Euronext - 2019 Universal Registration Document

Operating and financial review 7 Overview

2017, an increase in net expense of €1.7 million. This increase reflects mainly the revaluation of earn-outs related to Company Webcast and InsiderLog. In details, in 2018, interest expenses increased following the Bond issued in April 2018 (see Note 29 of the Consolidated Financial Statements), non-current financial liabilities were remeasured by €3.2 million (see Note 35 of the Consolidated Financial Statements) and other net financing income was positively impacted by income from interest rate swaps, as a result of the Group entering into interest rate swap agreements (see Note 23 of the Consolidated Financial Statements).

(see Note 29 of the Consolidated Financial Statements) and other net financing income was positively impacted by income from interest rate swaps, as a result of the Group entering into interest rate swap agreements related to the first issued bond (see Note 23 of the Consolidated Financial). For the year ended 31 December 2018: Euronext’s net financing income/(expense) for the year ended 31 December 2018 was a net expense of €5.3 million, compared to a net expense of €3.6 million for the year ended 31 December

2019

2018 (5,558)

2017 (2,373)

In thousands of euros

Interest expense (effective interest method)

(11,632)

Interest in respect of lease liabilities

(555)

Other finance costs

336

77

(1,180) (3,553)

Finance costs

(11,851)

(5,481) (1,200) (2,000) (3,200)

Contingent liabilities Redemption liabilities

(1,310)

- - -

(11,965) (13,275)

Change in fair value of financial liabilities Interest income (effective interest method) Interest income from interest rate swaps

1,879 4,971

487

314

3,534 (638) (220)

- -

Hedging result

124 198 539

Gain/(loss) on disposal of treasury investments

(5)

Net foreign exchange gain/(loss)

258

(356)

Other net financing income/(expense)

7,711

3,421

(47)

(5,260)

(3,600)

TOTAL

(17,415)

Result from equity investments For the year ended 31 December 2019: In 2019, the €9.1 million of results from equity investments mainly related to the following items: n €7.3 million of dividends received from Euroclear plc and Sicovam Holding S.A.; n €1.8 million of investment in associates resulting from the impairment of EuroCCP stake sold in 2019, offsetby €7.7 million of investments in associates reflecting the 11.1% stake in LCH SA. For the year ended 31 December 2018: In 2018, the €7.6 million of results from equity investments mainly related to the following items: n €6.0 million of dividends received from Euroclear plc and Sicovam Holding S.A.; n €1.6 million of investments in associates.

Income Tax Expense For the year ended 31 December 2019:

Euronext’s income tax expense for the year ended 31 December 2019 was €100.3 million, compared to €94.1 million for the year ended 31 December 2018, an increase of €6.2 million or 6.6%. Euronext’s effective tax rate was 30.8% for the year ended 31 December 2019 compared to 30.2% for the year ended 31 December 2018. The increase of the effective tax rate in 2019 is primarily attributable to: n non-deductible acquisition costs; n the impact of the rate decrease on the deferred tax assets in France and a tax rate increase in the Netherlands impacting the deferred liability; n non-deductible expenses linked to the recognition of earn out liabilities in connection with the buy out of Company Webcast and Insiderlog. For the year ended 31 December 2018: Euronext’s income tax expense for the year ended 31 December 2018 was €94.1million, compared to €68.9million for the year ended 31 December 2017, an increase of €25.2million or 36.6%. Euronext’s effective tax rate was 30.2% for the year ended 31 December 2018 compared to 22.1% for the year ended 31 December 2017. The increase of the effective tax rate in 2018 is primarily attributable to: n the release of a €20.4 million tax provision due to the lapse of the statute of limitations recorded in 2017, while in 2018 €4.0 of tax provisions were release.

Profit before Income Tax For the year ended 31 December 2019:

Euronext profit before income tax for the year ended 31 December 2019 was €325.6 million, compared to €311.7 million for the year ended 31 December 2018, an increase of €13.9 million or +4.4%. For the year ended 31 December 2018: Euronext profit before income tax for the year ended 31 December 2018 was €311.7 million, compared to €311.1 million for the year ended 31 December 2017, an increase of €0.6 million or +0.2%.

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2019 UNIVERSAL REGISTRATION DOCUMENT