ASX LIMITED — Annual Report 2011

Aug 17, 2011

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ASX Limited - 2011 Full-Year Results

Disclaimer

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The material contained in this document is a presentation of general information about the ASX Group’s activities current as at the date of this presentation (18 August 2011). It is provided in summary and does not purport to be complete. You should not rely upon it as advice for investment purposes as it does not take into account your investment objectives, financial position or needs. These factors should be considered, with or without professional advice, when deciding if an investment is appropriate.

To the extent permitted by law, no responsibility for any loss arising in any way (including by way of negligence) from anyone acting or refraining from acting as a result of this

Im ortant Notes p

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The financial statistics, including comparables, in this report are based on the ASX Group’s pro-forma income statement which itself is not audited, but is based upon audited accounts.

There have been no material changes to accounting policies during the period.

All references to previous corresponding period (pcp) are for the 12 months to 30 June 2010.

A enda g

• Introduction

• Business Highlights and Initiatives

• Financial Results Summary

• Post-Balance Date Activity

Robert Elstone

Peter Hiom Ramy Aziz Robert Elstone

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• Questions

Introduction

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Robert Elstone Managing Director and CEO

Financial Hi hli hts FY11 g g

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• Underlying net profit after tax (NPAT) of $356.6 million, up 7.2% (statutory NPAT of $352.3 million, up 7.4%)

• Operating revenue excluding interest and dividends of $617.6 million, up 5.0%

• Cash operating expenses of $135.5 million, up 1.0%

• Underlying earnings per share (EPS) of 204.0 cents per share (cps), up 5.7% (statutory EPS of 201.6 cps, up 5.9%)

• Final dividend of 93.0 cps fully franked declared. Full-year

Financial Hi hli hts FY11 g g

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• A comprehensive Annual Report has been released today, including statutory reports. This presentation provides a high level overview of the result

• Strong financial, operational and compliance performance by the ASX Group during a period of mixed economic indicators domestically, and global investor concerns over European public debt contagion and the scale of the US deficit reduction challenge and what that might mean for US growth

• Operating expense containment

• Close to 100% availability of core systems applications

• Capital expenditure of $50 million including $25 million towards the new data centre, $9 million towards ASX Trade and ASX Trade24 platforms, and

Business Highlights and Initiatives

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Peter Hiom Deputy CEO

ASX Business Model Evolution

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• From

• Bundled service offerings (fees models and rebates, functionality)

• Predominantly transactional business model

• History of innovation

• To

• Fee unbundling and different fee models

• Tailored service offering

• Expanded service offering, new opportunities and new business models

• Accelerated platform enhancements, more frequent major upgrades

• Complex change management environment

Listin s and Issuer Services g

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• Progress in expanding service offerings

• New investor relations (IR) services delivered to issuers

• Further refinement of proposals to improve reporting regime for mining, oil and gas, and geothermal companies

• Looking forward

• Further expansion of IR service offering

• Segmentation of the listing and trade execution offering for ex-200 listed companies

• Automation of the application/redemption process for managed funds

• Expanded product offering of non-ASX listed securities

Trade Execution Services

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• Progress in expanding offerings

• ASX Net implemented for ASX Trade24 and to provide access to Chi-X

• Fidessa announced as provider of ASX Best

• Re-structuring of market data offering completed

• Construction of the new data centre facility progressing well and sales activity commenced

• Necessary functional changes to comply with regulatory obligations in a multi-market environment

• ETO contract size changes and improved liquidity

• Looking forward

• Increase in customer acquisition for co-location/connectivity

• Implementation of PureMatch and ASX Best

• Ongoing market micro-structure and market data product development

CCP and Post-Trade Services

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• Developments in CCP and post-trade services

• Chi-X have signed a 5-year agreement with ASX for the provision of the trade acceptance service

• Council of Financial Regulators consults on domestic clearing of OTC interest rate swaps

• Looking forward

• Tailoring of cash equities clearing and settlement services to accommodate different types of users (fee unbundling)

• OTC equity derivative clearing

• Cash market margining

• CME Span implementation

• Expanded settlement services for non-ASX listed securities

Financial Results Summary

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Ramy Aziz Chief Financial Officer

Financial Performance – Income Statement

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	$ Million FY11	$ Million $ Million % Favourable / (Unfavourable) Variance FY10
Operating Revenue Cash Operating Expenses EBITDA Depreciation and Amortisation EBIT Interest and Dividend Income Underlying Profit Before Income Tax Income Tax Expense	617.6 135.5 482.1 23.3 458.8 47.4 506.2 149.6	588.2 29.4 5.0% 134.2 (1.3) (1.0%) 454.0 28.1 6.2% 18.9 (4.4) (23.4%) 435.1 23.7 5.4% 37.4 10.0 26.9% 472.5 33.7 7.1% 139.9 (9.7) (7.0%)
Underlying Net Profit After Tax	356.6	332.6 24.0 7.2%

Financial Performance - EBITDA

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EBITDA (excluding significant items) FY07 to FY11

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540
GROWTH GFC REBOUND
500
482
460 478
454
420
414
400
380
340
300
FY07 FY08 FY09 FY10 FY11
EBITDA
$ Million
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Revenue Hi hli hts FY11 g g

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FY11 Revenue $150.3m $133.9m $172.2m $70.9m $40.4m $33.8m $16.1m $617.6m
Change 3%3% 11% 17% 3% 35% 8% 18% 5%
From FY10
(pcp) Listings and Cash Derivatives Information Technical Austraclear Other Total
Issuer Services Market Services Services
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Revenue - FY10

Revenue - FY11

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Other
Austraclear Revenue
Services 2%
5%
Technical
Services
5%
Listings and
Information Issuer
Services Services
12% 25%
Cash Market
Derivatives
26%
25%
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Other
Austraclear Revenue
Services 3%
5%
Technical
Services
7%
Listings and
Issuer
Information
Services
Services
24%
11%
Cash Market
Derivatives 22%
28%
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Revenue Hi hli hts FY11 g g

Listings and Issuer Services Revenue

Cash Market Revenue

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160
160
140
140
120
120
100
100
80 80
60 60
40 40
20 20
0 0
FY10 FY11
$ Million $ Million
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180
160
140
120
100
80
60
40
20
0
$ Million
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FY10

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FY11
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Derivatives Revenue

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FY10

Post-Trade Registry Services

FY11

Cash Market Settlement (ASX Settlement)

Financial Performance – Expenses

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Expenses	$ Million FY11	$ Million $ Million % Favourable / (Unfavourable) Variance FY10
Staff Occupancy Equipment Administration Variable ASIC Supervision Levy	78.8 13.6 21.3 13.9 4.5 3.4	77.7 (1.1) (1.4%) 13.9 0.3 2.3% 22.2 0.9 3.9% 15.2 1.3 8.3% 5.2 0.7 13.2% - (3.4) -
Total Cash Operating Expenses	135.5	134.2 (1.3) (1.0%)
Depreciation and Amortisation	23.3	18.9 (4.4) (23.4%)

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Pre-Tax Significant Items 6.1 6.4 0.3 4.7%
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Interest and Dividend Income

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• Significant increase in interest income attributable to higher own-cash reserves and higher average shortterm cash rates

	FY11	FY10
	$ Million	$ Million
Interest Income
ASX Group(excluding ASXCC Group)	12.9	5.6
ASXCC Group	7.9	7.2	•
Net Interest Income on
Participant Balances	16.7	16.5
Dividend Income	9.9	8.1
Total	47.4	37.4	•

• Average cash collateral balances during FY11 of $2.4 billion, 10.4% lower than the $2.7 billion in pcp

Average investment spread earned in FY11 was 29 bps over the official cash rate (26 bps pcp)

• Dividend earned from

Dividends Paid to Shareholders

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• Dividend – 90% of underlying NPAT, fully franked

• FY11 dividends – 183.2 cps

• Dividend Reinvestment Plan not activated for FY11 dividend

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250.0
Capital Return
Final Dividend
Interim Dividend
200.0
58.5
150.0
93.9
93.0
84.0
74.5
91.5
100.0
50.0 98.5
90.4 89.1 90.2
72.3
0.0
FY07 FY08 FY09 FY10 FY11
Cents per Share
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Balance Sheet

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	$ Million 30 June 11	$ Million $ Million % Variance Favourable / (Unfavourable) 30 June 10
Cash and Available-For-Sale Financial Assets Goodwill Other Assets	3,318.6 2,262.8 601.1	3,716.8 (398.2) (10.7%) 2,262.8 - - 641.2 (40.1) (6.3%)
Total Assets	6,182.5	6,620.8 (438.3) (6.6%)
Amounts Owing to Participants Borrowings Other Liabilities	2,516.4 250.0 395.0	2,990.2 473.8 15.8% 250.0 - - 459.3 64.3 14.0%
Total Liabilities	3,161.4	3,699.5 538.1 14.5%

Ca ital and Li uidit Position p q y

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ASX Group Equity

ASX Group Cash

Net Tangible Equity v Risk-Based Capital Attribution

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900
800
700
600
500
400
300
200
100
0
FY10 FY11
30 June 10 30 June 11
$ Million
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Net Tangible Equity (NTE) Equity and Sub-Debt provided to CCPs

ASX Own Cash v Cash-Backed Requirements

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900
800
700
600
500
400
300
200
100
0
FY10 FY11
30 June 10 30 June 11
ASX Own Cash Reserves
Cash-Backed Capital provided to Austraclear
Equity and Sub-Debt provided to CCPs
External Borrowing provided to CCPs
$ Million
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Post-Balance Date Activity

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Robert Elstone Managing Director and CEO

Post-Balance Date Activit y

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Post-balance date period eventful at home and abroad

Offshore

• European public debt refinancing pressures intensifying

• US debt ceiling aftermath leading to downward growth revisions for the US economy

• Foreign index movements since 30 June: S&P 500 down 9.7%, FTSE 100 down 9.9%, DAX down 18.7%, Straits Times Index down 7.6%, Nikkei down 7.2% and Hang Seng down 9.8%

Australia

• All Ordinaries Index down 7.4% since 30 June 2011

• Increasing volatility in Australian equities led by lack of investor confidence offshore

• Divergent indicators regarding cash rate trend

• Continued increase in equity index and interest rate derivative activity

Post-Balance Date Activit y

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• Activity levels for 1 July 2011 to 16 August 2011

• Cash markets average daily traded value $5.7 billion (up 20.5% on same period last year)

• ASX 24 derivatives average daily volume 521,298 contracts (up 85.7%)

• ASX derivatives average daily volume 135,309 contracts (up 79.8%)

• 10 companies listed in July 2011 (13 in July 2010)

• Secondary capital of $3.0 billion raised in July 2011 ($2.5 billion in July 2010)

Questions

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Questions

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ASX Limited - 2011 Full-Year Results