Hello, and welcome to the Euronext Q3 2018 Results Call. Throughout the call, all participants will be in listen only mode. And afterwards, there will be a question and answer session. Just to remind you, this conference call is being recorded. Today, I am pleased to present Mr.
Stefan Boussner, CEO and Chairman of the Managing Board of Euronext. Please go ahead with your meeting.
Good morning, everybody, and thank you for joining us this morning for the Euronext Q3 2018 results conference call and webcast. I am Stephane Boulnath, CEO and Chairman of the Managing Board of Yonext, and I will start with the highlights of Q3 2018. Georgiou Modica, your next CFO, will then develop the main financials for the Q3. We will both welcome your questions at the end of the presentation together with Antoni Attia, Member of the Managing Board of Euronext. And let me start with Slide 5.
As you may have noticed when you received the various materials this morning, we have applied this quarter IFRS 15 like some of our peers. In brief, part of our listing revenues have been deferred according to the principles of IFRS 15 for a period ranging between 3 5 years. In this respect, I would like to highlight that all the Q3 2018 figures in this presentation are displayed, including the impact of IFRS 15. In addition, for the sake of clarity, we have highlighted the changes excluding the impact of IFRS 15 and we have added in appendix a reconciliation table detailing all changes to the P and L and opening balance sheet. We will be happy to take any questions during the Q and A.
Moving back to the performance of the quarter. Clearly, Euronext reported a strong Q3 2018. First, revenue increased by plus 17.2 percent or plus $22,000,000 to $150,900,000 in Q3 2018, thanks to the growth across all business lines. In our core equity franchise, market share and cash trading remained strong at 65.7% and the yield remained robust at 0.52 bps. 2nd, core business costs are down minus 8.2% year on year.
This decrease in core business costs does offset part of the cost increase linked to the consolidation of the new acquired businesses and the deployment of ongoing projects. 3rd, as a result, group EBITDA increased this quarter by plus 26.4% compared to Q3 2017 to €87,800,000 EBITDA margin was at 58.2%, up 4.2 points compared to last year. Finally, the good revenue performance of the quarter, coupled with continuous cost control, translated into a +31.6 percent increase in reported net income to EUR 50,500,000. Adjusted for exceptional items and the PPA related to recent acquisitions, Q3 2018 adjusted EPS increased by plus 31% compared to last year to €0.85 If we look at the performance since the beginning of the year, EBITDA margin is above 58% at 58.4% and adjusted EPS is at EUR 2.63 per share, up plus 25%. Moving to Slide 6.
I would like to share with you 4 key takeaways in relation to the status of the various 2019 targets announced in May 16 as part of our Agility for Growth strategic plan. You will remember that in May 16, we set 4 main objectives for 2019. First, deliver value to shareholders through a targeted 61% to 63% EBITDA margin for the core business, excluding Clearing and Selected Growth Initiatives 2nd, strengthen the resilience of the core business with a targeted average market share of 60% on cash trading 3rd, enhanced agility, which was translating into a targeted growth cost savings of $22,000,000 by the end of 2019 and grow in selected segments with 7 growth initiatives with targeted objectives to generate €55,000,000 of revenues at 50 percent EBITDA margin. Out of these four targets, we wanted to let you know where we stand today. 1st, we are delivering value to shareholders.
We are very proud to announce that over the last 12 months, EBITDA margin on the core business, excluding Clearing and Selective Growth initiatives reached for the first time and 1 year in advance the 61% level, which is within our 2019 target. 2nd, we have strengthened our resilience in the core business with a strengthened position in our core cash trading business. Since 2017, our market share in cash trading improved to above 65% on average and our yield grew to above 0.50 bps. These metrics are both higher than the initial targets set in May 16. 3rd, we have enhanced our Agility with more than $24,000,000 of cumulative savings since May 16, above the initial $22,000,000 target for the end of 2019.
This objective was reached 1 year in advance, while spending significantly less restructuring costs than originally anticipated. 4th, with regards to our selected growth initiatives, 2 growth initiatives, first the Synab MTS and the European family of indices with Morningstar are live, but they have not generated nor are making progress in line with our expectations. For that reason, we do not expect them to contribute the $20,000,000 incremental revenue in 2019 as originally planned. Let me emphasize 3 important caveats in this respect. 1st, some growth initiatives are performing in line with our expectations.
In particular, corporate services is performing according to plan. The European Tech Hub for SMEs has been deployed and has a strong pipeline. The MTF for
ETF, ETF access is planned to
be live in 2019. 2nd, Euronet will maintain a strong focus on the development of these initiatives. Other initiatives in the peak world and market data and indices spaces are also being explored. In particular, we have launched new family new indices that are working very well. 3rd, I would like to emphasize that the company has significantly increased its size, thanks to the acquisitions performed compared to what we were when we planned the Agility for Growth initial strategy in May 16.
As usual, we will provide you with a full annual update on our strategic plans during the full year 2018 announcement next February. I now leave the floor to Georgios Modica for
the detailed presentation of our Q3 financial results. Thank you, Stephane, and good morning, everyone. Slide 8. As mentioned by Stefan, I would like to highlight that in the Q3 of 2018, Euronext implemented an accounting change retrospectively as from the 1st January 2018, leading to the reassessment of the time recognition of part of our listing revenues, namely IPOs and follow ons. As a result of the application of IFRS 15, the recognition of such revenues will be deferred for a period ranging between 5 3 years.
Going forward, this change will smoothen the P and L cyclicality of our listing business today, characterized by stronger Q2s and Q4s and softer Q1s and Q3s. In the Q3 of 2018, the impact of this accounting change is $4,300,000 positive on the P and L and minus nearly $57,000,000 on the opening equity. You will find the full reconciliation table in the appendix of this presentation. Including the impact of IFRS 15, Euronext consolidated revenues increased $22,000,000 or 17.2 percent, dollars 250,900,000 mainly thanks to the growing contribution of our revenue diversification initiative with Euronext Dublin contributing $8,100,000 FastMatch 5.4 dollars and the new Select and Grow initiative $4,400,000 Excluding the impact of IFRS 15, revenues would have grown 13.9 percent to $146,700,000 this quarter. Looking now at the different businesses.
Listing revenues increased significantly to $27,800,000 up 37.6 percent versus last year as a result of the consolidation of Euronext Dublin and the performance of corporate services. Trading performance was good across all of our asset classes with more than 7,700,000 increased revenues year on year. Post rate revenues were up $1,900,000 thanks to the good performance of clearing, custody and settlement. Market Data and Indes' performance was strong with revenue up 16.7 percent to 29 point $4,000,000 as a result of the new market data agreement in Euronext Dublin. Finally, volume related revenue accounted for 54% of total group revenues, while the operating cost coverage ratio reached 110%.
Now move to Slide 9 and listing. Listing profited for the contribution of Euronext Dublin for $5,400,000 and of corporate service for $4,000,000 This translated into a 37.6 percent revenue increase to $27,800,000 Excluding the impact of IFRS 15, listing revenues would have grown by nearly 17% to 23,500,000 dollars Let's focus now on equities. Primary market activity and follow ons were soft this quarter as the market environment remains mixed and investor adopted a more cautious and selective approach towards IPOs. Euronext had 7 new SME listing this quarter. On the debt front, our franchise benefited from the consolidation of Euronextablin that, as highlighted, contributed significantly to the growth of revenues.
Moving now to the cash trading in Slide 10. As usual, Q3 suffered from the drop of trading activity linked to the summer break. However, cash trading revenues increased 9.2 percent to $48,500,000 thanks to higher volumes, yield and market share. More specifically, in the Q3 of 2018, ADV increased 4.7% to €7,200,000,000 market share was strong as well at €65,700,000,000 up 0.5%. HIL was up 4.2 percent to 0.52 basis points.
Conversely, ETF trading suffered from the poor volatility of the market, while the number of ETFs listed on our markets increased to 11.25 at the end of September. Slide 11, double digit growth for derivatives with revenues increasing 11.6 percent to $11,000,000 thanks to the improvement registered in both volumes and revenue capture. The yield is up this quarter to €0.31 compared to €0.30 in the Q3 of 2017 and ADV are up 8.5%, mainly driven by the growth in individual equity option and the strong performance of commodity with ADV up 27.1% compared to last year. In this respect, the new market participant program designed to develop the non physical commodity market was instrumental to that performance. Finally, Fosmetz generated €5,400,000 this quarter in revenues with spot FX ADV up nearly 6% in the Q3 of 2018 to USD 19 400,000,000 supported by the summer volatility in emerging markets.
Moving to Slide 12, market data in India has performed well this quarter, up nearly 17% to €29,400,000 supported by the new market data agreement and the consolidation of Euronext Dublin. Revenue from market solution and other increased 10.4 percent to €9,100,000 The business benefited from the 1st commercial releases of OPTIC for international clients and from increased activity in safety and color services. Clearing revenue increased 11.6 percent to $14,200,000 reflecting the good performance of commodities during the quarter and higher treasury income. Revenue from custody and settlement increased 7.4% to 5,400,000 dollars driven by an increase of public debt and equity under custody at Interbosa. Let's move now to Slide 13 and start with the EBITDA bridge.
EBITDA grew by 26.4 percent to 87 $800,000 with a margin of 58.2%, up 4% versus the Q3 of 2017. The key drivers of this performance are revenue up $22,000,000 and cost saving on the core business, which partially compensated the additional cost of the New Perimeter. Operational expenses, excluding D and A, grew 6.5%, mainly due to the impact of new acquisition, namely Euronext, Dublin and Fasmedge, while the core business costs decreased above 8%. In this respect, it is important to highlight that the target of €8,000,000 savings expected for Euronext Dublin are not yet reflected in the reported figures. Cumulated core gross cost savings amounted to $24,200,000 this quarter with an increase of more than $5,000,000 versus the Q2 of 2018.
As Stefan reminded, with this performance, our cost saving target for the core business is achieved 1 year ahead of schedule. If we look at the margin of the core business and of the selected growth initiative perimeter excluding clearing and new perimeter, of course, the EBITDA margin reached 62% this quarter, up 7 percentage points. Furthermore, for the last 12 months, the EBITDA margin for this perimeter reached for the first time 61% within our 61% to 63% 2019 target. Moving now to the net income bridge. D and A are negatively impacted by $2,100,000 of PPA for Fast Match, iBabs and neuronextabulin as well by the DNA of the acquired businesses.
Exceptional items show a small reduction despite they remain elevated at $8,800,000 this quarter versus $9,700,000 in the Q3 of 2017. This quarter, exceptional items derived mainly from the agreement for the early termination of the trading service contract provided by Deutsche Borse the Aristock Exchange, advisory costs and some impairments linked to sign ups. Results from equity investments reduced €900,000 as the income of our 11.1% stake in LCHSA accounted as an associate since 2018, only partially offset the deferred capital gain on ACH Group recorded last year for €1,700,000 The increase of taxes is due to the increase of the taxable income despite the decrease of the marginal tax rate down to 30.7%, mainly due to the consolidation of Euronextw. For the Q3 of 2018, this translates into a reported net income increase of 31.6 percent to 50,500,000 dollars Adjusted for these exceptional items and PPA, adjusted EPS is up 31% at €0.85 compared to €0.65 in the Q3 of 2017. Moving to Slide 14.
In the Q3 of 2018, the net operating cash flow increased from $69,500,000 to $87,800,000 while the EBITDA conversion ratio decreased to 80.6%. This slight reduction of EBITDA cash conversion is mainly linked to the increase of the tax paid as a result of the increase of taxable income between 2017 2016. As far as leverage is concerned, our net debt remains limited, providing for significant strategic and financial flexibility. Looking at the bottom of the slide, As of the end of Q3 of 2018, our liquidity position remains strong with more than €650,000,000 of cash, including our own drawn LCF of €250,000,000 I now leave the floor to Mr. Svan Buschner for his final remarks.
Thank you, Georgios. Before moving to the Q and A, I'd like to share with you a few points of confusion. First, Q4 has started very well. October volumes are up 20.2 percent to €8,900,000,000 cash ADV, with clearly the return for the moment of volatility on our markets. 2nd, as I said earlier, we will provide you, as usual, with a full annual update on our Agility for Growth strategic plan during the full year 2018 announcement on the 15 February 2019.
Finally, the perimeter of the company has significantly changed since May 2016 with new asset classes and new businesses. So it is important for us to grow Euronext on the basis of this new perimeter. Accordingly, we will present a new strategic plan for the years to come next spring. We will soon communicate the exact date. So now, Antonia, Thiago, Modica and I are available for your questions.
Thank you.
Thank are being registered. So we have the first question from Ron Edgenrich from ABN AMRO. Please go ahead, sir.
Good morning. It's Ron Hedrenich, ABN AMRO. Two quick questions. One is the IFRS 15 impact of €4,300,000 which exact P and L line and listing does that fall into? And secondly, could you maybe give us a breakdown of the €8,800,000,000 in exceptionals between the impact of the Deutsche Borse unwind with ISE impairments and
what was it again, the additional advisory costs?
Yes, absolutely. So let me start with IFRS 15. This impact only one line, which is listing and more specifically, equity, IPOs and follow on and bond listing. For the second question, out of the 8.8 percent, in line with the press release that we issued earlier this year in September, the portion related to DB is slightly less than 50% of that, is slightly more than $4,000,000 Then you have 3 impacts, which would nearly the same size and these those are the impairments, the advisory cost and some smaller restructuring for the ongoing activity of Euronext.
Very clear. Thank you.
So we have another question from Anil Akbar from Kempen. Please go ahead.
Hi, guys. I have two questions. One is regarding your yield, that the yield, if you look at it in the past few years, has ticked upwards. How exactly is that happening? And is that an impact of MiFID II?
What exactly is going on over there? And how is the yield so strong for you guys, especially in an environment where like most of the trading exchanges are facing pressures on their yield maintenance? The other thing the other question is on your market data revenue. Over there, you guys have pointed out that the or as we discussed earlier in earlier calls that basically, this revenue has increased right now because of the new pricing plan. But in the future, you expect sort of a normalization.
So what do you see over here as where do you see this going? Or should we consider the current like 16% as sort of maintainable? Or what do we expect going forward? Thank you.
[SPEAKER MARTIN PEREZ DE SOLAY:] Yes. Thank you for your question. Let me get the 2 questions. So when it comes to the yield, the improvement is mainly linked to a better segmentation of the volumes and to the programs that we launched now more than 1 year ago and more specifically the Omega Pack and the Best of Book that pretty much are priced on average at premium with respect to the cheapest liquidity scheme that we have in our fee grid, which is the S and P program. So we have, to a certain extent, improved the segmentation, adding more quality into our fee schemes.
When it comes to the market data, you are exactly right. So we expect going forward an optimization of data consumption. But clearly, we as a management action, try to minimize that and to further improve revenues. So when it comes to the 16%, this comes mainly from a base impact year on year as the change starts January 2018. So you should not expect a further 15%, 20% increase next year.
However, clearly, one of the objective of our objective is to maximize those revenues. And therefore, we hope have an increase also next year. So but you should not look at 16% as a run rate for growth of our market data revenue.
Okay. Thank you very much.
So we have another question from Anil Sharma from Morgan Stanley. Please go ahead.
Hey, morning, guys. Two questions for me. So I hear what you're saying about a strategy update in spring or summer next year. But just could you help me understand, so you're saying the Synapse MTF in European Family of Indices, you don't expect €20,000,000 of contribution. So what do you expect?
Is the number 0? Or is there some positive number at all? And then secondly, obviously, on the EBITDA margin, you're at the lower end of the range. Is it reasonable for us to expect that you should still be getting towards the upper end of the range by 2019? Because I noticed also, Georgi, you said some of the Irish exchange synergies weren't in the numbers yet.
Okay. I'll reply to the strategic question and the selected growth initiative performance for 2019. And Georgiou will give you a precise answer to your question about the target for the EBITDA margin for the core business excluding clearing between 61% and 60 percent. As far as your first question is concerned, what we said is that by May or June 2019, we will release a new strategic plan for the years to come. And that will take into account the new parameter of the company at that time.
As in any company which release a new plan before the end of Q1, including during the transition year, we will provide you an update of Agility for Growth strategic plan during the annual rendezvous for the review of this plan in February 2019. And clearly, we will observe the performance of the full plan in February 2020 on the basis of full year results of 2019. So one strategic plan for the years to come beyond 'nineteen to be released in May June annual point of assessment of the performance of the plan in February 'eighteen and in February 2019 and in February 2020. As far as your particular concern, first question is about the selected growth initiatives. We said that as part of our Agility for Growth ambition, which had the 3 other pillars I've described, One of them was to do some organic growth through 6 or 7 selected growth initiatives.
What we are saying is that 2 out of those initiatives will not contribute as expected and will not contribute roughly €10,000,000 each in 2019. And therefore, the top line for those the expected top line for those 2 initiatives will not be there in 2019. We don't say more than that. We are going to we were deploying a lot of efforts to minimize the gap between the target, which we released in February 2018 which was €55,000,000 of selected growth initiatives or organic growth revenues and the reality, but we will provide you with a full update in February 2019. On the EBITDA?
Yes. Let me get that, Stefan. So clearly, the 61% being LTM last 12 months includes the 4th quarter of 2017, there has a profitability of 56%, which is on average lower than the profitability we are we have at the moment and the profitability we registered in the 1st 3 quarters. So I mean the 61% with the new quarter should go up And clearly, our cost discipline will remain there. But this is all what I can say.
We will not release a new target at the moment.
So we have another question from Arnaud Giblatt from Exane. Please go ahead.
Yes. Good morning. Two questions, please. First, on the Agility for Growth. So you're saying because you didn't give the split previously that 6 or 7 initiatives made up 55,000,000.
You're not going to get the contribution from 2 of them, which will lack 20,000,000 of contribution. Did you in your 55,000,000 assumption, was that were you assuming 100% contribution from each initiative? Or was there some lead way for some mix successes? My question is basically should we be chopping €20,000,000 off the €55,000,000 target? The second question is on M and A.
So you were in the final rounds of bidding for market serve. The price movement was was seemed pretty high. And well, there was no deal. I suppose it looks like buyers and sales expectations were not met. How far away were you from closing on that deal?
What sort of ROICs were the prices they said are looking for on your side? What does the ROIC look like if we just stop that deal? And is there anything else out there that you are you working proactively on other deals? Thank
you. Okay. I'll take the M and A question and then Georgiou will give you a precise answer to your questions about the selected growth initiatives that were part of our geological growth plan. We don't comment on market rumors. What I can tell you is that Euronext is a company which is very disciplined on operating performance and very disciplined on acquisition.
And we are not going to pay for an asset value that would not reflect our ambitions for growing any company. So the decision taken by IHS Markit not to proceed with the sale is the decision that they have taken on their own. So we don't I'm not in a position to make any further comment. That's for the M
and A. Yes. On the M and A, the general principle, which is not specific to any transaction, remain the same. So our return on invested capital is always in terms of targets is always between 8% 9%. So you should not expect pricing of any assets that significantly moves away from that interval.
And when it comes to Agility for Growth, I understand where you're coming from. But the reason why we released the statement that we no longer expect the $20,000,000 is exactly because in the regular assessment of those two initiatives, it seemed to us that we were not able to reach the target and we felt the need to communicate that to the market. But that doesn't mean that at the moment we have done a complete assessment of all the initiatives and all the opportunities we have to mitigate the gap with respect to the 55. Percent. So for this quarter, the update is the $20,000,000 which does not mathematically translate in the new target.
As far as the new target is concerned, we will proceed as always did, I. E, with an annual update as of February 2019.
Okay. And could you also I forgot a question. With regards to the synergies on the Irish Stock Exchange, you mentioned that these have been fully realized yet. How much is left to be realized next year? Thanks.
At the moment, the vast majority. So the integration is proceeding according to plan. So the new target operating model is defined and is being executed starting the Q4 this year and then getting to the Q1 next year. The migration to Optic is planned for the Q1 next year and those elements will generate or will deliver the bulk of the synergies that you're referring to. So at the moment, pretty much nothing is factored into the into our numbers.
Thank you.
So we have another question from Mr. Albert Ploch from ING. Please go ahead.
Yes. Good morning. It's Albert Ploegh from ING. Three questions from my end. First of all, I heard what you mentioned on the M and A and on the strict criteria.
If I'm not mistaken, you have also said in the past, if nothing materializes, you could contemplate on some kind of special capital return. Also, I heard what you said on an update in May, June, more strategic update. So should we therefore more think of anything, let's say, on special capital return after that event? Or could it still be an event planned for February 2019 when you come with the full year results? Savings, you're not giving a new target currently.
But simply, you're now €24,000,000 realized, you say still the majority of the €8,000,000 for Dublin should be still, yes, still the majority of the €8,000,000 for Dublin should be still being realized. So mathematically, you could have already said something like €30,000,000 32,000,000 could be a new target. So why did you refrain from this because I'm struggling how you plan to communicate further on the cost efficiency? And then the third question is on the restructuring expenses. I think it was something for €40,000,000 also for Dublin and you still have on your budget where you're still quite a big gap of €90,000,000 for Teresa €33,000,000 So can you help us a little bit on what to expect for Q4 and how that will phase into 2019 in terms of the restructuring costs?
Thank you.
Okay. I'll take the first question capital return and Georgio will comment on cost and cost target expectations and then the restructuring expenses in the context of Dublin. On capital return, we have always been very, very clear. The ambition of Euronext is to deploy capital to grow the company significantly, albeit in a disciplined manner and to do it within this plan. This plan ends at the end of 2019.
So we still have full year to deploy to make significant acquisitions to deploy our capital. We will decide with the Supervisory Board where we are after the current plan is completed at the end of 2019, whether it is appropriate considering the situation of our capital situation at that time at the end of the 2019 plan to proceed with special distribution. As I said on many occasions, if by the end of 2019, we still are in a situation where we have not found financially attractive opportunities to deploy our capital. We will proceed after the end of the plan, after the end of 2019 towards a distribution of special dividend.
Now in
terms of cost targets and restructuring of expenses in Dublin.
Yes, absolutely. Let me clarify that. So we have 2 different focus. And apology for the complexity, but as Stefan reminded, they were very different from where we were. So and then now we have a different set of objectives.
So the objective released on May 16 was ready for the core business and the target was to achieve $22,000,000 of saving spending restructuring cost for $33,000,000 Now with respect to that very specific objective today, we are 24 savings achieved and having spent around $13,000,000 $14,000,000 out of the initial pocket of $33,000,000 with a significant saving of around $20,000,000 And on that part of the business, we don't provide an update at the moment. Then when it comes to the Irish Stock Exchange, this comes with a different set of objective in terms of cost saving. And as you rightly pointed out, the €8,000,000 The €8,000,000 are to be achieved with a spend of $14,000,000 in terms of restructuring costs. Now where do we are? Where are we on those targets?
As I said, out of the $8,000,000 dollars a very small fraction of that has been achieved so far. So you should expect the bulk of it coming in the next 2, 3 quarters. Conversely, when it comes to restructuring costs, around twothree of the restructuring costs have been already provisioned in the P and L to exceptional items in the last quarters. So restructuring costs, pretty much everything was 2 third were already booked, but the savings are not yet reflected in our P and L.
Quite a drop in the non comp expense base in Q3 for Euronext versus Q2 by about my number is about 18%. I was just wondering what drove that decline and whether that's going to be sustainable, if there's any one offs in there? And then second, given the changing perimeter of Euronext, can you update us on your 2018 tax rate guidance for the full year? Thank you.
Sorry, can you repeat your second question?
Yes. I was just wondering if you can update us on your guided tax rates for full year 2018.
Yes. So let me take your question. So the decrease in cost is mainly coming from the conclusion of part of the optic works and through the release of a good portion of the consultants that have helped Euronext in deploying the IT platform that is running the core market since mid-twenty 18. So yes, it is sustainable when it comes to the non comp part of our costs. When it comes to your second question, the tax rate for the end of the year should be around 30.5%, 30.7% around that.
So this is what we're targeting for the full 2018.
Thank you very much.
So we have another question from Mr. Martin Price from Credit Suisse. Please go ahead.
Good morning. I just wanted to come back quickly to the revenue growth initiatives within the scope of Agility for Growth. Can you just confirm that the other initiatives, other than the 2 you've highlighted, are still on track? Thank you.
Yes. No, as I said, those two initiatives will not contribute in 2019 to what was expected. But we have a much more positive outlook on other initiatives. Clearly, we are extremely confident with the deployment of ETF access, which is the MTF for ETF, which will be live in 2019. And we are extremely happy and enthusiastic about the growth of our of 2 initiatives which are in the listing world.
The first one is the corporate services which are producing the revenues that were anticipated. And the other one is the European Tech Fab. But I'll give the floor to Anton Yata, who is our Global Head of Listing and who oversees both those initiatives.
Good morning, everyone. A few words on the corporate services initiative. As Stefan said, we delivered according to plan and the commercial intensity is there. As you remember, it's the combination of 3 acquisitions, the company webcast, IBABS, the inside the log with some organic growth in order to service our issuers with post listing, post IPO services. And so the growth is coming from standalone growth from the acquisitions, cross selling and also the commercial reach of the Euronext brand on these new services.
On the other initiative that Stephane has mentioned, it's called the European Tech Hub. We are also deploying Euronext brand in 4 selected countries, Spain, Italy, Switzerland and Germany. We have a very strong pipeline and we already delivered on 6 new operations this year and we are expecting more in the coming months to come.
That's very helpful. Thanks guys.
We have another question from Johannes Thormann from HSBC. Please go ahead.
Good morning everybody. Johannes Thormann, HSBC. Just a little question. First of all, on Euronext Dublin, Irish Times reported that you're thinking about moving the settlement. Could you elaborate on this a bit?
What your thoughts are behind this? Secondly, looking at your Fast Match margin as a simple calculation of revenues divided by volumes, it seems we have seen a nice uptick in the Q3 versus the previous quarter without like FX explaining it fully? Have you changed pricing? Or what has driven this? And the last thing is on your net financing income, which was positive this quarter.
Will it be positive also in the next quarters? Or do you expect it to come back to be negative again due to the regular interest expenses? Thank you.
I'll take the first question on Ireland and Georgiou will take the following two questions. So on Ireland, we have comprehensive dialogue with all the market participants in Ireland and with the various players in the clearing industry in Europe and with the European Commission and with the Irish authorities, the Central Bank of Ireland and the Department of Finance of the Republic of Ireland to build together the most appropriate solution going forward, post Brexit for the settlement and custody of Irish securities. This dialogue is very productive, is developing in a constructive spirit. And the objective of this dialogue is to maximize continuity and to minimize operational difficulties for the various users of settlement and customer services. And we are confident that within a very short timeframe, we will be able to go public with a solution that is that makes everyone comfortable.
Yes.
Now coming to your question on net interest income, what you should be aware is that we swapped our bond into a variable, which means that we have derivative instruments that converts the fixed rate into a variable interest rate. Clearly, this is a hedging the derivative, but there is a very tiny portion that every quarter is ineffective and that portion goes through the P and L. And this explain the slightly positive or negative result that you have seen in the last quarter. So you should expect a very small number either positive or negative next quarter. When it comes to the condition of the swap, what we are actually paying on the €500,000,000 bond is Uribour 6 months plus 38 basis points.
Okay. And the Fast Match margin, please?
Yes. Let me answer to that question. So what I can tell you is that we did not change the pricing. And if I look at the average fee per million in U. S.
Dollar has not changed significantly in the last three quarters. So in the Q3 of 2018, we are pretty much where we were in the Q1 of 2018, slightly up with respect to the Q2. But this comes more from slightly different mix of clients quarter by quarter than by a change in fee by itself. So no, we did not implement any fee change in Fast Match.
So we have no more questions for the moment. So we have another question. Please introduce yourself and ask your question.
Hi, Stefan. It's Philip Stafford from the Financial Times here.
Good morning.
Hi. Just a question just again about Agility for growth here. We started off a few years ago with additional revenues of $70,000,000 Then it came down to $55,000,000 Now it's down again somewhere. It kind of almost looks like it's produced almost as much cost as it has in revenues. How can we be sure that the next set of forecasts will be any more credible than the last lot?
Thank you for your question. I'm not sure the word credible is the most appropriate because we know we wanted to be very transparent and be clear with you and with the market and to indicate clearly that €20,000,000 out of the selected growth initiatives which were part of the Agility for Growth ambitions were at risk and that it was safe to guide the market towards the fact that those €20,000,000 will not be generated by the end of 2019. These selected growth initiatives were part of the Agility Crew Growth plan and ambition, which was much bigger and which had various ambitions in terms of strengthening the core business and the effort done on the market share in terms of delivering values to shareholder and the EBITDA margin that we have reached 1 year end ahead of schedule, which was all about all sorts of objectives in terms of cost reduction to enhance agility, where we have delivered a performance which was stronger than expected 1 year ahead of schedule. So the company as a whole, not to mention the additional acquisitions that were made 2016 is stronger and bigger and deliver more values than what it was in 2016.
One part of this ambition was to develop organic growth. Where you are absolutely right is that we do not deliver organic growth with the level anticipated in May 16. Some initiatives were not were more innovation than growth and we have explored them in an innovation format and they are not delivered. Others are live in terms of platform, but the migration of liquidity is getting much lower than expected. And others are very successful as indicated in the numbers that you have already in the books today for mainly corporate services and are promising as indicated by Antonietta earlier.
So as much as we update real time about the development of of the top line of those initiatives. We want to pause only once a year at the annual review of the overall Agility for Growth strategy in February 2018 to give the full perspective above and beyond those organic growth initiatives. But you're right, we are not going to make 70. We said that in February. We are not going to make 55.
I don't know for the moment because there are several projects ongoing what will be the gap between €55,000,000 and the guidance that we will deliver in February 2019 considering on the one hand those 2 initiatives that don't yield €20,000,000 and the developments that are ongoing for the moment.
Thank you.
So we have another question from Ellie Dunley from Irish Independent.
Under the cost saving plans for Dublin, will there be any further redundancies?
Let me take this question, Stephane. No, the target operating model for Euronext Dublin has been defined earlier this year and is going to be implemented as planned. So there is no change with respect to what was originally planned.
So there will be no further redundancies other than what was confirmed earlier this year?
Absolutely.
Perfect. All right. Thank you.
So we have no further questions.
Thank you very much. Have a good day.
This now concludes our conference call. Thank you all for your participation. You may now disconnect your lines.