NZX Annual Meeting 2024 – speeches and presentation

1

NZX – Annual Shareholders’ Meeting
18 April 2024
[SLIDE: 2024 Annual Shareholders’ Meeting]

Sara Wheeler

[SLIDE: Today’s Meeting]

[Housekeeping: Health and safety, emergency/evacuation and
exits/bathroom directions]

[Agenda for the meeting]

Kia ora, good morning and welcome to NZX’s 2024 Annual
Shareholder Meeting.
I am Sara Wheeler, the General Counsel & Company Secretary at NZX
Before we begin, I will quickly go through some housekeeping.
▪ Toilets are located behind you, on the left when you came in
[point out toilets]
▪ In the event of an emergency, please follow the green signs or
follow me or one of our team, who will help direct you outside.
In terms of agenda: first, we will hear from NZX’s Chair John
McMahon who will give a welcome and strategic overview.
Secondly, we move to NZX CEO, Mark Peterson who will provide a
report on financial and business performance.
Finally, John will return and will make some comments on the
performance of the business for Q1 2024 and some comments on
our outlook for the remainder of the year
We will then move to the formal part of the meeting.
We have four resolutions today:

2

• That the Board be authorised to determine the auditor’s fees
and expenses for the 2024 financial year;
• That John McMahon (appointed by the Board as a Director with
effect from 10 May 2023), who retires and is eligible for
election, be elected as a director of NZX Limited
• That Lindsay Wright, who retires and is eligible for re-election,
be re-elected as a director of NZX Limited;
• And approval of director fees, to take effect from 1 July 2024.
[SLIDE: Voting & Questions]

We will attend to voting and then we will move to questions.
If you are intending to ask a question, please signal to us and we will
bring a microphone to you.
Please note Shareholders will be able to cast their vote online using
the voting tab, where you will need to enter you CSN/Holder number
for validation.
Please refer to the virtual meeting online portal guide or contact the
team at Link on 0800 200 220 if you require any assistance.
Following the meeting we invite you to stay for refreshments.
I will now hand over to John McMahon.
....................................................
John McMahon
[SLIDE: Welcome]

Kia ora, good morning, my name is John McMahon and as Chair of
NZX I am delighted to welcome you – whether in-person or online –
today to NZX’s 2024 Annual Shareholders’ Meeting.
This meeting is being held as a hybrid ASM.

3

Shareholders participating online will be able to ask questions, and
you can submit these at any time using the tab at the bottom of your
screen.
I encourage shareholders who have questions relating to the
business of the meeting, to send their questions through as soon as
possible.
Please note that only shareholders, proxy holders or shareholder
company representatives may vote.
For those of you in the room, our directors and management team
always enjoy these opportunities to chat with you, so please stay on
after today’s meeting for refreshments.
I am pleased to confirm that we have a quorum and therefore
declare the 2023 Annual Shareholders’ Meeting of NZX Limited open.
[SLIDE: Board Introduction]

I am pleased to introduce to you the NZX Board: Deputy Chair Dame
Paula Rebstock, Elaine Campbell, Peter Jessup, Lindsay Wright, Frank
Aldridge and Rachel Walsh.

For the first time in its 157-year history, the NZX Board has a majority
(57%) female representation.

[SLIDE: Director changes]
Dame Paula Rebstock was appointed onto the NZX Board effective 1
February 2023. She was appointed Deputy Chair on 25 August last
year.
That recognises Dame Paula's considerable governance experience
and the key role she is playing in helping to improve New Zealand's
economic productivity.
Rob Hamilton resigned from the Board effective 20 March 2023.

4

I was re-appointed onto the NZX Board effective 10 May 2023.
James Miller retired as Chair and from the Board effective 17 May
2023.
James served nearly 13 years as an NZX director and Chair through a
time of significant change and development for the Company and
exchange.
He oversaw the stabilisation and modernisation of the NZX Group
business, development of a long-term strategic growth plan and the
development of strategic partnerships with Nasdaq, SGX and EEX.
We thank James for his significant contribution to NZX and to New
Zealand’s capital markets.
Following James standing down, I was appointed NZX Chair effective
17 May 2023.
And finally, Sarah Miller completed her tenure on the NZX Board on
31 December as our fifth Future Director.
Also sitting with the Board are our CEO Mark Peterson and Company
Secretary Sara Wheeler and we have most of the Senior Leadership
Team in the audience here at the meeting.
NZX's auditor, KPMG, is represented here today by Brent Manning.
[SLIDE: Strategic overview: Growing, Connecting Adding Value]

I am pleased to outline the continuing progress NZX is making in
delivering to its strategy.
NZX is well positioned for the future through the growth strategy we
have been implementing since 2018.
This has involved focusing on product additions to our core markets
business, plus refinement and alignment around regulation, pricing
and market infrastructure, along with significant investment to
expand our funds management and funds administration businesses.

5

Global market conditions remained challenging in 2023. There has
been an absence of IPOs around the world and cash market liquidity
has come off 10-15% across European, North American and Asian
markets.
Despite the difficult economic conditions globally, the New Zealand
market continued to deliver capital raising capacity to meet our
issuers’ debt and equity requirements.
Alongside this, the diversity of NZX’s product offering and earnings
base meant the Company continued to make steady progress on our
long-term strategy of expanding our product range in capital markets
and driving scale and operating leverage across Smartshares, our
funds manager, and NZX Wealth Technologies, our custodial
investment administration platform.
NZX Chief Executive Mark Peterson will shortly outline the 2023
financial results and provide further insight into the performance of
the business.
[SLIDE: Leadership Continuity ]

Mark was appointed NZX Chief Executive in 2017 with an initial
employment term of five years and an option to extend for a further
two years.
That option was exercised in December 2020 extending the
employment term to April 2024. In August 2023 the NZX Board
agreed to an open-term agreement.
Mark’s new employment agreement is about ensuring stability of
leadership and maintaining momentum across our business.
In setting the expectations of Mark, the Board has taken into account
shareholder interest and medium-term performance objectives.
Greater transparency of the Chief Executive’s remuneration was
provided in the 2023 Annual Report.

6

The 2023 Remuneration report format was guided by output from
the Corporate Governance Institute, including input from the New
Zealand Shareholders Association.
The NZX Group has a clear work programme in front of it that
requires focused and proven leadership.
This includes successful delivery of initiatives and products under
NZX’s capital markets growth strategy – NZX20 Index Futures and
NZX Dark – and more size, scale and efficiencies in our clearing and
settlement, Smartshares and NZX Wealth Technologies businesses.
I’ll now hand over to our CEO, Mark to provide an update on
financial and business performance.
I’ll then return and outline our 2024 key performance indicators,
outlook for the year and resolutions.
.............................................
Mark Peterson
Kia ora koutou katoa.
Good morning, ladies and gentlemen and thank you for joining us.
My name is Mark Peterson, and I am the Chief Executive of NZX.
Can I welcome all shareholders with us today and those attending
online.
[SLIDE: Performance & Results]

In 2023 NZX produced a solid operating financial result in what was
another challenging year for global markets.
Elevated inflation and interest rates remained and that continued to
impact our equity markets activity alongside creating movements in
asset prices over the year which flowed through to Smartshares and
NZX Wealth Technologies.

7

NZX’s trading and clearing volumes through the market were down
9.7% – the lowest level of activity in nine years. Value traded is a key
earnings driver for the Company, so we did face a considerable
earnings headwind in 2023.
The key determinant to activity increasing is the market believing
inflation is under control, and more generally that a stronger
economic outlook for New Zealand is on the cards.
We believe the equity market downturn had more than a $4 million
negative impact to NZX revenues and there was little cost associated
with that revenue, so the decline dropped through to constraining
our operating earnings growth. As markets recover, we would
expect these revenues to return, again with minimal associated cost.
The overall trading patterns we are seeing are not hugely different to
similar markets around the world. Approximately half of the 61
World Federation of Exchanges members had a reduction in traded
value of 15% or more in 2023.
Despite these difficult conditions, NZX lifted operating earnings
(EBITDA), highlighting the resilience of the Company through market
cycles.
Normalised operating earnings, excluding acquisition, integration
and restructuring costs were $40.1m – up 9.6%% on last year.
If we include acquisition, integration and restructuring costs,
reported operating earnings were $38.9m – up 10.9%.
Since the first year of implementing our growth strategy in 2018,
underlying operating earnings (that is excluding any one-off
acquisition, integration or restructuring costs) have increased by
47%.

8

Net profit after tax was $13.6m – down 4.3% largely due to increased
interest and amortisation costs. I will talk about more about costs
shortly.
Group revenues lifted to $108.4 million - up $12.7 million or 13.2%
on 2022. Breaking this down at a high level:
• Capital markets revenues were 1.2% lower than last year.
Several ‘almost offsetting’ elements to call out here – trading
and clearing revenues were 11% lower, and we had slightly
lower data audit and energy consulting revenues off the highs
of 2022. However, we had good growth in Dairy Derivatives,
indices and data subscriptions, and license revenues.

• Smartshares revenues were substantially up almost 51% as we
incorporated the ASB Superannuation Master Trust and
QuayStreet acquisitions. Revenues in the core Smartshares
business also saw a lift of 24.8%.

• NZX Wealth Technologies saw funds under administration-
based revenue growth of 21%.

[SLIDE: Capital Markets activity]
$14.2 billion of capital was listed or raised on market over the year,
which was softer than the previous four years.
The environment was more conducive to debt capital raisings with
$6.8 billion of new debt issuance raised through the market. This was
similar to 2022 levels.
Secondary capital raised totalled $7.4 billion and also favoured the
debt and fund markets, over equity.

9

ESG and green designated bonds continue to be in favour by issuers
and now account for more than 29% of the total debt market
issuance.
Secondary equity raisings were strong in the first half with the
Ryman and Infratil raisings. This didn’t follow through into the
second half and market conditions made it difficult for IPO activity,
which has resulted in postponements until conditions improve.
We are not alone – similar conditions have been felt across most
developed public markets around the world.
The Origination team has continued its work seeking out new
company listing prospects which remains at healthy levels, and they
are also supporting our issuers telling their story to the wider market
through our investor events, podcasts, spotlight videos and
educational workshops.
Our audience for this information continues to grow.
NZX and friends from the capital markets community are engaging
with Government to encourage settings that we expect to further
facilitate growth in public markets.
We have been encouraged the Minister of Commerce who has said
the Government has capital market settings on its agenda for the
second half of 2024.
NZX remains confident that as economic conditions improve, equity
market activity levels should increase.
[SLIDE: Market Development]
Our strategy to grow capital market activity, includes developing and
launching new products such as our anonymous midpoint trading
venue, NZX Dark, which will be ready for participants to connect to in
May.

10

We also continued our efforts to launch our equities futures market,
with an NZX20 index futures product, which is intended for later in
the year or early next year.
We are also keen to increase scale in our operations and settlement
capability.
Depository assets in custody grew to $7.9 billion – up 25.5% in the
last year.
We are always looking for more participants to join our depository
and take advantage of improved market efficiency. In this vein, we
were pleased to welcome Trustees Executors as a Depository
Participant.
[Slide: Information Services]
Information Services continued its steady growth trajectory.
This revenue line has had a compound average growth rate of 7.5%
since 2018.
Subscriptions and license revenues grew 7.1% in 2023, reflecting the
continued growth in data usage.
However, we are starting to see a slowdown in audit and back dated
license revenues as these are now being captured in the recurring
revenue lines.
We have invested in our data and website infrastructure, which puts
all our client-facing technologies into the cloud and now gives us the
opportunity to create a wider range of data products and deliver
these to the market via a number of modern technology delivery
mechanisms.
This will assist in the continuation of the growth of our Information
Services.
[Slide: Dairy]

11

Turning to Dairy: our partnership with SGX continues its strong levels
of growth.
Lots traded were up a further 35% last year – a new record. And
revenues totalled $3.6 million for the year, which is up 88% on 2022.
Market price volatility and greater number of end users using the
market is driving an increase in lots traded.
A favourable exchange rate and increased levels of margin held are
also driving the revenue growth.
GlobalDairyTrade is beginning to see the benefits of the ownership
change with new potential sellers showing interest in joining the
platform.
The planned GDT strategic initiatives are also progressing well.
Slide: Smartshares
Smartshares continues its strong growth track. Despite some global
asset price volatility, funds under management as at 31 December
was $11 billion – up nearly 33% from 31 Dec 2022.
This is through a combination of positive cashflows and market
returns, and the acquired QuayStreet Asset Management business
coming into the Smartshares fold.
Revenues lifted 51% to almost $37 million.
In August we delivered the integration of the ASB Superannuation
Master Trust business onto the Smartshares platform and have
released significant synergies, which is now coming through the
revenue line.
To achieve this, we have had to bring in-house some operational
support capability. I will explain this more fully, in a moment.

12

Similarly, we have already integrated elements of the QuayStreet
business into Smartshares with more to come, and the distribution
opportunity with Craigs Investment Partners is beginning to bear
fruit.
Anna Scott joined the team as Chief Executive and is driving a focus
of balancing the growth opportunities we have, whilst increasing our
efforts to improve our operational efficiency. We remain focused on
hitting our goal of $15-$20 billion of FUM by the end of 2027.
Slide: NZX Wealth Technologies
The biggest change to the NZX Wealth Technologies business over
the period, besides the three client transitions that we achieved, is
the winning of 12 new clients in 2023.
This means our team has a full client transition programme in 2024.
Our product, reputation and team are seen as strong and reliable by
the market, and the client transition experience we have been able
to provide has been positive.
We continue to field new client enquires.
The key challenge in front of the team is transitioning all the new
business opportunities we have in front of us and coordinating the
transitions around our clients’ timing constraints.
Well led by Lisa Turnbull, the team is up for that challenge.
NZX Wealth Technologies’ funds under administration has grown
from $2 billion in 2018 to $11.5 billion at the end of 2023.
And, as of the end of March this year, that figure now stands at $13.8
billion.
We have more confidence than ever in achieving our target funds
under administration levels – and we remain confident about
achieving cashflow breakeven by the end of 2024.

13

Slide: Operating Costs
Cost control remains a priority. However, in 2023 our headline
operating expenses increased by 15.5%.
This figure, read in the absence of understanding the various
component parts, creates a misconception of our cost base change.
To explain this further, just under half of this change, related to the
integration of the ASB Superannuation Master Trust into
Smartshares.
Offsetting this, the increase had a positive impact on revenue.
More specifically, prior to the completion of the integration of the
ASB Superannuation Master Trust business, Smartshares paid ASB for
operational support of the business and this cost came out of the
revenue line.
The integration plan had Smartshares hire the operational support
staff directly, which now appears in our cost line.
When integration occurred, the revenue drag disappeared.
The overall result was a $1.2 million annualised increase to our
operating earnings.
We will have something similar occur when the final steps of the
QuayStreet integration are completed.
The remainder of the Group’s cost changes relate largely to inflation-
driven employee, compliance and technology costs.
In addition, over the last 18 months, we have had dedicated effort to
reviewing headcount, managing project priorities and rationalising
supplier contracts across the NZX Group.
We have prioritised key projects that will deliver to our strategy, put
on hold other projects, and negotiated supplier savings
opportunities. We continue to focus on this.

14

Overall, across the NZX Group, we don't expect any major cost
surprises in 2024 and, in general cost changes should be largely
inflationary driven.
We also have further synergy and operational efficiency
opportunities in Smartshares which we are focused on delivering.
[SLIDE Depreciation & Amortisation]
Overall NZX’s three largest costs are:
• Employees, which are 60% of operating costs
• Technology spend is 28% of operating costs; and
• Amortisation totals $13.3m per annum

Amortisation is a non-cash charge. The amortisation of the acquired
funds management businesses accounts for around 23% of NZX’s
total amortisation charge.
Amortisation of the capitalised NZX Wealth Technologies costs
accounts for around 48% of the total amortisation charge.
NZX Wealth Technologies capitalises the staff cost and a portion of
its overhead relating to client transitions. This has and continues to
result in a meaningful capital investment into the business, to reach
the stage where it is now nearing cash flow break even.
This has resulted in a significant rise in the amortisation charge to
the Income Statement which has acted as a constraint to bottom line
growth in net profit compared to growth in Operating Earnings
(EBITDA).
The investment into NZX Wealth Technologies and the associated
amortisation over time is the “cost” of building this business. It is an
investment for the future we believe will have significant earnings
and NPAT upside over time.

15

It is also worth noting the amortisation of the investment into NZX
Wealth Technologies is over five years, and the typical life of a client
is closer to 10-12 years.
This will mean that whilst we are running an amortisation “bubble”
at present, as the business matures – and the investment in client
transition efforts start to tail off – there will be a significant positive
impact to NPAT.
As I previously noted, NZX Wealth Technologies is expected to be
cash flow breakeven by the end of the year and a contributor to
group cashflow growth thereafter.
As an aside, we have recently completed our New Zealand and
Australia investor relations roadshows. We met with more than 20
current and prospective investors.
We felt the meetings were positive. The general sentiment was that
our capital markets business is well set for a lower inflation, lower
interest rate environment. Investors also see the growth
opportunities ahead for Smartshares and NZX Wealth Technologies.
We are pleased to see the higher trading activity in NZX stock that
has occurred post those meetings.
Slide: Operating responsibly
In 2023 NZX achieved net carbon zero certification from Toitū
Envirocare for the third year in a row.
Under the new mandatory climate-related disclosures framework,
NZX, as a climate-reporting entity, has reported our climate change
obligations regarding governance, strategy, risk management, and
metrics and targets.
In 2023 we also undertook a stakeholder and materiality assessment
to grow and deepen our stakeholder understanding and

16

relationships, support and further inform NZX strategy execution,
and guide future ESG prioritisation, targets, and reporting.
This will assist with implementation plans in 2024.
As our stakeholders told us, public markets will continue to play an
important role in facilitating the flow of capital towards
decarbonising New Zealand’s economy.
Slide: Our people
We continue to take seriously the operating culture we have at NZX.
This remains a priority since I became Chief Executive.
Our people continue to show huge commitment to the business and
the opportunities we have in front of us.
Staff turnover continues to reduce as the employment environment
changes.
Operations and Technology teams continue to be accurate in day-to-
day activities, and system uptime was again 100% for the second
year in a row.
Our Risk Management function is maturing nicely under the
leadership of our Chief Risk Officer Ronnie Redpath.
The Financial Markets Authority’s annual NZX market operator
obligations review again showed positive progress across all areas.
Staff engagement continues to be strong, and we recently had a
record staff engagement score. We also have a balanced mix of age,
tenure and gender diversity.
Our gender pay gap is 16.6%, which is higher than we would like but
lower than other New Zealand financial institutions.
Our overall gap is primarily at the senior and manager levels and is
driven purely from not having enough females in those leadership
positions.

17

Our recruitment and promotional efforts are focused on improving
this situation, balanced with ensuring we hire the best skills in those
roles.
Finally, before I hand back to John, I want to thank you, our
shareholders for your continued support and confidence in NZX.
Thank you.
..........................................................................
John McMahon
SLIDE: Delivering to our growth strategy
Thanks Mark.
As Mark has highlighted, NZX is now a more integrated and resilient
financial markets infrastructure and services business with a
platform for strong growth prospects. This will create further value
to our shareholders.
Growing markets is fundamental to what we do – helping businesses
get access to capital and providing investors opportunities to grow
their wealth via investing in equity, debt or fund securities.
Our ambition is to round out our capital markets product offering in
areas such as equity derivatives and carbon markets which will
broaden our earnings base, plus add scale to our settlement and
clearing activities.
We are globalising our footprint across a number of our businesses –
as evidenced by the partnerships with Singapore Exchange for dairy
derivatives, the European Energy Exchange for carbon auctions, and
Fonterra and EEX in GlobalDairyTrade. Global partnerships will help
us achieve scale in these businesses.
In addition, most exchanges have a level of diversification, and in our
case, for the Smartshares and NZX Wealth Technologies businesses,

18

there are long-term structural market tailwinds that support strong
growth in both.
With Smartshares we intend to create further products to ensure
investors can use the NZX markets to get exposures globally.
Our group strategy to 2027 is clear: round out our product offering in
capital markets in line with other exchanges internationally and drive
scale and operating leverage across the broader business to increase
our revenue base.
Slide: Dividends
The NZX Board declared a final dividend of 3.1 cents per share that
was paid on 28 March 2024, contributing to a FY2023 dividend of 6.1
cents per share fully imputed.
NZX’s dividend policy is to pay 80% to 110% of adjusted net profit
after tax over time – subject to regulatory capital requirements.
The increase in amortisation relating to investment in NZX Wealth
Technologies has been a significant factor in constraining NPAT.
Furthermore, global economic conditions mean market trading
volumes and capital raisings are running below long-term averages.
Both these factors have constrained NPAT and therefore our ability
to grow the dividend to date.
While the current dividend is above the payout ratio, the Board has
an expectation that, subject to market risks – such as trading
volumes, capital raised and the level of the S&P/NZX 50 index) – that
earnings growth will not only support future dividends but will allow
for future dividend growth.
Current free cash flows, after the ongoing investment in Wealth
Technologies, remain positive and support the dividend NZX has paid
out.
SLIDE: 2024 KPIs

19

In the year ahead, our organisational priorities, or key performance
indicators are to:
Deliver earnings guidance.
Deliver initiatives to grow core Capital Markets, such as NZX Dark
and the NZX20 Index Futures.
For NZX Wealth Technologies to be cash flow breakeven by end
2024.
More scale and efficiency in our Settlement and Clearing business.
Deliver operating efficiencies across Smartshares and its acquisitions
and invest in technology platform for improved scalability
We must also meet expectations for:
• Risk & Compliance
• Staff culture and engagement
• ESG metrics, including climate and gender pay gap.
SLIDE: Director fees
When increases to the director remuneration fee pool were sought
in 2022, NZX signalled its intention to return to its shareholders over
the following two years (2023 and 2024) to seek further adjustments
to bring NZX Director fees in line with the market median. That’s
what we are doing today.
Prior to this, NZX Director fees had not been independently reviewed
since 2001.
NZX has subsequently received a refreshed independent director fee
benchmarking report from PwC, and the results of this process are
outlined in a summary report available on our website.

20

PwC’s report identified the following:
• The market median fee pool across the agree comparator
group of 20 NZX-listed companies was $725,000. The NZX
current fee pool of $564,000 has a comparative ratio of 78% of
the market median.
• The market median Board Chair fee across the comparator
group is $166,000, while that for non-executive Directors (NED)
is $88,200. The NZX Board Chair and NED fees each currently
trail the market median observation, at 78% and 74%
respectively.
• 21 of the 22 (95%) comparator companies pay a committee fee
to the Chair of their Audit and Risk Committee (median
$15,300) and 17 out of 22 (77%) pay a fee to the Chair of their
Remuneration Committee (median $12,000)..
To attract and retain talent for the Board and ensure strong
governance of New Zealand’s stock exchange, the Board considers
that it is essential that NZX pays market rates for fees.
Based on the independent benchmarking information undertaken in
2024, and subject to shareholder approval, the Board proposes to
increase Director fees to $88,000, with $166,000 payable to the Chair
(an increase of $23,000 or ~35.4% for Directors and an increase of
$36,000 or ~27.7% for the Chair).
This would bring both Director and Board Chair fees in line with the
market median set out in PwC’s benchmarking report.
In addition, the Chair of the Audit & Risk Committee would receive a
fee of $15,000 and the Chairs of other committees (excluding the
Nominations Committee) would receive a fee of $10,000.
Currently, the Chairs of NZX’s committees receive no additional fees.
The crossover Director of both NZX and NZX Regulation Limited (NZ
RegCo), will be paid Director fees solely by NZX, including continuing

21

an additional $20,000 component for their role on the board of NZX
RegCo.
The non-executive Director who sits on the board of NZX Wealth
Technologies Limited will continue to be paid an annual fee of
$20,000.
These fees were previously paid out of the director fee pool.
Previously fees have been approved on the basis of a director fee
pool.
This resolution will instead approve the fee payment based on the
Director’s role.
The resolution will result in an increase in the level of Directors’ fees
to $779,000 (an increase of 38.1%).
This would bring the total approved fees above the market median
of $725,000. This difference against market median is the result of
several factors:
• the Board has a greater number of directors than the median
number of directors on the comparator boards in the PwC
report (seven versus six). The Board considers the greater
number of directors is appropriate given the broad and
specialised range of domain knowledge required to operate the
various businesses within NZX;
• reflecting that range of businesses within NZX, there are
additional specialised committees for Technology and Clearing
House; and,
• inclusion of a crossover Director for NZ RegCo and a non-
executive Director for NZX Wealth Technologies. On a per
Director basis for NZX, the fees proposed are in line with
median amounts in PwC’s report. It remains the policy for at
least 50% of the increase from each of the FY2023 Directors’
fees to be applied towards on-market acquisition of NZX shares

22

each year, subject to legal requirements. Accordingly, 50% of
any increase this year will used to buy shares.
I ask for your support for this resolution today.

SLIDE: Outlook for 2024
We are off to a good start in 2024. Our markets business is
performing in line with our key metrics. Soft market activity over Q1
2024 has been offset by cost management and one-off revenue from
an index audit.
This has resulted in capital markets operating earnings slightly ahead
of Q1 2023.
In our Funds Management business: we are seeing the benefits of
FUM growth and synergies of the QuayStreet and Super Master Trust
acquisitions.

And Wealth Tech continues to track against forecast increase in
annual reoccurring revenue as new clients transition onto the
platform.


Overall, first quarter revenue reached $28.8 million – up 14.8% -
noting this does include the one-off audit fee item of around $0.9
million.

And operating earnings, including the one-off audit fee, was $11.4
million – which is up 23.5% on the same time last year.
With the growth activities NZX has underway across the business,
NZX today has reaffirmed the business should deliver operating

23

earnings (excluding integration and restructuring costs) that will be
comfortably in the range of $40 million to $44.5 million.
This statement and our current operating earnings guidance range is
always subject to the usual market risks and outcomes.
[SLIDE: Resolutions]
We now move on to the formal business of the day.
All items of business are ordinary resolutions and are required to be
passed by a simple majority – being more than 50% – of the eligible
votes cast.
The resolutions that we will be voting on today are as follows:
Resolution 1: Auditor’s fees
Resolution 2: Re-election of John McMahon as a director of NZX
Resolution 3: Re-election of Lindsay Wright as a director of NZX
Resolution 4: Approval of an updated director fee pool
As stated in the Voting/Proxy Form, all voting at today’s meeting will
be by way of poll and, accordingly, in my capacity as Chair I require
that a poll be held for each of the resolutions.
[SLIDE: Shareholders voting online]
Shareholders on Link’s virtual meeting platform will be able to cast
their vote using the electronic voting card received when online
registration is validated – voting will be open until the close of the
meeting. Please refer to the virtual meeting portal guide or use the
helpline 0800 200 220.
To vote, you will need to click “Get Voting Card” within the online
meeting platform.

24

You will be asked to enter your Shareholder or Proxy Number to
validate. Please then mark your voting card in the way you wish to
vote by clicking “FOR”, “AGAINST” or "ABSTAIN" on the voting card.
Once you have made your selection please click “Submit Vote” on
the bottom of the card to lodge your vote. Voting will remain open
until five minutes after the conclusion of the meeting and the results
of the vote will be announced via a market announcement on
nzx.com.
Your Board supports each of these resolutions and intends to vote
undirected proxies in favour of these 4 resolutions.
I will now introduce each of the resolutions in turn for discussion.
[SLIDE: Resolution 1 - Auditor]
Resolution one relates to the Board being authorised to fix the fees
and expenses of KPMG as the company’s auditor for the 2024
financial year. KPMG is the current auditor of NZX.
I move, as an ordinary resolution, that the Board be authorised to
determine the auditor’s fees and expenses for the 2024 financial
year. Are there any questions from the floor on this resolution?
Are there any questions from shareholders online?
[IF NO QUESTIONS] – There are no questions on this matter from
shareholders joining online.
There appears to be no [further] discussion.
[SLIDE: Resolution 2 – John McMahon]
Resolution three relates to the re-election of myself as a director. I
will hand to Dame Paula Rebstock to Chair this part of the meeting.
DAME PAULA REBSTOCK

25

John McMahon was appointed a director of NZX in May 2023. John
retires in accordance with the Listing Rules and the Company’s
constitution and offers himself for election.
The Board recommends John McMahon to you as a director of NZX
and unanimously supports his re-election.
Being eligible, John has confirmed he is available for election. I invite
John to address the meeting on his proposed election.
JOHN MCMAHON
[Address from John McMahon]
DAME PAULA REBSTOCK
Thank you, John. I move, as an ordinary resolution, that John
McMahon be elected as a director. Are there any questions from the
floor on this resolution?
Are there any questions from shareholders online?
[IF NO QUESTIONS] – There are no questions on this matter from
shareholders joining online.
There appears to be no [further] discussion, so I will hand the
meeting back to John McMahon.
SLIDE: Resolution 3 – Lindsay Wright
Resolution three relates to the re-election of Lindsay Wright.
Lindsay Wright was appointed a director of NZX in February 2019.
Lindsay retires by rotation in accordance with the Listing Rules and
offers herself for re-election.
The Board recommends Lindsay Wright to you as a director of NZX
and unanimously supports her re-election.
Being eligible, Lindsay has confirmed she is available for re-election. I
invite Lindsay to address the meeting on her proposed re-election.

26

LINDSAY WRIGHT
[Address from Lindsay Wright]
Thank you, Lindsay. I move, as an ordinary resolution, that Lindsay
Wright be re-elected as a director. Are there any questions from the
floor on this resolution?
Are there any questions from shareholders online?
[IF NO QUESTIONS] – There are no questions on this matter from
shareholders joining online.
There appears to be no [further] discussion

[SLIDE: Resolution 4: Director Fees]

Resolution four seeks approval for the annual remuneration payable
to each director of NZX Limited being set at $88,000, the Chair’s
annual remuneration set at $166,000, with the Chair of the Audit &
Risk Committee to receive an additional annual fee of $15,000, the
Chairs of each of the Clearing, Human Resources & Remuneration
and Technology Committees to receive an additional annual fee of
$10,000, for any NZX Directors who are appointed to the board of
NZX Regulation Limited to receive an additional annual fee of
$20,000 and for any non-executive Directors appointed to the board
of NZX Wealth Technologies Limited to receive an annual fee of
$20,000, all with effect from 1 July 2024.
As noted earlier in my presentation, when increases to the director
remuneration fee pool were sought in 2022, NZX signalled its
intention to return to its shareholders over the following two years
(2023 and 2024) to seek further adjustments to bring NZX Director
fees in line with the market median. That’s what we are doing today.

27

NZX has subsequently received a refreshed independent director fee
benchmarking report from PwC, and the results of this process are
outlined in a summary report available on our website.
• As I mentioned earlier, attract and retain talent for the Board
and ensure strong governance of New Zealand’s stock
exchange, the Board considers that it is essential that NZX pays
market rates
• The Board unanimously supports this proposed resolution. I
note that voting restrictions apply to this resolution.
I move, as an ordinary resolution, that the annual remuneration
payable to each director of NZX Limited is set at $88,000, the Chair’s
annual remuneration is set at $166,000, with the Chair of the Audit &
Risk Committee to receive an additional annual fee of $15,000, the
Chairs of each of the Clearing, Human Resources & Remuneration
and Technology Committees to receive an additional annual fee of
$10,000, for any NZX Directors who are appointed to the board of
NZX Regulation Limited to receive an additional annual fee of
$20,000 and for any non-executive Directors appointed to the board
of NZX Wealth Technologies Limited to receive an annual fee of
$20,000, all with effect from 1 July 2024.
Are there any questions from the floor on this resolution?
Are there any questions from shareholders online?
[IF NO QUESTIONS] – There are no questions on this matter from
shareholders joining online.
There appears to be no [further] discussion.

[SLIDE: Voting]
We will now turn to voting, for any shareholders who have not
already cast a postal or proxy vote.

28

Shareholders should now submit their votes – select “for”, “against”
or “abstain”, alongside each resolution. Voting will be open until the
close of the meeting.
Once all the votes have been cast, they will be counted by the
Company’s share registrar, Link Market Services, and scrutinised by
the company’s auditor, KPMG, who are in attendance at the
meeting.
The results of today’s meeting will be released to the market on the
completion of verification of voting.
[SLIDE: Questions]
At this point we will open up to any questions from shareholders in
attendance and online on the financial results, the business update
or any other matters you would like to raise.
Please complete your voting while we take questions.
QUESTIONS FROM SHAREHOLDERS
Are there any items of general business from the floor to be
discussed?
Are there any items of general business from shareholders online to
be discussed?
[IF NO QUESTIONS] – There are no questions from shareholders
joining online.
There appears to be no further business for discussion.
That brings this meeting to a close.
Ladies and gentlemen, that brings us to the end of formal business
for NZX’s 2023 Annual Shareholders’ Meeting.
[SLIDE: Thank you]
Thank you.

29

---

Annual
Shareholders’
Meeting
Auckland
18 April 2024

Today’s meeting
2
•Welcome and strategic overview – John
McMahon, Chair
•Report on financial and business
performance – Mark Peterson, CEO
•Strategic issues and growth options
•Resolutions
-Audit fees
-Election of John McMahon
-Re-election of Lindsay Wright
-Director fees
•Voting
•Questions

Voting and asking questions
3
Voting Card
Question box

Welcome and
strategic overview
John McMahon, Chair

Director changes
5
•Dame Paula Rebstock was appointed onto the NZX
Board effective 1 February 2023
•Rob Hamilton resigned from the Board effective 20
March 2023
•John McMahon was appointed onto the NZX Board
effective 10 May 2023
•James Miller retired as Chair and from the Board
effective 17 May 2023
•John McMahon was appointed Chair effective 17 May
2023
•Sarah Miller completed her tenure on the NZX Board
as our fifth Future Director, effective 31 December
2023

Image from Annual Report
Section footer
6

Leadership continuity
7
•The NZX Board amended the Chief Executive’s
contract to open-ended from fixed term
•Greater transparency of the Chief Executive’s
remuneration was provided in the 2023 Annual
Report
•The 2023 Remuneration report format was guided
by output from the Corporate Governance
Institute (including input from the New Zealand
Shareholders Association)

Report on financial
and business
performance
Mark Peterson, CEO

Performance and
results
9
•NZX produced a solid operating financial result in
what was anotherchallenging year for global
markets
•Normalised operating earnings (EBITDA),
excluding acquisition, integration and restructuring
costs, of $40.1 million – up 9.6% on 2022
•Trading and clearing volumes down 9.7% – the
lowest level of activity in nine years
•Operating revenue increased $12.7 million to
$108.4 million. Driven by:
•Acquisition of QuayStreet
•Smartshares’ organic growth
•Information Services (data)
•Dairy Derivatives

Capital markets
activity
10
•In 2023, $14.2 billion of capital was listed or
raised on market
•$6.8 billion of new debt issuance was raised
through the market
•ESG and green designated bonds remain in
favour, accounting for more than 29% of the
NZDX
•Engagement with Government to encourage
changes to market settingsto accelerate growth
in public markets
•NZX remains confident that as economic
conditions improve, equity market activity levels
should increase

Market
development
11
•Our strategy to grow capital market activity
includes developing and launching new products
•Our anonymous midpoint trading venue, NZX
Dark, will be ready for participants to connect
tonext month
•NZX20 index futures product is intended for
launch later this year or early 2025
•Depository assets in custody grew to $7.9 billion
– up 25.5% in the last year

Information
Services
12
•Information Services continued its steady growth
trajectory, with a compound average growth rate
of 7.5% since 2018
•Subscriptions and license revenues grew 7.1% in
2023, reflecting the continued growth in data
usage
•We have invested in our data and website
infrastructure, giving us the opportunity to create
a wider range of data products through modern
technology delivery mechanisms

13
Dairy – exciting area of growth
0
100,000
200,000
300,000
400,000
500,000
600,000
2008200920102011201220132014201520162017201820192020202120222023
Lots Traded
SGX-NZX Global Dairy Derivatives Market Since Launch

Smartshares
14
•Funds under management (FUM) as at 31
December 2023 was $11billion– up nearly
33% from 31 December 2022
•In August we delivered the integration of the
ASB Superannuation Master Trust business
onto the Smartshares platform
•Anna Scott joined the team as Chief Executive
•Anna is focused on balancing growth
opportunities while increasing our efforts to
improve operational efficiency
•We remain focused on achieving $15–20
billion of FUM by the end of 2027

NZX Wealth
Technologies
15
•NZX Wealth Technologies won 12 new clients
and transitioned three clients onto the platform
in 2023
•Funds Under Administration (FUA) as at 31
December 2023 was $11.5 billion – up from $2
billion in 2018
•As at 31 March 2024 FUA totalled $13.8 billion
•We have more confidence than ever in
achieving our target funds under administration
levels
•We also remain confident about achieving
cashflow breakeven by the end of 2024

Operating costs
16
•Cost control remains a priority. However, in 2023
our headline operating expenses increased by
15.5%
•Prior to the integration of the ASB Superannuation
Master Trust into Smartshares, the operational
support of the business paid to ASB came out of
the revenue line
•We will have something similar occur when the
final steps of the QuayStreet integration are
completed
•The remainder of the Group's cost changes related
largely to inflation driven employee, compliance
and technology costs
•We don't expect any major cost surprises in 2024

Depreciation &
amortisation
17
•NZX's three largest costs are Employees (60%),
Technology (28%) and Amortisation ($13.3 million per
annum)
•Amortisation of capitalised NZX Wealth Technologies
costs accounts for around 48%of the total amortisation
charge
•NZX Wealth Technologies capitalises the staff cost and
a portion of its overhead relating to client transitions
•Investment into NZX Wealth Technologies and the
associated amortisation over time is the "cost" of
building this business. It is an investment into the future

Operating
responsibly
18
•In 2023 NZX achieved net carbon zero
certification for the third year in a row from Toitū
Envirocare
•Under the new mandatory climate-related
disclosures framework, NZX has reported our
climate change obligations regarding
governance, strategy, risk management, and
metrics and targets.
•In 2023 we undertook a stakeholder and
materiality assessment that will support and
further inform NZX strategy execution, and guide
future ESG prioritisation, targets, and reporting.
•Public markets will continue to play an important
role in facilitating the flow of capital towards
decarbonising New Zealand’s economy

Our People
19
•We continue to take seriously the operating culture
we have at NZX
•Our people continue to show huge commitment to
the business and the opportunities in front of us
•The Financial Markets Authority's annual NZX
market operator obligations review showed positive
progress across all areas
•Our gender pay gap is 16.6%. We are focused on
improving this, while ensuring we hire the best
skills inthose roles

Delivering to our
growth strategy
20
•NZX is now a more integrated and resilient
financial markets infrastructure and services
business
•Growing markets is fundamental to what we do –
helping businesses to access capital and
providing investors opportunities to grow their
wealth
•We are globalising our footprint across a number
of ourbusinesses – as evidenced by partnerships
with dairy derivatives, carbon auctions and
GlobalDairyTrade
•Our group strategy to 2027 is clear: round out our
product offering in capital markets and drive scale
and operating leverage across the broader
business to increase our revenue base

Dividends
21
•TheNZX Board declared a final dividend of 3.1
centspershare contributing toaFY2023 dividend of 6.1
cents per share fully imputed
•NZX’s dividend policy is to pay 80% to 110% of adjusted net
profit after tax over time (subject to regulatory capital
requirements)
•The increase in amortisation relating to investment in NZX
Wealth Technologies has been a significant factor in
constraining NPAT
•Global economic conditions mean market trading volumes
and capital raisings are running below long-term averages
•While the dividend is above the payout ratio, NZX Directors
have an expectation that, subject to market risks, earnings
growth will support the dividend and allow for future dividend
growth
•Current free cash flows, after the ongoing investment in
Wealth Technologies, remain positive and support the
dividend NZX has paid out

2024 KPIs
22
•In the year ahead, our organisational priorities, or
key performance indicators are to:
•Deliver earning guidance
•Deliver initiatives to grow core Capital Markets
(NZX Dark, NZX20 Index Futures)
•NZX Wealth Technologies to be cash flow
breakeven by end of 2024
•More scale and efficiency in our Settlement
and Clearing business
•Deliver operating efficiencies across
Smartshares and its acquisitions and invest in
technology platform for improved scalability

Director fees
23
•NZX received a refreshed independent director fee
benchmarking report from PwC, identifying:
•Market median Board Chair fee is $166,000
•Market median non-executive Director fee
of$88,000
•21 out of 22 comparator companies pay a
committee fee to the Chair of the Audit and Risk
Committee (median $15,300).

Director fees (cont)
24
•To attract and retain talent for the Board and ensure
strong governance of the NZX Group,it is essential
NZX pays market rates for fees
•Based on the independent benchmarking information
undertaken in 2024, and subject to shareholder
approval, the Board proposes:
•Increase Director fees to $88,000 (35.4%)
•Increase Chair fees to $166,000(27.7%)
•The Chair of the Audit & Risk Committee would
receive a fee of $15,000 and the Chairs of other
committees (excluding the Nominations
Committee) receive a fee of $10,000
•The resolution will result in a total Directors’ fee pool
of $779,000

Outlook for 2024
25
•First quarter revenue reached $28.8 million – up 14.8%
and first quarter EBITDA* (including one-off costs) was
$11.4m - up 23.5%, both assisted by a one-off audit fee
item of around $0.9m.
•We are seeing the benefits of FUM growth and synergies
of the QuayStreet and ASB Superannuation Master Trust
acquisitions
•NZX Wealth Technologies continues to track against its
forecast increase in annual recurring revenue as new
clients transition onto the platform
•NZX today reaffirms the business shoulddeliverOperating
Earnings(EBITDA)* that willcomfortably be in the range of
$40.0million to$44.5 million
* This statement and our current operating earnings guidance range is always
subject to the usual market risks and outcomes.

Resolutions

Shareholders voting
online
27
•Shareholders will be able to cast your vote using the electronic
voting card received when online registration is validated
•To vote, you will need to click “Get Voting Card” within the
meeting platform
•You will be asked to enter your Shareholder or Proxy Number
to validate. Please then mark your voting card in the way you
wish to vote by clicking “FOR”, “AGAINST” or "ABSTAIN" on
the voting card
•Once you have made your selection please click “Submit
Vote” on the bottom of the card to lodge your vote
•The meeting and the results of the vote will be announced via
a market announcement on nzx.com
•The NZX Board supports each of the resolutions and intends
to vote undirected proxies in favour of these five resolutions
(noting the voting restrictions in relation to resolution five)
•Link helpline: 0800 200 220

Resolution 1:
Auditor
28
That the Board be authorised to determine the
auditor’s fees and expenses for the 2024 financial
year.

Resolution 2: Election of
John McMahon
29
To elect John McMahon as a director of NZX
Limited.
John has extensive industry experience in the finance sector,
including a background in technology, company turnarounds and
transformation, and entrepreneurial small cap governance.
He has spent more than 30 years in the Australasian equity
markets, predominantly as an equity analyst (covering a broad
range of industries), and was Head of Equities at ABN AMRO.
John has worked for CS First Boston, BZW, Morgan Stanley,
ABN AMRO, and Walker Capital, and was Managing Director of
ASB Securities for three years.
He now manages his own investment portfolio. John is a director
of several small cap NZX-listed companies: Solution Dynamics
(Chair), AoFrio (Chair of Audit Committee) and Vital (Chair). He
has a Bachelor of Commerce (Honours), an MBA and is a CFA
(Chartered Financial Analyst) charterholder.

Resolution 3: Re-election
of Lindsay Wright
30
To re-elect Lindsay Wright as a director of NZX
Limited.
Lindsay was appointed as a director in February 2018. She has
more than 30 years’ financial services and funds management
experience locally and globally. Lindsay is CEO of the Funds
Management unit at HKEX listed Sun Hung Kai & Co (resigned
effective 21 May 2024).
She has held a range of senior roles in the funds management
sector both globally and regionally (APAC) for Matthews Asia, BNY
Mellon Investment Management, Invesco Hong Kong, Harvest
Funds and Deutsche Asset Management. Lindsay started her
career with Bankers Trust, becoming CFO/COO before moving to
Deutsche Asset Management.
From a governance perspective Lindsay is a director of Milford
Asset Management and Chair of the Audit and Risk Committee and
is a director of ASX listed Navigator Global Investments. She has
served as Deputy Chair of the Board and Chair of the Audit and
Risk Committee of the Guardians of the NZ Super Fund, and as a
director of Kiwibank. Lindsay has a Bachelor of Commerce from the
University of Auckland and is a Fellow of the Hong Kong Institute of
Directors.

Resolution 4:
Director fees
31
That the annual remuneration payable to each
director of NZX Limited be set at $88,000, the
Chair’s annual remuneration be set at $166,000,
with the Chair of the Audit & Risk Committee to
receive an additional annual fee of $15,000, the
Chairs of each of the Clearing, Human Resources
& Remuneration and Technology Committees to
receive an additional annual fee of $10,000, for
any NZX Directors who are appointed to the board
of NZX Regulation Limited to receive an additional
annual fee of $20,000 and for any non-executive
Directors appointed to the board of NZX Wealth
Technologies Limited to receive an annual fee of
$20,000, all with effect from 1 July 2024.

Voting

Questions

Thank you