Cboe Global Markets, Inc. · CBOE:CBOE
Cboe Global Markets — Bats Global Markets — Q4 2016 Earnings Presentation
25 slides from Cboe Global Markets's earnings presentation, Feb 9, 2017
Slide 1: Fourth Quarter 2016 – Earnings Call
Fourth Quarter 2016 – Earnings Call February 9, 2017
Slide 2: Disclaimers
Disclaimers Non-GAAP Financial Measures To supplement Bats’ consolidated financial statements prepared in accordance with accounting principles generally accepted in the United States (GAAP) and to better reflect period-over-period comparisons, Bats uses non-GAAP financial measures of performance, f
Slide 3: Defined Terms
Defined Terms Adjusted cash is defined as cash and cash equivalents and financial investments excluding cash received for payment of Section 31 fees. Adjusted earnings is defined as net income adjusted for amortization, acquisition-related costs, IPO costs, tax restructuring costs, and the net g
Slide 4: Corporate Update and Outlook
Corporate Update and Outlook CBOE Transaction Record-Setting Financial Results in 2016 Existing Businesses Continue Strong Performance U.S. Equities (excluding auctions) remains #1 U.S. ETF trading remains #1 European Equities and Trade Reporting remain #1 U.S. Options – Price-Time Pri
Slide 5: 4Q16 Results
4Q16 Results Market Share U.S. Options market share increased to 11.5% from 8.9% last year Hotspot market share increased to 11.6% from 11.4% last year *Our share of the publically reported institutional spot volume 5
Slide 6: 4Q16 Results
4Q16 Results Net Revenue Net revenue growth of 7% in the current quarter compared to last year, driven by non-transaction revenue Net revenue decrease compared to 3Q16 partially driven by a weak GBP Net Income Net income increased 50% in the current quarter compared to the same period in the p
Slide 7: 4Q16 Financial Highlights
4Q16 Financial Highlights $105.4 million net revenue Net revenue increased 7% for the 4th quarter and 13% for the year Organic net revenue also increased 7% for the 4th quarter and 11% for the year Non-transaction revenue drove net revenue growth in the 4th quarter Note: In local currency, Eur
Slide 8: 4Q16 Financial Highlights
4Q16 Financial Highlights Normalized operating expenses decreased slightly in the quarter to $48.3 million from $48.5 million in the same quarter last year 4Q16 Normalized Operating Expenses 8
Slide 9: 4Q16 Financial Highlights
4Q16 Financial Highlights $38.5 million adjusted earnings 35% increase in adjusted earnings 9
Slide 10: 4Q16 Financial Highlights
4Q16 Financial Highlights Leverage ratio well below maximum Available liquidity of $156.4 M* * Includes adjusted cash and financial instruments 10
Slide 11: Summary
Summary Continue to make progress on the CBOE integration with an expected closing date by the end of the 1st quarter; Grew non-transaction revenue 10% for the quarter and 15% for the full year 2016; Accelerated momentum in our ETF Trading and Listings business with a strong December and great
Slide 12: Supplemental Data
SUPPLEMENTAL DATA Bats
Slide 13: Disclaimers
Disclaimers Cautionary Statements Regarding Forward-Looking Information This presentation contains certain statements regarding intentions, beliefs and expectations or predictions for the future of Bats Global Markets, Inc. (“Bats”) and CBOE Holdings, Inc. (“CBOE”), which are forward-looking stateme
Slide 14: Disclaimers
Disclaimers Additional Information Regarding the Transaction and Where to Find It This presentation does not constitute an offer to sell or the solicitation of an offer to buy any securities. This presentation is being made in respect of the proposed merger transaction involving Bats and CBOE, in co
Slide 15: 4Q16 Metrics
ee 4Q16 Metrics 4Q16 Variance to: 4Qis 4Q16 4Q15 Amount % Change __ U.S. Equities Market - Average Daily Volume (billions) 7.1 7.1 - 0.0% Market Share 20.0% 21.1% -1.1% Net Capture (per 100 shares) $ 0.021 «=$ 0.020 $ 0.001 5.0% European Equities Market - Average Daily Notional Value (€ in billions)
Slide 16: Supplemental Data
Supplemental Data Bats Global Markets, Inc. Reconciliation of Net Income to EBITDA and Normalized EBITDA (unaudited - in millions) Three months ended December 31, 2016 U.S. Equities European Equities U.S. Options Global FX Corporate Consolidated Net income $ 32.5 Income tax expense 16.5 Income (loss
Slide 17: Supplemental Data
Supplemental Data Net income Income tax expense Income (loss) before income tax provision Interest Depreciation and amortization EBITDA Acquisition-related costs IPO costs Tax restructuring costs Normalized EBITDA Net Revenue EBITDA margin (1) Normalized EBITDA margin (2) Bats Global Markets, Inc. R
Slide 18: Supplemental Data
eee Supplemental Data Bats Global Markets, Inc. Reconciliation of Net Income to EBITDA and Normalized EBITDA (unaudited - in millions) Three months ended June 30, 2016 U.S. Equities European Equities U.S. Options Global FX Corporate Consolidated Net income $ 16.3 Income tax expense 13.9 Income (loss
Slide 19: Supplemental Data
Supplemental Data Net income Income tax expense Income (loss) before income tax provision Interest Depreciation and amortization EBITDA Acquisition-related costs IPO costs Normalized EBITDA Net Revenue EBITDA margin (1) Normalized EBITDA margin (2) Bats Global Markets, Inc. Reconciliation of Net Inc
Slide 20: Supplemental Data
eee Supplemental Data Bats Global Markets, Inc. Reconciliation of Net Income to EBITDA and Normalized EBITDA (unaudited - in millions) Three months ended December 31, 2015 U.S. Equities European Equities U.S. Options Global FX Corporate Consolidated Net income $ 2.7 Income tax expense 13.6 Income (l
Slide 21: Supplemental Data
Supplemental Data Bats Global Markets, Inc. Reconciliation of Cash and Cash Equivalents and Financial Investments to Adjusted Cash (unaudited - in millions) 12/31/2016 9/30/2016 6/30/2016 3/31/2016 12/31/2015 Cash and cash equivalents s 85.8 S$ 69.1 $ 61.3 $ 77.1 S$ 75.1 Add: Financial investments 4
Slide 22: Supplemental Data
eee Supplemental Data Bats Global Markets, Inc. Reconciliation of Adjusted Earnings (unaudited - in millions) 4Q16 4Q15 Net income s 32.5 s 21.7 Amortization 6.7 8.5 Acquisition-related costs 2.7 0.9 IPO costs - 1.0 Tax restructuring costs 0.3 - Gain on sale of portion of EuroCCP (1.4) - Tax effects
Slide 23: Supplemental Data
ee Supplemental Data Bats Global Markets, Inc. Reconciliation of Organic Net Revenue (unaudited - in millions) Three months ended Twelve months ended December 31, December 31, 2016 2015 2016 2015 Revenues less cost of revenues S$ 10.4 $ 986 $ 4359 $ 384.4 Global FX revenues less cost of revenues (fo
Slide 24: Supplemental Data
eee Supplemental Data Bats Global Markets, Inc. Reconciliation of Normalized Operating Expenses (unaudited - in millions) 4Qi6e Normalized Operating operating expenses Adjustments expenses Compensation and benefits 23.2 - 23.2 Depreciation and amortization 10.6 - 10.6 Systems and data communication
Slide 25: 4Q16 Net Revenue by Segment
4Q16 Net Revenue by Segment 25