Intercontinental Exchange Inc. · NYSE:ICE
Intercontinental Exchange — Investor Presentation (December 2021)
41 slides from Intercontinental Exchange's investor presentation, December 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 ~$7 billion Balanced Recurring & Total Revenues1 Diverse Transaction- Based Revenue Growth ~58% Adjusted Operating Margins1 Invest in Business and Strong Operating Margins Rising Capital Return 49% Recurring Revenues1 Strong Cash Flow & ROIC ~$2.8 billion Free Cas
Slide 8: Consistent Track Record of Growth
Consistent Track Record of Growth 15 consecutive years of Adj. EPS growth $4.41 $3.79 $3.80 $3.53 $3.26 $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 YTD 3Q21 (1) 2013-2021 YTD adjusted figures repre
Slide 9: Business Overview
Business Overview
Slide 10: Balanced Recurring and Diverse Mix of Transaction Revenues
Balanced Recurring and Diverse Mix of Transaction Revenues 49% Recurring Revenues1 Balanced Revenue Mix Diversified Recurring Revenue Diversified Transaction Revenue YTD 3Q21 $2.6B, +10% y/y YTD 3Q21 $2.7B, +4% y/y Mortgage Technology Mortgage 20% Technology 15% Exchange Data & Conn Svcs Mortgage 24
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 Exchanges ▪ New York Stock Exchange (NYSE) trading and listings revenue 54% ▪ Various data services that are directly related to our
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 YTD 3Q21 Energy Revenue ~$1 billion Environmentals 9% Other 7% Brent 29% Global Natural Gas 31% Other Oil 24% 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% 3.0 CAGR 7% 2.5 Lots in millions CAGR $900 2.0 $641 1.5 1.0 0.5 0.0 2016 YTD 3Q21 YTD 3Q16 YTD 3Q21 Global Oil Global Natural Gas Global Environmentals Other 2016 – YTD’21 Revenue Gr
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) 3.5 4% 3.0 CAGR 3% CAGR Lots in millions 2.5 $453 2.0 $386 1.5 1.0 0.5 0.0 2016 YTD 3Q21 YTD 3Q16 YTD 3Q21 Ags Rates Other Financials 2016 – YTD’21 Revenue Growth • Interest Rates:
Slide 16: Balanced Growth Across Financial Futures
Balanced Growth Across Financial Futures Financial Futures ADV1 ICE Financial Futures Revenue Mix1 Other Financials 2% 5% CAGR 2.5 4% CAGR Lots in millions 3% CAGR 2.0 Equity 1.5 Index Futures 6% CAGR 39% Interest 1.0 Rates 59% 0.5 0.0 2016 YTD 3Q21 Other Financials Equity Index Futures Interest Rat
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 ■ The NYSE has been the venue of choice for ■ Leading cash equities market share innovato
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 ▪ Other multi-asset class data and network
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% $1,700 CAGR ~90% $1,600 of Segment Revenues are $1,500 Recurring $s in millions $1,400 $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 Tech Our Mortgage Technology segment includes: 20% ▪ 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 ad
Slide 26: Strong Balance Sheet & Low Capital Intensity
Strong Balance Sheet & Low Capital Intensity As of 9/30/2021: Key Balance Sheet Investments: $618M unrestricted cash Euroclear 9.8% 2021E CapEx $430M - $450M OCC 40% Total Debt of $14.2Bn Bondlink 35% Gross Debt to Adj. EBITDA1 of 3.2x Bakkt 68% as of 10/15/21 Debt Profile (in millions) $800 4.0% $4
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 ▪ 4Q21 recurring revenues $892- $907 million ▪ 4Q21 exchanges recurring revenue $330 - $335 million ▪ 4Q21 fixed income & data services recurring revenue $415 - $420 million ▪ 4Q21 mortgage technology segment recurring revenue $147 - $152 million ▪ FY adj. expenses $2.95B - $2.98B ▪ 4Q
Slide 38: Adjusted Net Income and EPS Reconciliation
Adjusted Net Income and EPS Reconciliation Three Months Three Months Nine Months Nine Months Ended September Ended September Ended September Ended September in millions except per share amounts 30, 2021 30, 2020 30, 2021 30, 2020 Net income attributable to ICE $ 633 $ 390 $ 2,531 $ 1,563 Add: Amorti
Slide 39: Adjusted Net Income and EPS Reconciliation
Adjusted Net Income and EPS Reconciliation Twelve Months Ended Twelve Months Ended in millions except per share amounts s 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 integra
Slide 40: Adjusted Net Income and EPS Reconciliation
Adjusted Net Income and EPS Reconciliation 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 $
Slide 41: Adjusted EBITDA Reconciliation
Adjusted EBITDA Reconciliation Twelve Months Ended in millions September 30, 2021 Adjusted net income $2,799 Add: Adjusted interest expense(1) 429 Add: Adjusted income tax expense(1) 839 Add: Adjusted depreciation and amortization(1) 383 Adjusted EBITDA from Continuing Ops $4,450 Debt, as reported $
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