Singapore Exchange Ltd. · SGX:S68
Singapore Exchange — H1 FY2005 Earnings Presentation
25 slides from Singapore Exchange's earnings presentation, Jan 20, 2005
Slide 1: Singapore Exchange Limited 1H FY2005 Interim Results Presentation
Singapore Exchange Limited 1H FY2005 Interim Results Presentation Hsieh Fu Hua, CEO Seck Wai Kwong, CFO Singapore Exchange 20 January 2005
Slide 2: Agenda
Agenda 1. CEO’s Message & Highlights 2. Financial Review 3. Strategy Update 4. Q & A 2
Slide 3: CEO's Message
CEO’s Message Hsieh Fu Hua Chief Executive Officer 3
Slide 4: CEO's Message
CEO’s Message • Building an enduring marketplace A hub for regional listings and Asian Derivatives • Open connectivity Revamping our trading infrastructure to enhance access to our market and product development New, electronic trading corporate membership boosts market making and E-Nikkei tra
Slide 5: Highlights of 1H FY2005 Interim Results
Highlights of 1H FY2005 Interim Results 5
Slide 6: Highlights
Highlights • Profit of S$52.4M • Record no. of IPOs and funds raised • Cost discipline • Higher dividend payout ratio and higher interim dividend 6
Slide 7: Financial Highlights: 1H FY2005
Financial Highlights: 1H FY2005 Net profit margin maintained through good cost control, despite lower trading activity (in S $ M ) Operating Operating Net Profit 180 Revenue Expenses After Tax Change 16 3 From 1H FY04 160 153 Operating Revenue 19.0% 140 132 120 107 11 1 Operating Expenses 16.5% 100
Slide 8: Financial Review
Financial Review 1H FY05 Interim Results ended 31 Dec 2004 Seck Wai Kwong Chief Financial Officer 8
Slide 9: Income Statement
Income Statement Creditable profits despite lower revenue … 1H 1H % (in S$M) FY05 FY04 Change Operating Revenue 132.4 163.5 19.0 Securities Trading Operating Expenses 68.0 81.5 16.5 Operating Profit 64.4 82.0 21.4 Derivatives Trading Net Non-Operating Revenue 2.2 (1.7) NM Net Profit Before Tax & MI
Slide 10: Operating Revenue
Operating Revenue Growth trend remains intact … (In S$M) SESOPS Fees 98 85 69 Derivatives Trading 51 Securities Trading 49 Processing Charges 26 22 24 22 21 Access Fee 38 41 42 42 Listing Fees 37 Data Services Fees 1H FY03 2H FY03 1H FY04 2H FY04 1H FY05 Stable Revenue* Net Derivatives Clearing Reve
Slide 11: Operating Revenue
Operating Revenue High operating leverage from strong showing in stable and net derivatives clearing revenues (In S$M) 98 85 Coverage of 69 87 operating expenses 51 81 49 68 68 79 94% - 1H FY05 26 22 24 22 21 69% 80% 99% 94% 99% - 2H FY04 73% 38 41 42 42 37 80% - 1H FY04 1H FY03 2H FY03 1H FY04 2H F
Slide 12: Operating Expenses
Operating Expenses Effective Cost Management Continued financial discipline (In S$M) 87 8 1 Variable bonus 79 17 8 11 6 Provision for office 68 8 5 5 5 reorganisation in 1H 7 9 FY04 12 11 6 Miscellaneous* 10 6 System maintenance 9 Cost of 8 services 11 10 9 sales 8 7 Cessation of Asia 8 9 8
Slide 13: Performance at a Glance
Performance at a Glance Enhancing shareholder value 1H FY2005 FY 2003(1) (Annualised) FY 2004(1) Return on Equity (2) 17.2% 20.8% 2.0% Cost–to–Income 51.3% 47.4% 76.2% Net Profit Margin 38.9% 42.0% 5.3% Dividend per Share (gross) 3.5 cents 13.5 cents 40.5 cents - Base 3.5 cents 7.0 cents 6.5 cents -
Slide 14: Our Dividend Policy
Our Dividend Policy Re-stating our commitment to shareholders Gross Dividend per Share (in cents) Payout ratio • 80% from 50% 34.0 Base dividend 6.5 • Maintain at 7 cents (gross) or 3.5 5.6 cents (net) per (Final) share 6.5 7.0 3.5 FY 03 FY 04 FY 05 Interim Base dividend Variable dividend Special di
Slide 15: Comparison of Dividend Yield
Comparison of Dividend Yield (Based on closing share price as at 31 Dec 04) SGX – Remains a good dividend play Singapore Listed Companies 7.7 Various Exchanges 8 7 Dividend Yield (%) 6 5 4 3 2 1 0 F&N SPH UOB DBS OCBC SGX HKEx ASX Euronext LSE Deutsche Borse SGX Mainboard Exchange Average Source: Bl
Slide 16: Strategy Update
Strategy Update Hsieh Fu Hua Chief Executive Officer 16
Slide 17: Strategic Direction
Strategic Direction Domestic Asian Growth Gateway Exchange linkages Extend Exchange linkages Spore derivatives Asian derivatives Retail E-migration Grow Foreign listings Foreign listings Membership Membership Capital Management HR Change Management Co/Out-sourcing Open Connectivity 17 Defend
Slide 18: Grow from the core: Securities Market
Grow from the core: Securities Market Record No. of IPOs and Funds Raised Our IPO Market Funds Raised (in S$M) 1H FY05 Foreign New Issuers: 30 or 65% $1,381 $290 $195 $86 $1,810 $1,101 $728 $1,054 $2,464 Domestic Foreign 46 42 China 10 36 34 (21) 46% 30 Greater Domestic Foreign China 24 15 18 (30) 6
Slide 19: Grow from the core: Securities Market
Grow from the core: Securities Market Exponential growth in foreign listings … Total No. of Listed Distribution of Market companies Capitalisation 606* S$356B* 25 100 149 352* S$191B* 82 19 33 74 2 3 457 274 319 168 End 1998 End 2004 End 1998 End 2004 CAGR CAGR Foreign Primary Trading 29% Foreign Pr
Slide 20: Grow from the core: Securities Market
Grow from the core: Securities Market Greater China is central to our listing strategy Country of Origin Sectoral Classification Finance India (6) 3% (1) 1% Europe & US Construction China (2) 1% (8) 5% (68) 38% Agriculture Commerce Services Australasia (35) 20% (4) 2% (20) 12% (5) 3% Japan Greater L
Slide 21: Grow from the core: Securities Market
Grow from the core: Securities Market Upholding high standards • Continue to work with listed companies, issue managers and other intermediaries – Quality of issue managers – Due diligence guidelines – Corporate investigation • Importance of continuing obligations of issuer and issue managers – Quar
Slide 22: Grow from the core: Securities Market
Grow from the core: Securities Market Targeting the retail investor … • Structured warrants market 2003 2004 No. of issues 3 147 No. of units traded 45.3K 5,078 M Value traded S$4.8 M S$1,529 M – Ongoing education programme • REITs market 2002 2003 2004 No. of issues 2 3 5 (cumulative) No. of units
Slide 23: Grow from the core: Derivatives Market
Grow from the core: Derivatives Market Diversification towards higher margin products Top 5 Contracts: 1H FY04 • SGXQuest trading engine was launched in Aug 04 Nikkei Asian 44% MSCI Taiwan Eurodollar Derivatives 50% 50% 33% • Decline in Eurodollar Euroyen contracts 17% MSCI Singapore • Launch of e-N
Slide 24: Our Investment Story
Our Investment Story • Strong revenue base leveraged to market growth – record no. of IPOs and funds raised • Continued discipline in cost & capital management • Higher dividend payout ratio and higher interim dividend • A superior ROE 24
Slide 25: Q&A
Q&A Panel: 1. Hsieh Fu Hua, CEO 2. Seck Wai Kwong, CFO 25