Marex Releases Record Full Year ResultsApril 7, 2021
18% increase in net revenues and 15% increase in adjusted operating PBT
Significant successes from acquisitions and organic growth despite Covid-19
Seventh consecutive year of increased earnings
London, 7 April 2021: Marex (the ‘Group’), an essential tech-enabled liquidity hub connecting clients to global energy, commodity and financial markets, has today reported record results for the year ended 31 December 2020. The Group continued its positive trajectory with its seventh consecutive year of increased adjusted operating profit before taxation, as well as diversified earnings across geographies, products and clients.
The results were up across every metric, with the Group’s gross revenues up 37% at $762.4 million (2019: $554.9 million), net revenues up 18% at $414.7 million (2019: $352.2 million) and adjusted operating profit before taxation up 15% at $61.5 million (2019: $53.4 million). These results demonstrate the success of Marex’s business model and disciplined approach to risk management in an exceptionally challenging year in which, against the backdrop of the Covid-19 pandemic, Marex continued to expand through acquisition and ongoing organic growth.
2020 highlights included:
Continued organic growth, with headcount up 33% to 973.
Added new services, including Small Cap Equities market-making capability in London, the arrival of The Matthews Group, an agricultural execution and clearing franchise in Chicago, and expansion of the Energy trading business in New York and Singapore, all of which further diversify earnings and drive growth.
Acquired and successfully integrated three bolt-on acquisitions which expanded Marex’s offering and regional diversification:
– Tangent Trading Limited, a London-based non-ferrous recycled metals specialist, added new capabilities to metals market making and develops the Group’s business in sustainable commodities sectors.
– Volatility Performance Fund SA, a Luxembourg-based equity volatility market maker.
– X-Change Financial Access LLC (XFA), a Chicago-based execution broker for VIX and S&P options, which expanded the client offering into equity options.
The Group closed the year with over $468 million of liquidity and increased client assets by 50% to $3.1 billion.
Reaffirmed credit rating of BBB from Standard & Poor’s for the Group’s main operating entity, Marex Financial.
Made significant commitments to Environmental, Social and Governance (ESG) initiatives
– Committed to being carbon neutral by 2022.
– Collaborated on innovative environmental projects with the Oxford University’s Smith School of Enterprise and the Environment, such as the OxCarbon project and seed-funding a mangrove carbon sequestration project.
– Committed to gender equality – 32% of senior hires in 2020 were female.
Improved gender pay gap by 8% to 24% YoY (compared to 35% average in Financial Services).
Accelerated investment in technology and innovation, with the deployment of the new NEON client portal in the fourth quarter and the migration of 6,000 clients to the latest XTP reporting system.
Continued to evolve the Group with a new Head of North America, a new Head of Energy in North America, a Head of On Exchange Execution and Clearing, a new Chief Risk Officer and a new Head of Compliance.
In March 2021, the Group renewed its $120 million revolving credit facility and completed its first acquisition of the year, Starsupply Petroleum Europe B.V., a Rotterdam-based physical energy broker. Starsupply further broadens Marex’s EU energy presence in physical markets, and the business has natural synergies across both its physical and paper Price Discovery services.
Change of Name
Subsequent to the year end, and following a review of the naming conventions used by staff and clients, the Group has taken the decision to simplify its name, moving from “Marex Spectron” to the shorter and crisper “Marex”. The Group has a new website at www.marex.com and deployment of the revised name will continue in the coming weeks.
Revenue growth for the first quarter of 2021 was strong compared to the fourth quarter of 2020, with positive signs in key growth businesses such as Marex Solutions, the Group’s new UK-focused equities franchise in its Market Making business and the Group’s energy execution and clearing capability in North America.
Operating profit before taxation for the first quarter of 2021 was materially above the Group’s average quarterly operating profit before taxation for the last three quarters of 2020 despite a weaker performance in March. Operating profit before taxation for the first quarter of 2020 was exceptionally high given the unprecedented volatility and market turmoil during the early stages of the COVID-19 pandemic and, accordingly, operating profit before taxation for the first quarter of 2021 was, as expected, materially less than the record first quarter of 2020.
Given market conditions in the period since 31 December 2020, the Group expects operating profit before taxation in 2021 to be weighted to the second half of the year due to factors impacting the first half the year, including the ongoing impact of lockdowns and other COVID-19 measures on client activity, overall economic slowdowns as evidenced by lower exchange volumes and low interest rates. The Group expects the positive revenue developments in key growth businesses, coupled with cost reductions in select businesses, to lead to an increase in profitability during the second half of 2021.
Ian Lowitt, Marex CEO, commented: “I am delighted to report another outstanding set of results. With Covid and working from home, 2020 was an extraordinary year and I am truly proud of how our employees stepped up to the challenge.”
“Notwithstanding the market conditions, we continued to perform at a very high level, achieving record profitability for the seventh year in a row, growing revenues and profits consistent with our historic trajectory of 15% to 20%, to new records.”
“Not only did we maintain our positive earnings trajectory, but we also continued to invest in our organisation to further diversify our business and to support ongoing growth in 2021 and beyond. We completed three acquisitions in the year, thus demonstrating how consolidating acquisitions to add products and geographic diversification within our four core services is now business as usual, which even the global pandemic could not disrupt.”
“This is an exciting time for our firm. We have a lot of positive momentum, are growing successfully in each of our core services and remain ambitious and confident for 2021.”