Bgc Group, Inc. · NASDAQ:BGC
Bgc — BGC Partners — Q1 2019 Earnings Presentation
37 slides from Bgc's earnings presentation, May 7, 2019
Slide 1: BGC Partners, Inc. Earnings Presentation 1Q 2019
BGC PARTNERS, INC. NASDAQ: BGCP Earnings Presentation 1Q 2019
Slide 2: Disclaimer
DISCLAIMER 2 Discussion of Forward-Looking Statements 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 statements. Exce
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 presentation should be read in conjunction with BGC’s most recent financial results press releases. Throughout this presentation, BGC refers to certain non-GAAP financial measures, including Adjusted Earnings, Adjusted EBITDA and Liquidity. A
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 1Q 2019 1Q 2018 Change (%) thousands, except per share data) Revenues $544,751 $524, 774 3.8% Pre-tax Adjusted Earnings 106,194 122,149 (13.1)% Post-tax Adju
Slide 7: Revenue Breakdown by Geography
REVENUE BREAKDOWN BY GEOGRAPHY 7 1Q 2019 1Q 2019 Global Revenues were $544.8 million APAC 15% Americas 29% 1Q 2019 EMEA 56% Asia Pacific revenue up 19% in 1Q 2019 Europe, Middle East & Africa revenue up 3% in 1Q 2019 Total Americas revenue down 1% in 1Q 2019 1Q 2019 revenues would have been
Slide 8: 1Q 2019 Revenue Breakdown by Asset Class
1Q 2019 REVENUE BREAKDOWN BY ASSET CLASS 8 1Q 2019 total revenues were $544.8 million BGC’s Businesses at a Glance Data, Software, Post-trade and Other 5% BGC maintains a highly diverse revenue base Revenue impacted by challenging market conditions for many of our Equities, insurance, clients, l
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) 2,840 744 756 2,654 708 676 2,468 2,465 2,486 1Q 2018 2Q 2018 3Q 2018 4Q 2018 1Q 2019 Financial Brokerage TTM TTM FY 2017 FY 2018 1Q18 1Q19 Average reve
Slide 10: Adjusted Earnings Expense & Pre-Tax Margin Trends
ADJUSTED EARNINGS EXPENSE & PRE-TAX MARGIN TRENDS 10 $1,500 50.8% 60% 52.9% 52.7% 52.7% $1,000 (USD millions) 40% $500 20% $0 0% FY 2017 FY 2018 1Q 2018 1Q 2019 Compensation and Employee Benefits Compensation and Employee Benefits as % of Total Revenue 30% 40% 31.3% 29.1% 20% 28.2% 30% 26.3% 20% 20.
Slide 11: Business Overview 1Q 2019
BUSINESS OVERVIEW 1Q 2019 11 Highlights 1Q 2019 Revenue Breakdown $524,774 $544,751 Total revenues increased 4% YoY $9.900 $13,091 $15,099 $100,989 16% revenue growth in energy and commodities $97,754 $17,910 19% revenue growth in data, software, and post- $60,149 $69,865 Other trade revenues
Slide 12: Business Overview: Fenics
BUSINESS OVERVIEW: FENICS 12 Fenics Net Revenue Growth1 1Q 2019 Fenics Revenue Breakdown2 (USD millions) Data, $261 $269 software and post trade Data, $223 $209 (inter- software and $192 company) post trade FX 18% 20% 8% $101 $71 $78 $81 $48 Credit 25% Rates 29% FY10 FY11 FY12 FY13 FY14 FY15 FY16 FY
Slide 13: BGC's Fenics (Fully Electronic) Revenue Growth
BGC’S FENICS (FULLY ELECTRONIC) REVENUE GROWTH 13 Fenics (Fully Electronic) Revenues (USD 000s) 350,000 $325,385 300,000 64,278 $276,866 250,000 54,015 Fenics net revenues up 12% yoy 65,185 Fenics total revenues up 9% yoy 200,000 54,557 150,000 100,000 195,922 $93,434 $85,922 168,294 17,556 16,694 1
Slide 14: Outlook
ml BGC PARTNERS, INC. OUTLOOK
Slide 15: Outlook
OUTLOOK 16 BGC expects to generate revenues of between $515 million and $555 million in 2Q2019, compared with $491 million a year earlier. The Company anticipates pre-tax Adjusted Earnings to be in the range of $89 million to $105 million in 2Q2019, versus $101.5 million in 2Q18. BGC expects i
Slide 16: GAAP Financial Results
ml BGC PARTNERS, INC. GAAP FINANCIAL RESULTS
Slide 17: Condensed Consolidated Statements of Financial Condition
BGC PARTNERS, INC. CONDENSED CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION (IN THOUSANDS, EXCEPT PER SHARE DATA) (UNAUDITED) (UNDER GAAP) 18
Slide 18: Condensed Consolidated Statements of Operations
BGC PARTNERS, INC. CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (IN THOUSANDS, EXCEPT PER SHARE DATA) (UNAUDITED) (UNDER GAAP) 19
Slide 19: Condensed Consolidated Statements of Operations - Continued
BGC PARTNERS, INC. CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS - CONTINUED (IN THOUSANDS, EXCEPT PER SHARE DATA) (UNAUDITED) (UNDER GAAP) 20 Three Months Ended March 31, 2019 2018 Per share data: Basic earnings (loss) per share from continuing operations Net income (loss) from continuing operati
Slide 20: Appendix
ml BGC PARTNERS, INC. APPENDIX
Slide 21: Strongly Capitalized; Investment Grade Credit Profile
STRONGLY CAPITALIZED; INVESTMENT GRADE CREDIT PROFILE 21 (USD $000s) 1. As of March 31, 2019, $25.1 million of Marketable securities on our balance were lent out in Securities loaned transactions and therefore are not included as part of our Liquidity Analysis.
Slide 22: BGC's Fully Diluted Share Count Summary as of March 31, 2019
BGC’S FULLY DILUTED SHARE COUNT SUMMARY AS OF MARCH 31, 2019 22 1. Class A shares owned by board members or executives and restricted shares owned by other employees. Any Class A share owned by an employee without restriction is included in the “Class A owned by Public”. 2. Partnership units owned b
Slide 23: Fenics Revenues
FENICS REVENUES 23 Quarterly Fenics Net Revenues1 (2016-2019) 100 93 (USD millions) 90 86 85 80 80 73 75 69 71 70 67 66 61 60 59 60 53 53 46 43 50 41 46 45 40 38 36 35 40 30 15 15 18 18 17 20 14 13 13 13 13 14 14 10 18 16 17 13 13 12 14 13 13 14 15 15 0 2Q2016 3Q2016 4Q2016 1Q2017 2Q2017 3Q2017 4Q20
Slide 24: 1Q 2019 Industry Volumes Were Generally Lower
1Q 2019 INDUSTRY VOLUMES WERE GENERALLY LOWER 24 2Q 2019TD Change in Capital Markets Activity 1Q 2019: Yr/Yr Change in Capital Markets Activity (4/1/2019 – 4/21/2019) (ADV excl. Eurex Equity Derivatives) (ADV excl. Eurex Equity Derivatives) Source: Bloomberg, Eurex, CME, ICE, Trax, ISDA, and Thomson
Slide 25: Average Exchange Rates
AVERAGE EXCHANGE RATES 25 1Q 2019 1Q 2018 April 1 – April 29, 2019 April 1 – April 29, 2018 US Dollar 1 1 1 1 British Pound 1.303 1.401 1.302 1.376 Euro 1.122 1.232 1.120 1.208 Hong Kong Dollar 0.127 0.127 0.127 0.127 Singapore Dollar 0.738 0.763 0.734 0.754 Japanese Yen 110.856 106.280 111.376 109.
Slide 26: Differences Between Non-GAAP and GAAP Consolidated Results
DIFFERENCES BETWEEN NON-GAAP AND GAAP CONSOLIDATED RESULTS 26 Differences between Non-GAAP and GAAP Consolidated Results As was previously disclosed, the Company has simplified and clarified its presentation of Adjusted Earnings and Adjusted EBITDA. BGC now excludes GAAP charges related to equity-ba
Slide 27: Differences Between Non-GAAP and GAAP Consolidated Results (Continued)
DIFFERENCES BETWEEN NON-GAAP AND GAAP CONSOLIDATED RESULTS [CONTINUED] 27 GAAP equity-based compensation charges with respect to the grant of an offsetting amount of common stock or partnership units with capital accounts in connection with the redemption of non-exchangeable units, including PSUs
Slide 28: Differences Between Non-GAAP and GAAP Consolidated Results (Continued)
DIFFERENCES BETWEEN NON-GAAP AND GAAP CONSOLIDATED RESULTS [CONTINUED] 28 As compared with “income (loss) from operations before income taxes” and “net income (loss) from operations per fully diluted share”, all prepared in accordance with GAAP, Adjusted Earnings calculations primarily exclude certa
Slide 29: Differences Between Non-GAAP and GAAP Consolidated Results (Continued)
DIFFERENCES BETWEEN NON-GAAP AND GAAP CONSOLIDATED RESULTS [CONTINUED] 29 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 30: Differences Between Non-GAAP and GAAP Consolidated Results (Continued)
DIFFERENCES BETWEEN NON-GAAP AND GAAP CONSOLIDATED RESULTS [CONTINUED] 30 Other Matters with Respect to Adjusted Earnings The term “Adjusted Earnings” should not be considered in isolation or as an alternative to GAAP net income (loss). The Company views Adjusted Earnings as a metric that is not ind
Slide 31: Outlook for Non-GAAP Items
DIFFERENCES BETWEEN NON-GAAP AND GAAP CONSOLIDATED RESULTS [CONTINUED] 31 Outlook for Non-GAAP Items BGC anticipates providing forward-looking guidance for GAAP revenues and for certain non-GAAP measures from time to time. However, the Company does not anticipate providing an outlook for other GAAP
Slide 32: Reconciliation of GAAP Income to Adjusted Earnings
RECONCILIATION OF GAAP INCOME (LOSS) FROM CONTINUING OPERATIONS 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 Q1 2019 Q1 2018 GAAP income (
Slide 33: Reconciliation of GAAP Income to Adjusted Earnings (Footnotes)
RECONCILIATION OF GAAP INCOME (LOSS) FROM CONTINUING OPERATIONS 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 (1) GAAP equity-based compens
Slide 34: Reconciliation of GAAP Income to Adjusted EBITDA
RECONCILIATION OF GAAP INCOME (LOSS) FROM CONTINUING OPERATIONS TO ADJUSTED EBITDA FROM CONTINUING OPERATIONS (IN THOUSANDS) (UNAUDITED) 34 (1) Primarily represents Cantor's pro-rata portion of net income. (2) Represents BGC employees' pro-rata portion of net income and non-cash and non-dilutive cha
Slide 35: Liquidity Analysis from Continuing Operations
LIQUIDITY ANALYSIS FROM CONTINUING OPERATIONS (IN THOUSANDS) (UNAUDITED) 35 (1) As of March 31, 2019 and December 31, 2018, $25.1 million and $15.1 million, respectively, of Marketable securities on our balance sheet were lent out in Securities loaned transactions and therefore are not included as p
Slide 36: Fully Diluted Weighted-Average Share Count
FULLY DILUTED WEIGHTED-AVERAGE SHARE COUNT FOR GAAP AND ADJUSTED EARNINGS FROM CONTINUING OPERATIONS (IN THOUSANDS) (UNAUDITED) 36
Slide 37: Media and Investor Contacts
37 37 Media Contact: Karen Laureano-Rikardsen +1 212-829-4975 Investor Contact: Jason McGruder Ujjal Basu Roy ir.bgcpartners.com twitter.com/bgcpartners +1 212-610-2426 +1 212-610-2426 linkedin.com/company/bgc-partners