BM&FBOVESPA. Investor Relations Department

Transcription

1 BM&FBOVESPA Investor Relations Department December

2 Forward Looking Statements This presentation may contain certain statements that express the management s expectations, beliefs and assumptions about future events or results. Such statements are not historical fact, being based on currently available competitive, financial and economic data, and on current projections about the industries BM&FBOVESPA works in. The verbs anticipate, believe, estimate, expect, forecast, plan, predict, project, target and other similar verbs are intended to identify these forward-looking statements, which involve risks and uncertainties that could cause actual results to differ materially from those projected in this presentation and do not guarantee any future BM&FBOVESPA performance. The factors that might affect performance include, but are not limited to: (i) market acceptance of BM&FBOVESPA services; (ii) volatility related to (a) the Brazilian economy and securities markets and (b) the highly-competitive industries BM&FBOVESPA operates in; (iii) changes in (a) domestic and foreign legislation and taxation and (b) government policies related to the financial and securities markets; (iv) increasing competition from new entrants to the Brazilian markets; (v) ability to keep up with rapid changes in technological environment, including the implementation of enhanced functionality demanded by BM&FBOVESPA customers; (vi) ability to maintain an ongoing process for introducing competitive new products and services, while maintaining the competitiveness of existing ones; (vii) ability to attract new customers in domestic and foreign jurisdictions; (viii) ability to expand the offer of BM&FBOVESPA products in foreign jurisdictions. All forward-looking statements in this presentation are based on information and data available as of the date they were made, and BM&FBOVESPA undertakes no obligation to update them in light of new information or future development. This presentation does not constitute an offer to sell or the solicitation of an offer to buy any securities, nor shall there be any sale of securities where such offer or sale would be unlawful prior to registration or qualification under the securities law. No offering shall be made except by means of a prospectus meeting the requirements of the Brazilian Securities Commission CVM Instruction 400 of 2003, as amended. 2

3 HISTORY, BUSINESS MODEL AND CORPORATE GOVERNANCE BRAZILIAN MARKET OPPORTUNITIES MAIN GROWTH INITIATIVES OPERATIONAL PERFORMANCE FINANCIAL HIGHLIGHTS APPENDIX (includes results for 3Q13) 3

4 HISTORY, BUSINESS MODEL AND CORPORATE GOVERNANCE Safety, resilience and transparency 4

5 History of BM&FBOVESPA Important global exchange 1890: Foundation of Bolsa Livre (BOVESPA's predecessor) 1967: BOVESPA s Mutualization Aug 2007: BOVESPA Hld demutualization Oct 2007: BOVESPA Hld IPO (BOVH3) 1986: Start of BM&F activities Sep 2007: BM&F demutualization Nov 2007: BM&F IPO (BMEF3) May 2008: integration between BM&F and BOVESPA Hld and creation of BM&FBOVESPA (BVMF3) MARKET CAPITALIZATION (US$ billion) AND OPERATING MARGIN (%) ¹12M to Jun. 28, 2012; ²12M to Mar 31, 2012 (Mar 31, 2013 for JPX); ³9M to Sep. 30, Source: Bloomberg (Nov. 29, 2013). 5

6 Vertical model as a differential Value gained across most of the chain VALUE CHAIN PRE-TRADING TRADING POST-TRADE Risk Analysis Access Risk Analysis (DMA) Trade Allocation Transfer Clearing/risk analysis Settlement Position/ Collateral Depository Auxiliary Services Vertically integrated Trading Platform: equities, derivatives, government and corporate bonds, funds, spot FX, among others Post-Trade Platform: Central Counterparty (CCP) : An entity that interposes itself between operations or contracts, becoming the guarantor of all business Settlement System (SSS): system that allows the transfer of securities or assets from investors, in which the transfer may be free or against payment Services for issuers and brokers Listing (stocks, funds, corporate bonds, securitization, among other) Trading access (brokers) Securities Lending Custody for clubs and foreign investors (2.689 account) Market Data (vendors) Indices Licensing Software Licensing OTC (derivatives and fixed income) Commodities certification Central Depository (CSD): performs centralized asset custody and treatment of corporate actions (dividends, stock splits, etc.) 6

7 Vertical model as a differential BM&FBOVESPA present at all post-trade stages BRAZIL (Internalization of orders is forbidden) US (Internalization of orders is allowed) Trading Trading Venues DTCC Brokers A and B Brokers A and B Broker A Broker B Post trade CCP SSS CSD Investors Investors Investors Investors Model 100% vertical: clearing, settlement and central depository at the final beneficial owner level Brokers settle positions and control their clients portfolios through BM&FBOVESPA s infrastructure (impact on post-trade fees) Clearing, settlement and custody occur at the brokerage houses Each prime broker has its own structure to control its customers portfolios and settle positions (impact on the prime broker s costs) 7

8 Brazilian market regulatory framework Resilience and safety as priorities Brokerage houses & investors Regulations prohibit internalization of orders, dark pools and ATS/MTFs and simultaneous exchange/otc equities trading Settlement and clearing of equities trading must be done through a CCP Settlement and clearing at the final beneficial owner level make the Brazilian market safer and more resilient Trading Post-Trade Under the prevailing regulations, potential competitors must provide an integrated solution with the same status regarding rules and transparency In Brazil the final investor pays the exchange: compared to other markets we have a competitive all-in-cost, as BM&FBOVESPA provides more services than other exchanges Naked access is not allowed Naked short selling is not possible 8

9 Corporate Governance Multidisciplinary knowledge in conducting business BOARD OF DIRECTORS Pedro Parente (Chairman) Independent Director, CEO of Bunge Brasil Marcelo Trindade (Vice Chairman) Independent Director, lawyer Alfredo Antônio Lima de Menezes Non Executive Director, Executive Officer of Bradesco André Esteves Non Executive Director, CEO of BTG Pactual Candido Bracher Non Executive Director, CEO of Itaú BBA Charles Carey Independent Director, Director of CME Group Claudio Haddad Independent Director, engineer and professor José Berenguer Neto Non Executive Director, CEO of JP Morgan Brazil José Roberto Mendonça de Barros Independent Director, economist and professor Luiz Fernando Figueiredo Independent Director, Co-Founder of Mauá Investments Luiz Nelson Guedes De Carvalho Independent Director, professor EXECUTIVE OFFICERS Edemir Pinto CEO Eduardo Guardia Chief Product / IRO Cícero Vieira COO Daniel Sonder CFO Luis Furtado CIO COMMITTEES Audit Committee Nominations and Corporate Governance Committee Compensation Committee Risk Committee Advisory Committee For The Securities Intermediation Industry 9

10 Ownership structure Widely-held shareholder base 2.4% 5.3% 5.2% 5.1% 6.6% Funds managed by BlackRock, Inc. Funds managed by OppenheimerFunds, Inc. CMEG Brasil I Participações Ltda. Funds managed by Vontobel Asset Management Inc. Other 75.5% Treasury stock GM of Apr. 15, 2013 Number of individual shareholders 55,108 Number of institutional shareholders 3,580 Total number of shareholders 58,688 Free float (ON) 1,929,265,010 (97.4%) 10

11 BRAZILIAN MARKET OPPORTUNITIES Main growth drivers 11

12 Opportunities in the Brazilian market BM&FBOVESPA prepared to capture future growth GROWTH DRIVES CAPITAL MARKETS WILL HAVE CENTRAL ROLE IN THE COMING YEARS 27.4% Investment needed to promote growth National savings still highly concentrated in fixed income Fall of interest rates in real terms Total Credit/GDP Evolution in Brazil (%) EQUITIES MARKET Porfolio diversification => opportunity for diversification of investments of institutional investors in equities more resources being directed into equities more listed companies DERIVATIVES MARKET more credit and more in fixed-rate government debt => more demand for hedging from financial institutions more foreign trade => higher volumes in FX contracts stock market growth, the launch and development of ETFs and more exposure to equity among institutional investors => growth in Index-based contracts 55.4% Selic Interest Rate (% p.a.). Jan-07 to Nov Source : Central Bank of Brazil. * For Brazil, considers only bank credit

13 Capital Market Great opportunities in the equities and derivatives segments Jan-05 Jul-05 Jan-06 Jul-06 Jan-07 Jul-07 Jan-08 Jul-08 Jan-09 Jul-09 Jan-10 Jul-10 Jan-11 Jul-11 Jan-12 Jul-12 Jan-13 Jul-13 NUMBER OF CUSTODY ACCOUNTS (thousand) Number of retail investors represents only 0.3% of the population (lower than global average) INVESTMENT FUNDS Funds AUM evolution (in BRL billion). Global average of 40% for equities Jan' Nov' Equities 1,925 1,301 1,513 1,703 1,787 Fixed Income 1,375 18% 18% 15% 1,070 22% % 14% % 11% 11% 11% 2,189 2,344 14% 13% Q13 LISTED COMPANIES Lower number of listed companies in comparison with other countries PENSION FUNDS Participation of equities in the portfolio of pension funds 6,856 4,916 4,041 3,972 3,481 3,200 2,767 2,056 1, % Fixed Income and Others Equity % 29% 30% 31% % 33% 33% 37% 28% % 29% India USA China/HK Canada Japan Spain UK Australia Korea Brazil Source : BM&FBOVESPA, ANBIMA, WFE (Dec-12) and ABRAPP. *Updated to Jun/13 *

14 MAIN GROWTH INITIATIVES Investments, new products and focus on the customer 14

15 Update of strategic projects PUMA Trading System - Multi-Asset Trading Platform A high-performance, high-speed and high-capacity electronic trading platform RTT (Round Trip Time) of less than one millisecond Derivatives and FX module: implemented in Oct/11 Equities module: implemented in Apr/13 Clearinghouses integration The integration of BM&FBOVESPA s clearinghouses will enhance the Company s competitive position Development of the new risk architecture (CloseOut Risk Evaluation - CORE)* will increase allocation efficiency for clients Tests for derivatives started in Jul/13, with conclusion scheduled for Mar/14 ibalcão OTC Registration Platform Registration of OTC derivatives and fixed income securities Deployment in Jul/13 (for FX non-deliverable forward no central counterparty) Pricing Policy Changes for Cash Equities First phase (Apr/13): reduction from 0.7 bps to 0.5 bps in trading fees and a realignment between the trading fees and post-trade fees of institutional investors and day traders Second phase (Dec/13): increased discounts per tier of volume for day traders and a progressive reduction of trading fees per tier of global volume Initiatives for Small and Medium Enterprises (SMEs) Establishment of the Technical Committee for Smaller Offerings composed of private sector and government agencies Developing proposals to facilitate capital raising through issuance of shares (incentives to SMEs, investors and intermediaries) Project was presented to the Ministry of Finance in Jul/13 *IPN/CORE implementation requires the authorization of the regulators. 15

16 BM&FBOVESPA IT Developments Building a world-class IT platform Increasing competitive differentiation for derivative and cash equity markets LATENCY BM&F Segment (derivatives) Core of the system (average latency milliseconds) ~1 ~1 <1 Latency has been dramatically reduced Standard deviation of latency has been reduced by more than BOVESPA Segment (equities) Core of the system (average latency milliseconds) < MACRO VIEW: PERFORMANCE OF CO-LOCATION Co-location Infrastructure of PUMA Trading System Participant Network Gateway + LiNe Matching Engines ~200 µs ~500 µs ~300 µs ~1000 µs Network Infra¹ Gateway² + LiNe Matching Engines³ Networks built for the development and deployment of PUMA platform Pre-trade risk control (LiNe) represents about 60% of Gateway + LiNe latency Meet all auction rules and bands/fluctuation limits set out in regulations (100% of orders) 16

17 Clearinghouses Integration Further differentiation in BM&FBOVESPA post-trade Derivatives (BRL bn*) Equities and corporate debt (BRL 76.5 bn*) FX (BRL 4.9 bn*) Securities (BRL 0.8 bn*) Financial and commodities derivatives (futures, options and forwards) OTC derivatives Equities, ETFs and corporate fixed income cash market Equity and indices derivatives (options and forward) Securities lending FX spot market (US$ vs. BRL ) Cash market and forward market for government bonds INTEGRATED CLEARINGHOUSE** = Capital efficiency * Aggregate of pledged collateral at our clearinghouses totaled BRL billion in Sep 30, **IPN/CORE implementation requires the authorization of the regulators. 17

18 Product and Market Development Listed products, OTC and fixed income LISTED PRODUCTS ETFs (exchange traded funds): Equities, fixed income, international and real estate funds Market maker: cash equities, options, commodities, futures Ibovespa: methodology review SMEs (small and medium enterprises): BOVESPA Mais Incentive programs: retail investors Selic derivatives: Selic futures (OC1), FX spread (DCO), FX swap (SCS) Options on single stocks: New fee policy for HFTs/day traders Futures Contracts: Ethanol BDRs: To Exchange from OTC Securities Lending: BTC platform ibalcão PROJECT Derivatives Registration: NDFs: deployed in Jul/13 Flexible options on single stocks COE: Structured Notes Swaps Fixed Income Registration: LCAs (Agribusiness Credit Bill): improvements LCIs (Real Estate Credit Bill) and CDBs (time deposits): adaptation of the platform (pending regulatory approval) Corporate bonds and LFs (financial bills): changes to listing rules and procedures Trade of Fixed Income: Trading platform for government and corporate bonds and changes to the fee policy 18

19 High growth products Growing sophistication of market participants Initiatives to develop and prompt higher volume in certain products; Performance shows that the initiatives are being well received by the market. Options with Market Maker (ADTV in BRL million) +47.1% Real Estate Funds (FIIs) (ADTV in BRL million) CAGR(09-13): % Securities Lending (Open Interest - average for the period - in BRL billion) CAGR (09-13): +33.9% ADTV before Market Maker ADTV after Market Maker* * ETFs Brazilian Treasury Direct - Tesouro Direto Agribusiness Credit Bills (ADTV in BRL million) CAGR (09-13): +53.1% (Custody in BRL billion) CAGR (09-13): +35.2% (AUM in BRL billion) BM&FBOVESPA has a 74% market share of the registered AUM (Sep-13) * *Updated to Nov 29, **Updated to Sep. 30, * * Sep-13 19

20 OPERATIONAL PERFORMANCE Records in

21 BOVESPA Segment Operational highlights AVERAGE DAILY TRADING VOLUME ADTV (BRL billion)* * AVERAGE ANNUAL MARKET CAP (BRL trillion) TURNOVER VELOCITY** (12 months average*) % 29.4% 36.8% 37.6% 38.7% 42.3% 70.0% 73.5% 66.6% 63.2% 64.2% 56.4% 63.8% * * *Updated to Nov 29, **Ratio of cash market trading volume to the market cap of the exchange. 21

22 Trading in ADRs of Brazilian companies Liquidity migration process interrupted Jan-13 Feb-13 Mar-13 Apr-13 May-13 Jun-13 Jul-13 Aug-13 Sep-13 Oct-13 Nov-13 Novo Mercado Launch (Dec. 2000) End of CPMF (Financial Transaction Tax) Sarbanes-Oxley Act (Jul. 2002) End of IOF Tax (2%) for foreign investors (Dec. 2011) Nov % 9.6% 35.0% 31.5% 33.5% 65.0% Other USA Venues - Brazilian ADRs BM&FBOVESPA - companies with ADRs NYSE - Brazilian ADRs BM&FBOVESPA (except companies with ADRs) Source: Bloomberg (in USD traded value of 35 companies with ADRs programs ) PUBLIC OFFERINGS IN NUMBER OF COMPANIES Total IPOs Follow ons Total Dual Listings *Updated to Nov. 30,

23 BM&F Segment Operational highlights AVERAGE DAILY TRADED VOLUME ADV (thousands of contracts) 1,167 1,740 1,573 1, ,630 2,694 1,684 1,797 1,926 1,954 2,235 2,994 1,747 1,856 1,977 1,561 2,505 2,701 2,899 2,904 2,653 2,856 2,410 3,591 3,166 3,658 3,980 3,290 2,443 2,835 2,182 2,116 2, ,519 1,713 1,239 1,209 1, * Nov-12 Dec-12 Jan-13 Feb-13 Mar-13 Apr-13 May-13 Jun-13 Jul-13 Aug-13 Sep-13 Oct-13 Nov-13 BRL Int. Rate (Thousands) FX (Thousands) Index (Thousands) Others (Thousands) REVENUE PER CONTRACT - RPC (BRL) * N-12 D-12 J-13 F-13 M-13 A-13 M-13 J-13 J-13 A-13 S-13 O-13 N-13 Interest rates in BRL 0,906 0,950 1,141 0,979 0,889 0,918 1,004 1,035 1,044 1,037 1,032 1,013 1,037 0,945 0,843 1,099 1,067 1,112 1,222 1,203 1,115 FX rates 2,244 1,859 2,065 2,161 1,928 1,894 2,205 2,511 2,370 2,453 2,368 2,305 2,273 2,292 2,347 2,590 2,691 2,731 2,720 2,624 2,611 Stock Indices 1,419 1,501 2,145 1,620 1,564 1,614 1,524 1,733 1,400 1,981 1,547 1,974 1,413 1,846 1,408 1,867 1,590 1,938 1,656 1,816 1,664 Interest rates in USD 1,094 0,965 1,283 1,357 1,142 0,941 1,015 1,220 1,164 1,152 1,073 1,140 1,121 1,093 0,928 1,280 1,370 1,309 1,412 1,246 1,359 Commodities 4,749 3,195 3,587 2,307 2,168 2,029 2,239 2,519 2,485 3,360 2,449 2,415 2,382 2,349 2,550 2,595 2,632 2,385 2,766 2,613 2,430 Mini contracts 0,034 0,054 0,162 0,176 0,128 0,129 0,116 0,119 0,107 0,112 0,120 0,122 0,119 0,118 0,116 0,119 0,114 0,117 0,126 0,120 0,120 OTC 1,571 2,111 2,355 1,655 1,610 1,635 1,769 1,458 1,711 2,475 1,988 2,868 1,642 1,460 1,428 1,418 1,839 1,160 1,477 1,118 1,266 Total RPC 1,247 1,224 1,527 1,365 1,134 1,106 1,191 1,263 1,242 1,303 1,266 1,191 1,190 1,114 1,020 1,361 1,320 1,397 1,511 1,418 1,367 *Updated to Nov. 30,

24 Investor participation in volumes Equities and derivatives segments 12% 15% 17% 19% 20% 22% 23% 25% 25% 23% 25% 26% 26% 26% 25% 23% 25% 26% 25% 25% BOVESPA SEGMENT (EQUITIES) 12% 10% 10% 8% 7% 8% 9% 8% 8% 8% 9% 7% 9% 7% 8% 6% 9% 6% 6% 5% 33% 36% 35% 35% 34% 30% 35% 40% 43% 40% 41% 43% 42% 44% 44% 45% 42% 46% 44% 47% 27% 27% 30% 27% 26% 33% 33% 32% 33% 35% 33% 32% 32% 32% 33% 32% 34% 32% 33% 32% 25% 25% 23% 27% 31% 26% 21% 18% 15% 17% 16% 18% 15% 16% 13% 16% 14% 15% 15% 15% Jan-13 Feb-13 Mar-13 Apr-13 May- Jun-13 Jul-13 Aug-13 Sep-13 Oct-13 Nov Individuals Institutional Investors Foreign Investors Financial Institutions Companies Others BM&F SEGMENT (DERIVATIVES) 7% 7% 9% 8% 8% 4% 4% 5% 5% 4% 3% 4% 4% 4% 5% 6% 6% 6% 7% 5% 24% 25% 23% 23% 24% 30% 33% 34% 36% 38% 41% 38% 37% 32% 36% 35% 37% 33% 34% 34% 56% 51% 49% 48% 45% 42% 38% 34% 33% 33% 29% 31% 32% 37% 32% 34% 30% 32% 33% 34% Jan-13 Feb-13 Mar-13 Apr-13 May-13 Jun-13 Jul-13 Aug-13 Sep-13 Oct-13 Nov-13 Individuals Institutional Investors Foreign Investors Financial Institutions Companies Central Bank 24

25 FINANCIAL HIGHLIGHTS Reduction in expenses. Return to shareholders 25

26 Income Statement History SUMMARY OF INCOME STATEMENT (CONSOLIDATED) (in BRL thousand) Net revenue 1,510,569 1,898,742 1,904,684 2,064,750 Expenses (569,832) (633,504) (816,664) (763,080) Adjusted expenses (446,677) (543,881) (584,521) (563,487) Operating income 940,737 1,265,238 1,088,020 1,301,670 Operating margin 62.3% 66.6% 57.1% 63.0% Equity method result - 38, , ,270 Financial result 245, , , ,851 Income before taxation of profit 1,186,574 1,592,515 1,588,210 1,659,791 Income tax and social contribution (304,505) (448,029) (539,681) (585,535) Net income* 881,050 1,144,561 1,047,999 1,074,290 Adjusted net income 1,223,761 1,586,374 1,545,627 1,612,136 Adjusted EPS (BRL ) *Attributable to shareholders of BM&FBOVESPA. 26

27 Revenue and Expense breakdowns Diversified revenue sources as a differential, costs under control REVENUE BREAKDOWN (3Q13) EXPENSE BREAKDOWN (3Q13) Gross Revenue: BRL 596.8MM Expense: BRL 194.1MM 27

28 Adjusted Opex¹ and Capex Budgets Focus on cost control and investments phase ADJUSTED OPEX Focus on cost control: in 2013, the effects of inflation will be neutralized by efficiency gains E: Adjusted expenses decreasing in real terms (CAGR of 1.6% p.a.²) 2013 Budget: BRL 560 million-580 million, the same range as in 2012 (in BRL million) CAPEX E 2013 Budget: BRL 260 million-290 million Investments between 2010 and 2014 in several projects (in BRL million) 1 Adjusted by depreciation, stock option program, tax on dividends from CME Group and provisions. ² Expenses growth considering the mid-point budget for 2013 (BRL 570 million) and inflation CAGR ( ) of the inflation is 5.8% p.a. Source: BCB Focus Bulletin (Nov. 30, 2012) - estimated IPCA. 28

29 Growth Path Growth in business and results GROWTH IN ADJUSTED EARNINGS PER SHARE (in BRL) GROWTH IN REVENUES AND RESULTS (in BRL million) 29

30 Financial Highlights Focus on cash generation and total shareholder return HISTORY OF PROCEEDS (in BRL million) 80% 3.4% % 87% 4.5% 4.5% 1, % 4.8% 1, SHARE BUYBACK: MAXIMIZING RETURN Dividends Interest on capital Dividend Yield* Payout ratio (%) (in BRL millon) 1,224 1,586 1,546 1,612 Adj. Net income 881 1,145 1,048 1,074 Net income 8.3% 9.4% 8.4% 8.9% ROIC ,579 1, , , , Total payout Buyback *Dividend Yield is the result of the sum of earnings per share distributed during the year divided by the average share price during the year. ROIC: Return on Invested Capital. 30

31 Financial Soundness High liquidity and low indebtedness Sound financial position - an important factor for the Company, given its role as CCP, guaranteeing the settlement of trades executed by global and Brazilian investors SOUND FINANCIAL POSITION R$ million Dec/10 Dec/11 Dec/12 Sep/13 CASH POSITION R$ million Available funds 1,677 1,582 1,964 1,960 Indebtedness 1,043 1,172 1,279 1,375 Standard & Poor s BBB+ (counterparty credit rating) A-2 (issuer) Moody s A3 (global scale issuer) A3 (Brazilian local currency issuer) Baa1 (global notes) *Includes collateral pledged by participants in the form of cash, receivables and rights in securities under custody, as well as payouts still undisbursed. **Includes third party collateral and restricted funds at BM&FBOVESPA Settlement Bank (Banco BM&FBOVESPA). 31

32 APPENDIX 32

33 Financial Highlights P/E analysis Since 2009, the goodwill tax benefit has been recognized as deferred liability (being cash neutral), reducing the GAAP earnings Tax Book in 2012 Simulation Current without goodwill R$ millions EBT¹ 1,511 1,511 (-) Goodwill amortization 1,586 - (-) Interest on capital (2) (=) Taxable earnings (165) 831 Tax (34%) (56) 282 GAAP Book in 2012 Simulation without Current R$ millions goodwill EBT¹ 1,511 1,511 Deferred Tax Other taxes /credits (14) - Total taxes GAAP Net income 1,074 1,228 Δ: 14.2% EPS 2012 P/E 3 Estimated GAAP EPS (A) Earnings without goodwill = (A) x Δ:1, Stock price discounted by goodwill NPV (R$1.00 per share) / Earnings without goodwill Adjusted Earnings % impact on P/E multiple Difference between GAAP EPS and the EPS adjusted to non existence of goodwill simulation Different earnings impact the P/E calculation and distort comparisons and market consensus The reported adjusted net income reflects better the company s cash generation 1 Excludes the investment in associate (CME Group) accounted under the equity-method. 2 Simulates the Interest on Capital amount that would be approved if there was no goodwill tax benefit; 3 Stock at R$13.79 (March 12 th, 2013). 33

34 BOVESPA Segment Raising Capital PUBLIC OFFERINGS (BRL billion) Updated to Nov 29, PIPELINE: OFFERINGS ANNOUNCED SO FAR TO THE MARKET There are 4 offerings in the pipeline IPOs (2): Ouro Verde Locação e Serviço; Unidas; Follow-ons (2): Fras-le ; Via Varejo Additionally, there are 12 Real Estate Funds filed with CVM: estimated value of R$ 4.2 billion * Excludes the portion acquired by the Brazilian government in the Petrobras offering, via the transfer of rights in barrels (BRL 74.8 billion). 34

35 BOVESPA Segment Foreign investment flow MONTHLY NET FLOW OF FOREGIN INVESTMENTS (in BRL billon) Includes public offering (primary market) and regular trades (secondary market). *Updated to Nov. 29,

36 BOVESPA Segment Potencial to increase the number of listed companies MARKET CAPITALIZATION TO GDP (%)* % 174% 151% 158% 129% 137% 136% 126% 121% 119% 129% 111% 117% 119% 110% 109% 109% 107% 104% 105% 100% 89% 87% 85% Hong Kong : 438% 481% 365% 421% 138% 129% 124% 96% 100% 87% 75% 75% 76% 80% 70% 72% 72% 67% 69% 60% 62% 57% 55% 55% 50% 49% 46% 44% 44% 45% 39% 35% Cingapura Canadá Chile EUA Coréia Austrália Japão França Índia Brasil Inglaterra China México * Source: World Bank MARKET CAPITALIZATION BY ECONOMIC SECTOR Dec % 15.7% Dec % 11.2% 14.3% 11.5% 21.6% 8.8% 2.2% 5.1% 11.1% 0.3% 2.6% 8.6% 2.5% 3.6% 5.5% 0.4% 5.4% 20.4% Oil, Gas and Biofuels Basic Materials Capital Goods and Services Construction and Transportation Consumer Non Cyclical Consumer Cyclical Information Technology Telecommunications Public Utilities Financial 36

37 High Frequency Trading (HFT) BOVESPA SEGMENT: HFT ADTV* (BRL million) AND MKT. SHARE 15.2% 13.4% 10.3% 10.3% 6.1% 7.4% 8.5% 9.4% 9.8% 9.9% 10.6% 10.7% 1,883 1,800 1,818 1,592 1, ,329 1,312 1,369 1, , , , ,160 1, Q11 2Q11 3Q11 4Q11 1Q12 2Q12 3Q12 4Q12 1Q13 2Q13 3Q13 4Q13* ADTV (Foreigners) ADTV (Individuals) ADTV (Institutionals) % of overall market BM&F SEGMENT: HFT ADV* (thousands of contracts) AND MKT. SHARE 3.9% 5.0% 7.8% 7.3% 8.0% 6.3% 6.7% 5.7% 5.0% 6.0% 8.7% 9.2% Q11 2Q11 3Q11 4Q11 1Q12 2Q12 3Q12 4Q12 1Q13 2Q13 3Q13 4Q13* *Updated to Nov. 29, Mini FX Equities Other % overall volume 37

38 Regulatory Framework STOCK EXCHANGE ACTIVITY CVM Instruction 461 of Oct. 23, 2007 Regulates the security markets and decides on the formation, organization, operation and dissolution of stock exchanges, futures and commodities exchanges and OTC markets Establishes the organization and minimal corporate governance structure of organized market management bodies Establishes self-regulation activities of the in the organized market management bodies CLEARINGHOUSES ACTIVITIES Law of Mar. 27, 2001 Clearinghouses considered systemically important by the BCB should ensure settlement (i.e., act as CCPs) BCB Resolution of Aug. 30, 2001 Clearinghouses shall guarantee, at least, settlement of the highest net amount owed Access criteria must be public and allow wide participation Circular BCB of Aug. 31, 2001 Rules, manuals and safeguard mechanisms must be approved by BCB Maintenance of a secondary data center and contingency procedures Supervision by BCB CVM Instruction 441 of Nov. 10, 2006 Securities lending with guaranteed settlement - final beneficiary model 38

39 BM&FBOVESPA Market Supervision (BSM) Self-Regulation Entity BSM is is a not-for-profit association organized as a self-regulatory and market surveillance organization, responsible for regulatory and oversight activities relative to the markets we operate. Main activities of BSM Monitor 100% of the participants transactions Assess 100% of intermediaries Enforcement Education Atribuições da BSM estabelecidas na BSM Instrução duties established CVM 461/2007: in CVM Instruction 461/2007 Monitor and supervise transactions in the organized markets Determine deficient compliance with the rules and norms Monitor the activities of the Stock Exchange Initiate and prosecute disciplinary administrative legal proceedings Apply penalities Audit * 9 independent Organizational chart Supervision Board (12 members*) Self regulation Officer Market supervision Strategic Committee Legal dept. Analysis and strategy 39

40 BM&FBOVESPA s Sustainability Policy Approved by the Board of Director 40

41 RESULTS FOR 3Q13 41

42 3Q13 vs. 3Q12 Highlights Solid results despite the challenging environment FINANCIAL HIGHLIGHTS Total revenue: R$596.8 million, +2.7% BOVESPA seg.: R$257.1 million, -2.4% BM&F seg.: R$228.6 million, +4.3% Other revenue: R$111.0 million, +12.5% Net revenue: R$535.4 million, +2.6% Adjusted expenses¹: R$150.2 million, +10.4% Operating income: R$341.3 million, -1.6% Adjusted net income²: R$403.7 million, +0.8% Adjusted EPS: R$0.211, +1.7% Dividends: payment of R$225.3 million in 3Q13, R$0.118 per share (80% of GAAP net income) EBITDA: R$417.1 million, +2.2% and margin of 77.9% (according to CVM Rule 527/12 that does not exclude equity method accounting). 1 Expenses adjusted to Company s depreciation, stock options plan, tax on dividends from the CME Group and provisions. 2 Net income adjusted by: i) the effect of deferred liability recognition in connection with temporary differences from amortization of goodwill for tax purposes; ii) the impact of the stock options plan; iii) investment in affiliates (CME Group) accounted for under the equity method, net of taxes; and iv) taxes paid overseas to be compensated. OPERATIONAL HIGHLIGHTS BOVESPA segment: ADTV: R$7.2 billion, +0.8% Margin: bps, -6.4% BM&F segment: ADV: 2.5 million contracts, -7.5% RPC: R$1.404, +10.6% High growth products and market segment: Securities Lending: +26.0% average of open interest LCAs (agribusiness credit bills): assets registered % (R$73.8 billion in Sep/13) HFTs: volumes increased 32.8% in the Bovespa Segment and 19.6% in the BM&F segment MAIN PROJECTS AND UPDATES Ibovespa: new methodology announced in Sept/13 Changes in options fee policy: volume discounts for all day trade transactions in the options on single stock market, in line with the change announced for cash equity in Mar/13 Fixed income fee policy: changes regarding new issuances analysis, custody, account maintenance and trading SMEs: proposals for developing the access market 42

43 BOVESPA Segment Performance Flat ADTV despite the challenging environment AVERAGE DAILY TRADING VALUE (ADTV) AND TRADING MARGIN 3Q13 vs. 3Q12: ADTV: R$7.2 bn (+0.8%): Increased turnover velocity, which reached 73.7% 32.8% increase in HFTs volumes 2.2% decrease of average market capitalization Margin: bps vs (-6.4%): Lower fees from options on single stocks, reflecting higher volumes of market makers Higher participation of HFTs in the overall ADTV 3Q12 4Q12 1Q13 2Q13 3Q13 ADTV (R$ billions) Margin (bps) TRADING MARGIN (in basis point - bps) AVERAGE MARKET CAP. AND TURNOVER VELOCITY Market 3Q13 3Q12 Cash market Derivatives on single stocks Options Market Forward Market Total BOVESPA

44 BM&F Segment Performance Higher RPC offsets volumes fall AVERAGE DAILY VOLUME (ADV) AND AVERAGE REVENUE PER CONTRACT (RPC) 3Q13 vs. 3Q12: ADV: 2.5 million contracts (-7.5%): -15.4% ADV of Brazilian Real interest rate contracts, +8.8% ADV of FX contracts and +22.3% ADV of minisized contracts RPC: +10.6% (mix effect and FX rate appreciation): Brazilian Real interest rate: lower participation in overall volume; and higher RPC (+4.8%) due to lengthening of contracts FX and USD Interest rate contracts (+12.4% and +25.0%, respectively): FX rate appreciation (USD/R$) REVENUE PER CONTRACT AND FX RATE (in R$) ~45% of derivatives revenue was priced in USD in 3Q13 (in millions of contracts) INTEREST RATES IN R$ - ADV BY MATURITY (in millions of contracts) * Average FX rate (R$/US$) in the quarter, considering the closing price for each month. 44

45 Revenue Breakdown in 3Q13 Diversified revenue sources as a differential REVENUE BREAKDOWN CASH MARKET TRADING REVENUE ACCOUNTED FOR 6.2% OF TOTAL DERIVATIVES REVENUES (BM&F + BOVESPA) ACCOUNTED FOR 42.2% OF THE TOTAL 20.2% 6.2% 37.6%: Cash Market¹ 6.2%: Trading 31.4%: Post-Trade 4.6%: Stock and Indices Derivatives 2 2.8% 2.3% 14.4% Total Revenue R$596.8 million 18.1% 4.6% 31.4% ¹Revenue breakdown for the cash market (trading + post-trade) reflects the pricing policy changes which came into force in Apr/13. i) Reduction of trading fee to 0.5 bps from 0.7 bps for all investors ii) Post-trade increase to 2.0 bps from 1.8 bps for institutional investors and day trades 2 Trading and Post-trade 37.6%: Financial/Commodity Derivatives %: Brazilian Real interest rate contracts 14.4%: FX Contracts 2.3%: USD interest rate contracts 2.8%: Other Financial/Commodity Derivatives 20.2%: Other Revenues 4.3%: Securities Lending 5.1%: Depository, Custody and Back-Office 3.0%: Vendors 1.9%: Trading Access 2.0%: Listing 45

46 The Business Model Strengthens Resilience from diversified revenue sources Bovespa Segment new clients, products development and higher market sophistication Revenues in R$ millions CAGR % Revenues have been supported by a higher turnover velocity - HFTs - Options on single stocks - Securities lending activity - Strategies BM&F Segment credit expansion, volatility, FX rate changes and market sophistication Revenues in R$ millions CAGR % Revenues from the two most significant groups of contracts are growing consistently - Market sophistication, volatility and the recent currency depreciation Other revenue development of markets and new products and services Revenues in R$ millions CAGR % Revenues from selected products growing consistently - Sec. lending also complements cash, option and future markets - Tesouro Direto and LCAs as part of the Company s strategy in the fixed income market 46

47 3Q13 Expenses Continuous focus on cost control and operational efficiency TOTAL EXPENSE BREAKDOWN ADJUSTED EXPENSE (in R$ millions) Expense: R$194.1 million ADJUSTED EXPENSE INCREASED 10.4% OVER 3Q12 IN LINE WITH THE 2013 BUDGET (R$ MILLION) Adjusted Personnel: +16.9%, basically due to the effects of annual union bargain in Aug/13 and decrease in capitalized personnel costs related to ongoing projects. Data processing: +31.8%, due to higher expenses for services and maintenance of software and hardware that support IT platforms recently deployed. Third Party: -34.8%, due to lower costs with consulting and legal advisors. *Includes expenses with maintenance in general, marketing, communication, taxes adjusted by the dividends from CME Group, board and committee members compensation and others (excluding provisions). 47

48 Financial Highlights Returning cash to shareholders CASH AND FINANCIAL INVESTMENTS (In R$ millions) RETURN TO SHAREHOLDERS BUYBACK PROGRAM From Jul/13 to Oct/13, 13.1 million shares were repurchased, totaling R$158.9 million (more than 0.6% of the Company s capital stock) The current buyback program allows BM&FBOVESPA to repurchase up to 60 million shares until Jun/14. Market participant cash collateral includes R$0.7 billion pledged in the FX Clearinghouse that was settled on Oct 1st, FINANCIAL RESULTS Financial result of R$49.6 million, up 8.9% YoY Financial income up 16.9%, reflecting, basically higher interest rates Financial expenses rose 33.4%, reflecting the currency depreciation s impact on the interest of notes issued overseas PAYOUT Payment of R$225.3 million in dividends, equivalent to R$0.118 per share and 80% of GAAP net income Payment on Nov. 27, 2013 based on shareholders position dated Nov. 11, 2013 CAPEX In 3Q13, investments amounted to R$82.1 million, totaling R$202.5 million in 9M13 CAPEX budget ranges: 2013: between R$ million 2014: between R$ million (under review) *Includes collateral pledged by participants in the form of cash, receivables and rights in securities under custody, as well as payouts still undisbursed. **Includes third party collateral and restricted funds at BM&FBOVESPA Settlement Bank (Banco BM&FBOVESPA). 48

49 High growth products Increasing revenue diversification OPERATIONAL FIGURES REVENUE CAGR: +181% CAGR: +27% CAGR: +39% CAGR: +56% CAGR: +35% CAGR: +280% CAGR: +37% Strong revenue growth of selected products In 9M13, representing 7.6% of total revenue, or R$141.4 million Products well received by clients Continuous developments to maintain strong growth trend 49

50 Summary of Balance Sheet (Consolidated) ASSETS LIABILITIES AND SHAREHOLDERS EQUITY (in R$ millions) 9/30/ /31/2012 (in R$ millions) 9/30/ /31/2012 Current assets 3, ,536.3 Current liabilities 2, ,660.6 Cash and cash equivalents Collateral for transactions 1, ,134.2 Financial investments 2, ,233.4 Others Others Non-current liabilities 3, ,072.6 Non-current assets 21, ,610.8 Debt issued abroad 1, ,242.2 Long-term receivables 1, Deferred inc. tax and social contrib. 2, ,739.6 Financial investments Others Others Shareholders' equity 19, ,413.9 Investments 3, ,928.8 Capital 2, ,540.2 Property and equipment, net Capital reserve 16, ,037.4 Intangible assets 16, ,512.2 Others Goodwill 16, ,064.3 Non-controlling interests Total Assets 25, ,147.1 Liabilities and Shareholders' Equity 25, ,

51 Reconciliation 3Q13 ADJUSTED NET INCOME RECONCILIATION (in R$ millions, unless otherwise indicated) 3Q13 3Q12 * Attributable to BM&FBOVESPA shareholders. Change 3Q13/3Q12 2Q13 Change 3Q13/2Q13 GAAP net income* % % Stock options plan % % Deferred tax liabilities % % Equity in income of investees (net of taxes) % % Recoverable taxes paid overseas % % Adjusted net income % % ADJUSTED EXPENSES RECONCILIATION (in R$ millions, unless Change Change 3Q13 3Q12 2Q13 otherwise indicated) 3Q13/3Q12 3Q13/2Q13 Total Expenses % % Depreciation (32.5) (24.1) 35.0% (28.8) 12.8% Stock options plan (5.6) (7.8) -28.0% (7.8) -28.1% Tax on dividends from the CME Group (5.1) (4.7) 9.5% (5.1) 0.2% Provisions (0.6) (2.1) -70.5% (1.9) -66.5% Adjusted Expenses % % 51

52 Summary of Income Statement (consolidated) 3Q13 3Q12 Change 3Q13/3Q12 2Q13 Change 3Q13/2Q13 Net Revenues % % Expenses (194.1) (174.8) 11.1% (176.8) 9.8% Operating Income % % Operating margin 63.7% 66.5% -275 bps 70.5% -678 bps Equity in Income of Investees % % Financial Result % % EBT % % Net Income* % % Adjusted Net Income % % Adjusted EPS (in R$) % % Adjusted Expenses (150.2) (136.0) 10.4% (133.2) 12.8% * Attributable to BM&FBOVESPA shareholders. 52

53 Final Remarks REVENUES AND RESULTS Resilient revenues and results in a challenging market environment Growing diversification of products and revenues INVESTMENTS Commitment with the maintenance of market integrity Strengthening the competitive edge by delivering efficiency to the market FOSTERING CLIENTS AND MARKET Strengthening ties with market participants and clients Becoming a one-stop-shop by increasing the diversity of products for clients COMMITMENT TO CAPITAL RETURN FOR SHAREHOLDERS Maintained focus on cost control High payout ratio combined with share buyback 53

54 BM&FBOVESPA INVESTOR RELATIONS +55 (11) / 4418 / 4834 / 7073 / 4007/4702 [email protected] ir.bmfbovespa.com.br 54