TP ICAP Group H2 2024 Earnings Report

TP ICAP Group EPS Results

• Actual EPS: GBX 31.80
• Consensus EPS: N/A
• Beat/Miss: N/A
• One Year Ago EPS: N/A

TP ICAP Group Revenue Results

• Actual Revenue: N/A
• Expected Revenue: N/A
• Beat/Miss: N/A
• YoY Revenue Growth: N/A

TP ICAP Group Announcement Details

• Quarter: H2 2024
• Date: 3/12/2025
• Time: Before Market Opens
• Conference Call Date: Tuesday, March 11, 2025
• Conference Call Time: 5:00AM ET

TP ICAP connects buyers and sellers in global financial, energy and commodities markets. We are the world’s leading wholesale market intermediary, with a portfolio of businesses that provide broking services, data & analytics and market intelligence, trusted by clients around the world. We operate from more than 60 offices across 28 countries, supporting brokers with award winning and market-leading technology. Further information on the company and its activities is available on the Group's website: www.tpicap.com

TP ICAP Group H2 2024 Earnings Call Transcript

Key Takeaways

• The group delivered record financial results with revenue up 5% to $2.3 bn, adjusted EBIT up 12% to $324 m, margin improving to 14.4%, a 13% final dividend increase, and a strong 144% cash conversion ratio.
• A major strategic collaboration with Amazon Web Services will accelerate the development of the Fusion digital platform, nearly doubling IT workload on the cloud to speed new product launches.
• The newly launched efficiency program is on track to generate at least £50 m of annualized savings by 2027, having already delivered £15 m in 2024.
• Diversification continues to pay off as non-broking divisions Liquidnet and Parameter Solutions now contribute 42% of group adjusted EBIT, up from 29% last year.
• 2025 guidance assumes around $115 m of significant items—primarily efficiency-program and strategic costs—which may damp near-term adjusted earnings.

Presentation

[Nicolas Breteau, Group CEO at TP ICAP]

Good morning, everyone, and thank you for joining us. This is our agenda today. I will start with an overview. Robin will take you through our financial performance, and the heads of our four divisions will report on their businesses. I will wrap up before we take questions. Let me start with the headlines, where movements are in constant currency. Group revenue increased 5% to GBP 2.3 billion. Group contribution was also up 5% to GBP 867 million. We managed our fixed costs well. Group management and support costs were up just 1% despite inflation and investment. EBIT was up 12% to GBP 324 million, a record level, with the margin growing from 13.5%-14.4%. Our cash conversion ratio remains strong at 144% and has averaged 141% over the last three years. The Board is recommending a final dividend of GBP 0.113, up 13% on last year.

[Nicolas Breteau, Group CEO at TP ICAP]

All our divisions traded well, underlining the power of our diversified business and the delivery of our strategy. Let me turn now to our three strategic priorities, and I'll start with transformation. Technology gives us a key strategic advantage, and our market-leading digital platform, Fusion, is at the heart of our strategy. It's transforming the value we add for our broking clients by providing an outstanding user experience, access to our deep liquidity, together with automated trade and settlement solutions. Fusion is progressing well, but we believe we could accelerate its development. Last December, we announced a major strategic collaboration with the world's leading cloud provider, Amazon Web Services. With AWS, we will be able to increase our speed to market for new products and nearly double our IT workload on the cloud, making us faster and more efficient. Dan will tell you more about this later.

[Nicolas Breteau, Group CEO at TP ICAP]

The major efficiency program we announced at the half year is now underway. This program will future-proof the group, make it more agile, and generate at least GBP 15 million of annualized savings by 2027. Robin will cover this in more detail. Our second strategic priority is diversification. We're working to diversify our revenues by business, asset class, geography, and product to give us greater resilience across a range of market environments with less earnings volatility. In 2024, our two non-broking businesses, Parameta Solutions and Liquidnet, contributed 42% of group adjusted EBIT, up from 29% in 2023. This was driven by strong performances from both businesses. Liquidnet's contribution has been transformed, delivering a near six-fold increase in adjusted EBIT to GBP 53 million and making significant market share gains. Liquidnet is diversifying revenue both within its equities business and across other asset classes.

[Nicolas Breteau, Group CEO at TP ICAP]

Parameta Solutions brings another form of diversification as it's almost entirely subscription-based, with retention rates of 98%, making income more predictable. We increasingly serve the buy side as well as the sell side through Energy & Commodities, Liquidnet, and Parameta. We continue to strengthen our business through diversification. Our third strategic priority is dynamic capital management, giving us the flexibility to be able to invest in the business, pay down debt, or return capital to shareholders. We continue investing to improve our business, for example, in broker recruitment, Fusion, or Parameta Solutions. In 2024, we paid down about GBP 100 million of debt and other financing obligations, and we are returning capital to shareholders through both dividends and buybacks. The total dividend for the year is GBP 0.061, an increase of 9% on 2023. Our total dividend per share is up 30% in two years.

[Nicolas Breteau, Group CEO at TP ICAP]

We have also announced our fourth buyback today of GBP 30 million. This brings total buybacks announced over the last 18 months to GBP 120 million. Moving now to our plans for Parameta Solutions. Maximizing the value of our strategic assets is a key priority, and as you know, we have been assessing a range of strategic options for Parameta. These include maintaining outright ownership and/or selling a majority or minority stake, either via trade sale or an IPO. As a result of our review, we have decided that TP ICAP should focus on listing a minority stake in the United States that remains the long-term majority owner of Parameta Solutions. In the event of listing a minority stake, TP ICAP shareholders would benefit from establishing a baseline value for Parameta. We know from extensive engagement with shareholders that it is important for them.

[Nicolas Breteau, Group CEO at TP ICAP]

A minority listing would also mean that the majority of any potential future upside would indirectly accrue to our shareholders. A potential listing could also benefit Parameta in several ways. First, it could enable the business to invest to grow as a standalone entity by accessing resources beyond those available to the group. Second, as a standalone entity, it may be able to access more data from other OTC market participants. Finally, greater visibility in the marketplace for Parameta will enhance its ability to attract and retain high-caliber talent. The listing could occur as early as the second quarter of 2025, though there is, of course, no certainty at this stage that we will proceed. Should we proceed with the listing of Parameta, our intention would be to return most of the proceeds to TP ICAP shareholders. Moving next to our medium-term outlook for cash.

[Nicolas Breteau, Group CEO at TP ICAP]

As you know, we've been working hard to release cash to give us greater flexibility and optionality. At the half year, we announced a new program that will release at least GBP 50 million of surplus cash from further legal entity consolidation. Over the medium term, we expect to generate substantial cash organically in addition to these GBP 50 million. We will achieve this by prioritizing profitable growth, greater efficiencies, and balance sheet optimization. We expect to provide an update on surplus cash and the amount we can return to our shareholders over the medium term at our interim results in August. With that, I'll hand over to Robin to take you through our financial performance in more detail.

[Robin Stewart, Executive Director and CFO at TP ICAP]

Thank you, Nico, and good morning. I'll start with the income statement, where, as usual, my comparisons are in constant currency up to adjusted EBIT. Total group revenue increased 5% to GBP 2.3 billion. Adjusted EBITDA was up 11% at just under GBP 400 million. Adjusted EBIT grew 12% to GBP 324 million, and margin increased to 14.4%. Net finance costs of GBP 21 million were down 25%, below our guidance of GBP 25 million. This is due to higher interest income as we continue to actively manage the yield on our cash. The effective tax rate on adjusted profit was 26.4%, slightly below guidance of 28% as a result of favorable one-off prior year adjustments. Taken together, this resulted in adjusted earnings before significant items of GBP 241 million, up 6%. Adjusted basic earnings per share grew 9% to GBP 0.318.

[Robin Stewart, Executive Director and CFO at TP ICAP]

As Nico said earlier, we plan to pay a final dividend of GBP 0.113, taking the total dividend to GBP 0.161, up 9% on the prior year and in line with our policy. Let's turn now to the year-on-year movements in our earnings before interest and tax. Adjusted EBIT was GBP 324 million, up from GBP 299 million last year. If you retranslate GBP 299 million using 2024 exchange rates, it results in an EBIT of GBP 289 million, giving us the basis for a like-for-like comparison. Contribution increased by GBP 38 million, including the impact of GBP 3 million of front office savings from our operational efficiency program. Savings in the back office amounted to GBP 4 million, and this resulted in a net increase in management and support costs of just GBP 4 million, despite business investment and inflation.

[Robin Stewart, Executive Director and CFO at TP ICAP]

Finally, the weakening of sterling, especially in the fourth quarter, resulted in a loss on the retranslation of net financial assets on the balance sheet that was GBP 6 million lower than last year. Turning next to significant items. These are not included in our adjusted results so that we can better measure business performance and compare with other reporting periods. Significant items before tax and legal and regulatory matters were GBP 83 million, below our guidance of GBP 90 million. After tax, they amounted to GBP 74 million. This is around half the level in 2023, mainly because of a GBP 76 million net impairment of Liquidnet goodwill and customer relationships that year. There were also higher costs in 2024 from our operational efficiency program and assessment of strategic options for Parameta Solutions. About 60% of significant items were non-cash, including GBP 42 million for the amortization of intangible assets.

[Robin Stewart, Executive Director and CFO at TP ICAP]

Turning next to the business divisions, where my revenue comparisons are in constant currency to give you a clear picture of the underlying growth trends. Starting with Global Broking. Total revenue of GBP 1.3 billion was up 4%. The division built good momentum during the year, with the second half up 7% as market volatility benefited the business, especially in the lead-up to the U.S. election. Rates is our largest and most profitable asset class, accounting for 45% of total broking revenue. Revenue here increased 4% to GBP 574 million. Foreign exchange and money markets also grew 4% to GBP 318 million. Equities increased 3% to GBP 241 million, and credit revenue was down 1% to GBP 117 million. Revenue per broker grew in line with revenue, with a slightly lower average headcount. Contribution of GBP 491 million was stable year-on-year as front office costs increased 5%, slightly ahead of revenue growth.

[Robin Stewart, Executive Director and CFO at TP ICAP]

Adjusted EBIT was broadly in line with the prior year at GBP 205 million, with a margin of 16.1% as the division continues to invest in the rollout and adoption of Fusion. Turning next to Energy & Commodities. Total revenue was up 2% to GBP 461 million, with growth across the three traditional asset classes: oil, power, and gas. This was a good performance against a very strong year in 2023. Productivity was also up as revenue per broker grew 2%, with a slight increase in broker headcount. The contribution margin reduced from 33.6%-30.8% due to higher front office costs in a highly competitive broker environment with significant levels of activity in the sector. Management support costs were 3% higher, reflecting increased investment in technology and our energy transition offering. Adjusted EBIT decreased from GBP 71 million to GBP 56 million, and adjusted EBIT margin was 3.4 percentage points lower at 12.1%.

[Robin Stewart, Executive Director and CFO at TP ICAP]

Turning now to Liquidnet. Last year represented an inflection point in the division's performance. Our efforts to diversify the franchise and strengthen operational leverage, together with a rebound in block trading, are delivering results. Total revenue increased 15% to GBP 354 million. Revenue from cash equities was up 18% as institutional activity benefited from interest rate cuts as inflation came down. Revenue across other asset classes increased 10%, with a strong second half. The business delivered a substantial uplift in adjusted EBIT to GBP 53 million, with a margin up 11.8 percentage points to 15%. Turning now to Parameta Solutions. Revenue was up 8% to GBP 198 million as demand for over-the-counter data continued to grow. Parameta expanded its product range during the year and continued to grow and diversify its client base through the strength of its distribution network.

[Robin Stewart, Executive Director and CFO at TP ICAP]

Contribution increased 6% at a margin of 50%, and adjusted EBIT grew 8% to GBP 83 million, with a margin of 41.9%, 1.2 percentage points ahead of last year. I'd like to talk now about our free cash flow. Our reported EBIT for the year was GBP 236 million. Depreciation, amortization, and other non-cash items amounted to GBP 152 million. We continue to improve our collection of trade receivables. Together with higher accruals from increased trading, this drove the working capital inflow of GBP 71 million. The change in net match principal and stock lending balances was GBP 8 million, while net dividends from associates and joint ventures amounted to GBP 18 million. These increases were partially offset by tax paid of GBP 52 million, GBP 23 million of net interest paid, and GBP 64 million of CapEx.

[Robin Stewart, Executive Director and CFO at TP ICAP]

Taken together, this results in free cash flow generation of GBP 346 million and a cash conversion rate, which is free cash flow divided by adjusted earnings, of 144%. Turning to capital management. We continue to prioritize profitable growth and strong cash conversion as we focus on productivity, contribution, and balance sheet optimization. We expect to generate substantial organic cash from the business over the medium term in addition to our current GBP 50 million target. Should we proceed with the minority listing of Parameta, we do not anticipate any impact on the group's dividend policy, and as Nico mentioned earlier, our intention would be to return most of any potential proceeds to shareholders. The long-term agreements which are in place between Parameta and the broking divisions for the exclusive provision of data would also provide a future cash income stream to the group.

[Robin Stewart, Executive Director and CFO at TP ICAP]

We expect 30-year contract terms for these agreements, which are currently being finalized, and we'll provide more detail regarding capital management at our half-year results in August. Moving next to a breakdown of cash. Restricted cash is held for regulatory capital and liquidity requirements, as well as collateral. This reduced by around GBP 50 million as we actively managed our balance sheet. Unrestricted cash increased by about GBP 70 million, despite two GBP 30 million buybacks in 2024, an increase in the final dividend for 2023, and investment into our efficiency program. GBP 114 million of this is held to meet near-term commitments, including the final 2024 dividend of GBP 84 million and our fourth GBP 30 million share buyback announced today. Turning next to our efficiency program. We are investing in operational excellence to future-proof our group, enhance client experience, and deliver GBP 50 million of annualized savings through five key levers.

[Robin Stewart, Executive Director and CFO at TP ICAP]

An investment of about GBP 70 million will be required to achieve these targets. In 2024, we delivered GBP 15 million of annualized savings, incurring GBP 10 million of costs to achieve. By the end of 2026, we anticipate delivering about GBP 35 million of annualized savings, or 70% of the target. This is in line with our commitment at the half-year to achieve a majority of the savings by this date. These operational efficiencies are expected to moderate the impact of inflation on our management and support costs in 2025 as we continue to invest in the business. Moving now to guidance. We're comfortable with current market expectations for adjusted EBIT in 2025, subject to movements in foreign exchange. We expect about GBP 115 million of significant items before tax and legal and regulatory matters.

[Robin Stewart, Executive Director and CFO at TP ICAP]

This increase is mainly due to the cost to achieve operational efficiencies, as well as strategic costs relating to Parameta Solutions. We then expect significant items to reduce in 2026. Finally, in Parameta Solutions, in the event the business is listed, we expect revenue growth rates to rise to low to mid-teens by 2027. Adjusted EBITDA margin is expected to reduce temporarily to the mid-thirties for 2025 and 2026 and rise to around 40% by 2027, following incremental investment in the sales force, as well as the potential recurring costs of being a listed company. Thank you very much. I'll now hand over to Dan to talk about Global Broking.

[Daniel Fields, CEO of Global Broking at TP ICAP]

Thank you, Robin, and good morning, everyone. Let me begin by reminding you that Global Broking is the world's largest over-the-counter liquidity venue and source of OTC data.

[Daniel Fields, CEO of Global Broking at TP ICAP]

We cover all major asset classes, have a global footprint, and a leading market share. Our two largest asset classes, rates and foreign exchange, generate the majority of our revenue. Our rates business is both the industry leader and benchmark. In equities, which represents almost 20% of our revenue, we continue to invest in creative solutions for clients. Credit is the smallest part of our mix with an opportunity to grow. As you heard from Robin, Global Broking had a year with strong revenue momentum, especially in the second half, as we capitalized on supportive market conditions. Revenue per broker increased 4% year-on-year as we focused on improved productivity. We were pleased to be recognized as Global Interdealer Broker of the Year by Global Capital and the world's best foreign exchange broker by Euromoney. Turning now to our ongoing transformation.

[Daniel Fields, CEO of Global Broking at TP ICAP]

We continue to invest in transforming our business through technology. As Nico mentioned earlier, in December, we announced a strategic collaboration with Amazon Web Services, which will significantly enhance the development of our digital platform, Fusion. The collaboration involves AWS engineers working alongside our own technology teams to develop new products, protocols, and functionality. We aim to halve our product development times and meet clients' needs faster by using AI-driven coding techniques. We will also double our IT workload on the AWS cloud to over 80% so we can scale the Fusion platform more effectively and efficiently. Turning to franchise development, we continue to invest in our core macro offering, rates and FX. Our approach in equities is distinctive in the market. Our focus is on creating innovative solutions to meet our clients' needs.

[Daniel Fields, CEO of Global Broking at TP ICAP]

In 2024, we strengthened our product and technology organization to support delivery and globally enhanced our collaboration with Liquidnet to extend our reach. In credit, our trading protocol for new issuance had a record year. Volumes on the platform, which is integrated with Fusion, increased significantly. More than 470 buy and sell side users submitted over $16 billion of firm, actionable liquidity, well over double the volumes of 2023. Our rebalance trading protocol, which helps dealers manage residual risk, had its best year since launch in 2020. Volumes traded in European investment grade and high-yield corporate bonds were up 80% year-on-year. We also advanced the rollout of Fusion for dealers and started to use generative AI to receive, process, and display newly announced bond deals in a matter of seconds.

[Daniel Fields, CEO of Global Broking at TP ICAP]

Regionally, we see growth opportunities in Asia, and we're investing to fill gaps where we're not yet number one or two in the market. Our centers across the region are also working closely together to enhance client coverage. This resulted in high single-digit revenue growth in Asia, with every asset class outperforming expectations. Turning now to the outlook. We expect market conditions to continue to be broadly supportive, with heightened volatility driven by geopolitical and economic uncertainty. Our priority is to drive profitable growth and maintain our market-leading position by enhancing coverage in products and regions where we can be number one or two in the market, retaining and acquiring world-class broking teams in a competitive environment, and continuing to invest in technology, including developing Fusion and API connectivity. Thank you very much. I will now hand over to Andrew to talk about Energy & Commodities.

[Andrew Polydor, Chairman and Global Head of Energy & Commodities at TP ICAP]

Thank you, Dan, and good morning, everyone. TP ICAP is a leading OTC broker in Energy & Commodities. We have a well-diversified client base made up of trading companies, producers, banks, and a growing number of buy-side clients. We operate across three brands: ICAP, Tullett Prebon, and PVM. Our four-part strategy is first, to continue delivering revenue growth in traditional or core markets. Second, to develop new products to support the energy transition. Third, we are working with Parameta to monetize more of our data. We call this adjacent. Fourth, we are rolling out technology to improve workflows for both our clients and brokers. As you heard from Robin, 2023 was a very strong year for Energy & Commodities. Yeah, we succeeded in beating that performance with revenue up 2%.

[Andrew Polydor, Chairman and Global Head of Energy & Commodities at TP ICAP]

We have delivered organic revenue growth of 22% over the last two years, underpinned by the strength and breadth of our franchise. In recent months, we have enhanced our senior leadership team with the appointment of three new regional CEOs. Joachim Emanuelsson has joined TP ICAP last summer from an environmental markets brokerage, SCB, to run EMEA. David Silbert has been appointed to head our U.S. franchise. He was previously global head of commodities at Deutsche Bank. In Asia-Pacific, we've promoted Tom Fox Hughes to become CEO after three years as our commercial manager. Moving now on to the market backdrop. Oil accounts are just over half of our revenue, and we have a large global footprint in both power and gas. I'll cover these three areas.

[Andrew Polydor, Chairman and Global Head of Energy & Commodities at TP ICAP]

The crude market in 2024 was characterized by sluggish demand, especially in China, together with a high supply, with prices trading in a narrow range. Looking to the future, industry analysts predict that demand for oil will continue to grow into the 2030s. We expect our power franchise to be supported by increased demand for electricity. Over the last decade, use of electricity has grown at twice the pace of overall demand for energy. Now, over the next decade, it is expected to grow 6x as fast. Gas prices were stable in 2024, and as liquefied natural gas is a key fuel for the energy transition, global production capacities are forecast to grow around 50% over the next five years. We are very well positioned to benefit from the continued growth in traditional energy sources, and we continue to see the transition as a growth opportunity.

[Andrew Polydor, Chairman and Global Head of Energy & Commodities at TP ICAP]

Around 1/3 of our clients are actively trading energy transition products, and we expect demand to grow as the transition drives further change. Dan has just talked about our recent agreement with Amazon Web Services, which helped accelerate our development of Fusion. This agreement also offers Energy & Commodities division an exceptional opportunity to co-develop sustainability-focused trading solutions with Amazon suppliers, all of whom have to develop decarbonization plans to align with Amazon's 2040 net-zero ambition. We are also focused on the growing demand for environmental products, including renewable energy certificates and carbon certificates. We already serve the renewable energy market successfully in Norway, Australia, and the U.S. In addition, we are building capability in metals. Demand for rare metals to support the transition is expected to more than double by 2030. During the year, we launched the new battery metals team in London and Singapore to capitalize on this.

[Andrew Polydor, Chairman and Global Head of Energy & Commodities at TP ICAP]

Let me now turn to the outlook. We expect the fundamentals of the energy and commodity market to remain strong in 2025. Medium-term demand for traditional products is forecast to increase, while growth from those linked to the energy transition is expected to be substantial. 2024 was a competitive market for brokers, and given the high level of activity in energy commodities, we think competition for talent is likely to continue. Against this backdrop, we are focused on maintaining our market-leading position in traditional asset classes while at the same time growing in the transition markets. We continue to monetize our data with Parameta Solutions, particularly data generated via the energy transition, as you'll hear from Silvina later on. We are deploying technology to benefit our brokers and clients.

[Andrew Polydor, Chairman and Global Head of Energy & Commodities at TP ICAP]

We expect Fusion to be rolled out across all our desks by the summer, and we are in the process of rolling it out for our environmental products. Thank you very much, and I'll hand you over to Mark for an update on Liquidnet.

[Mark Govoni, CEO of Liquidnet at TP ICAP]

Thank you, Andrew, and good morning, everyone. I'm delighted to present strong results today for Liquidnet as a result of the successful execution of our strategy. Liquidnet serves over 1,500 institutional investors across 49 markets in six continents. As you've heard, we've had an outstanding year, achieving double-digit revenue growth. Momentum was strong across all asset classes, and this translated into strong market share gains. We also increased our operational leverage, having reduced our management and support cost base by 31% over the past two years. The results are clear. Adjusted EBIT increased nearly 6x year-on-year.

[Mark Govoni, CEO of Liquidnet at TP ICAP]

This success was underpinned by our focus on innovation, with many new products being introduced throughout the year. Now let's turn to the equities environment. There was a healthy level of activity from institutional clients in 2024. The global commission wallet increased by 11% year-on-year, while Liquidnet equities grew by 18%, outperforming the market. Within this, block trading revenues were up 23%. This was reflected in significant block market share gains. In Europe, share grew by almost four percentage points to nearly 40%. In the U.S., it was up 36.6 percentage points to nearly 28%. Turning next to an update on our progress. The successful execution of our strategy is paying off. We are diversifying our revenue streams both within equities and through other asset classes.

[Mark Govoni, CEO of Liquidnet at TP ICAP]

While cash equities is our largest asset class at 58% of divisional revenues, we also have a broad offering in rates, futures, foreign exchange, and advisory. In equities, we onboarded 140 new clients during the year. We also continue to diversify through inter-region high-touch program and algo trading to access a larger addressable market. Inter-region trading grew 29% and represented 19% of total revenue. High-touch and portfolio trading revenue was up 26%. Algo trading revenue increased 16%. We also made good progress in expanding in other asset classes. COEX launched in Asia with a central hub in Singapore. We introduced a foreign exchange options desk in the U.S., and we expanded our rates businesses across the Americas. In addition, we launched new offerings across the Liquidnet platform.

[Mark Govoni, CEO of Liquidnet at TP ICAP]

These include SuperBlock Matching, which enables traders to participate in exceptionally large blocks with a single click, driving market share gain over the year. SmartDark, an algorithm designed to enhance large trade execution. Roll Seeker, which is a new tool that brings liquidity in mid-price blocks to the futures market during roll periods. Finally, a multi-asset offering to meet the growing demand for diversification across asset classes, targeting both new and existing clients. We expect continued product expansion and innovation to drive future revenue growth for Liquidnet. Turning now to the outlook. Given heightened geopolitical risk and economic uncertainty about interest rates, inflation, and trade tariffs, volatility is likely to continue. Having reduced our cost base, increased our operational leverage, and grown our market share, Liquidnet is in a strong position to capitalize on supportive market conditions.

[Mark Govoni, CEO of Liquidnet at TP ICAP]

In 2025, we'll continue to deepen our liquidity pool and diversify our equities franchise and expand in other asset classes in order to deliver value for both clients and shareholders. Thank you very much. Now I'll hand it over to Silvina to talk about Parameta Solutions.

[Silvina Aldeco-Martinez, CEO of Parameta Solutions at TP ICAP]

Thank you, Mark, and good morning, everybody. TP ICAP's Parameta division is a leading provider of data analytics and technology solutions in global over-the-counter markets. As you heard from Robin, we deliver revenue of GBP 198 million, which is 8% up year-on-year. Our annual recurring revenue increased by 9% to GBP 195 million. 97% of our revenue is subscription-based, with a net revenue retention rate of 107%. This shows our ability not just to retain, but also grow the revenue from our existing customer base.

[Silvina Aldeco-Martinez, CEO of Parameta Solutions at TP ICAP]

Today, we source data from competing brands within TP ICAP and have an exclusive long-term arrangement with both Global Broking and Energy & Commodities. We also source data from more than 25 third parties. During the year, we strengthen our leadership team, and I am delighted to report that we have a new divisional CFO, Chantal Wessels. Chantal joins us from a U.S. fintech company called Apex Solutions. Prior to that, Chantal held a number of senior positions at NASDAQ. Miles Graham is our new Chief Revenue Officer, and he joins us from S&P Global Market Intelligence. Jake Hujar, our new COO, joins us from PitchBook Data. All have deep experience across data, technology, analytics, and financial services, and will help deliver the next evolution of our business. Moving on to OTC derivatives, notional volumes are approximately 20x larger than global equity exchange volumes.

[Silvina Aldeco-Martinez, CEO of Parameta Solutions at TP ICAP]

Demand for reliable data in this space is growing for a number of reasons. This includes increasing regulation and the need for trace surveillance on the sell side, a surge for yield from the buy side, as well as greater use of quantitative and real-time analytics, which have also accelerated cloud adoption. In these vast and complex markets, and often opaque, our data and technology solutions help participants with critical challenges ranging from price discovery to regulatory compliance. Against this backdrop, we continue with our strategy of growing and diversifying our customer base, expanding our product offering, and broadening our distribution. I'll talk about each of these in turn. Today, we serve 1,100 customers, institutions across the sell side, the buy side, corporate, government entities, market data, vendors.

[Silvina Aldeco-Martinez, CEO of Parameta Solutions at TP ICAP]

Our geographical coverage expands over 60 countries within EMEA, representing about 50% of the revenue, followed by the Americas with about 34% and 15% coming from Asia-Pacific. This year, we have added 84 new firms, and our buy-side segment grew faster at 15%. It now represents 11% of our total revenue. To grow our customer base further, we are enlarging our sales force and also embedding a new account management approach, which is client-centric. Let's turn to our products. We are aligned with TP ICAP's extensive broking footprint, cover all major asset classes in large OTC markets. Our proposition focuses on two areas: indicative pricing and innovative solutions. We are the leading provider of indicative data, which provides customers with an insight in OTC pricing and market activity. This represents 90% of our revenue.

[Silvina Aldeco-Martinez, CEO of Parameta Solutions at TP ICAP]

During the year, we have added over 20 indicative pricing products, including both traditional energy and metals, as well as our first environmental offerings, such as guarantees of origin and U.S. carbon pricing. There was also positive demand for our innovative solutions, which include evidential data, benchmarks and indexes, as well as managed technology solutions. Revenue from these offerings has grown at 87% over the last three years in a compounded average growth rate, and in our accounts, 10% of our total revenue. One of my observations when I first joined Parameta was the strength of our technology infrastructure. For us to become the technology, the data company we are today, we had to pioneer in our own technology, managing to access data across a wide range of asset classes, competing brands, different instruments, and protocols, and many different geographies.

[Silvina Aldeco-Martinez, CEO of Parameta Solutions at TP ICAP]

Just as we now provide technology data management to TP ICAP, we believe we can do the same for others. We have created a gold standard technology in the form of the data platform as a service, designed to cleanse, optimize, and deliver data efficiently. We plan to make the service available by licensing the platform to other OTC venues and players. Turning now to distribution, we aim to meet our customers by using the distribution channel that best works for them. Most of our data today is distributed by a wide range of third parties, and this has represented 74% of our revenue. Revenue via third parties has grown 2% during the year. However, our customers are increasingly opting to receive data directly via the cloud or our own industry standard feeds, such as API.

[Silvina Aldeco-Martinez, CEO of Parameta Solutions at TP ICAP]

This is a more convenient and cost-effective delivery mechanism for them and for us. Direct distribution generated 22% of our annual revenue, and it grew by 30% on a year-on-year basis. Finally, let's turn to the outlook. We expect demand for OTC data to continue to grow. As we execute our strategy, we plan to focus on, first, increasing our focus on customer centricity by expanding our sales force, by strengthening our commercial discipline to grow market and wallet share, and by focusing on new client acquisition in the U.S. Second, we are advancing our product strategy by expanding our data offerings with Energy & Commodities, introducing new solutions such as digital currencies and real-time oil, and also actively marketing our data platform as a service. Third, we will continue to respond to client-driven demand for direct distribution via the cloud. Thank you very much.

[Silvina Aldeco-Martinez, CEO of Parameta Solutions at TP ICAP]

I will now hand over to Nico to wrap up.

[Nicolas Breteau, Group CEO at TP ICAP]

Thank you, Silvina. To conclude, 2024 has been a very positive year for TP ICAP, and we're optimistic about our ability to grow our business and enhance returns over the medium term. Uncertainty, and therefore volatility, is now a pronounced feature wherever you look in the world. More than ever, our clients look to us to help them navigate their way through these uncertain times. They know our expertise is backed by industry-leading technology, with more to come through our strategic collaboration with Amazon Web Services. Global broking and Energy & Commodities are well placed to grow in a supportive market environment and to benefit from the deployment of Fusion. Liquidnet is performing well. We have successfully reshaped the business. It's now leaner, with a more diversified product range.

[Nicolas Breteau, Group CEO at TP ICAP]

You have heard our innovation at Liquidnet is providing an engine for growth. We believe that Parameta has upside potential, and we're focused on a possible U.S. listing. Finally, our continued emphasis on productivity, contribution, and cash remains a key discipline. We are confident in our ability to generate substantial cash so that we can continue to invest in our business, pay down debt, and make further returns to shareholders. You will hear more about this in August. Thank you very much. We are going now to open for questions. Could you please tell us your name and organization before you ask questions? Thank you.

Is it okay? First of all, there's a reference to sort of targeted M&A in the presentation at some point. It would be interesting to have more detail in that. What it is would be of interest.

Should we think about that as sort of small bolt-ons or team liftouts or whatever? Secondly, probably one for Robin, on significant items, the GBP 115 million, just how much of that would be cash? And then lastly, on Parameta, assuming there is some sort of transaction there, I'd just be interested to have a bit more detail on how you should think about carving out the financing of that business from the group balance sheet. Thank you.

[Nicolas Breteau, Group CEO at TP ICAP]

I'll start. Of course, we are constantly looking at potential bolt-on, non-organic complement to our business. We are obviously very cautious and very disciplined in terms of identifying assets that could contribute quickly to the profitability of the company. We are looking for quality assets. We are exploring various things, but there is nothing at this moment to announce or talk to you about.

[Robin Stewart, Executive Director and CFO at TP ICAP]

On your second question on significant items, sorry, I was just reading them all there. I think it's fair to say that in 2025, most of the incremental spend is cash, mainly really on the cost optimization program that we're looking at, albeit some of those are also non-cash. There'll be an increase in cash outflow on that increment, which will then revert back to lower levels in 2026. On the Parameta question on financing, again, I think that's probably a little bit too soon for us to comment on, given that we are not certain of concluding a transaction. We can talk about that should such completion happen.

Thank you.

[Will Regis, Equity Sales Analyst at Peel Hunt]

Good morning. William Regis from Peel Hunt, and congratulations on another sparkling set of numbers. Thank you for your time today. Just one quick question on Parameta.Why have you chosen the listing route for that business?

[Nicolas Breteau, Group CEO at TP ICAP]

As we said before, it's been an 18-month thinking process and working process. It's been very rigorous and meticulous. We have engaged on a regular basis with the investors who are actively managing their books. We consider that this is a route that maximizes the potential for TP ICAP on one hand and for Parameta on the other hand. On one hand, this is an opportunity for our shareholders to benefit from a base value in doing these, but also to remain associated to the growth of Parameta in the future. The objective here is value recognition, but also value creation in the long term.

[Nicolas Breteau, Group CEO at TP ICAP]

For Parameta, obviously, it's also interesting because such a setup will help them to diversify their sources of data further, will potentially help them to accelerate their growth on a non-organic basis. As I mentioned earlier, the visibility that it creates, I think, is helping to attract talent.

[Nicolas Breteau, Group CEO at TP ICAP]

Any other questions? No?

[Dom Lagan, Head of Investor Relations at TP ICAP]

No questions in the room at the moment. We were just seeing if any questions were coming in online. There aren't any at this stage. No questions on the phone? No one else in the room? We have one here.

[Nick Watts, Managing Director at Redburn Atlantic]

Thank you. Good morning. Nick Watts from Redburn Atlantic. Question, one for Dan and actually one for Andrew, both on competition. Andrew, could you, perhaps you flagged that competition for brokers has been relatively intense, and you expect that to continue. Could you frame maybe where that's coming from and how you expect that to evolve?

[Nick Watts, Managing Director at Redburn Atlantic]

Similar question for you, Dan, around just what the broker recruitment competitive dynamics look like. Perhaps a slightly cheeky question. One of your largest competitors, their long-standing founder, is moving on. Whether you expect that to have any influence on the broader environment? Thank you.

[Andrew Polydor, Chairman and Global Head of Energy & Commodities at TP ICAP]

Okay, I'll go first. What we saw in 2024 was events that happened in 2023. 2024 was relatively quiet. There was some activity, but there is a prolonged push into our space. There is a significant gap to our competitors from our business, so that is why they are looking at our business. The pressure was coming actually from outside the traditional players. There were shipping companies that were coming in trying to diversify the businesses. It is kind of like slowing down a little bit now, and we will see what shipping is doing at the moment.

[Andrew Polydor, Chairman and Global Head of Energy & Commodities at TP ICAP]

I think it's a little bit of a downturn, so we might see that quieten down. Pleasing to our hand, I think.

[Daniel Fields, CEO of Global Broking at TP ICAP]

On Global Broking, there's always competition for talent, I think, in every industry and certainly in broking. I think having the biggest and best platform out there allows us to attract and retain talent. I wouldn't say there's anything that's really changed notably. I wouldn't want to comment on our competitors' activity. I don't have anything to add, but I don't envision that there will be any substantial change to that statement in 2025.

[Dom Lagan, Head of Investor Relations at TP ICAP]

We have a question coming through on the platform from Vivek Raja from Shore Capital.The first question, probably for Robin, is, can you give some color on current trading given the recent volatility that we're seeing in Europe as well as the U.S.? That's the first question.The second question is, why should the separation of Parameta increase its revenue growth potential?

[Robin Stewart, Executive Director and CFO at TP ICAP]

Thanks, Dom, and thanks, Vivek. Just in terms of current trading, I think it's a little bit soon for us to talk about specifics. Clearly, I think people will acknowledge that the market is constructive for this business at the moment, and we'll give our Q1 update in the beginning of May. It might be worthwhile asking Dan to talk a little bit about the macro environment. I think we've got a slide on page 57, which he can talk to.

[Daniel Fields, CEO of Global Broking at TP ICAP]

I think, as Robin said, it's a bit early to talk about the results, but I think we can observe that there's a supportive market environment for us, and the volatility is helpful.

[Daniel Fields, CEO of Global Broking at TP ICAP]

This slide is just to demonstrate that there's been a lot of movements, particularly on the foundational level of interest rates on the left side and the thick curve you see, the dramatic reduction in the short-term rates over the last year. Meanwhile, we've had an increase in long-term rates as the economic outlook changes. These curves have changed quite a bit over the last week and certainly over the last six months. Whenever you have foundational rates that evolve like this, that means there's an entire repositioning of portfolios on an investor's basis, and that's obviously supportive for volume in the market.

[Silvina Aldeco-Martinez, CEO of Parameta Solutions at TP ICAP]

Moving on to Parameta, we will have the opportunity to be the only independent company with the exclusive mandate of monetizing OTC data. There's no other such company in the world supposed to post a potential listing. I think that's one of the components. Additionally, we have a fast market opportunity, and therefore we are going to more aggressively deploy capital towards organic growth.

[Dom Lagan, Head of Investor Relations at TP ICAP]

Any more questions in the room? I don't believe there are any further questions on the platform or the phone lines. Short and sweet. Okay, that leaves me to conclude the presentation this morning. We look forward to welcoming investors back at our half-year results, which we will be announcing on the 6th of August. Thank you very much.

[Nicolas Breteau, Group CEO at TP ICAP]

Thank you, everyone. Thank you. Thank you.

Participants

Analysts

• Andrew Polydor, Chairman and Global Head of Energy & Commodities at TP ICAP
• Daniel Fields, CEO of Global Broking at TP ICAP
• Dom Lagan, Head of Investor Relations at TP ICAP
• Mark Govoni, CEO of Liquidnet at TP ICAP
• Nick Watts, Managing Director at Redburn Atlantic
• Nicolas Breteau, Group CEO at TP ICAP
• Robin Stewart, Executive Director and CFO at TP ICAP
• Silvina Aldeco-Martinez, CEO of Parameta Solutions at TP ICAP
• Will Regis, Equity Sales Analyst at Peel Hunt