Euronext reports weak Q2 revenue, volumes for FX franchise

abdelaziz Fathi

Euronext, which operates the biggest pan-European exchange, has published its results for the second quarter of 2023, showing a resilient performance amidst challenging market conditions. Despite a slight decline in revenue compared to the same period last year, the company’s focus on non-volume-related business and strategic initiatives contributed to a robust quarter.

In Q2 2023, Euronext reported total revenue and income of €368.1 million, down 1.8% compared to Q2 2022. However, on a like-for-like basis at constant currencies, the decline was milder at 0.5%. The company’s non-volume-related business played a crucial role in offsetting the impact of lower trading volumes, accounting for 61% of Q2 2023 revenue, up from 59% in the same period last year.

Technology Solutions reported revenue of €27.3 million, up 13.2%, thanks to the successful internalization of colocation services following the migration of the Core Data Centre to Bergamo.

The listing activity improved despite a soft IPO market, with Euronext hosting 16 new listings during the quarter. In fact, more than half of all new European listings and the largest IPO in Europe took place on Euronext in Q2 2023. Listing revenue reached €55.1 million, indicating a slight decline of 0.5%, primarily influenced by the depreciation of the Norwegian Krone over the year.

Euronext’s focus on diversifying its revenue streams paid off, with non-volume-related revenue accounting for 61% of Q2 2023 revenue, up from 59% in the same period last year. Furthermore, these businesses covered an impressive 148% of underlying operating expenses, excluding depreciation and amortization, indicating the company’s solid financial position.

Despite a less volatile environment for equity trading and clearing activities, Cash trading revenue reached €65.2 million, reflecting improved revenue capture and market share, while Clearing revenue was €29.4 million, down by 6.4% due to the low volatility environment.

The pan-European exchange posted €216.1 million in adjusted EBITDA, helping it earn €120 million in profit for the period, which was virtually unchanged YoY.

During the second quarter of 2023, derivatives trading volumes decreased across the offering with average daily volume on financial derivatives at 595,206 lots, down -19% from Q2 2022.

However, Euronext revenue capture on derivatives trading was €0.35 per lot for the second quarter of 2023, reflecting a positively geared volume mix and solid revenue capture.

On the FX business front, Euronext reported an average daily volume on its spot foreign exchange market at $21.6 billion for Q2 2023, down 45.7 percent compared to a year ago. The spot foreign exchange division yielded €6.1 million in revenues, down 8.6 percent from €7.3 million in Q2 2022.

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