Euronext Benefits From Diversification

Shanny Basar

Euronext said it benefited from its revenue and geographic diversification strategy as non-volume related income was nearly half of total group proceeds in the first quarter of this year.

Stéphane Boujnah, chief executive and chairman of Euronext, said in the results call this morning: “In the first quarter 2019, Euronext Group’s revenue grew thanks to a successful acquisition and revenue diversification strategy and despite an environment of subdued volumes.”

Boujnah added that non-volume related revenue was 47% of total group revenues in the first three months of this year.

On 4 February 2019 Euronext completed the migration of Euronext Dublin to the Optiq trading platform, which delivered €6.7m of cost savings.

“Irish capital markets participants now have access to the largest single liquidity pool in Europe,” Boujnah added. “The seamless migration is clear proof of the success of our concept of a decentralised federal model.”

Euronext competed is acquisition of the Irish Stock Exchange, now Euronext Dublin, in March last year. Euronext Dublin is also the centre of excellence in listings of debt & funds and exchange-traded funds within the group.

Norwegian expansion

“We will continue to develop our diversification strategy and geographical expansion,” said Boujnah.

Euronext has made an offer to acquire Oslo Børs VPS in Norway and acquired more than 50% of the shares.

“Shareholders’ approval was the last major condition to complete the transaction, since most of the other condition precedents highlighted in Euronext’s offer document were already met, including the clearance received from the Norwegian Ministry of Finance,” added the exchange.

The Norwegian Ministry of Finance has cleared Euronext to buy the whole of Oslo Børs VPS.

The exchange said it expects to complete the transaction before the end of next month despite Nasdaq also trying to buy the Norwegian bourse.

“After completion of the transaction, Oslo Børs VPS will contribute to the Group revenue diversification thanks to over 80% of non-volume related revenue,” added Euronext.

Euronext FX

In Asia Pacific, Euronext FX is opening a new office in Singapore and is setting up a matching engine in the country, which is  expected to go live in the fourth quarter of this year.

Euronext said in its presentation that the new matching engine in Singapore will create a strong development base in the region. In addition, customers in Asia-Pacific markets including Singapore, Australia and Hong Kong will benefit from an improved trading experience and connectivity.

Non-volume business

“Our non-volume business will continue to expand,” added Boujnah.

Stéphane Boujnah, Euronext

He noted that corporate services have expanded significantly and that Commcise made its first contribution to group revenues of €1.1m in the first quarter.

Commcise is a software as a service provider of research evaluation and commission management for financial services firms which Euronext acquired at the end of last year. The exchange said Commcise provides more value for Euronext clients, asset managers and broker-dealers by addressing the unbundling requirements of MiFID II, the European Union regulation which came into force last year.

Boujnah said Euronext will present its new strategic plan with 2022 financial guidance in October 2019.

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