Interim report. Third quarter of 2017

Transcription

1 Interim report Third quarter of 2017

2 Main features of the third quarter: Continued high level of activity in both the primary and secondary markets Four companies admitted to listing on Oslo Børs, two new companies registered on the NOTC list, and 18 new equity issuers registered with VPS 125 new fixed income issues admitted to listing, 433 new fixed income issues registered with VPS Oslo Børs and the Stock Exchange of Thailand have signed a memorandum of understanding Share savings accounts available from 1 September 2017 circa 75,000 accounts set up with VPS in September New tax-efficient scheme for individual pension saving from 1 November 2017 Operating revenue NOK 233 million (205) EBITDA NOK 113 million (97) Earnings per share NOK 1.87 (1.53) Business activities in the quarter (same period last year in brackets) Oslo Børs VPS Holding reports a profit of NOK 80 million for the third quarter of 2017 (NOK 66 million) and a profit of NOK 281 million (NOK 196 million) for the first nine months of the year. Operating revenues Operating expenses EBITDA Operating profit (EBIT) Earnings for the period Earnings per share (NOK) 1,87 1,53 6,53 4,55 6,27 Earnings per share (NOK) before amortisations and write-down 1,88 1,55 6,58 5,20 6,93 The third quarter was characterised by the benchmark index reaching new all-time highs and continuing high levels of activity in the primary and secondary equity and fixed income markets. Reported revenue for the third quarter of 2017 was NOK 233 million, which is NOK 28 million higher than in the third quarter of Revenue related to listing and registration was in total NOK 18 million higher than in the third quarter of 2016, NOK 2 million of which amount relates to the consolidation of NOTC with effect from the second quarter of Revenue related to the trading and settlement of equities and fixed income issues was NOK 5 million higher than in the third quarter of 2016, while revenue related to trading in derivatives was in line with the third quarter of Revenue from the mutual funds area was NOK 4 million higher than in the third quarter of 2016, while revenue related to market data was NOK 1 million higher. Reported revenue for the first nine months of 2017 was NOK 76 million higher than in the first nine months of 2016, with revenue related to listing and registration NOK 66 million higher in the first nine months of 2017 than in the same period last year. Operating expenses before capitalisation of internal costs, depreciation and amortisation of excess value amounted to NOK 120 million in the third quarter of 2017, an increase of NOK 12 million from the third quarter of Operating expenses before capitalisation of internal costs, depreciation and amortisation of excess value for the first nine months of 2017 were NOK 24 million higher than in the first nine months of The increase principally relates to the financial sector tax, projects at both Oslo Børs and VPS (including Mifid 2, CSDR, share savings account, modernisation), the appointment of a new CEO of VPS, the fact that some types of costs increase with higher levels of activity, and general increases in salaries and prices. Net financial income for the third quarter of 2017 totalled NOK 2 million, in line with the same period in Net financial income for the first nine months of 2017 was NOK 15 million 2

3 higher than in the first nine months of The group s acquisition of the remaining 50% of NOTC AS and its change to a wholly owned subsidiary company from a joint venture meant that under IFRS the group s previous equity stake in NOTC had to be re-measured. This led to income of NOK 14.6 million being recognised in the second quarter, and to net financial income in the first nine months of this year increasing by NOK 15 million. Oslo Børs and the Stock Exchange of Thailand sign memorandum of understanding Share savings accounts from 1 September New tax-efficient scheme for individual pension saving In September, the Stock Exchange of Thailand and Oslo Børs signed a memorandum of understanding regarding market and product development, which will include investigating the possibility of secondary listings for companies listed on the two exchanges own marketplaces. The share savings account scheme entered into force on 1 September, with VPS offering services and solutions for share savings accounts from this date. At the end of September approximately 75,000 accounts had been set up with VPS. The revenue earned by VPS in the third quarter in relation to share savings accounts was primarily non-recurring revenue related to setting up share savings account solutions for customers. The revenue earned in 2017 will largely relate to share savings account transactions at VPS and delivering tax information to the providers of this product. From the start of 2018, share savings scheme revenue will relate to operating accounts and other related ongoing services. VPS wishes to encourage private individuals to save more by making the new IPS accounts available in VPS systems. The accounts will be able to be used to hold all types of financial instrument at VPS and will be available through today s various different interfaces. These include a case manager solution for providers and portal solutions for investors. IPS accounts at VPS will be available to our customers from November Outlook Operating expenses for 2017 before capitalisation of internal costs, depreciation and amortisation are expected to be in excess of NOK 500 million (unchanged from last reporting). This includes expenses related to a MiFID II version of Oslo Børs trading system Millennium Exchange, adapting VPS systems to the EU s CSD Regulation (CSDR), the financial sector tax that was approved by the Norwegian Parliament in December 2016, and the change of CEO at VPS. The financial sector tax consists of an extra payroll tax of 5% on the salaries and other remuneration received by financial sector employees in addition to the corporation tax rate remaining at 25% for financial sector companies. Operating expenses for 2018 before capitalisation of internal costs, depreciation and amortisation are also expected to be in excess of NOK 500 million. Included in this figure is an increase in expenses at Centevo in relation to planned development activities at the company. The group s operating revenue varies in line with the level of activity in the securities market. Oslo Børs VPS is committed to offering a range of products and a pricing structure that are competitive and that encourage active use of the group s services. Oslo Børs VPS anticipates that its marketplace activities will continue to face intense competition, and it also expects increasing competition for the group s post-trade activities. 3

4 Oslo Børs Equitues - value of turnover Oslo Børs Operating revenues Salary and other operating expenses EBITDA Depreciations and write-downs Amortisations Operating profit (EBIT) Reported revenue for Oslo Børs for the third quarter of 2017 was NOK 118 million (NOK 100 million), an increase of NOK 18 million from the same period in Revenue from the primary market was NOK 13 million higher, while revenue related to trading was NOK 4 million higher and revenue from the sale of market data was NOK 1 million higher. Reported revenue for Oslo Børs for the first nine months of 2017 was NOK 51 million higher than in the same period in Revenue from the primary market was NOK 49 million higher than in the first nine months of 2016, while revenue from the sale of market data was NOK 3 million higher. Revenue related to trading was NOK 1 million lower than in the first nine months of The OSEBX Index (the Benchmark Index) was at the end of the third quarter of 2017, an increase of 12.1% in the quarter. On the Oslo Børs marketplace, four companies were admitted to listing in the third quarter (including two transfers from Oslo Axess and Merkur market), while four companies were removed from listing. At the end of the third quarter of 2017, a total of 210 companies were listed on Oslo Børs and Oslo Axess, while 12 companies were listed on Merkur Market. At the end of the third quarter there were 47 companies registered on the NOTC list, with two companies newly registered on the list and two removed in the quarter. A total of 1,999 fixed income issues were listed on Oslo Børs and Nordic ABM (Alternative Bond Market) at the end of the third quarter of 2017, representing an increase of 204 relative to the end of the third quarter of Listing fees paid by issuers in the third quarter of 2017 totalled NOK 32 million, an increase of NOK 5 million from the same period in Document inspection and admission to listing fees in the third quarter of 2017 totalled NOK 16 million, an increase of NOK 8 million from the same period in Revenue of NOK 2 million from NOTC AS is included in the figures for the third quarter. The value of shares, ETFs and equity certificates traded in the third quarter of 2017 totalled NOK 252 billion (NOK 216 billion), an increase of 17% from the third quarter of We estimate that in the third quarter of 2017 Oslo Børs had a market share of trading in OBX shares of just under 60%, which is somewhat higher than in the same period in Oslo Børs had 50 member firms at the end of the third quarter of 2017, of which 18 are local firms and 32 are remote members. The overall level of activity in the derivatives market in the third quarter of 2017, as measured by the number of contracts traded, was approximately 1% higher than in the same period in The level of activity when measured in value terms was approximately 9% higher than in the same period in Fish Pool reported total contract turnover of 19,049 tonnes for the third quarter of 2017, representing an increase of approximately 60% from the same period in Total revenue related to trading in the third quarter of 2017 was NOK 32 million, up from NOK 28 million in the same period in Revenue related to trading in shares and fixed income issues in the third quarter of 2017 was NOK 4 million higher than in the same period in 2016, while revenue related to trading in derivatives was in line with the same period last year. Revenue from Fish Pool, which is included in revenue related to trading in derivatives, was NOK 1 million higher than in the third quarter of The estimated number of end users of market data from Oslo Børs at the end of the third quarter of 2017 was approximately 9% higher than at the end of the third quarter of The number of professional users was lower, while the number of private users was higher. There was also an increase in non-display use of market data. Revenue related to market data for the third quarter of 2017 was NOK 33 million, an increase of NOK 1 million from the same period in Salary and other operating expenses for the third quarter of 2017 totalled NOK 53 million, an increase of NOK 5 million relative to the same period in Salary and other operating expenses for the first nine months of 2017 were NOK 11 million higher than in the same period in The increase largely relates to trading system projects at Oslo Børs, the financial sector tax and general salary and price increases Q315 Q415 Q116 Q216 Q316 Q416 Q117 Q217 Q317 Financial market data - no of end users (professional and private) Q315 Q415 Q116 Q216 Q316 Q416 Q117 Q217 Q317

5 VPS VPS Operating revenues Salary and other operating expenses EBITDA Depreciations and write-downs Amortisations Operating profit (EBIT) Third-quarter operating revenue for VPS totalled NOK 113 million (NOK 104 million), an increase of NOK 9 million from the third quarter of In the issuer area, registered securities saw a reduction in the number of limited companies registered with VPS but an increase in the number of fixed income issues registered relative to the third quarter of At the end of the third quarter of 2017, 999 (1,003) limited companies and 3,114 (2,890) fixed income issues were registered with VPS. Revenue from the issuer area for the third quarter of 2017 totalled NOK 31 million, in line with the same period in Revenue from the issuer area for the first nine months of 2017 was NOK 7 million higher than in the same period in The market value of VPS-registered mutual funds at the end of the third quarter of 2017 was NOK 565 billion (NOK 467 billion), representing an increase of 21% relative to the end of the third quarter of The number of mutual funds transactions totalled 0.8 million in the third quarter, up 30% from the same period in Revenue from the mutual funds area for the third quarter of 2017 was NOK 22 million, an increase of NOK 4 million relative to the third quarter of Centevo is included in the VPS Fund Services reporting unit and reported revenue of NOK 5 million in the third quarter of 2017, in line with the same period in Revenue from the mutual funds area for the first nine months of 2017 was NOK 4 million higher than in the same period in The number of transactions in the settlement area in the third quarter of 2017 was 7% higher than in the same period in The number of investor transactions was approximately 20% higher in the third quarter of 2017 than in the same period in 2016 due to a higher level of activity among private individuals. Revenue from the settlement area for the third quarter of 2017 totalled NOK 25 million, an increase of NOK 1 million from the same period in Revenue from the settlement area for the first nine months of 2017 was NOK 5 million higher than in the same period in In the investor area, the market value of holdings at the end of the third quarter of 2017 was 15% higher than at the end of the third quarter of million VPS accounts were registered at the end of the third quarter of 2017, of which 1.15 million are income-earning for the investor area (the other accounts are share savings accounts which will not generate revenue in 2017 or accounts that affect income in the funds area). The total number of income-earning accounts at the end of the third quarter of 2017 was 4% higher than at the end of the third quarter of Revenue from the investor area for the third quarter of 2017 was NOK 34 million, an increase of NOK 5 million relative to the same period in Revenue from the investor area for the first nine months of 2017 was NOK 10 million higher than in the first nine months of Salary and other operating expenses for the third quarter of 2017 were NOK 7 million higher than in the same period in Salary and other operating expenses for the first nine months of 2017 were NOK 12 million higher than in the same period in The increase to a large extent relates to the financial sector tax, work on projects, the appointment of a new CEO, the fact that some types of expense increase as levels of activity increase, and general salary and price increases. Number of trade transactions (1000) Investor accounts and value of holdings Q315 Q415 Q116 Q216 Q316 Q416 Q117 Q217 Q Q315 Q415 Q116 Q216 Q316 Q416 Q117 Q217 Q # income-earning accounts (1000) Holdings (NOK bill) 5

6 Oslo Market Solutions Oslo Market Solutions Operating revenues Salary and other operating expenses EBITDA Depreciations and write-downs Amortisations Operating profit (EBIT) Operating revenue for the third quarter of 2017 was NOK 1.2 million higher than in the same period in 2016, while operating expenses were NOK 0.3 million higher. Operating revenue for the first nine months of 2017 was NOK 1.4 million higher than in the same period in 2016, while operating expenses were NOK 1.2 million higher. Oslo Market Solutions operating revenue fluctuates with the timing of the implementation of customer projects and the delivery of routine services. Please see for further operational key figures. All figures are in thousands of Norwegian kroner and apply to the Oslo Børs VPS group unless otherwise stated. The group comprises the parent company Oslo Børs VPS Holding ASA and the subsidiaries Oslo Børs ASA, Verdipapirsentralen ASA (VPS) and Oslo Market Solutions AS. The accounting information in this report has not been audited. 6

7 Profit and loss account This interim report has been prepared in accordance with IAS 34. The same accounting principles and methods of calculation are used in the interim report as in the annual accounts. Earnings per share is calculated on the basis of earnings for the period in question. Operating revenues Operating expenses Salary and other personnel expenses Other operating expenses Depreciations and write-downs Amortisations Write-downs 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 Profit/loss attributable to non-controlling interests Profit/loss attributable to owners of the parent Earnings per share (NOK) 1,87 1,53 6,53 4,55 6,27 Diluted earnings per share (NOK) 1,87 1,53 6,53 4,55 6,27 Earnings per share (NOK) before amortisations and write-down 1,88 1,55 6,58 5,20 6,93 EBITDA= Driftsinntekter fratrukket lønns- og personalkostnader og andre driftskostnader 7

8 Segment information The Oslo Børs VPS Holding group has three segments: Oslo Børs, VPS, and Oslo Market Solutions. The segments are equivalent to the subsidiaries of the same name. Transactions between companies in the same segment are not eliminated within the segment. The segment information reported has been prepared in accordance with IFRS 8. Oslo Børs Operating revenues Salary and other operating expenses EBITDA Depreciations and write-downs Amortisations Operating profit (EBIT) VPS Operating revenues Salary and other operating expenses EBITDA Depreciations and write-downs Amortisations Operating profit (EBIT) Oslo Market Solutions Operating revenues Salary and other operating expenses EBITDA Depreciations and write-downs Amortisations Operating profit (EBIT) Other/eliminations Operating revenues Salary and other operating expenses EBITDA Depreciations and write-downs Amortisations Operating profit (EBIT) Total operating revenues Total salary and other operating expenses Total EBITDA Total capitalisation of internal resources Total depreciations and write-downs Total amortisations Total operating profit (EBIT)

9 Balance sheet Current receivables totalled approximately NOK 110 million at the end of the third quarter. Of this, trade receivables totalled NOK 78 million, and other current receivables, including prepaid expenses and income accrued but not yet invoiced, amounted to NOK 32 million. Cash and cash equivalents held at the end of the third quarter totalled NOK 714 million. Current liabilities, which consist of non-interesting bearing other debt, amounted to approximately NOK 237 million, of which prepayments from customers and tax payable accounted for NOK 60 million and NOK 79 million respectively. Fixed assets 30 Sept 30 Sept 31 Dec IT systems Registrations Goodwill Deferred tax assets Tangible assets Financial fixed assets Current assets Receivables Cash and liquid assets Assets Equity Contributed equity Non-controlling interests Total equity Liabilities Pension liabilities Deferred tax liabilities Current liabilities Equity and liabilities

10 Cash flow Cash flow is reported in accordance with IAS 7. Oslo Børs VPS Holding recorded an increase in cash and cash equivalents of NOK 50 million in the third quarter. Cash and cash equivalents held at the end of the third quarter totalled NOK 714 million. Cash flow from - operational activities investment activities investments in systems and tangible assets investments in subsidiaries 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) 1,17 1,64 2,57 1,69 0,59 Equity Equity amounted to NOK 1,106 million at the end of the third quarter, and the equity ratio was 73%. 31 Dec Equity at period's start Total comprehensive income Dividends Purchase of own shares Acturial gains/losses in the period Change in non-controlling interests etc Equity at period's end

11 Shareholder information Oslo Børs VPS Holding ASA share price: The graph shows movements in the share price of Oslo Børs VPS Holding ASA over the last five years. The company has issued 43,004,000 shares. Approximately 0.9 million shares were traded in the third quarter, with prices from NOK to NOK 116. The last registered trade in the third quarter of 2017 was at NOK 112. Dividends last five years Dividend per share (NOK) 7,00 7,00 8,20 6,75 6,45 Payout ratio vs EPS adjusted for amortisations and write-downs 113 % 111 % 111 % 92 % 93 % In addition to dividends above, a special dividend of NOK 4,50 per share was paid out in August Oslo Børs VPS Holding ASA 20 largest shareholders at 24 October

12 Key figures Financial Earnings per share (NOK) 1,87 1,53 6,53 4,55 6,27 Diluted earnings per share (NOK) 1,87 1,53 6,53 4,55 6,27 Earnings per share (NOK) before amortisations and write-down 1,88 1,55 6,58 5,20 6,93 Change in cash per share (NOK) 1,17 1,64 2,57 1,69 0,59 Return on equity 30,1 % 26,3 % 35,8 % 25,5 % 26,2 % Return on total capital 28,7 % 25,4 % 32,7 % 23,9 % 24,8 % Net operating margin 45,1 % 41,8 % 46,9 % 38,2 % 38,8 % Operational OSEBX index at period's end 783,09 622,69 783,09 622,69 683,87 Change in period 12,1 % 3,3 % 14,5 % 2,0 % 12,1 % Equities - no. of transactions (1000s) Equities - value of turnover (NOKbn) Equities - market value listed companies (NOKbn) No. of companies listed Change in period Number of trade transactions processed in VPS (1000s) Number of VPS-accounts (1000s) Derivatives - no. of contracts traded (1000s) Turnover derivatives (NOK million) Financial market data - number of end-users The Board of Directors of Oslo Børs VPS Holding ASA Oslo, 24 October

13 OSLO BØRS VPS HOLDING ASA PO Box 460 Sentrum 0105 Oslo