Oslo Børs VPS Holding ASA 4th Quarter 2012

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2 Oslo Børs VPS Holding ASA 4th Quarter 14 February 213

3 4th quarter at a glance Oslo Børs VPS Holding has agreed to sell Oslo Clearing Oslo Børs has agreed to, and received approval for, the purchase of 94% of the share capital of FishPool ASA Oslo Børs completed the takeover of Burgundy AB in 213 Oslo Børs implemented the Millennium Exchange trading system in November High level of activity in the fixed income market Low level of activity in the primary and secondary equities and derivatives markets Non-recurring items in relation to changes to pension arrangements NOK 42.3 million/nok.71 per share after tax Proposed dividend of NOK 7 per share for 3

4 NOK million NOK million 4th quarter at a glance Revenues down 1% to NOK 198 million from 11 Operating expenses down 29% from 11 EBITDA up 14% to NOK 113 million from 11 After correction for one-off items operating expenses up 3% and EBITDA down 25% EPS before amortisations NOK 1.8 up 22% from 11 EPS NOK 1.31 up 3% from Revenues Oslo Børs VPS Revenues EBITDA and EBITDA-margin Oslo Børs VPS 6 % 5 % 4 % 3 % 2 % 1 % % EBITDA EBITDA margin 4

5 NOK million NOK 1 Oslo Børs Revenues down 13% to NOK 93 million from 11 EBITDA up 3% to NOK 61 million from 11 After correction for one-off items EBITDA down 28% Reduced activity in equities Increased activity in fixed income instruments Implemented Millennium in November Acquisition of Burgundy AB and FishPool ASA Workforce reductions in Equity Markets Derivatives Markets Other Revenues Oslo Børs Fixed Income Markets Financial Market data EBITDA and EBITDA-margin Oslo Børs EBITDA EBITDA margin 7 % 6 % 5 % 4 % 3 % 2 % 1 % % 5

6 No. Number of bonds Value (NOK bill) Value No. of issuers Market cap (NOK bill) NOK 1 Oslo Børs primary market Steady increase in number of listed bonds and certificates Fixed fees from issuers down 2% from 11 Fixed fees driven by number of issuers and market capitalisation January 1 Market cap. issuers up 4% from Revenues primary market Fixed fees- issuers Prospectus and admission fees Number and market value of listed bonds and certificates Number of and market capitalisation of issuers of equity Number Value (NOK bill) No. of issuers Market cap (NOK bill) 6

7 NOK million Oslo Børs primary market Prospectus and admission fees up 27% from 11 Revenues driven by number and size of IPOs and issues One new listing in 12 Continued low level of issues of equity High level of issues of fixed income instruments New listings No. of listings Issues of equity Issues (NOK mill) 7

8 Value Value Trans Trans NOK 1 Oslo Børs secondary market Low market activity in 12 Revenues down 28% from Revenues secondary market Equity revenues driven by trading activity and members choice of fee structures Reduction in fees from 213 Derivatives revenues driven by activity level and composition of derivatives trading 8 - No of contracts up 7% from 11 - Revenues down 3% from Equities trading Derivatives trading Fixed Income trading Equities - value of turnover and number of transactions Value (NOK bill) Trans (1)

9 Order book lit - market share Market share - equities trading Total YTD On-exchange trading Dec 7 % Turquoise 2% Other 2 % 6 % Nasdaq OMX Nordic 6% LSE Group 9% CHI-X 13% Oslo 45% 5 % 4 % 3 % 2 % 47 % 51 % 62 % 58 % Markit BOAT 23 % 1 % % London Stockholm Frankfurt Oslo Increased use of Smart Order Routers Increased internalisation in Europe (Source: Thomson Reuters) 9

10 NOK 1 Oslo Børs market data Revenues down 7% from 11 Revenues primarily driven by number of professional end users of data from Oslo Børs Professional users down 9% from 11 Decrease in private users in 12 One-off items in 11 - Customer audits Revenues market data Market data - number of end-users

11 Key market activities Millennium Exchange implemented in November - Owned and used by London Stock Exchange Group - One of the world s fastest trading system - A flexible system - Attract new members and trading volume Continous development of microstructure - Marketplace rules, pricing structure, technology, networks and products - New opening hours - New tariffs for high frequency trading Efficient post trade - Interoperability Fast track procedure for listing 11

12 Contractsc Turnover NOK 1 Oslo Clearing Revenues down 17% from 11 Shift from transaction to value based fee-schedules Derivatives activity up 7% from 11 Clearing revenues driven by trading activity and members choice of fee structures activity level and composition of derivatives trading Interoperability with LCH in 213 Magica increased competetiveness in clearing MNOK 814 in cash collateral under management as of 12 Development of functionality for clearing of derivatives Equities clearing Revenues clearing Interest margin cash collateral Derivatives clearing Derivatives - number of standardised contracts and value of turnover Contracts (1) Turnover (MNOK)

13 NOK million NOK 1 VPS Revenues down 3% to NOK 93 million from 11 EBITDA up 57% to NOK 56 million from 11 After correction for one-off items EBITDA up 2% Increased Investor revenues Revenues VPS Investor products Issuer products Settlement products Fund products Other revenues EBITDA and EBITDA-margin VPS % 6 % 5 % 4 % 3 % 2 % 1 % % EBITDA EBITDA margin 13

14 NOK 1 VPS investor products Revenues up 4% from 11 Revenues primarily driven by number of VPS accounts and market value of holdings January 1 Changes to price structures in Revenues investor products Number of investor accounts and market value of holdings VPS accounts (1) Holdings (NOK bill)

15 NOK 1 VPS issuer products Revenues down 1% from 11 Revenues driven by number and composition of issuers and level and composition of corporate activity - AGM-season in Additional revenue from value added products - AGM-services - Stock purchase programs - Nominee-ID Changes to price structures in Revenues issuer products Number of companies and bond issues registered Companies Bond issues 15

16 NOK 1 VPS settlement products Revenues down 7% from 11 Revenues driven by number of participants and number of settlement transactions Revenues settlement products 2 Number of trade transactions processed in VPS (1)

17 AUM (NOK bill) Transaction (1) NOK 1 VPS fund products Revenues down 18% from 11 Revenues primarily driven by assets under management and number of transactions Reduction in volumes from 12 Changes to price structures in 213 New fund system - program extended with development of new functionality Revenues fund products Asset under management and number of transactions AUM (NOK bill) Transactions (1)

18 AUM (NOK bill) Transaction (1) NOK million Oslo Market Solutions Revenues down 18% from 11 EBITDA down 73% from 11 Transfer of revenue stream to VPS as of Revenues and EBITDA Oslo Market Solutions Revenues EBITDA 18

19 European regulation - implications MiFID II and MiFIR - More level playing field and increased transparency EMIR - Opportunity for CCPs in mandatory clearing - Requirements for CCPs organisation, capital and access and interoperability CSD-legislation - Increased competition opportunity and threat Financial transactions tax? 19

20 Summary Revenues affected by global downturn in trading and listing activities Continuous focus on operating costs Structural changes to take new positions and adapt to challenging competitive environment Focus forward 2 - Attract new listings/registrations and members - Increased sale to existing customers - Strengthen competitive position in secondary market - Successful execution of projects - Magica, Fund project, modernisation of VPS IT - Consider opportunities to increase scale in post trade - Integration of Burgundy and closing of Fish Pool transaction

21 Appendix

22 P&L 4th Quarter 4th Quarter Change 31. Dec 31. Dec Change in % in % Operating revenues % % Operating expenses Capitalisation of internal resources Salary and other personnel expenses Other operating expenses Depreciations and write-downs Amortisations Operating expenses before capitalisation of internal resources, depreciations and amortisations % % Total operating expenses % % EBITDA % % Operating profit (EBIT) % % Net financial items Ordinary pre-tax profit Tax Earnings for the period % % Actuarial gains/losses defined benefit pension plans Tax-effect Total comprehensive income % % Earnings per share (NOK) 1,31 1,1 3 % 4,51 5,42-17 % 5,42 Diluted earnings per share (NOK) 1,31 1,1 3 % 4,51 5,42-17 % 5,42 Earnings per share (NOK) before amorisations 1,8 1,47 22 % 6,17 7,25-15 % 7,25 22

23 Breakdown revenues Oslo Børs segment Revenues per area Equity Markets Fixed Income Markets Derivatives Markets Financial Market data Other Total Oslo Børs Revenues per category Fixed fees- issuers Trading fees Prospectus and admission fees Financial market data Other income Total Oslo Børs

24 Breakdown revenues VPS segment VPS Investor products Issuer products Settlement products Fund products Other revenues Total VPS

25 Balance sheet 31. Dec 31. Dec Fixed assets IT-systems Customer relations Registrations 1 1 Goodwill Deferred tax assets Tangible assets Treasury bills and bonds Financial fixed assets Current assets Market value of outstanding derivatives positions Receivables Treasury bills and bonds Cash and cash equivalents Assets Equity Contributed equity Earned equity - - Total equity Liabilities Pension liabilities Deferred tax liabilities Cash collateral Market value of outstanding derivatives positions Current liabilities Equity and liabilities

26 Cash flow 4th Quarter 4th Quarter 31. Dec 31. Dec Cash flow from - operational activities investment activities investments in systems and tangible assets investments in treasury bills and bonds received cash collateral from members financial income financing activities Cash and cash equivalents at period's start Change in cash and cash equivalents Cash and cash equivalents at period's end Cash flow per share (NOK) -2,66 1,77 9,55 -,14 -,14 Treasury bills, bonds and bank deposits Cash collateral from members Net after deduction for cash collateral from memb

27 Equity 4th Quarter 4th Quarter 31. Dec 31. Dec 2 12 Equity at period's start Total comprehensive income Dividends Purchase of own shares Acturial gains/losses in the period Equity at period's end Equity ratio 52 % 53 % 52 % 62 % 62 % 27

28 Largest shareholders 1 February

29 Last price Share price Oslo Børs VPS Holding ASA 16 Share price Oslo Børs VPS Holding ASA