Euronext Q3 results reveal VP Securities drives post trade revenue
09 November 2020 Holland
Image: DOC RABE Media / Adobestock.com
Euronext, the pan-European market infrastructure, achieved a 45 percent year-on-year uptick in its post-trade revenue, worth €44.6 million, driven by the consolidation of VP Securities, the Danish central securities depository, which contributed €10 million revenue, and higher clearing revenue.
Clearing revenue alone contributed €14.9 million, up from €13.3 million in the comparable period in 2019. Meanwhile, trading revenue increased 7.3 percent to €75.9 million with €6.3 million contributed by Nord Pool power trading offsetting lower cash and derivatives trading volumes.
Q3 saw Euronext consolidated revenue increase to €204.8 million, up by 12.7 percent, primarily resulting from the consolidation of Nord Pool and VP Securities.
The two acquisitions also led to non-volume related revenue accounting for 54 percent of total group revenue in Q3, increasing from 52 percent of total group revenue in Q3 2019.
Meanwhile, €3.5 million of exceptional costs were booked for the quarter, primarily in relation with the contemplated acquisition of the Borsa Italiana Group and restructuring costs.
Euronext predicts that Q4 revenue will be impacted by “exceptional costs” related to the contemplated acquisition of the Borsa Italiana Group and by provisions related to the integration of VP Securities.
Euronext confirmed its plans to acquire Borsa Italiana from the London Stock Exchange Group (LSEG) for just over €4.3 billion as part of its long-term strategy of becoming a pan-European market infrastructure powerhouse.
The Milan-based bourse, which is Italy's only exchange, earned €464 million revenue last year and Euronext hopes it will “play a key role in the future operations, strategy and governance” of its expanded group, as its largest revenue contributor.
Stéphane Boujnah, CEO and chairman of the managing board of Euronext, says: “In the third quarter of 2020, Euronext’s business diversification initiatives continued to bolster growth, with the first impact of the consolidation of VP Securities, while the core business showed its resilience and translated into a double-digit growth of revenue at €204.8 million.
“Euronext confirms the cost guidance of mid-single digit growth in 2020 compared to the annualised second half 2019 cost base, as costs related to the Oslo Børs VPS integration and strategic plan projects are expected to ramp up in the last quarter of 2020.”
Clearing revenue alone contributed €14.9 million, up from €13.3 million in the comparable period in 2019. Meanwhile, trading revenue increased 7.3 percent to €75.9 million with €6.3 million contributed by Nord Pool power trading offsetting lower cash and derivatives trading volumes.
Q3 saw Euronext consolidated revenue increase to €204.8 million, up by 12.7 percent, primarily resulting from the consolidation of Nord Pool and VP Securities.
The two acquisitions also led to non-volume related revenue accounting for 54 percent of total group revenue in Q3, increasing from 52 percent of total group revenue in Q3 2019.
Meanwhile, €3.5 million of exceptional costs were booked for the quarter, primarily in relation with the contemplated acquisition of the Borsa Italiana Group and restructuring costs.
Euronext predicts that Q4 revenue will be impacted by “exceptional costs” related to the contemplated acquisition of the Borsa Italiana Group and by provisions related to the integration of VP Securities.
Euronext confirmed its plans to acquire Borsa Italiana from the London Stock Exchange Group (LSEG) for just over €4.3 billion as part of its long-term strategy of becoming a pan-European market infrastructure powerhouse.
The Milan-based bourse, which is Italy's only exchange, earned €464 million revenue last year and Euronext hopes it will “play a key role in the future operations, strategy and governance” of its expanded group, as its largest revenue contributor.
Stéphane Boujnah, CEO and chairman of the managing board of Euronext, says: “In the third quarter of 2020, Euronext’s business diversification initiatives continued to bolster growth, with the first impact of the consolidation of VP Securities, while the core business showed its resilience and translated into a double-digit growth of revenue at €204.8 million.
“Euronext confirms the cost guidance of mid-single digit growth in 2020 compared to the annualised second half 2019 cost base, as costs related to the Oslo Børs VPS integration and strategic plan projects are expected to ramp up in the last quarter of 2020.”
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