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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
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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
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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
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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
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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
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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
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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
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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
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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
Capital raised 2006: € 1.85 billion / 20 IPOs
Recent deals: Icade, Prologis, Eurocastle
Source: Euronext & LSE, ICB classification, December 2006
Euronext figures include Alternext, LSE figures include AIM
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
Average value traded (Sep 06, million EUR) 368 363
Capital raised 2005: € 11.1 billion
Recent deals: EDF, Gaz de France, Elia
Source: Euronext & LSE, ICB classification, September 2006
Euronext figures include Alternext, LSE figures include AIM
27
Sector profile: Oil & Gas
Sector market cap (million EUR) 395,850
% total market 13%
Number of stocks 20
Per stock profile Euronext LSE
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
Euronext figures include Alternext, LSE figures include AIM
28
Sector profile: Technology, Media & Telecommunications
Sector market cap (million EUR) 306,930
% total market 12%
Number of stocks 257
PE ratio - sector 34.6
PE ratio - FTSEurofirst 300 14.7
Per stock profile Euronext LSE
Average market cap (million EUR) 1,194 630
Median market cap (million EUR) 75 27
Average value traded (Sep 06, million EUR) 140 43
Capital raised 2006: € 1.4 billion / 36 IPOs
Recent deals: Neuf Cegetel, TomTom, Assima
Source: Euronext & LSE, ICB classification, September 2006
Euronext figures include Alternext, LSE figures include AIM
29
Sector profile: Biotechnology & Pharmaceuticals
Sector market cap (million EUR) 114,463
% total market 4%
Number of stocks 28
PE ratio - sector 21.2
PE ratio - FTSEurofirst 300 14.7
Per stock profile Euronext LSEAverage market cap (million EUR) 4,088 2,373Median market cap (million EUR) 297 55
Average value traded (Sep 06, million EUR) 332 107
Over € 400m capital raised in 2005, € 158m raised 2006
Recent deals: Ipsen, Exonhit Therapeutics, Galapagos
Source: Euronext & LSE, ICB classification, September 2006
Euronext figures include Alternext, LSE figures include AIM
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.
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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
Eurolist case study: TomTom NV (2/3)
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
Eurolist case study: TomTom NV (3/3)
• 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