Ig Group Holdings Plc · LSE:IGG
Ig — H1 FY13 Earnings Presentation
27 slides from Ig's earnings presentation, January 2013
Slide 1: Results Presentation
RESULTS PRESENTATION 6 Months ended 30 November 2012 IG | NOVEMBER 2012 | 1
Slide 2: Disclaimer
DISCLAIMER IG | NOVEMBER 2012 | 2
Slide 3: Overview
OVERVIEW Benefits of IG's scale and market leadership are demonstrated in quieter markets FY13 H1 PERFORMANCE COMPETITIVE POSITION STRATEGY FY12 PERFORMANCE FY13 H1 five year volatility low in contrast Market share growth in key markets with the extreme volatility in FY12 H1 Scaling back of co
Slide 4: Financial Review
THANK YOU FINANCIAL REVIEW IG | NOVEMBER 2012 | 4
Slide 5: FY13 H1 Summary
FY13 H1 SUMMARY FY12 H1 provides very challenging comparatives FY13 H1 RESULTS 5 YEAR REVENUE AND PBT1 Net trading revenue £169.0m, down 14% PBT1 £81.1m, down 21% Diluted EPS 16.04p, down 22% £59.3m own funds generated from operations Interim dividend per share flat at 5.75p 1. Results exc
Slide 6: Income Statement
INCOME STATEMENT Operating costs held flat in a lower trading environment YEAR ON YEAR COMPARISON Net trading revenue down 14% − Active clients down 9% − Revenue per client down 5% Net operating income 11% lower – Reduced betting duty (£4.4m) Operating costs held flat 1. Net trading revenue ex
Slide 7: Revenue Bridge
REVENUE BRIDGE Reduced trading activity driven by lower volatility FY12 H1 – FY13 H1 REVENUE BRIDGE FY12 H2 Bridge FY13 H1 Bridge FY13 H1 dull markets impact new and existing clients FY13 H1 revenue from new clients exceeds attrition IG | NOVEMBER 2012 | 7
Slide 8: Active Clients
ACTIVE CLIENTS Client growth most impacted by August and September comparatives REVENUE AND CLIENT TREND FY12 - FY13 YEAR ON YEAR REVENUE AND CLIENTS IG | NOVEMBER 2012 | 8
Slide 9: Revenue Mix
REVENUE MIX Significant reduction in commodities and equity indices revenue YEAR ON YEAR COMPARISON Revenue mix relatively constant year on year % of total H1 revenue – Except commodities revenue (6% FY13 H1 vs 12% FY12 H1) £22m of the £26m reduction in H1 year on year revenue relates to commodi
Slide 10: Trading Revenue per Client
TRADING REVENUE PER CLIENT Down on FY12 H1 but flat with FY12 H2 HALF YEARLY REVENUE BY CLIENT FY09 - FY13 H11 As expected FY13 H1 down on Europe FY12 H1 UK CFD Most regions up on FY12 H2 UKSB Europe most susceptible to the Australia reduction in equity indices revenue Japan – Represents aroun
Slide 11: Volatility of Trading Days
VOLATILITY OF TRADING DAYS FY13 H1 average daily revenue decreases DAILY TRADING REVENUE VOLATILITY TREND YEAR ON YEAR TRADING REVENUE DISTRIBUTION IG | NOVEMBER 2012 | 11
Slide 12: Cost Base Detail
COST BASE DETAIL Flat operating costs YEAR ON YEAR COMPARISION 1. FY13 H1 Salary cost includes £1.3m redundancy programme costs 2. FY12 H2 Exceptional items relate to a property lease write back benefit IG | NOVEMBER 2012 | 12
Slide 13: Operating Cost Bridge
OPERATING COST BRIDGE Flat year on year operating costs with a lower exit run-rate FY12 H1 – FY13 H1 OPERATING COSTS BRIDGE Flat year on year total operating costs including £4.6m non-recurring costs – Redundancy programme (£1.3m) – Echelon legal case (£2.3m)1 – Brand re-launch (£1.0m) Total cos
Slide 14: Net Own Cash Available
NET OWN CASH AVAILABLE £59.3m own funds generated from operations FY13 H1 NET OWN CASH AVAILABLE BRIDGE FY13 H1 NET OWN CASH AVAILABLE BRIDGE Broker margin requirement increased in period by £47.0m from low May-12 position – Recent high of £277.1m (see appendix 4) £180m committed bank facilities
Slide 15: Regulatory Capital
REGULATORY CAPITAL Importance of a strong regulatory capital position YEAR ON YEAR COMPARISON 14% increase in total capital resources from prior year – Flat with year end Regulatory capital surplus of 203% Buffer against market uncertainty IG | NOVEMBER 2012 | 15
Slide 16: Regulation
REGULATION Global regulatory activity ongoing: no material impact expected European FTT – France: Tax implemented for cash equities. No impact on client or hedging transactions – Italy: Precise impact of new legislation unclear: Tax on Italian equities and indices but no tax on forex, non-Italian
Slide 17: Business Update
THANK YOU BUSINESS UPDATE IG | NOVEMBER 2012 | 17
Slide 18: Market Share
MARKET SHARE Continued market share gains in our largest revenue generating countries YEAR ON YEAR MARKET SHARE1 UK and Australia continue to grow – UK spread betting up 5% – Australia up 7% Significant market share growth in UK and Australia Third largest CFD provider in Singapore but with st
Slide 19: Investment in Technology
INVESTMENT IN TECHNOLOGY IG has the scale to invest in multiple technologies KEY INITIATIVES MOBILE USE 2010 - 2012 Mobile – Single App for spread betting and CFDs – Push Alerts – seeing benefit of developing native Apps Insight research tool – Now rolled out on iPad, iPhone and Android – On-goi
Slide 20: Customer Service
CUSTOMER SERVICE Continued leading Net Promoter Scores in key markets NET PROMOTER SCORE1 CURRENT RESULTS IG Industry average IG Net Promoter Score (NPS) is high UK SB across all six markets surveyed by 25 6 Investment Trends2 UK CFD 20 Significantly ahead of the industry in all 3 of these marke
Slide 21: Other Initiatives
OTHER INITIATIVES Delivering further improvements to drive client activity Brand re-launch – A consistent look and experience across all client touch-points – Brings image in line with expectations of service and delivery excellence Tracking of payback from online advertising – Track revenue gen
Slide 22: Summary
SUMMARY Managing through a period of dull markets Challenging comparatives Competitive position is strong Strong cash generation Prudent approach to investment Other initiatives to drive client activity FY13 H2 revenue is likely to be flat on H1 if activity levels similar IG remains we
Slide 23: Appendices
THANK YOU APPENDICES IG | NOVEMBER 2012 | 23
Slide 24: Appendix 1: Financial net trading revenue per client
Appendix 1: Financial net trading revenue per client HALF-YEAR ANALYSIS FY06 - FY13 H11 1. Clients trading in a six month period IG | NOVEMBER 2012 | 24
Slide 25: Appendix 2: European client and revenue summary
Appendix 2: European client and revenue summary FY13 H1 CLIENT AND REVENUE BY OFFICE Clients Yr on Yr Revenue Yr on Yr 000s Change £m Change France 4.2 (1%) 9.1 (19%) Germany 6.3 7% 8.1 (23%) Italy 3.0 6% 5.8 (18%) Iberia 3.7 15% 6.5 (9%) Sweden 1.1 23% 2.0 53% Netherlands 0.4 106% 0.6 13% Total 18.
Slide 26: Appendix 3: Client trading activity
Appendix 3: Client trading activity CLIENT RETENTION RATES BY YEAR AND HALF YEAR TREND FY07 - FY13 H11 FY07 FY08 FY09 FY10 FY11 FY12 FY13 IG clients excluding Japan H1 H2 H1 H2 H1 H2 H1 H2 H1 H2 H1 H2 H1 New accounts 10,648 13,137 19,012 23,681 31,916 29,622 31,655 32,102 30,338 30,293 32,213 28,755
Slide 27: Appendix 4: Broker margin requirement trend
Appendix 4: Broker margin requirement trend BROKER REQUIREMENT (£m) TREND FY11- FY13 H1 IG | NOVEMBER 2012 | 27