Marex Group plc (MRX) Earnings Call Transcript & Summary

Okay. All right. Good morning, everybody, and welcome to this, our inaugural Marex Investor Day. I'm Ian Lowitt, the CEO of Marex. It's great to actually be here in the NASDAQ building. You can see on this chart, NASDAQ welcoming Marex, this was April 25, 2024, obviously, the day of our IPO. So this is a very happy place for sort of the senior team here at Marex. It's great to see so many familiar faces in the audience as well as new faces. And we appreciate very much everybody's continued interest in Marex. We have a number of people participating online and we thank everybody for joining us today. A year ago, when we met many of you as sort of part of our upcoming IPO, we described how we wanted to be an open and transparent company, how we were interested in feedback, how we wanted to continually improve our disclosure. And I think that today's inaugural Investor Day is just completely consistent with that notion of being open, being sort of transparent with our investors and also with the people who are covering with us. 2024 has been a remarkable year for Marex. A lot of highlights, many of which we'll be touching on through the course of the presentation. Obviously, the IPO was particularly wonderful moment for the firm. It was obviously far more than just a sort of funding event. It was almost like a corporate sort of coming of age and it energized the organization and enthused it in a wonderful way. We're also extremely pleased that we were able to have a successful sort of secondary follow-on in October, and thank you for those of you who sort of participated and supported us in that. It's a year where we performed, I think, as well or better than people's expectation, and we're pleased and excited about that. But it was also a performance that was happening inside the public gaze. And that has been an adjustment for us, but we recognize just how important it is for us to be seen and describing what it is that we do and continually be available to sort of answer questions from people and that our success will sort of follow a greater understanding of what it is that Marex does, how we do it, and hopefully, today will be about you and the people who are participating on this online, getting a much better appreciation of Marex as well as our management team. So in terms of the agenda today, as a management team, we take enormous pride in what we've built at Marex. We're keen to share with you our existing and prospective investors why it is that we're so enthusiastic about our prospects and what we've built at Marex. We want you to feel like you really understand our businesses. It's not a black box. It's something that's sort of intuitive to you, how it is that we compete. We want to have a feel of the competitive environment we operate in, what it is we're striving for. And then critically, from my perspective, we want you have a greater appreciation of just how strong the management team that we have here is. We want to give you an opportunity to learn more about the firm, obviously, and to get to know the team. There's a great deal of content that we'll be taking you through, and hopefully, you'll find that very interesting. In terms of being available for questions, there is some specific time that's been scheduled for that. But what we're also going to do is at the end of each of the segments, we are going to have a bit of time available for you to ask questions or the people write as they present. On this slide, we have the list of the presenters. These are, as I sort of refer to them, the architects and master builders of the Marex platform. I've talked a number of times about how I think Mark is sort of in a great strategic spot and that there's an enormous opportunity that's available for a firm like ours to have tremendous success. But those sort of strategic factors are really just sort of necessary conditions to our success. It's certainly not sufficient. The thing that you sort of really need to add is the quality of the organization and the quality of management. And I believe that we have an incredibly talented management team. Hopefully, what you'll get a sense of today is the sort of passion, the commitment, the ambition, the expertise, the excitement that this group of people can actually generate within the firm and within the environments and with our clients. I'm sure you're going to enjoy hearing from them today. I'm starting out with a quote that we have from one of our investors. And it's a wonderful example of just how somebody hearing the presentation that we've done sort of distills it into just a couple of sort of essential points. And it's that there's something extremely rare about Marex as a small-cap financial having a genuine source of competitive advantage. And that while many of the opportunities available to small-cap financial investors or just timing players, Marex is set up to grow through the cycle. And so the things that thematically I want to draw on through the rest of this presentation is the sense in which there's something unusual and exceptional about Marex. The reason and the underpinnings of our sources of competitive advantage and then the way in which we're actually set up to grow through the cycle. What we've done on this slide is try to distill a view of what it is that makes -- that shows how exceptional Marex is. So what we've got is essentially a funnel. And what goes into the funnel are the essentially 4,000 public companies, so 3000 in the Russell, 3000, the euro stocks and the FTSE 350. And then if you use as a series of filters, the performance metrics of Marex, you get a sense of just how few firms are performing at this level. So the first filter is that firms have to have a 20% 10-year revenue CAGR, they have to be profitable every year. And what's interesting to me is to see how a few of the high-growth companies are actually profitable every single year. So that sort of gets you from the 4,000 down to 81. And then if you impose on it an additional requirement that you've grown your profitability at 35%, you get to 16. And then if you impose an additional constraint that you had to increase profit every single year through the 10-year period, you end up with only 3 companies out of that original 4,000 that are performed at that level. And then obviously, you'd add to that Marex. So we see ourselves as a firm that is exceptional in terms of our track record, in terms of what we've been able to accomplish. And we believe that the things that have enabled us to perform that well over the last 10 years are, if anything, sort of stronger and more embedded in the firm today than they were at any point in our history. I want to just share with you our view of how we participate in the financial ecosystem. And broadly, we see ourselves as the connective tissue that exists between sort of market participants and their requirement to connect to exchanges and clearinghouses. And so whether that is commodity producers, it's commodity consumers, it's sort of financial players, whether they be asset managers, they are hedge funds, they're sort of large banks, other financial players, all of them have a requirement to connect to markets and to connect to the liquidity that's on those markets. And Marex has built out as a company which is providing that sort of essential connective tissue that enables those market participants to connect to those exchanges and clearing houses. And we do that in a number of ways, and those ways are all interconnected and reinforcing of one another. So the most obvious way in which you help somebody connect to the market is as a clearing agent. And the clearing services we provide are the heart of the firm, the bulk of our profitability and that the obvious way in which we connect clients to markets. But if people are clearing with you or you don't have a clearing requirement, but you still have a requirement for liquidity in the marketplace, you look for somebody who's going to help you with that, and we can do that either as an agent or we can do that as a market maker depending on what the product is. And that's an important way in which we help not just our clearing clients who typically would look to you to help them with execution, but also many of the largest financial players in the world are looking to Marex for either agency and execution or market making. And then for clients, particularly the commodity producers and consumers, but not exclusively, if you are looking for access to a hedge that isn't available on exchange, we have our solutions business, which can help clients sort of do that. Now these 4 services not only provide multiple entry points for clients to become clients of the firm, they create opportunity for cross-sell. And then critically from my perspective, they really help us sort of manage risk more effectively. If you were only in one of these different segments, it would be very difficult to understand all the ways in which sort of markets are changing, where the pressure points are, how to think about concentrations and how to get yourself out of risk if you were sort of faced with a particular circumstance. So I'm extremely pleased that these are the segments that we have. It gives us a basis to build a great firm. We're not interested in getting into additional services. But we -- and I'm not really even interested in changing the relative mix of these in any dramatic way. I think that the relative size of them really is enormously helpful to us as we look to grow our portfolio. What you see on this slide is our business case and our investment case and our strategy that we shared with the market at the time of the IPO. And the critical point, I think, is that literally nothing has changed with regard to this. It's an identical strategy. We're executing on it. And all of these elements remain unchanged. What I did want to share with you, though, are those dimensions where I think the firm and the circumstance is better than we would have thought a year ago. So when we went into the IPO and we shared our view of the future with many of you here and with the market, I think we had a certain sense of how things were likely to play out, both within '24 and then looking forward. And relative to where we were then, and because it's just such a sort of memorable day, I think we do have a pretty rich sense of what we were thinking at the time, these are sort of 4 areas where things are better than we would have anticipated. So the growth trends underpinning our market are better than we would have thought a year ago. The points that we made with regard to declining competitive intensity and our place within that competitive environment, I think, has actually improved. We've grown market share faster than I would have anticipated. And while I know that we anticipated that being a public company would help our brand and help our business, the way in which it's actually played out and the extent of it, I think, is quite a bit more positive than we would have anticipated at the time of the IPO. And I'll go through each of these in turn for you. So in terms of growth trends inside our marketplace, what you see on the slide is just how much exchange volumes have been growing over the last 4 years. And you can see that, that's 11% and it's essentially the same pace for commodity listed derivatives as well as for financial products. Now if you go back to the earlier period and what we would have anticipated as the underlying growth rate in our marketplace, we would have been looking at sort of mid-single digits. And what we're seeing at the moment is sort of low-double digits. So markets are definitely growing faster than we would have anticipated. Now what sort of underpinning that are a combination of secular drivers as well as thematic trends. In terms of the secular drivers, demand for listed derivatives is going up. I think it's going up because there's increased receptivity to this as a hedging tool globally. So there's definitely a globalization going on. But what I think we're also seeing, and we're seeing a lot of this right at the moment, is that this is increasingly becoming a way in which retail investors are looking to engage with markets. And you certainly are seeing within the retail aggregators a lot of sort of interest in being able to provide futures and options to their clients. And we certainly are seeing a big increase in demand for particularly our clearing from retail aggregators. So that's a very attractive market opportunity for us. As you know, we are an institutionally oriented company. We don't deal with retail directly, but we are finding great receptivity from retail aggregators for the set of products that we offer. We've spoken with you about how there's just increased demand and there will be added demand for people who produce or consume commodities to hedge out their exposures and that's an extremely regular sort of requirement, people who are producing coffee, people are consuming coffee, don't want to -- they want that to be what their skill is rather than their ability to assess sort of when the market is high or low. And as a consequence, there's really substantial demand for hedging instruments for energy and commodity producers and consumers and that's a big part of what continues to drive these markets up. We've seen lots of opportunity in financial markets, and Paolo will be talking with you later about how we've responded to that opportunity and how that's helped diversify our firm, but we certainly see that as a long-term driver. And certainly, as the real economy and the nominal economy grows, we see these products growing. Now clearly, we're also in a world of macroeconomic uncertainty, geopolitical unpredictability, it's Liberation Day today apparently. And so that's not going to change in our view. And what we are seeing is as I'm sure you are in terms of the exchange volumes, just high volatility, not just in individual asset classes, but across a lot of asset classes and all of them essentially simultaneously. So that's a very attractive market backdrop for us, and certainly more than we would have anticipated a year ago. In terms of our competitive position. Again, I think it's more secure and more robust than I would have anticipated a year ago. The barriers to entry feel sort of as robust if not more so than they were a year ago. And in particular, what I'd sort of draw attention to is the investment that is required in technology, in understanding the regulatory requirements, in understanding the compliance requirements, which really is extremely difficult for anybody to replicate. And as we're having more and more success bringing larger clients onto our platform and winning competitive bids, it just is apparent to us how difficult that is for other competitors to do and to maintain and to sort of stay current with all the requirements and how difficult that is to do in a world where there's a lot of legacy technology. So the barriers to entry remain as robust as they were a year ago, maybe a little bit more. The small independents continue to struggle. I wouldn't say that's more than we would have anticipated a year ago, but it certainly hasn't changed in any way. And then the thing that I think is different to what we would have anticipated a year ago is just the extent to which we're able in the current circumstance to compete and win for -- win the largest mandates. We're -- part of that is just sort of the clients wanting to diversify away from banks. Part of that is just the difficulty the banks have in continuing to keep their product up to date and to have the level of expertise that Marex can bring to bear in a world where they're typically juniorizing a lot of their coverage and much of the sort of core trading talent has a better way at some of the hedge funds. And so we've certainly seen more ability to win those mandates than I think we would have expected. We continue to get the question: In a world where, particularly in the U.S., there's anticipated deregulation or the regulations will be sort of applied in a less stringent way, is that likely to change competitive intensity for Marex? And we certainly have not felt that. And as we look into it, we don't believe that it will be the case because to compete in clearing, it's not about regulatory arbitrage because our investment-grade rating is based on an S&P assessment and the S&P model, which sets our RAC ratio is essentially a bank capital model. So we're not -- although we have less regulatory capital requirement than a bank; in order to compete, we're competing based on our investment-grade rating and our investment-grade rating sort of requires us to maintain very similar levels of capital to what a bank would have to do. But what the banks struggle with is being able to sort of develop sort of the technology to stay current, to make an investment if they decided to that would probably not bear fruit for 3 to 5 years and isn't leveraging anything that is sort of in place, which they can sort of deploy easily. And the alternative to that is just to increase the amount of trading they do using a trading infrastructure that is already in place and is anxious to get more access to capital and be able to do more. And so that's what it feels to us is both strategically sensible for the banks to do as well as consistent with what we're actually seeing them do. And ironically, that's actually better for our business because banks are looking to us increasingly to be one of the vehicles into how they access market liquidity through our agency and execution or through our market-making capabilities. One of the things that is just evident to us, and we talk about how we're sort of taking share, it's heartening to be able to sort of point to some very specific numbers in the public domain to sort of just reinforce that point. And I do think that our outperformance, again, is probably more than we would have anticipated a year ago. But you can see, our revenue grew last year at 28%. The sort of broader-based competitors that we deal with StoneX, BGC, they were growing in the low double digits. The pure brokers were growing 3%. And even the exchanges, we're growing in the low-double digit. We're clearly growing revenue a lot faster than sort of our competitors. And that almost definitionally means you're gaining a lot of share. What you see down at the bottom of is the balances reported in terms of sort of FCM client balances. And you can see these are sort of the reporting firms. You can see Marex up 26%, we grew our balances faster than anybody else. The average across the sample is actually 3% and the bank average is around 1%. So you can see that the banks are sort of slowly, in aggregate, losing a little bit of share. And you can see the extent to which Marex is actually outperforming sort of the marketplace. And then something that we report on a quarterly basis is Marex volumes versus the exchange volumes, and you can see the top right here, how Marex is growing quite a bit faster, certainly in clearing agency and execution energy somewhat faster than the market and particularly in agency and execution securities, which Paolo will be talking with you about. So broadly, what you're seeing is a consistent picture of even away from any acquisitions in 2024, Marex on an organic basis, being able to grow share quite a lot faster than the market. But also I think it's fair to say we're growing faster than we would have anticipated a year ago. In terms of how being a public company has influenced us. There's undoubtedly a big a big lift in sort of brand recognition. And it plays out in a number of different ways. It's very obvious to me that when we go out and pitch for business, particularly with sort of the larger, more competitive client situations, the fact that we're a public company in the public gaze that we've had a successful IPO in the U.S. as a non-U.S. company, the fact that we've performed well and that the stock has performed really well, makes a big difference in terms of authenticating the firm. And at that point, you can go on and have conversations about our superior products, our superior sort of execution, the expertise that exists inside the firm. But you're taken seriously at a different level to what you would -- what would have been the case if we were trying to win those mandates a year ago or as a sort of private sort of company. In terms of our own staff, there's undoubtedly sort of a sense of enthusiasm, sense of being part of a winning team, a pride that exists for having gone through this IPO moment that really, again, intangible, but to my mind, sort of hugely important. And it also translates into an enhanced ability to recruit and bring some of the sort of best teams into Marex. And we've certainly seen a lot of that last year and we see that continuing this year. So people who may have been very comfortable where they were reaching the end of the term of their contract are now receptive to an approach from Marex and excited about how they can actually grow their business as part of the Marex's platform in a way that would not have been the case sort of historically. We'll talk a fair amount today about the opportunity we see for inorganic growth, and Paolo will be talking about that this afternoon. But clearly, when we -- we are seeing more inbound as a result of the prominence that we have in our space and people are more and more convinced that if they came to Marex, it would assist their business and help them grow faster than they could grow themselves. And those are the kinds of acquisitions we're particularly interested in. I mean the competitive processes are ones where, I mean, you play through and if you win, you win. But what you'd really like to be able to do to create a lot of value is find those bilateral opportunities where somebody is just talking with you, and this is about how they're going to be able to grow their business as part of Marex. Obviously, I think as we have increased -- there's more awareness of Marex as the liquidity in our stock goes up, as we continue to deliver for investors, as those investors who sort of came in at the different entry points of being able to generate great returns, whether those were the people who came in at the IPO or they came in, in the secondary or they've been accumulating stock, again, all of these things, I think, sort of contribute to more and more momentum, and this brand recognition has been a really important part of how we've been able to succeed. Unsurprisingly, given sort of those 4 trends that I was describing to you: Our 2024 performance was extremely strong. So revenues up 28%, profit up 40%, our return on equity up to 30% when you exclude the onetime IPO-related expenses. And when you look at each of our segments, and you'll be hearing from the managers of those areas after this introduction speech, you get a sense that everything is growing really quite quickly. When your laggard is sort of growing 24%, then you know you're up to -- you're doing pretty well. And that momentum has continued into 2025. I mean I gave a sense of that as did Rob when we did our investor update in the first quarter, but we wanted to share with you our numbers today as sort of part of the Investor Day. And you can see that notwithstanding the fact that exchange volumes are circa 6% above the fourth quarter, our revenues are up 25% on the quarter a year ago, our profit is essentially up 40% from where we were a year ago. And I think we're going to be 15-plus percent up on where we were in the fourth quarter. So terrific performance, continued momentum in the franchise. Our strategy has always been about growing the firm by diversifying our products, diversifying our geographic footprint and adding clients to the platform. And we do that sort of organically, we do that inorganically. We see both of those as sort of a really important sort of drivers. When we look over the period from '21 to '24, you can see how essentially the firm is 4x larger in terms of profitability. Interestingly, over this period, something like 75% of the growth is organic. And certainly, when you look in 2024, the vast preponderance of our $91 million of increase in profitability was organic. The inorganic piece is sort of the first year of Cowen. And I think as Paolo will be describing to you, that was a little slow at the start, but it's really picked up in the fourth quarter of last year and then continued into the first quarter of this year. So we're actually really excited about that. But this is broadly how we anticipate growing going forward. I think that over a longer period, we would expect probably 40% of our growth to be inorganic, so a little bit higher than what we've seen over this 4-year period, mostly as a result of just having greater capital formation and more ability to actually do impactful M&A. And Rob will be talking you through how we think about sort of capital allocation. And we see an enormous number of opportunities both in sort of the bolt-on space and around sort of more transformative M&A. I mean that will be episodic. We're -- what I can commit to you all is we will be extremely disciplined in all of this and in particular around the transformative deals where we don't see any reason to chase anything. There's going to be many, many opportunities available to us. You can think about growth in terms of how the individual business has grown. But if you're -- from my perspective, given that we're about servicing client flow, and we're in the moving business, not in the storage business, we're not making money by taking risk with the firm's equity. We're essentially servicing clients. The driver of our growth is really about bringing more clients onto the platform and then doing more business with them. And so what we are tracking actively is how many active clients we have? And then how many are paying us how much money? And what we want to see is sort of healthy growth in our largest clients who are paying us more than $1 million. And again, if I go back in time, I mean, there was a time where the number of people paying us $1 million was, I don't know, in the teens. So the fact that we're now up to almost 270 clients paying us more than $1 million, again, is an indication of how far the firm has come over a longer time period. And we're also interested in that sort of next tier of midsized participants where as we cross-sell, we are going to expect their revenues to grow. And again, there's going to be quite a lot more on sort of our clients later on in the presentation. But for us, growth is about adding clients and increasing the amount of business we do with them. Now one of the things that I've indicated to you that I was keen to find ways to communicate and this is hopefully a step on the path towards that goal is just how reliable and recurring our business activity is and how reliable the profitability is from that activity. What we have shown historically is a sharp ratio of monthly profitability. And I think sort of the difficulty of that as a metric is nobody else reports it and there's a sense in which it's not completely intuitive how to sort of think about the numbers themselves. So the fact that it's -- the shop ratio is increasing is a good thing and the fact that it's 5 sort of sounds like a lot. But we've recognized that, that has sort of some deficiencies. So what we're introducing here on the right is hopefully a more intuitive way to understand how it is that the firm has been benefiting from all these efforts around diversification and how that plays through in our daily profitability. So we've shown you 2 distributions. The first is what was our distribution in 2021 and then in black, the distribution in 2024. And what you can see visually is not only have we sort of shifted the average daily PBT to the right quite a bit. So it's gone from about $300,000 to $1.3 million. But that distribution has really narrowed, and you can sort of see that visually, so the standard deviation has actually come down on a relative basis quite a bit. And what you also see is that left tail has almost disappeared. So whereas in 2021, we were essentially in a world where we had 82 negative days, now we only have 5. And most of the distribution now is actually in that 1 standard deviation. So almost 70% of our PBT is generated within the set of days that are within 1 distribution. And as I indicated and described in this when we were talking about our results in the second quarter of last year, we do have a number of sort of very positive days, which are a result of sort of market opportunity and we just often associated with market making and linked with what we saw in the second quarter of last year. So we've created a firm which essentially has almost no negative days, I mean I'd like it to literally be 0, a quite tight band of distribution with regard to profitability, which hopefully over time is sort of shifting further and further to the right. And then there will inevitably be a fairly large and fat right tail, where there are days where we are extremely profitable. It's not as a result of taking risk. It's a result of sort of the market opportunity being available to us in our various businesses. And some of those top days are actually like the days of sort of quarterly roles on a lot of the sort of futures, where our market share around some of that is quite extraordinary. So hopefully, this is a sort of intuitive way for you all to understand how it is that the firm is just generating much, much more reliable daily profitability than many other sort of financial firms would do. To some extent, that's not really a surprise. When you think about where the growth in the business has taken place. So we've grown all of our segments, but the predominance of our growth has been in clearing as well as in agency and execution. And if you think about our clearing business, as we've sort of described, once you're somebody's clearer, it's a very, very sticky business. You're linked in with the downstream processes of those companies. They're using you in an absolutely critical infrastructure service way. It's ongoing business, you're generating money off the interest balances, you've got regular flow as they transact and they clear through you. So it's not surprising that, that's a very, very stable base sort of, of revenue. Similarly, in agency and execution, you particularly, as a result of what we're doing in prime, again, you're selling somebody infrastructure, you're selling them sort of capabilities and once they're on your platform, they're going to do a very reliable business through you. And then the other sort of dimension of what makes revenues so reliable. It's just the regularity of the flow. If producers and consumers of commodities just need a hedge and if you're used to doing that business with Marex, it just flows sort of through the firm. And so you've seen the impact of the diversification on sort of the distribution of daily revenue and as you think about where we've grown and how we've grown and what the nature of that activity is, you get a sense of why it is that the firm is, in fact, able to generate such reliable daily profitability. The themes that I've sort of been describing to have played out over a long period of time, our track record over 10 years is enviable. We're extremely pleased with how we've been able to grow the firm in this way through a whole multiple of different market environments. You can see it's -- we've had growth, we've had no growth, we've had high Fed funds, we've had low Fed funds, we've had high levels of volatility, we've had low levels of volatility, we've had commodity prices increasing, commodity prices decreasing. And the whole way in which we've looked to set up Marex is as a firm that has sufficient structural growth that it can offset cyclical headwinds. We've been able to demonstrate that. We also want to be able to take advantage of the market opportunity as we've sort of seen in '23 and '24. We've had a great start to '25, and we can see ourselves continuing this trend going forward. What I did want to do is just share with you, in conclusion almost, what it is that we think we are able to accomplish going forward. We've talked about how we believe that even in the face of some level of cyclical headwinds and certainly, interest rates will be a cyclical headwind. At some point, we won't have the same sort of robust growth in exchange volumes, as we've certainly seen over the last little sort of period of time. We see the firm is set up organically to deliver sort of north of 10%. We think that, that gets augmented with the M&A, and that will increasingly become, we think, a bigger part of what we do. So if we're able to sort of grow in that 10% to 20% range, we'll grow from sort of the $320 million that we did in '24 to 5 years forward, somewhere between $500 million and $800 million. And if we're able to grow at the same sort of pace that we have been growing historically, then that's a pretty sort of impressive $1.2 billion. But if we just sort of focus in what it is that's going to deliver sort of value in that 10% to 20% range. Given our history, that doesn't feel that ambitious, but it certainly feels like you want to focus yourself on something like that given that we do anticipate that the environment that we would operate in over the next 5 years might not be quite as supportive as we've seen over the last few. But even in that world, you're talking about a firm that will be quite substantial and will generate pretty substantial EPS. We do think over this period that our margins will be expanding to something like mid-20s and that will be as a result of sort of economies of scale, it will be as a result of increasing shift of the business to higher margin activity that involves utilization of our balance sheet. We don't think it's going to get to 30, but you can anticipate where the revenues are likely to be based on what will happen to margins. And again, we don't have an independent view on what would happen to our multiples in that particular world. But hopefully, if we were able to continue to deliver growth in this range, we would hope that the market would respond favorably to that. So just pulling a bunch of this together for you. 2024, a fantastic year for the firm. The IPO, the secondary, the sort of debt issuance, which diversified our funding sources, the level of oversubscription that we had in all of those offerings, I think we're all sort of hugely important. The fact that we were able to get to a point after the secondary where we were sort of 52% public, I think was sort of hugely important. The fact that we've seen the trading in our stock go from that sort of $5 million to $10 million range a day to now $10 million to $15 million, hopefully, sort of $15 million to $20 million shortly and then we'd like to be $20 million to $30 million in the relative near term. We and our investors remain sort of committed to dealing with the overhang. And sort of given how well the firm is doing, I do believe that we will be able to increase sort of the public float and increase the liquidity in our stock, which is just a virtuous circle in the sense that when you have that, more people are interested in holding your stock and we would expect the firm to and our stock price to respond positively to that. The brand recognition is a public company, as I talked about earlier, really, really important. And again, that also feels like a virtuous circle. The more that your brand improves and you win more sort of high visibility mandates, important mandates, the more that sort of gets out into the market that you should look to Marex, the more in which that actually plays out. We had excellent performance in 2024, probably better than we had anticipated. I think the only person who really thought we're going to do that well was Alex, so well done, Alex. And 2025 has been terrific. We've seen a great start to the year, which we've shared with people today. We closed Aarna just a couple of days ago. Hamilton Court, we think we'll close in the second quarter. We see sort of interesting M&A opportunities available to us. We've demonstrated last year that the firm can grow organically. We'll see that play through again in 2025. And again, we will also hope to see some real augmentation of that as a result of acquisitions. The firm is just going from strength to strength, and you feel it in the energy of the people in the firm, you feel it in the enthusiasm with which people go out to deal with clients, to win mandates, to service their business, the pride they take at being at Marex and being able to just be part of a really successful firm. There's no hubris in the firm, though. I think we've -- there's sort of a level of humbleness, which is appreciated by clients. We understand how important it is to under-promise and over-deliver. And that's that permeates the whole firm, it's what we do with clients. It's what we do with investors. We do also have a lot of confidence in our future. We're not naive about how the environment could change. We're accepting that rates are likely to come down, and that will obviously impact NII. We had negative on NII in the first quarter, but notwithstanding that, we're able to deliver extremely strong results. And so we think we're set up to absorb that particular headwind. We think we can grow 10% to 20% a year for the next 5 years. And -- obviously, we'll look to the better if we can. But the firm is really set up for great success. I do want to pass this on now to the people who generate the revenues and the profits. And I think you'll really enjoy hearing from them and getting a feel for how it is that we've built out our various businesses. So with that, Thomas.

Thank you. Hello, everyone. So I'm Thomas Texier, I'm the Head of Clearing. I'm here to talk to you about our Clearing business. So I've been at Marex for almost 5 years now. I have over 20 years in the industry, almost all of it pretty much in futures and options and clearing. I'm an ex-risk manager, former COO and I've been in the business for a very long time. As you heard it from Ian, clearing is very central in -- central offering within the business at Marex. We have a very diversified global business. So we have 2,900 clients, and we cover 60 exchanges across pretty much every asset class that is tradable on futures and options. So we cover commodities, of course, but also rates. As you saw recently, we started offering swaps clearing. We cover equity derivatives and digital asset futures as well. So in recent years, the clearing business has grown meaningfully. So we've built a truly global business with almost $13 billion of client balances. When I started, we had less than $2 billion. And we now have 278 people working in the clearing world. We have also cleared last year over 1 billion contracts, which is a number that is quite -- we're quite proud of. We're now pretty much -- we believe we're in the top 10 FCM and we are arguably the largest nonbank clearing firm. In terms of financial numbers, as you heard from Ian, clearing is now $460 million of revenues for last year, and we represent 53% of the operating profits of Marex. So let's talk about what clearing is. So it's clearing in the simplest form is what happens essentially after a trade on the futures market is executed. So we deal with exchanges and that you would recognize, we're clearing member on ICE, on LME or on CME. So our customers will connect through to order -- to trade these markets and have access to these markets. They need to have a clearer, and they will connect to Marex and Marex will help them to settle this transaction, and that's really what clearing is about. Onboarding a client in clearing is a fairly lengthy process, so we tend to involve a lot of operational setup, quite a lot of risk management configuration and it takes a little while. A client onboarding from sort of initiation to full onboarding and live trading can be between 3 to 12 months, depending on the complexity of the clients. In terms of our engagement with clients, we tend to deal with customers typically with C-suite executive, it's very similar to opening a bank account, with all the CFO, Group Head of Treasury, COOs. And that gives us a particularly privileged access to the senior management at our clients and this also allows us to establish a very long-term relationship. The current business, as you know, is very sticky because of the onboarding complexity and there's also a lot of technology involved in managing clearing businesses and clearing relationships. In terms of our business model, we have -- we monetize our account flows through 2 ways, right? The first one is we charge commissions on every trade, so very much a transactional model. And secondly, we also make interest income on margin balances. So as part of the clearing of the transactions, customers have to deposit margins with us. We will have also a deposit margin in the clearinghouse. These balances will earn interest. And in its simplest form, we will pay our customers less than we make on the investments of these funds and the returns. And this is -- this creates interest margin. So obviously, we trade as a principle on these markets. So we interact with the clearing house, we stand by all the trades that we are clearing. So we are a business of managing risk. If a customer fails to pay their margins, we are -- we have -- we're committed to paying the margins to the clearing house. So a good portion of the managing the clearing business is handling the risk management. We have an obligation to pay these margins. I think Dean will have a section towards the end of the presentation to talk to you more about how the risk management operates more in detail. But from our perspective, running the business. We have quite a lot of sort of risk mitigation. So we obviously ask margins from our clients, we ask collateral. We perform intraday, real-time risk supervision and obviously, we have the right at any time to close out a client and reduce our exposure if our customers are failing to pay their margins. Any credit line we provide to our customers is also on an uncommitted basis, so they can be withdrawn at any time. So in terms of our competitive position, as you heard from Ian, we are very much at the top end sort of the mid-tier nonbank players. So we are 1 of the few with completely global coverage on all the derivatives markets. And we operate in a world where we have significant barriers to entry. So we're 1 of the few who can offer global exchange membership. We have, as you know, to become a clearer, you need quite a meaningful amount of compliance oversight, client money protection. And you need quite a lot of IT infrastructure to run these client relationship, issuing a statement, margining. This is quite an involved setup, which creates a very meaningful barrier to entry. I'll give you an example around how long it takes to become a clearing firm on a given exchange. So in 2024, we joined the LCH London clearing house to do swaps clearing. And when we started the process, the clearing house told us, it takes on average for a bank to become a clearing firm between 1 year to 1.5 years to become -- from the moment you start the application to the moment to clear your first trade. So because we have a fairly agile IT platform and because of our sort of expertise in dealing with clearing houses, we are able to do in 7 months, which is to this date a record of how quickly someone became a member -- clearing member of the swaps clearer. But it's still a fairly lengthy process. So this is competition, takes a long time, would take a long time to replicate our infrastructure. What we also noticed, as you probably heard, is the banks and large banks are either exiting the market or also -- or potentially pulling back more to focus on their sort of the largest clients. And this gives us a lot of opportunity to gain market share towards institutional clients and within our mid-tier customer base, which is a traditional one. So this is a very -- this next slide is quite an interesting chart and evolution. That shows you the evolution of the number of FCMs in the industry over time. So you can see for the last 20 years, essentially been a halving of all the number of clearing firms in the market. And at the same time, what you can see is that to Ian's point, the markets are still growing and the amount of margin deposited by customers trading derivatives continuously increased over the same period. So essentially, this means that we've had a much higher concentration of player -- and the result of the consolidation means that this market is quite concentrated. We have -- if you look at the chart at the bottom, essentially 75% of the balances in the clearing world are held within the top 2 -- the top 10 clearing firms. So we're -- we continuously take market share. As you can see in 2022, prior to the ED&F acquisition, we had -- this is U.S. CFTC data. So we had $3.4 billion of client balances. In 2023, we grew to $6.9 billion and now we are at -- at the end of '24, we had $8.7 billion of client funds in the U.S. And if you sort of zoom on the top right of the chart with all the funds, you can see that the whole market actually decreased its funds during the same period. 2022 was a particularly high point because of the Ukraine volatility and margin recommence are very high, but the market has normalized and the balances of markets have decreased, yet Marex has increased its balances against that. So a good evidence of us taking market share in the clearing world. So this is -- this particular chart here will show you the evolution of the Marex coverage and our business over -- in geographically over the last few years. So you can see when -- in 2020, we were covering 48 exchanges, we are now in '24 -- 2024 with coverage of 60 exchanges, most of our recent markets, FMX is one of the newer market that we joined. We continuously add new markets. FMX is one. We were the first one to do -- we did the first trade on FMX. We filled the first trade on FMX. We joined the LCH. At the end of 2023, we did the Australian market and Singapore market in terms of coverage. So we continuously add exchanges to our platform and benefit from the scale that it brings us. In terms of regional sort of coverage, you can see that we've grown in every single region over the period. In the U.S., we've benefited quite meaningfully from the acquisition of the ED&F Capital business. And we continue to see quite a lot of opportunities in America. So we see opportunities in energy clearing. We see meaningful opportunities in equity options, OCC clearing and then obviously, repo clearing as it comes next year, and rates clearing in swaps are also showing good potential for us. In Europe, we are already quite well covered. This market is just sort of the home market of Marex. So we have extremely good coverage. We still see opportunities to continue growing where we have a particular sort of interest in the Middle East. We think there's a lot of opportunity there. The Middle East has quite a lot of new entrants in the market. A lot of players are coming to the derivative space. They were not hedging previously and they are looking to hedge more and more or using futures and options. The Aarna acquisition fits this particular opportunity. We closed it a couple of days ago, as Ian mentioned, and this is going to bring over $300 million of client balances to Marex in the Middle East. In Asia, we're a little bit -- this is -- we're still more at the beginning of the journey in Asia because we are covering 9 exchanges and we're adding them. We've added Australia and Singapore. We do feel that there are still meaningful opportunity as well for growth in Asia. In terms of the markets that we don't cover at present, so we have still in the major markets that we're not covering. There are very few of them, but China, India and Brazil, they will be on our road map at some point. We think there's potential opportunities in these markets. The clearing team has just started a small team in Brazil. We think there's a lot of interesting growth potential in Brazil. So this is something potentially on the road map for us in the near future. We have a very meaningful pipeline of new clients to -- as Ian mentioned earlier, we're very excited about quite a few mandates that are going to be coming on the platform that we've won and that are -- will be -- becoming new customers of Marex. So this is another lens to look at the growth of the Marex business and the Marex clearing business. So this is a function of -- these are charts showing the volumes of the exchanges and the Marex volume side by side by -- split by asset class. As you know, we are -- we're very much focused on diversification of asset class, not just simply on commodities, but just generally speaking, on all the financial markets as well. And you can see that the clearing volumes have -- cleared by Marex have increased meaningfully 77% CAGR, whereas the rest of the exchanges that we trade on are traditional markets have only grown by 10% in the same period. So we're well ahead of the market in terms of our volume growth. And that is also -- you can see the volume mix has shifted meaningfully towards some of the new asset classes and financials are now our biggest volume contributor for clearing. This obviously was also helped by the acquisition of ED&F which had a good customer base in these particular markets. We haven't seen any decline in our pricing or commission rates, but it's really the representation of a change in mix because we've added higher volume customers on financial derivatives. So I want to run you through 2 case -- sort of 2 stories around 2 clients, a fairly different type of customer. The first one is a trading firm, so this is a principal trading firm. We've historically had a -- in 2021, you can see we had an agency relationship. We are able to convert this customer to become a clearing firm. And we've had really good access to the senior management there. They really appreciate our -- the quality of service of Marex and how responsive we are. They were exclusively clearing with banks until they opened an account with Marex. And we've been able to gain more of their wallet and clearing, and we now are able to -- we've been able to grow this meaningfully. So we now clear them in energy, we clear them in rates, and we clear them in repos. And that's been a fantastic cross-selling story. And at the same time, we were able to grow our agency business with the same client. This is a very good example of our diversification strategy around product and market coverage. The second client was a -- historically is a trading house. It's one of the largest trading houses in the world. What they do as part of their core business is they move commodities around the planet, around the globe and they use derivatives, futures to manage their price exposure. So they are natural users of derivatives as part of their core activities. They were a very active agency -- energy agency customer within Marex. And during Ukraine, they found themselves in a situation where the banks were limiting capacity for clearing at a time when the market is needed, there were a lot of trading opportunities for them and the margins were increasing. So we've opened a clearing account with them at that time and provided the capacity that they required. And since that point, we've been able to meaningfully grow that business relationship. And we -- initially, we started in energy, which was a pain point for them, but we've extended to grains and then over time to iron ore and freight. And I would say now, they see us as a very valuable partner. We have access to CEO, CFO of the entity. And when they have a challenge that they need help with, we are usually their first call. So in conclusion, around our clearing business, as you can see, it's a very much a central part of the Marex business. It's a core part of what we do and our offering. We've really transformed the business over the last 3 to 4 years, and we've grown it meaningfully. We've grown the revenues by 4x to $450 million. The PBT has increased more than 6x. And as you can see, our margins have also expanded in the period. We are in a very unique market. We have a really good position, and we have -- we operate in a market with very high barrier to entries and reduced competitive intensity and where we can see the banks generally retreating from the space. We're continuously growing. We still have -- we believe we have a lot of potential for the future. We're excited about the future. And yes, it's going to be great. I think we have some Q&As now.

Alex Kramm, UBS. Just you mentioned pricing has all been driven by mix and onboarding larger clients. But I think in the past, I've heard you talking about actually having pricing power as the barriers of entry are getting higher. So maybe give us an update versus a year ago, where you're pushing price more? If you have a number in your mind where you -- what your pricing power and percentage maybe on a like-for-like basis could be? And again, if you think you'll use more pricing power in the future than you have in the past? So any update on pricing really is the question.

I think what we see in the pricing is really depending on the customer -- the type of customers we would -- you target. As we are growing, we are becoming more attractive to customers that are larger, and that's -- we're winning mandates to our larger clients. So as you know, the larger customers, who will have potentially pricing that can be a little bit more aggressive, but you compensate in size. But the rest of our market, sort of the midsized corporate markets, pricing power is still there, particularly there are some niche markets where competition is less sort of strong, and we're not seeing a reduction in our pricing power, should we say.

I mean the thing that I'd sort of add again, just thinking about how sort of some of the larger mandates have played out just because those are the ones I'm aware of and tend to participate in. What sort of clear to me is that the basis of sort of selection is not price. So somebody will look at this and say, so long as your pricing is within sort of what we regard as a reasonable band. we're not going to choose between the parties based on price. We're going to choose based on your ability to support our business and all of those kinds of things. So it's interesting that those mandates, which are very competitive, I mean you can be in a world where you're up against Goldman and Morgan and Citibank and SocGen and BNP and the clients aren't coming back to you and say, I'll give it to you, but you sort of need to hit this particular price. They're saying, if you're in the range, then we make the decision based on a different series of things, which is -- it's a different version of sort of your question, Alex, but it's a -- pricing is not the basis of sort of winning those mandates. And that's pleasing to us because it means you get paid for the service that you're actually providing.

Alex Blostein, Goldman. I was hoping you guys can touch on retail a little bit more. I know in your earlier comments, you mentioned it's a market that's obviously growing really rapidly and you interact with that market by clearing on some of the large exchanges, CME, et cetera. As you think about other ways you guys could monetize growth in retail, what would that look like? Are there outsourcing solutions you could provide to some of the subscale players, some of the brokers that are kind of participating and launching more products and features and derivatives for retail clients?

Well, let me give you a sense of what -- where I see the opportunity and then I think Thomas will have sort of more of the details of some of the things that we're actually dealing with. I mean what we are seeing -- so let me sort of start out and say, we don't have an aspiration to deal with retail directly not because it's not a good business just because it's not our skill set, and we just don't really know how to deal. We would need to develop a whole new set of skills around compliance and other things and sort of how to deal with it. What we are seeing though is companies who are retail aggregators. So basically people supporting their flow are completely uninterested in doing things other than providing product to them and managing the credit and other risk of that. And if they could get a plug that they could plug everything else into a firm like Marex and get everything other than product definition and build and dealing with clients, they would love that. And that's a massive opportunity for us because they -- even to the point of they don't even want to figure out how to get market data themselves. They'll say, we'll pay you for that. And we don't care. We got sort of this high-margin business. Just take care of that stuff for us. Now we understand it might be more expensive if it gets bundled with something that Marex is providing. But we don't care. We just want you to take care of that. And the more you can take care of that and the more you can just give us none plug -- literary that's how they talk, give us a plug, we would be sort of hugely grateful. So they see it as a massive opportunity for us in the sense there are many, many of them, and they're all looking for that. They don't want to figure out how to self-clear the stuff. They don't want to -- it's all a complicated world that just isn't what their expertise is. And we are seeing a number of those players actually approaching us. Now what we do need in order to be sort of fully effective is sort of we do need some product expansion into single stock options and some of the equity clearing products, which we are building out. And it's in part to ensure that we can be that one-stop shop for those set of clients. But you can talk to some of the people who have approached us more recently.

Yes. I mean what we see, interestingly, in terms of trends around the retail space as well are historically, if you think about Europe, in particular, there was a lot of CFD demand products and we see that those products -- the interest in those products sort of waning. And actually, people are looking to the derivatives market to the futures to take on some of these products and some of the retail demand. So they -- you can see some of these initiatives from exchanges. I mean, CME is -- I think we're on record today, around a CME initiative, for rolling sort of what they call our rolling spot contracts, so essentially perpetual futures, which is a product designed for retail specifically, which is there's no need to do the quarterly rolls, which is quite confusing for retail because the price goes up and down and no one really can get their head around that. And also the contract size is very relevant because you want to sort of micro size. Normal futures are too big. And so that's a demand we're very happy -- we're very excited to support. And that's coming from retail aggregators who want to move away from OTC markets, whether they are crypto, futures, they want to move to a regulated venue, a clear venue and benefit from that asset protection. And so they will move away from OTC CFD on to futures. And we see that demand is actually happening now. And that's going to be -- we think that's going to be a good driver of further activities in these markets with growing the market by themselves.

I mean it's a very effective way for retail to get the right kind of leverage easily, right? It's on exchange and it's listed, but they're getting leverage in the product. And you can see why the Robin Hoods of the world and Eitaros and Plus500s are going to their clients and explaining these -- the sort of futures and options a way in which they can actually trade. And you can see it in the volumes that are sort of coming through on to the exchanges. I mean it's not -- I mean things aren't growing at north of sort of 10% just because the institutional clients are trading that much more. There's a new source of flow, which I think is what's coming into the market. It doesn't feel like -- it feels like it's at the beginning. It doesn't feel like it's at the end of that particular trend.

Ethan Wilson at Fortress. Can you talk a little bit more about the pipeline that you mentioned and sort of what the complexion of that is? Is it a mix of large and smaller potential mandates? And then can you talk a little bit about historical like win rate or conversion on that? And is there -- and how do you sort of think about a target win rate if you're able to share?

Target win rate, probably a bit more challenging, but what we see is that we're having a very interesting evolution. If you think about the chart earlier about our client positioning, so we're still very strong in the mid-market. We are still winning a meaningful amount of mandates there. Some of them are not always competitive. So you're not really sure what your win ratio is. Sometimes you just go and originate on a bilateral basis, so having sort of statistics on that would be probably challenging. But what we see is that there are clients now that are talking to Marex that we would not have been speaking to them 2 years ago. And they are -- whether they are very large corporate financial institutions, we are having more and more relationship now and clearing with banks and also larger hedge funds and those have really meaningful wallets. And so we're quite -- and this is a very interesting evolution. And it also is possible because we've increased our product coverage. Okay, you can win a mandate for a large house because you're really good at one product, but that's usually not sufficient to make that decision to move clearing because it's such a heavy-duty sort of implementation. I mean just thinking about legal documentation negotiation, you can spend 7 months negotiating one legal clearing document. But now that we have all the products, so we can cover all the asset classes, then we become a very interesting alternative from the quality of the client service from our understanding of the markets. We can do things that others can't. We're very good at managing deliveries, for example, in some products, and it's a very unique skill set. And we can -- we will have the full coverage, which means that they will be able to make a meaningful investment in sort of the time and opening an account of Marex.

But I think that -- I mean, because it has a long sales cycle, particularly in clearing, you actually have quite a lot of visibility into your sort of pipeline. So again, I mean you'll correct me, Thomas. But I mean, broadly, historically, we've had about 150 clients in a pipeline that will probably close over 6- to 9-month period. And what we pay attention to is what sort of the initial margin associated with those clients. And that's typically -- I mean, hopefully, it's gone up. But so historically, that was like $750 million to $1 billion worth of [indiscernible]. So those is about what the numbers are now.

Yes. That's right.

All right. I think we probably have time for just 1 question because I think we've got a couple of presentations we need to get done. So -- or not.

Just a quick one. Just wanted to ask on Brazil. You mentioned you had a small team there, article this morning in the journal, just about to kind of pivot from China to the Brazilian markets in the tariff environment. I guess the question, the team you have there, what's the kind of time line to penetrate that market from a revenue perspective or do you need to think about inorganic opportunities? And then when you think about the size of that market and the competitive dynamics, any way to kind of frame out the opportunity there?

So yes, I'll talk about the organic, and I'll let you do the inorganic. On the organic side, there are 2 types of flows for Brazil. So you have the Brazilian market itself -- the Brazilian customers who are looking to access to global markets and then this is our initial sort of foray and sort of work because this is already made product, and we're already out in the market there. Simple interesting statistics, for example, Brazilian is the fourth largest sort of market for hedge funds sort of investment. So there's a lot of speculative money in -- invested money in Brazil that are trading global markets. And so we have already made product, and we have people on the road already sort of selling the Marex clearing product and offering. For the access to the Brazilian market itself, that's going to be a longer lead time. And so this is something that is on our horizon. We're looking at the best way to structure this. I don't think we've made a decision yet. The market is quite -- I mean there's quite a lot of clearing firms and it's a very unique market in Brazil. It's one of the only markets where you need a custodian bank to hold your cash and the clearing house is separate and doesn't hold your money. So it's a very unique setup, and we need to get comfortable with how that's going to be working within the market.

Yes. I mean, all I'd say is I think the opportunity is servicing Brazilian cash largely offshore that's going to want to access the existing sort of set of markets as opposed to sort of competing with Brazilian firms locally. So that's as far as we've got so far. All right. Why don't we sort of move on? I think we've got Agency and Execution.

Thanks, Ian. Thanks, Thomas. So I'm Paolo Tonucci. I've been with Marex for 7 years. I joined as the COO. And for a period, I was the CFO, and I'm with you today as the CEO of our Capital Markets division, which is sort of essentially our financial products as well as being responsible for group strategy. So I run Agency and Execution with Matt, who I'll hand over to.

Thank you, Paolo. I'm Matt Thistle. I have over 26 years of experience in the industry, including over 14 years with Marex. I started my career at Bank of America in the Global Exchange Arbitrage Group, where I went on to trade crude options for several years prior to leaving the bank to go found my own trading firm. I joined Marex in 2011 to start our global crude options execution desk, which I'm proud to say, is still thriving today. In 2019, I was named Head of Energy for North America, which led me be named Global Head shortly thereafter.

So Agency and Execution is actually now our largest segment by revenue, and that follows a few years of very strong growth. Some of that's driven by the acquisition of ED&F and we'll talk about that a little bit later. And then some organic and inorganic acquisitions, which have extended our product capabilities. Across Energy and Financial Products, we now have 670 employees. We generate around $700 million in revenues. And our rate of growth is around 55% on average over the last 3 years. And that's across both energy and financials. This service has generated $109 million in profit before tax. And that has generated an improvement in margins by around 3 percentage points from 16% to 19%. And we'll talk about margin a little bit later because, obviously, it's such a large revenue segment, the sort of level of profitability improving is going to be determined at some meaningful level by the way that we're able to expand margin. By its nature, it is a low-risk business. It's activity, which doesn't take market risk, doesn't take credit risk, and therefore, has a lower level of capital intensity. But it is equally a labor-intensive business, and you'll see that the sort of metrics around productivity of front office employees is very important to us. We're essentially connecting buyers and sellers, and we take a commission. So we provide access to liquidity through 3 forms of execution. The first is on an agency basis, and this is sort of typically introducing buyers and sellers. For most of that activity, it's actually quite high-touch and relatively complicated. If you have sort of simpler needs, if you're just buying futures or if you're executing in more liquid markets, there will be other execution channels that are more relevant. But if you have a complicated transaction, a multi-leg transaction, something that may involve products across different exchanges, this is where you would benefit from using our services. And additionally, if you're looking for large liquidity, so a lot of our activity is in blocking trades. Match Principle is similar to Agency business insofar as we're not taking a position, but we do face the clients and then there's simultaneous settlements of the purchases and sales. And that's really a function of market structure for some of those products. And then the last way in which we support our clients in this segment is by giving them direct access onto exchange. And that can be either through third-party services or it can be some of the products that we built ourselves for matching. We're largely agnostic to the way that clients execute, and we do recognize that there's a sort of progression towards more electronic execution. So we do invest in platforms that will support that. So I'll talk about the rates business or rather the securities business. Matt will talk about energy and commodities. So obviously, we -- by background, we are -- we were more focused on energy and commodities. And we were really conscious of the fact that adding financial products was going to be an important part of the sort of growth dynamics of the firm and some of the recent acquisitions have enabled us to have a meaningful footprint in financial markets across a reasonable number of products. So we're now able to service clients in equities, equity derivatives, fixed income rates, FX and more recently, with the acquisition of the TD Cowen business in Prime Services. We have 42 desks within the securities part of our execution business, and it generates around $400 million in revenues. It is -- it's got a global footprint, large teams based in London, New York, some other locations across the U.S., Paris, Hong Kong, Dubai, Singapore and Sydney. And that's very important because it also allows us to provide 24/6 access for clients. So they can leave orders and sort of rely on the global teams to execute those orders to fill their orders. The Prime Services acquisition, again, is very sort of conscious decision to extend essentially a service which is quite similar to clearing into cash and into securities. We've been very complementary to the execution businesses that we had already established and it's very complementary with clearing as you'll sort of -- as you'll see in some of the numbers. But as Thomas has already sort of referenced that where we've seen the largest growth in -- on the clearing side has actually been in financial products. So this is very complementary in terms of the client set. So I hand over to Matt to talk about the energy franchise.

The -- our energy franchise is a well-established mature business within Marex. In recent years, we've successfully achieved meaningful growth through optimizing the business, leveraging our global presence much like Paolo described, in the securities business, this is a high-touch execution business that largely blocks trades on exchange. However, we also intermediate bilateral transactions where counterparties face each other, but never taking any principal risk. And away from a ranging trade between buyers and sellers, we also provide clients market insights and data products leveraging our expertise and dominant position in several energy markets. The business covers a wide range of energy and environmental products, primarily in financial instruments, but we also transact in a variety of physical commodities. We have a large and diverse client base comprising over 1,300 counterparties that include various financial institutions, including banks, hedge funds, CTAs in addition to trade houses, producers, consumers and utilities. We enjoy a meaningful market share in many of the asset classes we transact in, including our European gas and power markets, our U.K.-based fuel business and our market-leading U.S. environmental team. So the energy business is a global footprint that includes 40 desks. Most of the client activity is blocked on exchange, primarily ICE and CME, but we also transact on EEX, ASX and Nodal. We've grown and continue to grow the business over a wide geographic range, while simultaneously growing our client base in diversifying across asset classes, not only across the barrel but environmental products as well, resulting in nearly an even split in oil products versus other energy and environmental products. Our business had historically been Europe-centric, however, we've invested in the U.S. and now count the North American market as 1/3 of our global business. Going forward, we expect to continue to not only expand the North American footprint, but also our other geographic ranges as we continue to see opportunities in the environmental space in addition to transacting in physical materials. As Marex has grown, and we've gained additional functionality, we've been able to offer clients the ability to leverage those capabilities across the platform, providing considerable cross-sell opportunities. We continue to add new hires in areas which we have gaps, which also allows us to expand our offering to all clients across the platform. So earlier, Ian spoke about our margin expansion potential and agency and execution has its part to play in that, which Paolo will come back to later. Since I took over the energy business at the end of 2021, my key focus has been to drive productivity in support of group profit growth. And as you can see, we've more than doubled revenues since 2021 with only a modest increase in headcount resulting in an average productivity per employee of $1.4 million. And so while there is no industry-wide statistics available, our experience in markets over the years strongly suggests that this level of productivity is certainly above average. We've achieved these results by instituting more rigorous KPIs, maintaining discipline around costs, effectively managing underperforming desks all while growing our larger desks, where we enjoy higher levels of market share productivity and profitability. As I previously mentioned, most -- the majority of the energy business activity is roughly 80% is blocked on to exchanges, largely comprised of CME and ICE transactions. This slide provides you with some more detail on which exchanges and markets we operate on, so you can track it more closely. It also shows that there are 27% annual growth -- 27% revenue growth since 2021, far outpaces the broader markets in which we operate. And our business is hard to be precise about market share statistics because not all activity is on exchange, but this is the clearest indicator to us that we're gaining market share. So a couple of client case studies. A couple of examples that where we've been able to increase and grow client activity. In the first example, we have a client that's a regulated utility. And given the regulatory status, it's required to transact in financial instruments or hedging strategies. Now often, the client is transacting in off-exchange, bilateral transactions where they're visible to the counterparty. Previously, when a client used the competing broker, the counterparty was able to see their name, ultimately impacting market pricing, negatively affecting the client as they were able to determine that those hedging process have started. Marex offers complete anonymity, as we can accumulate those instruments in our name using our balance sheet as we face the selling counterparty directly and then immediately back to backing into the buyer's accounts, protecting their name. This is a multimillion dollar per year client in a growing sector where we expect to be able to replicate this with other clients. And the second example, and we have a state-owned European utility who originally utilized our traditional execution services, and as our clients' needs grow, we were able to successfully cross-sell our clearing services into them, leading to a much larger share of wallet. And as you can see, the chart shows the revenue growth. Just another example of cross-sell opportunities, which we continually identify and capitalize on. There's just 2 examples to highlight our ability to leverage the Marex's platform to successfully service clients' needs. Our suite of services also provide a competitive advantage to our colleagues, which plays a significant part in not only retaining staff, but allowing us to attract top talent and producers within the industry. So before I hand it back to Paolo, to summarize, the energy business is a well-established business that continues to thrive within the broader Marex platform, continues to perform at high levels of profitability in a very low-risk environment, is repeatable, commission-based business as described in previous slides. We continue to find opportunities to expand our product set and grow our client base in support of our firm-wide overall growth objectives. Paolo?

Thanks, Matt. So I'm going to talk a little bit about our financial product offering. As I said, it's a very conscious decision to broaden away from the sort of commodity to the traditional sort of commodity focus. And as you saw in some of Thomas' numbers, we're having success with that on the clearing side as well as the agency and execution side of the business. Our business is all to all. So rather than being an interdealer broker-focused business, we are servicing asset managers, trading firms, hedge funds as well as corporates. And there's some interbank activity that sort of mixed into that. But the focus is not on competing in the products, which have been sort of the most meaningful and the most profitable on the interbank side, but servicing a very wide range of clients. And we think that sort of market structure changes are helping that just with the market is becoming more fragmented in terms of providers of liquidity. Those providers of liquidity are those firms that we're tapped into. And in many cases, we have a multiservice relationship. The volume growth has been very, very obviously significant. Market-wide, it's growing about 11% a year. I think Ian sort of mentioned that this is one of the higher volume growth product. And our own growth is, over the last few years, has been 145% here, but that is obviously off a low base. But we are now at a point where we can service our clients with a pretty wide range of products. So as I said, equities, equity derivatives and now equity financing on the credit side and corporate bonds, as well as structured products and some trade facilitation through rates and government bonds and FX where we've had a relatively small presence, and you'll -- and we'll talk a little bit about the Hamilton Court acquisition later, but that will sort of extend our capabilities on our coverage in the FX space. Sort of most recently, obviously, we've added, albeit a little over a year ago, the Prime Services platform. So given the newness of that platform and given that we are seeing real momentum in that business. So I thought it's sort of -- it's worth just giving you a sort of reference point, Prime Services for us at a glance. So the total assets under management that we have is $25 billion. We have about 500 clients and those clients are sort of typically hedge funds that have between $25 million and $500 million of assets under management. That's not exclusively the case. But that's the sort of core of the business is servicing sort of mid-tier funds. Once they get above that size, then we would, in many cases, actually recommend that they add an additional prime broker or at least try and look at adding one of the sort of larger group of investment banks. We cover hedge funds, investment advisers, some trading firms, family offices, banks and broker-dealers. And it's -- they typically are relatively low-levered. So if you look at the total amount of debits, which is the amount that they're sort of borrowing against their assets, in total, it's around $4 billion. And the highest levered of our clients is around 2x leverage. So it's not -- this is not a business where we're providing a lot of leverage to highly levered hedge funds. And I know that, that sort of would be a natural concern if that was the sort of driver of activity. We also provide outsourced trading capability and the outsourced trading capability has a slightly different client base. It tends to be larger hedge funds. So those typically between $50 million and $1 billion, and I would say sort of weighted towards the higher end. These -- again, these are clients that do not want to invest in the infrastructure for execution of their transaction. So we essentially execute their transactions on their half, and it's a very predictable and stable source of commissions. So it's both sides are sort of very good from a stability perspective, you tend to see commissions generated each day on a very sort of consistent basis. We also are able to generate some amount of profitability and revenues from the financing that we provide. So it's sort of the typical daily sort of revenues or some combination of commissions on the transactions that we're executing in a very similar way to [indiscernible] then some amount of net interest income. And Rob will talk about the impact that this has had within our net interest income numbers a little later. So some of this is similar to the competitive dynamics that we see on the clearing side. The sources of competition, the main competitor groups are investment banks, firstly. They tend not to have agency businesses, so the pricing is proprietary. For a lot of clients, that's the sort of immediate differentiator and the sort of value in being able to transact through Marex is that you're getting best execution. And we are not providing pricing. We are just charging a modest commission for finding that liquidity. The market makers will compete in some products, but it's sort of typically the most liquid products, and it's on the sort of relatively simple execution rather than the sort of multi-leg execution or execution where there's some optionality involved. And a lot of the time, this is just algorithmic execution. But there are competitors in some products and their clients in some products as well as the liquidity providers. The brokers and particularly the sort of interdealer brokers, we do see in some markets, but there's sort of been a primary focus is interdealer market, there is some agency activity. We see that in a select number of financial products and also in energy. And then obviously, the exchanges provide access for direct execution, but that tends to be in relatively simple and relatively liquid markets and also in quite small size. So what we are able to offer is a single point of -- it's a single point of connection for clients. It's sort of important that and I think sort of reinforces what Thomas was saying, it's important that once you have established some type of relationship, you're able to offer a very broad number of products. It's important to some clients when they're initiating their activity with you. And with others, it's important in sort of reinforcing your position in their client group. We service real money accounts, we service hedge funds, we service corporates. In many cases, they're looking for not just a source of liquidity, but the type of very bespoke service and very attentive service that we'll provide. We will provide access to many pockets of liquidity. So in some markets, that's very important because you're not going to be able to find that liquidity just on exchange. We do leverage our investment-grade rating, which is important to some clients, but it does allow us also to provide balance sheet either through sort of clearing balances or in terms of some of the securities clearing. And as we've talked about, we've added a prime brokerage capability and an outsourced trading capability. We are developing other electronic venues, and we recognize that that's sort of an important part of the sort of development of this space. So I'm going to give you some case studies, some examples of how we've been able to leverage the relationships that we had in existence with some clients. So the first client is a large U.S. financial institution. We were initially executing largely in energy, some amount in metals and over the past few years as we've added capabilities in equity derivatives, as we added capabilities and rates and government bonds, we are seeing that we're providing a much broader service and revenues have -- are up by nearly 5x. The second example is a large multi-asset class asset managers. It's a company that is a household name that you would all know. Again, initially, we were executing largely in energy and energy options. But as we've added capabilities and equity options and in a wider range of futures, particularly for interest rate options, we've been very successful with winning more of their wallet. And again, that's one where we've increased our revenues nearly fivefold. And then the last example is sort of interesting because it's a corporate. This is a corporate that is a -- it's a well-known -- certainly in Europe, it's a well-known energy provider. And unsurprisingly, our sort of initial activities where they were on the energy side, where we were providing execution for their hedging. But we've extended our relationship and we actually now provide a range of interest rate hedges as well as supporting their debt program. So I wanted to just sort of conclude with the -- this point around margin because we recognize how important that is. We have -- we've grown revenues very quickly and we've grown profitability very quickly as well. We are seeing that as the businesses, that we have integrated, become more settled and as the desks mature that we are able to extract higher margins. We've also been able to, as Matt's talked about, reorganize some of the desks, we focus on those desks where we're able to exercise some type of edge or advantage and that's been an important part of improving performance. And we're now at the point where I think we are close to being able to have achieved our sort of initial target in terms of margins. So for the fourth quarter, our margins in Agency and Execution were 19%. So that obviously represents progressive improvement. And we would expect for that to continue. I think we've talked about, in the medium term, being able to generate margins in the sort of mid-20s. So I think with that, we open up for questions.

Just a very quick one, I think, quick, on the energy side, that slide where you showed your revenue breakdown by exchange. I think that was new. I don't think I've seen that. It was like 60% ICE and then CME very small. So just curious why that is? If you look at the 2 exchanges in terms of their revenues or their volume, right, they're certainly a little bit closer to each other. So I'm just wondering if is it a client base, is the product set or is it just a sign of the regional heritage of your company and the big opportunity to be more present in their market and therefore, in the U.S.? So maybe just talk about both CME versus ICE from your perspective.

I think it really depends on what products you're transacting in, and a lot of products are duly listed. And so depending on where the client derives their exchange, they would switch between one exchange or the other.

So I shouldn't read it as an opportunity for you to be bigger in the U.S. or bigger at CME?

Well, yes, I think we have those opportunities depending on products. I mean we have a large exposure in a lot of oil products, which were predominantly CME. ICE has taken some market share, so that may have shifted. But some of the environmental products, also ICE, has been active in CME's constantly listing new contracts. There's some new Canadian contracts that will be listed on CME, but we see opportunity in as well.

I think given what you sort of, I think we'll sort of look into [indiscernible]. Hopefully, it's a good opportunity for us. Alex?

We'll go in the same order, I guess. I wanted to go back to the prime brokerage business. I think in your earlier comments, you said the TD acquisition or the Cowen acquisition rather was a little bit slower out of the gate and things are finally kind of starting to ramp. So what took a little bit longer, where are things you feel like kind of ramping? So kind of maybe help us kind of with that bridge. And then more thematically, Ian, I know you talked about the changes in kind of bank capital requirements and we're still yet to find out what those would look like. Won't really matter from a creditworthiness perspective in the clearing business, but could that impact your competitive position relative to the banks in prime brokerage because those tend to be just a little bit more balance sheet intensive in terms of size. So there's a relief on leverage and SLR and things like that, does that make the business a lot more tougher for you guys to compete in?

Yes. Well, let me try and sort of cover the progression with that acquisition. We closed the acquisition on the 1st of December '23, so we've now owned it for 15 months -- owned that business for 15 months. Initially, it moved over with, I would say, very limited positive momentum. The business had been sort of off-boarding clients within TD. It was sort of part of the reason for them wanting to sell the business that they didn't see those as their sort of core clients. And that's sort of a theme that obviously, runs through a lot of our businesses that the banks are sort of reducing the client set that they're willing to service and we're the sort of beneficiary of that. But that momentum was quite noticeable that lost -- that lack of momentum in the first quarter was quite noticeable. It's a high fixed cost business. So it's not a business where you have high payouts in terms of revenue-driven payouts. You have a reasonably high fixed cost because you've got to have staff to support all of the infrastructure, the sort of client service, the execution. So initially, we weren't seeing very high levels of profitability. We were seeing somewhere around what we what we had modeled in our sort of acquisition. And then on top of that, you layer the integration components, which are quite complicated. It takes -- it took us about 6 months to move all of the infrastructure, even though it was relatively isolated from other TD infrastructure, you still have to move it into your environment. It took about 6 months. We've added some salespeople. We've, I think, been able to turn that momentum with our clients. And so the pipeline very much stronger than it was when we first bought the business, and we're adding clients regularly. The fourth quarter really started -- we really started to see the benefit. You see it a little bit later actually just in the improvement quarter-on-quarter, but it's been very sort of progressive. And because it's a high fixed cost business, it tends to be very sensitive to revenues, and so margins have improved quite dramatically. So it now feels like it's fully integrated and the infrastructure that we're able to deploy works across clearing, where we're internalizing. We've done a couple of other things, which I think are important to improving margins in terms of being able to provide stock lending and so internalize some of that activity, stock lending, stock borrowing as well as repo. It somewhat talks to your point of balance sheet usage. Ours is relatively low balance sheet. Where we do provide that type of service, it's often particularly in areas where it's very -- there are very high volumes. It will be on a sponsored basis. And something like mandatory clearing, I'm sure Thomas will talk about this later, mandatory clearing of treasuries sort of is a benefit for us. It puts us on a more level playing field. We can get somewhere close to that with the sort of current sponsorship arrangements that we have. So we don't really see -- we've not really seen a sense of our edge being eaten away by the banks. I mean most of the sort of client acquisition is really about these clients not being fully serviced by the banks. And we're able to sort of do so in a way which is profitable for us, but may not hit the threshold of the Goldmans, Morgan Stanleys.

Yes, I think just in terms of some of the lessons for me around this, this was one where we're acquiring a genuinely new capability that just took longer than something which is a bolt-on, but is much more adjacent. I think the sort of question of momentum is sort of, again, undervalued when you sort of think about sort of these acquisitions. And certainly, when you talk to management, they're not telling you, oh, no, we've got sort of an issue with sort of momentum in the business. So it was a little bit slower, but we're certainly not seeing any of the sort of concerns around this. And actually, one of the leading sort of banks announced, I think, just yesterday that they're getting out of outsourced trading. So we're not -- we see opportunity. We don't see competitive threat. I mean obviously, it could play out differently in the rest of the year. But that's certainly how it feels to us at the moment.

We'll keep the order going. I wonder if you could just flesh out the North American energy opportunity a little bit more. You gave the example of penetrating one utility and looking to increase penetration there. What other corporates do you see penetration opportunities? Maybe frame out are you 10%, 20% penetrated to what you think about is the overall opportunity or are you further down the line? And anything you need to do to accelerate the penetration, whether it's acquiring -- rolling up new desks or just blocking and tackling with what you already have in terms of boots on the ground?

Well, I think you'll see a combination of both. We have some gaps in the power areas, say, West Power or ERCOT, where we don't currently execute on behalf of clients. And that will be a growth area we look to build out the capabilities, which will dovetail nicely with our clearing capabilities as those clients in the clearing sector, hopefully, we plan to convert them into execution customers, right, not just clearing customers.

And I think it's just a general theme. We look at the opportunities set in the United States, I mean we're just always pleased, overwhelmed by just sort of the scale of what it is. And as we sort of built out the capabilities of the firm to a point where we're genuinely able to compete with anybody, I think that, that opportunity to grow in the U.S. over the next 3 to 5 years will be extremely substantial. We will take one more in this section because I'm getting all the move on signs.

Kyle Voigt, KBW. Just in terms of the margin expansion and how that looks in kind of the breaking down the components and drivers of that getting into the mid-20s percentage range over time. I guess how much of that is coming from improving productivity of the existing brokers in the platform? Can you talk about the margins that you're generating on those higher-producing brokers versus lower-producing brokers? Like how important is that trend kind of moving production up per broker? What do the comp ratios kind of look like there? And then how much is driven by, as you kind of mentioned on the Prime business, it sounds like there's a lot of operating leverage potential there, how much of that is just really driving more scale in the Prime business?

Sure, shall I start with -- I mean, I think within the security side, there's been a significant improvement in productivity. So we're now close to $1.2 million, $1.3 million per producer, and you can get to 20% margin at that type of level or a little bit. You're not going to get to 35% margin, but you can get over 20%. Within our numbers, certainly for '24, we had quite a lot of investments that where we're just absorbing cost and that obviously was compressing margin as well. I mean we've got 42 desks and something like 1/4 of those desks were not generating a profit in that period because they were -- they really represented investments in capability, they needed some technology. So getting producers sort of more uniformly up to over $1 million is very important. That's then -- and you'll get to over 20%, if that's the case, given the way that we structure our contracts, and this is true, I think, across energy and securities. The sort of icing on the cake or the sort of extra bits of margin expansion are going to come from some of these more on balance sheet activities. So the combination of Prime brokerage, stock lending, some of the repo that we do on balance sheet that sort of complements our clearing offering. So that sort of will take us, I think, into the mid-20s. Again, I mean, it's very -- to a point, it's very revenue and sort of volume sensitive. I think we're getting to that sort of optimal point beyond which we wouldn't be able to expand margin all that much. And I would say those types of margins are little bit less than you would see in clearing, but it's sort of that type of level. Once you're at scale, that wasn't true for most of '24.

Yes. And I think if you look at the disclosure that you get from the brokers of TP ICAP [indiscernible] and other areas, I mean they actually really struggle to get 20% margin. So I think what Matt has done by being sort of so relentlessly focused on sort of profitability, not dealing with sort of weeding out underperforming desks, all that kind of stuff, it gets you to a point where you're sort of 20-plus percent in the pure agency parts of the business, that's probably as good as you get and better than any of the competition, and you want to maintain that and expand that into sort of additional products. And then sort of as Paolo described, as you see a shift so that an increasing part of your profitability is coming from the benefit you have of being able to do more activity on the balance sheet, which is really always to my mind, being the opportunity in Prime brokerage. I mean essentially, we bought a Prime of Prime business. And now you're taking a Prime of Prime business and some portion of what it does, you're now doing on balance sheet and capturing the full economics of that rather than just handing that on to Goldman and Morgan and UBS. That's just going to lift the profitability of the overall sort of capability in the firm. All right, in the interest of not being too late, we'll move on to market making.

We'll make it snappy, make it quick. Thanks, everybody, and I think it's still good morning to everyone. My name is Simon van den Born. I joined Marex in 2011, and I'm the President and Head of the Market Making business here at Marex. So we appreciate you just taking a little bit of the next 20 minutes-or-so and that opportunity to share with you the products we trade, how we intersect with clients and our performance and growth metrics. Additionally, may I introduce you to Bastien, who joined us in 2019 and runs our Energy Environmental's division for us.

Thank you. So I'm Bastien and I run the energy and environment at market making businesses under the brand CSC Commodities. CSC Commodities, I founded in 2013 and Marex purchased it in 2019 when they wanted to expand into the energy market. It was cheaper to do it inorganically. Joining the firm gave me access to a much greater pool of liquidity and being part of a bigger organization and we could grow much faster. I've been here for 6 years now, 5 years, 6 years. we've grown by about 500%. So I can say it's been a tremendous success, best decision I've ever made. And CSC is not a broker. We trade as principle with corporate counter parties trying to hedge the exposure into the energy market. We are a flow-driven business. So we take risk, but we carry no directional position. The trading strategy typically does not involve predicting the direction of the market. We trade instead through asymmetry of information, dislocation, arbitrage opportunities, all the things that market makers love. Simon can give us a better picture of the trading market.

So thanks, Bastien. So together, we run the Market Making division, which as you can see, generated over $200 million of revenue and $66 million of PBT in 2024. Our teams are specialists, provide access to 57 different asset classes across metals, energy and agricultural products, and that list is continuously growing. And using a well-managed risk profile, not only are we running a circa 35% margin business, we're able to generate 98% positive P&L weeks in 2024, all whilst maintaining a fairly low VAR. And we're proud of the business we've built. It's well diversified, growing product and global footprint, and we are set up to service both large corporate household names, certain institute -- financial institutions and traders alike. And as Bastien said, we trade as principal to provide essential liquidity direct to our clients. Our business model is very much focused around providing a bespoke service, so our clients can benefit from our extensive market knowledge and interconnectivity. Alongside this, and in recent years, we've also developed our own electronic execution platform, something -- we will expand on a little bit later. So as we move on, we wanted to demonstrate that Marex operates in noncommoditized, less liquid instruments where specialized market knowledge is key. And whilst many know us for our legacy metals business, we continue to establish our footprint across all sectors, be the agricultural, energy and financial markets, and in particular, with our expansion into environmental markets within this energy sector, this is fast becoming a relevant business for us. And to give us some detail on this, I'll hand you back to Bastien, who will talk about the growth and opportunity set as we see it.

Thank you, Simon. So in energy, rather than just focusing on crude oil that is very liquid, electronified with tight trading spreads, we have built capabilities around the refined product complex. We are focusing on the less commoditized underlying where we can add the most value to our customers. In that segment, there is a much greater need for expertise and the knowledge of the product, given the vast world of specification and blends will drive the volume rather than just being the best price. And of course, in that space, that's where we found the most asymmetry of information, dislocation, arbitrage opportunities where we like. A few years back, we've added environmental to the offering, and it's now become the central initiative of our growth plan. We see every day, with Simon, that all of our customers have to face some themes related to climate change. They have challenges to face, either through investor pressure or because they are facing changing regulations. We want to build a business around these themes to cover all aspects of the energy transition. We offer 4 product groups that aim to either have an alternative to the traditional communities we sell or if there is no alternative available to offer offsetting solutions so the customers can operate on a net-0 basis. So the 4 groups are emissions in compliance and voluntary; renewable power from solar, wind or hydro; the biofuels from crops or used cooking oil; and biogas from waste or manure. We will talk a bit more about this later. Now let me hand back to Simon, so he can say a few words on the diversification of the business.

Thanks very much, Bastien. So as you can see, we built this diversified business delivering healthy revenues in all 4 segments. And it is that, that's the cornerstone of this approach. The ability to be, and you'll hear me say this a couple of times, a one-stop shop solution for many clients, offering a breadth of coverage is the compelling story. And at the bottom here, you'll see many recognizable names and specialists in individual sectors. However, it's our ability to provide clients with access to all these asset classes that's the differentiating factor. So as we've said in a couple of the earlier slides, the increasing diversity of our asset classes has led to what we believe is a resilient business model. And as we break it down into the granular here, you can see how many, over time our business have become increasingly diversified, both in terms of products and in terms of revenue. Also highlighted here is that driven is the CAGR of 14% in our revenues. As Marex grows and expands its footprint geographically in Market Making, we align our services with that growth. where we see specific opportunity sets, be it in the U.S., Middle East or Asia, we will look to build a foothold in that region. And in a world that is becoming more regionalized, direct access to clients is essential and Marex's expanding global footprint allows us to lever that reality. Moving on to Slide 52. We wanted to discuss the revenue distribution. And as we've said at the outset, we are a client-driven business. Our model is very much built around client flows and liquidity provision. Both those lead to good client outcomes, and consistent revenue streams. And in this graph here, we show the revenues are skewed towards the right-hand side, demonstrating that our average positive revenue has increased, whilst our average negative revenues remain unchanged. And at the bottom, you can see that the average revenues have also increased, and we have maintained our high percentages of positive days. And these are the outcomes of having a client-driven model whilst maintaining a diversified risk profile. And it is that rigorous attitude towards risk management is the bedrock of our model. And as the data shows, we've been able to increase our revenues, whilst again, only seeing modestly increasing our VAR metrics. As I spoke about a little earlier, we all live in a technology-driven world and that is forever evolving. And in this world, we're excited to offer our clients access to liquidity via our in-house trading platform, Neon. This service provides Marex with a price streaming platform that brings both scale, revenue as well as heightened efficiency. And given our principal status and dominant market position in metals, we initially rolled this out in industrial and precious metals products. But following sort of positive feedback, we'll be adding additional products to this platform over time. And as we demonstrate here, through growth in volumes, we've been a rapid rise in adoption of this platform over the past 2 years. The number of active clients in this platform in 2024 alone went from 15 to over 100 with a healthy pipeline, a large potential opportunity set. It's often said technology is a high-volume, low-margin products, but in metals in 2024, we averaged improved revenues of 5x versus our straight execution platform. Moving on to this slide. We thought we'd give you a view of the client distribution network we are proud to deal with. On here, you'll see many household names in the institutional and bank space. You'll see in certain sectors, some of the largest end producers and consumers whilst at the same time, you'll get some names that represent our geographical spread, whether it be [indiscernible] in the Middle East, BlackRock in the U.S. or the largest Chinese SOEs, we are dealing with an expansive client footprint. If you're a U.S. institutional investor looking to hedge your battery ETF, you come to Marex. If you're the largest solar panel producer in China looking to hedge of silver content, you come to Marex. If you're a large Swiss foods conglomerate looking to sort of hedge your aluminum exposure, you come to Marex. And if you're the largest infrastructure project in the Middle East looking to offset your carbon footprint, you guessed it, you're coming to Marex. And what is evident to us that it is that one-stop shop solution is what clients desire. And the ever-evolving landscape has led us to take advantage of that. So over the next few slides, our desire to give you some examples of how we interact with our clients in certain product segments. I'll give you one in metals and Bastien will give you a couple more on the energy and environmental space. We have up on the screen here, an example in the metal sector. We offer fixed versus floating average price swap contracts, a bit of a mouthful that one. These contracts allow producers and consumers to hedge their price exposure by locking in a fixed price and setting that against the metals monthly settlement price. This is a bespoke service which helps clients manage their own price risk efficiently, ensures us both constant connectivity and, more importantly, regular income stream as a result. But maybe more interesting, I hand over to Bastien, and he can give you some examples in the environmental space.

Starting with oil refining. Thank you, Simon. So this is a picture of a hydro scheming refining column. It's the simplest refining process that exists, it's simply atmospheric distillation. So if you think about oil, what you think of is a black sticky, maybe may smelly paste but when you think about your interaction day-to-day with oil products, you think the clear liquid that you used to feed your tank with or the plastic thing that you use for cooking or the gas coming out of your hub. That means there is a transformation process at work. And this is around the transformation process that we can trade. The transformation process itself offers the dislocation opportunities, the market making opportunities. We are achieving the 5 product groups they are fuel oil, distillates, naphtha, gasoline and the gases. The customers typically come to us with a very precise set of specifications that will feed the reality of their physical businesses. For example, they will say what sulfur content they want, what viscosity, where they want the delivery, when, what the ship size should be. And because we have excellent access to information, because we trade every single part of the [indiscernible], every step in the refining process, we can produce the price by finding the path in the refining cycle and in the supply chain of the product. You can offer a bundle price to customer and disassociate and recycle the risk in the background. Some of those products, you'd be very familiar with. For example, kerosine is for aviation; fuel oil, gas and diesel are used for road transportation; naphtha is the basis for the petchem industry; gases are what the plastic are made of. I'm saying this because the range of potential customer is very wide. The reach of this business in the real economy. Anyone who touches the energy market is a potential customer, and that gives you a sense for the scale and the potential for growth. Now let me give you a second example, and we see how we can cross-sell these products with the environmental offering. In this example, the customer wants to hedge a planned shipment alongside the route. So you want to send something from A to B. Well, that does not exist in the broker market. It has 3 components; the freight, the bunker fuel and the emissions. If you want to trade the freight, it trades on a time charter basis, not on a voyage basis. If you want to trade fuel oil, you need to know how much you need. If you want to trade the emission, you need to know how much am I legally obligated to offset. So the trading desk can produce a price by using 3 different capabilities that exist within market making, bundle them into a single trade for the customer. One, the freight cost. With the knowledge of the distance alongside the route and the ship speed, you can make some assumption on the weather, on congestion at port and you know the price of the time charter. You know how much it costs to hire a ship for a certain amount of time, but you can then calculate how much it costs for a distance. The bunker cost, you just calculated the time of sailing, you know the fuel consumption of the ship at a specific speed. Well, you know the price of the fuel, you can calculate the cost to fuel the ship for the voyage. And then the emission offset, you know the price of the offset. You know which type of fuel and how much you're going to burn, so you can reverse engineer how much CO2 will be produced. And also you know where the ship is departing from, where it's going to. You know the legislation in these 2 ports, so what is the bare minimum that can be offset for the voyage to be compliant. So all 3 products, ship charter, bunker fuel, emission offset can be hedged separately within market making. So what we are doing essentially is selling more product to the same set of customers. We have a cross-selling approach that leverages of the platform diversification and that feeds trade flows to different parts of the business. I think this coverage across the segment is our main unique selling point. Now allow me to hand back to Simon for a few words of conclusion.

Thank you, Bastien. So these are the types of transactions where Marex can intersect a very wide spectrum of clients, as Bastien said, be they corporates, financial institutions, CTAs alike. And through this Market Making platform, we believe we have a really good lens on the dynamics of the commodity world. So in conclusion, we demonstrated this morning, we hope we have a successful track record of growing our business, adding product coverage within each of the asset classes as well as expanding that geographic footprint. Furthermore, the advent of our technology platform, Neon, should add exciting dimension in the years to come. We've grown our revenues to over $200 million, whilst increasing our profitability, whilst generating over $66 million of operating PBT and again, maintaining a circa 35% margin business. And by continuing the diversification of those capabilities, be it in increasing products, geographies and the advent of technology, we will continue to generate and grow our revenues. In promoting our one-stop shop solution for clients underpinned with our prudent and risk metrics, we desire to be the liquidity hub alongside the rest of the group. We're proud to be part of this exciting platform. Thanks very much for your time.

Yes, Patrick Moley, Piper Sandler. You mentioned the growth that you've seen on the Neon platform. Can you talk about the traction that you're seeing there and maybe your expectations for growth in the coming years, how many clients you can add to that platform? And then could you maybe help us understand the incremental margin differences between volumes flowing through that platform compared to the rest of the business?

My sense is, if I just took metals alone, we have actively servicing 800 to 900 clients. We have 125 something like that on the platform today. Do I believe everyone is going to go into that platform? No, I do not. Do I think that it's going to represent 30% to 40% of our traffic? Yes. That's just in industrial metals. As we're rolling it out across other products, I would expect the same sort of uptake.

Yes. I mean I think that what we're certainly seeing there is a lot of opportunity to sort of shift volume on to Neon. And I think you would say it's materially more profitable than going through sort of the other channels. So I think that we feel it's sort of early days, and we think the opportunity is quite significant. I mean I think that's...

Yes. I mean, as I said, if I were to think -- if one thinks about the electronic market makers in this space, they are unable to actually sort of interact directly with the client we are. So that's where the value differential is between, call it a household, Citadel, Millennium, Virtu, et cetera, versus us. So I think there's going to be a huge upside in that electronic platform going forward.

So I think we'd like to actually just move on to solutions, if that's sort of okay, so that we can get a little closer to our 12:00 close. We may end up having to take a little bit of the lunch period for additional questions. But at least for those of you who have to leave around sort of 12, you'll at least have heard Nilesh's presentation. Thanks, Simon. Thanks, Bastien.

Hi, I'm Nilesh Jethwa. I joined Marex 8 years ago to create Marex Solutions, our hedging and Investment Solutions business. I've been in the industry for 25 years, and this is now the third time I've built a derivatives business from scratch, first at Lehman Brothers and then the Fintech start-up focused on structured products, which we successfully IPO-ed within 5 years of inception. Having organically built a derivatives business like this twice before I came to Marex, where we could benefit from a global platform and an investment-grade balance sheet in order to add a product that we know the market wants. Marex Solutions is a fast-growing, high-margin business, which is a significant liquidity provider to the group and there's positive risk characteristics. In the next few minutes, I'd like to achieve 3 things: First, to provide a quick refresh about how Marex Solutions helps corporates to hedge their market risk and helps investors to achieve their investment goals through the creation of customized derivatives. And second, to focus on the how. How do we build these products? What risk does that leave us with? And how do you mitigate them? You'll see that we hedged the vast majority of our risk immediately. And lastly, to leave a sense of the growth opportunity of this business. So what is it the Marex Solutions actually does? Well simply put, we make derivatives and then we sell them. These derivatives are based on equities, commodities, fixed income, FX, mutual funds, digital assets. And while derivatives have been around for decades, the majority tend to be quite standardized sort of off-the-peg rigid instruments. Marex Solution specializes in making customized derivatives with each one tailor-made to the needs of each individual clients. So how does it work? We have a team that makes these customized derivatives, and they can pretty much design and trade any payoff on any underlying and in any currency. And they need to do this cheaper, faster and more flexibly than our competitors. We have 2 distribution channels for this capability today. The first is Hedging Solutions where we help corporates to manage their exposure to commodities, FX or rates. And the second is Financial Products where we design and manufacture tailor-made investment products on major asset classes. The business is growing relatively quickly, and we're taking market share globally. Revenue is growing from $0 in 2017 to $162 million last year. Our profit margin is 26%. So how do we fit into the broader Marex group? The rest of the Marex Group helps clients to engage with standardized derivatives, typically made by an exchange. Where Marex Solutions differentiate itself is in creating its own derivatives and these are customized to the needs of each individual clients. Because we manufacture these derivatives ourselves, we can provide services linked to these derivatives so they cannot get elsewhere. Since we own the product manufacturing and distribution end to end, and we can design and create products that clients need. We can generate higher margins, while our service and proprietary technology makes clients relatively sticky. So we have this one cross-asset derivative manufacturing capability. But as mentioned, we have 2 quite different distribution channels. In hedging solutions, we speak to corporates, companies with some exposure to commodities, foreign exchange or interest rates. Our job is to understand the risk they're facing and then design and trade an OTT derivative which hedges that company's exposure to that market move. And by taking that market risk away from the corporates, it reduces the volatility of their earnings, making them safer companies. In addition to hedging that exposure to these OTC derivatives, we provide credit lines to help manage their liquidity. In financial products, we speak to investors, private banks, family offices, asset managers, pension funds, essentially anyone with cash looking to get a better yield than they might get at their bank. They seek higher returns but are willing to take a specific customized market view to help achieve their investment objectives. We do not charge commissions for our products. When we create a derivative, we mark up the price that goes to clients. This is a client's franchise business. Simply put, our profits increases with a number of client rates, which is a function of the number of clients. Client growth is something we put a lot of focus on, both in terms of bringing new clients onto the platform and then increasing the amount of business we then do with them. So who are our main competitors? Well, in hedging solutions, most investment banks have a similar offering, but they tend to focus on sort of the very large Tier 1 sort of global multinationals. Our focus has been on leveraging technology to enable us to serve midsized companies who don't necessarily qualify for the attention of an investment bank. There are some nonbank competitors, but we feel well positioned here given our technology platform and our scale. In Financial Products, we compete with all the investment banks, but this is a big market, and there is room for a nonbank issuer to offer an alternative credit risk. Our technology platform allows us to focus on smaller tickets, which tend to have higher margins. We also have a large sales to client ratio, which allows us to provide a differentiating service. In comparison, as Ian mentioned, many banks have sort of juniorized their sales function in recent years. So to bring these products to life, let me provide a couple of example products. Starting with financial products. We have an investor looking to put $1 million to work in the equity market. Now they could simply go and buy an S&P 500 ETF. And if in 3 years' time, the S&P is up 30%, the $1 million would now be worth $1.3 million. But equally, the S&P is down 30% that $1 million would only be worth $700,000. So alternatively, the investor could come to Marex, where we create for them an S&P-linked principal protected notes. And if in 3 years' time, the S&P was up 30%, we are paying the investor back $1.3 million as if they were fully invested in the equity market. But if the price drops by any amount, we'd always make sure we give back that $1 million that their initial principle will be protected. What is happening is the clients' lending Marex a $1 million for 3 years and we should be paying interest on that loan, but we don't. We take the majority of that interest and use it to buy a call option on the S&P to achieve the payoff I just described. And the rest of that interest is our margin. And each time we sell a product, clients are lending money to Marex. And this forms a diversified source of term liquidity spread across a large number of investors. The graph on the right shows the growth in that liquidity from these notes over the last few years. The amount of cash raise has risen every year across different parts of the cycle and in a variety of market conditions. Switching now to hedging solutions. So this is an example of a Brazilian coffee farmer who spends their money today, planting coffee, but doesn't know their revenue until they harvest their coffee in the summer. They're exposed to the future price of coffee. So one solution is to sell the July exchange-traded coffee future, and this would mitigate most of their price risk. The problem is that farmer is selling coffee over the entire harvest period, and exchange only offers a hedge for that 1 day in July. So instead, the farmer could come to Marex, where we design a swap, which behaves a bit like the future on exchange but expires a small amount every day in line with that farm's projected volumes, and this is now a better hedge for their real-world coffee exposure. In addition, this farmer is based in Brazil, they operate and think in Brazilian real, but the exchange future is priced in U.S. dollars. So Marex will provide a coffee hedge, which expires every day in line with their volumes and is denominated in Brazilian real. So now we've hedged both the coffee price risk and their FX exposure. This case study is a unique example, but it demonstrates how we operate as a business. We were working with an airline to manage their jet fuel price exposure. And we created an OTT product, which took that jet fuel risk off their books and moved it on to ours. And we then sold our jet fuel exposure into the market. As part of our cross-sell initiative, we then hedged the airlines FX exposure as well. Again, taking the exposure off them and on to us and then we hedge that into the market as well. So as a result, both the airline and now Marex, both have no jet fuel or FX risk. However, it did leave us with a credit exposure to that airline. There's a risk that they don't meet their margin calls. So our solution was to work with our financial products team to create a credit linked note linked to the credit of the airline, so the investors who bought $1 million of this credit linked notes, would receive their principal back in maturity plus an attractive coupon, subject to the airlines credit. If the airline defaults, we'll reduce the principal return to the investor, which would mitigate our loss. So as a result, this really is a win, win, win. The investor gets access to an attractive risk return -- risk reward they couldn't get if they were not connected to the Marex ecosystem. Marex itself has mitigated our own credit risk. And the airline was able to do more business and more hedging with Marex as a group. I'd like to spend a bit of time on some of the key risks of the business and how we think about them. And let's start with credit risk. In hedging solutions, we extend variation margin credit lines. So this means we forgive the first $500,000 say of a client's variation margin call. But this is right way risk for Marex. And let me explain. If our coffee farmer hedged their coffee price with us, well that if coffee prices drop, we would owe them money. In that case, we take no credit risk. But if coffee prices go up, then the client will start using their credit line. We now have a credit exposure to the client. The coffee itself is worth more. The thing that they're hedging offsets the loss. And more broadly, high coffee prices are better for their business in general. And this is why this is right way risk for Marex. In addition to the right way risk, we also employ salespeople located on the ground near clients. They visit them in their offices, their factories, on their farms. This is our first line of defense. We also have a dedicated independent second line and credit risk and credit team to analyze and monitor these companies. Like our clearing business, our credit lines are uncommitted, we can withdraw them at any point. In Financial Products, when we sell a note, the client is lending us money. We do not have exposure to their credits. They are taking our credit risk, and this is why our investment-grade rating is critical. Liquidity risk. Hedging Solutions doesn't consume much liquidity. Now when clients are on margin call, we're very strict about getting paid within 24 hours. However, when the position moves back in the client's favor, they tend not to ask for it all back and that leaves us with a residual amount of cash across our client base. Financial products don't require any liquidity. In fact, giving clients invest their cash in buying our products, this has become an important source of high-quality, diversified liquidity for the group. Across both businesses, we perform a series of stresses to be more precise about how much liquidity we would have if the market moves or if client behavior changes. However, between these 2 businesses, even accounting for these stresses, we generate a significant excess liquidity from Marex. Moving to market risk. Simply put, we sell a customized derivative to a client and hedge with a similar but not identical off-the-peg derivative. The risks offset, but not perfectly. And we dynamically manage the resulting basis risk with a team of 20 traders following the sun from Singapore to London and Paris to New York. The resulting portfolio risk exposures are tightly managed by the traders. We follow a comprehensive risk-limited framework independently monitored by our second line risk team. There is a strong risk management culture and spine throughout Marex. My background is in trading these products and we understand them well. We know that in financial products, for example, that we can position the books to behave reasonably well when markets are sideways or positive. When one stock unexpectedly drops 50%, this also typically yields a windfall gain. However, we know that when the entire market drops systemically, the books do become tougher to manage. And in addition, we know that clients are less active generally in a crash. And that's why we constantly buy downside protection as a business. It costs us a bit every day, but it helps when the market drops. The books have performed well in a variety of market environments, including the COVID crash, we saw global equity markets drop by 1/3, including the S&P dropping 12% in just 1 day. We saw the same more recently with the Nikkei crash and when cocoa and coffee prices spiked last year. The culture of Marex is to be very thoughtful and attuned to the risk we take, and this business is an example of that. We pay close attention to our operational risk. We invested significantly in our platform in 2024 and we'll do so again in 2025. We seek to have a platform that compares well with anything currently on the market. When I started in the industry, the minimum ticket size for many of these trades was $25 million, then it became $15 million, $10 million, $5 million. Today, many banks will quote reluctantly for $1 million. We routinely offer customized products for $200,000 or less and we see that number dropping further. And that's why we need a strong platform, but also why we don't have huge concentration risk to any one particular trade. The quality of our revenue has improved over time for two reasons, in particular. One, we have more client flow; and two, that flow is increasingly diversified. On the left-hand side, you'll see that the volumes have increased. We have a structured-based inventory now of 4,000 products, which leads to repeat business as clients roll or restructure existing trades. We also see increasing diversification in our hedging solutions business. We are still ag-focused, but are growing in FX, energy and metals. On the right-hand side, you see an improving distribution of our daily P&L. Days to the right of that dotted vertical line are positive. You can see that the business has a narrow distribution of revenue with more positive days and less days where we lost money. In 2022, the daily revenue from clients was $435,000, whereas last year, it was $630,000. As we grow, our revenue is increasingly a function of the number of client trades and less due to residual market risk. To summarize, this is a client franchise business. We are in the moving and not the storage business. We produce products for clients, and that's what we're paid for. Any residual basis risk is just the result of making these products. We're not taking directional market bets and you can see that by the revenue outcomes of the business across several years and market environments. What we're doing is working. We started the business in 2017, and the revenue has grown every year since. We are, however, far from reaching the limits. Digging a bit deeper, you can see a bit more of the diversification of the business. When times are volatile, corporates need to hedge. And when times are calm, investors are more proactive. In 2022, following the Russia-Ukraine conflict and the resulting commodity price shocks, we saw hedging solutions have a bigger year with financial products suffering forwarding equity markets. Last year's equity bull run saw financial products had a strong year, compensating for quieter commodity markets. Profits continue to grow year-on-year with a profit margin of 26% and that's despite the investment in the platform that I mentioned. In this map, the large blue cycles show our trading hubs. This is where we manufacture the products and manage the risk. And you'll also notice a large number of small gray dots, which show where we currently have boots on the ground. This is our strategy of having sales people close to our clients. I mentioned before, we have room to add clients globally, especially in the Americas and APAC. The U.S. is a particular focus for us as it is typically the largest market for our competitors in hedging solutions and we are currently very small compared to the opportunity here. In Financial Products, we started the business in Europe, which is the oldest and most competitive market for structured products. Nevertheless, we established ourselves well and continue to take market share. It was a good place to prove ourselves, and we are now making strides in APAC and LatAm. We plan to launch financial products in the U.S. later this year. In the last 5 to 10 years, the U.S. has grown to become one of the most important markets for structured products. The opportunity here is significant. And given our positive experience in EMEA, APAC and LatAm, we know we can address this market, too. Each of our existing offices has a lot of growth potential, but there are several jurisdictions that are being on the ground will create additional opportunity and the purple dots show our planned expansion. Thank you for taking the time to listen. If I can summarize, we help corporates to hedge their market risk and help investors to reach their investment objectives by creating customized derivatives. The risk of the business are managed by an experienced group of practitioners. We take limited market risk to make these products. And we can see that the revenue is increasingly a function of client activity more than market risk. And this has been demonstrated through various market environments over the past 8 years. The business creates a significant amount of high-quality liquidity for the group. And finally, the business is working. We know that clients want these products. We now have to build them officially and to take market share. And as we earn the trust of a greater number of clients, this will translate into more trades, more revenue and ultimately, more profits. Thank you.

Just trying to keep people awake. But -- so thank you for this. The business makes sense from a customer interface perspective, right, on the hedging side and you talked about the benefits that the financial products bring to liquidity at the firm-wide level. As you sort of think about your growth objectives, you kind of named a few areas where you guys like to expand. Can you help us maybe frame how large the basis risk kind of like that residual piece that you think is not kind of like perfectly hedged could go as a percentage of the firm's total tangible common equity? So if I think about maybe where that's been historically and as you expand this business, would that change much? And kind of what is that as a percentage of the firm equity?

So let me explain that a bit about how we've evolve that over the last few years. When you have one trade on book that risk sort of feels material compared to the profit on that trade. But as you grow the book and you diversify by client, by underlying, by risk, a lot of these things start to offset and so the increase in risk per unit of revenue actually starts to go down because you start having offsetting flows. So as we grow the business, we do expect more volumes. And one thing I hope you caught on, we're sort of tackling smaller trades. So sort of a market which is more distributed a bit further away from the big banks, which means you sort of get a lot of different tickets and they're smaller. But as you grow that sort of base, you're naturally diversifying the risk and so these things start to help each other as opposed to get more and more concentrated. So I won't give you sort of numbers in terms of that what it looks like versus equity, but I will say that qualitatively, we're taking less risk per unit new trades than we would have done when we started the business.

But I think that -- I mean, again, there's probably an answer we can formulate that sort of links back to the Greeks in the portfolio. But as I always think of it, that basis risk in the way that plays out is probably measured in single millions of dollars of revenue, not more -- so I mean, I wouldn't think of it in comparison to the firm's equity. I would think of it in terms of daily revenues or weekly revenues. And certainly, our experience -- and Nilesh made the point that the guys are basically selling downside protection all the way through this. So in the events that we've lived through, and there have been some pretty substantial disruptions, I mean we have not seen sort of losses in that portfolio even when markets sort of dropped. And again, one of the things you may have picked up in one of those slides was 2021 where the margins were 36% when it's typically a high 20s margin business. And that was because essentially all the insurance that had been purchased sort of paid off. So as we think about the residual risk in this it's measured in sort of single millions of dollars in terms of how it plays out as opposed to anything else. I mean, I don't know if there's anything in -- I don't know in the [indiscernible] and in the numbers and there's always no residual delta risk that you guys hold in aggregate.

Yes. So when you do a trade initially, immediately, you're hedging sort of all the risks you can, and that's the delta that [indiscernible] sort of is only really the sort of the higher water risk, which you sort of have to manage dynamically. But that represents quite a small amount of the total risk of the trade on day 1.

[ Chris ] from Barclays. I wanted to ask a little bit about growth in the segment. You've kind of given us a sense of the geographies that you're in, that you're expanding to and that both are kind of opportunities. But how do you think about the growth between the places that you are now and the places that you're expanding to and kind of how do both of those factors play into the margin?

We're just tiny. If I think about the -- both markets, the share of wallet we have is incredibly small. I maybe qualify that a bit. I think in Financial Products, this is quite a large established business over the last 25, 30 years. We're not inventing it. And there's been -- the market has been trained and it's growing, and we're just taking a very small -- a tiny percentage of what is a big and growing market. So we're very far from reaching our limits there for sure. In hedging solutions, it feels different because increasingly, companies are needing to hedge when they didn't think about it in the past. We're educating clients actually, you have a risk. We had 12 years of [ QE ] whatever it was and people -- things didn't move and now suddenly things are moving. And if you're not hedged, you're exposed and people recognize that. So I think that's a growing market just in general. But in every area, whether it's Europe, APAC or Americas, we have room to grow. And as I mentioned, there's a few areas where we're really small like the U.S. where I think we're very small compared to the opportunity set. So we don't sort of see we're anywhere close to sort of capping out.

Yes, I mean the one thing I'd just add into this, I mean Nilesh shared an example of how we combine with one particular client a credit-linked note as a way to deal with the credit risk of that particular client. And I think that, that technology, which we're not aware of anybody else doing in exactly that form, I think actually opens us up to opportunities that otherwise we would need to shy away from because of the size of the credit risk. So the other thing that you sort of have in this particular sort of business is almost an unlimited opportunity just because of the sort of ingenuity of the people in it and the ability to come up with sort of creative solutions to whatever the constraint appears to be. So if you're worried about credit risk, well, it turns out, you're just embedded in a credit link, no. And that, I think, has meant that the scope of what we can actually do sort of just becomes a lot larger.

Kyle Voigt, KBW. You spoke a little bit earlier about kind of how you manage from the basis risk in that market. As we think about how important this business is for the liquidity and funding liquidity across the group, can you just kind of go over the market environments in which particularly, I guess, on the auto callable side where you'd have a liquidity drain. And then across the group, how do you manage the liquidity risk if there's liquidity kind of coming out of this or coming out of the Solutions segment, how does that kind of get replaced across the group?

Well, I mean, a couple of things there. I mean, one is we are actively looking to diversify our funding sources. So you saw us sort of do $600 million. And I think that as we think about our goals for 2025, it does include increased public issuance. But as we think about the liquidity from the sort of structured notes, we hold a very substantial amount of the liquidity that gets generated on day one for sort of stress liquidity. And so if you think about it, you go out, you raise $100 million in notes, probably $20 million of that goes to establish the initial hedges. And probably depending on what it is between $25 million and $35 million of what's left is held as stress liquidity for the event of what happens when you have to post more hedges against those particular examples. And that's not just our own sort of requirement. But when you deal with the regulators, I mean, the first question they ask you when it comes to your liquidity and your liquidity planning, is what do you do in that exact circumstance and then we have to -- we do and we show them our models of what we think that stress is. So broadly, what Nilesh is describing as the residual liquidity is not just what's post the hedges, but what's post a very extreme stress test because you don't want to -- having gone to the trouble of creating extra liquidity, you don't want to then find, "Oh no, we're in stress" at exactly the time you need it because you know that what's going to happen in that moment is the equity values are likely to go down, and as a result, you're going to be posting a lot more in your hedges and you're not going to be able to call back the note. So it's a net liquidity outflow. That's absolutely part of the liquidity planning of the firm. And it's envisaging an extremely significant stress, 25% move in equity prices, 50% increase in [indiscernible].

Yes, I mean, we -- in addition to stressing the market, we also stress client behavior. So if -- we sort of project some clients may want unwind or whatever. But I've been doing this for 25 years and what we observe in reality over different cycles when we've had dot-com GFC, COVID, clients tend to just add products over time. You saw our numbers. We're growing our notional outstanding all the time. Marex is in a stage where it's establishing itself. Ian talked about the power of the IPO, but our brand is just improving. So we're actually at the point where we're just adding products even when the market is going down, people are coming to us to do more business with us. So actually, I think the flow of liquidity generally is positive, but absolutely, the characteristics Ian described are absolutely correct.

And then I think just -- probably this is worth emphasizing, I mean our cost to generate product is just so much lower than everybody else's. I mean that's how we can be profitable even with much smaller ticket sizes. And it shows sort of the power of not having legacy technology, and it does show -- so the power of the sort of coming to market and building what it is that you actually need. But that's a huge advantage that we actually have in this business. It's just an ability to generate high levels of profitability while being able to operate with much, much smaller ticket sizes. And that's not just because we're dealing with small clients. I mean many of the clients we're dealing with are quite substantial, but it is an advantage that we actually have that you can do smaller tickets even with larger clients. All right. We probably worn everybody out in -- we certainly have lunch waiting on you. So thank you for being so engaged this morning, and I guess we'll get back together at quarter to 2:00. Thank you. [Break]

So I think we'll start just -- I know there's still some coffee being sourced. But we'll start so we can sort of broadly keep people on time. We are going to have a Q&A at the end of the 3 sessions that we have. So we start with strategy, we go through financials and then we'll talk about risk and compliance. And if you don't mind, we'll sort of try and then cover any questions that you might have at the end. So as I said, we're going to start with the scalable platform and our strategy. So I am here in that capacity rather than talking about the financials. I'm going to focus on strategy for now. Perhaps just to start with some of the sort of key metrics that we track which are important in sort of demonstrating the scalability of the platform. And we see these metrics as sort of the most relevant because we're obviously -- if you look at our expense base, we're making investments in capabilities, we're making investments in the sort of geographic footprint and that sort of obscures some of the operational efficiencies that we're achieving. So the client balance is total -- the total balances that we hold are up at $13.5 billion, that's 42% a year annual growth rate. Front office revenues, as I was talking about earlier, front office revenue is very much a focus for us because once you get beyond the sort of $1 million, we're sort of typically able to generate very respectable margins from -- and profits from our producers, and we're now at $1.3 million on average. That has helped drive the improvement in the profit margin. So the profit margin has gone from 15% to 20%. And then below, you can see some of the numbers reflected in volumes. So we now clear 1.1 billion contracts annually. We have been able to that with a limited increase in the number of support staff and the support staff is not just the operations team, it's the broader set of technology and client service, risk compliance. And we've been able to achieve that with a lesser number. So it's growing at a little bit less than half the rate of the contracts. And so the number of contracts per FTE, as you see there, has gone from 443,000 per FTE to a little over 1 million. And the end result of all of that, the operational efficiency expansion and margins, the improvement in individual productivity is that we are now generating ROE at around 25%. The strategy broadly hasn't changed. So you've seen this slide before. It hasn't changed because we believe that it's the right strategy. We're looking to grow by adding clients, predominantly by adding clients. And the way that we add clients is by extending the product range and extending the geographic footprint. So you'll sort of see that thematically coming through in all of the sort of examples and in our metrics. So when you look at the numbers, and Ian referenced these earlier, we have added nearly 3,000 clients in the last three years. Now that growth rate of 32% includes the benefit of some of our acquisitions. So in the case of ED&F Man, we added about 1,000 clients just from that alone. The really profitable clients are those that are generating more than $1 million in revenues. And you see that that's actually growing at a faster rate than the growth and the number of clients and, in fact, of any of the segments, the greater than $1 million are the sort of community that are growing at the fastest rate. And around half of that is actually migration from being in the lower revenue categories and moving into the higher revenue category. So it's not just a function of we go out and we win big client mandates. Within these numbers, you're also seeing the migration of clients to ones that are more productive. And obviously, this represents a large part of our revenue, something like 40%, 45% of our total revenues on the -- in terms of client revenues are actually generated from these higher revenue payers. But the core of our business and the average revenue across our entire client base is around 300,000. The core of our business, very much in that mid-tier and those within the $250,000 to $1 million category have also been growing at a very healthy rate. So we're getting 40% annual growth. And we now have over 600 clients that are generating up to $1 million or a little less than $1 million. So we have some more examples of how we have been able to expand the share of wallet that we're generating from some of these clients. And you've seen a few of these. These are all different case studies, but the themes, I think, are similar. The first example is a commodity group, a very well-known commodity group, and we've had a long-term relationship with them. We initially were providing execution services. And actually, that's quite often the initiation of the relationships that you're able to provide access to market, provide sort of liquidity, execution support. And as you extend that relationship, as you deepen that relationship, you're able to add other products. In this case, we're able to add some securities activity, we were able to add market data. And we've added, in terms of product lines to this client, we've added agricultural products and metals. And we've also increased the amount of clearing. So I think that's a pattern that we see in a lot of clients, the sort of initiation is with a narrower set of products, with a narrower set of services. And as they become accustomed to sort of dealing with us, we're able to extend the service provision. The second is a large a multi-asset class asset manager. It is a relationship which is very much execution-oriented rather than sort of clearing oriented, and we've essentially grown the sort of wallet share by increasing the number of products that we're able to provide. And for this particular client, it's very important that we're able to service a very wide number of products. And then the third relationship, I think it's almost sort of most interesting because it's a very well-known trading house. It may not be a household name, but you guys would all be familiar with this customer. And we started, and I sort of remember I was running clearing when we first had this relationship, and it was very obvious that we were quite low in terms of importance to this clients, very well-established business. But what we've been able to do is increase the number of products that we can service. We've been -- we've worked very closely with them in terms of meeting their specific needs. We've added a significant amount of clearing in their case, actually being able to provide securities clearing was very important. And -- so we now provide support across securities, agricultural products, metals, on both the clearing and the execution side. And I would say that this is an example of a client where whenever they're looking at a new market, they will talk to us first. And they've been sort of very much sort of partners into opening up some of these new markets. And that I think is sort of a reflection of the types of the quality that you get and the fact that we have such an expert service. From a regional perspective, the genesis of the firm of Marex and very much a sort of core, a few years ago, was in the European and U.K. markets. We've continued to see growth in that market, but the other regions have grown at sort of faster rate, not that Europe and the Middle East is stagnating, we're growing at over 30% a year. And as we talked about earlier, we're making a significant investment in the Middle East. We've got an acquisition that we closed this week, which will contribute to that sort of further growth. That is an area where we see real opportunities. So not -- and a real opportunity and we're not yet at the point where we sort of feel like we've exhausted that. But we do think we're in a very -- we're very well positioned for the sort of expansion of that market. But the fastest growth has come from the other regions. In the U.S., we're growing at close to 60% a year over the last three years. The percentage of revenues has shifted. So it's now around a little over 1/3, but it's growing every year, and I would expect that in absolute terms, our revenue growth will be driven by our success with penetration within the U.S. markets. It's just such a very deep and broad market for us. So I think when the sort of dust has settled on our quarterly performance, I think you'll see that, that progression will have continued in terms of the increase in the U.S. percentage to the point that I think we've sort of indicated that we would expect at some point for the U.S. to be an equivalent size to Europe. And then in APAC, we're growing at the fastest rate, but albeit off the sort of the lowest base. As Thomas talked about earlier, we've added products and capabilities in Singapore, in Australia and in New Zealand. And we're seeing very sort of healthy growth. But, I would say, we're still somewhat subscale there, and it represents a very good long-term opportunity. The inorganic growth has been a very important component of the Marex progression and the sort of Marex performance. So I wanted to sort of give you some more color just on the range of M&A and the type of M&A opportunities that we see and then how we judge those opportunities and how many we're seeing and how we're filtering them. The categorization is between specialized product providers. So this is where we're extending our product with an acquisition of a relatively small company that provides specialized service or specialized product that we didn't have before. There are some bolt-on acquisitions where it's relatively easy to move into the infrastructure, but they're sort of a modest size. And then we have some more transformational acquisitions. And we've categorized only two as transformation, and that's the Rosenthal Collins business, which I'll talk to in a moment and ED&F. And it would be sort of interesting how the Prime Services acquisition develops because that may well turn out to be sort of transformational in terms of extending the universe of clients that we're able to service. And then on the right, you see that there are two acquisitions that were announced and one is now closed. So the Aarna acquisition, Aarna Capital is an Abu Dhabi-based clearer. It gives us a presence in Abu Dhabi to complement the business that we have in Dubai, gives us an additional client base and it gives us roughly $300 million to $400 million of assets under management. So it's actually -- in terms of the extension of our Clearing business, it is a meaningful, and we expect that to be a meaningful contributor. Hamilton Court FX is the HC FX logo. That's a corporate FX provider. It's sort of predominantly focus on U.K. corporates, but it has a business in Mainland Europe and Italy and in Spain. And we see that actually as a very interesting platform to sort of extend our product offering. It's an execution business. So it's an arranging business rather than a sort of risk-taking business will complement some of the skills that we have, capabilities that we have in other areas. Hopefully, it will bring a client base that we can cross-sell clearing and some of our other products into. So a lot of acquisitions. We think that as a skill set, being able to identify and negotiate complete and integrate these transactions is something that we have real expertise in and I think that certainly versus our competitors, we feel that we have an advantage in being able to identify and close these transactions. In terms of the value that we're paying, the multiples are quite consistent. Now we've made -- had to make one adjustment because of this sort of unusual situation with ED&F. But broadly speaking, we're paying around 8x total cash value for these transactions. So these are not necessarily -- they're not necessarily cheap transactions in terms of the total purchase price. But it's often the case that these are businesses which are not generating a lot of PAT, so the multiples look somewhat high. And this is also pre -- of integration and the synergies we're able to generate from that both sort of operationally and in terms of revenues. If you look at the premium, now the premium for us is very important because that is the capital consumption, the most meaningful part of capital consumption. You can see that the sort of premium spend is very, very low. That doesn't include the sort of negative goodwill that we had on the ED&F transaction, which -- and yet, we're still spending on average. Some sort of low single millions in terms of premium. What's sort of also clear is that as we get larger, we would expect to be spending a little bit more with generating more capital. As Rob will talk about later, the ability to redeploy that capital into some of these inorganic opportunities is very sort of much a part of our sort of growth plan. So I mean, the most recent acquisition is obviously slightly larger in terms of premium, still small amounts relative to the earnings that we're generating and the capital that we're accumulating. And then most importantly and there's a sort of historical sequence here. We see that the businesses that we acquire we are able to turn from relatively modest profitability into much higher profitability. And you see a couple of examples of that. But for the oldest set of the most established businesses, we've increased the revenues by fourfold and as you move to the sort of more recent ones, then we're still doubling revenues even for those that we have completed in the last year or 2. So the couple of examples that I wanted to provide. Well, firstly, Rosenthal Collins. And it was really important -- it was a very important strategic point for us. It was one of our earliest acquisitions. We closed this in early 2019. And it represented a move into the U.S. And at that point, we essentially had a clearing business which was very sort of European centric. We had an execution business in Asia and really almost no clearing clients there. And we had almost no clearing business in the U.S., even though it was the biggest market. And you could see that on the -- if you were to look at the sort of historical assets under management, we wouldn't even register in sort of FCM -- in the FCM list. I mean, we will be right down at the bottom. So having a presence in the Americas was important, this was a business which was well established, had a very solid client base, had a very good reputation from a service perspective, but was not making any money because it hadn't really invested in the infrastructure and was subscale. And you can see that we've been able to move from 5% profit margin to 50% profit margin. The client assets have increased some amount, but the revenues have increased by a much higher percentages. We've been able to drive more business through that. Obviously, we benefited some amount from rate increases, interest rate increases. But the sort of main contributor has actually been the increase in the volume of activity on that client base. Then the sort of next acquisition of a similar type is ED&F -- we show this between sort of pre-acquisition of '23 because it's now really so integrated into the business lines, the legacy business lines or the sort of combined business lines that for '24, it's really impossible to extract the performance. But you can see that we went from -- there from a sort of margin level of 6% to 21% over the course of a year. And although we don't have the precise numbers, we would expect that its profitability and its margins have improved. We've improved the individual productivity as well. There were some efficiencies. We were talking earlier about the sort of opportunities for synergies. Some efficiencies here, this was a business where it did plug into our systems for the clearing side, not for the execution line, and we were able to drive some efficiencies in terms of technology and operational support. OTCex is a French -- largely sort of French-based execution business. We thought that this was also a very important strategic opportunity because having a presence in Mainland Europe is relatively difficult to establish. You need to have quite an extensive range of regulatory relationships and acquiring this was the quickest, easiest, most efficient way of establishing that presence in that entity. But what we've seen over the last 2 years, and we closed this in almost exactly 2 years ago, is a real improvement in productivity. We have reduced some of the sort of staffing or we've been able to redeploy some of that staffing. We've increased the revenue productivity to $1.2 million. You can see that we've increased our revenues by 50%. And the way that we have done that, given it's an execution business. And so it's not that you can just change all of the sort of contractual structure around it. It's by focusing on the products that we are strong in, and we've increased our market size. By reorganizing the teams so that they are more integrated into a sort of broader offering. And then by looking to renegotiate, restructure some of the sort of more expensive contracts. So it's really driven very meaningful improvement in productivity and whilst I'm not going to -- I'm not able to give you the exact margin, it is getting to that point where it's within sight of our sort of target market -- margin aspirations for these execution businesses. And then the most recent sort of meaningful acquisition is the prime services business that I mentioned earlier. And you can see at the bottom -- in the bottom right-hand side, the sort of progression in terms of revenue. So the revenues in the fourth quarter were 40% higher than -- 40%, 50% higher than they were in previous quarters, quite stable through the first 3 quarters. And then we really started to see the momentum coming from client onboarding from the extension of products. So we're now able to offer a very wide range of products to these clients. So not just cash, prime brokerage and not just cash execution but almost all synthetic products and in almost all markets. We've been able to internalize some of the higher margin or more difficult to service parts of that value chain. And as I say, I think we'll see a continuation of that performance into growth into the first quarter of this year. We didn't have those -- this is sort of an example of where we thought about organically growing this business, and it was very clear that to build something like this from scratch, is a 5-year endeavor, perhaps even more than 5 years. Getting the infrastructure, having the operational expertise and then onboarding clients is a very slow process in a way that's the sort of defensive part of our strategy, being able to make these acquisitions is complicated, but we think we have that expertise. And certainly, we are now really sort of seeing the value of that. It's 100-plus front office staff. So it's a meaningful number of people. And as I said earlier, across the prime services in the outsourced trading is over 500 clients. So in this case, we're establishing a business with a decent sized client base. And we're extending those capabilities. So we're building out our presence in APAC, and we're starting to see some traction with clients there. And we've also added some capability in the Middle East. So we now have a presence in the Middle East to service the increasing number of clients as Thomas talked about earlier, there's markets which we haven't yet fully sort of tapped into in Brazil and in India, and I would expect those to be on the plan. I think this is a business that complements clearing very well, and it's much more a partnership JV than sort of alternate. So the list of products that we're now able to offer has sort of emerged from products which we've provided on a historical basis. So that's the category that we put into legacy merits. and then being supplemented in some cases or initiated by the acquisitions. So we now have a good broad offering in equity options, both single stock and index options. We have fairly broad capabilities in FX. And I think once we add Hamilton Court Group, that will be -- which I'm hoping will complete at the end of May, although that's subject -- it's just subject to regulatory approvals, so we're just going through that process. We have a very competitive rates offering. We're building out our credit capability. So there's some legacy -- there was no legacy business, but there's some organic investment that you'll see in subsequent quarters in that business. The repo business will be very important to servicing some of these clients. We acquired that with ED&F and then you can see that some of the -- something like swaps clearing is all organic. The capability of providing some of the synthetic offerings that we have on the prime side also being organically built. So the result of that, and I think a sort of measure of how we've succeeded with these acquisitions and with integrating these businesses has been the increase in the number of nonbank financial services firms. So these are essentially asset managers, hedge funds, trading groups that we've added. And that's growing a 57% a year on average. We're now got, I think, a sort of sizable base of asset managers and both real money hedge funds and trading groups on our platforms and on our client group. And just because we do get asked about how do we think about the acquisition sort of pipeline? And how much confidence do we have with that? And then what are the sort of criteria that we follow? We thought we're trying to lay out some of the sort of key facts here. So we screen a lot of opportunities. I mean typically, the opportunities come through 3 channels. There are some clients or internal referrals, so clients that we may have been servicing from -- in the metals business, on the execution side, on the clearing side that have sort of reached a natural point where they see that there's more opportunity being part of a bigger group. There's some reverse inquiries, so where companies come to us and they've reached a point where they're unable to grow and they need of a support of a larger group or there's some marketed processes. The marketed processes are typically for a larger size transactions that are a little bit less frequent and more likely to be transformational. So most are in the sort of first 2 categories, but we're seeing a large number of opportunities. In the last 12 months, we have filtered more than 50 opportunities. So it's not that we buy everything that we see. We are very strict in terms of eliminating those businesses, which don't fit in strategically or where there are sort of other reasons or financial performance or cultural that we wouldn't -- we don't see them as being a fit. So in terms of then the criteria that we assess them against, we want to have a margin level, which is not going to be dilutive. So that means more than 20%. We want to have ROE, which is not going to be diluted. So that means at the end of the first year, we want to have more than 20% ROE and looking to grow from there. The payback period for the capital component should be less than 3 years. And it needs to bring clients or new capabilities or an extension in our product offering, but it has to fit culturally. And so those are the sort of most important characteristics has got to be a quality team. It needs to have sort of the energy and the ambition that we think is important to being successful in this business. The result is that we would expect to complete about 4 to 5 bolt-on acquisitions each year. We've had some acquisitions that we've closed already over the course of the last few weeks, relatively small size in terms of the contribution that we expect from them, but meaningful in terms of extending our product capabilities and the Aarna acquisition, which happened just at the end of March will actually be also meaningful from a revenue, from a financial perspective. So I don't see any danger of running out of opportunity from a sort of M&A. And I don't see us changing our discipline around this. I mean it's worth perhaps saying that we -- there was an acquisition opportunity of decent size, which we felt very -- we like the business, and we felt sort of that we could run that business. But we didn't -- we were unwilling to stretch, and that went to another buyer. And I think it's a very good business and good luck to them, but we were not prepared to stretch and I think that discipline. You'll see that discipline continuing in the way that we think about our acquisitions. And to sort of try and pull all of this a little bit together in terms of how we see our sort of strategy evolving. We have seen an increase in what we measure as the service addressable market. It has increased from, we think, from $46 billion, $75 billion. And predominantly, because we have extended a number of products that we're offering. So when we're measuring this, we're looking at the spaces in which we're operating rather than the sort of broader -- the sort of broader market. Obviously, we've added a prime brokerage capability so that has added quite -- that's added quite meaningfully in the agency and execution. But the range of products is also sort of largely been the contributor of that growth. But it's $75 billion of overall service addressable market, we're still relatively small with the $1.5 billion, $1.6 billion of revenues. We're in that sort of 2% range. So again, we don't think that we're anywhere near the point where we're starting to hit the sort of boundaries of growth. So I'm going to hand over to Rob now to cover the financials.

Thanks, Paolo. Hi, everyone. I think I know most of you, but for those I don't, I'm Rob Irvin, and I'm the CFO of Marex. Marex has a highly following highly attractive financial profile with a strong track record of growth as you have seen. We have a diversified and high-quality mix of revenues and have grown our margin through scale and productivity improvements across our businesses, delivering strong returns on equity. We have grown our profit sequentially for the past 10 years through a variety of market and macroeconomic environment, reflecting the diversification and resilience of our business. As you will hear from Dean shortly, we take risk management very seriously at Marex and have a consistent track record of low credit losses and well controlled market risk. This underpins our strong capital and liquidity position, which supports our disciplined capital allocation policy. This slide shows the key financial metrics that we track and present to you on a quarterly basis. You can see that we have delivered strong performance in these metrics over the past 4 years. We have grown revenues since 2021 by a CAGR of 43% to $1.6 billion last year. Adjusted profits have grown at a 59% CAGR to $321 million in 2024, whilst our margin has expanded to 20%. This has increased our return on equity to 25% which is significantly above the cost of our capital. When you exclude nonoperating items, the majority of which are not expected to reoccur now we are a public company. Adjusted return on equity last year was 30%. So in summary, a strong business with real momentum. Looking at our revenue mix in a little bit more detail. As you've heard, our business is organized into 4 closely connected and reinforcing services. All of these businesses have displayed strong revenue and profit growth over the past 4 years. Clearing revenues have grown to $465 million and comprised of commissions and net interest income with the former driven by activity and the latter by client balances and interest rates, more on that later. Agency and execution has also grown very strongly and is our highest revenue business at $696 million last year and predominantly comprises of commissions revenue. In 2024, we grew the margins within the business from 13% to 16% as we continue to integrate our acquisitions and these expanded to 19% in the fourth quarter. Market making revenues make up 13% of the group last year and grew to $208 million and mainly consists of net trading income. The main drivers are spreads on the business flow, level of client activity and market volatility. As you heard from Simon earlier, we do not take a directional view on markets, and this is reflected in our low levels of VAR. Our solutions business has grown to 10% of group revenues at $161 million in 2024. Revenues are also predominantly net trading and reflects spreads on flow, client activity and market volatility. The remaining contributor to revenue is our Corporate Center, where our own cash balances earn interest income. So taking this together, we have a diversified revenue mix by type and by business with attractive margins delivering strong profit growth. I'll now cover net interest income in more detail. Higher rates have clearly contributed to NII since 2021. However, the largest driver has been our growth in average balances, which are up from $5 billion to an average of $13.5 billion last year. NII was $227 million in 2024, representing just 14% of total revenues at the peak of the current rate cycle, up from 10% the year before. Total revenues last year grew by $350 million, demonstrating the diversified sources of revenue that I've mentioned. Net interest income does not just sit in clearing, within agency and execution, prime services is a growing contributor as we continue to build out this capability, and it added $30 million to NII last year. Our Market Making and solution businesses incur interest expense as they fund their activities. As a reminder, our balances include both client balance and house cash. The balances can be divided into those on which we share interest with our clients around 60% of the total and the remaining 40% where we retain all of the NII. Our exposure to interest rate movements is limited to the 40% of balances where we keep all of the interest income. It is though important to remember that although the 60-40 split has been broadly stable over the last 18 months, it is not static and can move around on a daily basis depending upon client activity. Here, we have laid out the building blocks of net interest income and our usual rate sensitivity. As I said, the biggest driver of NII is average balances, which is a function of growth in the book from client activity and margin requirements at exchanges, which reflect asset prices and volatility. Prime Service is a spread business. Hence, it is less rate sensitive and driven by client activity. Our interest expense, which grew to $218 million last year will continue to grow as we continue to increase our solutions issuance and diversify our sources of funding in the public debt markets. As far as the rate outlook is concerned, we look at the Fed funds forward curve, which is currently a headwind, implying around 2 to 3 cuts by the end of the year. On the 60% of balances where we share interest with our clients, we typically earn a spread of between 100 and 120 basis points, which provides a natural insulation to rate moves. On the remaining 40% of the book, we have given you our illustrative rate sensitivity, which indicates that a 100 basis points decrease in rates across the full year would reduce adjusted profit by around $20 million. This is, of course, assuming a static year-end balance sheet and ignoring any future growth or actions we might take. We do have a rolling hedge program in place, which causes a modest drag to NII today, but offers us protection on the downside if rates were to fall below the current Fed funds curve. Turning now to costs. Total costs last year were $1.3 billion, 53% of costs were variable, which allows us to rightsize our cost base in response to changing market conditions. Over 80% of our variable costs comprise of performance-related bonuses. The remainder is primarily volume-driven market data and platform fees. In the front office, variable costs flex with revenues, whereas in the back office, they flex with profitability. Although we've continued to invest materially in our control and support infrastructure, these costs have broadly grown in line with our front office FTE. Investments across our cost base has mainly focused on 2 areas: Firstly, technology costs have grown by 27%, reflecting investments in our systems and automation across the firm, and our functional cost increase across finance, regulatory risk and compliance have grown by a similar amount as we develop as a public company and grow the firm in a safe and controlled way. As you heard earlier, this is a source of competitive advantage as we have the scale to be able to make these critical investments that our smaller competitors cannot. Overall, we have worked hard to control our cost base as we have grown the firm, and you can see this in our margin evolution over the last 4 years on Slide 92. Ian spoke earlier about the long-term margin potential for Marex. Here, you can see that our margins have expanded to 20% last year, up 5 percentage points since 2021. This reflects not only scale benefits as we have grown, but also an intense focus on productivity improvements. Over the medium term, we would expect to see gradual margin expansion However, this may be more muted initially for the following reasons. As we broaden our product offering and expand into new geographies, there are less immediate cost synergies with our existing infrastructure as further investment is required to support this growth. Additionally, as we continue to grow our business, our business mix may shift, which will have an impact on our margins given the different margin profiles of our businesses. So net-net, gradual margin progression over time with the potential for more material expansion in the medium term as we scale the business further. Turning now to the balance sheet. As you can see, nearly 80% of our balance sheet consists of high-quality liquid asset, which support client activity. Looking by activity type, we can isolate buckets of assets and liabilities that net off against each other. Once netted, we're left with a corporate balance sheet, which is carrying corporate cash and other assets against group liabilities, including our structured notes portfolio and senior notes issuance. Total assets increased from $17.6 billion at the end of 2023 to $24.3 billion at year-end '24, primarily due to higher client activity. Our residual assets grew to $5 billion at the end of 2024 as we continue to grow and diversify our funding sources. The key message overall is that we maintain low levels of net debt at around $500 million and have low leverage levels on our corporate balance sheet. The group's capital base has continued to grow driven by strong profitability. We manage our capital and liquidity risk very prudently as reflected in the headroom that we maintain above minimum requirements to ensure that we're well positioned in periods of market stress. This also supports our investment-grade credit ratings with both S&P and Fitch. Our risk adjusted capital ratio, one of the main measures that S&P used to assess us on was 12% at the end of December 2024, comfortably above the 10%, which is their definition of strongly capitalized. At year-end 2024, total funding was $3.8 billion with over $1 billion of surplus to support our day-to-day operations, although this number does fluctuate depending upon client activity. Our structured note program is a core source of funding for us, and we've extended our funding maturity profile with the issuance of U.S. dollar senior unsecured debt last year. Turning to capital allocation. We are a very cash-generative business with adjusted operating free cash flow conversion of 95%, excluding deferred compensation over the past 2 years. Our CapEx is limited to a small number of technology investments and our purchase of intangibles relate to goodwill and customer lists arising from our M&A activities. Our capital allocation policy is as follows. Firstly, we aim to maintain a strong capital position to support our investment-grade credit ratings. We will continue to invest organically in our existing operations as well as broadening our product and geographical reaches. We have paid a quarterly dividend of $0.14 per share since the second quarter of 2024, and would expect this to grow in 2025. And with surplus capital, we will continue to take a disciplined approach to M&A, focusing on complementary businesses that support our growth strategy and meet our returns hurdle as Paolo took you through earlier. Due to our strong profitability and healthy cash flow generations, we're able to maintain robust capital position, supports growth investments, both organic and M&A-led and deliver shareholder returns. Finally, a word on current trading. As Ian said, we are providing guidance range for the first quarter. While we're currently conducting the final closing and review process for the quarter end, we would expect revenues to be between $449 million and $464 million and adjusted PBT to be between $92 million and $97 million. At the midpoint, this would represent growth of nearly 40% in profit and 25% in revenues. As Ian said, this includes the impact of lower net interest income partly arising from a 35 basis point lower average Fed funds rate compared to the fourth quarter and higher interest expense from an increase in average debt. Our reported PBT numbers include a small gain from a recently completed acquisition. We are really pleased with how the year has started with continued momentum in our businesses and supportive market conditions. With that, I will now hand over to Dean, our Head of Risk.

Thank you, Rob. My name is Dean Shoosmith, and I'm the Chief Risk Officer at Marex. I run the Global Risk, Compliance and financial prime oversight functions. I've been with the firm for 4 years now and have over 20 years experience in risk across a leading number of global institutions. I'm supported by an expert team led by Adam and Ann Marie, who also have deep financial industry knowledge. As you've already heard, Marex operates in every financial region across the globe and in multiple asset classes. This requires a strong independent risk and compliance function to support our commercial business and ensure that we meet the aims of our senior management, clients, Board and shareholders. We are a risk-taking firm. We have the ability to manage risk for our clients and intermediate between these clients and markets. We use this risk appetite to create opportunities for our clients. As you've heard from Rob, liquidity and capital is key to our resilience and my job is to protect this precious resource and along with credit, deploy these to support our business. Our success in growth, especially in the last 5 years, is testament to this strength in what's been an increasingly volatile environment through COVID, the European energy crisis, large swings in physical prices and a fast-moving geopolitical and macroeconomic backdrop. Our presence in over 40 offices across 18 countries means we're subject to extensive regulation and we provide market access across 60 exchanges. With our background in Europe, the FCA has historically been our key regulator, along with Mainland European oversight. However, with nearly 40% of our business now here in the U.S., our American regulators are becoming increasingly important. We also work with our exchange partners to ensure that we meet all market best practices transaction reporting and compliance with all trading behavior expectations. Rob's talked about the significant investment in control and support staff that we've made. A large proportion of this lands in risk and compliance and ensuring that we manage our risk appropriately is very much our North Star as we've grown our business. But it's not just about people. As we continue to increase our volumes and reach, we also invest in our technology and platforms and we add scale and automation. As you've heard from Ian, this is a hard to reproduce model even for a bank, and this gives us significant advantage with our clients. An important part of my role is to focus on where the downside risks are in our business. This slide outlines the key risks we are exposed to in each segment and the controls we use to manage the risk across each one. The two biggest financial risks that we face are credit and market risk, and I'll cover these in more detail in subsequent slides. As you've heard today from my colleagues, managing these risks is one of our core disciplines. Each and every colleague is a risk manager at Marex. And culturally, this is imperative for our success as a risk function. Operational risk exists across all of our businesses. As a significant global clearer, we're an essential service for our clients who rely on our infrastructure to access exchanges and ensuring that we are operationally robust is critical. Strong controls are in place to ensure the continuity of our technology platform so that clients can experience the uninterrupted service that they expect. This includes areas such as cyber resilience for ourselves and our vendors and the exchanges that we work with to safeguard our platforms and the clients that access markets through us. Integration is another key risk that we track to ensure that when we acquire another company, we reap not just the commercial benefits, but also the operational ones, streamlining technology and processes to retain our high levels of resilience. Compliance risks are also critical for us to manage, whether the evolving regulatory landscape globally or increasingly exchange is acting to police their markets. Further, we take our financial crime obligations extremely seriously, working with our client base and regulators to ensure we meet all of these obligations. As you'd expect for any business that extends credit, we are always aware that we may have some impairments through the cycle. This slide shows our credit losses as a proportion of revenue over the last 4 years, which, as you can see, have been very small. These are actual realized credit losses, but you'll also see in our financial statements that we take a conservative view of balance sheet provisions even when we hold substantial collateral or have agreed repayment terms that have not been fully resolved. Our credit losses are especially low when seen against our growing credit lines with the current utilization of around $650 million. Now this isn't just a consequence of a rigorous credit process but also a highly engaged client base. We know our clients well from a detailed onboarding process to active daily management. We understand their business and their risk profile. Our clients are often physical players, as you've heard from Paolo and the team, producers, manufacturers. They use the credit and the products we offer to hedge and manage market exposure. When clients have had liquidity issues, we've worked actively with them to manage these risks through difficult periods with the majority of issues fully resolved with complete recovery. As a liquidity provider, we intermediate between exchanges and clients. Calling clients for margins on a daily basis is a key part of truing up our clients to markets. This limits the potential counterparty risk we face by ensuring regular resets. This brings client accounts back within their daily credit limits. In addition, where we offer credit -- sorry, where we offer clients bespoke solutions, we margin against stress tests and potential future exposure calculations. We also have the discretionary ability to increase margin rates based on market volatility and client concentrations where we deem it prudent. Marex also retains the right to reduce the client's position if daily margin calls are not met or if the counterparty exposure is above our risk appetite. For clients where we extend credit to fund initial or sometimes variation margin, we have a rigorous robust process and a prudent credit assessment carried out by an experienced global team with an annual review for all clients. As you heard earlier, it's important to remember that our credit lines are extended on a noncommitted basis. This means we can withdraw them at any time with as little as one day's notice. As these graphs show, we focus on sector, product and region to ensure we build a diverse and broad lending portfolio with low concentrations. You'll see on the -- you've seen the next 2 slides before as part of our business presentations, but I want to highlight what this means for me as a risk manager. These slides highlight one of the key outcomes of our end-to-end risk framework which is a stable profit and loss profile. In Market Making, you've heard about this being a client flow business and our ability to intermediate between markets. Simon touched on this, and it's important to stress that we don't make large profits from taking a directional view on markets. One way to see this is to look at the distribution of the revenue and our value at risk or VaR. This is a standard industry measure used to predict the worst possible daily loss given a specific time frame. Marex's daily average VaR in our market-making books was $3.2 million in 2024, meaning the average -- the total amount that we would expect to lose on a given day would be $3.2 million over those 400 trading days. This has grown in a controlled manner with the growth of the firm over the last 5 years. And this is a deliberate outcome of us managing our risk appetite and remains low in absolute terms. It's worth observing that our realized losses over the last 2 years are much lower than our predicted VaR, and as you can see from the daily return chart, we see it's positively skewed as you heard earlier, mostly to the right of 0 with 86% positive trading days. Our solutions business is also a client-driven business, as Nilesh explained, OTC hedging solutions and structured products. We don't intermediate risk in quite the same way as our trading desk, but are building bespoke products and hedge away almost all of our local risk on day 1. This means we have a flat local risk profile that only moves for larger market moves over a longer duration of this portfolio at around 18 months. We control this risk using concentration, sensitivity limits and stress testing. Once again, the revenue profile shows a positively skewed distribution. Further, unlike a traditional trading house which may show what we call fat tails or big gains and losses in the wings, our portfolios in the slides you've seen here are what we would call very normal. Compared with 2022, our revenue distribution is in fact now higher and narrower as Nilesh highlighted. So in conclusion, what you've seen today is that risk is part and parcel of everything that we do. As I've said before, importantly, everyone who's been in front of you today is a risk manager. The breadth of our business from clearing and market making to agency execution means that we can confidently manage complex portfolios and take exposures knowing that we have the ability to control and recycle risk to support our clients. Our performance through the market volatility of the past few years demonstrates the success of the business model with strong risk oversight. Thank you for listening. Ian, over to you.

So you guys did a fantastic job of staying on time. So well done to all of you. As well as doing great presentations. Before we get to questions for these three presenters, I did want to just address a couple of questions that have come in from the people who are online. Obviously, a lot of important investors weren't able to come and join us here in the NASDAQ building, but they have sent through some questions. So I did want to just let you know what those ones were. And just to address those people feel that we are being responsive to that.

So the first question is actually similar to one of the questions we were asked here, what's the risk of a liquidity squeeze or funding headwind from your structured notes funding source? And as we indicated earlier, the largest stress that we have in our own internal stress tests is the additional cash that needs to be posted for our hedges for our structured notes. And just sort of for clarity in terms of these numbers. I mean, the amount of cash that we operate with -- and I sort of use the most recent numbers because that are the ones I'm familiar with, is probably $2.4 billion. So when we say we have $1 billion headroom, that's $1 billion of headroom relative to what the regulators are saying you actually need, which is about $1.3 billion, $1.4 billion. And that is a moving number based on what is our level of client access and a whole slew of various things. And so what we're anticipating in our liquidity stresses and we're well, well above sort of the requirements of those is very substantial outflow of liquidity in a stress environment to support our hedges. And even post that, which is baked into the -- our own stresses and is baked into the numbers that the regulators are saying as part of that minimum is already sort of included in that. The second question was, in highlights the importance of clearing services, what's the link between net profit to Marex and NII on client funds, 14% of revenues. What is the bit that sort of drops through to the bottom line? So I mean, this is a question we get a fair amount, which is how dependent is our profitability on net interest income and in particular, in a world where we're facing anticipated decline in rates, what's that likely to do? Now Rob shared with you the page that shows that in 100 basis points of movement is around $20 million of impact. And the logic and the intuition behind that is one-off -- a big chunk of our balance is we're just taking a spread. So the exposure we have is on the 40% where we share with clients. And just as the amount we earn on balances and have to share with clients will be impacted by lower rates. The liabilities that we have are all swapped and so that costs you less. And as rates drop, the carry that we have on our hedge is also going down. So the net effect of that is 100 basis points movement across a static portfolio is about $20 million of PBT. Obviously, and you saw that in the fourth quarter, to the extent that we're able to grow balances, and Tom has done a good job of describing to -- the momentum we have in that particular franchise, the added balances offset the impact of lower rates. And so we saw that quite powerfully in the fourth quarter. And while you don't know that these things are going to offset completely, there's no anticipation in that sort of $20 million number that Rob was sharing with you that we're going to be able to grow balances, but obviously, we hope and intend that we will be able to do that. The other point that I would make and do regularly make with regard to this is, I genuinely don't see interest income as sort of fundamentally separate from all the things that we're doing within our clearing business. And if rates really did drop a lot, I think that the clearing business -- the whole basis of pricing would just change so that more of what we earned is in sort of commissions. So when we deal with clients, we have a certain amount of risk that we take on. There's a certain return that we're expecting. That's a balance of commissions and net interest income. If it turned out that the net interest income was dropping in some precipitous way, we would adjust. Just as in the reverse case, where rates went up very quickly, our clients came to us and said, that's kind of not quite right. You're taking too big a share of the economics and we ended up over about a quarter having to readjust a lot of our arrangements with our clients. So it's obviously an important driver of the firm. It's only 14% of our revenues. And I think we're actually in a position where we'll be able to adjust to those changes. And then the last question was, can you please discuss how safe and effective your risk controls are with regard to client funds? I mean I think for those of you who are familiar with our industry now, I mean, the CAS rules with regard to segregating client balances are extremely strict. We operate essentially parallel infrastructure. So we would have separate accounts and bank accounts for sort of segregated activity and house activity. So there's no mingling of that cash. There's no mingling of that activity. They operate as completely separate sort of streams through Marex. And the regulators and we are just enormously attentive to ensuring that we're compliant with an incredibly sort of complex set of rules, particularly on the CAS side. Now for -- on the non [ SEC ] side, and there are some client balances that are included with the firm, those balances don't have the same cash protections but we're obviously sort of tracking what those amounts are and clients are aware of that is -- of what those are through their statements. So those are answers. They can't do follow-up because it's online. But hopefully, I've done sort of a good job of addressing those questions. So having done that, happy to take questions now on these 3 sessions that you have after lunch.

Thanks, Ian, for today. Can you guys talk a little bit about how you view the firm's liquidity mix and sort of capital mix changing over time as the firm grows into various areas that you talked about? So the way you're kind of -- you had a chart that showed the liquidity stack like the 1 in the capital cycle, the way it looks today is that will you see sort of consistent over time or that's going to evolve? And then the follow-up to that is AT1, I know it's obviously expensive form of capital. Is there anything you guys could do to take that down?

I'll try and answer both of those. I think the -- in terms of the sort of funding mix, we started with the structured notes as the sort of primary form of funding. Still a very important funding vehicle for us. But just because we're larger and because the overall sort of cash holdings are larger, we would expect to be more weighted towards public bullet securities. So not those securities that don't have the sort of liquidity, some of the liquidity characteristics of structured notes. As Ian mentioned earlier, we issued in the U.S. market, we are SEC registered, and that is -- that's sort of a very deep and helpful source of liquidity, and I expect that will grow. So we have about $1 billion of -- sort of public market funding. I expect that will be the component that grows the fastest. I don't expect us to add significant amount of bank facilities where we do have those, they're quite sort of specialists supporting sort of clearing requirements. In terms of AT1, we think that that's a sort of useful instrument for adding capital to the group. We've issued once 2.5 years ago, 3 years ago, something like that. The market pricing has improved. So I mean I would expect now not to be paying 13.25% to be paying something in the sort of high single digits. And we are pretty confident that there's a buyer market there for us as well. So although you want to be only raising capital when you need it, I think that market is available to us. And I'd expect to use it.

Yes. I mean what I would say, Alex, is the first AT1 was issued in anticipation of being -- of the ED&F transaction and not being sure how that was exactly going to play out, but not wanting to not be able to do it because of sort of capital. The way we thought about that is on an after-tax basis, that was like 9.75%, and that was actually relatively cheap equity, given that it's up to 25%, it qualifies under S&P and S&P Capital is actually our constraint. And if we were able to as sort of Paolo indicated, do another AT1 and it was in the, I don't know, high 8s, low 9s, just to pick a number. And then you basically get a tax deduction on that. You're actually talking about something that is compliant equity in the 7s. That's actually quite attractive to us.

Yes. So maybe just a bigger picture question. You still have a number of private equity owners. So just curious if you have any sense of what those owners' plans are for their remaining shares?

I mean I think the position with regard to that is the same as it was as we sort of described last year, which is they made an investment a long time ago. The original investment was 2010. I think their investors are doing well now, but they don't have any interest in ongoing and persistent role in managing the firm. I think they're obviously price-sensitive, and they'll need to make a decision with regard to their exit that's related to that. But certainly, the expectation that we have and they have is that we will steadily and while we can do it in a sensible way, reduce the overhang. And if we can do that sort of sooner, whatever sooner means rather than later, I think that would be attractive to sort of everybody. So there's no -- it's all going to be done in a very orderly way. It's all going to proceed in a way that the firms engaged, the private equity guys are engaged. That relationship is a strong relationship. And I think that we can continue to deliver as we have, I think there'll be opportunities for them to be able to sell down their positions. All right. Well, why don't we sort of then just move to the concluding slides. I mean, hopefully, you found today useful. We certainly have enjoyed the questions and the interaction is very much appreciated. It was important for us, I think, to give you an opportunity to meet with the team and the people who are behind our businesses. We wanted to make sure that you had an increasingly rich sense of what it is that sort of goes on 1 level, 2 level or 3 levels down on the numbers that you see each quarter. In terms of the key messages, we are executing successfully on our strategy. We're well capitalized. We're very attentive to risk. We're very attentive to liquidity. We recognize how critically important those functions are. Hopefully, you've got a sense listening to each of the business owners that their background is essentially in risk management, how critically important that is. I mean, in my own methodology, you can have sales people running businesses or you can have traders running businesses. We've pick traders. Salespeople can be enthusiastic about and optimistic about outcomes. You almost want people who are more conservative, more concerned about what can go wrong. And definitely, we have a great blend of people who are ambitious for what they can accomplish as well as are very cautious about risk. We believe we've set up the firm to deliver structural growth, notwithstanding expected cyclical headwinds. Again, we're not naive about the environment that we're -- we could move into, whether that's lower rates, whether that's lower volumes, whether that's sort of stress on players because of sort of credit, but we're alive to those risks and we run our business thinking about those risks -- but again, we remain extremely optimistic. We've talked about the success we've had growing organically. And certainly, if you look over the last 3 years, 75% of that growth is organic, although I sort of just struck again, listening to sort of Paolo's material, just how well we've really done as a firm in generating value as a result of our M&A activity and how these various acquisitions have really flourished as part of the Marex platform. And so we remain very committed to that as a path to growth. And as I indicated earlier, I think it will be an even more important component of our growth going forward. We wanted to communicate how the resilience, diversification of our business has been increasing and how that plays through in more reliable daily profitability, we've already had some positive feedback from people about the distribution that we shared. And we're going to continue to look for ways to make it more real to people, how it is that so much of our activity is recurring in nature and how reliable our profitability is. 2025 has been a very strong start. The reaction to our announcement this morning has been heartening. So we're grateful to all of you who have been texting away to everybody and encouraging them to buy Marex. So that's terrific. And hopefully, you've got a sense here today of the combination of what a strong team we have at Marex, what a strong organization we have and how quietly optimistic we are about our prospects. So thank you all for that. Just finally, I do want to thank a group of people who have been hugely important in terms of making today successful. So the -- whether it's sort of the IR team that helped us all with our materials, whether it's sort of the event folks who have made sure that this has proceeded so smoothly. Thank you all for that. And then I've said sort of my sort of most sincere thanks actually till the end. Sort of -- we have an organizational announcement to share with you, which is Rob Coates, who has been sort of Paolo and my partner as we've sort of built out our effort to reach out to investors is taking another role within Marex. He's actually going to be working with Tom in clearing. But Rob has been -- has taken sort of a function from basically nothing and turned it into what at least from our perspective, is as good an IR function as exists for a firm of our scale and probably as good as exist for firm greater size. We're also fortunate that the Rob has organized a very smooth transition and that Adam will be sort of taking over as our Head of IR. So I think both from Paolo and I want to sort of thank Rob for his incredible contribution. We've had a great year with the IPO, with the secondary, with the debt deal, with this particular IR session and we couldn't have done it without you, Rob, so thank you. So thanks, everybody.