SIX performed well operationally in the 2019 financial year and generated operating income totalling CHF1,129.7m. While reported operating income is around 50% less than in the previous year due to the carve-out of the card business in 2018, SIX achieved a year-on-year increase in the operating income of 1.2%.
Operating costs rose slightly compared with the previous year (+0.5%) due to expenses relating to regulatory projects as well as the substantial investment associated to the realignment of the company, launched in 2018. These investments include the continued expansion of the business units Innovation & Digital and Banking Services. The business also forged ahead with the build-up of the infrastructure for the SIX Digital Exchange (SDX), which is based on distributed-ledger technology (DLT).
Earnings before interest, tax depreciation and amortisation (EBITDA) of CHF 213.5m increased slightly compared with the previous year (+4.4%), despite substantial investments in technology and infrastructure. These high investment expenses will enable further efficiency improvements and stronger growth in the coming years.
SIX recorded a 24.4% increase in earnings before interest and tax (EBIT) to CHF 168.0m and a 26.9% increase in profit from continuing operations to CHF 120.5m. Group net profit of 2018 was affected by the one-off effect resulting from the sale of the card business and is therefore not directly comparable.
At CHF 506.3m, the Securities & Exchanges business unit in 2019 again contributed the largest portion of the SIX operating income. Despite considerable price reductions in securities trading and post-trade services, the operating income decreased only slightly compared with the previous year (-1.4%). SIX had seven initial public offerings on the primary market in the reporting period. The corresponding transaction volume totalled CHF 3.1bn, the fourth largest on a European exchange in 2019.
The trading turnover at SIX rose year-on-year by 8.5%. This increase was also due to the almost complete consolidation of trading in Swiss shares at SIX that was caused by the loss of EU equivalence which commenced in July, in connection with the Swiss Federal Council's measure to strengthen the Swiss capital market.
The trading turnover also had a positive impact on post-trading. Deposit volume averaged CHF 3.414bn during the year, which is 5.3% higher than in the previous year. In addition, the number of settlement transactions rose by 5.6%.
The Banking Services business unit of SIX, which generated an operating income of CHF 187.5m, realised the strongest growth by a business unit in the reporting period (+19.9%). SIX fully acquired SIX Interbank Clearing AG and the European correspondent bank Swiss Euro Clearing Bank (SECB) in the first quarter of 2019. The number of transactions in Swiss Interbank Clearing (SIC) increased year-on-year by 7.8%, the number of transactions in Euro Swiss Interbank Clearing (EuroSIC) by 9.3%.
Regulatory data and services, as well as the index business, continued to perform well in 2019 and realised significant growth. The growth in the demand for compliance and tax data was particularly strong. SIX also continued to benefit from global demand for its data services for detecting corruption and money laundering, with particularly high demand for their Sanctions Securities Monitoring Service.
A proposal will be made to the Annual General Meeting to distribute an ordinary dividend of CHF 3.90 (prior year: CHF 4.10) per share.
Thomas Wellauer was elected to the Board of Directors as of 16 March 2020 at an Extraordinary General Meeting on 11 December 2019. At the same time, the Board of Directors elected him to become the new chairman of the Board of Directors. He replaces Romeo Lacher , who announced his resignation as of 15 March 2020.
SIX aims to achieve a balance between investments in the stability, efficiency and security of its infrastructure, and investments in the development of innovative financial technology.
Authorisation of all-cash tender offer for BME by Spanish authorities (CNMV and Spanish Government) is expected until end of H1 2020.