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NZX Half Year Results 15 August
2017
Results Highlights
Record 1H EBITDA of $14.5m
34.4%
Year to Date TSR 14.5%
Derivatives lots traded 155k
147%147%
Revenue up 1.1% excluding
impact of Agri disposals
Expenses down 18.7%
Funds Under Management
$2.4b
147%20.8%
0.90
1.00
1.10
1.20
1.30
Results Overview
$000 HY2017 HY2016 Change
Total revenue 36,562 37,925 (3.6%)
Operating expenses (22,077) (27,149) (18.7%)
EBITDA 14,485 10,776 34.4%
Net profit after tax – reported 7,954 3,577 122.4%
Net profit after tax – excluding impairment/earnout
adjustment7,954 4,018 98.0%
Earnings per share (diluted) 2.9 1.3 123.1%
Record Half Year EBITDA
-
2,000
4,000
6,000
8,000
10,000
12,000
14,000
16,000
2008 2009 2010 2011 2012 2013 2014 2015 2016 2017
H1 EBITDA
$0
00
EBITDA Waterfall$
00
0
9,000
10,000
11,000
12,000
13,000
14,000
15,000
16,000
H1 2016 EBITDA Cessation of Raleccosts
Completion ofFMCA project
Restructuring of Agribusiness
Growth in fundsmgmt earnings
Growth inderivatives volumes
Lower cash marketsrevenues
Growth in WealthTech costs
Transitionary ITcosts
H1 2017 EBITDA
Divisional Results
-2,500
-2,000
-1,500
-1,000
-500
-
500
1,000
1,500
2,000
2,500
Revenue change Expense change EBITDA change
Markets Funds Services Agri Corporate
$000
Markets
Markets Results Summary
$000 HY2017 HY2016 Change
Securities information 5,183 5,063 2.4%
Listing and other issuer fees 6,842 7,148 (4.3%)
Participant services 1,886 1,762 7.0%
Securities trading 2,728 2,971 (8.2%)
Securities clearing 2,751 2,829 (2.8%)
Dairy derivatives 562 221 154.3%
Market operations 5,159 5,302 (2.7%)
Total markets revenue 25,111 25,296 (0.7%)
Markets expenses (5,653) (6,150) (8.1%)
Segment result 19,457 19,146 1.6%
Securities Data
Breakdown into audit revenue etc
Chart of terminal numbers
6,200
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7,000
7,200
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Terminal numbers
$000 HY2017 HY2016 Change
Data royalties 3,162 3,119 1.4%
Audit revenue 13 238 (94.5%)
Other data 2,008 1,706 17.7%
Total 5,183 5,063 2.4%
Listing Fees
3,496 3,8344,232 4,486
4,995
1,201 1,293 199
960452959
1,075
1,047
1,223 1,101
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1,000
2,000
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HY2013 HY2014 HY2015 HY2016 HY2017
Annual listing fees Initial listing fees Secondary issuance fees
Double digit growth in recurring annual listing fees, cyclical reduction in capital raising
Trading and Clearing
Number of trades unchanged from HY2016 Value traded down 12.7%
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HY2012 HY2013 HY2014 HY2015 HY2016 HY2017
Number of trades (000s)
0
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20
25
HY2012 HY2013 HY2014 HY2015 HY2016 HY2017
Value traded ($billion)
Stable volumes, lower values of trades
Dairy Derivatives
Volume traded up 154% on H1 2016
Number of active traders in the
market has increased by 121.7%
over the year to 30 June 2017
-
5,000
10,000
15,000
20,000
25,000
30,000
35,000
40,000
Monthly lots traded
2014 2015 2016 2017
Rapid growth resumed with increased volatility and greater market participation
Market Operations Revenue
4,721 4,538 4,693 4,451 4,675
1,640
879 735 851 484
-
1,000
2,000
3,000
4,000
5,000
6,000
7,000
HY2013 HY2014 HY2015 HY2016 HY2017
Contractual revenue Development revenue
Development focus shifts to systems upgrade, which is part of contracted revenue
Funds Services
Funds Services Results Summary
$000 HY2017 HY2016 Change
SuperLife revenue 3,902 3,426 13.9%
Smartshares revenue 2,688 2,393 12.3%
Funds management income 6,590 5,819 13.2%
Wealth platform fees 721 720 0.1%
Total funds services revenue 7,311 6,539 11.8%
Funds services expenses (5,876) (6,181) (4.9%)
Segment result 1,435 358 300.8%
Comprising:
Funds management EBITDA 2,236 891 151.0%
Wealth Technologies EBITDA (801) (533) 50.3%
1,435 358 300.8%
KiwiSaver and Superannuation
Total SuperLife FUM has grown
47.1% in the 2.5 years since
acquisition
KiwiSaver FUM has grown 75.3%
Member numbers have increased
17.1%
-
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1,000
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1,400
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2,000
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SuperLife FUM growth since acquisition
KiwiSaver Superannuation
Continuation of strong growth in SuperLife business since acquisition
Smartshares ETFs
External FUM has grown 22.6% in
last 12 months
Number of direct applications up
100% on prior year
Number of unitholders up 36% year
on year
300
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$m
Smartshares external FUM
Growing strongly on back of retail investment and increasing advisor investment
NZX Wealth Technologies
Transition of foundation client onto Wealth Technologies platform is scheduled for early Q4 2017
This is one quarter later than originally planned, reflecting complexity of transition process and
aligning third part activities
Second client implementation now likely to be early 2018, but with a view to progressing to a
much more comprehensive utilisation of the system than previously indicated
Good pipeline of potential opportunities following on from these implementations
Longer transition timelines, but more substantial platform utilisation anticipated
Agri
Agri Results Summary
$000 HY2017 HY2016 Change
Farmers Weekly 2,358 2,255 4.6%
Magazines 76 1,083 (93.0%)
NZ agri data 764 767 (0.4%)
Australian agri data 942 1,212 (22.3%)
Agri information revenue 4,140 5,321 (22.2%)
Commodity trading revenue - 769 (100.0%)
Total Agri revenue 4,140 6,090 (32.0%)
Agri expenses (3,640) (5,799) (37.2%)
Segment result 501 291 72.2%
Agri Information Revenues
Strong rebound in Q2 Farmers
Weekly advertising revenues
Agri data decline largely in
Australian operations –
combination of credits (offset by
reduction in doubtful debts
provision) and subscriber churn
Improving sector confidence driving increased advertising activity, data impacted by subs churn
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200
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600
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1,000
1,200
1,400
1,600
1,800
-25.0%
-20.0%
-15.0%
-10.0%
-5.0%
0.0%
5.0%
10.0%
15.0%
20.0%
25.0%
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2
2012 2013 2014 2015 2016 2017
Farmers Weekly revenue change (LHS) GDT index (rhs)
Expenses
Group Expenses Summary
$000 HY2017 HY2016 Change Main driver of change
Gross payroll costs 14,178 15,279 (7.2%) Sale of Clear Grain & magazines businesses
Capitailsed labour (1,435) (1,395) 2.9%
Net personnel costs 12,743 13,884 (8.2%)
IT costs 3,852 3,615 6.6% Transitionary IT costs
Professional fees 721 3,984 (81.9%) Cessation of Ralec fees
Marketing, print and
distribution1,181 1,605 (26.4%) Sale of magazines
Funds expenditure 1,573 1,681 (6.4%) Post-FMCA transition efficiencies
Other expenses 2,007 2,380 (15.7%) Lower doubtful debts and other cost savings
Total operating
expenses22,077 27,149 (18.7%)
Capex
Capex Activity
BaNCS (Clearing House)
upgrade successfully went live
in June, completing a two and
a half year project
Significant development activity
in NZXWT is ongoing as new
client deployments continue
Energy systems upgrade
scheduled to continue through
until 2H 20180
1
2
3
4
5
6
7
8
2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 H1 2017
$M
PP&E Other software Trading system Clearing House SuperLife NZXWT
Large multi-year projects drive capex spend, Clearing House upgrade completed in June 2017
Full Year 2017 Outlook
2017 Full Year Outlook
In February 2017, NZX advised that it expected EBITDA for the full year ending 31 December
2017 to be within the range of $27.0 million to $30.0 million, subject to market outcomes and no
material adverse events or accounting adjustments
The Board remains comfortable with this guidance range
This guidance assumes no material adverse events, significant one-off expenses or major
accounting adjustments
Interim Dividend
Details of Interim Dividend
A fully imputed interim dividend of 3 cents per share has been declared, unchanged from H1 2016
The dividend will be payable on 15 September 2017 to all shareholders on the register at 1
September 2017
30 June2017
For further information please contact:
InvestorsBevan MillerChief Financial OfficerM: 021 276 7359T: 04 498 2271E: [email protected]
MediaHannah LynchHead of CommunicationsT: 09 308 3710M: 021 252 8990E: [email protected]
