Cmc Markets Plc · LSE:CMCX
Cmc Markets — H1 2024 Earnings Presentation
30 slides from Cmc Markets's earnings presentation, Nov 16, 2023
Slide 1: Results Presentation
CMC MARKETS PLC 133 HOUNDSDITCH, +44 (0)20 7170 8200 CMCMARKETS.COM/GROUP LONDON, EC3A 7BX Results Presentation Half year ended 30 September 2023 16 November 2023
Slide 2: Today's presenters
Introduction Today’s presenters Lord Peter Cruddas, Albert Soleiman , David Fineberg, Matthew Lewis, Chief Executive Officer Chief Financial Officer Deputy Chief Executive Head of APAC & Officer Canada H1 Results Presentation | 2024 2
Slide 3: H1 2024: Operational Highlights
H1 2024: Operational Highlights Rollout of strategic initiatives to capture long-term growth opportunity continues • We have continued to invest in key projects to diversify revenues and drive future growth • Successful launch of CMC Invest Singapore, demonstrating the transferability of the Invest
Slide 4: Financial update
Financial update Albert Soleiman CFO H1 Results Presentation | 2024 4
Slide 5: Key Performance Indicators: Group
Key Performance Indicators: Group Net operating income¹ (£m) Net revenue mix 128.6 128.4 14% 14% 19% 16% 16% 104.7 101.0 87.4 155.2 153.5 81% 84% 86% 86% 84% 126.7 134.9 122.6 H1 H2 H1 H2 H1 H2 2022 2023 2024 H1 NOI H2 NOI Trading n et reven ue 2022 2023 2024 Trading Investing Profit / (loss) before
Slide 6: Key Performance Indicators: Trading and Investing
Key Performance Indicators: Trading and Investing Active clients¹ and revenue per active client² (RPC) Gross client income³ (£m) and retention (%) Client money (AuM) (£m) 2,558 83% 2,446 80% 80% 1,877 2,177 1,867 70% 66% Trading 557.1 546.6 549.4 53,834 52,580 505.6 501.3 50,199 48,054 161.5 154.9 4
Slide 7: Income Statement
Income Statement Net operating income Group (£m) H1 2024 H1 2023 YoY % Net operating income of £122.6m was £30.9m (20%) lower than prior year, Trading net revenue 87.4 128.4 (32%) driven by a 32% (£40.7m) decrease in trading net revenue as a result of: Investing net revenue 16.8 20.8 (20%) • Lower g
Slide 8: Trading net revenue
Trading net revenue 2022 2023 2024 H1 2024 vs H1 2023 £m H1 H2 Full year H1 H2 Full year H1 £m % Trading gross client income¹ 127.0 161.5 288.5 154.9 148.6 303.5 132.6 (22.3) (14%) Rebates and levies (8.3) (12.3) (20.6) (11.5) (8.9) (20.4) (8.6) 2.9 26% Trading net client income 118.7 149.2 267.9 14
Slide 9: Operating cost bridge
Operating cost¹ bridge Higher costs driven by investment to deliver growth and impairment of UK Invest and cash equities assets Driven by lower client activity Approximately half of the staff 4.7 cost increase is driven by 8.1 annualisation of hires made in 2.5 the prior year / annual inflation- 2.0
Slide 10: Liquidity and regulatory capital
Liquidity and regulatory capital Regulatory capital Liquidity Group (£m) H1 2024 2023 • Decrease in own funds to £272.8m driven by payment of the 2023 final dividend and movements in working capital Core Equity Tier 1 Capital1 353.4 363.1 • Increase in non-segregated funds driven by a small number o
Slide 11: Financial Outlook
Financial Outlook Net operating income: • Quiet market conditions in the first half have resulted in lower client trading activity in both the trading and investing businesses. These conditions have continued into the second half • Maintaining full year net operating income guidance of £250 - £280 m
Slide 12: Investing business update (APAC)
Investing business update (APAC) Matthew Lewis Head of APAC & Canada H1 Results Presentation | 2024 12
Slide 13: CMC Invest Australia
CMC Invest Australia Despite heightened macro risk, underlying performance in local currency grew 7% year-on-year Financial performance Net Operating Income1,2 • H1 net operating income down £0.5m (2%) year-on-year, with £1.5m (7%) growth in 50 underlying performance in local currency, offset by a £
Slide 14: CMC Invest Australia: Active clients and AuA
CMC Invest Australia Assets under Administration remain close to all-time highs Active Clients¹ AuA movement (AUD $bn) 2.9 73.2 200 0.5 180 (0.9) 71.5 160 (1.2) 70.7 140 0.3 Active clients (‘000) 120 (0.7) 100 80 60 40 20 0 H1 2022 H2 2022 H1 2023 H2 2023 H1 2024 Net Cash Outflow Market Movement Net
Slide 15: CMC Invest: Strategic expansion on track
CMC Invest: Strategic expansion on track Successful launch of Invest Singapore and physical crypto Product expansion • First mainstream broker to introduce physical crypto driven by significant client demand, all within a single platform • Brand new front-end build • New platform features including
Slide 16: Strategic update
Strategic update David Fineberg Deputy CEO H1 Results PrH1 Results Presentation | 2024 16
Slide 17: Progress against key strategic milestones
Progress against key strategic milestones Increased geographic diversification through Invest platform and B2C and B2B capability Geo- Invest Invest Expansion Products Singapore Australia Dubai OTC Options Launched in Expanding presence rollout September APAC offering enhanced Invest UK Trading B2B
Slide 18: Leveraging our technology
Leveraging our technology Our API ecosystem is a core competitive advantage TRADING BUILDING CMC PRODUCT OUT B2B INVEST DIVERSIFICATION CAPABILITY EXPANSION GLOBAL FRONT MULTI - ASSET GLOBAL B2B AND B2C CMC GLOBAL B2C FRONT-END ENDS PLATFORM FRONT-END INVEST GLOBAL CMC SPREAD FIXED EXECUTION APIs Eq
Slide 19: Institutional (B2B) Offering
Institutional (“B2B”) Offering Building capabilities within the B2B business • Targeting the mid-market gap to further diversify revenue opportunities B2B • Leverages our strong in-house technology $2.1tn Expansion d FX Spot market daily trading • Key differential against competitors volume1 • LumeF
Slide 20: Strategic Outlook
Strategic Outlook Well-positioned through successful operational delivery Diversified revenue through our key business divisions Business investment – with significant investment made to date we have reached the peak of the investment cycle, which will unlock value over the coming years Strategic de
Slide 21: Q&A
CMC MARKETS PLC 133 HOUNDSDITCH, +44 (0)20 7170 8200 CMCMARKETS.COM/GROUP LONDON, EC3A 7BX Q&A
Slide 22: Appendices
CMC MARKETS PLC 133 HOUNDSDITCH, +44 (0)20 7170 8200 CMCMARKETS.COM/GROUP LONDON, EC3A 7BX Appendices
Slide 23: Appendix 1: Income statement
Appendix 1 Income statement Group (£m) H1 2024 H1 2023 YoY % Total revenue 135.8 174.4 (22%) Rebates & levies (13.2) (20.9) (37%) Net operating income1 122.6 153.5 (20%) Operating expenses (123.6) (115.6) (7%) Profit / (loss) on share of associates (0.1) — — Finance costs (0.9) (1.3) 34% Profit befo
Slide 24: Appendix 2: Operating expenses breakdown
Appendix 2 Operating expenses breakdown Operating expenses¹ increase of £15.6m (15%) driven by investment in Group (£m) H1 2024 H1 2023 YoY % strategic projects Net staff costs (excl. variable remuneration) 51.5 40.0 29% • Net staff costs increased by £11.5m (29%) due to: IT costs 19.2 16.3 18% • In
Slide 25: Appendix 3: Balance sheet
Appendix 3 Balance sheet Group (£m) 30 September 2023 31 March 2023 Variance % (unaudited) Non-current assets Intangible assets 33.5 35.3 (5%) Property, plant and equipment 27.4 22.8 20% Deferred tax assets 4.0 4.8 (17%) Financial investments -- -- -- Trade and other receivables 2.6 2.7 (2%) Investm
Slide 26: Appendix 4: Own funds flow statement
Appendix 4 Own funds flow statement Group (£m) H1 2024 FY 2023 Operating activities Profit / (loss) before tax (2.0) 52.2 Depreciation and amortisation 12.9 15.6 Other non-cash adjustments (0.5) 1.6 Tax paid (2.0) (17.0) Own funds generated from operating activities 8.4 52.4 Movement in working capi
Slide 27: Appendix 5: Client money and broker margin requirements
Appendix 5 Client money and broker margin requirements Client money (“AUM” - £m) Broker margin requirements (£m) 600 250 Max: £222m Max: £216m 550 200 500 150 Max: £138m Max: £129m 450 100 400 50 350 300 0 Sep-20 Mar-21 Sep-21 Mar-22 Sep-22 Mar-23 Sep-23 Mar-20 Sep-20 Mar-21 Sep-21 Mar-22 Sep-22 Mar
Slide 28: Appendix 6: Half yearly client churn
Appendix 6 Half yearly client churn (‘000s) 3 4 3 7 3 6 3 6 5 5 44 42 41 39 38 (12) (11) (11) (10) (18) H1 2022 H2 2022 H1 2023 H2 2023 H1 2024 Continuous New trader Reacti vated Stopped trading H1 Results Presentation | 2024 28
Slide 29: Disclaimer
Disclaimer Certain statements in this presentation constitute or may constitute forward-looking statements. Any statement in this presentation that is not a statement of historical fact including, without limitation, those regarding the Company’s future expectations, operations, financial performanc
Slide 30: CMC MARKETS PLC 133 HOUNDSDITCH, LONDON, EC3A 7BX
CMC MARKETS PLC 133 HOUNDSDITCH, +44 (0)20 7170 8200 CMCMARKETS.COM/GROUP LONDON, EC3A 7BX