36
IR UPDATE April 2019
IR UPDATEApril 2019
1. Company Highlights 3
2. Recent Accomplishments 6
3. Business Strategy 13
4. Romanian Capital Market Overview 19
5. Financial Results Overview 25
6. IR contact 36
2WWW.BVB.RO
Contents
Company Highlights
Indicator BVBISIN ROBVBAACNOR0
Reuters ROBVB.BX
Bloomberg BVB.RO
Bloomberg BBGID BBG000BBWMN3
Share price (Mar 31, 2019) EUR 4.60 / RON 21.9
Market Cap (Mar 31, 2019) EUR 37.0 mn / RON 176.3 mn
No. of outstanding shares 8,049,246
ADT 12TM RON 0.13 mn
P/E (price as of Mar. 2019, 12TM EPS) 17.73x***
P/BV (price as of Mar. 2019) 1.60x***
Turnover velocity ( 12 TM )* 15%
Liquidity (12 TM)** 15%
100% free-float, listed on own floor since 2010
20% ownership threshold, majority institutional shareholders
Shareholding structure*:
Romanian institutional investors – 69.73%
Foreign institutional investors – 9.97%
Romanian private investors – 17.83%
Foreign private investors – 1.81%
Bucharest Stock Exchange – 0.66%
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2015 dividend: RON 0.87/share
Ex-div date: 16 May
Company Highlights
Bucharest Stock Exchange (BVB)
* value traded ÷ average market cap ** no. of shares traded ÷ no. of shares outstanding*** P/E and P/BV are calculated based on BVB Group financials as of Dec 31, 2018
2016 dividend: RON 0.92/share
Ex-div date: 15 May
*Data as of March 31, 2019
Analyst coverage
Analyst (Company)
12M TP (Recommendation)
Last report
Hai Thanh Le Phoung(Concorde)
34.0 (Buy)
10-January-19
Lucian Albulescu(Wood&Co)
34.7 (Buy)
14-November-18
2017 dividend: RON 1.6862/share
Ex-div date: 21 May 2018
0
10
20
30
40
Evolution of BVB share
Source: BVB, FSA, AAF
Company Highlights
Why Bucharest Stock Exchange?
5WWW.BVB.RO
Largest dividends in the world
Growing Domestic Potential
Wide market reforms
Potential privatizationsand a pipeline of private
companies
Emerging Market Watchlist
Romanian capital market was maintained on the list of countries that have substantial potentialto be upgraded to the Emerging Market status. FTSE upgraded from ‘Not Met’ to ‘Restricted’ thesingle outstanding criterion, Liquidity, following an improvement in broad market liquidity.
Romanian Capital Market recorded one of the highest dividend yields in the world, averaging 8%in 2017 and 7% in 2018.
Pension funds’ total assets (Pillar II and III) reached EUR 10.9 bn at the end of February 2019, 3%higher than the end of the previous year; the AuM of the Romanian investment funds (apartfrom SIFs and FP) equal around EUR 5.0 bn as of end of 2018. There is big potential vested in thecurrently small, but active local retail investors base.
Constant work on ameliorating the investment landscape, with focus on: easing investors’ accessto the market and fiscal compliance, reducing the cost of the market, improving the servicing ofinvestors’ rights, simplifying procedures related to primary markets for equities and bonds anddeveloping the market infrastructure.
Increase in favorable perception of BVB as the financing destination for local entrepreneurs lookingfor capital, which results in ever-growing pipeline of private companies interested in floatingshares or bonds on BVB’s markets. State-owned companies expected to float on BVB are:
Recent Accomplishments
Recent Accomplishments
Bucharest Stock Exchange – key figures
Proven growthstory
Future EmergingMarket
Steps forimproving the
market
Significanttransactions
One of the biggest dividend yields in
the world
7WWW.BVB.RO
Romanian Capital Market maintained byFTSE Russell on the Emerging Market Watchlist (March 2019).
• The “Liquidity – Sufficient broad market liquidity to support sizeable global investment” criterion is required for attaining Secondary Emerging market status and is currently rated as ‘Restricted’. FTSE Russell acknowledges the continued efforts of the Bucharest Stock Exchange to improve liquidity levels on the exchange.
7%BVB listed companies paid 7% DivY in 2018
RON 186 mn (EUR 40 mn)The value of private companies IPOs in 2018
Reforms for local market modernization and development projects
• Supporting listing of state owned and private companies
• Modernization according to EU regulation and standards
• Expanding the individual investors base• Improvement of the corporate
governance amongst the issuers
* Data as of March 31, 2019
RON 7.7 bn (EUR 1.7 bn)The value of bonds issuances and listings in 2018
EUR 9.33 mn/day (shares only)Average daily turnover in shares for YTD2019*+9.14%
BET-TR index evolution in Q1 2019
+8.96% BET index evolution in Q1 2019
• Equity market has the largest share in total turnover.
• Structured products segment gained importance, followingthe addition of new products.
• Banca Transilvania (TLV) was the most traded company onthe Bucharest Stock Exchange, followed by FondulProprietatea (FP), BRD Groupe Societe Generale (BRD),Romgaz (SNG) and OMV Petrom (SNP).
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Recent Accomplishments
Market size and structure
Note: Public offers included. Data as of March, 2019 Note: (%) of share turnover; Data as of Dec 31, 2018
11.9
7.9 8.2
10.5 9.9 9.3
0.9
2.5 1.2
1.41.9
0.2
0.4
0.4
0.2 0.3
0.1
2014 2015 2016 2017 2018 2019 YTD
Average daily turnover 2014-2019[EUR mn/day]
Shares/Fund units Bonds Structured products
11.7
4.5
10
4
9.5
3.5
86 6
Sell Buy Sell Buy Sell Buy
Trading fees (bps)
BVB fees FSA fees
Mar-09 to Sep-14Oct-14 to Dec-17 Starting Jan-18*
* Starting 2018, an 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.
BANCA TRANSILVANIA, 22%
FONDUL PROPRIETATEA,
14%
BRD-GSG, 11%Romgaz, 9%OMV Petrom, 9%
Alro SA, 7%
Transgaz, 4%
Electrica, 4%
SIF Oltenia, 3%
Conpet, 2%
Nuclearelectrica, 2%
Transelectrica, 2%
Zentiva, 2%Others, 8%
Diversified pool of equity instruments
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Recent Accomplishments
IPO on the Main Market, carried outbetween April 28 and May 10, 2017.Largest private IPO in the BVB historyfollowing the sale of 25,6% stake in thecompany for RON 944 mn (EUR 207 mn).DIGI Communications is an importantsupplier of telecommunication services inRomania and Hungary, being the firstissuer from telecom sector listed on BVB.It started trading on May 16, 2017, undersymbol DIGI.
IPO on the Main Market, carried out betweenJune 8 and 9, 2017, closed after less than 48hours following the subscription rate of over270%. 15% stake sold by shareholders for RON5.5 mn (EUR 1.2 mn). AAGES is a companywhich designs and manufactures inductionheating systems for a wide range ofapplications. It began trading on June 19, 2017,under symbol AAG.
2017 and 2018 IPOs totaling EUR 312.2 mn
IPO on the Main Market, carried out betweenOctober 24 and 25, 2017, closed after less than48 hours following the subscription rate over270%. 25% stake sold by shareholders for RON9 mn (EUR 2 mn). Transilvania Broker becamethe first insurance brokerage company inRomania to be listed on BVB. It started tradingon November 2, 2017, under the symbol TBK.
IPO on the Main Market, carried out betweenOctober 24 and November 2, 2017. 25% stakesold by shareholders for RON 285 mn (EUR 62mn). Sphera Franchise Group, one of the mostimportant foodservice operators in Romania,managing restaurants under the KFC, Pizza Hutand Taco Bell brands, became the first listedfoodservice operator on BVB. It started tradingon November 9, 2017, under symbol SPH.
IPO on the Main Market, following thesale of 49% stake in the company for RON186 mn (EUR 40 mn). Purcari Wineries isone of the largest CEE wine groups,encompassing four wineries in Moldovaand Romania: Purcari, Crama Ceptura,Bostavan and Bardar, operating over 1,000hectares of vineyards. The company is theleader in the premium segment inRomania, with a 26% segment share, andthe largest wine exporter from Moldova,delivering to over 30 countries around theglobe. It started trading on February 15,2018, under symbol WINE.
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Recent Accomplishments
BVB’s Main Market issuer attracted RON 38.25 mn (EUR 8.5 mn) through its 1st
issuance of corporate bonds on the Main Market in April 2017.
The largest corporate bonds issuance in the history of BVB: 2 issuances of EUR 550 mn each, traded in euro.
Third corporate bonds issuance from IIB. Bank managed to attract RON 300 mn (EUR 67 mn) and additional EUR 60 mn through denominated bonds. Forth corporate bonds issuance from IIB in September 2018 of RON 300 mn (EUR 64 mn) and additional EUR 80 mn through denominated bonds.
Attracted RON 610 mn (EUR 135.5 mn) through issuance of corporate bonds on the Main Market in July 2017.
Company attracted RON 9.7 mn (EUR 2.1 mn) in January 2017, listed the bonds on AeRO market in September 2017.
Bonds issues and listings in 2017 and 2018 totaling EUR 3.14 bn
The first Romanian IT company listed on the AeRO market launched its second (BNET22) and third (BNET23) corporate bonds issuances, of RON 4.5 mn (EUR 1 mn) and RON 4.7 mn (EUR 1mn).
InvestiaFinance SA
The issuance comprised 10,000 bonds, non-guaranteed, RON denominated, with a nominal value of RON 100 and a total value of RON 1 mn (EUR 218 k).
The issuance was of EUR 12.52 mn, for 2,505 bonds at a nominal value of EUR 5,000.
NE Property Cooperatief U.A.
The issuance was of EUR 500 mn, for 5,000 bonds at a nominal value of EUR 100,000.
Attracted RON 555 mn (EUR 119 mn) through issuance of municipal bonds on the Main Market in April 2018, with maturity 2028 and 5.6% interest rate p.a..
On June 26, Banca Transilvania announced the successful closing of the private placement of EUR-denominated unsecured Tier 2 Capital subordinated bonds bearing an interest of EURIBOR 6M+3.75% per annum, due in 2028, with an aggregate nominal value of EUR 285 mn.
Romanian Finance Ministry Bonds listingsworth more than RON 3.2 bn (EUR 703 mn)
Bonds private placement of Grup Saptecommunication agency, in Jul-Aug 2018, for RON 2 mn (EUR 430 k) on AeRO market.
Bonds private placement of Elefant Online, online shopping mall, in September 2018, for RON 7.6 mn (EUR 1.7 mn) on AeRO market.
Bonds private placement of Idea Bank Romanian branch for EUR 5 mn on AeROmarket.
Financial Education at Bucharest Stock Exchange
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Over 1.5 million minutes of financial education watched by investors on the YouTube channel of Bucharest StockExchange. In 2018, Digi TV launched a TV show dedicated to capital market news and financial literacy.
Recent Accomplishments
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Recent Accomplishments
Made in Romania in numbers
A unique project of the Bucharest Stock Exchange, launched with the goal of identifying and promoting top Romanian companies in order to finance their growth story via the capital market
• Second edition started January 2018, with201 nominations, 20% larger than 2017, andthe 50 semifinalists already selected.
• +300% more online engagement for thepublic voting session.
• On April 25, BVB awarded its 15 finalists.• All 50 semifinalists passed through the
mentorship program throughout 2018.
NOMINATED COMPANIES
SHORT LISTED COMPANIES
FINALISTS
201
15
50
+20% vs 2017
Business Strategy
14
CCP is a Game Changer
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Business Strategy
Expansion of products and market mechanisms
Stronger presence of international & local investors
Alignment with EU Risk Management Standards
A must for derivatives market
• Product diversification via derivatives
• Ability to trade more investment strategies
• Increased international attractiveness
• Premises for reduced fees
• Increased liquidity from resulting synergies
The CCP project has already received official support from the Regulators while the business plan has been approved bythe shareholders at the EGSM in January.
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A healthy market evolution will only be supported by a CCPBusiness Strategy
Spot Market
Single Stock Futures
Index FuturesSingle StockOptions
Currency (FX)Futures
Energy Derivatives
We are here..
CCP establishment and launching of Derivatives
market
Lending & Borrowing
Regulated lending platform
Phase I -1 year
Phase II –1.5 years
Phase III –1.5 years
Other asset classes (e.g. Repo)
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Business strategy
January 2019
BVB General Shareholders’ Meeting approval of CCPRO Business Plan
29 April 2019(as mandated in the BVB GSM)
Finalization of CCPRO Shareholders Structure
Q2 2019
CCPRO Legal Entity Establishment
H2 2020
Launch of CCPRO operations
completed ongoing
CCP Project Milestones
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Mid-term strategic objective: Upgrade to the Emerging Market Status Business strategy
Increasing retail investors’ base
Attracting more private issuers to the Main Market and AeRO
Improving issuers’ transparency
Launching the derivatives market
Launching new products and trading mechanisms
Establishing the Romanian CCP
Emerging Market
Upgrade
MSCI Global Market Accessibility Review,
June 2018
18
One step closer towards Emerging Market Status
WWW.BVB.RO
Business strategy
MSCI upgraded Romania’s accessibility criteria on 3 notes: trading, market regulation and information flow
“Romania continued its efforts to improve theliquidity and participation in the stock market bylowering trading fees and encouraging more marketmakers to boost market activity. Notable activities forthe Romanian equity market also included the launchof the Issuers Reporting Information System, wherelisted companies are able to release theircommunication to the market efficiently”
Romania has been maintained on Emerging Market Watchlist and is one step closer to obtain the upgrade
The “Liquidity – Sufficient broad market liquidity to support sizeable global investment” criterion is required for attaining Secondary Emerging market status and is currently rated as ‘Restricted’. FTSE Russell acknowledges the continued efforts of the Bucharest Stock Exchange to improve liquidity levels on the exchange.
MSCI
FTSE
Romania was maintained on the Frontier Markets index
“Of the countries listed in the consultation, Polandand Romania were cited most often as countrieswhere a classification change could be justified. Assuch, they may be included in future consultations ifconditions continue to improve”
S&P
FTSE Country Classification Review, March 2019
S&P Dow Jones Country Classification Consultation Results, October 2017
Romanian Capital Market Overview
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Bucharest Stock ExchangeMCap: EUR 18.7 bn
Avg. daily turnover: EUR 9.3 mn/day
Bulgarian Stock ExchangeMCap: EUR 4.4 bnAvg. daily turnover: EUR 0.7 mn/day
CEESEG ViennaMCap: EUR 112.4 bn
Avg. daily turnover: EUR 119.1 mn/day
Budapest Stock ExchangeMCap: EUR 26.7 bnAvg. daily turnover: EUR 31.8 mn/day
Warsaw Stock ExchangeMCap: EUR 145.5bn
Avg. daily turnover: EUR 196.0 mn/day
Source: FESE (data as per February 2019), LJSE, BSE, Main Market, shares
CEESEG PragueMCap: EUR 24.9 bnAvg. daily turnover: EUR 18.0mn/day
Zagreb Stock ExchangeMCap: EUR 18.6 bn
Avg. daily turnover: EUR 0.6mn/day
Romanian Capital Market Overview
Regional perspective
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Positive macroeconomic outlook (1/2)
Appreciation Depreciation
Per cent
Source: Thomson Reuters, NBR, National Statistics Office
Romanian Capital Market Overview
40
50
60
70
80
90
100
110
120
95 97 99 01 03 05 07 09 11 13 15 17 19
Romania real effective exchange rate
-10
-5
0
5
10
15
05 06 07 08 09 10 11 12 13 14 15 16 17 18
Romania GDP
Quarterly: 0.74% Forth quarter: 4.0%
Percentage changes
-4
-2
0
2
4
6
8
10
12
05 06 07 08 09 10 11 12 13 14 15 16 17 18 19
Romania CPI
Headline: 4.0% Core: 2.7%
Twelve-month percentage changes
0
1
2
3
4
5
6
7
8
9
10
04 05 06 07 08 09 10 11 12 13 14 15 16 17 18 19
Romania unemployment rate
Unemployment rate: 3.8%
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Positive macroeconomic outlook (2/2)
per cent of GDP
net balance
Source: Thomson Reuters, NBR, National Statistics Office
Romanian Capital Market Overview
Long-Term Credit Rating
Credit ratings Outlook
Fitch(Nov 16, 2018)
BBB- stable
Moody’s (Aug 24, 2018)
Baa3 stable
Standard & Poor’s(Mar 01, 2019)
BBB- stable
0
10
20
30
40
50
60
70
80
90
100
07 08 09 10 11 12 13 14 15 16 17 18
Romania government debt
-
10
20
30
40
50
60
70
00 01 02 03 04 05 06 07 08 09 10 11 12 13 14 15 16 17 18 19
BET index P/E ratio
P/E BET Index: 7.4
-60
-50
-40
-30
-20
-10
0
01 02 03 04 05 06 07 08 09 10 11 12 13 14 15 16 17 18 19
Romania consumer confidence
Source: BVB
Romanian Capital Market OverviewHigh dividend yields
25WWW.BVB.RO
• Until mid-December 2018, BVB was one of the best performingmarkets in the region, but closed 2018 with a 4.77% drop inthe BET index, the main index of the local capital market,which includes the most traded 15 companies.
• The strong downward trend was triggered on December 19,2018, when information on additional charges on the banking,energy and telecommunications sectors and on themodification of Pillar II appeared, followed by the BETbenchmark decrease by 11.21 %, the entire growth recordeduntil then in 2018 by the local capital market being vanished inone single day.
• At the end of 2018, BET-TR index gained 4.3%, sitting inpositive territory despite the internal developments regardingEmergency Ordinance 114/2018. This comes as the Romaniancapital market has offered one of the highest dividend yields inthe world over the past few years. The average dividend yieldof the market for 2018 was around 7%.
• Since then, the Government has modified the EO 114/2018,softening the tone of the provisions. The market has receivedwell the new changes as the market was up close to 9% in the1st quarter
80
90
100
110
120
130
140
150
160
170
2015 2016 2017 2018 2019
BET vs. BET -TR index (2015-2019 YTD)*
BET BET-TR*As of Mar 31, 2019
7%
8% 12% 11% 6% 7% 0% 14% 10%
8%
6%
23%
14%
10%
5% 5%
15%
20%
Avg.DivY BET
COTE TGN SNN SNP EL TEL SNG BRD
Top DivY BET Index – 2018 vs 2017
DivY 2018 DivY 2017 Additional DivY 2017
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• Steady growth rate of AM’s net assets over the past 4years, reaching EUR 5.7 bn at the end of 2017. Althoughthe no. of investors has moderately decreased during2018, the profile of the Romanian investor tends to leantowards funds that have a higher share of allocationtowards risky assets.
• Advance of more than 19% in 2018 for pension funds’total assets (pillar II and III), after an outstanding increaseof 26% Y-o-Y in 2017.
• During 2018, equity investments increased their value toover EUR 2.0 bn, while ending the year at EUR 1.9 bn.
Source: FSA, AAF, APAPR
Romanian Capital Market Overview
Growing pension funds and asset management industry
4.65.2 5.5 5.7
5.0
403,024 420,766 426,256 414,040
384,374
150,000
200,000
250,000
300,000
350,000
400,000
450,000
0.0
1.0
2.0
3.0
4.0
5.0
6.0
Dec-14 Dec-15 Dec-16 Dec-17 Dec-18
Asset managers: net assets [EUR bn], number of investors, 2014 –2018
Total Assets (EUR bn) Total number of investors
3.3
4.5
5.7
7.3
9.1
10.710.6
0.50.9 1.1 1.4
1.8 1.9 1.8
15.6%
19.2% 19.3% 18.8%20.0%
16.6%
5.0%
7.0%
9.0%
11.0%
13.0%
15.0%
17.0%
19.0%
21.0%
0.0
2.0
4.0
6.0
8.0
10.0
2013 2014 2015 2016 2017 2018 2019
Pension funds: total assets and allocation in Romanian equities, 2013 - 2019 [EUR bn, %]
Total assets (EUR bn) Equity investments (EUR bn) Equity investments (%)
Financial Results Overview
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Financial results overview
BVB Group and the operated markets
Source: Bucharest Stock Exchange, data as of January 31, 2019
Bucharest Stock Exchange
100% free float
Central Depository
69.04%
Bucharest Clearing House
52.5%
Investors Compensation
Fund62.3%
Corporate Governance
Institute100%
Bucharest Stock
Exchange100% free float
Central Depository
69.04%
Bucharest Clearing House
52.53%
Investors Compensation
Fund62.45%
Corporate Governance
Institute
100%
Entities included in the consolidation process
Not included in the consolidation process
Markets operated by BVB
Main Market
Listed companies: 82 domestic and 3 foreign*
Domestic market cap:EUR 18.69 bn
Total market cap: EUR 33.00 bn
Instruments: shares, rights, corporate and
municipal bonds, government securities, structured
products, fund units, tradable UCITS (ETFs), warrants
Listed companies: 291 domestic and 2 foreign*
Domestic market cap: EUR 1.50 bn
Total market cap: EUR 1.59 bn
Instruments: shares, rights, bonds
AeRO market for SMEs
Segments within BVB Group:
• Trading segment – Bucharest Stock Exchange
• Post-trading segment - Clearing & settlement services of the Central Depository
• Registry segment – Registry activities of the Central Depository
• Other services – Activities of the Investors Compensation Fundand of the Bucharest Clearing House - its activity is reported as discontinued operation according to IFRS5
• SIBEX Depository - was acquired on 29.12.2017; the company was liquidated on 28.01.2019.
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Financial results overview
Key financial highlights - consolidated
Profitability ratios, BVB Group (%)
* Indicators based on consolidated financial results
* The financial results for 12M/4Q 2018 are prepared in accordance with IFRS and are not audited.
Financial performance, BVB Group (RON mn, unless otherwise stated)2018
prelim2017
Change(%)
4Q 2018 prelim 4Q 2017 Change (%)
Operating revenues 39.82 38.06 5% 10.85 8.85 22%
Operating expenses (30.95) (28.82) 7% (9.47) (7.94) 19%
Operating profit 8.87 9.24 -4% 1.38 0.91 50%
Net financial revenue/(expenses) 3.61 2.50 44% 0.84 2.06 -59%Gain on bargain purchases – SIBEX merger
- 2.88 - - 2.88 -
(Losses)/Gains from the impairment in associates and subsidiaries
(0.02) (0.03) -12% (0.02) (0.02) 47%
Profit before tax 12.45 14.59 -15% 2.20 5.84 -62%
Profit from continuing operations 10.40 14.69 -29% 1.83 7.31 -75%
Loss from discontinued operations (0.20) - - 0.22 - -
Profit for the period 10.20 14.69 -31% 2.05 7.31 -72%
Total comprehensive income 10.20 14.68 -31% 2.05 7.05 -71%
EPS attributable to owners (RON/share) 1.2097 1.8499 -35% 0.2315 0.9499 -76%
2018 prelim 2017 4Q 2018 prelim 4Q 2017
Operating margin 22% 24% 13% 10%
Net margin 26% 39% 19% 83%
Return on equity (ROE) 9% 12% 2% 6%
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Financial results overview
Key financial highlights – BVB standalone
Financial performance of BVB standalone, before consolidation (RON mn, unless otherwise stated)
2018 (prelim)
2017Change
(%)
2018
(prelim)
without CCP
project
2017
without
merger
impact
Change
(%)
4Q 2018
(prelim)
4Q2017
Change (%)
Operating revenue 24.25 23.69 2% 24.25 23.69 2% 6.84 5.14 33%
Operating expenses (17.09) (16.03) 7% (16.11) (15.69) 3% (5.89) (4.31) 37%
Operating profit 7.16 7.66 -6% 8.14 7.99 2% 0.95 0.83 14%
Net financial revenue/(expenses) 4.00 3.43 17% 4.00 3.43 17% 0.73 1.95 -63%
Profit before tax 11.14 13.91 -20% 12.12 11.40 6% 1.84 5.62 -67%
Profit for the period 9.46 14.25 -34% 10.44 9.90 5% 1.57 7.12 -78%
* The financial results for 12M/4Q 2018 are prepared in accordance with IFRS and are not audited.
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Financial results overviewAnalysis of the preliminary consolidated results for 2018
39.82 38.06
8.87 9.24 10.20 14.69
20182017
Main financial indicators, 2018 prelim vs. 2017(RON mn)
Operating revenues Operating profit Net profit
* The preliminary financial results for 2018 are prepared in accordance with IFRS and are not audited.
23.93
10.11
5.26
0.52
6.85
1.56 0.75-0.29
Trading Post-trading Registry FCI services & otherservices
Distribution of operating revenues and result, by segment, 2018 prelim (RON mn)
Operating revenues Operating profit
• During 2018, the BVB Group recorded consolidated operating revenues of over RON 39.82 mn, 5% increase compared to the sameperiod of the previous year, growth generated by the advance of the trading, post-trading and registry segments.
• The consolidated preliminary operating profit of the BVB Group for the year 2018 is RON 8.87 mn, down by 4% compared to 2017(12 M 2017: RON 9.24 mn), as a result of the 5% increase in operating revenues while the operating expenses advanced by 7%.
• Excluding the impact of the extraordinary expense with the CCP Project (RON 0.98 mn), the preliminary operating profit 2018increased by 7%, up to RON 9.85 mn.
• The preliminary consolidated net profit for the year 2018 reached the level of RON 10.20 mn (12 M 2017: RON 14.69 mn), adecrease by 31% compared to the previous year, 81% generated by the Group's trading segment.
• Without considering the impact of BVB-SIBEX merger in 2017 (RON 4.35 mn) and the effect of the CPP project in 2018 (RON 0.98mn), the consolidated net profit of the Group in 2018 was in amount of RON 11.18 mn, 8% increase compared to the value of RON10.34 mn in 2017 (adjusted to eliminate the merger impact).
+5%
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Financial results overview
Analysis of the Group trading segment revenues (1/2)
Trading segment revenues
Trends in trading activity
Trading fees, 79%
Issuers fees, 9%
Data vending, 6%
Other, 6%
Breakdown of the Group trading segment revenues in 2018 (%)
23.9323.35
6.857.328.21
12.88
20182017
Operating revenues and profit, Group trading segment (RON mn)
Op. revenues Op. profit Net result
* The preliminary financial results for 2018 are prepared in accordance with IFRS and are not audited.
• The trading activity on the shares market registered adecrease of 3% in 2018, from RON 12.07 bn to the levelof RON 11.68 bn. Although the traded value decreasedby 3%, the revenues from trading with shares increasedby 2% as the effect of the increase of the public offerstrades (IPOs and SPOs) which are commissioned at ahigher rate.
• The fixed-income instruments market (bonds andgovernment securities) recorded a significant advance ofthe turnover, by 40% compared to the previous year, to avalue of RON 2.21 bn (12 M 2017: RON 1.58 bn).
• The turnover of the structured products marketincreased also by 27% compared to 2017, up to RON 336mn (12 M 2017: RON 264 mn).
• The capitalization of the Romanian companies was overEUR 18 bn at the end of the first nine months, while thecapitalization of all listed companies on the regulatedmarket of BVB exceeded RON 30 bn in the last tradingsession of 2018.
+2%
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Financial results overviewAnalysis of the Group trading segment revenues (2/2)
Note: Figures are presented on a “single counted” basis and include Deal trades (for stocks and structured products) and offers. Average trading value on regulated stock market including offers.
43.27 53.68
36.36 30.62
59.83
4Q 2017 1Q 2018 2Q 2018 3Q 2018 4Q 2018
Average trading value, shares - regulated market (RON mn/day)
2.68
3.56
2.25 1.99
3.88
4Q 2017 1Q 2018 2Q 2018 3Q 2018 4Q 2018
Trading value for shares, rights and units (RON bn)
0.064
0.088 0.095
0.071 0.084
4Q 2017 1Q 2018 2Q 2018 3Q 2018 4Q 2018
Trading value for certificates (RON bn)
0.29 0.13
1.34
0.02
0.72
4Q 2017 1Q 2018 2Q 2018 3Q 2018 4Q 2018
Trading value, fixed-income instruments (RON bn)
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Financial results overviewAnalysis of operating expenses for BVB Group
* The financial results for 2018 are prepared in accordance with IFRS and are not audited.
16.35 16.86
2.874.16
9.60 9.93
2017 2018
Breakdown of operating expenses, 2018 prelim vs. 2017 (RON mn)
Personnel costs & Directors' fees Third party services Other operating expenses
+7% Business consultancy
Audit services, 7%
Commissions & fees, 14%
Promotion activities,
11%
Other third party
services, 40%
Third party services, 2018 (%)
Rent and office
utilities, 26%
Amortisation, 23%
FSA fees and other taxes,
13%
Marketing (incl. travel),
9%
Other expenses,
29%
Other operating expenses, 2018 (%)• Group operating expenses increased by 7% y-o-y for 2018.
• Personnel and Board remuneration expenses increased by 3%, amid the updateof the BVB Group's remuneration policies, estimated expenditures with benefitsgranted in shares to Board members, management and employees, but also dueto the fact that in 2017 the BVB capitalized RON 0.4 mn as "in-house" intangibleassets, thus reducing the expenditure recorded in the previous year.
• Third party expenses increased by 45%, respectively RON 1.30 mn, mainly as aresult of the CCP Project, as BVB contracted and incurred consultancy andassistance expenses for the establishment of a new subsidiary to be authorizedas Central Counterparty, a one-off expenses, in amount of RON 0.98 mn.
• The Other operating expenses category advanced 3% in 2018 compared to theprevious year, mainly due to the increase in depreciation expense of intangibleand tangible fixed assets after the technology investments in the last years andadjustments for losses on non-current receivables, but the impact wasdiminished by lower marketing and advertising expenses and IT andmaintenance costs.
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Financial results overviewAnalysis of the Group post-trading and registry segment revenues
Post-trading segment revenues
* The financial results for 2018 are prepared in accordance with IFRS and are not audited.
Registry segment revenues
10.119.70
1.561.31 1.671.21
20182017
Operating revenues and profit, Group post-trading segment (RON mn)
Op. revenues Op. profit Net profit
5.26
3.99
0.750.510.80
0.47
20182017
Operating revenues and profit, Group registry segment (RON mn)
Op. revenues Op. profit Net profit
• Revenues from the post-trade activity carried outby the Central Depository (CD) increased by 4%, toRON 10.11 mn (12 M 2017: RON 9.70 mn),influenced by the additional revenues generatedby the admission and maintenance of participantsin the clearing-settlement system of the custodiansand by the increase of revenues directlyproportional to the trading activity, i.e. the localsettlement income.
• Revenues from the registry activity carried out bythe CD in 2018, amounting to RON 5.26 mn (12 M2017: RON 3.99 mn), increased by 32% comparedto the similar period of the previous year, mainlydue to the provision of non-regular services,amounting to RON 0.61 mn, for example thewithdrawal of the shareholders from companiesfor which DC manages the shareholders' registry,but also as a result of the increase in revenuesfrom re-invoiced services to customers, which arealso found in the expenses of this segment ofactivity.
+4%
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Financial results overviewAnalysis of the preliminary consolidated results for 4Q 2018
* The financial results for 4Q 2018 are prepared in accordance with IFRS and are not audited.
10.85
8.85
1.38 0.92
2.05
7.31
4Q 20184Q 2017
Main financial indicators, 4Q 2018 prelim vs. 4Q 2017 (RON mn)
Operating revenues Operating profit Net profit
4.40 4.52
0.71
1.87
2.833.07
4Q 2017 4Q 2018
Breakdown of operating expenses, 4Q 2018 prelim vs. 4Q 2017 (RON mn)
Personnel costs & Directors' fees Third party services
Other operating expenses
• The consolidated operating revenues of the BVB Group increased by 22% in the fourth quarter of 2018 compared tothe same period of the previous year, from RON 8.85 mn to RON 10.85 mn, mainly due to the increase in trading activityof BVB.
• The fourth quarter of 2018 generated a consolidated operating profit of RON 1.38 mn, up by 50% compared to thesame quarter of 2017 (4Q 2017: RON 0.92 mn), in the conditions of an increase of operating revenues by 22%, while theoperating expenses rose to a lesser extent by 19%.
• The preliminary consolidated net profit for the fourth quarter of 2018 was RON 2.05 mn, down by 71% compared withthe net result of the same period of the previous year (4Q 2017: RON 7.05 mn) a decrease significantly influenced bythe events recorded in 4Q 2017, such as the BVB-SIBEX merger and the sale of shares held in foreign exchanges, as wellas the registration in 4Q 2018 of the one-off expenses by the BVB, of RON 0.98 mn, with consultancy and assistanceservices for the establishment of a new subsidiary.
Consolidated financial position (RON mn)
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Note: Dividend yields are calculated using the price on the corresponding ex-dates
Financial results overviewOverview of the consolidated financial position
2018 prelim 2017
Non-current assets 75.39 61.08
Current assets 139.28 142.16
Total assets 214.62 203.24
Shareholders’ equity attributable to owners of the Company
110.22 114.30
Minority interest 10.21 10.70
Short-term liabilities 94.18 78.24
Total equity and liabilities 214.62 203.24
1.18 1.460.87 0.92
1.69
4.4%3.9%
3.2%2.7%
6.8%
0%
1%
2%
3%
4%
5%
6%
7%
8%
9%
0.00
0.50
1.00
1.50
2.00
2.50
3.00
3.50
2013 2014 2015 2016 2017
Dividends and dividend yield
Dividend/share [RON] Dividend yield [%]
• At the end of December 2018, the total assets of the BVB Groupamounted to RON 214.62 mn (31 December 2017: RON 203.24 mn), upby 6% compared with the beginning of the year, mainly due to theincrease in current assets represented by liquidities restricted fordividend payments by the Central Depository to the shareholders of thelisted companies.
• Non-current increased by 23% compared to the beginning of the year toRON 75.39 mn (31 December 2017: RON 61.08 mn), mainly due to theincrease in the financial non-current assets by 28% as some of the currentfinancial assets maturated during 2018 and the released cash wasinvested into non-current financial assets. The current assets decreasedby 2% to RON 139.28 mn (31 December 2017: RON 142.16 mn).
• The amounts available for dividends payment to the Central Depository'sclients were presented in Other restricted assets and recorded, at theend of December 2018, the amount of RON 66.69 mn (31 December2017: RON 50.16 mn).
• On June 11, 2018, BVB started to pay the dividends fromthe 2017 net profit of RON 13.55 mn, representing 100%of the net profit after reserves. The gross dividendapproved for 2017 was RON 1.6862/share.
• Stable dividend policy, with a payout ratio of 100%, afterlegal reserves.
• The dividend policy is expected to remain unchanged.
This presentation is made solely to the intended recipient and should not be distributed to, or acted upon by, any other person. It is for general information only and reflects the personal views of the presenter.Nothing herein is intended to constitute advice on investment, legal or tax matters, any form of personal recommendation nor is it an offering, placement or an invitation to buy or sell shares in Bursa de Valori Bucuresti SA(“Bucharest Stock Exchange” or “BVB”) or in any other issuer of securities mentioned herein or to initiate any kind of transaction whatsoever. Neither BVB nor its directors and its delegates accept any liability of any kind forany losses arising from making use of such information. Any person considering an investment in the BVB or any other security mentioned herein should refer to the relevant issuer’s prospectus and consult their own legal,accounting and tax advisors in order to make an independent determination of the risks, suitability and consequences of an investment in the securities. Any person should get informed before making an investment. Forinvesting in BVB shares, the financial statements, the quarterly/half yearly/annual reports are available on the BVB website www.bvb.ro. The distribution of this presentation in certain jurisdictions may be restricted by law andpersons who come into possession of it are required to inform themselves about and to observe such restrictions and limitations. Neither BVB nor its directors and its delegates accepts any liability to any person in relation tothe distribution or possession of the presentation in or from any jurisdiction.The information contained in this presentation is as of its date, unless otherwise indicated, and is not a complete analysis of every material fact regarding the market, and any industry sector or security. Statements of fact citedby the presentation have been obtained from sources considered reliable but no representation, warranty or undertaking is made as to the completeness or accuracy of such information and no liability is accepted by the BVB,its directors or any of its delegates in relation therewith. Furthermore, no responsibility is accepted for updating any facts or assumptions in this document. Because market and economic conditions are subject to rapidchange, opinions provided are valid only as of the date of the materials. Any forward-looking statements are based upon certain assumptions; actual events are difficult to predict and are beyond the control of the author,therefore actual events may differ from those assumed. References to particular securities are only for the limited purpose of illustrating general market or economic conditions, as such exist at the date of this presentation,and are not recommendations to buy or sell a security or an indication of the author’s or any managed account’s holdings.This presentation herein is issued by BVB.
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: [email protected] • Registrul Comertului: J40/12328/2005 • CUI: 17777754 • Capital social, integral subscris si varsat: 80.492.460 lei
Decizia CNVM Nr. 369 / 31.01.2006
IR Contact:
Mariana Ciurel DirectorEmail: [email protected]: +40 740 104 193Phone: +40 21 307 95 07
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