Bgc Group, Inc. · NASDAQ:BGC
Bgc — BGC Partners — Q2 2019 Earnings Presentation
36 slides from Bgc's earnings presentation, Jul 25, 2019
Slide 1: BGC Partners, Inc. Earnings Presentation 2Q 2019
BGC PARTNERS, INC. NASDAQ: BGCP Earnings Presentation 2Q 2019
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: Disclaimer (Continued)
DISCLAIMER (CONTINUED) 3 For the purposes of this document, all of the Company’s fully electronic businesses may be collectively referred to as “Fenics”. Fenics includes revenues from fully electronic brokerage, as well as data, software, and post-trade services. Fenics results do not include those
Slide 4: Disclaimer (Continued) - Non-GAAP Financial Measures
DISCLAIMER (CONTINUED) 4 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 States (“GAAP”). Non-GAAP financial measur
Slide 5: General Overview
ml BGC PARTNERS, INC. 7 bge (5 °' Fenics GENERAL OVERVIEW
Slide 6: Select Consolidated Adjusted Earnings Financial Results
SELECT CONSOLIDATED ADJUSTED EARNINGS FINANCIAL RESULTS 6 Highlights of Consolidated Adjusted Earnings Results from Continuing Operations (USD 2Q 2019 2Q 2018 Change (%) thousands, except per share data) Revenues $551,187 $491,043 12.2% Pre-tax Adjusted Earnings 102,276 101,457 0.8% Post-tax Adjuste
Slide 7: Revenue Breakdown by Geography
REVENUE BREAKDOWN BY GEOGRAPHY 7 2Q 2019 Global Revenues were $551.2 million APAC 17% Americas 29% 2Q 2019 EMEA 54% Asia Pacific revenue up 32% in 2Q 2019 Europe, Middle East & Africa revenue up 11% in 2Q 2019 Total Americas revenue up 6% in 2Q 2019 2Q 2019 revenues would have been approxima
Slide 8: 2Q 2019 Revenue Breakdown by Asset Class
2Q 2019 REVENUE BREAKDOWN BY ASSET CLASS 8 2Q 2019 total revenues were $551.2 million BGC’s Businesses at a Glance Data, Software, Post-trade and Other 7% BGC maintains a highly diverse revenue base Revenue impacted by challenging market conditions for many of our clients Rates 28% Equities, ins
Slide 9: BGC's Front Office Headcount & Productivity
BGC’S FRONT OFFICE HEADCOUNT & PRODUCTIVITY 9 FRONT OFFICE HEADCOUNT FRONT OFFICE PRODUCTIVITY (as of period-end) (period-average, USD Thousands) 2,840 2,819 733 737 756 2,486 2,654 676 2,465 2Q 2018 3Q 2018 4Q 2018 1Q 2019 2Q 2019 Financial Brokerage TTM TTM FY 2017 FY 2018 2Q18 2Q19 Average reve
Slide 10: Business Overview 2Q 2019 vs. 2Q 2018
BUSINESS OVERVIEW 2Q 2019 VS. 2Q 2018 10 Revenue Highlights Revenue Breakdown $551,187 (USD $000s) Total revenues increased 12% YoY $21,045 $491,043 $12,198 31% revenue growth in energy and commodities $104,947 $18,741 $15,370 $87,965 19% revenue growth in equities, insurance and other $73,430
Slide 11: Business Overview: Fenics
BUSINESS OVERVIEW: FENICS 11 Fenics Net Revenue Growth1 2Q 2019 Fenics Revenue Breakdown2 (USD millions) $273 $261 Data, software and Data, software $223 post trade (inter- and post trade $209 20% Equities and $192 company) 23% other 2% FX $101 9% $71 $78 $81 Rates $48 26% Credit 20% FY10 FY11 FY12
Slide 12: BGC's Fenics (Fully Electronic) Revenue Growth
BGC’S FENICS (FULLY ELECTRONIC) REVENUE GROWTH 12 Fenics (Fully Electronic) Revenues (USD 000s) 350,000 $325,385 300,000 64,278 $276,866 250,000 54,015 Fenics net revenues up 5% yoy 65,185 Fenics total revenues up 10% yoy 200,000 54,557 150,000 100,000 195,922 $84,817 $92,949 168,294 16,126 21,161 1
Slide 13: Outlook
ml BGC PARTNERS, INC. OUTLOOK
Slide 14: Outlook
OUTLOOK 14 Metric Guidance Actual 3Q19 3Q18 Revenues (USD millions) $490 to $530 $455.6 Adjusted Earnings before noncontrolling interest in subsidiaries $80 to $95 $89.5 and taxes (USD millions) FY 2019 FY 2018 Adjusted Earnings Tax Rate (%) 11% to 12% 11.7% Year-end Fully Diluted Spot Share Count G
Slide 15: GAAP Financial Results
ml BGC PARTNERS, INC. GAAP FINANCIAL RESULTS
Slide 16: Statements of Financial Condition
BGC PARTNERS, INC. CONDENSED CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION (IN THOUSANDS, EXCEPT PER SHARE DATA) (UNAUDITED) (UNDER GAAP) 16 June 30, December 31, 2019 2018 Assets Cash and cash equivalents $ 399,429 $ 336,535 Cash segregated under regulatory requirements 216,690 80,243 Securities o
Slide 17: Statements of Operations
BGC PARTNERS, INC. CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (IN THOUSANDS, EXCEPT PER SHARE DATA) (UNAUDITED) (UNDER GAAP) 17 Three Months Ended June 30, Six Months Ended June 30, Revenues: 2019 2018 2019 2018 Commissions $ 420,969 $ 378,487 $ 850,489 $ 786,344 Principal transactions 90,432 8
Slide 18: Statements of Operations - Continued
BGC PARTNERS, INC. CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS - CONTINUED (IN THOUSANDS, EXCEPT PER SHARE DATA) (UNAUDITED) (UNDER GAAP) 18 Three Months Ended June 30, Six Months Ended June 30, 2019 2018 2019 2018 Per share data: Basic earnings (loss) per share from continuing operations Net in
Slide 19: Appendix
ml BGC PARTNERS, INC. APPENDIX
Slide 20: Strongly Capitalized; Investment Grade Credit Profile
STRONGLY CAPITALIZED; INVESTMENT GRADE CREDIT PROFILE 20 (USD $000s) BGC Partners, Inc. As of 6/30/2019 Cash and Cash Equivalents $399,429 Repurchase Agreements (1,100) Securities Owned 62,085 Marketable Securities (net) 482 Total Liquidity 1 $460,896 Maturity Unsecured senior revolving credit agree
Slide 21: BGC's Fully Diluted Share Count Summary as of June 30, 2019
BGC’S FULLY DILUTED SHARE COUNT SUMMARY AS OF JUNE 30, 2019 21 (share count in millions) Fully-diluted Ownership BGC Partners, Inc. Fully Diluted Share Count Summary Shares (MN) (%) Class A owned by Public 279.0 53% Class A owned by executives, board members and employees (1) 18.3 3% Partnership uni
Slide 22: Fenics Revenues
FENICS REVENUES 22 Quarterly Fenics Revenues1 (2Q2016-2Q2019) 100 93 93 (USD millions) 90 86 85 80 80 73 75 69 71 70 67 66 61 60 59 53 60 53 53 46 43 50 41 46 45 40 38 36 35 40 30 19 15 15 18 18 17 20 14 13 13 13 13 14 14 10 18 16 17 21 13 13 12 14 13 13 14 15 15 0 2Q2016 3Q2016 4Q2016 1Q2017 2Q2017
Slide 23: 2Q 2019 Industry Volumes Were Generally Mixed
2Q 2019 INDUSTRY VOLUMES WERE GENERALLY MIXED 23 3Q 2019TD Change in Capital Markets Activity 2Q 2019: Yr/Yr Change in Capital Markets Activity (7/1/19-7/12/19) (ADV excl. Eurex Equity Derivatives) (ADV excl. European Equities) Source: Bloomberg, Eurex, CME, ICE, Trax, ISDA, and Thomson Reuters Sour
Slide 24: Average Exchange Rates
AVERAGE EXCHANGE RATES 24 Currency 2Q 2019 2Q 2018 July 1 – July 19, 2019 July 1 – July 19, 2018 US Dollar 1.000 1.000 1.000 1.000 British Pound 1.285 1.360 1.253 1.319 Euro 1.123 1.192 1.125 1.168 Hong Kong Dollar 0.128 0.127 0.128 0.127 Singapore Dollar 0.734 0.749 0.736 0.733 Japanese Yen 109.969
Slide 25: Differences Between Non-GAAP and GAAP Consolidated Results
DIFFERENCES BETWEEN NON-GAAP AND GAAP CONSOLIDATED RESULTS 25 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 State
Slide 26: Differences Between Non-GAAP and GAAP Consolidated Results [Continued]
DIFFERENCES BETWEEN NON-GAAP AND GAAP CONSOLIDATED RESULTS [CONTINUED] 26 Allocations of net income to limited partnership units and FPUs. Such allocations represent the pro-rata portion of post-tax GAAP earnings available to such unit holders. The amount of certain quarterly equity-based compensa
Slide 27: Differences Between Non-GAAP and GAAP Consolidated Results [Continued]
DIFFERENCES BETWEEN NON-GAAP AND GAAP CONSOLIDATED RESULTS [CONTINUED] 27 Methodology for Calculating Adjusted Earnings Taxes Although Adjusted Earnings are calculated on a pre-tax basis, BGC also reports post-tax Adjusted Earnings to fully diluted shareholders. The Company defines post- tax Adjuste
Slide 28: Differences Between Non-GAAP and GAAP Consolidated Results [Continued]
DIFFERENCES BETWEEN NON-GAAP AND GAAP CONSOLIDATED RESULTS [CONTINUED] 28 Calculations of Pre- and Post-Tax Adjusted Earnings per Share BGC’s pre- and post-tax Adjusted Earnings per share calculations assume either that: The fully diluted share count includes the shares related to any dilutive ins
Slide 29: Differences Between Non-GAAP and GAAP Consolidated Results [Continued]
DIFFERENCES BETWEEN NON-GAAP AND GAAP CONSOLIDATED RESULTS [CONTINUED] 29 Adjusted EBITDA Defined BGC also provides an additional non-GAAP financial performance measure, “Adjusted EBITDA”, which it defines as GAAP “Net income (loss) from continuing operations available to common stockholders”, adjus
Slide 30: Differences Between Non-GAAP and GAAP Consolidated Results [Continued]
DIFFERENCES BETWEEN NON-GAAP AND GAAP CONSOLIDATED RESULTS [CONTINUED] 30 Certain equity-based compensation charges that may be determined at the discretion of management throughout and up to the period-end; Unusual, one-time, non-ordinary, or non-recurring items; The impact of gains or losses
Slide 31: Reconciliation of GAAP Income to Adjusted Earnings
RECONCILIATION OF GAAP INCOME (LOSS) FROM CONTINUING OPERATIONS BEFORE INCOME TAXES TO ADJUSTED EARNINGS FROM CONTINUING OPERATIONS AND GAAP FULLY DILUTED EPS FROM CONTINUING OPERATIONS TO POST- TAX ADJUSTED EPS FROM CONTINUING OPERATIONS (IN THOUSANDS, EXCEPT PER SHARE DATA) (UNAUDITED) 31 Q2 2019
Slide 32: Reconciliation of GAAP Income to Adjusted Earnings (notes)
RECONCILIATION OF GAAP INCOME (LOSS) FROM CONTINUING OPERATIONS BEFORE INCOME TAXES TO ADJUSTED EARNINGS FROM CONTINUING OPERATIONS AND GAAP FULLY DILUTED EPS FROM CONTINUING OPERATIONS TO POST- TAX ADJUSTED EPS FROM CONTINUING OPERATIONS (IN THOUSANDS, EXCEPT PER SHARE DATA) (UNAUDITED) 32 (1) GAAP
Slide 33: Reconciliation of GAAP Net Income to Adjusted EBITDA
RECONCILIATION OF GAAP NET INCOME (LOSS) FROM CONTINUING OPERATIONS TO ADJUSTED EBITDA FROM CONTINUING OPERATIONS (IN THOUSANDS) (UNAUDITED) 33 Q2 2019 Q2 2018 GAAP net income (loss) from continuing operations available to common stockholders $ 13,611 $ 20,001 Add back: Provision (benefit) for incom
Slide 34: Liquidity Analysis from Continuing Operations
LIQUIDITY ANALYSIS FROM CONTINUING OPERATIONS (IN THOUSANDS) (UNAUDITED) 34 June 30, 2019 December 31, 2018 Cash and cash equivalents $ 399,429 $ 336,535 Repurchase agreements (1,100) (986) Securities owned 62,085 58,408 Marketable securities (1) 482 16,924 Total Liquidity $ 460,896 $ 410,881 (1) As
Slide 35: Fully Diluted Weighted-Average Share Count Under GAAP and Adjusted Earnings
FULLY DILUTED WEIGHTED-AVERAGE SHARE COUNT UNDER GAAP AND FOR ADJUSTED EARNINGS FROM CONTINUING OPERATIONS (IN THOUSANDS) (UNAUDITED) 35 Q2 2019 Q2 2018 Common stock outstanding 341,272 321,199 Limited partnership units 115,433 — Cantor units 52,363 — Founding partner units 12,483 — RSUs 57 311 Othe
Slide 36: Media and Investor Contacts
36 36 Media Contact: Karen Laureano-Rikardsen +1 212-829-4975 Investor Contact: Ujjal Basu Roy or Jason McGruder ir.bgcpartners.com twitter.com/bgcpartners +1 212-610-2426 linkedin.com/company/bgc-partners