Euronext publishes Q2 2022 results

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Solid quarter driven by the sustained dynamism of non-volume activities and of trading operations. First revenue synergies related to the Borsa Italiana Group acquisition delivered.

Amsterdam, Brussels, Dublin, Lisbon, Milan, Oslo and Paris – 28 July 2022 – Euronext, the leading pan-European market infrastructure, today publishes its results for the second quarter 2022.

Q2 2022 revenue and income up +2.5% pro forma[1], compared to Q2 2021 underlying revenue and income[2], to €374.7 million (+14.0% reported, +€45.9 million) driven by the growth of non-volume related business and trading activities:

  • Non-volume related revenue accounted for 59% of Q2 2022 total revenue (vs. 60% pro forma in Q2 2021) and covered 144% of underlying operating expenses, excluding D&A (vs. 150% in Q2 2021 pro forma).
  • Contribution of the Borsa Italiana Group to revenue was €129.2 million.
  • Trading revenue grew to €129.2 million (+3.7% pro forma, +14.6% reported), resulting from a robust performance across all asset classes in a volatile market environment. Cash trading revenue was €75.3 million (+1.4% pro forma, +7.4% reported), reflecting strong revenue capture, and fixed income trading revenue was €24.9 million (+2.4% pro forma, +44.0 % reported).
  • Post-trade revenue grew to €93.9 million (+1.8% pro forma, +12.6% reported). Clearing revenue increased to €31.4 million (+5.5% pro forma, +18.0% reported) as a result of a volatile environment and net treasury income of Euronext Clearing was €15.7 million. Custody and Settlement revenue was €62.5 million (+0.1% pro forma, +10.1% reported) thanks to the resilience of the diversified Euronext Securities business model in a normalising settlement environment.
  • Euronext remained the leading venue for equity listing in Europe and for debt listing worldwide.  Euronext recorded 19 new equity listings in Q2 2022. Listing revenue grew to €55.4 million (+7.8% pro forma, +15.0% reported), demonstrating the resilience of the business and the attractiveness of the offering.
  • Advanced Data Services revenue grew to €52.0 million (+2.4% pro forma, +11.9% reported) due to a solid core data business performance.

Adjusted EBITDA[3] up +2.5% pro forma to €221.7 million (+12.3% reported, +€24.3 million) reflecting continued cost discipline and successful ongoing integration. Adjusted EBITDA margin at 59.2% (stable pro forma, -0.9pt reported):

  • Underlying operating expenses, excluding D&A, were €153.0 million (+2.6% pro forma, +16.4% reported), resulting from continued cost discipline in a context of ongoing integration.

Reported net income, share of the parent company shareholders, up +25.6% pro forma (+37.2% reported) to €118.9 million (+€32.2 million):

  • Net financing expenses were at €9.1 million and results from equity investments amounted to €1.2 million, impacted by an impairment. Income tax rate was 27.1%.

Adjusted EPS[4] was down -6.1% to €1.34[5].

Key figures for Q2 2022

In €m, unless stated otherwise

 Q2 2022

 Q2 2021

% var

% var l-f-l[6]

% var pro forma

Revenue and income

374.7

328.8

+14.0%

+2.4%

+2.5%

Underlying operational expenses excluding D&A

(153.0)

(131.4)

+16.4%

+3.3%

+2.6%

Adjusted EBITDA

221.7

197.4

+12.3%

+1.7%

+2.5%

Adjusted EBITDA margin

59.2%

60.0%

-0.9pt

-0.4pt

0.0pt

Net income, share of the parent company shareholders

118.9

86.6

+37.2%

 

+25.6%

Adjusted Net income, share of the parent company shareholders

143.2

134.6

+6.4%

 

 

Adjusted EPS (basic, in€) (share count differs between the two periods)

1.34

1.43

-6.1%

 

 

Reported EPS (basic, in€) (share count differs between the two periods)

1.11

0.88

+26.3%

 

 

Adjusted EPS (diluted, in€) (share count differs between the two periods)

1.34

1.43

-6.1%

 

 

Reported EPS (diluted, in€) (share count differs between the two periods)

1.11

0.88

+26.3%

 

 

Net debt to reported EBITDA[7] at 2.4x at the end of June 2022.

Climate commitment: Step up in Euronext ESG ‘Fit for 1.5°’ commitment setting ambitious emission reduction targets in line with the SBTi[8]. The first major step was achieved with the successful migration to a full green Core Data Centre in June 2022.

Continued momentum in the delivery of targeted synergies, in relation to the Borsa Italiana Group acquisition:

  • €24.1 million cumulated run-rate annual synergies achieved at the end of Q2 2022. €8.9 million run-rate annual synergies delivered in Q2 2022, mainly related to the first phase of revenue synergies arising from the successful migration of  Euronext’s Core Data Centre.  
  • €36.7 million of cumulated implementation costs incurred at the end of Q2 2022, of which €5.4 million during Q2 2022.

Significant quarter for the integration of the Borsa Italiana Group:

  • Successful move of Euronext’s Core Data Centre from Basildon, in the UK, to Bergamo, in Italy, paving the way for the migration of Italian cash and derivatives markets onto the Optiq® trading platform in 2023.
  • Euronext Clearing adoption of VaR methodology for fixed income instruments advancing the European expansion of Euronext Clearing[9].
  • Acceleration of the integration of MTS and Euronext Securities Milan through the contemplated acquisition of the technology businesses from Nexi’s capital markets activities[10].

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

“This second quarter of 2022 was marked by the continuation of the volatile environment seen since the first quarter of the year. Euronext’s business model again demonstrated its resilience, and generated solid growth in revenue, adjusted EBITDA and adjusted net income.

A key milestone in our ‘Growth for Impact 2024’ strategic plan was achieved with the successful migration of our Core Data Centre from Basildon, near London, to a fully green data centre in Bergamo, near Milan. This migration enables Euronext to deliver the first revenue synergies targeted under our 2024 strategic plan. This success paves the way to the migration of Italian cash and derivatives markets to the Euronext state-of-the-art European proprietary trading platform Optiq® by 2023. In addition, we pursued our integration work and we reached €24.1 million cumulated run-rate annual synergies in relation to the acquisition of the Borsa Italiana Group at the end of Q2 2022, 14 months after the closing of the transaction.

As previously announced, we disclosed our Fit for 1.5° climate targets, aligned with SBTi standards. These ambitious targets will be achieved through the transformation of our own operations without any purchase of any offsetting credit. These Euronext commitments have an impact on the whole ecosystem, engaging our suppliers to join forces with us for the creation of a more sustainable global financial system.”

 

[1]The variances on pro forma basis assume that the acquisition of the Borsa Italiana Group took place on 1 January 2021 and therefore include the Borsa Italiana Group financial performance for the entire comparative period. The Borsa Italiana Group financials were consolidated from 29 April 2021.

[2] Q2 2021 pro forma includes €6.5 million of non-underlying transitional income related to the Borsa Italiana Group acquisition in April 2021, prior to the acquisition

[3] Definition in appendix – Adjusted for non-underlying operating expenses excluding D&A

[4] Definition in appendix

[5] Basic weighted average number of shares at 106,616,256  for H1 2022, H1 2021 basic outstanding shares at 85,094,834 shares.

[6] Like-for-like revenue at constant currencies excludes in 2021 and 2022 the Borsa Italiana Group, Centevo and OMS as well as related integration costs.

[7] Last twelve months EBITDA pro forma the Borsa Italiana Group, reported EBITDA including costs previously reported as exceptional items

[8] Science-Based targets initiative. More information in the corporate highlights section of this document and at: https://www.euronext.com/en/about/media/euronext-press-releases/euronext-announces-its-science-based-climate-targets 

 

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About Euronext 
Euronext is the leading pan-European market infrastructure, connecting European economies to global capital markets, to accelerate innovation and sustainable growth. It operates regulated exchanges in Belgium, France, Ireland, Italy, the Netherlands, Norway and Portugal. With close to 2,000 listed issuers and around €5.8 trillion in market capitalisation as of end June 2022, 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, one of Europe’s leading electronic fixed income trading 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. The Group provides a multi-asset clearing house through Euronext Clearing, and custody and settlement services through Euronext Securities central securities depositories in Denmark, Italy, Norway and Portugal. 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 a number of junior markets, simplifying access to listing for SMEs.  
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