Marex Group Plc · NASDAQ:MRX
Marex — Q1 2024 Earnings Presentation
24 slides from Marex's earnings presentation, May 16, 2024
Slide 1: Diversified Resilient Dynamic
Diversified Resilient Dynamic Full Year 2023 and First Quarter 2024 Update May 2024
Slide 2: Disclaimer
Disclaimer Forward-Looking Statements This presentation contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. All statements contained in this presentation that do not relate to matters of historical fact should be considered forward-looking
Slide 3: Full Year 2023 & Q1 2024 Update
Full Year 2023 & Q1 2024 Update Ian Lowitt, CEO
Slide 4: Marex Plays a Key Role in Connecting Clients to Commodity and Financial Markets
Marex Plays a Key Role in Connecting Clients to Commodity and Financial Markets Illustrative Clients 1 Clearing Services Key market connectivity to Marex global exchanges 1 Clearing Services Illustrative Exchanges 2 Agency & Execution Acting as agent matching & Clearing Houses buyers and sellers 4 2
Slide 5: Our Evolution Into a Diversified Global Platform
Our Evolution Into a Diversified Global Platform $230 CAGR: ~34% $122 $80 $68 Adjusted Operating $16 Profit ($m)1 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 Q1 2024 2011 2019 2022 2023 Q1’ 2024 Acquired: Acquisitions of: Acquisitions of: Acquisition of: Acquisition of: Spectron Group Launched
Slide 6: Key Highlights
Key Highlights • Successful execution of our growth strategy has created a diversified and resilient global platform • Building out our product capabilities and geographic reach, diversifying our business and expanding our addressable market • Continue to grow our client base and increase the amount
Slide 7: Growth In Market Volumes
Growth In Market Volumes Strong growth in energy and commodity market volumes, supporting our core franchise Exchange Contracts by Asset Class 9.9bn 3.6% 10.2bn 2.7bn 3.5% 2.8bn Commodities +14% 0.7bn Commodities +9% 2.0bn 2.3bn 0.6bn Financials +1% Financials +2% 7.9bn 7.9bn 2.1bn 2.1bn 2022 2023 Q
Slide 8: Operating environment update
Operating environment update • 2022 characterised by significant volatility and elevated commodity prices following the Ukraine crisis • 2023 and YTD 2024 has seen more normalised levels of volatility and commodity prices • Federal Funds rate increased dramatically in 2022, forward curve now reflect
Slide 9: Strong Revenue Performance Across our Core Service Areas
Strong Revenue Performance Across our Core Service Areas Hedging and ($m) Clearing Agency and Execution Market Making Corporate Investment Solutions $374 $542 $128 $173 $154 $100 2023 $200 performance $231 $48 $8 2022 2023 2022 2023 2022 2023 2022 2023 2022 2023 $168 $158 22% Q1 2024 $101 performanc
Slide 10: Increasing client activity on the Marex platform
Increasing client activity on the Marex platform Volume growth in 2023 primarily reflected benefit of ED&F Man Capital Markets acquisition Marex Market Marex Volumes Revenue Volumes Marex Volumes Marex Revenue Market Volumes 2023 vs Q1 24 vs (million contracts) 2022 2023 Growth % Growth % 2022 Q4 20
Slide 11: Good progress executing our growth strategy in 2024
Good progress executing our growth strategy in 2024 • New clearing memberships on Australian ASX and Singapore SGX exchanges secured in Q4 2023 • Building momentum in our APAC business, over $200m of client balances added to date • LCH swaps clearing membership secured in Q1 2024 • Physical oil brok
Slide 12: Financials
Financials Rob Irvin, CFO 12
Slide 13: Strong performance in 2023
Strong performance in 2023 ($m) 2022 2023 Δ %2 Revenue 711 1,245 534 75% • Strong growth driven by increased client activity, recent acquisitions and Compensation (439) (770) (331) 75% benefit of higher interest rates. Other expenses (150) (245) (95) 63% Adjusted Operating Profit1 122 230 108 89% •
Slide 14: Q1 2024 Update
Q1 2024 Update ($m) Q4 2023 Q1 2024 Δ %2 Revenue 326 366 40 12% • Strong start to the year across all four segments with good levels of client activity on Compensation (207) (230) (23) 11% our platform. Other expenses (66) (68) (2) 3% • Good progress executing our growth initiatives. Adjusted Operat
Slide 15: Client Balances Provide Exposure to Net Interest Income
Client Balances Provide Exposure to Net Interest Income A high proportion of client balances have a fixed interest payout, limiting impact from changes in interest rates Illustrative Incremental Profit Average Balances1 Marex Net Interest Income Due to Rate Sensitivity3 ($bn) c.60% of client balance
Slide 16: Balance Sheet broadly stable in Q1 2024
Balance Sheet broadly stable in Q1 2024 December December March • Cash and Liquid Assets increased during 2023 on account of business growth, ($m) 2022 2023 % change 2024 % change higher client assets and senior debt issuance. Cash and Liquid Assets 3,630 4,466 23% 4,315 (3%) Trade Receivables 4,685
Slide 17: Prudent Approach to Capital and Liquidity Underpins Investment Grade Ratings
Prudent Approach to Capital and Liquidity Underpins Investment Grade Ratings Liquidity Regulatory Capital vs. Capital Requirement ($m) Funding Sources headroom2 Total Capital $530m $739m $574m Ratio1 266% 229% 228% $2.8bn $2.6bn $538 $536 $485 $1.4bn $235 $235 $183 2022 2023 Q1 2024 2022 2023 Q1 202
Slide 18: Low-risk Business Model and Robust Risk Management Process
Low-risk Business Model and Robust Risk Management Process Robust and proactive risk management has limited any negative impacts from recent market volatility • Client driven business; do not take a directional view on prices or indices, limited overnight exposure. • Continue to manage credit risk w
Slide 19: Concluding Remarks
Concluding Remarks Ian Lowitt, CEO 19
Slide 20: Delivering Strong Progress In Our Key Metrics
Delivering Strong Progress In Our Key Metrics Revenue Adjusted Operating Profit1 Adjusted Operating Profit After Tax Attributable to Common Equity1 ($m) 1245 ($m) ($m) 230 163 Growth 711 542 122 93 366 69 80 68 49 2021 2022 2023 Q1 24 2021 2022 2023 Q1 24 2021 2022 2023 Q1 24 Adjusted Operating Prof
Slide 21: Scalable Platform Supports Strong Growth and Returns
Scalable Platform Supports Strong Growth and Returns Diversified and resilient business delivering strong performance during period of subdued volatility Strong start to 2024, $49m Adjusted Operating Profit after Tax Attributable to Common Equity in Q1 Scalable platform delivering improving margins
Slide 22: Appendix
Appendix 22
Slide 23: Profit Before Tax to Adjusted Operating Profit Reconciliation
Profit Before Tax to Adjusted Operating Profit Reconciliation ($m) 2023 2022 Q1 2024 Q4 2023 • Owner fees, which are a function of Profit before tax 196.5 121.6 58.9 28.8 profitability, relate to management services fees paid to private equity shareholders. Goodwill impairment charges1 10.7 53.9 - 1
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