Moscow Exchange announces results for the full year 2023

Moscow Exchange (MOEX) today announced its financial results in accordance with International Financial Reporting Standards (IFRS) for the year ended December 31, 2023.

Unless stated otherwise, all figures below refer to performance in 2023 and all comparisons are with the previous year.

KEY FINANCIAL HIGHLIGHTS FOR 2023

• F&C income improved to RUB 52.2 bln on the back of elevated client activity as well as the launch of new products and services.
• F&C share of operating income was 50% in FY’23.
• Finuslugi service continued to gain popularity, which led to an increase of the business line’s income by 141.7%.
• Net profit was up to RUB 60.8 bln.

KEY BUSINESS & CORPORATE HIGHLIGHTS FOR 2023

• MOEX supported the scope and liquidity of domestic equity capital market, hosting eight IPOs and four SPOs and one equity listing during 2023.
• MOEX continues to facilitate and develop local debt capital market as 206 corporates, including 55 newcomers, and placed 626 bond issues, raising RUB 5.47 trln in 2023.
• Moscow Exchange approved a new strategy and updated the dividend policy. The new strategy focuses on the development of domestic financial market, engagement with end clients and maintenance of international links. The updated dividend policy implies a minimum payout ratio of 50% and a target payout of 100% of free cash flow.
• Nearly seven million new retail investors opened brokerage accounts in 2023, bringing the total number of retail clients to 29.7 mln at the year end. Today, this number exceeds 30.2 mln clients.
• MOEX became Russia’s first exchange operator for digital financial assets – DFAs, obtained information system operator license and welcomed inaugural DFA deals on both primary and secondary markets.
• MOEX launched information and trading terminal Trade Radar. The information part provides access to the news feed, real-time and historical quotes on MOEX and reference data on securities’ issues. The trading part allows negotiating OTC transactions in secure chats, viewing transaction history and supplying indicative prices to market makers.
• On the Derivatives Market, 37 new instruments were launched in 2023 and trading volume in these new contracts totaled RUB 314 bln. The scope of new instruments includes premium options, perpetual futures on precious metals and indices as well as equity and FX futures.
• Equities and Bond Markets switched to T+1 settlement cycle. This change to T+1 will increase the convenience of operating on MOEX markets, reduce transaction time, synchronize securities’ settlement cycles and optimize liquidity management via alignment with the Money Market.

FINANCIAL HIGHLIGHTS

PERFORMANCE OF KEY BUSINESS LINES

• The total market capitalization of the Equities Market at the end of 2023 was RUB 58.1 trln (USD 647.3 bln). Fee and commission income from the Equities Market was up 113.2%, while trading volumes grew by 30.9%. The discrepancy between fee income and trading volumes dynamics is largely explained by the introduction of a new asymmetric tariff structure that came into effect in November 2022.

• Fee income from the Bond Market increased by 67.6% while trading volumes (excluding placements of overnight bonds) improved by 60.1%. Primary market volumes (excluding placements of overnight bonds) were up 45.2%, mostly driven by elevated corporate borrowing activity. Secondary market trading volumes grew by 74.6%. Effective fee dynamics were supported by the tariff optimization that came into effect at the beginning of 2023 as well as the migration of volumes to value-added CCP-based trading modes.

• Fee income from the FX Market increased by 30.4%. Trading volumes were up 22.5%. Spot volumes added 7.5%, while swap volumes grew by 31.4%. The effective fee dynamics is explained by two opposing factors: [1] the asymmetric tariff structure favoring liquidity makers on the spot market that came into effect on August 1, 2022, [2] a shift in the volumes’ mix towards the less profitable swap segment.

• Money Market fee income was up 26.0%. Trading volumes grew by 24.5%. GCC-repo volumes surged by 68.1% to reach nearly RUB 224 trln. CCP repo trading volumes added 35.1%.

• Derivatives Market fee income increased by 79.2%. The trading volume stood virtually flat, adding just 3.7%. The discrepancy between fee income and volume dynamics was the result of a shift in volumes’ mix towards value-added commodity derivatives and the new asymmetric tariff structure implemented in June 2022.

• Fee income from the Depository and Settlement Services grew by 24.5%. The growth was primarily explained by a 19.9% increase in the average value of assets under custody. The discrepancy between the growth rates of F&C income and assets on deposit is the result of business lines beyond safekeeping, primarily clearing and collateral management services, which are the reflection of repo operations at the NSD.

• IT Services, Listing and other fee income line was largely driven by Finuslugi revenues. Sale of software and tech. services improved by 34.0% driven by tariffs revision and the introduction of low-latency protocols for market data distribution – SIMBA ASTS and FIFO TWIME ASTS – to Equities and FX Markets. Listing and other services grew by 26.6% as primary market activity in equities and bonds recovered. Sales of information services rose by 20.7%, primarily on the back of RUB depreciation during the year. Finuslugi revenues surged by 141.7% as the business unit develops new features and keeps onboarding new clients. Other fee income shrank by 66.1% as base period revenues included additional fees on EUR balances of 0.2 p.p. above the non-positive ECB rate.

OPEX BREAKDOWN

• FY’23 OPEX was up 20.2% on the back of extra bonus and LTIP provisions following a review of the compensation system as well as Finuslugi-related marketing spend.

• OPEX for 4Q’23 increased by 63.9%, which is largely explained by the growth in personnel expenses and marketing.

• 4Q’23 personnel expenses growth of 70.8% decomposes into: [1] 29.5 p.p. extra bonus provisions following the review of the compensation system, [2] 23.9 p.p. LTIP 2028 provisions driven by stock price performance, [3] 16.5 p.p. new hires and selective wage revisions, and [3] 0.9 p.p. other factors.

• The employee headcount was up 10.6%.

• Advertising and marketing costs increased by nearly sevenfold in 4Q’23. The surge is explained by Finuslugi-related spending.

• Agent fees almost tripled in 4Q’23, reflecting insurance sales on the Finuslugi platform.

• D&A and IT maintenance grew 14.2% in 4Q’23, and the D&A alone was up 6.4%. IT maintenance costs increased by 17.2% in 4Q’23. The rise in IT maintenance costs is due to the gradual implementation of the software & hardware renewal program.

• The cash position[3] at the end of 2023 was RUB 139.07 bln. The company had no debt as of the end of the reporting period.

• 4Q’23 CAPEX was RUB 1.88 bln. FY’23 CAPEX amounted to RUB 4.04 bln, which is in-line with the FY’23 guidance of RUB 3 – 5 bln.

Moscow Exchange’s consolidated IFRS financial statements for FY 2023 are available on the Investor Relations section of the company's website.

Contacts:
Investor Relations: Public Relations:

NOTES TO EDITORS

About Moscow Exchange

Moscow Exchange Group operates Russia’s main trading platform for equities, bonds, derivative instruments, currencies, money market instruments and commodities. The Group includes the central securities depository (National Settlement Depository), and a clearing center (National Clearing Centre), performing the functions of central counterparty on the markets, which allows Moscow Exchange to offer its clients the full spectrum of trading and post-trading services. Moscow Exchange held the initial public offering of its shares on 15 February 2013 (ticker MOEX).

Disclaimers

Some of the information in these materials may contain projections or other forward-looking statements regarding future events or the future financial performance of the Company. You can identify forward looking statements by terms such as "expect", "believe", "anticipate", "estimate", "intend", "will", "could," "may" or "might" the negative of such terms or other similar expressions. The Company wishes to caution you that these statements are only predictions and that actual events or results may differ materially. The Company does not intend to update these statements to reflect events and circumstances occurring after the date hereof or to reflect the occurrence of unanticipated events. Many factors could cause the actual results to differ materially from those contained in projections or forward-looking statements of the Company, including, among others, general economic conditions, the competitive environment, risks associated with operating in the Russian Federation, rapid technological and market change in the industries the Company operates in, as well as many other risks specifically related to the Company and its operations.