Slide 1: FY18 Financial Results
For personal use only FY18 Financial Results DRAFT 14 August 2018 6pm
Slide 2: Agenda
Agenda For personal use only FY18 overview Dominic Stevens – CEO Strategic update Dominic Stevens Business performance Peter Hiom – Deputy CEO Summary and outlook Dominic Stevens Q&A – analysts followed by media Dominic Stevens, Peter Hiom and Ramy Aziz – CFO 2 |
Slide 3: FY18 highlights
FY18 highlights For personal use only Strong underlying financial performance • Revenue growth in all four businesses, highest growth since FY10 • NPAT and DPS increased for 5th year in a row Focused strategy and culture • Vision, Strategy, Execution framework utilised in business planning and remun
Slide 4: FY18 financial results
FY18 financial results Strong underlying growth and return to shareholders For personal use only • $822.7 million, up 7.7% Underlying revenue and expenses Revenue +$58.6m Strong overall performance, listings in particular • 5 year change ($million) • $195.5 million, up 8.0% 823 Expenses ($14.6m) • I
Slide 5: Revenue drivers
Revenue drivers Higher capital raisings, increased futures trading and demand for technical and information services For personal use only Revenue $822.7 million, up 7.7% Revenue movement FY17-FY18 ($million) • Listings and Issuer Services up 14.5% – Total capital raised up 46% to $81.7 billion 13.9
Slide 6: Operating expenses and capital expenditure
Operating expenses and capital expenditure FY18 in line with guidance, FY19 guidance reflects investment program Expense movement ($million) For personal use only Operating expenses 6.6 4.0 4.0 • FY18 operating expenses up 8.0% – Actuals consistent with guidance given at FY17 results – Electricity c
Slide 7: Strategic update - Operational enhancement initiatives
For personal use only Dominic Stevens – CEO Strategic update - Operational enhancement initiatives
Slide 8: Positioning ASX for the future
Positioning ASX for the future Key operational focus areas For personal use only Target outcome How? Clearing risk Enhanced clearing risk Vision and management systems Enhance people, strategy enabling near real-time risk management capability to further methodologies processes and tools promote fin
Slide 9: Vision, Strategy, Execution
Vision The world’s most respected financial marketplace For personal use only Strategy Diverse Innovative Enduring trust, Customer Collaborative ecosystem solutions and integrity and centric culture technology resilience Execution Licence to Operate Growth Initiatives 9 |
Slide 10: Stronger Foundations – clearing risk
Stronger Foundations – clearing risk Promoting stability in the financial system and protecting ASX capital For personal use only TODAY June Dec June Dec June Dec 2017 2017 2018 2018 2019 2019 Margin call improvements Implemented market-leading margin call frequency Strengthened CCP resilience Imple
Slide 11: Stronger Foundations – enterprise risk and technology strategy
Stronger Foundations – enterprise risk and technology strategy Enhancements underway, majority of initiatives implemented by end of 2018 For personal use only TODAY Dec June Dec June Dec June 2016 2017 2017 2018 2018 2019 Executive change and recruitment Ongoing disciplined recruitment New Appointed
Slide 12: Stronger Foundations – key technology initiatives
Stronger Foundations – key technology initiatives Accelerated program to meet the challenges of a fast, evolving market TODAY For personal use only Jan Jan Jan Jan Jan 2017 2018 2019 2020 2021 Implementation NTP New futures trading platform CHESS Evaluation and consultation Build Market trials and i
Slide 13: Strategic update - Growth initiatives
For personal use only Dominic Stevens – CEO Strategic update - Growth initiatives
Slide 14: Multi-layered growth strategy
Multi-layered growth strategy Stronger Foundations enable resilience and support growth For personal use only Successfully pursued new revenue streams Analytics/DLT/ new services/AI Emerging strategic growth opportunities Expanded, enhanced, core customer Core customer value proposition value propos
Slide 15: DLT is an efficient and scalable database technology
DLT is an efficient and scalable database technology DLT-based CHESS removes reconciliation and delivers reliable, accurate, more timely data For personal use only CHESS today DLT-based CHESS Sends messages to reconcile many and different systems Offers single source of truth data on standardised da
Slide 16: Infrastructure that makes doing business easier
Infrastructure that makes doing business easier DLT reduces costs and risks, and increases efficiency through harmonisation For personal use only Market Participants infrastructure Participants Software Smart contract software 0101010101 0101010101 CHESS 0101010101 today DLT solution Disparate Conti
Slide 17: DLT liberates source of truth information enabling innovation
Infrastructure that makes doing business easier DLT liberates source of truth information enabling innovation For personal use only Multiple applications, in multiple versions, Harmonised software in multiple languages on multiple databases and databases End End users users End End users users 01010
Slide 18: Infrastructure that could make doing business easier in super industry
Infrastructure that could make doing business easier in super industry DLT offers the opportunity for simplification and delivery of new, innovative services For personal use only Superannuation industry Equity clearing Enabling participants to provide innovative – approx. $23bn1 in costs & settleme
Slide 19: Business performance
For personal use only Peter Hiom – Deputy CEO Business performance
Slide 20: Listings and Issuer Services
Listings and Issuer Services 27% Strong capital raisings and growth in key sectors FY18 FY17 Var Var % For personal use only Revenue ($million) 220.6 192.7 27.9 14.5% Total capital raised ($billion) and number of IPOs Listings 171.4 150.3 21.1 14.0% 100 200 Issuer services 49.2 42.4 6.8 16.2% 150 Ke
Slide 21: Listings and Issuer Services highlights
Listings and Issuer Services Continued momentum in key sectors, growth in investment products Key highlights ETP market value ($billion) and number of funds For personal use only 50 250 Further growth in strategic sectors 40 200 • 21 technology listings¹ in FY18 with 237 entities listed at 30 June 3
Slide 22: Derivatives and OTC Markets
Derivatives and OTC Markets Increased futures activity and further growth in OTC and ASX Collateral FY18 FY17 Var Var % 35% For personal use only Revenue ($million) 286.4 269.1 17.3 6.4% Futures and OTC 212.5 197.4 15.1 7.7% Total futures contracts (million) Equity options 21.9 21.7 0.2 1.0% Austrac
Slide 23: Derivatives and OTC Markets key highlights
Derivatives and OTC Markets Global distribution and continued momentum in key investments Key highlights For personal use only OTC notional value cleared ($billion) Futures 6,314 • 20 year government bond future contract design changes 5,166 • Increase in offshore futures trading given addition of n
Slide 24: Trading Services
Trading Services Continued expansion and success in information and technical services 25% FY18 FY17 Var Var % For personal use only Trading Services revenue ($million) Revenue ($million) 209.9 196.0 13.9 7.0% Cash market trading 45.7 46.3 (0.6) (1.3%) 209.9 196.0 Information services 90.1 82.5 7.6
Slide 25: Trading Services highlights
Trading Services Focus on ALC, community growth and expanding ASX data Key highlights Information services revenue ($million) For personal use only Cash market trading 90.1 80.1 82.5 • Auctions 25.0% of ASX on-market value traded (22.0% pcp) as 68.8 73.7 customers seek deep liquidity • Centre Point
Slide 26: Equity Post-Trade Services
Equity Post-Trade Services 13% Lower cash market value offset by increased settlement activity FY18 FY17 Var Var % For personal use only Revenue ($million) 104.8 104.4 0.4 0.4% Cash market clearing 51.9 53.3 (1.4) (2.6%) On-market value cleared ($billion) Cash market settlement 52.9 51.1 1.8 3.5% Ke
Slide 27: CHESS replacement
CHESS replacement Consultation continues and the build is on track For personal use only April 2018 Stakeholder management • Released consultation paper CHESS Replacement: New Scope • Commence implementation including next phase of technical and Implementation Plan documentation and development envi
Slide 28: Interest and dividend income
Interest and dividend income Higher collateral balances and elevated short-term rates led to an increase in interest For personal use only $million FY18 FY17 Var Var % ASX Group net interest income 18.2 17.8 0.4 2.1% Interest and dividend income ($million) Net interest on collateral balances 50.3 47
Slide 29: Summary and outlook
For personal use only Dominic Stevens – CEO Summary and outlook
Slide 30: Summary and outlook
Summary and outlook FY18 summary For personal use only • Strong underlying profit and dividend growth of 7.2%, supported by highest revenue growth since FY10 • Putting in place stronger foundations for resilience and growth • Pursuing adjacent growth opportunities to leverage ASX’s infrastructure, e
Slide 31: Q&A
For personal use only Q&A (Slide to be updated)
Slide 32: Appendices
Appendices For personal use only 1. Income statement 2. Balance sheet 3. Key financial ratios 4. Transaction and activity levels 5. Free cash flow summary 6. Capital attribution 7. Accounting policy change 32 |
Slide 33: 1. Income statement
1. Income statement FY14 FY15 FY16 FY17 FY18 $ Million $ Million $ Million $ Million $ Million For personal use only Annual listing 62.1 70.7 75.2 79.3 85.8 Initial listing 17.9 20.9 18.6 16.0 18.6 Subsequent raisings 38.4 42.7 45.1 46.5 58.9 Other listing 8.6 9.0 10.5 8.5 8.1 Listings 127.0 143.3 1
Slide 34: 1. Income statement (expenses and profit)
1. Income statement FY14 FY15 FY16 FY17 FY18 $ Million $ Million $ Million $ Million $ Million For personal use only Staff 92.4 96.4 101.1 110.6 114.6 Occupancy 14.3 13.7 14.1 14.6 16.4 Equipment 23.0 24.0 27.0 27.9 27.9 Administration 16.3 17.2 19.2 18.2 22.4 Variable 4.3 5.1 6.3 6.7 7.9 ASIC levy
Slide 35: 2. Balance sheet
2. Balance sheet 30 Jun 14 30 Jun 15 30 Jun 16 30 Jun 17 30 Jun 18 $ Million $ Million $ Million $ Million $ Million For personal use only Assets Cash and available-for-sale financial assets 5,015.6 4,879.0 7,072.8 9,085.6 9,565.3 Intangibles (excluding software) 2,317.6 2,317.6 2,317.6 2,326.6 2,32
Slide 36: 3. Key financial ratios
3. Key financial ratios FY14 FY15 FY16 FY17 FY18 For personal use only Basic earnings per share (EPS) 1 198.5c 205.7c 220.4c 224.5c 230.0c Diluted EPS 1 198.5c 205.7c 220.4c 224.5c 230.0c Underlying EPS 2 198.5c 208.4c 220.4c 224.5c 240.4c Dividend per share – interim 88.2c 92.3c 99.1c 102.0c 107.2c
Slide 37: 4.1 Listings and Issuer Services
4.1 Listings and Issuer Services FY14 FY15 FY16 FY17 FY18 For personal use only Total domestic market capitalisation ($bn) – period end $1,552 $1,612 $1,620 $1,777 $1,957 Total number of listed entities (includes all stapled entities) – period end 2,192 2,220 2,204 2,239 2,285 Number of new listings
Slide 38: 4.2 Derivatives and OTC Markets - equity options
4.2 Derivatives and OTC Markets - equity options FY14 FY15 FY16 FY17 FY18 For personal use only Trading days 253 254 254 253 252 Single stock options (‘000) 116,343 109,546 88,701 93,295 80,091 Index options and futures (‘000) 8,249 10,958 12,768 10,388 12,461 Average daily single stock options cont
Slide 39: 4.2 Derivatives and OTC Markets - futures and OTC
4.2 Derivatives and OTC Markets - futures and OTC FY14 FY15 FY16 FY17 FY18 For personal use only Trading days 256 256 257 256 255 Total contracts traded – futures ('000) ASX SPI 200 9,715 10,301 12,105 12,255 13,782 90 day bank bills 25,903 28,706 29,567 28,931 33,226 3 year bonds 47,886 49,717 50,1
Slide 40: 4.2 Derivatives and OTC Markets - futures and OTC
4.2 Derivatives and OTC Markets - futures and OTC FY14 FY15 FY16 FY17 FY18 For personal use only Total contracts traded – options on futures ('000) ASX SPI 200 473 454 363 202 140 3 year bonds 416 245 356 152 85 Overnight 3 year bonds 1,523 896 579 478 314 Intra-day 3 year bonds 1,527 927 660 460 34
Slide 41: 4.2 Derivatives and OTC Markets - Austraclear
4.2 Derivatives and OTC Markets - Austraclear FY14 FY15 FY16 FY17 FY18 For personal use only Settlement days 253 254 254 253 252 Transactions ('000) Cash transfers 600 602 590 582 605 Fixed interest securities 800 774 717 741 770 Discount securities 162 157 150 146 146 Foreign exchange 21 22 11 9 9
Slide 42: 4.3 Trading Services – cash market trading
4.3 Trading Services – cash market trading FY14 FY15 FY16 FY17 FY18 For personal use only Trading days 253 254 254 253 252 Total cash market trades ('000) 181,861 190,647 235,923 266,433 292,528 Average daily cash market trades 718,817 750,578 928,829 1,053,096 1,160,826 Continuous trading value ($b
Slide 43: 4.3 Trading Services – technical services
4.3 Trading Services – technical services 1111318 FY14 FY15 FY16 FY17 FY18 For personal use only Technical Services (number at period end) ASX Distribution Platform Australian Liquidity Centre cabinets 142 188 231 285 301 Other data centre cabinets 7 8 8 13 13 Connection Services ASX Net connections
Slide 44: 4.4 CCP participant collateral balances
4.4 CCP participant collateral balances FY14 FY15 FY16 FY17 FY18 $ Million $ Million $ Million $ Million $ Million For personal use only Balances at period end ASX Clear – initial margins 549.8 673.7 815.7 672.3 567.3 ASX Clear (Futures) – initial margins House1 849.3 746.0 1,293.7 2,030.9 1,920.6 A
Slide 45: 5. Free cash flow summary
5. Free cash flow summary FY14 FY15 FY16 FY17 FY18 $ Million $ Million $ Million $ Million $ Million For personal use only ASX Group cash Total cash and short-term investments 5,015.6 4,879.0 7,072.8 9,085.6 9,565.3 Less participants’ margins and commitments (3,986.1) (3,886.2) (6,088.2) (8,084.7) (
Slide 46: 6. Capital attribution
6. Capital attribution FY14 FY15 FY16 FY17 FY18 $ Million $ Million $ Million $ Million $ Million For personal use only ASX Group shareholders’ equity 3,670.9 3,759.7 3,824.1 3,908.1 3,945.5 Capital attribution ASX Clear – default fund contributed by ASX (held in ASX Clear) 250.0 250.0 250.0 250.0 2
Slide 47: Accounting policy change effective from July 2018
Accounting policy change effective from 1 July 2018 AASB15: Revenue from contracts with customers For personal use only - New revenue standard replacing existing AASB18 Revenue FY18 listing revenue ($million) - Based on current interpretation of the new standard, As reported Restated ASX will be req
Slide 48: 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 (16 August For personal use only 2018). It is provided in summary and does not purport to be complete. You should not rely upon it