Tel Aviv Stock Exchange Ltd. — Investor Presentation 2021

May 24, 2021

Tel-Aviv Stock Exchange (TASE) Investors Presentation

First quarter 2021

1

IMPORTANT: You must read the following before continuing. The following applies to the presentation with respect to The Tel-Aviv Stock Exchange Limited and its subsidiaries and affiliates (collectively, "TASE"). In accessing the presentation, you agree to be bound by the following terms and conditions.

The presentation does not constitute or form part of, and should not be construed as an offer or the solicitation of an offer to subscribe for or purchase the securities of TASE, and nothing contained therein shall form the basis of or be relied on in connection with any contract or commitment whatsoever, nor does it constitute a recommendation regarding the securities. Any investment decision in respect of the securities should be made solely on the basis of the information to be contained in the public reports of TASE.

The information in the presentation is basic and concise while the public reports of TASE contain more detailed information which may be different from, or additional to, the information contained in this presentation. In the event of any contradiction or discrepancy between the presentation and the public reports, the information in the public reports prevails. Thus, the presentation is not intended to serve as a substitute to reading TASE's public reports.

The Information contains statements and information that are forward-looking. Such forward-looking statements and information are only predictions and cannot assure TASE's future performance. Investors have been cautioned that any such forward-looking statements and information are subject to many risks and uncertainties relating to the operations and business of TASE. As a result of such risks and uncertainties, the actual results of TASE may be materially different from any future result expressed or implied in the forward-looking statement or information contained herein. Any opinions expressed in this presentation are subject to change without notice and TASE is not under obligation to update or keep current any of the forward-looking statement or information contained herein.

No representation, warranty or undertaking, express or implied, is made as to, and no reliance should be placed on, the fairness, accuracy, completeness or correctness of the information or the opinions contained therein. The information, including but not limited to forward-looking statements, applies only as of the date of this presentation and is not intended to give any assurances as to future results. TASE expressly disclaims any obligation or undertaking to disseminate any updates or revisions to the information, including any financial data or forward-looking statements, and will not publicly release any revisions it may make to the information that may result from any change in TASE's expectations, any change in events, conditions or circumstances on which these forward-looking statements are based, or other events or circumstances arising after the date of this document

TASE at a Glance / Q1'21 by the Numbers

Established in 1953, TASE is the only Securities Exchange in Israel and a cornerstone of its growing capital market

TASE plays a critical role in the market infrastructure of Israel as well as the overall growth of its economy

• "Home court" for Israeli companies looking to raise capital
• Primary source of capital raising for the Israeli government
• Only clearing house infrastructure in Israel, including clearing/ settlement of mutual funds (major retail investing channel)

(1) Includes corporate, government bonds ,ETFs and structured bonds. (2) Excludes options on single shares and TA-Banks indices. (3) Includes corporate, government and structured bonds.

The results for Q1'21

NIS, in thousands

	Quarter Ended
IFRS (GAAP)	March 31, 2021	March 31, 2020	Difference -%
Revenue from services	78,370	81,207	)3%(
Expenses	65,674	63,620	3%
Profit before financing income, net	12,696	17,587	)28%(
Financing income (expenses)	134	)4,407(	)103%(
Taxes on income	3,169	2,950	7%
Profit for the quarter	9,661	10,230	)6%(
Diluted EPS (in NIS)	0.093	0.100	)7%(
Non GAAP
Adjusted EBITDA*	24,556	28,890	)15%(
% EBITDA Adjusted margin	31%	36%
Adjusted net profit*	9,894	10,644	)7%(
% Adjusted net profit margin	13%	13%

Revenue Q1'21

NIS, in thousands

	Quarter Ended
	March 31, 2021	% of the Company's total revenues	March 31, 2020	% of the Company's total revenues	Difference - %
Trading and clearing commissions	34,115	44%	39,680	49%	)14%(
Listing fees and levies	16,402	21%	14,977	18%	10%
Clearing House services	15,051	19%	14,368	18%	5%
Data distribution and Connectivity services	12,630	16%	11,615	14%	9%
Other revenue	172	0%	567	1%	)70%(
Total revenue	78,370	100%	81,207	100%	)3%(

44% transactional

• Trading and clearing commissions Securities listing fees, and annual levies
• Clearing House services

Data distribution and connectivity services

Other

5

Adjusted Expenses(*) Q1'21

NIS, in thousands

	Quarter Ended
	March 31, 2021	% of the Company's total Expenses	March 31, 2020	% of the Company's total Expenses	Difference -%
Compensation	37,396	57%	36,391	58%	3%
Computer and Communications	6,709	10%	6,288	10%	7%
Property Taxes and Building Maintenance	3,048	5%	3,134	5%	)3%(
Marketing	1,727	3%	1,430	2%	21%
Fee to the Israel Securities Authority	2,253	3%	2,699	4%	)17%(
General and Administrative	2,681	4%	2,375	4%	13%
Depreciation & amortization	11,572	18%	10,871	17%	6%
Other	55	0%	18	0%	206%
Total Expenses	65,441	100%	63,206	100%	4%

• Compensation
• Computer and communication
• Property taxes and building maintenance
• Marketing
• Fee to the Israeli Securities Authority
• General and administrative
• Depreciation and amortization
• Other

Balance Sheet and Liquidity Position

as of March 31st 2021 | NIS Thousands

Assets:
Current assets
Cash and cash equivalents	166,996
Financial assets at fair value through profit or loss	204,739
Trade receivables	14,603
Other receivables	17,514
Total	403,852
Assets derived from clearing operations in respect of open derivative positions	650,502
	1,054,354
Non-current assets
Cash restricted as to use	-
Other long-term receivables	1,771
Property and equipment, net	342,811
Intangible assets, net	126,357
Deferred tax assets	15,597
Total non-current assets	486,536
Total assets	1,540,890
Liabilities and Equity:
Current liabilities
Trade payables	10,306
Short-term liabilities for employee benefits	34,421
Other payables	4,914
Dividend declared	18,450
Current maturities of lease liabilities	8,817
Current tax liabilities	4,033
Deferred income in respect of listing fees and levies	44,568
Total )1(	125,509
Liabilities derived from clearing operations in respect of open derivative positions	650,502
Total current liabilities	776,011
Non-current liabilities:
Non-current liabilities for employee benefits	37,759
Lease liabilities	20,021
Deferred income in respect of listing fees and levies	82,483
Other liabilities	-
Total non-current liabilities	140,263
Total equity	624,616
Total liabilities and equity	1,540,890
Equity Ratio (1)	41%

Capital requirements in respect of the risk components:
Credit risk	38,175
Market risk	5,795
Legal and operational risk (2)	41,571
Business continuity and reorganization (3)	114,775
Contribution against default waterfall	27,206
Total capital requirements in respect of the risk components	227,522
Capital base components:
Total equity	624,616
Less:
Intangible assets	)115,118(
Total qualifying capital base	509,498
Capital surplus (qualifying capital base, less requirements)	281,976
Liquidity requirements in respect to the risk components
Business continuity and reorganization	114,775
Contribution against default waterfall	27,206
Total requirements for liquid assets	141,981
Cash and cash equivalents	166,996
Securities portfolio at fair value	204,739
Less – amortization coefficients on the assets	)10,469(
Credit line	-
Less – current liabilities	)103,654(
Net liquid assets	257,612
Liquidity surplus (net liquid assets, less requirements)	115,631

116 NIS in Millions Excess Liquidity

(1) A capital allocation equivalent to 15% of the average gross income in the last twelve quarters. (2) A capital allocation equivalent to six months' operating expenses (on an annual basis).

Cash Flow NIS in Millions

	Item	Q1'21	2020	Q4'20	Q3'20	Q2'20	Q1'20
Operating Activities	Adjusted EBITDA (1)	24.6	95.1	25.9	19.3	21.0	28.9
	Changes in working capital	18.4	6.7	(1.9)	)10.4(	2.3	16.7
	Financing and tax	)1.2(	(6.4)	(3.7)	)1.4(	)2.3(	1.0
	Total	41.8	95.4	20.3	7.5	21.0	46.6
Investing Activities	Investments in property and equipment and in intangible assets	)13.3(	(37.9)	(14.4)	)6.4(	(9.0)	)8.1(
	Acquisition of financial assets at fair value	)1.4(	(4.2)	(1.4)	)0.8(	(3.5)	1.5
	Total	)14.7(	(42.1)	(15.8)	)7.2(	(12.5)	)6.6(
Financing Activities	Lease payments	)2.3(	(9.9)	(2.5)	)2.4(	(2.5)	)2.5(
	Receipts from shareholders within the framework of implementing the ownership restructuring, net	-	3.7	-	3.7	-	-
	Dividend payment	-	(8.8)	-	-	)8.8(	-
	Total	)2.3(	(15.0)	(2.5)	1.3	(11.3)	)2.5(
	Total increase in cash and cash equivalents	24.8	38.3	2.0	1.6	)2.8(	37.5
	Free Cash Flow (2)	26.2	47.6	3.4	(1.3)	9.5	36.0

(1) Exclude expenses in respect to share-payments

(3) .

(2) FCF includes the net cash from operating activities, less Investments in property and equipment and in intangible assets and Lease payments

Revenue Trends

NIS in Millions

Adjusted Operating Expenses(1) Trends

NIS in Millions

Profitability Trends

NIS in Millions

Adjusted Net Profit & Margin (1) 6% 8% 20.0 30.0

13%

0%

0.0

10.0

40.0

50.0

60.0

2%

4%

10%

12%

14%

(1) Excludes the reversal of the impairment provision in 2018 and expenses in respect to share-payments in 2019, 2020 and 2021

40%

16%

20.0

18%

45%

70.0

Issuance Volume

Government Bond Issuances Corporate Bond Issuances

(1) Includes TASE-UP (2) Excludes Private Placements. Includes TASE-UP

APPENDIX

13

Q1'21 Revenue Composition

Revenue Drill Down | Transactional - Shares

Velocity Represents: Calculated as annualized trading volumes divided by average market capitalization Includes ETFs and ETNs

Revenue Drill Down | Transactional - Bonds

Revenue Drill Down | Transactional - Mutual Funds

Revenue Drill Down | Transactional – Derivatives

Daily Contracts (thousands)

Average Daily Turnover (in '000 units)

Revenue Capture % Commission / Contract

Revenue (NIS millions)

Revenue Drill Down | Non-transactional

NIS in Millions Unless Otherwise Noted

* As of 2020, the value of assets in each period is calculated as the monthly average in the period. The value of assets in 2018 and 2019 is presented as the value for the end of the period . ** The collection of revenues based on the value of assets at the end of each month.

Revenue Drill Down | Non-transactional

NIS in Millions Unless Otherwise Noted

(*) The revenue from the distribution of data includes revenue in respect of connectivity, which was presented net in 2018.

Q1'21 Adjusted Expense Composition

• Compensation
• Computer and communication
• Property taxes and building maintenance
• Marketing
• Fee to the Israeli Securities Authority
• General and administrative
• Depreciation and amortization
• Other

Compensation

• The 2017 Collective Agreement sets the maximum annual increase in employee base compensation to the greater of 3.5% or CPI plus 1.5%(1)
• Q1'21: NIS 37.4M

Computer and Communications

• Expenses associated with maintenance, support, and software licenses
• Q1'21: NIS 6.7M

Property Taxes and Building Maintenance

▪ Expenses associated with owning the TASE headquarters

Fee to the Israel Securities Authority

▪ Annual fee to the Company's

primary regulator

▪ Q1'21: NIS 2.3M

▪ Q1'21: NIS 3.0M

General and Administrative

• Costs associated with professional services, overhead, supplies, utilities, and insurance
• Q1'21: NIS 2.7M

Marketing

• General marketing expenses including marketing to increase listings and capital raises
• Q1'21: NIS 1.7M

Depreciation & Other

▪ Q1'21: NIS 11.6M

Adjusted Net Profit and Adjusted EBITDA Reconciliation

NIS in Thousands

		Quarter Ended		Year Ended December 31,
		March 31, 2021	March 31, 2020	2020	2019
Adjusted Net Profit Reconciliation	Profit for the year	9,661	10,230	36,904	17,558
	(+) Expenses in respect to share-based payments	233	414	1,280	3,858
	Adjusted Net Profit	9,894	10,644	38,184	21,416

		Quarter Ended	Year Ended December 31,
	March 31, 2021	March 31, 2020	2020	2019
Profit before financing income, net	12,696	17,587	48,772	14,160
(+) Expenses in respect to share-based payments	233	414	1,280	3,858
(+) Depreciation and amortization expenses	11,572	10,871	44,510	43,571
(+) Loss from disposal of property and equipment and intangible assets	55	18	587	1,358
Adjusted EBITDA	24,556	28,890	95,149	62,947

Transactional Metrics

	Quarter Ended					Year Ended
	31.03.21	31.12.20	30.09.20	30.06.20	31.03.20	31.12.20	31.12.19	31.12.18
Number of trading days	62	66	62	57	63	248	244	245
SHARES
Market cap of Shares (ex. ETN / ETFs)	877	842	714	680	649	842	820	703
Market cap of ETN / ETFs on share indices	66	61	52	50	46	60	64	60
Total market cap (in NIS billions)	943	903	766	730	695	902	884	763
Shares ADV (ex. ETN / ETFs)	1,545	1,363	1,357	1,484	1,663	1,465	1,081	1,124
ETN / ETFs on share indices ADV	315	307	339	401	527	393	219	470
Total average daily volume (in NIS millions)	1,859	1,670	1,696	1,885	2,190	1,858	1,300	1,594
Average commissions	0.01091%	0.01123%	0.01070%	0.01086%	0.01004%	0.01067%	0.01022%	0.00900%
Revenue (in NIS thousands)	12,578	12,373	11,259	11,668	13,849	49,150	32,434	33,976
BONDS
Market cap of government bonds -unlinked	361	351	328	307	270	351	275	248
Market cap of government bonds -linked	293	280	269	259	254	280	257	236
Market cap of corporate bonds	389	388	383	372	373	388	411	380
Market cap of bonds (ex. ETN / ETFs)	1,043	1,019	980	938	897	1,019	943	864
Market cap of ETN / ETFs on bond indices	31	31	30	27	26	31	29	27
Total market cap (in NIS billions)	1,074	1,050	1,010	965	923	1,050	972	891
Government bonds - unlinked ADV (in NIS millions)	2,354	1,682	1,568	2,116	2,492	1,959	1,722	1,741
Government bonds - linked ADV (in NIS millions)	1,346	914	1,097	1,091	1,307	1,100	897	907
Corporate bonds ADV excluding ETNs (in NIS millions)	696	822	794	1,071	1,043	928	798	899
ETN / ETFs on bond indices ADV	135	120	132	160	182	148	95	160
Total average daily volume (in NIS millions)	4,531	3,538	3,591	4,438	5,024	4,135	3,512	3,706
Government bonds unlinked - average commissions	0.00193%	0.00190%	0.00192%	0.00183%	0.00187%	0.00188%	0.00192%	0.00190%
Government bonds linked - average commissions	0.00270%	0.00294%	0.00291%	0.00313%	0.00281%	0.00294%	0.00291%	0.00289%
Corporate bonds - average commissions	0.00712%	0.00718%	0.00690%	0.00679%	0.00698%	0.00696%	0.00694%	0.00694%
Government bonds - unlinked (in NIS thousands)	2,820	2,108	1,866	2,210	2,932	9,116	8,052	8,106
Government bonds - linked (in NIS thousands)	2,254	1,776	1,982	1,950	2,314	8,022	6,367	6,431
Corporate bonds (in NIS thousands)	3,666	4,462	3,959	4,766	5,386	18,573	15,116	17,998
Other (MTS) (in NIS thousands)	73	31	29	33	42	135	187	281
Revenue (in NIS thousands)	8,813	8,377	7,836	8,958	10,674	35,846	29,722	32,816

Transactional Metrics | Continued

	Quarter Ended					Year Ended
	31.03.21	31.12.20	30.09.20	30.06.20	31.03.20	31.12.20	31.12.19	31.12.18
Number of trading days	62	66	62	57	63	248	244	245
TREASURY BILLS
Market cap (in NIS billions)	91	87	91	93	112	87	120	108
Treasury bills ADV (in NIS millions)	449	278	482	667	911	579	413	431
Average commissions	0.00240%	0.00262%	0.00221%	0.00184%	0.00188%	0.00203%	0.00256%	0.00343%
Revenue (in NIS thousands)	668	481	660	699	1,080	2,920	2,581	3,622
MUTUAL FUNDS
Market cap (in NIS billions)	255	239	224	215	200	239	259	220
Average daily value of creation / redemptions (in NIS millions)	942	882	772	864	1686	1055	883	960
Average commissions	0.0116%	0.0116%	0.01249%	0.01166%	0.00763%	0.01016%	0.01100%	0.01016%
Revenue (in NIS thousands)	6,776	6,768	5,978	5,742	8,106	26,594	23,716	23,900
DERIVATIVES
Derivatives on indices (1)	104.1	106.6	110.1	111.3	120.6	112.1	96.6	134.3
Derivatives on foreign currency	54.3	50.5	53.6	57.7	58.7	55.0	45.4	58.5
Derivatives on individual shares	4.6	2.8	2.9	3.7	2.8	3.0	3.1	2.6
Total derivative contracts (in '000 units)	163.0	159.9	166.6	172.7	182.0	170.1	145.1	196.0
Average commissions	0.522	0.520	0.519	0.520	0.521	0.520	0.524	0.521
Revenue (in NIS thousands)	5,280	5,488	5,364	5,119	5,971	21,941	18,547	25,042
Total revenue from trading and clearing commissions	34,115	33,487	31,097	32,187	39,680	136,451	107,000	119,355

Non-Transactional Metrics

	Quarter Ended					Year Ended
	31.03.21	31.12.20	30.09.20	30.06.20	31.03.20	31.12.20	31.12.19	31.12.18
CLEARING HOUSE SERVICES
Average Monthly Market value of assets (in NIS billions)*	2,776	2,602	2,467	2,390	2,505	2,491	2,639	2,310
Avg. commissions from Custodian Fees	0.00108%	0.00107%	0.00107%	0.00107%	0.00107%	0.00107%	0.00105%	0.00105%
Revenue from: (in NIS thousands)
Custodian Fees	7,495	6,983	6,625	6,397	6,671	26,676	26,534	26,435
Clearing House services for members / company events	6,229	6,733	6,024	6,534	6,514	25,805	21,160	18,907
Other	1,327	1,290	1,303	1,196	1,183	4,972	4,637	4,263
Total revenue from Clearing House services	15,051	15,006	13,952	14,127	14,368	57,453	52,331	49,605

	Quarter Ended					Year Ended
	31.03.21	31.12.20	30.09.20	30.06.20	31.03.20	31.12.20	31.12.19	31.12.18
LISTING FEES AND LEVIES
Weighted avg. number of companies / funds
Companies	545	524	527	529	531	527	541	563
Mutual funds and ETNs / ETFs	2,182	2,135	2,124	2,154	2,150	2,142	2,132	1,511
Avg. revenue from levies (in NIS thousands)
Companies	5.4	5.2	5.3	5.2	5.2	20.9	18.9	12.9
Mutual funds and ETNs / ETFs	1.9	1.8	1.9	1.9	2.0	7.6	7.2	7.3
Revenue from Annual Levies from: (in NIS thousands)
Companies	2,938	2,740	2,767	2,766	2,766	11,039	10,198	7,236
Mutual funds and ETNs / ETFs	4,096	3,923	3,946	4,002	4,353	16,225	15,339	11,033
Nominee Company and others	1,256	794	772	750	751	3,067	2,530	1,883
Total revenue from Annual levies	8,290	7,457	7,486	7,518	7,870	30,331	28,067	20,152

Non-Transactional Metrics | Continued

		Quarter Ended	Year Ended
	31.03.21	31.1220	30.09.20	30.06.20	31.03.20	31.12.20	31.12.19	31.12.18
LISTING FEES AND LEVIES
The value of issuance used to calculate Listing fees (in NIS millions)(1)
Shares, Bonds and ETN / ETFs(2) Companies –	54,073	34,905	34,583	26,126	22,796	118,413	91,415	74,661
Government bonds	49,633	45,026	55,580	45,621	18,552	164,779	86,115	59,709
Treasury-bills	31,996	28,990	26,986	16,986	27,962	100,924	131,684	137,712
Number of issuances
Number of public offerings of shares on TASE	56	42	29	21	23	115	60	64
Number of new issuers of shares	33	15	6	4	2	27	7	11
Number of new (dual-listed) companies	1	1	-	1	1	3	3	3
Number of Offerings and Volumes Raised
Amount raised in share IPOs of new issuers (in NIS millions)	3,101	2,480	1,136	563	437	4,616	3,206	1,844
Amount raised in bond offerings by new issuers (in NIS millions)	119	100	-	-	-	100	1,728	7,196
Number of corporate bond offerings to the public	34	37	38	37	33	145	160	142
Number of corporate bond offerings to the public by new companies	2	1	-	-	-	1	4	13
Average revenue from Examination and Listing Fees
Companies – Shares, Bonds and ETN / ETFs	0.0154%	0.0185%	0.0170%	0.0198%	0.0179%	0.0182%	0.023%	0.023%
Government bonds	0.0035%	0.0035%	0.0036%	0.0036%	0.0036%	0.0036%	0.0035%	0.0040%
Revenue from Examination and Listing Fees (in NIS thousands)
Examination fees	2,332	1,992	1,690	1,682	1,479	6,843	5,416	7,985
Listing fees - shares & bonds	8,329	6,443	5,870	5,171	4,086	21,570	20,958	16,922
Listing fees - government bonds	1,749	1,578	1,984	1,643	675	5,881	3,045	2,388
Listing of T-bills	224	203	189	119	196	707	922	964
Levies and examination fees from members	53	80	-	53	-	133	1,208	-
Other	5	94	95	29	-	218	746	774
Effect of IFRS on Listing Fees	(4,580)	(2,558(	)2,459(	(1,450)	671	(5,796(	(5,684)	(2,660)
Total revenue from Examination and Listing Fees (in NIS thousands)	8,112	7,832	7,370	7,247	7,107	29,556	26,611	26,373
Total revenue from Listing fees and levies	16,402	15,289	14,856	14,765	14,977	59,887	54,678	46,525

(1) The value at the issuance date used for the calculation of the listing fees as set forth in the Rules & Regulation of TASE. (2) The issuance volume in 2018 and 2019 presented as the actual issuance amount was raised.

Non-Transactional Metrics | Continued

			Quarter Ended	Year Ended
	31.03.21	31.12.20	30.09.20	30.06.20	31.03.20	31.12.20	31.12.19	31.12.18
DISTRIBUTION OF DATA AND CONNECTIVITY SERVICES
Average number of data terminals
Domestic business clients	7,785	7,471	7,504	7,652	7,607	7,559	7,274	8,073
Domestic private clients	10,467	9,106	9,097	9,298	7,766	8,816	6,489	-
Overseas	4,946	4,843	4,506	4,598	4,293	4,560	4,886	4,745
Quote generator	273	329	260	279	272	285	245	-
Revenue from data terminals and data (in NIS thousands)
Domestic business clients	4,181	4,056	4,075	4,153	4,132	16,416	15,528	17,438
Domestic private clients	1,099	956	955	977	815	3,703	2,726	-
Overseas	1,426	1,409	1,375	1,429	1,346	5,559	6,270	6,148
Quote generator	440	483	401	413	400	1,697	1,430	-
Usage based	2,535	2,814	2,132	2,438	1,682	9,066	5,793	8,342
Indices and data	844	927	623	625	1,014	3,189	3,019	3,026
connectivity services	2,105	2,227	2,177	2,148	2,226	8,778	7,654	-
Total revenue from Distribution of data and connectivity services	12,630	12,872	11,738	12,183	11,615	48,408	42,419	34,954

CONTACTS

Yehuda van der Walde EVP CFO

Email: cfo@tase.co.il

Tel: +972-76-8160442

Orna Goren Head of Communication & PR unit

Email: tase.ir@tase.co.il

Tel: +972-76-8160405

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