Milestones H1
During 2002 Euronext has made significant progress integrating and developing its business. The main milestones achieved include:
- January
LIFFE becomes part of Euronext.life
100% of BVLP shareholders agreed the merger with Euronext - February
Warsaw stock exchange and Euronext sign cross membership and cross-trading agreement
Euronext finalises transfer of the Amsterdam settlement activities and sale of 20% stake in Clearnet to Euroclear
Clearnet and CCG (Italy) sign an agreement to provide CCP services for Italian government securities traded on MTS
- March
Clearing 21 ® successfully implemented for Brussels cash markets - May
Launch of NextWarrants, the dedicated platform and segment for Warrants.
Amsterdam derivative products floor to screen migration ahead of schedule:
to be achieved before year end
Euronext Amsterdam migration on Clearing21 ® (cash) scheduled on October 25 th
Highlights
- Cash trading. The total number of trades in 2002 increased by 3.6% compared to the first half 2001; revenues are down by 5.3%. Supportive measures linked to NSC implementation had a negative impact of €6 million. Nevertheless, the EBIT margin increased by 36.9% owing to the end of migration costs and the synergies benefits that are starting to play.
- Listing fees. Due to the world-wide economic slowdown the number of IPOs and secondary offerings has decreased; (27 on the first half of 2001 and 9 for 2002); we achieved revenues of €23.08 million, a decrease of -13.4%. Thanks to a tight cost control policy, the EBIT margin performed well (51.4% versus 46.4%).
- Derivatives trading. Revenues increased by 13.3 % to € 139.78 million and number of contracts traded by 21.32%. The non-correlation between revenues and volumes growth is mainly due to our product mix and our tariffs structure. In spite of sustained investment to move from open outcry in Amsterdam to electronic trading, the EBIT margin increased by 28.0% (23.3% versus 18.2%).
- Clearing.The revenue increase (+3.1%) is due to the growth in derivatives trading volumes and the strong cash activity in Q2 2002. This activity showed a strong EBIT improvement, (32.5% versus 25.1% in 2001), which is explained by reduced development and migration costs linked to the Clearing 21® roll-out.
- Settlement and custody. Settlement and custody revenues increased by €1.1 million (+6.73%) to € 17.72 million.
- Information services. Revenues increased by 2.2% yoy, meeting our expectations. This is a good achievement taken into account the difficulties in the financial industry. EBIT margin increased slightly from 16.3% to 18.5%.
- Sales of developed software/solutions. Revenues grew by 41% yoy to €70.6 million; of which €9.5 million are generated by Liffe Market Solutions. The EBIT margin increased from 17.8% to 23.4%.
- Other Revenues. Other revenues decreased by 11.3%. Other revenues mainly include permits and entrance fees to the Amsterdam floor as well as membership and grading fees.
Taken into account the market volatility observed so far, and the fact that traditionally the second half of the year is weaker than the first half, the company confirms that it will achieve and even outperform its 2002 initial targets. Due to good cash and derivatives trading volumes, combined with improved cost control, our 2002 full-year EBIT estimate is approximately 190 to 210 million euros after restating of exceptional items.
Jean-Francois Theodore, Chairman of the Managing Board said : 'These results show clearly the progress of Euronext. We are a young Company, created less than two years ago, but our business model is working. Our aim is to extract the maximum of synergies from the exchanges and franchises we run. We are delighted by the way LIFFE business is developing and adding value to the group. We are in a good position to further enhance shareholder value.'
For the full half year results please read the attached full report.
