Euronext forecasts that its 2019 financials will also benefit from the full-year contribution of FastMatch and of the Irish Stock Exchange.
The full-year results of Euronext NV (EPA:ENX) released on February 19, 2018, show that spot FX trading generated €7.2 million of revenue in 2017, for 4.6 months of consolidation after the acquisition of FastMatch in mid-August 2017.
Let’s recall that FXCM Group disposed of its stake in FastMatch in May 2017, as it was in a hurry to gather funds to repay its loan to Leucadia. As per the press release published back in May 2017, FXCM Group was set to receive approximately $55.6 million for its interest in FastMatch, with a portion held in escrow and subject to certain future adjustments including a share of a $10 million earnout if certain performance targets of FastMatch are met. FXCM had been looking to sell its stake in FastMatch since early 2015. Following the February 2017 events which tarnished the reputation of FXCM, FastMatch reshuffled its board of directors and reiterated its independence from the broker.
In May 2017, Euronext announced the acquisition of 90% of the shares of FastMatch, a spot FX ECN, to expand into global FX markets.
According to the numbers, released early on Monday, the average daily volume on the FastMatch spot foreign exchange market (of which Euronext owns 90% of the capital since August 2017) was $18.4 billion in 2017, up +44.7% compared to 2016.
FastMatch is also seen as a key factor for Euronext’s financials in the future. Euronext says that 2017 was a very active year, with more than eight investments in companies closed or committed. The acquisitions of FastMatch and of the Irish Stock Exchange in 2017, not included in the initial targets, have led the management to allocate resources to highly value creating projects.
As a result of these and of the delays related to the on-boarding of clients due to other focus of the industry, the management has also decided to refocus the Agility for Growth initiatives to the most promising projects among those announced in May 2016:
– the Chequers collateral management is cancelled, following client feedbacks, while the inventory management platform is continued,
– the specialist content provider on agricultural commodities is postponed, following the lack of acquisition opportunities that matches Euronext criteria,
– the MTF for ETF opportunity is delayed to H2 2018.
Given all these factors, the 2019 incremental revenue contribution of Agility for Growth initiatives is refined to €55m (vs. €70m in May 2016), while core business revenue 2019 targets are unchanged and 2019 revenue will also benefit from the full-year contribution of FastMatch and of the Irish Stock Exchange.