Euronext Publishes First Quarter 2016 Results

Regulatory News:

Euronext (Paris:ENX) (Amsterdam:ENX) (Brussels:ENX) today announced its results for the first quarter of 2016.

• Resilient revenue despite turbulent market conditions: -2.7% to €126.5 million (Q1 2015: €130.0 million)
• Substantial reduction in operational expenses excluding depreciation and amortization: -12.1% to €54.7 million (Q1 2015: €62.2 million)
• EBITDA margin of 56.8% (Q1 2015: 52.2% )
• €85 million of cumulated efficiencies achieved
• New strategic plan, "Agility for Growth”, to be released tomorrow, 13 May 2016

"Despite turbulent market conditions, Euronext has continued to improve its EBITDA margin thanks to the Company’s ongoing cost discipline.These results once again demonstrate the resilience of Euronext business model. Tomorrow, we will present our strategic plan till 2019. It will reinforce our commitment to maintain robust cost control while increasing emphasis on selected growth initiatives in order to deliver more value to all our clients,” said Stéphane Boujnah, Chairman and CEO of the Managing Board of Euronext NV.

Financial performance

Third party quarterly revenue slightly decreased by -2.7% to €126.5 million (Q1 2015: €130.0 million), mainly driven by lower volumes on cash trading business, and a pause in the IPO market resulting from uncertain macroeconomic conditions in the first quarter of the year.

Operational expenses excluding Depreciation & Amortization decreased by -12.1% to €54.7 million (Q1 2015: €62.2 million), thanks to the benefits of the costs restructuring efforts implemented throughout 2015. However Q1’2016 cost base does not fully reflect the actual run-rate of the group as the quarter was positively impacted by some non-recurring items in the compensation and benefits line (about €3 million).

The ongoing robust cost discipline has enabled the EBITDA margin to strongly improve in Q1 2016, to 56.8% (Q1 2015: 52.2%).

Depreciation and Amortization decreased by -18%, amounting to €3.7 million (Q1 2015: €4.6 million), mainly due to the accelerated depreciation of assets in Q1’2015 in anticipation of the relocation of our premises in Paris and Brussels.

Quarterly operating profit before exceptional items was €68.0 million; a 7.6% increase compared to last year (€63.3 million).

Exceptional expenses in Q1 2016 have shown a credit of +€0.6 million due to a partial release of the provision for the French restructuring plans to align the provision with the execution of the departure plan (Q1 2015: +€6.3 million).

Income tax for Q1 2016 amounted to €21.6 million, representing a tax rate of 31%, in line with the Group’s normalized tax rate (Q1 2015: tax rate of 28.7%, which was positively impacted, amongst other discrete items, by the release of a provision created in 2014 in connection with the Cannon Bridge House lease).

The net profit for the first quarter of 2016 amounted to €48.0 million (same as in Q1 2015), representing an EPS of €0.69 (both basic and diluted) in Q1 2016, compared to €0.69 (basic) and €0.68 (diluted) in Q1 2015.

As of 31 March 2016 the Company had cash and cash equivalents excluding financial investments of €202.8 million, and total debt of €108.5 million.

Business highlights

• Listing

Listing revenues were €14.2 million in Q1 2016, a decrease of -7.4% compared to the €15.3 million achieved in Q1 2015. This performance was impacted by a pause in the IPO market resulting from uncertain macro conditions and by soft secondary market activity. In total €20.3 billion in equity and debt were raised on our markets in Q1 2016, compared to €40.2 billion in Q1 2015 which was a strong quarter. One new listing took place in Q1 2016 (on Enternext), raising €3 million compared to 14 listings for €2.6 billion during the same quarter in 2015. EnterNext registered 10 SME listings in Q1 2015.

• Trading

Cash trading

Cash trading business recorded revenues of €49.1 million in Q1 2016, a decrease of -5.7% compared to €52.1 million in Q1 2015.

Average daily volumes over the quarter reached €8.3 billion, a 4.4% decrease compared to Q1 2015 (€8.7 billion), which was our best quarter for volumes since Q2 2010. The number of trading days was limited this quarter to 62 compared to 63 in Q1 2015.

A strengthened competition between some Multi Lateral Facilities for low-yield flow slightly weakened our market share in Q1 2016, to 60.9% althought it returned to 61.4% in March 2016 (Q1 2015: 62.2%).

Activity on ETFs remained particularly dynamic in Q1 2016 with an average daily transaction value of €701 million, up +21% compared to Q1 2015. We also continue to grow our ETF franchise, with 82 new listings during Q1 2016, putting the overall number of ETFs listed at 757.

Derivatives trading

Derivatives trading revenue decreased slightly, by -2.2%, in Q1 2016 compared to the same quarter last year, amounting to €11.0 million (Q1 2015: €11.2 million). Quarterly Average Daily Volumes on individual equity derivatives increased by +3.2%, at 253,399 contracts during the first quarter of 2016, while volumes on equity index derivatives decreased by -3.2% at 245,824 contracts. Revenues were also impacted by the revised fee scheme implemented in Q1 2016 to address competitive situation on individual equity options in France.

Commodity products continued to perform well, benefiting from volatility on the raw materials prices. Quarterly average daily volume on commodities derivatives was up +27% compared with Q1 2015 at 63,398 contracts.

• Market data & indices

Market data & indices revenue in Q1 2016 was up 6.7% compared to the same quarter in 2015, to €26.2 million (Q1 2015: €24.6 million) benefiting from the positive impact of the new products and services launched during the course of 2015 as well as from some fee adjustments starting 1 January 2016.

• Post-trade

Clearing

For Q1 2016 Euronext recorded a 11.2% increase in clearing revenues, to €13.0 million, (Q1 2015: €11.7 million), benefiting from the strong performance and increased weight of our commodity franchise in our derivatives products mix.

Settlement & Custody

Revenues for Interbolsa in Portugal decreased by 4.5% in Q1 2016, to €4.8 million (Q1 2015: €5.0 million), due to the absence of recovery in the average value of assets under custody.

• Market solutions & other

Revenues from market solutions decreased by 12.9% in Q1 2016 (Q1 2015: €9.3 million) as we are phasing out the deliverance and service provision of our NSC® and UTP® platforms to customers. We expect this trend to reverse once our new Optiq™ platform becomes available for client delivery.

Corporate Highlights

• Agreement on new prudential requirements

Euronext and the Dutch Ministry of Finance have reached agreement on Euronext’s prudential requirements. As a result of the agreement, the Dutch Ministry of Finance has decided to withdraw its appeal against the ruling of the District Court of Rotterdam of 17 December 2015². The improved requirements enable Euronext to pursue acquisitions and investments and to define a prudent and consistent dividend policy and financial structure.

• Changes in management team

Euronext has announced a number of changes in its management team to strenghthen its leadership team since the beginning of the year:

• Maria João Carioca was appointed CEO of Euronext Lisbon, CEO of Interbolsa and member of the Managing Board of Euronext N.V., pending all relevant shareholder and regulatory approvals.
• Amaury Houdart joined Euronext as Chief Talent Officer. Amaury will lead both the Human Resources function and strategic initiatives related to talent development and organisational changes across Euronext.
• Nicolas Rivard joined Euronext as Chief Innovation Officer. Nicolas will lead Euronext’s efforts to anticipate technology changes affecting the market infrastructure sector, to assess disruptive evolutions and position Euronext in the most relevant projects, and to strengthen internal innovation processes and innovation culture.
• Pauline Bucaille joined Euronext as Chief Communication Officer. Pauline will lead all external and internal communication efforts to position Euronext as the leading pan-European platform to power capital markets in the financing of the real economy.
• Giorgio Modica has been appointed Chief Financial Officer, as Amaury Dauge is leaving the company to pursue new professional projects in fintech in New York on 1^st June 2016.

Financial calendar

Investor Day 13 May 2016
Q2’2016 results 28 July 2016
Q3’2016 results 9 November 2016

About Euronext

Euronext is the primary exchange in the Euro zone with more than 1 300 listed issuers worth more than €3.0 trillion in market capitalization as of end December 2015, an unmatched blue chip franchise consisting of 25 issuers in the EURO STOXX 50® benchmark and a strong diverse domestic and international client base.

Euronext operates regulated and transparent equity and derivatives markets. Its total product offering includes Equities, Exchange Traded Funds, Warrants & Certificates, Bonds, Derivatives, Commodities and Indices. Euronext also leverages its expertise in running markets by providing technology and managed services to third parties. Euronext operates regulated markets, Alternext and the Free Market; in addition it offers EnterNext, which facilitates SMEs’ access to capital markets.

Disclaimer

This press release is for information purposes only and is not a recommendation to engage in investment activities. This press release is provided "as is” without representation or warranty of any kind. While all reasonable care has been taken to ensure the accuracy of the content, Euronext does not guarantee its accuracy or completeness. Euronext will not be held liable for any loss or damages of any nature ensuing from using, trusting or acting on information provided. No information set out or referred to in this publication may be regarded as creating any right or obligation. The creation of rights and obligations in respect of financial products that are traded on the exchanges operated by Euronext’s subsidiaries shall depend solely on the applicable rules of the market operator. All proprietary rights and interest in or connected with this publication shall vest in Euronext.

This press release speaks only as of this date. Euronext refers to Euronext N.V. and its affiliates. Information regarding trademarks and intellectual property rights of Euronext is located at www.euronext.com/terms-use.

© 2016, Euronext N.V. - All rights reserved.

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