TEL AVIV STOCK EXCHANGE : REPORTED FIRST QUARTER 2022 RESULTS

May 24, 2022

411333.docx

THE TEL-AVIV STOCK EXCHANGE LTD REPORTED FIRST QUARTER 2022 RESULTS

May 24, 2022 (Tel Aviv) -Tel Aviv Stock Exchange Ltd (TASE:TASE) today announced its financial results for the first quarter ended March 31, 2022.1

1. General

TASE Concludes the First Quarter with a 25% Increase in Revenues and 50% in the Adjusted Profit and Adjusted EBITDA Compared to the Corresponding Quarter Last Year.

TASE to Initiate the First Stage of the Previously Declared Intention of Buyback in an Amount of up to NIS 36 Million Over Six Months.

1.1 Highlights of TASE's Results for the First Quarter of 2022

First Quarter Results

• TASE revenues amounted to NIS 97.7 million in the first quarter of 2022, an increase of 25% compared to the corresponding quarter last year. The increase in revenue is due mainly to an overall increase in activity (aprx. 18% of total increase) and update to the period of revenue recognition from listing fees (aprx. 7% of total increase). For additional information, see Section 4.3 below.
• Adjusted EBITDA increased in the first quarter of 2022 to NIS 36.8 million compared to NIS 24.6 million in the corresponding quarter last year, an inter-quarter increase of 50%. The increase is a

result of the higher volume of activity and update to the period of revenue recognition from listing fees, less an increase in expenses, primarily marketing costs and employee benefits.

• Adjusted net profit amounted to NIS 14.9 million in the first quarter of 2022, compared to NIS 9.9 million adjusted net profit in the corresponding quarter last year, an increase of 50%. The increase in profit is a result of the higher volume of activity and update to the period of revenue recognition from listing fees, less an increase in expenses, primarily marketing costs and employee benefits, and

to a transition to financing expenses as a result of a negative return on the Company's investments in financial assets held for trade.

▪

In the first quarter of 2022, the Company examined the estimation of the period for recognition of revenue from listing fees on shares (in IPOs and secondary offerings) and on ETFs in accordance with International Financial Reporting Standard, "Revenue from Contracts with Customers" (IFRS 15). Following the aforesaid examination and based on the updated estimate, in respect of contracts for which the performance obligation, according to the updated estimate, ended by January 1, 2022, the Company recognized revenue from listing fees in an amount of NIS 4.3 million, and in respect of contracts for which the performance obligation has not yet ended as of January 1, 2022, an increase of NIS 1.55 million took place in revenue from listing fees for the three-month period ended March 31, 2022. For additional information, see Section 4.3 below.

1 The Board of Directors of TASE today approved the Consolidated Financial Statement as of March 31, 2022. The consolidated financial statements of the Company were prepared in accordance with IFRS.

This is an English translation of parts of the information included in the approved financial statements. In the event of any discrepancy between the original Hebrew and the translation to English, the Hebrew version alone will prevail. The consolidated financial statements in the English Version will be published on the website by the end of June 2022.

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1.2 Business and Corporate Highlights for the First Quarter of 2022

BUSINESS HIGHLIGHTS

• The average daily trading volume of shares in the first quarter of 2022 amounted to approximately NIS 2.6 billion, an increase of 40% compared to the volumes in the corresponding quarter in the previous year.
• The average daily trading volume of corporate bonds in the first quarter of 2022 amounted to approximately NIS 0.97 billion, a 17% increase compared to the volumes in the corresponding quarter in the previous year. The average daily trading volume of government bonds in the first quarter of 2022 amounted to approximately NIS 2.7 billion, a 26% decrease compared to the volumes in the corresponding quarter in the previous year.
• The daily average trading volume of derivatives in the first quarter of 2022 amounted to 176 thousand units a day, compared with 163 thousand units in the corresponding quarter in the previous year., an increase of 8%.
• The daily average trading volume of mutual funds in the first quarter of 2022 amounted to NIS 940 million compared with NIS 942 million in the corresponding quarter in the previous year.
• In the first quarter of 2022, NIS 7.5 billion was raised on TASE in shares, a decrease of 20% over the corresponding quarter in the previous year, of which NIS 1.4 billion was raised in 8 IPO's (compared to NIS 3.1 billion raised in 33 IPOs during the first quarter of 2021), mostly in the real estate sector.
• In the first quarter of 2022, NIS 25.6 billion was raised on TASE in corporate bonds, an increase of 27% over the corresponding quarter in the previous year and NIS 15.4 billion was raised on TASE in government bonds, a decrease of 69% over the corresponding quarter in the previous year.
• The leading indices TA-35,TA-90,TA-125 and TA-SME60 have risen by 2.2%, 2.3%, 2.0% and decreased by 4.1% respectively, in the first quarter of 2022 and risen by 7.0%, 6.1% ,6.1% and 13.0% respectively, in the first quarter of 2021.
• A 12% increase in the balance of assets in custodianship at TASE-CH in 2022 to an amount of NIS 3.1 trillion, compared to the balance of assets in the corresponding quarter.
• The marketing and distribution expenses of the Company totaled NIS 5.7 million in the first quarter of 2022, an increase of 232% over the corresponding quarter in the previous year. In the first quarter of 2022, the Company launched new advertising campaign on digital media and traditional media, at a total cost of NIS 3.9 million compared to NIS 0.3 million in the corresponding quarter last year.
• Net financing expenses of the Company totaled NIS 5.2 million, as compared to net financing income of NIS 0.1 million in the corresponding quarter last year. The transition to financing expenses this quarter resulted from a negative return of approximately 2.45% on the Company's investments in marketable securities' portfolios comprising Israeli Government bonds, as compared to a positive return of approximately 0.02% in the corresponding quarter last year.
• TASE to initiate the first stage of its declared buyback intention in an amount of up to NIS 36 million over six months. For additional information, see Section 4.2 below.

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2. Presented below is information relating to the results for the first quarter of 2022 (NIS, in thousands)

Three Months Ended March 31, 2022 Compared to the Three Months Ended March 31, 2021 Statement of Profit or Loss

	Quarter ended	Difference
	31.3.2022		31.3.2021		Amount	%
Revenue from services	97,676		78,370		19,306	25%
Expenses	73,406		65,674		7,732	12%
Profit before financing income, net	24,270		12,696		11,574	91%
Financing income (expenses)	(5,207)		134		(5,341)	-
Taxes on income	4,344		3,169		1,175	37%
Net profit	14,719		9,661		5,058	52%
% of total revenue from	15.1%		12.3%
services for the quarter

• Revenue in the first quarter of 2022 amounted to NIS 97.7 million, compared to revenue of NIS 78.4 million in the corresponding quarter last year, an increase of 25%. The increase in revenue is mainly due to an overall increase in activity (aprx. 18% of total increase) and update to the period of revenue recognition from listing fees (aprx. 7% of total increase).
• The costs in the first quarter of 2022 totaled approximately NIS 73.4 million, compared to costs of NIS 65.7 million in the corresponding quarter last year, an increase of 12%. The increase in the costs is due mainly to an increase in marketing expenses (aprx. 6% of total costs) in the reported period, as a result of the timing of performance of campaigns and to an increase in employee benefits expenses (aprx. 4% of total costs) resulting from salary updates and bonuses provisions.
• Net financing expenses in the first quarter of 2022 totaled NIS 5.2 million, as compared to net financing income of NIS 0.1 million in the corresponding quarter last year. The transition to financing expenses this quarter resulted from a negative return of approximately 2.45% on the Company's investments in marketable securities' portfolios comprising Israeli Government bonds, as compared to a positive return of approximately
  0.02% in the corresponding quarter last year.
• The net profit in the first quarter of 2022 totaled NIS 14.7 million, compared to NIS 9.7 million in the corresponding quarter last year, an increase of 52%. The increase in profit was due to higher revenue from services, as explained above, which was partly offset by the increase in expenses and the transition to financing expenses, as described above.

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		Quarter ended
	31.3.2022	31.3.2021	Difference %
Weighted average number of
ordinary shares used to
compute
Basic earnings per share	101,877,265	101,152,435	0.7%
Diluted earnings per share	104,092,262	104,112,911	0.0%
Basic earnings per share in	0.144	0.096	50%
NIS
Diluted earnings per share in	0.141	0.093	52%
NIS

The revenue in the first quarter of 2022- below is the composition of the first quarter's revenue, compared to the corresponding quarter last year:

Revenue from services

Trading and clearing commissions

Quarter ended

	% of the		% of the
31.3.2022	Company's	31.3.2021	Company's	% change
	total revenues		total revenues
39,445	40%	34,115	44%	16%

15% of the increase in revenue from trading and clearing commissions is due to the higher share trading volumes compared to the corresponding quarter last year, and 3% of the increase in revenue is due to an increase (two trading days) in the number of trading days this quarter compared to the corresponding quarter last year.

Listing fees and levies

24,789

25%

16,402

21%

51%

36% of the increase in revenue from listing fees and levies is due to the updating of the estimate concerning the period of recognition of revenue from listing fees on shares and ETFs pursuant to International Financial Reporting Standard, "Revenue from Contracts with Customers" (IFRS 15), and to a 15% increase in revenue from listing fees and levies as a result of an increase in the number of companies.

Clearing House services

17,352

18%

15,051

19%

15%

8% of the increase in revenue from Clearing House services is due to an increase in Clearing House services to members, and 6% of the increase is due to the rise in revenue from custodian fees as a result of the increase in the value of assets that are held in custodianship at TASE-CH.

Data distribution and connectivity services

14,299

15%

12,630

16%

13%

6% of the increase in revenue from data distribution and connectivity services is due to a rise in revenue from connectivity services and 6% of the increase is due to the updating of the pricelist during 2021 for customers outside Israel.

			1,791		2%	172	-		941%
Other		The revenue for the quarter includes revenue from the sale of technological consulting
revenue		services of NIS 0.7 million, revenue from the Conference Center and trade openings of
				NIS 0.6 million, and NIS 0.4 million from the rent of an office floor.
	Total revenue			97,676			100%		78,370		100%			25%
	from services

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Adjusted net profit and adjusted EBITDA data2

Quarter ended	Difference
31.3.2022	31.3.2021	Amount	%

Adjusted EBITDA for the quarter:

Profit before financing income (expenses), net

Adjustments:

Share-based payment expenses

Depreciation and capital losses

Adjusted EBITDA for the quarter:

• of total revenue from services for the quarter

Adjusted profit for the quarter:

Profit for the quarter

Adjustments:

24,270	12,696	11,574
131	233	(102)
12,448	11,627	821
36,849	24,556		12,293	50%
37.7%	31.3%
14,719	9,661	5,058

Share-based payment expenses

Adjusted profit for the quarter:

• of total revenue from services for the quarter

131	233	(102)
14,850	9,894		4,956	50%
15.2%	12.6%

• The adjusted EBITDA in the first quarter of 2022 totaled NIS 36.8 million, compared to NIS 24.6 million in the corresponding quarter last year, an increase of 50%. The increase is due to a 25% rise in revenue as a result of the higher volume of activity and update to the period of revenue recognition from listing fees (aprx. 7% of total increase), less a 12% increase in expenses, primarily marketing costs and employee benefits.
• The adjusted profit in the first quarter of 2022 totaled NIS 14.9 million, compared to NIS 9.9 million in the corresponding quarter last year, an increase of 50%. The increase is due to a 25% rise in revenue as a result of the higher volume of activity and update to the period of revenue recognition from listing fees (aprx. 7% of total increase), less a 12% increase in expenses, primarily marketing costs and employee benefits, and to a transition to financing expenses as a result of a negative return on the Company's investments in financial assets held for trade.

2 Adjusted data for the profit and EBITDA (operating profit before interest, tax, depreciation and amortization): These data are based on the data in the Company's financial statements for the reported periods, after eliminating the effects of certain events and factors, as explained above, that are not typical of the Company's operating activities.

It is hereby clarified that the data presented above are not presented in accordance with generally accepted accounting principles and do not reflect the Company's cash flows from operating activities or its operating profits and net profit and, accordingly do not constitute a substitute for the data in the Company's financial statements regarding the operating profit and/or the net profit. Nevertheless, in the Company's opinion, these data enable a better comparison to be made of the Company's performance in the reported periods.

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