Erik Wenngren - Euronext presentation


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  • 1/3 of all capital raised last year was raised on Euronext
  • 1/3 of all capital raised last year was raised on Euronext
  • Significant potential in the euro zone: Room for Growth
  • Â Â Erik Wenngren - Euronext presentation

    1. 1. EURONEXT GATEWAY TO THE € URO ZONE Holland France Portugal Belgium November 2005
    2. 2. Euronext today <ul><li>Europe’s largest central order book securities market </li></ul><ul><ul><li>€ 6.5 billion average daily turnover </li></ul></ul><ul><ul><li>€ 9.4 billion fresh capital raised in 2004 and €15.6 billion YTD </li></ul></ul><ul><ul><li>Over 25% of listed companies are international </li></ul></ul><ul><li>The world’s second largest derivatives market </li></ul><ul><ul><li>Business worth €1,000 billion traded every day </li></ul></ul><ul><ul><li>Extensive range of financial and commodity derivatives products </li></ul></ul><ul><li>A leading supplier of exchange trading technology </li></ul><ul><ul><li>Used worldwide by most leading cash & derivatives Exchanges </li></ul></ul><ul><li>The world’s first cross-border exchange </li></ul><ul><ul><li>Operations in 5 European countries and the USA </li></ul></ul>Source: Euronext
    3. 3. Euronext’s competitive position in Europe MARKET CAP. European cash equity market capitalisation CENTRAL ORDER BOOK T rading value ( in billion € ) Sources: FESE, Euronext, as of Dec 2004 LSE 29% OMX 6% Milan 8% Spanish Exchanges 10% DB 12% EURONEXT 25% SWX 9% <ul><li>Largest equity market in continental Europe </li></ul><ul><li>Largest central order book in Europe </li></ul>
    4. 4. Euronext – International Listings Breakdown of listed companies Domestic Co’s 75 % International Co’s 25% 25% of Euronext’s 1300 companies are international Selected international companies: Arcelor, Daiwa, Daimler Chrysler, Deutsche Bank, Exxon Mobil, Fiat, Ford, General Motors, General Electric, Hitachi, Honda, HSBC, McDonalds, Maroc Telecom, Mitsubishi Electric, NEC, SES Global, Sharp 7 Israeli companies listed
    5. 5. More capital raised than any other European exchange (in 2004) <ul><li>Euronext helped businesses raise €9.4 billion fresh capital in 2004 </li></ul><ul><li>52 new listings </li></ul><ul><li>Europe’s largest IPO: Belgacom </li></ul><ul><li>Cross-border successes: </li></ul><ul><ul><ul><li>SES Global (Luxembourg) </li></ul></ul></ul><ul><ul><ul><li>Maroc Telecom (Morocco) </li></ul></ul></ul><ul><ul><ul><li>Cimex Pharma (Switzerland) </li></ul></ul></ul><ul><ul><ul><li>Sacyr Vallehermoso (Spain) </li></ul></ul></ul><ul><ul><ul><li>Hammerson (UK) </li></ul></ul></ul>Capital Media Group € 3,600 mn € 1,300 mn € 1,200 mn € 507 mn € 1,200 mn € 217 mn Selected Deals Milestones:
    6. 6. Continued strong performance in 2005 <ul><li>€ 15.6 billion fresh capital raised in 2005 YTD </li></ul><ul><li>57 new listings </li></ul><ul><li>The world’s largest IPO 2005: EDF </li></ul><ul><li>An additional Mkt cap of € 99 bn </li></ul><ul><li>Large listings in various sectors: </li></ul><ul><ul><li>Utility: EDF ( € 58.6 bn) </li></ul></ul><ul><ul><li>Energy: GDF (€ 22.6 bn) </li></ul></ul><ul><ul><li>Investment funds: RHJ Int’l (€1.53 bn) </li></ul></ul><ul><ul><li>Hi-tech: Tom Tom (€ 1.86 bn) </li></ul></ul>Selected Deals (capital raised) Milestones: € 7,000 mn € 1,060 mn € 657 mn EDF GDF Telenet Sanef RHJ International Tom Tom € 837 mn € 467 mn € 3,482 mn
    7. 7. Unique access to European asset managers <ul><li>Geographical split of investment fund assets typifies wider European </li></ul><ul><li>investment profile </li></ul><ul><li>Huge pool of AUM - € 4.2 Trillion </li></ul><ul><li>Good growth rates >10 % annually </li></ul><ul><li>Euro zone countries dominate – 85% of total AUM </li></ul>Source: European Fund and Asset Management Association
    8. 8. Unique access to European asset managers Source: European Fund and Asset Management Association <ul><li>Fragmented market – cross-border access is key </li></ul><ul><li>Euronext – gives London access and broad Eurozone entry </li></ul>
    9. 9. EURONEXT - Listing requirements -
    10. 10. Listing requirements – overview
    11. 11. Eurolist - the Main Board <ul><li>One single regulated market - one rule book </li></ul><ul><li>One single cross-border trading platform </li></ul><ul><li>Borderless: </li></ul><ul><li>Companies are classified in alphabetical order and identified on the basis of capitalization rather than on geographic location </li></ul><ul><ul><ul><ul><li>Large caps (group A: > €1 billion) </li></ul></ul></ul></ul><ul><ul><ul><ul><li>Mid caps (group B: between €150 million and €1 billion) </li></ul></ul></ul></ul><ul><ul><ul><ul><li>Small caps (group C: less than €150 million) </li></ul></ul></ul></ul><ul><li>Equal opportunity for international companies to join key indices </li></ul>
    12. 12. Eurolist - Flexible services for int’l companies <ul><li>Language </li></ul><ul><ul><li>English – or local Euronext language, at issuer’s wish </li></ul></ul><ul><li>Listing instruments </li></ul><ul><ul><li>Shares </li></ul></ul><ul><ul><li>Depositary Receipts (EDR, GDR, ADR) </li></ul></ul><ul><ul><li>Corporate bonds </li></ul></ul><ul><ul><li>Derivative instruments, including Convertibles, Options, Warrants and Futures </li></ul></ul><ul><li>Currency </li></ul><ul><ul><li>Euro - the world’s second most important currency </li></ul></ul><ul><ul><li>Or any other major currency </li></ul></ul><ul><li>Accounting standards </li></ul><ul><ul><li>IFRS – or any standard accepted by the regulator </li></ul></ul><ul><li>Regulatory environment </li></ul><ul><ul><li>Sound regulatory framework – provides credibility </li></ul></ul><ul><ul><li>No Sarbanes Oxley regulation! </li></ul></ul><ul><ul><li>Tailor-made for cross-border business (European Prospectus Directive) </li></ul></ul>
    13. 13. Alternext – the Junior Market <ul><li>Euronext launched Alternext on 17 May 2005 </li></ul><ul><li>Alternext is an exchange- regulated market </li></ul><ul><ul><li>Designed for small and mid-cap companies </li></ul></ul><ul><ul><li>Easy, cost-effective access to the capital markets </li></ul></ul><ul><ul><li>Compliance with investor disclosure rules </li></ul></ul><ul><ul><li>Open for companies from all sectors </li></ul></ul>
    14. 14. Alternext - addressing a clear need <ul><li>Small and mid caps play an active and important role in the euro-zone: </li></ul><ul><ul><li>> 1 million small and mid-sized firms*….. </li></ul></ul><ul><ul><li>… ..nearly 30% of which are located in the Euronext countries </li></ul></ul><ul><ul><li>32 million employees - 38% of total value added </li></ul></ul><ul><li>A tougher European regulatory environment restricts access for small and mid-caps , but Alternext provides an effective alternative. </li></ul><ul><ul><li>(*) fewer than 250 employees and sales below €50 million </li></ul></ul>Less than 1% of small and mid-sized companies are listed at present!
    15. 15. Alternext to date <ul><li>Current market cap: € 657m </li></ul><ul><li>Mkt cap (at issue price): € 593m </li></ul><ul><li>Mkt perf. since launch: + 11% </li></ul><ul><li>No. listed companies: 16 </li></ul><ul><li>Average size: € 37 m </li></ul><ul><li>Average deal size: € 7.2 m </li></ul><ul><li>No. Listing Sponsors: 28 </li></ul>18 Nov. 05
    16. 16. Alternext: Easy access for listing applicants <ul><li>The decision to go public must be made by the company's managing body </li></ul><ul><li>Listing requirements are simple </li></ul><ul><li>Applicants need only: </li></ul><ul><ul><li>appoint a listing sponsor </li></ul></ul><ul><ul><li>submit the last two years' financial statements </li></ul></ul><ul><ul><li>(IFRS not mandatory…..but recognised accounting standards offer investor comfort) </li></ul></ul><ul><li>Two procedures can be used: </li></ul><ul><ul><li>listing with a public offer </li></ul></ul><ul><ul><li>direct listing without public offer </li></ul></ul>
    17. 17. Option 1: Listing with public offer <ul><li>A “traditional” listing procedure tailored to SMEs: </li></ul><ul><ul><li>Minimum free float: €2.5 million </li></ul></ul><ul><ul><li>The prospectus approved by the regulator </li></ul></ul><ul><li>EU Prospectus Directive facilitates cross- border offerings </li></ul><ul><li>Public offering allows for broad marketing campaign </li></ul><ul><li>Builds better market liquidity </li></ul>
    18. 18. Option 2: Direct listing without public offer <ul><li>An innovative listing process – with less stringent requirements </li></ul><ul><li>Companies must have made a private placement with qualified investors: </li></ul><ul><ul><li>within two years prior of the listing application </li></ul></ul><ul><ul><li>placing at least €5 million </li></ul></ul><ul><ul><li>five or more qualified investors </li></ul></ul><ul><li>Companies must publish an offering circular, which is not reviewed by the regulator, but under the responsibility of the Listing Sponsor and the Issuer </li></ul><ul><li>Easy access…but it does not create real liquidity </li></ul>
    19. 19. The role of the Listing sponsors <ul><li>Mandatory assistance by a Euronext-recognised and approved intermediary </li></ul><ul><li>The listing sponsor plays two main roles as the company's long-term partner: </li></ul><ul><ul><ul><li>helps and advises the applicant to prepare for an Alternext listing including preparing the prospectus or information memorandum </li></ul></ul></ul><ul><ul><ul><li>supports and guides the issuer throughout its life as a listed company, reminding it of disclosure requirements (initially for at least a 2 year period) </li></ul></ul></ul><ul><li>The listing sponsor makes a contractual commitment to Euronext to ensure that listed companies meet their disclosure requirements. </li></ul>
    20. 20. EURONEXT - Case Studies -
    21. 21. Eurolist case study: TOM TOM N.V. Activity: TomTom is a leading provider of personal navigation products and services to the consumer mass market. TomTom products include integrated devices, which enable to navigate right out of the box (e.g. screen in car) and non-integrated solutions for navigation on third-party devices like PDAs and smartphones. Key figures (2004): Revenues: € 192.4 mn Net profit: € 27.7 mn Deal size (June 05): Valuation: € 1,857 mn PE ratio: x67 Funds raised: € 467 mn (of which capital increase of € 124 mn) Goldman Sachs International and Lehman Brothers acted as joint leads.
    22. 22. Eurolist case study: TOM TOM N.V. Allocation by Style Allocation by Geography Share Allocation 1
    23. 23. Eurolist case study: TOM TOM N.V. <ul><li>Share price performance 6 months: + 68% </li></ul><ul><li>Free float: 29% </li></ul><ul><li>Trading activity (daily average): € 18.7 million </li></ul><ul><li>Index inclusion: EURONEXT150 </li></ul>
    24. 24. Alternext case study: SATIMO <ul><li>Activity: </li></ul><ul><li>Satimo specializes in designing, manufacturing, and marketing multi-sensor electronic scanning systems for real-time viewing of electromagnetic wave fields. </li></ul><ul><li>Sales by segment: radio communications (77.9%), automotive (9.5%), </li></ul><ul><li>Global sales: France (16.3%), Europe (24.6%), Asia (35.9%), and US (23.2%). </li></ul>Key figures (2004): Revenues: € 8.9m Net profit: € 1.2m Profit growth rate: 100% Deal Size (28 June 05): Valuation: € 44m PE ratio: x37 Funds raised: € 12.9m 5.8 times over-subscription Broad take up among institutional investors, incl. 30% placed in the UK Listing Sponsor: Avenir Finance Corporate Placing agent: Ixis Midcaps
    25. 25. Alternext case study: SATIMO <ul><li>Current valuation of € 55m </li></ul><ul><li>Value increased by 25% in 6 months </li></ul><ul><li>Issue price: € 17.77 </li></ul><ul><li>Current share price: € 22 </li></ul><ul><li>F ree float: 29% </li></ul>Market figures Philippe Garreau, Chairman & C EO of Satimo, commented:  “ We are delighted with the success of the IPO.  Through the IPO we have acquired a strong notoriety to further expand our business.” + 25%
    26. 26. EURONEXT - Why chose Euronext -
    27. 27. Why join the Euronext markets? <ul><li>Gateway to the €urozone </li></ul><ul><ul><ul><li>Publicity: 453 million consumers </li></ul></ul></ul><ul><ul><ul><li>Huge pool of assets under management </li></ul></ul></ul><ul><ul><ul><li>Euro – key currency </li></ul></ul></ul><ul><li>Leading European exchange with a pan-European reach </li></ul><ul><ul><ul><li>Top-ranked in raising fresh capital </li></ul></ul></ul><ul><li>Excellent market liquidity </li></ul><ul><ul><ul><li>Largest central order book trading in Europe </li></ul></ul></ul><ul><li>An exchange without borders </li></ul><ul><ul><ul><li>Truly cross-border </li></ul></ul></ul><ul><ul><ul><li>International companies can join local indices </li></ul></ul></ul><ul><li>A recognised marketplace </li></ul><ul><ul><ul><li>Sound regulatory framework </li></ul></ul></ul><ul><ul><ul><li>Enhancing company’s profile to international standards </li></ul></ul></ul>
    28. 28. Need more information? Please contact us: <ul><li>Ms. Martine CHARBONNIER </li></ul><ul><li>Executive Director – Listing & Issuer Relations </li></ul><ul><li>Phone: + </li></ul><ul><li>Email: </li></ul><ul><li>Mr. Erik WENNGREN </li></ul><ul><li>Director - International Listings </li></ul><ul><li>Phone: +44.20.7379.2087 </li></ul><ul><li>Email: </li></ul><ul><li>Mr. Nathanaël MAUCLAIR </li></ul><ul><li>Deputy Director - International Listings </li></ul><ul><li>Phone: +33 </li></ul><ul><li>Email: </li></ul><ul><li> </li></ul>
    29. 29.
    30. 30. Back-up Slides
    31. 31. Appropriate disclosure requirements and lower communication costs <ul><li>Financial transparency requirements </li></ul><ul><ul><li>tailored to small and mid caps </li></ul></ul><ul><ul><ul><li>choice of disclosure channel </li></ul></ul></ul><ul><ul><ul><li>no quarterly turnover disclosure required </li></ul></ul></ul><ul><ul><li>address investors' needs for information </li></ul></ul><ul><li>The applicant commits to: </li></ul><ul><ul><li>make periodic disclosures: half-yearly accounts and audited annual accounts </li></ul></ul><ul><ul><li>make ongoing disclosure of price sensitive information </li></ul></ul><ul><ul><li>report directors' trades </li></ul></ul><ul><ul><li>publish change of ownership at specific threshold (50% and 95%) since it may affect company strategy </li></ul></ul>
    32. 32. Hybrid trading model – enhanced liquidity <ul><li>A model to take into account specific liquidity profiles: </li></ul><ul><ul><li>The aim is to enhance liquidity in stocks with a smaller free float </li></ul></ul><ul><ul><li>The market model combines central order book (one auction at end of day) and continuous market making to favour liquidity </li></ul></ul><ul><ul><li>Market makers will select stocks and compete to offer best price </li></ul></ul><ul><ul><li>Continuous trading by market makers </li></ul></ul><ul><ul><li>For stocks without market makers, the auction ensures a daily reference price </li></ul></ul><ul><ul><li>Investors can choose how their orders are to be executed </li></ul></ul><ul><li>The trading session is organised to favour the most efficient price execution </li></ul>