Financial Services Technologies - CORPORATE PRESENTATION CORPORATE PRESENTATION We got IT - Boersengefluester
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CORPORATE PRESENTATION
CORPORATE PRESENTATION
flatex AG | August 2019
flatex AG | February 2020
Financial Services Technologies
We got IT
Operational key figures and guidance 2019e
Operational key figures at a glance (pre-acquisition of DEGRIO)
Number of Number of exchanges Annualized Executed Annualized Executed Securities Customer
Customers and OTC-partners Trades Trade Volume under Custody Cash Deposits
B2C B2B
>380 k > 50 68 ~12.5 m ~150 bn ~13 bn >EUR 900 m
Credit Book Average Interest Rate TIER-1 Return on Equity Offices Employees
(collateralized) (Loan Book) Capital (before Tax) Berlin
Willich
Neuss Dusseldorf
Leipzig
Andernach Zwickau
Kulmbach
Frankfurt a.M. Vienna
(HQ)
>EUR 400 m ~4.0 % p.a. ~EUR 70 m ~25 % 10 >520
3 flatex Aktiengesellschaft – Financial Services Technologies
Track record and mid-term ambition
Reorganisation International
of Group Expansion – Building Europe’s
structure and flatex to leading online
new acquire
segmentation brokerage business
Acquisition of DEGIRO
service provider Implement into Fin and flatex+DEGIRO
technology based Tech units
XCOM/biw to Successful
control cost
structure and set- Restructuring of
lending and
redeveloping Increased expansion to NL 300 More than 1 million
group treasury with the investor with more than clients
up tech in-house
operations and potential to relations
expertise 30,000 new
implementation generate an activities
Implemented high of IFRS additional EUR
Implementing
client account
opening
More than 35 million
class management Reporting 10+ million transactions
B2B strategy:
team and
subsequent Boost of organic Improved B2C the standard Doubled number
restructuring growth of
existing B2C
product portfolio
with Morgan
banking platform
for private and
of new client to More than 250 billion
actions approx. 80,000 annual trading flow
business Stanley ETP specialist banks
150
Sold CeFDex to partnership
Commerzbank to 133
reduce risk 119.1 *
107.0
structure (strategic
95.0 EUR million
partnership)
75.2 80 Net Sales
EBITDA
42.4 40,0
30.6 32.1 Net Profit
22.7 19.7
-8.0
2014a 2015a 2016a 2017a 2018a 2019e mid term ambition
4 flatex Aktiengesellschaft – Financial Services Technologies * Adjusted for non-operational and non-EBIDTA revenue accounting effect of 6m EUR in 2018
flatex - Executive Committee
Jörn Engelmann Steffen Jentsch Jens Möbitz Dr. Benon Janos
CRO Co-Head IT Head Back Office Head B2B
flatex Bank MD flatex Bank MD flatex Bank MD flatex Bank
Stephan Simmang Frank Niehage Muhamad Chahrour Niklas Helmreich
Co-Head IT CEO flatex AG CFO flatexAG Head B2C
Chief Technology Officer CEO flatex Bank MD flatex Bank MD flatex Bank
ALL EXCO MEMBERS ARE PART OF THE FOUR-YEAR OPTION PLAN
5 flatex Aktiengesellschaft – Financial Services Technologies
Business Model
Key Issues in Banking
Digitisation increases the pressure on Start-ups: New competitors in the market
integration of customers and processes: lead to a decomposition of the value chain in
Despite the support of top management, banking
many companies have not developed an
overall strategy yet
Business Analytics is gaining importance in Cost structures to the test: The majority of
sales: More “soft” customer data (from more banks are reviewing their cost structure - one
sources) exploiting the potential of customer focus is IT and possible consolidations
data and more effective customisation of
products
Regulatory: The banking supervision’s Growing market demands affect all banks
(ECB, NFSA) demand on the management of equally. The developed solutions here in the
banks are increasing (IT security law, MIFID undifferentiated area will help banks
II, etc.) to focus on their core competencies in banking
7 flatex Aktiengesellschaft – Financial Services Technologiesflatex - business model of flatex and ViTrade
(c75% REVENUE CONTRIBUTION, c35% EBITDA MARGIN)
Self-developed core banking system (FTX:CBS) with outstanding expertise in transaction banking and
fully fledge bank with automatized settlement and clearing processes
Fastest growing online brokerage business in Germany and Austria,
>300k retail clients doing >12.5m transactions with transaction flow of >EUR 150bn p.a.
Market share of >25% in Germany and >50% in Austria in terms of online brokerage transactions
(total est. # of transactions: 50-55m in Germany, 2-3m in Austria)
Most trading-active client pool in the brokerage market
(our clients: avg. 40-50 trades p.a. vs. market: avg. 8-12 trades p.a.)
Dedicated brokerage offering with focused marketing strategy minimizes operating expenses
(cost per client acquisition less than EUR 100 vs. EUR 300-500 CPA at competitors)
8 flatex Aktiengesellschaft – Financial Services Technologiesflatex impressions 9 flatex Aktiengesellschaft – Financial Services Technologies
flatex - our competitive edge: the triple „P“
Unlimited trading possibilities with a flat pricing model of max. EUR 5.90 per transaction –
regardless of type of asset (stocks, bonds, ETPs, ETFs etc.) and transaction amount
Price Competitive technology edge due to self-developed, highly scalable security ordering/
settlement infrastructure ensures sustainable cost leadership with cost per trade (CPT) of
currently less than EUR 1.44
Top notch product offering including equities, bonds, ETPs, ETFs and mutual funds
Market leading ETP offering of Morgan Stanley, Commerzbank, Goldman Sachs, UBS, BNP
Product Paribas, HSBC, Vontobel, and other products
Economies of scale: each additional trade reduces cost per trade settlement –
doubling the # of transactions reduces CPT by >40%
Trading platform only – no research, recommendation or intelligence – avoiding regulatory
administration and costs
Platform
Designed by traders for traders
10 flatex Aktiengesellschaft – Financial Services Technologiesflatex - split of total number of trades
Exchange Traded Funds
17%
Shares and Bonds
37%
Exchange Traded Products,
FX/Commodities/CFD etc.
47%
11 flatex Aktiengesellschaft – Financial Services Technologiesflatex - case study: Prime ETP distributor
German ETP market size notional of around EUR 70bn pa – flatex AG with >15% distribution stake
In the past: product issuing banks kept 90% of the revenue pool - 10% to product distributor
>75,000 flatex-select products issued by Morgan Stanley that clients can trade at no cost
BANKS… …ISSUE ETPs… …OFFERED AT FLATEX… …TRADED BY CLIENTS
Market Revenue generation for
90 : 10 issuing bank through:
standard in
the past: split • Inherent interest
component
Partnerships 50 : 50 • Bid-ask spread
today:
split
REVENUE POOL
12 flatex Aktiengesellschaft – Financial Services Technologiesflatex - ETP Premium Partner Model
Goldman Sachs
Morgan Stanley
Commerzbank
UBS
Vontobel
BNP Paribas
HSBC
13 flatex Aktiengesellschaft – Financial Services Technologiesflatex - development of brokerage KPIs
Growing Number of B2C customers (thousand) Total Number of Trades flatex Bank (million)
12.5
290.0
11.3
253.8 10.5
10.1
212.0
176.6
7.7
Source: FinTech Group
145.5
Source: flatex AG
FY 2014 FY 2015 FY 2016 FY 2017 FY 2018 FY 2014 FY 2015 FY 2016 FY 2017 FY 2018
14 flatex Aktiengesellschaft – Financial Services Technologiesflatex - maturity profile of our trading customers
25 % of the trades
representing customers
who are inbetween
1-3 years with FTX
63 % of the trades representing
customers
who are more than
three years with FTX
12 % of the trades
representing customers
who are less than
a year with FTX
15 flatex Aktiengesellschaft – Financial Services Technologiesflatex - volatility is key driver of transactions and revenues
Volatility has reawakened after reaching 20-year record low in 2017 with significant upside potential - resulting in two consecutive
record months Jan and Feb 2018 (+40% transactions compared to same period 2017) with strong revenue effect
HIGH CORRELATION BETWEEN MARKET VOLATILITY AND CLIENTS’ ACTIVITY WITH STRONG UPSIDE POTENTIAL
Brexit Trump Jan/Feb Italian Budget
vote election 2018
Increase in volatility led to record Trades /
transaction number of >2 million Total # of clients
in Jan/Feb 2018 +40% FinTech Group AG
vs. Jan/Feb 2017
VDAX
04.01.2016
04.04.2016
04.07.2016
04.10.2016
04.01.2017
04.04.2017
04.07.2017
04.10.2017
04.01.2018
04.04.2018
04.07.2018
04.10.2018
04.01.2019
16 flatex Aktiengesellschaft – Financial Services TechnologiesInvestment case - DEGIRO
flatex and DeGiro - Overview
2019E 2019E
306k clients 470k clients
11.5m transactions 18.6m transactions
3 countries 18 countries
>500 employees >200 employees
Founded in 2005 in Germany Founded in 2007 in Netherlands as fund management
Exchange listed in Germany (ISIN DE000FTG1111) company
Since 2006: flatex retail brokerage Private, non-listed Dutch company
Since 2014: new management team Since 2011: DeGiro brokerage to professional clients
2014: Acquisition of IT provider and bank Since 2013: DeGiro retail brokerage
German bank with EU passport Asset-light model, no banking license
Proprietary IT bank system, highly vertically integrated Proprietary IT and trading engine
18 flatex Aktiengesellschaft – Financial Services Technologiesflatex and DeGiro - Unique combination
• Strong regulatory experience • Presence in 18 countries with one
• Full German banking license with EU central infrastructure & market intelligence
passport Highly • Rapidly expanding client base in Europe
• Strong expertise in IT (proprietary IT complementary • Access to nearly 50 foreign exchanges
banking system) • Proprietary trading engine
• Independent of external IT service • Efficient execution, clearing and settlement of
providers Very limited the trading flow
• Outstanding product portfolio overlap • Options and Futures product lines
• Extensive network of exchange and • Streamlined operations
product partners (esp. ETP) (low-cost service center in Sofia)
• Experienced management team
19 flatex Aktiengesellschaft – Financial Services Technologiesflatex and DeGiro - Unique combination
#1 Largest pan- Full value chain in-house
30m+ trades
in 2019E European retail Cost and innovation leadership
in 18 European
countries broker Highly comprehensive product/exchange portfolio
Germany Joint client growth rate of over 200.000 clients in 2019E
>20% market share
Further countries (both DeGiro and flatex each with strong organic
Austria with a leading and client growth rate of greater 30%)
>40% market share rapidly growing
market position
Netherlands Full product range with access to ~50 foreign
>35% market share
exchanges: stocks, bonds, ETPs, ETFs, funds,
…and presence in further 11 European countries options & futures, CFDs, FX
20 flatex Aktiengesellschaft – Financial Services Technologiesflatex and DeGiro - Synergies at a glance
One banking license
Trading flow and one corporate
One flow infrastructure
One bank
EUR 200b annually
Synergies: €15-20m >EUR 750m daily Two brands Synergies: €3-5m
Central architecture Access to 1m
customers
One IT (based on Java /C++) One firm
Combined data center Combined marketing/
Synergies: €10-15m bargaining power Synergies: €3-5m
Annual synergies of EUR >30m
21 flatex Aktiengesellschaft – Financial Services TechnologiesDeal structure and timeframe
Deal Structure Acquisition price: EUR 250m (on a cash and debt free basis)
thereof EUR 60m paid in cash
thereof EUR 190m in flatex shares − Financing through a capital increase against a
issued to existing DeGiro contribution in kind (“Sachkapitalerhöhung”) with
shareholders exclusion of subscription rights to existing flatex
shareholders
− 7.5m new shares issued at reference price of EUR
25.33/share from flatex authorized capital 2017 &
2018
Indicative timeframe
Acquisition of 9.4% stake in DeGiro B.V. with signing
Acquisition of remainder 90.6% after regulatory approval at closing
Expected completion of 100% at the beginning of Q2 of 2020
22 flatex Aktiengesellschaft – Financial Services TechnologiesShareholder structure
As of December 2019 Post transaction
4,3% flatex *
management
9,9% heliad 27.7% newly issued shares
De Giro founders team
and employees
15 beneficiaries
23,6% GFBK
(entity of 19.6m shares 27.1m shares
flatex
founder) outstanding outstanding
3,1% flatex
management *
7.2% heliad
62,2% free float 45.0% free float
17.1% GFBK
(entity of flatex
* Excluding additional approx. 450k management options exerciseable over next three years founder)
23 flatex Aktiengesellschaft – Financial Services Technologiesflatex and DeGiro combined - Key metrics
Standalone 2019E combined 2019E illustrative, pro forma
EUR 60m EUR 133m Revenue EUR 193m
EUR 13.7m EUR 40.3m EBITDA EUR 54m
EUR 10m EUR 18m Net Profit EUR 28m
EUR 26m EUR 186m Equity EUR 212m
470k 306k Brokerage Clients 776k
18.6m 11.5m Transactions 30.1m
24 flatex Aktiengesellschaft – Financial Services TechnologiesTwo strong partners combine forces
Mid Term Ambition
Revenue EBITDA EPS
EUR 300m EUR 150m EUR 3.00
25 flatex Aktiengesellschaft – Financial Services TechnologiesAnnex
B2B Business
B2B - fully modular self-developed core banking platform
(c25% REVENUE CONTRIBUTION, c20% EBITDA MARGIN)
Layers within the FTX:CBS banking platform Technology
HTML
Sales
Platform OADO Online branch Entax-BO-Client Objektive-c (iOS)
Java (Android)
Mobile App CRM / Sales Trading FE REST / SOAP
HA
Production APIs
Wildfly
Platform Account/Depot Srv. Securities Payment Service Cards
Java, Go
C++
Deposit Transaction Service Credit Facilitation Master Data
SAP ASE
Regulatory & Wildfly
Steering Accounting Controlling Tax Compliance
Java
Platform
Regulat. Reporting C++
Mgmt. Reporting DWH / BI Risk / Liq. Mgmt
(Abacus) SAP ASE
APIs PostgreSQL
Support
Platform ABACUS
Ticketing Batchdata Service Portal Oracle
ASCII, XLS / SFTP
InfoZone / WM Shared Services Archive FIX / EBICS /SWIFT
28 flatex Aktiengesellschaft – Financial Services TechnologiesB2B - shared services: banking processes and platform
POSITION FLATEX’S AG BANKING PLATFORM AS THE STANDARD PLATFORM FOR PRIVATE AND SPECIALIST BANKS
Regulatory Umbrella
flatex flatex Bank BPO Banks
Application Use Cases Fintech Broker Corporates Payment
…
Start-ups Instutions
API
API Layer API
flatex Platform
Software + Banking
BANKING AS A SOFTWARE AS A
SERVICE SERVICE
flatex
Data centre DATA CENTRES ISO 27001
Financial System
Infrastructure SEPA SWIFT EXCHANGES …
29 flatex Aktiengesellschaft – Financial Services TechnologiesB2B - client excerpt and case studies Unique combination of technology and banking know-how enables our clients to build top-class financial products and services Key partner Notable clients and partners flatex AG developed, flatex AG provides its high maintains and runs LOX, the ETP frequency payment platform to OTC system for Deutsche Bank Deutsche Post Rentenservice AG and Commerzbank AG - 3bn which takes care of 26m pension price feeds and 50k transactions payment transactions every - per day. month. flatex AG was chosen to set-up flatex AG is the central IT service the technological infrastructure provider for the Federal for digital online retail banks in Association of German Banks, Germany and Austria including providing key technology providing several respective platform to run the German regulatory banking processes. Deposit Guarantee Scheme. 30 flatex Aktiengesellschaft – Financial Services Technologies
Corporate information
flatex AG - our stock
Shares outstanding: 19,595,637 STOCKPRICE DEVELOPMENT L6M
35 Dec 2019
Options outstanding: max. 0.5m
PT EUR 33.00 Buy
Berenberg
Market capitalisation: EUR 480m (as of 2019-12-31)
Dec 2019
PT EUR 29.00 Buy
Open Market / SCALE 30
Commerzbank
Listed: Deutsche Börse /
Frankfurt Stock Exchange
ISIN: DE000FTG1111
25
Bloomberg: FTK GR Equity Dec 2019
PT EUR 39.00 Buy
Hauck & Aufhäuser
20 Dec 2019
PT EUR 42.00 Buy
Stock covered by M.M. Warburg
15
01.06.19 01.07.19 01.08.19 01.09.19 01.10.19 01.11.19 01.12.19
32 flatex Aktiengesellschaft – Financial Services Technologiesflatex AG - key milestones
1988 2010
Company founded in Langen Full white label Retail Bank operations begins (full BPO)
2015
1997 Migration of mwb fairtrade from caceis to FinTech Group Bank for
Full BPO IT provider for bankenverband order routing and securities settlement (1.4 m trades/year)
ever since
2001 2017
Development and full BPO provider Large Austrian bank selected FinTech Group as full BPO
for pan-European expansion for Austrian and German digital expansion
(core bank system FTG:CBS:R1 is born)
2006 2019
FinTech Group Bank AG will be renamed to flatex Bank AG
Best German online broker goes live
2009 2019
L.O.X. OTC certificate platform developed (limit order FinTech Group AG will be renamed to flatex AG
system connects DB/Coba flow to 22 pan-European
brokers)
33 flatex Aktiengesellschaft – Financial Services TechnologiesFinancial Calendar 2020
Upcoming Investors’ Conferences & Roadshows 2020
Feb Investor Roadshows Lugano, Milan, Barcelona, Madrid, Salt Lake City,
Chicago, Montreal, New York, Brussels, Amsterdam
May Goldman Sachs European Small and Mid Cap Symposium London,
12.05.20 MainFirst SMID Cap Forum Frankfurt
Sep Stifel Cross Sector Insight Europe Conference London
34 flatex Aktiengesellschaft – Financial Services TechnologiesContact
Muhamad Chahrour flatex Aktiengesellschaft
CFO / Investor Relations Rotfeder-Ring 7
60327 Frankfurt/Main, Germany
Phone: +49 (0)69 4500010 www.flatex.com
Mail: ir@flatex.comYou can also read
