UNLOCKING THE POWER OFOUR COMMUNITYINVESTOR DAY 2012April 2, 2012
Legal DisclaimersDisclaimer and Cautionary Note Regarding Forward-Looking StatementsThis presentation may contain forward-...
Agenda     Presentation                    Speaker           Start Time     Strategic Overview           Duncan Niederauer...
STRATEGIC OVERVIEWDuncan NiederauerChief Executive Officer
OVERVIEW
Our Strategy Drives Value for Shareholders• Our mission is to Empower the World’s Capital Markets Community to  Innovate a...
STRATEGY
The Assumptions Underpinning our Strategy areTruer Than Ever• Client demand for efficient market access and optimized tech...
And Powerful Proof Points Demonstrate thatour Strategy is Working  Amex Options Market Share                              ...
Unlocking the Power of our CommunityOur unique combination of diverse                                                     ...
GROWTH
Macro Trends Are Leading to a “New Normal”1   Reduced risk capital             • Selective investment                     ...
New Normal Creates Opportunities for Growth                             Our Strategy Compass                              ...
Highlighted Growth Initiatives for New Normal1   Clearing                                      4   Market Infrastructure  ...
EFFICIENCY    C   C
Strategic Cost Efficiency Will Add Fuel for Growth•   Our goal is to leverage our asset base more efficiently and create a...
CAPITAL
Disciplined Stewards of Strategic Capital•    We have a track record of being responsible stewards of cash flow and when w...
KEY TAKEAWAYS
Key Takeaways• In light of the macro environment, we have retested, validated  and focused our corporate strategy• As you ...
FINANCIAL UPDATEMichael GeltzeilerGroup EVP & CFO
GROWTH
Financial Progress: 2011 vs. 2009•   Net revenue¹ up 8% over 2 years•   Reduced cost base by ~$380M on a constant $ / cons...
Financial Highlights  $ in M, except EPS                                                                                  ...
Revenue Diversification $ in M            2011 Net Revenue¹                                                               ...
Segment Performance – Net Revenue¹   $ in M$1,600                                                                         ...
Cash Trading & Listings Net Revenue¹ $ in M$500                                              $446$450                     ...
Multi-Year Net Revenue Outlook¹Segment                                        Revenue Growth DriversDerivatives           ...
EFFICIENCY    C   C
Track Record of Successful Integration & CostDiscipline $ in M$250               Annual Expense¹ Savings            (Const...
Expense Base Detail$i M in                2011 Expenses¹                                                                  ...
Project 14 – Overview and Focus Areas• The project will deliver $250M in annualized cost savings by 2014• Series of short,...
Updated Expense Guidance for 2012$i M in   Expenses1   •   2011 expense base of $1,666 million; prior 2012 guidance was fo...
1,2Segment Performance – Adjusted EBITDA   $ in M$1,400                                                                   ...
Segment Performance – Margins60%                     55% 55%                                          Operating Margin¹   ...
Margin Expansion Drivers (2012 – 2014)•   Information Services & Technology Solutions segment achieves 30% or    higher op...
CAPITAL
Debt and Cash Flows• In 2011, debt leverage improved significantly as we paid down debt,  generated an increase in EBITDA ...
Minority Investments: Potential Sources ofAdditional Capital   Investment         Ownership Position   • MCX              ...
Dividend• NYX has paid a $0.30 Dividend per share per quarter ($1.20 annually) since Q2‘08• The 2012 dividend payout on 20...
Share Buyback•   During Q4 2011, a total of 3.7 million shares were repurchased at an    average price of $26.96 per share...
Guidance for 2012 CapitalCapital•   CAPEX is expected to be above FY 2011 ($170 million) due to the    clearing b ild t an...
Delivering Double-Digit Shareholder ReturnsTargeting double-digit TSR over the next few years driven by a 4%dividend yield...
BREAK
DERIVATIVESNYSE LIFFE | NYSE LIFFE U.S. | NYSE LIFFE CLEARING | NYSE ARCA OPTIONS | NYSE AMEX OPTIONS
DERIVATIVESGarry JonesGroup EVP, Head ofGlobal D i iGl b l Derivatives
OVERVIEW
Contents –   Strategy –   Metrics and Trends –   Growth Drivers     •   EU Derivatives     •   Clearing & OTC     •   U.S....
STRATEGY
NYSE Euronext Global Derivatives                                                Global Derivatives                        ...
Expanding Global Footprint ~20%1 of volume in                                                    Strong relationships   Ex...
The Power of the Community for DerivativesOver 80%1 of EU Cash                                                            ...
Global Derivatives Led Growth Opportunities                             Our Strategy Compass                              ...
METRICS AND TRENDS
Steady Growth and Diversification of Volumes                    NYX Global Derivatives                                    ...
NYSE Liffe Volume Breakdown                       Interest rate products                                               Equ...
Customer Types by Product       Interest rate products                     p                                              ...
Cautious Sentiment, but Positive Macro OutlookRisky macro environment dampened                                            ...
GROWTH
Compelling Opportunities for Core Growth   Areas of Investment for 2012-2014Through combination of organic and M&A        ...
EUROPEAN DERIVATIVES
Growth Driver: Swapnote® Futures    •            Increased regulatory pressure for centralised trading & clearing    –    ...
Growth Driver: Gilt Futures                                      Long Gilt futures                                        ...
Growth Driver: Bclear MSCI Index Futures  •   Over $7 trillion1 benchmarked to MSCI indices globally  •   Index futures li...
Growth Driver: “Market Route”Access multiple exchanges through one connection to SFTI                                     ...
Growth Driver: Retail Derivatives Market - CFDs•        Contracts For Differences (CFD)     –     Provide leveraged, margi...
Growth Driver: A New CFD Model                 New business model, utilising an MTF and a ‘partner’                 model,...
DERIVATIVES CLEARINGAND OTC
CLEARINGMark IbbotsonEVP & Head of Global Clearing
Unlocking the Power of the Community in Clearing        Definition                   Strategy                  Delivery Ex...
Strategy for EU Clearing European  Listed      Full-service clearing house completion in the UK for all listedDerivatives ...
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Nyse strategies media day

  1. 1. UNLOCKING THE POWER OFOUR COMMUNITYINVESTOR DAY 2012April 2, 2012
  2. 2. Legal DisclaimersDisclaimer and Cautionary Note Regarding Forward-Looking StatementsThis presentation may contain forward-looking statements, including forward-looking statements within the meaning of thePrivate Securities Litigation Reform Act of 1995. Such forward-looking statements include, but are not limited to, statementsconcerning NYSE Euronexts plans, objectives, expectations and intentions and other statements that are not historical orcurrent facts. Forward-looking statements are based on NYSE Euronexts current expectations and involve risks anduncertainties that could cause actual results to differ materially from those expressed or implied in such forward-lookingstatements. Factors that could cause NYSE Euronexts results to differ materially from current expectations include, but are notlimited to: NYSE Euronexts ability to implement its strategic initiatives, economic, political and market conditions andfluctuations, government and industry regulation, interest rate risk and U.S. and global competition, and other factors detailed inNYSE Euronexts 2011 Annual Report on Form 10-K and other periodic reports filed with the U.S. Securities and ExchangeCommission or the French Autorité des Marchés Financiers In addition, these statements are based on a number of Financiers. additionassumptions that are subject to change. Accordingly, actual results may be materially higher or lower than those projected.The inclusion of such projections herein should not be regarded as a representation by NYSE Euronext that the projections willprove to be correct. This presentation speaks only as of this date. NYSE Euronext disclaims any duty to update the informationherein.Non-GAAP Financial MeasuresTo supplement NYSE Euronext’s consolidated financial statements prepared in accordance with GAAP and to better reflectperiod-over-period comparisons, NYSE Euronext uses non-GAAP financial measures of performance, financial position, or cashflows that either exclude or include amounts that are not normally excluded or included in the most directly comparablemeasure,measure calculated and presented in accordance with GAAP Non-GAAP financial measures do not replace and are not GAAP. Non GAAPsuperior to the presentation of GAAP financial results, but are provided to (i) present the effects of certain merger expenses,exit costs, the BlueNext tax settlement, disposal activities and discrete tax items, and (ii) improve overall understanding ofNYSE Euronext’s current financial performance and its prospects for the future. Specifically, NYSE Euronext believes the non-GAAP financial results provide useful information to both management and investors regarding certain additional financial andbusiness trends relating to financial condition and operating results. In addition, management uses these measures forreviewing financial results and evaluating financial performance. The non-GAAP adjustments for all periods presented arebased upon information and assumptions available as of the date of this release. 2
  3. 3. Agenda Presentation Speaker Start Time Strategic Overview Duncan Niederauer 1:00 PM Financial Update Michael Geltzeiler 1:30 PM Derivatives Garry Jones 2:00 PM Clearing Mark Ibbotson OTC Finbarr Hutchenson NYSE Liffe U.S. Thomas Callahan NYSE Amex Options Steve Crutchfield Break 3:00 PM Cash Trading & Listings Lawrence Leibowitz 3:15 PM Global Listings Scott Cutler European Cash Markets Roland Bellegarde U.S. Cash Markets Joseph Mecane Info. Svcs. & Tech. Sol. Dominique Cerutti q 4:00 PM NYSE Technologies Stanley Young Wrap-Up Duncan Niederauer 4:45 PM Q & A Session All Presenters 4:50 PM 3
  4. 4. STRATEGIC OVERVIEWDuncan NiederauerChief Executive Officer
  5. 5. OVERVIEW
  6. 6. Our Strategy Drives Value for Shareholders• Our mission is to Empower the World’s Capital Markets Community to Innovate and Collaborate• We have been executing effectively against our “community strategy” for 3 years community strategy• Increasing risk correlation, asset class convergence and scarcity of capital means we can drive value for clients and shareholders with our unique combination of markets, technology assets, and diversified revenue streams• We are executing our strategy across 3 axes: Access to GROWTH Operating Leverage and p g g Flexibility for Strategic y g Opportunities EFFICIENCY CAPITAL Deployment• Faster access to new • Common global / shared • Recurring, diversified revenue and market infrastructure revenue model opportunities • Benefits our company and • Strong free cash flow• Ability to exploit inter- can be leveraged by our generation for growth asset class opportunities clients investment and steady dividends 6
  7. 7. STRATEGY
  8. 8. The Assumptions Underpinning our Strategy areTruer Than Ever• Client demand for efficient market access and optimized technology spend across asset classes / borders is increasing• We have unparalleled ability to convene capital, investors and decision makers• Partnership with key clients enhances the value of our markets and our ability to penetrate new ones• Our customer and product sets will be differentiators for emerging market p g g exchange partners• We are in a scale business Unique value can be derived from diverse markets and technology assets under one umbrella 8
  9. 9. And Powerful Proof Points Demonstrate thatour Strategy is Working Amex Options Market Share 15.3% • NYSE Amex Options has tripled its market share1 without5.6% reducing fees 2009 2010 2011 NYXT Revenue • NYXT is halfway to its $1B target and within target margin $444 $490 $363 range 2009 2010 2011 – We attract blue-chip firms and venues as clients • Listings has fortified its global leadership position – NYSE has won 63% of U S Technology IPOs year to date2 U.S. year-to-date – Continued transfer success, including a 3:1 win rate since 2010 NYSE Liffe US • NYSE Liffe U.S. has gained ~10% market share1 of open interest in Eurodollars – New products and partnership with NYPC, DTCC, LCH • Cross-platform synergies evidenced by our continued ability to pull out costs – $670M in constant $ / constant portfolio cost savings since 2008 1 Source: NYSE Euronext 2 Source: Dealogic, based on number of IPOs 9
  10. 10. Unlocking the Power of our CommunityOur unique combination of diverse Access to the world’s largestassets allows early insights into liquidity pool with 31% of allemerging opportunities global cash trading executed on our US and EU Cash platforms NYSE LiffeCore NYSE Liffe enabled NYX expertise in marketthe launch of NYSE Liffe EU Cash US Cash operations and regulationU.S.:U S : our top 10 NYSE is a competitiveLiffe U.S. clients are all differentiator for NYXTclients of NYSE Liffe EU World Class Technology NYSE LiffeOver 80%1 of EU Cash US Options 1500+ NYXT buy side UStrades are executed by customers give NYXNYSE Liffe members unique access to the buy side NYSEOur Technologies solutions drive Listings Common technology underpins Technologiesvolume to our markets: 95%1 of our markets: 65%1 of EUNYSE Liffe U.S. trading is g colocation clients connect toconducted by NYXT clients both NYSE Liffe and EU Cash 1Source: NYSE Euronext 10
  11. 11. GROWTH
  12. 12. Macro Trends Are Leading to a “New Normal”1 Reduced risk capital • Selective investment • Difficult volume environment in the near tterm2 Enhanced role for non- • CCP use levels credit playing field, traditional liquidity suppliers enables new entrants • More direct buyside role3 Established capital pools • Demand for margin offsets, collateral will launch new services re-use and capital optimization across New products and geographies p g g p Normal4 Increased competition • EU post trade frictions decline between execution • SEF + OTF new entrants p platforms5 Higher demand for global • Client cost cutting favors outsourced infrastructure services tech infrastructure • Slower US/EU growth turns investors to emerging markets 12
  13. 13. New Normal Creates Opportunities for Growth Our Strategy Compass Areas of Investment for 2012-2014 Through combination of organic growth and M&A Index Information Products Services • Cl i 1 Clearing Issuer Analytics Services • Risk management and capital 2 3 Listings Market Data efficiency Risk • Issuer services 3 Advocacy Management 1 • Market infrastructure 4 Client Connectivity Markets Clearing 2 • Derivatives product expansion 5 p pPartnerships 5 Capital in New Markets Efficiency • Cross-market innovation 5 Settlement Technology and • Managed technology infrastructure 6 4 Infrastructure Custodyy Global Gl b l Collateral Exchange Management Links 6 Managed & Asset Servicing Hosted Services Minor Presence Expanding Presence Strong Presence 13
  14. 14. Highlighted Growth Initiatives for New Normal1 Clearing 4 Market Infrastructure Build European derivatives clearinghouse Build liquidity centers and connectivity • Phase I on-schedule for summer 2013 • Build out Tokyo liquidity center, launched • Faster time to market for new products Q1 2012 • Operational and capital savings • Offer access to HKEx data center via Fixnetix2 Capital Efficiency 5 Market Expansion/Innovation “Project Trinity” Introduce CFD contracts • Bringing LCH’s SwapClear into the NYPC • MTF partner model “one-pot” “ ” • Leverage our brand to attract retail clients, • Capital savings from correlated cash, who are rapidly adopting CFDs futures and swaps positions3 Issuer Services 6 Managed Technology Expand into capital markets, board Expand our managed services offering services and compliance • Completed 25% investment in Fixnetix • Deepens our relationships with our listed • Provides the ability to manage and deliver issuers and helps us tap new adjacencies 3rd party solutions, which clients t l ti hi h li t increasingly value 14
  15. 15. EFFICIENCY C C
  16. 16. Strategic Cost Efficiency Will Add Fuel for Growth• Our goal is to leverage our asset base more efficiently and create an optimized shared platform for growth• “Project 14” will deliver $250 million in annual savings by the end of 2014• “Project 14” will be co-led by Larry Leibowitz and Michael Geltzeiler with regular progress reports to shareholders g p g p• Series of short-, medium- and long-term actions focused on: Technology Organizational Efficiency / Infrastructure O i ti l Effi i I f t t Business Optimization• Offensive action to maximize the operating leverage of our p p g g platform to deliver best in class service for clients, optimize our infrastructure, and create value for shareholders 16
  17. 17. CAPITAL
  18. 18. Disciplined Stewards of Strategic Capital• We have a track record of being responsible stewards of cash flow and when we have invested, we have sought initiatives that meet or exceed our return metrics Spectrum of capital deployment options: Portfolio Return of Excess Targeted Organic Rationalization: Capital: Acquisitions: Growth: • Discipline to exit or p • $315M in dividends • Strategic M&A with g • Executable new restructure under- annually realized synergies, initiatives that performing • $550M share e.g.: leverage the value of investments buyback underway • NYSE Amex our community, e.g.: • e.g.: NSE, SecFinex • More capital return p • NYFIX • NYSE Liffe Clearing than anyone else in • Metabit • NYSE Liffe U.S. industry • Fixnetix • NYSE Amex Options • CFDs1 1Contracts For Differences 18
  19. 19. KEY TAKEAWAYS
  20. 20. Key Takeaways• In light of the macro environment, we have retested, validated and focused our corporate strategy• As you will hear today, we believe we can unlock further value in our franchise by building better adjacencies between our businesses• We have opportunities to grow through new business initiatives and targeted M&A g• “Project 14” cost efficiency program enhances our capacity to invest and better execute our strategy• Our focus is on disciplined, strategic capital deployment 20
  21. 21. FINANCIAL UPDATEMichael GeltzeilerGroup EVP & CFO
  22. 22. GROWTH
  23. 23. Financial Progress: 2011 vs. 2009• Net revenue¹ up 8% over 2 years• Reduced cost base by ~$380M on a constant $ / constant portfolio basis• Operating margin2 up 500 basis points• Reduced tax rate by 87 basis points• Debt decreased from $2.8B to $2.1B; leverage reduced from 2.6x to 1.6x• Returned over $1B to shareholders via dividends and share buybacks, with another $550M in buybacks underway• Capital expenditures returned to maintenance levels (sub $200M)• Total shareholder return over 100% since the March 2009 low ¹ Net revenues defined as total revenues, less transaction-based expenses comprised of Section 31 fees, liquidity payments, routing and clearing fees. ² Excludes the impact of merger expenses, exit costs, the BlueNext tax settlement, disposal activities and discrete tax items. 23
  24. 24. Financial Highlights $ in M, except EPS $2.55 Diluted EPS²$2,700 Net Revenue¹ & 49% Adjusted EBITDA Margin² $2,672 $2.48 48% $2.45 $2 45$2,650 EPS CAGR: 10% 48% 47% $2.35$2,600 46% $2.25$2,550 45% $2,511 $2.15 44% $2.09$2,500 $2,478 44% $2.04 $2.05 43%$2,450 43% $ $1.95 42%$2,400 $1.85 41%$2,350 40% $1.75 2009 2010 2011 2009 2010 2011 ¹ Net revenues defined as total revenues, less transaction-based expenses comprised of Section 31 fees, liquidity payments, routing and clearing fees. ² Excludes the impact of merger expenses, exit costs, the BlueNext tax settlement, disposal activities and discrete tax items. 24
  25. 25. Revenue Diversification $ in M 2011 Net Revenue¹ 2011 Net Revenue¹ By Product By Geography 2011 Net Revenue1: $2,672 Other 8% UK Tech T h Derivs D i 20% Services Trading $523 13% 29% US 52% $1,394 EUListings 28% EU Cash 17% $754 Trading 11% US Cash Market Trading Data 8% 14% ¹ Net revenues defined as total revenues, less transaction-based expenses comprised of Section 31 fees, liquidity payments, routing and clearing fees. 25
  26. 26. Segment Performance – Net Revenue¹ $ in M$1,600 $1,386$1,400$1 400 $1,323 $1 323 $1,241$1,200$1,000 $861 $826 $800 $723 $600 $490 $444 $400 $363 $200 Derivatives Info. Services & Tech. Cash Trading & Listings Solutions S l ti 2009 2010 2011 ¹ Net revenues defined as total revenues, less transaction-based expenses comprised of Section 31 fees, liquidity payments, routing and clearing fees. 26
  27. 27. Cash Trading & Listings Net Revenue¹ $ in M$500 $446$450 $422 $407$400$350 $332$300 $288 $265$250 $235 $221 $206$200$150$100 $50 $0 st gs Listings European Cash u opea Cas U S Cash U.S. Cas 2009 2010 2011 ¹ Net revenues defined as total revenues, less transaction-based expenses comprised of Section 31 fees, liquidity payments, routing and clearing fees. 27
  28. 28. Multi-Year Net Revenue Outlook¹Segment Revenue Growth DriversDerivatives Medium • NYSE Liffe U.S. • Cl i / OTC Clearing • Contracts-for-Differences (CFDs) • Interest Rate EnvironmentCash Trading & g Low • Expand Issuer Services pListings • New IssuanceInformation Services High • Asia Expansionand Technology • Managed ServicesSolutions • Leverage Data Center Capacity / Connectivity • M&ANYSE Euronext MediumGrowth Level DefinitionHigh Double digit % growthMedium Mid-to-upper single digit % growthLow Low single digit % growth ¹ Assumes volume neutral environment. 28
  29. 29. EFFICIENCY C C
  30. 30. Track Record of Successful Integration & CostDiscipline $ in M$250 Annual Expense¹ Savings (Constant $ / Constant Portfolio Basis)$200 $195 Initiative 2009 2010 2011 Amex Integration X$150 NYSE / Euronext X X $113 Technology Integration NYFIX Synergies X X$100 Data Center Consolidation X X $70 Organizational Efficiencies X X X $50 $0 2009 2010 2011 ¹ Excludes the impact of merger expenses, exit costs, the BlueNext tax settlement, disposal activities and discrete tax items. 30
  31. 31. Expense Base Detail$i M in 2011 Expenses¹ 2011 Expenses¹ By Type 2011 Expenses¹: By Area $1,666 $1 666 6% SG&A Corp. p 17% 16% Derivatives $105 $261 Comp $288 38% 27% $638Pro $638 Internal IT I t lSvcs $29918% $453 Cash Trading & Listings $188 Sys & Info. Svcs. 34% $280 Comms & Tech Sol. $560 11% D&A 16% 17% $260 ¹ Excludes the impact of merger expenses, exit costs, the BlueNext tax settlement, disposal activities and discrete tax items. 31
  32. 32. Project 14 – Overview and Focus Areas• The project will deliver $250M in annualized cost savings by 2014• Series of short, medium and long-term action plans designed to better leverage our asset base and create a shared platform for growth primarily focused on the following areas: • Further harmonize technology platform and standards across businesses Technology • Retire legacy systems Other Points to Note $90M • Reduce costs through near-shoring / off shoring near shoring off-shoring • 1x costs will be • Data Center and Telecommunications optimization communicated as incurred • Centralize market ops and expand shared Organizational services model • We will track savings g Efficiency / • Rationalize contractor relations and report regularly Infrastructure • Streamline organization $90M • Rationalize real estate footprint and facilities costs • At this point, we project run-rate savings g • Rationalize business portfolio realization of 25% by Business • In-source UK risk management (Liffe Clearing) year end 2012 and 60% • Geography by 2013 Optimization $70M 32
  33. 33. Updated Expense Guidance for 2012$i M in Expenses1 • 2011 expense base of $1,666 million; prior 2012 guidance was for C$/CP expenses to be < $1,666 million excluding new business initiatives • Current 2012 expense guidance revised downward as follows: Category 2012 Expenses¹ Notes Core Expense Base $1,580 - $1,600 CFD Initiative $12 Expected to generate positive returns by 2014 and will be self-funding thereafter Clearing build-out $15 Expected to generate positive returns by 2014 and will be self-funding thereafter NYXT I Incremental t l $20-$25 $20 $25 Represents variable expenses; f R t i bl focus i is Growth revenue growth & margin improvement 2012 Range $1,627 - $1,652 ¹ Excludes the impact of merger expenses, exit costs and other discrete non-recurring items. All expense estimates are at FX rates of $1.35/€ and $1.60/£. 33
  34. 34. 1,2Segment Performance – Adjusted EBITDA $ in M$1,400 $1,286$1,200 $1,114 $1 114 $1,068$1,000 $800 $687 $715 $618 $600 $514 $523 $416 $400 $200 $ $174 $124 $78 $0 Derivatives Cash Trading & Info. Services & Tech. NYX Consolidated Listings Li ti Solutions S l ti 2009 2010 2011 ¹ Excludes the impact of merger expenses, exit costs, the BlueNext tax settlement, disposal activities and discrete tax items. 2 Corporate and eliminations segment not shown. 34
  35. 35. Segment Performance – Margins60% 55% 55% Operating Margin¹ 47%40% 37% 35% 40% 38% 32% 33% 26% 20%20% 15%0% Derivatives Cash Trading & Info. Info Services & Tech. Tech NYX Consolidated Listings Solutions 2009 2010 201170% 62% 61% EBITDA Margin¹ 58%60% 54% 50% 50% 48%50% 43% 44%40% 36% 28%30% 21%20%10%0% Derivatives Cash Trading & Info. Services & Tech. NYX Consolidated Listings Solutions 2009 2010 2011 ¹ Excludes the impact of merger expenses, exit costs, the BlueNext tax settlement, disposal activities and discrete tax items. 35
  36. 36. Margin Expansion Drivers (2012 – 2014)• Information Services & Technology Solutions segment achieves 30% or higher operating margin• NYSE Liffe U.S. becomes profitable• Maintenance level CapEx resulting in some D&A runoff• Cost-efficiency program ($250M) – “P j t 14” C t ffi i “Project• Clearing revenue and efficiencies g 36
  37. 37. CAPITAL
  38. 38. Debt and Cash Flows• In 2011, debt leverage improved significantly as we paid down debt, generated an increase in EBITDA and reduced CapEx year-over-year Metric M i YE 2009 YE 2010 YE 2011 Cash $0.5B $0.4B $0.4B Debt $2.8B $2.4B $2.1B Debt / EBITDA Ratio 2.6x 2 6x 2.2x 2 2x 1.6x 1 6x Credit Rating S&P AA Negative Outlook A+ Stable Outlook1 Credit Rating Moody’s A2 Negative Watch A3 Stable Outlook1 $ in M Cap Ex $ in M Free Cash Flows2 $600 $1,000 $497 $8703 $500 $800 $400 $305 $600 $300 $400 $327 $357 $200 $170 $100 $200 $0 $0 2009 2010 2011 2009 2010 2011 ¹ S&P and Moody’s affirmed the stable outlooks assigned in 2010 on February 3, 2012 and February 17, 2012, respectively. 2 Free Cash Flows = Operating Cash Flows (after adjusting for certain non operating items such as purchases and sales of businesses) – Capital Expenditure. 3 Including the impact of exceptionally low tax payments in 2011 ($25m tax paid in 2011). 38
  39. 39. Minority Investments: Potential Sources ofAdditional Capital Investment Ownership Position • MCX • 5% stake • Qatar Exchange • 20% stake • LCH • 9% stake 39
  40. 40. Dividend• NYX has paid a $0.30 Dividend per share per quarter ($1.20 annually) since Q2‘08• The 2012 dividend payout on 2011 profits is 47%, in-line with historical levels NYSE Euronext 2007-2012 Peers 2012 98% 100% 100% 80% 80% 59% 60% 57% 60% 60% 51% 52% 49% 47% 44% 39% 41% 41% 37% 40% 40% 20% 20% 0% 0% 2008 (on 2009 (on 2010 (on 2011 (on Current (on LSE DBAG CME 2007 profit) 2008 profit) 2009 profit) 2010 profit) 2011 profit) Payout ratio on adjusted net income (NI) Payout 2012 (on 2011 adjusted net income) Payout ratio on cash earnings (NI+D&A-CapEx) (NI D&A CapEx)• 4.1% annualized yield based on NYX stock price of $29.00 per share• Target payout ratio has historically been between 35-45% 40
  41. 41. Share Buyback• During Q4 2011, a total of 3.7 million shares were repurchased at an average price of $26.96 per share ($100M in capital)• The previously announced $550M buyback is underway and we intend to complete this program by the end of 2012• The buyback will be accretive to our EPS and preserves future cash flows as each share repurchased saves 4% in future cash dividends p 41
  42. 42. Guidance for 2012 CapitalCapital• CAPEX is expected to be above FY 2011 ($170 million) due to the clearing b ild t and will approximate $200 million i 2012 l i build-out d ill i t illi in• Expect to complete $550 million buy-back in 2012• Long-term financial policy remains between 2 to 2.25x Debt-to-EBITDA; g p y this ratio is more shareholder friendly than most of our peersM&A Discipline• Strategic fit• Realizable synergies• Return exceeds our marginal cost of capital within 2-3 years 42
  43. 43. Delivering Double-Digit Shareholder ReturnsTargeting double-digit TSR over the next few years driven by a 4%dividend yield and earnings growth from the three axes: 1– Targeted Growth and New Business Initiatives 2– Cost Efficiency Initiative of $250M 3– D l Deployment of Excess C it l t fE Capital 43
  44. 44. BREAK
  45. 45. DERIVATIVESNYSE LIFFE | NYSE LIFFE U.S. | NYSE LIFFE CLEARING | NYSE ARCA OPTIONS | NYSE AMEX OPTIONS
  46. 46. DERIVATIVESGarry JonesGroup EVP, Head ofGlobal D i iGl b l Derivatives
  47. 47. OVERVIEW
  48. 48. Contents – Strategy – Metrics and Trends – Growth Drivers • EU Derivatives • Clearing & OTC • U.S. Futures • U.S. Options – Key Takeaways 48
  49. 49. STRATEGY
  50. 50. NYSE Euronext Global Derivatives Global Derivatives Americas Europe Global Partners Warsaw Stock Exchange NYSE Arca NYSE Amex NYSE Liffe NYSE Liffe Tokyo Stock Exchange Options Options US LIFFE Euronext Euronext Euronext Euronext A&M Paris Ams’dam Brussels LisbonEquity Options Equity Options FinancialsIndex Options Tokyo Financial Exchange Index Options Precious FinancialsETF & ETN ETF & ETN Metals Equity index productsOptions Options Index Futures Individual equity products Soft and Agricultural commodities Zhengzhou Commodity Exchange e g ou Co od ty c a ge NYSE Liffe Cleared through Cleared through the OCC Clearing Cleared through LCH.Clearnet SA NYPC1 Dalian Commodity Exchange /LCH.C Ltd Under US Regulation Under EU Regulation 1 Joint venture with DTCC. 50
  51. 51. Expanding Global Footprint ~20%1 of volume in Strong relationships Expanding presencebenchmark European ~10%1 of U.S. options with Tokyo, in Asia, establishingequity index and STIR volume comes from NYSE Liffe listing MOUs with Chinesecontracts comes from Europe JGB and TOPIX exchanges US 1Source: NYSE Euronext 51
  52. 52. The Power of the Community for DerivativesOver 80%1 of EU Cash Common technologytrades are executed by underpins our markets:NYSE Liffe members NYSE Liffe 65%1 of EU colocation clients connect to both NYSE Liffe and EU Cash EU Cash US Cash World Class Technology NYSE Liffe US Options US NYSE Listings Core NYSE Liffe enabled the TechnologiesPartnership models at NYSE launch of NYSE Liffe U.S.: ourLiffe U.S. and NYSE Amex top 10 NYSE Liffe U.S. clients pOptions facilitate growth are all NYSE Liffe EU clients 1Source: NYSE Euronext 52
  53. 53. Global Derivatives Led Growth Opportunities Our Strategy Compass Areas of Investment for 2012-2014 Through combination of organic growth and M&A Index Information Products Services • Cl i 1 Clearing Issuer Services Analytics • EU derivatives clearing project 3 Listings Market Data • Risk management and capital 2 efficiency Risk Advocacy Management • NYSE Liffe U.S. + Project Trinity 1 • 3 Issuer services Client Connectivity Markets Clearing 2 5 • Market infrastructure 4Partnerships Capital in New Markets Efficiency • Derivatives product expansion 5 Technology Settlement and • Swapnote, Gilt futures, MSCI 4 Infrastructure Global Gl b l Custodyy Collateral • Market routing partnerships Exchange Links 6 Management • 5 Cross-market innovation Managed & Asset Servicing • CFDs Hosted Services • US options innovation Minor Presence Expanding Presence Strong Presence • Managed technology infrastructure 6 53
  54. 54. METRICS AND TRENDS
  55. 55. Steady Growth and Diversification of Volumes NYX Global Derivatives NYX Global Derivatives Monthly average traded contracts (m lots) 2011 volume breakdown250 14% CAGR Including US Options Commodities 1% 12% CAGR Excluding US Options Index200 6%150 93 Fixed Income 25% US Options100 48% 12 4050 48 Equity 20% 0 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 Commodities Fixed Income Equity Index US Options Source: NYSE Euronext 55
  56. 56. NYSE Liffe Volume Breakdown Interest rate products Equity products Commodity products Soft Futures Soft Options Equity Futures Equity Options Options Futures Index Options Index Futures Agricultural Options Agricultural Futures 2.5 3.0 90 ADV (m lots) ADV (m lots) ADV (k lots) 80 V V V 2.5 2.0 70 2.0 60 1.5 50 1.5 40 1.0 1.0 30 20 0.5 0.5 10 2007 2008 2009 2010 2011 2007 2008 2009 2010 2011 2007 2008 2009 2010 2011 Source: NYSE Euronext 56
  57. 57. Customer Types by Product Interest rate products p Equity p q y products Commodity p y products End user Retail Bank 4% Bank 16% 15% End User 28% Bank 37% End user Institutional 30% Prop End user Prop 22% Commercial 24% 51% Market Maker Market 16% Prop Maker Algo/HFT Algo/HFT 6% 18% 3% 16% Algo/ HFT 5% Market End user maker Financial Fi i l 5% 4%Key trends• Stable, balanced market participation• Increasing participation from proprietary traders in commodities Source: NYSE Euronext Based on 2011 volume estimates. Different analysis basis to previously presented statistics 57
  58. 58. Cautious Sentiment, but Positive Macro OutlookRisky macro environment dampened NYSE Liffe volumes 4.5trading activity in late 2011/early 2012 ADV (m lots) 4.0 l– Major indices recovered from the lows of Q3 3.5 3.0 2011, but on thin volumes 2.5– Participants reduced capital at risk 2.0 1.5– Uncertainty about th rate of economic U t i t b t the t f i 1.0 recovery and the Greek crisis 0.5 0.0– Substantial risk reduction by retail investors October November December January February March Q4 2011 Q1 2012 Real GDP growth and forecast 5%Steady real GDP growth expected from 4%2012 onwards 3% 2%– US consumer spending is accelerating 1% 0%– Probability of global recession has declined 1% 2005 2006 2007 2008 2009 2010 2011 2012E 2013F 2014F 2% U.S 3% UK 4% Eurozone 5% Source: NYSE Euronext trading volumes through March 26, 2012, Bloomberg 58
  59. 59. GROWTH
  60. 60. Compelling Opportunities for Core Growth Areas of Investment for 2012-2014Through combination of organic and M&A • European derivatives Index Information Products • Cl i 1 Clearing Services – New growth initiatives • EU cash clearing project Issuer – New order routing initiative Analytics Services • Risk management and capital 2 Listings Market– Data New market: CFDs efficiency • Clearing Risk • NYSE Liffe U.S. + Project Trinity Advocacy – Management Full service CCP build • 3 Issuer services Client Connectivity Markets • OTC Clearing • Emerging marketsPartnerships 4 infrastructure – Trinity partnership Capital in New • Cross-market innovation 5 Markets • NYSE Liffe U.S. Efficiency Settlement • CFDs Technology and – Innovative new products Infrastructure • US options innovation Custody Global Exchange • NYSE A Amex & NYSE A Collateral Arca • 5 Derivatives product expansion Management Links Options • Swapnote, Gilt futures, MSCIManaged & Asset Servicing Hosted – Significant technology investment • Market routing partnerships Services • Managed technology infrastructure 6 60
  61. 61. EUROPEAN DERIVATIVES
  62. 62. Growth Driver: Swapnote® Futures • Increased regulatory pressure for centralised trading & clearing – Swapnote provides the opportunity to get IR swap exposure in a post- EMIR scenario 8 • Increasing Euro-zone Yield (%) 10 YR Euro swaps 7 tensions creating demand 10YR German for better correlated, 6 government bond innovative risk management tools 5 4 • Swapnote provides the returns of the swap 3 curve, instead of referencing a single 2 sovereign yield curve 1 99% 99% 95% 57% 3% -11% Correlation (in calendar year) 0 2006 2007 2008 2009 2010 2011 2012 Source: NYSE Euronext analysis, Bloomberg. 62
  63. 63. Growth Driver: Gilt Futures Long Gilt futures UK Gilt issuanceADV (k lots) olume 160 30% Long Gilts % of Bund vo 140 ( 25% 120 13 yrs+ Super-long Gilts 20% 100 80 15% 8 13 yrs Long Gilts 60 10% 40 4 7 yrs Medium Gilts 5% 20 0 0% 1 4 yrs Short Gilts 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 YTD Supportive macroeconomic environment Structural market changes • In light of the European sovereign debt crisis, investors see • Full Gilt product suite increases trading opportunities UK gilts as a safe haven • Innovative Short Gilt incentive scheme driving strong • As central banks indicated a lack of change in interest rates volume growth in short term, there is strong interest towards the long end • Opportunities for Super-long Gilt futures • UK d bt i debt issuance h i has increased substantially d b t ti ll Source: NYSE Euronext trading volumes through March 26, 2012, Eurex monthly reports January 2012-February 2012 and UK Debt Management Office. 63
  64. 64. Growth Driver: Bclear MSCI Index Futures • Over $7 trillion1 benchmarked to MSCI indices globally • Index futures listed exclusively on Bclear in Europe • Building on momentum of ongoing migration from OTC swaps to exchanges Bclear MSCI indices 9 180 ts) s) ADV (k lots Ope Interest (k lot ADV 8 1602009 – 2011 Open Interest• Launched Bclear MSCI franchise: 7 140 Developed & Emerging Markets 6 120 en Over 1 million lots, Large & Mid Caps 5 $35B notional traded in 2011 100 Sector & Industry Groups 4 80From 2012 3 60• Build on upward momentum 2 40• Broaden coverage: 1 20 Emerging Market Countries Regional Small Cap Futures 0 0 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1* 2009 2010 2011 2012 Source: NYSE Euronext. 1 As of 30 June 2011, based on data from eVestment, Lipper and Bloomberg. * NYSE Euronext, Q1 2012 to 26 March. 64
  65. 65. Growth Driver: “Market Route”Access multiple exchanges through one connection to SFTI Trading other partners partners’ products Existing partner members Trading partners’ products NYX Markets SFTI Partner Markets Trading NYX products Existing E i ti NYX membersNYX members trading partner markets b t di t k t New t d N traders for NYX products f d t• New trading opportunities for existing NYX customers • Partner exchange members accessing NYX products• Revenue share arrangements with partner markets • Low cost and low time-to-market will broaden international participation in NYX benchmark products New revenue streams for NYX 65
  66. 66. Growth Driver: Retail Derivatives Market - CFDs• Contracts For Differences (CFD) – Provide leveraged, margined exposure for retail clients – Regulated financial instruments, MiFID allowed expansion to EU markets – Fast growing market segment with significant opportunities, rapidly globalisingUSD billions Retail derivatives(1) - Industry growth 12 10 • Retail FX is a truly 1 global market, l b l k 8 1 2 including US 2 6 1 • CFDs now expanding globally, excluding US 4 1 8 1 1 6 2 5 • The global market for 2 3 3 3 retail FX, CFDs, FSBs was over $8B in 2011 2006 2007 2008 2009 2010 2011 2012 E Retail FX Revenue in USD CFDs revenue in USD FSB revenue in USD 1 Including FX CFDs Source: Company Reports, Aite and market research 66
  67. 67. Growth Driver: A New CFD Model New business model, utilising an MTF and a ‘partner’ model, leveraging the NYX brand and community Targeting retail and professional clients, brokers and liquidity providers in the UK and Europe initially NYX CFD Derivatives Phased introduction through 2013, with products based on commodities, currency pairs, equities and indices Expected to be earnings positive in 2014 67
  68. 68. DERIVATIVES CLEARINGAND OTC
  69. 69. CLEARINGMark IbbotsonEVP & Head of Global Clearing
  70. 70. Unlocking the Power of the Community in Clearing Definition Strategy Delivery Existing clearing presence Full service CCP UK jurisdiction RCH Proven technology P t h l UCP platform l tf Expanded services E d d i Expanded community Derivatives consolidation Integrated solution Partnering OTC clearing User participation Creating value Improved offering Capital and operating efficiencies 70
  71. 71. Strategy for EU Clearing European Listed Full-service clearing house completion in the UK for all listedDerivatives Derivatives Clearing European OTCDerivatives OTC clearing proposition creating new revenue streams ClearingEuropean Cash Long term solution for Cash clearingClearing 71
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