TP ICAP GROUP PLC TP ICAP GROUP PLC
Full Year Results
For the 12 months ended 31 December 2023
Nicolas Breteau
Group CEO
12 March 2024
Agenda
2023 Highlights | Nicolas Breteau, Group CEO |
2023 Financials | Robin Stewart, Group CFO |
Global Broking | Daniel Fields, CEO, Global Broking |
Energy & Commodities | Andrew Polydor, CEO, Energy & Commodities |
Liquidnet | Mark Govoni, CEO, Liquidnet |
Parameta Solutions | Eric Sinclair, CEO, Parameta Solutions |
Summary | Nicolas Breteau, Group CEO |
Q&A | All speakers |
TP ICAP GROUP PLC
Full Year Results
For the 12 months ended 31 December 2023
TP ICAP Group plc Preliminary Results for the 12 months ended 31 December 2023 | 3 |
12 March 2024
Performance highlights
Group performance: | Uplift in profitability: | ||
• | Revenue +3%1 | • | Group adjusted EBIT +8%1 to £300m |
• | Contribution +6%1 | • | Group adjusted EBIT margin 13.7% |
Global Broking productivity gains:
- Revenue/broker +5%1;
- Contribution/broker +12%1,2
Record E&C performance.
Momentum in Parameta Solutions and Liquidnet:
- E&C revenue: +18%1; adjusted EBIT +45%
- Liquidnet3 revenue: -1%; Cash Equities +13%1 in Q4 2023
- Parameta Solutions revenue: +8%1; H2 2023: +11%1
Dynamic capital management:
- Investing, reducing debt, dividends, capital returns
- Targeted £100m released
- £30m buyback completed
- Second £30m buyback announced today
Dividend increasing:
- Final DPS 10.0 pence, +27%
- Total 2023 dividend 14.8 pence, +19%
Focus on productivity, contribution, costs delivered profitability uplift
1 - In constant currency. 2 - Contribution per broker increased by 7% when excluding Russian provisions in 2022. 3 - Liquidnet Credit (both primary and secondary market trading protocols, including Dealer-to-Client ('D2C')) is now reported as part of Global Broking. FY 2023 disclosures are on this basis, with FY 2022 results restated, to ensure a like-for- like comparison year-on-year. £9m of Credit revenue in 2022 has been reclassified from Liquidnet to Global Broking.
TP ICAP Group plc Preliminary Results for the 12 months ended 31 December 2023 | 4 |
12 March 2024
Strategic highlights
THREE-PILLAR STRATEGY
TRANSFORMATION
Transformation through Fusion:
- Rollout on track, adoption increasing
E&C energy transition opportunities:
- New battery metals desk
- Data monetisation opportunities
Diversifying Liquidnet Equities:
- Operational leverage strengthened
- Market share up: US & EMEA
DIVERSIFICATION | DYNAMIC CAPITAL MANAGEMENT |
Growing Credit1:
• Consolidated Credit offering, led by Global Broking (GB)
- 7 institutions connected across secondary market protocols
Parameta Solutions:
- Legal entity consolidation2
- Data licencing/servicing agreements: GB and E&C
- Exploring options to unlock value for shareholders, including potential IPO of minority stake in Parameta
Strategic delivery driving performance
1 - Liquidnet Credit (both primary and secondary market trading protocols, including Dealer-to-Client ('D2C')) is now reported as part of Global Broking. FY 2023 disclosures are on this basis, with FY 2022 results restated, to ensure a like-for-like comparison year-on-year. £9m of Credit revenue in 2022 has been reclassified from Liquidnet to Global Broking. 2 - Subject to regulatory approvals
TP ICAP Group plc Preliminary Results for the 12 months ended 31 December 2023 | 5 |
12 March 2024
More diverse, top line growing, more cash generative
Future-proofing Global Broking:
- Improving productivity: revenue/broker up 23% since 2021
Growing top line:
- Group revenue up on average 5% a year1,2
Diversifying:
- Non-brokingrevenue more than doubled: 11%1 to 23%
- Parameta revenue up 40%1
Strong cash conversion:
- Cash conversion ratio4: 61% (2019), 124% in 2023 (2022: 156%)
Delivering revised 2023 targets
39.8% GB contribution margin3
Target: 39% to 40%
15.5% E&C adjusted EBIT margin
Target: 13% to 15%
124% Group cash conversion4
Target: 80%
1 - Since 2019. 2 - Excluding the Liquidnet acquisition, Group revenue grew on average by 2% a year since 2019. 3 - Liquidnet Credit (both primary and secondary market trading protocols, including Dealer-to-Client ('D2C')) is now reported as part of Global Broking. FY 2023 disclosures are on this basis, with FY 2022 results restated, to ensure a like-for- like comparison year-on-year. For comparison with 2023 CMD targets, Liquidnet Credit is excluded from Global Broking, to ensure a like-for-like basis. The contribution margin also excludes the 2023 reclassification of technology costs (£6m) from front office costs to management & support costs.
4 - Defined as: Free cash flow divided by adjusted earnings attributable to the equity holders of the parent.
TP ICAP Group plc Preliminary Results for the 12 months ended 31 December 2023 | 6 |
Robin Stewart
Group CFO
12 March 2024
2023 income statement
£m | 2023 | 20221 | Change | CC Change |
Revenue | 2,191 | 2,115 | 4% | 3% |
Adjusted EBITDA | 373 | 357 | 4% | 4% |
Adjusted EBITDA margin | 17.0% | 16.9% | 0.1%pts | 0.1%pts |
Adjusted EBIT | 300 | 275 | 9% | 8% |
Adjusted EBIT margin | 13.7% | 13.0% | 0.7%pts | 0.6%pts |
Net finance costs | (29) | (49) | (41%) | |
Adjusted profit before tax | 271 | 226 | 20% | |
Tax | (67) | (58) | 16% | |
Effective tax rate | 24.7% | 25.7% | (1.0%pts) | |
Share of JVs and associates less non-controlling interests | 23 | 26 | (12%) | |
Adjusted earnings | 227 | 194 | 17% | |
Total significant items (post-tax) | (153) | (91) | 68% | |
Reported earnings | 74 | 103 | (28%) | |
Basic average number of shares | 777.7m | 779.1m | (0.2%) | |
Adjusted basic EPS | 29.2p | 24.9p | 17% | |
Reported EPS | 9.5p | 13.2p | (28%) | |
Total dividend per share | 14.8p | 12.4p | 19% | |
1 - In reported currency;
TP ICAP Group plc Preliminary Results for the 12 months ended 31 December 2023 | 8 |
12 March 2024
Adjusted EBIT
£m
9 | ||||||||||||||
2 | 51 | (12) | ||||||||||||
(25) | 300 | |||||||||||||
275 | 277 | |||||||||||||
2022 | FX | 2022 CC | Contribution | Liquidnet | Management | FX: | 2023 |
in-year | & support costs1 | retranslation of | |||||
integration | cash/net | ||||||
savings | financial assets |
1 - Including other operating income and depreciation and amortisation.
TP ICAP Group plc Preliminary Results for the 12 months ended 31 December 2023 | 9 |
12 March 2024
Significant items
£m | 2023 | 2022 |
Restructuring & related costs | 26 | 41 |
Liquidnet property rationalisation (exiting remaining floor space in NYC) | 15 | 16 |
Liquidnet integration | 9 | 9 |
Group cost saving programme | - | 21 |
Business restructuring (legal entity simplification) | 2 | 2 |
Remeasurement of employee long term benefits | - | (7) |
Disposals, acquisitions and investment in new business | 49 | 46 |
Amortisation of intangible assets arising on consolidation1 | 44 | 45 |
Liquidnet acquisition related2 | 10 | (15) |
Foreign exchange losses/(gains) | (2) | 5 |
Adjustment to deferred consideration3 | (3) | 8 |
Strategic project costs | - | 3 |
Liquidnet impairment4 | 86 | 20 |
Goodwill | 47 | - |
Customer relationships | 39 | 20 |
Legal & regulatory matters5 | 11 | 5 |
EBIT | 172 | 112 |
Financing: Liquidnet interest expense on Vendor Loan Notes | 3 | 1 |
Profit before tax | 175 | 113 |
Tax relief | (27) | (22) |
Associate write down6 | 5 | - |
Reported earnings | 153 | 91 |
- £153m post-tax (2022: £91m)
- Increase primarily driven by:
- £76m Liquidnet impairment (net of £10m tax relief): challenging equity markets, increase in valuation discount rate
- c. 85% non-cash items:
- Including £44m of intangibles amortisation
- Excluding Liquidnet impairment / legal & reg. costs, total significant items of £78m (pre-tax)
1 - Related to acquisition of ICAP and Liquidnet. 2 - Liquidnet acquisition costs relating to settling commercial and regulatory matters arising from the Liquidnet acquisition. 3 - Adjustment to deferred consideration on the Liquidnet earnout in light of performance of the Liquidnet Equities franchise. 4 - £76m recognized as total non-cashpost-tax impairment to write down the carrying values of goodwill and acquired customer relationships in Liquidnet as a result of adverse changes in equity market conditions, and an increase in the discount rate that is applied to cashflow projections. 5 - Includes costs related to proceedings issued by the Frankfurt and Cologne Prosecutors, civil claims relating to "cum-ex", the defence of LIBOR actions and settlement, costs related to the Company bringing a warranty claim against NEX Group and costs related to ongoing regulatory investigations. 6 - Relates to the impairment of the Group's carrying value of an associate company - Corretaje e Informacion Monetaria Y de Divisas SA (CIMD).
TP ICAP Group plc Preliminary Results for the 12 months ended 31 December 2023 | 10 |
Attachments
- Original Link
- Original Document
- Permalink
Disclaimer
TP ICAP Group plc published this content on 12 March 2024 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 12 March 2024 07:27:09 UTC.
