Plus500 Ltd. · LSE:PLUS
Plus500 — FY2015 Earnings Presentation
28 slides from Plus500's earnings presentation, 2016
Slide 1: Annual Results for the twelve months ended 31 December 2015
Annual Results for the twelve months ended 31 December 2015 London Stock Exchange Symbol: PLUS 1
Slide 2: 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
Slide 3: Strong 2015 KPIs despite eventful year
Strong 2015 KPIs despite eventful year Strong revenue growth due to increase in Plus500 in numbers: active and new customers Less than expected fall in EBITDA; additional marketing and regulatory costs partly mitigated by customer growth #1 >50 31 Rated on mobile Countries Languages app stores Total
Slide 4: Business Overview
Business Overview Regulatory & Risk Management Financial Overview Outlook 4
Slide 5: Key Business Model Strengths
Key Business Model Strengths Customer facing: – Highly rated trading platform focusing on retail customers – Competitive pricing (tight spreads, zero commissions) vs peers – Large instrument portfolio – The Plus500 brand Marketing and technology: – Proprietary in-house developed technology – Proprie
Slide 6: Strong Product Platform
Strong Product Platform CFD products Platform and Devices Trading Platform Stocks Indices Plus500 Product Portfolio Plus500 Platform Commodities FOREX Options Supporting 31 languages in 2,200 CFD products Retail customers only more than 50 countries 6
Slide 7: Market Leading Technology
Market Leading Technology Proprietary technology, developed in-house: key differentiator and flexible advantage System Architecture “Marketing User Interface Machine” Back Affiliate Office Programme Hedging and Risk Fraud Payment Management Interface 7
Slide 8: Flexible Business Model
Flexible Business Model Revenues International Revenue Split FY 2015 Footprint Plus500UK Plus500 Ltd. FCA UK-regulated subsidiary Israel Headquarters Dealing Spreads Premium Plus500IL Difference between the buy price 8% ISA regulated and the sell price of a CFD subsidiary* Overnight Premiums Charges
Slide 9: Marketing infrastructure: online is key
Marketing infrastructure: online is key Online advertising Using our proprietary automated marketing platform ensures that spending is efficient with a demonstrable return on investment The “Marketing Machine” Focus is online Measurable Learns from experience Flexible spending Context-specific adver
Slide 10: Marketing infrastructure: affiliates program
Marketing infrastructure: affiliates program A large international affiliates program Over 5,000 active affiliates who advertise Plus500 Paid on success only Easy-to-access and use affiliates’ portal of marketing collateral Fully automated online analysis and reward platform Localised marketing tool
Slide 11: Marketing infrastructure: offline campaigns
Marketing infrastructure: offline campaigns Increased activity offline to strengthen the Plus500 brand Continue with targeted campaigns Main official sponsor of Atlético Madrid FC Eurosport TV ads - Key campaigns from 2015 • Roland Garros • US open • Tour de France • Snooker world championship https
Slide 12: Growing Investment in Marketing
Growing Investment in Marketing Focus remains online but Plus500 will explore offline opportunities Advertising Spend ($m) Online 120 Advertising Search engines 100 9* Referrals 6 80 Offline 1 Mass Media (TV, print, radio) 60 4 Word of Mouth 89 40 1 3 Offline 1 56 1 Affiliates 20 2 0 2 32 2 17 21 On
Slide 13: Customer acquisition by marketing channel
Customer acquisition by marketing channel New Customers by marketing channel 100% 90% 80% 56% 55% 56% 56% 70% 65% 64% 60% Online marketing 50% Affiliate Direct to Plus500 40% 12% 11% 12% 23% 30% 14% 15% 33% 20% 33% 32% 21% 20% 22% 10% 0% 2010 2011 2012 2013 2014 2015 13
Slide 14: Marketing KPIs
Marketing KPIs 2010 2011 2012 2013 2014 2015 New Customers 20,348 32,874 37,050 56,819 66,553 84,858 % Growth 62% 13% 53% 17% 28% AUAC 586 603 628 632 921 1,227 % Growth 3% 4% 1% 46% 33% Active Customers 26,570 45,431 58,343 85,795 105,976 136,540 % Growth 71% 28% 47% 24% 29% ARPU 911 1,101 962 1,32
Slide 15: Mobile – a key growth driver
Mobile – a key growth driver Key driver of market growth Mobile is a key access point for retail customers GUI developed for mobile, consistent with other platforms Features and portfolio of instruments on par with PC version Key acquisition channel for Plus500 Successfully launched a dedicated app
Slide 16: 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% 4Q11 3Q12 1Q11 2Q11 3Q11 1Q12 2Q12 4Q12 1Q13 2Q13 3Q13 4Q13 1Q14 2Q14 3Q14 4Q14 1Q15 2Q15 3Q15 4Q15 3Q13 1Q11 2Q11 3Q11 4Q11 1
Slide 17: Regulatory & Risk Management
Business Overview Regulatory & Risk Management Financial Overview Outlook 17
Slide 18: Enhanced procedures at Plus500UK
Enhanced procedures at Plus500UK During 2015 Plus500 was subject to a high level of regulatory scrutiny: 9 January 2015: S166 ‘Skilled Person report’ by independent firm to improve AML procedures 15 May 2015: ‘Voluntary Requirement’ (VREQ) restrictions until new AML checks had been completed to: – t
Slide 19: Revenues from Market P&L
Revenues from Market P&L As Plus500 has grown, less of the revenue comes from Market P&L – reflecting a balanced book % Revenue from Market P&L 20% 18% 19% 16% 14% 14% 12% 10% 8% 9% 6% 4% 2% 2% 1% 0% 0% 2010 2011 2012 2013 2014 2015 Total Revenue $24m $50m $56m $115m $229m $276m 19
Slide 20: Financial Overview
Business Overview Regulatory & Risk Management Financial Overview Outlook 20
Slide 21: Income Statement
Income Statement Key Financial Indicators – Income Statement ($’000): Twelve months ended December 31 FY 15/FY 14 2015 2014 2013 Growth Trading income (net) 275,651 228,865 115,088 20% Selling and marketing expenses 125,413 75,170 44,322 67% Administrative and general expenses 17,647 8,373 3,563 111
Slide 22: Balance sheet remain strong
Balance sheet remain strong Key Financial Indicators – Balance Sheet: ($’000): Twelve months ended December 31 FY 15/FY 14 2015 2014 2013 Growth Cash and cash equivalents 156,535 140,201 85,285 12% Other Current Assets 10,169 3,996 3,454 154% Total Current Assets 166,704 144,197 88,739 16% Non Curre
Slide 23: Cash balances
Cash balances Key Financial Indicators – Cash Flow: ($ ,000): Twelve months ended December 31 2015 2014 2013 Operating activities: Cash generated from operations 128,133 141,259 66,991 Income tax paid - net -42,658 -22,407 -9,894 Net cash provided by operating activities 85,475 118,852 57,097 Net ca
Slide 24: Dividend distribution by payment date
Dividend distribution by payment date $120,000,000 $100,000,000 $97m $80,000,000 $65m $60,000,000 $60m $40,000,000 $20,000,000 $15m $17m $9m $10m -$ 2010 2011 2012 2013 2014 2015 2016 Q1 & Q2 Dividend policy – 60% of net profit & a special dividend at the end of the year Buyback plan - the Board has
Slide 25: Active Customers
Strong track record of growth Plus500 has been building momentum in Revenue and Customer Wins $276m 90,000,000 $229m 80,000,000 $115m Revenue ($) 70,000,000 60,000,000 50,000,000 $56m $50m 40,000,000 30,000,000 $24m 20,000,000 10,000,000 - 1Q10 2Q10 3Q10 4Q10 1Q11 2Q11 3Q11 4Q11 1Q12 2Q12 3Q12 4Q12
Slide 26: Outlook & Summary
Business Overview Regulatory & Risk Management Financial Overview Outlook & Summary 26
Slide 27: Outlook – confident of another successful year
Outlook – confident of another successful year Strong start to Q1 2016 with increased number of new customers and active customers, revenues and EBITDA margin Focus on organic growth through continuing investment, innovation, brand building Conclusion: more high value customers, an enhanced trading
Slide 28: Investment Summary
Investment Summary Business model significantly differentiated from major peers Market leading in use of innovative technology and marketing techniques Low cost, low risk and low capital intensive financial model Highly cash generative – robust balance sheet Strong organic growth prospects on back o