Eur Euroclear clear plc plc In Investor Da Day 2018 2018 6 March - PowerPoint PPT Presentation

Eur Euroclear clear plc plc In Investor Da Day 2018 2018 6 March 2018

Forward looking statements The information, statements and opinions expressed in this presentation (the “ Content ”) do not constitute and shall not be deemed to constitute: (i) any offer, invitation or inducement to sell a security or engage in investment, financial or other similar activity; or (ii) a solicitation of an offer to buy any security; or (iii) any recommendation or advice in relation to any investment, financial or other decision. Persons considering making any investment or financial decision should contact their qualified financial adviser. The Content may include forward looking statements, in particular, in relation to future events, growth, future financial performance, plans, strategies, expectations, aims, prospects, competitive environment, regulation and supply and demand. Such statements contain inherent risks and uncertainties and actual outcomes may differ materially from those expressed or implied by forward looking statements. To the maximum extent permitted by law, no warranty or representation including, but not limited to, accuracy or completeness (express or implied) is made in relation to the Content, including, but not limited to, any projections or statements about the prospects of Euroclear. Euroclear makes no commitment to update Content and expressly disclaims, to the extent lawful, liability for any errors or omissions in it. The Content is not directed at, or intended for distribution to, or use by any person or entity where such distribution or use is restricted by law or regulation. Persons into whose possession the Content comes should inform themselves about and observe any such restrictions. Past performance, historic financial information and/or historic distributions should not be taken as an indication of current or future performance, results or distributions. 2

What we will cover today Highlights – Lieve Mostrey, Chief Executive Officer Financials – Bernard Frenay, Chief Financial Officer Business update – Frederic Hannequart, Chief Business Development Officer Corporate evolutions – Lieve Mostrey, Chief Executive Officer Questions & Answers 3

Highlights 1 Financial performance ahead of expectations, dividend increased by 5% 2 Strong revenue performance drove 2017 results 3 Net Interest Earnings uptick, as interest rates begin to rise 4 Increased investment plans in 2017, with costs expected to stabilise in 2018 5 Solid progress with business initiatives; well positioned to manage Brexit 4

Business metrics achieved record levels Value and volume of se c ur itie s tr ansac tions se ttle d +3% Assets under custody grew to €28.6 trillion 250.0 215 1,000.0 196 191 182 200.0 170 733 800.0 670 +10% 655 Settlement volume increased to 215 million netted transactions 623 150.0 573 600.0 100.0 400.0 50.0 200.0 +7% Collateral average daily outstandings up 7% to €1,150 billion - - 2013 2014 2015 2016 2017 Va lue o f se c uritie s transac tio ns se ttled (EUR trillion) Numb er o f transac tions afte r ne tting (m illio n) +13% Fund assets under custody, with 10.5 million orders routed Note: Assets under custody at constant foreign exchange 5

Positive trends in assets under custody & net fee income Se c ur itie s he ld in c ustody €trillio n e q uiva le nt, ye a r-e nd 30.0 28.6 27.7 28.0 26.5 25.8 26.0 24.7 24.0 22.0 20.0 18.0 16.0 14.0 2013 2014 2015 2016 2017 6

7 Financial performance

Better than expected 2017 financial performance € millio n Y-o-Y 2017 2016 F Y F Y Business Income 1,039 999 4% Interest, ba nking & other inc. 184 163 13% 5% Opera ting income 1,223 1,162 Administra tive expenses -809 -744 -9% S ha re o f results -10 -7 -41% Opera ting profit before ta x 403 411 -2% Pro visio ns 5 -35 T a xa tio n & im pa irment -172 -78 P rofit for the period 236 298 -21% E a rning s per sha re (€/ sha r e ) 84.6 83.7 1% Dividend per sha re (€/ sha r e ) 39.0 37.0 5% • Dividend per share up 5% despite lower profits due to planned temporary investments Note: EPS adjusted for normalisation of DTA in 2017 and IP in 2016 8

Underlying operating costs expected to stabilise in 2018 9

Operating margin moderated due to planned investments Busine ss inc ome and Ope r ating mar gin € millio n 1,100 50.0% + 4% 1,039 45.0% 1,050 999 997 40.0% 1,000 35.0% 938 35.4% 35.4% 950 33.0% 30.0% 890 34.6% 900 25.0% 33.0% 850 20.0% 800 15.0% 2013 2014 2015 2016 2017 Business Inc o me Op erating m ar g in 10

Underlying RoE and adjusted EPS consistent with prior year levels Adjuste d r e tur n on e quity Adjuste d e ar nings pe r shar e €/ sha re 10.0% 100.0 8.7% 8.7% 9.0% 87.0 8.3% 83.7 90.0 84.6 7.7% 78.6 8.0% 7.5% 80.0 69.3 7.0% 70.0 6.0% 60.0 5.0% 50.0 4.0% 40.0 3.0% 30.0 2.0% 20.0 10.0 1.0% 0.0 0.0% 2013 2014 2015 2016 2017 2013 2014 2015 2016 2017 11

Healthy, stable balance sheet; AA ratings maintained Strong and stable ratings by Fitch € millio n 2017 2016 and S&P illustrate our performance e nd o f ye a r b a la nc e and market position: L o a ns a nd a dva nc es to b a nks a nd c usto m ers 15,076 18,398 F ina nc ia l a ssets 5,372 2,881 • Euroclear Bank AA+/AA Stable Go o dw ill a nd (in)ta ng ib le fixed a ssets 1,112 1,113 Other a ssets/ a c c rued inc o m e 449 485 Euroclear Investments AA ‐ /AA • T ota l a ssets 22,008 22,876 Depo sits b y b a nks a nd c usto m ers a c c o unts 16,886 17,886 Other lia b ilities/ pro visio ns 856 836 S ha reho lders'eq uity 3,671 3,560 L o ng term deb t 595 594 12

Increasing dividend and shareholder equity Divide nd pe r shar e & Divide nd pay-out T otal gr oup shar e holde r ’s e quity at ye ar e nd €/ sha re €millio n +3% +5% 4,000 3,671 45.0 60% 3,560 3,476 39.0 3,500 3,244 3,212 37.0 40.0 55% 36.3 35.0 50% 3,000 31.5 52% 29.6 30.0 45% 2,500 25.0 40% 2,000 40% 40% 40% 40% 20.0 35% 1,500 15.0 30% 1,000 10.0 25% 500 5.0 20% 15% 0.0 0 2013 2014 2015 2016 2017 2013 2014 2015 2016 2017 Divid end pe r share Div pa y-o ut (%) 13

14 Business update

Meeting clients’ needs at the centre of our business agenda Enhancing liquidity in cash, collateral and One ‐ stop shop providing financing markets safe and efficient post ‐ trade securities services across products and markets Innovation to bring new efficiency and trading opportunities to capital markets 15

Our vision: remain a leading partner to participants in global capital markets Consistent strategy, building on client focus & our business expertise Strengthen our European Core Settlement, Safekeeping, Asset servicing • Expand growth initiatives Collateral management solutions • Funds servicing • Global Reach • Explore innovation FinTech partnerships to support core business • Data services and solutions • 16

Strengthening our European core Establishing a gateway to pan ‐ European securities, providing choice between central and commercial bank money: • >50% of European capital market securities serviced through Euroclear Bank and 6 Domestic CSDs • Asset Servicing, Funds and Collateral Management services • Launched Single CSD service to T2S Continued investment in our European presence for safe and efficient capital markets: Euroclear ESES Bank • Investing to implement CSD Regulations • Establishing a new Irish CSD to ensure service post ‐ Brexit • Building new Nordic CSDs IT infrastructures • Enhancing cyber security resilience 17

Expanding growth initiatives: Collateral 2017 highlights: Ave r age daily c ollate r al outstanding €b illio n • OTC derivatives: continue to support clients 1,214.0 1,150 1,068 1,072 as they transition to new regulatory regime. 1,014.0 887 787 814.0 • GlobalCollateral Ltd: launched Inventory Management Service & moving to client 614.0 onboarding stage. 414.0 214.0 • Collateral outstanding +7% in 2017 reaching 14.0 €1.2 trillion, benefiting from innovative and 2013 2014 2015 2016 2017 diversified product offering 18

Expanding growth initiatives: Funds 2017 highlights: International ETF Structure by Assets (€billion) • Euroclear FundsPlace assets under custody 250 grew 13% year ‐ on ‐ year. 200 150 • International ETF structure growth continues , 100 benefitting from rise of passive management. 50 • 40% of the European ETF industry now in the 0 international form 2014 2015 2016 2017 • ETF asset class increasingly used for collateral management purposes 19

Expanding growth initiatives: International Markets Euroclear connects domestic markets to global investors through ‘Euroclearability’: • Assisting governments in developing capital market practices to meet global investor requirements • Strong traction in Latin America: Chile and Peru became ‘Euroclearable’. Argentina issued further sovereign bonds after returning to capital markets in 2016 • Continue to work with growth economies, including China, to connect to Euroclear and increase breadth of domestic securities available through our CSD links 20