CORPORATE PRESENTATION FinTech Group AG June 2017 Financial Services Technologies We got IT
1.1 The FinTech Group AG - key facts CORPORATE FACTS AND FIGURES ONGOING TRANSFORMATION OF CORPORATE STRUCTURE Headquarters Offices Employees Number of own B2C customers Number of managed accounts Trades executed p.a. Frankfurt Willich, Zwickau, Düsseldorf, Berlin, Kulmbach approx. 500 > 200,000 > 400,000 > 10 million CORPORATE STRUCTURE TODAY 100% 96,6% 100% Via XCOM Finanz GmbH (100%) 100% 100% Assets under administration > EUR 11 billion Customer cash deposits > EUR 1 billion Number of B2B clients Tier 1 Capital CRR > 100 approx. EUR 50m > 10 AS OF Q4 2017 Tech-Entity Fin-Entity 100% 2
1.2 The FinTech Group AG - shareholder structure Other and free float GFBK (Entity of flatex founder Bernd Förtsch) 38,53% 39,80% 0,57% Other and free float (Holding <0.5%) 1,31% 15,10% 1,72% 2,97% 3
1.3 FinTech Group AG - stock Shares outstanding: 16.8m Options outstanding: max. 1.7m Market capitalization EUR 290m (as of 9/6/17) Listed: Scale, Börse Frankfurt Share Price (EUR) 18 16 May 2017 PT EUR 23.00 Commerzbank Mar 2017 PT EUR 24.00 M.M. Warburg STOCKPRICE DEVELOPMENT LAST 6M ISIN: DE000FTG1111 Mar 2017 PriceTarget EUR 25.50 H&A Bloomberg: FTK GR Equity 14 12 Stock covered by 01.12.2016 31.12.2016 30.01.2017 01.03.2017 31.03.2017 30.04.2017 30.05.2017 4
1.4 Executive Committee Sascha Bochartz Dr. Benon Janos Frank Niehage Muhamad Chahrour Bernd Würfel Niklas Helmreich Head IT FinTech Group Head B2B FinTech Group MD FinTech Group Bank CEO FinTech Group CEO FinTech Group Bank CFO FinTech Group Vice Chairman FinTech Group Bank Deputy CEO FinTech Group Bank Head B2C FinTech Group MD FinTech Group Bank ALL EXCO MEMBERS ARE PART OF THE 4 YEAR OPTION PLAN 5
1.5 Financials, guidance and organic mid-term ambition Improved tech expertise by XCOM acquisition Strengthened capital base Implemented high class management team and subsequent restructuring actions Closed CFD deal with Commerzbank (strategic partnership) Group wide IFRS Reporting (incl. segment reports) Boost of organic growth of existing B2C business Sale of loss making AKTIONÄRSBANK, improve annual earnings and pool 75.2 banking activities in FinTech Group Bank AG 95.0 >100.0 Implement technology based lending and redeveloping treasury with the potential to generate an additional EUR 10+ million (do-ityourself and / or partner with existing players) Enter Prime Standard of Frankfurt Stock Exchange to increase transparency and trading volume Further strategic acquisitions & partnerships >150.0 >50.0 EUR million Net Sales EBITDA Net Profit 22.7 19.7 30.6 >32.0 12.3 16.8 >30.0-8.0-7.7-2.2 2014a 2015a 2016a 2017e Mid-term ambition 6
1.6 B2C - business model of flatex and ViTrade (c70% REVENUE CONTRIBUTION, ~45% EBITDA MARGIN) Fastest growing online brokerage business in Germany and Austria, >200k retail clients doing >9m transactions Market share of >20% in Germany and >25% in Austria Most trading-active clients in the market (FinTech clients: avg. 40-50 trades p.a. vs. market: avg. 10-20 trades p.a.) Guaranteed pricing model for more than 11 years: OTC @ EUR 5.90 - Markets @ EUR 5.00 Market leading product offering with ETP partnerships with Morgan Stanley, Commerzbank and Deutsche Bank 7
1.7 B2C - development of brokerage KPIs A GROWING NUMBER OF FLATEX CUSTOMERS (IN K) NUMBER OF FLATEX TRANSACTIONS (IN M) 250,0 12,5 205,5 175,4 8,5 134,4 149,6 5,8 7,1 7,7 FY 2014 FY 2015 FY 2016 FY 2017E MTA FY 2014 FY 2015 FY 2016 FY 2017E MTA 8
1.8 B2C - growth drivers Key drivers for successful brokerage business: cost per trade settlement (CPT), cost per client acquisition (CPA) and outstanding product partners Competitive technology edge due to self-developed, highly scalable transaction settlement technology ensures sustainable cost leadership with CPT of EUR 1.45 Each additional trade reduces cost per trade settlement - doubling the # of transactions reduces CPT by >40% to less than EUR 0.80 per settlement Quality of clients matters more than quantity - focused marketing strategy attracts the right clients (doing > 40 trades p.a.) with only EUR 100 CPA vs. EUR 300-500 at competitors Top notch product partners offering ETFs and ETPs - exclusive joint venture with Morgan Stanley (see case study) 9
1.9 B2C ETP Partnership with Morgan Stanley The German ETP market has a size of around EUR 70bn - FinTech Group has a >15% distribution stake In the past: product issuing banks kept 90% of the revenue pool - 10% to product distributor Exclusive Agreement with MS delivers higher revenue stake (50:50) than with other partners (Commerzbank, Deutsche Bank) Already 20,000 products issued that clients can trade at no cost AuM component contributes to FinTech Group revenues even if non-flatex clients trade MS products BANKS ISSUE ETPs OFFERED AT FLATEX TRADED BY CLIENTS PAST: TODAY: 90 : 10 split 50 : 50 split Revenue generation for issuing bank through: Inherent interest component Bid-ask spread REVENUE POOL 10
1.10 B2B - white label banking & IT services (c30% REVENUE CONTRIBUTION, ~20% EBITDA MARGIN) LEVERAGING OWN-USED IN-HOUSE BANKING VALUE CHAIN (TECHNOLOGY, REGULATORY, INFRASTRUCTURE) TRANSACTION AND MARKET MAKER SYSTEMS Example: developing and running OTC trading systems L.O.X. Example: SETTLEMENT AND CUSTODY SERVICES security account and custody services for stock option administration Example: RETAIL DEPOSIT INFRASTRUCTURE full provision of white label banking services for deposit collection and administration Products: Trading system Market maker system Trading platforms Market and price data supply Products: Custody services Payment platform SEPA platform incl. mandate management Online banking Secure transactions Products: FinTech Bank runs and manages online retail deposit business for 3rd parties from account opening and call centre services to annual tax forms 11
1.11 B2B client excerpt and case studies FinTech Group developed, maintains and runs LOX, the ETP OTC system for Deutsche Bank and Commerzbank, connected to 17 European brokerage companies - 3bn price feeds and 50k transactions - per day! FinTech Bank runs and manages the online retail deposit business for pbb direct (on pbb balance sheet), from account opening and call centre services to annual tax forms FinTech was chosen by Equatex one of two leading stock option plan adminstrators in Germany with > EUR 3bn AuC to provide transaction and custody services; FinTech opened 250k accounts for Equatex within 2 weeks 12
1.12 The ecosystem B2B Reduce costs Leverage synergies B2C Access to new partner GROWTH Expand product portfolio Increase profitability Increase transactions 13
1.13 The ecosystem case study Zinspilot B2B Flatex clients have moved EUR 200m to Zinspilot Satisfied B2B client, received EUR 200m without any additional marketing costs B2C Online platform providing clients with best available interest rates offered by European banks B2B client receiving white label banking services (account management, payment and regulation) Flatex clients can now receive interest Satisfied B2C clients, receiving now interest rates on their deposits Benefit for FinTech Group Saving -0.4% on EUR 200m (previously sitting with ECB) Earning 0.1% commission on EUR 200m from Zinspilot EUR 1m net profit by leveraging ecosystem Clients maintain EUR 1.2bn overnight trading money Demand by few customers for interest on deposits However, flatex has never paid interest on customer deposits 14
1.14 Credit & Treasury setting up credit portfolio setting-up a credit portfolio, diversified over risk, maturity and return aimed portfolio size by EOY17 of EUR 250m @ average interest rate of 4% (> 90% of portfolio fully collateralized) successful introduction of first product: flatex flex credit line (technically a 100% collateralized overdraft facility with max 25% LTV on securities hold by client) EUR 100m+ credit lines drawn after 12 months Highly collateralized factoring portfolio of currently ~EUR 40m, first-class debtors with top credit ratings such as ALDI, LIDL B2C COLLATERALIZED LOANS EUR 150MN @ 3.9% = EUR +6MN P.A. ALTERNATIVE CREDIT BOOK EUR 120MN @ 3.5% = EUR +4MN P.A. in EUR million 250 200 150 100 50 0 31.12.2016 30.06.2017 31.12.2017 15
1.15 Credit & Treasury setting up credit portfolio Customers maintain currently more than EUR 1bn with FinTech Group Bank AG (overnight trading money), thereof around EUR 800m is managed in a treasury portfolio Current management set up treasury strategy, despite low (negative) interest environment in Europe treasury portfolio is profitable and highly diversified (sovereign, municipal bonds and corporate bonds), yielding around 0.2% interest FinTech Group has never paid interest rates on customer deposits to customers Hidden reserve: increase in interest rate environment will have enormous impact on P&L - 1% increase +EUR 10 million EBT HIDDEN RESERVE: P&L IMPACT DUE TO CHANGE OF INTEREST ENVIRONMENT 30 Cash Deposits as of 31.12.2016 Incremental EBT 20 10 1.5% 1.0% 0.5% 0 800 900 1000 1100 1200 1300 1400 1500 Customer deposits 16
1.16 Growth strategy B2C B2C - Online Brokerage ORGANIC GROWTH STRATEGY GROWTH STRATEGY BY ACQUISITON Continue organic growth in Germany and Austria and manifest market leadership in terms of client activity and product offering Emphasize focus on becoming the leading online brokerage business in the German speaking DACH region by penetrating Switzerland Current average trading fee for clients: 30-40 SFR Potential to enter the market with 10-15 SFR/trade Leverage partnership with ETP partner to share penetration and marketing expenses Swarm out all over Europe and build the largest pan-european online brokerage business which is big-bank independent compared by leveraging our EU-Passport Currently operating Next step Potential markets Seek for takeover opportunities in Europe with the following parameters: Higher cost per transaction leveraging our processes and systems to generate higher profit Higher cost per client acquisition apply our marketing strategies to generate higher profit Inefficient product partnerships offer our best-class and broadest product portfolio to generate higher profits Weakly managed under increasing regulatory requirements implement our highly focused and experienced management team to generate higher profits 17
1.17 Growth strategy B2B Acquire three to five B2B mandates every year B2B - White Label Banking/IT Services ORGANIC GROWTH STRATEGY Each new mandate will contribute a contract lifetime revenue of EUR 5-10 million Make use of current regulatory and political environment (Brexit) to attract new B2B clients Continue focus on transaction settlement and offering settlement as a service to small and mid sized banks with inefficient back offices Clear strategy to become Europe s leading transaction processor by offering own-used value chain to third parties Increase mid-term the number of settled transaction for third parties from currently 1.5 million to 3 million 18
2. Annex
2.1 Company history FinTech Group AG Incorporation of PRE.IPO AG in Kulmbach XCOM AG Change of name to flatex AG Start of CFD-Trading IPO flatex AG Significant acceleration 1988 1999 2003 2005 2006 2008 2009 2010 2012 2013 2014 2015 Incorporation of XCOM BCC in Langen Merger of 12 group companies XCOM AG Acquisition of XCOM-Bank Incorporation of Bank biw AG (minority stake in the beginning) Investment in ViTrade AG Full take-over of Bank biw AG (100%) New owner FinTech Group AG ANNEX 20
2.2 Financials at a Glance - Consolidated Group CONTINUOUS REVENUE GROWTH WITH NEW STRATEGY (meur) 100,0+ 34,6 * 40,6 48,3 46,7 H1 2015 H2 2015 H1 2016 H2 2016 FY 2017E NET PROFIT TURNAROUND ACHIEVED (meur) 16,8+ 10,0 9,8 2,5 H1 2015 H2 2015 H1 2016 H2 2016 FY 2017E -12,2 SHAREHOLDER VALUE CREATION THROUGH ROE GROWTH 13,6% 16,5%+ AFTER GROUP RESTRUCTURING FOCUS ON EPS 0,73 1,00+ 1 2014 2015 2016 2017E -2,5% -15,5% 2014 2015 2016E 2017E -0,58-0,99 * H1 2015 numbers include significant one-off income (reported figure in FY15: EUR 8.3mn) and consolidate only three months XCOM AG / FinTech Group Bank AG (for further information see HY16 financial report note 4) Note: all segment numbers before intersegment consolidation and holding expenses thus sum of segments does not equal Group financials 1 undiluted, based on 16.8m shares outstanding as of 01/04/2017 ANNEX 21
2.3 Segment Financials at a Glance SECURITIES TRADING AND FINANCIAL SERVICES ONGOING INCREASE IN NUMBER OF RETAIL CLIENTS (k) LEADING B2C-POSITION ENSURES RECURRING REVENUES (meur) 250,0** 212,0 193,8 163,7 176,6 H1 2015 H2 2015 H1 2016 H2 2016 FY 2017E 25,0+ 21,4 * 11,6 7,1 7,8 H1 2015 H2 2015 H1 2016 H2 2016 FY 2017E EBITDA INCREASING WITH HIGHER SHARE OF WALLET (meur) EFFICIENT IT AND BANKING ECOSYSTEM DRIVES EBITDA-MARGIN 15,7 * 16,5+ 73,4% * 54,9% 63,8% 57,7% 67,0%+ 7,4 3,9 4,5 H1 2015 H2 2015 H1 2016 H2 2016 FY 2017E H1 2015 H2 2015 H1 2016 H2 2016 FY 2017E * H1 2015 numbers include significant one-off income (reported figure in FY15: EUR 8.3mn) ** includes flatex, ViTrade and further B2C clients Note: all numbers before intersegment consolidation and holding expenses thus sum of segments does not equal Group financials ANNEX 22
2.4 Segment Financials at a Glance TRANSACTION PROCESSING & WHITE-LABEL BANKING SERVICES STRONG GROWTH IN NUMBER OF SETTLED TRANSACTIONS (m) 12,5 INTENSIFIED SALES ACTIVITIES IMPACT REVENUE GROWTH (meur) 75,0+ 4,8 5,3 5,0 5,5 H1 2015 H2 2015 H1 2016 H2 2016 FY 2017E 11,8 * 33,4 36,5 34,2 H1 2015 H2 2015 H1 2016 H2 2016 FY 2017E RESTRUCTURING HAS INCREASED EFFICIENCY AND EBITDA (meur) SCALABLE PRODUCTS AND BPO PUSHES EBITDA-MARGIN 28,5+ 12,3 16,3 2,2 * 6,2 H1 2015 H2 2015 H1 2016 H2 2016 FY 2017E 40% 15% 47,7% 38,0%+ 33,7% 18,6% * 18,6% H1 2015 H2 2015 H1 2016 H2 2016 FY 2017E * H1 2015 numbers consolidate only three months XCOM AG / FinTech Group Bank AG (for further information see HY16 financial report note 4) Note: all numbers before intersegment consolidation and holding expenses thus sum of segments does not equal Group financials ANNEX 23
Contact details Frank Niehage CEO FinTech Group AG Rotfeder-Ring 5-7 60327 Frankfurt, Germany www.fintechgroup.com Muhamad Chahrour CFO FinTech Group AG Rotfeder-Ring 5-7 60327 Frankfurt, Germany www.fintechgroup.com