NZX Limited · NZX:NZX
NZX — Shareholder Meeting (April 2024)
34 slides from NZX's shareholder meeting presentation, Apr 18, 2024
Slide 1: Annual Shareholders' Meeting
Annual Shareholders’ Meeting Auckland 18 April 2024
Slide 2: Today's meeting
Today’s meeting • Welcome and strategic overview – John McMahon, Chair • Report on financial and business performance – Mark Peterson, CEO • Strategic issues and growth options • Resolutions - Audit fees - Election of John McMahon - Re-election of Lindsay Wright - Director fees • Voting • Questions
Slide 3: Voting and asking questions
Voting and asking questions Voting Card Question box 3
Slide 4: Welcome and strategic overview
Welcome and strategic overview John McMahon, Chair
Slide 5: Director changes
Director changes • Dame Paula Rebstock was appointed onto the NZX Board effective 1 February 2023 • Rob Hamilton resigned from the Board effective 20 March 2023 • John McMahon was appointed onto the NZX Board effective 10 May 2023 • James Miller retired as Chair and from the Board effective 17 May 2
Slide 6: Image from Annual Report
Image from Annual Report Section footer 6
Slide 7: Leadership continuity
Leadership continuity • The NZX Board amended the Chief Executive’s contract to open-ended from fixed term • Greater transparency of the Chief Executive’s remuneration was provided in the 2023 Annual Report • The 2023 Remuneration report format was guided by output from the Corporate Governance Inst
Slide 8: Report on financial and business performance
Report on financial and business performance Mark Peterson, CEO
Slide 9: Performance and results
Performance and results • NZX produced a solid operating financial result in what was another challenging year for global markets • Normalised operating earnings (EBITDA), excluding acquisition, integration and restructuring costs, of $40.1 million – up 9.6% on 2022 • Trading and clearing volumes do
Slide 10: Capital markets activity
Capital markets activity • In 2023, $14.2 billion of capital was listed or raised on market • $6.8 billion of new debt issuance was raised through the market • ESG and green designated bonds remain in favour, accounting for more than 29% of the NZDX • Engagement with Government to encourage changes
Slide 11: Market development
Market development • Our strategy to grow capital market activity includes developing and launching new products • Our anonymous midpoint trading venue, NZX Dark, will be ready for participants to connect to next month • NZX20 index futures product is intended for launch later this year or early 202
Slide 12: Information Services
Information Services • Information Services continued its steady growth trajectory, with a compound average growth rate of 7.5% since 2018 • Subscriptions and license revenues grew 7.1% in 2023, reflecting the continued growth in data usage • We have invested in our data and website infrastructure,
Slide 13: Dairy – exciting area of growth
Dairy – exciting area of growth SGX-NZX Global Dairy Derivatives Market Since Launch 600,000 500,000 400,000 Lots Traded 300,000 200,000 100,000 0 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 13
Slide 14: Smartshares
Smartshares • Funds under management (FUM) as at 31 December 2023 was $11 billion – up nearly 33% from 31 December 2022 • In August we delivered the integration of the ASB Superannuation Master Trust business onto the Smartshares platform • Anna Scott joined the team as Chief Executive • Anna is foc
Slide 15: NZX Wealth Technologies
NZX Wealth Technologies • NZX Wealth Technologies won 12 new clients and transitioned three clients onto the platform in 2023 • Funds Under Administration (FUA) as at 31 December 2023 was $11.5 billion – up from $2 billion in 2018 • As at 31 March 2024 FUA totalled $13.8 billion • We have more confi
Slide 16: Operating costs
Operating costs • Cost control remains a priority. However, in 2023 our headline operating expenses increased by 15.5% • Prior to the integration of the ASB Superannuation Master Trust into Smartshares, the operational support of the business paid to ASB came out of the revenue line • We will have s
Slide 17: Depreciation & amortisation
Depreciation & amortisation • NZX's three largest costs are Employees (60%), Technology (28%) and Amortisation ($13.3 million per annum) • Amortisation of capitalised NZX Wealth Technologies costs accounts for around 48% of the total amortisation charge • NZX Wealth Technologies capitalises the staf
Slide 18: Operating responsibly
Operating responsibly • In 2023 NZX achieved net carbon zero certification for the third year in a row from Toitū Envirocare • Under the new mandatory climate-related disclosures framework, NZX has reported our climate change obligations regarding governance, strategy, risk management, and metrics a
Slide 19: Our People
Our People • We continue to take seriously the operating culture we have at NZX • Our people continue to show huge commitment to the business and the opportunities in front of us • The Financial Markets Authority's annual NZX market operator obligations review showed positive progress across all are
Slide 20: Delivering to our growth strategy
Delivering to our growth strategy • NZX is now a more integrated and resilient financial markets infrastructure and services business • Growing markets is fundamental to what we do – helping businesses to access capital and providing investors opportunities to grow their wealth • We are globalising
Slide 21: Dividends
Dividends • The NZX Board declared a final dividend of 3.1 cents per share contributing to a FY2023 dividend of 6.1 cents per share fully imputed • NZX’s dividend policy is to pay 80% to 110% of adjusted net profit after tax over time (subject to regulatory capital requirements) • The increase in am
Slide 22: 2024 KPIs
2024 KPIs • In the year ahead, our organisational priorities, or key performance indicators are to: • Deliver earning guidance • Deliver initiatives to grow core Capital Markets (NZX Dark, NZX20 Index Futures) • NZX Wealth Technologies to be cash flow breakeven by end of 2024 • More scale and effici
Slide 23: Director fees
Director fees • NZX received a refreshed independent director fee benchmarking report from PwC, identifying: • Market median Board Chair fee is $166,000 • Market median non-executive Director fee of $88,000 • 21 out of 22 comparator companies pay a committee fee to the Chair of the Audit and Risk Co
Slide 24: Director fees (cont)
Director fees (cont) • To attract and retain talent for the Board and ensure strong governance of the NZX Group, it is essential NZX pays market rates for fees • Based on the independent benchmarking information undertaken in 2024, and subject to shareholder approval, the Board proposes: • Increase
Slide 25: Outlook for 2024
Outlook for 2024 • First quarter revenue reached $28.8 million – up 14.8% and first quarter EBITDA* (including one-off costs) was $11.4m - up 23.5%, both assisted by a one-off audit fee item of around $0.9m. • We are seeing the benefits of FUM growth and synergies of the QuayStreet and ASB Superannu
Slide 26: Resolutions
> Resolutions
Slide 27: Shareholders voting online
Shareholders voting online • Shareholders will be able to cast your vote using the electronic voting card received when online registration is validated • To vote, you will need to click “Get Voting Card” within the meeting platform • You will be asked to enter your Shareholder or Proxy Number to va
Slide 28: Resolution 1: Auditor
Resolution 1: Auditor That the Board be authorised to determine the auditor’s fees and expenses for the 2024 financial year. 28
Slide 29: Resolution 2: Election of John McMahon
Resolution 2: Election of John McMahon To elect John McMahon as a director of NZX Limited. John has extensive industry experience in the finance sector, including a background in technology, company turnarounds and transformation, and entrepreneurial small cap governance. He has spent more than 30 y
Slide 30: Resolution 3: Re-election of Lindsay Wright
Resolution 3: Re-election of Lindsay Wright To re-elect Lindsay Wright as a director of NZX Limited. Lindsay was appointed as a director in February 2018. She has more than 30 years’ financial services and funds management experience locally and globally. Lindsay is CEO of the Funds Management unit
Slide 31: Resolution 4: Director fees
Resolution 4: Director fees That the annual remuneration payable to each director of NZX Limited be set at $88,000, the Chair’s annual remuneration be set at $166,000, with the Chair of the Audit & Risk Committee to receive an additional annual fee of $15,000, the Chairs of each of the Clearing, Hum
Slide 32: Voting
Voting
Slide 33: Questions
> Questions
Slide 34: Thank you
Thank you The information provided is a guide only and intended for general information purposes. It does not constitute investment advice Any representation or statement expressed in this information is made in good faith on the basis that NZX Limited (NZX) of any of ts related companies is nol abl