Bgc Group, Inc. · NASDAQ:BGC
Bgc — BGC Partners — Q4 2021 Earnings Presentation
33 slides from Bgc's earnings presentation, 2022
Slide 1: BGC Partners Earnings Presentation 4Q 2021
BGC PARTNERS, INC. NASDAQ: BGCP E A R N I N G S P R E S E N TAT I O N 4 Q 2 0 2 1
Slide 2: Disclaimer
DISCLAIMER 2 DISCUSSION OF FORWARD-LOOKING STATEMENTS ABOUT BGC Statements in this document regarding BGC that are not historical facts are “forward-looking statements” that involve risks and uncertainties, which could cause actual results to differ from those contained in the forward-looking statem
Slide 3: Highlights of Consolidated Results: 4Q 2021 & FY 2021
HIGHLIGHTS OF CONSOLIDATED RESULTS: 4Q 2021 & FY 2021 3 Highlights of Consolidated Results 4Q 2021 4Q 2020 Change FY 2021 FY 2020 Change (USD millions, except per share data) Revenues $461.6 $479.4 (3.7)% $2,015.4 $2,056.8 (2.0)% Revenues (excluding Insurance) 441.7 430.3 2.7% 1,837.0 1,873.4 (1.9)%
Slide 4: Business Overview: 4Q 2021 & FY 2021
BUSINESS OVERVIEW: 4Q 2021 & FY 2021 4 4Q 2021 FY 2021 REVENUE: REVENUE: $462M $2,015M 22% 20% Fenics Markets Voice/Hybrid Fenics Markets Voice/Hybrid Brokerage 71% 4Q 19% Brokerage 68% FY 18% Fenics Growth Fenics Growth Platforms Platforms 2% 3% Insurance Insurance 4% 9% Other1 Other1 3% 3% PRE-TAX
Slide 5: Overview: Revenue by Asset Class & Geography 2021
OVERVIEW: REVENUE BY ASSET CLASS & GEOGRAPHY 2021 5 REVENUE BY ASSET CLASS GLOBAL OFFICE LOCATIONS & REVENUES Data, Software & Rates Post-trade and Other1 AMERICAS EMEA APAC 26%29% Insurance 8% (Sold Nov. 1, 2021) 4% 4Q Revenue: 4Q Revenue: 4Q Revenue: Equity Derivatives & 4Q $138M $256M $68M Cash E
Slide 6: Overview: Fenics 4Q 2021
OVERVIEW: FENICS 4Q 2021 6 FENICS REVENUE REVENUE BY ASSET CLASS Fenics Markets NET REVENUES: Fenics Growth Platforms $101M +20% yr/yr 20% FX $101M 39% $84M $14M Rates $7M 4Q 15% $101M Credit $77M $88M 2% Equity Derivatives & 24% Cash Equities Data, Software & Post-trade 4Q20 4Q21 FENICS MARKETS QUA
Slide 7: Overview: Fenics FY 2021
OVERVIEW: FENICS FY 2021 7 FENICS REVENUE NET REVENUE CONTRIBUTION Fenics Markets Fenics Net Revenue Contribution (excl. Insurance Brokerage) NET REVENUES: Fenics Growth Platforms Fenics Net Revenue 22% $401M 20% 2014 - 2021 CAGR: 22% +26% yr/yr 17% $401M $401M 14% 14% $46M 13% $319M 13% 12% 15% $31
Slide 8: FMX
FMX 8 FMX OVERVIEW LCH CLEARING AGREEMENT Cross margining FMX U.S. Rates Futures with LCH U.S. Rates collateral will provide powerful capital efficiencies Announced FMX, which combines Fenics UST’s leading U.S. Treasury IRS Initial Margin at Major CCPs3 business with cutting-edge U.S. Interest Rates
Slide 9: Fenics UST
FENICS UST 9 UST TRADING VOLUME1 CLOB MARKET SHARE2 UST CLOB MARKET SHARE2 Q4 2021 ADV (yr/yr) Quarterly Average CME Primary Primary 20% Dealerweb3 Dealerweb3 Fenics UST BrokerTec Dealerweb (incl. former Nasdaq FI) Dealer4 Dealer 19% (incl. former Nasdaq FI) 65% 10% 17% 17% 24% 14% 19% Fenics UST 21
Slide 10: Lucera
LUCERA 10 INFRASTRUCTURE & CONNECTIVITY OFFERING WITH HIGHLY RECURRING, COMPOUNDING SUBSCRIPTION REVENUE MODEL REVENUE LUMEMarkets Connect LUMEMARKETS 70% 4Q21 4Q21 Revenue Low latency aggregator, providing a single access point across Revenue Split 30% +72% multiple fragmented marketplaces and ex
Slide 11: Fenics Market Data
FENICS MARKET DATA 11 LEVERAGING BGC’S GLOBAL CAPITAL MARKETS ECOSYSTEM TO DEVELOP HIGHLY VALUABLE MARKET DATA PRODUCTS MARKET OPPORTUNITY Record global consumption of financial market data in 2020 totalling $33B1 Recurring, compounding subscription-based model Signed 42 new contracts in 4Q21 wi
Slide 12: Cryptocurrency Initiatives
CRYPTOCURRENCY INITIATIVES 12 COMPREHENSIVE MULTI-CHANNEL DIGITAL ASSET PLATFORM WORLD-CLASS INFRASTRUCTURE THAT OFFERS FULLY COMPLIANT CRYPTOCURRENCY WORKFLOWS Fenics Execution Connect • Futures Exchange: CFTC Regulated DCM & DCO • Software-Defined Network connecting cryptocurrency venues with bank
Slide 13: Shareholder Value Creation
SHAREHOLDER VALUE CREATION 13 BGC HAS A STRONG HISTORY OF CREATING VALUE FOR SHAREHOLDERS 13 BGC Insurance Working with strategic Brokerage partners to launch a CRYPTOCURRENCY U.S. Interest Rates Newmark futures exchange5 OFFERINGS Sold to The Ardonagh Group4 Trayport Successfully completed tax-free
Slide 14: Outlook: 1Q 2022
OUTLOOK: 1Q 2022 14 14 Guidance Actual Metric (USD million) 1Q22 1Q21 Revenues (excl. Insurance) $490 - $540 $515.1 Revenues $567.6 Pre-tax Adjusted Earnings $105 - $125 $113.9 Metric (%) FY 2022 FY 2021 Adjusted Earnings Tax Rate 8 - 10% 6.4% BGC’s revenues were approximately 2 percent lower for
Slide 15: GAAP Financial Results
BGC PARTNERS, INC. GAAP FINANCIAL RESULTS
Slide 16: Condensed Consolidated Statements of Financial Condition
BGC PARTNERS, INC. CONDENSED CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION 16 (IN THOUSANDS, EXCEPT PER SHARE DATA) (UNAUDITED) (UNDER GAAP) December 31, December 31, 2021 2020 Assets Cash and cash equivalents $ 553,598 $ 596,291 Cash segregated under regulatory requirements 13,201 257,115 Securiti
Slide 17: Condensed Consolidated Statements of Operations
BGC PARTNERS, INC. CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS 17 (IN THOUSANDS, EXCEPT PER SHARE DATA) (UNAUDITED) (UNDER GAAP) Three Months Ended December 31, Year Ended December 31, Revenues: 2021 2020 2021 2020 Commissions $ 349,896 $ 377,146 $ 1,541,900 $ 1,567,668 Principal transactions 73
Slide 18: Appendix
MN BGC PARTNERS, INC. + bgc (5 SF! Fenics
Slide 19: Front Office Headcount & Productivity
FRONT OFFICE HEADCOUNT & PRODUCTIVITY 19 FRONT OFFICE HEADCOUNT AND PRODUCTIVITY (Productivity in USD 000s) (Excludes Insurance Brokerage) $811 TECHNOLOGY $820 $791 $753 $749 $750 $756 $766 $736 $735 $770 2,491 AUTOMATION 2,573 2,388 $720 2,351 2,297 2,238 2,196 2,148 2,111 $670 $620 HIGHER 4Q2019 1
Slide 20: BGC's Fully Diluted Share Count Summary as of 12/31/21
BGC’S FULLY DILUTED SHARE COUNT SUMMARY AS OF 12/31/21 20 20 BGC Partners, Inc. Fully Diluted Share Count Summary Fully-diluted Shares Ownership (%) (as of December 31, 2021) (millions) Public 296.7 60% Class A owned by Public 296.7 60% Employees 98.1 20% 1 Class A owned by executives, board members
Slide 21: Strongly Capitalized; Investment Grade Credit Profile
STRONGLY CAPITALIZED; INVESTMENT GRADE CREDIT PROFILE 21 INVESTMENT GRADE CREDIT RATING 21 BGC Partners, Inc. As of 12/31/2021 Investment Grade Credit Rated: Cash and Cash Equivalents $553,598 • Fitch: BBB- (Outlook: Stable) Securities Owned 40,838 • S&P: BBB- (Outlook: Stable) Marketable Securiti
Slide 22: Fenics Ecosystem
FENICS ECOSYSTEM 22 MULTIPLE TRADING PROTOCOLS ACROSS A COMPREHENSIVE SET OF FINANCIAL INSTRUMENTS Equity Derivatives Data, Software & Rates Credit FX & Cash Equities Post-trade Key KeyProducts: Products: Key Products: Key Products: Key Products: Key Products: Products: Key Products: Interest ▪ Int
Slide 23: BGC Revenue Correlation & Industry Volumes
BGC REVENUE CORRELATION & INDUSTRY VOLUMES 23 4Q21 vs. 4Q20 BGC Asset Class Industry Metric Correlation Industry Metric (Revenue) Volume Change vs. Eurex Interest Rate Derivatives (Total Contracts Traded) 0.78 18% Rates vs. Primary Dealer U.S. Government Securities Trading Volume (ADV) 0.72 19% vs.
Slide 24: Non-GAAP Definitions and Reconciliation Tables
BGC PARTNERS, INC. NON-GAAP DEFINITIONS AND RECONCILIATION TABLES
Slide 25: Reconciliation of GAAP Income to Adjusted Earnings & Post-Tax Adjusted EPS
RECONCILIATION OF GAAP INCOME (LOSS) FROM OPERATIONS BEFORE INCOME TAXES TO ADJUSTED EARNINGS & GAAP FULLY DILUTED EPS TO POST-TAX ADJUSTED EPS 25 (IN THOUSANDS, EXCEPT PER SHARE DATA) (UNAUDITED) 25 Q4 2021 Q4 2020 FY 2021 FY 2020 GAAP income (loss) from operations before income taxes $ 104,750 $ (
Slide 26: Reconciliation of GAAP Income to Adjusted Earnings (continued)
RECONCILIATION OF GAAP INCOME (LOSS) FROM OPERATIONS BEFORE INCOME TAXES TO ADJUSTED EARNINGS & GAAP FULLY DILUTED EPS TO POST-TAX ADJUSTED EPS 26 (IN THOUSANDS, EXCEPT PER SHARE DATA) (UNAUDITED) (1) The components of equity-based compensation and allocations of net income to limited partnership un
Slide 27: Reconciliation of GAAP Net Income to Adjusted EBITDA
RECONCILIATION OF GAAP NET INCOME (LOSS) AVAILABLE TO COMMON STOCKHOLDERS TO ADJUSTED EBITDA (IN THOUSANDS) 27 (UNAUDITED) 27 Q4 2021 Q4 2020 FY 2021 FY 2020 GAAP net income (loss) available to common stockholders $ 76,453 $ (4,029) $ 124,007 $ 45,062 Add back: Provision (benefit) for income taxes 1
Slide 28: Fully Diluted Weighted-Average Share Count and Liquidity Analysis
FULLY DILUTED WEIGHTED-AVERAGE SHARE COUNT UNDER GAAP AND FOR ADJUSTED EARNINGS & LIQUIDITY ANALYSIS (IN THOUSANDS) 28 (UNAUDITED) 28 FULLY DILUTED WEIGHTED AVERAGE SHARE COUNT LIQUIDITY ANALYSIS Q4 2021 Q4 2020 FY 2021 FY 2020 December 31, 2021 December 31, 2020 Common stock outstanding 370,476 365
Slide 29: Differences Between Non-GAAP and GAAP Consolidated Results
DIFFERENCES BETWEEN NON-GAAP AND GAAP CONSOLIDATED RESULTS 29 NON-GAAP FINANCIAL MEASURES 29 This document contains non-GAAP financial measures that differ from the most directly comparable measures calculated and presented in accordance with Generally Accepted Accounting Principles in the United St
Slide 30: Differences Between Non-GAAP and GAAP Consolidated Results (continued)
DIFFERENCES BETWEEN NON-GAAP AND GAAP CONSOLIDATED RESULTS 30 (CONTINUED) All share equivalents that are part of the Company’s equity-based compensation program, including REUs, PSUs, LPUs, HDUs, and other units that may be made exchangeable into common stock, as well as RSUs (which are recorded usi
Slide 31: Differences Between Non-GAAP and GAAP Consolidated Results (continued)
DIFFERENCES BETWEEN NON-GAAP AND GAAP CONSOLIDATED RESULTS 31 (CONTINUED) 31 After application of these adjustments, the result is the Company’s taxable income for its pre-tax Adjusted Earnings, to which BGC then applies the statutory tax rates to determine its non-GAAP tax provision. BGC views the
Slide 32: Differences Between Non-GAAP and GAAP Consolidated Results (continued)
DIFFERENCES BETWEEN NON-GAAP AND GAAP CONSOLIDATED RESULTS 32 (CONTINUED) ADJUSTED EBITDA DEFINED BGC also provides an additional non-GAAP financial performance measure, “Adjusted EBITDA”, which it defines as GAAP “Net income (loss) available to common stockholders”, adjusted to add back the followi
Slide 33: Media and Investor Contacts
33 33 Media Contact: Karen Laureano-Rikardsen +1 212-829-4975 Investor Contact: ir.bgcpartners.com Jason Chryssicas twitter.com/bgcpartners +1 212-610-2426 linkedin.com/company/bgc-partners