Bgc Group, Inc. · NASDAQ:BGC

Bgc — BGC Partners — Q4 2019 Earnings Presentation

38 slides from Bgc's earnings presentation, February 2020

  1. Slide 1: BGC Partners, Inc. Earnings Presentation 4Q2019

    BGC PARTNERS, INC. NASDAQ: BGCP Earnings Presentation 4Q2019

  2. 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

  3. Slide 3: Disclaimer (Continued)

    DISCLAIMER (CONTINUED) 3 Non-GAAP Financial Measures This presentation should be read in conjunction with BGC’s most recent financial results press releases and filings or reports on Form 10-K, Form 10-Q or Form 8- K. Throughout this presentation, BGC refers to certain non-GAAP financial measures, i

  4. Slide 4: General Overview

    ml BGC PARTNERS, INC. 7 bge (5 %F' Fenics GENERAL OVERVIEW

  5. Slide 5: Select Consolidated Adjusted Earnings Financial Results

    SELECT CONSOLIDATED ADJUSTED EARNINGS FINANCIAL RESULTS 5 Highlights of Consolidated Adjusted Earnings Results from 4Q2019 4Q2018 Change (%) FY2019 FY2018 Change (%) Continuing Operations (USD thousands, except per share data) Revenues $487,156 $466,351 4.5% $2,104,231 $1,937,810 8.6% Pre-tax Adjust

  6. Slide 6: Revenue Breakdown by Geography

    REVENUE BREAKDOWN BY GEOGRAPHY 6 FY2019 & 4Q2019 Global Revenues APAC 16% FY 2019 APAC 15% Americas 31% Americas 30% 4Q 2019 EMEA 54% EMEA 55% ▪ Total Americas revenue up 4% in both 4Q2019 and FY2019 ▪ Europe, Middle East & Africa revenue up 5% in 4Q2019 and 9% in FY2019 ▪ Asia Pacific revenue up 5%

  7. Slide 7: 4Q2019 Revenue Breakdown by Asset Class

    4Q2019 REVENUE BREAKDOWN BY ASSET CLASS 7 4Q2019 total revenues were $487.2 million BGC’s Businesses at a Glance ▪ BGC maintains a highly diverse revenue base ▪ Overall industry volumes Data, software and typically seasonally strongest in post-trade and other 1, Rates , 27% 1st quarter, weakest in 4

  8. Slide 8: FY2019 Revenue Breakdown by Asset Class

    FY2019 REVENUE BREAKDOWN BY ASSET CLASS 8 FY2019 total revenues were $2.1 billion BGC’s Businesses at a Glance ▪ BGC maintains a highly diverse revenue base ▪ Overall industry volumes Data, software and typically seasonally strongest in post-trade and other 1, Rates , 28% 1st quarter, weakest in 4th

  9. Slide 9: BGC's Front Office Headcount & Productivity (Excluding Insurance Brokerage)

    BGC’S FRONT OFFICE HEADCOUNT & PRODUCTIVITY (EXCLUDING INSURANCE BROKERAGE) 9 FRONT OFFICE HEADCOUNT FRONT OFFICE PRODUCTIVITY (as of period-end) (period-average, USD Thousands) 760 750 2,553 2,561 2,534 2,545 2,570 177 167 4Q 2018 1Q 2019 2Q 2019 3Q 2019 4Q2019 4Q18 4Q19 FY 2018 FY 2019 ▪ Because r

  10. Slide 10: Business Overview 4Q2019 vs. 4Q2018

    BUSINESS OVERVIEW 4Q2019 VS. 4Q2018 10 Revenue Highlights Revenue Breakdown (USD $000s) ▪ Total revenues increased 4% YoY $487,156 $466,351 $14,383 ▪ Energy and commodities revenues increased 32% $13,025 $18,151 $18,169 $103,312 ▪ Revenues from equities, insurance, and other asset $90,294 Other clas

  11. Slide 11: Business Overview: Fenics

    BUSINESS OVERVIEW: FENICS 11 Fenics Net Revenue Growth1 4Q2019 Fenics Total Revenue Breakdown (USD millions) $278 $261 $223 $209 Data, software and Data, software $192 post trade (inter- and post trade company) 22% Equities and 26% other 2% $101 $78 $81 $71 FX Rates $48 9% 25% Credit 17% FY10 FY11 F

  12. Slide 12: BGC's Fenics (Fully Electronic) Revenue Growth

    BGC’S FENICS (FULLY ELECTRONIC) REVENUE GROWTH 12 Fenics (Fully Electronic) Revenues (USD $000s) 400,000 $357,286 350,000 $325,385 79,493 300,000 64,278 Fenics net revenues down 3% YoY 250,000 73,166 Fenics total revenues up 5% YoY 65,185 200,000 150,000 100,000 195,922 204,627 $79,584 $83,834 15,46

  13. Slide 13: Outlook

    ml BGC PARTNERS, INC. OUTLOOK

  14. Slide 14: Outlook (USD Millions)

    OUTLOOK (USD MILLIONS) 14 Metric Guidance Actual 1Q2020 1Q2019 Revenues $540-580 $544.8 Pre-tax Adjusted Earnings $90-106 $106.2 FY 2020 FY 2019 Adjusted Earnings Tax Rate (%) 10-12% 11.4% ▪ BGC expects to update its guidance toward the end of March

  15. Slide 15: GAAP Financial Results

    ml BGC PARTNERS, INC. GAAP FINANCIAL RESULTS

  16. Slide 16: Condensed Consolidated Statements of Financial Condition

    BGC PARTNERS, INC. CONDENSED CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION (IN THOUSANDS, EXCEPT PER SHARE DATA) (UNAUDITED) (UNDER GAAP) December 31, December 31, 2019 2018 16 Assets Cash and cash equivalents $ 415,379 $ 336,535 Cash segregated under regulatory requirements 220,735 80,243 Securiti

  17. Slide 17: Condensed Consolidated Statements of Operations

    BGC PARTNERS, INC. CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (IN THOUSANDS, EXCEPT PER SHARE DATA) (UNAUDITED) (UNDER GAAP) Three Months Ended December 31, Twelve Months Ended December 31, 17 Revenues: 2019 2018 2019 2018 Commissions $ 382,897 $ 372,370 $ 1,645,818 $ 1,511,522 Principal transa

  18. Slide 18: Condensed Consolidated 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 Year Ended December 31, December 31, 2019 2018 2019 2018 Per share data: Basic ear nings (lo ss) per shar e fr o m co ntinuing o per ati

  19. Slide 19: Appendix

    ml BGC PARTNERS, INC. APPENDIX

  20. Slide 20: BGC's Front Office Headcount & Productivity (Including Insurance Brokerage)

    BGC’S FRONT OFFICE HEADCOUNT & PRODUCTIVITY (INCLUDING INSURANCE BROKERAGE) 20 FRONT OFFICE HEADCOUNT FRONT OFFICE PRODUCTIVITY (as of period-end) (period-average, USD Thousands) 756 2,923 2,927 2,940 2,990 703 2,654 176 158 4Q 2018 1Q 2019 2Q 2019 3Q 2019 4Q2019 4Q18 4Q19 FY 2018 FY 2019 ▪ BGC’s no

  21. Slide 21: Strongly Capitalized; Investment Grade Credit Profile

    STRONGLY CAPITALIZED; INVESTMENT GRADE CREDIT PROFILE 21 (USD $000s) BGC Partners, Inc. As of 12/31/2019 Cash and Cash Equivalents $415,379 Securities Owned 57,525 Marketable Securities (net) 326 1 Total Liquidity $473,230 Maturity Unsecured senior revolving credit agreement 02/26/2021 68,948 5.125%

  22. Slide 22: BGC's Fully Diluted Share Count Summary as of December 31, 2019

    BGC’S FULLY DILUTED SHARE COUNT SUMMARY AS OF DECEMBER 31, 2019 22 (share count in millions) BGC Partners, Inc. Fully Diluted Share Count Summary Fully-diluted Ownership (as of December 31, 2019) Shares (MN) (%) Class A owned by Public 289.7 55% Class A owned by executives, board members and employe

  23. Slide 23: Fenics Revenues

    FENICS REVENUES 23 Quarterly Fenics Revenues1 (1Q2017-4Q2019) (USD millions) 100 93 93 90 86 85 87 84 80 80 73 75 71 70 67 66 59 53 60 48 44 53 53 46 43 50 46 45 40 38 40 30 19 18 18 15 15 17 18 18 20 13 13 14 14 10 18 16 17 21 20 21 14 13 13 14 15 15 0 1Q2017 2Q2017 3Q2017 4Q2017 1Q2018 2Q2018 3Q20

  24. Slide 24: 4Q2019 Industry Volumes Were Generally Down

    4Q2019 INDUSTRY VOLUMES WERE GENERALLY DOWN 24 2020 QTD Change in Capital Markets Activity 4Q2019: Yr/Yr Change in Capital Markets Activity1,2 (1/1/20-2/3/20)2,3 (ADV excl. Eurex Equity Derivatives) (ADV) CDS Notional Turnover (ISDA) (36%) U.S. Treasuries (Primary Dealer) (17%) Interest Rate Futures

  25. Slide 25: Average Exchange Rates

    AVERAGE EXCHANGE RATES 25 January 1 – January January 1 – January Currency 4Q2019 4Q2018 17, 2020 17, 2019 US Dollar 1.000 1.000 1.000 1.000 British Pound 1.288 1.287 1.309 1.278 Euro 1.107 1.141 1.114 1.144 Hong Kong Dollar 0.128 0.128 0.129 0.128 Singapore Dollar 0.734 0.727 0.742 0.737 Japanese Y

  26. Slide 26: Non-GAAP Definitions and Reconciliation Tables

    NON-GAAP DEFINITIONS AND RECONCILIATION TABLES

  27. Slide 27: Differences Between Non-GAAP and GAAP Consolidated Results

    DIFFERENCES BETWEEN NON-GAAP AND GAAP CONSOLIDATED RESULTS 27 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

  28. Slide 28: Differences Between Non-GAAP and GAAP Consolidated Results [Continued]

    DIFFERENCES BETWEEN NON-GAAP AND GAAP CONSOLIDATED RESULTS [CONTINUED] 28 The amounts of certain quarterly equity-based compensation charges are based upon the Company’s estimate of such expected charges during the annual period, as described further below under “Methodology for Calculating Adjusted

  29. Slide 29: Differences Between Non-GAAP and GAAP Consolidated Results [Continued]

    DIFFERENCES BETWEEN NON-GAAP AND GAAP CONSOLIDATED RESULTS [CONTINUED] 29 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 Adjusted

  30. Slide 30: Differences Between Non-GAAP and GAAP Consolidated Results [Continued]

    DIFFERENCES BETWEEN NON-GAAP AND GAAP CONSOLIDATED RESULTS [CONTINUED] 30 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

  31. Slide 31: Differences Between Non-GAAP and GAAP Consolidated Results [Continued]

    DIFFERENCES BETWEEN NON-GAAP AND GAAP CONSOLIDATED RESULTS [CONTINUED] 31 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

  32. Slide 32: Differences Between Non-GAAP and GAAP Consolidated Results [Continued]

    DIFFERENCES BETWEEN NON-GAAP AND GAAP CONSOLIDATED RESULTS [CONTINUED] 32 ▪ 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

  33. Slide 33: Reconciliation of GAAP Income from Continuing Operations 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) 33 Q4 2019

  34. Slide 34: Reconciliation of GAAP Income from Continuing Operations 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) 34 (1) The

  35. Slide 35: 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) 35 Q4 2019 Q4 2018 FY 2019 FY 2018 GAAP net income (loss) from continuing operations available to $ (16,243) $ (21,905) $ 55,707 $ 73,704 common stockholders A

  36. Slide 36: Liquidity Analysis from Continuing Operations

    LIQUIDITY ANALYSIS FROM CONTINUING OPERATIONS (IN THOUSANDS) (UNAUDITED) 36 December 31, December 31, 2019 2018 Cash and cash equivalents $ 415,379 $ 336,535 Repurchase agreements — (986) Securities owned 57,525 58,408 Marketable securities (1) 326 16,924 Total liquidity $ 473,230 $ 410,881 (1) As o

  37. Slide 37: Fully Diluted Weighted-Average Share Count Under GAAP and for Adjusted Earnings

    FULLY DILUTED WEIGHTED-AVERAGE SHARE COUNT UNDER GAAP AND FOR ADJUSTED EARNINGS FROM CONTINUING OPERATIONS (IN THOUSANDS) (UNAUDITED) 37 Q4 2019 Q4 2018 FY 2019 FY 2018 Common stock outstanding 351,431 331,382 344,332 322,141 Limited partnership units — — 114,006 — Cantor units — — 52,363 — Founding

  38. Slide 38: Media and Investor Contacts

    38 38 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

BGC Partners — Q4 2019 Earnings Presentation on 6ix