EURONEXT. Record H results. August 30, 2006

Transcription

1 EURONEXT Record H results August 30, 2006

2 Nyse Euronext combination update (1) SEC filling (S4), scheduled for mid September. Regulatory questions being adressed Shareholders consultation (EGM) early December 2006 Deal closing expected, as announced, early HALF YEAR RESULTS Euronext 9 months Results

3 Nyse Euronext combination update (2) Euronext NV and local organisation structure maintained Additional cornerstones: Use of a Foundation system as a protection against any legal extra-territoriality issues Existing federal organisation maintained and reinforced by users presence in the board. Further European consolidation will be centred on and managed by Euronext in Europe 2006 HALF YEAR RESULTS Euronext 9 months Results

4 Euronext achievements & strong market activity enable record H results Strong Market activity delivered record (+ 97m) revenue growth: Revenue up to 557.7m, growing by 21 %. EBITA amounts to million (+ 80m) euros up 57% YOY, in spite of 23.3m of M&A costs. EBITA margin = 39.5% Net profit* almost doubled : million, +97% YOY EPS diluted up 99% to 1.73 *Attributable to the holders of the parent company 2006 HALF YEAR RESULTS Euronext 9 months Results

5 Thousand euros Euronext s business model enables organic growth to generate strong results H106 H105 Change Total revenues 557, , % Very strong performance of trading activities: Cash trading + 50m, Derivatives + 43m Total costs and expenses 337, , % EBITA 1 220, , % Net financing income 8,336 7, % Gain on sale of associates and activities 15,469 - Income from associates 19,326 2, % Total 43,131 9, % Profit before tax 263, , % Income tax expense 64,304 44, % Profit for the period 199, , % Attributable to: Shareholders of the parent company 193,691 98, % Minority interest 5,469 6, % 199, , % Basic earnings per share Diluted earnings per share Exceptionnal M&A costs impacted Half Year cost base: H12005: 12m H12006: 23.3m, of which 18m are one offs H106: LCH.Clearnet activity recovery induced strong results, in spite of IT write off (Euronext s share: 9.9m vs 4.9m in H105) H106: Tax rate lowered thanks to reduced capital gain tax recognised on LCH.Clearnet (deferred tax booked in 2003) Very strong growth of earnings (1) Profit from operation before goodwill amortisation (2) EBITA margin : EBITA / revenues 2006 HALF YEAR RESULTS Euronext 9 months Results

6 Good management of operating costs Million Staff costs impacted by a 3.3m extra cost related to the transfer of Necigef employees. H H H105 / H106 : Transfer of costs from depreciation & staff costs to IT linked to completion of AEMS deal H12005: 12m of extra advisory costs linked to corporate activity (1 project). H12006: 23.3m of extra advisory costs linked to 4 projects ( 18m one offs, ow 12.7m Nyse Euronext announcement fees) (LSE, NYSE, DB, Milan) Salaries & employee benefits IT expenses consultancy Office, telecom and Accommodation Depreciation Other expenses Marketing 2006 HALF YEAR RESULTS Euronext 9 months Results

7 Strong increase in free cash flows In thousands euros HY 2006 HY 2005 Increase in tax due to increase in profitability Operating cash flows 233, , % Changes in working capital -6,132-52,087 Tax & Interest paid & received -63,923-35,629 Decrease in capex after AEMS creation Net cash flows from operating activities 163,142 87, % Capital Expenditures -17,417-21,130 Other free cash flows -1,376 8,471 Free cash flows 144,349 75,118 Acquisition & disposal of activities -25,577-3,290 Loans received/redeemed -3,386-3,000 Dividend paid & own shares purchased -111,676-50,914 Total cash flows over the period before net investments in short term financial investments 3,710 17,914 Net Cash Position at 30 June 2006: million of which 26.1 million in GL Trade -17.6% 92.2% 7.1m disposal of CIK, 12.6m increase in MTS JV, 5.5m acquisition of Company News 111m paid in H m repayment of capital in H corresponding to the changes in cash, cash equivalents and short term financial investments, all together managed as a global treasury portfolio 2006 HALF YEAR RESULTS Euronext 9 months Results

8 Return to shareholders Since IPO: million of cash paid to shareholders in 2006, representing 50% of 2005 revenues or 185% of 2005 net profit 334 million returned in regular dividend 214m in 2004, through a share buy back In million euros Share buyback Super Dividend m in repayment of capital for 2005, in m expected in 06/07 in a share buyback Dividend /2007: 1 billion returned to shareholders Euronext total return to shareholders, after completion of the second share buy back program and predictable 2006 dividend: 1.5 billion euros HALF YEAR RESULTS Euronext 9 months Results

9 Business line analysis

10 Strong growth of trading activities H12006: total revenues 557.7m 2.9% H12005: total revenues 461.2m 1.8% H12005: total revenues excluding AEMS 445.3m 1.8% 16.1% 26.9% 22.4% 21.9% 19.6% 22.6% 9.7% 4.5% 9.9% 4.7%.3% 2.2% 36.8% 4.1% 4.8% 9.5% 35.2% 4.9% 36.4% Cash trading Listing fees Derivatives trading MTS fixed income Settlement and custody Information services Sales of software Other income 2006 HALF YEAR RESULTS Euronext 9 months Results

11 Interest rate derivatives: Record Half Year 2005 quarterly avg: 86.8m YTD 2006 quarterly avg: 104.9m 2004 quarterly avg: 78.3 m Million of contracts Q104 Q204 Q304 Q404 Q105 Q205 Q305 Q405 Q106 Q HALF YEAR RESULTS Euronext 9 months Results

12 Strong growth of equity products trading Quarterly volume on equity products rebased In million contracts Markets volatility & Bclear strongly increase volumes overall: +39% Q104 Q204 Q304 Q404 Q105 Q205 Q305 Q405 Q106 Q206 *Rebased volumes: Volumes have been restated from January 2004 to take into account the rebasing of the French equity options and CAC 40 index options and exclude dividend trading activity HALF YEAR RESULTS Euronext 9 months Results

13 Record activity & good control of costs deliver high margin Derivatives Trading In thousands of euros External sales Intersegment reallocations Segment revenue Segment expenses EBITA MARGIN H12006 H12005 Change 205, , % 9,827 24, % 214, , % -106, , % 108,663 62, % 50.6% 33.3% +52.1% Strong volume growth YoY: +26%* Strong management of cost base EBITA up 74.9% Record EBITA margin: 50.6% *Due to the creation of AEMS, LMS revenues & expenses are allocated on the first quarter 2005 only Strong management of the cost base thanks to the IT rationalisation Volumes: Equity products (Individual & Index) soared in H1:+39% Bclear is a success: 32.8 million contracts traded in H1 Interest rates products soared in H1:+18% Liffe.connect ongoing developments allow, at low cost, to absorb more functionalities & volume growth. *Rebased volumes: Volumes have been restated from January 2004 to take into account the rebasing of the French equity options and CAC 40 index options and exclude dividend trading activity HALF YEAR RESULTS Euronext 9 months Results

14 Outstanding growth of cash markets 2006 quarterly avg: 58.1 million 2004 quarterly avg: 35.3 million 2005 quarterly avg: 40.6 million Million of trades - Monthly Q104 Q204 Q304 Q404 Q105 Q205 Q305 Q405 Q106 Q HALF YEAR RESULTS Euronext 9 months Results

15 Outstanding growth induces record profitability CASH TRADING In thousands of euros H12006 H12005 Change External sales 150, , % Intersegment reallocations 5,481 6, % Segment revenue 155, , % Segment expenses -63,331-66, % EBITA 92,285 40, % MARGIN 59.3% 37.8% +56.8% Record market activity Ongoing good cost management Strong growth of EBITA Bullish markets and M&A activity helped in achieving record level of activity: million trades processed, up 52% year-on-year Busiest half year ever on Euronext cash markets NSC-VW (warrant & certificates) new technology roll out successfully achieved in July: Performance multiplied by 2. MIFID: Creating new oppotunities 2006 HALF YEAR RESULTS Euronext 9 months Results

16 New market initiatives attract new listings: The one year old Alternext is already a strong success LISTING H12006 H12005 Change In thousands of euros External sales Intersegment reallocations Segment revenue Segment expenses EBITA MARGIN 22,877 20, % % 22,934 20, % -12,347-10, % 10,587 10, % 46.2% 51.8% -10.9% 62 new listings in H106 vs 27 in H105 Revenues up 9.8% EBITA : 10.6m Best start in listing activity since new listings, of which 28 on Alternext 57 companies listed on Alternext since inception (May 2005) Ongoing development of International Listing impacted cost base 2006 HALF YEAR RESULTS Euronext 9 months Results

17 Information Services: Potential for further growth In thousands of euros Information Services External sales Intersegment reallocations Segment revenue Segment expenses EBITA MARGIN H12006 H12005 Change 54,265 43, % -14,959-12, % 39,306 31, % -19,259-16, % 20,047 14, ,2% 51.0% 47.9% +6.4% Revenues in line with markets behavior Strong EBITA margin: 51.0% Revenues are up 23.7% thanks to: Markets recovery induced increasing number of screens Cash data feed fee increase in Q2 05 (+5%) enhanced revenues. New packages for derivatives markets delivered good results New products: Index files services & Next History are providing new revenue flows Company News included in scope since March 1 st, 2006 induced extra revenues & costs 2006 HALF YEAR RESULTS Euronext 9 months Results

18 MTS H106 MTS Fixed Income In thousands of euros External sales 12,421 Intersegment reallocations 3,073 Segment revenue 15,494 Segment expenses -11,289 EBITA 4,205 MARGIN 27.1% Figures above represent Euronext s stake in MTS Ongoing Improvement of cost base EBITA margin up: 27.1% September 2006: Roll out new technology, to increase trading capacity and functionalities Launch of MTS Israel in cooperation with the Israeli Ministry of Finance Successful Expansion into non-euro product in the BtoC segment (BondVision): US Treasury Bond Market; Gilts; Swedish Governments New products: Launch of EONIA Swap market early 2007 Launch of CDS market in Q Launch before the end of the year of a family of exchange traded future markets based on the EuroMTS Indices. Volumes (billion euros) 17,7 15,8 H12006 H12005 Market participants H HALF YEAR RESULTS Euronext 9 months Results

19 GL Trade is in line with expectations In thousands of euros GL TRADE Segment revenue Segment expenses EBITA MARGIN H12006 H12005 Change 90,246 87, % -75,667-72, % 14,579 14, % 16.2% 17.0% -4.7% Growth pace as expected Slight increase of costs induced by integration & litigation costs. Acquisition of Emos (July 1 st ) GL Trade strongly develops its leadership & revenues through internal & external growth Revenues Operating Income HALF YEAR RESULTS Euronext 9 months Results

20 Settlement & Custody: deconsolidation of CIK Settlement & Custody H12006 H12005 Change In thousands of euros External sales Intersegment reallocations Segment revenue Segment expenses EBITA MARGIN 7,013 21, % 0,096 0, % 7,109 22, % -2,402-10, % 4,707 12, % 66.2% 54.5% +21.6% Deconsolidation of CIK on Jan 1 st 06 explains the changes 2006 HALF YEAR RESULTS Euronext 9 months Results

21 CONCLUSION

22 Conclusion So far, 2006 delivers excellent volumes: Euronext is set for an excellent performance Strong performance can be delivered thanks to the achievement of our Business Model HALF YEAR RESULTS Euronext 9 months Results

23 EURONEXT Record H results