Ig Group Holdings Plc · LSE:IGG
Ig — H1 FY22 Earnings Presentation
36 slides from Ig's earnings presentation, January 2022
Slide 1: Results presentation – Half year ended 30 November 2021
THINKING BIGGER LEADING THE FIELD Results presentation Half year ended 30 November 2021 1
Slide 2: What we will discuss today
01 CEO reflections June Felix What we will discuss today 02 Financial performance Charlie Rozes 03 Strategic progress June Felix 04 Appendices 2
Slide 3: CEO reflections
01 CEO reflections June Felix Chief Executive Officer 3
Slide 4: Transforming business, positioned to win
Transforming business, positioned to win GUIDED BY OUR PURPOSE , DRIVEN BY OUR PEOPLE • Evolving to a high growth, global and multi-product business • Combining global reach with local expertise to meet the needs of our clients • Access to a larger and growing addressable market, underpinned by stru
Slide 5: Strong financial and operating performance
Strong financial and operating performance H1 FY22 HIGHLIGHTS Adjusted net trading revenue1 £466.1m 14% Active clients1 320,400 42% tastytrade revenue 2 $71.9m 34% Japan revenue £44.6m 29% 1 Adjusted net trading revenue and active clients from continuing operations 2 Reflects revenue from tastytrade
Slide 6: Strategy embeds ESG across our business
Strategy embeds ESG across our business Financial education Products Onboarding and safeguards Security Providing our clients with tools and information Equality, diversity and inclusion People Talent development Employee wellbeing Educational equality Partnerships Environment Suppliers Committing 1
Slide 7: Delivering on our objectives
Delivering on our objectives Very strong performance across our portfolio of businesses Exciting growth in tastytrade and integration well on track Growing our high quality client base, driving sustained and enduring value Strategy embeds ESG across our business Increasing diversification across our
Slide 8: Financial performance
02 Financial performance Charlie Rozes Chief Financial Officer 8
Slide 9: Continued strong financial performance
Group Core Markets+ High Potential Continued strong financial performance H1 FY22 HIGHLIGHTS ADJUSTED NET TRADING REVENUE (£m) Adjusted net trading revenue 1 £500m £466.1m 14% £400m £300m Adjusted profit before tax 1 £200m £258.0m 13% £100m £0m H1 FY19 H2 FY19 H1 FY20 H2 FY20 H1 FY21 H2 FY21 H1 FY22
Slide 10: Increasing scale of business
Group Core Markets+ High Potential Increasing scale of business Adjusted basis1 (£m) H1 FY22 H1 FY21 Change Net trading revenue 466.1 408.5 14% • Adjusted net trading revenue up 14% reflecting increased size of business Betting duty, interest, and other 2.4 3.0 operating income − Excluding tastytrad
Slide 11: Revenue growth and diversification
Group Core Markets+ High Potential Revenue growth and diversification Adjusted revenue (£m) 1 H1 FY22 H1 FY21 Change H1 FY20 Change OTC leveraged 392.6 389.1 1% 237.6 65% • OTC leverage revenue up 1% on H1 FY21 Exchange traded derivatives 57.6 4.0 nm 1.3 nm and 65% on H1 FY20 Stock trading and inves
Slide 12: Strengthened Core Markets+
Group Core Markets+ High Potential Strengthened Core Markets+ OTC LEVERAGED ACTIVE CLIENTS AND REVENUE PER CLIENT 150 2,000 Revenue (£m) H1 FY22 H1 FY21 Change Revenue per client (£) Active clients (000) 1,500 OTC leveraged 1 385.1 383.9 - 100 1,000 Stock trading and investments 15.9 15.4 3% 50 Tota
Slide 13: Geographically diverse revenue pool
Group Core Markets+ High Potential Geographically diverse revenue pool H1 FY22 OTC LEVERAGED 1 REVENUE BY GEOGRAPHY JAPAN AUSTRALIA • 41% of the Core Markets+ OTC leveraged revenue is generated from the UK & Ireland £45m • 38% generated by the growing APAC 2 region EU £51m £45m SINGAPORE − Japan now
Slide 14: Positive trends across our key markets
Group Core Markets+ High Potential Positive trends across our key markets UK AND EU - REVENUE (£m) • UK and EU business significantly larger following step change in H2 FY20 − Active clients up 33% H1 FY22 on H1 FY20 221 203 199 208 • Exceptional performance in Japan driven by localisation and succe
Slide 15: Building momentum in High Potential Markets
Group Core Markets+ High Potential Building momentum in High Potential Markets • High Potential Markets pro forma revenue, excluding PRO FORMA HIGH POTENTIAL MARKETS Nadex, up 30% on H1 FY21 Revenue (£m) H1 FY22 H1 FY21 Change • tastytrade delivered strong USD revenue growth, up 34% tastytrade ¹ 52.
Slide 16: Disciplined cost management
Group Core Markets+ High Potential Disciplined cost management Adjusted operating costs1 (£m) H1 FY22 H1 FY21 change • Excluding tastytrade operating costs down 1% Fixed remuneration 69.0 62.7 10% − H1 FY21 costs contained certain one-off costs Advertising and marketing 38.0 33.4 14% − H1 FY22 benef
Slide 17: Increased financial capacity and flexibility
Group Core Markets+ High Potential Increased financial capacity and flexibility Successful inaugural public debt issuance Renegotiation of our revolving credit facility • Issued £300m of seven year senior unsecured • Increase in size to £300m, with option to bonds extend to £400m • Repaid short date
Slide 18: Guidance and Outlook
Group Core Markets+ High Potential Guidance and Outlook CORE MARKETS+ • Target 5-7% revenue growth per annum over the medium term • Target 25-30% revenue growth per annum over the medium term, with tastytrade at HIGH POTENTIAL the higher end of this range MARKETS • tastytrade to be within the range
Slide 19: Strategic progress
03 Strategic progress June Felix Chief Executive Officer 19
Slide 20: Key strategic themes
Key strategic themes Unique client proposition, underpinned by our technology, breadth of offering and client 1 experience 2 Large and growing addressable markets 3 tastytrade adds high growth, high potential products and diversification to the Group’s portfolio 20
Slide 21: Unique customer proposition
Unique customer proposition TECHNOLOGY BREADTH OF OFFERING CLIENT EXPERIENCE • Better than ‘best execution’ • Global footprint with local offices • 1 to 1 relationship for premium clients • Robust and resilient platform • Unrivalled breadth of products • Out of hours trading • Highly rated mobile ap
Slide 22: Engaged and active client base
Engaged and active client base…. TOP 5 REASONS CLIENTS CHOSE TO TRADE WITH IG 1 SIGNIFICANT VALUE FROM OUR MOST ACTIVE CLIENTS 1 Good reputation 2 Ease of use of trading platform 88% Trade almost 21 Trades per day, every single month per client 3 Mobile app 4 Trading platform reliability £21k Averag
Slide 23: Delivering consistent growth
….delivering consistent growth CONSISTENT TRACK RECORD OF REVENUE GROWTH RECENT SURVEY DEMONSTRATES LOYAL AND £900m SATISFIED CUSTOMER BASE 1 £800m Of respondents: £700m £600m £500m 91% £400m £300m £200m £100m £0m 01 02 03 04 05 06 07 08 09 10 11 12 13 14 15 16 17 18 19 20 21 Financial Year Expect t
Slide 24: Growing US addressable market
Growing US addressable market • Access to large and growing US 130m TOTAL US BROKERAGE market with the acquisition of ACCOUNTS1 tastytrade ACTIVE EQUITY • Over 130m equity accounts in the 14m TRADERS2 US, with 14m active traders ACTIVE OPTIONS AND • 80% of options traders began by 1.8m FUTURES TRADE
Slide 25: tastytrade delivering strong growth
tastytrade delivering strong growth • 1.6 million unique registered users across the % OF OCC EQUITY & INDEX OPTIONS MARKET 1 tastytrade ecosystem • Strong revenue performance and client growth 1.51% Market share - November 2021 • Gaining market share over competitors, in a growing options market IN
Slide 26: Increasingly diversified product set
Increasingly diversified product set… ADJUSTED NET TRADING REVENUE (£m) H1 FY20 H1 FY21 H1 FY22 13% 4% OTC leveraged 3% Exchange traded £466.1m derivatives £243.3m £408.5m 98% Stock trading and 95% 84% investments 1 Adjusted net trading revenue from continuing operations 2 Reflects revenue from tast
Slide 27: Increasingly diversified global operations
…and increasingly diversified global operations ADJUSTED NET TRADING REVENUE (£m) H1 FY20 H1 FY21 H1 FY22 13% UK & EU 8% 7% 48% US 10% 53% 52% £466.1m £243.3m £408.5m JAPAN ROW 39% 38% 29% 1 Adjusted net trading revenue from continuing operations 2 Reflects revenue from tastytrade in the period post
Slide 28: Well positioned for the future
Well positioned for the future Multiple growth levers in the significant and growing global market Increasingly diversified business by geography and product High quality client base, driving sustained and enduring value Strong cash flow and liquidity with robust risk management provide financial fl
Slide 29: Appendices
Appendices IG Group °
Slide 30: Reconciliation of non-IFRS performance measures
Appendix 1 Reconciliation of non-IFRS performance measures Adjusted revenue (£m) H1 FY22 H1 FY21 Adjusted profit before taxation and EPS £m (unless stated) H1 FY22 H1 FY21 Net trading revenue 471.9 408.5 Earnings per share 48.1p 50.7p Foreign exchange gain associated with tastytrade (5.8) - Weighted
Slide 31: Own funds flow
Appendix 2 Own funds flow OWN FUNDS FLOW (£m) H1 FY22 H1 FY21 MOVEMENT IN OWN FUNDS (£m) H1 FY22 H1 FY21 Operating profit 251.0 232.2 Net own funds generated from operations 213.7 203.1 Depreciation and amortisation 27.1 12.9 Net financing (costs) / receipts (5.6) (1.4) Lease liability payments (4.2
Slide 32: Capital and liquidity
Appendix 3 Capital and liquidity LIQUID ASSETS (£m) 30 Nov 21 31 May 21 REGULATORY CAPITAL (£m) 30 Nov 21 31 May 21 Liquid asset buffer 82.2 86.1 Regulatory capital resources 717.2 860.7 Amounts at brokers 848.2 710.6 Risk exposure amounts 2,773.4 2,467.7 Cash in IG bank accounts 664.0 655.2 Capital
Slide 33: OTC Leveraged new client retention
Appendix 4 OTC Leveraged new client retention RETENTION OF NEW CLIENT COHORTS 100% Historical average (FY15-FY18) • High quality, loyal clients drive enduring, multi-year 90% revenue stream FY19 80% 70% FY20 • Client retention rates have remained stable in less volatile 60% FY21 market conditions, r
Slide 34: Half year analysis – Core Markets+
Appendix 5 Half year analysis – Core Markets+ FY22 FY21 FY21 FY20 FY20 Revenue (£m) H1 H2 H1 H2 H1 UK 157.2 167.4 150.0 148.0 92.7 EU 51.2 53.6 49.0 54.7 33.1 EMEA non-EU 25.9 28.2 28.4 32.5 21.3 Australia 45.2 58.1 61.6 51.4 36.9 Singapore 36.7 38.4 36.1 35.2 21.5 Japan 44.6 34.1 34.6 30.6 15.9 Eme
Slide 35: Half year analysis – High Potential Markets
Appendix 6 Half year analysis – High Potential Markets FY22 FY21 FY21 FY20 FY20 Revenue (£m) H1 H2 H1 H2 H1 US 7.5 6.4 5.2 4.2 1.6 Total OTC leveraged 7.5 6.4 5.2 4.2 1.6 ETDs – MRM 1.0 1.6 1.9 1.8 1.3 ETDs - tastytrade 52.8 - - - - ETDs - Spectrum 3.8 2.8 2.1 0.7 - Total exchange traded derivatives
Slide 36: Forward-looking statements disclaimer
This presentation, prepared by IG Group Holdings plc (the “Company”), may contain forward-looking statements about the Company and its subsidiaries (the “Group”). Such forward-looking statements can be identified by the use of forward-looking terminology, including the terms "believes", “projects”,