NZX Annual Meeting 2015

Transcription

1 NZX Annual Meeting 2015

2 Inform. Exchange. Grow Presentation to Annual Shareholders Meeting 21 May 2015

3 Agenda Overview of the business Our markets Growth opportunities Progress to date Priorities going forward 3

4 Business Overview - Performance 2014 Business Capital markets Soft commodities Agricultural information Funds Management Market Operations Capital raising Trading and clearing Listing fees Participant services Securities data 2014 ($M) 2013 ($M) Change (%) CAGR (%) % of 2014 Revenues (3.6%) 15.8% 21.9% % 4.6% 35.0% Dairy futures Grain (Clear) (3.2%) 15.9% 2.3% Publications Agri data (NZ and Aus) % 2.4% 18.7% Smartshares % 4.5% 4.2% Energy Fonterra (2.0%) 7.2% 17.9% 4

5 Our Markets Overview 5

6 We are a markets business At our core, NZX is a markets business. We build and operate markets that are a critical part of the economies in which we operate Markets are more than exchanges they are networks that include the underlying infrastructure, the products that trade, the intermediaries and investors that trade them, and the data and information that drives trading activity Our current focus is on building and operating capital, agricultural commodity and energy markets in New Zealand and Australia 6

7 Our markets are different We must be different Our chosen markets are different - They all have high growth potential - They are and will remain relatively small by global standards - They are underdeveloped We have tremendous opportunities to grow the business but - We need to do things differently from other exchanges - We need to operate and invest in parts of the market that are underdeveloped, including industry utilities - We need to invest in long-term growth where the opportunities are most attractive 7

8 Growth Opportunities 8

9 Capital Markets The Twenty Year Journey Index 1,200 1,100 1, % 8% 17% -2% Market Cap CAGR Years Au Super Assets Au Market Capitalisation NZ KiwiSaver & Super Assets NZ Market Capitalisation Source: NZX Data, WFE, AVA, RBA 9

10 Capital markets The beginning of a different market environment New Capital Listed Secondary Capital Raised $8.0B $30.0B Equity Equity $7.0B Debt $25.0B Debt $6.0B $5.0B $20.0B $4.0B $15.0B $3.0B $10.0B $2.0B $1.0B $5.0B $0.0B $0.0B IPOs Source: NZX Data revenue $2.8m 2014 revenue $2.2m

11 Capital Markets Capitalisation drives trading and clearing revenues YoY Growth 50% 40% 30% 20% 10% 0% -10% -20% -30% 13 % 21 % 9 % CAGR Q1'15 Market Cap Nbr of Trades Trade Value Source: NZX Data 11

12 Capturing the opportunities Capital markets IPO pipeline Futures, options ETFs Products NXT KiwiSaver registry Infrastructure Funds infrastructure NZClear NZX.com Retail Advice Relationships Regulation Franchise Advocacy 12

13 Funds management SuperLife acquisition The SuperLife acquisition provides the platform to accelerate the growth of Smartshares ETFs in the rapidly growing NZ funds management sector Globally, exchange traded funds (and passive managed funds more generally) have grown faster than other segments of the fund management market The development of our ETF business is consistent with NZX s strategy of investing in the growth of the breadth and depth of the capital markets 13

14 Funds Management ASX ETF Growth FuM (Index) 1,800 1,600 1,400 FuM (Au Sources) ETF Market Capitalisation # ETF's ASX Listed ETF s (#) 1,200 1, Mar-06 Mar-07 Mar-08 Mar-09 Mar-10 Mar-11 Mar-12 Mar-13 Mar % ETF FuM 7 % All FuM CAGR Source: ASX, ABD, RBA 14

15 Funds Management Net Funds Flow Relative to Funds Under Management Net Funds Flow / Total Funds Under Management 140% 120% 100% 80% 60% 40% 20% 0% SLSS SLKS Kiwisaver TOTAL YE Mar 09 YE Mar 10 YE Mar 11 YE Mar 12 YE Mar 13 YE Mar % SLKS 3 % SLSS % Growth 2014 Note: Total FuM each year calculated as average of opening and closing FuM balance Source: FundSource, SuperLife 15

16 Funds Management Capturing the opportunities 10 Funds ETFs Target 20+ Low-cost 30+ investment options KiwiSaver Merge Reinvigorate $856m current FuM 140+ employers Group Superannuation Two schemes won YTD 16

17 Agricultural informational and commodities Agricultural production growth NZ Dairy and Au Wheat Production Index Dairy (NZ) KgMS Wheat (Au)1,000 MT / / / / /13 % Dairy 2 % Grain CAGR Source: NZX Data 17

18 Agricultural informational and commodities Price volatility NZ Dairy and CBOT Wheat Price Volatility (% monthly change) 50% 40% 30% 20% 10% 0% -10% -20% -30% Dairy Price Index CBOT Spot Wheat Last 5 Years Range Dairy (21)% 27% Wheat (23)% 20% Source: NZX Data 18

19 Agricultural informational and commodities Comparison of ASX Wheat and NZX Dairy contracts Trade Volume (Index) Futures / Physical (%) 14% 12% 10% 8% 6% 4% 2% Years since launch 0% Years since launch ASX NSW Wheat NZX WMP Futures ASX WA Wheat NZX Dairy Derivatives ASX NSW Wheat GDT Products Source: NZX Data, ASX 19

20 Agricultural informational and commodities Clear trade volumes Volume by Harvest Thousands 1, Weeks 2008/ / / / / / /15 Source: NZX Data 20

21 Agricultural informational and commodities Content Subs (#) (#) 18,000 16,000 14,000 12,000 10,000 8,000 6,000 4,000 2,000 0 $1,000 $900 $800 $700 $600 $500 $400 $300 $200 $100 $0 Mar-11 Aug-11 Jan-12 Jun-12 Nov-12 Apr-13 Sep-13 Feb-14 Jul-14 Dec-14 Mar-11 Jul-11 Nov-11 Mar-12 Jul-12 Nov-12 Mar-13 Jul-13 Nov-13 Mar-14 Jul-14 Nov-14 Mar-15 Magazine Subscriptions (LHS) Data Revenues (RHS) Ad Pages Page Views ('000's) Source: NZX Data

22 Agricultural informational and commodities Capturing the opportunities CFTC Butter contract Dairy Milk exposure Clearers Entry in WA, SA Forwards Grain Operating model Dairy tools ifarm Data Shift to corporate Academy AgriHQ Busienss Information Print to online Monetisation 22

23 Investment made People Highly capable and stable senior management team Reduced attrition, market competitive compensation Growth in numbers in Markets, Market Supervision and Surveillance Infrastructure Systems (trading and clearing) Presence: Auckland office Compliance 23

24 Focus areas for 2015 Business Agri data and Clear Electricity Authority tender NZClear Market Advisor regulation Industry economics Competitive landscape Portfolio 24

25 Inform. Exchange.Grow NZX builds and operates capital, risk and commodity markets and the infrastructure required to support them. We provide high quality information, data and tools to support business decision making. We aim to make a meaningful difference to wealth creation for our shareholders and the individuals, businesses and economies in which we operate. 25

26 NZX Annual Meeting 2015