Ig Group Holdings Plc · LSE:IGG
Ig — FY2021 Earnings Presentation
42 slides from Ig's earnings presentation, July 2021
Slide 1: Results presentation: Accelerating strategic momentum
Results presentation Accelerating strategic momentum Full year ended 31st May 2021
Slide 2: What we will discuss today
What we will discuss today IG Group 01 O02 05 04 O05 CEO reflections June Felix Financial performance Charlie Rozes tastytrade June Felix Strategic update June Felix Guidance and summary Charlie Rozes & June Felix
Slide 3: CEO reflections
O01 CEO reflections June Felix Chief Executive Officer IG Group
Slide 4: CEO reflections
CEO reflections 1. Delivered record performance against all key metrics 2. Strategic decision making accelerated growth and diversification — Completed strategic tastytrade acquisition 3. Capitalised on an outstanding year to build a foundation for future growth 4. Exceeded expectations against grow
Slide 5: FY22 FY19 FY20
FY22 FY19 FY20 FY21 FY22 FY19 FY20 FY21 1
Slide 6: • – • • • 01/06/2017 01/06/2018 01/06/2019 01/06/2020
• – • • • 01/06/2017 01/06/2018 01/06/2019 01/06/2020
Slide 7: Leading the way as a responsible corporate citizen
Leading the way as a responsible corporate citizen ESG highlights Funded technology to enable young people to access remote learning during the pandemic * Formalised ESG strategy with the Brighter Future | ll framework * Distributed £5 million Brighter Future Fund — Helped to establish new charities
Slide 8: Financial performance
Financial performance Charlie Rozes Chief Financial Officer IG Group fo
Slide 9: FY21 highlights
FY21 highlights: An outstanding year - record revenues, profits, and active clients Net trading revenue Active clients £861.3m 33% 431% PBT First trades £477.8m 61% T39% Basic EPS Client money balance’ 108.2p toeex T50% Total dividend per share 43.2p 1 All metrics are on an adjusted basis excluding
Slide 10: Income statement
Income statement Significant expansion of profit margin (£m) FY21 FY20 _% Change Net trading revenue 861.3 649.2 33% coctntng income and other 74 46 Net operating income 868.4 653.8 33% Operating expenses (334.9) (314.2) 7% Variable remuneration (51.5) (44.3) 16% Total operating costs (386.4) (358.5
Slide 11: Revenue by product
Revenue by product Strong growth consistently delivered across the whole product range Revenue (£m) FY21 FY20 %Change OTC leveraged 798.2 617.2 29% Stock trading & investments 38.7 13.6 184% Exchange traded derivatives 24.4 18.4 33% Total Group 861.3 649.2 33% Active clients (000) FY21 FY20 %Change
Slide 12: OTC leveraged revenue drivers
OTC leveraged revenue drivers Sustained increase in size of the active client base ACTIVE CLIENTS AND REVENUE PER CLIENT 160k 2,000 EE Active Clients —Revenue per client 140k 120k 1,500 100k 80k 1,000 Active clients 60k 40k 500 20k 0k Qi @2 @3 @4 @1 @2 Q@3 Q4 Q1 @2 QS Q4 FY19 FY20 FY21 * Step change
Slide 13: OTC leveraged revenue
OTC leveraged revenue Significant contribution from new clients for second consecutive year (£m) 74 (27) 125 | | P| — _. Existing CS ZZ Ou? clients trading (42) Returning New more are Existing clients clients trading clients not more trading FY20 (66) Existing clients not trading 10 Returning client
Slide 14: OTC leveraged new client retention
OTC leveraged new client retention High quality, loyal clients drive enduring, multi-year revenue stream RETENTION OF NEW CLIENT COHORTS 100% = = Historic Average (FY14-FY17) + ‘Long tail’ revenues provide solid base of recurring revenue 9, —FY18 . . . . 80% — 8 * Client demographics and trading beh
Slide 15: Operating expenses
Operating expenses Delivered on our guidance, demonstrating good cost control (Em) IT, Market data * Underlying operating expenses in line with — andcomms _ Other Revenue- previous guidance, despite significant 44 0.5 — Ped costs outperformance on revenue — 3% increase plus £10m investment aeinereas
Slide 16: £800m £700m £600m £500m £400m £300m £200m £100m £0m • • – • •
£800m £700m £600m £500m £400m £300m £200m £100m £0m • • – • •
Slide 17: Combined Group income statement
Combined Group income statement tastytrade brings record FY21 revenues, profits and active clients to the Group’ IG tastytrade Pro forma £m FY21 FY21 FY21 Net trading revenue 861.3 100.6 961.9 Petey mre m1 18s Net operating income 868.4 102.4 970.8 Total operating costs (386.4) (56.6) (443.0) Loss o
Slide 18: tastytrade
05 tastytrade June Felix Chief Executive Officer IG Group
Slide 19: The know-how, the technology
the know-how the technology • • – – – – – • – – •
Slide 20: 4g -\. me ES " i a”
4g -\. me 3 ES " i a” A yeh trade | A
Slide 21: Transforms scale and breadth in US
Transforms scale and breadth in US NUMBER OF ACTIVE TRADERS IN US MARKET’ BROADENS PRODUCT OFFERING FX Binaries Futures Options Equities IG @ ® O O tastyworks. O oO e e@ | contines i i i * US options and futures market is bigger than our CFD/FX and turbo markets combined * Priorities are: , Options
Slide 22: Combined opportunities
Combined opportunities Accelerate tastytrade’s international Sophisticated marketing capabilities Revenue synergies in US growth ambition * Capitalise on IG’s multi-year global * Complementary audience for IG and * Utilising IG’s: investment in SEO and digital marketing tastytrade provides cross-sel
Slide 23: Strategic update
04 Strategic update June Felix Chief Executive Officer IG Group
Slide 24: Core Markets
Core Markets Outperformed expectations, revenue CAGR 30% from FY19 REVENUE PERFORMANCE Our May 2019 target: Revenue growth at around 3 - 5% over the medium term MEDIUM TERM TARGET * Capitalised on a period of high client demand — Broad product offering — Innovative products and 24-hour trading — Dee
Slide 25: Significant Opportunities
Significant Opportunities Substantially achieved strategic targets a year ahead of plan REVENUE PERFORMANCE FY22 TARGET Our May 2019 target: An increase in revenue of £100m, to around £160m in FY22 * Delivered £152m revenue, substantially achieving the £160m revenue target a year ahead of plan 8 i=}
Slide 26: Website design & account opening enhancements
Website design & FY21 FY19 Var % account opening enhancements Key influencer partnerships New leadership and Onboarded first team Brand launch large Institutional client 2019 2021 • • – – – – –
Slide 27: Core Markets+
Core Markets+ Revenue growth of 5 - 7% per annum over the medium term, from FY22 S50 (a ¢ aS Ea 1 © PS BM crim * Our existing Core Markets + Revenue generated from this segment expected to — UK & Ireland — Singapore moderate in FY22 — Europe — Australia * Revenue growth of 5 - 7% per annum over the
Slide 28: High Potential Markets
saners SIGOPPS High Potential Markets Revenue growth of 25 - 30% per annum over the medium term, from FY21 HIGH POTENTIAL MARKETS * Markets with higher anticipated levels of medium term growth and diversification opportunities — US businesses - tastytrade, RFED, Nadex and DailyFX — Europe- Spectrum
Slide 29: Stronger than today
Stronger than today Diversifying our portfolio over the medium term PRODUCT SPLIT GEOGRAPHIC SPLIT FY21 MEDIUM TERM FY21 MEDIUM TERM OTC leveraged Non OTC ROW US WIDENING OUR REACH 2.1M POTENTIAL TRADERS 1.1m client registrants OVER 400,000 ACTIVE UNIQUE CLIENTS IG tastytrade 29
Slide 30: Guidance and summary
IG Group Guidance and summary Charlie Rozes Chief Financial Officer June Felix Chief Executive Officer
Slide 31: Guidance
Guidance FY22 GUIDANCE Anticipate some moderation in Core Markets+ revenue in FY22 from record levels in FY21 As a result of 28 June completion, 11 months of tastytrade revenue and profit will be brought into FY22 results FY22 total operating costs anticipated to increase by around 4% on the pro for
Slide 32: Summary and outlook
Summary and outlook Accelerating strategic momentum SUMMARY OUTLOOK * Strongest year on record * Continue to deliver diversification * Grown our business ahead of plan and delivered * Strong growth trajectory over the medium term diversification + Better positioned than ever before to deliver * Show
Slide 33: Appendices
Appendices IG Group
Slide 34: Reconciliation of non-IFRS performance measures
Appendix 1 Reconciliation of non-IFRS performance measures Adjusted profit before taxation and EPS Adjusted revenue (£m) FY21 FY20 %Change £m (unless stated) FY21 FY20 Net trading revenue 853.4 649.2 31% Earnings per share (p) 100.7 65.3 Unrealised FX hedging loss _ 79 . . Weighted average number of
Slide 35: Portfolio restructure — pro forma FY21
Appendix 2 Portfolio restructure — pro forma FY21 Adjusted revenue (£m) Marner’ High rotential FY21 709.5 151.8 Japan 68.7 (68.7) Emerging Markets 34.7 (34.7) IG Prime 12.3 (12.3) tastytrade 100.6 Pro forma FY21 825.2 136.7 35
Slide 36: Full year analysis - Core Markets
Appendix 3 Full year analysis - Core Markets Revenue (Em) Fy21__ FY20 Revenue per client (£) Fy21___FY20 UK 3174 2407 UK 4,261 3,787 EU 1027 878 EU 2,392 2,417 EMEA non-EU 56.5 538 EMEA non-EU 6161 6,344 Australia 1197 88.2 Australia 4,250 3,513 Singapore 74.5 56.7 Singapore 5683 4,843 Total OTC lev
Slide 37: Full year analysis — Significant Opportunities
Appendix 4 Full year analysis — Significant Opportunities Revenue (Em) Fy21__FY20 Japan 687 46.6 Emerging Markets 347 28.4 us 11.6 58 Institutional 123 9.2 Total OTC leveraged 127.3 90.0 ETDs - Nadex 19.5 178 ETDs- Spectrum 49 06 Total Significant Opportunities 151.8 108.4 Clients (000) Fy21_ FY20 J
Slide 38: Half year analysis - Core Markets
Appendix 5 Half year analysis - Core Markets Fy21 FY21. = FY20.—sFY20 Revenue (Em) H2 H1 H2 H1 UK 1674 1500 148.0 92.7 EU 53.6 490 547 33.1 EMEA non-£U 28.2 284 32.5 213 Australia 58.1 616 513 36.9 Singapore 384 36.1 35.2 215 Total OTC leveraged 345.7 325.1 321.7 205.5 Stock trading & investments 23
Slide 39: Half year analysis — Significant Opportunities
Appendix 6 Half year analysis — Significant Opportunities Fy21 FY21. = FY20.—sFY20 Revenue (Em) H2 H1 H2 H1 Japan 34.1 346-306 16.0 Emerging Markets 163 18.4 17.2 11.2 us 6.4 5.2 42 1.6 Institutional 65 58 58 34 Total OTC leveraged 63.3 640 578 322 ETDs - Nadex 9.4 10.2 99 78 ETDs- Spectrum 28 24 o7
Slide 40: Quarterly analysis - Core Markets
Appendix 7 Quarterly analysis - Core Markets Fy21 FY21 FY21. FY21 FY20 FY20 FY20 FY20 Revenue (Em) a @ = @ ai a @ = @ UK 815 859 761 739 936 544 458 470 EU 272 264 259 231 378 169 154 177 EMEA non-EU 135 147 139 144 202 123 103 11.0 Australia 252 329 292 324 322 192 171 198 Singapore 199185 168 193
Slide 41: Quarterly analysis — Significant Opportunities
Appendix 8 Quarterly analysis — Significant Opportunities FY21 FY21 FY21 FY21 FY20 FY20 FY20_ FY20 Revenue (£m) Q4 Q3 Q2 Qi Q4 Q3 Q2 Qi Japan 17.3 16.8 18.1 16.5 19.9 10.7 84 76 Emerging Markets 78 85 8.5 99 10.9 6.3 5.3 5.9 US 3.3 3.1 24 28 28 1.3 1.0 06 Institutional 28 37 3.1 27 38 2.0 1.6 18 Tot
Slide 42: Forward-looking statements disclaimer
This presentation, prepared by IG Group Holdings plc (the “Company’), may contain forward-looking statements about the Company and its subsidiaries (the “Group”). Such forward-looking statements can be identified by the use of forward-looking terminology, including the terms "believes", “projects”,