Gielda Papierow Wartosciowych W Warszawie S.a. · GPW:GPW
Gielda Papierow Wartosciowych W Warszawie — Giełda Papierów Wartościowych w Warszawie S.A. (Warsaw Stock Exchange Group) — Investor Presentation (December 2019)
62 slides from Gielda Papierow Wartosciowych W Warszawie's investor presentation, December 2019
Slide 1: Warsaw Stock Exchange Group Investor Presentation
Warsaw Stock Exchange Group Investor Presentation December 2019
Slide 2: Agenda
I. Executive Summary of GPW Group 3 II. Business activity in Q3 2019 8 III. Market highlights and opportunities 13 IV. GPW Group financial results in Q3 2019 38 V. Appendices 48
Slide 3: Key milestones
Key milestones FTSE Russel decision about promotion Implementation GPW aquires Poland to Developed of updated Aquis Exchange Markets strategy The first stock Launch of GPW Launch of exchange in NewConnect shares Launch of X-Stream derivatives Launch of UTP Warsaw opens (GPW alternative debut on Trad
Slide 4: GPW share price
GPW share price 55 PLN (closing price) 50 45 40 35 30 2012 2013 2014 2015 2016 2017 2018 2019 1000000 Volume 800000 600000 400000 200000 0 2012 2013 2014 2015 2016 2017 2018 2019 Source: Bloomberg 4
Slide 5: The highest dividend yield among global peers
The highest dividend yield among global peers 30 Global exchanges – current P/E ratio 25 average 20 15 10 5 0 Bolsa MOEX GPW JSE Nasdaq TMX Group Japan Exch. Singapore Deutsche Bursa CBOE India Bolsa Brasil ASX Argentina SE Borse Malaysia 6,8 Global exchanges – estimated Dividend Yield (%) DY 2019 D
Slide 6: Present versus historical valuation
Present verus historical valuation 18 GPW (P/E 2019) 17 P/E multiple average (5 Years) +1 standard deviation from multiple average 16 -1 standard deviation from multiple average 15 14 13 12 11 10 9 8 7 2014 2015 2016 2017 2018 2019 Source: Bloomberg 6
Slide 7: Agenda
I. Executive summary of GPW Group 3 II. Business activity in Q3 2019 8 III. Market highlights and opportunities 13 IV. GPW Group financial results in Q3 2019 38 V. Appendices 48
Slide 8: Improved profitability with a contribution of one-offs
Improved profitability with a contribution of one- offs Sales revenue Sales revenue Operating expenses Sales revenue down by 7.4% QoQ and 3.8% YoY in Q3’19. PLN mn PLN mn C/I 50,2% 48,6% 43,8% Operating expenses 85.7 89.1 Operating expenses down by 16.7% QoQ 82.5 -3.8% 43.0 43.3 and down by 16.1
Slide 9: Investor activity in Q3'19
Investor activity in Q3’19 Value of EOB trade on the Main Market EOB Trading PLN bn Velocity ratio: 33.2% in Q3’19 vs. 30.2% in Q2’19 and Turnover velocity (source: FESE) 42,6% 34.3% in Q3’18. 80 45 ,0% 34,9% 34,3% 32,9% 32,8% 33,3% 33,2% WIG20 lost 6.6% in Q3’19 vs. WIG20 gained 7.0% in 40 ,0%
Slide 10: Trade in derivatives
Trade in derivatives Volume of trade in derivatives mn +12.7% Total volume of trade in derivatives: 1.98 mn contracts in Q3’19 vs. 1.76 mn in Q3’18, up by 2.22 1.98 2.11 2.08 1.98 12.7% YoY. 1.67 1.73 1.76 1.71 1.60 Volume of trade in WIG20 futures: 1.07 mn contracts in Q3’19 vs. 0.98 mn in Q3’1
Slide 11: Strong commodity market in Q3'19
Strong commodity market in Q3’19 Volume of spot and forward trade in Electricity market: Total volume of trade in electricity: 65.0 TWh in Q3’19 electricity and gas (+2.4% YoY, +22.9% QoQ). Volume of spot transactions: 8.0 TWh (+29.0% YoY, -4.3% QoQ). Volume of forward transactions: 57.0 TWh (-0.5
Slide 12: Agenda
I. Executive summary of GPW Group 3 II. Business activity in Q3 2019 8 III. Market highlights and opportunities 13 IV. GPW Group financial results in Q3 2019 38 V. Appendices 48
Slide 13: Our market highlights and opportunities
Our market highlights and opportunities 1 Solid financial performance and attractive dividend 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 financial segment 6 Empl
Slide 14: Sound financial performance
1 Sound financial performance Solid top-line growth … … and high operating leverage Total revenue, PLN mn EBITDA, PLN mn EBITDA margin, % CAGR +6.3% 61.1% 58.2% 55.5% 51.8% 51.1% 50.7% 54.9% 54.4% 352.0 346.8 47.1% 48.1% 317.6 327.9 310.9 268.8 273.8 283.8 212.2 202.0 225.6 180.2 183.7 199.5 161.1 1
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
Slide 16: Attractive dividend policy
1 Attractive dividend policy A very good track of attractive dividends Dividend per share1 (PLN) Dividend payout ratio2 (%) Dividend yield3 6.1% 3.8% 2.0% 3.2% 4.9% 6.7% 4.4% 5.8% 8.2% 142.3% 77.1% 89.9% 80.1% 70.7% 63.3% 45.2% 44.5% 3.20 3.18 31.0% 2.40 2.36 2.15 2.20 1.40 1.20 0.80 2010 2011 2012
Slide 17: Diversified revenue structure
2 Diversified revenue structure 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 Structured -
Slide 18: Largest economy in the CEE region
3 Largest economy in the CEE region… Largest economy in CEE region… And 8th largest economy in the EU Population (m) 2018 nominal GDP (USD bn) 2018 nominal GDP (USD bn) Germany 4029 Poland 549 38.4 Czech Rep. 245 10.6 United Kingdom 2809 Romania 239 19.6 France 2795 Hungary 156 9.8 Italy 2087 Slovak
Slide 19: …and a growth leader in the EU
3 …and a growth leader in the EU Poland has an excellent macro readings1 A2 A- A- outlook outlook outlook stable stable stable Real GDP growth +3.9% YoY in Q3 2019 Unemployment rate 5.1% in September 2019 CPI inflation +2.6% YoY in September 2019 Dynamic GDP growth in 20183 One of fastest grow
Slide 20: Potential for retail investment growth
4 Potential for retail investment growth Poles’ savings (%)1 Household assets 1 (PLN bn) Bonds2 Deposits and cash Shares Debt Other 3 1 346 Investment Funds 4% 1 270 1 271 2% 10% 1 193 1% Insurance 1 042 6% 999 919 850 792 752 688 17% 607 614 Cash 528 60% 11% 59% 432 Deposits 369 382 2003 2004 2005
Slide 21: 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 43.1 43.1 43.0 43.0 42.3 41.8 41.5 41.0 40.8 279 38.8 259 257 258 257 261 252 36
Slide 22: Strong and growing foreign investor base
4 Strong and growing foreign investor base Share of investors in trade in shares on the Main Market (%) Share of investors in trade on the futures market (%) 34 31 29 28 33 30 30 38 38 37 37 38 36 35 12 13 13 16 15 13 12 50 51 50 46 47 46 48 53 53 59 59 47 49 51 17 18 15 18 19 17 20 2013 2014 2015 2
Slide 23: Stable development of information services
4 Stable development of information services Strong reach via number of distributors and subscribers New clients of GPW and WIBOR data in different market segments 327,3 attracted in Q3’19: 285,0 288,1 261,9 2 data vendors, 240,3 244,4 248,0 238,6 221,1 225,0 2 non-display clients, 4 users o
Slide 24: Equity market: potential for further free float and liquidity growth
5 Equity market: potential for further free float and liquidity growth Turnover velocity and volatility European markets equitisation and trading velocity* Velocity ratio Average WIG20 volatility velocity ratio 50 40 30 20 10 0 Q2'15 Q3'15 Q4'15 Q1'16 Q2'16 Q3'16 Q4'16 Q1'17 Q2'17 Q3'17 Q4'17 Q1'18
Slide 25: Diversified issuers portfolio
5 Diversified issuers portfolio Issuer activity on GPW markets1 Flow of new companies to the market Equity market Main Market NewConnect Main Market Market cap: 409 domestic companies PLN 551 bn CAGR 5.7% 49 foreign issuers PLN 562 bn Equity market for SME NewConnect 438 450 471 487 487 482 376 dome
Slide 26: Strong position of NewConnect on the European SME scene
5 Strong position of NewConnect on the European SME scene NewConnect is second amongst European SME markets NewConnect has the status of an organized market; it is in terms of the number of listings, just after AIM operated by the GPW outside the regulated market as an alternative trading system.
Slide 27: Opportunities for further debt market development
Opportunities for further debt market 5 development Number of non-Treasury issues on Catalyst Total debt securities by residence of issuer as % of GDP1 194% 185% 30.8% 170% 566 525 527 513 487 496 115%110%109% 408 97% 88% 325 66% 208 55% 45% 45% 43% 97 13% 11% 35 7% 2009 2010 2011 2012 2013 2014 201
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
Slide 29: Employee Capital Plans (ECP)
6 Employee Capital Plans (ECP) ECP to start in 2H 2019 Equities/debt share in total assets Time left to the defined Size od company (number number of potential Start date (reaching 60 years Equities Debt of employese) participants (mn) old) >250 3.3 01.07.2019 >20 years 60-80% 20-40% 50-249 2 01.01.
Slide 30: Employee Capital Plans (ECP) – base scenario
6 Employee Capital Plans (ECP) – base scenario Estimated yearly inflows into ECPs (PLN bn) 14,8 13,8 14,0 14,3 14,5 „Base scenario” assumptions: 13,3 13,5 12,6 12,8 13,0 participation rate 50% 4,4 4,0 4,1 4,1 4,2 4,3 4,4 average portfolio structure: 3,8 3,9 8,9 3,8 30% - equities PL 1,4 1,5 1,
Slide 31: Employee Capital Plans (ECP) – pessimistic scenario
6 Employee Capital Plans (ECP) – pesimistic scenario Estimated yearly inflows into ECPs (PLN bn) 7,3 7,4 6,6 6,8 6,9 7,0 7,1 „Pesimistic scenario” assumptions: 6,4 6,5 6,3 2,2 participation rate 25% 2,1 2,2 1,9 2,0 2,0 2,0 2,1 2,1 average portfolio structure: 1,9 4,5 0,7 0,7 30% - equities PL
Slide 32: Employee Capital Plans (ECP) – optimistic scenario
6 Employee Capital Plans (ECP) – optimistic scenario Estimated yearly inflows into ECPs (PLN bn) 27,7 28,2 28,7 „Optymistic scenario” assumptions: 27,1 24,7 25,2 25,7 26,1 26,6 participation rate 75% 24,4 8,1 8,3 8,5 8,6 average portfolio structure: 7,8 8,0 7,3 7,4 7,6 7,7 30% - equities PL 16
Slide 33: Commodity market
7 Commodity market Commodity market growth drivers Lunch of Agricultural Market– pilot wheat trading from March to August 2020. Maker-Taker: On 1 January 2019, TGE opened a Maker-Taker pilot liquidity support programme to minimise operating expenses of market participants by narrowing the spread
Slide 34: Commodities trading in Europe – TGE's full product offer
7 Commodities trading in Europe – TGE’s full product offer electricity electricity natural gas natural gas Exchange spot futures/forward spot futures/forward EEX NO YES NO NO Epex Spot YES NO NO NO Powernext/Pegas NO NO YES YES Nord Pool YES NO NO NO Nasdaq Commodities NO YES NO NO HUPX YES NO NO NO
Slide 35: Strategy update #GPW2022 (strategic initiatives)
Strategy update #GPW2022 (strategic 8 initiatives) GPW Group Stock Market Information offer for Debt Market Derivatives Derivatives Market Commodity Commodity Market Information investors and New business lines Stock market Debt market market market products issuers Primary BondSpot Derivatives Infr
Slide 36: Poland's Promotion to Developed Markets
9 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
Slide 37: Agenda
I. Executive summary of GPW Group 3 II. Business activity in Q3 2019 8 III. Market highlights and opportunities 13 IV. GPW Group financial results in Q3 2019 38 V. Appendices 48
Slide 38: Increase of EBITDA margin and net profit margin
Increase of EBITDA margin and net profit margin Revenue EBITDA and EBITDA margin Net profit and net profit margin PLN mn 43.9% 42.0% 47.7% 49.8% 64.6% 67.8% 59.5% 59.6% 29.1% 45.8% -3.8% 85.7 88.5 89.1 84.2 82.5 PLN mn +9.6% PLN mn 57.6 55.9 +9.3% 51.0 52.7 42.6 41.1 38.6 37.6 37.1 24.5 Q3’18 Q4’18
Slide 39: Trading revenue on the financial market
Trading revenue on the financial market Q3’19: 36.2% Trading revenue on the financial market: PLN 29.9 mn Trading revenue – financial market in Q3’19 (-2.5% YoY, +5.2% QoQ). YoY decrease PLN mn mainly due to a lower value of trade in equities. Average EOB turnover in shares per session: PLN 772.
Slide 40: Listing revenue
Listing revenue Q3’19: 6.1% Listing revenue Two transfers from NewConnect to the Main Market in PLN mn Q3’19 (HM Inwest and Ultimate Games). Three new listings on NewConnect in Q3’19 (Moonlit Games, DB Energy, Carpatia Capital). -6.9% 5.7 Total listing revenue: PLN 5.0 mn in Q3’19 vs. PLN 5.1
Slide 41: Revenue from information services – financial market
Revenue from information services – financial market Q3’19: 14.0% Revenue from information services1 PLN mn New clients of GPW and WIBOR data in different market segments attracted in Q3’19: 2 data vendors, +4.0% 2 non-display clients, 12.2 12.0 11.8 11.5 11.1 -3.7% 4 users of historical dat
Slide 42: Revenue from the electricity and gas markets
Revenue from the electricity and gas markets Q3’19: 22.8% Revenue from trading in electricity up by 36.4% QoQ to PLN Trading revenue – commodity market 4.7 mn in Q3’19 and down 10.2% YoY (mainly due to a lower turnover on the forward market, down by 17.8% YoY). PLN mn Revenue from tradeing in ga
Slide 43: Revenue from clearing
Revenue from clearing Q3’19: 13.1% Revenue from clearing Revenue from clearing down by 2.6% YoY and by 11.2% QoQ in Q3’19, mainly due to a decrease in volumes of PLN mn trade in property rights. -2.6% Revenue from the operation of the Register of Certificates 12.9 12.2 of Origin down by 5.6% YoY
Slide 44: Operating expenses impacted by release of part of provisions for KNF fees in Q3'19
Operating expenses impacted by release of part of provisions for KNF fees in Q3’19 Operating expenses: PLN 36.1 mn in Q3’19 (-16.1% YoY, -16.7% QoQ). Operating expenses: -16.1% YoY and -16.7% QoQ Final KNF fees calculated in Q3’19: PLN 6.7 mn in 2019 vs. PLN 12.5 mn in 2018. PLN mn 54.3 Cost/i
Slide 45: Share of profit of entities measured by the equity method
Share of profit of entities measured by the equity method Share of profit of entities measured by the equity method PLN mn PAR KDPW CG 4.69 Group’s share of profit of entities measured by the equity 3.64 method: PLN 4.69 mn in Q3’19 (+37.5% YoY, +28.9% 3.41 QoQ). 4.74 KDPW: 1.92 3.77 3.25 The
Slide 46: GPW Group's consolidated statement of financial position
GPW Group’s consolidated statement of financial position PLN mn 31.09.2018 30.06.2019 30.09.2019 Increase of total assets YtD as Non-current assets, including among others 575,1 585,9 585,5 at 30 September 2019 mainly driven by an increase of cash Property, plant and equipment 106,2 100,6 97,3 and
Slide 47: Agenda
I. Executive summary of GPW Group 3 II. Business activity in Q3 2019 8 III. Market highlights and opportunities 13 IV. GPW Group financial results in Q3 2019 38 V. Appendices 48
Slide 48: GPW Group's consolidated statement of comprehensive income
GPW Group’s consolidated statement of comprehensive income PLN mn Q3'18 Q2'19 Q3'19 Revenue 85,7 89,1 82,5 YoY decrease of revenue in Q3’19 driven by a Financial market 47,1 45,4 46,4 decrease of revenue from the commodity market Trading 30,7 28,4 29,9 (by PLN 2.1 mn) and a decrease of revenue fro
Slide 49: GPW Group's consolidated statement of cash flows
GPW Group’s consolidated statement of cash flows Nine-month period ended 30 September of PLN mn 2019 2018 Cash flows from operating activities, including among others: 160,2 96,6 • Positive cash flows from operating activities in Cash flows from operating activities 191,7 132,1 9M ended 30 September
Slide 50: GPW Group's revenue structure
GPW Group’s revenue structure 153.3 PLN mn 344.3 PLN mn 0,3% other revenue (0,3%) Clearing 13,6% Register of Certificates of Origin 8,4% Trading - other Commodity Market: 3,5% Trading - property rights 44,5% 44.5% 10,5% Trading - gas 3,5% Trading - energy 5,0% GPW Group’s revenue (PLN mn) Market Dat
Slide 51: Financial market: Trade in equities
Financial market: Trade in equities Value of trade in equities and number of transactions Average number of transactions per session (thous.) Value of trading in equities, EOB (PLN mn) 26.7%1 80.2 70.1 73.1 72.6 65.9 69.2 55.3 51.9 55.5 51.4 48.4 46.4 38.2 251 236 207 220 205 203 204 167 188 190 160
Slide 52: Financial market: Trade in derivatives
Financial market: Trade in derivatives Volume of trade in derivatives Number of Open Interest (thous.) 3.5%2 184.8 181.8 168.1 165.0 169.0 132.8 137.2 138.1 140.1 143.6 131.0 104.2 Revenue drivers: 80.4 Volume of trade in futures 14.7 15.5 12.6 13.8 11.3 12.6 9.5 8.2 8.0 8.2 7.6 Number of open
Slide 53: Financial market: Other instruments and fees paid by participants
Financial market: Other instruments and fees paid by participants Value of trade on Treasury BondSpot Poland, PLN bn Cash transactions 3.0%1 Repo transactions 1.037 1.062 3,0 307 450 845 767 2,9%22 2.9% 347 327 599 535 260 413 407 196 324 731 612 147 255 Revenue drivers: 135 498 439 97 84 101 339
Slide 54: Financial market: Listing
Financial market: Listing Capitalisation of domestic companies Market Capitalisation/GDP (%) 6.1%1 Market Capitalisation of domestic companies (PLN bn) 36.8% 36.5% 34.8% 34.8% 32.0% 27.9% 28.9% 30.0% 27.4% Revenue drivers: 671 593 591 557 579 587 551 543 523 Capitalisation at YE 446 517 Value
Slide 55: Financial and commodity market: Information services
Financial and commodity market: Information services Number of data vendors Domestic Foreign 14.2%1 83 78 74 57 58 58 58 38 52 54 53 52 36 50 35 37 34 31 37 30 28 27 Revenue drivers: 32 33 42 39 45 Number of data vendors 18 19 20 21 24 27 24 25 25 Number of subscribers 2009 2010 2011 2012 2013
Slide 56: Commodity market: Trade in electricity and gas
Commodity market: Trade in electricity and gas Volume of trade in electicity (TWh)1 Spot Forward 226.1 9.7%2 176.6 186.7 186.7 27.7 23.7 25.1 22.3 139.4 gaz 130.8 126.6 87.9 21.3 111.7 21.7 27.6 Revenue drivers: 13.4 25.2 198.3 154.3 163.0 161.6 63.5 65.0 109.1 118.1 6.2 8.0 Volume of trade in e
Slide 57: Commodity market: Trade in property rights
Commodity market: Trade in property rights Spot trade in property rights (TWh) Green Certificates 62.2 9.2%1 Cogeneration certificates 58.9 59.3 58.1 48.8 50.8 50.2 19.9 44.8 26.6 29.8 30.8 13.2 15.1 39.3 9.6 36.0 24.0 29.9 6.8 21.8 Revenue drivers: 42.4 35.7 32.1 35.2 35.6 32.3 13.5 26.2 28.3 28.
Slide 58: Commodity market: Register of Certificates of Origin
Commodity market: Register of Certificates of Origin Volume of issued certificates of origin (TWh) Green Certificates 50.7 7.5%1 Cogeneration 48.5 47.2 47.5 41.1 42.2 36.6 37.2 23.4 18.9 24.5 19.9 31.9 15.3 10.8 10.7 29.5 21.6 27.6 Revenue drivers: 11.9 25.8 26.6 25.9 27.3 28.3 27.6 Volume of is
Slide 59: 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
Slide 60: 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
Slide 61: 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
Slide 62: IR events, Contact and Disclaimer
IR events Disclaimer 3–6 December 2019 This presentation has been prepared by Giełda Papierów Wartościowych Winter Wonderland Emerging Europe Conference, w Warszawie S.A. (“Warsaw Stock Exchange”, “GPW” or “Company”) for its Wood&Company, Prague shareholders, analysts, and other contractors. This