Slide 1: ASX Limited – 2023 Half-Year Results Presentation Slides
16 February 2023 Australian Securities and Investments Commission ASX Market Announcements Office Mr Nathan Bourne ASX Limited Senior Executive Leader, Market Infrastructure 20 Bridge Street Level 5, 100 Market Street SYDNEY NSW 2000 SYDNEY NSW 2000 ASX LIMITED – 2023 HALF-YEAR RESULTS PRESENTATION
Slide 2: ASX Limited 1H23 results
ASX Limited 1H23 results 16 February 2023
Slide 3: Contents
Contents 1 1H23 results overview Helen Lofthouse, CEO Financial performance 2 Andrew Tobin, CFO 3 Strategic themes Helen Lofthouse 4 Outlook and summary Helen Lofthouse 5 Q&A Helen Lofthouse and Andrew Tobin
Slide 4: 1H23 overview
Helen Lofthouse, CEO 1H23 overview
Slide 5: 1H23 results overview
1H23 results overview Presentation agenda FINANCIAL Resilient operating performance in volatile macro PERFORMANCE environment. Current CHESS remains reliable, robust and CHESS supportable. Reassessment of solution design underway. STRATEGIC Key focus areas for ASX. THEMES 4 |
Slide 6: 1H23 financial results summary
1H23 financial results summary Resilient operating performance in volatile markets $ change % change on 1H23 on pcp pcp Operating revenue $499.5m ($1.9m) (0.4%) Resilient operating revenue performance with growth in Total expenses $173.9m ($10.9m) (6.8%) Listings and Technology and Data offset by de
Slide 7: Current CHESS
Current CHESS Reliable, robust and supportable Track record of high performance with Current CHESS headroom to manage volume surges ASX continues to invest 10m 10m in CHESS. Tested capacity Capacity and resilience Daily significantly strengthened trading 7m 7m volume Peak during pandemic in recent y
Slide 8: CHESS replacement progress update
CHESS replacement progress update Actions taken so far Ongoing risk management Nov Feb activity 2022 2023 Jan Jan Addressing 2023 2023 recommendations from independent report • Project paused and reset • RFI to vendors to explore commenced Feb solution design options • Project Director for CHESS rep
Slide 9: Path to CHESS replacement solution design
Path to CHESS replacement solution design Key next steps Critical path to solution design Reassessment of Solution Solution Solution design Implementation solution design assessment finalisation announced plan • Broad range of options • Vendor RFI issued • Detailed design and • In consultation with
Slide 10: Financial performance
Andrew Tobin, CFO Financial performance
Slide 11: 1H23 ASX financial results
1H23 ASX financial results Resilient underlying operating performance in volatile macro environment 1H23 2H22 1H22 1H23 v $m $m $m 1H22 Listings 109.7 109.8 104.1 5.4% Operating revenue flat, reflecting diversified business Markets 138.8 156.7 141.9 (2.2%) model in volatile macro environment; growth
Slide 12: Listings
22% Listings Revenue recognition policy offsets slowdown in activity 1H23 v Initial listing fee revenue contribution per period 1H23 2H22 1H22 1H22 under AASB 15 ($ million)1 Revenue ($million) 109.7 109.8 104.1 5.4% Annual listing 53.9 55.6 53.2 1.4% $0.2 Initial listing 11.8 11.8 11.1 6.5% $1.3 Se
Slide 13: Markets
Markets 28% Growth in equity options activity offset by decline in futures and cash market trading 1H23 v Rates futures volumes (million) 1H23 2H22 1H22 1H22 Revenue ($million) 138.8 156.7 141.9 (2.2%) 80 Futures and OTC 98.1 111.0 100.8 (2.7%) 60 Cash market trading 32.4 37.2 34.1 (4.9%) Equity opt
Slide 14: Technology and Data
Technology and Data Growing demand for market data and expansion of the ecosystem 23% 1H23 v Information Services revenue contribution ($million) 1H23 2H22 1H22 1H22 80 Revenue ($million) 117.5 113.3 108.6 8.3% Information services 70.4 66.9 63.6 10.7% 60 Technical services 47.1 46.4 45.0 4.8% 40 Ke
Slide 15: Securities and Payments
27 % Securities and Payments Slowdown in cash markets activity impacting issuer and equity post-trade services 1H23 v On-market value cleared ($billion) 1H23 2H22 1H22 1H22 Revenue ($million) 133.5 141.5 146.8 (9.1%) Issuer services 32.7 36.1 42.4 (22.8%) 919 Equity post-trade services 69.5 75.7 77.
Slide 16: 1H23 ASX total expenses
1H23 ASX total expenses Operating expense growth led by higher staff and administration costs 1H23 v Staff expense growth reflects wage and headcount increases to 1H23 2H22 1H22 1H22 support key initiatives across technology, customer and risk Staff 96.5 86.0 85.7 (12.5%) management Occupancy 4.9 4.
Slide 17: 1H23 ASX net interest income
1H23 ASX net interest income ASX Group net income growth offset by subdued investment spread income 1H23 v Average collateral balance ($billion) 1H23 2H22 1H22 1H22 11.8 11.8 12.1 Net interest income on ASX Group cash 13.5 0.2 (0.8) Large 2.3 3.6 3.9 Lease financing cost (1.3) (1.4) (1.5) 12.6% Grou
Slide 18: 1H23 ASX balance sheet and shareholder returns
1H23 ASX balance sheet and shareholder returns Stable balance sheet; 90% dividend payout policy 31 Dec 22 30 Jun 22 1H23 v Balance sheet Shareholder returns 1H23 2H22 1H22 $m $m 1H22 Cash and other financial assets 12,025.2 14,457.0 Underlying return on equity 13.4% 13.8% 13.5% (0.1%) Intangibles (e
Slide 19: Strategic themes
Helen Lofthouse, CEO Strategic themes
Slide 20: Strategic themes
Strategic themes Developing a purpose-driven strategy Supporting the nation’s financial system stability Focusing on customers Focused on the highest standards of risk Understanding customers is vital management and regulatory compliance for effective ASX operations and growth Technology investment
Slide 21: Focusing on customers
Focusing on customers Understanding our customers is vital for effective ASX operations and growth Equity Market Management Increased number single consultation stock options available New Issuer Services Improving New ETPs listed pricing model customer Customer driven engagement growth CHESS Replac
Slide 22: Supporting the nation's financial system stability
Supporting the nation’s financial system stability Focused on the highest standards of risk management and regulatory compliance Our licences are important assets, we do not take them for granted Focused on achieving Strong risk management foundation supported evolving by robust management framework
Slide 23: Technology investment
Technology investment Technology is fundamental to ASX for current services and business growth Ongoing investment in technology Enable Australia and New Zealand’s financial markets to operate on contemporary, Transformation flexible technology Resilience Reduce incidents and outages across the port
Slide 24: Focusing on people and culture
Focusing on people and culture Our people are proud to work at ASX and understand the criticality of what we do Annual engagement survey Strategic planning - people FY23 OVERALL ENGAGEMENT SCORE Align with strategy 67% Up from 64% in FY22 Purpose Values Culture CREATING A HEALTHY, SAFE AND INCLUSIVE
Slide 25: Sustainability
Sustainability ASX recognises the importance of its role in supporting a sustainable future for Australia Sourcing 100% renewable energy in FY23. ASX On track to meet target of net zero Scope 1 and Scope 2 emissions in FY25. Supporting decarbonisation of the Australian economy with evolving As a pro
Slide 26: Outlook and summary
Helen Lofthouse, CEO Outlook and summary
Slide 27: Outlook
Outlook Ongoing market volatility anticipated for remainder of FY23 FY23 Outlook guidance • Uncertain outlook for IPOs for remainder of FY23 • Expenses growth guidance of 10-12% reflecting: • Continued volatility in cash markets likely o Ongoing build-out of technology, risk management and customer
Slide 28: Summary
Summary Resilient 1H23 performance FINANCIAL Resilient operating performance in volatile macro environment. PERFORMANCE Current CHESS remains reliable, robust and supportable. CHESS CHESS replacement solution design announcement targeted for December quarter of 2023 with implementation plan to follo
Slide 29: Q&A
Q&A
Slide 30: Thank you
Thank you ASX
Slide 31: Appendices
Appendices 1 Financial appendix 2 ASX background information 3 Clearing and Settlement Boards
Slide 32: Appendices: Financial appendix
Appendices 1 Financial appendix
Slide 33: 1. Income statement
1. Income statement 1H21 2H21 1H22 2H22 1H23 $million $million $million $million $million Annual listing 43.5 46.4 53.2 55.6 53.9 Initial listing 9.0 9.6 11.1 11.8 11.8 Secondary raisings 31.4 32.7 35.1 38.0 39.5 Investment products and other listing 5.0 5.3 4.7 4.4 4.5 Listings 88.9 94.0 104.1 109.
Slide 34: 1. Income statement (continued)
1. Income statement (continued) 1H21 2H21 1H22 2H22 1H23 $million $million $million $million $million Staff 75.9 78.4 85.7 86.0 96.5 Occupancy 4.8 4.6 4.5 4.4 4.9 Equipment 21.0 21.5 23.6 24.2 26.0 Administration 13.0 14.9 13.0 18.6 19.8 Variable 6.8 7.4 8.0 7.5 6.3 ASIC levy 4.6 3.9 3.3 4.4 3.0 Ope
Slide 35: 2. Balance sheet
2. Balance sheet 31 Dec 20 30 Jun 21 31 Dec 21 30 Jun 22 31 Dec 22 $million $million $million $million $million Assets Cash and other financial assets 13,753.7 13,381.9 13,083.9 14,457.0 12,025.2 Intangibles (excluding software) 2,325.7 2,325.6 2,325.5 2,325.5 2,325.5 Software 209.0 240.9 279.4 311.
Slide 36: 3. Key financial ratios
3. Key financial ratios 1H21 2H21 1H22 2H22 1H23 Basic earnings per share (EPS) 1 124.9c 123.5c 129.3c 133.4c 38.1c Diluted EPS 1 124.9c 123.5c 129.3c 133.4c 38.1c Underlying EPS 2 124.9c 123.5c 129.3c 133.4c 129.1c Dividend per share – interim 112.4c - 116.4c - 116.2c Dividend per share – final - 1
Slide 37: 4.1 Listings
4.1 Listings 1H21 2H21 1H22 2H22 1H23 Total domestic market capitalisation ($bn) – period end $2,237 $2,498 $2,603 $2,308 $2,463 Total number of listed entities (includes all stapled entities) – period end 2,200 2,228 2,299 2,317 2,292 Number of new listings 85 91 150 67 40 Average annual listing fe
Slide 38: 4.2 Markets: Futures and OTC
4.2 Markets: Futures and OTC 1H21 2H21 1H22 2H22 1H23 Trading days 130 126 130 126 129 Total contracts traded – futures ('000) ASX SPI 200 7,770 6,655 6,837 7,978 7,791 90 day bank bills 5,437 7,396 9,387 11,848 12,725 3 year bonds 24,112 21,486 20,420 22,198 19,560 5 year bonds 1 45 1,093 614 299 1
Slide 39: 4.2 Markets: futures and OTC (continued)
4.2 Markets: futures and OTC (continued) 1H21 2H21 1H22 2H22 1H23 Total contracts traded – options on futures ('000) ASX SPI 200 21 7 3 6 3 3 year bonds 3 0 0 0 0 Overnight 3 year bonds 0 0 5 0 1 Intra-day 3 year bonds 12 15 7 0 9 10 year bonds 1 42 19 3 0 0 Electricity 56 60 46 55 36 Other 2 0 0 0
Slide 40: 4.2 Markets: equity options
4.2 Markets: equity options 1H21 2H21 1H22 2H22 1H23 Trading days 130 124 130 123 128 Single stock options (‘000) 29,124 27,763 28,613 31,560 28,076 Index options and futures (‘000) 2,826 2,502 2,561 3,335 3,323 Average daily single stock options contracts 224,029 223,896 220,096 256,582 219,341 Ave
Slide 41: 4.2 Markets: cash market trading
4.2 Markets: cash market trading 1H21 2H21 1H22 2H22 1H23 Trading days 130 124 130 123 128 Total cash market trades ('000) 194,109 190,041 213,187 235,089 198,556 Average daily cash market trades 1,493,145 1,532,587 1,639,903 1,911,289 1,551,217 Continuous trading value ($bn) $530.608 $463.823 $530.
Slide 42: 4.3 Technology & Data: Technical Services
4.3 Technology & Data: Technical Services 1H21 2H21 1H22 2H22 1H23 Technical Services (number at period end) ASX Distribution Platform Australian Liquidity Centre cabinets 345 368 369 386 388 Connection Services ASX Net connections 104 103 104 106 102 ASX Net service feeds 449 452 466 476 470 Austra
Slide 43: 4.4 Securities & Payments: Austraclear
4.4 Securities & Payments: Austraclear 1H21 2H21 1H22 2H22 1H23 Settlement days 130 124 130 123 129 Transactions ('000) Cash transfers 290 275 278 282 298 Fixed interest securities 545 555 541 688 744 Discount securities 53 50 51 53 68 Foreign exchange 3 2 2 2 2 Other - 1 - - - Total transactions 89
Slide 44: 4.5 CCP participant collateral balances
4.5 CCP participant collateral balances 1H21 2H21 1H22 2H22 1H23 $million $million $million $million $million Balances at period end ASX Clear – initial margins 725.5 971.3 710.7 1,257.7 941.9 ASX Clear (Futures) – initial margins House1 2,380.2 2,628.2 2,354.8 2,449.3 2,084.0 ASX Clear (Futures) –
Slide 45: 5. ASX Group own cash movement
5. ASX Group own cash movement 1H21 2H21 1H22 2H22 1H23 $million $million $million $million $million ASX Group cash Total cash and short-term investments 13,753.7 13,381.9 13,083.9 14,457.0 12,025.20 Less participants’ margins and commitments (12,574.7) (12,214.8) (11,838.1) (13,276.7) (10,801.0) AS
Slide 46: Appendices: ASX background information
Appendices 2 ASX background information
Slide 47: ASX overview
ASX overview (referencing FY22 financials)
Slide 48: Australian Securities Exchange
Australian Securities Exchange Exchange operating at the heart of the globally attractive, deep and liquid Australian market Integrated offering Diversified revenue streams Largest interest rate derivatives market in Asia Pacific; fourth largest globally1 5th Supported by 5th largest pool of pension
Slide 49: ASX overview
ASX overview Four businesses supported by enabling functions Listings Markets Technology Securities and Data and Payments Technology centre of excellence Customer, delivery and digital Enabling functions: finance, legal, compliance, strategy, HR and risk 48 |
Slide 50: Diversified businesses
Diversified businesses Delivers revenue1 across all market cycles Securities and Payments Austraclear Listings 6% • Provides central counterparty clearing and Cash Market • Provides a facility for entities to list, raise capital settlement services for equities Settlement Listings and have their sec
Slide 51: Diversified revenue mix
Diversified revenue mix Delivers revenue across market cycles LSE 4% 3% 13% 12% 68% DB 15% 44% 27% 6% 7% 1% ENX 15% 32% 25% 4% 15% 7% 3% TXE 26% 24% 15% 35% NDAQ 11% 10% 15% 12% 31% 14% 7% ICE 8% 46% 32% 14% CME 80% 12% 7% CBOE 85% 7% 8% SGX 9% 20% 9% 50% 11% JPE 12% 32% 21% 8% 20% 8% HKE 10% 28% 25
Slide 52: Listings overview
Listings overview
Slide 53: Listings
Listings Key points 2,000+ listed companies across diverse sectors Largest number of secondary offerings in the world in 20211 500+ diversified funds across Exchange Traded Products, listed investment companies, listed investment trusts and mFunds Robust regulatory environment Efficient capital rais
Slide 54: Listings
Listings ASX is one of the world’s most active exchanges by volume of listings Number of new listings by exchange in calendar year 2022 73 2 16 5 119 107 107 SPAC Listings 85 74 69 10 3 20 1 12 Selected exchanges as at 31 December 2022. 53 | Source: New listings data sourced from exchange website. N
Slide 55: Listings
Listings 21% Listings Investment products Annual listings Initial listings Secondary raisings and other listing • A regulated exchange offering a deep • A regulated, efficient market for entities • A deep, liquid market and efficient • Broad distribution via a deep and liquid and liquid market where
Slide 56: Listings
Listings 21% Listings Investment products Annual listings Initial listings Secondary raisings and other listing • ASX-listed entities • Private companies seeking to raise • ASX-listed entities • Domestic and global fund managers capital, ASX-listed companies executing de-mergers, offshore companies
Slide 57: Listings performance
Listings performance 21% FY22 revenue split (under AASB 15) FY18 – FY22 revenue (under AASB 15) 200 11% 4% 7.1% CAGR over the past 5 years 200 9.1 150 9.4 10.3 34% 9.3 8.0 73.1 $ millions 150 51.2 56.1 64.1 $ millions 23% 100% 58.9 100 22.9 100 18.6 19.2 18.4 18.6 50 51% 50 93.8 92.4 108.8 85.8 89.9
Slide 58: Markets overview
Markets overview oy!
Slide 59: Markets
Markets Key points Largest interest rate derivatives market in Asia Pacific; fourth largest globally1 89% share of on-market equities Centre Point is the largest exchange operated dark pool in Asia Pacific Equity derivative contracts transacting $10 billion a day in notional exposure Near 24 hour tr
Slide 60: Markets
29% Markets Markets Futures and OTC Cash market trading Equity options • Trading and clearing of derivatives including futures and • Australia’s primary venue for trading cash market • Trading of single stock and index options, and clearing options on interest rates, equity indices, agricultural and
Slide 61: Markets
29% Markets Markets Futures and OTC Cash market trading Equity options • Brokers and traders • Brokers, traders and investors • Brokers and traders • Clearing participants • Clearing and settlement participants • Banks and institutional and retail end-users with risk • Banks, institutional and corpo
Slide 62: Markets performance
29% Markets performance FY22 revenue split FY18 - FY22 revenue 400 2.4% CAGR over the past 5 years 350 18.5 5% 300 19.9 11.6 15.5 300 21.9 64.2 250 51.9 71.3 61.0 $million 24% 24% 45.7 $million 200 200 150 100% 233.3 242.9 100 212.7 214.4 211.8 100 71% 50 0 0 Futures and OTC Cash market trading Equi
Slide 63: Technology and Data overview
Technology and Data overview
Slide 64: Technology and Data
Technology and Data Key points Provider of ASX source data Information Services revenues underpinned by demand from professional market participants on ASX and ASX24 real time data Technical Services provides highly efficient connectivity to the diverse financial market ecosystem via the Australian
Slide 65: Technology and Data
22% Technology and Data Technology and Data Information Services Technical Services • Provides source of truth data to support price discovery in cash equities, derivatives and • Provides access to all ASX markets and services, and provides highly efficient debt markets; valuation of assets, indices
Slide 66: Technology and Data
22% Technology and Data Technology and Data Information Services Technical Services • Professional traders, investors, risk managers and compliance service providers • Brokers, traders and investors • Provider of solutions to trading, clearing and settlement participants • Clearing and settlement pa
Slide 67: Technology and Data performance
22% Technology and Data performance FY22 revenue split FY18 – FY22 Information Services revenue 220 140 9.6% CAGR over the past 5 years 170 41% 120 19.9 18.5 100 16.8 21.8 $ millions 18.3 $ millions 120 16.2 80 14.9 15.0 9.0 10.5 28.8 100% 25.0 70 59% 60 22.0 24.6 19.2 40 20 60.3 47.0 47.6 50.4 56.2
Slide 68: Securities and Payments overview
Securities and Payments overview
Slide 69: Securities and Payments
Securities and Payments Key points Central counterparty for equity clearing and settlement for ASX, CBOE and National Stock Exchange markets Only cash equity clearing and settlement provider in Australia Provider of registry and issuer services for equity and debt markets Facilitates collateral mana
Slide 70: Securities and Payments
28% Securities and Payments Securities and Payments Equity post-trade services Issuer Services Austraclear • Provides clearing and settlement services to the cash equity market through ASX Clear • Services provided to issuers post IPO • Provides efficient settlement, depository and ASX Settlement, b
Slide 71: Securities and Payments
28% Securities and Payments Securities and Payments Equity post-trade services Issuer Services Austraclear • $2.6tn assets held • $2.7tn debt securities held • ~2,300 issuers • Settles ~$80bn transactions daily • 70 participants • ~1,500 participants • ~3m active shareholders Market position1 • ~20.
Slide 72: Securities and Payments performance
28% Securities and Payments performance FY22 revenue split FY18 – FY22 revenue 300 7.9% CAGR over the past 5 years 250 20% 300 250 56.7 200 58.6 $ millions 27% 56.2 $ millions 200 150 50.8 75.3 78.5 51.7 27% 100% 60.8 26% 150 100 53% 49.0 48.8 100 50 153.1 127.4 143.7 50 104.8 108.8 0 0 Equity post-
Slide 73: Appendices: Clearing and Settlement Boards
Appendices 3 Clearing and Settlement Boards
Slide 74: Clearing and Settlements Boards
Clearing and Settlements Boards Governance arrangements to support independence Simplified ASX Group Structure • Managing conflicts of interest is part of ASX’s licence obligations ASX Limited • Clearing and Settlement (CS) facility licences held by separate subsidiary companies. • Role, responsibil
Slide 75: Disclaimer
Disclaimer The material contained in this document is a presentation of general information about the ASX Group’s activities current as at the date of this presentation (16 February 2023). It is provided in summary and does not purport to be complete. You should not rely upon it as advice for invest