3Q14 Earnings Presentation

November 14th, 2014

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 in which BM&FBOVESPA operates; (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.
2

3Q14 Highlights
Solid results in a challenging environment; one-off charge
FINANCIAL HIGHLIGHTS (3Q14 vs. 3Q13)

Total revenue: R$594.7 MM, -0.4%

BM&F seg.: R$228.7 MM, flat
Bovespa seg.: R$263.6 MM, +2.5%
Other: R$102.4 MM, -7.8%
Net revenue: R$546.0 MM, +2.0%
Adjusted expenses: R$146.8 MM, -2.3%
Operating income: R$352.2 MM, +3.2%
EBITDA: R$431.2 MM, +3.4%
(EBITDA margin 79.0%)
Financial Results: R$47.3 MM, -4.6%
Adjusted net income: R$357.4 MM, -11.5%
Adjusted EPS: R$0.195, -7.5%

TAX RELIEF PROGRAM (REFIS) ONE-OFF CHARGE

Dispute related to the deductibility of expenses from

Bovespa Holdings IPO
Amount under dispute reduced from R$123.0 MM to
R$69.2 MM one-off net impact of R$63.1 MM (R$18.1
MM as financial expense and R$45.0 MM as income tax)
VOLUME HIGHLIGHTS
Better volumes quarter-over-quarter for both segments
Oct14 volumes: Bovespa seg. +64.0% yoy (all time high);
and BM&F seg. +38.0% yoy
RETURNING CAPITAL TO SHAREHOLDERS
Payout: R$190.7 MM in 3Q14, 80% of GAAP net income
Share buyback: Jul-Oct14: 12.4 MM shares (0.7% of the
free float) 11.2 MM repurchased in October.
MAIN PROJECTS AND UPDATES
Clearinghouses Integration: derivatives module fully
implemented on August 18, 2014
Indices development: partnership with S&P DJI

Excludes stock options plan cost, depreciation, tax on dividends from CME Group and provisions. 2 According to CVM Rule 527/12 that does not exclude equity method accounting.
Excludes deferred liability recognized in correlation with temporary differences from amortization of goodwill for tax purposes, stock options plan cost, investment in associate (CME
Group) accounted under the equity method of accounting, net of taxes related to dividends and taxes paid overseas to be compensated.

Bovespa Segment Performance

Margins positively impacted by the mix effect
AVERAGE DAILY TRADING VALUE (ADTV)
3Q14 vs. 3Q13: +0.8%
Roughly flat at R$7.29 billion, mainly due to:
9.9% increase in average market capitalization
Lower turnover velocity yoy
Volatility related to elections in Brazil positively
impacted volumes from mid-August

TRADING MARGINS (in basis point - bps)

Market
Cash market
Derivatives on single stocks
Options market (stocks / indices)
Forward market
Total Bovespa

3Q14
5.061
13.115
13.145
12.999
5.502

MARKET CAPITALIZATION AND TURNOVER VELOCITY

3Q13
4.991
13.021
13.029
12.999
5.363

3Q14 vs. 3Q13: +2.6%

Trading/post-trade margins impacted by the mix effect:
Lower participation of local institutional investors
Higher participation of equity derivatives
Lower participation of day traders
4

BM&F Segment Performance

Mix effect and FX rate drove RPC down, offsetting ADV growth
AVERAGE DAILY VOLUME (ADV) AND AVERAGE REVENUE PER CONTRACT (RPC)
(in millions of contracts)

3Q14 vs. 3Q13:

ADV: 2.7 million contracts, +7.3%

Contracts with RPC referenced in USD represented ~26%

of derivatives ADV in 3Q14

+47.3% ADV of mini contracts

+38.9% ADV of Interest Rates in USD contracts
RPC: -6.4%
Mix effect: higher participation of lower priced
contracts (mini contracts and options) coupled with
higher participation of day traders
2.5% Real appreciation against USD in the period

REVENUE PER CONTRACT AND FX RATE

MINI CONTRACTS

(in R$)
11.3%

~44% of derivatives revenue was priced in USD in 3Q14

8.6%

9.1%

215.1

202.8

3Q13

4Q13

8.8%

249.4

255.1

1Q14

2Q14

ADV (millions of contracts)

*Average

FX rate (R$/US$) in the quarter, considering the closing price for previous month.

11.9%

316.8

3Q14

% Total

3Q14 Revenue Breakdown

Diversified revenue base
REVENUE BREAKDOWN

CASH EQUITIES TRADING REVENUE

ACCOUNTED FOR
5.9% OF TOTAL

DERIVATIVES REVENUE
(BM&F + BOVESPA) ACCOUNTED FOR
43.5% OF THE TOTAL
38.1%: Cash Market
5.9%: Trading
32.2%: Post-Trade
5.7%: Stock and Indices Derivatives
37.8%: Financial/Commodity Derivatives

Total Revenue
R$594.7 million

18.1%: Brazilian Real interest rate contracts

13.5%: FX Contracts
2.9%: USD interest rate contracts
3.3%: Other Financial/Commodity Derivatives
18.4%: Other Revenue
3.2%: Securities Lending
3.1%: Depository, Custody and Back-Office
3.1%: Vendors
2.0%: Listing
1.6%: Trading Access

1Trading

and Post-trade

3Q14 Expenses Breakdown

Delivering efficiency on a diligent expense management
ADJUSTED EXPENSES (3Q14 vs. 3Q13)
(in R$ millions)

Adjusted Expenses (-2.3%)

Adjusted personnel (-2.2%): (i) headcount downsizing;
(ii) reduction to profit-sharing accrual; and (iii) higher
personnel expenses capitalized
Data processing (-11.5%): 3Q13 was impacted by the
concentration of expenses for software service and
maintenance of IT platforms
Communication (-30.3%): reduction in mail service
expenses, reflecting improvements and electronification
of the statements mailing process
Other (+120.0%): higher donations and contributions
including, particularly:
Contribution to the Federal Government educational
program called Cincias sem Fronteiras

Transfer of fines due to failures in the financial and

physical settlement processes, which are now
destined to BSM

*Include expenses with maintenance in general, taxes adjusted by the dividends from CME Group, board and committee members compensation and others.

9M14 Expenses Breakdown

Pursuit of greater efficiency and controlling expenses
Prioritization of activities, review of contracts and enhancement of processes has resulted in
greater efficiency
9M14 adjusted expenses grew 2.5% yoy, significantly bellow inflation

Third party
Marketing Communicat.
services

Data
processing

Personnel
expenditure

(in R$ millions)
9M13

Main forces pressuring

expenses

Main factors offsetting

expenses growth

-2.2%

Average annual wage

increase of 7.0%

Diligent management of
assets and headcount
dimensioning; lower profit
sharing

3.5%

-3.0%

Higher expenses from new

IT platforms maintenance
and inflationary contract
adjustments

Review of contracts,
legacy system deprecated

2.9%

-3.6%

Inflationary contract
adjustments

Contracts review

260.6
226.5

9M14

264.2
237.5

9M13

81.3

9M14

84.2

9M13

25.7

4.9%

26.5

9M14

-22.8%

-27.6%

Inflationary contract
adjustments

Improvements and
eletctronification of the
mailing process for
statements successfully
implemented

-18.0%

-23.2%

Inflationary contract
adjustments

Strategic review of
marketing activities;
ongoing process of
expenses review

13.2

9M13
9M14

10.2

9M13

9.9

9M14

Real Var.

Nominal Var.

8.1

Includes personnel capitalization and excludes stock option and bonus expenses, Calculated based on the annual wage increase between 2013 and 2014 for personnel expenditure and
the IPCA of services accumulated from September, 2013 to September, 2014 for the other expenses lines.

Financial Highlights
Consistently returning capital to shareholders
CASH AND FINANCIAL INVESTMENTS

RETURNING CAPITAL TO SHAREHOLDERS

(In R$ millions)

Payout

3Q14

2Q14

1,390

360

1,131

404

1,037

909

R$190.7 MM in dividends (80% of the 3Q14 GAAP net

income): payment on November 28th (shareholders
position of November 17th)

3,842

1,055

3,497

1,053

Share Buyback
1Q14

4Q13

3Q13

2,441

2,134

1,686

432

457 359

497 355

897

1,307

1,921

1,960

5,077
4,871

4,498

Market participants cash collateral and others

Subsidiaries
Clearinghouses' required safeguards
Available funds

Mar-Oct14: 41.5 MM shares (R$456.9 MM) under the

current program (up to 100 MM shares until Dec14)
YTD14: 78.4 MM shares (R$827.4 MM) reaching 4.1% of
the free-float

FINANCIAL RESULT
Financial result of R$47.3 MM, down 4.6% from 3Q13,
explained mainly by R$18.1 MM interest payment in
connection with the settlement of a tax dispute under the
REFIS

CAPEX
Clearinghouses required safeguards: growth in line
with additional collateral pledged by market
participants

3Q14: R$47.7 MM (R$153.7 MM in 9M14)

Capex budget ranges:
2014: between R$230 260 MM
2015: between R$190 220 MM

Includes earnings and rights on securities in custody.

Includes third party collateral at BM&FBOVESPA Settlement Bank (Banco BM&FBOVESPA).

BM&FBOVESPA Clearinghouse and CORE

Capital efficiency, IT resilience and higher quality services

BM&FBOVESPA Clearinghouse
Phase 1: financial and commodity derivatives market
On August 18, post-trade for financial and
commodities derivatives successfully migrated
to the new integrated clearinghouse, benefiting
investors in these markets with the capital
efficiency brought by CORE

Capital Efficiency
R$20 billion in collaterals was released
R$15 billion reduction in required collateral
R$5 billion increased value of collaterals

Phase 2: equities and corporate fixed income markets

2014

2015

2016

Phase 1 (derivatives)
Deployment of the new
Clearinghouse in the
derivatives market

Phase 2 (equities)
IT development and
beginning of testing

Phase 2 (equities)
Certification, parallel
production and go live
(4Q16)*

*Implementation subject to the results of the tests with the market and the authorization of the regulators.

10

Resilient IT Infrastructure
Capacity and resilience of the system tested in times of high volatility

Investments in trade and post-trade platforms ensured the resilience

of our systems in a period of messages and trades peaks

486 uninterrupted trading days*

Msgs Bovespa Seg. (04/29/14)

Msgs BM&F Seg. (08/13/14)

# of Trades in the Bovespa Seg. (million)

3

Less than three months after

its launch, the new
Clearinghouse has already
handled record volumes in the
BM&F Segment

Oct-27-14
Record # of Trades
2,582,718

# of Trades in the BM&F Seg. (million)

400
300

Oct-16-14
Record # of Trades
376,741

200
1

0
Jan-14 Feb-14Mar-14 Apr-14 May-14 Jun-14 Jul-14 Aug-14 Sep-14 Oct-14 Nov-14

100
0
Jan-14 Feb-14Mar-14 Apr-14 May-14 Jun-14 Jul-14 Aug-14 Sep-14 Oct-14

* Until Nov. 13th, 2014

11

APPENDIX

12

Growth Products
Increasing revenue diversification
REVENUE GROWTH OF SELECTED PRODUCTS

Products well accepted by clients, with continuous developments to maintain growth

trend

Securities Lending
Tesouro Direto
Market maker for options on single stocks
Exchange traded funds (ETF)
Agribusiness credit bills (LCA)
Real estate investment funds (FII)
Non sponsored Brazilian Depositary Receipts (BDRs N1 NP)

CAGR
(2010-14):

+22.9%

(In R$ millions)

13

Financial Statements
Summary of Balance Sheet (Consolidated)
ASSETS

LIABILITIES AND SHAREHOLDERSEQUITY

(in R$ millions)

9/30/2014

12/31/2013

(in R$ millions)

3,025.6

4,319.5

370.0

1,196.6

Collateral for transactions

2,337.0

2,853.4

Others

318.5

269.5

22,214.7

21,577.2

1,517.3

1,135.4

1,134.2

820.8

383.1

314.6

3,544.6

3,346.3

421.0

423.2

16,731.7

16,672.3

Others

Goodwill

16,064.3

16,064.3

Minority shareholdings

Total Assets

25,240.3

25,896.7 Liabilities and Shareholders equity

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

Others
Investments
Property and equipment
Intangible assets

9/30/2014

12/31/2013

1,888.7

2,710.8

1,333.4

2,073.0

555.3

637.9

Non-current liabilities

4,386.1

3,886.9

Foreign debt issues

1,493.2

1,426.2

Deferred Inc. Tax and Social Contrib.

2,718.7

2,295.8

174.2

165.0

18,965.4

19,298.9

2,540.2

2,540.2

15,213.7

16,056.7

1,196.4

687.3

15.1

14.7

25,240.3

25,896.7

Current liabilities

Others

Shareholders equity
Capital stock
Capital reserve

14

Financial Statements
Net income and adjusted expenses reconciliations
ADJUSTED NET INCOME RECONCILIATION
3Q14

3Q13

238.4 281.6
7.3
5.6
138.6 138.9
(43.7) (38.2)
16.7
15.8
357.4 403.7

Net Income*
Stock options plan
Deferred tax liabilities
Equity in income of investees (net of taxes)
Recoverable taxes paid overseas
Adjusted Net Income

Change
3Q14/3Q13
-15.3%
30.2%
-0.2%
14.3%
5.6%
-11.5%

2Q14
250.1
7.6
138.6
(39.8)
16.3
372.8

Change
3Q14/2Q14
-4.7%
-3.2%
0.0%
9.9%
2.5%
-4.1%

9M14

9M13

744.6
21.8
415.9
(128.1)
51.2
1,105.4

899.4
21.4
416.7
(117.0)
47.4
1,267.9

Change
9M14/9M13
-17.2%
2.0%
-0.2%
9.4%
7.9%
-12.8%

* Attributable to BM&FBOVESPA shareholders.

ADJUSTED EXPENSES RECONCILIATION

3Q14
Total Expenses
Depreciation
Stock options plan
Tax on dividends from the CME Group
Provisions
Adjusted Expenses

193.8
(29.5)
(7.3)
(5.8)
(4.3)
146.8

3Q13
194.1
(32.5)
(5.6)
(5.1)
(0.6)
150.2

Change
3Q14/3Q13
-0.2%
-9.2%
30.2%
13.2%
-2.3%

2Q14
178.2
(28.0)
(7.6)
(5.3)
(3.2)
134.1

Change
3Q14/2Q14
8.7%
5.2%
-3.2%
9.2%
36.7%
9.5%

9M14
558.3
(87.1)
(21.8)
(16.6)
(15.4)
417.4

9M13
543.7
(88.4)
(21.4)
(14.8)
(11.8)
407.3

Change
9M14/9M13
2.7%
-1.5%
2.0%
12.1%
30.4%
2.5%

15

Financial Statements Summary

SUMMARY OF INCOME STATEMENT (CONSOLIDATED)

(in R$ millions)
Net revenues

3Q14

3Q13

Change
Change
2Q14
9M14
3Q14/3Q13
3Q14/2Q14

546.0

535.4

(193.8)

(194.1)

352.2

341.3

64.5%

63.7%

47.3

49.6

-4.6%

59.5

Financial result

449.0

434.2

3.4%

Net income*

238.4

281.6

Adjusted net income

357.4

Adjusted EPS (in R$)

Adjusted expenses

Expenses
Operating income
Operating margin
Equity in income of investees

2.0%

464.8

-0.2% (178.2)
3.2%

9M13

17.5% 1,500.5 1,656.2

8.7%

(558.3)

Change
9M14/9M13
-9.4%

(543.7)

2.7%

942.1 1,112.5

-15.3%

286.6

22.9%

76 bps 61.7%

286 bps

62.8%

67.2%

-438 bps

-20.5%

154.9

129.8

19.3%

391.1

14.8% 1,241.7 1,374.2

-9.6%

-15.3%

250.1

-4.7%

899.4

-17.2%

403.7

-11.5%

372.8

-4.1% 1,105.4 1,267.9

-12.8%

0.195

0.211

-7.5%

0.203

-3.8%

0.601

0.660

-9.0%

(146.8)

(150.2)

-2.3% (134.1)

9.5%

(417.4)

(407.3)

2.5%

744.6

* Attributable to BM&FBOVESPA shareholders.

16

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BM&FBOVESPA Investor Relations

+55 (11) 2565-4729 / 4418 / 4834 /4703
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