Euronext - 2019 Universal Registration Document

Operating and financial review

Overview

de-recognition in available-for-sale financial assets with carrying value of €57.6 million, in relation to the 2.31% stake in LCH Group Ltd. leaving no value for this investment as per 31 December 2017. The share swap transaction resulted in a capital gain recognised in results from equity investments of €40.6 million, from the recycling to profit or loss of cumulative historical revaluations that were recognised in Other Comprehensive Income. 7.1.6 GOODWILL Goodwill recorded includes the entire goodwill that arose from the acquisition of the Amsterdam and Brussels stock exchanges in 2000 and the Lisbon stock exchange in 2002. It also includes an allocation of the goodwill that arose from the acquisition of Atos Euronext Market Solutions (“AEMS”), Euronext’s preferred IT service provider, in 2008. In 2017, additional goodwill was recorded in relation to the acquisitions of Company Webcast, iBabs and FastMatch. In 2018, additional goodwill was recorded in relation to the acquisitions of InsiderLog, the Irish Stock Exchange and Commcise. In 2019, additional goodwill was recorded in relation to the acquisitions of Oslo Børs VPS and Finance Web Working SAS. 7.1.7 FINANCIAL AND TRADING POSITION Other than as described below, there has been no significant change in Euronext’s financial or trading position since 1 January 2020. n Acquisition of Nord Pool Group On 5 December 2019, the Group announced it entered into binding agreements to acquire 66% of the share capital and voting rights of the Nord Pool Group, which runs a leading physical power market in Europe, operating from its headquarters in Oslo and offices in Helsinki, Stockholm, Tallinn, Berlin and London. The enterprise value on a debt-free cash-free basis for 100% is NOK850 million (€84 million). The transaction was subject to regulatory and competition approvals and was completed on 15 January 2020. With the acquisition of Nord Pool Group, the second largest power market in Europe, Euronext diversifies its revenue mix by entering the power market, and reinforces its commodity franchise. This transaction also contributes to the Group’s ambition to grow its presence in the Nordic region and further strengthens Oslo as Euronext’s main hub in the Nordics. The Nordic and Baltic Transmission System Operators (TSOs) that formerly owned Nord Pool Group, will retain a 34% stake. n Payment of contingent consideration payable and exercise of call option for remaining shares in InsiderLog AB During the first quarter of 2020, the Group paid the €3.6 million contingent consideration payable to InsiderLog AB, as part of the 80% majority stake that was acquired on 17 January 2018. In addition, the Group exercised its call option for the remaining 20% of the shares in InsiderLog AB for an amount of €5.7 million. Consequently, the Group now has an ownership of 100% in InsiderLog AB.

and Algonext, as these entities will not be generating license fee revenues going forward. Considering this, the Group recorded a downward revaluation of its investment in Algomi to reflect its revised estimated fair value (to zero), which is recognized in Other Comprehensive Income as per 31 December 2018. Further in 2018, it recognized an impairment of its investment in joint venture Algonext bringing its carrying value to zero. Certain assets that were recognized for Algomi exclusivity rights and prepaid expenses for the joint venture have been impaired for which a charge has been recorded in Exceptional items. In 2019, fair value (zero) did not change for this investment. n Oslo Børs VPS Holding ASA (“Oslo Børs VPS”) On 24 December 2018, Euronext announced it had approached the Board of Directors of Oslo Børs VPS Holding ASA (“Oslo Børs VPS”) to seek its support for a €625m cash tender offer for all the outstanding shares of Oslo Børs VPS, the Norwegian Stock Exchange and national CSD operator, headquartered in Oslo. As per 31 December 2018, following share purchases made by the Group at end of 2018, the Group held a 5.1% ownership interest in Oslo Børs VPS amounting to €31.7 million. The Group irrevocably elected to classify the 5.1% investment in Oslo Børs VPS as an equity investment at fair value through other comprehensive income. The Group considered the purchase price of NOK 145 per share to be best proxy for fair value as per 31 December 2018, supported by prices of Oslo Børs VPS shares traded at the end of December 2018 and beginning of 2019. During 2019, the Group made additional share purchases for €22.1 million, increasing its ownership in Oslo Børs VPS to 8.3%, before acquiring the majority stake on 14 June 2019. Immediately before obtaining the majority stake and as part of the total purchase consideration, the equity investment was revaluated to its acquisition-date fair value of €57.4 million (at NOK 158 per share plus interest payments) resulting in a gain of €3.6 million, which was recognised in Other Comprehensive Income. As a consequence of the transaction, the equity investment in Oslo Børs VPS was fully derecognised and its historical revaluation gain, recognised in Other Comprehensive Income, was transferred to retained earnings on the date of acquiring the majority stake. n LCH Group Investment As per 31 December 2016, the Group held an 2.31% ownership in LCH Group Limited (“LCH Group”) (2015: 2.31%). LCH Group is a multi-asset international clearing house managing and mitigating counterparty risks in market transactions. Management determined fair value for its stockholding in LCH Group based on updated information available as of 31 December 2016. The updated information provided Management with sufficient input to record a change in fair value for its investment in LCH Group of €1.7 million in 2016 (2015: €0.0 million) to €19.2 million as per 31 December 2016 (31 December 2015: €17.5 million). In 2017, the Group entered into a share swap transaction of its 2.31% interest in LCH Group for an 11.1% interest in LCH SA, which was finalised on 29 December 2017. The share swap transaction led to a change in fair value of €38.4 million and subsequent

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2019 UNIVERSAL REGISTRATION DOCUMENT