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Euronext Publishes Q1 2018 Results

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Euronext Publishes Q1 2018 Results

EURONEXTEURONEXT Euronext NL0006294274, NL0006294274
RELEASE 15 MAY 2018 07:00 CET

Strong Set of Financials Driven by High Revenue Capture in a Volatile Environment and by Cost Efficiency

Regulatory News:

Today Euronext (Paris:ENX) (Amsterdam:ENX) (Brussels:ENX), the leading pan-European exchange in the Eurozone with 1,300 listed issuers, announces its results for the first quarter of 2018.

Strong performance for the first quarter of 2018

  • Increase in revenue to €146.7 million (+15.9% 1 ):
    • Cash trading revenues at €55.7 million up +19.4%, thanks to a sustained market share at 65.3%, yield at 0.52bps and volume growth (ADV at €8.5bn, up 21.9%) in a high volatility environment
    • Market data and indices revenue up +15.4% to €29.7 million
    • Listing revenue down -4.3% to €18.0 million in a mixed environment combining a strong IPO pipeline and high volatility
    • Growing contribution from revenue diversification initiatives with FastMatch and Agility for Growth contributing respectively for €5.2m and €4.2m to the Group’s revenue
  • EBITDA up, at €88.2m (+25.1%), reaching 60.1% margin (+4.4pts)
    • EBITDA margin for core business2 and Agility for Growth, excluding clearing, at 63.5%3 (up +6.8pts compared to Q1 2017)
    • €16.2 million of cumulated core business gross efficiencies achieved since Q2 2016 thanks to cost discipline
    • Group staff costs and professional services up due to the scope effect of FastMatch and other acquisitions, and the Irish Stock Exchange (now Euronext Dublin 4 ) acquisition costs, while core business costs down
  • Growth in EPS (basic) to €0.82 (+30.5%). Adjusted EPS at €0.85 5 (+28.1%)
    • Net income, share of the Group, at €57.3m up +30.6%: combination of good operating performance, reduced exceptional items and first contribution from LCH SA equity stake

Continued capital deployment and expansion of the federal model

  • Corporate Services product offering complemented by the acquisition of 80% of InsiderLog, for €5.8 million
  • Closing of the acquisition of Euronext Dublin and creation of the Group centre of excellence for Debt & Funds listings and ETFs

Diversification of long-term financing sources

  • Launch of an inaugural 7-year, €500 million bond, 1% coupon, rated A and listed on Euronext Dublin on 18 April 2018
  • Euronext rated for the first time by S&P: A, stable outlook, reflecting confidence in Euronext’s cash flow profile and strategy
     
Key figures - in €m, unless stated otherwise   Q1 2018   Q1 2017   % change
Revenue   146.7   126.6   +15.9%
Operational expenses excluding D&A   -58.5   -56.1   +4.3%
EBITDA   88.2   70.5   +25.1%
EBITDA margin   60.1%   55.7%   +4.4pt
Net income, share of the Group   57.3   43.9   +30.6%
EPS (adjusted)2   0.85   0.66   +28.1%
 

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

“The first quarter of 2018 marked a strong start to the year, with very high revenue capture from trading activities in a volatile environment and good performance from our market data and indices businesses. As a result of strong cost discipline and operational leverage, this growth in revenue has directly benefited our EBITDA margin, reaching 60.1% at Group level, despite the impact of newly acquired businesses, and 63.5% EBITDA margin for core business and Agility for Growth business, excluding clearing. The current months are marked by sequentially lower volumes as volatility levels are now waning after the peak observed at the beginning of the year, while the IPO pipeline is building up.

In March, Euronext reached a major milestone with the closing of the acquisition of the Irish Stock Exchange, now Euronext Dublin. The new combined Group has expanded its ambitions, with the creation of a Group centre of excellence for Debt & Fund listings and ETFs.

To refinance its 2017 acquisitions and diversify its financing mix, Euronext successfully launched early April an inaugural 7-year, €500 million bond, listed on Euronext Dublin. The oversubscription of the order book along with Euronext’s first A, stable outlook, S&P rating, shows the confidence of investors and external parties in its profile and strategy.

The second quarter has already seen the successful migration of bond regulated markets to the new Optiq matching engine and order entry gateway, paving the way for the full migration of cash markets in June.”

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1 Unless stated otherwise, percentages compare Q1 2018 data to Q1 2017 data
2 Core business refers to the perimeter of Euronext as of May 2016 excluding clearing
3 Scope used for the 61-63% EBITDA margin 2019 target of Agility for Growth strategic plan (see press release published on 19 February 2018 available on www.euronext.com )
4 From 27 March 2018 The Irish Stock Exchange plc will use the trading name Euronext Dublin to carry out its commercial activities. Legal name change will take place in due course, pending regulatory approval.
5 Definition in appendix

Euronext Q1 2018 financial performance

     
In €m, unless stated otherwise   Q1 2018   Q1 2017   % change
Revenue   146.7   126.6   +15.9%
Operational expenses excluding D&A   -58.5   -56.1   +4.3%
Salaries and employee benefits -24.4 -24.0 +1.5%
Other expenses -34.2 -32.1 +6.4%
EBITDA   88.2   70.5   +25.1%
EBITDA margin   60.1%   55.7%   +4.4pts
Depreciation & Amortisation   -5.2   -3.8   +37.9%
Operating Profit before Exceptional items   82.9   66.7   +24.3%
Exceptional items   -1.0   -3.1   -67.0%
Operating Profit   81.9   63.6   +28.8%
Net financing income / (expense) -0.4 -1.1 -62.6%
Results from equity investments   1.5   0.7   +98.0%
Profit before income tax   83.0   63.2   +31.2%
Income tax expense -25.2 -19.3 +31.0%
Share of non-controlling interests   -0.4   -0.1   n/a
Profit for the period   57.3   43.9   +30.6%
Reported EPS (€ per share) 0.82 0.63 +30.5%
Adjusted EPS (€ per share)   0.85   0.66   +28.1%
 

The first quarter of 2018 saw a favourable trading environment, with the return of volatility in Euronext’s markets, and a supportive macro environment. This translated into strong trading volumes on both cash, derivatives and spot FX markets, with derivatives volumes also benefitting from The Order Machine (TOM) ceasing activities in the Netherlands in June 2017.

As a consequence, Euronext consolidated revenue increased by +15.9% in Q1 2018, to €146.7 million, mainly driven by volume growth, the positive impact of Agility for Growth initiatives (€4.2 million), and the acquisition of FastMatch in August 2017, which diversified Euronext’s top line with spot FX trading revenue (€5.2 million). Non-volume related revenue amounted to 42% of total Group revenue in Q1 2018. The operating cost coverage ratio1 reached 104% in Q1 2018.

Operational expenses excluding Depreciation & Amortisation increased by +4.3% to €58.5 million due to the deployment of Agility for Growth initiatives, incorporation of businesses acquired in 2017, and Euronext Dublin acquisition costs, offsetting the decrease in core business expenses, primarily in staff expenses, systems & communication and professional services.

At the end of Q1 2018, €16.2 million of cumulated cost savings had been achieved since 1 April 2016, up compared to the end of 2017 (€10.9 million).

During Q1 2018, Agility for Growth initiatives generated €4.2 million of revenue and €3.7 million of costs, driven by Corporate Services dynamism and the first revenues from Post Trade APA/ARM.

EBITDA growth for the quarter was strong at +25.1%, to €88.2 million, representing a margin of 60.1%, up 4.4 points compared to Q1 2017 due to the aforementioned items.

EBITDA margin of core business and Agility for Growth, excluding clearing, reached 63.5% in Q1 2018, up 6.8 points compared to Q1 2017.

Excluding the impact of the consolidation of FastMatch and the cost of acquisition of Euronext Dublin for €2 million (“New perimeter”, see below), Euronext consolidated revenue would have amounted to €141.5 million in Q1 2018, up +11.7%, with an EBITDA margin of 62.1%, up 6.4 points compared to Q1 2017 (see below).

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

The table below sums up the various indicators used above (full table in appendix):

       
in M€ 2017 2018
            Q1   Q2   Q3   Q4   FY   Q1
Revenue

Core business excluding clearing 1

113.8   122.4   110.2   117.7   464.1 124.2

Agility for Growth initiatives (AfG)2

1.0 1.6 2.9 4.3 9.8 4.2

Core business + AfG, excl. clearing and new perimeter 3

114.8 124.0 113.1 122.0 473.9 128.5

New perimeter (FastMatch and Euronext Dublin4

2.9 4.4 7.2 5.2
  Total Group revenues (including clearing)   126.6   137.3   128.7   139.7   532.3   146.7
EBITDA margin Core business excluding clearing1 58.0% 59.7% 56.4% 61.0% 58.8% 65.3%
Agility for Growth initiatives (AfG)2 -89.6% -13.7% 7.8% -7.7% -12.2% 11.4%
Core business + AfG, excl. Clearing and new perimeter 3 56.7% 58.8% 55.2% 58.5% 57.3% 63.5%
New perimeter (FastMatch and Euronext Dublin) 44.0% 21.7% 30.5%

6.2% 5

  EBITDA margin (including clearing)   55.7%   57.7%   54.0%   56.4%   56.0%   60.1%
 

Depreciation and Amortisation increased by +37.9% in Q1 2018, to €5.2 million, impacted by new acquisitions, with PPA6 for €1.5 million in Q1 2018.

Operating profit before exceptional items was €82.9 million, a +24.3% increase compared to Q1 2017.

€1.0 million of exceptional costs were booked in Q1 2018 compared to €3.1 million in Q1 2017 related to the potential acquisition of LCH SA.

Net financing expenses for Q1 2018 were €0.4 million compared to €1.1 million in Q1 2017, that was marked by one-off items related to the previous term loan and the potential acquisition of LCH SA

Results from equity investment amounted to €1.5 million in Q1 2018, resulting from the consolidation as an associate of LCH SA of which Euronext owns a 11.1% stake since 29 December 2017. In Q1 2017, €0.7 million in dividends were received from LCH Group.

Income tax for Q1 2018 was €25.2 million, representing an effective tax rate for the quarter of 30.4% (Q1 2017: €19.3 million and 30.5%).

Share of non-controlling interests mainly relating to FastMatch (90% owned), iBabs (60% owned), InsiderLog (80% owned) and Company Webcast (51% owned) amounted to €0.4 million in Q1 2018.

As a result, the net profit share of the Group for Q1 2018 increased by +30.6%, to €57.3 million. This represents a reported EPS of €0.82 basic and €0.82 fully diluted in Q1 2018, compared to €0.63 basic and €0.63 fully diluted in Q1 2017. The number of shares used for the basic calculation was 69,599,329 and for the fully diluted calculation was 69,929,019.

Adjusted7 EPS is up +28.1% in Q1 2018, at €0.85, compared to €0.66 in Q1 2017.

As of 31 March 2018, the Company had cash and cash equivalents of €288.3 million, and €338 million of financial debt. Euronext gross debt / LTM EBITDA ratio amounted to 1.07 at the end of March 2018. In Q1 2018 Euronext generated a net cash flow from operating activities of €75 million, compared to €57 million in Q1 2017.

Euronext Dublin has been consolidated in Euronext’s balance sheet at end of March 2018. The contribution of Euronext Dublin to Group P&L will start only in the second quarter of 2018 and the PPA will be computed in the course of the second quarter.

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1 ‘Core business’ refers to the perimeter defined in May 2016 investor day press release available on www.euronext.com
2 Agility for Growth initiatives as disclosed in the press releases published in May 2016 and on 19 February 2018, available on www.euronext.com
3 Scope used for the 61-63% EBITDA margin 2019 target of Agility for Growth strategic plan (see press release published on 19 February 2018)
4 Includes Euronext Dublin acquisition costs in Q1 2018. Euronext Dublin P&L will be consolidated in Q2 2018)
5 Includes the Euronext Dublin acquisition cost for €2 million, diluting the margin of the new perimeter including FastMatch in Q1 2018
6 Purchase Price Allocation
7 Definition in appendix

Q1 2018 business highlights

  • Listing
     
In €m, unless stated otherwise   Q1 2018   Q1 2017   % change
Listing revenue   18.0   18.8   -4.3%
Annual fees 8.3 7.9 +6.1%
Follow-ons 2.3 4.0 -41.4%
IPOs 1.0 2.8 -63.7%
Corporate Services 3.7 0.9 n/a
Others 1.1 1.3 -15.8%
Bond fees   1.6   1.9   -18.8%
Money raised   99,723   95,948   +3.9%
 

Listing revenue was €18.0 million in Q1 2018, a decrease of -4.3% compared to Q1 2017. This weak performance was driven by a decrease in IPOs in addition to a decline in follow-on activity, partially offset by the positive impact of the Corporate Services initiative, part of the “Agility for Growth” strategic plan. Annual fees increased by 6.1% to €8.3 million.

Primary market activity was impacted by unfavorable market conditions, as the uptick in volatility reduced appetite for new listings. However, Q1 2018 saw the listing of large capitalisations on Euronext’s market in Amsterdam with B&S and NBIC. During the first quarter of 2018, 6 new listings, including 4 SME deals, were completed, compared to 6 listings in the first quarter of 2017. This translated into €3.4bn raised in Q1 2018, a decrease from €3.7bn last year.

The European Tech SME initiative continued to gain traction, with 2 new listings in Q1 2018 on Euronext Brussels and Euronext Paris, respectively from a UK-based life science company and an Italian company.

The market environment contributed to the decline in secondary market activity, with follow-on activity recording €9.1bn of secondary equity issues, compared to €11.6bn in Q1 2017, which was marked by a record activity.

Bond market declined, despite record issuance by a French corporate and positive trend on the green bond market

In total, €99.7bn in equity and debt were raised on Euronext’s markets in Q1 2018, compared to €95.9bn in Q1 2017.

Corporate Services, an Agility for Growth initiative, continued to consolidate its offering in Q1 2018 with the acquisition of InsiderLog. It generated €3.7 million in revenue, mainly due to the good performance of 2017 acquisitions iBabs and Company Webcast, the integration of InsiderLog, and the commercial effort deployed this year.

  • Trading
     
In €m, unless stated otherwise   Q1 2018   Q1 2017   % change
Trading revenue   71.5   56.8   +25.9%
Cash trading 55.7 46.7 +19.4%
ADV Cash market   8,507   6,976   +21.9%
Derivatives trading 10.6 10.1 +4.5%
ADV Derivatives market (in lots)   594,647   517,956   +14.8%
Number of trading days   63   65    
Spot FX trading   5.2   -   n/a
ADV spot FX Market (in USDm)   20,192   17,661   +14.3%
Number of trading days 64 64
 

Cash trading

Average daily volume for cash trading increased by +21.9% to €8.5 billion compared to Q1 2017, benefiting from a very favourable trading environment, with an uptick in volatility and a supportive macroeconomic background. In this environment of rising volume, cash trading revenue increased by +19.4% in Q1 2018, to a total of €55.7 million. Yield remained robust over the quarter averaging 0.52bps, up 0.1bps compared to Q1 2017.

Euronext maintained its strong cash trading market share throughout the quarter, averaging 65.3% in Q1 2018. This increase of +3.9 points compared to Q1 2017 reflects the continued optimization of the SLP programme and of non-member proprietary fee scheme Omega attracting volumes to Euronext markets. In addition, Euronext secured its market share from retail flows, as all Euronext retail brokers are now housed within the Best of Book service.

The average daily transaction value of ETFs on the electronic order book1 was €335 million over Q1 2018 and was up (+31.7%) compared to Q1 2017. The total number of ETFs listed on Euronext was 796 at end of March 2018.

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1 As from January 2018 Euronext reports its ETFs trading volumes on an on-exchange basis (Electronic order book volume)

Derivatives trading

Derivatives trading revenue increased in Q1 2018, to €10.6 million, compared to €10.1 million in Q1 2017. Individual equity derivatives achieved a +24.7% increase on average daily volume to 305,750 contracts, while the average daily volume on equity index derivatives was up +8.8% to 239,111 contracts. Financial derivatives trading volumes were supported by the return of volatility as well as by the continued improvement in Dutch options volumes following TOM ceasing activity in June 2017.

Commodity products recorded declining average daily volumes in 2017, down -5.4% to 49,787 contracts, impacted by poor conditions in the physical market.

Yield on derivatives averaged 0.28bps in Q1 2018, a decrease from 0.30bps in Q1 2017, related to the mix of products.

Spot FX trading

The average daily volume on the FastMatch spot foreign exchange market (of which Euronext owns 90% of the capital since August 2017) was $20.2 billion in Q1 2018, up +14.3% compared to Q1 2017. Spot FX trading generated €5.2 million of revenue in Q1 2018.

  • Market data & indices

Market data and indices organic performance performed well, with revenue up +15.4% to €29.7 million in Q1 2018, as a result of new market data agreements, and good indices performance.

  • Post-trade

Clearing

Clearing revenue increased by +10.3%, to €13.0 million in Q1 2018. As a reminder, the new contract for the clearing of financial derivatives products will come into force on 1 January 2019.

Settlement & Custody

Revenue from Interbolsa in Portugal increased by +9.3%, to €5.4 million in Q1 2018, driven by an increase of public debt and equities under custody compared to Q1 2017.

Other post-trade revenue of €0.1 million was recorded in Q1 2018, the first revenues generated by the APA/ARM initiative, part of the Agility for Growth strategic plan.

  • Market solutions & other

Revenue from Market Solutions increased by +5.2% in Q1 2018, to €8.9 million. The business continued to benefit from client project work with the increase in revenue supported by the addition of new capabilities to the hosted markets service and delivery of the first commercial releases of Optiq® to international clients.

Corporate highlights of Q1 2018, since publication of full year 2017 results on 19 February 2018

  • Volumes in Q1 2018

For the first three months of 2018, the average daily transaction value on the Euronext cash order book stood at €8,507 million, up +21.9% compared to the same period last year.

The average daily transaction value of ETFs on the electronic order book1 was €335 million over Q1 2018 and was up (+31.7%) compared to Q1 2017. At the end of March 2018, 796 ETFS were listed on Euronext compared to 804 at the end of December 2017.

For the first three months of 2018, the overall average daily volume on Euronext derivatives stood at 594,647 contracts (+14.8% compared to the end of March 2017) and the open interest was up at 17,512,067 contracts (+20.2% compared to the end of March 2017).

For the first three months of 2018, the average daily volume on the spot foreign exchange market of FastMatch stood at $20,192 million, up +14.3% compared to the same period last year.

  • Supervisory Board changes

On 19 March 2018, Euronext announced that Rijnhard van Tets, Chairman of the Supervisory Board of Euronext N.V. has decided to step down following the Annual General Meeting of Shareholders (AGM) to be held on 15 May 2018. Rijnhard van Tets has notified the Supervisory Board that he will not be available for a new term. The Supervisory Board has elected the current Vice-Chairman Dick Sluimers as its next Chairman, subject to regulatory approval.

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1 As from January 2018 Euronext reports its ETFs trading volumes on an on-exchange basis (Electronic order book volume)

  • Appointments in Euronext London and for US activities

On 22 March 2018, Euronext announced that the Supervisory Board has approved unanimously the following appointments:

  • Paul Humphrey, Head of Fixed Income, Rates and FX (FICC), is appointed in addition to his current position and subject to regulatory approvals, interim CEO of Euronext London, interim Head of Global Sales, and interim member of the Managing Board of Euronext N.V., in replacement of Lee Hodgkinson who left on 30 March 2018. Euronext is in the process of actively searching for Lee Hodgkinson’s permanent replacement.
  • Alain Courbebaisse, Chief Information and Technology Officer, is appointed as Chairman of the board of directors of FastMatch Inc., replacing Lee Hodgkinson.
  • Gil Mandelzis, CEO and founder of Capitolis, a New York headquartered pioneering technology provider for global capital markets, founder of Traiana and former CEO of EBS BrokerTec, is appointed non-executive director of Euronext US Inc.
  • Completed acquisition of the Irish Stock Exchange

On 27 March 2018, Euronext announced the completion of the acquisition of 100% of the shares and voting rights of The Irish Stock Exchange plc , after receiving regulatory approvals.

  • Major milestone achieved in the expansion of Euronext's federal model, in line with its mission to power pan-European capital markets to finance the real economy and its long term strategy, demonstrating its ability to welcome independent European exchanges:
  • The Irish Stock Exchange plc joins Euronext’s federal model and operates under the business name Euronext Dublin1, with Ireland becoming one of the Group’s six core countries
  • Deirdre Somers is appointed Chief Executive Officer of Euronext Dublin and is to join the Managing Board of Euronext N.V.2 with Group level responsibilities to develop the Irish equity market and the centre of excellence in Debt & Funds Listings and ETFs
  • Leading position of the combined Group as the largest centre for debt and funds listings in the world, with more than 37,000 listed bonds and 5,600 funds, and as a major player in ETFs with 1,050 listings, paving the way for future value creation for its shareholders and stakeholders
  • High prospects of value creation from this transaction confirmed:
  • Significant growth opportunities arising for the combined Group, through diversification of its top line:
    • Becoming the European ETF listing venue of choice for investors globally, providing an easy single entry point to Europe and a pan-European trading platform through its new MTF for ETFs (ETF Access) to be launched in H2 2018
    • Strengthening the Group’s leading position in debt listings with the launch of a new platform to improve corporate bonds liquidity, Euronext Synapse
    • Increasing market choice to existing and future Irish listed companies and the Irish capital markets’ ecosystem, with a single pool of liquidity, and leveraging Euronext corporate services for SME and technology companies to support scaling companies in Ireland
  • Confirmed €6m of expected pre-tax run-rate cost synergies, to be fully delivered in 2020, primarily driven by:
    • the migration to Optiq, Euronext’s new state-of-the-art proprietary trading platform
    • the aggregation of a pan-European offering on market data by migrating Euronext Dublin’s current offering onto Euronext’s platform
    • Euronext Dublin benefitting from the Group’s support functions
    • immediate start of the integration work to meet the 2020 target date
  • Expected return on capital employed above the cost of capital within year three, in line with Euronext’s disciplined M&A approach, and EPS accretive from year one
  • Euronext Dublin to be consolidated in Euronext P&L starting 1 April 2018, while balance sheet was consolidated at end of March 2018. As a reminder, Euronext Dublin generated3 €32.3 million revenue at an EBITDA margin of 31.9% in 2017.

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1 From 27 March 2018 The Irish Stock Exchange plc will use the trading name Euronext Dublin to carry out its commercial activities. Legal name change will take place in due course, pending regulatory approval.
2 Appointment subject to regulatory and shareholders’ approval
3 Unaudited figures

Corporate highlights since 31 March 2018

  • Successful launch of an inaugural €500 million bond issue, listed on Euronext Dublin

On 11 April 2018, Euronext announced the issue of a €500 million, 7-year inaugural bond, rated “A” by S&P, with an annual coupon of 1% and listed on Euronext Dublin1 on 18 April 2018. Euronext N.V. is rated “A, stable outlook” by S&P since 3 April 20182.

The order book reached an amount of more than €2.2bn, and was more than 4.4 times oversubscribed. The success of this transaction shows investors' strong confidence in Euronext’s ambitions, strategy and solid credit profile.

The proceeds of the issue were used to (i) refinance in whole the existing €165m term loan and drawings under the revolving credit facility in connection with the acquisition of Euronext Dublin, and (ii) for general corporate purposes in line with the Agility for Growth strategy.

The re-offer yield amounted to 1.047% with a re-offer spread to Mid Swap rate of 42bps.

  • Irish Stock Exchange (now Euronext Dublin) stand-alone first quarter 2018 performance

For the first quarter of 2018, the Irish Stock Exchange, recorded, on a stand-alone basis, a total income of €8.5 million, up +14.7% compared to Q1 2017 and reported an EBITDA margin of 32.0%, compared to 38.5% in Q1 2017. The increase in revenue was driven by good listing volumes in debt and funds, as well as annual fees. The decrease in EBITDA margin in Q1 2018 is mainly explained by one-off staff costs and acquisition related costs, while the margin of Q1 2017 was driven by low MIFID II and IT costs.

  • Volumes for April 2018
  • Cash trading

In April 2018, the average daily transaction value on the Euronext cash order book stood at €7,876 million, down –8.8% compared to April 2017 and down –11.2% from the previous month. For the first four months of 2018, the average daily transaction value on the Euronext cash order book stood at €8,512 million, up +14.2% compared to the same period last year.

The average daily transaction value on the ETFs order book was €243 million, down –24% compared to April 2017 and down –20.9% from the previous month. At the end of April 2018, 1,053 ETFS were listed on Euronext compared to 1,048 at the end of December 2017.

  • Derivatives trading

In April 2018, the overall average daily volume on derivatives reached 574,010 contracts, down –3.9% compared to April 2017 and down –2.3% compared to the previous month. In detail:

  • the average daily volume on equity index derivatives reached 209,680 contracts, down –23.0% compared to April 2017 and down –16.7% from the previous month,
  • the average daily volume on individual equity derivatives reached 304,787 contracts, up +15.4% compared to April 2017 and up +5.6% from the previous month,
  • the average daily volume on commodities derivatives reached 59,543 contracts, down –2.4% compared to April 2017 and up +26.4% from the previous month.

For the first four months of 2018, the overall average daily volume on Euronext derivatives stood at 589,674 contracts (+10.2% compared to the end of April 2017), and the open interest was up at 18,278,004 contracts (+23.0% compared to the end of April 2017).

  • FX spot trading

The average daily volume on the spot foreign exchange market of FastMatch, of which Euronext owns 90% of the capital since August 2017, stood at $19,366 million, up +1.7% compared to April 2017 and up +3.2% from the previous month. For the first four months of 2018, the average daily transaction value on FastMatch stood at $19,988 million, up +11.1% compared to the same period last year.

  • Listings

In April 2018, Euronext welcomed the listing of Oxatis in Paris, which raised €12 million, while Belgian company, Real Estates, listed in Amsterdam following previous listing on Euronext Brussels. In addition, €101.3 billion worth of bonds was raised on Euronext, of which €4.1 billion was issued in corporate bonds. €3.5 billion was also raised in follow-on equity.

  • Migration of bond regulated markets to Optiq® matching engine and order entry gateway

In April 2018, Euronext has delivered a major milestone for in its Optiq® programme: the bonds regulated markets were successfully migrated to the Optiq matching engine and order entry gateway, replacing UTP platform for this asset class. The migration for the equities will follow in June 2018.

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1 From 27 March 2018, the Irish Stock Exchange plc will use the trading name Euronext Dublin to carry out its commercial activities. Legal name change will take place in due course, pending regulatory approval.
2 Report available for information only at the following address: https://www.euronext.com/fr/investors/debt-and-bond-investors

Agenda

A conference call and a webcast will be held today at 9.00am CET (Paris time):

Website : www.euronext.com/en/investors

To connect to the conference call, please dial:

  • UK Toll Number: +44 3333000804 / UK Toll-Free Number: 08003589473
  • FR Toll Number: +33 170750711 / FR Toll-Free Number: 0800946608
  • IR Toll Number: +353 14311252 / IR Toll-Free Number: 0800948241
  • NL Toll Number: +31 207095189 / NL Toll-Free Number: 08004050000
  • BE Toll Number: +32 24035814 / BE Toll-Free Number: 080029913
  • US Toll Number: +1 6319131422 / US Toll-Free Number: +18558570686
  • PT Toll Number: +351 210609105 / PT Toll-Free Number: 800209235

PIN CODE: 27920893#

Live Webcast:

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

Financial calendar

  • Annual General Meeting of Shareholders: Tuesday 15 May 2018 at 10.30am CET (Paris time)
  • Q2 2018 results: Friday 3 August 2018
  • Q3 2018 results: Monday 12 November 2018

About Euronext

Euronext is the leading pan-European exchange in the Eurozone, covering Belgium, France, Ireland, The Netherlands, Portugal and the UK. With 1,300 listed issuers worth €3.7 trillion in market capitalisation as of end March 2018, Euronext is an unmatched blue chip franchise that has 25 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, 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 GrowthTM and Euronext AccessTM, simplifying access to listing for SMEs.

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.

© 2018, Euronext N.V. - All rights reserved.

APPENDIX

Non-IFRS financial measures

For comparative purposes, the company provides unaudited non-IFRS measures including:

  • Operational expenses excluding depreciation and amortisation
  • EBITDA, EBITDA margin.

Non-IFRS measures are defined as follows:

  • Operational expenses excluding depreciation and amortisation as the total of salary and employee benefits, and other operational expenses
  • EBITDA as the operating profit before exceptional items and depreciation and amortisation
  • EBITDA margin as the operating profit before exceptional items and depreciation and amortisation, divided by revenue.

Non-IFRS financial measures are not meant to be considered in isolation or as a substitute for comparable IFRS measures and should be read only in conjunction with the consolidated financial statements.

Adjusted EPS definition

   
In €m unless stated otherwise   Q1 2018   Q1 2017
Net Income Reported 57.3 43.9
EPS Reported (€ per share)   0.82   0.63
Intangible assets adj. related to acquisitions (PPA) - 1.5 -
Exceptional items - 1.0 - 3.1
Tax related to those items   0.7   0.8

Adjusted for intangible assets related to acquisitions,
capital gains or losses and exceptional items, incl. tax

Adj. Net Income 59.2 46.1
Adj. EPS (€ per share)   0.85   0.66
 

Quarterly summarized P&L

  in M€   2017   2018   Target
        Q1   Q2   Q3   Q4   FY   Q1   FY 2019   FY 2021
Revenue

Core business1

113.8   122.4   110.2   117.7   464.1 124.2 505  

Agility for Growth initiatives (AfG)2

1.0 1.6 2.9 4.3 9.8 4.2 55

Core business + AfG, excl. clearing and new perimeter 3

114.8 124.0 113.1 122.0 473.9 128.5 560
New Perimeter (FastMatch and Euronext Dublin (from Q2 2018)) 2.9 4.4 7.2 5.2
  Total Group revenue (including clearing)   126.6   137.3   128.7   139.7   532.3   146.7        
Costs (exc. D&A) Core business1 excluding clearing -47.9 -49.3 -48.1 -45.9 -191.2 -43.1 -184
Agility for Growth initiatives2 -1.8 -1.8 -2.6 -4.7 -11.0 -3.7 -27.5
Core business + AfG, excl. clearing and new perimeter 3 -49.7 -51.1 -50.7 -50.6 -202.1 -46.9 -211.5
New Perimeter (FastMatch and Euronext Dublin (from Q2 2018)) -1.6 -3.4 -5.0 -4.9
  Total Group Costs (including clearing and excl. D&A)   -56.1   -58.1   -59.2   -60.9   -234.4   -58.5        
EBITDA margin Core business1 excluding clearing 58.0% 59.7% 56.4% 61.0% 58.8% 65.3%
Agility for Growth initiatives2   -89.6%   -13.7%   7.8%   -7.7%   -12.2%   11.4%        
Core business + AfG, excl. Clearing and new perimeter 3   56.7%   58.8%   55.2%   58.5%   57.3%   63.5%   61-63%    
New Perimeter (FastMatch and Euronext Dublin (from Q2 2018))           44.0%   21.7%   30.5%  

6.2%4

  Group EBITDA margin (including clearing)   55.7%   57.7%   54.0%   56.4%   56.0%   60.1%
Savings Core business gross savings 10.9 10.9 16.2 22
Euronext Dublin expected costs synergies 6
  Total gross savings                   10.9   16.2   22   6
 

_______________
1 ‘‘Core business’ refers to the perimeter defined in May 2016 investor day press release available on www.euronext.com excluding clearing
2 Agility for Growth initiatives as disclosed in the press releases published in May 2016 and on 19 February 2018, available on www.euronext.com
3 Scope used for the 61-63% EBITDA margin 2019 target of Agility for Growth strategic plan (see press release published on 19 February 2018)
4 Includes the Euronext Dublin acquisition costs, optically diluting the margin of the new perimeter including FastMatch in Q1 2018

Consolidated income statement

     
Unaudited, In €m   Q1 2018   Q1 2017   % var
Revenue 146.7 126.6 +15.9%
Listing 18.0 18.8 -4.3%
Trading revenue 71.5 56.8 +25.9%
Cash Trading 55.7 46.7 +19.4%
Derivatives Trading 10.6 10.1 +4.5%
Spot FX Trading 5.2 0.0 N/A
Market Data & indices 29.7 25.7 +15.4%
Post-trade 18.5 16.7 +10.8%
Clearing 13.0 11.8 +10.3%
Custody and Settlement 5.4 4.9 +9.3%
Other post-trade revenue 0.1 0.0 N/A
Market Solutions & other revenue 8.9 8.4 +5.2%
Other income   0.1   0.1   -45.6%
Operational expenses excluding D&A -58.5 -56.1 +4.3%
Salaries and employee benefits -24.4 -24.0 +1.5%
Other Operational Expenses -34.2 -32.1 +6.4%
System & Communication -6.1 -5.4 +13.4%
Professional Services -11.8 -11.0 +7.4%
Clearing expense -7.2 -6.4 +11.2%
Accommodation -2.6 -2.6 +0.8%
Other Operational Expenses   -6.6   -6.8   -3.3%
EBITDA 88.2 70.5 +25.1%
EBITDA margin   60.1%   55.7%   +4.4%
Depreciation & Amortisation   -5.2   -3.8   +37.9%
Operating Profit before Exceptional items   82.9   66.7   +24.3%
Exceptional items   -1.0   -3.1   -67.0%
Operating Profit   81.9   63.6   +28.8%
Net financing income / (expense) -0.4 -1.1 -62.6%
Results from equity investments   1.5   0.7   +98.0%
Profit before income tax   83.0   63.2   +31.2%
Income tax expense -25.2 -19.3 +31.0%
Share of non-controlling interests   -0.4   -0.1   N/A
Profit for the period   57.3   43.9   +30.6%
 
EPS Reported (in € per share) € 0.82 € 0.63 +30.5%
EPS Diluted (in € per share) € 0.82 € 0.63 +30.6%
 

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

Consolidated comprehensive income statement

   
Unaudited, In €m   Q1 2018   Q1 2017
Profit for the period   57.7   43.9
 
Other comprehensive income        
Items that may be reclassified to profit or loss:
– Exchange differences on translation of foreign operations - 3.5 - 0.0
Other comprehensive income for the period, net of tax   - 3.5   - 0.0
Total comprehensive income for the period   54.3   43.9
 
Comprehensive income attributable to:
– Owners of the parent 54.0 43.8
– Non-controlling interests 0.3 0.1
 

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

Consolidated balance sheet

   
Unaudited, In €m  

As at 31 Mar
2018

 

As at 31 Dec
2017

Non-current assets
Property, plant and equipment 35.1 27.8
Goodwill and other intangible assets 651.7 515.1
Deferred income tax assets 8.0 8.0
Investments in associates and JV 77.3 75.0
Financial assets at fair value through OCI 153.0 147.5
Other receivables   7.9   8.0
Total non-current assets   933.1   781.4
 
Current assets
Trade and other receivables 109.5 95.0
Income tax receivable 3.6 1.4
Other short-term financial assets 13.2 0.0
Cash & cash equivalents   288.3   187.8
Total current assets   414.7   284.2
         
Total assets   1,347.8   1,065.6
 
Shareholders' equity
Shareholders' equity 770.5 715.3
Non-controlling interests   14.5   14.2
Total Equity   785.1   729.5
 
Non-current liabilities
Borrowings 164.7 164.7
Other long-term financial liabilities 10.0 10.0
Deferred income tax liabilities 19.4 19.8
Post employment benefits 11.9 11.7
Other provisions   5.1   5.1
Other Non-current liabilities   211.1   211.3
 
Current liabilities
Borrowings 173.3 0.2
Other short-term financial liabilities 6.5 6.7
Income tax payable 27.7 17.4
Trade and other payables 142.9 99.2
Other provisions   1.3   1.3
Total Current liabilities   351.7   124.8
         
Total Equity and Liabilities   1,347.8   1,065.6
 

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

Consolidated statement of cash flows

   
Unaudited, In €m   Q1 2018   Q1 2017
Profit before tax   83.0   63.2
 
Adjustments for:
- Depreciation and amortization 5.2 3.8
- Share based payments 0.3 1.1
- Share of profit from associates and joint ventures -1.5 -0.1
- Changes in working capital   4.5   4.0
Cash flow from operating activities   91.5   72.0
Income tax paid   -16.6   -14.9
Net cash flows from operating activities   75.0   57.1
 
Cash flow from investing activities
Acquisitions of associates and joint ventures -0.9 -1.2
Acquisition of subsidiary, net of cash acquired -147.9 -3.0
Purchase of available-for-sale financial assets 0.0 -9.6
Repayment of short-term investments 5.5 0.0
Purchase of property, plant and equipment -1.5 -2.6
Purchase of intangible assets -3.5 -4.7
Net cash flow from investing activities   -148.3   -21.0
 
Cash flow from financing activities
Proceeds from borrowings, net of transaction fees 173.0 0.0
Repayment of borrowings, net of transaction fees 0.0 -70.0
Interest paid -0.2 -0.2
Interest received 0.1 0.1
Transaction of own shares 1.1 0.7
Employee Share transactions -0.1 0.0
Net cash flow from financing activities   174.0   -69.4
         
Total cash flow over the period   100.7   -33.3
Cash and cash equivalents - Beginning of period 187.8 174.5
Non Cash exchange gains/(losses) on cash and cash equivalents   -0.1   0.0
Cash and cash equivalents - End of period   288.3   141.2
 

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

Volumes for Q1 2018

Cash markets activity

     
    Q1 2018   Q1 2017    
Nb trading days   63   65    
NUMBER OF TRANSACTIONS (Buy and sells) (reported trades included)            
    Q1 2018   Q1 2017   Change %
Total Cash Market *   127,728,216   113,730,560   12.3%
ADV Cash Market *   2,027,432   1,749,701   15.9%
TRANSACTION VALUE ( € million - Single counted)            
(€m)   Q1 2018   Q1 2017   Change %
Total Cash Market *   535,945.79   453,439.62   18.2%
ADV Cash Market *   8,507.08   6,975.99   21.9%
* (shares, warrants, trackers, bonds...)
LISTINGS
 
Number of Issuers   As at end Mar-18   As at end Mar-17    
            Change %
EURONEXT **   1,246   1,287   -3.2%
SMEs   703   740   -5.0%
**(Euronext, Euronext Growth and Euronext Access)
 
Capital raised on Equities on Primary and Secondary Market
 
EURONEXT (Euronext, Euronext Growth)            
(€m)   Q1 2018   Q1 2017   Change %
Nb New Listings **   6   6    
Money Raised New Listings incl over allotment   891   190   369.9%
of which Money Raised New Listings   891   182   389.0%
Follow-ons on Equities   9,135   11,637   -21.5%
Corporate Bonds   21,044   12,374   70.1%
Financials Bonds   38,542   40,286   -4.3%
Public/Semi-public Bonds   10,226   16,932   -39.6%
Others   19,886   14,530   36.9%
Total Money Raised *   99,723   95,948   3.9%
of which SMEs            
(€m)   Q1 2018   Q1 2017   Change %
Nb New Listings **   4   4    
Money Raised New Listings incl over allotment   213   190   12.4%
of which Money Raised New Listings   213   182   17.0%
Follow-ons on Equities   1,408   2,581   -45.5%
Corporate Bonds   30   18   65.4%
Financials Bonds   10   0   -
Others   0   0   -

* included New Listings incl over allotment, Follow-ons on Equities, Corporate Bonds on Euronext Listed Issuers. March 2017 figures for public
/ semi-public bonds have been corrected upwards to €900 million, following a technical issue on the number of securities on a bond issuance
that resulted in YTD figures being corrected accordingly as of May 2017.

 

Derivatives markets activity

       
      Q1 2018   Q1 2017    
Nb trading days     63   65    
Volume (in lots)              
      Q1 2018   Q1 2017   Change %
Equity     34,326,220   30,227,578   13.6%
of which AtomX     258,922   147,760    
               
Index     15,063,989   14,284,159   5.5%
of which AtomX     102,476   33,281    
Futures     10,344,420   10,920,081   -5.3%
of which AtomX     102,476   33,281    
Options     4,719,569   3,364,078   40.3%
of which AtomX     0        
               
Individual Equity     19,262,231   15,943,419   20.8%
of which AtomX     156,446   114,479    
Futures     17,922   34,671   -48.3%
of which AtomX     3,500   8000    
Options     19,244,309   15,908,748   21.0%
of which AtomX     152,946   106,479    
               
Commodity     3,136,553   3,421,189   -8.3%
Futures     2,937,750   3,188,198   -7.9%
Options     198,803   232,991   -14.7%
               
Other     0   18,399    
Futures     0   0    
Options     0   18,399    
               
Total Euronext     37,462,773   33,667,166   11.3%
Total Futures     13,300,092   14,142,950   -6.0%
Total Options     24,162,681   19,524,216   23.8%
 
       
ADV (in lots)              
      Q1 2018   Q1 2017   Change %
Equity     544,861   465,040   17.2%
of which AtomX     4,110   2,273    
               
Index     239,111   219,756   8.8%
of which AtomX     1,627   512.0153846    
Futures     164,197   168,001   -2.3%
of which AtomX     1,627   512.0153846    
Options     74,914   51,755   44.7%
of which AtomX     0   0    
               
Individual Equity     305,750   245,283   24.7%
of which AtomX     2,483   1,761    
Futures     284   533   -46.7%
of which AtomX     56   123    
Options     305,465   244,750   24.8%
of which AtomX     2,428   1,638    
               
Commodity     49,787   52,634   -5.4%
Futures     46,631   49,049   -4.9%
Options     3,156   3,584   -12.0%
               
Other     0   283   -100.0%
Futures     0   0    
Options     0   283   -100.0%
               
Total Euronext     594,647   517,956   14.8%
Total Futures     211,113   217,584   -3.0%
Total Options     383,535   300,373   27.7%
 
       
Open Interest              
      Mar-18   Mar-17   Change %
Equity     16,910,033   13,906,420   21.6%
               
Index     1,437,524   1,426,710   0.8%
Futures     557,651   582,514   -4.3%
Options     879,873   844,196   4.2%
               
Individual Equity     15,472,509   12,479,710   24.0%
Futures     15,999   11,365   40.8%
Options     15,456,510   12,468,345   24.0%
               
Commodity     602,034   658,042   -8.5%
Futures     387,612   428,437   -9.5%
Options     214,422   229,605   -6.6%
               
Other     0   1,294    
Futures     0   0    
Options     0   1,294    
               
Total Euronext     17,512,067   14,565,756   20.2%
Total Futures     961,262   1,022,316   -6.0%
Total Options     16,550,805   13,543,440   22.2%
 

Spot FX Trading

     
    Q1 2018   Q1 2017    
Nb trading days   64   64    
 
Spot FX VOLUME (in USD millions, single counted)            
    Q1 2018   Q1 2017   Change %
Total Spot FX Market   1,292,303   1,130,306   14.3%
ADV Spot FX Market   20,192   17,661   14.3%
 

*END*

Euronext
Investor Relations:
Aurélie Cohen, +33 1 70 48 24 17
ir@euronext.com
or
Media:
Alice Jentink, +31 20 721 4488
mediateam@euronext.com

Source: EURONEXT PARIS SA
Provider: BusinessWire