1Q16 Earnings Presentation

May 13, 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.

1Q16 vs. 1Q15 Highlights

Solid operating performance
Operating highlights

Operating income and net

income growth

Strategic developments
(long term value creation)

BM&F segment:

Total revenues: R$625.4 million,

+8.3%

Combination with Cetip

ADV: 3.1 million contracts, +13.6%

RPC: R$1.495, +1.5%

BM&F seg.: R$277.7 million,

+10.7%

Bovespa segment:

Bovespa seg.: R$224.1 million,

+2.8%

ADTV: R$6.96 billion, +4.6%

Margin: 5.264 bps, -0.03 bps
Others business (not tied to
volumes)

Adj. Expenses: R$144.3 million,

+4.1%

Market data (vendors): R$27.3

billion, +43.8%

Operating income: R$361.5 million,

+20.9%

Tesouro Direto: 79.0% increase in

average assets under custody

Others revenues: R$123.5 million,

+14.1%

IFRS net income: R$339.3 million,

+21.4%

Proposal of combination subject to

approval by:
Both companies shareholders on
May 20, 2016
Regulators: Securities Commission
(CVM), Central Bank and AntiTrust (CADE)
Proceeds from the sale of CME
Group shares (gross amount of
R$5,487.7 million) make up a
significant part of the funding

Clearinghouse integration (equities

phase)
Key project for marker participants
moving forward as planned

Adjusted to (i) depreciation and amortization; (ii) stock grant plan costs principal and payroll taxes and stock option plan; (iii) combination with Cetip; and (iv) transfer of fines, provisions and incentive
programs to market participants. Total proceeds before taxes from sales executed in Set15 (R$1,201.3 million) and Apr16 (R$4,286.4 million).

Strategic Developments
Updates on the implementation of the strategic plan

Building a world-class IT and

operations infrastructure

Developing products/markets and

revenue diversification

Clearing BM&FBOVESPA (equities phase)

Conclusion of IT development in the end of
2015
Test and certification phases with market
participants in progress
Next step is the parallel production phase
Deployment planned for the 4Q16, depending
on test results and regulatory approval

Greater liquidity for listed products

35 market maker programs for options on
singles stocks and financial and commodities
derivatives, compared to 15 programs at the
end of 1Q15
Market makers for IPCA futures introduced in
May16

PUMA Trading System

Resilience: availability of 99.998%
Performance: average number of messages
per day in 1Q16 grew 55.0% compared to
1Q15

Non-sponsored BDRs
21 new programs in April and May, 2016,
increasing the portfolio to 106 programs
Fixed Income ETFs
Regulatory and tax frameworks ready
Discussions with market participants for
launching the product
4

1Q16 Revenue Breakdown

Business model resilience and revenue growth
TOP LINE GROWTH DRIVEN BY GOOD PERFORMANCE IN MOST REVENUE LINES

(in R$ millions)
(% growth YoY)

USD-linked revenues represented

28.5% of the total revenue

Total
Revenues
R$625.4
million

The revenue breakdown considers the revenue lines others of the Bovespa Segment and foreign exchange and securities of 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
Growth in both volumes and RPC fueled revenue growth
REVENUE (in R$ millions)

ADV (in millions of contracts)

Contracts priced in USD represented ~23% of

derivatives ADV and ~55% of derivatives revenues in
1Q16

REVENUE PER CONTRACT (RPC)

RPC: R$1.495 per contract, +1.5% year-over-year
Depreciation of BRL versus USD (positive impact)
Mix effect, with higher participation of Mini contracts (negative impact)

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$5.4
million in the 1Q16. Most of the fees charged on FX, Interest Rates in USD and Commodities are referred in USD. The average BRL/USD decreased 45.5% from 1Q15 to 1Q16.

Equities Market
Revenue impacted by the turnover velocity
REVENUE (in R$ millions)

ADTV (in R$ millions)

TRADE AND POST-TRADE MARGINS

Trade and post-trade margins: 5.264 bps, flat over 1Q15

MARKET CAPITALIZATION (in R$ trillions) AND TURNOVER VELOCITY (%)

Turnover velocity reached 85.8% in 1Q16 (71.8% in

1Q15); this increase was partially offset by a drop of
13.9% in the average market capitalization

Revenue does not considers line others of Bovespa Segment, as reported in the financial statements note 20, which totaled R$4.4 million in the 1Q16. Excludes fixed income
line.

Business Lines not Tied to Volumes

Solid growth in revenue not tied to volumes
1Q16 REVENUE BREAKDOWN (in R$ million)

+14.1%
YoY

Revenue as reported in the financial statements note 20.

1Q16 Adjusted Expenses

Continued focus through diligent expense management
1Q16 ADJUSTED EXPENSES GREW 4.1% YoY, SIGNIFICANTLY BELOW THE AVERAGE INFLATION OF
9.4% IN THE PERIOD
(in R$ millions)

Adjusted
personnel
(-3.1%): higher
capitalization
of personnel
expenses
connected to
projects; and
non-recurring
provision of
R$6.8 million in
1Q15

Data processing
(+24.3%): higher
maintenance
expenses tied to
the new Data
Center; hiring of
outsourced
personnel; and
inflation/FX rate
adjustments to
IT maintenance
contracts

Third party
services4
(+6.6):
adjustment of
contracts
values to the
FX rate and
inflation

Communication
(-31.2%):
reduction of
mailing
expenses of
custody
statements

Others5
(+9.4%):
higher
energy and
maintenance
costs

(in R$ millions and % of total adjusted expenses)

1Q16

80.9 (56%)

35.9 (25%)

7.6 (5%)

1.6 (1%)

18.4 (13%)

1Q15

83.5 (60%)

28.9 (21%)

7.1 (5%)

2.3 (2%)

16.8 (12%)

Expenses adjusted to Companys (i) depreciation and amortization; (ii) costs from stock grant plan principal and payroll taxes and stock option plan; (iii) combination with Cetip; and
(iv) transfer of fines, provisions and incentive programs to market participants. IPCA last 12 months until Mar16 (Source IBGE). Excluding the impact of stock grant/option expenses.
4 Excludes third party services connected to the combination with Cetip. 5 Include expenses with maintenance, board and committee members compensation and other.

Financial Highlights
Solid and liquid financial profile
CASH AND FINANCIAL INVESTMENTS (in R$ millions)
Companys cash and financial investments
1Q16
5,660

Unrestricted cash (available funds) includes proceeds

from the divestment in CME Group in Sept15

4Q15
5,201

Financial result of R$ 160.5 million, up 160.7% vs. 1Q15,

mainly due to:
Higher average cash and interest rates

3Q15
8,165

R$32.2 million in dividends received from CME Group

R$34.1 million, with no cash effect, related to changes
in the BRL vs. USD exchange rate4

2Q15
4,033

IoC payment of R$169.7 million (50% of the IFRS net

income), equivalent to R$0.095 per share

1Q15
4,355

Third party

Total Restricted

Payment in June 06, 2016, based on shareholders

position of May 23, 2016
Available

CAPEX of R$60.9 million in 1Q16

2016 Capex budget range from R$200 to R$230 million

Includes earnings and rights on securities in custody. Includes BM&FBOVESPA Bank clients deposits. Does not include investments in CME and in Bolsa de Comercio de Santiago
amounting R$4,837.0 million at 1Q16 booked as financial investments. 4 See note 4 to the financial statements.

10

Financial Highlights
Strong cash generation
CASH GENERATION BEFORE DISTRIBUTIONS (in R$ millions)

1Q15

1Q16

Adjusted net cash from operating

activities

480.9

492.3

Net cash from investment activities

-15.7

83.2

-108.0

-78.9

357.2

496.6

Net cash from financing activities

before distributions
Cash generation (before
distributions)

Cash generation reached R$496.6

million in 1Q16, 39% growth YoY
Net cash from operating activities was impacted
by the hedge instruments (changes in the BRL
vs. USD exchange rate and mark-to-market of
SWAP and NDF)
Net cash from investment activities was
impacted by higher dividends received from
CME Group in 1Q16
Net cash from financing activities was impacted
by cash payments of payroll taxes linked to the
transition, in 1Q15, of the Companys long-term
incentive plan, from stock option to stock grant

Cash generation before dividends/IoC payments and share buybacks. Considers the cash flow from operating activities, adjusted by the variation of financial investments and
guarantees and variation of cash deposits and REPO transactions of the BM&FBOVESPA bank, as described in the note 13 to the financial statements. Considers the cash flow
from financing activities before the payment of dividends/IoC and share buyback.

11

Strategic Updates
Sale of CME Group Shares
SALE OF THE ENTIRE STAKE IN CME GROUP
1. Sale of CME Group shares on April 7, 2016
- R$4,286.4 million in total proceeds from the sale of shares (before taxes)
2. By entering into BRL/USD NDFs in the amount of US$1,262 million prior to the sale of CME Group
shares the Company secured an effective FX rate of R$3.59/USD for the proceeds. The NDF was
settled on April 13, 2016.
3. Hedge accounting (2020 Notes principal vs. CME shares) is replaced by a principal-only swap in the
amount of US$612 million: long position in US$ and short position in CDI (79.1% of CDI)
Impacts on the income statement
1Q16: Financial income of R$34.1 million, with no-cash impact, related to changes in the BRL vs. USD
exchange rate on the unhedged position of part of the principal of the 2020 Notes between March 29
and 31, 2016 (swap execution)
Impacts for the next quarters
- Financial Revenues: (i) proceeds from sale invested in BRL at local interest rates (CDI)
- Financial Expenses: (i) 79.1% of the CDI on R$2,210 million; and (ii) payment of interest on the 2020
Notes of 5.5% per year on US$612 million (exposed to changes in the BRL vs. USD exchange rate)
- Changes in BRL vs. USD exchange rates on the balance of the 2020 Notes will have no impact on the
financial results, because swap value will move in the opposite direction
Swap of the 2020 Notes principal only, while the interest still exposed to changes in the BRL vs. USD exchange rate. Effective rate 6.47% per year, after withholding income tax.

12

Strategic Updates
Financing structure planned for the transaction with Cetip
COMBINATION WITH CETIP FINANCING
Shares Portion
Reference Exchange Ratio: 0.9358 BM&FBOVESPA share per Cetip share
Cash Portion
Proceeds, before taxes, from the sale of CME Groups shares
Cash flow until the settlement date: share buyback program interrupted
Debt: stand-by financing lines signed with a group of banks; permanent financing will be raised closer to
the settlement date
Financial Leverage
Gross debt/EBITDA: should exceed 2x at the settlement of the transaction and return to 1x within three
years
- Financial deleveraging and return of the payout ratio to 80% of the IFRS net income should occur
simultaneously over this three years period (subject to operating performance)

Reference Exchange Ratio as of April 8, 2016.

13

Business Combination with Cetip

Proposed timeline and phases of the process
With the approval of both shareholders meetings, the closing of the transaction will
be subject to regulatory approvals from CADE, CVM and Central Bank
May, 20th

April, 15th

BVMF and Cetips Boards call

shareholders meetings

May 20th + N months

BVMF and Cetips shareholders

approve the transaction in the
shareholders meetings

Closing when all regulatory

approvals are obtained

BVMF requires simple majority of

shareholders present at the meeting
CETIP requires acceptance of 50% + 1 of
total capital

Shareholders of both companies engage in the voting

process:

Review of the Transaction by the regulators:

Shareholders may participate in three ways: (i) in person;

(ii) through power of attorney; or (iii) through a remote
voting system

The Brazilian Securities Commission (CVM)

To vote via alternatives ii or iii, all documents required

by the custodians must be updated and valid

Central Bank of Brazil (BCB)

After the last

regulatory
approval, the
transaction will
be settled in up
to 40 days

The Economic Defense Administrative Council

(CADE)
Up to 240 calendar days extendable for an
additional 90 days starting from the
acceptance of the application by CADE

After analyzing the terms of the transaction, shareholders must vote in person, by proxy or remotely
BVMFs extraordinary shareholders meeting first call for the purpose of amending its Bylaws shall require attendance by holders of record representing at least two-thirds of the issued and outstanding shares of capital stock, provided
the meeting may convene on second call with any number of attending shareholders.
CETIPs extraordinary shareholders meeting first call for the purpose of amending its Bylaws shall require attendance by holders of record representing at least two-thirds of the issued and outstanding shares of capital stock, provided
the meeting may convene on second call with at least 50% + 1 of the total issued and outstanding shares of capital stock, since it is minimum threshold of CETIPs shareholders voting for the transaction to have it approved.

14

APPENDIX

15

Financial Statements
Summary of balance sheet (consolidated)
ASSETS

LIABILITIES AND SHAREHOLDERSEQUITY

(in R$ millions)

Current assets
Cash and cash equivalents
Financial investments
Others
Non-current assets

03/31/2016 12/31/2015
9,070.3

8,673.8

455.8

440.8

8,257.7

7,798.5

356.9

434.4

17,636.2

17,635.1

(in R$ millions)
Current liabilities

3,107.9

2,096.8

Collateral for transactions

1,298.2

1,338.0

Others

1,809.6

758.8

Non-current liabilities

4,897.5

5,859.9

Foreign debt issues

2,192.9

2,384.0

2,502.4

3,272.3

202.2

203.5

18,701.2

18,352.2

2,540.2

2,540.2

14,265.3

14,300.3

1,885.4

1,501.6

10.3

10.1

26,706.5

26,308.9

1,934.2

Deferred Inc. Tax and Social

1,961.4 Contrib.

1,783.9

1,815.6

Others

150.2

145.8

Investments

30.3

30.6

460.0

453.1

15,211.8

15,190.0

Goodwill

14,401.6

14,401.6 Minority shareholdings

Total Assets

26,706.5

26,308.9 Liabilities and Shareholders eq.

Long-term receivables
Financial investments

Property and equipment

Intangible assets

03/31/2016 12/31/2015

Others
Shareholders equity
Capital stock
Capital reserve
Others

16

Financial Statements
Net income and adjusted expenses reconciliations
ADJUSTED NET INCOME RECONCILIATION (in R$ millions)
1Q16
IRFS net income*
Stock Grant/Option (recurring net of tax)

339.3

Change
1Q16/1Q15
279.5
21.4%

1Q15

Change
1Q16/4Q15
(407.7)
-183.2%

4Q15

16.8

12.1

38.4%

7.8

116.0%

Deferred Tax Liabilities

135.3

137.5

-1.6%

137.5

-1.6%

Equity in Income of Investees (net of taxes)

(19.6)

(37.8)

-48.2%

(173.7)

-88.7%

0.0

0.0

59.1

0.0
0.0
0.0
471.8

0.0
0.0
0.0
391.3

20.6%

(200.8)
14.6
1,097.4
534.1

-11.7%

Recoverable Taxes Paid Overseas

IoC Adjustments
Discontinuity of the Equity Method (net of taxes)
Impairment (net of tax)
Adjusted net income
*Attributable to BM&FBOVESPAs shareholders.

ADJUSTED EXPENSES RECONCILIATION (in R$ millions)

Total Expenses

202,0

Change
1Q16/1Q15
221,4
-8,8%

Depreciation

(23,8)

(30,6)

-22,2%

(26,0)

-8,5%

Stock Grant/Option

(25,4)

(43,4)

-41,4%

(14,1)

80,4%

(1,0)

0,0

0,0

(7,5)
144,3

(8,8)
138,6

-15,5%
4,1%

(2,8)
170,4

162,9%
-15,3%

1Q16

Combination with Cetip

Provisions and others
Adjusted Expenses

1Q15

Change
1Q16/4Q15
213,4
-5,3%

4Q15

17

Financial Statements
Summary of income statement (consolidated)
SUMMARY OF INCOME STATEMENT (in R$ millions)

1Q16

1Q15

Change
1Q16/1Q15

4Q15

Change
1Q16/4Q15

563.5

520.4

8.3%

543.2

3.7%

(202.0)

(221.4)

-8.8%

(213.4)

-5.3%

361.5

299.0

20.9%

329.8

9.6%

64.1%

57.5%

669 bps

60.7%

343 bps

Financial result

160.5

61.6

160.7%

289.8

-44.6%

Net Income

339.3

279.5

21.4%

(407.7)

-183.2%

EPS (in R$)

0.190

0.156

22.5%

(0.229)

-183.0%

(144.3)

(138.6)

4.1%

(170.4)

-15.3%

Net revenues
Expenses
Operating income
Operating margin

Adjusted expenses

18

Contact

Investor Relations Department

Phone: 55 11 2565-4729 / 4418 / 4207 / 4834 / 7938
ri@bmfbovespa.com.br
19