Euronext - 2019 Universal Registration Document

Financial Statements

Consolidated Statement of Changes in Equity

decrease to 26.5% respectively 25%. The surcharge of 3.3% remains applicable. For the year 2020, the Belgian corporate income tax rate has been decreased from 29.58% to 25% in 2019. The deferred tax assets and liabilities have been recognised at prevailing rates in the various countries.

For the year 2020, the Netherlands have withdrawn the announced rate decrease and maintained the corporate income tax rate at 25%. For the year 2021, the corporate income tax rate in the Netherlands will decrease to 21.7% instead of the rate of 20.5% announced in 2018. For the year 2020, France has decreased the corporate income tax rate to 31% for turnover in excess of €250 million and as from the years 2021 and 2022, the corporate income tax rate will further

2019 (497)

2018 8,957 (2,110)

In thousands of euros

Balance at beginning of the year Recognised in income statement

6,219

(61,208)

(1,480)

Reclassifications and other movements (a)

Exchange differences and other

139

(268)

Charge related to other comprehensive income

(2,382)

(5,596)

(497)

BALANCE AT END OF THE YEAR

(57,729)

(a) In 2019, the line “Reclassifications and other movements” was impacted by the acquisition of Oslo Børs VPS for €57.7 million.

As per 31 December 2019 and 2018, no losses were unrecognised by the Group that can be carried forward against future taxable income. The majority of the net deferred tax asset is expected to be recovered or settled after more than twelve months.

NOTE 20 FINANCIAL ASSETS AT FAIR VALUE THROUGH OTHER COMPREHENSIVE INCOME

As at 31 December 2019

As at 31 December 2018

In thousands of euros

Euroclear plc.

140,401

133,843 54,508 31,684

Sicovam Holding S.A.

57,061

Oslo Børs VPS Holding ASA

- -

Algomi Ltd.

-

Other

359

65

TOTAL

197,821

220,100

In 2018, the Group observed two transactions implying a valuation of Euroclear of €5.7 billion. The Group considered the two observable transactions 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 for the limited number of transactions. This resulted in a total valuation of Euroclear of €3.8 billion, and to an increase in fair value of Euronext’s direct- and indirect investments of €45.0 million in 2018. This revaluation was recorded in Other Comprehensive Income. In 2019, the Group considered the two transactions observed in 2018, which implied a valuation of Euroclear of €5.7 billion for the determination of the fair value in addition to its primary valuation technique. The Group applied a weighted approach taking into account an illiquidity discount accounting for the limited number of transactions. This resulted in a total valuation of Euroclear of €3.9 billion, and to an increase in fair value of Euronext’s direct- and indirect investments of €9.1 million in 2019. This revaluation was recorded in Other Comprehensive Income.

The Group’s financial assets at fair value through other comprehensive income primarily include long-term investments in unlisted equity securities, which the Group has irrevocably elected at initial recognition to recognise in this category. The classification of the measurement within the fair value hierarchy is presented in Note 35. Euroclear N.V./S.A. and Sicovam Holding S.A. As of 31 December 2019, the Group holds a 3.53% ownership interest in Euroclear N.V./S.A. (31 December 2018: 3.53%), an unlisted company involved in the settlement of securities transaction and related banking services. The Group also holds a 9.60% ownership interest in Sicovam Holding S.A. (31 December 2018: 9.60%), resulting in an indirect 1.53% interest in Euroclear N.V./S.A. (31 December 2018: 1.53%). The common stock of Sicovam Holding S.A. and Euroclear N.V./S.A. are not listed. The Group established a standardised multi-criteria approach valuation for financial institutions based on the Gordon Growth Model valuation technique as its primary valuation method and the regression valuation technique (P/BV and ROE) and tradingmultiples as control methods.

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2019 UNIVERSAL REGISTRATION DOCUMENT