Investor Relations

Mount Wish Group

Outlook | Guidance


This guidance is dependent on various regulatory issues and shall be updated accordingly in due time


Download - Guidance 2017-2020

Download - Indicative Valuation as of Dec. 2017 | Scroll down to the next section to learn more about funding options

How we plan to meet regulatory equity requirements and to fund accelerated growth



We plan to meet regulatory
(pro-forma stock exchange listing and/or equity injection)
and operational
(we could also work and achieve our targets without a capital injection just by retained earnings eventhough at a slightly slower pace and hence the debt load will have positive effects on our WACC and accelerate growth)
capital requirements in three steps.


SUMMARY:
We target a total funding volume of 45 to 50 billion USD mid-term (which in addition to organic growth initiatives will be deployed in a couple of strategic M&A activities and thus we are flexible in terms of total volume and able to go down to a much smaller fraction - thus feel free to reach out to us if you like our product and vision as we can accommodate almost any investment size - of the just mentioned amount initially since we have further (complementary) funding options and M&A financing comes itself with distinct options ranging from simple cash transactions over stock swaps to more complex mezzanine, VTB/seller, LBO arrangements finally resulting in the same total funding amount again), which is in line with recent assessments provided by leading investment banks including well-known IPO specialist Blaettchen & Partner (See independent IPO assessment here). Thus, considering the current state of our business which is both Pre-IPO on one side and Pre-Launch (read first institutional investment round to meet regulatory equity requirements -> pro-forma round) on the other we are aware of the tensions which this is causing in terms of valuation bandwidths, legal and financial status and of course operational / governance expectations and hence are interested in working with various investor groups ranging from angels and VCs to large institutional funds. The important point to understand here is that we are able to structure each investment deal in an attractive way via our different subsidiaries or an according SPV (special purpose vehicle) as to account for all relevant aspects such as minimum return expectations, risk-return-metrics, usual ticket size as well as expertise and support brought in by the investor when raising the capital now and at the same time factoring in the according conversion of these (subsidiary) investments into common shares of the Mount Wish holding (Mount Wish Corporation) with the IPO in 2019 using a unified approach across investors which is market-compliant in terms of issued shares and dilution. Hence, we are effectively postponing final valuation (quasi-kickback when switching the shares to holding level) - yet we strongly believe in meeting and exceeding our guidance and thus valuation targets - due to the mentioned aspects until going public while meeting all investor-specific criteria allowing investors who usually focus on different company stages to sign a very attractive deal together now while also enabling us to meet our targets when it comes to stabilising core operations, continuing to innovate and driving global growth, keeping balance between receiving strategic support and remaining independent, as well as meeting equity respectively liquidity requirements (regulatory pro-forma round) and receiving a performance-oriented valuation (bearing in mind the signed LoIs worth 28.4bn USD annual recurring revenues [ARR] at the end of Q1 2018 and thus expected profits [min. 15% gross margin, 11.5%-12% net profit margin]). This said we expect to meet our indicative valuation which again says that our market cap at the time of the IPO will range between 773bn USD and 874bn USD (our own internal estimate is 820-850bn USD). The latter again means that the above-mentioned 45bn – 50bn USD investment will likely convert to 5-8% (free floating) common shares.

GUIDANCE (Median - subject to regulatory issues, i.e. receiving the charter):
Marktet size: >4.6tn USD (plus further upsides)
- FY 2018: 53.6bn USD in ARGR (=Annual Recurring Gross Revenues) w/ net operating profit of 6.28bn USD
- FY 2019: 315.8bn USD in ARGR w/ operating net profit* of 32.9bn USD
- FY 2020: 1,062bn USD in ARGR w/ operating net profit* of 124bn USD


NEXT STEPS:

1
(Personal) Business Credit
(IPO bridge and alternatives preparation)

Two-year credit facility of 140m EUR to diversify capital sources for operational purposes (WACC optimisation and improved regulatory position with regards to customer pre-payments) and to finance the launch of Magma (one of the backups if go-live is required prior to IPO which again is highly recommended and hence very likely - thus please also refer to Alternatives A1 and A2) also accepting full personal liability of the founder and if possible arranging for partial KfW or other guarantor bank backing for our funding partners. Alternatives to the credit could also be options A2) or B) as listed below.

2
Stock Exchange Listing



Listing of Mount Wish Group shares (Class A only) without a capital increase to allow Sales Option Pool holders and employees (lock-up and vesting still applying) at an indicative valuation of 658bn - 744bn EUR (backed by audited financial statements) in 2019 to sell their shares (but have to invest at least 80% of the sold volume into our bond - see number 3 - and make that decision to sell within 1 month after we have listed our shares since thereafter a longer hard lock applies). At the same time listing our shares allows us to meet regulatory equity requirements much better and with less complexity (listed shares transparently reflecting the business growth on the equity side).
IPO will take place at the NYSE (primary listing).
Secondary listings are currently evaluated with FWB, Euronext, LSE, and HKSE.
Indicative Valuation (Dec. 2017 | in German)

3
Bond Issuance

Issuance of a >30bn bond structured somewhat as a hybrid (6.5% interest rate paid annually while additionally an annual profit share of 1% shall be put aside to secure future interest and principal payments. The profit share collector shall be paid out to 50% to the bondholders as a balloon payment at maturity if all other liabilities of the bond have been paid.) due over 5 years to fund M&A deals and strategic infrastructure investments.
Locking up the placement of the shares of the existing shareholders by requiring them to invest at least 80% (likely a bit more) of their sold shares into the bond (IPO hard lock otherwise much longer).

Alternatives if the above doesn’t work alone // Thus the final setup is likely to be a mix of various funding approaches:

  • A1) Magma Equity Token / Coin Sale with an estimated market capitalization of 16bn EUR and issue volume of 2-3bn EUR (cut-through rights of holding apply in exchange for a return-oriented interest on subsidiary dividend level and thus quasi inter-company interests; mezzanine construct). Hence meeting equity requirements via a subsidiary valued at market terms while inter-company-wise using mezzanine capital structures to fund the parent and sister entities. Equity Token Sale shall strictly follow the rules of a regulated market issuance (with a focus on attracting institutional investors -> Pre-IPO round) and hence it is intended to work closely with the SEC and ordinary exchanges such as NYSE to ensure compliance and highest standards.
    Beyond this the issued Equity Tokens / Coins can be exchanged against shares of the holding (Mount Wish Common Shares) once the IPO takes place and thus an according conversion rate and relevant terms shall be specified with the ICO.

  • A2) Traditional capital increase of one or more of our other subsidiaries to meet the regulatory equity and liquidity requirements. Therefore, this structure could also involve a special refinancing entity. Can also be combined with A1.

  • B) Pre-IPO round (Simple agreement for future equity, mezzanine or common shares) to Pre-IPO terms at a maximum discount of 20% to the indicative valuation provided by our advisors. The latter can be set up with clear target dependent agreements so that the final number of shares is fully dependent on milestone achievements and risk-return-metrics reflect market terms best.

  • C) Repo deal (subject to ongoing feasibility study)


  • Download - Guidance 2017-2020

    Cap Table and Options Outstanding

    Equity, equity options and phantom shares are managed using carta (formerly known as eShares).


    Open Capitalization Table in Excel


    Common Shares (Class A):
  • 1 vote per share
  • Non-interest bearing
  • Entitled to dividends (post class C shares)


  • Preferred Shares (Class B):
  • 10 votes per share (super-voting)
  • Non-interest bearing
  • Buy-back-options granted to the founder
  • Entitled to dividends (shall range between 0.5 and 1.0 times the dividend value of class A shares, as decided by class A and B shareholders split extraordinarily in voting power as follows Class A 66.66% of votes and class B shares 33.33% of votes)


  • Class C - Fully redeemed in 2018
    Preferred Shares (Class C):
  • Non-voting
  • Cumulative interest bearing (ECB deposit rate + 100 basis points on average fluctuating market value but capped at 10% Net Profit min. 25 Euro per share and year)
  • Additionally, entitled to dividends (at least 1.25 times the value of class A dividends already including above mentioned interest payments)
  • Callable at 6.000 Euro per share with an additional call premium of 15% net profit (year of calling the stock) paid out over 15 years, 10% of net profit in the following year paid out over 15 years and 5% of the then next year net profit paid over 15 years



  • Sales Option Pool
    Definition: The Sales Option Pool means that based on each sales partners performance in comparison to all other sales partners and our own direct sales we will allocate shares (half normal shares and half non-voting, interest bearing shares; different share classes apply) in our high growth business in a multi-stepped approach (5% normal and preferred shares after 1 year, 2.5% normal and preferred shares after 3 years and again 2.5% normal and preferred shares after 5 years) to strengthen the partnerships even further in a performance-related matter and give these partners a more than attractive incentive (beyond barter deals like brokered other business) to drive sales for us and hand over their customers FICC risk management issues to us rather than serving them with outdated derivative-based solutions. For more information on cooperations including mutual and strategic rationale please take a look at the Global Sales Partnerships section of our homepage.



    Voting rights distribution




    Options and Warrants outstanding
    The founder holds rights to buy back 2,500 of all issued Sales Option Class A shares for 5m USD each and the right to buy back 132 Class A Common shares from his family at 50% discount as long as an annual return on investment of at least 30% is guaranteed. All option rights expire by 2030. 
    Beyond this his dilution is capped for the next round at 55% (this protection expires thereafter). Should a higher dilution be required for the founder as well in the next round it is intended to issue either discounted/capped repo options or set up an agreement with the investors that a certain amount of shares will be returned to the founder and employees if defined milestones are hit in a given time span. The latter is clearly preferred.


    Indicative valuation (IPO H1 2019): 658bn - 744bn EUR
    Indicative Valuation (Dec. 2017)

    Investor Sentiment | Market Comment



    Capital Markets FinTechs have received less than their fair share of funding. Of the roughly 8,000 fintech start-ups that BCG tracks globally across all business lines, only 569 are active in the CM space. And of the roughly $96 billion in VC funding that has been raised since the turn of the century, only about $4 billion (or approximately 4%) has gone specifically to CM FinTechs. (See Exhibit 2 provided by BCG) Thus, it is clear that the potential gains are much larger than those currently being realized. Indeed, the 2015 CM revenues of $330 billion (excluding those related to asset management) represent 9% of the total financial services revenue pool of $3.67 trillion. Therefore, the CM equity funding ratio, relative to the revenue pool share, is skewed at 1:2, with CM FinTechs attracting less than half their fair share. If we use the broader definition of the CM ecosystem, which includes asset management, the ratio is even more pronounced, at 1:3. The vast majority of fintech disruption in the banking industry is happening on the retail and corporate fronts, where technology provides a way for companies to serve large, diverse client bases while still reducing the cost of customer acquisition across a number of distribution channels. The prospect of mass adoption makes equity financing readily available, with numerous VC firms on the lookout for the “Uber moment” of finance. As a result, there is a large imbalance in the amount of VC investment going to retail and corporate banking versus the amount going to CM firms. The handful of CM-focused start-ups that do exist have not only generated fewer VC funding rounds than their retail- and corporate-focused peers, but they have also attracted significantly less funding per round: roughly $11 million in CM in 2016, compared with about $14 million in retail and corporate banking. Such differences are partly attributable to the perception of a higher risk of failure in the CM industry, which is highly specialized, heavily regulated, and dominated by a few incumbent players. This reality discourages VC investors who are not industry specialists. In light of this, many CM players have taken up the dual role of investing strategically in new tech ventures as well as representing their traditional client bases. An attractive investment opportunity: Indeed, despite perceptions to the contrary, the overall CM ecosystem has thrived in recent years, generating a sizable revenue pool that is expected to markedly increase over the next five years. (See Global Capital Markets 2016: The Value Migration, BCG report, May 2016.) Given the size and growth of the industry, as well as the less crowded landscape, the CM fintech space is an attractive market for both investors and entrepreneurs.

    Investor Reporting and Filings

    2018

    Quarterly Reports | Regulatory Filings | Management Compensation

    Quarterly Reports
    Q1 Report: Investor Presentation (PDF) and Financials (Excel)


    Regulatory Filings


    Management Compensation and Governance


    Guidance

    Guidance 2017-2020
    Indicative Valuation (German)


    Tax Bills

    Q1 2018 - Quarterly Tax Bill (Körperschaftssteuer in Germany)

    2017

    Reports | Regulatory Filings | Management Compensation

    Reports:
    FY 2017: Investor Presentation (PDF) and Financials (Excel)
    Q4 Report: Investor Presentation (PDF) and Financials (Excel)
    Q3 Report: Investor Presentation (PDF) and Financials (Excel)
    Q2 Report: Investor Presentation (PDF) and Financials (Excel) - H1 2017
    Q1 Report: Investor Presentation (PDF) and Financials (Excel)


    Regulatory Filings


    Management Compensation and Governance

    2016

    Reports | Regulatory Filings | Management Compensation

    Reports:
    FY 2016: Investor Presentation (PDF) and Financials (Excel)
    Q4 Report: Investor Presentation (PDF) and Financials (Excel)
    Q3 Report: Investor Presentation (PDF) and Financials (Excel)
    Q2 Report: Investor Presentation (PDF) and Financials (Excel) - H1 2016 (shortened)


    Regulatory Filings

    Annual Accounts


    Management Compensation and Governance

    Complementary Files and Information

    Important Information

    Legal Documents
    Capital Increase February 2018
    Change of Articles
    Articles of Incorporation

    POC Statement 2016

    Standards and Principles
    Code of Conduct



    Standards and Principles and the Code of Conduct can be found under complementary files.

    IR Contacts




    Markus Wunsch
    Founder, Chairman and CEO

    Markus signs responsible for all IR topics and is happy to hop on a short call or connect however they prefer with potential investors who qualify.

    Call us
    Global Service Center
    Please schedule a call via this link first
    so that we can ensure a top-notch experience


    United States +1-319-527-2807,428249#
    United Kingdom: +44-330-998-1257,428249#
    Singapore / APAC: +65-3138-9201,428249#
    Chile / Latin America: +56-2-3210-9931,428249#
    Middle East: +972-55-966-1091,428249#
    Germany: +49-209-8829-4432,428249#













    Stephany Thiel
    Corporate Secretary and Assistant to the CEO

    Stephany is heading the Corporate Office and regularly acting as proxy for Markus where appropriate.

    Call us
    Global Service Center
    Please schedule a call via this link first
    so that we can ensure a top-notch experience


    United States +1-319-527-2807,428249#
    United Kingdom: +44-330-998-1257,428249#
    Singapore / APAC: +65-3138-9201,428249#
    Chile / Latin America: +56-2-3210-9931,428249#
    Middle East: +972-55-966-1091,428249#
    Germany: +49-209-8829-4432,428249#








    Victoria Frey
    Director, Creditor Relations

    Feel free to reach out to Victoria regarding any creditor related questions or issues

    Call us
    Global Service Center
    Please schedule a call via this link first
    so that we can ensure a top-notch experience


    United States +1-319-527-2807,428249#
    United Kingdom: +44-330-998-1257,428249#
    Singapore / APAC: +65-3138-9201,428249#
    Chile / Latin America: +56-2-3210-9931,428249#
    Middle East: +972-55-966-1091,428249#
    Germany: +49-209-8829-4432,428249#













    Loredana Peterson
    IR and Corporate Events

    Loredana is responsible for coordinating investor roadshows and managing relevant corporate event

    Call us
    Global Service Center
    Please schedule a call via this link first
    so that we can ensure a top-notch experience


    United States +1-319-527-2807,428249#
    United Kingdom: +44-330-998-1257,428249#
    Singapore / APAC: +65-3138-9201,428249#
    Chile / Latin America: +56-2-3210-9931,428249#
    Middle East: +972-55-966-1091,428249#
    Germany: +49-209-8829-4432,428249#








    IR and Corporate Event Calendar






    Event Contact - Loredana Peterson (loredana.peterson@mountwish.com)


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