EURONEXT_Registration_Document_2017

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OPERATING AND FINANCIAL REVIEW

Overview

The following review relates to Euronext historical financial condition and results of operations for the years ended 31 December 2017 and 2016. This “Operating and Financial Review” is based on the audited Financial Statements for the years ended 31 December 2017 and 2016, which are included and incorporated by reference in this Registration Document and should be read in conjunction with “General description of the Company” and “Financial Statements”. Prospective investors should read the entire Registration Document and not just rely on the information set out below. The financial information included in this “Operating and Financial Review” has been extracted from the audited Consolidated Financial Statements. The following discussion of Euronext results of operations and financial condition contains forward-looking statements. Euronext actual results could differ materially from those that are discussed in these forward-looking statements. Factors that could cause or contribute to such differences include those discussed below and elsewhere in this Registration Document, particularly under “Risk Factors”.

5.1 Overview

Cost Allocations since 1 January 2014 In March 2014, in connection with the separation of Euronext from ICE, existing transfer pricing agreements were terminated and replaced by transitional and long-term SLAs providing for a specific identification of each individual service rendered to or received from ICE. Each individual service is priced separately, generally on a fixed fee basis, based on actual usage or mutually agreed service level. These SLAs do not provide for the allocation of actual cost incurred, plus overheads and mark-up, in proportion to revenues. The historical transfer pricing agreements were amended as of 1 January 2014 in order to provide for pricing consistent with the SLAs implemented in March 2014. Accordingly, the recharges to and from ICE are made on a consistent basis throughout the rest of the year 2014. Services rendered to ICE primarily include the IT support to LIFFE, which terminated at the end of 2014, as well as various ancillary services. The income derived from these services is presented as “ICE transitional revenue and other income” in the consolidated income statement for the year ending 31 December 2014. Services received from ICE under the SLAs include the use of data centre infrastructure, corporate information systems and web support, as well as certain market data, market operations, internal audit and other services. With the exception of data centre infrastructure, the services received from ICE were transitional and have ended at the end of 2014. Euronext will continue to benefit from a perpetual license to use the Euronext UTP technology on a royalty-free basis.

Euronext is a pan-European exchange Group, offering a diverse range of products and services and combining transparent and efficient equity, fixed income securities and derivatives markets in Amsterdam, Brussels, Lisbon, London and Paris. Euronext businesses comprise: listing, cash trading, derivatives trading, spot FX trading, market data and indices, post-trade and market solutions & other. Euronext management reviews the performance of the business, and makes decisions on allocation of resources, only on a company- wide basis. Therefore, Euronext has one reportable segment. Euronext has been operating as an independent, publicly traded company since 20 June 2014. Prior to June 2014, Euronext’s businesses were part of ICE as a result of ICE’s acquisition of NYSE Euronext on 13 November 2013. 5.1.1 DEFINITIONS The following defined terms are used in this Operating and Financial Review: “Legacy Euronext” means the historical operations of the former Euronext N.V. (existing prior to 15 March 2014) and its subsidiaries, including LIFFE.

5.1.2

ESTABLISHMENT OF EURONEXT AS AN INDEPENDENT, PUBLICLY TRADED COMPANY

The legal entities of the Group have been owned by Euronext N.V. since the date that the internal reorganisation was finalised in March 2014. The Consolidated Financial Statements as of and for financial years ended 31 December 2017, 2016 and 2015 have been prepared as described further in Note 3 to the Consolidated Financial Statements (see “Financial Statements” ). All transactions and balances between subsidiaries have been eliminated on consolidation.

5.1.3

SOURCES OF REVENUES

Listing Admission fees comprise fees paid by companies to list and admit to trading equity and debt securities on Euronext markets and corporate activity and other fees, which consist primarily of fees charged for centralising securities in connection with new listings and tender offers and delisting fees. In addition, companies whose

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www.euronext.com

2017 REGISTRATION DOCUMENT