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3Q12 Earnings
3Q12 Earnings
Q
g
Presentation
November 07 2012
Q
g
Presentation
November 07 2012
November 07, 2012
November 07, 2012
1
1
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Forward Looking Statements
This presentation may contain certain forwardlooking statements that express management's expectations,
beliefs and assumptions about future events and results. These statements, other than statements of historical
fact, are based on currently available competitive, financial and economic data and information, and on
management's current estimates and projections about factors related to the industry in which BM&FBOVESPA
operates. Words as "anticipate," "believe," "could," "may," "would," "should," "estimate," "expect," "predict,"
"intend," "project," "seek," "target" and similar other words are intended to identify forwardlooking statements.
There can be no assurance that forwardlooking statements will prove to be accurate, as they involve risks and
uncertainties that could cause our future performance and actual results to differ materially from those that are
anticipated, expressed or implied in such statements. Factors that may affect our future performance include,
but are not limited to: (i) market acceptance of our service offerings; (ii) volatility related to (a) the Brazilian
economy and the capital markets, and (b) the highly competitive industry in which BM&FBOVESPA operates ; (iii)
changes in (a) domestic and foreign legislation and taxation, and (b) government policies and their impact on the
financial and capital markets; (iv) fresh competition from new entrants to the Brazilian markets; (v) our ability to
keep up with rapid changes in technology, including as to the implementation of enhanced functionalities
prompted by customer demand; (vi) our ability to sustain a continuous and competitive product and services
development process, whereas maintaining the competitiveness of existing offerings; (vii) our ability to attract
new customers, whether based in Brazil or elsewhere; (viii) our ability to expand our product offerings to other
countries. These forwardlooking statements speak only as of the date of this presentation, and BM&FBOVESPA
undertakes no obligation to publicly update or revise any of them in light of new information or future
developments. This presentation does not constitute an offer to sell or a solicitation of an offer to buy any
securities of the company, nor shall there be any sale of securities of the company in any jurisdiction in which
such offer or sale would be unlawful prior to registration or qualification under the relevant securities law. No
2
2
offering shall be made except by means of a prospectus prepared pursuant to the requirements of Brazilian
Securities Commission (CVM) Ruling 400 of 2003, as amended.
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Highlights 3Q12 vs. 3Q11
Growth in all business lines and costs under control
FINANCIAL HIGHLIGHTS
Gross Revenue:
R$581.3 million, +6.2%
Bo espa Seg R$263 4 million +5 9%
OPERATING HIGHLIGHTS
Bovespa Segment:
ADTV +8 7%
Bovespa Seg.: R$263.4 million, +5.9%
BM&F Seg.: R$219.3 million, +6.8%
Other revenues: R$98.7 million, +5.8%
ADTV: +8.7%
Margin: flat
BM&F Segment:
RPC: +14 7%
Net Revenue:
R$521.6 million, +5.7%
Adjusted Expenses
¹
:
R$136.0 million, 0.2%
RPC: +14.7%
ADV: 4.0%
High growth products:
ETFs: +90.2% ADTV
j
p
,
Operating Income:
R$346.8 million, +7.0%
Tesouro Direto: +45.6% AUM
FII : strong growth in market capitalization and
number of investors
f
l
EBITDA:
R$375.6 million, +8.1%
EBITDA Margin: 72.0%
Adj. Net Income
²
:
R$400.6 million, +0.3%,
LCA: consistent increase of register volume
MAIN PROJECTS FOR 4Q12
l
l
f
Adj. EPS:
R$0.208, +1.7%
P
t
R$221 2
illi
i di id
d
d i t
t
Cross listing:
listing of S&P 500 mini contracts at BVMF
and Ibovespa at CME
PUMA Trading SystemTM:
equities module
Registration Platforms
3
3
Payout:
R$221.2 million in dividends and interest on
capital, 80% of GAAP net income in 3Q12
g
1
Excludes stock options plan, depreciation, provisions and tax on dividends from CME Group.
2
Excludes deferred liability recognized in correlation with temporary differences from amortization of goodwill for tax
purposes, the impact of the stock options plan, the investment in associate (CME Group) accounted for under the equity method of accounting, net of taxes related to dividends and recoverable taxes paid overseas
to be compensated.
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Bovespa Segment
ADTV growth and flat margins
OPERATING HIGHLIGHTS
ADTV and margin in basispoints
3Q12 3Q11
3Q12 x 3Q11:
+8.7% ADTV => 9.8% growth of cash equities
ADTV
foreign investors ADTV went up 26.2% => foreign
6.6
6.4
7.2
7.6
7.2
5.71
5.58
5.91
5.50
5.73
Average market cap and turnover velocity
foreign investors ADTV went up 26.2% > foreign
HFTs ADTV rose 24.9%
alltimehigh monthly ADTV of R$8.4 billion in
Sep12
record of 1 5 million trades in 9/14
3Q11
4Q11
1Q12
2Q12
3Q12
ADTV (R$ billions)
Margin (bps)
record of 1.5 million trades in 9/14
stable trading margins at 5.7 bps
higher turnover velocity of 70.4%
6 6% growth in the average market capitalization
2 2
2 2
2 5
2 4
2 4
69.3%
66.6%
66.2%
75.0%
70.4%
HFTs: ADTV (R$ millions) and participation of volume (%)
6.6% growth in the average market capitalization
3Q12 x 2Q12:
ADTV 6.1% down compared to the previous
2.2
2.2
2.5
2.4
2.4
3Q11
4Q11
1Q12
2Q12
3Q12
Average Stock Market Capitalization (BRL trillions)
Turnover Velocity (%)
s:
( $
o s) a d pa t c pat o o
o u e (%)
ADTV 6.1% down compared to the previous
record of R$7.6 billion in 2Q12
margins 4.2% higher => lower participation of
institutional investors and day trades, which pay
lower fee rates
319.3
249.2
325.3
268.3
251.6
174.6
146.0
0,2
73,8
1,329.1
1,311.9
1,199.1
1,454.1
1,368.9
10.3%
10.3%
8.5%
9.4%
9.8%
4
4
lower fee rates
835.1
916.7
873.9
1,185.6
1,043.5
3Q11
4Q11
1Q12
2Q12
3Q12
Foreigners
Individuals
Institutionals
% of overall market
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BM&F Segment
Average RPC growth
OPERATING HIGHLIGHTS
ADV (millions of contracts) and RPC (R$)
3Q 2 3Q
1 269
3Q12 x 3Q11:
+14.7% RPC
=> depreciation of R$/US$ rate impacting RPC
of FX (+36 2%) and USD int rates (+25 3%)
1.8
1 5
1.7
2.3
1.8
0.5
0.5
0.5
0.5
0.5
0.3
0.3
0.3
0.3
0.4
2.8
2.5
2.7
3.4
2.7
1.106
1.157
1.172
1.133
1.269
BRL Int. Rates volumes by maturities (%)
of FX (+36.2%) and USD int. rates (+25.3%)
contracts;
=> 10.1% increase in RPC for BRL int. rate due to
concentration of trading in longer maturities
contracts (4th and 5th)
1.8
1.5
1.7
1.8
3Q11
4Q11
1Q12
2Q12
3Q12
Int. Rate BRL
FX
Indices
Others
RPC (BRL)
16%
4%
4%
8%
7%
22%
57%
79%
68%
contracts (4th and 5th)
4.0% ADV => drop in ADV of BRL int. rate (
2.4%), indices (17.3%) and FX (13.8%) went
down
Lower participation of HFTs due mainly to a
65%
86%
90%
15%
3%
6%
7%
2%
4%
2%
7%
3Q11
2Q12
3Q12
1st Maturity
2nd Maturity
3rd Maturity
4th Maturity
5th Maturity
HFTs: ADV (thd contracts) and participation of volume (%)
Lower participation of HFTs, due mainly to a
reduction in ADV of FX and indices contracts
3Q12 x 2Q12:
HFTs: ADV (thd contracts) and participation of volume (%)
3Q12 x 2Q12:
+12.0% RPC => reflecting the depreciation of
R$/US$ rate (6.5%) and reduction of day trade
operations of BRL int. rates
19 8% ADV
d t th
i
d f
178.7
139.6
134.8
224.0
209 1
24.4
24.8
101.4
9.8
0.9
7.8%
7.2%
8.0%
6.3%
6.7%
419.5
335.2
412.2
442.5
342.2
300,0
400,0
500,0
5
5
19.8% ADV compared to the previous record of
R$3.4 million contracts in 2Q12
68.2
50.9
46.5
68.7
58.3
148.3
119.9
129.5
140.0
73.8
139.6
134.8
209.1
100,0
200,0
3Q11
4Q11
1Q12
2Q12
3Q12
Equities
FX
Mini contracts
Others
% in Overall Volume
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BM&F Segment
Longer maturity of BRL interest rate contracts
BRL INT. RATE: ADV PER MATURITY (MILLIONS OF CONTRACTS)
CAGR: +3%
1.7
1.8
1.8
CAGR: +19%
CAGR: +3%
0.8
0.8
0.6
0 4
0.8
1.0
1.2
0.7
0.8
CAGR: 16%
0.2
0.3
0.5
0.4
3Q08
3Q09
3Q10
3Q11
3Q12
BRL INT. RATES: REVENUES (IN R$ MILLION)
1st4th Maturity
5th Maturity
Total
CAGR: +13%
CAGR: +9%
75.3
89.9
96.1
101.1
114.8
119.6
CAGR: 5%
11.9
11.0
25.8
24.9
23.5
47.2
40.7
59.1
51.7
6
6
3Q08
3Q09
3Q10
3Q11
3Q12
1st4th Maturity
5th Maturity
Total
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Revenue Breakdown in 3Q12
Diversified revenue sources as a differential
REVENUE BREAKDOWN (3Q12)
9 2%
39.3%: Cash Equities
9.2%: Trading
30.1%: Posttrading
9.2%
18.5%
5.2%: Derivatives on Stocks and Indices
1.4%: Trading
3.8%: Posttrading
30.1%
37.0%: Financial/Commodities Derivatives
14.3%: Trading
22.7%: Posttrading
Gross Revenue:
R$581.3 million
1.4%
22.7%
g
4.5%: Depository, Custody and backoffice
3 2%: Securities Lending
18.5%: Other revenues
3.8%
14.3%
3.2%: Securities Lending
3.1%: Vendors
2.2%: Trading Access (brokers)
1.9%: Listing
3 6%: Others
7
7
3.6%: Others
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High Growth Products
Increased sophistication of market participants
Focus on product and market development, supporting
higher sophistication of market participants
HIGH GROWTH PRODUCTS
Ibovespa indexrelated products (options on
Ib
t k i di
f t
d ETF )
higher sophistication of market participants
Selected fastgrowth products accounted for 7.6% of
total revenues in 3Q12 (7.3% in 3Q11)
Ibovespa, stock indices futures and ETFs) were
negatively impacted by reduced volatility when
compared to 3Q11
75.3
64 4
Options on stocks/indices (ADTV R$ MM)
Stock index futures (ADV ­ thd contracts) Securities Lending (Open Interest)
14.5%
17.3%
CAGR: +24.1%
6.5%
(R$ billion)
CAGR: +34.5%
80
89
123
153
143
119
2009 2010 2011 9M12
3Q11 3Q12
212.5
186.3
64.4
3Q11
3Q12
12.3%
12.7
20.5
30.2
30.9
31.6
29.5
2009
2010
2011
9M12
3Q11
3Q12
2009 2010 2011 9M12
3Q11 3Q12
3Q11
3Q12
Petr + Vale
Others
ETFs (ADTV R$ MM)
Tesouro Direto (custody R$ Bn)
2009
2010
2011
9M12
3Q11
3Q12
+45.6%
CAGR: +43.8%
+90.2%
CAGR: +85.3%
8
8
2.9
3.9
6.1
8.6
6.4
9.3
2009
2010
2011
9M12
3Q11
3Q12
18.6
28.5
48.7
118.5
53.8
102.3
2009
2010
2011
9M12
3Q11
3Q12
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High Growth Products
Real Estate Funds (FII) and Agribusiness Credit Bills (LCA)
Estimated annualized revenues for FIIs and LCAs in 3Q12 around R$10 million
FIXED INCOME AND REAL ESTATE PRODUCTS
Agribusiness Credit Bills (LCAs)
Real Estate Funds (FIIs)
350
25
25.4
150
200
250
300
10
15
20
50
100
5
0.1
Jan

11
Fe
b

11
Ma
r

11
Ap
r

11
May

11
Ju
n

11
Ju
l

11
Au
g

11
Se
p

11
Oc
t

11
No
v

11
De
c

11
Jan

12
Fe
b

12
Ma
r

12
Ap
r

12
May

12
Ju
n

12
Ju
l

12
Au
g

12
Se
p

12
Mkt. Cap (R$ billions)
Monthly volume (R$ millions)
54.6
Assets under custody (R$ billions)
19.7
60%
40%
9
9
Ja
n

11
Fe
b

11
Mar

11
Ap
r

11
Ma
y

11
Ju
n

11
Ju
l

11
Au
g

11
Se
p

11
Oc
t

11
No
v

11
De
c

11
Ja
n

12
Fe
b

12
Mar

12
Ap
r

12
Ma
y

12
Ju
n

12
Ju
l

12
Au
g

12
Se
p

12
# of investors (thds)
Mkt. Share BVMF
Other
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Expenses in 3Q12
Focus on cost control and higher operating efficiency
Other
0.2%
ADJUSTED EXPENSES
TOTAL EXPENSES BREAKDOWN (3Q12)
(R$ million)
47%
8%
2%
15%
Personnel
Third
Party
Marketing
Expenses:
136.3
163.9
125.4
127.9
136.0
47%
14%
14%
Personnel
Depr./
Amort.
Expenses:
R$174.8 MM
14%
Data. Proc.
3Q11
4Q11
1Q12
2Q12
3Q12
ADJUSTED EXPENSES: 3Q11 vs. 3Q12
(R$ million)
ADJUSTED EXPENSES: 2Q12 vs. 3Q12
(R$ million)
4.8
0.1
1.7
1.5
2.4
0.1
127.9
136.0
2.5
(0.3)
(0.8)
136.3
136.0
(0.7)
(1.1)
(2.5)
0.1
10
10
2Q12 Adj.
Exp.
Personnel Data proc. Third Party Commun. Marketing
Others
3Q12 Adj.
Exp.
3Q11 Adj.
Exp.
Personnel Data proc. Third Party Commun. Marketing
Others
3Q12 Adj.
Exp.
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Adjusted Expenses in 3Q12
Focus on market integrity
Nominal reduction in expenses
F
l i fl i
h i
2012 ADJUSTED OPEX BUDGET
585
(R$ million)
Focus on cost control: inflationary growth in expenses
fully counterbalanced by greater operating efficiency
Budget range
: R$560580 million
Budget includes planned transfer of resources to BSM
544
585
560580
Budget includes planned transfer of resources to BSM
of approximately R$15 million in 4Q12
9M12:
389
2010
2011
2012
BM&FBOVESPA MARKET SURVEILLANCE (BSM)
Established in 2007, BSM is responsible for the securities market surveillance and selfregulation of
all markets managed by BVMF, seeking to strengthen their integrity, pursuant to CVM rule 461/07
A ~R$15 million transfer to strengthen the cash position of BSM and supplement the funding of its
activities over 2013 is in line with one of the primary objectives of BVMF which is to ensure
activities over 2013 is in line with one of the primary objectives of BVMF, which is to ensure
sustained market integrity
11
11
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Net income
Net income impacted by a fall in financial income
Adjusted net income did not fully capture the revenue growth due to a plunge in
interest income
EBITDA growth in line with operating income
growth
ADJUSTED NET INCOME
EBITDA
27.9
(3.9)
(37 1)
14.1
375.6
347.5
+8.1%
(R$ million)
(R$ million)
399.6
(37.1)
400.6
3Q11
N t
E
*
Fi
i l
I
t
3Q12
3Q11
Adjusted net
income
Net revenues Expenses*
Financial
Income
Income tax
3Q12
Adjusted net
income
3Q12
3Q11
OPERATING INCOME
324 1
346 8
Financial Income: 3Q12 vs. 3Q11
R$45.5 million, down 44.9%
Financial Revenue: R$67.6 million, down 33.7% due mainly
OPERATING INCOME
(R$ million)
+7.0%
324.1
346.8
,
y
to lower interest rates
Financial Expenses: R$22.1 million, a 14.0% growth due to
depreciation of 24.0% in R$/US$
12
12
3Q11
3Q12
* Excludes stock options plan and tax on dividends from CME Group.
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Financial Highlights
Focus on cash generation and shareholders return
OPERATING CASH GENERATION
CASH AND FINANCIAL INVESTMENTS
(R$ million)
(R$ million)
+6.9%
340.5
364.1
1 207
1,443
1,166
383
340
343
354
363
390
1 714
1,979
2,100
3 658
4,125
3,999
1Q12
2Q12
3Q12
1,270
1,551
1,207
468
380
383
284
270
354
1,487
1,582
1,714
3,508
3,782
3,658
3Q11
4Q11
1Q12
3Q11
3Q12
,
,
,
Market participants cash collateral and others*
Restricted funds
Subsidiaries**
Available funds
Payout:
R$221.2 million, R$131.2 million in dividends
and R$90 0 million in interest on capital 80% of
RETURNING CAPITAL TO SHAREHOLDERS
Budget range
: R$230260 million
CAPEX BUDGET FOR 2012
and R$90.0 million in interest on capital, 80% of
GAAP net income in 3Q12.
Share buyback program:
up to 60 million shares
authorized for repurchase until June 28, 2013
Actual 3Q12:
R$52.3 million
Actual 9M12:
R$124.2 million
13
13
*Includes collaterals pledged by participants in the form of cash, receivables and rights in securities under custody, as well as payouts still undisbursed.
** Includes third party collaterals and restricted funds at BM&F Settlement Bank (Banco BM&F).
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Main Projects
Deliveries already implemented and programmed
INTENSE DELIVERY PHASE STARTING IN 4Q12
4Q12
1Q13
2Q13
3Q13
4Q13
1Q14
2Q14
3Q14
4Q14
(...)
Migration of
PUMA Trading
SystemTM
System
(equities)
Fixed income
trading
platform
Fixed income
registration
platform
OTC Derivatives
Platform (Calypso)
Cross
New integrated clearing house/ CORE*
Construction of the New Data Center
listing
Fee structure redesigning and introduction of incentive programs
/
(...)
(...)
( )
( )
14
14
*CORE, Closeout Risk Evaluation.
Development of new products / markets: ETFs, market making programs for the options market; dual listings...
(...)
(...)
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Final Remarks
BVMF better prepared to capture opportunities
OPPORTUNITIES IN BRAZILIAN MARKETS
New reality of lower interest rates
MAINTAINING MARKET INTEGRITY
Control, governance, transparency and
market security
Capital markets set to become a more
important alternative for longterm
funding
market security
Strengthening the integrity of Brazilian
capital markets targeting growth
WHAT IS BVMF DOING?
l
d
d
d
l f
Investing intensively in trading and posttrading platforms
Increasing focus on customers (brokers and investors): revisiting the fee structure, investing
in product development
Stringent cost controls
Stringent cost controls
Ensuring market integrity by establishing efficient controls and strengthening BSM
WHAT IS ALREADY HAPPENING!
Operating leverage materialization
R
th d
it
l
i
th
i
d i t
ti
l i t bilit
15
15
Revenue growth, despite slow economic growth scenario and international instability
High potential products have been showing strong growth
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APPENDIX
APPENDIX
16
16
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Resumo da Demonstração de Resultados
Financial Statements
Summary of Income Statement (Consolidated)
SUMMARY OF INCOME STATEMENT
(in R$ millions)
3Q12
3Q11
Change
3Q12/3Q11
2Q12
Change
3Q12/2Q12
Gross Revenues
581.3
547.1
6.2%
603.2
3.6%
Net Revenues
521 6
493 7
5 7%
541 2
3 6%
Net Revenues
521.6
493.7
5.7%
541.2
3.6%
Expenses
(174.8)
(169.6)
3.1%
(166.1)
5.2%
Operating Income
346.8
324.1
7.0%
375.0
7.5%
Operating margin
66.5%
65.7%
84 bps
69.3%
281 bps
Operating Income
37.2
28.3
31.5%
42.4
12.1%
Financial Income
45.5
82.7
44.9%
54.7
16.8%
EBT
429.6
435.1
1.3%
472.1
9.0%
Net Income*
276 5
292 0
5 3%
300 1
7 9%
Net Income
276.5
292.0
5.3%
300.1
7.9%
EBITDA
375.6
347.5
8.1%
403.8
7.0%
EBITDA Margin
72.0%
70.4%
162 bps
74.6%
261 bps
Adjusted Net Income
400.6
399.6
0.3%
422.9
5.3%
* Attributable to BM&FBOVESPA shareholders.
Adjusted EPS (in R$)
0.208
0.204
1.7%
0.219
5.3%
Adjusted Expenses
(136.0)
(136.3)
0.2%
(127.9)
6.4%
17
17
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Balanço Patrimonial
Em R$ milhões
Financial Statements
Summary of Balance Sheet (Consolidated)
LIABILITIES AND SH. EQUITY
ASSETS
(in R$ millions)
9/30/2012 12/31/2011
(in R$ millions)
9/30/2012 12/31/2011
Current assets
3,693.9
2,401.1
Current liabilities
1,610.4
1,929.9
Cash and cash equivalents
46.3
64.6
Collateral for transactions
1,110.9
1,501.0
Financial investments
3,425.7
2,128.7
Others
499.5
428.9
Others
221.9
207.8
Noncurrent liabilities
2,898.8
2,402.5
Noncurrent assets
20,439.7
21,188.8
Financing
1,234.1
1,138.7
Longterm receivables
727.6
1,767.4
Deferred Inc. Tax and Social Contrib.
1,605.9
1,204.6
Financial investments
526.8
1,589.1
Others
58.8
59.2
Financial investments
526.8
1,589.1
Others
58.8
59.2
Others
200.7
178.4
Shareholders' equity
19,624.4
19,257.5
Investments
2,946.0
2,710.1
Capital
2,540.2
2,540.2
d
l
Property and equipment
328.7
357.2
Capital reserve
16,031.6
16,033.9
Intangible assets
16,437.4
16,354.1
Others
1,052.6
683.4
Goodwill
16,064.3
16,064.3
Minority interest in subsidiaries
16.2
16.5
18
18
Total Assets
24,133.6
23,589.9
Liabilities and Shareholders' Equity
24,133.6
23,589.9
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Reconciliação do Lucro Líquido Ajustado 1T12
Financial Statements
Reconciliation of Adjusted Net Income and Expenses
RECONCILIATION OF ADJUSTED NET INCOME
(i R$
illi
)
3Q12
3Q11
Change
2Q12
Change
(in R$ millions)
3Q12
3Q11
Change
3Q12/3Q11
2Q12
Change
3Q12/2Q12
Gaap net income*
276.5
292.0
5.3%
300.1
7.9%
Stock options plan
7.8
8.5
8.3%
8.2
4.0%
Deferred tax liabilities
134.8
124.7
8.1%
134.8
0.0%
Equity in results of investees (net of taxes)
(32.6)
(25.7)
26.9%
(37.6)
13.4%
Recoverable taxes paid overseas
14.1
0.0
17.5
19.4%
Adjusted net income
400.6
399.6
0.3%
422.9
5.3%
* Attributable to BM&FBOVESPA shareholders.
RECONCILIATION OF ADJUSTED EXPENSES
(in R$ millions)
3Q12
3Q11
Change
3Q12/3Q11
2Q12
Change
3Q12/2Q12
Total Expenses
174 8
169 6
3 1%
166 1
5 2%
Total Expenses
174.8
169.6
3.1%
166.1
5.2%
Depreciation
(24.1)
(20.7)
16.4%
(24.0)
0.4%
Stock options plan
(7.8)
(8.5)
8.3%
(8.2)
4.0%
Tax on dividends from the CME Group
(4.7)
(2.6)
76.1%
(4.7)
1.9%
Provisions
(2.1)
(1.4)
52.3%
(1.4)
57.2%
19
19
Adjusted Expenses
136.0
136.3
0.2%
127.9
6.4%
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BM&FBOVESPA ­ Investor Relations
+55 (11) 25654729 / 4418 / 4834 / 4728 / 4007
ri@bmfbovespa.com.br
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