accelerating tmx group s
play

Accelerating TMX Groups Transformation into a Leading Global Data - PowerPoint PPT Presentation

DRAFT DRAFT Accelerating TMX Groups Transformation into a Leading Global Data and Analytics Provider Acquisition of Trayport and Sale of Natural Gas Exchange Inc. and Shorcan Energy Brokers Inc. October 27, 2017 DRAFT DRAFT


  1. DRAFT DRAFT Accelerating TMX Group’s Transformation into a Leading Global Data and Analytics Provider Acquisition of Trayport and Sale of Natural Gas Exchange Inc. and Shorcan Energy Brokers Inc. October 27, 2017

  2. DRAFT DRAFT Transaction Summary A transformational transaction that furthers TMX’s strategy of being a leading global data and analytics provider Trayport Acquisition Overview Sale of NGX and Shorcan Energy  In conjunction with the acquisition of Trayport,  TMX has agreed to acquire Trayport for C$931 / TMX has agreed to sell Natural Gas Exchange Inc. £ 550 million from Intercontinental Exchange, Inc. (“NGX”) and Shorcan Energy Brokers Inc. (“ICE”) (“ Shorcan Energy”) to ICE – TMX’s Shorcan Fixed Income business is not – The consideration will consist of C$592 / £ 350 included in the transaction and remains a core million in cash and TMX’s NGX and Shorcan business Energy businesses, valued at C$339 / £ 200  Sale of NGX and Shorcan Energy was an million important component of the successful bid Pro Forma Impact The transaction is expected to be immediately accretive to adjusted EPS in 2018 (1) , before any synergies  Pro Forma 6/30/2017 LTM revenue of C$786 million and adjusted EBITDA of C$418 million (2)  ___________________________ Note: Financials presented in Canadian dollars. GBP converted to CAD at Bank of Canada spot rate of 1.6924 (as of October 25, 2017). 1. Adjusted EPS excludes the impact of transaction fees and amortization of purchased intangibles. 2. Pro Forma numbers exclude NGX and Shorcan Energy and include Trayport. Trayport revenue and adjusted EBITDA are compilations of 2 financial information provided to us for the Trayport entities. Trayport adjusted EBITDA excludes management charges from GFI Group (its previous owner), FX gains / losses, and dividend income / losses. The Trayport financial information is unaudited.

  3. DRAFT DRAFT Highly Complementary Businesses TMX and Trayport present a powerful combination of highly complementary offerings Market leader in European  gas, power and international Strong coal markets European Global leadership in resources and  Presence Primary source for European energy energy capital formation, trading,  market data with avenues to monetize and clearing capabilities Global Resource Franchise Highly defensible, powerful network  Growing European presence  effect create a highly effective platform Strong Solutions Expertise in energy markets  Offering Strong brand across Europe  Increasing focus on data  Deeply Embedded "High-tech" SaaS business model and analytics  Client Base Strong management team with sector Data Rich  expertise and track record of driving growth 3

  4. DRAFT DRAFT TMX Strategy Update The acquisition of Trayport will bolster TMX’s strategy and accelerate its shift towards recurring data and analytics revenue globally Capital Markets Derivatives and Energy Market Insights Markets Creation of new derivatives and Delivery of integrated data Facilitation of capital raising energy products and services sets and analytics Enhanced visibility within Primary source of aggregated Strong presence in European European energy markets to market data for the European energy, power and international attract European energy gas, power and international coal markets companies listings to TMX coal markets Pro Forma Impact (FY 2016) (1) Market Capital Trayport Insights Recurring Formation 13% 25% Capital Revenue: ~40% (2) 25% Formation Pro Forma 26% Market Recurring Energy Insights Revenue: ~50% (2) (3) Trading and 24% Clearing Equities and Equities and 8% Fixed Fixed Income Income Derivatives Derivatives Trading and Trading and Trading and Trading and Clearing Clearing Clearing Clearing 25% 23% 15% 16% ___________________________ 1. Excludes the divested and deconsolidated businesses (Razor Risk, Atrium and BOX). 2. Recurring revenue streams include substantially all of Market Insights, as well as sustaining listing fees, custody fees, transfer agency fees, 4 and other access / subscription based revenues. 3. Pro Forma revenue excludes NGX and Shorcan Energy and includes Trayport. Trayport revenue is a compilation of financial information provided to us for the Trayport entities. This financial information is unaudited.

  5. DRAFT DRAFT Trayport Overview Trayport is the primary connectivity network and data and analytics platform for the European wholesale energy markets Company Overview Business Highlights ● Trayport’s solutions provide price discovery, trade  High Growth, High Margin Business execution, post-trade transparency, and post-  Strong Network Effect trade straight through processing (“STP”)  Attractive End Markets ● Platform supports equal and transparent access  Scalable, SaaS-Based Model to exchange and OTC markets, non- discriminatory access to central clearing  Diverse Customer Base counterparties (“CCPs”) venues, and best practice  High Recurring Revenue (96%) (1) solutions for decision support, and risk  High Annual Retention Rate (97%) (1) management and trade management  Experienced Management Team ● Clients include energy commodities traders, exchanges, wholesale brokers, and CCPs across 2016 Revenue by Client Type 42 countries Brokers 24% – Trader clients, which comprise approximately two-thirds of Trayport’s revenue, include utilities, banks, trading houses, resource companies, and funds, among others Exchanges / ● Founded in 1993, Trayport has ~240 employees Clearinghouses 10% Traders and is headquartered in London, UK 66% 5 ___________________________ 1. For the year 2016.

  6. DRAFT DRAFT Trayport’s Central Position in the European Energy Ecosystem Creates a Powerful Network Effect Broker 260+ Trading Firms Trading Systems (27) Trading Houses ● Price Discovery ● Energy Trade Risk Management ● Order Management Funds Exchange Trading Systems / Connectivity (18) ● Market Access ● Post-Trade Analytics ● Post-Trade Data ● Risk Management ● Regulatory Banks Reporting CCP Connectivity (6) Utilities ● Single Point of Access for Trading Firms to: ● Single Point of Access for Trading Venues / CCPs to: – Multiple liquidity venues – Broadest universe of market participants – Aggregated view of virtually entire market 6

  7. DRAFT DRAFT TMX’s Acceleration of Trayport Growth There are many opportunities to capture revenue synergies that are not factored into the base case business plan Strategically invest to accelerate Trayport’s existing growth initiatives Enhance Trayport’s  Growth Initiatives – Significant opportunities in refined oil, base metals, and U.S. Power & Gas Accelerate and deploy a robust quantitative and trading-oriented analytics product  Analytics strategy to drive increased revenue per user Execute on new product ideas combining TMX’s expertise in North American energy New Product  Development markets with Trayport’s European leadership Global resource franchise can help Trayport enter new markets via capital formation  Synergies with Global Brings the entire "ecosystem" to develop a new commodities pre-trade platform  Resources Franchise TMX has a presence in new geographies for Trayport (e.g., Mexico, Chile, etc.) – As committed, long-term partners, TMX and Trayport can provide opportunities for new  Strategic Partnerships strategic partnerships for each other 7

  8. DRAFT DRAFT Trayport has a Strong Track Record of Growth Historical Revenue and Adjusted EBITDA (1) Revenue Adjusted EBITDA and Margin (C$ in millions) (C$ in millions) C$120 C$60 C$51 C$99 C$95 C$47 C$87 C$42 C$81 C$39 C$80 C$40 C$40 C$20 C$0 C$0 2014 2015 2016 LTM 2014 2015 2016 LTM 6/30/17 6/30/17 Adj. EBITDA 49% 48% 50% 52% margin Key Growth Drivers Users Growth ● Revenue growth driven by both a growing client base and 5,000 increasing average revenue per user (ARPU) – Add-on products drive ARPU within existing users 4,000 4,183 4,074 ● Demonstrated demand creation for data through 3,762 3,636 3,000 aggregation and analytics ● Migration of clients to SaaS 2,000 – 100% SaaS conversion expected by the end of 2017 1,000 ● Geographic expansion, particularly in other European 2014 2015 2016 2017Q2 markets (e.g., Italy, Germany) ___________________________ Note: GBP financials converted to CAD at Bank of Canada spot rate of 1.6924 (as of October 25, 2017). 1. Trayport revenue and adjusted EBITDA are compilations of financial information provided to us for the Trayport entities. Trayport adjusted 8 EBITDA excludes management charges from GFI Group (its previous owner), FX gains / losses, and dividend income / losses. The Trayport financial information is unaudited.

Recommend


More recommend