Jos Dijsselhof, director of the SIX group, intends to pursue an active policy in terms of mergers and acquisitions.
Rising business volumes but declining profits. The various transactions related to mergers and acquisitions at SIX have led to strong fluctuations in the results of the operator of the Swiss stock exchange over the past two financial years. In 2021, the group’s net profit stood at 73.5 million francs, down 83% year on year.
In 2020, SIX’s results were however supported by an extraordinary financial gain resulting from the sale of a package of shares in the French company Worldline, whose capital is still 10.6% held by SIX against 27% previously. Without taking into account the effects related to Worldline, the net profit of SIX in 2021 would have increased by more than a third over one year to settle at 174.7 million francs (+37%), specified the company which has released its figures on Wednesday.
Conversely, SIX’s revenues – up 8.9% to nearly 1.5 billion francs in 2021 – benefited from the integration of the activities of the Spanish stock exchange Bolsas y Mercardos (BME), acquired in June 2020.
Five IPOs in Switzerland, three in Spain
By business sector, it was the Exchanges unit, which notably includes the Swiss stock exchange, which contributed the most to the group’s operating profit last year with a profit of 143 million francs, down 14% . After a 2020 financial year that had been marked by record volatility in the markets, transactions remained at historically high levels in 2021, estimated the SIX. During 2021, five initial public offerings (IPO) took place on the SIX Swiss Exchange, supplemented by three new listings on the BME in Madrid.
Achieve economies of scale through increased volumes.
The second most profitable business segment with an operating profit of 133.9 million francs (+23%), the Securities Services unit saw its results improve last year. One of the three companies acquired last year by SIX also reports to this unit, following the takeover of Regis-TR, a specialist in commercial referential in Europe.
In this respect, the SIX did not fail to underline that mergers and acquisitions will continue to be of strategic importance for the group in order to be able to strengthen its competitive position. By having higher volumes, the group intends to achieve additional economies of scale, which will enable it to reduce its costs. For the period from 2022 to 2024, SIX aims to increase revenues by more than 4% per year while achieving efficiency gains and cost reductions.
ESG information provider
The two other acquisitions made by SIX last year relate to the financial information segment, a unit which generated an operating profit of 54.2 million francs last year. The two companies acquired are Ultumus, a company specializing in data for ETFs and Orenda, a data provider related to environmental, social and governance (ESG) investments.
With this latest acquisition and following the launch of new sustainable indices, SIX places sustainability high on its agenda. With what long-term objectives? “We want, on the one hand, to make it easier for companies looking to raise capital by providing clarification in terms of sustainability, by providing a green classification that takes ESG criteria into account,” explains its director. On the other hand, SIX wants to position itself as a supplier of reliable information in the field of sustainability: “Our role here is to provide standardized, regulated and controlled data that can be integrated into different models used by banks, rating agencies or other players,” continued Jos Dijsselhof, director of SIX during a conference call on Wednesday. However, he adds, the company that operates the Swiss Stock Exchange does not plan, at least not in the near future, to assign sustainability ratings to companies itself.
Cybersecurity: constantly investing to face threats
Another unmissable topic of the moment in connection with the war in Ukraine, how does the operator of the Swiss stock exchange deal with the risks of cyberattacks? In terms of computer attacks, the SIX noted “higher activity at the very beginning of the war, or just before its outbreak,” said Wednesday its director Jos Dijsselhof, during a conference call. Afterwards, things gradually returned to normal, the manager said, assuming the hackers were busy with other things. However, the SIX does not lower its guard. “We have increased our control activities and increased our vigilance,” he said.
The director of SIX also recalled that the company has continuously increased its investments in the field of security in recent years. “A large part of the 200 million francs that we have invested in IT projects has been devoted to cybersecurity. This is an area where we must continually raise the standards applied because those who attack us are also constantly improving. It’s a permanent competition in a field that is constantly evolving, ”he puts into perspective. – (YH)