Singapore Exchange Ltd. · SGX:S68

Singapore Exchange — FY2006 Earnings Presentation

25 slides from Singapore Exchange's earnings presentation, Jul 27, 2006

  1. Slide 1: Singapore Exchange Limited FY 2006 Full Year Results

    Singapore Exchange Limited FY 2006 Full Year Results Hsieh Fu Hua, CEO Robert van Zwieten, CFO Singapore Exchange 27 July 2006 1

  2. Slide 2: Agenda

    Agenda • Overview and Highlights • Financial Review • Business Update • Q&A 2

  3. Slide 3: Overview and Highlights

    Overview and Highlights Hsieh Fu Hua Chief Executive Officer 3

  4. Slide 4: Financial Overview

    Financial Overview A record year of four best quarters since IPO … 408 Change From FY05 316 Operating 275 48.4% Revenue 229 219 208 184 Operating 171 166 28.3% 136 151 143 55 Expenses 188 50 Net Profit 131 79.8% 37 After Tax 66 104 49 61 45 Net Dividend 7.7 FY 2001 FY 2002 FY 2003 FY 2004 FY 2005 FY

  5. Slide 5: Highlights of the Year

    Highlights of the Year Setting the pace … Securities Market ü SDAV: 52% to $1.02B from $670.4M ü IPO upsizing: 6 IPOs* above $1 billion Derivatives Market ü Asian Futures volume: 61% ü Structured warrants trading value: 132% ü Structured products New Growth Areas • REITs, ETFs, Business Trusts, GDRs

  6. Slide 6: Financial Review

    Financial Review Robert van Zwieten Chief Financial Officer 6

  7. Slide 7: Financial Highlights

    Financial Highlights Change from FY05 48.4% 28.3% 335.3% 63.4% 79.8% (In S$M) 40.5 10.1 19.2 132.8 187.6 104.4 FY05 Operating Operating Other Gains Tax & JV FY06 NPAT Revenue Expenses NPAT 7 (FY05 figures have been restated to reflect ESOS expenses following the adoption of FRS102)

  8. Slide 8: Operating Revenue

    Operating Revenue Buoyant market activities and structural improvement … (In S$M) 219 316 275 408 Sec Clearing Fees Access Fees 209 Futures Clearing 176 Revenue 144 92 96 Listing Fees 50 43 50 Price Information Fees 84 90 81 104 Account Maintenance & Corp Action Fees FY 2003 FY 2004 FY 2005 FY 2006

  9. Slide 9: Asian Futures Trading Volume

    Asian Futures Trading Volume E­trading drives growth … Futures revenue (inS$M) CAGR Change 43.0 47.9 44.9 84.6 FY03 – FY06 from FY05 Futures 25% 89% Launch of Rev QUEST­DT ( November 04) 16.9 NK 43% 97% TWN 26% 39% 8.0 8.6 9.9 5.8 7.1 6.5 5.0 3.5 EY 38% 46% 2.7 2.4 0.9 1.3 1.7 1.9 SG 30% 12% 1.3 FY

  10. Slide 10: Stable Revenue

    Stable Revenue Growth in our stable revenue streams … CAGR (FY03­FY06) (In S$M) 104 Other operating 14.0% 8 revenue 7 Sale of software & 81 other computer 2.4% 72 6 19 services 64 5 7 7 Price information 5 16 fees 24.7% 7 14 33 13 Listing & membership 22 14.5% 21 fees 17 14 11 Terminal* & connection

  11. Slide 11: Operating Leverage

    Operating Leverage Augmented by growth in derivatives & stable revenues 408 (In S$M) Coverage of 316 209 operating 275 expenses 219 176 FY 2006 – 108% 144 184 92 166 151 143 96 FY 2005 – 92% 43 50 50 FY 2004 – 93% 84 90 81 104 FY 2003 – 76% FY 2003 FY 2004 FY 2005 FY 2006 Stable Revenue* Net Derivat

  12. Slide 12: Operating Expenses

    Operating Expenses (In S$M) Reinvestment for continued growth … Total Operating Expenses Miscellaneous* • Annual regulatory fees to MAS 164 166 151 143 184 • Consultancy fees for various projects • Write­off of SGXTrade 160 Cost of sales 151 151 • Royalties on futures contracts 19 26 132 traded 125

  13. Slide 13: Our Dividend Policy

    Our Dividend Policy Business Growth + Capital Efficiency = Base dividend Net Dividend per share • Base dividend: 8 cents (in cents) 16.20 Base Variable • Proposed FY06 Dividend 10.80 10.20 • Payout: 90% 8.50 • Dividend per share (cents) 5.20 2.50 5.69 Base : 1.5 5.07 Variable : 10.2 5.69 5.07 5.60 6

  14. Slide 14: Dividend Policy: Peer Comparison

    Dividend Policy: Peer Comparison Higher of 8.0 cents per share or 80% NPAT 75% to 90% NPAT 30% prior year’s cash earnings / min 40%­50% normal NPAT / 50% ­ 60% NPAT 14

  15. Slide 15: Performance at a Glance

    Performance at a Glance Our commitment to enhance shareholder value FY 2002 FY2003 FY 2004 FY 2005 FY 2006 Return on Equity(1) 7.3% 8.3% 20.8% 22.0% 32.0% Total Shareholder Return(2) 4.8% 23.1% 45.7% 42.1% 71.0% Cost–to–Income 75.0% 76.2% 47.4% 52.1% 45.1% Net Profit Margin 23.4% 27.1% 42.0% 37.6% 4

  16. Slide 16: Business Update

    Business Update Hsieh Fu Hua Chief Executive Officer 16

  17. Slide 17: Building An Enduring Marketplace

    Building An Enduring Marketplace Asian Gateway Domestic Growth Asian Listing Structured Platform Products Risk Management Singapore Equity Centre Derivatives Partnerships & Retail Penetration Alliances Post­Trade Processing Hub Market­Oriented Regulation Operational & Technology Efficiency Customer­

  18. Slide 18: Asian Gateway

    Asian Gateway Our strategy is yielding results … Asian Domestic Gateway* Securities $71M ü Asian Gateway revenue (17%) • 40% of FY06 revenue from • Asian listing platform $211M • Offshore derivatives (52%) ü Domestic & Offshore Derivatives $91M • 31% of FY06 revenue (23%) Derivatives $31M (8%) 60% 4

  19. Slide 19: Larger IPOs boost Asian Gateway

    Larger IPOs boost Asian Gateway Upsizing of IPO Average market capitalisation ü No. of IPO with market cap > $500M • FY06: 8* (12%) vs FY05: 6 (8%) . 9% ü Billion­Dollar IPOs: 6* GR :1 8 $427M# CA (45 IPOs) • Korea, China, Malaysia, Thailand, Indonesia, Australia* $180M (16 IPOs) ü Average funds rai

  20. Slide 20: Our Asian Listing Platform

    Our Asian Listing Platform 227 foreign listcos as at 30 June 2006 Rest of World (9, 4%) ü 33% of total listcos Hong Kong (45, 20%) ü Listing strategy • Growing our China China Rest of Asia (103, 45%) Pacific (115, 51%) S.E. Asia market (41, 18%) • Diversifying within the region and beyond Taiwan (16

  21. Slide 21: Asian Gateway: Risk Management Centre

    Asian Gateway Risk Management Centre … ü Global participation • Fully electronic on SGX QUEST in October 2006 ü North Asian exposure • Equity: Futures & Options on Nikkei 225, MSCI Taiwan • Interest rate: Euroyen • Next: FTSE Xinhua China A50 ü Structured products • Warrants • Foreign IPOs, single s

  22. Slide 22: Developing an Asian Gateway

    Developing an Asian Gateway Growing through new Partnerships & Alliances … Global system provider for exchanges Specialist partner for IT infrastructure services 22

  23. Slide 23: Post-Trade Processing Hub

    Post­Trade Processing Hub Transforming from a utility to revenue driver … Trading Clearing Depository 23

  24. Slide 24: Setting the pace …

    Setting the pace … • Revenue: Transcending our domestic market • Asian Gateway: 40% • Derivatives: 31% • More diversified revenue streams • Listings • Larger IPOs • Healthy pipeline • Post­trade processing hub • Capital management • Target ROE: 25% • Dividend policy • SGX Centre • Investment in peop

  25. Slide 25: SGX Share Performance

    SGX Share Performance (Review period: 1 July 2003 to 30 June 06) 360 In d exed price pe rform an ce 270 180 90 ­ Jul­ Sep­ Dec­ Mar­ Jun­ Sep­ Dec­ Mar­ Jun­ Sep­ Dec­ Mar­ Jun­ 03 03 03 04 04 04 04 05 05 05 05 06 06 SGX Share Price Performance Straits Times Index 25

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