IG Group PLC "Catalysts for Re-rating" (Buy) Tam

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IG Group PLC "Catalysts for Re-rating" (Buy) Tam

ThesisIG GroupMap:PLCIG Group (Haley Tam) UBS Research

UBS Research THESIS MAP Thesisa guideMap:to ourIG Groupthinking(HaleyandTam)what´s where in this report

IG Group | Haley Tam | Diversified Financials

Pivotal Questions Q: Can IG deliver 10% p.a. revenue growth?

Yes. We expect near-term revenue growth to benefit not only from market volatility but also

momentum in new customer acquisition and product launches (UBSe forecast 10.4% revenue 2025-

30E CAGR). Revenue retention improvement from new pricing strategies and more passive hedging

should further enhance revenue per client.

Q: Should we expect positive operational leverage at IG Group?

In our view, no. IG is focused on improving its product, embedding a higher performance culture and

enhancing efficiency. We expect higher revenue growth to be used to fund investment in top line

growth - with higher marketing costs a particular feature. Even without positive operational leverage

we forecast 9% EBITDA and 14% EPS CAGR 2025-30E.

Q: Could the Strategic Review lead to significant change in outlook?

Yes. IG has indicated the review will evaluate routes to maximise shareholder value, including but not

limited to acquisitions to accelerate growth, IG’s domicile and listing venues to unlock capital and

enhance strategic flexibility, and potential combinations of parts of the Group with other industry

participants. We have seen other financial firms change legal entity structure - e.g. to an offshore

holding structure - and improve both capital and regulatory flexibility for M&A. We believe IG could

use this flexibility to accelerate capability in new products (e.g. prediction markets). Divestment or JV

for some parts of the business (e.g.