Plus500 Ltd. · LSE:PLUS
Plus500 — FY2019 Earnings Presentation
34 slides from Plus500's earnings presentation, 2020
Slide 1: Results for the twelve months ended 31 December 2019
Results for the twelve months ended 31 December 2019 London Stock Exchange symbol: PLUS * Illustrative figures
Slide 2: FY 2019 Highlights: Financial Performance
FY 2019 Highlights Financial Performance Financial Summary Robust performance across all key metrics in H2 H2 2019 H1 2019 H2 2018 FY 2019 FY 2018 2019 vs. H1 2019, mainly driven by more volatile Revenue ($m) 206.5 148.0 254.9 354.5 720.4 market conditions: Operating Expenses ($m) 80.9 83.5 98.3 164
Slide 3: FY 2019 Highlights: Shareholder Returns
FY 2019 Highlights Shareholder Returns FY 2019 Shareholder Returns ($m) – Total of $151.7m Earnings per Share ($) 150 2.5 30 120 2 Share Buybacks 50 90 100% of 1.5 FY 2019 60 Net Profit 1 40.8 Dividends 30 0.5 30.9 0 0 2015 2016 2017 2018 2019 H1 H2 The Company’s dividend policy is to return at leas
Slide 4: FY 2019 Highlights: Operational Highlights
FY 2019 Highlights Operational Highlights Average of approximately 3 million customer trades executed per month in FY 2019 Average deposit per Active Customer increased 19% year on year at $5,116 (FY 2018: $4,284) Continued investment in innovation and technology throughout the entire customer journ
Slide 5: Business Performance
Business Brand Regulatory Financial Investment Performance Awareness Framework Overview Summary 5
Slide 6: Revenues Breakdown
Business Performance Revenues Breakdown Revenue ($m) ARPU1 ($) % H2 19 H1 19 % Change FY 19 FY 18 % Change H2 19 H1 19 % Change FY 19 FY 18 Change UK 22.4 16.2 38% 38.6 100.5 (62%) 1,100 730 51% 1,256 2,199 (43%) EEA 89.7 61.2 47% 150.9 384.7 (61%) 1,093 747 46% 1,334 2,154 (38%) (exc. UK) Australia
Slide 7: Active Customers and New Customers KPIs
Business Performance Active Customers and New Customers KPIs Active Customers1 New Customers2 % H2 19 H1 19 % Change FY 19 FY 18 % Change H2 19 H1 19 % Change FY 19 FY 18 Change UK 20,366 22,141 (8%) 30,716 45,694 (33%) 6,309 8,623 (27%) 14,932 21,349 (30%) EEA 82,039 82,025 0.02% 113,096 178,576 (3
Slide 8: Key Financial Indicators and Lean Cost Structure
Business Performance Key Financial Indicators ($m) Lean Cost Structure ($m) 100% FY 2019 FY 2018 % Change 90% 47.8 56.6 80% Advertising and marketing costs 95.6 125.4 (24%) 70% 60% Processing costs 15.8 20.1 (21%) 50% 40% Payroll and related expenses 22.6 22.1 2% 30% 116.6 158.5 20% Variable bonuses
Slide 9: Revenue Split by Customer Tenure
Business Performance Revenue Split by Customer Tenure The Group continued to invest in technological retention initiatives to enhance the overall customer experience 73% of FY 2019 revenue derived from customers who have traded for more than one year (FY 2018: 73%) 27% of FY 2019 revenue derived fro
Slide 10: High Return on Marketing Investment
Business Performance High Return on Marketing Investment Marketing Spend per Year and by Channel ($m) 125 117 Online 140 * 104* 13* 16* 120 * 13* Affiliates * * 9* 9 Offline 100 15 15* 6 27 * Majority is Atletico Madrid 80 sponsorship deal 8 1 60 * 4 103 1 89 94 40 * 77 73 1 3 56 20 2 32 21 0 2012 2
Slide 11: High Return on Marketing Investment
Business Performance High Return on Marketing Investment Cumulative Return - 2015 Registrations ($m) Cumulative Return - 2016 Registrations ($m) Cumulative Return - 2017 Registrations ($m) 2015 2016 2017 2018 2019 2016 2017 2018 2019 2017 2018 2019 600 M 600 M 600 M 496 500 M 500 M 500 M 89 M 400 M
Slide 12: Approach to Customer Execution
Business Performance Approach to Customer Execution Plus500 acts as principal to the customer trade (like its peers) Plus500 has no 'opinion' on direction of market movements The Group’s market exposure is dictated by customers’ views of market trading opportunities Company’s risk management framewo
Slide 13: Analysis of Customer Churn
Business Performance Analysis of Customer Churn Churn Rates 2017-2019 Retention efforts to enable increased customers’ lifetime 60% 59% 2017 31% churn in H2 2019, aided by continued focus on 2018 technological retention initiatives 50% 2019 43% 41% Broadened product offering, accompanied with rapid
Slide 14: Operational Progress
Business Performance Operational Progress Continuous focus on innovation and technology throughout the entire customer journey: Trading experience: Added analysis package to our WebTrader, iOS and Android platforms, including volume indicators, drawing tools and an extensive range of technical indic
Slide 15: Brand Awareness
Business Brand Regulatory Financial Investment Performance Awareness Framework Overview Summary 15
Slide 16: Brand Awareness: Market Share in CFD Market
Brand Awareness Market Share in CFD Market Plus500 retained leading industry positions in core markets: No.1 CFD provider in the UK1 No.1 CFD provider in Spain2 No.1 CFD provider in Germany3 23% 17% Australia’s best CFD mobile platform4 Market Share (%) 14% 11% 13% 13% Recent achievements also inclu
Slide 17: Global Growth Opportunities
Global Growth Opportunities Strategic Expansion into new geographic regions leveraging the strong Plus500 international brand and capabilities Product extension enabled by further development of the current technology platform Retaining robust financial position while delivering attractive returns t
Slide 18: Regulatory Framework
Business Brand Regulatory Financial Investment Performance Awareness Framework Overview Summary 18
Slide 19: Global Strong and Robust Regulatory Framework
Regulatory Framework Global Strong and Robust Regulatory Framework HQ Monetary Authority ISRAEL SECURITIES FINANCIAL SERVICES of Singapore AUTHORITY AUTHORITY 19
Slide 20: Regulatory Developments
Regulatory Framework Regulatory Developments During the year, and as anticipated, the majority of EU-member states adopted national product intervention measures relating to CFDs reflecting the ESMA product intervention measures which came into force in August 2018 ASIC in Australia released a consu
Slide 21: Financial Overview
Business Brand Regulatory Financial Investment Performance Awareness Framework Overview Summary 21
Slide 22: Income Statement
Financial Overview Income Statement Key Financial Indicators – Income Statement ($m) Efficient cost structure reflecting a controlled H2 2019 H1 2019 FY 2019 FY 2018 FY 19/FY 18 cost base at all times Trading Income 206.5 148.0 354.5 720.4 (51%) Optimised effective tax rate Selling and Marketing 67.
Slide 23: Balance Sheet
Financial Overview Balance Sheet Key Financial Indicators – Balance Sheet ($m) No debt and loans FY 2019 FY 2018 FY 19/FY 18 Cash and Cash Equivalents 292.9 315.3 (7%) Client money held with reputable financial institutions Other Current Assets 14.7 12.8 15% Total Current Assets 307.6 328.1 (6%) Str
Slide 24: Cash Flow
Financial Overview Cash Flow Key Financial Indicators – Cash Flow ($m) FY 2019 FY 2018 FY 19 / FY 18 Strong cash generation Operating Activities: 170.1 495.0 (66%) Cash generated from operations Limited capex needs Interest received, net 4.8 3.8 26% Low capital intensity Income tax paid, net (47.6)
Slide 25: Investment Summary
Business Brand Regulatory Financial Investment Performance Awareness Framework Overview Summary 25
Slide 26: Market Leading Technology
Business Model Market Leading Technology Proprietary technology, developed in-house - key differentiator and flexible advantage System Architecture User Interface rapid product development consistent experience across all platforms “Marketing Machine” efficient acquisition of new customers Back Offi
Slide 27: Cutting-Edge Proprietary Technology
Cutting-Edge Proprietary Technology Plus500 is, at its core, a technology company Leadership in innovation and R&D is a key driver for growth: Plus500 excels at understanding customer requirements: Proprietary technology suite enables rapid response Upgraded WebApp platform interfaces for further us
Slide 28: Sponsorships
Sponsorships : Online Affiliates Ipsos? Marketing Bloomberg Marketin g Engineers Investing.com 2 finanzenenet ui ach ! bh e Gag Marketing In-house R&D Studio o> — op = Plussoo
Slide 29: * Illustrative figures
[Partner How the Coronavirus Can Infect Global Supply Chains 76.4% of retail CFD accounts lose money. Bloomberg Businessweek =Pluss00 Partner = & Notifications Cannabis Stocks’ Earnings: Aurora Cannabis, Canopy Growth and Tilray release earnings this week. Will they live up to the hype? Netflix drop
Slide 30: Outlook
Outlook Outlook Encouraged by the momentum built through the year end – heightened levels of volatility in the financial markets due to global events Customer trading patterns have now adjusted following the regulatory changes introduced in Europe last year Customer retention metrics are improving a
Slide 31: Appendices
Appendices wm PTS e(** jm
Slide 32: Risk Management: Revenue Split and Rolling 6 Year Performance
Risk Management Revenue Split Rolling 6 Year Performance FY 19 Performance Customer Income 1% Amount # of negative 10% ($m) revenue days Revenue from customer spreads and overnight charges 0-0.25 28 0.25-0.5 14 Customer Trading Performance 0.5-1.0 7 Gains/losses on customers’ trading >1.0 6 position
Slide 33: Minimising Downside Risk: 85% Positive Trading Days in 2019
Risk Management Minimising Downside Risk: 85% Positive Trading Days in 2019 In 2019 the Group made a positive revenue on approximately 85% of the trading days with remaining 15% of trading days showing mostly relatively immaterial negative revenue. The average daily loss in 2019 was less than $411K
Slide 34: Disclaimer
Disclaimer The Presentation does not constitute or form part of any offer or invitation to sell or issue, or any solicitation of any offer to Forward-looking statements are identified by their use of terms and phrases such as “believe”, “targets”, “expects”, “aim”, purchase or subscribe for, any sha