Euronext Nv Unsp/Adr

Hello and welcome to the Euronext Q1 2024 results call. My name is Laura and I will be your coordinator for today's event. Please note this call is being recorded and for the duration of the call, your lines will be on listen-only mode. However, you will have the opportunity to ask questions at the end of the call. This can be done by pressing star 1 on your telephone keypad to register your question. If you require assistance at any point, please press star zero and you will be connected to an operator. Today, we have Stefan Bujna, CEO and Chairman of the Managing Board of Euronext, joined by Giorgio Modica, CFO, as our presenters. I will now hand you over to your host, Stefan Bujna, to begin today's conference. Thank you.

Good morning, everyone, and thank you for joining us this morning for the Euronext first quarter 2024 results conference call and webcast. I am Stéphane Boujna, CEO and Chairman of the Managing Board of Euronext, and I will start with the highlights of this quarter. Giorgio Modica, Euronext CFO, will then develop the main business and financial highlights of the first quarter of 2024. As an introduction, I would like to highlight three main points. Euronext has demonstrated its capabilities to deliver strong growth thanks to its diversified business model. We have delivered plus 8% revenue growth in Q1 2024, bringing revenue and income to a record level of €401.9 million. This very good performance was driven by solid growth in non-volume related businesses. in record performances in fixed income, record performance in power trading, as well as the benefits of our successful expansion of Euronext Clearing to Euronext European Cash Market in November 23. Thanks to our continued cost control and some positive run-offs, we reduced significantly our underlying expenses by minus 2% year-on-year to $150.7 million despite inflation that affected all of us, and we reached, therefore, an adjusted EBITDA margin of 62.5%. we are definitely on track to complete the integration of the Borsa Italiana Group. We completed the migration of Italian derivatives to Euronext's proprietary trading platform, Optic, in March. The last step of the integration will be delivered in Q3 2024, in a few weeks' time, when we migrate all Euronext financial derivatives and commodities listed on our European markets to Euronext Clearing to complete our presence on the entire trading value chain. Thanks to our continued progress with the delivery of the Borsa Italia Group integration, we delivered €79 million of cumulative run rate synergies at the end of 2024. So, we are perfectly on track to achieve our Growth for Impact 2024 target of €115 million of annual run rate synergies by the end of this year, just three years after this transformational acquisition was completed. Since the beginning of the year, we have continued to innovate for the benefit of the attractiveness of European capital markets and for the benefit of our clients. Euronext successfully launched dark midpoint and sweep functionalities in Q124, our core data center in Bergamo. These new functionalities are critical in continuing to provide the highest liquidity to all our trading members. And we have rolled out a harmonized corporate action services across our CSDs in order to tackle post-trade fragmentation in Europe. Lastly, we have strengthened and diversified our data index franchise with the announced acquisition of Global Rate Set Systems, GRSS, a leading and highly respected provider of services to benchmark administrators. GRSS is a mission-critical service provider to the benchmark administrators that produce three of Europe's critical interest rate benchmarks, Euribor, CYBOR, and NIBOR. Together with the GRSS teams, we aim to reinforce significantly the positioning of GRSS in order to become the go-to provider in the contributed data and indices space, leveraging on Euronext's global leadership and recognition. Let me give you a quick overview of the performance of the first quarter of 2024 on slide 4. Euronext reported a very strong first quarter of 2024, posting revenue growth of plus 8% year-on-year, up to €401.9 million. The quarter was marked by strong dynamism in post-trade and non-volume rate-driven activities, together with the record performance of fixed income and power trading. First, post-trade revenues saw double-digit growth. Euronext's clearance performance was driven by the first full quarter of contribution from its expansion to European cash instruments, as well as very dynamic commodities clearing activity. Euronext Securities posted a strong plus 6% increase in revenue this quarter, thanks to the growth in insurance and custody services. Second, our trading revenues posted strong growth supported by record quarter for fixed income and power trading. This is the proof of the group's successful diversification. Despite lower equity and derivative volumes, our total trading revenues grew by over 7%. Third, Non-volume-related revenue posted a strong performance, overall notably in listing and advanced data services. We remain, this quarter again, the leading listing venue in Europe. We also observed, in the second quarter so far, a very encouraging dynamic of our listing activity, with two large IPOs in April. Plan is where? and CBC Capital. This translated into non-volume related revenue accounting for 58% of the total Q1 revenue and covering 155% of underlying operating expenses excluding DNA. We continued our trademark discipline approach to cost control. Combined with a positive one-off accruals release, Q1 2024, underlying operational expenses excluding DNA decreased slightly to $150.7 million down minus 2% compared to our cost base of the first quarter of 2023, and all that despite inflationary pressure. Overall, we reported a strong growth in adjusted EBITDA of plus 15%, to €251.3 million, and an adjusted EBITDA margin that increased by 3.8 points to 62.5%. This strong performance, combined with a continued positive interest rate environment for cash in the bank, led to a plus 15% increase in adjusted EPS at €1.58 per share. and it also led to an adjusted net income of €164.2 million. On a reported basis, EPS for this first quarter also benefited from the positive comparison base related to the provision of the €36 million termination fee of the clearing agreement that we paid in Q1 2023. Consequently, reported EPS increased by plus 49.1% to 1.35%. Lastly, we continue to deliverage massively, reaching 1.6 times net debt to last 12 months adjusted EBITDA at the end of March 2024. This compares to 3.2 times at the completion of the Bursa Ethernet Group acquisition in April 2021. Our ongoing delivering path has been praised by S&P, who upgraded us to BBB+, positive outlook As I mentioned earlier, we are now entering the final phase of our 2024 strategic plan and the Bursa Italiana Group integration with only one step ahead of us to complete this integration journey. In March 24, we successfully migrated Italian derivatives trading operations to OPTIC. This migration was the last in the ambitious integration plan of Italian cash and derivatives markets and to the Euronext Single Trading Platform. and it was completed less than three years after the acquisition of the Bolsa Italiana Group, completed in April 2021. This success contributed to the synergies delivered this quarter, and we reached 79 million of Cumulated Run Rate EBITDA synergies at the end of Q1 2024. You have understood that we are well on track and on schedule to deliver the last step of our Growth for Impact 2024 strategic plan. The expansion of Euronext Clearing to all financial and commodity derivatives listed on all Euronext markets in the third quarter of 2024 will be the final step to achieve the targeted delivery of $115 million of Cumulated EBITDA synergies at the end of 2024. Furthermore, the expansion of our Clearinghouse will unlock a new set of strategic organic growth opportunities for us, which I'm looking forward to share with you on our Capital Markets Day on the 8th of November 2024 in Paris. And I'll give the floor to Giorgio for the review of our first quarter of 2024.

Thank you, Stefan, and good morning, everyone. Let us now have a look at the strong performance of this first quarter of 2024. I'm now on slide seven. As already mentioned by Stefan, total revenue this quarter reached €401.9 million, up 8% compared to last year, and 8.5% at custom currency. This quarter there is no change in scope impact, and the full performance is organic. Non-volume-related share of revenue remains high at 58%, highlighting the success of our diversification strategy. despite the record quarter for some of our trading businesses like fixed income and power trading. Our diversified businesses delivered strong growth in this first part of the year with a record top line. Let me deep dive into the drivers of this excellent performance starting with listing on slide 8. Listing revenue was 57.7 million euro, up 5.5% driven by the increased volume of equity and debt activity versus last year, and the good performance of Euronext corporate services. Euronext confirmed its leadership in equity listing in Europe and debt listing worldwide. On the equity side, in Q1 2024, Euronext welcomed 10 listings. Furthermore, we observe an encouraging dynamic in this first part of the second quarter with two large IPO in April, Plansware and CVC Capital. On the debt side, we reached for the first time 57,000 bonds listed on our markets, while we also strengthened our leading position on ESG bond listings. Euronext Corporate Services continues to deliver a solid performance with revenue growing to €12 million in this Q1 2024, up 12.5% compared to the first quarter of 2023, resulting from the strong performance of the SaaS offering. Slide 9 illustrates how data and investor services activity continue to drive growth this quarter. Advanced data services reached 59.4 million euro revenue up 5.5%, driven by the increased demand for non-professional usage and solid demand for fixed income and power trading data. Investor services reported 3.1 million euro revenue in the first quarter of 2024, representing a 17.4% increase compared to the first quarter of 2023. resulting from a continued commercial expansion, cementing the franchise among the largest global investment managers. On the other end, Technology Solutions reported 26.7 million euro of revenues down 3.3% due to the reduction of logical access revenue following the completion of the migration of Borsi Italiana cash and derivative market to OPTIC, In other words, our client benefited from the savings of connecting to only one system. Moving to trading on slide 10, Euronext trading revenues at €138.4 million, up 7.4% from the €128.9 million in the first quarter of 2020. not only shows the benefit of the diversification of Euronext trading activity, but it also showed the resilience of a cash trading model in a low-volume environment. Cash trading revenue was 70.6 million euros, down 1.6%, versus the first quarter of 2023. It reflects lower trading volumes by 9.2%, primarily offset by improved average fees. Cash revenue capture average 0.54 basis points, despite the average order size remain very high. It demonstrates the benefit of the new PIN scheme implemented in Italy following the migration of Borsa Italiana cash equity markets to OPTIC. Cash equity market share averaged an healthy 64.6%. Derivative trading decreased by 10.9% to 13.4 million euros in the first quarter of 2024 due to lower financial derivative volumes with ADV down 12.6%, partially offset by stronger performance of commodity derivatives with volume up 34.3% versus last year. Average revenue capture on derivatives trading reached 0.33 euro per lot lastly fx trading grew 12.7 percent to 7.1 million euros of revenues in the first quarter of 2024 up 12.7 percent mostly supported by growing volume slightly offset by a negative volume mix impact continuing with trading on slide 11 fixed income trading revenue grew 34.5% and reached another record quarter at 35.2 million euros, reflecting strong performance of MTS Cash, MTS Repo, and the increased traction of the Euronext fixed income retail franchise. Our fixed income franchise continues to be supported by an economic environment favoring many money markets, sustained sovereign issuance activity, and supportive volatility. For the first quarter of 2024, MTS cash recorded 34.7 billion euros of ADV and MTS repo reached 492 billion euros of term-adjusted ADV. MTS EU continued to post the encouraging results. Power trading revenue grew to 12.2 million in the first quarter of 2024, up 23.7% compared to the first quarter of 2023. This record performance was driven by another all-time high intraday volume and a solid year-on-year day-ahead trading activity. I conclude this business review on slide 12. Clearing revenue was up 23.1% to 37 million euros this quarter, affecting the increased equity clearing volumes following the expansion of Euronext Clearing to the cash trading market in Belgium, France, Ireland, and the Netherlands, and Portugal in the fourth quarter of 2023, and high clearing revenues from the dynamic commodity activity. Non-volume-related clearing revenue accounted for 11.1 million euros, and the total clearing revenues in the Q1 2024 reached, as I said, 37 million euros. Net treasury income amounted to 11.7 million in the first quarter of 2024, representing a 57% increase from Q1 2023. As a reminder, Q1 2023 NTI was still impacted by the runoff of the Euronext clearing investment portfolio. Lastly, revenue from cashed-in settlement and other post-trade activity reached 67.8 million euros this quarter. This is a 6% increase, reflecting a dynamic issuance activity, the good performance of new services, and higher assets under custody. On a like-for-like basis, custody settlement and other post-trade revenue was up 7.1% compared to the Q1 2023. Moving on with the financial review of the quarter, I will start now with the EBITDA bridge on flight 14. Euronext adjusted EBITDA for the quarter was up 15% to 251.3 million euros. This translated into an EBITDA adjusted margin of 62.5%. This quarter up 3.8 points compared to the first quarter of 2023. Non-underlying costs for the quarter were 8.7 million euros primary relation to the ongoing work related to the cleaning expansion and new optic migration. As a reminder, in the first quarter of 2023, we provisioned $36 million fee for the termination of the cleaning agreement with FCHSA, which has been paid this quarter in Q1 2024. The underlying operational expenses, including DNA, decreased 2%, reflecting continued cost discipline in an inflationary environment, and the release of some cost and provision totaling around 3.5 million euros. As you can imagine, it's too early now to discuss about changing the cost guidance for 2024 that remains as announced with the results of 2024 at 625 million euros. Moving to net income on slide 15, adjusted net income this quarter is strongly up at 164.2 million euros, which represents an increase of 11.7%. compared to Q1 2023. So as you can see, I will not comment the increase of the net financing income, as this is obvious, reflecting an increase yield on our cash balance. You see as well that we have a decrease from equity investment, and this is mainly linked to the fact that we will not receive the one-off dividend from SICOVAM we received last year. We will receive it in Q4 this year. And we don't benefit anymore from the results of associate link to LCHSA that was disposed last year. Lastly, net income tax for the first quarter of 2024 was 54.7 million euros. This translated into an effective tax rate of 26.9% for the quarter. Minority interests were as well higher due to the very good performance of Norpool and MTS. As a result, reported net income increased 44.8% to 139.7 million euros, and adjusted EPS basis was up 15% in the first quarter of 2024 at 1.58 euro per share. To conclude with the cash flow generation and leverage, I'm now on slide 16. As you can see, our balance sheet position is very solid, as well as cash flow generation. S&P recognized our consistent leverage process and upgraded Euronext to BBB plus positive outlook in April 2024. In Q1 2024, Euronext reported net cash flow from operation activities of 184.6 million euros compared to 318.2 million euros in the first quarter of 2023. The latter reflected the strong positive movements in net working capital related to Northpool and the Euronext clearing CCP activity. Excluding the impact on working capital from Euronext clearing and Northpool CCP activities, Net cash flow from operation activity accounted for 68.6% of EBITDA in the first quarter of 2024, or 184.6 million euros. The reduction versus Q1 2023 is explained by the payment of the 36 million termination fee to LCH SA. Net debt to adjusted EBITDA was at 1.6 times at the end of the quarter and 1.7 times on the reported EBITDA basis. And with this, I would like to give back the floor to Stefan.

Thank you, Giorgio. Q1 2024 clearly demonstrated that the benefits of our diversification strategy are coming through, and they translate into high single-digit growth boosted by non-volume-related and diversified trading activities. Now that the integration phase is coming to an end, our efforts are focused on innovation for the benefit of the attractiveness of Euronext and European capital markets. We maintain our trademark cross-discipline in an inflationary environment, and we continue to deliver on the key projects of the Borsa Italiana Group integration to enable us to complete the value chain and to be on track to achieve all 2024 targets on synergies. Meanwhile, we are advancing, and that's probably the most important dimension of our agenda for the next few months. We're advancing with the exploration of strategic opportunities, which I'm looking forward to share with you during our investor day on the 8th of November 2024 in Paris. Thank you for your attention. We are now ready to take your questions together with Giorgio Antoniattia, the Global Head of Derivatives and Post-Trade, And Nicolas Rivard, head of cash equity and data services. And, of course, the IR team with me.

Thank you. Ladies and gentlemen, as a reminder, if you would like to ask a question, please press star 1 on your telephone keypad. Thank you. We'll now take our first question from Bruce Hamilton of Morgan Stanley. Your line is open. Please go ahead.

Hi, thank you for taking my questions. Congratulations on the quarter. On the synergy delivery, obviously, as you say, well on track. I make it that I think the cost or the payment to LCH is about $35 million, which is basically give or take the gap between the 79 and the 115. So should we assume that really there isn't much revenue synergy for clearing derivatives baked into that run rate number and the residual is all costs, or am I thinking about that incorrectly? And then secondly, on the cash trading business, I see that's a pretty good print given that ADV was down 10% in Q1, and Q2 so far is running positive, which is also helpful. On the average yield, though, it sounds as though 0.54 bps is despite larger order sizes. So in a normalized environment, should we be thinking a sort of cash yield well above the sort of 0.52 that you've talked about in the past. Thank you.

So Giorgio will answer your question on the synergies, and Nicola Riva will take you on the ADV.

When it comes to the synergies, as you pointed out, and you are correct, we will reach 35 run rate savings for the termination of derivative clearing arrangement of LCHSA. And it is very tempting to do the 79 plus the 35. Reality is that there are a number of pluses and minuses that you would need to count to get to the actual number of synergies. And still, as you can imagine, we aim to reach and exceed the objective. Having said that, it is difficult now to comment on whether this is the only element. Just to give you one element, at the moment, as you can understand, we have some double run costs for our cleaning activity. that after the termination will move from non-underlying to underlying. And so this is going to be a reduction. So we are very confident to make the $115 million. On the other side, the $35 million is not the only element that will play in the bridge.

And thank you for your question. On the cash trading and mathematically, your reasoning is correct. I just want to point out some important elements. In Q1, at the end of Q1, the 23, as mentioned by Giorgio and you mentioned on this call, we did the migration of Borsa Italiana to Optic. And in this situation, we adapted the fee scheme of Borsa Italiana to the Euronext. and we optimize the revenue capture. So the yield difference between Q124 and Q123 is to a large extent not only, but to a large extent explained by the migration of both . Now when it comes to the yield, there are a number of different elements in the yield. On the positive side, if I may say for the yield, but not for the volume, when the volume are low, the yield is higher. So you should not necessarily consider that the yield in a higher volume environment is going to remain at this level or to go. Secondly, as you mentioned, the order size is high, and it remains very high, and it's very difficult to predict where it's going to go. And in this environment, the yield is negatively impacted. However, we did In April this year, a change in the fee scheme of our main fee scheme for large German brokers, whereby we are less dependent to order size than we were before. So it's obviously a positive in the order size are continuing to grow, but also if the order size is going down, then it will be less impactful for Euronext. And lastly, there is also another dynamic, is the relative market share of the different participants, which is fluctuating from one counter to another. Bottom line, in conclusion, I think we should not over-engineer the change of yield moving forward, depending on the average executed order size.

Got it. Very helpful. Thank you.

Thank you. And we'll now move on to our next question from Arnold Gibblot. Your line is open. Please go ahead.

Good morning. I've got three questions, please. Clearly, you had quite some strength at MTS. I'm just wondering how much of the volume surge is linked to the increase in BTP issuance specifically there and Maybe you could give a bit of color whether the activity is mostly primary or secondary. Secondly, I'm wondering on the deleveraging, you've done some progress there, 1.6 times. How are you thinking about capital management? Is a share buyback eventually or other form of capital return? Could that come back on the table? And my third question is on custody and settlement. I'm just wondering if you could give us a bit more color in terms of what the split in revenues looks like between custody and settlement. Is it a typical three-quarters custody, one-quarter settlement? Thank you.

Okay, so I'll take your question on capital allocation. Giorgio will provide you some flavor on the dynamic on the MTS business and particularly in relation to BTP insurance. And Antonia will cover your question on the structure of custodian settlements dynamics. Capital allocation is the output of a decision of a series of decisions related to growth and profitability. And what we are going to do is to build a strategic plan for the three years to come to decide within our governance, the financial requirements and the allocation of resources needed to fund the enables of growth and performance for the group. And we will decide accordingly as a consequence what's the best way to allocate capital. By default, in the absence of any clear new decisions, We intend to continue by default as of today with the current dividend policy. And when it comes to share buyback, again, it's not appropriate to make any decision share buyback now as we have not finalized what would be our investment needs for the years to come. So more on this topic on our investor day on the 8th of November 2024. Over to you, Giorgio.

When it comes to your question on MTS, the first element, Italian government bonds remain a large portion of the volume which are traded on MTS, even though other sovereigns are traded every day on MTS, but the lion's share remains Italian government bonds. The relationship between primary issuance and secondary activity is very linked. New bonds tend to be traded more than old bonds to a certain extent. So answering your question, the revenues are mostly linked to the secondary activity. However, the positive dynamic of issuance triggers a positive impact on the secondary market. However, the market remains very dynamic because as the volume grows then the spread between bid and ask gets tighter and tighter and the cost of getting in and out lowers and this triggers further activity. So this is the dynamic we are seeing at the moment. So good primary issuance is a driver But it is not the main driver of this performance.

Thank you, Jean-Louis. Thank you, Stéphane. On the custody and settlement revenue numbers, so in Q1, as you know, we were up 8.7% on the assets under custody, which is a good progression. And the total number was 67.8 million revenues. We don't provide the exact breakdown following the different activities between custody and settlement, but I can give you some indications. So in the 67.8 million euros of revenues, we have around 60 million that are coming from the core CSD activity in opposition to the added value services. And you can split the evolution between around 50% on the assets under custody, one quarter on the insurance and one quarter on settlement. Thank you.

That's helpful. Thank you very much.

Thank you. And we'll now take our next question from Herbert Lam of Bank of America. Your line is open. Please go ahead.

Hi. Good morning. Thank you for taking my questions. I've got three of them. Firstly, on your deal for GRSS, can you talk a bit more about the deal, how many revenues it will add, and how you expect to grow the business further? The second question is on costs. I know Georgia is not changing the year-end guidance as of now, but obviously in the Q1, you're tracking well below your target. Can you just let us know if there's any investment expense that you have for the rest of the year or seasonality that can drive the costs closer to your target? And lastly, you've had strong growth in both the advanced data services and custody, which you mentioned. Can you talk about the sustainability and the strength in both of these segments going forward? Thank you.

Okay. Giorgio will cover your question on cost and the sustainability of growth on the two growing segments you have mentioned. And Anthony, who runs all derivatives and EDF and EDCs business, will share with you the rationale and the prospect of the integration of GRSS, although we do not disclose numbers at this stage.

Thank you, Stéphane. As Stéphane explained earlier, DRSS is a key provider of benchmark indices across the world, including the Euribor. So for us, it's a strategic acquisition that comes to reinforce and complement our existing index franchise. Our index franchise, as you know, was built on historical indices such as the CAC40 in France or the AIX in the Netherlands. It's been growing over the past few years with bespoke white labeling indices that are used in particular by BISIDE and CELSIDE on ESG topics, so we have developed that very strongly. GRSS is coming as a third pillar. to provide us with contributed indices capabilities. That's a key cornerstone of the development of our index franchise.

When it comes to your question on cost, I'm trying to give you some heads up to help you with the bridge. The underlying cost for the quarter is around 151. Then, as I said, with some releases of around 3.5 million. Then another element that you should consider as well is that the annual review process in Euronext takes place in March, which means that in the first quarter you don't have the impact of salary increases that will touch more the other quarters. And with that, you might add another couple of million euros. And so you see that with all of these adjustments, you get closer to the run rate, which is implied in our target. Then clearly, and you would be correct, there are a number of savings that still we need to deliver, especially the termination of the LCH contract. 35 million run rate, 17.5 million P&L. But to offset that, there are going to be a number of items. First, we highlighted last year our willingness to invest 10 million in organic growth. And then my final remark is that in the non-underlying cost, there are some double run costs. Let me explain for example at the moment. We're running two different Cost base one for the LCH contract and another one to run your next clearing Progressively when we will terminate the LCH contract those non underlying contract Cost will become underlying and these will contribute as well to an increase of the underlying cost. So what I'm trying to say You can see that With the adjustment I mentioned, we would be around 156, 157, and the 17 million of P&L saving on the LCH contract would be largely offset by investment of growth and movement of costs from non-underlying to underlying. So this is a bit the bridge to get to the 625. Absolutely, and then when it comes to the sustainability of growth, in the growth of market data, as we have always said, there is an element of yearly price adjustment and this element is going to remain for the rest of the year. then we will need to see the dynamic of, as usual, of the growth of clients and demand for advanced data services. But again, the key driver for the year is going to be mainly the price adjustment. And when it comes to the sustainability of custody and settlement revenues, here we've seen a positive dynamic so far in the asset under custody. So we remain positive in this respect. Then clearly what we have posted in the first quarter is a very strong growth rate. But again, we remain positive that the growth is going to be such to allow us to deliver the ambition of 2024. Great.

Thank you very much.

Thank you. And we'll now take our next question from Ian White of Autonomous Research. Your line is open. Please go ahead.

Hi there, thanks for taking my questions. Actually, two follow-ups in similar areas. Actually, just on GRSS, just to be sort of clear, I guess I'm trying to understand sort of why it is useful for you to enter the value chain for sort of benchmark administration for benchmarks that I believe are all provided for by your competitors, things like Euribor and Stybor. So can you just help us understand a little bit more about the rationale there? Do you intend to compete, for example, in providing interest rate benchmarks or fixed income indices? Or am I sort of misunderstanding the sort of the rationale for the deal? And just secondly, on advanced data services, can you just call out how much of the growth year over year was driven by sort of growth that might be linked to activity. The release talks about non-professional usage and fixed income and power data versus sort of recurring demand or the price effect that you just mentioned, please. Those are my two questions. Thank you.

So Anthony is going to provide a complimentary comment comments on GRSS business model and fit with the Euronext strategy. And Nicolas Rivard is going to answer your questions on the ADS business.

Thank you, Stéphane. Thank you for your question. Look, GRSS is to be seen as a building block and a capability acquisition to complement our existing index franchise. There are several angles to the answer to your question, but looking first at the value chain, as you know, indices are part of an ecosystem linking with ETF structured product listed derivatives, and in this value chain, is being unlocked also by our CCP expansion. And so we will discuss about how we leverage on these new capabilities and these value chains in the presentation of the new strategic plan in November, but it gives you a flavor of the exploration that we are doing right now, as Stefan mentioned earlier. The other angle is to look at the index business from a critical mass perspective, and as I explained, it's acquiring contributed indices capabilities will help us scaling up our index franchise in the future.

Thank you, Anthony, and thank you for your question on advanced data services. We don't provide quantitative split of the revenue in drivers. in the different sub-businesses or depending on the growth drivers. But let me give you a bit of a qualitative comment. The advanced data service business is composed of real-time market data for all asset classes traded on Euronet, being equity, equity derivatives, fixed income, MTS, power derivatives. And this is by far the largest contributor to ADS top line. And on top of this business line, we have a non-real-time market data revenue, which are composed of a number of analytic products, quant projects, but also indices and so on. The dynamic on the real-time market data is the following. We have first, as mentioned by Giorgio, driver number one is the change of prices at the beginning of the year. This is a classical yearly review LinkedIn. to inflation mainly. And the second element is the positive development on volume for retail investors. We are very proud in Q124 to have more than 4.3 million retail investors using Neuronics data to trade on Neuronics markets, which is a record high. And obviously, the good dynamic on power derivative trading and MTF trading as a positive element, I would say, a positive driver for real-time market data on those asset classes. On the non-real-time and quantitative product, we have good development. We continue to have a good pipeline and good traction of our new product, and we see that it's going to continue moving forward. But again, this is a level two, considering the size of the real-time market data business. Thank you. Got it. Thanks so much.

Thank you. And we'll now take our next question from Pearl Madrid of CIC. Your line is open. Please go ahead.

Yes, thank you. Good morning as well. Two questions on my side. First one back on the margins and this is good momentum on margins. You mentioned some positive one-off. Could you be a bit more specific on that front and what was the size of those one-off and what was the drivers of those positive one-off? And the second question is, I understand, I mean, you've launched commercially, you know, a platform of dark pool recently. I was wondering if you can share to us what impact you will estimate, especially on cash trading. And do you have any target you can share in terms of? where you see market share, for instance, for example, for cash trading, to evolve for you? I mean, I understand it's currently at 64.6% in T1. How do you see that evolving over time? Thank you.

Giorgio will take your question on margins and one-off releases affecting all cost base. And Nicolas Rivard will comment on the dynamic of the Dark Pool project, which is still at an early stage.

Yeah, absolutely. When it comes to the positive one-off, as I said, the Euro amount is around 3.5 million. And this is largely related to the release of a number of small provisions in accrual. I mean, I would just mention too, but it's really the sum of many small items. we have some releases of bed debt provision and some releases of bonus accruals and many others. The sum of these releases is around 3.5 million.

Thank you, Giorgio, and thank you for your question. You're right, on April 8th, we have launched our dark offering on Euronext Optic, on Euronext Data Center in Bergamo, for the client to benefit from the real midpoint price delivered by OPTIC, by our trading platform. The launch is obviously early stage, still recent. We are very happy to have a very strong commitment from clients to join the platform, so we have a good number of clients already live, but more importantly, we have a very important number of clients who are getting ready in the test environment, in the user test environment, to join the production. And what also is important is we have a good mix of large brokers, a good mix of local brokers, and a good mix of service providers who are very important because they are the technology provider for local brokers to join these platforms. So we are very happy with the pipeline of clients, and in the next couple of months we should see a good lineup of clients joining the production. Now to your question, just to give you a few elements. In Q1, we see that dark is now a well-established feature of the European market structure. In Q1 2024, it represented around 9% with up and down of volume on Euronext traded stocks. And this is what we are targeting, right? So we are not We're going to provide a target, but this is the market we are looking for. It's going to be, as you mentioned, a positive on the market share because the official market share we provide to you include dark in the calculation, which we were absent from before April the 8th. That's the second point. And the third point is that thanks to the integration of this dark offering in our OPC platform, we have an interesting functionality which allow brokers to sweep from the dark to the lead so they can first interact with the dark and then move to the lead. And we were absent from this, again, from this offering. And this should have a positive effect on our market share.

All right. Thank you. Thank you.

Thank you. And we'll now move on to our next question from Tom Mills of Jefferies. Your line is open. Please go ahead.

Oh, good morning. Thanks for taking my question. I just had one on a recent announcement by SIBO confirming that they'll launch a European listings venue by year end. I appreciate there's Not a huge amount of detail on that yet, but it seems like they would allow shares to be traded through any of its markets, including the US, potentially adding to liquidity. I guess just given all the noise that's going on around European listed companies at the moment and the attractions that they see in the US market. How compelling a competitor do you think that could be? I guess it's easy to be kind of dismissive around rival listings venues, but it does seem like a more compelling offering than perhaps we've seen in the past. And, you know, how would you think about responding to that? Thanks very much.

It's very difficult for me to comment on competitors' initiatives. at this level of headline announcement. What I can tell you is that we welcome competition. We have been developing the company in a very competitive environment. There was a time when London was a very fierce competitor for international listings. Things have evolved. And over the recent years, the dynamic has changed massively because liquidity goes to liquidity, and what has happened with the consolidation of Euronext is that we now have a liquidity pool which is by far the deepest in Europe with about 10 billion average daily volumes, which is approximately twice the size of the volumes traded on the equity segment in London. aggregate market capitalizations of companies listed on Euronext market on the single liquidity pool, the single order book, the single technology platform amounting to approximately 7 trillion euro which is again more than twice the size of the aggregate market capitalizations of companies listed in London and we have 25% of the shares traded in Europe that are traded on Euronext and we had last year a close to 50% of the IPOs in Europe, and definitely more than 90% of the international listings from the rest of Europe or the rest of the world coming to Euronext. So we are in a totally different situation than the one we were in five or ten years ago, and we are in a totally different situation from the one of our competitors, just because in one asset class, which is equity, which is not the focus of many of our competitors. We have been able, over the past 10 years, to consolidate the market and to make it relevant, attractive, and deep. Now, one of the features of this market is a proper single order book, single technology platform, single liquidity pool. And we do know the difference between secondary trading in geography and another one, and one single other book, which is what we have. And if some of our competitors claim that they can offer liquidity, then transatlantic liquidity, I must tell you that when Euronext was part of the New York Stock Exchange, it was part of the dream and never existed for real. So I want to be clear. We welcome competition. but the full ecosystem and the close relationship between the equity research community, the local brokers, the large global players, is for the moment creating an environment that we see more favorable than the other way around to the growth of our listing business. And, you know, if CVC a few weeks ago decided to list on Euronext, That's probably because they admit their numbers and their strategic assessment of the alternatives. So we are very confident about the growth prospects of our listing business, and we welcome competition wherever it comes from.

Thank you. Thank you.

Thank you. And we'll now take our next question from Julianne. Good morning, gentlemen.

Thanks for taking my question. I have just a follow-up. Frankly, most of the other ones are already explained in detail, but just a follow-up on the fixed income business. I understand this is somewhat linked to the interest rate environment, which is rather elevated. at this point in time. But can you please give us a sense of how do you expect this business to develop over the next quarters in 2024? Just trying to understand, for example, have we reached a peak in revenue generation in Q1? Or is there more upside left to be expected in the next quarters?

I mean, it's a tough question, your question. So what I can say is that clearly we were at... already posting a good performance in the fourth quarter last year. This performance is increasing and as always giving short-term targets for volumes is always complicated. What I can share with you is that the team feels that unless there are significant changes in the environment the type of levels of volumes that we have seen in the last month can be repeated in the following quarter. Then, being more precise than that would be difficult or impossible.

And maybe one entry point, and I cannot provide you numbers, but you can provide, you can get to your own conclusions. MTS was selected as... the electronic platform for the secondary training of the next generation EU bonds. That will represent at the peak a total volume of 750 billion euros of issuance. Most of it has already been issued by the EU, and we are seeing good tractions with the platform. Liquidity on these instruments is moving to MTS, and over time, the monetization of these volumes is going to start in the course of 24. So I think today, when you look at the assets traded on MTS, you have first Italian gobies, then Spanish gobies, then next generation EU instruments. So that's a new area of growth for the platform.

Thank you very much.

Thank you. And we'll now take our last question from Mike Renner of UBS. Your line is open. Please go ahead.

Thank you so much. Two questions for me, please. One, I believe you mentioned this previously, but can you confirm with regards to the timing of the internalization of your derivative clearing and ultimately when you will stop allocating costs to LCHSA on this? When that will happen in Q3? I believe it's at the beginning of Q3, but from a modeling perspective, is it safe to assume it's done in the very early portion of Q3? And then second, I think Q1 is the first full quarter where you've been clearing the cash equities for your business. And I was just wondering if you can get a sense of what the market share has been, i.e., how much of the total volume executed on your markets have been cleared through your next clearing, and maybe how that progressed from when this was first introduced in November last year to today. Thank you.

So when it, I mean, two great questions. I will do my best. So when it comes to the timing, of the migration and therefore stopping paying LCHSA. The best I can tell you is that the contract, the notice period of 18 months, and we have served notice at the beginning of January last year. So this makes, I mean, you can do your own computation, but the timing, the official timing remains Q3. Then when it comes to the market share, I cannot comment further. What I can tell you is that we feel that the full market share that was the LCHSA, now it's fully transferred. It was without leaks.

Thank you. That's helpful.

Thank you. There are no further questions in queue. I will now hand it back to Stefan for closing remarks.

Thank you very much for your time. And as always, our CFO, Giorgio Modica, our head of investor relations and the full team, Aurélie Cohen, and all the teams are available to answer your follow-up questions. Have a good day.

Thank you. Ladies and gentlemen, this concludes today's call. Thank you for your participation. You may now disconnect.