2012 shareholder meeting presentation gain capital

7/31/2019 2012 Shareholder Meeting Presentation Gain Capital

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Annual Shareholder MeetingJune 2012


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Agenda

Call to Order; Opening of Polls Introduction of Directors Introduction of Management Introduction of Independent Registered Public Accounting Firm Designation of Inspector of Election; Materials Available for

Inspection Report of Quorum Election of Directors and Approval of Additional Matters

Proposal 1: Election of Directors Proposal 2: Ratify Appointment of Independent Registered Public

Accounting Firm

Closing of Polls and Preliminary Report of Inspector of Election Adjournment Question and Answer Period

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In addition to historical information, this presentation contains"forward-looking" statements that reflect management's expectationsfor the future. A variety of important factors could cause results todiffer materially from such statements. These factors are notedthroughout GAIN Capitals annual report on Form 10-K, as filed withthe Securities and Exchange Commission on March 15, 2012, and include,but are not limited to, the actions of both current and potential newcompetitors, fluctuations in market trading volumes, financial marketvolatility, evolving industry regulations, errors or malfunctions inour systems or technology, rapid changes in technology, effects ofinflation, customer trading patterns, the success of our products andservice offerings, our ability to continue to innovate and meet thedemands of our customers for new or enhanced products, our ability tosuccessfully integrate assets and companies we have acquired, changesin tax policy or accounting rules, fluctuations in foreign exchangerates, adverse changes or volatility in interest rates, as well asgeneral economic, business, credit and financial market conditions,internationally or nationally. The forward-looking statements includedherein represent GAIN Capitals views as of the date of this release.GAIN Capital undertakes no obligation to revise or update publicly anyforward-looking statement for any reason unless required by law.


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Retail business FOREX.com

Growing institutional business GAIN

GTX

OTC forex and precious metals

Oil, commodity and equity-index CFDs(1)

Listed securities

Strategically located in key forex markets

including Europe, USA and Asia

Direct operations and partnerships in key

emerging markets: China, Mexico and Turkey

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(1) CFDs = Contracts-for-Difference; OTC = Over-the-Counter


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GAIN Capital: Core Strengths

Innovative technology and strong brand recognition toattract retail investors

State-of-the-art institutional platform enabling peer-to-peertrading

Solid track record of acquisitions

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Return of capital through dividends,buybacks

Growth strategy aimed atdiversifying product offerings andpursuing targeted acquisitions


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Navigating Adverse Market Conditions

Market conditions adversely affecting revenue capture

FX average true range (ATR) indicators hit four-year low in 1Q12

FX intraday volatility hit five year low in 1Q12

GAINs strong brand helped maintain and improve key metrics

Client assets rose 15% year-on-year

Average account size grew 34%

Average trade size stable at $43,046

Successfully managed expenses to deliver positive EBITDA despiterevenue decline

Continue to invest in growth areas organically & through acquisitions

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571.11,326.2 1,246.3 1,564.1

2,427.8

512.5 853.10

1,000

2,000

3,000

2007 2008 2009 2010 2011 Mar-11 Mar-12

31.6 40.952.7 64.3 63.4 62.7

0

20

40

60

80

2007 2008 2009 2010 2011 Mar-12

109.0 123.9199.8

256.7 310.4325.9

0

100

200

300

2007 2008 2009 2010 2011 Mar-12

(1)

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Traded Retail Accounts (Last 12 Months)(3) (000s)

Total Trading Volume(3) ($Bn)

Client Assets(2) ($MM)

(1) CAGRs and chart data do not include China-related business.

(2) As of December 31 for each year except where indicated.(3) For year ended December 31 except where indicated.

3 Months Ended


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Estimated Average Daily Trading Volume

8

0

50

100

150

200

250

300

350

0

500

1,000

1,500

2,000

2,500

3,000

3,500

4,000

2001 2004 2007 2010

(1) Source: Aite Group, Bank for International Settlements

Total Volume Retail Volume

According to Aite Group, there were

8.3 million retail forex traders in

2010

Up from 1.3 million in 2005

Half retail FX market located in

Asia

Continued growth expected from China,

India and Middle East

US market to reach 4.8mm by 2020

Up from 450k in 2010


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FOREX.com

Customer

Active

Trader

Online

Trader

AverageAge

39 53 51

Trades/Year 550 181 17

Age Over half are under the age of 34 (52%)

Education72% have at least a 4-year college degree; 35% havea post-graduate degree

Personal Income /Total Assets

33% of Ambitious Techies make $90k or more per yearand 54% have at least $100k in financial assets

Current tradingExperience

35% trade forex only. 56% also trade stocks

TradingConsistency

33% trade the forex market continuously.38% go in and out of the market as opportunities arise

Attitudinalhighlights

61% feel comfortable with some high risk/high rewardchoices

FOREX.coms Affluent TechiesOverall: Young and very active

Forex traders are young, self-motivated

and fit an early adopter / influencer profile

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Our most powerful trading platform foractive traders delivers advanced toolsand research, automated trading, etc.

Easy-to-use trading tools, integratedresearch and account management in a

secure, web-based environment

Mobile version of FOREX.com website,iPhone, Android apps, iPad

Third-party application features robusttechnical analysis tools & tradeautomation capabilities

Proprietary & third-party research,interactive web-based seminars, trainingprograms, etc.

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Mobile volume growth~70% of mobile volume via iPhone App

11(1) Dollars in billions.(2) Compared to customers who only trade using the desktop platform.

Proprietary technology; not

outsourced

330% increase in mobile volume

over last 12 months

Mobile Offerings: iPhone & Android Apps

iPad App

Mobile web

51% of our active customerstrade on a mobile device

60% more trades

56% higher volume

30% higher deposits

$0.0

$2.0

$4.0

$6.0

$8.0

$10.0

$12.0

$14.0

$16.0

$18.0

Jan-10

Feb-10

Mar-10

Apr-10

May-10

Jun-10

Jul-10

Aug-10

Sep-10

Oct-10

Nov-10

Dec-10

Jan-11

Feb-11

Mar-11

Apr-11

May-11

Jun-11

Jul-11

Aug-11

Sep-11

Oct-11

Nov-11

Dec-11

Jan-12

Feb-12

Mar-12

Mobile Volume(1)


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(1) FOREX.com's execution statistics represent orders executed on FOREX.com's FOREXTrader platform during market hoursbetween March 31, 2012 17:00 ET and April 30, 2012 17:00 ET.

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Monthly Scorecard measures:

Execution speed

Opportunity for improvement

Percentage of trades accepted

Pricing transparency

Published minimum, typical and live

spreads

Pricing comparison against third party FX

rate feed (GTIS)

We are the only retail FX firm providing

this level of detail about pricing andexecution quality


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GAIN GTX is an ECN for buy-side

institutions, including hedge funds, asset

managers and proprietary traders.

Exclusive trading technology

Peer-to-peer trading capabilities

Advanced algorithmic trading features

Prime brokerage credit, central clearing

model

GTX Direct Specialty execution desk

LTM March 31 volume: $1.2 trillion


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Institutional Platform Growing GTX Volume

GTX product gaining tractionamong institutions: ECN volume rose 325% Y-o-Y to

$468 billion in Q1

Innovative technology with multi-lateral credit model gaining traction

with hedge funds, high frequencytraders, etc.

Product expansion intohydrocarbons Differentiated offering including

non-USD denominated contracts &basket trading capabilities

Fee-based revenue stream

$110.1 $97.4

$260.0

$386.4

$468.0

$0.0

$50.0

$100.0

$150.0

$200.0

$250.0

$300.0

$350.0

$400.0

$450.0

$500.0

Q1 2011 Q2 2011 Q3 2011 Q4 2011 Q1 2012

GTX Volume (in billions)

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Dividends and Share Buybacks

Dividend program initiated in October 2011 Dividend of $0.05 per share authorized

Three quarterly dividends declared to date

Plans to continue with dividend program of $0.05 per share

Ongoing share buyback program supports stock price More than one million shares repurchased since May 2011

Total value of shares purchased $5.9 million

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Figures as of May 24, 2012


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Growth: Acquisitions

Capital requirements and regulatorycompliance costs continue to driveindustry consolidation

Ongoing evaluation of potentialopportunities to generate shareholdervalue, specifically fee-based revenues

Strong operating cash(1) position of$129 million at end of 1Q12 to supportacquisitions

16(1) Operating Cash calculated as sum of Cash & Equivalents, Short Term Investments and Receivablefrom Broker less Payable to Customers.


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Growth: Product Diversification

New Contract-for-Difference offering to launch Summer2012 Focused on delivering a differentiated trading experience, e.g.

integrated community/social trading features, automated trading

capabilities & innovative analytical tools Launching with 200+ CFDs (indices, commodities, sectors & FX)

Aggressive global rollout schedule for second half of 2012

Expanding institutional products to include hydrocarbons Differentiated offering including non-USD denominated contracts

and basket trading capabilities

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GAIN Capital: Core Strengths

Innovative technology and strong brand recognition toattract retail investors

State-of-the-art institutional platform enabling peer-to-peertrading

Solid track record of acquisitions

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Return of capital through dividends,buybacks

Growth strategy aimed atdiversifying product offerings andpursuing targeted acquisitions


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2012 shareholder meeting presentation gain capital

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