Euronext - 2019 Universal Registration Document

Operating and financial review 7 Liquidity and Capital Resources

In addition to the insurance program, risk management and business continuity plan policy and procedures are implemented in a complementary manner. Euronext believes that its existing insurance coverage, including the amounts of coverage and the conditions, provides reasonable protection, taking into account the costs for the insurance coverage and the potential risks to business operations.

n property damage & business interruption: this policy provides first party coverage for losses to Euronext’s property or business interruption. The coverage includes tenant’s liability and liability to third parties; n terrorism; and n commercial general liability: this policy provides coverage for negligent acts and/or omissions resulting in bodily injury, property damage, consequential losses and pure financial losses to third parties, their reputation, or their property as a result of using Euronext products and services.

7.5 Liquidity and Capital Resources

7.5.1 LIQUIDITY Euronext’s financial policy seeks to finance the growth of the business, remunerate shareholders and ensure financial flexibility, while maintaining strong creditworthiness and liquidity. Euronext primary sources of liquidity are cash flows from operating activities, current assets and existing bank facilities. Euronext’s principal liquidity requirements are for working capital, capital expenditures and general corporate use. Euronext business is highly dependent upon the levels of activity in its exchanges, and in particular upon the volume of financial instruments traded, the number of shares outstanding of listed issuers, the number of new listings, the number of traders in the market and similar factors. Euronext has no direct control over these activities, which have historically resulted in volatility. While Euronext activities are not subject to significant seasonal trends, cash flows vary from month to month due to Euronext billing

and collection efforts (most notably the annual billings for listed companies during the first quarter). Euronext business has historically generated significant cash flow from operating activities to meet its cash requirements as well as to distribute dividends to its shareholders. Euronext expects future cash flow from operating activities to be sufficient to fund its capital expenditures, distribute dividends as well as repay its debts as they become due. In addition, Euronext has access to a €400 million revolving credit facility (see section 5.1.10 “Facilities Agreement”). More information on Euronext’s cash flows is provided in section 5.1.9 “Cash Flow” Because of its strict financial policy of maintaining strong creditworthiness and liquidity, and its significant operating cash flow generation capacities, Euronext N.V. considers its financial position as at 31 December 2019 as solid, both from a solvency and a liquidity perspective.

The financial resources ultimo 2019 can be summarised as follows:

Financial resources

In thousands of euros

Cash & cash equivalent

369,822

Revolving credit facility

400,000

TOTAL FINANCIAL RESOURCES

769,822

7.5.2

CONSOLIDATED REGULATORY CAPITAL REQUIREMENTS

Euronext N.V. is subject to minimum regulatory capital requirements defined by the minister of Finance and the AFM, under which Euronext is required: n to ensure that its shareholders equity, liquidity and solvency satisfy what is required with a view to the interests which the Dutch Act on Financial Supervision (Wet op het financieel toezicht– Wft) aims to protect; n Euronext shall have a minimum shareholders equity on a consolidated basis of at least Euro 250 million;

Euronext N.V. is subject to regulatory capital requirements. These requirements were first set out in the Exchange License that was issued by the Dutch minister of Finance in June 2014. Following discussion with the Dutch minister of Finance in 2015 and 2016 a new exchange license was granted on 23 May 2016, including new capital requirements for both Euronext consolidated and Euronext Amsterdam N.V. As from 23 May 2016 the following capital requirements apply to Euronext.

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2019 UNIVERSAL REGISTRATION DOCUMENT