2013 Preliminary Financial Results Presentation February 11 th, 2014 1
Table of contents Activity in 4Q.2013 3 Main events 4 Public offers 5 Trading activity 6 Financial results 7 Financial highlights 8 Analysis of the 4Q.2013 financial results 9 2013 Preliminary financial results 12 Financial position as of 31 December 2013 13 BVB share statistics 14 Q & A 2
Activity in 4Q.2013
Main events 15 October-14 November Fondul Proprietatea performed a second buy-back program for 4.35% of its own share capital through a tender offer, worth of RON 600 mn (approx. EUR 135 mn). 22-31 October The secondary IPO for the sale of shares in SNGN Romgaz SA held by the Ministry of Economy took place. A 15% stake was offered, structured as shares and Global Depositary Receipts (GDRs). The offer was structured in two tranches, one for the institutional investors and the other for retail investors, both being heavily oversubscribed (the retail tranche, for which information was made public, was 17 times oversubscribed). The offer ended successfully, with a total of RON 1.7 bn (approx. EUR 383 mn) being raised. 4 November The shares of SN Nuclearelectrica SA started trading at BVB, the Equities Segment, Tier 1 Shares. However, investors could have sold any shares subscribed during the IPO before they started trading at BVB, during October 4-28, when allocation rights attached to shares were traded. 12 November The shares of Romgaz started trading at BVB, the Equity Segment, Tier 1 Shares 15 November 4 December 12 December 4Q.2013 The European Bank for Reconstruction and Development (EBRD) sold its stake in Petrom via an accelerated book building through BVB, worth RON 385.7 mn (approx. EUR 87 mn) The shares of Romgaz and of Nuclearelectrica were included in BET, BET-XT, BET-BK and automatically in BET-NG and BET-C within the Index Committee meeting on BVB indices quarterly adjustment and rebalancing Fondul Proprietatea announced the finalization of the accelerated book building for the entire stake held in SNTGN Transgaz SA. The transaction, worth of RON 303.5 mn (EUR 68 mn), was executed through the Bucharest Stock Exchange 13 new series of turbo certificates issued by Erste Bank and 4 new series of turbo certificates issued by SSIF Broker started trading on BVB s Structured Products segment. These instruments had indices and shares (Fondul Proprietatea, Romgaz, Erste Bank) as underlying assets 4
Public offers Romgaz Value of public offers, shares (RON mn) A Landmark Transaction Across Numerous Metrics 2,420 Largest Romanian IPO ever Largest sector IPO in CEE since June 2010 Second largest listed company on the Bucharest Stock Exchange Shares offered: 15% stake sold by the Romanian State Date: 22-31 October 2013 Offer value: EUR 383 mn; RON 1.7 bn Offer structure: 2 tranches, as shares and GDRs, 85% for institutional investors, 15% for retail investors, with discounts 3% or 5% up, depending on the day of subscription 607 286 1 11 4Q.2012 1Q.2013 2Q.2013 3Q.2013 4Q.2013 Value of public offers, bonds (RON mn) 550 Share price for institutionals: 6.73 EUR/share; 30 RON/share Roadshow: 10 days Closed book for the institutional tranche 250 225 200 Oversubscription of 17.7 times for the retail tranche, which influenced the reallocation of retail tranche to 20% of the IPO 0 4Q.2012 1Q.2013 2Q.2013 3Q.2013 4Q.2013 5
Trading activity Trading value, shares, unit funds, rights (RON mn)* 2,608 164 Trading value, bonds (RON mn) 145 152 1,434 1,901 1,763 2,006 81 43 4Q.2012 1Q.2013 2Q.2013 3Q.2013 4Q.2013 4Q.2012 1Q.2013 2Q.2013 3Q.2013 4Q.2013 +13.4% 28.1 Average trading value regulated stock market (RON mn/day) 31.9 22.7 29.6 27.1 30.2 40.4 153 Trading value, structured products (RON mn) 187 132 119 93 2012 2013 4Q.2012 1Q.2013 2Q.2013 3Q.2013 4Q.2013 4Q.2012 1Q.2013 2Q.2013 3Q.2013 4Q.2013 NB: Figures are presented on a single counted basis and include Deal trades (for stocks and structured products); public offers are not included * Trading value for the regulated stock market, Rasdaq market and ATS, without public offers ** Public offers excluded 6
Financial results
Financial highlights Indicators (RON mn) 4Q.2013 3Q.2013 Change 4Q.2012 Change Net sales 10.64 4.74 124.6% 3.42 210.9% Profit and loss account Operating profit 4.81 1.05 359.8% -0.72 n.a. Financial profit 0.63 0.39 63.1% 0.16 304.8% Net profit 4.53 1.22 270.2% -0.43 n.a. Balance sheet (end of period) Performance indicators Shareholders equity 98.32 93.79 4.8% 94.60 3.9% Total assets 104.66 99.64 5.1% 97.98 6.9% Earnings per share (RON) 0.59 0.16-54.8% -0.06-32.1% Operating margin 45.2% 22.1% - n.a. - Net margin 42.6% 25.8% - n.a. - Shares and units 5,027 2,293 119.3% 1,435 250.3% Turnover* Bonds & government securities 281 377-25.5% 414-32.1% Total 5,308 2,670 98.8% 1,849 187.1% *Including DEAL trades and public offers NB: The individual financial results are not audited and are drawn up according to the Romanian Accounting Standards (RAS) 8
Financial highlights Indicators (RON mn) 2013 2012 Change Net sales 24.3 17.4 39,5% Profit and loss account Operating profit 8.4 4.1 106.0% Financial profit 3.2 6.0-46.4% Net profit 10.0 9.0 10.9% Balance sheet (end of period) Shareholders equity 98.3 94.6 3.9% Total assets 104.7 98.0 6.9% Earnings per share (RON) 1.30 1.17 10.9% Performance indicators Operating margin 34.6% 23.5% - Net margin 41.1% 51.8% - Shares and units 11,602 7,680 51.1% Turnover* Bonds & government securities 1,396 1,431-2.5% Total 12,998 9,111 42.7% *Including DEAL trades and public offers NB: The individual financial results are not audited and are drawn up according to the Romanian Accounting Standards (RAS) 9
Analysis of the 4Q.2013 financial results (1/3) Quarterly sales revenues, operating result and financial result (RON mn) 0.6 4.8 8 6 Quarterly net profit and net margin 56% 43% 80% 60% 0.2 1.1 0.7 1.1 1.9 0.4 1.0 3.4 4.1 4.8 4.7 10.6-0.7 4Q.2012 1Q.2013 2Q.2013 3Q.2013 4Q.2013 4 2 0-2 38% 26% 4.5 2.7 1.5-0.4 1.2 4Q.2012 1Q.2013 2Q.2013 3Q.2013 4Q.2013-13% 40% 20% 0% -20% Financial result Operating result Sales Net profit (RON mn) Net margin (%) Sales revenues reached RON 10.6 mn in 4Q.2013, 2.2 times higher than in the previous quarter and more than 3 times above the year-ago reported figure, due to public offers (mainly the IPO for Romgaz and the buy-back program of Fondul Proprietatea) and the upswing in trading volumes on the main market. 4Q.2013 was the best quarter since the beginning of 2008 in terms of trading value and BVB ranked second in CEE in terms of IPO proceeds over the analyzed period. The operating profit marked an almost 5-fold increase versus the previous quarter up to RON 4.8 mn. Operating expenses were also higher in 4Q.2013, but advanced at a lower pace than revenues, as the internal restructuring process continued and efforts to promote the local capital market intensified, with direct impact on marketing costs. The preliminary net profit reached RON 10.0 mn for the full year and RON 4.5 mn for the quarter. 10
Analysis of the 4Q.2013 financial results (2/3) Breakdown of operating revenues (RON mn) 0.13 0.43 0.36 Trading revenues for 4Q.2013 reached RON 9.7 mn, 142% higher compared to the previous quarter and 265% in y-o-y, albeit from a low base. The main driver for such increases were public offers, while day-to-day trading also generated a significant 30% increase in revenues. The shares market (including the DEAL segment but excluding public offers) had its best quarter since the beginning of 2008, with a total traded value of RON 2,608 bn, up by 30% q-o-q and an outstanding 82% y-o-y increase. 9.72 0.18 0.28 0.33 0.19 0.42 0.32 4.01 2.66 4Q.2012 3Q.2013 4Q.2013 Trading Listing Data vending Other revenues The largest public offers in 4Q.2013 were Romgaz IPO, worth of RON 1.7 bn (EUR 383 mn), and the share buy-back program of Fondul Proprietatea valued at RON 600 mn (EUR 135 mn) at the offer price. Two other deals, the sales of stakes held in Petrom by EBRD and Transgaz shares by Fondul Proprietatea, of a combined value of RON 690 mn (EUR 155 mn), also added to both the trading value and BVB s trading revenues. Towards the end of the year, Transelectrica issued its first tranche of bonds from a longer-term plan (until 2020), worth of RON 200 mn, thus becoming the third company to seek financing in 2013 through corporate bonds which were then listed on BVB. 11
Analysis of the 4Q.2013 financial results (3/3) Breakdown of operating expenses (RON mn) 0.60 0.32 0.09 0.22 0.45 1.02 2.08 0.19 0.18 0.44 0.61 2.23 0.47 0.71 3.03 Operating expenses reached RON 5.8 mn in 4Q.2013. They were driven mainly by the nonrecurring personnel expenses triggered by the internal restructured process, approx. RON 0.52 mn, other expenses related to management contracts, as well as by marketing and promotion costs on intensified efforts to increase visibility of the local market. Operating expenses were also impacted by the registration of provisions and of adjustments of part of BVB s receivables classified as doubtful. 0.21 0.50 0.17 0.26 0.20-0.07 4Q.2012 3Q.2013 4Q.2013 Provisions Depreciation Personnel costs Other operating exp. Functioning VAT and FSA fees Marketing 12
2013 Preliminary financial results Indicators (RON mn) Preliminary 2013 2012 Change Net sales 24.27 17.40 39.5% Operating revenues 24.40 17.45 39.8% Operating expenses 16.00 13.37 19.6% Operating profit 8.41 4.08 106.0% Financial profit 3.24 6.05-46.4% Pre-tax profit 11.65 10.13 15.0% Net profit 9.99 9.01 10.9% Breakdown of 2013 operating revenues Trading, 87.0% Other revenues, 2.5% Listing, Data 5.4% vending, 5.1% BVB ended 2013 with sales revenues of RON 24.3 mn, 40% above the figure reported for the previous year, mainly due to an upturn of trading revenues. Public offers run by the Romanian Government, cumulating approx. EUR 520 mn, played a major role. Moreover, accelerated book buildings, tender offers and other, most of them occurring during the second part of the year, also had a positive impact on trading revenues. Day-to-day trading registered a double-digit increase in trading activity, a 14% y-o-y increase of total turnover and a 13.4% y-o-y increase in average daily turnover. The average daily turnover on the main market, including DEALS, was RON 31.9 mn (without public offers). The operating profit reached RON 8.4 mn, more than double y-o-y. The financial profit declined by 46.4% y-o-y to RON 3.2 mn, as the two main sources of revenues, interest and dividends, declined significantly. BVB registered a full-year net profit of RON 10.0 mn, 10.9% higher than the 2012 figure, translating into earnings per share of RON 1.3. 13
Financial position as of 31 December 2013 Assets (RON mn) 31.12.2013 01.01.2013 Equity & Liabilities (RON mn) 31.12.2013 01.01.2013 Non-current assets 61.86 28.62 Shareholders equity 98.32 94.60 Current assets, of which: - cash, bank accounts and sh. term financial investments 42.69 37.45 69.30 64.98 Prepaid expenses 0.18 0.06 Payables, of which: - due in less than 1 year - due in more than 1 year 5.47 5.47 0 2.42 2.42 0 Provisions 0.27 0.27 Unearned revenues 0.66 0.69 Total assets 104.72 97.98 Total equity & liabilities 104.72 97.98 Non-current assets increased since the beginning of the year due to higher tangible assets and investments in long-term bonds with more attractive yields, as a response to the declining interest rate environment. Consequently, these assets were reclassified from cash & equivalents to non-current assets. The increase in tangible assets was determined mainly by the reversal of the provision registered for the full value of the land owned and by the registration of the positive difference resulted from the revaluation of the land to its fair value (RON 2.33 mn). These accounting operations were made after the litigation regarding BVB s property right on the land located on Mareșal Averescu Blvd. was finalized and BVB s right was recognized. Current assets registered a 38.4% decline, given the payment of dividends for 2012 and as long-term bonds were acquired and the amount was included in non-current assets. Cash and equivalents were RON 37.5 mn as at end-2013, of which 94% were invested in bank deposits. Shareholders equity increased by 3.9% since the beginning of the year due to the land revaluation (included in the revaluation reserve) and the profit registered during the year. 14
BVB share statistics
BVB share statistics 160 140 120 BVB share price performance vs. BET index & turnover in 2013 4.5 4.0 3.5 3.0 2.5 Symbol BVB ISIN ROBVBAACNOR0 Reuters ROBVB.BX Bloomberg BVB.RO Bloomberg BBGID BBG000BBWMN3 Share price (31 Dec) RON 32.5 (EUR 7.3) Market Cap (31 Dec) EUR 55.9mn Avg. daily turnover (2013) RON 268,255 (EUR 60,637) Outstanding shares 7,674,198 Free float 100% 2.0 Shareholders structure as at Dec 31, 2013 100 80 1.5 1.0 Romanian legal entities, 68.78% Romanian individuals, 17.41% 0.5 60 0.0 Foreign legal entities, 12.94% BVB Turnover (RON mn) BVB BET Foreign individuals, 0.86% 16
Q & A 17
Financial Calendar 4/24/2014-4/25/2013 GSM 4/28/2014 Meeting with analysts and investors 5/7/2014 1Q.2014 Results & Earnings Conference Call 8/7/2014 2Q.2014 Results & Earnings Conference Call 11/6/2014 3Q.2014 Results & Earnings Conference Call IR Contact Email: ir@bvb.ro Phone: +40.21.307.95.00 Fax: +40.21.307.95.19 Thank you SC BURSA DE VALORI BUCURESTI SA Bulevardul Carol I nr. 34-36, Etaj 13-14, Sector 2, 020922, Bucuresti, Romania Tel.: +40 21 307 95 00 Fax: +40 21 307 95 19 Website: www.bvb.ro E-mail: bvb@bvb.ro Registrul Comertului: J40/12328/2005 CUI: 17777754 Capital social, integral subscris si varsat: 76.741.980 lei Decizia CNVM Nr. 369 / 31.01.2006 THIS PRESENTATION WAS PREPARED BY BURSA DE VALORI BUCURESTI. THE INFORMATION CONTAINED IN THIS DOCUMENT HAS NOT BEEN INDEPENDENTLY VERIFIED AND NO REPRESENTATION OR WARRANTY EXPRESSED OR IMPLIED IS MADE AS TO, AND NO RELIANCE SHOULD BE PLACED ON THE FAIRNESS, ACCURACY, COMPLETENESS OR CORRECTNESS OF THIS INFORMATION. PAST PERFORMANCE IS NO GUARANTEE OF FUTURES RESULTS. THIS DOCUMENT DOES NOT CONSTITUTE AN OFFER OR INVITATION TO PURCHASE ANY SHARES. CERTAIN STATEMENTS CONTAINED IN THIS DOCUMENT MAY BE STATEMENTS OF FUTURE EXPECTATIONS AND OTHER FORWARD-LOOKING STATEMENTS THAT ARE BASED ON MANAGEMENT S CURRENT VIEWS AND ASSUMPTIONS AND INVOLVE KNOWN AND UNKNOWN RISKS AND UNCERTAINTIES THAT COULD CAUSE ACTUAL RESULTS, PERFORMANCE OR EVENTS TO DIFFER MATERIALLY FROM THOSE EXPRESSED OR IMPLIED IN SUCH STATEMENTS. EXCHANGE RATE USED FOR ADT IS THE DAILY EXHANGE RATE AS ANNOUNCED BY THE NBR. ACEASTA PREZENTARE A FOST REALIZATA DE BURSA DE VALORI BUCURESTI. INFORMATIILE CONTINUTE IN ACEASTA PREZENTARE NU AU FOST VERIFICATE DE CATRE O TERTA PARTE INDEPENDENTA, ASTFEL NU EXISTA NICIO GARANTIE SI NU TREBUIE LUATA CA ATARE ACURATETEA, CORECTITUDINEA SI COMPLETITUDINEA ACESTOR INFORMATII. PERFORMANÞA ANTERIOARA NU ESTE O GARANTIE A REZULTATELOR VIITOARE. ACEST DOCUMENT NU REPREZINTA O OFERTA DE A CUMPARA ACTIUNI. ANUMITE DECLARATII DIN ACEST DOCUMENT POT FI DECLARATII DESPRE ASTEPTARILE VIITOARE SAU ALTE EVOLUTII VIITOARE SI SE BAZEAZA PE VIZIUNEA SI IPOTEZELE ACTUALE ALE CONDUCERII COMPANIEI SI IMPLICA RISCURI CUNOSCUTE SI NECUNOSCUTE, PRECUM SI INCERTITUDINI CARE POT DETERMINA CA REZULTATELE EFECTIVE, PERFORMANÞA SAU EVENIMENTELE VIITOARE SA DIFERE SEMNIFICATIV DE CELE EXPRIMATE SAU INTELESE IN ACESTE DECLARATII.