Euronext NV - Full year results 2018.

Strong increase of Euronext performance through 2018

  • Double digit growth in full year 2018 revenue to €615.0 million (+15.5%[1]), driven by:
    • Improved Group revenue diversification initiatives with contributions from Euronext Dublin of €24.6 million for 9 months of consolidation, FastMatch of €21.7 million and selected growth initiatives of €17.6 million
    • Listing revenue at €106.5 million (+26.4%) driven by the consolidation of Euronext Dublin and good performance of Corporate Services (€16.6 million)
    • Strong cash trading revenue of €210.9 million (+10.9%), through enhanced market share to 66.1% in 2018 (+1.7pts), effective yield management at 0.51bps (+4.9%), and improved volumes (Cash ADV at €8.1bn, +5.7%)
    • Strong performance of Advanced Data Services[2] with revenue at €118.3 million (+13.0%)
    • Non-volume related revenue accounted for 44% of total revenue in 2018, and covered 104% of operating expenses excluding D&A

 

  • Double digit growth in full year 2018 EBITDA to €354.3 million (+19.0%), with EBITDA margin at 57.6% (+1.7pts) in a year of consolidation of recent acquisitions and delivery of major steps of Optiq® trading platform:
    • Decrease of core business costs (-4.3%) thanks to costs discipline and with significant savings generated by the successful delivery of Optiq® for cash markets
    • Group operating costs (excluding D&A) up (+11.2%) mainly impacted by the consolidation of Euronext Dublin and FastMatch, and related one-off costs

 

  • Double digit growth in full year 2018 adjusted EPS at €3.44[3] (+11.2%). Decrease in EPS (basic) to €3.10 (-10.5%), because of negative comparison base in 2017 with one-off capital gain from LCH SA
    share swap and non-recurring tax release:
    • Net income, reported, share of the Group, at €216.0 million driven by strong operating performance, while impacted by €21.5 million of exceptional items and by €5.3 million of net financing expenses
  • In accordance with Euronext dividend policy, a pay-out ratio of 50% of reported net income representing a dividend for 2018 of €108 million (€1.54 per share) will be proposed to the AGM[4] on 16 May 2019. As a reminder, dividend for 2017 was positively impacted by significant one-off such as capital gain from LCH SA share swap and non-recurring tax release

Euronext full-year and Q4 2018 financial performance

In €m, unless stated otherwise, unaudited FY 2018 FY 2017 % change Q4 2018 Q4 2017 % change
Revenue 615.0 532.3 +15.5% 157.3 139.7 +12.6%
Operational expenses excluding D&A -260.8 -234.5 +11.2% -70.4 -61.0 +15.3%
Salaries and employee benefits -118.5 -104.4 +13.5% -33.4 -28.8 +16.0%
Other expenses -142.3 -130.1 +9.3% -37.0 -32.2 +14.8%
EBITDA 354.3 297.8 +19.0% 86.9 78.7 +10.5%
EBITDA margin 57.6% 55.9% +1.7 pts 55.3% 56.3% -1.1 pt
Depreciation & Amortisation -23.4 -16.9 +38.2% -6.1 -6.3 -2.5%
Operating Profit before Exceptional items 330.9 280.8 +17.8% 80.8 72.3 +11.6%
Exceptional items -21.5 -14.8 +45.2% -5.5 -0.6 N/A
Operating Profit 309.4 266.1 +16.3% 75.3 71.7 +5.0%
Net financing income / (expense) -5.3 -3.6 +46.1% -4.0 -1.6 N/A
Results from equity investments 7.6 48.6 -84.4% -0.2 42.1 -N/A
Profit before income tax 311.7 311.1 +0.2% 71.1 112.2 -36.6%
Income tax expense -94.1 -68.9 +36.6% -21.1 -6.9 N/A
Share of non-controlling interests -1.7 -0.9 +86.2% -0.4 -0.2 N/A
Profit for the period 216.0 241.3 -10.5% 49.6 105.1 -52.8%
Reported EPS (€ per share) 3.10  3.47 -10.5% 0.71  1.51 -52.8%
Adjusted EPS  (€ per share) 3.44  3.09  +11.2% 0.81  0.97  -16.6%

 

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

"Euronext delivered a strong financial performance in 2018 with double digit growth in revenue, EBITDA and adjusted EPS thanks to strengthened core business and market share on cash trading at 66%. Combined with efforts on cost, Euronext was able to reach most of its 2019 targets one year in advance, confirming the Q3 2018 momentum, with a core business and selected growth initiatives EBITDA margin reaching 61.6%. In 2018, Euronext successfully welcomed Euronext Dublin teams within the Group and achieved the migration of Irish markets to Optiq trading platform early February 2019, seven months after its transition for the Group cash markets. Euronext is pursuing its European strategy with the project to acquire Oslo BørsVPS, to reach another milestone in its value creation strategy and to fulfill its mission to finance the real economy in Europe. The Group is committed to deploy its capital and to analyze further acquisitions to expand its decentralized model in Europe and diversify its revenue profile.

Euronext Group has transformed itself in the past three years, with a top line growing by around €100m thanks to combined organic and external growth. In order to fully reflect the new Group, and given that most of the 2019 announced core business targets were met one year in advance, Euronext provides a costs guidance for 2019, prior to the release of its new strategic plan later this year, that will better help our stakeholders to assess its performance. For 2019, Euronext expects a low-single digit growth of Group operating expenses (excluding D&A) compared to 2018, thanks to its continued strong cost discipline."