Preliminary Unaudited Results for the year ended 31 December 2018

Transcription

1 PLUS500 PRELIMINARY RESULTS FOR THE TWELVE MONTHS ENDED 31 DECEMBER 2018

2 12 February 2019 Plus500 Limited ( Plus500 r the Cmpany and tgether with its subsidiaries the Grup ) Preliminary Unaudited Results fr the year ended 31 December 2018 Plus500, a leading nline service prvider fr trading Cntracts fr Difference ( CFDs ) internatinally, is pleased t annunce preliminary unaudited results fr the year ended 31 December Financial Highlights: Change Revenues $720.4m $437.2m 65% EBITDA 1 $506.0m $259.2m 95% EBITDA Margin 70.2% 59.3% 18% Net Prfit $379.0m $199.7m 90% Earnings Per Share $3.33 $ % ARPU 2 $2,365 $1,379 72% AUAC 3 $934 $474 97% Cash Generated frm Operatins $495.0m $278.7m 78% Year-end Net Cash $315.3m $241.9m 30% Dividends Per Share ($) Interim Final Special Ttal $ $ $ $ $ $0.635 $ % Dividend Pay-ut Interim Final Ttal $157.0m $70.4m $227.4m $27.2m $164.9m $192.1m 18% Share Buyback Prgrammes executed $2.3m $7.5m (69%) Ttal Returns t Sharehlders $229.7m $199.6m 15% Recrd financial perfrmance: Exceptinal first quarter benefitting in particular frm Cryptcurrency trading; Ttal P&L gain in 2018 f $172 millin (FY 2017: lss f $103 millin); EEA perfrmance impacted by ESMA measures frm 1 August 2018, ffset by $56 millin P&L gain in the furth quarter f 2018; EBITDA margin increased t an exceptinal 70.2%, reflecting the recrd revenue and peratinal leverage (FY 2017: 59.3%); 1 EBITDA - Earnings befre Interest, Taxes, Depreciatin and Amrtisatin 2 ARPU - Average Revenue Per Active User 3 AUAC - Average New User Acquisitin Cst 2

3 Strng financial psitin: Debt-free balance sheet and high cash cnversin rati 4 (98%); Significant returns t sharehlders during the perid: Recmmended final dividend f $ per share (final dividend 2017: $ per share); Including the final dividend, a ttal f $229.7 millin (2017: $199.6 millin) is being returned t sharehlders, cnsisting f dividends f $227.4 millin and an initial $2.3 millin f a $10 millin share buyback prgramme in the perid; The Cmpany remains highly cash-generative and maintains its cre 60% dividend pay-ut rati, in line with its dividend plicy, with interim and final dividends split in accrdance with half yearly prfits; The Bard will cntinue t assess the availability f any excess capital and priritise its use, as it has always dne, between value-adding investment, grwth pprtunities and additinal returns t sharehlders. Operating Highlights: Strng prgress and trading activity: Ttal number f transactins in 2018 increased by 6% year n year; Mre than 3 millin transactins per mnth n average; Mre than $1.3 billin in custmer depsits, reflecting strng trust in the Plus500 brand; Cntinued expansin f glbal presence and diversificatin f revenues utside the EEA: Australian dmiciled revenues increased apprximately fur times year-n-year and represented 12% f Grup revenue in 2018; Launched peratins in Singapre; Leading industry psitins imprved: The largest CFD prvider in the UK 5, Spain and Germany 6 ; Best rated mbile platfrm amng CFD traders in Australia 7 ; Leadership in technlgy and prduct innvatin: ver 77% f revenues frm mbile devices; maintained psitin as the highest rated industry app by custmers in bth Apple s AppStre and Ggle s Play Stre; Mve up t the Main Market f the Lndn Stck Exchange cmpleted n 26 June 2018; jined the FTSE250 in September Regulatin: The Grup s technlgy edge enabled it t cmply quickly and efficiently with recent regulatry changes, including MiFID II, GDPR and ESMA interventin measures; Nn-EEA cuntries represented apprximately 33% f the Grup s FY 2018 revenues and 40% f H revenues; 4 Cash generated frm peratins / EBITDA 5 By ttal number f client relatinships, Investment Trends UK Leverage Trading Reprt By ttal number f client relatinships, Investment Trends 2018 Germany & Spain CFD & FX Reprts 7 By wn client rating, Investment Trends AU CFD Reprt,

4 Elective Prfessinal Client ("EPC") categrisatin requests in FY 2018: Current Trading: 16,475 custmers applied fr EPC categrisatin; 7,229 custmers (44% f the custmers wh applied fr EPC), were apprved; Revenue frm EPCs in 2018 represented apprximately 29% f the Grup s annual EEA revenues, and 61% in H2 2018; The EPC categrisatin request, cnsideratin and apprval prcess is prgressing bradly in line with the Grup s expectatins has started with psitive peratinal KPIs. New Custmer 8 and Active Custmer 9 numbers and the number f new trades pened are ahead f the end f 2018; Fllwing ur latest assessment f the impact f the ESMA regulatry measures, FY19 revenue is expected t be lwer than current market expectatins. This, cmbined with ur intentin t maintain ur marketing spend, is likely t result in 2019 prfit being materially lwer than current market expectatins; Wrk is nging t extend the glbal ftprint and t cntinue t diversify revenues thrugh grwth in current territries and the additin f new perating licences. Asaf Elimelech, Chief Executive f Plus500, cmmented: We are pleased t reprt a year f recrd numbers and perfrmance, well ahead f ur riginal expectatins. These results demnstrate bth ur strng peratinal perfrmance and differentiatin frm ur industry peers. Our fcus n innvatin and technlgy leadership cntinues t deliver benefits, thrugh the acquisitin f New Custmers and the cntinued activity and increasing lyalty f existing nes, evident in the cntinued dwnward trend in custmer churn. It was a mmentus year as we successfully cmpleted ur mve up t the premium listing segment f the Official List and t trading n the Lndn Stck Exchange s Main Market fr Listed Cmpanies, with the subsequent inclusin in the FTSE250 barely five years since ur successful AIM IPO. This listing is already increasing interest in Plus500 and we expect it t further imprve the trust and cnfidence f investrs. The year was als ntable fr the intrductin f regulatry measures by the Eurpean Securities and Markets Authrity ( ESMA ) in August Althugh we have seen a marked reductin in Grup revenue directly attributable t this, we welcmed the new regulatry framewrk, as it is aimed at ensuring a level playing field acrss industry prviders and increased transparency and fairer utcmes fr custmers. This creates a backdrp against which we expect Plus500 t excel ver the medium t lnger term. Our perating licences in the United Kingdm, Australia, Cyprus, New Zealand, Israel, Suth Africa and Singapre, prvide a strng fundatin in this new envirnment and the benefits f a diversified revenue stream. In summary, ur highly flexible business mdel, industry leading scale and market share, technlgy edge, lean cst structure and rbust financial psitin will help mitigate the impact f regulatry measures and ensure the delivery f sustained market leading financial perfrmance. We are therefre cnfident that we can cntinue t successfully develp ur business and expand int new markets, enabling us t cntinue prviding strng sharehlder returns. 8 Custmers depsiting fr the first time during the perid 9 Custmers wh made at least ne real mney trade during the perid 4

5 The infrmatin cntained within this annuncement is deemed by the Cmpany t cnstitute inside infrmatin as stipulated under the Market Abuse Regulatin ("MAR"). Upn the publicatin f this annuncement via Regulatry Infrmatin Service ("RIS"), this inside infrmatin is nw cnsidered t be in the public dmain. Plus500 will hst an analyst presentatin at 9.30 a.m. tday at the ffices f Liberum, 25 Rpemaker St, Lndn, EC2Y 9LY. There is an audi cnference call fr thse wh wuld like t dial in: Tll number +44 (0) Tll-free number Participant PIN # Enquiries Plus500 Elad Even-Chen, Chief Financial Officer Kieran McKinney, Investr Relatins ir@plus500.cm MHP Cmmunicatins Reg Hare, Kelsey Traynr, Peter Lambie Plus500@mhpc.cm Frward lking statements This annuncement cntains statements that are r may be frward-lking statements. All statements ther than statements f histrical facts included in this annuncement may be frward-lking statements, including statements that relate t the Cmpany's future prspects, develpments and strategies. The Cmpany des nt accept any respnsibility fr the accuracy r cmpleteness f any infrmatin reprted by the press r ther media, nr the fairness r apprpriateness f any frecasts, views r pinins express by the press r ther media regarding the Grup. The Cmpany makes n representatin as t the apprpriateness, accuracy, cmpleteness r reliability f any such infrmatin r publicatin. Frward-lking statements are identified by their use f terms and phrases such as believe, targets, expects, aim, anticipate, prjects, wuld, culd, envisage, estimate, intend, may, plan, will r the negative f thse, variatins r cmparable expressins, including references t assumptins. The frward lking statements in this annuncement are based n current expectatins and are subject t knwn and unknwn risks and uncertainties that culd cause actual results, perfrmance and achievements t differ materially frm any results, perfrmance r achievements expressed r implied by such frward-lking statements. Factrs that may cause actual results t differ materially frm thse expressed r implied by such frward lking statements include, but are nt limited t, thse described in the risk factrs. These frward-lking statements are based n numerus assumptins regarding the present and future business strategies f such entity and the envirnment in which each will perate in the future. All subsequent ral r written frwardlking statements attributed t the Cmpany r any persns acting n its behalf are expressly qualified in their entirety by the cautinary statement abve. 5

6 Each frward-lking statement speaks nly as at the date f this annuncement. Except as required by law, regulatry requirement, the Listing Rules and the Disclsure Guidance and Transparency Rules, neither the Cmpany nr any ther party intends t update r revise these frward-lking statements, whether as a result f new infrmatin, future events r therwise. Abut Plus500 Plus500 perates an nline trading platfrm fr custmers t trade CFDs internatinally ver mre than 2,200 different underlying glbal financial instruments cmprising equities, indices, cmmdities, ptins, ETFs, cryptcurrencies and freign exchange. Custmers f Plus500 can trade CFDs in mre than 50 cuntries and in 32 languages. The trading platfrm is als accessible frm multiple perating systems (Windws, ios, Andrid and Surface) and web brwsers. Plus500 retains perating licences and is regulated in the United Kingdm, Australia, Cyprus, New Zealand, Israel, Suth Africa and Singapre. Custmer care is integral t Plus500: custmers cannt be subject t negative balances and there are n cmmissins n trades. Plus500 des nt utilise cld calling techniques and des nt ffer binary ptins. A free dem accunt is available n an unlimited basis fr platfrm users and sphisticated risk management tls are prvided free f charge t manage leverage and stp lsses t help custmers prtect prfits and limit capital lsses. 6

7 Business Update Overview The Grup delivered recrd revenue and prfitability in the year. Revenue was ahead f the prir year by 65%, at $720.4 millin (2017: $437.2 millin) and EBITDA was up 95% at $506.0 millin (2017: $259.2 millin) included an exceptinal first quarter (revenue: $297.3 millin), fllwing the recrd custmer acquisitin at the end f 2017, which was enabled by the cnsiderable investment in back-ffice technlgy, prcedures and regulatry cmpliance. The secnd half f 2018 was subject t a cmbinatin f extreme variatins in market vlatility and weak custmer trading perfrmance. In additin, retail custmer revenue in the EEA regin was significantly impacted by the ESMA regulatry measures. The ttal number f transactins in 2018 increased by 6% cmpared t the prir year. The number f Active Custmers was nly slightly dwn n the previus year, but ARPU was significantly higher, reflecting the reversal f the 2017 market P&L and the targeting and nbarding f higher value custmers. During the year, we were als pleased t be rated as the number ne CFD brker in the UK, 10 Germany and Spain mnths t 31 Dec* % % Full Year Full Year Grwth Grwth * 2017 Revenues $154.8m $132.3m 17% $720.4m $437.2m 65% Number f New Custmers 19, ,573 (87%) 134, ,946 (46)% Number f Active Custmers 101, ,864 (55%) 304, ,175 (4)% ARPU $1,523 $ % $2,365 $1,379 72% AUAC $1,489 $ % $934 $474 97% * Unaudited During 2018, Plus500 recruited 134,237 New Custmers (FY 2017: 246,946), cntinuing t utperfrm and lead the industry in terms f custmer recruitment and level f activity. The first half f the year was marked by very high custmer recruitment, cntinuing the mmentum f late 2017, nce again prving the quality f the Cmpany s marketing and peratinal capabilities. During the secnd half f the year, which cincided with the intrductin f the ESMA measures, new custmer recruitment settled at arund 7,000 per mnth; this remained sensitive in specific mnths t the level f vlatility in financial markets and brader ecnmic news flw. Active Custmers numbers were dwn slightly at 304,616, fllwing the recrd year in 2017, at 317,175, which itself was mre than duble The Cmpany reacted and adjusted rapidly t the heightened level f interest in cryptcurrencies in the furth quarter f 2017 and the first quarter f 2018, which led t recrd custmer recruitment, subsequently cnverting int Active Custmers. Cryptcurrencies were less influential as 2018 prgressed, accunting fr nly 9% f the Grup s ttal revenues fr the secnd half (H2 2017: 16%). Ttal custmer depsits in the year were up by 10 By ttal number f Relatinships, Investment Trends 2018 UK Leverage Trading Reprt. 11 By ttal number f client relatinships. Investment Trends 2018 Germany & Spain CFD & FX Reprts. 7

8 arund 28%, at ver $1.3 billin, and the 10 highest value custmers in the year generated 2% f the 2018 revenues f the Grup. The Cmpany cntinued t invest in enhancing the verall user experience, bth within the frnt-end trading platfrm and the back-ffice supprt envirnment, t imprve custmer satisfactin and retentin. 73% f the Grup s revenues in 2018 derived frm custmers wh have traded fr mre than ne year, cmpared t nly 53% in the prir year, reflecting sme early success frm an imprtant custmer retentin initiative acrss the Grup. This increase in custmer tenure is als evidenced in the percentage f custmers wh have traded fr mre than five years increasing frm 2% in 2016 t 5% in 2017 and 8% in Imprtantly, 89% f the Grup s elective prfessinal clients have traded fr mre than ne year, and 13% f the elective prfessinals have been trading with the Cmpany fr mre than five years. ARPU reached a recrd high f $2,365 in 2018, against $1,379 fr 2017 and $2,103 in The fall in 2017 was mainly due t the impact f the exceptinally high New Custmer flw in the final quarter, with these New Custmers nly able t trade fr a shrt perid, and psitive custmer trading perfrmance, diluting ARPU fr the year. ARPU held up well in the secnd half f 2018, at $1,785 (H2 2017: $944), despite the leverage restrictins implemented within the EEA regin and the lw levels f market vlatility in the third quarter. The Grup s initiatives t reduce churn cntinue t deliver psitive results; annual churn has fallen significantly ver the last three years (frm 62% in 2016 t 46% in 2018), and a further reductin in Q bdes well fr Imprtantly, churn amngst high value custmers has als fallen materially. AUAC rse thrugh the middle f the year against a quieter market backdrp, befre falling again in the furth quarter. While the ESMA measures have cnstrained the trading activity f retail custmers within the EEA regin, the Cmpany cntinues t believe that average lifetime values f New Custmers will be maintained at attractive levels and will justify the investment required t acquire them. Plus500 cntinues t expect AUAC t rise gently ver time, as it attracts and retains bth higher value retail custmers and thse wh qualify fr and elect fr a prfessinal status. Mve up t Main Market On 26 June 2018, Plus500 cmpleted its admissin t the premium listing segment f the Official List and t trading n the Lndn Stck Exchange's Main Market fr Listed Cmpanies. This was just under five years since the Cmpany s successful AIM IPO and the Cmpany believes it is prviding liquidity benefits and therefre access t a wider pl f investrs. Plus500 was subsequently added t the FTSE250 index in September Operatinal Review In rder t cntinue t grw, it is essential t recruit and retain high quality custmers in new and existing territries. The Grup therefre cntinues t invest in bradening and enhancing its brand awareness and diversifying its custmer base internatinally, bth inside and utside the EEA. The Grup is currently explring a number f pprtunities t further extend its market reach t new territries, which the Bard expects t be a majr driver f the Grup s future grwth and the further diversificatin f revenues. The trading platfrm cntinues t be diversified acrss an increasing range f financial instruments, in-line with custmer trading interest. During 2018 varius instrument categries were in the headlines and the Cmpany adjusted its ffering accrdingly with relatively ease thanks t its innvative technlgy. Our successful partnerships as fficial main spnsrs f Club Atlétic de Madrid and the Plus500 Brumbies cntinued t attract interest and raise ur brand awareness wrldwide. 8

9 During the year, the Cmpany cntinued t recruit new staff t maintain its psitin as an industry leader. Mr. Ari Shtland jined as the Grup's Chief Technlgy Officer, having mst recently held the psitin f Senir Staff Sftware Engineer and Tech Lead Manager at Ggle Israel. This appintment reflected the imprtance that the Grup places n its in-huse prprietary technlgy and internal technical expertise, which the Bard believes represents a significant cmpetitive advantage. Cntinuus Develpment The adptin f the Grup's mbile ffering (including tablet) cntinued t grw and mbile nw represents 77% f the Grup's ttal revenues (FY 2017: 75%), with 73% f all custmer trades executed n a mbile device. During the year, the Cmpany als imprved the scalability f the trading platfrm and its capacity t deal with sudden surges in demand and a grwing number f custmers and simultaneus transactins. The Cmpany invested in imprving the level and quality f custmer supprt, particularly in the live chat facility, extending native language supprt t the 16 languages mst in-demand by its custmers. Overall the trading platfrm is nw available in 32 languages in 50 cuntries. In additin, Plus500 further imprved its withdrawal and depsit prcesses including shrtening its prcessing times, ensuring rapid platfrm availability fr custmer trading is ptimised. Risk Management Framewrk Plus500 s target audience is exclusively individual custmers and the platfrm is nt available t institutinal r crprate traders. As a result, Plus500 des nt have a dependency n a small number f very large custmers the largest custmer in 2018 cntributed nly 0.36% f ttal Grup revenue. Plus500 ffers its custmers sphisticated risk management tls t manage their trading psitins and all f its custmers, including EPCs, cannt lse mre than their accunt balance at n additinal cst this has been true since the frmatin f the Cmpany and has been a key cmmercial and cultural advantage ver the years. Additinally, the Cmpany s risk management framewrk ensures that risk expsures are strictly limited, resulting in cnsistent revenue generatin with relatively lw vlatility. The Cmpany emplys a cmbinatin f real-time mnitring technlgy, predefined limits and internal ffsetting techniques acrss its hundreds f thusands f custmers t ensure risk is effectively managed. Plus500 mnitrs trading levels and expsure limits (by custmer, instrument and as a ttal), with the ability t cap trades r, in extremis, t hedge nce pre-agreed limits are reached. Credit risk is limited by having all custmers pre-fund their accunt and ffering a margin clse-ut plicy t minimise unfunded custmer lsses. In additin, Plus500 des nt ffer CFDs in less liquid and less ppular instruments, such as small cap stcks. The wrst and best daily financial perfrmance in 2018 were a lss f $2.0 millin and prfit f $19.4 millin, respectively. In 2018, 92% f the days were prfitable. The average daily revenue in 2018 was just under $2 millin. Althugh custmer trading perfrmance fluctuates ver the shrt term and can fluctuate frm year t year, ver a lnger timeframe it has tended t be bradly neutral. Over the past five years, Plus500 has earned the vast majrity f its revenues frm trading spreads and vernight charges. Regulatin Plus500 challenges itself t be the best in all aspects f the CFD industry. In particular, the Cmpany is prud f the strides it has made in enhancing its regulatry cmpliance prcedures and embedding a cmpliance culture within its glbal business. 9

10 The Grup cntinued t invest in its regulatry and cmpliance peratins during the year. Plus500 perates in a highly regulated industry, which requires a fcus n best practice and maintaining an pen dialgue with regulatrs. During the year, a number f regulatry changes entered int frce, as a result f MIFID II, GDPR and ESMA measures. Plus500 implemented these required changes, enabled by its technlgical edge. The Bard believes the Cmpany is well prepared fr the varius UK Brexit scenaris, given its separate EU licence in Cyprus, thrugh which it can perate in ther Eurpean jurisdictins in line with applicable regulatry requirements. Implementatin f ESMA Measures The year prved t be a significant ne in terms f clarifying the regulatry regime in the EEA. During the year, ESMA cnfirmed and then implemented n 1 August 2018 a set f measures aimed at raising standards acrss the retail CFD trading industry. The measures are currently being renewed n a rlling three-mnth basis, with the expectatin that they will be permanently established in law in each f the EU member states in due curse. In December 2018, the FCA in the UK launched a cnsultatin t d just this, at the same time intending t restrict new prducts, such as turbs, where it believes these have been created in rder t avid the restrictins. Plus500 welcmed the clarity prvided by this interventin and its intentin t prtect and imprve custmer utcmes. The Cmpany believes it will enhance the reputatin f the industry, allwing rbustly managed, cmpliant prviders such as Plus500 t generate sustainable grwth built n delivering the best custmer experience. The main elements f the ESMA measures were all implemented by Plus500 either n, r in advance f, 1 August 2018: Leverage limits n the pening f a psitin by a retail custmer Negative balance prtectin n a per accunt basis A margin clse-ut rule n a per accunt basis A ban n the prvisin f binary ptins A restrictin n the incentives ffered t retail custmers t trade CFDs A standardised risk warning The Cmpany implemented these measures rapidly and relatively easily, due in part t the fact that it has always prvided margin clse-ut and negative balance prtectin t all f its custmers, and has never ffered binary ptins. Plus500 has als chsen nt t change the nature f its prducts r t create new prducts in rder t avid restrictins. Elective Prfessinal Clients (EPCs) During the year, the Cmpany began prviding a prcess t allw qualifying custmers, upn their request, t change their regulatry status t a new categrisatin as an EPC, in line with MiFID rules. Subsequently, at the end f 2018, 16,475 custmers had applied t becme EPCs, f which apprximately 44%, 7,229 custmers, were apprved. Revenues frm this custmer chrt represented apprximately 29% f annual 2018 revenues within the EEA and 61% in the secnd half f the year. The categrisatin request, cnsideratin and apprval prcess is prgressing bradly in line with the Grup's expectatins. New Licences Fr the future, part f the Cmpany s grwth strategy is t cntinue t seek additinal regulatry apprvals in jurisdictins that represent attractive cmmercial pprtunities and where it can take advantage f its already well recgnised brand. This will enable it t further diversify its gegraphical spread f revenues, while cntinuing t take market share in its already established markets. 10

11 New Nminatin Cmmittee Chair The Cmpany is pleased t annunce the appintment f Mr. Steven Baldwin, a Nn-Executive Directr f the Cmpany, as Chair f the Cmpany s Nminatin Cmmittee. Mr. Daniel King, wh chaired the Nminatin Cmmittee t date, will cntinue t serve as a member f the cmmittee. Research and Develpment Research & Develpment remains a pririty fr the Cmpany, as it is imperative t maintain its cmpetitive advantage and t drive new prducts and platfrm enhancements. The fact that the trading platfrm has been develped in-huse and is based n prprietary technlgy that des nt rely n third party sftware suppliers, and is supprted slely by its internal technical expertise, prvides Plus500 with a clear cmpetitive advantage. This structure cntributed t the smth implementatin f ESMA s new measures, the flw f EPCs, and expedited reactive prduct develpment when particular asset categries became mre ppular. Plus500 remains the industry leader in mbile and retains the highest rated app in its sectr in bth Apple s AppStre and Ggle s Play Stre. This will cntinue t be an area f cncentratin, as the Cmpany seeks t prtect this imprtant advantage. The Cmpany is als cnstantly wrking n further develpments, which are expected t reduce churn and enhance custmer value; this is increasingly imprtant as regulatin changes the industry. Financial Review The Grup delivered recrd revenue and prfitability in the year. Revenue was up by 65% t $720.4 millin (FY 2017: $437.2 millin), with grwth acrss all key gegraphies. This step-change in the Cmpany s financial perfrmance, included an exceptinal first quarter (revenue: $297.3 millin, mre than triple Q1 2017), fllwing the recrd custmer acquisitin at the end f Custmer trading perfrmance, while histrically neutral ver the medium t lnger term, fluctuates frm year t year. The significantly psitive custmer trading perfrmance in the furth quarter f 2017, which negatively impacted Grup revenue, was reversed in the first quarter f 2018 and was als particularly strng in the final quarter. The ttal P&L gain in 2018 was $172 millin (FY 2017: lss f $103 millin), f which $56 millin came in the furth quarter f In the first half, revenue was 147% ahead f the same perid in the prir year. The Cmpany als delivered a slid secnd half, 2.5% ahead f the prir year. 33% f the Grup s FY 2018 revenue was delivered utside the EEA, up frm 28% in 2017, evidence f the Cmpany s mve t further diversify its revenue base. Within the EEA, 61% f the secnd half revenues came frm prfessinal custmers, wh made up 5% f Active Custmers in the perid. The Cmpany delivered a significant increase f 95% in EBITDA t $506.0 millin in 2018 (FY 2017: $259.2 millin), with EBITDA margins increasing frm 59.3% in 2017 t an exceptinal 70.2% in Net prfit fr 2018 increased 90% t $379.0 millin (FY 2017: $199.7 millin). Earnings per share were $3.33 (FY 2017: $1.75). The Cmpany cntinued t keep csts under cntrl. Nn-marketing csts were up by 45%, relative t Grup revenue up by 65%. Revenue t cst ratis remained well ahead f the cmpetitr set. Plus500 cntinued t invest in disciplined marketing, with spend up by 7% t $125.4 millin. SG&A expenses increased by 20% t $215.1 millin (FY 2017: $178.7 millin), with the majrity, (68%) represented by advertising and marketing csts and prcessing csts. The balance (32%) f csts als included: payrll and related expenses, variable bnuses and share appreciatin rights and ne-ff csts fr legal, prfessinal and regulatry fees relating t the mve t the Main Market. 11

12 In 2018, the Cmpany s financial expenses amunted t a net $2.3 millin (FY 2017: financial expenses, net $5.1 millin), the majrity arising frm freign exchange and translatin differences. A significant prprtin f the Cmpany s cash is held in US dllars in rder t prvide a natural hedge t reduce the impact f currency mvements n financial expenses. Plus500 s ttal assets in FY 2018 were $332.9 millin, an increase f 23% frm $271.6 millin in FY 2017; equity was $280.7 millin (FY 2017: $225.9 millin), representing apprximately 84% f the ttal sharehlders equity and liabilities n the balance sheet. Plus500 s business mdel cntinues t be extremely cash-generative, with 98% cnversin f perating prfit t cash flw (FY 2017: 108%). Depsits are cllected in advance frm custmers and these depsits and the utcme f the custmers trading activity is immediately reflected in their regulated segregated accunts. Earnings frm these custmer trades are recgnised in cash n the Cmpany s balance sheet as custmers trading activity ccurs and amunts are transferred frm r t the Cmpany s accunts. In additin, the Cmpany requires relatively lw levels f capital expenditure. The cmbinatin f these features means that a high prprtin f net incme is rapidly cnverted int cash. In 2018 the Cmpany generated $495.0 millin f cash frm peratins (FY 2017: $278.7 millin), resulting in cash and cash equivalent balances f $315.3 millin at 31 December 2018 (FY 2017: $241.9 millin). Cash balances increased t $315.3 millin (FY 2017: $241.9 millin), despite the Cmpany's dividend distributin (amunting t the payment f $321.9 millin in 2018 cmpared t $102.3 millin in 2017). All amunts stated exclude client funds which are held in dedicated and segregated accunts with tier ne banks, and are subject t annual audit and certificatin in line with best practices. Ttal custmer depsits in the year were up arund 29% at ver $1.3 billin, with the grwth reflecting the increased average number f custmers. Nte: The cnslidated financial statements are presented in US dllars, which is the Cmpany s functinal and presentatin currency. Freign currency transactins and balances in currencies different frm the US dllar are translated int the US dllar using the exchange rates prevailing n the dates f the transactins r at the balance sheet date. Sharehlders Returns The Bard cntinues t cnsider the Grup s dividend plicy annually, including the ptimal balance between allcating surplus funds t the payment f rdinary and special dividends r share buybacks. The Cmpany's plicy is t pay ut at least 60% f retained prfits in each financial year as dividends t sharehlders, including by way f share buybacks. The Bard has undertaken buybacks in the past and has the pwer t implement them at shrt ntice. It will cntinue t cnsider buybacks, taking int accunt market cnditins, share price, trading vlume and ther factrs. In Octber 2018 the Bard apprved a prgramme t buy back an initial amunt f $10 millin f the Cmpany s Ordinary Shares in accrdance with the authrity granted at the Cmpany s AGM. Subsequently, the Cmpany bught back 130,963 Ordinary Shares, r 0.1% f the capital f the Cmpany, between 5 Nvember and 17 December 2018, fr an aggregate purchase price f $2.3 millin at an average share price f The Cmpany has since purchased a further 95,000 Ordinary Shares in accrdance with this prgramme during January 2019, fr an aggregate purchase price f $1.8 millin, and at an average share price f The Bard is pleased t declare a final dividend fr the year ended 31 December 2018 f $ per share (final dividend 2017: $ per share), with an ex-dividend date f 21 February 2019, a recrd date f 22 February 2019 and a payment date f 9 July This makes a ttal dividend fr the year f $ per share (ttal dividend fr 2017: $ per share) an increase f 18% frm previus year. 12

13 The resulting ttal distributin t sharehlders fr the full year amunts t a pay-ut f $229.7 millin (FY 2017: $199.6 millin) r 60% f net prfit fr the year, in line with the Cmpany s stated dividend plicy, with the interim and final dividends split in accrdance with half yearly prfits. The Cmpany remains highly cash-generative and maintains its cre 60% dividend pay-ut rati. Beynd this, the Bard will cntinue t assess the availability f any excess capital and priritise its use, as it has always dne, between value-adding investment and grwth pprtunities and additinal returns t sharehlders. Outlk Plus500 is well psitined t capitalise n the significant glbal market pprtunity in the financial trading industry, building n its success t date. The Cmpany cntinues t wrk n a number f initiatives in rder t attract and retain higher value custmers. The Cmpany s success t date has been built partly n its technlgical leadership and its unified mni-channel trading platfrm, alng with its ppular and intuitive mbile ffering. Ten years n frm its frmatin, Plus500 s technlgy edge remains a significant cmpetitive advantage. The platfrm has evlved ver the years, while retaining the ease f use that has attracted the vast majrity f custmers. The entirely prprietary infrastructure means that enhancements can be designed, tested and implemented very rapidly. Future upgrades t the platfrm are planned and will cntinue t enhance the verall custmer experience and imprve custmer satisfactin and retentin. Over the last few years, the Grup has sught t braden and de-risk its peratins and its gegraphic revenues by successfully acquiring licences in additinal cuntries, including Australia, Cyprus, Israel, New Zealand, Singapre and Suth Africa. Plus500 is cntinuing t pursue pprtunities t expand its ftprint and is actively wrking n gaining additinal licences which will further diversify its revenue and prvide significant pprtunities fr grwth. With the recent regulatry changes designed t raise standards acrss the industry, Plus500 believes these changes create bth a barrier t entry and a disincentive fr sme current players. This may prduce pprtunities fr cnslidatin within the industry. Plus500 is well placed t take advantage f, and create value frm, pprtunities if they arise. The Grup has nw fully adjusted t the new industry regulatins. New custmer flw remains at levels well abve all majr cmpetitrs in the industry; ARPU is grwing as a result f the targeting f higher value custmers; the prprtin f EEA regin revenue frm Elective Prfessinal Clients cntinues t grw; custmer retentin metrics are imprving and custmer tenure is increasing, supprting lifetime values; the prprtin f Grup revenue frm utside the EEA regin cntinues t rise as the Grup makes gd prgress in Australia, Singapre and beynd, and the Cmpany is seeking t expand its glbal ftprint t further diversify its revenue base. Fllwing ur latest assessment f the ESMA regulatry measures f August 2018, 2019 revenues are nw expected t be lwer than current market expectatins. Hwever, we have seen psitive peratinal metrics since the start f this year, with New and Active Custmer numbers and trading vlumes currently abve the levels seen at the end f The lnger-term impact f the ESMA measures is being partially mitigated by increased depsit levels acrss this custmer segment and falling churn rates. Given the encuraging peratinal start t the year and the significant market pprtunity, the Grup intends t maintain its nging marketing investment. This, cmbined with the anticipated lwer revenue, is likely t result in 2019 prfit being materially lwer than current market expectatins. Underpinned by technlgy, and given its scale, its culture f cmpliance and its cmmitment t utstanding custmer service, Plus500 is set t benefit ver the medium t lng term frm the stricter regulatry versight, and t generate grwing and increasingly sustainable returns ver time. 13

14 Plus500 LTD. CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (UNAUDITED) Year ended 31 December U.S. dllars in millins TRADING INCOME Selling and marketing expenses Administrative and general expenses OPERATING PROFIT Financial incme Financial expenses FINANCIAL EXPENSE - NET (2.3) (5.1) PROFIT BEFORE INCOME TAX INCOME TAX EXPENSE PROFIT AND COMPREHENSIVE INCOME FOR THE YEAR In U.S. dllars EARNINGS PER SHARE (basic and diluted)

15 Plus500 LTD. CONDENSED CONSOLIDATED FINANCIAL POSITION (UNAUDITED) As f 31 December U.S. dllars in millins ASSETS Nn-current assets Prperty, plant and equipment Intangible assets Deferred incme taxes Lng term restricted depsit Ttal nn-current assets Current assets Incme tax receivable Other receivables Restricted depsit Shrt-term bank depsit Cash and cash equivalents Ttal current assets TOTAL ASSETS LIABILITIES Nn-current liabilities Share-based cmpensatin Ttal nn-current liabilities Current liabilities Share-based cmpensatin Incme tax payable Other payables Service suppliers Trade payables due t clients Ttal current liabilities TOTAL LIABILITIES EQUITY: Ordinary shares Share premium Cst f Cmpany's shares held by the Cmpany (9.8) (7.5) Retained earnings Ttal equity TOTAL LIABILITIES AND EQUITY

16 Plus500 LTD. CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY (UNAUDITED) Ordinary Share Cst f Cmpany's shares held by Retained shares premium the Cmpany Earnings Ttal U.S. dllars in millins BALANCE AT 1 JANUARY (7.5) CHANGES DURING THE YEAR ENDED 31 DECEMBER 2018 Prfit and cmprehensive incme fr the year TRANSACTION WITH SHAREHOLDERS: Dividend (321.9) (321.9) Acquisitin f treasury shares (2.3) (2.3) BALANCE AT 31 DECEMBER (9.8) BALANCE AT 1 JANUARY CHANGES DURING THE YEAR ENDED 31 DECEMBER 2017 Prfit and cmprehensive incme fr the year TRANSACTION WITH SHAREHOLDERS: Dividend (102.3) (102.3) Acquisitin f treasury shares (7.5) (7.5) BALANCE AT 31 DECEMBER (7.5)

17 Plus500 LTD. CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) Year ended 31 December U.S. dllars in millins OPERATING ACTIVITIES: Cash generated frm peratins (see Nte 6) Incme tax paid, net (98.4) (66.5) Interest received (paid), net 3.8 (0.2) Net cash flws prvided by perating activities INVESTING ACTIVITIES: Repayment (Purchase) f depsits 0.2 (0.2) Purchase f restricted depsits (0.3) (0.2) Purchase f prperty, plant and equipment (0.6) (0.6) Net cash flws used in investing activities (0.7) (1.0) CASH FLOWS USED IN FINANCING ACTIVITIES: Dividend paid t equity hlders f the Cmpany (321.9) (102.3) Acquisitin f the Cmpany's shares by the Cmpany (2.3) (7.5) Net cash flws used in financing activities (324.2) (109.8) INCREASE IN CASH AND CASH EQUIVALENTS BALANCE OF CASH AND CASH EQUIVALENTS AT BEGINNING OF THE YEAR Gains (Lsses) frm exchange differences n cash and cash equivalents (2.1) 4.2 BALANCE OF CASH AND CASH EQUIVALENTS AT END OF THE YEAR

18 Plus500 Ltd. NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) NOTE 1 - GENERAL INFORMATION Infrmatin n activities f Plus500 Ltd and its subsidiaries Plus500 Ltd. (hereafter the Cmpany) and its subsidiaries (hereafter the Grup) has develped and perates an nline and mbile trading platfrm within the CFD sectr enabling its internatinal custmer base f individual custmers t trade CFDs n ver 2,200 underlying financial instruments internatinally. The Grup currently ffers CFDs referenced t equities, indices, cmmdities, ptins, ETFs, cryptcurrencies and freign exchange. The Grup s ffering is available internatinally with a significant market presence in the UK, Australia, the EEA and the Middle East and has custmers lcated in mre than 50 cuntries. The Grup perates thrugh perating subsidiaries regulated by the FCA (Financial Cnduct Authrity) in the UK, ASIC (Australian Securities and Investments Cmmissin) in Australia, the CySEC (Cyprus Securities and Exchange Cmmissin) in Cyprus, the ISA (Israeli Securities Authrity) in Israel, the FMA (Financial Market Authrity) in New Zealand, the FSCA (Financial Sectr Cnduct Authrity) in Suth Africa and the MAS and Enterprise (Mnetary Authrity f Singapre) in Singapre. The Cmpany als have a subsidiary in Bulgaria which prvides peratinal services t the Grup. On 24 July 2013, the Cmpany's shares were admitted t trading n AIM market f the Lndn Stck Exchange in the Cmpany's initial public ffering ("IPO"). On 26 June 2018, the Cmpany's shares were admitted t the premium listing segment f the Official List f the UK Listing Authrities (the "fficial list") and t trading n the Lndn Stck Exchange PLC's Main Market fr listed securities and trading f the Cmpany's shares n the AIM market f Lndn Stck Exchange PLC were cancelled. The Grup is engaged in ne perating segment - CFD trading. The address f the Cmpany's principal ffices is Building 25, Matam, Haifa , Israel. NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES: a. Basis f accunting and accunting plicies The Grup's financial infrmatin as f 31 December 2018 and 2017 and fr each f the tw years fr the perid ended n 31 December 2018 are in cmpliance with Internatinal Financial Reprting Standards that cnsist f standards and interpretatins issued by the Internatinal Accunting Standard Bard (hereafter IFRS). The significant accunting plicies described belw have been applied cnsistently in relatin t all the reprting perids, unless therwise stated. The financial infrmatin has been prepared under the histrical cst cnventin, subject t adjustments in respect f revaluatin f financial assets at fair value thrugh prfit r lss presented at fair value. 18

19 Plus500 Ltd. NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (cntinued) NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (cntinued): b. Ging cncern The Grup has cnsiderable financial resurces, a brad range f prducts and a gegraphically diversified business. As a cnsequence, the Directrs believe that the Grup is well placed t manage its business risks in the cntext f the current ecnmic utlk. Accrdingly, the Directrs have a reasnable expectatin that the Grup has adequate resurces t cntinue in peratinal existence fr the freseeable future. They therefre cntinue t adpt the ging cncern basis in preparing these cndensed cnslidated financial statements. c. Segment reprting Operating segments are reprted in a manner cnsistent with the internal reprting prvided t the chief perating decisin-maker, wh is respnsible fr allcating resurces and assessing perfrmance f the perating segments. As stated in nte 1 abve, the Grup perates in ne perating segment: CFD trading. d. New Internatinal Financial Reprting Standards, Amendments t Standards and New interpretatins: New and amended standards adpted by the Grup fr the first time fr the financial year beginning n r after 1 January 2018: IFRS 9 "Financial Instruments" (hereafter IFRS 9) IFRS 9, Financial instruments, addresses the classificatin, measurement and recgnitin f financial assets and financial liabilities. The cmplete versin f IFRS 9 was issued in July It replaces the guidance f IAS 39 that relate t the classificatin and measurement f financial instruments. IFRS 9 retains but simplifies the mixed measurement mdel and establishes three primary measurement categries fr financial assets: amrtised cst, fair value thrugh ther cmprehensive incme and fair value thrugh P&L. The basis f classificatin depends n the entity's business mdel and the cntractual cash flw characteristics f the financial assets. Investments in equity instruments are required t be measured at fair value thrugh prfit r lss with the irrevcable ptin at inceptin t present changes in fair value in OCI nt recycling. There is nw a new expected credit lsses mdel that replaces the incurred lss impairment mdel used in IAS 39. Fr financial liabilities there were n changes t classificatin and measurement except fr the recgnitin f changes in wn credit risk in ther cmprehensive incme, fr liabilities designated at fair value thrugh prfit r lss. IFRS9 relaxes the requirements fr hedge effectiveness by replacing the bright line hedge effectiveness tests. It requires an ecnmic relatinship between the hedged item and hedging instrument and fr the hedged rati t be the same as the ne management actually uses fr risk management purpses. Cntempraneus dcumentatin is still required but is different t that currently prepared under IAS 39. The Grup implements IFRS9 retrspectively as frm January 1, The initial implementatin f IFRS9 had n material effect n the financial statements f the Cmpany. 19

20 Plus500 Ltd. NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (cntinued) NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (cntinued): IFRS 15- "Revenue frm Cntracts with Custmers" (hereafter- IFRS 15) Upn first-time adptin, IFRS 15 will replace existing IFRS guidance n revenue recgnitin. The cre principle f IFRS 15 is that an entity recgnises revenue t depict the transfer f prmised gds r services t custmers in an amunt that reflects the cnsideratin t which the entity expects t be entitled in exchange fr thse gds r services. IFRS 15 intrduces a single mdel fr revenue recgnitin, in which an entity recgnises revenue in accrdance with that cre principle by applying the fllwing five steps: 1. Identify the cntract(s) with a custmer. 2. Identify the perfrmance bligatins in the cntract. 3. Determine the transactin price. 4. Allcate the transactin price t the separate perfrmance bligatins in the cntract. 5. Recgnise revenue as each perfrmance bligatin is satisfied. IFRS 15 prvides guidance abut varius issues related t the applicatin f that mdel, including: recgnitin f revenue frm variable cnsideratin set in the cntract, adjustment f transactin fr the effects f the time value f mney and csts t btain r fulfil a cntract. The standard extends the disclsure requirements regarding revenue and requires, amng ther things, that entities disclse qualitative and quantitative infrmatin abut significant judgments made by management in determining the amunt and timing f the revenue. The Grup adpted the standard using the mdified retrspective methd f adptin as f January 1, Any cumulative impact f the adptin was recgnised in retained earnings as f January 1, 2018 and cmparatives were nt restated. The implementatin f IFRS 15 has n material effect n the financial statements f the Grup. Standards nt yet adpted: IFRS 16 "Leases" (hereafter IFRS 16) In January 2016, the IASB issued IFRS 16 - Leases which sets ut the principles fr the recgnitin, measurement, presentatin and disclsure f leases fr bth parties t a cntract and replaces the previus leases standard, IAS 17 - Leases. IFRS 16 eliminates the classificatin f leases fr the lessee as either perating leases r finance leases as required by IAS 17 and instead intrduces a single lessee accunting mdel whereby a lessee is required t recgnise assets and liabilities fr all leases with a term that is greater than 12 mnths, unless the underlying asset is f lw value, and t recgnise depreciatin f leases assets separately frm interest n lease liabilities in the incme statement. The Grup will implement IFRS 16 n its effective date, January 1, The impact n the incme statement is nt expected t be material as the annual lease perating expense recgnised under IAS 17 is likely t be bradly the same as the annual depreciatin charge recgnised under IFRS

21 Plus500 Ltd. NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (cntinued) NOTE 3 - SHARE CAPITAL Cmpsed f rdinary shares f NIS 0.01 par value, as fllws: Number f shares 31 December Authrised 300,000, ,000,000 Issued and fully paid 114,888, ,888,377 Less treasury shares * (1,111,109) (980,146) Outstanding shares 113,777, ,908,231 * Number f shares that was bught by the Cmpany as part f the buyback Prgramme. The amunts f dividends fr the years 2018 and 2017 declared and distributed by the Cmpany's Bard f Directrs are as fllws: Date f declaratin Amunt f dividend US $ in millins Amunt f dividend per share US $ Date f payment t sharehlders 5 February July August Nvember February July February July August Nvember 2018 NOTE 4- EARNINGS PER SHARE Earnings per share is calculated by dividing the prfit attributable t equity hlders f the Cmpany by the weighted average number f rdinary shares in issue during the year. 31 December Prfit attributable t equity hlders f the Cmpany (In U.S dllars) 379,026, ,675,000 Weighted average number f rdinary shares in issue* 113,895, ,420,058 * After weighting the effect f the buyback prgramme. 21

22 Plus500 Ltd. NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (cntinued) NOTE 5 - TRADE PAYABLES DUE TO CLIENTS: As f 31 December U.S. dllars in millins Custmers depsits, net* Segregated client funds (106.9) (157.5) * Custmers depsits, net are cmprised f the fllwing: Custmers depsits Less- financial derivative pen psitins: Grss amunt f assets (46.8) (45.7) Grss amunt f liabilities * As f 31 December 2018, and 2017, the ttal amunt f 'Trade payables - due t clients' includes bnuses t the clients frm all f the subsidiaries. NOTE 6 - CASH GENERATED FROM OPERATIONS Year ended 31 December U.S. dllars in millins Cash generated frm peratins activities Net incme fr the perid Adjustments required t reflect the cash flws frm perating activities: Depreciatin and amrtisatin Liability fr share-based cmpensatin Settlement f share-based cmpensatin (5.5) (0.9) Taxes n incme Interest expenses (incme) (4.2) 0.2 Freign exchange lsses (gains) n perating activities 0.5 (4.1) Operating changes in wrking capital: Decrease (increase) in ther receivables (3.9) 2.0 Increase (decrease) in trade payables due t clients (4.2) 2.8 Increase (decrease) in ther payables Increase (decrease) in Service suppliers (8.3) 2.3 (8.4) 23.9 Cash flws frm perating activities NOTE 7 - SUBSEQUENT EVENTS: On 12 February 2019 the Cmpany declared a final dividend in an amunt f $70.4 millin ($ per share). The dividend is due t be paid t the sharehlders n 9 July

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