bvc - deceval Corporate Integration Dec 2017

Transcription

1 1 bvc - deceval Corporate Integration Dec 2017

2 Agenda BVC and Deceval: The Value of Working Together 2 1 Introduction 88 Years of History Objectives of the Integration 4 2 Financial profile Attractive revenue mix Timetable Financial Highlights Strategic Rationale Appealing Strategic Rationale Stakeholders benefits BVC Group Composition Business Solutions Shareholding Composition and Board of Directors 3 Combined Business Overview

3 Agenda BVC and Deceval: The Value of Working Together 3 1 Introduction 88 Years of History Objectives of the Integration 4 2 Financial profile Attractive revenue mix Timetable Financial Highlights Strategic Rationale Appealing Strategic Rationale Stakeholders benefits BVC Group Composition Business Solutions Shareholding Composition and Board of Directors 3 Combined Business Overview

4 Introduction 88 Years of History at the Service of the Country Central Securities Depository Company: DECEVAL starts operating FX Clearing House (CCDC) founded SET Icap FX Founded CCP (CRCC) founded Price Vendor Company: (Infovalmer) founded Set Icap Securities founded Bolsa de Medellin founded First dematerialized security Full fungibility of securities Dematerialized Promissory Notes Deceval as national numbering agency for ISIN Bolsa de Bogota founded Bolsa de Occidente founded \ \ \ \ Z \ MEC Platform: Fixed Income Electronic trading Last outcry trading session Colombian market becomes electronic BVC Became a listed public company New Standardized Derivatives Markets New trading platform Xstream by NASDAQ - OMX Creation of MILA Sophos Acquisition 2017 BVC Deceval Corporate Integration Creation of new bvc to Transform and develop the Colombian Capital Market Creation of the BVC as a result of the merger of Bogota, Medellin and Occidente Exchanges 4

5 5 Introduction BVC and Deceval: The Value of Working Together The corporate integration between BVC and Deceval is the starting point to transform our business model BVC and Deceval independent entities Corporate Integration New opportunity to be: Efficient Client Centricity With capacity to increase liquidity in markets Innovators New Business Model Individual efforts Unified Vision Generating trust

6 6 Introduction BVC and Deceval: The Value of Working Together Integration Objectives Optimize, develop and promote the capital market for the benefit of the country, our clients and shareholders. Being the market infrastructure that serves the country in the most effective and efficient way, focused on its clients needs and the construction of trust, leading the Colombian capital market development and the regional integration, creating value for its shareholders and stakeholders Foster our local and international recognition and competitiveness. Initiate a new era for the Colombian capital market in a global context. Deliver more efficient, modern and trustworthy business solutions for the growth of companies investors and market participants Increase business solutions offering through Innovation and diversification creating value constantly

7 Agenda BVC and Deceval: The Value of Working Together 7 1 Introduction 88 Years of History Objectives of the Integration 4 2 Financial profile Attractive revenue mix Timetable Financial Highlights Strategic Rationale Appealing Strategic Rationale Stakeholders benefits BVC Group Composition Business Solutions Shareholding Composition and Board of Directors 3 Combined Business Overview

8 Strategic Rationale Transformation of Colombian Capital Markets Infrastructure 8 Compelling Strategic Rationale bvc will optimize, transform and develop the Colombian capital market with a unified strategy focused on client centricity Integration of highly complementary companies: higher scale and financial soundness Generates efficiencies in the Colombian capital market infrastructure reducing costs and enhancing the offering of more affordable, modern and reliable business solutions Optimizes market infrastructure processes and maximizes efficiencies enabling clients to benefit from combined infrastructure and better scale Strengthen the position, soundness and competitiveness of BVC at the regional and international level Improve the cost-benefit ratio for market participants Greater Value Creation The Integration enables shareholders from both companies to participate in significant value creation by the combined synergies in costs and revenues Approximately COP $7 $8 billion in annual cost synergies expected to be realizable by 2019, equivalent to 8-9% of consolidated operating costs of both companies in % of synergies benefits expected to be transferred to all market participants from 2018, via trading services Resilient, attractive and diversified revenues, expansion to recurrent revenues in post-trading maintaining the potential upside in trading revenues Deceval represents an additional 33% of BVC consolidated revenues (LTM 3Q17) Future return of capital from on going dividend policy now enhanced by enhanced growth prospects

9 Strategic Rationale Benefits to Our Stakeholders 9 Shareholders Intermediaries Issuers Regulators Investors Enhanced growth profile with diversified revenues Significant value creation by cost and revenue synergies Appealing dividend policy Improvements in costs and efficiencies in market infrastructure Simple and improved access to multiple asset class products Partner in end-to-end business solutions that timely respond to our clients needs Diversifies and innovates in the generation of products and services Implementation of projects to automate and modernize industry processes (STP processing, high trading capacity, low latency) Becoming a real financing alternative for all type of companies, including SMEs All listing solutions in one company Ensures an environment of regulation and supervision that favors the growth and development of the Colombian capital market Risk controls with international standards: ensuring transparency and market integrity Creates new investment opportunities for everyone, all types of investors Consolidate a single access point, "One Stop Shop, to Colombian capital market Foster the position, soundness and competitiveness of BVC at regional and international level Creates an eligible market for international investment: meeting standards and best practices

10 Strategic Rationale Multi-asset Class Exchange Across All Market Infrastructure Regional Benchmarking Regional Turnover (USD Billions)* Capital Markets Equities Fixed Income Derivatives FX Market Cap Equities Fixed Income Post Trading Clearing & Settlement Custody Information Technology 25 0, BMV BCS BVC BYMA BVL Assets under Custody (USD Billions) 0,3 bvc now has a stronger position to organize and modernize the Colombian capital market infrastructure to react to industry dynamics Indeval DCV Deceval BYMA Cavali Source: Company information, WFE and FIAB as of 3Q17 10

11 Agenda BVC and Deceval: The Value of Working Together 11 1 Introduction 88 Years of History Objectives of the Integration 4 2 Financial profile Attractive revenue mix Timetable Financial Highlights Strategic Rationale Appealing Strategic Rationale Stakeholders benefits BVC Group Composition Business Solutions Shareholding Composition and Board of Directors 3 Combined Business Overview

12 Combined Business Overview All Market Infrastructure at the Service of Our Clients 12 Trading Clearing & Settlement Custody Information Technology Subsidiaries 100% 50% 50% 100% 100% 54% Long Term Investments 50% 47% 34%

13 Combined Business Overview Diversified Business Solutions Across Capital Market Infrastructure Business Solutions Subsidiaries: Long Term Investments: Issuer Services Listings Services Public Offerings Deposit of Issuances: Equities, Fixed Income, Shareholders Administration and private equity funds Promissory Notes: ATL and dematerialized loans TIDIS and Pension Bonds Trading Investment and Hedging Instruments: Public and Corporate Debt: Cash and OTC Equities and ETPs: Local, MGC and MILA Standardized and OTC Derivatives: Futures, Options, Swaps and Forwards Money Market: Repos and Sec Lending Currencies (Set Icap FX) FX Derivatives (Set Icap FX) Public and Corporate Debt (Set Icap Securities) Electricity Futures (Derivex) Post-Trading Guarantees Administration Clearing & Settlement Custodian Services Local and international custody Securities administration and direct payments to investors Transactions (DVP, LP and others) Clearing & Settlement ETFs Creation and Cancelation Clearing, settlement and Counterparty services for derivatives (CRCC) Money Market risk management services for fixed income (CRCC) FX Clearing services (CDCC) Information & Market Access Technology Market Data Index Licensing Market access (Platforms, SAE, e-bvc) Education Information screens Information Price vendor services Non Liquid assets valuation services Risk management tools services FX and derivatives market data Analytics Consultancy: Core Banking, Treasury and Capital Markets Software Factory Testing Factory 13

14 Combined Business Overview New Shareholding Composition and Board of Directors 14 Transaction Structure Contribution of Shares : 1 Deceval share = BVC shares BVC issued new shares in favor of Deceval shareholders New Shareholding Composition Board of Directors 9% 2% 0,2% 4% 4% 5% 31% 45% Banks Foreign Investors Pension Funds Universities Brokerage Firms Real Sector Individuals Mutual Funds BVC continues committed to the highest corporate governance standards with independent members majority in its Board of Directors 7 Independent Members 6 Non-Independent Members Corporate bylaws amendments will be submitted in the extraordinary shareholders meeting on 20 Dec 2017.

15 Agenda BVC and Deceval: The Value of Working Together 15 1 Introduction 88 Years of History Objectives of the Integration 4 2 Financial profile Attractive revenue mix Timetable Financial Highlights Strategic Rationale Appealing Strategic Rationale Stakeholders benefits BVC Group Composition Business Solutions Shareholding Composition and Board of Directors 3 Combined Business Overview

16 Financial Highlights Attractive Pro Forma Financial Profile Balance Sheet and Dividend Policy Cash and Earnings Generation Synergy Opportunities Enterprise Value: COP $708 billion Stock Transaction Price: COP $25,12 * New Shares Outstanding: Strong combined balance sheet with no financial debt Attractive dividend policy: ordinary dividend 70% and extraordinary dividend 30% Solid combined cash generation profile Enables an attractive dividend policy and future investments growth opportunities COP $7 $8 billion annual cost synergies expected to be realizable by the end of 2019, significant savings related to business optimizations 35% of synergies benefits expected to be transferred to all market participants from 2018, via trading services Revenue synergies from Deceval representing an additional 33% of BVC consolidated revenues (LTM 3Q17) Significant additional revenue growth thanks to the development of new products and services like electronic invoice, promissory notes, SMEs financing platform among others. Pro forma consolidated financials and Pre-synergies as of LTM 3Q17 in COP $ Billions *calculated using the average closing price for bvc s share for the ninety (90) calendar days prior to the closing date **bvc: Pro forma Operating Revenues and Pre synergies as of LTM 3Q17 in USD $ Millions Source: Company information LTM Op. Revenues LTM EBITDA LTM Net Profit 3Q17 Cash Flow COP $156 COP $43 COP $27 COP $26 64 COP $76 COP $41 COP $25 COP $24 33 Combined Pro forma COP $232 COP $84 LTM 3Q17 Total Revenue Benchmarking (USD Millions)** BMV BVC BYMA BCS BVL 21 16

17 Financial Highlights Combined Business well Diversified and Attractive Revenue Mix Consolidated 0% 1% 42% Operating Revenues COP $156 Billion 11% 32% 13% 33% 4% 6% Operating Revenues COP $76 Billion 44% 28% 17% Operating Revenues COP $232 Billion 22% 22% 15% 10% Capital Markets Information Services Other Revenues Issuer Services IT Solutions Deposit of Issuances Securities Administration Other Revenues Custody Transactions Capital Markets Information Services Post-Trading Issuer Services IT Solutions Other Revenues Expansion of recurrent revenues in post-trading, maintaining the potential upside in trading revenues creating greater scale and financial strength Pro forma Operating Revenues and Pre synergies as of LTM 3Q17 17

18 Financial Highlights Combined Business well Diversified and Attractive Revenue Mix Revenue by Business Line 1% Revenue by Company 1% Revenue by Type 17% 22% 3% 9% 27% 24% 27% 28% 22% 33% 76% 10% Capital Markets Information Services Post-Trading Issuer Services IT Solutions Other Revenues BVC Sophos Set Icap FX Deceval Infovalmer Set Icap Securities Trading Revenues Non-Trading Revenues Resilient, attractive and diversified revenue mix across Colombian market infrastructure Valuable portfolio businesses expansion through organic initiatives and acquisitions Greater participation of non-trading revenues reducing volatility and increasing resilience Pro forma Operating Revenues and Pre synergies as of LTM 3Q17 18

19 Transaction Timeline BVC DECEVAL Corporate Integration The Corporate Integration BVC Deceval successfully approved by the SFC after all corporate and regulatory procedures Mar 24/28 T1 + N1 T2 + N2 T3 + N3 T4 T1 N1: Days T2 N2: SFC Time T3 N3: SFC and SIC Time N4: Days T5 T4 + N4 Shareholders Meetings Regulatory Procedures Execution of Master Agreement Regulatory Review SFC and SIC Transaction Closing DECEVAL Extraordinary Meeting Approval of corporate bylaws amendment (Mar 24) BVC Ordinary Shareholders Meeting Approvals (Mar 28) : Transaction Corporate bylaws amendment Shares issuance Preemptive rights waiver Formal filing of the Issuance Rules before the SFC (Apr 6) Emission of the Issuance Rules by BVC s Board of Directors (Apr 26) Approval of the Issuance Rules by the SFC (Jun 1) Execution of master agreement (Jun 27) Acceptances by Deceval s shareholders (Jul 4) Launch of private offering of shares by BVC (Jul 6) Approval from SFC of the acquisition made by the BVC of the shares contributed by the current shareholders of DECEVAL (Dec 5) Subscription of shares Registration in BVC s shareholders ledger Registration in the chamber of commerce Closing Date: 14 Dec 2017 Integration Project Phases with an International Consultant Company: Planning Implementation* SFC: Financial Superintendence of Colombia (financial supervisor) SIC: Superintendence of Industry and Commerce (antitrust authority) * Implementation phase after transaction closing 19

20 Thank You 20