Slide 1: JSE Investor Introduction 2023
2023 ©Johannesburg Stock Exchange. The content of this presentation is strictly reserved for the use of the JSE.
Slide 2: Agenda
Introduction 03 Business Segments 9 Financial Review 15 Summary 23 2
Slide 3: Introduction
Introduction ©Johannesburg Stock Exchange. 3
Slide 4: JSE public and private markets, services overview
PUBLIC MARKETS PRIVATE MARKETS JSE provides public marketplaces for raising capital and trading in equities, bonds, derivatives, currencies and commodities, while JSE Clear provides clearing services for listed derivatives. JSE Private Placements supports private markets by providing a forum to rais
Slide 5: Five-year financial overview
Total Revenue (Rm) EBITDA and EBITDA Margin (%) Capex (Rm) and Capex intensity (%) R174m R101m R89m R165m R127m 2 704 46% 40% 42% 41% 39% 2 528 2 576 8% 2 281 2 229 11 77 6% 5% 18 27 4% 5% 1 060 1 066 8 155 1 042 1 055 889 98 108 74 81 2018 2019 2020 2021 2022 2018 2019 2020 2021 2022 2018 2019 2020
Slide 6: All Share index hits record high and ends the year ahead of major markets
Global Indices FY 2022 Performance Net foreign flows (Rbn) All Share index hits record high and ends the year ahead of 10% 5% 150 major markets 0% 100 -5% -10% 50 -15% 0 -20% -25% -50 Lower volatility in H2 vs H1, -30% -100 although structurally higher than -35% -150 the previous 5 years -200 2019 2
Slide 7: Strategy priorities
Protect & Grow Transform Sustainable market STRATEGY • Advance product • Expand digital • Improve SME access FOCUS innovation footprint to capital • Digitisation and • Build market data • Accelerate global simplification business partnerships • Diversify revenue and scale • Become preferred Generate
Slide 8: Business Segments
Business Segments ©Johannesburg Stock Exchange.
Slide 9: Revenue by segment
2022 2021 % Information services Revenue Revenue Growth (Rm) (Rm) YoY Funds under management JIS 16% Capital markets* 1 067 1 036 3% Equity 4% Equity market: trading** 512 517 -1% 6% derivatives Equity derivatives 163 150 9% 15% 7% 5% 3% 14% BDA Primary market 158 153 3% Commodity 6% 15% derivatives
Slide 10: Primary market, equity derivatives, equity market trading
Revenue (Rm) Billable value traded (Rtr) and effective rate (bps)* Primary market Equity derivatives 6 6 5** 6 6 Seeks new equity and debt Includes index and single-stock futures and listings on the JSE’s Equity and options, can-do futures and options, 163 Interest Rate Markets 155 158 exchange-trad
Slide 11: Interest rate, currency and commodity derivatives
Interest Rate (Rm) and bond nominal value (Rtr) Currency Derivatives (Rm) and contracts traded (m) 80 Interest Rate Market 36 33 35 37 Currency Derivatives 74 31 52 ** 45 52 Provides cash bonds, floating Offers derivative instruments on rate notes, commercial paper a range of currencies and hybrid i
Slide 12: Clearing & Settlement, BDA, Funds under Management
Clearing and Settlement* (Rm) and effective rate (bps)** Clearing & Settlement 500 450 0,26 0,25 0,27 0,25 0,25 0,3 The JSE acts as the settlement authority for the exchange-traded Equity Market and as the 0,25 400 clearing house for the exchange-traded Derivatives Market (via the central counterpar
Slide 13: Information Services and JIS
Information Services (Rm) Information Services 310 356 350 388 Provides market data, reference data, corporate actions, client data, indices, 267 53 57 68 valuations, business intelligence and statistics. 49 43 Responsible for the promotion, licensing and sale of all JSE information products and 303
Slide 14: 2023 Financial Review
2023 Financial Review ©Johannesburg Stock Exchange.
Slide 15: Financial highlights
Profitability Cash & capital allocation Operating revenue Total OPEX EBITDA Cash generated Capex Cash balance +5% +7.5% 1% from operations R127m R2.2bn to R2.7bn to R1.9bn at R1.07bn R978m (2021: R2.4bn) (2021: R2.5bn) (2021: R1.8bn) (2021: R1.06bn) (2021: R917m) (2021: R165m) EPS & HEPS Regulatory
Slide 16: Operating expenses
Personnel costs up 7% (R43m) to R693m 7.5% • Gross remuneration increased due to annual salary adjustments and an increase in the average headcount (Share Plans business acquisition) R1.91bn R1.78bn Technology costs up 2% (R8m) to R345m • New growth initiatives, includes JIS and JPP 693 650 Deprecia
Slide 17: Capex investments and 2023 guidance
Investments made as planned in 2022: R174m R165m Grow the Business 7 • Information Services growth strategy 11 R127m R150m* • Securities collateral 20 77 Maintain the Business 18 R101m • Rejuvenation of infrastructure and systems • Regulatory enhancements R89m • Operational resilience 27 8 • Leaseho
Slide 18: Cash balance and regulatory capital
Investor protection & other funds (not distributable) Breakdown of cash balance (Rbn)*** • JSE Derivatives Fidelity Fund 2,5 2,4 • JSE Guarantee Fund 2,2 • BESA Guarantee Fund • JSE Empowerment Fund Dividend: R668m • JSE Reserve Portfolio 1,31 1,22 1,00 CAPEX: R150m Regulatory capital (regulatory mi
Slide 19: Cash flow: investing and financing activities
Investing activities Rm • Largely intangible assets (including renewal of multi-year licences), plant and equipment • Investment in government bonds Financing activities • Acquisition of treasury shares • Lease liability repaid * Including effect of exchange rate fluctuations on foreign-denominated
Slide 20: Dividend policy
Dividend policy Dividend per share (cents) 840 840 854 725 769 • Updated annual dividend policy from 150 100 185 a progressive approach to a pay-out ratio (67% - 100% of earnings) 690 725 754 769 655 2018 2019 2020 2021 2022 Ordinary dividend Special dividend 2018 2019 2020 2021 2022 Total ordinary
Slide 21: 2023 guidance
OPEX growth 5% – 8% 2023 CAPEX R130m – R150m guidance Dividend 67% – 100% pay-out ratio 21
Slide 22: Summary
Summary ©Johannesburg Stock Exchange.
Slide 23: Resilient business model underpinned by healthy cash position
01 Solid performance across segments 02 Growth in non-trading revenue supports diversification RESILIENT BUSINESS MODEL UNDERPINNED BY 03 Operational resilience a key strategic enabler HEALTHY CASH POSITION 04 Value creation through accretive M&A 05 Focus on sustainability, an embedded priority 23
Slide 24: Appendix
Appendix ©Johannesburg Stock Exchange.
Slide 25: Business segment value generation: Capital Markets
Business segment Value generation Listing services: Initial listing fee (% of the value of the stock listed for each issuance, following a tiered model) with a cap - Ongoing annual listing fees post initial listing - Documentation fees Capital Trading services: Trading fee on transactions either as
Slide 26: Business segment value generation: Post Trade and Information Services
Business segment Value generation Funds under Management: Management fee (includes both margin payments and default fund contributions) Post Trade Services BDA: Fee charged per transaction (tiered model), in connection with trade execution and accounting record keeping - Remainder: fixed monthly fee
Slide 27: JSE cost structure and OPEX trends
JSE cost structure (2021) Key highlights Total Expenses 1 Operating Expenses Cost structure predominantly driven by OPEX: - OPEX base mainly fixed in nature 14% - Variable expenses mostly linked to variable remuneration & non- 35% 36% recurring costs 65% 31% Personnel costs: salaries benchmarked
Slide 28: Repo rate and JSE half-year net finance income
SARB’s repo rate (%) and JSE half-year net finance income (Rm): 2018 – 2022 IFRS 16* - 2019 at R31m 125 6,62 6,75 7,00 6,55 6,53 5,96 105 6,00 5,19 85 5,00 4,21 65 3,56 4,00 122 3,53 3,50 118 115 108 105 104 45 96 3,00 89 78 68 25 2,00 5 1,00 H1'18 H2'18 H1'19 H2'19 H1'20 H2'20 H1'21 H2'21 H1'22 H2'
Slide 29: Thank You
Thank You ©Johannesburg Stock Exchange.