SIX Group has significantly strengthened the competitiveness of the Swiss financial center in the volatile Corona year of 2020 – with support from Spain and France.
Swiss exchange operator SIX Group has demonstrated operational stability in a challenging environment, according to a statement released on Wednesday. It benefited from the contribution of Bolsas y Mercados Españoles (BME), which the Swiss exchange acquired in 2020.
SIX's operating income in 2020 was 1.4 billion Swiss francs ($1.5 billion), up 21.8 percent from the previous year. EBIT and profit were also positively impacted by the strong financial result. The successful acquisition of BME will further enhance SIX's profitability and competitiveness.
Two Key Drivers
The substantial year-on-year increase in operating income is attributable to two main drivers: First, following the successfully completed acquisition of BME, SIX benefited from the additional contribution of the Spanish financial market infrastructure from the closing of the transaction in June (at 196.6 million francs).
Secondly, the high level of trading activity on the stock exchanges boosted the contribution from the securities and exchanges business unit (plus 11.7 percent), with the fact that SIX held a market share of almost 100 percent in trading in Swiss equities due to the continued suspension of EU equivalence having an impact here.
Largest Corporate Shareholding
In addition to the strong operating performance, SIX's non-operating financial result of 273.8 million francs was also significantly higher than the previous year. First, the sale of 10.1 million Worldline shares (5.5 percent of the share capital of the French company) brought realized capital gains. Secondly, Worldline acquired payment services provider Ingenico in October through the issuance of new shares, which also had a positive impact on SIX's financial result due to a higher valuation of the Worldline shares remaining in SIX's possession.
Worldline remains SIX's largest corporate investment. However, SIX's shareholding in Worldline has decreased from 21.8 percent to 10.7 percent compared to 2019 due to transactions executed on both sides. In SIX's income statement, this is reflected in the item «share of events of associates and joint ventures» (minus 77.5 percent compared to the previous year).
Strong Financial Result
However, SIX remains Worldline's largest shareholder, with a shareholding of around 10.7 percent and voting rights of around 21.1 percent, and additionally participates in the growth in digital payments through this stake. Worldline's share price rose from 63.15 euros to 79.10 euros in the year under review (plus 25.3 percent).
On balance, the high financial result strengthened earnings before interest and taxes (EBIT) and consolidated net profit in the reporting year. This resulted in a significant increase in earnings compared to the previous year: EBIT amounted to 516.6 million francs (previous year: 168.0 million francs), while net profit was 439.6 million francs (previous year: 120.5 million francs).
Further Acquisitions
In order to continue to be successful in a competitive market environment, SIX is examining organic growth opportunities in all business areas, as well as acquisition opportunities and partnerships. In parallel with its focus on growth, SIX is concentrating on the integration of BME and will continue to drive this forward in 2021 in order to benefit as quickly as possible from the expected economies of scale and synergy effects.
