Gielda Papierow Wartosciowych W Warszawie S.a. · GPW:GPW

Gielda Papierow Wartosciowych W Warszawie — Warsaw Stock Exchange Group (GPW) — Investor Presentation (December 2021)

61 slides from Gielda Papierow Wartosciowych W Warszawie's investor presentation, December 2021

  1. Slide 1: Warsaw Stock Exchange Group Investor Presentation

    Warsaw Stock Exchange Group Investor Presentation December 2021

  2. Slide 2: Agenda

    I. About the GPW Group 3 II. Business activity in Q3 2021 8 III. Market highlights and opportunities 13 IV. GPW Group financial results in Q3 2021 36 V. Appendices 47

  3. Slide 3: History of GPW and future progress

    History of GPW and future progress FTSE Russel decision about promotion GPW aquires Poland to Developed Implementation Aquis Exchange Markets of strategy Launch of GPW Launch of NewConnect shares Launch of X-Stream derivatives Launch of UTP (GPW alternative debut on Trading and SAPRI market trading

  4. Slide 4: Key highlights of GPW

    Key highlights of GPW ESG Diversified business profile Strongly committed to ESG Core Exchange related and IT services; Attractive with WIG ESG index and ESG Guidelines dividend (6.1% DY 2022e). for issuers (May 2021). One of the EU’s most dynamic IPO Operator of Central and Eastern venues, and CEE

  5. Slide 5: Attractive investment opportunity amongst peers

    Attractive investement opportunity amongs peers One of the highest dividend yield among peers Price to Equity for 2021e 9,0% 45,0 8,0% 40,0 Dividend Yield 2022e (%)* 7,0% 6,3% 35,0 P/E 2021e 6,0% 30,0 5,0% 25,0 4,0% 20,0 3,0% 15,0 11,3 2,0% 10,0 1,0% 5,0 0,0% 0,0 EV to EBITDA for 2021e Market multip

  6. Slide 6: ESG: Environmental, Social, Governance factors

    ESG: Environmental, Social, Governance factors GPW as a public company: ➢ We are preparing for ESG reporting ➢ We are developing long-term ESG actions in line with top international ESG standards, regulations and guidelines, which is what the investors expect Rozwój kompetencji ESG GPW as a trade or

  7. Slide 7: Agenda

    I. About the GPW Group 3 II. Business activity in Q3 2021 8 III. Market highlights and opportunities 13 IV. GPW Group financial results in Q3 2021 36 V. Appendices 47

  8. Slide 8: Financial results

    Financial results Sales revenue Operating expenses  Sales revenue PLN mn +4.3% C/I 55.6% 56.3% 52.3% Increase of revenue in Q3’21 by 1.8% YoY to PLN 54.5% 51.9% 90.6 mn driven by YoY increase of revenue on the 300.1 287.6 commodity market combined with lower revenue +10.6% on the financial market.

  9. Slide 9: Investor activity on the cash market

    Investor activity on the cash market Main Market EOB turnover value 102,8  Main Market EOB turnover value: PLN 60.8 bn in Q3’21 93,7 90 ,0% EOB Trading Turnover velocity (-3.5% YoY, -18.8% QoQ) 10 0 80 ,0% 74,9 70,3 76,8%  New Connect EOB turnover value: PLN 0.9 bn in Q3’21 70 ,0% 80 PLN bn 63,0 6

  10. Slide 10: Activity on the derivatives market

    Activity on the derivatives market Derivatives turnover volume mn  Derivatives turnover total volume: 2.7 mn +14.2% instruments in Q3’21 (+14.2% YoY, -4.1% 3.3 QoQ) 3.1 3.1 2.7 2.8 2.7 -4.1% ✓ WIG20 futures turnover volume in 2.3 2.0 Q3’21: 1.1 mn futures (-6.1% YoY, 1.7 1.6 1.7 -18.8% QoQ) ✓ singl

  11. Slide 11: Commodity market turnover in Q3'21

    Commodity market turnover in Q3’21 Electricity and gas spot and forward turnover volume  Electricity market – Total electricity turnover volume in Q3’21 was 62.2 TWh (+17.4% YoY, +16.5% QoQ). Electricity(TWh) Natural Gas (TWh) ✓ The spot turnover volume was 9.5 TWh (+12.8% YoY, +10.1% QoQ). 64,2 60

  12. Slide 12: Agenda

    I. About the GPW Group 3 II. Business activity in Q3 2021 8 III. Market highlights and opportunities 13 IV. GPW Group financial results in Q3 2021 36 V. Appendices 47

  13. Slide 13: Our market highlights and opportunities

    Our market highlights and opportunities 1 Solid financial performance and attractive dividend, Strategy #GPW2022 2 Diversified revenue structure 3 The largest CEE economy and growth leader in EU 4 Large and still growing client base 5 Potential for further growth in free float and liquidity in finan

  14. Slide 14: Sound financial performance

    1 Sound financial performance Solid top-line growth High EBITDA margin Total revenue, PLN mn EBITDA, PLN mn EBITDA margin, % 61.1% 58.2% 57.5% 55.5% 54.9% 54.4% 55.6% CAGR 51.8% 51.1% 50.7% 47.1%48.1% +6.6% 403.8 224.6 352.0 346.8 336.1 212.2 202.0 317.6 327.9 310.9 180.2 183.7 193.2 268.8 273.8 283

  15. Slide 15: Ambitious financial targets

    1 Ambitious financial targets GPW Group financial targets for 2022 Revenue • PLN 470 mn in 2022 EBITDA • PLN 250 mn in 2022 • ROE: 19% in 2022 (it may temporarily fall below 19% due to strategy ROE implementation expenditures) • C/I under 50% after 2022 (it may temporarily range from 63% to 55% due

  16. Slide 16: Strategy update #GPW2022 (strategic initiatives)

    1 Strategy update #GPW2022 (strategic initiatives) GK Group Stock Market Information offer for Debt Market Derivatives Derivatives Market Commodity Market Information investors and New business lines Stock Market Debt Market Commodity Market Market Products issuers Securities BondSpot Derivatives Or

  17. Slide 17: Attractive dividend policy

    1 Attractive dividend policy Dividend yield3 6.1% 3.8% 2.0% 3.2% 4.9% 6.7% 4.4% 5.8% 7.4% 5.5% 5.2% 1 2 Dividend per share (PLN) Dividend payout ratio (%) 142.3% 77.1% 89.9% 93.2% 80.1% 63.3% 77.3% 70.7% 45.2% 44.5% 3.20 31.0% 3.18 2.40 2.36 2.15 2.20 2.40 2.50 1.40 1.20 0.80 2010 2011 2012 2013 201

  18. Slide 18: Wide range of product and services

    2 Wide range of product and services GPW Group Trading Market Post-trading Listing including COR1 and data Equities & Commodities RGO2 Membership Derivatives Bonds other  Equities  Access and use  Equities  Futures:  Corporate  Electricity spot  Settlement  Real-time of GPW trading  Structu

  19. Slide 19: Largest economy in the CEE region

    3 Largest economy in the CEE region… Largest economy in CEE And 7th largest economy in the EU (including UK) Nominal GDP in 2020 (EUR bn) Population (mn) Nominal GDP in 2020 (EUR bn) Poland 580 38,4 Germany 3780 Austria 433 UK 2638 8,9 Romania 249 France 2551 Czech Rep. 242 19,6 Hungary 150 Italy 18

  20. Slide 20: A leader of economic growth in EU

    3 … a leader of economic growth in EU Polish economy forecast to bounceback strongly Poland’s credit ratings A2 A- A-  Poland’s GDP to grow by 4.9% in 2022 - according outlook outlook outlook stable stable stable to the PAP Biznes survey (Polish Press Agency Business Unit)  Inflation +5.7% in 2021

  21. Slide 21: Potential for retail investment growth

    4 Potential for retail investment growth Poles’ savings (%)1 Household assets 1 (PLN bn) Investment Funds Deposits and cash Other 1 699 Insurance Cash 8% 1 483 4% 18% Equities 1 346 Debt securities 2 5% 1 270 1 193 Loans3 3% 1% 1 042 999 1 303 919 850 1 130 792 752 936 1 030 688 899 11% 607 614 59%

  22. Slide 22: Strong domestic institutional investor base

    4 Strong domestic institutional investor base Open Pension Funds1 Investment funds in Poland2 OPF’s share in GPW turnover Capital Market funds, assets PLN bn OPF’s share in GPW free float Non-public funds, assets PLN bn 311 279 281 43.1 41.8 43.1 43.0 43.0 41.5 42.4 43.0 44.0 44.5 259 257 268 252 38

  23. Slide 23: Advantageous mix of investors on GPW

    4 Advantageous mix of investors on GPW Share of investors in trade in shares on the Main Market (%) Share of investors in trade on the futures market (%) institutional individual foreign institutional individual foreign 25 19 21 34 31 29 33 37 30 35 35 38 38 37 38 36 36 37 12 12 25 24 13 16 15 13 12

  24. Slide 24: New services: commodity market and non-display data

    4 New services: commodity market and non- display data  Offer of state-of-the art innovative services Broad reach thanks to growing numbers of clients supporting analyses of market data and investing as an important pillar of GPW Group’s growth. 437,0 397,0  Developing GPW Data: ✓ The GPW Data pro

  25. Slide 25: Diversified issuers portfolio

    5 Diversified issuers portfolio Issuer activity on GPW markets1 Number of listed companies Equity market Main Market NewConnect Main Market Market cap: 379 domestic companies PLN 683 bn 47 foreign issuers PLN 621 bn Equity market for SME 438 450 471 487 487 482 NewConnect 465 449 432 426 426 367 dom

  26. Slide 26: Strong position of NewConnect on the European SME scene

    5 Strong position of NewConnect on the European SME scene NewConnect is third amongst European SME markets in terms of the number of listings 819  GPW is constantly working on strengthening Number of listed companies at the end of 2020 the credibility and quality of the market, 412 374 through for

  27. Slide 27: Opportunities for further debt market development

    5 Opportunities for further debt market development Number of non-Treasury issues on Catalyst Total debt securities by residence of issuer as % of GDP1 566 525 527 512 487 496 481 220% 455 195 408 325 125 108 208 98 91 66 57 97 49 50 52 55 34 35 9 10 12 13 17 2 3 4 5 Lithuania Poland Austria France

  28. Slide 28: Employee Capital Plans (ECP)

    6 Employee Capital Plans (ECP) 1st pillar (obligatory) 2nd pillar (obligatory since 2013 3rd pilllar (voluntary) r., now optional) Employee Pension Plans (PPE) IKE IKZE ZUS (social security) OFE (OPF - Employee Open Pension Capital Funds) Plans (PPK) public funds private funds ❑ Employee Capital Pla

  29. Slide 29: Employee Capital Plans (ECP) / PPK

    6 Employee Capital Plans (ECP) / PPK PPK AuM have crossed tha mark of PLN 7.1 bn Equities/debt share in total assets 8 000 000 Time left to the defined date (reaching 60 years Equities Debt 7 000 000 old) Assets under management PPK (PLN mn) 6 000 000 >20 years 60-80% 20-40% 5 000 000 11-20 years 40

  30. Slide 30: Estimated yearly inflows into PPK

    6 Estimated yearly inflows into PPK(PLN bn) Estimated inflows into Polish equity market Assumptions: 1. Participation rate, graduał increase: 2022 (20%) - 2030 (35%)* 2. Average contribution rate: 3.5% 3. Average wage increase (annualy): 4%, 4. Average monthly gross salary: PLN 5167,47 5. Annual sub

  31. Slide 31: Commodity market

    7 Commodity market Commodity market growth drivers  Lunch of Agricultural Market – wheat, corn and rye grains trading.  Organised Trading Facility (OTF) - transformation of TGE’s forward commodity market into an organised trading facility (OTF) under MiFID II  On 19 November 2019, Towarowa Giełda

  32. Slide 32: Agricultural Market: a new business pillar

    7 Agricultural Market: a new business pillar Summary  The Agricultural Market includes around 50 authorised warehouses (28 in authorisation proces) and 3 authorised brokers (Noble DM, DM BOŚ, PGE DM)  GPW Group offers trade in standarised wheat, corn and rye grains  The total turnover in 2020 was

  33. Slide 33: TGE's and other European markets

    7 TGE’s and other European markets TGE’s offering stands out among other exchanges in Europe because of its comprehensiveness and wide range of products and services available under one roof. 33

  34. Slide 34: Poland's Promotion to Developed Markets

    8 Poland’s Promotion to Developed Markets: Success of Poland’s Economy and Capital Market Aids classification of Poland amongst the 25 Highly appreciated Polish capital market… Developed Markets…  Well-developed and stable market infrastructure  Broad selection of listed stocks and high liquidity

  35. Slide 35: Agenda

    I. About the GPW Group 3 II. Business activity in Q3 2021 8 III. Market highlights and opportunities 13 IV. GPW Group financial results in Q3 2021 36 V. Appendices 47

  36. Slide 36: Financial results by quarter

    Financial results by quarter Sales revenue EBITDA and EBITDA margin Net profit and net profit margin 52.9% 56.2% 58.9% 53.6% 40.9% 46.1% 48.2% 35.9% 34.7% 39.7% PLN mn +1.8% 116.3 PLN mn 111.3 98.1 +3.4% PLN mn 89.0 90.6 65.3 57.8 +12.8% 53.6 47.6 47.0 48.6 45.2 38.7 36.0 31.9 Q3’20 Q4’20 Q1’21 Q2’2

  37. Slide 37: Trading revenue on the financial market

    Trading revenue on the financial market Q3’21: 42,6%  Trading revenue on the financial market at PLN 35.5 mn in Trading revenue – financial market Q3’21 (-131% YoY, -15.0% QoQ). PLN mn  Average Main Market EOB equity turnover per session: PLN 946.2 mn in Q3’21 vs. PLN 1,320.2 mn in Q2’21 vs. -13,1

  38. Slide 38: Listing revenue

    Listing revenue Q3’21: 6,0% Listing revenue  Three new listings on the Main Market and eight new listings on NewConnect Q3’21. PLN mn  IPO value (MM+NC) at PLN 899 mn in Q3’21 vs. PLN 463 mn in Q2’21 vs. PLN 56 mn in Q3’20. +21,6%  SPO value (MM+NC) at PLN 392 mn in Q3’21 vs. 6,2 PLN 583 mn in Q2

  39. Slide 39: Stable revenue from information services

    Stable revenue from information services Q3’21: 15,0%  New GPW Group data agreements were signed in Revenue from information services: financial market and commodity market Q3’21 with users in different market segments: ✓ GPW data: 2 non-display clients ✓ BondSpot data: 1 non-display client Market

  40. Slide 40: Revenue from the electricity, gas, and property rights markets

    Revenue from the electricity, gas, and property rights markets Q3’21: 20,3%  Increase of revenue from trade in electricity in Q3’21 Trading revenue – commodity market to PLN 5.3 mn (+27.7% YoY) driven by an increase of turnover on the forward and spot electricity market and an increase of PLN mn tr

  41. Slide 41: Revenue from clearing

    Revenue from clearing Q3’21: 13,6% Revenue from clearing PLN mn +28.0%  Increase of revenue from clearing in Q3’21 12.7 13.0 12.3 to PLN 12.3 mn (+28.0% YoY). 11.2 +10.1% 9.6  Increase of revenue from the operation of the Register of Certificates of Origin in Q3’21 to PLN 4.9 mn (+26.6% YoY). Q3’2

  42. Slide 42: Operating expenses in Q3'21

    Operating expenses in Q3’21  Cost/income ratio (C/I)2: 54.5% in Q3’21 vs. 56.3% in Q3’20. Operating expenses: PLN 49.4 mn (-1.3% YoY, -3.1% QoQ)  Decrease of operating expenses in Q3’21 by 1.3% YoY to PLN mn 65.8 PLN 49.4 mn driven by additional provisions against PFSA fees 55.8 set up in Q3’2020

  43. Slide 43: CAPEX and OPEX 2016 – H1'21

    CAPEX and OPEX 2016 – H1’21 CAPEX CAPEX [mn PLN] CAPEX/Revenue [%]  In 9M’21 the Group’s total capital expenditure 9,3% (CAPEX) amounted to PLN 28.0 mn, including 40 9,0% 10% expenditure for property, plant and equipment at PLN 35 7,6% 9% 8% 7.3 mn and expenditure for intangible assets at PLN 30 6,

  44. Slide 44: Share of profit of entities measured by the equity method in Q3'21

    Share of profit of entities measured by the equity method in Q3’21  Group’s share of profit of entities measured by the equity method in Q3’21 at PLN 5.9 mn (+30.3% Share of profit of entities measured by the equity method YoY, -24.5% QoQ). PLN mn PAR KDPW CG  The Group’s share of net profit of KD

  45. Slide 45: GPW Group's consolidated statement of financial position

    GPW Group’s consolidated statement of financial position PLN mn 30.09.2020 31.12.2020 31.03.2021 30.06.2021 30.09.2021  Decrease of assets as at 30 September Non-current assets, including among others 579,7 592,1 601,8 599,5 597,6 2021 vs. 31 December 2020 mainly driven Property, plant and equipmen

  46. Slide 46: Agenda

    I. About the GPW Group 3 II. Business activity in Q3 2021 8 III. Market highlights and opportunities 13 IV. GPW Group financial results in Q3 2021 36 V. Appendices 47

  47. Slide 47: GPW Group consolidated statement of comprehensive income

    GPW Group consolidated statement of comprehensive income PLN mn Q3'20 Q2'21 Q3'21  YoY increase in sales revenue in Q3’21 driven by an increase of Revenue 89,0 98,1 90,6 trading revenue on the commodity market by 21.5% YoY i.e. by Financial market 58,3 61,2 54,4 PLN 6.3 mn to PLN 35.8 mn combined w

  48. Slide 48: GPW Group consolidated statement of cash flows

    GPW Group consolidated statement of cash flows PLN mn 9 months period ended 30 September of 2021 2020  Negative cash flows from operating activities Total net cash flows from operating activities -6,1 187,5 in 9M’21 decreased by PLN 193.6 mn YoY Net profit of the period 119,9 104,7 due among others

  49. Slide 49: GPW Group's revenue structure

    GPW Group’s revenue structure: incremental for 12M ended 30 September 2021 GPW Group: 416.4 PLN mn incl. TGE Group: PLN 146.5 mn Other revenue (0,7%) 0,7% 0,2% Market Data (commodity market) Clearing 11,8% Commodity Register of Certificates of Origin Market: 35,2% 35,2% 5,7% Trading other 3,5% Tradi

  50. Slide 50: Financial market: Trade in equities

    Financial market: Trade in equities Equity turnover value and number of transactions Average number of transactions per session (thous.) 30.9%1 Value of trading in equities (PLN bn) 133,2 136,0 125,2 80,2 70,1 73,1 72,1 65,9 55,3 51,9 55,5 46,4 297 251 236 230 220 205 203 204 194 188 190 191 2011 20

  51. Slide 51: Financial market: Trade in derivatives

    Financial market: Trade in derivatives Derivatives turnover volume Number of open interest (thous.) Volume (thous.) 3.2%2 402,9 290,0  Revenue drivers: 237,8 15,5 184,8 165,0 171,2 137,2 12,6 ✓ Derivatives turnover volume 132,8 11,3 138,1 140,1 143,6 11,5 9,5 104,2 8,2 8,0 7,6 8,2 8,2 8,6 7,0 ✓ Num

  52. Slide 52: Financial market: Other instruments and fees paid by participants

    Financial market: Other instruments and fees paid by participants Treasury BondSpot Poland turnover value, PLN bn Cash Transactions Repo Transactions 3.0%1 1.037 1.062 307 845 450 767 1.8%2 347 327 599 535 260 413 407 196 370 731 147 282 55 612 255 498  Revenue drivers: 439 339 338 86 169 36 113 31

  53. Slide 53: Financial market: Listing

    Financial market: Listing Capitalisation of domestic companies Market Cap/GDP (%) Market Cap of local companies (PLN bn) 6.0%1 36,5% 34,8% 34,8% 32,0% 30,0% 30,0% 29,4% 28,9% 27,9% 25,0% 23,2%  Revenue drivers: 671 683 593 591 557 579 550 ✓ Capitalisation at YE 446 523 517 539 ✓ Value of new issue

  54. Slide 54: Financial and commodity market: Information services

    Financial and commodity market: Information services Number of data vendors Local 15.0%1 Remote 87 87 89 83 78 37 37 35 57 58 58 58 37 54 53 52 36 37 34 31  Revenue drivers: 37 30 28 27 50 50 54 42 46 ✓ Number of data vendors 20 21 24 27 24 25 25 ✓ Number of subscribers 2011 2012 2013 2014 2015 201

  55. Slide 55: Commodity market: Trade in electricity and gas

    Commodity market: Trade in electricity and gas Electricity turnover volume (TWh)1 Spot 243,2 11.6%2 Forward 226,1 228,9 34,8 27,7 33,9 186,8 186,7 182,4 176,6 23,8 25,1 25,4 163,3 22,3 gaz 139,4 27,7 130,8 126,7 21,3 111,7 21,7 27,7  Revenue drivers: 25,2 198,3 195,0 208,3 154,3 163,0 161,6 157,0 1

  56. Slide 56: Commodity market: Trade in property rights

    Commodity market: Trade in property rights Property rights spot turnover (TWh) Green certificates (OZE) Cogeneration certificates 2 4.6%1 62,2 58,9 58,1 59,3 50,8 50,2 19,9 43,9 26,6 29,8 30,8 15,1 39,3 36,0 24,0 25,9 27,0  Revenue drivers: 21,8 20,6 18,9 42,4 32,1 35,7 32,3 ✓ Property rights turno

  57. Slide 57: Commodity market: Register of Certificates of Origin

    Commodity market: Register of Certificates of Origin Volume of issued certificates of origin (TWh) Green certificates (OZE) 50,7 5.4%1 Cogeneration certificates 47,2 48,5 47,5 41,1 42,2 37,2 23,4 18,9 24,5 19,9 35,1 10,7 15,3 29,5 21,6  Revenue drivers: 21,0 22,3 11,9 18,2 15,6 ✓ Volume of issued p

  58. Slide 58: Glossary (1)

    Glossary (1) Cogeneration technological process where electricity and heat are generated simultaneously in a combined heat and power plant; thanks to lower consumption of fuel, cogeneration provides material economic benefits and environmental advantages over separate generation of heat in a traditi

  59. Slide 59: Glossary (2)

    Glossary (2) HVP High Volume Provider, a promotion programme addressed to legal entities whose core business is to invest on financial markets only on own account IPO Initial Public Offering, in this presentation, PwC IPOwatch Europe reports and FESE data, IPO means all offerings where a company fir

  60. Slide 60: Glossary (3)

    Glossary (3) RGO Register of Guarantees of Origin, register of instruments supporting renewable energy sources, which aim to provide disclosure for the end customer as to the amount of electricity generated in a renewable source and supplied to the power distribution or transmission network SPO Seco

  61. Slide 61: IR events and Disclaimer

    IR events Disclaimer 7-10 December 2021 This presentation has been prepared by Giełda Papierów Wartościowych w Warszawie S.A. (“Warsaw Stock Exchange”, “GPW” or “Company”) for its Wood’s Winter Wonderland, WOOD & Company, Prague shareholders, analysts, and other contractors. This presentation has be

Warsaw Stock Exchange Group (GPW) — Investor Presentation (December 2021) on 6ix