Tp Icap Group Plc · LSE:TCAP
Tp Icap — Investor Day (October 2021)
48 slides from Tp Icap's investor day presentation, Oct 12, 2021
Slide 1: Investor Seminar
INVESTOR SEMINAR 12 October 2021 TP ICAP Classification: Public
Slide 2: 1. Introduction
1. Introduction 2 TP ICAP Classification: Public
Slide 3: Parameta Solutions Leadership Team and Agenda
Introduction Parameta Solutions Leadership Team and Agenda 1. Introduction 2. Financial Market Data Industry 3. Post Trade Solutions Industry 4. Strategy ○ Product & Demo ○ Distribution ○ Clients Eric Sinclair Chris Dearie David Perkins Jonathan Cooper 5. Targets and Investment Case CEO Deputy CEO &
Slide 4: Group Structure
Introduction Group Structure Global Broking Energy & Commodities Agency Execution Parameta Solutions Data & Analytics (D&A) Post Trade Solutions (PTS) 4 TP ICAP Classification: Public
Slide 5: Investment Case
Introduction Investment Case 1 Unique Solutions 2 Focused Strategy 3 Highly Valuable 5 TP ICAP Classification: Public
Slide 6: Data & Analytics Strong double-digit growth
Introduction Data & Analytics Strong double-digit growth 150 100 Revenue 72 Data & Analytics (£m) 50 ✓ World’s leading provider of scarce, neutral OTC pricing data 0 - 500,000+ instruments 2018 2019 2020 H1 2021 - 1,000+ institutional clients 80 - 200+ staff globally 60 ✓ Consistent double-digit r
Slide 7: Post Trade Solutions FinTech electronification
Introduction Post Trade Solutions 25 FinTech electronification 20 15 Revenue 10 10 Post Trade Solutions (£m) 5 • Services and processes that occur after trade execution 0 Our Fintech Services: 2018 2019 2020 H1 2021 25 Resetting Compression Repo 20 “Cleaning up” trader portfolios Replacing multipl
Slide 8: 2. Financial Market Data Industry
1. Introduction 2. Financial Market 2. Financial Market Data Industry 3. Post Trade Solutions Industry Data Industry 4. Strategy o Product & Demo o Distribution o Clients 5. Targets and Investment Case 6. Q&A 8 TP ICAP Classification: Public
Slide 9: Financial Market Data Overview
Financial Market Data Industry Financial Market Data Overview $39.4 billion industry growing 5% p.a. Participants Financial Market Data Industry Content Generators Data Aggregators & Re-distributors c.$7bn revenues c.$32bn revenues $39.4bn - Exchanges - LSEG / Refinitiv 5% CAGR $37.1bn - IDBs - Bloo
Slide 10: IDB Data Industry
Financial Market Data Industry IDB Data Industry Parameta Solutions is the leading provider IDB Data Industry: $321m Revenue 2020 – IDB Segment 8% CAGR • Inter-Dealer-Brokers (“IDBs”) data revenue is 0.8% of industry • 8% CAGR revenue growth for IDBs • IDBs produce neutral Over-the-Counter (“OTC”) d
Slide 11: Financial Market Data Growth
Financial Market Data Industry Financial Market Data Growth - Financial Market Data Growth Well-placed to capitalise on trends Well placed to capitalise on trends Growth Driver Reason Our Advantage Independent Data Objective source, positions not taken in securities priced World’s largest provider o
Slide 12: Financial Market Data Significant opportunities in high growth sectors
Financial Market Data Industry Financial Market Data Significant opportunities in high growth sectors $39.4 billion Industry by Sector Pricing, Reference Benchmarks & Indices IDB & Other IDB data: Our Current Growth market: & Valuation $4.1 bn $1.6 bn $0.3 bn $5.9 bn 11% CAGR 7% CAGR 10% CAGR (0.8%
Slide 13: Targeting Growth Sectors: Evaluated Pricing
Financial Market Data Industry Targeting Growth Sectors Clients require greater observability and transparency Evaluated Pricing $3.8bn Market in 2020 8% 5-yr CAGR Industry Overview Other • Risk and Regulation → higher standards in OTC evaluated pricing required providers • ‘Observable’ trade and or
Slide 14: Targeting Growth Sectors: OTC Benchmarks and Indices
Financial Market Data Industry Targeting Growth Sectors Unique position to target OTC Benchmarks and Indices Benchmarks and Indices $4.1bn Market in 2020 11% 5-yr CAGR Industry Overview ICE • Double-digit growth rate 2% Other • OTC markets are fastest growing sub-sectors e.g.: 14% Bloomberg MSCI 25%
Slide 15: 3. Post Trade Solutions Industry
3. Post Trade Solutions 1. Introduction 2. Financial Market Data Industry 3. Post Trade Solutions Industry Industry 4. Strategy o Product & Demo o Distribution o Clients 5. Targets and Investment Case 6. Q&A 15 TP ICAP Classification: Public
Slide 16: What are Post Trade Solutions
Post Trade Solutions Industry What are Post Trade Solutions Large addressable market for multi-lateral optimisation Post Trade Solutions – Crucial for efficient financial systems Our Services Description Competitors Est. market size1 • CME Reset • “Cleaning up” residual fixing risks Resetting • Capi
Slide 17: 4. Strategy
4. Strategy 1. Introduction 2. Financial Market Data Industry 3. Post Trade Solutions Industry 4. Strategy o Product & Demo o Distribution o Clients 5. Targets and Investment Case 6. Q&A 17 TP ICAP Classification: Public
Slide 18: Strategy Overview
Strategy Strategy Overview Three pronged approach to sustain success Product Build products and services that increase the addressable market size Distribution Grow the direct and multi-channel model Client Diversify and expand our client and user base 18 TP ICAP Classification: Public
Slide 19: Strategy Overview Targeting high growth sectors
Strategy - Product Strategy Overview Targeting high growth sectors Product Build products and services that increase the addressable market size Distribution Grow the direct and multi-channel model Client Diversify and expand our client and user base 19 TP ICAP Classification: Public
Slide 20: D&A Product Strategy: Precision in pursuing new addressable markets
Strategy - Product D&A Product Strategy Precision in pursuing new addressable markets How are we accessing new addressable Post Trade markets? Analytics Wisdom • Precise targeting of resources for greatest revenue impact Knowledge • Adjacent product areas focuses on building market relevance Asset C
Slide 21: D&A Product Strategy: Data is the building block
Strategy - Product Data D&A Product Strategy Data is the building block of strategy Data Data product recent launches include: • Generated through our Global Broking, Energy & Commodities and Agency Execution businesses globally across 2,500+ brokers in 27 countries Oil Market Data Feed • 500,000+ i
Slide 22: New Product Momentum
Strategy - Product Data New Product Momentum RFR driving significant new subscription revenue Delivering Valuable Insight Adoption Indicator RFR Adoption vs. New Subscriptions # Subscribers 14% 200 • One of the 21 new products 180 12% 160 • Unique position at heart of OTC markets 10% 140 • Actively
Slide 23: Growth Sector Products: Evaluated Pricing
Strategy - Product Information Growth Sector Products Evaluated Pricing – our unique solution leveraging unique data Why Target Evaluated Pricing? 300 Evaluated Pricing Product Example • Regulatory scrutiny driving need for observable, order and trade data 250 • Lack of observable OTC data we are un
Slide 24: Growth Sector Products: OTC Benchmarks and Indices
Strategy - Product Information Information Growth Sector Products OTC Benchmarks and Indices - driving continued growth Why Target Benchmarks and Indices? Current and Future Revenue Opportunities • Independent, neutral, conflict free data from Transparency 1. Licensing data for Benchmarks and Indice
Slide 25: Growth Sector Products: Regulatory Products
Strategy - Product Information Information Growth Sector Products Regulatory Products meet clients’ increasing obligations Why Target Regulatory Products? • Clients have increased reporting obligations to clients and regulators • Large client fines driving demand for comprehensive surveillance data
Slide 26: Growth Sector Products: Trading Analytics
Strategy – Product Wisdom Growth Sector Products Knowledge Trading Analytics creates valuable client insights Why Target Trading Analytics? • Best execution and transparency driving demand for analytics • Buy side product focus increases client diversity • Solution integrates client data, increasing
Slide 27: Trading Analytics Demonstration
Strategy - Product Trading Analytics Demonstration 27 TP ICAP Classification: Public
Slide 28: Technology Case Study
Strategy - Product Technology Case Study Trading Analytics leveraging key technology Overview • Leverages best-of-breed technology solutions to better serve client needs: • Cloud database with secure data share • Search engine technology powering Google o Cost efficient distribution of data and serv
Slide 29: Partner Testimonial – View from Google
Partner Testimonial – View from Google "Google Cloud is delighted to collaborate with TP ICAP Parameta Solutions on its Trading Analytics solution, which leverages the best of our cloud capabilities to develop an innovative data and analytics platform. The solution will help address the ever-changin
Slide 30: Matchbook
Strategy - Product Matchbook Established high margin electronic solution Matchbook $70m Competition/ Addressable Market* Trends / Products Competitive Advantages Clients and Revenue model • Addressable market: $70m • Increased competition • Powered by best OTC data • Client mix: 100% dealer activity
Slide 31: ClearCompress
Strategy - Product ClearCompress FinTech compression service ClearCompress $140m Competition/ Addressable Market* Trends / Products Competitive Advantages Clients and Revenue model • Addressable market: $140m • Client driven solutions • Established industry working group • Client mix: 100% dealer ac
Slide 32: eRepo
Strategy - Product eRepo Electronic platform with increasing client engagement eRepo $35m Competition/ Addressable Market* Trends / Products Competitive Advantages Clients and Revenue model • Addressable market: $35m • Clients want increased competition • Competitive fee schedule • Revenue model: Mi
Slide 33: Product Strategy
Strategy - Product Product Strategy Increasing value for clients and expanding our addressable market Summary: Build on continued growth of data Client-led product development Focus where Parameta Solutions has a differentiated offering Progressive, agile, component based development Post Trade Solu
Slide 34: Strategy Overview Facilitating greater client optionality
Strategy - Distribution Strategy Overview Facilitating greater client optionality Product Build products and services that increase the addressable market size Distribution Grow the direct and multi-channel model Client Diversify and expand our client and user base 34 TP ICAP Classification: Public
Slide 35: Distribution Overview
Strategy - Distribution Distribution Overview Evolving network of partners Major Market Challenger Market Major Market Data Vendors Data Vendors Data Vendors • Continue to dominate financial services for market data provision • Consolidation (LSEG, S&P/IHS Markit) shows strong relationship need • Co
Slide 36: Distribution: Enabling client optionality
Strategy - Distribution Distribution Enabling client optionality Channel Partners • Bloomberg • Refinitiv/LSEG Direct Delivery • S&P Global/IHS Markit Public Cloud • Data Feeds • AWS • Internet Display • Azure • Webstore • Google CLIENTS Comprehensive suite of solutions • Direct Delivery → Fast path
Slide 37: Distribution Technology: Data Share
Strategy - Distribution Distribution Technology Data Share - Enabling client agility and lowering infrastructure costs Traditional Data Distribution Delivery Market Data Internet or Client side Client Users Applications Aggregators Leased Line Applications VERSUS Parameta Solutions Data Share • Data
Slide 38: Strategy Overview Growing clients and users
Strategy - Client Strategy Overview Growing clients and users Product Build products and services that increase the addressable market size Distribution Grow the direct and multi-channel model Client Diversify and expand our client and user base 38 TP ICAP Classification: Public
Slide 39: Global Sales Executing the strategy
Strategy - Client Global Sales Executing the strategy Americas EMEA APAC Structured and scientific approach Buyside New clients including Asset Owners, Hedge Funds, Pension • Shortened sales cycle → 16 months to 9 months Funds and Insurance Companies • Regional leadership → scale for growth Helping
Slide 40: Subscription Service Commercial Use Case
Strategy - Client Subscription Service Commercial Use Case Locations Frequency of Service Business Functions Applications Distribution 40 TP ICAP Classification: Public
Slide 41: Sparta Commodities Testimonial
Strategy - Client Sparta Commodities Testimonial 41 TP ICAP Classification: Public
Slide 42: Strategy Summary Voice of the Client
Strategy - Client Strategy Summary Voice of the Client BT Pension Fund “We enjoy a longstanding relationship with Parameta Solutions utilising their scarce, unique and highly accurate content to Boris Molls help drive our internal valuation and modelling capabilities. Their innovative and collaborat
Slide 43: 5. Targets and Investment Case
1. Introduction 5. Targets and Investment 2. Financial Market Data Industry 3. Post Trade Solutions Industry Case 4. Strategy o Product & Demo o Distribution o Clients 5. Targets and Investment Case 6. Q&A 43 TP ICAP Classification: Public
Slide 44: Key Financial Targets
Targets and Investment Case Key Financial Targets Delivering on our stated financial targets TP ICAP Capital Markets Day in December 2020 gave three financial targets for Data & Analytics1 D&A Revenue Growth D&A Contribution Margin D&A Operating Margin • Medium term target of c.11% CAGR • 2023 targe
Slide 45: Strategy Execution
Targets and Investment Case Strategy Execution Progress towards achieving our strategic goals Wisdom Product - Increasing Value for Clients Revenue % Knowledge • Potential for greater revenue, profitability and expanded market presence outside of IDBs Data Medium o Launched FX Evaluated Pricing (Inf
Slide 46: Investment Case
Targets and Investment Case Investment Case 1 Unique Solutions Scarce, neutral OTC data on an unmatched scale 2 Focused Strategy Executing in high growth sectors with momentum 3 Highly Valuable Double-digit growth with sticky, high margin revenues 46 TP ICAP Classification: Public
Slide 47: 6. Q&A
6. Q&A 47 TP ICAP Classification: Public
Slide 48: Disclaimer
Disclaimer This presentation has been prepared by TP ICAP plc (together with its subsidiaries, the “Group”) solely for informational purposes. No representation or warranty express or implied is made as to, and no reliance should be placed on, the fairness, accuracy, completeness or correctness of t