Euronext lifts revenue target in new three-year plan
Euronext lifts revenue, core profit growth target to 5%-plus
Third-quarter profit beats forecasts at 159.5 million euros
Announces 300 mln euro buyback, lays out diversification plan
Adds details throughout, CEO quotes
By Alban Kacher, Mathieu Rosemain and Tommy Reggiori Wilkes
PARIS/LONDON Nov 7 (Reuters) -Euronext ENX.PA raised its revenue targets through to 2027 on Thursday and pledged to diversify its business further away from traditional stock trading, as it reported a slightly better than expected third-quarter profit.
The pan-European stock exchange also announced a share buyback programme of up to 300 million euros ($324.33 million), to be launched on Nov. 11.
Unveiling a new three-year strategic plan, Euronext said it expected its revenue and core profit to grow by more than 5% a year on average until 2027 and that it would aim for capital expenditure of between 4% and 6% of total revenue over that period.
"We have demonstrated our ability to diversify and to grow through the cycle," CEO Stéphane Boujnah said on a media call, noting that nearly 60% of Euronext's revenue is now non-volume related, up from about 44% in 2014 when Euronext listed.
"But the company is clearly less diversified than it will be in three years' time," Boujnah said, pledging to grow in post-trade, data-related services, as well as in fixed income and power trading.
Euronext's Nord Pool power market would be a "significant" contributor to the company-wide revenue target, he said.
The exchange had announced its previous strategic plan in November 2021. It then targeted compound annual revenue growth of between 3% and 4% for 2020-2024 and EBITDA growth of between 5% and 6% over the same period. It also forecast CAPEX of between 3% to 5% of total revenue.
These targets were completed in the third quarter, three months ahead of guidance, the exchange said.
Euronext confirmed ruling out a bid on Allfunds ALLFG.AS in the foreseeable future, "because the company as it stands today doesn't meet the standards of our investment policy," Boujnah told Reuters, adding the group remains open to selective acquisitions.
Euronext operates exchanges in Amsterdam, Brussels, Dublin, Lisbon, Milan, Oslo and Paris.
It recorded a net profit of 159.5 million euros in the third quarter, beating analysts' forecast of 147.6 million euros, according to a company-compiled consensus.
The group's performance in July-September was driven by the expansion of its clearing activity, where revenue rose 19.3% increase year-on-year, and by growth in non-volume related revenues, Euronext said.
Boujnah said it was too early to say what the election of Donald Trump as the next U.S. president would mean for European finance and Euronext, but he said the win on Wednesday had sparked a "significant rotation of assets" and a jump in trading volumes on its foreign exchange, equity and fixed income platforms.
European stock exchanges including Euronext and the London Stock Exchange LSEG.L have struggled to attract many new listings in recent years as more companies stay private and the booming U.S. market lures the biggest names.
Boujnah said Euronext would "spend efforts" to attract more international companies to list, in particular technology businesses.
Euronext shares have rallied 28% in 2024, taking them back towards a 2021 high, against a nearly 8% rise in the Euro STOXX 50 .STOXX50E.
($1 = 0.9250 euros)
Reporting by Alban Kacher, Mathieu Rosemain and Tommy Reggiori Wilkes; Editing by David Evans and Susan Fenton
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