In 2019, EEX Group achieved a record result for the third consecutive year, increasing its sales revenue by 14% to EUR 304.2 million and reporting significant growth across the majority of its portfolio (2018: EUR 267.7 million). The record achievement was driven by the outstanding performance of the European power and natural gas markets, the strong growth in US power derivatives and environmental products as well as the huge gains achieved in freight.
On the 2019 results, Peter Reitz, Chief Executive Officer of EEX comments: “As a Group, we achieved a great deal across the three major time zones; Europe, Asia and North America. In addition to a record financial result stemming from volume increases across the majority of our portfolio, 2019 was the year where we solidified our position as a Global Commodity Exchange".
As a result of its successful expansion strategy, the Group’s earnings before taxes (EBT) also hit a new record level, increasing by 6% to EUR 98.0 million (2018: EUR 92.1 million).
“2019’s strong financial result for the third year in a row demonstrates that we are following the right expansion strategy”, comments Iris Weidinger, Chief Financial Officer of EEX Group. “Furthermore, in 2019, we invested heavily in the further development of our business segments and the technical infrastructure in order to support our global growth ambitions”.
European Expansion
In 2019, EEX Group extended its European power derivatives offering to 20 markets, adding Slovenia, Bulgaria and Serbia to the portfolio. In total, the sales revenue generated in European power derivatives grew by 21% to EUR 92.9 million (2018: EUR 76.6 million). In particular, the increases in the Spanish, German and Hungarian power derivatives markets contributed to this development. Revenues on the power spot markets as operated by EPEX SPOT remained stable with EUR 72.7 million (2018: EUR 72.6 million). The European natural gas portfolio also expanded to include Spanish spot and derivatives products for the first time. Overall, the natural gas markets revenue grew by 23% to EUR 55.1 million (2018: EUR 44.9 million). To facilitate ease of trading across the power and natural gas segments and to boost liquidity, EEX embarked on a major project in 2019 to integrate both Powernext and Gaspoint Nordic as of 1st January 2020, bringing both businesses onto one single platform with one rulebook and one membership.
Asian Ambition
EEX Group’s performance in Dry Bulk Freight also saw significant growth in 2019, achieving a year on year increase of +109%. Factors that have contributed to this success included a major increase in the member base, improvements in distribution and connectivity and an enhanced product portfolio. This period of sustained organic growth in addition to the migration of Freight Open Interest from Nasdaq Futures, Inc. (NFX) to European Commodity Clearing (ECC), has resulted in EEX Group emerging as a major player in global freight trading, thereby opening up additional opportunity for organic growth in Asia. Furthermore, in line with its growth strategy for the Asia region, EEX Group announced in March 2019 its intention to launch clearing services for the Japanese power derivatives market in May 2020.
States Success
In 2019, the US power markets as operated by Nodal Exchange grew by 79% compared to 2018, achieving a record 45% market share of open interest in the US power futures market. Nodal Exchange, EEX Group’s exchange in the United States, also continued to grow beyond power, expanding its natural gas products suite with seven new Henry Hub natural gas contracts, their first natural gas options contracts in addition to the introduction of the world’s first exchange products for Trucking Freight. North American environmental futures trading also reported an excellent year, achieving a 6% market share and 48,780 lots of open interest by year end. In total, combined sales revenues generated by US commodities increased by 76% year on year to EUR 20.4 million.
On the outlook for 2020, Peter Reitz comments: “In 2020, EEX Group will continue to move forward with a series of important strategic initiatives, such as the recently completed acquisition of the software company KB Tech and the upcoming launch of clearing services for the Japanese power derivatives market. I’m confident these actions will faciliate further growth as we continue to work towards our goal of becoming the preferred Global Commodity Exchange”.
EEX Group provides market platforms for energy and commodity products across the globe and provides access to a network of more than 650 trading participants. The group offers trading in power, natural gas, environmental products, freight, metal and agriculturals as well as subsequent clearing and registry services. EEX Group consists of European Energy Exchange (EEX), EPEX SPOT, EEX Asia, Power Exchange Central Europe (PXE) and Nodal Exchange as well as the registry provider Grexel Systems and software company KB Tech. Clearing is provided by EEX Group’s clearing houses European Commodity Clearing (ECC) and Nodal Clear. EEX Group is based in 17 worldwide locations and is part of Deutsche Börse Group.
More information: www.eex-group.com