PRESENTATION OF WSE GROUP RESULTS

Transcription

1 PRESENTATION OF WSE GROUP RESULTS IN Q2 203 JULY 203

2 Thinking strategically Warsaw CEE Capital Centre WSE strategy Strategy of the Polish Capital Market Priorities and recommendations of EFC -2-

3 WSE Group in Q2 203 Strengthening WSE s international position WSE s share in equities trading in CEE in June was record-high at 65% Implementation of UTP in April 203 and technical readiness to provide High Performance Access service Intensive sales activity abroad WSE Group reorganisation to achieve maximum synergies and strenghen competences Centralisation of WSE Group IT systems and improved IT security Change in the organization of work of WSE Group Changes on Management Boards of WSE Group companies Commodity market WSE InfoEngine OTC platform and new services Obligation to trade in gas on the exchange as a driver of a growing gas market New initiative agri-market Active collection of dividend PLN 43.3 mn in H 203 vs PLN.5 mn in 202 Including: WSE, CEESEG Group, Bulgarian, Romanian and Slovak stock exchanges, source: FESE 2 EBITDA = operating profit + share of profit of associates + depreciation and amortisation Capitalisation WSE Group financial results (PLN mn) Q2 203 change change H 203 YoY YoY Revenue % % Operating expenses % % Operating profit % % Net profit % % EBITDA % % WSE on the stock exchange 3 Average daily turnover in Q2 203 PLN.65 bn PLN 2.5 mn Free float 64.7% Turnover ratio % Dividend yield 2.0% Dividend paid from 202 profit 3 As at Annualised turnover in H 203 to capitalisation as at PLN 0.87/share -3-

4 Trading in Shares on Main Market EOB (PLN bn) block trades (PLN bn) Value of trading in shares 0 Q Q2 Q3 Q4 Q Q2 Q3 Q4 Q Q2 Q3 Q4 Q Q2 Q3 Q4 Q Q2 Q3 Q4 Q Q2 Q3 Q4 Q Q2 Q3 Q4 Q Q2 Q3 Q4 Q Q2 Q3 Q4 Q Q2 Q3 Q4 Q Q Free float increased by 4 pp (from 43% to 47%) year on year; the turnover ratio was 4.25% in Q2, i.e., 4. pp higher than in the year 202. Average transaction fee for session trades on the Main Market was 2.37 b.p. in H 203; the decrease compared to 202 (2.54 b.p.) was mainly driven by a reduction of fees [PLN mn] Q2 203 Q 203 change QoQ Q2 202 change YoY H 203 H 202 change YoY Total trades % % % EOB % % % Block trades % % % -4-

5 Share of investor in WSE trading Equities, Main Market (%) Equities, NewConnect (%) Futures, (%) +6.0 pp +5.0 pp +6.0 pp Change of the share of foreign investors Change of the share of institutional investors Change of the share of foreign investors H 3 Foreign investors H 3 Polish institutional investors H 3 Polish individual investors Diversified base of market participants, a significant share of individual investors Source: WSE survey, estimates -5-

6 WSE in Europe Growth rate of the value of trading on European exchanges, Q2 203 v. Q % 58% Average for all exchanges:.7% 42% 33% 25% 2% 7% 6% 2% % % -% -2% -9% -3% -6% -6% -6% -26% -3% -38% -94% WSE was one of the most dynamically growing exchanges in Europe by the value of trading: the increase in equities trading on the WSE by 33% YoY in Q2 203 was well above the average for European exchanges (.7%) According to the IPO Watch Europe report, WSE ranked 2nd in Europe by the number of IPOs in H 203 (3 IPOs representing 26% of all IPOs in Europe) and 7th by the value of IPOs (EUR 325 mn) Source: WFE, FESE, WSE; session trades in local currency 2 Since , BATS Chi-X Europe operates in Europe as a licensed exchange -6-

7 Miliardy WSE s Position in CEE WSE s share in equities trading in CEE WSE s share in capitalisation in CEE % Value of equities trading in the region (EUR bn) WSE share CEESEG share 65% WSE 70,0% 60,0% % Capitalisation of CEE exchanges (EUR bn) WSE share CEESEG share 70% WSE 47% 9 35% 33.5% 50,0% 40,0% % 6 30,0% 33% 3 20,0% 0,0% ,0% % Source: Thomson Reuters Source: FESE WSE strengthens its international position: June 203 WSE s historically highest share in trading in shares in CEE 65% (Q2 60%) WSE s 47 percent share in CEE by capitalisation of domestic companies 2 Including: WSE, CEESEG Group, Bulgarian and Romanian stock exchanges 2 Domestic capitalisation according to FESE s definition, i.e., domestic and foreign single-listed companies -7-

8 Pension Funds on the Stock Market Pension fund s shares in EOB in WSE 6,7% 3,6% 2,0% 8,2 8,0 8,0 8,8% 9,8,6 8,9 27,6 2,5 20,3 28,0 30,0 6,4% 5,8% 6,0% 6,7% 6,% 6,8% 6,0% 2,7 5,8% 5,2 6,8% 8% 6% 4% 2% 0% 8% 6% 4% 2% 0% Pension funds investment portfolio [PLN bn] Treasuries Bank deposits and securities Non-Treasury debt Stock Other investments 0.5%.4% 38.5% 5.2% 44.4% H Pension funds trade on WSE (PLN bn) Share in EOB trade on WSE 50% 40% 30% 20% 0% Since 2005, pension funds share in session trade on the WSE is around 6%. Pension funds growing share in the capitalisation of domestic companies and free float (9.4% and 4.0%, respectively, at the end of June) Pension fund assets on the stock market [PLN bn] % Pension fund's trading on WSE (PLN bn) Share of domestic stocks in total pension fund's assets (%) Cap on share of stocks in pension fund's portfolios (%) Source: PFSA -8-

9 Trading in Derivatives on WSE NOI 2 ( 000) Volume of trading in derivatives (by quarter, mn instruments) ,99 3,25 4,66 3,66 2,76 3,9 2,74 2,65 3,7 3,37 Volume of trading in options increased by 9.7% v. Q 203 and by 43.8% v. Q2 202 Volume of trading in WIG20 contracts increased by 6.2% v. Q 203 and decreased by 6.4% v. Q % 85% 88% 90% 87% 83% 77% 72% 66% 66% Q Q2 Q3 Q4 Q Q2 Q3 Q4 Q Q Derivatives WIG20 contracts WIG20 contracts as a % of total volume In H2 203: Introduction of stock options Introduction of T-bond and WIBOR derivatives Since May 202, the volume of trading in currency futures is calculated on the basis of a trading unit of,000 (previously 0,000). Consequently, the total volume of trading in derivatives in Q2 202 and subsequent quarters is not fully comparable to earlier periods 2 Number of open interest in aggregate in futures, options and index participation units -9-

10 Volume of Trading in Contracts in Europe Volume of trading in futures contracts for indices in Europe (H 203, mn contracts) STOXX Europe 600 Banks IBEX 35 Mini FTSE MIB Mini OBX 0,7,0,4,8 WSE remained Europe s #5 by volume of trading in index futures WIG20 futures rank #9 by the volume of trading among all index futures in Europe IBEX 35 2,7 FTSE MIB WIG20 SMI 3,7 4,3 4, Volume of trading in index futures (H 203, mn contracts) 77.3 EURO STOXX Banks 4, ,5 AEX 4,9 40 OMXS30 6, ,4 DAX 6, 0 5,0 4,3 3,7,8,0 0,2 0,2 0, FTSE 00 7,8 0 CAC 40 20,3 EURO STOXX

11 Non-Treasury Bond Market Catalyst Growth of Poland s non-treasury debt market (value of issue at the end of a period, PLN bn) Catalyst (non-treasury debt) H ,6 34,2 46,3% 26,4 3,4 44,5% 22,2 24,2 4,0% 4,8 7,6 24, 32,2% 36,8 0,9 43,6 44,4 4,4 6, 5,6 60,0 50,0 40,0 30,0 20,0 0,0 0,0 37 0,9 5 9,9 value of listed issues (PLN bn) number of series 73 2,6 97 2, ,3 30, , ,0 40,9 45, ,8 52, ,3 56,4 Q Q2 Q3 Q4 Q Q2 Q3 Q4 Q Q2 Q3 Q4 Q Q Commercial papers Bank bonds Corporate bonds Municipal bonds % share of non- Treasury debt listed on Catalyst Steady growth of the value of issues of non-treasury bonds listed on Catalyst Value of issues listed on Catalyst increased in the last 3 years by 42% per year The number of issues on non-treasury bonds increased by 95% per year 46.3% of the value of non-treasury bonds issued in Poland listed on Catalyst Source: Fitch Polska, WSE --

12 Commodity Market Volume of trade in electricity (TWh) 59,6 8,5 28,6 29,9 3,9 2,3 5,7 5,4 4,6 5,6 6,0 4,9 Total volume of spot and forward trade in electricity was 36.8 TWh in Q2 (increase of 2.3% QoQ and 37.7% YoY) Q 202 Q2 202 Q3 202 Q4 202 Q 203 Q2 203 forward trade spot tade Volume of trade in property rights Property Rights Market (TWh) 8,0 6,0,6 6,6 23,7 Q 202 Q2 202 Q3 202 Q4 202 Q 203 Q ,0 Volume of trading in property rights and volume of issued and cancelled property rights decreased: due to expiration of support for production of electricity from high-efficiency cogeneration (yellow and red certificates of origin) at the end of Q 203 Register of Certificates of Origin issued and redeemed property rights (TWh) 9,9 2,8,9, 0,0 4,9 7,3 6,5 3,8 34,2 4,9 0, compared to record-high volume in Q 203 Legislative efforts underway to re-instate support for electricity Q 202 Q2 202 Q3 202 Q4 202 Q 203 Q2 203 issued certificates redeemed certificates Figures until the end of Q 203 include trade in electricity on WSE Energy Market poee. Trade in electricity is centralised within PolPX as of Q

13 Gas Market Outlook Gas market: Total volume of all trade on the gas market in H 203: GWh Obligation to trade in gas on the exchange as a driver of a growing gas market Consumption of natural gas in Poland in 202: 5.8 bn m 3, i.e., ca TWh Small energy legislation tri-pack opens the door for entities other than commodity brokers to participate directly in the gas market Upward path for the obligation to trade in gas on the exchange Volume of trading on the PolPX gas market (GWh) 30% 40% 55% 59,5 32,3 9,6 53, Q 203 Q2 203 Day Ahead Market for Gas Commodity Forward Instruments Market for Gas under the law passed by the Sejm on 26 July

14 WSE Group Plans for Commodity Market Commodity financial derivatives market Efforts to open a market of financial derivatives (i.e., without physical delivery) with commodities as the underlying instrument underlying: power and gas scheduled opening date: H 204 (subject to PolPX obtaining a licence to operate a regulated market) Changes to the core business of WSE InfoEngine SA Leveraging WSE Group s available infrastructure and resources to supplement and expand the range of Group s services: Operating a platform of trading in commodities with physical delivery (OTC) for coal, power, biomass and LPG Signed contract for implementation of the Trayport Exchange Trading System (ETS) Services for end users of energy and energy companies: trade balancing and trade operator, IT services Experienced managers: long-time CEO of PolPX Grzegorz Onichimowski appointed CEO of WSE InfoEngine Opening an agri market -4-

15 WSE Group Financials -5-

16 Revenue and EBITDA in the Uptrend Revenue and EBITDA increased by 7.4% and.5% (YoY) respectively in H 203 Stability on the financial market, seasonal decrease in revenue on the commodity market in Q2 Acquisition of PolPX added significant seasonality to WSE Group results Operating profit in Q2 203: PLN 20.7 mn (-34.% YoY and -52.0% QoQ); net profit: PLN 7.0 mn (-36.5% YoY and -59.6% QoQ); Revenue [PLN mn] EBITDA [PLN mn] and EBITDA margin [%] 84,7 99,5 225,6 268,8 273,8 34,0 43,9 +7.4% v. H 2 9,8 50% 53% 54% 6% 55% 6% 58% 64,7 5, 22,6 05, 8,6 82,8 +.5% v. H 2 Q2-7.9% v. Q2 2 Q2-5.9% v. Q2 2 Q Q H 202 H H 202 H 203 EBITDA = EBIT + depreciation and amortisation + share of profit of associates -6-

17 Revenue from the Financial Market [PLN 000] Q2 203 Q2 202 YoY H 203 H 202 YoY Financial market % % Trading, including: % % Shares % % Derivatives % % Bonds % % Other % % Listing % % Information services % % Structure of revenue from the financial market [PLN mn] Revenue on the financial market decreased by.6% QoQ and increased by 0.7% YoY in Q2 203 The revenue structure remained largely unchanged in the last 6 quarters The main driver of the revenue on the financial market is trading revenue (it depends on equities and derivatives market trends) ,4 5,3 42, ,3 8,8 8,9 8,6 8,6 5,5 5,2 5,5 5,7 5,6 36,5 35,8 35,5 38,2 37,5 Q 2 Q2 2 Q3 2 Q4 2 Q 3 Q2 3 Fees paid by exchange members and other cash market instruments Trading Listing Information services -7-

18 Revenue from the Commodity Market [PLN 000] Q2 203 Q2 202 YoY H 203 H 202 YoY Commodity market % % Trading: % % Electricity % % Natural gas Property rights % % Other % % Register of Certificates of Origin % % Clearing % % Decrease in revenue from the commodity market in Q2 203 due to seasonality and expiration of support for electricity from high-efficiency cogeneration Significant part of certificates of origin were cancelled late in 202; as a result, some revenue from the Register of Certificates of Origin was delayed from Q to Q2 202 Revenue of PolPX Group increased by 9,2% YoY in H 203 Structure of revenue on the commodity market [PLN mn] ,7 6, ,7,3 3, 4,0 7, ,0 4,4 3,8 3,2 2,0,4,9 2, 7, 7,2 6,5 2,7 Q 2 Q2 2 Q3 2 Q4 2 Q 3 Q2 3 Consolidation of PolPX results with WSE Group results started in March 202 Trading Register of Certificates of Origin Clearing Revenue of PolPX Group in January and February 202 not consolidated with WSE Group -8-

19 Structure of WSE Group Revenue 7% Acquisition of PolPX in February 202 ensured significant diversification of revenue sources Commodity market: 27.2% of revenue 6% 3% 6% 5% Clearing Register of Certificates of Origin Trading - other In the last 4 quarters (Q3 202 Q2 203), revenue from trading in equities represented 36.3% of WSE Group revenue; revenue in the period was PLN mn 2% 8% 5% Trading property rights Trading electricity Information Services In , with average annual revenue at PLN mn, revenue from trading in equities represented 52.3% Financial market: 7.9% of revenue 2% 8% Listing Trading bonds Other fees paid by market participants 36% Trading derivatives Trading equities Other income % Q Q2 203 (2 months) -9-

20 Increase in Operating Expenses Operating expenses (PLN mn) Cost/Income ratio ,9,2 0,8,0,6 7,9 5, 6,3 3,6 4,9 7,2 4,0 4,3 4,2 7,9 4, 3,7 7,5 9,9 5,4 9,2 6,0 8,2 total expenses actually incurred (including UTP expenditure) total expenses on accounting basis (as per financial statements) Capitalised UTP expenditure Salaries and other employee cost Amortisation and depreciation Other cost PLN mn 50 50,7% 20 38,4% 36,% 4,4% 42,4% 42,% 42,% H H2 H H2 H H2 H Income 3 Cost Cost/income ratio 60% 50% 40% 30% 20% 0% 0% Q 2 2 Q2 2 Q3 2 Q4 2 Q 3 Q2 3 Amortisation of UTP started in Q2 203 (ca. PLN.4 mn per month) Amortisation of Warset ended in Q4 202, hence lower amortisation in Q 203 Additional employee cost in Q 203 (PLN.6 mn no-compete; PLN 0.5 mn termination benefits and equivalent) Additional employee cost in Q2 203 (PLN.4 mn increase in annual bonus provisions; UTP expenditure no longer capitalised in Q 203 employee cost was a large part) Capitalisation of UTP expenditure was not recognised under operating epxenses but shown as the initial value of intangible assets, amortised as of April WSE Group consolidates PolPX Group results as of March Cost net of amortisation and fees paid by WSE to PFSA -20-

21 Profitability Measures Return on equity (ROE) Operating profit margin 23.0% 24.9% 2.4% 9.7% 9.8% 8.9% 55.8% 44.7% 47.7% 36.3% 54.2% 32.0% Q/2 Q2/2 Q3/2 Q4/2 Q/3 Q2/3 Q/2 Q2/2 Q3/2 Q4/2 Q/3 Q2/2 EBITDA margin 2 EPS [PLN] 69.% 53.4% 57.0% 43.2% 64.7% 48.7% Q/2 Q2/2 Q3/2 Q4/2 Q/3 Q2/3 Q/2 Q2/2 Q3/2 Q4/2 Q/3 Q2/3 Net profit for the last 2 months / average equity at the beginning and at the end of the last 2 months 2 EBITDA = EBIT + share of profit of associates + depreciation and amortisation -2-

22 Dividends Dividends received in H 203: PolPX: PLN 33.9 mn BondSpot: PLN 5. mn KDPW: PLN 3.7 mn CG: PLN 0.5 mn Dividends received in H 202: KDPW: PLN 7. mn BondSpot: PLN 4.4 mn Dividend for 202 at PLN 32.7 mn (PLN 0.78 per share) paid in July 203 Dividends from subsidiaries improves WSE separate net profit which is the basis for dividend payout at 30-50% according to the dividend policy Dividends are eliminated in the consolidation process (positive impact onto standalone profit) WSE standalone net profit and dividend payout ratio ,0 2, Standalone net profit (PLN mn) Dividend payout ratio 20% 00% % 65,6 50% 50% 46,9 69,9 80% 60% 40% 20 20% H 202 H 203 0% -22-

23 WSE Group Balance Bilans Sheet Grupy GPW PLN Non-current assets, including: Plant and property Intangible assets Investment in associates Current assets, including: Trade and other receivables Available-for-sale financial assets Cash and cash equivalents Total assets Equity Non-current liabilities, including: Liabilities under bond issue Current liabilities, including: Trade payables Corporate income tax liabilities Other liabilities and provisions Employee benefits payable Total equity and liabilities Intangible assets increased as a result of UTP implementation Cash includes assets of the WCCH settlement guarantee system (restricted cash) at PLN 53.7 mn; reflected in other liabilities. Equity decreased in Q2, reflecting the planned WSE dividend payout (moved from equity to dividend payable) WSE Group s non-current liabilities mainly include WSE liabilities under bond issue -23-

24 Events / Contact WSE IR Events 30 October 203, Wednesday Q3 203 results 3 December 203, Tuesday Interest payment on WSE bonds for the 4th interest period WSE Investor Relations tel ir@gpw.pl Warsaw Stock Exchange ul. Książęca 4, Warsaw, Poland tel gpw@gpw.pl Disclaimer This presentation has been prepared by Giełda Papierów Wartościowych w Warszawie S.A. ( Warsaw Stock Exchange, WSE or Company ) for its shareholders, analysts, and other contractors. This presentation has been prepared solely for information and is not an offer to buy or sell or a solicitation of an offer to buy or sell any securities or instruments. This presentation is not an investment recommendation or an offer to provide any services. All efforts have been made to present the data in this presentation; however, some data are derived from external sources and have not been independently verified. No warranty or representation can be given that information in this presentation is exhaustive or true. The WSE has no liability for any decisions made on the basis of any information or opinion in this presentation. The WSE informs that in order to obtain information about the Company reference should be made to periodic and current reports published in compliance with applicable provisions of Polish legislation. -24-