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Euronext’s Q3 beat was driven by the good top-line growth in the non-volume related activities as well as ongoing cost discipline which was helped by the NOK depreciation; this should help Euronext to achieve an underlying cost below its €630m 2023 target.
Companies: Euronext (ENX:EPA)Euronext NV (ENX:PAR)
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Euronext successfully slowed its top-line decline this quarter thanks to milder trading, post-trade and listing decline, while non-volume-related revenue continued to expand. Cost discipline remained rigorous, and 2023 and 2024 integration guidance was maintained. Building on the group’s deleveraging and strong cash generation, management announced a €200m buy-back programme, which should support the valuation, while non-volume-related revenue expands and synergies are implemented.
Euronext realized a weak Q1 with a top-line decline as had been expected due to lower trading revenue on the back of lower volatility vs Q1-22. Non-volume related revenue continued to progress. Costs increased due to inflation and one-offs but remained below the guidance set by the management. The integration process for Borsa Italiana continues, leaving the synergies guidance unchanged.
After initial rumours disseminated in the press, Euronext announced a bid on Allfunds, a fund distribution platform. Although the deal is EPS dilutive and would add considerable leverage, the move is consistent with Euronext’s M&A strategy, much like LSEG seeking vertical integration and revenue diversification outside the traditional exchange business. We believe there could be synergies between Allfunds and Euronext’s business too and we will await for further details on this from Euronext sho
Euronext realized a bland Q4 missing slightly on the consensus due to a decline in trading and post-trade, and a dearth of listing revenue growth. Costs were slightly disappointing too although the FY-22 costs nonetheless beat guidance. The management upgraded its 2024 synergies guidance adding €15m of run-rate synergies related to the newly-added migration of listed derivatives and commodities to Euronext Clearing in Q4-23 in the Borsa Italiana integration roadmap. Aside from this, the 2024 tar
Euronext’s Q3 was affected by the one-off capital loss from the partial disposal of the Euronext Clearing portfolio, lower trading revenue due to a decline in cash equities and higher costs. Cash generation was still good and leverage continued to improve. The integration process of Borsa Italiana was pursued.
Euronext realized a strong Q2 marked by beats on both revenue and costs with volume-related businesses as well as Listing outperforming. The positive surprise on costs was due to the strong cost discipline as well as the synergies delivered by the good progress on the integration of Borsa Italiana. Indeed, the first key step in the process was achieved in early June with the migration of the new group data centre in Italy. The targets in the 2024 strategic plan were maintained.
Euronext realized a strong Q1 with substantial PF revenue growth and a consensus-beating adjusted EBITDA. Euronext continued to show strong cost discipline and good progress on its integration of Borsa Italiana, upgrading its guidance on both costs and integration expenses. Leverage also saw a significant improvement on the back of strong cash flow generation, with a credit rating upgrade possible if the movement is sustained. The financial targets were maintained (LT 3-4% revenue CAGR and 5-6%
Euronext released yesterday its numbers for Q4 21. These were overall better than expected with revenues boosted by market volatility and costs under control. These results were yet more than offset by management’s guidance regarding costs for FY2022 (expected above expectations). We will revise downwards our EPS for 2022 and 2023 and our long-time positive recommendation on Euronext should now be questioned as the company might need some time to take a breath following the many acquisitions in
Euronext released yesterday evening its numbers for Q3 21. These were roughly in line with expectations (and slightly below our forecasts) with a small miss regarding EBITDA (which was still higher yoy despite the integration of Borsa Italiana). We will slightly revise downwards our EPS on Euronext but stay positive on the company. More importantly, Euronext will present a new plan with 2024 financial guidance on 9 November.
On Friday, Euronext released its numbers for H1 21. The numbers were above expectations (and ours) across the board. With the integration of Borsa Italiana, and in contrast with the LSEG’s last March profit warning on Refinitiv, no materail news regarding the Italian exchange was good news. All divisions contributed to the beat. For more numbers in the longer term, we will have to wait until November 2021 and the 2024 strategic plan. We remain very comfortable with our opinion on Euronext.
Euronext released on 10 February its numbers for Q4 20. As always happens, EBITDA was above expectations, driven by higher revenues with a beat across-the-board. This was particularly the case in the post-trade division (with the integration of VP securities). Total expenses were slightly higher, leading to an EBITDA margin at 54.7% vs 52.8% expected. The dividend is in line with Euronext’s pay-out ratio policy at 50%. The next big thing will be the integration of Borsa Italiana in 2021.
Euronext confirmed this morning the acquisition of LSEG’s Italian subsidiary, Borsa Italiana. The final price at €4.3bn is above expectations (in the area of €3.75bn). This comes with a higher EBITDA (at €278m for the last twelve months period ending on 30 June 2020). With the mix of cash/debt and new equity to be raised and the cost synergies mentioned, we expect the deal to be 19% EPS accretive in year 3.
Companies: Euronext NV
Q2 20 figures. These were strong in absolute terms (profit 54% higher YoY) and relative to the consensus (profit +14%). Better revenues and cost control both helped the bottom line. Revenues have benefited from the ongoing high market volatility (at a time when investors are returning to risky assets such as equities). The disclosure of volumes for July will help clarify whether volumes will continue to maintain a high level.
Euronext released this morning its numbers for Q1 20 and confirmed its position as a hedge regarding the current market and economic uncertainties. It has indeed benefited from the high level of trading volumes that has only strengthened its (strong) balance sheet (net debt/EBITDA below 1x with about €450m cash on hands). A limited increase in costs has allowed for high positive jaws during Q1 20 (it remains to be seen whether this will translate into FY2020).
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