Tel Aviv Stock Exchange : REPORTED FOURTH QUARTER AND YEAR 2022 RESULTS

March 28, 2023 408101.docx

THE TEL-AVIV STOCK EXCHANGE LTD REPORTED FOURTH QUARTER AND YEAR 2022 RESULTS

March 28, 2023 (Tel Aviv) -Tel Aviv Stock Exchange Ltd (TASE:TASE) today announced its financial results for the year ended December 31, 2022.1

1. General

1.1 Highlights of TASE's Results for 2022 and Fourth Quarter of 2022

Fourth Quarter Results

• ▪ TASE revenues amounted to NIS 86.3 million, compared to revenue of NIS 85.7 million in the corresponding quarter last year, a 1% increase. The increase is due to an increase in revenue from listing fees and levies and in revenues from data distribution and connectivity services, which was partly offset by a decrease in revenue from trading and clearing services (approx. 3% decrease of total revenue), that stemmed primarily from the 11% fewer trading days compared to the corresponding quarter last year.

• ▪ The adjusted EBITDA in the fourth quarter of 2022 totaled NIS 32.1 million, compared to NIS 29.5 million in the corresponding quarter last year, an inter-quarter increase of 9%. The increase is due to an increase in most revenue from services, which was counteracted by a decrease in expenses, primarily employee benefit expenses and marketing expenses.

• ▪ The adjusted profit in the fourth quarter of 2022 totaled NIS 13.3 million, compared to an amount of NIS 14.2 million in the corresponding quarter last year, a 6% decrease. The decrease is due mainly from the transition to financing expenses this quarter, as compared to financing income in the corresponding quarter last year.

2022 Results:

• ▪ TASE revenues amounted to NIS 361.0 million in the year 2022, an increase of 12% compared to the previous year. The increase consists of revenue from trading and clearing (representing 4% of total revenue) and revenue other than from trading and clearing (representing 8% of total revenue).

• ▪ Net financing expenses in 2022 totaled NIS 13.2 million, as compared to net financing income of NIS 4.5 million in 2021. The transition to financing expenses in the period is due to a negative yield of 7.0% on the Company's investments in Israeli Government bonds managed in marketable securities'

  portfolios, compared to a positive yield of 2.5% in 2021.

1 The Board of Directors of TASE today approved the Consolidated Financial Statement as of December 31, 2022.

The consolidated financial statements of TASE were prepared in accordance with IFRS GAAP.

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 April 2023.

• ▪ Adjusted EBITDA in 2022 totaled NIS 135.2 million, compared to NIS 103.0 million in 2021, an increase of 31% between the years. The increase is due mainly to a 12% rise in revenue, primarily as a result of the higher volume of activity, which was partly offset by a 2% increase in expenses, primarily marketing expenses.

• ▪ Adjusted net profit amounted to NIS 51.4 million in 2022, compared to NIS 46.2 million adjusted net profit in the previous year, an increase of 11%. The increase in profit is due mainly to a 12% rise in revenue, mainly as a result of the higher volume of activity, which was offset by a 3% increase in expenses, primarily with respect to marketing expenses and depreciation and amortization expenses, and the transition to financing expenses as a result of the negative return on the Company's in financial assets held-for-trade and an increase in the tax expense.

• ▪ As of December 31, 2022, TASE Group has cash balances of NIS 192.4 million and Israeli government bonds of NIS 196.2 million. The TASE Group surplus liquidity amounts to NIS 256.5 million over regulatory liquidity requirements (For information on the updating of the capital and liquidity model, see section 4.8 below).

• ▪ Free cash flow increased in 2022 to NIS 62.5 million compared to NIS 61.6 million in the previous year, an increase of 1%.

1.2 Business and Corporate Highlights for the Year 2022

1.2.1

BUSINESS HIGHLIGHTS

• ▪ The average daily trading volume of shares in the year 2022 amounted to approximately NIS 2.3 billion, an increase of 22% compared to the volumes in the previous year. In the fourth quarter of 2022 the average daily trading volume of shares amounted to approximately NIS 2.0 billion, an increase of 1% over the corresponding quarter of the previous year.

• ▪ The average daily trading volume of corporate bonds in the year 2022 amounted to approximately NIS 1.05 billion, an increase of 15% compared to the volumes in the previous year. The average daily trading volume of government bonds in the year 2022 amounted to approximately NIS 2.4 billion, a 20% decrease compared to the volumes in the previous year. In the fourth quarter of 2022 the average daily trading volume of corporate bonds amounted to approximately NIS 1.0 billion, an increase of 3% over the corresponding quarter of the previous year and the average daily trading volume of government bonds amounted to approximately NIS 2.4 billion, a 19% decrease over the corresponding quarter of the previous year.

• ▪ The average daily trading volume of derivatives in 2022 amounted to 159 thousand units a day similar to previous year.

• ▪ The average daily redemptions/creations volume of mutual funds in 2022 amounted to NIS 987 million compared with NIS 890 million in the year of 2021, an increase of 11%. In the fourth quarter of 2022 the average daily redemptions/creations volume of mutual funds amounted to approximately NIS 1,232 million, an increase of 29% over the corresponding quarter of the previous year.

• ▪ The average daily trading volume of T-bills in 2022 amounted to NIS 783 million compared with NIS 320 million in the year of 2021, an increase of 145%. In the fourth quarter of 2022 the average daily trading volume of T-bills amounted to approximately NIS 1,194 million, an increase of 225% over the corresponding quarter of the previous year.

• ▪ The leading indices TA-35, TA-90, TA-125 and TA-SME60 have decreased by 9%, 18%, 12% and 33% respectively, in the year 2022 and by 2%, 8% ,4% and 13% respectively, in the fourth quarter of 2022.

• ▪ In the year 2022, NIS 21.7 billion was raised on TASE in shares, a 18% decrease over the previous year, of which a total of NIS 2.3 billion was raised in 13 IPOs (compared to NIS 10.5 billion was raised in 94 IPOs during the year of 2021).

  In the year 2022, NIS 92.1 billion was raised on TASE in corporate bonds, a 3% decrease over the previous year and NIS 41.5 billion was raised on TASE in government bonds, a decrease of 74% over the previous year.

  For information regarding changes in estimates reported in prior reporting periods see section 4.4 below and for information regarding deferred income from listing fees as of December 31,2022 and the forecast for recognition of income, see Appendix hereto- Deferred income from listing fees.

• ▪ There was no material change in the balance of assets in custodianship at TASE-CH in 2022 which amounted to approximately NIS 3 trillion.

• ▪ The marketing and distribution expenses of the Company totaled NIS 13,171 thousand in 2022, an increase of 18% over the previous year. TASE initiated the first stage of its declared buyback intention in an amount of up to NIS 36 million over six months. In the period from May 26, 2022 to September 30, 2022, the Company executed a buyback on The Tel Aviv Stock Exchange of 1,844 thousand of its ordinary shares in consideration for NIS 30.4 million.

1.2.2

CORPORATE HIGHLIGHTS FOR THE YEAR 2022

1.2.2.1 Objectives and Business Strategy:

At the end of five years of the approval of the Company's previous strategic plan, on 23.10.2022 the Board of Directors of the Company approved a new strategic plan for the years 2023-2027, as described below:

Strategic goals - According to the updated strategic plan, the Company intends to promote four principal strategic goals:

• ▪ Further developing and enhancing the value proposition of TASE's core activity

• ▪ Strengthening the direct activity and ties with the end customers

• ▪ Digital assets strategy

• ▪ Export of technological services and solutions to foreign exchanges

Quantitative goals - As part of the approval of the Strategic Plan, the Board of Directors of the Company has set a compounded annual growth rate (CAGR) from organic growth of 10% to 12% inthe years 2023-2027. Achievement of the aforesaid goal depends, among others, on the Company's flexibility in determining its tariffs.

Restructuring of the TASE Group - The Board of Directors of the Company approved the advancement of a restructuring in the TASE Group in order to ensure the effective implementation of the strategic plan and to further the continued development and upgrading of the capital market for the benefit of the public. Within this framework, a new public holding company will be established, which will hold 100% in the Company that will become a private company, and at the same time the subsidiaries of the Company will be moved up, becoming subsidiaries of the new holding company and fellow subsidiaries of the Company and of new companies that would be established as part of the implementation of the aforementioned business and strategic plans of the TASE Group. It is hereby emphasized that the implementation of the aforesaid restructuring requires the obtaining of the approval of TASE's shareholders' meeting and various regulatory approvals, including the approval of the Israel Securities Authority.

Mergers and acquisitions - As part of the implementation and advancement of its strategic goals, the Company intends to consider the implementation of a plan for strategic purchases and/or investments in its areas of activity and/or in areas that offer added value to its activity (programmatic M&A). Specific plans will be presented to the Board of Directors of the Company for approval, as necessary.

1.2.2.2 On 15.3.2023, the European Securities and Markets Authority (ESMA) announced, pursuant to an application submitted by TASE-CH for its consideration as an entity that is permitted to provide clearing services to European group members and trading platforms, that it recognizes TASE-CH as a Tier-1 Third-Country CCP, in accordance with the principles of the applicable European regulation and that, therefore, TASE-TASE-CH is qualified to provide clearing services to EU member states for a variety of financial instruments (up to said date, ESMA adopted various resolutions, from time to time, for the temporary suspension of the processes pertaining to the application for recognition, the most recent of which expired on 28.6.2022, on which date the recognition process was resumed). The classification of the Clearing House as a Tier-1 Third-Country CCP signifies that the Clearing House was established in a country outside the European Union, and is not deemed as systemically important to the stability of the European Union or of any of its member states, and is not expected to become systemically important, considering its current activity and characteristics.

• 1.2.2.3 Blink Fintech (Israel) - on 26.2.2023, the Board of Directors of TASE approved the acceptance of Blink Fintech (Israel) as a non-banking TASE member, subject to the completion of the necessary preparations and to the fulfillment of certain conditions (which to the date of the report have not yet been fulfilled).

• 1.2.2.4 Starting in October 2022, the issuance of dedicated bonds by the Government has been discontinued. Consequently, the investments of the pension funds are expected to be diverted from those bonds to equities and corporate bonds on TASE and to foreign assets overseas.

1.2.2.5 TASE's Tariffs

In July 2022, an amendment was approved that cancels the maximum commission on OTC transactions, this for a period of three years.

Information regarding the amendment of the pricelist concerning the TASE indices, see section 4.10 below

1.2.2.6 Tailor-Made Indices

On 9.1.2023, TASE entered into an agreement with a public institution for the creation of tailor-made indices that are based on TASE's trading data and customized for the specific needs of the customer.

This is the first agreement signed by TASE in the trail of the approval of the amendment to the Indices' Pricelist that permits TASE to receive payment for tailor-made indices, as above. According

to the agreement, TASE will create tailor-made indices, based on the specifications that will be provided by the public institution and approved by TASE. TASE will develop and edit the indices using the methodology that it applies in the development and editing of the other TASE indices, and they will be published in the same manner as the other indices. TASE will retain the rights in the tailor-made indices, however the public institution will be granted an exclusive license to use each such tailored index. The overall exclusivity period of each tailored index shall not exceed a cumulative ten years. The consideration to which TASE shall be entitled consists of development fees and usage fees that are calculated as a percentage of the volume of assets of the financial instruments using the tailored index (in immaterial amounts).

1.2.2.7 Trust Hedge Fund

In accordance with the ad hoc provision published by the Israel Securities Authority concerning assets that may be purchased and held in a Trust Hedge Fund pursuant to Section 65A of the Joint

Investment Trust Law, 1994. The ad hoc provision determines the framework for the legal and operational regulation of a trust hedge fund that makes investment in a hedge fund accessible to the public under the regulated umbrella of a mutual fund. Consequently, the Company has developed a dedicated system that enables TASE-CH to operate and clear trust hedge funds.

1.2.2.8 Cooperation Agreements with Global Stock Exchanges

From time to time, the Company considers strategic collaborations with other stock exchanges around the world, which are intended to enhance the accessibility to the financial markets of each of the parties to the agreement and to leverage strategic advantages of each of the parties to the agreement, taking into consideration, inter alia, the suitability of companies operating in each of the countries for trading on the counterparty stock exchange.

Additionally, on 6.12.2022, the Company signed a memorandum of understanding with NYSE (hereafter: "the MOU"), concerning the establishment of an agreed framework for potential

collaborations between the exchanges in their various areas of activity. To the date of the report, agreements have not yet been reached with regard to such collaborations, realizing the purpose of the MOU.