Bgc Group, Inc. · NASDAQ:BGC
Bgc — BGC Partners — Q2 2021 Earnings Presentation
29 slides from Bgc's earnings presentation, 2021
Slide 1: BGC Partners Earnings Presentation 2Q 2021
BGC PARTNERS, INC. NASDAQ: BGCP E A R N I N G S P R E S E N TAT I O N 2 Q 2 0 2 1
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 state
Slide 3: Highlights of Consolidated Results: 2Q 2021
HIGHLIGHTS OF CONSOLIDATED RESULTS: 2Q 2021 3 REVENUES: Highlights of Consolidated Results 2Q 2021 2Q 2020 Change $512M (USD millions, except per share data) Revenues $512.5 $519.1 (1.3)% Fenics Markets GAAP income from operations before income taxes 21.7 47.9 (54.8)% 17% Voice/Hybrid GAAP net incom
Slide 4: Revenue by Asset Class & Geography
REVENUE BY ASSET CLASS & GEOGRAPHY 4 REVENUE BY ASSET CLASS GLOBAL REVENUE & LOCATIONS AMERICAS EMEA APAC Rates Data, Software & Post-trade and 2Q 2021 2Q 2021 2Q 2021 Other1 27% Revenues: Revenues: Revenues: 8% $146M $291M $75M Equity Derivatives & Cash Equities 12% 2Q 14% FX Edinburgh Dublin Copen
Slide 5: Overview: Voice / Hybrid
OVERVIEW:VOICE / HYBRID 5 REVENUE PERFORMANCE U.S. GOVERNMENT DEBT OUTSTANDING VERSUS ADV2 (1)% yr/yr $30tn $650bn ($34M) $9M $18M $25tn $600bn Debt Outstanding BGC continues to convert its Voice / ADV $20tn $550bn Hybrid business into higher margin $519M technology driven Fenics revenue $512M $15tn
Slide 6: Overview: Fenics
OVERVIEW: FENICS 6 2Q 2021 REVENUE REVENUE CONTRIBUTION REVENUE COMPOSITION NET REVENUES: (excl. Insurance Brokerage) 22% 44% Data, Software & $97M Fenics Revenue Contribution Accelerating Rates Post-trade YTD 2021 21% +23% yr/yr $97M 2020 17% $79M $11M 2019 14% 2Q $7M $97M 2018 14% $86M 2017 13% 15
Slide 7: Fenics UST
FENICS UST 7 UST TRADING VOLUME1 CLOB MARKET SHARE1 UST CLOB MARKET SHARE1 2Q 2021 Quarterly Average (ADV yr/yr change) Nasdaq2 8% CME Primary 17.5% Fenics UST BrokerTec Dealerweb Nasdaq2 Dealer3 Dealer 16.6% Dealerweb 10% 71% 14.3% 12.1% 10.4% 44% 9.0% 9.3% Fenics UST Jun 21 17% 6.4% 4.4% CME 10% B
Slide 8: Lucera
LUCERA 8 LUCERA REVENUE GREW 26% IN 2Q 2021 (YR/YR); MORE THAN DOUBLED SINCE 2Q 2019 LUCERA BUSINESSES Low latency aggregator, providing a single access point across multiple fragmented marketspaces and exchanges (FX, Rates, Futures, Credit) LumeMarkets Additional features include market data aggreg
Slide 9: Fenics Highlights
FENICS HIGHLIGHTS 9 Continuing on strong trends from prior quarters, Fenics Market Data sales contracted value increased by nearly 150% yr/yr driven by investment and improvement in global sales team & data capture and quality improvements Global Rates product offering, including inflation related p
Slide 10: Overview: Insurance Brokerage
OVERVIEW: INSURANCE BROKERAGE 10 TRANSACTION DETAILS INSURANCE BROKERAGE REVENUE Announced agreement to sell the Insurance Brokerage business for $500 million cash to 3 Year CAGR: +45% The Ardonagh Group1 $54M $46M $41M Sale expected to close in October 2021. Proceeds expected to repurchase shares /
Slide 11: Outlook: 3Q 2021
OUTLOOK: 3Q 2021 11 11 Guidance Actual Metric (USD million) 3Q21 3Q20 Revenues $465 - $515 $455.0 Pre-tax Adjusted Earnings $78 - $98 $69.2 Metric (%) FY 2021 FY 2020 Adjusted Earnings Tax Rate 10 - 12% 11.0% BGC’s revenues were approximately 5 percent higher year-on-year for the first 21 trading
Slide 12: GAAP Financial Results
BGC PARTNERS, INC. GAAP FINANCIAL RESULTS
Slide 13: Condensed Consolidated Statements of Financial Condition
BGC PARTNERS, INC. CONDENSED CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION 13 (IN THOUSANDS, EXCEPT PER SHARE DATA) (UNAUDITED) (UNDER GAAP) June 30, December 31, 2021 2020 Assets Cash and cash equivalents $ 420,302 $ 593,646 Cash segregated under regulatory requirements 36,365 257,031 Securities o
Slide 14: Condensed Consolidated Statements of Operations
BGC PARTNERS, INC. CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS 14 (IN THOUSANDS, EXCEPT PER SHARE DATA) (UNAUDITED) (UNDER GAAP) Three Months Ended June 30, S ix Months Ended June 30, Revenues: 2021 2020 2021 2020 Commissions $ 389,768 $ 382,640 $ 824,988 $ 838,495 Principal transactions 81,997
Slide 15: Appendix
MN BGC PARTNERS, INC. + bgc (5 SF! Fenics
Slide 16: Front Office Headcount & Productivity
FRONT OFFICE HEADCOUNT & PRODUCTIVITY 16 FRONT OFFICE HEADCOUNT AND PRODUCTIVITY (Productivity in USD 000s) (Excludes Insurance Brokerage) $766 2,700 $747 $753 $756 $770 TECHNOLOGY 2,650 $744 $736 2,600 $750 2,550 2,500 2,450 $749 $760 2,400 $735 2,350 2,300 2,250 $750 2,200 2,150 2,100 2,050 2,000
Slide 17: BGC's Fully Diluted Share Count Summary as of 6/30/21
BGC’S FULLY DILUTED SHARE COUNT SUMMARY AS OF 6/30/21 17 17 BGC Partners, Inc. Fully Diluted Share Count Summary Fully-diluted Shares Ownership (%) (as of June 30, 2021) (millions) Public 326.1 60% Class A owned by Public 326.1 60% Employees 112.2 21% Class A owned by executives, board members and e
Slide 18: Strongly Capitalized; Investment Grade Credit Profile
STRONGLY CAPITALIZED; INVESTMENT GRADE CREDIT PROFILE 18 BGC Partners, Inc. As of 6/30/2021 18RATING INVESTMENT GRADE CREDIT Cash and Cash Equivalents $420,302 Investment Grade Credit Rated: Securities Owned 49,222 Marketable Securities 360 • Fitch: BBB- (Outlook: Stable) Total Liquidity $469,884
Slide 19: BGC Revenue Correlation & Industry Volumes
BGC REVENUE CORRELATION & INDUSTRY VOLUMES 19 2Q21 vs. 2Q20 BGC Asset Class Industry Metric Correlation Industry Metric (Revenue) Volume Change vs. Eurex Interest Rate Derivatives (Total Contracts Traded) 0.78 24% Rates vs. Primary Dealer U.S. Government Securities Trading Volume (ADV) 0.75 (10)% vs
Slide 20: Non-GAAP Definitions and Reconciliation Tables
BGC PARTNERS, INC. NON-GAAP DEFINITIONS AND RECONCILIATION TABLES
Slide 21: Reconciliation of GAAP Income to Adjusted Earnings & EPS
RECONCILIATION OF GAAP INCOME (LOSS) FROM OPERATIONS BEFORE INCOME TAXES TO ADJUSTED EARNINGS & GAAP FULLY DILUTED EPS TO POST-TAX ADJUSTED EPS 21 (IN THOUSANDS, EXCEPT PER SHARE DATA) (UNAUDITED) 21 Q2 2021 Q2 2020 GAAP income (loss) from operations before income taxes $ 21,650 $ 47,872 Pre-tax adj
Slide 22: Reconciliation of GAAP Income to Adjusted Earnings & EPS (continued)
RECONCILIATION OF GAAP INCOME (LOSS) FROM OPERATIONS BEFORE INCOME TAXES TO ADJUSTED EARNINGS & GAAP FULLY DILUTED EPS TO POST-TAX ADJUSTED EPS 22 (IN THOUSANDS, EXCEPT PER SHARE DATA) (UNAUDITED) (1) The components of equity-based compensation and allocations of net income to limited partnership un
Slide 23: Reconciliation of GAAP Net Income to Adjusted EBITDA
RECONCILIATION OF GAAP NET INCOME (LOSS) AVAILABLE TO COMMON STOCKHOLDERS TO ADJUSTED EBITDA (IN THOUSANDS) 23 (UNAUDITED) 23 Q2 2021 Q2 2020 GAAP net income (loss) available to common stockholders $ 18,169 $ 27,919 Add back: Provision (benefit) for income taxes (1,191) 8,599 Net income (loss) attri
Slide 24: Fully Diluted Weighted-Average Share Count and Liquidity Analysis
FULLY DILUTED WEIGHTED-AVERAGE SHARE COUNT UNDER GAAP AND FOR ADJUSTED EARNINGS & LIQUIDITY ANALYSIS (IN THOUSANDS) 24 (UNAUDITED) 24 FULLY DILUTED WEIGHTED AVERAGE SHARE COUNT LIQUIDITY ANALYSIS Q2 2021 Q2 2020 June 30, 2021 December 31, 2020 Common stock outstanding 384,902 360,614 Cash and cash e
Slide 25: Differences Between Non-GAAP and GAAP Consolidated Results
DIFFERENCES BETWEEN NON-GAAP AND GAAP CONSOLIDATED RESULTS 25 25 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 St
Slide 26: Differences Between Non-GAAP and GAAP Consolidated Results (continued)
DIFFERENCES BETWEEN NON-GAAP AND GAAP CONSOLIDATED RESULTS 26 (CONTINUED) All share equivalents that are part of the Company’s equity-based compensation program, including REUs, PSUs, LPUs, HDUs, and other units that may be made exchangeable into common stock, as well as RSUs (which are recorded usi
Slide 27: Differences Between Non-GAAP and GAAP Consolidated Results (continued)
DIFFERENCES BETWEEN NON-GAAP AND GAAP CONSOLIDATED RESULTS 27 (CONTINUED) 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 28: Differences Between Non-GAAP and GAAP Consolidated Results (continued)
DIFFERENCES BETWEEN NON-GAAP AND GAAP CONSOLIDATED RESULTS 28 (CONTINUED) ADJUSTED EBITDA DEFINED BGC also provides an additional non-GAAP financial performance measure, “Adjusted EBITDA”, which it defines as GAAP “Net income (loss) available to common stockholders”, adjusted to add back the followi
Slide 29: Media and Investor Contacts
29 29 Media Contact: Karen Laureano-Rikardsen +1 212-829-4975 Investor Contact: ir.bgcpartners.com Jason Chryssicas twitter.com/bgcpartners +1 212-610-2426 linkedin.com/company/bgc-partners