Slide 1: Investor Day Presentation Slides (ASX announcement cover letter)
6 June 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 INVESTOR DAY PRESENTATION SLIDES Attached is a copy of
Slide 2: ASX A New Era: Investor Day
ASX A NEW ERA Investor Day 6 June 2023
Slide 3: Disclaimer
DISCLAIMER This presentation has been prepared by ASX Limited (ABN 98 008 624 691) (“ASX”). Summary information This presentation contains general information about ASX and its related bodies corporate (“ASX Group”) and their activities current as at 5 June 2023, unless otherwise stated. It is provi
Slide 4: Acknowledging Country
Acknowledging Country ASX acknowledges the Traditional Owners of Country throughout Australia. We pay our respects to Elders past and present. Artwork by Lee Ann Hall, My country My People 3
Slide 5: Agenda
AGENDA Session one: Enterprise view Session two: Business deep dives Dan Chesterman Introduction and Helen Lofthouse Data as a growth 10.00 11.05 Group Executive, ASX five year strategy Chief Executive Officer opportunity Technology & Data CHESS replacement Drivers of interest rate Darren Yip Tim Wh
Slide 6: ASX Executive Leadership Team
ASX EXECUTIVE LEADERSHIP TEAM Presenting today Helen Lofthouse Tim Whiteley Andrew Tobin Managing Director Chief Information Chief Financial Officer and CEO Officer (designate) Dan Chesterman Darren Yip Blair Beaton Group Executive, Group Executive, Group Executive, Technology and Data Markets Listi
Slide 7: What Will You Hear Today?
WHAT WILL YOU HEAR TODAY? Where we are Where we are Immediate Our opportunity Our focus What it will take today headed actions Resilient core Strong tailwinds We are focused New five year Our strategy is We are business, leading present distinct on restoring strategy supported set against two progre
Slide 8: Resilient Core Business with Leading Position in Key Markets
RESILIENT CORE BUSINESS WITH LEADING POSITION IN KEY MARKETS Where we are today Our opportunity Our focus Where we are headed What it will take Immediate actions Diversified businesses supporting long term revenue growth Local: Regional 89% Market capitalisation of all listed Largest interest Share
Slide 9: Our Strengths Set Us Apart
OUR STRENGTHS SET US APART Where we are today Our opportunity Our focus Where we are headed What it will take Immediate actions 1 Unmatched connectivity and liquidity Our listed and derivatives markets, deep liquidity, extensive data, breadth of services and deep expertise set us apart. Trusted regi
Slide 10: Strong Tailwinds Present Distinct Opportunities for ASX
STRONG TAILWINDS PRESENT DISTINCT OPPORTUNITIES FOR ASX Where we are today Our opportunity Our focus Where we are headed What it will take Immediate actions Increasing demand for technology and data Exchanges are a data rich environment. Analytical tools that leverage data to create opportunities ac
Slide 11: The Expectations for ASX Are Appropriately High and We Are Working to Restore Trust
THE EXPECTATIONS FOR ASX ARE APPROPRIATELY HIGH AND WE ARE WORKING TO RESTORE TRUST Where we are today Our opportunity Our focus Where we are headed What it will take Immediate actions From today 14 December ASIC requests special August report on support and 16 February 29 March ASX to publish speci
Slide 12: Technology Modernisation Is a Multi-Year Undertaking to Deliver the Foundations for Growth
TECHNOLOGY MODERNISATION IS A MULTI-YEAR UNDERTAKING TO DELIVER THE FOUNDATIONS FOR GROWTH Where we are today Our opportunity Our focus Where we are headed What it will take Immediate actions Years since last major refresh* Equities Core infrastructure Equity trading Website Market surveillance ASX
Slide 13: A New Five Year Strategy Supported by Four Strategic Pillars
A NEW FIVE YEAR STRATEGY SUPPORTED BY FOUR STRATEGIC PILLARS Where we are today Our opportunity Our focus Where we are headed What it will take Immediate actions PURPOSE: TO POWER A STRONGER ECONOMIC FUTURE BY ENABLING A FAIR AND DYNAMIC MARKETPLACE FOR ALL VISION: PILLARS: ONE ASX GREAT CUSTOMER DI
Slide 14: We Are Future Focused and Will Track Our Progress
WE ARE FUTURE FOCUSED AND WILL TRACK OUR PROGRESS Where we are today Our opportunity Our focus Where we are headed What it will take Immediate actions PILLARS ONE ASX GREAT FUNDAMENTALS CUSTOMER DRIVEN DIGITAL BY DESIGN • New era ASX values, • Simplified, modern • Working effectively • Customer and
Slide 15: Our Roadmap Is Set Across Two Horizons with Work Underway
We OUR willROADMAP execute our strategy across three IS SET ACROSS TWOhorizons. There are HORIZONS clear actions to take WITH right now (Horizon One) WORK UNDERWAY Where we are today Our opportunity Our focus Where we are headed What it will take Immediate actions HORIZON 1 – RESET HORIZON 2 – EMBED
Slide 16: Our Actions Show Progress Against Our Strategic Priorities
OUR ACTIONS SHOW PROGRESS AGAINST OUR STRATEGIC PRIORITIES Where we are today Our opportunity Our focus Where we are headed What it will take Immediate actions GREAT FUNDAMENTALS Technology modernisation Operating frameworks Sustainable shareholder value • Current CHESS investment • New executive le
Slide 17: CHESS Replacement Update and Technology Modernisation
CHESS REPLACEMENT UPDATE AND TECHNOLOGY MODERNISATION Tim Whiteley Chief Information Officer1 1 Designate
Slide 18: CHESS Replacement Solution Design Update
CHESS REPLACEMENT SOLUTION DESIGN UPDATE CONSIDERING OPTIONS IN FOUR AREAS Fix CHESS DLT Build custom Product based Iterate existing solution solution solution CHESS Review options to solve Consider options to Review mature Explore options to the six core issues build a solution from product-based u
Slide 19: Redesign Plan Update
REDESIGN PLAN UPDATE CURRENT PROGRESS CY Q1 CY Q2 CY Q3 / Q4 Product Definition Business Vision & Strategy Scope and business Scope and business requirements Program Objectives requirements refined baselined & Business Case Business case submitted Current state evaluation Solution deci
Slide 20: Market Engagement
MARKET ENGAGEMENT NEW INDUSTRY FORUM ESTABLISHED TO FOSTER INDUSTRY ENGAGEMENT The CHESS Replacement Technical Committee was established as a direct result of the need to increase industry engagement. • Clearing and Settlement Participants Q1 pulse survey of TC members 4 (as at March 2023) • Authori
Slide 21: Challenges: Industry and ASX Drivers
CHALLENGES: INDUSTRY AND ASX DRIVERS Years since major refresh Drivers of technology modernisation Business change Increasing market demand growing and regulator and technology expectations refresh cycles accelerating Cyber threat landscape evolving Technology volumes and material incidents Strong a
Slide 22: Technology Delivery Strategy
TECHNOLOGY DELIVERY STRATEGY Technology Enterprise planning Capability uplift to platforms and delivery support faster governance execution • Data and APIs, Cloud, • Enterprise wide • Strengthen engineering Identity architectures and planning talent • Reduce technology • Reusable APIs and • Enhance
Slide 23: Finance Update
FINANCE UPDATE Andrew Tobin Chief Financial Officer
Slide 24: Consistent Historical Performance
CONSISTENT HISTORICAL PERFORMANCE Operating revenue ($ million) and EBIT margin (%) 1,500 73% 70% • Diversified business model has generated consistent 1,000 67% historical revenue growth 64% 500 61% 58% • EBIT margin has declined over past 5 years due to higher 55% expense growth, however it contin
Slide 25: FY23 and FY24 Expense Growth Guidance
FY23 AND FY24 EXPENSE GROWTH GUIDANCE Total expenses profile ($m) FY23 total expense profile: 450 +12-15% • FY23 expense growth forecast of ~12%1 400 − Increased spend in 2H23 driven by CHESS related review and associated ~12% costs and CHESS replacement solution design. 350 • CHESS Partnership Prog
Slide 26: FY23 and FY24 Capital Expenditure Guidance
FY23 AND FY24 CAPITAL EXPENDITURE GUIDANCE PRIMARILY DRIVEN BY TECHNOLOGY MODERNISATION ROADMAP Capital expenditure ($m) $110-$140m 140 • Increasing capital expenditure profile over past 5 years has been driven by CHESS replacement as well as 120 technology and regulatory capability uplift 100 ~$95m
Slide 27: Capital Management
CAPITAL MANAGEMENT AIM TO PROVIDE FLEXIBILITY IN BALANCING INVESTMENT AND SHAREHOLDER RETURNS Dividend per share (cents) 250 • Intend to maintain 90% payout ratio for final FY23 dividend 200 150 109.1 114.3 122.5 111.2 120 • FY24 dividend policy to be modified to a range of 80-90% of 100 underlying
Slide 28: Data as a Growth Opportunity
TECHNOLOGY AND DATA DATA AS A GROWTH OPPORTUNITY Dan Chesterman Group Executive, Technology and Data
Slide 29: Technology and Data
TECHNOLOGY AND DATA STRUCTURAL AND STRATEGIC GROWTH OPPORTUNTY FOR ASX AGENDA 1 Overview: ASX Technology and Data business 2 ASX Information Services – products, customers and revenue drivers 3 Structural tailwinds and strategic growth opportunities 28
Slide 30: Overview: ASX Technology and Data Business
OVERVIEW: ASX TECHNOLOGY AND DATA BUSINESS PROVIDING DATA, CONNECTIVITY AND HOSTING SOLUTIONS FOR ASX CUSTOMERS Sell-side, Customers ASX Technology and Information Services buy-side, may consume Data creates value Information Services business offers a 1,500 global corporates, direct or via customer
Slide 31: Information Services – Products
INFORMATION SERVICES – PRODUCTS WELL ESTABLISHED RANGE OF DATA PRODUCTS ASX ASX ASX ASX Indices MarketSource ReferencePoint ComNews Benchmarks • ASX Market Data • Reference data • Listed company • Bank Bill Swap rate • Cobranded index • ASX24 Market • Numbering disclosures (BBSW) suite with S&P Data
Slide 32: Information Services - Customers
INFORMATION SERVICES - CUSTOMERS DIVERSE RANGE OF OVER 1,500 CUSTOMERS AROUND THE WORLD • Trading, clearing and settlement participants • Professional traders, investors and risk managers • Structured product providers • Data vendors • Custodians Provider of solutions • Regulators to all types of •
Slide 33: Information Services Revenue Growth: FY18 – FY22
INFORMATION SERVICES REVENUE GROWTH: FY18 – FY22 STRONG PERFORMANCE IN ALL MARKET CONDITIONS Information Services revenue ($ million) 140 120 100 80 60 40 20 0 FY18 FY19 FY20 FY21 FY22 ASX Market Data ASX 24 Market Data Benchmarks & Index ReferencePoint & ComNews 32
Slide 34: Factors That Have Driven Historic Revenue Growth
FACTORS THAT HAVE DRIVEN HISTORIC REVENUE GROWTH ONGOING STRONG DEMAND FOR DATA Growth in ASX Significant Growing licensing ASX index revenues Increased interest and ASX 24 data participation in ASX revenues from driven by growth in from market revenues stem from and ASX 24 markets machine based qua
Slide 35: Structural Tailwinds
STRUCTURAL TAILWINDS GROWTH OF EXISTING MARKETS AND EMERGING NEW OPPORTUNITIES 1 Market growth • Growth of Australian capital base • New investment strategies • Carbon 2 New markets require new data • ESG • Digital assets 3 Technology • AI and data analytics • Non-display data consumption 34
Slide 36: Strategic Growth Opportunities
STRATEGIC GROWTH OPPORTUNITIES TECHNOLOGY MODERNISATION, INNOVATION, LEVERAGING DATA AND CUSTOMER RELATIONSHIPS 1 Technology modernisation driving new product Investment in DataSphere capability provides development opportunities the platform, people and skills required to seize new opportunities Bu
Slide 37: Drivers of ASX Interest Rate Derivatives Volume
DRIVERS OF ASX INTEREST RATE DERIVATIVES VOLUME Darren Yip Group Executive, Markets
Slide 38: Markets
MARKETS ASX IS THE PROMINENT REGIONAL EXCHANGE FOR FIXED INCOME PRODUCTS AGENDA 1 Overview: ASX Markets business 2 Interest rates derivatives - market size, ASX product offering and participants 3 Drivers of interest rate derivatives market volume 4 Where we are today 5 What ASX’s five year strategy
Slide 39: Overview: ASX Markets Business
OVERVIEW: ASX MARKETS BUSINESS AT THE HEART OF AUSTRALIA’S FINANCIAL MARKETS Cash market trading Markets revenue • Shares • ETOs • ETPs • Warrants Operates • Hybrids Futures and • AGBs multiple markets OTC within the ASX ecosystem: Derivatives market 28% Cash Market Trading Equity Options of total A
Slide 40: Market Size and ASX Product Offering
MARKET SIZE AND ASX PRODUCT OFFERING ASX IS THE PRIMARY EXCHANGE FOR AUSTRALIAN AND NEW ZEALAND INTEREST RATE DERIVATIVES Size of the market1 Interest rates derivatives $50trillion traded value in AUD interest Short-term interest rate futures and options • AUD 90-day Bank Bill futures ASX NZD 90-day
Slide 41: Rates Market Participants
RATES MARKET PARTICIPANTS SERVICE A WIDE RANGE OF CUSTOMERS AND REQUIREMENTS • Domestic and international banks • Federal and state governments • Trading firms and Key uses of our products market makers • Asset managers • Hedging interest rate risk Customers • Corporates • Managing counterparty cred
Slide 42: Drivers of Rates Volumes
DRIVERS OF RATES VOLUMES MANY FACTORS DRIVE VOLUME, WHICH CAN INTERACT AND INFLUENCE EACH OTHER Interest rate derivatives activity drivers • Monetary policy • Macroeconomic sentiment • Market volatility • Market participants' needs • Risk appetite • Regulatory changes • AOFM bond issuance and turnov
Slide 43: ASX Short-Dated Futures Performance Since July 2019
ASX SHORT-DATED FUTURES PERFORMANCE SINCE JULY 2019 UNPRECEDENTED CIRCUMSTANCES RESULTED IN PROLONGED ELEVATED VOLATILITY ASX – AUD short-term interest rate futures volume (million) 5.0 RBA exits YCC 4.5 4.0 RBA rate rises 3.5 RBA yield curve target 3.0 2.5 2.0 1.5 1.0 0.5 (%) 42
Slide 44: ASX Long-Dated Volume Drivers
ASX LONG-DATED VOLUME DRIVERS BOND ISSUANCE AND TURNOVER CAN IMPACT VOLUME ASX bond futures contracts – quarterly (million) 45,000,000 45 HIGH AOFM ISSUANCE OF 10 YR BONDS 4.00 40,000,000 40 3.50 35,000,000 35 QE REDUCED 3 TO 10 YEAR BOND SUPPLY 3.00 30,000,000 30 2.50 25,000,000 25 2.00 20,000,000
Slide 45: Rates Futures Volume – Where We Are Today
RATES FUTURES VOLUME – WHERE WE ARE TODAY OVERALL RATES FUTURES VOLUMES IMPROVING, BUT NOT CONSISTENTLY ACROSS THE PORTFOLIO ASX short term rates futures volumes Rates futures volumes (million) have improved in FY23 to date vs FY22 20 AUD 90-day bank bill futures delivered 18 record volume in March
Slide 46: ASX Five Year Strategy – What It Means for Markets
ASX FIVE YEAR STRATEGY – WHAT IT MEANS FOR MARKETS STRUCTURAL TAILWINDS AND STRATEGIC DRIVERS FOR MARKETS Structural tailwinds Strategic drivers Growing Australian Decarbonisation Dynamic regulatory Technology Customer driven capital base environment modernisation growth • Growing demand • Supportin
Slide 47: What Makes ASX an Attractive Market for Corporate Listings and Capital Raisings
WHAT MAKES ASX AN ATTRACTIVE MARKET FOR CORPORATE LISTINGS AND CAPITAL RAISINGS Blair Beaton Group Executive, Listings
Slide 48: Listings Agenda
LISTINGS AGENDA ATTRACTIVE MARKET FOR DOMESTIC AND FOREIGN CORPORATE LISTINGS AGENDA 1 Virtuous circle of capital, liquidity, regulatory settings and investor appetite 2 Capital raising activity relative to global exchange peers 3 Some key benefits – index inclusion, valuation, regulatory framework
Slide 49: Virtuous Circle of Capital, Liquidity, Regulatory Settings and Investor Appetite
VIRTUOUS CIRCLE OF CAPITAL, LIQUIDITY, REGULATORY SETTINGS AND INVESTOR APPETITE largest pool of 5th 130+ new listings annually2 pension capital globally1 Long $9b history of successful listing and of equities funding of early stage traded daily3 growth companies 2,000+ Robust regulatory listed Aust
Slide 50: Active IPO Platform
ACTIVE IPO PLATFORM NUMBER OF NEW LISTINGS BY EXCHANGE: 2022 119 2 ASX is one of the world’s most 107 active exchanges by volume of new listings 107 85 73 74 16 69 5 20 10 12 3 1 SPAC Listings Selected exchanges as at 31 December 2022. New listings data sourced from exchange website. NZX data from B
Slide 51: 1st Globally by Number of Follow-on Offerings, 5th by Capital Raised
1ST GLOBALLY BY NUMBER OF FOLLOW-ON OFFERINGS, 5TH BY CAPITAL RAISED FIFTH CONSECUTIVE YEAR AS THE LEADING EXCHANGE BY VOLUME Follow-on offerings by selected exchanges in 2022 (US $20b) (US $36b) (US $17b) Placements Rights Issues (US $10b) (US $15b) (US $47b) (US $6b) (US $2b) Share Purchase Accele
Slide 52: Benchmark Index Access at an Earlier Stage
BENCHMARK INDEX ACCESS AT AN EARLIER STAGE Minimum company size1 US$ $203m $266m $728m $4.4b $4.6b $12.7b $15.3b $20.7b S&P/ASX S&P/ASX S&P/ASX Straits FTSE S&P Hang Seng NASDAQ All Tech 300 200 Times 100 500 100 69% institutional ownership of S&P/ASX 200 Index2 46% of institutional ownership offsho
Slide 53: Valuation Metrics Compare Favourably to Other Major Exchanges
VALUATION METRICS COMPARE FAVOURABLY TO OTHER MAJOR EXCHANGES Index composition and valuation indicators • Demand from: Average Median Price/Sales EV/Sales Number of market cap market cap − Australian Index (forward) (forward) constituents (US$b) (US$b) institutional investors S&P/ASX 50 2.5 2.6 50
Slide 54: Attractive Venue for Foreign Listings
ATTRACTIVE VENUE FOR FOREIGN LISTINGS 63 Provide diversification Capital and Capital markets New Zealand and growth index inclusion ecosystem and opportunities for opportunities for investor networks Australian investors foreign companies key to growth • • 150 sole and dual listings over past 6 year
Slide 55: ASX Five Year Strategy – What It Means for Listings
ASX FIVE YEAR STRATEGY – WHAT IT MEANS FOR LISTINGS GREAT FUNDAMENTALS SUPPORTED BY GROWTH IN AUSTRALIA’S CAPITAL BASE Listings purpose: enabling efficient access to capital for issuers and wealth creation opportunities for investors Structural tailwinds Strategic drivers Growing Australian Supporti
Slide 56: Summary and Conclusion
ASX INVESTOR DAY SUMMARY AND CONCLUSION Helen Lofthouse, Chief Executive Officer
Slide 57: What You Heard Today
WHAT YOU HEARD TODAY Our strengths Our focus areas Financial guidance and • Strong core businesses • Restoring trust with our regulators metrics • Structural tailwinds and stakeholders • Focus areas supported by total expenses • Five year strategy in place • Technology modernisation and capital expe
Slide 58: ASX Investor Day Q&A
ASX INVESTOR DAY Q&A