CMC Markets : FY 2024 full-year results Report

CMC Markets plc

Annual Report and Financial Statements 2024

CMC is a leading global provider of online trading and investing, with a comprehensive retail, B2B

and institutional offering.

The business was started in

1989 with a simple ethos: to make financial markets truly accessible for investors. This fundamental belief remains at the heart of everything we do at CMC Markets and staying true to that has been pivotal to our success.

See more at www.cmcmarkets.com

Strategic report	Governance
1	Our strategic roadmap	70	Chairman's governance overview
2	At a glance	72	Board of Directors
3	Our business	75	Corporate governance
4	Our product offering	83	Group Audit Committee report
6	Operational and financial highlights	87	Group Risk Committee report
7	Investment case	90	Nomination Committee report
8	Chairman's statement	94	Remuneration Committee report
10	Market overview	115	Directors' report

12 Business model

1. Chief Executive Officer's statement

1. Our strategy

1. Key performance indicators

1. Section 172 statement

1. Stakeholder engagement

1. Technology and innovation

1. Sustainability

1. TCFD

1. Financial review

1. Risk management

1. Principal risks

Financial statements

1. Independent auditor's report

1. Consolidated income statement

1. Consolidated statement of comprehensive income
2. Consolidated statement of financial position
3. Parent company statement of financial position
4. Consolidated statement of changes in equity
5. Parent company statement of changes in equity
6. Consolidated and parent company statements of cash flows
7. Notes to the consolidated and parent company financial statements

Shareholder information

1. Shareholder information

1. Appendices

Strategic report

Governance

Financial statements

Shareholder information

Our strategic roadmap

Our vision	Our purpose
To create an environment	To constantly maintain
for your financial needs	a superior and unrivalled
	technology experience
	for our clients

Our strategic pillars

01	02	03
Trading platform	Investment in business-to-business	Expansion of Invest platforms
product diversification	("B2B") technology capability	and institutional offering
See more on page 18	See more on page 19	See more on page 19

Our sustainability pillars

01	02	03	04	05
Client Positive	Change Positive	Platform Positive	People Positive	Planet Positive
See more on page 33	See more on page 33	See more on page 34	See more on page 35	See more on page 38

The things we live by
- We stand with our clients	- We work as a team
- We are human	- We keep it simple
- We take ownership	- We focus on impact
- We are bold

CMC Markets plc - 1 Annual Report and Financial Statements 2024

At a glance

Our client base	Our geographical reach
Total active clients1	Continents	Countries	Offices
266,870	4	12	14

CMC attracts a diverse range of institutional and retail clients across both our trading and investing platforms. Regardless of client type, we uphold our high standards of protection and suitability, to ensure every client receives the same level of service excellence.

Our new investing platforms provide the Group with access to a cohort of clients in new geographies, with the aim of providing clients with opportunities for long-term investment as another avenue to building financial security.

With a presence in 14 offices located in major financial centres around the world, CMC Markets operates on a hub-and-spoke model.

The Company's headquarters are based in London, while Germany serves as the hub for our European operations, and Sydney acts as the hub to support the Asia Pacific & Canada ("APAC & Canada") region.

Breakdown of NOI		B2B/B2C split of active clients
D
C			A		A		A
B
A
			B2C		B2B		Totals
			B		B		B
A Trading net revenue - £259.1m	A	Trading - 51,250	A	Trading - 4,044	A	Trading - 55,294
B Investing net revenue - £34.0m	B	Investing - 168,760	B	Investing - 42,816	B	Investing - 211,576

1. Interest income - £35.0m
2. Other income - £4.7m

Refer to net revenue on Page 53

1 Active clients represent those individual clients which have traded with or held CFD or spread bet positions or which traded on the Invest platform on at least one occasion during the financial year.

2 - CMC Markets plc

Annual Report and Financial Statements 2024

Strategic report

Governance

Financial statements

Shareholder information

Our business

Trading

We are committed to expanding our product range in order to improve functionality for our clients. With over 10,000 products currently available through our trading platforms,

we aim to provide the most efficient pricing structure possible. Our pricing system undergoes continuous evolution to ensure sophistication and minimise latency. We use high precision clock time-stamping at multiple points throughout the system to measure latency in microseconds and monitor it in real time. Our focus on best execution enables us to set high standards for execution quality.

We prioritise internal risk management by storing trade and risk data in a high frequency tickdatabase.Thisenablesustorecordallstages of the risk management system, ensuring that client order flow is managed efficiently.

To achieve this, we have large quantitative analytics and data science teams that develop the hardware and software components

of our analytics environment. Data science and machine learning models also play

a crucial role in our real-time and offline decision-making processes.

Our ultimate goal is to offer our clients market-leading access to liquidity, alongside

1. best-in-class and resilient platform across all aspects of our offering.

See more on page 12

Products utilised

A B C D F

See page 4

Products

Investing

We see significant growth potential across global investment platforms due to secular shifts in investment trends, and we are expanding our investing businesses to capitalise on these opportunities.

See more on page 12

Products utilised

C E F

Institutional/B2B

Our institutional clients are served by both the trading and investing businesses. Through our CMC Connect brand we offer technology-powered solutions to mid-sized and large financial institutions. CMC is already a trusted service provider for execution, clearing, and settlement services to several major Australian financial service businesses.

Our B2B partnerships are at the core of our growth strategy and our offering to this important segment will be bolstered by our product diversification which will expand to all our existing and new geographies over the next 24 months. With growth from our investing operations, we are strategically positioning our business to leverage some of the fastest growing trends in trading and investing.

Our continued development work to connect to multiple Electronic Crossing Networks ("ECNs") and the deployment of a competitive FX Spot product now allow for significant growth in this asset class.

See more on page 12

Products utilised

A B C D E F

1. Contracts for difference ("CFDs")

1. Outsourced trading platform technology

B	Spread betting	C	Technology-driven liquidity solution
E	Stockbroking	F	Options

Sustainability

Our Tomorrow: taking a positive position

Our goal at CMC Markets is to align with the global capital markets' movement towards a sustainable future. We aim to achieve this by offering responsible and innovative technological solutions that prioritise the protection, education, and inspiration of both our people and clients to invest for the future.

See more on page 32

CMC Markets plc - 3 Annual Report and Financial Statements 2024

Our product offering

A

Contracts for difference ("CFDs")

1. derivative product which allows clients to trade using leverage in an underlying financial asset, without certain costs and limitations associated with ownership of the underlying asset.

B

Spread betting

A product available exclusively to residents in the UK and Ireland enabling clients

to speculate on price movements in an underlying financial asset.

C

Technology-driven liquidity solution

Our institutional arm, CMC Connect acts as a non-bank liquidity provider offering access to a wide range of asset classes including Spot FX, Indices, Commodities and cash equities. For larger institutions, we are able to offer bespoke solutions to help facilitate access across multiple asset classes.

4 - CMC Markets plc

Annual Report and Financial Statements 2024

Strategic report

Governance

Financial statements

Shareholder information

D

Trading platform technology solution

We offer outsourced platform technology to clients also under the CMC Connect brand, where our award-winning CMC trading platform can be fully customised under a white label partnership or branded platform for regulated entities looking to offer our products to their clients.

E

Stockbroking

Our Australian stockbroking business offers our clients the ability to trade Australian shares and international shares from over 35 stock exchanges in over 16 countries. This has been supported through the launch of a fully native mobile application offering a variety of instruments including shares, options, managed funds, warrants and ETFs.

Our UK business currently offers General Investment Accounts ("GIAs") and Stocks and Shares ISAs with access to a range of US and UK stocks. SIPPs and mutual funds went live in April 2024. The Group has also launched CMC Invest in Singapore.

F

Options

The addition of options on CMC's trading platforms will bring added benefits to our clients. New derivative products will provide more flexibility to manage risks and volatility compared to traditional CFD and stock trading. Options have the ability to enhance portfolio diversification and manage risk. Options are a universally popular product and their addition has the potential to be a significant revenue generator for CMC in years to come.

CMC Markets plc - 5 Annual Report and Financial Statements 2024

Operational and financial highlights

• Trading revenue per active client up £717 (18%) to £4,685.
• B2B represents 33% of Group turnover¹ (2023: 30%).
• Continued investment in our 'Invest' branded stockbroking propositions through enhancements to the CMC Invest Australia platform including the release of crypto trading, development of the CMC Invest UK platform and the release of CMC Invest Singapore.

• The institutional offering continues to grow with the release of cash equities trading, with further product releases planned in 2024.
• Ongoing operational resilience demonstrated by the Group- wide platform uptime of 99.95%.

Read more about net revenue and our financial measures on page 53

Net operating income²		Statutory profit before tax	Group-wide platform uptime
£332.8m		£63.3m	99.95%
24		£332.8m	24	£63.3m	24	99.95%
23		£288.4m	23	£52.2m	23	99.97%
22		£281.9m	22		£91.5m 22	99.95%
Basic earnings per share		Ordinary dividend per share3
16.7p			8.30p
24	16.7p		24	8.30p
23	14.7p		23	7.40p
22		24.6p	22		12.38p

1. Turnover reflects the notional value of client trades
2. Net operating income represents total revenue net of introducing partner commissions and spread betting levies.
3. Ordinary dividends paid/proposed relating to the financial year.

6 - CMC Markets plc

Annual Report and Financial Statements 2024

Strategic report

Governance

Financial statements

Shareholder information

Investment case

Award-winning platforms

See more on pages 28 to 31

Our diverse product offering

See more on pages 4 and 5

Our geographical reach

See more on page 2

Our client focus

See more on page 25

12,000+

financial instruments traded across the Next Generation platform and over 40,000 instruments within Invest Australia

16%

share of Australian stockbroking market1

Launch of the Invest Singapore business, providing clients access to 15 markets and over 40,000 listed securities

56%

of net revenue generated outside the UK and Europe regions

266,870

active clients across our trading and investing businesses

The demands of our clients continue to evolve. Our goal is to constantly maintain a superior and unrivalled trading experience for our clients. Continuous investment in our proprietary technology across both our trading and investing platforms allows us to offer

a wide suite of products. Our web-based and mobile applications are continuously ranked amongst the best in class by our clients.

We are investing to diversify our new products and functionality across both our trading and investing platforms. CFD trading remains at the core of what we do. This is balanced with a world-class investing business in Australia. Similarly, the launch of CMC Invest Singapore, along with the release of CMC Invest UK

in FY23, underpins our expansion into the high growth opportunities.

Our global technology platforms allow access for retail, professional and institutional clients through regulated offices and branches in 12 countries, with a significant presence in the UK, Australia, Germany and Singapore.

Our clients are at the heart of what we do, and their input drives us to improve our business processes across product development, marketing and client services as we tailor new developments and target improvements. We employ and develop high quality client services staff to ensure best-in-class client service. Platform resilience and user experience are at the core of all developments and upgrades we deploy.

Our Tomorrow	5
See more on pages 32 to 41
core sustainability pillars

1 ASX and Chi-X combined trading statistics - IRESS.

Last year we introduced the Group's Our Tomorrow sustainability strategy and its five core pillars structured to focus delivery on our material environmental, social and governance ("ESG") risks. Through this year we have continued to follow the five sustainability pillar approach, further details of which can be found in our 'Sustainability' section.

CMC Markets plc - 7 Annual Report and Financial Statements 2024

Chairman's statement

Our long-term investments and focus on institutional clients and the business-to-business market segment are beginning to deliver for the Group

Our focus on diversification and enhancing our B2B offering continues to build momentum with clients and positions us to deliver on our strategic vision.

The Board's strategy of diversification and placing a greater focus on institutional clients and the B2B sector continues to build momentum. The long-term investments we have made in our technology and our people will continue to enhance our business performance and benefit our clients and other stakeholders.

While we have given a greater focus to our institutional business, we of course maintained investment in our retail business, launching our Invest product in Singapore and continuing to enhance our Invest business in the UK. We launched mutual funds on Invest UK as well as our SIPP product post year-end, broadening the range of high-qualitylong-term investment products for our UK retail customers. In addition to our product diversification, we continue to pursue targeted geographical diversification, building on our existing presence in Dubai and placing a renewed focus on governance and capabilities in Europe to ensure a solid foundation for what is an attractive growth region. Our staff continue to be instrumental to our growth and diversification. As we announced earlier in the year, the Group has reached the peak of its investment cycle and the Board and senior management conducted two restructuring reviews, leading to the loss of around 15% of roles across the Group. While it is always a matter of great regret when colleagues leave the business, we are now better placed to deliver on our growth opportunities and leverage our scale to grow profit margins, whilst continuing to invest in our products and technology.

The long-term investments we have made in our technology and our people will continue to enhance our business performance and benefit our clients and other stakeholders."

James Richards

Chairman

8 - CMC Markets plc

Annual Report and Financial Statements 2024