In a global situation that remains challenging, and is still impacted by the COVID-19 pandemic, SIX generated operating income of CHF 745.8 million in the first half of 2021.
This is a year-on-year increase of 19.5%, which can mainly be attributed to the fact that, following the takeover of BME by SIX, BME’s contribution was incorporated in the income statement only as of June 2020. This year, BME’s contribution is reflected in full. The adjusted pro forma figures* present a slight reduction (of 2.4%). This is mainly due to the normalization of market volatility compared with the record figures seen in the previous year, as well as a decline in the market share of trading in Swiss equities. Thanks to the mutual recognition of the equivalence of market regulation between Switzerland and the UK, some of the trading activities in Swiss equities moved to trading platforms in the UK from February. Before then, the SIX market share was almost 100%.
Due to the diversified business model of SIX and increased operating efficiency, the much lower volumes traded in securities in comparison to the previous year (SIX: -32%, BME: -21%) were almost entirely offset by the results achieved by the other business units. Debit card transactions recovered rapidly from the negative effects of the pandemic, while ATM transactions did not return to the level seen before the pandemic. Ultimately, earnings before interest, tax, depreciation and amortization (EBITDA) rose sharply (+49.2%) year-on-year, and this can mainly be attributed to the fact that BME’s contribution was only included for the month of June in the previous year. The adjusted pro forma figures indicate a slight decline (-2.9%).
Despite a solid operating result, group net profit fell year-on-year. This was above all due to the substantial contribution from investments such as Worldline in the previous year. No such effects have been observed this year.
Results of the business units
As of 1 January 2021, SIX bundled its securities business on a cross-regional basis in its two domestic markets of Switzerland and Spain. The Listing and Trading divisions are now part of the Markets business unit, and the post-trade business has been assigned to the Securities Services business unit.
The Markets business unit contributed CHF 84.2 million to business unit profit. Two companies in each of the domestic markets celebrated their IPOs. These were Polypeptide Group and Montana Aerospace in Switzerland, and Ecoener and Línea Directa Aseguradora in Spain. The BME Growth segment in Spain also added four new clients.
In the first half of the year, 40 exchange-traded products (ETPs) with cryptocurrencies as underlyings were launched on the Swiss stock exchange, including the world's first ETPs to be based on the cryptocurrencies Cardano, Stellar, Polkadot and Solana. Cryptoproducts with a total value of around CHF 4.8 billion have already been traded since the start of the year. This represents an increase of more than 300% compared to the whole of the previous year.
The Securities Services business unit contributed CHF 70.6 million to business unit profit. Total income in the Custody and Settlement divisions increased on account of higher index levels (including a record high for the SMI) and an increased volume of transactions. BME’s Iberclear benefited from more substantial volumes of equities, which compensated for declines in the custody of government and private bonds. In June, the Greek Central Securities Depository (ATHEXCSD) appointed SIX as its global custody solutions provider, and transferred all of its internationally held assets to SIX.
The Banking Services business unit contributed CHF 2.5 million to business unit profit. The trend for transactions using debit cards indicated a recovery from the effects of the pandemic, and in the first half of the year was above the level seen during the same period in 2019. At the end of March, Swisscom and SIX joined forces to ease the introduction of Open Finance in Switzerland, and eBill (the leading eBilling product offered by SIX) broke through the two-million-user mark in February.
The Financial Information business unit contributed CHF 26.8 million to business unit profit. The main factor here was the business with reference, exchange rate and compliance data. In the past six-month period, SIX significantly enhanced the range of ESG data it offers, and in February it introduced the first ESG indices for the general Swiss stocks and bonds market, as well as a Gender Equality Index and new ESG strategy indices. These are already seeing strong demand among customers of index funds and ETFs. With the acquisition of a majority share in Orenda Software Solutions via growth investment in March, SIX can now offer unique ESG performance data.
SIX will continue to pursue its strategy of growth, and invest in boosting its volumes, range and productivity. Growth is expected to be achieved primarily by organic means, such as in the fields of ESG, digital assets, billing, payments and cash. SIX is also prepared for inorganic growth, and is constantly analyzing promising opportunities that offer targeted added value. SIX made decisive progress in the integration of BME in the past six months. Adjustments to the organizational structure and the standardization of internal processes and systems were completed. In the second half of the year, the focus will now be on implementing further synergy potential, such as platform consolidation. This lays the technological foundation for the future trading platforms of both domestic markets. BME’s current trading platform is being migrated to a version of the existing SIX platform.