Press office

  • 2020.05.07
    XTB financial results for the 1st quarter of 2020

    In the first quarter of 2020 XTB reported a consolidated net profit of PLN 176,0 million compared to PLN 0,8 million a year earlier. It is an increase of PLN 175,2 million. Consolidated revenue amounted to PLN 306,7 million (I quarter 2019: PLN 40,9 million) and operating expenses amounted to PLN 72,5 million (I quarter 2019: PLN 41,1 million). In this period the Group noted a record number of new clients i.e. 21 911, which is an increase of 220,2% y/y.

    The results of the first quarter of 2020 were charged with the reclassification of negative foreign exchange differences in the amount of PLN 21,9 million arising from the translation of the XTB Yönetim Danışmanlığı Anonim Şirketi (former: X Trade Brokers Menkul Değerler A.S.) subsidiary’s equity from the position “Foreign exchange differences on translation” in equity to income statement. The recognition of reclassification in the above amount as financial cost in accounting records is an accounting operation. However, it did not affect the liquidity position of XTB nor the total amount of Group’s equity as at the date of its booking.

     

    REVENUES

     

    In the first quarter of 2020 XTB noted a record revenue increase by 650,0 % y/y, i.e. by PLN 265,8 million from PLN 40,9 million to PLN 306,7 million. The significant factors determining the level of revenues were above-average volatility on financial and commodity markets caused by among others coronavirus COVID-19 global pandemic and a constantly growing client base combined with their high transaction activity noted in the number of concluded transactions in lots. As a consequence the transaction volume in CFD instruments amounted to 784,8 thousand lots (QI 2019: 394,4 thousand lots) and a profitability per lot increased by 276,9%.

     

    XTB has a solid foundation in the form of constantly growing client base and the number of active clients. In the QI of 2020 the Group reported a new record in the number of new clients amounted to 21 911 compared to 6 843 a year earlier i.e. an increase by 220,2%. This is the effect of continuing the optimized sales and marketing strategy and the successive introduction of new products to the offer, such as CFD based on sector indices, shares, ETFs and expansion into new geographic markets. The average number of active clients was higher by 23 415 y/y, i.e. 105,3%. The intention of Management Board in 2020 is to further increase the client base.

     

    XTB’s aim is to provide a diversified investment offer simultaneously with comfort of managing the differentiated portfolio on one trading platform. The company analyses other possibilities of expanding the product offer, which could cause the introduction of new products in 2020 and subsequent years.

     

    Looking at revenues in terms of the classes of instruments responsible for their creation, it can be seen that CFDs based on commodities dominated. Their share in the structure of revenues on financial instruments in QI 2020 reached 51,2% against 6,8% a year earlier. This is a consequence of among other large price fluctuations on CFD instruments based on oil prices and natural gas contracts. The second most profitable class were CFD instruments based on indices. Their share in the structure of revenues in QI 2020 reached 36,2% (QI 2019: 89,3%). The most popular instruments among this asset class were instruments based on the German DAX stock index (DE30) and contracts based on American indices. Revenues of CFD based on currency reached 11,1% of all revenues, compared to 1,1% a year earlier.

     

    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 27,9% (QI 2019: 54,6%) and 19,0% (QI 2019: 17,0%). The share of other countries in the geographical structure of revenues does not exceed in any case 15%.

     

    XTB also puts a 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.

     

     

    EXPENSES

     

    In the QI of 2020 operating expenses amounted to PLN 72,5 million and were higher by PLN 31,4 million in relation to the same period a year earlier (QI 2019: PLN 41,1 million). The most significant changes occurred in:

    costs of salaries and employee benefits, an increase of PLN 19,0 million mainly due to provisions established for variable

    components of remuneration (bonuses) and unused holidays and an increase in employment;

    marketing costs, an increase of PLN 7,6 million mainly due to higher expenditures on marketing online campaigns;

    commission expenses, an increase of PLN 2,5 million as a result of larger amounts paid to payment service providers through

    which clients deposit their funds on transaction accounts;

    other external costs, an increase of PLN 2,0 million as a result of higher expenditures on: (i) IT support service (an increase of

    PLN 1,6 million y/y); (ii) IT systems and licenses (an increase of PLN 0,4 million y/y).

     

    In q/q terms, operating costs increased of PLN 25,2 million mainly due to higher by PLN 14,7 million costs of salaries and employee benefits and higher by PLN 6,5 million marketing expenditures.

     

    The Management Board expects that during the whole 2020 operating costs will be higher than in 2019. In the coming quarters the costs of salaries and employee benefits are expected to decline to similar levels to those we observed quarterly in 2019. In the second quarter of 2020 marketing costs are also expected to decline – similarly to the costs of salaries and employee benefits.

     

    The final level of operating costs will depend on the level of variable remuneration components paid to employees, the level of marketing expenditures, the dynamics of geographical expansion into new markets and the impact of potential product interventions and other external factors 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 depends on their impact on the Group’s results and profitability, the rate of foreign expansion and on clients responsiveness to the actions taken. The entry of new regulations may determine if necessary, a revision of the Group’s cost assumption.

     

    DEVELOPMENT PERSPECTIVES

     

    XTB with its strong market position and dynamically growing client base enters the non-European markets. XTB is consequently implementing a strategy on building a global brand. In 2020 the Group aims to increase its European market penetration and continue with building its position in Latin America, Asia and Africa.

  • 2020.03.11
    Financial results of XTB for 2019

    In 2019 XTB reported a consolidated net profit of PLN 57,9 million compared to PLN 101,5 million net profit a year earlier. Consolidated revenues amounted to PLN 239,3 million compared to PLN 288,3 million a year earlier, and operating costs PLN 173,8 million (2018: PLN 172,5 million). The Group gained a record number of new clients, i.e. 36 555, which means an increase by 76,8% y/y.

     

    REVENUES

     

    In 2019 the revenues decreased by 17,0 y/y i.e. PLN 48 997 thousand from PLN 288 301 thousand to PLN 239 304 thousand. One of the relevant factors which determined the level of revenues of XTB was the product intervention of ESMA. coming into force in August 2018. The regulations limited maximum permitted level of leverage for retail clients, which resulted in lower volume of transactions concluded by clients. Consequently, CFDs turnover in lots amounted to 1 597 218 lots compared to 2 095 412 a year earlier. Profitability per lot increased by 8,7% y/y i.e. from PLN 138 to PLN 150.

    In Q42019, the revenues increased by 109,3% compared to the Q4 2018, i.e. by PLN 46 785 thousand from PLN 42 786 thousand to PLN 89 571 thousand. This change was driven by: (i) higher profitability per lot – an increase by PLN 134 (from PLN 93 to PLN 227); (ii) lower financial instruments turnover noted in the number of concluded transactions in lots – a decrease by 64 723 lots (from 458 869 to 394 147 lots).

    XTB has a solid basis for growth in the form of constantly growing customer base and number of active clients. In 2019 the Group reported a record number of new clients amounting to 36 555 compared to 20 672 in 2018, i.e. an increase by 76,8%. This is an effect of continuing the optimized sales and marketing strategy and the successive introduction of new products to the offer, such as CFDs based on sector indices, shares, ETFs and an expansion to new geographical markets. The average number of active clients was higher by 5 303 compared to 2018, i.e. 24,9%. The intention of the Management Board in 2020 is to further increase the client base. This is confirmed by the data for January, when the Group gained a record number of new clients i.e. 4 480.

    XTB’s aim is to provide a diversified investment offer simultaneously with comfort of managing the differentiated portfolio on one trading platform. The company analyses other possibilities of expanding the product offer, which could cause the introduction of new products in 2020 and further years.

    Looking at revenues in terms of the classes of instruments responsible for their creation, it can be seen that in 2019, CFDs based on stock indices dominated. Their share in the structure of revenues on financial instruments reached 74,8% compared to 49,6% a 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 US 500 and US 100. The second most-profitable class of assets were CFD based on currencies. Their share in the structure of revenues on financial instruments in 2019 reached 18,2% (2018: 23,5%). Instruments based on the EURUSD currency pair were the most popular among this asset class. The revenues from commodity-based instruments accounted for 5,2% of total revenues, compared to 24,3% a year earlier.

    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 result of operations on financial instruments

    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 40,5% (2018: 25,2%) and 19,9% (2018: 14,7%) respectively. The share of other countries in the geographical structure of revenues does not exceed in any case 15%.

     

    XTB also puts strong emphasis on diversification of segment revenues. Therefore the Group develops, besides retail segment, 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 to the 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 been increase in volatility of institutional clients in the future.

     

    OPERATING EXPENSES

     

    Operating expenses in 2019 amounted to PLN 173 892 thousand and were similar to those a year earlier (an increase by PLN 1 400 thousand y/y). The most significant changes y/y occurred in:

    salaries and employee benefits costs, an increase by PLN 7 546 thousand mainly due to new employment and employee

    severance payments;

    marketing costs, an increase by PLN 4 394 thousand mainly due to higher expenditures on online marketing campaigns;

    costs of maintenance and lease of buildings, a decrease by PLN 4 657 and consequently an increase in depreciation costs by

    PLN 2 822, relating to the entry into force of IFRS 16 Leasing;

    other costs, a decrease by PLN 9 746 thousand as a result of one-off event in Q3 2018 in the amount of PLN 9 900 thousand.

    The Management Board expects that in 2020 operating expenses should be at a level of several percent higher than in 2019. The final level will depend on the pace of geographical expansion into new markets, the variable remuneration elements (bonuses) paid to employees, the level of marketing expenditures and the impact of regulations and other external factors on the level of revenues generated by the Group.

     

    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 with its strong market position and dynamically growing client base enters the non-European markets. XTB is consequently implementing a strategy on building a global brand. The Group aims to increase its European market penetration and continue with building their position in Latin America, Asia and Africa.

  • 2019.11.08
    XTB financial results for the 3rd quarter of 2019

    In the third quarter of the year 2019, XTB reported a consolidated net profit of PLN 15,5 million compared to PLN 2,9 million in the third quarter of 2018. Consolidated revenue was PLN 61,0 (Q3 2018: PLN 47,6 million) and operating expenses reached PLN 43,0 million (Q3 2018: PLN 48,8 million). In the third quarter the Group noted a record number of new clients, i.e. 10 042. This is an increase of 105,6% y/y and 8,6% q/q.
       

    In the first three quarters of 2019 the Company reported a consolidated net profit of PLN 20,8 million compared to PLN 97,5 million reported over the same period of 2018.

     

    REVENUES 

     

    The revenues in the Q3 2019 increased by 28,1% y/y, i.e. PLN 13,4 million from PLN 47,6 to PLN 61,0 million. Significant factors which determined the revenue growth were: (i) higher XTB clients turnover of financial instruments reflected by the number of executed transactions i.e. growth of 78 215 lots (from 345 118 to 423 333 lots), (ii) higher profitability per unit lot, i.e. growth of PLN 6 (from PLN 138 to PLN 144).

     

    XTB has a solid foundation in the form of a constantly growing clients base and number of active clients. The intention of the Management Board in 2019 is to further increase the client base. In the period from the beginning of 2019 the Group reported a record number of new clients amounting to 26 131 compared to 14 930 in the comparable period of 2018. In the Q3 2019 the number of new clients increased by 796 q/q i.e. 8,6% 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 and ETFs. The average number of active clients was higher by 7 859 compared to Q3 2018, i.e. 38,8% y/y.

     

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

     

    Looking at revenues in terms of the classes of instruments responsible for their creation, it can be seen that CFDs based on currency dominated. Their share in the structure of revenues on financial instruments in the Q3 2019 reached 51,6% against 22,0% a year earlier. This is a consequence of the high interest of XTB clients in instruments based on the EURUSD currency pair. The second most-profitable class of assets were CFDs based on stock indices. Their share in the structure of revenues on financial instruments in the Q3 2019 reached 36,5% (Q3 2018: 18,6%). The most popular instruments among this class were instruments based on the German DAX stock index (DE30) and the US indices US100 and US500. Revenues on CFD instruments based on commodities accounted for 8,8% of total revenues against 58,9% a year earlier.

     

    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 41,4% (Q3 2018: 38,4%) and 18,5% (Q3 2018: 12,5%) respectively. The share of other countries in the geographical structure of revenues does not exceed in any case 15%.

     

    XTB also puts a 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 to the 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 been increase in volatility of institutional clients in the future

     

    EXPENSES


    Operating expenses in the third quarter of 2019 amounted to PLN 43,0 million and were lower by PLN 5,9 million compared to the same period last year. The most important changes y/y occurred in:

    costs of salaries and employee benefits, an increase of PLN 1,7 million related to new employment and employee severance payment;

    costs of maintenance and lease of buildings, a decrease of PLN 1,1 million and consequently an increase in depreciation costs by PLN 0,9 million, mainly due to a change in the approach to the cost of renting office space from 2019, relating to the entry into force of IFRS 16 Leasing;

    other cpsts, a decrease of PLN 7,8 million as a result of one-off event in Q3 2018, i.e. which was an administrative fine imposed by the Polish Financial Supervision Authority in the amount of PLN 9,9 million.

     

    In Q3 2019 operating expenses slightly increased by PLN 0,5 million q/q, mainly due to higher salaries and employee benefits costs by PLN 0,6 million.

    The Management Board expects in the Q4 2019 operating expenses to be at a level comparable to that observed in the previous quarters this year. 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.

     

    PERSPECTIVES

     

    The entry into force of product intervention, introduced by relevant regulators on local markets of European Union countries, 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 relevant regulators on local markets of European Union countries 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 customer base. The Group plans further development by expanding the customer base and product offer, penetrating existing markets and expanding geographically to new markets to build a global brand.

  • 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.

  • 2019.05.10
    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.

     

     

     

     

  • 2019.03.08
    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.

  • 2018.11.08
    XTB financial results for the 3rd quarter of 2018

    In the III quarter of 2018, XTB noted consolidated net loss of PLN 2,9 million against PLN 31,3 million profit a year earlier. The III quarter of 2018 result was charged with a one-off event, which was the imposition of an administrative fine by the PFSA in the amount of PLN 9,9 million of which the Company informed in the current report No. 20/2018 dated 18 September 2018. After correcting by a one-off event, in the III quarter of 2018, the Company generated PLN 6,2 million of consolidated net profit and PLN 7,9 million of operating profit (EBIT). Consolidated revenues amounted to PLN 47,6 million compared to PLN 73,1 million a year earlier.

     

    In the period I-III quarter of 2018, XTB generated consolidated net profit of PLN 97,5 million (after correcting by one-off event PLN 107,1 million) against PLN 60,7 million profit a year earlier.

     

     

    Revenues

     

    In the I half of 2018 XTB noted a record revenues (PLN 197,9 million), which were the result the constantly growing customer base, high volatility 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. In August 2018, the product intervention of the European Securities and Markets Authority (ESMA) came into force. which caused, among others reduction for the retail client of the 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. ESMA’s decision together with the holiday period, and the lower volatility on the financial markets, contributed to the reduction in the III quarter of 2018 transactions volume in lots of 34,1% y/y and 44,0% q/q. Volume was lower by 178,7 thousand of lots y/y and unit profitability by PLN 1,7. Consequently, the revenues decreased by 34,9% y/y ie (PLN 25,5 million) from PLN 73,1 million to PLN 47,6 million. It should be emphasized that XTB business model is characterized by high volatility of revenues in a short period of time.

     

     

    XTB has a solid basis for growth in the form of constantly growing customer base and number of active clients. In the III quarter of 2018 the number of new clients was 4 884 and was higher by 16,3% y/y. The average number of active clients was higher by 2 014, ie. 11,0% y/y.

     

     

    Similarly to the prior quarters of current and previous year, in the III quarter of 2018, XTB implemented an optimized sales and marketing strategy and introduced new products. XTB’s offer has expanded to include shares and ETFs from the largest stock exchanges in Europe and the United States. The aim of expanding the product offer is to create a complete investment company offering various products to investors tailored to their risk appetite.

     

    In the IV quarter of 2018, the Management Board will strive to stabilize the number of new clients and the average number of active clients at the levels observed in previous, record quarters. 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, in the III quarter of 2018, CFDs based on commodity dominated. Their share in the structure of revenues on financial instruments in the III quarter of 2018 was 58,9% against 7,5% a year earlier. The most popular instrument among customers was CFD based on quotations of the contract for coffee quoted on the regulated market and an instrument which price is based on quotations of troy ounce of gold on the interbank market. Revenues on CFD instruments based on currency pairs amounted to 22,0% of total revenues against 39,8% a year earlier. Among this class of instruments, the USDTRY currency pair was the most popular among XTB clients.

     

     

     

    Geographically, XTB revenues were well diversified. In the I-III period of 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 33,5% (I-III period of 2017: 24,5%). The second largest market for XTB is Spain, with shares amounting to 14,5% (I-III period of 2017: 20,3%). 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.

     

     

    Expenses

     

    Operating expenses in the period of I-III quarter of 2018 amounted to PLN 131,6 million (I-III quarter of 2017: PLN 107,4 million) and were higher by PLN 24,2 million ie. 22,6% y/y. This increase was mainly higher by one-off event, which was administrative fine imposed by PFSA in the amount of PLN 9,9 million and higher by:

    •  PLN 6,0 million of marketing costs mainly due to higher expenditures on marketing online campaigns;

    • PLN 4,9 million of salaries and employee benefits costs mainly due to the increase in variable remuneration elements (bonuses);

    • PLN 2,9 million of other external services costs as a result of incurring more expenditure on : 1) IT systems and licenses (increased by PLN 2,2 million y/y); 2) legal and advisory services (increased by PLN 1,1 thousand y/y);

    • PLN 1,8 million of commission costs resulting from higher amounts paid to payment service providers through which clients deposit their funds to transaction accounts.

     

     

    In the Company’s opinion, the imposition of an administrative fine by PFSA is unjustified and not confirmed in the facts. The Commission refused to carry out the evidence requested by the Company (including the expert’s opinion) and did not include the reports of independent experts submitted by the Company. Acting in the interest of the Company and its shareholders, as well as being guided by the welfare of its clients, the Company appealed the decision by filing on 29 October 2018 complaint against the PFSA decision to Provincial Administrative Court.

     

    In terms of q/q, after correcting by one-off event, operating expenses were reduced by PLN 2,1 million ie 4,9%.

     

     

    The Management Board expects in IV quarter of 2018 operating expenses to be at a level comparable to that observed in the previous quarter of 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 customers 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 this year.

     

     

    Development perspectives

     

    XTB has a stable market position, growing customer base and over PLN 500 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 leading position on the European market.

  • 2018.09.18
    Company statement regarding the fine from the KNF

    With reference to the announcement from the 404th meeting of the Polish Financial Supervision Authority (KNF) on 18 September 2018, the Management Board of XTB fully maintains its previous position and finds no grounds for objections regarding the company’s operations.

     

    During the proceedings before the KNF, the Management Board provided the supervisor with extensive explanations as well as legal and quantitative expert opinions of independent entities that confirm that XTB’s use of the asymmetric deviation mechanism did not violate the principle of acting in the best interests of the clients and did not affect the clients’ transaction results. KNF’s comments on the application of this mechanism pertain to operations from January 2014 to May 2015. The guideline regarding the need for symmetrical deviation was issued by the KNF in May 2016, almost a year after the company made voluntary amendments in its IT systems.

     

    Acting in the interest of the company and its shareholders, as well as being guided by the well being of its clients, the company intends to appeal against the decision of the supervisor.

     

    X-Trade Brokers Dom Maklerski S.A. Management Board

  • 2018.08.23
    XTB financial results for the 1st half of 2018

    OVER PLN 70 MILLION REVENUE GROWTH AND RECORD GROWTH OF PROFIT OF NEARLY 250%, GOOD PROSPECTS FOR 2018

     

    In the first half of 2018 X-Trade Brokers Dom Maklerski S.A. (XTB) noted a growth of revenue by PLN 72,6 million up to PLN 197,9 million, as a result of increase in turnover and the improvement of profitability per lot. Operating profit increased by PLN 115,1 million, i.e. PLN 62,4 million y/y. The company reported a record consolidated net profit of PLN 100,4 million against PLN 29,4 million profit a year earlier. In this year XTB will strive to stabilize the number of new clients and average number of active clients at the levels observed in previous, record quarters. In addition, the Management Board sees the greatest potential for business growth in the German, French and Latin American markets.

     

     

    MORE THAN PLN 70 MILLION INCREASE IN REVENUE THROUGH GROWTH BY 23% OF TURNOVER AND IMPROVEMENT OF PROFITABILITY PER LOT ALMOST PLN 35

     

    In the first half of 2018, the company’s revenues amounted to PLN 197,9 million, i.e. an increase of 57,9% y/y. Such a significant increase in revenues is the result mainly from the increase of transactions volume in lots and profitability per lot. During the reporting period, the turnover amounted to 1,3 million lots, i.e. was higher by 237,5 thousand lots y/y and unit profitability amounted to PLN 153, i.e. an increase by 28,6% y/y.

     

     

     

    GROWTH IN THE MAIN MARKETS

     

    In the first half of 2018 XTB recorded an increase in revenues on the main markets, i.e. in Central and Eastern Europe and Western Europe, by 108,4% and 24,0% y/y, respectively. During reporting period, Poland with shares amounted to 32,3% in the sales structure, recorded PLN 64,0 million of revenues, i.e. increased by 162,2% y/y. The second, Spanish market (15,0%) in terms of shares completed the first half of this year sales at the level PLN 29,7 million. Latin America is also gaining on importance, which has already replaced gap in Turkey, obtaining PLN 10,1 million of revenues, i.e. increased by 240,2% y/y.

     

     

     

    GROWING THE NUMBER OF ACTIVE RETAIL CLIENTS

     

    In the first half of 2018 Group’s revenues from retail operations amounted to PLN 186,9 million, compared to PLN 105,2 million in the corresponding period of the previous year.

     

     

    XTB has a solid basis for growth in the form of constantly growing customer base and number of active clients. In the I half of 2018 the number of new clients was 10 046 and was higher by 1 916 new clients y/y. The average number of active clients was higher by 4 390 y/y, i.e. 24,8% y/y.

     

    During the reporting period, revenues from institutional activities of XTB amounted to PLN 11,0 million, i.e. decrease by 45,4% y/y. Revenues from this segment are subject to quarterly fluctuations, which is typical of the business model adopted by the Group.

     

     

    RECORD NET PROFIT, COSTS AT A STABLE LEVEL

     

    Operating profit in the first half of 2018 amounted to PLN 115,1 million, i.e. increased by 118,5% y/y. Operating expenses, in the first half of 2018 amounted to PLN 82,8 million, i.e. 14,0% increase y/y. This increase was higher by: PLN 3,0 million of marketing costs mainly due to higher expenditures on marketing online campaigns; PLN 2,8 million of salaries and employee benefits costs mainly due to the increase in variable remuneration elements (bonuses); PLN 2,6 million of other external services costs as a result of incurring more expenditure on IT systems and licenses, legal and advisory services, internet and telecommunications; PLN 1,4 million of commission costs resulting from higher amounts paid to payment service providers through which clients deposit their funds to transaction accounts and increase by PLN 1,4 million other costs.

     

    The Management Board expects that in 2018 operating expenses should be at a level comparable (slightly higher) to that observed in the 2017. 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 customers 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 quarters of this year.

     

     

    DEVELOPMENT PROSPECTS IN 2018

     

    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 and FX/CFD market will be consolidated. Changes in regulations may make business activity unattractive for some entities, especially those focused on a quick profit and aggressive marketing strategies. Brokers with a wide range of products and an established business position, as in the case of XTB, have a chance to increase their existing market share.

     

     

  • 2018.05.10
    XTB financial results for the 1st quarter of 2018

    ALMOST DOUBLE INCREASE OF REVENUES AND A RECORD NET PROFIT, GOOD PROSPECTS FOR 2018

     

    In the first quarter of oferta pro2018, X-Trade Brokers Dom Maklerski S.A. (XTB) recorded a double growth of revenues to the level of PLN 113.7 million, as a result of the increase in turnover and transaction profitability. Operating profit increased by PLN 72.7 million, ie PLN 50.5 million y/y. The company reported a record consolidated net profit of PLN 59.5 million compared to PLN 10.6 million in the corresponding period of the previous year. In this year XTB plans to further develop the client base and product offer.

     

    – In the first quarter of 2018, we recorded almost double increase in revenues, the effect of a higher volume of client transaction trading and higher profitability per lot on all major markets of activity. The company closed the first quarter of this year, a record net profit of PLN 59.5 million. A positive financial result for the first quarter of 2018, is a good forecast for the next quarter of 2018 – comments Omar Arnaout, President of the Management Board of X-Trade Brokers DM S.A.

     

     

    DOUBLING THE REVENUES THROUGH HIGHER TRANSACTIONS VOLUME AND PROFITABILITY

     

    In the first quarter of 2018, the company’s revenues amounted to PLN 113.7 million, ie. an increase of 93.7% y/y. Doubling revenues is the result of an increase in the volume of transaction turnover of customers calculated in lots as well as profitability per lot. During the reporting period, the turnover of customers amounted to 675 thousand lots, ie. more by 135.3 thousand lots r/r, and unit profitability amounted to PLN 168, ie. an increase of 54.1% y/y.

     

     

     

    GROWTH IN THE MAIN MARKETS

     

    In the first quarter of 2018, XTB recorded an increase in revenues on the main business markets, ie. in Central and Eastern Europe and Western Europe, by 135.0% and 75.1% y/y, respectively. During the reporting period, Poland, which constitutes a 26.7% share in the sales structure, recorded PLN 30.3 million of revenues, ie. 186.0% increase y/y. The second Spanish market (18.0%) in terms of shares completed the first quarter of this year sales at the level of PLN 20.5 million, which gives a 56.4% increase y/y. Latin America, which filled the gap after Turkey, obtaining PLN 5.8 million of sales, also gains in importance in global sales.

     

     

     

    GROWING THE NUMBER OF ACTIVE RETAIL CLIENTS

     

    In the first quarter of 2018, the Group’s revenues from retail operations amounted to PLN 102.9 million, compared to PLN 44.1 million in the corresponding period of the previous year.

     

     

    – We note a systematic increase in the number of customers. In the first quarter of 2018, the number of new accounts was higher by nearly 20% y/y. The number of active accounts increased by 24% y/y to PLN 25.3 thousand and it was record-breaking in the last two years. This is the effect of an effective sales and marketing strategy and the introduction of new products, with a good situation on the financial markets – says President Omar Arnaout.

     

    During the reporting period, revenues from institutional activities of XTB amounted to PLN 10.8 million, ie a decrease by 26.1% y/y. Revenues from this segment are subject to quarterly fluctuations, which is typical of the business model adopted by the Group.

     

     

    RECORD NET PROFIT, COSTS AT A STABLE LEVEL

     

    Operating profit in the first quarter of 2018 amounted to PLN 72.7 million, ie 228.1% increase y/y. Operating expenses, during the reporting period, amounted to PLN 41.0 million, ie 12.2% increase y/y. This increase was due to increase by PLN 2.5 million costs of other external services; PLN 1.0 million costs of salaries and employee benefits and PLN 0.8 million commission expenses resulting from higher amounts paid to payment service providers, through which clients deposit their funds on transaction accounts.

     

    The Management Board expects that during the whole calender year 2018, operating expenses should be at a comparable or slightly higher level than the one from 2017. Their final level will depend on the amount of variable components of remuneration paid to employees and on the level of marketing expenses.

     

    In the first quarter of 2018, XTB recorded PLN 59.5 million of consolidated net profit compared to PLN 10.6 million profit a year earlier. This is an increase of PLN 48.9 million, ie 459.1% y/y.

     

     

    DEVELOPMENT PROSPECTS IN 2018

     

    The Group plans to further develop its client base and product offer, based on existing markets and new markets in Africa and Asia, as well as expansion in Latin America, using its presence in Belize. The Management sees the largest potential for business growth in Germany, France and Latin America.