Euronext – Full Year Results

EURONEXT

PUBLISHES Q4 AND FULL YEAR 2019 RESULTS

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

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.

  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 growth^1 of Group operating expenses (excluding D&A) in 2020, compared
  to its second half 2019 annualised cost base.”