Annual Results 2021: SIX Continues to Deliver on Its Growth Strategy


Annual Results 2021: SIX Continues to Deliver on Its Growth Strategy

In recent years, SIX has strengthened its position in the market by executing a growth strategy and expanding its global footprint. The year 2021 was another successful one. Get an insight into the progress SIX made and learn about some of the highlights in this challenging year.

How Successful was 2021 for SIX?

The year 2021 was a successful one for SIX, despite the challenges and uncertainties that recurring waves of COVID-19 continued to inflict on society and financial markets. The income benefitted from organic growth and the newly combined business of SIX in Switzerland and Spain: For the first time the Spanish business acquired by SIX in mid-2020 contributed for a full 12 months. All four business units of SIX performed well, although they were differently impacted by various external factors, not least in connection with the pandemic.

What Were the Key Achievements of SIX in 2021?

In 2021, key achievements included the launch of SIX Digital Exchange and several new ESG indices and data offerings, the continuing growth of digital billing and invoicing in Switzerland, and the launch of “Sparks”, a new equity segment for SMEs at SIX Swiss Exchange.

While equity trading on the stock exchanges did not reach the unprecedented volumes of the previous year, the economic environment was still favorable for the Exchanges and Securities Services business. As of 1 January 2021, these units consist of the combined businesses of SIX in Switzerland and BME in Spain.

Given the rapidly evolving state of industry consolidation, M&A has remained key to strengthening the competitive position in core offerings as well as helping improve margins and acquiring additional capabilities and technologies. In the year under review, SIX made three targeted acquisitions, two of which were in the financial information business and one in the post-trading area.

Key Figures for SIX in 2021

Despite the improved operating income of CHF 1,498.3 million (+8.9%) and higher earnings before interest, tax, depreciation, and amortization of CHF 421.7 million (+14.8%), earnings before interest and tax (EBIT) and group net profit substantially decreased compared to the previous year. This was due to two opposing effects from the stake of SIX in Worldline in 2020 and 2021. 

In 2020, a partial sale of Worldline shares held by SIX as well as the merger of Worldline with payment services provider Ingenico had a highly positive effect on the 2020 net financial result, increasing EBIT and group net profit. In 2021, an impairment resulting from the announced sale of Worldline’s TSS business (Terminals, Solutions & Services) negatively affected the share of profit and loss of associates of SIX (CHF -102.1 mn). Compared to the highly positive result of the previous year, EBIT and group net profit saw a strong year-on-year deviation: EBIT amounted to CHF 147.2 million (-71.4%) and group net profit resulted to CHF 73.5 million (-83.2%). Without the Worldline-related effects, group net profit rose 37.3% compared to the previous year. For 2021, the Board of Directors recommends that the Annual General Meeting approve an ordinary dividend of CHF 4.75 per share (prior year: CHF 4.30).

How Will SIX Pursue Its Business Growth Strategy in the Future?

SIX continues to pursue its business growth strategy. This will allow SIX to expand its stable infrastructure, to set up new digital infrastructures, and to invest in the security of its systems. Growth is also a prerequisite for successfully operating a platform business. As volumes increase, economies of scale reduce unit costs. By lowering transaction costs within networks and creating new recurring added value for its clients, SIX stays competitive. 

For the 2022-2024 horizon, SIX aims to increase its revenues by more than 4% per annum while also realizing efficiency gains and cost reductions:

  • The resulting increase in profitability will further improve the financial flexibility of SIX, ensuring sufficient financing for continuous investments to grow the business and further strengthen the competitiveness of the Swiss and Spanish financial centers.
  • Revenue increases will come from new services and synergies as a result of the BME acquisition and from leveraging the market position of SIX in the financial information business, particularly by leveraging the acquisitions made in 2021. 
  • SIX will continue innovating to bring new products and services to market, but will also expand its existing offerings by entering adjacent markets. The increase in top-line growth will lead to increased profitability given the extensive fixed costs that are associated with some core business activities of SIX.

Do you like this content?

0
0