Plus500 Ltd. · LSE:PLUS
Plus500 — H1 2019 Earnings Presentation
35 slides from Plus500's earnings presentation, August 2019
Slide 1: Results for the six months ended 30 June 2019
Results for the six months ended 30 June 2019 London Stock Exchange symbol: PLUS * Illustrative figures
Slide 2: H1 2019 Highlights
H1 2019 Highlights Financial Performance Business Overview H1 2019 H2 2018 H1 2018 Revenue ($m) 148.0 254.9 465.5 Q2 2019 performance improved materially, Operating Expenses ($m) 83.5 98.3 116.8 following low levels of volatility in the financial markets in Q1 2019 Operating Profit ($m) 64.5 156.6 3
Slide 3: H1 2019 Highlights: Shareholders' Returns
H1 2019 Highlights Shareholders’ Returns Earnings Per Share ($) Dividend of $0.2734 per share (total payout of $31.0m), 60% of H1 2019 net profit 2.5 $50.0m share buyback programme announced 2 Revised distribution policy introduced from next reporting date 1.5 (H2 2019), to return 60% of net profit
Slide 4: Operating Highlights
H1 2019 Highlights Operating Highlights For the second consecutive year, Plus500 remains the No.1 CFD broker in UK1, Spain2 and Germany3 as well as Australia's best CFD mobile platform4 Q2 2019 was the Company’s strongest quarter for new and active customer metrics since the introduction of ESMA’s p
Slide 5: Business Performance
Business Brand Regulatory Financial Investment Performance Awareness Framework Overview Summary 5
Slide 6: Revenues Breakdown
Business Performance Revenues Breakdown Revenue ($m) ARPU1 Q2 19 Q1 19 % Diff H1 19 H2 18 % Diff Q2 19 Q1 19 % Diff H1 19 H2 18 % Diff Pro EEA 21.0 12.3 71% 33.3 92.6 (64%) 4,693 2,748 71% 6,699 16,634 (60%) Retail EEA 31.5 12.6 150% 44.1 60.1 (27%) 418 182 130% 445 613 (27%) Total EEA 52.5 24.9 111
Slide 7: Active Customer and New Customer metrics
Business Performance Active Customer and New Customer metrics Active Customers1 New Customers2 Q2 19 Q1 19 % Diff H1 19 H2 18 % Diff Q2 19 Q1 19 % Diff H1 19 H2 18 % Diff UK 16,117 15,273 6% 22,141 21,192 4% 4,255 4,368 (3%) 8,623 7,659 13% EEA 63,837 58,428 9% 82,025 82,374 - 13,487 10,843 24% 24,3
Slide 8: Key Financial Indicators and Lean Cost Structure
Business Performance Key Financial Indicators ($m) Lean Cost Structure ($m) H1 19/H2 18 H1 19/H1 18 100% H1 2019 H2 2018 H1 2018 Growth Growth 90% (28%) (25%) (28%) (26%) 24.4 56.6 Advertising and 80% 23 32.2 marketing costs 51.3 61.6 (17%) 63.8 (20%) 70% 60% Processing costs 7.2 7.9 (9%) 12.2 (41%)
Slide 9: Revenue Split by Customer Tenure
Business Performance Revenue Split by Customer Tenure FY 2017 FY 2018 H1 2019 H1 2019: 73% of the Group’s 5% 8% 4% 11% revenues derive from customers 12% 14% who have traded for more than 32% 12% 23% one year 17% 13% 36% 53% 15% 53% 73% 73% 45% EEA - H1 2019 PROFESSIONAL & RETAIL H1 2019 Professiona
Slide 10: High Return on Marketing Investment
Business Performance High Return on Marketing Investment ($m) 150 125 * * * 16* Marketing spend per 104 * 13* 13* year and by channel * * 9* 9 100 15 Online 6 27 Affiliates 1 Offline 50 4 103 7* 1 89 94 4 3 77 * Majority is Atletico Madrid sponsorship deal 1 56 2 * 32 40 21 0 * 2012 2013 2014 2015 2
Slide 11: Plus500 Approach to Customer Execution
Business Model Plus500 Approach to Customer Execution Plus500 acts as principal to the customer trade (like its peers) Plus500 has no 'opinion' on direction of market movements The Group’s market exposure is dictated by customers’ views of market long/short opportunities All customer positions are i
Slide 12: Analysis of Customer Churn
Business Performance Analysis of Customer Churn Churn Q2 2019 saw the lowest churn since the Company’s 2013 IPO 70% 62% 16% churn, aided by continued focus on retention of Active 2015 60% Customers 2016 50% 48% 2017 Broadened product offering 43% 41% 41% 2018 Enhanced user experience 40% 38% 35% 37%
Slide 13: Operational Progress
Business Performance Operational Progress Over 100 new CFDs introduced to the trading platform during H1 2019, including EUA commodity, Lithium and Battery and Thematic indices and Uber, following its IPO The first major CFD provider to successfully incorporate WhatsApp into its customer service off
Slide 14: Brand Awareness
Business Brand Regulatory Financial Investment Performance Awareness Framework Overview Summary 14
Slide 15: Market Share in the CFD Market
Brand Awareness Market Share in the CFD Market For the second consecutive year, Plus500 has been rated the No.1 CFD provider in the UK1, Spain2 and Germany3, as well as 23% Australia’s best CFD mobile platform4 Recent achievements also include: 17% Market Share (%) 14% UK No. 1 for satisfaction for
Slide 16: Global Growth Opportunities
Global Growth Opportunities Operational: Enhancing customer acquisition rates and improving retention levels Increase growth rates by improving brand awareness globally through marketing activity Expansion within current regions through new licences Strategic: Expansion into new geographic regions l
Slide 17: Regulatory Framework
Business Brand Regulatory Financial Investment Performance Awareness Framework Overview Summary 17
Slide 18: Global Strong and Robust Regulatory Framework
Regulation Global Strong and Robust Regulatory Framework HQ Monetary Authority ISRAEL SECURITIES of Singapore AUTHORITY 18
Slide 19: Developments in the Period
Regulation Developments in the Period Plus500 has successfully adjusted to the implementation of ESMA’s product intervention measures in August 2018 After the period end, on 31 July 2019, ESMA announced that it will not renew its temporary intervention measures. Majority of EU-member states have ado
Slide 20: Financial Overview
Business Brand Regulatory Financial Investment Performance Awareness Framework Overview Summary 20
Slide 21: Income Statement
Financial Overview Income Statement Key Financial Indicators – Income Statement ($m) H1 2019 revenues fall mainly due H1 19 / H2 18 H1 2019 H2 2018 FY 2018 to low levels of market volatility in Growth the first quarter of 2019 Trading income (net) 148.0 254.9 (42%) 720.4 Strong EBITDA margin Selling
Slide 22: Balance Sheet
Financial Overview Balance Sheet Key Financial Indicators – Balance Sheet ($m) 30/06/2019 31/12/2018 Growth Cash and cash equivalents 327.3 315.3 4% Other Current Assets 19.2 12.8 50% Total Current Assets 346.5 328.1 6% Non Current Assets 10.5 4.8 119% Total Assets 357.0 332.9 7% Current Liabilities
Slide 23: Strong Cash Generation
Financial Overview Strong Cash Generation Key Financial Indicators – Cash Flow ($m) H1 19 / H2 18 H1 2019 H2 2018 FY 2018 Growth Operating activities: Cash generated from operations 44.4 161.0 (72%) 495.0 Interest received, net 2.2 2.3 (4%) 3.8 Income tax paid, net (28.0) (35.2) (20%) (98.4) Net cas
Slide 24: Investment Summary
Business Brand Regulatory Financial Investment Performance Awareness Framework Overview Summary 24
Slide 25: Plus500 is, at its core, a technology company
Cutting-Edge Proprietary Technology Plus500 is, at its core, a technology company Leadership in innovation and Research & Development is Upgrading functionality and appearance of the trading a key driver of competitive advantage platform to aid retention of, and appeal to, sophisticated traders: Pro
Slide 26: Instr
Instr USD/SEK NEO Ripple XRP Bitcomn Occidental EURYCAD Germany 30 Aud/USD Heating O# 0.3204 11,810.76 1.4778 1.4763 11,713.42 11,714.58 0.67912 0.67948 1.9507 Switch to Real Money High/Low 9.6050 / 9.5668 16.507 / 16.352 11.90/11.42 0.3207 /0.3102 12,324.00 / 11,580.86 Maret 6 cones 1.4860 / 1.4758
Slide 27: Popular instruments
Popular instruments ~ Current sell rate USD/SEK 0,24 %
Slide 28: Reinforcing Financial and Operating Discipline
Strategic Update Reinforcing Financial and Operating Discipline Adhering to an entrepreneurial approach, adapting rapidly to changing customer requirements, resulting in a market-leading offering delivered through cutting-edge proprietary technology Recruitment and development of the best people Del
Slide 29: Investment Summary & Outlook
Investment Summary & Outlook Good results during a relatively low volatility period The Group remains on track to meet current market expectations for 2019 Customer acquisition rates remain ahead of the industry Customer retention and engagement continues to improve Appealing increasingly to more so
Slide 30: Appendices
Appendices = Plussoo
Slide 31: Dividend and Share Buyback Payouts
Financial Overview Dividend and Share Buyback Payouts Total Shareholders’ Return of $848m ($782m in cash dividends and $66m in share buyback programmes) 450,000,000 $395m 400,000,000 350,000,000 300,000,000 250,000,000 200,000,000 150,000,000 $123m $110m $87m* 100,000,000 $60m $65m 50,000,000 $8m 0
Slide 32: Risk Management Revenue Split
Risk Management Revenue Split Rolling 5 Year Performance H1 19 Performance Dealing Spreads Overnight Customer Trading Amount # of negative Charges , 9% Performance, 1% ($m) revenue days Difference between the buy price and the sell price of a CFD 0-0.25 16 0.25-0.5 7 Overnight Charges 0.5-1.0 2 Inte
Slide 33: Minimising Downside Risk: 85% Positive Trading Days In H1 2019
Risk Management Minimising Downside Risk: 85% Positive Trading Days In H1 2019 In H1 2019 the Group made a positive revenue on approximately 85% of the trading days with remaining 15% of trading days showing mostly relatively immaterial negative revenue. $25,000,000 $20,000,000 Crypto Volatility $15
Slide 34: Market Leading Technology
Business Model Market Leading Technology Proprietary technology, developed in-house - key differentiator and flexible advantage System Architecture User Interface rapid product development consistent experience across all platforms “Marketing Machine” efficient acquisition of new customers Back Offi
Slide 35: Disclaimer
Disclaimer The Presentation does not constitute or form part of any offer or invitation to sell or issue, or any solicitation of any offer to “anticipate”, “projects”, “would”, “could”, “envisage”, “estimate”, “intend”, “may”, “plan”, “will” or the negative of those, variations purchase or subscribe