EURONEXT PUBLISHES Q2 2018 RESULTS
SOLID PERFORMANCE DRIVEN BY THE CONSOLIDATION OF EURONEXT DUBLIN AND CONTINUED COST DISCIPLINE

Amsterdam, Brussels, Dublin, Lisbon, London and Paris - 3 August 2018 - Today Euronext, the leading pan-European exchange in the Eurozone with 1,300 listed issuers, announces its results for the second quarter of 2018.

Solid performance for the second quarter of 2018

• Increase in revenue to €157.3 million (+14.6%^[1]):
  • Listing revenue of €28.4 million up +20.3%, resulting from the consolidation of Euronext Dublin and improved primary markets, offsetting a moderate activity in secondary markets
  • Cash trading revenue at €53.9 million up +7.1%, thanks to a sustained market share, at 66.1%, efficient yield management, at 0.51bps, and stable volumes (Cash ADV at €8.4bn, down -2.5%)
  • Market data and indices revenue of €29.4 million up +12.9%
  • Growing contribution to the Group's revenue from revenue diversification initiatives with Euronext Dublin contributing €8.7 million, FastMatch €5.6 million and Agility for Growth initiatives €4.0 million
• EBITDA up, at €88.6 million (+11.9%), with a 56.3% margin (-1.4pts)
  • EBITDA margin for core business^[2] and Agility for Growth, excluding clearing, at 60.0%^[3] (up +1.2pts compared to Q2 2017)
  • €18.8 million of cumulated core business gross efficiencies achieved since Q2 2016 thanks to continued cost discipline
  • Group costs up due to recent acquisitions (Euronext Dublin and FastMatch) and transactions costs, while core business costs down
• Growth in EPS (basic) to €0.81 (+4.9%). Adjusted EPS at €0.90^[4] (+13.8%)
  • Net income, share of the Group, at €56.6 million up +5.0%: strong cost discipline and incremental contribution from LCH SA equity stake offsetting higher exceptional costs

First half of 2018 EBITDA up, at €176.7 million (+18.1%) and EBITDA margin at 58.1% (+1.4pts compared to H1 2017)

Successful migration of Euronext cash markets to Optiq®

• Optiq®, the new proprietary trading platform brings a tenfold increase in capacity, cutting-edge performance in terms of latency and optimized hardware footprint. The migration follows the implementation of the Market Data Gateway in July 2017 and the migration of fixed-income instruments to the platform in April 2018

Stéphane Boujnah, Chief Executive Officer and Chairman of the Managing Board of Euronext, said:

"In the second quarter of 2018, Euronext reached a historical milestone with the migration of its cash markets to Optiq®, our new state-of-the art trading platform. Optiq® provides our clients with cutting-edge performance in terms of latency as well as time to market and flexibility while allowing for optimized hardware footprint. Our new proprietary trading platform enhances our agility and independence, strengthens the value proposition of our federal model, and fosters innovation.

The second quarter also saw the first contribution from Euronext Dublin, that diversifies our revenue profile, strengthens our listing franchise and positions Euronext as the world leading listing venue for debt. Our teams are now working on the integration that is progressing as planned.

Thanks to its continued cost discipline, Euronext achieved a 56.3% EBITDA margin at Group level, while delivering on these major projects. Within the scope of our strategic plan, this translates into a 60.0% EBITDA margin for core business and Agility for Growth initiatives, excluding clearing and new perimeter, for the quarter, and a 61.8% EBITDA margin for the first half of 2018"

For the second quarter of 2018, Euronext consolidated revenue increased to €157.3 million, up +14.6%, driven by the consolidation of Euronext Dublin and FastMatch, improved cash and derivatives trading revenue, and incremental revenue from Agility for Growth initiatives. This quarter was marked by the integration of Euronext Dublin, contributing €8.7million to Euronext revenue. Furthermore, a stable trading environment on Euronext markets, combined with improved revenue capture translated into robust growth on trading activities.

Non-volume related revenue^[5] amounted to 44% of total Group revenue in Q2 2018, stable compared to Q2 2017. The operating cost coverage ratio^[6] was 100% in Q2 2018.

Operational expenses excluding Depreciation & Amortisation increased to €68.7 million, up +18.3%, mainly due to the roll-out of Agility for Growth initiatives, the incorporation of FastMatch (from August 2017) and Euronext Dublin  (from Q2 2018), despite a decrease in core business costs.

At the end of Q2 2018, €18.8 million of cumulated cost savings had been achieved since 1 April 2016, up €2.6 million compared to the end of Q1 2018 (€16.2 million).

During Q2 2018, Agility for Growth initiatives generated €4.0 million of revenue, mainly driven by Corporate Services, and €3.9 million of costs.

EBITDA for the quarter was €88.6 million, up +11.9%, representing a margin of 56.3%, down -1.4 points compared to Q2 2017.

EBITDA margin for core business and Agility for Growth, excluding clearing and new perimeter, reached 60.0% in Q2 2018, up +1.2pts compared to Q2 2017.

Excluding the impact of the consolidation of FastMatch and Euronext Dublin ("New Perimeter"), Euronext consolidated revenue would have amounted to €142.9 million in Q2 2018, up +4.1%, with an EBITDA margin of 59.0%, up +1.4pts compared to Q2 2017 (see below).

The following table summarizes the various indicators used above (full table in appendix):

Depreciation and Amortisation increased to €5.6 million in Q2 2018, up +70.1%, impacted by new acquisitions, with PPA^[7] for €1.8 million in Q2 2018.

Operating profit before exceptional items was €83.0 million, a +9.3% increase compared to Q2 2017.

€6.2 million of exceptional costs were booked in Q2 2018 compared to €1.4 million in Q2 2017, resulting primarily from restructuring costs linked to Euronext Dublin, and from restructuring costs within other Euronext locations.

Net financing expenses for Q2 2018 were €1.0 million compared to €0.4 million in Q2 2017.

Results from equity investment amounted to €5.5 million in Q2 2018, resulting from dividends received from Euroclear and from the consolidation as an associate of LCH SA of which Euronext owns a 11.1% stake since 29 December 2017. In Q2 2017, €4.0 million in dividends were received from Euroclear.

Income tax for Q2 2018 was €24.3 million, representing an effective tax rate for the quarter of 29.8% (Q2 2017: €24.0 million and 30.8%).

Share of non-controlling interests mainly relating to FastMatch (90% owned), iBabs (60% owned), InsiderLog (80% owned) and Company Webcast (51% owned) amounted to €0.4 million in Q2 2018.

As a result, the net profit share of the Group for Q2 2018 increased by +5.0%, to €56.6 million. This represents a reported EPS of €0.81 basic and €0.81 fully diluted in Q2 2018, compared to €0.78 basic and €0.77 fully diluted in Q2 2017. The number of shares used for the basic calculation was 69,597,722 and for the fully diluted calculation was 69,966,603.

Adjusted^[8] EPS is up +13.8% in Q2 2018, at €0.90, compared to €0.79 in Q2 2017.

As of 30 June 2018, the Company had cash and cash equivalents of €352.6 million, and €502 million of financial debt. Euronext gross debt / LTM EBITDA ratio amounted to 1.54 at the end of June 2018. In Q2 2018 Euronext generated a net cash flow from operating activities of €26.7 million, compared to €44.2 million in Q2 2017.

• Listing

Listing revenue was €28.4 million in Q2 2018, an increase of 20.3% compared to Q2 2017. This strong increase was driven the integration of Euronext Dublin (+€6.1 million) and incremental revenue from Corporate Services (+€2.7 million), offsetting a softer secondary market activity compared to Q2 2017.

Q2 2018 saw an improvement in primary equity issues activity both quarter-on-quarter and year-on-year, supported by the listings of large capitalizations on Euronext's market, such as Adyen and Unibail-Rodamco-Westfield. During the second quarter of 2018, 10 new listings, including 8 SME deals, were completed, compared to 9 listings in the second quarter of 2017. This translated into €1.1 billion raised in Q2 2018, a decrease from €2.6 billion last year.

In June 2018, Euronext welcomed Cogelec on its market, the first listing from its FamilyShare programme.

Activity on the secondary market remained moderate, with follow-on activity recording €10.6bn of secondary equity issues, compared to €23.9bn in Q2 2017, which was marked by record activity in secondary equity issues.

In total, €216.2 billion in equity and debt were raised on Euronext's markets in Q2 2018, compared to €317.9 billion in Q2 2017.

Corporate Services, an Agility for Growth initiative generated €3.8 million in revenue in Q2 2018, compared to €1.1 million in Q2 2017.

• Trading

Cash trading

Average daily volume for cash trading remained stable at €8.4 billion in Q2 2018, down -2.5% compared to Q2 2017. In this environment of persisting low volatility, cash trading revenue increased by +7.1% in Q2 2018, to a total of €53.9 million, thanks to an average yield over the quarter of 0.51bps, up +5.0% compared to Q2 2017.

Euronext maintained its strong cash trading market share throughout the quarter, averaging 66.1% in Q2 2018, an increase of +1.9pts compared to Q2 2017, reflecting Euronext markets superior liquidity.

The average daily transaction value of ETFs on the electronic order book^[9] was €269 million over Q2 2018, down -7.1% compared to Q2 2017, impacted by the persisting low volatility. The total number of ETFs listed on Euronext was 1,073 at the end of June 2018 (1,043 at the end of Q2 2017).

Derivatives trading

Derivatives trading revenue increased in Q2 2018, to €10.9 million, compared to €10.4 million in Q2 2017. Individual equity derivatives reported a -5.8% decrease on average daily volume to 314,478 contracts, while the average daily volume on equity index derivatives was down -8.4% to 225,261 contracts. June 2017 figures included a total of 5.6 million equity and index option contracts, resulting from the planned non-recurring migration of open interest from TOM to Euronext.

Commodity products recorded increasing average daily volumes in Q2 2018, up +22.8% to 61,836 contracts.

Yield on derivatives averaged 0.29bps in Q2 2018, an increase from 0.27bps in Q2 2017 which was impacted by the migration of open interest from TOM to Euronext.

Spot FX trading

Spot FX trading activity on FastMatch's spot foreign exchange market (of which Euronext owns 90% of the capital since August 2017) reached a record high in Q2 2018, with average daily volume of $21.8 billion, up +6.2% compared to Q2 2017. As a results, spot FX trading generated €5.6 million of revenue in Q2 2018.

• Market data & Indices

Market data & Indices reported strong growth, with revenue up +12.9% to €29.4 million in Q2 2018, as a result of new market data agreements and growing activity of non-listed structured products.

• Post-trade

Clearing

Clearing revenue increased by +10.3%, to €14.6 million in Q2 2018. As a reminder, the new contract for the clearing of financial derivatives products will come into force on 1 January 2019.

Custody, Settlement and other post-trade

Revenue from Interbolsa in Portugal increased by +6.4%, to €5.6 million in Q2 2018, driven by an increase in asset under custody and settlement activity compared to Q2 2017.

• Market solutions & Other revenue

Market solutions & Other revenue increased by +7.4% in Q2 2018, to €9.0 million. This performance resulted from increased activity in SFTI/Colo services as well as increased Optiq® project work including the first commercial releases for international clients.

• Volumes in Q2 2018

For the second quarter of 2018, the average daily transaction value on the Euronext cash order book stood at €8,418 million, down -2.5% compared to the same period last year.
The average daily transaction value of ETFs on the electronic order book^[10] was €269 million over Q2 2018, down -7.1% compared to Q2 2017. The total number of ETFs listed on Euronext was 1,073 at end of June 2018.

For the second quarter of 2018, the overall average daily volume on Euronext derivatives stood at 601,575 contracts (-4.5% compared to the second quarter of 2017) and the open interest was 17,918,034 contracts at the end of June 2018 (-12.2% compared to the end of June 2017).

For the second quarter of 2018, the average daily volume on FastMatch's spot foreign exchange market stood at $21,764 million, up +6.2% compared to the same period last year.

• Managing Board changes

On 28 June 2018, Euronext announced that Deirdre Somers has resigned from her position as CEO of Euronext Dublin. The Supervisory Board of Euronext N.V. has nominated Daryl Byrne as CEO of Euronext Dublin, Head of Debt & Funds Listings and ETFs and member of the Managing Board of Euronext N.V., subject to formal appointment by an Extraordinary Shareholders' Meeting of Euronext N.V. and the usual regulatory non-objections.

• Appointments in FastMatch

Kevin Wolf, US Head of FICC for Euronext and member of the FastMatch Board of Directors since it was acquired by Euronext in August 2017, has been appointed CEO of FastMatch by the Board of Directors of FastMatch, Inc., following the departure of Dmitri Galinov.

Kevin Wolf is also CEO of Euronext Synapse LLC. Prior to joining Euronext, Kevin served as Chief Business and Product Development Officer at Eris Exchange. He began his career at Bank of America Merrill Lynch and Lehman Brothers.

• Euronext introduces Optiq®, the new technology platform powering cash markets

On 25 June 2018, Euronext successfully completed the migration of its cash markets, including equities, structured products, ETFs and fixed income, to Optiq®, its new cutting-edge trading platform. Optiq® is an agile and high-performing platform that gives investors access to trading across all asset classes available on Euronext's pan-European exchanges.

Developed in-house by Euronext teams in close collaboration with clients, Optiq® provides cutting-edge performance in terms of latency as well as time to market and flexibility. With modular architecture and the latest generation of components, the platform facilitates the introduction of new products and functionalities for the benefit of Euronext's clients.

Optiq® has demonstrated an average performance latency of as low as 15 micro-seconds for order roundtrip as well as for market data, and is highly scalable to accommodate unlimited capacity. During its first two weeks in production, the platform has handled more than 14 billion messages and 18.8 million trades. Optiq® incorporates improved surveillance and monitoring services which, in addition to its technological performance, equip Euronext's markets and clients with a highly resilient platform, in particular in times of volatility.

The introduction of Optiq® on cash markets follows the implementation of the Market Data Gateway in July 2017 and the migration of fixed income instruments to the platform in April 2018^[11]. The final step in Optiq®'s deployment will be to migrate Euronext derivatives markets to the new platform next year. Euronext will continue to work closely with its clients to optimise the use of the platform and make the most of Optiq®'s technological advantages for their benefit.

For Euronext, this new milestone allows for optimization of the hardware footprint and brings a tenfold increase in capacity. Optiq® will also power Euronext's new ETF MTF as part of the Agility for Growth strategic plan.

Euronext offers Optiq® to other leading exchanges and venue operators; the Luxembourg Stock Exchange already benefits from Optiq® and other exchanges around the world have begun Optiq® migration projects.

• Euronext appoints Chris Topple as CEO of Euronext London

On 30 July 2018 Euronext announced that the Supervisory Board has approved unanimously the appointment of Chris Topple as CEO of Euronext London, Head of Global Sales and a member of the Managing Board of Euronext N.V., subject to all relevant shareholder and regulatory approval.

Chris Topple, who worked extensively in brokerage and clearing services throughout his career, will oversee sales across all asset classes. He will take up his new role based in London on 15 October 2018. Paul Humphrey, current interim CEO of Euronext London and Head of Global Sales, will remain in his current role as Global Head of FICC. 

Prior joining Euronext, Chris Topple has been co-head of Societe Generale Prime Services, a global multi-asset, multi-instrument prime brokerage proposition, including financing, custody and execution since May 2015. Previously, he was responsible for leading the Prime Brokerage and Clearing Services (PCS) sales teams globally within Societe Generale's Newedge Group. Chris joined Newedge from Lehman Brothers / Nomura in 2012, where he spent five years as Co-Head of Prime Brokerage Sales. Prior to Lehman Brothers, Chris worked for JP Morgan from 1993 to 2005 in a variety of senior roles, including Global Head of Electronic Trading Sales across Fixed Income, European Head of Fixed Income Prime Brokerage Sales and Head of European Clearing Sales. Chris holds a BSc in European Business with Technology Politecnico di Torino from Italy and Brighton Polytechnic.

A conference call and a webcast will be held today at 9.00am CET (Paris time):

Website : www.euronext.com/en/investors

To connect to the conference call, please dial:

• UK Toll Number: +44 3333000804 / UK Toll-Free Number: 08003589473
• FR Toll Number: +33 170750711 / FR Toll-Free Number: 0800946608
• IR Toll Number: +353 14311252 / IR Toll-Free Number: 0800948241
• NL Toll Number: +31 207095189 / NL Toll-Free Number: 08004050000
• BE Toll Number: +32 24035814 / BE Toll-Free Number: 080029913
• US Toll Number: +1 6319131422 / US Toll-Free Number: +18558570686
• PT Toll Number: +351 210609105 / PT Toll-Free Number: 800209235

PIN CODE: 94547649# 

Live Webcast:
A live audio webcast and replay after the call will be available via this link and on Euronext's Investor Relations website.

Investor Relations:
Aurélie Cohen / Clément Kubiak            +33 1 70 48 24 27; ir@euronext.com

Media:
Pauline Bucaille                                      +33 1 70 48 24 41; mediateam@euronext.com
                                                                                                                                                                             

• Q3 2018 results: Monday 12 November 2018

Euronext is the leading pan-European exchange in the Eurozone, covering Belgium, France, Ireland, The Netherlands, Portugal and the UK. With 1,300 listed issuers worth €3.9 trillion in market capitalisation as of end June 2018, Euronext is an unmatched blue chip franchise that has 24 issuers in the Morningstar® Eurozone 50 Index(SM) and a strong diverse domestic and international client base. Euronext operates regulated and transparent equity and derivatives markets and is the largest centre for debt and funds listings in the world. 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. In addition to its main regulated market, Euronext also operates Euronext GrowthTM and Euronext AccessTM, simplifying access to listing for SMEs.
For the latest news, find us on Twitter (twitter.com/euronext) and LinkedIn (linkedin.com/euronext).

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.
© 2018, Euronext N.V. - All rights reserved.

APPENDIX

Non-IFRS financial measures

For comparative purposes, the company provides unaudited non-IFRS measures including:

• Operational expenses excluding depreciation and amortisation
• EBITDA, EBITDA margin.

Non-IFRS measures are defined as follows:
      -          Operational expenses excluding depreciation and amortization as the total of salary and employee benefits, and other operational expenses
-          EBITDA as the operating profit before exceptional items and depreciation and amortisation
-          EBITDA margin as the operating profit before exceptional items and depreciation and amortisation, divided by revenue.

Non-IFRS financial measures are not meant to be considered in isolation or as a substitute for comparable IFRS measures and should be read only in conjunction with the consolidated financial statements.

Adjusted EPS definition

Quarterly summarized P&L

Consolidated income statement

The figures in this document have not been audited or reviewed by our external auditor.

Consolidated comprehensive income statement

The figures in this document have not been audited or reviewed by our external auditor.

Consolidated balance sheet

The figures in this document have not been audited or reviewed by our external auditor.

Consolidated statement of cash flows

The figures in this document have not been audited or reviewed by our external auditor.

Cash markets activity

Derivatives markets activity

Spot FX Trading

*END*