1
Euroclear Full Year 2019
Results Presentation
February 2020
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Today’s Agenda
1.Chairman’s overview Marc Antoine Autheman
2.Performance Highlights Lieve Mostrey
3.Financial Performance Update Bernard Frenay
4.Business Highlights Frederic Hannequart
5.Outlook Lieve Mostrey
6.Questions and Answers
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Disclaimer
The information, statements and opinions expressed in this presentation (the “Content”) do not constitute and shall not
be deemed to constitute: (i) any offer, invitation or inducement to sell a security or engage in investment, financial or
other similar activity; or (ii) a solicitation of an offer to buy any security; or (iii) any recommendation or advice in relation
to any investment, financial or other decision. Persons considering making any investment or financial decision should
contact their qualified financial adviser. The Content may include forward looking statements, in particular, in relation to
future events, growth, future financial performance, plans, strategies, expectations, aims, prospects, competitive
environment, regulation and supply and demand. Such statements contain inherent risks and uncertainties and actual
outcomes may differ materially from those expressed or implied by forward looking statements.
To the maximum extent permitted by law, no warranty or representation including, but not limited to, accuracy or
completeness (express or implied) is made in relation to the Content, including, but not limited to, any projections or
statements about the prospects of Euroclear. Euroclear makes no commitment to update Content and expressly
disclaims, to the extent lawful, liability for any errors or omissions in it. The Content is not directed at, or intended for
distribution to, or use by any person or entity where such distribution or use is restricted by law or regulation. Persons into
whose possession the Content comes should inform themselves about and observe any such restrictions. Past
performance, historic financial information and/or historic distributions should not be taken as an indication of current or
future performance, results or distributions.
The 2019 consolidated financial information included in this presentation is unaudited and based on Euroclear Holding
SA/NV consolidated figures as of 31 December 2019. The audited consolidated financial statements of Euroclear
Holding SA/NV for the year ended 31 December 2019 will be submitted for approval to the annual general meeting of
shareholders of Euroclear Holding in May 2020 and will be filed in accordance with applicable requirements under
Belgian law.
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Excellent 2019 performance across all
business lines
First (I)CSD group to obtain CSDR licenses
Growth in shareholder returns with dividend doubled in 2 years
Shareholder liquidity initiatives ongoing
Overview from the Chairman
Performance Highlights
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Excellent 2019 Performance - Highlights
Record Financial
Performance
EPS: +34%
Delivering Customer-
Centric Strategy
DPS: +50%
Improved Operating Income, Efficiency and Profitability
Balance sheet strengthened
Generating Shareholder Value and Returns
Strengthening Core Network as 1st (I)CSD Group with CSDR Licences
Growing Network Collateral Management and International Expansion
Reshaping Network Exploring Innovation and Data Opportunities
Business
Income
Operating
Margin:
+3.9 %pts
Operating
leverage:5%
7
1,1501,229
1,296
14.0
214.0
414.0
614.0
814.0
1,014.0
1,214.0
1,414.0
2017 2018 2019
Record Business Drivers underpin Strong 2019 Performance
Assets under Custody
€ Trillion – Yearly Average
Netted Transactions
Number of transactions (million)
Collateral Outstanding
€ Billion – Yearly Average
• Customer expansion led to assets
under custody (AuC) of over €30 trillion.
• Year-end AuC reached €31.4 trillion.
• Record level of transactions settled
in 2019 equivalent to €837 trillion:
approximately 10 x Global GDP.
• Regulatory / industry requirements
driving growth of collateral
outstanding to record €1.3 trillion.
215 230 239
14
64
114
164
214
264
2017 2018 2019
28.4 28.8 30.1
2017 2018 2019Debt Equities Turnover in € trillion
733 793 837
• Customer expansion led to assets
under custody (AuC) of over €30 trillion.
• Year-end AuC reached €31.4 trillion.
• Record level of transactions settled
in 2019 equivalent to €837 trillion:
approximately 10 x Global GDP.
Financial Performance Update
9
Record Financial Performance in 2019
€ 1145m Business Incomevs FY 2018
€820m Operating Expensesvs FY 2018
€137 Earnings Per Sharevs FY 2018+6% -0.7% +34%
2018
(€ m)
Operating Income 1335 1435 100 8%
Business income 1079 1145 66 6.1%
Interests,banking & other inc. 256 290 34 13%
Operating Expenses -814 -820 -6 -0.7%
Share of results -7 1 8
Operating Profit before impairment 514 616 102 20%
Impairment -29 -2 27
Pre tax profit 485 614 129 27%
Tax -163 -183 -21 -13%
Net profit 322 431 109 34%
* adjusted for liquidity initiativ e and EIS costs 345 82
EPS 102.3 136.9 34%
Business income operating margin 24.5% 28.4%
EBITDA margin (EBITDA/op.inc) 44.6% 49.4%
FY 2019
2018
vs
10
Business Income Growth across Business Lines
2019 Business Income
Business Lines
6%
12%
2%
1,039 1,079
1,145
Business Lines Track Record (€ m)
6%
10%
5%
6% growth in 2019
Market Drivers
Fixed
Income
nominal
value,
48%Equities
value,
23%
Transaction
volumes, 29%
795 814 859
113 126139
131139
147
0
200
400
600
800
1,000
1,200
1,400
2017 2018 2019
Strenghten (Europe/Funds) Grow (Global Reach) Grow (Collateral Highway)
Strengthen
(Europe /
Funds), 75%
Grow
(Collateral
Highway), 13%
Grow (Global
Reach), 12%
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• Interest rate rises in USD underpinned strong cyclical growth inBanking Income
• Interest rates in Eurozone remain negative
• Interest income up despite additional charges linked to liquidity linesrequired in light of CSDR compliance
• Rates: Interest income cyclical in nature and highly correlated with interest rates
• Volumes: Balances slightly above 2018 level
133 163
184
256 290
2015 2016 2017 2018 2019
Interest Rate Evolution
USD Rate Rises Led to Increase in Net Interest Income
Interest, Banking & Other Income (€ m)
+13%
25.3 18.1 17.1 20.1
Average Deposits
(€ bn)
Deposits Currency Split
EUR, 26%
USD, 49%
GBP, 7%
Others,
18%
20.6
0.51%
1.10%
1.90%
2.28%
-0.38% -0.40% -0.40% -0.43%
0.40% 0.29%0.60%
0.75%
2016 2017 2018 2019
Average central bank's interest rate
USD (FED) EUR (ECB) GBP (BOE)
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• Operating expenses of €820m, up 0.7%, while sustaining
investment levels
• Investments ongoing to modernise technology
capabilities, along with product enhancements,
regulatory-driven and cyber security initiatives
• Technology modernisation programme includes:
Selectively upgrading platforms & infrastructure
Enabling digitalisation of products & data solutions
Enhancing IT operating model for efficiency & agility
• Cost discipline remains a strong focus, demonstrated
by the set-up of an operational excellence team to
coordinate delivery of cost savings.
Operating expenses
Strong Cost Management while Sustaining Investment Levels
-15 -14 -11
649 662 663
175 166 168
809 814 820
2017 2018 2019
(€m)Expenses
Net Capitalisation Running Total Investments
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Business Income Operating Margin Increased to 28.4%,
Ahead of Strategic Plan
• Business income operating margin of
28.4% increased by 4 percentage points
• EBITDA of €709m, up 19%, in line with the
operating profit increase recorded in the
period, leading to 49% EBITDA margin
Business Income Operating Margin1, EBITDA & EBITDA margin2
1. Business Income Operating Margin is calculated as the difference between Business Income and the Operating Expenses, divided by the Business Income
2. EBITDA margin is calculated as the EBITDA divided by the Operating Income
22%25%
28.4%
37%
45%
49%453
596
709
1
101
201
301
401
501
601
701
10%
20%
30%
40%
50%
60%
70%
FY 17 FY 18 FY 19
BI operating margin EBITDA margin EBITDA (in € million)
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• Debt Securities Issued & Funds borrowed reached€6,107 million driven by additional short-term paper
issued by Euroclear Bank SA/NV.
• Financial Assets exceeded €10bn at group level
mainly driven by reinvestments by the Bank of the
2019 debt proceeds and client balances in securities.
• Shareholders' equity up to €4,230m on accumulated
profit, before 2019 expected dividend payment.
• Strong and stable capital ratios reflecting Euroclearlow risk profile above required levels.
Strong Balance Sheet with Good Liquidity
Group capital ratios & Risk Weighted Assets (RWAs) *
Balance Sheet
(€m)
2019 2018
Cash and balances with central banks 1,883 4,536
Loans and advances 13,735 14,540
Financial assets 10,311 7,434
Goodwill and intangible assets 1,002 992
Other assets 638 632
Total assets / Liabilities 27,569 28,134
Deposits from central banks 826 540
Deposits from banks and customers 15,589 17,944
Debt securit ies issued and funds borrowed 6,107 4,956
Shareholders’ equity 4,230 3,839
Other liabilit ies 817 855
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Delivering Increasing Returns for Shareholders
€/share
Earnings per share
1. Return on Equity is calculated as the net profit of the year divided by the average shareholder equity pre dividend distributions, as reported in the year-end financial statements
%
Return on equity1
8.7% 8.7%
7.5%
8.6%
10.7%
2015 2016 2017 2018 2019
87.0 83.7 84.6
102.3
136.9
0.0
20.0
40.0
60.0
80.0
100.0
120.0
140.0
160.0
2015 2016 2017 2018 2019
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Record Dividend per Share and NAV per Share
1. Dividend guidance for 2019
2. Net Assets Value per share is calculated as the reported equity at year end 2019 divided by the number of shares
€/share
Dividend per share1 NAV per share2
€/share
36.3 37.0 39.0
55.0
82.4
40% 40%
52% 54%60%
20%
30%
40%
50%
60%
0.0
10.0
20.0
30.0
40.0
50.0
60.0
70.0
80.0
90.0
100.0
2015 2016 2017 2018 2019Dividend per share Div pay-out (%)
1,077 1,1031,166
1,2201,344
14
214
414
614
814
1,014
1,214
1,414
2015 2016 2017 2018 2019
Business Highlights
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Venue neutral and
open architecture
Regulated as
systemically
important market
infrastructureGlobal collateral and
liquidity optimisationRisk reduction
Cost & process
efficiency
Investment
banks
Custodians
Central banks
Exchanges
Central
Counterparty
Clearing
Issuers
Central Securities
Depositories
Open model, as
liquidity and collateral
hub at the centre
of the global financial
market ecosystem
Unique Position at the Centre of a Global Client Network
Business Strategy aims to Strengthen, Grow and Reshape the Euroclear Network
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• Record business drivers and strong income growth
• Clients’ needs shaped by regulatory changes
• 1st ICSD group to be granted CSDR licences
• Well prepared for Brexit
• New issuer solutions
• Extending access to Central Bank Money by connecting
Euroclear Bank to T2S
Strengthening our Network in Europe
Business Income
Revenue Mix / Outlook
• C. 75% of Business Income
• Expect Growth in line with European GDP levels
Eurobonds and Domestic European Securities
• Extending Euroclear’s position as the place for funds
• Notable client wins across various platforms
• International ETF structure continues to grow
FundsPlace
807795 795
814
859
2015 2016 2017 2018 2019
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• Record business drivers and 6% income growth, despite
challenging market conditions
• Successfully onboarding clients as part of Wave 4 of regulatory
requirements for OTC derivatives
• Took 100% share in GlobalCollateral Ltd to enhance customer
delivery model for global investors
Growing our Network Globally
Business Income (Growth)
Revenue Mix / Outlook
• C. 25% of Business Income
• Expect High Single Digit Growth Through-the-Cycle
Collateral Highway
• Strong pipeline of markets attracted to ‘Euroclearability’
• Memorandum of Understandings signed with China, Saudi
Arabia and Egypt to develop cross-border links
• Exploring opportunities to support development of ESG
finance sector
Global Reach
191204
244264
286
2015 2016 2017 2018 2019
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• EasyWay web interface client growth of >300% in 2019 to 870
active clients
• Taskize community grown to +200 active clients in 50 countries
• Reference data products gaining client traction and
generating revenues
• Preparatory work completed for first liquidity data solutions,
with commercial phase beginning in 2020
• Developing blockchain solution to support to new issuer needs
under incoming SRDII regulations
• Collaborating with industry initiatives to explore technology
such as Blockchain
• Pilot project with EIB, Santander and EY
• Investment in Liquidshare
Reshaping our Network
Data and Innovation
Data insights
Technology
Connection
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• Credit rating is important for our clients
• Consistently strong and stable credit ratings
AA / AA+ Rating
Fitch
AA+
S&P
AA
Financial Market Infrastructure with Low Risk Profile
Strong Capital Position (2019)
Low Group Leverage
Euroclear
Combination of high credit rating, low risk profile and solid capital ratio are critical to resilient and sustainable performance
Net Debt / EBITDA
• Strong ICAAP framework set at 99.98% confidence level
• Capital above ICAAP threshold providing additional buffer
1
Debt issued with the sole
purpose to meet recovery
regulatory requirement
Improved due to higher
EBITDA and improving cash
position
1.5x1.2x
2018
2019
Systemically important role
€ 837tn
€-equivalent
transactions
processed
€ 31tn
assets held in
custody
Connecting
2,000
financial
institutions
Connected to
50+
financial markets
• Sustained investment in technology and cyber resilence to
mitigate operational risks
• Debt issuances strengthened Euroclear Bank’s liquidity profile
• Constant focus on ethics and regulatatory compliance
Outlook
24(1) Excludes Interest and Banking income.
• Margin expansion driven by cost base
stabilisation
• Cost base expected to grow at inflation
• Efficiency initiatives and investments
expected to deliver margin expansion
• Stable level of investment at 20% of
total cost base going forward
Investments in regulatory
infrastructure & cyber
security elevated cost base
Costs plateau in 2018-2019,
leading to Business Operating
Income Margin Improvement
Maintain Slower
Expense Growth
Business Income
Margin expansion
Maintain Business
Income(1) Growth
Trajectory +4%
Investment requirements led to
Margin Compression
2013 2017 2019 2023
Business
Income
Costs
Delivery of Strategic Plan Evidenced in 2018 & 2019
Expect to Further Improve
Operating Margin
Low to
Mid Thirties
26%
28%
22%Business
Income
Margin
Consistent Business Income
Growth Trajectory
2019 confirming our
long term performance
objectives
Robust Strategic Plan to Deliver Growth and Efficiency
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Expect to Continue to Deliver Attractive Growth, Whilst
Retaining AA / AA+ Rating
1. Excludes Interest and Banking income.
Business income
Interest, Banking
and Other Income
Business Income
Operating margin1
2019 (2018) 5-Yr growth
€1,145m (€1,079m)
€290m (€256m)
28.4% (25%)
Maintain Historic
Growth Trajectory
Driven by Balances
and Interest Rates
Low to Mid Thirties
Rating AA / AA+Maintain AA/
AA+ Rating
Operating
leverage
2% average
through-the-cycle5% (3%)
Comments on 2019
Above Secular
Trend
Good progress
ahead of strategic
plan
Ahead of target for
two years in a row
Driven by higher first
half USD rates
Strong reduction
in Net debt /
EBITDA ratio
Questions & Answers
Appendix
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Euroclear Leadership Team
Bernard Frenay
Chief Financial Officer
Frederic Hannequart
Chief Business Officer
Lieve Mostrey
Chief Executive Officer
Yves Dupuy
Chief Information Officer
Peter Sneyers
Chief Risk Officer
Marc Antoine Autheman
Chairman
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Reported and Adjusted EPS ReconciliationEBITDA retreatments
* Net financial charges recorded at Euroclear Holding level
(€ m) FY 2017 FY 2018 FY 2019
Operating profit before Impairment 408 514 616 20%
Depreciat ion, amort isat ion & other provisions 38 64 70 10%
Net financial charges** 7 19 24 27%
EBITDA 453 596 709 19%
0 0 0EBITDA margin (EBITDA/op.inc) 37% 45% 49%
vs 2018
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Euroclear Investments – Summary Income Statement (in IFRS)
2019 2018 Y-o-Y
Net Operating income 436 78 459%
Net Interest Income 4 -2 -279%
Other Income 1 0 150%
Gains on non trading financial assets 215 -56 -484%
Dividend Income 216 136 59%
Operating expenses -1 -1 0%
Share of results 0 0 0%
Operating profit before Impairment* 435 77 464%
Provisions 0 0 0%
Tax -55 15 467%
Net Profit 380 92 312%
(€ m)
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Euroclear Investments – Summary Balance Sheet (in IFRS)
€ million
end of year balance2019 2018 %
Loans & Advances 129.0 270.7 -52%
Financial assets 246.6 173.8 42%
Non-trading financial assets 1,103.9 781.0 41%
Current & Deferred income tax assets 0.0 6.9 -100%
Other Assets & Accruals 0.4 0.3 33%
Property Plant & Equipment 0.2 0.0 n.a.
Participations in group companies 637.2 637.2 0%
Total Assets 2,117.3 1,869.8 13%
Long Term Debt 1301.8 1,300.8 0%
Intercompany Borrowings 0.0 0.0 n.a.
Financial Liabilities held for trading 0.0 0.0 n.a.
Income & deferred tax liabilities 49.0 0.0 n.a.
Other liabilities & Accruals 0.2 0.3 -33%
Shareholders' Equity 766.3 568.7 35%
Total Liabilities 2,117.3 1,869.8 13%
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Euroclear Bank - Summary Income Statement (in BEGAAP)
2019 2018 Y-o-Y
Net Operating income 1,025 944 9%
Operating expenses -541 -514 -5%
Share of results 0 0 n.a.
Operating profit before Impairment* 484 431 12%
Provisions 0 0 n.a.
Impairment 0 -4 -100%
Tax -142 -127 12%
Net Profit 342 299 14%
(€ m)
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Euroclear Bank – Summary Balance Sheet (in BEGAAP)
€ million
end of year balance2019 2018 %
Loans and advances to banks and customers 15,210 18,638 -18%
Financial Assets 8,932 6,521 37%
Goodwill and (in)tangible assets 6 5 20%
Other assets/accrued income 176 242 -27%
Total Assets 24,325 25,406 -4%
Deposits by banks and customers accounts 16,452 18,491 -11%
Debt instruments issued 5,309 4,258 25%
Other liabilities/provisions 376 560 -33%
Subordinated liabilities 306 202 51%
Shareholders' equity 1,882 1,894 -1%
Total Liabilities 24,325 25,406 -4%
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Disclaimer
© 2020 Euroclear SA/NV, 1 Boulevard du Roi Albert II, 1210 Brussels, Belgium – Tel: +32 (0)2 326 1211 –RPM Brussels number 0423 747 369. Euroclear is the marketing name for the Euroclear System, EuroclearHolding SA/NV, Euroclear SA/NV and their affiliates. All rights reserved. The information and materialscontained in this document are protected by intellectual property or other proprietary rights.
All information contained herein is provided for information purposes only and does not constitute anyrecommendation, offer or invitation to engage in any investment, financial or other activity. Weexclude to the fullest extent permitted by law all conditions, guarantees, warranties and/orrepresentations of any kind with regard to your use of any information contained in this document.
You may not use, publish, transmit, or otherwise reproduce this document or any informationcontained herein in whole or in part unless we have given our prior written consent. Your use of anyproducts or services described herein shall be subject to our acceptance in accordance with the
eligibility criteria determined by us.
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