nzx annual meeting 2015 - amazon s3 · 2017-12-18 · title: nzx asm presentataion may 2015_final...

NZX Annual Meeting 2015

Inform. Exchange. Grow Presentation to Annual Shareholders Meeting

21 May 2015

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

3 © Copyright NZX Ltd. 2015

Business Overview - Performance 2014

© Copyright NZX Ltd. 2015 4

Business 2014 ($M)

2013 ($M)

Change (%)

2010-2014 CAGR (%)

% of 2014 Revenues

Capital markets

•  Capital raising •  Trading and

clearing 14.4 14.7 (3.6%) 15.8% 21.9%

•  Listing fees •  Participant

services •  Securities data

22.8 20.2 12.6% 4.6% 35.0%

Soft commodities

•  Dairy futures •  Grain (Clear) 1.5 1.5 (3.2%) 15.9% 2.3%

Agricultural information

•  Publications •  Agri data (NZ

and Aus) 12.2 12.0 2.1% 2.4% 18.7%

Funds Management

•  Smartshares 2.7 2.5 10.5% 4.5% 4.2%

Market Operations

•  Energy •  Fonterra 11.6 11.9 (2.0%) 7.2% 17.9%

Our Markets Overview


We are a markets business

•  At our core, NZX is a markets business. We build and operate markets that are a critical part of the economies in which we operate

• Markets are more than exchanges – they are networks that include the

underlying infrastructure, the products that trade, the intermediaries and investors that trade them, and the data and information that drives trading activity

• Our current focus is on building and operating capital, agricultural commodity and energy markets in New Zealand and Australia


Our markets are different

• Our chosen markets are different - They all have high growth potential - They are and will remain relatively small by global standards - They are underdeveloped

• We have tremendous opportunities to grow the business but … - We need to do things differently from other exchanges - We need to operate and invest in parts of the market that are

underdeveloped, including industry utilities - We need to invest in long-term growth where the opportunities are

most attractive


We must be different

Growth Opportunities


Capital Markets


The Twenty Year Journey

0 100 200 300 400 500 600 700 800 900

1,000 1,100 1,200

0 2 4 6 8 10 12 14 16 18 20

Index

Years

Au Super Assets Au Market Capitalisation NZ KiwiSaver & Super Assets NZ Market Capitalisation

18% 8% 17% -2% Market Cap CAGR

Source: NZX Data, WFE, AVA, RBA

Capital markets


The beginning of a different market environment

$0.0B

$5.0B

$10.0B

$15.0B

$20.0B

$25.0B

$30.0B

2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014

Source: NZX Data

$0.0B

$1.0B

$2.0B

$3.0B

$4.0B

$5.0B

$6.0B

$7.0B

$8.0B

2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014

Secondary Capital Raised New Capital Listed

2014 revenue $2.8m 2014 revenue $2.2m

Equity

Debt

6 9 3 6 7 1 1 10 2 1 2 IPOs

Equity

Debt

16


-30%

-20%

-10%

0%

10%

20%

30%

40%

50%

Market Cap Nbr of Trades Trade Value

11 12 13 14 Q1'15

Capital Markets Capitalisation drives trading and clearing revenues

YoY Growth

13% 21% 9% CAGR 2010-14

Source: NZX Data


Capturing the opportunities Capital markets

•  IPO pipeline •  Futures, options •  ETFs

Products •  NXT

•  KiwiSaver registry Infrastructure •  Funds infrastructure •  NZClear

•  NZX.com Retail •  Advice

•  Relationships •  Regulation Franchise •  Advocacy

Funds management

•  The SuperLife acquisition provides the platform to accelerate the growth of Smartshares ETFs in the rapidly growing NZ funds management sector

•  Globally, exchange traded funds (and passive managed funds more generally) have grown faster than other segments of the fund management market

•  The development of our ETF business is consistent with NZX’s strategy of investing in the growth of the breadth and depth of the capital markets


SuperLife acquisition

Funds Management

0

20

40

60

80

100

120

0

200

400

600

800

1,000

1,200

1,400

1,600

1,800

Mar-06 Mar-07 Mar-08 Mar-09 Mar-10 Mar-11 Mar-12 Mar-13 Mar-14

ASX Listed ETF’s (#)

FuM (Au Sources) ETF Market Capitalisation # ETF's


ASX ETF Growth

FuM (Index)

35%

CAGR 2010-14

7%

Source: ASX, ABD, RBA

All FuM

ETF FuM


0%

20%

40%

60%

80%

100%

120%

140%

YE Mar 09 YE Mar 10 YE Mar 11 YE Mar 12 YE Mar 13 YE Mar 14

Net

Fun

ds F

low

/ To

tal F

unds

Und

er

Man

agem

ent

SLSS SLKS Kiwisaver TOTAL

Funds Management

Note: Total FuM each year calculated as average of opening and closing FuM balance Source: FundSource, SuperLife

Net Funds Flow Relative to Funds Under Management

17%

% Growth 2014

3% SLKS

SLSS


Funds Management Capturing the opportunities

•  10 Funds ETFs •  Target 20+

•  Low-cost •  30+ investment

options KiwiSaver •  Merge

•  Reinvigorate

•  $856m current FuM •  140+ employers

Group Superannuation

•  Two schemes won YTD

Agricultural informational and commodities


Agricultural production growth

Source: NZX Data

0

50

100

150

200

250

300

1992/93 1997/98 2002/03 2007/08 2012/13

NZ Dairy and Au Wheat Production Index

Dairy (NZ) KgMS Wheat (Au)1,000 MT 6%

CAGR 2010-14

2% Grain

Dairy


-30%

-20%

-10%

0%

10%

20%

30%

40%

50%

01 02 03 04 05 06 07 08 09 10 11 12 13 14 15

NZ Dairy and CBOT Wheat Price Volatility (% monthly change)

Dairy Price Index CBOT Spot Wheat


Price volatility

Source: NZX Data

(21)% – 27%

Last 5 Years Range Dairy

(23)% – 20% Wheat


Agricultural informational and commodities Comparison of ASX Wheat and NZX Dairy contracts

0%

2%

4%

6%

8%

10%

12%

14%

1 2 3 4 5 6 7 8 9 10

Futures / Physical (%)

ASX NSW Wheat GDT Products

0

200

400

600

800

1000

1200

1400

1 2 3 4 5 6 7 8 9 10

Trade Volume (Index)

ASX NSW Wheat ASX WA Wheat NZX WMP Futures NZX Dairy Derivatives

Source: NZX Data, ASX

Years since launch Years since launch

-

200

400

600

800

1,000

40 42 44 46 48 50 52 2 4 6 8 10 12 14 16 18 20 22 24 26 28 30 32 34 36 38

Thou

sand

s

Volume by Harvest

2008/09 2009/10 2010/11 2011/12 2012/13 2013/14 2014/15


Clear trade volumes Agricultural informational and commodities

Source: NZX Data

Weeks

$0

$100

$200

$300

$400

$500

$600

$700

$800

$900

$1,000

0

2,000

4,000

6,000

8,000

10,000

12,000

14,000

16,000

18,000

Mar

-11

Aug

-11

Jan-

12

Jun-

12

Nov

-12

Apr

-13

Sep

-13

Feb-

14

Jul-1

4

Dec

-14

Magazine Subscriptions (LHS)

Data Revenues (RHS)


Content

0

100

200

300

400

500

600

Mar

-11

Jul-1

1

Nov

-11

Mar

-12

Jul-1

2

Nov

-12

Mar

-13

Jul-1

3

Nov

-13

Mar

-14

Jul-1

4

Nov

-14

Mar

-15

Ad Pages Page Views ('000's)


Source: NZX Data

Subs (#) (#)


Agricultural informational and commodities Capturing the opportunities

•  CFTC •  Butter contract Dairy •  Milk exposure

•  Clearers

•  Entry in WA, SA •  Forwards Grain •  Operating model

•  Dairy tools •  iFarm Data •  Shift to corporate

•  Academy •  AgriHQ Busienss Information •  Print to online

•  Monetisation

Investment made


People •  Highly capable and stable

senior management team

•  Reduced attrition, market competitive compensation

•  Growth in numbers in Markets, Market Supervision and Surveillance

Infrastructure •  Systems (trading and

clearing)

•  Presence: Auckland office

•  Compliance

Business •  Agri data and Clear

•  Electricity Authority tender •  NZClear


Market •  Advisor regulation

•  Industry economics

•  Competitive landscape

Focus areas for 2015

Portfolio

Exchange


“NZX builds and operates capital, risk and commodity markets and the infrastructure required to support them. We provide high quality

information, data and tools to support business decision making. We aim to make a meaningful difference to wealth creation for our shareholders and

the individuals, businesses and economies in which we operate.”

Inform. .Grow

NZX Annual Meeting 2015

nzx annual meeting 2015 - amazon s3 · 2017-12-18 · title: nzx asm presentataion may 2015_final...

Documents