Intercontinental Exchange Inc. · NYSE:ICE
Intercontinental Exchange — Sandler O'Neill Global Exchange & Brokerage Conference 2016
29 slides from Intercontinental Exchange's conference presentation, Jun 9, 2016
Slide 1: Sandler O'Neill Global Exchange & Brokerage Conference
Intercontinental Exchange (NYSE: ICE) Sandler O’Neill Global Exchange & Brokerage Conference June 2016
Slide 2: Forward-Looking Statement and Legends
FORWARD-LOOKING STATEMENT AND LEGENDS 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
Slide 3: ICE Performance Overview
ICE PERFORMANCE OVERVIEW
Slide 4: ICE: Best in Class Growth & Returns
ICE: BEST IN CLASS GROWTH & RETURNS 50% recurring revenue, highly transparent financial model Strong growth in operating cash flow and capital return Double-digit earnings growth target Disciplined investment, best in class ROIC 1Q16 REVENUES OF $1.2B 41% Data Services 9% Listings 41% Global
Slide 5: Global Markets, Clearing & Data Leader
GLOBAL MARKETS, CLEARING & DATA LEADER 11 GLOBAL EXCHANGES 6 CENTRAL CLEARING HOUSES GLOBAL DATA SERVICES Growth oriented products across Innovative clearing leader across Strong recurring revenue streams energy, agricultural and financial global commodity and financial based on mission-critic
Slide 6: Quantifiable Growth Drivers, Secular Trends
QUANTIFIABLE GROWTH DRIVERS, SECULAR TRENDS Proven integrator & organic growth driver with expense 24% Rev(2), 18% Adj EPS growth ~$700MM synergies 5-year CAGR Delivered by 2019 discipline Recurring Revenue Rising demand for market data +6% y/y(1) +9% y/y(1) and related analytics and 1Q16 total
Slide 7: Exchange & Clearing Segment
EXCHANGE & CLEARING SEGMENT
Slide 8: Leading Global Network of Exchanges & Clearinghouses
LEADING GLOBAL NETWORK OF EXCHANGES & CLEARINGHOUSES Offering key asset classes across 11 exchanges Home to key benchmarks around the world: Energy: home to 50% of crude & refined oil ADV Ags: benchmarks in sugar, coffee, cocoa and canola Rates: leading European short-term rates contracts
Slide 9: Valuable Benchmarks for Global Commodities
VALUABLE BENCHMARKS FOR GLOBAL COMMODITIES Commodity exchanges in US, Canada, UK, Europe and Singapore ▪ Key commodity benchmarks on ICE’s exchanges: Brent, WTI, Gasoil, Natural Gas, Sugar, Sugar, Coffee, Cocoa and Canola ▪ Demand for hedging, clearing and risk management amid price volatility and r
Slide 10: Innovation & Growth Across Financial Markets
INNOVATION & GROWTH ACROSS FINANCIAL MARKETS Credit Default Swaps (CDS) + Clearing US Equities & Global Equity Index Key European Interest Rates Created leading clearing solution for MSCI volumes have more than Most comprehensive offering across the CDS market post-crisis; doubled in 3 years Europea
Slide 11: Data & Listings Segment
DATA & LISTINGS SEGMENT ICE DATA SERVICES & NYSE LISTINGS
Slide 12: Building a Leading Global Provider: ICE Data Services
BUILDING A LEADING GLOBAL PROVIDER: ICE DATA SERVICES • ICE Data was launched in 2003 in recognition of the demand for customized market data across formats • ICE’s investment spans technology, intellectual property, R&D to innovate and develop new data products • ICE acquired Interactive Data Corpo
Slide 13: Diverse, Global & Proprietary Data Services
DIVERSE, GLOBAL & PROPRIETARY DATA SERVICES Pricing & Analytics +6% y/y(1) $477MM ▪ Independent evaluated pricing services, reference data and valuations (1) +6% y/y across fixed income markets $450MM ▪ Expanding index services and licensing regulated benchmarks Exchange Data +9% y/y(1) 50% 7% ▪ New
Slide 14: Award-Winning Services: 6-7% Data Revenue Growth in '16
AWARD-WINNING SERVICES: 6-7% DATA REV. GROWTH IN ’16 (1) Proprietary exchange data, pricing & reference data, analytics, desktop & connectivity across key asset classes – equities, interest rates and corporate bonds, commodities and credit markets. 13% 6% 24% 50% 7% ($MM) Quarterly Market Data Reven
Slide 15: Mission-Critical Data for a Growing Client Base
MISSION-CRITICAL DATA FOR A GROWING CLIENT BASE ILLUSTRATIVE USE CASES FRONT OFFICE MIDDLE OFFICE BACK OFFICE Asset Gathering & Client Trade Support Reference Data Management Investment Collateral Management Corporate Actions Investment Research Portfolio Record Keeping Reporting Execution Strategy
Slide 16: NYSE Group Listings Leadership
NYSE GROUP LISTINGS LEADERSHIP ▪ Solid recurring revenue comprising 9% of $137B consolidated net revenues in 1Q16 ▪ 2015 listing revenues +10% y/y; revenue primarily comprised of ~2,400 companies’ annual listings fees ▪ Other listings revenue drivers include IPOs and corporate actions, such as follo
Slide 17: Results-Driven Strategic Approach to Driving Growth & Returns
RESULTS-DRIVEN STRATEGIC APPROACH TO DRIVING GROWTH & RETURNS 17
Slide 18: 1Q16 Performance Highlights
1Q16 PERFORMANCE HIGHLIGHTS ▪ 1Q16 adj. EPS +20% to $3.68 as reported ▪ 1Q16 dividends of $102MM, +14% vs. 4Q15; leverage reduced to 2.5x(1) (2) $574MM $580MM (2) (2) 59% $3.68 (1) Adjusted debt-to-EBITDA reflects the ratio of adjusted debt to adjusted EBITDA for the trailing twelve months. This ref
Slide 19: Unmatched, Consistent Growth Through Market Cycles
UNMATCHED, CONSISTENT GROWTH THROUGH MARKET CYCLES Driving growth, investing to generate strong returns on capital & double digit adj. EPS target +8% y/y +16% y/y +26% y/y $1.3B Adjusted figures represent non-GAAP figures. Please refer to slides in the appendix for reconciliations to the relevant GA
Slide 20: Appendix
APPENDIX 20
Slide 21: 1Q16 Revenue & Expense Detail
1Q16 Revenue & Expense Detail ▪ Revenue +5% y/y(1) on a pro forma basis; growth across all business lines ▪ 6% y/y(1) decrease in adjusted expense; pro-forma margin +5 pts y/y to 59% ▪ Expense discipline and synergy acceleration due to execution and integration (in Millions) (in Millions) $45 $40 $6
Slide 22: Generating Cash & Reducing Leverage
Generating Cash & Reducing Leverage ▪ Op. cash flow of ~$600MM, +28% y/y driven by revenue growth and addition of Interactive Data ▪ Significant deleveraging; 2.5x adj. debt to EBITDA(1) in 1Q16 with repayment of >$500MM in debt ▪ Paid $102MM in dividends in 1Q16, +14% sequentially (1) $597MM $7.3B
Slide 23: ICE: A Growing Global Network
ICE: A GROWING GLOBAL NETWORK 1997 2001 2007 2008 2010 2011 2013 2014 Continental Power ICE expands reach ICE acquires ICE expands in Asia ICE expands into ICE acquires New ICE enters credit market ICE invests in Exchange (CPEX) in emissions markets NYSE Euronext to create with Singapore energy futu
Slide 24: Serving Global Markets
SERVING GLOBAL MARKETS MARKETS & CLEARING PRODUCTS MARKETS & CLEARING PRODUCTS FUTURES EXCHANGES CASH EXCHANGES ICE Futures U.S. New York Stock Exchange ICE Futures Europe NYSE Arca ICE Futures Canada NYSE MKT ICE Futures Singapore NYSE Amex Options ICE Endex NYSE Arca Options NYSE Bonds CENTRAL CLE
Slide 25: ICE Summary Balance Sheet
ICE Summary Balance Sheet In millions BALANCE SHEET 03/31/2016 12/31/2015 CHANGE Assets ▪ $493MM unrestricted cash and short- Unrestricted Cash & ST Inv $493 $656 $(163) term investments Other Current Assets 54,061 52,657 1,404 ▪ Total debt of $6.8B; Adj. Debt-to- Current Assets 54,554 53,313 1,241
Slide 26: Adjusted Net Income and EPS from Continuing Ops
Adjusted Net Income from Continuing Ops and EPS from Continuing Ops In millions (except per share amounts) 12 Month 12 Month 12 Month 3 Months 3 Months Ended Ended Ended Ended 3/31/16 Ended 3/31/15 12/31/15 12/31/14 12/31/13 Income from continuing operations $377 $323 $1,295 $1,005 $320 Add: NYSE an
Slide 27: Adjusted Operating Income, Operating Margin & Operating Expense Reconciliation
Adjusted Operating Income, Operating Margin & Operating Expense Reconciliation In millions 3 Months Ended 3 Months Ended 3/31/16 3/31/15 Total revenues, less transaction-based expenses $1,154 $850 Total operating expenses 570 388 Less: NYSE and Interactive Data transaction and integration costs 17 1
Slide 28: Adjusted EBITDA Reconciliation
Adjusted EBITDA Reconciliation In millions Trailing 12 Months Ended 3/31/16 Adjusted net income $1,456 Add: Income tax expense 403 Add: Income tax expense adjustment on Non-GAAP Items 157 Less: Other income, net(1) (14) Add: Interest expense(1) 115 Add: Depreciation and amortization(1) 244 Adjusted
Slide 29: Adjusted Effective Tax Rate Reconciliation
Adjusted Effective Tax Rate Reconciliation In millions 3 Months 3 Months Ended 3/31/16 Ended 3/31/15 Income before income tax expense $540 $441 Less: Income tax expense (163) (118) Net Income $377 $323 Effective tax rate 30% 27% Income before income tax expense $540 $441 Add: NYSE and Interactive Da
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