BME Financial Results, Q12012

573 views
537 views

Published on

Published in: Business, Economy & Finance
0 Comments
0 Likes
Statistics
Notes
  • Be the first to comment

  • Be the first to like this

No Downloads
Views
Total views
573
On SlideShare
0
From Embeds
0
Number of Embeds
1
Actions
Shares
0
Downloads
2
Comments
0
Likes
0
Embeds 0
No embeds

No notes for slide

BME Financial Results, Q12012

  1. 1. First quarter 2012
  2. 2. The information contained herein does not constitute an offer of securities in the United States.Offers and sales of securities in The United States may not be made absent made registrationunder the U.S. Securities Act of 1933, as amended, or an applicable exemption therefrom.This document does not solicit money, securities or any other type of consideration, and ifany money, securities or other type of consideration is sent in response hereto, it will not beaccepted.
  3. 3. Share InformationFirst quarter 2012 ■■ Net profit for the first quarter of 2012 stood at €35.5 million, 14.4% down on 1Q11, against a backdrop of sharp declines in trading volumes for both equities and derivatives caused by regulatory constraints on trading and a downward correction in listed prices. -- EBITDA dipped by 13.4% to reach €52.3 million. -- Operating costs for the year increased by 2.3% to €25.1 million. ■■ The efficiency ratio for the first quarter is 32.4% compared to 28.9% reported in 1Q11. This ratio enabled the group to maintain a lead of more than 12 points over the average for the sector. ■■ Return on Equity (ROE) was 31.2% in 1Q12 and 35.6% in 1Q11, representing a lead of more than 13 points over the sector average. ■■ The coverage ratio was 116% at quarter end. This ratio measures the company’s diversification into revenue sources not associated with market activity. ■■ Trading volume on the equities and derivatives markets recover gradually from the recent lifting of the ban to increase the net short position on financial securities imposed in several different European countries. -- Since the ban was lifted, for those securities directly affected by the ban, the average turnover climbed 58.5%, in shares traded the improvement was 75.8% and the average increase in trades amounted 58.7%. -- Transaction costs for investors, measured in terms of the bid-ask spread, have returned to levels seen before the ban was introduced. -- In the derivatives market, the average volume of contracts has improved, based on the same reasons, by 66.9%. Bolsas y Mercados Españoles - Business performance - Interim Report (January - March 2012) 3
  4. 4. Financial Statements BOLSAS Y MERCADOS ESPAÑOLES, SOCIEDAD HOLDING DE MERCADOS Y SISTEMAS FINANCIEROS, S.A. AND SUBSIDIARIES 1Q12 1Q11 ∆ COMPRISING THE BOLSAS Y MERCADOS ESPAÑOLES GROUP CONSOLIDATED PROFIT AND LOSS ACCOUNTS (UNAUDITED) (Th.Eur.) (Th.Eur.) % Operating Income 77,386 84,910 -8.9% Ordinary revenue on the provision of services 76,587 84,042 -8.9% Other operating income 438 500 -12.4% Capitalisation of development expenses 361 368 -1.9% Operating Expenses (25,080) (24,522) 2.3% Staff costs (15,906) (15,062) 5.6% Operating and external expenses (9,049) (9,319) -2.9% Taxes and levies (125) (141) -11.3% Income before interest, taxes, net impairment losses and depreciation 52,306 60,388 -13.4% Depreciation and amortization charges (2,059) (1,935) 6.4% Income before interest and taxes 50,247 58,453 -14.0% Net financial income 541 706 -23.4% Share of profit (loss) of associates (148) (154) -3.9% Income before taxes 50,640 59,005 -14.2% Corporate income tax (15,127) (17,525) -13.7% Profit attributable to the Group 35,513 41,480 -14.4% BME: Profit attributable to The Group (Quarterly series) Profit evolution Profit Evolution 41.5Mill.€ 40.5 36.5 36.7 35.5 1.2 35.3 1Q11 2Q11 3Q11 4Q11 1Q12Net profit of Bolsas y Mercados Españoles (BME) shed 14.4% over the first quarter of 2011 to reach €35.5 million.Operating costs climbed to €25.1 million at March 31, marking a yoy increase of 2.3%.Income for the first quarter stood at €77.4 million, down 8.9% on the same figure for 2011.4 Bolsas y Mercados Españoles - Business performance - Interim Report (January - March 2012)
  5. 5. Financial StatementsQuarterly results have been conditioned by a lower equity and The efficiency ratio, one of the company’s main financialderivatives volumes context, based on the general economic management indicators, settled at 32.4%, compared to theenvironment, regulatory limitations on trading, and an average 28.9% seen in 1Q11. ROE closed the quarter at 31.2%, vs. thegeneral price correction. Nevertheless, the diversification of the 35.6% of 1Q11.business model coupled to generation of revenues not linkedto volume cycles sources, have offset partially the effect of the At the end of 1Q12, 116% of BME’s cost base was covered byvolume decline in net income. revenue not linked to trading volumes. Bolsas y Mercados Españoles Group 1Q12 1Q11 ∆ (Key Ratios) Earnings per share 0.43 0.50 -14.4% Efficiency ratio (%) 32.4% 28.9% ROE (%) 31.2% 35.6% BME efficiency ratio BME: Return on Equity (Quarterly series) (Quarterly series) Consolidated efficiency ratio evolution Consolidated ROE ratio evolution(% Efficiency) % ROE 35.6% 36.3% 32.7% 31.6% 32.4% 33.1% 29.5% 31.4% 31.2% 28.9% 1Q11 2Q11 3Q11 4Q11 1Q12 1Q11 2Q11 3Q11 4Q11 1Q12 Bolsas y Mercados Españoles - Business performance - Interim Report (January - March 2012) 5
  6. 6. Financial Statements BOLSAS Y MERCADOS ESPAÑOLES, SOCIEDAD HOLDING DE MERCADOS Y as of as of SISTEMAS FINANCIEROS, S.A. AND SUBSIDIARIES COMPRISING THE BOLSAS Y ∆ 31/03/2012 31/03/2011 MERCADOS ESPAÑOLES GROUP CONSOLIDATED BALANCE SHEETS AT CLOSING DATES (UNAUDITED) (Th.Eur.) (Th.Eur.) %NON-CURRENT ASSETS 168,451 169,864 -0.8%Goodwill 82,190 82,190 0.0%Other intangible assets 9,432 9,459 -0.3%Property, plant and equipment 48,689 49,220 -1.1%Non-current financial assets 21,845 23,716 -7.9%Deferred taxes 6,295 5,279 19.2% CURRENT ASSETS 37,330,992 34,282,437 8.9%Non-Group current financial assets 36,890,623 33,832,253 9.0%Other current financial assets Trade and other receivables 25,881 27,026 -4.2% Other financial assets 10,107 0 - Cash and cash equivalents 344,800 377,925 -8.8%Tax assets 55,904 41,980 33.2%Other current assets 3,677 3,253 13.0% TOTAL ASSETS 37,499,443 34,452,301 8.8% SHAREHOLDERS´ EQUITY 475,372 488,957 -2.8%Share capital 270,078 270,078 0.0%Reserves 102,085 108,903 -6.3%Previous year profit attributable to the Group 155,115 154,152 0.6%Profit attributable to the Group 35,513 41,480 -14.4%(Treasury shares) (7,661) (7,661) 0.0%(Interim dividend) (83,278) (83,278) 0.0%Other equity instruments 1,147 3,090 -62.9%Valuation reserves 2,373 2,193 8.2% NON-CURRENT LIABILITIES 17,783 14,988 18.6%Provisions 6,986 6,891 1.4%Provisions for employee benefits 4,689 2,862 63.8%Deferred taxes 5,526 4,550 21.5%Other non-current financial liabilities 582 685 -15.0% CURRENT LIABILITIES 37,006,288 33,948,356 9.0%Trade and other payables 17,931 18,406 -2.6%Non-Group current financial liabilities 36,890,623 33,832,212 9.0%Tax liabilities 84,662 84,910 -0.3%Other current liabilities 13,072 12,828 1.9% TOTAL EQUITY AND LIABILITIES 37,499,443 34,452,301 8.8%In order to apply the same presentation criteria as other European central counterparties, the Group includes in “Currentassets – Non-Group current financial assets” and “Current liabilities – Non-Group current financial liabilities”, by the sameamounts, fixed-income securities and options in which it acts as central counterparty, and guarantees and deposits receivedfrom the market.This presentation criteria has no impact on income or equity.6 Bolsas y Mercados Españoles - Business performance - Interim Report (January - March 2012)
  7. 7. Financial Statements BOLSAS Y MERCADOS ESPAÑOLES, SOCIEDAD HOLDING DE MERCADOS Y SISTEMAS FINANCIEROS, S.A. AND SUBSIDIARIES COMPRISING THE BOLSAS Y 1Q12 1Q11 ∆ MERCADOS ESPAÑOLES GROUP CONSOLIDATED CASH FLOW STATEMENT (UNAUDITED) (Th.Eur.) (Th.Eur.) % Consolidated profit for the year before taxes 50,640 59,005 -14.2% Corporate income tax (15,127) (17,525) -13.7% Amortization and provisions 2,291 2,233 2.6% Other adjustments to the result 96 (276) -134.8% Changes in working capital- - Current financial assets (non Group) 0 42 -100.0% - Trade and other receivables (4,527) (3,534) 28.1% - Tax assets (430) (543) -20.8% - Tax liabilities 7,968 9,339 -14.7% - Other current assets (2,568) (2,514) 2.1% - Trade and other payables 468 1,360 -65.6% - Other current liabilities 12,749 12,502 2.0% Changes in non current assets and liabilities (154) (134) 14.9% Net cash flows from operating activities 51,406 59,955 -14.3% Net cash flows from investing activities (7,942) (1,813) 338.1% Net increase (decrease) in cash and cash equivalents 43,464 58,142 -25.2% Cash and cash equivalents at the beginning of period 301,336 319,783 -5.8% Cash and cash equivalents at the end of period 344,800 377,925 -8.8%Note: For the purpose of clear presentation of changes in working capital, inflows of funds from guarantees and deposits received from the market which are investedin current financial assets “Current assets – Non-Group current financial assets” in their entirety have not been included as a change in working capital. Financialinstruments of MEFF as a central counterparty and receivables on settlements of options and futures, have not been included either. Bolsas y Mercados Españoles - Business performance - Interim Report (January - March 2012) 7
  8. 8. Quarter OverviewHighlights■■ The BME Board of Directors, at a meeting held on 29 dividend of €49,966,935, equivalent to a gross dividend perFebruary 2012, drew up the annual accounts (balance sheet, share of €0.60, and an extra dividend against unrestrictedincome statement, statement of changes in net equity, cash reserves in the amount of €30,979,499.7, equivalent to €0.372flow statement and annual report), the management report per share (gross).(which includes the annual corporate governance report)and the proposed distribution of earnings for both the holding On 14 March 2012, the company notified the Spanish CNMVcompany and its consolidated group, all such documents of Carlos Stilianopoulos Ridruejo’s departure from the Board,relating to financial year 2011. following the sale of the BME stake previously held by his principal company, Bankia, S.A.At its next meeting, held on 20 March 2012, the Board calleda General Shareholders’ Meeting to be held on 26 April 2012, ■■ In the first quarter of 2012, trading in equities totalledat second call, at the Palacio de la Bolsa, Plaza de la Lealtad €177.2 billion, formalised through 11.3 million trades, down1, Madrid. 28.4% year on year in terms of turnover and 13.2% in number of trades, with the market witnessing a swing in the pattern ofThe Board resolutions to be put before the General trading performance over the quarter.Shareholders’ Meeting include the proposed payout of a final Bolsas y Mercados Españoles 1Q12 1Q11 ∆ (Quaterly Overview) Equity Turnover (Mill. Eur.) 177,198 247,463 -28.4% Number of trades 11,315,977 13,030,936 -13.2% Number of shares (Million) 47,662 44,621 6.8% Market Capitalisation (Mill. Eur.) 970,877 1,117,273 -13.1% Average amount per trade (Euros) 15,659 18,990 -17.5% Clearing & Settlement Operations settled 11,478,674 11,554,541 -0.7% Turnover settled (billion euros daily avg.) 287.2 330.5 -13.1% Nominal amount registered (billion euros) 1,727.7 1,614.5 7.0% Listing Investment Flows channeled through Exchange (Mill. Euros) 6,882 16,314 -57.8% AIAF Fixed Income volume admitted (nominal Mill. Euros) 127,395 70,791 80.0% Derivatives Futures (number of contracts) Index Futures 1,518,042 2,475,753 -38.7% Stock Futures 7,089,230 8,006,039 -11.5% Options (number of contracts) Index Options 482,000 487,175 -1.1% Stock Options 9,445,270 8,368,043 12.9% Open interest (number of contracts) 13,389,171 12,374,644 8.2% Fixed Income Turnover (Mill. Eur.) 786,817 1,867,484 -57.9% 8 Bolsas y Mercados Españoles - Business performance - Interim Report (January - March 2012)
  9. 9. Quarter OverviewDuring the first half of 1Q12, trading in equities and derivatives ■■ Investment flows in listed shares channelled through thewas hit hard by the preventive ban on establishing or increasing exchange reached €6.9 billion in the first quarter of 2012, withnet short positions on Spanish financial stocks imposed on 11 highlights including the rights issues of Banco Santander,August 2011, but improved following the lifting of the ban on 15 Banco Popular and Banco Sabadell.February 2012. The total volume of new issues admitted to trading on the AIAFSince the ban was lifted, order book liquidity, implicit transaction fixed income market in 1Q12 was €127.4 billion, marking ancosts and trading volumes have all steadily improved. 80.0% yoy jump.The number of shares traded in the quarter reached 47.7 Increased activity in issues has driven up the private fixedbillion, up 6.8% on the same figure in 1Q11, illustrating the income outstanding balance, which totalled €906.7 billion at 31effect that the widespread correction in market prices has had March, up 6.1% on the same figure for 1Q11 and marking theon trading volumes. Rising uncertainty as to the resolve of the first time the outstanding balance has broken the 900 billioneconomic recovery, coupled with growing tensions in the debt mark.markets and the risk premium, have all led to an average pricecorrection of 25-30% on figures for 1Q11, while the IBEX 35® ■■ In derivative trading, average contract volume rallied 66.9%witnessed a return to the 7,000-8,000 point range seen in the across the board following the lifting of the ban on short selling.first quarter of 2009. For specific products, trading in IBEX 35® and Mini futures increased on average by 48.2% and 40.9%, respectively;BME has upgraded the Spanish stock exchange’s trading options on IBEX 35® climbed 117.0%; and futures and optionsplatform (SIBE) successfully, in this way bringing trading in on shares reported a combined relative gain of 67.9% in theShares, ETFs, Warrants and other investment products into number of contracts. All these increases could be seen asone single system. The new system multiplies transactional important improvements on trading volumes.capacity while providing the Spanish stock market with sufficientgrowth potential to respond to the present and future needs. ■■ Fixed income trading to maturity climbed 51% year on year to reach €147.9 billion, driven by trading in preferred sharesThe new technological environment, fully developed using due to buy-backs, and a major contribution to nearly double theBME Group’s technology, allows the system to accommodate number of trades in 1Q11.the future growth in trading volumes and in the number oftransactions. It also shows major improvements in terms of thelatency of transactions, which has been reduced by over tentimes.■■ At 31 March 2012, the nominal volume registered for bothequities and fixed income (both private and public) totalled€1.73 trillion, representing yoy growth of 7.0%.The drop in settlements of equities was offset by the increasedliquidity seen in fixed income transactions, particularly withinthe corporate bond segment.In 1Q12, LinkUp Markets established links with the Austriancentral securities depository (CSD), OesterreichischeKontrollbank AG (OeKB), which has now been operating aspart of the venture since 24 February, and work is ongoing toset up connections with other entities over the course of theyear. Bolsas y Mercados Españoles - Business performance - Interim Report (January - March 2012) 9
  10. 10. Quarter OverviewShareholder´s Equity Changes BOLSAS Y MERCADOS ESPAÑOLES, SOCIEDAD HOLDING DE MERCADOS Y SISTEMAS 1Q12 1Q11 FINANCIEROS, S.A. AND SUBSIDIARIES COMPRISING THE BOLSAS Y MERCADOS ESPAÑOLES GROUP (CHANGE IN SHAREHOLDERS’ EQUITY) (Th.Eur.) (Th.Eur.) Shareholders’ equity – opening balance 438,284 448,429 Valuation reserves 1,210 (392) Equity instruments 365 0 Business combinations 0 (560) Net income/loss in reporting period 35,513 41,480 Shareholders’ equity – closing balance 475,372 488,957Staff Bolsas y Mercados Españoles 1Q12 1Q11 (Staff)(*)Average number of staff 709 701 Employees as at balance sheet date 708 700 (*) Staff includes, for this purpose, only the 50% of the staff of Infobolsa.EfficiencyStarting of the year saw a correction in the efficiency ratio The ratio of operating costs to revenue closed the first quarterregarded previous year. Despite contained operating costs at 32.4%, while one year previously the figure was 28.9%.witch increased a 2.3% yoy, the effect of lower revenues,mainly in the equity and derivatives business units, resulted inthree and a half points of decline in the ratio. BME efficiency ratio 2011 2012 (Cumulative and quarterly series) Consolidated efficiency ratio evolution 32.4%(% Efficiency) 28.9% 1Q11 - 1Q1210 Bolsas y Mercados Españoles - Business performance - Interim Report (January - March 2012)
  11. 11. Share Information Share Performance BME’s share price closed the quarter at €19.22, down 10.5% Average daily trading volume in BME securities over the first on the €21.47 per share reported in the first quarter of 2011. three months stood at €8.9 million, down 47.0% yoy. Total The share outperformed the 24.3% average drop on the IBEX trades and total number of traded shares were similarly down, 35® benchmark index. During the quarter, starting on a closing registering yoy drops of 47.0% and 44.2%, respectively. price of €20.80 at the end of 2011, BME’s price obeyed market performance, retreating 7.6% at 31 March and with a downward BME shares were caught up in the ban on short selling up until market correction of 6.5%, to settle at 8,008.00 points on the 15 February. Average trading volume since the ban was lifted IBEX 35®. With quarter ended, both, market performance and through to 31 March gained 72.2% on the average trading BME’s price have continued the downward trend in parallel. volume during the ban, illustrating that the volume of trading in the shares has rallied considerably since the end of the ban. BME: Share performance Quarterly BMEs turnover and share performance evolution 22 100 volume Closing 90 21 80 70 20 60 Turnover (Mill. Euros) 50 cePric 19 40 30 18 20 10 17 0 02/01 05/01 10/01 13/01 18/01 23/01 26/01 31/01 03/02 08/02 13/02 16/02 21/02 24/02 29/02 05/03 08/03 13/03 16/03 21/03 26/03 29/03 03/04 10/04 Bolsas y Mercados Españoles 1Q12 1Q11 ∆ (Share performance) BME’s share performance Higher quote 22.00 23.65 -7.0% Lower quote 19.05 17.53 8.7% Average quote 20.52 20.94 -2.0% Closing quote 19.22 21.47 -10.5% BME’s trading daily turnover (Mill. Euros) Higher daily turnover 92.0 79.4 15.9% Lower daily turnover 2.1 3.4 -38.2% Average daily turnover 8.9 16.8 -47.0% BME’s shares trading (Mill. Shares) 28.2 50.5 -44.2% BME’s number of trades 58,558 110,420 -47.0% Bolsas y Mercados Españoles - Business performance - Interim Report (January - March 2012) 11
  12. 12. Business Units Quarter Overview Bolsas y Mercados Españoles Market Clearing & Fixed IT & (Business Units 1Q12) Equity Listing Data & Derivatives Settlement Income Consulting (Thousands of Euros) Information Revenues 30,184 19,528 6,091 8,856 5,451 2,905 4,102 Operating Costs (8,215) (3,460) (2,315) (1,851) (2,913) (754) (2,618) EBITDA 21,969 16,068 3,776 7,005 2,538 2,151 1,484 Key Investment Highlights Key Financial Business Units overview EBITDA evolution by Business Unit (1Q12) 2011 2012 30,415(Th. Euros) 21,969 15,688 16,068 6,447 7,005 3,935 3,776 4,050 2,538 1,569 2,151 1,023 1,484 EQUITY CLEARING & SETTLEMENT LISTING MARKET DATA DERIVATIVES FIXED INCOME IT & CONSULTING Bolsas y Mercados Españoles Revenues Business Units Revenues (Thousands of Euros) 1Q12 1Q11 ∆ Equity 30,184 38,392 -21.4% Clearing & Settlement 19,528 18,985 2.9% Listing 6,091 6,252 -2.6% Market Data & Information 8,856 7,841 12.9% Derivatives 5,451 6,829 -20.2% Fixed Income 2,905 2,298 26.4% IT & Consulting 4,102 3,690 11.2% Total 77,117 84,287 -8.5% Corporate Unit 2,732 2,743 -0.4% Consolidation adjustments (2,463) (2,120) 16.2% Consolidated 77,386 84,910 -8.9% Bolsas y Mercados Españoles EBITDA Business Units EBITDA (Thousands of Euros) 1Q12 1Q11 ∆ Equity 21,969 30,415 -27.8% Clearing & Settlement 16,068 15,688 2.4% Listing 3,776 3,935 -4.0% Market Data & Information 7,005 6,447 8.7% Derivatives 2,538 4,050 -37.3% Fixed Income 2,151 1,569 37.1% IT & Consulting 1,484 1,023 45.1% Total 54,991 63,127 -12.9% Corporate unit (2,685) (2,739) -2.0% Consolidation adjustments Consolidated 52,306 60,388 -13.4% 12 Bolsas y Mercados Españoles - Business performance - Interim Report (January - March 2012)
  13. 13. Business Units Quarter OverviewEquityRevenue for the Equity business at quarter-end 2012 amounted performance over the quarter.to €30,184 thousand, 21.4% down on the figure reported at2011, while EBITDA fell 27.8% to hit €21,969 thousand. During the first half of 1Q12, trading in equities and derivatives was hit hard by the preventive ban on establishing or increasingIn the first quarter of 2012, trading in equities totalled €177.2 net short positions on Spanish financial stocks imposed on 11billion, formalised through 11.3 million trades, down 28.4% year August 2011, but improved following the lifting of the ban on 15on year in terms of turnover and 13.2% in number of trades, February 2012.with the market witnessing a swing in the pattern of tradingBolsas y Mercados Españoles 1Q12 1Q11 ∆(Equity Business Unit Income) (Th.Eur.)Revenues 30,184 38,392 -21.4% Operating Costs (8,215) (7,977) 3.0% EBITDA 21,969 30,415 -27.8% Equity Business unit Activity Overview Turnover, Trades and Shares (Monthly basis) 105 99 82 82 83 78 74 71 70 67 69 59 59 61 4.6 4.5 3.8 4.6 4.2 3.7 46 4.0 3.5 3.5 4.0 3.9 3.4 3.4 2.8 23.4 21.7 24.8 3.4 18.1 10.5 10.7 9.3 10.8 10.0 9.7 12.9 8.2 7.9 6.7 28.1 1/11 2/11 3/11 4/11 5/11 6/11 7/11 8/11 9/11 10/11 11/11 12/11 1/12 2/12 3/12 Turnover (€ Bill.) Shares (Bill.) Trades (Mill.) Equity Business unit Activity Overview Turnover, trades and Shares traded (Quarterly basis) 247 238 235 207 177 13 0 13.0 12.4 11.3 10.5 10.2 44.6 38.2 41.3 40.8 47.7 1Q11 2Q11 3Q11 4Q11 1Q12 Turnover (€ Bill.) Shares (Bill.) Trades (Mill.) Bolsas y Mercados Españoles - Business performance - Interim Report (January - March 2012) 13
  14. 14. Business Units Quarter OverviewSince the ban was lifted, order book liquidity, implicit transaction Exchange-traded funds (ETFs) witnessed a 58.0% fall incosts and trading volumes have all steadily improved. In equity turnover in 1Q12 and a 35.0% slump in the number of trades inthe average turnover climbed 58.5% for those securities directly comparison to the same period of 2011.affected by the ban, in shares traded the improvement was75.8% and the average increase in trades amounted 58.7%. BME has upgraded the Spanish stock exchange’s tradingTransaction costs for investors, measured in terms of the bid- platform (SIBE) successfully, in this way bringing trading inask spread, have returned to levels seen before the restrictions Shares, ETFs, Warrants and other investment products into onewere implemented. single system. The new system multiplies transactional capacity while providing the Spanish stock market with sufficient growthThe number of shares traded in the quarter reached 47.7 potential to respond to the present and future needs.billion, up 6.8% on the same figure in 1Q11, illustrating theeffect that the widespread correction in market prices has had The new technological environment, fully developed usingon trading volumes. Rising uncertainty as to the resolve of the BME Group’s technology, allows the system to accommodateeconomic recovery, coupled with growing tensions in the debt the future growth in trading volumes and in the number ofmarkets and the risk premium, have all prompted an average transactions. It also shows major improvements in terms of theprice correction of 25-30% on figures for 1Q11, while the IBEX latency of transactions, which has been reduced by over ten35® witnessed a return to the 7,000-8,000 point range seen in times.the first quarter of 2009.Turnover within the warrants and certificates market dipped46.8% over the first quarter of 2012 compared to 1Q11 to reach€250 million. Total trades in the quarter also fell by 30.7% yoy. Bolsas y Mercados Españoles 1Q12 1Q11 ∆ (Equity Business Unit Activity Overview) TRADING (Mill. Euros) 177,198 247,463 -28.4% Equity Turnover (Mill. Euros) 176,494 245,911 -28.2% Number of trades 11,246,903 12,930,374 -13.0% Average amount per trade (Euros) 15,693 19,018 -17.5% Exchange Traded Funds (ETFs) Turnover (Mill. Euros) 454 1,082 -58.0% Number of trades 9,055 13,937 -35.0% Warrants Turnover (Mill. Euros) 250 470 -46.8% Number of Trades 60,019 86,625 -30.7% Number of shares (Mill. Shares) 47,662 44,621 6.8% CAPITALISATION (Mill. Euros) 970,877 1,117,273 -13.1% 14 Bolsas y Mercados Españoles - Business performance - Interim Report (January - March 2012)
  15. 15. Business Units Quarter OverviewClearing & SettlementThe Clearing and Settlement unit reported EBITDA of €16,068 The average turnover settled daily declined 13.1% to reachthousand for the first quarter of 2012, marking an increase of €287.2 billion.2.4% yoy. Revenues from the unit’s different activities climbed2.9% to reach €19,528 thousand. In 1Q12, LinkUp Markets established links with the Austrian central securities depository (CSD), OesterreichischeAt 31 March 2012, the nominal amount registered for both Kontrollbank AG (OeKB), which has now been operating asequities and fixed income (both private and public) totalled part of the venture since 24 February, and work is ongoing to€1.73 trillion, representing yoy growth of 7.0%. set up connections with other entities over the course of the year.Comparing this figure with the same period of 2011, the numberof settled transactions for 1Q12 fell 0.7%, settling 11,478,674. The REGIS-TR® platform has launched a registry service forThe drop in settlements of equities was offset by an increase commodities and work is currently under way to link the platformin fixed income transactions, particularly within the corporate and to receive confirmation messages of SWIFT transactions.fixed income market. Both projects are to be developed in tandem with final delivery of the platform covering all products.Bolsas y Mercados Españoles 1Q12 1Q11 ∆(Clearing & Settlement Business Unit Income) (Th.Eur.)Revenues 19,528 18,985 2.9% Operating Costs (3,460) (3,297) 4.9% EBITDA 16,068 15,688 2.4% C&S Business unit Activity Overview Number of transactions settled (Quarterly basis) 11,817,758 11,872,322 11,554,541 11,478,674 Operations settled 10,352,266 1Q11 2Q11 3Q11 4Q11 1Q12 Bolsas y Mercados Españoles 1Q12 1Q11 ∆ (Clearing & Settlement Business Unit Activity Overview ) Operations settled 11,478,674 11,554,541 -0.7% Turnover settled (billion euros daily avg.) 287.2 330.5 -13.1% Nominal amount registered (billion euros) 1,727.7 1,614.5 7.0% Bolsas y Mercados Españoles - Business performance - Interim Report (January - March 2012) 15
  16. 16. Business Units Quarter OverviewListingRevenue for the Listing unit over the first quarter of 2012 fell The total volume of new issues admitted to trading on the AIAF2.6% to reach €6,091 thousand. EBITDA stood at €3,776 fixed income market in 1Q12 was €127.4 billion, marking anthousand, down 4.0% on the same figure for 1Q11. 80.0% yoy increase.The market capitalisation of companies listed on the equity Business in short-term debt issues (commercial paper) moremarkets managed by BME at 31 March 2012 stood at €970.9 than doubled with an increase of 106% in comparison to thebillion, down 13.1% yoy. same figure for 1Q11, meanwhile mid- and long-term issues accounted for €75.5 billion, marking a yoy increase of 65%. AInvestment flows in listed shares channelled through the large part of this increase is due to issues guaranteed by theexchange reached €6.9 billion in the first quarter of 2012, Spanish state, which has renewed its scheme. If we strip outwith highlights including the rights issues of Banco Santander, these issues, growth exceeds 7%.Banco Popular and Banco Sabadell. The improvement in issues has brought about an increase inThe companies Suávitas, Carbures and Bionaturis have been the private fixed income outstanding balance, which totalledadmitted to the growth segment of the alternative exchange €906.7 billion at 31 March, up 6.1% on the same figure forMAB Empresas en Expansión. These three recent arrivals 1Q11 and marking the first time the outstanding balance hasbring the total number of companies admitted to this segment broken the 900 billion mark. For the reasons discussed above,to 21. highlights for the quarter include the sharp increase in the outstanding balance of commercial paper, which surged 156%,There were 3,064 SICAVs admitted to trading on the Alternative while the outstanding balance of preferred stock lost 40% as aEquity Market (MAB) at 31 March 2012, 1.9% fewer than the product of buy-backs from individual investors and swaps withrecent figure for 1Q11. customers. In similar fashion, mortgage- and asset-backed bonds shed more than €24 billion, while the balance of coveredThe number of warrants listed for trading during the first quarter bonds (cédulas) increased by €45.5 billion.surged 10.9% yoy to 1,716. Bolsas y Mercados Españoles 1Q12 1Q11 ∆ (Listing Business Unit Income) (Th.Eur.) Revenues 6,091 6,252 -2.6% Operating Costs (2,315) (2,317) -0.1% EBITDA 3,776 3,935 -4.0% Bolsas y Mercados Españoles 1Q12 1Q11 ∆ (Listing Business Unit Activity Overview)Equity Market Number of Companies listed 3,325 3,383 -1.7% Market Capitalisation listed (Mill.Euros) 970,877 1,117,273 -13.1% New shares nominal listed (Mill. Euros) 659 983 -33.0% Investment Flows channeled through Exchange (Mill. Euros) New listed companies 21 8,432 -99.8% Already listed companies 6,861 7,882 -13.0% Fixed Income Market AIAF Fixed Income volume admitted (nominal Mill. Euros) 127,395 70,791 80.0% Public Debt Outstanding Balance (Mill. Euros) 676,193 610,122 10.8% Private Fixed Income Outstanding Balance (Mill. Euros) 906,701 854,967 6.1% 16 Bolsas y Mercados Españoles - Business performance - Interim Report (January - March 2012)
  17. 17. Business Units Quarter OverviewMarket Data & InformationDuring the first three months of 2012, the Information unit New subscribers are steadily signing up for the recentlyposted revenue of €8,856 thousand (+12.9%). EBITDA stood launched “Reference Data” and “End of Day” services.at €7,005 thousand, up 8.7% yoy. Business within the unit focused on adding new content toThe Information unit fared well up to 31 March 2012, not only the “Real Time” products following the integration of newin the number of subscribers to primary-source reporting instruments on the BME markets; on ensuring the informationchannels, but also in direct connections to and customers of flows received via the BME Data Feed platform are suitableBME information servers. In comparison to the situation 1Q11, for the impending migration of the Equities trading platform tothe total number of end users climbed 6.1%, while customers SMART architecture; and on adding information on derivatives,and direct connections experienced 6.8% and 2.4% growth, the aim being to simplify content management for recipients ofrespectively. information, while also lowering their maintenance costs, thus enhancing the service provided. Bolsas y Mercados Españoles 1Q12 1Q11 ∆ (Information Business Unit Income) (Th.Eur.) Revenues 8,856 7,841 12.9% Operating Costs (1,851) (1,394) 32.8% EBITDA 7,005 6,447 8.7% Bolsas y Mercados Españoles - Business performance - Interim Report (January - March 2012) 17
  18. 18. Business Units Quarter OverviewDerivativesTotal contracts traded within the derivatives business over the contracts. March marked an all-time high in trading of equityfirst quarter of 2012 came in 4.2% lower than for 1Q11, with options, with a grand total of 4,501,655 contracts, besting themixed performances from the different product segments. previous high seen back in March 2001.Trading in the various contracts pegged to the IBEX 35® was The combined notional volume of derivatives on individualdown on the same period of 2011. Notional trading value in this stock dropped 16.8% on account of the widespread decline insegment slipped 44.6%. share prices.Derivatives on individual stocks put on a better showing. In accordance with reported trading volumes, the DerivativesFutures on stock saw a slight drop, but maintained high levels business unit posted revenue of €5,451 thousand for the firstof trading. Equity options gained 12.9% to reach 9.4 million quarter, 20.2% down on the same figure for 2011, while EBITDA Bolsas y Mercados Españoles 1Q12 1Q11 ∆ (Derivatives Business Unit Income) (Th.Eur.) Revenues 5,451 6,829 -20.2% Operating Costs (2,913) (2,779) 4.8% EBITDA 2,538 4,050 -37.3% Derivatives Business unit Activity Overview Index derivatives contracts traded IBEX 35® Futures MiniIBEX 35® Futures IBEX 35® Options umber of contracts (Th.) 1,575 1,473 1,281 Nu 1,022 900 936 952 723 598 611 487 502 540 495 482 1Q11 2Q11 3Q11 4Q11 1Q12 Derivatives Business unit Activity Overview Stock derivatives contracts traded Stock Futures Stock Options umber of contracts (Th.) 9,094 9,445 8,368 8,437 8,006 7,088Nu 6,164 5,905 5,784 5,230 1Q11 2Q11 3Q11 4Q11 1Q1218 Bolsas y Mercados Españoles - Business performance - Interim Report (January - March 2012)
  19. 19. Business Units Quarter Overviewamounted to €2,538 thousand, and 37.3% down year on year. the negative effects of the ban seen during the first half of the quarter. The average volume of contracts has rallied byThe open interest comprised 13.4 million contracts at 31 March, 66.9% since the lifting of the short selling ban, while for specific8.2% up yoy. products, trading in IBEX 35® and Mini futures has increased on average by 48.2% and 40.9%, respectively; options on theOn 15 February 2012, the Spanish securities market regulator IBEX 35® have climbed 117.0%; and futures and options on(Comisión Nacional del Mercado de Valores, or CNMV) lifted shares have reported a combined relative gain of 67.9% inits ban on the short selling of financial securities. The lifting the number of contracts. All these increases could be seen asled to an immediate and welcome improvement in trading important improvements on trading volumes.volumes over the second half of the quarter, partially offsetting Bolsas y Mercados Españoles 1Q12 1Q11 ∆ (Derivatives Business Unit Activity Overview) Derivatives Contracts (number of contracts) 18,534,542 19,338,165 -4.2% Index Derivatives (number of contracts) IBEX 35® Index Futures 1,022,021 1,575,272 -35.1% Mini IBEX 35® Index Futures 495,466 900,481 -45.0% IBEX 35® Div Impact Futures 555 1,155 -51.9% IBEX 35® Index Options 482,000 487,175 -1.1% Total notional value (Mill.Euros) 94,716 171,041 -44.6% Equity Derivatives (number of contracts) Equity Futures 7,087,730 8,006,039 -11.5% Equity dividend Futures 1,500 0 Equity Options 9,445,270 8,368,043 12.9% Total notional value (Mill.Euros) 15,366 18,471 -16.8% Open Interest (number of contracts) 13,389,171 12,374,644 8.2% Number of Trades 832,110 1,455,553 -42.8% Bolsas y Mercados Españoles - Business performance - Interim Report (January - March 2012) 19
  20. 20. Business Units Quarter OverviewFixed IncomeThis business unit includes only cash fixed income trading. to buy-backs by issuers. Although not particularly significant in terms of trading volume, produced a large number ofOver the first quarter of 2012, total trading in private fixed income transactions, which helped to almost double the number ofsecurities stood at €753.5 billion, marking a yoy drop of 58.8%. trades reported in 1Q11.This sharp decline was due to repo and reverse repo activity as Revenue from trading of fixed income products up in 1Q12financial institutions look to raise capital. The European Central amounted to €2,905 thousand, representing a 26.4% increaseBank’s recent policy of pumping liquidity into the markets has on the same period of 2011. EBITDA climbed to €2,151made fixed-income transactions backed with collateral reduce thousand, up 37.1% yoy.significantly, and this has impacted levels of trading. Trading in public debt on electronic platforms came in at €19.3Repos and reverse repo business during the first three months billion, down 29.5% on the first quarter of 2011, while trading inof 2012 stood at €605.6 billion, 65% down on figures for 1Q11. other equity market fixed income totalled €14.0 billion, up 9.7%Trading to maturity, on the other hand, climbed 51% year on yoyyear to reach €147.9 billion.It is worth noting the increased trading in preferred stock due Bolsas y Mercados Españoles 1Q12 1Q11 ∆ (Fixed Income Business Unit Income) (Th.Eur.) Revenues 2,905 2,298 26.4% Operating Costs (754) (729) 3.4% EBITDA 2,151 1,569 37.1% Fixed Income Activity Fixed Income Turnover Other Equity Market Fixed Income Public Debt Private Fixed Income 12,771 27,357 17,747 14,564 14 564 20,983 , 28,163 16,720 12,764 (Mill. Euros) 1,827,356 14,004 19,296 1,202,249 1,189,640 1,225,857 753,517 1Q11 2Q11 3Q11 4Q11 1Q12 Bolsas y Mercados Españoles 1Q12 1Q11 ∆ (Fixed Income Business Unit Activity Overview) Public Debt Turnover (Mill. Euros) 19,296 27,357 -29.5% Private Fixed Income Turnover (Mill. Euros) 753,517 1,827,356 -58.8% Other Equity Market Fixed Income Turnover (Mill. Euros) 14,004 12,771 9.7% Fixed Income Total Turnover (Mill. Euros) 786,817 1,867,484 -57.9% 20 Bolsas y Mercados Españoles - Business performance - Interim Report (January - March 2012)
  21. 21. Business Units Quarter OverviewIT & ConsultingThe IT and Consulting unit is continuing to develop projects Focusing on continuity services, the number of clients climbedrelated to different areas and activities. 5% yoy, while the range of services was also diversified by extending continuity and contingency services to embraceStarting with post-trade services, the company reported healthy hosting services.subscription rates for the Proximity services offered via VisualTrader, which grew 61.5% yoy in the number of entities signed In the field of financial communication, the customer base leaptup for the service. The smart order routing service turned in a 78% owing to the increased service coverage by entity typesolid performance in terms of the number of terminals connected and region.(+15.9%), while cash volumes and the number of ordersrouted through the VT network slumped 12.9% and 14.2%, Turning to compliance, transaction reporting and market abuserespectively, hit by the ban on short selling and corrections in fared well in terms of customer numbers and transactions.market prices. The various activities handled by the unit generated combinedThe progress made by the unit over the quarter was largely on revenue of €4,102 thousand for the quarter, up 11.2% on thethe back of business continuity, financial communication (BME same figure for 1Q11, while EBITDA for the unit climbed toHighWay) and compliance related services. €1,484 thousand, marking a 45.1% increase on 2011. Bolsas y Mercados Españoles 1Q12 1Q11 ∆ (IT & Consulting Business Unit Income) (Th.Eur.) Revenues 4,102 3,690 11.2% Operating Costs (2,618) (2,667) -1.8% EBITDA 1,484 1,023 45.1% Bolsas y Mercados Españoles - Business performance - Interim Report (January - March 2012) 21

×