Bgc Group, Inc. · NASDAQ:BGC
Bgc — BGC Partners — Q4 2020 Earnings Presentation
39 slides from Bgc's earnings presentation, February 2021
Slide 1: BGC Partners Earnings Presentation 4Q 2020
BGC PARTNERS, INC. NASDAQ: BGCP E A R N I N G S P R E S E N TAT I O N 4 Q 2 0 2 0
Slide 2: Disclaimer
DISCLAIMER 2 DISCUSSION OF FORWARD-LOOKING STATEMENTS ABOUT BGC Statements in this document regarding BGC that are not historical facts are “forward-looking statements” that involve risks and uncertainties, which could cause actual results to differ from those contained in the forward-looking statem
Slide 3: Highlights of Consolidated Results: 4Q 2020 & FY 2020
HIGHLIGHTS OF CONSOLIDATED RESULTS: 4Q 2020 & FY 2020 3 Highlights of Consolidated Results 4Q 2020 4Q 2019 Change FY 2020 FY 2019 Change (USD millions, except per share data) Revenues $479.4 $487.2 (1.6)% $2,056.7 $2,104.2 (2.3)% GAAP income (loss) from operations before income taxes (19.5) (29.4) 3
Slide 4: Business Overview: 4Q 2020 & FY 2020
BUSINESS OVERVIEW: 4Q 2020 & FY 2020 4 4Q 2020 FY 2020 REVENUE: REVENUE: $479M $2,057M Fenics Fenics Brokerage Brokerage 13% 11% Voice/Hybrid Voice/Hybrid Brokerage 71% 4Q Data, Software & Post-trade 4% Brokerage 73% FY Data, Software & Post-trade 4% Insurance Insurance Brokerage Brokerage 10% 9% Ot
Slide 5: Overview: Revenue by Asset Class & Geography 2020
OVERVIEW: REVENUE BY ASSET CLASS & GEOGRAPHY 2020 5 REVENUE BY ASSET CLASS GLOBAL OFFICE LOCATIONS & REVENUES Rates Data, Software & AMERICAS EMEA APAC Post-trade and Other1 26% 6% 4Q Revenue: 4Q Revenue: 4Q Revenue: Insurance 10% 15% FX $132M $277M $71M 4Q 13% FY Revenue: FY Revenue: FY Revenue: Eq
Slide 6: Overview: Fenics
OVERVIEW: FENICS 6 4Q 2020 FY 2020 FENICS BROKERAGE NET REVENUE1: NET REVENUE1: 21% $83M $317M Credit +14% yr/yr 50% +33% yr/yr Rates $83M $317M $21M $278M $82M 4Q $62M $73M $62M $18M $62M $235M 27% $205M FX $44M 4Q19 4Q20 FY 19 FY 20 1% Other2 Fenics Brokerage Data, Software & Post-trade Fenics Bro
Slide 7: Fenics Brokerage
FENICS BROKERAGE 7 FY 2020 FENICS BROKERAGE BY ASSET CLASS Rates Credit FX Other $113M $66M $51M $5M FENICS BROKERAGE GENERATED RECORD FULL YEAR REVENUES OF $235M, GROWING 15% YR/YR KEY PRODUCTS U.S. Treasuries U.S. Credit FX Options Index Options European Government Bonds European Credi
Slide 8: Fenics UST
FENICS UST 8 UST TRADING VOLUME FENICS UST CLOB MARKET SHARE1 UST CLOB MARKET SHARE1 FY 2020 (yr/yr change) Nasdaq CME Nasdaq Fixed 14% 10% Fenics UST BrokerTec Income SIFMA 12% Dealerweb 66% 11% 10% 9% 9% 6% Dec 20 2% 16% 4% CME Brokertec 3% 63% -23% -41% 1Q19 2Q19 3Q19 4Q19 1Q20 2Q20 3Q20 4Q20 BUS
Slide 9: Fenics GO
FENICS GO 9 HIGHLIGHTS MARKET SHARE ESTIMATES1 EURO STOXX 50 NIKKEI 225 Record volumes in 4Q20, up more (EUREX) (OSE) than 600% from last year and 49% from 3Q20 13.6% 10.8% 10.1% 7.5% 5.4% 5.9% 5.3% 6.0% 4.1% 4.2% 4.0% 3.5% OTC Trading Platform of the Year by Risk.net and Risk magazine 0.8% 0.6% NMF
Slide 10: Data, Software and Post-Trade
DATA, SOFTWARE AND POST-TRADE 10 HIGHLIGHTS REVENUE PERFORMANCE (excluding inter-company revenues) MARKET DATA OPPORTUNITY 1 At an estimated $32 billion per annum, the global consumption Lucera and Capitalab NDF Matching of market data continues to reach record levels $82M grew 45% and 27% respectiv
Slide 11: BGC Insurance is now Corant Global
BGC INSURANCE IS NOW CORANT GLOBAL 11 EACH FIRM WILL CONTINUE TO OPERATE UNDER THEIR SEPARATE BRANDS AND CORANT WILL BECOME THE ULTIMATE HOLDING COMPANY1 SELECT CORANT INSURANCE BROKERAGE PRODUCTS Accident & Aerospace Cargo & Cyber Construction Energy Fine art, Financial & Risk Professional Property
Slide 12: Overview: Corant
OVERVIEW: CORANT 12 BROKERAGE REVENUE PROPERTY & CASUALTY HIGHLIGHTS PERFORMANCE OPPORTUNITY Pre-tax Adjusted Earnings turned $183M profitable in the fourth quarter $156M $1.6T <1% $69M GWP1 Record fourth quarter & full year revenue due to improved broker productivity, new businesses, and FY 18 FY 1
Slide 13: Outlook: 1Q21
OUTLOOK: 1Q21 13 13 Guidance Actual Metric (USD million) 1Q21 1Q20 Revenues $540-590 $603.2 Pre-tax Adjusted Earnings $102-122 $112.1 Metric (%) FY 2021 FY 2020 Adjusted Earnings Tax Rate 10-12% 11.0% BGC’s revenue was approximately 1 percent higher year-on-year for the first 34 trading days of th
Slide 14: GAAP Financial Results
BGC PARTNERS, INC. GAAP FINANCIAL RESULTS
Slide 15: Condensed Consolidated Statements of Financial Condition
BGC PARTNERS, INC. CONDENSED CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION 15 (IN THOUSANDS, EXCEPT PER SHARE DATA) (UNAUDITED) (UNDER GAAP) December 31, December 31, 2020 2019 Assets Cash and cash equivalents $ 593,646 $ 415,379 Cash segregated under regulatory requirements 257,031 220,735 Securit
Slide 16: Condensed Consolidated Statements of Operations (1/2)
BGC PARTNERS, INC. CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (1/2) 16 (IN THOUSANDS, EXCEPT PER SHARE DATA) (UNAUDITED) (UNDER GAAP) Three Months Ended December 31, Year Ended December 31, Revenues: 2020 2019 2020 2019 Commissions $ 377,146 $ 382,897 $ 1,567,668 $ 1,645,818 Principal transacti
Slide 17: Condensed Consolidated Statements of Operations (2/2)
BGC PARTNERS, INC. CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (2/2) 17 (IN THOUSANDS, EXCEPT PER SHARE DATA) (UNAUDITED) (UNDER GAAP) Three Months Ended December 31, Year Ended December 31, 2020 2019 2020 2019 Per share data: Basic earnings (loss) per share Net income (loss) available to common
Slide 18: Appendix I
BGC PARTNERS, INC. APPENDIX I
Slide 19: Corporate Update
CORPORATE UPDATE 19 2021 CAPITAL Priorities are to return capital to stockholders and to continue investing in high growth Fenics businesses ALLOCATION Focus on share and unit repurchases over dividends and distributions PRIORITIES Plans to reassess its current dividend and distribution with a
Slide 20: Front Office Headcount & Productivity
FRONT OFFICE HEADCOUNT & PRODUCTIVITY 20 FRONT OFFICE HEADCOUNT AND PRODUCTIVITY (Productivity in USD 000s) (Excludes Insurance Brokerage) $748 $747 $753 $750 $744 $736 $749 2,600 2,550 $735 2,500 2,450 2,400 2,350 2,300 2,250 2,200 2,150 2,100 FENICS IS EXPECTED TO DRIVE 2,050 2,000 1,950 INCREASED
Slide 21: BGC's Fully Diluted Share Count Summary as of 12/31/20
BGC’S FULLY DILUTED SHARE COUNT SUMMARY AS OF 12/31/20 21 21 BGC Partners, Inc. Fully Diluted Share Count Summary Fully-diluted Shares Ownership (%) (as of December 31, 2020) (millions) Public 305.9 55% Class A owned by Public 305.9 55% Employees 149.0 27% Class A owned by executives, board members
Slide 22: Strongly Capitalized; Investment Grade Credit Profile
STRONGLY CAPITALIZED; INVESTMENT GRADE CREDIT PROFILE 22 BGC Partners, Inc. As of 12/31/2020 22 Cash and Cash Equivalents $593,646 Securities Owned 58,572 Marketable Securities 349 Total Liquidity $652,567 Maturity 5.125% Senior Notes 05/27/2021 255,570 Collateralized Borrowings 5/31/2021, 4/8/2023,
Slide 23: Industry Volumes
INDUSTRY VOLUMES 23 Energy & Equity Derivatives & Rates Credit FX Commodities Cash Equities 4Q20: Industry Volumes % Change (yr/yr) Cash1: 7% 36% 10% n/a 31% Derivatives1: (3)% 17% 2% 5% 27% 1Q21TD: Industry Volumes % Change (yr/yr) Cash2: 11% 57% (3)% n/a 8% Derivatives2: 1% 2% 2% (18)% 23% 1. 4Q20
Slide 24: Ecosystem Powering the Capital Markets
ECOSYSTEM POWERING THE CAPITAL MARKETS 24 TRADE EXECUTION CONNECTIVITY Stand-alone Fully Electronic Platforms: Co-located Infrastructure and PRE-TRADE EXECUTION EXECUTION Fenics Integrated: Connectivity Smart Order Routing Liquidity & Price Aggregation Rates: USTs, EGBs, Gilts, EM, IRDs Reve
Slide 25: Non-GAAP Definitions and Reconciliation Tables
BGC PARTNERS, INC. NON-GAAP DEFINITIONS AND RECONCILIATION TABLES
Slide 26: Reconciliation of GAAP Income to Adjusted Earnings
RECONCILIATION OF GAAP INCOME (LOSS) FROM OPERATIONS BEFORE INCOME TAXES TO ADJUSTED EARNINGS & GAAP FULLY DILUTED EPS TO POST-TAX ADJUSTED EPS 26 (IN THOUSANDS, EXCEPT PER SHARE DATA) (UNAUDITED) Q4 2020 Q4 2019 FY 2020 FY 2019 GAAP income (loss) from operations before income taxes $ (19,473) $ (29
Slide 27: Reconciliation of GAAP Income to Adjusted Earnings (Notes)
RECONCILIATION OF GAAP INCOME (LOSS) FROM OPERATIONS BEFORE INCOME TAXES TO ADJUSTED EARNINGS & GAAP FULLY DILUTED EPS TO POST-TAX ADJUSTED EPS 27 (IN THOUSANDS, EXCEPT PER SHARE DATA) (UNAUDITED) (1) The components of equity-based compensation and allocations of net income to limited partnership un
Slide 28: Reconciliation of GAAP Net Income to Adjusted EBITDA
RECONCILIATION OF GAAP NET INCOME (LOSS) AVAILABLE TO COMMON STOCKHOLDERS TO ADJUSTED EBITDA (IN THOUSANDS) 28 (UNAUDITED) GAAP net income (loss) available to common stockholders $ Q4 2020 (2,338) $ Q4 2019 (20,561) $ FY 2020 48,908 $ 28FY 2019 47,562 Add back: Provision (benefit) for income taxes (
Slide 29: Fully Diluted Weighted-Average Share Count and Liquidity Analysis
FULLY DILUTED WEIGHTED-AVERAGE SHARE COUNT UNDER GAAP AND FOR ADJUSTED EARNINGS & LIQUIDITY ANALYSIS (IN THOUSANDS) 29 (UNAUDITED) 29 FULLY DILUTED WEIGHTED AVERAGE SHARE COUNT LIQUIDITY ANALYSIS Q4 2020 Q4 2019 FY 2020 FY 2019 December 31, 2020 December 31, 2019 Common stock outstanding 365,259 351
Slide 30: Differences Between Non-GAAP and GAAP Consolidated Results
DIFFERENCES BETWEEN NON-GAAP AND GAAP CONSOLIDATED RESULTS 30 30 NON-GAAP FINANCIAL MEASURES This document contains non-GAAP financial measures that differ from the most directly comparable measures calculated and presented in accordance with Generally Accepted Accounting Principles in the United St
Slide 31: Differences Between Non-GAAP and GAAP Results (Continued)
DIFFERENCES BETWEEN NON-GAAP AND GAAP CONSOLIDATED RESULTS 31 (CONTINUED) All share equivalents that are part of the Company’s equity-based compensation program, including REUs, PSUs, LPUs, HDUs, and other units that may be made exchangeable into common stock, as well as RSUs (which are recorded usi
Slide 32: Differences Between Non-GAAP and GAAP Results (Continued)
DIFFERENCES BETWEEN NON-GAAP AND GAAP CONSOLIDATED RESULTS 32 (CONTINUED) After application of these adjustments, the result is the Company’s taxable income for its pre-tax Adjusted Earnings, to which BGC then applies the statutory tax rates to determine its non-GAAP tax provision. BGC views the eff
Slide 33: Differences Between Non-GAAP and GAAP Results (Continued)
DIFFERENCES BETWEEN NON-GAAP AND GAAP CONSOLIDATED RESULTS 33 (CONTINUED) ADJUSTED EBITDA DEFINED BGC also provides an additional non-GAAP financial performance measure, “Adjusted EBITDA”, which it defines as GAAP “Net income (loss) available to common stockholders”, adjusted to add back the followi
Slide 34: Appendix II: Prior Periods' Financial Statement Revisions
APPENDIX II PRIOR PERIODS’ FINANCIAL STATEMENT REVISIONS
Slide 35: Condensed Consolidated Statements of Financial Condition
BGC PARTNERS, INC. CONDENSED CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION 35 (IN THOUSANDS, EXCEPT PER SHARE DATA) (UNAUDITED) (UNDER GAAP) As Reported As Revised December 31, 2019 Adjustments December 31, 2019 Assets Cash and cash equivalents $ 415,379 — $ 415,379 Cash segregated under regulatory
Slide 36: Condensed Consolidated Statements of Operations
BGC PARTNERS, INC. CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS 36 (IN THOUSANDS, EXCEPT PER SHARE DATA) (UNAUDITED) (UNDER GAAP) As Reported As Revised As Reported As Revised Q4 2019 Adjustments Q4 2019 FY 2019 Adjustments FY 2019 Revenues: Commissions $ 382,897 — $ 382,897 $ 1,645,818 — $ 1,645
Slide 37: Reconciliation of GAAP Income to Adjusted Earnings (Revised)
RECONCILIATION OF GAAP INCOME (LOSS) FROM OPERATIONS BEFORE INCOME TAXES TO ADJUSTED EARNINGS & GAAP FULLY DILUTED EPS TO POST-TAX ADJUSTED EPS 37 (IN THOUSANDS, EXCEPT PER SHARE DATA) (UNAUDITED) As Reported As Revised As Reported As Revised GAAP income (loss) before income taxes $ Q4 2019 (24,461)
Slide 38: Reconciliation of GAAP Net Income to Adjusted EBITDA (Revised)
RECONCILIATION OF GAAP NET INCOME (LOSS) AVAILABLE TO COMMON STOCKHOLDERS TO ADJUSTED EBITDA (IN THOUSANDS) 38 (UNAUDITED) As Reported As Revised As Reported As Revised Q4 2019 Adjustments Q4 2019 FY 2019 Adjustments 38 FY 2019 GAAP net income (loss) available to common stockholders $ (16,243) $ (4,
Slide 39: Media and Investor Contact
39 39 Media Contact: Karen Laureano-Rikardsen +1 212-829-4975 Investor Contact: ir.bgcpartners.com Jason Chryssicas twitter.com/bgcpartners +1 212-610-2426 linkedin.com/company/bgc-partners