Slide 1: Half-Year 2017 Results
For personal use only Half-Year 2017 Results ASX Limited 17 February 2017
Slide 2: Agenda
Agenda For personal use only Results overview Dominic Stevens – CEO Financial and operational detail Peter Hiom – Deputy CEO Summary and outlook Dominic Stevens – CEO Q & A – analysts followed by media
Slide 3: Highlights
Highlights Macro drivers providing long-term growth opportunities For personal use only 1H17 Listings Outlook Expanding listings franchise, satisfactory result against record pcp Continued Macro factors earnings growth Derivatives and OTC Markets and ASX Investment in new products and services as in
Slide 4: Highlights - financial results 1H17
Highlights - financial results 1H17 Continued profit growth For personal use only Revenue Expenses EBITDA NPAT EPS DPS $386.6m $90.1m $296.5m $219.4m 113.4c 102.0c 2.8% (6.0%) 1.9% 3.0% 2.9% 2.9% Revenue up $10.4 million to $386.6 million with solid performances across all businesses Expenses up $5.
Slide 5: Highlights - activity levels
Highlights - activity levels Growth in trading, lower capital raisings Cash market trading For personal use only Total capital raised ($billion) ASX value on-market ($billion) 529.6 50.3 24.0 512.2 449.2 413.9 2H 29.3 2H 1H 20.2 1H 54.6 529.5 539.0 38.6 380.4 417.1 454.3 36.7 36.8 26.2 FY13 FY14 FY1
Slide 6: Highlights - 1H17 revenue
Highlights - 1H17 revenue Solid diversified revenue growth For personal use only Highlights Revenue $386.6 million, up 2.8% Revenue movement ($million) 1.9 Listings and Issuer Services 6.2 4.6 ‒ Revenue $103.3 million down 2.1% (2.3) ‒ Lower secondary listing fees versus a record pcp that included c
Slide 7: Strong core value proposition
Strong core value proposition Underlying macro drivers plus ASX initiatives drive growth For personal use only Global leader in A$ and NZ$ markets Listings Trade execution Clearing and settlement Initial and ongoing access to Ongoing liquidity Capital efficiency Core customer capital Hedging and ris
Slide 8: Highlights - strategic initiatives
Highlights - strategic initiatives Progress across all businesses For personal use only Expanding listings franchise Listings Enhanced admission rules implemented Regulatory approval for mFund expansion to long-form product disclosure statements New futures trading platform post March future
Slide 9: Extensive public consultation program
Extensive public consultation program Working with a range of stakeholders to improve market environment For personal use only Upgrading Australia’s post-trade Business requirements for CHESS replacement (ongoing since September 2016) equity market infrastructure Building the cyber awareness ASX 100
Slide 10: CHESS replacement
CHESS replacement Enhanced and ongoing stakeholder engagement For personal use only Government - Engagement to support robust markets Customers Code of Practice - Over 50 presentations, - Increased Business 40 workshops, 350 Committee engagement attendees Market consultation Technical Committee - 40
Slide 11: Financial and operational detail
For personal use only Peter Hiom – Deputy CEO Financial and operational detail
Slide 12: Listings and Issuer Services
Listings and Issuer Services Expanding listings franchise, satisfactory result against record pcp For personal use only 1H17 1H16 Var $ Var % Total capital raised ($billion) and number of IPOs 60 100 Revenue ($million) 103.3 105.6 (2.3) (2.1%) Listings 80.7 82.4 (1.7) (2.0%) 50 80 Issuer Services 22
Slide 13: Listings and Issuer Services: Foreign and technology listings
Listings and Issuer Services Foreign and technology listings, and expanding the investment product offering For personal use only ASX initiatives New products and services New Zealand companies 90 60 • New listing rules from 19 December 2016 further strengthen 80 50 ASX brand as a premier listing ve
Slide 14: Derivatives and OTC Markets
Derivatives and OTC Markets Investment in new products and services yielding results For personal use only 1H17 1H16 Var $ Var % OTC notional value cleared ($billion) Revenue ($million) 133.0 126.8 6.2 4.9% Futures and OTC 97.2 91.6 5.6 6.2% 2,160 Equity options 11.0 11.3 (0.3) (3.0%) 1,925 Austracl
Slide 15: Derivatives and OTC Markets: global distribution
Derivatives and OTC Markets Focus on global distribution and OTC service extension For personal use only ASX initiatives Futures night session contracts (million) and % contribution New products and services 45 35% 30% • Growth in 20 year bond futures, average daily volume 2,600, 40 30% open interes
Slide 16: Trading Services
Trading Services Strong growth in Centre Point and continued ALC sales success For personal use only 1H17 1H16 Var $ Var % ASX on-market value traded ($billion) and Revenue ($million) 96.0 91.4 4.6 5.0% 600 average trading fee per side per $ value (bps) 0.20 Cash Markets 23.3 20.3 3.0 14.7% 500 Info
Slide 17: Trading Services: distribution and community growth
Trading Services Focus on distribution, community growth and commercialising ASX data For personal use only ASX initiatives Centre Point value traded ($billion) New products and services 60 • ASX appointed administrator of BBSW interest rate 50 benchmark by AFMA effective January 2017 40 30 Sales an
Slide 18: Equity Post-Trade Services
Equity Post-Trade Services Good growth consistent with increased activity levels, investing for the future For personal use only Value cleared ($billion) 1H17 1H16 Var $ Var % 700 Revenue ($million) 52.9 51.0 1.9 3.8% 600 Cash Market Clearing 26.8 27.2 (0.4) (1.4%) 500 Cash Market Settlement 26.1 23
Slide 19: Equity Post-Trade Services: next generation platform
Equity Post-Trade Services Building the next generation platform For personal use only ASX demonstration suite CHESS replacement • Purpose built suite at Exchange Square for demonstrations and workshops • Stakeholder consultation commenced in Q4 2016 to gather and prioritise business requirements ‒
Slide 20: 1H17 Expenses
1H17 Expenses In line with guidance For personal use only Highlights Operating expenses up 6.0% Expense movement ($million) Higher investment in staff to support customer and growth- related initiatives 4.5 0.5 • Staff costs up 8.9% ‒ Average headcount up 6.2% to 556 FTEs 85.1 90.1 Expenses up 6.0%
Slide 21: Interest and dividend income
Interest and dividend income Collateral increases driving net interest income Margin balance at period end ($billion) For personal use only $million 1H17 1H16 Var $ Var % ASX Group net interest 5.9 5.8 9.4 11.3 (1.9) (16.9%) income Net interest earned on 4.1 23.2 17.5 5.7 32.7% 3.7 3.9 3.8 3.8 3.7 c
Slide 22: Capital expenditure
Capital expenditure Continued investment in systems and technology For personal use only $million 31.4 31.5 23.5 24.6 20.3 18.6 18.7 15.4 13.0 1H13 2H13 1H14 2H14 1H15 2H15 1H16 2H16 1H17 Highlights • Futures trading platform on track for March 2017 go-live • Additional enhancements post outage hand
Slide 23: Summary and outlook
For personal use only Dominic Stevens – CEO Summary and outlook
Slide 24: Summary and outlook
Summary and outlook Solid result, initiatives gaining traction Highlights For personal use only • 1H17 NPAT $219.4 million, up 3.0% on pcp Statutory NPAT ($million) • Five year NPAT CAGR 3.9% (FY11-16) 213.1 199.2 • EPS and DPS growth consistent with profit, 177.1 193.6 90% payout ratio, fully frank
Slide 25: For personal use only
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Slide 26: 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. Capital attribution 7. Cash market clearing and settlement income statement 8. Post balance date activity levels
Slide 27: 1. Income statement
1. Income statement 1H15 2H15 1H16 2H16 1H17 $million $million $million $million $million For personal use only Annual listing fees 34.8 35.9 36.7 38.5 39.3 Initial listing fees 11.4 9.5 11.7 6.9 9.7 Subsequent listing fees 21.2 21.5 29.0 16.1 26.7 Other listing fees 3.5 5.5 5.0 5.5 5.0 Listings 70.
Slide 28: 1. Income statement
1. Income statement 1H15 2H15 1H16 2H16 1H17 $million $million $million $million $million For personal use only Staff 49.9 46.5 50.7 50.4 55.2 Occupancy 6.7 7.0 6.8 7.3 7.3 Equipment 11.8 12.2 13.1 13.9 14.6 Administration 8.4 8.8 9.9 9.4 8.1 Variable 2.8 2.3 3.1 3.1 3.4 ASIC supervision levy 1.8 1.
Slide 29: 2. Balance sheet
2. Balance sheet 31 Dec 14 30 Jun 15 31 Dec 15 30 Jun 16 31 Dec 16 For personal use only $million $million $million $million $million Assets Cash and available-for-sale financial assets 5,027.3 4,879.0 5,356.3 7,072.8 7,002.2 Goodwill 2,317.6 2,317.6 2,317.6 2,317.6 2,317.6 Investments 394.6 376.8 3
Slide 30: 3. Key financial ratios
3. Key financial ratios 1H15 2H15 1H16 2H16 1H17 Basic EPS (including significant items) 102.7c 103.0c 110.2c 110.2c 113.4c For personal use only Diluted EPS (including significant items) 102.7c 103.0c 110.2c 110.2c 113.4c Underlying EPS (excluding significant items) 102.7c 105.7c 110.2c 110.2c 113.
Slide 31: 4.1 Listing and Issuer Services
4.1 Listing and Issuer Services 0 1H15 2H15 1H16 2H16 1H17 For personal use only Total domestic market capitalisation ($bn) – period end $1,575 $1,612 $1,629 $1,620 $1,760 Total number of listed entities (includes all stapled entities) - period end 2,208 2,220 2,238 2,204 2,215 Number of new listing
Slide 32: 4.2 Trading Services – cash market trading
4.2 Trading Services – cash market trading 1H15 2H15 1H16 2H16 1H17 For personal use only Trading days 130 124 130 124 129 Total cash market trades ('000) 92,984 97,663 110,091 125,832 130,984 Average daily cash market trades 715,263 787,602 846,853 1,014,772 1,015,381 Open trading ($bn) $326.180 $3
Slide 33: 4.2 Trading Services – technical services
4.2 Trading Services – technical services 1H15 2H15 1H16 2H16 1H17 For personal use only Technical services (number at period end) Liquidity access ASX sessions 1,277 1,185 1,141 1,113 1,074 ASX gateways 221 207 197 192 184 ASX liquidity cross-connects 60 55 59 57 58 Futures gateways 230 228 222 208
Slide 34: 4.3 Equity options
4.3 Equity options 1H15 2H15 1H16 2H16 1H17 For personal use only Trading days 130 124 130 124 129 Single stock equity options (‘000) 58,515 51,031 44,050 44,651 45,241 Index options (‘000) 5,685 5,273 6,201 6,567 5,580 Total contracts (‘000) 64,200 56,304 50,251 51,218 50,821 Average daily options
Slide 35: 4.3 Futures and OTC Markets
4.3 Futures and OTC Markets 1H15 2H15 1H16 2H16 1H17 For personal use only Trading days 130 126 130 127 129 Total contracts - futures ('000) ASX SPI 200 5,171 5,130 5,919 6,186 6,040 90 day bank bills 13,942 14,764 13,728 15,839 14,061 3 year bonds 24,117 25,600 23,708 26,397 25,431 10 year bonds 13
Slide 36: 4.3 Futures and OTC Markets
4.3 Futures and OTC Markets 1H15 2H15 1H16 2H16 1H17 For personal use only Total contracts - options on futures ('000) ASX SPI 200 313 141 189 174 120 3 year bonds 108 137 137 219 119 Overnight 3 year bonds 496 400 249 330 194 Intra-day 3 year bonds 523 404 329 331 250 Other 39 20 16 17 25 Total opt
Slide 37: 4.3 Austraclear
4.3 Austraclear 1H15 2H15 1H16 2H16 1H17 For personal use only Settlement days 130 124 130 124 129 Transactions ('000) Cash transfers 299 303 300 290 292 Fixed interest securities 379 395 363 354 367 Discount securities 80 77 75 75 74 Foreign exchange 11 11 6 5 4 Other 5 4 2 0 1 Total transactions 7
Slide 38: 4.4 CCP participant collateral balances
4.4 CCP participant collateral balances 1H15 2H15 1H16 2H16 1H17 For personal use only $million $million $million $million $million Balances at period end ASX Clear – initial margins 450.5 673.7 583.5 815.7 445.5 ASX Clear (Futures) – initial margins House 727.3 746.0 853.3 1,293.7 1,425.8 ASX Clear
Slide 39: 5. Free cash flow summary
5. Free cash flow summary 1H15 2H15 1H16 2H16 1H17 $million $million $million $million $million For personal use only ASX Group cash Total cash and short-term investments 5,027.3 4,879.0 5,356.3 7,072.8 7,002.2 Less participants’ margins and commitments – cash backed (3,997.4) (3,886.2) (4,308.5) (6
Slide 40: 6. Capital attribution
6. Capital attribution 31 Dec 14 30 Jun 15 31 Dec 15 30 Jun 16 31 Dec 16 For personal use only $million $million $million $million $million ASX Group shareholders’ equity 3,751.9 3,759.7 3,787.2 3,824.1 3,874.1 Capital attribution ASX Clear – default fund contributed by ASX (held in ASX Clear) 250.0
Slide 41: 7. Cash market clearing and settlement income statement
7. Cash market clearing and settlement income statement Cash Cash Cash Cash For personal use only market market market market clearing clearing settlement settlement 1H17 1H16 1H17 1H16 $million $million $million $million Operating revenue 26.9 27.3 26.5 24.1 Operating expenses 5.9 5.7 7.1 6.9 EBITD
Slide 42: 8. Post balance date activity levels
8. Post balance date activity levels 1 Jan – 14 Feb 1 Jan – 14 Feb Variance % For personal use only 2017 2016 Listings and Issuer Services (January month only) Initial capital raised ($million) 99 37 168% Secondary capital raised including scrip-for-scrip ($million) 754 292 158% Total capital raised
Slide 43: Disclaimer
Disclaimer For personal use only 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 (17 February 2017). It is provided in summary and does not purport to be complete. You should not rely upon i