Compagnie Financiere Tradition Sa · SIX:CFT
Compagnie Financiere Tradition Sa — FY2007 Earnings Presentation
31 slides from Compagnie Financiere Tradition Sa's earnings presentation, Mar 13, 2008
Slide 1: 2007 Results
2007 Results Zurich - 13 March 2008
Slide 2: Agenda
Agenda 1. Tradition at a glance 2. Industry dynamics 3. 2007 full year performance 4. CFT share on SWX 5. Strategic outlook 1
Slide 3: 1. Tradition at a glance
— Pa + aa) a b : oe fim at! a_i af mr } -— 1. Tradition at a glance 9s Compagnie Financiére Tradition
Slide 4: 2007 performance in line with long term strategy
2007 performance in line with long term strategy Strategic rationale • Critical size • One stop shop positioning • Organic growth momentum • New geographies & new products, focus on market share • Sound balance sheet • Attractive dividend policy • CHF 8 will be proposed to the AGM Record year •
Slide 5: Tradition is the third largest Interdealer Broker in the world
Tradition is the third largest Interdealer Broker (« IDB ») in the world One of the very few global leaders of the sector • Significant scale • Diverse sources of revenues across the three time zones • A global product offer covering exchange-traded and OTC instruments • Strong positioning in high
Slide 6: IDBs play a critical role
IDBs play a critical role Price discovery Counterparty sourcing Highly skilled and efficient execution capabilities Primarily in the Over-the-Counter (OTC) markets • More recently expanding to exchange-traded instruments Revenue sources - Execution Agency & Matched principal Drivers – Volume
Slide 7: The market-related industry dynamics are attractive
The market-related industry dynamics are attractive Transactions and trading volumes have fueled growth ISDA - Market Survey BIS - Triennial Central Bank Survey Notional amounts outstanding at year end in USD bn Average daily turnover in April in USD bn Interest rates & Currency Global Foreign Glo
Slide 8: Tradition has a track record of organic growth and innovation
Tradition has a track record of organic growth and innovation • 16.2% 1997 - 2007 CAGR in current terms • 17.1% 1997 - 2007 CAGR in 2007 constant currency terms 1417 Turnover 1144 1139 Current exchange rates Constant exchange rates* 915 918 882 813 850 792 786 727 780 M 700 645 C 536 H 497 455 F 385
Slide 9: 2. Industry dynamics
2. Industry dynamics 9s Compagnie Financiére Tradition
Slide 10: Market structure driving strategic thinking
Market structure driving strategic thinking IDBs Futures Brokers Focus on market evolution Increased visibility of the global leaders 5 players with revenues above $900m 2 players with revenues around $1.5bn Leading players in the transactional Their transactional services smaller in value chain siz
Slide 11: Market structure space marked by demutualisation, consolidation and coopetition
Market structure space marked by demutualisation, consolidation and « coopetition » 1996 1999 2001 2003 2005 2007 1999 2000 2002 2004 2006 2008 VIEL & Cie Intercapital Exco Tullett buys TFS Icap JV Icap Tullett is Collins GFI listed Icap buys Icap buys GFI buys buys reverses merges with Liberty part
Slide 12: Contrasted market conditions between H1 and H2
5 15 25 35 0 10 Dec-05 Dec-05 Feb-06 Feb-06 Apr-06 VIX Apr-06 Source: Reuters Jun-06 Source: Bloomberg Jun-06 Aug-06 Aug-06 $/JPY Oct-06 Oct-06 Dec-06 Dec-06 Feb-07 Feb-07 Equities Apr-07 Apr-07 Jun-07 Jun-07 historic volatilities Aug-07 $/€ Aug-07 Foreign exchange Oct-07 Oct-07 Dec-07 Dec-07 Feb-08
Slide 13: 3. 2007 full year performance
3. 2007 full year performance
Slide 14: 2007 overview
2007 overview Turnover Expenses Operating Operating PBT Net profit Net profit profit margin from cont. group operations share +23.8% +21.8% +37.6% +38.8% +33.6% +37.1% 1 417.1 10.6% 1 268.7 9.5% M 1 144.4 C 2006 H 1 041.4 2007 F 150.1 166.4 109.0 119.9 93.7 70.1 61.7 84.6 13
Slide 15: Very strong organic growth
Very strong organic growth Peer group Half year and yearly turnover 2005-2007 top line growth – current currency terms in current currency terms ICAP (e) 1600 1 417.1 200 Tullett Prebon 1400 1 144.4 Tradition 1200 180 GFI 914.7 GFI organic (e) 1000 160 M H2 Tullett Prebon organic (e) C 800 H1 140 IC
Slide 16: Favourable market conditions for equity derivatives and commodities
Favourable market conditions for equity derivatives and commodities Underlying growth rate of 28.3%* Turnover by product - 2007 bridge 1500 +43.2%* 1400 +47.5%* M 1300 C +10.5%* H 1200 F 1100 1000 900 800 700 er e x r r s s op e e re ie te h ov ov Source: FIA rit ot Fo ra sc rn rn cu & st in Tu Tu
Slide 17: Top line engines in the three time zones
Top line engines in the three time zones Balanced geographic split of revenues Turnover by region - 2007 bridge M +45.7%* C 1500 H 1400 +33.7% F 1300 +17.3% 1200 +19.7% 1100 1000 900 11.7% 800 700 as 32.9% c e x e r r K Pa op e e op re U ic ov ov Fo a- sc er ur rn rn si m lE in Tu Tu A A ta e 06 0
Slide 18: Continued geographic expansion
Continued geographic expansion Presence in 26 countries 4 new locations in 2007 • South Korea • Office opened in April 2007 • FX products and currency swaps • Local presence in fast growing market • Now operating in all major Asian financial centres • Malaysia • Acquisition of a 40% stake in a l
Slide 19: Operating profit rose by 37.6%
Operating profit rose by 37.6% Half year and yearly operating profit Yearly operating margin MCHF in current currency terms H2 160 150.1 H1 140 M 120 Operating margin 109.0 10.6% C H 100 F 9.5% 9% 80 61.9 60 40 20 6.8% 0 5% 2005 2006 2007 Operating profit improves from CHF 109.0m in 2006 to CHF 15
Slide 20: Focus on productivity and non compensation costs
Focus on productivity and non compensation costs Operating margin - 2007 bridge Productivity 15% 2007 / 2007 / 5.2% 2006 2005 Brokers staff +4% +8% 13% Productivity +16% +40% Brokers staff +6% +10% 0.3% 1.1% (underlying *) 11% 10.6% -0.2% 9.5% -4.1% -0.3% -0.6% 9% -0.3% - 1400 7% 1200 K 1000 C 800 H
Slide 21: Net profit group share up 37.1%
Net profit group share up 37.1% Half year and yearly Global positioning peer group overview – 07 net profit group share net profit group share growth yoy 84.6 80 55% 61.7 60 36% 37% 33% M C H 40 F 28.5 6.47% ** 20 -12% Deutsche ICAP (e) Tullett CFT GFI Börse Prebon * Estimates from Reuters Knowledge
Slide 22: Net profit of CHF 84.6m
Net profit of CHF 84.6m Impact of change of consolidation method and disposal of non core businesses 2007 2006 % change MCHF Operating profit 150.1 109.0 +37.6 Net financial income 3.4 10.8 -67.9 Share of profit of equity accounted Yoy comparison impacted by change companies 12.9 0.1 - of consolid
Slide 23: Organic growth strategy reflected in the balance sheet
Organic growth strategy reflected in the balance sheet Simplified consolidated balance sheet MCHF 2007 2006 2007 2006 Shareholders’ equity 327.8 282.8 Of which Minority interests 36.0 30.4 Non-current assets 141.2 118.2 Non-current liabilities 41.2 36.3 Of which Financial debts 3.3 6.3 Of which Othe
Slide 24: CHF 244.5m of adjusted net funds
CHF 244.5m of adjusted net funds MCHF 2007 2006 Cash & cash equivalents 331.1 263.2 Financial assets @ fair value 30.1 5.2 Unavailable cash 19.9 15.5 Short term financial debt * -123.9 -81.9 Long term financial debt * -3.3 -6.3 Net funds 253.9 195.7 Adjustments linked to variances in AH & MP activit
Slide 25: 4. CFT share on SWX
4. CFT share on SWX 9s Compagnie Financiére Tradition
Slide 26: CFT share on SWX
CFT share on SWX Compagnie Financière Tradition shares Stock No. : 1,248,815 Listing : SWX Zurich No. of shares : 5,594,451* Nominal value : CHF 2.50 Free float : 34.09% * as of Dec 31, 2007 Next Release Q1 results 30 April 2008 25
Slide 27: Demonstrable track record on SWX
Demonstrable track record on SWX Long term performance Sector overview since 30 Dec 2002 & 1997 As of 29 Feb 2008 Ytd 6 months 12 months CFT -6% -2% -1% 5Y 10Y 28 oct 96* ICAP -13% 29% 34% CFT +182% +1110% +4770% Tullett Prebon 8% 21% 5% +20% GFI -20% 3% 24% SMI +63% +100% Deutsche Börse -23% 29% 39
Slide 28: 5. Strategic outlook
5. Strategic outlook Compagnie Financiére Tradition
Slide 29: Priorities going forward
Priorities going forward Continue to build size and scale • Primarily organically • As fast as possible to maintain/enhance competitive positioning • Market share & product scope opportunities • New geographies investigated • Monitoring current market environment Focus on margin • Margin expansi
Slide 30: Appendix
APPENDIX Compagnie Financiére Tradition
Slide 31: FX rates
FX rates vs CHF Closing rates Average rates 31 Dec 2007 full year 2007 GBP 2.26 2.40 USD 1.12 1.20 EUR 1.65 1.64 30
Compagnie Financière Tradition — FY2007 Earnings Presentation on 6ix