JSE Limited · JSE:JSE

JSE — FY2015 Earnings Presentation

22 slides from JSE's earnings presentation, February 2016

1. Slide 1: 2015 Year-End Results Presentation

   2015 YEAR-END RESULTS PRESENTATION February 2016

2. Slide 2: Operating environment 2015

   Operating environment 2015  Operating environment more challenging and uncertain  Retreat in world economic growth  Refugee crisis, terrorism, Greece – heightened instability  Delayed US economic lift-off  Slow SA growth – increased unemployment and social tensions  Commodity prices under seve

3. Slide 3: Operating environment 2016

   Operating environment 2016  Still challenging  Growing disconnect between economic reality and capital market activity  Policy makers face difficult choices  Stable macroeconomic conditions critical  Targeted and swift action required  Inclusive growth, fiscal prudence, investor sentiment  Po

4. Slide 4: What 2015 meant for our stakeholders

   What 2015 meant for our stakeholders 33% 26% 24% Equity transactions Billable equity value traded Equity value traded* 11% 13% 28% Equity derivatives value Interest rate derivatives Commodity derivatives traded contracts contracts R159m 1% 21% Currency derivatives contracts Bond Market volumes 2015

5. Slide 5: How this translated in our business

   How this translated in our business 20% 11% 45% R2bn R1bn R1bn Operating revenue Operating expenses EBIT 42% 16% 42% R899m R888m 1 051 cents NPAT Net cash flow from operations EPS 40% 1 026 cents HEPS  Dividend declared  625 cents per share (2014: 480 cents) 5

6. Slide 6: Excellent financial performance

   Excellent financial performance (Rm) 2015 2014 Revenue 2 133 1 779 Other income 146 61 Total revenue 2 279 1 840 Personnel expenses (496) (467) Other expenses (761) (669) Total expenses (1 257) ( 1 136) EBIT 1 022 704 EBIT % 45% 38% Net finance income 166 127 Share of profit of equity-accounted inve

7. Slide 7: Growth trends

   Growth trends Revenue trend Expenses trend 24% 11% 12 11.9 11.8 11.7 11.6 11.5 11.4 11.3 11.2 11.1 11 10.9 10.8 10.7 10.6 10.5 10.4 10.3 10.2 10.1 10 9.9 9.8 9.7 9.6 9.5 9.4 9.3 9.2 .1 9 8.9 8.8 8.7 8.6 8.5 8.4 8.3 8.2 8 .1 7.9 7.8 7.7 7.6 7.5 7.4 7.3 7.2 7 .1 6.9 6.8 6.7 6.6 6.5 6.4 6.3 6.2 6 .1 5.

8. Slide 8: Operating expenditure

   Operating expenditure Total operating expenses 11% to R1.26bn (2014: 1.14bn)  Personnel costs 6% to R496m (2014: R467m)  Gross remuneration per employee  7%. However, average headcount was R1.26bn 5% lower (excl 17 learners appointed in August 2015), declining from 494 to R1.14bn 472. This resu

9. Slide 9: Cashflow view

   Cashflow view 3 000 2 500 888 155 417 40 2 000 Cash (Rm) 1 500 1 000 1 908 1 631 500 - Cash Dec 2014 Cash generated Investing Financing Dividends paid Cash Dec 2015* from operations activities activities including borrowings repaid  Strong balance sheet and no debt *Contains rounding difference 9

10. Slide 10: Business Review

    BUSINES REVIEW

11. Slide 11: Capital Markets: Primary Market

    Capital Markets: Primary Market (R’m) 8% of total revenue  Revenue  20% to R161m (2014: R134m), as a 180 result of healthy listings activity and an increase 20% in the cap on main board annual equity listing 160 fees  23 new company listings, 2 new ETFs, 1 ETN, 140 264 warrants and 49 structured

12. Slide 12: Capital Markets: Equity Market

    Capital Markets: Equity Market (R’m) 26% of total revenue 600  Revenue  25% to R501m (2014: R402m)  Billable value traded  26% 25%  Value traded  24% 500  R60.3bn value traded record on 17 December 2015 (previous record: R53.7bn)  Colocation trade executions – 26% of overall 400 market Strat

13. Slide 13: Capital Markets: Bonds and Financial Derivatives

    Capital Markets: Bonds and Financial Derivatives (R’m) 13% of total revenue  Revenue  21% to R257m (2014: R213m) 300  Equity derivatives revenue  18% to R173m (2014: R147m). Contracts traded  78% to 21% 448m (2014: 252.4m). Value traded rose to 250 R6.6tr (2014: R6 tr),  11%  Currency derivat

14. Slide 14: Capital Markets: Commodity Derivatives

    Capital Markets: Commodity Derivatives (R’m) 4% of total revenue 80  Revenue  33% to R73m (2014: R55m) 33%  Contracts traded  28% to 3.5m (2014: 2.7m) 70  Value traded  53% to R749.4bn (2014: R490.5bn) 60 Strategic focus for 2016  Focus on introducing the Zambian contracts 50  deliverable wh

15. Slide 15: Trading and Market Services: Back-Office Services

    Trading and Market Services: Back-Office Services (BDA) (R’m) 15% of total revenue 350  Revenue  16% to R311m (2014: R268m) 16%  Partial link to Equity Market transaction 300 volumes  World-class surveillance and risk management capabilities 250 Strategic focus for 2016  Maintain BDA in additio

16. Slide 16: Post-Trade and Information Services: Risk Management

    Post-Trade and Information Services: Risk Management (R’m) 18% of total revenue 400  Revenue  19% to R357m (2014: R299m) 19%  Reflects only Equity Market clearing fees 350 Strategic focus for 2016 300  Implement Phase 3 of T+3 project – 11 July 2016  Revise the equity risk model  Add risk enha

17. Slide 17: Post-Trade and Information Services: Market Data

    Post-Trade and Information Services: Market Data (R’m) 12% of total revenue 300  Revenue  20% to R245m (2014: R204m)  61 new clients (31 local and 30 international) 20%  Non-display clients increased by 28 250  Number of terminals to date 38 974 (local 21 778 vs international 17 196)  Increase

18. Slide 18: Capex – external spend

    Capex – external spend Strong change agenda evidenced by significantly higher spend year on year Project/Initiative 2015 2016 T+3 Phase 3 21 13 Integrated trading and clearing 86 94 Customer relationship management 10 8 Business as usual 42 63 Total external capex spend 159 178 Total capex spend on

19. Slide 19: Changes to the Board

    Changes to the Board 21 May 2015 (AGM):  Sam Nematswerani retired as a Board member and as chairman of the Audit Committee, having been a director for 9 years and 10 months 1 July 2015:  Suresh Kana appointed to the Board as an independent non-executive director after retiring as senior partner of

20. Slide 20: 2016 Strategic priorities

    2016 Strategic priorities  Delivering on top priorities  Implement T+3 – 11 July 2016  Enhance operational efficiency and client service through integrated trading and clearing  Replace derivatives trading and clearing technology  Growing all areas of the business, particularly  Post-Trade and

21. Slide 21: Questions

    QUESTIONS

22. Slide 22: Financial metrics

    Financial metrics Ratios 2015 2014 2013 2012 2011 Operating margin 45% 38% 35% 28% 27% EPS 1 051.0 742.4 592.1 351.8 400.8 HEPS 1 026.3 735.0 644.6 473.2 562.4 PE 12.2 16.3 15.2 22.2 14.9 Dividend yield (ordinary) 4.1% 3.3% 3.9% 3.2% 2.9% Dividend yield (total) 4.9% 4.0% 4.5% 3.2% 2.9% EBITDA 1 123

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