In 2016 X- Trade Brokers Dom Maklerski recorded PLN 77,7 million of consolidated net profit, in comparison to PLN 119,0 million recorded in 2015. Only in the IV quarter the Group’s net profit has increased by 206%, i.e. to the amount of PLN 50,4 million y/y. The IV quarter was the same a record quarter for the Group in the whole 2016 reaching the levels comparable to the best quarters of the record 2015 year in the XTB history.
Operating income for 2016 reached PLN 250,6 million as compared to PLN 282,5 million in 2015. Only in IV quarter the Group’s operating income reached PLN 94,0 million (PLN 57,4 million in the previous year).
‘In the IV quarter of 2016 the situation on the financial markets was favorable for XTB. We observed favorable volatility on index CFDs (based on German DAX and US DJIA and S&P500), currency pairs with USD and commodity CFDs based on gold and oil.’ – says Pawel Szejko, Member of the Management Board responsible for Finance.
Year 2016 was special for us. On one hand, we have strengthened our position as one of the leading European brokers. In may we had our debut on the Warsaw Stock Exchange. Joining the companies listed on the WSE played key role as part of our strategy of building XTB’s long-term value. Transparency of our business model and finance, so important for our clients, has become another XTB’s competitive advantage. We consistently built up customers base for future growth. The number of new accounts and the average number of active accounts was increasing from quarter to quarter. On the other hand we witnessed further regulatory changes, which with time may change the business.
‘Some of the competitors took the decision to withdraw from the market because of the pressure exerted on their results due to introduction of additional restrictions and legal barriers. This applied particularly to entities with less established position on the market. We see this as an opportunity to consolidate the market. This situation creates for us opportunities to develop and to increase the number of new accounts.‘- adds Paweł Szejko.
The Management Board’s plan for the upcoming periods is to accelerate the Company’s growth, in particular by expanding the customers base, development of the products offer, further penetration of existing markets and acceleration of geographic expansion into new markets. We intend to intensify our activities in Latin America in the near future. Currently, we focus on business development in Chile. We hope that in the years 2017 and 2018 our expansion in this region will speed up significantly.
‘The Management Board expects that operating expenses in 2017 will be lower than in 2016. In the quarterly view, they may reach similar levels than in the I or IV quarter of 2016. The decrease should mainly result from lower marketing costs.‘- adds Paweł Szejko.
X-Trade Brokers reported almost 212% increase of a consolidated net profit in the IV quarter 2016 as compared to the same period of the previous year. The net profit in this period amounted to PLN 51,4 million in comparison to PLN 16,5 million in the previous year. The IV quarter was the same a record quarter for the Group in the whole 2016 reaching the levels comparable to the best quarters of the record 2015 year in the XTB history.
The Group’s operating income increased significantly and reached PLN 94,1 million in the IV quarter of 2016 in comparison to PLN 57,4 million in the previous year.
“In the IV quarter 2016 the situation on the financial markets was favorable for the XTB. We observed high volatility on instruments which are relevant in our revenues structure: index CFDs (based on German DAX and US DJIA and S&P500), currency pairs with USD and commodity CFDs based on gold and oil. As a result, the Group generated PLN 94,1 million of operating income which gives an increase of PLN 36,7 million, i.e. 64% y/y.” – says Pawel Szejko, Member of the Management Board responsible for Finance.
Simultaneously with the revenues increase, the operating expenses in the IV quarter 2016 declined by PLN 3,7 million, i.e. 9% y/y. The costs of salaries and employee benefits amounted to PLN 17,0 million and the marketing expenses reached a level of PLN 8,7 million.
“The intention of the Management Board in the upcoming quarters is to further keep the operating expenses on the stable level, similar to that from the IV quarter 2016.” – adds Pawel Szejko.
The Management’s plan for the upcoming periods is to accelerate the Company’s growth, in particular by expanding the customers base, further penetration of existing markets and acceleration of geographic expansion into new markets.
XTB consistently builds up customers base for future growth. The number of new accounts and the average number of active accounts is increasing from quarter to quarter. In the IV quarter of 2016 the number of new accounts increased by 17% y/y, and the average number of active accounts by 26% y/y. The Management Board believes, that the increasing number of new and active accounts and a strong brand in combination with favourable market volatility are solid foundations for future growth.
The Supervisory Board of X-Trade Brokers Dom Maklerski S.A. at the meeting held on 10 January 2017 decided to make changes in the composition of the Company’s Management Board.
Mr. Jakub Maly was dismissed from the position of the Management Board’s President. This decision is strategic and results from the need to ensure by the Supervisory Board proper dynamic of the Company’s value growth. The Supervisory Board believes that the pace of strategic goals realization and the capital group’s development has not been sufficient so far. Therefore the Board decided to make changes in the Management Board’s composition.
The Supervisory Board decided that the Management Board will consist of 5 people and appointed Mr. Omar Arnaout (associated with XTB Group for many years, currently Regional Director of Poland, Germany, Hungary and Romania) for the position of the Member of the Management Board responsible for Sales with the rank of the Vice-President of the Management Board. Mr. Filip Kaczmarzyk (Trading Department Director since May 2015) was appointed for the position of the Management Board Member responsible for Trading.
Furthermore, Mr. Jakub Leonkiewicz, Chairman of the Supervisory Board, has resigned from the participation in the Board in agreement with Mr. Jakub Zabłocki, to enable him to take over as the Chairman of the Supervisory Board. Using the statutory powers, Mr. Jakub Zabłocki, has appointed himself as the Chairman of the Supervisory Board. At the same time, under the provisions of the Commercial Companies Code, the Supervisory Board delegated Mr Jakub Zabłocki to temporarily perform the duties of the President of the Management Board from 10th January to 10th April 2017.
‘The purpose for the Management Board for the upcoming periods is to accelerate the Company’s growth by expanding the customers base, product offering and further penetration of existing market and acceleration of geographic expansion into new markets. Moreover, the situation on the financial markets in the 4th Quarter of 2016 has been favorable for us. We have observed high volatility on instruments which are relevant in our revenues structure, such as currency pairs EUR/USD and GBP/USD as well as index CFDs instruments based on DAX, Oil and Gold’ – said Jakub Zabłocki, Chairman of the Supervisory Board and Acting President of the Management Board of X-Trade Brokers Dom Maklerski S.A. ‘Implemented changes in the Management Board and the Supervisory Board are strategic and are designed to provide both immediate intensification of development processes as well as the continuity of key operational activities of the Company until these duties are taken over by the newly appointed President of the Management Board. Thanks to this taking over the duties in the Management Board will go smoothly, and the operational activities of XTB will be carried out without any disturbance, “- adds Jakub Zabłocki.
In the 3rd quarter of 2016 X- Trade Brokers Dom Maklerski recorded PLN 4,24 million of consolidated net profit attributable to shareholders of the Parent Company, in comparison to PLN 50,94 million recorded in the same period of 2015. Profit on operating activities amounted to PLN 8,42 million as compared to PLN 60,95 million y/y. Consolidated operating income reached the level of PLN 42,80 million in the 3rd quarter of 2016 as compared to PLN 95,70 million y/y. Cumulatively for the three quarters of 2016 the Group generated the consolidated net profit attributable to shareholders of the Parent Company of PLN 27,29 million as compared to PLN 102,53 million y/y. Consolidated operating income for the three quarters reached PLN 156,62 million as compared to PLN 225,19 million y/y.
The 3rd quarter of 2016, analogously to the 2nd quarter, was a period free from the unexpected and extraordinary market events or strong long-term trends. The clearly lower volatility observed in the nine-month period of 2016, in comparison to the same period of the previous year, created fewer investment opportunities to the XTB clients. As a consequence, XTB as well as its competitors with the same business profile, experienced decrease in turnover of financial instruments and hence a drop in the Group revenues.
An important event in the 2016 was Brexit, i.e. voting of Great Britain on possible exit or remaining of the country within the European Union. Thanks to the precautionary actions undertaken by the financial markets, volatility on the markets caused by the referendum did not repeat the scenario from January last year, when excessive market volatility was recorded as a result of an unexpected SNB decision to discontinue the policy of defending the CHF exchange rate. Preparing to the voting, the Group raised minimal deposits on instruments exposed to sharp movements (currency pairs with GBP, European indices). This action was undertaken in order to limit the clients’ exposure to the above mentioned instruments and this goal was achieved.
In spite of the limited market volatility observed during the current year (which resulted in lower average operating income per active account y/y), XTB consequently builds up clients base for future growth. The number of new accounts and average number of active accounts is growing in the subsequent quarters of 2016. In the 3rd quarter of the year the number of new accounts increased by 20% y/y and average number of active accounts increased by 10% y/y. The Management Board believes that increasing number of new and active accounts and a strong brand in combination with more favorably market volatility are solid foundations for future growth.
Unlike the 2015 Swiss Franc depegging, this year’s first six months have not been influenced by unexpected market events. Regardless, results for first quarter of 2016 has remained at appropriately high level. It is the second quarter of 2016 that brought attention to the increasing complexity of client vs. market correlations. In the first three months the Group has accomplished the expected level of key performance indicators (KPI). In the institutional segment new liquidity contracts have been put into action and the spectrum of business customers enlarged. On the retail side, the performance remained at similar levels compared to the previous year. In the second quarter of 2016 the Group’s results have been influenced by the range trading, growth of markets supported by low interest rates commitment.
Combination of all these factors have resulted not only in the drop of financial instruments volume traded in lots, but also in lower responsiveness to marketing activities. Growth, compared to the first half of 2015, has been 10,1% in case of active accounts and the total amount of open accounts has hit 25,6% increase. Despite this, the volume traded among our retail and business partners has dropped by 15,8%, and resulted in 6,3% decrease in total deposits. According to our retail marketing communication strategy, we have engaged in global branding campaign using an actor, Mads Mikkelsen. Admittedly, the creation of such campaign has resulted in significant increase of marketing expenses.
What is more, in the second quarter of 2016 we have all witnessed historical vote of the United Kingdom, placing it onto the road of leaving the European Union. Brexit has been a very well covered and expected event on the markets, followed by the whole world, causing a market stir, but didn’t follow the same scenario as we have seen in January last year.
In the 1st quarter of 2016 X-Trade Brokers Dom Maklerski S.A. („XTB”) Group generated operating income and net profit of PLN 82.8 million and PLN 31.9 million, respectively, which resulted in EBITDA margin and net profit margin reaching 52.8% and 38.5%, respectively. These very good results were generated mainly due to the increase in the average number of active accounts and high volatility on the markets recorded in January and February 2016.
The net profit generated by the Group in the 1st quarter of 2016 was higher than the average quarterly level in 2015 by PLN 2.1 million, i.e. 7.1%. Moreover, it was higher than in the 4th quarter of 2015 and lower than in the 1st quarter of 2015, when the markets experienced more than average volatility arising, among others, from the unpegging of the exchange rate of the Swiss franc against the euro and the ECB initiating a quantitative easing (QE) programme.
In the retail operations segment the average number of active accounts increased by more than a thousand, from 15,045 as at the end of 2015 up to 16,052 as at the end of the 1st quarter of 2016. This was, among others, due to introducing new trading instruments to the Group’s portfolio, as well as improving the quality and competitiveness of the services performed.
In the institutional operations segment (X Open Hub) the net profit increased by 103.5%, from PLN 3.9 million in the 1st quarter of 2015 up to PLN 8.0 million in the 1st quarter of 2016. The Management Board of XTB believes that the institutional operations segment has a great growth potential and that its share in the Group’s operating income shall increase within the next few years.