Euronext - 2020 Universal Registration Document

Operating and Financial Review 7 Overview

Other Operational Expenses

2020

2019

2018

In thousands of euros

Systems and communications

(38,527) (54,989) (33,067) (6,767) (31,950)

(26,385) (37,070) (29,402) (5,467) (28,219)

(26,208) (47,011) (29,846) (10,430) (28,800)

Professional services Clearing expenses

Accommodation Other expenses

TOTAL

(165,300)

(126,543)

(142,295)

Professional Services decreased by €9.9 million, or 21.1%, to €37.1 million in 2019, compared to €47.0 million in 2018. This decrease is mainly attributable to a decrease in consulting and advisory costs and the impact of IFRS 16 Clearing expenses decreased by €0.4million, or 1.5%, to €29.4million in 2019, compared to €29.8 million in 2018. This decrease is linked to the lower Clearing revenues in 2019. Accommodation decreased by €5.0 million, or 47.6%, to €5.5 million in 2019, compared to €10.4 million in 2018. This decrease is attributable to the impact of IFRS 16. Other Expenses decreased by €0.6 million, or 2.0%, to €28.2 million in 2019 when compared to €28.8 million in 2018. This decrease mainly reflects a decrease in tax expenses, as 2018 was notably impacted by €1.7 million of one-off stamp duty tax relating to the acquisition of Euronext Dublin, and a decrease in other costs, offsetting the consolidation of costs from newly acquired businesses previously mentioned.

For the year ended 31 December 2020: System and Communications increased by €12.1 million, or 46.0%, to €38.5 million in 2020, compared to €26.4 million in 2019. This increase is primarily attributable to the integration of Nord Pool and VP Securities and an increase in license fees. Professional Services increased by €17.9 million, or 48.3%, to €55.0 million in 2020, compared to €37.1 million in 2019. This increase is mainly attributable to the impact from the new acquired subsidiaries in 2020, integration costs related to Oslo Børs VPS and increased costs related to the strategic plan of the Company. Clearing expenses increased by €3.7 million, or 12.5%, to €33.1 million in 2020, compared to €29.4 million in 2019. This increase is linked to the higher Clearing revenues in 2020. Accommodation increased by €1.3 million, or 23.8%, to €6.8 million in 2020, compared to €5.5 million in 2019. This increase is attributable to the impact from newly acquired subsidiaries and one additional half-year impact from Oslo Børs VPS. Other Expenses increased by €3.7 million, or 13.2%, to €31.9 million in 2020 when compared to €28.2 million in 2019. This increase mainly reflects the impact from newly acquired subsidiaries and an increase in expected credit loss allowance provision (see section 8, Note 21). For the year ended 31 December 2019: System and Communications increased by €0.2 million, or 0.7%, to €26.4 million in 2019, compared to €26.2 million in 2018. This increase is attributable to the integration of Oslo Børs VPS and Commcise, offsetting a decrease in licenses fees and the impact of IFRS 16.

Operating Profit Before Exceptional Items For the year ended 31 December 2020:

Operating profit before exceptional items was €462.3 million, a +29.9% increase compared to 2019. On a like-for-like basis at constant currencies, operating profit before exceptional items was up, +20.4%, to €423.7 million. For the year ended 31 December 2019: Euronext operating profit before exceptional items for the year ended 31 December 2019 was €355.7 million, compared to €330.9 million for the year ended 31 December 2018, an increase of €24.9 million.

Exceptional Items

2020 (4,338) (8,828) (1,500)

2019 (5,671) (11,730)

2018 (8,126) (2,088) (4,752) (3,226) (2,000) –

In thousands of euros Restructuring costs Acquisition costs

Claims provisions/Settlements

– –

DB contract termination

– –

Impairment Algomi

(1,341) (2,245)

Termination of sales contract

(172)

Write-off/impairment intangible assets Litigation provisions/settlements

(1,549)

– –

–

(770) (244)

(520) (893)

Onerous contract costs

(857)

Other

72

(27)

131

TOTAL

(17,330)

(21,871)

(21,474)

196

2020 UNIVERSAL REGISTRATION DOCUMENT