SIX Annual Report 2023: Strong Operating Result and Capital Position Despite Value Adjustments

SIX Annual Report 2023: Strong Operating Result and Capital Position Despite Value Adjustments

Mar 13, 2024 4 minutes

The diversified business model of SIX again proved its value in this demanding environment. Read more about how the positive trend in the operational performance continues.

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What Shaped the 2023 Reporting Year of SIX?

High inflation levels, rising interest rates, low trading volumes across Europe, and a continued weakening of foreign currencies against the Swiss franc shaped the macroeconomic environment for SIX in 2023. Despite these challenging conditions, SIX successfully delivered continued business growth, benefiting from its diversified business model and expanded global presence.

In these challenging times, the core mission of SIX takes on particular importance: the smooth settlement of securities transactions and payments. These are critical to the proper functioning of the economy generally and, by extension, to economic stability in the markets in which we do business. 

Key Figures for SIX in 2023

Total operating income grew by 3.5%  at constant exchange rates and by 2.1% at reported rates to 1,526.0 million Swiss francs. The increase was mainly driven by higher interest income and larger repo volumes in the Securities Services business unit, strong sales in the Financial Information business unit, and expanded revenues from debit and mobile services in the Banking Services business unit. Earnings before interest, tax, depreciation, and amortization (EBITDA) increased 6.7% at constant exchange rates and by 4.0% at reported rates to 413.4 million Swiss francs.

The value of the 10.5% stake of SIX in Worldline was adjusted by 862.3 million Swiss francs due to the significant drop in the Worldline share price. The goodwill attributed to BME had to be adjusted by 339.6 million Swiss francs as a result of increased discount rates as well as lower trading volumes in Spain and across Europe.

The Group net result was –1,006.2 million Swiss francs (2022: CHF 185.0 million). Excluding the two non-cash value adjustments, the Group net result would have been 181.1 million Swiss francs, slightly less than last year. The value adjustments did not affect the strong free cash flow generation in 2023. The capital position of SIX remains solid, with an adjusted equity ratio of 64.2% (2022: 65.9%).

What Were Some of the Key Achievements of SIX in 2023?

A highlight was the listing of Sandoz as a spin-off from Novartis, with a market capitalization of about 10.5 billion Swiss francs. The existing SIX Swiss Exchange listings actively tapped the Swiss capital market and were able to raise around 8.3 billion Swiss francs via equity capital increases, a plus of 18.6% compared to 2022. Throughout 2023, the Global Depositary Receipts (GDR) program and the BME Growth segment benefited from continued demand for new listings. The new market segment BME Scaleup offers enhanced financial market access to scale-up companies in Spain. Via ETF Quote-on-Demand Europe, clients can now trade ETFs on SIX Swiss Exchange that are listed on other primary exchanges. 

With SIX Digital Exchange (SDX), SIX reached milestones in growing its client network and introducing new tech solutions. Since December 2023, SIX, the Swiss National Bank and six commercial banks, collaborate on a ground-breaking pilot focused on tokenized central bank money for financial institutions (referred to as wholesale central bank digital currency or wCBDC). SIX hosts the pilot on SDX.

The average deposit volume increased by 3.3% in Switzerland and by 2.5% in Spain, to 3,825.1 billion Swiss francs and 2,570.7 billion Euro respectively. Through BME Clearing, SIX has successfully obtained regulatory approval to clear bitcoin and Ethereum futures in US dollars under the EU regulatory framework.

The Sanctioned Securities Monitoring Service by SIX saw strong growth in 2023, as did the index business. Building on the strength of its corporate actions data offering, SIX also introduced an extensive Corporate Actions Calendar and the SIX Bot. The SIX Bot allows clients to reliably track and monitor upcoming corporate actions.

Having successfully replaced Switzerland’s traditional payment slip with the QR-bill standard in fall 2022, SIX turned its focus squarely to growing its eBill solutions business during 2023. The eBill ecosystem expanded at a rapid pace, with half of Swiss households using the digital platform eBill to pay and manage their digital invoices by year end. 

The stable cost base can also be described as an important success. Total operating expenses grew 1.5% (2.4% at constant exchange rates), below inflation in Switzerland and the eurozone.

 

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