EURONEXT_Registration_Document_2017

OPERATING AND FINANCIAL REVIEW

Overview

attributable to the closure of Cannon Bridge House in London and the relocation of premises in Paris and Brussels in 2015. Other Expenses decreased by €-2.2 million, or -10%, to €20.7 million in 2016 when compared to €22.9 million in 2015. This decrease consists of various smaller elements, the main one being the reduction of the insurance costs that were re-negotiated in 2016. Operating Profit before Exceptional Items Euronext operating profit before exceptional items for the year ended 31 December 2016 was €268.8 million, compared to €266.8 million for the year ended 31 December 2015, an increase of €+2.0 million.

System and Communication decreased by €-1.5 million, or -8%, to €17.1 million in 2016, compared to €18.6 million in 2015. This decrease is mainly attributable to sustainable maintenance reductions delivered as part of the cost reduction program. Professional Services decreased by €-1.2 million, or -3%, to €38.4 million in 2016, compared to €39.6 million in 2015. This decrease is mainly attributable to lower costs for Euronext’s Data Centre in Basildon following a reduction in number of cabinets, which is partly offset by increased expenses related to studies for the newly defined Group strategy in 2016. Clearing expenses decreased by €-1.4million, or -5%, to €26.3million in 2016, compared to €27.8 million in 2015. This decrease is linked to the lower Clearing revenues in 2016. Accommodation decreased by €-3.4million, or -25%, to €10.2million in 2016, compared to €13.6 million in 2015. This decrease is mainly

Exceptional Items

2016 (7,082)

2015

In thousands of euros

Restructuring costs

(20,581)

Share plan vesting acceleration/settlement

-

(349)

AMF fine

-

(5,000)

Acquisition costs

(3,322)

-

Litigation settlements

-

(1,976)

Other

366

(753)

TOTAL

(10,038)

(28,659)

Operating Profit Euronext operating profit for the year ended 31 December 2016 was €258.8 million, compared to €238.1 million for the year ended 31 December 2015, an increase of €+20.7 million or +8.7%. Net Financing Income / (Expense) Euronext’s net financing income / (expense) for the year ended 31 December 2016 was a net expense of €0.8 million, compared to a net expense of €4.1 million for the year ended 31 December 2015, a decrease in net expense of €-3.3 million. This decrease is mainly attributable to the variance in foreign exchange results. In 2016, foreign exchange results mainly relate to historical cumulative unrealised exchange differences recognised in Other Comprehensive Income, which have been realised following the dissolution of a U.K. subsidiary. The foreign exchange results in 2015 mainly stem from outstanding accounts receivable and accounts payable held in foreign currencies.

In 2016, exceptional items included:  €7.1 million of restructuring costs, including:

 expenses for employee termination benefits in the various Euronext locations for €3.2 million,  expenses attributable to the execution and completion of the French restructuring plans for €1.7 million, and  restructuring expenses relating to relocation of Belfast IT operations to Porto for €2.2 million;  €3.3 million of acquisition costs incurred for the contemplated acquisition of LCH S.A. This transaction is considered to be transformational and associated costs as exceptional;  €0.4 million (benefit) of other items.

5

2016 (2,142)

2015 (2,906)

In thousands of euros

Interest expense

Finance costs

(2,142)

(2,906)

Interest income

572

369

Gain/(loss) on disposal of treasury investments

-

113

Net foreign exchange (loss)/gain

764

(1,720)

Other net financing income/(expense) NET FINANCING INCOME/(EXPENSE)

1,336

(1,238)

(806)

(4,144)

119

2017 REGISTRATION DOCUMENT