JSE Limited · JSE:JSE

JSE — FY2014 Earnings Presentation

21 slides from JSE's earnings presentation, March 2015

  1. Slide 1: 2014 Year-End Results Presentation

    2014 YEAR-END RESULTS PRESENTATION March 2015

  2. Slide 2: Operating environment 2014

    Operating environment 2014  Global financial markets faced headwinds – patchy economic growth  US & UK showed signs of recovery  Euro area and Japan remained lacklustre  Several emerging market peers showed signs of economic strain  In Africa, Ebola exacted human toll; impacted economic growth

  3. Slide 3: Operating environment 2015

    Operating environment 2015  IMF is expecting marginally improved global growth in advanced economies  SA economic growth prospects remain key to investor sentiment  Energy stability a significant concern  Fiscal policy a positive factor  End of QE in the US could impact market liquidity  Globa

  4. Slide 4: What 2014 meant for our stakeholders

    What 2014 meant for our stakeholders 19% 7% 2% Equity transactions Billable equity value traded Equity value traded 16% 30% 0.1% Equity Derivatives contracts Currency Derivatives contracts Commodity Derivatives value traded R116m 37% Bond Derivatives contracts 2014 capital investment 4

  5. Slide 5: How this translated in our business

    How this translated in our business 13% 6% R11m Colocation and R1.8bn R1.1bn Issuer Services Operating revenue Operating expenses New revenue streams 22% 25% 19% R704m R634m R818m EBIT NPAT Net cash flow from operations 25% 14% 742 cents 735 cents EPS HEPS  Dividend declared : 480 cents per share

  6. Slide 6: Financial performance

    Financial performance Group (R’m) 2014 2013 Revenue 1 779 1 578 Other income 61 77 Total revenue 1 840 1 655 Personnel expenses (467) (427) Other expenses (669) (650) EBIT 704 578 EBIT % 38% 35% Net finance income 127 118 Share of profit of equity-accounted investees 37 40 Profit before income tax 8

  7. Slide 7: Growth trend

    Growth trend Revenue trend Expenses trend 11% 6% 8 7.9 7.8 7.7 7.6 7.5 7.4 7.3 7.2 7 .1 6.9 6.8 6.7 6.6 6.5 6.4 6.3 6.2 6 .1 5.9 5.8 5.7 5.6 5.5 5.4 5.3 5.2 .1 5 4.9 4.8 4.7 4.6 4.5 4.4 4.3 4.2 4 .1 3.9 3.8 3.7 3.6 3.5 3.4 3.3 3.2 3 .1 2.9 2.8 2.7 2.6 2.5 2.4 2.3 2.2 2 .1 1.9 1.8 1.7 1.6 1.5 1.4 1.3

  8. Slide 8: Operating expenditure

    Operating expenditure R1.14bn R1.08bn  Total operating expenses  5.5% to R1.14bn (2013: 1.08bn)  Remuneration paid  9.4% yoy to R467m 466 786 (2013: R427m) 426 678  Headcount  to 485 staff (2013: 497)  Average annual salary increase  6%  Remuneration capitalised to projects  to R10m 170 68

  9. Slide 9: Cashflow view

    Cashflow view 2 500 111 58 2 000 818 347 50 1 500 Cash (R’m) 1 000 1 631 1 379 500 - Cash Dec Cash Investing Financing Dividends Forex Cash Dec 2013 generated activities activities paid impact on 2014 from cash balance operations  Strong balance sheet including negligible debt 9

  10. Slide 10: Business Review

    BUSINES REVIEW

  11. Slide 11: Capital Markets: Primary Market

    Capital Markets: Primary Market (Revenue previously included in Issuer Regulation) (R’m) 8% of total revenue 160  Revenue  22% to R134m because of a rise in capital raising and new listing activity 140 22% (2013: R110m) – growing annuity revenue  Number of new company listings  at 24; 7 new ETFs

  12. Slide 12: Capital Markets: Equity Market

    Capital Markets: Equity Market (R’m) 25% of total revenue 450 11%  Revenue  11% to R426m (2013: R385m) 400  Due to the changed nature of the trade type mix and the impact of the pricing 350 model to this mix  Billable value traded  7% 300  Colocation facility went live in Q2  Colocation trade

  13. Slide 13: Capital Markets: Bonds and Financial Derivatives

    Capital Markets: Bonds and Financial Derivatives (R’m) 13% of total revenue 250  Revenue  6% to R214m (2013: R202m)  Equity derivatives revenue  12% to R147m 6%  Number of contracts traded  16% yoy; value traded  18% 200  Currency derivatives revenue  2% to R23m  Contracts traded  30%; va

  14. Slide 14: Capital Markets: Commodity Derivatives

    Capital Markets: Commodity Derivatives (R’m) 3% of total revenue 60  Revenue  13% to R55m(2013: R49m) 13%  Contracts traded  2%  Value traded  0.1%  Secured the support of the Ministry of Agriculture and 50 Livestock in Zambia to allow listing of a range of Grain Derivative products  Commodi

  15. Slide 15: Trading and Market Services: Back-Office Services

    Trading and Market Services: Back-Office Services (BDA) (R’m) 16% of total revenue 300 13%  Revenue  13% to R268m (2013: R238m)  Somewhat Linked to Equity Market 250 transaction volumes  Paid R5m in rebates to equity members  Growth in number of transactions 200 significantly out of line with t

  16. Slide 16: Post-Trade and Information Services: Risk Management

    Post-Trade and Information Services: Risk Management (R’m) 18% of total revenue 350  Revenue  20% to R299m (2013: R249m)  Reflects Equity Market clearing 20% 300 fees only  Implemented billing model change on 30 June 250  Phase 2 of T+3 successfully implemented in October Strategic focus 200 

  17. Slide 17: Post-Trade and Information Services: Market Data

    Post-Trade and Information Services: Market Data (R’m) 12% of total revenue 250  Revenue  15% to R203m (2013: R177m) due to: 15%  growth in terminals 200  increased licensing of passive tracking funds  increase in the number of international clients 150 Strategic focus  Continue to expand inte

  18. Slide 18: Strong change agenda – increased capital expenditure

    Strong change agenda – increased capital expenditure (external spend only) Project / Initiative (R’m) FY 2014 Planned 2015 T+3 Phase 2 13 - T+3 Phase 3 7 23 Colocation 32 - Integrated trading and integrated clearing 24 123 Market Data automation 1 - Issuer regulation system (LID) 2 - New issuer serv

  19. Slide 19: Changes to the Board

    Changes to the Board There were a number of changes to our Board:  Humphrey Borkum retired as Chairman of the JSE on 8 May 2014  Nonkululeko Nyembeiza-Heita was appointed as Chairman on 9 May 2014  Michael Jordaan was appointed to the Board on 8 May 2014  Bobby Johnston retired as a Board member

  20. Slide 20: Looking ahead

    Looking ahead  2015 has started well  Large change agenda  Final Phase of T+3  Replacing derivatives trading and clearing technology to offer derivatives products, services and pricing that are globally competitive  Fast changing landscape in which we operate  Position JSE properly given impac

  21. Slide 21: Questions

    QUESTIONS

JSE — FY2014 Earnings Presentation on 6ix