Euronext - 2020 Universal Registration Document

CONTENTSII
INTEGRATED PRESENTATION2
A MESSAGE FROM OUR CEO AND CHAIRMAN OF THE MANAGING BOARD2
A STRONG PERFORMANCE IN 20203
EURONEXT ‘S GOVERNANCE5
EURONEXT’S 2022 STRATEGIC AMBITIONS6
BUSINESS MODEL8
LET’S GROW TOGETHER 2022 WILL DELIVER ON SUSTAINABLE DEVELOPMENT GOALS IN 5 IMPACT AREAS10
ACCELERATING THE TRANSITION TOWARDS SUSTAINABLE FINANCE11
1. PRESENTATION OF THE GROUP13
1.1 Company Profile14
1.1.1 HISTORY15
1.1.2 AMBITION15
1.1.3 BUSINESS ENVIRONMENT16
1.2 Strategy: “Let’s Grow Together 2022” Strategic Plan17
1.2.1 “LET’S GROW TOGETHER 2022”, MAPPING PATH TO BUILD THE LEADING PAN-EUROPEAN MARKET INFRASTRUCTURE17
1.2.2 UPDATE IN 202018
1.2.3 STRATEGIC TARGETS AND PROSPECTS IN 202121
1.3 Description of the Business22
1.3.1 BUSINESS OVERVIEW22
1.3.2 STRENGTHS23
1.3.3 LISTING25
1.3.4 CASH, DERIVATIVES AND SPOT FX MARKETS29
1.3.5 POWER TRADING34
1.3.6 ADVANCED DATA SERVICES35
1.3.7 INVESTOR SERVICES37
1.3.8 POST TRADE37
1.3.9 EURONEXT TECHNOLOGY SOLUTIONS & OTHER39
1.4 Regulation40
1.4.1 OVERVIEW40
1.4.2 EUROPEAN REGULATION40
1.4.3 OWNERSHIP LIMITATIONS AND ADDITIONAL NOTIFICATION REQUIREMENTS43
2. RISK MANAGEMENT & CONTROL STRUCTURE47
2.1 Risk Factors48
COVID-19 RISK48
STRATEGIC RISKS49
OPERATIONAL RISKS51
COMPLIANCE RISKS53
FINANCIAL RISKS54
2.2 Mitigation Measures54
COVID-1954
STRATEGIC TRANSFORMATION RISK55
REGULATORY EVOLUTION AND ENHANCED REGULATORY SCRUTINY RISK55
GLOBAL AND REGIONAL ECONOMY55
COMPETITION ON CAPITAL MARKETS RISK55
CYBERSECURITY RISK55
TECHNOLOGY RISK55
CHANGE MANAGEMENT AND INTEGRATION MANAGEMENT RISK55
CLEARING AND SETTLEMENT RISK55
EMPLOYEE RISK56
CAPITAL REQUIREMENTS RISK56
REGULATORY AND LIABILITIES RISK56
OWNERSHIP AND INTELLECTUAL PROPERTY RISK56
MARKET RISK56
LIQUIDITY RISK56
CREDIT RISK56
2.3 Control Structure57
RISK APPROACH AND INTERNAL CONTROL OBJECTIVES57
ERM FRAMEWORK57
ERM FRAMEWORK GOVERNANCE57
2.3.1 SECOND LINE OF DEFENCE58
2.3.2 INTERNAL AUDIT – THIRD LINE OF DEFENSE61
3. EURONEXT, A SUSTAINABLE EXCHANGE63
3.1 Value Creation by Euronext64
3.2 ESG Governance67
3.3 Transparency and Reporting67
3.4 Euronext’s Five ESG Impact Areas and the Sustainable Development Goals69
3.4.1 OUR MARKETS69
3.4.2 OUR PARTNERS71
3.4.3 OUR PEOPLE73
3.4.4 OUR SOCIETY74
3.4.5 OUR ENVIRONMENT77
3.5 ESG Risks Considerations78
3.6 ESG Dashboard 202079
3.6.1 OUR MARKETS79
3.6.2 OUR PARTNERS91
3.6.3 OUR PEOPLE93
3.6.4 OUR SOCIETY100
3.6.5 OUR ENVIRONMENT103
3.7 Summary ESG KPI108
GLOSSARY AND REPORTING CRITERIA109
4. CORPORATE GOVERNANCE111
4.1 Dutch Corporate Governance Code, “Comply or Explain”112
4.2 Management Structure113
4.2.1 GENERAL INFORMATION113
4.2.2 SUPERVISORY BOARD114
4.2.3 MANAGING BOARD118
4.3 Report of the Supervisory Board126
4.3.1 MEETINGS126
4.3.2 SUPERVISORY BOARD ATTENDANCE RECORD127
4.3.3 SUPERVISORY BOARD ACTIVITIES128
4.3.4 BOARD EVALUATION128
4.3.5 REPORT AUDIT COMMITTEE128
4.3.6 REPORT REMUNERATION COMMITTEE129
4.3.7 REPORT NOMINATION AND GOVERNANCE COMMITTEE129
4.3.8 FINANCIAL STATEMENTS129
4.4 Remuneration Report of the Remuneration Committee129
4.4.1 2020 REPORT129
4.4.2 REMUNERATION PRINCIPLES AND CHANGES TO THE POLICY131
4.4.3 REMUNERATION COMPONENTS134
4.4.4 REMUNERATION OF MANAGING BOARD MEMBERS FOR 2020 AND PREVIOUS YEARS140
4.4.5 REMUNERATION OF SUPERVISORY BOARD MEMBERS143
5. SELECTED HISTORICAL CONSOLIDATED FINANCIAL INFORMATION, OTHER FINANCIAL INFORMATION AND UNAUDITED PRO FORMA COMBINED FINANCIAL INFORMATION145
5.1 Selected Historical Consolidated Financial Information147
SELECTED CONSOLIDATED INCOME STATEMENT DATA147
SELECTED CONSOLIDATED BALANCE SHEET DATA148
SELECTED STATEMENT OF CASH FLOWS DATA149
5.2 Other Financial Information149
RECONCILIATION OF EBITDA, EBITDA MARGIN, EXCEPTIONAL ITEMS, OPERATING PROFIT BEFORE EXCEPTIONAL ITEMS EBITDA TO NET OPERATING CASH FLOW AND NET DEBT TO E BITDA RATIO151
RECONCILIATION OF FREE CASH FLOW AND CAPITAL EXPENDITURES151
RECONCILIATION OF ADJUSTED NET INCOME AND ADJUSTED EPS151
RECONCILIATION OF PRO FORMA EBITDA, PRO FORMA NET DEBT AND PRO FORMA NET DEBT TO PRO FORMA EBITDA LEVERAGE RATIO152
5.3 Unaudited Pro Forma Combined Financial Information152
5.3.1 INTRODUCTION152
5.3.2 BASIS OF PREPARATION153
5.3.3 UNAUDITED PRO FORMA COMBINED BALANCE SHEET AS OF 31 DECEMBER 2020154
5.3.4 UNAUDITED PRO FORMA COMBINED STATEMENT OF PROFIT OR LOSS FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2020156
5.3.5 NOTES TO THE UNAUDITED PRO FORMA FINANCIAL INFORMATION156
5.4 Assurance Report of the Independent Auditor163
6. GENERAL DESCRIPTION OF THE COMPANY AND ITS SHARE CAPITAL167
6.1 Legal Information on the Company168
6.1.1 GENERAL168
6.1.2 CORPORATE OBJECTS168
6.2 Share Capital168
6.2.1 AUTHORISED AND ISSUED SHARE CAPITAL168
6.2.2 ISSUE OF SHARES168
6.2.3 PRE-EMPTION RIGHTS169
6.2.4 ACQUISITION OF SHARES IN EURONEXT’S CAPITAL169
6.2.5 REDUCTION OF SHARE CAPITAL170
6.3 Shareholder Structure170
6.4 Share Classes and Major Shareholders170
6.4.1 REFERENCE SHAREHOLDERS170
6.4.2 MAJOR SHAREHOLDINGS173
6.5 General meeting of Shareholders and Voting Rights175
6.6 Anti-Takeover Provisions176
6.7 Obligations of Shareholders and Members of the Managing Board to Disclose Holdings176
6.8 Short Positions177
6.9 Market Abuse Regime177
6.10 Transparency Directive178
6.11 Dutch Financial Reporting Supervision Act178
6.12 Dividends and Other Distributions178
6.13 2021 Financial Calendar179
7. OPERATING AND FINANCIAL REVIEW181
7.1 Overview182
7.1.1 DEFINITIONS182
7.1.2 ESTABLISHMENT OF EURONEXT AS AN INDEPENDENT, PUBLICLY TRADED COMPANY182
7.1.3 SOURCES OF REVENUES182
7.1.4 COMPONENTS OF EXPENSES185
7.1.5 KEY FACTORS AFFECTING BUSINESSES AND RESULTS OF OPERATIONS185
7.1.6 GOODWILL190
7.1.7 FINANCIAL AND TRADING POSITION190
7.1.8 RESULTS OF OPERATIONS191
7.1.9 BALANCE SHEET199
7.1.10 CASH FLOW200
7.1.11 FACILITIES AGREEMENT AND BONDS201
7.1.12 CONTRACTUAL OBLIGATIONS203
7.1.13 OFF-BALANCE SHEET ARRANGEMENTS203
7.1.14 QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK203
7.1.15 SIGNIFICANT ACCOUNTING POLICIES206
7.1.16 CRITICAL ACCOUNTING ESTIMATES AND JUDGMENTS206
7.2 Material Contracts and Related Party Transactions209
7.2.1 MATERIAL CONTRACTS209
7.2.2 RELATED PARTY TRANSACTIONS209
7.3 Legal Proceedings211
7.3.1 EURONEXT AMSTERDAM PENSION FUND211
7.4 Insurance212
7.5 Liquidity and Capital Resources213
7.5.1 LIQUIDITY213
7.5.2 CONSOLIDATED REGULATORY CAPITAL REQUIREMENTS213
7.6 Tangible Fixed Assets215
7.6.1 PRINCIPAL PROPERTIES215
8. FINANCIAL STATEMENTS217
8.1 Consolidated Statement of Profit or Loss218
8.2 Consolidated Statement of Comprehensive Income219
8.3 Consolidated Balance Sheet220
8.4 Consolidated Statement of Cash Flows221
8.5 Consolidated Statement of Changes in Equity222
8.6 Notes to the Consolidated Financial Statements223
Company Financial Statements for the year ended 31 December 2020286
Notes to the Company Financial Statements288
9. OTHER INFORMATION303
9.1 Profit Appropriation Section304
9.2 Independent auditor’s report304
REPORT ON THE AUDIT OF THE FINANCIAL STATEMENTS 2020 INCLUDED IN THE UNIVERSAL REGISTRATION DOCUMENT304
OUR AUDIT APPROACH305
REPORT ON OTHER INFORMATION INCLUDED IN THE UNIVERSAL REGISTRATION DOCUMENT308
REPORT ON OTHER LEGAL AND REGULATORY REQUIREMENTS309
DESCRIPTION OF RESPONSIBILITIES FOR THE FINANCIAL STATEMENTS309
9.3 Assurance Report of the Independent Auditor310
BASIS FOR OUR CONCLUSION310
REPORTING CRITERIA310
UNASSURED CORRESPONDING INFORMATION310
LIMITATIONS TO THE SCOPE OF OUR ASSURANCE ENGAGEMENT311
RESPONSIBILITIES OF THE MANAGING BOARD AND THE SUPERVISORY BOARD FOR THE SELECTED NON-FINANCIAL KPIS311
OUR RESPONSIBILITIES FOR THE ASSURANCE ENGAGEMENT ON THE SELECTED NON-FINANCIAL KPIS311
GLOSSARY, CONCORDANCE TABLES & ANNEX313
GLOSSARY314
CONCORDANCE TABLES317
Annex to the Universal Registration Document319
CONSOLIDATED STATEMENT OF PROFIT OR LOSS320
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME320
CONSOLIDATED STATEMENT OF FINANCIAL POSITION321
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY322
CONSOLIDATED STATEMENT OF CASH FLOWS323
Notes to the Consolidated Financial Statements324
lndependent auditor’s report363

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