail on our purpose - refer to page 26.

Our strategy

For more detail on our strategy - refer to pages 27-30.

Our long-term strategy builds on our strengths, as we invest in solutions and services that can adapt and scale in evolving global financial markets. We are:

Globally essential

Critical infrastructure and insight to customers required for the efficient running of financial markets.

Multi-asset class

Across traditional and emerging asset classes, in both public and private markets.

Seamlessly connected

Partnering with customers, enabling connectivity across the financial markets value chain through open platforms and venues.

02	London Stock Exchange Group plc
	Annual Report 2023

LSEG at a glance continued

How we performed

Our financial performance in the year, including the below metrics, are discussed in more detail in our financial review on pages 44 to 57.

STRATEGIC REPORT

Financial highlights1

+7Total income.8%growth excluding recoveries2

2022: +19.6%

138Basic earnings per.share9p

2022: 141.8p

£Operating1,371mprofit

2022: £1,417m

115Dividends per.share0p

2022: 107.0p

Adjusted financial highlights1,3

Total income growth excluding recoveries2	(constant currency basis)		Adjusted EBITDA margin
+8.3%		47.2%4
2022: +5.7%		2022: 47.8%
Adjusted operating profit			Adjusted earnings per share
£2,862m	323.9p
2022: £2,728m		2022: 317.8p
Sustainability highlights
42%			236
Female representation at senior leadership		Sustainable issuers
2022: 40%		2022: 217
Reduction in carbon emissions5
-29%
	For a full list of our key performance indicators -
2022: -57%		refer to pages 20 to 23.

1. Continuing operations
2. Recoveries relate to fees for third-party content, such as exchange data, that is distributed directly to customers.
3. Adjusted figures exclude the impact of any non-underlying items. For more information on the criteria that constitute non-underlying items, see page 181.
4. On the basis of our c.48% EBITDA margin guidance for 2023 (excluding the impact of FX movements and the acquisition of Acadia), adjusted EBITDA margin was 48.0%.
5. Reduction of Scope 1, Scope 2 (market), Scope 3 (selected - business travel, home working, commuting, FERA) emissions vs a 2019 baseline.

03	London Stock Exchange Group plc
	Annual Report 2023

Our business model

LSEG is well positioned to deliver long-term sustainable growth.

Five factors underpin the value we deliver:

1

We are a leading provider of financial markets data and infrastructure

2

We bring deep expertise and a trusted reputation across the financial markets value chain

3

We are exposed to structurally high growth markets

4

We generate high-quality revenue that is mostly recurring in nature

5

We consistently invest for growth

1

We are a leading provider of financial markets data and infrastructure

Across our business divisions we provide products and services that are essential to financial markets. These include:

Data and distribution

Workspace provides end users with access to critical financial data, news, our workflow platform and content from over 150k data sources. Our real-time feeds drive trading and investment decisions across multiple latencies, delivering data covering more than 80 million instruments through proprietary distribution channels as well as partner applications. Our Customer & Third-Party Risk business provides risk screening, identity and account verification and customer onboarding services.

Our real-time data covers		Our World Check One
>80m	offering processed
instruments	176bn
	screens in 2023

World-class indices

FTSE Russell provides indices supporting trillions in global assets under management (AUM), enabling investment flow for the buy-side.

2023 FTSE Russell		2023 FTSE Russell
ETF AUM	ESG passive AUM
>$1.2tn	$262bn

Leading venues

We operate leading equities venues including London Stock Exchange Main Market and LSE Alternative Investment Market (AIM). In FX and in Fixed Income (through Tradeweb), we operate leading global dealer-to-dealer and dealer-to-client venues.

2023 FX total ADV1		2023 Tradeweb rates - cash ADV1
$442bn	$367bn

Critical infrastructure

Through LCH, we operate a leading global clearing house with a >90% share of cleared interest rate swap notional outstanding. Our infrastructure underpins capital movements being made by the largest financial institutions around the world.

SwapClear client trades in 2023		CDS notional cleared in 2023
3.2m	€4.8tn

Uniquely positioned

We are trusted by customers, partners and regulators as a provider of critical infrastructure. This stems from decades of experience operating trading venues, clearing systems and data and analytics infrastructure.

Bringing together this differentiated combination of capabilities is enabling scale and new value creation as we serve financial markets. As the boundaries between data and infrastructure blur, we will generate

new areas of opportunity and collaborative customer partnerships:

• Innovative trading and risk analytics.
• Improved workflow connectivity.
• More connected and intelligent data sets.
• New cloud-based models - Data-as-a-Service,Platform-as-a-Service,Analytics-as-a-Service.

04	London Stock Exchange Group plc
	Annual Report 2023

Our business model continued

2

We bring deep expertise and a trusted reputation across the financial markets value chain

For more information on each of our divisions - refer to our divisional reviews on pages 34 to 41.

Data & Analytics	Capital Markets		Post Trade
A leading provider of high-value financial	A global operator of leading capital raising		A leading provider of clearing,
markets data, indices and analytics.	and trading venues in multiple asset classes.		risk management and capital
					optimisation solutions.
	Income		Income		Income
£5.3bn	£1.5bn		£1.2bn
	Share of Group income2 66%		Share of Group income2 19%		Share of Group income2 15%

STRATEGIC REPORT

Growth2

+7.3%

Highlights

• #1 real-time data business.
• A leading global index and benchmark provider (FTSE Russell).
• Leading provider of Know Your Customer screening though World-Check.

Other market participants include: Bloomberg

S&P Global

1. Average daily volume.
2. Proportion of total Group income, excluding recoveries.
3. Growth is on a constant currency basis.

Growth2

+6.1%

Highlights

• A leading dealer-to-client FX platform (FXall) and leading global interbank FX venue.
• A leading fixed income, derivatives and ETF electronic trading platform (Tradeweb).
• #1 European exchange by capital raised.

Other market participants include: CBOE Global Markets

Euronext

Growth (including NTI)2

+17.4%

Highlights

• Leading global clearing house with >90% global share of cleared interest rate swap notional outstanding.

Other market participants include: CME Group

Deutsche Boerse AG

05	London Stock Exchange Group plc
	Annual Report 2023

Our business model continued

3

We are exposed to structurally high growth markets

We have built a global footprint that enables us to serve a broad range of customers around the world.

Growing markets

We serve multiple asset classes and growing liquidity pools, including equities, FX and fixed income markets. Through our Data & Analytics business we are also able to capitalise on the growing demand for data, insight and automation. We expect this demand to accelerate further as the adoption of cloud, AI and automation continues to increase in the coming years.

For more information on relevant market trends and our responses

- refer to pages 08 and 09.

Diverse geographies

We have a balanced global exposure, generating 43% of income in EMEA, 42% in the Americas and 15% in APAC. This is supported by the distribution and diversity of our people - with 56% of our headcount based in APAC, including our leading operations and customer support hubs in Bengaluru, Manila and Colombo.

Revenue by geography1

Americas 42%

EMEA 43%

APAC 15%

1 Total income including recoveries.

Significant customer relationships

We are dedicated partners to our customers across the entire trade lifecycle, with an open model and commitment to excellence.

We are a leading partner for the financial services sector, with customers including the world's largest banks, buy-side and sell-side trading desks, asset managers and owners, wealth advisers and hedge funds.

Additionally, we support critical central banking and regulatory institutions with our solutions. We have a sizeable and growing footprint across corporate communities, serving 47 of the 50 largest corporates globally, with offerings including FX hedging solutions, risk management tools and capital raising.

Customers we serve

45,000+

Customers out of the top 100 global banks by total assets1

100

Customers out of the

50 largest corporates by market capitalisation1

47

Employees by geography

Americas 12%

EMEA 32%

APAC 56%

1 As of February 2024.

06	London Stock Exchange Group plc
	Annual Report 2023

Our business model continued

4

We generate high-quality revenue that is mostly recurring in nature

We generate more than 70% of our income through recurring revenue associated with data subscriptions and licences. This business model benefits from a consistently high level of retention, contracts that are typically 12-24 months in duration and improving performance in our Annual Subscription Value (ASV).

We are well positioned to capitalise on growing pools of transactional income through our venues. This includes Tradeweb, which continues to benefit from the electronification of rates and credit markets, and other businesses positioned to attract liquidity flow such as FXall

(FX dealer-to-client), Matching (FX dealer-to-dealer) and LCH which benefits from volume growth in swaps and other OTC derivative markets.

Recurring revenue

Visible revenue

Mostly subscription and licence revenue, typically 12-24 month contract duration.

Highly diversified

Revenues are broadly based across activity, product, geography and >45,000 customers.

Strong customer relationships

Consistently high retention.

Transactional revenue

Diversified pool of revenue, growing across Post Trade and Capital Markets, driven by strong Tradeweb performance.

Total income excluding recoveries

Recurring revenue 72%

Transactional revenue 24%

Net treasury income 4%

5

We consistently invest for growth

We are highly cash generative, allowing us to invest organically in new products and services, continually modernise our infrastructure and acquire businesses that are complementary to our business model and distribution footprint. In 2023 we continued to invest in our business, through a combination of building new products to drive organic growth, transforming our technology and continuing to ensure our systems

are resilient and secure. We also completed the acquisition of Acadia, supporting our development of innovative post trade solutions and unlocking the growth potential of the business within the Group.

For more information on this acquisition, see our Post Trade 2023 highlights on page 41 and a case study on our Post Trade Solutions offering on page 43.

Our 10-year strategic partnership with Microsoft will also help build next-generation services that empower customers to generate business insights, automate complex and time-consuming processes and ultimately, do more with less. For more information on our partnership and how we are investing in joint product development alongside Microsoft, see page 19.

More detail on capital allocation can be found in our Chief Financial Officer's review on page 46 and on our website: www.lseg.com/investor-relations/.

STRATEGIC REPORT

07	London Stock Exchange Group plc
	Annual Report 2023

Market trends and our response

Demand for data and its integration into workflows

Growth in global demand for high-quality, precision time stamped and differentiated datasets from flexible, reliable and traceable data, which offer choice of on-premiseand cloud service delivery.

What is LSEG's response?

We continue to invest in our real-time and pricing offerings to add more latency options and we are embracing automation to improve the quality and breadth of our data across asset classes. We are focused on maintaining our position as the #1 real-time data provider by offering more choice in public and private cloud, and managed on-premise solutions.

Example of this in action

Our Real-Time Optimised service, hosted on the public cloud, provides fast and simple access to our unparalleled content from hundreds of exchanges and OTC markets around the world allowing our customers depth of content, choice of service and delivering speed to market.

With increasing automation and liquidity fragmentation and evolving regulation, there is a growing need for smarter, faster, safer trading platforms, enabling end-to-endtrading workflows, with access to liquidity, data and execution. We can also be affected by evolving regulation ourselves.

What is LSEG's response?

We are joining up all our workflows across multiple areas of our businesses to create seamless and interoperable offerings for our customers. We also continue to work closely with regulators on an ongoing basis. For example, we have been in ongoing dialogue with the Financial Conduct Authority (FCA) as they conduct their study into the wholesale data market. We await their findings as they look to assess the competitive landscape of this space.

Example of this in action

We are integrating our recently acquired Order and Execution Management System (OEMS) platform, TORA, into Workspace. This will create an end-to-endbuy-side workflow solution for traders and fund managers, with seamless access to, and interoperability with, our datasets and analytics.

The continued global focus on growth that is sustainable in all senses

is driving increasing demand for sustainably-linked investments and products. Investors are increasingly allocating capital to sustainable portfolios and strategies, while market participants are integrating sustainability into workflows and business models, in many cases driven by emerging regulatory requirements that differ by market.

What is LSEG's response?

We are developing new products to deliver on our commitment to enable sustainable growth for our customers and their communities.

Example of this in action

Our new climate data package includes an expanded set of reported data measures, sophisticated analytics, new climate emission estimate models and third-party data from the Carbon Disclosure Project (CDP). This solution consolidates our capabilities on climate to help our clients manage climate risk, build investment strategies and products, and report on climate transition.

Rise of new technologies including AI

Cloud-enabled business models such as Data-as-a-Service(DaaS), Data-Management-as-a-Service(DMaaS) and Analytics-as-a-Service(AaaS) are emerging as firms look to build new solutions and do more with data and analytics.

What is LSEG's response?

We are developing new and innovative data and analytics solutions for our clients in the cloud, enabled by our multi-cloud approach.

Example of this in action

Our next-gen content offering is reinventing the data experience for our customers and addressing the growing number of challenges they face around handling data. This is being done in partnership with Microsoft - for more information on this partnership, see page 19.

Process automation, machine learning and AI continue to create opportunities for operational efficiencies, alongside the development of new innovative products.

What is LSEG's response?

We have been using AI and machine learning across our business for many years and we continue to build AI functionality into our platforms and workflows. Our peers are also investing and innovating in this evolving space, leading to increased competition and quality of AI-powered products and services.

Example of this in action

Two examples of AI in our offering include: 1) Content ingestion in our Data & Analytics business, which uses natural language processing (NLP) to automate transcripts of company webcasts, reducing average processing time of transcript summaries into Workspace; and 2) Advanced Dealing, our fully integrated, cloud-based FX trading environment with AI-powered,chat-driven trading functionality.

The rise of Large Language Models (LLMs) and generative AI drives both a need for ever more expansive data sets and the opportunity for businesses to access more data, in faster, more efficient and trusted ways.

What is LSEG's response?

We are using generative AI to further modernise our business, enhance customer productivity and unlock operational efficiencies. We aim to be the trusted provider of financial services data for usage by AI models across financial services, leveraging our data breadth, quality and auditability.

Example of this in action

We have a bespoke AI framework, tailored using our data and IP, to generate insights and create intelligent workflows. Furthermore, in partnership with Microsoft we are developing AI-powered copilots and solutions to be delivered through Microsoft platforms, which will ease discoverability

and usage of our data.

Buy-side market participants who believe market data spending	Proportion of financial service firms actively adopting
80%	62%
will rise over the next 12 months	AI technology

08	London Stock Exchange Group plc
	Annual Report 2023