FLOW TRADERS REPORTS 2Q18 NTI € 53.8M, ON TARGET TO ACHIEVE RECORD YEAR

7/27/2018, 7:30 AM (Source: GlobeNewswire)

FLOW TRADERS REPORTS 2Q18 NTI € 53.8M, ON TARGET TO ACHIEVE RECORD YEAR

Amsterdam, the Netherlands - Flow Traders N.V. (Euronext: FLOW) today released its unaudited 2Q18 results. The highlights for the period are as follows: 

  • NTI reached €53.8m in 2Q18, against € 213.2m in 1Q18 and € 46.7m in 2Q17. 1H18 NTI reached €266.9m and is on track to lead to a record year
  • Fixed costs grew 0.8% Q-o-Q, leading to fixed cost growth in 1H18 of 4.1% Y-o-Y
  • 2Q18 EBITDA margin was 36%, leading to a 1H18 EBITDA margin of 57%
  • Net Profit reached €17.2m in 2Q18, resulting in a 1H18 Net Profit of €126.8m, or a 1H18 EPS of € 2.73
  • Under the CRR (Capital Requirement Regulation), Flow Traders' own funds requirement was €179m as at 30 June 2018, resulting in excess capital of €111m
  • Interim dividend for 2018 is set at € 1.35
  • Flow Traders connected to 5% more trading venues, grew its counterparties base by 10% and its official liquidity providership by 8% to over 6,000 ETPs since end 2017
  • FTEs remained flat Q-o-Q as at the end of 2Q18 at 412, realising an FTE growth of 4.5% since end 2017
  • Flow Traders reiterates its organic long term growth strategy


Overview consolidated quarterly results Flow Traders

€million, unless otherwise stated 2Q18 1Q18 Change YTD 18 YTD 17 Change
             
Net Trading Income 53.8 213.2 (75%) 266.9 95.0 181%
EMEA (Europe) 32.4 49.5 (35%) 81.9 65.7 25%
Americas 14.7 152.7 (90%) 167.4 21.3 684%
APAC (Asia) 6.7 11.0 (40%) 17.7 8.0 122%
EBITDA 19.4 133.9 (86%) 153.3 35.2 335%
EBITDA Margin 36% 63%   57% 37%  
Net Profit 17.2 109.7 (84%) 126.8 26.1 386%
EPS (EUR) 0.37 2.36   2.73 0.56  
             
Flow Traders ETP Value Traded (€bn) 205.0 243.7 (16%) 448.7 359.5 25%
EMEA (Europe) 112.8 142.9 (21%) 255.7 218.6 17%
Americas 83.9 91.8 (9%) 175.7 129.7 36%
APAC (Asia) 8.3 9.0 (8%) 17.4 11.3 54%
             
Flow Traders' non ETP Value Traded (€bn) 621 693 (10%) 1,313 1,142 15%
             
Market ETP Value Traded (€bn) 5,544 6,540 (15%) 12,084 9,956 21%
EMEA (Europe) 338 382 (11%) 720 676 6%
Americas 4,621 5,616 (18%) 10,237 8,392 22%
APAC (Asia) 585 542 8% 1,127 888 27%
APAC (ex China) 206 303 (32%) 509 371 37%



Current Trading and Outlook

After the strong start to the year in the first quarter, market dynamics slowed down in the second quarter of 2018. Value traded in the market decreased Q-o-Q, but showed a Y-o-Y increase. That slow down resulted in market dynamics we've witnessed before: tightening spreads and change in product mix traded. Nevertheless, market value traded continued to stay on the upward trend observed since 3Q17. Growth in assets under management picked up again in 2Q18, reaching new highs at the end of this quarter. Momentum in the ETP market therefore remains healthy.

On the regulatory front, MiFID II has improved transparency as flows have moved onto lit venues from dark pools in EMEA, increasing the addressable market in ETPs.

Flow Traders sees confirmation in the recent results of the strength of its organic growth strategy. The ongoing focus on growth through more venues and with more counterparties in more products, while at the same time diversifying trading into areas like FX, US OTC and Fixed Income have supported the Company's performance in 2018 so far, and are expected to remain supportive in the coming period.

Management Board Statements

Co-CEO Dennis Dijkstra stated:
"The opportunities we identified in the market in recent years started to contribute to our results in 2018. As Flow Traders' value traded grew ahead of the market in the first six months of 2018, we were able to show the impact of our organic growth strategy. Our 1H18 NTI reached €266.9 million, which is unprecedented. By growing the number of venues to 109 and our counterparty base to over 775, while simultaneously keeping our fixed cost growth in control, +4.1% YTD Y-o-Y, and diversifying our trading activities, Flow Traders further built on its foundation for the future. As flagged before, regulatory developments like CRR and MiFID II have not limited Flow Traders in its ability to execute on its organic growth strategy. Based on our results, we are confident that we will continue to further leverage our leading position."

Co-CEO Sjoerd Rietberg added:
"When taking a closer look, Flow Traders showed an increase of its market presence in all regions in 2018 to date. Our NTI grew at a record pace, helped by favourable market dynamics, in particular in 1Q18. When looking at the different regions, Flow Traders continued to be the dominant liquidity provider in ETPs in EMEA in 2Q18. The impact of MiFID II so far seems beneficial. Furthermore, Flow Traders started to provide liquidity in FX in EMEA, which will be rolled out further in the coming period. In APAC, Flow Traders grew its on-screen presence as our organic growth strategy resulted in market share gains. Our OTC engagement in APAC also showed good progress. With the regulated status in Hong Kong and the registration in Tokyo, Flow Traders is all set for further growth in that region in the future. In the US, we maintained good momentum as we grew our on- and off-screen trading activity. Our OTC flows in the US now make up 25% of our value traded in the US. We also started to trade more products in the Americas. Given these developments, Flow Traders remains committed to its current organic growth strategy in near the future."

CFO Marcel Jongmans commented:
"As we stated before, Flow Traders has found the right balance between growing our firm and controlling our cost base. In 2Q18, we continued to execute and control our growth strategy while maintaining a tight grip on our cost growth. This resulted in a record 1H18 performance for Flow Traders. On the regulatory front, Flow Traders continued to comfortably meet the regulatory required capital levels under CRR as at 30 June 2018, resulting in €111m in excess capital after payment of the final dividend for 2017 and the interim dividend provision for 2018. The IFRS treatment of Flow Traders' employee participation plan continued to have an impact on the reported variable cash component in the income statement. Taking all of this into account, based on our strong balance sheet and our high free cash flow generation, we announce an interim dividend for FY18 of €1.35. Looking forward, Flow Traders will continue to focus on optimizing NTI and returns for its shareholders in 2018 and beyond."

Consolidated simplified P&L


Consolidated (in €m)
2Q18 1Q18 Change YTD 18 YTD 17 Change
Net Trading Income 53.8 213.2 (75%) 266.9 95.0 181%
Employee expenses (fixed) 8.9 8.8 - 17.6 15.4 15%
Technology expenses 8.6 8.9 (2%) 17.5 18.8 (7%)
Other expenses 4.4 4.1 7% 8.4 7.7 9%
Fixed Operating Expenses 21.9 21.7 0.8% 43.6 41.9 4.1%
Employee expenses (var) 12.5 57.5 (78%) 70.0 17.9 292%
Total operational expenses 34.4 79.2 (57%) 113.6 59.7 90%
EBITDA 19.4 133.9 (86%) 153.3 35.2 335%
Depreciation/Amortisation 2.1 2.0   4.1 3.4  
Write offs, tangible assets 0.1 -   0.1 -  
Results subsidiaries (3.1) -   (3.1) -  
Profit Before Tax 20.3 131.9 (85%) 152.2 31.8 378%
Tax 3.1 22.2   25.3 5.7  
Net Profit 17.2 109.7 (84%) 126.8 26.1 386%
EPS (in €) 0.37 2.36   2.73 0.56  
EBITDA margins (%) 36% 63%   57% 37%  

Financial Calendar 2018/2019

08 August 2018                   Ex-dividend date interim dividend FY18
09 August 2018                   Record date interim dividend FY18
13 August 2018                   Payment date interim dividend FY18
27 September 2018           Start Silent Period ahead of 3Q18 trading update
18 October 2018                Release 3Q18 trading update (no analyst conference call)

Starting 2018, Flow Traders has moved to interim reporting. This means that Flow Traders will release a trading statement in the first and third quarters of each financial year going forward, unless market developments require otherwise. More elaborate Half Year and Full Year reports will be released, as was done in the past. Flow Traders remains committed to the highest level of disclosure and engagement with its stakeholders.

Analyst conference call and webcast

The analyst conference call on the results will be held at 10:00 am Amsterdam time on Friday 27 July 2018. The presentation will also be accessible via www.flowtraders.com/investors, where the presentation can be downloaded 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 N.V.
Serge Enneman / Investor Relations Officer
Phone:   +31 20 7996799
Email:     investor.relations@flowtraders.com


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.

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.

Market Abuse Regulation

This press release contains information within the meaning of Article 7(1) of the EU Market Abuse Regulation.




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Source: Flow Traders NV via Globenewswire

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