Bgc Group, Inc. · NASDAQ:BGC

Bgc — BGC Partners — Q1 2016 Earnings Presentation

36 slides from Bgc's earnings presentation, April 2016

  1. Slide 1: BGC Partners, Inc. Earnings Presentation Q1 2016

    1 BGC PARTNERS, INC. Earnings Presentation Q1 2016 Date NASDAQ: BGCP

  2. Slide 2: Disclaimer

    DISCLAIMER 2 Discussion of Forward-Looking Statements by BGC Partners Statements in this document regarding BGC's businesses that are not historical facts are "forward-looking statements" that involve risks and uncertainties. Except as required by law, BGC undertakes no obligation to release any rev

  3. Slide 3: General Overview

    BGC PARTNERS 3 GENERAL OVERVIEW Date

  4. Slide 4: Select 1Q 2016 vs. 1Q 2015 Consolidated Financial Results

    SELECT 1Q 2016 vs. 1Q 2015 Consolidated Financial Results 4 Highlights of Consolidated Results (USD millions, except per share data) 1Q 2016 1Q 2015 Change (%) Revenues for distributable earnings $660.1 $563.9 17.1% Pre-tax distributable earnings before non-controlling interest in subsidiaries and 9

  5. Slide 5: Global Revenue Breakdown

    GLOBAL REVENUE BREAKDOWN 5 Q1 1Q 2016 Global Revenues APAC 9% EMEA 32% Americas 59%  Americas revenue up 16% in 1Q 2016 Date  Europe, Middle East & Africa revenue up 18%  Asia Pacific revenue up 17%  Strengthening of the U.S. dollar reduced non-U.S. Financial Services revenues by approximately $

  6. Slide 6: 1Q 2016 Segment Data (Distributable Earnings Basis)

    1Q 2016 SEGMENT DATA (DISTRIBUTABLE EARNINGS BASIS) 6 (In USD millions) 1Q 2016 REVENUES 1Q 2016 Revenues Pre-tax Earnings Pre-tax Margin Corporate Financial $436.7 $102.9 23.6% 1% Real Estate $214.8 $17.4 8.1% Corporate $8.6 ($29.5) NMF Real Estate 33% (In USD millions) 1Q 2015 Revenues Pre-tax Ear

  7. Slide 7: BGC's Businesses at a Glance

    BGC'S 1Q 2016 BUSINESS STRONG REVENUE DIVERSITY 7 Corporate 1% BGC’s Businesses at a Glance Real Estate Management and Other 7%  BGC maintains a highly diverse Rates 18% revenue base Real Estate Capital Markets 9% Corporate  Wholesale Financial Services 1% Brokerage revenues and earnings typically

  8. Slide 8: BGC's Front Office Productivity Growth

    BGC’S FRONT OFFICE PRODUCTIVITY GROWTH 8 FRONT OFFICE HEADCOUNT FRONT OFFICE PRODUCTIVITY (USD Thousands) Yr/Yr change: Flat -3% 3,874 3,827 3,845 3,855 3,858 1,293 1,308 1,347 1,401 1,417 635 615 2,581 2,519 2,498 2,454 2,441 147 150 1Q 2015 2Q 2015 3Q 2015 4Q 2015 1Q 2016 Q1 2015 Q1 2016 FY 2014 F

  9. Slide 9: Financial Services Overview

    9 Overview FINANCIAL SERVICES Date

  10. Slide 10: 1Q 2016 Financial Services Summary

    1Q 2016 FINANCIAL SERVICES SUMMARY 10 BGC Financial Services Segment Highlights Quarterly Drivers  Revenues up 23%  Acquisition and successful integration of GFI  Pre-tax profit up over 31%  Increased activity across energy and commodities and equities and other;  Pre-tax margins expanded 160 b

  11. Slide 11: Financial Services Revenue Breakout by Asset Class

    FINANCIAL SERVICES REVENUE BREAKOUT BY ASSET CLASS 11 FINANCIAL SERVICES REVENUE COMPOSITION % Change Total Financial +23% $436,702 Services Other1 +9% 24,619 12,317 Data, software, and post-trade +126% $355,716 51,205 Equity & other +41% 22,519 5,451 36,215 67,497 Energy & commodities +130% 29,404

  12. Slide 12: 1Q16 Industry Volumes Mixed to Up; Volatility Mostly Up

    1Q16 INDUSTRY VOLUMES MIXED TO UP; VOLATILITY MOSTLY UP 12 1Q16: Yr/Yr Change in Capital Markets Activity 1Q16: Yr/Yr Change in Average Daily Volatility (ADV excl. Eurex and Interest Rate Derivatives) -11% Thomson Reuters FX Spot -11% U.S. Rates (MOVE) -9% Interest Rate Derivatives (notional outstan

  13. Slide 13: BGC's FENICS (Fully Electronic) Growth

    BGC’S FENICS (FULLY ELECTRONIC) GROWTH 13 FENICS (Fully Electronic) Revenues1 FENICS (Fully Electronic) Brokerage Volumes (USD Millions) (USD Billions) $252.1 19,622 18,010 $116.3 $68.6 5,643 $40.8 4,788 Q1 2015 Q1 2016 TTM 1Q15 TTM 1Q16 Q1 2015 Q1 2016 TTM 1Q15 TTM 1Q16 Date  1Q 2016 FENICS revenu

  14. Slide 14: Strong Growth Seen in Fully Electronic Business

    STRONG GROWTH SEEN IN FULLY ELECTRONIC BUSINESS 14 1Q 2016 TTM 1Q 2016 Voice / Hybrid Corporate / Voice / Hybrid Corporate / FENICS / Other Real Estate Other Total FENICS / Other Real Estate Other Total Revenue $68.6 $368.1 $214.8 $8.6 $660.1 $252.1 $1,431.6 $1,018.1 $35.7 $2,737.6 Pre-Tax DE $31.8

  15. Slide 15: Volumes Generally Down; Volatility Mixed From a Year Ago

    VOLUMES GENERALLY DOWN; VOLATILITY MIXED FROM A YEAR AGO 15 2Q16TD Change in Capital Markets Activity 2Q16TD Change in Average Daily Volatility (4/1/2016 – 4/222016) (4/1/2016 – 4/22/2016) -23% U.S. Agency (Primary Dealer) -15% Commodity Volatility Index -15% European Equities (BofAML) -1% FX Future

  16. Slide 16: Real Estate Overview

    Newmark Grubb Knight Frank Overview REAL ESTATE SST

  17. Slide 17: Business Overview: Real Estate Services

    BUSINESS OVERVIEW: REAL ESTATE SERVICES 17 NGKF Highlights 1Q 2016 Real Estate Segment Breakdown  1Q 2016 Real Estate Services revenues increased by over 7% compared to 1Q 2015 Real estate Management  Real estate capital markets revenues increased capital markets 29% services & other revenues over

  18. Slide 18: NGKF Revenue and Earnings Continue Strong Growth

    NGKF REVENUE AND EARNINGS CONTINUE STRONG GROWTH 18 NGKF Revenue & Pre-tax Distributable Earnings (USD 000’s) 160,000 1,000,000 140,000 Pre-tax Distributable Earnings 800,000 120,000 Revenues 100,000 600,000 80,000 400,000 60,000 40,000 200,000 20,000 - - FY TTM TTM TTM Date FY TTM TTM TTM FY TTM Re

  19. Slide 19: Commercial Real Estate Remains an Attractive Investable Asset Class

    COMMERCIAL REAL ESTATE REMAINS AN ATTRACTIVE INVESTABLE ASSET CLASS 19 U.S. Commercial RE Cap Rates vs. 10 Year U.S. Treasuries (All Commercial Property Types) 8.00% 7.00% 6.00% 5.00% 4.00% 3.00% 2.00% 1.00% 0.00% Date Spread Cap Rate 10yr UST Avg. Spread Source: Moody’s Real Capital Analytics  Spr

  20. Slide 20: Vacancy Rates Continue to Improve

    VACANCY RATES CONTINUE TO IMPROVE SIGNALING STRONG DEMAND FOR COMMERCIAL REAL ESTATE 20 20.0% U.S. Vacancy Rates by Asset Class 16.0% 12.0% 8.0% 4.0% 0.0% 1Q11 1Q12 1Q13 1Q14 1Q15 1Q16 Date Office Industrial Retail Unweighted Average Source: CoStar, REIS, and NGKF Research  Vacancy rates continue t

  21. Slide 21: Outlook

    21 BGC PARTNERS OUTLOOK Date

  22. Slide 22: Outlook Comparison

    OUTLOOK COMPARISON 22 Outlook Compared with a Year Ago Results  BGC anticipates second quarter of 2016 distributable earnings revenues of between $645 million and $685 million, compared with $684.6 million a year earlier.  BGC expects second quarter 2016 pre-tax distributable earnings before nonco

  23. Slide 23: Appendix

    APPENDIX TMNT ANTI INT ss 1

  24. Slide 24: BGC Partners Compensation Ratio

    BGC PARTNERS COMPENSATION RATIO 24 $1,800 100% $1,638.3 $1,600 90% $1,400 $1,128.5 $1,091.2 $1,200 80% $1,036.8 (USD millions) $1,000 70% $800 61.7% 62.0% 61.3% 61.4% 61.7% 59.2% $600 60% $400 50% $200 $347.9 $405.5 $0 40% 2012 2013 2014 2015 Q1 2015 Q1 2016 Compensation and Employee Benefits Compen

  25. Slide 25: Non-Compensation Expenses & Pre-Tax Margin

    NON-COMPENSATION EXPENSES & PRE-TAX MARGIN 25 50% 40% 30% 30.2% 28.0% 25.3% 29.6% 25.4% 24.8% 20% 16.1% 10% 13.4% 12.6% 13.8% 11.2% 10.3% 0% FY 2011 FY 2012 FY 2013 FY 2014 FY 2015 Q1 2016 Pre-tax distributable earnings as % of Total Revenue Non-comp Expenses as a % of Total Revenue Date  1Q 2016 n

  26. Slide 26: BGC's Economic Ownership as of March 31, 2016

    BGC’S ECONOMIC OWNERSHIP AS OF March 31, 2016 26 Cantor 21% Public 48% Employees, Executives, & Directors 31% Date Note: Employees, Executives, and Directors ownership figure attributes all units (PSUs, FPUs, RSUs, etc.) and distribution rights to founding partners & employees and also includes all

  27. Slide 27: Strongly Capitalized; Investment Grade Credit Profile

    STRONGLY CAPITALIZED; INVESTMENT GRADE CREDIT PROFILE 27 ($ in '000s) BGC Partners, Inc. 3/31/2016 Cash and Cash Equivalents $456,116 Securities Owned 32,767 Marketable Securities (net) 191,697 Total Liquidity $680,580 BGC Partners, Inc. and Subsidiaries Issuer Maturity 3/31/2016 4.50% Convertible N

  28. Slide 28: Average Exchange Rates

    AVERAGE EXCHANGE RATES 28 Q1 2016 Q1 2015 Apr 1 – Apr 22, 2016 Apr 1 – Apr 22, 2015 US Dollar 1 1 1 1 British Pound 1.433 1.516 1.424 1.484 Euro 1.104 1.128 1.134 1.075 Hong Kong Dollar 0.129 0.129 0.129 0.129 Singapore Dollar 0.713 0.737 0.741 0.737 Japanese Yen 115.310 119.180 109.700 119.690 Sour

  29. Slide 29: Distributable Earnings Defined

    DISTRIBUTABLE EARNINGS DEFINED 29 Distributable Earnings Defined BGC Partners uses non-GAAP financial measures including "revenues for distributable earnings," "pre-tax distributable earnings" and "post-tax distributable earnings," which are supplemental measures of operating performance that are us

  30. Slide 30: Distributable Earnings Defined (Continued)

    DISTRIBUTABLE EARNINGS DEFINED (CONTINUED) 30 Investors and analysts should note that, due to the large gain recorded with respect to the Trayport sale in December, 2015, and the closing of the back-end merger with GFI in January, 2016, non-cash charges related to the amortization of intangibles wit

  31. Slide 31: Adjusted EBITDA Defined

    ADJUSTED EBITDA DEFINED 31 Adjusted EBITDA Defined BGC also provides an additional non-GAAP financial measure, “adjusted EBITDA,” which it defines as GAAP income from operations before income taxes, adjusted to add back interest expense as well as the following non-cash items:  Employee loan amorti

  32. Slide 32: Reconciliation of GAAP Income to Adjusted EBITDA

    RECONCILIATION OF GAAP INCOME TO ADJUSTED EBITDA 32 BGC PARTNERS, INC. Reconciliation of GAAP Income (Loss) to Adjusted EBITDA (and Comparison to Pre-Tax Distributable Earnings) (in thousands) (unaudited) Q1 2016 Q1 2015 GAAP Income (loss) from continuing operations before income taxes (1) $ 21,131

  33. Slide 33: Reconciliation of Income Under GAAP to Distributable Earnings

    RECONCILIATION OF INCOME UNDER GAAP TO DISTRIBUTABLE EARNINGS 33 BGC PARTNERS, INC. RECONCILIATION OF GAAP INCOME (LOSS) TO DISTRIBUTABLE EARNINGS (in thousands, except per share data) (unaudited) Q1 2016 Q1 2015 GAAP income (loss) before income taxes $ 21,131 $ 36,270 Pre-tax adjustments: Non-cash

  34. Slide 34: Reconciliation of Revenues Under GAAP and Distributable Earnings

    RECONCILIATION OF REVENUES UNDER GAAP AND DISTRIBUTABLE EARNINGS 34 BGC PARTNERS, INC. RECONCILIATION OF REVENUES UNDER GAAP AND DISTRIBUTABLE EARNINGS (in thousands) (unaudited) Q1 2016 Q1 2015 GAAP Revenue $ 639,036 $ 547,567 Plus: Other income (losses), net (2,359) 31,788 Adjusted GAAP 636,677 57

  35. Slide 35: Liquidity Analysis

    LIQUIDITY ANALYSIS 35 BGC PARTNERS, INC. LIQUIDITY ANALYSIS (in thousands) (unaudited) March 31, 2016 December 31, 2015 Cash and cash equivalents $ 456,116 $ 461,207 Securities owned 32,767 32,361 Marketable securities (1) (2) 191,697 532,510 Total $ 680,580 $ 1,026,078 (1) As of December 31, 2015,

  36. Slide 36: bgcpartners.com

    36 bgcpartners.com Date

BGC Partners — Q1 2016 Earnings Presentation on 6ix