Euronext - 2020 Universal Registration Document

Other Information

Independent auditor’s report

Our key audit matters Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the financial statements. We have communicated the key audit matters to the supervisory board. The key audit matters are not a comprehensive reflection of all matters discussed. Following the Covid-19 pandemic, a new key audit matter has been identified.

The matters were addressed in the context of our audit of the financial statements as a whole and in forming our opinion thereon, and we do not provide a separate opinion on these matters.

THE IMPACT OF THE COVID-19 PANDEMIC Risk

The developments around the Covid-19 pandemic have a profound impact on society and the economy. This also effects the operational and financial performance of organizations and the assessment of the ability to continue as a going concern. The situation continues to evolve giving rise to inherent uncertainty. Therefore, we consider the impact of Covid-19 a key audit matter.

Euronext N.V. is confronted with this uncertainty and disclosed this in note 2 of the consolidated financial statements in the section ‘Covid-19’ and in the risk management section 2 in the universal registration document, particularly concerning the operational risks. Our audit approach We discussed and evaluated the impact of the Covid-19 pandemic on the operational and financial performance of Euronext N.V. and focused particularly on the effectiveness of internal controls while certain staff of the company is working remote, and the impact on organizational transformational projects.

Accordingly, we designed and performed specific audit procedures responsive to the potential impact. For the internal controls testing we inspected the monitoring conducted by the control functions of Euronext and, through data-analyses, performed incremental procedures especially on outgoing payments. Finally, we evaluated the disclosures in the universal registration document and the financial statements related to the impact of the Covid-19 pandemic. Based on our procedures performed we consider that the main issues and elaborations in respect of the impact of Covid-19 on the operational and financial performance of Euronext N.V. have been properly presented in the risk chapter of the universal registration document and in the disclosures to the financial statements in accordance with EU-IFRS.

Key observations

ACCOUNTING FOR ACQUIRED BUSINESSES Risk

During 2020 Euronext acquired all shares of VP Securities AS and a 60% interest in Nord Pool AS. As disclosed in notes 2 and 5 to the financial statements considerations paid totalled EUR 196 million. The acquisitions have been included in the consolidated financial position and results of Euronext from the moment control was obtained. Based on the purchase price allocations performed by management, separately identifiable intangible assets of € 110 million and goodwill of € 46 million have been recognized. Accounting for business combinations involves a number of judgments, such as the identification of intangible assets, the choice of valuation techniques and underlying assumptions, as well as the allocation to cash generating units. The use of different techniques and assumptions could produce significantly different estimates. Given the relative size of the amounts involved and the inherent complexity, we consider this as a key audit matter. Our audit approach We gained an understanding of the material business acquisitions and made an assessment of the process that management has undertaken to determine the allocation of the purchase price, including understanding the scope of work, assessing the qualifications and competence of the external valuation experts and evaluating whether the correct accounting treatment has been applied in accordance with IFRS 3 ‘Business Combinations’. We tested the considerations paid and the identification and valuation of the identifiable tangible and intangible assets acquired, in particular the customer relations and software. We have audited the fair value measurements prepared by management and their valuation experts including assessing the key valuation assumptions used and engaged our valuation specialists to evaluate the methodology and assumptions applied by Euronext. Furthermore, we benchmarked key data inputs used in the valuation model such as the EBIT margin, longevity of acquired customer relationships and reviewed the reasonableness of the amortization period applied. Finally, we have evaluated the appropriateness of the disclosures related to business combinations. We found the identification and measurement of the goodwill, identifiable assets and liabilities related to the acquisitions of Nord Pool AS and VP Securities AS reasonable. The disclosures of these business combinations are in accordance with the requirements under EU-IFRS. Key observations

9

307

2020 UNIVERSAL REGISTRATION DOCUMENT