(1) At April 11, Group Structure

Transcription

1 Presentation

2 (1) At April 11, 2012 Group Structure

3 Summary First half fiscal 2012 results October 1, 2011 March 31, 2012

4 Scope of consolidation 60 % of Fitch Ratings (within Fitch Group) at March 31, 2012 Fimalac s 50% interest in Fitch Group will be accounted for by the equity method after the sale of 10% on April 11, 2012 The net gain on the sale will be accounted for in the second half of the fiscal year 60 % of Algorithmics (sold) Sold on October 20, 2011 The net gain on the sale was accounted for in the first half of the fiscal year 80 % of North Colonnade Fully consolidated 40 % of Groupe Lucien Barrière (GLB) Accounted for by the Equity method (acquisition in March 2011) 100 % of VEGA Fully consolidated (acquisition in November 2010) 40 % of Gilbert Coullier Productions Accounted for by the Equity method 40 % of Auguri Productions Accounted for by the Equity method (acquisition in May 2011) Fimalac, Fimalac Développement, holdings Fully consolidated

5 Sales by company (in millions) 1H 2010/2011 (oct. 10 mar. 11) 1H 2011/2012 (oct. 11 mar. 12) Real estate sector (North Colonnade) Diversified investments (Vega) Sales (reported) Fitch Ratings sales : (in millions) 1H 2010/2011 (oct. 10 mar. 11) 1H 2011/2012 (oct. 11 mar. 12) Change Sales - reported % Currency Translation Impact (no changes in consolidation scope) Sales like-for-like %

6 Fitch Ratings - Sales by country (reported) (in millions) 1H 2010/2011 (oct. 10 mar. 11) % 1H 2011/2012 (oct. 11 mar. 12) % 1 USA % % 2 UK % % 3 South Korea % % 4 Germany % % 5 France % % 6 Brazil % % 7 Switzerland % % 8 Italy % % 9 Spain % % 10 Mexico % % Total sales % Fitch Ratings 73.4 % 74.4 %

7 EBITDA (*) by Company (*) EBITDA : Recurring Operating Income + Depreciation, amortization and provisions (in millions) 1H 2010/2011 (oct. 10 mar. 11) 1H 2011/2012 (oct. 11 mar. 12) Real estate sector Diversified investments (Vega) Parent Company Consolidated EBITDA (reported) Fitch Ratings EBITDA : (in millions) 1H 2010/2011 (oct. 10 mar. 11) 1H 2011/2012 (oct. 11 mar. 12) Change EBITDA reported % Currency Translation Impact (no changes in consolidation scope) EBITDA like-for-like % EBITDA/Sales margin like-for-like 34.2% 34.8%

8 Recurring Operating Income by company (in millions) 1H 2010/2011 (oct. 10 mar. 11) 1H 2011/2012 (oct. 11 mar. 12) Real estate sector Diversified investments (Vega) Parent Company Consolidated Recurring Operating Income (reported) Fitch Ratings Recurring Operating Income : (in millions) 1H 2010/2011 (oct. 10 mar. 11) 1H 2011/2012 (oct. 11 mar. 12) Change ROC reported % Currency Translation Impact (no changes in consolidation scope) ROC like-for-like % ROC/Sales margin like-for-like 31.3% 31.1%

9 From Recurring Operating Income to Operating Result (in millions) 1H 2010/2011 (oct. 10 mar. 11) 1H 2011/2012 (oct. 11 mar. 12) Recurring Operating Income Other Operating Income & Expense OPERATING RESULT

10 From Operating Result to Net Earnings (in millions) 1H 2010/2011 (oct. 10 mar. 11) 1H 2011/2012 (oct. 11 mar. 12) Net result from fully consolided companies : Operating result Financial result Income taxe expense Share of profit of associates Fitch Group net profit Net (loss)/profit from discontinued operations Total Net Profit Minority Interests NET EARNINGS - Group Share

11 Impacts of Algorithmics disposal by Fitch Group Completion date : October, Recorded in 1 st half fiscal 2011/2012 financial statements Proceeds before tax received by Fitch Group : M$ Net proceeds after tax : M$ Fimalac net capital gain (in millions) Before Minority interest Fimalac s share Net capital gain Interim result (1 st 20 th October 2011) Net gain on sale (in millions)

12 Impacts of 10 % sale of Fitch Group Completion date : April 11, 2012 Recorded in 2 nd half fiscal 2011/2012 financial statements Net proceeds for Fimalac Services Financiers : 177 M$ Exchange value: M Net capital gain in Fimalac Services Financiers social financial statements : 110 M Net capital gain in Fimalac s consolidated accounts : 81.9 M

13 Cash and Cash Equivalents / (Net Debt) by Company (in millions) 09/30/ /31/2012 North Colonnade Parent Company & Holdings, Vega Including 201 M of loan to NC Consolidated net Cash/(Debt) Position Proforma Including 10% sale of Fitch Group for 135 M on April 11, 2012 Fitch Ratings net debt: (in millions) 09/30/ /31/

14

15 Overview Fitch Group had good financial performance despite difficult market conditions in the first half of FY % growth (like-for-like) over prior year Operating margin of over 30% Fitch Ratings revenue grew as debt issuance increased slightly over prior year Issuance declined among financial institutions; ECB has helped resolve credit pressures on banks in the short-term but the markets await a long-term resolution Weakness in US structured finance persisted; with some signs of stability in the ABS sector Fears regarding widespread municipal defaults started to abate Fitch Solutions continued to see strong demand for its credit-related research, data, and training products and services

16 Corporate Overview and Structure A global leader in financial information services with expertise and critical mass across the credit spectrum Dual-headquartered in New York and London Approximately 2,400 employees in 51 offices Jointly owned by Fimalac and Hearst Corporation 50% 50% 100% 100%

17 Fitch Group Revenue and Operating Income in US$ millions 1H 10/11 1H 11/12 % Change (As reported) % Change (Like-for-Like) Revenue % 7.0% Personnel costs % External expenses (4.7%) Total charges % EBITDA % 8.6% EBITDA Margin 34.2% 34.3% Profit sharing plan Depreciation & Amortization Operating Income % 6.4% Operating Income Margin 31.3% 30.7%

18 Revenue by Segment in US$ millions Revenue 1H 10/11 1H 11/12 % change As-Reported % change Like-for-Like FITCH RATINGS % 7.0% Corporate Finance % 6.7% Structured Finance % 2.1% Fitch Solutions % 12.8% Other % 18.9% 1. Corporate Finance includes both financial and non-financial corporates 2. Fitch Solutions includes Fitch Training 3. Represents non-ratings business within Korea

19 Revenue by Region in US$ millions Revenue 1H 10/11 1H 11/12 % change As-Reported % change Like-for-Like FITCH RATINGS % 7.0% North America % 7.9% EMEA (1.8%) 0.3% Latin America % 15.2% Asia Pacific 1, % 19.8% 1. Korea Ratings business is included in the Asia Pacific region 2. 1H 10/11 EMEA and Asia Pacific revenues are slightly different than previously reported due to a change in internal management allocation

20 Macroeconomic Environment The global economy continues to show signs of a recovery, though several headwinds still remain, most notable in Europe Eurozone Crisis Deleveraging Emerging Market Growth Commodity Prices ECB temporarily resolved funding pressures on banks; markets anxious for a long-term resolution Sovereign credit concerns continue; increased linkage to domestic banks De-leveraging helped repair corporate balance sheets but investment remains constrained Refinancing of corporate debt maturing over the next three years expected to drive market activity Continued growth in emerging markets; government spending for infrastructure expected to continue Credit markets picking up in China but significant exposure to the property sector which is starting to slow down An oil price shock could lower global growth, potentially triggering another recession in U.S. and Europe Source: Fitch Global Economic Outlook (March 2012), Risk Radar (April 2012)

21 Global Debt Issuance Issuance totaled approximately $3 trillion in the first half of FY2012, a 5% increase over the prior year Corporates showed activity in fiscal Q2, after a slow start in fiscal Q1, especially the high yield sector 1H H 2012 Structured finance issuance is still weak but starting to show signs of recovery especially in the US ABS sector Sovereign credit crisis continued to impact issuance, particularly in Europe Weakness persisted in issuance from financial institutions Calendar Quarter Source: Dealogic, Fitch Ratings

22 Corporate Finance Debt Issuance Issuance in Non-Financial Corporates saw an 18% increase in the first half of 2012 as compared to the prior year Strong issuance activity for investment grade as well as high yield debt as issuers turned to capital markets for their refinancing requirements Financial Institutions issuance declined 19% as compared to the prior year Sovereign credit concerns and regulatory uncertainty continue to hamper issuance, particularly in the Euro zone Senior unsecured bank issuance declined in lieu of covered bond issuance in Europe Source: Dealogic, Fitch Ratings

23 Structured Finance Debt Issuance Global Structured Finance issuance decreased 18% compared to prior year Some signs of stability in the ABS sector based on growth in the auto sector 1H H 2012 MBS sector continues to face challenges due to depressed property prices and high unemployment rates; limited placements Covered bond issuance on the other hand, reached a record high in 2011; growth is expected to continue Calendar Quarter Source: Dealogic, Fitch Ratings

24 US Public Finance Debt Issuance US municipal bond issuance declined by 15% compared to prior year, although showing signs of improvement Decline coincides with the expiration of the Build America Bonds (BABs) program 1H H 2012 Excluding BABs, issuance grew by a healthy 12% over prior year Concerns over widespread municipal defaults have generally abated Calendar Quarter Source: SIFMA, Thomson Reuters, Fitch Ratings

25 Fitch Solutions Demand for Fitch Solutions offerings in research, data, analytical tools, risk services, and training remains robust given Increased demand for credit information given capital market activity Regulatory compliance and transparency requirements from Basel III, Solvency II, etc. Focus on managing credit and counterparty risk exposure, especially in the wake of the crisis in Europe Fitch Solutions remains focused on Innovation and new product development, recent example includes Bank Credit Risk Indicators that assist with management of regulatory, capital adequacy and risk mitigation requirements Greater commercialization of Fitch Ratings research content Strategic expansion of third-party distribution channels

26 Regulatory Update Regulatory Update CRA 3 - New European regulatory proposal Optimistic that the new regulation will be manageable Watching rotation and liability proposals very closely US legislation and regulation quiet in advance of US election Dodd-Frank regulations largely complete Other major markets taking similar steps e.g., New regulatory framework in Mexico and Brazil New regulations passed in Canada

27 Conclusion Fitch remains committed to the following principles: Credit Expertise Investor Focus Leadership Perspective Transparency Despite recent market volatility, capital market trends are favorable in the long-term and Fitch s business has performed well in the first half of fiscal 2012