IR UPDATE NOVEMBER 2017 - InvestingRomania

 
IR UPDATE NOVEMBER 2017 - InvestingRomania
IR UPDATE
NOVEMBER 2017
IR UPDATE NOVEMBER 2017 - InvestingRomania
Contents
   1.   Company Highlights                               3
   2.   Recent Accomplishments                           8
   3.   Business Strategy                               14
   4.   Romanian Capital Market Overview                17
   5.   Appendix: Financial Data                        22
   6.   IR contact                                      28

                                           WWW.BVB.RO        2
IR UPDATE NOVEMBER 2017 - InvestingRomania
Company Highlights
IR UPDATE NOVEMBER 2017 - InvestingRomania
Company Highlights
Bucharest Stock Exchange (BVB)
                     Indicator                                                   BVB                                                BVB share performance
                        ISIN                                              ROBVBAACNOR0
                                                                                                                              November 3, 2014 - November 3, 2017
                      Reuters                                                 ROBVB.BX
                                                                                                    40
                   Bloomberg                                                   BVB.RO
                Bloomberg BBGID                                           BBG000BBWMN3
        Share price ( November 10, 2017)                                  EUR 6.5 / RON 30          36
        Market Cap (November 10, 2017)                               EUR 49.6 mn / RON 230.2 mn                                                 2015 dividend:
            No. of outstanding shares                                         7,674,198             32                                         RON 0.87/share
    ADT 12TM (ended November 10, 2017)                                       RON 0.1 mn                                                     Ex-div date: 16 May
P/E (price as of November 10, 2017, 12TM EPS)                                 22.0x***              28
     P/BV (price as of November 10, 2017)                                       2.4x***                                                                               2016 dividend:
            Turnover velocity (2016)*                                            10%                24                                                               RON 0.92/share
                                                                                                                                                                  Ex-div date: 15 May
               Liquidity (2016)**                                                 7%
* value traded ÷ average market cap    ** no. of shares traded ÷ no. of shares outstanding          20
*** P/E and P/BV are calculated based on BVB Group financials as of June 31, 2017                   11/3/2014      5/8/2015     11/2/2015     5/9/2016     11/3/2016    5/8/2017    11/3/2017

                         100% free-float, listed on own floor since 2010                                                               Analyst coverage
                                                                                                                Analyst                    12M TP
                                                                                                                                                                          Last report
                                                                                                            (Company)                 (Recommendation)
                         20% ownership threshold,
                         majority institutional shareholders                                         Hai Thanh Le Phoung                        38.0
                                                                                                                                                                          10-Aug-17
                                                                                                          (Concorde)                           (Buy)

                         Shareholding structure*:                                                         Lucian Albulescu                      37.0
                                                                                                                                                                          20-Mar-17
                                                                                                            (Wood&Co)                          (Buy)
                         Romanian institutional investors – 72.10%
                                                                                                         Mihaela Podgorski                     30.15
                         Foreign institutional investors – 13.94%                                                                                                         24-Aug-16
                                                                                                          (Swiss Capital)                      (Buy)
                         Romanian private investors – 12.72%                                               Catalin Diaconu                     30.4
                                                                                                                                                                         12-May-16
                         Foreign private investors – 1.24%                                                (Raiffeisen Bank)                   (Hold)

            *Data as of October 31st, 2017                                                   WWW.BVB.RO                                                                                         4
Company Highlights
Why Bucharest Stock Exchange?

                                        As per the decision of FTSE Russell published on the 29th of September 2017, the Romanian capital market
                                        maintained on the list of countries that have substantial potential to be upgraded to the Emerging Market status.
        Emerging Market Watchlist
                                        In case of Romania, the upgrade will depend on the progress as regards the market liquidity and the presence
                                        on the market of largest companies with significant individual liquidity.

                                        Romanian Capital Market has recorded one of the highest dividend yields in the world in 2016 and 2017. BET
                                        Total Return (BET-TR) index, which includes the dividends granted by the blue chips companies listed on BVB,
       Largest dividends in the world
                                        has increased by more than 30% in USD terms in the first 3 quarters of 2017, reporting one of the fastest growth
                                        among all 23 MSCI Frontier Markets Index countries.

                                        Pension funds’ total assets (pillar II and III) advanced by 27% during the first nine months of 2017, after a
        Growing Domestic Potential      comparable increase of 28% Y-o-Y in 2016. The AuM of the Romanian investment funds equal EUR 5.8 bn as of
                                        September 30, 2017. There is a big potential vested in the currently small, but active local retail investors base.

                                        Constant work on ameliorating the investment landscape, with focus on: easing investors’ access to the market
                                        and fiscal compliance, reducing the cost of the market, improving the servicing of investors’ rights, simplifying
           Wide market reforms
                                        procedures related to primary markets for equities and bonds and developing the market infrastructure. New
                                        regulations regarding lending & borrowing operations were approved.

                                        Increase in favorable perception of BVB as the financing destination for local entrepreneurs looking for capital,
       Potential privatizations and a
                                        which results in ever-growing pipeline of private companies interested in floating shares or bonds on BVB’s
       pipeline of private companies
                                        markets. Additionally, rich portfolio of state-owned companies as the state has majority stake in 250
                                        companies. Some are currently pending the privatization. State-owned companies expected to float on BVB are:

                                                                 WWW.BVB.RO                                                               Source: FSA, AAF    5
Company Highlights
  Main financial indicators
                                                                                                               Business model
            Main financial indicators of the BVB Group, 9M
                          2017 vs. 9M 2016                                            BVB operates two markets:

         29.2
                               (RON mn)                                                      •     Main Market - where shares and rights of international and
                                                                                                   Romanian entities, debt instruments (corporate,
                                          23.3                                                     municipality and government bonds) issued by Romanian
                                                                                                   and international entities, UCITs (shares and fund units),
                                                                                                   structured products and tradable UCITS (ETFs) are traded;
                8.32       7.38                                                              •     AeRO Market – where shares and bonds of local and
                                                     4.15      4.29
                                                                                                   foreign start-ups and SMEs, are traded.

              9M 2017                            9M 2016                              BVB’s operating revenues are generated mainly from: trading of all the
                                                                                      listed financial instruments, fees charged to issuers for the admittance
          Operating revenues      Operating profit          Net profit
                                                                                      and maintenance to the trading system, as well as from data vending to
                                                                                      various users.
                   Dividends and dividend yield
3.50                                                                          9%
                                                                              8%
                                                                                                             Stable dividend policy
3.00
       6.1%                                                                   7%
2.50
                                                                              6%
                    4.2%                                                              •     Stable dividend policy, with a payout ratio of 100%, after legal
2.00                              4.0%                                        5%
                                                 3.5%                                       reserves;
                                                                              4%
1.50                                                                  2.7%
1.00
                                                                              3%      •     The gross dividend distributed for 2016 was RON 0.92028/share;
                                  1.46                                        2%
0.50   1.12         1.18                         0.87                 0.92    1%
                                                                                      •     The dividend policy is expected to remain unchanged.
0.00                                                                          0%
       2012         2013          2014          2015            2016
                Dividend/share [RON]         Dividend yield [%]

                                                                             WWW.BVB.RO                                                                          6
Company Highlights
Latest developments

       New sources of short-term revenues                                                   Expense management discipline
 • Intensify projects dedicated to retail investors as well as, separately, to     • Increased attention paid to cost management discipline;
   entrepreneurs, in order to bring new liquidity to the market;                   • Budget of CSD pre-approved by the Bucharest Stock Exchange.
 • Support the implementation of short selling and market making;
 • Launch of new products such as warrants;
 • Expand data vending and IT&C services;
 • Attract partnerships for current events and projects.

          Transparency                                                                     Operational developments
• BVB becomes one of the first IRIS (new reporting system) users;                • Reducing the multitude of trading venues through the merger with
• Annual Report includes the Corporate Governance compliance;                      SIBEX, the Sibiu Stock Exchange, approved on October 4th 2017 by
• Quarterly calls and yearly meetings with analysts;                               the Romanian Financial Supervisory Authority;
• Annual meetings with investors during international roadshows                  • Plans for CCP services establishment for both spot & futures
  (London, Warsaw, Budapest and New York);                                         markets.
• Reporting in both Romanian and English languages;
• New IFRS standard consolidated reporting.

                                                                          WWW.BVB.RO                                                                  7
Recent Accomplishments
Recent Accomplishments
Bucharest Stock Exchange – key figures

                                                                 EUR 10.4 mn/day, +17.7%
       Over 9.7%
                                                                 EUR 12.0 mn/day, +21.4% (including offers)
       BET index evolution in 2017*
                                                                 Average daily turnover in shares for the first
                                                                 10 months of 2017**
       19.4%
       BET-TR index evolution in 2017*
                                                                                                                  Romanian Capital Market maintained by
       (BET Total Return index includes the dividends
                                                                                                                  FTSE Russell on the Emerging Market
       distributed by companies included in the main             Proven growth story
       index of the market, BET)                                                                                  Watchlist (September 2017)

                                                                                                                  3 companies, the minimum criterion
                                           The biggest dividend                        Future Emerging
                                                                                                                  imposed by MSCI for promoting the local
                                            yield in the world                              Market
                                                                                                                  market to the Emerging Market status
       8.6%
       BET companies are expected to pay
       8.6% DivY in 2017
                                                                                                                  Reforms for local market modernization and
                                                                                                                  development projects
                                                  Significant                                                     • Supporting listing of state owned and
                                                 transactions                       Steps for improving              private companies
                                                                                        the market                • Modernization according to EU regulation
                                                                                                                     and standards
                       RON 1.23 bn (EUR 272 mn)                                                                   • Expanding the individual investors base
                       The value of private companies IPOs                                                        • Improvement of the corporate governance
                       in 2017                                                                                       amongst the issuers

                        RON 3.7 bn (EUR 824 mn)
                        The value of corporate bonds issuances
                        in 2017
                                                                                                                      *in RON, as of November 10th, 2017
                                                                    WWW.BVB.RO                                        ** Data as of October 31st, 2017      9
Recent Accomplishments
2016 vs 2017 turnover increase
As per FESE data, Bucharest Stock Exchange has registered an impressive increase in turnover in first three quarters of 2017 when
compared to the same period of 2016. BVB remains ahead of other significant regional stock exchanges such Vienna, Budapest or
Prague.

                                               Turnover % change Y-O-Y
                                                 Q1-Q3, 2017 vs 2016
         35.60%
                      31.50%

                                    21.20%
                                                   18.80%

                                                                13.70%
                                                                              11.40%
                                                                                            7%
                                                                                                       5.60%
                                                                                                                    CEESEG
                                                                                                                    Prague

      Warsaw Stock   Bucharest   Ljubljana Stock   CEESEG    Budapest Stock   SIX Swiss   Deutsche    Euronext
       Exchange        Stock        Exchange        Vienna     Exchange       Exchange     Borse
                     Exchange                                                                                       -7.10%

                                                              WWW.BVB.RO                                              *Source: FESE Data   10
Recent Accomplishments
2017 significant transactions
 Shares                                                                  Bonds
                                                                                 Third corporate bonds issuance from IIB in
                                                                                 September 2017, first ever in the history of BVB of
             IPO on the Main Market, carried out between
                                                                                 bonds denominated in euros. Bank managed to attract
             October 24th and November 2nd 2017. 25% stake
                                                                                 RON 300 mn (EUR 67 mn) and additional EUR 60 mn
             sold by shareholders for RON 285 mn (EUR 62
                                                                                 through denominated bonds.
             mn).

             IPO on the Main Market, carried out between                         Company attracted RON 9.7 mn (EUR 2,1 mn) in
             October 24th and 25th 2017, closed after less than                  January 2017, listed the bonds on AeRO market in
             48 hours following the subscription rate over                       September 2017.
             270%. 25% stake sold by shareholders for RON 9
             mn (EUR 2 mn).                                                      Attracted RON 610 mn (EUR 135,5 mn) through
                                                                                 issuance of corporate bonds on the Main Market in
            IPO on the Main Market, carried out between June                     July 2017.
            8th and 9th 2017, closed after less than 48 hours
            following the subscription rate of over 270%. 15%                    The largest corporate bonds issuance in the history of
            stake sold by shareholders for RON 5.5 mn (EUR                       BVB of EUR 550 mn with bonds being traded in Euro
            1.2 mn).                                                             denominations but the settlement being performed in
                                                                                 RON according to BNR’s exchange rate from the
                                                                                 previous trading session.
            IPO on the Main Market, carried out between April
            28th and May 10th 2017. Largest private IPO in the
            BVB history following the sale of 25,6% stake in                     BVB’s Main Market issuer attracted RON 38.25 mn
            the company for RON 944 mn (EUR 207 mn).                             (EUR 8,5 mn) through its 1st issuance of corporate
                                                                                 bonds on the Main Market in April 2017.

                                                            WWW.BVB.RO                                                                11
Recent Accomplishments
    2017 events
                                                                                                                                                                                  Issuance of 3rd edition
                                                                                                                              Globalworth bonds float on                              of Whitebook on
  Wood&Co                                                                        Launch of 7/24
                        15 out of 167 companies                                                                                the Main Market following                          Communication of BVB
becomes Super                                                                   Capital, a weekly
                      selected in Made in Romania                                                                             the largest corporate bonds                            Listed Companies
Market Maker on                                                                  online show on
                      project for private companies                               stock market                                    issue to date on BVB               Superbet bonds
  BVB shares
                            interested in BVB                                                                                                                         float on AeRO
                                                                                            BVB and National Trade
        30% gain registered by               Launch of GSM approves
                                                                                            Registry launch project                                                                                  Sphera Franchise
         the winner of the real-             Romanian merger with SIBEX,
                                                                                                targeting local                                                                                       Group floats on
        life trading competition              National change of tariffs and                                                                      Release of My first
                                                                                                entrepreneurs                                                                                        the Main Market
            ‘Driven by Return’              Investment buy-back program                                                                            investment book
                                            Day project                                                            AAGES floats on the
                                                                                                                      Main Market

        3 March        20 March         4 April         11 April              11 May            16 May                                        7 August        14 September     28 September      2 November
                                                                                                                    14 June      19 June

   5 January      7 March         3 April         6 April          13 April            12 May            17 May           19 June       31 July          17 August      20 September    9 October         9 November

                                                                                DIGI Communications floats
                                                    Launch of
               500 participants to the                                          on Main Market following the                                                    3rd issuance of International
                                             InvestingRomania.com                                                         BET index extends
               6th edition of Individual                                           largest IPO to date of a                                                    Investment Bank bonds float
                                                      portal                                                              to 13 companies
                   Investors Forum                                                private company on BVB                                                       on the Main Market, first ever
                                                                                                                                                                 on BVB issuance of bonds
 BET index extends to                                        Issuance of 2nd edition of                                             Unicredit Bank bonds float     denominated in euros
   12 companies                                             Whitebook on Communication                                                 on the Main Market
                                                             of BVB Listed Companies                                                                                                          Transilvania Broker
                                                                                                          BVB launches APPLY BVB,                     BVB awarded during CEE
                                                                                                                                                                                              de Asigurare floats
                        300 entrepreneurs participate to                                                  dedicated app for investors                 Capital Markets Awards in
                                                                                                                                                                                              on the Main Market
                          the 1st edition of Bucharest                                                                                                 ‘Best IR Department of a
                            Entrepreneurship Forum                                                                                                     Listed Company is CEE’
                                                                                                                                                               category

                                                                                                           WWW.BVB.RO                                                                                               12
Recent Accomplishments
2017 regulatory changes related to lending and borrowing in securities
 •   In August 2016, a breakthrough reform of the                  •   The regulatory updates consist of the following changes:
     securities lending/borrowing and short selling was
     adopted;                                                                  to extend the financial instruments that can make
                                                                                the object of a loan granted by an investment
 •   The Romanian FSA updated in July 2017 the                                  firm/custodian (with those instruments that belong
     regulation related to lending/borrowing activities, by                     to the clients of other investment firm/custodian
     ensuring a more extended framework, in line with the                       that were borrowed by that firm/custodian from
     diversity of the situations that can occur in practice,                    them);
     with regard to:                                                           to ensure the support for carrying out the lending/
                                                                                borrowing operations by the intermediaries/
           the financial instruments object of those                           custodians which are not participants at the DC's
            operations;                                                         system, under the condition of the agreement with
           the type of participants involved and the                           a participant at DC’s system;
            types of operations available to them and                          to provide the framework that lending/ borrowing
            their clients.                                                      operations to be performed between the clients of
                                                                                different investment firms/custodians.
 •   It is a more flexible regulatory support, in line with
     various market needs, and it provides grounds for a           •   At this moment, a platform for facilitating the lending/
     larger use of lending/borrowing operations;                       borrowing operations is available to the DC participants,
                                                                       based on the displaying the indicative offers of the
 •   It ensures an adequate and improved structure                     lenders/ borrowers;
     needed for the involvement of the international
     investors in carrying out these operations.

                                                               WWW.BVB.RO                                                             13
Business Strategy
Business strategy
Key focus

Developing retail                        Attracting private issuers to            Improving issuers’                       Launching new products
investors’ base                          the Main Market and AeRO                 transparency                             and trading mechanisms
                                                                                                                           • Short-selling, trading on margin;
• Enlarging the domestic retail          • Attracting private companies for       • Full enforcement of Corporate          • Lending and Borrowing;
  base by expanding educational            listings on the Main Market as           Governance in force starting with      • Warrants.
  projects (Fluent in Finance, Invest      well as continue approaching the         February 4th, 2016;
  Quest), events (Retail Investor          SMEs for listings on AeRO;             • Periodical check of Main Market
  Forums), platforms (Investing          • Made in Romania: the first pre-          issuers’ websites through              Stimulating revenue from
  Romania, 7/24 Capital),                  IPO programme for top                    Whitebook on Communication of
  initiatives (National Investment         Romanian companies interested            Listed Companies paired with
                                                                                                                           data vending
  Day, My first investment book);          in capital markets, managed to           regular trainings on corporate
• Stimulating trading activity of          attract 167 applications in the          governance;                            Other major projects
  current investors through                first edition. Second edition          • Improving the reporting system of
                                                                                                                           • Acquiring CCP services;
  different incentivizing projects         already confirmed for 2018.              issuers, through new Issuers
                                                                                                                           • Merger with Sibex, the Romanian
  (Driven by Return real-life trading                                               Reporting Information System
                                                                                                                             derivatives exchange and later
  competition, Leii BVB).                                                           (IRIS).
                                                                                                                             relaunching of the derivatives
                                                                                                                             market.

                             Mid-term strategic objective: Upgrade to the Emerging Market Status

  • Resuming the privatization process to bring new pipeline of listed companies and improve the free-float of those already listed through SPOs;
  • Improving the market liquidity through brining new private companies to the market and increasing the local retail investors base.

                                                                        WWW.BVB.RO                                                                               15
Business strategy
Steps towards Emerging Market Status
 Institutions evaluating Romania                                                      Main criteria to be fulfilled by Emerging Markets

                   MSCI
                   FTSE Russell                                                                Min. 3 companies fulfilling the following:
                   S&P Dow Jones                                                      MSCI     • Company size [full market cap] of USD 1,375 mn
                                                                                               • Free Float value of USD 687 mn
                   STOXX                                                                       • ATVR (Annualized Traded Value Ratio) of min. 15%
Key actions necessary in order for Romanian capital market to be
upgraded to the Emerging Market status by major international institutions:
                                                                                              Romania maintained on Emerging Market Watchlist
   •       Increase the free-float of the already listed companies,
           allowing sizeable investments in Romania                                   FTSE     • Min. 3 companies meeting eligibility tests (size, free float
   •       Improve the total market liquidity                                                    and liquidity criteria)
                                                                                               • Qualitative criteria fulfilled by BVB in 2015-2016:
                                                                                                   • fair and non-prejudicial treatment of minority
                                                                                                     shareholders
 Promotion of the local capital market reform:
                                                                                                   • free and well-developed foreign exchange market
   •       Permanent communication with MSCI, FTSE, STOXX and S&P                                  • transaction costs – implicit and explicit costs to be
           Dow Jones                                                                                 reasonable and competitive

   •       Organizing a communication platform with international investing
           community, supported by EBRD and Bloomberg

                                                                                      S&P
                                                                                               • Full domestic market capitalization over USD 2.5 bn
       The upgrade to a superior classification is voted by global players:                    • Domestic annual turnover value over USD 1 bn
                  large institutional investors and custodians                                 • Exchange development ratio (Mcap to GDP) over 5%

                                                                              WWW.BVB.RO                                                                        16
Romanian Capital Market Overview
Romanian Capital Market Overview
Regional perspective
                                                                                           CEESEG Prague
                                                                                           MCap: EUR 26.4 bn
                                                                                           Avg. daily turnover: EUR 22 mn/day
             Warsaw Stock Exchange
                   MCap: EUR 166.9 bn
   Avg. daily turnover: EUR 223 mn/day
                                                                                               Budapest Stock Exchange
                                                                                               MCap: EUR 26.3 bn
                       CEESEG Vienna                                                           Avg. daily turnover: EUR 34 mn/day
                  MCap: EUR 125.2 bn
  Avg. daily turnover: EUR 135 mn/day

             Ljubljana Stock Exchange
                       MCap: EUR 5.2 bn
     Avg. daily turnover: EUR 1.9 mn/day

        Zagreb Stock Exchange
                 MCap: EUR 19.2 bn
  Avg. daily turnover: EUR 7 mn/day

                                                        Bucharest Stock Exchange
                                                                                    Bulgarian Stock Exchange
                                                               MCap: EUR 19.6 bn    MCap: EUR 4.5 bn
                                            Avg. daily turnover: EUR 10.4 mn/day*   Avg. daily turnover: EUR 2 mn/day

      Source: FESE (data as per October 2017), LJSE, BGSE.
      * BVB Data as of October 30th, 2017, Main Market, shares     WWW.BVB.RO                                                   18
Romanian Capital Market Overview
Positive macroeconomic outlook
             Indicator                2011         2012                2013                2014                 2015                2016                2017f               2018f

Real GDP, yoy change (%)               1.1          0.6                 3.5                  3.0                 3.8                 4.8                   5.6                5.5

Inflation rate (%)                     5.8          3.3                 4.0                  1.1                -0.6                 -0.5                  1.9                3.2

Key interest rate (%)                 6.00         5.25                 4.00                2.75                1.75                1.75                 1.75                2.00

Population (mn)                       20.2         20.1                 20.0                20.0                20.0                19.8                 19.8                19.7

Exchange rate, eop. (RON/EUR)          4.3          4.4                 4.5                  4.5                 4.5                 4.5                 4.55                4.56

                                                 Source: Erste Research, Raiffeisen Research, ECB, Eurostat, NBR, National Statistics Office, Romanian National Commission for Prognosis.

 Long-Term Credit Rating        Credit ratings       Outlook                                                                          Market capitalization (EUR bn)
                                                                                          Capital Markets
                                                                                            in the CEE
Fitch                                                                                                                    2013          2014         2015         2016        2017YTD
                                    BBB-               stable
(July 14, 2017)
Moody’s                                                                            Bucharest Stock Exchange               17.8         18.4         16.9          18.0          19.6
                                    Baa3               stable
(April 21, 2017)
                                                                                   Budapest Stock Exchange                14.4         12.0         16.2          21.5          26.3
Standard & Poor’s
                                    BBB-               stable
(May 16, 2014)                                                                     Bulgarian Stock Exchange                5.1          5.0          4.4          4.3            4.5

                                                                                   Ljubljana Stock Exchange                5.2          6.2          5.5          5.1            5.2

                                                                                   CEESEG - Prague                        22.0         22.6         23.5          22.2          26.4

                                                                                                                                               Source: FESE, LJSE, BGSE, October 2017

                                                                          WWW.BVB.RO                                                                                                        19
Romanian Capital Market Overview
High dividend yields
                     BET vs. BET -TR index (2014-2017 YTD)*                                                            Top DivY BET Index – YTD 2017 vs 2016
                                                                                      +54.9%        170
                                                                                                                            23%
                                                                                                    160                                                                                       20%

                                                                                                    150
                                                                                                                                                                                    15%
                                                                                                                                        14%
                                                                                      +19.8%        140
                                                                                                                                                   10%
                                                                                                    130         9%
                                                                                                           7%
                                                                                                    120                                                        5%          5%

                                                                                                    110                   10%       10%         6%        0%          7%         9%         11%

                                                                                                    100    Avg. DivY        COTE        TGN        SNN       SNP           EL         TEL     SNG
                                                                                                             BET
                                                                                                     90                         DivY 2016     DivY 2017   Additional DivY 2017
     10-Nov-14      10-May-15      10-Nov-15      10-May-16      10-Nov-16      10-May-17     10-Nov-17
                                                BET          BET-TR
  *As of November 10th, 2017

• In H1 2017, BVB expanded its main indices, BET and BET-TR, to                                           • Romanian capital market has recorded the highest dividend yields
  13 companies, additionally including CONPET (COTE), MedLife                                               in the world in 2016 and the BET-TR, the total return index, which
  (M) and Digi Communications (DIGI).                                                                       includes dividends, had one of the highest registered growth in the
                                                                                                            world in the first 3 quarters of 2017, of more than 30%.
• BET index recoded the 9-year high once it reached 8,769 points in
  May, the highest value recorded in the first half of 2017.                                              • In September, the Government, as a majority shareholder,
                                                                                                            convened the General Shareholders Meeting for some of the
                                                                                                            energy and utilities companies included in BET index, to approve
  Note: Chart for BET-TR uses back-tested values before Sept 19, 2014 (index launch date).
                                                                                                            additional dividends. As of 31st October all requests were
  The chart is rebased at 100 and uses data until November 10th, 2017                                       approved.

                                                                                             WWW.BVB.RO                                                                    Source: BVB            19
Romanian Capital Market Overview
Growing pension funds and asset management industry
             Pension funds: total assets and allocation in Romanian                                      Asset managers: net assets [EUR bn],
                 equities, 2013-September 2017 [EUR bn, %]                                            number of investors, 2014 – September 2017
                        19.2%           19.3%                          19.9% 21.0%
 8.0
                                                   18.8%                               7.0
                                                                                                                  420,766          426,256              418,830
                                                                                                                                                                       450,000

 7.0                                                                                           403,024
                                                                               16.0%   6.0
                                                                                                                                                                       400,000
 6.0
       15.6%
                                                                                       5.0
 5.0
                                                                               11.0%                                                                                   350,000

 4.0
                                                                 8.7
                                                  7.3
                                                                                       4.0

                                                                               6.0%                                                                                    300,000
 3.0
                                      5.7
                     4.5                                               1.7             3.0
                                                                                                                                    5.5                    5.8
 2.0
                                            1.1         1.4                                                          5.2
       3.3                 0.9                                                 1.0%             4.6                                                                    250,000

 1.0         0.5                                                                       2.0

                                                                                                                                                                       200,000
 0.0                                                                           -4.0%   1.0

        2013           2014            2015         2016        YTD 2017
                                                                                       0.0                                                                             150,000

        Total assets (RON bn)                     Investments in equities (EUR bn)             Dec-14              Dec-15          Dec-16                Sep-17

                                                                                                           Total assets [EUR bn]    Total number of investors
        Investments in equities (%)

   •    Advance of 27% of pension funds’ total assets (pillar II and III)              •     Steady growth rate of AM’s net assets over the past three years,
        during the first nine months of 2017, after another comparable                       reaching EUR 5.8 bn Q3-2017.
        increase of 28% Y-o-Y in 2016.                                                 •     Number of investors slightly decreased in 2017, following
   •    During 2017, investments in equities increased in value (from                        increase in over 23,000 new investors between 2014 and 2016,
        EUR 1.4 bn registered in 2016 to EUR 1.7 bn), and in                                 however there can be seen an increase in the risk appetite of
        percentage of funds’ total assets, from 18.8% to 20%.                                investors due to more and more subscriptions to multi-assets
                                                                                             and equity funds.

                                                                             WWW.BVB.RO                                                             Source: FSA, AAF       21
Appendix: Financial Data
Appendix: Financial Data
BVB Group and the operated markets

                                   Bucharest                                                                    Markets operated by BVB
                                     Stock
                                   Exchange
                                  Bucharest Stock
                                       Exchange
                                     100%  free float
                                          100% free float

                                             Investors          Corporate                           Main Market                              AeRO market for SMEs
 Central             Bucharest
                     Bucharest              Investors
                                           Compensation
                                                            Corporate
                                                               Governance
 Central
Depository         Clearing House
                      Clearing             Compensa-       Governance
Depository                                     Fund              Institute                          Listed companies:                               Listed companies:
       69.04%          House 52.5%          tion Fund62.3%   Institute 100%                     87 domestic and 1 foreign                       275 domestic and 2 foreign
       69.04%               52.51%                  62.45%                100%
                                                                                                  Domestic market cap:                             Domestic market cap:
                                                                                                     EUR 19.7 bn                                      EUR 1.23 bn

                                                                                                    Total market cap:                                 Total market cap:
                                                                                                      EUR 35.7 bn                                       EUR 1.26 bn

                Entities included in the                     Not included in the                       Instruments:                                     Instruments:
                consolidation process                          consolidation                  shares, rights, corporate and                         shares, rights, bonds
                                                                   process                    municipal bonds, government
                                                                                             securities, structured products,
Segments within BVB Group:                                                                 fund units, tradable UCITS (ETFs),
•      Trading segment – Bucharest Stock Exchange                                                        warrants

•      Post-trading segment - Clearing & settlement services of the
       Central Depository
•      Registry segment – Registry activities of the Central Depository
•      FCI services & other services – Activities of the Investors
       Compensation Fund and of the Bucharest Clearing House
                                                                                   WWW.BVB.RO                     Source: Bucharest Stock Exchange, data as of November 10th, 2017   23
Appendix: Financial Data
Market size and structure

                Average daily turnover 2014-2017 YTD*                                                 Most traded stocks at BVB in 2017 YTD (%)
                             [EUR mn/day]
               0.2
               0.9                                                      0.22                                          SIF MOLDOVA S.A.,
                                                                                                                            2.3%
                                   0.4                                  1.34                                                              Others, 10.6%
                                                                                                     SPHERA FRANCHISE
                                                       0.4                                                                                                BANCA TRANSILVANIA
                                                                                                      GROUP S.A., 3.1%
                                   2.5                                                                                                                        S.A., 18.7%
                                                       1.2
                                                                                                   S.N.T.G.N. TRANSGAZ
                                                                                                         S.A., 5%
               11.9
                                                                        10.5                       SOCIETATEA
                                                                                                                                                                        FONDUL
                                   7.9                 8.2                                         ENERGETICA
                                                                                                                                                                     PROPRIETATEA,
                                                                                               ELECTRICA S.A., 5.7%
                                                                                                                                                                         14.2%

                                                                                                   S.N.G.N. ROMGAZ
                                                                                                       S.A., 9%
              2014                2015                2016            2017YTD                                                                             Digi Communications N.V.,
                                                                                                       BRD - GROUPE
                      Shares/Fund Units        Bonds         Structured products                                                                                  12.8%
                                                                                                     SOCIETE GENERALE
                                                                                                          S.A., 9%
                                                                                                                                  OMV PETROM S.A., 9.7%
Note: Public offers included. *Data as of October 31, 2017                               Note: Public offers included. Data for January 1 – November 10, 2017

                                                                                         •       Banca Transilvania (TLV) continued to be most the most
 •       Equity market has the largest share in total turnover.
                                                                                                 traded company on the Bucharest Stock Exchange, followed
 •       Structured products segment gained importance,                                          by Fondul Proprietatea (FP), Digi Communications (DIGI)
         following the adition of new products.                                                  and OMV Petrom (SNP).
                                                                                         •       The weights of Fondul Proprietatea, Digi Communications,
                                                                                                 OMV Petrom and Sphera Franchise Group were increased
                                                                                                 due to the public offers carried out in the specified period.

                                                                                   WWW.BVB.RO                                                                                         24
Appendix: Financial Data
9M 2017 BVB Group financial results
RON mn                                                Sept 2017                 Dec 2016                            Main financial indicators, 2014 – 9M 2017 (RON
                                                                                                                                           mn)
Non-current assets                                             81.5                    83.1
                                                                                                             39.6
Current assets                                               131.1                     89.9
                                                                                                                                      30.8                   31.6
                                                                                                                                                                                       29.2
Total assets                                                 212.6                   173.0
Shareholders’ equity attributable
                                                               97.6                    97.6                                14.1
to owners of the Company                                                                                                                                                   7.8                      7.4
                                                                                                                    5.6                      4.7 6.6
Minority interest                                              10.4                    10.4                                                                         3.1
                                                                                                                                                                                              0.4

Short-term liabilities                                       104.6                     65.0                         2014                     2015                   2016                  9M 2017

Total equity and liabilities                                 212.6                   173.0                                  Operating revenues      Net financial revenues       Net profit

•     At the end of September 2017, total assets of the BVB Group                                     •      In the first 9 months of 2017, the BVB Group recorded operating
      amounted to RON 212.6 mn (31 December 2016: RON 173.00                                                 revenues of over RON 29.20 mn (9M.2016: RON 23.30 mn), an
      mn), up by 23% compared with the beginning of the year.                                                increase by 25% generated by all operating segments of the
                                                                                                             Group.
•     Fixed assets decreased by 2% compared to the beginning of the
      year, while current assets increased by 46% to RON 131.1 mn                                     •      The revenues generated by BVB, representing the Group's
      (31 December 2016: RON 89.9 mn). The amounts available for                                             trading segment, amounted to RON 18.28 mn (excluding intra-
      dividends payment to the Central Depositary's clients were                                             group transactions) in the first 9 months of 2017, a 28% y-o-y
      shown in Other restricted assets and represented at the end of                                         increase.
      September 2017 the amount of RON 76.91 mn (31 December                                          •      The operating profit of the BVB Group amounted to RON 8.32
      2016: RON 38.47 mn).                                                                                   mn, 2 times higher than the result obtained in the first 9 months
                                                                                                             of 2016. The net profit amounted RON 7.38 mn (9M.2016: RON
        Note: Consolidated financial results, prepared in accordance with IFRS. The financial                4.29 mn).
        figures for 3Q 2017 are restated to IFRS and are not audited

                                                                                                WWW.BVB.RO                                                                                                25
Appendix: Financial Data
9M 2017 BVB Group financial results
                 Breakdown of operating revenues, 2013-9M 2017                                           Net profit, operating and net margins, 2013-9M
                                   (RON mn)                                                25                      36%          2017                                          40%
                             4.4
          5.5                                                  0.4                                                                                                28%
                                                                                                                                                                              35%
                                              0.5                            0.9
                             8.7                                                           20                                                     25%                         30%
                                                               3.6
          6.9                                 4.6                                    2.8                                          19%                                   25%   25%
                                                                                                21%                 28%
                                                               8.5                         15
                                                                                                                                                        19%                   20%
                                              8.3                            7.2
                                                                                                                                                                              15%

                                                                                           10            11%                            11%                                   10%

          24.1               26.5
                                                              19.4                                                 14.1                                                       5%
                                              17.4                           18.3           5
                                                                                                   7.5                            6.6             7.8             7.4
                                                                                                                                                                              0%

                                                                                                                                                                              -5%

                                                                                            0                                                                                 -10%

          2013               2014             2015            2016         9M 2017                2013              2014          2015            2016           9M 2017
                   Trading     Post-trading    Registry     FCI services                                    Net profit     Operating margin (%)          Net margin (%)

            Distribution of operating revenues and result, by
                       segment, 2017 (RON mn)                                              •      The trading activity at BVB was more intense in the first 9 months
                                                                                                  of the year, registering an increase by 33% compared to the first 9
  18.28
                                                                                                  months of 2016 to a level of RON 10.88 bn. For equities segment
                                                                                                  of the Main Market, the average daily trading value was RON
                                                                                                  49.51 mn for the firs 9 months of 2017.
                                                                                           •      The fixed-income instruments market (bonds and government
                              7.21
            6.57                                                                                  securities) registered a small decrease compared to the same
                                                     2.79                                         period last year, to the value of RON 1.28 bn (9M.2016: RON
                                     1.18
                                                              0.35         0.92                   1.34 bn).
                                                                                    0.23   •      The structured products market declined by 40% compared to the
    Trading                  Post-trading             Registry          FCI services and          first 9 months of 2016, to the amount of RON 200 mn (9M.2016:
                                                                          other services
                         Operating revenues                 Operating profit                      RON 330 mn).

                                                                                     WWW.BVB.RO                                                                                      26
Appendix: Financial Data
Trading segment overview
                                                                                                                 Trading fees (bps)
      Breakdown of trading segment revenues
                in 9M 2017 (%)                                                Mar-09 to Sep-14
                                                                                                               Oct-14 to Dec-17
                                                                                                                                                    Starting Jan-18*

                Other, 6%                                                                        8
                                                                                                                                  6                              6
                                                                              11.7
                                                                                                                 10                              9.5
        Data vending,
             6%                                                                               4.5                                 4                              3.5
      Issuers fees, 9%                           Trading fees,
                                                                              Sell            Buy              Sell            Buy               Sell            Buy
                                                     79%
                                                                                                      BVB fees                        FSA fees
                                                                        * Starting 2018, there will be also additional fixed fee of RON 0,95 applied per executed order.
                                                                       Note: Fees in bps are charged to the value of the trade (buy & sell) and do not refer to Market Makers
                                                                       and DEAL trades.

              Drivers of the trading segment revenues
                                                                                      Operating revenues and profit, trading segment
                                                                                                        (RON mn)
  •    The trading activity at BVB was more intense in the 3rd
                                                                                18.28
       quarter of the year, registering an increase by 27%
       compared to 3Q 2016 to a level of RON 4.18 bn. For the                                                                         14.26
       regulated market of shares, the average daily trading value
       was RON 45.30 mn.
                                                                                            6.57
  •    Trading segment’s revenues increased by 28% in the first 9                                       5.82
                                                                                                                                                             4.12
                                                                                                                                                   4.10
       months of 2017 compared with the same period of 2016,
       mainly, mainly driven by the increase in the total value of
       transactions on BVB markets.                                                      9M 2017                                                 9M 2016
                                                                                            Op. revenues                   Op profit                Net result

                                                                 WWW.BVB.RO                                                                                                     27
BVB IR App
         IR Contact:

         Zuzanna Kurek,
         Deputy Director
         Business Development & Marketing Department

         Natalia Negru,
         IR & PR Specialist

         Email: ir@bvb.ro
         Mobile: +40.74.243.11.11
         Phone: +40.21.307.95.00
         Fax: +40.21.307.95.19

                               BURSA DE VALORI BUCURESTI SA • Bulevardul Carol I nr. 34-36, Etaj 13-14, Sector 2, 020922, Bucuresti, Romania • Tel.: +40 21 307 95 00 • Fax: +40 21 307 95 19
                               Website: www.bvb.ro • E-mail: bvb@bvb.ro • Registrul Comertului: J40/12328/2005 • CUI: 17777754 • Capital social, integral subscris si varsat: 76.741.980 lei
                               Decizia CNVM Nr. 369 / 31.01.2006

THIS PRESENTATION WAS PREPARED BY BURSA DE VALORI BUCURESTI. THE INFORMATION CONTAINED IN THIS DOCUMENT HAS NOT BEEN INDEPENDENTLY VERIFIED AND NO
REPRESENTATION OR WARRANTY EXPRESSED OR IMPLIED IS MADE AS TO, AND NO RELIANCE SHOULD BE PLACED ON THE FAIRNESS, ACCURACY, COMPLETENESS OR CORRECTNESS
OF THIS INFORMATION. PAST PERFORMANCE IS NO GUARANTEE OF FUTURES RESULTS. THIS DOCUMENT DOES NOT CONSTITUTE AN OFFER OR INVITATION TO PURCHASE ANY SHARES.
CERTAIN STATEMENTS CONTAINED IN THIS DOCUMENT MAY BE STATEMENTS OF FUTURE EXPECTATIONS AND OTHER FORWARD-LOOKING STATEMENTS THAT ARE BASED ON
MANAGEMENT’S CURRENT VIEWS AND ASSUMPTIONS AND INVOLVE KNOWN AND UNKNOWN RISKS AND UNCERTAINTIES THAT COULD CAUSE ACTUAL RESULTS, PERFORMANCE OR
EVENTS TO DIFFER MATERIALLY FROM THOSE EXPRESSED OR IMPLIED IN SUCH STATEMENTS. EXCHANGE RATE USED FOR ADT IS THE DAILY EXHANGE RATE AS ANNOUNCED BY THE
NBR.

ACEASTA PREZENTARE A FOST REALIZATA DE BURSA DE VALORI BUCURESTI. INFORMATIILE CONTINUTE IN ACEASTA PREZENTARE NU AU FOST VERIFICATE DE CATRE O TERTA PARTE
INDEPENDENTA, ASTFEL NU EXISTA NICIO GARANTIE SI NU TREBUIE LUATA CA ATARE ACURATETEA, CORECTITUDINEA SI COMPLETITUDINEA ACESTOR INFORMATII. PERFORMANÞA
ANTERIOARA NU ESTE O GARANTIE A REZULTATELOR VIITOARE. ACEST DOCUMENT NU REPREZINTA O OFERTA DE A CUMPARA ACTIUNI. ANUMITE DECLARATII DIN ACEST DOCUMENT
POT FI DECLARATII DESPRE ASTEPTARILE VIITOARE SAU ALTE EVOLUTII VIITOARE SI SE BAZEAZA PE VIZIUNEA SI IPOTEZELE ACTUALE ALE CONDUCERII COMPANIEI SI IMPLICA RISCURI
CUNOSCUTE SI NECUNOSCUTE, PRECUM SI INCERTITUDINI CARE POT DETERMINA CA REZULTATELE EFECTIVE, PERFORMANÞA SAU EVENIMENTELE VIITOARE SA DIFERE SEMNIFICATIV
DE CELE EXPRIMATE SAU INTELESE IN ACESTE DECLARATII.

                                                                                                                                                                                                28
You can also read
NEXT SLIDES ... Cancel