PRESS RELEASE

Paris, March 17, 2014 - 8:00 a.m.

2013 Results Good resilience New ambitions for the period to 2016

The Board of Directors of ABC arbitrage led by the Chairman, Dominique Ceolin, met on March 13 to approve the consolidated financial statements for 2013. Financial highlights for the year were as follows:

In EUR millions

Dec. 31, 2013 IFRS

Dec. 31, 2012 IFRS

Change

Net revenues *

€28.8M

€53.0M

(46)%

Income before tax

€14.3M

€35.9M

(60)%

Net income

€10.1M

€24.3M

(59)%

Earnings per share (EPS)

€0.19

€0.47

(60)%

*Net gains on derivative financial instruments measured at fair value through profit or loss (€28.6 million) + net provision reversals (€0.2 million).

Business performance

IFRS net income came to €10.1m for 2013, after a negative fair value adjustment to the securities portfolio required under IAS 39, which reduced net revenues by €8.9m. This adjustment will be absorbed when the relevant arbitrage transactions are unwound. Excluding the fair value adjustment, net revenues were down only 12% in 2013, a good performance given the unfavourable impact on our strategies of last year's market conditions.
Massive intervention by the central banks had a structural impact on market behaviour and risk profiles, making transactions more complex to evaluate. In addition, an increased tax burden and new regulatory requirements forced us to adapt continuously to make up for the resulting significant opportunity losses.
Fee income generated by the asset management business fell by 22% over the year to €4.8m, while assets under management stood at €253m at 1 March 2014.
In 2013, faced with this radical change in the markets, we laid the foundations for a new growth plan, Ambition 2016, which aims to deliver an aggregate €90m of net income over the period 2014 to 2016. There are four main pillars to the plan:
- Staff: integrate some ten new people, mainly quantitative researchers and IT developers, either junior or more experienced.
- Geographical expansion: expand internationally to preserve our competitiveness and meet both the needs of our financial partners and regulatory requirements. A new Irish company, Quartys, was set-up in December 2013 and we expect to complete a project in Singapore during 2014.
- Innovation: continue to invest to support ongoing development of the Group's expertise.
- Asset management: develop a range of diversified investment funds and rebuild assets under management to over €400m.
We expect to see an increase in fixed costs in 2014 stemming mainly from an adjustment to employee compensation levels to ensure that we remain competitive as an employer, coupled with the cost of implementing the new plan.

Dividend policy

The Board will recommend a dividend of €0.20 per share at the annual shareholders' meeting on 23 May 2014. Shareholders will be given the option of reinvesting all or part of their dividend in ABC arbitrage shares. The dividend payment procedure and date will be announced at a later date. The dividend is in addition to the €0.20 distribution paid in December 2013. If approved by the shareholders, the full distribution for 2013 will therefore amount to €0.40 per share, giving a net yield of 8.5% based on the share price at December 31, 2013 (€4.72).

Outlook

Activity levels in the first quarter of 2014 are significantly up compared with the prior-year period, driven mainly by the ramp-up of new strategies and a short-lived recovery in volatility in late January to early February.
Ambition 2016 aims to rebuild business momentum in alignment with the new market paradigm. Dominique Ceolin commented: "While not completely freeing us from the economic environment, Ambition 2016 will enable us to capitalise fully on future opportunities. The Group plans to consolidate its position as a leading player in alternative investment, recognised for its high- quality performance, with a focus on profitability and value creation."

To watch the video interview (French version) of Dominique Ceolin, Chairman and Chief Executive Officer of ABC arbitrage, discussing these results, please click hereor visit http://www.abc-arbitrage.com/, on the home page and in the Finance and Press/Multimedia sections.

Contact:

Head of communication - Julien Aumont: +33 (0)1 53 00 55 00 / Email: actionnaires@abc-arbitrage.com

PR - VS E-MEDIA - Valérie Sabineu: +33 6 61 61 76 73

More information: www.abc-arbitrage.comand click on "Finance".

EURONEXT Paris - Compartment B

ISIN Code: FR0004040608

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