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EURONEXT GATEWAY TO THE €URO ZONE
HollandFrance
Portugal
Belgium
November 2005
2
Euronext todayEuronext today
Europe’s largest central order book securities market • € 6.5 billion average daily turnover • € 9.4 billion fresh capital raised in 2004 and €15.6 billion YTD• Over 25% of listed companies are international
The world’s second largest derivatives market• Business worth €1,000 billion traded every day• Extensive range of financial and commodity derivatives products
A leading supplier of exchange trading technology• Used worldwide by most leading cash & derivatives Exchanges
The world’s first cross-border exchange• Operations in 5 European countries and the USA
Source: Euronext
3
Euronext’s competitive position in EuropeEuronext’s competitive position in Europe
MARKET CAP.
European cash equity market capitalisation
CENTRAL ORDER BOOK
Trading value
(in billion €)
Sources: FESE, Euronext, as of Dec 2004
LSE29%
OMX6%Milan
8%
Spanish Exchanges
10%
DB12%
EURONEXT
25%SWX
9%
• Largest equity market in continental Europe
• Largest central order book in Europe
4
Euronext – International ListingsEuronext – International Listings
Breakdown of listed companies
Domestic Co’s75 %
International Co’s25%
25% of Euronext’s 1300 companies are international
Selected international companies:
Arcelor, Daiwa, Daimler Chrysler, Deutsche
Bank, Exxon Mobil, Fiat, Ford, General
Motors, General Electric, Hitachi, Honda,
HSBC, McDonalds, Maroc Telecom,
Mitsubishi Electric, NEC, SES Global, Sharp
7 Israeli companies listed
5
More capital raised than any other European More capital raised than any other European exchange exchange (in 2004)(in 2004)
Capital Media GroupCapital Media Group
• Euronext helped businesses raise €9.4 billion fresh capital in 2004
• 52 new listings
• Europe’s largest IPO: Belgacom
• Cross-border successes:
- SES Global (Luxembourg)
- Maroc Telecom (Morocco)
- Cimex Pharma (Switzerland)
- Sacyr Vallehermoso (Spain)
- Hammerson (UK)
€ 3,600 mn
€ 1,300 mn
€ 1,200 mn
€ 507 mn
€ 1,200 mn
€ 217 mn
Selected DealsMilestones:
6
Continued strong performance in 2005Continued strong performance in 2005
• €15.6 billion fresh capital raised in
2005 YTD
• 57 new listings
• The world’s largest IPO 2005: EDF
• An additional Mkt cap of € 99 bn
• Large listings in various sectors:
- Utility: EDF (€ 58.6 bn)
- Energy: GDF (€ 22.6 bn)
- Investment funds: RHJ Int’l (€1.53 bn)
- Hi-tech: Tom Tom (€ 1.86 bn)
Selected Deals (capital raised)Milestones:
€ 7,000 mn
€ 1,060 mn
€ 657 mn
EDF
GDF
Telenet
Sanef
RHJ International
Tom Tom
€ 837 mn
€ 467 mn
€ 3,482 mn
7
Unique access to European asset managersUnique access to European asset managers
• Geographical split of investment fund assets typifies wider European investment profile
• Huge pool of AUM - € 4.2 Trillion
• Good growth rates >10 % annually
• Euro zone countries dominate – 85% of total AUM
Total Net Assets of UCITS(in EUR billions)
4,186
3,763
3,327
0
500
1 000
1 500
2 000
2 500
3 000
3 500
4 000
4 500
2002 20042003
Breakdown per area
UK 9.1%
Others (outside Euro zone)
7.3%
Euronext24.5%
Euro zone (excl. euronext)
59.1%
Source: European Fund and Asset Management Association
8
Unique access to European asset managersUnique access to European asset managers
Source: European Fund and Asset Management Association
France
NetherlandsBelgium
Portugal
Luxembourg
Sweden
UK
Germany
Spain
Switzerland
Austria
Ireland
Italy
Other0.0%
5.0%
10.0%
15.0%
20.0%
25.0%
The European Investment Fund Market
• Fragmented market – cross-border access is key
• Euronext – gives London access and broad Eurozone entry
EURONEXT
- Listing requirements -
10
Listing requirements – overviewListing requirements – overview
Market Description Listings and on-going requirements
EurolistRegulated market for large, mid & small caps
* Minimum 25% shares distributed to the public * Three-year track record required * Recognised accounting standards or IFRS
Ongoing obligations* Audited annual report and half-year report* Timely disclosure
* Two-year track record * Recognised accounting standards
* On-going obligation less demanding
* Public offering or Private placement
Alternext
Exchange regulated market for mid & small companies
11
Eurolist - the Main BoardEurolist - the Main Board
• One single 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
12
Eurolist - Flexible services for int’l companiesEurolist - Flexible services for int’l companies Language
English – or local Euronext language, at issuer’s wish
Listing instruments Shares Depositary Receipts (EDR, GDR, ADR) Corporate bonds Derivative instruments, including Convertibles, Options, Warrants and Futures
Currency Euro - the world’s second most important currency Or any other major currency
Accounting standards IFRS – or any standard accepted by the regulator
Regulatory environment Sound regulatory framework – provides credibility No Sarbanes Oxley regulation! Tailor-made for cross-border business (European Prospectus Directive)
13
Alternext – the Junior MarketAlternext – the Junior Market
• Euronext launched Alternext on 17 May 2005
• Alternext is an exchange-regulated market
• Designed for small and mid-cap companies
• Easy, cost-effective access to the capital markets
• Compliance with investor disclosure rules
• Open for companies from all sectors
14
Alternext - addressing a clear needAlternext - addressing a clear need
• Small and mid caps play an active and important role in the euro-zone:
• > 1 million small and mid-sized firms*….. • …..nearly 30% of which are located in the Euronext countries• 32 million employees - 38% of total value added
• A tougher European regulatory environment restricts access for small and mid-caps, but Alternext provides an effective alternative.
(*) fewer than 250 employees and sales below €50 million
Less than 1% of small and mid-sizedLess than 1% of small and mid-sizedcompanies are listed at present!companies are listed at present!
15
Alternext to dateAlternext to date
• Current market cap: € 657m
• Mkt cap (at issue price): € 593m
• Mkt perf. since launch: + 11%
• No. listed companies: 16
• Average size: € 37 m
• Average deal size: € 7.2 m
• No. Listing Sponsors: 2818 Nov. 05
16
Alternext: Easy access for listing applicantsAlternext: Easy access for listing applicants
• The decision to go public must be made by the company's managing body
• Listing requirements are simple
Applicants need only:• appoint a listing sponsor• submit the last two years' financial statements
(IFRS not mandatory…..but recognised accounting standards offer investor comfort)
• Two procedures can be used:
• listing with a public offer
• direct listing without public offer
17
Option 1: Listing with public offerOption 1: Listing with public offer
• A “traditional” listing procedure tailored to SMEs:
• Minimum free float: €2.5 million
• The prospectus approved by the regulator
• EU Prospectus Directive facilitates cross- border offerings
• Public offering allows for broad marketing campaign
• Builds better market liquidity
18
Option 2: Direct listing without public offerOption 2: Direct listing without public offer
• An innovative listing process – with less stringent requirements
• Companies must have made a private placement with qualified investors:• within two years prior of the listing application• placing at least €5 million • five or more qualified investors
• Companies must publish an offering circular, which is not reviewed by the regulator, but under the responsibility of the Listing Sponsor and the Issuer
• Easy access…but it does not create real liquidity
19
The role of the Listing sponsors The role of the Listing sponsors
• Mandatory assistance by a Euronext-recognised and approved
intermediary
• The listing sponsor plays two main roles as the company's long-
term partner:
• helps and advises the applicant to prepare for an Alternext listing including preparing the prospectus or information memorandum
• supports and guides the issuer throughout its life as a listed company, reminding it of disclosure requirements (initially for at least a 2 year period)
• The listing sponsor makes a contractual commitment to Euronext
to ensure that listed companies meet their disclosure
requirements.
EURONEXT
- Case Studies -
21
Eurolist case study: TOM TOM N.V. Eurolist case study: TOM TOM N.V.
Activity:
TomTom is a leading provider of personal navigation products and services to the consumer mass market.
TomTom products include integrated devices, which enable to navigate right out of the box (e.g. screen in car) and non-integrated solutions for navigation on third-party devices like PDAs and smartphones.
Key figures (2004):
Revenues: € 192.4 mn
Net profit: € 27.7 mn
Deal size (June 05):
Valuation: € 1,857 mn
PE ratio: x67
Funds raised: € 467 mn (of which capital increase of € 124 mn)
Goldman Sachs International and Lehman Brothers acted as joint leads.
22
Eurolist case study:Eurolist case study: TOM TOM N.V. TOM TOM N.V.
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
1
23
Eurolist case study: TOM TOM N.V. Eurolist case study: TOM TOM N.V.
• Share price performance 6 months: + 68%
• Free float: 29%
• Trading activity (daily average): € 18.7 million
• Index inclusion: EURONEXT150
24
Alternext case study: SATIMO Alternext case study: SATIMO
Activity:
• Satimo specializes in designing, manufacturing, and marketing multi-sensor electronic scanning systems for real-time viewing of electromagnetic wave fields.
• Sales by segment: radio communications (77.9%), automotive (9.5%),
• Global sales: France (16.3%), Europe (24.6%), Asia (35.9%), and US (23.2%).
Key figures (2004):
Revenues: € 8.9m
Net profit: € 1.2m
Profit growth rate: 100%
Deal Size (28 June 05):
Valuation: € 44m
PE ratio: x37
Funds raised: € 12.9m
5.8 times over-subscription
Broad take up among institutional investors, incl. 30% placed in the UK
Listing Sponsor: Avenir Finance Corporate
Placing agent: Ixis Midcaps
25
Alternext case study: SATIMOAlternext case study: SATIMO
Market Cap. Evolution
55
44
0
10
20
30
40
50
60
June 05 Nov. 05
In m
illio
n Eu
ros
• Current valuation of € 55m
• Value increased by 25% in 6 months
• Issue price: € 17.77
• Current share price: € 22
• Free float: 29%
Market figures
Philippe Garreau, Chairman & CEO of Satimo, commented: “We are delighted with the success of the IPO. Through the IPO we have acquired a strong notoriety to further expand our business.”
+ 25%
EURONEXT
- Why chose Euronext -
27
Why join the Euronext markets?Why join the Euronext markets?
Gateway to the €urozone
• Publicity: 453 million consumers• Huge pool of assets under management• Euro – key currency
Leading European exchange with a pan-European reach
• Top-ranked in raising fresh capital
Excellent market liquidity
• Largest central order book trading in Europe
An exchange without borders
• Truly cross-border• International companies can join local indices
A recognised marketplace
• Sound regulatory framework• Enhancing company’s profile to international standards
28
Need more information?Need more information?Please contact us:Please contact us:
• Ms. Martine CHARBONNIER
Executive Director – Listing & Issuer Relations
Phone: +33.1.49.27.16.08
Email: [email protected]
• Mr. Erik WENNGREN
Director - International Listings
Phone: +44.20.7379.2087
Email: [email protected]
• Mr. Nathanaël MAUCLAIR
Deputy Director - International Listings
Phone: +33 1.49.27.53.72
Email: [email protected]
www.euronext.com/listing
29
www.euronext.com
Back-up Slides
31
Appropriate disclosure requirements and lower Appropriate disclosure requirements and lower communication costscommunication costs
Financial transparency requirements
• tailored to small and mid caps
• choice of disclosure channel
• no quarterly turnover disclosure required
• address investors' needs for information
The applicant commits to:• make periodic disclosures: half-yearly accounts and
audited annual accounts • make ongoing disclosure of price sensitive information• report directors' trades• publish change of ownership at specific threshold (50% and
95%) since it may affect company strategy
32
Hybrid trading model – enhanced liquidityHybrid trading model – enhanced liquidity
A model to take into account specific liquidity profiles:
• The aim is to enhance liquidity in stocks with a smaller free float
• The market model combines central order book (one auction at end of day) and continuous market making to favour liquidity
• Market makers will select stocks and compete to offer best price
• Continuous trading by market makers
• For stocks without market makers, the auction ensures a daily reference price
• Investors can choose how their orders are to be executed
The trading session is organised to favour the most efficient price execution