Euronext // 2021 Universal Registration Document

Risk management & Control Structure

Risk Factors

RUSSIA / UKRAINE WAR RISK

Risk Identification and Description

Potential Impact on the Group

Following the escalation of the Russian invasion of Ukraine in early 2022, the Group launched a process to assess strategic, operational and financial risks posed to the Group by these actions. The Group is assessing the measures taken by the European Union/ European Economic Area, United Kingdom and United States related to sanctions on Russia and their impacts on the Group. The Group may have business relationships or suspend products as a result. Targeted cyber-attacks, high volatility on markets and impacts to suppliers/contractors who cannot provide services may impact operations. Already in a period of uncertainty regarding the overall economic context in the short-term given the COVID19, inflationary environment and central bank considerations on tapering and interest rates, the geopolitical tensions in Europe between Russia and EU/NATO could have significant economic impacts (energy prices, inflation, etc.) with the situation worsening. This may impact the cost base and possibily the cost of debt refinancing of Euronext after 2024. Liquidity for financing purposes may be more scarce and expensive to obtain on both public and private markets and regulators seek to impose higher risk buffers. In the event that the CCP fails to have sufficient liquidity to fund its obligations, as a default of one or more of its members, it may have significant reputational and regulatory impacts which may further extend to the Group. These risks may have a financial impact.

If the Group fails to identify any Russian links and adhere to sanctions, it may face significant fines and reputational damage. Euronext does not own any entities in Russia and the Group has a limited activity with Russian clients and/or Russia-based entities. Similarly, the Group does not have critical vendors linked to Russia or Ukraine. The impact to business and vendor support is limited. As with any high volatility period, the current trading environment is supportive of most of the trading and clearing activities of the Group. In the case of a successful targeted physical or cyberattack directly on Market infrastructures or indirectly in the ecosystem of Euronext, and results in the extended disruption of the market, the Group may face significant financial and potentially reputation losses. The invasion of Ukraine is expected add to inflationary pressure particularly for commodities exported by Russia which may impact the cost base of the Group. Furthermore, a protracted war and disruptions to Russian and oil and gas exports may trigger a global energy shock resulting in negative consequences and in a worst case scenario a European recession, which may negatively impact the Group results.

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STRATEGIC RISKS

STRATEGIC TRANSFORMATION RISK

Risk Identification and Description

Potential Impact on the Group

The Group’s strategy includes the identification and implementation of organic initiatives and new business initiatives such as acquisitions and partnerships. The size, number and complexity of recent acquisitions and those that may be executed in the near future, as well as ongoing enhancement programmes have increased the strategic transformation risk of the Group. Strategic transformation risk is the risk of or loss resulting from underperforming or failed transformations or integrations. The market for acquisition targets and strategic alliances is highly competitive. The Group has acted on opportunities as they arise and may continue to enter into simultaneous business combination transactions. Euronext is undergoing company wide business transformation programs, such as the migration of the Core Data Centre, the pan-Europeanisation of the Euronext CSDs, the integration of Borsa Italiana markets onto the Optiq® trading platform, and the European expansion of Euronext Clearing. The projects undertaken by the Group as part of the broader integration of Borsa Italiana entities have varying degrees of dependencies, there is a risk that should one or more projects be delayed in delivery, the other projects may be impacted.

Pursuing strategic transactions requires substantial time and attention of the management team, and of key employees working on the integrations or projects. This could prevent oversight of other initiatives, reduce bandwidth for business as usual activities and slow other ongoing projects or initiatives. Late, incomplete or unsuccessful integrations or projects may impact the Group’s strategic plan, business, reputation and financial results. The ability to adapt to a rapidly changing company culture by Euronext’s employees is necessary to ensure successful integrations and transformation. Failure to meet the demands of the changing company culture could negatively impact the advancement of projects and successful integration. Recent acquisitions and strategic decisions require changes to the Euronext business model varying in complexity. If integration programs are not completed, do not operate as intended, are delayed or identified synergies are not delivered, Euronext’s strategic ambition may be at risk.

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2021 UNIVERSAL REGISTRATION DOCUMENT