Euronext publishes Q4 and full year 2019 results

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STRONG PERFORMANCE IN 2019 DRIVEN BY SUCCESSFUL DIVERSIFICATION AND SOLID CORE BUSINESSES DYNAMICS. 2020 COST TARGET ANNOUNCED

Amsterdam, Brussels, Dublin, Lisbon, London, Oslo and Paris – 12 February 2020 – Euronext, the leading pan-European market infrastructure, today announces its results for the fourth quarter and full year 2019.

Strong performance of Euronext through 2019

  • Double digit growth in annual revenue to €679.1 million (+10.4%):
    • Contribution from Oslo Børs VPS of €57.1 million for 6.5 months of consolidation, reflecting successful diversification
    • Strong growth in listing revenue to €129.0 million (+21.1%), driven by the consolidation of Oslo Børs VPS and the solid performance of Corporate Services at €24.4 million (+43.4% like-for-like). Like-for-like, listing revenue increased +3.9%
    • Cash trading revenue decreased to €205.6 million (-2.6%), like-for-like revenue decreased -5.8% in a low-volumes environment (-9.4%), market share significantly improved to 68.7% over 2019 (+2.6pts) and yield increased to 0.53bps (+4.0%)
    • Advanced data services revenue increased to €128.8 million (+8.8%), as a result of the consolidation of Oslo Børs VPS and the good performance of the indices business. Like-for-like, revenue increased +1.1%
    • Post-trade revenue strongly increased to €104.8 million (+35.5%), driven by the consolidation of the Norwegian VPS CSD revenue, and higher treasury income offsetting lower volumes while derivatives clearing revenue was stable. Like-for-like, revenue increased +0.1%
    • Group non-volume related revenue[1] accounted for 50% of 2019 total revenue (vs. 44% in 2018), and covered 122% of operating expenses excluding depreciation & amortisation (vs. 104% in 2018)
  • Double digit growth in EBITDA to €399.4 million (+12.8%), with EBITDA margin at 58.8% (+1.2pts):
    • Group operating costs excluding D&A were up +€18.9 million as a result of the consolidation of costs from acquired businesses, partially offset by continued cost discipline and the positive impact of IFRS 16
    • €7.8 million run-rate cost synergies achieved from Euronext Dublin as of 31 December 2019 (compared to €2.7 million as of 31 December 2018)
  • Increase in reported net income, share of the Group, to €222.0 million (+2.8%):
    • Exceptional items at €21.9 million, reflecting primarily acquisitions costs, restructuring costs as well as termination of contracts of Oslo Børs VPS
    • Net financing expenses at €17.4 million, resulting from revaluation of buy-options on minority stakes in acquisitions made in Corporate Services in 2017 and deferred payments
    • Income tax rate at 30.8% reflecting various non-deductible expenses
  • Double digit growth in adjusted EPS[2]  to €3.90 (+10.9%)

Dividend proposal for 2019

In accordance with Euronext dividend policy, a pay-out ratio of 50% of reported net income representing a dividend for 2019 of €111 million (€1.59 per share) will be proposed to the AGM[3] on 14 May 2020.

Key figures - in €m, unless stated otherwise

FY 2019

FY 2018

% var

Organic % var

(like-for-like)

Revenue

679.1

615.0

+10.4%

-1.0%

Operational expenses excluding D&A

-279.7

-260.8

+7.2%

-7.4%

EBITDA

399.4

354.3

+12.8%

3.8%

EBITDA margin

58.8%

57.6%

+1.2 pt

+2.8 pts

Net income, share of the Group

222.0

216.0

+2.8%

 

EPS (adjusted)2

3.90

3.51

+10.9%

 

Cost guidance for 2020

As announced at the 2019 Investor Day, Euronext expects to incur non-recurring costs related to the integration of Oslo Børs VPS and internal digitalisation projects, which will start generating savings in 2021. As a result, Euronext expects its operating costs excluding D&A to temporarily increase by a mid-single digit[4] in 2020, compared to its second half 2019 annualised cost base.[5]

 

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

“Euronext delivered a strong performance in 2019 with double digit growth in revenue, EBITDA and adjusted EPS. This performance results from successful diversification and solid core businesses dynamics, with a cash trading market share at 68.7% for the Group through the year. Our core business further proved its resilience in 2019, as, on a like-for-like basis, revenue only decreased -1.0%, against a -9.4% drop in cash trading volumes.

This year, Euronext released its new strategic plan, ‘Let’s grow together 2022’, with a strong focus on growth, innovation and sustainable finance, aiming to build the leading pan-European market infrastructure. The Group already reached a first milestone with the acquisition of Nord Pool, strengthening its presence in the Nordics and diversifying into power markets. Euronext remains committed to deploying its capital, in a disciplined way, to diversify its revenue profile and to expand its federal model further.

In 2019, Euronext also completed the deployment of its Optiq® trading platform to its derivative markets, paving the way for the migration of Oslo Børs markets to Optiq® in 2020. The integration of Oslo Børs VPS will be a key element for the delivery of the announced synergies. As a result of the integration and internal projects, Euronext expects a non-recurring mid-single digit growth1 of Group operating expenses (excluding D&A) in 2020, compared to its second half 2019 annualised cost base.”

Euronext full-year and Q4 2019 financial performance

In €m, unless stated otherwise

Q4 2019

Q4 2018

% change

Organic (like-for-like)

FY 2019

FY 2018

% change

Organic (like-for-like)

Revenue

185.7

157.3

+18.1%

+0.0%

679.1

615.0

+10.4%

-1.0%

Operational expenses excluding D&A

-81.6

-70.4

+16.0%

-6.0%

-279.7

-260.8

+7.2%

-7.4%

Salaries and employee benefits

-45.9

-33.4

+37.4%

+6.7%

-153.1

-118.5

+29.2%

+8.6%

Other expenses

-35.8

-37.0

-3.3%

-17.4%

-126.5

-142.3

-11.1%

-20.8%

EBITDA

104.1

86.9

+19.8%

+4.9%

399.4

354.3

+12.8%

+3.8%

EBITDA margin

56.0%

55.3%

+0.8 pts

+2.7 pts

58.8%

57.6%

1.2 pt

+2.8 pts

Depreciation & Amortisation

-12.8

-6.1

+108.8%

+30.0%

-43.7

-23.4

+86.6%

+39.6%

Operating Profit before Exceptional items

91.3

80.8

+13.0%

+3.0%

355.7

330.9

+7.5%

+1.2%

Exceptional items

-8.2

-5.5

+50.6%

 

-21.9

-21.5

+1.9%

 

Operating Profit

83.1

75.3

+10.3%

 

333.9

309.4

+7.9%

 

Net financing income / (expense)

-14.2

-4.0

N/A

 

-17.4

-5.3

N/A

 

Results from equity investments

3.5

-0.2

N/A

 

9.1

7.6

+20.0%

 

Profit before income tax

72.4

71.1

+1.7%

 

325.6

311.7

+4.4%

 

Income tax expense

-22.4

-21.1

+6.0%

 

-100.3

-94.1

+6.6%

 

Share of non-controlling interests

-0.9

-0.4

+146.6%

 

-3.3

-1.7

99.6%

 

Profit for the period

49.0

49.6

-1.2%

 

222.0

216.0

+2.8%

 

Reported EPS (€ per share)

0.70

0.71

-1.4%

 

3.19

3.10

+2.7%

 

Adjusted EPS  (€ per share)

1.11

0.88

+26.6%

 

3.90

3.51

+10.9%

 

The figures in this document have not been audited or reviewed by our external auditor.


Full year 2019

In 2019, Euronext consolidated revenue increased to €679.1 million, up +10.4%, mainly driven by the consolidation of Oslo Børs VPS, the contribution of Investor Services and the strong performance from Corporate Services, which offset lower trading revenue in a subdued environment for cash trading. On a like-for-like basis (excluding the consolidation of Oslo Børs VPS, Commcise and OPCVM360 in 2019), Euronext consolidated revenue decreased by -1.0% in 2019, to €609.0 million.

Non-volume related revenue[6] accounted for 50% of total Group revenue in 2019, an increase from 44% of total Group revenue in 2018. The operating cost coverage ratio[7] was at 122% in 2019, compared to 104% in 2018.

Fourth quarter of 2019

In the fourth quarter of 2019, Euronext consolidated revenue increased to €185.7 million, up +18.1%, mainly driven by the consolidation of Oslo Børs VPS, the contribution of Investor Services, the strong performance from Corporate Services and resilient activity from core businesses. On a like-for-like basis (excluding the consolidation of Oslo Børs VPS, Commcise and OPCVM360 in Q4 2019), Euronext consolidated revenue was stable in Q4 2019, at €157.4 million.

Non-volume related revenue accounted for 52% of total Group revenue in Q4 2019, increasing from 45% of total Group revenue in Q4 2018. The operating cost coverage ratio was at 119% in Q4 2019, compared to 101% in Q4 2018.

EBITDA

In €m, unless stated otherwise

Q4 2019

Q4 2018

% change

Organic (like-for-like)

FY 2019

FY 2018

% change

Organic (like-for-like)

Revenue

185.7

157.3

+18.1%

+0.0%

679.1

615.0

+10.4%

-1.0%

Operational expenses excluding D&A

-81.6

-70.4

+16.0%

-6.0%

-279.7

-260.8

+7.2%

-7.4%

Salaries and employee benefits

-45.9

-33.4

+37.4%

+6.7%

-153.1

-118.5

+29.2%

+8.6%

Other expenses

-35.8

-37.0

-3.3%

-17.4%

-126.5

-142.3

-11.1%

-20.8%

EBITDA

104.1

86.9

+19.8%

+4.9%

399.4

354.3

+12.8%

+3.8%

EBITDA margin

56.0%

55.3%

+0.8 pts

+2.7 pts

58.8%

57.6%

1.2 pt

+2.8 pts


Full-year 2019

Operational expenses excluding depreciation & amortisation increased to €279.7 million, up +7.2%, i.e. €18.9 million, as a result of the consolidation of Oslo Børs VPS, Commcise and OPCVM360 costs for €38.3 million, partially offset by the positive impact of IFRS 16 (€10.9 million) and a continued cost control. On a like-for-like basis, operational expenses excluding depreciation & amortisation decreased by -7.4% compared to 2018.

As a result, EBITDA for the year was €399.4 million, up +12.8%, representing a margin of 58.8%, up +1.2 points compared to 2018. On a like-for-like basis, EBITDA for 2019 was up +3.8%, to €367.6 million, with EBITDA margin at 60.4%, up +2.8 points, compared to the same perimeter in 2018.

Fourth quarter of 2019

Operational expenses excluding depreciation & amortisation increased to €81.6 million, up +16.0%, i.e. €11.3 million, as a result of the consolidation of the costs from Oslo Børs VPS, Commcise and OPCVM360 costs for €15.5 million, partially offset by the impact of IFRS 16 (€2.7 million) and a continued cost control. Operational expenses excluding depreciation & amortisation were also negatively impacted in Q4 2019 by one-off items related to the acquisition of Nord Pool and performance based compensations. On a like-for-like basis, operational expenses excluding depreciation & amortisation decreased by -6.0% compared to Q4 2018.

Consequently, EBITDA for the quarter was €104.1 million, up +19.8%, representing a margin of 56.0%, up +0.8 points compared to Q4 2018. On a like-for-like basis, EBITDA for Q4 2019 was up +4.9%, to €91.2 million, and EBITDA margin was 57.9%, up +2.7 points, compared to the same perimeter in Q4 2018.

Net income, share of the Group

In €m, unless stated otherwise

Q4 2019

Q4 2018

% change

Organic (like-for-like)

FY 2019

FY 2018

% change

Organic (like-for-like)

EBITDA

104.1

86.9

+19.8%

+4.9%

399.4

354.3

+12.8%

+3.8%

EBITDA margin

56.0%

55.3%

+0.8 pts

+2.7 pts

58.8%

57.6%

1.2 pt

+2.8 pts

Depreciation & Amortisation

-12.8

-6.1

+108.8%

+30.0%

-43.7

-23.4

+86.6%

+39.6%

Operating Profit before Exceptional items

91.3

80.8

+13.0%

+3.0%

355.7

330.9

+7.5%

+1.2%

Exceptional items

-8.2

-5.5

+50.6%

 

-21.9

-21.5

+1.9%

 

Operating Profit

83.1

75.3

+10.3%

 

333.9

309.4

+7.9%

 

Profit before income tax

72.4

71.1

+1.7%

 

325.6

311.7

+4.4%

 

Income tax expense

-22.4

-21.1

+6.0%

 

-100.3

-94.1

+6.6%

 

Share of non-controlling interests

-0.9

-0.4

+146.6%

 

-3.3

-1.7

99.6%

 

Net income, share of the Group

49.0

49.6

-1.2%

 

222.0

216.0

+2.8%

 


Full-year 2019

Depreciation and amortisation accounted for €43.7 million in 2019, up +86.6%, resulting primarily from the consolidation of Oslo Børs VPS PPA for €6.3 million and the adoption of IFRS 16 (see appendix). On a like-for-like basis, depreciation & amortisation was up +39.6% to €32.7 million, mainly due to the impact of IFRS 16.

Operating profit before exceptional items was €355.7 million, a +7.5% increase compared to 2018. On a like-for-like basis, operating profit before exceptional items was up +1.2%, to €335.0 million.

€21.9 million of exceptional costs were booked in 2019, compared to €21.5 million in 2018. In 2019, exceptional costs resulted mainly from advisory costs, restructuring costs in Oslo Børs VPS and the provision for the early termination of contracts at Oslo Børs VPS. In 2018, exceptional costs resulted from the agreement for the early termination of the trading services contract provided by Deutsche Börse AG to Euronext Dublin, as well as advisory costs and impairments.

Net financing expense for 2019 was €17.4 million compared to a net financing expense of €5.3 million in 2018, resulting mainly from the revaluation of buy-options and deferred payments related to Corporate Services entities, as well as interest expense.

Results from equity investments amounted to €9.1 million in 2019, primarily resulting from the contribution from LCH SA, in which Euronext owns an 11.1% stake and dividends received from Sicovam and Euroclear, partially offset by the impairment of the EuroCCP stake sold in Q4 2019. In 2018, €7.6 million in results from equity investments was reported.

Income tax for 2019 was €100.3 million, impacted by adjustments on deferred tax assets and liabilities, non-deductible acquisition costs and non-deductible expenses linked to the recognition of earn-out liabilities. This translated into an effective tax rate of 30.8% for the year (2018: €94.1 million and 30.2%).

Shares of non-controlling interests mainly relating to Skope[8] (60% owned) and Company Webcast (51% owned) amounted to €3.3 million in 2019.

As a result, the reported net profit share of the Group for 2019 increased by +2.8%, to €222.0 million. This represents a reported EPS of €3.19 basic and €3.17 fully diluted in 2019, compared to €3.10 basic and €3.09 fully diluted in 2018. The number of shares used for the basic calculation was 69,673,737 and for the fully diluted calculation was 69,929,727.

Adjusted EPS[9] is up +10.9% in 2019, at €3.90, compared to an adjusted EPS of €3.51 in 2018[10].

In 2019 Euronext generated a net cash flow from operating activities of €253.8 million, compared to €223.5 million in 2018.

At 31 December 2019, Euronext had net debt of €648.5 million and €369.8 million of cash and cash equivalents, representing a net debt on last twelve months pro-forma EBITDA equal to 1.5x.

Fourth quarter 2019

Depreciation and amortisation accounted for €12.8 million in Q4 2019, up +108.8%, resulting mainly from the consolidation of Oslo Børs VPS PPA for €2.8 million and the adoption of IFRS 16 (see appendix). On a like-for-like basis, depreciation & amortisation was up +30.0% to €8.0 million, mainly due to IFRS 16 impact.

Operating profit before exceptional items was €91.3 million, a +13.0% increase compared to Q4 2018. On a like-for-like basis, operating profit before exceptional items was up +3.0%, to €83.2 million.

€8.2 million of exceptional costs was booked in Q4 2019, compared to €5.5 million in Q4 2018. In Q4 2019, exceptional costs resulted primarily from restructuring costs at Oslo Børs VPS, the early termination of services contracts at Oslo Børs VPS as well as advisory costs.

Net financing expense for Q4 2019 was €14.2 million compared to a net financing expense of €4.0 million in Q4 2018, resulting mainly from the revaluation of buy-options and deferred payments related to Corporate Services entities.

Results from equity investments amounted to €3.5 million in Q4 2019, mainly resulting from the contribution from LCH SA, in which Euronext owns an 11.1% stake, dividends received from Sicovam and Euroclear, partially offset by the impairment of the EuroCCP stake sold in Q4 2019. In Q4 2018, €0.2 million in negative results from equity investments was reported.

Income tax for Q4 2019 was €22.4 million, impacted by non-deductible expenses related to the recognition of earn-out liabilities. This translated into an effective tax rate of 31.0% for the quarter (Q4 2018: €21.1 million and 29.7%).

Shares of non-controlling interests mainly relating to Skope[11] (60% owned), InsiderLog (80% owned), OPCVM360 (60% owned) and Company Webcast (51% owned) amounted to €0.9 million in Q4 2019.

As a result, the reported net profit share of the Group for Q4 2019 decreased by -1.2%, to €49.0 million. This represents a reported EPS of €0.70 basic and €0.70 fully diluted in Q4 2019, compared to €0.71 basic and €0.71 fully diluted in Q4 2018. The number of shares used for the basic calculation was 69,673,737 and for the fully diluted calculation was 69,929,727

Adjusted EPS[12] is up +26.6% in Q4 2019, at €1.11, compared to an adjusted EPS of €0.88 in Q4 2018[13].

In Q4 2019 Euronext generated a net cash flow from operating activities of €78.8 million, compared to €55.4 million in Q4 2018.

Full-year and Q4 2019 business highlights

  • Listing

In €m, unless stated otherwise

FY 2019

FY 2018

% change

Q4 2019

Q4 2018

% change

Listing revenue

129.0

106.5

+21.1%

36.5

29.5

+23.7%

Equity

 

 

 

 

 

 

Annual fees

28.6

23.4

+22.3%

8.3

5.9

+41.6%

Follow-ons

16.7

19.4

-14.0%

1.6

5.0

-67.4%

IPOs

10.6

10.2

+3.9%

3.1

2.7

+13.1%

Debts

31.1

20.0

+56.0%

8.8

6.1

+42.9%

ETFs, Funds & Warrants

11.4

12.6

-8.8%

2.9

3.5

-16.7%

Corporate Services

24.4

16.6

+46.9%

7.6

5.2

+46.7%

Others

6.0

4.4

+36.9%

4.3

1.1

+276.8%

Money raised[1]

1,281,330

1,077,523

+18.9%

324,782

351,858

-7.7%

 

[1] 2018 figures restated to include Oslo Børs VPS


Full year 2019

Listing revenue was €129.0 million in 2019, an increase of +21.1% compared to 2018, driven by the strong performance of Euronext’s Corporate Services (+€7.8 million) and the consolidation of Oslo Børs VPS for 6.5 months and Euronext Dublin for 3 months (Euronext Dublin was consolidated for 9 months in 2018) collectively contributing €18.3 million. On a like-for-like basis, listing revenue increased by +3.9%.

Primary equity issuances were mixed over the year with a subdued activity in the first half followed by the return of large caps listings across Euronext markets in the second half of the year. This solid listing activity demonstrated the attractiveness of Euronext value proposition to both international and domestic large capitalisations from all sectors, such as Marel, la Française Des Jeux, Prosus, Verallia and Adevinta which altogether added 110 billion of market cap. In addition, Euronext welcomed 41 new listings on its markets in 2019, of which 39 SME listings. In 2019, €5.1 billion was raised on primary markets on Euronext, compared to €5.0 billion in 2018.

The secondary market saw a similar trend over 2019, with follow-ons activity improving through the second half of 2019 reflecting a slight improvement in the economic environment. In 2019, €34.2 billion was raised in secondary equity issues, compared to €64.2 billion in 2018, which was marked by significant large-cap M&A activities in Europe.

In total, €1.3 trillion in equity and debt was raised on Euronext’s markets in 2019, compared to €1.1 trillion in 2018.

Corporate Services reported a strong performance throughout 2019, generating €24.4 million in revenue, including €0.6 million of contribution from Oslo Børs VPS, compared to €16.6 million in 2018, reflecting strong client traction across all the services offered.

Fourth quarter of 2019

Listing revenue was €36.5 million in Q4 2019, an increase of +23.7% compared to Q4 2018, driven by the strong performance of Euronext Corporate Services (+€2.4 million) and Oslo Børs VPS contributing for €5.9 million. On a like-for-like basis, listing revenue increased by +3.9%.

Primary equity issuances continued their momentum, reporting an active Q4 2019 with a dynamic trend for IPOs including large caps, despite the mixed environment. Euronext welcomed three domestic large cap listings with la Française des Jeux, the second-largest lottery in Europe and the fourth-largest worldwide, Verallia, the leading European producer of glass packaging for beverages and food, and TietoEvry, a leading digital services and software company in the Nordics . In addition, Euronext welcomed 12 SME listings on its markets. In Q4 2019, €3.3 billion was raised on primary markets on Euronext, compared to €1.4 billion last year.

Activity on the secondary market decreased compared to Q4 2018, despite improved market conditions. In Q4 2019, €8.2 billion was raised in secondary equity issues, compared to €36.0 billion in Q4 2018 which was marked by large-cap M&A activity.

In total, €324.8 billion in equity and debt was raised on Euronext’s markets in Q4 2019, compared to €351.0 billion in Q4 2018.

Corporate Services reported a strong performance, generating €7.6 million in revenue in Q4 2019, including €0.3 million of contribution from Oslo Børs VPS, compared to €5.2 million in Q4 2018, reflecting strong client traction across all the services offered.

 

  • Trading

In €m, unless stated otherwise

FY 2019

FY 2018

% change

Q4 2019

Q4 2018

% change

Trading revenue

272.8

276.6

-1.4%

70.8

69.8

+1.4%

Cash trading

205.6

210.9

-2.6%

53.2

52.8

+0.7%

ADV Cash market[1]

7,756

8,059

-3.8%

8,393

8,102

+3.6%

Derivatives trading

44.3

43.9

+0.9%

11.9

11.4

+3.8%

ADV Derivatives market (in lots)

585

581

+0.7%

589

602

-2.2%

Number of trading days

255

255

 

64

64

 

Spot FX trading

22.9

21.7  

+5.6%

5.8

5.5

+4.0%

     ADV spot FX Market (in USDm)

18,282

20,139

-9.2%

16,545

19,540

-15.3%

Number of trading days

259

259

 

65

65

 

 

[1] Following the completion of the acquisition of Oslo Børs VPS, Euronext 2018 trading data have been restated to include historic data for Oslo Børs VPS.


Full year 2019

Cash trading

Cash trading revenue decreased by -2.6% in 2019, to a total of €205.6 million, resulting from a decline in trading volumes in a low volatility environment with average daily volume for cash trading decreasing to €7.8 billion in 2019, down -3.8% compared to 2018[16]. On a like-for-like basis, cash trading revenue decreased by -5.8%. The average yield over the year was 0.52bps, and amounted to 0.53bps on a like-for-like basis[17], compared to 0.51bps in 2018. The cash trading market share throughout 2019 averaged 68.8% like-for-like, an increase from 66.1% in 2018.

The average daily transaction value of ETFs on the electronic order book was €216 million over 2019, down -18.8% compared to 2018, driven by low volatility levels. The total number of ETFs listed on Euronext was 1,236 at end of December 2019.

 

Derivatives trading

Derivatives trading revenue increased +0.9% in 2019, to €44.3 million, compared to €43.9 million in 2018. On a like-for-like basis, derivatives trading revenue was down -1.8%. Average daily volume on individual equity derivatives was down -4.2% at 295,227 contracts, while the average daily volume on equity index derivatives was down -2.0% to 240,550 contracts.

Commodity products recorded an decrease in average daily volumes in 2019, down -7.3% to 53,224 contracts compared to 2018. 

Yield on derivatives averaged €0.30 in 2019, up +1.7% compared to 2018, resulting from enhanced yield management.

Spot FX trading

Spot FX trading activity on the Euronext FX spot foreign exchange market recorded average daily volumes of $18.3 billion in 2019, down -9.2% compared to $20.1 billion in 2018, impacted by a low volatility environment through 2019. Spot FX trading generated €22.9 million of revenue in 2019, up +5.6% compared to €21.7 million in 2018, thanks to improved yield management.

Fourth quarter of 2019

Cash trading

Cash trading revenue increased by +0.7% in Q4 2019, to a total of €53.2 million, mainly resulting from the consolidation of Oslo Børs cash trading revenue. On a like-for-like basis, cash trading revenue decreased by -4.5%. Average daily volume for cash trading increased to €8.4 billion in Q4 2019, up +3.6% compared to Q4 20181. The average yield over the fourth quarter was 0.49bps, and amounted to 0.53bps on a like-for-like basis[18], compared to 0.51bps in Q4 2018. The cash trading market share throughout the fourth quarter of 2019 averaged 71.2% like-for-like, an increase from 66.4% in Q4 2018.

The average daily transaction value of ETFs on the electronic order book was €204 million over Q4 2019, down -22.4% compared to Q4 2018, driven by upticks in volatility.

Derivatives trading

Derivatives trading revenue increased +3.8% in Q4 2019, to €11.9 million, compared to €11.4 million in Q4 2018. On a like-for-like basis, derivatives trading revenue was down -2.3%. Average daily volume on individual equity derivatives was down -8.6% at 286,817 contracts, while the average daily volume on equity index derivatives was down -14.1% to 237,924 contracts.

Commodity products recorded an increase in average daily volumes in Q4 2019, up +19.6% to 54,193 contracts compared to Q4 2018. 

Yield on derivatives averaged €0.30 in Q4 2019, up +6.1% compared to Q4 2018, resulting from enhanced yield management offsetting a less favourable product mix.

Spot FX trading

Spot FX trading activity on the Euronext FX spot foreign exchange market recorded average daily volumes of $16.5 billion in Q4 2019, down -15.3% compared to $19.5 billion in Q4 2018, impacted by a low volatility environment through the quarter. Spot FX trading generated €5.8 million of revenue in Q4 2019, up +4.0% compared to €5.5 million in 2018, thanks to improved yield management.

  • Investor Services

Full year 2019

Investor Services, encompassing primarily the activities of Commcise, of which Euronext acquired 78% of the capital in December 2018, as well as Investor Services activities from Oslo Børs VPS, reported €5.7 million of revenue in 2019 as the business benefited from Euronext’s commercial reach and expertise throughout the year.

Fourth quarter of 2019

Investor Services, encompassing primarily the activities of Commcise, of which Euronext acquired 78% of the capital in December 2018, and Investor Services activities from Oslo Børs VPS, reported €1.6 million of revenue in Q4 2019 reflecting the commercial development and the consolidation of Oslo Børs VPS activities.

  • Advanced Data Services[19]

Full year 2019

Advanced Data Services reported revenue up +8.8% to €128.8 million in 2019 due to the good performance of index activities, particularly on ESG products and structured products, and the consolidation of Oslo Børs VPS. On a like-for-like basis, Advanced Data Services revenues were up +1.1% compared to 2018, thanks to the good performance of the indices business, offset by the decrease of market data revenue.

Fourth quarter of 2019

Advanced Data Services reported revenue up +12.5% to €33.5 million in Q4 2019 driven by the good performance of index activities, particularly on ESG products and structured products, and the consolidation of Oslo Børs VPS. On a like-for-like basis, Advanced Data Services revenues were down -0.3% compared to Q4 2018. The good performance of the indices business, notably on ESG products, offset the decrease of market data revenue.

  • Post-Trade

Full year 2019

Clearing

Clearing revenue was stable in 2019, at €55.2 million, slightly down -0.2% compared to 2018, as lower derivatives trading volumes were partially offset by higher treasury income.

Custody, Settlement and other post-trade

Revenue from Custody, Settlement and other post-trade activities, notably encompassing Interbolsa and VPS activities, increased by +124.9% to €49.6 million in 2019, resulting mainly from the consolidation of Oslo Børs VPS. Both VPS and Interbolsa reported a good performance driven by an increased activity in both custody and settlement.

On a like-for-like basis, revenue from Custody, Settlement and other post-trade was up +1.0%.

Fourth quarter of 2019

Clearing

Clearing revenue was up in Q4 2019, at €14.5 million, +8.0% compared to Q4 2018, reflecting a favourable derivatives product mix and higher treasury income offsetting lower overall trading volumes.

Custody, Settlement and other post-trade

Revenue from Custody, Settlement and other post-trade activities, notably encompassing Interbolsa and VPS activities, increased by +242.2% to €18.8 million in Q4 2019, resulting mainly from the consolidation of Oslo Børs VPS. VPS benefited in Q4 2019 of a high market activity in custody and settlement while Interbolsa performance resulted mainly from an increased settlement activity.

On a like-for-like basis, revenue from Custody, Settlement and other post-trade was up +2.3%.

  • Euronext Technologies[20]  & Other revenue

Full year 2019

Euronext Technology Solutions & Other revenue increased by +4.8% in 2019, to €37.8 million, as a result of good performance of SFTI/Colocation services, hosted services, connection fees and the consolidation of Oslo Børs VPS. On a like-for-like basis, revenue was up +0.6% compared to last year.

Fourth quarter of 2019

Euronext Technology Solutions & Other revenue increased by +8.4% in Q4 2019, to €9.9 million, as a result of good performance of SFTI/Colocation services and hosted services, and the consolidation of Oslo Børs VPS. On a like-for-like basis, revenue was up +2.6% compared to last year.

 

 

Corporate highlights of Q4 2019, since publication of Q3 2019 results on 07 November 2019

  • Volumes in Q4 2019

For the fourth quarter of 2019, the average daily transaction value on the Euronext cash order book stood at €8,392 million, down
-7.0% compared to the same period last year.

The average daily transaction value of ETFs on the electronic order book was €204 million over Q4 2019, up -22.4% compared to Q4 2018. The total number of ETFs listed on Euronext was 1,236 at end of December 2019.

The overall average daily volume on Euronext derivatives stood at 589,027 contracts (-8.2% compared to Q4 2018) and the open interest was 15,254,071 contracts at the end of December 2019 (-0.2% compared to the end of December 2018).

The average daily volume on Euronext FX’s spot foreign exchange market stood at $16,545 million in Q4 2019, down -15.3% compared to the same period last year

  • Successful roll-out of Euronext Derivatives markets to Optiq® trading platform

On 9 December 2019, Euronext announced the successful completion of the roll-out of its Derivatives market to its proprietary multi-market trading technology, Optiq® already powering its Cash Markets. This step was the last one of the full migration of Euronext’s trading systems to Optiq®.

Euronext Cash and Derivatives markets trading communities now both benefit from Euronext new proprietary cutting-edge trading platform Optiq®, providing market-leading trading speeds, reliability, and flexible architecture. Following this successful deployment, the following asset classes are now available for trading on Optiq®: cash equities, government bonds, corporate bonds, ETFs, warrants, certificates, funds, equity derivatives, dividend derivatives, index derivatives, ETF options and commodity derivatives.

Co-created with Derivatives Market customers, through an in-depth client consultation that focused on user-experience, Optiq® for Derivatives Markets offers tenfold reduction in latency and unlimited overall capacity. Market participants across the entire derivatives trading spectrum, from market-makers to crossing desks and the clearing community alike can now benefit from Optiq’s lower latency and faster time-to-market.

The user-centric design and architecture of the Optiq® platform also results in simplified development and maintenance for clients and infrastructure providers in both the Cash and Derivatives Markets.

  • Euronext acquire control of Nord Pool, a leading physical power market in Europe, reinforcing Oslo as Euronext’s hub in the Nordics

On 5 December 2019, Euronext announced that it has entered into binding agreements to acquire 66% of the share capital and voting rights of the Nord Pool group, which runs a leading physical power market in Europe, operating from its headquarters in Oslo and offices in Helsinki, Stockholm, Tallinn, Berlin and London. On 15 January 2020, Euronext announced the completion of the acquisition of 66% of the share capital and voting rights of the Nord Pool group[21], after receiving regulatory approvals.

The enterprise value on a debt-free cash-free basis for 100% is NOK 850m (c.€84 million). As part of the transaction, Euronext has entered into a partnership, governed by a shareholder agreement, with the Nordic and Baltic Transmission System Operators (TSOs) that formerly owned Nord Pool, and who retained a 34% stake through a joint holding company. Euronext is pleased to enter into the power market with such strong and experienced partners.

Nord Pool group was created in 1993 and offers power trading, clearing, settlement and associated services in both day-ahead and intraday physical energy markets. Nord Pool currently has a strong European foothold with more than 360 customers from 20 countries. The company operates both core intraday and day-ahead markets in the Nordics, Baltics, the UK, France, Germany, Belgium, the Netherlands, Austria and Luxembourg. In 2018, Nord Pool generated c.€40 million revenue and 524 TWh were traded on its markets.

The acquisition of Nord Pool is in line with Euronext’s strategy to diversify its revenue mix to new asset classes not correlated with financial market cycles, and will strengthen its commodity franchise by leveraging Nord Pool’s leadership position and know-how in physical power markets. This acquisition marks another major step in materialising Euronext’s objective to grow its presence in the Nordic region, following the acquisition of Oslo Børs VPS earlier this year.

Through its strong franchise, Nord Pool will be a pillar of Euronext's Group centre of excellence for commodities in Oslo. In turn, Nord Pool will benefit from Euronext’s extended footprint and commercial efforts in continental Europe to expand the reach of its leading technology, and its employees will join a pan-European Group with international career opportunities.

  • Euronext announces binding agreement to sell its 20% minority stake in EuroCCP

On 10 December 2019, Euronext announced it has entered into a binding agreement to sell its 20% minority stake in EuroCCP to Cboe Global Markets, alongside the other current EuroCCP shareholders.

Euronext remains committed to developing its Post Trade strategy, described in its Let’s Grow Together 2022 strategic plan. Euronext will continue to leverage its long-term derivatives clearing agreement with, and its 11.1% equity stake in, LCH SA, and develop its two fully-owned CSDs in Norway and Portugal, as the foundation for further growth in Post Trade.

The transaction is expected to close in H1 2020, subject to receipt of required regulatory clearances and the arrangement of a supporting liquidity facility at the EuroCCP clearing entity level.

Euronext received net proceeds of approximately €9 million from the sale of its minority stake. As a result of this agreement, Euronext impaired the value of its participation by approximately €6 million in Q4 2019.

  • Euronext’s Statement Regarding Bolsas y Mercados Españoles

On 18 November 2019, following press speculation regarding a potential offer from Euronext for Bolsas y Mercados Españoles (“BME”), Euronext confirmed that it was in talks with the Board of Directors of BME, which may or may not lead to an offer being made.

A further announcement will be made as and when appropriate

Corporate highlights since 31 December 2019

  • Euronext appoints Øivind Amundsen as CEO of Oslo Børs

On 29 January 2020, Euronext announced that the Boards of Oslo Børs VPS Holding ASA and Oslo Børs ASA have approved the appointment of Øivind Amundsen as CEO of Oslo Børs VPS Holding and Oslo Børs. This appointment follows Håvard S. Abrahamsen’s resignation from his position as President and CEO of Oslo Børs VPS Holding and Oslo Børs. Mr Abrahamsen will also step down from his position as member of the Managing Board of Euronext N.V. The Supervisory Board of Euronext N.V. has subsequently nominated Mr Amundsen as member of the Managing Board of Euronext N.V., subject to formal appointment by an Annual Shareholders’ Meeting of Euronext N.V. and the usual regulatory non-objections.

  • Euronext completes the acquisition of Nord Pool on 15 January 2020

Please refer to the above paragraph about Nord Pool acquisition.

Agenda

 

A conference call and a webcast will be held tomorrow 13 February 2020,  at 9.00am CET (Paris time) / 8.00am UK time:

Website : www.euronext.com/investors

To connect to the conference call, please dial:

  • UK Number:                  +44 203 003 2666
  • FR Number:                   +33 1 7037 7166
  • NL Number:                   +31 20 794 8426           
  • US Number:                   +1 212 999 6659
  • BE Number:                   +32 2 792 0434
  • PT Number:                   +351 3 0880 2081 
  • IR Number:                    +353 1 436 0959
  • NO Number:                  +47 2 156 3318

Password:                                       Euronext

 

Live Webcast:

A live audio webcast and replay after the call will be available via this link and on Euronext’s Investor Relations website.

 

Contacts

Investor Relations:

Aurélie Cohen / Clément Kubiak                                                      +33 1 70 48 24 27; ir@euronext.com  

 

Media:

Pauline Bucaille                                                                                  +33 1 70 48 24 41; mediateam@euronext.com

 

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

[2] Definition in Appendix

[3] Annual General Meeting of Shareholders

The figures in this document have not been audited or reviewed by our external auditor.

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

[5] H2 2019 annualised cost base of c. €311.0 million

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

[7] Non-volume related businesses revenue divided by operating costs (excluding D&A)

[8] Formerly known commercially as iBabs

[9] Definition in Appendix

[10] 2018 adjusted EPS has been restated. Details in Appendix

[11] Formerly known commercially as iBabs

[12] Definition in Appendix

[13] 2018 adjusted EPS has been restated. Details in Appendix

[14] 2018 figures restated to include Oslo Børs VPS

[15] Following the completion of the acquisition of Oslo Børs VPS, Euronext 2018 trading data have been restated to include historic data for Oslo Børs VPS.

[16] On a reported basis

[17] Excluding Oslo Børs VPS

[18] Excluding Oslo Børs VPS

[19] Previously reported as ‘Market Data & Indices’

[20] Previously reported as ‘Market Solutions’

[21] Including Nord Pool AS, Nord Pool Consulting AS and European Market Coupling Operator AS

Press Release Footer

About Euronext
Euronext is the leading pan-European exchange, covering Belgium, France, Ireland, The Netherlands, Norway, Portugal and the UK. With close to 1,500 listed issuers worth €4.5 trillion in market capitalisation as of end December 2019, Euronext has an unmatched blue chip franchise that includes 26 issuers in the Morningstar® Eurozone 50 Index℠ 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, Euronext also operates Euronext Growth™ and Euronext Access™, simplifying access to listing for SMEs.  The Norwegian stock exchange and its clearing & settlement subsidiary, together operating as Oslo Børs VPS, joined Euronext on 17 June 2019.  
For the latest news, find us on Twitter (twitter.com/euronext) and LinkedIn (linkedin.com/euronext).
 

Disclaimer
This press release is for information purposes only and is not a recommendation to engage in investment activities. This press release is provided “as is” without representation or warranty of any kind. While all reasonable care has been taken to ensure the accuracy of the content, Euronext does not guarantee its accuracy or completeness. Euronext will not be held liable for any loss or damages of any nature ensuing from using, trusting or acting on information provided. No information set out or referred to in this publication may be regarded as creating any right or obligation. The creation of rights and obligations in respect of financial products that are traded on the exchanges operated by Euronext’s subsidiaries shall depend solely on the applicable rules of the market operator. All proprietary rights and interest in or connected with this publication shall vest in Euronext.

This press release speaks only as of this date. Euronext refers to Euronext N.V. and its affiliates. Information regarding trademarks and intellectual property rights of Euronext is located at www.euronext.com/terms-use.

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