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Corporate Presentation, Frank Niehage, CEO
The leading European infrastructure providerand operator for financial services technologies
2
Table of contents
1. About us
2. Corporate strategy
3. Strategic partnerships
I. Annex
3
1. About us: key facts and operational figures
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. 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%)
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Nov 2015
PT EUR 24.80
Mirabaud Securities
Feb 2016
PT EUR 27.00
H&A
4
1. About us: stock information
Shares outstanding: 16.8m
Options outstanding: max. 1.7m
Market Cap: EUR 270m(01/04/2016 share price EUR 16.05)
ISIN: DE0005249601
Bloomberg: FLA GY Equity
Reasonable daily trading volume
- Approx. EUR 750k/day
Stock covered by
- Latest price target of 27.00 EUR
Share Price
(EUR)
Mar 2015
Price Target EUR 17.00
H&A Jul 2015
PT EUR 21.00
H&A
Stockprise development
shareholeder return LTM: 64%
525
1,086
2,1712,347
2,810
3,527
4,023
5,679
FY 2008 FY 2009 FY 2010 FY 2011 FY 2012 FY 2013 FY 2014 1.HY 2015
1. About us: increase in customers
5
Source: FinTech Group
Growing number of B2C customers
Source: FinTech Group
Development of assets under administration
Steady and organic B2C growth
Increasing share of wallet
Asset volume of EUR 35,000 per customer on average
(million EUR)
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
6
1. About us: half-year results 2015
FinTech Group AG underpins growth strategy with strong half-year operating profit
Modified EBITDA under German GAAP of EUR 11.7m in the first half year 2015
XCOM AG fully consolidated for the first time following integration in second quarter
Number of executed transactions sets record high (total of 5m trades in the group in the first 6 months)
biw AG setting-up a technology-based lending business following bolstering of capital
1. About us: guidance
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
Development of net revenues, EBITDA and EBITDA margin
Source: FinTech Group
8
1. About us: our business model at a glance
B2B Business B2C Business
Technology and white-label banking
business for third parties
Business models operated by FinTech
Group AG under own brands
B2B Brands B2C Brands
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. 145,000 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
(100% subsidiary of XCOM)
9
1. About us: B2B Service Portfolio
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
(100% subsidiary of XCOM AG)
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.)
Start of
CFD-
Trading
1. About us: company history
10
IPO
flatex AG
Incorporation of
PRE.IPO AG
in Kulmbach
Change of
name to
flatex AG
Incorporation
XCOM BCC
in Langen
Merger of 12
group
companies
XCOM AG
Acquisition of
XCOM-Bank
Incorporation of biw AG
für Investments und Wertpapiere AG
(minority stake in the beginning)
Investment
in ViTrade AG
Full take-over of biw AG (100%) für
Investments und Wertpapiere AG
New owner
FinTech
Group AG
1999 2003 20121988 2005 2006 201020092008
Aktionärsbank
GmbH obtains
banking license
Acquisition of
CeFDex1
(100%)
flatex Holding
AG FinTech
Group AG
New Senior
Management
Take-over of
strategic
majority in
XCOM AG
2013
Significant
acceleration
20152014
Via XCOM Finanz
GmbH (100%)
100% 100% 67 %
100% 100%
0.75 % 2.25 %
As of 05.02.2016
11
100%
will be
wound down / sold
(SPV)
1. About us: current organisational chart
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: ongoing transformation process
B2C
currently online brokerage
B2B
IT services
B2B
Banking services
via XCOM Finanz
GmbH (100%)
13
100%
100%
up to 100%
100%
uses liability
umbrella of biw
4.0
1. About us: future organisational chart
Peer Group FinTech Group
1. About us: senior management
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
15
Sascha Bochartz Muhamad Chahrour Niklas Helmreich Benon Janos Stefan Müller Bernd Würfel
• Head IT FTG
• Board Member XCOM AG
• Head Finance FTG
• Board Member XCOM AG
• Head B2C FTG
• Board Member XCOM AG
• CEO flatex
• CEO ViTrade
• Head B2B FTG • Head Regulatory Reporting
FTG
• Chief Representative FTG
• Supervisory Board biw AG
• CEO Aktionärsbank
• Board Member XCOM AG
• CEO biw AG
Frank Niehage
• CEO FTG
• Chairman XCOM AG
• Chairman biw AG
• Head Executive Committee
2. Corporate strategy: our ambition
16
Our goal
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)
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
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
2. Corporate strategy: roadmap – next 24 months1
17
EUR m
22.7
85.0
95.0+
-8.0
20.0
35.0
Net Sales
adj. EBITDA
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)
TODAYLast 12 months Next 12-18 months
(1) Guidance does not include revenues and earnings derived from “additional upside“; some of the planned measures may already be implemented within the next six (6) months
and thus positively effect the 2015 P&L statement.
(2) Adj. EBITDA includes operations related interest income and expenses
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
Fixed agenda Additional upside
2014 2015 2016
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
18
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).
2. Corporate strategy (1): flatex as „Bank 4.0“
We seek to expand into other European countries in 2015/16 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.
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.
19
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.
2. Corporate strategy (2): technology-based lending
Recent statistics and surveys show that there is an appetite for convenient
and digital consumer lending.
20
We developed our own multichannel mobile payment system which has
been rolled out in Germany in 2016.
2. Corporate strategy (3): fostering own FinTech ideas
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.
21
2. Corporate strategy (3): kesh – our payment solution
→ transfer money→ demand money → transfer of address data
→ payment approval in kesh
Webshop
→ collect contacts→ collect favorite dealers
Kasse
payments among individuals
Zahlung im Online-Handel
„social banking“
payments in ecommerce
→ connection to third systems via API
backend integration
→ voucher code→ browser-access
value added-services
→ smartphone / tablet→ monitor with internet access→ integration in cash register system
Kasse
payment at POS
→ withdraw money from kesh-account→ load money into kesh with EC/credit card
interaction with cash machines
22
2. Corporate strategy (4): FinTech campuses
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
23
2. Corporate strategy (4): FinTech campuses - impressions
24
2. Corporate strategy (4): FinTech campuses - impressions
3. Strategic partnerships (ETPs and CFDs)
25
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
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
In June 2015 we closed a strategic long-term CFD partnership with Commerzbank
In February 2016, entered into a strategic Joint Venture with Morgan Stanley
26
Annexes
27
Market opportunity: banks and FinTech companies
Source: Paymentandbanking.com
2828
Source/figures: Barkow Consulting
45,1
16,5
49,0
9,68,0
6,0 5,6 5,0 4,85,1
FinTech group comparable FinTech company Bank
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)
Market cap in USD
bn
Wirecard, as a FinTech Group comparable, shows a revenue
multiple of 8.5x - Our revenue multiple today is ~3.0x
Market opportunity: banks vs. FinTech “unicorns”
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
29
Market share of online banking users in Germany
Source: Bitkom, Eurostat
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
Source: statista
Share of e-banking users 2014 (%) Mobile banking usage (%)
Market opportunity: online banking
North America59.5%
Europe10.2%
Asia11.7%
Others18.6%
Market opportunity: fintech market
30
Nearly 60% (9.887m 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
Source: Accenture, CB Insights
Source: „Money of the Future“ Life.SREDA
Broad spectrum of fintech
technology
High upside potential: P2P
lending/online lending and mobile
wallets
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
Other
Regional distribution of fintech investments
Share of total investments in fintech companies globally in 2014 (%)
31
Market opportunity: from offline to online
31
Online saturation
of markets
Advertising
Commerce
Travel
Agency
Financial
Services
low high
…..
HUGE POTENTIAL
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 and creating new B2C
businesses
e.g.:
e.g.:
e.g.:
323232
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: only 4 sectors are truly “online”
33
Market opportunity: rise of virtual banking
Threat to retail banking from new market
participants: next 3 years (International)
Source: Roland Berger (2014)
Threat to retail banking from new market
participants: next 3 years (Germany)
Source: Roland Berger (2014)
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
% of those surveyed, by product,
international, n=60 banks from 15 countries
% of respondents, by product, Germany,
n=60 banks from 15 countries
34
Market opportunity: banks and FinTech companies
Source: Paymentandbanking.com
35
THANK YOU
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-looking statements.
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 on FinTech 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.