- In the first six months of 2020, SIX generated CHF 624.1 million (+7.6%*) in operating income and CHF 151.6 million (+32.7%*) in earnings before interest, taxes, depreciation and amortization (EBITDA)
- Earnings before interest and tax (EBIT) amounted to CHF 216.1 million
- Group net profit amount to CHF 184.2 million for the first half of 2020
- SIX successfully completed the acquisition of a controlling stake in Bolsas y Mercados Españoles (BME)
In a globally challenging environment brought under turmoil by COVID-19, SIX generated CHF 624.1 million in operating income in the first half of 2020. Despite the turbulent market developments and the heightened market volatility, the balanced and diversified portfolio of SIX proved once again successful. On top of its strong operational performance, the financial result of SIX was significantly higher than that of the previous year’s period. This is due to the completion of the 10.1 million Worldline shares sale, representing 5.5% of the Worldline share capital, by way of an accelerated bookbuild back in April.
Financial Highlights
SIX mastered a challenging first half year thanks to its diversified portfolio. The total operating income increased by 7.6%* , mainly due to amplified trading activity in a time of heightened market volatility - a result of the uncertainty brought on by COVID-19. The exchange demonstrated its central responsibility in an unprecedented market turmoil. This was a result of the continuous effort that went into improving procedures and technology. Operating Expenses increased slightly (2.0%*) because of higher M&A activity and increased revenues. In total, this resulted in a higher EBITDA than that of the corresponding period last year (+32.7%*).
Completion of acquisition of BME
On 16 June, SIX announced that it had completed the acquisition of a controlling stake in BME. SIX has acquired a total of 77,9 million BME shares for CHF 2’765.0 million, representing 93.16% of the equity share capital. The integration of BME and SIX, two leaders in their domestic financial markets, creates a more diversified group with a strong presence across Europe, making it the third largest European financial market infrastructure group, and the 10th largest globally by revenue.
On 30 July, the BME Board of Directors appointed Jos Dijsselhof as their new Chairman and ratified Daniel Schmucki, SIX CFO, and Marion Leslie, Head of the Financial Information business unit of SIX, as new members. BME’s Board of Directors was also reduced to six members, three of which are of Spanish nationality.
Prior to these board changes, on June 11, Javier Hernani Burzako, Business Head of BME, joined the SIX Executive Board as an equal member.
The planning of the operational integration of BME into SIX has started and is ongoing.
Business Unit Performances
Higher trading and post-trading activities led to a profit contribution by the business unit Securities & Exchanges of CHF 128.7 million, representing a 59.4% increase compared to the same period in the previous year. SIX recorded two company listings in the first half of 2020: V-ZUG Holding AG and Ina Invest Holding Ltd.
In March, SIX registered the highest weekly trading turnover in its history. The record-high volatility during that time was managed without any problems. Stable and secure financial market infrastructures are crucial, especially in highly volatile times. They guarantee that all participants of capital markets can rely on the orderly functioning of exchanges. This has never been more apparent than during COVID-19.
With CHF 10.0 million, the Banking Services business unit reported a decline in year-on-year profit contribution (-30.2%). Following the downswing in the cards and cash spheres resulting from the COVID-19 induced lockdown, the business unit saw a quick recovery. Card transactions stabilized in June re-bounding back to pre-COVID-19 levels. ATM transactions are still recovering from the pandemic and the corresponding travel restrictions.
In mid-May, SIX launched b.Link, a central platform for the standardized sharing of data between financial institutions and third-party providers. The launch was supported by KLARA as well as Credit Suisse, Neue Aargauer Bank and UBS.
In June, the new QR-bill was launched in Switzerland, modernizing and making Swiss payment transactions easier, faster and more efficient. The new QR-bill will gradually replace the current payment slips.
The business unit Financial Information increased its profit contribution to CHF 53.2 million (+8.6%). This was partially due to lower operating expenses. A slight decrease in revenues was the result of unfavorable foreign currency exchange effects. This decrease was almost counter-balanced by the sharp growth in the indices business and in tax and regulatory services.
In January, Marion Leslie started as the new head of the business unit. A strategic review was also conducted in the first quarter of 2020 to make the business unit more competitive for the future, and to define key growth areas. The review has been completed and the implementation of the new strategy has started.
As a newly acquired company within SIX, BME’s financial figures were only accounted for in the period since closing. Profit contribution was CHF 15.1 million for the period after closing until the end of June. As with the Swiss Exchange in Switzerland, the markets and systems managed by BME in Spain remained open and continued to operate normally during the State of Alarm decreed in Spain as a consequence of COVID-19.
Three new companies joined the Alternative Stock Market (MAB) in the first half of 2020: GAVARI PROPERTIES SOCIMI, Home Capital Rentals, Making Science.
On 4 June, the Latam Exchanges Data – a joint initiative of BME and the Mexican Stock Exchange - was launched to promote the generation, distribution and sale of benchmark information for Latin American financial markets.
Outlook
In the upcoming months, SIX will continuously be working on its key projects in order to promote the growth of the company and further drive the transformation of the financial markets in Switzerland and Spain.
The operational and strategic integration of BME into the SIX organization will be one area of focus. The implementation of the new strategy for the business unit Financial Information is another. The latter includes a stronger focus on client needs, analytics and alternative data covering environmental, social and governance criteria (ESG), as well as the alignment of the international organization.
Furthermore, SIX continues to support the offer of Worldline to acquire Ingenico. The investment of SIX in Worldline continues to be of highly strategic importance for SIX. SIX intends to remain a medium to long-term shareholder in Worldline, fully committed to its continued role on Worldline’s board of directors.
On a final note, uncertain market developments as a result of COVID-19 are expected to continue to significantly affect the various business areas of SIX. In the past months, the business model and systems of SIX have proven to be highly resilient to any challenges that might arise.
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* Year-on-year comparisons are excluding BME contribution since closing.