Interim report Second quarter and first six months of 2015

Transcription

1 Interim report Second quarter and first six months of 2015

2 Main features of the second quarter: Good level of trading and settlement activity continued in the second quarter Continuing strong interest in admission of both shares and bonds to stock exchange listing - seven new listings in the quarter High level of activity and increased income from issuer services and corporate actions Reduced costs for issuers from introduction of electronic messaging to investors Oslo Børs is to open a new marketplace, Merkur Market Oslo Børs launched a new index for medium-sized companies, the Oslo Børs Mid Cap Index Operating revenue NOK 234 million (222) EBITDA NOK 124 million (120) Earnings per share of NOK 1.91 (1.56) Business activities in the quarter (same period last year in brackets) Oslo Børs VPS Holding reports a profit of NOK 82 million for the second quarter of 2015 (NOK 67 million). Oslo Clearing was sold in May 2014 and the comparison figures in the profit and loss account have been restated accordingly. Restated Restated Operating revenues Operating expenses EBITDA Operating profit (EBIT) Earnings for the period - continued operations Earnings for the period - discontinued operations Earnings for the period Earnings per share (NOK) - continued operations 1,91 1,56 3,54 3,03 5,86 Earnings per share (NOK) - discontinued operations 0,00 1,13 0,00 1,21 1,21 Earnings per share (NOK) before amorisations - continued operations 1,92 1,91 3,57 3,73 7,26 The second quarter has been characterised by significant market volatility. This has led to high levels of activity in the secondary market relative to last year. Oslo Børs VPS is seeing continued interest in the listing and registration of both shares and fixed income issues. Revenue from continuing operations for the second quarter of 2015 was NOK 234 million, which is NOK 13 million higher than in the same period in Revenue related to listing and registration increased by NOK 9 million. Revenue related to market data and revenue from the mutual funds area both increased by NOK 2 million. Reported revenue for the first six months of 2015 increased by NOK 8 million relative to the same period in After adjusting for non-recurring revenue from Burgundy for the first quarter of 2014, reported revenue increased by NOK 15 million. Revenue related to listing and registration increased by NOK 4 million. Revenue related to market data increased by NOK 5 million, while revenue from the mutual funds area increased by NOK 4 million. Revenue related to trading and settlement increased by NOK 3 million. Operating expenses before capitalisation of internal costs, depreciation and amortisation of excess value amounted to NOK 110 million in the second quarter, an increase of NOK 8 million from the same period in Operating expenses for the first six months were NOK 13 million higher than in the same period in Reasons for the increase in the second quarter include increases in salaries and prices, higher levels of activity at individual companies and nonrecurring items. Net financial income for the second quarter was down NOK 2 million due to lower holdings of cash and cash equivalents and lower interest rates. 2

3 Oslo Børs is to open a new marketplace, Merkur Market Oslo Børs is to open a new marketplace, Merkur Market, which will offer listing and electronic trading of shares and equity certificates for both small and large companies as a supplement to the regulated Oslo Børs marketplaces. The new marketplace will open in January Merkur Market will be an alternative marketplace that will be suitable for many companies, both Norwegian and international. The new marketplace will also be available to companies that are not public limited companies (ASA), and will be of interest to companies that seek greater visibility and liquidity for their shares with the opportunity of electronic share trading. The marketplaces operated by Oslo Børs are an important source of capital for business and industry, and the new marketplace will expand the scope of this in line with the changes made possible by EU rules and regulations. Merkur Market will offer an efficient application process for companies that wish to be admitted to trading. The admission requirements will be less extensive than is the case for admission to listing on Oslo Børs or Oslo Axess, but will nonetheless ensure that investors have access to the information they need. Oslo Børs has launched the Mid Cap Index The Oslo Børs Mid Cap Index (OSEMX), which was launched on 1 June, covers an important segment of the market and is the first index to include both equity certificates and shares. Companies with a market capitalisation of between NOK 1 billion and NOK 15 billion are eligible for inclusion in the index. The index is an investable index, which means that it is easy to buy and sell the shares and equity certificates included in the index on the market. This is of crucial importance for mutual funds and other market participants that wish to use the index as a benchmark index. It is therefore a requirement that securities included in the index are liquid securities that have been traded on at least nine out of every ten days during the six months prior to the composition of the index being decided. VPS 30 years of focusing on efficiency, quality and security On 14 June 1985 the Act relating to the Norwegian Securities Registry was adopted, making VPS, the Norwegian central securities depository, a reality. The main purpose of the newly established VPS system was to simplify the entire bureaucratic process surrounding buying and selling securities and to introduce a paperless system. This ambition resulted in Norway and VPS being the first in the world to introduce a mandatory transition to a completely electronic securities depository. In the early years, the focus was on setting up and developing the systems, and much emphasis was put on registering issuers. But as VPS acquired more and more customers, it became necessary to shift orientation towards the market and customer relations. Operational reliability then became a priority, as did allowing increased volume to benefit users through lower prices. Around the turn of the millennium, competition increased and the securities markets became more international. Steps were taken to position VPS in response to this through the development of end-user solutions such as VPS Investor Services. Further focused work was carried out on security to reduce risk for the market and the company. Now, 30 years after VPS was established, European legislation and the anticipated level of competition are making it necessary to modernise large parts of VPS s activities. The adjustments required to meet the challenges of the coming years in a proactive manner are already well underway. In order to prepare VPS for the future, a modernisation program was drawn up and started in the autumn of 2014, which will address IT systems, organisation, expertise, market practice and a new licence. VPS has served Norwegian society well over the last thirty years. The most important tasks of a central securities depository have been, and will continue to be, to deliver security and efficiency for issuers, owners and traders, and to contribute to financial stability. 3

4 Outlook for 2015 Operating expenses for 2015 before capitalisation of internal costs, depreciation and amortisation are expected to be in the order of NOK 450 million to NOK 460 million. Comparable expenses in 2014 were NOK 440 million. The increase is due to one-off costs associated with the modernisation program at VPS, upgrades to trading systems and normal increases in salaries and prices. 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. 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 benefit of its customers. 4

5 Oslo Børs Restated Restated Oslo Børs Operating revenues Salary and other operating expenses EBITDA Capitalisation of internal resources Depreciations and write-downs Amortisations Operating profit (EBIT) Oslo Clearing was sold in May 2014 and the comparison figures in the profit and loss account have been restated accordingly. Reported revenue for Oslo Børs for the second quarter of 2015 was 7% or NOK 8 million higher than in the second quarter of Revenue related to trading in shares, fixed income instruments and derivatives listed on Oslo Børs and Oslo Axess and revenue from the sale of market data both increased by NOK 2 million, while revenue from the primary market increased by NOK 5 million. Revenue related to trading on Fish Pool decreased by NOK 1 million. After adjusting for non-recurring revenue from Burgundy for the first quarter of 2014, revenue for the first six months of 2015 increased by NOK 7 million. The OBX Index was at the close of the second quarter, up by 1.3% in the quarter. Seven new companies were admitted to listing on the Oslo Børs and Oslo Axess marketplaces in the second quarter. Five companies were removed from listing. At the end of the quarter, 218 companies were listed in total. In total, 1,715 fixed income issues were listed on Oslo Børs and Nordic ABM (Alternative Bond Market) at the end of the second quarter, representing an increase of 36 from the same point in Listing fees paid by issuers in the second quarter of 2015 totalled NOK 26 million, up by 8% or NOK 2 million from the same period in Document and admission to listing fees in the second quarter of 2015 totalled NOK 17 million, representing an increase of NOK 3 million. Listing fees paid by issuers in the first six months of 2015 increased by NOK 3 million, while document and admission to listing fees were down NOK 3 million. The value of shares, ETFs and equity certificates traded in the second quarter of 2015 totalled NOK 283 billion (NOK 242 billion), an increase of 17% relative to the second quarter of We estimate that in the second quarter of 2015 Oslo Børs had a market share of trading in OBX shares in excess of 60%, a slight increase from the second quarter of Oslo Børs had 50 active member firms at the end of the second quarter, of which 18 are local members and 32 are remote members. The overall level of activity in the derivatives market in the second quarter of 2015, as measured by the number of contracts traded, was approximately 19% lower than in the same period in The level of activity when measured in value terms decreased by approximately 5% compared with the same period in Fish Pool reported contract turnover of approximately 2,000 tonnes for the second quarter of 2015, representing a decrease of approximately 47% from the same period in Total revenue related to trading for Oslo Børs in the second quarter of 2015 was NOK 32 million, up from NOK 31 million in the same period in After adjusting for non-recurring revenue from Burgundy in 2014, revenue related to trading for the first six months of 2015 increased by NOK 3 million. The estimated number of end users of market data from Oslo Børs at the end of the second quarter was around 4% higher than at the end of the same period in The number of professional users increased by approximately 6%, while the number of subscriptions by private individuals decreased. Revenue from market data for the second quarter of 2015 was NOK 33 million, which is 4% or NOK 1 million higher than in the second quarter of Revenue from market data for the first six months of 2015 was NOK 5 million higher than in the first six months of Personnel expenses and other operating expenses for the second quarter of 2015 were in line with the same period in Personnel expenses and other operating expenses were NOK 2 million higher for the first six months of 2015 than in the same period in The increase was partially due to salary and price increases, and partially due to costs associated with upgrades to the Millennium Exchange trading system, including the implementation of the North Sea dark pool. Equities - value of turnover Market data - number of end users Q213 Q313 Q413 Q114 Q214 Q314 Q414 Q115 Q Q213 Q313 Q413 Q114 Q214 Q314 Q414 Q115 Q215 5

6 VPS Restated Restated VPS Operating revenues Salary and other operating expenses EBITDA Capitalisation of internal resources Depreciations and write-downs Amortisations Operating profit (EBIT) Oslo Clearing was sold in May 2014 and the comparison figures in the profit and loss account have been restated accordingly. Second quarter operating revenue for VPS totalled NOK 119 million (NOK 114 million), representing an increase of 4% or NOK 5 million from the same quarter in Operating revenue for the first six months of 2015 increased by NOK 8 million. In the issuer area, registered securities saw a reduction in the number of limited companies and fixed income issues registered with VPS relative to the second quarter of At the end of the second quarter, 1,056 (1,104) limited companies and 2,332 (2,378) fixed income issues were registered with VPS. Revenue from the issuer area for the second quarter of 2015 was NOK 2 million higher than in the same period in Revenue from the issuer area for the first six months of 2015 increased by NOK 2 million relative to the same period in The market value of VPS-registered mutual funds at the end of the second quarter was NOK 536 billion (NOK 499 billion), representing an increase of 7% from the end of the second quarter of The number of mutual fund transactions totalled 0.9 million in the second quarter of 2015, up 5% from the same period in Revenue from the mutual funds area for the second quarter of 2015 was NOK 2 million higher than in the second quarter of Evolution is included in the VPS Fund Services reporting unit. Evolution reported revenue of NOK 6 million for the second quarter of 2015, up by NOK 1.5 million from the second quarter of Revenue from the mutual funds area for the first six months of 2014 was NOK 4 million higher than in the equivalent period in 2014, with NOK 3.5 million of this increase attributable to Evolution. The number of transactions in the settlement area in the second quarter of 2015 was 5% higher than in the second quarter of Revenue from the settlement area in the second quarter of 2015 was 3% or NOK 1 million lower than in the second quarter of Revenue from the settlement area for the first six months of 2015 was NOK 1 million higher than in the same period last year. In the investor area, the market value of holdings at the end of the second quarter of 2015 was 1% lower than at the end of the second quarter of million VPS accounts were registered at the end of the second quarter of 2015, 1.09 million of which are income-earning for the investor area (the other accounts affect income in the funds area). The total number of income-earning accounts at the end of the second quarter was up 3% compared to the end of the second quarter of Revenue from the investor area for the second quarter of 2015 was 7% or NOK 2 million higher than in the same period in Revenue from the investor area for the first six months of 2015 was NOK 2 million higher than in the same period in Personnel expenses and other operating expenses for the second quarter of 2015 were NOK 7 million higher than in the same period in Personnel expenses and other operating expenses for the first six months of 2015 were NOK 10 million higher than in the same period in Reasons for the increase include increases in salaries and prices, a higher level of activity at Evolution and non-recurring items. Amortisation of excess value decreased as a consequence of the excess value that arose from the merger between Oslo Børs Holding and VPS Holding becoming fully amortised. Number of settlement transactions processed in VPS (1000) Number of VPS accounts and value of holdings in VPS Q213 Q313 Q413 Q114 Q214 Q314 Q414 Q115 Q215 0 Q213 Q313 Q413 Q114 Q214 Q314 Q414 Q115 Q Income-earning accounts (1000) Holdings (NOK bill) 6

7 Oslo Market Solutions Restated Restated Oslo Market Solutions Operating revenues Salary and other operating expenses EBITDA Capitalisation of internal resources Depreciations and write-downs Amortisations Operating profit (EBIT) Oslo Clearing was sold in May 2014 and the comparison figures in the profit and loss account have been restated accordingly. Operating revenue for the second quarter of 2015 was NOK 0.7 million higher than in the same period in Revenue from external customers increased, while revenue from other companies in the group was in line with the same period in Oslo Market Solutions operating revenue fluctuates with the time of the implementation of customer projects and 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. 7

8 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. Oslo Clearing is presented as a discontinued operation. The comparable figures have been restated. All revenue and costs related to Oslo Clearing are combined in the line entry Earnings for the period discontinued operations. A breakdown of these figures is provided on page 11. All other lines related to earnings in the profit and loss account below consequently refer only to continued operations. Restated Restated 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 - continued operations Earnings for the period - discontinued operations 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) - continued operations 1,91 1,56 3,54 3,03 5,86 Diluted earnings per share (NOK) - continued operations 1,91 1,56 3,54 3,03 5,86 Earnings per share (NOK) - discontinued operations 0,00 1,13 0,00 1,21 1,21 Diluted earnings per share (NOK) - discontinued operations 0,00 1,13 0,00 1,21 1,21 Earnings per share (NOK) before amorisations - continued operations 1,92 1,91 3,57 3,73 7,26 EBITDA= Operating revenues - Salary and other personnel expenses - Other operating expenses 8

9 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. The segment information reported has been prepared in accordance with IFRS 8. Oslo Clearing, which ceased to be part of the group on 2 May 2014, is presented as a discontinued operation and no longer constitutes a segment. The comparable figures have been restated. Restated Restated 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 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)

10 Further information related to the presentation of Oslo Clearing as a discontinued operation Earnings from discontinued operations 1st Quarter 2nd Quarter Operating revenues - external Operating revenues - internal Salaries Depreciation Depreciation internal gain on sale - Other operating expenses - external Other operating expenses - internal Operating expenses Operating profit Financial income Financial expenses Tax Gain on sale of shares Earnings for the period Earnings per share 0,08 1,13 1,21 Diluted earnings per share correspond to earnings per share. 10

11 Balance sheet Short-term receivables totalled approximately NOK 112 million at the end of the second quarter. Of this, trade receivables totalled NOK 77 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 615 million. Current liabilities amounted to approximately NOK 313 million, of which advance payments by customers and tax payable accounted for NOK 102 million and NOK 111 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 ASA leaving the group in the second quarter of The balance sheet has not been restated. Fixed assets 30 June 30 June 31 Dec IT systems Customer relations Registrations Goodwill Deferred tax assets Tangible assets Financial fixed assets Current assets Receivables Cash and liquid assets Assets Equity Contributed equity Other equity Non-controlling interests Total equity Liabilities Pension liabilities Deferred tax liabilities Current liabilities Equity and liabilities

12 Cash flow Cash flow is reported in accordance with IAS 7. Oslo Clearing ASA 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 323 million in the second quarter. A dividend totalling NOK 351 million was paid during the second quarter. Cash and cash equivalents held at the end of the second quarter totalled NOK 615 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) -7,51-27,16-3,87-17,37-18,37 Equity Equity amounted to NOK 977 million at the end of the quarter, and the equity ratio was 67%. 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 Equity ratio 67 % 75 % 67 % 75 % 73 % 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 2.9 million shares were traded in the second quarter, with prices from NOK 90 to NOK 99. The share went ex-dividend during the quarter. The last registered trade in the second quarter of 2015 was NOK 91. Oslo Børs VPS Holding ASA 20 largest shareholders at 10 August

14 Key figures Financial Earnings per share (NOK) - continued operations 1,91 1,56 3,54 3,03 5,86 Earnings per share (NOK) - discontinued operations 0,00 1,13 0,00 1,21 1,21 Earnings per share (NOK) before amorisations - continued operations 1,92 1,91 3,57 3,73 7,26 Change in cash per share (NOK) -7,51-27,16-3,87-17,37-18,37 Return on equity 29,6 % 32,4 % 26,5 % 14,7 % 23,3 % Return on total capital 28,4 % 20,0 % 25,2 % 8,3 % 14,5 % Net operating margin 47,6 % 38,6 % 44,1 % 37,6 % 36,2 % Operational OBX index at period's end 568,41 566,95 568,41 566,95 523,68 Change in period 1,3 % 10,4 % 8,5 % 12,6 % 4,0 % 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 We hereby confirm that, to the best of our knowledge, the summarised half-yearly accounts for the period 1 January to 30 June 2015 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, 11 August 2015 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 Telefone: