Slide 1: Financial Results for the 9 Months Ending 31 March 2018 - Presentation
1 May 2018 Australian Securities and Investments Commission ASX Market Announcements Office Mr Oliver Harvey ASX Limited Senior Executive Leader, Financial Market Infrastructure 20 Bridge Street Level 5, 100 Market Street SYDNEY NSW 2000 SYDNEY NSW 2000 FINANCIAL RESULTS FOR THE 9 MONTHS ENDING 31 M
Slide 2: Strengthening the foundations for continued resilience and future growth
ASX Limited 2018 Macquarie Australia Conference, Sydney Strengthening the foundations for continued resilience and future growth Dominic Stevens, Managing Director & CEO 1 May 2018
Slide 3: Agenda
Agenda • Financial results for the 9 months ending 31 March 2018 • Strengthening the foundations for continued resilience and future growth • CHESS replacement journey • Other licence to operate initiatives • Listings framework enhancements • Conclusions • Questions and discussion 2 |
Slide 4: Highlights – financial results: 9 months to 31 March 2018
Highlights – financial results: 9 months to 31 March 2018 Unseasonably strong 3Q Mar 18 Mar 18 Variance Variance 3Q YTD % 3Q % YTD • Strong quarter for Listings, Derivatives and OTC, Trading Services Revenue $204.6m $613.6m +11.6% +7.6% • Equity Post-Trade on par with pcp • Full-year guidance unchan
Slide 5: Highlights – 3Q18 activity levels
Highlights – 3Q18 activity levels Strong growth in secondary capital raisings and futures, subdued equity trading Total capital raised ($billion) Cash market trading ASX value on-market ($billion) 80% 1% 24.0 vs 3Qpcp vs 3Qpcp 3Q 50.3 529.6 540.5 3Q 512.2 29.3 11.7 413.9 265.0 2H 19.1 2H 1H 54.6 36.
Slide 6: Highlights – revenue: 9 months ended 31 March 2018
Highlights – revenue: 9 months ended 31 March 2018 Strong quarter vs pcp, driven by futures volumes and secondary capital raisings YTD revenue up 7.6% Listings and Issuer Services Derivatives and OTC Markets Revenue movement ($million) ● YTD revenue $164.4m, up 13.6% ● YTD revenue $212.0m, up 5.9% 1
Slide 7: YTD operating expenses
YTD operating expenses Increased $8.0m, up 5.9% vs pcp Expense movement ($million) Operating expenses 1.4 2.9 3.7 • Staff costs up 1.6% ‒ Average headcount in line with 3Q17 YTD 135.1 143.1 • ASIC supervision levy increased by $2.9 million from $2.2 million, up 132% Mar 17 YTD Staff ASIC levy Other
Slide 8: Strengthening the foundations for continued resilience and future growth
Strengthening the foundations for continued resilience and future growth
Slide 9: Strong core value proposition
Strong core value proposition Importance of reliability and resilience drives ‘licence to operate’ initiatives Core customer Listings Trade execution Post-trade value proposition Deep and diverse liquidity Initial and ongoing access to capital Capital efficiency Hedging and risk transfer Lower cost
Slide 10: CHESS replacement journey
CHESS replacement journey Stage 1 complete, stage 2 completing soon, final stage 3 begun Technology Decision to partner and Build DLT Testing, use DA and DLT software prototype and internal and DLT system companies evaluation, enterprise external to replace assessed commenced grade software review C
Slide 11: DLT will deliver benefits to customers
DLT will deliver benefits to customers CHESS currently sends messages to reconcile many disparate and varied systems Broker F Brank A CHESS CHESS today Today • Highly reliable infrastructure for over 20 years Broker E Bank B • All counterparties have their own bespoke operational databases − differe
Slide 12: DLT will deliver benefits to customers
DLT will deliver benefits to customers DLT-based CHESS sees common customer databases with built-in real time source of truth Broker F Bank A DLT-based CHESS provides choice • Common database structure • Connection to ASX’s single ‘source of truth’ DLT database via a node • Databases to be kept in s
Slide 13: DLT will deliver benefits to customers
DLT will deliver benefits to customers DLT-based CHESS means application software built for one – is built for all Broker F Bank A DLT-based CHESS provides choice • Common database structure • Connection to ASX’s single ‘source of truth’ DLT database via a node • Databases to be kept in sync real-ti
Slide 14: Accelerating projects to contemporise technology platforms
Accelerating projects to contemporise technology platforms Will enable ASX to take advantage of the opportunities in the next 5 years FY18 – FY21 capital expenditure projects* • Accelerating work to contemporise technology platforms will enable ASX to provide customers FY17 FY18 FY19 FY20 FY21 ‒ ric
Slide 15: Listings franchise expansion
Listings franchise expansion Since 2012, new listings have provided attractive returns to investors Internal rate of return investing: Strategy • List quality, investment-grade companies for • $1 in ASX 200 on every day of every ASX listing Jan 2012 – Feb 2018 the long-term that grow, trade, clear a
Slide 16: Listings compliance environment
Listings compliance environment Quality is key: we continue to evolve and strengthen our listings framework 2012 2013 2014 2015 2016 2017 2018 • Good fame and • Major rewrite of • Amended GN 1 • 10% minimum free • New pre-vetting • Tightened rules on • Tightened character mining, oil and gas and GN
Slide 17: Overall regulatory environment for companies
Overall regulatory environment for companies Keeping standards high: combined responsibility of many parties Pre-listing responsibilities Post-listing responsibilities • Due diligence on prospectus Oversee running of the business DIRECTORS • Good fame and character checks • • Statutory duty to exerc
Slide 18: Conclusion
Conclusion We are making good progress strengthening our foundations Strong 3rd quarter Positioning ASX for continued resilience and • Record futures volumes due to increased volatility future growth and new customers • DLT-based CHESS provides benefits to customers • Secondary capital raisings were
Slide 19: Questions and discussion
Questions and discussion mM ASX
Slide 20: Appendix
Appendix mM ASX
Slide 21: Income statement – 9 months to 31 March 2018
Income statement – 9 months to 31 March 2018 Dec 17 Mar 18 Mar 18 Variance Variance 1H18 3Q YTD % % $m $m $m 3Q YTD Operating revenues 409.0 204.6 613.6 11.6% 7.6% Operating expenses 96.2 46.9 143.1 (4.4%) (5.9%) EBITDA 312.8 157.7 470.5 13.9% 8.2% Depreciation and amortisation 22.4 12.2 34.6 (9.4%)
Slide 22: Diversified business with multiple growth drivers
Diversified business with multiple growth drivers Revenue contribution by business - 9 months to 31 March 2018 Diversification supports revenues across different market cycles • Product and service diversification – Primary market facilitation via listings – Cash market trading, clearing and settlem
Slide 23: Thank you.
Thank you. @® ASX
Slide 24: Disclaimer
Disclaimer The material contained in this document is a presentation of general information about the ASX Group’s activities current as at the date of this presentation (1 May 2018). It is provided in summary and does not purport to be complete. You should not rely upon it as advice for investment p