JSE Limited · JSE:JSE
JSE — H1 2015 Earnings Presentation
22 slides from JSE's earnings presentation, August 2015
Slide 1: Interim Results August 2015
INTERIM RESULTS August 2015
Slide 2: Operating environment for H1 2015
Operating environment for H1 2015 South Africa maintained its sovereign credit rating (Fitch and S&P) Difficult H1 with significant macro-economic uncertainty worldwide and increased domestic socio-economic and policy pressure US in recovery mode but emerging market peers slowing down 2
Slide 3: Operating environment for H2 2015
Operating environment for H2 2015 Volatility is expected to persist in H2 US “lift-off” – even if timing uncertain EM performance and resultant investor appetite Impact of Greek crisis SA headwinds persist Load shedding Rising inflationary pressures Stressed household spending Caut
Slide 4: What H1 2015 meant for our stakeholders
What H1 2015 meant for our stakeholders 46% 24% 21% Equity transactions Billable Equity value traded Equity value traded 14% 14% 20% Equity Derivatives value Currency Derivatives contracts Commodity Derivatives traded contracts 14% H1 R59m and FY R181m Interest Rate Derivatives 2015 ca
Slide 5: H1 2015 at a glance
H1 2015 at a glance R1bn R567m 16% 12% R12m Operating revenue Operating expenses New organic revenue R484m R430m R459m 28% 29% EBIT NPAT Net cash flow from operations 504 cents 490 cents 29% 25% EPS HEPS 5
Slide 6: Positive financial performance
Positive financial performance Group (Rm) H1 2015 H1 2014 Revenue 1 008 869 Other income 43 19 Total revenue 1 051 888 Personnel expenses (210) (194) Other expenses (357) (314) Total expenditure (567) (508) EBIT 484 379 EBIT% 46% 43% Net finance income 79 59 Share of profit of equity-accounted inves
Slide 7: Growth trend
Growth trend H1 revenue trend H1 expenses trend 16% 12% 6 5 4 3 2 1 2007 2008 2009 2010 2011 2012 2013 2014 2015 0 2007 2008 2009 2010 2011 2012 2013 2014 2015 Total revenue HEPS EPS Personnel expenses Other expenses Impairments H1 2015 revenue as a % total Growth in our largely fixed cost base is
Slide 8: H1 operating expenditure
H1 operating expenditure Total operating expenses 12% to R567m (2014: R508m) R567m Personnel costs 8% to R210m (2014: R194m) R508m Staff cost to company account for 3% of this increase following a decrease in headcount to 485 (2014: 505), a 210 change in the staff skills mix and an average
Slide 9: Cashflow view
Cashflow view 2 500 45 2 000 17 459 417 1 500 62 Cash (Rm) 1 000 1 631 1 550 500 - Cash Dec Cash Investing Financing Dividends Forex impact Cash June 2014 generated activities activities paid on cash 2015 from including balance operations borrowings repaid Strong balance sheet and no debt 9
Slide 10: Business Review
BUSINES REVIEW
Slide 11: Capital Markets: Primary Market
Capital Markets: Primary Market (Revenue previously included in Issuer Regulation) (R’m) 8% of total revenue 90 Revenue 18% to R78m (H1 2014: R66m) 18% Capital raising to R111bn during period (H1 80 2014: R83bn) 70 Number of new company listings 9 (H1 2014: 10) 60 2 African listings 50
Slide 12: Capital Markets: Equity Market
Capital Markets: Equity Market (R’m) 26% of total revenue 300 Revenue 16% to R244m (H1 2014: R211m) 16% Billable value traded 24% 250 Trades 46% (H1 2015: 30m; H1 2014: 20m; H1 2013: 21m) 200 Value traded 21% (H1 2015: 2.4tr; H1 2014: R2.0tr; 2013: R2.1tr) 150 Colocation traded exe
Slide 13: Capital Markets: Bonds and Financial Derivatives
Capital Markets: Bonds and Financial Derivatives (R’m) 13% of total revenue 140 Revenue 17% to R121m (H1 2014: R103m) 17% Equity derivatives revenue 15% to R83m. Number of contracts traded 21%; value 120 traded 14% Currency derivatives revenue 25% to R15m. 100 Contracts traded 14%;
Slide 14: Capital Markets: Commodity Derivatives
Capital Markets: Commodity Derivatives (R’m) 4% of total revenue 40 Revenue 31% at R34m (H1 2014: R26m) 31% owing to extreme weather volatility 35 Contracts traded 20% 30 Value traded 25% Predominantly a grains market 25 New all time record # of monthly contracts 20 traded in Februar
Slide 15: Trading and Market Services: Back-Office Services (BDA)
Trading and Market Services: Back-Office Services (BDA) (R’m) 16% of total revenue 160 20% Revenue 20% to R150m (H1 2014: R126m) 140 Linked to Equity Market transactions Paid R22m in rebates to equity members 120 Growth in number of transactions significantly out of line with the growth in
Slide 16: Post-Trade and Information Services: Risk Management
Post-Trade and Information Services: Risk Management (R’m) 17% of total revenue 180 Revenue 7% to R166m (H1 2014: R155m) 7% Reflects only Equity Market clearing fees 160 Phase 3 of T+3 to be implemented between 140 May and July 2016 120 Integrated clearing solution on track for delivery
Slide 17: Post-Trade and Information Services: Market Data
Post-Trade and Information Services: Market Data (R’m) 12% of total revenue 120 19% Revenue 19% to R113m (H1 2014: R95m) 33 new clients – 14 local and 19 international 100 Non-display clients increased by 24 Number of terminals to date, 37 655 (local 20 829 80 vs international 16 826) As
Slide 18: Looking Ahead
LOOKING ATEAB
Slide 19: Large change agenda – increased capital expenditure
Large change agenda – increased capital expenditure (external spend only) Project/Initiative H1 2015 H2 2015 FY 2015 FY 2014 T+3 Phase 2 - - - 13 T+3 Phase 3 9 11 20 7 Colocation - - - 32 Integrated trading and integrated clearing 22 88 110 24 Market Data automation - - - 1 Issuer regulation system
Slide 20: H2 2015 challenging but exciting
H2 2015 challenging but exciting Large change agenda to position JSE sustainably in an increasingly complex world Final phase of T+3 Replacing derivatives trading and clearing technology to offer clients derivatives products, services and pricing that are globally competitive Government Bond
Slide 21: Questions
QUESTIONS
Slide 22: Financial metrics
Financial metrics Ratios H1 2015 H1 2014 H1 2013 H1 2012 H1 2011 Operating margin 46% 43% 41% 27% 45% EPS 503.9 389.4 341.9 117.0 299.0 HEPS 490.3 391.2 333.2 245.5 288.9 PE 25.5 24.6 20.8 64.1 21.2 Dividend yield 3.7% 4.2% 3.5% 3.3% 3.3% EBITDA 535 428 390 226 340 22