Plus500 Ltd. · LSE:PLUS
Plus500 — 9M 2017 Earnings Presentation
28 slides from Plus500's earnings presentation, September 2017
Slide 1: Results for the nine months ended 30 September 2017
Results for the nine months ended 30 September 2017 London Stock Exchange Symbol: PLUS
Slide 2: Record results for the 9 months ended 30 September 2017
Record results for the 9 months ended 30 September 2017 Plus500 in numbers: $304.9m +103% $188.7m 96,373 160,090 Revenues Net profit EBITDA New customers Active customers +29% Growth Growth +105% Growth +22% Growth 9 months ended 30 9 months ended 30 9 months ended 30 9 months ended 30 September 201
Slide 3: Financial and Operating Highlights of the 9 months ended 30 September 2017
Financial and Operating Highlights of the 9 months ended 30 September 2017 Record results for the nine months ended 30 September 2017 are benefitting from: Active Customers1 – growth of 22% to a record level of 160,090 (2016: 131,346) New Customers2 – increased 18% to a record level of 96,373 (2016:
Slide 4: Business Regulatory & Financial Outlook
Business Regulatory & Financial Outlook Overview Risk Management Overview Page 4
Slide 5: New and Active customer KPIs
New and Active customer KPIs 9 months ended 30 9 months ended 30 Q3 2017 Q3 2016 2016 Total September 2017 September 2016 Active Customers 160,090 131,346 94,610 69,989 155,956 % Growth % Growth 9 months ended 30 September 22% 35% Q3 2017/Q3 2016 2017/ 2016 ARPU $1,905 $1,799 $1,232 $1,107 $2,103 %
Slide 6: Key Business Model Strengths
Key Business Model Strengths Self-developed, user friendly and robust trading platform – based on proprietary technology Analytics driven, returns focused customer acquisition model – driven by “Marketing Machine” and affiliate programme Strong international brand awareness – driven by successful ma
Slide 7: Strong Product Platform
Strong Product Platform CFD Financial Instruments Platform and Devices Unified Trading Platform 2,200 CFD financial instruments Supporting 32 languages in Retail customers only more than 50 countries Stocks iPhone / iPad / Apple Watch App Crypto Indices Android WebTrader App Plus500 Plus500 Product
Slide 8: Market Leading Technology
Market Leading Technology Proprietary technology, developed in-house: key differentiator and flexible advantage System Architecture rapid product development User Interface consistent experience across all platforms “Marketing Machine” efficient acquisition of new customers Back Office Affiliate Pro
Slide 9: Flexible Business Model
Flexible Business Model Revenue Split Revenues FY 2016 International Footprint Plus500UK FCA UK-regulated Dealing Spreads 5% Spreads subsidiary Difference between the buy price and the sell price of a CFD Premium Plus500CY CySEC regulated subsidiary Overnight Premiums Charges on open customer positi
Slide 10: Plus500 is an attractive proposition to retail customers
Plus500 is an attractive proposition to retail customers Peer Company A Peer Company B CFDs only CFD, Spread betting, Binary Product portfolio CFD, Spread betting, Binary Options (2,200 instruments, 7 asset classes) Options -Unified simple platform Combination of third-party Multi-layer platform wit
Slide 11: Analysis of customer churn
Analysis of customer churn 9 months ended September 2017 Revenue split by client tenure 0-6 Months 12% 7-12 Months 4% 1-3 Years 35% 3-5 Years 5+ Years 32% 17% 51% of Group’s Increased focus on revenues come from customer retention customers who trade for initiatives reduces more than one year churn
Slide 12: Efficient and flexible investment in marketing
Efficient and flexible investment in marketing Focus remains online but Plus500 will continue to explore offline opportunities Advertising Spend ($m) Online * Advertising Search engines Referrals Offline Mass Media (TV, print) Word of Mouth Sport Sponsorship * Majority is Atletico Madrid sponsorship
Slide 13: Mobile – a key growth driver
Mobile – a key growth driver Key driver of market growth – and key acquisition channel for Plus500 Mobile is a key access point for retail customers GUI developed for mobile, consistent with all platforms Features and portfolio of instruments on par with PC version Successfully launched a dedicated
Slide 14: Mobile revenues and sign ups by device
Mobile revenues and sign ups by device Number of Signups by Device Revenues by Device 100% 100% 90% 90% 80% 80% 70% 70% 60% 60% 50% 50% 40% 40% 30% 30% 20% 20% 10% 10% 0% 0% 1Q11 2Q11 3Q11 4Q11 1Q12 2Q12 3Q12 4Q12 1Q13 2Q13 3Q13 4Q13 1Q14 2Q14 3Q14 4Q14 1Q15 2Q15 3Q15 4Q15 1Q16 2Q16 3Q16 4Q16 1Q17 2
Slide 15: Business Regulatory & Financial Outlook
Business Regulatory & Financial Outlook Overview Risk Management Overview Page 15
Slide 16: Regulatory framework
Regulatory framework Compliance Approach Negative balance protection for all customers Ltd No advice self execution venue Israeli Headquarters No bonuses for the majority of business Default leverage of 1:50 for the majority of the business AU Pty Ltd No Binary Options UK Ltd Australia & CY Ltd IL L
Slide 17: Plus500 compliance landscape
Plus500 compliance landscape Plus500 welcomes a co-ordinated approach by regulators and consistent conduct rules across all European jurisdictions: The FCA and ESMA conclusions are expected to create a more cohesive approach to protect customers from poor industry practices Customer balance protecti
Slide 18: Commitment to regulatory, compliance and risk best practice
Commitment to regulatory, compliance and risk best practice Continuing focus on and investment in best practice reflected in the Company’s regulatory culture Global compliance and support teams consists of c.180 permanent staff Local Compliance teams with significant experience and skills Maintainin
Slide 19: Recent and ongoing regulatory consultations
Recent and ongoing regulatory consultations ESMA June 2017 statement on product intervention concerning CFDs; outcome expected in 2018 FSMA (Belgium) CySEC (Cyprus) FCA (UK) BaFiN (Germany) AMF (France) • New regulation • Enhancing the • Enhancing the • New regulation • New marketing • Plus500 condu
Slide 20: Regulation – current situation and potential impact
Regulation – current situation and potential impact Regulator focus Plus500 compliance Potential impact Negative balance protection √ None Maintenance margin √ None Appropriateness √ Limited Market P&L √ Limited Reduced leverage ratios Industry standard Subject to ESMA / FCA No high pressure sales √
Slide 21: Minimising downside risk: 90% profitable trading days
Minimising downside risk: 90% profitable trading days in 9 months ended 30 September 2017 Strong track record in managing market risk demonstrated by looking at number of profitable trading days. In the 9 months ended 30 September 2017 the Group made a profit on over 90% of the trading days with rem
Slide 22: Business Regulatory & Financial Outlook
Business Regulatory & Financial Outlook Overview Risk Management Overview Page 22
Slide 23: Income Statement
Income Statement Key Financial Indicators – Income Statement ($’000): 9 months 9 months A record revenue for the nine months % Growth ended 30 September 2017 is driven ended 30 ended 30 % Growth Q3 2017* Q3 2016* Q3 2017/ 2016* FY 2016 by an increased number of both active September September 9 mont
Slide 24: Dividend and share buy back payouts (2017 proposed to date)
Dividend and share buy back payouts (2017 proposed to date) 160,000,000 $139m * 140,000,000 $123m 120,000,000 100,000,000 80,000,000 $65m $60m 60,000,000 40,000,000 $15m $17m 20,000,000 $10m 0 2011 2012 2013 2014 2015 2016 2017 An interim payout (60% of H1 2017 net profit) comprised of two equal com
Slide 25: Business Regulatory & Financial Outlook
Business Regulatory & Financial Outlook Overview Risk Management Overview Page 25
Slide 26: Outlook
Outlook Looking ahead to 2018, the Board believes that Plus500 is well positioned to take advantage of growth opportunities such as new licences and new instruments, whilst retaining its competitive advantage derived from its lean cost structure and technology leadership; these factors are expected
Slide 27: Investment Summary
Investment Summary Business model significantly differentiated from major peers Market leading in use of innovative technology, use of mobile, and marketing techniques Low cost, low risk and low capital intensive financial model Highly cash generative – robust balance sheet and cash conversion Focus
Slide 28: 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 purchase or subscribe for, any shares or other securities of the Company, nor shall it (or any part of it), or the fact of its distribution, form the basis of