CORPORATE PRESENTATION - CORPORATE PRESENTATION flatexDEGIRO AG | August 2021
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CORPORATE PRESENTATION CORPORATE PRESENTATION flatexDEGIRO AG | August 2021
At a glance
Investment highlights
First, largest and fastest growing pan-European discount broker, well-positioned to consolidate a highly fragmented
market
Benefiting from near-term market volatility as well as long-term secular trends that are increasing the addressable
market
Best-in-class product portfolio and highly competitive pricing drive impressive customer growth and leading
positions in several European countries
Fully fledged online bank (no brick and mortar branches) with full German banking license & EU passport, a
scalable proprietary core banking system and clear cost leadership
Homegrown, scalable and recently modernized IT infrastructure with more than EUR 30 million invested over last
three years
Entrepreneurial, top interdisciplinary management team that is significantly invested in the business
→ Corporate Presentation | August 2021 | Page 3
flatexDEGIRO at a glance
Online Brokerage including Credit and Treasury
▪ Leading European online broker serving highly active private investors and traders in 18 countries
▪ Operating under German banking license with EU passport enhances customer monetization and provides ancillary services to core online brokerage
business
▪ Strong positioning in Germany, Netherlands and Austria with enormous potential to increase significantly European market share
Revenue Model and Contribution
▪ Online brokerage ▪ Credit and treasury
(Commission income from clients and intelligent exchange and (Interest income on collateralized margin loans and low-risk
product partner partnerships) treasury investments)
Key Operating Metrics 2020
Number of Number of exchanges and Executed Trade Securities Customer
Executed trades
Customers OTC-partners Volume L12M* under Custody Cash Deposits
>1.25 m >60 >75 m >EUR 275 bn ~ EUR 30 bn ~ EUR 2 bn
Credit Book Average Interest Rate Return on Markets Employees
Balance Sheet Equity
(collateralized) (Loan Book) Tangible Equity
~EUR 1.1 bn >3% p.a. ~ EUR 450 m >65 % 18 countries ~ 1,000
→ Corporate Presentation | August 2021 | Page 4
Strong sustainable growth of clients and trades..
Number of customers (million) Average trades per Total number of trades
customer/year (million)
73 75
1.25
62
58
52
0.80 46
37
0.60
30 31
0.46 26
0.32 20
16
0.24
2015 2016 2017 2018 2019 2020 2015 2016 2017 2018 2019 2020 2015 2016 2017 2018 2019 2020
→ Corporate Presentation | August 2021 | Page 5
..results in exceptionally strong financials..
Revenues Adjusted EBITDA Operating Cashflow
(EUR million) (EUR million) (EUR million)
CAGR +45% CAGR +63% CAGR +169%
261 114 141
132
125
43
38 46
19
2018 2019 2020 2018 2019 2020 2018 2019 2020
2020 based on preliminary figures
→ Corporate Presentation | August 2021 | Page 6
..which further accelerated in Q1 2021
Number of Brokerage Number of Transactions Revenues (million) &
Customers (million) (million) Adj. EBITDA margin
+78%
+94% +176%
+29%
+60% +40%
1.61
33.59 134.91
1.25
1.11 96.64
1.01
0.91 20.31 21.05
17.33 65.07
16.33 Q1/21
48.90 50.87 54.2%
FY/20
43.6%
Mar 2020* Jun 2020* Sep 2020 Dec 2020 Mar 2021 Q1/20* Q2/20* Q3/20* Q4/20 Q1/21 Q1/20 Q2/20 Q3/20 Q4/20 Q1/21
* pro forma → Corporate Presentation | August 2021 | Page 7
Business model
Fastest growing online brokerage with excellent
risk-return profile
▪ Fastest growing online brokerage business in Europe with more 1.25m retail clients doing
75m transactions* in 2020
▪ Market share of >20% in Germany, >40% in Austria and >35% in Netherlands in terms of online
Market Leader brokerage transactions* (total est. # of transactions: 100m in Germany, 20m in Austria, 50m in
with High Value Netherlands**)
Clients
▪ Most trading-active client pool in the brokerage market (2-3 times the average of direct peers*)
▪ Dedicated brokerage offering with focused marketing strategy minimizes operating expenses
(cost per client acquisition less than EUR 50 vs. EUR 300-500 CPA at competitors)
Fully
Independent ▪ Only major bank-independent broker with German banking license and European passport
Platform and ▪ Full value chain under one roof, thus highly scalable platform with significant operational leverage
Banking ▪ Homegrown core banking system with outstanding expertise in transaction banking
License
▪ Brokerage agency only with no “black swan risks” (WTI, SFR unpeg) due to no market making,
Excellent Risk no trading book and no trading liquidity risk
Profile
▪ Positively geared to volatility with natural profit hedge to downturns
* Pro forma ** Source: Company, competitor and market data
→ Corporate Presentation | August 2021 | Page 9
Our competitive edge: the triple „P“
▪ Top notch product offering including equities, bonds, ETPs, ETFs and mutual funds
Product ▪ Market leading ETP offering of Goldman Sachs, Morgan Stanley, Société Générale, UBS,
BNP Paribas, HSBC, Vontobel and other products
▪ Trading platform only – no research, recommendation or intelligence – avoiding regulatory
administration and costs
▪ Originally designed by traders for traders and has migrated to a platform that caters to a wide range
Platform of investors
▪ Economies of scale: each additional trade reduces cost per trade settlement –
internal cost per trade down > 40% from EUR 1.44 (2019) to EUR ~0.80 (2020)
▪ Unlimited trading possibilities with a flat pricing model of max. EUR 5.90 per transaction –
regardless of type of asset (stocks, bonds, ETPs, ETFs, etc.) and transaction amount
Pricing
▪ Competitive technology edge due to self-developed, highly scalable security execution/
settlement infrastructure ensures sustainable cost leadership
→ Corporate Presentation | August 2021 | Page 10High level of recurring revenues
▪ High level of recurring revenues generated by loyal and sticky customer base
Maturity profile of our trading
customers ▪ Exceptionally strong customer growth particularly in 2020 has driven up relative share
of trading educated new customers
4%
27% Trades by
customer onboarding
67% 29%
46%
Actual year (Y0)
2014* 2020 Y-1 to Y-2
> Y-2
28%
* excluding DEGIRO
→ Corporate Presentation | August 2021 | Page 11Winning the “right” customers
▪ > 50% of customers in the most sustainable and attractive age bucket of 25-44 years
flatex grows in customers in ▪ Age structure very favourable compared to German average
their best investment age (where less than 35% are in that most attractive age bucket)
▪ Despite growth no change in customer structure from 2019 (outer circle) to 2020
flatex customer
structure vs
German average
26% 18-24 years -5%
25-34 years 10%
17%
German 10%
35-44 years
average* flatex Germany
2020 2020 45-54 years -5%
17% -2%
55-64 years
65+ years -6%
27%
* Based on representative study done by „Aktion pro Aktie“ in August 2020
Note: outer circle 2019, inner circle 2020
→ Corporate Presentation | August 2021 | Page 12Vast majority trades frequently but not heavily
▪ > 90% of customers with max 6 trades per month
Composition of trades ▪ High share of frequent trades (stock and ETF saving schemes)
▪ Buy/Sell ratio of ~ 1.5
> 90%
up to 3 trades/month
2020 3-6 trades/month
6-10 trades/month
more than 10 trades/month
→ Corporate Presentation | August 2021 | Page 13High share of classic assets with high profitability
▪ flatexDEGIRO’s trading mix has shifted towards more profitable & stable products
(cash equities) and away from highly levered OTC products (CFDs and FX)
Composition of trades
▪ Significant absolute increase of highly profitable ETP business based on strong
partnership models
10%
68%
8%
37% 29%
Shares & Bonds
2014* 14% ETPs
2020
ETFs & Funds
Commodities / FX / CFDs
33%
1%
* excluding DEGIRO
→ Corporate Presentation | August 2021 | Page 1460x lifetime return on CAC investment..
Average lifetime customer value (gross revenues) in relation to acquisition costs, EUR
▪ Low customer acquisition costs ~ 120x
driven by secret sauce online
marketing and brand size ~ 6,000
benefits (PR & word of mouth)
▪ High loyalty and stickiness
result in sustainably low historic
churn rates of < 5%
▪ Superb scalability of busines ~ 60x
model with strong operating
~ 3,000
leverage of 85+%
Payback period:
~ 2 months
~ 50 ~ 300
Customer acquisition cost Annual revenue per client Discounted Customer Customer lifetime value -
(CAC) lifetime value @9% undiscounted (CLTV)
(DCLTV)
→ Corporate Presentation | August 2021 | Page 15..with outstanding and increasing ROIs.
Cohort Cohort Cohort Cohort
2018 2019 2020 H1/21
CAC
New customers (gross) in k 162 213 561 531
Marketing expenses in EUR m 10.9 16.0 28.0 17.9
Customer acquisition costs in EUR per customer 67 75 50 34
TRADES
Trades in H1 2021 in m 4.3 5.7 18.5 13.8*
Average trades per customer (basis H1 2021) 26 27 33 26
Annualised average trades per customer (basis H1 2021) 53 53 66 52
REVENUES
Revenues in H1 2021 in EUR m 15.6 20.7 56.4 32.9*
Average revenue per customer in EUR 97 97 101 62
Annualised average revenue per customer in EUR 194 194 201 124**
ROI
Return on Investment p.a. 288% 259% 402% 368%
Break-even in months 4.2 4.6 3.0 3.3
*FY extrapollation
** Due to substantial growth in markets with market-leading fees and limited zero-fee offer for new customers in Germany
→ Corporate Presentation | August 2021 | Page 16Collateralized credit products provide profitable
revenue contribution at minimized risk profile
~€1bn of customer cash deposits @ zero cost of funding*
Generated >€22m of revenue in 2019
Use of customer cash deposits
Credit Treasury & ECB deposits
B2C brokerage credit book Non-brokerage credit book C Treasury D ECB Deposits
A B
(margin loans) (niche portfolio)
Fully collateralized i.a. with Fund investments Pass-through to clients due
customers' securities Fully collateralized with credit to current negative ECB
default insurances Simple products rates
High-growth ▪ Government bonds No positive interest
▪ Municipal bonds income pass-through to
Receivables & asset financing
▪ Corporate bonds customers in case of
LTV up to 50% + opportunistic loans
▪ Interbank loans positive ECB rates
Scalable with B2C growth Opportunistic and strategic niches Short-duration (€350m Volume: €300m Volume: €150m Volume: €1bn
Interest income: (>300bps) Interest income: (>200bps) Other comprehensive income: (Growth drivers
flatexDEGIRO – size, speed and dedication
↗ Realization of our European growth
strategy
↗ Largest pan-European retail online
broker in 18 countries
↗ Cost and innovation leadership with
complete value creation in-house
↗ Improved and more extensive range
of products and venues for both brands
↗ Faster, cheaper and with lower
operating risk than competitors
↗ Significant synergy potential with low
implementation risk
→ Corporate Presentation | August 2021 | Page 19Massive growth potential in continental Europe..
„Underdeveloped G7“: Developed Brokerage markets
∑
Population 285m 68m 26m 17m 111m
Digitized 89% 98% 95% 96% ⌀ 97%
Online banked 55% 84% 90% 91% ⌀ 86%
8% 33% 50% 23% ⌀ 35%
Online brokerage (23m people) (22m people) (13m people) (4m people) (40m people)
Massive structural gap between developed (35%) and
“underdeveloped G7” markets (8%) in online brokered population
Market growth potential of flatexDEGIRO
„underdeveloped G7“ key geographies: 4-5x
Source: company estimate
→ Corporate Presentation | August 2021 | Page 20..driven by strong secular trends..
Next wealth-accumulating and investing generation (Generation Y) not negatively affected by historic stock market
crashes (“What is the DotCom bubble?“)
Increasing digitization will increase the online banked population and thus online brokerage activities
(“I can invest and manage my wealth on my mobile phone.“)
Negative interest rate environment drives people towards investing in alternative value preserving products like
equities (“Saving accounts don‘t generate capital gains.“)
Systematic long-term issues of governmental pension schemes will force people to take actions themselves – see
the developed brokerage nations UK, Nordics and Netherlands with tax-incentivesed investement schemes vs.
non-developed brokerage countries (“Will the existing penison schemes survive the next 30 years?“)
Higher visibility and easier access to a wide selection of known household brands
(“I can invest easily in companies that I like and use.“)
→ Corporate Presentation | August 2021 | Page 21..to be exploited by outstanding market positioning
in 2025: flatexDEGIRO is the fastest growing European online broker
Core markets
> 80 m Company Country Net new % Customers
Development markets
online focus customers Growth 2020
Research markets brokerage 2020
customers
flatexDEGIRO Europe +450k 56% 1.25m
Nordnet Nordics +308k 34% 1.22m
in 2020: Avanza Nordics +304k 31% 1.28m
~ 65 m
comdirect Germany +230k 15% 1.80m
online
brokerage Hargreaves Lans. UK +220k 17% 1.50m
in 2025:
customers
Market share ING Diba Germany +210k 15% 1.64m
of flatexDEGIRO Consors Bank Germany +106k 9% 1.33m
> 4%
AJ Bell UK +62k 27% 0.30m
in 2020: Swissquote Switzerland +51k 14% 0.41m
market share Bourse direct France +45k 27% 0.21m
of
flatexDEGIRO Fineco Italy +12k 1% 1.35m
~ 2% Source: company data for publicly listed companies, press releases and news articles for non-listed companies
→ Corporate Presentation | August 2021 | Page 22Case study Germany: Identification of massive
client potential
What are the brokerage segments based How many people in Germany are
on trading behaviour?* brokerage customers in this segment?*
Heavy-traders (> 100 trades p.a.) less than 10 thousand
Current target
segment
Active traders (from 40-100 trades p.a.) > 1 million
New / extended
target segment
with focus on
more active
customers in
top 1/3
Less frequent traders
(< 40 trades p.a.) > 6 million
Additional potential in new target segment:
1-2 million customers
Note: *Company estimates based on available information
→ Corporate Presentation | August 2021 | Page 23Case study Germany: flatex next – investing for
everyone
flatex next is…
↗ designed for newcomers to the world of
trading
↗ reduced to the essentials, structured in
a clear and simple way, well arranged
↗ attractive new customer offers for a
limited period
↗ revolutionary fast: account opening in
only 5 minutes including video legitimation
↗ designed for mobile use via the app
↗ from the leading retail online broker in
Europe
→ Corporate Presentation | August 2021 | Page 24Tactical focus and outlook
Strategy and rationale for acquisition of DEGIRO
Executes on strategy to expand client reach beyond Germany and Austria faster, cheaper and with lower
operational risk than what could be achieved organically
↗ Immediately creates the largest pan-European retail broker in 18 countries and positions flatex/DEGIRO as a credible,
scaled consolidator in the highly fragmented European brokerage industry
↗ Addition of significant non-German clients diversifies revenue by geography
↗ DEGIRO’s active customer base is a natural fit with flatex’s target customer profile (similar trading activity and asset levels)
↗ Enhances growth profile and trajectory in Europe of undermanaged asset potential with that generated an average annual client
growth of close to 50% over the last 3 years
Improve product offering for both brands
↗ DEGIRO offers futures & options and flatex does not
↗ flatex offers extended trading (8:00am – 10:30pm) and DEGIRO does not
Leverage highly achievable, low-hanging fruit synergies with limited integration risk
↗ Economies of scale around IT, trading costs and other operating expenses
↗ Increases bargaining power with suppliers, product partners and exchanges
↗ Leveraging of flatex’s banking and regulatory infrastructure
→ Corporate Presentation | August 2021 | Page 26Strategic priority – DEGIRO Synergies
Stronger product partner One banking license
economics and lower and one corporate One bank
One flow transaction costs infrastructure
Synergies: €15-20m EUR 200 bn annually Two brands Synergies: €3-5m
Central architecture
Access to 1m customers
(based on Java /C++)
One IT One firm
Combined marketing/
Combined data center
bargaining power
Synergies: €10-15m Synergies: €3-5m
Annual synergies of EUR >30m
→ Corporate Presentation | August 2021 | Page 27..which is expected to continue in 2021 and beyond.
Number of Brokerage Average Number of Trades Number of Trades
Customers 7-8
per Customer/year (in million)
250-350
(in million)
73
55-65
45
> 35
90-110
2.0-2.2 75.0
1.25
0.8 31.4
2019 2020(A) 2021(e) Vision 2019 2020(A) 2021(e) Vision 2019 2020(A) 2021(e) Vision
(pro forma) 2026 (pro forma) 2026 (pro forma) 2026
VISION 2026
7-8m customers 250-350m trades p.a.
(even in a year with low volatility)
→ Corporate Presentation | August 2021 | Page 28Solid track record of doubling customer base
Number of Brokerage
Customers (million)
• flatexDEGIRO doubled customer base
every two years since 2014
• Continous growth irrespective of market
environment and volatility
• Scale effect becoming more and more
sizeable with growing absolute number
of new customers
• With 1.6m customers after Q1/2021,
flatexDEGIRO has already gone 20% of
the „next step“ with seven more quarters
to come
* pro forma → Corporate Presentation | August 2021 | Page 29Annex
Corporate information
Our management board
Frank Niehage has vast experience across all segments of retail and
commercial banking, working as Managing Director at Goldman Sachs
until August 2014 when he joined flatexDEGIRO AG. In previous
positions, he was instrumental in the growth of Bank Sarasin AG as CEO
in Germany. Prior to this he had served in various senior positions at
Commerzbank, Credit Suisse, UBS and international law firm Beiten
Burkhardt, both in Germany and internationally, especially in Asia. Frank
is an attorney at law in Germany and has received his Master of Laws
majoring in international economics from the University of Houston Law
Center.
Before joining flatexDEGIRO AG in 2015, Muhamad Said Chahrour
was CFO at Lamudi, one of Rocket Internet SE’s core ventures, and
primarily responsible for the financial funding and investor relations of
the global entities. He previously worked in M&A and Transaction
Services at UBS and pwc. Muhamad has a strong track record of
excellent work results and exceptional expertise and experience across
the sectors of corporate finance, credit and investment management,
and business development. Muhamad holds a Master of Science degree
in quantitative finance from the University of Bath School of
Management.
Frank Niehage, LL.M. Muhamad Said Chahrour, M.Sc.
Chief Executive Officer (CEO) Chief Financial Officer (CFO) flatexDEGIRO AG
flatexDEGIRO AG & flatex Bank AG Managing Director flatex Bank AG
→ Corporate Presentation | August 2021 | Page 32Diversity at work – our success is based on the
competence, commitment and flexibility of our team
#diversity
matters
→ Corporate Presentation | August 2021 | Page 33ESG status
Key achievements
• Successful completion of a materiality analysis and identification of material topics
• Appointment of an ESG officer (qualification as “Sustainability Manager (TÜV)”)
• ESG-relevant topics have been included as a regular component of the
Group's Governance Committee
Next steps
• Finalization of ESG strategy in progress (Q1/2021)
• Publication of the non-financial statement/sustainability report together with the
Annual Report 2020
• Intended to join the United Nations Global Compact in the first quarter of 2021
(further memberships under review)
→ Corporate Presentation | August 2021 | Page 34flatexDEGIRO AG - our shareholder structure
12.9% GFBK
(entity of flatex founder)
7.5m newly issued shares
to former DEGIRO
shareholder, incl. founders 5.2% Heliad Equity Partners
and employees
4.0% flatexDEGIRO management
27.3m
shares
outstanding*
77.8% free float
* excluding additional approx. 450k management options exerciseable over the next three years
→ Corporate Presentation | August 2021 | Page 35Our stock – a continuing success story on the
capital market
SHARE PRICE DEVELOPMENT LTM
130 EUR
06/29/2021
117.10 € Shares outstanding: 27,426,137
120 EUR
110 EUR Options outstanding: max. 0.5m
100 EUR
90 EUR
Market EUR 2.4 bn
29/12/2020 capitalisation: (as of 2021-08-05)
80 EUR
62.60 €
70 EUR SDAX
Regulated market /
60 EUR Listed:
PRIME Standard /
50 EUR Frankfurt Stock Exchange
04/02/2020
40 EUR 26.60 €
30 EUR ISIN: DE000FTG1111
20 EUR
Apr-20 Jun-20 Aug-20 Oct-20 Dec-20 Feb-21 Apr-21 Jun-21 Aug-21 Bloomberg: FTK GR Equity
Stock covered by:
May 2021 Aug 2021 Apr 2021 Aug 2021
PT EUR 170.00 PT EUR 146.00 PT EUR 120.00 PT EUR 96.00
Buy Buy Buy Hold
Aug 2021 Aug 2021 Aug 2021
PT EUR 140.00 PT EUR 141.00 PT EUR 150.00
Buy Buy Buy
→ Corporate Presentation | August 2021 | Page 36Financial calendar 2021
Financial Publications 2021
30 August 2021 Half-year Report 20201
9 November 2021 Interim Management Statement Q3/2021
Investor Conferences 2021
August 2021 Montega, HIT Conference
September 2021 Berenberg/Goldman Sachs, German Corporate Conference
November 2021 DZ Bank, Equity Conference
December 2021 Berenberg, Pennyhill
→ Corporate Presentation | August 2021 | Page 37Contact
Achim Schreck flatexDEGIRO AG
Head of IR and Corporate Communications Rotfeder-Ring 7
60327 Frankfurt/Main, Germany
Mobile +49 160 92774570
Phone +49 69 450001 1700
Mail: achim.schreck@flatexdegiro.com www.flatexdegiro.comYou can also read
