Euroclear plc2016 Results
1 March 2017
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Forward looking statements
The information, statements and opinions expressed in this presentation (the “Content”) do notconstitute and shall not be deemed to constitute: (i) any offer, invitation or inducement to sell a securityor engage in investment, financial or other similar activity; or (ii) a solicitation of an offer to buy anysecurity; or (iii) any recommendation or advice in relation to any investment, financial or other decision.Persons considering making any investment or financial decision should contact their qualified financialadviser. The Content may include forward looking statements, in particular, in relation to futureevents, growth, future financial performance, plans, strategies, expectations, aims, prospects,competitive environment, regulation and supply and demand. Such statements contain inherent risksand uncertainties and actual outcomes may differ materially from those expressed or implied byforward looking statements. To the maximum extent permitted by law, no warranty or representationincluding, but not limited to, accuracy or completeness (express or implied) is made in relation to theContent, including, but not limited to, any projections or statements about the prospects of Euroclear.Euroclear makes no commitment to update Content and expressly disclaims, to the extent lawful,liability for any errors or omissions in it. The Content is not directed at, or intended for distribution to, oruse by any person or entity where such distribution or use is restricted by law or regulation. Persons intowhose possession the Content comes should inform themselves about and observe any suchrestrictions. Past performance, historic financial information and/or historic distributions should not betaken as an indication of current or future performance, results or distributions.
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What we will cover today
Highlights – Lieve Mostrey, Chief Executive Officer
Financials – Bernard Frenay, Chief Financial Officer
Business update – Frederic Hannequart, Chief Business Development Officer
Summary & Outlook – Lieve Mostrey, Chief Executive Officer
Questions & Answers
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Highlights
Robust financial performance in line with record previous year, and stable dividend
Stronger than normal second half drove 2016 results
Net Interest Earnings uptick, driven by negative interest charges
Increasing investment plans to deliver our strategy
Financial flexibility strengthened, taking advantage of low interest rates
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Full year business metrics held at strong levels overall
Assets under custody grew to €27.7 trillion
Settlement volume increased to 195.9 million netted transactions
Collateral flat with €1,072 billion in average daily outstandings
Fund assets under custody, with 11.1 million orders routed
+1%
+3%
>€1tn
+6%
542 573623
670 655
159170
182191 196
-
50.0
100.0
150.0
200.0
250.0
-
200.0
400.0
600.0
800.0
1,000.0
2012 2013 2014 2015 2016
Value of securities transactions settled (EUR trillion)
Number of transactions after netting (million)
Value and volume of securities transactions settled
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Net fee income and assets under custody both stable,
despite foreign exchange headwinds
23.024.2
26.0
27.5 27.7
14.0
16.0
18.0
20.0
22.0
24.0
26.0
28.0
30.0
2012 2013 2014 2015 2016
874 877924
983 985
0
200
400
600
800
1,000
1,200
2012 2013 2014 2015 2016
Net fee income
€million
Securities held in custody
€trillion equivalent, year-end
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Financial performance
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Robust 2016 financial performance
€ million 2016 2015 Y-o-Y
FY FY
Net fee and commission income 985 983 -
Net interest and other income 177 147 20%
Operating income 1,162 1,130 3%
Administrative expenses -751 -730 3%
Operating profit before tax 411 401 3%
Taxation and other -113 -108 5%
Profit for the period 298 293 2%
Earnings per share (€/share) 92.4 87.0 6%
Dividend per share (€/share) 37.0 36.3 2%
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Flat net fee income, combined with increasing cost evolution
• Increasing costs due to investments in regulatory-driven, cyber security & growth initiatives
101 101
107
114 114
100
7578
83
105
127
9693
96
102105
2011 2012 2013 2014 2015 2016
Net fee income NII & Other income Operating Expenses
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Increasing investment in regulatory-driven and cyber security
initiatives
400
450
500
550
600
650
700
750
800
2015 2016 2017e
Op
era
tin
g ex
pen
ses
€m
Exceptional restructuringcosts
Regulatory-driven & cybersecurity investments
Core operating expenses
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Operating profit before tax and net fee income margin
2016 operating profit growth, despite higher investment,
reflecting higher contribution from net interest income
€ million
+ 3%
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Return on equity sustained, while earnings per share increased
63.069.3
78.6
87.092.4
0.0
10.0
20.0
30.0
40.0
50.0
60.0
70.0
80.0
90.0
100.0
2012 2013 2014 2015 2016
Return on equity Earnings per share
+6%
€/share
7.8%8.3%
8.7% 8.7% 8.5%
0.0%
1.0%
2.0%
3.0%
4.0%
5.0%
6.0%
7.0%
8.0%
9.0%
10.0%
2012 2013 2014 2015 2016
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Securing our financial position
Strong and stable ratings illustrate our performance and market position:
• Fitch and S&P rate Euroclear Bank AA+/AA Stableand Euroclear Investments AA-/AA
€600 million debt issuance providing greater financial strength and flexibility:
• New issue, with 10-year maturity, received strong ratings AA- (S&P) / AA (Fitch)
• Benefitting from low interest rates: fixed rate coupon of 1.125%
• Oversubscribed by 4x; placement to qualified investors across Europe
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Healthy, stable balance sheet
€ million 2016 2015
end of year balance
Loans and advances to banks and customers 18,398 18,031
Financial assets 2,881 2,448
Goodwill and (in)tangible fixed assets 1,113 1,098
Other assets/accrued income 485 408
Total assets 22,876 21,985
Deposits by banks and customers accounts 17,886 17,828
Other liabilities/provisions 1,430 681
Shareholders'equity 3,560 3,476
Subordinated liabilities 0 0
Total liabilities and shareholders' equity 22,876 21,985
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Business update
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Consistent strategy, combining our values and client needs
We continue to invest in capabilities and innovative
business solutions that help clients improve operating
efficiency, strengthen market stability and mitigate risk
Euroclear’s strategy
Euroclear values
• Openness
• Profit moderated
• For the public good
Client needs
• Efficiency
• Regulation /
resilience
• Global / local
+ =
Data applications
DistributedLedger Tech.
FinTechpartnerships
Expand GrowthInitiatives
StrengthenEuropean Core
Explore innovativevalue-add solutions
Global Reach
Funds
Collateral
Asset Servicing
SettlementSafekeeping
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Gateway to pan-European securities, providing choice between central and commercial bank money:
• >50% of European securities serviced through Euroclear Bank and 6 Domestic CSDs
• Asset Servicing, Funds and Collateral Management services
• Investing for an unparalleled Investor CSD offering
Investing in our European presence for safe and efficient capital markets:
• Investing to implement CSD Regulations
• Building new Nordic CSDs IT infrastructures
• Enhancing cyber security resilience
Strengthening our European core
Euroclear
BankESES
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701787
887
1,068 1,072
14.0
214.0
414.0
614.0
814.0
1,014.0
1,214.0
2012 2013 2014 2015 2016
Collateral management is a maturing contributor of growth:
• Collateral outstanding +9% CAGR, since launch of Collateral Highway in 2012, reaching €1072 billion in 2017
• GlobalCollateral Ltd: moving to business phase, with set-up of collateral link between Euroclear and DTCC
• OTC derivative regulations: supporting clients’ new requirements for collateral solutions for initial margin
• GC Access: fulfilling increasing need for high quality collateral amongst market participants
Expanding growth initiatives: Collateral
Average daily collateral outstanding
€billion
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Expanding growth initiatives: Funds
Building Euroclear FundsPlace, a unified value proposition for funds services
• Fund assets under custody grew 6% year-on-year
International ETF structure continues to gain traction:
• BlackRock transferred 165 domestic ETFs to international form, worth over $200 billion
• State Street moved 40 ETFs to FundsPlace, with 29 moving to international structure
• Euroclear selected for China ETF products by ICBC Credit Suisse, Fullgoal Asset Management & GF International
0
50
100
150
200
250
2014 2015 2016
Tota
l €b
n
International ETF Structure by Assets
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Expanding growth initiatives: International Markets
Global Reach connects domestic markets to global investors through ‘Euroclearability’:
• Partnering with governments to develop capital market practices to meet global investor requirements
• Increase breadth of domestic securities available through our CSD links
• Chilean Ministry of Finance announced new reforms to become ‘Euroclearable’
• Following inclusion of RMB in IMF’s SDR currency basket, Euroclear now facilitates access to Chinese government bonds for central banks and supranational clients
Supporting growth markets in accessing a global investor base:
• Argentina returned to capital markets through its successful $16.5 billion bond issuance
• Kingdom of Saudi Arabia completed first ever bond issuance, raising $17.5 billion
• Chile issued $1.5 billion government bonds
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Exploring innovative, value-add solutions
Collaborating in industry initiatives for new technology:• Exploring applications for DLT, such as in the French SME sector, London’s
Gold Bullion market and for Housing Company Certificates in Finland
Partnering with FinTech to bring specialised, innovative client solutions:• Investment in Taskize, a work flow tool for greater back-office efficiency
Bringing insights through our position at the source of market data:• e-Data Liquidity: a new solution for bond market analysis
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Summary / Outlook
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Increased dividend and shareholder equity
• Board launched a new share buy-back, bringing total four-year programme to €469 million
3,187 3,212 3,2443,476 3,560
0
500
1,000
1,500
2,000
2,500
3,000
3,500
4,000
2012 2013 2014 2015 2016
€/share
+2%
Dividend per share & Dividend pay-out Total group shareholder’s equity at year end
€million
25.4
29.631.5
36.3 37.0
40% 40% 40% 40% 40%
15%
20%
25%
30%
35%
40%
45%
50%
55%
60%
0.0
5.0
10.0
15.0
20.0
25.0
30.0
35.0
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2012 2013 2014 2015 2016
Dividend per share Div pay-out (%)
+2%
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Resilient. Relevant. Returns.
Robust financial performance as new regulatory environment
begins to adversely impact operating profit levels
Resilient, well diversified with a solid core franchise positions
Euroclear for future growth as we implement our strategy
Delivering shareholder value, while preserving strong
capital levels
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Increasing investment plans to deliver our strategy, allowing us to
cement our role as a cornerstone of the financial markets3
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Questions?
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