Euronext N.V. (ENX) Earnings Call Transcript & Summary

Hello, and welcome to the Euronext Second Quarter 2023 Results Call. My name is Laura, and I will be your coordinator for today's event. Please note, this call is being recorded. [Operator Instructions] I will now hand you over to your host, Stéphane Boujnah, CEO and Chairman of the Managing Board; joined by Giorgio Modica, the CFO, to begin today's conference. Thank you.

Good morning, everyone, and thank you very much for joining us this morning for Euronext Second Quarter 2023 Results Conference Call and Webcast. I am Stéphane Boujnah, CEO and Chairman of the Managing Board of Euronext. And I will start with the highlights of the second quarter. Giorgio Modica, the Euronext CFO, will further develop the main business and financial highlights of the quarter. Let me take you through the key aspects of this second quarter of this year. First, Euronext Q2 2023 results demonstrate the real success of our diversification strategy. Our revenue was almost stable, excluding foreign currency effects despite a much less volatile environment than in Q2 last year, and this performance was enabled by strong organic growth from our nonvolume-related businesses and also from the dynamic quarter for fixed income businesses and Power Trading business. We continue to deploy our strong cost discipline in Q2 2023. And as a result, we reported an adjusted EPS of EUR 1.34 which is flat compared to the adjusted EPS of last year. And we reported net income of EUR 120 million, up plus 0.9%. Second, to confirm our intermediate target of EUR 70 million of cumulative run rate synergies in relation to the Borsa Italiana integrations to be delivered at the end of 2023. We are well on track with the upcoming migration of other Italian markets to our Optiq trading platform in September 2023. And we are also well on track and in a position to confirm the expansion of Euronext clearing to all Euronext markets, starting with equities clearing in Q4 2023. Thus, we paved the way for the expansion of Euronext Clearing for the clearing of derivatives on all Euronext markets in Q3 2024. This migration with all the other projects will contribute meaningfully to the targeted EUR 115 million of cumulative run rate EBITDA synergies to be delivered by the end of 2024. Third, we expanded our position [Audio Gap] We launched on Monday a share repurchase program for a maximum amount of EUR 200 million. This program is enabled by our strong cash generation capabilities and demonstrates our rigorous capital allocation strategy. Moving to Slide 5. First, as I said, Euronext reported a solid performance for the second quarter of 2023. Total revenue and income amounted to EUR 368.1 million. Our revenue was almost stable at constant currency despite a low volatility environment, but down minus 1.8% compared to Q2 2022 on a reported basis. Our very robust top line performance reflects strong organic growth of our non-trading activity and better performance of fixed income and power trading. This was partially offset by the strong comparison base for equity trading-related activities in Q2 2022, and this performance is also partially offset by negative impact of foreign exchange rate variation, especially for the Norwegian kroner. The strong growth of our nontrading-related activity drove the share of our nonvolume-related revenues to 61% in Q2 2023, and this 61% share of nonvolume-related revenues is the highest level Euronext has ever recorded. Euronext is much more diversified than it has ever been. Cash trading today represents only 18% of our total revenue. That is half of the share of cash trading in the company's revenue at our IPO back in 2014. This demonstrates again the success of our diversification strategy implemented over the past 6 years. Thanks to our continued best-in-class cost discipline and despite an inflationary environment, we kept our underlying operating expenses, excluding D&A, under control, at EUR 152 million on this quarter, down minus 0.7% compared to Q2 2022. Therefore, we reiterate our underlying cost guidance for 2023 at EUR 630 million, reflecting usual seasonality and anticipated costs related to upcoming growth projects. Consequently, adjusted EBITDA reached EUR 216.1 million, down minus 2.5% compared to the adjusted EBITDA of Q2 2022. Overall, this performance resulted in EUR 120 million of reported profit, up plus 0.9% compared to the reported profit of Q2 2022. Our business continued to be strongly cash generative. Our leverage was at 2.2x net debt to adjusted EBITDA at the end of the quarter, and this ratio was impacted this quarter by the payment of the dividend for the 2022 financial year of EUR 237 million. Moving to Slide 6. As planned, no major integration project was delivered in Q2 2023. We reached EUR 44.2 million of cumulated run rate annual EBITDA synergies at the end of this quarter in relation to the integration of Borsa Italiana, in line with our expected EUR 70 million of run rate synergies to be delivered in relation to the integration of Borsa Italiana Group by the end of the year. We continue to reach significant milestones paving the way for the last steps of the integration of the Borsa Italiana Group. In September, we will start the migration of other Borsa Italiana markets to Optiq or single technology platform. And as a consequence, the third-party trading platform we are using today in Italy will be decommissioned in October of this year, and this will contribute to further delivering cost synergies in Q4 2023. We are also advancing well with the European expansion of Euronext Clearing. In June, we published a fee grid for Euronext Clearing, which has been developed in close collaboration with clients. And the expansion of Euronext -- Euronext clearance equity clearing activity to all our markets will take place in Q4 2023 and will allow us to generate new revenues from the clearing of equities across Europe unlocking revenue synergies. All in all, we are well on track for the delivery of the EUR 115 million of cumulative run rate annual synergies by the end of '24. As I mentioned earlier, Q2 '24 -- '23, sorry has demonstrated our position as a leading European equity trading [indiscernible]. The benefit of migrating Italian market to a single liquidity pool forward by Optiq are significant. In June 2023, Euronext reported its highest market share over the last 12 months, bringing the average market share in equity trading to 65.4% for the quarter, which is well above the target of at least 63% committed to secure in the beginning of the year. In Italy, June 2023 market share even climbed to its highest level since January 2022. The new fee scheme in Italy allowed us to reach cash trading revenue capture of 0.53 bps on average in Q2 2023 despite average order size twice as large as 2 years ago. In addition, the improved market quality post migration was sustained. Euronext recorded a sustainable 20% increase in EBBO setting daily average following the migration. And this CPI, which defines where the best prices formed across renewals, clearly demonstrates how Euronext does apart from competition with its superior market quality. Slide 8 provides an update on Euronext capital allocation. On the 6th of July, we have completed the sale of our 11.1% stake in LCH SA to LCH Group for an amount of EUR 111 million. This sale was enabled by our decision to terminate the existing derivative steering agreement by LCH SA as Q3 2024. Non-underlying capital gain of around EUR 40 million will be booked and the results from equity investments in Q3 2023, and this gain will be exempted from tax. Importantly, this disposal does not impact the revenues nor the costs related to the clearing agreement with LCH SA until the targeted and planned end of a contract in Q3 2024. I outlined earlier that we recorded another strong quarter of cash generation. Therefore, as part of our rigorous capital allocation strategy, we decided to return up to EUR 200 million of capital to our shareholders through a share repurchase program. The program will start on Monday, 31st July and will run for a maximum of 12 months. The targeted amount accounts for approximately 3% of all outstanding shares and will not impact our deleveraging path nor our investment-grade rating. The program will also preserve Euronext financial flexibility to capture market opportunities. In addition, we maintain our existing dividend payout at 50% of net income. I now hand over to Giorgio Modica for the review of our second quarter 2023 performance.

Thank you, Stéphane. And good morning, everyone. Let us now have a look at the performance for the second quarter of 2023. I'm now on Slide 10. This quarter, Euronext diversified business model delivered solid results driven by the strong organic growth of our nonvolume-related businesses. This good performance almost entirely offset the lower equity and derivative volumes and the negative currency impacts, mainly and mainly the depreciation of NOK against euro. As already mentioned, total revenue this quarter reached EUR 368.1 million, down 1.8% compared to last year. Like-for-like, total revenue was broadly stable at minus 0.5% compared to last year. In details, Technology Solutions revenue was up 13.2%, mainly thanks to the internalization of our colocation services following the migration of the core data center to Italy. Advanced Data Service revenue was up 9.4%, driven by increased number of clients and improved revenue capture as well as the continued good performance of the Data Solutions business. Listing activity confirmed Euronext's leadership in Europe despite an overall soft IPO market with 16 new listings. More than half of the new European listing and the largest IPO in Europe took place on Euronext this quarter. Listing revenue was EUR 55.1 million as said, negatively impacted by the NOK depreciation. Excluding these impacts, leasing revenue grew 2.1%. Post trading revenue was slightly down 0.8%, also impacted by the NOK. This reflects clearing revenue impacted by lower net treasury income contribution from LCH SA and a very good quarter of Euronext securities, plus 2% on a reported basis and 6.1% like-for-like. Lastly, trading business was down 8.5%. This performance across our trading businesses was mixed, with fixed income and power trading, partially offsetting the impact of softer volumes for cash and derivatives trading. I will start now with the financial review with the nonvolume-related activities, which positively contributed to the results this quarter. Technology Solutions reported EUR 27.3 million in revenue, plus 13.2%, thanks to the internalization, as said, of colocation services following the migration of the Core Data Center to Bergamo. Advanced Data Services reached record revenue of EUR 56.9 million, again, plus 9.4%, driven by an increased number of clients and better revenue capture as well as the continued strong performance of the Data Solutions business. Investor Services reported EUR 2.8 million in revenues this quarter, representing an increase of 21.5% compared to the same quarter last year, resulting from the commercial expansion of the franchise across the largest global investment managers. I'm moving now to Slide 12. Listing revenue was EUR 55.1 million, up 2.1% like-for-like, reflecting a resilient quarter for the listing activity and the continued growth of our corporate services offering. Listing revenue was slightly decrease 0.5% compared to the same quarter last year on a reported basis, again due to the depreciation of the NOK against euro. On the debt side, we also confirm our leadership in listing reaching for the first time for 54,000 bond listing in our market while we also strengthened our leading position in ESG bond Listing. Euronext Corporate Service continued to deliver a solid performance with revenue growing to EUR 11.8 million this quarter, up 17.4% compared to the second quarter of 2022, resulting from the strong performance of our SaaS offering. Moving to Slide 13, we will discuss about trading. Cash trading revenue was EUR 65.2 million, minus 13.3%, reflecting improved revenue capture and market share, offset by lower volumes. Revenue capture averaged 0.53 basis points, reflecting the immediate benefits from the new fee scheme implemented in Italy following the migration of the Borsa Italiana cash equity market to Optiq. It is important to highlight how order size reached unprecedented levels, plus 20% vis-a-vis the end of last year and contributed to the dilution of our revenue capture and compensated the positive impact on the revenue capture itself coming from the softer volumes this quarter. Cash equity market share steadily increased over the second quarter of 2023 to average 65.4%, which is, as you know, above the target of at least 63%. Lastly, I would also like to highlight that this quarter, there was one less trading day, which had an impact on our trading revenues. Derivative trading revenue decreased by 12.6% to EUR 13 million compared to a particularly volatile second quarter of 2022, mainly due to the war in Ukraine. This quarter, financial derivatives suffered from a significantly lower level of volatility, while commodities did perform extremely well. Lastly, FX trading reported EUR 6.1 million in revenues, down 15.7% from a strong second quarter of 2022 and mainly impacted by lower volumes. Continuing on Slide 16 with our other trading activities. Fixed income trading revenue grew by 1.4% to EUR 25.3 million, reflecting the strong performance of MTS Cash, MTS Repo and the increased traction of Euronext fixed income retail franchise. For the second quarter of 2023, MTS Cash reported EUR 15.5 million of revenues and MTS Repo reported EUR 6.3 million of revenue. Our trading grew to EUR 8.6 million, up 24.7% compared to the second quarter of 2022, driven by the very strong intraday volume growth, improved revenue capture, partially offset by slightly lower day-ahead volumes. I conclude this business review with our post-trade activities on Slide 15. Clearing revenue was down 6.4% to EUR 29.4 million due to the lower net treasury income contribution from LCH SA. As a reminder, the derivative clearing arrangement with LCH SA provides for a sharing of part of LCH SA net treasury income. Excluding these LCH SA net treasury income drop, the strong performance of government commodities more than offset the impact of weaker volume for cash, single stock and index derivatives Net treasury income amounted to EUR 13.8 million this quarter, a decrease of 12% compared to the second quarter of 2022. As anticipated, the spread on the net treasury income reached now its cruising speed, and the whole collateral from filing member is now invested at ECB. Lastly, revenue from Custody & Settlement and other Post-Trade activity was EUR 63.7 million. This is a 6.1% increase like-for-like and a 2% increase on a reported basis compared to the second quarter of 2022, again, impacted by the NOK. These results are mainly driven by a combination of assets under custody increase, the new fee scheme rolled out in 2023 and the seasonal uplift in corporate action. Moving with the financial highlights of the quarter, I will start now with the EBITDA bridge on Slide 17. Euronext's adjusted EBITDA for the quarter was down 2.5% to EUR 216.1 million, resulting from lower trading revenues, partially offset by non-volume revenue growth and continued cost discipline. This translated into an adjusted EBITDA margin of 58.7%. With regards to the underlying expenses, excluding D&A, I would like to confirm our 2023 cost guidance at EUR 630 million as underlying costs for strategic projects are not evenly distributed across the year. The underlying cost for the quarter were EUR 8.9 million, primarily in relation to the ongoing work related to the clearing expansion and the Optiq migrations. Moving to net income on Slide 18. Adjusted net income this quarter is almost stable at EUR 142.9 million resulting from the lower EBITDA offset by the following elements: lower net financing expenses resulting from higher interest income from cash and cash equivalents, higher results from equity investment and a lower tax rate. I would like to highlight that the nonunderlying costs in this bridge are mainly related to the PPA amortization of our acquisition. And that from the next quarter, LCH SA, as Stéphane anticipated, will not contribute to a result from equity investments. This quarter, LCH SA contribution was EUR 3.2 million. Lastly, income tax for the second quarter of 2023 was EUR 41.2 million. This translated into an effective tax rate of 24.8%. Reported net income increased 0.9% to EUR 120 million. And adjusted EPS basis was almost stable, only down 0.3% at EUR 1.34 per share. To conclude with cash flow generation and leverage. In the second quarter of 2023, Euronext reported net cash flow from operating activities of EUR 139 million compared to EUR 76.8 million in the second quarter of 2022, reflecting lower income tax paid. Excluding the impact on working capital from Euronext Clearing, Nord Pool and CCP activities, net cash flow from operating activities accounted for 73.3% of EBITDA this quarter. As a reminder, Euronext pay in May 2023 EUR 2.22 per ordinary share as a dividend for the 2022 financial year. Net debt to adjusted EBITDA was at 2.2x at the end of the quarter and 2.6x on reported EBITDA, impacted by significant one-offs like the disposal of the investment portfolio in the third quarter of 2022 and the LCH termination fee in the first quarter of 2023. And with this, I would like to give now the floor back to Stéphane.

Thank you, Giorgio. So as you have seen, this quarter demonstrated the robustness of our diversified business model. Clearly, Euronext has never been as diversified as it is today. And we have a very strong confidence in our growth prospects in the next quarters. We will deliver 2 major milestones of our growth for Impact 2024 strategic plan, which will contribute significantly to the delivery of EUR 115 million synergies in relation to the integration of Borsa Italiana to be achieved by the end of '24. So Euronext has never been as strong as it is today. So thank you for your attention, and I'm happy with Giorgio, Anthony, and Simon to take your questions now.

[Operator Instructions] We'll now take our first question from Mike Werner at UBS.

Congrats on the results as well. Two questions from me if you don't mind. On the revenue capture rate, certainly a strong number. I'm just trying to understand that we did see, as you noted, a quite high average trade size during the quarter. So in a more normal environment, should we expect the historical correlation that we have seen at Euronext to persist, whereas if the average trade size goes down, all else equal, we could see actually an uplift in that revenue capture rate going forward? That's the first question. And then the second question, we've got a little bit more updates on the consolidated tape plan, how it might look in the next couple of years. I just want to know if you have any as to the potential impact or if you thought a little bit more now that we have more color.

Thank you. I'll take the consolidated tape questions, and Simon Gallagher will take your questions on the revenue capture rate, particular in relation to order size. The most significant development on the consolidated tape debate was the decision taken by the Trilogue, the debate between the commission, the European Parliament and consent of the European Union a few days ago to define the scope of what will be the consolidated tape. It will be a consolidated tape, pre-trade, EBBO1 and anonymized. So we welcome this consolidated tape that will foster the dissemination of information to secure best execution. It's clearly the priority of the Euronext model. And in this respect, this consolidated tape will be a good development. As far as the impact on revenue generated from dissemination of real-time market data, it's a bit too early to assess what will be the impact because of 2 or 3 reasons. Number one, technical Trilogue discussions are ongoing and will probably materialize in the course of September and October into final decisions about the revenue sharing model and the way revenues will be disseminating will be shared with contributors. So this new tape is a new model. This new tape is not going to be a trading product. So let's see how the discussions will develop after the summer break [indiscernible]. And the third development, which might be relevant is that Euronext with other European exchanges are set up a consortium to bid for the role of operating this consolidated tape, and whether or not we are part of the operations of this consolidated tape will also have an impact on net revenue. So this is the status of the debate as of today. So we don't expect in any event any impact before '25 and '26, whatever the outcome of those various developments are. I hand over now to Simon Gallagher on your question about revenue capture.

Thank you, Stephane. On the revenue capture, I'd make 3 points. So up until March this year, at the end of March, the time of the migration of the Italian markets to the central systems, the Italian market was very, very highly correlated to this phenomenon of trade changes in average order sizes. This is no longer the case in the new fee scheme for the Italian market, and it has no correlation anymore if you look at the fee grid to order sizes that persists in the overall model. Some modest exposure now to variance in order sizes along the legacy Euronext fee grids, and we will take a view going forward as to the future fee grids as a function of the way average order sizes evolve in the coming months of the appropriate fee model to define our exposure to this phenomenon.

And we'll move on to our next question from Arnaud Giblat at BNP Paribas Exane.

I've got 3 questions, please. If I could start with how we should interpret your buyback. Is this -- should we take this as a sign that there's no imminent deal in the pipeline? And does it change your return criteria for M&A? My second question is on power derivatives. I'm just wondering if you could comment there on the strong performance. How is your market share relative to the OTC markets evolving over the past couple of years? And my third question is on clearing. I was just wondering when you're moving to launching the cash equity and even further down the line, the derivative clearing onto your next market. Is there an opportunity there to realign pricing to your next level?

I'm going to take the question on the share buyback, and I'll let Anthony comment on derivatives, clearing and derivatives market share. On the share buyback, it's a very natural step that we have taken in an environment where: a, the company is deleveraging very quickly and we're confirming a strong cash flow generation; b, we collected the pursuit of the sale of 11.1% stake in LCH SA; third, the current valuation of our stock is significantly below the average target price of [ analysts ]. And in that environment, we believe that it was appropriate to return money to shareholders within a share buyback program that is calibrated to retain flexibility to capture other M&A opportunities that may come. There is -- we will continue and we continue to monitor options to deploy capital through external growth in order to deliver synergies, and we believe that there is no inconsistency for the moment between deploying a share buyback program of EUR 200 million, generating strong cash flow, paying a 50% dividend, keeping our rating and continuing to analyze potential M&A opportunities. This program has not changed anything in our criteria in terms of M&A requirements.

This is Anthony Attia. Regarding your third question on pricing related to the clearing migrations, we should separate the cash equity from the derivative approach. So regarding the cash equity clearing, we have created a new value proposition related to the migration to CCP to Euronext Clearing with clearing fees with Euronext framework and with very competitive settlement fees. And so this new value proposition will be in place in Q4 this year after the migration. And if I want to characterize it, we will have a harmonized clearing fee across our different markets, very efficient risk framework that will return efficiencies to the market and extremely efficient settlement setup with low settlement fees due to the single access to target to securities through our Euronext securities franchise. On derivatives, it's a different approach. So we've always had a very consistent trading plus clearing approach regarding fees on derivatives, and we'll favor stability at the occasion of the migration. Thank you. And I will let the mic to Simon for the second question.

Thank you, Anthony. So with respect to market share on derivatives, just a reminder. So our derivatives franchise is based on obviously equity derivatives, so exchange listed derivatives. With respect to peers, our market share trend has been positive year-on-year versus Eurex, and we've seen no market share on the Cboe attempts from the Netherlands. Obviously, you raised the question about the size of the OTC markets. So within the space we're currently occupying, we see the market share stable between on-exchange and OTC. But obviously, going forward, as Anthony said, once we integrate the clearing aspect to our strategy, the clear price here is to bring on exchange some of the OTC business. We've made a very successful first moves here with respect to the total return futures franchise across -- on the CAC 40. This will be extended to other national entities, and we're looking very carefully at total return swaps and the further development of our dividend complex around derivatives. So this is clearly a space where we see upside post migration.

We'll now take our next question from Bruce Hamilton at Morgan Stanley.

Sorry, yes, I'm new to that. Can you hear me?

Yes, we can.

Yes, sorry. So yes, 3 questions from me. Firstly, on cost saving, obviously, you're doing very good job on costs at the moment you're running below prior year Q2. I know there are a number of comments around sort of further kind of investment builds in the second half. But just to check, I mean it feels as though you're running quite a bit below that EUR 630 million, so I just wanted to confirm that there aren't risks on the downside to that number. Secondly, on the treasury income, NTI was a little firmer. I guess that was on the back of collateral balances being a bit higher. Were they particularly elevated in Q2? Or is that a sort of a good sort of sustainable level that we can consider going forward? And then third one, just going back to the question on consolidated tape to check I heard you right, Stephane. We're talking then about a pre-trade consolidated tape. I guess that would theoretically carry more risk to revenues, I assume. So there could be -- I know it's longer dated. But would you expect that to be some downside beyond 2025 then to some of your data-related revenues?

So I'll take your question on the consolidated tape, and Giorgio will answer your question on cost and on NTI. The scope of the consolidated tape has been finalized a few days ago, and that will be a real-time, pre-trade EBBO1 anonymized consolidated. It's a new product with no impact on trading and with limited impact on real-time market data to the extent that irrespective of what this limited impact is, it will be further mitigated by various steps that are being discussed on the board. We don't expect material net-net impact on the revenues, even if for some clients who are using our real-time market data for EBBO1. That could be a new product of interest. But you have to consider that this EBBO1 pre-trade, real-time anonymized tape is a totally new product, and we don't expect any material impact in any event before '25, '26. So the debate is ongoing. I think the discussions that will take place in the coming months are important to be in a position to answer more precisely your questions. The way the selection of the operator of the consolidate tape will take place is important. So I suggest that in order to provide you with a very educated answer, we talk again. Let's go over the following one. Now over to you, Giorgio, on cost and NTI.

Yes, sure. Let me start on cost. The first message, as I said, is that we confirm the EUR 630 million as a target for this year. And the reason for that, you might remember that last year, we said that we had EUR 10 million devoted to the development of strategic projects. And as I said, those EUR 10 million, the spending of this EUR 10 million is not going to be equally spread across the 12 months but is going to impact more the second part of the year. So this is the first element. The second element is that if you look at from a reported basis, clearly, you see a decrease. But like-for-like, you see a 1.9% increase. So the NOK as well an impact on this cost performance, and we don't know what are going to be the evolution in the next 6 months. And final comment, we have quite a strong delivery pipeline for the third and the fourth quarter, which means that it would be too early for us to change the guidelines for the end of the year. So we are happy, extremely proud of what we have delivered so far in terms of cost control but not ready yet to change the target. When it comes to NTI and to the absolute level of the collateral, what I would say is that we have seen in the last couple of quarters an increase with respect to the overall amount with respect to last year. Right now, we are trending around EUR 25 billion. This trend has been, I would say, relatively stable. But as you know, depends on market condition. June, we have seen a slight decrease. So what I would say is that, again, to answer your question, the level at the moment is around EUR 25 billion. This is driven by market conditions, so it's relatively difficult to anticipate. But we have seen a slight decrease towards the end of the quarter but no specific sign to anticipate in the next quarter. It's going to be significantly different from where it is today.

We'll take our next question now from Enrico Bolzoni at JPMorgan.

Just one, you mentioned that you were going to launch dark pool, I think, towards the end of the year. Can you give us an update there? How quickly will you be able to set it up? And do you have any idea in terms of what volumes you'll be able to capture and over what period of time? And then the second, sorry, going back again on the net interest income. Should we expect any change in the split of revenues that you pass on to customers and that you retain as rates keep evolving? Or it's going to remain fairly stable going forward?

So Giorgio will answer your question on net treasury income, and Simon Gallagher will provide you details on the dark pool industry.

So on the net treasury income, as I commented in the past, right now, the model is fairly simple, which means that we have -- we pay our clearing members a variable fee. And we received from ECB a variable fee, which means that we are a variable interest, which means that we are completely hedged and we earn a spread, which is around 20 basis points. So we take no counterparty risk, no risk as well on the evolution of interest rates. So what we shall assume for the moment is a spread around 20 basis points going forward. So the key variable that will impact the NTI are going to be mainly 2: one, which is the -- as we discussed in the previous question, the absolute amount of the collateral receipt; and the second is the share of collateral, which is actually at LCH SA with which we have an [ interoperable ] link. So those are going to be the 2 variable. But again, on average, we expect to receive around 20 basis points.

Thank you. And concerning the dark pool. So in terms of timing, work is underway, and it will be technically ready by the end of the year for a launch at the back end of December, early January this year. In terms of volumes, as a reminder, the type of dark trading we're targeting here is the reference price waiver volumes. So these are the dark trades generated electronically in small sizes. This makes up around 7%, 8% of the on-market volumes today. So this is the pie we're targeting. And obviously, we would like a decent market share of that. In terms of client interest, client interest is great due to 2 reasons: the latency proximity to the reference prices in Bergamo compared to platforms in London; and secondly, the presence of local players -- domestic players from each of our markets. And just in terms of fees, this is expected to be nondilutive as it will be charged roughly in line with the lit market.

Can I ask -- sorry, a follow-up on this one. you say you're targeting in small size at the moment, so below the waiver. Is it fair to assume that for now that you're not actually targeting the institutional flows that I presume tend to be bigger in size? Because I guess they might also have an interest in trading with your dark if the losses is going to be very small. Am I right? Is this something you might consider in the future?

Absolutely, absolutely. The first step will be primarily the smaller sizes from the sell-side intermediated algorithms, but we don't exclude at all. Large-in-scale trades will be available on the platform. But obviously, the developments going forward will be to move into that space as well.