Euronext Nv Unsp/Adr

Hello and welcome to the Euronext Fall Year 2025 Results Conference Call. On today's call, we have Stefan Bujna, CEO and Chairman of the Managing Board, and Giorgio Modica, CFO. Please note this conference is being recorded, and for the duration of the call, your lines will be on listen only. However, you will have the opportunity to ask questions at the end of the call. This can be done by pressing pound key 5 on your telephone keypad to enter the queue. I will now hand you over to your host, Stephan Boujna, to begin today's conference. Please go ahead, sir.

Good morning, everybody, and thank you for joining us for the Euronext fourth quarter and full year 2025 results call. I am Stephan Boujna, CEO and Chairman of the Managing Board of Euronext, and I will start with the highlights of this record here, and I will provide you with an update and all progress with the Innovate for Growth 2027 strategic plan. then Giorgio Monica, the Euronext CFO, will cover the main business and financial highlights of the fourth quarter. I'm now on slide four, and I will start with the overview of the full year 2025 highlights. I'm extremely pleased to share that Euronext delivered double-digit growth in revenue, double-digit growth in EBITDA, and double-digit growth in earnings per share. First, in 25, Euronext delivered another year of double-digit growth in underlying revenue and income that grew by 12.1% to more than 1.8 billion. Or adjusted beta margin increased by 0.8 points compared to 24 to 62.7%. It is worth noting that Q4 2025 was also the seventh consecutive quarter of double-digit top-line growth. This remarkable performance proves the resilience of the diversified business mix that we have built over the past few years. Non-volume-related revenue made up 59% of total revenue and income and posted a plus 10.9% increase compared to last year. This strong performance of non-volume-related revenue was driven by sustainable growth in custody and settlement and the contribution of admin control. But volume-related revenue also grew, and it was up plus 13.9%, fueled by double-digit growth in fixed income and commodities trading and clearing. Euronext also continues to record robust volumes and revenue capture in cash equity trading and clearing, driven revenue up plus 11.5% year-on-year. When it comes to our cost base or underlying expenses, including ENA, we're at 680.1 million, up plus 9.6% compared to 2024. The increase reflects all consistent growth in investments, in innovation, and in human capital, and obviously the impact of the acquisitions of Admin Control and ATEX Group in Greece that joined the group in 2025. All adjusted EBITDA grew by 13.6% compared to last year, reaching 1.1 billion. This was another year of double-digit growth in EBITDA. Adjusted net income was 736.5 million, up plus 7.9%. Adjusted EPS was 7.27 euro per share, up plus 10.3%, another year of the budgetary growth of the EPS. Net debt to last 12 months adjusted EBITDA was at 1.5 times at the end of December 2025. This leverage is in line with our target range of one to two times. So robust performance, robust balance sheet management. At the annual general meeting, we would propose a dividend for a total amount of $321.5 million. And this represents an increase of almost plus 10% compared to last year. Let's move to slide five, which is a great illustration of how we deliver solid growth in all business segments. Securities and services revenue increased by plus 6.9% compared to 2024, boosted by sustainable growth in custody and settlement. And this growth is continuing into 2026. We reached a new record level of 7.9 trillion euros in assets under custody in January 2026. Capital markets and data solutions underlying revenue increased by plus 12.1%, boosted by the acquisition of admin control. Our volume-rated revenue also grew at an equally fast pace, with great performance, especially in fixed income, power trading, and cash-in-the-trade. Overall, we saw double-digit growth in almost every area, in almost every segment of our businesses. even before the delivery of the key milestones of our Innovate for Growth 2027 strategic plan. In 2025, as you may have seen, we have started the implementation of our strategic plan with a very strong execution discipline. Over the course of the year, we have imported talents that will allow us to sustainably transform our growth profile. We have invested in technology platforms that are required to deliver the objectives of the strategy plan. So in May 2025, we completed the acquisition of Admin Control, a European SaaS provider. Admin Control is focused on European sovereignty, security, simplicity, and local expertise. In January this year, just seven months after the acquisition of Admin Control, we expanded the offering of Admin Control to France, and we have started to onboard the first clients in France. In September 2025, we successfully launched the first integrated ETF market in Europe. to address strong demand from large clients and global clients in the ETF sector. This strategic initiative allows us to benefit from rapid growth of this asset class across the value chain. Maturonix will accelerate the execution of the strategic plan in 2026. In March 2026, just a few weeks from now, we will expand our commodities business with the addition of PowerFuture, We already saw market confidence building up at the expansion in this new segment, with significant volume growth across power trading, especially in intraday trading. Our CSD expansion project is also proceeding extremely well, with significant support from clients. In December 2025, we announced partnerships with the leading insurance agents in Belgium, France, and the Netherlands. These partnerships are absolutely essential to shift issuance and custody to the European CSD solution of Euronext. Thanks to those partnerships, the first issuers have already committed to transfer their issuance to Euronext Securities. And in September 2026, later this year, Euronext Securities will become the CSD of reference for four major European markets. France, Italy, Belgium, and the Netherlands, both for equities and ETFs. By June 2026, we will offer our clients also a fully integrated, truly European repo solution. We have invested in growth and we have maintained a very strong financial position and a very strong EBITDA margin. At the end of 2025, our cash position exceeded $1.5 billion. our leverage ratio was within our target range of 1.5 times that debt to EBITDA. We secured refinancing until 2028 with a tender offer and partial early payment of the Euro 2026 bonds and the successful issuance of 600 million bonds under favorable conditions. In November 2025, we launched a share repurchase program of 250 million, which we completed in January 26. In November 2025, we announced the successful outcome of the voluntary exchange offer for ATEX Group, the L&E exchange in Athens. This is a new milestone to proceed towards the consolidation of capital markets in Europe to build the backbone of the saving and investment union for real. The new Board of Directors was appointed in January, and integration has now truly started. We expect to deliver 12 billion of annual cash synergies by the end of 28, through the migration of grid trading to optic trading platforms and the harmonization of central functions, but also through the expansion of various top-line initiatives. ATEX Group delivered a very strong 25. We continue to see the dynamic growth in Greece of both ATEX as a company and the Greek economy at large, with average daily traded volumes twice larger in January 26 compared to January 25 to 412 billion of average daily volumes. And as I was very pleased to announce the opening of the support technology center in Athens from 2026. This is an important initiative similar to the type of ambition we deployed back in the days in Porto when we started with the development of our technology center in Portugal in 2016. This new platform will develop in the upcoming months and years to support the expansion of the Euronext Group. I will now hand over to Giorgio for the business and financial review of Q4 2025.

Thank you Stefan and good morning everyone. Let's now turn the strong financial performance on the fourth quarter of 2025. I am now on slide 9. This slide is an excellent demonstration on how well diversified our business is today. In the fourth quarter of 2025, our volume-related and non-volume-related revenue Both grew double digits. Total revenue and income in Q4 2025 reached €460.8 million, up 10.8% compared to last year. 60% of our revenue is today non-void related. This part of our revenue covers 157% of underlying operating expenses, excluding DNA. Let's take a closer look at the key drivers behind this performance, beginning with non-volume-related revenue and income on slide 10. Starting with security services, revenue was at 83.9 million euros, marking a solid 8.1% increase compared to the Q4 2024. Custody and settlement revenue reached 76.7 million euros a 9.6% increase compared to the fourth quarter of 2024. This strong performance was driven by continued growth in asset under custody, which reached 7.6 trillion euros in December 2025. This sustained growth was also supported by resilient settlement activity and double-digit growth of value-added services. Other post-trade revenue declined 6.3% compared to the fourth quarter of 2024, to 7.2 million euros. This follows the migration of the Italian market to a harmonized clearing framework. Net treasury income was down 19.4% compared to Q4 2024. This decrease reflects lower average collateral costs to the CCP, One-off interest adjustment and the migration of the Italian market for a more efficient clearing framework as of the end of June 2025. Turning to capital market and data solution on slide 11. Revenue reached €178.2 million, reflecting a 15.8% increase compared to Q4, 2024. Primary market generated 48.1 million euros of revenue, up 6.2% compared to the same quarter last year. The performance is supported by dynamic listing activity, Euronext growing ETF business, and the contribution of ATEX. Euronext sustained its leading position for equity listing with 16 new listings in the fourth quarter of 2025. Advanced data solution revenue grew to 67 million euros, up 8.1%, compared to the fourth quarter of 2004. This strong performance reflects growing client demand for diversified data sets and increased interest from retail clients. It also reflects a catch-up in audit and compliance fees. I would like to take this opportunity to remind you that our data revenue is mostly coming from the monetization of raw proprietary data and a leading space on those data. Client interaction on Euronext technology creates a unique order book data. This data is unique to Euronext. It is used in real time to make trading decisions. And it is time critical and mandated for regulatory compliance, such as best execution, surveillance and reporting. This data cannot be replaced by AI. This is an important message. Corporate and investor solution and technology services reported 63 million euros of revenues of underlying revenue. in the Q4 2025, up 35.2%. This outstanding performance reflects the integration of admin control, continued expansion of Euronet's co-location services, and the contribution of the ATEX Group. In this part of our business, we see an increasing interest for clients who seek secure and sovereign European solutions. Moving to our volume-related activities now on slide 12. Revenue from thick markets reached 82.6 million euros, marking a 9% increase compared to Q4 2024. Fixed income trading and clearing grew by 11% to 46.3 million euros, driven by strong volumes. MTS cash average daily volume credit was up 26.3% year-on-year to 49.8 billion euros. MTS repo thermal adjusted average daily trading volume reached 531.3 billion euros up 2.9%. These results are also supported by the expansion of the dealer to client segment and in terms of... Commodity trading and clearing revenue increased by 12.8% to 28.8 million euros in the fourth quarter of 2025. This reflects a strong performance of power trading, supported by continued double-digit growth, as Stefan said, in intraday volumes. The fixed trading revenue reached 7.4 million euros, down 12.7 compared to the fourth quarter of 2024, reflecting lower volatility and the negative currency impact from the US dollar. Like for like and at constant currencies, revenue decreased only by 4.7%, despite a 9.3% decrease in volumes. Continuing with our volume-related revenue on slide 13. Equity market revenue showed double digit growth with 12.8% increase compared to the fourth quarter of 2024, reaching 101.6 million euros. Cash equity trading and clearing revenue grew by 15.7% compared to the fourth quarter of 2024, reaching 89.4 million euros. This growth reflects a 14% increase in average daily volume traded on Euronext market to 12 billion euros. This quarter, Euronext reached average revenue capture on cash trading of 0.52 basis points. Euronext market share on cash equity averaged 64.2%. I would like to highlight that those business KPIs do not include the ADEX group. In addition, this performance is also supported by a 3.7 million euros contribution from the ATEX Group. As Stefan mentioned, the volumes of the Greek market continue to show a very strong dynamic. The ATEX Group volume will be included in our monthly statistics starting from next month. Lastly, financial delivery, trading and clearing revenue was at 12.3 million euros, a 5% decline compared to the same quarter last year. This decrease mostly reflects the continued low volatility environment for this asset class. Moving on with the EBITDA breach on slide 15. Euronext reported EBITDA for the quarter grew 8.1% to 260.8%. million euros, thanks both to organic and external growth. In particular, in the fourth quarter of 2025, we reported 26.6 million of additional revenue and 20.7 million euros of additional costs at 4.3 million. In addition, the acquisition of admin control and the APEC group contributed 19.6 million of additional revenue and 10.9 million euros of additional costs. I would like to share with you some considerations on the revenues and costs from acquisitions. With respect to revenues, I would like to highlight that the growth of Olifida was impacted by 4.4 million euros of non-underlying revenue from Admin Control. As a part of the two-phase price allocation of annual withdrawal finalized during Q4 2025, we adjusted the value of the fair revenue with a non-cash and one-off impact in the P&M. This resulted in a reduction of €4.4 million in reported revenue this quarter and we expect an additional €2.6 million reduction until mid-May 2026. No further impact is expected beyond 12 months after the closing of the acquisition. I would like to stress that these IFRS 3 adjustments do not affect cash or cash flow. With respect to the cost, it is important to note that the cost of the ATT&CK Group for the last five weeks of 2025 do not represent a run rate for 2026. While at main control, we've been investing to scale the business across Europe in line with our acquisition ambitions. In total, non-underlying revenue and expenses, excluding DNA, accounted for 14.2 million euros. Neuronext adjusted EBITDA for the quarter grew 8.9% to 275 million euros, with an adjusted margin of 59.7%, down one point compared to the same quarter last year. Moving to net income on slide 16, adjusted net income this quarter reached 179.6 million euros. We have already commented on EBITDA growth in the previous slide. The result from equity investment increased 0.8 million euros Euronext received 10.9 million euros of result from equity investment in the fourth quarter of 2025, reflecting mostly the dividend from SICOBAN. Depreciation and amortization increased 4.6 million in the fourth quarter of 2025, and 9.3% more than in the same quarter last year. This increase is mostly explained by the inclusion of the BPA related to unmean control from this quarter. Net financing expenses decreased 10.8 million euros. The variation reflects decreasing interest rate and the completion of the financing program for the 2025 and 2026 maturities. No more refinancing will be needed until the end of this strategic plan in 2027. Income tax increased 1.3 million euros. This translated into a stable effective tax rate of 26.7% for the quarter compared to 26.6% in the fourth quarter of 2024. Share of non-controlling interest increased to 3.5 million euros as a result of the strong performance of MTS and Norpool. As a result, the reported net income share of the parent company shareholders reached 144.7 million Moreover, adjusted EPS was at 1.77 euro per share this quarter compared to 1.66 euro per share in the same quarter last year. Reported EPS was at 1.42 euro per share. Now I move to the next slide for the outlook of cost for 2026. In 2025, Euronext reported underlying expenses excluding DNA in line with the revised guidance of €660 million. This is €10 million less than the initial guidance of €670 million, thanks to our continued cost discipline. In addition, admin control and APEX contributed for 20 million operating expenses in 2025, bringing the total underlying expense and excluding DNA for 2025 to 680 million euros. In 2026, we expect the total underlying expenses excluding DNA to be around 770 million euros. We expect 2026 underlying expenses excluding DNA to be stable at around 720 million euros compared to the four-quarter 2025 annualized expenses, excluding the contribution from ATEX Group. In addition, we expect around 35 million of operating expenses from the ATEX Group, and we plan to invest around 15 million of underlying expenses to deliver strategic growth projects. I continue with cash flow generation, and I move now to slide 18. In the fourth quarter of 2025, Euronext reported a net cash flow from operating activity of 85.5 million euros, compared to 175 million in the fourth quarter of 2024. This decrease mostly reflects the negative impact of working capital from Euronext clearing and not to CCP activities, in the fourth quarter of 2025. Excluding this impact from working capital, net cash flow from operating activity accounted for 60.3% of EBITDA in the fourth quarter of 2025. In November 2025, we took advantage of the positive condition to anticipate the refinancing until 2028. We successfully issued 600 million new bonds rated a minus with a maturity of three years. In parallel, we performed a tender offer on our existing 600 million euros bond maturing in May 2026. As a result of this transaction, only 385.5 million euros of our existing 2026 bond remain outstanding and will be redeemed at maturity. Net debt to adjusted EBITDA ratio was at 1.5 times at the end of the quarter in the middle of our targeted range. This is despite the completion of the majority of our 250 million euros share purchase program still in the fourth quarter of 2025. And with this, I conclude my presentation and I give the floor back to Stefan.