News

  • 2019.10.07
    15 years of XTB
  • 2019.08.22
    XTB financial results for the 1st half of 2019

    In the first half of 2019 XTB reported a consolidated net profit of PLN 5.2 million compared to PLN 1.1 million in the second half of 2018. Consolidated revenue was PLN 88.8 million (H2 2018: PLN 90.4 million) and operating expenses reached PLN 83.6 million (H2 2018: PLN 89.7 million). In this period XTB noted a record number of new clients i.e. 16 089, which is an increase of 51.4% compared to second half of 2018 (h/h). 

     
     

    REVENUES

     

    The revenues in the first half of 2019 decreased by 1.8% h/h, i.e. PLN 1.6 million from PLN 90.4 to PLN 88.8 million. Significant factors which determined the level of revenues in this period were: the product intervention of the European Securities and Markets Authority (ESMA) coming into force in August 2018, which in case of the retail clients limited maximum permitted level of leverage. This had a direct impact on lower volume of transaction carried out by XTB clients. As a consequence the transaction volume in CFD instruments amounted to 779.7 thousand lots (H1 2018: 1 291.4 thousand lots, H2 2018: 804.0 thousand lots) and profitability per lot reached PLN 114 (H1 2018: PLN 153, H2 2018: PLN 112 ).

     

    XTB has a solid foundation in the form of constantly growing customer base and number of active clients. The intention of the Management Board in 2019 is to further increase the client base. The Group reported a record number of new clients amounting to 16 089 compared to 10 626 in the second half of 2018 (H1 2018: 10 046). In the second quarter of 2019 number of new clients increase by 2 403 q/q, i.e. 35.1% q/q. This is the effect of continuing the optimized sales and marketing strategy and the successive introduction of new products to the offer, such as shares, ETFs, indexes of technology companies FANG + and other sector indexes. The average number of active clients was higher by 3 265 h/h, i.e. 16.0% h/h.

     

    XTB’s aim is to provide a diversified investment offer simultaneously with comfort of managing the differentiated portfolio on one trading platform. The company analyzes other possibilities of expanding the product offer, which could cause the introduction of new products in 2019 and following years.

    Looking at revenues in terms of the classes of instruments responsible for their creation, it can be seen that similar as in the first half of 2018, CFDs based on stock indices dominated. Their share in the structure of revenues on financial instruments in the first half of 2019 reached 84.3% against 51.0% year earlier. This is a consequence of the high interest of XTB clients in CFD instruments based on the German DAX stock index (DE30) and the US indices US500, US100, US30. The second most-profitable class of assets were CFD commodities. Their share in the structure of revenues on financial instruments in the first half of 2019 reached 6.9% (H1 2018: 16.4%). The most lucrative instrument among clients was CFD based on quotations of the contract for natural gas and gold. Revenues on CFD instruments based on currency pairs amounted to 6.2% of total revenues against 29.3% a year earlier. Among this class of instruments, where the EURUSD currency pair was the most popular between XTB clients, there were more predictable trends in which the market moved within a limited price range. This led to the emergence of market trends, which can be predicted with a higher probability than in the case of larger directions of movements on the markets, which created favorable conditions for transactions concluded in a narrow range of the market (range trading). In this case, XTB has observed a higher number of profitable transactions for clients.

     

    XTB clients, looking for investment opportunities to earn money, generally trade in financial instruments that are characterized by high market volatility in a given period. This may lead to fluctuations in the revenue structure by the asset class, which should be treated as a natural element of the business model. From the point of view of XTB, it is important that the range of financial instruments in the Group’s offer is as broad as possible and allows clients to use every upcoming market opportunity to earn money.

     

    XTB places great importance on the geographical diversification of revenues. The countries from which the Group derives more than 15% of revenues are Poland and Spain with the share of 40.8% (H1 2018: 32.3%) and 23.9% (H1 2018: 15.0%). The share of other countries in the geographical structure of revenues does not exceed in any case 15%.

     

    XTB puts also strong emphasis on diversification of segment revenues. Therefore the Group develops institutional activities (X Open Hub), under which it provides liquidity and technology to other financial institutions, including brokerage houses. Revenues from this segment are subject to significant fluctuations from quarter to quarter, analogically to the retail segment, which is typical for the business model adopted by the Group.

     

    It should be noted that, similar as a retail segment, product intervention introduced by relevant regulators on local markets of European Union countries could affect the condition of the European institutional partners of XTB and thus the transaction volume in lots as well as the revenues of XTB from these clients. However, the Management Board cannot exclude that there will be increase in volatility of institutional clients in the further.

     
     

    EXPENSES

     

    Operating costs in the first half of 2019 amounted to PLN 83.6 million and were higher by PLN 0,8 million compared to the same period a year earlier. The most significant changes y/y occurred in:

     

    marketing costs, an increase of PLN 2.0 million due to higher expenditures on marketing online campaigns;

     

    costs of salaries and employee benefits, an increase of PLN 1.4 million related to new employment and employee severance

    payments;

     

    costs of maintaining and lease of buildings, a decrease by PLN 2.4 million and thus an increase in depreciation costs by PLN

    1.0 million, mainly due to a change in the approach to the cost of renting office space from 2019, in connection with the entry into force of IFRS 16 Leasing;

     

    other external services, a decrease by PLN 1.4 million as a result of lower expenditure on other external services (decrease by

    PLN 1.4 million y/y).

     

    In the first half of 2019 operating expenses increased by PLN 1.4 million q/q, mainly due to higher by PLN 1.1 million salaries and employee benefits costs and other expenses by PLN 0.5 million.

     

    The Management Board expects in the second half of 2019 operating expenses to be at a level comparable to that observed in the first half of 2019. The final level will depend on the variable remuneration elements paid to employees, the level of marketing expenditures and the impact of ESMA’s product intervention on the level of revenues generated by the Group. The value of variable remuneration components will be influenced by the results of the Group. The level of marketing expenditures will depend on the impact of the results and profitability of the Group and on responsiveness of the clients to the actions taken. The impact of product intervention introduced by relevant regulators on local markets of European Union countries on the Group’s revenues will determine, if necessary, a revision of the cost assumptions for further months of 2019.

     
     

    DEVELOPMENT PERSPECTIVES

     

    The entry into force of product intervention by ESMA creates both opportunities and threats for XTB. On the one hand, there is a temporary drop in trade volumes among European brokers. On the other hand, the Management Board of XTB is convinced of the business’s vitality over a longer time horizon. The natural consequence of ESMA’s decision should be a wave of consolidation on the market that would allow XTB to consolidate its strong position on the European market. Less influential brokers, unable to withstand regulatory pressure and strong competition from a very significant brokers, will naturally disappear from the market. Consequently large brokers should expect the client base to grow.

     

    XTB has a stable market position and dynamically growing client base. The Group plans further development by expanding the client base and product offer, penetrating existing markets and expanding geographically to new markets to build global brand.

  • 2019.05.15
    Omar Arnaout about XTB after 1Q 2019
  • 2019.05.10
    XTB financial results for the 1st quarter of 2019

    In the first quarter of 2019 XTB reported a consolidated net profit of PLN 0,8 million compared to PLN 4,0 million a quarter earlier. Consolidated revenue was PLN 40,9 (IV quarter 2018: PLN 42,8 million) and operating expenses reached PLN 41,1 million (IV quarter 2018: PLN 40,9 million). In this period XTB noted a record number of new clients i.e. 6 843, which is an increase of 19,2% q/q. Situation on the financial and commodity market was creating limited income opportunities for XTB clients. This translated into the turnover volumes they have achieved and the level of the Group’s revenues.

     

     

    REVENUES

     

    The revenues in the first quarter of 2019 decreased by 4,4% q/q, i.e. PLN 1,9 million from PLN 42,8 to PLN 40,9 million. Significant factors which determined the level of revenues in this period were: the product intervention of the European Securities and Markets Authority (ESMA) coming into force in August 2018, which in case of the retail clients limited maximum permitted level of leverage and low level of volatility in the financial and commodity markets understood as occurrence of clear and long-term market trends at the various types of assets. As a consequence the transaction volume in CFD instruments amounted to 394,4 thousand lots (QIV 2018: 458,9 thousand lots) and profitability per lot reached PLN 104 (QIV 2018: PLN 93).

     

     

    XTB has a solid foundation in the form of constantly growing client base and number of active clients. The intention of the Management Board in 2019 is to further increase the client base. Despite lower revenues in the first quarter of 2019, the Group reported a record number of new clients amounting to 6 843 compared to 5 742 a quarter earlier (QI 2018: 5 312). This is the effect of continuing the optimized sales and marketing strategy and the successive introduction of new products to the offer, such as shares and ETFs. The average number of active clients was higher by 1 677 q/q, i.e. 8,2% q/q.

     

     

    XTB’s aim is to provide a diversified investment offer simultaneously with comfort of managing the differentiated portfolio on one trading platform. The company analyzes other possibilities of expanding the product offer, which could cause the introduction of new products in 2019.

     

    Looking at revenues in terms of the classes of instruments responsible for their creation, it can be seen that similar as in QI of 2018, CFDs based on stock indices dominated. Their share in the structure of revenues on financial instruments in the first quarter of 2019 reached 89,3% against 57,5% year earlier. This is a consequence of the high interest of XTB clients in CFD instruments based on the German DAX stock index (DE30) and the US indices US500, US100, US30. The second most-profitable class of assets were CFD commodities. Their share in the structure of revenues on financial instruments in the first quarter of 2019 reached 6,8% (QI 2018: 10,0%). The most lucrative instrument among clients was CFD based on quotations of the contract for coffee. Revenues on CFD instruments based on currency pairs amounted to 1,1% of total revenues against 29.2% a year earlier. Among this class of instruments, where the EURUSD currency pair was the most popular between XTB clients, there were more predictable trends in which the market moved within a limited price range. This led to the emergence of market trends, which can be predicted with a higher probability than in the case of larger directions of movements on the markets, which created favorable conditions for transactions concluded in a narrow range of the market (range trading). In this case, XTB has observed a higher number of profitable transactions for clients.

     

    XTB clients, looking for investment opportunities to earn money, generally trade in financial instruments that are characterized by high market volatility in a given period. This may lead to fluctuations in the revenue structure by the asset class, which should be treated as a natural element of the business model. From the point of view of XTB, it is important that the range of financial instruments in the Group’s offer is as broad as possible and allows clients to use every upcoming market opportunity to earn money.

     

    The structure of revenue by asset class (in %)

     

     

     

    XTB places great importance on the geographical diversification of revenues. The countries from which the Group derives more than 15% of revenues are Poland and Spain with the share of 54.6% (QI 2018: 26.7%) and 17.0% (QI 2018: 18). The share of other countries in the geographical structure of revenues does not exceed in any case 15%.

     

     

    XTB puts also strong emphasis on diversification of segment revenues. Therefore the Group develops institutional activities (X Open Hub), under which it provides liquidity and technology to other financial institutions, including brokerage houses. Revenues from this segment are subject to significant fluctuations from quarter to quarter, analogically to the retail segment, which is typical for the business model adopted by the Group.

     

     

    It should be noted that, similar as a retail segment, ESMA product intervention could affect the condition of the European institutional partners of XTB and thus the transaction volume in lots as well as the revenues of XTB from these clients. However, the Management Board cannot exclude that there will be increase in volatility of institutional clients in the further.

     

     

    EXPENSES

     

    Operating expenses in the first quarter of 2019 amounted to PLN 41,1 million and were at a similar level in relation to comparative periods (QIV 2018: PLN 40,9 million and QI 2018: PLN 41,0 million). The most important changes y/y occurred in:

    marketing costs, an increase of PLN 1,4 million due to higher expenditures on marketing online campaigns;

    costs of maintenance and lease of buildings, a decrease of PLN 1.2 million and consequently an increase in depreciation

    costs by PLN 0,3 million, mainly due to a change in the recognition of lease rent costs since 2019;

    other external services, a decrease of PLN 1,0 million as a result of lower expenditure on:

    – IT support services (a decrease of PLN 0,6 million y/y);

    – legal and advisory services (a decrease of PLN 0,5 million y/y).

     

     

    In QI of 2019 operating expenses slightly increased, i.e. by PLN 0,2 million, mainly due to higher marketing expenditures by PLN 1,3 million.

     

     

    The Management Board expects in 2019 operating expenses to be at a level comparable to that observed in 2018. The final level will depend on the variable remuneration elements paid to employees, the level of marketing expenditures and the impact of ESMA’s product intervention on the level of revenues generated by the Group. The value of variable remuneration components will be influenced by the results of the Group. The level of marketing expenditures will depend on the impact of the results and profitability of the Group and on responsiveness of the clients to the actions taken. The impact of ESMA’s product intervention on the Group’s revenues will determine, if necessary, a revision of the cost assumptions for further months of 2019.

     

     

    DEVELOPMENT PERSPECTIVES

     

    The entry into force of product intervention by ESMA creates both opportunities and threats for XTB. On the one hand, there is a temporary drop in trade volumes among European brokers. On the other hand, the Management Board of XTB is convinced of the business’s vitality over a longer time horizon. The natural consequence of ESMA’s decision should be a wave of consolidation on the market that would allow XTB to consolidate its strong position on the European market. Less influential brokers, unable to withstand regulatory pressure and strong competition from a very significant brokers, will naturally disappear from the market. Consequently large brokers should expect the client base to grow.

     

    XTB has a stable market position and dynamically growing client base. The Group plans further development by expanding the client base and product offer, penetrating existing markets and expanding geographically to new markets in Africa and Asia, as well as Latin America, using its presence in Belize as a starting point for expansion and business development in other countries of the region.

     

    The situation on the financial and commodity markets affects the financial results of XTB, in particular on the level of revenues. However, there’s no way to predict what market conditions we will have to face with in the longer term, and thus it is premature to draw conclusions about the results of the entire 2019 on the basis of the first quarter.

     

     

     

     

  • 2019.04.17
    Record of the Ordinary General Meeting convened for 15 April 2019
  • 2019.03.08
    XTB financial results for 2018

    In 2018, XTB reported PLN 101 471 thousand of consolidated net profit compared to PLN 92 973 thousand profit a year earlier. This is an increase of PLN 8 498 thousand ie. 9.1%. Operating profit (EBIT) decreased y/y by PLN 12 461 thousand 9.7% to PLN 115 809 thousand. Consolidated revenues amounted to PLN 288 301 thousand to PLN 273 767 thousand a year earlier.

     

     

    OPERATING INCOME

     

    The revenues in 2018 increased by 5.3% y/y ie. PLN 14 534 thousand from PLN 273 767 thousand to PLN 288 301thousand. In the I half of 2018 XTB noted a record revenues (PLN 197 937 thousand), which resulted from the constantly growing customer base, clear trends in the financial markets, relatively high profitability per lot (an average of PLN 153) and significant customer activity expressed in the number of contracts in lots ( 1 291 426 lots). II half of 2018 brought reduction of revenues to the level of PLN 90 364 thousand, calmer situation in the financial markets, decreased profitability per lot (an average of PLN 116) and a decline of trading lots volume to 803 987 lots. One of the relevant factors which determined the level of revenues of XTB in 2018 was the product intervention of the European Securities and Markets Authority (ESMA) coming into force in August, which in case of the retail clients limited maximum permitted level of leverage for CFDs up to 30:1 for major currency pairs and 20:1 for non-majors currency pairs, gold and major indices. Intervention was initially implemented for the period of three months with possibility of further extension. At present, it is known that the intervention will remain in force at least till April, 2019.

     

     

    Although in quarterly terms, the revenues of the XTB Group are subject to significant fluctuations, which is a phenomenon typical of the XTB business model, then in a longer time horizon, which is a year, they take on more stable and comparable values to those from historical years.

     

    XTB has a solid basis for growth in the form of constantly growing customer base and number of active clients. In 2018 Group canvassed 20 672 new clients, it’s increase by 9.3% y/y. The average number of active clients was higher by 2 612, ie. 14.0% y/y. In IV quarter 2018 XTB noted a record number of new clients in relation to previous quarters.

     

     

    In 2018, XTB continued implementation of optimized sales and marketing strategy and introduced new products such as shares and ETFs from the largest stock exchanges in Europe and the United States. Expanding XTB’s offer is a reaction to clients changing investment preferences, which include the increasing popularity of shares and ETFs. XTB’s aim is to provide a diversified investment offer simultaneously with comfort of managing the differentiated portfolio on one trading platform. The company analyzes other possibilities of expanding the product offer, which could cause the introduction of new products in 2019.

     

    In 2019 the Management Board will strive to growing customer base. The Management sees the greatest growth potential in the German, French and Latin American market.

     

    Looking at revenues in terms of the classes of instruments responsible for their creation, it can be seen that similar as in 2017, CFDs based on stock indices dominated. Their share in the structure of revenues on financial instruments in 2018 reached 49.6% against 60.7% year earlier. This is a consequence of the high interest of XTB clients in CFD instruments based on the German DAX stock index (DE30) and the US indices US100, US30, US500. The second most-profitable class of assets were CFD commodities. Their share in the structure of revenues on financial instruments in 2018 reached 24.3% (2017: 11.9%).The most lucrative instrument among customers was CFD based on quotations of the contract for oil and gold. Revenues on CFD instruments based on currency pairs amounted to 23.5% of total revenues against 24.3% a year earlier. Among this class of instruments, the USDTRY currency pair was the most popular between XTB clients.

     

     

     

    Geographically, XTB revenues were well diversified. In 2018 their growth has occurred in both, Central and Eastern Europe, Western Europe and Latin America. Country from which the Group derives more than 15% of revenues is Poland with shares amounting to 25.2% (2017: 28.6%). The second largest market for XTB is Spain, with shares amounting to 14.7% (2017: 20.7%). The share of other countries in the geographical structure of revenues does not exceed in any case 15%. Latin America is also gaining on importance, which has already replaced the gap in Turkey.

     

     

    XTB puts strong emphasis on diversification of segment revenues. Therefore, from 2013, it develops institutional activities (X Open Hub), under which it provides liquidity and technology to other financial institutions, including brokerage houses. Revenues from this segment are subject to significant fluctuations from quarter to quarter, analogically to the retail segment, which is typical for the business model adopted by the Group.

     

     

     

    OPERATING EXPENSES

     

     

    Operating expenses in 2018 amounted to PLN 172 492 thousand (2017: PLN 145 497 thousand) and were higher by PLN 26 995 thousand ie. 18.6% y/y. This increase was mainly higher by one-off event, which was administrative fine imposed by PFSA in the amount of PLN 9 900 thousand and higher by:

     

    PLN 8 481 thousand of marketing costs mainly due to higher expenditures on marketing online campaigns;

    PLN 5 328 thousand of salaries and employee benefits costs mainly due to the increase in variable remuneration

    elements (bonuses). The average number of employees in the Group was 391 persons in 2018 and 388 persons in
    2017. Average monthly cost of remuneration and employee benefits per one employee in the Group in 2018 amounted
    PLN 16.7 thousand and increased in comparison to previous year (2017: PLN 15.7 thousand).

    PLN 2 966 thousand of other external services costs as a result of incurring more expenditure on:

    – legal and advisory services (increased by PLN 1 060 thousand y/y);

    – market data services (increased by PLN 995 thousand y/y) and

    – IT systems and licenses (increased by PLN 627 thousand y/y).

     

     

    In IV Quarter of 2018 operating expenses amounted on similar level as previous quarters of 2018 (after correcting by one-off event).

     

     

     

    DEVELOPMENT PERSPECTIVES

     

     

    XTB has a stable market position, growing customer base and over PLN 465 million of own cash on the balance sheet. The Group plans further development by expanding the customer base and product offer, penetrating existing markets and expanding geographically to new markets in Africa and Asia, as well as Latin America, using its presence in Belize as a starting point for expansion and business development in other countries of the region.

    The entry into force of product intervention by ESMA creates both opportunities and threats for XTB. On the one hand, there is a temporary drop in trade volumes among European brokers. On the other hand, the Management Board of XTB is convinced of the business’s vitality over a longer time horizon. It seems likely that clients gradually adjust their trading strategies to a lower level of financial leverage. Maintaining the ESMA decision in time should lead to a wave of consolidation in the market and allow XTB to consolidate its strong position on the European market.

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Events Calendar

  • 2019.11.08
    Publication of Consolidated Quarterly Report for 3Q 2019
  • 2019.08.22
    Publication of Consolidated Semi-Annual Report for 1H 2019
  • 2019.05.10
    Publication of Consolidated Quarterly Report for 1Q 2019
  • 2019.04.26
    Meeting with institutional investors and analytics
  • 2019.03.08
    Publication of Annual Report and Consolidated Annual Report for 2018
  • 2019.02.11
    Meeting with institutional investors and analytics
  • 2018.11.08
    Publication of Consolidated Quarterly Report for 3Q 2018
  • 2018.10.29
    Meeting with institutional investors and analytics
  • 2018.10.09
    Closed period in connection with 3Q 2018 report: 09.10.2018 – 08.11.2018
  • 2018.08.23
    Publication of Consolidated Semi-Annual Report for 1H 2018
  • 2018.08.06
    Meeting with institutional investors and analytics