Exchange company Six still has an appetite

Deutsche Börse’s competitor is digging through a large takeover, but is aiming for further growth steps, according to CFO Schmucki. For trading platforms, breadth and size are important prerequisites for economic success.

Takeovers in view: Daniel Schmucki, CFO of the Six Swiss Exchange during a press conference in 2019

Tspit of the billion dollar takeover of the Spanish BME, the takeover appetite of the Swiss stock exchange group Six has not yet been satisfied. In addition to organic growth, Six is ​​also banking on acquisitions, as Chief Financial Officer Daniel Schmucki told Reuters. All four business areas of trading, post-trading, financial data and banking services could be considered for takeovers.

“We are monitoring opportunities very closely,” said Schmucki. “Another major takeover is theoretically conceivable, but these are rather rare.” With an acquisition, Six wants to leverage economies of scale and growth potential. Last summer, the group was left behind in the race for the Milan stock exchange.

Growing on your own too

When it comes to growing on its own, the rival of Deutsche Börse relies on the planned SDX digital exchange, among other things. Six is ​​in the process of completing the necessary bases for the licenses of the Swiss financial market regulator Finma. “We expect that we will be able to complete the approval process in the first half of the year,” said Schmucki. “Then we could probably go live with the first transactions at the beginning of the second half of the year and generate the first sales in the course of the summer quarter.”

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To the detailed view

In the past financial year, thanks to the record high trading volume triggered by the corona crisis and the additional business of BME, which was taken over in 2020, the turnover of Six climbed by almost 22 percent to 1.38 billion Swiss francs. The company was able to almost quadruple its profit to CHF 439.6 (previous year: 120.5) million thanks to the sale of a block of shares in the payment service provider Worldline.

In the current year, Six could for the first time book the profit contribution from BME for an entire financial year. “But the bottom line is that we do not expect such a strong financial result for 2021, which will mean that the profit in 2021 will probably no longer be in the order of magnitude of 2020,” said Schmucki and granted another sale of a large Wordline package a rejection.

In 2021, trading volumes are likely to decline compared to the previous year in view of the expected lower market fluctuations. In addition, an agreement with Great Britain will mean that part of the business with Swiss shares will migrate to British trading venues. Since the introduction of the equivalence on February 1, the market share of SIX has fallen to around 80 percent from almost 100 percent previously. “In the medium term we are assuming a market share in the higher 70 percent range.”