A reliable sign of the approaching Swedish spring, is the Annual General Meeting. It gives us the opportunity to summarise 2007, which indeed was a record year for Neonet. Revenues increased in all of Neonet’s markets, confirming that we further strengthened our position as a global supplier of transaction services.
The year was marked by rapid development and change on financial markets worldwide. These developments influenced conventional market structures and created new opportunities for electronic trading. The driving forces were rising trading volumes, technological progress and new legislation in Europe and the US. Growth and increasing complexity impose higher demands on market players, system performance and technical infrastructure. There is a growing need for ever-more sophisticated and integrated technological solutions to match the new market conditions.
Neonet is well positioned in a changing landscape through its combination of trading services and system and software services. Our system and infrastructure are deployed in global brokerage operations through which we offer trading on some 30 marketplaces worldwide. Trading volumes via Neonet reached a record level in 2007, with growth of 79 percent compared with 2006. Our growth rate outperformed the market as a whole.
During the year, we broadened our offering with the inclusion of global round-the-clock trading through connections to the stock exchanges in Tokyo, Osaka, Hong Kong and Singapore. In addition, trading was launched in Eastern Europe through a link to the Warsaw stock exchange during the fourth quarter. Neonet was also the first broker in the Nordic region to offer trading opportunities on Chi-X, Europe’s first alternative marketplace.
Our proprietary system for global share trading is aimed at banks, broker-dealers, institutional investors, hedge funds and marketplaces. Demand for efficient system solutions is driven by changes in financial markets and revenues from our systems and software services, Neonet XG, are rising steadily.
We are expanding in parallel with our clients. Thanks to the exchange of experience with our global client base, we ensure the evolvement of Neonet’s offering in terms of technology and services alike. We bolster client competitiveness through the continuous launch of new trading services. Significant developments during the year included the addition of algorithms from Citi – the world-leading investment bank – to the trading offering. We also developed advanced functionality to meet the requirements arising from the introduction of MiFID, the EU’s financial directive. This new legislation is aimed at raising efficiency and transparency in the financial markets.
At mid-year, the Neonet share was upgraded to the Mid-Cap segment of OMX Nordic Exchange in Stockholm as a result of Neonet’s higher market capitalization. This entails higher visibility vis-à-vis the stock market.
Against the background of Neonet’s robust growth in recent years and its favorable prospects, the Board has decided on new long-term financial targets for the period 2008–2010.
The new targets entail that that Neonet, no later than 2010, will at least double its operating revenues and attain earnings (EBT) of some SEK 400 m.
We can summarize 2007 as a record year hallmarked by solid growth, high profitability and a strengthened client offering. We at Neonet are, of course, proud of our impressive performance. I would like to take this opportunity to thank all employees, whose commitment and expertise provided the basis for all our successes. We will continue to make every effort to enhance the offering and thus consolidate our existing client relations, while attracting new clients.
Simon Nathanson
CEO and President, Neonet