Fourth quarter and FY/2008

Transcription

1 Fourth quarter and FY/2008

2 The information contained herein does not constitute an offer of securities in the United States. Offers and sales of securities in The United States may not be made absent made registration under the U.S. Securities Act of 1933, as amended, or an applicable exemption therefrom. This document does not solicit money, securities or any other type of consideration, and if any money, securities or other type of consideration is sent in response hereto, it will not be accepted.

3 Summary Profits BME: Profit attributable to Group (Quarterly series) Profit evolution BME: Profit attributable to Group (Cumulative basis) Profit evolution Mill Mill Q06 4Q07 4Q08 FY06 FY07 FY08 Key ratios BME: Return on Equity (Cumulative basis) BME: Efficiency ratio (Cumulative basis) Consolidated ROE ratio evolution Consolidated efficiency ratio evolution % ROE 28.9% 43.4% 39.4% % Efficiency 33,5% 25,7% 29,2% FY06 FY07 FY08 FY06 FY07 FY08 Business drivers Equity Business unit Activity Overview C&S Business unit Activity Overview Number of trades (Mill. trades) Securities under custody Mill. Trades Nominal value (billio n ) 1,045 1,246 1,362 FY06 FY07 FY08 FY06 FY07 FY08 Derivatives Business unit Activity Overview Derivatives contracts traded Market Data & Information Activity Overview Subscribers to primary data sources cts (Th.) Number of contrac 47,174 Stock Opt Stock Fut Opt IBEX 35 Fut Mini IBEX 35 Fut IBEX 35 51,860 83,417 ( Th.) Subscrbers FY06 FY07 FY08 FY06 FY07 FY08 - Business performance - Interim Report (January - December 2008)

4 Financial Statements BOLSAS Y MERCADOS ESPAÑOLES, SOCIEDAD HOLDING DE MERCADOS Y SISTEMAS FINANCIEROS, S.A. AND SUBSIDIARIES COMPRISING THE BOLSAS Y MERCADOS ESPAÑOLES GROUP CONSOLIDATED PROFIT AND LOSS ACCOUNTS (UNAUDITED) (Th.Eur.) (Th.Eur.) % (Th.Eur.) (Th.Eur.) % Operating Income 88, , % 352, , % Ordinary revenue on the provision of services 87,173 98, % 349, , % Other operating income % 2,288 3, % Capitalisation of development expenses 533 1, % 1,474 2, % Operating Expenses (28,982) (28,230) 2.7% (102,877) (98,379) 4.6% Staff costs (16,567) (17,039) -2.8% (60,665) (58,152) 4.3% Operating and external expenses (12,108) (10,631) 13.9% (41,339) (38,977) 6.1% Taxes and levies (307) (560) -45.2% (873) (1,250) -30.2% Income before interest, taxes, net impairment losses and depreciation 59,210 73, % 250, , % Depreciation and amortization charges (1,863) (5,077) -63.3% (7,751) (10,347) -25.1% Net impairment losses (Fixed assets) (35) (4) 775.0% (38) (4) 850.0% Income before interest and taxes 57,312 68, % 242, , % Net financial income 2,806 5, % 24,384 18, % Income before taxes 60,118 73, % 266, , % Corporate income tax (14,886) (22,977) -35.2% (75,880) (92,099) -17.6% Profit attributable to the Group 45,232 50, % 190, , % Note: As explained in the half-year financial statements, with the aim of adapting the consolidated income statement to the model established in the CNMV Circular 1/2008, firm credit losses and impairment of doubtful trade receivables and their recoverable amount, will be entered under the External and operating expenses heading. Previously they were recognised in Net impairment losses in the consolidated income statement. The amount corresponding to this item, i.e. the effect of the change in criteria for External and operating costs in the quarter and FY07, totalled -277 thousand euros and 248 thousand euros, respectively. BME: Profit attributable to Group (Quarterly series) Profit evolution BME: Profit attributable to Group (Cumulative basis) Profit evolution Mill % Mill Q07 1Q08 2Q08 3Q08 4Q08 FY06 FY07 FY08 annual net profit was million at year end This result is a 5.2% decrease from net profit in 2007, and, in quarterly terms, a 10.5% decrease, as net profit in the last quarter was 45.2 million. Is remarkable the fact of this fourth quarter result is 6.7% higher than third quarter despite the difficult economic environment. The year was characterized by a high level of volatility in the markets and a progressive deterioration in the global economic context in terms of credit and growth, having an especially strong effect on the financial intermediation sector. The strong fall in market trading prices has been reflected in a 39.4% decline in the benchmark index of the Spanish market, the IBEX 35, for the year. 4 - Business performance - Interim Report (January - December 2008)

5 Financial Statements Consequently, the turnover in the markets and the revenue associated with trading has been affected. Nevertheless, BME s integrated business model has showed its strength: efficiency in controlling the cost base and diversification into seven business units which contribute with revenues not associated with trading volumes. These two elements have helped mitigate the effects of the decline in brokered volumes. Operating costs for the fourth quarter reached 29.0 million (+2.7%), for a 4.6% increase at year end 2007, and the amount of million. Last year, BME had an annual EPS of 2.28, while the figure for the last quarter was Hence, it ended the year in an outstanding sector position in terms of solvency, liquidity, margin, efficiency and ROE. The efficiency ratio in 2008 was 29.2% compared with 25.7% at year end 2007, while for the fourth quarter it was 32.9%. ROE for 4Q08 was 37.2% and 39.4% for the year. At year end 2007 this indicator was 43.4% and for 4Q07 it was 39.4%. Group (Key Ratios) Earnings per share % % Efficiency ratio (%) 32.9% 27.9% 29.2% 25.7% ROE (%) 37.2% 39.4% 39.4% 43.4% BME: Return on Equity (Quarterly and cumulative basis) Consolidated ROE ratio evolution BME efficiency ratio (Quarterly and cumulative basis) Consolidated efficiency ratio evolution (% % ROE) (% E Efficiency) 39.4% 43.4% 37.2% 39.4% 27.9% 32.9% 25.7% 29.2% 4Q07-4Q08 FY07 - FY08 4Q07-4Q08 FY07 - FY08 - Business performance - Interim Report (January - December 2008) 5

6 Financial Statements BOLSAS Y MERCADOS ESPAÑOLES, SOCIEDAD HOLDING DE MERCADOS Y SISTEMAS FINANCIEROS, S.A. AND SUBSIDIARIES COMPRISING THE BOLSAS Y MERCADOS ESPAÑOLES GROUP as of 31/12/2008 as of 31/12/2007 CONSOLIDATED BALANCE SHEETS AT CLOSING DATES (UNAUDITED) (Th.Eur.) (Th.Eur.) % NON-CURRENT ASSETS 157, , % Goodwill 80,619 80, % Other intangible assets 8,741 7, % Property, plant and equipment 56,227 55, % Non-current financial assets 7,087 2, % Deferred taxes 4,677 1, % CURRENT ASSETS 5,640,419 5,027, % Non-Group current financial assets 5,103,642 4,428, % Other current financial assets Trade and other receivables 60,370 62, % Cash and cash equivalents 430, , % Tax assets 44,526 60, % Other current assets 1,176 1, % TOTAL ASSETS 5,797,770 5,175, % SHAREHOLDERS EQUITY 466, , % Share capital 270, , % Reserves 96, , % Profit attributable to the Group 190, , % (Treasury shares) (7,661) 0 - (Interim dividend) (82,132) (79,936) 2.7% Other equity instruments Valuation reserves (2,217) 0 - NON-CURRENT LIABILITIES 9,851 9, % Provisions 4,564 4, % Provisions for employee benefits 3,067 4, % Deferred taxes 2,209 1, % Other non-current financial liabilities % CURRENT LIABILITIES 5,321,710 4,667, % Trade and other payables 134, , % Non-Group current financial liabilities 5,103,556 4,428, % Tax liabilities 82, , % Other current liabilities % TOTAL EQUITY AND LIABILITIES 5,797,770 5,175, % In order to apply the same presentation criteria as other European central counterparties, the Group has increased the balances of Current assets Non-Group current financial assets and Current liabilities Non-Group current financial liabilities, by the same amounts, mainly for fixed-income securities and options in which it acts as central counterparty, and guarantees and deposits received from the market. This presentation criteria has no impact on income or equity. 6 - Business performance - Interim Report (January - December 2008)

7 Financial Statements BOLSAS Y MERCADOS ESPAÑOLES, SOCIEDAD HOLDING DE MERCADOS Y SISTEMAS FINANCIEROS, S.A. AND SUBSIDIARIES COMPRISING THE BOLSAS Y MERCADOS ESPAÑOLES GROUP FY08 FY07 CONSOLIDATED CASH FLOW STATEMENT (UNAUDITED) (Th.Eur.) (Th.Eur.) % Consolidated profit for the year before taxes 266, , % Corporate income tax (75,880) (92,099) -17.6% Amortization and provisions 9,609 11, % Other adjustments to the result (7,551) (3,608) 109.3% Changes in working capital- - Current financial assets (non Group) (85) % - Trade and other receivables 1,285 (42,375) % - Tax assets 16,022 (12,881) % - Tax liabilities (21,041) 33, % - Other current assets % - Trade and other payables (2,234) 38, % - Other current liabilities 667 (13) % Changes in non current assets and liabilities (3,098) (2,068) 49.8% Net cash flows from operating activities 184, , % Net cash flows from investing activities (8,627) (6,329) 36.3% Net cash flows from financing activities (220,168) (99,994) 120.2% Net increase (decrease) in cash and cash equivalents (44,481) 117, % Cash and cash equivalents at the beginning of period 475, , % Cash and cash equivalents at the end of period 430, , % Note: For the purpose of clear presentation of changes in working capital, inflows of funds from guarantees and deposits received from the market which are invested in current financial assets Current assets Non-Group current financial assets in their entirety have not been included as a change in working capital. Financial instruments of MEFF as a central counterparty and receivables on settlements of options and futures, have not been included either. - Business performance - Interim Report (January - December 2008) 7

8 Quarter Overview Highlights At its 18 December 2008 meeting, BME s Board of ration Committee, agreed to appoint Mrs. Julia Sanz López Directors agreed to pay out a gross total in interim dividends as an independent Company Director, through the co-option against 2008 profit of 82,131,900.23, equivalent to a gross system per share. In 2008, the number of transactions executed in the The interim dividend was paid out on 29 January market, including securities, EFTs and warrants, increased by 5.9% yoy over the cross trades in 2007, reaching a record of 37.5 million transactions. In the fourth quarter, the number of transactions has increased 6.1% over the same period in 2007, with 9.8 million transactions recorded. Normally, the company pays out its dividend in two parts, the second of which is paid after the General Shareholders Meeting. The interim dividend for 2008 approved by the Company s Board of Directors was 50% of the total ordinary dividend for At the meeting held on 30 November 2008, the Board of Directors of, Sociedad Holding de Mercados y Sistemas Financieros, S.A. (BME), on the basis of a proposal from the Appointments and Remune- Turnover in 2008 decreased 25.5%, to 1.25 trillion. In 4Q08, the amount traded in the equity market was billion (- 41.7%). The volume of shares traded in the year increased by 3.7% yoy, as a total of billion sharess were traded. In quar- (Quaterly Overview) Equity Turnover (Mill. Eur.) 254, , % 1,246,349 1,672, % Number of trades 9,846,755 9,284, % 37,527,460 35,434, % Number of shares (Million) 38,920 32, % 127, , % Market Capitalisation (Mill. Eur.) 784,942 1,384, % Average amount per trade (Euros) 33,212 47, % Clearing & Settlement Operations settled 11,040,479 11,706, % 40,295,729 43,568, % Turnover settled (billion euros daily avg.) % Nominal amount registered (billion euros) 1, , % Listing Investment Flows channeled through Exchange (Mill. Euros) 12,477 45, % 22,222 84, % AIAF Fixed Income volume admitted (nominal Mill. Euros) 120, , % 476, , % Derivatives Futures (number of contracts) Index Futures 2,531,207 2,687, % 10,575,717 11,300, % Stock Futures 10,936,605 8,637, % 46,237,568 21,294, % Options (number of contracts) Index Options 2,038,792 1,690, % 8,286,224 5,670, % Stock Options 6,360,851 4,374, % 18,317,249 13,593, % Open interest (number of contracts) 8,038,684 7,508, % Fixed Income Turnover (Mill. Eur.) 943, , % 2,562,348 1,303, % 8 -Business performance- Interim Report (January - December 2008)

9 Quarter Overview terly terms, 38.9 billion shares were traded on the market, for a 17.9% yoy increase. On 4 December, 1,598 million shares of Banco Santander, with an issue value of 4.5 euros, were admitted to listing, bringing the total amount to 7,191 million, the largest capital increase in the history of the Spanish stock market. The assets managed by the ETFs that are mainly traded on the Spanish market have risen from 950 million to 1,539 million in The number of warrants listed for trading in 2008 was 9,827, a 40% increase yoy. This is a new annual record for issues admitted to trading in this segment. The outstanding balance of Private Fixed Income rose 8,0% from December 2007 to December 2008, and stood at billion. Asset-securitisation bonds were the assets that registered the highest growth, with an outstanding balance of billion, up 29.6% from 2007, along with MBS, which increased by 14.9% to billion. There were 11.0 million trades settled in 4Q08, overall in the three markets. This figure is 5.7% less than in the same quarter in The number of trades settled in the year was 40.3 million (-7.5%). In 4Q08, the volumes in the Derivatives business line continued to grow. The total number of contracts traded grew 25.8% compared with the same quarter the previous year. In all products, the volume of growth, in percentage terms, has been in double digits, with the exception of IBEX 35 futures, which declined by 14.9%. The number of transactions also increased by 9.8%. BME Innova was named a SWIFT Business Partner and it launched the BME Highway product. BME Highway is a technology platform that serves the main needs of companies treasury units: unique access to banking services based on the one-stop window concept, which successfully integrates all of the company s financial messaging with its management programs. -Business performance- Interim Report (January - December 2008) 9

10 Business Units Quarter Overview (Business Units FY08) (Thousands of Euros) Equity Clearing & Settlement Listing Market Data & Information Derivatives Fixed Income IT & Consulting Revenues 150,969 83,037 28,440 38,109 28,805 6,600 16,357 Operating Costs (36,250) (15,073) (10,888) (6,720) (10,934) (3,074) (8,628) EBITDA 114,719 67,964 17,552 31,389 17,871 3,526 7,729 Key Investment Highlights Key Financial Business units overview EBITDA evolution by Business unit (FY08) (Th. Euros) 139, ,719 77,796 67,964 20,124 17,552 31,389 26,084 17,797 17,871 2,998 3,526 6,856 7,729 EQUITY CLEARING & SETTLEMENT LISTING MARKET DATA & INFORMATION DERIVATIVES FIXED INCOME IT & CONSULTING Revenues Business Units Revenues (Thousands of Euros) Equity 35,998 44, % 150, , % Clearing & Settlement 20,528 23, % 83,037 92, % Listing 7,618 8, % 28,440 30, % Market Data & Information 9,808 8, % 38,109 33, % Derivatives 7,324 7, % 28,805 28, % Fixed Income 1,623 1, % 6,600 6, % IT & Consulting 5,226 4, % 16,357 14, % Total 88,125 99, % 352, , % Corporate Unit 2,752 4, % 10,803 12, % Consolidation adjustments (2,685) (2,618) 2.6% (10,221) (9,261) 10.4% Consolidated 88, , % 352, , % EBITDA Business Units EBITDA (Thousands of Euros) Equity 26,489 35, % 114, , % Clearing & Settlement 16,773 19, % 67,964 77, % Listing 4,769 5, % 17,552 20, % Market Data & Information 8,131 6, % 31,389 26, % Derivatives 4,193 4, % 17,871 17, % Fixed Income % 3,526 2, % IT & Consulting 2,954 2, % 7,729 6, % Total 64,135 75, % 260, , % Corporate unit (4,925) (1,986) 148.0% (10,728) (6,234) 72.1% Consolidation adjustments Consolidated 59,210 73, % 250, , % 10 - Business performance - Interim Report (January - December 2008)

11 Business Units Quarter Overview Equity In 2008, the number of transactions executed in the market, including shares, EFTs and warrants, increased by 5.9% yoy over the cross trades in 2007, reaching a record of 37.5 million transactions. In the fourth quarter, the number of transactions has increased 6.1% over the same period in 2007, with 9.8 million transactions recorded. The volume of shares traded in the year increased by 3.7% yoy, as a total of billion shares were traded. In quarterly terms, 38.9 billion shares were traded on the market, for a 17.9% yoy increase. Turnover in 2008 decreased 25.5%, to 1.25 trillion. In 4Q08, the amount traded in the equity market was billion (- 41.7%). In November 2008, the pre-emptive subscription rights of 1,598 million shares corresponding to the capital increase of Banco Santander, with an issue price of 4.50, which were admitted on 4 December 2008, were traded. In December 2008, a new tariff for equity trading was published. Under the new tariff, when high-frequency users buy or sell a security for a single client during a session, resulting in a tariff higher than 125, the users will pay the corresponding tariff or % on the turnover with that 125 minimum. (Equity Business Unit Income) (Th.Eur.) Revenues 35,998 44, % 150, , % Operating Costs (9,509) (9,235) 3.0% (36,250) (34,617) 4.7% EBITDA 26,489 35, % 114, , % Equity Business unit Activity Overview Equity Business unit Activity Overview Equity Turnover (Mill. Euros) Number of trades (Mill. Trades) Euros) (Mill. 1,672,399 1,246,349 Trades) (Mill. T , , Q07-4Q08 FY07 - FY08 4Q07-4Q08 FY07 - FY08 Equity Business unit Activity Overview Shares traded (Millon shares) ares Mill. Sh 122, ,211 32,998 38,920 4Q07-4Q08 FY07 - FY08 - Business performance - Interim Report (January - December 2008) 11

12 Business Units Quarter Overview ETF turnover declined by 20.2% in the quarter, while the yearto-date total increased 48.7%. The number of trades increased by 54.7% and 4.8%, respectively. Premium turnover in the warrants segment fell 45.2% yoy in 4Q08 and by 42.8% in terms of the year-to-date total. Revenue for 2008 decreased by 13.2% to 150,969 thousand, while EBITDA declined by 17.6%, to 114,719 thousand. In 4Q08, revenue was 35,998 thousand (-19.0%); together with a 3.0% increase in operating costs, this brought EBITDA down to 26,489 thousand (-24.8%). (Equity Business Unit Activity Overview) TRADING (Mill. Euros) 254, , % 1,246,349 1,672, % Equity Turnover (Mill. Euros) 251, , % 1,236,450 1,662, % Number of trades 9,692,506 9,066, % 36,917,222 34,570, % Average amount per trade (Euros) 25,986 47, % 33,492 48, % Exchange Traded Funds (ETFs) Turnover (Mill. Euros) 1,643 2, % 6,938 4, % Number of trades 9,209 5, % 25,520 24, % Warrants Turnover (Mill. Euros) 669 1, % 2,961 5, % Number of Trades 145, , % 584, , % Number of shares (Mill. Shares) 38,920 32, % 127, , % CAPITALISATION (Mill. Euros) 784,942 1,384, % 12 - Business performance - Interim Report (January - December 2008)

13 Business Units Quarter Overview Clearing & Settlement The nominal amounts registered at year end 2008, including equity, private fixed income and public debt, increased by 9.3% yoy, to a volume of 1.36 trillion. There were 11.0 million trades settled in 4Q08, overall in the three markets. This figure is 5.7% less than in the same quarter in The number of trades settled in the year was 40.3 million (-7.5%). As a result of the levels of activity recorded, revenue in 2008 corresponding to Clearing and Settlement was 83,037 thousand (-10.0%). In EBITDA terms, the decrease was 12.6%, for 67,964 thousand. In 4Q08, revenue was 20,528 thousand (-14.0%) while EBITDA was 16,773 thousand (-15.7%), after the unit s operating costs were recorded. The intense activity in 2007 in default handling service, reported in the quarterly reports for 3Q07 and 4Q07, largely explains the performance of this business unit. Stripping out this revenue, revenue from settlement fell 14.9% in 4Q08 yoy, while revenues from registration rose 5.0%. For 2008 overall, revenue from settlement declined 10.4% and revenue from registration increased 8.4%. In 2008, average daily cash value settled was billion euros (-21,8%). This decrease is expressed in the Equity and Public Debt settlements, and reflects the circumstances in the market. Link Up Markets will began to operate on 30 March. CSDs may connect to Link Up Markets through their own communication networks or, in the future, through the SWIFT network. They will be introducing three phases: Connectivity of Clearstream Banking Frankfurt (Germany), OeKB (Austria), SIX SIS (Switzerland) and VP (Denmark), on 30 March. Connectivity of Hellenic Exchanges (Greece) and Iberclear (Spain), in June. Connectivity of Cyprus Stock Exchange (Cyprus) and VPS (Norway), in 4Q09. (Clearing & Settlement Business Unit Income) (Th.Eur.) Revenues 20,528 23, % 83,037 92, % Operating Costs (3,755) (3,951) -5.0% (15,073) (14,495) 4.0% EBITDA 16,773 19, % 67,964 77, % C&S Business unit Activity Overview Number of transactions settled ns settled Operatio 43,568,231 40,295,729 11,706,894 11,040,479 4Q07-4Q08 FY07 - FY08 (Clearing & Settlement Business Unit Activity Overview ) Operations settled 11,040,479 11,706, % 40,295,729 43,568, % Turnover settled (billion euros daily avg.) % Nominal amount registered (billion euros) 1, , % - Business performance - Interim Report (January - December 2008) 13

14 Business Units Quarter Overview Listing On 4 December, 1,598 million shares of Banco Santander, with an issue value of 4.5 euros, were admitted to listing, bringing the total amount to 7.2 billion, the largest capital increase in the history of the Spanish stock market. Despite the decline in the volume admitted to listing, the outstanding corporate fixed income balance rose 8.0% from December 2007 to December 2008, and stood at billion. Asset-securitisation bonds were the assets that registered the highest growth, with an outstanding balance of billion, up 29.6% from 2007, along with MBS, which increased by 14.9% to billion. There were 3,360 SICAVs admitted to listing on the MAB (Mercado Alternativo Bursátil) on 31 December 2008, 2.3% more than the previous year. EBITDA at the Listing business unit in 2008 was down 12.8% yoy to 17,552 thousand. Revenue fell 6.9% yoy to 28,440 thousand euros and amounted to 7,618 thousand euros in 4Q08 (-9.4%). The market capitalisation of companies admitted to listing on the markets managed by BME stood at billion at 31 December 2008, 43.3% less than the previous year. The number of warrants listed for trading in 2008 was 9,827, a 40% increase yoy. This is new annual record for issues admitted to trading in this segment. The assets managed by the ETFs that are mainly traded on the Spanish market have risen from 950 million to 1,539 million in The total volume of new issues admitted to listing on the AIAF fixed income market in 4Q08 was billion, a 17.0% yoy decrease. The volume admitted to listing was billion for the year, 25.6% less than admitted for the same period in The decrease is across the board for all types of assets, most notably short-term assets, where investors had a bias for government paper to the detriment of commercial paper and bonds and debentures, due to the increase in spreads and the generalized lack of confidence in the market. The use of balance sheets to generate discountable assets at the European Central Bank has contributed to an improved performance in the securitisation bond segment. Net fund raising for the private sector in 2008 was 61 billion. (Listing Business Unit Income) (Th.Eur.) Revenues 7,618 8, % 28,440 30, % Operating Costs (2,849) (2,873) -0.8% (10,888) (10,431) 4.4% EBITDA 4,769 5, % 17,552 20, % (Listing Business Unit Activity Overview) Equity Market Number of Companies listed 3,606 3, % Market Capitalisation listed (Mill.Euros) 784,942 1,384, % New shares nominal listed (Mill. Euros) 0 5, % 145 5, % Investment Flows channeled through Exchange (Mill. Euros) New listed companies 55 10, % , % Already listed companies 12,422 34, % 21,387 69, % Fixed Income Market AIAF Fixed Income volume admitted (nominal Mill. Euros) 120, , % 476, , % Public Debt Outstanding Balance (Mill. Euros) 400, , % Private Fixed Income Outstanding Balance (Mill. Euros) 819, , % 14 - Business performance - Interim Report (January - December 2008)

15 Business Units Quarter Overview Market Data & Information In 2008, revenue from the information business unit was 38,109 thousand (+13.4%), while EBITDA grew 20.3% from 2007 to 31,389. In the fourth quarter, revenue was 9,808 thousand (+9.9%), while EBITDA was 8,131 thousand (+17.9%). Average subscriptions in 2008 rose by 4.8%, from thousand to thousand per month, while the increase in the fourth quarter was 4.1%, as the average number of subscribers rose from thousand in 2007 to thousand. The total number of clients connected to BME information sources grew 7.9% in all of 2008, although the number with direct connections to primary sources decreased by 7.4%. In addition, the functions adapted to the trading project with up to 4 decimals is in the development and testing-for-acceptance stage. (Information Business Unit Income) (Th.Eur.) Revenues 9,808 8, % 38,109 33, % Operating Costs (1,677) (2,032) -17.5% (6,720) (7,524) -10.7% EBITDA 8,131 6, % 31,389 26, % - Business performance - Interim Report (January - December 2008) 15

16 Business Units Quarter Overview Derivatives In 4Q08, volumes in the Derivatives business line continued to grow. The total number of contracts traded grew 25.8% yoy. In all products, the volume of growth, in percentage terms, has been in double digits, with the exception of IBEX 35 futures, which declined by 14.9%. The number of transactions also increased by 9.8%. For 2008 overall, the same result was seen. Trading volumes of all products rose, with a total of 83.4 million contracts (+60.9%). Growth was especially strong in equity futures, which increased 117.1% over the previous year, followed by IBEX 35 options, which increased 46.1%. Operating revenue for 2008 and the fourth quarter rose 0.7% over the year before, to 28,805 and 7,324 thousand, respectively. EBITDA stood at 17,871 thousand (+0.4%) for the year and 4,193 thousand (-1.9%) for the quarter. The open interest amounted to 8.0 million derivatives contracts at 31 December 2008, 7.1% more than at year end MEFF ended 2008 with 122 members, 7 more than a year before. Of all members, 69 are non-resident entities and 53 are Spanish entities. (Derivatives Business Unit Income) (Th.Eur.) Revenues 7,324 7, % 28,805 28, % Operating Costs (3,131) (2,999) 4.4% (10,934) (10,797) 1.3% EBITDA 4,193 4, % 17,871 17, % Derivatives Business unit Activity Overview Derivatives Business unit Activity Overview Options Futures Index derivatives contracts traded Derivatives contracts traded cts number of contrac 16,971,770 18,861,941 number of co ontracts 19,264,266 26,603,473 4,377,560 4,569,999 6,064,303 8,399,643 11,324,540 13,467,812 32,595,312 56,813,285 4Q07-4Q08 FY07 - FY08 4Q07 4Q08 FY07 FY08 (Derivatives Business Unit Activity Overview) Derivatives Contracts (number of contracts) 21,867,455 17,388, % 83,416,758 51,859, % Index Derivatives (number of contracts) IBEX 35 Index Futures 1,643,742 1,931, % 7,275,299 8,435, % Mini IBEX 35 Index Futures 887, , % 3,300,418 2,865, % IBEX 35 Index Options 2,038,792 1,690, % 8,286,224 5,670, % Total notional value (Mill.Euros) 180, , % 1,005,421 1,371, % Equity Derivatives (number of contracts) Equity Futures 10,936,605 8,637, % 46,237,568 21,294, % Equity Options 6,360,851 4,374, % 18,317,249 13,593, % Total notional value (Mill.Euros) 18,727 23, % 86,161 67, % Open Interest (number of contracts) 8,038,684 7,508, % Number of Trades 1,408,376 1,282, % 5,470,072 5,219, % 16 - Business performance - Interim Report (January - December 2008)

17 Business Units Quarter Overview Fixed Income This business unit is dedicated exclusively to fixed income trading, since revenue from the admission and settlement of fixed income securities is recorded at the Listing and Clearing and Settlement Units, respectively. In the economic sphere, the fixed income business reached 6,600 thousand in revenue (+4.8%) and 3,526 thousand in EBITDA (+17.6%) in In 4Q08, revenue increased 0.9% to 1,623 thousand, while EBITDA, once operating costs had been deducted, was 826 thousand (+8.4%). In 4Q08, trading in the fixed income business rose 172.1% yoy to billion. The year-to-date figure for the unit was 2.56 trillion, 96.6% higher than the previous year. Although the overall figure is very positive, the performance of the different business areas has been very uneven. Hence, public debt trading was 13.1 billion in 4Q08, a 60.6% decline on the previous year s figure. The public debt trading volume totalled 82.1 billion in 2008, 15.3% below the same period in Trading in other Public Debt, mainly for the autonomous regions, totalled 78.0 billion in 2008, a decrease of 19.7% compared with the previous year. Meanwhile, Private Fixed Income trading volumes totalled billion (a 218.9% increase) in 4Q08. The year-to-date figure is 2.40 trillion, 116.6% higher than in These increases are largely from simultaneous operations. (Fixed Income Business Unit Income) (Th.Eur.) Revenues 1,623 1, % 6,600 6, % Operating Costs (797) (846) -5.8% (3,074) (3,298) -6.8% EBITDA % 3,526 2, % Fixed Income Activity Other Equity Market Fixed Income Public Debt Private Fixed Income Fixed Income Turnover 82,136 78,046 (Mill. Euro os) 13,057 19,375 96,945 97,242 2,402,166 33,103 27, , ,093 1,108,832 4Q07 4Q08 FY07 FY08 (Fixed Income Business Unit Activity Overview) Public Debt Turnover (Mill. Euros) 13,057 33, % 82,136 96, % Private Fixed Income Turnover (Mill. Euros) 911, , % 2,402,166 1,108, % Other Equity Market Fixed Income Turnover (Mill. Euros) 19,375 27, % 78,046 97, % Fixed Income Total Turnover (Mill. Euros) 943, , % 2,562,348 1,303, % - Business performance - Interim Report (January - December 2008) 17

18 Business Units Quarter Overview IT & Consulting In 2008, BME s IT and Consulting unit leveraged its knowledge of the market environment and its technology to maintain, develop and implement different market-related activities. The array of activities included consulting projects, maintenance and development agreements signed with the stock exchanges that have trading platforms and systems that rely on BME technology, the consolidation and expansion of the range of Business Continuity and Contingency Services, and the operation of the Visual Trader trade-routing system. The number of trades handled by Visual Trader in 4Q08 rose 38% over 4Q07. The number of trades handled through Visual Trader for 2008 rose 52% overall from the previous year. The presence of Visual Trader in the international financial world has increased through agreements with new trade brokers and with Ullink.Net, which brings together more than 60 international intermediaries. The rollout of activities by the unit produced 16,357 thousand in revenue (+11.0%) in 2008 and 5,226 thousand (+12.0%) in 4Q08. The unit s 4Q EBITDA, 2,954 thousand grew 19.3% and its cumulative EBITDA for the year increased 12.7% to 7,729 thousand. BME Innova was named a SWIFT Business Partner and in November it launched the BME Highway product. BME Highway is a technology platform that serves the main needs of companies treasury units: exclusive access to banking services based on the one-stop-window approach, which successfully integrates all of the company s financial messaging with its management programs. Among current projects expected to be implemented in 2009, we should mention the fine-tuning of the new Visual Trader MAX trading terminal, which will be completely operational in 1Q09; consultancy projects in Ukraine and Colombia; together with the implementation of customized training plans and courses for several Latin American clients. In addition, several technical proposals to participate in projects related to the capitals markets are in the bidding process. (IT & Consulting Business Unit Income) (Th.Eur.) Revenues 5,226 4, % 16,357 14, % Operating Costs (2,272) (2,188) 3.8% (8,628) (7,882) 9.5% EBITDA 2,954 2, % 7,729 6, % 18 - Business performance - Interim Report (January - December 2008)

19 Other Relevant Information Shareholder s Equity Changes BOLSAS Y MERCADOS ESPAÑOLES, SOCIEDAD HOLDING DE MERCADOS Y SISTEMAS FINANCIEROS, S.A. AND SUBSIDIARIES COMPRISING THE BOLSAS Y MERCADOS ESPAÑOLES GROUP (CHANGE IN SHAREHOLDERS EQUITY) FY08 (Th.Eur.) FY07 (Th.Eur.) Shareholders equity opening balance 498, ,773 Supplementary dividend (84,994) (50,002) Extraordinary dividend (47,577) 0 Interim dividend (82,132) (79,936) Valuation reserves (2,217) 0 Treasury shares (7,661) 0 Actuarial income/loss Equity instruments Net income/loss in reporting period 190, ,135 Shareholders equity closing balance 466, ,970 Staff (Staff)(*) 4Q08 4Q07 FY08 FY07 Average number of staff Employees as at balance sheet date (*) Staff includes, for this purpose, only the 50% of the staff of Infobolsa. Efficiency The ratio efficiency in 2008, understood as the operating costs necessary to attain operating income, ended with a value of 29.2%, and 32.9% at the end of the fourth quarter. In 2007, the corresponding values were 25.7% for the year overall and 27.9% for the fourth quarter. These values, despite having declined from 2007, continue to be a benchmark in the industry of securities market managers and remain at the cutting edge in terms of efficiency regarding the components of the securities markets. BME efficiency ratio (Quarterly and cumulative basis) Consolidated efficiency ratio evolution (% Efficiency) E 27.9% 32.9% 25.7% 29.2% 4Q07-4Q08 FY07 - FY08 - Business performance - Interim Report (January - December 2008) 19

20 Other Relevant Information Share Development In 4Q08, lingering uncertainty regarding the general situation in the credit market in the financial sector led to a severe correction in share prices and high volatility. The benchmark indicator for the Spanish market, the IBEX 35, ended the year with a 39.4% decline for the year and 16.3% below its September close. The share price of appreciated 2% in 4Q08 a markedly better performance than that of the market and that of the sector, whose representative index, DJ General Exchanges Index, declined 28.5% for the quarter. The average price for the year was euros (-34.4%), and at year end 2008 the share price of BME was 18.39, 60.5% below year end 2007, and in line with the sector, the index of which corrected 66.5% during the period. The average daily amount traded, 24.8 million, declined 6.4% yoy, and for the quarter it was 57.8% lower than the same period in The reason for the sharp decline is the loss in share value, given that the number of securities traded in 4Q08 was only 1.0% lower than in 4Q07. The number of BME securities traded in a 2008 increased 36.4% yoy. The number of transactions in 4Q08 decreased 27.7% yoy, to 74,012 transactions, and for the entire year, the number increased by 31.0%, with 482,475 cross trades. BME: Share performance Quarterly BME s turnover and share performance evolution volume Closing Price /10 03/10 07/10 09/10 13/10 15/10 17/10 21/10 23/10 27/10 29/10 31/10 04/11 06/11 10/11 12/11 14/11 18/11 20/11 24/11 26/11 28/11 02/12 04/12 08/12 Turnover (Mill. Euros) 10/12 12/12 16/12 18/12 22/12 29/12 (Share performance) BME's share performance Higher quote % % Lower quote % % Average quote % % Closing quote % BME's trading daily turnover (Mill. Euros) Higher daily turnover % % Lower daily turnover % % Average daily turnover % % BME's shares trading (Mill. Shares) % % BME's number of trades 74, , % 482, , % 20 - Business performance - Interim Report (January - December 2008)