IG Group Holdings plc · LSE:IGG
IG — H1 FY2023 Earnings Presentation
34 slides from IG's earnings presentation, January 2023
Slide 1: Results presentation, half year ended 30 November 2022
Results presentation Half year ended 30 November 2022 POWERING THE PURSUIT OF FINANCIAL FREEDOM > FOR THE AMBITIOUS
Slide 2: What we will discuss today
What we will discuss today 01 02 05 04 CEO reflections June Felix Financial performance Charlie Rozes Strategic progress June Felix Q&A
Slide 3: CEO reflections
CEO reflections June Felix Chief Executive Officer
Slide 4: Delivering in all macro environments
Delivering in all macro environments 49-day UK government War in Ukraine Rising iiflations => Wide i yi offering Interest rates | Broad geographical reach ; + Gilt rates Engaging content USD/GBP rate + [ q High-quality, active traders | Sustainable performance IG Group
Slide 5: Another record half for revenue
Another record half for revenue OPERATIONAL PERFORMANCE STRATEGIC DELIVERY ANNOUNCED TODAY B11% 1% RETURNED IN THE PERIOD £519.1m @ £260.7m B3% pts 19% TOTAL PROFIT OWN FUNDS NON-OTC DIVIDEND SHARE REVENUE BEFORE TAX TOTAL BUYBACK REVENUE IG G rou All metrics are for continuing operations, on an adj
Slide 6: Our sustainable and differentiated business
Our sustainable and differentiated business Growing business from high-quality client base Increasingly diverse business Underpinned by our technology and innovation Market-leading risk management IG Group
Slide 7: Our high-quality clients continue to trade
Our high-quality clients continue to trade OTC DERIVATIVES CLIENT RETENTION IN LINE WITH HISTORICAL AVERAGE —FY19 —FY20 —FY21 ——FY22 ——Historic average (FY15-FY18) Year 1 Year 2 Year 3 Year 4 OTC DERIVATIVES NET TRADING REVENUE LOYAL CLIENT BASE DRIVING OUR TRADING REVENUE Value from new clients +10
Slide 8: Portfolio growth on track
Portfolio growth on track CORE MARKETS + HIGH POTENTIAL MARKETS Total revenue Total revenue £424.3m 6% £948m 28% * All regional offices grew in Q2 vs Q1, as our * Spectrum onboards Societe Generale high-quality clients continue to trade * Record quarter from tastytrade and IG US * Japan has grown to
Slide 9: Delivering consistent and sustainable growth
Delivering consistent and sustainable growth RECORD PERFORMANCE Delivered record performance despite challenging markets MEETING TARGETS Meeting our ambitious medium-term targets for our portfolios DIVERSIFICATION Continue to diversify by product and geography JEL RS LCINS Continue to create, attrac
Slide 10: Financial performance
Financial performance Charlie Rozes Chief Financial Officer
Slide 11: Sustaining momentum across the Group
Sustaining momentum across the Group Total revenue £519.1m 411% Adjusted profit before tax £260.7m f 1% Client money balance £4.5bn §(8%) Adjusted basic EPS 49.7p $(2%) Dividend per share 13.26p T 2% £600 £500 £400 £300 £200 £100 £0 £300 £250 £200 £150 £100 £50 £0 TOTAL REVENUE (£m) H1FY20 H2FY20 H1
Slide 12: Continuing to invest and grow
Continuing to invest and grow Adjusted basis (£m) H1 FY23, H1FY22 Change Net trading revenue 494.9 466.1 6% Net interest income / (expense) 24.2 (0.4) Total revenue 519.1 465.7 11% Being cy nde e928 Net operating income 516.2 . 10% Total operating costs (256.8) . 25% Operating profit 259.4 . (1%) om
Slide 13: Trading revenues remain robust
Trading revenues remain robust Adjusted trading revenue (£m) H1 FY23 H1 FY22 Change OTC derivatives 416.5 392.6 6% Exchange traded derivatives 67.1 57.6 16% Stock trading and investments 11.3 15.9 (30%) Total Group 494.9 466.1 6% Active clients (000) H1 FY23 H1 FY22 Change OTC derivatives 169.1 158.
Slide 14: Significant cash balances deliver new revenue stream
Significant cash balances deliver new revenue stream Type of Cash balance Net interest funds 30 Nov 22 H1 FY23 Wy ci etebn —£16.7m & cle’ — 89.4bn—-£7.5m it Corporate £1.9bn £2. 4m funds IG Cash balance in the US is held at a third party, and therefore not recognised on the Balance Sheet, nor within
Slide 15: Core Markets+ businesses powering forward
Core Markets+ businesses powering forward £180m £160m £140m @H1FY20 H2 FY20 wi > £120m H1FY21 = st0om sH2FY21 S mH1 FY22 z 8 £80m mH2 FY22 = £60m HI FY23 i = £40m £0m Sun Japan Australia Singapore EMEAnon-EU Emerging Stock trading _ Institutional Markets H1FY23vH1FY20 +70% +250% +57% +34% +70% +20%
Slide 16: High Potential portfolio delivering strong growth
High Potential portfolio delivering strong growth PRO FORMA HIGH POTENTIAL MARKETS £16.7m of interest income generated Total revenue (£m) H1FY23. H1FY22 _ Change #BE16.5m ; the first 6 months. up from £0 An US options and futures 779 61.8 26% US FX 11.0 7.5 46% US market making 0.5 1.0 (54%) t +2 Ne
Slide 17: Managing costs while investing for growth
Managing costs while investing for growth Adjusted operating costs (£m) H1FY23 H1FY22 Change , * Total operating costs increased 25% on H1 FY22 Fixed remuneration 93.1 69.0 35% " ere ° and were down 1% on H2 FY22 Advertising and marketing 43.7 38.0 15% — Variability in costs by half due to phasing *
Slide 18: Allocating capital in line with our framework
Allocating capital in line with our framework 01 REGULATORY CAPITAL REQUIREMENTS Buffer above regulatory capital requirements of £503m 02 ORGANIC INVESTMENTS Continued organic investment in the business 03 COMMITMENT TO CITIZENSHIP Over £4m pledged to charitable causes from FY22 profits 04 REGULAR D
Slide 19: Strong results drive balance sheet strength
Strong results drive balance sheet strength £259.4m £1.15bn £232.2m £883.8m £211.3m £503.3m Allnumbers are H1 FY23 or as at 30 November 2022, on an adjusted basis, from continuing operations
Slide 20: Guidance and outlook
Guidance and outlook Maintain medium-term guidance of total revenue growth of 5-7% for Core Markets+ and 25-30% for High Potential Markets per annum PORTFOLIOS For interest income in the US, expect around $4m annually per 25 bps increase in the Fed Funds rate For interest income outside the US, expe
Slide 21: Strategic progress
Strategic progress June Felix
Slide 22: Our content reaches millions of traders globally
Our content reaches millions of traders globally -—— OUR GLOBAL REACH IN H1 —+ ¢ 50 million social media video views from IG Group content across our brands * 7.6 million views of tastylive videos * 3.7 million total views of IG market news, analysis and insights * 63 million page views of DailyFX c
Slide 23: Driving tastytrade's progress
Driving tastytrade’s progress Interest income BALANCED REVENUE STREAMS H1 FY22 ‘N vy @r~ \\ / Investopedia \ 2022 | online Brokers Awards Best Broker for Options H1 FY23 Commission IGNITING OUR GROWTH LEVERS —— * Increasing our Total Addressable Market by 13 million active equity traders * New marke
Slide 24: tastytrade brand campaign coming in H2
tastytrade a brand campaign | ..coming in H2... tastytrade, Inc. (| Inc.) is a registered br yer of IG Group
Slide 25: Spectrum's expanding network
Spectrum’s expanding network ISSUERS AND BROKERS EXCHANGE MARKET MAKERS ~ 6,800 90 annual active clients s ) SPECTRUM underlying assets h ; EEUU SSUES ctl } Ad ——— H } 3,000 BrightPoo! tradeable instruments a oo | = EQUITA HF ! = = SOCIETE = GENERALE | © Intermonte 50,000 total | | 500 underlying ad
Slide 26: Embedding ESG at the core of the business
Embedding ESG at the core of the business [a Products Top Employer in the UK as certified by Top Employers Institute £4 million Brighter Future Fund focused on inclusive education and financial literacy Engaging with ESG 1 in 3 employees engaging with ESG initiatives Diversity and inclusion Further
Slide 27: Understanding our clients
Understanding our clients 92% of clients expect their trading volumes to increase or remain the same in the next 6 months 83% of clients see trading opportunities during an economic downturn 80% @ of clients value the SY) opportunity trading provides to work towards their goal of financial freedom S
Slide 28: Powering towards a stronger future
Powering towards a stronger future © Multiple growth levers in the significant target markets Diversified business by geography and product High quality client base driving sustained and enduring value © Market-leading content, technology and platforms Strong balance sheet supporting disciplined cap
Slide 29: Q&A
Q&A
Slide 30: Appendices
Appendices
Slide 31: Reconciliation of alternative performance measures
Appendix 1 Reconciliation of alternative performance measures Adjusted net trading revenue (£m) H1FY23 H1FY22 Adjusted profit before taxation and EPS £m (unless stated) H1FY23. H1FY22 Net trading revenue 494.9 471.9 Earnings per share 45.8p 48.1p Foreign exchange gain associated with tastytrade - 68
Slide 32: Half year cost walk
Appendix 2 Half year cost walk Reg fees & 7 variable rem Advertising 7 Hi 12 and marketing 6 u Hr ancotner Le | || Revenue (5) IT and other i related costs (19) Fixed | | Advertising remuneration 17 and marketing | £ million Fixed T remuneration L J +5% Reg fees & T variable rem +17% 4 a Charitable
Slide 33: Net trading revenue and drivers - Core Markets+
Appendix 3 Net trading revenue and drivers - Core Markets+ H1 H2 H1 H2 H1 H2 H1 Revenue (£m) FY23_ FY22 FY22FY21_FY21__—~FY20__—~FY20 UK 157.3 170.9 157.2 167.4 150.0 148.0 92.7 EU 519-522 51.2836 490A? 88.1 EMEA non-EU 25.6 245 25.9 28.2 28.4 32.5 21.3 Australia 493 431 452 581 616 514 369 Singapor
Slide 34: Net trading revenue and drivers - High Potential Markets
Appendix 4 Net trading revenue and drivers — High Potential Markets H1 H2 H1 H2 H1 H2 H1 Revenue(£m) FY23FY22) FY22) FY21 FY21 FY20_ FY20 US options and futures 61.2 67.3 528 - a ~ ~ US FX 11.0 9.1 75 64 5.2 4.2 1.6 US market making 0.5 0.8 1.0 1.6 1.9 18 1.3 Total US 727 67.2 61.3 8.0 71 6.0 2.9 Eu