SIX registers 83% drop in net profit in 2021
SIX Swiss Exchange today posted its annual financial report for 2021, with the report revealing a steep drop in net profit.
- Earnings before interest and tax (EBIT) fell to CHF 147.2 million in 2021, down 71.4% from the previous year.
- Group net profit totaled CHF 73.5 million in 2021, down 83.2% from 2020 levels.
- Operating Income amounted to CHF 1,498.3 million, up 8.9% from the preceding year.
- Earnings before interest, tax, depreciation and amortization (EBITDA) totaled CHF 421.7 million, up 14.8% from the prior year.
Despite the improved operating result, EBIT and group net profit substantially decreased compared to the previous year. This was due to two opposing effects from the stake of SIX in Worldline in 2020 and 2021.
In 2020, a partial sale of Worldline shares held by SIX as well as the merger of Worldline with payment services provider Ingenico had a highly positive effect on the 2020 net financial result, increasing earnings before interest and tax (EBIT) and group net profit. In 2021, an impairment resulting from the announced sale of Worldline’s Terminals, Solutions & Services (“TSS”) business negatively affected the share of profit and loss of associates of SIX (CHF -102.1 million).
Compared to the highly positive result of the previous year, EBIT and group net profit saw a strong year-on-year deviation.
Without the Worldline-related effects, Group net profit rose 37.3% compared to the previous year.
For 2021, the Board of Directors recommends that the Annual General Meeting approve an ordinary dividend of CHF 4.75 per share (prior year: CHF 4.30).
SIX continues to pursue its business growth strategy. This will allow SIX to expand its stable infrastructure, to set up new digital infrastructures, and to invest in the security of its systems. Growth is also a prerequisite for successfully operating a platform business. As volumes increase, economies of scale reduce unit costs. By lowering transaction costs within networks and creating new recurring added value for its customers, SIX stays competitive.
For the 2022-2024 horizon, SIX aims to increase its revenues by more than 4% per annum while also realizing efficiency gains and cost reductions. The resulting increase in profitability will further improve the financial flexibility of SIX, ensuring sufficient financing for continuous investments to grow the business and further strengthen the competitiveness of the Swiss and Spanish financial centres.
Revenue increases will come from new services and synergies as a result of the BME acquisition and from leveraging the market position of SIX in the financial information business, particularly by leveraging the acquisitions made in 2021.
Further, SIX will continue innovating to bring new products and services to market, but will also expand its existing offerings by entering adjacent markets. The increase in top-line growth will lead to increased profitability given the extensive fixed costs that are associated with some core business activities of SIX.