Intercontinental Exchange Inc. · NYSE:ICE
Intercontinental Exchange — Investor Presentation (2022)
51 slides from Intercontinental Exchange's investor presentation, Nov 27, 2022
Slide 1: Investor Overview 2022
Investor Overview 2022 : cS |_|
Slide 2: Cautionary Statement Regarding Forward Looking Statements
CAUTIONARY STATEMENT REGARDING FORWARD LOOKING STATEMENTS This presentation may contain “forward-looking statements” made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Statements regarding ICE’s business that are not historical facts are forward-look
Slide 3: ICE Overview
ICE Overview
Slide 4: Overview
Overview ICE is a leading global provider of data services and technology solutions to a broad range of customers including financial institutions, corporations and government entities. By combining our world class technology with our data services and operating expertise, we add transparency and en
Slide 5: Two Decades of Innovation & Growth
Two Decades of Innovation & Growth Exchanges Fixed Income & Data Services Mortgage Technology Leveraging trading & With ICE’s fixed income clearing infrastructure, pricing & reference data ICE adds to its energy ICE acquires the New ICE expands its futures as a foundation, ICE futures network throug
Slide 6: A Leading Global Provider of Data and Technology
A Leading Global Provider of Data and Technology We design, build and operate digital networks across asset classes Exchanges Fixed Income & Data Mortgage Technology Exchanges across the major asset Electronification of the fixed income Digitization of the U.S. residential classes, including energy.
Slide 7: Secular Tailwinds Driving Growth Across Asset Classes
Secular Tailwinds Driving Growth Across Asset Classes Secular Tailwinds Growth Across ICE Platform ICE TTM’22 Rev • Mortgage TTM ’22 recurring revenues +25% y/y pro forma Mortgage $1.3Bn • Analog to digital conversion across the • Connectivity to ~85% of U.S. mortgages drives cross-sell workflow • E
Slide 8: A Proven Model for Long-Term Growth
A Proven Model for Long-Term Growth $7.4 billion Balanced Recurring & Total Revenues Diverse Transaction- Based Revenue Growth 59% Adjusted Operating Margins Invest in Business and Strong Operating Margins 50% Rising Capital Return Recurring Revenues Over $2.8 billion Strong Cash Flow & ROIC Free Ca
Slide 9: Consistent Track Record of Growth
Consistent Track Record of Growth 16 consecutive years of Adj. EPS growth $5.06 $4.41 R 17% 1 C AG $3.77 j. EPS $3.51 21 Ad –’ $2.93 ’06 $2.76 $2.75 $2.42 $2.46 $1.93 $1.68 $1.50 $1.38 $1.07 $0.83 $0.85 $0.68 $0.48 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 YTD 2
Slide 10: Business Overview
Business Overview
Slide 11: Balanced Recurring and Diverse Mix of Transaction Revenues
Balanced Recurring and Diverse Mix of Transaction Revenues 50% Recurring Revenues Balanced Revenue Mix Diversified Recurring Revenue Diversified Transaction Revenue $3.6B; +9% y/y, CC pro forma $3.7B; +9% y/y, CC pro forma Mortgage Technology 18% Mortgage Mortgage Technology Exchange Data & Technolo
Slide 12: Exchanges
Exchanges A global network of exchanges and clearing services across the major asset classes The Exchanges segment includes: § Global futures network, including Energy Exchanges § New York Stock Exchange (NYSE) trading and listings revenue 55% § Various data and connectivity services directly relate
Slide 13: Energy: A Leading Global Energy & Environmental Network
Energy: A Leading Global Energy & Environmental Network Helping Customers Navigate Complex Global Energy Markets & the Clean Energy Transition Brent Crude Oil Diverse Global Energy Revenue Mix +126 spread contracts NBP Gas TTM’22 Energy Revenue of NA Basis RBOB Gasoil UK Environmental ~$1.3 billion
Slide 14: Diverse Energy Suite Driving Consistent Growth
Diverse Energy Suite Driving Consistent Growth $s in millions Energy Average Daily Volume (ADV) Energy Revenue 3.5 $1,270 4% 8% 3.0 CAGR CAGR • Oil: 4% CAGR 2.5 $882 Lots in millions • Natural Gas: 15% CAGR 2.0 • TTF + Asia Nat Gas: 45% CAGR 1.5 • Environmentals: 26% CAGR 1.0 0.5 0.0 TTM '17 TTM '22
Slide 15: Secular Tailwinds Driving Growth in Energy
Secular Tailwinds Driving Growth in Energy The energy transition & growing complexity driving demand for greater efficiency and more precise risk management tools Globalization of natural gas & rise of LNG driving emergence of TTF as global gas benchmark Evolution of energy markets drive the need fo
Slide 16: Diversified Growth Across Other Futures
Diversified Growth Across Other Futures Other Futures Average Daily Volume1 $s in millions Other Futures Revenue1 (ADV) 3.0 7% $683 4% CAGR 2.5 CAGR $490 Lots in millions 2.0 • Interest Rates: 10% CAGR 1.5 • Equity Index Futures1: 13% CAGR 1.0 0.5 0.0 TTM '17 TTM '22 TTM '17 TTM '22 Ags Rates Other
Slide 17: Balanced Growth Across Financial Futures
Balanced Growth Across Financial Futures Financial Futures ADV1 ICE Financial Futures Revenue Mix1 Other Financials 3.0 2% 2.5 5% 1% CAGR CAGR Lots in millions 2.0 4% CAGR Equity Index 1.5 Futures 35% 1.0 5% CAGR Interest Rates 0.5 63% 0.0 TTM '17 TTM '22 Other Financials Equity Index Futures Intere
Slide 18: NYSE: A Premier Listing and Trading Venue
NYSE: A Premier Listing and Trading Venue The world’s largest and most trusted equities exchange, leading ETF exchange and best-in-class technology Listing Leadership & Innovation Trading Leadership ■ The NYSE has been the venue of choice for ■ Leading cash equities market share innovators, visionar
Slide 19: Fixed Income & Data Services
Fixed Income & Data Services Combining data, analytics and technology-driven execution to drive workflow efficiencies Fixed Income & Data Services segment includes: § Fixed income data & analytics including pricing and reference data and our index business Fixed Income § Other multi-asset class data
Slide 20: Fixed Income: Electronic Workflow Solutions
Fixed Income: Electronic Workflow Solutions Pre-trade insight Pricing, Reference Data & Indices Analytics • Leading provider of evaluated pricing on ~3M securities • Best Execution • Portfolio Analytics Pre-trade Data • Reference data covering ~33M securities • TCA • Curves & Analytics • 2nd largest
Slide 21: Data Fueling Compounding Growth
Data Fueling Compounding Growth Fixed Income & Data Services Annual Subscription Value (ASV) 5-6% $1,800 $1,700 CAGR ~85% of Segment $1,600 Revenues are Recurring $s in millions $1,500 $1,400 ~5-6% $1,300 $1,200 $1,100 ASV Growth $1,000 2Q 6 3Q 6 4Q 6 1Q 6 2Q 7 3Q 7 4Q 7 1Q 7 2Q 8 3Q 8 4Q 8 1Q 8 2Q
Slide 22: Mortgage Technology
Mortgage Technology Facilitating an analog-to-digital conversion across the mortgage origination workflow Mortgage Tech Our Mortgage Technology segment includes: 18% § Our leading origination technology, Encompass, and the ICE Mortgage Technology Network § Closing solutions including eClose, eNotes,
Slide 23: Mortgages: End-to-End Digital Workflow Solutions
Mortgages: End-to-End Digital Workflow Solutions ICE Mortgage Technology Servicers Brokers End-to-end digital network and data sets combined with analytics & tools, critical to automating disconnected and disparate processes across the mortgage workflow Regulators Lead Gen & Mtg. Insurers Large addr
Slide 24: Workflow Inefficiencies Present Large Addressable Market
Workflow Inefficiencies Present Large Addressable Market Lead Pre- Generation & Processing & Post-Closing Underwriting Closing Secondary Application Closing Loan Origination Costs Rising Total Addressable Market In $US ~$9,000/loan Targeted ~$10 Billion ~$2,600+ customer savings Total Addressable Ma
Slide 25: Financial Overview
Financial Overview
Slide 26: Consistent Growth and Value Creation
Consistent Growth and Value Creation $s in millions Total Revenue Recurring Revenues 18% $7,146 CAGR 49% $4,512 $1,327 9% 2011 2016 2021 2011 2021 $s in millions Free Cash Flow Adj. EPS1 16% 14% $5.06 $2,821 CAGR CAGR $1,770 $2.76 $1.38 $625 2011 2016 2021 2011 2016 2021 (1) 2016 and 2021 adjusted f
Slide 27: Strong Balance Sheet & Low Capital Intensity
Strong Balance Sheet & Low Capital Intensity As of 06/30/2022: $830M unrestricted cash $204M YTD 2Q22 CapEx / Software Total Debt of $18.1Bn; $5Bn of BKI financing Gross debt-to-adj. EBITDA(1) of 3.8x; excluding BKI financing, adj. debt-to-EBITDA(1) of 2.8x Debt Profile (in millions) $1,250 3.65% $1
Slide 28: Strong Capital Return
Strong Capital Return Ellie Mae acquired in Capital Return Philosophy $2,081 2020 $1,916 $1,753 Dividend Growth § Grow the dividend as the company grows $1,425 Agreed to acquire Black § Double-digit increase on avg. since 2013; 3Q22 $1,460 $1,247 Knight dividend +15% y/y $1,198 $1,059 $991 $997 $944
Slide 29: A Disciplined Approach to M&A
A Disciplined Approach to M&A Disciplined Analytical Process Proactive Approach to Identifying Potential Targets § Rigorous Financial Criteria & Strict Valuation Principles § Target returns greater than 10% Leverage deep relationships with § ROIC above the cost of capital, with consistent growth cus
Slide 30: About Intercontinental Exchange
About Intercontinental Exchange Intercontinental Exchange, Inc. (NYSE: ICE) is a Fortune 500 company that designs, builds and operates digital networks to connect people to opportunity. We provide financial technology and data services across major asset classes that offer our customers access to mi
Slide 31: For Additional Information
For Additional Information Investor Relations website: www.ir.theice.com Investor Relations contact: Katia Gonzalez Senior Analyst, Investor Relations katia.gonzalez@ice.com investors@ice.com 30
Slide 32: Appendix
Appendix
Slide 33: ICE + Black Knight
ICE + Black Knight Strengthening the overall mortgage ecosystem for the benefit of all consumers
Slide 34: Transaction Overview
Transaction Overview ICE to acquire Black Knight • Creates a life-of-the-loan platform that will enable lenders to achieve a “customer for life” • Opportunity to remove additional friction and expense from the mortgage workflow, accruing to the Strategic benefit of all stakeholders, including the en
Slide 35: Life of Loan Platform Drives Efficiencies Across the Workflow
Life of Loan Platform Drives Efficiencies Across the Workflow Lead Processing, Home Generation & Underwriting, & Closing & Secondary & Servicing & Search Application Pre-Closing Post-Closing Loan Trading Defaults Loan Origination, Closing, Funding, Invoicing, Claims, Mortgage Workflow Marketing Call
Slide 36: Efficiencies Across the Workflow Underpin Expanded Opportunity
Efficiencies Across the Workflow Underpin Expanded Opportunity $14 billion Total Addressable Market ~$14 billion Total Addressable Market Adds Servicing TAM of ~$2Bn Application, • Highly complementary to origination TAM; highly recurring revenue stream Closing & Processing & Secondary Underwriting
Slide 37: Improve Visibility and Durability of Business Model
Improve Visibility and Durability of Business Model • Increases mix of high-growth recurring revenue • IMT recurring revenue mix increases to ~70% • Total ICE recurring revenue mix increases to ~55%+ • Adds a more stable revenue stream to our current origination-based revenues ICE Mortgage Technolog
Slide 38: Transaction Details and Assumptions
Transaction Details and Assumptions • Transaction valued at a market value of $13.1 billion or $85/share; enterprise value of ~$16 billion • Consideration to come in the form of $10.5 billion cash and ~$2.6 billion of stock based on ICE 10-day VWAP as Purchase Price of May 2, 2022 of $118.091 • Full
Slide 39: ICE Key Product Overview
ICE Key Product Overview
Slide 40: Overview of ICE Exchanges Key Products
Overview of ICE Exchanges Key Products Description Revenue Model § Global Oil complex including global crude benchmark Brent § Brent prices 2/3 of the world’s internationally traded oil § Suite of 700+ global product and locational spreads enable commercial customers more precise hedging tools § Glo
Slide 41: Overview of ICE Exchanges Key Products: Connectivity
Overview of ICE Exchanges Key Products Description Revenue Model § Cash equity and equity options trading at the NYSE Cash Equities & Equity Options § NYSE is a leading provider of market quality to large corporates, exchange-traded product issuers and investors § Unique hybrid designated market mak
Slide 42: Overview of ICE Fixed Income & Data Services Key Products
Overview of ICE Fixed Income & Data Services Key Products Description Revenue Model § Leading provider of end-of-day and real-time price evaluations on ~3 million fixed income securities spanning ~151 countries and 73 Fixed Income Data & currencies including sovereign, corporate and municipal bonds,
Slide 43: Overview of ICE Mortgage Technology Key Products
Overview of ICE Mortgage Technology Key Products Description Revenue Model Origination Technology § Encompass, loan origination system, is an all-in-one SaaS-based mortgage origination platform providing mission-critical workflow management and vendor connectivity. § Our origination technology acts
Slide 44: Additional Financial Data & Non-GAAP Reconciliations
Additional Financial Data & Non-GAAP Reconciliations
Slide 45: 5 Year Financial Performance
5 Year Financial Performance in millions except per share amounts INCOME STATEMENT 5 Year HIGHLIGHTS 2021 2020 2019 2018 2017 2016 CAGR Net Revenues $7,146 $6,036 $5,202 $4,979 $4,638 $4,512 10% Adj. Op Expenses $2,977 $2,495 $2,189 $2,071 $1,947 $1,955 9% Adj. Op Income $4,169 $3,541 $3,013 $2,908
Slide 46: 2022 Guidance
2022 Guidance ▪ FY2022 total recurring revenues $3.68 - $3.75 billion ▪ FY2022 adj. expenses $2.97 - $2.99 billion ▪ 3Q22 adj. expenses $743 - $753 million ▪ FY2022 cap ex/software $490 - $520 million ▪ 3Q22 adj non-op expense(1) $115 - $120 million ▪ FY2022 effective tax rate(2) 22.5% - 24.5% ▪ Sha
Slide 47: Adjusted Net Income & EPS
Adjusted Net Income & EPS Six Months Ended Six Months Ended in millions except per share amounts June 30, 2022 June 30, 2021 Net income attributable to ICE $ 1,212 $ 1,898 Add: Amortization of acquisition-related intangibles 306 313 Add: Transaction and integration costs 60 27 Add: Accrual relating
Slide 48: Adjusted Net Income & EPS
Adjusted Net Income & EPS Twelve Months Twelve Months Twelve Months Twelve Months in millions except per share amounts Ended 12/31/21 Ended 12/31/20 Ended 12/31/19 Ended 12/31/18 Net income attributable to ICE $ 4,058 $ 2,089 $ 1,933 $ 1,988 Add: Acquisition and integration costs 98 101 — 30 Less: G
Slide 49: Adjusted EBITDA Reconciliation
Adjusted EBITDA Reconciliation Twelve Months Ended in millions 6/30/2022 Adjusted net income(1) $3,015 Add: Adjusted net interest expense(1) 417 Add: Adjusted income tax expense(1) 894 Add: Adjusted depreciation and amortization(1) 398 Adjusted EBITDA from Continuing Ops $4,724 Debt, as reported $18
Slide 50: Adjusted Operating Income, Operating Margin & Operating Expense Reconciliation
Adjusted Operating Income, Operating Margin & Operating Expense Reconciliation Twelve Months Twelve Months Twelve Months Twelve Months Twelve Months Twelve Months in millions Ended 12/31/21 Ended 12/31/20 Ended 12/31/19 Ended 12/31/18 Ended 12/31/17 Ended 12/31/16 Total revenues, less transaction-ba
Slide 51: Free Cash Flow Calculation
Free Cash Flow Calculation Trailing Twelve Months Ended Twelve Months Twelve Months Twelve Months Twelve Months Twelve Months Twelve Months Twelve Months in millions 06/30/2022 Ended 12/31/2021 Ended 12/31/2020 Ended 12/31/2019 Ended 12/31/2018 Ended 12/31/2017 Ended 12/31/2016 Ended 12/31/2011 Cash
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