4Q15 Earnings Presentation
February 19, 2016
X
1
Public
Public
Forward Looking Statements
This presentation may contain certain statements that express the management’s expectations, beliefs and
assumptions about future events or results. Such statements are not historical fact, being based on currently
available competitive, financial and economic data, and on current projections about the industries BM&FBOVESPA
works in.
The verbs “anticipate,” “believe,” “estimate,” “expect,” “forecast,” “plan,” “predict,” “project,” “target” and other
similar verbs are intended to identify these forward-looking statements, which involve risks and uncertainties that
could cause actual results to differ materially from those projected in this presentation and do not guarantee any
future BM&FBOVESPA performance.
The factors that might affect performance include, but are not limited to: (i) market acceptance of BM&FBOVESPA
services; (ii) volatility related to (a) the Brazilian economy and securities markets and (b) the highly-competitive
industries BM&FBOVESPA operates in; (iii) changes in (a) domestic and foreign legislation and taxation and (b)
government policies related to the financial and securities markets; (iv) increasing competition from new entrants
to the Brazilian markets; (v) ability to keep up with rapid changes in technological environment, including the
implementation of enhanced functionality demanded by BM&FBOVESPA customers; (vi) ability to maintain an
ongoing process for introducing competitive new products and services, while maintaining the competitiveness of
existing ones; (vii) ability to attract new customers in domestic and foreign jurisdictions; (viii) ability to expand the
offer of BM&FBOVESPA products in foreign jurisdictions.
All forward-looking statements in this presentation are based on information and data available as of the date they
were made, and BM&FBOVESPA undertakes no obligation to update them in light of new information or future
development.
This presentation does not constitute an offer to sell or the solicitation of an offer to buy any securities, nor shall
there be any sale of securities where such offer or sale would be unlawful prior to registration or qualification
under the securities law. No offering shall be made except by means of a prospectus meeting the requirements of
the Brazilian Securities Commission CVM Instruction 400 of 2003, as amended.
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4Q15 and 2015 Highlights
Solid operating performance; bottom line impacted by non-recurring and mainly
non-cash items
Financial highlights
4Q15 (vs. 4Q14)
Financial highlights
2015 (vs. 2014)
Non-recurring items in the
4Q15 and 2015
Total revenues: R$603.3 MM, +1.8%
Total revenues: R$2,458.8 MM, +9.5%
BM&F seg.: R$258.8 MM, +18.9%
BM&F seg.: R$1,074.5 MM, +24.0%
Non-recurring impacts related to
CME Group
Bovespa seg.: R$222.8 MM, -18.2%
Bovespa seg.: R$903.0 MM, -7.6%
Sale of 20% stake
Other business lines (not tied to
volumes): R$121.7 MM, +18.3%
Other business lines (not tied to
volumes): R$481.3 MM, +19.6%
- Total proceeds: R$1,201.3 MM
Adj. expenses¹: R$170.4 MM, -2.6%
Adj. expenses: R$614.3 MM, +3.7%
Oper. income: R$329.8 MM, +16.5%
Oper. income: R$1,366.0 MM, +11.4%
Adj. net income²: R$534.1 MM,
+43.1% (Adj. EPS of R$0.30)
Adj. net income: R$1,819.2 MM,
+23.0% (Adj. EPS of R$1.02)
Interest on Capital (IoC): R$0.25 per
share paid in Dec´15
Total payout: R$1,242.6 MM /R$0.70
per share (73.3% payout ratio, ex CME
and impairment impacts)
- Pre-tax result: R$724.0 MM
- After-tax result: R$474.2 MM
(tax off-set against IoC)
Discontinuity of the equity method
(non-cash)
- Pre-tax result: R$1,734.9 MM
- After-tax result: R$1,130.4 MM
Impairment of the book value of
Bovespa Holding (non-cash)
- Pre-tax impact: R$1,662.7 MM
- After-tax impact: R$1,097.4 MM
Share buyback: R$286.8 MM
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Adjusted to (i) depreciation and amortization; (ii) stock grant plan costs – principal and payroll taxes – and stock option plan; (iii) tax on dividends from CME Group; and (iv) transfer of fines and provisions.
² Adjusted to (i) deferred taxes related to the goodwill; (ii) stock grant plan costs – principal and payroll taxes – net of tax deductibility, and stock option plan; (iii) investment in CME Group under the equity
method of accounting, net of taxes related to dividends; (iv) taxes paid overseas to be compensated; (v) tax credits from IoC; (vi) non-recurring impact from the partial divestment in CME Group; (vii) nonrecurring impact from the discontinuity of the equity method of accounting; and (viii) extraordinary impact of the impairment of goodwill, net of taxes
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Strategic Developments – 2015 Main Landmarks
Delivering on the strategic plan
Building a world-class IT and
operations infrastructure
Developing products and
markets
Clearing BM&FBOVESPA
Greater liquidity for listed products
Equities phase:
Conclusion of IT development in Oct’15
Market makers: 20 new programs in 2015 (active
programs total 35)
Test and certification phases with market
participants throughout 2016
Sec. lending: efforts to attract more lenders (local
pension funds and foreign investors)
Market Development
PUMA Trading System
Inflation futures: 4 contracts re-launched in Jun’15
Resilience: availability of 99.995%
BDRs2: 19 new companies in 2015, totaling 85
Performance: 2015¹ average number of messages
per day grew 345.1% compared to 2010
Tesouro Direto: improvements on the platform
iBalcão
Accomplishments in 2015:
Conclusion of the OTC derivatives migration to the
new platform (NDFs, Swaps, Flex Options)
Launching of new products and functionalities in the
fixed income registration platform
¹ Updated until Dec´15. 2 Non-sponsored Brazilian Depository Receipts
Enhancements to pricing and incentives
1Q15: DMA; securities lending; issuers; and options
on equity-based indices futures
2Q15: mini contracts; Int. Rate in BRL contracts fee
rebalancing; and depositary
3Q15: market data; and OTC derivatives
Corporate Governance for State-owned Companies
Investment in Bolsa de Comercio de Santiago
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4Q15 Revenue Breakdown¹
Business model resilience and revenues growth
Top line growth driven by revenues from financial and commodities derivatives
and increased non-volume related revenues
(in R$ millions)
USD-linked revenues
represented 28% of the total
Total
Revenues
R$603.3 MM
1 The
revenue breakdown considers the revenue lines “others” of the Bovespa segment and “foreign exchange” and “securities” of the BM&F segment, as reported in the financial
statements note 20, within the other revenues not tied to volumes. ² Trade and post-trade.
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Derivatives Market¹
FX depreciation pushed revenues up despite drop in ADV of contracts
REVENUE (in R$ millions)
ADV (in millions of contracts)
Contracts priced in USD² represented ~57% of
derivatives revenues in 4Q15 (~28% of
derivatives ADV)
301
213
246
253
21
21
19
109
86
24
253
31
153
129
96
4Q14
1Q15
Interest rates in BRL
131
102
143
124
80
2Q15
3Q15
Contracts priced in USD²
4Q15
Others
Contracts
4Q14
4Q15
YoY
Interest rates in BRL
1.22
1.04
-15.3%
FX rates
Interest rates in USD
Commodities
0.50
0.26
0.01
0.41
0.29
0.01
-18.1%
11.4%
-51.2%
Mini contracts
Stock indices
OTC
0.42
0.14
0.01
0.60
0.11
0.01
43.5%
-23.2%
-47.9%
TOTAL
2.56
2.45
-4.3%
RATE PER CONTRACT (RPC)
RPC: R$1.753 per contract, +27.3% y-o-y, mainly
reflecting the depreciation of BRL versus USD
2015
Revenue (in R$ millions)
R$1,053.5, +23.9%
ADV (in millions of contracts)
2,860.0, +10.7%
RPC (in R$)
R$1.516, +12.3%
¹ Revenue does not consider the revenue lines “foreign exchange” and “securities” of the BM&F segment, as reported in the financial statements note 20, which totaled R$5.7 million in
the 4Q15 and R$21.0 million in 2015. ² Most of the fees charged on FX, Interest rates in USD and Commodities contracts are referred in USD.
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Equities Market¹
Revenues impacted by lower market capitalization of listed companies and turnover
REVENUE² (in R$ millions)
ADTV (in R$ millions)
Markets
4Q14
Cash Equities
Equities Derivatives
TOTAL²
4Q15
YoY
8,299.5
6,631.3
-20.1%
354.4
231.1
-34.8%
8,654.7
6,865.0
-20.7%
 Average market capitalization fell 12.4%
 Turnover velocity of 79.1% in 4Q15 vs. 87.5% in 4Q14
 4Q14 volume and turnover had been fueled by preelection volatility (ADTV in Oct´14 wasR$10.9 billion)
TRADING AND POST-TRADING MARGINS (in bps)
 Reached 5.254 bps in 4Q15, +4.8% y-o-y (+0.24bps)
2015
Revenue (in R$ millions)
R$881.5, -7.8%
ADTV (in R$ millions)
R$6,792.8, -6.9%
Margins (in bps)
5.275, flat
¹ Revenue does not considers the revenue line “others” of the Bovespa segment, as reported in the financial statements note 20, which totaled R$6.4 million in the 4Q15 and
R$21.5 million in 2015. ²Includes fixed income line.
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Business Lines not Related to Volumes
Solid growth in revenues not tied to volumes
4Q15 REVENUE BREAKDOWN¹ (in R$ millions)
Solid growth mainly impacted by new commercial policies and
depreciation of BRL versus USD
Equities Market
(BOVESPA Seg.)
222.8
Derivatives
Market (BM&F
Seg.)
258.8
¹ Revenue as reported in the financial statements note 20.
Other lines of business
in R$
millions
Market Data (Vendors)
30.2
Depository
27.7
Securities lending
25.5
Listing
12.2
Bank - financial intermediation and bank fees
10.0
Trading participant access
9.8
Other
6.2
Total
121.7
+18.3%
Y-o-Y
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4Q15 Adjusted Expenses¹
Continued focus through diligent expense management
4Q15 adjusted expenses decreased 2.6% y-o-y
(in R$ millions)
Adjusted
personnel2
(+7.4%): grew
below annual
wage
adjustment of
~9%
Data processing
(-21.9%): nonrecurring
payment in
4Q14 of R$9.5
MM for upgrade
rights of PUMA
Platform
Third party
services
(-16.2%): lower
expenses with
consulting and
legal advisory
services
Commun.
(-58.4%):
reduction of
mailing
expenses of
custody
statements
Others3
(+5.6%)
(in R$ millions and % of total adjusted expenses)
4Q15
92.5 (54%)
32.0 (19%)
11.4 (7%)
1.3 (1%)
33.2 (19%)
4Q14
86.1 (49%)
40.9 (23%)
13.6 (8%)
3.2 (2%)
31.0 (18%)
¹ Expenses adjusted to Company’s (i) depreciation and amortization; (ii) costs from stock grant plan – principal and payroll taxes – and stock option plan; (iii) tax on dividends from the
CME Group in 4Q14; and (iv) transfer of fines and provisions. 2 Excluding the impact of stock grant/option expenses. 3 Include expenses with maintenance, board and committee
members compensation, marketing and others.
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Expenses Discipline
Delivering efficiency through diligent expense management
-11.2%
Third party
services
3.2%
-6.7%
Marketing
5.7%
-4.5%
-57.0%
-61.1%
1
Total
Personnel 2
Data
processing
-1.8%
Real Change3
18.5%
-11.5%
Data
processing
-3.8%
Nominal
Change
16.9%
-11.5%
1,8%
Third party
services
Total
Personnel 2
3.9%
(in R$ millions)
-20.8%
-40.0%
Marketing
Real Change3
2015 vs. 2014
-69.1%
-76.6%
Communicat.
Nominal
Change
Communicat.
Adjusted expenses grew 3.7%, significantly below average inflation of 10.7%1,
reflecting prioritization of activities, review of contracts and enhancement
of processes
-75.0%
-81.0%
2015 vs. 2011
(in R$ millions)
IPCA last 12 months until Dec´15 (Source IBGE) 2 Includes personnel expenses and capitalization and excludes costs from stock grant plan – principal and payroll taxes – stock option and
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bonus expenses. 3 Calculated based on the annual wage increase for personnel expenditure and the accumulated IPCA for the other lines of expenses.
Financial Highlights
Solid and liquid financial profile
CASH AND FINANCIAL INVESTMENTS (in R$ millions)
4Q15
5,201
Company’s cash and financial
investments
Unrestricted cash (available funds)
includes R$1,201.3 million from the
partial divestment in the CME Group
3Q15
8,165
2Q15
4,033
Financial result of R$ 289.8 MM, up 436.2%
versus 4Q14, mainly due to:
 R$173.4 million in dividends received from
CME Group
1Q15
4,335
 higher interest rates
 higher average cash and financial
investments balance
4Q14
3,856
Third party
Total³ Restricted
Available
¹ Includes earnings and rights on securities in custody. ² Includes BM&FBOVESPA Bank clients’ deposits. ³ Does not include investments in CME Group and in Bolsa de
Comercio de Santiago booked as a financial investment that amounted to R$4,853.6 million in Dec’15.
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Financial Highlights
Investments and returning cash to shareholders
¹ Considers dividends, interest on capital and share buyback on the Company’s average market capitalization.
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Adjusted Net Income
Reconciliation of net income – ex-CME and impairment
NET INCOME
IFRS (in R$ millions)
IFRS net income1
Change
4Q15/4Q14
4Q14
125.4%
-
- (1,130.4)
-
-
-
-
-
(474.2)
-
-
1,097.4
-
-
1,097.4
-
-
704.2
232.4
203.0%
1,695.0
977.1
73.5%
7.8
7.0
10.7%
45.4
28.8
57.5%
(+) Deferred Liability (goodwill)
137.5
138.6
-0.8%
550.1
554.6
-0.8%
(-) Equity in results of investee
(173.7)
(34.7)
401.3%
(309.9)
(162.7)
90.4%
59.1
29.8
98.2%
88.5
81.0
9.3%
(200.8)
534.1
373.2
-
(249.8)
1,819.2 1,478.7
-
(+) Impairment
IFRS net inc. ex-CME and impairment impacts
(+) Stock Grant/Option
(+) Recoverable taxes paid overseas
(-) IOC adjustment2
Adjusted net income
232,4
14.6
Change
2015/2014
2014
977.1
(-) Gain on disposal of investment in affiliate
(407.7)
2015
2,202.2
(-) Discontinuity of the equity method
1
4Q15
-275.4%
43.1%
Attributed to BM&FBOVESPA´s Shareholders. 2 Tax benefits from Interest on Capital (IoC) adjusted to preserve the comparability with the previous periods.
23.0%
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Main Impacts in the 2015 IFRS Earnings
CME Group, Impairment and IoC
Nonrecurring
impacts
related to
CME Group
Sale of 20% of the equity investment (1% of the CME Group total shares)
Pre-tax result of R$724.0 MM; after-tax result of R$474.2 MM (tax due off-set against IoC); cash
proceeds of R$1,201.3 MM
Discontinuity of the equity method (non-cash)
Pre-tax result of R$1,734.9 MM; after-tax result: R$1,130.4 MM
Starting from Sep’15, the dividends received from CME Group are recognized as financial income
Impairment1
of the book
value of
Bovespa
Holding
Impairment in the recoverable amount of intangible assets
Pre-tax impact of R$1,662.7 MM; after-tax impact of R$1,097.4 MM (non-cash)
Adoption of
interest on
capital (IoC)
Tax efficiency for the Company
Reflects deterioration of the macroeconomic scenario that negatively impacted expectations of
future profitability of the Bovespa segment
 reduction in the market value of the companies listed in the Bovespa Segment
 worsening expectations for interest rates and country risk for the short- and long-terms reflected
in higher cost of capital in the valuation
In 2015 the Company opted for distributing its payout using interest on capital, which will generate
tax losses that can be offset in future periods against taxable earnings
This change should allow us to better achieve our objectives of returning capital to shareholders
through a different combination of interest on capital, dividends and share repurchases
1
Reported in the financial statements - note 9
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APPENDIX
15
Financial Statements
Summary of balance sheet (consolidated)
ASSETS
LIABILITIES AND SHAREHOLDERS´EQUITY
(in R$ millions)
Current assets
12/31/2015 12/31/2014
(in R$ millions)
Current liabilities
8,673.8
2,785.2
440.8
500.5
7,798.5
1,962.2
434.4
322.5
17,635.1
22,478.2
1,961.4
1,522.5
1,815.6
1,392.8
Others
145.8
129.8
Investments
30.6
3,761.3
453.1
421.2
15,190.0
16,773.2
Goodwill
14,401.6
16,064.3 Minority shareholdings
Total Assets
26,308.9
25,263.5 Liabilities and Shareholders´ eq.
Cash and cash equivalents
Financial investments
Others
Non-current assets
Long-term receivables
Financial investments
Property and equipment
Intangible assets
12/31/2015 12/31/2014
2,096.8
1,891.8
1,338.0
1,321.9
758.8
569.9
Non-current liabilities
5,859.9
4,383.2
Foreign debt issues
2,384.1
1,619.1
3,272.3
2,584.5
203.5
179.6
18,352.2
18,988.4
2,540.2
2,540.2
14,300.3
15,220.4
1,501.6
1,218.9
10.1
8.9
26,308.9
25,263.5
Collateral for transactions
Others
Deferred Inc. Tax and Social
Contrib.
Others
Shareholders´ equity
Capital stock
Capital reserve
Others
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Financial Statements
Net income and adjusted expenses reconciliations
ADJUSTED NET INCOME RECONCILIATION (in R$ millions)
4Q15
IRFS net income*
Stock Grant/Option (recurring net of tax)
Deferred tax liabilities
Equity in income of investees (net of taxes)
Recoverable taxes paid overseas
IoC Adjustments
Discontinuity of the equity method (net of taxes)
Gain on disposal of investment in associate (net of tax)
Impairment (net of tax)
Adjusted net income
Change
4Q15/4Q14
232.4
-275.4%
4Q14
(407.7)
Change
4Q15/3Q15
2,012.5
-120.3%
3Q15
2015
Change
2015/2014
977.1
125.4%
2014
2,202.2
7.8
7.0
10.7%
12.8
-39.4%
45.4
28.8
57.5%
137.5
138.6
-0.8%
137.5
0.0%
550.1
554.6
-0.8%
(173.7)
(34.7)
401.3%
(37.6)
361.8%
(309.9)
(162.7)
90.4%
59.1
29.8
98.2%
-
-
88.5
81.0
9.3%
(200.8)
14.6
1,097.4
534.1
373.2
309.7%
(249.8)
-101.3% (1,130.4)
(474.2)
1,097.4
1,819.2
16.9%
1,478.7
23.0%
(49.0)
- (1,145.0)
(474.2)
43.1%
457.0
*Attributable to BM&FBOVESPA’s shareholders.
ADJUSTED EXPENSES RECONCILIATION (in R$ millions)
4Q15
4Q14
Change
4Q15/4Q14
Change
4Q15/3Q15
3Q15
2015
2014
Change
2015/2014
Total Expenses
213.4
250.4
-14.8%
217.8
-2.0%
850.7
804.1
5.8%
Depreciation
(26.0)
(32.1)
-19.0%
(26.1)
-0.3%
(110.9)
(119.1)
-6.9%
Stock Grant/Option
(14.1)
(7.0)
100.9%
(19.4)
-27.5%
(99.0)
(28.8)
243.6%
-
(32.8)
-
-
-
-
(49.4)
-
(2.8)
(4.4)
-35.2%
(8.7)
-67.2%
(26.5)
(19.5)
35.5%
-
0.9
-
-
-
-
5.2
-
170.4
174.9
-2.6%
163.6
4.2%
614.3
592.3
3.7%
Tax on dividends from the CME Group
Provisions
BBM impact
Adjusted Expenses
17
Financial Statements
Summary of income statement (consolidated)
SUMMARY OF INCOME STATEMENT (in R$ millions)
4Q15
4Q14
Change
4Q15/4Q14
3Q15
Change
4Q15/3Q15
2015
2014
Change
2015/2014
543.2
533.4
1.8%
598.3
-9.2%
2,216.6
2,030.4
9.2%
(213.4)
(250.4)
-14.8%
(217.8)
-2.0%
(850.7)
(804.1)
5.8%
329.8
283.1
16.5%
380.5
-13.3%
1,366.0
1,226.4
11.4%
60.7%
53.1%
765 bps
63.6%
-288 bps
61.6%
60.4%
122 bps
289.8
54.1
436.2%
86.0
236.9%
508.8
208.2
144.4%
(1,043.0)
404.6
-357.8%
2,974.4
-135.1%
2,807.2
1,646.7
70.5%
Net Income ex-extraordinary impacts*
704.2
232.4
203.0%
393.3
79.0%
1,695.0
977.1
73.5%
Adjusted Net Income
534.1
373.2
43.1%
457.0
16.9%
1,819.2
1,478.7
23.0%
Adjusted EPS (in R$)
0.300
0.204
46.8%
0.256
17.2%
1.015
0.804
26.3%
Adjusted Expenses
(170.4)
(174.9)
-2.6%
(163.6)
4.2%
(614.3)
(592.3)
3.7%
Net Revenues
Expenses
Operating Income
Operating margin
Financial Result
EBT
*Excludes the net gain from the partial divestment in CME Group, the net impact from the discontinuity of the equity method of accounting for the remaining investment in CME Group and
impairment impacts.
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Contact
Investor Relations Department
Phone: 55 11 2565-4729 / 4418 / 4207 / 4834 / 7938
ri@bmfbovespa.com.br
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