Euronext and Deutsche Börse both raise their forecasts
European stock exchange operators are on a roll: both Deutsche Börse and Euronext have raised their full-year forecasts following their third-quarter financial results. Newly appointed Deutsche Börse CEO Stephan Leithner refined targets for the „Horizon 2026“ strategy, while Euronext CEO Stéphane Boujnah also recently presented a strategy update in Paris.
Euronext aims for annual organic revenue growth of over 5% on average until 2027, with a similar target for adjusted Ebitda growth. Deutsche Börse projects an average organic net revenue growth of 8% over the next two years – excluding treasury results – and expects average annual Ebitda growth of 11% from 2022 to 2026.
Broadening revenue sources
A key pillar in the strategy plans is to make the exchange operators less dependent on the volatility of the stock market. In this context, Deutsche Börse frequently emphasises „recurring revenues“, which are primarily driven by software and data services. The final piece of the puzzle for Deutsche Börse was the record acquisition of Danish specialised software provider Simcorp, which is currently being integrated.
Deutsche Börse aims to increase the share of recurring revenue in its total revenue to 65-70% by the end of 2026. Euronext, meanwhile, highlights non-volume-dependent activities, such as capital market and data solutions. These areas now account for 59% of Euronext's revenue, up from 44% a decade ago.
Looking for more international companies
Both exchange operators also plan to continue acquisitions, though not at any cost, as both Leithner and Boujnah emphasised. However, Euronext appears to have a slightly greater financial flexibility, with net debt currently only 1.5 times its adjusted Ebitda. Following the Simcorp acquisition, Deutsche Börse's debt ratio is expected to fall below a factor of 2.25 by the end of the year.
The two exchanges also see growth potential in their core businesses, such as in clearing services. Euronext has set more ambitious targets for IPO business, with CEO Boujnah announcing plans to attract more international companies to one of Euronext’s seven exchanges in Amsterdam, Brussels, Dublin, Lisbon, Milan, Oslo, and Paris. This will be achieved through a new team dedicated to international listings.
