WSE GROUP STRATEGY WSE.

2020
30 OCTOBER 2014

Disclaimer
This presentation is the property of Gieda Papierw Wartociowych w Warszawie S.A. (Warsaw Stock Exchange, WSE
or Company).

The information, opinions and statements contained in this presentation are not official projections, policies (including
dividend policy) or opinions of the Exchange. The data presented herein are valid as at the date of the document. All
efforts have been made to compile and present the data in this presentation; however, some data are derived from
external sources and have not been independently verified. No warranty or representation can be given that information
in this presentation is exhaustive or true.
WSE has no liability for any decisions made on the basis of any information or opinion in this presentation. The official
source of information about the Company are periodic and current reports published by the Exchange in compliance with
applicable provisions of Polish legislation.
This presentation is not an offer to buy or sell or a solicitation of an offer to buy or sell any securities or instruments. This
presentation is not an investment recommendation or an offer to provide any services.

Presentation of WSE Group strategy update

Pawe Tamborski, WSE President, CEO

Reasons for the Strategy Update

Slow-down on the cash market since 20121

1
400

-12%

80

58%

300
200

42%
157

116

43%

2012

2013

LTM

2011

80

300

60
2
1%

2011

23%

27%

32%

63

76

98

2012

2013

15
7%

6%

21

17

2012

2013

LTM 2

10
5
0

WSE Group as a confederation of companies with a large potential

4
of deeper operational and organisational integration

400

200

20

27

Growing share of PolPX in WSE Group revenue

100

40

2011

-27%
10%

50

20

121

25
15%

40

100

60

40%

121

100

Lower WSE revenue on the derivatives market

12 separate companies, including minority interests

in major assets (KDPW)
Potential of more effective use of shared resources (cost
synergies)

40
20

Potential integration of WSE Group offer along the value chain

(including post-trade services)

LTM 2

Revenue (PLN mn)

Share in revenue (%)

1 Trading

revenue from equities and equity-related instruments, debt instruments and other cash market instruments
(Last Twelve Months) until 30 September 2014
Source: WSE
2LTM

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Change in Revenue Structure

CAGR
2011/2013
Revenue (PLN mn)

3%

21%1

-4%
-2%
-2%

-27%

-13%

-8%

350

296
300
250
200

269
14
23

226
9

20
33

150

274

40

15

22

12

22

Commodity market (PolPX)

98

76

63

37
40

284

12
24

Cash market - debt

Listing

37

35

38

Information services & indices

27

21

17

Derivatives market

101

108

109

Cash market - equities

and equity-related instruments

100
50
0

115

143

10

10

2010

2011

2012

2013

LTM

Other revenue (financial market)

m
m

Lower revenue on the financial market offset by acquisition of PolPX in 2012

1

CAGR 2012-2013
Source: WSE

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Potential Better Integration in the Group

WSE

PolPX
(100.00%)

751
232

WSE InfoEngine
(100.00%)

IRK WSE Research

(100.00%)

WSE Services
(100.00%)

03

Instytut Analiz i Ratingu

(100.00%)

-- 4

KDPW
(33.33%)
KDPW_CCP
(100.00%)

Minority interests

13

WCCH
(100.00%)

Subsidiaries
XX

BondSpot
(92.96%)

193

1381
335

Centrum Giedowe
(24.79%)

16

Aquis Exchange
(30.00%)7

-- 6

In addition:
~10% of the Ukrainian
exchange (Innex)
1.3% of the Romanian exchange
(SIBEX)

Revenue 2013 (PLN mn)

1 Consolidated. 2

Including WCCH. 3 Member of the Group since August 2013. 4 Established in June 2014. 5 Including KDPW_CCP. 6 Approved to launch by the UK Financial Conduct Authority (FCA) in November 2013. 7
Share in economic and voting rights.

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Summary of the Dialogue with Clients

Investors are concerned about low liquidity
Local investors are increasingly active abroad

Necessary amendment of regulations governing securities lending and short selling

Expected launch of new instruments including energy and commodity derivatives
Necessary additional tax incentives for individual investors
Exchanges responsibility for capital market development, amendment of regulations and education
Large growth potential of Catalyst and need to simplify its structure
Strengthening investor confidence in NewConnect
Single banking licence necessary for banks to operate on the exchange

-7-

WSE Groups Mission

Our mission is to develop effective mechanisms of capital and commodity flows by providing
exchange and clearing services which are competitive in terms of quality and price and address
the needs and expectations of our clients: companies, investors, and brokers.
We support economic growth and build an investment culture. We develop an international
capital hub.
We ensure highest standards and safety of trading based world-class technologies.

As a team of professionals, we conduct an integrated, effective business geared to growth

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Main Directions of WSE.2020 Strategy

Client-centric

Offer matched to actual needs of the market

#1

Strengthened existing
key business segments

Development of existing segments through

activation and acquisition of issuers,
investors and brokers

#2

Focus on new segments

based on competitive advantages

Unlocking WSE Groups potential

of complementary services

#3

Effective use of resources

within WSE Group

Growth combined with

high profitability

Market of first choice for investors and issuers in Central and Eastern Europe
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Six Pillars of Growth

Liquid equity
market

Developed
corporate and
Treasury debt
market

Competitive
derivatives
market

Commodity
Comprehensive New business
market
offer of
segments based
attractive to
information
on key
different
services for
competitive
investor groups investors and
advantages
issuers

Market regulations and strategies competence centre

Operationally integrated, cost-efficient Group

Focus on sales
Effective communication and marketing

Shared support services

Effective corporate supervision

Market of first choice for investors and issuers in Central and Eastern Europe
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Key Initiatives
Equity market

Debt market

Active acquisition of new

issuers
Activation and acquisition of
investors including retail
investors
Acquisition of new Exchange
Members
Simplification and shortening
of procedures
Promotion of short selling and
securities lending
Unlocking the free float
Promotion of HVP Programme
Promotion of NC as a source of
new listings for MM
International promotion of
companies

Simplified architecture of the

corporate debt market
Simplified procedures and
tools on Catalyst
Focus on sales
Promotion of debt ratings
Growing activity of banks as
debt market participants

Derivatives market
Development of derivatives
based on bonds, interest rates,
electricity and natural gas

Activating the investor pool

Product development
including option strategies
based on new technologies

Commodity market
Development of the gas
market based on the potential
of energy companies and
financial investors
More attractive offer,
attracting active financial
investors to other market
segments

Information services
Building an integrated offer through consolidation of data from external sources
Implementation of new WSE Group information sales standards
Building a regional index offer and competence centre
Development of tailor-made indices for asset managers

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Analysis of the Business Potential in New Segments

Financial segment

Commodity segment

MTF/Aquis Exchange

Agricultural market

ETP/ETF

Coal market

FX market

Other energy carriers

Post-trade segment

Other services

Development of an
integrated offer to new
regulatory requirements

Technological support

IT services

Technology for the

derivatives market

Engage only in those segments where the Exchange has a competitive advantage
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Optimum Business Structure to Support

Integrated Competence Cent

WSE
Equity market
Derivatives market
Market information and indices segment

Commodity market

Energy market
Gas market
Other
commodity
markets

Post-trade services

Clearing and
settlement: cash,
commodity,
derivatives markets

Debt market

Treasury debt
market
Corporate debt
market

Shared services
centre
Shared services
for Group
members

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Key Aspirations in the Key Business Segments

Business segment

Equity market

Debt market

WSE Group ambition by 2020

# companies listed on Main Market > 550
Velocity ratio on Main Market > 50%
NewConnect important source of new listings for Main Market
NewConnect improved quality and attractiveness for investors
# non-Treasury issues > 1 thou.
Focus on issues > PLN 100 mn
Simplified structure of Catalyst and development of TBSP

Derivatives market

Developed market in electricity and gas derivatives

Active market in interest rate/debt derivatives
New derivatives depending only on clients needs

Commodity market

Financial market in electricity > 60% of domestic consumption

Financial market in gas > 15% of liberalised gas market

Market information segment

New business segments
Operating efficiency

One offer for all sources of data across the Group

Development of index products
Manufacture of tailored-made information products
Post-trade services: integrated offer to address changing needs for
clearing and risk management
Under consideration: coal market, agricultural market, ETP
As of 2017, current operating cost base down by ~PLN 20 mn
C/I ratio < 0.50
Organisational and operational integration of the Group
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WSE Groups Ambition: Balance Sheet Growth,

Maintained Profitability, Maximised Return for Shareholders
Consolidated

2013

Ambition by 2020

Revenue
(PLN mn)

284

CAGR: 7% p.a.

EBITDA
(PLN mn)

144

Double EBITDA

Cost/Income ratio

0.59

< 0.50

Dividend payout
ratio

44%

> 60%1

1 Based

on consolidated profit attributable to the shareholders of the parent entity adjusted for share of profit of associates

(Payment from 2014 profit PLN 2.4 gross per

share and from 2015 profit PLN 2.6 gross per
share)

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Reduction of Current Cost Base by ~PLN 20 mn

Efficiency initiatives will help to reduce the
current cost base by ~ PLN 20 mn

Most savings already in 2016

Consolidated (excl. cost of optimisation), PLN mn

Recurrent cost savings, consolidated, PLN mn

190
180

20
175

19

19

170
160
150
140
130

17

157

15

10

10

5
20
10
0

0
WSE Group
cost base LTM1

Savings: property, Optimised cost base

external services,
IT, other

2015

2016

2017

Cost-efficiency programme scheaduled for the years 2015 2017

1 LTM

(Last Twelve Months) until 30 September 2014

Source: WSE

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Building Socially Responsible Stakeholder Value

Employees

Market

Fostering organisational culture based

on values and effective internal
communication

Creating and promoting best practice of

corporate governance

Investing in employee development

Supporting development of the capital

market in continuous extensive dialogue
with market participants

Education

Environment

Promoting awareness of the general

public about the financial markets

Reducing WSEs direct environmental

impact

Education for responsible investing

WSEs indirect environmental impact:

encouraging positive behaviour of WSElisted companies and investors

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Foundations of WSE as a Public Company

Communication with investors, shareholders and stakeholders (institutional and individual): open,
timely, systematic, reliable.
Continuous building of confidence in the Exchange as the leading institution of the capital market
and a public company.
Compliance with high corporate governance standards, especially Best Practice for WSE-Listed
Companies.
Attractive dividend policy compared to the exchange sector.
Responsible implementation of the business strategy in collaboration with the key shareholder
groups.

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Events / Contact
WSE Investor Relations
tel. +48 22 537 72 50
ir@gpw.pl
www.gpw.pl/relacje_inwestorskie

Warsaw Stock Exchange

ul. Ksica 4, 00-498 Warsaw, Poland
tel. +48 22 628 32 32

gpw@gpw.pl
www.gpw.pl
Disclaimer
This presentation has been prepared by Gieda Papierw Wartociowych w Warszawie S.A. (Warsaw Stock Exchange,
WSE or Company) for its shareholders, analysts, and other contractors. This presentation has been prepared solely for
information and is not an offer to buy or sell or a solicitation of an offer to buy or sell any securities or instruments. This
presentation is not an investment recommendation or an offer to provide any services.
All efforts have been made to present the data in this presentation; however, some data are derived from external sources
and have not been independently verified. No warranty or representation can be given that information in this presentation
is exhaustive or true.
WSE has no liability for any decisions made on the basis of any information or opinion in this presentation. WSE informs that
in order to obtain information about the Company reference should be made to periodic and current reports published in
compliance with applicable provisions of Polish legislation.

-19-