"The benefits of delivering on our strategic objectives are evident in 2021’s results. Two years ahead of plan, business income margin growth has outpaced our 2023 financial targets."
Dear shareholders,
Euroclear has continued to deliver a strong business performance in 2021, against a com-plex backdrop of macro-economic and political uncertainty, and the ongoing headwinds resulting from the Covid-19 pandemic. The outcome has been record operating metrics and excellent financial results.
BUSINESS RESILIENCE, STRATEGIC OUTPERFORMANCE
I am very proud that Euroclear has made such good progress in 2021 and I would like to focus on two key reasons that we achieved this.
Firstly, we continue to demonstrate the resilience of the group throughout the disruption caused by Covid-19, which resulted in a substantial 23% increase in transaction volumes over the past two years. During this period, our service levels remained high and our systems performed well.
Our Euroclear colleagues have been central to en-suring the business continuity that was at the heart of last year’s outstanding performance. I would like to thank them all for their dedication and resilience in the face of the continued uncertainty and challenges presented by the pandemic. Our people have shown great professionalism in adapting to new ways of working and they continue to exceed expectations in support of our clients.
Secondly, we continued to accelerate progress on our three strategic pillars: strengthening, growing and reshaping the Euroclear network to create long-term, sustainable growth.
The benefits of delivering on these strategic objec-tives are evident in 2021’s results. Two years ahead of plan, business income margin growth has outpaced our 2023 financial targets and offset a weaker interest rate environment. We continue to invest in strategic initiatives to adapt our technology capabilities and deliver product enhancements to support future growth. We took an important step with the acquisi-tion of MFEX, a leading global digital fund distribution platform, which enhances and extends Euroclear’s customer proposition in funds.
As I write to you today, a strategic review led by man-agement and the Board has just been conducted to refresh our strategy for the future and create an ambi-tious set of new targets. We will outline our vision and growth objectives later in the second quarter of 2022.
CONTINUING TO INVEST IN OUR FUTURE
Euroclear is in robust health and remains well positioned to grasp the significant opportunities we see ahead. All of Euroclear’s operating entities today hold a licence under the CSD Regulation, where required, representing a hall-mark of quality, and these entities together play a crucial role at the core of the global capital markets ecosystem. We therefore continue to invest carefully across our busi-ness — in our people, technology, regulatory imperatives, and customer proposition — as a systemically important financial market infrastructure.
It is key for all participants to feel they have a trusted partner through whom assets can be held and mobi-lised safely, with transactions taking place efficiently and reliably. Investment in Euroclear’s operating systems and technology platforms has been crucial in seamlessly and securely supporting the sustained increase in transaction volumes over the past year.
Investment in resilient, scalable systems means Euroclear is in a strong position from which to play a vital economic and social role within the global economy as the industry further harnesses opportunities from leveraging data and the rise of sustainable finance.
"It is key for all participants to feel they have a trusted partner through whom assets can be held and mobilised safely, with transactions taking place efficiently and reliably."
COMMITTED TO SUSTAINABILITY
In 2021, we appointed our first Chief Sustainability Officer to lead our dedicated team in further maturing and communicating our approach to Environmental, Social and Governance (ESG). We also engaged PwC to help us further understand how we can leverage and harness the opportunity of ESG in our business. From this study we have set out five core areas in which we intend to maximise value for our wider stakeholders, grasp the opportunities of ESG and support the financial industry as it embraces broader sustainability principles.
With focus on ESG matters continuing to increase among issuers and investors alike, Euroclear actively supports the incorporation of such factors into securities profiles and investment processes – and has an important role to play in the transition to a truly sustainable world. As a place of issuance, with access to a global network of investors, we were very pleased to announce a strategic investment in Greenomy, a Belgium based sustainable finance tech-nology platform, in early 2022. This investment will allow Euroclear to bring non-financial reporting to our network, facilitating a reduction of issuance barriers for sustainable finance.
In 2021, we continued to advance the social aspects of Euroclear’s broader ESG strategy. For example, we launched our corporate volunteering programme and continued to build on our successful Diversity & Inclusion programme through engagement both inside and outside the organisation. We continue to foster diversity and inclusion, with an emphasis on ethnicity, disability and LGBTQ+ concerns as well as gender diversity. We are taking concrete initiatives such as adapting our offices and providing inclusivity training for our leadership teams.
Looking ahead, in 2022, we will finalise Euroclear’s path towards achieving net zero by committing to set rigorous new science-based targets, while simultaneously reviewing our Scope 3 emissions, with a particular focus on our supply chain and a reassessment of how we manage climate risk more broadly. A full 2021 Sustainability Report for the group will be published this summer.
THANK YOU
Finally, I would like to extend my sincere thanks to all our customers for entrusting their business to us; to my colleagues and partners for their ongoing dedication to our business; and to you, our shareholders, for your confidence in us. I look forward to working with the Board and our executive team to deliver further strong progress in 2022 and beyond.
Thank you,
Lieve Mostrey
Chief Executive Officer, Euroclear group
