Euronext - 2019 Universal Registration Document

Operating and financial review 7 Overview

n Investment in Tokeny Solutions On 28 June 2019, the Group acquired a 23.5% stake in Tokeny Solutions, a tokenization platform that provides users end-to-end solutions to issue, manage and transfer tokenized securities on public blockchain. The Group recognised the acquired interest as an investment in associate. As per 31 December 2019 the investment amounted to €4.8 million.

In 2018, the Group increased its interest in Euroclear plc from 3.34% to 3.53%, which was due to the acquisition of the Irish Stock Exchange Plc., that holds an 0.19% ownership interest in Euroclear plc. valued at €5.5 million on acquisition. In 2018, as part of the fair value estimation of its investment in Euroclear plc. the Group considered two observable transactions for the determination of the fair value in addition to its primary valuation technique and applied a weighted approach taken into account a illiquidity discount for the limited number of transactions. This ultimately led to an increase in fair value of the Group’s investments in Euroclear plc and Sicovam S.A. of €45.0 million in 2018. This revaluation was recorded in Other Comprehensive Income. As per 31 December 2018, following the above, the fair value of the investment in Euroclear plc. was measured at €133.8 million and the fair value of the investment in Sicovam Holding S.A. was measured at €54.5 million. In 2019, the Group considered the two transactions observed in 2018 for the determination of the fair value in addition to its primary valuation technique and applied a weighted approach taking into account an illiquidity discount accounting for the limited number of transactions. This ultimately led to an increase in fair value of the Group’s investments in Euroclear plc and Sicovam S.A. of €9.1 million in 2019. This revaluation was recorded in Other Comprehensive Income. As per 31 December 2019, following the above, the fair value of the investment in Euroclear plc. was measured at €140.4 million and the fair value of the investment in Sicovam Holding S.A. was measured at €57.1 million. n Algomi Limited Investment (“Algomi”) In November 2016, Euronext announced a 10-year partnership with would have used fixed-income technology provider Algomi Limited (“Algomi”) to create a long-term joint venture “Algonext”. This JV, initially capitalised by Euronext for $2.3 million, would have deployed Algomi’s technology to a new multilateral trading facility (“MTF”), owned and operated by Euronext. Based on shared ownership and governance, Euronext has recognised its 50% shareholding in Algonext as an “Investment in associates and joint ventures” from the date of incorporation. On 2 March 2017, Euronext acquired a 7.59% stake in JV partner Algomi for $10 million. This investment is recognized as an “Financial asset at fair value through OCI” from acquisition date. As part of the purchase agreement, Euronext was granted a warrant, allowing it to purchase 88,384 additional Algomi shares, that was exercised in the second half of 2017. The investment was recognized as an available-for-sale financial asset at fair value for €9.6 million as per 31 December 2017. The management of Algomi decided to change its strategic course of direction in the second half of 2018, by focusing on their “Alpha” product, rather than further maintaining the “Honeycomb/Synchronicity” network. This has resulted in many banks terminating their contracts with Algomi. The Honeycomb/ Synchronicity network is the major source of data to feed the MTF and without this data the MTF is not expected to generate any trade. The Group expects that this change in focus will have an adverse impact on the financial situations on both Algomi

Equity Investments n Euroclear Investment

On 30 April 2014, ICE contributed to the Group a 2.75% ownership interest into Euroclear plc., an unlisted company involved in the settlement of securities transaction and related banking services. The fair value of the investment at that time was €63 million. Due to share buy-backs by Euroclear plc. in 2015 the direct investment in Euroclear plc. increased from 2.75% to 3.26% as per 31 December 2015. The fair value of the investment in Euroclear plc. was measured at €67.1 million as per 31 December 2015. In 2016 this share buy-back program did not continue, however other valuation approaches were applied in a consistent manner to 2015, leading to an adjustment of fair value through Other Comprehensive Income of €0.5 million in 2016, bringing the fair value of the 3.26% direct investment in Euroclear plc. to €67.6 million as per 31 December 2016. Due to share buy-backs by Euroclear plc. in 2017 the direct investment in Euroclear plc. increased from 3.26% to 3.34% as per 31 December 2017. The Group also holds an 1.53% indirect investment in Euroclear plc., through its 9.60% ownership interest in Sicovam Holding S.A. Following the outcome of EU referendum in the UK and elections in the US, euro-zone was facing additional political pressure at the end of 2016. Increased political risk in economies long considered bastions of political stability were expected to affect risk-free rates, potentially reviving the euro crisis and raising the risk of an EU break-up scenario. In the first part of the year, this risk of destabilization in Europe was reduced by the results of elections in the Netherlands, France and Germany. The economic sentiment and outlook significantly improved and funds are flowing back to the euro-zone and translated into a robust share price performance across listed financial institutions within the EU. This changing environment had an impact on the valuation of the Group’s available-for-sale financial assets, especially on investments in financial institutions with a significant EU exposure, such as Euroclear plc. The sentiment in Europe, that had a dampening effect on the value of our direct- and indirect (through Sicovam Holding S.A.) equity investment in Euroclear plc at the end of 2016, positively impacted this value as per 31 December 2017. This ultimately led to an increase in fair value of the Group’s investments in Euroclear plc and Sicovam S.A. in 2017 of €40.2 million. As per 31 December 2017, following the above, the fair value of the investment in Euroclear plc. was measured at €96.2 million and the fair value of the investment in Sicovam Holding S.A. was measured at €41.7 million.

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2019 UNIVERSAL REGISTRATION DOCUMENT