4Q15 Earnings Presentation

February 19, 2016

1
Public
Public

Forward Looking Statements

This presentation may contain certain statements that express the managements 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.

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. expenses: 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 income: 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 Dec15

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

1

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.
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

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 Oct15

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 Jun15

Resilience: availability of 99.995%

BDRs2: 19 new companies in 2015, totaling 85

Performance: 2015 average number of messages

per day grew 345.1% compared to 2010

Tesouro Direto: improvements on the platform

iBalco
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
Updated until Dec15. 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

4Q15 Revenue Breakdown

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. Trade and post-trade.

Derivatives Market
FX depreciation pushed revenues up despite drop in ADV of contracts
REVENUE (in R$ millions)

ADV (in millions of contracts)

Contracts priced in USD 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 USD

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%

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. Most of the fees charged on FX, Interest rates in USD and Commodities contracts are referred in USD.

Equities Market
Revenues impacted by lower market capitalization of listed companies and turnover
REVENUE (in R$ millions)

ADTV (in R$ millions)

Markets

4Q14

Cash Equities
Equities Derivatives
TOTAL

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 Oct14 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

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. Includes fixed income line.

Business Lines not Related to Volumes

Solid growth in revenues not tied to volumes
4Q15 REVENUE BREAKDOWN (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

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

4Q15 Adjusted Expenses

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%)

Expenses adjusted to Companys (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.

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%

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 Dec15 (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

Companys 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

Total Restricted

Available

Includes earnings and rights on securities in custody. Includes BM&FBOVESPA Bank clients deposits. 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 Dec15.

11

Financial Highlights
Investments and returning cash to shareholders

Returning cash to shareholders

Dec15: R$450.0 million IoC payment
2015 payout : R$1,242.6 MM (73.3% of the net income ex
impairment expense and non-recurring impacts related to the
CME Group)
Share buyback of R$286.8 MM (1.5% of the free-float)

Total yeild of 7.6% in 2015

CAPEX
R$60.5 MM in 4Q15 and R$227.0 MM in 2015
2016 Capex budget range from R$200 to R$230 MM

Considers dividends, interest on capital and share buyback on the Companys average market capitalization.

12

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

4Q15

-275.4%

43.1%

Attributed to BM&FBOVESPAs 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 Sep15, 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

Reported in the financial statements - note 9

14

APPENDIX

15

Financial Statements
Summary of balance sheet (consolidated)
ASSETS

LIABILITIES AND SHAREHOLDERSEQUITY

(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

16

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&FBOVESPAs 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.

18

Contact

Investor Relations Department

Phone: 55 11 2565-4729 / 4418 / 4207 / 4834 / 7938
ri@bmfbovespa.com.br
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