Results Presentation Half Year Ended 30 November 2018
Disclaimer This presentation, prepared by IG Group Holdings plc (the Company ), may contain forward-looking statements about the Company and its subsidiaries (the Group ). Such forward-looking statements can be identified by the use of forwardlooking terminology, including the terms "believes", projects, "estimates", "plans", "anticipates", "targets", "aims", "continues", "expects", "intends", "hopes", "may", "will", "would", "could" or "should" or, in each case, their negative or other various or comparable terminology. Forward-looking statements involve known and unknown risks and uncertainties because they are beyond the Company s control and are based on current beliefs and expectations about future events, including the results of operations, financial condition, liquidity, prospects, growth and strategies facing the Group and the industries in which it operates and the dividend policy of the Company. No assurance can be given that such future results will be achieved; actual events or results may differ materially as a result of risks and uncertainties facing the Company. If the assumptions on which the Company bases its forward-looking statements change, actual results may differ from those expressed in such statements. Forward-looking statements speak only as of the date they are made and the Company undertakes no obligation to update these forward-looking statements. Nothing in this presentation should be construed as a profit forecast. Some numbers and period on period percentages in this presentation have been rounded or adjusted to ensure consistency with the financial statements. This may lead to differences between subtotals and the sum of individual numbers as presented. FY19 relates to the financial year ending 31st May 2019, FY18 relates to the financial year ending 31st May 2018. H1 FY19 refers to the half year ending 30th November 2018. H1 FY18 refers to the half year ending 30th November 2017. 2
Performance highlights Successfully navigating the introduction of the ESMA measures Revenue impact from the ESMA measures was in line with the Group s expectations 69% of ESMA region revenue in Q2 FY19 was generated by clients categorised as Professional Continued growth in revenue outside of the ESMA region Strong performance in Singapore and Japan Loyal client base 51% of H1 FY19 revenue generated by clients who have traded with IG for more than 3 years 3
Financial Results and Business Performance 4
H1 FY19 results summary Net trading revenue Operating expenses Operating profit Operating profit margin Basic EPS 251.0m 122.1m 112.5m 44.8% 24.9p vs H1 FY18 vs H1 FY17 6% 2% 4% 3% 18% 7% 6.1% points 1.7% points 16% 10% 5 YEAR REVENUE, OPERATING PROFIT AND EPS Underlying 1 REVENUE ( m) OPERATING PROFIT ( m) EARNINGS PER SHARE (p) 600 300 70 H1 H2 H1 H2 500 60 H1 H2 400 200 50 300 40 30 200 100 20 100 10 0 0 0 FY15 FY16 FY17 FY18 FY19 FY15 FY16 FY17 FY18 FY19 FY15 FY16 FY17 FY18 FY19 1 FY15 excludes impact of Swiss franc event 5
Dividend The Board expects to maintain the 43.2p per share annual dividend until the Group s earnings allow the Company to resume progressive dividends Interim dividend of 12.96p per share 30% of the prior year s total dividend of 43.2p per share 5 YEAR DIVIDEND DIVIDEND PER SHARE (p) 50 Interim Final 40 30 20 10 0 FY15 FY16 FY17 FY18 FY19 6
Revenue trends REVENUE BY REGION ( m) H1 FY19 UK 103.6 EU 41.8 ESMA Region 145.4 EMEA ex EU 20.6 APAC 74.1 Rest of World 94.7 OTC Leveraged 240.1 Nadex 8.4 Share Dealing & Investments 2.5 Group 251.0 H1 FY18 116.7 59.2 175.9 17.4 66.0 83.4 259.3 7.3 1.8 268.4 Change Reported Underlying (11%) (9%) (29%) (25%) (17%) (14%) 18% 4% 12% 8% 14% 7% (7%) (7%) 15% 39% (6%) Around 1,200 clients previously contracting with an entity in the ESMA region elected to contract with an entity which is not subject to the ESMA measures 7
Revenue trends OTC LEVERAGED REVENUE BY ASSET CLASS ( m) H1 FY19 H1 FY18 Change H2 FY18 FY18 Indices 111.6 103.1 8% 121.1 224.2 Shares 48.0 42.7 12% 52.7 95.4 FX 42.2 47.9 (12%) 46.4 94.3 Commodities 22.1 30.6 (28%) 24.4 55.0 Options 11.0 21.4 (49%) 21.7 43.1 Cryptocurrencies 5.2 13.6 (62%) 22.8 36.4 OTC Leveraged 240.1 259.3 (7%) 289.1 548.4 Indices and Shares represent 66% of OTC leveraged revenue in H1 FY19 FX impacted by lower trading volumes in the ESMA region Options impacted by the ESMA ban on binaries for Retail clients Interest in Cryptocurrencies has waned 8
Revenue trends QUARTERLY REVENUE BY REGION ( m) Q2 FY19 Q2 FY18 Change Reported Underlying Q1 FY19 Q1 FY18 Change Reported Underlying UK 49.7 57.9 (14%) (10%) 53.9 58.8 (8%) (7%) EU 17.3 29.3 (41%) (34%) 24.5 30.0 (18%) (16%) ESMA Region 67.0 87.2 (23%) (18%) 78.4 88.7 (12%) (10%) EMEA ex EU 10.7 8.4 28% 6% 9.9 9.0 10% 2% APAC 38.6 32.9 17% 10% 35.5 33.1 7% 5% Rest of World 49.3 41.2 20% 9% 45.4 42.1 8% 4% OTC Leveraged 116.3 128.4 (9%) (9%) 123.8 130.9 (5%) (5%) Nadex 4.5 3.8 15% 3.9 3.4 15% Share Dealing & Investments 1.3 0.9 39% 1.2 0.9 33% Group 122.1 133.2 (8%) 128.9 135.2 (5%) ESMA measures in effect throughout Q2 Impact of the ESMA measures, overall, in line with the Group s expectations 9
ESMA region Update on Professional client base As at the end of H1 FY19, we had received 22,744 applications, of which 5,675 have been accepted Of those not accepted: 60% continued to trade with IG 40% did not trade with IG APPLICATION STATUS BEHAVIOUR OF CLIENTS NOT ACCEPTED ACTIVE PROFESSIONAL CLIENTS 6,000 5,000 4,000 3,000 EU UK 2,000 25% Accepted 75% Not Accepted 40% Did not trade 1,000 60% Continued to trade 0 Q3 FY18 Q4 FY18 Q1 FY19 Q2 FY19 10
ESMA region Revenue and client trends Change REVENUE ( m) ESMA Professional ESMA Retail ESMA Region ACTIVE CLIENTS ( 000) ESMA Professional ESMA Retail ESMA Region H1 FY19 84.7 60.7 145.4 5.5 60.9 66.4 H1 FY18 175.9 78.3 Reported (17%) (15%) Underlying (14%) High quality Professional client base Around 5,500 active clients in H1 FY19 Average revenue per client > 15,000 Revenue per client overall, slightly lower than H1 FY18 REVENUE PER CLIENT ( ) ESMA Professional ESMA Retail 15,291 998 Reduction in number of active Retail clients due to ESMA measures ESMA Region 2,190 2,246 (2%) 11
ESMA region Revenue and client trends Change Change REVENUE ( m) Q2 FY19 Q2 FY18 Reported Underlying Q1 FY19 Q1 FY18 Reported Underlying ESMA Professional 46.3 38.4 ESMA Retail 20.7 40.0 ESMA Region 67.0 87.2 (23%) (18%) 78.4 88.7 (12%) (10%) ACTIVE CLIENTS ( 000) ESMA Professional 5.2 4.9 ESMA Retail 45.9 51.9 ESMA Region 51.1 64.3 (21%) 56.8 65.4 (13%) REVENUE PER CLIENT ( ) ESMA Professional 8,830 7,841 ESMA Retail 453 771 ESMA Region 1,311 1,356 (3%) 1,380 1,358 2% Trading activity of Retail clients impacted by the ESMA measures Revenue per Retail client in Q2 down 41% compared with Q1 69% of Q2 ESMA region revenue from Professional clients 12
ESMA region Impact of the product intervention measures ESMA REGION REVENUE ( m) Q2 FY19 ESMA REGION REVENUE ( m) Q2 FY18 Reported revenue 67.0 A Reported revenue 87.2 C Revenue from clients now outside ESMA region 4.2 If 5% moved outside ESMA region (4.4) Underlying revenue 71.2 B 82.8 D If 50% Professional (no change) - If 50% Retail (reduced by 34%) (14.1) Expected Post ESMA revenue 68.7 E Actual reduction in ESMA region revenue of 23% (A vs C) Expected underlying reduction 17% (E vs D) Actual underlying reduction 18% (B vs C) 13
EMEA ex EU & APAC Revenue and client trends Change EMEA ex EU H1 FY19 H1 FY18 Reported Underlying Revenue ( m) 20.6 17.4 18% 4% Active Clients ( 000) 5.4 4.9 10% Revenue per client ( ) 3,806 3,540 8% APAC Revenue ( m) 74.1 66.0 12% 8% Active Clients ( 000) 32.1 30.0 7% Revenue per client ( ) 2,312 2,200 5% Strong performance in Japan, driven by the introduction of new Knockout option product 14
Nadex, Share Dealing & Investments Revenue and client trends Nadex Revenue ( m) Active Clients ( 000) Revenue per client ( ) Share Dealing & Investments Revenue ( m) Active Clients ( 000) Revenue per client ( ) H1 FY19 8.4 12.4 673 2.5 37.0 67 H1 FY18 7.3 14.8 492 1.8 29.1 62 Change 15% (16%) 37% 39% 27% 8% NADEX Reduction in active clients reflects lower marketing spend Improved quality of client base reflected in higher revenue per client SHARE DEALING & INVESTMENTS 27% increase in active clients Multi-product clients Active Clients ( 000) 5.7 5.2 10% Multi-product clients increased by 10% 15
New client acquisition FIRST TRADES H1 FY19 H1 FY18 Change FY14 CLIENT COHORT REVENUE ESMA region Rest of World OTC Leveraged Revenue generated ( m) 8,300 6,326 14,626 21.8 11,666 6,361 18,027 22.4 (29%) (1%) (19%) (3%) 52m 59m 39m 35m 33m Revenue per new client ( ) 1,492 1,245 20% Continued to on-board new OTC leveraged clients Improvement in new client quality Column1 YEAR 1 YEAR 2 YEAR 3 YEAR 4 YEAR 5 FY10 CLIENT COHORT REVENUE 34m 31m 31m 29m Column2 Column1 0m YEAR 6 YEAR 7 YEAR 8 YEAR 9 16
Our client base Industry leading client tenure, creating sustainable business PROPORTION OF H1 FY19 REVENUE BY CLIENT TENURE 0-6 months 9% 51% of OTC leveraged revenue 39% 0-3 years from clients trading with IG for 6-12 months 12% more than 3 years 1-3 years 3-5 years 28% 14% 61% 3+ years 61% of OTC leveraged revenue generated from ESMA region Professional clients trading with IG for more than 3 years 5+ years 37% OTC LEVERAGED ESMA PROFESSIONAL 17
Operating expenses and variable remuneration BY COST TYPE ( m) H1 FY19 H1 FY18 Change BY ACTIVITY CATEGORY ( m) H1 FY19 H1 FY18 Change Fixed remuneration Advertising and Marketing Other costs Depreciation and amortisation Operating expenses 51.7 25.6 36.0 8.8 122.1 46.3 27.7 34.8 8.8 117.6 12% (8%) 3% - 4% Prospect acquisition Sales and client service Technology and innovation Business administration Operating expenses 36.9 16.1 47.4 21.7 122.1 39.0 15.4 43.3 19.9 117.6 (5%) 5% 9% 9% 4% Share based compensation Sales bonuses 4.4 2.7 3.9 1.8 13% 50% Headcount at period end 1,810 1,579 15% General bonuses 8.1 9.2 (12%) Variable remuneration 15.2 14.9 2% Total operating costs 137.3 132.5 4% 18
Income statement m H1 FY19 H1 FY18 Change m H1 FY19 H1 FY18 Change Net trading revenue Net interest on client money Betting duty and FTT Other operating income Net operating income Operating expenses Variable remuneration Total operating costs Operating profit Operating profit margin 251.0 3.0 (5.9) 1.7 249.8 (122.1) (15.2) (137.3) 112.5 44.8% 268.4 1.8 (2.7) 1.5 269.0 (117.6) (14.9) (132.5) 136.5 50.9% (6%) (7%) 4% (18%) (6.1% pts) Operating profit Net finance (cost) / income Profit before taxation Taxation Profit for the year Effective rate of tax Weighted av. number of shares Basic earnings per share Interim dividend per share 112.5 0.5 113.0 (21.6) 91.4 19.1% 367.4m 24.9p 12.96p 136.5 (0.3) 136.2 (28.1) 108.1 20.6% 366.6m 29.5p 9.69p (18%) (17%) (15%) (16%) 19
FY19 Outlook Revenue expected to be lower than in FY18 due to ESMA measures and strong H2 FY18 Total operating costs expected to be similar to the 290m in FY18 Net financing costs expected to be 1-2m in H2 FY19 Effective tax rate estimated to be 19.1% 20
Key Strengths and Growth Opportunities 21
Key strengths Continuity from past success and evolution for the future TECHNOLOGY & INNOVATION BRAND & REPUTATION Champion the client PURPOSE PEOPLE To empower informed, decisive, adventurous people to access opportunities in financial markets BUSINESS MODEL Lead the way CLIENTS STANDING with REGULATORS Love what we do 22
Professional client base IG - the natural home for Professional clients Platform designed for sophisticated traders High quality execution Personalised client service Utilising data science to drive decision making Further improvements to Professional client offer Preferred pricing scheme Exclusive new content offer with Real Vision Improved client service SLAs Targeting switchers 23
European strategy Mitigating risk, maximising opportunities Licence received from BaFin for IG Europe in September 2018 Brexit mitigation, ensuring we can continue to offer our existing products in all EU member states Provides opportunity to expand the European product set IG Europe will offer a full suite of products to its client base CFDs Launching Options in H2 FY19 Turbo warrants - addressable market 1.6 billion 24
European strategy Spectrum to go live May 2019 New trading venue for European clients Built using Existing, scalable technology stack 44 years of history pricing markets and hedging market risk 10 years of experience with Nadex, a CFTC regulated exchange Full control of the value chain Flexibility to innovate new products Low cost trading Better value for shareholders What it delivers for the client New standard in user experience 24/5 trading High quality client support Expand our distribution channels through broker relationships Our Broker Our Venue Our Liquidity provider CONTROL OF THE VALUE CHAIN 25
US Retail Foreign Exchange Dealer Significant opportunity in the US OTC FX market The US regulatory landscape has stabilised 90k US Retail traders, with only 3 competitors Licence granted in October 2018 We will offer Spot FX and Options We will compete on Best-in-class technology and customer experience Spreads We will utilise Daily FX, our leading FX news provider Live in January 2019 26
Looking forward Continuity from past success and evolution for the future IG has grown successfully by expanding its core business of providing CFDs to Retail clients Number of Billionaires 1 The market is changing To continue to grow, IG is evolving 4 key areas of opportunity Scalable technology platform Product innovation New markets New distribution channels 27
Outlook Continuity from past success and evolution for the future Confident in return to growth after FY19 Interim dividend of 12.96 pence per share 30% of total FY18 dividend, in line with policy Number of Billionaires 1 The Board expects to maintain the current annual dividend until the Group s earnings allow it to resume progressive dividends 28
Q & A For further information, please contact: IG Group Liz Scorer 020 7573 0727 FTI Consulting Ed Berry 020 3727 1046 29
APPENDICES 30
Appendix 1 Own funds OWN FUNDS FLOW ( m) H1 FY19 H1 FY18 MOVEMENT IN OWN FUNDS ( m) H1 FY19 H1 FY18 Operating profit Depreciation and amortisation Share based compensation Change in working capital Own funds generated from operations as % of operating profit Taxes paid Net own funds generated from operations 112.5 8.8 4.9 (26.1) 100.1 89% (19.9) 80.2 136.5 8.8 3.2 (9.5) 139.0 102% (22.2) 116.8 Net own funds generated from operations Net financing income Investments - Purchase of DailyFX - Capital expenditure - Purchase of own shares Pre-dividend increase in own funds Dividends paid Term loan Increase in own funds Own funds at start of the year Impact of movement in exchange rates Own funds at the end of period 80.2 0.1 - (9.6) (1.9) 68.8 (123.3) 100.0 45.5 746.1 3.0 794.6 116.8 - (3.0) (5.5) (4.6) 103.7 (84.0) - 19.7 614.3 (6.2) 627.8 31
Appendix 2 Balance sheet BALANCE SHEET ( m) 30 Nov 18 31 May 18 AVAILABLE LIQUIDITY ( m) 30 Nov 18 Goodwill Intangible assets Property, plant and equipment Fixed assets Liquid asset buffer Amounts at brokers Cash in IG bank accounts Own funds in client money Liquid assets Short term bank borrowing Client deposits IG Bank SA Title transfer funds Own funds Working capital Tax payable Deferred tax assets and liabilities Capital employed 108.1 45.5 15.1 168.7 82.1 398.9 393.4 43.1 917.5 - (34.0) (88.9) 794.6 (36.0) (18.0) 8.2 917.5 108.0 43.4 15.5 166.9 83.1 450.0 289.7 49.5 872.3 - (37.0) (89.2) 746.1 (62.4) (17.6) 9.1 842.1 Liquid assets Broker margin requirement Non-UK cash balances Own funds in client money Available liquidity at end of period of which is: Held as liquid asset buffer Interim dividend due CAPITAL EMPLOYED ( m) Shareholders funds Long term bank borrowings Capital employed 917.5 (314.5) (176.6) (43.1) 383.3 82.1 47.7 30 Nov 18 817.5 100.0 917.5 31 May 18 842.1-842.1 32
Appendix 3 Revenue analysis FY16 FY17 FY18 FY19 REVENUE ( m) H1 H2 FY H1 H2 FY H1 H2 FY H1 UK 106.4 116.0 222.3 115.0 108.0 223.0 116.7 132.8 249.5 103.6 EU 47.1 54.4 101.5 52.8 54.1 106.8 59.3 66.0 125.3 41.8 ESMA Region 153.4 170.4 323.9 167.8 162.1 329.9 175.9 198.9 374.8 145.4 EMEA ex EU 6.0 9.7 15.8 14.3 16.4 30.7 17.4 19.4 36.8 20.6 APAC 50.3 54.4 104.7 55.6 58.5 114.1 66.0 70.8 136.8 74.1 Rest of World 56.3 64.1 120.4 69.9 74.9 144.8 83.4 90.2 173.6 94.7 OTC Leveraged 209.8 234.5 444.3 237.6 237.0 474.6 259.3 289.1 548.4 240.1 Nadex 4.8 6.4 11.2 6.3 7.8 14.1 7.3 9.3 16.6 8.4 Share Dealing & Investments 0.3 0.5 0.8 1.0 1.4 2.4 1.8 2.2 4.0 2.5 Group 214.8 241.5 456.3 244.9 246.2 491.1 268.4 300.7 569.0 251.0 FY16 FY17 FY18 FY19 REVENUE ( m) Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 UK 54.5 51.9 60.3 55.7 53.0 62.0 51.1 56.9 58.8 57.9 69.2 63.7 53.9 49.7 EU 21.6 25.5 26.9 27.5 24.0 28.8 25.8 28.2 30.0 29.3 33.3 32.7 24.5 17.3 ESMA Region 76.1 77.3 87.2 83.2 77.0 90.8 77.0 85.1 88.7 87.2 102.5 96.4 78.4 67.0 EMEA ex EU 2.5 3.6 3.5 6.3 5.9 8.4 7.7 8.7 9.0 8.4 8.6 10.8 9.9 10.7 APAC 25.1 25.2 28.5 25.9 25.2 30.4 28.2 30.3 33.1 32.9 36.4 34.4 35.5 38.6 Rest of World 27.5 28.8 31.9 32.2 31.0 38.9 35.9 39.0 42.1 41.2 45.0 45.3 45.4 49.3 OTC Leveraged 103.7 106.1 119.1 115.4 108.0 129.7 112.8 124.2 130.9 128.4 147.5 141.6 123.8 116.3 Nadex 2.2 2.6 2.6 3.8 3.0 3.3 3.9 3.9 3.4 3.8 4.3 5.0 3.9 4.5 Share Dealing & Investments 0.1 0.1 0.2 0.3 0.5 0.5 0.6 0.8 0.9 0.9 1.1 1.1 1.2 1.3 Group 106.0 108.9 122.0 119.5 111.4 133.4 117.4 128.8 135.2 133.2 152.9 147.7 128.9 122.1 33
Appendix 4 Client analysis 1 FY16 FY17 FY18 FY19 ACTIVE CLIENTS ('000) H1 H2 FY H1 H2 FY H1 H2 FY H1 UK 46.1 48.0 59.9 53.0 48.1 64.7 47.2 47.3 59.9 39.9 EU 27.3 30.5 37.0 31.5 32.6 40.3 31.1 31.6 39.6 26.5 ESMA Region 73.4 78.4 97.0 84.4 80.6 105.1 78.3 78.9 99.4 66.4 EMEA ex EU 3.2 3.7 4.6 4.4 4.7 5.6 4.9 5.1 6.5 5.4 APAC 30.1 29.3 36.4 30.3 29.8 37.4 30.0 31.8 38.6 32.1 Rest of World 33.3 33.0 40.9 34.7 34.5 43.0 34.9 36.9 45.1 37.5 OTC Leveraged 106.7 111.5 137.9 119.1 115.1 148.0 113.3 115.8 144.6 103.9 Nadex 9.1 10.6 15.2 13.0 15.8 22.3 14.8 14.8 22.0 12.4 Share Dealing & Investments 4.0 6.7 6.7 13.3 20.4 20.4 29.1 35.5 35.5 37.0 (Multi-product clients) (1.5) (2.1) (2.4) (3.3) (4.3) (5.0) (5.2) (6.0) (6.9) (5.7) Group 118.2 126.7 157.5 142.2 147.1 185.8 151.9 160.3 195.2 147.6 FY16 FY17 FY18 FY19 ACTIVE CLIENTS ('000) Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 UK 39.1 36.1 40.0 37.4 43.4 42.2 39.6 39.8 39.2 38.6 40.8 37.4 34.0 31.2 EU 21.9 22.4 24.9 24.6 25.3 26.6 26.9 27.5 26.1 25.7 27.0 25.5 22.8 19.9 ESMA Region 60.9 58.6 64.9 62.0 68.7 68.8 66.5 67.2 65.4 64.3 67.8 62.9 56.8 51.1 EMEA ex EU 2.5 2.7 2.9 3.0 3.3 3.7 3.9 4.0 4.0 4.0 4.4 4.1 4.4 4.5 APAC 25.9 24.6 25.2 24.4 25.6 25.6 25.0 25.3 25.2 25.5 27.3 26.3 26.3 27.6 Rest of World 28.4 27.3 28.1 27.4 28.9 29.3 28.9 29.4 29.2 29.5 31.7 30.4 30.7 32.2 OTC Leveraged 89.3 85.8 93.0 89.4 97.7 98.1 95.4 96.6 94.6 93.8 99.5 93.3 87.5 83.3 Nadex 6.2 6.2 6.6 7.6 9.0 8.7 10.3 11.2 10.3 10.0 10.5 10.2 9.1 8.6 Share Dealing & Investments 3.4 4.0 4.9 6.7 10.3 13.3 16.4 20.4 24.2 29.1 33.7 35.6 37.2 37.0 (Multi-product clients) (1.3) (1.3) (1.5) (1.8) (2.5) (2.8) (3.3) (3.8) (4.1) (4.6) (5.2) (5.0) (4.9) (4.8) Group 97.6 94.7 103.0 102.0 114.5 117.3 118.9 124.4 124.9 128.3 138.5 134.1 129.0 124.1 1 Unique clients active in each period 34
Appendix 5 Revenue per client analysis FY16 FY17 FY18 FY19 REVENUE PER CLIENT ( ) H1 H2 FY H1 H2 FY H1 H2 FY H1 UK 2,307 2,419 3,710 2,171 2,248 3,446 2,470 2,807 4,166 2,594 EU 1,726 1,788 2,742 1,677 1,660 2,649 1,906 2,093 3,168 1,580 ESMA Region 2,091 2,173 3,340 1,987 2,011 3,140 2,246 2,521 3,769 2,190 EMEA ex EU 1,888 2,596 3,461 3,278 3,537 5,514 3,540 3,797 5,655 3,806 APAC 1,671 1,856 2,879 1,834 1,959 3,051 2,200 2,226 3,543 2,312 Rest of World 1,692 1,940 2,944 2,015 2,172 3,370 2,388 2,444 3,848 2,527 OTC Leveraged 1,966 2,104 3,223 1,995 2,068 3,207 2,290 2,497 3,794 2,311 Nadex 527 607 734 480 494 630 492 631 756 673 Share Dealing & Investments 71 80 122 73 68 115 62 63 113 67 Group 1,818 1,907 2,897 1,722 1,680 2,643 1,767 1,876 2,915 1,700 FY16 FY17 FY18 FY19 REVENUE PER CLIENT ( ) Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 UK 1,396 1,436 1,508 1,488 1,220 1,469 1,291 1,430 1,498 1,502 1,694 1,703 1,585 1,593 EU 987 1,135 1,081 1,120 947 1,082 959 1,028 1,147 1,138 1,235 1,283 1,076 868 ESMA Region 1,249 1,321 1,344 1,342 1,120 1,320 1,157 1,266 1,358 1,356 1,512 1,533 1,380 1,311 EMEA ex EU 1,006 1,327 1,179 2,079 1,748 2,278 1,989 2,165 2,235 2,077 1,969 2,665 2,234 2,359 APAC 968 1,026 1,129 1,063 983 1,188 1,126 1,197 1,316 1,291 1,331 1,308 1,351 1,397 Rest of World 971 1,055 1,135 1,174 1,072 1,325 1,242 1,330 1,443 1,398 1,419 1,489 1,477 1,533 OTC Leveraged 1,161 1,236 1,281 1,290 1,105 1,321 1,182 1,285 1,384 1,369 1,482 1,518 1,414 1,396 Nadex 349 417 401 492 335 373 381 345 333 385 411 493 429 516 Share Dealing & Investments 39 37 49 45 45 39 38 37 35 33 33 31 31 36 Group 1,085 1,149 1,185 1,171 974 1,137 987 1,035 1,082 1,038 1,104 1,102 999 984 35
Appendix 6 Regulatory capital m Shareholders funds Less foreseeable declared dividends Less goodwill Less intangible assets Less deferred tax assets Capital resources Pillar 1 Risk Exposure Amounts (REA) Total Pillar 1 REA Capital ratio Required capital ratio Pillar 1 minimum Individual Capital Guidance (ICG) ICG requirement Plus combined buffer requirement Total requirement % Total requirement - m Capital headroom - m 30 Nov 18 817.5 (47.7) (108.1) (45.5) (8.4) 607.8 1,818.9 33.4% 8.0% 9.4% 17.4% 2.8% 20.2% 367.4 240.4 30 Nov 17 Workings 750.8 (35.6) (107.8) (46.2) (8.6) 552.6 A 1,951.8 B 28.3% A / B = C 8.0% D 9.4% E 17.4% D + E = F 1.6% G 19.0% F + G = H 370.8 H x B = I 181.8 A - I 36
Appendix 7 Revenue optimisation REVENUE VARIABILITY 1 ( m) Revenue 3.0 Coefficient 2.5 2.5 2.0 2.0 1.5 1.0 0.5 Daily revenue (60 day roll avg) Coefficient of variability (60 day roll avg) 1.5 1.0 0.5 0.0 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 0.0 1 Excluding impact of Swiss franc event (Jan 15) 37