Intercontinental Exchange Inc. · NYSE:ICE
Intercontinental Exchange — Investor Presentation (September 2021)
40 slides from Intercontinental Exchange's investor presentation, September 2021
Slide 1: Investor Overview 2021
Investor Overview 2021 re cS [|
Slide 2: Cautionary Statement Regarding Forward Looking Statements
CAUTIONARY STATEMENT REGARDING FORWARD LOOKING STATEMENTS This presentation may contain “forward-looking statements” made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Statements regarding ICE’s business that are not historical facts are forward-look
Slide 3: ICE Overview
ICE Overview
Slide 4: Overview
Overview ICE is a leading global provider of data services and technology solutions to a broad range of customers including financial institutions, corporations and government entities. By combining our world class technology with our data services and operating expertise, we add transparency and en
Slide 5: Two Decades of Innovation & Growth
Two Decades of Innovation & Growth Exchanges Fixed Income & Data Services Mortgage Technology Leveraging trading & With ICE’s fixed income clearing infrastructure, pricing & reference data ICE adds to its energy ICE acquires the New ICE expands its futures as a foundation, ICE futures network throug
Slide 6: A Leading Global Provider of Data and Technology
A Leading Global Provider of Data and Technology We design, build and operate digital networks across asset classes Exchanges Fixed Income & Data Mortgage Technology Exchanges across the major asset Electronification of the fixed income Digitization of the U.S. residential classes, including energy.
Slide 7: A Proven Model for Long-Term Growth
A Proven Model for Long-Term Growth ~$6 billion+ Balanced Recurring & ’20 Total Revenues Diverse Transaction- Based Revenue Growth ~59% ’20 Adjusted Operating Margins Invest in Business and Strong Operating Margins Rising Capital Return 48% Recurring Revenues1 Strong Cash Flow & ROIC ~$2 billion+ ’2
Slide 8: Consistent Track Record of Growth
Consistent Track Record of Growth 15 consecutive years of Adj. EPS growth $4.41 $3.79 $3.53 $2.93 $2.76 $2.42 $1.93 $1.68 $1.50 $1.38 $1.07 $0.83 $0.85 $0.68 $0.48 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 7 (1) 2013-2020 are adjusted figures that represent non-GAAP
Slide 9: Business Overview
Business Overview
Slide 10: Balanced Recurring and Diverse Mix of Transaction Revenues
Balanced Recurring and Diverse Mix of Transaction Revenues 48% Recurring Revenues1 Balanced Revenue Mix1 Diversified Recurring Revenue1 Diversified Transaction Revenue1 FY20 $3.2B, +6% y/y FY20 $3.4B, +23% y/y Mortgage Technology 18% Mortgage Technology 13% Mortgage Exchange Data & Technology Conn S
Slide 11: Exchanges
Exchanges A global network of exchanges and clearing services across the major asset classes The Exchanges segment includes: ▪ Global futures network, including Energy Exchanges1 ▪ New York Stock Exchange (NYSE) trading and listings revenue 55% ▪ Various data services that are directly related to ou
Slide 12: Energy: A Leading Global Energy & Environmental Network
Energy: A Leading Global Energy & Environmental Network Helping Customers Navigate Complex Global Energy Markets & the Energy Transition Diverse Global Energy Revenue Mix FY’20 Energy Revenue $1.1Bn Environmentals & Other 14% Brent 30% Global Natural Gas 30% Other Oil 26% 11
Slide 13: Diverse Energy Suite Driving Consistent Growth
Diverse Energy Suite Driving Consistent Growth Energy Average Daily Volume (ADV) $s in millions Energy Revenue 3.5 5% 7% 3.0 CAGR $1,120 CAGR 2.5 Lots in millions $804 2.0 1.5 1.0 0.5 0.0 2015 2020 2015 2020 Global Oil Global Natural Gas Global Environmentals Other 2015 – 2020 Revenue Growth • Globa
Slide 14: Secular Tailwinds Driving Growth in Energy
Secular Tailwinds Driving Growth in Energy The energy transition & growing complexity driving demand for greater efficiency and more precise risk management tools Globalization of natural gas & rise of LNG driving emergence of TTF as global gas benchmark Evolution of energy markets drive the need fo
Slide 15: Diversified Growth Across Other Futures
Diversified Growth Across Other Futures Other Futures Average Daily Volume1 $s in millions Other Futures Revenue1 (ADV) 3.0 4% 6% CAGR $597 2.5 CAGR $501 Lots in millions 2.0 1.5 1.0 0.5 0.0 2015 2020 2015 2020 Ags Rates Other Financials 2015 – 2020 Revenue Growth • Ags: 3% Revenue CAGR • Equity Ind
Slide 16: Balanced Growth Across Financial Futures
Balanced Growth Across Financial Futures Financial Futures ADV1 ICE Financial Futures Revenue Mix1 Other Financials 6% 1% CAGR 2.5 (7)% CAGR Lots in millions 9% CAGR 2.0 1.5 Equity Interest 6% CAGR Index Rates Futures 55% 1.0 44% 0.5 0.0 2015 2020 Other Financials Equity Index Futures Interest Rates
Slide 17: NYSE is the #1 Listing and Trading Venue in the World
NYSE is the #1 Listing and Trading Venue in the World The world’s largest and most trusted equities exchange, leading ETF exchange and best-in-class technology Listing Leadership & Innovation Trading Leadership ■ #1 listings venue globally with $81.8 billion in ■ Leading cash equities market share I
Slide 18: Fixed Income & Data Services
Fixed Income & Data Services Combining data, analytics and technology-driven execution to drive workflow efficiencies Fixed Income & Data Services segment includes: ▪ Fixed income data & analytics including pricing and reference data and our index business Fixed Income ▪ Other multi-asset class data
Slide 19: Fixed Income: Electronic Workflow Solutions
Fixed Income: Electronic Workflow Solutions Pre-trade insight Pricing, Reference Data & Indices Analytics • Leading provider of evaluated pricing on ~3M securities • Best Execution • Portfolio Analytics Pre-trade Data • Reference data covering ~33M securities • TCA • Curves & Analytics • 2nd largest
Slide 20: Data Fueling Compounding Growth
Data Fueling Compounding Growth Fixed Income & Data Services Annual Subscription Value (ASV) 5-6% $1,600 CAGR 85% $1,500 of Segment Revenues are $1,400 Recurring $s in millions $1,300 $1,200 ~5-6% $1,100 ASV Growth $1,000 19
Slide 21: Mortgage Technology
Mortgage Technology Facilitating an analog-to-digital conversion across the mortgage origination workflow Mortgage Tech1 Our Mortgage Technology segment includes: 18% ▪ Our leading origination technology, Encompass, and the ICE Mortgage Technology Network ▪ Closing solutions including eClose, eNotes
Slide 22: Mortgages: End-to-End Digital Workflow Solutions
Mortgages: End-to-End Digital Workflow Solutions ICE Mortgage Technology Servicers Brokers End-to-end digital network and data sets combined with analytics & tools, critical to automating disconnected and disparate processes across the mortgage workflow Regulators Lead Gen & Mtg. Insurers Large addr
Slide 23: Workflow Inefficiencies Present Large Addressable Market
Workflow Inefficiencies Present Large Addressable Market Lead Pre- Processing & Generation & Closing Post-Closing Secondary Underwriting Closing Application Loan Origination Costs Rising Total Addressable Market ~$8,000/loan 2x increase ~$10 Billion Targeted Total ~$2,600+ customer Addressable savin
Slide 24: Financial Overview
Financial Overview
Slide 25: Consistent Growth and Value Creation
Consistent Growth and Value Creation $s in millions Total Revenue Recurring Revenues $6,036 18% 48% CAGR 38% $3,338 $1,149 9% 2010 2015 2020 2010 2015 2020 $s in millions Free Cash Flow Adj. EPS1 15% $4.41 17% $2,402 CAGR CAGR $2.42 $1,034 $486 $1.07 2010 2015 2020 2010 2015 2020 24 (1) 2013-2020 ar
Slide 26: Strong Balance Sheet & Low Capital Intensity
Strong Balance Sheet & Low Capital Intensity As of 6/30/2021: Balance Sheet Investments: $602M unrestricted cash Euroclear 9.8% 2021E CapEx $430M - $450M OCC 40% Total Debt of $14.5Bn Bondlink 35% Gross Debt to Adj. EBITDA1 of 3.4x Debt Profile (in millions) $800 4.0% $400 3.45% $1,000 .70% $1,250 $
Slide 27: Strong Capital Return
Strong Capital Return Ellie Mae acquired in Capital Return Philosophy $2,081 2020 $1,916 $1,753 Dividend Growth ▪ Grow the dividend as the company grows $1,425 ▪ Double-digit increase on avg. since 2013 $1,460 $1,247 $1,198 Share Repurchases $991 $944 $949 $693 IDC acquired in 2015 ▪ 100% of excess
Slide 28: A Disciplined Approach to M&A
A Disciplined Approach to M&A Disciplined Analytical Process Proactive Approach to Identifying Potential Targets ▪ Rigorous Financial Criteria & Strict Valuation Principles ▪ Target returns greater than 10% Leverage deep relationships with ▪ ROIC above the cost of capital, with consistent growth cus
Slide 29: About Intercontinental Exchange
About Intercontinental Exchange Intercontinental Exchange, Inc. (NYSE: ICE) is a Fortune 500 company that designs, builds and operates digital networks to connect people to opportunity. We provide financial technology and data services across major asset classes that offer our customers access to mi
Slide 30: For Additional Information
For Additional Information Investor Relations website: www.ir.theice.com Investor Relations contacts: Mary Caroline O'Neal, CPA Director, Investor Relations [email protected] [email protected] 29
Slide 31: Appendix
Appendix
Slide 32: Overview of ICE Exchanges Key Products
Overview of ICE Exchanges Key Products Description Revenue Model ▪ Global Oil complex including global crude benchmark Brent ▪ Brent prices 2/3 of the world’s internationally traded oil ▪ Suite of 700+ global product and locational spreads enable commercial customers more precise hedging tools ▪ Glo
Slide 33: Overview of ICE Exchanges Key Products (Connectivity)
Overview of ICE Exchanges Key Products Description Revenue Model ▪ Cash equity and equity options trading at the NYSE Cash Equities & Equity Options ▪ NYSE is a leading provider of market quality to large corporates, exchange-traded product issuers and investors ▪ Unique hybrid designated market mak
Slide 34: Overview of ICE Fixed Income & Data Services Key Products
Overview of ICE Fixed Income & Data Services Key Products Description Revenue Model ▪ Leading provider of end-of-day and real-time price evaluations on ~3 million fixed income securities spanning ~151 countries and 73 Fixed Income Data & currencies including sovereign, corporate and municipal bonds,
Slide 35: Overview of ICE Mortgage Technology Key Products
Overview of ICE Mortgage Technology Key Products Description Revenue Model Origination Technology ▪ Encompass, loan origination system, is an all-in-one SaaS-based mortgage origination platform providing mission-critical workflow management and vendor connectivity. ▪ Our origination technology acts
Slide 36: 5 Year Financial Performance
5 Year Financial Performance in millions except per share amounts INCOME STATEMENT 5 Year HIGHLIGHTS 2020 2019 2018 2017 2016 2015 CAGR Net Revenues $6,036 $5,202 $4,979 $4,638 $4,513 $3,338 13% Adj. Op Expenses $2,495 $2,189 $2,071 $1,948 $1,955 $1,365 13% Adj. Op Income $3,541 $3,013 $2,908 $2,691
Slide 37: 2021 Guidance
2021 Guidance ▪ 3Q21 recurring revenues $870 - $885 million ▪ 3Q21 exchanges recurring revenue $324 - $329 million ▪ 3Q21 fixed income & data services recurring revenue $409 - $414 million ▪ 3Q21 mortgage technology segment recurring revenue $137 - $142 million ▪ FY adj. expenses $2.95B - $2.98B ▪ 3
Slide 38: Adjusted Net Income and EPS
Adjusted Net Income and EPS Twelve Months Ended Twelve Months Ended 12/31/2020 12/31/2019 Net income attributable to ICE common stockholders $ 2,089 $ 1,933 Add: Amortization of acquisition-related intangibles 388 309 Add: Transaction and integration costs and acquisition-related success fees 101 —
Slide 39: Adjusted Net Income and EPS
Adjusted Net Income and EPS Twelve Months Twelve Months Twelve Months Twelve Months Twelve Months Twelve Months in millions except per share amounts Ended 12/31/18 Ended 12/31/17 Ended 12/31/16 Ended 12/31/15 Ended 12/31/14 Ended 12/31/13 Net income attributable to ICE $1,988 $2,526 $1,429 $1,274 $9
Slide 40: Adjusted EBITDA Reconciliation
Adjusted EBITDA Reconciliation Twelve Months Ended in millions 12/31/20 Adjusted net income $2,500 Add: Adjusted interest expense(1) 338 Add: Adjusted income tax expense(1) 751 Add: Adjusted depreciation and amortization(1) 352 Adjusted EBITDA from Continuing Ops $3,941 Pro forma EBITDA (pre acquisi
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