SIX Aims to Increase Revenues by More Than 4% Per Annum03.09.2022
2021 was a successful year for SIX, despite the challenges and uncertainties that recurring waves of COVID-19 continued to inflict on society and financial markets. The income benefitted from organic growth and the newly combined business of SIX in Switzerland and Spain: For the first time the Spanish business acquired by SIX in mid-2020 contributed for a full 12 months. All four business units of SIX performed well, although they were differently impacted by various external factors, not least in connection with the pandemic.
— BME (@GrupoBME) March 9, 2022
- Operating Income amounted to CHF 1,498.3 million (+8.9%)
- Earnings before interest, tax, depreciation and amortization (EBITDA) totaled CHF 421.7 million (+14.8%)
- Non-operating result fell year-on-year due to significant one-off effects (in particular stake in Worldline, non-cash relevant) in the comparison years 2020 and 2021
- Earnings before interest and tax (EBIT) fell accordingly to CHF 147.2 million (-71.4%)
- Group net profit totaled CHF 73.5 million (-83.2%)
- Without the Worldline-related effects, Group net profit rose 37.3% compared to the previous yea
2021 Business Highlights
In 2021, key achievements included the launch of SIX Digital Exchange and several new ESG indices and data offerings, the continuing growth of digital billing and invoicing in Switzerland, and the launch of “Sparks”, a new equity segment for SMEs at SIX Swiss Exchange. While equity trading on the stock exchanges did not reach the unprecedented volumes of the previous year, the economic environment was still favourable for the Exchanges and Securities Services business. As of 1 January 2021, these units consist of the combined businesses of SIX in Switzerland and BME in Spain.Given the rapidly evolving state of industry consolidation, M&A has remained key to strengthening the competitive position in core offerings as well as helping improve margins and acquiring additional capabilities and technologies. In the year under review, SIX announced three targeted acquisitions, two of which were in the financial information business and one in the post-trading area.
- Completed organizational integration of BME, progressed on its technical integration
- Improved financial flexibility by additional bond issuances, including first digital bond
- Successfully executed on company-wide efficiency program, further increasing the company’s productivity
- Five IPOs in Switzerland, including the first SPAC
- Three IPOs in Spain, 16 new listings in BME Growth segment
- Launched new SME market segment Sparks
- Received regulatory approval for SDX
- Achieved record-year for products with crypto currencies as underlying
- Record volumes recorded on Swiss repo market
- Further expanded global reach in the custody business with new legal entities in Singapore and the US
- Established new client relationships with Greek and Italian central securities depository (CSD)
- Signed acquisition of European trade repository Regis-TR
- Launch of new indices (such as ESG indices) in Switzerland and abroad
- Expanding ESG and alternative data offerings
- Acquisition of ESG data provider Orenda as well as index and ETF data specialist Ultumus
- Continued growth in tax and regulatory product segments
- Further developed open banking platform bLink, by also venturing further into API-based business models
- Continued growth of eBill platform, reaching over 50 million transactions in 2021 (+27% YoY)
- Continued growth in cashless payments, registering over 1 billion debit card transactions in 2021 (+11% YoY)
Non-operating Result Substantially Impacted by One-Off Effects
Despite the improved operating result, EBIT and group net profit substantially decreased compared to the previous year. This was due to two opposing effects from the stake of SIX in Worldline in 2020 and 2021.In 2020, a partial sale of Worldline shares held by SIX as well as the merger of Worldline with payment services provider Ingenico had a highly positive effect on the 2020 net financial result, increasing earnings before interest and tax (EBIT) and group net profit. In 2021, an impairment resulting from the announced sale of Worldline’s Terminals, Solutions & Services (“TSS”) business negatively affected the share of profit and loss of associates of SIX (CHF -102.1 million). Compared to the highly positive result of the previous year, EBIT and group net profit saw a strong year-on-year deviation: EBIT amounted to CHF 147.2 million (-71.4%) and group net profit resulted to CHF 73.5 million (-83.2%).Without the Worldline-related effects, Group net profit rose 37.3% compared to the previous year.
DividendFor 2021, the Board of Directors recommends that the Annual General Meeting approve an ordinary dividend of CHF 4.75 per share (prior year: CHF 4.30).
Financial and Business Outlook
SIX continues to pursue its business growth strategy. This will allow SIX to expand its stable infrastructure, to set up new digital infrastructures, and to invest in the security of its systems. Growth is also a prerequisite for successfully operating a platform business. As volumes increase, economies of scale reduce unit costs. By lowering transaction costs within networks and creating new recurring added value for its customers, SIX stays competitive.
For the 2022-2024 horizon, SIX aims to increase its revenues by more than 4% per annum while also realizing efficiency gains and cost reductions. The resulting increase in profitability will further improve the financial flexibility of SIX, ensuring sufficient financing for continuous investments to grow the business and further strengthen the competitiveness of the Swiss and Spanish financial centres.
Revenue increases will come from new services and synergies as a result of the BME acquisition and from leveraging the market position of SIX in the financial information business, particularly by leveraging the acquisitions made in 2021.
Further, SIX will continue innovating to bring new products and services to market, but will also expand its existing offerings by entering adjacent markets. The increase in top-line growth will lead to increased profitability given the extensive fixed costs that are associated with some core business activities of SIX.
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