Euronext, the leading pan-European market infrastructure, today publishes its results for the fourth quarter and full year 2022.
- Full year 2022 underlying revenue and income[1] up +0.1% pro forma[2] at €1,467.8 million (reported revenue and income at €1,418.8 million, +€120.2 million, -3.2% pro forma2, +9.3% reported) illustrating the strong performance of non-volume related business and enhanced revenue capture:
- Non-volume related revenue accounted for 58.1% of 2022 underlying revenue1 (vs. 58% pro forma in 2021) and covered 141% of underlying operating expenses, excluding D&A[3] (vs. 142% pro forma in 2021).
- Trading revenue grew to €514.1 million (-0.8% pro forma, +10.5% reported). FX and power trading reported strong performances. The softer environment for cash trading volumes from the second semester of 2022 was offset by efficient management of yield and an uptick in market share from October 2022.
- Post-trade revenue (excluding NTI) grew to €364.5 million (+1.5 % pro forma, +13.7% reported). Custody and Settlement revenue was €243.1 million (stable pro forma, +10.9% reported) thanks to the diversified Euronext Securities business model as settlement activity stabilised. Clearing revenue increased to €121.4 million (+4.5% pro forma, +19.7% reported) mainly as a result of the consolidation of revenue from Euronext Clearing (acquired on 29 April 2021) and improved product mix. Net treasury income for Euronext Clearing was €44.0 million, excluding Q3 2022 €49.0 million of non-underlying pre-tax loss following the disposal of the Euronext Clearing portfolio1.
- Listing revenue grew to €218.4 million (+7.3% pro forma, +15.1% reported), demonstrating the resilience of the business in tougher market conditions. In 2022, Euronext remained the leading venue for equity listing in Europe, recording 83 new equity listings, and the leading venue for debt listing globally.
- Advanced Data Services revenue grew to €212.1 million (+4.8% pro forma, +15.5% reported), driven by the consolidation of the Borsa Italiana Group and a strong performance of both real-time and non real-time data businesses.
- Adjusted EBITDA3 was at €861.6 million (+€90.6 million, -1.2% pro forma, +11.7% reported) reflecting continued cost discipline despite strong inflationary pressure. Adjusted EBITDA margin was at 58.7% (-0.8pts pro forma, -0.7pts reported):
- Underlying operating expenses excluding D&A3 were €606.1 million (+2.0% pro forma, +14.9% reported), beating revised 2022 cost guidance of €612 million (initially €622 million), thanks to efficient cost control and several positive one-off impacts over the year.
- Reported net income, share of the parent company shareholders, was up +5.9% reported to €437.8 million (+€24.5 million):
- Net financing expenses were at €29.7 million and results from equity investments amounted to €18.7 million. Income tax rate was at 26.6%.
- Adjusted net income3, share of the parent company shareholders, was up +5.7% to €555.3 million
- Adjusted EPS[4] was down -4.8% at €5.21, due to higher share count
- Net debt to reported EBITDA was at 2.6x at the end of 2022 and net debt to adjusted EBITDA at 2.4x resulting from strong cash generation since the closing of the acquisition of the Borsa Italiana Group.
- Key figures for full year 2022:
In €m, unless stated otherwise |
2022 |
2021 |
% var |
% var l-f-l[5] |
% var pro forma |
|
|
Revenue and income |
1,418.8 |
1,298.7 |
+9.3% |
-0.2% |
-3.2% |
|
|
Underlying revenue and income1 |
1,467.8 |
1,298.7 |
+13.0% |
-0.2% |
+0.1% |
|
|
Underlying operational expenses excluding D&A3 |
(606.1) |
(527.6) |
+14.9% |
+2.7% |
+2.0% |
|
|
Adjusted EBITDA |
861.6 |
771.0 |
+11.7% |
-2.3% |
-1.2% |
|
|
Adjusted EBITDA margin |
58.7% |
59.4% |
-0.7pts |
-1.2pts |
-0.8pts |
|
|
Net income, share of the parent company shareholders |
437.8 |
413.3 |
+5.9% |
-3.3% |
||
|
Adjusted Net income, share of the parent company shareholders |
555.3 |
525.5 |
+5.7% |
|
|
|
|
Adjusted EPS (basic, in€) (share count differs between the two periods) |
5.21 |
5.47 |
-4.8% |
|
|
|
|
Reported EPS (basic, in€) (share count differs between the two periods) |
4.10 |
4.30 |
-4.6% |
|
|
|
|
Adjusted EPS (diluted, in€) (share count differs between the two periods) |
5.19 |
5.46 |
-4.8% |
|
|
|
|
Reported EPS (diluted, in€) (share count differs between the two periods) |
4.10 |
4.29 |
-4.6% |
|
|
- Dividend proposal:
As announced on 28 July 2022, a pay-out ratio of 50% of reported net income, adjusted for the Q3 2022 one-off post-tax loss related to the partial disposal of Euronext Clearing portfolio, representing a dividend for 2022 of €236.6 million (€2.22 per share) will be proposed to the Annual General Meeting of Shareholders on 17 May 2023.
- Cost guidance for 2023:
In 2023, Euronext expects its underlying expenses excluding D&A to be around €630 million, compared to the annualised second semester of 2022 underlying expenses excluding D&A of around €620 million. The slight increase in costs only results from costs related to non-volume related revenue growth initiatives. Savings and synergies entirely compensate inflation and business development costs.
- Status update on synergies in relation to the Borsa Italiana Group acquisition:
- €34.1 million of cumulated run-rate annual synergies were achieved at the end of Q4 2022, thanks to restructuring efforts and the migration of the Core Data Centre. €9.7 million run-rate annual synergies were delivered in Q4 2022.
- €44.2 million of cumulated implementation costs incurred at the end of Q4 2022, of which €6.3 million during Q4 2022.
- Next steps in the deployment of the ‘Growth for Impact 2024’ strategic plan:
- Euronext upgrades its 2024 annual run-rate pre-tax synergies related to the integration of the Borsa Italiana Group by €15 millon to €115 million. Implementation costs remain unchanged.
- Euronext confirmed the migration of Borsa Italiana cash markets onto Optiq® in March 2023, forming the first phase of the migration, and of Borsa Italiana other markets in Q4 2023 allowing for termination of the third-party provider trading platform contract.
- Euronext confirmed the phases in the expansion of Euronext Clearing with the expected launch of the equity clearing offering by the end of 2023 and of derivative clearing by Q3 2024.
- These strategic projects are expected to reach around €70 million of cumulated run-rate synergies by the end of 2023, out of the €115 million targeted.
- In 2023, Euronext expects to maintain for cash trading an average market share greater or equal to 63%, and revenue capture around 0.52bps following the migration of Borsa Italiana cash markets to Optiq®, considering current market conditions and orders size.
- Key achievement in the deployment of the ‘Fit for 1.5°’ ESG strategy in 2022:
- Euronext’s upgraded SBTi-aligned climate targets were validated by the Science-Based Targets initiative:
- By 2030, Euronext will reduce its Scope 1 and Scope 2 market-based greenhouse gas emissions by 73.5% compared to 2020;
- By 2030, Euronext will reduce its Scope 3 business travel emissions by at least 46.2% compared to 2019;
- By 2027, Euronext suppliers, representing 72% of Euronext’s greenhouse gas emissions derived from purchased goods and services, must set targets on their Scope 1 and Scope 2 emissions.
- The Group’s efforts to enhance diversity were recognised through the inclusion of Euronext into the Euronext Equileap Eurozone 100 and the Euronext Equileap Gender Equality France 40 indices.
- Euronext’s upgraded SBTi-aligned climate targets were validated by the Science-Based Targets initiative:
Stéphane Boujnah, Chief Executive Officer and Chairman of the Managing Board of Euronext, said:
“In 2022, Euronext reached record revenue and income above €1.4 billion notably resulting from the strong performance of our non-volume related activities, together with efficient management of revenue capture and of cash trading market share. Thanks to our trademark cost discipline, we beat our 2022 revised costs guidance. We achieved an adjusted EBITDA of €861.6 million that translated into an adjusted EPS of €5.21. We will propose a total dividend of €236.6 million at our next annual general meeting to be held in May 2023, representing 50% of our reported net income, excluding NTI loss impact.
This year has been crucial in laying the foundations for the future growth of the Group. We have successfully completed the first major milestone of our ‘Growth for Impact 2024’ strategic plan with the migration of our Core Data Centre from the UK to Italy. At the end of 2022, we have achieved €34.1 million of cumulated run-rate annual synergies related to the acquisition of the Borsa Italiana Group. This fruitful year paves the way for the next steps to be delivered in 2023. The largest single liquidity pool in Europe, operated by Euronext will significantly change dimension with the migration of Italian cash markets to Euronext’s state-of-the-art proprietary trading platform Optiq®, which will benefit local and global trading members.
Euronext Clearing will become the Euronext equity clearing house of choice by the end of 2023, and the CCP for derivatives clearing in Q3 2024. These are the critical bricks to complete our presence across the integrated value chain, allowing us to innovate and shape capital markets in line with evolving client needs, and making Euronext even stronger to deliver future growth.
In an inflationary environment, we will contain our costs to a slight increase in 2023, at €630 million, demonstrating Euronext’s ability to maintain its cost discipline while investing to generate revenue expansion of our non-volume related activities. We expect to deliver by the end of 2023 around €70 million of the synergies targeted as part of our ‘Growth for Impact 2024’ strategic plan. Our good progress on integration led us to upgrade the total amount of targeted run-rate EBITDA synergies by the end of 2024 from €100 million to €115 million. This further demonstrates Euronext’s successful track record in integrating acquired companies.
Our strong performance, combined with the successful ongoing delivery of the planned synergies, is supporting our deleveraging trajectory with a net debt to EBITDA ratio at 2.6x, well below 3.2x at the time of closing of the Borsa Italiana Group acquisition. This leaves the Group with flexibility to further deploy capital in value generating opportunities that might arise.
Lastly, we are happy to see that our ‘Fit for 1.5°’ ESG strategy is bearing fruit, as our upgraded emission reduction targets have been validated by the Science-Based Targets initiative. We are pleased to see Euronext being included in both the Equileap Eurozone 100 and the Equileap Gender Equality France 40 indices, demonstrating the progress we are making in striving towards more equality.”
[1] Underlying revenue excludes €49.0 million non-underlying, one-off loss (€35 million post tax) related to the partial disposal of the Euronext Clearing portfolio. Please refer to the section on net treasury income and https://www.euronext.com/en/investor-relations/financial-calendar/q2-2022-results for more details.
[2] The variances on pro forma basis assume that the acquisition of the Borsa Italiana Group took place on 1 January 2021 and therefore include the Borsa Italiana Group financial performance for the entire comparative period. The Borsa Italiana Group financials were consolidated from 29 April 2021.
[3] Definition in Appendix – adjusted for non-underlying operating expenses excluding D&A and non-underlying revenue and income.
[4] Definition and details of adjustments in Appendix.
[5] Like-for-like revenue at constant currencies for 2021 and 2022 excludes Euronext Funds360 and the activities acquired from Spafid by Euronext Securities, as well as related costs.
