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Letter from the Chairman

16

Annual Report 2014 BME

One of the leading markets in capital flows

The financial restructuring process continued in

2014, and corporate deleveraging and equity traded

instruments were increasingly popular financing alter-

natives. New financing flows or capital investment

totalled €36.1 billion, This Spanish equity market was

positioned second in Europe in this area, and eighth

in the world.

Thirteen companies carried out share placement

operations to raise funds (public offerings and initial

public offerings) compared to two in 2013. Of these,

11 launched initial public offerings (IPOs) prior to

joining the market, with all 13 raising financing of just

over €7.9 billion, 17 times the 2013 figure.

Non-resident investors are the main holders of

shares

Non-resident investors own over 40% of the shares

on the Spanish exchange, a record number and also

far higher than at the start of the crisis. We would

note that this figure has remained above 30% for

the past 20 years, an indication of the consolidation

of the Spanish economy and market on the interna-

tional stage. The strength and loyalty of foreign inves-

tors have brought greater stability to the exchange.

BME increases profits and dividends

In 2014, BME focused on reinforcing what we consider

our core mission, our reason for being: facilitating

transparent and efficient price formation that is fair

to all participants in our markets and helping fund

companies.

The company’s results are very satisfactory, despite

the challenging backdrop. BME reported net profit of

€164.9 million in 2014, 15.2% up on 2013. Revenue

was 11.3% higher year-on-year at €342.5 million. The

largest contributors to the increase in revenue and

profit for the year were the Equity, Information, IT and

Consulting, and Derivatives businesses.

Both the return on equity (ROE) and the operating

cost/income ratio (efficiency ratio) improved year-on-

year. ROE climbed 5 points during the year from 35.9%

to 40.9%, while the efficiency ratio improved by 2

points from 32.2% at the 2013 close to 30.2% in 2014.

BME maintains a sound dividend policy and this year

proposes a 15% increase in shareholder remunera-

tion to the General Shareholders’ Meeting; this is the

highest in themarket operators sector. This is possible

as a result of increasing the final dividend by 37%.

Largest number of listings in four years

The Spanish exchange saw 13 new companies joining

all its segments, with seven listing on the primary

market and six on the MAB. The year also saw the

addition of new SOCIMIS (REITs) valued at €2 billion.

These real estate investment trusts are yet another

traded product available to issuers and investors.

Households increase their investment in shares

Once again, households are the second largest

owners of shares, accounting for 27% of the total,

nearly seven percentage points higher than during

the 2007 crisis and the highest for 11 years. Economic

stability, the diverse range of investment products

and the remuneration policies of many companies

have all helped attract retail investors.