Euronext – Q2 2022 Results

Solid quarter driven by the sustained dynamism of non-volume activities and of trading operations. First revenue synergies related to the Borsa Italiana Group acquisition delivered.

Amsterdam, Brussels, Dublin, Lisbon, Milan, Oslo and Paris – 28 July 2022 – Euronext, the leading pan-European market infrastructure, today publishes its results for the second quarter 2022.

Q2 2022 revenue and income up +2.5% pro forma^[1], compared to Q2 2021 underlying revenue and income^[2], to €374.7 million (+14.0% reported, +€45.9 million) driven by the growth of non-volume related business and trading activities:

• Non-volume related revenue accounted for 59% of Q2 2022 total revenue (vs. 60% pro forma in Q2 2021) and covered 144% of underlying operating expenses, excluding D&A (vs. 150% in Q2 2021 pro forma).
• Contribution of the Borsa Italiana Group to revenue was €129.2 million.
• Trading revenue grew to €129.2 million (+3.7% pro forma, +14.6% reported), resulting from a robust performance across all asset classes in a volatile market environment. Cash trading revenue was €75.3 million (+1.4% pro forma, +7.4% reported), reflecting strong revenue capture, and fixed income trading revenue was €24.9 million (+2.4% pro forma, +44.0 % reported).
• Post-trade revenue grew to €93.9 million (+1.8% pro forma, +12.6% reported). Clearing revenue increased to €31.4 million (+5.5% pro forma, +18.0% reported) as a result of a volatile environment and net treasury income of Euronext Clearing was €15.7 million. Custody and Settlement revenue was €62.5 million (+0.1% pro forma, +10.1% reported) thanks to the resilience of the diversified Euronext Securities business model in a normalising settlement environment.
• Euronext remained the leading venue for equity listing in Europe and for debt listing worldwide.  Euronext recorded 19 new equity listings in Q2 2022. Listing revenue grew to €55.4 million (+7.8% pro forma, +15.0% reported), demonstrating the resilience of the business and the attractiveness of the offering.
• Advanced Data Services revenue grew to €52.0 million (+2.4% pro forma, +11.9% reported) due to a solid core data business performance.

Adjusted EBITDA^[3] up +2.5% pro forma to €221.7 million (+12.3% reported, +€24.3 million) reflecting continued cost discipline and successful ongoing integration. Adjusted EBITDA margin at 59.2% (stable pro forma, -0.9pt reported):

• Underlying operating expenses, excluding D&A, were €153.0 million (+2.6% pro forma, +16.4% reported), resulting from continued cost discipline in a context of ongoing integration.

Reported net income, share of the parent company shareholders, up +25.6% pro forma (+37.2% reported) to €118.9 million (+€32.2 million):

• Net financing expenses were at €9.1 million and results from equity investments amounted to €1.2 million, impacted by an impairment. Income tax rate was 27.1%.

Adjusted EPS^[4] was down -6.1% to €1.34^[5].

Key figures for Q2 2022

Net debt to reported EBITDA^[7] at 2.4x at the end of June 2022.

Climate commitment: Step up in Euronext ESG ‘Fit for 1.5°’ commitment setting ambitious emission reduction targets in line with the SBTi^[8]. The first major step was achieved with the successful migration to a full green Core Data Centre in June 2022.

Continued momentum in the delivery of targeted synergies, in relation to the Borsa Italiana Group acquisition:

• €24.1 million cumulated run-rate annual synergies achieved at the end of Q2 2022. €8.9 million run-rate annual synergies delivered in Q2 2022, mainly related to the first phase of revenue synergies arising from the successful migration of  Euronext’s Core Data Centre.  
• €36.7 million of cumulated implementation costs incurred at the end of Q2 2022, of which €5.4 million during Q2 2022.

Significant quarter for the integration of the Borsa Italiana Group:

• Successful move of Euronext’s Core Data Centre from Basildon, in the UK, to Bergamo, in Italy, paving the way for the migration of Italian cash and derivatives markets onto the Optiq® trading platform in 2023.
• Euronext Clearing adoption of VaR methodology for fixed income instruments advancing the European expansion of Euronext Clearing^[9].
• Acceleration of the integration of MTS and Euronext Securities Milan through the contemplated acquisition of the technology businesses from Nexi’s capital markets activities^[10].

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

“This second quarter of 2022 was marked by the continuation of the volatile environment seen since the first quarter of the year. Euronext’s business model again demonstrated its resilience, and generated solid growth in revenue, adjusted EBITDA and adjusted net income.

A key milestone in our ‘Growth for Impact 2024’ strategic plan was achieved with the successful migration of our Core Data Centre from Basildon, near London, to a fully green data centre in Bergamo, near Milan. This migration enables Euronext to deliver the first revenue synergies targeted under our 2024 strategic plan. This success paves the way to the migration of Italian cash and derivatives markets to the Euronext state-of-the-art European proprietary trading platform Optiq® by 2023. In addition, we pursued our integration work and we reached €24.1 million cumulated run-rate annual synergies in relation to the acquisition of the Borsa Italiana Group at the end of Q2 2022, 14 months after the closing of the transaction.

As previously announced, we disclosed our Fit for 1.5° climate targets, aligned with SBTi standards. These ambitious targets will be achieved through the transformation of our own operations without any purchase of any offsetting credit. These Euronext commitments have an impact on the whole ecosystem, engaging our suppliers to join forces with us for the creation of a more sustainable global financial system.”