Plus500 Ltd. · LSE:PLUS
Plus500 — H1 2022 Earnings Presentation
31 slides from Plus500's earnings presentation, Aug 17, 2022
Slide 1: H1 2022 Interim Results
H1 2022 INTERIM RESULTS London Stock Exchange symbol: PLUS Presented by: David Zruia, Chief Executive Officer Elad Even-Chen, Chief Financial Officer 17 August 2022
Slide 2: Agenda
AGENDA OVERVIEW OPERATING FINANCIAL OUTLOOK REVIEW OVERVIEW
Slide 3: Overview
OVERVIEW * Plus500 IT’S TRADING WITH A PLUS
Slide 4: H1 2022 – Another Outstanding Performance
H1 2022 – ANOTHER OUTSTANDING PERFORMANCE Governance & Customer KPIs Financial Performance Strategy Sustainability Strong base of Active Excellent revenue, EBITDA and Further diversification of Continued development of Customers1 cash conversion performance Board composition, including Plus500’s pos
Slide 5: Plus500 – Well Positioned as a Global Multi-Asset Fintech Group
PLUS500 – WELL POSITIONED AS A GLOBAL MULTI-ASSET FINTECH GROUP High value, long term and Market-leading proprietary technology sizeable customer base – marketing, operations and product Very robust Flexible and scalable financial position business model and cost base Range of compelling Diversified
Slide 6: Our Proprietary Technology Drives Our Business
OUR PROPRIETARY TECHNOLOGY DRIVES OUR BUSINESS Front End and Back End Systems Architecture CRM Automated Verification Technologies Cashier Technology Analysis Tools OTC SHARE FUTURES DEALING Marketing Technology AI & Big Data Risk Management Technology PLUS500 PRODUCTS Supported by highly regulated
Slide 7: Major Growth Opportunities for Plus500
MAJOR GROWTH OPPORTUNITIES FOR PLUS500 New Products New Markets Increased Momentum Deepening Customer in Strategic Markets Engagement 7
Slide 8: The US Opportunity
THE US OPPORTUNITY INSTITUTIONAL OPPORTUNITY RETAIL OPPORTUNITY Strategic position built as a market infrastructure provider Intuitive and innovative – supporting clients with new trading platform brokerage-execution and for substantial retail clearing services trading market 8
Slide 9: Operating Review
Q OPERATING REVIEW * Plus500 IT’S TRADING WITH A PLUS
Slide 10: H1 2022 Operating Overview
H1 2022 OPERATING OVERVIEW KEY OPERATIONAL DRIVERS: OPERATIONAL OUTPUTS: Strength, capability and resilience 82% of OTC revenue derived from customers trading of our proprietary technology with Plus500 for over a year Continued investment in our Increased customer duration on OTC trading platform te
Slide 11: Financial Highlights
FINANCIAL HIGHLIGHTS Strong EBITDA Flexible Consistently high cash Robust balance Plus500 continues to performance cost base generation and conversion sheet maintained hold no debt or loans REVENUE ($M) EBITDA ($M) EARNINGS PER SHARE (BASIC) ($) 327.9 437.2 720.4 354.5 872.5 718.7 511.4 151.0 259.2
Slide 12: H1 2022 KPIs by Region
H1 2022 KPIS BY REGION Active % New % Revenue % ARPU2 Customers proportion Customers proportion ($m) proportion ($) UK 27,135 12% 7,746 14% 66.8 13% 2,461 EEA 128,327 59% 33,274 58% 234.0 46% 1,824 Australia 21,016 10% 5,653 10% 40.5 8% 1,926 RoW1 40,450 19% 10,602 18% 170.1 33% 4,205 Total 216,928
Slide 13: Market Positions
MARKET POSITIONS Leading industry positions in core Building strategic market position in OTC markets – No.1 provider in: US futures market: UK Developing position as market infrastructure provider Germany Launching tailored product for retail market Spain OTC MARKET SHARE1 (%) CUSTOMER FEEDBACK Plu
Slide 14: Marketing Investment
MARKETING INVESTMENT Cumulative average revenue per active customer over time Targeted, efficient online marketing initiatives driven by Plus500 proprietary 2015 2016 2017 2018 2019 2020 2021 2022 technology $5,000 $4,000 Continued strong $3,000 investment levels in marketing technology $2,000 $1,00
Slide 15: Long Term Customer Relationships
LONG TERM CUSTOMER RELATIONSHIPS 8% 4% 11% 11% 14% 6% 4% 15% 9% 16% 12% 17% 9% 23% 16% 16% 28% 73% 73% 24% 66% 19% 79% 21% 82% 44% 46% 53% 46% 28% FY-2018 FY-2019 FY-2020 FY-2021 H1-2022 0-6 months 7-12 months 1-3 years 3-5 years 5+ years >1 year Long term, sustainable Supported by new Product diver
Slide 16: Long Term Customer Loyalty
LONG TERM CUSTOMER LOYALTY A long term customer base: OTC customers trading Supported by investment with Plus500 for >1 year (% of total OTC revenue) in AI & Big data retention 90% technologies 80% 70% 60% 50% New Premium Service 40% 30% 20% 10% Supported by high 0% value customers 2016 2017 2018 20
Slide 17: Marketing
MARKETING Global Advertising Campaign to build brand Technological Approach optimises our awareness in key strategic markets marketing investment and drives ROI Event tracking Real time optimisation Performance Marketing & statistics Machine Marketing ads review Traffic trends & segmentations 17
Slide 18: High Return on Marketing Investment
HIGH RETURN ON MARKETING INVESTMENT Cumulative Return from OTC Registrations ($m) 2018 REGISTRATIONS AND 2019 REGISTRATIONS AND 2020 REGISTRATIONS AND 2021 REGISTRATIONS AND CUMULATIVE RETURNS CUMULATIVE RETURNS CUMULATIVE RETURNS CUMULATIVE RETURNS Cumulative cohort revenue Cumulative cohort revenu
Slide 19: Financial Overview
al FINANCIAL OVERVIEW * Plus500 IT’S TRADING WITH A PLUS
Slide 20: Income Statement
INCOME STATEMENT H1 2022 H1 2021 % Change H2 2021 % Change Revenue 511.4 346.2 48% 372.5 37% Outstanding revenue performance Selling and Marketing Expenses 169.5 131.4 29% 148.4 14% Driven by strong level of Administrative and General Expenses 38.3 28.4 35% 25.9 48% trading activity EBITDA 305.3 187
Slide 21: Cost Profile
COST PROFILE H1 2022 FY 2021 % Change Advertising, technology and marketing investment 82.5 172.1 (52%) Marketing Investment Commissions to processing companies 23.7 40.8 (42%) continues to reflect efficiency Payroll and related expenses 19.7 33.0 (40%) Variable bonuses 15.9 14.2 12% Share-based com
Slide 22: Cost Profile
COST PROFILE Fixed 27% 27% FLEXIBLE AND LEAN COST STRUCTURE H1 2022 H1 2021 Relatively high level of marketing investment to support continued customer attraction and retention 73% 73% Dynamic marketing investment to continue to be made in light of opportunities to drive ROI Variable Commissions to
Slide 23: Balance Sheet
BALANCE SHEET H1 H1 % FY % H1 H1 % FY % 2022 2021 Change 2021 Change 2022 2021 Change 2021 Change Cash and Cash Equivalents 995.5 722.5 38% 749.5 33% Current Liabilities 262.3 162.7 61% 157.0 67% Other Current Assets 24.9 35.3 (29%) 32.7 (24%) Non Current Liabilities 11.9 10.2 17% 4.5 164% Total Cur
Slide 24: Cash Flow
CASH FLOW Continued increase in cash OPERATING ACTIVITIES: H1 2022 H1 2021 % Change FY 2021 % Change balances to $995.5m at period end Cash generated from operations 344.9 163.4 111% 383.0 (10%) Driven by strong cash generation Interest received, net 2.2 4.1 (46%) 6.2 (65%) Income tax received (paid
Slide 25: Our Approach to Capital Allocation
OUR APPROACH TO CAPITAL ALLOCATION REQUIRED REGULATORY CAPITAL AND ADDITIONAL RISK MANAGEMENT CAPITAL: CURRENT SURPLUS CAPITAL: c.$525M* OF REQUIRED CAPITAL – COVERING: UP TO c.$470M* TO BE INVESTED IN: Regulatory Capital Growth Opportunities Through organic investments and targeting additional Work
Slide 26: Our Approach to Shareholder Returns
OUR APPROACH TO SHAREHOLDER RETURNS Updated shareholder returns policy – SINCE 2013 INTERIM 2022 SHAREHOLDER RETURNS increased share buyback momentum: $170.4M At least 50% of net profits will continue to be paid to shareholders $2.2 Bn $244.1m through dividends and share buybacks on a half-yearly ba
Slide 27: Outlook
1») OUTLOOK * Plus500 IT’S TRADING WITH A PLUS
Slide 28: Outlook
OUTLOOK OUTLOOK: MEDIUM TO LONG TERM VIEW: Following several positive upgrades to market Plus500 will continue to pursue major growth expectations related to Plus500’s financial opportunities, through organic investments and performance, which took place earlier this year, by actively targeting acqu
Slide 29: Q&A
7 Q&A * Plus500 IT’S TRADING WITH A PLUS
Slide 30: Disclaimer
DISCLAIMER The Presentation does not constitute or form part of any offer or invitation to sell or issue, or any solicitation of any The Company does not accept any responsibility for the accuracy or completeness of any information reported by offer to purchase or subscribe for, any shares or other
Slide 31: Thank You
THANK YOU LA Plus5OO IT’S TRADING WITH APLUS