Slide 1: JSE Limited Annual Results Presentation
JSE Limited Annual Results Presentation 19 March 2024 let’s connect ©Johannesburg Stock Exchange. The content of this presentation is strictly reserved for the use of the JSE. let’s connect
Slide 2: Agenda
Agenda Key highlights 03 Financial review 10 Conclusion 23 Appendix 28 2 let’s connect
Slide 3: Key highlights
Key highlights 3 let’s connect
Slide 4: Strong results against a challenging backdrop
Strong results against a challenging backdrop Resilient revenue profile Growth supported by segment & asset class diversification R2.9bn Non-trading income represents 37% of total R2.0bn Operating income Operating OPEX income¹ Cost growth reflects focus on strategic initiatives +6.7% YoY Disciplined
Slide 5: Market performance set against dynamic global and EM factors
Market performance set against dynamic global and EM factors Global Indices FY 2022 and 2023 Performance Equities market - Average Daily Value Traded (bn) / Average Daily Volume Traded (x10 mn) Emerging markets underperform global 25% benchmarks in 2023 15% 50 5% 40 -5% 30 Earnings ratios at a disco
Slide 6: Operating income supported by diversified business segments & asset classes
Operating income supported by diversified business segments & asset classes (Rm) +6.9%¹ 24 2 943 61 15 32 60 -1 2 752 2022 Capital Markets¹ JSE Investor Services Post-Trade Services JSE Clear Information Services Other² 2023 ¹From 2023, Investor Protection Levy income forms part of Capital Markets r
Slide 7: Trading and post-trade revenue diversified by asset classes
Trading and post-trade revenue diversified by asset classes (Rm) +5.4%¹ 47 1 994 26 15 1 890 19 17 8 18 3 -26 -23 2022 Equity market: Equity Bonds & Commodity Equity market: BDA Funds under JSE Clear Margin income Investor 2023 trading² derivatives financial derivatives clearing management protectio
Slide 8: Continued revenue diversification supports business resilience
Continued revenue diversification supports business resilience Non-trading income offset lower trading activity 30% 40% 37% 25% 35% 33% 35% 20% 29% 29% 30% 15% 12% 25% 11% 10% 6% 7% 20% 5% 1% 3% 2% 15% 0% 0% 10% -5% -10% -7% 5% -9% -15% 0% 2019 2020 2021 2022 2023 Cash equity market ADV growth (publ
Slide 9: Progress in 2023 across our strategic pillars
Progress in 2023 across our strategic pillars • JIS1: YoY revenue growth of 20.2%. Revenue and NPAT CAGR (since January 2021) of 23.5% and 71.4% respectively • Data lake: all essential equity and bond data moved to cloud • Launched big xyt ecosystems • Launched JSE Voluntary Carbon Market • Delivere
Slide 10: Financial review
Financial review 10 let’s connect
Slide 11: Key financial highlights – Income Statement
Key financial highlights – Income Statement Operating income (Rbn)¹ Total OPEX (Rbn) EBITDA margin¹ +6.9% +6.7% -4 pts 2.9 2.0 42% 38% 2.8 1.9 2022 2023 2022 2023 2022 2023 Net finance income (Rm)² NPAT (Rm) HEPS (cents) +12.2% +66.4% +11.0% 169 831 1 030 749 918 101 2022 2023 2022 2023 2022 2023 ¹M
Slide 12: Key financial highlights - Cash and capital allocation
Key financial highlights - Cash and capital allocation Net cash generated (Rbn) Capex (Rm) Cash balance (Rbn)¹ +13.6% +22.4% +8.2% 1.1 155 2.5 127 2.4 1.0 2022 2023 2022 2023 2022 2023 Regulatory capital² (Rbn) Ordinary dividend per share (cents) ROE +2% +1.6 pts -8.3% 1.2 784 769 19.4% 1.1 17.8% 20
Slide 13: Revenue breakdown
Revenue breakdown FY 2023 revenue contribution (inner circle represents FY 2022) 34% • Capital markets grew 3% on the back of higher bonds and financial JIS Post-Trade Services 35% derivatives revenue, partly offset by lower equity market trading 7% 6% revenue JSE Clear 4% 4% • JIS and Information S
Slide 14: Capital Markets & JIS
Capital Markets & JIS FY 2023 revenue contribution Equity market trading revenue down 5% • Published equity value traded down 9.5% and ADV down to R21bn (2022: R24bn) • Colocation activity contributed 69% (2022: 66%) to value traded, an important Primary Market enabler of activity 14% Equity market:
Slide 15: Post-Trade Services & JSE Clear
Post-Trade Services & JSE Clear FY 2023 revenue contribution Clearing & Settlement fees down 6% • Billable equity value traded down 5% Funds under management BDA 10% BDA fees up 5% 37% JSE Clear • Equity transactions up 1%; ADT¹ up to 327k (2022: 322k) 11% Funds under management revenue up 9% Equity
Slide 16: Information Services
Information Services FY 2023 revenue contribution Information Services revenue up 16% • Growth in index revenue, largely from growth in USD Index Fees partnership contributions from FTSE Russell 18% • An increase in USD-based annuity revenue • Steady growth in core Market Data products Market Data 8
Slide 17: OPEX growth reflects investment in our people and technology
OPEX growth reflects investment in our people and technology Personnel costs up 13% (R91m) to R784m • Annual salary increases • Higher incentives owing to good leavers and retention costs during the year +6.7% as well as a lower LTIS vesting in the prior year Technology costs up 11% (R39m) to R384m
Slide 18: Capex spend in line with expectations
Capex spend in line with expectations (Rm) 168 Grow the business: 11 159 • Information services - primarily the transfer of master data to 155 the cloud, the data marketplace and Self-Service Business Intelligence (BI) 33 41 • Bond CCP - progressing development 127 • New market development - digital
Slide 19: Robust balance sheet and healthy cash generation
Robust balance sheet and healthy cash generation (Rm) Financing activities Investing activities • Acquisition of treasury shares • Intangible assets, acquisition of plant and equipment • Lease liability repaid • Investment in government bonds • Leasehold improvements ¹Amount invested in bonds: R256m
Slide 20: Strong cash balance with adequate regulatory capital
Strong cash balance with adequate regulatory capital Cash and bonds (Rbn) 3.00 2.56 2.46 2.50 2.40 2.36 Investor protection and other funds 2.00 0.79 0.98 • JSE Derivatives Fidelity Fund 0.76 0.96 • JSE Guarantee Fund • BESA Guarantee Fund JSE • Empowerment Fund 1.50 0.39 0.39 0.48 0.40 1.00 Availab
Slide 21: Dividend in line with stated policy
Dividend in line with stated policy Dividend per share (cents) 840 854 725 769 784 150 100 690 725 754 769 784 2019 2020 2021 2022 2023 Ordinary dividend Special dividend 2019 2020 2021 2022 2023 Total dividend R730m R630m R741m R668m R681m Ordinary dividend pay-out ratio 87% 83% 92% 89% 82% Dividen
Slide 22: FY 2024 Expectations
FY 2024 Expectations Opex CAPEX Dividend growth 5% – 8% R145m – R165m 67% – 100% pay-out ratio 22 let’s connect
Slide 23: Conclusion
Conclusion 23 let’s connect
Slide 24: Retaining our strong competitive value proposition
Retaining our strong competitive value proposition Transformative and innovative Responsive and resilient operations Established and credible FMI • Partnerships with world-class • Resilient operational exchange - • Critical Financial Market network providers – Colo 2.0 market availability of 99.89%
Slide 25: The Group's 2026 strategy positions the JSE as a diversified exchange group
The Group’s 2026 strategy positions the JSE as a diversified exchange group • Evolving client proposition through innovative products and partnerships • Continued diversification of revenue • Progress Information Services Generate growth strategy sustainable high-quality earnings over the Protect Su
Slide 26: Partnering to deliver BDA modernisation
Partnering to deliver BDA modernisation • A pragmatic and systematic approach to modernisation by converting to modern software technology (Cobol to Java) and moving from mainframe to the cloud • Partnering with AWS to facilitate and de-risk migration given their track record and capabilities A rich
Slide 27: Committed to stakeholder value creation
Committed to stakeholder value creation 01. 01. Increasing revenue diversification across business segments & asset classes Maintaining our core value proposition through 02. Resilient and stable market Resilient business model underpinned by healthy cash 03. Partnering and innovating to deliver tra
Slide 28: Appendix
Appendix 28 let’s connect
Slide 29: Progressing our Information Services strategy
Progressing our Information Services strategy • Bring foundational projects to practical completion – 50% of investment spend Priorities • Launch a range of revenue-generating data products and • Launched JSE Trade Explorer services • Announced big xyt ecosystems • Explore opportunities for data rev
Slide 30: FY 2023 Market Drivers
FY 2023 Market Drivers 2023 2022 2023 2022 Primary Market Secondary market Number of IPOs 3 5 Published equity value traded -9.5% flat Additional capital raised 41bn 13bn ADV4 % -9% flat Aggregate market cap. of all equity listed -6% +10% Colocation activity as a % of total value traded 69% 66% inst
Slide 31: FY 2019 – 2023 revenue segment data
FY 2019 – 2023 revenue segment data CAPITAL MARKETS Primary Market (Rm) Equity Trading (Rm) Published value traded (Rtr) and effective rate (bps)¹ 0.40 0.40 0.39 0.38 0.39 161 493 489 152 153 158 479 5.8 5.9 5.9 147 5.3 5.1 447 433 2019 2020 2021 2022 2023 2019 2020 2021 2022 2023 2019 2020 2021 202
Slide 32: FY 2019 – 2023 revenue segment data
FY 2019 – 2023 revenue segment data POST-TRADE SERVICES Clearing and Settlement¹ (Rm) and effective rate Back-Office Services (Rm) and cents per transaction (bps)² 500 0.27 0.30 0.25 0.25 0.25 0.22 400 400 0.64 0.64 0.64 0.68 0.80 0.64 0.20 300 300 0.60 423 446 438 200 0.40 200 385 411 333 376 351 3
Slide 33: Equity Market: JSE effective pricing trend
Equity Market: JSE effective pricing trend 0.64 0.64 0.68 0.64 0.64 0.4 0.4 0.39 0.39 0.38 0.25 0.27 0.25 0.25 0.22 Trading (bps) Clearing & Settlement (bps) BDA fees (cents per transaction) 2019 2020 2021 2022 2023 2023: Effective rate increased YoY owing to 2023: Effective rate decreased YoY owing
Slide 34: Multi-year depreciation profile of assets and planned CAPEX
Multi-year depreciation profile of assets and planned CAPEX (Rm) 273 258 250 17 4 18 25 39 27 207 206 39 38 12 8 38 16 24 18 38 74 37 90 83 22* 68 104 105 92 92 66 2020 2021 2022 2023 2024F Existing assets ITaC1 Aplication of IFRS 16 on lease Licences JIS (incl customer contracts) 2024F capex envelo
Slide 35: Interest rate developments positively impact Net Finance Income
Interest rate developments positively impact Net Finance Income 180 9.0 (Rm) 7.9 160 8.0 169 140 7.0 6.6 120 6.0 5.1 100 5.0 4.4 140 80 3.5 4.0 60 112 101 3.0 40 2.0 20 59 1.0 0 0.0 2019 2020 2021 2022 2023 Net Finance Income Average rate over period Average repo rates based on monthly weighting 35
Slide 36: Income statement
Income statement (Rm) 2023 2022 D (%) Revenue 2 814 2 650 6.2% Margin income & collateral 128 102 25.8% Operating income 2 942 2 752 6.9% Other income 30 54 -45.4% Total income 2 972 2 806 5.9% Personnel expenses 784 693 13.2% Other operating expenses 1 048 946 10.8% EBITDA 1 141 1 168 -2.3% EBITDA
Slide 37: Balance sheet
Balance sheet (Rm) 2023 2020 Non-current assets 2 153 1 992 Property and equipment 174 165 Intangible assets 675 696 Investment in associate 347 329 Other non-current assets 958 801 Current assets 57 637 59 345 Margin deposits 53 999 55 793 JSE Clear Derivatives Default Fund collateral deposits 500
Slide 38: Financial metrics
Financial metrics 2019 2020 2021 2022 2023 Operating margin (EBIT)¹ 31% 32% 31% 32% 31% EPS (cents) 814.8 936.7 874.1 911.1 1 019.3 HEPS (cents) 814.6 936.7 878.9 917.7 1 029.8 PE 14.6 12.6 12.8 11.9 9.0 NPAT (Rm) 695 779 723 749 831 NPAT margin 31% 31% 28% 28% 30% ROE 18% 19% 17% 18% 19% Note: Figu
Slide 39: How the JSE art was used throughout the reporting suite
How the JSE art was used throughout the reporting suite Our Integrated Annual Report 2023 showcases selected works from the JSE’s corporate art collection, with the focus on artists involved with the Polly Street Art Centre, a significant feature in the evolution of South African art. The first art
Slide 40: Thank you
Thank you let’s connect 40 ©Johannesburg Stock Exchange. The content of this presentation is strictly reserved for the use of the JSE. let’s connect