Euronext Has Double Digit Growth Across Most Asset Classes
Revenue at €210.7 million (+32.5%):
-Trading revenue increased to €89.4 million (+34.0%), with growth across all asset classes and €6.7 million contributed by Nord Pool power trading. Like-for-like1 , trading revenue increased +19.0%. Recently launched single stock futures saw strong commercial traction and diluted derivatives overall trading yield
– Post-trade revenue increased to €36.1 million (+64.5%), driven by the consolidation of revenue from VPS, the Norwegian CSD, and higher clearing revenue. Like-for-like, post-trade revenue increased +7.9%
– Listing revenue increased to €36.1 million (+21.3%), driven by the consolidation of Oslo Børs VPS and the solid performance of Corporate Services at €7.9 million (+33.8% like-for-like). Like-for-like, listing revenue increased +6.0%
– Advanced data services revenue increased to €35.8 million (+16.0%), as a result of the consolidation of Oslo Børs VPS and Nord Pool, and the good performance of the core business. Like-for-like, advanced data services revenue increased +6.1%
– Nord Pool contributed €8.6 million2 – Group non-volume related revenue3 accounted for 49% of Q2 2020 total revenue (vs. 48% in Q2 2019), and covered 122% of operating expenses excluding depreciation & amortisation (vs. 124% in Q2 2019)
Euronext publishes solid second quarter 2020 results driven by increased trading volumes in all asset classes and continued benefits from diversification
➡️ https://t.co/IGImpA4AVh pic.twitter.com/5FQHXb2h4X
— Euronext (@euronext) July 29, 2020
EBITDA at €125.4 million (+27.8%), with EBITDA margin at 59.5% (-2.2pts); like-for-like, EBITDA margin was 61.7%:
– Group operating costs excluding D&A were up +€24.4 million to €85.3 million, primarily as a result of the consolidation of costs from acquired businesses currently undergoing integration
– Euronext confirms its 2020 guidance for costs, excluding D&A, of mid-single digit4 growth in 2020, compared to the H2 2019 annualised cost base, to reflect expected costs in H2 2020 related to the integration of Oslo Børs VPS and implementation of the strategic plan projects
Reported net income, share of the Group, at €82.1 million (+53.7%) and Adjusted EPS5 at €1.23 (+33.1%)
– Increased financing costs related to the interest expenses on the second bond issued in June 2019 – Income tax rate at 25.1%, positively impacted by tax one-offs Acquisition of VP Securities
– Danish Financial Supervisory Authority clearance was received on 15 July 2020 and closing is expected early August 2020 – 90.68% of total shares were tendered to the Euronext offer as of 15 July 20206 – Run-rate cash cost synergies7 in year 3 are expected to reach €7 million, through optimised operating model, IT footprint optimisation and rationalisation of support functions – Restructuring provisions are expected to be incurred in Q4 2020
[Results] Euronext delivered a solid performance in Q2 2020. A second quarter during which we also reached a new milestone in our ‘Let’s Grow Together 2022’ roadmap with the launch of a suite of #ESG products and services to empower #SustainableGrowth
➡️ https://t.co/CvFWUUyeNn pic.twitter.com/FYiZJmRmZG
— Euronext (@euronext) July 30, 2020
Stéphane Boujnah, Chief Executive Officer and Chairman of the Managing Board of Euronext, said: “In the second quarter of 2020, Euronext delivered a solid performance with double digit growth across most asset classes, which, combined with continued cost control, translated into a higher EBITDA of €125.4 million and a +33.1% increase in adjusted EPS to €1.23. Euronext confirms its 2020 cost guidance of mid-single digit growth in 2020 compared to the annualised second half 2019 cost base, as costs related to the Oslo Børs VPS integration and strategic plan projects are expected to ramp up in second half 2020.
This second quarter, we also launched a suite of ESG products and services to empower sustainable growth. This constitutes an important milestone in the ESG roadmap of our three-year strategic plan ‘Let’s Grow Together 2022’. In addition, we became the first stock exchange to endorse the UN Global Compact’s nine Ocean Principles, having been an Official Supporter of the United Nations’ Sustainable Stock Exchanges initiative since 2015.
The third quarter has gotten off to a positive start for our ongoing diversification strategy, with the Danish FSA’s approval for the acquisition of VP Securities in July. We expect to close the transaction early August 2020, and the acquisition to be EPS accretive in full year. We are anticipating €7 million run-rate cash cost synergies in year 3, through organisational and IT optimisation, delivering a return in line with our investment criteria. The integration process has already started and we will report VP Securities’ revenue contribution from the third quarter.”
Tokenization is an area of big growth.
The firms want to ‘to automate everything automatable’ for the mortgage industry.
They are simplifying U.S. Treasury hedging by providing a single point of access for credit and rates.
EMEA leads in sustainable smart beta interest, with the US a fast follower.
Periodic auctions provide an on-exchange alternative for executing block trades.