Slide 1: Full Year 2016 Results Presentation
FULL YEAR 2016 RESULTS PRESENTATION 15 February 2017
Slide 2: Euronext Presenting Team
EURONEXT PRESENTING TEAM Stephane Boujnah Giorgio Modica CEO & Chairman of Group Chief Financial the Managing Board Officer Lee Hodgkinson Anthony Attia Head of Markets & Global Head of Listing Global Sales 15 February, 2017 2
Slide 3: Agenda
AGENDA I 2016 Business review II 2016 Financial highlights III Update on Agility for Growth IV Appendices: Financial statements 15 February, 2017 3
Slide 4: Executive Summary
EXECUTIVE SUMMARY Despite pressure on volumes, strong financial performance thanks I to cost discipline and efficient yield management Important milestones achieved in the deployment of Agility for II Growth strategic plan Disciplined approach to capital deployment and significant III optionality in
Slide 5: Strong Financial Performance in 2016
STRONG FINANCIAL PERFORMANCE IN 2016 2015 Cash trading 2016 Revenue Pressure on ADV -15.3% 2015 2016 volumes partially Non-vol. Revenue Vol. Non-vol. -4.3% 1) Yield +7.8% Revenue Vol. €212.5m Revenue offset by efficient €306.0m Derivatives trading €219.4mRevenue1) €277.0m 518.5 496.4 yield managemen
Slide 6: Update on Our Strategic Ambitions: Agility for Growth
UPDATE ON OUR STRATEGIC AMBITIONS: AGILITY FOR GROWTH I V CAPTURE OPPORTUNITIES ARISING FROM THE ENVIRONMENT II ENHANCE AGILITY DELIVER VALUE TO III SHAREHOLDERS STRENGTHEN RESILIENCE OF THE CORE BUSINESS IV GROW IN SELECTED SEGMENTS 15 February, 2017 6
Slide 7: Update on Our Strategic Ambitions: Agility for Growth
UPDATE ON OUR STRATEGIC AMBITIONS: AGILITY FOR GROWTH I V Spikes in volumes aroundOPPORTUNITIES macro-events despite lowARISING volatility CAPTURE Launch of MAR and MiFID II compliant services FROM Innovative projects: THE Tredzone, ENVIRONMENT Algomi, Blockchain Increase in shareholder value propos
Slide 8: Disciplined Approach to Capital Deployment
DISCIPLINED APPROACH TO CAPITAL DEPLOYMENT 2016 2017 Euronext to offer user choice clearing model for its cash equity markets Acquisition of a 20% stake for a cash consideration of €13.4m First trade cleared with EuroCCP EuroCCP Closing of the transaction in December 2016 in Q2’2017 FY’2016 net inco
Slide 9: Building Clearing Optionalities
BUILDING CLEARING OPTIONALITIES 2016 Next steps in 2017 EURONEXT IS CREATING OPTIONALITY FOR CLEARING FINANCIAL DERIVATIVES & COMMODITIES, CASH EQUITIES CLEARING CASH EQUITIES CLEARING EXPOSURE TO NEW ASSET CLASSES: CDS & FIXED Irrespective of the INCOME Potential acquisition of LCH.Clearnet SA comp
Slide 10: 2016 Financial Highlights
2016 FINANCIAL HIGHLIGHTS Record level of profitability in spite of low volume environment EBITDA DPS1) MARGIN Achievement of 70% of gross cost reduction €1.42 plan target 57.2% +14.5% Headcount at year-end lower than expected due to faster-than-expected relocation of IT operations from Belfast to P
Slide 11: Resilient Revenue in a Lower Volume Environment
RESILIENT REVENUE IN A LOWER VOLUME ENVIRONMENT Revenue Revenue mix1) In €m In €m -4.3% 2015 Cash trading 2016 4% 4% Derivative trading 518.5 7% 496.4 var % Clearing 7% 34,9 38% 33,6 -3.8% 19% Listing 36% 19,7 21% 19,6 -0.6% Market data & Indices 99,8 105,7 +6% 14% 8% 14% Custody & Settlement 10% 8%
Slide 12: Strong Increase in EBITDA Margin Thanks to Cost Discipline
STRONG INCREASE IN EBITDA MARGIN THANKS TO COST DISCIPLINE Operating Expenses1) & EBITDA Cost efficiency In €m In €m +245bps 70% of Agility for Growth target achieved Fixed operating cost3) coverage ratio 22.0 -9.4% 91% 103% 54.7% 57.2% 234,7 219.4 234.7 15.6 70% 212.5 212,5 212.5 var % 4,2 Q4'16 Fi
Slide 13: Strong Cash Flow Generation and Liquidity Position
STRONG CASH FLOW GENERATION AND LIQUIDITY POSITION EBITDA / operating cash flow conversion rate Balance sheet (€m) In €m In €m Assets Liabilities & Equity 749.9 757.5 749.9 757.5 283,8 283,9 23% 16% 163,2 172,6 12% 64% 17% 447,2 548,0 321,4 321,2 49% 181,1 140,0 EBITDA 108,2 72% 106,7 89,2 60% 15,8
Slide 14: Update on Agility for Growth
UPDATE ON AGILITY FOR GROWTH
Slide 15: Capture Opportunities Arising from the Environment
I V II III IV CAPTURE OPPORTUNITIES ARISING FROM THE ENVIRONMENT 2016 Achievements Next steps in 2017 Long volatility down trend with spikes in volumes around Brexit and US elections Number of volatility spikes expected related to several national elections and Brexit developments Strong increase in
Slide 16: Enhance Agility
I V II III IV ENHANCE AGILITY 2016 Achievements Next steps in 2017 Completion of French restructuring plan 70% of gross cost reduction programme already Closing of Belfast centre to be effective at the end of Q1’2017 completed. Relocation of Belfast IT team in Porto nearly achieved Infrastructure op
Slide 17: Strengthen Resilience of the Core Business
I V II III IV STRENGTHEN RESILIENCE OF THE CORE BUSINESS LONG VOLATILITY DOWN-TREND WITH SPIKES IN VOLUMES AND VOLATILITY 2016 2017 Euronext Cash ADV and volatility Eurozone upturn set to continue Euronext Cash ADV (€m.) Euro Stoxx 50 Volatility 10 000 35 15 March - Netherlands General Elections Eur
Slide 18: Strengthen Resilience of the Core Business: Listing
I V II III IV STRENGTHEN RESILIENCE OF THE CORE BUSINESS LISTING 2016 Next steps in 2017 Listing Fees Money raised Improving market conditions, In €m -2.6% In €bn first deals will be key # of 70.5 68.7 52 28 Pipeline building up – 8 deals listings 5,5 4,9 expected in Q1’2017 vs 1 in 3.9 6.2 Q1’2016
Slide 19: Strengthen Resilience of the Core Business: Cash Trading
I V II III IV STRENGTHEN RESILIENCE OF THE CORE BUSINESS CASH TRADING 2016 Next steps in 2017 Market quality Average daily turnover 2016/2015 (€m) Further strengthen resilience in Blue Chips Presence EBBO with EBBO Relative Displayed -15.3% 8,282 -15.5% -9.7% -40.9% -21.7% the core Cash Trading busi
Slide 20: Strengthen Resilience of the Core Business: Derivatives Trading
I V II III IV STRENGTHEN RESILIENCE OF THE CORE BUSINESS DERIVATIVES TRADING 2016 Next steps in 2017 Euronext – number of contracts traded (lots in m) Average daily volume 2016/2015 (‘000) Launch of an “all-you-can-eat” Index Equity Commodities incentive programme on both 3,2 3,9 -7.2% -5.5% -6.0% -
Slide 21: Non-Transactional Businesses
I V II III IV STRENGTHEN RESILIENCE OF THE CORE BUSINESS NON-TRANSACTIONAL BUSINESSES 2016 Next steps in 2017 In €m Comply with MiFID II data 144 Market data revenue up +6.0%. Increases due to higher Market data and 137 150,0 non-display revenue and initiatives aimed at improving disaggregation requ
Slide 22: Growth Initiatives: Adding Value to Investors (1/2)
I V II III IV GROWTH INITIATIVES: ADDING VALUE TO INVESTORS (1/2) 2016 Next steps in 2017 Launch date Specifications completed and included in Optiq publication Define services characteristics with One-stop- clients for phase 2 (ETF lending & shop pan Broad support from more than 40 key players in t
Slide 23: Growth Initiatives: Adding Value to Investors (2/2)
I V II III IV GROWTH INITIATIVES: ADDING VALUE TO INVESTORS (2/2) DEVELOPMENT OF POST-TRADE SOLUTIONS 2016 Next steps in 2017 Launch date Finalize market trials with Design and implementation of the new all to all asset financing platform customers Finalize user agreements consisting of: Finalize ba
Slide 24: Growth Initiatives: Adding Value to Issuers
I V II III IV GROWTH INITIATIVES: ADDING VALUE TO ISSUERS 2016 Next steps in 2017 Launch date Further assessment of European distribution of Tech SMEs in Europe confirmed Sales rep. starting on 1 Feb. in Frankfurt, initial assessment in terms of countries (Germany, Switzerland, Italy & Spain) Munich
Slide 25: Deliver Value to Our Shareholders
I V II III IV DELIVER VALUE TO OUR SHAREHOLDERS 20151) 20161) 2019 Ambitions1) +2% CAGR 2015-19E Core €466.6m €447.6m +€39m business +4% CAGR 2016-19E Revenue Selected growth €0.8m +€70m initiatives +5% CAGR 2015-19E Total €466.6m €448.4m €575m +9% CAGR 2016-19E -3% CAGR 2015-19E Costs €206.9m €184.
Slide 26: Appendices
APPENDICES
Slide 27: Income Statement
INCOME STATEMENT Income Statement (unaudited) in €m FY’16 FY’15 var % Revenues Third party revenue and other income 496.4 518.5 -4% Listing 68.7 70.5 -3% Trading revenue, of which Cash Trading 180.7 197.2 -8% Derivatives Trading 40.1 44.5 -10% Market Data & indices 105.7 99.8 6% Post-trade, of which
Slide 28: Balance Sheet
BALANCE SHEET Summary Balance Sheet (unaudited) in €m 2016 2015 Non-current assets Property, plant and equipment 27.5 28.8 Goodwill and other intangible assets 321.2 321.4 Deferred income tax assets 5.0 12.7 Investments in associates and JV 16.0 0.0 Equity investments 117.1 114.3 Other receivables 7
Slide 29: Cash Flow & Liquidity
CASH FLOW & LIQUIDITY Cash flow statement (unaudited) Liquidity (€m) FY'16 FY'15 (€m) FY’16 FY'15 Net cash provided by/(used in) operating activities 181.1 140.0 Net cash provided by/(used in) investing activities (29.6) (5.3) Cash beginning of period 158.6 241.6 Debt repayment (40.0) (140.0) o/w ca
Slide 30: Disclaimer
DISCLAIMER This presentation is for information purposes only and is not a recommendation to engage in investment activities. The information and materials contained in this presentation are provided ‘as is’ and Euronext does not warrant as to the accuracy, adequacy or completeness of the informatio