2008 First Half Results Zurich - 4 September 2008 Agenda 1. - - PowerPoint PPT Presentation

2008 First Half Results

Zurich - 4 September 2008

1

Agenda

• 1. Tradition at a glance
• 2. Industry dynamics
• 3. 2008 first half performance
• 4. CFT share on SWX
• 5. Strategic outlook

• 1. Tradition at a glance

3

Roadmap based on long term view on the industry

H1 2008 : solid growth

• Turnover up
• 31.8% in constant currency terms
• 16.5% in current currency terms
• Operating profit CHF 99.8m
• Profit before tax CHF 103.4m
• Net profit from continuing operations CHF 58.8m
• Net profit group share CHF 46.5m

Strategic rationale

• Critical size
• Organic growth
• Sound balance sheet
• Attractive dividend policy

A fast evolving industry

• Consolidation around global players
• Structural changes in market structure
• Short and medium term impact of the credit crisis

4

One of the very few global leaders of the sector

• Significant scale
• Diverse sources of revenues across the three time zones
• A global product offer covering exchange-traded and OTC instruments
• Strong positioning in high-growth derivatives markets

Tradition is the third largest Interdealer Broker (« IDB ») in the world

M C H F

Global positioning

peer group overview – H1 2008 turnover*

*Turnover includes brokerage revenues net of clearing fees and information services GBP and USD translated in CHF at H1 2008 average exchange rates For ICAP, estimates from Reuter s Know ledge as of 12 August 2008

1,507 970 788 573

ICAP (e) T ullett Prebon Tradition GFI

5

Smoothing the process of price discovery Sourcing counterparty and bringing the various market participants together Showing liquidity and market depth Providing transparency Facilitating the development of the secondary market Primarily in the Over-the-Counter (OTC) markets

• More recently expanding to exchange-traded instruments

Highly skilled and efficient execution capabilities Holding no position in the market Having an independent role Earning commission for arranging trades at pre-agreed fees

IDBs play a critical role

6

Key revenue drivers

Revenue sources - Execution

• Agency & Matched principal

Drivers – Volumes + Market penetration

• Macroeconomic performance/uncertainty
• Interest rate movements
• Budget imbalances, bond issuance, credit cycle
• Markets volatility/liquidity
• Emerging economies
• Financial innovation
• Technology
• Activity of new investor groups

9.3 8.1 7.0 6.0 3.7 4.0 4.3 4.7 5.1 5.4 0 ,0 1 ,0 2 ,0 3 ,0 4 ,0 5 ,0 6 ,0 7 ,0 8 ,0 9 ,0 10 ,0

2000 2001 2002 2003 2004 2 005 20 06 20 07e 20 08e 200 9e

USD bn

Growth in IDB revenues

Source: Celent

7

2000 4000 6000 8000 10000 12000 14000 16000 2004 2005 2006 2007 Jan-May 2007 Jan-May 2008

5% 10% 15% 20% 25% 30%

Transactions volumes have grown substantially over time

1000 2000 3000

65% 62%

Global Foreign Exchange market turnover Global OTC derivatives market turnover

200 400 600 800 1000 1200 1400 1600 1800 2000 1990 1992 1994 1996 1998 2000 2002 2004 2006 2007 Q1 2008

500 1500 2500 3500 4500 5500 6500 7500 8500 Assets under management Number of funds

USD bn McKinsey Global Institute Growth in the hedge fund industry BIS - Triennial Central Bank Survey Average daily turnover in April in USD bn FIA – Growth in global futures and options trading In millions of contracts and annual growth rates

28%

100 000 200 000 300 000 400 000 500 000 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007

To tal IR and currency o utstan ding s T otal cred it defau lt swap o utstan ding s To tal equity d erivative o utstandin gs

ISDA - Market Survey Notional amounts outstanding at year end in USD bn Interest rates & Currency: 29% 10yCAGR

20%

8

8 92 788 6 45 21 8 31 4 385 497 813 7 92 786 85 0 9 15 1 ,144 2 91 361 45 5 536 700 727 78 0 8 82 91 8 1,1 39 1 995 199 6 19 97 19 98 19 99 20 00 2 001 200 2 200 3 20 04 (**) 2 005 20 06 2 007 H1 2 008 Cur rent ex change rates Consta nt exc ha nge r ate s*

Tradition has a track record of organic growth and innovation

Turnover

1,417 1,417 1,417 1,417

(*) At 31.12.2007 (**) IFRS since 2004 EBFL excluded in 2001 2005-2006-2007 exclude discontinued activities

M C H F

222 222 222 222

• 16.2% 1997 - 2007 CAGR in current terms
• 17.1% 1997 - 2007 CAGR in 2007 constant currency terms

Founded in 1959 in Lausanne Listed on SWX since 1973 VIEL & Cie acquired Compagnie Financière Tradition in 1996

• 2. Industry dynamics

10

Market structure driving strategic thinking

IDBs Focus on market evolution 5 players with revenues above $900m Leading players in the transactional value chain Continuously seeking scale in terms

• f products & geography

Futures Brokers Increased visibility of the global leaders 2 players with revenues around $1.5bn Their transactional services smaller in size than that of global IDBs Exchanges Consolidation rush CME/CBOT/NYMEX Deutsche Borse/ISE LSE/Borsa - OMX/Nasdaq - Dubai High PE and market cap Search for efficiencies and ways to enter the OTC space

Global themes New market power paradigm Unprecedented combination of macroeconomic factors Impact of credit crisis Client segmentation Electronification Diversification of business models New cash equities execution venues O p p o r t u n i t i e s

Search for liquidity, absolute return

& efficiency in risk transfer

Portfolio diversification

& internationalisation

Emergence of new markets Convergence/Consolidation

11

1996

Space marked by demutualisation, consolidation and « coopetition »

IDBs

Imar exbuys Spectron CME acquires CMA ICE buys Creditex CME acquires NYMEX Banks announce projects Rainbow, Four Seasons & V10 CME buys CBOT Merger between LSE&Borsa Nasdaq and Borse D ubai acquire OMX Deutsche Borse acquires ISE ICE buys Chatham NYSE buys Euronext CME buys Swapstr eam Banks announce project Turquoise NYSE acquires Archi- paelago Borsa and Euronext partner to buy MTS Ipo of ICE Deutsche Börse acquires Clearstream Ipo of CME Acquisition of LIFFE by Euronext Ipo of Euronext Ipo of Deutsche Börse MF Global listed Calyon Financial and Fimat announce merger Man Financial buys R efco and Eurex US Fimat acquires Cube Refco listed and delisted Man Financial buys GNI GFI buys Trayport Tullett Prebon acquires Primex ICAP buys Link Tullett Prebon and GFI i n merger tal ks Icap buys Traiana M&A acti vity in ship broking Icap submits RIE application Icap buys EBS CSTL demerges GFI buys Amerexin the US Tullett Prebon acquires Chapdel aine Creditex merges with Creditrade GFI listed CSTL approached by VCs M&A acti vity in the energy sector (GFI/Icap) Collins Stewart buys Prebon Tullett is acquired by Collins Stewart Icap acquires Brokertec & First Brokers Tradition Icap JV partners with Volbroker Tullett buys Liberty Tradition buys Finacor Tradition and Icap for m FXO JV Exco merges with Garban Prebon buys Marshall Intercapital reverses into Exco VIEL & Cie buys Tradition

1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 1999

Futures Brokers Exchanges

12

Short and long term impact of current environment

Unusual market conditions started last summer

• Sharp fall in interbank confidence
• Liquidity shortage
• Extreme levels of volatility
• > USD 500bn of write-downs
• With additional to come
• Europe representing 45% of the total

Unprecedented combination of challenges

• For financial institutions and governments
• Urgent and dramatic need for a rapid and

large recapitalisation of banks

• Disposal of assets, new opportunities for

cash rich financial institutions

• New roles for central banks
• Forced to intervene as liquidity supplier
• f « last resort »
• Managing rescue operations
• Rising structural inflation (record oil prices,

rising commodity prices)

• New geographical power distribution among

financial players

• 3. 2008 first half performance

14

39.1 56.9 92.3 81.3 676.7 596.9

46.5 58.8 103.4 99.8 689.0 788.3

H1 2007 H1 2008

H1 2008 overview

Turnover Expenses Operating profit PBT Operating margin Net profit group share Net profit from cont.

• perations

+18.9% +3.3% +12.0% +22.7% +15.4% +16.5%

M C H F

12.7% 12.0%

15

Sustained organic growth

Sector overview

H1 2008 YOY top line growth rates – current currency terms

11.6% 26.0% 11.1% 13.6% 4.8%

• 1.0%

7.4% 53.6% 16.2% 21.5% 13.3% 16.5% 17.9% 21.1% 69.0% 31.8%

BG C Partners C ME Grou p CF T Deutsche Börse G FI Group IC AP (est) ICE L S E MarketAxess MF Global Nasd aq OMX N YSE Euro next Tullett Prebon IT G Interactive Brokers Current Exchange Rates Constant Exchange R ates

Estimates from Reuters Knowl edge as of August 12 for half year figures for ICAP 200 400 600 800 1000 1200 1400 1600 2005 2006 2007 2008 H2 H1

Half year and yearly turnover

in current currency terms M C H F 914.7 1,144.4 1,417.1 788.3

16

11.5% 5.1% 45.0% 38.4%

Favourable market conditions for equity derivatives, commodities and rates

Turnover by product – H1 2008 bridge

400 500 600 700 800 900 1000

H 1 2 7 T u r n

• v

e r C u r r e n c i e s & i n t e r e s t r a t e s S e c u r i t i e s , c a s h & d e r i v a t i v e s C

• m

m

• d

i t i e s &

• t

h e r F

• r

e x H 1 2 8 T u r n

• v

e r

11.1% 6.3% 40.7% 41.9% Currencies & interest rates Securities, cash & derivatives Commodities Other activities

All percentages based on calculations in constant currency terms

M C H F

+18.9% +46.1% +34.2% H1 2008 H1 2007

17

Top line engines in the three time zones

Turnover by region – H1 2008 bridge

M C H F

400 500 600 700 800 900 1000

H 1 2 7 C

• n

t i n e n t a l E u r

• p

e U n i t e d K i n g d

• m

A m e r i c a s A s i a

• P

a c i f i c F

• r

e x H 1 2 8

21.0% 35.0% 9.7% 34.3% United Kingdom Asia-Pacific Continental Europe Americas

All percentages based on calculations in constant currency terms * Growth rates are calculated w ith scope of consolidation in 2007 applied to 2006 revenues

• 3.1%

+30.2% +47.6% +30.4% H1 2008

20.1% 32.2% 11.8% 35.9%

H1 2007

18

Half year operating profit Half year operating margin

in current currency terms

12.7% 10.9% 12.0%

20 40 60 80 100 120 H1 2006 H1 2007 H1 2008

8% 9% 10% 11% 12% 13% 14% 15%

Ope ratin g profit Operating margin

M C H F

Operating profit increased by 22.7%

62.9 99.8 81.3

19

Operating margin improved to 12.7%

Positive impact of 0.5% from recovery of 2007 underperforming UK operations Sustained level of profitability in Asia-Pacific Negative impact of 1.6% from exceptional items

12.7%

• 0.1%
• 0.6%

1.1% 0.4%

• 0.1%

12.0% 0% 2% 4% 6% 8% 10% 12% 14% 16% H 1 2 7 E u r

• p

e A m e r i c a s A s i a

• P

a c i f i c H Q F

• r

e x H 1 2 8

Operating margin – H1 2008 bridge

99.8

• 14.4
• 5.7

+14.7 +16.5 +7.4 81.3 30 50 70 90 110 130 H 1 2 7 E u r

• p

e A m e r i c a s A s i a P a c i f i c H Q F

• r

e x H 1 2 8

Operating profit – H1 2008 bridge

M C H F

20 705 512 347 294

ICAP (e) * Tu llett Pre bon Tradition GFI (gross brok.)

Europe: positive impact of 2007 reorganisation

Comments P&L dynamics

before HQ costs

UK France Belgium Denmark Dubai Germany Italy

• Equity derivatives, commodities and

capital markets leading the growth in the UK

• London new office under one single

management

• Turnaround of 2007 underperforming UK
• perations
• Decline outside UK

Regional positioning

peer group overview – H1 2008 turnover

9.1% 9.2% Margin H1 2007 H1 2008 +7.3% 315.0 Expenses +7.5% 347.0 Turnover Variance vs H1 2007 H1 2008

MCHF M C H F

* Estimates from Reuters Know ledge as of 12 August - regional contribution as per last company report

Luxembourg Portugal Russia South Africa Switzerland

Presence

21 USA Argentina Chili Columbia Mexico

Americas: a solid performance

Presence Comments

610 342 275 221

ICAP (e) * Tu llett Pre bon Tradition GFI (gross brok.)

• Strong top line performance across a

wide variety of products

• Good level of cost control
• Continued investment in new teams

P&L dynamics

before HQ costs

14.9% 15.0% Margin H1 2007 H1 2008 +26.3% 234.1 Expenses +26.5% 275.5 Turnover Variance vs H1 2007 H1 2008

MCHF M C H F

Regional positioning

peer group overview – H1 2008 turnover

* Estimates from Reuters Know ledge as of 12 August - regional contribution as per last company report

22

Asia-Pacific: numerous medium term opportunities

Comments

192 115 166 56

ICAP (e) * Tu llett Prebo n Tradition GFI (gross brok.)

• Benefits from expansion of product line
• Preparing for the launch in Mainland

China

• Continuously exploring new

geographies

• Sustained pace of growth at Gaitame

P&L dynamics

before HQ costs

21.3% 25.1% Margin H1 2007 H1 2008 +16.1% 124.2 Expenses +21.9% 165.8 Turnover Variance vs H1 2007 H1 2008

MCHF M C H F

Regional positioning

peer group overview – H1 2008 turnover

Presence

Japan China (Hong Kong and rep. offices in Beijing & Shanghai) India Malaysia Singapore South Korea Australia

* Estimates from Reuters Know ledge as of 12 August - regional contribution as per last company report

23

Continued focus on areas of progress

6.8 7.4 7.1 Other operating expenses 10.9 12.0 12.7 Operating margin 1.3 1.3 1.9 Amortisation & assets depreciation 60.2 59.1 58.7 Operational 1.7 5.3 6.5 42.1 7.3 67.5 H1 2006 5.2 5.2 T&E 1.5 4.9 53.0 8.0 66.7 H1 2008 1.6 Rent 5.5 Telecom & IS 46.5 Variable part / compensation cost 7.9 Administrative 67.0 Compensation costs H1 2007

In % of turnover

Brokers: 1459 - Total Staff: 2281

24

Net profit group share up 18.9%

Half year net profit group share

10 20 30 40 50 H1 2006 H1 2007 H1 2008

M C H F

40.5% 24.9% 39.9% 18.9% 36.3% 44.8%

Deutsche Börse ICAP Tullett Prebon CFT G FI

Global positioning

Peer group overview – H1 08 net profit group share growth yoy

Estimates from Reuter s Know ledge as of August 12 for ICAP * Excluding negative goodw ill in 2007

39.1 46.5 28.2 *

25

Net profit group share at CHF 46.5m

+18.9 39.1 46.5 Net profit - Group share +18.0 48.9 57.8 Prof it for the period

• 177.5

1.2

• 0.9

Net financial income +87.2 +3.3 +26.0 +12.0

• 53.7

+22.7 % change 56.9 58.8 Prof it for the periodf rom continuing

• perations
• 1.0
• 44.6

103.4 4.5 99.8 H1 2008

• 8.0

Result after tax f or the y earf rom discontinued operations

• 35.4

Income tax 92.3 Prof it before tax 9.8 Share of profit of equity accounted companies 81.3 Operating prof it H1 2007

MCHF

7.0m of non recurring profit in 2007 Increase in group normative tax rate due to higher contribution from Asia and Americas Minority interests in 4 areas Stable in % of total profit Last operation sold in H1 2008

26

104.3 160.5 Pay ables related to MP act. 30.1 9.3 Financial assets at f air Value 310.3 403.0 Trade & other payables 289.2 304.2 Trade & other receiv ables 42.9 33.7 Of which Other fin.debts * 468.8 494.6 Receiv ables related to AH act. 123.9 146.4 Of which Financial debts 139.5 204.6 Receiv ables related to MP act. 3.3 1.8 Of which Financial debts 41.2 37.2 Non-current liabilities 141.2 205.9 Non-current assets 36.0 42.3 Of which Minority interests 473.8 497.0 Pay ables related to AH act. 331.1 343.3 Cash & Cash equivalents 166.8 180.1 Short term financial debts 19.0 24.8 Other short term assets 23.7

• Liabilities held for sale

29.0

• Assets held for sale

6.2 7.2 Of which Other fin. debts * TOTA L A SSETS Current assets

MCHF

1,586.7 1,380.8

June 08

1,447.9 1,277.7

Dec 07

TOTA L LIA BILITIES Current liabilities Shareholders’ equity 1,055.2 1,240.6 1,447.9 1,586.7 327.8 308.9

Dec 07 June 08

Organic growth strategy reflected on the balance sheet

Decrease in equity explained by dividend payments (CHF 47.7m) and translation differences (CHF 30.2m) Goodwill amounts to CHF 27.5m

Note: MP act. stands for Matched Principal activities – AH act. stands for Account Holder activities * Relates to obligations under finance leases and debt linked to matched principal activities

Simplified consolidated balance sheet

27

CHF 216.4m of adjusted net funds

224.6 216.4 Net funds adjusted

• 9.4

12.0 Adjustments linked to variances in AH & MP activities 234.0 204.4 Net funds

• 3.3
• 1.8

Long term financial debt *

• 123.9
• 146.4

Short term financial debt * Dec 07 June 08 MCHF 331.1 343.3 Cash & cash equivalents Financial assets @ fair value 9.3 30.1

* Excluding obligations under fi nance l eases and debt linked to matched principal acti vities

Decrease due to dividend payments, investments and translation differences

• 4. CFT share on SWX

29

Demonstrable track record on SWX

+92% +16% +56% SMI +3898% +893% +132% CFT 28 oct 96* 10Y 5Y

0,6 0,9 1 1,25 1,5 2 4 6 6 7 8 4 *

1 9 9 6 1 9 9 7 1 9 9 8 1 9 9 9 2 2 1 2 2 2 3 2 4 2 5 2 6 2 7

Dividend policy

Based on a share w ith a nominal value of CHF 2.50 since 2002 * CHF 4.0 cash dividend per share with a nominal value of 2.50 plus one bonus share for every 25 shares held

C H F

Long term performance

since 30 Dec 2002 & 1997

At 29 August 2008, based on CFT share price of 156.8, SMI at 7238.74 * CFT all time low at the time of the controlling shareholder ’s change. CHF 3.92

• 19%
• 7%
• 16%

SPIEXX

• 18%
• 4%
• 15%

SMI

• 20%
• 38%
• 52%

Deutsche Börse

• 37%
• 39%
• 52%

GFI +6%

• 13%
• 6%

Tullett Prebon

• 3%
• 25%
• 35%

ICAP

• 19%
• 18%
• 23%

CFT 12 months 6 months Ytd As of 29 Aug. 2008

Sector overview

• Stock No.

: 1,248,815

• Listing

: SWX Zurich

• No. of shares

: 5,619,451

• Nominal value

: CHF 2.50

• Free float

: 34%*

*as of August 31st 2008

N e x t R e l e a s e Q3 results 6 November 2008

5. 5. 5.

• 5. Strategic

Strategic Strategic Strategic outlook

• utlook
• utlook
• utlook

31

Continue to build size and scale Monitoring current market environment Balanced focus between growth & margin Address the minority interests gap at the right price

Priorities going forward

Solid foundations for the future

• Track record of organic growth
• Sizeable market share
• Exposure to fast-growth markets
• Diversity of products & geographies

APPENDIX

33

Market volatilities

10 20 Feb-06 Apr-06 Jun-06 Aug-06 Oct -06 D ec-06 Feb-07 Apr-07 Jun-07 Aug-07 Oct -07 D ec-07 Feb-08 Apr-08 Jun-08 Aug-08

$/JPY $/€

10 15 20 25 Feb -06 Ap r-06 Jun -06 Aug -06 Oct-06 Dec-06 Feb -07 Ap r-07 Jun -07 Aug -07 Oct-07 Dec-07 Feb -08 Ap r-08 Jun -08 Aug -08

LBOX

20 40 60 80 100 120 140 160 Feb-06 Apr-06 Jun-06 Aug-06 Oc t-06 Dec -06 Feb-07 Apr-07 Jun-07 Aug-07 Oc t-07 Dec -07 Feb-08 Apr-08 Jun-08 Aug-08 10 20 30 40 50 60 70 W TI Crude Volatility (historic)

Foreign exchange

historic volatilities

Source: Bloomberg

Fixed Income

Source: Bloomberg

5 15 25 35 Dec-05 F eb-06 Apr-06 Jun-06 Aug-06 Oct-06 Dec-06 F eb-07 Apr-07 Jun-07 Aug-07 Oct-07 Dec-07 F eb-08 Apr-08 Jun-08 Aug-08

VIX

Equities

Source: Reuters

Energy

In USD In %

Source: Bloomberg

34

Trading volume

Source: FIA

1 00 2 00 3 00 Jan 0 6 March Ma y Jul Sept Nov Jan 0 7 March Ma y Jul Sept Nov jan v-08 March Ma y July 10 20 30

CME Gr oup E u rex ICE Fu tu res (E u rop e) CME Group, Eurex ICE Futures

Exchange-traded derivatives

Monthlyvolumes in million contracts

Source: exchanges websites

35

FX rates

1.62 1.10 2.01

Closing rates 29 August 2008

1.61 1.61 EUR 1.05 1.02 USD 2.07 2.03 GBP

Average rates 30 June 2008 Closing rates 30 June 2008

vs CHF