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

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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

• r 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.

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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 Questions & Answers Corporate evolutions – Lieve Mostrey, Chief Executive Officer

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Highlights

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

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2 3 4 5

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Business metrics achieved record levels

Assets under custody grew to €28.6 trillion Settlement volume increased to 215 million netted transactions Collateral average daily outstandings up 7% to €1,150 billion Fund assets under custody, with 10.5 million orders routed

+3%

+10% +7% +13%

Value and volume of se c ur itie s tr ansac tions se ttle d

573 623 670 655 733 170 182 191 196 215

• 50.0

100.0 150.0 200.0 250.0

• 200.0

400.0 600.0 800.0 1,000.0

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)

Note: Assets under custody at constant foreign exchange

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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

24.7 25.8 26.5 27.7

28.6

14.0 16.0 18.0 20.0 22.0 24.0 26.0 28.0 30.0

2013 2014 2015 2016 2017

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Financial performance

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Better than expected 2017 financial performance

• Dividend per share up 5% despite lower profits due to planned temporary investments

€ millio n

2017 2016

Y-o-Y

F Y F Y

Business Income 1,039 999

4%

Interest, ba nking & other inc. 184 163

13%

Opera ting income 1,223 1,162

5% 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%

Note: EPS adjusted for normalisation of DTA in 2017 and IP in 2016

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Underlying operating costs expected to stabilise in 2018

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Operating margin moderated due to planned investments

Busine ss inc ome and Ope r ating mar gin

€ millio n

890 938 997 999

1,039

33.0% 34.6% 35.4% 35.4%

33.0%

15.0% 20.0% 25.0% 30.0% 35.0% 40.0% 45.0% 50.0%

800 850 900 950 1,000 1,050 1,100

2013 2014 2015 2016 2017

Business Inc o me Op erating m ar g in + 4%

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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

8.3% 8.7% 8.7% 7.7%

7.5%

0.0% 1.0% 2.0% 3.0% 4.0% 5.0% 6.0% 7.0% 8.0% 9.0% 10.0%

2013 2014 2015 2016 2017 69.3 78.6 87.0 83.7

84.6

0.0 10.0 20.0 30.0 40.0 50.0 60.0 70.0 80.0 90.0 100.0

2013 2014 2015 2016 2017

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Healthy, stable balance sheet; AA ratings maintained

€ millio n

2017 2016

e nd o f ye a r b a la nc e

L

• 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 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

T

• ta 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

• ng term deb t

595 594

Strong and stable ratings by Fitch and S&P illustrate our performance and market position:

• Euroclear Bank AA+/AA Stable
• Euroclear Investments AA‐/AA

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Increasing dividend and shareholder equity

€/ sha re

+3% Divide nd pe r shar e & Divide nd pay-out T

• tal gr
• up shar

e holde r ’s e quity at ye ar e nd

€millio n

+5%

29.6 31.5 36.3 37.0

39.0 40% 40% 40% 40% 52%

15% 20% 25% 30% 35% 40% 45% 50% 55% 60%

0.0 5.0 10.0 15.0 20.0 25.0 30.0 35.0 40.0 45.0

2013 2014 2015 2016 2017

Divid end pe r share Div pa y-o ut (%)

3,212 3,244 3,476 3,560

3,671

500 1,000 1,500 2,000 2,500 3,000 3,500 4,000

2013 2014 2015 2016 2017

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Business update

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Meeting clients’ needs at the centre

• f our business agenda

One‐stop shop providing safe and efficient post‐trade securities services across products and markets Enhancing liquidity in cash, collateral and financing markets Innovation to bring new efficiency and trading opportunities to capital markets

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Our vision: remain a leading partner to participants in global capital markets

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

Consistent strategy, building on client focus & our business expertise

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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:

• 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

Strengthening our European core

Euroclear Bank ESES

18 787 887 1,068 1,072 1,150

14.0 214.0 414.0 614.0 814.0 1,014.0 1,214.0

2013 2014 2015 2016 2017

2017 highlights:

• OTC derivatives: continue to support clients

as they transition to new regulatory regime.

• GlobalCollateral Ltd: launched Inventory

Management Service & moving to client

• nboarding stage.
• Collateral outstanding +7% in 2017 reaching

€1.2 trillion, benefiting from innovative and diversified product offering

Expanding growth initiatives: Collateral

Ave r age daily c ollate r al outstanding

€b illio n

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2017 highlights:

• Euroclear FundsPlace assets under custody

grew 13% year‐on‐year.

• International ETF structure growth continues,

benefitting from rise of passive management.

• 40% of the European ETF industry now in the

international form

• ETF asset class increasingly used for

collateral management purposes

Expanding growth initiatives: Funds

50 100 150 200 250 2014 2015 2016 2017

International ETF Structure by Assets (€billion)

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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

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Innovation: Exploring Data & Information Solutions

Data and insights: new revenue growth opportunities to complement our core value proposition

• Euroclear Information Solutions aims to provide clients

with insights to manage liquidity in a smart way

• Differentiated client offering by combining data offering

with existing Euroclear solutions

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Corporate evolutions

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Prudent approach to managing Brexit-related risks

• Euroclear remains committed to serving the U.K. post‐Brexit
• Minimal business impact on Euroclear from Brexit
• Solutions identified to overcome areas of Brexit‐related risk
• 1. Corporate restructuring
• Strategically important to have

top holding company inside EU.

• Intend to propose a new group

structure, with parent holding company in Belgium.

• Proposed restructuring via

transfer scheme, subject to shareholder approval.

• 2. Ireland
• We plan to establish a new Irish

CSD using the CREST system.

• Sustainable solution to continue

supporting Irish securities market (subject to regulatory approvals).

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More active dialogue with shareholders

Euroclear welcomes ICE as a new major shareholder

• Actively engaged part of our shareholder community
• Appointment of representative, Hester Serafini, as non‐executive director

Increasingly active investor relations programme planned

• Appointed Moelis & Company as independent advisor to conduct detailed shareholder consultation
• Moelis & Company will contact all shareholders and we encourage your participation
• All feedback will be anonymous and aggregated to protect confidentiality
• Your insights will help shape future Board decisions on shareholder matters

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• Resilient. Relevant. Returns.

Sustainable financial performance with strong revenue outlook and costs to trend lower post elevated regulatory-driven investment phase Resilient, well diversified with a solid core franchise positions Euroclear for future growth as we implement our strategy Growing shareholder value, while preserving strong capital levels

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Restructuring the group to secure a certain post-Brexit environment

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Questions?