year to march 2015 - final to print · earnings per share – basic 13.0p 15.7p (17) earnings per...

Full Year Results

Year to 31 March 201519 May 2015

Disclaimer

2

These materials do not constitute an offer to sell or the solicitation of an offer to purchase any security. These materials contain "forward-looking statements" as defined in the U.S. Private Securities Litigation Reform Act of 1995. These statements are based on current Company expectations and are subject to risks and uncertainties, which could cause actual results to differ materially. Such risks and uncertainties include, but are not limited to: fluctuations in interest rates and foreign currency exchange rates; market acceptance of new trading technologies; global and regional economic conditions and legislative, regulatory and political developments; and domestic and international competition in the Company's global markets. Additional information regarding these and other factors is available in the Company's reports available on request from the Company.

This document may not be distributed where to do so would be unlawful. This document may not be distributed in the UK except to persons falling within article 19 of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2001.

Michael Spencer

Group Chief Executive Officer

H2Profit before tax

Spend innew initiatives

Full yeardividend

8% 2% Unchanged

FY15 £143m £43m 22.0p

FY14 £132m £42m 22.0p

Encouraging end to a challenging year

4

David Ireland

Interim Group Finance Director

Trading results exclude acquisition & disposal costs and exceptional itemsFY14 restated for JV accounting change

1,378

1,276

20

45

77

1,200

1,250

1,300

1,350

1,400

FY14 Net closedbusinesses

H1continuing

H2continuing

FY15

139 132

86

143

-

30

60

90

120

150

180

H1 FY14 H2 FY14 H1 FY15 H2 FY15

Group income statement

FY15£m

FY14£m

% change

Revenue 1,276 1,378 (7)

Net operating expenses (1,024) (1,088) 6

Trading operating profit 252 290 (13)

Net finance charge (31) (27) (15)

Associates & JV’s 8 8 -

Trading profit before tax 229 271 (15)

Trading operating profit margin 20% 21% (1ppt)

Trading results

Revenue (vs prior year)

6

Half-on-half trading profit before tax

£m

£m

107 93

96 97

87 62

FY14 FY15Electronic Markets Post Trade Global Broking

565 523

291 292

169 149

150 132

119

108

84

72

FY14 FY15

Rates

FX & MM

Commodities

Emergingmarkets

Credit

Equities

ICAP’s business mix

Trading operating profit by business

Trading operating profit margin by business

7

£203m70%

£190m75%

Group revenues by product

£1,378m

£1,276m

(7%)

10%

8%

45%

43%

40%

36%

0% 10% 20% 30% 40% 50%

FY14

FY15

Electronic Markets Post Trade Global Broking

50

75

100

125

150

Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar

FY14 FY15

FY15: $98bn/dayFY14: $93bn/day

100

150

200

250


FY14 FY15

FY15: $163bn/dayFY14: $158bn/day

£124m£128m

£7m

£122m

£133m

£10m

EBS

BrokerTec

Other

Electronic Markets

Trading results Revenue mix

FY15£m

FY14£m

% change

Revenue 259 265 (2)

Constant currency 262 (1)




EBS Spot FX – Average Daily VolumesBrokerTec UST – Average Daily Volumes

FY14 FY15

8

£265m £259m

$bn/day $bn/day

70 69

41 39

54 67

47 53

-

50

100

150

200

250

300

FY14 FY15

Information Reset Traiana TriOptima

36%

64%

Post Trade Risk & Information

Trading results Revenue by business

Transaction vs subscription revenue

9

£212m

£228m8%

£m

36%

64%

Transaction

Subscription£212m £228m

FY14 FY15

FY15£m

FY14£m

% change

Revenue 228 212 8

Constant currency 207 10

Trading operating profit 97 96 1

Constant currency 93 4


Post Trade Risk & Information

10

TriOptima

Investment in new initiativesReset – volatility*

Traiana – FX vs Non-FX transactions

• TriOptima – continues to offer new services; triCalculate expected to launch 2015/16

• Traiana – further diversification; launch of Equity CCP Connect

• Euclid Opportunities – further investments anticipated in FY16

-

300

600

900

1,200

1,500

-

20

40

60

80

Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4

2013/14 2014/15

triReduce - compressions triResolve - active users

$trn No.

47

37 36

44

1

4 5

848

41 41

52

30

35

40

45

50

55

H1 2013/14 H2 2013/14 H1 2014/15 H2 2014/15

Av g transactions per month (millions) FX Non-FX

-

0.5%

1.0%

1.5%

2.0%

Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4

FY12 FY13 FY14 FY15

(160bps)

Jul 12: 1.615%

Mar 15: 0.018%

* 3m Euribor rate – quarterly average

FY15£m

FY14£m

% change

Revenue 789 901 (12)





901

789

2

45

69

750

800

850

900

950

FY14 Net closedbusinesses

H1continuing

H2continuing

FY15£m

Global Broking

Trading results

11

No. of brokers 1,571 2,064 (24)

Broker compensation as % of revenue 53% 57% 4ppt

£m

Revenue (vs prior year)

Half-on-half trading operating profit

55

32

18

45

-

20

40

60

H1 FY14 H2 FY14 H1 FY15 H2 FY15

484 396

417394

-

300

600

900

1,200

FY14 FY15H1 H2

6%

18%

12%

(5%)

1%

(5%)

(12%)

(8%)

(11%)

(20%) (15%) (10%) (5%) - 5%

Credit

FX & MM

Equities

Emergingmarkets

Commodities

Rates

Continuing Impact of closed businesses

Revenue by region

£63m

£103m

£132m

£148m

£74m

£269m

Global Broking

Product revenues – full year change H1/H2 revenue split

12

£m

£901m£789m

£437m

£362m

£102m

EMEA

Americas

Asia Pacific£396m

£297m

£96m

£901m £789m

FY14 FY15

(9%)

(3%)

(4%)

(6%)

(4%)

195

20

70

25

80

- 30 60 90 120 150 180

Totalcost

savings

FY15

FY14

FY13

FY12

Restructuring programme

Total annualised cost savings Headcount

13

£m

1,088

1,024

12

41

11

1,000

1,025

1,050

1,075

1,100

FY14 FY14incremental

savings

FY15net costsavings

Tradingadjustments& investment

FY15£m

31 March 2014

4,940 4,306

31 March 2015

Net operating expenses reconciliation Restructuring programme

36 24

- 15 30 45 60 75 90

Cost todeliver

Netsavings

Cash Non-cash

£70m

£60m

3,076 543

564

757 GlobalBroking

ElectronicMarkets

PostTrade

Infra-structure

2,336

607

619

744

£m

1316

96

152

2

-

10

20

30

40

FY14 FY15

22 23

10 9

59

52

-

10

20

30

40

50

60

FY14 FY15

Investment in major new initiatives

14

£43m spent on new product initiatives

Total spend Income statement

£29m

£25m

£43m£42m

£m £m

27

32 31

5

1-

3 3

20

25

30

35

40

FY14 Interest ontax PY

adjustment

FY14adjusted

Interestincome

Dividendincome

Eurobondinterestpayable

FY15 runrate

* Net of tax

Earnings – total operations

Headline Trading effective tax rate

Net finance costs

FY15£m

FY14£m

% change

Trading Profit before tax 229 271 (15)

Tax on trading profit (44) (59) 25

Trading Profit after tax 185 212 (13)

Exceptional items* (57) (64) (11)

Acquisition and disposal costs* (44) (48) (8)

Profit for the year – total operations 84 100 (16)

Earnings per share – basic 13.0p 15.7p (17)

Earnings per share – trading basic 28.7p 33.2p (14)

Full year dividend per share 22.0p 22.0p -

15

£m

22

19

2

-

1

3

1

15%

17%

19%

21%

23%

25%

27%

FY14ETR

Prioryearadj

Reductionin taxrates

Overseasrates &bases

Permanentdifference

FY15ETR

Free cash flow & borrowings

Impact of trading activities on free cash flow

16

£m

FY15 FY14£m £m

Term debt (549) (540)Maturing eurobond - (247)Gross debt (549) (787)

Trading cash 438 472 Central cash 43 226 Gross cash 481 698

Net debt (68) (89)

Restricted funds 43 39

309

196

21

6

5

14

66

57 1

48

141

-

90

180

270

360

TradingEBITDA

Workingcapital

Interest& tax

Capex Dividends fromassociates &investments

Other Trading freecash flow

Exceptionalitems

Dividends toICAP

shareholders

FX Movement innet debt

Historic cash conversion Cash and debt

81%103%

130%

75%

106%

0%

30%

60%

90%

120%

150%

FY11 FY12 FY13 FY14 FY15Cash conversion rate Cash conversion (2-year moving avg)

Gil Mandelzis

CEO EBS BrokerTec

Innovation

EBS Average Daily Volumes Comments

• 30 yards of new flow created over the past two years from EBS Direct and emerging market currencies

• Ruble volumes have declined due to geo-political events and market sanctions

• Volatility has remained relatively low in the FX markets due to risk aversion and regulation

18

-

30

60

90

120

150

Apr

May Jun

Jul

Aug

Sep Oct

Nov

Dec Jan

Feb

Mar

Apr

May Jun

Jul

Aug

Sep Oct

Nov

Dec Jan

Feb

Mar

FY14 FY15

G7 Pairs & Ruble New Currencies & EBS Direct

$bn/day

EBS Market Performance

EBS Market - Average Daily Volumes Comments

• Exchange-like, central limit order book (CLOB) platform sits at the heart of FX market ecology

• The importance of EBS Market as a reference price and an independent price discovery venue in Spot FX is unrivalled

• Stable and resilient platform that can withstand periods of extreme volatility and market stress

Cas

e st

udie

s

Bank of Japan announced quantitative easing programme 31 October 2014

• Unexpected by the market

• High degree of volatility in USDJPY

• EBS Market maintained normal, robust trading conditions

SNB announced removal of a minimum exchange rate 15 January 2015

• Resulted in exceptional market volatility

• Throughout this period, normal, robust trading conditions were maintained on EBS Market

19

-

30

60

90

120

150

Apr

May Jun

Jul

Aug

Sep

Oct

Nov

Dec Jan

Feb

Mar Apr

May Jun

Jul

Aug

Sep

Oct

Nov

Dec Jan

Feb

Mar

FY14 FY15

$bn/day

Currency Pair Expansion

CNH - ADV

NDF - ADV

Comments

• 18 months ago, 10% of the available CNH market was traded on EBS

• Now one of the top five currency pairs traded on EBS

• Over 60% of the available CNH market was traded on EBS in March 2015

• First to launch e-NDF products to market

• Expansion of our LatAm offering in 2015/16

• Market leaders in e-traded Asian NDFs

20

-

1

2

3

4

5


$bn/day

$bn/day

-

1

2

3

4

5

6

7


EBS Direct

• EBS Direct – disclosed bilateral trading platform that is complementary to EBS Market

• Since commercial launch 18 months ago:

- Significant growth – new clients and expansion of non-major currencies

- Expect non-linear progression

- Volumes have varied in recent months owing to technology upgrades and flow moving back to a central limit order book environment during periods of volatility

- Strong global sales pipeline

21

-

50

100

150

200

250

300

-

5

10

15

20

25

Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar

FY14 FY15

Major Non-Major LC Counterparties

EBS Direct – monthly volumes Comments

$bn/day

22

EBS currently offers the only fully electronic interbank fix execution solution which we continue to invest and develop in line with market requirements.

Live.

Non-disclosed, segmented, bilateral liquidity pool. Complementary platform to EBS Market and EBS Direct.

In beta.

Fully integrated view of EBS’s diverse products and services, new analytics and access to trusted liquidity through a single screen via HTML5. Q3 2015.

New instruments launching on EBS Direct. Will support Request for Stream (RFS), a new addition to EBS’s execution functionality. Q3 2015.

EBS product innovation and expansion

Combining companies

23

• Strong synergies across the companies – opportunity to leverage technology, resource and network to bring new products to market

• Full merger will occur gradually throughout this year

• We will provide our clients with unparalleled access to a diverse range of quality liquidity across products, trading styles and geographies, with the benefit of an established and far-reaching distribution network

• It is a meaningful and exciting change both internally and for the market

24

Growing our addressable market

• Strong foundation and momentum – the building blocks are now in place

• Focused on growing our new product lines and encouraging adoption in the market

• Strong product pipeline in FX, beginning planning stage in fixed income

• Exploring synergies across EBS and BrokerTec to optimise technology, resource and network

• Dedicated to transforming the foreign exchange and fixed income market, its liquidity and distribution structure

Summary

25

Appendix

(38)

(24)

(8)

(6)

(45)

(30)

(15)

-

Headlinetrading operating

profit change

TransactionalFX

TranslationalFX

Underlyingtrading operating

profit change

Exchange rate sensitivities

Impact of FX on FY15 trading operating profit

28

FX impact: (£14m)

Current hedging FY16

% Hedged Hedged rate

EUR 64% 1.2655

USD 62% 1.6124

£m

Key FY16 exposures

Transactional Translational Total

FX rate £m FX rate £m £m

EUR 1.31 (7) 1.38 (4) (11)

USD 1.56 9 1.48 15 24

ICAP plc2 Broadgate, London EC2M 7UR+44 (0) 20 7000 5000www.icap.com

Investor Relations:Alex Dee+44 (0) 20 7050 [email protected]

year to march 2015 - final to print · earnings per share – basic 13.0p 15.7p (17) earnings per...

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