FLOW TRADERS Q121 TRADING UPDATE
Amsterdam, the Netherlands - Flow Traders N.V. (Euronext: FLOW) announces its unaudited Q121 trading update
Highlights
- Market ETP Value Traded increased by 26% quarter-on-quarter and decreased 15% vs Q120
- Flow Traders ETP Value Traded increased 12% quarter-on-quarter and decreased 6% vs Q120
- Flow Traders recorded NTI of €142.2m in Q121 reflecting strong trading performance across the board. This compares to NTI of €130.3m in Q420 and €495.0m in Q120
- Total operating expenses of €63.0m incurred in Q121 which includes €0.7m of one-off COVID-19 and business continuity plan-related expenses
- 566 FTEs as at 31 March 2021 compared to 554 FTEs as at 31 December 2020
- Q121 EBITDA reached €79.3m with a margin of 56%
- Q121 Net Profit amounted to €61.6m with basic EPS of €1.39
- Regulatory Own Funds Requirement (OFR) as at 31 March 2021 was €226m resulting in excess capital of €190m as at 31 March 2021. Trading capital stood at €755m at the end of the first quarter
- Completed €25m share buyback announced in February 2021. Announces additional repurchase of shares of up to €20m commencing on 20 April 2021 over a period of 12 months in connection with employee incentive plans
Financial Overview
| €million | Q121 | Q420 | Q121 | Q120 |
| Net Trading Income | 142.2 | 130.3 | 142.2 | 495.0 |
| EMEA (Europe) | 81.4 | 93.9 | 81.4 | 304.9 |
| Americas | 38.8 | 22.0 | 38.8 | 149.0 |
| APAC | 22.1 | 14.3 | 22.1 | 41.0 |
| Net Trading Income | 142.2 | 130.3 | 142.2 | 495.0 |
| Employee expenses* | 47.0 | 20.4 | 47.0 | 154.9 |
| Technology expenses | 11.9 | 12.0 | 11.9 | 11.4 |
| Other expenses | 3.4 | 4.0 | 3.4 | 4.1 |
| One-off expenses | 0.7 | 3.4 | 0.7 | 0.9 |
| Total Operating Expenses | 63.0 | 39.8 | 63.0 | 171.2 |
| EBITDA | 79.3 | 90.5 | 79.3 | 323.7 |
| Depreciation/Amortisation | 3.7 | 3.7 | 3.7 | 3.6 |
| Write offs, tangible assets | - | - | - | - |
| Results subsidiaries | - | 0.4 | - | - |
| Profit Before Tax | 75.5 | 86.3 | 75.5 | 320.1 |
| Tax | 14.0 | 20.1 | 14.0 | 57.8 |
| Net Profit | 61.6 | 66.2 | 61.6 | 262.3 |
| Basic EPS** (€) | 1.39 | 1.47 | 1.39 | 5.71 |
| Fully diluted EPS*** (€) | 1.35 | 1.41 | 1.35 | 5.71 |
| EBITDA margin | 56% | 69% | 56% | 65% |
* Q121 employee expenses not directly comparable with Q420 due to the accounting treatment of the new share plan which was implemented in Q420. Fixed employee expenses were: Q121 - €13.0m; Q420 - €11.9m; Q120 - €11.8m
** Weighted average shares outstanding: Q121 - 44,348,083; Q420 - 45,022,415; Q120 - 45,913,486. 44,306,638 shares outstanding as at 31 March 2021
*** Determined by adjusting the basic EPS for the effects of all dilutive share-based payments to employees
Value Traded Overview
| €billion | Q121 | Q420 | Change | Q121 | Q120 | Change |
| Flow Traders ETP Value Traded | 414.4 | 370.8 | 12% | 414.4 | 441.6 | (6%) |
| EMEA (Europe) | 199.4 | 182.4 | 9% | 199.4 | 232.7 | (14%) |
| Americas | 189.6 | 170.5 | 11% | 189.6 | 188.9 | 0% |
| APAC ex China | 25.5 | 17.9 | 42% | 25.5 | 20.0 | (27%) |
| Flow Traders’ non-ETP Value Traded | 915 | 765 | 20% | 915 | 1,215 | (25%) |
| Market ETP Value Traded1 | 9,313 | 7,403 | 26% | 9,313 | 10,948 | (15%) |
| EMEA (Europe) | 590 | 489 | 21% | 590 | 679 | (13%) |
| Americas | 7,780 | 6,081 | 28% | 7,780 | 9,421 | (17%) |
| APAC | 944 | 833 | 13% | 944 | 849 | 11% |
| APAC ex China | 415 | 380 | 9% | 415 | 476 | (13%) |
1. Source - Flow Traders analysis
Q121 Regional Highlights
EMEA:
- Reinforced position as the leading liquidity provider in ETPs, both on- and off-exchange. Retained #1 position off-exchange in Fixed Income, Equity, Fixed Income and Commodity ETFs
- Resilient trading performance in the core ETP business alongside positive NTI contributions from non-ETP market making activities
- Successfully registered with the Dutch Central Bank (DNB) in line with recent regulations relating to cryptocurrency to fiat currency trading
AMERICAS:
- Robust trading performance, particularly in equity-related ETPs
- Continued to support new issues as Lead Market Maker - acted as Lead Market Maker for the VanEck Vectors Social Sentiment ETF (BUZZ) which saw the third highest volume ever traded for a new ETF launch
- Further expansion of the counterparty base in Q1 including several large asset managers
APAC:
- Consistent strong performance across asset classes throughout the region
- Awarded Best ETF Market Maker by the Tokyo Stock Exchange and received the Top Market Maker - ETP Coverage award from the HKEX for Flow Traders’ contribution to the ETF market in 2020
- Flow Traders has been a participating market maker from launch on 1 February on JPX’s ETF RFQ Conneqtor platform
Repurchase of Shares
- Flow Traders announces that it will repurchase shares for a total aggregate consideration of up to €20m in connection with its employee incentive plans and to minimise shareholder dilution. The share repurchases will commence on 20 April 2021 for a period of 12 months. As before, any shares repurchased will be held in treasury until such time as they are distributed
Management Board Comments
CEO Dennis Dijkstra stated:
“Once again our robust business continuity plan has ensured that we have functioned as normal throughout the first quarter. The disciplined execution of our strategic growth agenda meant that investments we have made are continuing to yield meaningful returns. This discipline is reflected in our strong cost control and conservative capital position. It was pleasing to successfully complete our registration with the DNB in line with recent regulations relating to cryptocurrency to fiat currency trading. This is in line with our longstanding advocation of increased regulation and transparency for the markets we operate in. In order to drive forward our strategy we need to attract and recruit the best and brightest talent and our success in this regard has continued in 2021. Looking ahead to the end of the second quarter, we will finally see the new IFR/IFD prudential regime apply to Flow Traders. Our assessment of the impact remains the same in that our capital requirements should be markedly lower. It is still envisaged that this capital relief will be partially offset by growth business activities.”
Chief Trading Officer Folkert Joling added:
“We saw a strong trading performance across the board with all desks and regions contributing to our second strongest ever Q1. ETP flows during the quarter were dominated by sector rotations and the continued shift towards ESG investing. We continued to expand and deepen our ETP trading footprint during the quarter and are thoroughly executing our growth strategy of improving pricing and access to fixed income, commodity, crypto and FX markets and this is reflected in this quarter’s performance."
Preliminary Financial Calendar
23 April 2021 AGM
27 April 2021 FY20 final dividend proposed ex-dividend date
28 April 2021 FY20 final dividend proposed record date
30 April 2021 FY20 final dividend proposed payment date
30 June 2021 Start Silent Period ahead of H121 results
23 July 2021 H121 results release (incl. analyst conference call)
17 August 2021 Proposed 2021 interim dividend ex-dividend date
18 August 2021 Proposed 2021 interim dividend record date
20 August 2021 Proposed 2021 interim dividend payment date
Contact Details
Flow Traders N.V.
Jonathan Berger / Investor Relations Officer
Phone: +31 20 7996799
Email: investor.relations@flowtraders.com
About Flow Traders
Flow Traders is a leading global financial technology-enabled liquidity provider in financial products, historically specialized in Exchange Traded Products (ETPs), now expanding into other asset classes. Flow Traders ensures the provision of liquidity to support the uninterrupted functioning of financial markets. This allows investors to continue to buy or sell ETPs or other financial instruments under all market circumstances. We continuously grow our organization, ensuring that our trading desks in Europe, the Americas and Asia can provide liquidity across all major exchanges, globally, 24 hours a day. Founded in 2004, we continue to cultivate the entrepreneurial, innovative and team-oriented culture that has been with us since the beginning.
Important Legal Information
This press release is prepared by Flow Traders N.V. and is for information purposes only. It is not a recommendation to engage in investment activities and you must not rely on the content of this document when making any investment decisions. The information in this document does not constitute legal, tax, or investment advice and is not to be regarded as investor marketing or marketing of any security or financial instrument, or as an offer to buy or sell, or as a solicitation of any offer to buy or sell, securities or financial instruments.
The information and materials contained in this press release are provided ‘as is’ and Flow Traders N.V. or any of its affiliates (“Flow Traders”) do not warrant the accuracy, adequacy or completeness of the information and materials and expressly disclaim liability for any errors or omissions. This press release is not intended to be, and shall not constitute in any way a binding or legal agreement, or impose any legal obligation on Flow Traders. All intellectual property rights, including trademarks, are those of their respective owners. All rights reserved. All proprietary rights and interest in or connected with this publication shall vest in Flow Traders. No part of it may be redistributed or reproduced without the prior written permission of Flow Traders.
This press release may include forward-looking statements, which are based on Flow Traders’ current expectations and projections about future events, and are not guarantees of future performance. Forward looking statements are statements that are not historical facts, including statements about our beliefs and expectations. Words such as “may”, “will”, “would”, “should”, “expect”, “intend”, “estimate”, “anticipate”, “project”, “believe”, “could”, “hope”, “seek”, “plan”, “foresee”, “aim”, “objective”, “potential”, “goal” “strategy”, “target”, “continue” and similar expressions or their negatives are used to identify these forward-looking statements. By their nature, forward-looking statements involve known and unknown risks, uncertainties, assumptions and other factors because they relate to events and depend on circumstances that will occur in the future whether or not outside the control of Flow Traders. Such factors may cause actual results, performance or developments to differ materially from those expressed or implied by such forward-looking statements. Accordingly, no undue reliance should be placed on any forward-looking statements. Forward-looking statements speak only as at the date at which they are made. Flow Traders expressly disclaims any obligation or undertaking to update, review or revise any forward-looking statements contained in this press release to reflect any change in its expectations or any change in events, conditions or circumstances on which such statements are based unless required to do so by applicable law.
Financial objectives are internal objectives of Flow Traders to measure its operational performance and should not be read as indicating that Flow Traders is targeting such metrics for any particular fiscal year. Flow Traders’ ability to achieve these financial objectives is inherently subject to significant business, economic and competitive uncertainties and contingencies, many of which are beyond Flow Traders’ control, and upon assumptions with respect to future business decisions that are subject to change. As a result, Flow Traders’ actual results may vary from these financial objectives, and those variations may be material.
Efficiencies are net, before tax and on a run-rate basis, i.e. taking into account the full-year impact of any measure to be undertaken before the end of the period mentioned. The expected operating efficiencies and cost savings were prepared on the basis of a number of assumptions, projections and estimates, many of which depend on factors that are beyond Flow Traders’ control. These assumptions, projections and estimates are inherently subject to significant uncertainties and actual results may differ, perhaps materially, from those projected. Flow Traders cannot provide any assurance that these assumptions are correct and that these projections and estimates will reflect Flow Traders’ actual results of operations.
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Market Abuse Regulation
This press release contains information within the meaning of Article 7(1) of the EU Market Abuse Regulation and is an announcement pursuant to Article 5 (1) of the EU Market Abuse Regulation.
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