Euronext publishes Q3 2022 results

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Solid quarter demonstrating Euronext’s diversified business model and continued cost discipline, in line with 2022 cost guidance

Amsterdam, Brussels, Dublin, Lisbon, Milan, Oslo and Paris – 3 November 2022 – Euronext, the leading pan-European market infrastructure, today publishes its results for the third quarter 2022.

  • Q3 2022 underlying revenue and income was stable compared to Q3 2021 underlying revenue and income[1], at €350.3 million (-0.1%[2] reported, -€0.3 million, reported revenue and income at €301.4 million) illustrating the strong performance of non-volume related business:
    • Non-volume related revenue accounted for 59% of Q3 2022 underlying revenue1 (vs. 57% in Q3 2021) and covered 138% of underlying operating expenses, excluding D&A (vs. 142% in Q3 2021).
    • Trading revenue was down at €117.8 million (-6.0% like-for-like, -5.2% reported), resulting from lower cash equity and MTS Cash volumes, partially offset by efficient yield management and strong quarters for FX, derivatives and power trading.
    • Post-trade revenue (excluding NTI) grew to €86.2 million (+2.2% like-for-like, +3.7% reported). Custody and Settlement revenue was €57.1 million (+0.5% like-for-like, +2.8% reported) thanks to the diversified Euronext Securities business model in a normalising settlement environment. Clearing revenue increased to €29.1 million (+5.5% like-for-like, +5.5% reported) as a result of growing bonds and derivatives clearing activity. Net treasury income for Euronext Clearing was -€38.3 million, including -€49.0 million of non-underlying pre-tax loss following the partial disposal of the Euronext Clearing portfolio1, as announced in Euronext second quarter 2022 results.
    • Listing revenue grew to €54.0 million (+5.9% like-for-like, +6.3% reported), demonstrating the resilience of the business in tough market conditions. Euronext remained the leading venue for equity listing in Europe and for debt listing worldwide. Euronext recorded 18 new equity listings in Q3 2022. Four new companies joined the new Euronext Tech Leaders segment following its launch in June 2022.
    • Advanced Data Services revenue grew to €53.0 million (+6.5% like-for-like, +6.3% reported), driven by a strong performance across the offering.
  • Adjusted EBITDA[3] was at €199.9 million (-4.4% reported, -9.2 million) reflecting continued cost discipline in an inflationary environment. Adjusted EBITDA margin was at 57.1% (-2.6pts like-for-like, -2.6pts reported):
    • Underlying operating expenses, excluding D&A, were €150.4 million (+5.6% like-for-like, +6.3% reported), in line with 2022 cost guidance of €612 million of underlying costs.
  • Reported net income, share of the parent company shareholders, was down -34.5% to €75.8 million (-€40.0 million), mainly due to the non-underlying one-off loss in net treasury income:
    • Net financing expenses were at €4.6 million and results from equity investments amounted to €1.7 million. Income tax rate was at 26.2%.
  • Adjusted EPS[4] was down -3.2% at €1.21[5].
  • Key figures for Q3 2022:

In €m, unless stated otherwise

Q3 2022

 Q3 2021

% var

% var l-f-l[6]

Revenue and income

301.4

350.6

-14.0%

-0.8%

Underlying revenue and income1

350.3

350.6

-0.1%

-0.8%

Underlying operational expenses excluding D&A

(150.4)

(141.5)

+6.3%

+5.6%

Adjusted EBITDA

199.9

209.1

-4.4%

-5.2%

Adjusted EBITDA margin

57.1%

59.6%

-2.6pts

-2.6pts

Net income, share of the parent company shareholders

75.8

115.8

-34.5%

 

Adjusted Net income, share of the parent company shareholders

129.5

137.0

-5.5%

 

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

1.21

1.25

-3.2%

 

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

0.71

     1.08

-34.2%

 

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

1.21

1.25

-3.2%

 

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

0.71

1.08

-34.2%

 
  • Net debt to reported EBITDA[7] was at 2.3x at the end of September 2022.
  • Continued delivery of targeted synergies in relation to the Borsa Italiana Group acquisition:
    • €24.4 million cumulated run-rate annual synergies achieved at the end of Q3 2022. €0.3 million run-rate annual synergies delivered in Q3 2022.  
    • €37.9 million of cumulated implementation costs incurred at the end of Q3 2022, of which €1.2 million during Q3 2022.
  • Continued advancement of the integration of the Borsa Italiana Group:
    • Euronext has successfully introduced a new listing framework in Italy, which is harmonised with Group and global standards. The harmonisation of the listing framework will benefit Italian issuers and strengthen the Italian capital market ecosystem.
    • Euronext confirmed the first phase of the migration of Borsa Italiana cash markets onto Optiq® in March 2023. The migration to the Euronext state-of-the-art proprietary trading platform will provide Euronext and Borsa Italiana clients with significant benefits while retaining a strong local footprint, as demonstrated in the two previous successful migrations in Ireland and Norway.
    • Euronext confirmed the first phase of the expansion of Euronext Clearing with the expected launch of the equity clearing offering by the end of 2023. This is the first milestone in the transformation of Euronext Clearing to create the Euronext clearing house of choice for its cash equity markets, further ensuring strategic alignment between the Euronext markets and its clearing house.

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

“This third quarter of 2022 demonstrated the robustness of Euronext’s diversified business model in a more challenging trading environment. We recorded strong growth in our non-volume related activities, as well as good performance of derivatives, FX and power trading activities. Euronext confirmed its position as the main trading venue in Europe this quarter, providing market participants with the highest market quality and depth. Combined with continued cost discipline, in line with our 2022 cost guidance, this led to robust adjusted EBITDA and adjusted net income.

We continued working on the integration of the Borsa Italiana Group and delivery of the ‘Growth for Impact 2024’ strategic plan. €24.4 million cumulated run-rate annual synergies in relation to the acquisition of the Borsa Italiana Group were reached at the end of Q3 2022.

Going forward, the simplification of listing rules in Italy announced in September will facilitate access to financing for local and international issuers, further reinforcing Euronext’s position as the leading listing venue in Europe. Additional major milestones in the delivery of our ‘Growth for Impact 2024’ strategic plan will be achieved in 2023. Italian and European clients will soon benefit from the migration of the Italian cash markets to the Euronext state-of-the-art proprietary trading platform Optiq® in March 2023, joining the largest liquidity pool in Europe. In addition, in relation to the acquisition of the Borsa Italiana Group, Euronext Clearing will become the Euronext clearing house of choice for equity clearing by the end of 2023. These strategic deliveries will further unlock a significant part of the targeted synergies. Our diversified business model combined with continued cost discipline gives us the confidence to face macro-economic challenges in 2023.”

 

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[1] Underlying revenue excludes €49.0 million non-underlying, one-off loss (€35 million post tax) related to the partial disposal of the Euronext Clearing portfolio. Please refer to the section on net treasury income section and https://www.euronext.com/en/investor-relations/financial-calendar/q2-2022-results for more details.

[2] Unless specified otherwise, percentages refer to Q3 2022 compared to Q3 2021.

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

[4] Definition in appendix.

[5] Basic weighted average number of shares at 106,652,256  for 9M 2022, 9M 2021 basic outstanding shares at 92,447,841 shares.

[6] Like-for-like revenue at constant currencies for 2021 and 2022 excludes Euronext Funds360 and the activities acquired from Spafid by Euronext Securities, as well as related costs.

[7] Last twelve months reported EBITDA, including costs previously reported as exceptional items

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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 €5.7 trillion in market capitalisation as of end September 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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