5. REPORT OF THE MANAGING BOARD FOR THE YEAR 2003
5.3. OTHER ACTIVITIES, PARTNERSHIPS & ALLIANCES

5.3.2. GL Trade, the world's leading provider of electronic trading solutions
Euronext Paris holds 51.3% of the capital of GL Trade, a French company listed on the Nouveau Marché, through its 51% owned subsidiary Financière Montmartre, as further detailed below, and thereby controls the GL Trade Group.
2003 Key figures

• Turnover: €128.1 million
• International turnover: 73%
• Net margin (before goodwill): 12.6%
• Staff: 937 people


Financial overview: the business in 2003

In 2003, despite difficult market conditions and the impact of foreign exchange movements, GL Trade’s contribution to Euronext’s revenues remained steady at €128.1 million. Its trading system revenues grew by 13%, with the negative effects of mergers and cost cutting measures amongst clients, offset by enhancements of the range of trading products. The pre- and post-trade products lines saw growth of 18%, showing the Group was right to concentrate more on these areas.

Though, data transmission and e-brokerage business were quite impacted by economic difficulties: the GL Multimedi@ subsidiary, whose core business lies in these areas, saw the sharpest fall (-33%).
 

5.3.2.1. Introduction to business
GL Trade designs, develops and markets complete solutions for market displays, real-time order placement and automated transaction execution. GL Trade, which is based in Paris, has 18 offices outside France and distributes its products in more than 25 countries around the world. It is the market leader on the main financial markets worldwide and is the only Group offering a global system compatible with all kinds of markets and products.
In 2003, 73% of GL Trade's revenues were derived from its international activities. The company has 3,500 customers, including 500 international institutions.

5.3.2.2. Business overview
GL Trade earns nearly half of its revenues from the GL Win trading station. Used daily by 30,000 professionals worldwide, GL Trade's front-end trading system is now recognised as setting the standard globally for electronic trading. GL Trade also offers clients GL Net, the first private international network entirely dedicated to electronic trading.

The company provides direct electronic access to more than 95 stock and derivatives markets around the world via the GL Gateways systems. Other services include diversification of front and middle-office automated processing applications, e-broking activities, and the development of assistance and engineering services.

Major steps reached on 2003 were:

  • Acquisitions
    At the end of 2003, GL Trade acquired three companies in Hong Kong, Japan and the UK, allowing GL Trade to become leader in the front-office market in Asia, and to enter the backoffice market. It will also strengthen the presence of GL in the UK. These acquisitions represented a revenue of €2.8 million this year and €9 to €10 million on a full year basis.

    The company also acquired 4D Trading, a London-based company, which has developed an innovative 3-dimension visualisation product integrated in GL Win's offer.

  • Technology
    The new V5 technology (completing a three-year project) places GL Trade ahead of its competitors. Moreover, the company recently teamed with HP to bring GL Trade applications to Linux.


    5.3.2.3. Outlook
    A number of factors are expected to contribute to GL Trade's future growth: the move to electronic trading by stock exchanges (many stock exchanges, as the NYSE, are still open outcry markets), the stock market recovery, and the continuous growth of financial intermediaries connected to the markets.

    Further significant growth in GL Trade's business is expected in markets where GL Trade is already positioned: Asia (Japan, Korea, Hong-Kong, China), the United States and Northern Europe.
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