TMX Group (X) Investor Day 2024 summary

Strategic vision and growth objectives

• Aims to double revenue to $2B in 7 years, accelerating from the previous 14-year doubling, with a focus on both organic growth and selective acquisitions.

• Four growth strategies: expanding listings/services, targeting new client segments, growing beyond market data, and expanding internationally, especially in the U.S.

• Over 50% of revenue now comes from high-growth business segments, up from 33% in 2018, with 55% recurring revenue as of Q1 2024.

• Achieved 50% of revenue from outside Canada for the first time in Q1 2024, reflecting a strong global footprint.

• Strategic focus on expanding products/services for public and private companies, leveraging technology modernization and global talent.

Business segment performance and innovation

• Capital Formation: Maintains global leadership in listings, with a strong pipeline of international and private companies; non-listings revenue has grown from CAD 17M to over CAD 100M in 10 years.

• Trading & Post-Trade: Derivatives and post-trade services are positioned as new growth engines, with innovations like CCMS, SGC notes, and AlphaX expansion.

• Data & Analytics: Datalinx and VettaFi drive recurring, global revenue; VettaFi acquisition expands ETF and index capabilities, with 97% of top 30 U.S. ETF issuers as clients and 99% of revenue outside Canada.

• Trayport: Fastest-growing business, doubling revenue and staff since acquisition, expanding into new asset classes and geographies such as oil, Japan, and North America.

• ETF business grew 5.7X in value since 2013, reaching $398B in listed ETF value and 989 ETFs by 2023.

Financial guidance and capital allocation

• Top-line revenue grew 7% annually, surpassing the 5%+ target, with double-digit free cash flow growth and 12% FCF CAGR since 2018.

• Dividend payout has doubled since 2016, with a target payout range of 40%-50% of adjusted EPS and a 10% CAGR since 2018.

• Leverage increased to 3.6x after VettaFi acquisition, with a plan to return below 2.5x by end of 2025; Debt/Adjusted EBITDA at 1.7x in Q1 2024.

• Over $277M returned to shareholders in 2023, more than double 2017 levels.

• Continued investment in technology and talent, with operating leverage expected to drive double-digit EPS growth over the long term.