Euronext Nv · EURONEXT:ENX
Euronext Nv — Investor Day (May 2016)
115 slides from Euronext Nv's investor day presentation, May 13, 2016
Slide 1: Euronext Agility for Growth
EURONEXT AGILITY FOR GROWTH 13 MAY 2016 AGILITY FOR GROWTH
Slide 2: Disclaimer
DISCLAIMER This presentation is for information purposes only and is not a recommendation to engage in investment activities. The information and materials contained in this presentation are provided ‘as is’ and Euronext does not warrant as to the accuracy, adequacy or completeness of the informatio
Slide 3: Our track record: Euronext has outperformed since IPO, reaching targets a year in advance
OUR TRACK RECORD: EURONEXT HAS OUTPERFORMED SINCE IPO, REACHING TARGETS A YEAR IN ADVANCE Total shareholder return of 141% since IPO Initial and 80% in 2015 2016 targets €519m 1 Third party revenues €471m (€m) 1 €433m €500m Cost efficiencies (€m) -€83m3 -€60m4 EBITDA margin 29%1,2 42%1 55% 45% 2013
Slide 4: Our fundamental assets to drive future growth
OUR FUNDAMENTAL ASSETS TO DRIVE FUTURE GROWTH 1 Euronext is a fully independent European player focused on its core European markets 2 Euronext offers a wide range of products, services and platforms with a strong international presence 3 Euronext offers liquidity and transparency to all market part
Slide 5: Our strategic ambitions until 2019: Agility for Growth
OUR STRATEGIC AMBITIONS UNTIL 2019: AGILITY FOR GROWTH I V CAPTURE OPPORTUNITIES ARISING FROM THE ENVIRONMENT II ENHANCE AGILITY DELIVER VALUE TO III SHAREHOLDERS STRENGTHEN RESILIENCE OF THE CORE BUSINESS IV GROW IN SELECTED SEGMENTS AGILITY FOR GROWTH 5
Slide 6: Agenda for the day – morning session
AGENDA FOR THE DAY – MORNING SESSION Ambitions: Agility for Growth 11:00 Stéphane Boujnah, CEO Euronext I Capture opportunities arising from the environment 11:10 Lee Hodgkinson, Head of Markets and Global Sales 1. Market trends and economic outlook as an opportunity Lee Hodgkinson, Head of Markets
Slide 7: Agenda for the day – afternoon session
AGENDA FOR THE DAY – AFTERNOON SESSION IV Grow in selected segments 13:45 Stéphane Boujnah, CEO Euronext 1. Adding value to issuers 1.1 The exchange for European Tech SMEs Eric Forest, CEO EnterNext 1.2 Data & analytics: The modular corporate services provider Lee Hodgkinson, Head of Markets and Glo
Slide 8: Strategic ambitions overview
I V CAPTURE OPPORTUNITIES ARISING FROM THE ENVIRONMENT II ENHANCE AGILITY DELIVER VALUE TO III SHAREHOLDERS STRENGTHEN RESILIENCE OF THE CORE BUSINESS IV GROW IN SELECTED SEGMENTS AGILITY FOR GROWTH 8
Slide 9: Capture opportunities arising from the environment
CAPTURE OPPORTUNITIES ARISING FROM THE ENVIRONMENT Market trends and economic outlook as an opportunity Lee Hodgkinson, Head of Markets and Global Sales AGILITY FOR GROWTH
Slide 10: The next three years will be shaped by a set of key drivers
THE NEXT THREE YEARS WILL BE SHAPED BY A SET OF KEY DRIVERS Economic conditions to remain supportive of the core business Quantitative easing (QE) and low rates will continue to drive investor search for yield Volatility will continue as theme; Brexit “pause” will pass Capital requirements a
Slide 11: Euro-area real activity continues its positive trajectory
EURO-AREA REAL ACTIVITY CONTINUES ITS POSITIVE TRAJECTORY … Growth momentum will restore Keynes’ “animal spirits” and investor appetite 130 120 110 Now-Casting Nominal Value 100 Eurozone Now-Casting Index 90 80 US Now-Casting Index 70 60 50 Now-Casting Index: real activity index based on a model bui
Slide 12: Amidst a stable macro-economic environment and outlook
…AMIDST A STABLE MACRO-ECONOMIC ENVIRONMENT AND OUTLOOK Consensus expectation is for Euro Area GDP growth 1,5 5 Euro Area GDP Growth EuroCoin Indicator 4 1 3 Euro Area GDP Growth % 1.6 1.6 1.7 2 EuroCoin Indicator 0,5 1 0 0 Forecast -1 -0,5 -2 -3 -1 -4 -1,5 -5 Source: Euronext, Bloomberg GDP consens
Slide 13: And easier financial and fiscal conditions
…AND EASIER FINANCIAL AND FISCAL CONDITIONS Improving credit conditions will facilitate expansion of real economy corporates 5 ECB QE France Germany Banks’ interest rates to non-financial corporations (1-5 year loans) Spain 4 Italy Interest Rate % 3 2 2010 2011 2012 2013 2014 2015 2016 AGILITY FOR G
Slide 14: Material QE combined with volatility will support volume
ADV on Euronext €m - 1 000 2 000 3 000 4 000 5 000 6 000 7 000 8 000 9 000 January 10 000 February March April May June 2011 July August September October November December January Euronext ADV (€m) February March April May Source: Euronext, Bloomberg, May 2016 June 2012 July August September Octobe
Slide 15: Experience of US peers shows little to fear from end of QE
EXPERIENCE OF US PEERS SHOWS LITTLE TO FEAR FROM END OF QE At the end of QE, similarly to the US, no negative impact is expected BATS Global Markets - US Nasdaq - US NYSE 6 000 000 Taper announcement 5 000 000 Fed’s QE taper did not affect ADV on US ADV US$ m 4 000 000 exchanges negatively 3 000 000
Slide 16: Results from G20 post-credit crisis response
RESULTS FROM G20 POST-CREDIT CRISIS RESPONSE “Never again” mantra, which The roll out of a regulatory has led to increased Quantitative easing and low change programme across the transparency, reduced systemic interest rates world’s major marketplaces risk and better use of capital Reshaping how bus
Slide 17: Regulation as a driver of our growth
CAPTURE OPPORTUNITIES ARISING FROM THE ENVIRONMENT Regulation as a driver of our growth Catherine Langlais, General Counsel AGILITY FOR GROWTH
Slide 18: Regulation will increasingly drive value towards transparent and open markets
REGULATION WILL INCREASINGLY DRIVE VALUE TOWARDS TRANSPARENT AND OPEN MARKETS… Pressure of Push for more equity and debt market-based financing CRD IV disintermediation will Easier SME access to public listing Prospectus directive Rise of electronic markets for capital intensive products rem
Slide 19: Resulting in an overall favourable environment for Euronext
… RESULTING IN AN OVERALL FAVOURABLE ENVIRONMENT FOR EURONEXT Today 2018 2019 Growing debt and equity financing needs Listing Opportunity to capture more listings through increased SME outreach Trading Growing trading volumes (all asset No regulatory change Opportunity to capture more activity throu
Slide 20: Innovation as a transforming force of our business
CAPTURE OPPORTUNITIES ARISING FROM THE ENVIRONMENT Innovation as a transforming force of our business Nicolas Rivard, Chief Innovation Officer AGILITY FOR GROWTH
Slide 21: Innovation and new entrants will transform capital markets
INNOVATION AND NEW ENTRANTS WILL TRANSFORM CAPITAL MARKETS Numerous drivers for accelerated innovation …with incremental or disruptive impacts in capital markets… Evolving regulation, stringent capital requirements push for Higher performance and cost efficiency of existing new ways of serving clien
Slide 22: Euronext's disciplined and structured innovation strategy will support growth
EURONEXT’S DISCIPLINED AND STRUCTURED INNOVATION STRATEGY WILL SUPPORT GROWTH Euronext has strong foundations to innovation A disciplined and structured strategy to innovation Spot market opportunities to build quickly Euronext capabilities on Passionate people growth selected segments With sound
Slide 23: Strategic ambitions overview
I V CAPTURE OPPORTUNITIES ARISING FROM THE ENVIRONMENT II ENHANCE AGILITY DELIVER VALUE TO III SHAREHOLDERS STRENGTHEN RESILIENCE OF THE CORE BUSINESS IV GROW IN SELECTED SEGMENTS AGILITY FOR GROWTH 23
Slide 24: Enhance agility
ENHANCE AGILITY Stéphane Boujnah, CEO Euronext AGILITY FOR GROWTH
Slide 25: Enhance agility
ENHANCE AGILITY Intensify client centricity Attract, retain and develop best talent and entrepreneurs Continue disciplined cost management Strengthen IT and infrastructure platforms Create a disciplined M&A framework AGILITY FOR GROWTH 25
Slide 26: Cost management discipline
ENHANCE AGILITY Cost management discipline Stéphanie Bia, Head of Investor Relations and Business Performance AGILITY FOR GROWTH
Slide 27: Track record: successful first cost reduction plan
EURONEXT’S TRACK RECORD: SUCCESSFUL FIRST COST REDUCTION PLAN Delivery, in a reduced timeframe, of €85m cost reductions versus initial target of €60m H1 14 Q3 14 Q4 14 Q1 15 Q2 15 Q3 15 Q4 15 Q1 16 IT rationalisation Notification and restructuring of London, IT staff, Euronext Separation Programme
Slide 28: Impact of cost reduction on EBITDA margin
IMPACT OF COST REDUCTION ON EBITDA MARGIN Strong impact of the cost reduction programme on EBITDA margin improvement +9pts 55% margin Compared to 2013 adjusted1, EBITDA margin +17pts increased by: 42% margin • +17pts thanks to cost reductions • +9pts thanks to increase in revenues 29% margin -13pt
Slide 29: Additional cost reduction programme
ADDITIONAL COST REDUCTION PROGRAMME Delivery of €22m savings through infrastructure optimisation and streamlining of the organisation Infrastructure optimisation Continuous efforts to improve assets utilisation 1/3 Rationalise number of sites and set-up IT team in Porto (effective near- shore ce
Slide 30: Consistent delivery of cost reduction initiatives
CONSISTENT DELIVERY OF COST REDUCTION INITIATIVES Euronext expects to complete its cost reduction programme of €100m by year-end 2019 while maintaining control over its exceptional restructuring expenses Cost reductions Additional since IPO + cost reductions = Total Cost reductions IT rationalisatio
Slide 31: Upgraded IT & infrastructure platforms
ENHANCE AGILITY Upgraded IT & infrastructure platforms Jos Dijsselhof, COO AGILITY FOR GROWTH
Slide 32: Technology continues to act as an asset for business growth
TECHNOLOGY CONTINUES TO ACT AS AN ASSET FOR BUSINESS GROWTH 2014 2015 2016 Carved out Euronext IT from NYSE / LIFFE without impacting operations Separated, downsized and converged cash and derivatives infrastructure Optimised costs € 20 m cost reduction following closing of London IT office Relocati
Slide 33: Euronext focuses on stability and security
EURONEXT FOCUSES ON STABILITY AND SECURITY Euronext runs, maintains, enhances and protects the technology required to operate its business and serve its clients Seamlessly running our trading platforms with: – #1 priority is the daily start-up, operation & monitoring of systems – Stability contro
Slide 34: Enhancing the operating model to deliver value to clients
EURONEXT IS ENHANCING ITS OPERATING MODEL TO DELIVER VALUE TO ITS CLIENTS A more agile organisation… Relocate teams from Belfast to Porto by 2017 Industrialise IT processes Rationalise number of sites and co-locate teams where possible Implement Agile methodology Bring on over 100 highly ski
Slide 35: Launching a new generation technology platform (Optiq)
TO IMPROVE CUSTOMER EXPERIENCE, EURONEXT IS LAUNCHING A NEW GENERATION TECHNOLOGY PLATFORM With the cutting edge technology embedded on Optiq™, Euronext is meeting client key expectations STABILITY AND SCALABILITY AND LOW TIME SIMPLIFICATION & QUALITY OF SERVICE PREDICTABILITY TO MARKET RATIONALISAT
Slide 36: M&A discipline
ENHANCE AGILITY M&A discipline Stéphane Boujnah, CEO Euronext AGILITY FOR GROWTH
Slide 37: Disciplined approach to screening bolt-on opportunities
EURONEXT’S DISCIPLINED APPROACH TO SCREENING BOLT-ON OPPORTUNITIES Integration within Positioning in the cycle Fit with Euronext’s Valuation strategy Euronext and personal accountability AGILITY FOR GROWTH 37
Slide 38: M&A strategic priorities
M&A STRATEGIC PRIORITIES What does Euronext expect from acquisition targets? Value Entrepreneurial Technology Tangible results Scale proposition spirit What can Euronext offer to new teams? Open federal Agile Powerful brand Neutrality Network Efficiency model organisation AGILITY FOR GROWTH 38
Slide 39: A reinforced team and processes to capture opportunities
A REINFORCED TEAM AND PROCESSES TO CAPTURE OPPORTUNITIES Euronext strengthened team and process Key quantitative criteria on potential targets Strong track record in delivering Euronext’s Substantial part of the €100-€150m envelope for successful IPO and stated objectives developments to be allo
Slide 40: Strategic ambitions overview
I V CAPTURE OPPORTUNITIES ARISING FROM THE ENVIRONMENT II ENHANCE AGILITY DELIVER VALUE TO III SHAREHOLDERS STRENGTHEN RESILIENCE OF THE CORE BUSINESS IV GROW IN SELECTED SEGMENTS AGILITY FOR GROWTH 40
Slide 41: Strengthen the resilience of the core business
STRENGTHEN THE RESILIENCE OF THE CORE BUSINESS Lee Hodgkinson, Head of Markets and Global Sales AGILITY FOR GROWTH
Slide 42: Strengthen the resilience of the core business to create value
STRENGTHEN THE RESILIENCE OF THE CORE BUSINESS TO CREATE VALUE Continue to meet obligations to clients today while constantly reaching for change tomorrow Strategy description Value for clients Value for shareholders Expand the largest continental European venue to Listing meet client financing need
Slide 43: Listing
STRENGTHEN THE RESILIENCE OF THE CORE BUSINESS Listing Anthony Attia, CEO Euronext Paris and Global Head of Listing AGILITY FOR GROWTH
Slide 44: Euronext listing: over 1,300 issuers
EURONEXT LISTING: OVER 1,300 ISSUERS 275 large cap companies, including 50% of the EuroStoxx 50 1,043 SMEs financing their growth on Euronext AGILITY FOR GROWTH 44
Slide 45: European companies increasingly seeking financing on Euronext
EUROPEAN COMPANIES ARE INCREASINGLY SEEKING FINANCING ON EURONEXT Euronext is the largest and most active exchange Capital raised on Euronext markets in €bn in continental Europe… 91.8 104.0 111.7 Over 1,300 c. €3 trillion 50% of the issuers market cap Euro Stoxx 50 54.3 64.9 …with an attractive val
Slide 46: Euronext's listing revenue is stable and resilient
EURONEXT’S LISTING REVENUE IS STABLE AND RESILIENT Annual fixed fees coming from listed products are a >70% of capital raised on equities from follow-on deals significant revenue component (>45%) in €bn in €m 45.3 Others 73% 53.5 61.7 70.5 Bond fees 3.9 47.1 IPOs 76% 5.3 2.9 Follow-ons 5.3 12.3 29.4
Slide 47: Boosting franchise with new offers and increased market reach
EURONEXT IS BOOSTING ITS FRANCHISE WITH NEW OFFERS AND INCREASED MARKET REACH Supported by increased disintermediation …and has provided new added-value services and CMU… to issuers… Visibility & communication ❶ Reinforced prudential rules Research coverage ❷ Development of diversified funding sourc
Slide 48: Unique bespoke offering for SMEs in Europe
EURONEXT PROVIDES A UNIQUE BESPOKE OFFERING FOR SMEs IN EUROPE Client intimacy, education and tight collaboration with the local financial ecosystems are at the heart of Euronext’s strategy EnterNext – Total money raised (€bn) and number Launch of Pre and Post Listing services in 2015 of deals 10 40
Slide 49: Cash trading
STRENGTHEN THE RESILIENCE OF THE CORE BUSINESS Cash trading Danielle Mensah, Head of Cash Markets AGILITY FOR GROWTH
Slide 50: Diverse strategy to drive growth in cash trading
EURONEXT HAS A DIVERSE STRATEGY TO DRIVE GROWTH IN CASH TRADING Quarterly cash revenues and volumes increase 20 60 €bn average daily volumes €m quarterly revenues Cash ADV Revenues 50 15 2013-2015 CAGR 40 Revenues +10.4% 10 30 20 5 10 2013-2015 CAGR 0 0 Volumes +12.3% Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q
Slide 51: Euronext outperforms peers in value extraction
EURONEXT OUTPERFORMS PEERS IN VALUE EXTRACTION Value extraction measured by market share 25% & yield is significantly stronger at Euronext 20% Share of pan-European trading Volumes 15% 10% 5% 0% 0 0,1 0,2 0,3 0,4 0,5 0,6 0,7 0,8 0,9 1 Yields Basis points on ‘single-counted’ volumes AGILITY FOR GROWT
Slide 52: Point of price formation with superior execution quality
EURONEXT IS THE POINT OF PRICE FORMATION WITH SUPERIOR EXECUTION QUALITY Better execution available vs. MTF competition* Strong flow diversity across multiple client types Multi-Type 21% HFT Euronext blue chips 15% Institutional Euronext BATS Chi-X Equiduct Turquoise Agency Broker Q1 2016 Retail Ave
Slide 53: Euronext has kept yields stable in a competitive environment
EURONEXT HAS KEPT YIELDS STABLE IN A COMPETITIVE ENVIRONMENT… Average monthly yields for cash trading vs. MTFs (basis points) Segmented agency pricing 0,6 Segmented scheme positions Cash Trading Yield customers for growth, whilst 0,5 extracting value and no rebates 0,4 Basis points Flagship ‘supplem
Slide 54: Will not overpay for yield-dilutive market share
… AND WILL NOT OVERPAY FOR YIELD-DILUTIVE MARKET SHARE Market share of ‘primary exchange’ on domestic blue chip index 66% 64% CAC 40 62% AEX 60% DAX FTSE 58% OMXS30 56% 2015 2016 54% J F M A M J J A S O N D J F M Aggressive pricing for low yield, mobile HFT flow, Turquoise beating Chi-X on market sh
Slide 55: Euronext outperforms peers in ETFs
EURONEXT OUTPERFORMS PEERS IN ETFS ETFs reached a new level of investment in Europe with significant additional growth potential New dedicated & focused team Strong relationships with the issuers 2015 volume • Fastest listing process in Europe 18% CAGR in +74% on • Cost efficiency to grow issuer
Slide 56: Derivatives trading
STRENGTHEN THE RESILIENCE OF THE CORE BUSINESS Derivatives trading Adam Rose, Head of Financial Derivatives AGILITY FOR GROWTH
Slide 57: Derivatives footprint benefits from a solid index franchise
DERIVATIVES MARKET FOOTPRINT BENEFITS FROM A SOLID INDEX FRANCHISE French and Dutch options business is at the heart of Euronext’s offering ~50% volumes* comes from index derivatives 11% Index options CAC40 ® is the most traded European country index futures * 39% Index futures Exclusive to Euronext
Slide 58: Addressing competition on individual equity options
EURONEXT HAS BEEN IN A POSITION TO ADDRESS THE COMPETITION ON INDIVIDUAL EQUITY OPTIONS Partnership Individual Equity Options Amsterdam with DeGiro 20-day Average Daily Volume (contracts) 80% After partnering with DeGiro, the fastest 70% growing on-line 60% broker in Europe, 50% Euronext’s Individua
Slide 59: Cost effective diversification capturing evolving client needs
COST EFFECTIVE DIVERSIFICATION WILL CAPTURE OPPORTUNITIES FROM EVOLVING CLIENT NEEDS AND REGULATORY CHANGE Portfolio diversification in asset classes and geographies New OTC capture platform AtomX to benefit from tailwind of regulatory change Asset class AtomX, Euronext’s trade capture facility, p
Slide 60: Uniquely positioned to develop the derivatives franchise
EURONEXT IS UNIQUELY POSITIONED TO DEVELOP THE DERIVATIVES FRANCHISE Financial derivatives at Euronext benefit from: Euronext is uniquely positioned to strengthen its positioning thanks to: Technology Amsterdam options franchise Regulatory tailwind French delta one products Client community AGILITY
Slide 61: Market data and indices
STRENGTHEN THE RESILIENCE OF THE CORE BUSINESS Market Data and Indices Maurice van Tilburg, CEO Euronext Amsterdam AGILITY FOR GROWTH
Slide 62: Outperforms peers by adapting model to evolving client data usage
EURONEXT OUTPERFORMS PEERS BY ADAPTING ITS MODEL TO SERVE EVOLVING CLIENT USAGE OF DATA Increase in revenues despite decline in the Market Data revenue has outperformed peers over number of screens purchased by clients the last 3 years 250 000 100 Market Data revenue has increased through active 200
Slide 63: Diversification of data business meeting changing client needs
DIVERSIFICATION OF DATA BUSINESS IS MEETING CHANGING CLIENT NEEDS WHILE MITIGATING THE IMPACT OF REGULATION Market evolution Leveraging opportunities and mitigating risk beyond 2019 1. REGULATION Euronext will mitigate impact through product MIFID II will lead to disaggregated data sold on a innov
Slide 64: Regulated and scalable index offering
REGULATED AND SCALABLE INDEX OFFERING SUPPORTS CLIENTS’ PASSIVE INVESTMENT NEEDS Strong and diversified growth in listed products… … which Euronext will capture… +26% 8 000 Tailored made indices based on our proven capability on our existing nr. Index Products 7 000 indices: CAC 40 AEX All 6 000 R
Slide 65: Break
BREAK INVESTOR DAY i EURONEXT AGILITY FOR GROWTH
Slide 66: Strategic ambitions overview
I V CAPTURE OPPORTUNITIES ARISING FROM THE ENVIRONMENT II ENHANCE AGILITY DELIVER VALUE TO III SHAREHOLDERS STRENGTHEN RESILIENCE OF THE CORE BUSINESS IV GROW IN SELECTED SEGMENTS AGILITY FOR GROWTH 66
Slide 67: Grow in selected segments
GROW IN SELECTED SEGMENTS Stéphane Boujnah, CEO Euronext AGILITY FOR GROWTH
Slide 68: Disciplined approach to increase scale and diversify revenue streams
WE ARE APPLYING A DISCIPLINED APPROACH TO INCREASE SCALE AND DIVERSIFY REVENUE STREAMS Our ambition is to accelerate our top-line growth through a realistic and coherent strategy • Adding value to issuers and investors • Leveraging our assets: technology infrastructure, network, brand, neutrality, p
Slide 69: Systematic selection of strategic initiatives
WE HAVE BEEN SYSTEMATIC AND THOROUGH IN SELECTING STRATEGIC INITIATIVES Map the Select 15 strategic 6 strategic universe of Identify areas & areas with highest growth the possible select initiatives potential initiatives • Market dynamics • Fit with growth • Feasibility of initiative ambition and pr
Slide 70: Selected growth segments and 3-year targets
WE HAVE SELECTED 6 GROWTH SEGMENTS TO DIVERSIFY REVENUE STREAMS AND SCALE OUR BUSINESS 3-year targets The exchange for The modular corporate services provider Adding value to European Tech SMEs on data analytics issuers ~80 non Euronext country 800 clients served Tech SMEs listed One-stop-shop pan-E
Slide 71: The exchange for European Tech SMEs
GROW IN SELECTED SEGMENTS Adding value to issuers: The exchange for European Tech SMEs Eric Forest, CEO EnterNext AGILITY FOR GROWTH
Slide 72: Capital markets insufficiently tailored to European Tech SMEs
EUROPEAN CAPITAL MARKETS ARE INSUFFICIENTLY TAILORED TO THE FINANCING NEEDS OF EUROPEAN TECH SMES Strong growth potential PE funds to look at stock market for Specific features of exit innovation Need for critical financing investor & analyst Market opportunity Enormous pool size financing needs No
Slide 73: Years of expertise responding to the needs of Tech SMEs
EURONEXT HAS ACCUMULATED YEARS OF EXPERTISE IN RESPONDING TO THE NEEDS OF TECH SMES… 326 €38bn 70 €7bn Listed SMEs operating in Aggregated market Tech SMEs listings over Raised by Tech SMEs on the Digital, Cleantech and capitalisation the last 3 years our markets over the last Life sciences industri
Slide 74: Enhanced value proposition to European tech business leaders
…AND IS NOW CAPABLE OF OFFERING AN ENHANCED VALUE PROPOSITION TO EUROPEAN TECH BUSINESS LEADERS > 2000 > 250 > 1000 > 1300 Addressable market Number of Tech SMEs Source: Capital IQ AGILITY FOR GROWTH Market size: assess companies with less than 250 employees operating in Media, Biotechnology, Intern
Slide 75: The European Tech SMEs listing venue of choice
THE EUROPEAN TECH SMEs LISTING VENUE OF CHOICE European capital markets are insufficiently tailored to the financing needs of European Tech SMEs Euronext has developed growing expertise for domestic Tech SMEs and now offers a compelling value proposition Euronext will become the European Tech SMEs l
Slide 76: Data & analytics: the modular corporate services provider
GROW IN SELECTED SEGMENTS Adding value to issuers: Data & analytics: the modular corporate services provider Lee Hodgkinson, Head of Markets and Global Sales AGILITY FOR GROWTH
Slide 77: Limited access to analytical and IR services for issuers
LIMITED ACCESS TO ANALYTICAL AND IR SERVICES PREVENTS ISSUERS FROM UNLOCKING THE FULL POTENTIAL OF CAPITAL MARKETS Need for an efficient capital markets cycle Roadshow organisation and coordination Access to Capital Investor intelligence Issuers are looking for efficient access to Investor tar
Slide 78: Launching a dedicated data analytics and investor communications service
EURONEXT IS LAUNCHING A DEDICATED DATA ANALYTICS AND INVESTOR COMMUNICATIONS SUPPORT SERVICE Targeting relevant corporates listed on Euronext and on partnering exchanges A digital access to a Investor communications support services user-friendly platform Fundamental Credit Roadshow Organisation of
Slide 79: European corporate data & analytics service provider of reference
THE EUROPEAN CORPORATE DATA & ANALYTICS SERVICE PROVIDER OF REFERENCE Thousands of issuers have limited access to analytical and investor relations services, preventing them from benefiting fully from capital markets Euronext is uniquely positioned to fill this gap, with its direct access to corpora
Slide 80: Growth segments to add value to investors
WE HAVE SELECTED 4 GROWTH SEGMENTS TO ADD VALUE TO INVESTORS 3-year targets The exchange for The modular corporate services provider Adding value to European Tech SMEs on data analytics issuers ~80 non Euronext country 800 clients served Tech SMEs listed One-stop-shop pan-European ETF Euronext brand
Slide 81: ETFs: One-stop-shop pan-European ETF platform
GROW IN SELECTED SEGMENTS Adding value to investors: ETFs: One-stop-shop pan-European ETF platform Benjamin Fussien, Head of ETFs AGILITY FOR GROWTH
Slide 82: ETFs represent a growing European market opportunity
ETFS REPRESENT A GROWING EUROPEAN MARKET OPPORTUNITY In $ tn +18% ETF/ETP AUM Total AUM is expected to keep growing at growth p.a. evolution 0.4 1,5 3.0 a pace of 18% p.a. in average for at least forecast in the next 3 years (global) 2005 2010 2015 Europe ETF/ETP In thousands > 6,900 ETF Enduring gl
Slide 83: At the heart of growth in the European ETF market
EURONEXT IS AT THE HEART OF GROWTH IN THE EUROPEAN ETF MARKET Enriched product offering and ecosystem Re-engaged with a strong issuer base Launch of new products and services (e.g. fast path listing New comers joining Euronext (e.g. UBS AM, 4th largest initiative, Euronext London, trading thresholds
Slide 84: Gain scale through a new ETF offering
EURONEXT WILL GAIN SCALE AND FUEL TOP LINE GROWTH THROUGH A NEW ETF OFFERING The market is fragmented and Clients are looking for a Euronext will build a dedicated opaque one-stop-shop solution MTF platform and RFQ services in partnership with clients Lack of transparency and liquidity An innova
Slide 85: One-stop-shop pan-European ETF platform in partnership with clients
ONE-STOP-SHOP PAN-EUROPEAN ETF PLATFORM IN PARTNERSHIP WITH CLIENTS Clients seek transparency, but the young and fast growing European ETF market is fragmented and opaque, with 70% of flows from OTC Euronext has a leading position in listing and trading ETFs, a strong issuer base, and a rich product
Slide 86: Indices: Euronext branded European family of indices
GROW IN SELECTED SEGMENTS Adding value to investors: Indices: Euronext branded European family of indices Adam Rose, Head of Financial Derivatives AGILITY FOR GROWTH
Slide 87: European landscape: a highly concentrated market
EUROPEAN LANDSCAPE: A HIGHLY CONCENTRATED MARKET Thousands of indices are calculated… % Passive (vs. active) in mutual funds and mandates still growing Multitude of assets: equities, bonds, commodities, FX, multi-assets,… 30% 26% Multitude of universes: geographical, sectorial, 20% 13% thematic,
Slide 88: Index industry struggling to meet evolving client needs
THE INDEX INDUSTRY IS STRUGGLING TO MEET EVOLVING AND GROWING CLIENT NEEDS The index industry is no longer in line… …with clients’ needs and requirements Increasing index licencing fees and associated market Growing pressure on costs and search for cheaper data fees alternatives Access to key
Slide 89: Launch an open source model for pan-European family of indices
EURONEXT WILL LAUNCH AN “OPEN SOURCE” MODEL FOR A PAN-EUROPEAN FAMILY OF INDICES A Euronext European family of indices… …leveraging a proven track-record 1 …through a Strong track-record of creating and maintaining blue From country to disruptive open chip indices in all four markets European cent
Slide 90: Euronext branded family of indices with open source model
EURONEXT BRANDED EUROPEAN FAMILY OF INDICES WITH AN OPEN SOURCE MODEL Client demand for indices continues to grow but the highly concentrated industry is unable to meet their needs in terms of transparency, cost, and diversity Euronext has a proven track record in creating and maintaining blue chip
Slide 91: Commodities: specialist content on agricultural commodities
GROW IN SELECTED SEGMENTS Adding value to investors: Commodities: Specialist content on agricultural commodities Olivier Raevel – Head of commodity derivatives AGILITY FOR GROWTH
Slide 92: Commodities franchise is resilient and growing
EURONEXT’S COMMODITIES FRANCHISE IS RESILIENT AND GROWING 70 000 ADV 12-Month rolling average show CAGR of +11% in lots per trading day Jan-Apr 2016 average stands at 65,212 lots 60 000 50 000 40 000 30 000 20 000 10 000 0 AGILITY FOR GROWTH 92
Slide 93: Changes in grain world exports shifting the pivot of grain trade
ONGOING CHANGES IN GRAIN WORLD EXPORTS BALANCE ARE SHIFTING THE PIVOT OF GRAIN TRADE FLOWS EASTWARD TOWARD EUROPEAN BASINS Share of wheat futures OI 2006 Evolution of wheat futures total open interest (MMT) How is Euronext harnessing these 2% 7% fundamental changes for our 22% customers? Deploy ex
Slide 94: Servicing industrial needs for price-discovery along 4 core directions
EURONEXT IS SERVICING INDUSTRIAL NEEDS FOR ADEQUATE PRICE-DISCOVERY MECHANISMS ALONG 4 CORE DIRECTIONS 2014 2015 2016 Beyond… Moving along EU CAP Deregulation Calendar: Active initiative in domestic EU Sugar and beyond… Deregulation achieved in EU CAP Further Dairy SMP / Butter / Whey Adjacencies of
Slide 95: Become a leading specialist content provider and expand AtomX
EURONEXT WILL BECOME A LEADING SPECIALIST CONTENT PROVIDER AND WILL EXPAND ATOMX INTO COMMODITIES Customers are looking for extended services Opportunity to leverage Euronext’s positioning and service offering by becoming a leading specialist content provider… Integrate Ags Grow OTC price Generate n
Slide 96: Ambitious targets for specialist content and AtomX in commodities
AMBITIOUS TARGETS TO BECOME THE LEADING SPECIALIST CONTENT PROVIDER AND EXPAND ATOMX INTO COMMODITIEST PROVIDER COMMODITIES Clients are looking for additional services and a wider array of instruments in commodities, as well as greater transparency and deeper analysis Euronext has been expanding its
Slide 97: Post trade solutions
GROW IN SELECTED SEGMENTS Adding value to investors: Post trade solutions Andrew Simpson – Head of Post Trade AGILITY FOR GROWTH
Slide 98: Euronext is creating optionality for clearing
EURONEXT IS CREATING OPTIONALITY FOR CLEARING Euronext is creating optionality because… Exclusive talks to partner with EuroCCP for cash clearing… End of the cash and derivative contracts with LCH.Clearnet SA Reduces frictional costs in 2018, with a one year notice period Reduces operational c
Slide 99: Extending the post trade franchise amid regulatory pressure
WITH GROWING REGULATORY PRESSURE FOR CUSTOMERS, EURONEXT IS EXTENDING THE POST TRADE FRANCHISE Revenues sustainable as customers seek Customers want a broad-based offering, an alternative to incumbent CCPs enabling further growth Requires more cleared flow Improved risk Pre Trade Risk EMIR and incre
Slide 100: Building optionality on clearing and extending post trade franchise
BUILDING OPTIONALITY ON CLEARING AND EXTENDING POST TRADE FRANCHISE With careful analysis of client needs, change in environment and its positioning, Euronext has partnered with EuroCCP for cash clearing to increase customer proposition and is analysing options for derivatives clearing As regulatory
Slide 101: Break
BREAK INVESTOR DAY i EURONEXT AGILITY FOR GROWTH
Slide 102: Strategic ambitions overview
I V CAPTURE OPPORTUNITIES ARISING FROM THE ENVIRONMENT II ENHANCE AGILITY DELIVER VALUE TO III SHAREHOLDERS STRENGTHEN RESILIENCE OF THE CORE BUSINESS IV GROW IN SELECTED SEGMENTS AGILITY FOR GROWTH 102
Slide 103: Deliver value to shareholders
DELIVER VALUE TO SHAREHOLDERS Giorgio Modica, CFO AGILITY FOR GROWTH
Slide 104: Main drivers of Euronext's transactional business
MAIN DRIVERS OF EURONEXT’S TRANSACTIONAL BUSINESS Volume and yield are the main top line drivers of Euronext’s volume related business Volume impact Yield performance 0,523 0,505 0,492 0,501 7,0 68% 5,4 67% 5,5 6,5 8,3 8,3 0,465 0,478 66% 64% 64% 61% Historic trend 2011 2012 2013 2014 2015 Q1-16 201
Slide 105: Building blocks of 2019 sales target
BUILDING BLOCKS OF 2019 SALES TARGET (EXCL. GROWTH INITIATIVES) Core business1 expected to grow 2% per year €519m +€50m +€10m €505m €467m -€21m -€52m +€29m +€39m 2015 reported Clearing 2015 reported excl. Volume impact Yield pressure Non-volume 2019 target 1 adjustment clearing business Volume-relat
Slide 106: Key targets of selected growth initiatives
KEY TARGETS OF OUR SELECTED GROWTH INITIATIVES €70m top line growth, with a ~50% EBITDA margin Revenues1 OpEx1 Investments Adding Listing The exchange for European Tech SMEs €5m value to issuers Market Data The modular corporate services provider €29m on data analytics €100-150m for bolt-on One-stop
Slide 107: Target revenue evolution
TARGET REVENUE EVOLUTION €575m target1, implying a ~5% CAGR 2015-19 with further potential growth upside related to clearing activities +1% CAGR 2015-19E +€71m €646m +€70m €575m €519m +€39m €467m -€52m 2015 reported Clearing 2015 reported Core business Selected 2019 target Clearing add- 2019 target
Slide 108: Continuous cost management discipline
CONTINUOUS COST MANAGEMENT DISCIPLINE €15m of net additional cost reductions, adding-up to the €85m already completed since the IPO +€31m €250m €235m +€35m €219m €207m -€28m -€8m +€7m -€22m -€15m net additional savings 2015 reported Clearing 2015 reported End of first Additional Inflation Selected 2
Slide 109: Overview of 2019 financial targets
OVERVIEW OF 2019 FINANCIAL TARGETS1 Selected Core business Total growth initiatives +2% CAGR 2015-19E +3% CAGR 2015-19E +5% CAGR 2015-19E Revenues1 +€39m +€70m €575m -3% CAGR 2015-19E +4% CAGR 2015-19E +1% CAGR 2015-19E Costs1 -€23m2,3 +€35m €219m Volume impact Adding value to issuers 61-63% Drivers
Slide 110: Update on available resources and prudential requirements
UPDATE ON AVAILABLE RESOURCES AND PRUDENTIAL REQUIREMENTS Euronext capitalisation and liquidity (Q1 2016) New prudential requirements: key highlights Shareholders’ equity: €485m Mergers and acquisitions Gross cash position: €203m • Objective to reach positive tangible equity (≥10 years Liqui
Slide 111: Capital allocation policy
CAPITAL ALLOCATION POLICY Key principles of capital allocation Targets Preserve Euronext financial and strategic agility and create Investment grade profile value for investors Investments / M&A thresholds: Disciplined and focused approach to capital allocation • ROCE > WACC in year 3 Flex
Slide 112: Wrap-up
WRAP-UP Stéphane Boujnah, CEO Euronext AGILITY FOR GROWTH
Slide 113: Euronext Agility for Growth
EURONEXT AGILITY FOR GROWTH Our mission is to power pan-European capital market to finance the real economy Objectives Enablers Cost management discipline, €22m gross efficiencies M&A framework, €100m to 150m for bolt-on acquisitions and Client centricity Agility development costs Strengthened
Slide 114: Q&A session
Q&A SESSION AGILITY FOR GROWTH
Slide 115: Thank you
THANK YOU $ INVESTOR DAY i EURONEXT AGILITY FOR GROWTH