Flow Traders Q1 2024 Trading Update
Flow Traders Q1 2024 Trading
Update
Amsterdam, the Netherlands - Flow Traders Ltd.
(Euronext: FLOW) announces its unaudited Q1 2024 trading
update.
Highlights
- Flow Traders recorded Net Trading
Income of €127.1m and Total Income of €129.6m in Q124, compared to
€72.7m and €74.3m, respectively, in Q423, and €110.5m for both in
Q123.
- Flow Traders’ Value Traded increased
7% in Q124 when compared to last quarter and was flat when compared
to the same period last year.
- Total Operating Expenses were €68.5m
in Q124, compared to €62.5m in Q423 and €70.3m in Q123, with Fixed
Operating Expenses of €43.6m, compared to €40.4m in Q423 and €43.9m
in Q123.
- EBITDA was €61.1m in Q124,
generating an EBITDA margin of 47%, compared to €11.8m and 16% in
Q423 and €40.2m and 36% in Q123.
- Net Profit was €45.9m in Q124,
yielding a basic EPS of €1.06, compared to €6.4m of Net Profit and
€0.15 of basic EPS in Q423 and €27.7m and €0.64 in Q123.
- Trading capital stood at €609m at
the end of Q124 and generated a 52% return on trading capital1 (84%
on an annualized basis), compared to €583m and 51% in Q423 and
€647m and 65% in Q123,.
- Shareholders’ equity was €631m at
the end of Q124, compared to €586m at the end of Q423 and €622m at
the end of Q123.
- Flow Traders employed 633 FTEs at
the end of Q124, compared to 646 at the end of Q423 and 667 at the
end of Q123.
- To reduce complexity in financial
reporting and adhere to accounting best practices, the reporting of
Normalized financials will cease going forward.
- A conference call with the financial
analyst community will be webcasted on Flow Traders’ website today
at 10:00 CEST at
https://www.flowtraders.com/investors/results-centre.
Financial Overview
|
€million |
Q124 |
Q423 |
Change |
Q124 |
Q123 |
Change |
|
Net trading income |
127.1 |
72.7 |
75% |
127.1 |
110.5 |
15% |
|
Other income |
2.5 |
1.6 |
55% |
2.5 |
- |
- |
|
Total income |
129.6 |
74.3 |
74% |
129.6 |
110.5 |
17% |
|
Employee expenses |
44.5 |
39.6 |
12% |
44.5 |
44.9 |
(1%) |
|
Fixed employee expenses |
19.6 |
17.5 |
12% |
19.6 |
20.0 |
(2%) |
|
Variable employee expenses |
24.9 |
22.1 |
13% |
24.9 |
24.9 |
0% |
| Technology
expenses |
15.8 |
15.3 |
3% |
15.8 |
16.6 |
(5%) |
| Other
expenses |
8.2 |
7.6 |
8% |
8.2 |
7.3 |
12% |
|
One-off expenses2 |
- |
- |
- |
- |
1.5 |
(100%) |
|
Total operating expenses |
68.5 |
62.5 |
9% |
68.5 |
70.3 |
(3%) |
|
EBITDA |
61.1 |
11.8 |
418% |
61.1 |
40.2 |
52% |
|
Depreciation / amortisation |
4.3 |
4.2 |
1% |
4.3 |
5.0 |
(14%) |
| Write off of
(in) tangible assets |
- |
- |
- |
- |
- |
- |
| Profit/(loss)
on equity-accounted investments |
(0.4) |
(0.1) |
193% |
(0.4) |
(0.4) |
(12%) |
|
Profit before tax |
56.4 |
7.4 |
660% |
56.4 |
34.7 |
62% |
|
Tax expense |
10.5 |
1.1 |
897% |
10.5 |
7.0 |
50% |
|
Net profit |
45.9 |
6.4 |
621% |
45.9 |
27.7 |
66% |
|
Basic EPS3 (€) |
1.06 |
0.15 |
615% |
1.06 |
0.64 |
64% |
| Fully diluted
EPS4 (€) |
1.04 |
0.14 |
630% |
1.04 |
0.62 |
67% |
| EBITDA
margin |
47% |
16% |
|
47% |
36% |
|
Value Traded Overview
|
€billion |
Q124 |
Q423 |
Change |
Q124 |
Q123 |
Change |
|
Flow Traders Value Traded |
1,555 |
1,450 |
7% |
1,555 |
1,554 |
0% |
|
Equity |
819 |
762 |
8% |
819 |
826 |
(1%) |
|
Fixed income |
270 |
289 |
(7%) |
270 |
348 |
(23%) |
|
Currency, Crypto, Commodity |
422 |
352 |
20% |
422 |
340 |
24% |
|
Other |
44 |
48 |
(7%) |
44 |
40 |
11% |
|
Average VIX |
13.9 |
15.4 |
(10%) |
13.9 |
21.0 |
(34%) |
|
|
|
|
|
|
|
|
Market Environment
- Equity trading
volumes and volatility remained muted in Q1. While volumes improved
slightly compared to last quarter and the same period a year ago,
volatility declined slightly in the period vs. last quarter despite
a slight bounce back from the lows seen in December and remains
significantly below the level seen in the same period a year
ago.
- Fixed income trading
volumes improved both on a quarter-on-quarter and year-on-year
basis. However, volatility levels were down both on a
quarter-on-quarter and year-on-year basis.
- Crypto saw a
significant jump in trading volumes and volatility compared to last
quarter and the same period a year ago given the U.S. spot Bitcoin
ETF approval in January this year.
Share Buyback
€4.3m worth of shares were repurchased in Q124 as part of the
€15m share buyback program announced in October 2022, with €7.6m of
the program remaining. A portion of the shares to be repurchased
under this program could be allocated to employee incentive plans
as needed.
Outlook
Fixed operating expenses guidance for the year remains unchanged
and is expected to be in the same range as FY23 as headcount is
expected to be flat to down for the year, offset by continued
technology investments and inflationary pressures. The firm remains
fully focused on operational and cost efficiencies across the
business while implementing its growth and diversification
strategies and bolstering trading capital.
CEO Statement
Mike Kuehnel, CEO“Flow Traders achieved a
strong result in Q1 on the back of elevated trading activity in the
digital assets space in the quarter, despite the relatively subdued
market trading environment in other asset classes. This quarter
serves as further validation of our growth and diversification
strategy, given our initial investment in the digital assets space
more than seven years ago and our continued investment in the asset
class when others quickly left during the downturn merely a year
ago. Our steadfast belief in the asset class, and the opportunities
it can bring to traditional financial markets is unwavering. We
were well prepared for the highly anticipated regulatory approval
in the U.S. for spot Bitcoin ETFs that came through at the
beginning in the quarter as institutional interest in digital
assets continues to grow around the world.
Coming to the other areas of our trading capabilities, we have
seen a slight increase in activity since the lows seen last
December, although volatility is still down significantly when
compared to a year ago. Regardless of the environment, we have been
enhancing our trading capabilities and counterparty network in
existing areas as well as exploring new potential opportunities. In
terms of our strategic investments, we are well on track with our
Euro-denominated stablecoin joint venture AllUnity with our
partners DWS and Galaxy Digital, and in Q1 announced a strategic
investment in ClearToken, further underpinning our strategy of
investing in connectivity and financial market infrastructure.
Looking at our operations, as we continue to focus on cost and
operational efficiencies while balancing our key growth
initiatives, fixed operating expenses in the quarter came in-line
with our expectations. As we continue to execute our growth and
diversification strategy and invest in trading capabilities in
different asset classes and regions, we believe we can accelerate
the growth of the firm with additional trading capital and will
look to bolster our trading capital.
In addition, we are thrilled to have Owain Lloyd join Flow
Traders on 1 May as Chief Technology Officer. Owain brings with him
over 20 years of senior leadership experience across traditional
finance, market making, and digital assets trading technology and
we look forward to his nomination as an Executive Director of the
Board at our AGM on 13 June.”
Preliminary Financial Calendar
13 June
2024 AGM17
June
2024 FY23
final dividend proposed ex-dividend date18 June
2024 FY23
final dividend proposed record date20 June
2024 FY23
final dividend proposed payment date30 June
2024 Start
of silent period ahead of H124 results25 July
2024 Release
of H123 results
Analyst Conference Call and Webcast
The Q124 trading update analyst conference call will be held at
10:00 am CEST on Thursday 25 April 2024. The presentation can be
downloaded at https://www.flowtraders.com/investors/results-centre
and the conference call can be followed via a listen-only audio
webcast. A replay of the conference call will be available on the
company website for at least 90 days.
Contact Details
Flow Traders Ltd.
InvestorsEric PanPhone:
+31 20
7996180Email: investor.relations@flowtraders.com
MediaLaura PeijsPhone:
+31 20
7996125Email: press@flowtraders.com
About Flow Traders
Flow Traders is a leading trading firm providing liquidity in
multiple asset classes, covering all major exchanges. Founded in
2004, Flow Traders is a leading global ETP market marker and has
leveraged its expertise in trading ETPs to expand into fixed
income, commodities, digital assets and FX. Flow Traders’ role in
financial markets is to ensure the availability of liquidity and
enabling investors to continue to buy or sell financial instruments
under all market circumstances, thereby ensuring markets remain
resilient and continue to function in an orderly manner. In
addition to its trading activities, Flow Traders has established a
strategic investment unit focused on fostering market innovation
and aligned with our mission to bring greater transparency and
efficiency to the financial ecosystem. With nearly two decades of
experience, we have built a team of over 600 talented
professionals, located globally, contributing to the firm's
entrepreneurial culture and delivering the company's mission.
Notes
- Return on trading capital defined as
LTM NTI divided by end of period trading capital.
- One-off expenses related to the
completed corporate holding structure update and balance sheet
review work.
- Weighted average shares outstanding:
Q124 - 43,515,359; Q423 - 43,166,257; Q123 - 43,142,742.
- Determined by adjusting the basic
EPS for the effects of all dilutive share-based payments to
employees.
Important Legal Information
This press release is prepared by Flow Traders Ltd. 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 Ltd. 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.
By accepting this document you agree to the terms set out above.
If you do not agree with the terms set out above please notify
legal.amsterdam@nl.flowtraders.com immediately and delete or
destroy this document.
All results published in this release are unaudited.
Market Abuse Regulation
This press release contains information within the meaning of
Article 7(1) of the EU Market Abuse Regulation.