Bursa de Valori Bucuresti SA (BVB) Earnings Call Transcript & Summary

Hello, and welcome to the Bucharest Stock Exchange presentation of the financial results for the first half of 2026. During today's presentation, the participants from Bucharest Stock Exchange will be Mr. Razvan Szilagyi, our CFO; Ms. Cristina Radulescu, our Controlling -- Financial Controlling Manager; myself, managing their Investor Relations. And later, will participate also our CEO, Mr. Remus Vulpescu. Now I will give the floor for Razvan to share an overview for the first half of 2026 and the second quarter of this year. Thank you.

Thank you, Alex. Good afternoon, everyone, and thank you very much for joining us. I will provide you a brief story, let's say, of the financial results at the mid-2026. I want to start by saying a few words about the context. I think that Bucharest Stock Exchange is going through one of the best periods of its entire history. And of course, I'm not speaking only about the market performance, which are -- which I'm sure that all of you are aware, but also other things that in my opinion are important from a structural perspective, yes, because the market growth, I think it's maybe also a result of some long-term trends that we have seen so far. So we are speaking about an increased number of retail investors trading on the BVB, also a high number of retail investors investing through mutual funds or other investment instruments. So I think that there are a number of planets that are aligned and that are supporting the market performance also. So this is good news for us because we have seen in the last 6 to 9 months a sustainable increase in the trading volumes. Historically speaking, we have seen some steps and therefore, we are confident that this is a new step following the one that came along with the introduction of Hidroelectrica when Hidroelectrica was listed. We are now seeing trading volumes at a new step and we believe that this is sustainable on the long run. Of course, good market performance came with higher market cap we have on the regulated market cap that is now over RON 70 billion, which I think is amazing. And this had a positive impact on the group results, but also at the individual level. A few comments from the figures perspective. As you know, in our group, there are 3 companies. We have Bucharest Stock Exchange, which is the trading venue. We have Depozitarul Central, which is offering post trading and registry services and also CCP, the clearing counterparty. I will mention a few things about each of them. So the consolidated profit is roughly in round figures RON 14 million, which is split by segments as follows. We have the Bucharest Stock Exchange, which is almost RON 12 million. Then we have the central depository, which is almost RON 11 million and we CCP.RO, which is minus RON 9 million. On BVB, the result is mostly correlated with trading volumes and I spoke a bit earlier about the context, increased volumes, increased fees and we have very good performance result. So trading fees on one side, but I would mention for the other revenue streams, including market data, which had also a very nice contribution and a very nice growth. For central depository, the same I would say that at least a significant part of the revenues are related also with the volume of transactions but also related to the new prices because it's depending on the volume of the holdings. But anyhow a positive again sustained by the market. On CCP, we still have a negative result as CCP is not generating revenues so far. But here, we have good news because as you probably know, CCP got the authorization for the -- from the relevant authorities and now it's in the operationalization stage. So in brief, a very good period for the group and also for the individual companies. I would say good news on the all 3 of them. We hope that, yes, things will remain positive also from now.

Thank you, Razvan. We will also share a presentation to go even deeper into the details of the first semester of 2026. I will share it with you right now. Okay. Just an overview on the share price. So because of the rally that happened with the Bucharest Stock Exchange share price, over a medium term of 5 years, BVB stock has overpassed a benchmark that we consider to be relevant for comparing the performance of BVB stock. That is BET Benchmark Index, a relevant index for the mutual funds industry in Romania. Over the last 5 years, because of the rebound in the BVB stock, the performance has been of 182%. So again, this is over a period of 5 years. And the information there is presented only at the end of June 2026 because currently, the price -- the share price of BVB is trading around RON 90 per share. And the performance over the last year is close to 130%. So this is the performance over the last year. In terms of our shareholding structure, we have a very stable shareholding structure with mostly Romanian legal entities, of course, as well as Romanian private individuals. Foreign investors are present in our shareholding structure as well. In terms of price earnings, based on the latest financial results published today, we are currently sitting -- based on the price as of June 2026, we are currently sitting at price earnings of 22. I will go into the next slide. Okay. Just an overview in terms of trading value. So including equity-like instruments in the second quarter of 2026, the turnover has been 38% higher than the second quarter of 2025. In terms of regulated market, regular-only transactions, we had a similar performance. So regular transactions have averaged 37% higher than the second quarter of last year. In terms of fixed income, also we had an increase of 15%. Main market offers have contributed to the positive result of this quarter as well with an increase of 14%. And in terms of the AeRO market, we had a very nice increase in the turnover of 140% during the quarter based on increased turnover. Some other figures would be that during the second quarter, we had a total market liquidity of RON 12 billion, that is 18% higher year-over-year. In terms of the equity turnover, this -- the figure sits close to RON 6 billion with an increase of 29% year-over-year. The number of trades has increased as well, more than 35% to a figure of 800,000 transactions during the quarter. As you know, BET Index continued its rally. And as of the end of June 2026, its performance is of 33% year-to-date. We have looked at it, and this is the best performance in the last 22 years. So the first semester was the best over the last 22 years at BVB in terms of stock index performance. Also, as Razvan mentioned, we are currently sitting with a total market capitalization bigger than RON 700 billion, which is a very nice development over the market. In terms of financing that happened during the quarter, we had the IPO and listing of Christian Tour, an IPO of RON 149 million that is close to $30 million. The Ministry of Finance has continued its Fidelis government bond issuances. We also had a new ETF coming to the market, the first ETF of the Banca Transilvania Group, which ended the quarter with net assets of RON 250 million and more than 10,000 investors. We also had a debut on the bond issuance market of Vista Bank with an offering of EUR 17 million. And later into the quarter, we also had the listing of IT Genetics, an IT company that listed on the AeRO market for SMEs. In terms of strategic developments, as was mentioned before, and as I'm sure that you already know, CCP.RO Bucharest has been authorized on the 1st of July by the FSA. It is now in the process of being operationalized. And there are currently preparations ongoing for this readiness. Another aspect that we believe is worth mentioning, the net assets of the ETFs listed on BVB that track the BVB indices has passed the RON 2 billion mark for the first time in the last quarter. On the corporate governance side, BVB has published its first aggregated issuer-monitoring report under the revised corporate governance code. In terms of the stock dividend that has been issued and approved by the shareholders of BVB in amount of RON 7.97 million. The free shares have been distributed at the end of June. Overall assessment. The second quarter performance reflected a sustained investor participation in the market and a broad range of financing activities that happened through BVB. Some details about the third quarter that has already started. Based on the latest publication from the compensation fund, we are now sitting with a number of direct investors at BVB of 325,000 investors. This is up 24% year-over-year. And if we look over a period of 5 years, that number is 4x higher. In terms of the month of July, we also had a record because in terms of the secondary market liquidity, this has been the best month in the history of BVB. So except offerings, except IPOs, July 2026 has been the best in BVB's history. We also had the recent bond issue of BCR, more than RON 1 billion. And another transaction that already happened in the market where this is a strategic takeover of Biofarm, a large issuer on the regulated market. The value of the transaction has been more than RON 1.2 billion. The Fidelis government bonds will continue on a monthly basis. We also have a few listings of smaller issuers. We had Graffiti Plus that listed on AeRO. And we also had sustainability-linked bonds of Autonom close to EUR 30 million that happened. Moving to CCP.RO Bucharest again in terms of the third quarter and until the end of the year. The next steps are aimed at operational readiness, as already has been mentioned, including testing together with the participants in order to launch -- for BVB to launch the derivatives market. The launch remains on track for 2026 with the first derivatives trades by year-end. The initial phase is expected to involve a limited number of participants with markets progressing through their customer launch and development stages once CCP.RO Bucharest production environment becomes operational and an adequate number of clearing members has been onboarded. Now I will give the floor to Cristina Radulescu to present the financials for the second quarter and the first semester.

Thank you, Alex. Hello, everyone. A few highlights on the second quarter of 2026. In terms of operating revenues, we continued the increase started in the previous quarter with a 27% increase in operating revenues at individual level driven by intense trading activity as we already mentioned and public offers carried out. This was also supported by the development on issuer fees and market data revenues. At the level of trading and registry segment, the increase is also continued with 28% increase compared with the quarter of the previous year. Regarding operating expenses, this increased 4% at individual level and 8% at group level and mainly reflected the impact of the new hires and share options and accruals. While the advance is at slower pace, taking in consideration that CCP cost reached constant level. Operational performance improved significantly compared with the previous period and are driven mainly by the development on operating revenues on both individual and group level. Positive development in financial result also, which is driven by the dividend income from central depository recorded at the individual level of RON 5 million and of RON 2 million interest income recorded at group level. Strong increase in the bottom line with net profit rising 3x in Q2 2026 at individual level and 147% at group level compared with Q2 2025. Moving on the financial performance for the first half of 2026. At individual level, operating revenues increased significantly to RON 28.7 million, 61% increase compared with the previous period and are ultimately influenced by the trading revenues, which increased 88% compared with previous year. And this is a result of the favorable market evolution which was reflected on trading volumes, new funding rounds and high investor interest. The growth is also -- okay, now moving on to operating expenses for the first half of 2026 are in amount of RON 15.4 million, 8% increase and are determined by the increase in personnel costs having in mind the base effect of a reduced level in the first half of 2025. We will enter in detail in the next slides. Operating profit reaches RON 13.3 million, which is almost 4x higher compared with the previous period of 2025 with an operating margin of 46%. Financial result at individual level reaches RON 5.9 million and is mainly represented by the dividend income received from central depository and base effect on the development comes from the impairment loss recorded in the previous period. At the date of this report, we have no additional information that could generate material changes in the recoverable value of CCP compared with the one presented in the year end financial statement 2025. Net profitability in the first half of 2026 reaches RON 17 million, which is the best first semester recorded here at BVB. Moving on at the consolidated results. For the first half of 2026, operating revenues reached almost RON 55 million, an advance of 48% compared with previous year, driven by trading segment, but also with good support from the post-trading and registry segments based on the increase in capitalization of the companies listed at BVB and which are part of the portfolio managed by the participants at the central depository and the volumes of the operations performed. In terms of operating expenses, this reached the amount of RON 41.3 million, 10% increase compared with previous period and are determined by the increase in personnel cost at group level. Operating profit reaches RON 13.7 million compared with a loss of RON 0.5 million in the previous period directly impacted by the favorable evolution of operating revenues. Net profit at group level reaches RON 13.8 million, a significant increase compared with the previous period. Regarding the performance on segments, trading segment represents 56% of operating revenues and out of which 75% represent trading revenues. Post-trading was the most trending segment represents 34% of the group operating revenues and reaches almost RON 19 million in the first half of 2026, which is a 45% increase. Registry segment also recorded an increase of 16% up to RON 7.8 million. CCP for now did not record any operating revenue, but has been authorized and continues its process for operationalization, which is estimated for the second part of 2026. A few details on operating expenses at the individual level. And I mentioned the increase of 8% is mostly generated by the increase in personnel cost with the base effect from the new hires performed in the second part of 2025 and also by the salary adjustments performed in April 2025, while in 2026 recorded -- were implemented in June. But also another driver of the increase is that we recorded accruals for the share option plan and performance bonuses, while in the previous period these were very low taking in consideration the performance recorded. At group level, the consolidated expenses increase is due to personnel expenses of almost RON 22 million, 19% increase due to the completion of the personnel scheme, which started in 2025 in order to meet the authorization requirement in case of CCP but also to cover the operation at BVB level. And also the increase is of salary adjustments and bonus accruals were also the cause from the -- for the increase at group level of operating expenses. Third-party services reached the value of RON 7 million. There is an increase of 9% and they are represently -- represent a percent of 61% clearing system management services and SWIFT services recorded mostly at CCP. Other operating expenses reached a value of RON 12.4 million, an increase of 7% and are mainly influenced by the higher amortization and depreciation expenses due to the investments performed at clearing and software development and IT infrastructure. Regarding the financial position at the end of first semester of 2026. Main variations come from the liquidities obtained by BVB in its share capital increase performed at the beginning of 2026, which attracted funds of almost RON 16 million but also by the liquidities generated by the increase in operational activity. One mention is that although the distribution of free shares and approval from the financial supervisory authority came at the end of June, the trade registers recorded the increase of share capital in July. The date was recognized in the financial books of BVB. At group level, the impact of the increase in liquidities is also from the BVB also carried out. Also, there is an increase in noncurrent assets of 18%, and it is mainly due to the increase in government securities on long term and the intangible assets higher by RON 3.7 million generated by the license and development expenses related to the clearing system. In terms of liabilities, total liabilities reached RON 65.5 million, 16% increase and mainly due to the increase in the variable contributions to the guarantee fund from the central depository and the deferred income related to the issuers trading maintain fees and participant fees charge for the entire year. We already mentioned about the fact that the free shares were already distributed. I only add the fact that on July 9, the fractions resulted from this distribution were paid. Thank you.

Thank you again, Christina, for sharing the remarks in terms of the financial results. We will now give the floor to Mr. Vulpescu, our CEO, to share his remarks. He will also be available for the Q&A session.

Thank you, Alex. Hello, everyone. Glad to meet again. We are delighted indeed by the tremendous performance that we have recorded as a stand-alone issuer and also as a group. This is, of course, due to positive developments in Romania, also politically, and we are very delighted to have seen the ratings of Romania maintained by 2 out of 3 rating agencies and the third report that is yet to come, we surely hope will be at least equally positive as the first 2. The basis of the development of the capital market includes, of course, the fiscal consolidation that is being carried on by the Ministry of Finance and the government of Romania. We are confident that the positive political developments will occur soon, so in terms of a new government being appointed. So we surely hope to be able to maximize the benefits of the positive developments around Romania in Europe and even beyond. For the architecture of the capital market, we have indeed reached the milestone of receiving the authorization for the central counterparty. Now the launch of operations is a process in itself. And BVB as an issuer will report on a continuous basis every time significant event will occur in this process. So we can only announce good news so far, delighted to. And also, we are looking around and beyond Romania for signs of developments that may impact also the Romanian capital market. Available for questions as well together with my colleagues. And thank you for your time.