The ballroom for Austria’s public companies

Vienna Stock Exchange – the ballroom for Austria’s public companies

2019 has not been an easy year for stock exchanges and in spring 2020 Covid-19 made for an even more difficult environment.

Founded in 1771, the Vienna Stock Exchange is one of the most venerable stock exchanges in the world. Today, Wiener Börse AG is a modern, customer- and market-oriented infrastructure business, operating the stock exchanges in Vienna and Prague. The group offers the latest infrastructure and provides market data and information. It’s business rests on five pillars: securities trade and listing, market data, index calculation, IT services and central securities depository.

A short review: stability through diversification

Wiener Börse AG reviewed its financial year 2019 and provided insights into its current initiatives. The expansion of trading services, three IPOs, new SME segments and growing bond listings demonstrate the attractiveness of the Vienna marketplace for companies. Marinomed Biotech (1 February 2019), Frequentis (14 May 2019) and Addiko Bank (12 July 2019) celebrated their debut in the top segment Prime Market. RHI Magnesita is listed once more in the Standard Market as of March 2019. In a consolidating market that continues to be subject to strong regulatory burdens, equity trading throughout Europe declined. In this challenging environment, the exchange operator expanded its market share and its position as an infrastructure provider. Trading hours and quotation lists were extended, and the IT services, market data and central securities depository business areas recorded significant growth. This compensated for declining revenues from trading and kept the result stable and above budget.

“The Vienna Stock Exchange delivers convincing quality and new initiatives in a challenging competitive environment. It provides the best possible infrastructure for Austrian companies, global investors and regional partners. With a view to post-Corona times, the government is well advised to activate private capital and make best use of the stock exchange so that the Austrian economy can recover more quickly”, said Heimo Scheuch, Chairman of the Supervisory Board of Wiener Börse AG. “What is so striking about the public stock market is that no other instrument can simultaneously provide more financing, visibility for a company and ensure a sustainably professional corporate organisation. This is exactly what will be needed after the Corona crisis, even though lending is currently still the main focus”.

Figures 2019

Company revenues amounted to 66.8 million euros in 2019, a slight decrease of 3.3 percent (2018: 68.9 million euros ), which was primarily due to the declining activity of trading participants (Vienna 2019: 62 billion euros, 2018: 70 billion euros, -12 percent, Prague: 8.5 billion euros, 2019: 11.1 billion euros, -24 percent). The reallocation of funds to North America and the uncertainties caused

Photo: Wiener Börse Christoph Boschan, CEO of Wiener Börse AG

In 2019, analysts started to give the bull the count several times. In 2020, the bear overtook the bull – whether because of the Covid-19 pandemic or not is still up for debate.

by the Brexit caused international investors to act more cautiously.

Revenues in IT services developed very positively. Growth was also achieved in data business, listing, trading of foreign securities and custody services. The continued diversification thus almost completely compensated for the decline in earnings from trading. Costs and expenses were reduced by simplifying the group structure. Wiener Börse AG generated a profit before taxes of 34.19 million euros in 2019. This is 6.4 percent down on the previous year (36.52 million euros). The result is slightly better than the planning for 2019, which included some investments as well as accounted for a more restrained trading activity of the market participants. For 2020, significant growth is expected so far. The equity capital of Wiener Börse AG amounted to 143.3 million euros as of 31 December 2019, and the balance sheet profit for 2019 was 26.4 million euros. At the end of December 2019, Wiener Börse AG had 160 employees (full-time equivalent).

Like many of its listed companies, the Vienna Stock Exchange operates globally and generates 84 percent of its turnover with international customers. “Broad diversification and a strong footprint in the region make a significant contribution to our ability to achieve our annual targets. However, a stronger domestic shareholder base would by no means be just a mere showpiece for the stock exchange, but a solid support for crisis management and corporate financing. Countries with developed capital markets show more growth and recover faster from crises”, says Christoph Boschan, CEO of Wiener Börse AG.

Covid-19: stock exchange as critical infrastructure provider

In the spring of 2020, both trading turnover and price fluctuations rose sharply. From the beginning of the year up to and including May 2020, equity trading volumes amounted to 32.03 billion euros, a year-on-year increase of 21.4 percent (Jan-May 2019: 26.38 billion euros). In managing high volatility and the surge of transactions, the exchange operator relies on proven protective mechanisms such as the volatility interruption.

The average monthly turnover in the first quarter 2020 of 7.2 billion euros was the highest of the past ten years. March alone saw a turnover of 10.94 billion euros, an increase of 82.64 percent compared to March 2019 (5.99 billion euros). The days with the highest trading volume in Q1 2020 where 20 March with 777 million euros (end of quarter), 9 March (765 million euros) and 28 February (748 million euros).

The Austrian stocks with the highest turnover in the first quarter 2020 where Erste Group Bank AG with 3.68 billion euros, OMV AG with 3.04 billion euros and Voestalpine AG with 1.92 billion euros. Raiffeisen Bank International AG (1.79 billion euros) and Verbund AG (1.45 billion euros) ranked fourth and fifth, respectively.

Wiener Boerse AG operated its infrastructure for nine weeks largely by means of remote access and teleworking. Since mid-May, operations at the site have been continued in alternating teams.

“In times of crisis, exchanges stand out through transparency. They offer a real-time display of economic health. If we are confronted with the question of closure every now and then, there is only one thing I can say: You don’t throw away a thermometer when it shows elevated temperature,” says Christoph Boschan.

The Vienna Stock Exchange views the health crisis surrounding Covid-19 as an opportunity to give private capital in Austria a more prominent role and to relieve the burden on national budgets. Crisis recovery must be put on a broader footing. The government programme already contains all the building blocks to activate more private capital for Austria. Consistent regulatory modernisation and the strengthening of economic education in Austria are the basis for the further development of the capital market. The introduction of a retention period and thus a tax relief for long-term stock ownership will make participation more attractive for the population.

“Companies will need equity capital for their recapitalisation when they tackle the crisis in autumn. In order for Austria’s economy to recover more quickly, the path taken by the government before Corona must be continued swiftly. After the health crisis has been overcome, it is essential to secure the financial health and prosperity of all citizens in the long term,” Boschan concluded.

Expanded offering

In April 2020, the Vienna Stock Exchange launched the calculation of the new CECE SOFT index. It comprises the largest and most liquid companies in the “Software & IT Services” sector in Central, Eastern and Southeastern Europe. The software industry in the region has developed strongly in recent years and produced innovative products and blockbuster productions. The largest companies in the index are the Czech

Photo: Wiener Börse software company “AVAST” (antivirus program), one of the largest software companies in Europe “Asseco” and the PolHeimo Scheuch, CEO of Wienerberger AG and Chairman of the Supervisory Board at ish developer and publisher of Wiener Börse AG computer games “CD Projekt” (action role-playing games “The Witcher” and “Cyberpunk”). The tradability of the index is guaranteed by selecting the companies with the highest turnover in this sector; the index can be used as an underlying base for

“The Vienna Stock Exchange offers convincing financial products. quality und new initiatives in a challenging comSince 24 April, the Vienna petitive setting.” Stock Exchange has been calculating the ROTX Total ReHeimo Scheuch turn. The Romanian dividend index was launched in response to the demand of international market participants. It reflects the attractive dividend yields of the growth market Romania.

Changes in the quotation list

In March, the Vienna Stock Exchange reviewed its Austrian stock indices applying the respective rules and regulations. Mayr-Melnhof Karton AG, the world’s largest producer of coated recycled fibre-based cardboard, will replace the aircraft component manufacturer FACC AG in the Austrian leading index ATX. Mayr-Melnhof AG exceeds FACC AG with regard to the size of the free float

capitalisation. The shares of the cardboard manufacturer were last represented in the leading Austrian index almost continuously between 1994 and 2014.

In the ATX Five, which comprises the five largest listed companies, BAWAG Group AG replaces voestalpine AG. The five largest companies on the Vienna Stock Exchange are: Erste Group Bank AG, OMV AG, Verbund AG, Raiffeisen Bank International AG and BAWAG Group AG.

After a share buyback with a subsequent withdrawal of shares, the free float factor of BAWAG Group AG increases from 0.7 to 0.8. The free float factor of Marinomed Biotech AG increases from 0.5 to 0.6 after a major shareholder sold shares. The free float factor of S Immo AG falls from 0.7 to 0.6. The investors Pecik and Ketterer increased their holdings during a capital increase of S Immo AG in January. The free float factor expresses how many shares of a company are publicly held and influences how strongly a share is weighted in the index.

Vienna and Budapest continue to cooperate

At the start of the year, the Budapest Stock Exchange and the Vienna Stock Exchange extended their cooperation agreement until 2026. The agreement covers the provision of trading system services, market data distribution and the calculation of stock market indices. Both exchanges are already looking back on 15 years of successful cooperation.

“We aim to provide modern and stable infrastructure and systems to our capital market participants. The Vienna Stock Exchange has proven to be a very reliable partner for this quest. We are pleased to continue our long-standing and well-established cooperation,” says István Máté-Tóth, Deputy CEO of the Budapest Stock Exchange. Vienna is equally delighted with the move: “By extending the agreement, the Budapest Stock Exchange has emphasised its trust in the reliability of our services. We are honoured to further provide high-quality services and top-notch technology to our partner,” says Ludwig Nießen, COO & CTO of Vienna Stock Exchange.

The Vienna Stock Exchange cooperates with over ten exchanges throughout Central and Eastern Europe. It supplies technical infrastructure and services for five markets including Austria, Croatia, the Czech Republic, Hungary and Slovenia. In addition, it operates the central market data feed and calculates about 150 indices for the region. ◆

Innovative, sustainable and safe

Its connected solutions make TÜV AUSTRIA a strong partner for safety, technology, environment and quality. From development and implementation through to usage and operation. In Austria and all around the world.

Business operations, research, technology and innovation need to be one thing first and foremost: safe and secure! TÜV AUSTRIA ensures safety and security as a leading testing, inspection and certification company in Austria and around the world, with branch offices in more than twenty countries. The group of companies offers industrial services, (laboratory) tests, supervision, certification, all aspects of data security and data protection, technical consulting, training and further education, and much more. And everything is being done as an independent third party, system-independent and solution-oriented.

In addition to having expertise in the key areas of testing, inspection and certification, Austria’s only independent technical inspection agency is a technology and innovation partner for the industrial sector, for the manufacturing trade, for local authorities and institutions. TÜV AUSTRIA makes a significant contribution to mastering the challenges in the areas of safety, technology, the environment, quality and sustainability.

Labs for functional safety and cybersecurity

TÜV AUSTRIA is constantly expanding its digital solutions in order to offer its clients and partners the best-possible services and solutions. The relevant concepts are being developed at the TÜV AUSTRIA Campus in the Digital Acceleration Incubator Next Horizon, the forward-thinking laboratory of the Group for developing new ways of thinking in safety and security concepts for the fields of Industry 4.0, Internet of Things and Automated Driving.

The TÜV AUSTRIA Technology & Innovation Center in Vienna houses a Safe Secure System Lab for testing cyberphysical systems in terms of functional safety and IT security.

The interdisciplinary #SafeSecLab, a cooperation with the University of Technology Vienna, aims to help increase integrative safety and security. In Cologne, TÜV AUSTRIA additionally operates a laboratory for the security analysis of software and hardware architectures in IoT devices. It identifies conceptual weaknesses and room for improvement.

The TÜV AUSTRIA Cybersecurity Lab in Malaysia, a jointventure with LGMS, a leading provider of IoT security services, opened at the start of the year and is a competence centre for cybersecurity tests and certifications for the entire Asian continent.

TÜV AUSTRIA Group

TÜV AUSTRIA Group’s service spectrum ranges from elevator and pressure equipment inspections, plant safety and materials testing, education and training, medical technology, electrical engineering, environmental protection, Industry 4.0, acoustic emission tests, carbon footprint evaluations, certification of personnel, management systems and products to cybersecurity, Internet of Things, e-mobility, app checks, loss adjusting, construction engineering and facility management, calibrations, product tests, robotics, technical due diligence and compliance checks, as well as hygienics (air, soil, water, surfaces, rooms) and inspections of stage, photovoltaic and wind power facilities.

Foto: T ÜV AUSTRIA, AdobeStock, Marcel Schauer

Foto: Saskia Jonasch Foto: Eric Cruysweegs

Expand market positions, develop new markets

The latest acquisitions and equity holdings reflect the diversity and growth strategy of the TÜV AUSTRIA Group. Regional competencies are supplemented in order to enhance existing customer relationships horizontally. At the same time, the testing, inspection and certification service provider is increasingly integrating its solutions vertically. This is a significant advantage for companies with globally distributed production and development facilities, which TÜV AUSTRIA supports with testing, inspection and certification services regardless of location over the entire project life cycle.

TÜV AUSTRIA has expanded its expertise in materials significantly with the integration of METALogic, the corrosion specialist at the University of Leuven in Belgium.

In Turkey, TÜV AUSTRIA is the country’s largest industrial service provider in the field of technical safety and security with its subsidiaries TÜV AUSTRIA Sila Kalite, Eurocont Turkiye and TÜV AUSTRIA Personal Belgelendirme. This also offers access to the markets in Russia, Azerbaijan, Kazakhstan, Turkmenistan, Georgia and the Gulf region.

With its specialised company TÜV AUSTRIA Mobility, the TÜV AUSTRIA Group is expanding its portfolio in Turkey in the field of international homologation of heavy-duty vehicles. Equipped with many years of experience, test stations and laboratories, TÜV AUSTRIA Mobility serves the vehicle development and production of international manufacturers with technical safety expertise right on site.

The Moscow-based company TÜV AUSTRIA Standards & Compliance operates successfully on the Russian market and neighbouring markets in the fields of energy, aerospace, transportation, health, IT and data security. For example Kaspersky, the global leader in cybersecurity, trusts in the certification services of TÜV AUSTRIA.

By acquiring the renowned company Innotec from Osnabrück, TÜV AUSTRIA strategically increased its testing and certification offer in functional safety in machine and plant construction in Germany.

TÜV AUSTRIA also fortified its market leadership in export and import conformity certification. Being a reliable and customeroriented provider of GMAP services (Global Market Access Program), the Group is now ensuring legality and product quality for goods imported to / exported from Sudan, Saudi-Arabia, Egypt, Turkey, Canada and the United States. This is an important step for TÜV AUSTRIA in expanding a key service for the global market.

With the integration of the Turin-based company Boreas, which operates successfully on the Italian market in the field of elevator technology and work equipment safety, TÜV AUSTRIA increases its portfolio in industrial services, materials technology, machine, plant and product safety, management system certification, third party checks as well as in training and further education in Liguria, Lombardy, Apulia and Tuscany.

Strong partner during the global Covid lockdown

TÜV AUSTRIA supported its clients during the lockdown in spring 2020 with a number of remote solutions such as materials testing and machine safety, IT security and data protection, online audits, online trainings, e-learning programmes, safe elevator systems, quality assurance systems and the pandemic hygiene management systems “COVID Shield” and “V-Safe” in Austria, Belgium, Germany, Greece, Portugal, Romania, Spain and Turkey.

Innovative, sustainable, safe

The TÜV AUSTRIA Group assumes responsibility for clients, partners, staff and society with its connected services offer. This makes a substantial contribution to shaping a safer world.

Foto: Eric Cruysweegs Foto: Andreas Ams¸ss