corporate presentation, frank niehage, ceo financial ... · corporate presentation, frank niehage,...
TRANSCRIPT
Corporate Presentation, Frank Niehage, CEO
Financial Services
Technologies
April 2016
The leading European
infrastructure provider and operator
Table of contents
FinTech Group AG 2
1. About us
2. Corporate strategy
3. Strategic partnerships
4. Annex
Customer cash deposits approx. EUR 1bn
Number of own B2C Customers approx. 200k
Number of inst. B2B Clients approx. 250
Assets under Admin. (biw AG) approx. EUR 5.5bn
Trades executed p.a. approx. 10m (forecast based on H1 2015 figures)
Tier 1 Capital approx. EUR 60m
CRR indicator > 16
Headquarters Frankfurt, Germany
Other locations Berlin, Düsseldorf, Kulmbach, Willich, Andernach, Zwickau
Employees approx. 500
Investors (two of them listed) GfBk Gesellschaft für Börsenkommunikation mbH (40.10%)
Heliad Equity Partners (listed on the Frankfurt Stock Exchange) (17.75%)
SafeCharge International Group Ltd. (listed on London AIM) (4.82%)
Others (incl. free float) (37.33%)
1. About us: key facts and operational figures
FinTech Group AG 3
1. About us: key facts and operational figures
FinTech Group AG 4
Shares outstanding: 16.8m
Options outstanding: max. 1.7m
Market Cap: EUR 290m
(18/04/2016 share price EUR 17.45)
ISIN: DE0005249601
Bloomberg: FLA GY Equity
Reasonable daily trading volume
- Approx. EUR 250k/day
Stock covered by
- Latest price target range of 27.00 EUR
shareholder return LTM: 66%
0
2
4
6
8
10
12
14
16
18
20
22
19.
04.2
01
6
22.
03.2
01
6
25.
02.2
01
6
01.
02.2
01
6
06.
01.2
01
6
07.
12.2
01
5
10.
11.2
01
5
15.
10.2
01
5
21.
09.2
01
5
26.
08.2
01
5
31.
07.2
01
5
07.
07.2
01
5
11.
06.2
01
5
18.
05.2
01
5
22.
04.2
01
5
Nov 2015
PT EUR 24.80
Mirabaud Securities
Feb 2016
PT EUR 27.00
H&AJul 2015
PT EUR 21.00
H&A
Share Price (EUR)
Stockprice development
Steady and organic B2C growth
Increasing share of wallet
Asset volume of EUR 35,000 per customer on average
1. About us: increase in customers
FinTech Group AG 5
525
1,086
2,1712,347
2,810
3,5274,023
5,679
FY 2008 FY 2009 FY 2010 FY 2011 FY 2012 FY 2013 FY 2014 1.HY 2015
A growing number of customers Development of assets under administration
118,17 126,111 134,403
163,668
196,402216,042
237,646
FY 2012 FY 2013 FY 2014 HY 2015 FY 2015e FY 2016e FY 2017e
Source: FinTech Group Source: FinTech Group
(million EUR)
1. About us: full-year results¹ 2015
FinTech Group AG underpins growth strategy with strong indicative FY15 results
FinTech Group AG 6
Indicative EBITDA under German IFRS of EUR 19m in FY 2015
XCOM AG fully consolidated for the first time following integration in second quarter
Number of executed transactions sets record high
(The number of trades executed rose to 10.1 million in FY 2015)
biw AG develops lending business following bolstering of capital
The innovative credit line “flatex flex”, an alternative to usually expensive overdraft facilities of other German banks, meets high
demand
Strategic partnership between and allows for significantly higher profit stake in the ETP business
(1) pre-audit results
1. About us: guidance
Development of net revenues, EBITDA and EBITDA margin
FinTech Group AG 7
22.7
85.0
95.0
-8.0
20.0
35.0
-35.2%
23.5%
36.8%
FY 2014 FY 2015e FY 2016e
Net revenues (million EUR)
EBITDA (million EUR)
EBITDA margin
1. About us: our business model at a glance
FinTech Group AG 8
B2B Business B2C Business
Technology and white-label banking
business for third parties
Business models operated by FinTech
Group AG under own brands
B2
B B
ran
ds
B2
C B
ran
ds
Professional trading for highly active investors
kesh: mobile payment system
benk: B2C online bank with a large porfolio of
products
Renowned, third largest online broker in Germany with
flat fee trading model
Approx. 150,000 customers
Strong brand in Germany
European expansion in progress
Continuous product development
Leading provider of software and
technology solutions for banks and
financial services companies in Europe
with more than 250 clients
German BaFin licensed bank with full
range of white label banking services
(EU-Passport)
1. About us: B2B service portfolio
FinTech Group AG 9
Leading provider of software and technology
solutions for banks and financial services
companies in Europe with more than 250 clients
German BaFin licensed bank with full range of
white label banking services
(EU Passport)
Trading
Trading system
Market maker system
Trading platforms
Market and price
data supply
E-Banking
Payment platform
SEPA platform
incl. mandate management
Online banking
Secure transactions
Payment
Payment services
(physical and electronic)
Mobile payment "kesh"
Card processing
ATM operations (incl. mobile
payment)
Banking
Business process outsourcing (white-
labeling)
Core banking
Reporting systems (client, regulatory,
etc.)
1. About us: company history
FinTech Group AG 10
Start of
CFD-Trading
IPO
flatex AG
Incorporation of
PRE.IPO AG
in Kulmbach
Change
of name to
flatex AG
Incorporation of
XCOM BCC
in Langen
Merger of
12 group companies
XCOM AGAcquisition of
XCOM-Bank
Incorporation of Bank biw AG
(minority stake in the beginning) Investment
in ViTrade AG
Full take-over of Bank biw AG (100%) New owner
FinTech Group AG
1999 2003 20121988 2005 2006 201020092008
Aktionärsbank
GmbH obtains
banking license
Acquisition of
CeFDex (100%)
flatex Holding
AG FinTech
Group AG
New Senior
Management
Take-over of strategic
majority in XCOM AG
2013
Significant
acceleration
20152014
1. About us: current organistional chart
FinTech Group AG 11
As of April 2016
Via XCOM Finanz GmbH (100%)
100%
(SPV)
100%
100% 67%
0,75%
2,25%100%
1. About us: ongoing transformation process
FinTech Group AG 12
Past
• Only one relevant shareholder, no
relevant free float
• Business model focused on online
brokerage (B2C)
• Limited strategic partnerships
• DACH focus only; no strategic
partnerships
Present Future
• Diversified shareholder structure
and strong free float
• B2B and B2C innovation engine
based on stable and recurring
businesses
• Further operational / equity /
strategic partnerships
• European market leader within the
FinTech infrastructure segment
• More diversified shareholder
structure, no majorities left,
relevant free float
• Running B2B and B2C
businesses with enormous
growth potential
• Already 2 strategic partnerships
signed in 2015
• DACH focus, first
internationalization steps
1. About us: future organisational chart
FinTech Group AG 13
100%
100%
100%
uses liability
umbrella of biw
100%
B2C - currently online brokerage B2B – IT services B2B – Banking services
4.0
Peers of FinTech Group
1. About us: senior management
FinTech Group AG 14
Frank Niehage
CEO
(since 15.08.2014)
Martin Korbmacher
Chairman of the Supervisory Board
(since 30.10.2014)
Vast experience across all segments of retail and commercial banking. Previously
a Managing Director at Goldman Sachs. He was also instrumental in the growth of Bank Sarasin AG as
CEO in Germany.
Extensive expertise in both traditional banking and financial services technologies. Previously Global
Head of Equities at Dresdner Kleinwort and Investment Banking Head of Germany and Austria for Credit
Suisse (2005-2011)
1. About us: executive committee
FinTech Group AG 15
Sascha Bochartz Muhamad Chahrour Niklas Helmreich Dr. Benon Janos Stefan Müller Bernd Würfel
• Head IT FTG
• Board Member XCOM AG
• Head Finance FTG
• Board Member XCOM AG
• Head B2C FTG
• CEO flatex
• CEO ViTrade
• Board Member XCOM AG
• Head B2B FTG
• Chief Representative FTG
• Board Member XCOM AG
• Head Regulatory FTG
• Chief Representative FTG
• Chairman biw AG
• CEO biw AG
• CEO Aktionärsbank
• Board Member XCOM AG
Frank Niehage
• CEO FTG
• Chairman Executive Committee FTG
• Chairman XCOM AG
• Chairman biw AG
2. Corporate strategy
2. Corporate strategy: our ambition
FinTech Group AG 17
Our goal
• To be the platform and infrastructure provider of choice for the financial service industry in Europe
• To become one of the leading, highly profitable FinTech companies in Europe
Strategic steps
• (1) restructuring of the existing B2C business (DONE)
• + (2) new business line B2B (DONE)
• + (3) strategic acquisitions and new B2C lines (DONE & ONGOING)
• + (4) boost of organic growth of existing B2C business (IN PROGRESS)
Gearing up to make full use of Group synergies – “one firm”
• We set up an Executive Committee with members from across all of the Group’s entities to ensure
a continuous exchange amongst management personnel
• We also created a Resource & Priority Committee (“integration task force”) to create extensive synergies and achieve maximum
efficiency
• FinTech Group AG has been awarded the (rare) status of leading company (“übergeordnetes Institut”)
for regulatory purposes by the German authorities (BaFin) despite not holding a bank license itself
22.7
85.0
95.0+
-8.0
20.0
35.0
Net Sales
adj. EBITDA²
Improved tech expertise by
Xcom acquisition
Strengthened
capital base
Implemented high class
management team and
subsequent restructuring
actions
Closed CFD deal with
Commerzbank (strategic
partnership)
Group wide IFRS Reporting
(incl. segment reports)
Boost of organic growth of
existing B2C business
Sale of loss making
AKTIONÄRSBANK to free up
EUR 14m regulatory capital,
improve annual earnings and
pool banking activities in biw
AG
2. Corporate strategy: roadmap – next 24 months1
FinTech Group AG 18
TODAYLast 12 months Next 12-18 months
Fixed agenda Additional upside
Implement technology based lending with the
potential to generate an additional EUR 10+
million (do-it-yourself and / or partner with
existing players)
Enter Prime Standard of Frankfurt Stock
Exchange to increase transparency and
trading volume
Further strategic acquisitions
& partnerships
(1) Guidance does not include revenues and earnings derived from “additional upside
(2) Adj. EBITDA includes operations related interest income and expenses
2014 2015 2016 EUR m
2. Corporate strategy (1): flatex as „Bank 4.0“
FinTech Group AG 19
Flatex is the current market leader in the areas of usability, transparency and transaction costs. Our goal is to
shift flatex’s online brokerage business model to a modern, state of the art and mobile “fully fledged online
bank” business model and to roll out new products (incl. debit/credit cards) – “vertical integration” to gain a
larger “share of wallet” (a recent survey proved that more than 60% of our customers are willing to increase
their business activities with flatex).
Through the acquisition of XCOM AG/biw AG, we are uniquely placed to achieve vertical integration at an
extremely low cost as the systems and products are already in place.
We seek to expand into other European countries in 2016/17 and are currently targeting a number of Central and
Eastern European markets – “horizontal integration”.
We have greatly increased our number of customers in Austria (by more than 8 times since Jul 2015) and will
continue to build on this success.
2. Corporate strategy (2): technology-based lending
FinTech Group AG 20
biw AG currently holds approx. EUR 1bn in customer deposits.
These deposits are not currently being actively used for lending.
Management of part of these deposits could generate an additional income of at least
EUR 10m from 2016 onwards.
Recent statistics and surveys show that there is an appetite for
convenient and digital consumer lending.
innovative credit line “flatex flex” is activating some of the deposits of Bank biw AG
2. Corporate strategy (3): fostering own FinTech ideas
FinTech Group AG 21
We developed our own multichannel mobile payment system which has been rolled out in Germany
in 2016.
We set up our own start-up lab in the heart of Berlin to attract and cooperate with innovative start-
up businesses. By continuing to evaluate trends, developing our own IT-based disruptive solutions
and supporting inventive start-ups, we seek to position ourselves as a pioneer in the fast-moving
and vibrant FinTech industry.
2. Corporate strategy (3): kesh – our payment solution
FinTech Group AG 22
→ collect contacts
→ collect favorite dealers
Kasse
„social banking“
→ voucher code
→ browser-access
value added-services
→ withdraw money from kesh-account
→ load money into kesh with EC/credit card
interaction with cash machines
→ transfer of address data
→ payment approval in kesh
Webshop
Zahlung im Online-Handelpayments in ecommerce
→ connection to third systems via API
backend integration
→ smartphone / tablet
→ monitor with internet access
→ integration in cash register system
Kasse
payment at POS
→ transfer money
→ demand money
payments among individuals
2. Corporate strategy (4): FinTech campuses
FinTech Group AG 23
Frankfurt and Berlin one-stop-shop FinTech labs - offering Fin, Tech and Cap
CORPORATE INNOVATION
TECHNOLOGY MATCH-MAKING AND SUPPORT
BANKING AND REGULATORY KNOW-HOW
FINTECH PROJECT DEAL FLOW SESSIONS
GROWTH INVESTMENT
SERVICE & MANAGEMENT FOR EQUITY
EARLY STAGE SEED INVESTMENTS
VC FOLLOW-ON INVESTMENTS
ACCESSIBLE LOGISTICS
PLUG & PLAY OFFICE AND EVENT VENUES
(WORKING TERRACE, SOHO CLUB, HEALTH CLUB)
BIG DATA FOR RESEARCH & DEVELOPMENT
ACCESS TO MARKETING AND PR CHANNELS
MENTORING NETWORK
BANKING AND TECHNOLOGY EXPERTS ON SITE
DEDICATED EDUCATION – FINTECH B.Sc.
ENTREPRENEURIAL WORKSHOPS AND EVENTS
2. Corporate strategy (4): FinTech campuses - impressions
FinTech Group AG 24
2. Corporate strategy (4): FinTech campuses - impressions
FinTech Group AG 25
3. Strategic partnership
3. Strategic partnerships (ETPs and CFDs)
FinTech Group AG 27
In February 2016, entered into a strategic Joint Venture with Morgan Stanley
• Morgan Stanley starts issuing labeled structured products and warrants in Germany
• Significantly higher profit stake through MS joint venture than through standard product distribution
• Larger number of structured products clients can trade at zero costs
• Joint Venture basis for future internationalization and verticalization strategy
In June 2015, we closed a strategic long-term CFD partnership with Commerzbank
• Key commercial points of the deal are:
• Cooperation began in Q4 2015 and will run for seven years (until 2022)
• Commerzbank takes over FinTech Group AG’s entire CFD orderflow execution (as market maker)
• FinTech Group AG received a double digit million amount upfront and will receive 40% of profits each year
• Key business impacts for FinTech Group AG are:
• FinTech Group AG significantly reduces its cost base and avoids investments in IT infrastructure
• Wind-down of CefDeX frees up regulatory capital and reduces overall risk exposure
“U.S. bank announces strategic
partnership with online broker
Flatex“
“Morgan Stanley Pushes Into German
Note Market With Partnership“
4. Annexes
Market opportunity: banks and FinTech companies
FinTech Group AG 29
Market opportunity: banks vs. FinTech “unicorns”
FinTech Group AG 30
45,1
16,5
49,0
9,68,0
6,0 5,6 5,0 4,85,1
PayPal Deutsche Bank Commerzbank Lufax ZhongAn Square LendingClub Wirecard Stripe Zillow
FinTech Group comparable FinTech company Bank Market cap in USD bn
Market capitalisation of the world‘s 5 largest FinTech companies (USD 78 bn) is
already larger than the market capitalisation of the five biggest listed German banks
(USD 67 bn)
Wirecard, as a FinTech Group comparable, shows a revenue multiple of 8.5x
- Our revenue multiple today is ~3.0x
Market opportunity: online banking
FinTech Group AG 31
63%
61%
61%
57%
54%
54%
47%
39%
25%
U.S.
Spain
Netherlands
Poland
Australia
UK
Germany
Czech Republic
Romania
91%
89%
83%
82%
58%
57%
54%
49%
48%
46%
Iceland
Norway
Netherlands
Sweden
France
UK
Switzerland
Germany
Austria
Czech Republic
Source: Bitkom, Eurostat Source: statista
Share of e-banking users 2014 (%) Mobile banking usage per capita (%)
Market share of online banking users in Germany
Increasing growth rates with a strong upward trend
Germany is a high potential, mostly undeveloped market in the fields of e-banking and mobile banking
Market opportunity: FinTech market
FinTech Group AG 32
North America59.5%
Europe10.2%
Asia 11.7%
Others18.6%
Source: Accenture, CB Insights
26.8%
25.0%
14.1%
11.5%
7.2%
6.0%
4.7%
3.6%
1.1%
P2P Lending/ Online Lending
Mobile Wallets
Personal Finance and Management
Corporate Lending
Mobile Points of Sales Technologies
Mobile Banking
Bitcoin
Crowdfunding/Crowdinvesting
OtherSource: „Money of the Future“ Life.SREDA
Broad spectrum of fintech technology
High upside potential: P2P lending/online lendingand mobile wallets
Nearly 60% (10bn US dollars) of the global fintech volume was invested in the U.S.
Germany has a clear backlog with only 82m US dollars invested in FinTechs in 2014
Market share of online banking users in Germany
Share of total investments in fintech companies globally in 2014 (%)
Market opportunity: from offline to online
FinTech Group AG 33
We aim to play a leading role in the upcoming
transformation of the financial services sector from offline
to online
With our online broker flatex we have already proven
that we were able to successfully disrupt offline
markets within a very short period of time
Our subsidiary biw has its own commercial banking license which can act as
„engine“ on which new B2C business lines can jumpstart on
In addition to providing first class B2B services, we will also focus on
improving our existing B2C businesses and creating new ones
Online saturation of markets
Advertising
Commerce
Travel
Agency
Financial
Services
low high
HUGE POTENTIAL
e.g.:
e.g.:
e.g.:
Market opportunity: only 4 sectors are truly “online”
FinTech Group AG 34
wealth & asset management
transformation & corporate finance business & corporate banking
payments
retail banking & consumer finance
insurance & risk management
data, technology and infrastructure
no single segment, rather a supporting function for
other segments
FINANCIAL SERVICES
capital markets & trading
Market opportunity: rise of digital banking
FinTech Group AG 35
61
25
22
10
5
3
2
34
53
42
44
30
20
15
2
10
27
39
48
52
56
3
12
10
7
17
25
72
PAYMENTS
SIMPLESAVINGS PRODUCTS
CURRENT ACCOUNT
CONSUMER CREDIT
STRUCTUREDSAVINGS PRODUCTS
HOME LOAN BUSINESS
CORPORATE LOANS
Very likely Likely Unlikely Very unlikely
89
67
58
22
11
33
33
11
22
33
56
44
44
33
11
11
22
22
22
33
22
PAYMENTS
SIMPLESAVINGS PRODUCTS
CURRENT ACCOUNT
CONSUMER CREDIT
STRUCTUREDSAVINGS PRODUCTS
HOME LOAN BUSINESS
CORPORATE LOANS
Very likely Likely Unlikely Very unlikely
Threat to retail banking from new market participants:
next 3 years (International)
Threat to retail banking from new market participants: next 3 years (Germany)
% of those surveyed, by product, international, n=60 banks from 15 countries % of respondents, by product, Germany, n=60 banks from 15 countries
Source: Roland Berger (2014) Source: Roland Berger (2014)
Market opportunity: banks and FinTech companies
FinTech Group AG 36
All information in this presentation is PUBLIC knowledge
This presentation contains forward-looking statements that are subject to risks and uncertainties that could cause the company’s actual operating results to differ materially from those indicated by the forward-lookingstatements. The company expressly exclaims any obligation to update and revise publicly any forward-looking statements, whether as a result of new information, future events or otherwise. Detailed information onFinTech Group can be found on the company’s website at www.fintechgroup.com.
Contact details
Frank Niehage
CEO
FinTech Group AG
Rotfeder-Ring 5-7
60327 Frankfurt, Germany
www.fintechgroup.com.
Thank you