IG Group Holdings plc · LSE:IGG
IG — FY2005 Earnings Presentation
13 slides from IG's earnings presentation, August 2005
Slide 1: Results presentation Year ending 31 May 2005
Results presentation Year ending 31 May 2005 Nat le Roux, CEO Tim Howkins, CFO
Slide 2: Highlights
Highlights Turnover Turnover up 25% year-on-year 70 60 EBITDA up 40% year-on-year 50 CA GR 39% 40 EBITDA margin increased to 56% (£m) 30 20 Debt paid down at IPO 10 0 1998 1999 2000 2001 2002 2003 2004 2005 Current trading strong EBITDA 40 100 90 35 80 30 70 25 Margin (%) 60 (£m) 20 50 15 40 30 10 2
Slide 3: Profit and loss
Profit and loss 2005 2004 Growth £'m £'m Strong revenue growth continues Turnover 62.3 49.8 +25% Betting duty (2.5) (1.9) +32% Operational gearing continues to drive up profit margins 59.8 47.9 +25% Interest on client money 3.7 2.2 Increase in betting duty reflects shift in mix Operating costs (28.3
Slide 4: Revenue by business line
Revenue by business line 2004 2005 H1 H2 Total H1 H2 Total Growth £'000 £'000 £'000 £'000 £'000 £'000 Financial UK 18,081 21,387 39,468 21,272 25,464 46,736 +18% Australia 492 935 1,427 1,841 1,935 3,776 +165% Binaries 897 1,256 2,153 2,541 2,409 4,950 +130% Sports Binaries 78 49 127 458 259 717 +46
Slide 5: Financials - UK
Financials - UK Growth trend continues Number of transactions¹ Growth driven by: 300,000 On-line take up (86% now on-line) Enhancements to product range and technology 250,000 Introduced and institutional clients 200,000 Account opening remains strong 150,000 100,000 50,000 0 04 05 03 04 03 3 04 4 0
Slide 6: Financials - Australia
Financials - Australia Continued strong growth momentum from Australian business Number of clients dealing - Australia (monthly) Number of transactions¹ 1,200 25,000 1,000 20,000 800 15,000 600 10,000 400 5,000 200 0 0 02 02 3 03 03 4 04 04 5 02 03 04 05 02 02 3 03 03 4 04 04 5 02 03 04 05 -0 -0 -0
Slide 7: Binary bets
Binary bets Binary betting continues to flourish Number of transactions¹ 60,000 50,000 Predominantly UK client base 40,000 Sports binaries showing strong volume growth 30,000 Broadened product range aids reduction of income volatility Profitability per unit of volume disappointing in second half, 20
Slide 8: Client acquisition is the key growth driver
Client acquisition is the key growth driver Continued success of on-line account opening New client activity Number of clients dealing¹ 12,000 25,000 10,000 20,000 CAGR 28% 8,000 Number of accounts 15,000 6,000 10,000 4,000 5,000 2,000 0 0 H1 H2 H1 H2 H1 H2 H1 H2 H1 H2 H1 H2 H1 H2 H1 H2 H1 H2 H1 H2
Slide 9: Client churn
Client churn Lifecycle of clients that started in FY 2000 A significant proportion of new clients trade for only a short 6,000 time 5,000 After an initial drop off, the rate of client churn declines steadily 4,000 3,000 Those clients that remain generate increasing revenue 2,000 After two years the
Slide 10: Expanding the reach of binaries
Expanding the reach of binaries Market making agreements with exchanges – Betting exchanges cannot achieve liquidity in fast moving markets – Financial and some sport – Two market maker agreements concluded White label opportunities – Enabling fixed odds operators to offer financial markets – Enabli
Slide 11: International expansion
International expansion A twin track approach to Asia – Chinese language website www.ggg168.com now live Targeting Chinese speakers worldwide Experimental marketing began July Marketing online – Applying for regulated status in Singapore Establishing local sales office Offering FX and CFDs
Slide 12: Outlook
Outlook Foundations in place to deliver future growth Continuing strong growth from UK core business Australia growing rapidly New distribution channels for binaries Further international expansion - both regulated and unregulated Business debt free and highly cash generative - 12 -
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