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Smartbroker Holding AG
Investor Presentation • Feb 22, 2024
4535_ip_2024-02-22_fe496cfc-8099-49d6-872d-6730a59feae6.pdf
Investor Presentation
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22 FEBRUARY 2024
RESULTS PRESENTATION
Preliminary Results FY2023
DISCLAIMER
This presentation has been prepared by Smartbroker Holding AG ("Smartbroker Holding") and comprises the written materials/slides for a presentation concerning Smartbroker Holding, its group companies and the product Smartbroker. By attending this presentation and/or reviewing the slides you agree to be bound by the following conditions. The distribution of this document in certain jurisdictions may be restricted by law and persons into whose possession this document comes should inform themselves about, and observe, any such restrictions. This presentation is for information purposes only and the information contained herein (unless otherwise indicated) has been provided by Smartbroker Holding. It does not constitute an offer to sell or the solicitation, inducement or an offer to buy shares in Smartbroker Holding or any other securities. Further, it does not constitute a recommendation by Smartbroker Holding or any other party to sell or buy shares in Smartbroker Holding or any other securities and should not be treated as giving investment, legal, accounting, regulatory, taxation or other advice. This presentation has been prepared without reference to any particular investment objectives, financial situation, taxation position and particular needs. In case of any doubt in relation to these matters, you should consult your stockbroker, bank manager, legal adviser, accountant, taxation adviser or other independent financial adviser. The information contained in this presentation has not been independently verified, and no representation or warranty, express or implied, is made as to the fairness, accuracy, completeness or correctness of the information contained herein and no reliance should be placed on it. To the extent permitted by applicable law, none of Smartbroker Holding or any of its affiliates, advisers, connected persons or any other person accept any liability for any loss howsoever arising (in negligence or otherwise), directly or indirectly, from this presentation or its contents or otherwise arising in connection with this presentation. No representation or warranty, either express or implied, is provided in relation to the accuracy, completeness or reliability of the information contained herein. This presentation contains forward-looking statements that are subject to risks and uncertainties. Statements contained herein that are not statements of historical fact may be deemed to be forward-looking information. When we use words such as "plan", "believe", "expect", "anticipate", "intend", "estimate", "may" or similar expressions, we are making forward-looking statements. You should not rely on forward-looking statements because they are subject to a number of assumptions concerning future events, and are subject to a number of uncertainties and other factors, many of which are outside of our control, that could cause actual results to differ materially from those indicated. These factors include, but are not limited to, the following: (i) market risks: principally economic price and volume developments; (ii) dependence on performance of major customers and industries, (iii) our level of debt, management of interest rate risk; (iv) costs associated with regulation relating to providing financial services; (v) inflation, interest rate levels and fluctuations in exchange rates; (vi) general economic, political and business conditions and existing and future governmental regulation; and (vii) the effects of competition. Any assumptions, views or opinions (including statements, projections, forecasts or other forward-looking statements) contained in this presentation represent the assumptions, views or opinions of Smartbroker Holding as of the date indicated and are subject to change without notice. Smartbroker Holding neither intends, nor assumes any obligation, unless required by law, to update or revise these assumptions, views or opinions in light of developments which differ from those anticipated. All information not separately sourced is from internal company data and estimates. Any data relating to past performance contained herein is no indication as to future performance. The information in this presentation is not intended to predict actual results, and no assurances are given with respect thereto.
TODAY'S PRESENTERS
ROLAND NICKLAUS
CEO, Founder
CFO
01 | INTRO
EXECUTIVE SUMMARY
2023 was our last full transition year
ACCOMPLISHMENTS
- − Launch of SMARTBROKER+ in August 2023
- − Migration of SB 1.0 clients in October 2023
- − Retention of non-migrated customers
- − New S+ commercial model and tech stack
- − Team and organisational structures in place for further product innovation and growth
- − S+ received multiple awards (Stiftung Warentest Finanztest Dec. 2023)
- − Delivered on revised financial guidance 2023
CRITICAL ISSUES THAT WE ARE ADDRESSING
- − Temporary customer services issues following the migration
- − Resulting in poor customer reviews and currently low online ratings for S+, although reasons are unrelated to S+ product (but to migration)
- − Temporary increase in churn rates
- − Delayed resumption of new customer acquisition initiatives
DEVELOPMENT PIPELINE 2024
OKT 2023
Move of existing SB1.0 clients onto the SMARTBROKER+ platform (after receipt of customer consent, opening of new securities account, new KYC)
Q4 2023
- Savings plans
- International Stock Exchanges
- Sub Accounts
- Shares CH
Q1 2024
- Margin Loans
- Expansion of S+ Filtering and Trading Functionalities in particular on Web Version
- Foreign Currency Accounts
- RFQ-Orders
- Bonds
Q3 2024
• Crypto
• Enhanced Integration of our Media Offerings and Community Content into S+
Q4 2024
Integration of S+ Trading into our Digital Media Offerings/ Web Portals
PRELIMINARY RESULTS 2023
2023 FINANCIAL STATEMENTS
Basis of Preparation – Smartbroker Holding AG Consolidated Accounts
- − Consolidated, preliminary, unaudited accounts based on German HGB
- − 2023: No material changes in the composition of the Group versus 2022 all year-on-year development organic
- − 2022: First year with full twelve months consolidation of Smartbroker AG
- − First-time audit by Dohm Schmidt Janka Revision und Treuhand AG Wirtschaftsprüfungsgesellschaft, Berlin, who were appointed as auditors for the group and all main group entities, replacing BDO who audited the same group scope in FY 2022
- − Introduction of monthly reporting of operational KPIs in January 2024
- − Final, audited results to be published in June 2024
2023: FINAL TRANSITION YEAR
RESULTS OVERVIEW
Top line and EBITDA impacted by S+ transition and challenging market environment
Copyright © Smartbroker Holding AG 22 February 2024 * Please note: 2021 revenue value represents HGB pro forma revenue, incl. Smartbroker AG (previously wallstreet:online capital AG) fully consolidated from 1 January 2021; In accordance with the management information system (MIS), the FY2021 proforma revenue would amount to €51.4m, without any material effect on the EBITDA. CAC: client acquisition cost for Smartbroker
REVENUE SPLIT & OPERATIONAL KPIS
Operational KPIs impacted by move of customers to S+ and elimination of zero-balance brokerage accounts
| in €m | 2023 | 2022 | Change in % |
|---|---|---|---|
| Revenue | 46.3 | 52.8 | (12 %) |
| of which Transaction | 18.2 | 18.7 | (3 %) |
| of which Media | 28.1 | 34.1 | (18 %) |
| End of 2023 |
End of 2022 |
Change in % | |
|---|---|---|---|
| Brokerage accounts (in k) | 180 | 267 | (32 %) |
| Assets under custody (in €bn) | 9.4 | 9.2 | 3 % |
| Ø Assets under custody per account (in €k) | 52 | 34 | 52 % |
| Ø Trades per account (annualized) | 25 | 18 | 38 % |
2023 SEGMENT REVENUE AND EBITDA
Media profitability suffered due to challenging market environment; Transaction affected by S+ development costs
| in €m | Group | Media | Transaction |
|---|---|---|---|
| Revenue | 46.3 | 28.1 | 18.2 |
| EBITDA before CAC | 1.0 | 5.7 | (4.7) |
| Margin | 2 % | 20 % | neg. |
| Customer acquisition cost (CAC) | (0.5) | 0.0 | (0.5) |
| EBITDA after CAC | 0.5 | 5.7 | (5.2) |
| Margin | 1 % | 20 % | neg. |
2023 EXPENSES
Operating items: managed expansion due to S+ development and S+ infrastructure requirements
| in €m | 2023 | 2022 | Change in % |
|---|---|---|---|
| Revenue | 46.3 | 52.8 | (12 %) |
| Capitalized own contribution | 2.5 | 2.4 | 4 % |
| Other operating income | 0.9 | 1.4 | (36 %) |
| Data, IT & other materials | (19.6) | (15.6) | 26 % |
| Marketing | (1.6) | (5.5) | (71 %) |
| Personnel | (20.3) | (18.7) | 9 % |
| Other | (7.8) | (8.0) | (3 %) |
| Total OPEX | (49.3) | (47.8) | 3 % |
| Non-recurring items | - | - | - |
| EBITDA | 0.5 | 8.8 | (94 %) |
| add back/ (deduct): Non-recurring items | - | - | - |
| Operational EBITDA | 0.5 | 8.8 | (94 %) |
| Add back: Smartbroker Customer Acquisition Cost |
0.5 | 4.0 | (88 %) |
| Operational EBITDA before CAC | 1.0 | 12.8 | (92 %) |
NON-OPERATING EXPENSES AND CASH FLOW
Non-operating items dominated by depreciation. Last year of significant S+ capital expenditure
| in €m | 2023 | 2022 | Change in % |
|---|---|---|---|
| EBITDA | 0.5 | 8.8 | (94 %) |
| Depreciation | (6.4) | (17.2) | (63 %) |
| of which non-recurring | 0.0 | (12.6) | |
| of which firm value (HGB) | (3.2) | (2.7) | |
| of which fixed and intangible assets | (3.2) | (1.9) | |
| EBIT | (5.8) | (8.4) | 31 % |
| Financial result | 0.1 | (1.5) | nm |
| of which interest | 0.0 | (0.3) | |
| of which other | 0.1 | (1.2) | |
| EBT | (5.7) | (9.9) | 42 % |
2023 CONSOLIDATED BALANCE SHEET
Cash and equity respectively represent 19% and 69% of balance sheet total
| Assets | Equity & Liabilities | ||||||
|---|---|---|---|---|---|---|---|
| in €m | 31.12.2023 | 31.12.2022 | % of total | in €m | 31.12.2023 | 31.12.2022 | % of total |
| Fixed Assets | 41.8 | 36.9 | 66 % | Equity | 43.6 | 49.4 | 69 % |
| Intangible Assets | 38.9 | 33.6 | 61 % | ||||
| Tangible Assets | 1.8 | 1.8 | 3 % | Provisions | 4.3 | 4.0 | 7 % |
| Financial Assets | 1.1 | 1.5 | 2 % | Financial debt | 10.4 | 14.9 | 16 % |
| Current Assets | 20.8 | 36.3 | 33 % | Trade payables | 3.0 | 3.0 | |
| Inventories | 0.0 | 0.0 | 0 % | 5 % | |||
| Trade Receivables | 7.1 | 6.2 | 11 % | Other liabilities | 0.5 | 0.6 | 1 % |
| Other | 1.4 | 2.7 | 2 % | ||||
| Cash & Equivalents | 12.3 | 27.4 | 19 % | Deferred Income | 0.9 | 1.2 | 1 % |
| Prepaid Expenses | 0.9 | 0.7 | 1 % | Deferred Taxes | 0.8 | 0.8 | 1 % |
| Total Assets | 63.5 | 73.9 | 100 % | Total Liabilities | 63.5 | 73.9 | 100 % |
OUTLOOK 2024
PLANNING ASSUMPTIONS
One story with two parts
TRANSACTION
- − First year with full contribution from S+
- − Broader revenue base
- − Mixed market sentiment persists
- − Ongoing investment in S+ product and customer care
- − New customer acquisition to start in the middle of the year
- − 20-30,000 gross customer additions
- − Material increase in revenues
MEDIA
- − Difficult market environment persists
- − Tight cost control but no major cost reduction
- − Controlled ongoing investment in the media assets and their integration into S+
- − Further double-digit revenue decline
GUIDANCE 2024 – CONSOLIDATED GROUP
Revenues expected to grow by 13% based on the middle of the guidance range
| in €m | Low | High |
|---|---|---|
| Revenues | 50 | 55 |
| EBITDA | minus 1 | plus 3 |
Current risks
- Impact of EU Payment for Order Flow Ban
- Impact of EU Digital Services Act
- Further adverse macro-economic or geo-political developments
- Material, unexpected changes in the interest rate environment, in particular policy rates
- Timing of resumption of new customer acquisition activities, velocity of ramp-up
MID-TERM GOALS
Transaction segment to become the main revenue contributor
S+ moving towards profitability
Increase market share
Maintain price leadership and leading customer value proposition
Drive innovation for Transaction & Media One-stop-shop for private investors to inform, learn & invest
MONTHLY KPI REPORTING
January 2024 Angaben nicht HBG, ungeprüft und vorläufig
| 2023 | 2024 | |||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Nov(1) | Dez | Jan | Feb | Mar | Apr | Mai | Juni | Juli | Aug | Sep | Okt | Nov | Dez | |
| Geschäftsbereich Transaktion | ||||||||||||||
| Anzahl Kunden (in Tsd.)2) | 178 | 180 | 175 | |||||||||||
| Betreutes Kundenvermögen (in € Mio.) | 9.205 | 9.400 | 8.901 | |||||||||||
| Ø betreutes Vermögen je Kunde (in TE) | 52 | 52 | 51 | |||||||||||
| Anzahl Trades (in Mio.) | 0,35 | 0,35 | 0,36 | Zukünftige Informationen werden bis zur Mitte des Folgemonats veröffentlicht | ||||||||||
| Ø Anzahl Trades je Kunde p.a. | 24 | 23 | 25 | |||||||||||
| Anzahl Handelstage | 22 | 19 | 22 | |||||||||||
| Geschäftsbereich Media | ||||||||||||||
| Seitenaufrufe Finanzportale (in Mio.) | 178 | 213 | 227 | |||||||||||
| Anzahl Unique User (in Mio.) | 3,0 | 3,0 | 3,8 |
UPCOMING EVENTS
May 2024 | Equity Forum Frühjahrskonferenz Frankfurt June 2024 | Publication of 2023 Annual Report July/ August 2024 | Annual General Meeting September 2024 | Publication of H1 2024 Results November 2024 | Eigenkapitalforum Frankfurt
22 FEBRUARY 2024
THANK YOU
Copyright © Smartbroker Holding AG
The Smartbroker Group operates the Smartbroker – a multiple award-winning next generation broker and the only provider in Germany to combine the extensive product range of traditional brokers with the extremely favorable conditions of neobrokers. The portfolio also includes the digital fund broker FondsDISCOUNT.de. In addition, the Group operates four high-reach stock market portals and related digital media assets (wallstreet-online.de, boersenNews.de, FinanzNachrichten.de and ARIVA.de). With several hundred million monthly page impressions, the Group is the by far largest publisher-independent financial portal operator in German-speaking countries and hosts the largest financial community.