Your guest now in the big live interview on Boursorama and on YouTube is Stéphane Boujnah, the CEO of Euronext. Hello.
Thank you for being with us on Boursorama.
Thank you for the invitation.
It's a consecration, isn't it, for the 25 years of Euronext. I'll come back to that because it's normal. It's still great, this entry into the elite of the Paris Stock Exchange. This entry into the CAC 40, it's been almost 2 months now and there you go, it's a consecration. We can say that.
Yes, it's the culmination of a long effort. Let me remind you that in 2014, who would have believed it? At the time of the IPO in June 2014, it was worth 1.4 billion. When I arrived, it was a bit more, 1.8 to 2 billion. Today it's 13 to 14 billion. Between 13 and 14.
So it's a huge amount of work done by the teams in a difficult environment. At the beginning, we had to resist the attempted merger between the stock exchange and the London Stock Exchange. We had to fight against Nasdaq in Norway when we tried to buy Oslo Børs. We had to fight against Deutsche Börse to buy Borsa Italiana. And then there was all the work on operational performance that was done in parallel, which allows us to be today, I wouldn't say the elite because that doesn't make much sense. There are excellent companies that are not in the CAC 40 simply because they have a smaller free float. But for companies that represent the investable universe, as they say, that is, the largest free float and the most important liquidity, it is indeed a company that is worth more than a certain number of the flagships of French capitalism. So we are very happy. It's really considerable work by the teams across Europe.
The keys to success of Euronext under Stéphane Boujnah are obviously the diversification strategy, both horizontal and vertical, and cost control. They say you're the king of cost control. That's true.
The two are not mutually exclusive. By the way, let me repeat some fundamental things. There is an adage from Thucydides in the Peloponnesian War: 'To rest or to remain free, you must choose cost control.' It is a condition of operational performance. And performance is a condition of independence. You can decide to be the best recipe for success. Actually, the best recipe for failure is to be nice to everyone. If you want to succeed, you have to have unpleasant conversations. People who don't manage operational performance well or who don't manage costs well often do so because they emotionally cannot handle difficult conversations with certain employees, difficult conversations with suppliers, difficult conversations with clients. If you will, that's the Boujnah method: to assume saying no, to say no. But it's not the Boujnah method, it's the method of all those who have succeeded for 5000 years: to accept being a bit more alone, to accept having a few less friends, to accept taking a bit more risk. It's not a Boujnah method, it's the method that in all sectors of human activity, not just business, is called taking risks and facing difficulty. It's the opposite of the budget discussion we are having today. It's something where we prefer the future over the present. The present is having a pleasant life and pleasant conversations with everyone. The future consists of facing difficulties now to leave for those who come after something in better condition than what we found, and not leave something in worse condition than what we found. So we took a company worth 1.4 billion, and we will hand it over to our successors at least at 13 or 15 billion.
I don't know. Ah, okay. That's not on the agenda.
No, it's not on the agenda. But what I mean is the idea is to be obsessed with the future and obsessed with leaving something in better condition than what we found. Well, there are people who return objects in better condition than they found them and people who return objects in worse condition. So we can't be responsible for everything. But among the things we are entirely responsible for in a company is the management of operational performance. You can't blame the market or the environment for operational performance. So indeed, there is an obsession with operational performance because that's what gives the company oxygen, that is, free cash flow generation, the ability to build a solid balance sheet with which you can deploy capital for expansion.
And so expansion comes through multiple acquisitions. There have been many over the past 10 years. Yes, that's also it.
Yes. For me, acquisitions are only one of the modalities of capital deployment. That is, first and foremost, the generation of free cash flow, which means segmenting customers to extract maximum surplus, and then obsessive cost management. That generates a capacity to be free called free cash flow. Then, with that money, you deploy capital either in organic expansion projects. That is, you use your resources that make you unique on the planet: this portfolio of assets, its clients, its teams, this technology to invent new solutions that clients need. And in parallel, to go faster, but it costs much more, you buy existing assets. When you do it yourself, it costs you three times EBITDA per project. When you buy others, it costs you 12 to 15 times. But you have a different risk level. That's capital deployment. It's measuring where the money you generated for your shareholders can be best deployed. And indeed, we have made many acquisitions, and we are still in the process. There is an offer on the Athens Stock Exchange that is closing next week and is on track. Well, that's for the shareholders to decide, and we'll know on Monday. But we made an exchange offer, meaning we propose to Athens Stock Exchange shareholders to exchange 20 Athens Stock Exchange shares for one Euronext share, and we'll see the result.
