Plus500 Ltd. · LSE:PLUS
Plus500 — H1 2020 Earnings Presentation
37 slides from Plus500's earnings presentation, Aug 11, 2020
Slide 1: Results for the six months ended 30 June 2020
Results for the six months ended 30 June 2020 Presented by: David Zruia, Chief Executive Officer Elad Even-Chen, Chief Financial Officer 11 August 2020 * Illustrative figures
Slide 2: Agenda
Results for the six months ended 30 June 2020 2 Agenda Strategic Results Operating Customer Financial Outlook overview highlights review dynamics overview & regulatory update
Slide 3: Strategic overview
Pluesoo Strategic overview
Slide 4: Our Investment Case
Strategic overview 4 Our Investment Case Enables significant growth opportunities & clear approach to capital allocation: Technology enhancements Developing enhancements and new features Robust functional Product extensions Powerful proprietary infrastructure and Introducing new technology platform
Slide 5: Our Business Model
Strategic overview 5 Our Business Model Scalability & diversity drives re-investment and long-term growth
Slide 6: Technology Edge
Strategic overview 6 Technology Edge Our Value Driver User Interface System Architecture * Illustrative figures Online technology capabilities Back Office In-house development Affiliate Programme enables best-in-class proprietary technology Risk Management Customer retention focused technological ca
Slide 7: Governance and Social Responsibility
Results highlights 7 Governance and Social Responsibility Key focus areas Social responsibility initiatives: Developments in Governance: COVID-19 related activity: Further diversification of the Board: Monetary donation to hospital to help fund Anne Grim nominated for appointment at the critical car
Slide 8: Results highlights
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Slide 9: H1 2020 Operational Highlights
Results highlights 9 H1 2020 Operational Highlights Outstanding performance across all metrics: Market and technology leadership positions reinforced: Heightened volatility in unprecedented market Plus500 remains the leading CFD provider in key regions6 conditions Continued investment in technology
Slide 10: H1 2020 Financial Highlights
Results highlights 10 H1 2020 Financial Summary Extremely strong performance across Financial Highlights all key metrics: Revenues up 281% to $564.2 million, Financial Performance with record level of Customer Income EBITDA up 452% to $361.8 million H1 2020 H1 2019 FY 2019 Q2 2020 Q2 2019 Revenue ($
Slide 11: Shareholder returns
Results highlights 11 Shareholder H1 2020 Shareholder Returns ($m) – Total of $168.3million returns 180 160 140 67.3 Share Buybacks 120 Policy 100 80 Share Buyback Return at least 60% of net profits to 60 Dividend shareholders through dividends and 40 101.0 Dividends share buybacks, with at least 50
Slide 12: Operating review
Pluesoo Operating review
Slide 13: Key market trends during H1 2020
Operating review 13 Key market trends during H1 2020 Plus500 extremely well positioned to Unprecedented market environment manage heightened trading volumes Significant volatility - across all markets, Superior Technology all instruments and all regions Huge commitment and hard work from employees T
Slide 14: Market leadership positions
Operating review 14 Leading industry positions in core markets: Market leadership No.1 CFD provider in the UK9 No.1 CFD provider in Germany10 positions No.1 CFD provider in Spain11 Recent achievements also include: Market Share in CFD Market UK No. 1 for satisfaction for Online Chat Customer Service
Slide 15: Technology developments
Operating review 15 Technology developments Platform enhancements and new features introduced in H1 2020 Continuous development and investment across the platform to further improve high quality customer experience Dark Mode now available across all operating systems, including mobile devices, follo
Slide 16: Active Customer and New Customer KPIs
Operating review 16 Active Customer and New Customer KPIs Strong performance across all regions Active Customers New Customers H1 20/19 Q2 20/19 H1 20/19 Q2 20/19 H1 20 H1 19 % change Q2 20 Q2 19 % change H1 20 H1 19 % change Q2 20 Q2 19 % change UK 54,309 22,141 145% 44,630 16,117 177% 35,828 8,623
Slide 17: Revenue and ARPU
Operating review 17 Revenue and ARPU Strong growth in H1 2020, particularly in Q1 Revenue ($m) ARPU ($) H1 20/19 Q2 20/19 H1 20/19 Q2 20/19 H1 20 H1 19 % change Q2 20 Q2 19 % change H1 20 H1 19 % change Q2 20 Q2 19 % change UK 71.7 16.2 343% 28.5 11.9 139% 1,321 730 81% 639 736 (13%) EEA (exc. UK) 2
Slide 18: Marketing Investment
Operating review 18 Marketing Investment Continued focus on on-line technological capabilities Continued focus of marketing Marketing Spend per Year and by Channel ($m) Online technology investment on online Affiliates channels – increased in H1 2020 Offline 140 Targeted, efficient digital marketing
Slide 19: High Return on Marketing Investment
Operating review 19 High Return on Marketing Investment Consistent returns over a long period of time Cumulative Return Cumulative Return Cumulative Return Cumulative Return 2015 Registrations ($m) 2016 Registrations ($m) 2017 Registrations ($m) 2018 Registrations ($m) 291 400 376 500 700 300 421 61
Slide 20: Offline marketing strategies continue, through Sports Sponsorship
Operating review 20 Offline marketing strategies continue, through Sports Sponsorship including Young Boys in Switzerland in H1 2020, Legia Warsaw in H2 2020, in addition to Atlético Madrid and the Plus500 Brumbies
Slide 21: Long term customer cohort value
Operating review 21 Long term customer cohort value Cumulative average revenue per Active Customer over time Technology enables clear and continued measurement of 5,000 2015 customer value 4,500 2016 2017 Evidence of long term customer 4,000 2018 relationships 3,500 2019 3,000 2020 Strong lifetime v
Slide 22: Customer dynamics
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Slide 23: Active Customer base – growth track record
Customer dynamics 23 Active Customer base – growth track record Step change in growth of Active Customer base every few years Active Customers, 2014 - 2020 350,000 Driven by retention initiatives and quality of technology 300,000 platform, trading opportunities and rapid response to financial 250,00
Slide 24: Analysis of Customer Churn
Customer dynamics 24 Analysis of Customer Churn Business Performance Churn Rates 2017-2020 Retention efforts to enable long term customer relationships 70% 8.33% churn in H1 2020 - benefitting from returning 60% customers 50% Achieved positive churn in Q1 2020 - for the first time 40% 30% Successful
Slide 25: Long term customer relationships
Customer dynamics 25 Long term customer 12% 11% 14% 26% 15% 17% relationships 13% H1 2020 H1 2019 9% Revenue split by Customer Tenure 65% 38% 73% 45% Continued focus on customer retention 0-6 Months 11% 11% 8% 4% In context of materially higher revenue and 7-12 Months 12% 23% New Customer numbers in
Slide 26: Mobile revenues and sign ups by device
Customer dynamics 26 Mobile revenues and sign ups by device Mobile and tablet offering remains popular with Sign ups Revenue customers – helps to drive 100% 100% market share in key territories 90% 90% 80% of total revenues 80% 80% generated through mobile and 70% 70% tablet offerings (H1 2019: 79%)
Slide 27: Our approach to Risk Management and Customer Execution
Customer dynamics 27 Our approach to Risk Management and Customer Execution Risk Management Risk Management Approach aligned Similar customer Business model embedded across frames our approach with our technology execution model to based on generating our platform and our to customer execution platf
Slide 28: Risk Management
Customer dynamics 28 Risk Management Revenue Split Rolling 6.5 Year H1 20 Performance Performance Customer Income # of negative Revenue from customer spreads Customer Trading Amount ($m) revenue days and overnight charges Performance 1% 0 - 0.25 8 Customer Trading Performance 0.25 - 0.5 5 Gains/loss
Slide 29: Regulatory Update
Customer dynamics 29 Regulatory Update Robust Global Regulatory Framework HQ Monetary Authority ISRAEL SECURITIES FINANCIAL SERVICES of Singapore AUTHORITY AUTHORITY Regulatory Developments: Continue to monitor regulatory environment in Australia Plus500 will continue to offer CFDs in accordance wit
Slide 30: Financial overview
Pluesoo Financial overview
Slide 31: Income Statement
Financial overview 31 Income Statement Key Metrics ($m) Significant growth in revenue and EBITDA H1 2020 H1 2019 FY 2019 H1 20/H1 19 Corporation Tax status update: Revenue 564.2 148.0 354.5 281% Corporation Tax rate of Plus500 Ltd's Selling and Marketing 179.4 71.2 138.9 152% Expenses reduced to 12%
Slide 32: Cost profile
Financial overview 32 Lean Cost Structure ($m) Cost profile 100% Key elements ($m) 80% 60% Fixed 40% Variable 20% 0% H1 2020 H1 2019 % Change H1 2020 H1 2019 * Advertising, technology and marketing 125.8 51.3 145% costs Continued cost base flexibility, with 82% of H1 2020 costs being variable Proces
Slide 33: Balance Sheet
Financial overview 33 Balance Sheet Key Metrics ($m) H1 2020 FY 2019 H1 20/FY 19 Balance sheet position strengthened further – Plus500 remains debt-free Cash and Cash Equivalents 587.8 292.9 101% $587.8 million in cash balances – well Other Current Assets 14.8 14.7 1% positioned in challenging macro
Slide 34: Cash Flow
Financial overview 34 Cash Flow Key Metrics ($m) Operating Activities: H1 2020 H1 2019 H1 20/H1 19 Substantial cash generation, with operating cash Cash generated from operations 385.0 44.4 767% conversion of 106% Interest received, net 1.9 2.2 )14%( Limited capex needs and Income tax paid, net )49.
Slide 35: Outlook
Pluesoo Outlook
Slide 36: Outlook
Outlook 36 Outlook Plus500 well positioned for future growth Board remains very confident about future prospects of Plus500 Medium to Long Term Ambition: Customer Income so far in H2 2020 more than double that of the Sustainable growth in revenue prior year Consistent levels of cash generation Durat
Slide 37: Disclaimer
Appendices 37 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 the offer to purchase or subscribe for, an