Thu, Dec 14th 2023
SIX is heading for a deep red annual result. This is due to value adjustments on the Worldline investment in France and at the Spanish stock exchange.
The stock exchange operator expects a negative consolidated result in the region of CHF 1.0 to 1.1 billion for 2023, as announced on Thursday. In 2022, it generated a net profit of 185 million francs. And in the first half of 2023 alone, SIX still earned CHF 105 million.
The market environment, characterized by inflation and rising interest rates, is challenging, it said. In particular, the sharp fall in the share price of the French payment services provider Worldline, in which SIX holds a 10.5% stake, had a negative impact on the result. An impairment loss of around CHF 860 million was recognized in the fourth quarter of 2023. Worldline’s share price has plummeted by almost 60 percent this year, with a particularly sharp drop in October.
Unpredictable participation
For SIX, the result from the investment can fluctuate significantly from year to year. In 2021, the company suffered a slump in profits due to the French. In 2022, the share in the result of associates contributed a plus of 21.6 million after a minus of 102.1 million in 2021.
In 2018, SIX sold its own payment transaction business – the area with the highest turnover at the time – to Worldline, which resulted in a profit of CHF 2.7 billion. As part of the sale, SIX also became a minority stock shareholder with a 27% stake in Worldline. Since then, SIX has successively reduced its stake.
On Thursday, it reaffirmed its commitment to the investment: This remains a strategic investment. Worldline is an important partner for payment transactions, especially for Swiss banks, it said.
Spain suffers from low trade
But the Spanish stock exchange acquired in summer 2020 is also causing problems. In the fourth quarter, the goodwill for Bolsas y Mercados Españoles (BME) had to be adjusted downwards by CHF 340 million in the accounts. This was due to higher discount rates and lower trading volumes.
In technical jargon, goodwill refers to the difference between the selling price for a company and the net asset value determined for accounting purposes. SIX bought the Spanish stock exchange for around EUR 2.6 billion.
The press release went on to state reassuringly that BME makes a significant contribution to the Group’s operational and financial success. It remains of crucial importance for the growth strategy and competitive position of the stock operator SIX.
Nevertheless, more dividend
The Group is also performing well in operational terms, it added. For 2023 as a whole, SIX expects currency-adjusted revenue growth of around 3%. Operating profit before depreciation and amortization EBITDA is expected to increase by 6 to 7 percent adjusted for currency effects. This shows that the strategy with the diversified business model is successful. Stocks are still yielding dividends. With a slightly higher dividend for the 2023 financial year to stock holders than in the previous year. For 2022, shareholders – around 120 financial institutions – received CHF 5.10 per share.
This is possible because the capital position remains strong. SIX estimates that the equity ratio after the value adjustments at the end of the year remains at over 60% and the net debt ratio at around 1.5x EBITDA.
The financial infrastructure service provider will announce its detailed annual results on March 13, 2024.
©Keystone/SDA
English 
German 
French 
Spanish 
Arabic