Bgc Group, Inc. · NASDAQ:BGC

Bgc — BGC Partners — Q4 2015 Earnings Presentation

40 slides from Bgc's earnings presentation, February 2016

  1. Slide 1: BGC Partners, Inc. Earnings Presentation Q4 2015

    1 BGC PARTNERS, INC. Earnings Presentation Q4 2015 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 4Q and FY 2015 Results Compared to 4Q and FY 2014

    SELECT 4Q and FY 2015 RESULTS COMPARED TO 4Q and FY 2014 4 Highlights of Consolidated Results (USD millions, except per share 4Q 2015 4Q 2014 Change (%) FY 2015 FY 2014 Change (%) data) Revenues for distributable earnings $692.0 $515.5 34.3% $2,641.3 $1,841.5 43.4% Pre-tax distributable earnings bef

  5. Slide 5: Global Revenue Breakdown

    GLOBAL REVENUE BREAKDOWN 5 FY15 APAC 8% APAC 4Q15 8% EMEA 28% EMEA Americas 30% 61% Americas 64%  Americas revenue up 22% in 4Q15 and 39% for FY15 Date  Europe, Middle East & Africa revenue up 68% in 4Q15 and 55% for FY15  Asia Pacific revenue up 46% in 4Q15 and 41% for FY15  Strengthening of th

  6. Slide 6: 4Q 2015 Segment Data (Distributable Earnings Basis)

    4Q 2015 SEGMENT DATA (DISTRIBUTABLE EARNINGS BASIS) 6 (In USD millions) 4Q 2015 REVENUES 4Q 2015 Revenues Pre-tax Earnings Pre-tax Margin Corporate Financial $394.3 $65.9 16.7% 1% Real Estate $288.3 $47.4 16.5% Corporate $9.3 ($21.7) NMF Real (In USD millions) Estate 42% 4Q 2014 Revenues Pre-tax Ear

  7. Slide 7: FY 2015 Segment Data (Distributable Earnings Basis)

    FY 2015 SEGMENT DATA (DISTRIBUTABLE EARNINGS BASIS) 7 (In USD millions) FY 2015 REVENUES FY 2015 Revenues Pre-tax Earnings Pre-tax Margin Corporate Financial $1,602.8 $285.4 17.8% 1% Real Estate $1,003.6 $139.4 13.9% Corporate $34.9 ($92.3) NMF Real Estate 38% (In USD millions) FY 2014 Revenues Pre-

  8. Slide 8: BGC's Q4 2015 Business Shows Strong Revenue Diversity

    BGC'S Q4 2015 BUSINESS SHOWS STRONG REVENUE DIVERSITY 8 Corporate 1% BGC’s Businesses at a Glance Real Estate Management and Other 7% Rates  BGC maintains a highly diverse 15% revenue base Real Estate Capital Markets Corporate  Wholesale Financial Services 11% 1% Brokerage revenues and F/X earning

  9. Slide 9: BGC's FY 2015 Business Shows Strong Revenue Diversity

    BGC'S FY 2015 BUSINESS SHOWS STRONG REVENUE DIVERSITY 9 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 10% Corporate  Wholesale Financial Services 1% Brokerage revenues and earnings ty

  10. Slide 10: BGC's Front Office Productivity Growth

    BGC’S FRONT OFFICE PRODUCTIVITY GROWTH 10 FRONT OFFICE HEADCOUNT FRONT OFFICE PRODUCTIVITY (USD Thousands) -1% 3,872 3,851 3,845 3,855 2,863 1,293 1,308 1,347 1,401 1,244 635 627 -7% 2,579 2,543 2,498 2,454 1,619 166 154 4Q 2014 1Q 2015 2Q 2015 3Q 2015 4Q 2015 Q4 2014 Q4 2015 FY 2014 FY 2015 Financi

  11. Slide 11: BGC's Strong Liquidity Growth & Position

    BGC’S STRONG LIQUIDITY GROWTH & POSITION 11 BGC’s Liquidity Growth & Composition (USD Thousands) Nasdaq Shares +$730M expected to be received over time $1,026,078 $825,504 $795,040 45.0 144.7 532.5 33.1 32.5 $420,412 $387,233 $379,800 32.4 4.6 1.2 32.0 11.1 16.3 716.9 648.3 461.2 364.1 369.7 388.4 D

  12. Slide 12: Strongly Capitalized; Investment Grade Credit Profile

    STRONGLY CAPITALIZED; INVESTMENT GRADE CREDIT PROFILE 12 ($ in '000s) BGC Partners, Inc. 12/31/2015 Cash and Cash Equivalents $461,207 Securities Owned 32,361 1 Marketable Securities (net) 532,510 Total Liquidity $1,026,078 BGC Partners, Inc. and Subsidiaries Issuer Maturity 12/31/2015 4.50% Convert

  13. Slide 13: Financial Services Overview

    13 Overview FINANCIAL SERVICES Date

  14. Slide 14: 4Q 2015 Financial Services Summary

    4Q 2015 FINANCIAL SERVICES SUMMARY 14 BGC Financial Services Segment Highlights Quarterly Drivers  Revenues up over 51%  Acquisitions of GFI and R.P. Martin  Pre-tax profit up 25%  FENICS1 (fully electronic) revenues and pre-  Increased activity across energy and tax profits up 112% and 66%, re

  15. Slide 15: 4Q15 Industry Volumes Mostly Down; Volatility Mostly Up

    4Q15 INDUSTRY VOLUMES MOSTLY DOWN; VOLATILITY MOSTLY UP 15 4Q15: Yr/Yr Change in Capital Markets Activity 4Q15: Yr/Yr Change in Average Daily Volatility (ADV excl. Eurex) -21% Thomson Reuters FX Spot -19% FX Futures (CME) -18% Interest Rate Futures (CME) U.S. Rates (MOVE) 3% -10% Eurex Equity Deriva

  16. Slide 16: Financial Services Revenue Breakout

    FINANCIAL SERVICES REVENUE BREAKOUT 16 FINANCIAL SERVICES REVENUE COMPOSITION % Change $394,345 +51% Trayport 15,834 NMF 29,962 +57% 47,008 +53% Market data, software $260,801 solutions and other1 59,226 +275% 19,081 Equity & other 30,690 Energy & commodities 63,863 +33% 15,785 Credit 47,940 71,592

  17. Slide 17: BGC's FENICS (Fully Electronic) Growth (Excluding Trayport)

    BGC’S FENICS (FULLY ELECTRONIC) GROWTH (EXCLUDING TRAYPORT) 17 FENICS (Fully Electronic) Brokerage Volumes FENICS (Fully Electronic) Revenues1 (USD Billions) (USD Millions) $224.3 20,477 15,483 $99.0 $59.1 4,909 4,300 $27.9 Q4 2014 Q4 2015 FY 2014 FY 2015 Q4 2014 Q4 2015 FY 2014 FY 2015 Date  4Q 20

  18. Slide 18: Strong Growth Seen in Fully Electronic Business

    STRONG GROWTH SEEN IN FULLY ELECTRONIC BUSINESS 18 4Q 2015 FY 2015 Voice / Hybrid Corporate / Voice / Hybrid Corporate / FENICS / Other Real Estate Other Total FENICS / Other Real Estate Other Total Revenue $59.1 $335.2 $288.3 $9.3 $692.0 $224.3 $1,378.5 $1,003.6 $34.9 $2,641.3 Pre-Tax DE $25.2 $40.

  19. Slide 19: BGC's Completion of GFI Merger

    BGC'S COMPLETION OF GFI MERGER 19  On January 12, 2016, BGC and GFI closed on a previously agreed upon merger.  BGC purchased the remaining outstanding shares of GFI common stock for a price equal to $6.10 per GFI share. Following the close of the Back-End Mergers, GFI shares no longer traded on e

  20. Slide 20: Volumes Generally Down; Volatility Mixed From a Year Ago

    VOLUMES GENERALLY DOWN; VOLATILITY MIXED FROM A YEAR AGO 20 1Q16TD Change in Capital Markets Activity 1Q16TD Change in Average Daily Volatility (1/1/2016 – 2/1/2016) (1/1/2016 – 2/1/2016) -17% U.S. Agency (Primary Dealer) -5% U.S. Corp. Bonds (Primary Dealer) -12% U.S. Rates (MOVE) -5% FX Futures (C

  21. Slide 21: Real Estate Overview

    Newmark Grubb Knight Frank Overview REAL ESTATE SST

  22. Slide 22: Business Overview: Real Estate Services

    BUSINESS OVERVIEW: REAL ESTATE SERVICES 22 NGKF Highlights 4Q 2015 Real Estate Segment Breakdown  4Q 2015 Real Estate Services revenues increased by approximately 17% as compared to last year Real estate Management  Real estate capital markets revenues increased capital markets services & 25% over

  23. Slide 23: NGKF Revenue and Earnings Continue Strong Growth

    NGKF REVENUE AND EARNINGS CONTINUE STRONG GROWTH 23 NGKF Revenue & Pre-tax Distributable Earnings (USD 000’s) 1,000,000 160,000 900,000 140,000 Pre-tax Distributable Earnings 800,000 120,000 700,000 Revenues 600,000 100,000 500,000 80,000 400,000 60,000 300,000 40,000 200,000 100,000 20,000 - - FY T

  24. Slide 24: Commercial Real Estate Remains an Attractive Investable Asset Class

    COMMERCIAL REAL ESTATE REMAINS AN ATTRACTIVE INVESTABLE ASSET CLASS 24 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

  25. Slide 25: Vacancy Rates Continue to Improve Signaling Strong Demand

    VACANCY RATES CONTINUE TO IMPROVE SIGNALING STRONG DEMAND FOR COMMERCIAL REAL ESTATE 25 20.0% U.S. Vacancy Rates by Asset Class 16.0% 12.0% 8.0% 4.0% 0.0% 4Q10 4Q11 4Q12 4Q13 4Q14 4Q15 Date Office Industrial Retail Unweighted Average Source: CoStar, REIS, and NGKF Research  Vacancy rates continue t

  26. Slide 26: Outlook

    26 BGC PARTNERS OUTLOOK Date

  27. Slide 27: Outlook Comparison

    OUTLOOK COMPARISON 27 Outlook Compared with a Year Ago Results  BGC anticipates distributable earnings revenues to increase by between approximately 13 percent and 21 percent and to be between $635 million to $680 million, compared with $563.9 million a year earlier.  The Company expects pre-tax d

  28. Slide 28: Appendix

    APPENDIX TMNT ANTI INT ss 1

  29. Slide 29: BGC Partners Compensation Ratio

    BGC PARTNERS COMPENSATION RATIO 29 $1,800 100% $1,641.4 $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% 62.1% 61.3% 62.0% 61.8% 59.2% $600 60% $400 50% $200 $428.9 $318.4 $0 40% 2012 2013 2014 2015 Q4 2014 Q4 2015 Compensation and Employee Benefits Compen

  30. Slide 30: Non-Compensation Expenses & Pre-Tax Margin

    NON-COMPENSATION EXPENSES & PRE-TAX MARGIN 30 50% 40% 30% 30.2% 28.0% 25.3% 29.6% 25.3% 20% 16.1% 10% 13.4% 12.6% 11.2% 10.3% 0% FY 2011 FY 2012 FY 2013 FY 2014 FY 2015 Pre-tax distributable earnings as % of Total Revenue Non-comp Expenses as a % of Total Revenue Date  FY 2015 non-comp expenses wer

  31. Slide 31: BGC's Economic Ownership as of December 31, 2015

    BGC’S ECONOMIC OWNERSHIP AS OF DECEMBER 31, 2015 31 Cantor 24% Public 45% 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 a

  32. Slide 32: 2015 NGKF Highlights

    2015 NGKF HIGHLIGHTS 32 NEW OFFICES:  Acquired Computerized Facility Integration, LLC (CFI) A premier real estate strategic consulting and systems integration firm that manages over three billion square feet globally for Fortune 500 companies, owner-occupiers, government agencies, healthcare and hi

  33. Slide 33: Average Exchange Rates

    AVERAGE EXCHANGE RATES 33 Q4 2015 Q4 2014 Jan 1 – Feb 8, 2016 Jan 1 – Feb 8, 2015 US Dollar 1 1 1 1 British Pound 1.517 1.583 1.444 1.518 Euro 1.096 1.249 1.091 1.160 Hong Kong Dollar 0.129 0.129 0.129 0.129 Singapore Dollar 0.711 0.771 0.701 0.747 Japanese Yen (Inverted) 121.420 114.470 118.300 118

  34. Slide 34: Distributable Earnings Defined

    DISTRIBUTABLE EARNINGS DEFINED 34 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 used by management to evaluate th

  35. Slide 35: Distributable Earnings Defined (Continued)

    DISTRIBUTABLE EARNINGS DEFINED (CONTINUED) 35  "Post-tax distributable earnings" are defined as pre-tax distributable earnings adjusted to assume that all pre-tax distributable earnings were taxed at the same effective rate.  "Post-tax distributable earnings per fully diluted share" are defined as

  36. Slide 36: Adjusted EBITDA Defined

    ADJUSTED EBITDA DEFINED 36 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 amortization;  Fixed asset de

  37. Slide 37: Reconciliation of GAAP Income to Adjusted EBITDA

    RECONCILIATION OF GAAP INCOME TO ADJUSTED EBITDA 37 BGC PARTNERS, INC. Reconciliation of GAAP Income (Loss) to Adjusted EBITDA (and Comparison to Pre-Tax Distributable Earnings) (in thousands) (unaudited) Q4 2015 Q4 2014 FY 2015 FY 2014 GAAP Income (loss) from continuing operations before income tax

  38. Slide 38: Reconciliation of Income Under GAAP to Distributable Earnings

    RECONCILIATION OF INCOME UNDER GAAP TO DISTRIBUTABLE EARNINGS 38 BGC PARTNERS, INC. RECONCILIATION OF GAAP INCOME (LOSS) TO DISTRIBUTABLE EARNINGS (in thousands, except per share data) (unaudited) Q4 2015 Q4 2014 FY 2015 FY 2014 GAAP income (loss) before income taxes $ 251,933 $ (59,286) $ 388,814 $

  39. Slide 39: Reconciliation of Revenues Under GAAP and Distributable Earnings

    RECONCILIATION OF REVENUES UNDER GAAP AND DISTRIBUTABLE EARNINGS 39 BGC PARTNERS, INC. RECONCILIATION OF REVENUES UNDER GAAP AND DISTRIBUTABLE EARNINGS (in thousands) (unaudited) Q4 2015 Q4 2014 FY 2015 FY 2014 GAAP Revenue $ 673,444 $ 489,283 $ 2,575,437 $ 1,787,490 Plus: Other income (losses), net

  40. Slide 40: bgcpartners.com

    40 bgcpartners.com Date

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