IG Group Holdings plc · LSE:IGG
IG — H1 2007 Earnings Presentation
17 slides from IG's earnings presentation, January 2007
Slide 1: Results presentation: Six Months Ended 30 November 2006
Results presentation Six Months Ended 30 November 2006 Tim Howkins, CEO Steve Clutton, Finance Director
Slide 2: Introduction: Highlights
Introduction Highlights Turnover up 44% Earnings per share up 43% All parts of business contributed to growth Proposed interim dividend of 2.0p per share (up 33%) Period of significant investment in infrastructure Current trading strong Initiatives in place to drive growth -2-
Slide 3: Profit and loss
Profit and loss Year Six months ending ending 30 November 31 May 2006 2005 2006 Strong revenue and profit growth continues £'m £'m £'m Turnover 55.7 38.6 +44% 89.4 Betting duty (2.9) (1.3) (1.6) Betting duty varies with client 52.8 37.3 +42% 87.8 performance Interest on client money 3.1 2.1 +48% 5.0
Slide 4: Revenue by business line
Revenue by business line 2005 2006 2007 H1 H2 Total H1 H2 Total H1 Growth £'000 £'000 £'000 £'000 £'000 £'000 £'000 Financial UK & Europe 21,178 25,437 46,615 27,889 38,315 66,204 41,536 +49% Australia & Singapore 1,841 1,935 3,776 3,630 5,295 8,925 5,059 +39% Binaries 2,541 2,409 4,950 2,701 2,495
Slide 5: Cost base
Cost base Year Year ending 31 May 2006 ending 31 May 2007 FY H1 H2 H1 Investing for growth £'000 £'000 £'000 £'000 – New data centres Salaries 15,326 7,507 7,819 9,940 – Resilience Bonuses 8,695 3,121 5,574 3,709 – Headcount increase LTIP and SIP 1,696 627 1,069 911 Advertising and marketing 3,321 1
Slide 6: UK - financial
UK - financial Strong growth continues Number of client transactions¹ 700,000 Strong account opening 600,000 UK CFD continues CAGR: 55% 500,000 UK financial spread betting Client recognition of IG as 400,000 UK leader 300,000 Increasing levels of 200,000 introduced CFD business 100,000 Strong growth
Slide 7: Financial
Financial Financial business becoming more balanced Quarterly account opening 5,500 UK spread betting client recruitment up 28% on corresponding period 5,000 CFD 4,500 UK financial spread Global CFD client recruitment exceeded betting UK spread betting in Q2 4,000 3,500 Singapore, Germany and Italy
Slide 8: CFDs – a diverse international business
CFDs – a diverse international business Non-UK revenues growing strongly UK CFD revenue by location of client IG’s London-based CFD business has clients in some 70 countries UK W estern Europe Ireland Africa Growth in revenues generated from clients based Americas Eastern Europe outside UK accelerat
Slide 9: Australia - Financial
Australia - Financial Return to strong growth following muted Q1 Number of clients dealing - Australia (monthly) Number of transactions¹ 2,800 90,000 2,600 2,400 80,000 2,200 70,000 2,000 1,800 60,000 1,600 50,000 1,400 1,200 40,000 1,000 30,000 800 600 20,000 400 10,000 200 0 0 O 02 O 03 O 04 O 5 O
Slide 10: Revenue per client
Revenue per client H1 05 H2 05 H1 06 H2 06 H1 07 Turnover 1 £'000 £'000 £'000 £'000 £'000 UK CFD (inc. FX) 4,267 5,117 6,091 8,938 10,959 UK fin. spread betting 16,911 20,320 21,798 29,377 30,577 Australia & Singapore 1,841 1,935 3,630 5,295 5,059 Continued momentum in spread betting Total financial
Slide 11: Risk management and quality of earnings
Risk management and quality of earnings Income volatility remains low 500,000 3.00 450,000 Daily revenue (60 day Volatility of income remains 2.50 400,000 rolling average) low Revenue volatility (60 day 350,000 coefficient of variability) 2.00 No loss making days in 2006 300,000 250,000 1.50 200,000
Slide 12: Sports
Sports Profitable revenue growth and cash generative Good growth over last 18 months H1 06 H1 07 Spread betting revenue growth aided by soccer £'m £'m World Cup in June 2006 Spread betting 3.8 4.7 +21% Market making on exchanges - 0.7 Market Making on betting exchanges has acquired scale Other fixed
Slide 13: TradeSense
TradeSense Enhancing the recruitment, activation and retention of clients within our existing retail financial businesses Available to all new clients – Six week introduction to trading – Educational materials – Lower minimum stakes Ongoing resources – Online education – Seminars – Helpline Aiming t
Slide 14: IGforex.com
IGforex.com IG’s first step in addressing the global retail FX market Global Retail FX an attractive growth market for IG Regulation in large parts of the world permit FX but not CFDs FX is now a significant component of spread betting revenues, but not yet of CFD revenues IGforex.com an FX-only off
Slide 15: International expansion
International expansion A key focus in 2007 Continuing to build Italian and German operations – Signing up introducers for German office – Seminars and investment shows – Direct advertising Preparing for MiFID – Regulatory barriers are lowered from November 2007 provides opportunity – Able to market
Slide 16: Outlook
Outlook Business well positioned to deliver further growth Continuing strong growth from UK and Australia Singapore office provides springboard into Asia European roll-out has begun Confident about growth prospects - 16 -
Slide 17: Slide 17