Euronext publishes Q2 2020 results

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SOLID SECOND QUARTER 2020 DRIVEN BY INCREASED TRADING VOLUMES IN ALL ASSET CLASSES AND CONTINUED BENEFITS FROM DIVERSIFICATION

Amsterdam, Brussels, Dublin, Lisbon, Oslo and Paris – 29 July 2020 – 17.45 CEST – Euronext, the leading pan-European market infrastructure, today announced its results for the second quarter of 2020.

 

  • Revenue at €210.7 million (+32.5%):
    • Trading revenue increased to €89.4 million (+34.0%), with growth across all asset classes and €6.7 million contributed by Nord Pool power trading. Like-for-like[1], trading revenue increased +19.0%. Recently launched single stock futures saw strong commercial traction and diluted derivatives overall trading yield
    • Post-trade revenue increased to €36.1 million (+64.5%), driven by the consolidation of revenue from VPS, the Norwegian CSD, and higher clearing revenue. Like-for-like, post-trade revenue increased +7.9%
    • Listing revenue increased to €36.1 million (+21.3%), driven by the consolidation of Oslo Børs VPS and the solid performance of Corporate Services at €7.9 million (+33.8% like-for-like). Like-for-like, listing revenue increased +6.0%
    • Advanced data services revenue increased to €35.8 million (+16.0%), as a result of the consolidation of Oslo Børs VPS and Nord Pool, and the good performance of the core business. Like-for-like, advanced data services revenue increased +6.1%
    • Nord Pool contributed €8.6 million[2]
    • Group non-volume related revenue[3] accounted for 49% of Q2 2020 total revenue (vs. 48% in Q2 2019), and covered 122% of operating expenses excluding depreciation & amortisation (vs. 124% in Q2 2019)
  • EBITDA at €125.4 million (+27.8%), with EBITDA margin at 59.5% (-2.2pts); like-for-like, EBITDA margin was 61.7%:
    • Group operating costs excluding D&A were up +€24.4 million to €85.3 million, primarily as a result of the consolidation of costs from acquired businesses currently undergoing integration
    • Euronext confirms its 2020 guidance for costs, excluding D&A, of mid-single digit[4] growth in 2020, compared to the H2 2019 annualised cost base, to reflect expected costs in H2 2020 related to the integration of Oslo Børs VPS and implementation of the strategic plan projects
  • Reported net income, share of the Group, at €82.1 million (+53.7%) and Adjusted EPS[5] at €1.23 (+33.1%)
    • Increased financing costs related to the interest expenses on the second bond issued in June 2019
    • Income tax rate at 25.1%, positively impacted by tax one-offs
  • Acquisition of VP Securities
    • Danish Financial Supervisory Authority clearance was received on 15 July 2020 and closing is expected early August 2020
    • 90.68% of total shares were tendered to the Euronext offer as of 15 July 2020[6]
    • Run-rate cash cost synergies[7] in year 3 are expected to reach €7 million, through optimised operating model, IT footprint optimisation and rationalisation of support functions
    • Restructuring provisions are expected to be incurred in Q4 2020

 

 

Key figures - in €m, unless stated otherwise

Q2 2020

Q2 2019

% var

Organic (like-for-like, constant currency)

Revenue

210.7

159.0

+32.5%

+12.4%

Operational expenses excluding D&A

-85.3

-60.9

+40.1%

+12.4%

EBITDA

125.4

98.1

+27.8%

+12.4%

EBITDA margin

59.5%

61.7%

-2.2 pts

0.0 pts

Net income, share of the Group

82.1

53.4

+53.7%

 

EPS (non diluted, adjusted)2

1.23

0.93

+33.1%

 

 

Stéphane Boujnah, Chief Executive Officer and Chairman of the Managing Board of Euronext, said:

“In the second quarter of 2020, Euronext delivered a solid performance with double digit growth across most asset classes, which, combined with continued cost control, translated into a higher EBITDA of €125.4 million and a +33.1% increase in adjusted EPS to €1.23. Euronext confirms its 2020 cost guidance of mid-single digit growth in 2020 compared to the annualised second half 2019 cost base, as costs related to the Oslo Børs VPS integration and strategic plan projects are expected to ramp up in second half 2020.

This second quarter, we also launched a suite of ESG products and services to empower sustainable growth. This constitutes an important milestone in the ESG roadmap of our three-year strategic plan ‘Let’s Grow Together 2022’. In addition, we became the first stock exchange to endorse the UN Global Compact’s nine Ocean Principles, having been an Official Supporter of the United Nations’ Sustainable Stock Exchanges initiative since 2015.

The third quarter has gotten off to a positive start for our ongoing diversification strategy, with the Danish FSA’s approval for the acquisition of VP Securities in July. We expect to close the transaction early August 2020, and the acquisition to be EPS accretive in full year 1. We are anticipating €7 million run-rate cash cost synergies in year 3, through organisational and IT optimisation, delivering a return in line with our investment criteria. The integration process has already started and we will report VP Securities’ revenue contribution from the third quarter.”

 

Unless stated otherwise, variations refer to Q2 2020 figures compared to Q2 2019 figures

[1] Like-for-like revenue are at constant FX rate and exclude in Q2 2020 Oslo Børs VPS, OPCVM360, Ticker and Nord Pool

[2] Refer to appendix for further details on Nord Pool revenue seasonality

[3] Volume-related businesses include Cash, Derivatives, Spot FX trading, Power trading, Clearing, and IPOs

[4] Based on H2 2019 reported operating costs excluding D&A, excluding Nord Pool

[5] Definition in Appendix

[6] Adjusted for treasury shares

[7] Definition in Appendix

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About Euronext
Euronext is the leading pan-European market infrastructure, connecting local economies to global capital markets, to accelerate innovation and sustainable growth. It operates regulated exchanges in Belgium, France, Ireland, The Netherlands, Norway and Portugal. With close to 1,500 listed issuers worth €3.8 trillion in market capitalisation as of end September 2020, it has an unmatched blue chip franchise and a strong diverse domestic and international client base. Euronext operates regulated and transparent equity and derivatives markets and is the largest centre for debt and funds listings in the world. Its total product offering includes Equities, FX, Exchange Traded Funds, Warrants & Certificates, Bonds, Derivatives, Commodities and Indices. Euronext also leverages its expertise in running markets by providing technology and managed services to third parties. In addition to its main regulated market, it also operates Euronext Growth® and Euronext Access®, simplifying access to listing for SMEs. Euronext provides custody and settlement services through central securities depositories in Denmark, Norway and Portugal.
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Disclaimer
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