Plus500 Ltd. · LSE:PLUS
Plus500 — Investor Day (September 2022)
79 slides from Plus500's investor day presentation, Sep 20, 2022
Slide 1: Capital Markets Day
CAPITAL MARKETS DAY London Stock Exchange symbol: PLUS 20 September 2022 1
Slide 2: Welcome
WELCOME Background Rob is a senior Investor Relations specialist, with over 17 years experience as in-house IR officer across a range of sectors and industries. He is a Board Director of the Investor Relations Society in the UK. Education Rob has a BA in History from Manchester University and ACCA i
Slide 3: Agenda for the Day
AGENDA FOR THE DAY Speaker UK time Introductory interview Professor Jacob Frenkel, Chairman 14:00 Investment case and growth opportunities David Zruia, Chief Executive Officer 14:10 Financial dynamics and business Elad Even-Chen, Chief Financial Officer opportunities and VP Business Development 14:3
Slide 4: Introductory Words
INTRODUCTORY WORDS Background Prof. Frenkel has a 40 year track record in global macro- economics and finance. He was formerly Chair of JP Morgan Chase International, Chair and CEO of G-30, Chair of Merrill Lynch International and Governor of the Bank of Israel. He is a recipient of several Honorary
Slide 5: Investment Case and Growth Opportunities
INVESTMENT CASE AND GROWTH OPPORTUNITIES Background David has been CEO since April 2020, having held a number of senior leadership roles within Plus500, including establishing and growing the Group’s operational division as Chief Operating Officer for 7 years, as well as holding a number of senior m
Slide 6: Plus500 at a Glance
PLUS500 AT A GLANCE Proprietary technology powers our products, 23 million+ OTC1 offering platform is marketing and operations available in 50+ countries registered customers since inception and in 30 languages Premium listing on Main OTC, Futures, Share Dealing Market of London Stock Plus500’s prod
Slide 7: Our State-of-the-Art Technological Platforms
OUR STATE-OF-THE-ART TECHNOLOGICAL PLATFORMS Launch of new product offering in the US futures market Introduction of +Insights and Trading Academy.. 2022 Introduction of 'Plus500 Invest' platform New payment methods including Apple Pay and Google Pay... 2021 Marketing Client Verification iOS and And
Slide 8: Our Structure Over the Medium Term
OUR STRUCTURE OVER THE MEDIUM TERM Fintech Group New additional OTC offering Share dealing Futures offering financial products Existing New markets markets NEW MONETISATION AND RETENTION TECHNOLOGIES 8
Slide 9: ESG Is a Core Principal
ESG IS A CORE PRINCIPAL Customer Care Employee Quality and Composition and and Education Welfare Value of Board Diversity of Board 9
Slide 10: Our People and Culture
OUR PEOPLE AND CULTURE Oversight and guidance Board of Directors High calibre and diversified Highly skilled Management team Clear and visible leadership Backgrounds in technology and finance Dynamic and vibrant working environment 500+ employees globally Entrepreneurial, high performance culture Is
Slide 11: The Market Opportunity for Plus500
THE MARKET OPPORTUNITY FOR PLUS500 ~25% $12.2 Billion Retail trading market share Online trading platform market of US equity trading volumes in 20211 by 20282 $355 Trillion $41.8 Trillion 62.6 Billion Total global financial Futures and options on futures Global equity trading market in 20224 wealth
Slide 12: Our Strategic Roadmap
OUR STRATEGIC ROADMAP New Products New Markets Expanding OTC offering – Deepening Customer in new and existing markets Engagement 12
Slide 13: New Products and New Markets
NEW PRODUCTS AND NEW MARKETS Last 5-Years Annual Average Daily Volume on CME & ICE Retail opportunity – launching TradeSniper, intuitive new trading (millions of contracts) platform, designed for retail 30.7 traders 0.9 2.4 25.2 24.9 25.6 24.7 Institutional opportunity – 21.9 1.0 0.9 0.9 0.8 2.3 2.5
Slide 14: Expanding Our Offering
EXPANDING OUR OFFERING A GLOBAL PRESENCE WITH GROWTH OPPORTUNITIES IN NEW MARKETS EUROPE, AMERICAS ASIA PACIFIC MIDDLE EAST AND AFRICA PluS500 [1's TRADING WITH A PLUS ‘4
Slide 15: Deeper Customer Engagement
DEEPER CUSTOMER ENGAGEMENT ACTIVATION OPPORTUNITY A LONG TERM CUSTOMER BASE OTC customers trading 23 million+ 90% with Plus500 for >1 year (% of total OTC revenue) Registered customers 80% 70% 60% Drive intent-based traffic 50% from a range of marketing channels to registration 40% Further investmen
Slide 16: Key Takeaways
KEY TAKEAWAYS Diversified product portfolio High value, long term and and geographic footprint sizeable customer base Supported by organic investment Very robust Range of compelling financial position and targeted growth opportunities acquisitions to drive future growth Market-leading proprietary Fl
Slide 17: Financial Dynamics and Business Opportunities
FINANCIAL DYNAMICS AND BUSINESS OPPORTUNITIES Background Elad is the Group CFO and VP of Business Development and has been with Plus500 for the last 12 years, holding a number of senior leadership roles in that time. Elad has a broad and diverse expertise across corporate finance, strategy, legal, r
Slide 18: A Long Track Record of Profitable Growth & Cash Generation
A LONG TRACK RECORD OF PROFITABLE GROWTH & CASH GENERATION STRONG BALANCE SHEET GROWING TOPLINE Debt-free since inception 23% CAGR revenue growth 88%-113% in operating cash Since IPO year in 2013, between 2013-2022² driven by conversion¹ 2013-H1 2022 Plus500 growing customer base has generated: $2.7
Slide 19: Our Long Term Track Record of Profitable Growth
OUR LONG TERM TRACK RECORD OF PROFITABLE GROWTH EBITDA ($m) Shareholder returns ($m) 324 41% 58% 64% 48% 46% 59% 70% 54% 59% 54% 52% 288 % margin 230 516 210 506 387 388 148 259 99 110 89 192 60 145 133 151 67 15 17 23 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022¹ 2012 2013 2014 2015 2016
Slide 20: Our Approach to Capital Allocation
OUR APPROACH TO CAPITAL ALLOCATION $m CASH BALANCES ($m) High levels of ROE - over the 1,200 years FY 2019 to FY 2021 was 995 average of approx. 75% 1,000 750 800 470 594 Continued strong cash 600 generation - operating cash conversion of 113% in H1 2022 315 400 293 242 H1 2022 capital 525 139 157 1
Slide 21: Our Strategy and Approach
OUR STRATEGY AND APPROACH Product & asset classes Regulatory Customer New to be traded on licences diversification products 21
Slide 22: Wide Range of Asset Classes Enabling Customers to Adapt
WIDE RANGE OF ASSET CLASSES ENABLING CUSTOMERS TO ADAPT THEIR TRADING STRATEGY % of customers trading in given number of asset classes Customer diversification 5% 1% 1 class 9% 31% 2 classes 3 classes 14% H1-2022 4 classes 5 classes 6 classes Top customer generated less 18% 22% 7 classes than 0.5% o
Slide 23: Plus500 Group's Operations
PLUS500 GROUP’S OPERATIONS United Kingdom Australia South Africa New Zealand USA July 2021 Japan March 2022 Up to FY 2019 Cyprus Singapore Israel Seychelles Estonia January 2020 February 2022 23
Slide 24: High Value Customer Base
HIGH VALUE CUSTOMER BASE 86% 14% Of Group revenue generated in FY 2020 was related to customers who continued to trade with Plus500 in FY 2021 or H1 2022 FY 2020 25% Revenue 61% 20% Of Group revenue generated in FY 2015 was related to customers who continued to trade with Plus500 in H1 2022 FY2020 r
Slide 25: Customer Deposits Illustrates Value Potential
CUSTOMER DEPOSITS ILLUSTRATES VALUE POTENTIAL Customers registered in 2017 continue to deposit in each of the following years, increasing the value 1.8bn potential from customers over time 1.7bn 2021 High levels of customer 0.3bn deposits demonstrate 2020 the confidence and trust 2019 of our custome
Slide 26: Focusing on Acquisitions
FOCUSING ON ACQUISITIONS Acquiring actual assets Acquisition rationale Track record to date – for geographic and/ – Regulatory licences & – USA and Japan or product expansion know-how 26
Slide 27: Focusing on Acquisitions (Cont.)
FOCUSING ON ACQUISITIONS (CONT.) Conservative approach to Returns criteria consideration - size & structure Leveraged by our proprietary Enhanced due diligence technological capabilities 27
Slide 28: Expanding Our Offering – New Markets
EXPANDING OUR OFFERING – NEW MARKETS Engaging next generation of traders Highly established market Large pool of targeted customers Evaluating optimal way to tailor Highly educated trading communities Aim for regulated countries offering to local needs 28
Slide 29: Our Strategic Roadmap
OUR STRATEGIC ROADMAP (All figures below are annualised, approximate and based on management’s current view) Strategic Non OTC New New Expanding OTC offering Deepening Customer objective Products Products Markets in new and existing Engagement markets Revenue $250m $250m objective Incremental annual
Slide 30: Our “Investment in Growth” Cycle
OUR “INVESTMENT IN GROWTH” CYCLE Investment in technology, marketing, Growth from new markets, new products product and people…. and deeper customer engagement… delivers compound growth over time drives scale and enables further investment Significant investment being made Market volatility is an no
Slide 31: Key Takeaways
KEY TAKEAWAYS Very healthy financial position, supported by consistently strong cash generation Enables continued investment in growth and shareholder returns Clear and rigorous approach to investing in development and expansion Strategic approach to enable acquisitions and organic growth Ambitious
Slide 32: Our Approach to Product
OUR APPROACH TO PRODUCT Background Dani has a broad and diverse expertise across product, operations, risk, R&D and technology, leading the product and risk teams at Plus500. Education Dani has a BSc in Computer Engineering and an MBA from Technion Israel Institute of Technology and a Masters in Adv
Slide 33: Product and Risk Team Structure
PRODUCT AND RISK TEAM STRUCTURE Chief Product and Risk Officer Content Product Trading and Risk Technology-based Writers Trading Operations Platforms risk management Content QA TradeSniper Futures UI\UX Hedging Engagement Marketing Website 33
Slide 34: Our Product Offerings
OUR PRODUCT OFFERINGS 30 Languages Admin Across operating systems: Marketing Machine Webtrader Retention Machine iOS (Mobile & iPad) Websites Android (Mobile & Tablets) Localisation Cashier Risk Management 34
Slide 35: Drive Growth Through Product Strategy
DRIVE GROWTH THROUGH PRODUCT STRATEGY customer satisfaction product portfolio and and deliver a competitive and retention penetrate new markets value proposition 35
Slide 36: What Drives Our Product?
WHAT DRIVES OUR PRODUCT? PRODUCT ANALYTICS CUSTOMER FEEDBACK COMPETITIVE LANDSCAPE & REVIEWS A/B Testing as a philosophy App Store ratings & reviews Clear KPIs - feature adoption, retention & general usage Support tickets Business Intelligence & Machine Surveys & user labs Learning Tools MARKET TREN
Slide 37: How We Create a Quote
HOW WE CREATE A QUOTE Maintain Contracts Configure FEED FEED ASSIGN SPREAD EXCHANGE PROVIDERS DEFENCE SPREAD DEFENCE A QUOTE IS READY Active provider Backup provider Backup provider Check and review Take account of exposure limits and corporate actions throughout the process 37
Slide 38: Trading Academy
TRADING ACADEMY Includes: eBook Traders Guide FAQ News feeds 38
Slide 39: +Insights: Discovery Tool
+INSIGHTS: DISCOVERY TOOL 39
Slide 40: 'Plus500 Invest' – Our Share Dealing Platform
‘PLUS500 INVEST’ – OUR SHARE DEALING PLATFORM 2,700+ shares and ETFs available Available as iOS and Android mobile apps 40
Slide 41: Plus500 Futures Trading Product in the US
PLUS500 FUTURES TRADING PRODUCT IN THE US 41
Slide 42: TradeSniper – Tailored for the Retail Trading Community
TRADESNIPER – TAILORED FOR THE RETAIL TRADING COMMUNITY ONE OF THE WORLD’S FIRST FUTURES PLATFORM TAILORED FOR RETAIL CUSTOMERS AN ITERATIVE, INNOVATIVE AND DEVELOPING PRODUCT 42
Slide 43: Our Approach to Risk Management
OUR APPROACH TO RISK MANAGEMENT OUR APPROACH TO HEDGING: Risk policy & process Risk register Targeted hedging on certain instruments Risk approach & controls Our interests align with our customers Risk appetite Supported by embedded risk management technology FIRST LINE: SECOND LINE: THIRD LINE: Inv
Slide 44: Key Takeaways
KEY TAKEAWAYS On-going ability to “stay ahead of the game” and continue to innovate our product for customers Further deployment of new product features, including +Insights Technology enables seamless introduction of new products In the US, we aim to replicate our success elsewhere 44
Slide 45: Break
BREAK LA Plus5OO IT’S TRADING WITH APLUS
Slide 46: Our Marketing Approach
OUR MARKETING APPROACH Background Nir is a senior marketing leader, with substantial technological marketing experience in established and emerging markets. He is responsible for managing a significant global marketing investment at Plus500. He previously held a number of technology-focused roles at
Slide 47: Our Approach to Marketing
OUR APPROACH TO MARKETING Paid Media Organic Content Advertising & Search Partners Search Marketing Sponsorship Performance marketing, Partnerships with Alongside paid search Educational, training Brand recognition through supported by major global leading financial campaigns and news content global
Slide 48: Marketing Strategy Objectives
MARKETING STRATEGY OBJECTIVES 01 ROI vs. Growth? we do both Driving growth and optimising our returns 02 Marketing ‘early birds’ We trial and test every new marketing initiative Ensuring optimised bids Maximise potential during high demand periods 03 and flexible budgets Maintain a strong presence d
Slide 49: Our People
OUR PEOPLE Responsible for approx. $200m annual marketing budget Digital and Offline activity is managed by engineers Chief Marketing Diversity supports creativity and effectiveness (50:50 Officer Females/Males) Marketing Solutions Marketing Data & & Planning Growth Development Marketing Marketing G
Slide 50: Our Technology - Marketing Machine
OUR TECHNOLOGY - MARKETING MACHINE Maintaining high ROI LTV prediction while driving volumes Performance & statistics Real time Optimisation All marketing data (Bids, status) Marketing segmented top to bottom Machine Ads reviewer Traffic trends & segmentations Developed and maintained in house 50
Slide 51: Our Technology - Retention Machine
OUR TECHNOLOGY - RETENTION MACHINE Measurement - A/B testing, Measurement control group Campaign Management Campaign Scheduling & Triggers Semi-automated processes Retention Machine for promptness and scale Market Events Audience Segmentation Developed and maintained in house 51
Slide 52: Retention
RETENTION LTV (Life Time Value) Driving Conversion Targeting Trading Activity Minimising Churn 52
Slide 53: Premium Service
PREMIUM SERVICE Welcome pack Tailored emails 24/7 Premium Service customer support Dedicated Client Managers team Educational Webinars Weekly analysis emails Educational materials 53
Slide 54: Our Brand
OUR BRAND From sport Sponsorships to global campaign with Kiefer Sutherland From brand logo to ‘What Plus500 does’ 54
Slide 55: Brand in Action - New Design for Plus500 Assets
BRAND IN ACTION - NEW DESIGN FOR PLUS500 ASSETS 55
Slide 56: Brand - KPIs & Initial Results
BRAND - KPIS & INITIAL RESULTS KPIs Change Brand awareness Brand searches Plus500 share of voice 56
Slide 57: Our Partners
Google é Apple Bloomberg yahoo/ finance facebook W twitter Plw$500 [1's TRADING WITH A PLUS °/ @)
Slide 58: USA Japan
USA NEXT STOP PlusS500 11's TRADING WITH A PLUS JAPAN
Slide 59: Key Takeaways
KEY TAKEAWAYS Consistent multi-channel, inter-connected approach Major global advertising campaign already delivering Technology-based approach continues to be key driver Our approach is scalable and replicable in new markets 59
Slide 60: Our Leadership Position in Technology
OUR LEADERSHIP POSITION IN TECHNOLOGY Background Al has 14 years experience in software development and has worked in various software engineering roles including team lead, data scientist, architect and CTO. Prior to joining Plus500, Al worked for a number of multi- national technology organisation
Slide 61: Key Objectives
KEY OBJECTIVES Deliver business goals High performing culture & values State-of-the-art Grow & scale R&D “Software Development Life Cycle” Robust production & customer safety Technological advancement 61
Slide 62: Key Components of Our Technology
KEY COMPONENTS OF OUR TECHNOLOGY Customer Trading Engines Customer Engagement – acquisition Customer service Registration OTC Shares Futures through our On-boarding Retention service marketing Payments technology Authentication Market Data Sourcing Value-add services CRM Risk Management Enablement,
Slide 63: Our Methodology
OUR METHODOLOGY DOMAIN ORIENTED CROSS FUNCTIONAL AGILE QA Daily 2w Sprint Backend Frontend BUSINESS DOMAINS TEAMS ARCHITECTURE Sprint Demo & Backlog Retrospective Cross Functional Team (pre-plan) Inverse Conway Law Product Planning Production backlog meeting Ready Increment PM 63
Slide 64: Key Priorities to Support Future Growth
KEY PRIORITIES TO SUPPORT FUTURE GROWTH SYSTEM PEOPLE High Performance Availability Resilience Attract Talent Culture Onboard Employee Scalability Security Effectively Satisfaction Technological Stack Accuracy Employee Development Partnership & Architecture Critical System & Domain Decentralised Fla
Slide 65: Key Takeaways
KEY TAKEAWAYS Proprietary system embedding domain expertise of over a decade Scalable, resilient and highly system availability State-of-the-art software development methodology High performance culture, based on highly skilled and experienced teams of specialists 65
Slide 66: Our Operational Capability
OUR OPERATIONAL CAPABILITY Background Alon is an operations and engineering specialist and is highly skilled in establishing new operations in existing and new markets, with particular knowledge of the latest innovative operational solutions. He is also CEO of the operational entity in Bulgaria. Edu
Slide 67: Mission Statement and Key Priorities
MISSION STATEMENT AND KEY PRIORITIES MISSION STATEMENT: Delivering resources, internal efficiency Customer Internal KPI Centric The foundation and customer-centric Engagement Processes Culture for Scale-up approach to support and Tools and Growth Plus500’s strategic roadmap FOCUS ON PEOPLE, SYSTEMS
Slide 68: Our People
OUR PEOPLE Key objective is driving efficiency Knowledge shared and built between teams Structure designed to optimise processes, resources and functions Foundation for future scalability Common performance matrix and KPIs Organisational culture designed to drive employee retention and excellence wh
Slide 69: Systems and Processes
SYSTEMS AND PROCESSES © 8 0 KPIs MATRIX KNOWLEDGE HUB FOCUS ON DEVELOPMENT Plw$500 [1's TRADING WITH A PLUS 68
Slide 70: Key Focus Areas
KEY FOCUS AREAS Verification Onboarding Customer Payment Support Processing 70
Slide 71: Verification and On-boarding
VERIFICATION AND ON-BOARDING Assessment of potential customers before and during completion of on-boarding Handling time – average c.3.5 minutes 1 million+ documents processed per year Diverse range of verification providers Readiness to scale up capacity when required by more than ten times 71
Slide 72: Customer Support
CUSTOMER SUPPORT Via email, live chat and WhatsApp High levels of customer satisfaction Multiple languages Dedicated teams for trading, premium clients, payment and Handling 1 million client queries per account managers year 72
Slide 73: Payment Processing
PAYMENT PROCESSING Payment processing mechanism developed and operated internally Range of payment processing providers per country Operations has c.20 different payment methods supported agility to make ad-hoc changes in AML and Anti-Fraud mechanism developed internally payment processing as per re
Slide 74: USA - Operational Integration
USA - OPERATIONAL INTEGRATION Operational Trading Back office Regulatory resource platforms and IT and financial 74
Slide 75: Key Takeaways
KEY TAKEAWAYS Clear focus on people, systems and processes Agility and scalability to deliver for customers Highly diversified across network of providers and suppliers Well positioned to support our future strategic roadmap 75
Slide 76: Concluding Remarks
CONCLUDING REMARKS LA Plus5OO IT’S TRADING WITH APLUS
Slide 77: Concluding Remarks
CONCLUDING REMARKS Plus500’s proprietary technology will continue to drive our future success Our robust financial foundation enables investment in growth Growth will be delivered by growing our presence in existing markets, entering new markets and launching new products The US futures represents a
Slide 78: Q&A
7 Q&A * Plus500 IT’S TRADING WITH A PLUS
Slide 79: Disclaimer
DISCLAIMER The Presentation does not constitute or form part of any offer or invitation to sell or issue, or any solicitation of any The Company does not accept any responsibility for the accuracy or completeness of any information reported by offer to purchase or subscribe for, any shares or other