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CORPORATE PRESENTATION - flatex€¦ · B2C - business model of flatex and ViTrade THE FINTECH...
Transcript of CORPORATE PRESENTATION - flatex€¦ · B2C - business model of flatex and ViTrade THE FINTECH...
CORPORATE PRESENTATIONFinTech Group AG | March 2019
Financial Services TechnologiesWe got IT
Operational key figuresand guidance 2019e
Number of
Customers
Number of exchanges
and OTC-partners
Executed
Trades
Executed
Trade Volume
Securities
under Custody
Customer
Cash Deposits
68 6.6 m EUR > 40 bn EUR 12.1 bn EUR 931 m
Operational key figures at a glance*
3THE FINTECH GROUP
Credit Book
(collateralized)
Average Interest Rate
(Loan Book)
TIER-1
Capital
Return on Equity p.a.
(before Tax 2017)
Offices Employees
EUR 195 m 4.5 % p.a. EUR 54.1 m 25 % 9 481
* As of 30.06.2018
Berlin
Zwickau
Willich
Andernach
Frankfurt a.M. (HQ)
Kulmbach
Dusseldorf
Vienna
275 k > 50
B2C B2B
Neuss
4THE FINTECH GROUP
Our guidance 2019e
138 EUR million revenues
27 % EBITDA Margin (post growth investments)(34 % EBITDA Margin / pre growth investments)
22.7
75.2
95.0
107.0
>120.0
>138.0
-8.0
19.7
30.6 32.1
>40.0 > 27%
-7.7 -2.2
12.316.8
>24.0
2016a 2017a 2018e 2019e
Net Sales
EBITDA
Net Profit
5THE FINTECH GROUP
Track record and guidance 2019e
Acquisition of service provider XCOM/biw to control cost structure and set-up tech in-house expertise
Implemented high class management team and subsequent restructuring actions
Sold CeFDex to Commerzbank to reduce risk structure (strategic partnership)
Restructuring of group operations and implementation of IFRS Reporting
Boost of organic growth of existing B2C business
EUR million
Implement technology based lending and redeveloping treasury with the potential to generate an additional EUR 10+ million
Improved B2C product portfolio with Morgan Stanley ETP partnership
Reorganisationof Group structure and new segmentation into Fin and Tech units
Increased investor relations activities
Implementing B2B strategy: the standard banking platform for private and specialist banks
o Continue strong growthof number of settled transactions
o International Expansion –flatex goes Europe
FinTech Group - Executive Committee
6THE FINTECH GROUP
Stephan Simmang Jörn Engelmann Frank Niehage Steffen Jentsch Jens Möbitz Muhamad Chahrour Dr. Benon Janos Niklas Helmreich
Co-Head ITChief Technology Officer
CRO flatex Bank CEO FinTech GroupCEO flatex Bank
Co-Head ITMD flatex Bank
Head Back OfficeMD flatex Bank
CFO FinTech GroupMD flatex Bank
Head B2BMD flatex Bank
Head B2CMD flatex Bank
ALL EXCO MEMBERS ARE PART OF THE FOUR-YEAR OPTION PLAN
Business Model
8THE FINTECH GROUP
Key Issues in Banking
Digitisation increases the pressure on integration of customers and processes:
Despite the support of top management, many companies have not developed an overall strategy yet
Start-ups: New competitors in the market lead to a decomposition of the value chain in banking
Business Analytics is gaining importance in sales: More “soft” customer data (from more sources) exploiting the potential of customer data and more effective customisation of products
Cost structures to the test: The majority of banks are reviewing their cost structure -one focus is IT and possible consolidations
Regulatory: The banking supervision’s (ECB, NFSA) demand on the management of banks are increasing (IT security law, MIFID II, etc.)
Growing market demands affect all banks equally. The developed solutions here in the undifferentiated area will help banks to focus on their core competencies in banking
B2C - business model of flatex and ViTrade
9THE FINTECH GROUP
(c75% REVENUE CONTRIBUTION, c35% EBITDA MARGIN)
Self-developed core banking system (FTG:CBS) with outstanding expertise in transaction banking and fully fledge bank with automatised settlement and clearing processes
Fastest growing online brokerage business in Germany and Austria, >280k retail clients doing >12m transactions with notional amount of >EUR 75bn p.a.
Market share of >25% in Germany and >50% in Austria in terms of online brokerage transactions(total est. # of transactions: 50-55m in Germany, 2-3m in Austria)
Most trading-active client pool in the brokerage market(FinTech clients: avg. 40-50 trades p.a. vs. market: avg. 8-12 trades p.a.)
Dedicated brokerage offering with focused marketing strategy minimises operating expenses (cost per client acquisition EUR 100 vs. EUR 300-500 CPA at competitors)
10THE FINTECH GROUP
flatex impressions
Platform
Unlimited trading possibilities with a flat pricing model of EUR 5.90 per transaction –regardless of type of asset (stocks, bonds, ETPs, ETFs etc.) and transaction amount
Competitive technology edge due to self-developed, highly scalable security ordering/ settlement infrastructure ensures sustainable cost leadership with cost per trade (CPT) of currently EUR 1.44
Top notch product offering including equities, bonds, ETPs, ETFs and mutual funds
Market leading ETP offering of Morgan Stanley, Deutsche Bank, Goldman Sachs, UBS, BNP Paribas, HSBC, Vontobel, and other products
Economies of scale: each additional trade reduces cost per trade settlement –doubling the # of transactions reduces CPT by >40%
Trading platform only – no research, recommendation or intelligence – avoiding regulatory administration and costs
Designed by traders for traders
Product
Price
B2C - our competitive edge: the triple „P“
11THE FINTECH GROUP
Growing Number of Brokerage Customers (thousand)
145.5
176.6
212.0
253.8
284.8
FY 2014 FY 2015 FY 2016 FY 2017 10 2018
Total Number of Trades FTG Bank (million)
7.7
10.110.5
11.3
10.6
12.7
FY 2014 FY 2015 FY 2016 FY 2017 10 2018 FY 2018e
B2C - development of brokerage KPIs
12
THE FINTECH GROUP
So
urc
e: F
inTe
ch G
rou
p
So
urc
e: F
inTe
ch G
rou
p
12 % of the tradesrepresenting customers
who are less thana year with FTG
25 % of the tradesrepresenting customers
who are inbetween1-3 years with FTG
13THE FINTECH GROUP
B2C – maturity profile of our trading customers
63 % of the trades representing customerswho are more thanthree years with FTG
Exchange Traded Funds17%
Exchange Traded Products,FX/Commodities/CFD etc.47%
14THE FINTECH GROUP
B2C – split of total number of trades
Shares and Bonds37%
B2C-case study: Morgan Stanley ETP / 1st market disruption
15THE FINTECH GROUP
BANKS…
Market standard in
the past:
90 : 10split
Partnerships today:
50 : 50split
REVENUE POOL
…TRADED BY CLIENTS
Revenue generation forissuing bank through:
• Inherent interestcomponent
• Bid-ask spread
…OFFERED AT FLATEX……ISSUE ETPs…
German ETP market size notional of around EUR 70bn pa - FinTech Group with >15% distribution stake
In the past: product issuing banks kept 90% of the revenue pool - 10% to product distributor
Already 50,000 flatex-select products issued by Morgan Stanley that clients can trade at no cost
ETP Premium Partner Pricing Model / 2nd market disruption
16THE FINTECH GROUP
B2C-volatility is key driver of transactions and revenues
17THE FINTECH GROUP
Volatility has reawakened after reaching 20-year record low in 2017 with significant upside potential - resulting in two consecutive record months Jan and Feb 2018 (+40% transactions compared to same period 2017) with strong revenue effect
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Trades /
Total # of clients
FinTech Group AG
VDAX
HIGH CORRELATION BETWEEN MARKET VOLATILITY AND CLIENTS’ ACTIVITY WITH STRONG UPSIDE POTENTIAL
Brexitvote
Trump election
Increase in volatility led to record transaction number of >2 million in Jan/Feb 2018 +40% vs. Jan/Feb 2017
Jan/Feb2018
Italian Budget
18THE FINTECH GROUP
flatex goes international
H1 – 2019e
flatex today
First priority
B2B - fully modular self-developed core banking platform
19THE FINTECH GROUP
(c25% REVENUE CONTRIBUTION, c20% EBITDA MARGIN)
APIs
APIs
OADO
Account/Depot Srv.
ProductionPlatform
Regulatory & SteeringPlatform
Support Platform
SalesPlatform
Layers within the FTG:CBS banking platform Technology
HTML
Objektive-c (iOS)
Java (Android)
REST / SOAP
Entax-BO-ClientOnline branch
Mobile App
Securities Payment Service Cards
HA
Wildfly
Java, Go
C++
SAP ASEDeposit Transaction Service Credit Facilitation Master Data
Wildfly
Java
C++
SAP ASE
ABACUSTicketing Service PortalBatchdata
ArchiveShared Services
PostgreSQL
Oracle
ASCII, XLS / SFTP
FIX / EBICS /SWIFT
CRM / Sales Trading FE
InfoZone / WM
Accounting Controlling Tax Compliance
Regulat. Reporting
(Abacus)Mgmt. Reporting DWH / BI Risk / Liq. Mgmt
B2B - shared services: banking processes and platform
20THE FINTECH GROUP
POSITION FINTECH GROUP’S BANKING PLATFORM AS THE STANDARD PLATFORM FOR PRIVATE AND SPECIALIST BANKS
DATA CENTRES ISO 27001
SEPA SWIFT EXCHANGES …
Application Use Cases
API Layer
FinTech Group PlatformSoftware + Banking
FinTech GroupData centre
Financial System Infrastructure
BanksPayment
InstutionsCorporates
API
…
flatexBrokerFintech
Start-ups
API
FinTech Group Bank
Regulatory Umbrella
BPO
B2B - client excerpt and case studies
21THE FINTECH GROUP
Unique combination of technology and banking know-how enables our clients to build top-class financial products and services
Key partner
FinTech Group AG developed,maintains and runs LOX, the ETP OTC system for Deutsche Bank AG and Commerzbank AG - 3bn price feeds and 50k transactions - per day.
FinTech Group Bank AG were chosen by Equatex - one of the leading European stock option plan administrators with >3bn EUR AuC – to provide banking and custody services; opening 250k accounts in 4 weeks.
FinTech Group was chosen to set-up the technological infrastructure for digital online retail banks in Germany and Austria including providing several respective regulatory banking processes
FinTech Group AG is the central IT service provider for the Federal Association of German Banks, providing key technology platform to run the German Deposit Guarantee Scheme.
Notable clients
Investment case
The ecosystem – unique combination of independent business models
23THE FINTECH GROUP
Increaseinteraction with
and offeringto clients
Access to newproducts and
services
Manifest customerrelationship
Reduce costsper unit
GROWTH
B2BCustomer lifetime:
5-10 years
Highly predictable revenue streams
CAPEX driven
B2CHigh margin business
Transaction driven business
Broad customer base
Leverageself-developedinfrastructure
Continuous development of technology and
platform
Increaseprofitability
and cash flow
Annex
25THE FINTECH GROUP
FinTech Group AG - corporate structure
Tech-Entity
Fin-Entity
FTG Finanz GmbH
100%
100%
26THE FINTECH GROUP
FinTech Group AG - key milestones
1988
Company founded in Langen
2001Development and full BPO provider for pan-European expansion (core bank system FTG:CBS:R1 is born)
2006
Best German online broker goes live
Full white label Retail Bank operations begins (full BPO)
L.O.X. OTC certificate platform developed (limit order system connects DB/Coba flow to 22 pan-European brokers)
Migration of mwb fairtrade from caceis to FinTech Group Bank for order routing and securities settlement (1.4 m trades/year)
Large Austrian bank selected FinTech Group as full BPO for Austrian and German digital expansion
1997
Full BPO IT provider for bankenverband ever since
2009
2015
2017
2010
24.4 %
10.5 %
6.5 %
58.6 %
27THE FINTECH GROUP
FinTech Group AG - shareholder structure*)
*) No. of shares outstanding:
18,955,637
Free Float of 58.6 %, therein:
Management of the Group ~ 7%
GFBK (Entity of
flatex founder
Bernd Förtsch)
Shares outstanding: 18,955,637
Options outstanding: max. 1.1m
Market capitalisation: EUR 413m (as at 2019-03-15)
Listed:Open Market / SCALEDeutsche Börse / Frankfurt Stock Exchange
ISIN: DE000FTG1111
Bloomberg: FTK GR Equity
Stock covered by 12
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Jan 2019
PT EUR 28.00 Buy
Commerzbank
Share Price (EUR)
Jan 2019
PT EUR 33.00 Buy
Berenberg
Jan 2019
PT EUR 38.00 Buy
Hauck & Aufhäuser
Jan 2019
PT EUR 37.00 Buy
M.M. Warburg
28THE FINTECH GROUP
FinTech Group AG - our stock
STOCKPRICE DEVELOPMENT LTM
Jörg Peters FinTech Group AG
IR & Press Rotfeder-Ring 7
D-60327 Frankfurt/Main,
Germany
Phone: +49 69 450 00 11 701
Mobile: +49 151 688 47 638
www.fintechgroup.com
Financial Calendar 2019 Contact details
Corporate Events 2019
Jun 27 Annual Report 2018
Aug Annual General Meeting / Frankfurt/Main
Sep 30 Half-Year Interim Report 2019
Investors’ Conferences 2019
Apr 1-3 Raiffeisen Centrobank Investors’ Conference / Zürs (CH)
May 13-15 Equity Forum Spring Conference / Frankfurt/Main
May 21-23 Berenberg US Conference / Tarrytown NY (USA)
Jun 5-7 Goldman Sachs European Financials Conference / Paris (F)
Sep 23-25 Berenberg / Goldman Sachs German Corp. Conf. /Munich