NZX Limited · NZX:NZX
NZX — Q3 2005 Earnings Presentation
17 slides from NZX's earnings presentation, Oct 19, 2005
Slide 1: Slide 1
Slide 1
Slide 2: NZX Q3 2005 Result Presentation
NZX Q3 2005 Result Presentation 19 October 2005 Slide 2
Slide 3: Today's presentation
Today’s presentation • NZX group strategy • Q3 result review • Discussion of individual business units Slide 3
Slide 4: NZX Group Strategy
NZX Group Strategy Markets Businesses Growth Businesses • EBITDA expansion • Diversify revenue • Operational leverage • Capture value from continued growth and evolution of NZ capital markets • Leverage operating skills and knowledge base Slide 4
Slide 5: NZX Q3 Group Results
NZX Q3 Group Results Q3 YTD Metric 2004 2005 Change 2004 2005 Change Operating revenue 4,427 5,531 25% 12,009 14,188 18% Operating expenditure 2,620 3,017 15% 7,639 8,838 16% Operating EBITDA 1,807 2,514 39% 4,370 5,318 22% NPAT 969 1,724 78% 2,999 3,257 9% Slide 5
Slide 6: NZX Group Business Unit Goals
NZX Group Business Unit Goals Markets Smartshares Link Market Services (50% Equity Ownership) • EBITDA expansion, grow • Attract more funds to existing • Attract large Trans- high margin revenue product Tasman issuers • Manage expenditure • Leverage operations team • EBITDA growth • Establish as lea
Slide 7: EBITDA expansion in the Markets Business
EBITDA expansion in the Markets Business Revenue growth Expense control • Volume of transactions •Staff • Listings •Fixed infrastructure support and • Market information maintenance •Ongoing research and development Slide 7
Slide 8: Key Medium Term Drivers of Transaction Growth
Key Medium Term Drivers of Transaction Growth Policy • Stock lending • Tax Participant activity Technology infrastructure and innovation Transaction • Direct Market • Liquidity providers in Volumes Access (DMA) dual listed stocks • Improved NZ clearing • Enhanced retail and settlement offerings and
Slide 9: Number and Value of Trades on All NZX Markets
Number and Value of Trades on All NZX Markets 1990-2004 Number of Trades 800 35 Value of Trades 700 30 Number of Trades (000) 600 Value of Trades $NZb 25 500 20 400 15 300 10 200 100 5 - - 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 Year Slide 9
Slide 10: Average Daily Trades by Month (2004 vs 2005)
Average Daily Trades by Month (2004 vs 2005) 3,000 2004 2005 2,800 Average daily trades 2,600 2,400 2,200 2,000 1,800 1,600 1,400 1,200 1,000 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Month Slide 10
Slide 11: Markets Business: Key Quarterly Financials
Markets Business: Key Quarterly Financials 2004 2005 Key Revenue Lines Q3 Q4 Q1 Q2 Q3 Listings 1,598 1,536 1,229 1,451 2,058 Transactions 1,141 1,148 1,129 1,153 1,351 Market data 712 676 681 713 853 Key Expense Lines Staff 1,388 1,427 1,511 1,510 1,611 IT 358 588 455 428 460 General 512 366 449 415
Slide 12: Growth Business Key Principles
Growth Business Key Principles •Familiarity •Connection to existing assets/revenue •Operational leverage (i.e., low variable cost) •ROI hurdle at 5% above WACC Slide 12
Slide 13: Smartshares
Smartshares Looking forward what Metric Q3 to watch FUM $204 m • Product expansion Investors 10,463 • Sales channel development to support Operating revenue $398k FUM growth in existing products Operating expenditure $375k • Policy and regulatory impact Operating EBITDA $23k Slide 13
Slide 14: Link Market Services
Link Market Services Link Business Model •Minimize fixed cost base and capital investment •Compete for all segments of NZ issuers, including Trans-Tasman registries (i.e., WBC) and debt •Deliver superior service and technology solution •Capture value from growth in number of NZ shareholders and list
Slide 15: Link Market Services key financial indicators
Link Market Services key financial indicators Key achievements Key Financial Indicators (000’s) Q3 • Positive operating EBITDA while Operating revenue 930 taking on start-up costs of Auckland office (4 full time staff) Operating expenditure 721 • WBC registry first client to use Operating EBITDA 208
Slide 16: NZX Group Priorities (Q4)
NZX Group Priorities (Q4) 1. EBITDA growth in markets business 2. Smartshares 3. Link Market Services 4. Development of settlement system opportunities (FSS) 5. Environment creation 6. Team Slide 16
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Slide 17