Slide 1: 2019 Interim Results
2019 INTERIM RESULTS JSE Limited 30 July 2019
Slide 2: Operating environment
Operating environment GLOBAL IN SA Ongoing geopolitical tension and rising oil prices Contraction in GDP, impacted by load shedding weigh on growth outlook JSE’s benchmark indices report gains despite Disappointing economic data lowers expectations the worst economic contraction in a decade for emer
Slide 3: H1 2019 highlights
H1 2019 highlights Integrated trading and clearing (ITaC ) went live in April Launched monthly expiries in June Implemented tick data in the cloud Achieved the R170 million in cost savings (2016 base year) 3
Slide 4: H1 market activity drivers
H1 market activity drivers 2 11% 5% 5% Number of IPOs Billable equity Equity transactions Equity derivatives (2018: 10) value traded* (2018: -5%) value traded (2018: 11%) (2018: 4%) 21% 19% 18% 7% Bond nominal Interest rate Currency Commodity value derivatives derivatives derivatives (2018: 13%) con
Slide 5: How this translated in our business
How this translated in our business 7% 11% 28% 29% R1.07bn R670m R414m R398m Operating revenue Operating EBIT NPAT (2018: R1.14bn) expenses (2018: R582m) (2018: R561m) (2018: R601m) 15% 29% 29% R33m R444m 467.0c 466.1c Total capital Net cash flow EPS HEPS investment from operations (2018: 654.5c) (2
Slide 6: Financial performance
Financial performance (Rm) 2019 2018* Revenue 1 065 1 141 Other income 19 42 Total revenue 1 084 1 183 Personnel expenses (238) (200) Other expenses (432) (401) Total expenses (670) (601) EBIT 414 582 EBIT % 38% 49% Net finance income 108 122 Share of profit from associate 28 29 Profit before income
Slide 7: Trends
Trends Revenue composition* H1 total revenue Primary Markets: 7% (2018: 8%) 9 1400000 Equity Market: 21% (2018: 26%) -8% 1200000 Back-Office Services (BDA): 15% (2018: 14%) 7 1000000 Equity Clearing and Settlement: 18% (2018: 19%) 5 800000 Bond and Financial Derivatives: 13% (2018: 12%) 3 600000 Com
Slide 8: External and internal capital expenditure
External and internal capital expenditure Grow the business Integrated Trading and Clearing - 2017, 2018, 2019 ETP for government bonds - 2017 , 2018 Colocation - 2018 Tick data in the cloud - 2019 Maintain and transform the business Business as usual (BAU) largely infrastructure (includin
Slide 9: Operating expenditure
Operating expenditure Total operating expenses up 11% to R670m (2018: R601m) Personnel costs 19% or R38m (2018: R43m or 17%) to R238m (2018: R200m) Gross remuneration 15% or R29m as a result of management actions to fill vacancies. Average headcount* 11% to 397 (2018: 358). Exit headcount:
Slide 10: Operating expenditure (continued)
Operating expenditure (continued) Total operating expenses up 11% to R670m (2018: R601m) Depreciation 69% or R37m to R90m (2018: R53m) largely owing to: The application of IFRS 16 on leases. This contributes 33 percentage points or R18m. In prior years, the operating lease was accounted for in g
Slide 11: Technology cost composition
Technology cost composition Technology costs 19% or R22m to R138m (2018: 10% or R13m) 11 *Numbers contain rounding differences
Slide 12: Cashflow view
Cashflow view Strong cashflow and no debt 12 Contains rounding differences
Slide 13: Quality of earnings for H1
Quality of earnings for H1 Business remains highly cash generative R’m Earnings have been adjusted for non cash items (depreciation*, amortisation, forex profit/loss, goodwill write-down) 13 *including IFRS 16 impact
Slide 14: Capex external spend
Capex external spend INITIATIVE H1 2019 H2 2019 FY 2019 FY 2018 Integrated Trading and Clearing (ITaC) 17 - 17 61 Transfomation of ways of work 1 18 19 - Other initiatives* 5 7 30 5 Capex 23 25 47 67 Business as usual 5 16 21 89 ** New initiatives - 54 54 8 Total external capex spend 28 94 123 163 *
Slide 15: Multi-year depreciation profile of known capex
Multi-year depreciation profile of known capex 15
Slide 16: Technology costs: 4 year growth trend
Technology costs: 4 year growth trend Technology cost: R70m reduction achieved As previously guided: Base 2016 R283m 3 years of inflation R46m Post-ITaC maintenance and support R14m Cost reduction commitment (R70m) Total planned exit 2019 R273m 2019 forecast R280m Forecast variance to commitment R7m
Slide 17: Slide 17
Slide 18: Capital Markets: Primary Markets
Capital Markets: Primary Markets 7% of total revenue in H1 2019 Revenue 11% at R73m (2018: R82m) 2 new company listings on Main Board (H1 2018: 10): MultiChoice and Tsogo Sun Hotels 1 new green bond 2016 2017 2018 2019 Other Main Board listings: 4 new ETFs, 117 warrants and Revenue structured prod
Slide 19: Capital Markets: Equity Market
Capital Markets: Equity Market Billable value traded 21% of total revenue H1 2019 350 4 300 R3.2tr 4 Revenue 26% to R206m (2018: R277m) 250 3 200 3 Billable value traded 11% 150 2 Transactions 5% 100 50 2 Colocation racks: 32 (2018: 28) - 1 2016 2017 2018 2019 Tiered billing model: aggregate
Slide 20: Capital Markets: Bonds and Financial Derivatives
Capital Markets: Bonds and Financial Derivatives 100 4 13% of total revenue H1 2019 4 80 R2.9tn 3 Revenue 5% to R130m (2018: R125m) 60 3 2 Equity derivatives revenue 6% to R70m (2018: R75m) 40 2 Contracts traded 34% to 47m (2018: 71m) 1 Value traded 5% to R2.9tn (2018: R3.1tn) 20 1 0 0 C
Slide 21: Capital Markets: Commodity Derivatives
Capital Markets: Commodity Derivatives 4% of total revenue H1 2019 1.7m Revenue 7% to R40m (2018: R37m) Value traded 28% to R396bn (2018: R309bn) Contracts traded 7% to 1.8m (2018: 1.6m) Open interest 8% 2016 2017 2018 2019 Revenue Contracts traded 21 Contains rounding differences
Slide 22: Post-Trade Services: Back-Office Services (BDA)
Post-Trade Services: Back-Office Services (BDA) 15% of total revenue H1 2019 0.29bps Revenue 7% to R158m (2018: R147m) Follows Equity Market transaction volumes Trades 5% to 35m (H1 2018: 34m) 2016 2017 2018 2019 Revenue bps 22 Contains rounding differences
Slide 23: Post-Trade Services: Equity Clearing and Settlement
Post-Trade Services: Equity Clearing and Settlement 18% of total revenue H1 2018 0.25bps Revenue 13% to R183m (2018: R211m) Follows Equity Market value traded Reflects only Equity Market clearing and settlement fees 2016 2017 2018 2019 Revenue Effective rate (Bps) 23 Contains rounding differences
Slide 24: Information Services: Market Data and Indices
Information Services: Market Data and Indices 16% of total revenue H1 2019 Revenue 17% to R156m (2018: R134m) Total Market data Indices 17% to R12m or R10m or Revenue growth R156m 27 9 points 7 points 21 10 (2018: R134m) 17 Pricing and product R9m or R1m or 25 R10m or 7% mix 7 points 1
Slide 25: Slide 25
Slide 26: H2 2019 strategic priorities
H2 2019 strategic priorities Deliver meaningful Achieved all of Embed a more Protect and Lead by example new operating the R170 million nimble, client- transform the JSE on the national revenue through in cost savings led culture franchise while agenda and business lines not (base year embodied in u
Slide 27: Slide 27
Slide 28: Financial metrics
Financial metrics Ratios H1 2019 H1 2018 H1 2017 H1 2016 H1 2015 Operating margin 38% 49% 41% 47% 46% EPS (continuing) 467.0 654.5 490.9 599.7 503.9 HEPS (total) 466.1 654.6 488.9 585.1 490.3 EBITDA (Rm) 504 637 511 614 535 28
Slide 29: Thank You
Thank You