(AOF) – In the fourth quarter, Euronext recorded a 67.8% increase in profit, group share, to 112.7 million euros. For the second quarter in a row, Borsa Italiana was consolidated over the whole period. Ebitda increased by 64.1% to 208.2 million euros, representing a margin of 56.3%, an increase of 1.6 basis points. On a like-for-like basis, the pan-European stock market margin increased by 1.8 points to 57%.
Euronext’s consolidated revenue reached €370.1 million, up 59.5%, resulting in particular from the consolidation of Borsa Italiana. Like-for-like, it rose by 4.3%.
In accordance with Euronext’s dividend policy, a payout rate of 50% of net income, representing a dividend for 2021 of €206.7 million (€1.93 per share) will be proposed at the AGM on 18 May 2022.
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Key points
– First European financial center created in 2000, present in 20 states, bringing together the regulated markets of Amsterdam, Brussels, Dublin, Lisbon, Milan, Oslo and Paris, as well as several platforms;
– Revenues of €1.4 billion, split between transactions for 30%, listing for 17%, advanced data services for 16% and custody & settlement-delivery for 13%…;
– Growth model based on 5 pillars: strengthening of the value chain (clearing activities, migration of the Core Data Centre, etc.), expansion of the platform offer (Portugal, Norway, Denmark and Italy), expansion of the offer in quotations, innovative products and services, strengthening of positions in sustainable finance and continued external growth;
– Open capital with reference shareholders holding 25.44% of the shares -ABN Amros, Caisse des dépôts, Euroclear, SFPI, Cassa Depositi e Prestiti and Intesa San Paolo;
– Company incorporated under Dutch law, Stéphane Boujnah being Chairman and Chief Executive Officer of the 9-member Board of Directors;
– Maintenance of financial solidity after the purchase of Borsa Italia, financed by private placement, market call of €1.8 billion and loan of the same amount.
Challenges
– “Growth for impact 204” strategy: annual growth of 3-4% in turnover and 5-6% in operating income, maintenance of the dividend policy (rate of 50%) and investments (3 -5% of turnover) / synergies with the Milan Stock Exchange of €100 for integration costs estimated at €160 million;
– 4 priorities for the innovation strategy -digitalization, deployment of information sharing and co-design, reinforcement of the efficiency of central technologies and integration of innovations such as tokenization, tailor-made trading models, etc.;
– Environmental strategy on 2 pillars, internally the reduction of the carbon footprint and, for clients, an expansion of the service offer, accelerating the transition to sustainable finance: expansion of the offer of ESG indices / catalog Green bonds and focus on Blue Bonds (related to oceans and seas) / support for issuers in their ESG transition;
– Continuation of IPOs in Europe, above their 2014 level;
– Maintaining competitive advantages – a single platform for transactions on European regulated markets and a range of services covering all the needs of financial market participants;
– High capacity for innovation, operating margin higher than that of its European competitors and speed of execution of integrations.
Challenges
– Weight and volatility of European regulation;
– Integration of the Milan Stock Exchange purchased for €4.3bn in April and realization of the accretive effect on earnings, expected from 2021, and cost savings;
– At 3
th
quarter of 2021, 10% (71% with Borsa italiana) increase in revenues and 46% (65%) increase in net profit.
Many challenges for European banks
The European retail banking model is particularly challenged by the rise of digital technology. Some are withdrawing from this activity, as is the case with HSBC. Added to this is an increase in risks. Thus, according to the ECB, the strong activity of the big banks on the market for leveraged transactions and the markets for derivative products linked to equities expose them to excessive risk-taking.
As for French banks, since the health crisis, they are increasingly exposed to cyber risk following the need to switch massively and quickly from financial activities to teleworking and the provision of remote services.