Record FY 2021 resultsApril 20, 2022
Successful execution of growth strategy delivers strong organic growth in 2021, and a positive start to 2022
Record full-year results to 31 December 2021 saw strong growth in revenue and profit, demonstrating the strength of Marex Group’s global franchise and organic growth across all businesses and geographies.
|Adjusted Operating PBT||79.6||61.5||29%|
|Total Capital Ratio||17.2%||16.1%|
- Net revenue up 31% to $543 million with strong performance across all segments, particularly market making and Execution and Clearing, combined with significant contribution from Solutions which delivered >100% increase in net revenues
- Adjusted Operating PBT up 29% to $79.6 million driven primarily by strong organic growth. Eight consecutive years of growth and 26% Adjusted Operating PBT CAGR since 2014
- Increased client numbers and client activity, with client assets up 74% to $5.4 billion (2020: $3.1 billion)
- Strong capital and liquidity positions further improved, with total capital ratio increased to 17.2% and total liquidity available of over $800m.
- Two bolt-on acquisitions completed, further expanding Marex’s capabilities in physical energy markets and soft commodities – c.20% average ROE achieved on recent acquisitions
- Continuing to develop innovative solutions including partnership with Coinbase Prime and further technology investment in Neon client platform, with over 8,000 users
- Progressed our ESG strategy through further investment in our environmentals offering and carbon sequestration venture with OxCarbon, Kumi Analytics, and the Global Mangrove Trust
Ian Lowitt, Marex CEO, commented:
“We are proud of these results, which reflect a strong organic performance as we continue to drive forward our growth initiatives, diversifying our business by adding products to our service segments and expanding geographically. These more than offset a headwind from very low interest rates.
“Although the current macroeconomic environment is volatile, we have successfully navigated the recent geopolitical disruption in the commodities markets, carefully managing risk and maintaining a strong capital and liquidity position throughout. We continue to steer our clients through a very challenging period, whilst complying fully with government sanctions.
“We have seen a very strong start to 2022. Looking ahead, I am confident that we will continue to deliver strong growth, both organically and through strategic bolt-on acquisitions, as we continue to build on our strategic growth plans. Furthermore, inflation in the real economy will likely translate into rising short-term interest rates, which is also positive for our business.”
Market Making – provides direct liquidity to our clients across a variety of products primarily in the energy, metals and agriculture markets.
- Revenues increased 29% to $131.1 million (2020: $101.2 million) as Metals and Agricultural franchises benefited from rising market volatility and improving market conditions, combined with strong performance.
- Recent acquisitions continued to perform strongly and contribute to the growth delivered in 2021.
Execution and Clearing – acts as principal for our clients, providing direct access to 56 exchanges globally.
- Growth in this business is illustrated by the growth of client assets on our balance sheet, which increased 74% to $5.4 billion at the end of 2021.
- Revenues increased 33% to $183.0 million (2020: $138.1 million) with energy, metals and agriculture businesses all significant contributors to these numbers, supported by the first full year’s net revenues from XFA.
- Adjusted Operating PBT increased 18% in 2021 to $38 million.
Solutions – provides high quality bespoke hedging and investment solutions to our clients.
- This segment continues to deliver very strong growth for Marex, with Net Revenue and Adjusted Operating PBT more than doubling in 2021, as we expanded our distribution network. The number of clients who access our solutions increased 25% to almost 400.
Price Discovery – facilitates liquidity by connecting buyers and sellers in opaque OTC energy markets.
- Revenues increased 5% to $134.7 million (2020: $127.9 million), with consistent demand for our liquidity provision services during the year, combined with higher front office headcount.
Data & Advisory – generates revenues from a subscription business selling energy price discovery data and certain research services, which provides a foundation to grow and develop our data business.
- Revenues increased 64% to $5.9 million (2020: $3.6 million), which included a one-off gain from the disposal of intellectual property.
The invasion of Ukraine and the resulting humanitarian crisis is like no other experienced in our generation in Europe. Our thoughts are with our partners, clients and the people experiencing untold pain and hardship, and we hope that negotiations to end the conflict will prevail. The Group has donated over $100,000 to the Red Cross to support aid in the region. The business has relatively little direct exposure to either Russia or Ukraine and has ceased to do business with Russian counterparts.
Marex has experienced positive trading conditions in the first quarter of 2022, with increased levels of volatility and rising commodity prices, creating favourable macro conditions for the business. This, coupled with an increased demand from clients for Marex services and effective risk management, has resulted in performance significantly ahead of the same period in both 2021 and 2020, which benefitted from Covid related volatility.
We have successfully navigated the recent geopolitical disruption in the commodities markets, carefully managing risk and maintaining a strong capital and liquidity position throughout. We have worked closely with our clients to support them through what has been at times a very challenging period, continuing to provide liquidity and other essential services, whilst complying fully with government sanctions at all times.
The Group is confident that it can continue to deliver strong growth and is investing in a series of strategic initiatives to broaden its product offering to clients and expand its geographic footprint. In particular, we are excited by the opportunities we see to further develop our renewables offering and become a leading player in carbon credits and green contracts, where we see significant potential demand from our clients as we transition towards a low carbon economy. While most of the growth in 2021 was organic, the business operates in a highly fragmented industry and will deploy capital in carefully selected bolt-on acquisitions that will deliver attractive returns and accelerate our development.