EURONEXT_Registration_Document_2017
1
PRESENTATION OF THE GROUP
Description of the Business
Resilient Model Delivering Consistent Growth and Profitability Euronext’s sources of revenues are diversified across the businesses, markets and client segments. For the year ended 31 December 2017, approximately 44% of the Company’s revenues were generated by the non-volume related businesses. Non-volume related businesses include market data and indices, listings excluding IPOs, custody and settlement, and market solutions & other. This helps to limit Euronext’s exposure to cyclicality in demand for particular products or services or in individual markets. The following table sets out information relating to the sources of total revenue for the year ended 31 December 2017 and for the year ended 31 December 2016:
YEAR ENDED 31 DECEMBER 2017
YEAR ENDED 31 DECEMBER 2016
% OF TOTAL REVENUES 15.8% 15.8%
% OF TOTAL REVENUES
REVENUE
REVENUE
In thousands of euros
Listing
84,247
68,708
13.8% 44.5%
Trading revenue
237,854
44.7%
220,835
of which:
Cash trading
190,276
35.7%
180,727
36.4%
Derivatives trading
40,339
7.6% 1.4%
40,108
8.1%
Spot FX trading
7,239
-
n/a
Market Data and Indices
104,673
19.7% 13.5%
105,697
21.3% 13.7%
Post-trade
71,698
67,627
of which:
Clearing
51,132 20,566 33,465
9.6% 3.9% 6.3% 0.1%
47,992 19,635 33,009
9.7% 4.0% 6.6% 0.1%
Custody and Settlement
Market solutions & other
Other income
357
560
TOTAL REVENUE
532,294
496,436
Liquidity and Transparency to all Market Participants Through Regulated Exchanges
Euronext’s businesses are characterised by recurring revenue streams which generate resilient and robust free cash flow and allow Euronext to operate and invest in its business with flexibility. The Group’s market expertise and proven, multi-asset class technology infrastructure allow Euronext to launch new products without substantial additional capital expenditure. Further, the Company’s trading businesses do not expose it to credit risk or counterparty risk, which is borne by the counterparties to the trade and not by the markets. Euronext believes that its capital-light business and resilient free cash flow generation provide a potential for attractive return for shareholders while observing its regulatory capital requirements.
Euronext’s cash equities markets have a diverse member base by geography and trading profile, making for a particularly rich and diversified order book. Euronext offers superior market quality to competitors: in December 2017 Euronext provided for blue-chips on average 80% presence at EBBO (European Best Bid and Offer), of which 65% was the first to set the EBBO. This ability to make the EBBO demonstrates the leading role of Euronext in the price forming of its listed securities and in ensuring the best execution for its investors. In addition the average displayed market depth at the Euronext best limit is equivalent to seven times – or 58,289 euros – the average order size, thus demonstrating the ability to absorb large orders in full transparency and at minimal cost, as Euronext’s average spread was 3.72 basis points.
MARKET QUALITY, DEPTH AND LIQUIDITY OF EURONEXT COMPARED TO MTF
PRESENCE TIME AT EBBO (%)
EBBO WITH GREATEST SIZE (%)
EBBO SETTER (%)
RELATIVE SPREAD (bps)
DISPLAYED MARKET DEPTH (€)
BLUE CHIPS (December 2017)
EURONEXT
80% 34% 55%
43%
65%
3.72 8.01 6.29 61.8 7.33
58,289 14,620 18,375 23,984 16,737
BATS EU
0% 2% 0% 0%
3%
Chi-X
10%
Equiduct
2%
0% 5%
Turquoise
41%
The table above is indicative of five metrics allowing to compare Euronext order book liquidity against the most active MTF on the Euronext securities.
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www.euronext.com
2017 REGISTRATION DOCUMENT
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