1st Half-Year Results 2007...EBIT 72,600 42,390 71.3% 141,661 88,895 59.4% Financial results 4,463...
Transcript of 1st Half-Year Results 2007...EBIT 72,600 42,390 71.3% 141,661 88,895 59.4% Financial results 4,463...
BME 1st Half-Year Results 2007
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DISCLAIMER>THIS INFORMATION IS STRICTLY CONFIDENTIAL AND IS BEING FURNISHED TO YOU SOLELY FOR YOUR INFORMATION. IT MAY NOT BE REPRODUCED OR REDISTRIBUTED TO ANY OTHER PERSON, AND IT MAY NOT BE PUBLISHED, IN WHOLE OR IN PART, FOR ANY PURPOSE. BY RECEIVING THIS INFORMATION, YOU BECOME BOUND BY THE ABOVE-REFERRED CONFIDENTIALITY OBLIGATION. FAILURE TO COMPLY WITH SUCH CONFIDENTIALITY OBLIGATION MAY RESULT IN CIVIL, ADMINISTRATIVE OR CRIMINAL LIABILITIES.
>NEITHER THIS INFORMATION NOR ANY COPY OF IT MAY BE TAKEN, TRANSMITTED INTO, DISCLOSED ORDISTRIBUTED IN THE UNITED STATES, CANADA, AUSTRALIA OR JAPAN. THE DISTRIBUTION OF THIS INFORMATION IN OTHER JURISDICTIONS MAY ALSO BE RESTRICTED BY LAW AND PERSONS INTO WHOSE POSSESSION THIS INFORMATION COMES SHOULD INFORM THEMSELVES ABOUT AND OBSERVE ANY SUCH RESTRICTIONS.
>THIS INFORMATION DOES NOT CONSTITUTE OR FORM PART OF ANY OFFER FOR SALE OR SOLICITATION OF ANY OFFER TO BUY ANY SECURITIES NOR SHALL IT OR ANY PART OF IT FORM THE BASIS OF OR BE RELIED ON IN CONNECTION WITH ANY CONTRACT OR COMMITMENT TO PURCHASE SHARES. BOLSAS Y MERCADOS ESPAÑOLES, SOCIEDAD HOLDING DE MERCADOS Y SISTEMAS FINANCIEROS, S.A. (“BME”) IS CONDUCTING ITS INITIAL OFFERING OF SHARES COMPRISING (1) A PUBLIC OFFERING OF SHARES IN SPAIN BY WAY OF A SPANISH LANGUAGE PROSPECTUS (“FOLLETO”) WHICH HAS BEEN APPROVED BY AND REGISTERED WITH THE COMISIÓN NACIONAL DEL MERCADO DE VALORES (“CNMV”) IN SPAIN ON JUNE 22, 2006, AND (2) AN INTERNATIONAL OFFERING OUTSIDE OF SPAIN TO INSTITUTIONAL INVESTORS. ANY DECISION TO PURCHASE SHARES IN THE OFFERING SHOULD BE MADE SOLELY ON THE BASIS OF THE INFORMATION CONTAINED IN THE FOLLETO (AS SUPPLEMENTED FROM TIME TO TIME) OR TO BE CONTAINED IN THE FINAL INTERNATIONAL OFFERING MEMORANDUM TO BE PUBLISHED IN DUE COURSE IN RELATION TO THE OFFERING.
>THE INFORMATION CONTAINED IN THIS DOCUMENT HAS BEEN PROVIDED BY BME.
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Index
> Highlights
> Business areas
> Business Drivers
> Financials
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Highlights - 1st Half Year 2007
> Record profits of 103 M € (+66.1%) driven by stronggrowth in revenues to 191.2 M € (+38.9%) and strict costcontrols (+0.4%)
> With an increase of 60.9% in trading volumes, equities was the strongest growth driver, followed by settlement (27.8% of EBITDA)
> Product innovation and new services: o New licenses for the launch of ETFs
o Listing of venture capital funds on the MAB (Mercado Alternativo
Bursátil)
o Introduction of new currency issues on the AIAF market
o Wider offer of MEFF services for the electricity sector
> Paid out suplementary dividend of 50 M €
> BME included in the IBEX 35®
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Net Net ProfitProfit 1H 1H -- 2007/ 20062007/ 2006
An outstanding 1st Half-year
EBITDA 1H EBITDA 1H -- 2007/ 20062007/ 2006
RevenuesRevenues 1H 1H -- 2007/ 20062007/ 2006
€ Mill.
GrowthGrowth……
CostsCosts 1H 1H -- 2007/ 20062007/ 2006
ControlControl……
= Profitability= Profitability
€ Mill. + 38.9 %45,7 45,9
2006 2007
€ Mill. + 0.4 %
€ Mill.+ 58.1 % € Mill.
+ 66.1 %
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2Q and 1H Profit and Loss Account
Strong revenue growth in the main business areasSuccessful cost control Improved marginsStrong cash-flow generation
Thousands of € 2Q 2007 2Q 2006 % 2007 2006 %
Revenues 98,272 67,515 45.6% 191,166 137,582 38.9%
Expenses (23,779) (23,603) 0.7% (45,883) (45,688) 0.4%
EBITDA 74,493 43,912 69.6% 145,283 91,894 58.1%
EBIT 72,600 42,390 71.3% 141,661 88,895 59.4%
Financial results 4,463 2,754 62.1% 8,568 5,138 66.8%
EBT 77,063 45,144 70.7% 150,229 94,033 59.8%
Net Profit 52,832 29,375 79.9% 102,977 61,980 66.1%
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Business Areas
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Business Areas
46%
7%2%
25%
8%
8%4%
Equity
DerivativesFixed Income
Clearing & Settlement
Information
IT & Consulting
Listing
49%
1%
27%
8%
7% 2%
6%Derivatives
IT & ConsultingListing
ConsolidatedConsolidated RevenuesRevenues 1H1H07 07 -- %% EBITDA 1H07 EBITDA 1H07 -- % %
Information
Clearing & Settlement
Fixed Income
Equity
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EquityEquity TurnoverTurnover (SIBE)(SIBE)
494.3
636.9
850.4
1,153.5
531.9
859.3
2003 2004 2005 2006 1H06 1H07
+ 35.6%
Billion €
Equity market: High growth in turnoverThousands
of €2Q 2007 2Q 2006 % 2007 2006 %
Revenues 41,336 30,011 37.7% 88,433 63,808 38.6%
Expenses (8,771) (8,304) 5.6% (16,691) (16,695) 0.0%
EBITDA 32,565 21,707 50.0% 71,742 47,113 52.3%
+61,6%
> Historic highs in share trading:
> for a single quarter
> for a single month (June, with 180,402 million euros in turnover)
> ETFs market development
> Consolidated role of MAB as the market for SICAVs
> Record number of orders settled in 1H 2007: 38.6 Mill. (+49.4% more than 1H 2006)
Equity trading was the fastestgrowing business unit during
the 1H 2007
10
532
1.154
850
652530
859
241818 16 17
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2003 2004 2005 2006 1H06 1H07Turnover Number of trades
FixedFixed incomeincome –– SecuritiesSecurities underunder custodycustody(nominal (nominal valuevalue))
EquityEquity (SIBE) (SIBE) -- TurnoverTurnover ((billionbillion €€) ) andand numbernumber ofof tradestrades settledsettled ((millionmillion))
1,072954
787638
518
2003 2004 2005 2006 1H07
Billion €
+ 21.2%
+35.6%
Clearing and settlement: Fixed income and equityThousands
of €2Q 2007 2Q 2006 % 2007 2006 %
Revenues 27,399 15,336 78.7% 47,206 29,400 60.6%
Expenses (3,541) (3,154) 12.3% (6,823) (6,377) 7.0%
EBITDA 23,858 12,182 95.8% 40,383 23,023 75.4%
+61.6%
+12.3%
Settlement and custody were the second most important contributors to EBITDA growthin the first half
Fixed Income. Securities under custody grew 12.3% in the first half of the year
Equity. Sharp rise in turnover and the number of trades settled
2003 2004 2005 2006 1H06 1H07
commercial paper corporate bonds MBS ABS preferred securities
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Equity Equity marketmarket
Private Fixed IncomePrivate Fixed IncomeAIAF AIAF –– New ListingsNew Listings
227.8
328.2
411.8
+23.4%
M €508.2
Listing: Listing of shares and corporate debtThousands
of €2Q 2007 2Q 2006 % 2007 2006 %
Revenues 7,328 5,841 25.5% 14,840 11,922 24.5%
Expenses (2,623) (2,413) 8.7% (4,998) (4,820) 3.7%
EBITDA 4,705 3,428 37.3% 9,842 7,102 38.6%
322.8
245.4
+31.5%
> Market capitalisation at June 30 stood at 1,342,745 million euros (+42.9%)> 5 IPOs during the first half and 3 or 4 more in the pipeline for the coming months> 3,195 companies trade on MAB
> Volume of new listings rose 31.5%, boosted by corporate debt and securitisation bonds.
> The outstanding balance climbed 31.6% (to 675,996 thousand euros)
High volume of fixed-income and equity issues
0
10,000
20,000
30,000
40,000
50,000
60,000
2003 2004 2005 2006 1H06 1H07Fut. Ibex 35 Fut. M ini Ibex 35 Op. Ibex 35 Fut. Accs. Op. Accs.
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Derivatives
TurnoverTurnover by by underlyingunderlying assetasset
0
10,000
20,000
30,000
40,000
2003 2004 2005 2006 1H06 1H07
Index derivatives Equity derivatives
Thousandcontracts
+27.8%
TurnoverTurnover
Thousandcontracts +17.5%
-12.6 %-26.6 %
Thousands of €
2Q 2007 2Q 2006 % 2007 2006 %
Revenues 7,008 5,954 17.7% 13,784 12,013 14.7%
Expenses (2,453) (2,942) -16.6% (5,013) (5,779) -13.3%
EBITDA 4,555 3,012 51.2% 8,771 6,234 40.7%
> Trading in index derivatives surged 27.8% in the period, fuelled by record monthly volumes in June of futures on the IBEX 35®, the product that most contributed to revenues with 815,812 contracts
> Trading in share derivatives fell 26.6%, damped mainly by the decrease in the number of large operations. The impact on revenues was low
> Three-fold increase in communications capacity; introduction of new services for the electricity market
Solid performance based on revenue growth of more than 10% and cost control
118 127
25 28
1H06 1H07
VENDORS DIR. CONEX.
72.4111.7
54.8
63.5
1H06 1H07
LEVEL 2
LEVEL 1
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Market Sources Subscribers Market Sources Subscribers | | PrimaryPrimary SourcesSources ProvidersProviders
Thousand
InformationThousands
of €2Q 2007 2Q 2006 % 2007 2006 %
Revenues 8,367 6,253 33.8% 15,880 11,700 35.7%
Expenses (1,823) (1,789) 1.9% (3,700) (3,603) 2.7%
EBITDA 6,544 4,464 46.6% 12,180 8,097 50.4%
12.0 %
7.6 %
37.7 %
> The total number of subscribers to BME’s real-time information services rose 37.7% in the first half, from a year-earlier.
> Level 1: an increase of 54.2%
> Level 2: an increase of 15.8%
> A rise in the number of clients.
> Comprehensive content
> A new index: IBEX Top Dividendo®
The growing number of subscribers and content providers makes this a solid business with growing importance to the group
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IT & Consulting
Number of orders
0
1,000,000
2,000,000
3,000,000
4,000,000
5,000,000
6,000,000
7,000,000
8,000,000
9,000,000
10,000,000
2003 2004 2005 2006 1H06 1H07
+31.9%
+44.8%
Orders channeled through Visual TraderOrders channeled through Visual Trader
Thousands of €
2Q 2007 2Q 2006 % 2007 2006 %
Revenues 3,780 2,823 33.9% 6,752 5,940 13.7%
Expenses (1,932) (1,972) -2.0% (3,647) (3,747) -2.7%
EBITDA 1,848 851 117.2% 3,105 2,193 41.6%
> An increasing number of orders channelled through Visual Trader (see chart)
> Services for members and issuers
> BME competing in several international consulting projects
> Launch of the new BME Alternative service, designed to help clients deal with MiFID-related problems
The IT & Consulting unit seeks to amass greater know how and provide value-added services to BME clients
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Fixed Income: Corporate debt market showing solid growth
AIAF AIAF –– TurnoverTurnover
0
100
200
300
400
500
600
700
800
900
1,000
2003 2004 2005 2006 1H06 1H07
commercial paper corporate bonds MBS&ABS preferred securiries
+ 3.2%
+ 28.2 %
Billion €
Thousands of €
2Q 2007 2Q 2006 % 2007 2006 %
Revenues 1,530 1,527 0.2% 3,110 3,136 -0.8%
Expenses (857) (819) 4.6% (1,674) (1,607) 4.2%
EBITDA 673 708 -4.9% 1,436 1,529 -6.1%
> Intense competition in Public Debt, primarily in the OTC market
> An increase of 28.2% in the turnover of private fixed income
> Breakdown by product:
Corporate paper (+39.8%)
Simple bonds (+33.1%)
Securitisation bonds (+7.6%)
The fixed-income market helped diversify income sources
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Breakdown by Business Areas
€ Thousand 2007 2006 % 2007 2006 %
Equity 88,433 63,808 38.6% 71,742 47,113 52.3%
Settlement 47,206 29,400 60.6% 40,383 23,023 75.4%
Listing 14,840 11,922 24.5% 9,842 7,102 38.6%
Information 15,880 11,700 35.7% 12,180 8,097 50.4%
Derivatives 13,784 12,013 14.7% 8,771 6,234 40.7%
IT & Consulting 6,752 5,940 13.7% 3,105 2,193 41.6%
Fixed income 3,110 3,136 -0.8% 1,436 1,529 -6.1%
Consolidated 191,166 137,582 38.9% 145,283 91,894 58.1%
1H REVENUES 1H EBITDA
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Business Drivers
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> A highly-liquid market, with the EMU’s leading blue-chip companies
> Mid-caps with a growing contribution to market turnover
> The centre of liquidity for trading in Spanish shares
> Cost efficiency and reliable technology developed in-house
> Dynamic product innovation
> A value-generating model: growing activity + quality management in every business unit + tough cost controls
> Spain’s dynamic financial markets
The keys to success:
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1 147.7 1.2 3.65%
2 133.0 1.1 3.04%
3 114.3 0.9 2.76%
4 100.3 0.8 2.95%
5 88.0 0.7 2.82%
6 85.6 0.7 2.77%
7 85.4 0.7 3.48%
8 83.7 0.7 3.83%
9 83.4 0.7 3.32%
10 81.7 0.6 0.80%
16 60.3 0.5 1.69%
27 40.0 0.3 0.99%
Highly liquid market Spanish blue chips enjoy the highest liquidity of stocks in the EMU
RK.RK. CompanyCompanyTOTAL 1H07TOTAL 1H07
TurnoverTurnover((billbill. . €€))
DailyDaily AvgAvg. 1H07. 1H07TurnoverTurnover((billbill. . €€))
RelativeRelative weightweight atatEuroStoxx50EuroStoxx50 (%)(%)(1)(1)
Source: Bloomberg(1) As at 30/06/07
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81,196,6
122,0
194,4
288,9
209,3
18,4% 19,5% 19,2%22,9%
39,2%42,5%
2002 2003 2004 2005 2006 1H07
% of total shares traded
Mid and small market cap turnoverMid and small market cap turnover
Spanish market historical growth “Mid-caps” contribution to increasing turnover
Turnover, excluding top ten stocks (bill.€)
Spanish mid-caps invest abroad in increasing numbers and issue shares to finance non-organic growth-moves that fuel trading in their shares
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Dynamic Product Strategy
> Exclusive licenses granted to BBVA Gestion for the launch of ETFs on the indices of the FTSE Latibex Top®, FTSE Latibex Brasil® and IBEX Top Dividendo®
> Exclusive license granted to Santander Asset Management for the launch of ETFs linked to the indices IBEX Medium Cap® and IBEX Small Cap®
> Introduction of turbo-warrants
Equities
> 3,195 SICAVs listed at end-June 2007> First venture capital fund listed> Broaden market to include high-growth companies (limited capitalisation)
Mercado Alternativo
Bursátil(MAB)
> Upcoming launch of the trading access system MEFF-X TRADER> Futures and options on shares of the EuroStoxx 50 ®
> New services for the electricity market Derivatives
IT & Consulting
> Began offering MiFID-related services > Introduced Visual Trader’s new Algorithmic SuperTrack trading system> Launched new continuity and contingency service> Undertook new training initiatives in Latin-America
Listing > Possible registry and listing of non-euro currency issues on the AIAF fixed-income market
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Financials
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Balance Sheet
Thousands of € 2007 2006
Goodwill 80,619 80,619
Other non-current assets 66,754 66,068
Cash and cash equivalents 406,730 412,764
Non-Group current financial assets 5,073,834 3,174,473
Other current assets 91,816 74,964
Total assets 5,719,753 3,808,888
Equity 480,748 509,565
Non-current liabilities 9,552 11,753
Current liabilities 5,229,453 3,287,570
Total equity and liabilities 5,719,753 3,808,888
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P/L
Thousands of € 2Q 2007 2Q 2006 % 2007 2006 %
Revenues 98,272 67,515 45.6% 191,166 137,582 38.9%
Expenses (23,779) (23,603) 0.7% (45,883) (45,688) 0.4%
EBITDA 74,493 43,912 69.6% 145,283 91,894 58.1%
EBIT 72,600 42,390 71.3% 141,661 88,895 59.4%
Financial results 4,463 2,754 62.1% 8,568 5,138 66.8%
EBT 77,063 45,144 70.7% 150,229 94,033 59.8%
Net Profit 52,832 29,375 79.9% 102,977 61,980 66.1%
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RevenuesRevenues EBITDA EBITDA
Revenues & EBITDA - Quarterly performance
58,339 58,481 58,13862,005
70,067 67,515 66,495
83,66892,894
98,272
Q-1 Q-2 Q-3 Q-42005 2006 2007
37,832 35,473 36,586 36,517
47,98243,912 43,237
56,220
70,79074,493
Q-1 Q-2 Q-3 Q-42005 2006 2007
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Breakdown of EBITDA growth
91.9
24.6
17.42.7
4.1 2.5
- 0.1
0.9 1.2 145.2
Equity Clearing & Settlement
Listing Information Derivatives FixedIncome
IT &Consulting
Adjustm.1H 20071H 2006
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ROE Evolution EBIT/Revenues Ratio Evolution
Cost/EBIT Ratio Evolution Consolidated Efficiency Ratio Evolution
Efficiency & Profitability
44.1%
23.1%
45.3%
25.2%
2Q/07 2Q/06 1H/07 1H/06
% R
OE
32.8%
55.7%
32.4%
51.4%
2Q/07 2Q/06 1H/07 1H/06
Cos
t/EB
IT
24.2%35.0%
24.0%33.2%
2Q/07 2Q/06 1H/07 1H/06
% E
ffic
ienc
y
73.9%62.8%
74.1%64.6%
2Q/07 2Q/06 1H/07 1H/06
% E
BIT/
Reve
nues
Q&A