EURONEXT_Registration_Document_2017

6

FINANCIAL STATEMENTS

Notes to the Consolidated Financial Statements

Acquisition of FastMatch Inc. On 14 August 2017, the Group acquired a 90% majority stake in FastMatch Inc., a US-based Electronic Communication Network in the spot Foreign Exchange market. The acquisition includes an initial cash payment of $153 million (on a debt-free and cash-free basis), a contingent earn-out payment for an additional $10million and customary minority rights for the management of FastMatch Inc. that will remain committed to the development of the business and stay invested with a 10% interest (see Note 5). Renewal Clearing Services Contract with LCH S.A. for Derivatives Markets Post 2018 On 1 November 2017, the Group announced the signing of the renewal of its agreement with LCH S.A. on the continued provision of derivatives and commodities clearing services for a period of 10 years, starting 2019. As a consequence, the Group terminated the agreement on derivatives clearing signed in April 2017 with ICE Clear Netherlands, resulting in a €5.0 million breakup fee, which was recognised in exceptional items (see Note 12). Following the outcome of EU referendum in the UK and elections in the US, euro-zone was facing additional political pressure at the end of 2016. Increased political risk in economies long considered bastions of political stability were expected to affect risk-free rates, potentially reviving the euro crisis and raising the risk of an EU break-up scenario. In the first part of the year, this risk of destabilization in Europe was reduced by the results of elections in the Netherlands, France and Germany. The economic sentiment and outlook significantly improved and funds are flowing back to the euro-zone and translated into a robust share price performance across listed financial institutions within the EU. Revaluation of Available-for-Sale Financial Assets Euroclear plc. and Sicovam Holding S.A. The significant accounting policies applied in the preparation of these Consolidated Financial Statements are set out below. These policies have been consistently applied to all the years presented, unless stated otherwise. The Financial Statements are for the Group consisting of Euronext N.V. and its subsidiaries. Basis of Preparation The Consolidated Financial Statements of the Group have been prepared in accordance with International Financial Reporting Standards (“IFRS”) adopted by the European Union. They also comply with the financial reporting requirements included in Title 9 Book 2 of the Dutch Civil Code, as far as applicable. The Consolidated Financial Statements have been prepared on a historical cost basis, unless stated otherwise. NOTE 3

This changing environment had an impact on the valuation of our available-for-sale financial assets, especially on investments in financial institutions with a significant EU exposure, such as Euroclear plc. The sentiment in Europe, that had a dampening effect on the value of our direct- and indirect (through Sicovam Holding S.A.) equity investment in Euroclear plc at the end of 2016, positively impacted this value as per 31 December 2017. This ultimately led to an increase in fair value of our investments in Euroclear plc and Sicovam S.A. in 2017 of €40.2 million (see also Note 19). In the second half of 2017, the Group announced its intentions to swap its current 2.31% stake in LCH group for a 11.1% stake in LCH S.A., subject to regulatory approvals and other customary conditions. The transaction was finalised, and shares were transferred, on 29 December 2017 and will strengthen the long- standing relationship between Euronext and LCH S.A.. Euronext will remain on the board of LCH S.A. following completion of the share swap. Euronext will also nominate one representative to LCH S.A. Audit Committee and will continue to be represented at LCH S.A. Risk Committee. A newConsultative Committee dedicated to Euronext derivatives business will be created. The parties have agreed that Euronext will have certain minority protection rights connected with its new shareholding in LCH S.A.. The share swap transaction led to a change in fair value of €38.4 million and subsequent de-recognition in available-for-sale financial assets with carrying value of €57.6 million, in relation to the 2.31% stake in LCH group Ltd. (see Note 19). The 11.1% stake in LCH S.A. has been recognised in investments in associates and joint ventures (see Note 7). The share swap transaction resulted in a capital gain recognised in results from equity investments of €40.6 million (see Note 14), from the recycling to profit or loss of cumulative historical revaluations that were recognised in Other Comprehensive Income. Share swap of 2.31% Stake in LCH Group for a 11.1% Stake in LCH S.A. Basis of Consolidation These Consolidated Financial Statements include the financial results of all subsidiaries in which entities in the Group have a controlling financial interest and it also incorporates the share of results from associates and joint ventures. The list of individual legal entities which together form the Group, is provided in Note 4. All transactions and balances between subsidiaries have been eliminated on consolidation. All transactions and balances with associates and joint ventures are reflected as related party transactions and balances (see Note 31). (i) Subsidiaries Subsidiaries are all entities controlled by the Group. The Group controls an entity when the Group is exposed to, or has rights to, variable returns from its involvement with the entity and has the ability to affect those returns through its power to direct the activities of the entity. Subsidiaries are fully consolidated from the date on

SIGNIFICANT ACCOUNTING POLICIES AND JUDGMENTS

142

www.euronext.com

2017 REGISTRATION DOCUMENT