Stonex Group Inc. · NASDAQ:SNEX
Stonex — INTL FCStone — Investor Presentation (2018)
27 slides from Stonex's investor presentation, 2018
Slide 1: Investor Presentation 3rd Quarter 2018
INVESTOR PRESENTATION 3rd Quarter 2018 NASDAQ: INTL
Slide 2: Disclaimer
Disclaimer This presentation contains “forward-looking statements” within the meaning of "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Forward-looking statements are identi
Slide 3: Key stats: market cap, growth rates, valuation metrics
10yr Compound Growth Rates Market Capitalization @ $53/share Operating Revenue – 24% $1 billion BVPS – 12% Adjusted BVPS – 13% Annualized YTD’18 Operating Revenue - $977mm ROE – 11.3% Adjusted ROE – 15.7% EPS - $2.75 Share Price Adjusted EPS - $4.24 Valuation Metrics @ Performance $53/share 1 yr +13
Slide 4: Leading independent financial services company connecting over 20,000 clients
Leading independent financial services company that connects over 20,000 clients and over 120,000 retail clients with over 40 public exchanges and hundreds of liquidity sources globally. 4
Slide 5: Efficient and transparent execution, intelligence, clearing and settlement
We offer a unique capability to provide efficient and transparent execution (high touch or electronic), market intelligence as well as post trade settlement and clearing in nearly all markets and asset classes. 5
Slide 6: Monetizing client activity through commissions, spreads and interest
We monetize the client activity across our platform by earning commissions and spreads on trade execution and in addition earn interest on over $3 billion of balances which our clients custody with us. 6
Slide 7: INTL FCStone Overview
INTL FCStone Overview Company Overview Key Stats (1) INTL FCStone is a diversified mid-sized financial services company that Financial Metrics serves as an intermediary between our customers and the global financial Operating Revenue: $937.7mm markets. Net Income: $16.2mm(2) We execute and c
Slide 8: Business Segment Overview
Business Segment Overview CLEARING AND COMMERCIAL GLOBAL PHYSICAL SECURITIES EXECUTION HEDGING PAYMENTS SERVICES COMMODITIES Net Operating $226 (39%) $90 (16%) $96 (17%) $119 (21%) $42 (7%) Revenue ($mm)* High-touch, value- Network covers over Market maker for Competitive clearing and Full
Slide 9: Growing Global Footprint
Growing Global Footprint SERVING MORE THAN 20,000 CUSTOMERS GLOBALLY WITH 1,600 PROFESSIONALS LOCATED IN 13 COUNTRIES ON 5 CONTINENTS 9
Slide 10: Our Clients
Our Clients High touch advisory approach Commercial Entities, Charities & NGOs High margin, low volume Seeking to mitigate risk or enhance margins in production processes Large runway but slow to scale Charities & NGOs demand best execution on their foreign payments Expensive delivery
Slide 11: Interest Rate Sensitivity
Interest Rate Sensitivity Average Invested Customer Balances & Interest Earnings by Quarter 3,500 $13.8mm 14.0 1.17% 1.45% 1.76% Yield: 0.89% 1.09% $10.8mm $101mm 3,000 $87mm $95mm 12.0 $87mm $86mm $837mm $8.9mm $803mm 2,500 $857mm $8.0mm $819mm 10.0 $893mm 2,000 8.0 USDmm $6.5mm USDmm 1,500 6.0 $2,
Slide 12: Long-Term Performance
Long-Term Performance Operating Revenue ($mm) Net Income From Continuing Operations ($mm) 1000 $938 60 $56 $55 $784 50 800 $671 $624 40 600 $491 $468 30 -3% CAGR 400 $19 $20 20 $16(1)(3) 200 10 $6(1)(2) 0 0 2013 2014 2015 2016 2017 LTM 2013 2014 2015 2016 2017 LTM Stockholder’s Equity ($mm) Adjusted
Slide 13: Revenue Breakdown
Revenue Breakdown Other foreign, South Asia, 3.7% 0.6% America, 6.9% Europe, 21.3% United States, 67.5% (1) “Physical Trading” includes Sales of physical commodities, Cost of sales of physical commodities and associated Trading gains, net in our Physical Commodities segment. (2) Operating Revenue br
Slide 14: INTL Benefits from Macro Trends
INTL Benefits from Macro Trends Industry Challenge Approved regulatory status as REGULATION broker-dealer, swap dealer, FCM Difficult to offer broad solutions due to increased complexity Fully compliant in multiple Significantly increased cost burden jurisdictions Natural home for mid-sized
Slide 15: INTL Investment Rationale
INTL Investment Rationale Volatility. Drives volumes and widens trading spreads Interest Rates. We have a $3bn+ float – 100b.p. = over $1.00 EPS. Operating Leverage. Scalable platform with operational leverage Diversified Earnings Stream across product & geography Consolidating Market in the Mid-Tie
Slide 16: Our Business Segments
INTL FCStone’ Our Business Segments
Slide 17: Commercial Hedging
Commercial Hedging Transactional Revenue Breakdown (LTM) Delivering a high touch, value added service to commercial customers seeking to manage risk 7% Long term quality relationships with customers Comprehensive platform allows access to advice, 20% exchange listed products, OTC and structure
Slide 18: Global Payments
Global Payments Leading capability to offer a global payments solution to customers in over 140 currencies and markets Value-added execution efficiencies - strong ties to local correspondent banks affords access to best rates Significant investment in technology to reduce costs and create scal
Slide 19: Securities
Securities • We are the #1 ranking market maker by dollar value for E international securities traded over-the-counter, three Net Operating Revenue Breakdown (LTM) q years running u • We rank #1 by dollar value in over 2,600 securities 10% i • We make markets in over 5,000 securities including 3% t
Slide 20: Clearing and Execution
Clearing and Execution Competitive and efficient clearing and execution of exchange- Net Operating Revenue Breakdown (LTM) traded futures and options for traders and institutions Provide services for institutional and professional trader market segments 24% Offer facilities management and outs
Slide 21: Physical Commodities
Physical Commodities Full range of trading and hedging capabilities, including Net Operating Revenue Breakdown (LTM) OTC products, to select producers, consumers, and investors Act as principal, commit own capital to buy/sell on spot and forward basis 39% Provide commodity financing and facili
Slide 22: Appendix
INTL FCStone’ Appendix
Slide 23: Balance Sheet Summary
Balance Sheet Summary ($ in millions) 9/30/2017 6/30/2018 Cash and cash equivalents 314.9 347.8 Conservatively capitalized with minimal Cash, securities and other assets segregated under federal and debt other regulations 1 518.8 1,212.6 0.74x Debt/Equity as of 6/30/18 Securities purchased under
Slide 24: Income Statement Summary
Income Statement Summary ($ in millions) Three Months Ended June 30, Nine Months Ended June 30, 2018 2017 % Change 2018 2017 % Change Revenues: Sales of physical commodities $ 6,866.2 $ 5,317.0 29 % $ 20,836.4 $ 16,486.3 26 % Trading gains, net 103.4 79.9 29 296.9 246.9 20 Commission and clearing fe
Slide 25: Company Timeline
Company Timeline Three Predecessor Firms Combine to Form a Global Leader Acquisition of Sterne Agee, Agricultural wholesaler Saul International Assets FCStone listed on correspondent clearing and Stone and Company listed on Nasdaq Nasdaq wealth management founded FCC acquires Saul Stone; Internation
Slide 26: Transaction Volume Summary
Transaction Volume Summary Volumes and Other Data: 6/30/16 9/30/16 12/31/16 3/31/17 6/30/17 9/30/17 12/31/17 3/31/18 6/30/18 Exchange-traded futures & options 26,245.5 22,600.6 24,112.7 25,460.0 24,190.4 25,385.4 25,862.1 36,696.0 35,632.6 (contracts, 000's) OTC (contracts, 000's) 462.7 301.4 301.8
Slide 27: Net Income & Equity Reconciliation
Net Income & Equity Reconciliation QUARTERLY (in millions) Q1 2017 Q2 2017 Q3 2017 Q4 2017 Q1 2018 Q2 2018 Q3 2018 Net income (loss) (non-GAAP) reconciliation: Net income (loss), as reported (GAAP) $ 6.3 $ 11.0 $ 12.7 $ (23.6) $ (6.9) $ 22.7 $ 24.0 Bad debt on physical coal, net of incentive recaptu