Euronext Nv Unsp/Adr

Hello, and welcome to the Euronext First Quarter 2026 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, Stefan Bujna, to begin today's conference. Please go ahead, sir.

Good morning, everybody, and thank you for joining us for Euronext's first quarter 2026 results call. Apologies for this delay of a few minutes. I'm Stéphane Boujna, CEO and Chairman of the Managing Board of Euronext, and I will start with the highlights of this record quarter, and I will provide you with an update on our progress with the Innovate for Growth 2027 strategic plan. Giorgio Modica, the Euronext CFO, will then cover the main business and financial highlights of the first quarter of the year. I'm now on slide four, and I will start with the overview of the first quarter 2026 highlights. I'm very pleased to share that the Euronext has extended its strong growth trajectory. We have achieved an eighth consecutive quarter of double-digit growth across revenue, a double-digit growth across EBITDA, double-digit growth across EPS. The excellent start of the year translated into record underlying revenue and income of 528.5 million, up plus 15.3% year-on-year. Growth remained broad-based and was accompanied by clear operating leverage, or adjusted EBITDA increase faster than revenues to 343.2 million, up plus 16.7%. As a result of all-cause discipline, Euronext adjusted EBITDA margin reach 64.9%, represented 0.8 percentage point improvement compared to the first quarter of 2025, despite continued investment in strategic priorities to build the company fit for the future. Adjusted net income increased by plus 17.7% to 216.1 million. Adjusted earnings per share rose by plus 18.3% to 2.13 euro per share. Underscoring all strong profitability or disciplined cost management and the consistent value creation for shareholders. This remarkable performance demonstrates the resilience of a diversified revenue mix. Non-volume-related revenue accounted for 56% of total revenue and income and increased by plus 13.4% year-on-year. This strong performance was driven by the contributions of admin control, but also the contributions of Euronext Athens, alongside commercial expansion and continued sustainable growth in custody and settlement. We also recorded the best start of the year for primary markets over the past three years. Volume-related revenue increased by plus 17.7%, driven by elevated market volatility, resilient revenue capture, strong market share management, and the contribution of the first full quarter of Euronext Athens, and two very dynamic weeks of power futures. Our underlying expenses, excluding DNA, amounted to 185.3 million euros, representing an increase of plus 12.7%. This cost dynamic reflects our disciplined investments in innovation and talents to support long-term growth and to build the company fit for the future, as well as the impact of recent acquisitions. Year on year, Euronext's average headcount has grown by more than 20% and by nearly 30%, including contractors. Excluding impact from acquisition or underlying costs, however, grew only by plus 5.2%. Net debt to last 12 months adjusted EBITDA stood at 1.1 times at the end of March 2026, placing leverage at the lower end of our targeted range of 1 to 2 times. This level is measured prior to upcoming cash outflows, such as the payment of the dividend in the coming days. As a reminder, at today's annual general meeting, we will propose the distribution of a dividend totaling $321.5 million. This represents an increase of nearly 10% in the dividend compared to last year. Turning to slide five, I will walk you through our latest progress and updates on the delivery of our strategic plan. Because beyond delivering strong financial performance, Euronext delivers strong transformation of its business profile. Since the beginning of the year, we successfully expanded admin controls offering in France, onboarding our first French clients and demonstrating the scalability of this platform beyond its core Nordic markets and the added value of Euronext as an enabler to pan-European growth. At the same time, The product roadmap of Admin Control has accelerated, and Admin Control launched AI-powered search for virtual data rooms, as well as competent assessment models embedded directly within the Admin Control board portal, a first-of-its-kind offering in Europe. The successful launch of Power Futures represents major milestones in the execution of this strategy plan. We are now present in an asset class where we were not present in the past. The transition was executed seamlessly, with 100% of open interest migrated to Euronext. A broad base of market participants were active from day one, demonstrating strong client confidence in this new and large offering of NordPool. Our offering strengthens European energy market infrastructure, supports greater market integration across the continent, and it helps ensure that energy price discovery and risk management remain anchored in Europe. Early trading activity confirms the relevance of the Euronext integrated trading and clearing model, reinforcing our position as the reference and leading marketplace for Nordic and Baltic power derivatives. In April 2026, Athens Exchange Group became Euronext Athens. This marked a key step in the integration of Greek capital markets into Euronext. Euronext also inaugurated a technology and support center in Athens, positioning Athens as a financial and technology hub in Europe and creating more opportunities for group-level cost management efficiency within Euronext. Euronext has confirmed the next step of the integration timeline with the migration to Optic planned in June 2027. Earlier this year, as you may have noticed, MSCI and stocks announced their decision to upgrade the Greek capital market to develop market status. This milestone reflects a strong vote of confidence in the growth trajectory of the Greek capital markets, and it opens positive prospects of development of liquidity within the Greek market. In July 2026, we will offer our clients a fully integrated European repo solution. New international participants, including European banks, American banks, and debt management offices, are joining Euronext Clearing for repo clearing services for the first time. In parallel, more than 30 existing clearing members are expanding their scope beyond Italian debt to all European sovereign debt. Euronext will further enhance the platform with the introduction of an efficiency or an efficient sponsored access model for buy-side clients. This will complete the delivery of a fully competitive offering for repos. Our CSD expansion is showing real momentum. As announced previously, in September 2026, Euronext Securities will become the CSD of reference for equities and ETFs in Belgium, France, and the Netherlands. complementing the existing markets in Denmark, Greece, Italy, Portugal and Norway. In December 2025, we announced significant partnerships with the leading issuing agents in Belgium, France and the Netherlands. These partnerships are absolutely essential to shift issuance and custody to our new, fit-for-the-future European CSD solutions. Thanks to those partnerships, additional issuers have committed to transfer their issuance to Euronext Securities, and we have recorded the first listing on Euronext Amsterdam directly issued on Euronext Securities. Now things are getting real and things are accelerating. Four months prior to the launch, leading custodians confirmed they are supporting the model and that they are actually getting ready to connect their clients to Euronext Securities. We are building this model together with all clients, together with the leading custodians. We have received significant support for the initiative from clients such as BNP Paribas, Citi, and Credit Agricole Cassez. September 2026 marks the start of a scalable and efficient European post-trade model that will generate long-term value for issuers and investors, and we are doing it together with the custodians and together with the issuance agents. We continue to invest in growth and maintain a very strong financial position. In January 2026, we completed the 250 million share repurchase program announced in November 2025. We have secured refinancing until 2028, including the repayment this week of the remaining portion of our 2026 bonds. As at the end of March 2026, Our cash position exceeded $1.7 billion, and our leverage ratio stood at 1.1 times net debt to adjusted EBITDA. At the lower end of our targeted range, this financial strength provides us with significant strategic flexibility for the coming quarters. I will now hand over to Giorgio for the business and financial review of the first quarter of 2026.

Thank you very much, Stefan, and good morning, everyone. Let's now focus on the drivers of this strong start of the year. I'm now on slide seven. This quarter will deliver record results and double-digit growth in non-volume-related activities, trading, and clearing. Total revenue and income in Q1 2026 reached €528.5 million, up 15.3% compared to last year. 56% of revenue and income was non-volume related, despite the strong volatility. This is part of our revenues, covered 159% of our underlying operating expenses, excluding DNA. Let's take now a closer look at the key drivers behind this continued growth trajectory, beginning with non-volume-related revenue and income on slide 8. Starting with security services, security service revenue reached €91.6 million in the first quarter of 2026, a solid 9.8% increase compared to the first quarter of 2025. Custody and settlement revenue grew by 11.4% compared to the first quarter of 2025 to 84.4 million euros. This steady performance was driven by the growth of assets under custody, which reached 7.6 trillion euros in March 2026, up 7.1% year-on-year, and dynamic settlement instructions. The growth was also supported by the first full quarter contribution of Euronext Securities Athens. Other post-trade revenue declined by 6% compared to the first quarter 2025 to 7.2 million euros. This decrease is mainly due to the migration in June 2025 of Italian markets to our harmonized clearing framework, offering clients both cost savings and more efficient and resilient clearing systems. Net treasury income was down 11.6% compared to the first quarter of 2025. This decrease is mainly due to the migration of the Italian markets to the new clearing framework, offering clients margin efficiencies. As a reminder, the positive impact from PowerFuture on net treasury income is not fully captured this quarter as the migration happened only in mid-March 2026. Turning to capital markets and data solution on slide 9, revenue reached €185.9 million, marking an 18.2% increase compared to the first quarter of 2025. Primary market generated 52.3 million euros of revenues, up 12.8% compared to the same quarter last year. Our listing business delivered the best first quarter in three years in terms of new listing activity, despite the volatile market environment. The performance was supported by solid fall-on activity, strong growth in ETF and the contribution of Euronext Athens. Advanced data solution revenue grew to 69.3 million euros, up 6.5% compared to Q1 2025. This resilient growth highlights the strong retail demand the ongoing monetization of our diversified data set and the contribution of Euronext Athens. The number of retail investors looking at Euronext data has doubled in two years and the momentum is not slowing down, signaling a revival of retail investor engagement in Europe. Corporate and investor solution and technology services reported 64.3 million euros of underlying revenues in the first quarter of 2026, up 40.1%. This remarkable performance reflects the integration of admin control and Euronext Athens, along with the continued rapid expansion of Euronext co-location and logical access services and investor solution. Finally, as we discussed last quarter, the recognition of admin controls contract liability under IFRS 3 led to a 1.8 million reduction of reported revenues with no impact on cash flows. As a reminder, this impact of 0.6 million per month ran until May 2026, which is 12 months after the closing of the acquisition of admin controls. Moving to our volume-related activity now on slide 10. Revenue from FIC markets reached 95.5 million euros, delivering a 5.3% increase compared to the first quarter 2025. Fixed income and trading and clearing revenue grew by 0.3% to €52 million. The slight reduction of MTS cash volumes is mainly linked to the impact of the conflict in Iran, which triggered a temporary widening of the bid-offer spread. This trend seems now fully reversed in May, 2026. Further positive notes for the quarter are the triple-digit growth in volume from Portugal and Spain, improving the geographic diversification of our fixed income business, the strong growth of D2C, and the very dynamic retail participation. Commodity trading and clearing revenue increased 13.9% to 33.8 million euros in the first quarter of 2026. This performance was supported by the continued growth in intraday and day-ahead volumes and two weeks of contribution of our new Nordic Power platform. future business. FX trading reached 9.8 million euros, up 5.8% compared to the first quarter of 2025. This performance is the result of record volumes in FX and precious metal trading supported by higher market volatility, while the softening of the US dollar against the euros negatively impacted our revenues in euro. Like for like and at current currencies, revenue increased by 17.5%. Continuing with our review of volume-related revenue on slide 11, equity market revenue increased 28.1% compared to the first quarter 2025, reaching 138.9 million euros. Cash equity trading and clearing revenue grew 30.8% compared to the first quarter 2025, reaching 123 million euros. Average daily volumes traded on Euronext's cash market increased to 16.6 billion euros with an 18.8% year-on-year increase on a performer basis including ATEX. This quarter, Euronext reached an average revenue capture on cash trading of 0.51 basis point. Euronext's market share on cash equity averaged 64.1%. The performance this quarter was also supported by a strong contribution from Euronext Athens. Lastly, financial derivative trading and clearing revenue was at 15.9 million euros, a 10.8% increase compared to the first quarter of 2025. This robust performance reflects strong revenue capture and the contribution of Euronext Athens. Moving now on with the EBITDA bridge on slide 13. Euronext reported EBITDA for the quarter grew by 15.2% to 339 million euros, mainly thanks to 34.8 million euros of organic revenue growth at constant currencies and 36.2 million euros of additional revenues from Euronext Athens and admin control. This was offset by 8.45 million euros of additional cost at constant perimeter and 13.9 million euros from change of scope. Euronext reported 2.4 million euros of non-underlying expenses in Q1 2026. Around Half of this amount relates to the integration cost of Admin Control and Neuronext Athens and the reminder to other non-underlying costs for the quarter. In total, non-underlying revenues and expenses excluding DNA accounted for €4.2 million. Euronext adjusted EBITDA for the quarter grew 16.7% to €343.2 million, with an adjusted EBITDA margin of 64.9%, up 0.8 points compared to the first quarter of 2025. Moving to net income, on slide 14, adjusted net income this quarter reached 216.1 million euros. Depreciation and amortization increased by 1.9 million euros, up 4% with respect to the first quarter of 2025. This increase is mostly explained by the contribution and inclusion of the PPA related to a mean control. Net financing expenses increased by 5.1 million euros. 1.7 million euros of this increase are non-cash interest expenses related to the convertible bond issued in May 2025, while the rest is mainly linked to the refinancing of our bonds due in 2025 and 2026. I remind you that there are no further maturities until 2028. Income tax increased by 6.8 million euros as a result of the higher profit before tax this quarter. The effective tax rate decreased to 26.4% for the quarter. Share of non-controlling interest increased by 3.6 million euros, mostly due to the strong performance of Norpool and the consolidation of Euronext Athens. As a result, the reported net income share of parent company shareholders reached 192.3 million euros in the first quarter of 2026, up 16.7% compared to the same quarter last year. Moreover, adjusted EPS was at 2.13 euro per share this quarter, up 13.8% compared to the same quarter last year. Reported EPS was at 1.9 euro per share, up 17.3% compared to Q1 2025. I conclude with cash flow generation and leverage. I'm now on slide 15. In the first quarter of 2026, Euronext reported a net cash flow from operating activities of 499.8 million euros compared to 190.6 million euros in the first quarter of 2025. This increase reflects higher profit for tax and a strong change in working capital in Q1 2026 at 183.4 million euros versus minus 37.4 million euros in the first quarter of 2025. Excluding the impact from the change in working capital, net cash flow from operating activities accounted for 107.6% of EBITDA in the first quarter of 2026 versus 88.1% in the same quarter last year. Net debt to EBITDA ratio was at 1.1 times at the end of the quarter. This ratio is prior to the payment of the $322 million dividend in May 2026, in the next coming days. The second installment payment of $89.3 million to NASDAQ for the migration of Power Future, which happened in April 2026. includes a very high level of cash in transit at Norpool. And with this, I now would like to give back the floor to Stefan.