Executive Summary

This report provides a comprehensive fundamental analysis of Euronext N.V. (ENX.PA), the leading pan-European market infrastructure. The analysis focuses on the company’s business model, competitive positioning, financial performance, strategic initiatives, and key risks, while maintaining objectivity and excluding investment recommendations or Environmental, Social, and Governance (ESG) considerations.

Euronext has successfully engineered a resilient and diversified business model, significantly de-risking its earnings profile from the inherent cyclicality of capital markets. A strategic focus on expanding non-volume-related business lines has resulted in a structure where stable, recurring revenues now represent a majority of total income. For the full year 2024, these non-volume revenues accounted for 58% of the total and, more critically, covered 153% of the group’s underlying operating expenses.¹ This provides a robust profit floor, allowing the more volatile, high-leverage trading revenues to contribute significantly to upside performance during active market periods.

In the competitive European exchange landscape, Euronext holds a dominant position in its core cash equity trading franchise. In 2024, its exchanges processed €2.7 trillion in transaction value, a figure more than double the combined total of its closest competitors, the London Stock Exchange Group (LSEG) and Deutsche Börse.³ This scale creates a powerful network effect, or “liquidity gravity,” that reinforces its market leadership. This position has been further solidified by structural market shifts, notably Brexit, which catalyzed the migration of EU-share trading from London to Euronext’s Amsterdam market.⁴

The company’s strategic execution has been exemplary, highlighted by the transformative acquisition and successful integration of the Borsa Italiana Group. This complex, multi-year project was completed in September 2024 and is on track to deliver €115 million in run-rate annual EBITDA synergies by year-end—nearly double the initial target.⁵ The acquisition has fundamentally reshaped Euronext by providing vertical integration across the full value chain, including a multi-asset clearing house (Euronext Clearing) and a large-scale Central Securities Depository (CSD), granting it greater strategic autonomy and revenue capture potential.

Looking forward, Euronext has pivoted its strategy from large-scale M&A to accelerated organic growth with its “Innovate for Growth 2027” plan. This new phase targets compounded annual growth rates (CAGR) of over 5% for both revenue and adjusted EBITDA, focusing on expanding its Fixed Income, Currencies, and Commodities (FICC) franchise and high-margin data services.⁶ This strategy is supported by a strong balance sheet, with net leverage reduced to a conservative 1.4x adjusted EBITDA at the end of 2024, and a disciplined capital allocation policy centered on a 50% dividend payout ratio.²

Despite these strengths, the company faces a distinct set of risks. Its performance remains linked to the cyclical nature of trading volumes and market volatility. The competitive environment is intense, with pressure from other major exchanges, alternative trading venues, and technology firms. Furthermore, as a piece of critical financial infrastructure, Euronext is exposed to significant operational risks, including technology resilience and cybersecurity threats, alongside a constantly evolving regulatory landscape.⁸

Company Overview & Business Model

The Pan-European Federation Model

Euronext operates a unique and effective business model structured as a pan-European federation of national exchanges. This structure encompasses the regulated securities and derivatives markets of seven distinct European economies: Belgium, France, Ireland, Italy, the Netherlands, Norway, and Portugal.⁸ This federated approach provides a significant strategic advantage by balancing local market identity with pan-European scale.

The model’s core strength lies in its ability to “connect local economies to global capital markets”.¹⁰ Each national exchange maintains its local brand, regulatory relationships, and deep connections with domestic issuers and investors. This preserves the network effects and trust built over decades within each home market. Simultaneously, these local exchanges are unified under a single, advanced technology platform—Optiq®—and operate with a harmonized rulebook. This integration creates a single, deep liquidity pool for cash equities, making it the largest in Europe.¹¹

This dual approach creates a formidable competitive moat. It combines the benefits of a centralized, efficient technological infrastructure—reducing costs and simplifying access for global trading participants—with the entrenched relationships and market knowledge of a decentralized, local presence. This structure is difficult for competitors to replicate, as it requires both technological superiority and the political and commercial acumen to integrate disparate national market structures.

Deconstruction of Revenue Streams

Euronext’s revenue base is highly diversified across the entire capital markets value chain. For the fiscal year 2024, the company generated total revenue and income of €1,626.9 million, a 10.3% increase over the prior year.² The composition of this revenue underscores the company’s strategic evolution from a pure transaction-based exchange to a full-service market infrastructure provider.

Trading (34.4% of Revenue)

The largest single contributor to revenue remains the transaction-driven Trading segment, which generated €559.4 million in 2024, up 14.2% year-over-year.²

• Cash Trading: Constituting the core of the trading business, this sub-segment generated €284.0 million, a 7.0% increase from the prior year. This growth reflects solid trading volumes and Euronext’s leading market share in European lit equity trading.²
• Fixed Income Trading: This was a standout performer, with revenues growing 35.5% to €145.5 million.² This exceptional growth was driven by a favorable interest rate environment that spurred hedging and trading activity, as well as the successful integration of Borsa Italiana’s MTS platform, a leading European electronic fixed income marketplace.⁸
• Other Trading: The segment is further diversified with smaller contributions from Derivatives Trading (€53.1 million), FX Trading (€31.7 million), and Power Trading (€45.1 million) via its stake in Nord Pool.²

Post-Trade (25.5% of Revenue)

The Post-Trade division is a cornerstone of Euronext’s recurring revenue strategy, encompassing clearing, settlement, and custody services. It generated €414.7 million in 2024, a 12.0% increase.²

• Custody & Settlement: This highly stable and predictable business line contributed €270.5 million, up 8.7%.¹² Revenue is driven by fees linked to the value of assets held under custody in its Central Securities Depositories (CSDs) and the volume of settlement activity, providing a strong, non-volume-related income stream.
• Clearing: This has become a major growth engine, with revenues increasing 19.0% to €144.3 million.² This growth is a direct result of the strategic expansion of its proprietary clearing house, Euronext Clearing, which is progressively becoming the central counterparty (CCP) for all of Euronext’s markets, internalizing a critical function previously outsourced.⁵

Listing (14.3% of Revenue)

The Listing segment, which includes fees from new public offerings and recurring annual fees from its nearly 1,900 listed issuers, generated €231.9 million in 2024, a resilient 5.1% increase despite a challenging global IPO market.² This segment also includes Euronext’s high-growth Corporate Services business, which provides value-added services like investor relations tools and compliance software to listed companies.²

Advanced Data Services (14.9% of Revenue)

A high-margin, subscription-based business, Advanced Data Services generated €241.7 million in 2024, up 7.5%.¹² This growth was driven by strong demand for real-time market data feeds, historical data, analytics, and index licensing, supported by the acquisition of Global Rate Set Systems (GRSS).²

Technology Solutions & Other (6.5% of Revenue)

This segment includes revenue from providing connectivity services to market participants and selling its proprietary trading technology, Optiq®, to other exchange operators globally, generating €106.2 million in 2024.⁸

The Strategic Shift to Recurring Revenue

A central pillar of Euronext’s strategy over the past decade has been to diversify its revenue mix away from a sole reliance on volatile, transaction-based trading fees towards more stable, recurring, and subscription-like income streams. In 2024, this non-volume-related revenue, which includes Listing, Advanced Data Services, Custody & Settlement, and Technology Solutions, accounted for 58% of the group’s total revenue.¹

The slight decrease in this percentage from 60% in 2023 is not indicative of a weakening in the recurring business lines. On the contrary, these segments posted healthy growth rates in the mid-to-high single digits.¹² The shift in the mix was a mathematical consequence of the exceptionally strong performance of the volume-related trading businesses, particularly fixed income, which grew by over 35%.² This demonstrates the powerful operating leverage inherent in the trading segment during periods of heightened market activity.

A more insightful metric for assessing the company’s financial stability is the degree to which these predictable revenues cover its fixed cost base. In 2024, non-volume-related revenue covered 153% of underlying operating expenses (excluding depreciation and amortization), a notable improvement from 145% in 2023.¹ This development is of critical importance. It signifies that the company’s core, predictable operations generate more than enough revenue to cover its entire cost base before any trading activity occurs. This structural enhancement effectively de-risks the business model, establishing a high and secure profit floor while preserving significant upside exposure to market volatility through its trading operations. The volatile trading revenue, therefore, contributes almost entirely to profit, a testament to the success of Euronext’s diversification strategy.

Industry Dynamics & Competitive Landscape

The European Exchange Arena: A Three-Horse Race

The European financial market infrastructure landscape is dominated by three major players: Euronext, London Stock Exchange Group (LSEG), and Deutsche Börse.⁹ While all three compete across a range of services, their core strengths and strategic focuses differ, creating a complex competitive dynamic.

In the critical arena of cash equity trading, Euronext has established a commanding leadership position. For the full year 2024, Euronext’s markets handled a total transaction value of €2.7 trillion. This figure dwarfs its nearest competitors, with LSEG reporting €1.06 trillion and Deutsche Börse reporting €1.05 trillion over the same period.³ This dominance is not merely a function of having more listed markets; it is the result of a powerful network effect often referred to as “liquidity gravity.” In capital markets, liquidity begets more liquidity. Market participants are naturally drawn to venues with the deepest order books and tightest spreads, as this ensures better execution quality and lower transaction costs. As Euronext’s liquidity pool grows, it becomes increasingly attractive, pulling in more order flow and further cementing its status as the primary venue for European equity trading. This self-reinforcing cycle creates a substantial competitive advantage that is difficult for rivals to overcome.

However, the competitive landscape is not one-dimensional. While Euronext leads in lit cash equities, its peers possess distinct strategic strengths in other areas. Deutsche Börse operates Eurex, one of the world’s leading derivatives exchanges, giving it a formidable position in futures and options trading.¹⁴ LSEG, following its transformative acquisition of Refinitiv, has strategically pivoted to become a financial data and analytics powerhouse, competing more directly with firms like Bloomberg and FactSet. Euronext’s own strategic initiatives, particularly the expansion of its post-trade capabilities through Euronext Clearing and the growth of its Advanced Data Services, are direct responses to this multi-front competitive environment. The battle is not just for equity market share but for dominance across the entire financial services value chain.

Regulatory Headwinds and Tailwinds

The European regulatory environment is a key factor shaping the competitive dynamics among exchanges. The Markets in Financial Instruments Directive II (MiFID II), implemented in 2018, has had a profound and lasting impact.

MiFID II was designed to foster competition and increase transparency in European financial markets. A key provision was the removal of the “concentration rule,” which had previously mandated that trades in listed shares occur on a national exchange. This opened the door for alternative venues, such as Multilateral Trading Facilities (MTFs) and dark pools, to compete directly for order flow.¹⁵ From a bearish perspective, this has permanently fragmented the trading landscape, introducing significant pricing pressure and forcing incumbent exchanges like Euronext to defend their market share more actively.

Conversely, other aspects of MiFID II have reinforced the position of large, established players. The directive’s stringent requirements for pre- and post-trade transparency, transaction reporting, and algorithmic trading oversight have significantly raised the technological and compliance costs of operating a trading venue.¹⁵ These heightened barriers to entry favor well-capitalized and technologically sophisticated operators like Euronext. Furthermore, MiFID II’s mandate to unbundle payments for investment research from execution commissions has created new commercial opportunities for exchanges to monetize their vast datasets by selling advanced data and analytics products to the buy-side.¹⁵

The United Kingdom’s exit from the European Union has acted as a significant and structural tailwind for Euronext. Following the end of the Brexit transition period in early 2021, UK-based exchanges lost their “passporting” rights to serve EU clients. As the European Commission did not grant regulatory equivalence to UK trading venues for EU-listed shares, this trading activity abruptly and massively relocated from London to venues within the EU.⁴ Euronext’s Amsterdam market was the primary beneficiary of this shift, supplanting London as the main hub for European equity trading.⁴ This was a fundamental, likely irreversible, realignment of European capital market infrastructure that has directly contributed to Euronext’s widening market share lead over LSEG in this segment.

Barriers to Entry and Technological Moats

The exchange industry is characterized by formidable barriers to entry. Aspiring competitors face the daunting tasks of securing regulatory licenses in multiple jurisdictions, making substantial capital investments in resilient and low-latency technology, and, most challenging of all, overcoming the liquidity gravity of established players.

In this context, Euronext’s proprietary trading platform, Optiq®, represents a key strategic asset and a significant technological moat. The successful migration of all seven of its national markets, including the technologically complex integration of Borsa Italiana’s cash and derivatives markets, onto this single platform is a major achievement.¹¹ This unified platform creates substantial operational efficiencies, reduces technological complexity, and provides a seamless, consistent experience for trading participants across all Euronext venues. This single-platform model stands as a key competitive advantage over rivals that may still be operating multiple legacy systems from past acquisitions, allowing for faster product innovation and a more agile response to market changes.

Financial Performance & Growth Analysis (2019-2024)

Euronext’s financial performance over the past five years reflects a period of significant transformation, marked by major acquisitions and strong organic growth. The company has successfully scaled its operations while enhancing profitability and maintaining a disciplined approach to its capital structure. The following table provides a summary of key financial metrics from 2019 through 2024.

Table 1: Historical Financial Summary (2019-2024)

Metric	FY 2019	FY 2020	FY 2021	FY 2022	FY 2023	FY 2024	5-Year CAGR
Revenue (€M)	679.1 17	884.3 18	1,298.7 19	1,418.9 20	1,474.7 2	1,626.9 2	19.1%
Adjusted EBITDA (€M)	399.4 17	520.0 18	752.8 19	861.6 20	864.7 2	1,006.4 2	20.3%
Adjusted EBITDA Margin (%)	58.8% 17	58.8% 18	58.0% 19	60.7% 20	58.6% 2	61.9% 2	N/A
Adjusted Net Income (€M)	222.0¹ 17	315.5¹ 18	413.3¹ 19	555.3 21	584.7 2	682.5 2	25.2%
Adjusted EPS (€)	3.90 17	4.99 18	5.41² 19	5.21 22	5.51 2	6.59 2	11.1%
Dividend Per Share (€)	1.85³	2.25 18	2.22⁴ 19	2.22 22	2.48⁵	2.90⁶ 7	9.4%
Net Debt (€M)	648.5 17	N/A	2,257.4 19	N/A	1,642.9⁷	1,408.9⁸	N/A

Notes: ¹ Figure represents Reported Net Income, Share of the Group. ² Adjusted EPS for 2021 is calculated based on adjusted net income attributable to shareholders and a weighted average share count. ³ Inferred from 50% payout ratio on 2019 reported net income. ⁴ Proposed dividend for FY2021. ⁵ Inferred from 50% payout ratio on 2023 reported net income. ⁶ Proposed dividend for FY2024. ⁷ Net debt at end of 2023 derived from 1.9x Net Debt/Adj. EBITDA ratio.²⁰ ⁸ Net debt at end of 2024 derived from 1.4x Net Debt/Adj. EBITDA ratio.² Data for Net Debt in 2020 and 2022 is not readily available in the provided materials.

A Trajectory of Profitable Growth

The financial data clearly illustrates a powerful growth story. Revenue has compounded at an annual rate of 19.1% over the past five years, expanding from €679.1 million in 2019 to €1,626.9 million in 2024.² This growth has been driven by both the strategic acquisitions of Oslo Børs VPS, VP Securities, and most significantly, the Borsa Italiana Group, as well as strong organic performance across its business lines.

Crucially, this top-line growth has been highly profitable. Adjusted EBITDA has grown even faster than revenue, at a 20.3% CAGR, from €399.4 million to €1,006.4 million over the same period.² This performance demonstrates the significant operating leverage inherent in the exchange business model. The company’s adjusted EBITDA margin has remained remarkably strong and has expanded over the period, reaching 61.9% in 2024.² This sustained high level of profitability, even during the intensive integration of Borsa Italiana, highlights exceptional cost discipline and the successful realization of synergies. The company exceeded its “Growth for Impact 2024” targets for both revenue and EBITDA growth, achieving a revenue CAGR of +4.7% (vs. +3-4% target) and an adjusted EBITDA CAGR of +6.4% (vs. +5-6% target) between 2020 and 2024.²

Capital Efficiency and Returns

Euronext’s asset-light business model facilitates strong cash flow generation. The business does not require substantial capital reinvestment to support organic growth, allowing for a high conversion of earnings into cash. In 2023, the conversion ratio of EBITDA to net operating cash flow was a robust 90.9%.²⁰ This strong cash generation is a core attribute that supports the company’s capital allocation priorities of deleveraging, investing in growth, and returning capital to shareholders.

Return on Equity (ROE), a key measure of capital efficiency, can be calculated using reported net income and average shareholder equity from the company’s financial statements. A consistent and high ROE would indicate that management is effectively deploying shareholder capital to generate profits. Note: A precise time-series calculation of ROE is dependent on full balance sheet data, which is not available for all years in the provided materials. However, based on available data, the metric would reflect the company’s high profitability.

Balance Sheet and Capital Structure

Euronext has demonstrated a disciplined approach to managing its balance sheet, particularly in the context of its active M&A strategy. Following the acquisition of the Borsa Italiana Group in 2021, the company’s leverage peaked, with a net debt to adjusted EBITDA ratio of 3.2x.²⁰

The company’s powerful cash generation has enabled rapid deleveraging since that peak. By the end of 2023, the ratio had fallen to 1.9x, and by the end of 2024, it stood at a conservative 1.4x, well within the company’s target range of 1.0x to 2.0x.² This swift reduction in leverage in just over three years underscores the financial strength and cash-generative capacity of the business. This financial discipline was recognized by the market, culminating in a credit rating upgrade from S&P to ‘A-, Stable Outlook’ in February 2025, which lowers the company’s future cost of capital.² The restored balance sheet strength provides Euronext with significant financial flexibility to pursue future strategic initiatives, including further value-accretive M&A or enhanced shareholder returns.

Strategic Initiatives & Capital Allocation

The Borsa Italiana Integration: A “Company-Making” Acquisition

The acquisition of the Borsa Italiana Group, completed in April 2021, was a strategically transformative event for Euronext, fundamentally reshaping its business profile and competitive positioning.¹⁹ The integration of this large and complex group was a multi-year undertaking that concluded successfully in September 2024 with the final migration of Italian derivatives clearing to Euronext’s proprietary CCP.⁵

The execution of this integration has been highly successful, both operationally and financially. Key milestones included the migration of Euronext’s core data center from the UK to Bergamo, Italy, in June 2022, and the phased migration of all of Borsa Italiana’s markets onto the single Optiq® trading platform.¹¹ Financially, the acquisition has significantly outperformed initial expectations. Euronext is on track to deliver €115 million in run-rate annual EBITDA synergies by the end of 2024, a figure that is nearly double the €60 million originally targeted at the time of the acquisition.⁵

The strategic importance of this transaction extends far beyond simply adding another national exchange. It provided Euronext with two critical, previously missing, components of the value chain: a multi-asset clearing house (Euronext Clearing, formerly CC&G) and a large-scale CSD. This vertical integration allows Euronext to control the end-to-end lifecycle of a transaction—from listing and trading to clearing, settlement, and custody. This provides two key long-term advantages: first, it allows Euronext to capture a greater share of the revenue from each transaction that occurs on its markets. Second, and more importantly, it provides strategic autonomy by reducing its dependence on third-party service providers, most notably its former reliance on LCH SA (majority-owned by competitor LSEG) for clearing services. This control over its own critical infrastructure is a significant long-term competitive advantage.

“Innovate for Growth 2027”: The Next Chapter

With the Borsa Italiana integration complete, Euronext unveiled its next strategic plan, “Innovate for Growth 2027,” in November 2024.⁶ This plan signals a strategic pivot from an era defined by large-scale, transformative M&A to a new phase focused on accelerating organic growth and extracting further value from its newly expanded and vertically integrated platform.

The plan sets ambitious financial targets, aiming for a compounded annual growth rate (CAGR) of over 5% for both revenue and adjusted EBITDA for the period from 2023 to 2027.⁶ This growth is expected to be driven by three core strategic pillars:

1. Accelerate growth in non-volume businesses: A continued focus on expanding high-margin, stable revenue streams from data, corporate services, and investor solutions.
2. Expand the FICC franchise: Leveraging its enhanced clearing capabilities to grow its presence in fixed income, currency, and commodity trading.
3. Build upon leadership in trading: Continuing to innovate and defend its dominant position in European cash equity and ETF markets.⁶

This organic growth strategy is supported by a commitment to enhancing operational excellence through the adoption of new technologies like artificial intelligence and a continued disciplined approach to M&A, focusing on smaller, bolt-on acquisitions that are value-accretive.⁶ This shift reduces the significant integration risk associated with large-scale acquisitions and focuses the organization on driving higher-margin growth from its existing, powerful platform.

Shareholder Return Policy

Euronext maintains a clear, consistent, and balanced capital allocation policy that prioritizes investment in growth while providing predictable returns to shareholders.

The cornerstone of this policy is its dividend. The company has a stated policy of distributing 50% of its reported net income to shareholders annually.⁷ This provides a direct and transparent link between the company’s profitability and shareholder returns. For the 2024 fiscal year, the company has proposed a dividend of €2.90 per share, representing a total distribution of €292.8 million.⁷

In addition to dividends, the company has demonstrated a willingness to return surplus capital to shareholders through share buybacks when appropriate. For instance, following the profitable disposal of its minority stake in LCH SA in 2023, Euronext executed a €200 million share repurchase program.²⁰

This approach to capital allocation is disciplined. The 50% payout ratio allows the company to retain significant capital to fund its organic growth initiatives, as outlined in the 2027 plan, and to maintain a strong balance sheet. The company targets a medium-term leverage ratio of 1.0x-2.0x Net Debt to Adjusted EBITDA, providing flexibility for future bolt-on M&A while ensuring financial stability.⁶

Recent Developments & Challenges (2023-2024)

Navigating the Interest Rate Cycle

The macroeconomic environment of 2023 and 2024 was dominated by a cycle of aggressive monetary tightening by central banks, including the European Central Bank (ECB), followed by a period of stabilization and the beginning of rate cuts. This has had a significant impact on Euronext’s business.

The rising interest rate environment proved to be a substantial tailwind for several of Euronext’s business lines. The increased volatility and uncertainty surrounding the future path of interest rates drove a surge in hedging and trading activity in fixed income and derivatives markets. Data shows that in the EU, the notional value of interest rate derivatives (IRD) traded grew at a 29.0% CAGR from 2022 to 2024.²⁵ Similarly, daily turnover in the euro money markets rose by 38% over the same period.²⁶ This activity was a key driver of the 35.5% growth in Euronext’s fixed income trading revenue in 2024.² Additionally, higher interest rates directly benefit the net treasury income generated by Euronext Clearing on the cash collateral it holds.²

The primary challenge associated with this trend is its cyclical nature. A normalization of interest rates and a decline in market volatility could lead to a moderation in the exceptional growth rates seen in these segments. However, trading volumes in IRDs remained elevated even as the ECB began to cut rates in 2024, suggesting that activity is not solely driven by rate hikes but also by the ongoing uncertainty and need for portfolio repositioning in a changing rate environment.²⁵

The Rise of Alternative Venues

Competition from Alternative Trading Systems (ATSs), including dark pools and systematic internalisers, is a structural and permanent feature of modern equity market design, institutionalized by regulations like MiFID II.¹⁶ These alternative venues compete with traditional exchanges by offering lower fees, faster execution speeds, or the ability to execute large block trades anonymously without impacting the public market price. In the highly fragmented U.S. market, for example, off-exchange trading now consistently accounts for nearly half of all equity volume.²⁷

This presents an ongoing challenge for Euronext, as these venues can erode market share and create pricing pressure on execution fees. However, Euronext has effectively defended its position through several key competitive advantages. The unparalleled depth of its central limit order book provides the most reliable source of price discovery. Its closing auction is a critical market mechanism used by a vast number of funds and indices to establish end-of-day net asset values, making participation almost essential. Finally, Euronext has adapted by offering its own suite of non-displayed trading services to cater to clients seeking to minimize market impact.²⁸ The company’s sustained, dominant market share in European lit trading demonstrates its successful navigation of this competitive pressure to date.³

Post-COVID Volume Normalization

The COVID-19 pandemic in 2020 and 2021 ushered in a period of unprecedented market volatility, which translated into record trading volumes for exchange operators globally. As market conditions have gradually normalized in the subsequent years, this has created challenging year-over-year comparisons for transaction-based revenue streams.

For instance, Euronext’s cash trading revenue experienced a decline in 2023 compared to the exceptionally strong performance in 2022.²⁹ This normalization presents a challenge in communicating performance, as headline growth figures for the most visible part of the business can appear weak. However, the key to analyzing the company’s performance is to look through the cycle. Euronext’s ability to grow its overall group revenue and profit in 2023, a year with softer cash equity volumes, is a powerful testament to the success of its diversification strategy. Strength in other areas, such as the record performance in fixed income trading and the steady growth of its non-volume-related businesses, more than compensated for the cyclical moderation in its core equity franchise, demonstrating the resilience of the overall business model.²⁹

Key Risk Factors

An investment analysis of Euronext requires a thorough understanding of the risks inherent in its business and operating environment. The company’s own disclosures in its 2024 annual report provide a comprehensive framework for these risks, which can be categorized into strategic, operational, and financial domains.⁸

Strategic and Competitive Risks

• Business Model and Transformation Risk: Euronext is engaged in a continuous process of strategic transformation. This involves the simultaneous management of multiple complex, large-scale projects, such as completing the Borsa Italiana integration while concurrently launching the new “Innovate for Growth 2027” strategic plan. There is a risk that these ambitious projects may not be executed on schedule or that the new products and services developed may not meet market demand. Failure to deliver on stated targets could impact stakeholder confidence and credibility.⁸
• Competition Risk: The company faces intense and multifaceted competition. In its core equity trading business, it competes with other major exchanges and a growing number of alternative venues that often have lower cost structures. In fixed income, its MTS platform competes with other inter-dealer brokers and dealer-to-client platforms. In the data and technology segments, it faces competition from large financial data vendors and specialized technology firms. This persistent competitive pressure can impact market share and pricing power across all business lines.⁸
• Regulatory Risk: Euronext operates in a highly regulated industry and is subject to the oversight of numerous national and European authorities. Changes in financial legislation, such as future revisions to MiFID or new regulations concerning clearing and settlement, could significantly impact its business model, operational requirements, and profitability. The regulatory landscape is in constant evolution, creating a persistent source of uncertainty.⁸

Operational and Technological Risks

• Cybersecurity Risk: As a critical piece of financial infrastructure for seven European nations, Euronext is a high-value target for sophisticated cyber-attacks from a range of threat actors. A successful breach could disrupt markets, compromise sensitive data, and result in severe financial and reputational damage. While the company invests heavily in cybersecurity defenses, this risk can never be fully eliminated.⁸
• Technology and System Failure Risk: The company’s operations are entirely dependent on the continuous availability, resilience, and performance of its complex technology platforms, including the Optiq® trading engine and Euronext Clearing systems. A major system outage or failure could halt trading across multiple countries, leading to significant market disruption, loss of client confidence, and potential regulatory action.⁸
• Third-Party Risk: While Euronext has increased its vertical integration, it still relies on a network of third-party service providers for critical functions, including data centers, cloud services, and telecommunications. A failure at a key vendor could disrupt Euronext’s operations and services.⁸

Market and Financial Risks

• Cyclicality of Trading Volumes: A significant portion of Euronext’s revenue remains directly linked to trading volumes, which are inherently cyclical and dependent on market volatility, investor sentiment, and broader macroeconomic conditions. A prolonged period of low volatility or an economic downturn would negatively impact transaction-based revenues.⁸
• Currency Exposure: The company generates revenue and incurs costs in several non-Euro currencies, including the Norwegian Krone (NOK) and Danish Krone (DKK). Fluctuations in foreign exchange rates can therefore impact the company’s reported financial results when translated back into Euros.²

Valuation Framework Analysis

This section provides a framework for evaluating Euronext’s valuation by comparing its trading multiples to those of its key peers and its own historical ranges. It does not provide a price target but offers the necessary context for an independent valuation assessment.

Table 2: Peer Valuation Multiples (as of Q3 2025)

Company	Market Cap	P/E Ratio (TTM)	EV/EBITDA (TTM)	Dividend Yield (%)
Euronext N.V. (ENX.PA)	€14.6B 30	22.3x 30	17.1x 31	2.1% 32
London Stock Exchange Group (LSEG.L)	£49.7B 33	26.1x 33	21.0x¹ 34	1.2% 33
Deutsche Börse AG (DB1.DE)	€47.2B 35	23.8x 35	16.5x 36	1.6% 35
Intercontinental Exchange (ICE)	$103.7B 37	38.0x 38	20.0x²	1.2%
CME Group (CME)	$98.7B 37	26.5x 38	22.1x³	2.0%

Notes: Data is sourced from a variety of providers and represents the most recent trailing twelve-month (TTM) figures available as of Q3 2025. ¹ LSEG EV/EBITDA is based on 2023 reported figures. ² ICE EV/EBITDA is based on 2023 reported figures. ³ CME Group EV/EBITDA is based on 2023 reported figures. Market caps and yields are subject to market fluctuations.

Relative Valuation Analysis

The peer comparison table reveals that Euronext trades at a slight discount to its main European peers on a P/E basis and at a similar or slight discount on an EV/EBITDA basis. It trades at a more significant discount to the large U.S. derivatives exchanges, ICE and CME Group. This valuation differential may be attributable to several factors, including differences in business mix (the U.S. exchanges have a higher concentration in high-margin derivatives), perceived growth prospects, and geographic market dynamics. Deutsche Börse’s valuation is similar to Euronext’s, reflecting their comparable scale and diversified business models. LSEG’s premium valuation may reflect its strategic pivot towards the high-margin data and analytics business following the Refinitiv acquisition.

Historical Valuation Context

Analyzing Euronext’s valuation multiples relative to its own historical ranges provides further context.

• P/E Ratio: At year-end 2024, Euronext’s P/E ratio was 18.9x. Over the period from 2018 to 2024, its year-end P/E ratio has fluctuated within a range of approximately 16.3x to 22.9x.³⁹ A current TTM P/E of 22.3x places it towards the upper end of this historical range, suggesting a degree of market optimism regarding its future earnings potential.
• EV/EBITDA Ratio: For fiscal year 2024, Euronext’s EV/EBITDA multiple was 14.7x. Over the last five fiscal years (2020-2024), this metric has ranged from a low of 11.7x in 2022 to a high of 19.0x in 2021.³¹ The current TTM multiple of 17.1x is also in the upper half of its recent historical range.

The current valuation suggests that the market is pricing in the successful integration of Borsa Italiana and the growth prospects outlined in the “Innovate for Growth 2027” strategic plan.

Drivers of Valuation Premiums for Exchange Operators

Stock exchange operators as a sector often command premium valuation multiples compared to the broader market. This premium is typically justified by a combination of powerful and durable business characteristics:

1. High Barriers to Entry: The combination of regulatory licensing requirements, massive technology investments, and the powerful “liquidity gravity” network effect creates formidable moats that protect incumbents from new competition.
2. High Operating Leverage: Exchanges have a largely fixed cost base. As a result, a significant portion of incremental revenue generated from higher trading volumes flows directly to the bottom line, leading to substantial margin expansion in active markets.
3. Asset-Light Business Model: The business model does not require significant ongoing capital expenditure to support organic growth. This leads to very high free cash flow conversion, allowing for strong shareholder returns and strategic flexibility.
4. Pricing Power: As the primary venues for listing, trading, and price discovery, exchanges possess a degree of pricing power over their core services, which is a rare and valuable attribute.

Dividend Yield in Context

Euronext’s dividend policy provides a consistent and meaningful yield. Based on the proposed 2024 dividend of €2.90 per share, the dividend yield is an important component of the total shareholder return proposition.⁷ When compared to other stable, income-generating sectors in Europe, such as regulated utilities or infrastructure assets, the yield offered by Euronext can be seen as attractive, particularly given the company’s additional potential for capital appreciation through earnings growth. For income-oriented investors, this provides a compelling alternative that combines a reliable income stream with exposure to the growth of European capital markets.

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