Euronext Earnings: Strong Fixed-Income Performance Drives Good Quarter for Trading Segment

Euronext reported a good fourth-quarter 2023. After weaker performances in its trading business through most of 2023, the European exchange benefited from an exceptionally strong performance in fixed-income trading, driven by higher interest rates and market volatility. Fixed-income trading grew revenue in the quarter by 39% on a like-for-like basis. Power trading also contributed positively, with revenue up 31% on a like-for-like basis, driven primarily by higher volumes traded in the quarter. Other positive performances in the quarter were good activity in clearing and higher assets under custody driving custody and settlement revenue. In sum, revenue and income grew 8% to EUR 374 million in the quarter from a year ago. Underlying operating expenses were flat as Euronext achieved good cost-controls, offsetting inflationary pressures. We maintain our EUR 88 per-share fair value estimate and narrow moat rating.