Cme Group Inc. · NASDAQ:CME
Cme — Q3 2017 Earnings Presentation
23 slides from Cme's earnings presentation, Oct 26, 2017
Slide 1: CME Group 3Q 2017 Earnings Q&A Conference Call
CME Group 3Q 2017 Earnings Q&A Conference Call APPENDIX SLIDES As a replacement to conference call prepared remarks, please see the CME Group 3Q 2017 Quarterly Earnings Commentary document posted with all other CME Group 3Q 2017 earnings documents at the following link: October 26, 2017 http://inves
Slide 2: Forward Looking Statements
Forward Looking Statements Statements in this presentation that are not historical facts are forward-looking statements. These statements are not guarantees of future performance and involve risks, uncertainties and assumptions that are difficult to predict. Therefore, actual outcomes and results ma
Slide 3: Long-Term Growth in a Variety of Environments
Long-Term Growth in a Variety of Environments (round turns, in millions) 18 Pro Forma Average Daily Volume 16.4M 16 14 12 10 8 CAGR 1972 – 2016 6 14% 4 2 0 Note: Volumes are all pro forma as if CME owned NYMEX and CBOT over the illustrated period and 2017TD ADV is through 9/29/17 3 © 2017 CME Group.
Slide 4: Steady ADV Growth and Healthy Open Interest
Steady ADV Growth and Healthy Open Interest Double Digit Growth Across 4 Annual ADV ADV of 6 Product Millions Year Over Year Growth Rates Lines 18 16.4M 3Q17TD vs. Sep17 vs. Product Line 3Q16TD Sep16 15 Interest Rates 9% 26% 12 12% CAGR Equities -9% -18% 9 Energy 17% 9% 6 Ag Commodities 20% 17% FX 2
Slide 5: Open Interest Reached Record Level
Open Interest Reached Record Level 130 Open Interest at Month End (in millions) Reached all-time high of 129.1M contracts on June 14, 2017, and returned back to 127M 125 contracts recently ahead of routine quarterly expiries 120 115 114M 110 105 2015 2016 100 2017 95 90 85 80 5 Data through Septembe
Slide 6: Unique Assets Provide Competitive Advantages
Unique Assets Provide Competitive Advantages Q3 2017 Revenue Mix Balanced portfolio of diverse, benchmark products Energy Interest Rates 20% 26% World-class clearing, Agricultural risk management Commodities Equities 12% expertise 14% Metals Foreign Market 6% Exchange Data & Info 5% Other Svcs 6% 11
Slide 7: Volatility Through 3Q 2017
Volatility Through 3Q 2017 35.00% S&P 500 Volatility 120.00% Eurodollars 30.00% 100.00% 25.00% 80.00% 20.00% 60.00% 15.00% 40.00% 10.00% 5.00% 20.00% 0.00% 0.00% Eurodollar (3rd Month) S&P 500 VIX Index 16% Foreign Exchange 12.00% Treasuries 14% 10.00% 12% 8.00% 10% 8% 6.00% 6% 4.00% 4% 2.00% 2% 0%
Slide 8: Volatility Through 3Q 2017
Volatility Through 3Q 2017 70.00% Energy Metals 90.00% 60.00% 80.00% 70.00% 50.00% 60.00% 40.00% 50.00% 30.00% 40.00% 30.00% 20.00% 20.00% 10.00% 10.00% 0.00% 0.00% WTI Crude Oil Natural Gas Gold Silver 50.00% Ag Commodities 45.00% 40.00% 35.00% 30.00% 25.00% 20.00% 15.00% 10.00% 5.00% 0.00% Corn So
Slide 9: Investments in Globalization Are Paying Off
Investments in Globalization Are Paying Off Electronic ADV based on origin of trade, in 000s • Record 3Q17 ADV from both Europe and Asia Europe Asia 2,915 675 Data through September 30, 2017 ADV by trading hours, 14,000 U.S. 500 Asian 1,600 European in 000s 12,000 7am – 4pm CT 450 400 4pm – 11pm CT
Slide 10: Options Business – Continued Momentum
Options Business – Continued Momentum Percentage ADV Electronic Annual Options • 3Q17 Options ADV up 14%, with electronic 3,600,000 ADV by Venue 62% 70% Options ADV up 36% YTD 3,200,000 • Shorter duration options are appealing to 60% market participants 2,800,000 • Reached record Weekly Treasury opt
Slide 11: Positive Momentum - Non-Operating Income / (Expense)
Positive Momentum - Non-Operating Income / (Expense) Income Statement Returns from S&P/Dow Jones Adjusted Non-Operating Income / (Expense) Joint Venture (millions) (millions) $40 $35 $30 $28 $20 $21 $10 $0 $14 -$10 $7 -$20 -$30 $0 11 © 2017 CME Group. All rights reserved.
Slide 12: Committed to Returning Cash to Shareholders
Committed to Returning Cash to Shareholders $ (millions) • Regular quarterly dividends to $2,000 date in 2017 were Regular Quarterly Dividend paid/declared at $0.66 per $1,800 share; this is an increase of 10 Annual Variable Dividend percent from the regular (paid either end of year it reflects or f
Slide 13: CME Group 3Q 2017 Adjusted Financial Results
CME Group 3Q 2017 Adjusted Financial Results1 • Revenue of $891M, up 6 percent • Operating Expense of $299M, up 4 percent (down 0.4% when excluding License Fees) • Operating Income of $591M, up 7 percent • Operating Margin of 66.4 percent • Net Income of $406M, up 14 percent • Diluted EPS of $1.19,
Slide 14: Notes / Guidance
Notes / Guidance • Adjusted Operating Expense • 2017 adjusted operating expense, excluding license fees and adjustments, revised to $1.08 billion, which is flat relative to 2016 • Expense - Licensing and other fee agreements • The increase in this line for 3Q17 was partially driven by the new licens
Slide 15: 3Q17 Reconciliation of GAAP to non-GAAP Measures
3Q17 Reconciliation of GAAP to non-GAAP Measures 15 © 2017 CME Group. All rights reserved.
Slide 16: GAAP Income Statement Trend Excluding Deferred Compensation, FX, Amortization of Intangibles
GAAP Income Statement Trend Excluding Deferred Compensation, FX, Amortization of Intangibles and Other Historically Noted Adjustments1 CME Group Inc. and Subsidiaries GAAP Income Statement Trend Excl Def Comp, FX, Amortization of intangibles and other historically noted adjustments1 (in millions, ex
Slide 17: Interest Rate Futures – Large Open Interest Holders
Interest Rate Futures – Large Open Interest Holders CME Group Interest Rate Futures Aggregate Number of Large Open Interest Holders* Source: CFTC 2,500 All-time high of 1,952 recorded September 5, 2017 Change over Selected Periods 2,000 Last 4 Weeks Last 13 Weeks Last 52 Weeks –2.0% +2.8% +9.9% 1,88
Slide 18: FX Futures – Large Open Interest Holders
FX Futures – Large Open Interest Holders CME Group Foreign Exchange Futures Aggregate Number of Large Open Interest Holders* Source: CFTC 1,200 Change over Selected Periods 1,000 Last 4 Weeks Last 13 Weeks Last 52 Weeks –7.4% –0.8% +1.7% 1,031 800 600 YTD up 5% Peak 1,117 on August 8, 2017 400 200 0
Slide 19: Equity Futures – Large Open Interest Holders
Equity Futures – Large Open Interest Holders CME Group Equity Index Futures Aggregate Number of Large Open Interest Holders* Source: CFTC 1,800 1,657 1,600 E-mini Russell 1,400 2000 now included 1,200 1,000 800 600 400 200 0 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 19 © 2017 CME G
Slide 20: Energy Futures – Large Open Interest Holders
Energy Futures – Large Open Interest Holders CME Group Energy Futures Aggregate Number of Large Open Interest Holders* Source: CFTC 1,325 1,269 1,250 YTD up 8% Peak 1,288 on May 16, 2017 1,175 1,100 1,025 950 875 800 Change over Selected Periods Last 4 Weeks Last 13 Weeks Last 52 Weeks +2.5% +4.9% +
Slide 21: Metals Futures – Large Open Interest Holders
Metals Futures – Large Open Interest Holders CME Group Metals Futures Aggregate Number of Large Open Interest Holders* Source: CFTC 1,400 1,309 1,300 YTD up 10% Peak 1,374 on August 29, 2017 1,200 1,100 1,000 900 800 700 Change over Selected Periods Last 4 Weeks Last 13 Weeks Last 52 Weeks -3.7% +1.
Slide 22: Ag Commodities Futures – Large Open Interest Holders
Ag Commodities Futures – Large Open Interest Holders CME Group Agricultural Futures Aggregate Number of Large Open Interest Holders* Source: CFTC 3,500 3,284 3,250 3,000 2,750 2,500 Change over Selected Periods Last 4 Weeks Last 13 Weeks Last 52 Weeks +1.6% +1.6% -1.6% 2,250 2,000 2008 2009 2010 201
Slide 23: CME Group – Compelling Investment
CME Group – Compelling Investment Only Pure Play Derivatives Positioned for Growth Several Potential Exchange Tailwinds • Unmatched product diversity • Focused on customer • Fed Balance Sheet reduction and 24 hour liquidity challenges / working collaboratively • FASB Hedge Accounting Rules • Leader