Slide 1: JSE Limited Annual Results Presentation
JSE Limited Annual Results Presentation 9 March 2023 2022 ©Johannesburg Stock Exchange.
Slide 2: Key highlights, Financial review, Conclusion, Appendix
Key highlights 3-10 Financial review 11-18 Conclusion 19-21 Appendix 22-37 ©Johannesburg Stock Exchange. 2
Slide 3: Key highlights
Key highlights ©Johannesburg Stock Exchange. 3
Slide 4: FY 2022 key highlights
FY 2022 key highlights Diversified revenue growth, with non-trading Group revenue of 25%; 40% growth in net finance income R2.7bn R1.9bn Cost growth reflects operating environment Operating Operating pressures across the board, including electricity and revenue expenses building utilities (e.g., die
Slide 5: Diversified market structure and segments support performance
Diversified market structure and segments support performance 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 -35% although
Slide 6: Performance supported by growth in non-trading revenue and strong commercial execution
Performance supported by growth in non-trading revenue and strong commercial execution Capital markets: ▪ Overall increase in market capitalisation of listed companies up 4% Capital Post-trade ▪ Colocation an important enabler of activity markets services ▪ Published equity market value traded flat
Slide 7: Growth across business segments
Growth across business segments 2022 2021 % Information services Revenue Revenue Growth (Rm) (Rm) YoY Funds under management JIS 1 067 1 036 3% 16% Capital markets* 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
Slide 8: Positive progress in 2022 across our strategic pillars
Positive progress in 2022 across our strategic pillars Sustainable Protect & Grow Transform marketplace ✓ Obtained ICH* operator licence ✓ JPP: 22 issuances & R12bn in investor ✓ Published sustainability and climate + + ✓ Introduced transition & sustainability capital onboarded change disclosure gui
Slide 9: Financial review
Financial review ©Johannesburg Stock Exchange. 9
Slide 10: Key financial highlights
Key financial highlights Profitability Cash & capital allocation Operating revenue Total OPEX EBITDA Cash generated Capex Cash balance from operations +5% +7.5% 1% 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: R165
Slide 11: OPEX growth reflects operating environment pressures across the board
OPEX growth reflects operating environment pressures across the board 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
Slide 12: Continued investments in operational resilience and growth
Continued investments in operational resilience and growth 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 • Regulator
Slide 13: Strong balance sheet underpinned by healthy cash generation
Strong balance sheet underpinned by healthy cash generation 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
Slide 14: Soundly capitalised group
Soundly capitalised group 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 Regulat
Slide 15: Ordinary dividend up 2%; Committed to maximising shareholder returns
Ordinary dividend up 2%; Committed to maximising shareholder returns Dividend policy Dividend per share (cents) 840 840 854 725 769 • Updated annual dividend policy from 185 150 100 a progressive approach to a pay-out ratio (67% - 100% of earnings) 690 725 754 769 655 2018 2019 2020 2021 2022 Ordina
Slide 16: FY 2023 expectations
FY 2023 expectations OPEX growth 5% – 8% 2023 CAPEX R130m – R150m guidance Dividend 67% – 100% pay-out ratio 16
Slide 17: Conclusion
Conclusion ©Johannesburg Stock Exchange. 17
Slide 18: Strategic priorities geared towards maximising short-term opportunities
Strategic priorities geared towards maximising short-term opportunities and future proofing the business Protect & Grow Transform Sustainable market STRATEGY • • • Improve SME access FOCUS Advance product Expand digital innovation footprint to capital • Digitisation and • Build market data • Acceler
Slide 19: Committed to stakeholder value creation
Committed to stakeholder value creation 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 s
Slide 20: Appendix
Appendix ©Johannesburg Stock Exchange. 20
Slide 21: Market Drivers: Primary markets
Market Drivers: Primary markets New bond listings Aggregate market 774 Number of IPOs Additional capital cap. of all equity (2021: 706) 5 raised listed instruments Nominal value of (2021: 8) R13bn on the JSE listed bonds (2021: R25bn) 4% YoY* of R4tr (2021: R4tr) New bond listings - No. of warrants
Slide 22: Market Drivers: Secondary markets
Market Drivers: Secondary markets Published equity Colocation activity value traded Net foreign Interest rate as a % of Net foreign Flat YoY inflows*** (bonds) derivatives contracts total value traded outflows*** (2021: 5%) of R27bn traded 66% (equities) (2021: R12bn) +14% to 14m (2021: 58%) of R85b
Slide 23: Market drivers: Post-trade services and JIS
Market drivers: Post-trade services and JIS Published equity No. of value traded transactions/deals flat YoY -1% YoY JIS new (2021: 5%) (2021: -12% YoY) customers 21* Published ADV ADTs (2021: 7) flat YoY at R24bn -1% YoY to 322k (2021: R24bn) (2021: 325k) * Includes registry and share plans clients
Slide 24: 2018 – 2022 revenue segment data
2018 – 2022 revenue segment data Primary Market (Rm) Equity Trading (Rm) Equity Derivatives (Rm) and value traded (Rtr) 6 6 6 6 5* 155 147 152 153 158 499 493 489 479 145 150 163 433 143 143 2018 2019 2020 2021 2022 2018 2019 2020 2021 2022 2018 2019 2020 2021 2022 Revenue Revenue Equity derivatives
Slide 25: 2018 – 2022 revenue segment data
2018 – 2022 revenue segment data Clearing and Settlement* (Rm) and Back-Office Services (Rm) and cents per Post-trade services effective rate (bps)** transaction 0,27 0,26 0,64 0,64 0,64 0,25 0,25 0,25 0,64 446 423 438 0,60 376 404 385 333 351 351 303 2018 2019 2020 2021 2022 2018 2019 2020 2021 202
Slide 26: Multi-year depreciation profile of assets and known future CAPEX
Multi-year depreciation profile of assets and known future CAPEX R273m R278m* R258m R249m 17 18 2 18 11 25 39 27 41 R202m 39 38 38 38 39 R110m 90 74 68 83 71 1 25 104 102 84 92 92 92 2018 2019 2020 2021 2022 2023F Existing assets ITaC 1 Application of IFRS 16 on lease Licences 2023B CAPEX envelope J
Slide 27: Evolution of interest rates and impact on JSE's net finance income
Evolution of interest rates and impact on JSE’s 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,
Slide 28: Stable operating performance and higher net finance income
Stable operating performance and higher net finance income (Rm) 2022 2021 D (%) Operating revenue 2 650 2 517 5% Other income 54 59 -8% Total revenue 2 704 2 576 5% Personnel expenses 693 650 7% Other operating expenses 946 871 9% EBITDA 1 066 1 055 1% EBITDA (%) 39% 41% -2 pts Depreciation and amor
Slide 29: Balance sheet
Balance sheet (Rm) 31 December 2022 31 December 2021 30 June 2022 Assets Non-current assets 1 992 1 967 1 879 Property and equipment 165 176 168 Intangible assets 696 727 738 Investment in associate 329 328 315 Other non-current assets 801 736 658 Current assets 59 345 59 071 64 359 Margin deposits
Slide 30: Financial metrics
Financial metrics Ratios 2022 2021 2020 2019 2018 2017 Operating margin (EBIT) 29% 31% 32% 31% 41% 40% EPS 911.1 874.1 936.7 814.8 1 056.5 1 006.0 HEPS 917.7 878.9 936.7 814.6 1 056.2 996.5 PE 11.9 12.8 12.6 14.6 15.7 15.4 Dividend yield (ordinary) 7.1% 6.7% 6.3% 5.8% 4.0% 4.0% Dividend yield (total
Slide 31: Equity Market: JSE effective pricing trend
Equity Market: JSE effective pricing trend Deliberate declines in fees over time, heightened impact on trading 2018 2019 2020 2021 2022 • 2016 option delta (OD) fee reduced to zero. • 2017 BDA fee reduced by 8% (from R0.65). 0,64 0,64 0,64 0,64 • 2018 new tiered billing model resulted in 0,60 a 12%
Slide 32: A2X vs. JSE | Equity Market price-points
A2X vs. JSE | Equity Market price-points Trading fees • 2022 effective rates for onscreen trading (AT, UT, XT) are used for the JSE Effective Rates o The JSE has a tiered billing model with caps Basis Points • A2X charges 0.20bps for the price maker (aggressor) and 0.40bps for the price taker (passi
Slide 33: Slide 33