28th Annual CITIC CLSA Investors' Forum 2021 - September 2021 Singapore Exchange
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28th Annual CITIC CLSA Investors’ Forum 2021 September 2021 Singapore Exchange
Contents
1 Who we are 2
- Our background
- Organizational structure
- Strategic priorities, trends and strengths
- Revenue streams and investments for growth
- Key financials
2 Fixed Income, Currencies & Commodities 11
3 Equities (Derivatives and Cash) 20
4 Data, Connectivity and Indices 25
5 Other Information 30
6 Appendix 40
Who we are
2
International multi-asset exchange group
Headquartered in AAA-rated Singapore, we are an international multi-asset exchange focused
on expanding the strengths of our platform and services for our clients
• Asia’s most international, multi-asset exchange – Operating equity, fixed income, currency and
commodity markets
• Diversified exchange group with a global distribution network – present in 15 major cities1 globally
• High Operating and EBITDA margins of 50% and 59% respectively in FY2021
• EPS of 41.6 cents and Operating cash flow of 51.7 cents per share
• Total dividend of 32.0 cents per share2
• Systemically Important Financial Infrastructure (SIFI)
Rated Aa2, highest credit rating assigned to any exchange group in the world by Moody’s3
Re-affirms the strong credit fundamentals of SGX and clearing houses, and reinforces our risk
management value-proposition to customers
1 Including subsidiaries
2 Final quarterly dividend of 8 cents per share is subject to approval at the group’s AGM in October 2021 3
3 As at 5 August 2021
Our Customers and Partners Recognise the Value that We Bring
SGX has established a strong brand recognition through winning multiple awards for
consecutive years
2020
Exchange of the Year
2019 2020 by FOW Asia Capital
Market Awards
Financial Metals Service
2018 Provider of the Year 2019 Best Exchange for FX
at Platts Global Metals 2020 at FX Markets e-FX
Best FX Exchange in Asia Awards Awards
2016 and Best Clearing House
in Asia 2018-2019 by FX Exchange of the Year Asia-Pacific Derivatives
Exchange of the Year Week 2019 by Global Investor Exchange of the Year
2014 2016-2018 at Energy Best Index Provider 2018 Group 2020 by GlobalCapital
Risk Asia Awards at Structured Retail
Exchange of the Year – Exchange of the Year
Derivatives Exchange of Products (SRP) Asia-
Commodities 2019 by 2020 at Regulation Asia
the Year 2014-2019 at Pacific Awards
Global Investor Group Awards for Excellence
Asia Risk Awards Exchange of the Year –
Derivatives 2018 by
Asia-Pacific Derivatives Global Investor Group
Exchange of the Year
2014-2018 by Exchange of the Year
GlobalCapital 2018 at Regulation Asia
Awards for Excellence
4
Four business and client units
Four business and client units covering the entire exchange value chain from listing, trading,
clearing, post-trade, depository and data services
Fixed Income, Currencies and Data, Connectivity
Equities
Commodities (FICC) and Indices (DCI)
Fixed Income Listing & Trading Equity Listings FICC and Equities market data
Trading & Clearing of Pan-Asian currency Trading & Clearing of Pan-Asian equity API and Co-location connectivity
and commodity derivatives index derivatives, cash equities, ETFs, Development and bespoke calculation of
Structured Warrants, REITs, DLCs, etc. indices
Delivery, Settlement and Custody of
securities
Global Sales and Origination (GSO)
Nine international offices and specialist sales teams
5
SGX’s strategy captures opportunities from macro trends
1 2 3
Widen our Grow our
Advance our
partnerships international
multi-asset
and presence
exchange
networks
Low interest rate Inflation Sustainability and Electronification Growth of Asia leads in
environment concerns climate change of OTC markets passive investing global growth
6
Our strengths as a multi-asset marketplace
• Drive network and portfolio effects
• Strong support from our ecosystem of participants
Wide range of risk Capital Efficiency Round-the-clock Trusted clearing
management and through Margin- trading covering house and
access solutions Offsets Asian & Western high skin in the
time zones game
Liquid futures & options Cross-asset margin Ability for global Committed to the safety
products in major asset offsets resulting in participants to manage of the market by
classes such as equities, cost savings for their portfolio risk 22.5 contributing 25% to the
FX and commodities customers hours a day clearing fund
7
SGX occupies an investment ‘sweet spot’
• Diversified Revenue Streams
• FICC and DCI accounted for 34% of total revenue for FY2021, up from 21% for FY2016
• Combination of strong core businesses, exciting growth engines and emerging opportunities
Revenue Breakdown Investments to drive Growth
FICC + DCI: 21% FICC + DCI: 34%
10%
20%
31% 11% 27%
FY20161 FY20212 14% Growth
48% 39%
Equities: 79% Equities: 66%
Stability Emerging
Revenue: S$818 million Revenue: S$1,056 million
Net Profit: S$349 million Net Profit: S$445 million
FICC DCI Equities - Cash Equities - Derivatives
Note: Figures may be subject to rounding
1 Internal determination
2 Revenue breakdown derived from calculations from Operating Revenue in FY2021 Audited SGX Group financial statements 8
Focused on advancing our multi-asset position, expanding our
partnerships, and developing our international brand
Advance our Expand our Enlarge our
Leadership as a Network as the Impact as an
Multi-Asset Exchange Best-in-class Partner International Brand
Further grow and diversify products Grow our business partnerships and Increase our international presence
and services alliances with regional and global by growing the number of equity and
exchanges as a strategy to achieve debt listings
FX: BidFX and MaxxTrader (1), OTC growth
FX Electronic Communication Increase international trading and
Network (ECN) Collaborate with market clearing activity
infrastructures and market operators
Fixed Income: Trumid XT (1), to grow cross-border flows
Marketnode
Index: Scientific Beta
1 Subject to transaction closing
9Robust financials
Track record of delivering growth and shareholder returns
Capacity to further invest and grow given our strong balance sheet, healthy leverage ratios, and strong cash flows
FY2017 FY2018 FY2019 FY2020 FY2021
Revenue ($ million) 801 845 910 1,053 1,056
EBITDA ($ million) 460 486 524 6561 6251
EBITDA margin 57% 58% 58% 62% 59%
Operating profit ($ million) 402 425 461 566 531
Operating profit margin 50% 50% 51% 54% 50%
Net profit ($ million) 340 363 391 472 445
attributable to SGX
Gross Debt to EBITDA (x)2 - - - 0.6 0.9
Operating cash flow per share (cents) Earnings per share (cents) Dividend per share (cents)
58.3
51.7 44.1 41.6
36.5 30.0 30.0 30.5 32.0
39.9 39.0 31.7 33.9 28.0
35.3
FY2017 FY2018 FY2019 FY2020 FY2021 FY2017 FY2018 FY2019 FY2020 FY2021 FY2017 FY2018 FY2019 FY2020 FY2021
Note: All figures in $ millions unless otherwise stated and may be subject to rounding
1 Adoption of SFRS(I) 16 Leases: Rental expenses relating operating leases for data centers and office premises are now recorded as depreciation expense and finance charges
2 Gross debt include both borrowings and lease liabilities. Including MaxxTrader, which is expected to close in FY2022, gross debt to EBITDA will be ~1.1x 10Fixed Income, Currencies and Commodities (FICC)
11Driving the digitalisation of fixed income capital markets
across issuance, custody, depository and trading
Asia’s most global and diversified listing venue Advancing digital asset infrastructure in capital markets
Enhancing liquidity and execution in the Asian bond market for global clients
• Diverse participant base across Asia Pacific, UK, Switzerland and the Middle East
• Advanced technology and rich analytics
• General Counterparty solution for competitive trade execution and increased
operational efficiency
12Largest and fastest growing currency futures exchange in Asia
Size of Market Singapore SGX
Largest financial market Largest FX center in Asia Diverse Asian currency suite of
globally with US$6.6 trillion Pacific, third largest 24 currency futures and 3
traded OTC daily globally options contracts
Asian NDFs is a US$153 US$633 billion traded OTC >80% market share in
Currencies
billion market that has daily USD/CNH and > 60% market
potential to be futurised Leading global trading share in INR/USD
Regulatory trends favour venue for key Asian Notional on-exchange FX ADV
shift to on-exchange currencies of US$6.0B in FY21
clearing Innovative FlexC FX futures
feature
Key SGX Highlights Acquisition of BidFX
24 3
Futures Options
119% US$11.4Bn ~US$1.4T
Total Volume – Open Interest value Notional value
Diverse Asian
CAGR (Jul 2021) up 8.9% y-o-y
FX suite
Nov 13 – Jul 21 traded in 2020 Expanding Network
13Rapidly growing FX futures business
119% volume CAGR since November 2013
SGX Currency Futures – Total Daily Volume & Open Interest
Asia’s Best FX Exchange & Clearing House – by FX Week (2018 to 2021)
Best FX Exchange & Clearing House – by FX Markets (2018 to 2021)
Note: Data as at 30 Jul 2021 14BidFX provides SGX opportunity to target a larger OTC FX
market
OTC FX Trading in 2019: US$6.6 trillion traded daily Synergistic opportunities from BidFx’s strengths:
Exchange-traded FX derivatives 2019: US$0.16 trillion traded
• Asian NDF
Global OTC FX Trading in 2019 – by instrument type
• G10 Spot & Swaps
OTC Options
4%
OTC Currency • International footprint
Swaps 2%
OTC FX: Increasing growth of EM currencies1
OTC Outright US$ Trillion ADV, 2001-2019
Forwards 1.2 4.0 6.6
15%
OTC Spot
6% 12%
30% 22% EM
G10
94% 88%
OTC Swaps, 49% 78%
2001 2010 2019
Source: BIS Triennial Central Bank Survey 2019 and SGX estimates
1 EM currencies are defined by BIS as EME currencies, which include non-EM currencies such as SGD and HKD even though these are not classified as “emerging”
economies Adjusted for local and cross-border inter-dealer double counting (i.e. net-net basis). Excludes exchange-traded derivatives. 15Potential to capture greater electronification of FX market
BidFX is positioned as a buyside Multi-Dealer Platform (MDP), which has gained 6% share since
2016
Breakdown of FX volumes by Execution Methods
Percentage shares in total turnover
Broad voice and electronic execution methods (%) Breakdown of electronic execution methods (%)
Voice
indirect
Electronic Single-bank
direct platforms
Direct Bank (SDP), 15%
13 (-2)
28 (-5) Platform Others, 13%
Voice (e.g. Direct
direct electronic price
27 (0) streams)
Disclosed
venues (MDP),
29 (+6) Multi Dealer 13%
Platform Anonymous
Electronic venues (ECN),
Undistributed indirect 16%
3 (+1)
() – Growth from 2016 to 2019
100%= ADV US$6.6 Trillion
SDP: Single Dealer Platform, individual bank proprietary trading which only allows clients to trade with the bank
MDP: Multi-Dealer Platform, electronic venue (usually 3rd party) for clients to access liquidity from many banks
ECN: “Electronic Communication Network” that automatically matches buy and sell orders on a anonymous basis and provides direct access to market participants. It
resembles the ‘exchange’ trading model
16SGX’s vision is to bring together three distinct FX opportunities
FX Futures OTC FX
SGX is largest and most Pivot to OTC FX with Multi- Set up a primary OTC FX
liquid FX derivatives Dealer Platforms and FX Electronic Communication
exchange in Asia Pricing and Risk Engine – Network anchored in
BidFX and MaxxTrader Singapore
Target launch:
4Q 2021
Marketplace Workflow Solution Marketplace
Connecting ALL investors to trade Connecting buy-side to many Connecting ALL Institutional firms
FX Futures & Options based on sell-side for trading OTC FX to trade OTC FX based on best
best available bid-ask quotes on a ‘disclosed’ basis available bid-ask quotes from
from multiple participants multiple market participants
Anonymous Disclosed Anonymous
ALL TO ALL Dealer to Dealer to Client ALL TO ALL
Addressable Market Addressable Market Addressable Market
ADV: US$160 billion ADV: US$850 billion ADV: US$1 trillion
Build an Integrated FX Offering combining FX Futures and OTC FX offering
17Extensive Suite Of Commodities Products
Complements Singapore’s commodities hub status
Demand for industrial commodities set to continue amid sustained urbanisation
Urbanisation and Steel Production Price-Discovery Centre For The Steel Value Chain
1.2 2.5
Coking Coal Iron Ore
World Steel Production, in billions MT
1.0 FOB Australia, CFR China
Urban Population, in Billions
2.0
CFR China
2.3%
0.8 CAGR
3.1%
1.5
CAGR
0.6 3.7%
4.5%
CAGR
1.0 Steel
0.4 CAGR HRC Steel (CFR ASEAN)
5.1%
CAGR1 0.5
0.2
- 0.0
Freight
2000 2005 2010 2015 2020 2025e Time Charter FFA
Year (Cape, Panamax, Supramax, Handysize)
China Urban Population World Steel Production Single Routes (C5, 2A, 3A)
Source :
UN Population Division, https://population.un.org/wup/DataQuery/
Steel production statistics: World Steel Association Maritime Indices
1 CAGR in chart relates to growth of China’s Urban Population
18The leading offshore Iron Ore risk management hub
Size of Market Singapore SGX
Largest in the metal market Leading merchant hub for Global pricing and risk
by tonnage commodities houses with management centre
Notional value of >US$115B ~140 metals and mineral Cleared 1.1 billion MT of iron ore
traded annually in the companies in FY2021
physical market Include top iron producers Offers a complete iron ore suite:
Iron Asia’s first truly global e.g. Vale, Rio Tinto, BHP 58% Fe, 62% Fe, 65% Fe, lump Fe
Ore commodity, with China a Billiton Steel value chain incorporating
major consumer coking coal and freight
Increasing financialisation of
Iron Ore
Key SGX Highlights
1.1 billion MT > 99% Fe 65% 1.5x
cleared in FY2021 market share of New high-grade Fe of paper to
international iron futures contract physical ratio
ore volumes Potential to grow
cleared
19Equities (Derivatives and Cash)
20Rapidly growing offshore market for Asian Equity Derivatives
Multi-asset exchange, offering a broad range of Asian access and risk management solutions
3.87 4.35 3.78
3.06 2.91 2.71 2.94
2.36 2.38
1.46
Volumes and open interest (mil)
Volume +79%
199 192
163 167 19 181
153 140 21
17
10 Others*
Volume +31% 8 15 11 6
5 21 Nikkei Options
6 12 23 21
6 17 10 MSCI/FTSE Taiwan
17 21
102 101 21 5 20 24 25 Nifty 50
77 21 19 23
7 4 22 16
27 20 26 Nikkei Futures
8 10 27 23
6 18 18
3 21
15 17
18 106
84 88 96
15 37 28 78 75 China A50
64
29
17 24
6
FY2012 FY2013 FY2014 FY2015 FY2016 FY2017 FY2018 FY2019 FY2020 FY2021
China A50 Futures Nikkei Futures Nifty Futures MSCI Taiwan Futures Nikkei Options Others Year-End Open Interest
*Others comprise mainly MSCI Singapore Futures
21SGX is the Most International Exchange
Around 40% of total market cap of companies listed on SGX are overseas companies
Others,
0.6%
Greater China, Southeast Asia,
32.0% 30.6%
Singapore Exchange
682 Listed Companies Non-
Singapore Singapore
Market Capitalization
60% 40%
US$668 billion
Japan & Korea,
Europe & US,
13.5%
21.3%
Australia, 2.1%
Australia Securities Hong Kong Stock Exchange London Stock Exchange NASDAQ New York Stock Exchange Tokyo Stock Exchange
Exchange
Non- Non- Non-
Non- Japan
UK, US
Non- US, 0.1%
Non- 18% 21%
AU 24%
7.4% China
7.2%
UK, US US,
AU China*
82% 79% 76% Japan
92.6% 92.8%
99.9%
*Note: Greater China includes Hong Kong,Taiwan and Mainland China companies
Source: Bloomberg (Jul 2021) , Singapore Exchange (Jul 2021), Exchange Websites
22Top Sectors on SGX
Consumer Technology Healthcare
PE: 18x PE: 26x^ PE: 72x
Includes food & beverage, Includes technology hardware & Full range of companies from
retail and others equipment, digital, semiconductor and pharmaceuticals, healthcare
telecommunications services
133 companies with market services to medical devices
companies. Other businesses include
cap of US$54 billion media, clean tech and engineering. technology
80 companies with market cap of 38 companies with market cap of
US$59 billion US$90 billion
Maritime, Offshore Commodities Real Estate
Services & Energy
PE: 25x PE: 20x PB: 1.0x
Asia’s largest cluster of listed Asia’s broadest range of real estate
Includes Agri-commodities,
companies companies and property trusts
Mineral & Oil & Gas Companies
61 companies and 2 business covering global real estate assets
34 companies with market cap of
trusts with market cap of US$20 103 real estate companies and
US$33 billion property trusts with market cap of
billion
US$142 billion
Source: Bloomberg & Singapore Exchange (Jul 2021)
Note: ^ Excludes the PE of telecommunication services companies by GICS sub-industry classification
23
Calculated using Market Capitalization Weighted PE Ratio.Successful execution of the world’s first liquidity switch
Powerful network effects and portfolio effects : SGX platform, clients and intermediaries
TWSGX
vs TWN
MSCIOpen Interest (US$M)
SGX FTSE ID vs MSCI
SGX FID Open Interest (US$M)
SGX FTSE
Taiwan
TW Notional Taiwan
TWN Notional Indonesia
ID Notional Indonesia
FID Notional
12,000 Index Futures Index Futures 40 Index Futures Index Futures
35
10,000
Notional OI (US$M)
Notional OI (US$M)
30
8,000
25
6,000 20
15
4,000
10
2,000
5
0
0
24Data, Connectivity and Indices (DCI)
25Delivering Market Solutions to Investors
Growth strategies reinforces across businesses
Data Connectivity Enabling Market Participants
• Highly dynamic technology driven services
• Serving participants ranging from investors, traders, data
redistributors, order management system providers, network
service providers, etc
Subscription business
Index • Non-transactional, recurring revenue
• Able to achieve over 95% renewal revenue
Revenue Trend
• Stable CAGR organic growth of 4%1, or 11% with acquisition
143
122
Content, Channel and Compute Growth Strategy
98 103
93
• Equities and FICC pan-Asia relevant content
• Delivering optimal 3Cs for different investment strategies
FY2017 FY2018 FY2019 FY2020 FY2021 • Continuous innovation drives new demands
1 5-year organic growth from FY17 - FY21
26Index investing and the ‘Smart Beta’ market
Factor investing has seen significant growth in recent years, with assets using smart beta and factor-
based strategies forecast to reach US$2.7 trillion by 20201, and there is further room for growth
Low interest rate
environment Global Factor & Smart Beta AUM (USD billion)1
Asia leads global growth 3,428
2,726
1,940
Growth of passive
investing
1,347
643
Sustainability and
climate change
Electronification of 2011 2014 2017 2020F 2023F
OTC markets
1Source: Blackrock’s Factor Investing: 2018 Landscape.
27An Attractive Opportunity To Broaden SGX’s Index Offering
Through The Fast-growing Smart Beta Index Space
High priority growth area for SGX
Established in 2012 by EDHEC-Risk Institute Asia
Award winning ‘Smart Beta’ index firm which develops, produces and promotes
multi- and single-factor indices Well-positioned in a high-growth
market
Robust quantitative research in equity portfolio construction and risk control
HQ in Singapore; offices in France, UK and US
Asset owner-focused client base in Europe and North America
Financially attractive
Scientific Beta Assets Under Replication (US$ bn) Brings unique capabilities to our
Index business
Exciting product innovation
opportunities
Strong potential linkages with SGX’s
product platform
28Scientific Beta’s New Pillar of Growth
Adding ESG/Climate solutions to Smart Beta Pillar
Extending expertise that correspond to two major concerns for investors:
− Smart beta, and more particularly factor investing
− ESG, and particularly climate investing
Since acquisition, accelerated investments in the area of climate investing as
part of the SGX Sustainable Exchange strategy
Devoting more than 40% of its R&D investment to climate investing and more
than 45% of its assets under replication refer to indices with an ESG or climate
flavour
Existing offerings for Multifactor indices Launched April 2021
Launched Climate Impact Consistent index series
in April 2021 for Asset Owners to fulfill
Net-Zero impact investing commitments
29Other Information
30SGX’s investment portfolio in financial technology, data
and platforms augments our multi-asset class exchange
Equities Fixed Income FX Commodities Freight
Private Markets – Pre- Investment network Fast-growing electronic Provides an FX post Physical commodity Operates as a price
IPO funding raising help offering equity and fixed income trading trade platform as a electronic marketplace to discovery platform for
create a pipeline for credit research and platform in the US, middle and back office produce Asia-centric container, sea and
public market capital investor relations specialised in corporate utility based on commodity indices and airfreight with potential
raising on SGX services, linking bonds. Distributed Ledger derivatives in partnership to be a global spot trade
institutional investors Technology (DLT) with the Zall Group and execution venue and
with research analysts GeTS index provider (FBX)
and corporates
Index
Regulated tokenised Marketnode JV - APAC XinTru JV - Trumid XT, FX electronic trading JV to develop indices for Independent index
fundraising and trading first exchange-led digital an electronic bond solution which serves onshore China steel provider specialising in
venue for digital assets, asset venture focused trading platform to buyside and sellside OTC pricing with a leading smart beta strategies,
including asset-backed on capital markets enhance liquidity and FX customers, with plans domestic online pricing with expertise in factor-
workflows through execution in the Asian to build an OTC FX and intelligence service. based and risk-managed
security tokens
smart contracts and DLT bond market Electronic Communication Support SGX’s expansion solutions
Network (ECN) of iron ore complex
Global carbon exchange and marketplace that aims to
Sustainability scale the voluntary carbon market
Joint-venture Acquisition Minority Investments
31Acquisition considerations and principles
Considerations General Guiding Principles
Gain capabilities to augment current offering
Strategic Fit Expand and deepen client relationships
Position SGX for fast growing business segments
3-year pro forma revenue CAGR > 10%
Cash EPS accretive within 3 years of acquisition
Financial Metrics
IRR > SGX’s WACC
Key synergies to be fully realized within 3 years of acquisition
Capital Structure Maintain SGX's strong implied investment grade rating
Partnerships Majority stake preferred
32FY2021 Highlights
Strong underlying performance, continued investments in growth, disciplined in cost management
Revenue Total Expenses EBITDA Margin
7% 4% 1%-pt
4%
Comparable 8% 3%-pt
918 1053 982 1056 62%
57% 58% 59%
475 487 458 525
FY2020 FY2021 FY2020 FY2021 FY2020 FY2021
Excluding TI Including TI Excluding SB & BidFX Including SB & BidFX Excluding TI, SB & BidFX Including TI, SB & BidFX
Excluding recently-acquired SB Excluding TI and recently-
Excluding Treasury Income (TI),
and BidFX, total expenses acquired SB and BidFX, EBITDA
revenue up 7% year-on-year
declined 4% year-on-year margins would have increased
Group revenue 1%-pt
Group total expenses $525M, up
$1.06B, comparable
8% Group EBITDA margins down 3%-
pts to 59%
Note: All figures in $ millions unless otherwise stated and may be subject to rounding 33Delivering Revenue Growth
Revenue
Revenue growth of 7% CAGR
7% CAGR historically
Millions ($)
Medium term Revenue CAGR1 of
1,056
801 high single-digit
FY2017 FY2021
In the medium term, our
~25%
20% revenue mix is anticipated to be
FICC 25%, Equities 60%, DCI 15%
Medium-
FY2021 14% Contribution from Scientific Beta
~60%
Term
66% and BidFX revenues will grow
~15%
beyond their current 6%
FICC DCI Equities
72%
1 Growth outlook assumes stable market backdrop.
34FY2021 Expense Breakdown
Fixed costs – 65%
Discretionary
7% Variable costs – 28%
Variable Staff Fixed Staff
Costs costs Variable staff cost increase in line with
16% 29% profitability
Processing & Royalties expenses are
Variable
28% Expenses volume-related
Processing $525M Fixed
& Royalties 65% Royalties are recovered as revenues under
12% licence fees
Technology
Discretionary costs – 7%
Depreciation 14%
and Premises
Amortisation & 2%
Others, 20%
Note: Numbers may be subject to rounding.
35Expense for FY2022 expected to be $565M-$575M
Excluding SB and BidFX, underlying expense CAGR (FY2020-22) expected to be ~1.5%
More than 50% of FY2022 increase in expenses will be for near-term investments in growing our business
− Include setting up of FX ECN, climate-related initiatives, and continued investments in SB and BidFX
FY2022 expense guidance excludes MaxxTrader acquisition, which is expected to close in 2Q FY2022
− Expect to add a further ~$25M to FY2022 expenses on an annualised basis
Expense growth expected to moderate in the medium-term
Growth
$565M - $575M
~2%-pts ~3%-pts
~4%-pts
7% CAGR
Expenses Growth Continued
relating to initiatives investments
underlying like setting into BidFX
business up of ECN and SB
525 525 and546
487
climate-
399 related
initiatives
FY2017 FY2020 FY2021 FY2022
1
Expense Guidance
Note: All figures in $ millions unless otherwise stated and may be subject to rounding
1 Guidance excludes expenses related to announced but not completed transactions e.g., Acquisition of MaxxTrader 36Underlying business continues to deliver operating leverage
Excluding Treasury Income, SB and BidFX, EBITDA and operating profit margins would have
increased by 1%-pts and 2%-pts, respectively
− FY2021 EBITDA margin of SB and BidFX combined was 37%1
Overall EBITDA and operating profit margins expected to be higher in the medium term as
we build scale
EBITDA and Operating Profit margins EBITDA and Operating Profit margins
(Excluding TI, SB & BidFX)
62%
58% 58% 59%
57%
54% 57% 58%
50% 50% 51% 50%
50%
47%
FY2017 FY2018 FY2019 FY2020 FY2021 FY2020 FY2021
EBITDA margin Operating Profit margin EBITDA margin Operating Profit margin
Note: All figures in $ millions unless otherwise stated and may be subject to rounding
1 Computed on a standalone basis 37CAPEX to support our growth ambitions
FY2021 CAPEX of $51M was mainly to upgrade our Titan OTC platform, digitalise retail
investor services, modernise our infrastructure, and infrastructure setup for BidFX
FY2022 CAPEX is expected to be between $60M-$65M as we invest in
resilience, digitalisation of our Fixed Income and FX markets, and partnership initiatives
CAPEX and Depreciation1
20 21 $60M - $65M
67 65 58 64 61
56 58 60 51
41
FY2017 FY2018 FY2019 FY2020 FY2021 FY2022
CAPEX Guidance
CAPEX ($M) Depreciation ($M) Depreciation due to adoption of SFRS(I)16 Leases
Note: All figures in $ millions unless otherwise stated and may be subject to rounding
1 Excludes amortization of intangible assets 38Delivering shareholder returns
Proposed final quarterly dividend of 8.0 cents1 per share, bringing total dividend for FY2021
to 32.0 cents1, an increase of 5% from FY2020
Operating cash flow per share Adj. Earnings per share Dividends per share (cents)
(cents) (cents)2
58.3
51.7
45.0 41.8
30.5 32.0
FY2020 FY2021 FY2020 FY2021 FY2020 FY2021
Note: All figures in $ millions unless otherwise stated and may be subject to rounding
1 Subjectto shareholders' approval at the forthcoming AGM on 7 October 2021.
2 Adjusted figures are non-SFRS(I) measures. Please refer to Section 8 of our financial results for reconciliations between the adjusted and their equivalent measures 39Appendix
- Sustainability
- Cross margining example
- Shareholder profile
- FY2021 Business Update
40Our vision: A leading capital and trading hub enabling sustainable
finance and credible transitions with end-to-end products,
solutions and ecosystem
Be a positive influence and foster collaboration and partnerships to provide data, tools,
In the Ecosystem resources and connecting stakeholders to drive industry discussions.
As a Company As a Business As a Regulator
Demonstrate leadership in Offer ESG solutions and support Guide market on sustainability-
sustainability e.g. SGX as a capitalizing on our assets, related disclosures and ensure
company will adopt TCFD from expertise and capabilities: that all investors are able to
FY2021 reporting, currently Equity access decision-relevant data.
setting science based targets for GSSS Bonds
GHG emissions. Indices (incl. Scientific Beta)
Commodities (incl. Baltic
Exchange, HeveaConnect)
New horizon projects (Climate
Impact X, new products)
41Growing sustainable and credible transition products and solutions
SGX FIRST: Future In Reshaping Sustainability Together
Fixed Income Equities Indices Commodities Equity derivatives
#1 Green Bond Listing Provision of ESG Strong thematic and Climate Impact X: Complete ESG Futures
Venue in Asia with Ratings of Listcos proprietary carbon exchange and shelf in regional
50% market share of Vice-Chair of TCFD & capabilities market place derivatives
Asian Issuances in the future guidance Greener commodities - SGX FTSE Emerging
last 12 months ESG screening and low contracts – 65% Iron ESG Index Futures
Top 5 Green Bonds WIP: Key reporting carbon/ESG/climate Ore futures, IMO- - SGX FTSE Emerging
marketplace globally indicators tool, further risk filters compliant Low Sulphur Asia ESG Index
with 8% share market productisation on - Scientific Beta ESG Fuel Oil (LSFO) futures Futures
share climate, green and & Climate Impact and Methanol - SGX FTSE Asia ex
ESG Consistent Index derivatives Japan ESG Index
WIP: Database and (CICI) RECs market offerings Futures
digitalization, support - iEdge SG ESG as part of the - SGX FTSE Blossom
for sustainability Leaders Index PowerSelect platform Japan Index Futures
linked & transition - iEdge SG ESG Baltic Exchange:
bonds Transparency Index Low Sulphur route
pricing supporting
IMO 2020 agenda
HeveaConnect
42Leading the way in sustainability to build a resilient future
• Our sustainability vision is to be a leading capital and trading hub enabling sustainable
finance and credible transitions with end-to-end products and solutions
• First Asian exchange to commit to 1.5°C-aligned science-based emission reduction targets
Corporates and investors are embarking on a
decarbonisation path1 … leading to new opportunities
11. Measure carbon footprint, and understand Debt financing GSS bonds2
key risks and opportunities Infrastructure/decarbonisation funds
Equity financing
22. Set emission reduction targets
Renewable energy EMC PowerSelect platform
certificates / Carbon
Climate Impact X
33. Reduce absolute emissions footprint credits
44. Neutralise unavoidable residual emissions Climate Impact Consistent Indices
Investment and risk Derivatives
management solutions
Exchange traded funds and other products
55. Compensate Year-on-Year (“YoY”)
Nasdaq Sustainable Bond Network
ESG Data solutions partnership
66. Disclose progress
ESG data portal
1 Credible decarbonisation and transition for corporates in Asia, SGX, 11 June 2021
2 Green, social and sustainability 43Cross margining efficiencies
Correlated products, margin netting efficiencies
Note:
32% + correlation
Long – Short
spread
Baltic Panamax
5TC futures
Margin
offset - correlation
Long – Long
spread
TSI Iron Ore
(62%) Futures
54% 31%
FTSE Margin USD/CNH Margin
Taiwan FX futures
Index Futures offset offset
Nikkei 225 FTSE Taiwan
Index Futures Index Futures
Note: Based on Margin Schedule as of 11 June 2021, full schedule available on SGX website 44Cross margining example
More exposure with the same amount of margins
US$100k US$100k
USD/CNH FTSE Taiwan Margins
Exposure FX futures Index Futures
Issuer Services ~US$1,900* ~US$5,000* ~US$6,900
Outright Margin
31% ~US$1,900* x 69% ~US$5,000* x 69%
~US$4,750
≈ US$1,300 ≈ US$3,450
Cross product
margin offset
~US$2,150 Margin savings
More efficient use of capital
Note: Based on exchange rate as of 11 June 2021
Based on Margin Schedule as of 11 June 2021, full schedule available on SGX website 45SGX shareholders’ profile
Broad shareholding base with domestic retail shareholders, as well as domestic and
international institutions
SGX Shareholder Composition1 Institutional Shareholding by Geography
SEL Holdings Others
23% 1%
Rest of Europe
17%
US
43%
United Kingdom
10%
Institutional
49%
Hong Kong
Retail 14%
27% Singapore
13%
Note: Numbers may be subject to rounding.
1 As
at 30 June 2021 46Enhancing the quality of cash equities market
Non-REITs listings in FY2021 displayed sustained post-IPO performance
Record year for ETFs, with AUM1 nearing S$10B; new China-themed and fixed income ETFs2
Meet diverse capital raising needs Broaden investment offering
Spectrum of industries Multi-asset
Different pathways to listing Multi-geography
FY2021 Mainboard Post-IPO Performance (S$M)3
ETFs AUM and Annual Turnover AUM by Asset Classes (%)
4,000 TOV: 148% TOV: 297% TOV: 20% TOV: 97% (S$B)
+65% 23% 32%
3,000
AUM 9.5
5.8
2,000
1,000 24% 6%
+22%
0 15%
Turnover 5.0
Nanofilm Aztech Global G.H.Y Media Credit Bureau 4.1 Equities ETFs
Asia REITs ETFs
(Technology) (Technology) (Media)
(Finance) Gold ETFs
Fixed Income ETFs - Others
Listing Market Cap Market Cap Gain FY2021 FY2020 Fixed Income ETFs - China
Expand participant groups
Market makers and active traders Singapore and regional investors
Provide new and enhanced post-trade services
Electronic Corporate Actions Securities Lending & Borrowing enhancement
1 Assets under management
2 New ETFs launched in FY21: ICBC CSOP FTSE Chinese Govt Bond Index ETF, Phillip SGD Money Market ETF, NikkoAM-ICBCSG China Bond ETF, Lion-OCBC Securities Hang Seng
TECH ETF 47
3 Up to 30 June 2021Becoming Asia’s largest integrated FX platform
Significant FX volume at US$75B average daily volume (ADV)1
Further invest in setting up a FX Electronic Communication Network (ECN) to scale our FX
franchise; targeted launch by end CY2021
SGX is largest and most liquid FX Expanding to OTC FX
derivatives exchange in Asia
Enhanced system workflow and new
functionalities for key client segments; new
❶ Exchange of choice innovative products
Best FX exchange in Asia at FX Market Awards 2020 Growth in client acquisition in APAC and EMEA
Best Exchange for FX at FX Markets eFX Awards 2020
Open interest and volume records
Leading provider of FX pricing and risk solutions
for sell-side institutions, and a multi-dealer
❷ Broadening product shelf platform for buyside clients
USD/SGD and KRW/USD full-sized futures
Global client and dealer franchisee
USD/INR quanto futures and options
Positive momentum with ADV > US$17B
USD/CNH mini futures (January - June 2021)
1 Based on ADV for SGX FX Futures, BidFX and MaxxTrader for the period January - June 2021 48Expanding solutions from Asia’s only global index provider
Bespoke index solutions and ESG products gathering momentum
Accelerate new product development through Scientific Beta’s research pedigree
Enabling scalable growth with IP-based offerings
Thematic indices
iEdge-CNBC China Growth Economy Index
SB assets under replication (AUR) > New Climate Impact Consistent
Indices add to existing ESG offerings SB Equity inflation indices
US$60 billion1 and growing
for multifactor indices and more…
Regional distribution
Unlock customer segments beyond asset owners to include ETF issuers, private banks and investment banks with SGX’s client footprint
Launch ETFs and structured products based on index solutions
Custom indices and calculations
Continued strong demand for 3rd party custom index calculation; supported by in-house calculation platform
1 As of June 2021
49Developing digital fixed income marketplace covering full lifecycle
Wide geographical diversity of bond listings
Develop end-to-end digital fixed income marketplace for enhanced workflow and customer
experience
FY2021 Bond Listing by Regions
A GLOBAL EXCHANGE FOR ASIAN BONDS
33% 26% 6% 5% Asia’s most global bond listing venue with over
85% of outstanding issuances originated from
China/ Hong Kong Southeast Asia
outside Singapore
Japan India
DIVERSIFIED ISSUER PROFILES
Issuers from more than 60 diverse industries
5% 3% 21% 1%
LEADING MARKET SHARE
~ 44% market share in G3 APAC market share
Latin America North America Rest of APAC EMEA
Digital primary workflows Global access to Global access to Digital post-trade
Asian ESG bond data Asian bonds
JV for digital asset primary East-West data partnership JV to enhance liquidity / Partnerships to strengthen
issuance, post trade and asset with Nasdaq Sustainable Bond execution in the Asian bond post-trade connectivity with
servicing Network covering Green, trading market via Trumid XT global CSDs / ICSDs for
Social, Sustainability fixed Singapore-based settlement
income securities
Note: All figures may be subject to rounding 50Thank You SGX Investor Relations Contact: Dominic Lim, Head of Investor Relations Joyce Koh, Associate Director, Investor Relations Tel: (65) 6236 5395, Email: dominic.lim@sgx.com Tel: (65) 6236 8356, Email: joyce.koh@sgx.com Singapore Exchange Beijing Hong Kong London Mumbai New York San Francisco Shanghai Tokyo Chicago sgx.com Forward Looking Statements This presentation may contain forward-looking statements that involve assumptions, risks and uncertainties. Statements in this presentation that are not historical facts are statements of future expectations with respect to the financial conditions, results of operations and businesses, and related plans and objectives. These forward-looking statements are based on SGX’s current intentions, plans, expectations, assumptions and views about future events and are subject to risks, uncertainties and other factors, many of which are outside SGX’s control. Because actual results, performance or events could differ materially from SGX’s current intentions, plans, expectations, views and assumptions about the future, such forward-looking statements are not, and should not be construed as a representation as to future performance of SGX. It should be noted that the actual performance of SGX may vary significantly from such statements. This presentation is being made available to certain authorised recipients for their general information only. While SGX and its affiliates have taken reasonable care to ensure the accuracy and completeness of the information provided in this presentation, they will not be liable for any loss or damage of any kind (whether direct, indirect or consequential losses or other economic loss of any kind) suffered due to any omission, error, inaccuracy, incompleteness, or otherwise, any reliance on such information. Neither SGX nor any of its affiliates shall be liable for the content of information provided by or quoted from third parties. Examples provided are for illustrative purposes only. The information in this presentation is subject to change without notice. Any recirculation, transmission or distribution of this presentation or any part thereof by any third party requires the prior written permission of SGX. SGX and its affiliates disclaim all responsibility and liability arising in connection with any unauthorised recirculation, transmission or distribution of this presentation or any part thereof. © Singapore Exchange Limited
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