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 2016, as well as the re-election of Board Directors Antonio Zoido, Joan Hortalá and Ramiro Mato. In addition, it has appointed Javier Hernani as Board Director.
Following this, the Board of Directors has agreed to appoint Javier Hernani CEO.
The General Shareholders' Meeting has also decided to distribute a supplementary dividend of €0.80 gross per share, to be paid on May 5. During his address to the Meeting, Antonio Zoido stated that "the company's 2016 total gross dividend will be €1.80 per share and the pay-out will be 93%, one of the highest among listed companies."
In his address to the Shareholders’ Meeting, Antonio Zoido reflected on the total return to the shareholder. "Talking of the dividend, and having already expressed in my speech its importance in our market and how the presence or otherwise of a dividend changes the analysis, it is now time to remind you, with a great deal of pleasure, that anyone who invested in BME shares from the time of their flotation just over ten years ago, would have been able to obtain a yield of over 120%”.
In his review of the results of BME, Antonio Zoido highlighted that "2016 was a difficult year, full of historic events both in Spain and the rest of the world, but BME has worked hard to reach the highest levels of performance in its business activities".
The company obtained a profit of €160.3 million, down 7.6% on 2015. In this chapter Zoido highlighted two relevant aspects “firstly, that this is one of the best results BME has had since the start of the crisis in 2008: profits have only been higher in two of the eight years since then. Secondly, the efforts made to diversify revenue sources can be seen in a remarkable operational gearing ratio -unique in the sector- with income not linked to volumes covering 119% of expenses”.
During his speech, the Chairman of BME reviewed the management ratios of the company compared to the sector as a whole. “ROE (return on equity) returned a figure of 37.5%, whilst the efficiency ratio (that shows the relationship between operating costs and income) stood at 33.2%. The difference with regard to the sector average is over 23 points in the first case and 9 points in the second. Yet again last year, our management proved itself to be more efficient than the sector average”.
Regarding the performance of the BME share since the last meeting, the Chairman stated that “it has performed well since the last Shareholders' Meeting, gaining 41%. 2017 is also proving to be a good year so far, with the stock rising by 17% up to April”.
Zoido presented to the shareholders the most representative achievements that have been carried out during 2016 and the first few months of this year, among which he highlighted the Reform of Clearing and Settlement. “Exactly one year ago, we successfully completed the first phase of the reform of the Spanish Securities Clearing and Settlement System, which produced the migration of Equities trading to the new ARCO platform and saw the rapid stabilisation of the new system, thanks to the involvement and efforts of Iberclear, the central counterparty entities and the Participants themselves”.
With the execution of this step, the settlement period for Equity trades moved from T+3 to T+2 in September
“The addition to our services of a trading segment dedicated to the subscription, redemption and transfer of investment funds is part of BME's organic growth” was also tackled by Antonio Zoido during his address. It is a market segment that aims to provide the best offer and service to clients and investors. It is slated to begin operations on 27 June.
The Chairman of BME also highlighted a new initiative aimed at companies: BME 4Companies. “Yesterday, we announced the start of BME 4Companies, an initiative whose objective is to provide Spanish companies with the services and support necessary for a successful relationship with the Securities Market and its players”, he stated.
In his conclusion, Antonio Zoido stated that “The Spanish stock market is ready to overcome hard times. The best example is our own history. BME's business activity has remained solid despite the crisis and the Spanish bourse has taken an increasingly important role in meeting companies' funding requirements. There is no doubt that the best answer BME can give its clients, investors and shareholders is to continue the process of adapting to this new era that has already begun with the transformation of the traditional financial system. This means we must continue to grow both as a company and market, and we are ready to do so”.
SPEECH BY THE GENERAL MANAGER
In his speech, BME’s General Manager, Javier Hernani, focused on the results for the first quarter of the year and the organizational moves made by BME.
BME posted net profit of 39.3 million euros in the first quarter, “in line with the market consensus of those analysts who cover the share”, highlighted Hernani.
From an organisational standpoint, BME has decided to restructure the resources, departments and companies of the Information and IT & Consulting business units, grouping the company's various activities related to market data and value added services in the fields of technology, regulation and innovation, according to their nature.
“The purpose of these changes - Hernani said - is to improve efficiency and foster diversification within the Group. As a response to this organisational change, the Market Data & Value Added Services business unit has been created, which combines these activities under the same management”.
The General Manager made special mention to the activity of Equities in the first quarter: “The total amount of investment flows channelled through the exchange for the quarter totalled €9.4 billion, 190% higher than in the same period in 2016. BME has been the most active European market in the first quarter in terms of the effective value of IPOs.
The joint capitalisation of newly admitted companies was €7.5 billion, making BME the second-biggest international market by volume of IPOs”.
As for the Fixed Income market, the General Manager stressed the performance of MARF in the first quarter, with an issued volume of €883 million, a year-on-year rise of 83%, and with an outstanding balance of €2 billion, 51.5% higher than at 31 March 2016.
Javier Hernani concluded his speech by mentioning the performance of the BME share in 2017. “BME stock experienced an increase from €28 at the close of last year to €32/33 posted recently, a gain of 17%”.