FLOW TRADERS Q221 RESULTS

FLOW TRADERS Q221 RESULTS

Amsterdam, the Netherlands - Flow Traders N.V. (Euronext: FLOW) announces its unaudited Q221 results and 2021 Half Year report.

Highlights

• Market ETP Value Traded decreased 14% quarter-on-quarter and decreased 14% H121 vs H120
• Flow Traders ETP Value Traded decreased 15% quarter-on-quarter and decreased 6% H121 vs H120
• Flow Traders recorded NTI of €94.4m in Q221 reflecting a more normalised market environment. This compares to NTI of €142.2m in Q121 and €229.9m in Q220. H121 NTI was €236.6m vs €724.8m in H120
• Total operating expenses of €54.1m incurred in Q221 which includes €0.6m of one-off COVID-19 and business continuity plan-related expenses
• 577 FTEs as at 30 June 2021 compared to 566 FTEs as at 31 March 2021
• Q221 EBITDA reached €40.3m with a margin of 43% contributing to H121 EBITDA of €119.6m with a margin of 51%
• Q221 Net Profit amounted to €28.7m with basic EPS of €0.66. H121 Net Profit amounted to €90.2m with basic EPS of €2.05
• IFR/IFD came into force on 26 June 2021 with the initial impact being broadly neutral. Regulatory Own Funds Requirement (OFR) as at 30 June 2021 was €271m with excess capital of €178m. Trading capital stood at €619m at the end of the second quarter
• Completed €20m share buyback announced in April 2021. Announce additional repurchase of shares of up to €20m commencing on 23 July 2021 over a period of 12 months in connection with employee incentive plans
• Interim FY21 dividend set at €1 per share and the ex-dividend date is 17 August 2021

Financial Overview

€million	Q221	Q121	H121	H120
Net trading income	94.4	142.2	236.6	724.8
EMEA (Europe)	61.9	81.4	143.3	414.2
Americas	17.5	38.8	56.3	245.7
APAC	15.0	22.1	37.0	64.9
Net trading income	94.4	142.2	236.6	724.8
Employee expenses*	37.3	47.0	84.2	228.7
Technology expenses	12.3	11.9	24.1	22.9
Other expenses	3.9	3.4	7.4	7.4
One-off expenses	0.6	0.7	1.3	1.5
Total operating expenses	54.1	63.0	117.1	260.5
EBITDA	40.3	79.3	119.6	464.3
Depreciation / amortisation	3.8	3.7	7.5	7.2
Write off of (in) tangible assets	-	-	-	-
Results of equity-accounted investments	-	-	(0.1)	(0.1)
Profit before tax	36.5	75.5	112.1	457.2
Tax	7.9	14.0	21.8	81.9
Net profit	28.7	61.6	90.2	375.3
Basic EPS** (€)	0.66	1.39	2.05	8.25
Fully diluted EPS*** (€)	0.64	1.35	1.99	8.25
EBITDA margin	43%	56%	51%	64%

* Fixed employee expenses were: Q221 - €13.1m; Q121 - €13.0m; H121 - €26.1m; H120 - €22.9m
** Weighted average shares outstanding: Q221 - 43,715,537; Q121 - 44,348,083; H121 - 44,030,063; H120 - 45,492,824. 43,674,035 shares outstanding at 30/06/21
*** Determined by adjusting the basic EPS for the effects of all dilutive share-based payments to employees

Value Traded Overview

€billion	Q221	Q121	Change	H121	H120	Change
Flow Traders ETP Value Traded	353.5	414.4	(15%)	767.9	820.2	(6%)
EMEA (Europe)	167.0	199.4	(16%)	366.3	421.7	(13%)
Americas	166.6	189.6	(12%)	356.2	360.6	(1%)
APAC ex China	19.9	25.5	(22%)	45.4	37.8	20%
Flow Traders’ non-ETP Value Traded	952	915	4%	1,868	2,204	(15%)
Market ETP Value Traded1	8,002	9,313	(14%)	17,316	20,143	(14%)
EMEA (Europe)	471	590	(20%)	1,061	1,159	(8%)
Americas	6,753	7,780	(13%)	14,533	17,314	(16%)
APAC	778	944	(18%)	1,722	1,669	3%
APAC ex China	288	415	(30%)	703	963	(27%)

1. Source - Flow Traders analysis

Regional Highlights

EMEA:

• Maintained position as the leading liquidity provider in ETPs, both on- and off-exchange - #1 position off-exchange in Fixed Income, Equity, Fixed Income and Commodity ETFs
• Robust trading performance in EMEA with contributions from cryptocurrency market making activities
• Successfully completed connectivity migration for FX to further increase counterparty reach
• Following the opening of the London and Milan branch offices, a new office in Paris was opened in May, providing a physical presence in one of EMEA’s key markets and further increasing proximity to institutional counterparties
• Partnered with TP ICAP to be one of the initial liquidity providers on the launch of their innovative wholesale trading platform for cryptocurrency
  
  

AMERICAS:

• Continued to expand Lead Market Maker activity with issuers - worked closely with iShares around the launch of two sustainable ETFs; BlackRock U.S. Carbon Transition Readiness ETF (LCTU) and BlackRock World ex U.S. Carbon Transition Readiness ETF (LCTD)
• Sustained OTC momentum in Q2 as Flow Traders’ Single Dealer Platform (SDP) went live and more flow was traded with additional, newly connected counterparties
• Commenced coverage of Grayscale products in the US and crypto ETPs in Canada as Flow Traders seeks to be the liquidity provider of choice
  
  

APAC:

• Active in equity exposure trading for OTC counterparties in APAC across all major US ETFs 24/5
• Market maker in the newly launched cash-settled Mini USD/CNH (US dollar/Offshore Renminbi) Futures on HKEX
• Finalised preparations for the Qualified Foreign Institutional Investor (QFII) registration in China with the filing submitted in early Q3
  
  

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 23 July 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:
“We once again retained a strong focus on implementing our strategic growth agenda during the second quarterwhich saw further confirmation of our structural growth. ETP assets under management continue to grow apace and surpassed the $7 trillion mark for the first time alongside record ESG and crypto inflows. Accordingly, we continued to enlarge our global ETP footprint by expanding our counterparty base to nearly 2,000 institutions globally as well as aligning with growth areas such as crypto ETPs, ESG switching, accessing the Chinese market and working with an ever-increasing number of issuers in the US as a Lead Market Maker.

“From an operational standpoint, we maintained our strong cost control as well as a conservative capital position, which has meant we are able to pay an interim dividend of €1 per share to shareholders. The new IFR/IFD prudential regime finally came into force on 26 June 2021. The initial impact has been broadly neutral as lower capital requirements have been partially offset by growth business activities which are more capital intensive. We remain in ongoing discussions with the DNB as to the precise implementation of these new requirements. Lastly, we are cautiously monitoring the evolution of the pandemic and our business continuity plan remains active with the health and well-being of colleagues being of the utmost importance.”

Chief Trading Officer Folkert Joling added:
“The second quarter saw more normalised market conditions with lower levels of activity compared to Q1. Nonetheless, we delivered a resilient trading performance in Q2.We remain more convinced than ever of the significant trading opportunities ahead for the business. With this in mind, we were extremely active in enhancing our coverage of fixed income, commodity, crypto and FX markets. This was evidenced by collaborating with TP ICAP on the launch of their cryptocurrency trading platform as well asconnecting to Bloomberg’s FX platform. We expecteven greater contributions going forward from our growth business areas."

Preliminary Financial Calendar

17 August 2021                2021 interim dividend ex-dividend date
18 August 2021                 2021 interim dividend record date
20 August 2021                 2021 interim dividend payment date
30 September 2021        Silent period starts ahead of Q321 trading update
28 October 2021                Q321 trading update (no analyst conference call)

Analyst Conference Call and Webcast

The Q221 results analyst conference call will be held at 10:00 am CEST on Friday 23 July 2021. The presentation will also be accessible via www.flowtraders.com/investors/results-centre, 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.
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. Please visit www.flowtraders.com for more information.

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 and is an announcement pursuant to Article 5 (1) of the EU Market Abuse Regulation.

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• Flow Traders - Q221 Results

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