CORPORATE PRESENTATION...flatex - business model of flatex and ViTrade 8 flatex Aktiengesellschaft...

CORPORATE PRESENTATIONflatex AG | August 2019

Financial Services TechnologiesWe got IT

CORPORATE PRESENTATIONflatex AG | March 2020

Operational key figuresand guidance 2019e

flatex Aktiengesellschaft – Financial Services Technologies3

Operational key figures at a glance (pre-acquisition of DEGRIO)

Number ofCustomers

Number of exchanges and OTC-partners

Annualized ExecutedTrades

Annualized ExecutedTrade Volume

Securitiesunder Custody

CustomerCash Deposits

68 ~12.5 m ~150 bn ~13 bn >EUR 900 m

Credit Book(collateralized)

Average Interest Rate (Loan Book)

TIER-1Capital

Return on Equity(before Tax)

Offices Employees

>EUR 400 m ~4.0 % p.a. ~EUR 70 m ~25 % 10 >520

Berlin

Zwickau

Willich

Andernach

Frankfurt a.M. (HQ)

Kulmbach

Dusseldorf

Vienna

>380 k > 50

B2C B2B

NeussLeipzig

22.7

75.2

95.0107.0

119.1133

300

-8.019.7

30.6 32.142.4 40,0

150

80

2014a 2015a 2016a 2017a 2018a 2019e mid term ambition

Net SalesEBITDANet Profit

Track record and mid-term ambition


Acquisition of service provider XCOM/biw to control cost structure and set-up tech in-house expertise

Implemented high class management team and subsequent restructuring actions

Sold CeFDex to Commerzbank to reduce risk structure (strategic partnership)

Restructuring of group operations and implementation of IFRS Reporting

Boost of organic growth of existing B2C business

EUR million

Implement technology based lending and redeveloping treasury with the potential to generate an additional EUR 10+ million

Improved B2C product portfolio with Morgan Stanley ETP partnership

Reorganisationof Group structure and new segmentation into Fin and Tech units

Increased investor relations activities

Implementing B2B strategy: the standard banking platform for private and specialist banks

Building Europe’s leading online brokerage business flatex+DEGIRO

More than 1 million clients

More than 35 million transactions

More than 250 billion annual trading flow

International Expansion –flatex to acquire DEGIRO

Successful expansion to NL with more than 30,000 new client account opening

Doubled number of new client to approx. 80,000

*

* Adjusted for non-operational and non-EBIDTA revenue accounting effect of 6m EUR in 2018

flatex - Executive Committee


Stephan Simmang Frank Niehage Muhamad Chahrour Niklas Helmreich

Co-Head ITChief Technology Officer

CEO flatex AGCEO flatex Bank

CFO flatexAGMD flatex Bank

Head B2CMD flatex Bank

ALL EXCO MEMBERS ARE PART OF THE FOUR-YEAR OPTION PLAN

Jörn Engelmann Steffen Jentsch Jens Möbitz Dr. Benon Janos

CROflatex Bank

Co-Head ITMD flatex Bank

Head Back OfficeMD flatex Bank

Head B2BMD flatex Bank

Business Model

Key Issues in Banking


Digitisation increases the pressure on integration of customers and processes: Despite the support of top management, many companies have not developed an overall strategy yet

Start-ups: New competitors in the market lead to a decomposition of the value chain in banking

Business Analytics is gaining importance in sales: More “soft” customer data (from more sources) exploiting the potential of customer data and more effective customisation of products

Cost structures to the test: The majority of banks are reviewing their cost structure - one focus is IT and possible consolidations

Regulatory: The banking supervision’s (ECB, NFSA) demand on the management of banks are increasing (IT security law, MIFID II, etc.)

Growing market demands affect all banks equally. The developed solutions here in the undifferentiated area will help banks to focus on their core competencies in banking

flatex - business model of flatex and ViTrade


(c75% REVENUE CONTRIBUTION, c35% EBITDA MARGIN)

Self-developed core banking system (FTX:CBS) with outstanding expertise in transaction banking and fully fledge bank with automatized settlement and clearing processes

Fastest growing online brokerage business in Germany and Austria, >300k retail clients doing >12.5m transactions with transaction flow of >EUR 150bn p.a.

Market share of >25% in Germany and >50% in Austria in terms of online brokerage transactions(total est. # of transactions: 50-55m in Germany, 2-3m in Austria)

Most trading-active client pool in the brokerage market(our clients: avg. 40-50 trades p.a. vs. market: avg. 8-12 trades p.a.)

Dedicated brokerage offering with focused marketing strategy minimizes operating expenses (cost per client acquisition less than EUR 100 vs. EUR 300-500 CPA at competitors)

flatex impressions


flatex - our competitive edge: the triple „P“


Platform

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

Competitive technology edge due to self-developed, highly scalable security ordering/ settlement infrastructure ensures sustainable cost leadership with cost per trade (CPT) of currently less than EUR 1.44

Top notch product offering including equities, bonds, ETPs, ETFs and mutual funds

Market leading ETP offering of Morgan Stanley, Commerzbank, Goldman Sachs, UBS, BNP Paribas, HSBC, Vontobel, and other products

Economies of scale: each additional trade reduces cost per trade settlement –doubling the # of transactions reduces CPT by >40%

Trading platform only – no research, recommendation or intelligence – avoiding regulatory administration and costs

Designed by traders for traders

Product

Price

Shares and Bonds37%

flatex - split of total number of trades


Exchange Traded Funds17%

Exchange Traded Products,FX/Commodities/CFD etc.47%

flatex - case study: Prime ETP distributor


BANKS…

Market standard in

the past:

90 : 10split

Partnerships today:

50 : 50split

REVENUE POOL

…TRADED BY CLIENTS

Revenue generation forissuing bank through:

• Inherent interestcomponent

• Bid-ask spread

…OFFERED AT FLATEX……ISSUE ETPs…

German ETP market size notional of around EUR 70bn pa – flatex AG with >15% distribution stake

In the past: product issuing banks kept 90% of the revenue pool - 10% to product distributor

>75,000 flatex-select products issued by Goldman Sachs that clients can trade at no cost

flatex - ETP Premium Partner Model


Goldman Sachs

Morgan StanleyCommerzbankUBS

VontobelBNP ParibasHSBC

flatex - development of brokerage KPIs


Growing Number of B2C customers (thousand)

145.5

176.6

212.0

253.8

290.0

FY 2014 FY 2015 FY 2016 FY 2017 FY 2018

Total Number of Trades flatex Bank (million)

7.7

10.110.5

11.3

12.5

FY 2014 FY 2015 FY 2016 FY 2017 FY 2018

Sou

rce:

Fin

Tec

h G

roup

Sou

rce:

flat

ex A

G

flatex - maturity profile of our trading customers


12 % of the tradesrepresenting customers

who are less thana year with FTX

25 % of the tradesrepresenting customers

who are inbetween1-3 years with FTX

63 % of the trades representing customerswho are more thanthree years with FTX

flatex - volatility is key driver of transactions and revenues


Volatility has reawakened after reaching 20-year record low in 2017 with significant upside potential - resulting in two consecutive record months Jan and Feb 2018 (+40% transactions compared to same period 2017) with strong revenue effect

04.0

1.20

16

04.0

4.20

16

04.0

7.20

16

04.1

0.20

16

04.0

1.20

17

04.0

4.20

17

04.0

7.20

17

04.1

0.20

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04.0

1.20

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04.0

4.20

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04.0

7.20

18

04.1

0.20

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04.0

1.20

19

Trades / Total # of clients

FinTech Group AG

VDAX

HIGH CORRELATION BETWEEN MARKET VOLATILITY AND CLIENTS’ ACTIVITY WITH STRONG UPSIDE POTENTIAL

Brexitvote

Trump election

Jan/Feb2018

Italian Budget

Increase in volatility led to record transaction number of >2 million in Jan/Feb 2018 +40% vs. Jan/Feb 2017

Investment case - DEGIRO

18

flatex and DeGiro - Overview

Founded in 2007 in Netherlands as fund management company

Private, non-listed Dutch company Since 2011: DeGiro brokerage to professional clients Since 2013: DeGiro retail brokerage Asset-light model, no banking license Proprietary IT and trading engine

2019E470k clients18.6m transactions18 countries>200 employees

2019E306k clients11.5m transactions3 countries>500 employees

Founded in 2005 in Germany Exchange listed in Germany (ISIN DE000FTG1111) Since 2006: flatex retail brokerage Since 2014: new management team 2014: Acquisition of IT provider and bank German bank with EU passport Proprietary IT bank system, highly vertically integrated

flatex Aktiengesellschaft – Financial Services Technologies

19

flatex and DeGiro - Unique combination

Highly complementary

Very limitedoverlap

• Presence in 18 countries with onecentral infrastructure & market intelligence

• Rapidly expanding client base in Europe• Access to nearly 50 foreign exchanges• Proprietary trading engine• Efficient execution, clearing and settlement of

the trading flow• Options and Futures product lines• Streamlined operations

(low-cost service center in Sofia)

• Strong regulatory experience• Full German banking license with EU

passport• Strong expertise in IT (proprietary IT

banking system)• Independent of external IT service

providers• Outstanding product portfolio• Extensive network of exchange and

product partners (esp. ETP)• Experienced management team


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flatex and DeGiro - Unique combination

#130m+ trades

in 2019E

in 18 Europeancountries

Largest pan-European retail

broker

Germany>20% market share

Austria>40% market share

Netherlands>35% market share

Further countries with a leading and rapidly growingmarket position

Full product range with access to ~50 foreign exchanges: stocks, bonds, ETPs, ETFs, funds,

options & futures, CFDs, FX

Full value chain in-house

Cost and innovation leadership

Highly comprehensive product/exchange portfolio

Joint client growth rate of over 200.000 clients in 2019E (both DeGiro and flatex each with strong organic

client growth rate of greater 30%)

…and presence in further 11 European countries


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flatex and DeGiro - Synergies at a glance

Synergies: €15-20m

One flow Trading flow

EUR 200b annually

>EUR 750m daily

One banking license and one corporate infrastructure

Two brands

One bank

Synergies: €3-5m

Access to 1m customers

Combined marketing/ bargaining power

Central architecture (based on Java /C++)

Combined data center

One IT

Synergies: €10-15m

One firm

Synergies: €3-5m

Annual synergies of EUR >30m


22

Deal structure and timeframe

Deal Structure Acquisition price: EUR 250m (on a cash and debt free basis)

− Financing through a capital increase against a contribution in kind (“Sachkapitalerhöhung”) with exclusion of subscription rights to existing flatex shareholders

− 7.5m new shares issued at reference price of EUR 25.33/share from flatex authorized capital 2017 & 2018

thereof EUR 60m paid in cash

thereof EUR 190m in flatex shares issued to existing DeGiro shareholders

Indicative timeframe

Acquisition of 9.4% stake in DeGiro B.V. with signing Acquisition of remainder 90.6% after regulatory approval at closing Expected completion of 100% at the beginning of Q2 of 2020


23

Shareholder structure

19.6m sharesoutstanding

62,2% free float

23,6% GFBK(entity of

flatex founder)

9,9% heliad

As of December 2019 Post transaction

27.1m sharesoutstanding

45.0% free float

7.2% heliad

17.1% GFBK(entity of flatex

founder)

27.7% newly issued shares

De Giro founders team and employees

15 beneficiaries

4,3% flatex management

3,1% flatex management


*

* Excluding additional approx. 450k management options exerciseable over next three years

*

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flatex and DeGiro combined - Key metrics

Standalone 2019E

EUR 193m

EUR 54m

EUR 28m

EUR 212m

776k

EUR 133m

EUR 40.3m

EUR 18m

EUR 186m

306k

11.5m

EUR 60m

EUR 13.7m

EUR 10m

EUR 26m

470k

18.6m 30.1m

Revenue

EBITDA

Net Profit

Equity

Brokerage Clients

Transactions

2019E illustrative, pro formacombined


25

Two strong partners combine forces

Mid Term Ambition

Revenue

EUR 300m

EBITDA

EUR 150m

EPS

EUR 3.00


B2B Business

B2B - fully modular self-developed core banking platform(c25% REVENUE CONTRIBUTION, c20% EBITDA MARGIN)

APIs

APIs

OADO

Account/Depot Srv.

ProductionPlatform

Regulatory & SteeringPlatform

Support Platform

SalesPlatform

Layers within the FTX:CBS banking platform Technology

HTML

Objektive-c (iOS)

Java (Android)

REST / SOAP

Entax-BO-ClientOnline branch

Mobile App

Securities Payment Service Cards

HA

Wildfly

Java, Go

C++

SAP ASEDeposit Transaction Service Credit Facilitation Master Data

Wildfly

Java

C++

SAP ASE

ABACUSTicketing Service PortalBatchdata

ArchiveShared Services

PostgreSQL

Oracle

ASCII, XLS / SFTP

FIX / EBICS /SWIFT

CRM / Sales Trading FE

InfoZone / WM

Accounting Controlling Tax Compliance

Regulat. Reporting(Abacus)

Mgmt. Reporting DWH / BI Risk / Liq. Mgmt


B2B - shared services: banking processes and platform


POSITION FLATEX’S AG BANKING PLATFORM AS THE STANDARD PLATFORM FOR PRIVATE AND SPECIALIST BANKS

DATA CENTRES ISO 27001

SEPA SWIFT EXCHANGES …

Application Use Cases

API Layer

flatex PlatformSoftware + Banking

flatexData centre

Financial System Infrastructure

Banks PaymentInstutions

Corporates

API

…

flatexBrokerFintech

Start-ups

API

flatex Bank

Regulatory Umbrella

BPO

SOFTWARE AS A SERVICE

BANKING AS A SERVICE

B2B - client excerpt and case studies


Unique combination of technology and banking know-how enables our clients to build top-class financial products and services

Key partner

flatex AG developed,maintains and runs LOX, the ETP OTC system for Deutsche Bank AG and Commerzbank AG - 3bn price feeds and 50k transactions - per day.

flatex AG was chosen to set-up the technological infrastructure for digital online retail banks in Germany and Austria including providing several respective regulatory banking processes.

flatex AG is the central IT service provider for the Federal Association of German Banks, providing key technology platform to run the German Deposit Guarantee Scheme.

Notable clients and partners

flatex AG provides its high frequency payment platform to Deutsche Post Rentenservicewhich takes care of 26m pension payment transactions every month.

Corporate information

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01.06.19 01.07.19 01.08.19 01.09.19 01.10.19 01.11.19 01.12.19

flatex AG - our stock

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Shares outstanding: 19,595,637

Options outstanding: max. 0.5m

Market capitalisation: EUR 480m (as of 2019-12-31)

Listed:Open Market / SCALEDeutsche Börse / Frankfurt Stock Exchange

ISIN: DE000FTG1111

Bloomberg: FTK GR Equity

Stock covered by

STOCKPRICE DEVELOPMENT L6M

Dec 2019PT EUR 29.00 Buy

Commerzbank

Dec 2019PT EUR 39.00 BuyHauck & Aufhäuser


M.M. Warburg


Berenberg


flatex AG - key milestones


1988Company founded in Langen

2001Development and full BPO provider for pan-European expansion (core bank system FTG:CBS:R1 is born)

2006

Best German online broker goes live

Full white label Retail Bank operations begins (full BPO)

L.O.X. OTC certificate platform developed (limit order system connects DB/Coba flow to 22 pan-European brokers)

Migration of mwb fairtrade from caceis to FinTech Group Bank for order routing and securities settlement (1.4 m trades/year)

Large Austrian bank selected FinTech Group as full BPO for Austrian and German digital expansion

1997Full BPO IT provider for bankenverbandever since

2009

2015

2017

2010

FinTech Group Bank AG will be renamed to flatex Bank AG

2019

FinTech Group AG will be renamed to flatex AG

2019

Financial Calendar 2020


Upcoming Investors’ Conferences & Roadshows 2020

Feb Investor Roadshows Lugano, Milan, Barcelona, Madrid, Salt Lake City,

Chicago, Montreal, New York, Brussels

March Amsterdam, Antwerpen, Edinburgh, Dublin, London, Helsinki,

Helsinki, Kopenhagen, Stockholm

May Goldman Sachs European Small and Mid Cap Symposium London,

12.05.20 MainFirst SMID Cap Forum Frankfurt

Sep Stifel Cross Sector Insight Europe Conference London, Berenberg und

Goldman Sachs Ninth German Corporate Conference München

Contact

Muhamad ChahrourCFO / Investor Relations

Phone: +49 (0)69 4500010Mail: [email protected]

flatex AktiengesellschaftRotfeder-Ring 760327 Frankfurt/Main, Germanywww.flatex.com

CORPORATE PRESENTATION...flatex - business model of flatex and ViTrade 8 flatex Aktiengesellschaft...

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