Euronext NV announced today its results for the full year 2006. They are the strongest ever. As already reported, the Euronext revenues reached an all-time record of €1,102m, an increase of 14.6% compared to last year. The increase is mainly explained by the ongoing positive market conditions for nearly every business unit.
Operating expenses grew by 7.7% during the period mainly due to the advisory costs linked to the corporate deals, which totalled €47.6m since the beginning of the year.
As a result, the profit from operations reached €409.0m, i.e. an increase of 28.4% compared to the previous record level in 2005 and the EBITA margin stood at 37.1%, a substantial improvement compared to 33.1% in 2005 on a restated basis. Excluding above advisory costs, EBITA and EBITA margin would have respectively amounted to €456.6m and 41.4%.
The net financing income remained stable year on year at €11.5m despite €445m paid in dividend and repayment of capital in the middle of last year. As reported earlier in 2006, a capital gain of €15.5m was booked in relation to the sale of CIK to Euroclear as of 1 January 2006. Finally, the income from associates was multiplied by 2.9 between 2005 and 2006, driven by the performance of LCH.Clearnet (€36.9m) and AEMS (€15.4m).
During the period, the profit before tax amounted to €489.6m, up 37.0% year-on-year and the net profit jumped by 50.8% (compared to its restated level in 2005) from €240m to €361.8m. On a per share basis, the diluted earnings stood at €3.23, +49.4% compared to diluted EPS at the end of 2005.
Staff costs were up 4.2% from €264.4m to €275.4m year on year. The increase is mainly due to the provision for bonuses, which has increased in relation to the higher profitability generated during the year and a one-off cost paid during the first quarter for the transfer of Necigef staff to Euroclear. Full Time Equivalents of Euronext excluding GLTrade totalled 1,169 on 31 December 2006, down 50 compared to the same date in 2005, while the number of GL Trade employees in FTE increased from 1,083 to 1,155 during the same period of time.
IT costs increased from €139.8m to €166.2m reflecting the full year effect of the deconsolidation of Liffe Market Solutions (LMS) in July 2005. Prior to the transfer of LMS to AEMS, most of the IT costs were booked in staff costs and depreciation.
Office, Telecom and Consultancy amounted to €130.1m in 2006 compared to €98.8m in 2005. These costs included the advisory costs paid in relation to the corporate deals, which represented a total amount of €47.6m in 2006, and €17.3m in 2005. Restated from these advisory costs, OTC costs would have increased by only 1.2% on a yearly basis.
Accommodation costs were reduced by 11.5% from 2005 to 2006 at €44.4m as a result of the sale of CIK, the move to a new building in Lisbon and the transfer of LMS to AEMS.
"¢ Revenues: €1,102.2m up 14.6%
"¢ Costs: up 7.7%, including corporate deals costs (€47.6m)
"¢ EBITA: €409.0m up 28.4%, margin of 37.1%
"¢ Net Profit: €361.8m up 50.8%
"¢ Increase of the diluted EPS by 49.4%, at €3.23
"¢ The tender offer has been opened from 15 February until 21 March -- www.euronext.com
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