SIX, the Swiss Stock Exchange which is Europe’s 3rd-largest stock exchange and one the industry’s most-respected post-trade providers, is reporting a “solid” set of results for the first half of 2021.
The SIX Swiss Exchange, based in Zurich and serving as Switzerland’s principal stock exchange, reveals that during H1 2021, it managed to generate “operating income of CHF 745.8 million (+19.5%), and earnings before interest, tax, depreciation and amortization (EBITDA) amounting to CHF 226.1 million (+49.2%).”
SIX, which also trades other securities like Swiss government bonds and derivatives such as stock options, also shared that its “earnings before interest and tax (EBIT) came to CHF 153.8 million.”
Group net profit “amounted to CHF 108.2 million” and the contribution from BME in 2021 “is reflected in full in the income statement.”
While sharing some key highlights of the financial performance indicators, SIX noted:
“In a global situation that remains challenging, and is still impacted by the COVID-19 pandemic, SIX generated operating income of CHF 745.8 million in the first half of 2021. This is a year-on-year increase of 19.5%, which can mainly be attributed to the fact that, following the takeover of BME by SIX, BME’s contribution was incorporated in the income statement only as of June 2020.”
In 2021, BME’s contribution is “reflected in full.” The adjusted pro forma figures “present a slight reduction (of 2.4%),” SIX’s management noted while adding that this is mainly “due to the normalization of market volatility compared with the record figures seen in the previous year, as well as a decline in the market share of trading in Swiss equities.”
The company also noted that the mutual recognition of the equivalence of market regulation between Switzerland and the UK resulted in “some of the trading activities in Swiss equities moving to trading platforms in the UK from February.” Prior to that, the SIX market share was “almost 100%.”
The company further revealed:
“Due to the diversified business model of SIX and increased operating efficiency, the much lower volumes traded in securities in comparison to the previous year (SIX: -32%, BME: -21%) were almost entirely offset by the results achieved by the other business units.”
Six added that debit card transactions were able to recover quickly from the negative effects of the pandemic, while ATM transactions “did not return to the level seen before the pandemic.”
As confirmed in SIX’s report, earnings before interest, tax, depreciation and amortization (EBITDA) rose sharply (+49.2%) year-on-year, and this can “mainly be attributed to the fact that BME’s contribution was only included for the month of June in the previous year.” The adjusted pro forma figures “indicate a slight decline (-2.9%).”
SIX further revealed that “despite a solid operating result, group net profit fell year-on-year.” This was above all “due to the substantial contribution from investments such as Worldline in the previous year,” the company revealed while adding that “no such effects have been observed this year.”
SIX further noted that as of 1 January 2021, SIX bundled its securities business “on a cross-regional basis in its two domestic markets of Switzerland and Spain.” The Listing and Trading divisions are now “part of the Markets business unit, and the post-trade business has been assigned to the Securities Services business unit.”
SIX also shared:
“The Markets business unit contributed CHF 84.2 million to business unit profit. Two companies in each of the domestic markets celebrated their IPOs. These were Polypeptide Group and Montana Aerospace in Switzerland, and Ecoener and Línea Directa Aseguradora in Spain. The BME Growth segment in Spain also added four new clients.”
SIX’s report added:
“In the first half of the year, 40 exchange-traded products (ETPs) with cryptocurrencies as underlyings were launched on the Swiss stock exchange, including the world’s first ETPs to be based on the cryptocurrencies Cardano, Stellar, Polkadot and Solana. Cryptoproducts with a total value of around CHF 4.8 billion have already been traded since the start of the year. This represents an increase of more than 300% compared to the whole of the previous year.”
The Securities Services business division “contributed CHF 70.6 million to business unit profit.” Total income in the Custody and Settlement divisions “increased on account of higher index levels (including a record high for the SMI) and an increased volume of transactions,” the report revealed.
It also mentioned that BME’s Iberclear “benefited from more substantial volumes of equities, which compensated for declines in the custody of government and private bonds.” In June, the Greek Central Securities Depository (ATHEXCSD) “appointed SIX as its global custody solutions provider, and transferred all of its internationally held assets to SIX,” the report confirmed. (Note: for more details, check here.)
SIX also said that it will continue to “pursue its strategy of growth, and invest in boosting its volumes, range and productivity.”
The company also shared its broad outlook:
“Growth is expected to be achieved primarily by organic means, such as in the fields of ESG, digital assets, billing, payments and cash. SIX is also prepared for inorganic growth, and is constantly analyzing promising opportunities that offer targeted added value. SIX made decisive progress in the integration of BME in the past six months.”
During H2 2021, the focus will now be on “implementing further synergy potential, such as platform consolidation.” This should help with laying the tech foundation for the future trading platforms of both local markets. BME’s current trading platform is “being migrated to a version of the existing SIX platform,” the update confirmed.