Euronext, the pan-European exchange in the Eurozone with nearly 1,300 listed issuers, has just announced its results for the full year 2017.
Strong operating performance for the full year 2017
Increase in revenue to €532.3 million (+7.2%):
- Despite low volatility, cash trading revenues at €190.3m up 5.3% , thanks to strong market share at 64.4% (67.1% in Q4) and improving volumes (ADV at €7.5bn up 6.7%). Strong growth in listing revenue
- Solid contribution from revenue diversification initiatives with FastMatch and Agility for Growth contributing respectively to the group’s revenue for €7.2m and €9.8m
Robust EBITDA, at €297.8m (+4.9%), with margin at 55.9% (-1.2pt), despite the costs of ramp-up of projects
- Continued core business cost discipline partially offsetting the impact of the change of perimeter, MIFID II compliance and Optiq® projects, and slowing the growth of operational expenses (€234.5 million, up 10.3%)
- €10.9 million of cumulated gross efficiencies achieved since Q2 2016, as part of the cost reduction programme announced in the Agility for Growth plan
Significant increase in EPS (basic): €3.47 (+22.4%). Adjusted EPS at €3.09 (+4.8%)
- Net income, share of the Group, at €241.3m up 22.5%: combination of good operating performance, capital gain from LCH SA share swap (€40.6m) and non-recurring tax release in Q4 (€20.4m)
- First components of Optiq® (cash and derivatives market data gateway) live in 2017, and confirmed delivery of the cash trading platform in H1 2018
Proactive and disciplined capital deployment strategy
- Over €300m of capital invested or committed into 8 companies over the last 13 months
- Proposed dividend of €121m (€1.73 per share, +21.8%), representing 50% of 2017 reported net income, including LCH SA share swap capital gain, to the AGM on 15 May 2018
Outlook for 2018 and 2019
- Confirmed 2019 target of an EBITDA margin of 61% to 63% excluding clearing, with core business revenue growth at +2.0% CAGR 2015-2019 and cost gross savings of €22m
- Core business costs reduction expected to start in H2 2018, after the delivery of IT projects
- Agility for Growth initiatives expected to contribute to €55m revenue (vs. €70m in May 2016) at 50% EBITDA margin in 2019, due to re-allocation of resources on most value creating growth projects
- 2019 financials will also benefit from the full-year contribution of FastMatch and of the Irish Stock Exchange (after closing)
| Key figures – in €m, unless stated otherwise | 2017 | 2016 | % change |
| Revenue | 532.3 | 496.4 | +7.2% |
| Operational expenses excluding D&A | -234.5 | -212.5 | +10.3% |
| EBITDA | 297.8 | 283.9 | +4.9% |
| EBITDA margin | 55.9% | 57.2% | -1.2pt |
| Net income, share of the Group | 241.3 | 197.0 | +22.5% |
| EPS (adjusted)2 | 3.09 | 2.95 | +4.8% |
| DPS | 1.73 | 1.42 | +21.8% |
Stéphane Boujnah, Chief Executive Officer and Chairman of the Managing Board of Euronext, commented:
2017 was a strong year with key milestones reached for Euronext. We launched growth initiatives, resolved the uncertainties related to clearing, secured the first significant acquisitions since our IPO, delivered the first components of Optiq® and became MIFID II compliant. As a consequence, we are publishing today a strong set of results, showing the strength and growth profile of a profoundly transformed Euronext.
Our confidence is strong for the next two years. Core business revenue should grow in line with forecasts, and we will continue our cost control discipline to ensure the 61% to 63% EBITDA margin target is reached in 2019, excluding clearing activities. FastMatch and the Irish Stock Exchange at closing will further contribute to our 2019 performance. To reflect our active management of priorities, we now forecast €55m revenue at a 50% EBITDA margin for Agility for Growth initiatives in 2019. We will continue to deploy our capital through pertinent acquisitions and keep a 50% dividend pay-out ratio, showing our continued commitment to provide value creation to our shareholders.