Summary of BME 2016 General Shareholders´ Meeting
ORDINARY GENERAL SHAREHOLDERS’ MEETING OF BME
BME’s General Shareholders Meeting, which was held today in Madrid, today approved the annual accounts and proposal for application of the financial result of the year ended on 31 December 2015, the best result of the company since 2008.
The company’s net profit in 2015 totalled €173.5 million, up 5.2% on the previous year. This result has been underpinned by a 0.4% reduction in operating expenses. “We have maintained the cost-control that is a hallmark of BME, despite the efforts involved by some projects such as the Reform of the Clearing and Settlement in Spain, which started just yesterday”, stated Antonio Zoido, during the General Meeting.
BME’s financial performance indicators have continued to be international benchmarks. In cumulative terms, the efficiency ratio, measuring the relationship between operating costs and revenues, improved to 29.6%, while return on equity (ROE) remained at 40.9%, as part of the Group’s outstanding financial solvency.
Trust, which is basic for the functioning of the markets, was also brought up during Antonio Zoido’s address, who highlighted it remains at a high level in the Spanish stock market. “Foreign investors also hold more shares than ever in the Spanish stock exchange: more than 44% of the total, and households continue to own more than 25% of listed stocks”.
The stock market’s ability to respond to companies and investors and its effectiveness in putting those demands into practice was also tackled by Antonio Zoido during his address. In 2015 it could be seen in the new investment and financing flows in the form of capital increases and IPOs. The market received a total of 41.6 billion euros, 15.3% more than in the previous year, the highest figure since 2007, and one of the largest in Europe and the world.
“The Spanish stock exchange has contributed more than 242 billion euros to its companies since 2008, at a time when obtaining bank financing became complicated due to the implications of the crisis in the sector.As regards public offerings, the total amount of such operations in 2015 increased by 49.1%, to 8 billion euros. The year ended with seven public offerings in the stock market and 16 new companies in the MAB”, added Antonio Zoido.
The Chairman of BME also ran through the main initiatives of the company Last year, and in these early months of 2016. “BME rolled out new products, advanced in strengthening market infrastructures, boosted different business areas and diversified its activity in order to broaden its revenue sources and services”.
The Spanish economy has grown in the last two years, stated Antonio Zoido. Imbalances have been corrected and certain reactions have shown the country's potential. “However, the latest deficit figures are worrying because they affect the credibility of the Spanish economy which, as you all know, is highly dependent on external funding in the form of capital and debt. Even so, a large number of companies have announced their intention to turn to the stock market in the coming months, thus making clear the business confidence in the Spanish securities market”.
The Chairman of BME ended his speech addressing the corporate moves taking place at world level, which highlight the complexity of these processes and the appropriateness of acting with prudence. “BME positively views any movement between stock exchanges that brings benefits to investors and market participants, and it closely watches all such activity. You may rest assure that the Spanish stock exchange is perfectly ready to compete in any conditions or environment”, Zoido added.
By way of conclusion, Zoido touched upon the first ten years of BME as a listed company, which will be marked on 14 July. The goal was to take on a profile such as that of any other company, seeking to improve our business ratios and generating return for shareholders. “Revenues are reaffirming compliance with this commitment and, with respect to shareholders, I would remind you all that we have paid out more than 1.5 billion euros in dividends during this time. The TSR (Total Shareholder Return) of BME received by a shareholder who invested in our public offering attained 115% over these 10 years”, concluded Zoido.
The Shareholders’ General Meeting also ratified the appointment of Mª Helena Dos Santos Fernandes de Santana as member of the Board.
SPEECH BY THE GENERAL MANAGER
In his speech, BME’s General Manager, Javier Hernani, stressed the financial soundness of BME’s balance sheet, as the company maintains its operational gearing intact and has no debt. The ordinary funds generated by the company allow it to sit on a high level of cash, which is enough to carry out its investment projects without debt.
BME ended the 2015 fiscal year with €433 million in equity, after deducting the €33.3 million and €50 million interim dividends distributed in September and December 2015 respectively. “If we deduct the final dividend (€77.6 million), the company’s consolidated total equity amounts to €355.4 million”, said Javier Hernani.
The General Manager mentioned the first quarter’s main financial references, which have marked a start of the year in line with the lower volumes recorded in the second half of 2015. Net profit was €42.9 million, down 8.9% year-on-year but 4.6% higher than the preceding quarter.
Operating revenues for the first quarter were down 11.7%. “Without the effect of extraordinary items – mainly associated with the Reform of Clearing and Settlement in Spain - costs would have practically remained flat in relation to 2015”, said Hernani.
To conclude its address and in connection with the distribution of dividends by the company, Javier Hernani highlighted that “this dividend figure, as the Chairman also stated, implies that BME distributes 93% of the company’s net profit for 2015, one of the highest pay-out ratios in the sector and in the Spanish stock market”.
