presentation 2006 results - english final · annual results presentation 2006 swx, february 9, 2007...

1

SwissquoteSwissquote

Annual Results Presentation Annual Results Presentation

20062006SWX, February 9, 2007 SWX, February 9, 2007

2

• Introduction

• Key figures 2006

• Results for the 4th quarter 2006

• Balance sheet

• Distribution of profit

• System expansion and new services

• Business model

• Targets 2007

AgendaAgenda

3

IntroductionIntroduction

4

IntroductionIntroduction

• Best year and best quarter in Swissquote’s history with

15,010 new clients, inflow of just under CHF 1 billion new

funds and 60 percent revenue growth

• 5th year of client growth above 25%

• Net profit margin of 49 percent

• Strong development of the company with a staff increase

of 23% to 160

• CHF 5.- distribution of profit to shareholders and share split

5

Key Key ffiguresigures 20062006

6

Net revenuesNet revenues 74.7m74.7m

Net profitNet profit 36.5m36.5m

ClientsClients 64,06764,067

AssetsAssets 4,492m4,492m

ComparedCompared to 2005to 2005

+60.3%+60.3%

+148.8%+148.8%

+30.6%+30.6%

+50.4%+50.4%

+28.1m+28.1m

+21.8m+21.8m

+15,010+15,010

+1,506m+1,506m

EquityEquity 93.5m93.5m +39.6%+39.6%+26.5m+26.5m

Key figures 2006Key figures 2006

7

StrongStrong organicorganic growthgrowth

733

1'560

2'019

2'986

4'492

0

10'000

20'000

30'000

40'000

50'000

60'000

70'000

2002 2003 2004 2005 2006

-

500

1'000

1'500

2'000

2'500

3'000

3'500

4'000

4'500

5'000

Clients Assets

8

CostCost//incomeincome ratio ratio belowbelow 50%50%

29'79734'273

46'628

5'129 6'05714'683

36'529

74'747

77.0% 76.1%

65.7%

49.0%

-

10'000

20'000

30'000

40'000

50'000

60'000

70'000

80'000

2003 2004 2005 2006

0.0%

10.0%

20.0%

30.0%

40.0%

50.0%

60.0%

70.0%

80.0%

Net Revenues Net Profit Cost/Income RatioCHF '000

9

191 192 186200

165

0

500

1'000

1'500

2'000

2'500

3'000

3'500

4'000

4'500

5'000

2002 2003 2004 2005 2006

0

25

50

75

100

125

150

175

200

225

Assets under Custody Asset Margin

Stable Stable assetasset marginmargin

10

LeverageLeverage effecteffect isis keykey for for successsuccess

740

1'115

9731'053

1'3221'262

859

740692

648

0

200

400

600

800

1'000

1'200

1'400

1'600

2002 2003 2004 2005 2006

Average Revenue & Costs per clientCHF

11

HigherHigher thanthan averageaverage transaction transaction numbersnumbers

15

23

1920

25

-100'000

100'000

300'000

500'000

700'000

900'000

1'100'000

1'300'000

1'500'000

2002 2003 2004 2005 2006 -

5

10

15

20

25

30

Total Trades Trades per Client per Year

12

Key Key figuresfigures for the 4for the 4thth qquarteruarter 20062006

13

StrongStrong revenue revenue growthgrowth (CAGR = 60%)(CAGR = 60%)

0.0

2'500.0

5'000.0

7'500.0

10'000.0

12'500.0

15'000.0

17'500.0

20'000.0

22'500.0

Q2-03

Q3-03

Q4-03

Q1-04

Q2-04

Q3-04

Q4-04

Q1-05

Q2-05

Q3-05

Q4-05

Q1-06

Q2-06

Q3-06

Q4-06

EBITDA

Quarterly Revenues

14

The commission business The commission business isis dominantdominant

5% 7%

8%

18% 62%

Custody & other Fees & Commission Interest Trading Other

15

Revenue Revenue growthgrowth in all in all reportedreported segmentssegments

0

5'000

10'000

15'000

20'000

Q2-03

Q3-03

Q4-03

Q1-04

Q2-04

Q3-04

Q4-04

Q1-05

Q2-05

Q3-05

Q4-05

Q1-06

Q2-06

Q3-06

Q4-06

Other (Platform)

Trading

Interest

Net Fee & Commission Income

16

OpexOpex are are coveredcovered by nonby non--commission revenues commission revenues

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

110%

Q2-03

Q3-03

Q4-03

Q1-04

Q2-04

Q3-04

Q4-04

Q1-05

Q2-05

Q3-05

Q4-05

Q1-06

Q2-06

Q3-06

Q4-06

Opex Coverage

17

6.7% more clients in the 46.7% more clients in the 4thth quarter quarter ……

4036

0

5'000

10'000

15'000

20'000

25'000

30'000

35'000

40'000

45'000

50'000

55'000

60'000

65'000

Q2-03

Q3-03

Q4-03

Q1-04

Q2-04

Q3-04

Q4-04

Q1-05

Q2-05

Q3-05

Q4-05

Q1-06

Q2-06

Q3-06

Q4-06

Quarterly Client Growth

18

…… and 245m net new and 245m net new moniesmonies

245

0250500750

1'0001'2501'5001'7502'0002'2502'5002'7503'0003'2503'5003'7504'0004'2504'5004'750

Q2-03

Q3-03

Q4-03

Q1-04

Q2-04

Q3-04

Q4-04

Q1-05

Q2-05

Q3-05

Q4-05

Q1-06

Q2-06

Q3-06

Q4-06

Net Assets InflowCHF Mio

19

Client Client growthgrowth isis acceleratingaccelerating

20000

25000

30000

35000

40000

45000

50000

55000

60000

65000

7000001-03

04-03

07-03

10-03

01-04

04-04

07-04

10-04

01-05

04-05

07-05

10-05

01-06

04-06

07-06

10-06

01-07

0

20

40

60

80

100

120

140

160

180

200Total Accounts Requests

20

HNWI clients are HNWI clients are growinggrowing fasterfaster

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

2003 2004 2005 2006

Original Clients

Emergent Client

21

Balance Balance sheetsheet

22

Balance Balance sheetsheet

67.0

610.0

692.0

93.5

910.4

1033.0

- 200.0 400.0 600.0 800.0 1,000.0 1,200.0

Equity

Due to customers

Total balance

sheet

CHFm

2005 2006

23

Structure of Structure of assetsassets atat 31.12.200631.12.2006

Structure of assets

91%

6%

1%

1%

1%9%

Cash Loans to customersProperty & systems Deferred taxesOther assets

24

Structure of Structure of assetsassets atat 31.12.200631.12.2006

Structure of liabilities and equity

88%

3%

9%

12%

Due to customers Other liabilities Equity

25

Distribution of profitsDistribution of profits

26

Operating profitOperating profit 34.8m34.8m

IncomeIncome taxtax, net, net 1.7m1.7m

Net profitNet profit 36.5m36.5m

EarningsEarnings per per shareshare 25.8425.84

20052005

13.0m13.0m

1.7m1.7m

14.7m14.7m

10.5610.56

ProfitProfit

20062006

27

Distribution of profit and Distribution of profit and shareshare splitsplit

• The board will propose to the GA a further distribution

to shareholders in the form of

• A capital reduction of CHF 3.- per share

• A dividend of CHF 2.- per share

• 10 for 1 split

1.00

2.00

2.00

3.00

0

1

2

3

4

5

6

2004 2005 2006

Capital Reduction

Dividend

28

System expansion and new servicesSystem expansion and new services

29

System expansion 2006System expansion 2006

• Mobile trading (Wap)

• New OTC trading with German issuers (Deutsche Bank,

Commerzbank, Citigroup, Goldman Sachs and HSBC)

• New Stock Exchanges: London and Smart Trading

• New online wealth management tool: "Profit & Loss"

• New financial data provider: Reuters

• Further development of the AM tool for asset managers

• Launch of the "AWP Premium News Service" for clients

30

Business modelBusiness model

31

SelectedSelected EuropeanEuropean marketmarket playersplayers by countryby country

France

Population: 60.7 MM

– Boursorama

– CortalConsors

– Comdirect

– Fineco

– Neonet

Greece

Population: 11.2 MM

– National Bank of Greece

– I.E.C. Haramis

Spain

Population: 41.8 MM

– CortalConsors

– Boursorama

– Bankinter

– Openbank

– Fineco

Italy

Population: 57.4 MM

– Fineco

– CortalConsors

– Comdirect

– Neonet

UK

Population: 59.9 MM

– TD Waterhouse

– Squaregain

– Barclays Stockbroker

– Selftrade

– Hoodless Brennan

– Comdirect

– Boursorama

– Charles Schwab

– Neonet

Switzerland

Population: 7.5 MM

– Swissquote

– Trade-Net

– Yellowtrade (Postfinance)

– E-Sider (BCV)

– Synthesis Bank

– Tradejet

Austria

Population: 8.2 MM

– DAB Bank

– Direkt Anlage Service AG

– CA-Discount Broker

– Comdirekt

– Erste.NetTrading

Belgium

Population: 10.4 MM

– Fortis DAD

– CERA

– Binck NV

– CortalConsors

Sweden

Population: 9.0 MM

– Aktiedirekt

– Aktieinvest

– AktieSpar Online

– Avanza

– E*Trade Sverige

– Neonet

– Nordnet

– SEB

Norway

Population: 4.6 MM

– NetTrade

– E*Trade Norway

– Nordnet

Luxembourg

Population: 0.5 MM

– Internaxx

– Nordnet

– CortalConsors

– Fineco

Poland

Population: 38.5 MM

– Bankowy Dom Maklerski

PKO BP S.A.

– Biuro Maklerskie BPH -

PBK S.A.

– Centralny Dom Maklerski

Pekao S.A.

– Internetowy Dom Maklerski

S.A

– mBank

Hungary

Population: 10.1 MM

– Intereuropa Bank Rt

– Erste.NetTrading

– Elso Internet Broker Kft

Denmark

Population: 5.3 MM

– Nordnet

– Saxo bank

– Euroinvestor

– Stocknet

Netherlands

Population: 16.2 MM

– Alex (Rabobank)

– Binck NV

Germany

Population: 82.6 MM

– DAB Bank

– CortalConsors

– Comdirekt

– Boursorama

– DiBa (ING)

– Fineco

– Neonet

32

EquityEquity ownershipownership in in SwitzerlandSwitzerland

Swiss Banking Institute © Cocca / Volkart / Schmid

Universität Zürich

33

Swiss Banking Institute © Cocca / Volkart / Schmid

Universität Zürich

Information mediaInformation media

34

Swiss Banking Institute © Cocca / Volkart / Schmid

Universität Zürich

WebsiteWebsite usageusage

35

Swiss Banking Institute © Cocca / Volkart / Schmid

Universität Zürich

InvestmentInvestment goals goals withwith privateprivate equityequity investmentsinvestments

36

Swiss Banking Institute © Cocca / Volkart / Schmid

Universität Zürich

Transmission of stock Transmission of stock ordersorders

37

MarketMarket potentialpotential* in * in SwitzerlandSwitzerland

*No. of clients (source: Swissquote & Handelszeitung)

28%60%

12%

Existing Online Clients Next Adopters Not Online Affine Yet

• Over the medium term, up to 40% of shareholders in

Switzerland (400,000 clients) will be using online services

such as Swissquote's

• 125,000 already have an online account with a low cost

online bank

• 310,000 clients regularly use the internet to send stock

exchange orders

38

SwissquoteSwissquote's's marketmarket shareshare

52%

48%

Swissquote Other Online Broker

*No. of clients (source: Swissquote & Handelszeitung)

• Swissquote has a market share of 52%

• Swissquote can grow its client base to 200,000 by 2011

(25% growth p.a.)

39

ConclusionConclusion

• In every European country a market leader has emerged

with a strong affinity to the local retail market.

• Cross-border offers and offers from foreign market leaders

are only moderately successful.

• The "Swissness" of the provider is a crucial factor.

• Switzerland’s online brokerage market still has growth

potential of over 220%. Swissquote can thus still triple its

client base.

40

ConclusionConclusion

• To exhaust this potential a provider must:

1. Offer a broad product range

2. Have a strong information platform

3. Have inhouse technlogy

4. Provide tools that help the client to make investment

decisions

5. Ensure good conditions in all product categories

41

Outlook and goals for 2007Outlook and goals for 2007

42

Goals for 2007Goals for 2007

• Energetic growth in all client groups

16,000 new clients in 2007 (80,000 clients in all) with 1

billion in new money

• Expand services and establish links with new exchanges

(Eurex in the 1st quarter 2007) and new investment decision

tools

• Further increase in productivity and reduction of costs per

client in 2007

• Partnership with Swisscom to be expanded further

• Sponsoring contract with SF1 TV renewed until August

2008

43

PartnershipPartnership withwith SwisscomSwisscom

44

45

1st quarter 20071st quarter 2007

• The 1st quarter is going well

• Strong growth in clients and client assets

64000

64500

65000

65500

66000

66500

67000

67500

68000

68500

69000

01.0

1

08.0

1

15.0

1

22.0

1

29.0

1

05.0

2

12.0

2

19.0

2

26.0

2

05.0

3

12.0

3

19.0

3

26.0

3

Total Accounts Target