Transcript Slide 1
Euronext: Gateway to the €uro-zone
France
Holland
Belgium
Portugal
November 2006
Euronext today
The world’s first integrated cross-border exchange
Operating in 5 European countries and the U.S.
•Europe’s largest central orderbook exchange
•The world’s second largest derivatives market
Business worth €1,700 billion traded every day
•A leading supplier of exchange trading technology
Used worldwide by most leading cash & derivatives exchanges
•A listed company - market capitalisation of € 8 billion
Intention to merge with NYSE subject to regulatory and shareholder
approval
Source: Euronext
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Euronext’s competitive position in Europe
MARKET CAPITALISATION
CENTRAL ORDERBOOK
European cash equity market capitalisation
Value traded
(year end 2005)
(€ billion, 2005)
Source: FESE
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• Largest equity market in continental Europe
• Largest central orderbook in Europe
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LSE
28%
Eu
Deutsche Börse
12%
Bo
Spanish Exchanges
9%
rs
e
SWX Group
9%
Bö
OMX
8%
2,000
1,800
1,600
1,400
1,200
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800
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Euronext
26%
LS
Borsa Italiana
8%
Sector comparison Euronext vs. LSE
Euronext – largest in Technology, Consumer Goods, Utilities, Industrials
LSE – largest in Financials, Basic Materials, Oil & Gas
Euronext domestic
Utilities
8%
Technology
4%
4%
4%
LSE domestic
Consumer Goods
14%
6%
Basic Materials
Consumer Goods
Consumer Services
Financials
10%
14%
1%
4%
Basic Materials
7%
9%
Oil & Gas
16%
Health Care
12%
Industrials
Oil & Gas
Technology
Telecommunications
8%
Utilities
Industrials
12%
25%
Unclassified
5%
8%
Financials
29%
Total market cap = €2,654 billion*
Total market cap = €2,728 billion**
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Source: Euronext & LSE, ICB classification * As at 31/03/06, excludes multi-listed stocks ** As at 28/02/06
Euronext – International Listings
Breakdown of listed companies
Selected international companies:
International
Companies
25%
Arcelor Mittal, Corus Group, Daiwa, Deutsche Bank,
Exxon Mobil, Fiat, Hitachi, Honda, HSBC, Maroc Telecom,
Mitsubishi Electric, NEC, SES Global, Sharp…...
Selected domestic companies:
75%
Domestic
Companies
ABN Amro, AXA, BNP Paribas, Carrefour, Danone, EDF,
Fortis, France Telecom, GDF, Heineken, ING Group,
L’Oréal, LVMH, Michelin, Philips, Renault, Royal Dutch
Shell, Sanofi-Aventis, Société Générale, Suez, Total,
Unilever……
• 25% of Euronext’s 1,300 companies are international
• 7 companies from Israel
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Top ranked for raising fresh capital in the world
Milestones:
• € 17.2 bn fresh capital
raised, 78 new listings in
2005…
…continuing with € 13.6 bn
raised, 101 new listings
year-to-date 2006.
• The world’s largest IPO
2005: EDF
• An additional mkt cap of
€ 165 bn since Jan 2005
Selected Deals
Large caps
EDF (Electricité de France)
Utilities - electricity
€ 7,000m
KKR Private Equity
Specialty finance
$ 5,000m
Eutelsat
Satellite network
€ 860m
Tom Tom
GPS navigation
€ 467m
Mid caps
Small caps
Environnement
Environmental measurement
ExonHit Therapeutics
Biotechnology
Key market for raising capital
Highly active hi-tech segment
More privatisations than any
other exchange
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€ 23m
€ 3.8m
Unique access to European asset managers
Geographical split of equity fund assets typifies wider European investment profile
Euro-zone countries dominate – 71.5% of total equity funds under management
Fragmented market – cross-border access is key
Best of both worlds: access to the Euro-zone… as well as UK based investors… > 40% of
trading volume by UK based investment banks
The European Equity Fund Market
30%
Outside
€uro-zone
28.5%
Others
8.9%
Euronext
23.8%
€uro-zone
71.5%
25%
20%
UK
19.6%
15%
10%
5%
Source: European Fund and Asset Management Association
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Breakdown per area
0%
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Euro-zone (excl.
Euronext)
47.7%
Listing requirements
Listing requirements – overview
Market
Eurolist
Main
Board
Description
EU regulated
market for large,
mid & small caps
Listings and ongoing requirements
* Minimum 25% shares distributed to the public
* Three-year track record required
* IFRS or recognised accounting standards
Ongoing obligations
* Audited FY and audited/un-audited half-year accounts
* Timely disclosure
* Two-year track record
* IFRS or local GAAP with reconciliation table
Alternext
Junior
Market
Exchange regulated
market for mid &
small companies
Ongoing obligations less demanding
* Audited FY accounts, un-audited half-year reports
* Simplified reporting methods
* Timely disclosure
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Eurolist – the main board
One cross-border regulated market - one rule book
One single cross-border trading platform
Borderless:
Companies are classified in alphabetical order and identified on
the basis of capitalization rather than on geographic location
Large caps (group A: > €1 billion)
Mid caps (group B: between €150 million and €1 billion)
Small caps (group C: less than €150 million)
• Equal opportunity for international companies to join key indices
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Eurolist – key features
Language
English – fully accepted for entire listing process and documentation, including
prospectus
Listing instruments
Shares
Depositary Receipts (EDR, GDR, ADR)
Corporate bonds
Derivative instruments, including Convertibles, Options, Warrants and Futures
Funds
Currency of listing
Euro - the world’s second most important currency
Or any other major currency
Regulatory environment – tailor-made for cross-border business
Sound regulatory framework – provides credibility
No Sarbanes Oxley regulation!
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Alternext
the junior market
Alternext – the junior market
Why Alternext?
More than 1m €uro-zone SMEs eligible…
…but substantially fewer than 1% listed!
Alternext is an exchange-regulated market;
Designed for small and mid sized companies
Open for companies from all sectors and countries
Launched in France in May 2005, Belgium in June 2006, The Netherlands
in Q4 2006
Broad €uro-zone access
Same 4-country electronic trading platform for Eurolist and Alternext
Use of a Listing Sponsor is mandatory
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Alternext – key listing requirements
2 year company track record (exempt for funds)
IFRS, US GAAP or local GAAP with IFRS reconciliation tables
Audited FY accounts, un-audited 6 months report
Market access:
Public offering
Private placement
Access to retail and/or qualified investors
Access to qualified investors only
Minimum free float: € 2.5m
Prospectus cleared by regulator
Minimum placing: € 5m
Offering circular
EU Prospectus Directive
Not cleared by regulator; disclosures under
responsibility of the Listing Sponsor & Issuer
Fast track dual listing through recognised market status
Access via offering circular for companies listed on another market
Ongoing obligations simplified
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Alternext – sector breakdown*
Alternext has achieved its target as a broad marketplace for SMEs
Computer Hardware
Software
Internet
Computer Services
Specialty Finance
Real Estate Holding & Development
Electricity
Mobile Telecommunications
Fixed Line Telecommunications
Travel & Tourism
Publishing
Media Agencies
Specialty Retailers
Biotechnology
Medical Supplies
Medical Equipment
Recreational Products
Personal Products
Clothing & Accessories
Consumer electronics
Home constructions
Durable Household Products
Distillers & Vintners
Waste and Disposal Services
Business Support Services
Delivery Services
Electronic Equipment
Heavy Construction
Building Materials & Fixtures
Forestry
Oil Equipment & Services
0.0%
2.0%
4.0%
6.0%
* number of companies - ICB (Industry Classification Benchmark)
15
8.0%
10.0%
12.0%
14.0%
Alternext – size profile
Distribution of companies by equity market cap
Alternext’s target
company size of
€20m - €250m
achieved.
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25
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40.0%
35.0%
30.0%
25.0%
20.0%
15.0%
10.0%
5.0%
0.0%
No micro-caps…
…better liquidity
€m
Distribution of companies by equity market cap
AIM
25.0%
20.0%
15.0%
10.0%
5.0%
-2
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25
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5
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0.0%
0
Number of companies
Number of companies
Alternext
£m
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Alternext – market structure and liquidity
Alternext today
Number listed companies
Total market capitalisation
Average deal size
Deal size range
61
€ 2.6 billion
€ 8.0m
€ 2.7m to € 23.3m
Alternext vs. AIM
Average performance
Alternext
AIM
29%
12%
€ 37m
€ 23m
501
215
82%
54%
90%
24%
since Alternext launch (May 2005)
Median market cap
Average monthly number of
transactions per stock
Overall velocity
Percentage of stocks with greater
than 50% velocity
Source: Euronext & LSE - H1 2006
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Alternext: IPOs and investor base
Origin of institutions
(as of September 2006)
U.K.
16%
U.S.
3%
Switzerland
2%
Sweden
2%
Spain
3%
Luxembourg
5%
Italy
1%
Germany
11%
Australia
1%
IPOs:
80% institutional investor
participation, underpinning
valuations
Euronext zone
55%
Investors:
Institutions from 14 countries
Broad continental European
institutional take-up
Strong US-UK acceptance
Austria
1%
Alternext: Truly pan-European
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Case Study
Alternext case study: Environnement SA
Environnement is the European leader in designing, manufacturing, and selling
equipment and systems for air and water quality measurement and evaluation.
Sales: France (83.2%), Italy (10.3%), and United States (6.5%).
IPO - 19 January 2006:
Market capitalisation
Key figures (2004):
80
Valuation: € 57m
Revenues: € 30.5m
70
Trailing PE ratio: 71
Funds raised: € 23m
11.8x oversubscription
Net profit: € 799,000
Value maintained at
+25% after 9 months
Current valuation: € 71m
euros (million)
60
50
40
30
20
10
0
Jan-06
Bookrunner: Crédit du Nord
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Oct-06
Why Euronext?
Why Euronext?
Gateway to the €uro-zone
• Publicity: cross-border access to investors, customers & business partners
• Acquisition currency: €uro – a key currency
• Huge pool of assets under management
• Single entry point gives broad European access for listing and trading
Leading cross-border exchange with a pan-European reach
• Top-ranked globally for capital raising
• Largest central order-book trading volumes in Europe
• International companies can join local indices
• Broad service offering for early stage and mature companies
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