Results presentation Year ended 31 March 2016
Introduction Peter Cruddas - Group Chief Executive Officer
Introduction Key Highlights � Successful IPO � Strong growth across all key metrics and significant progress on all strategic initiatives � Number of trades up 50%, value of trades up 27% � Revenue per active client (RPC) up 4% to £2,828 � Underlying EPS up 23% to 18.0 pence � Final dividend of 5.36 pence; total dividend of 8.93 pence (10.72 pence including special dividend) � Strong cash position to facilitate growth with a robust balance sheet and regulatory capital position � Confident of meeting targets Analyst presentation � Pg 3
Financials Grant Foley - Group CFO
KPIs Strong underlying growth Net operating income 3 (£m) Active clients 1 and Revenue per active client 2 (£) Turnover (£bn) and Trades (m) 2,828 66.8 +18% +18% 2,716 +18% +18% 169.4 143.6 44.6 122.0 2,374 33.0 57,329 2,071 1,626 50,303 1,351 48,006 2014 2015 2016 2014 2015 2016 2014 2015 2016 Turnover (£bn) Trades (m) Active clients¹ Revenue per client² Profit Before Tax (£m and margin) Profit after tax (£m) Dividends per share and Basic EPS (pence) 15.1 +20% +20% +24% +24% 12.4 1.8 +61% +61% +71% +71% 62.4 50.7 8.6 51.9 40.9 53.4 43.5 8.9 42.5 34.7 32.2 5.7 4.3 24.0 37% 36% 26% 2014 2015 2016 2014 2015 2016 2014 2015 2016 Underlying Profit After Tax ⁵ (£m) Underlying PBT² (£m) Special dividend per share Statutory PBT (£m) Dividend per share Profit After Tax (£m) Underlying PBT margin Basic EPS 1. Active clients represent those individual clients who have traded with or held CFD or spread bet positions with CMC Markets on at least one occasion during the financial year. 2. Trading revenue generated from CFD and spread bet active clients. 3. Net operating income represents total revenue after rebates payable to introducing partners who are not themselves trading counterparties and betting levies. 4. Underlying PBT represents PBT before exceptional items. 5. Based on implied tax payable excluding exceptional items Analyst presentation � Pg 5
Income statement Increasing revenue generated from growing client base 2016 Group (£m) 2015 YoY % H1 H2 Full Year � Strong net operating income growth driven by increase in Net operating income 1 78.9 90.5 169.4 143.6 18% active client numbers and trading activity Operating expenses (49.1) (51.1) (100.2) (83.9) (19%) � New Countdowns product Depreciation, amortisation and successfully launched globally (3.6) (3.2) (6.8) (7.8) 13% finance costs during the year, generating revenues of £4.3m Underlying Profit before tax 2 26.2 36.2 62.4 51.9 20% � Controlled cost increase with Other income 1.6 1.5 3.1 - - investment in key areas of the business to drive growth Exceptional costs (1.3) (10.8) (12.1) (8.4) (43%) initiatives � Underlying PBT growth of 20% Profit before taxation 26.5 26.9 53.4 43.5 23% � Continuing investment in business has not been to the Underlying Profit after tax 3 50.7 40.9 24% detriment of underlying PBT margin Profit after tax 20.0 22.5 42.5 34.7 22% 1. Net operating income represents total revenue after rebates payable to introducing partners who are not themselves trading counterparties and betting levies. 2. Underlying PBT represents PBT before exceptional items. 3. Based on implied tax payable excluding exceptional items Analyst presentation � Pg 6
Net operating income Turnover 1 and trades Breakdown by product 2,500 80 Group (£m) 2016 2015 YoY % CFD and spread bet (including 162.2 136.6 19% 70 binaries) net revenue 2,000 Stockbroking 5.2 5.1 3% 60 Interest income 1.8 2.1 (17%) 50 Sundry income 0.2 (0.2) - Turnover (£bn) 1,500 Trades (m) Net operating income 169.4 143.6 18% 40 1,000 � Growth in CFD and spread bet revenue driven by increase in 30 active clients and trading activity � Countdowns released 20 th July 2015, providing £4.3m revenue 20 � Stockbroking remained relatively consistent despite the 500 backdrop of a weaker Australian dollar 10 � Lower interest income as a result of reduction in interest rates in Australia � Performance aided by higher levels of market volatility 0 0 Turnover Trades 1. Turnover represents the notional value of client trades. Analyst presentation � Pg 7
Net revenue 1 bridge (£m) 34.2 162.2 Existing clients: (£10.9m) 6.6 (17.5) 136.6 2.3 New and returning clients: £36.5m 2015 Net revenue Existing clients trading Existing clients stopped Returning clients New clients 2016 Net revenue more trading 1. Net revenue generated from CFD and spread bet active clients, including Countdowns, after the impact of rebates and levies. Analyst presentation � Pg 8
Retail volume rebate 1 bridge (£m) Existing clients: £1.4m 2.0 10.5 1.9 (0.5) 0.1 7.0 New and returning clients: £2.1m 2015 retail rebate Existing clients trading Existing clients stopped Returning clients New clients 2016 retail rebate more trading 1. Revenue is presented net of volume rebates in the financial statements. Analyst presentation � Pg 9
Revenue per active client 1 (RPC) Growing active client base and RPC 70 3,000 2,828 2,716 � Active client growth across all regions 60 2,500 2,374 � Client growth has not reduced quality of Active clients (000's) 50 clients with overall RPC up 4% to £2,828 22 RPC (£) 2,000 40 20 � RPC continues to be one of the highest in 20 the industry 30 1,500 18 � Increased RPC after paying a record 15 14 20 £10.5m to retail client in rebates 1,000 10 � H1 RPC of £1,707 vs H2 RPC of £1,871 17 15 14 - 500 2014 2015 2016 UK APAC & Canada Europe RPC (£) 1. Trading revenue generated from CFD and spread bet active clients. Analyst presentation � Pg 10
Revenue trend Increasing average daily revenue 1 Reducing loss days 673 11.0% 10.3% 8.4% 566 476 2014 2015 2016 2014 2015 2016 CFD and spread bet loss days % Average daily CFD and spread bet trading revenue (£000s) 1. Revenue represents total trading revenue generated from CFD and Spread bet clients before the impact of Rebates & Levies. Analyst presentation � Pg 11
Performance by region Revenue growth driven by increasing client numbers and quality UK revenue bridge (£m) Europe revenue bridge (£m) 7.7 63.1 6.8 3.8 (0.7) 48.6 48.5 45.4 2015 Net Active client RPC growth³ 2016 Net 2015 Net Active client RPC growth³ 2016 Net revenue¹ growth² revenue¹ revenue¹ growth² revenue¹ APAC & Canada revenue bridge (£m) � Strong growth in active clients across all regions � RPC growth in UK driven by continuing to attract quality clients; our premium client proposition is now well established in the UK 9.5 (1.5) 50.6 � Good growth in Europe with active clients up 8%, offset by a fall in RPC due to an increased number of new clients in H2 42.6 � Very strong active client growth in APAC & Canada up 23%, impact on RPC due to the number of actives increasing throughout the year 2015 Net Active client RPC growth³ 2016 Net revenue¹ growth² revenue¹ 1. Net revenue generated from CFD and spread bet active clients, including Countdowns, after the impact of rebates and levies. 2. Active clients represent those individual clients who have traded with or held CFD or spread bet positions with CMC Markets on at least one occasion during the financial year. 3. Change in net revenue per active client. Analyst presentation � Pg 12
Customer lifecycle Improving client tenure Client tenure (in months) 2016 Revenue by client tenure 36 34 32 Client Tenure 31 31 28 26 24 0-6M 21% 6-12M 35% 1-2YR 2-3YR 14% >3YR 13% 2013 2014 2015 2016 17% Standard Premium¹ Client churn 57,329 � Positive client churn 50,303 48,006 � Typical client tenure of over 2½ years � 48% of revenue was generated from clients that have been with CMC for over 2 years 2014 2015 2016 Continuous traders New traders Reactivated Stopped Trading 1. Premium clients are calculated based on internal revenue metrics. Analyst presentation � Pg 13
Operating costs Controlled cost growth to support strategic focus 2016 % of NOI Group (£m) 2015 YoY % Full � Total underlying operating cost¹ H1 H2 2016 2015 Year increase of 19% driven by increasing headcount and Net staff costs 21.9 24.2 46.1 40.7 13% 27% 28% marketing expenditure � Increased headcount as part of IT costs 5.9 6.8 12.7 11.4 11% 7% 8% investment in key areas to support growth initiatives Sales and marketing 7.5 10.8 18.3 13.7 34% 11% 10% � Marketing spend has grown in Premises 2.4 2.4 4.8 5.6 (14%) 3% 4% line with NOI and remains within guidance of 10-12% Legal and Professional 1.6 2.0 3.6 2.9 24% 2% 2% fees Regulatory fees 2.4 0.3 2.7 2.1 29% 2% 1% Other 7.4 4.6 12.0 7.5 59% 7% 5% Total operating expenses before 49.1 51.1 100.2 83.9 19% 59% 58% exceptional costs Exceptional costs 1.3 10.8 12.1 8.4 43% 7% 6% Total operating 50.4 61.9 112.3 92.3 22% 66% 64% expenses 1. Operating costs excluding exceptional items. Analyst presentation � Pg 14
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