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Euroclear Plc Annual Report 2016 | Strategic Report

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Euroclear Plc Annual Report 2016 | Strategic Report Euroclear plc Euroclear About EuroclearAnnual Report 2016 Euroclear plc EuroclearEuroclear plc is the financial industry’s trusted provider of post-trade services. We provide settlement, safekeeping and servicing of domestic and cross-border securities transactions from bonds, equities and derivatives, to investment Annual Report 2016 Annual Reportfunds. We2016 connect over 2,000 financial market participants across the globe and ensure that all securities transactions are processed safely and efficiently. As an open and resilient infrastructure, we help clients reduce complexity and costs, and mitigate risk. Euroclear history 1968 Morgan Guaranty launches the Euroclear System 1972 2000 2001 Euroclear System sold to the Euroclear Euroclear Bank is created, taking Euroclear Bank merges with Sicovam, Clearance System Public Limited responsibility for all Euroclear-related the CSD of France, which is renamed Company which is owned by over operating and banking responsibilities Euroclear France. CSDs of the Netherlands 120 major financial institutions and Belgium sign agreements to join the Euroclear group 2009 2005 2002 Euroclear Settlement of Euroclear SA/NV created as a CRESTCo, the CSD for Irish Euronext-zone Securities (ESES) new parent company, owning equities and all UK securities, is launched Euroclear Bank and the CSDs becomes part of the Euroclear and the group’s shared group. It is later renamed securities-processing platforms Euroclear UK & Ireland euroclear.com 2012 2014 2016 Euroclear's Collateral Highway Euroclear and the Depository Trust Euroclear’s ESES CSDs is launched as the first fully open & Clearing Corporation (DTCC) establish (Euroclear Belgium, Euroclear global market infrastructure to joint venture to deliver a pan-Atlantic France and Euroclear Nederland) source and mobilise collateral collateral processing infrastructure connect to the ECB’s © 2017 Euroclear SA / NV, 1 Boulevard du Roi Albert II,1210 Brussels, Belgium, Tel: +32 (0)2 326 1211 – RPM Brussels number 0423 747 369. across borders – DTCC-Euroclear GlobalCollateral Ltd TARGET2-Securities platform Euroclear is the marketing name for the Euroclear System, Euroclear plc, Euroclear SA / NV and their affiliates. All rights reserved. The information and materials contained in this document are protected by intellectual property or other proprietary rights. All information contained herein is provided for information purposes only and does not constitute any recommendation, offer or invitation to engage in any investment, financial or other activity. We exclude to the fullest extent permitted by law all conditions, guarantees, warranties and / or representations of any kind with regard to your use of any information contained in this document. You may not use, publish, transmit, or otherwise reproduce this document or any information contained herein in whole or in part unless we have given our prior written consent. Your use of any products or services described herein shall be subject to our acceptance in accordance with the eligibility criteria determined by us. Euroclear is a carbon neutral company – PAS2060 certified • MA3968 – 2017 About Euroclear Euroclear is the financial industry’s trusted provider of post-trade services. Euroclear is the financial industry’s trusted provider of post-trade services. We provide settlement, safekeeping and servicing of domestic and cross-border We provide settlement, safekeeping and servicing of domestic and cross-border securities transactions from bonds, equities and derivatives, to investment securities transactions from bonds, equities and derivatives, to investment funds. We connect over 2,000 financial market participants across the globe funds. We connect over 2,000 financial market participants across the globe and ensure that all securities transactions are processed safely and efficiently. and ensure that all securities transactions are processed safely and efficiently. As an open and resilient infrastructure, we help clients reduce complexity and As an open and resilient infrastructure, we help clients reduce complexity and costs, and mitigate risk. costs, and mitigate risk. Euroclear history 1968 Morgan Guaranty launches the Euroclear System 1972 2000 2001 Euroclear Bank merges with Sicovam, Euroclear System sold to the Euroclear Euroclear Bank is created, taking Euroclear Bank merges with Sicovam, the CSD of France, which is renamed Clearance System Public Limited responsibility for all Euroclear-related the CSD of France, which is renamed Euroclear France. CSDs of the Netherlands Company which is owned by over operating and banking responsibilities Euroclear France. CSDs of the Netherlands and Belgium sign agreements to join the 120 major financial institutions and Belgium sign agreements to join the Euroclear group Euroclear group 2009 2005 2002 CRESTCo, the CSD for Irish Euroclear Settlement of Euroclear SA/NV created as a CRESTCo, the CSD for Irish equities and all UK securities, Euronext-zone Securities (ESES) new parent company, owning equities and all UK securities, becomes part of the Euroclear is launched Euroclear Bank and the CSDs becomes part of the Euroclear group. It is later renamed and the group’s shared group. It is later renamed Euroclear UK & Ireland securities-processing platforms Euroclear UK & Ireland 2012 2014 2016 Euroclear’s ESES CSDs Euroclear's Collateral Highway Euroclear and the Depository Trust Euroclear’s ESES CSDs (Euroclear Belgium, Euroclear is launched as the first fully open & Clearing Corporation (DTCC) establish (Euroclear Belgium, Euroclear France and Euroclear Nederland) global market infrastructure to joint venture to deliver a pan-Atlantic France and Euroclear Nederland) connect to the ECB’s source and mobilise collateral collateral processing infrastructure connect to the ECB’s TARGET2-Securities platform across borders – DTCC-Euroclear GlobalCollateral Ltd TARGET2-Securities platform Euroclear in 6 steps 3 Euroclear’s DNA Support an open marketplace where scale and connectivity across 1 Scale provider of post-trade services the spectrum of market participants are strengths. To be profit moderated with the financial discipline of a ‘for-profit’ entity and the commitment to support market stability, deliver shared € £ 60% economies of scale, and develop markets locally and globally. Eurobond holdings Serve the public good by ensuring the efficiency and safety of markets € and actively enabling risk-reduction. €27.7 trillion > Foster a high performing culture in respect of our corporate values, $ 50% delivered worldwide thanks to our diverse and dedicated teams. assets held in custody European capital for our clients £ market securities 40% 4 Collateral Highway 6 Breadth of participation Offshore Renminbi holdings > €1 trillion > collateral mobilised daily 90 countries Our clients are located in over 90 countries 196 million > 1.7 million € currencies £ 50 transactions processed € securities worldwide We deal in 50 settlement currencies 5 The place for funds major markets €655 trillion 49 We have links to 49 major markets in turnover €1.8 trillion 3% funds under custody year-on-year growth 16 languages > We offer personalised 11.1 million client support in 16 languages fund orders routed annually 2 Asset safety & resilience Global client franchise 145,000 + investment funds AA processed by Euroclear > 2 000 clients Fitch including: > 1200 AA fund administrators $ > Standard & Poor’s 100 90% central banks of the world’s 50 largest banks Strategic report 2016 04 Chairman’s message 06 Interview with Lieve Mostrey, Euroclear group CEO 09 Euroclear’s Management Committee 10 Operating Highlights 12 Financial Review 14 Our strategy for evolving capital markets 20 Performing strongly across the group 24 Our responsibility 28 Corporate responsibility Consolidated financial statements 2016 36 Directors’ report 41 Statement of Directors' responsibilities 42 Euroclear plc Board and Committees – composition 43 Consolidated income statement 44 Consolidated statement of comprehensive income 45 Consolidated statement of changes in equity 46 Consolidated statement of financial position 47 Consolidated statement of cash flows 48 Notes to the consolidated financial statements 108 Independent auditor's report 110 Parent company statement of financial position 111 Statement of changes in equity 112 Statement of cash flows 113 Notes to the parent company financial statements 121 Independent auditor's report Euroclear plc Strategic report 2016 Euroclear plc Annual Report 2016 | Strategic report Chairman’s message Dear shareholders, I am pleased to report that your company performed well in 2016 and maintained its profitability through a challenging year. The Board recommends a dividend of €37 per share for 2016, with a stable 40% pay-out ratio. In addition, the Board has launched and Euroclear Nederland) – Europe’s and efficient services to its large a fourth share buy-back programme, largest multi-country CSD – to the client base, as the leading European subject to shareholder approval, European Central Bank’s TARGET2- marketplace for securities. providing liquidity to those who wish Securities (T2S) platform. The orderly to sell, while enhancing value for connection to T2S was a complex That Euroclear is well positioned at our engaged and committed and challenging undertaking for this point is testament to Tim Howell’s shareholder base. which the Board congratulates both tenure as Chief Executive Officer management and staff. (CEO) of Euroclear over the past six The Board has decided
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