Euronext reports 9.5% Y/Y rise in FX trading revenue for Q4 2022
Pan-European market infrastructure Euronext today published its results for the fourth quarter and full year 2022.
FX trading reported revenue at €6.7 million in Q4 2022, up 9.5% from Q4 2021. Euronext FX trading volumes and revenue continued to benefit from geographic expansion and product diversification, despite softening volatility compared to the start of 2022.
Over the fourth quarter of 2022, average daily volumes of USD 20.2 billion were recorded, up 4.0% compared to Q4 2021.
On a like-for-like basis at constant currencies, FX trading revenue was down 2.2% in Q4 2022 compared to Q4 2021.
FX trading reported all-time record revenues at €28.4 million in 2022, up 21.0% from 2021. Euronext FX trading benefited from the positive momentum with heightened volatility, geographic expansion and product diversification.
Over 2022, average daily volumes of USD 22.5 billion were recorded, up 17.1% compared to 2021.
On a like-for-like basis at constant currencies, FX trading revenue was up 7.9% in 2022 compared to 2021.
Derivatives trading revenue decreased by 5.4% to €13.4 million in Q4 2022 as the volume mix positively impacted revenue capture and partially offset softer volumes in equity futures and options trading.
Euronext revenue capture on derivatives trading was €0.34 per lot for the fourth quarter of 2022, reflecting improved revenue capture across the offering.
On a like-for-like basis at constant currencies, derivatives trading revenue was down 5.3% in Q4 2022 compared to Q4 2021.
In Q4 2022, Euronext’s consolidated revenue and income amounted to €347.0 million, down 6.2% compared to Q4 2021, primarily due to the solid performance of advanced data services and listing activities, offset by lower cash and fixed income trading and post-trade revenue, including net treasury income. On a like-for-like basis and at constant currencies, Euronext consolidated revenue and income was down 6.1% in Q4 2022, to €346.5 million, compared to Q4 2021.
The reported net income, share of the parent company shareholders, decreased by 11.9% for Q4 2022 compared to Q4 2021, to €99.3 million. This represents a reported EPS of €0.93 basic and €0.93 diluted in Q4 2022, compared to €1.05 basic and €1.05 diluted in Q4 2021. Adjusted net income, share of the parent company shareholders was down 18.2% to €118.2 million.
Adjusted EPS (basic) was down 18.0% in Q4 2022, at €1.11 per share, compared to an adjusted EPS (basic) of €1.35 per share in Q4 2021. This decrease reflect a higher number of outstanding shares over the fourth quarter of 2022 compared to the fourth quarter of 2021.
Stéphane Boujnah, Chief Executive Officer and Chairman of the Managing Board of Euronext, said:
“In 2022, Euronext reached record revenue and income above €1.4 billion notably resulting from the strong performance of our non-volume related activities, together with efficient management of revenue capture and of cash trading market share. Thanks to our trademark cost discipline, we beat our 2022 revised costs guidance. We achieved an adjusted EBITDA of €861.6 million that translated into an adjusted EPS of €5.21.
We will propose a total dividend of €236.6 million at our next annual general meeting to be held in May 2023, representing 50% of our reported net income, excluding NTI loss impact.
Euronext Clearing will become the Euronext equity clearing house of choice by the end of 2023, and the CCP for derivatives clearing in Q3 2024. These are the critical bricks to complete our presence across the integrated value chain, allowing us to innovate and shape capital markets in line with evolving client needs, and making Euronext even stronger to deliver future growth.
In an inflationary environment, we will contain our costs to a slight increase in 2023, at €630 million, demonstrating Euronext’s ability to maintain its cost discipline while investing to generate revenue expansion of our non-volume related activities. We expect to deliver by the end of 2023 around €70 million of the synergies targeted as part of our ‘Growth for Impact 2024’ strategic plan.
Our good progress on integration led us to upgrade the total amount of targeted run-rate EBITDA synergies by the end of 2024 from €100 million to €115 million. This further demonstrates Euronext’s successful track record in integrating acquired companies.
Our strong performance, combined with the successful ongoing delivery of the planned synergies, is supporting our deleveraging trajectory with a net debt to EBITDA ratio at 2.6x, well below 3.2x at the time of closing of the Borsa Italiana Group acquisition. This leaves the Group with flexibility to further deploy capital in value generating opportunities that might arise”.