Bgc Group, Inc. · NASDAQ:BGC
Bgc — BGC Partners — Q4 2015 Earnings Presentation
40 slides from Bgc's earnings presentation, February 2016
Slide 1: BGC Partners, Inc. Earnings Presentation Q4 2015
1 BGC PARTNERS, INC. Earnings Presentation Q4 2015 Date NASDAQ: BGCP
Slide 2: Disclaimer
DISCLAIMER 2 Discussion of Forward-Looking Statements by BGC Partners Statements in this document regarding BGC's businesses that are not historical facts are "forward-looking statements" that involve risks and uncertainties. Except as required by law, BGC undertakes no obligation to release any rev
Slide 3: General Overview
BGC PARTNERS 3 GENERAL OVERVIEW Date
Slide 4: Select 4Q and FY 2015 Results Compared to 4Q and FY 2014
SELECT 4Q and FY 2015 RESULTS COMPARED TO 4Q and FY 2014 4 Highlights of Consolidated Results (USD millions, except per share 4Q 2015 4Q 2014 Change (%) FY 2015 FY 2014 Change (%) data) Revenues for distributable earnings $692.0 $515.5 34.3% $2,641.3 $1,841.5 43.4% Pre-tax distributable earnings bef
Slide 5: Global Revenue Breakdown
GLOBAL REVENUE BREAKDOWN 5 FY15 APAC 8% APAC 4Q15 8% EMEA 28% EMEA Americas 30% 61% Americas 64% Americas revenue up 22% in 4Q15 and 39% for FY15 Date Europe, Middle East & Africa revenue up 68% in 4Q15 and 55% for FY15 Asia Pacific revenue up 46% in 4Q15 and 41% for FY15 Strengthening of th
Slide 6: 4Q 2015 Segment Data (Distributable Earnings Basis)
4Q 2015 SEGMENT DATA (DISTRIBUTABLE EARNINGS BASIS) 6 (In USD millions) 4Q 2015 REVENUES 4Q 2015 Revenues Pre-tax Earnings Pre-tax Margin Corporate Financial $394.3 $65.9 16.7% 1% Real Estate $288.3 $47.4 16.5% Corporate $9.3 ($21.7) NMF Real (In USD millions) Estate 42% 4Q 2014 Revenues Pre-tax Ear
Slide 7: FY 2015 Segment Data (Distributable Earnings Basis)
FY 2015 SEGMENT DATA (DISTRIBUTABLE EARNINGS BASIS) 7 (In USD millions) FY 2015 REVENUES FY 2015 Revenues Pre-tax Earnings Pre-tax Margin Corporate Financial $1,602.8 $285.4 17.8% 1% Real Estate $1,003.6 $139.4 13.9% Corporate $34.9 ($92.3) NMF Real Estate 38% (In USD millions) FY 2014 Revenues Pre-
Slide 8: BGC's Q4 2015 Business Shows Strong Revenue Diversity
BGC'S Q4 2015 BUSINESS SHOWS STRONG REVENUE DIVERSITY 8 Corporate 1% BGC’s Businesses at a Glance Real Estate Management and Other 7% Rates BGC maintains a highly diverse 15% revenue base Real Estate Capital Markets Corporate Wholesale Financial Services 11% 1% Brokerage revenues and F/X earning
Slide 9: BGC's FY 2015 Business Shows Strong Revenue Diversity
BGC'S FY 2015 BUSINESS SHOWS STRONG REVENUE DIVERSITY 9 Corporate 1% BGC’s Businesses at a Glance Real Estate Management and Other 7% BGC maintains a highly diverse Rates 18% revenue base Real Estate Capital Markets 10% Corporate Wholesale Financial Services 1% Brokerage revenues and earnings ty
Slide 10: BGC's Front Office Productivity Growth
BGC’S FRONT OFFICE PRODUCTIVITY GROWTH 10 FRONT OFFICE HEADCOUNT FRONT OFFICE PRODUCTIVITY (USD Thousands) -1% 3,872 3,851 3,845 3,855 2,863 1,293 1,308 1,347 1,401 1,244 635 627 -7% 2,579 2,543 2,498 2,454 1,619 166 154 4Q 2014 1Q 2015 2Q 2015 3Q 2015 4Q 2015 Q4 2014 Q4 2015 FY 2014 FY 2015 Financi
Slide 11: BGC's Strong Liquidity Growth & Position
BGC’S STRONG LIQUIDITY GROWTH & POSITION 11 BGC’s Liquidity Growth & Composition (USD Thousands) Nasdaq Shares +$730M expected to be received over time $1,026,078 $825,504 $795,040 45.0 144.7 532.5 33.1 32.5 $420,412 $387,233 $379,800 32.4 4.6 1.2 32.0 11.1 16.3 716.9 648.3 461.2 364.1 369.7 388.4 D
Slide 12: Strongly Capitalized; Investment Grade Credit Profile
STRONGLY CAPITALIZED; INVESTMENT GRADE CREDIT PROFILE 12 ($ in '000s) BGC Partners, Inc. 12/31/2015 Cash and Cash Equivalents $461,207 Securities Owned 32,361 1 Marketable Securities (net) 532,510 Total Liquidity $1,026,078 BGC Partners, Inc. and Subsidiaries Issuer Maturity 12/31/2015 4.50% Convert
Slide 13: Financial Services Overview
13 Overview FINANCIAL SERVICES Date
Slide 14: 4Q 2015 Financial Services Summary
4Q 2015 FINANCIAL SERVICES SUMMARY 14 BGC Financial Services Segment Highlights Quarterly Drivers Revenues up over 51% Acquisitions of GFI and R.P. Martin Pre-tax profit up 25% FENICS1 (fully electronic) revenues and pre- Increased activity across energy and tax profits up 112% and 66%, re
Slide 15: 4Q15 Industry Volumes Mostly Down; Volatility Mostly Up
4Q15 INDUSTRY VOLUMES MOSTLY DOWN; VOLATILITY MOSTLY UP 15 4Q15: Yr/Yr Change in Capital Markets Activity 4Q15: Yr/Yr Change in Average Daily Volatility (ADV excl. Eurex) -21% Thomson Reuters FX Spot -19% FX Futures (CME) -18% Interest Rate Futures (CME) U.S. Rates (MOVE) 3% -10% Eurex Equity Deriva
Slide 16: Financial Services Revenue Breakout
FINANCIAL SERVICES REVENUE BREAKOUT 16 FINANCIAL SERVICES REVENUE COMPOSITION % Change $394,345 +51% Trayport 15,834 NMF 29,962 +57% 47,008 +53% Market data, software $260,801 solutions and other1 59,226 +275% 19,081 Equity & other 30,690 Energy & commodities 63,863 +33% 15,785 Credit 47,940 71,592
Slide 17: BGC's FENICS (Fully Electronic) Growth (Excluding Trayport)
BGC’S FENICS (FULLY ELECTRONIC) GROWTH (EXCLUDING TRAYPORT) 17 FENICS (Fully Electronic) Brokerage Volumes FENICS (Fully Electronic) Revenues1 (USD Billions) (USD Millions) $224.3 20,477 15,483 $99.0 $59.1 4,909 4,300 $27.9 Q4 2014 Q4 2015 FY 2014 FY 2015 Q4 2014 Q4 2015 FY 2014 FY 2015 Date 4Q 20
Slide 18: Strong Growth Seen in Fully Electronic Business
STRONG GROWTH SEEN IN FULLY ELECTRONIC BUSINESS 18 4Q 2015 FY 2015 Voice / Hybrid Corporate / Voice / Hybrid Corporate / FENICS / Other Real Estate Other Total FENICS / Other Real Estate Other Total Revenue $59.1 $335.2 $288.3 $9.3 $692.0 $224.3 $1,378.5 $1,003.6 $34.9 $2,641.3 Pre-Tax DE $25.2 $40.
Slide 19: BGC's Completion of GFI Merger
BGC'S COMPLETION OF GFI MERGER 19 On January 12, 2016, BGC and GFI closed on a previously agreed upon merger. BGC purchased the remaining outstanding shares of GFI common stock for a price equal to $6.10 per GFI share. Following the close of the Back-End Mergers, GFI shares no longer traded on e
Slide 20: Volumes Generally Down; Volatility Mixed From a Year Ago
VOLUMES GENERALLY DOWN; VOLATILITY MIXED FROM A YEAR AGO 20 1Q16TD Change in Capital Markets Activity 1Q16TD Change in Average Daily Volatility (1/1/2016 – 2/1/2016) (1/1/2016 – 2/1/2016) -17% U.S. Agency (Primary Dealer) -5% U.S. Corp. Bonds (Primary Dealer) -12% U.S. Rates (MOVE) -5% FX Futures (C
Slide 21: Real Estate Overview
Newmark Grubb Knight Frank Overview REAL ESTATE SST
Slide 22: Business Overview: Real Estate Services
BUSINESS OVERVIEW: REAL ESTATE SERVICES 22 NGKF Highlights 4Q 2015 Real Estate Segment Breakdown 4Q 2015 Real Estate Services revenues increased by approximately 17% as compared to last year Real estate Management Real estate capital markets revenues increased capital markets services & 25% over
Slide 23: NGKF Revenue and Earnings Continue Strong Growth
NGKF REVENUE AND EARNINGS CONTINUE STRONG GROWTH 23 NGKF Revenue & Pre-tax Distributable Earnings (USD 000’s) 1,000,000 160,000 900,000 140,000 Pre-tax Distributable Earnings 800,000 120,000 700,000 Revenues 600,000 100,000 500,000 80,000 400,000 60,000 300,000 40,000 200,000 100,000 20,000 - - FY T
Slide 24: Commercial Real Estate Remains an Attractive Investable Asset Class
COMMERCIAL REAL ESTATE REMAINS AN ATTRACTIVE INVESTABLE ASSET CLASS 24 U.S. Commercial RE Cap Rates vs. 10 Year U.S. Treasuries (All Commercial Property Types) 8.00% 7.00% 6.00% 5.00% 4.00% 3.00% 2.00% 1.00% 0.00% Date Spread Cap Rate 10yr UST Avg. Spread Source: Moody’s Real Capital Analytics Spr
Slide 25: Vacancy Rates Continue to Improve Signaling Strong Demand
VACANCY RATES CONTINUE TO IMPROVE SIGNALING STRONG DEMAND FOR COMMERCIAL REAL ESTATE 25 20.0% U.S. Vacancy Rates by Asset Class 16.0% 12.0% 8.0% 4.0% 0.0% 4Q10 4Q11 4Q12 4Q13 4Q14 4Q15 Date Office Industrial Retail Unweighted Average Source: CoStar, REIS, and NGKF Research Vacancy rates continue t
Slide 26: Outlook
26 BGC PARTNERS OUTLOOK Date
Slide 27: Outlook Comparison
OUTLOOK COMPARISON 27 Outlook Compared with a Year Ago Results BGC anticipates distributable earnings revenues to increase by between approximately 13 percent and 21 percent and to be between $635 million to $680 million, compared with $563.9 million a year earlier. The Company expects pre-tax d
Slide 28: Appendix
APPENDIX TMNT ANTI INT ss 1
Slide 29: BGC Partners Compensation Ratio
BGC PARTNERS COMPENSATION RATIO 29 $1,800 100% $1,641.4 $1,600 90% $1,400 $1,128.5 $1,091.2 $1,200 80% $1,036.8 (USD millions) $1,000 70% $800 61.7% 62.1% 61.3% 62.0% 61.8% 59.2% $600 60% $400 50% $200 $428.9 $318.4 $0 40% 2012 2013 2014 2015 Q4 2014 Q4 2015 Compensation and Employee Benefits Compen
Slide 30: Non-Compensation Expenses & Pre-Tax Margin
NON-COMPENSATION EXPENSES & PRE-TAX MARGIN 30 50% 40% 30% 30.2% 28.0% 25.3% 29.6% 25.3% 20% 16.1% 10% 13.4% 12.6% 11.2% 10.3% 0% FY 2011 FY 2012 FY 2013 FY 2014 FY 2015 Pre-tax distributable earnings as % of Total Revenue Non-comp Expenses as a % of Total Revenue Date FY 2015 non-comp expenses wer
Slide 31: BGC's Economic Ownership as of December 31, 2015
BGC’S ECONOMIC OWNERSHIP AS OF DECEMBER 31, 2015 31 Cantor 24% Public 45% Employees, Executives, & Directors 31% Date Note: Employees, Executives, and Directors ownership figure attributes all units (PSUs, FPUs, RSUs, etc.) and distribution rights to founding partners & employees and also includes a
Slide 32: 2015 NGKF Highlights
2015 NGKF HIGHLIGHTS 32 NEW OFFICES: Acquired Computerized Facility Integration, LLC (CFI) A premier real estate strategic consulting and systems integration firm that manages over three billion square feet globally for Fortune 500 companies, owner-occupiers, government agencies, healthcare and hi
Slide 33: Average Exchange Rates
AVERAGE EXCHANGE RATES 33 Q4 2015 Q4 2014 Jan 1 – Feb 8, 2016 Jan 1 – Feb 8, 2015 US Dollar 1 1 1 1 British Pound 1.517 1.583 1.444 1.518 Euro 1.096 1.249 1.091 1.160 Hong Kong Dollar 0.129 0.129 0.129 0.129 Singapore Dollar 0.711 0.771 0.701 0.747 Japanese Yen (Inverted) 121.420 114.470 118.300 118
Slide 34: Distributable Earnings Defined
DISTRIBUTABLE EARNINGS DEFINED 34 BGC Partners uses non-GAAP financial measures including "revenues for distributable earnings," "pre-tax distributable earnings" and "post-tax distributable earnings," which are supplemental measures of operating performance that are used by management to evaluate th
Slide 35: Distributable Earnings Defined (Continued)
DISTRIBUTABLE EARNINGS DEFINED (CONTINUED) 35 "Post-tax distributable earnings" are defined as pre-tax distributable earnings adjusted to assume that all pre-tax distributable earnings were taxed at the same effective rate. "Post-tax distributable earnings per fully diluted share" are defined as
Slide 36: Adjusted EBITDA Defined
ADJUSTED EBITDA DEFINED 36 BGC also provides an additional non-GAAP financial measure, “adjusted EBITDA,” which it defines as GAAP income from operations before income taxes, adjusted to add back interest expense as well as the following non-cash items: Employee loan amortization; Fixed asset de
Slide 37: Reconciliation of GAAP Income to Adjusted EBITDA
RECONCILIATION OF GAAP INCOME TO ADJUSTED EBITDA 37 BGC PARTNERS, INC. Reconciliation of GAAP Income (Loss) to Adjusted EBITDA (and Comparison to Pre-Tax Distributable Earnings) (in thousands) (unaudited) Q4 2015 Q4 2014 FY 2015 FY 2014 GAAP Income (loss) from continuing operations before income tax
Slide 38: Reconciliation of Income Under GAAP to Distributable Earnings
RECONCILIATION OF INCOME UNDER GAAP TO DISTRIBUTABLE EARNINGS 38 BGC PARTNERS, INC. RECONCILIATION OF GAAP INCOME (LOSS) TO DISTRIBUTABLE EARNINGS (in thousands, except per share data) (unaudited) Q4 2015 Q4 2014 FY 2015 FY 2014 GAAP income (loss) before income taxes $ 251,933 $ (59,286) $ 388,814 $
Slide 39: Reconciliation of Revenues Under GAAP and Distributable Earnings
RECONCILIATION OF REVENUES UNDER GAAP AND DISTRIBUTABLE EARNINGS 39 BGC PARTNERS, INC. RECONCILIATION OF REVENUES UNDER GAAP AND DISTRIBUTABLE EARNINGS (in thousands) (unaudited) Q4 2015 Q4 2014 FY 2015 FY 2014 GAAP Revenue $ 673,444 $ 489,283 $ 2,575,437 $ 1,787,490 Plus: Other income (losses), net
Slide 40: bgcpartners.com
40 bgcpartners.com Date