EURONEXT_Registration_Document_2017

6

FINANCIAL STATEMENTS

Notes to the Consolidated Financial Statements

NOTE 19 AVAILABLE-FOR-SALE FINANCIAL ASSETS

AS AT 31 DECEMBER 2017

AS AT 31 DECEMBER 2016

In thousands of euros

Euroclear plc.

96,159

67,626

Sicovam Holding S.A.

41,696

30,000

LCH group

-

19,233

Algomi Ltd.

9,583

-

Other

65

201

TOTAL

147,503

117,060

Available-for-sale financial assets primarily include long-term investments in unlisted equity securities.

Euroclear plc and Sicovam Holding S.A. As of 31 December 2017, the Group holds a 3.34% ownership interest in Euroclear plc. (31 December 2016: 3.26%), an unlisted company involved in the settlement of securities transaction and related banking services. The increase from 3.26% to 3.34%was due to share buy-backs by Euroclear plc. in 2017. The Group also holds a 9.60% ownership interest in Sicovam Holding S.A. (31 December 2016: 9.60%), resulting in an indirect 1.53% interest in Euroclear plc. (31 December 2016: 1.49%). The common stock of Sicovam Holding S.A. and Euroclear plc are not listed. In relation to a changing political- and economic sentiment in Europe in 2017, the Group identified a significant increase in value of its investments in Euroclear plc and Sicovam Holding S.A. (see also Note 2 “Significant events and transactions”). This ultimately led to an increase in fair value of €40.2 million for these investments in combination in 2017, recognized against Other Comprehensive Income. Until 31 December 2016, the Group applied a combination of Capitalization- and Present value of dividend flows in perpetuity valuation techniques to establish fair value for the investments in Euroclear plc and Sicovam Holding S.A. In 2017, the Group changed methodology and applied a standardised multicriteria approach valuation for financial institutions based on the Gordon Growth Model valuation technique as its primary valuation method and the regression valuation technique (P/B.V. and ROE) and trading multiples as control methods. With this change, the Group is shifting its valuation methodology to what is the industries’ standard. Having performed a fair-value calculation of the investments in Euroclear plc and Sicovam Holding S.A. as per 31 December 2016 and 31 December 2017 applying both the legacy- and the newly adopted methodology, the Group concludes that the change in methodology is not a material factor in the revaluation that is recognized over 2017.

LCH Group In 2017, as for the investments in Euroclear plc. and SicovamHolding S.A., the Group changed methodology and applied the Gordon valuation technique to measure fair value of its investment in LCH group. This however did not lead to a change in fair value of the investment in LCH group until 29 December 2017. On 29 December 2017, the Group finalised the share exchange transaction of its 2.31% interest in LCH group for an 11.1% interest in LCH S.A., resulting in a full disposal of the investment in LCH group as per 31 December 2017. Immediately before this disposal, a revaluation to transaction value of €57.6 million was recorded against Other Comprehensive Income. The total revaluation of the investment in LCH group of €40.6 million has been recognised through the Statement of Profit or Loss upon finalization of the share exchange transaction in the fourth quarter of 2017.The 11.1% interest in LCH S.A. was classified as an investment in associate as per transaction date and therefore further described in Note 7 ‘Investments in associates and joint ventures’. Algomi Ltd. On 2 March 2017, the Group acquired a 7.59% interest in fixed income technology provider and joint venture partner Algomi Ltd., for a purchase consideration of €9.6 million ($10.0 million). As part of this investment, the Group acquired a warrant to receive additional shares. The Group excercised this warrant in the second half of the year, increasing the total interest in Algomi Ltd. to 7.74% as per 31 December 2017. The Group determined the purchase price observed in this acquisition and another recent transaction to be best proxy for fair value as per 31 December 2017. The classification of the measurement within the fair value hierarchy is presented in Note 30.

170

www.euronext.com

2017 REGISTRATION DOCUMENT