European Exchange Operator Surpasses Forecasts with Diversification Strategy
Q2 Performance Boosted by Diversified Business Model
By Mateusz Rabiega and Jakob Van Calster
July 30 (Reuters) – Euronext reported second‑quarter earnings that exceeded market expectations on Thursday, driven by growth across all its divisions as the pan‑European exchange operator leveraged its diversification strategy.
Financial Results Outperform Expectations
Adjusted earnings before interest, taxes, depreciation and amortisation increased 21 % to €360 million ($413 million), compared with the €332.6 million forecast in a company‑compiled poll.
Reduced Dependence on Market Volatility
Chief Executive Stephane Boujnah said the results demonstrate that Euronext is relying less on market volatility for growth.
“We have built a company that is increasingly immune to downturns in equity trading volumes,” Boujnah told Reuters.
Non‑volume revenue accounted for 58 % of total revenues, according to the earnings release.
Implications of Brexit and Shifts in European Markets
Boujnah added that the pan‑European exchange continued to benefit from changes in European capital markets following Brexit, noting that the London equity market has become narrower than it once was.
Listing Trends Reflect Broader Shifts
He pointed to listings such as private‑equity firm CVC and Czech defence contractor CSG as examples of a broader shift that, prior to Brexit, would have favoured London.
London’s Evolving Role in Global Finance
“Ten years ago, such companies would likely have listed in London when it was the largest financial centre in the European Union,” Boujnah said.
“After Brexit, London chose to stop being the largest financial centre of the European Union and instead become the largest financial centre of the United Kingdom.”
IPO Activity and Investor Adaptation
While the number of initial public offerings rose, the proceeds from new listings did not increase correspondingly; however, funds raised through follow‑on share offerings more than doubled year‑over‑year to exceed €9 billion.
Market Volatility and Investor Sentiment
Boujnah noted that investors have adapted to an uncertain environment after last year’s prediction that market volatility would become the “new normal”.
“Markets can adapt to anything,” he said. “They appear to be comfortable with an environment where companies can still go public and operate amid less stormy, yet still windy, conditions.”
