Slide 1: ASX Limited 2020 Half-Year Results Presentation cover letter
13 February 2020 For personal use only 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 – 2020 HALF-YEAR
Slide 2: 2020 ASX Limited Half-Year Results Presentation
For personal use only 2020 ASX Limited Half-Year Results Presentation 13 February 2020
Slide 3: Agenda
Agenda For personal use only 1H20 overview Dominic Stevens – CEO Strategic update Dominic Stevens Financial performance Gillian Larkins – CFO Summary and outlook Dominic Stevens Q&A – analysts followed by media Dominic Stevens and Gillian Larkins 2 |
Slide 4: ASX 1H20 highlights
ASX 1H20 highlights Delivering on reliable earnings track record and making strategic progress For personal use only Diversified business generating sustained growth in shareholder returns • EBIT up 6.0% driven by strong trading volumes and increased demand for connectivity, cabinets and data • Net
Slide 5: ASX 1H20 financial results
ASX 1H20 financial results Solid operational earnings growth For personal use only Change % change 1H20 on pcp on pcp Operating revenue $454.9m +$30.2m +7.1% • Reflecting broad growth across ASX • Heightened in 1H20 due to annualisation of increased head count in FY19 Total expenses $139.8m ($12.5m)
Slide 6: ASX activity drivers
ASX activity drivers Strong equity and futures trading and growth in Austraclear deposits Total capital raised ($billion) Cash market trading – ASX value on-market ($billion) For personal use only 7.1% CAGR* 582 24 530 541 536 50 24 37 2H 512 2H 19 1H 1H 62 639 55 530 539 510 587 39 37 45 42 454 FY1
Slide 7: ASX revenue up 7.1%
ASX revenue up 7.1% Driven by market activity and flow-on benefits from customer focused initiatives For personal use only 1H20 key revenue drivers Revenue growth supported by • Global team supported by ASX’s high-performance platform driving customer acquisition Equity trading value up 8.9% • Attra
Slide 8: Strategic update
For personal use only Dominic Stevens – CEO Strategic update
Slide 9: Building an exchange for the future
Building an exchange for the future Strong momentum in our customer focused, technology driven strategy For personal use only Technology driven Customer focused New opportunities to create Pursuing adjacent products and services, and Expertise and capacity growth opportunities reduce risks and costs
Slide 10: Contemporary, flexible and resilient operating platform: risk and governance
Contemporary, flexible and resilient operating platform Strengthening stakeholder confidence in ASX For personal use only Risk management and governance Technology driven Customer focused ˃ New IT service management tool to > Faster resolution and reduced impact of Building Stronger Foundations supp
Slide 11: Contemporary, flexible and resilient operating platform: technology infrastructure
Contemporary, flexible and resilient operating platform Strengthening stakeholder confidence in ASX For personal use only Technology infrastructure Technology driven Customer focused ˃ External connectivity network: Completing FY20 implementation of fully consolidated ˃ Standardised, consolidated an
Slide 12: Expanded, enhanced core customer value proposition
Expanded, enhanced core customer value proposition Making business easier by providing solutions to customer challenges For personal use only New and enhanced Technology driven Customer focused products and services Ongoing Completing FY20 > Contemporary, flexible, single sign-on > Enhanced user exp
Slide 13: Pursuing adjacent growth opportunities
Pursuing adjacent growth opportunities Leveraging ASX’s expertise, independence and infrastructure Contemporary, For personal use only flexible and resilient ASX operating platform Opportunities Technology driven Customer focused Progress > DAML software development ˃ Risk and operational cost benef
Slide 14: CHESS replacement delivering upgraded security, resilience, performance
CHESS replacement delivering upgraded security, resilience, performance Project on schedule for industry-wide test environment to open in July 2020 For personal use only Project delivering to multi-year milestones TODAY Jan Jan Jan Jan Jan 2017 2018 2019 2020 2021 Evaluation and consultation Build M
Slide 15: 1H20 ASX financial performance
For personal use only Gillian Larkins - CFO 1H20 ASX financial performance
Slide 16: ASX financial results
ASX financial results Growth in trading and business activity delivering a consistent return to shareholders For personal use only 1H20 2H19 1H19 1H20 v $m $m $m 1H19 Operating revenue 454.9 439.1 424.7 7.1% • Operating revenue up 7.1% reflecting solid growth in customer activity Operating expenses
Slide 17: ASX operating revenue
ASX operating revenue Up 7.1% with all businesses delivering growth 1H20 operating revenue contribution by business For personal use only 1H20 2H19 1H19 1H20 v $m $m $m 1H19 Listings and Issuer Services 113.9 108.7 111.5 2.2% Derivatives and OTC Markets 159.4 161.8 146.8 8.6% Trading Services 125.0
Slide 18: ASX operating revenue by business
ASX operating revenue by business For personal use only 1H20 v Listings and Issuer Services 1H20 2H19 1H19 1H19 Key highlights 25% Operating revenue ($million) 113.9 108.7 111.5 2.2% Listings 86.8 86.1 85.0 2.1% Listings and Issuer Services Issuer services 27.1 22.6 26.5 2.3% • IPO revenue impacted
Slide 19: ASX operating revenue by business (continued)
ASX operating revenue by business (continued) For personal use only 1H20 v Trading Services 1H20 2H19 1H19 1H19 Key highlights Operating revenue ($million) 125.0 116.1 113.5 10.2% 27% Cash market trading 27.9 25.7 26.0 7.6% Trading Services Information services 53.5 49.1 47.2 13.5% Technical service
Slide 20: ASX total expenses
ASX total expenses Scheduled investment in initiatives in line with previous expense guidance For personal use only 1H20 2H19 1H19 1H20 v $m $m $m 1H19 • Total expense uplift largely due to the impact of the onboarding of FTE resourcing during FY19 with Staff 72.5 64.5 63.2 (14.6%) expense growth sl
Slide 21: ASX interest and dividend income
ASX interest and dividend income Lower investment earnings due to current interest rate environment For personal use only 1H20 2H19 1H19 1H20 v Interest and dividend income $m $m $m 1H19 ($million) Group net interest income 7.7 12.5 10.9 (28.7%) Lease financing cost (1.6) - - - 5 Group net interest
Slide 22: ASX balance sheet
ASX balance sheet Strong balance sheet with strategic investments Dec 19 Jun 19 For personal use only $m $m Investments in adjacencies Cash and other financial assets 11,893.3 12,270.3 • Sympli Intangibles (excluding software) 2,326.0 2,326.1 – 49% shareholding, $16.8 million invested to date Invest
Slide 23: ASX earnings and dividends per share
ASX earnings and dividends per share Delivering to shareholders, strongest half-year EPS to date For personal use only 1H20 v 1H20 2H19 1H19 Statutory earnings per share (cents) 1H19 Statutory earnings per share (cents) 129.3 127.0 127.1 1.7% 127.0 110.9 Dividends per share (cents) 116.4 114.3 114.4
Slide 24: Summary and outlook
For personal use only Dominic Stevens – CEO Summary and outlook
Slide 25: Summary and outlook
Summary and outlook For personal use only • 1H20 resilient shareholder returns highlights the strength of being a diversified, integrated exchange • Strong momentum in execution of customer driven, technology focused strategy • First six weeks of the new calendar year have seen continued solid volum
Slide 26: Q&A
For personal use only Q&A
Slide 27: Appendices
Appendices For personal use only 1. Income statement 2. Balance sheet 3. Key financial ratios 4. Transaction and activity levels 5. Free cash flow summary 6. Accounting policy change 26 |
Slide 28: 1. Income statement
1. Income statement Pre-AASB 15 AASB 15 1H18 2H18 1H19 2H19 1H20 For personal use only $million $million $million $million $million Annual listing 42.6 43.2 46.6 47.2 46.0 Initial listing 9.4 9.2 9.6 9.6 9.4 Subsequent raisings 32.6 26.3 25.1 26.1 27.1 Other listing 4.0 4.1 3.7 3.2 4.3 Listings 88.6
Slide 29: 1. Income statement
1. Income statement Pre-AASB 15 AASB 15 1H18 2H18 1H19 2H19 1H20 For personal use only $million $million $million $million $million Staff 56.5 58.1 63.2 64.5 72.5 Occupancy 8.1 8.3 8.6 9.3 4.7 Equipment 13.8 14.1 15.3 15.4 16.1 Administration 10.4 12.0 10.5 12.0 12.7 Variable 4.0 3.9 4.4 4.0 4.6 ASI
Slide 30: 2. Balance sheet
2. Balance sheet Pre-AASB 15 AASB 15 31 Dec 17 30 Jun 18 31 Dec 18 30 Jun 19 31 Dec 19 For personal use only $million $million $million $million $million Assets Cash and other financial assets 8,636.2 9,570.1 8,688.3 12,270.3 11,893.3 Intangibles (excluding software) 2,326.5 2,326.3 2,326.2 2,326.1
Slide 31: 3. Key financial ratios
3. Key financial ratios Pre-AASB 15 AASB 15 1H18 2H18 1H19 2H19 1H20 For personal use only Basic earnings per share (EPS) 1 119.1c 110.9c 127.1c 127.0c 129.3c Diluted EPS 1 119.1c 110.9c 127.1c 127.0c 129.3c Underlying EPS 2 119.1c 121.3c 127.1c 127.0c 129.3c Dividend per share – interim 107.2c - 11
Slide 32: 4.1 Listings and Issuer Services
4.1 Listings and Issuer Services 1H18 2H18 1H19 2H19 1H20 For personal use only Total domestic market capitalisation ($bn) – period end $1,932 $1,957 $1,790 $2,069 $2,118 Total number of listed entities (includes all stapled entities) – period end 2,275 2,285 2,284 2,269 2,240 Number of new listings
Slide 33: 4.2 Derivatives and OTC Markets: Equity Options
4.2 Derivatives and OTC Markets: Equity Options 1H18 2H18 1H19 2H19 1H20 For personal use only Trading days 128 124 129 123 130 Single stock options (‘000) 41,768 38,323 36,636 37,189 33,928 Index options and futures (‘000) 5,932 6,529 6,196 5,086 4,659 Average daily single stock options contracts 3
Slide 34: 4.2 Derivatives and OTC Markets: Futures and OTC
4.2 Derivatives and OTC Markets: Futures and OTC 1H18 2H18 1H19 2H19 1H20 For personal use only Trading days 128 127 129 126 130 Total contracts traded – futures ('000) ASX SPI 200 6,253 7,529 7,974 8,020 8,491 90 day bank bills 15,456 17,770 15,083 19,615 13,884 3 year bonds 28,127 27,914 27,284 33
Slide 35: 4.2 Derivatives and OTC Markets: Futures and OTC (continued)
4.2 Derivatives and OTC Markets: Futures and OTC (continued) 1H18 2H18 1H19 2H19 1H20 For personal use only Total contracts traded – options on futures ('000) ASX SPI 200 77 63 66 32 17 3 year bonds 51 34 91 136 153 Overnight 3 year bonds 158 156 131 148 181 Intra-day 3 year bonds 207 137 204 406 30
Slide 36: 4.2 Derivatives and OTC Markets: Austraclear
4.2 Derivatives and OTC Markets: Austraclear 1H18 2H18 1H19 2H19 1H20 For personal use only Settlement days 128 124 129 124 130 Transactions ('000) Cash transfers 298 307 311 299 320 Fixed interest securities 383 387 397 415 457 Discount securities 72 74 75 72 66 Foreign exchange 5 4 5 4 4 Other 0 1
Slide 37: 4.3 Trading Services – Cash Market Trading
4.3 Trading Services – Cash Market Trading 1H18 2H18 1H19 2H19 1H20 For personal use only Trading days 128 124 129 123 130 Total cash market trades ('000) 144,880 147,648 171,273 188,712 214,880 Average daily cash market trades 1,131,875 1,190,711 1,327,701 1,534,241 1,652,922 Continuous trading val
Slide 38: 4.3 Trading Services – Technical Services
4.3 Trading Services – Technical Services 1111 1H18 2H18 1H19 2H19 1H20 For personal use only Technical services (number at period end) ASX Distribution Platform Australian Liquidity Centre cabinets 298 301 310 324 324 Connection Services ASX Net connections 115 112 108 104 101 ASX Net service feeds
Slide 39: 4.4 CCP participant collateral balances
4.4 CCP participant collateral balances 1H18 2H18 1H19 2H19 1H20 For personal use only $million $million $million $million $million Balances at period end ASX Clear – initial margins 441.9 567.3 654.8 843.6 600.8 ASX Clear (Futures) – initial margins House1 1,822.5 1,920.6 1,743.3 2,369.7 2,166.7 AS
Slide 40: 5. ASX Group own cash movement
5. ASX Group own cash movement 1H18 2H18 1H19 2H19 1H20 For personal use only $million $million $million $million $million ASX Group cash Total cash and short-term investments 8,336.2 9,565.3 8,688.3 12,265.0 11,893.3 Less participants’ margins and commitments (7,251.7) (8,495.8) (7,548.2) (10,801.0
Slide 41: 6. AASB Leases
6. AASB 16 Leases • Under the new accounting standard AASB 16, all applicable leases are treated as finance leases. The Group has recognised right-of-use assets and lease For personal use only liabilities for all its applicable leases. Applicable leases includes those greater than 12 months. • ASX a
Slide 42: 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 (13 February For personal use only 2020). It is provided in summary and does not purport to be complete. You should not rely upon i