NZX Limited · NZX:NZX
NZX — H1 2024 Earnings Presentation
39 slides from NZX's earnings presentation, Aug 23, 2024
Slide 1: NZX Interim 2024 Results Investor Presentation
NZX INTERIM 2024 RESULTS INVESTOR PRESENTATION 23 August 2024 1
Slide 2: Today's Agenda and Important Notice
Today’s Agenda Important notice This investor presentation should be read in conjunction with NZX's other periodic and continuous disclosure announcements, and the financial statements in the 2024 Interim Report, which provides additional information on many areas covered in this presentation. These
Slide 3: Executive Summary
Executive Summary aS New Zealand's Exchange Te Paehoko O Aotearoa
Slide 4: HY24 results highlights
HY24 results highlights Showing strength through economic and market cycles – NZX has maintained the positive momentum in delivering to our growth strategy, and the operating earnings demonstrate the resilience of NZX’s earnings base Highlights1 Performance relative to 2024 Targets3 FY24 Targets H1-
Slide 5: NZX Group overview
NZX Group overview A diverse and connected capital markets focused business NZX Group NZ RegCo Corporate, Legal, Policy, Technology (Issuer Regulation, Participant Capital Markets Compliance, Market Conduct [Cash (Shares), Derivatives, Energy, Funds Management and NZX Wealth Surveillance) Environmen
Slide 6: Our strategy
Our strategy Our strategy is to round out our product offering in Capital Markets and drive scale and operating leverage across the businesses The Capital Markets market cycles: Market cycles are inevitable, we have the building blocks for further opportunities and growth and as markets recover, we
Slide 7: Business Unit Highlights
Business Unit Highlights "New Zealand's Exchange Te Paehoko O Aotearoa
Slide 8: Capital Markets Origination – Capital Listed and Raised
Capital Markets Origination – Capital Listed and Raised Capital listed at lower levels, reflecting the macroeconomic environment, this is driven by i) retail / sustainable debt, and ii) specific large capital raises for acquisitions / positioning for further growth 2024 Objectives Ensure NZX is best
Slide 9: Secondary Markets – Value Traded / Cleared
Secondary Markets – Value Traded / Cleared Value traded at lower levels, reflecting the challenging macroeconomic environment 2024 Objectives Expand our product offering: • NZX Dark (mid-point order book) product launch in mid 2024; • S&P/NZX20 Index Future relaunch progressing (including Self Match
Slide 10: Information Services Revenue
Information Services Revenue Lower professional terminals and subscriptions reflects the challenging macroeconomic environment, which has only partially been offset by increased higher value licences and back dated indices revenue 2024 Objectives Expand our product offering – enhanced product develo
Slide 11: Dairy Derivatives and GlobalDairyTrade
Dairy Derivatives and GlobalDairyTrade Dairy Derivatives lots traded continue to see the significant growth expected from the Singapore Exchange strategic partnership; though margin fee rates have started to normalise from the prior year peak levels. GlobalDairyTrade is now commencing its strategic
Slide 12: Smartshares – Funds Under Management (FUM)
Smartshares – Funds Under Management (FUM) Continues to drive growth. Smartshares’ future growth opportunities remain strong through organic growth. We continue to mature the operational environment in order to improve operating leverage 2024 Objectives Drive scale, efficiencies and operating levera
Slide 13: Wealth Technologies – Funds Under Admin (FUA)
Wealth Technologies – Funds Under Admin (FUA) Client transitions continue, with successful pipeline conversions and the positive outlook continues 2024 Objectives Drive scale, efficiencies and operating leverage, including migrating the current pipeline in 2024 to achieve a cash flow positive target
Slide 14: People
People NZX has strong employee engagement, a diverse workforce and a healthy culture across the organisation Work is required to promote and recruit more women into leadership positions Culture and Engagement Diverse Workforce and Gender Pay Gap (GPG) Diverse Workforce and Gender Pay Gap (cont) • NZ
Slide 15: Operating responsibly
Operating responsibly NZX’s focus is to create value while delivering a positive impact on society and the environment Strategy • Our ESG Strategy (Operating Responsibly) runs through the heart of our business – as the operator of New Zealand’s stock exchange and markets, as a financial services and
Slide 16: Financial Performance
Financial Performance New Zealand's Exchange Te Paehoko O Aotearoa
Slide 17: Income Statement
Income Statement Change vs Change vs Operating Revenue H1-2023 H2-2023 H1-2024 H1-23 H2-23 $000 $000 $000 Fav/(adv) Fav/(adv) The operating revenue increased $3.9 million (7.3%) on H1-23 driven by: Portion of increase Operating Revenue 53,959 54,428 57,882 7.3% 6.3% • Markets $(0.8)m (1.5)% Operatin
Slide 18: Income Statement
Income Statement Operating Revenue Operating Expenses Operating revenue increased $3.9 million to $57.9 million with the main drivers being: Operating expenses, excluding acquisition, integration & restructure costs, increased $1.6 million to $35.0 million with the main drivers being: Markets – reve
Slide 19: Income Statement
Income Statement Investments for growth Non-Operating Expenses (continued) Investments for growth activities in H1-24 have been: Depreciation and amortisation increased due to the impact of: • NZX Dark (the mid-point order book) was launched in June 2024; • Wealth Technologies – increased amortisati
Slide 20: Financial Position and Cash Flows
Financial Position and Cash Flows 20
Slide 21: Balance Sheet as at 30 June 2024
Balance Sheet as at 30 June 2024 June 2023 Dec 2023 June 2024 Cash and cash • Clearing House risk capital ($20 million) which is not available for general use; $000 $000 $000 equivalents • Clearing House complies with Financial Markets Infrastructure Act 2021 and Current assets International Organis
Slide 22: CAPEX
CAPEX CAPEX is at planned levels, with the Wellington Office refit complete in H1-24 Trading, Clearing and Energy Systems CAPEX • Trading, clearing and energy systems CAPEX driven by specific system life cycles which historically have resulted in large multi-year projects • In H1-24 relate to system
Slide 23: Cash Flows
Cash Flows Cashflows are seasonal with annual listing and participant fees collected in Q3 each year H1-2023 H2-2023 H1-2024 $000 $000 $000 Operating Activities Operating activities • Operating activities cashflow represents net profit after tax less non-cash items (e.g. depreciation and amortisatio
Slide 24: Interim Dividend and 2024 Earnings Guidance
Interim Dividend and 2024 Earnings Guidance 24
Slide 25: Interim Dividend and 2024 Earnings Guidance
Interim Dividend 2024 Earnings Guidance Interim Dividend 2024 Earnings Guidance • The Board has declared a fully imputed dividend of 3.0 cents per share NZX’s full year 2024 Operating Earnings (EBITDA)1, excluding acquisition, integration and • Dividend to be paid on 3 October 2024 to shareholders r
Slide 26: Questions?
Questions? New Zealand's Exchange Te Paehoko O Aotearoa
Slide 27: Appendices
Appendices New Zealand's Exchange Te Paehoko O Aotearoa
Slide 28: Appendix 1: Segmental Analysis - Income Statement by Business Unit
Appendix 1: Segmental Analysis - Income Statement by Business Unit 1 6 months ended June 2024 (H1-24) Capital Markets Secondary Information Markets Funds Wealth Corporate NZX Commercial Regulation NZX Group 2 3 4 5 $000 Origination Markets services Sub-total Management Technologies Services Operatio
Slide 29: Appendix 1: Segment – Markets
Appendix 1: Segment – Markets Markets is the integrated business that supports the growth of NZ capital markets Change vs Change vs Change vs Change vs H1-2023 H2-2023 H1-2024 H1-2023 H2-2023 H1-2024 H1-23 H2-23 H1-23 H2-23 $000 $000 $000 $000 $000 $000 Fav/(adv) Fav/(adv) Fav/(adv) Fav/(adv) Capita
Slide 30: Appendix 1: Segment – Markets
Appendix 1: Segment – Markets Operating Revenue Markets Operating Revenue Secondary Markets Revenue (continued) Markets operating revenue was $30.3 million (decrease of 2.7% on H1-23) driven by: Dairy derivatives revenue has been adversely impacted by margin fees normalising in line with global futu
Slide 31: Appendix 1: Segment – Markets
Appendix 1: Segment – Markets Operating Expenses Markets Operating Expenses Professional Fees Markets operating expenses were $9.8 million for H1-24 (decrease of 4.0% on H1-23) mainly reflecting: Professional fees cost decreased by (32.5)% and include: • Personnel costs – reduced 6.4% on H1-23, driv
Slide 32: Appendix 1: Segment – Smartshares
Appendix 1: Segment – Smartshares This business is a funds management business which comprises the SuperLife superannuation, QuayStreet funds, KiwiSaver products, Smartshares Exchange Traded Funds and QuayStreet Change vs Change vs Operating Earnings (excluding acquisition, integration and restructu
Slide 33: Appendix 1: Segment – Smartshares
Appendix 1: Segment – Smartshares This business is a funds management business which comprises the SuperLife superannuation, QuayStreet funds, KiwiSaver products and Smartshares Exchange Traded Funds Operating Revenue Acquisition, integration and restructuring costs FUM-based revenue – has increased
Slide 34: Appendix 1: Segment – Wealth Technologies
Appendix 1: Segment – Wealth Technologies This business administers and manages a platform that enables advisers and brokers to manage client investments Operating Revenue Administration (FUA based) fees – average FUA has increased (H1-24: $12.89b, H2-23: $11.10b H1-23: $10.44b), which Change vs Cha
Slide 35: Appendix 1: Segment – Corporate Services
Appendix 1: Segment – Corporate Services This function provides accommodation, legal, finance, IT, HR, communications and project management support to the business Change vs Change vs Operating Revenue H1-2023 H2-2023 H1-2024 H1-23 H2-23 $000 $000 $000 Revenue relates to commission fees on sublease
Slide 36: Appendix 1: Segment – Regulation (NZ RegCo)
Appendix 1: Segment – Regulation (NZ RegCo) Tasked with performing all of NZX’s frontline regulatory functions, resulting in the structural separation of the Group's commercial and regulatory roles Change vs Change vs Regulation (NZ RegCo) H1-2023 H2-2023 H1-2024 H1-23 H2-23 $000 $000 $000 Fav/(adv)
Slide 37: Appendix 2: Operating Revenue Definitions
Appendix 2: Operating Revenue Definitions Capital Markets Origination Secondary Markets Funds Management (Smartshares) Annual listing fees paid by NZX’s equity, fund and debt issuers is Participant services revenue is charged to market participants Funds Under Management based revenue relates to var
Slide 38: Contact
Contact Mark Peterson Graham Law Chief Executive Officer Chief Financial Officer mark.peterson@nzx.com graham.law@nzx.com +64 21 390 636 +64 29 494 2223 NZX Half Year 2024 Results 38
Slide 39: Thank you
NZX 7 Thank you