Cboe Global Markets, Inc. · CBOE:CBOE
Cboe Global Markets — Bats Global Markets — Q3 2016 Earnings Presentation
26 slides from Cboe Global Markets's earnings presentation, Nov 3, 2016
Slide 1: Third Quarter 2016 – Earnings Call
Third Quarter 2016 – Earnings Call November 3, 2016
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, and tax restructuring costs, net of th
Slide 4: Corporate Update and Outlook
Corporate Update and Outlook CBOE Transaction Continued Strong Operating Results Existing Businesses Performing Extremely Well 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 Priority ma
Slide 5: 3Q16 Results
3Q16 Results Market Share U.S. Options achieved 2nd highest quarterly market share at 11.0% U.S. Equities market share increased in the 3rd quarter to 20.8% European Equities market share increased in the 3rd quarter to 23.0% Hotspot market share increased to 12.4% from 11.1% last year, the
Slide 6: 3Q16 Results
3Q16 Results Net Revenue Net revenue growth of 5% in the current quarter compared to last year, driven by non-transaction revenue Net income increased 13% in the current quarter compared to the same period in the prior year Net Income 6
Slide 7: 3Q16 Financial Highlights
3Q16 Financial Highlights $108.8 million net revenue Net revenue increased 5% for the 3rd quarter and 16% year- to-date Organic net revenue increased 5% for the 3rd quarter and 13% year-to-date Non-transaction revenue drove all net revenue growth in the 3rd quarter 7
Slide 8: 3Q16 Financial Highlights
3Q16 Financial Highlights Normalized operating expenses increased slightly in the quarter to $49 million from $48 million in the same quarter last year 3Q16 Normalized Operating Expenses 8
Slide 9: 3Q16 Financial Highlights
3Q16 Financial Highlights $35.3 million adjusted earnings 17% increase in adjusted earnings 9
Slide 10: 3Q16 Financial Highlights
3Q16 Financial Highlights Leverage ratio well below maximum Available liquidity of $169.6 M* * Includes adjusted cash and financial instruments 10
Slide 11: Corporate Restructuring
Corporate Restructuring Re-characterizing European Operations (U.S. tax perspective) Aligns with growth strategy to pursue global expansion (FX, proprietary products, indices, etc.) and create flexibility for Brexit Expected to lower our current effective tax rate by 3 to 4 percentage points in
Slide 12: Summary
Summary Announced transformative, strategic transaction with CBOE Holdings, Inc.; Continued strong performance in U.S. Options, generating 11.0% market share and doubling net capture; Successfully migrated our BZX Options exchange to a next generation matching engine – flawlessly; Enhanced t
Slide 13: Supplemental Data
SUPPLEMENTAL DATA Bats
Slide 14: Disclaimers
Disclaimers Cautionary Statements Regarding Forward-Looking Information This presentation contains certain statements regarding intentions, beliefs and expectations or predictions for the future of CBOE and Bats, which are forward-looking statements as that term is defined in the Private Securities
Slide 15: 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 or a solicitation of any vote or approval. This presentation is being made in respect of the proposed merger
Slide 16: 3Q16 Metrics
ee 3Q16 Metrics 3Q16 Variance to: 3Q15 3Q16 3Q15 Amount % Change _ U.S. Equities Market - Average Daily Volume (billions) 6.6 7.3 (0.7) ~9.6% Market Share 20.8% 21.7% -0.9% Net Capture (per 100 shares) $ 0.022 «$ 0.020 $ 0.002 10.0% European Equities Market - Average Daily Notional Value (€ in billi
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
eee Supplemental Data Bats Global Markets, Inc. Reconciliation of Net Income to EBITDA and Normalized EBITDA (unaudited - in millions) Three months ended September 30, 2015 U.S. Equities European Equities U.S. Options Global FX Corporate Consolidated Net income $ 25.3 Income tax expense 17.2 Income
Slide 22: Supplemental Data
eee Supplemental Data Bats Global Markets, Inc. Reconciliation of Cash and Cash Equivalents and Financial Investments to Adjusted Cash (unaudited - in millions) 9/30/2016 6/30/2016 3/31/2016 12/31/2015 9/30/2015 Cash and cash equivalents S$ 69.1 $ 61.3 $ 77.1 S$ 75.1 $ 77.9 Add: Financial investment
Slide 23: Supplemental Data
eee Supplemental Data Bats Global Markets, Inc. Reconciliation of Adjusted Earnings (unaudited - in millions) 3Q16 3Q15 Net income S 28.5 S 25.3 Amortization 6.8 7.1 Acquisition-related costs 4.0 0.9 IPO costs 0.3 0.5 Tax restructuring costs 0.2 - Tax effects of adjustments (4.5) (3.5) Adjusted earn
Slide 24: Supplemental Data
Supplemental Data Bats Global Markets, Inc. Reconciliation of Organic Net Revenue (unaudited - in millions) Three months ended Nine months ended September 30, 2016 2015 S$ 3305 $ 285.8 (10.4) (2.4) September 30, 2016 2015 Revenues less cost of revenues $ 1088 $ 104.0 Global FX revenues less cost of
Slide 25: Supplemental Data
eee Supplemental Data Bats Global Markets, Inc. Reconciliation of Normalized Operating Expenses (unaudited - in millions) 3Q16 Normalized Operating operating expenses Adjustments expenses Compensation and benefits $ 23.6 § - $ 23.6 Depreciation and amortization 10.4 - 10.4 Systems and data communica
Slide 26: 3Q16 Net Revenue by Segment
3Q16 Net Revenue by Segment 26