download/materials/aaaron_goldstein_ipo_3.ppt

Euronext: Gateway to the €uro-zone

HollandFrance

Portugal

Belgium

February 2007

2

Euronext today

The world’s first integrated cross-border exchange Operating in 5 European countries and the U.S.

•Europe’s largest central orderbook exchange

•The world’s second largest derivatives market Business worth €1,700 billion traded every day

•A leading supplier of exchange trading technology Used worldwide by most leading cash & derivatives exchanges

•A listed company - market capitalisation of € 9 billion Merger with NYSE expected by end Q1 2007

Source: Euronext

3

Euronext’s competitive position in Europe

Euronext27%

London Stock Exchange

27%

OMX8%

Deutsche Börse12%

Spanish Exchanges

10%

Borsa Italiana7%

SWX9%

MARKET CAPITALISATION

European cash equity market capitalisation

(year end 2006)TRADING VOLUMES

(full year 2006)

Source: Federation of European Securities Exchanges (FESE)

• Equal largest equity market in Europe

• Largest trading platform in Europe

0

500

1,000

1,500

2,000

2,500

Euronext London StockExchange

DeutscheBörse

SpanishExchanges

Borsa Italiana OMX SWX Group

Val

ue

trad

ed €

bil

lio

n

0

20

40

60

80

100

120

Mil

lio

n t

rad

es

Turnover Trades

4

Sector comparison Euronext vs LSE

Euronext – largest in Technology, Consumer Goods, Utilities, Industrials

LSE – largest in Financials, Basic Materials, Oil & Gas

Total market cap = €3,045 billion Total market cap = €3,029 billion

Source: Euronext & LSE data as at end 2006. ICB classification, domestic & primary listings, includes main market, junior market, equity investment instruments.

Euronext

6%

9%

26%4%

13%

4%Technology4%

Utilities10%

Consumer Goods13%

Industrials11%

Basic Materials

Consumer Goods

Consumer Services

Financials

Health Care

Industrials

Oil & Gas

Technology

Telecommunications

Utilities

London Stock Exchange

10%

12%

7%

8%

1%

5% 4%

Financials31%

Basic Materials8%

Oil & Gas14%

5

Euronext – International Listings

Breakdown of listed companies

25% of Euronext’s 1,300 companies are international

Selected international companies:

Arcelor Mittal, Corus Group, Daiwa, Deutsche Bank,

Exxon Mobil, Fiat, Hitachi, Honda, HSBC, Maroc

Telecom, Mitsubishi Electric, NEC, SES Global,

Sharp…...

Selected domestic companies:

ABN Amro, AXA, BNP Paribas, Carrefour, Danone, EDF,

Fortis, France Telecom, GDF, Heineken, ING Group,

L’Oréal, LVMH, Michelin, Philips, Renault, Royal Dutch

Shell, Sanofi-Aventis, Société Générale, Suez, Total,

Unilever……

75%

25%

International Companies

Domestic Companies

6

Top ranked for raising fresh capital in the world

• € 17.2 bn fresh capital raised, 78 new listings in 2005……continuing with € 21.4 bn raised, 142 new listings 2006.

• The world’s largest IPO 2005: EDF

• An additional mkt cap of € 201 bn since Jan 2005

Selected Deals

Milestones:

Key market for raising capital

Highly active hi-tech segment

More privatisations than any other exchange

Large caps

EDF (Electricité de France) Utilities - electricity € 7,000m

KKR Private Equity Specialty finance $ 5,000m

Mid caps

Eutelsat Satellite network € 860m

Tom Tom GPS navigation € 467m

Small caps

Environnement Environmental measurement € 23m

ExonHit Therapeutics Biotechnology € 3.8m

7

Unique access to European asset managers Geographical split of equity fund assets typifies wider European investment profile

Euro-zone countries dominate – 71.5% of total equity funds under management

Fragmented market – cross-border access is key

Euronext gives access to the Euro-zone…as well as UK based investors: all major London

investment banks are active members

Source: European Fund and Asset Management Association

Outside €uro-zone

28.5%

€uro-zone71.5%

Breakdown per area

Euronext23.8%

UK19.6%

Others8.9%

Euro-zone (excl. Euronext)

47.7%

The European Equity Fund Market

0%

5%

10%

15%

20%

25%

30%

Listing requirements

9

Listing requirements – overview

Eurolist Main

Board

EU regulated market for large, mid & small caps

* Minimum 25% shares distributed to the public * Three-year track record required (exemption for funds)* IFRS, US GAAP or recognised accounting standards

Ongoing obligations* Audited FY and audited/un-audited half-year accounts* Timely disclosure

* Two-year track record (exemption for funds) * IFRS, US GAAP or local GAAP with reconciliation table

Ongoing obligations less demanding* Audited FY accounts, un-audited half-year reports * Simplified reporting methods * Timely disclosure

Alternext Junior Market

Exchange-regulated market for mid & small sized companies

10

Eurolist – the main board

One cross-border regulated market - one rule book

One single cross-border trading platform

Borderless: Companies are classified in alphabetical order and identified on

the basis of capitalization rather than on geographic location

Large caps (group A: > €1 billion)

Mid caps (group B: between €150 million and €1 billion)

Small caps (group C: less than €150 million)

• Equal opportunity for international companies to join key indices

11

Eurolist – key features Language

English – fully accepted for entire listing process and documentation, including prospectus

Listing instruments Shares Depositary Receipts (EDR, GDR, ADR) Corporate bonds Derivative instruments, including Convertibles, Options, Warrants and Futures

Currency of listing Euro - the world’s second most important currency Or any other major currency

Regulatory environment – tailor-made for cross-border business Sound regulatory framework – provides credibility No Sarbanes Oxley regulation!

12

Eurolist – flexible services for issuers

Broad service offering

Pre-listing: Support during the listing process

Support with company roadshows

Post-listing: Ensuring orderly trading of listed shares and other securities

LP (Liquidity Provider) programme

Ensuring the timely dissemination of information to market participants

Maintaining the market indices

Access to Euronext.liffe derivatives market

Euronext.club: on-line web tools available to each issuer with shareholder and market information

Support for the smooth running of corporate actions

Investor relations support and education

13

Legal Marketing

Due diligence

Required financial statements

Positioning

Valuation

Deal structure

Prepare prospectus

Apply for listing & regulatory approval

(through listing agent)

Analyst meeting

Presentation material and Q & A practice

Pre-marketing to institutionsEuronext

Listing admission

Regulator

Prospectus

Book building

Road show and marketing to investors

Appoint listing agent / Lead manager

Price fixing

Allocation

Trading

T– 30 to 90 days

T– 14 days

T– 3 to 6 months

Listing and IPO process

Euronext involvement

List on Eurolist

Start trading

Alternext

the junior market

15

Alternext – the junior market

Why Alternext? More than 1m €uro-zone SMEs eligible…

…but substantially fewer than 1% listed!

Alternext is an exchange-regulated market;

Designed for small and mid sized companies

Open for companies from all sectors and countries

Launched in France in May 2005, Belgium in June 2006, The Netherlands in November 2006.

Broad €uro-zone access Same 4-country trading platform for Eurolist and Alternext

http://www.euronext.com/alternext/landing/0,5371,1732_203915424,00.html

16

Alternext – key listing requirements

2 year company track record (exempt for funds)

IFRS or local GAAP with IFRS reconciliation tables Audited FY accounts, un-audited 6 months report

Market access:

Fast track dual listing through recognised market status Access via offering circular for companies listed on another market

Ongoing obligations simplified

Public offeringAccess to retail and/or qualified investors

Private placementAccess to qualified investors only

Minimum free float: € 2.5m Minimum placing: € 5mProspectus cleared by regulator

EU Prospectus Directive

Offering circularNot cleared by regulator; disclosures under

responsibility of the Listing Sponsor & Issuer

17

Alternext - Listing Sponsors

Use of a Listing Sponsor is mandatory

Two main roles as the listed company's long-term partner: Support the company in preparing for listing

Ensures company fulfils ongoing obligations

No fees to be Listing Sponsor

Requirements to become a Listing Sponsor: 2 years relevant experience Liability insurance Fill in application form

Currently 55 Listing Sponsors registered…and counting

18

Alternext – sector breakdown*

Alternext has achieved its target as a broad marketplace for SMEs

* Market capitalisation, January 2007 - ICB (Industry Classification Benchmark)

0.0% 2.0% 4.0% 6.0% 8.0% 10.0% 12.0% 14.0% 16.0% 18.0% 20.0%

Technology

Financials

Utilities

Telecommunications

Consumer Services

Health

Consumer Goods

Other Industrials

Business Services

Electronics

Construction

Basic Materials

Oil & Gas

19

Alternext – size profile

Alternext’s target company size of €20m - €250m achieved.

No micro-caps… …better liquidity

Distribution of companies by market capitalisation

Alternext

0%5%

10%15%

20%25%

30%35%

0 - 2 2 - 5 5 - 10 10 - 25 25 - 50 50 - 100 100 - 250 250 - 500 500+

€ m

Distribution of companies by market capitalisation

AIM

0%

5%10%

15%20%

25%30%

35%

0 - 2 2 - 5 5 - 10 10 - 25 25 - 50 50 - 100 100 - 250 250 - 500 500+

€ m

20

Alternext – market structure and liquidity

Alternext AIM

Trading model Hybrid: option of orderbook or market maker

Mainly market maker dependent

All-share performance 2006 28% - 0.2%

Average market cap (mean) € 46m € 80m

Median market cap € 34m € 30m

Liquidity*Average monthly number of transactions per stock

687 168

Overall velocity 72% 66%

Percentage of stocks with greater than 50% velocity

35% 28%

Source: Euronext & LSE. *Q4 2006

Alternext today

Alternext vs AIM

Number listed companies 85

Total market capitalisation € 4.0 billion

Average deal size € 8.4m

Deal size range € 2.7m to € 23.3m

21

Alternext: IPOs and investor base

IPOs: 80% institutional investor

participation, underpinning valuations

Investors: Institutions from 14 countries Broad continental European

institutional take-up Strong US-UK acceptance

Origin of institutions(as of September 2006)

Germany11%

Italy1%

Australia1%

Austria1%

Euronext zone55%

U.S.3%

U.K.16%

Luxembourg5%

Spain3%

Sweden2%

Switzerland2%

Alternext: truly pan-European

22

Alternext: Listing Sponsors

Aélios Finance

Allegra Finance

Amsterdams Effectenkantoor

Arkéon Finance

Atout Capital

Aurel Leven Securities

Avenir Finance Corporate

Banque Degroof

Banque Palatine

Banque Privée Fideuram Wargny

Bryan, Garnier & Co

Cassagne Goirand et associés

CFD Corporate Finance

CIC Banque CIO

Clipperton Finance

Close Brothers

CM-CIC Securities

Crédit du nord

EFI

Euroland Finance

Exco

Fideuram Wargny

First Dutch Capital

Fortis

Global Equities

Grant Thornton

H & Associés

IBI

ING Bank NV

ING Belgium

Intuitu Capital

Invest Securities

IXIS Midcaps

KBC Securities

Kempen & co

Kepler Equities

KPMG Corporate Finance

Leleux Associated Brokers

L'Lione & Associés

Natexis Bleichroeder

Nexfinance

Nextcap

NIBC

Oddo Corporate Finance

OTC Securities

Petercam

Portzamparc Société de Bourse

Rabobank

Résalliance & Associés

SNS Securities

Société Générale

Sodica

Teather & Greenwood

Vizille Capital Finance

Contact details: www.alternext.com

Sectors

24

Sector profile: Financials

Sector market cap (million EUR) 725,677

% total market 26%

Number of stocks 174

PE ratio - sector 27.6

PE ratio - FTSEurofirst 300 14.7

Per stock profile Euronext LSE

Average market cap (million EUR) 4,171 1,727

Median market cap (million EUR) 315 60Average value traded (Sep 06, million EUR) 276 91

Capital raised 2006: € 15.2 billion / 33 IPOs

Recent deals: SNS Reaal, KKR Private Equity Investors, AP (Apollo) Alternative Assets

Source: Euronext & LSE, ICB classification, September 2006

Euronext figures include Alternext, LSE figures include AIM

25

Sector profile: Real Estate

Sector market cap (million EUR) 95,803% total market 3%Number of stocks 89PE ratio - sector 34.9PE ratio - FTSEurofirst 300 14.7

Per stock profile Euronext LSEAverage market cap (million EUR) 1,076 738Median market cap (million EUR) 202 198

Average value traded (Sep 06, million EUR) 30 26


Recent deals: Icade, Prologis, Eurocastle

Source: Euronext & LSE, ICB classification, December 2006


26

Sector profile: Utilities

PE ratio – Utilities 28.4

PE ratio – Electricity (sub-sector) 33.3

PE ratio – FTSEurofirst 300 14.7

Number of stocks 17

Euronext LSESector market cap (million EUR) 217,072 123,762% total market 10% 4%Per stock profileAverage market cap (million EUR) 12,769 5,157


Capital raised 2005: € 11.1 billion

Recent deals: EDF, Gaz de France, Elia



27

Sector profile: Oil & Gas


% total market 13%

Number of stocks 20


Average market cap (million EUR) 28,081 3,185

Median market cap (million EUR) 2,890 93Average value traded (Dec 06, million EUR) 1,203 130

Capital raised 2006: € 1.1 billion

Recent deal: Galp Energia

Source: Euronext & LSE, ICB classification, December 2006


28

Sector profile: Technology, Media & Telecommunications


% total market 12%

Number of stocks 257




Average market cap (million EUR) 1,194 630

Median market cap (million EUR) 75 27



Recent deals: Neuf Cegetel, TomTom, Assima



29

Sector profile: Biotechnology & Pharmaceuticals


% total market 4%

Number of stocks 28



Per stock profile Euronext LSEAverage market cap (million EUR) 4,088 2,373Median market cap (million EUR) 297 55


Over € 400m capital raised in 2005, € 158m raised 2006

Recent deals: Ipsen, Exonhit Therapeutics, Galapagos



Case Studies

31

Eurolist case study: Prologis European Properties (1/2)

Activity:

Prologis European Properties (PEP) is an externally managed real estate investment

fund. Portfolio consists of 281 high quality distribution facilities comprising 5.4 million

sq metres of leasable space in 11 countries, valued at € 4.2 billion as of June 2006.

Deal size (22 Sept 06):

Valuation: € 2.7 bn

Offer price: € 14.35 (12% premium to

30-Jun-06 NAV)

Funds raised: € 715m (incl. € 65m

greenshoe)

Free float: 29.5%

Deutsche Bank and Morgan Stanley – joint global co-ordinators and bookrunners.

Largest European real estate IPO YTD ’06 & 2nd largest European real estate IPO ever.

32

Eurolist case study: Prologis European Properties (2/2)

Europe74%

US22%

Australia4%

• Share price +18% after first 4 months

• Index inclusion: AEX Real Estate, AEX Financials

Broad take-up by geography:

“The deal attracted long-only specialist real estate investors from all around the world…”

IFR, 23 September 2006

Reasons for choosing Euronext:

Assets & continuing growth in the Euro-zone

Only major exchange to accept ‘Fonds Commun de Placement’ (FCP) structure

33

Eurolist case study: KKR Private Equity Investors (1/2)

Features: KKR Private Equity Investors is a Guernsey limited partnership investment

vehicle created by KKR (Kohlberg Kravis Roberts), the US private equity firm.

- Listed closed-end fund

- 75% assets invested in KKR funds / 25% in opportunistic investments

- KKR has a 30 year track record of superior investment returns

IPO date – 3rd May 2006:

Funds raised: $5 billion

Raised over 3 times original target

Offer price: $25.00 (approx. NAV)

Joint global coordinators and bookrunners: Morgan Stanley, Citigroup, Goldman Sachs

34

Eurolist case study: KKR Private Equity Investors (2/2)

Reasons KKR selected Euronext as its listing venue:

“Euronext gives global investment focus and global investor base”

No restrictions on investment in a single project

Limited partnerships can list on Euronext Amsterdam

Flexible corporate governance code

High net worth individuals

15%

Mutual funds55%

Long-orientated hedge funds

30%

US71%

Europe/Asia29%

Broad take-up by style and geography:

35

Eurolist case study: TomTom NV (1/3)

Activity:

TomTom is a leading provider of personal navigation products and services to the

consumer mass market.

TomTom products include integrated devices, which enables navigation right out of

the box (eg screen in car) and non-integrated solutions for navigation on third-party

devices like PDAs and smartphones.

Key figures (2004):

Revenues: € 192.4m

Net profit: € 27.7m

Deal size (June 05):

Valuation: € 1,857m

PE ratio: x67

Price/Sales: x9.2

Funds raised: € 467m (of which capital increase of € 124m)

10x oversubscribed

Goldman Sachs International and Lehman Brothers acted as joint leads.

36


Hedge Funds31%

Long only Funds63%

Retail0.3%

O ther4%

Private Banks2%

Allocation by Style

Holland6%

France7%

Swe de n3%

USA20%

UK35%

Switz .7%

Italy8%

Ge rm any8%

O the r6%

Allocation by Geography

Share Allocation

37


• Share price +80% in first year, outperforming index

• Free float: 29%

• Trading activity (daily average): € 19 million / Velocity: 200%

• Index inclusion: AEX, Next150

38

Alternext case study: Assima plc (1/2)

UK-based Assima was founded in 2002 and publishes software for training and learning.

In 2005, Assima was the fastest growing company in the UK*.

Geographically, net sales breakdown as follows: United Kingdom (52.1%), Europe (29.2%)

and other (18.7%).

Key figures (2005):

Revenues: € 12.6m

Net profit: € 291,000

Deal size – 17 October 2006:

Valuation: € 37.5m

Funds raised: € 5.5m

PE ratio: x130

Price/Sales: x3

Good take-up for the private placement among French institutional investors

Listing Sponsor: Avenir Finance Corporate

*Source: Daily Telegraph/Library House

39

Market capitalisation

42.2

37.5

34

36

38

40

42

44

Oct 06 Jan-07

Eur

os (

mill

ion)

+ 12.5%

Facts & Figures

First UK company to join Alternext

Current valuation of € 42.2m

Valuation 12.5% above issue price

Alternext case study: Assima plc (2/2)

Reasons for choosing Euronext:

Enhance corporate profile Better access to develop pan-European activities “Euro as acquisition currency to finance growth in the Eurozone”

Why Euronext?

41

Why Euronext?

Gateway to the €uro-zone

• Publicity: cross-border access to investors, customers & business partners• Acquisition currency: €uro – a key currency• Huge pool of assets under management• Single entry point gives broad European access for listing and trading

Leading cross-border exchange with a pan-European reach

• Top-ranked globally for capital raising• Largest central orderbook trading volumes in Europe • International companies can join local indices• Broad service offering for early stage and mature companies

42

International Listings department:

Martine Charbonnier Executive Director – Listing & Issuer

Relations Phone: +33 14927 1608 Email: [email protected]

Nathanael Mauclair Deputy Director – International Listings Phone: +33 14927 5372 Email: [email protected]

Aaron GoldsteinDeputy Director – International ListingsHead of Russia Business DevelopmentPhone: +44 20 7379 2907Email: [email protected]

James Posnett Manager – International Listings Phone: +44 20 7379 2577 Email: [email protected]

Erik Wenngren Director – International Listings Phone: +44 20 7379 2087 Email: [email protected]

Kang Pan (Mr)Deputy Director – International ListingsHead of China Business DevelopmentPhone: +44 20 7379 2085Email: [email protected]

Duco Wildeboer Manager – Listings, Amsterdam Phone: +31 20550 4173 Email: [email protected]

Yin Yee Chan (Ms) Analyst – International Listings Phone: +44 20 7379 2746 Email: [email protected]

www.euronext.com/listing

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