Euronext publishes Q1 2018 results

STRONG SET OF FINANCIALS DRIVEN BY HIGH REVENUE CAPTURE IN A VOLATILE ENVIRONMENT AND BY COST EFFICIENCY

Amsterdam, Brussels, Dublin, Lisbon, London and Paris – 15 May 2018 – Today Euronext, 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 business[2] 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.”

 

[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

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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 €3.9 trillion in market capitalisation as of end June 2018, Euronext is an unmatched blue chip franchise that has 24 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. 
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