Stonex Group Inc. · NASDAQ:SNEX
Stonex — INTL FCStone — Investor Presentation (June 2014)
31 slides from Stonex's investor presentation, Jun 9, 2014
Slide 1: Investor Presentation June 2014
INVESTOR PRESENTATION June 2014
Slide 2: Disclaimer
Disclaimer 2 The following presentation should be taken in conjunction with the most recent financial statements and notes thereto as well as the most recent Form 10-Q or 10-K filed with the SEC. This presentation may contain "forward-looking statements" within the meaning of Section 27A of the Secu
Slide 3: Pioneer in specialized financial services for underserved mid-market clients
INTL FCStone Inc. is a pioneer in specialized financial services that opens markets for underserved mid-market clients with insight, guidance and access. 3
Slide 4: Who We Are
Who We Are CLOSEST PEERS WHAT WE DO FRANCHISE POSITIONING One of the global leaders in: - Grains & Softs - Energy / Renewables - Metals COMMERCIAL HEDGING High touch risk advisory service with deep expertise in all commodity verticals Innovative solutions utilizing exchange- traded, OTC, struc
Slide 5: We Open Markets For Our Clients
We Open Markets For Our Clients 1. CLIENTS FIRST – ALWAYS We know that every dollar of revenue starts with a client and will protect that relationship at all costs. We do not trade against or in front of our clients or use client information in an inappropriate manner. 2. INTEGRITY AND HONESTY IN AL
Slide 6: Our Track Record Since Financial Crisis
0 50 100 150 200 250 Sep 2008 May 2009 Jan 2010 Sep 2010 May 2011 Jan 2012 Sep 2012 May 2013 Jan 2014 Book Value per Share Indices INTL FCStone Goldman Sachs Cowen Group Jeffries GFI Knight Our Track Record Since Financial Crisis (10/1/08) BVPS Up 112%, a 15% CAGR US $ / share 9/30/2008 3/31/2014 BV
Slide 7: Trends Driving Our Business
Trends Driving Our Business Difficult to offer broad solutions due to increased complexity Significantly increased cost burden INDUSTRY/CUSTOMER CHALLENGE Unique regulatory status as broker- dealer, swap dealer, FCM Fully compliant in multiple jurisdictions REGULATION Pressure on sub-scale
Slide 8: Investment Rationale
LEADING POSITIONS IN NICHE MARKETS Significant growth through geographic and product expansion Increased client penetration SIGNIFICANT INTEREST RATE PLAY Every 100b.p. increase in interest rates = c. +3% ROE Investment Rationale Poised for Growth in a Changing and Consolidating Industry TRACK RECOR
Slide 9: We Operate Globally
We Operate Globally NORTH AMERICA Canada US SOUTH AMERICA Brazil Argentina Paraguay EUROPE England Ireland ASIA UAE China Singapore South Korea AUSTRALIA 17 12 10 1 2 11 5 7 1 2 Number of offices # # Number of exchange memberships For list of offices see https://www.intlfcstone.com/Contact-Landing-P
Slide 10: Three Predecessor Firms Combine to Form a Global Leader
Three Predecessor Firms Combine to Form a Global Leader 1924 2013 1930 1978 1981 1994 2000 2003 2007 2011 2010 2009 Agricultural wholesaler Saul Stone and Company founded Saul Stone becomes one of first CME clearing members Farmers Commodities Corporation (FCC) founded to serve as risk manager to gr
Slide 11: Our Business Segments
INTL FCStone’ Our Business Segments
Slide 12: Commercial Hedging
150 200 250 300 350 400 1,500 2,000 2,500 3,000 3,500 4,000 4,500 Q1 2013 Q2 2013 Q3 2013 Q4 2013 Q1 2014 Q2 2014 Th o u sa n d s Th o u sa n d s Exchange traded volume OTC volume (right axis) 0% 10% 20% 30% 40% 50% 60% Q3 2011 Q4 2011 Q1 2012 Q2 2012 Q3 2012 Q4 2012 Q1 2013 Q2 2013 Q3 2013 Q4 2013
Slide 13: Global Payments
Unique capability to offer a global payments solution to clients in over 130 currencies and markets Value-added execution efficiencies - strong ties to local correspondent banks affords access to best rates Significant investment in technology to reduce costs and create scalability – allows us
Slide 14: Securities
Leading US market maker on pink sheets to major US brokerages and select US institutions for non-US listed equities Specialize in U.S. OTC trading of ~800 household-name foreign equities We provide liquidity and simplify complexity of trading in foreign markets Leverage international capabil
Slide 15: Physical Commodities
Full range of trading and hedging capabilities, including OTC products, to select producers, consumers, and investors Act as principal, commit own capital to buy/sell on spot and forward basis Provide commodity financing and facilitation services High value-add differentiates us from competi
Slide 16: Clearing and Execution Services
Competitive and efficient clearing and execution of exchange-traded futures and options for traders and institutions Provide services for institutional and professional trader market segments Offer facilities management and outsourcing solutions to other FCMs Award winning FX brokerage* Hist
Slide 17: Growth Strategy
Growth Strategy Drive organic client acquisition - filling mid-market void Penetrate existing clients with additional products and services Accelerate international growth with emphasis on Asia, Europe and Latin America Continue to broaden and diversify our product set Selectively acquire assets tha
Slide 18: Financials
INTL FCStone’ Financials
Slide 19: Financial Drivers
Client-centric, high touch, value added approach results in long term relationships and high margins Business and geographic diversity limits downside performance risk Highly variable cost structure protects bottom line through market cycles Centralized and disciplined process for capital allocation
Slide 20: Attractive Financial Profile
245.7 250.7 297.9 322.8 338.0 338.9 0 50 100 150 200 250 300 350 400 2009 2010 2011 2012 2013 Q2 2014 89.5 261.0 394.9 452.0 468.5 477.2 0.0 100.0 200.0 300.0 400.0 500.0 600.0 2009 2010 2011 2012 2013 TTM 13.8 11.8 27.2 19.6 18.8 17.0 0.0 5.0 10.0 15.0 20.0 25.0 30.0 2009 2010 2011 2012 2013 TTM 14
Slide 21: Revenue Analysis
United States, 69.1% Europe, 14.0% South America, 11.0% Asia, 4.3% Other foreign, 1.6% OTC, Market Making and Trading, 50.4% Commission, 37.4% Management & Consulting Fees, 9.1% Physical Trading, 1.7% Interest Income,1.4% Commodity Hedging, 45.5% CES, 24.3% Securities, 16.0% Global Payments, 11.0% P
Slide 22: Increase in Short Term Interest Rates Can Drive Earnings
Average Customer Segregated Equity $0 $200 $400 $600 $800 $1,000 $1,200 $1,400 $1,600 $1,800 $2,000 Q3 2011 Q4 2011 Q1 2012 Q2 2012 Q3 2012 Q4 2012 Q1 2013 Q2 2013 Q3 2013 Q4 2013 Q1 2014 Q2 2014 M ill io n s Average customer segregated equity - Commercial Hedging Average customer segregated equity
Slide 23: Financial Dashboard
Financial Dashboard 23 CONSOLIDATED In millions, except per share and employee data Q2 2014 Q2 2013 Variance TARGET Adjusted (Adj.) Operating Revenues 239.5$ 230.8$ 4% Total Non-Interest Expenses 222.4$ 213.9$ 4% Variable Expenses % of Total Expenses 54.9% 53.0% 2% > 50% Non-variable Expenses 100.4$
Slide 24: Balance Sheet Summary
Customer Commodity Financing Exchange Traded Futures & Options (Customer Assets and Liabilities - Segregated from Firm Activities) OTC (Commodities, Equities, Debt, FX) Physical Commodities KEY: 1 2 3 4 Balance Sheet Summary Consolidated Balance Sheet, March 31, 2014 (Numbers in millions) 24 Cash an
Slide 25: Low Leverage on Long-Term Capital
Low Leverage on Long-Term Capital 25 $0 $50 $100 $150 $200 $250 $300 $350 $400 End of FY2012 End of FY2013 385 315 218 61 323 384 Total Bank Facilities Outstanding Borrowings Long Term Capital
Slide 26: Appendix
INTL FCStone’ Appendix
Slide 27: Adjusted Financial Information Reconciliation
Adjusted Financial Information Reconciliation to Relevant GAAP Measures Our Business Segments (Physical Commodities), refer to slide 15 27 (i millions) Q3 2011 Q4 2011 Q1 2012 Q2 2012 Q3 Q2012 Q4 2012 Q1 2013 Q2 2013 Q3 2013 Q4 2013 Q1 2014 Q2 2014 perating revenues (non-GAAP) reconciliation: Physic
Slide 28: Adjusted Financial Information Reconciliation
Adjusted Financial Information 28 Reconciliation to Relevant GAAP Measures Attractive Financial Profile, refer to slide 20 (in millions) FY2009 FY2010 FY2011 FY2012 FY2013 TTM Operating revenues (non-GAAP) reconciliation: Operating revenues 89.7$ 258.5$ 399.0$ 448.1$ 468.2$ 477.0$ Gross marked-to-ma
Slide 29: Adjusted Financial Information
Adjusted Financial Information (in millions) Q2 2014 Q2 2013 Operating revenues (non-GAAP) reconciliation: Operating Revenues (GAAP) 242.1$ 233.3$ Marked-to-market adjustment (non-GAAP) (2.6) (2.5) Adjusted operating revenues, marked-to-market (non-GAAP) 239.5$ 230.8$ Net income from continuing oper
Slide 30: Transaction Volume Summary
Transaction Volume Summary 30 Three Months Ended Q1 2013 Q2 2013 Q3 2013 Q4 2013 Q1 2014 Q2 2014 Exchange-traded volume (contracts, 000's) 24,750.8 25,114.9 26,985.2 23,915.6 23,874.6 24,968.5 OTC volume (contracts, 000's) 267.0 318.4 347.7 315.9 285.5 346.5 Global payments (# of payments, 000's) 29
Slide 31: INVESTOR PRESENTATION June 2014
INVESTOR PRESENTATION June 2014