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CORPORATE PRESENTATIONFinTech Group AG | January 2019
Financial Services TechnologiesWe got IT
Operational key figuresand guidance 2019e
Number of
Customers
Number of exchanges
and OTC-partners
Executed
Trades
Executed
Trade Volume
Securities
under Custody
Customer
Cash Deposits
68 6.6 m EUR > 40 bn EUR 12.1 bn EUR 931 m
Operational key figures at a glance*
3THE FINTECH GROUP
Credit Book
(collateralized)
Average Interest Rate
(Loan Book)
TIER-1
Capital
Return on Equity p.a.
(before Tax 2017)
Offices Employees
EUR 195 m 4.5 % p.a. EUR 54.1 m 25 % 9 481
* As of 30.06.2018
Berlin
Zwickau
Willich
Andernach
Frankfurt a.M. (HQ)
Kulmbach
Dusseldorf
Vienna
275 k > 50
B2C B2B
Neuss
4THE FINTECH GROUP
Our guidance 2019e
138 EUR million revenues
27 % EBITDA Margin (post growth investments)(34 % EBITDA Margin / pre growth investments)
22.7
75.2
95.0
107.0
>120.0
>138.0
-8.0
19.7
30.6 32.1
>40.0 > 27%
-7.7 -2.2
12.316.8
>24.0
2016a 2017a 2018e 2019e
Net Sales
EBITDA
Net Profit
5THE FINTECH GROUP
Track record and guidance 2019e
Acquisition of service provider XCOM/biw to control cost structure and set-up tech in-house expertise
Implemented high class management team and subsequent restructuring actions
Sold CeFDex to Commerzbank to reduce risk structure (strategic partnership)
Restructuring of group operations and implementation of IFRS Reporting
Boost of organic growth of existing B2C business
EUR million
Implement technology based lending and redeveloping treasury with the potential to generate an additional EUR 10+ million
Improved B2C product portfolio with Morgan Stanley ETP partnership
Reorganisationof Group structure and new segmentation into Fin and Tech units
Increased investor relations activities
Implementing B2B strategy: the standard banking platform for private and specialist banks
o Continue strong growthof number of settled transactions
o International Expansion –flatex goes Europe
FinTech Group - Executive Committee
6THE FINTECH GROUP
Steffen Jentsch Stephan Simmang Dr. Benon Janos Frank Niehage Muhamad Chahrour Bernd Würfel Niklas Helmreich
Co-Head ITMD FinTech Group Bank
Co-Head IT Head B2BMD FinTech Group Bank
CEO FinTech GroupCEO FinTech Group Bank
CFO FinTech GroupMD FinTech Group Bank
Deputy CEO FinTech Group Bank Head B2CMD FinTech Group Bank
ALL EXCO MEMBERS ARE PART OF THE FOUR-YEAR OPTION PLAN
Business Model
8THE FINTECH GROUP
Key Issues in Banking
Digitisation increases the pressure on integration of customers and processes:
Despite the support of top management, many companies have not developed an overall strategy yet
Start-ups: New competitors in the market lead to a decomposition of the value chain in banking
Business Analytics is gaining importance in sales: More “soft” customer data (from more sources) exploiting the potential of customer data and more effective customisation of products
Cost structures to the test: The majority of banks are reviewing their cost structure -one focus is IT and possible consolidations
Regulatory: The banking supervision’s (ECB, NFSA) demand on the management of banks are increasing (IT security law, MIFID II, etc.)
Growing market demands affect all banks equally. The developed solutions here in the undifferentiated area will help banks to focus on their core competencies in banking
B2C - business model of flatex and ViTrade
9THE FINTECH GROUP
(c75% REVENUE CONTRIBUTION, c35% EBITDA MARGIN)
Self-developed core banking system (FTG:CBS) with outstanding expertise in transaction banking and fully fledge bank with automatised settlement and clearing processes
Fastest growing online brokerage business in Germany and Austria, >200k retail clients doing >9m transactions with notional amount of >EUR 65bn 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(FinTech clients: avg. 40 - 50 trades p.a. vs. market: avg. 8-12 trades p.a.)
Dedicated brokerage offering with focused marketing strategy minimises operating expenses (cost per client acquisition EUR 100 CPA vs. EUR 300-500 at competitors)
Platform
Unlimited trading possibilities with a flat pricing model of EUR 5.90 per transaction –regardless of type of asset (stocks, bonds, ETPs, ETFs etc.) and transaction amount
Competitive technology edge due to self-developed, highly scalable security ordering/ settlement infrastructure ensures sustainable cost leadership with cost per trade (CPT) of currently EUR 1.44
Top notch product offering including equities, bonds, ETPs, ETFs and mutual funds
Market leading ETP offering of Morgan Stanley, Deutsche Bank, Goldman Sachs, UBS, BNP 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
Designed by traders for traders
Product
Price
B2C - our competitive edge: the triple „P“
10THE FINTECH GROUP
Growing Number of Brokerage Customers (thousand)
145.5
176.6
212.0
253.8
284.8
FY 2014 FY 2015 FY 2016 FY 2017 10 2018
Total Number of Trades FTG Bank (million)
7.7
10.110.5
11.3
10.6
12.7
FY 2014 FY 2015 FY 2016 FY 2017 10 2018 FY 2018e
B2C - development of brokerage KPIs
11
THE FINTECH GROUP
So
urc
e: F
inTe
ch G
rou
p
So
urc
e: F
inTe
ch G
rou
p
B2C-volatility is key driver of transactions and revenues
12THE FINTECH GROUP
HIGH CORRELATION BETWEEN MARKET VOLATILITY AND CLIENTS’ ACTIVITY WITH STRONG UPSIDE POTENTIAL
So
urc
e: F
inTe
ch G
rou
p
01.0
1.2
016
01.0
4.2
016
01.0
7.2
016
01.1
0.2
016
01.0
1.2
017
01.0
4.2
017
01.0
7.2
017
01.1
0.2
017
01.0
1.2
018
01.0
4.2
018
Tra
de
s p
er
clie
nt
VD
AX
R = +0.48
Brexit
Trump election
Increase in volatility led to record transaction number of >2m in Jan/Feb 2018 (+40% compared to Jan/Feb 2017)
Jan+Feb
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
B2C-case study: Morgan Stanley ETP / 1st market disruption
13THE FINTECH GROUP
BANKS…
Market standard in
the past:
90 : 10split
Partnerships today:
50 : 50split
REVENUE POOL
…TRADED BY CLIENTS
Revenue generation forissuing bank through:
• Inherent interestcomponent
• Bid-ask spread
…OFFERED AT FLATEX……ISSUE ETPs…
German ETP market size notional of around EUR 70bn pa - FinTech Group with >15% distribution stake
In the past: product issuing banks kept 90% of the revenue pool - 10% to product distributor
Already 50,000 flatex-select products issued by Morgan Stanley that clients can trade at no cost
ETP Premium Partner Pricing Model / 2nd market disruption
14THE FINTECH GROUP
15THE FINTECH GROUP
flatex goes international
Q4 – 2019e
Q1 – 2019e
Q3 – 2019e
Q2 – 2019e
flatex today
End of 2019e
End of 2020e(example given)
B2B - fully modular self-developed core banking platform
16THE FINTECH GROUP
(c25% REVENUE CONTRIBUTION, c20% EBITDA MARGIN)
APIs
APIs
OADO
Account/Depot Srv.
ProductionPlatform
Regulatory & SteeringPlatform
Support Platform
SalesPlatform
Layers within the FTG:CBS banking platform Technology
HTML
Objektive-c (iOS)
Java (Android)
REST / SOAP
Entax-BO-ClientOnline branch
Mobile App
Securities Payment Service Cards
HA
Wildfly
Java, Go
C++
SAP ASEDeposit Transaction Service Credit Facilitation Master Data
Wildfly
Java
C++
SAP ASE
ABACUSTicketing Service PortalBatchdata
ArchiveShared Services
PostgreSQL
Oracle
ASCII, XLS / SFTP
FIX / EBICS /SWIFT
CRM / Sales Trading FE
InfoZone / WM
Accounting Controlling Tax Compliance
Regulat. Reporting
(Abacus)Mgmt. Reporting DWH / BI Risk / Liq. Mgmt
B2B - shared services: banking processes and platform
17THE FINTECH GROUP
POSITION FINTECH GROUP’S BANKING PLATFORM AS THE STANDARD PLATFORM FOR PRIVATE AND SPECIALIST BANKS
DATA CENTRES ISO 27001
SEPA SWIFT EXCHANGES …
Application Use Cases
API Layer
FinTech Group PlatformSoftware + Banking
FinTech GroupData centre
Financial System Infrastructure
BanksPayment
InstutionsCorporates
API
…
flatexBrokerFintech
Start-ups
API
FinTech Group Bank
Regulatory Umbrella
BPO
B2B - client excerpt and case studies
18THE FINTECH GROUP
Unique combination of technology and banking know-how enables our clients to build top-class financial products and services
Key partner
FinTech Group AG developed,maintains and runs LOX, the ETP OTC system for Deutsche Bank AG and Commerzbank AG - 3bn price feeds and 50k transactions - per day.
FinTech Group Bank AG were chosen by Equatex - one of the leading European stock option plan administrators with >3bn EUR AuC – to provide banking and custody services; opening 250k accounts in 4 weeks.
FinTech Group was chosen to set-up the technological infrastructure for digital online retail banks in Germany and Austria including providing several respective regulatory banking processes
FinTech Group AG is the central IT service provider for the Federal Association of German Banks, providing key technology platform to run the German Deposit Guarantee Scheme.
Notable clients
Investment case
The ecosystem – unique combination of independent business models
20THE FINTECH GROUP
Increaseinteraction with
and offeringto clients
Access to newproducts and
services
Manifest customerrelationship
Reduce costsper unit
GROWTH
B2BCustomer lifetime:
5-10 years
Highly predictable revenue streams
CAPEX driven
B2CHigh margin business
Transaction driven business
Broad customer base
Leverageself-developedinfrastructure
Continuous development of technology and
platform
Increaseprofitability
and cash flow
Annex
22THE FINTECH GROUP
FinTech Group AG - corporate structure
Tech-Entity
Fin-Entity
FTG Finanz GmbH
100%
100%
23THE FINTECH GROUP
FinTech Group AG - key milestones
1988
Company founded in Langen
2001Development and full BPO provider for pan-European expansion (core bank system FTG:CBS:R1 is born)
2006
Best German online broker goes live
Full white label Retail Bank operations begins (full BPO)
L.O.X. OTC certificate platform developed (limit order system connects DB/Coba flow to 22 pan-European brokers)
Migration of mwb fairtrade from caceis to FinTech Group Bank for order routing and securities settlement (1.4 m trades/year)
Large Austrian bank selected FinTech Group as full BPO for Austrian and German digital expansion
1997
Full BPO IT provider for bankenverband ever since
2009
2015
2017
2010
25.28%
11.17%
6.54%
57.01%
24THE FINTECH GROUP
FinTech Group AG - shareholder structure*)
*) No. of shares outstanding:
18,736,637
Free Float of 57.01 %,
therein:GFBK (Entity of
flatex founder
Bernd Förtsch)
Shares outstanding: 18,736,637
Options outstanding: max. 1.3m
Market capitalisation: EUR 334m (as at 2019-01-02)
Listed:
SCALE, Deutsche Börse / Frankfurt Stock ExchangeUp-Listing to Prime Standard in 2019 in preparation
ISIN: DE000FTG1111
Bloomberg: FTK GR Equity
Stock covered by 12
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0.2
017
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2.2
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Jan 2019
PT EUR 28.00 Buy
Commerzbank
Share Price (EUR)
Jan 2019
PT EUR 37.00 Buy
M.M. Warburg
Jan 2019
PT EUR 38.00 Buy
Hauck & Aufhäuser
Sep 2018
PT EUR 43.00 Buy
Berenberg
25THE FINTECH GROUP
FinTech Group AG - our stock
Sep 2018
PT EUR 45.00 Buy
GBC Research
STOCKPRICE DEVELOPMENT LTM
Jörg Peters FinTech Group AG
IR & Press Rotfeder-Ring 7
60327 Frankfurt/Main, Germany
Phone: +49 69 450 00 11 701
Mobile: +49 151 688 47 638
www.fintechgroup.com
Financial Calendar 2019 Contact details
Investors’ Conferences 2019
10-11 Jan Investors’ Conference / Lyon (F)
23 Jan Investors’ Conference / Frankfurt/Main
06 Feb Investors’ Conference / Hamburg
01-03 Apr Investors’ Conference / Zürs (CH)
13-15 May Investors’ Conference / Frankfurt/Main
21-23 May Investors’ Conference / New York (USA)
05-07 Jun Investors’ Conference / Paris (F)
