Cme Group Inc. · NASDAQ:CME
Cme — Q1 2018 Earnings Presentation
23 slides from Cme's earnings presentation, Apr 26, 2018
Slide 1: CME Group 1Q 2018 Earnings Q&A Conference Call
CME Group 1Q 2018 Earnings Q&A Conference Call APPENDIX SLIDES As a replacement to conference call prepared remarks, please see the CME Group 1Q 2018 Quarterly Earnings Commentary document posted with all other CME Group 1Q 2018 earnings documents at the following link: April 26, 2018 http://investo
Slide 2: Forward Looking Statements
Forward Looking Statements Statements in this presentation that are not historical facts are forward-looking statements. These statements are not guarantees of future performance and involve risks, uncertainties and assumptions that are difficult to predict. Therefore, actual outcomes and results ma
Slide 3: Long-Term Growth in a Variety of Environments
Long-Term Growth in a Variety of Environments (round turns, in millions) Pro Forma 24 Average Daily Volume 22.2M 21 18 15 12 CAGR 9 1972 – 2017 13% 6 3 0 Note: Volumes are all pro forma as if CME owned NYMEX and CBOT over the illustrated period and 2018TD ADV is through 3/29/18 3 © 2018 CME Group. A
Slide 4: Strong ADV Growth and Healthy Open Interest
Double Digit Strong ADV Growth and Healthy Open Interest Growth Across all 6 Product Lines ADV Year Over Year Growth Rates 2018TD vs. 2017TD Annual ADV Millions 24 Product Line Total ADV Options ADV 22.2M Interest Rates 29% 29% 21 Equities 47% 51% 18 Energy 10% 6% 15 12% CAGR Ag Commodities 27% 21%
Slide 5: Open Interest Reaching All-Time Highs
Open Interest Reaching All-Time Highs 140 Reached all-time high of 138M Open Interest at Month End (in millions) contracts on March 15, 2018 130 Prior peak of 129.1M contracts on June 14, 2017 120 2015 110 2016 2017 2018 100 90 80 5 Data through March 29, 2018 © 2018 CME Group. All rights reserved.
Slide 6: Unique Assets Provide Competitive Advantages
Unique Assets Provide Competitive Advantages Q1 2018 Revenue Mix Balanced portfolio of diverse, benchmark Interest Rates products 31% Energy World-class 17% clearing, risk management Agricultural expertise Equities Commodities 18% 11% Foreign Market Exchange Data & Info Metals 5% Svcs 5% Other 9% 5%
Slide 7: Volatility Through 1Q 2018
Volatility Through 1Q 2018 35.00% S&P 500 Volatility 120.00% Eurodollars 30.00% 100.00% 25.00% 80.00% 20.00% 60.00% 15.00% 40.00% 10.00% 20.00% 5.00% 0.00% 0.00% Eurodollars (3rd Month) S&P 500 VIX Index 16% Foreign Exchange 12.00% Treasuries 14% 10.00% 12% 8.00% 10% 8% 6.00% 6% 4.00% 4% 2.00% 2% 0%
Slide 8: Volatility Through 1Q 2018
Volatility Through 1Q 2018 70.00% Energy Metals 90.00% 80.00% 60.00% 70.00% 50.00% 60.00% 40.00% 50.00% 30.00% 40.00% 30.00% 20.00% 20.00% 10.00% 10.00% 0.00% 0.00% WTI Crude Oil Natural Gas Gold Silver 50.00% Ag Commodities 45.00% 40.00% 35.00% 30.00% 25.00% 20.00% 15.00% 10.00% 5.00% 0.00% Corn So
Slide 9: Investments in Globalization Are Paying Off
Investments in Globalization Are Paying Off Electronic ADV based on origin of trade, in 000s Europe Asia 3,747 923 Data through March 29, 2018 ADV by trading hours, U.S. Asian European in 000s 18,000 7am – 4pm CT 700 4pm – 11pm CT 2,100 11pm – 7am CT 600 500 • During 1Q18, 84% 12,000 1,400 400 growt
Slide 10: Investments in Globalization Are Paying Off
Investments in Globalization Are Paying Off Non-U.S. Electronic ADV Proportion of Total Electronic ADV 50% 41% 39% 40% 30% 24% 24% 20% 20% 18% 10% 0% Interest Rates Equities FX Energy Agricultural Metals 1Q17 1Q18 10 © 2018 CME Group. All rights reserved.
Slide 11: Options Business – Continued Momentum
Options Business – Continued Momentum Percentage ADV Electronic Annual Options 63% 5,500,000 70% ADV by Venue YTD 5,000,000 Reached all-time high daily volume of 60% 9.3M contracts on February 6, 2018 4,500,000 4,000,000 50% 3,500,000 40% 3,000,000 2,500,000 30% 2,000,000 1,500,000 20% 1,000,000 10%
Slide 12: Committed to Returning Cash to Shareholders
Committed to Returning Cash to Shareholders $ (millions) $2,000 • Regular quarterly dividend for Regular Quarterly Dividend 1Q18 was declared at $0.70 $1,800 per share, which was an Annual Variable Dividend increase of 6 percent from the (paid either end of year it reflects or first $1,600 quarter o
Slide 13: CME Group 1Q 2018 Adjusted Financial Results
CME Group 1Q 2018 Adjusted Financial Results1 • Revenue of $1,109M, up 19% • Operating Expense of $323M, up 7% • Operating Expense, excluding Licensing Fees, of $273M, up 2% • Operating Income of $786M, up 25% • Operating Margin of 70.9 percent • Net Income of $634M, up 52% • Diluted EPS of $1.86, u
Slide 14: Notes / Guidance
Notes / Guidance • Maintaining original 2018 guidance • Adjusted operating expense excluding license fees of between $1.100 billion and $1.105 billion • Capital expenditures, net of leasehold improvement allowances, expected to be between $90 million and $100 million • Adjusted effective tax rate ex
Slide 15: 1Q18 Reconciliation of GAAP to non-GAAP Measures
1Q18 Reconciliation of GAAP to non-GAAP Measures 15 © 2018 CME Group. All rights reserved.
Slide 16: GAAP Income Statement Trend Excluding Adjustments
GAAP Income Statement Trend Excluding Deferred Compensation, FX, Amortization of Intangibles and Other Historically Noted Adjustments1 CME Group Inc. and Subsidiaries GAAP Income Statement Trend Excl Def Comp, FX, Amortization of intangibles and other historically noted adjustments1 (in millions, ex
Slide 17: Interest Rate Futures – Large Open Interest Holders
Interest Rate Futures – Large Open Interest Holders CME Group Interest Rate Futures Aggregate Number of Large Open Interest Holders* Source: CFTC 2,500 Change over Selected Periods Last 4 Weeks Last 13 Weeks Last 52 Weeks 2,056 2,000 +0.3% +7.8% +14.1% 1,500 1,000 YTD up 8% Peak 2,086 on February 20
Slide 18: FX Futures – Large Open Interest Holders
FX Futures – Large Open Interest Holders CME Group Foreign Exchange Futures Aggregate Number of Large Open Interest Holders* Source: CFTC 1,400 1,200 Change over Selected Periods Last 4 Weeks Last 13 Weeks Last 52 Weeks NC +1.2% +4.9% 1,079 1,000 800 600 YTD up 6% 400 Peak 1,144 on January 30, 2018
Slide 19: Equity Futures – Large Open Interest Holders
Equity Futures – Large Open Interest Holders CME Group Equity Index Futures Aggregate Number of Large Open Interest Holders* Source: CFTC 2,000 1,800 Peak 1,758 reached January 30, 2018 1,600 1,578 E-mini 1,400 Russell 2000 now 1,200 included 1,000 800 600 400 200 0 2006 2007 2008 2009 2010 2011 201
Slide 20: Energy Futures – Large Open Interest Holders
Energy Futures – Large Open Interest Holders CME Group Energy Futures Aggregate Number of Large Open Interest Holders* Source: CFTC 1,325 1,250 Peak 1,309 on January 23, 2018 1,239 1,175 1,100 1,025 950 875 800 Change over Selected Periods Last 4 Weeks Last 13 Weeks Last 52 Weeks +1.6% -0.1% +0.0% 7
Slide 21: Metals Futures – Large Open Interest Holders
Metals Futures – Large Open Interest Holders CME Group Metals Futures Aggregate Number of Large Open Interest Holders* Source: CFTC 1,400 Peak 1,374 on August 29, 2017 1,300 1,276 1,200 1,100 1,000 900 800 700 Change over Selected Periods Last 4 Weeks Last 13 Weeks Last 52 Weeks +1.1% -4.3% +2.8% 60
Slide 22: Agricultural Futures – Large Open Interest Holders
Agricultural Futures – Large Open Interest Holders CME Group Agricultural Futures Aggregate Number of Large Open Interest Holders* Source: CFTC 3,750 3,647 YTD up 10% 3,500 At all-time high on April 3, 2018 3,250 3,000 2,750 2,500 Change over Selected Periods Last 4 Weeks Last 13 Weeks Last 52 Weeks
Slide 23: CME Group – Compelling Investment
CME Group – Compelling Investment Only Pure Play Derivatives Positioned for Growth Several Potential Exchange Tailwinds • Unmatched product diversity • Focused on customer • Fed Balance Sheet reduction and 24 hour liquidity challenges / working collaboratively • FASB Hedge Accounting Rules • Leader