Ofx Group Ltd. · ASX:OFX
Ofx — Investor Day (March 2018)
43 slides from Ofx's investor day presentation, Mar 13, 2018
Slide 1: Investor Day March 2018
Investor Day March 2018 Investor presentation 13 March 2018
Slide 2: Agenda
Agenda 1. Chairman’s update 2. OFX: an overview 3. OFX in North America 4. Break 5. Marketing, our proposition 6. Technology and user experience 7. Q&A 2
Slide 3: Chairman’s update
Chairman’s update © orx
Slide 4: Chairman’s update
Chairman’s update • New operating mechanism and executives attend all board meetings Working with • 4 new executives, board members active in each selection Management • Board met with top 20 leaders in Oct-17 • Developing a culture of transparency, trust, candour, contestability and foresight Gover
Slide 5: OFX: an overview
OFX: an overview Skander Malcolm Chief Executive Officer and Managing Director 5
Slide 6: 2H18 Update - continuing to deliver on commitments
2H18 Update - continuing to deliver on commitments • Automation, sending 90k emails in 2H18 CRM focus unlocking • Several CRM campaigns with 22-35% open rates dormant client value • 4 tests generated $500k revenue in FY18 • Transaction growth in 1H18 has continued in 2H18 Continue momentum • Strong
Slide 7: OFX in facts
OFX in facts Who we are How we operate • 80% of funds transferred within 1 day • Up to 75% cheaper rates than banks* • Revenue profile: Individual ~55%, Corporate ~45% • 24/7 localised client support A client registers and Funds are transferred from their OFX transfer funds from our local makes a tr
Slide 8: Trusted international money services provider
Trusted international money services provider Strategic growth pillars Our mission Growth Drivers To become the trusted international money services provider by consumers and businesses, who value a seamless digital experience at a competitive price; Client Geographic Partnerships with a personal, a
Slide 9: OFX strategic pillars of growth
OFX strategic pillars of growth Growth drivers Client Experience Geographic Expansion Partnerships • Localising the client experience • North America • Commercial partnerships • Personalising marketing • Asia / Singapore • Leveraging cross functional capability • Product innovation and operations at
Slide 10: A history of investment in risk management
A history of investment in risk management Risk Management at OFX Outcomes • Operate in a highly regulated industry ✓ Robust track record: no major breaches in 20 years • Targets Anti-Money Laundering (AML) ✓ Trusted relationships with 16 banks ✓ 51 licenses across the globe ✓ 47 licenses across US,
Slide 11: Competitive intensity
Competitive intensity 11
Slide 12: A significant opportunity
A significant opportunity $138 trillion $300 billion $60 billion $115 million Global cross-border Global cross-border Global cross-border OFX FY17 Payment flows payment revenue payment revenue with higher Revenue margins* Source: OFX internal analysis based on McKinsey global payments map 2016 Note:
Slide 13: A more fragmented FX and cross-border market
A more fragmented FX and cross-border market Maximum customer time horizon on exchange Large Expats (affluent consumer focused) Corporate (SME focused) enterprises 1 week Remittances (consumer focused) 1 day 1 hour Low ATV Medium ATV High ATV Incumbents Disruptors FX infrastructure providers Source:
Slide 14: How we compete
How we compete What clients Competitive advantage How OFX competes value in the market Strong risk management Scale through Scale acquisition technology Target Banking Risk Regulatory Trust through digital segment relationships oversight investment Pricing Specialisation / expertise Pricing excellen
Slide 15: Non-bank share of the market in 2017 is an estimated 58%
Non-bank share of the market in 2017 is an estimated 58% Estimated market share in Australia, UK and US in 2017 Digital MSB 17% • Over $100m per annum in marketing spent by digital and incumbent MSBs has driven market share away from banks 43% Bank/Credit Union • Across Australia, UK and US, an esti
Slide 16: A strong, sustainable business
A strong, sustainable business 16
Slide 17: Revenue driven by strong portfolio of returning clients
Revenue driven by strong portfolio of returning clients Individual revenue $m 35 30 25 20 15 10 5 - 1H15 2H15 1H16 2H16 1H17 2H17 1H18 New Clients Returning Clients Active Clients New clients Returning at 1H18 31% clients 69% 160.1k 5.1% up on 1H17 25 Corporate revenue $m 20 15 10 5 - 1H15 2H15 1H16
Slide 18: Our sustainable business model generates cash
Our sustainable business model generates cash Net Operating Income NOI Margin Cash Position 1H18 - $m (NOI) - $m 0.56% 0.54% 0.53% 0.52% 0.52% Cash and cash 168 Strong cash generation 53.6 53.6 53.6 equivalents 50.3 51.5 Includes Brexit Includes Brexit Client liabilities 123 34% return on equity (RO
Slide 19: Q&A
Q&A 25 19
Slide 20: OFX in North America
OFX in North America Mike Kennedy President, North America 20
Slide 21: OFX North America in facts
OFX North America in facts Key facts ~$17b of money transferred Operational in 49 US Double digit revenue over 11 years and growing states and all of Canada growth to 1H18 (pcp*) 225k+ North American OFX Corporate clients ~44% of 64 headcount across US clients the book and Canada LICENSE: PEOPLE: LI
Slide 22: North American market is larger than Australia and UK combined
North American market is larger than Australia and UK combined Population with Remittance Non-remittance Expats GDP Total Trade internet access flows Consumer Flows + 4x 2x 5x 4x 5x 3x Source: OFX Internal Analysis 22 22
Slide 23: Significant opportunity in North America
Significant opportunity in North America Current OFX Revenue Overall Market OFX FY17 Global 2017 cross-border payments Global 2017 cross-border payments revenue revenue flows for OFX primary markets (includes markets OFX does not serve) 20 % from 27 % from 81 % from North America North America North
Slide 24: North American growth aligned to OFX global drivers and enablers
North American growth aligned to OFX global drivers and enablers Strategic growth pillars Growth Drivers Critical client imperatives Client Geographic Partnerships Experience Expansion Delivering cross-border services to client who value both: Client Marketing Sales journey ✓ Digital simplicity Foun
Slide 25: Q&A
Q&A 25 25
Slide 26: Break
Break 2625
Slide 27: Marketing
Marketing Rebecca Shears Chief Marketing Officer 27
Slide 28: Diversified marketing mix with more regionalised activity
Diversified marketing mix with more regionalised activity Australia United States United Kingdom • Mass awareness via TV, • Outdoor advertising to launch • Media partnerships with high CTV and Online in May 2018 in San Francisco profile brands (FT and The • Radio partnership for high • online video,
Slide 29: Data driven marketing acquisition
Data driven marketing acquisition Increased use of Google data across Attribution across digital OFX data plus age digital spend and the introduction of spend & channels: targeting Smart Display, via Machine Learning. Display 18-29 Direct 30-39 40-49 Paid Search Organic Search 50+ Providing visibili
Slide 30: Smart Display - constant optimisation
Smart Display - constant optimisation Headlines: • Cheaper Money Transfer • Faster Money Transfers • Global Money Transfers • OFX Money Transfers • Better Currency Exchange Result: 1 Ad = 4,875 permutations Sub Headers: • People who transfer money world wide are in for a big surprise • Savvy expats
Slide 31: CRM campaigns are driving direct click traffic to our deal pages
CRM campaigns are driving direct click traffic to our deal pages UK Exclusive Election Rate reminder GBP at 1- Christmas year high Closure NZ Election GBP v AUD UK Election Exclusive Canada Commodities 6-month high Announce + Rate French Election 150th + UK up v USD promo Election Dutch knock on AUD
Slide 32: Client Panel
Client Panel Bondi Born Australian Superyachts Dale McCarthy Captain Richard Morris Uses OFX to pay suppliers and also receive payments Uses OFX to repatriate funds from a variety of revenue from retailers abroad streams and pay overseas suppliers Has been using OFX since 2016 Has been using OFX sin
Slide 33: Technology and user experience
Technology and user experience Skander Malcolm Chief Executive Officer and Managing Director
Slide 34: Technology architecture
Technology architecture • Continued execution of technology roadmap • Fewer and more focused projects • Technology releases are every 4 weeks (down from every 12 weeks). The aim is a weekly release 2H18 key technology releases ✓ Global App and website rebrand ✓ Customer rates in application ✓ Virtua
Slide 35: Growing Online Sellers
Growing Online Sellers What is the Online Seller solution? OFX offers clients the equivalent of a local bank account in today’s most profitable international markets which enables online sellers that export products through marketplaces and webstores to manage their overseas revenues in the local cu
Slide 36: Lean and agile delivery of OLS product
Lean and agile delivery of OLS product Timeline A brief history of the Online Seller product timeline Revenue Growth FEB Virtual accounts 2016 Steady growth since February 2016 due to a significant global effort and a dedicated cross-functional team JUN OLS desktop & mobile 2016 optimised website AU
Slide 37: Technology demonstration
Technology demonstration 3725
Slide 38: Summary and outlook
Summary and outlook Continuing to deliver on commitments • Grow active clients Grow revenue by • Grow transaction volume 2H18 focus areas driving fundamentals • Geographic expansion • CRM focus unlocking dormant client value • Use NPS to drive improvements • Continue momentum in US Delivering a bett
Slide 39: Q&A
Q&A 25 39
Slide 40: Global executive team
Global executive team Skander Malcolm Chief Executive Officer and Managing Director Skander Malcolm joined OFX in February 2017 as CEO and has more than 23 years’ experience in financial services including payments technology platforms in both established and emerging markets. As President and CEO o
Slide 41: Global executive team
Global executive team Rebecca Shears Chief Marketing Officer Rebecca Shears commenced her role as Chief Marketing Officer at OFX in August 2016. Rebecca has more than 20 years experience in marketing roles both in the UK and Australia. Rebecca’s most recent role was Head of Marketing for the UK and
Slide 42: Global executive team
Global executive team Mark Shaw Chief Risk Officer Mark Shaw joined OFX in January 2018 as Chief Risk Officer. Mark brings with him a solid track record in senior risk, compliance and regulatory affairs roles, gained at leading Australian and New Zealand banks over the past 15 years. Most recently h
Slide 43: OFX Group Limited (ABN 12 165 602 273) Level 19, 60 Margaret Street, Sydney
The material contained in this document is a presentation of general information about OFX Group Limited (Company) and its activities current as at 13 March 2018. Material is provided in summary only and does not purport to be complete. The material contained in this document has been prepared witho