Bgc Group, Inc. · NASDAQ:BGC
Bgc — BGC Partners — Q3 2021 Earnings Presentation
32 slides from Bgc's earnings presentation, 2021
Slide 1: BGC Partners, Inc. Earnings Presentation 3Q 2021
BGC PARTNERS, INC. NASDAQ: BGCP E A R N I N G S P R E S E N TAT I O N 3 Q 2 0 2 1
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: 3Q 2021
HIGHLIGHTS OF CONSOLIDATED RESULTS: 3Q 2021 3 REVENUES: Highlights of Consolidated Results 3Q 2021 3Q 2020 Change $474M (USD millions, except per share data) Revenues $473.7 $455.0 4.1% Fenics Markets GAAP income (loss) from operations before income taxes (20.6) 17.3 NMF 18% Voice/Hybrid GAAP net in
Slide 4: Revenue by Asset Class & Geography
REVENUE BY ASSET CLASS & GEOGRAPHY 4 REVENUE BY ASSET CLASS GLOBAL REVENUE & LOCATIONS AMERICAS EMEA APAC Rates Data, Software & Post-trade and 27% Other1 3Q 2021 3Q 2021 3Q 2021 Revenues: Revenues: Revenues: 7% $136M $263M $75M Equity Derivatives & Cash 12% Equities 3Q 15% FX Edinburgh Dublin Copen
Slide 5: Overview: BGC
OVERVIEW: BGC 5 REVENUE PERFORMANCE MARGIN EXPANSION BGC continues to convert its Voice / Hybrid business into higher margin, technology-driven Fenics revenue Trailing Twelve Months Voice / Hybrid Fenics Insurance Other1 Pre-tax Adjusted Earnings 18.2% +0.4% yr/yr +19% yr/yr +19% yr/yr Pre-tax AE Ma
Slide 6: Overview: Fenics
OVERVIEW: FENICS 6 FENICS REVENUE REVENUE PERFORMANCE & CONTRIBUTION NET REVENUES: Fenics Net Revenue Contribution (excl. Insurance Brokerage) 21% $95M Fenics Net Revenue 17% +19% yr/yr 14% $95M 13% 14% 13% $384M $80M $11M 12% $319M $9M 9% $278M $261M $223M $209M $85M $192M $72M $101M 3Q20 3Q21 FY 2
Slide 7: FMX
FMX 7 FMX OVERVIEW LCH CLEARING AGREEMENT Clearing of U.S. futures & swaps will provide cross margin efficiencies against the The Company launched FMX, which combines its leading world’s deepest IRS clearing pool Fenics UST business and FMX Futures Platform1 IRS Initial Margin at Major CCPs2 JPX Lev
Slide 8: Fenics UST
FENICS UST 8 UST TRADING VOLUME1 CLOB MARKET SHARE2 UST CLOB MARKET SHARE2 3Q 2021 Quarterly Average (ADV yr/yr change) 19% Dealerweb3 CME Dealerweb3 Primary 17% (incl. former Nasdaq FI) Primary Fenics UST BrokerTec Dealerweb (incl. former Nasdaq FI) Dealer 17% 12% Dealer4 64% 61% 14% Fenics UST 12%
Slide 9: Lucera
LUCERA 9 HIGHLY RECURRING, COMPOUNDING SUBSCRIPTION REVENUE BASE & STRONG PIPELINE TO DRIVE GROWTH LUCERA BUSINESSES Connect LUMEMarkets Provides on-demand connectivity to over one thousand Low latency aggregator, providing a single access point across endpoints across buy-side clients, trading plat
Slide 10: Select Fenics Highlights
SELECT FENICS HIGHLIGHTS 10 Fenics Market Data signed 43 new contracts during the third quarter, with the total contracted value increasing by over 200% compared to last year Fenics Market Data has highly recurring and compounding subscription revenue Fenics MIDFX, the leading wholesale FX hedging p
Slide 11: Overview: Insurance Brokerage
OVERVIEW: INSURANCE BROKERAGE 11 TRANSACTION DETAILS INSURANCE BROKERAGE REVENUE Sale to The Ardonagh Group closed on November 1, 20211 3 Year CAGR: +39% BGC received approximately $535M in gross proceeds, subject to limited post-closing adjustments $52M $43M $40M Use of proceeds includes share repu
Slide 12: Outlook: 4Q 2021
OUTLOOK: 4Q 2021 12 12 Guidance Actual Metric (USD million) 4Q21 4Q20 Revenues $445 - $495 $479.4 Pre-tax Adjusted Earnings $80 - $100 $79.3 Metric (%) FY 2021 FY 2020 Adjusted Earnings Tax Rate 9 - 11% 10.8% BGC’s revenues, excluding Insurance Brokerage, were approximately 9 percent higher for th
Slide 13: GAAP Financial Results
BGC PARTNERS, INC. GAAP FINANCIAL RESULTS
Slide 14: Condensed Consolidated Statements of Financial Condition
BGC PARTNERS, INC. CONDENSED CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION 14 (IN THOUSANDS, EXCEPT PER SHARE DATA) (UNAUDITED) (UNDER GAAP) September 30, December 31, 2021 2020 Assets Cash and cash equivalents $ 450,830 $ 596,291 Cash segregated under regulatory requirements 19,059 257,115 Securit
Slide 15: Condensed Consolidated Statements of Operations
BGC PARTNERS, INC. CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS 15 (IN THOUSANDS, EXCEPT PER SHARE DATA) (UNAUDITED) (UNDER GAAP) Three Months Ended S eptember 30, Nine Months Ended S eptember 30, Revenues: 2021 2020 2021 2020 Commissions $ 367,016 $ 352,027 $ 1,192,004 $ 1,190,522 Principal tran
Slide 16: Appendix
MN BGC PARTNERS, INC. + bgc (5 SF! Fenics
Slide 17: Front Office Headcount & Productivity
FRONT OFFICE HEADCOUNT & PRODUCTIVITY 17 FRONT OFFICE HEADCOUNT AND PRODUCTIVITY (Productivity in USD 000s) (Excludes Insurance Brokerage) $791 2,700 TECHNOLOGY 2,650 $747 $736 2,600 $790 2,550 $753 2,500 $766 2,450 $749 $756 2,400 $735 $750 2,350 2,300 $770 2,250 2,200 2,150 2,100 2,050 2,000 $750
Slide 18: Fully Diluted Share Count Summary as of 9/30/21
BGC’S FULLY DILUTED SHARE COUNT SUMMARY AS OF 9/30/21 18 18 BGC Partners, Inc. Fully Diluted Share Count Summary Fully-diluted Shares Ownership (%) (as of September 30, 2021) (millions) Public 313.3 61% Class A owned by Public 313.3 61% Employees 102.9 20% Class A owned by executives, board members
Slide 19: Strongly Capitalized; Investment Grade Credit Profile
STRONGLY CAPITALIZED; INVESTMENT GRADE CREDIT PROFILE 19 BGC Partners, Inc. As of 9/30/2021 Cash and Cash Equivalents $450,830 19RATING INVESTMENT GRADE CREDIT Securities Owned 37,430 Investment Grade Credit Rated: Marketable Securities 348 • Fitch: BBB- (Outlook: Stable) Repurchase Agreements (2,
Slide 20: Fenics Ecosystem
FENICS ECOSYSTEM 20 MULTIPLE TRADING PROTOCOLS ACROSS A COMPREHENSIVE SET OF FINANCIAL INSTRUMENTS Equity Derivatives Data, Software & Rates Credit FX & Cash Equities Post-trade Key Products: Key Products: Key Products: Key Products: Key Products: Key Products: Key Products: Interest ▪Interest Rate
Slide 21: Fenics Growth Platforms Timeline
FENICS GROWTH PLATFORMS TIMELINE 21 Portfolio Match Launched Asian NDFs launched U.S. Repos launched Launched 4Q 2020 (Fenics FX) (Fenics UST) 3Q 2021 1Q 2021 3Q 2021 Off-the-runs & T-Bills launched Acquired Launched (Fenics UST) 1Q 2020 3Q 2019 3Q 2020 – 4Q 2020 Launched Acquired1 Launched Launched
Slide 22: BGC Revenue Correlation & Industry Volumes
BGC REVENUE CORRELATION & INDUSTRY VOLUMES 22 3Q21 vs. 3Q20 BGC Asset Class Industry Metric Correlation Industry Metric (Revenue) Volume Change vs. Eurex Interest Rate Derivatives (Total Contracts Traded) 0.78 14% Rates vs. Primary Dealer U.S. Government Securities Trading Volume (ADV) 0.75 9% vs. F
Slide 23: Non-GAAP Definitions and Reconciliation Tables
BGC PARTNERS, INC. NON-GAAP DEFINITIONS AND RECONCILIATION TABLES
Slide 24: 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 24 (IN THOUSANDS, EXCEPT PER SHARE DATA) (UNAUDITED) 24 Q3 2021 Q3 2020 GAAP income (loss) from operations before income taxes $ (20,633) $ 17,273 Pre-tax a
Slide 25: Reconciliation of GAAP Income to Adjusted Earnings (continued)
RECONCILIATION OF GAAP INCOME (LOSS) FROM OPERATIONS BEFORE INCOME TAXES TO ADJUSTED EARNINGS & GAAP FULLY DILUTED EPS TO POST-TAX ADJUSTED EPS 25 (IN THOUSANDS, EXCEPT PER SHARE DATA) (UNAUDITED) (1) The components of equity-based compensation and allocations of net income to limited partnership un
Slide 26: Reconciliation of GAAP Net Income to Adjusted EBITDA
RECONCILIATION OF GAAP NET INCOME (LOSS) AVAILABLE TO COMMON STOCKHOLDERS TO ADJUSTED EBITDA (IN THOUSANDS) 26 (UNAUDITED) 26 Q3 2021 Q3 2020 GAAP net income (loss) available to common stockholders $ (11,402) $ 8,850 Add back: Provision (benefit) for income taxes (6,692) 8,558 Net income (loss) attr
Slide 27: 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) 27 (UNAUDITED) 27 FULLY DILUTED WEIGHTED AVERAGE SHARE COUNT LIQUIDITY ANALYSIS Q3 2021 Q3 2020 S eptember 30, 2021 December 31, 2020 Common stock outstanding 387,121 363,244 RSUs — 21
Slide 28: Differences Between Non-GAAP and GAAP Consolidated Results
DIFFERENCES BETWEEN NON-GAAP AND GAAP CONSOLIDATED RESULTS 28 NON-GAAP FINANCIAL MEASURES 28 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 29: Differences Between Non-GAAP and GAAP Results (Continued)
DIFFERENCES BETWEEN NON-GAAP AND GAAP CONSOLIDATED RESULTS 29 (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 30: Differences Between Non-GAAP and GAAP Results (Continued)
DIFFERENCES BETWEEN NON-GAAP AND GAAP CONSOLIDATED RESULTS 30 (CONTINUED) 30 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
Slide 31: Differences Between Non-GAAP and GAAP Results (Continued)
DIFFERENCES BETWEEN NON-GAAP AND GAAP CONSOLIDATED RESULTS 31 (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 32: Media and Investor Contacts
32 32 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