4Q11Earnings

February15,2012

4Q11Highlights
Focusoncostcontrolandreturntoshareholders

NetRevenues:R$471MM(4Q10:R$473MM)
(down0.4%)

Adj Expenses1:R$164MM(4Q10:R$159MM)
(up3.1%)

FINANCIALANDOPERATIONALHIGHLIGHTS
BM&FSeg:secondsequentialalltimehighrecord withaADTVof2.7million
contractsin2011
t t i 2011
Adjusted OpEx and CapEx within the budget; 2012 operating expenses budget
range is the same of 2011 (from R$580 to 590MM)
Revenues diversification (4Q11 vs.
vs 4Q10):

Adj EPS.:R$0.183(4Q10:R$0.185)
(down1.0%)

Growth of ETFs ADTV (+107.1%), assets under custody of Tesouro Direto

(+61.1%) and in the open interest of Securities Lending (+56%)

Adj NetIncome
Net Income2:R$353MM(4Q10:R$368MM)
: R$353MM (4Q10: R$368MM)

Increase of stock index contracts ADTV (+79.8%) and minisized contracts

ADTV (+69.0%)
(+69 0%)

(down4.2%)

Adj EBITDA.3:R$307MM(4Q10:R$315MM)
(down2.5%)

Extraordinary expenses: a onetime transfer of funds (R$92.3 million) to

strengthen BM&FBovespa Market Surveillance (BSM)
Shareholder return (p
(payout
y
+ buybacks):
y
) R$1.5 bn in 2011 ((~R$0.79 p
per share),
),
including payout distribution of R$226.7 million related to 4Q11 earnings
STRATEGIC PROJECTS

Adj EBITDAMargin.:65.2%(4Q10:66.5%)

PUMA Trading System: equities module development to be concluded in 4Q12

Clearing Integration: technological development to be implemented in 4Q12
OTC Platform: first module to be operational in 2H12

Excludes stock options plan, depreciation, provisions, tax on dividends from CME Group and the guarantee fund transferred to BSM. 2 Excludes deferred liability recognized
in correlation with temporary differences from amortization of goodwill for tax purposes, the impact of the stock options plan, the investment in associate (CME Group)
accounted for under the equity method of accounting, net of taxes related to dividends, taxes paid overseas to be compensated, the guarantee fund transferred to BSM
and taxes paid overseas to be compensated . 3 Excludes stock option plans costs and the guarantee fund transferred to BSM.
2

BOVESPASegmentPerformance
IncreasedHFTactivityandgrowthofturnovervelocity
ADTVevolutionbytypeofinvestorsandMargin

Marketvolatilitypositivelyimpacted
turnover
turnover
Volumedecreased,mainlybecauseof
marketcapitalizationandretailinvestors
slowdowninADTV
Decreaseinmarginimpactedbyvolume
db
l
growthinHFT

10,0
9,0
8,0
7,0
6,0
5,0
4,0
3,0
20
2,0
1,0
0,0

6.0

6.1

(
(inR$billions)

4Q11vs.4Q10Volumes

68
6.8

67
6.7

0.8

0.7

2.3

2.3

2.2

5.7

5.9

66
6.6

6.2

64
6.4

0.7

0.7

2.1

2.3

2.4

2.3

2.1

2.2

2.1

1.5

1.5

1.3

1.5

1.3

4Q10

1Q11

2Q11

3Q11

4Q11

Individuals

HFT:ADTVandshareoftradingvolume

Institutional Investors

ForeignInvestors

7
6
6
5
5
5
4
4
3
3
3
2
2
1
1
1
0
0
(
(
(

5.6
0.7

Others

Margininbps

AveragemarketcapitalizationandTurnoverVelocity

+146%

6.1%

7.4%
898.6

10.3%

10.3%
1,329.1

1,311.9

140,0%

9.8%

814 5
814.5

532.9

318.6

447.3

160.0
181.5
191 4
191.4

205.0

184.1

174.6

290.8

267.2
267.2

319.3

146.0
249.2
249.2

NovDec/10

1Q11

2Q11

3Q11

4Q11

835 1
835.1

3,0
2,5
100,0%
2,0
80,0%
1,5
60,0%
1,0
40,0%
0,5
20,0%

0,0%

61.8%

61.8%

59.5%

69.3%

66.6%

916.7

localinstitutions daytrading(BRLmillions)
%ofoverallmarket

72,
52,

120,0%

4.3%

retail daytrading(BRLmillions)
fgninv daytrading(BRLmillions)

160,0%
3,5

32,
2.5

2.5

2.5

2.2

2.2

2Q11

3Q11

4Q11

12,
8,

4Q10

1Q11

AverageMarketCapitalization(BRLtrillions)

TurnoverVelocity

BM&FSegmentPerformance
Highgrowthofstockindexandminisizedcontracts
ADTVin(thds ofcontracts)andRPC(inR$)

4Q11vs.4Q10Volumes

1,20

1.11

1.10

1,10

Volumeofminisizedandstockindicescontracts
1,00
soared69%and80%,respectively
0,90
GreaterHFTsvolumes(up34%)
6.1%ADTVdecreaseimpactedby16.4%reduction 0,80
0,70
in ADTV of interest rates in BRL
inADTVofinterestratesinBRL
HigherRPCexplainedbyhigherparticipationof 0,60
0,50
longertermcontracts

1.04
2.866

2.616

2.805

2.670

317
422

293
491

1.16

1.13

407
543

469
525

2.456

434
489
489

1,833

2,127

1,720

1,810

1,532

4Q10

1Q11

2Q11

3Q11

4Q11

FXRates

StockIndices

RPC

0,40

InterestRatesinBRL

HFT:ADTV(thds ofcontracts)andshareofADTV(%)

ADTV:Minisizedandstockindex(inthds ofcontracts)

+34%
7.8%
419.5

24.4
5 0%
5.0%
250.9
42.5
93.4

5.0%
3.9%

251.0

211.2

9.8
94.8

17.1
83.6

178.7

7.2%

450,0

335.2

400,0

24.8
139.6

350 0
350,0
300,0
250,0

156 143

200,0

148.3
101.1

150,0

119.9

77 3
77.3

67 0
67.0

37.7

43.5

45.3

68.2

50.9

4Q10

1Q11

2Q11

3Q11

4Q11

100,0

78

89

77

88

FX

Minicontracts

InterestRates

101

50,0

4Q10

1Q11
MiniContracts

Equities

91

160
132

%inOverallVolume

2Q11

3Q11

4Q11

StockIndices

4Q11revenuesbreakdown
Diversificationofrevenuesisclearafterrevenuesrebalancing
4Q11revenues:BRL522million

RevenuesDiversification

Highdiversificationbetweentradingandpost
trading

8%
23%

DiversificationinsideBM&FandBovespa
Segmentsproductsandmarkets
d
d
k
27%

6%
11%
5%
17%

StocksandDerivativesTradingandPost
tradingarethemainrevenueslines,butthere
is consistent growth in other lines
isconsistentgrowthinotherlines

2%

1%

CashMarketTrading
Cash Market PostTrading
CashMarket
Post Trading
EquitiesDerivatives Trading
EquitiesDerivatives PostTrading
OtherRevenues BOVESPASeg.
Interest Rates in BRL Derivatives
InterestRatesinBRLDerivatives
FxDerivatives
OtherFinancialandCommoditiesDerivatives
OthersRevenues

TradingandPosttradingrebalancing

4Q11showstherevenuesbreakdownafterthe
g( p
p
feesrebalancing(implementedintheBovespa
segmenton08.26.2011)
Thischangereflectsbetterthecoststructureof
theCompanyandeliminatessomecross
subsidies
b idi

RevenuesandExpensesDetails
Growthofotherrevenuesandfocusoncostscontrols
ExpensesBreakdown 4Q11

Revenues Breakdown 4Q11

Other
revenues

23%

TransfertoBSM

Personnel

29%

32%

Bovespa
Trad./Sttmnt

43%
11%

11%

34%

3% 6%

Others

BM&FTrd./
S
Sttmnt

8%

DataProcessing

Marketing
Depr./Am.
ThirdPartyServ.

R$millions
GrossOperatingRevenues
Seg.BOVESPA (trd.andsttmnt.)
Fees fromtradingandsttmnt.
Others(includingpublicofferingsttmnt.)
Seg BM&F (trd and sttmnt.)
Seg.BM&F(trd.and
sttmnt )
Otheroperatingrevenues:
Depository andcustody
SecuritiesLending
Market datasales
Listings
Other
1

4Q11
522.0
223.8
218.7
5.0
177 2
177.2
121.1
23.5
21.6
16.3
10.7
49.0

4Q10

Var.%
4Q11x4Q10

526.4
258.7
253.2
5.5
180 9
180.9
86.8
23.7
13.9
15.8
11.2
22.3

0.8%
13.5%
13.6%
8.1%
2 1%
2.1%
39.5%
0.8%
55.7%
3.0%
4.2%
120.1%

AdjustedExpenses1
(InR$millions)

145.8

3Q10

+3.1%

159.0

140.6

143.7

4Q10

1Q11

2Q11

Excludesstockoptionsplan,depreciation,provisions,taxondividendsfromCMEGroupandtheguaranteefundtransferredtoBSM

163.9
136.3

3Q11

4Q11

Personnelexpenses:
Focusonexpensescontrolsandprocessesimprovements
AdjustedExpenses
(inR$millions)

590

0%

580

2011vs.2010:7.5%growth
Smallrealgrowthbetween2010x2011andfallfor2012
584 5
584.5

543.9

580 0
580.0

2011expenses:R$584.5million,withinbudget
2011
R$584 5 illi
i hi b d
Sameintervalfor2012:
R$580590million

2010

2011

2012e

Adjustedpersonnelexpenses
(in R$ millions)
(inR$millions)

7.8%

4Q11vs 4Q10:7.8%lower
Annualbargainofaround7%
80.9
72.9

4Q10

1Q11

78.0

2Q11

72.4

74.6

3Q11

4Q11

Reductionisduetoadditionalbonusesforemployees
in2010

Expenses
Extraordinaryexpensesin4Q11
ThirdPartyServices

DataProcessing

(inR$millions)

(inR$millions)

19.0
16.0
12 3
12.3

3Q10

27.4

28.4

3Q10

4Q10

11.7

4Q10

3Q11

4Q11

32.5
25.3
25.3

3Q11

4Q11

Oneoffexpensesimpactingthirdpartyservicesanddataprocessinglines
Consultingfirmstosomeprojects,includingthePQO OperationalQualificationProgramforBrokers
Dataprocessingexpensesrelatedtoasecurityinformationprojectandsomeevolutive
Data processing expenses related to a security information project and some evolutive maintenanceofsystems
maintenance of systems

Others
AmountedtoR$19.1million,147.1%higherthan4Q10
d
$
ll
h h h
Mainlyrelatedwithprojectswriteoffs

BSM extraordinarytransfer:R$92.3million
SegregatedcashandrestrictedtoMRP,managedbyBSM
Segregated cash and restricted to MRP managed by BSM
Strengtheningandincreasingtheindependencyofself
regulation BSM
BVMFimpacts:lostoffinancialrevenuesfrom
managementthiscash
hi
h

FinancialHighlights
Commitmenttoshareholderreturns
FinancialIncome

CashandFinancialInvestments(inR$millions)
1,551

4Q11

380 270

1,582

3,783

FinancialIncomeofR$86.3million5.4%down,mainly
duetoareductiononaverageinterestrates

GuaranteeFundTransferred
1,270

3Q11

468

284

R$64.1millionin4Q11,reductionof11.3%over4Q10

3,508

1,487

Market participants cash collateral and others*

Restricted f unds

Subsidiaries**

Available f unds

FinancialExpensesofR$22.2millionincreased17.5%
because of the FX devaluation
becauseoftheFXdevaluation

ShareholderReturn(PayoutsandBuybackProgram)

Investments(CAPEX)2011:R$204MM
(inR$millions)

(inR$millions)
260.0
30 0
30.0

260.0
230.0

R$0.80pershare
1,579

1,518

434
268.4
204 0
204.0

606

230.0

1,144

2010

2011

p
R$0.79pershare

2012e

CapEx totaledR$88.5millionin4Q11
88.9%ofthisinvestmentwasdestinated toITprojects

912

2010

2011

Dividends

Buybacks

*Includescollateralspledgedbyparticipantsintheformofcash,receivablesandrightsinsecuritiesundercustody,aswellaspayoutsstillundisbursed
**Includesthirdpartycollaterals(R$119millioninthe3Q11andR$118millioninthe4Q11)andrestrictedfunds(R$12million inthe4Q10andR$12millioninthe4Q11)atBanco BM&F

Equitymethodaccounting
InmillionsofR$
TaxBook

2011

Fiscalresultsbeforeearningsfromoverseas

(a)

53.1

Earnings beforetaxesfromoverseas1

(b)

185.2

Taxableearnings(a+b)

(c)

132.1

Taxes(34%ofc)
Taxeswithheld abroadattherateof 34%2 (d)

44.9
(d)

Differenceforfuture compensation (dc)

62.9
18.0

Equityaccounting =R$219.4millionR$156.5 million+R$62.9 million

~5.1% ofCMEGroupNetIncome

TheR$62.9millionfullyimpactedtheequityaccountinglinein4Q11
Adjustedtothiseffects,theequityaccountwouldhaveamountedtoR$68.5millioninthequarter,steadof
R$131 5 illi
R$131.5million,whiletheincometaxandsocialcontribution(current+deferred)wouldbeR$62.9millionlower
hil th i
t
d
i l
t ib ti (
t+d f
d)
ld b R$62 9 illi l
1
2

Equityaccountingfrom5.1%shareontheearningsbeforetaxesofCMEGroup
Taxespaidabroadtocompensate:cappedby34%oftheEarningsbeforetaxesofCMEGroupadjustedto5.1%BVMFsparticipation

10

2011Highlights
Seculargrowthofbusinessandresults
AdjustedEPS
(inR$)

0 37
0.37

0 45
0.45

2007

2008

0.61

2009

0.80

0.79

2010

2011

FinancialResults
(inR$millions)

1,899 1,905
1,602
1,376

1,511

1,586 1,546

1,355 1,319

,
1,224

1,089 1,035
866

NetRevenues
2007(proforma)

756

AdjustedEBITDA
2008(proforma)

909

AdjustedNetIncome
2009

2010

2011

11

RecordsofAverageDailyVolumes
Historicrecordofvolumeskeepinglongtermgrowth
AverageDailyVolumeBOVESPASeg.
(inR$billions)

64,7

1.2

1.6

2.4

2004

2005

2006

49
4.9

55
5.5

53
5.3

2007

2008

2009

8.5

6.5

6.5

6.2

2010

2011

Jan/12

Feb/12*

2.5

2.7

2.6

2.5

2010

2011

Jan/12

Feb/12*

AverageDailyVolumeBM&FSeg.
(inmillionsofcontracts)

0.8
0.8

0.8
0.8

2004

2005

1.7

1.6

1.5

2007

2008

2009

1.2
2006

12

ConsistentGrowth
Historicrecordofvolumeskeepinglongtermgrowthtrend
TesouroDireto

ETFs ExchangeTraded Funds

ADTV

AverageNumberofInvestorsRetailInvestors

(inR$millions)

(inR$millions)

77.1
77.1

64 4
64.4

64.4

48.7
18.6
2009

28.5
2010

2011

Jan/12

AssetsunderManagement
(inR$millions)

23.8

27.5

2007

2008

2009

42.3

2010

2011

Jan/12

7.5

7.6

2011

Jan/12

AssetsunderCustody

(inR$billions)

1,032

1,140

4.7

579
579

1.4

271

2009

36.3

2010

2011

Jan/12

2007

2.5
2008

3.3
3.3

2009

2010

13

ConsistentGrowth
Historicrecordofvolumeskeepinglongtermgrowthtrend
AverageOpeninterest StockIndexFuturesContracts

OptionswithMarketMaker:OGXP3andITUB4 ADTV

(inthousandsofcontracts)

(inR$millions)

106.1%

857
31.7
528
15.4

287

290

269

256

2007

2008

2009

2010

2011

jan/12

JanAug
Jan
Aug2011
2011

Average (Sept Jan

Average(Sept
Jan12)
12)

SecuritiesLending:openinterest(averageyear)
(inR$billions)

30.2
18.5
0.8

1.0

1.6

3.8

6.6

2002

2003

2004

2005

2006

2007

16.9

2008

33.3

20.5
12.7

2009

2010

2011

jan/12

14

RevenuesDiversification

4Q11Revenues
S
Securitieslending(BTC):
i i l di (BTC) ~R$21.6million
$
Stock Indices Fut : ~R$15
StockIndicesFut.:
R$15.0million
0 million derivatives
derivatives
~R$$7.6million cash*

Tesouro Direto: ~R$4.5million

Optionsonmarketmaker: ~R$2.0million
ExchangeTradedFunds(ETFs): ~R$2.9million

~R$53million(10.3%oftotalrevenue)
10.3%oftotalrevenue)
*Considersjustonematurityintheperiod

15

DeliveringStrategicPrioritiesandrevenuesdiversification

Consistentlyincreasing
and diversifying of
anddiversifyingof
revenuesandnetincome

Strengthening
competitiveposition

WellplacedtocaptureBrazilianeconomicpotentials
Productsdevelopmentoffersconditionsforleveraginggrowthand
havehighindirectbenefits
FavoredfromincreaseinsophisticationofBrazilianmarket

PUMATradingSystem:derivativesmoduleimplemented
Increasingcapitalefficiencybyintegratingclearingfacilities
NewOTCplatform:consistentwithdiversificationstrategyand
captureofgrowthopportunities
Strengtheningsurveillanceandmarketregulation(BSM)

Investinginproductsand
i i
d
d
partnerships

Productsdevelopmentismaterializinginrevenuesandbroadening
market sophistication
marketsophistication
Strengtheningtieswithinvestorsandparticipants
NewProducts:marketmakerforoptions,ETFs,HFTs,crosslisting
andTesouro Direto

Consistentlydelivering
soundfinancialresults
d fi
i l
l

FocusonOpEx Control 2011Opex Budgetreviseddownand

maintenancefor2012(reductioninrealtermsfor2012adjusted
OpEx)
Maximizingshareholdersreturn:highpayout
16

APPENDIX

17

IncomeStatementSummary
R$millions

4Q11

4Q10

Change
4Q11/4Q10

3Q11

Change
4Q11/2Q11

GrossRevenues

522.0

526.4

0.8%

547.1

4.6%

NetRevenues

471.2

473.3

0.4%

493.7

4.6%

(291.6)

(188.7)

1.2%

(169.6)

72.0%

OperatingIncome

179.6

284.6

36.9%

324.1

44.6%

Equityaccounting

131.5

15.1

771.3%

28.3

364.7%

FinancialIncome

64.1

72.3

10.3%

70.8

16.7%

Income before Taxes

IncomebeforeTaxes

372 2
372.2

419 9
419.9

3 6%
3.6%

82 7
82.7

22.5
22 5

NetIncome*

191.1

261.5

26.9%

292.0

34.4%

EBITDA

204.4

305.5

33.1

347.5

41.2%

EBITDA Margin
EBITDAMargin

43 4%
43.4%

64 5%
64.5%

2,118bps
2 118 bps

70 4%
70.4%

2,701bps
2 701 bps

AdjustedNetIncome

352.7

370.0

4.2%

339.6

11.7%

0.182885

0.184677

1.0%

0.205459

11.0%

307.1

314.9

2.5

356.0

13.7

65.2%

66.5%

136bps

72.1%

693bps

(163.9)

(159.0)

3.1%

(136.3)

20.3%

Expenses

Adjustedearningspershare(inR$)
AdjustedEBITDA
d
d
AdjustedEBITDAMargin
Adjusted Expenses
*AttributabletoBM&FBOVESPAsShareholders

18

Balance Sheet
InR$millions
ASSETS
Currentassets

Cashandcashequivalents
Financialinvestments
Others
Noncurrentassets

2011

2010

2,401.1
64.6
2,128.7
207.8
21,188.8

LIABILITIES ANDSH.EQUITY

2,547.6 Currentliabilities
104.0 Collateralfortransactions
2,264.4 Others
179.2 Noncurrentliabilities
20,086.4 Financing

L
Longterm
t
receivables
i bl

1 767 4
1,767.4

1 216 8 DeferredInc.TaxandSocialContrib.
1,216.8
D f
dI T
dS i lC
ib

Financialinvestments

1,589.0

1,066.9 Others

Others
Investments
Propertyandequipment

178.3
2,710.1
357.2

TOTALASSETS

16,354.1

23,590.0

2010

1,930.0

1,416.2

1,501.0

954.6

429.0

461.6

2,402.5

1,798.7

1,138.6

1,010.1

1 204 6
1,204.6

732 1
732.1

59.2

56.6

19,257.5

19,419.0

2,540.2

2,540.2

16,033.9

16,662.5

666.7

200.0

16 5
16.5

16 3
16.3

23,590.0

22,634.0

149.9
2,286.5 Shareholders'equity
367.1 Capital
Capital reserve

Intangible assets

2011

16,215.9 Others
Minorityinterestinsubsidiaries
TOTALLIAB.ANDSHAREHOLDERS'
22,634.0
EQUITY

19

ReconciliationofGAAPtoAdjustedNetIncome
4Q11GAAPandadjustednetincomereconciliation

4Q11

4Q10

Change
4Q11/4Q10

3Q11

Change
4Q11/2Q11

Gaap netincome*
net income*

191 066
191,066

261 466
261,466

26.9%
26 9%

292 006
292,006

34.6%
34 6%

(+)Stockoptionsprogram

10,419

9,421

10.6%

8,541

22.0%

(+)Deferred taxliabilities

124,706

110,214

13.1%

124,706

0,0%

() Profitfrominvestmentinassociate(equity
methodinvestmentnetoftaxondividends)

128,853

13,123

881.9%

25,659

402,2%

(+)Taxespaidoverseastobecompensated

62,987

(+)ContributiontoMRP

92,342

Adjustednetincome

352,667

367,978

4.2%

399,594

11.7%

R$millions

*AttributabletoBM&FBOVESPAshareholders

20

ReconciliationofAdjustedOperatingExpenses

4Q11

4Q10

Change
4Q11/4Q10

3Q11

Change
4Q11/2Q11

291 630
291,630

188 664
188,664

54 6%
54.6%

169 558
169,558

72 0%
72,0%

()Stockoptionsprograms

10,416

9,421

10.6%

8,541

22.0%

()Depreciation

22,127

18,925

16.9%

20,686

7.0%

180

(688)

126,2%

1,408

87,2%

()TaxondividendsfromCME

2,675

1,972

35.7%

2,642

1.3%

(())ContributiontoMRP
Contribution to MRP

92 342
92,342

163,887

159,035

3.1%

136,281

20.3%

R$millions

Total Expenses
TotalExpenses

()Provisions

AdjustedExpenses

21