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. It is 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

Presentation

[Nicolas Breteau, Group CEO & Executive Director at TP ICAP Group]

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. Then I will wrap up before we take questions.

[Nicolas Breteau, Group CEO & Executive Director at TP ICAP Group]

So let me start with the headlines where movements are in constant currency. Group revenue increased 5% to 2,300,000,000.0. The group contribution was also up 5% to $867,000,000. We managed our fixed costs well. Group management and support costs were up just 1% despite inflation and investment.

[Nicolas Breteau, Group CEO & Executive Director at TP ICAP Group]

EBIT was up 12% to million, a record level, with the margin growing from 13.5% to 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 11.3p, up 13% on last year. All our divisions traded well. Underlining the power of our diversified business and the delivery of our strategy.

[Nicolas Breteau, Group CEO & Executive Director at TP ICAP Group]

So let me turn now to our three strategic priorities, and I'd 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 broken 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.

[Nicolas Breteau, Group CEO & Executive Director at TP ICAP Group]

So 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. 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 50,000,000 of annualized savings by 2027.

[Nicolas Breteau, Group CEO & Executive Director at TP ICAP Group]

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 resilience greater resilience across a range of market environments with less earnings volatility. In 2024, our two non blocking businesses, Parameter Solutions and Liquidnet contributed 42% of group adjusted EBIT, up from 29% in 2023. This was driven by strong performances from both businesses.

[Nicolas Breteau, Group CEO & Executive Director at TP ICAP Group]

Liquidnet's contribution has been transformed, delivering a near sixfold increase in adjusted EBIT to million and making significant market share gains. Liquidnet is diversifying revenue both within its equities business and across other asset classes. Parameter Solutions brings another form of diversification, and 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 and commodities, liquid net and parameter. So we continue to strengthen our business through diversification.

[Nicolas Breteau, Group CEO & Executive Director at TP ICAP Group]

Our third strategic priority is a dynamic capital management, giving us the flexibility to be able to invest in the business, paid on debt or return capital to shareholders. We continue investing to improve our business, for example, in broker recruitment, Fusion or Parameter Solutions. In 2024, we paid down about $100,000,000 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 6.1p, an increase of 9% on 2023.

[Nicolas Breteau, Group CEO & Executive Director at TP ICAP Group]

Our total dividend per share is up 30% in two years. We have also announced our fourth buyback today of £30,000,000 This brings total buybacks announced over the last eighteen months to $120,000,000 Moving now to our plans for Parameter 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 Parameter. These include maintaining outright ownership and or selling a majority or minority stake either via trade sale or an IPO.

[Nicolas Breteau, Group CEO & Executive Director at TP ICAP Group]

As a result of our review, we have decided that TPI Cap should focus on listing a minority stake in The U. S. But remain the long term majority owner of Parameter Solutions. In the event of listing a minority stake, TPI CAB shareholders would benefit from establishing a baseline value for Parameter. We know from extensive engagement with shareholders that it is important for them.

[Nicolas Breteau, Group CEO & Executive Director at TP ICAP Group]

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 Parimeter in several ways. First, it could enable the business to invest to grow as a stand alone entity by accessing resources beyond those available to the group. Second, as a stand alone entity, it may be able to access more data from other OTC market participants. And finally, greater visibility in the marketplace for Parameter will enhance its ability to attract and retain high caliber talent.

[Nicolas Breteau, Group CEO & Executive Director at TP ICAP Group]

The listing could occur as early as the second quarter of twenty twenty five, though there is, of course, no certainty at this stage that we will proceed. Should we proceed with the listing of parameter, our intention would be to return most of the proceeds to TPI cap shareholders. Moving next to our medium term outlook for cash. 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 $50,000,000 of surplus cash from further legal entity consolidation.

[Nicolas Breteau, Group CEO & Executive Director at TP ICAP Group]

Over the medium term, we expect to generate substantial cash organically in addition to this 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, CFO & Executive Director at TP ICAP Group]

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 $2,300,000,000 Adjusted EBITDA was up 11% at just under $400,000,000 Adjusted EBIT grew 12% to $324,000,000 and margin increased to 14.4%. Net finance costs of $21,000,000 were down 25% below our guidance of $25,000,000 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.

[Robin Stewart, CFO & Executive Director at TP ICAP Group]

Taken together, this resulted in adjusted earnings before significant items of $241,000,000 up 6%. Adjusted basic earnings per share grew 9% to 31.8p. And as Niko said earlier, we plan to pay a final dividend of 11.3p, taking the total dividend to 16.1p, 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 $324,000,000 up from $299,000,000 last year.

[Robin Stewart, CFO & Executive Director at TP ICAP Group]

If you retranslate $299,000,000 using twenty twenty four exchange rates, it results in EBIT of $289,000,000 giving us the basis for a like for like comparison. Contribution increased by $38,000,000 including the impact of $3,000,000 of front office savings from our operational efficiency program. Savings in the back office amounted to $4,000,000 and this resulted in a net increase in management and support costs of just $4,000,000 despite business investment and inflation. 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 $6,000,000 lower than last year. Turning next to significant items.

[Robin Stewart, CFO & Executive Director at TP ICAP Group]

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 $83,000,000 below our guidance of 90,000,000. After tax, they amounted to 74,000,000. This is around half the level in 2023, mainly because of a 76,000,000 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 Para Meta solutions.

[Robin Stewart, CFO & Executive Director at TP ICAP Group]

About 60% of significant items were noncash, including $42,000,000 for the amortization of intangible assets. 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 $1,300,000,000 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.

[Robin Stewart, CFO & Executive Director at TP ICAP Group]

S. Election. Rates is our largest and most profitable asset class, accounting for 45% of total broking revenue. Revenue here increased 4% to $574,000,000 Foreign exchange and money markets also grew 4% to $318,000,000 Equities increased 3% to $241,000,000 and credit revenue was down 1% to $117,000,000 Revenue per broker grew in line with revenue with a slightly lower average headcount. Contribution of $491,000,000 was stable year on year as front office costs increased 5%, slightly ahead of revenue growth.

[Robin Stewart, CFO & Executive Director at TP ICAP Group]

Adjusted EBIT was broadly in line with the prior year at $2.00 $5,000,000 with a margin of 16.1% as the division continues to invest in the rollout and adoption of Fusion. Turning next to Energy and Commodities. Total revenue was up 2% to $461,000,000 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.

[Robin Stewart, CFO & Executive Director at TP ICAP Group]

The contribution margin reduced from 33.6% to 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 $71,000,000 to $56,000,000 And adjusted EBIT margin was 3.4 percentage points lower at 12.1%. Turning now to Liquidnet. Last year represented an inflection point in the division's performance.

[Robin Stewart, CFO & Executive Director at TP ICAP Group]

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 $354,000,000 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 $53,000,000 with a margin up 11.8 percentage points to 15%. Turning now to Parameter Solutions.

[Robin Stewart, CFO & Executive Director at TP ICAP Group]

Revenue was up 8% to $198,000,000 as demand for over the counter data continued to grow. Parameter expanded its product range during the year and continued to grow and diversify its client base through the strength of its distribution network. Contribution increased 6% at a margin of 50%, and adjusted EBIT grew 8% to $83,000,000 with a margin of 41.9%, one point two percentage points ahead of last year. I'd like to talk now about our free cash flow. Our reported EBIT for the year was $236,000,000.

[Robin Stewart, CFO & Executive Director at TP ICAP Group]

Depreciation, amortization and other noncash items amounted to million. We continue to improve our collection of trade receivables. Together with higher accruals from increased trading, this drove the working capital inflow of million. Dollars The change in net match principal and stock lending balances was $8,000,000 while net dividends from associates and joint ventures amounted to $18,000,000 These increases were partially offset by tax paid of $52,000,000 20 3 million dollars of net interest paid and $64,000,000 of CapEx. Taken together, this results in free cash flow generation of $346,000,000 and a cash conversion rate, which is free cash flow divided by adjusted earnings, of 144%.

[Robin Stewart, CFO & Executive Director at TP ICAP Group]

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 million target. Should we proceed with the minority listing of Para Meta, we do not anticipate any impact on the group's dividend policy. And as Niko mentioned earlier, our intention would be to return most of any potential proceeds to shareholders.

[Robin Stewart, CFO & Executive Director at TP ICAP Group]

The long term agreements which are in place between ParaMetta and the Broking divisions for the exclusive provision of data would also provide a future cash income stream to the group. We expect thirty 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.

[Robin Stewart, CFO & Executive Director at TP ICAP Group]

This reduced by around $50,000,000 as we actively managed our balance sheet. Unrestricted cash increased by about $70,000,000 despite $230,000,000 buybacks in 2024, an increase in the final dividend for 2023 and investment into our efficiency program. $114,000,000 of this is held to meet near term commitments, including the final 2024 dividend of $84,000,000 and our fourth thirty 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 $50,000,000 of annualized savings through five key levers.

[Robin Stewart, CFO & Executive Director at TP ICAP Group]

An investment of about $70,000,000 will be required to achieve these targets. In 2024, we delivered 15,000,000 of annualized savings, incurring 10,000,000 of our costs to achieve. By the end of twenty twenty six, we anticipate delivering about 35,000,000 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.

[Robin Stewart, CFO & Executive Director at TP ICAP Group]

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 $115,000,000 of significant items before tax and legal and regulatory matters. This increase is mainly due to the cost to achieve operational efficiencies as well as strategic costs relating to ParaMeter solutions. We then expect significant items to reduce in 2026.

[Robin Stewart, CFO & Executive Director at TP ICAP Group]

Finally, in ParaMeter 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-30s for 2025 and 'twenty six 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, Chief Executive Officer of Global Broking Division at TP ICAP Group]

Thank you, Raman, 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. 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.

[Daniel Fields, Chief Executive Officer of Global Broking Division at TP ICAP Group]

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. And 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.

[Daniel Fields, Chief Executive Officer of Global Broking Division at TP ICAP Group]

Turning now to our ongoing transformation. We continue to invest in transforming our business through technology. As Niko 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.

[Daniel Fields, Chief Executive Officer of Global Broking Division at TP ICAP Group]

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. In 2024, we strengthened our product and technology organization to support delivery and globally enhanced our collaboration with Liquidnet to extend our reach.

[Daniel Fields, Chief Executive Officer of Global Broking Division at TP ICAP Group]

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 four seventy buy and sell side users submitted over $16,000,000,000 of firm actionable liquidity well over double the volumes of 2023. Our rebalance trading protocol, which helps dealers manage residual risk, had its best years since launch in 2020. Volumes traded in European investment grade and high yield corporate bonds were up 80% year on year.

[Daniel Fields, Chief Executive Officer of Global Broking Division at TP ICAP Group]

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. 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.

[Daniel Fields, Chief Executive Officer of Global Broking Division at TP ICAP Group]

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 and commodities.

[Andrew Polydor, Chief Executive Officer of Energy & Commodities at TP ICAP Group]

Thank you, Dan, and good morning, everyone. TPI ICAP is a leading OTC broker in energy and commodities. We have a world diversified client base made up of trading companies, producers, banks and a growing number of buy side clients. And we operate across three brands, ICAP, Tullit Pre Bond 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.

[Andrew Polydor, Chief Executive Officer of Energy & Commodities at TP ICAP Group]

Third, we're working with Parramatta to monetize more of our data. We call this adjacent. And fourth, we're rolling out technology to improve workflows for both our clients and brokers. As you heard from Robin, twenty twenty three was a very strong year for Energy and Commodities. Here we succeeded in beating that performance with revenue up 2%.

[Andrew Polydor, Chief Executive Officer of Energy & Commodities at TP ICAP Group]

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've enhanced our senior leadership team with the appointment of three new regional CEOs. Joakim and Madison has joined TPI Capped last summer from an environmental markets brokerage, SCB, to run EMEA. David Silbert has been appointed to head our U. S.

[Andrew Polydor, Chief Executive Officer of Energy & Commodities at TP ICAP Group]

Franchise. He was previously Global Head of Commodities at Deutsche Bank. And in Asia Pacific, we promoted Tom Fox Hughes to become CEO after three years as our Commercial Manager. Moving now onto the market backdrop. Oil accounts are just over half of our revenue and we have a large global footprint in both Power and Gas.

[Andrew Polydor, Chief Executive Officer of Energy & Commodities at TP ICAP Group]

So I'll cover these three areas. 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.

[Andrew Polydor, Chief Executive Officer of Energy & Commodities at TP ICAP Group]

Now over the next decade, it's expected to grow six times as fast. Gas prices were stable in 2024. And as liquefied natural gas is a key fuel for the energy transition, global production capacity is forecast to grow around 50% over the next five years. So 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. Around one third of our clients are actively trading energy transition products, and we expect demand to grow as the transition drives further change.

[Andrew Polydor, Chief Executive Officer of Energy & Commodities at TP ICAP Group]

Dan has just talked about our recent agreement with Amazon Web Services, which helped accelerate our development of Fusion. This agreement also offers Energy and 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 two thousand and forty 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 US. In addition, we are building capability in metals.

[Andrew Polydor, Chief Executive Officer of Energy & Commodities at TP ICAP Group]

Demand for rare metals to support the transition is expected to more than double by 02/1930. During the year, we launched the new battery metals team in London and Singapore to capitalize on this. So 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.

[Andrew Polydor, Chief Executive Officer of Energy & Commodities at TP ICAP Group]

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 Parramatta solutions, particularly data generated via the energy transition, as you'll hear from Sylvain later on. And we're deploying technology to benefit our brokers and clients. We expect Fusion to be rolled out across all our oil desks by the summer, and we are rolling we're in the process of rolling it out for our environmental products.

[Andrew Polydor, Chief Executive Officer of Energy & Commodities at TP ICAP Group]

So thank you very much and I'll hand you over to Mark for an update on Liquidnet.

[Mark Govoni, Chief Executive Officer of Liquidnet at TP ICAP Group]

Thank you, Andrew, and good morning, everyone. I'm delighted to present strong results today for Liquinet as a result of the successful execution of our strategy. Liquinet serves over 1,500 institutional investors across 49 markets in six continents. And 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.

[Mark Govoni, Chief Executive Officer of Liquidnet at TP ICAP Group]

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 six times year on year. This success was underpinned by our focus on innovation with many new products being introduced throughout the year. So now let's turn to the equities environment.

[Mark Govoni, Chief Executive Officer of Liquidnet at TP ICAP Group]

There was a healthy level of activity from institutional clients in 2024. The Global Commission wallet increased by 11% year on year, while LiquorNet 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%.

[Mark Govoni, Chief Executive Officer of Liquidnet at TP ICAP Group]

And in The U. S, it was up thirty six three point six 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, Chief Executive Officer of Liquidnet at TP ICAP Group]

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% and algo trading revenue increased 16%.

[Mark Govoni, Chief Executive Officer of Liquidnet at TP ICAP Group]

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.

[Mark Govoni, Chief Executive Officer of Liquidnet at TP ICAP Group]

In addition, we launched new offerings across the Liquidnet platform. 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. RoleSeeker, which is a new tool that brings liquidity in mid price blocks to the futures market during roll periods. And finally, a multi asset offering to meet the growing demand for diversification across asset classes targeting both new and existing clients.

[Mark Govoni, Chief Executive Officer of Liquidnet at TP ICAP Group]

We expect continued product expansion and innovation to drive future revenue growth for Liquinet. 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, Liquinet is in a strong position to capitalize on supportive market conditions. So 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.

[Mark Govoni, Chief Executive Officer of Liquidnet at TP ICAP Group]

Thank you very much. Now I'll hand it over to Savina to talk about ParaMeda Solutions.

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

Thank you, Mark, and good morning, everybody. TPI Casparemetto 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 198,000,000, which is 8% up year on year. Our annual recurring revenue increased by 9% to GBP 195,000,000. 90 7 percent of our revenue is subscription based with a net revenue retention rate of 107%.

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

This shows our ability not just to retain but also grow the revenue from our existing customer base. Today, we source data from competing brands within TPI cap and have an exclusive long term arrangement with both Global Broking and E and C. We also source data from more than twenty five third parties. During the year, we strengthened our leadership team, and I am delighted to report that we have a new divisional CFO, Chantal Vessels. Chantal joins us from a U.

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

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 and P Global Market Intelligence. And Jake Hujard, our new COO, joins us from PitchBook Data.

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

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 20 times larger than global equity exchange volumes. And demand for reliable data in this space is growing for a number of reasons. This includes increasing regulation and the need for trace of valence on the sell side, a search 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.

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

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. Our geographical coverage expands over 60 countries within EMEA representing about 50% of the revenue, following by The Americas with about 3415% coming from Asia Pacific. This year, we have added 84 new funds, and our Biasat segment grew faster at 15%.

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

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 TPI Cup's extensive broken footprint, cover all major asset classes in large OTC markets. And our proposition focuses on two areas, indicative pricing and innovative solutions.

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

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. 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 US 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 it now accounts 10% of our total revenue.

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

One of my observations when I first joined Para Meta 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. Just as we now provide technology data management to TPI Camp, we believe we can do the same for others. So 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.

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

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 - Parameta Solutions at TP ICAP Group]

This is a more convenient and cost effective delivery mechanisms 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. And as we execute our strategy, we plan to focus on, first, increasing our Fortune 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 US.

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

Second, we are advancing our product strategy by expanding our data offerings with energy and commodities, introducing new solutions, such as digital currencies and real time oil, and also actively marketing our data platform as a service. And third, we will continue to respond to client driven demand for direct distribution via the cloud. Thank you very much. I will now hand over to Nikko to wrap up.

[Nicolas Breteau, Group CEO & Executive Director at TP ICAP Group]

Thank you, Silvina. So to conclude, 2024 has been a very positive year for TPI Cap, 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 strategy collaboration with Amazon Web Services.

[Nicolas Breteau, Group CEO & Executive Director at TP ICAP Group]

So global broking and energy committees 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. And you have heard our innovation at Liquidnet is providing an engine for growth.

[Nicolas Breteau, Group CEO & Executive Director at TP ICAP Group]

We believe that Parramatta has upside potential, and we are 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, paid on debt and make further returns to shareholders.

[Nicolas Breteau, Group CEO & Executive Director at TP ICAP Group]

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.

[Robin Stewart, CFO & Executive Director at TP ICAP Group]

You

[Analyst]

First of all, there's a reference to sort of targeted M and A in the presentation at some point. Just be interested in more detail in that, what areas would be of interest? Should we think about that sort of small bolt ons or team lift outs or whatever? Secondly, probably one for Robin on significant items, the $115,000,000 just how much of that would be cash? And then lastly on Para Meta, assuming there is some sort of transaction there, I'd just be interested to a bit more detail on how you should think about carving out the financing of that business from the group balance sheet.

[Analyst]

Thank you.

[Nicolas Breteau, Group CEO & Executive Director at TP ICAP Group]

I'll start. So 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, and we are looking for quality assets. So we are exploring various things, but there is nothing to at this moment to announce or talk to you about.

[Robin Stewart, CFO & Executive Director at TP ICAP Group]

On the on your second question on significant items, sorry, I was reading them all there. I think it's fair to say that in 2025, the 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 noncash. But there'll be an an increase in cash outflow on that, on that increment, which will then revert back to to lower levels in 2026. And on the parametric question on financing, again, I think that's probably a little bit too too soon for us to comment on given that we are not certain of concluding a transaction. And we'll we can talk about that should such completion happen.

[Will Regis, Equity Sales at Peel Hunt]

William Regis from Peel Hunt. Congratulations on another sparkling set of numbers. Thank you for your time today. Just one quick question on ParaMetta. Why have you chosen the listing route

[Will Regis, Equity Sales at Peel Hunt]

for that business?

[Nicolas Breteau, Group CEO & Executive Director at TP ICAP Group]

So as we said before, it's been an eighteen months thinking process and working process. So it's been very rigorous and meticulous. And we have engaged on a regular basis with the investors who are actively managing their books. So we consider that the this is a route that maximize the sorry, maximize the potential for TPI cap on one hand and for Parameter on the other hand. So on one hand, this is an opportunity for our shareholders to benefit from a base value in doing this, but also to remain associated to the growth of ParaMeter in the future.

[Nicolas Breteau, Group CEO & Executive Director at TP ICAP Group]

So the objective here is value recognition, but also value creation in the long term. And for Parameter, 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. And as I mentioned earlier, the visibility that it creates, I think, is helping to attract talent. Any other question?

[Executive]

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.

[Executive]

No one else in

[Executive]

the room?

[Nicolas Breteau, Group CEO & Executive Director at TP ICAP Group]

We have one here.

[Nicholas Watts, MD - Financials, Capital Markets & Crypto Research at Redburn Atlantic]

Thank you. Good morning. Nick Watts from Redburn Atlantic. A 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.

[Nicholas Watts, MD - Financials, Capital Markets & Crypto Research at Redburn Atlantic]

Could you frame maybe where that's coming from and how you expect that to evolve? And then 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?

[Andrew Polydor, Chief Executive Officer of Energy & Commodities at TP ICAP Group]

I'll go first. What we saw in twenty four events that happened in '23. So twenty four is relatively quiet. There was some activity, but there's the prolonged push into our space. There's significant gap to our competitors from our business, so that's why they're looking at our business.

[Andrew Polydor, Chief Executive Officer of Energy & Commodities at TP ICAP Group]

And the pressure was coming actually from outside the traditional players. It was shipping companies that were coming in trying to diversify the businesses. It's kind of like slowing down a little bit now. And we'll see what shipping is doing at the moment. I think it's little bit of a downturn, so we might see that quieten down, plays into my hand I think.

[Daniel Fields, Chief Executive Officer of Global Broking Division at TP ICAP Group]

So on Global Broking, there's always competition for talent, I think, in every industry and certainly in broking. And 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 'twenty five.

[Executive]

We have a question coming through on the platform from Vivek Raja from Shaw 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 US? That's the first question. The second question is why should the separation of parameter increase its revenue growth potential?

[Robin Stewart, CFO & Executive Director at TP ICAP Group]

Thanks, Tom, 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 May. It might be worthwhile asking Dan to talk about a little bit about the macro environment. I think we've got a slide on Page 57 which he can talk to.

[Daniel Fields, Chief Executive Officer of Global Broking Division at TP ICAP Group]

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. 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 and 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 investors' basis and that's obviously supported for volume in the market.

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

And moving on to ParaMetta. 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.

[Executive]

Any more questions in the room? I don't believe there are any further questions on the, the platform or the phone lines. Sure and sweet. Okay. Well, that leaves me to conclude the presentation this morning.

[Executive]

We look forward to welcoming investors back at our half year results, which we will be announcing on the August 6. Thank you very much.

[Nicolas Breteau, Group CEO & Executive Director at TP ICAP Group]

Thank you, everyone. Thank you. Thank you.

Participants

Executives

• Nicolas Breteau, Group CEO & Executive Director
• Robin Stewart, CFO & Executive Director
• Daniel Fields, Chief Executive Officer of Global Broking Division
• Andrew Polydor, Chief Executive Officer of Energy & Commodities
• Mark Govoni, Chief Executive Officer of Liquidnet
• Silvina Aldeco-Martinez, CEO - Parameta Solutions

Analysts

• Analyst
• Will Regis, Equity Sales at Peel Hunt
• Executive
• Nicholas Watts, MD - Financials, Capital Markets & Crypto Research at Redburn Atlantic