JSE Limited · JSE:JSE
JSE — H1 2014 Earnings Presentation
21 slides from JSE's earnings presentation, August 2014
Slide 1: 2014 Interim Results Presentation
2014 INTERIM RESULTS PRESENTATION August 2014
Slide 2: Operating environment for H1 2014
Operating environment for H1 2014 Environment remains challenging: Country ratings reviews by Fitch and S&P Inflation up; widening budget deficit; strikes linger Tougher for the JSE and for our clients To regain investor confidence, South Africa needs to: Implement clear policies that pr
Slide 3: What H1 2014 meant for our stakeholders
What H1 2014 meant for our stakeholders -3% -8% 33% Equity trade volume Equity value traded Equity derivatives contracts 25% 34% -4% Currency derivatives contracts Bond derivatives contracts Commodity derivatives contracts R101m 2014 Capital investment 3
Slide 4: How this translated in our business
How this translated in our business Colocation & R869m 9% R508m 4% R2m Issuer Services Operating revenue Operating expenses New revenue streams R379m 10% R333m 14% R486m R61m EBIT NPAT Cash flow from operations 389.4 cents 14% 391.2 cents 17% EPS HEPS 4
Slide 5: Positive financial performance
Positive financial performance Group (R’m) H1 2014 H1 2013 Revenue 869 794 Other income 19 39 Total revenue 888 833 Personnel expenses (194) (192) Other expenses (314) (296) Total expenditure (508) (488) EBIT 380 345 Net finance income 59 43 Share of profit of equity-accounted investees 18 22 Profit
Slide 6: Growth trend
Growth trend H1 revenue trend H1 expenses trend 4% 7% 4.5 4 3.5 3 2.5 2 1.5 1 0.5 0 2007 2008 2009 2010 2011 2012 2013 2014 2007 2008 2009 2010 2011 2012 2013 2014 Total revenue HEPS EPS Personnel expenses Other expenses Impairments H1 2014 revenue as a % total Issuer Regulation - 8% (2013: 7%) Equi
Slide 7: H1 operating expenditure
H1 operating expenditure Operating expenses 4% at R508m (2013: R508m R488m) R488m Remuneration paid 1% yoy to R194m (2013: R192m) 92 330 Headcount flat at 505 (2013: 503) 82 307 Average salary increase 6.4% Remuneration capitalised to projects R6m (2013: R4m) 194 271 192 240 Norm
Slide 8: Cashflow view
Cashflow view 2 000 1 800 1 600 439 46 33 1 400 90 Cash (R’m) 1 200 347 1 000 800 1 378 1 302 600 400 200 - Cash Dec Net cash Investing Financing Dividends Forex Cash Jun 2013 generated activities activities paid impact on 2014 from cash balance operations The Group entered into commitments to the v
Slide 9: Business Review
BUSINES REVIEW
Slide 10: Issuer Regulation (R'm)
Issuer Regulation (R’m) 8% of total revenue 70 Revenue 27% to R66m (H1 2013: R52m) 60 due to rise in capital raising and new listing activity 50 Capital raising to R86bn during period (H1 2013: R34bn) 40 New listing activity positive, in line with global trends 30 Number of new company l
Slide 11: Equity Market (R'm)
Equity Market (R’m) 26% of total revenue 250 Revenue 5% to R211m (H1 2013: R200m) 200 Measured against revenue post-rebate in 2013 Trades 3% (H1 2014: 20m; H1 2013: 150 21m) Value traded 8% (H1 2014: R2.0tr; 2013: R2.1tr) 100 Despite the drop in trading value, the mix of trade types
Slide 12: Back-Office Services (BDA) (R'm)
Back-Office Services (BDA) (R’m) 15% of total revenue 140 Revenue 4% to R125m (H1 2013: R120m) 120 Linked to Equity Market transaction volumes 100 Strategic focus World-class surveillance and risk 80 management capabilities 60 Revising existing BDA billing model JSE to retain BDA until a
Slide 13: Post-Trade Services (R'm)
Post-Trade Services (R’m) 19% of total revenue 160 Revenue 22% to R155m (H1 2013: R127m) 140 Measured against revenue post-rebate in 2013 120 Reflects only Equity Market clearing fees Value-based clearing and settlement 100 billing model implemented end-June Assuming value is flat, expec
Slide 14: Bonds and Financial Derivatives (R'm)
Bonds and Financial Derivatives (R’m) 13% of total revenue 120 Revenue 3% to R106m (H1 2013: R103m) Equity derivatives revenue 11% to 100 R72m. Number of contracts traded 33% yoy; value traded 16% Currency derivatives revenue 14% to 80 R12m. Contracts traded 25%; value traded 59%
Slide 15: Commodity Derivatives (R'm)
Commodity Derivatives (R’m) 3% of total revenue 30 Revenue 4% at R26m (H1 2013: R25m) owing to market activity 25 Contracts traded 4% 20 Value traded 5% Strategic focus 15 Growing participation on market Expanding product range 10 H1 2014: Introduced diesel hedge contract – open in
Slide 16: Market Data (R'm)
Market Data (R’m) 12% of total revenue 100 Revenue 16% to R95m (H1 2013: R82m) 90 Derived from strong growth in new 80 business 70 Strategic focus 60 H1 2014: Introduction of new commercial 50 model for market data non-display usage 40 To attract algo players 30 Automation of division on
Slide 17: Looking Ahead
LOOKING ATEAB
Slide 18: Capital expenditure roadmap
Capital expenditure roadmap Project/Initiative H1 2014 H2 2014 FY 2014 T+3 – Phase 2 15 15 30 T+3 – Phase 3 4 16 20 Integrated clearing and trading 21 27 48 Colocation 30 3 33 Market Data automation 3 2 5 Listings information database 2 4 6 New issuer services 4 - 4 Business as usual 22 12 34 Total
Slide 19: Strategic focus
Strategic focus Capital markets Primary market: New issuers across products Product expansion across products, especially derivative markets Secondary market: Government bond electronic trading platform Multi-asset-class integrated trading systems Low-cost retail account Trading an
Slide 20: Strategic focus
Strategic focus Post -Trade and Information Services Colocation sales activity Complete Phase 2 of the move to T+3 for equities JSE Group capital requirements review Multi-asset-class integrated clearing systems OTC clearing investigation Policy Respond to potential regulatory interv
Slide 21: Questions
QUESTIONS