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

Gielda Papierow Wartosciowych W Warszawie — Warsaw Stock Exchange Group — Investor Presentation (December 2020)

59 slides from Gielda Papierow Wartosciowych W Warszawie's investor presentation, December 2020

  1. Slide 1: Warsaw Stock Exchange Group Investor Presentation

    Warsaw Stock Exchange Group Investor Presentation December 2020

  2. Slide 2: I. About the GPW Group

    I. About the GPW Group 3 II. Business activity in Q3 2020 7 III. Market highlights and opportunities 12 IV. GPW Group financial results in Q3 2020 35 V. Appendices 45

  3. Slide 3: Key milestones

    Key milestones 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 system market) the G

  4. Slide 4: GPW vs. global peers

    GPW vs. global peers Dividend Yield 2021e EV/EBITDA 2021e 7,0% 5,6% 25,0 6,0% Dividend Yield 2021e (%)* EV/EBITDA 2021e 5,0% 20,0 4,0% 15,0 3,0% 10,0 7,4 2,0% 1,0% 5,0 0,0% 0,0 GPW (share price, PLN) Market multiplies P/E P/E EV/EBITDA EV/EBITDA Dividend Yield Mkt Cap 50,0 2020 2021 2020 2021 2021*

  5. Slide 5: ESG developments

    ESG developments  Continued development of the implementation and reporting of ESG factors  Publication of the GPW Group’s integrated report  Improved ESG scoring of GPW in the WIG-ESG index (low risk)  Support for issuers and investors in ESG communication and understanding its role and signifi

  6. Slide 6: II. Business activity in Q3 2020

    I. About the GPW Group 3 II. Business activity in Q3 2020 7 III. Market highlights and opportunities 12 IV. GPW Group financial results in Q3 2020 35 V. Appendices 45

  7. Slide 7: GPW Group financial results in Q3'20

    GPW Group financial results in Q3’20 Sales revenue Operating expenses 52.4%  Sales revenue PLN mn C/I 52.3% +12.5% Sales revenue at PLN 88.4 mn in Q3’20 C/I 56.3% (+7.2% YoY, -13.5% QoQ). YoY increase 287.9 +12.8% 43.8% 44.1% 255.8 driven by higher revenue on the financial 150.9 market. PLN mn 133.

  8. Slide 8: Continued strong investor activity on the financial market

    Continued strong investor activity on the financial market Main Market EOB turnover value  Increase of the Main Market EOB turnover value to PLN 63.0 bn in Q3’20 (+28.6% YoY, -10.5% QoQ) EOB Trading Turnover velocity  Increase of New Connect turnover value to PLN 5.3 bn 80 PLN bn 61,0% 70 ,00% (+1

  9. Slide 9: YoY increase in derivatives turnover

    YoY increase in derivatives turnover  Increase of the derivatives turnover volume in Derivatives turnover volume Q3’20 to 2.3 mn: +17.8% YoY and -15.1% QoQ  Increase of the WIG20 futures turnover volume mn +17.8% in Q3’20 to 1.16 mn: +8.6% YoY and -21.7% 3.1 QoQ 2.7  Increase of the single-stock

  10. Slide 10: Commodity market turnover in Q3'20

    Commodity market turnover in Q3’20 Electricity and gas spot and forward turnover volume Electricity (TWh) Natural gas (TWh)  Electricity market – Total electricity turnover volume in Q3’20 was 53.0 TWh (-18.5% YoY). The spot turnover 39.6 40.7 39.9 volume was 8.4 TWh (+5.1% YoY). The forward turnov

  11. Slide 11: III. Market highlights and opportunities

    I. About the GPW Group 3 II. Business activity in Q3 2020 7 III. Market highlights and opportunities 12 IV. GPW Group financial results in Q3 2020 35 V. Appendices 45

  12. Slide 12: 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

  13. Slide 13: Sound financial performance

    1 Sound financial performance Solid top-line growth … … and high operating leverage Total revenue, PLN mn EBITDA, PLN mn EBITDA margin, % 61.1% CAGR 58.2%57.5% +5.4% 55.5% 54.9% 54.4% 51.8% 51.1% 50.7% 352.0 346.8 47.1%48.1% 336.1 317.6 327.9 310.9 212.2 202.0 268.8 273.8 283.8 193.2 180.2 183.7 225

  14. Slide 14: 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

  15. Slide 15: 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% 1 2 Dividend per share (PLN) Dividend payout ratio (%) 142.3% 77.1% 89.9% 93.2% 80.1% 70.7% 63.3% 45.2% 44.5% 3.20 3.18 31.0% 2.40 2.40 2.36 2.15 2.20 1.40 1.20 0.80 2010 2011 2012 2013 2014 2015 2016 2017

  16. Slide 16: 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 -

  17. Slide 17: 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 2019 (EUR bn) Population (mn) Nominal GDP in 2019 (EUR bn) Poland 527 38,4 Germany 3435 Austria 398 UK 2523 8,9 Romania 223 19,6 France 2418 Czech Rep. 220 Italy 1787 10,6 Hung

  18. Slide 18: 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 drop by 3.6% in 2020 and to grow outlook outlook outlook stable stable stable by 3.3% in 2021 - according to European Commission (autumn 2020 projection).  Europea

  19. Slide 19: Potential for retail investment growth

    4 Potential for retail investment growth Poles’ savings (%)1 Household assets 1 (PLN bn) 4 Investment Funds Deposits and cash Other 1 608 Insurance Cash 8% 1 483 4% 18% 1 346 Shares 1 270 5% 1 193 Debt securities 2 1% Loans 3 999 1 042 2% 919 1 251 850 1 130 792 752 936 1 030 688 899 11% 607 614 737

  20. Slide 20: 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 279 269 259 268 252 257 43.1 41.8 43.1 43.0 43.0 41.5 42.4 42.1 41.9 41.2 38.8 3

  21. Slide 21: 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 (%) institutional individual foreign institutional individual foreign 25 20 34 31 29 33 30 35 35 38 38 37 37 38 36 38 12 12 22 13 16 15 13 12 50 4

  22. Slide 22: 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. 350,9 327,3  Developing GPW Data: 285,0 288,1 261,9

  23. Slide 23: 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* 70,0 % Velocity ratio WIG20 volatility 60,0 50,0 40,0 30,0 20,0 10,0 0,0 2018 2019 2020 Material upside potential of free float Free float value

  24. Slide 24: 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: 388 domestic companies PLN 468 bn CAGR 4.9% 48 foreign issuers PLN 337 bn Equity market for SME NewConnect 438 450 471 487 487 482 371 dome

  25. Slide 25: Strong position of NewConnect among European alternative trading venues

    5 Strong position of NewConnect among European alternative trading venues  NewConnect is dedicated to SMEs across many sectors, #3 in Europe by number of IPOs in 20192 including technology companies 19 Number of IPOs in 2019  NewConnect opened in 2007 and its current capitalisation is 16 15 PLN 20

  26. Slide 26: 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 203 184 26.5% 566 525 527 512 487 496 466 408 103 105 93 97 325 85 86 77 80 208 59 47 39 40 97 30 36 35 5 8 Canada Poland Italy France Norway Austra

  27. Slide 27: 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

  28. Slide 28: Employee Capital Plans (ECP) / PPK

    6 Employee Capital Plans (ECP) / PPK ECP intruduction schedule Equities/debt share in total assets number of Time left to the defined Size od company (number of Stage potential Schedule date (reaching 60 years Equities Debt employese) participants (mn) old) I >250 3.3 started >20 years 60-80% 20-40%

  29. Slide 29: PPK assets have crossed the mark of PLN 2.72 billion

    6 PPK assets have crossed the mark of PLN 2.72 billion AuM of target-date funds 2 800 000 Assets under management PPK (PLN mn) 2 600 000 2 400 000 2 200 000 2 000 000 1 800 000 1 600 000 1 400 000 1 200 000 1 000 000 800 000 600 000 400 000 200 000 0 Q4’19 Q1’20 Q2’20 Q3’20 Q4’20  1.688 mn – PPK pa

  30. Slide 30: Commodity market

    7 Commodity market Commodity market growth drivers  Lunch of Agricultural Market – wheat and rye grains trading.  CO2 emission allowances: On 18 July 2019, TGE reopened the Financial Instruments Market which lists CO2 emission allowances; under MiFID2, allowances are a financial instrument.  Whit

  31. Slide 31: Agricultural Market: a new business pillar

    7 Agricultural Market: a new business pillar Summary  The Agricultural Market includes 34 authorised warehouses and 3 authorised brokers (Noble DM, DM BOŚ, PGE DM)  GPW Group offers trade in standarised wheat and rye grains.  The fee waiver expired at the end of September 2020. Market structure N

  32. Slide 32: 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 BondSpot Derivatives Organised GP

  33. Slide 33: 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

  34. Slide 34: IV. GPW Group financial results in Q3 2020

    I. About the GPW Group 3 II. Business activity in Q3 2020 7 III. Market highlights and opportunities 12 IV. GPW Group financial results in Q3 2020 35 V. Appendices 45

  35. Slide 35: EBITDA margin and net profit margin under pressure from PFSA fee

    EBITDA margin and net profit margin under pressure from PFSA fee Sales revenue EBITDA and EBITDA margin Net profit and net profit margin 67.8% 61.8% 49.8% 51.3% 51.5% 53.2% 42.5% PLN mn 36.2% 30.1% +7.2% 14.0% 102.2 97.2 PLN mn 88.4 -15.9% PLN mn 82.5 80.3 63.2 55.9 -22.2% 50.0 47.0 41.1 43.5 41.2 2

  36. Slide 36: YoY increase in trading revenue on the financial market

    YoY increase in trading revenue on the financial market Q3’20: 45,4%  Trading revenue on the financial market at PLN 40.2 mn in Trading revenue – financial market Q3’20 (+34.3% YoY and -8.8% QoQ) PLN mn  Average EOB turnover in shares per session on the Main Market: PLN 962.9 mn in Q3’20 vs. PLN 1

  37. Slide 37: Listing revenue

    Listing revenue Q3’20: 5,6% Listing revenue PLN mn  One new listing on the Main Market (Gaming Factory) and seven new listings on NewConnect in Q3’20.  IPO value in Q3’20 PLN 56 mn (+1020% YoY, +133.3% -0.6% QoQ) 5.4  Main Market SPO value in Q3’20 was PLN 1.2 bn vs. PLN 5.0 5.0 0.6 bn in Q2’20 v

  38. Slide 38: Stable revenue from information services

    Stable revenue from information services Q3’20: 14,7%  New GPW Group data agreements were signed in Q3’20 Revenue from information services: with users in different market segments: financial market and commodity market  GPW data:  2 data vendors Revenue (commodity market)  1 non-display data us

  39. Slide 39: Revenue from the electricity, gas, and property rights markets

    Revenue from the electricity, gas, and property rights markets Q3’20: 33,4%  Decrease of revenue from trade in electricity in Q3’20 to PLN 4.2 mn (-12.5% YoY) driven by a decrease in spot and forward Trading revenue – commodity market turnover. PLN mn  Decrease of revenue from trade in gas in Q3’2

  40. Slide 40: Revenue from clearing

    Revenue from clearing Q3’20: 10,9% Revenue from clearing  Decrease of revenue from clearing in Q3’20 to PLN 9.6 mn PLN mn (-11.1% YoY) -11.1%  Decrease of the revenue from the operation of the 12.4 13.1 Register of Certificates of Origin in Q3’20 to PLN 3.8 mn 10.8 11.4 9.6 (-37.8% YoY) driven by

  41. Slide 41: Operating expenses and financial expenses in Q3'20

    Operating expenses and financial expenses in Q3’20  Cost/income ratio (C/I)2 in Q3’20: 56.3% vs. 43.8% in Q3’19 Operating expenses: PLN 49.8 mn (+37.9% YoY, +10.6% QoQ)  Decrease of depreciation charges to PLN 8.7 mn (-2.2% YoY, -4.1% QoQ) mainly driven by property, plant and equipment. PLN mn 56.

  42. Slide 42: Share of profit of entities measured by equity method in Q3'20

    Share of profit of entities measured by equity method in Q3’20 Share of profit of entities measured by equity method  Group’s share of profit of entities measured by equity method in Q3’20 was PLN 4.6 mn (-2.9% PLN mn PAR KDPW CG YoY, +3.5% QoQ) 4.7  KDPW: 4.4 4.6  The Group’s share of net profit

  43. Slide 43: GPW Group's consolidated statement of financial position

    GPW Group’s consolidated statement of financial position PLN mn 30.09.2019 31.12.2019 31.03.2020 30.06.2020 30.09.2020  Increase of assets as at 30 Non-current assets, including among others 585,6 590,1 587,8 577,4 579,7 September 2020 vs. 31 December Property, plant and equipment 97,3 102,0 98,2 9

  44. Slide 44: V. Appendices

    I. About the GPW Group 3 II. Business activity in Q3 2020 7 III. Market highlights and opportunities 12 IV. GPW Group financial results in Q3 2020 35 V. Appendices 45

  45. Slide 45: GPW Group consolidated statement of comprehensive income

    GPW Group consolidated statement of comprehensive income PLN mn Q3'19 Q2'20 Q3'20  YoY increase in sales revenue in Q3’20 driven by an Revenue 82,5 102,2 88,4 increase of trading revenue on the financial market by 34.3% YoY i.e. PLN 10.3 mn to PLN 40.2 mn. Financial market 46,4 60,7 58,0 Trading 29

  46. Slide 46: GPW Group consolidated cash flows

    GPW Group consolidated cash flows PLN mn 9 months period ended 30 September of 2020 2019 Total net cash flows from operating activities 187,5 160,2  Positive cash flows from operating activities in Net prof it of the period 104,8 108,1 9M’20 increased by PLN 27.3 mn YoY mainly Adjustments: 106,0 83

  47. Slide 47: GPW Group's revenue structure: incremental for 12 months ended 30 September 2020

    GPW Group’s revenue structure: incremental for 12 months ended 30 September 2020 GPW Group: PLN 368.1 mn including TGE Group: PLN 143.7 mn Other revenue (0,9%) 0,9% Market Data - Commodity Market 0,2% Clearing 12,6% Register of Certificates od Origin Commodity Market: 39,0% 6,5% Trading - other 39,0

  48. Slide 48: Financial market: Trade in equities

    Financial market: Trade in equities Equity turnover value and number of transactions Average number of transactions per session (thous.) 37.0%1 Value of trading in equities (PLN bn) 125,2 80,2 70,1 73,1 72,1 72,2 65,9 55,3 51,9 55,5 48,4 251 46,4 220 236 207 188 205 203 190 204 191 194 147 2010 2011

  49. Slide 49: Financial market: Trade in derivatives

    Financial market: Trade in derivatives Derivatives turnover volume Number of open interest (thous.) 3.4%2 Volume (mn) 237,8 184,8 181,8 168,1 165,0 171,2 137,2 138,1 140,1 143,6 132,8  Revenue drivers: 104,2 15,5  Derivatives turnover volume 14,7 12,6 11,3 9,5 8,2 8,0 8,2 8,2 7,6 7,0  Number of o

  50. Slide 50: 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 2.6%1 1.037 1.062 307 845 450 767 2.0%2 347 327 599 535 260 413 407 196 324 731 147 282 612 255 239 135  Revenue drivers: 498 439 339 338 86 75 113 2

  51. Slide 51: Financial market: Listing

    Financial market: Listing Capitalisation of domestic companies Market Cap/GDP (%) 5.6%1 Market Cap of local comapanies (PLN bn) 36,8% 36,5% 34,8% 34,8% 32,0% 27,9% 28,9% 30,0% 30,0%  Revenue drivers: 25,0% 24,2% 20,6% 671 593 591 579  Capitalisation at YE 543 446 523 517 557 550 551 468  Value of

  52. Slide 52: Financial and commodity market: Information services

    Financial and commodity market: Information services Number of data vendors Domestic 14.7%1 Foreign 87 83 83 78 37 57 58 58 58 37 38 52 54 53 52 36 37 34 31 37 30 28 27  Revenue drivers: 33 46 45 50 42  Number of data vendors 19 20 21 24 27 24 25 25  Number of subscribers 2010 2011 2012 2013 2014

  53. Slide 53: Commodity market: Trade in electricity and gas

    Commodity market: Trade in electricity and gas Electricity turnover volume (TWh)1 Spot Forward 226,1 228,9 8.0%2 176,6 186,8 186,7 27,7 33,9 182,4 23,8 25,1 162,2 25,4 22,3 139,4 24,9 gaz 130,8 126,7 87,9 21,3 111,7 21,7 27,7  Revenue drivers: 13,4 25,2 198,3 195,0 154,3 163,0 161,6 137,3 157,0 109

  54. Slide 54: Commodity market: Trade in property rights

    Commodity market: Trade in property rights Property rights spot turnover (TWh) Green certifacates (OZE) Cogeneration certificates 2 6.3%1 62,2 58,9 58,1 59,3 48,8 50,8 50,2 19,9 43,9 26,6 29,8 30,8 13,2 15,1 39,3 37,7 36,0 24,0 25,9 19,7 21,8  Revenue drivers: 20,6 42,4 32,1 35,6 35,7 32,3 26,2 28,

  55. Slide 55: 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 4.3%1 Cogeneration certificates 47,2 48,5 47,5 41,1 42,2 36,6 37,2 23,4 18,9 24,5 19,9 35,1 15,3 29,5 31,1 10,8 10,7 21,6 11,9 21,0  Revenue drivers: 17,0 18,2 25,8 26,6

  56. Slide 56: 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

  57. Slide 57: 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

  58. Slide 58: 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

  59. Slide 59: IR events Contact: GPW Investor Relations

    IR events Disclaimer  25 February 2021 This presentation has been prepared by Giełda Papierów Wartościowych w Warszawie S.A. (“Warsaw Stock Exchange”, “GPW” or “Company”) for its Introduction of the period of limited investor communications shareholders, analysts, and other contractors. This presen

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