Euro Next

EURONEXT GATEWAY TO THE €URO ZONE

France

Holland

Belgium

Portugal

November 2005

Euronext today Europe’s largest central order book securities market • € 6.5 billion average daily turnover • € 9.4 billion fresh capital raised in 2004 and €15.6 billion YTD • Over 25% of listed companies are international The world’s second largest derivatives market • Business worth €1,000 billion traded every day • Extensive range of financial and commodity derivatives products A leading supplier of exchange trading technology • Used worldwide by most leading cash & derivatives Exchanges The world’s first cross-border exchange • Operations in 5 European countries and the USA

Source: Euronext 2

Euronext’s competitive position in Europe CENTRAL ORDER BOOK

MARKET CAP.

Trading value

European cash equity market capitalisation

(in billion €)

OMX Milan 6% SWX 8%

EURONEXT 25%

9%

Spanish Exchanges 10% DB 12%

LSE 29%

• Largest equity market in continental Europe • Largest central order book in Europe Sources: FESE, Euronext, as of Dec 2004

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Euronext – International Listings

Breakdown of listed companies International Co’s 25%

Selected international companies: Arcelor, Daiwa, Daimler Chrysler, Deutsche Bank, Exxon Mobil, Fiat, Ford, General Motors, General Electric, Hitachi, Honda, HSBC, McDonalds, Maroc Telecom,

Domestic Co’s 75 %

Mitsubishi Electric, NEC, SES Global, Sharp

7 Israeli companies listed 25% of Euronext’s 1300 companies are international 4

More capital raised than any other European exchange (in 2004) Milestones: •

Selected Deals

Euronext helped businesses raise €9.4 billion fresh capital in 2004

•

52 new listings

•

Europe’s largest IPO: Belgacom

€ 3,600 mn € 1,300 mn

€ 1,200 mn •

Cross-border successes: € 1,200 mn

- SES Global (Luxembourg) - Maroc Telecom (Morocco)

€ 507 mn

- Cimex Pharma (Switzerland) - Sacyr Vallehermoso (Spain) - Hammerson (UK) 5

Capital Media Group

€ 217 mn

Continued strong performance in 2005 Milestones: •

€15.6 billion fresh capital raised in 2005 YTD

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Selected Deals (capital raised)

•

57 new listings

•

The world’s largest IPO 2005: EDF

•

An additional Mkt cap of € 99 bn

•

Large listings in various sectors: -

Utility: EDF (€ 58.6 bn)

-

Energy: GDF (€ 22.6 bn)

-

Investment funds: RHJ Int’l (€1.53 bn)

-

Hi-tech: Tom Tom (€ 1.86 bn)

EDF

€ 7,000 mn

GDF

€ 3,482 mn

Telenet

€ 1,060 mn

Sanef

€ 837 mn

RHJ International

€ 657 mn

Tom Tom

€ 467 mn

Unique access to European asset managers • Geographical split of investment fund assets typifies wider European investment profile • Huge pool of AUM - € 4.2 Trillion • Good growth rates >10 % annually • Euro zone countries dominate – 85% of total AUM Total Net Assets of UCITS

Others (outside Euro zone) 7.3%

(in EUR billions)

4 500

Euronext 24.5%

UK 9.1%

4 000 3 500

4,186

3 000

3,763 2 500

3,327

2 000 1 500

Euro zone

1 000 500

Breakdown per area

0 2002

2003

2004

Source: European Fund and Asset Management Association 7

(excl. euronext) 59.1%

Unique access to European asset managers • Fragmented market – cross-border access is key • Euronext – gives London access and broad Eurozone entry The European Investment Fund Market

25.0% France

Luxembourg

20.0% Germany 15.0% UK 10.0%

Italy Spain

5.0%

0.0%

Austria

Netherlands Portugal Belgium

Switzerland Ireland Sweden

Source: European Fund and Asset Management Association 8

Other

EURONEXT ­ Listing requirements ­

Listing requirements – overview Market

Eurolist

Description

Regulated market for large, mid & small caps

Listings and on-going requirements * Minimum 25% shares distributed to the public * Three-year track record required * Recognised accounting standards or IFRS Ongoing obligations * Audited annual report and half-year report * Timely disclosure * Two-year track record * Recognised accounting standards

Alternext

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Exchange regulated market for mid & small companies

* On-going obligation less demanding

* Public offering or Private placement

Eurolist - the Main Board •

One single 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)

•

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Equal opportunity for international companies to join key indices

Eurolist - Flexible services for int’l companies  Language  English – or local Euronext language, at issuer’s wish  Listing instruments  Shares  Depositary Receipts (EDR, GDR, ADR)  Corporate bonds  Derivative instruments, including Convertibles, Options, Warrants and Futures  Currency  Euro - the world’s second most important currency  Or any other major currency  Accounting standards  IFRS – or any standard accepted by the regulator  Regulatory environment  Sound regulatory framework – provides credibility

 No Sarbanes Oxley regulation! 12

 Tailor-made for cross-border business (European Prospectus Directive)

Alternext – the Junior Market • Euronext launched Alternext on 17 May 2005 • Alternext is an exchange-regulated market • Designed for small and mid-cap companies • Easy, cost-effective access to the capital markets • Compliance with investor disclosure rules • Open for companies from all sectors

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Alternext - addressing a clear need •

Small and mid caps play an active and important role in the euro-zone: • > 1 million small and mid-sized firms*….. • …..nearly 30% of which are located in the Euronext countries • 32 million employees - 38% of total value added Less than 1% of small and mid-sized companies are listed at present! •

A tougher European regulatory environment restricts access for small and mid-caps, but Alternext provides an effective alternative. (*) fewer than 250 employees and sales below €50 million

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Alternext to date • Current market cap:

€ 657m

• Mkt cap (at issue price): € 593m • Mkt perf. since launch:

+ 11%

• No. listed companies:

16

• Average size: • Average deal size: 15

18 Nov. •05 No.

Listing Sponsors:

€ 37 m € 7.2 m 28

Alternext: Easy access for listing applicants

•

The decision to go public must be made by the company's managing body

•

Listing requirements are simple Applicants need only: • appoint a listing sponsor • submit the last two years' financial statements (IFRS not mandatory…..but recognised accounting standards offer investor comfort)

•

Two procedures can be used: • listing with a public offer • direct listing without public offer

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Option 1: Listing with public offer • A “traditional” listing procedure tailored to SMEs: • Minimum free float: €2.5 million • The prospectus approved by the regulator • EU Prospectus Directive facilitates cross- border offerings • Public offering allows for broad marketing campaign • Builds better market liquidity

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Option 2: Direct listing without public offer • An innovative listing process – with less stringent requirements • Companies must have made a private placement with qualified investors: • within two years prior of the listing application • placing at least €5 million • five or more qualified investors • Companies must publish an offering circular, which is not reviewed by the regulator, but under the responsibility of the Listing Sponsor and the Issuer • Easy access…but it does not create real liquidity 18

The role of the Listing sponsors •

Mandatory assistance by a Euronext-recognised and approved intermediary

•

The listing sponsor plays two main roles as the company's longterm partner: • helps and advises the applicant to prepare for an Alternext listing including preparing the prospectus or information memorandum • supports and guides the issuer throughout its life as a listed company, reminding it of disclosure requirements (initially for at least a 2 year period)

•

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The listing sponsor makes a contractual commitment to Euronext to ensure that listed companies meet their disclosure requirements.

EURONEXT ­ Case Studies ­

Eurolist case study: TOM TOM N.V. Activity: TomTom is a leading provider of personal navigation products and services to the consumer mass market. TomTom products include integrated devices, which enable to navigate right out of the box (e.g. screen in car) and non-integrated solutions for navigation on third-party devices like PDAs and smartphones. Deal size (June 05):

Key figures (2004):

Valuation: € 1,857 mn

Revenues: € 192.4 mn

PE ratio: x67

Net profit: € 27.7 mn

Funds raised: € 467 mn (of which capital increase of € 124 mn) Goldman Sachs International and Lehman Brothers acted as joint leads.

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Eurolist case study: TOM TOM N.V. Share Allocation Allocation by Geography

Germany Switz . 7% 8% Sweden 3% France 7%

Allocation by Style

Private Banks O the r 4% 2% He dge Funds 31%

UK 35%

Italy 8%

Re tail 0.3%

USA 20%

Long only Funds 63%

Holland O the r 6% 6%

1 22

Eurolist case study: TOM TOM N.V.

• Share price performance 6 months: + 68% • Free float: 29% • Trading activity (daily average): € 18.7 million • Index inclusion: EURONEXT150 23

Alternext case study: SATIMO Activity: • Satimo specializes in designing, manufacturing, and marketing multi-sensor electronic scanning systems for real-time viewing of electromagnetic wave fields. • Sales by segment: radio communications (77.9%), automotive (9.5%), • Global sales: France (16.3%), Europe (24.6%), Asia (35.9%), and US (23.2%).

Deal Size (28 June 05): Valuation: € 44m PE ratio: x37 Funds raised: € 12.9m 5.8 times over-subscription Broad take up among institutional investors, incl. 30% placed in the UK 24

Key figures (2004): Revenues: € 8.9m Net profit: € 1.2m Profit growth rate: 100% Listing Sponsor: Avenir Finance Corporate Placing agent: Ixis Midcaps

Alternext case study: SATIMO Market Cap. Evolution

55

60 50

44

+ 25%

• Current valuation of € 55m • Value increased by 25% in 6 months

40 In million Euros

Market figures

30

• Issue price: € 17.77 20

• Current share price: € 22

10

• Free float: 29%

0 June 05

Nov. 05

Philippe Garreau, Chairman & CEO of Satimo, commented: “We are delighted with the success of the IPO. Through the IPO we have acquired a strong notoriety to further expand our business.” 25

EURONEXT ­ Why chose Euronext ­

Why join the Euronext markets?  Gateway to the €urozone • Publicity: 453 million consumers • Huge pool of assets under management • Euro – key currency

 Leading European exchange with a pan-European reach • Top-ranked in raising fresh capital

 Excellent market liquidity • Largest central order book trading in Europe

 An exchange without borders • Truly cross-border • International companies can join local indices

 A recognised marketplace • Sound regulatory framework • Enhancing company’s profile to international standards 27

Need more information? Please contact us:

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•

Ms. Martine CHARBONNIER Executive Director – Listing & Issuer Relations Phone: +33.1.49.27.16.08 Email: [email protected]

•

Mr. Erik WENNGREN Director - International Listings Phone: +44.20.7379.2087 Email: [email protected]

•

Mr. Nathanaël MAUCLAIR Deputy Director - International Listings Phone: +33 1.49.27.53.72 Email: [email protected] www.euronext.com/listing

www.euronext.com

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Back-up Slides

Appropriate disclosure requirements and lower communication costs Financial transparency requirements • tailored to small and mid caps • choice of disclosure channel • no quarterly turnover disclosure required • address investors' needs for information The applicant commits to: • make periodic disclosures: half-yearly accounts and audited annual accounts • make ongoing disclosure of price sensitive information • report directors' trades • publish change of ownership at specific threshold (50% and 95%) since it may affect company strategy 31

Hybrid trading model – enhanced liquidity A model to take into account specific liquidity profiles: • The aim is to enhance liquidity in stocks with a smaller free float • The market model combines central order book (one auction at end of day) and continuous market making to favour liquidity • Market makers will select stocks and compete to offer best price • Continuous trading by market makers • For stocks without market makers, the auction ensures a daily reference price • Investors can choose how their orders are to be executed

 The trading session is organised to favour the most efficient price execution 32