3Q16 earnings presentation

November 14, 2016

1
Public
Public

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 BM&FBOVESPA operates in; (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.

3Q16 vs. 3Q15 highlights

Bottom line impacted by extraordinary and mainly non-cash items
Operating highlights
3Q16 (vs. 3Q15)

Financial highlights
3Q16 (vs. 3Q15)

BM&F Segment:

Total revenue: R$621.3 mn, -6.3%,

ADV: 2.9 mn contracts, -11.7%

BM&F Seg.: R$240.6 mn, -21.6%

RPC: R$1.247, -12.9%

Bovespa Seg.: R$241.8 mn, +9.0%

Other revenues: R$138.9 mn, +3.5%

Bovespa Segment:
ADTV: R$6.93 bn, +5.9%

Adj. expenses1: R$155.5 mn, -5.0%

Strategic updates
Proposed business combination
with Cetip
Pending regulatory approval: CVM,
Central Bank and CADE (filed with
CADE on June 28, 2016)
Efforts on planning the integration

Margin: 5.268 bps, 0.02 bps

Operat. income: R$113.0mn, -70.3%

Others growth products:

Excluding extraordinary items that

impacted 3Q16, operating income
would have reached R$351.5 mn

Equities phase of BM&FBOVESPA

Clearinghouse
Integrated test and certification with
market participants were concluded

IFRS net income: R$293.5 mn

Beginning of the parallel production

phase in Jul16

Tesouro Direto: 86.4% increase in

average assets under custody
ETFs: 20.1% increase in ADTV

Excluding extraordinary items that

impacted 3Q16, net income would
have reached R$453.2 mn

Deployment planned for 1Q173

Payout: R$146.7 mn (R$0.082 per

share); equivalent to 50% of the 3Q16
net income

1 Adjusted

to (i) depreciation and amortization; (ii) stock grant plan costs principal and payroll taxes and stock option plan; (iii) transaction cost and planning of the proposed business combination with Cetip
that is still pending regulatory approval; and (iv) transfer of fines, provisions and incentive programs to market participants. Attributable to BM&FBOVESPAs shareholders. 3 Depending on test results and
regulatory approval.

3Q16 revenue breakdown

Revenue hurt by BM&F segment weak performance
REVENUE (in R$ millions / % growth YoY)
USD-linked revenue represented
22.3% of the total revenue

Total
revenue
R$621.3 mn

The revenue breakdown considers the revenue lines others of the Bovespa Segment and foreign exchange and securities of BM&F Segment, as reported in the financial
statements note 20, within the other revenues not tied to volumes. Trading and post-trading.

Derivatives market
Revenue impacted by lower ADV and RPC
REVENUE (in R$ millions)

ADV (in thousands of contracts)

CONTRACTS

3Q15

3Q16

YoY

1,791

1,206

-32.7%

FX rates

473

386

-18.3%

Stock indices

101

79

-22.2%

Interest rates in USD

321

229

-28.7%

-2.2%

597

997

66.9%

3,293

2,906

-11.7%

Interest rates in BRL

Commodities
Mini contracts
TOTAL

MINI CONTRACTS (in thousands of contracts)

REVENUE PER CONTRACT (RPC)

RPC: R$1.247 per contract, -12.9% YoY
Mix effect:
Lower participation of Interest rates in BRL
contracts

Higher participation of Mini contracts (RPC is

significantly lower than average)

Appreciation of the BRL against USD (in 3Q16:

51.9% of derivatives revenue were linked to
USD)

% tot.
BM&F
rev.

Revenue does not consider the revenue lines foreign exchange and securities of the BM&F Segment, as reported in the financial statements note 20, which totaled R$4.6
million in 3Q16. Most of the fees charged on FX rate, Interest rates in USD and Commodities contracts are referred in USD. The average BRL/USD exchange rate appreciated 4.7%
from 3Q15 to 3Q16.

Equities market
Higher volumes contributed to the revenue increase
REVENUE (in R$ millions)

ADTV (in R$ millions) AND MARGIN (in bps)

3Q15
ADTV
Margin

3Q16 HIGHLIGHTS

6.545,1
5,246

3Q16
6.930,9

YoY
5,9%

5,268 0.02 bps

MARKET CAPITALIZATION (in R$ trillions) AND

TURNOVER VELOCITY (%)

ADTV growth was driven by the increase in

the market capitalization, mostly
concentrated in the end of the quarter
Trading and post-trading margins:
5.268bps, stable

Revenue does not consider the revenue line others of Bovespa Segment, as reported in the financial statements note 20, which totaled R$4.5 million in the 3Q16. Excludes
fixed income line.

Business lines not tied to volumes

Growth in revenue not tied to volumes
3Q16 REVENUE BREAKDOWN (in R$ millions / %)

Other lines of business

22.4%

Revenue as reported in the financial statements note 20.

3Q16

YoY

Depository

47.4

31.1%

Securities lending

30.2

6.8%

Market data (vendors)

24.6

-19.2%

Listing

13.1

-0.7%

Bank - financial intermediation and bank fees

9.9

-1.3%

Market participant access

8.7

-12.6%

Other

5.1

-18.9%

Total

138.9

3.5%

3Q16 expenses
Continued focus on expense management
ADJUSTED EXPENSES (in R$ millions)
3Q16 adjusted expenses decreased 5.0% YoY

Adjusted
personnel
(-3.3%): annual
wage
adjustment of
~9% offset
mainly by
higher
capitalization

Data
processing
(+21.3%):
inflation/FX
rate
adjustments to
IT maintenance
contracts

Third party
(+14.2%):
higher
expenses with
consultancy
services

Marketing
(-64.1%): in
3Q15,
expenses
connected to
the
organization of
the Financial
Markets
Conference

Others
(-21.0%): in
3Q15, nonrecurring writeoff of R$6.4 mn

(in R$ millions and % of total adjusted expenses)

3Q16

84.1 (54%)

36.9 (24%)

14.4 (9%)

1.7 (1%)

18.4 (12%)

3Q15

87.0 (53%)

30.4 (19%)

12.6 (8%)

4.7 (3%)

28.9 (18%)

Adjusted to (i) depreciation and amortization; (ii) stock grant plan costs principal and payroll taxes and stock option plan; (iii) transaction costs and planning of the business combination with Cetip that is
still pending regulatory approval; and (iv) transfer of fines, provisions and incentive programs to market participants. Excluding the impact of stock grant/option expenses. Include expenses with
communication, maintenance, taxes, board and committee members compensation and other.

3Q16 extraordinary expenses

Extraordinary items that impacted the IFRS expenses
IFRS EXPENSES OF R$446.1 MILLION, +104.8% YoY, IMPACTED BY EXTRAORDINARY ITEMS

Line impacted in the

income statement

Before tax

After tax

Provision on judicial decision Spread Corretora

Expenses

183.9

121.4

Provisions on success fees to legal advisors

Expenses

47.4

33.6

Transaction with Cetip expenses;

Expenses

7.2

4.7

238.5

159.7

(in R$ millions)

Total

Pending regulatory approvals from CVM, Central Bank and Antitrust Authority CADE. Includes expenses with legal reports, auditors, appraisers, and lawyers, among other
professionals engaged as advisors for the transaction as well as the planning of the integration.

Financial highlights
Increase in financial revenue reflecting higher cash balance
FINANCIAL RESULT (in R$ millions)
FINANCIAL RESULT OF R$221.5 MILLION, +157.5% YoY

Other financial revenue

Higher cash balance

which includes R$5.5 bn
in proceeds from CME
Group shares sale

Other financial expense

2020 Notes payment of
semiannual coupon of
5.5% per year

2020 Notes hedging cost:

Principal: R$62.0mn
(79.1% of the CDI)
Coupon: R$0.8mn (hedge
set up in Sep16)

Includes gains from changes in the exchange rate as well as other financial revenue. Includes maintenance of stand-by facilities, available but not drawn, in connection with the transaction with Cetip.
Effective rate 6.47% per year, after withholding income tax.

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Financial highlights (cont.)

Higher cash position to fund proposed combination with Cetip
CASH AND FINANCIAL INVESTMENTS (in R$ millions)

3Q16
10,718

BM&FBOVESPAs cash position totaled R$8.5 bn in

3Q16
R$2.0 - R$2.5 bn to run the business

2Q16
10,463

R$1.0 bn in clearinghouses required safeguards

The remaining supports the activity of the central
counter-party and general corporate needs

1Q16
5,661

~R$6.0 bn to fund the proposed combination with

Cetip4

4Q15
5,202

Includes R$5.5 bn in gross proceeds from the total

divestment from CME Group shares

3Q15
8,164

Third-party cash
Third-party

Total

Restricted and unrestricted

Not considered as BM&FBOVESPAs cash

The Company earns interest on most of this cash
balance

Includes earnings and rights on securities in custody. Includes BM&FBOVESPA Bank clients deposits. Does not include investments in Bolsa Mexicana de Valores, Bolsa de Comercio de Santiago and
Bolsa de Valores de Colombia amounting R$203.1 million at 3Q16 and booked as financial investments. See note 4 to the financial statements. 4 Pending regulatory approvals from CVM, Central Bank and
Antitrust Authority CADE.

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Financial highlights (cont.)

Strong cash generation
CASH DESTINATION (in R$ millions)

CASH GENERATION (in R$ millions)

CASH GENERATION REACHED R$566.9
MILLION IN 3Q16, +37.1% YOY
3Q15

CASH RETENTION OF R$310.8 MILLION TO

FUND THE PROPOSED COMBINATION WITH
CETIP4

3Q16

Adjusted net cash from operating

activities

513.1

672.3

Net cash from investment activities

-37.7

-40.6

Net cash from financing activities

before distributions

-61.8

-64.8

Cash generation (before

distributions)

413.6

566.9

Net cash from operating activities was

positively impacted by higher financial
revenue

Cash generation before dividends/IoC payments and share buybacks. Considers the cash flow from operating activities, adjusted by the variation of financial investments and guarantees and cash
deposits and REPO transactions of the BM&FBOVESPA bank, as described in the note 13 to the financial statements. Considers the cash flow from financing activities before the payment of
dividends/IoC and share buyback. 4 Pending regulatory approvals from CVM, Central Bank and Antitrust Authority CADE.

12

Business combination with Cetip

Timeline: where we are and next phases of the process
2016

2017
April, 8th

BVMF and
Cetips
Boards
approved the
financial
terms for the
transaction

May, 20th

Oct, 13th

Jun, 28th

Nov, 14th

Feb, 23th

We are here
Request to analyze the
act of concentration
was filed in CADE

CADE deadline
(240-day)

CADE considered
complex the
concentration act of
the combination

BVMF and Cetips shareholders

approved the transaction in the
shareholders meetings

May, 24th
The final
deadline for
CADE approvals
(if extended)

This measure
allows CADE to
extend the
deadline for more
90 days

Review of the transaction by the regulators:

Central Bank of Brazil (BACEN)
Brazilian Securities Commission (CVM)
The Antitrust Authority (CADE)

Counted from the day of

the last regulatory
approval:
Cetip shares will be
converted in
BM&FBOVESPA
shares (BVMF3) in
T+5
The cash portion
will be settled in up
to 40 days

Efforts on planning the integration

Pending regulatory approvals from CVM, Central Bank and Antitrust Authority CADE. The Company has dedicated efforts to plan the business combination, respecting the ground rules set by the
antitrust authorities.

13

APPENDIX

14

Financial Statements
Summary of balance sheet (consolidated)
ASSETS (in R$ millions)

LIABILITIES AND SHAREHOLDERSEQUITY (in R$ millions)

09/30/2016 12/31/2015

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

9,067.6

8,673.8

546.8

440.8

8,210.9

7,798.5

310.0

434.4

18,085.0

17,635.1

09/30/2016 12/31/2015
Current liabilities

3,497.5

2,096.8

Collateral for transactions

1,605.6

1,338.0

Others

1,891.9

758.8

Non-current liabilities

5,038.3

5,859.9

Foreign debt issues

1,993.7

2,384.1

2,617.1

3,272.3

427.5

203.5

18,616.8

18,352.2

2,540.2

2,540.2

14,284.7

14,300.3

1,782.1

1,501.6

9.7

10.1

27,152.6

26,308.9

2,335.9

Deferred Inc. Tax and Social

1,961.4 Contrib.

2,162.8

1,815.6

Others

173.2

145.8

Investments

29.5

30.6

455.2

453.1

15,264.3

15,190.0

Goodwill

14,401.6

14,401.6 Minority shareholdings

Total Assets

27,152.6

26,308.9 Liabilities and Shareholders eq.

Long-term receivables
Financial investments

Property and equipment

Intangible assets

Others
Shareholders equity
Capital stock
Capital reserve
Others

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Financial Statements
Net income and adjusted expenses reconciliations
ADJUSTED NET INCOME RECONCILIATION (in R$ millions)
3Q16
IRFS net income*
Stock grant/option (recurring net of tax)
Deferred tax liabilities
Equity in Income of Investees (net of taxes)
Expenses related to Cetips transaction (net of tax)
Divestment in CME Group shares (net of tax)
IOF on proceeds from CME Group shares sale (net of tax)
IoC Adjustments
Discontinuity of the equity method (net of taxes)
Results from the selling of the CME Group (net of taxes)
Non-recurring expenses with provisions (net of tax)
Adjusted net income
*Attributable to BM&FBOVESPA shareholders.

293.5
13.9
135.3
0.0
4.7
0.0
0.0
0.0
0.0
0.0
155.0
602.4

3Q15
2,012.5
12.8
137.5
(37.6)
0.0
0.0
0.0
(49.0)
(1,145.0)
(474.2)
0.0
457.0

Change
3Q16/3Q15
-85.4%
8.6%
-1.6%
31.8%

2Q16
(114.4)
27.2
135.3
0.0
31.5
557.3
10.8
0.0
0.0
0.0
0.0
647.7

Change
3Q16/2Q16
-356.5%
-48.8%
0.0%
-85.0%
-7.0%

9M16
518.4
57.9
405.9
(19.6)
36.9
557.3
10.8
0.0
0.0
0.0
155.0
1,722.5

9M15
2,610.0
37.6
412.6
(106.8)
0.0
0.0
0.0
(49.0)
(1,145.0)
(474.2)
0.0
1,285.1

Change
9M16/9M15
-80.1%
53.9%
-1.6%
-81.7%
34.0%

ADJUSTED EXPENSES RECONCILIATION (in R$ millions)

3Q16
Total expenses
Depreciation
Stock grant/option
Proposed business combination with Cetip
Planning of the business integration with Cetip
Provisions and others
Adjusted expenses

446.1
(25.1)
(21.1)
(0.7)
(6.5)
(237.3)
155.5

3Q15
217.8
(26.1)
(19.4)
0.0
0.0
(8.7)
163.6

Change
3Q16/3Q15
104.8%
-3.8%
8.6%
2634.8%
-5.0%

2Q16
268.8
(23.8)
(41.2)
(46.3)
(1.5)
(9.4)
146.7

Change
3Q16/2Q16
66.0%
5.8%
-48.8%
-98.5%
324.4%
2431.8%
6.0%

9M16
917.0
(72.7)
(87.7)
(48.0)
(8.0)
(254.1)
446.5

9M15
637.3
(84.8)
(84.9)
0.0
0.0
(23.6)
443.9

Change
9M16/9M15
43.9%
-14.3%
3.3%
975.6%
0.6%

Includes expenses with legal reports. auditors. appraisers. and lawyers. among other professionals engaged as advisors for the transaction. Includes expenses with consulting services hired to help
the integration planning of the proposed combination with Cetip which is subject to regulatory approvals

16

Financial Statements
Summary of the income statement (consolidated)
SUMMARY OF THE INCOME STATEMENT (in R$ millions)

3Q16

Net revenues

3Q15

Change
3Q16/3Q15

559.1

598.3

(446.1)

(217.8)

113.0

380.5

-70.3%

20.2%

63.6%

-4,338 bps

Financial result

221.5

IFRS net income (loss)*

Expenses
Operating income
Operating margin

Adjusted expenses

-6.5%

2Q16

Change
3Q16/2Q16

9M16

9M15

Change
9M16/9M15

574.5

-2.7%

1,697.1

1,673.4

1.4%

104.8% (268.8)

66.0%

(917.0)

(637.3)

43.9%

305.7

-63.0%

780.2

1,036.1

-24.7%

53.2%

-3,300 bps

46.0%

61.9%

-1,595 bps

86.0

157.5% (418.3)

-153.0%

(36.2)

219.0

-116.5%

293.5

2,012.5

-85.4% (114.4)

-356.5%

518.4

2,610.0

-80.1%

(155.5)

(163.6)

-5.0% (146.7)

6.0%

(446.5)

(443.9)

0.6%

*Attributable to BM&FBOVESPA shareholders.

17

Contact

Investor Relations Department

Phone: 55 11 2565-4729 / 4418 / 4207 / 4834 / 7938
ri@bmfbovespa.com.br
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