Euronext's Q1 Revenues Consolidate Despite Volumes Pullback

Euronext, Europe’s largest Exchange Exchange An exchange is known as a marketplace that supports the trading of derivatives, commodities, securities, and other financial instruments.Generally, an exchange is accessible through a digital platform or sometimes at a tangible address where investors organize to perform trading. Among the chief responsibilities of an exchange would be to uphold honest and fair-trading practices. These are instrumental in making sure that the distribution of supported security rates on that exchange are effectiv An exchange is known as a marketplace that supports the trading of derivatives, commodities, securities, and other financial instruments.Generally, an exchange is accessible through a digital platform or sometimes at a tangible address where investors organize to perform trading. Among the chief responsibilities of an exchange would be to uphold honest and fair-trading practices. These are instrumental in making sure that the distribution of supported security rates on that exchange are effectiv Read this Term, reported its financial results for Q1 2017, which showed a tight consolidation of key figures in spite of a decrease in volumes. The latest results corroborate an industry-wide trend in the institutional space of exchanges suffering from mitigated volumes in 2017.

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In Q1 2017, Euronext saw its revenues come in at $141.1 million (€126.6 million), virtually unchanged year-over-year from $141.0 million (€126.5 million) in Q1 2016. The group managed to hold onto its revenues due to a strong performance in its listing business, which climbed 33.0 percent on a yearly basis in Q1 2017. Moreover, yield management contributed to this strength, preventing any decline in this area.

Euronext’s volumes were not as resilient in Q1 2017, with its average trading volumes decreasing by 15.9 percent on a year-over-year basis from Q1 2016 for its cash products chain – the group also recorded an 8.0 percent year-over-year decrease in trading volumes in Q1 2016 for its derivatives products as well.

Furthermore, Euronext experienced an increase in operational expenses, excluding depreciation and amortization – this corresponded to an uptick in costs incurred by IT projects and business initiatives related to ‘Agility for Growth’, which climbed 2.6 percent in Q1 2017 to $62.5 million (€56.1 million) from $61.0 million (€54.7 million) in Q1 2016.

The group also recorded a tepid decrease in its EBITDA during Q1 2017, having inched lower to $78.6 million (€70.5 million), or -1.8 percent year-over-year from $80.1 million (€71.8 million) in Q1 2016.

According to Stéphane Boujnah, Chairman and CEO of the Managing Board of Euronext NV, in a statement on the quarterly earnings: “The deployment of our strategic plan is gathering pace, and I am extremely proud to announce two developments that show our commitment to deliver value to shareholders and clients.”

“Firstly, through the long-term agreement negotiated with ICE Clear Netherlands, Euronext secured similar financial benefits to those of the current agreement with LCH Clearnet SA, while significantly improving the client value proposition for the clearing of its derivatives products. Second, the introduction of a floor in our dividend policy will provide shareholders with a minimum return and reduce any possible dividend Volatility Volatility In finance, volatility refers to the amount of change in the rate of a financial instrument, such as commodities, currencies, or stocks, over a given time period. Essentially, volatility describes the nature of an instrument’s fluctuation; a highly volatile security equates to large fluctuations in price, and a low volatile security equates to timid fluctuations in price. Volatility is an important statistical indicator used by financial traders to assist them in developing trading systems. Trad In finance, volatility refers to the amount of change in the rate of a financial instrument, such as commodities, currencies, or stocks, over a given time period. Essentially, volatility describes the nature of an instrument’s fluctuation; a highly volatile security equates to large fluctuations in price, and a low volatile security equates to timid fluctuations in price. Volatility is an important statistical indicator used by financial traders to assist them in developing trading systems. Trad Read this Term.”

Euronext rolled out a series of changes to its market structure earlier this week, helping facilitate improvements for mid-cap companies and other listings. The group will implement a laundry list of new measures beginning as early as June 2017, which will see targeted changes in its market structure, also yielding several alterations to its issuing, listings, and sponsors.