Coronavirus Update

Euronext - Full Year Results

This content has been sourced from: https://www.euronext.com/en/about/media/euronext-p...

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.”

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%