- Wiener Boerse AG earnings 2019: revenues EUR 66.8 million, profit before tax EUR 34.2 million
- Sharp decline in trading activity by market participants largely offset by growth in other areas
- Stock exchange operations ensure transparency in the crisis
- Call to use the capital market as a tool to overcome the crisis, activating as much private capital as possible to relieve public budgets
(Vienna) Wiener Boerse AG reviews its financial year 2019 and provides insights into its current initiatives. The expansion of trading services, three IPOs, new SME segments and growing bond listings demonstrate the attractiveness of the Vienna marketplace for companies. In a consolidating market that continues to be subject to strong regulatory burdens, equity trading throughout Europe declined. In this challenging environment, the exchange operator expanded its market share and its position as an infrastructure provider. Trading hours and quotation lists were extended, and the IT services, market data and central securities depository business areas recorded significant growth. This compensated for declining revenues from trading and kept the result stable and above budget.
"The Vienna Stock Exchange delivers convincing quality and new initiatives in a challenging competitive environment. It provides the best possible infrastructure for Austrian companies, global investors and regional partners. With a view to post-Corona times, the government is well advised to activate private capital and make best use of the stock exchange so that the Austrian economy can recover more quickly", said Heimo Scheuch, Chairman of the Supervisory Board of Wiener Boerse AG. "What is so striking about the public stock market is that no other instrument can simultaneously provide more financing, visibility for the company and ensure a sustainably professional corporate organisation. This is exactly what will be needed after the Corona crisis, even though lending is currently still the main focus".
Balance sheet & review 2019: Stability through broad diversification
Company revenues amounted to EUR 66.8 million in 2019, a slight decrease of 3.3% (2018: EUR 68.9 million), which was primarily due to the declining activity of trading participants (Vienna 2019: EUR 62 billion, 2018: EUR 70 billion, -12%, Prague: EUR 8.5 billion, 2019: EUR 11.1 billion, -24%). The reallocation of funds to North America and the uncertainties caused by the Brexit caused international investors to act more cautiously. Revenues in IT services developed very positively. Growth was also achieved in data business, listing, trading of foreign securities and custody services. The continued diversification thus almost completely compensated for the decline in earnings from trading. Costs and expenses were reduced by simplifying the group structure. Wiener Boerse AG generated a profit before taxes of EUR 34.19 million in 2019. This is 6.4% down on the previous year (EUR 36.52 million). The result is slightly better than the planning for 2019, which included some investments as well as accounted for a more restrained trading activity of the market participants. For 2020, significant growth is expected so far. The equity capital of Wiener Boerse AG amounted to EUR 143.3 million as of 31 December 2019, and the balance sheet profit for 2019 was EUR 26.4 million. At the end of December 2019, Wiener Boerse AG had 160 employees (full-time equivalent).
Like many of its listed companies, the Vienna Stock Exchange operates globally and generates 84 percent of its turnover with international customers. "Broad diversification and a strong footprint in the region make a significant contribution to our ability to achieve our annual targets. However, a stronger domestic shareholder base would by no means be just a mere showpiece for the stock exchange, but a solid support for crisis management and corporate financing. Countries with developed capital markets show more growth and recover faster from crises", says Christoph Boschan, CEO of Wiener Boerse AG.
Balance sheet Covid 19 pandemic: stock exchange as critical infrastructure provider
In the spring of 2020, both trading turnover and price fluctuations rose sharply. From the beginning of the year up to and including May 2020, equity trading volumes amounted to EUR 32.03 billion, a year-on-year increase of 21.4% (Jan-May 2019: EUR 26.38 billion). In managing high volatility and the surge of transactions, the exchange operator relies on proven protective mechanisms such as the volatility interruption. Wiener Boerse AG operated its infrastructure for nine weeks largely by means of remote access and teleworking. Since mid-May, operations at the site have been continued in alternating teams.
"In times of crisis, exchanges stand out through transparency. They offer a real-time display of economic health. If we are confronted with the question of closure every now and then, there is only one thing I can say: You don't throw away a thermometer when it shows elevated temperature," says Christoph Boschan.
Utilising the capital market to help the Austrian economy overcome the crisis
The Vienna Stock Exchange views the health crisis surrounding Corona as an opportunity to give private capital in Austria a more prominent role and to relieve the burden on national budgets. Crisis recovery must be put on a broader footing. The government programme already contains all the building blocks to activate more private capital for Austria. Consistent regulatory modernization and the strengthening of economic education in Austria are the basis for the further development of the capital market. The introduction of a retention period and thus a tax relief for long-term stock ownership will make participation more attractive for the population.
"Companies will need equity capital for their recapitalization when they tackle the crisis in autumn. In order for Austria's economy to recover more quickly, the path taken by the government before Corona must be continued swiftly. After the health crisis has been overcome, it is essential to secure the financial health and prosperity of all citizens in the long term," Boschan concluded.
About the Vienna Stock Exchange
As the main provider of market infrastructure in the region, Wiener Boerse AG is the gate to global markets. Operating the stock exchanges in Vienna and Prague, the group offers state-of-the-art systems, information and IT services. Listed companies receive maximum liquidity and investors benefit from fast and cost-effective trading by the market leader. Wiener Boerse AG also collects and distributes stock market data and calculates the most important indices of the region. Because of this unique know-how the national stock exchanges in Budapest, Zagreb and Ljubljana trust its IT services. Additionally, the group holds stakes in energy exchanges and clearing houses.
Exclusion of Liability
This press release may contain certain forward-looking statements and forecasts based on assumptions made at the time of publication of this press release. We do not assume any liability for the forward-looking statements and actual developments may turn out to be completely different. Furthermore, we would like to explicitly point out that this press release cannot serve as a basis for investment decisions and may not be construed as a solicitation to buy or a recommendation to invest by Wiener Boerse AG. No liability is assumed for the information given in this press release.
