Euronext Focuses On Innovation

Shanny Basar

Euronext said innovation and sustainable finance are central to the pan-European exchange’s new three-year strategic plan.

The exchange group held an investor day today in which management presented the new strategy.

The exchange group said that since it floated in 2014, it’s share price has increased by 270%.

Share price since IPO. Source: Euronext

The group  has expanded, diversified into new asset classes and services, and extended its federal model by acquiring market operators in Ireland and Norway.

Stéphane Boujnah, chief executive and chairman of the managing board of Euronext, said in the presentation that the group will continue to extend its business across the full value chain of financial markets. He added: “Innovation is at the heart of Euronext’s strategy.”

Stéphane Boujnah, Euronext

Innovation will include increasing digitalisation for operational efficiency, enhanced client experience and deeper client relationships and analytics. Possible new products could include tokenisation to capture alternative financing opportunities; bespoke trading models using new data; and the use of artificial intelligence to address new data needs and opportunities.

Chris Topple, head of global sales, said in the presentation that there is growing customer demand for data and capacity to handle more complex analytics with the cloud providing unlimited power and  increasing the speed of innovation.

Topple added there has been a shift in value captured from market data, with automation of trading, and continuous regulatory scrutiny, following the implementation of the MiFID II at the start of last year.

The 2022 strategy includes continued investment to deliver low latency market data feeds, easing the burden for customers to comply with rules and the development of analytic products based on proprietary data.

Chris Topple, Euronext

“We will accelerate the development of ESG-based indices,” Topple added. “We will further enhance technology to gain scale, agility and reach new types of clients.”

In addition Euronext will develop Optiq, the proprietary trading platform; increase deployment of the cloud and launch a fully functional distributed ledger technology stack.

Sustainable finance

The exchange will launch a green bond section, a cleantech franchise and environmental, social and governance ETF suite.

Sustainable finance strategy. Source: Euronext

“Euronext has a key position in the financial ecosystem. It serves the real economy by bringing together buyers and sellers in high integrity trading venues that are transparent, efficient and reliable,” added Boujnah. “In this key role, Euronext has a responsibility vis-à-vis the whole finance community to contribute to the financial stability and the sustainable agenda in the countries in which it operates.”

Financial targets

Euronext said it will continue to seek acquisitions  in line with its strict investment criteria and its commitment to a strong investment grade rating.

The strategic plan includes the following financial targets for 2002 – compound annual growth rate for organic revenue growth of between 2% and 3%; organic  EBITDA margin of more than 60%; and dividend pay-out of 50% of reported net income for the period.

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