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For 2021, we had all expected to see a step toward normality. It turned out otherwise, as again in 2021 the situation posed by the global pandemic remained a challenge for us all. The health of our employees and the stability of our systems were, and remain, our top priorities. We met that challenge. All of our platforms ran smoothly and our stable services enabled our customers to deliver on their service promises to their clients. Moreover, thanks to our dedicated employees, we continued to deliver on our growth strategy and reached important milestones in 2021. We are pleased to provide you with an insight into our progress, and to share some of the highlights we achieved together in this challenging year.
In 2021, our income benefitted from organic growth and the newly combined business of SIX in Switzerland and Spain: The Spanish business acquired by SIX in mid-2020 contributed for a full 12 months for the first time. All four business units performed well, although they were differently impacted by various external factors, not least in connection with the pandemic. As foreseen in our strategy, organic and inorganic growth resulted in an increase of operating income: It was up by 8.9% compared to 2020. Thanks to strict cost discipline, we were able to increase EBITDA by 14.8%.
The non-operating result saw significant one-off effects attributable to our investment in Worldline. In 2020, a partial sale of our Worldline shares and the merger of Worldline with Ingenico had a very positive effect on our net financial result. In contrast, an impairment resulting from the announced sale of Worldline’s Terminals, Solutions & Services (“TSS”) business negatively affected the share of profit or loss of associates in 2021. Earnings before interest and tax (EBIT) and Group net profit therefore strongly deviated in a year-on-year comparison. EBIT amounted to CHF 147.2 million (–71.4%) and Group net profit to CHF 73.5 million (–83.2%) in the year under review. Without Worldline-related effects, Group net profit rose 37.3% compared to the previous year.
“We want to shape the financial markets of tomorrow.”
SIX continues to pursue its business growth strategy, and not only for the sake of increasing profits. We want to grow to be able to shape the financial markets of tomorrow. Growth allows us to expand our stable infrastructure, set up new digital infrastructures, and invest in the security of our systems, all of which are necessary if we are to differentiate ourselves from our competitors and serve our financial centers in the long term.
In 2021, key achievements in this respect included the launch of SIX Digital Exchange, the continuing growth of digital billing and invoicing in Switzerland, and the launch of “Sparks”, a new equity segment for SMEs at the Swiss stock exchange.
As of January 1, 2021, the new organizational structure following the BME transaction took effect. With the new structure in place, the organization is clearly aligned to fully deliver on the business purpose of SIX to strengthen the competitiveness of its customers. 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 announced three further targeted acquisitions, two of which were in the financial information business and one in the post-trading area.
Further Growth Opportunities
Growth is a prerequisite for successfully operating a platform business. As volumes on our platforms increase, economies of scale reduce unit costs. By lowering transaction costs within networks and creating recurring added value for its customers, SIX stays competitive.
Besides focusing on organic growth in core products and services, we are investing in the transformational opportunities of data and digital assets ecosystems. Following the launch of SDX in 2021, we are now focusing on onboarding new customers and bringing liquidity to this cutting-edge platform. Further, we see growth potential in the Singapore-based Asia Digital Exchange. This joint venture of SIX and SBI Digital Asset Holdings will drive institutional digital asset liquidity through a digital issuance platform, exchange, and CSD venue. The go-live is currently subject to regulatory approvals from the Monetary Authority of Singapore.
Bolt-on acquisitions and partnering opportunities will continue to strengthen our portfolio. The establishment of a data ecosystem, for example, is a key driver of our strategy. The aim is to bring all data offered by Financial Information into a seamless distribution, analytics, and insights solutions offering. This marks the transition from a data vendor to an insights and workflow solutions provider in a fully integrated financial market ecosystem.
After the launch of SDX in 2021, we now focus on bringing liquidity to the platform.
Financial Flexibility and Cost Optimization
By recently entering the capital market, SIX further strengthened its financial flexibility. The successful placement of three bonds within just a few months has proven our capital markets ability: A benchmark Eurobond offering (EUR 650 million) in late 2020 was followed by a CHF bond offering (CHF 450 million) in the third quarter of 2021. By issuing the world’s first senior unsecured digital CHF bond with a total volume of CHF 150 million in the fully regulated environment of SIX Digital Exchange, we broke new ground in November 2021. All three bond placements allow the refinancing of the outstanding bridge facility associated with the acquisition of BME. Additionally, they allow for general investments in future infrastructure.
In order to remain attractive to investors in the future, SIX is enhancing its profitability with an intensified focus on improving margins. We therefore continue to successfully execute our Continuous Improvement Program (CIP) begun in 2018, aimed at optimizing our cost structure, and to realize synergies from the BME integration. Additionally, in 2021 we announced a comprehensive new efficiency program for the coming years. This program will build on the ongoing CIP and the synergies from the integration of SIX and BME, and will make further use of the broader European footprint of SIX.
The global shift toward sustainable finance continues apace. Sustainability is increasingly important to companies and their stakeholders – whether shareholders, employees, customers, partners, regulators or governments. SIX is no exception.
SIX manages environmental, social, and governance (ESG) topics across three dimensions: first, as a financial markets infrastructure (FMI) provider; second, as a company with shareholders, customers, and employees; and third, as a strategic commercial opportunity.
For example, in our role as an FMI we enable and promote disclosure and transparency to enable sustainable capital flows; as an organization we pay attention to our own performance from carbon emissions to cyber security, from diversity and inclusion to leadership development, and from corporate governance to social financial literacy; and we are building on the success of our ESG index launches to create products and services that enable our clients to meet their goals in sustainability. Our sustainability strategy will build on our strong heritage of supporting stable and reliable capital markets for the benefit of all and further develop our role in sustainable finance, delivering across all three dimensions.
We at SIX truly believe that the future of finance is happening now, therefore we are continuously investing in technology, services, and people. Thank you for your ongoing support in this transformational journey.
Dr Thomas Wellauer