Euroclear H1 2020 - Resilient Performance Against COVID-19 Backdrop

BRUSSELS,July 17,2020 --

Financial Highlights

Operating income increased 1% to EUR 730 million (H1 2019: EUR 725 million) as a result of:

- Business Income rose 13% to EUR 639 million (H1 2019: EUR 565 million),driven by favourable market conditions and implementation of strategic initiatives

- Banking and Other Income decreased 43% to EUR 91 million (H1 2019: EUR 160 million),as a result of interest rate cuts

Operating costs increased 3% to EUR 428 million (H1 2019: EUR 413 million):

- Sustained focus on our customer proposition,modernising technology and regulatory-driven initiatives

Net profit rose 5% to EUR 227 million (H1 2019: EUR 217 million),helped by lower tax rate

EPS also increased 5% to EUR 72.0 (H1 2019: EUR 68.8 per share)

Strong balance sheet and capital position. Financial strength ensured by disciplined risk management,limited leverage and prudent liquidity position

As previously announced,the Board intends to approve the payment of an interim dividend in Q4 2020,unless it receives new guidance from regulators in the context of the COVID-19 crisis

Key Operating Metrics

Assets under custody reached EUR 31.1 trillion at the end June (H1 2019: EUR 30.0 trillion),an increase of 3.7% year-on year

Record number of netted transactions settled in the Euroclear group of 141 million,an increase of 20% compared to the first half 2019 for a total value of EUR 461 trillion (12% above H1 2019)

Euroclear's Collateral Highway mobilised a record EUR 1.5 trillion (H1 2019: EUR 1.3 trillion)

Business Update

In line with its reputation as a robust financial market infrastructure,Euroclear responded to the immediate impact of the COVID-19 crisis,implementing its business continuity plans to protect the health and safety of its people,while delivering systems performance that ensured record volumes were processed seamlessly

From a business continuity standpoint,we are able to operate successfully in our current mode of extensive teleworking,which will continue in accordance with local government guidelines

Created the Euroclear Solidarity Fund which made a donation of EUR 1 million to charities in support of people impacted by the COVID-19 crisis. The donation will be allocated to local charitable causes,such as hospitals and vaccination research,in each of the main countries where Euroclear operates

Global financial markets continue to be shaped by the response of companies,governments and other participants to the wide-ranging implications of COVID-19:

- Settlement volumes returning to more normal levels after the exceptional volatility recorded in March and April due to the pandemic,albeit the entire period saw higher volumes compared to 2019

- By facilitating primary issuance of government debt,required in response to the crisis,fixed income assets under custody increased

- Lower equity market valuations have impacted fees across several business lines

- Business income growth offset the financial impact of lower interest rates,which policymakers implemented in their immediate crisis response

Continued progress in implementing its strategy to strengthen,expand and reshape the global Euroclear network

Despite challenging conditions,the industry is working together to rapidly and safely implement new technical requirements that support market-wide compliance related to incoming Europeanregulations

- Continued progress on providing CSD services for Ireland in the context of Brexit. Euroclear Bank received passporting authorisation in March and is entering next phase of migration project of Irish securities from Euroclear UK & Ireland

- Further expansion of the international ETF issuance model to include Exchange Traded Commodities (ETCs) and Exchange Traded Notes (ETNs),as well as an increasing traction amongst global issuers for the international model over domestic equivalents

- Partnered with authorities in Turkey to create a Euroclearable link,giving international investors unprecedented access to local government bond market

- Cooperated with Clearstream Banking S.A. in the appointment of China Construction Bank (Asia) Corporation Limited as common depository,safekeeper and service provider for their international debt securities

- Announced the launch of a multi-currency settlement service for Japanese domestic bonds dominated in foreign currencies,further expanding Asia presence

Outlook

Exceptionally strong first half business income growth expected to subside,with growth rates trending back towards historic through-the-cycle growth trajectory

- Increased debt issuance by corporates and governments in response to the impacts of the pandemic is expected to be a driver of safekeeping fees

- However,a number of business lines are anticipated to be adversely impacted by lower equity market valuations

- Settlement volume expected to stabilise as market volatility subsides

Interest-related income severely impacted by rate cuts as well as lower customer balances. We expect that ongoing lower interest rate environment will result in yearly decline of approximately 60% in Banking and Other Income in 2020,compared to 2019 results

While we expect to meet target of business income operating margin of low to mid 30% range this year,the material impact of lower interest-related income will result in lower profitability in 2020,compared to 2019

Commenting on the results,Lieve Mostrey,Chief Executive Officer said:

"Euroclear delivered a resilient financial and business performance in the first half. Our strategy is proving successful even in the context of an unprecedented global crisis.

"Our robust operating performance and business continuity in such unparalleled circumstances has cemented our reputation as a safe and reliable infrastructure partner for global financial market participants. I would like to thank the whole Euroclear team for their hard work and commitment during this challenging time."

Abridged Financial Statements

1st

half year

2020

Var

2020-2019

1st

half year

2019

2nd

half-year

2019

Full Year

2019

(in € million)

Consolidated Income Statement

Business income

638.673.5565.2580.21,145.4

interest & banking income

83.1-68.2151.3136.5287.8

Other income

7.9-0.48.3-6.12.3

0.0

Total operating income

729.64.8724.8710.71,435.5

0.0

Administrative expenses

(427.7)(14.4)(413.3)(406.8)(820.1)

o/wDepreciation and amortisation

(35.5)(1.6)(33.9)(35.8)(69.7)

Share of result in joint venture

0.02.6(2.6)3.34(0.7)

Operating profit before impairment and

taxation

301.9-7.0308.9307.2616.1

Result for the period

226.710.2216.6214.2430.8

Consolidated Balance Sheet

Shareholders' equity

4,550.4399.14,151.34,229.64,229.6

Debt

6,447.5637.35,810.16,107.16,107.1

Total assets

32,590.3568.132,022.127,568.627,568.6

Per share information (in €)

Net earnings per share

72.03.268.868.0136.9

Net asset value per share

1,445.7126.81,318.91,343.81,343.8

Adjusted net asset value per share*

1,165.8126.61,039.21,063.31,063.3

*Adjusted net asset value per share excludes the amount of goodwill as well as the amounts

for contractual relationships and is based on the number of shares at the end of the period

Key performance ratios

Assets Under Custody (€ Trn)

31.11.130.031.431.4

Netted Transactions (million)

14123118121239

Collateral Outstanding (€ billion end of

period)

1483198128513161316

EBITDA (in € million)

350.0-5355355709

Business Income Operating Margin (%)

33%6%27%30%28%

CET1 ratio (%)*

40%3%36%40%40%

* Figures for first half 2020 are based on

estimation

Euroclear Bank Income Statement

Net interest income

99.2-75.3174.5156.2330.7

Net fee and commission income

398.956.0342.9361.2704.1

Other income

-0.61.1-1.7-7.8-9.5

Total operating income

497.5-18.2515.7509.61,025.3

Administrative expenses

(282.5)(0)(275.9)(259.6)(535.5)

Operating profit before impairment and

taxation

215.0-24.8239.8250.0489.8

Result for the period

157.8-8.4166.2175.9342.2

Euroclear Bank Balance Sheet

Shareholders' equity

1,909.443.71,865.71,881.61,881.6

Long term debt

5,953.1636.05,317.05,615.75,615.7

Total assets

29,163.6344.228,819.324,324.024,324.0

Key performance ratios

Business Income Operating Margin (%)

29%2%27%31%29%

CET1 ratio (%)*

40%1%39%40%40%

* Figures for first half 2020 are based on

estimation

Euroclear Investments Income Statement

Dividend

0.00.4-0.4216.5216.1

Net gains/(losses) on non trading

financial assets at FVPL

-128.8-294.6165.849.4215.2

Other income

2.0-0.92.91.84.8

Total operating income

-126.8-295.0168.3267.8436.1

Administrative expenses

(0.5)(0.1)(0.4)(0.4)(0.9)

Operating profit before impairment and

taxation

-127.3-295.1167.9267.4435.2

Result for the period

-95.6-226.0130.5249.8380.2

Euroclear Investments Balance Sheet

Shareholders' equity

669.8-32.0701.8766.3766.3

Long term debt

1,298.21.11,297.11,301.91,301.9

Total assets of which

1,985.1-44.82,029.92,117.32,117.3

Loans and advances

129.7-9.7139.4129.0129.0

Available-for-sale financial assets

249.742.5207.2246.6246.6

Intercompany loans

904.0-142.51,046.51,103.91,103.9

Note to editors Euroclear group is the financial industry's trusted provider of post trade services. At the core,the group provides settlement,safe-keeping and servicing of domestic and cross-border securities for bonds,equities and derivatives to investment funds. Euroclear is a proven,resilient capital market infrastructure committed to delivering risk-mitigation,automation and efficiency at scale for its global client franchise.The Euroclear group includes Euroclear Bank - which is rated AA+ by Fitch Ratings and AA by Standard & Poor's - as well as Euroclear Belgium,Euroclear Finland,Euroclear France,Euroclear Nederland,Euroclear Sweden and Euroclear UK & Ireland. The Euroclear group settled the equivalent of EUR 837 trillion in securities transactions in 2019,representing 239 million domestic and cross-border transactions and held an average of EUR 30.1 trillion in assets for clients.For more information about Euroclear,please visit www.euroclear.com.Logo - http://cusmail.com/res/2023/07-28/00/0cdc3debb3516b78a02b9de6a16f1397.jpg