Euronext - 2019 Universal Registration Document

Operating and financial review

Overview

n Acquisition of FastMatch Inc. On 14 August 2017, the Group acquired a 90% majority stake in FastMatch Inc., a US-based Electronic Communication Network in the spot Foreign Exchange market. The acquisition includes an initial cash payment of $153 million (on a cash-free and debt-free basis), a contingent earn-out payment for an additional $10 million and customary minority rights for the management of FastMatch Inc. that will remain committed to the development of the business and stay invested with a 10% interest. More details on the 2019 acquisitions can be found in Note 5 “Business Combinations” of the Consolidated Financial Statements (section 8). On 22 July 2016, Euronext acquired a 34.04% stake in Tredzone S.A.S., a highly specialised low latency software developer, as part of its innovation strategy. Euronext has assessed the high level of performance of the Tredzone technology by using it to develop the next generation trading platform “Optiq® ” . This agreement will enable Tredzone to strengthen its leading edge technology and will allow Euronext to benefit from future developments made by Tredzone. Software development tools from Tredzone allow Euronext to fully leverage multi-core processing, hence enabling substantial savings in use of hardware, simplifying and securing IT infrastructure. Designed by a team of experts from financial markets software design, these tools are specifically adapted to handle large amounts of data in real time within a complex environment. The €1.4 million investment was recognised as an investment in associate as at 31 December 2016. As per 31 December 2017 the investment amounted to €1.1 million. As per 31 December 2018, following a review for impairment of its associates and joint ventures, the Group recognised an impairment of its interest in Tredzone S.A.S., bringing its value down to zero. There were no changes to this value as per 31 December 2019. n European Central Counterparty N.V. (“EuroCCP”) In August 2016, Euronext announced it had signed a definitive agreement to acquire a 20% stake in European Central Counterparty N.V. (“EuroCCP”), the leading CCP for pan-European equity markets, providing clearing and settlement services. This deal will enable Euronext to offer user choice in clearing for the equity markets within the Eurozone, through the implementation of a preferred CCP model followed by a fully interoperable service, which will be open to other CCPs in due course. Following regulatory approvals, the completion of the transaction was finalised on 15 December 2016 for an amount of €13.4 million. The investment in EuroCCP has been recognised as an investment in associate as at 31 December 2016. As per 31 December 2017 the investment amounted to €14.1 million. As per 31 December 2018 the investment amounted to €14.4 million. On 10 December 2019, Euronext announced that it entered into a binding agreement to sell its 20% minority stake in EuroCCP to CBOE Global Markets, alongside the other current EuroCCP shareholders. The transaction is expected to close in the first half of 2020, subject to receipt of required regulatory clearances and the arrangement of a supporting liquidity facility at the EuroCCP Investments in Associates and Joint Ventures n Tredzone

clearing entity level. The Group expects to receive net proceeds of approximately €8.8 million from the sale of its minority stake. As a result of this agreement, the Group impaired the value of its investment by approximately €6.0 million, and classified the investment as an asset held for sale as per 31 December 2019. n Algonext Ltd In November 2016, Euronext announced a 10 year partnership with fixed income technology provider Algomi to create a long-term joint venture. This joint venture, capitalised by Euronext, would have deployed Algomi’s technology to a new multilateral trading facility (“MTF”) “Synapse”. Dealers would have been able to access the trading interface either directly through their existing Algomi technology or through their stand-alone systems. The platform would have used algorithmic smart matching processes to create an auction between dealers to improve liquidity and search for best execution. Algonext was incorporated on 16 December 2016 and, based on shared ownership, Euronext has an interest of 50%. The investment in Algonext amounting to €1.2 million has been recognised as an investment in joint ventures as at 31 December 2016. As per 31 December 2018, following a review for impairment of its associates and joint ventures, the Group recognised an impairment of its interest in Algonext Ltd., bringing its value down to zero (see also “Algomi investment” within the “Equity investments” section). There were no changes to this value as per On 10 July 2017 the Group, together with six other leading financial institutions, incorporated LiquidShare S.A., a fintech joint venture with the objective to improve SME’s access to capital markets and improving the transparency and security of post-trading operations using blockchain technology. The Group shares joint control with the other founders and has an interest of 16.23% in LiquidShare (2018 and 2017: 13.57%). In 2019, the Group made a capital contribution of €1.2 million in LiquidShare S.A. The investment amounted to €1.9 million as per 31 December 2019 (31 December, 2018 and 2017: €0.9 million). n LCH S.A. In the second half of 2017, the Group announced its intentions to swap its 2.31% stake in LCH Group for a 11.1% stake in LCH SA, subject to regulatory approvals and other customary conditions. The transaction was finalised on 29 December 2017 and will strengthen the long-standing relationship between Euronext and LCH SA. Euronext will remain on the Board of LCH SA following completion of the share swap. Euronext will also nominate one representative to LCH SA Audit Committee and will continue to be represented at LCH SA Risk Committee. A new Consultative Committee dedicated to Euronext derivatives business will be created. The parties have agreed that Euronext will have certain minority protection rights connected with its new shareholding in LCH SA. As the Group concluded it has significant influence, the 11.1% stake in LCH SA amounting to €58.0 million was recognised in investments in associates and joint ventures as per 31 December 2017. As per 31 December 2019 the investment amounted to €60.0 million (31 December 2018: €57.4 million). 31 December 2019. n LiquidShare S.A.

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2019 UNIVERSAL REGISTRATION DOCUMENT