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Euronext: Gateway to the € uro-zone

Euronext: Gateway to the € uro-zone. Holland. France. Belgium. Portugal. November 2006. Euronext today. The world’s first integrated cross-border exchange Operating in 5 European countries and the U.S. Europe’s largest central orderbook exchange

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Euronext: Gateway to the € uro-zone

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  1. Euronext: Gateway to the €uro-zone Holland France Belgium Portugal November 2006

  2. Euronext today The world’s first integrated cross-border exchange • Operating in 5 European countries and the U.S. • Europe’s largest central orderbook exchange • The world’s second largest derivatives market • Business worth €1,700 billion traded every day • A leading supplier of exchange trading technology • Used worldwide by most leading cash & derivatives exchanges • A listed company - market capitalisation of € 8 billion • Intention to merge with NYSE subject to regulatory and shareholder approval Source: Euronext

  3. Euronext’s competitive position in Europe MARKET CAPITALISATION European cash equity market capitalisation (year end 2005) CENTRAL ORDERBOOK Value traded (€ billion, 2005) • Largest equity market in continental Europe • Largest central orderbook in Europe Source: FESE

  4. Sector comparison Euronext vs. LSE • Euronext – largest in Technology, Consumer Goods, Utilities, Industrials • LSE – largest in Financials, Basic Materials, Oil & Gas Total market cap = €2,654 billion* Total market cap = €2,728 billion** Source: Euronext & LSE, ICB classification* As at 31/03/06, excludes multi-listed stocks ** As at 28/02/06

  5. Euronext – International Listings Breakdown of listed companies Selected international companies: Arcelor Mittal, Corus Group, Daiwa, Deutsche Bank, Exxon Mobil, Fiat, Hitachi, Honda, HSBC, Maroc Telecom, Mitsubishi Electric, NEC, SES Global, Sharp…... International Companies Selected domestic companies: ABN Amro, AXA, BNP Paribas, Carrefour, Danone, EDF, Fortis, France Telecom, GDF, Heineken, ING Group, L’Oréal, LVMH, Michelin, Philips, Renault, Royal Dutch Shell, Sanofi-Aventis, Société Générale, Suez, Total, Unilever…… Domestic Companies • 25% of Euronext’s 1,300 companies are international • 7 companies from Israel

  6. Top ranked for raising fresh capital in the world Milestones: • € 17.2 bnfresh capital raised, 78 new listings in 2005… …continuing with € 13.6 bn raised, 101 new listings year-to-date 2006. • The world’s largest IPO 2005: EDF • An additional mkt cap of € 165 bn since Jan 2005 Selected Deals • Key market for raising capital • Highly active hi-tech segment • More privatisations than any other exchange

  7. Unique access to European asset managers • Geographical split of equity fund assets typifies wider European investment profile • Euro-zone countries dominate – 71.5% of total equity funds under management • Fragmented market – cross-border access is key • Best of both worlds: access to the Euro-zone… as well as UK based investors… > 40% of trading volume by UK based investment banks Outside €uro-zone 28.5% €uro-zone 71.5% Source: European Fund and Asset Management Association

  8. Listing requirements

  9. Listing requirements – overview

  10. Eurolist – the main board • One cross-border regulated market - one rule book • One single cross-border trading platform • Borderless: • Companies are classified in alphabetical order and identified on the basis of capitalization rather than on geographic location • Large caps (group A: > €1 billion) • Mid caps (group B: between €150 million and €1 billion) • Small caps (group C: less than €150 million) • Equal opportunity for international companies to join key indices

  11. Eurolist – key features • Language • English – fully accepted for entire listing process and documentation, including prospectus • Listing instruments • Shares • Depositary Receipts (EDR, GDR, ADR) • Corporate bonds • Derivative instruments, including Convertibles, Options, Warrants and Futures • Funds • Currency of listing • Euro - the world’s second most important currency • Or any other major currency • Regulatory environment – tailor-made for cross-border business • Sound regulatory framework – provides credibility • No Sarbanes Oxley regulation!

  12. Alternext the junior market

  13. Alternext – the junior market • Why Alternext? • More than 1m €uro-zone SMEs eligible… …but substantially fewer than 1% listed! • Alternext is an exchange-regulated market; • Designed for small and mid sized companies • Open for companies from all sectors and countries • Launched in France in May 2005, Belgium in June 2006, The Netherlands in Q4 2006 • Broad €uro-zone access • Same 4-country electronic trading platform for Eurolist and Alternext • Use of a Listing Sponsor is mandatory

  14. Alternext – key listing requirements • 2 year company track record (exempt for funds) • IFRS, US GAAP or local GAAP with IFRS reconciliation tables • Audited FY accounts, un-audited 6 months report • Market access: • Fast track dual listing through recognised market status • Access via offering circular for companies listed on another market • Ongoing obligations simplified

  15. Alternext – sector breakdown* Alternext has achieved its target as a broad marketplace for SMEs * number of companies - ICB (Industry Classification Benchmark)

  16. Alternext – size profile Alternext’s target company size of €20m - €250m achieved. No micro-caps… …better liquidity

  17. Alternext – market structure and liquidity Alternext today Alternext vs. AIM Source: Euronext & LSE - H1 2006

  18. Alternext: IPOs and investor base IPOs: • 80% institutional investor participation, underpinning valuations Investors: • Institutions from 14 countries • Broad continental European institutional take-up • Strong US-UK acceptance Alternext: Truly pan-European

  19. Case Study

  20. Alternext case study: Environnement SA • Environnement is the European leader in designing, manufacturing, and selling equipment and systems for air and water quality measurement and evaluation. Sales: France (83.2%), Italy (10.3%), and United States (6.5%). IPO - 19 January 2006: Valuation: € 57m Trailing PE ratio: 71 Funds raised: € 23m 11.8x oversubscription Current valuation: € 71m Key figures (2004): Revenues: € 30.5m Net profit: € 799,000 Value maintained at +25% after 9 months Bookrunner: Crédit du Nord

  21. Why Euronext?

  22. Why Euronext? • Gateway to the €uro-zone • Publicity: cross-border access to investors, customers & business partners • Acquisition currency: €uro – a key currency • Huge pool of assets under management • Single entry point gives broad European access for listing and trading • Leading cross-border exchange with a pan-European reach • Top-ranked globally for capital raising • Largest central order-book trading volumes in Europe • International companies can join local indices • Broad service offering for early stage and mature companies

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