Euronext: 1Q24 Earnings Beat Expectations
Strong start of the year driven by organic growth and continued cost control.
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Two days ago I had posted the deep dive on Euronext, as I want to had it published before they came with their 1Q earnings after market close. The earnings were very strong and above market expectations. I will compare my expectations for the full year with the earnings published by Euronext for the first quarter:
Revenue growth of 8% versus 5% forecasted for the full year
Adjusted net income growth of 11,7% versus 11,8% forecasted for the full year
Clearing revenue expected to grow with more than +20% came in at +23%
Actual market share cash trading in 1Q24 at 64.6% versus a minimum of 63.0%
Today also Bank of America updated their price target towards EUR 105.00, which is just above my calculated price of EUR 101.50. I never update my models after a quarer update, only half year or full year (if necessary).
In case you have missed my full analysis on Euronext: Euronext Deep Dive
Here is a quote from Euronext CEO Boujnah on their first quarter earnings:
“In the first quarter of 2024, Euronext reached record revenue and income of €401.9 million. Strong organic growth in our non-volume related businesses, combined with record quarter in fixed income and power trading and double-digit growth in our post-trade activities, drove the Group revenue's growth to +8.0%.
Combined with our trademark cost discipline in an inflationary environment, this record performance led to a +15.0% increase in adjusted EBITDA, to €251.3 million, and to a 62.5% adjusted EBITDA margin.
Our reported net profit grew +44.8% to €139.7 million as a result of this strong performance and of the positive base effect of the provision related to the termination fee of the clearing agreement in Q1 2023. Adjusted net profit grew +11.7% to €164.2 million, and adjusted EPS reached €1.58, representing a +15.0% increase from last year.
We continued to work on the delivery of our ‘Growth for Impact 2024’ strategic plan and we reached €79 million of cumulated run-rate EBITDA synergies in relation with the acquisition of the Borsa Italiana Group at the end of the first quarter of 2024. We have successfully completed in March the migration of Italian derivatives trading to Optiq®, the third and final phase in the migration process of Borsa Italiana's markets onto Euronext’s proprietary trading platform. The final step of the integration will be delivered in the third quarter of 2024 when we will expand the operations of Euronext Clearing to Euronext European listed derivatives to complete our presence on the entire trading value chain. This milestone will be the final step to reaching the targeted €115 million of run-rate EBITDA synergies by the end of 2024.
We strengthened and broadened our data and indices offering with the acquisition of Global Rate Set Systems (GRSS). GRSS is a leading provider of services to benchmark administrators and has a strong track record of continued revenue growth and high-quality service. We are glad to welcome the GRSS teams, to work together to take GRSS to the next step and further globally expand Euronext’s index capabilities. Meanwhile we continue to work actively on the preparation of our 2024 Capital Market Day that will be take place on 8 November 2024 in Paris.”
Source: Euronext 1Q24 Earnings
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