Year ended 31 March 2017

Transcription

1 Year ended 31 March 2017

2 Agenda 1 Introduction 2 Progress on strategic pillars 3 Financials 4 Summary 5 Q&A 2017 Analyst presentation ǀ Pg 2

3 Introduction Key highlights Delivering on strategic initiatives to position firm for the future More than 500,000 clients joining CMC stockbroking platform next September from ANZ Bank in Australia Regulatory changes providing new challenges and opportunities Leading in-house, fully-customisable technology allows flexibility in response to regulation Net operating income reduced by 5% due to lower client trading activity Revenue per client -11%, with reduction in associated metrics: value of client trades -3%, number of trades -6% Clients held trades for longer due to fewer trading opportunities Reduction in loss days demonstrates lack of trading volatility Fall in EPS due to operational leverage but maintaining full year dividend EPS reduced by 9% to 13.7 pence, reflecting the operational leverage in the business Maintaining full year total ordinary dividend of 8.93p (65% payout ratio) reflecting strong cash generation in the business Growing customer base with active clients increasing by 5% Growth in client money of 37% Positions firm well for future revenue capture Maintaining focus on cost control despite headwinds Underlying operating expenses marginally increased, despite significant increases from weakened Sterling Headcount remained flat year on year 2017 Analyst presentation ǀ Pg 3

4 Agenda 1 Introduction 2 Progress on strategic pillars 3 Financials 4 Summary 5 Q&A 2017 Analyst presentation ǀ Pg 4

5 1 Delivering on strategic initiatives CMC Markets is making excellent progress on strategic initiatives Growthinitiative Our objectives (1) We havedelivered (3) Focus now Core markets retail client growth Choice provider for new clients Premium propositionattracting switchers Global digital access Increased market share in UK and Australia Maintained leading market position in Germany Total active clients increased by 5%? Preparing for regulatory changes? Less impact for premium clients Continued focus on premium clients 2 Digital marketing Infrastructure change New acquisition model New website and application forms to improve conversion New application forms and on-boarding journey Continued improvement to new website and rolled out globally Digital marketing spend represents 46% of total spend, up from 39% Continued testing of optimal application form journey Analytical focus for digital marketing 3 Geographic expansion Reignite underperforming regions, e.g. France Open new offices, e.g. Poland Potential opportunities in other countries, e.g. China Reigniting underperforming office success: France net revenue 2 increased by 16% NewPolandoffice active clients now account for 4% of European clients Selective on-boarding from China Continued evaluation of potential new geographies after regulatory clarity New Shanghai office to be opened 4 New products and developments Countdowns / Binaries Currently evaluating warrants markets, direct market access, SIPPs Longer term potential opportunities Countdowns, Binaries and Knock-Outsproducts delivered; development cost already repaid Next Generation HTML5 roll-out has commenced Development of limited loss account functionality Platform enhancements to address changing regulatory landscape DMA to be released in near future International physical equities and physical options to be delivered as part of ANZ partnership? Continue to work with regulatory bodies, taking appropriate measures in line with changes where necessary 5 Institutional Full white and grey label proposition New Head of Institutional Sales appointed 1. Per IPO Prospectus, February Net revenue generated from CFD and spread bet active clients, after the impact of rebates and levies 3. From 1 April 2016 to 31 March active institutional relationships during the year, 43% more than 2016 ANZ transaction, bringing another 250,000 stockbroking active clients in September 2018 API connectivity CFD institutions accounts for 15% of net revenue, up from 10% in 2016 Further global roll-out of institutional offering Full implementation of ANZ partnership in Australia Potential for further stockbroking expansion following ANZ transaction 2017 Analyst presentation ǀ Pg 5

6 Stockbroking ANZ partnership Largest partnership deal in CMC s history 250,000 annual active stockbroking clients to be transferred and serviced from September k+ active clients Clients are being onboarded at zero marketing cost Project development team in place; transaction will be accretive when client migration is completed (September 2018) Platform development underway to service additional clients, expand physical option offering and offer international equities 50k active accounts Analyst presentation ǀ Pg 6

7 1 Established markets Stable number of active clients trading on a different product mix Value of client trades ( bn) Active clients Active clients 1 and number of trades 1, , ,200 1, ,000 35,000 30,000 25,000 20,000 15,000 10,000 5,000 UK Germany Australia Established markets net revenue ( m) 3,300 3,100 2,900 2,700 2,500 Net revenue ( m) RPC ( ) Highlights UK Australia Germany o Growing primary market share² o Slight decrease in net revenue due to lower RPC compared to 2016 o Promising growth in institutional business during the year with 76% increase in value of client trades o Doubled net promoter score to remain the number two FX provider 3 o Retained number one ranking for high value CFD clients 3 o Growing primary market share 3 o Maintained market leading position 4 o Similar number of active clients to 2016, but 10% decrease in value of trades largely due to lower volatility on DAX ,300 UK Germany Australia Established markets RPC ( ) 1. Active clients represent those individual clients who have traded with or held CFD or spread bet positions with CMC Markets on at least one occasion during the year. 2. Investment Trends October 2016 UK Leveraged Trading Report 3. Investment Trends 2016 Australia CFD Report 4. Investment Trends June 2016 Germany CFD & FX Report 2017 Analyst presentation ǀ Pg 7

8 2 Digital marketing Increasing number of clients being onboarded at a stable cost per acquisition Device used to trade Monthly % of total NG value of client trades 58% 55% 52% 49% 46% 43% 40% Apr-15 Jul-15 Oct-15 Jan-16 Apr-16 Jul-16 Oct-16 Jan-17 Online Mobile Clients are increasingly choosing mobile devices as their method of choice to carry out trades, with more value now traded through Next Gen on mobile than on desktops Cost per acquisition¹ (CPA) CPA ( ) ,000 14,000 12,000 10,000 8,000 New opened accounts Consistent CPA throughout the year, in line with previous results Steady rise in the number of accounts being opened Digital spend made up 46% of total marketing expenditure, compared to 39% in H H H H H H2 6,000 Focus on premium client acquisition New opened accounts CPA ( ) 1. Cost per new approved account, presented net of Land Rover BAR sponsorship cost 2017 Analyst presentation ǀ Pg 8

9 3 Geographic expansion/developing regions France and Poland France Value of client trades ( bn) Net revenue ( m) 16% growth in net revenue compared to 2016 o 10% increase in active clients o 6% rise in RPC year on year Value of client trades increased 26% Headwinds resulting from regulatory changes around marketing impacted H2 results New account type released in the region provides competitive advantage Value of client trades ( bn) Net revenue¹ ( m) Poland Q Q Q Q Q Q H H H2 New opened accounts Quarterly active clients Net revenue¹ ( m) 1. Net revenue generated from CFD and spread bet active clients, including Countdowns and Binaries, after the impact of rebates and levies Analyst presentation ǀ Pg 9

10 4 Maintain competitive product offering Binaries and Knock-Outs successfully launched during the year New Products H H H H Countdowns and Binaries revenue¹ ( m) 0 Sep-16 Oct-16 Nov-16 Dec-16 Jan-17 Feb-17 Mar-17 Knock-Outs value of client trades ( m) Other developments Countdowns and Binaries First full year of both products being released in all offices except Canada and Singapore Revenue of 8.3m, compared to 4.3m in 2016 Consistent number of clients using the products each month Knock-Outs Released in Germany in October 2016 Growth seen since the product was released, as per the top right graph Regulatory changes The Next Generation product offering has, and will continue to be, developed in line with regulatory changes, a task made easier due to the bespoke technology of the platform HTML5 Next Generation rollout has commenced Other developments DMA functionality on currency combinations in development Other DMA and partner opportunities continue to be explored 1. Gross Countdowns and Binaries revenue before the impact of rebates and levies Analyst presentation ǀ Pg 10

11 5 Institutional Increasing number of relationships driving increase in revenue Institutional net revenue¹ and value of client trades² First full year of the institutional team being in place active institutional relationships during the year, 43% more than % growth in the value of client trades derived from institutional business 38% growth in net revenue Continued development of API offering to provide additional flexibility in the future, as well as maintain our leading position in technology No. of institutional relationships ,800 3,600 3,400 3,200 3,000 2,800 2,600 2,400 2,200 2,000 No. of institutional active clients Institutional net revenue ( m) Institutional value of client trades( bn) No. of Instituional relationships No. of institutional active clients 1. Net revenue generated from CFD and spread bet active clients, after the impact of rebates and levies. 2. Value of client trades represents the notional value of client trades Analyst presentation ǀ Pg 11

12 Stockbroking Significant year-on-year growth YoY % New accounts 13,427 11,173 20% Turnover¹ (AUD millions) 8,525 5,946 43% Profit before tax² (AUD millions) % Revenue growth aided by low central bank rate and stronger AUD against GBP Latest release of Pro Platform included HTML 5 update Strong growth in value of trades of 43% Quality offering illustrated by the Pro Platform being awarded Canstar 2017 Broker of the Year for the 7th year 1. Turnover represents the notional value of client trades 2. Including cross-sell revenue from leveraged products 2017 Analyst presentation ǀ Pg 12

13 Agenda 1 Introduction 2 Progress on strategic pillars 3 Financials 4 Summary 5 Q&A 2017 Analyst presentation ǀ Pg 13

14 KPIs Growing client base but reduced activity in benign market Active clients 1 and Revenue per active client (RPC) 2 ( ) Turnover ( bn) and Trades (m) Net operating income 3 ( m) 2,716 2, , ,329 60,082 1,626 2,071 2, , Active clients Revenue per active client Value of trades ( bn) Number of trades (m) Net operating income ( m) Profit Before Tax 4 ( m and margin) Profit after tax ( m) Dividend per share and Basic EPS (pence) 36.2% 36.8% % PBT ( m) Underlying PBT Underlying PBT margin Profit After Tax ( m) Dividend per share Special dividend per share Basic EPS 1. Active clients represent those individual clients who have traded with or held CFD or spread bet positions with CMC Markets on at least one occasion during the year. 2. Average trading revenue generated from CFD and spread bet active clients. 3. Net operating income represents total revenue after rebates payable to introducing partners and retail clients, and betting levies. 4. Underlying PBT represents PBT before exceptional items Analyst presentation ǀ Pg 14

15 Income statement Group ( m) YoY % Lower NOI due to less volatile markets resulting in reduced client trading activity compared to prior year, particularly in Indices Controlled underlying operating expense increases as guided: o higher personnel costs, caused by the annualised cost increase associated with investment in personnel during the prior year o share based payments o increased marketing activity o higher IT costs due to new services and inflationary pressures caused by Sterling devaluation, in particular market data costs Net operating income (5%) Underlying operating expenses (105.8) (100.2) (6%) Depreciation, amortisation and finance costs (6.5) (6.8) 4% Underlying Profit before tax (22%) Other income Exceptional costs - (12.1) - Profit before taxation (9%) Underlying tax (9.3) (11.7) 20% Underlying Profit after tax (23%) Tax (9.3) (10.9) 15% Profit after tax (8%) 1. Net operating income represents total revenue after rebates payable to introducing partners and retail clients, and betting levies. 2. Underlying PBT represents PBT before exceptional items. 3. Based on implied tax payable excluding exceptional items Analyst presentation ǀ Pg 15

16 Net operating income Breakdown by product Turnover 1 and trades Group ( m) YoY % CFD and spread bet (incl binaries) net revenue (7%) Stockbroking % Interest income (1%) Sundry income Net operating income (5%) 45 Dampened market volatility in comparison to prior year, particularly in Indices, led to reduced CFD and Spreadbet activity from clients Strong growth in stockbroking business through increasing volumes, aided by a lower central bank rate and the depreciation of GBP 1,626 2,071 2, Turnover ( bn) Trades (m) 1. Turnover represents the notional value of client trades Analyst presentation ǀ Pg 16

17 Net revenue 1 bridge ( m) Existing clients holding positions for longer and hence trading less Existing clients: ( 49.4m) Existing clients: ( 10.9m) (26.8) (17.5) (22.6) New and returning clients: 36.5m New and returning clients: 38.5m 2015 Net revenue¹ Existing clients trading more Existing clients not trading Returning clients New clients 2016 Net revenue¹ Existing clients trading less Existing clients not trading Returning clients New clients 2017 Net revenue¹ 1. Net revenue generated from CFD and spread bet active clients, including Countdowns and Binaries, after the impact of rebates to introducing partners and retail clients, and betting levies Analyst presentation ǀ Pg 17

18 Customer lifecycle Increasing client tenure and active clients despite reduced market volatility Client tenure (in months) 2017 Revenue² by client tenure % Client tenure 0-6M 40% 15% 6-12M 1-2YR FY15 FY16 FY17 Standard Premium¹ 20% 2-3YR >3YR Client churn (000 s) 15% Premium client tenure growing to over 3 years, reflecting the quality of clients trading (15) (15) (18) 55% of revenue was generated by clients that have been with the Group for 2 years or more Fewer trading opportunities caused more clients to stop trading than previous years Continuous traders New Traders Reactivated Stopped trading 1. Premium clients are calculated based on internal revenue metrics. 2. Gross revenue generated from CFD and spread bet active clients, including Countdowns and Binaries, before the impact of rebates to introducing partners and retail clients, and betting levies Analyst presentation ǀ Pg 18

19 Revenue per active client 1 (RPC) Growing active client base but quiet markets causing lower RPC Active clients and RPC Clients trading less led to a decrease in RPC of 11% against ,716 2,828 2,517 Active clients continue to grow, with particularly strong growth in the APAC & Canada region RPC remains strong in comparison to the rest of the industry despite the downturn in New client value Clients onboarded during 2017 have been of similar average value as those with first trades in Slight decrease in average new client value against 2016, in line with decreases in the rest of the business, due to lower volatility Payback on marketing spend remains between 2 to 3 months UK Europe APAC and Canada RPC ( ) 1. Average trading revenue generated from CFD and spread bet active clients. 2. Cumulative average net trading revenue generated per new client whose first trade was placed in the associated year Analyst presentation ǀ Pg 19

20 Performance by region Increasing client numbers but reduced trading volume UK revenue bridge ( m) Europe revenue bridge ( m) 63.1 (0.5) (1.6) (4.8) Net revenue¹ Active clients² RPC³ 2017 Net revenue¹ 2016 Net revenue¹ Active clients² RPC³ 2017 Net revenue¹ APAC & Canada revenue bridge ( m) 4.6 (10.2) Net revenue¹ Active clients² RPC³ 2017 Net revenue¹ Lower revenue per client in all offices, with biggest reductions in Europe and APAC & Canada Growing client base in Europe and APAC & Canada, with higher trading activity expected from the bigger base in more volatile times Europe RPC reduction is largely due to the less German 30 trading opportunities experienced during the year APAC & Canada RPC reduced in part due to growing client base in the region, with the time lag in receiving full client value after they are onboarded causing the RPC to deteriorate 1. Net revenue generated from CFD and spread bet active clients, including Countdowns, after the impact of rebates to introducing partners and retail clients, and betting levies. 2. Active clients represent those individual clients who have traded with or held CFD or spread bet positions with CMC Markets on at least one occasion during the financial year. 3. Change in net revenue per active client Analyst presentation ǀ Pg 20

21 Client assets and prime broker requirements Assets held by clients continues to grow along with PB requirements Client assets under management (AUM) Broker margin requirements 50, Max - 114m 48,000 46, , Max - 78m Active clients 42,000 40, % 260 Client AUM ( m) 70.0 Max - 72m 38,000 36, , ,000 30, Mar-14 Mar-15 Mar-16 Mar-17 Client AUM ( m) Active clients¹ 1. Active clients represent those individual clients who have traded with or held CFD or spread bet positions with CMC Markets on at least one occasion during the preceding 6 months 2017 Analyst presentation ǀ Pg 21

22 Revenue trend Lower number of loss days and more consistent daily revenue Continuing decrease in the number of loss days Daily revenue¹ distribution ( 000s) Number of days % 8.4% % 20 FY15 FY16 FY17 0 (1,000) (500) ,000 1,500 2,000 2,500 3,000 CFD and spread bet loss days % FY17 FY16 1. Gross revenue generated from CFD and spread bet active clients, including Countdowns and Binaries, before the impact of rebates to introducing partners and retail clients, and betting levies Analyst presentation ǀ Pg 22

23 Operating costs Higher costs driven by investment in enablers of strategic initiatives Underlying operating cost¹ increase of 6%, supporting ongoing investment in strategic initiatives Staff costs increased 3.3m (7%) due to: o annualised impact of investment in personnel in the prior year o GBP depreciation o share based payments o offset by lower performance related pay IT costs increased 2.7m (21%), due to additional expenditure in new services, including the cyber security area, increased market data costs and inflationary pressures caused mainly by sterling devaluation Marketing costs increased 3.5m (19%) as the Group continued to invest in digital channel expenditure with digital making up 46% of total marketing spend compared to 39% in 2016 Other costs decreased by 4.1m (34%) to 7.9m, with the main contributors being: o lower bad debt expenses due to more benign market conditions o lower irrecoverable sales tax % of NOI Group ( m) YoY % Staff costs % 31% 27% IT costs % 10% 7% Sales and marketing % 14% 11% Premises % 3% 3% Legal and professional fees % 2% 2% Regulatory fees (20%) 2% 2% Other (34%) 5% 7% Total operating expenses before exceptional costs % 66% 59% Exceptional costs % Total operating expenses (6%) 66% 66% Average headcount % Actual headcount at end of year (1%) 1. Operating costs excluding exceptional items Analyst presentation ǀ Pg 23

24 Liquidity and regulatory capital Regulatory capital ratio and cash generation remain strong Regulatory capital Group ( m) Core Equity Tier 1 Capital Less: intangibles and deferred tax assets (6.7) (6.6) Capital Resources Pillar 1 requirement Total risk exposure Capital ratio % 30.2% 31.2% Total available liquidity Group ( m) YoY Own funds Non-segregated client and partner funds Available committed facility Total available liquidity Uses of total available liquidity Group ( m) YoY Total available liquidity Blocked cash 4 (19.8) (14.9) (4.9) Initial margin requirement at broker (93.0) (54.7) (38.3) Net available liquidity (20.1) 1. Core Equity Tier 1 capital total audited capital resources as at the end of the financial period, less dividends proposed or paid before 31 March. Prior year comparative is presented using the same methodology. 2. Pillar 1 requirement the minimum capital requirement required to adhere to CRD IV. 3. Total risk exposure the Pillar 1 requirement multiplied by 12.5, as set out by the FCA. 4. Blocked cash relates to cash needed to support regulatory and overseas subsidiaries operational requirements. 5. Surplus total available liquidity is defined as the liquidity in excess of the Group s liquidity risk appetite and is the Group s key liquidity measure Analyst presentation ǀ Pg 24

25 Regulatory changes providing challenges and opportunities Increased requirements create barriers to entry and competitive advantage for the Group AMF regulations: Implemented 2017 CMC response: Product functionality built BaFin regulatory changes: To be implemented 10 August 2017 CMC response: Product functionality built CFD reform FCA consultation paper: Implementation expected in 2017, as per FCA guidance CMC response:? Actively engaged and will respond to changes when they are released Australia client money regulation: Approved 14 February 2017, implemented a year later CMC response: Client money is already fully segregated, first mover advantage Review of products throughout Europe: Ongoing CMC response:? Actively engaged and will respond to any changes as appropriate Brexit: Ongoing CMC response:? Range of potential models depending on UK Government negotiation Other upcoming regulatory matters MiFID II and MiFIR: Implementation 3 January 2018 General Data Protection Regulation (GDPR): Implementation 25 May Analyst presentation ǀ Pg 25

26 Agenda 1 Introduction 2 Progress on strategic pillars 3 Financials 4 Summary 5 Q&A 2017 Analyst presentation ǀ Pg 26

27 Outlook Client activity at the start of this year marginally better than previous year, but we remain cautious At this stage it is not possible to predict outcome and impact from regulatory proposals Cost control continues to be a focus although not at the expense of future growth Operating costs expected to be broadly in line with FY17 with an additional 3m in relation to the implementation costs associated with the ANZ transaction 2017 Analyst presentation ǀ Pg 27

28 Summary Although client activity has been lower, strategy being delivered Strong growth in institutional business with FX DMA launched in May Significant increase in Australian stockbroking business in 14 months through ANZ Bank transaction Flexible, adaptable proprietary technology that can respond to change Focus on high value, quality clients Regulatory change presents challenges and opportunities 2017 Analyst presentation ǀ Pg 28

29 Agenda 1 Introduction 2 Progress on strategic pillars 3 Financials 4 Summary 5 Q&A 2017 Analyst presentation ǀ Pg 29

30 Appendices

31 Appendix 1 Selected KPIs by half year Net revenue 1 ( m) H1 H2 Full Year H1 H2 Full Year H1 H2 Full Year UK Europe APAC & Canada Total Active clients² H1 H2 Full Year H1 H2 Full Year H1 H2 Full Year UK 10,673 12,814 15,417 12,749 13,172 17,268 13,345 13,149 17,142 Europe 15,365 17,111 20,019 16,954 18,175 21,714 18,159 18,800 22,503 APAC & Canada 11,323 12,756 14,867 14,314 15,201 18,347 16,119 17,149 20,437 Total 37,361 42,681 50,303 44,017 46,548 57,329 47,623 49,098 60,082 Revenue per active client ( ) H1 H2 Full Year H1 H2 Full Year H1 H2 Full Year UK 1,812 2,283 3,152 2,314 2,548 3,652 2,180 2,426 3,558 Europe 1,288 1,499 2,269 1,302 1,455 2,234 1,080 1,365 2,012 APAC & Canada 1,442 2,058 2,864 1,646 1,781 2,760 1,376 1,330 2,201 Total 1,484 1,901 2,716 1,707 1,871 2,828 1,488 1,637 2, Net revenue represents total trading revenue generated from CFD and spread bet clients after the impact of Rebates & Levies. Geographic segmentation is according to location of office which on-boards client, rather than client place of residence. 2. Active clients represent those individual clients who have traded with or held CFD or spread bet positions with CMC Markets on at least one occasion during the preceding 6 months for half year figures and 12 months for full year Analyst presentation ǀ Pg 31

32 Appendix 2 Income statement Group ( m) H1 H H1 H YoY % Total revenue Rebates & levies (12.7) (14.2) (26.9) (10.2) (8.6) (18.8) (43%) Net operating income (5%) Other income Operating expenses (53.6) (52.2) (105.8) (49.1) (51.1) (100.2) (6%) Exceptional costs (1.3) (10.8) (12.1) - Depreciation and amortisation (2.8) (3.0) (5.8) (3.2) (2.8) (6.0) 4% Finance costs (0.3) (0.4) (0.7) (0.4) (0.4) (0.8) 5% Profit before taxation (9%) Underlying Profit before tax (22%) Taxation (4.1) (5.2) (9.3) (6.5) (4.4) (10.9) 15% Profit after tax (8%) Underlying Profit after tax (23%) Ordinary Dividend per share (pence) Basic EPS (pence) (9%) 1. Net operating income represents total revenue after the impact of Rebates & Levies. 2. Underlying PBT represents PBT before exceptionals. 3. Based on implied tax payable excluding exceptional items 2017 Analyst presentation ǀ Pg 32

33 Appendix 3 Own funds flow statement Group ( m) YoY % Operating activities Profit before tax (9%) Adjustments for: Finance costs (5%) Depreciation and amortisation (4%) Other non-cash adjustments ,609% Tax paid (11.4) (6.9) (65%) Own funds generated from operating activities (8%) Movement in working capital (10.7) (5.2) (104%) Inflow/(Outflow) from investing activities Net Purchase of property, plant and equipment and intangible assets (3.8) (4.0) 4% Proceeds from issuance of ordinary shares (100%) Other outflow from investing activities (4.8) - - (Outflow)/Inflow from financing activities Interest paid (0.7) (0.8) 5% Dividends paid (23.9) (24.9) 4% Other outflow from financing activities (1.4) (0.4) (244%) Total outflow from investing and financing activities (34.6) (15.3) (127%) Increase in own funds (88%) Own funds at the beginning of the year % Effect of foreign exchange rate changes % Own funds at the end of the year % 2017 Analyst presentation ǀ Pg 33

34 Appendix 4 Revenue composition 2017 CFD and Stockbroking revenue 1 by asset class 2016 CFD and Stockbroking revenue 1 by asset class New products 5% FX 28% Stockbroking 5% Shares 11% New products 3% FX 25% Stockbroking 3% Shares 10% Treasury 0% Commodity 12% Index 39% Treasury 0% Commodity 11% Index 48% 2017 Net revenue 2 by region 2016 Net revenue 2 by region APAC & Canada 30% UK 40% APAC & Canada 31% UK 39% Europe 30% Europe 30% 1. CFD and Stockbroking revenue represents total revenue generated from CFD, Spread bet and stockbroking clients after the impact of Rebates & Levies. Geographic segmentation is according to location of office which on-boards client, rather than client place of residence. 2. Net revenue generated from CFD and spread bet active clients, including Countdowns and Binaries after the impact of rebates and levies Analyst presentation ǀ Pg 34

35 Appendix 5 Lower volatility in major Indices Closing VIX 1 VDAX-NEW Closing VIX 25 VDAX-NEW VIX close 2015 Average 2016 Average 2017 Average VDAX-NEW 2015 Average 2016 Average 2017 Average Value of client trades in Indices, our biggest asset class, fell 18% against prior year due to reduced volatility in markets 1. VIX and VDAX-NEW are measures of equity market volatility in their respective regions (US and Germany respectively) 2017 Analyst presentation ǀ Pg 35

36 Disclaimer Certain statements in this presentation constitute or may constitute forward-looking statements. Any statement in this presentation that is not a statement of historical fact including, without limitation, those regarding the Company s future expectations, operations, financial performance, financial condition and business is or may be a forward-looking statement. These forward-looking statements are subject to risks and uncertainties that may cause actual results to differ materially from those projected or implied in any forward-looking statement. These risks and uncertainties include, among other factors, changing economic, financial, business or other market conditions. These and other factors could adversely affect the outcome and financial effects of the plans and events described in this presentation. As a result, you are cautioned not to place any reliance on such forward-looking statements. The forward-looking statements reflect knowledge and information available at the date of this presentation and the Company undertakes no obligation to update its view of such risks and uncertainties or to update the forward-looking statements contained herein. Nothing in this presentation should be construed as a profit forecast or profit estimate and no statement in this presentation should be interpreted to mean that the future earnings per share of the Company for current or future financial years will necessarily match or exceed the historical or published earnings per share of the Company. This communication is directed only at (i) persons having professional experience in matters relating to investments who fall within the definition of investment professionals in Article 19(5) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2001; or (ii) high net worth bodies corporate, unincorporated associations and partnerships and trustees of high value trusts as described in Article 49(2) of the Financial Services and Markets Act 2000 (Financial Promotion) Order Persons within the United Kingdom who receive this communication (other than those falling within (i) and (ii) above) should not rely on or act upon the contents of this communication. Nothing in this presentation is intended to constitute an invitation or inducement to engage in investment activity for the purposes of the prohibition on financial promotion contained in the Financial Services and Markets Act This presentation has been furnished to you solely for information and may not be reproduced, redistributed or passed on to any other person, nor may it be published in whole or in part, for any other purpose. This presentation does not constitute or form part of, and should not be construed as, an offer for sale or subscription of, or solicitation of any offer to buy or subscribe for, any securities of CMC Markets PLC ( CMC, or the Company") in any jurisdiction nor should it or any part of it form the basis of, or be relied on in connection with, any contract or commitment whatsoever. This presentation does not constitute a recommendation regarding the securities of CMC. Without limitation to the foregoing, these materials do not constitute an offer of securities for sale in the United States. Securities may not be offered or sold into the United States absent registration under the US Securities Act of 1933 or an exemption there from. CMC has not verified any of the information set out in this presentation. Without prejudice to the foregoing, neither CMC nor its associates nor any officer, director, employee or representative of any of them accepts any liability whatsoever for any loss however arising, directly or indirectly, from any reliance on this presentation or its contents. This presentation is not being issued, and is not for distribution in, the United States (with certain limited exceptions in accordance with the US Securities Act of 1933) or in any jurisdiction where such distribution is unlawful and is not for distribution to publications with a general circulation in the United States. Certain figures contained in this presentation, including financial information, have been subject to rounding adjustments. Accordingly, in certain instances, the sum or percentage change of the numbers contained in this presentation may not conform exactly to the total figure given as percentage movements have been calculated from the underlying data before rounding. By attending or reading this presentation you agree to be bound by the foregoing limitations Analyst presentation ǀ Pg 36