Interim report Second quarter and first six months of 2014

Transcription

1 Interim report Second quarter and first six months of 2014

2 Main features of the second quarter: Trading in shares up by 13% relative to the second quarter of 2013 Continuing strong interest in admission of both shares and bonds to stock exchange listing Seven new companies admitted to listing in the quarter VPS continued work on renewing its IT platform new VPS Investor Services launched Introduction of intra-day auction at Oslo Børs to concentrate and improve liquidity Sale of Oslo Clearing completed on 2 May 2014 NOK 48 million in gain recognised in Q214 The Board of Directors approved a special dividend of NOK 4.50 per share to shareholders on register 14 August 2014 Operating revenue NOK 225 million (231) EBITDA NOK 120 million (111) Earnings per share before amortisation of excess value NOK 3.04 (1.75) Earnings per share NOK 2.69 (1.42) Business activities in the second quarter (same period in 2013 in brackets) Key figures for the group Oslo Børs VPS Holding reports a profit of NOK 116 million for the second quarter of 2014 (NOK 61 million). Operating revenues Operating expenses EBITDA Operating profit (EBIT) Earnings for the period Earnings per share (NOK) 2,69 1,42 4,24 2,23 4,98 Earnings per share (NOK) before amorisations 3,04 1,75 4,94 2,89 6,33 The positive trends seen in the first quarter have continued into the second quarter of In addition to higher activity in the secondary market than last year, Oslo Børs VPS is seeing continuing interest in listing and registration of fixed income issues, together with increased interest in new listings of shares. Revenue reported for the second quarter of 2014 was NOK 225 million, NOK 6 million lower than in the same period in Revenue related to companies purchased and disposed of (Burgundy, Fish Pool, Evolution, and Oslo Clearing) was NOK 22 million less. Organic growth in the second quarter therefore amounted to NOK 14 million. Revenue related to trading and settlement showed an increase of NOK 5 million. Revenue related to listing and registration and revenue related to market data increased by NOK 7 million and NOK 2 million respectively. After adjusting for the recognition to revenue of NOK 84 million of negative goodwill in the first six months of 2013, reported revenue for the first six months of 2014 was up by NOK 26 million. After adjusting for revenue related to companies purchased and disposed of, revenue was NOK 43 million higher. Revenue related to companies purchased and disposed of showed an increase of NOK 14 million, with revenue related to listing and registration and revenue related to market data increasing by NOK 24 million and NOK 2 million respectively. Other revenue increased by NOK 3 million. Operating expenses before capitalisation of internal costs, depreciation and amortisation of excess value amounted to NOK 138 million in the second quarter, a decrease of NOK 16 million from the same period in After adjusting for costs related to companies purchased and disposed of (Burgundy, Fish Pool, Evolution and Oslo Clearing) and other non-recurring items, operating expenses were unchanged. 2

3 Introduction of intra-day auction to concentrate and improve liquidity After adjusting for costs related to companies purchased and disposed of as well as other nonrecurring items, operating expenses so far this year show an increase of NOK 4 million. This increase was largely due to costs directly related to higher trading volume, as well as costs incurred in connection with technology upgrades. Amortisation of excess value was NOK 1 million higher each quarter as a consequence of the amortisation of excess value which arose from the purchase of Evolution in the third quarter of Net financial income for the second quarter was influenced by the proceeds from the sale of Oslo Clearing ASA (NOK 48 million). After adjusting for this, net financial income was NOK 3 million lower in the quarter. This was partly due to exchange rate items and partly to lower income from liquid assets. Oslo Børs has traditionally carried out opening and closing auctions for all shares and equity certificates listed on the Oslo Børs and Oslo Axess marketplaces. From 16 June, Oslo Børs has held an additional auction at 13:30 for shares listed on the Oslo Axess marketplace and for shares listed on the Oslo Børs marketplace that are in the OB standard liquidity category. The goal of the new auction is to improve the process of price formation and increase interest in these shares. The companies affected are important both for Norwegian business and industry and for Oslo Børs. The likelihood of finding a counterparty and carrying out a trade is improved when interest in a share is concentrated. The auctions will make it simpler for parties with a natural interest in a particular share to find a matching party though the order book, while at the same time the auctions will facilitate crossing of larger orders in less-liquid securities. The new auctions will result in normal trading in the affected shares stopping at 13:30 and resuming at 13:35 following the end of the auction period. Fastest growing Nordic marketplace now has over 1,000 listed issues Nordic ABM is the fastest growing Nordic marketplace. By the first week of April 2014, 1,000 issues were listed on this alternative marketplace for bonds and certificates. Recent years have seen a sharp increase in the number of fixed income issues listed on the Oslo Børs marketplaces. Last year saw as many as 337 new bond and certificate issues listed on Nordic ABM, and so far this year borrowers have raised new loan capital from 186 new issues. Oslo Børs operates two marketplaces for listing and trading in fixed income instruments: Nordic ABM and Oslo Børs. The rules on duty of disclosure and trading are largely the same for the two marketplaces, but Nordic ABM offers a speedier and less comprehensive listing process. At the end of the second quarter, 2,378 bond issues and 416 certificates (short-term fixed income instruments) were registered in VPS. Oslo Børs and LCH.Clearnet launch new clearing service As of 19 March, equities and ETFs traded on Oslo Børs and Oslo Axess can be cleared through LCH.Clearnet. This means that member firms of Oslo Børs now have a choice of two clearing houses. Oslo Clearing introduced equity clearing for Oslo Børs and Oslo Axess in Members of Oslo Børs now also have the opportunity to choose LCH.Clearnet for clearing equity instruments. Trading in shares, equity certificates and derivatives on Oslo Børs and Oslo Axess are cleared through a central counterparty (CCP) a clearing house. Consequently, members must set up a clearing arrangement in order to trade these products on the marketplaces. In practical terms, clearing involves a central counterparty acting as the counterparty to both the seller and the buyer and guaranteeing that settlement will take place and the securities traded will be delivered. Closing of agreement to sell Oslo Clearing ASA shares to SIX Group Special dividend of NOK 4.5 approved Oslo Børs VPS Holding ASA sold on 2 May 100% of the shares in Oslo Clearing to SIX Group. The price amounts to NOK 202 million. The group recognised a gain of NOK 48 million from the sale of the company. Oslo Børs VPS Holding ASA s Board of Directors has, based on a mandate approved by the annual general meeting on 26 May 2014, resolved to pay a special dividend of NOK 4.50 to shareholders of Oslo Børs VPS on the register on 14 August NOK 2.67 per share of this constitutes a return of tax-related paid-in capital. The distribution is in accordance with earlier communication regarding distribution of most of the proceeds from the sale of Oslo Clearing. The distribution is by nature a return of capital. Last day of trading including dividend is 14 August The share will be traded ex dividend 15 August Oslo Børs VPS Holding ASA expects to pay the dividend on 25 August

4 Modernisation of VPS s IT platform VPS has been working for some time on modernising its IT platform, including on evaluating specific alternatives to replace its core systems for securities registration and settlements. VPS is currently involved in negotiations with a possible supplier. If these are successful, VPS will start an implementation project in the fourth quarter of VPS Client Services are being renewed in 2014, and new screen formats were introduced on 11 June. The new version of VPS Client Services offers an entirely new user experience with improved graphics, yield calculations, device-responsive design, and more historic data. In addition, users now have access to more market data than ever before. Outlook for 2014 The group s operating revenue varies in line with the level of activity in the securities market. Oslo Børs 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. Oslo Børs VPS will also in the future consider adjusting certain of its fees and prices, as well as further measures to improve the efficiency of its organisation and services for the good of its customers. Operating expenses for 2014 before capitalisation of internal costs, depreciation and amortisation are expected to be in the order of NOK million. Comparable expenses in 2013 were just over NOK 440 million (after adjusting for non-recurring items and changes in the composition of the group). The acquisition of Burgundy accounted for revenue of NOK 60 million in 2013, not including the recognition of negative goodwill of NOK 84 million. Revenue from Burgundy in 2014 is expected to be NOK 8 million. Oslo Clearing, which ceased to be part of the group on 2 May 2014, reported for the period May to December 2013 revenues of NOK 36 million, operating expenses before capitalisation of internal costs and depreciation of NOK 29 million and net financial items of NOK 2 million. 4

5 Oslo Børs Oslo Børs Operating revenues Salary and other operating expenses EBITDA Capitalisation of internal resources Depreciations and write-downs Amortisations Operating profit (EBIT) Revenue reported for the second quarter of 2014 was 1% or NOK 2 million lower than in the second quarter of Revenue related to acquired companies decreased by NOK 17 million (Burgundy NOK 16 million, Fish Pool NOK 1 million). Organic growth therefore amounted to NOK 15 million. Revenue related to trading in shares, fixed income instruments, and derivatives listed on Oslo Børs and Oslo Axess was NOK 2 million higher than in the same period of 2013, while revenue from the primary market and revenue from market data increased by NOK 10 million and NOK 2 million respectively. For the first six months of 2014 as a whole, organic growth amounted to NOK 34 million, while the revenue generated by Burgundy and Fish Pool decreased by NOK 18 million. Total revenue was therefore NOK 16 million higher than in the first six months of The OBX Index was at the close of the second quarter, up by 10.4% in the quarter. Seven new companies were admitted to listing on the Oslo Børs and Oslo Axess marketplaces in the second quarter. Four companies were removed from listing. At the end of the second quarter, 216 companies were listed in total, of which 34 were listed on Oslo Axess. In total 1,679 fixed income issues were listed on Oslo Børs and on Nordic ABM (Alternative Bond Market) at the end of the second quarter, representing an increase of 172 from the same quarter of Listing fees paid by issuers in the second quarter totalled NOK 24 million, up by 12% or NOK 3 million from the same period in Document inspection and admission to listing fees in the second quarter of 2014 totalled NOK 14 million, up by NOK 7 million. For the first six months of 2014 as a whole, listing fees paid by issuers increased by NOK 5 million, and document inspection and admission to listing fees increased by NOK 14 million. The value of shares, ETFs, and equity certificates traded in the second quarter was NOK 242 billion (NOK 215 billion), an increase of 13% from the second quarter of We estimate that Oslo Børs had a market share of trading in OBX shares in the order of 60% both in the second quarter of 2014 and in the same quarter in Oslo Børs had 56 active member firms at the end of the second quarter, of which 18 are local members and 38 are remote members. The overall level of activity in the Oslo Børs derivatives market in the second quarter, as measured by the number of contracts traded, was around 10% lower than in the same period in Fish Pool reported contract turnover for the second quarter of 22,263 tonnes. This represents a decrease of 20% from the same period in 2013, and is due to the low level of activity seen in May Total revenue related to trading in the second quarter was NOK 31 million, down from NOK 45 million in the same period in For the first six months of 2014 as a whole, total revenue related to trading decreased from NOK 82 million to NOK 73 million. Revenue from Burgundy and Fish Pool are reported as part of revenue related to trading. The estimated number of end users of market data from Oslo Børs at the end of the second quarter was around 2% lower than at the end of the same period in The number of professional users has increased slightly, while the number of subscriptions by private individuals has decreased. Revenue for the second quarter of 2014 was 7% or NOK 2 million higher than in second quarter of Personnel expenses and other operating expenses for the second quarter were NOK 7 million lower than in the same period in After adjusting for normal operating expenses for Burgundy in the second quarter of 2013, operating expenses for the second quarter of 2014 were 10% or NOK 4 million higher than in the same period last year. After adjusting for non-recurring items, operating expenses were 10% or NOK 8 million higher for the first six months of 2014 than in the same period last year. This was largely due to costs directly related to higher trading volumes, as well as costs incurred in connection with technology upgrades. Equities - value of turnover Market data - number of end users Q312 Q412 Q113 Q213 Q313 Q413 Q114 Q Q312 Q412 Q113 Q213 Q313 Q413 Q114 Q214 5

6 Accounts VPS VPS Operating revenues Salary and other operating expenses EBITDA Capitalisation of internal resources Depreciations and write-downs Amortisations Operating profit (EBIT) Second quarter operating revenue for VPS totalled NOK 114 million (NOK 111 million), representing an increase of 3% or NOK 3 million from the same quarter in Operating revenue for the first six months of 2014 was NOK 228 million (NOK 212 million). In the issuer area, registered securities saw an increase in the number of fixed income issues, but a reduction in the number of limited companies listed with VPS relative to the second quarter of At the end of the second quarter, 1,104 (1,158) limited companies and 2,378 (2,223) fixed income issues were registered with VPS. Revenue from the issuer area for the second quarter of 2014 was 3% or NOK 1 million lower than in the same period last year. Revenue from the issuer area for the first six months of 2014 was 8% or NOK 5 million higher than for the first six months of The market value of VPS-registered mutual funds at the end of the second quarter was NOK 499 billion (NOK 389 billion), representing an increase of 28% from the end of the second quarter of The number of mutual fund transactions totalled 0.9 million in the second quarter, down 23% from the same period in Revenue from the mutual funds area for the second quarter was NOK 3 million higher than in the second quarter of Evolution is included in the VPS Fund Services reporting unit. Evolution reported revenue of NOK 4 million for the second quarter of Revenue for the first six months of 2014 was NOK 7 million higher than in the equivalent period in Evolution reported revenue of NOK 8 million for the first six months of The number of transactions in the settlements area in the second quarter of 2014 was 10% higher than in the second quarter of Revenue from the settlements area in the second quarter was 10% or NOK 2 million higher than in the same period in Revenue for the first six months of 2014 was 10% or NOK 5 million higher than in the same period in In the investor area, the market value of holdings was 7% higher at the end of the second quarter of 2014 than at the same time in million VPS accounts were registered at the end of the second quarter of 2014, a reduction of 12% from the end of the second quarter of Second quarter revenue from the investor area was 3% or NOK 1 million lower than in the same quarter in Revenue for the first six months of 2014 was in line with the same period in 2013 (NOK 59 million). Personnel expenses and other operating expenses for the second quarter of 2014 were NOK 2 million lower than in the same period in Operating expenses for the first six months of 2014 were NOK 2 million higher than in the same period in After adjusting for Evolution, for which operating expenses were NOK 3 million in the second quarter and NOK 6 million for the first six months of 2014, operating expenses were NOK 4 million lower in both periods. Amortisation of excess value was NOK 1 million higher in both quarters than in the corresponding quarters in 2013 as a result of the amortisation of the excess value that arose from the acquisition of Evolution. Number of trade transactions prossesed in VPS (1000) Number of VPS-accounts and owners of financial instruments in VPS Q312 Q412 Q113 Q213 Q313 Q413 Q114 Q Q312 Q412 Q113 Q213 Q313 Q413 Q114 Q Accounts (1000) Owners (1000) 6

7 Oslo Clearing Oslo Clearing Operating revenues Salary and other operating expenses EBITDA Capitalisation of internal resources Depreciations and write-downs Amortisations Operating profit (EBIT) Oslo Clearing ceased to be part of the group on 2 May The profit recorded for the second quarter of 2014 therefore represents about one month s operations, whereas the figure for 2013 represents three months operations. 7

8 Oslo Market Solutions Oslo Market Solutions Operating revenues Salary and other operating expenses EBITDA Capitalisation of internal resources Depreciations and write-downs Amortisations Operating profit (EBIT) Operating revenue for the second quarter of 2014 was NOK 0.3 million higher than in the second quarter of Revenue for the first six months of 2014 was NOK 2.4 million higher than in the same period in Oslo Market Solutions operating revenue fluctuates with the timing of the implementation of customer projects and delivery of routine services. Personnel expenses and other operating expenses for the first six months of 2014 were in line with the same period in 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), Oslo Clearing ASA and Oslo Market Solutions AS. The accounting information in this report has not been audited. 8

9 Profit and loss account The 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 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 Profit/loss attributable to non-controlling interests Profit/loss attributable to owners of the parent Earnings per share (NOK) 2,69 1,42 4,24 2,23 4,98 Diluted earnings per share (NOK) 2,69 1,42 4,24 2,23 4,98 Earnings per share (NOK) before amorisations 3,04 1,75 4,94 2,89 6,33 EBITDA= Operating revenues - Salary and other personnel expenses - Other operating expenses 9

10 Segment information The Oslo Børs VPS Holding group has four segments: Oslo Børs, VPS, Oslo Clearing, and Oslo Market Solutions. The segments are equivalent to the subsidiaries of the same name. The segment information reported has been prepared in accordance with IFRS 8. Oslo Børs Operating revenues Salary and other operating expenses EBITDA Capitalisation of internal resources Depreciations and write-downs Amortisations Operating profit (EBIT) VPS Operating revenues Salary and other operating expenses EBITDA Capitalisation of internal resources Depreciations and write-downs Amortisations Operating profit (EBIT) Oslo Clearing Operating revenues Salary and other operating expenses EBITDA Capitalisation of internal resources Depreciations and write-downs Amortisations Operating profit (EBIT) Oslo Market Solutions Operating revenues Salary and other operating expenses EBITDA Capitalisation of internal resources Depreciations and write-downs Amortisations Operating profit (EBIT) Other/eliminations Operating revenues Salary and other operating expenses EBITDA Capitalisation of internal resources 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)

11 Balance Sheet Short-term receivables totalled approximately NOK 105 million at the end of the second quarter. Of this, trade receivables totalled NOK 70 million. Other current receivables, including prepaid expenses and income accrued but not yet invoiced, amounted to NOK 35 million. Cash and cash equivalents held at the end of the second quarter totalled NOK 824 million. Current liabilities amounted to approximately NOK 268 million, of which prepayments from customers and tax payable accounted for NOK 95 million and NOK 85 million respectively. The figures reported on the balance sheet for the market value of the outstanding derivative positions, treasury bills and bonds as well as the cash collateral belonging to member firms reflect exceptional changes due to Oslo Clearing leaving the group in the second quarter of Fixed assets 30 June 30 June 31 Dec IT systems Customer relations Registrations 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 liquid assets Assets Equity Contributed equity Earned equity Non-controlling interests Total equity Liabilities Pension liabilities Deferred tax liabilities Cash collateral Market value of outstanding derivatives positions Current liabilities Equity and liabilities

12 Cash flow Cash flow is reported in accordance with IAS 7. Oslo Clearing ceased to be part of the group in the second quarter of This influenced the total cash and cash equivalents held by the group as well as the entries for investments in Treasury bills and bonds, and cash collateral received. Oslo Børs VPS Holding recorded a decrease in cash and cash equivalents of NOK 1,168 million in the second quarter. The sale of Oslo Clearing brought about a decrease in holdings of cash and cash equivalents of NOK 909 million once the proceeds from the sale are taken into account. In addition, NOK 301 million was paid out in dividends in the quarter. Cash and cash-equivalents held at the end of the quarter totalled NOK 824 million. Cash flow from - operational activities investment activities investments in systems and tangible assets investments in subsidiaries 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) -27,16-5,93-17,37-0,16 6,23 Treasury bills, bonds and bank deposits Cash collateral from members Net after deduction for cash collateral from members Equity Equity amounted to NOK 1,263 million at the end of the second quarter, and the equity ratio was 75%. 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 Equity ratio 75 % 42 % 75 % 42 % 44 % 12

13 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 1.9 million shares were traded in the second quarter of 2014, with prices from NOK 71 to NOK 80. The last registered trade in the second quarter was at NOK The ex-dividend date was 27 May Oslo Børs VPS Holding ASA 20 largest shareholders at 12 August

14 Key figures Financial Earnings per share (NOK) 2,69 1,42 4,24 2,23 4,98 Diluted earnings per share (NOK) 2,69 1,42 4,24 2,23 4,98 Earnings per share (NOK) before amorisations 3,04 1,75 4,94 2,89 6,33 Change in cash per share (NOK) -27,16-5,93-17,37-0,16 6,23 Return on equity 32,4 % 16,9 % 25,7 % 13,2 % 15,4 % Return on total capital 20,0 % 11,1 % 15,3 % 8,7 % 9,7 % Net operating margin 38,6 % 33,1 % 37,0 % 22,9 % 28,1 % Operational OBX index at period's end 566,95 431,03 566,95 431,03 503,58 Change in period 10,4 % -0,7 % 12,6 % 5,1 % 22,7 % 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 Resultat pr. aksje: Kontantstrøm pr. aksje: Egenkapitalrentabilitet Totalkapitalrentabilitet Netto driftsmargin Periodens resultat/gjennomsnittlig antall aksjer Netto endring i kontanter og kontantekvivalenter/gjennomsnittlig antall aksjer Periodens resultat (annualisert)/gjennomsnitt av bokført egenkapital gjennom året målt på månedlig basis Resultat før skatt (annualisert)/gjennomsnitt av sum eiendeler gjennom året målt på månedlig basis Driftsresultat/driftsinntekter We hereby confirm that, to the best of our knowledge, the summarised half-yearly accounts for the period 1 January to 30 June 2014 have been prepared in accordance with IAS 34 Interim Financial Reporting, and that the information contained in the half-yearly report gives a true and fair view of the assets, liabilities, financial position and profit or loss of the company and group taken as a whole, and provides a true and fair summary of the information mentioned in Section 5-6, fourth paragraph, of the Securities Trading Act. The Board of Directors of Oslo Børs VPS Holding ASA Oslo, 13 August 2014 Benedicte Schilbred Fasmer Chair of the Board Harald Espedal Deputy chair of the Board Ottar Ertzeid Member of the Board Wenche Agerup Member of the Board Widar Salbuvik Member of the Board Christian Fredrik Falkenberg Kjøde Member of the Board Sissel Bakker Member of the Board Bente A. Landsnes Group CEO 14

15 OSLO BØRS VPS ASA PO Box 460 Sentrum 0105 Oslo Telephone: