Tough market conditions see Euronext sales dip in Q1

Pan-European exchange operator sees 2.7% fall in revenue but cost savings deliver higher margin.

Euronext has seen a dip in revenues in Q1 2016, saying it has been resilient in the face of turbulent market conditions.

Sales fell 2.7% year-on-year to €126.5 million, though the firm also made a considerable reduction in its operating expenses of 12.1% to €54.7 million. The net result was an improved EBITDA margin of 56.8%, up from 52.2% in the same quarter of 2015.

Operating profit also increased, up 7.6% to €68 million and net profit amounted to €48 million, flat compared with Q1 2015.

Listings, cash and derivatives trading revenues all fell, with cash trading making up the bulk of the reduction in sales. The business saw revenues of €49.1 million in Q1, down 5.7% from €52.1 million a year ago. Average daily volumes on the cash market fell 4.4% to €8.3 billion.

Listings revenue fell 7.4% to €14.2 million, while derivatives trading dropped 2.2% to €11 million.

Euronext’s post-trade businesses fared far better, with its clearing reporting an 11.2% in Q1 revenues to €13 million, though settlement and custody sales from Interbolsa in Portugal fell 4.5% to €4.8 million.

Market data revenue also increased, up 6.7% year-on-year to €26.2 million.

Stéphane Boujnah, chairman and CEO of the managing board of Euronext NV, said: “Despite turbulent market conditions, Euronext has continued to improve its EBITDA margin thanks to the Company’s ongoing cost discipline.

“These results once again demonstrate the resilience of Euronext business model. Tomorrow, we will present our strategic plan till 2019. It will reinforce our commitment to maintain robust cost control while increasing emphasis on selected growth initiatives in order to deliver more value to all our clients.”

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