EURONEXT_Registration_Document_2017

OPERATING AND FINANCIAL REVIEW

Overview

increase is mainly related to the acquisition of Company Webcast, iBabs and FastMatch in 2017, and their respective PPA.

Depreciation and Amortisation Depreciation and Amortisation increased by €1.8 million, or 12.2%, to €16.9 million in 2017, compared to €15.1 million in 2016. This

Other Operating Expenses

2017

2016

In thousands of euros

Systems and communications

(22,354)

(17,099)

Professional services

(45,545)

(38,382)

Clearing expenses

(27,925)

(26,311)

Accommodation

(9,961)

(10,237)

Other expenses

(24,364)

(20,737)

TOTAL

(130,149)

(112,766)

Accommodation decreased by €0.3 million, or -2.7%, to €10.0 million in 2017, compared to €10.2 million in 2016. This decrease is mainly attributable to the impact additional utilities costs for Cannon Bridge House in London in 2016 and the Belfast office termination in 2017. Other Expenses increased by €3.6 million, or 17.5%, to €24.4 million in 2017 when compared to €20.7 million in 2016. This increase consists of various smaller elements, the main one being the increase in non-recoverable VAT expenses, membership fees and other expenses related to Agility for Growth initiatives in 2017. Operating Profit before Exceptional Items Euronext operating profit before exceptional items for the year ended 31 December 2017 was €280.9 million, compared to €268.8 million for the year ended 31 December 2016, an increase of €12.0 million.

System and Communications increased by €5.3 million, or 30.7%, to €22.4 million in 2017, compared to €17.1 million in 2016. This increase is mainly attributable to costs related to key projects such as the development of Euronext’s new trading platform, Optiq®, and compliance with MiFID II. Professional Services increased by €7.2 million, or 18.7%, to €45.5 million in 2017, compared to €38.4 million in 2016. This increase is mainly attributable to an increase in consultant costs in 2017, related to key projects such as Optiq® and MiFID. Clearing expenses increased by €1.6million, or 6.1%, to €27.9million in 2017, compared to €26.3 million in 2016. This increase is linked to the higher Clearing revenues in 2016.

Exceptional Items

5

2017 (2,159)

2016 (7,082)

In thousands of euros

Restructuring costs

ICE Clear Netherlands termination fee

(5,000)

-

Acquisition costs

(5,280)

(3,322)

Portuguese pension plan settlement

(1,565)

-

Refund pre-retirement plan Paris

2,208

-

Litigation provisions/settlements

(388)

-

Impairment intangible assets

(2,621)

-

Other

18

366

TOTAL

(14,787)

(10,038)

Net Financing Income / (Expense) Euronext’s net financing income / (expense) for the year ended 31 December 2017 was a net expense of €3.6 million, compared to a net expense of €0.8 million for the year ended 31 December 2016, an increase in net expense of €1.4 million. This increase is mainly driven up by the early termination of the previous loan leading to accelerated amortization of transaction cost for €1.0 million and by one-off costs relating to Portuguese stamp duty tax.

In 2017, main exceptional items included:  €2.2 million of restructuring costs;  €5.0 million resulting from the termination of the agreement with ICE Clear Netherlands;  €5.3 million of acquisition costs incurred. Operating Profit Euronext operating profit for the year ended 31 December 2017 was €266.1 million, compared to €258.8 million for the year ended 31 December 2016, an increase of €7.3 million or 2.8%.

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2017 REGISTRATION DOCUMENT