FLOW TRADERS 3Q19 TRADING UPDATE

FLOW TRADERS 3Q19 TRADING UPDATE

Amsterdam, the Netherlands - Flow Traders N.V. (Euronext: FLOW) releases its unaudited 3Q19 trading update. Highlights are:

• Market ETP Value Traded grew 6% quarter-on-quarter and 7% YTD9m19 vs YTD9m18
• Flow Traders ETP Value Traded grew 12% quarter-on-quarter and 21% YTD9m19 vs YTD9m18, significantly outpacing the overall market growth
• Flow Traders recorded NTI of €53.3m in 3Q19 as robust trading performance in EMEA and APAC offset weaker than expected trading in the US
• Fixed operating expenses increased by 4% quarter-on-quarter and by 9% in YTD 9m19 vs YTD 9m18, which also reflects the impact of IFRS 16
• Net Profit for the quarter was €12.9m with EPS of €0.28
• Regulatory Own Funds Requirement (OFR) as at 30 September 2019 was €158m, resulting in an excess capital of €135m
• Focus remains on improving efficiency, enlarging the ETP footprint and trading diversification into other asset classes

       
Financial Overview

€million	3Q19	2Q19	Change	YTD 9m19	YTD 9m18	Change
Net Trading Income	53.3	53.9	(1%)	170.3	309.4	(45%)
EMEA (Europe)	35.2	32.1	10%	104.8	109.4	(4%)
Americas	9.4	15.3	(39%)	41.9	175.5	(76%)
APAC	8.7	6.5	34%	23.6	24.5	(4%)
Net Trading Income	53.3	53.9	(1%)	170.3	309.4	(45%)
Employee expenses (fixed)	11.1	10.6	5%	32.0	26.5	21%
Technology expenses	10.0	9.3	7%	28.8	26.6	8%
Other expenses*	3.9	4.0	(4%)	11.4	13.4	(14%)
Fixed Operating Expenses	25.0	23.9	4%	72.2	66.5	9%
Employee expenses (var)	8.8	9.1	(3%)	30.9	76.8	(60%)
Total Operating Expenses	33.8	33.0	2%	103.1	143.3	(28%)
EBITDA	19.5	20.9	(7%)	67.2	166.1	(60%)
Depreciation/Amortisation*	3.7	3.7		10.9	6.5
Write offs, tangible assets	-	-		0.1	0.1
Results subsidiaries	-	(0.1)		(0.1)	(3.1)
Profit Before Tax	15.8	17.3	(8%)	56.3	162.6	(65%)
Tax	2.9	3.5		10.4	27.5
Net Profit	12.9	13.8	(6%)	45.9	135.1	(66%)
EPS (in €)	0.28	0.30		0.99	2.91
EBITDA margin (%)	37%	39%		39%	54%

* Reflects the impact of IFRS 16

Value Traded Overview

€billion	3Q19	2Q19	Change	YTD 9m19	YTD 9m18	Change
Flow Traders ETP Value Traded	264.1	235.4	12%	758.0	626.6	21%
EMEA (Europe)	132.8	121.0	10%	382.5	350.2	9%
Americas	118.5	105.1	13%	344.7	251.6	37%
APAC ex China	12.8	9.3	37%	30.8	24.8	24%
Flow Traders’ non-ETP Value Traded	817	694	18%	2,249	1,874	20%
Market ETP Value Traded 1	6,174	5,842	6%	18,108	16,959	7%
EMEA (Europe)	394	355	11%	1,104	1,001	10%
Americas	5,284	5,002	6%	15,567	14,329	9%
APAC	496	485	2%	1,437	1,629	(12%)
APAC ex China	217	209	4%	643	707	(9%)

3Q19 Regional Highlights:

EMEA:

• Continued to be the leading liquidity provider in ETPs; on-exchange market share reached new highs
• Well prepared for all Brexit scenarios
• Became a remote member of the Tel Aviv Stock Exchange (TASE) to act as liquidity provider in Israel to support BlackRock’s iShares ETP listings

AMERICAS:

• Overall market trading conditions improved, particularly in domestic US equities in August which has not been a focus of Flow Traders historically
• Continued to grow its position in the region with lower than expected NTI mainly driven by Fixed Income as the business is being repositioned for future growth
• Sustained strong OTC momentum as more ETP flow was traded with additional, newly connected counterparties

APAC:

• Favourable market conditions and focused trading strategies resulted in a strong quarter
• Completed the consolidation of the dealing rooms in APAC and trading has been optimized by moving all trading desks for on-screen liquidity provision to Hong Kong
• Activated a business continuity plan with respect to the political situation in the region, business operations remain unaffected

Management Board Comments

CEO Dennis Dijkstra stated:
“During the third quarter, Flow Traders continued to grow its leading ETP position globally as, once again, we traded more ETPs with more counterparties. New markets were opened as we sought to broaden the ETP ecosystem; our partnership with iShares was a catalyst for providing liquidity in Israel. Diversification initiatives, including FX, OTC trading and Crypto, performed in line with expectations. We also maintained a strong discipline on costs while implementing our strategy and the increase was well within guidance. It is pleasing that Flow Traders continues to attract the brightest talent as we welcomed a large intake of new colleagues on 1 September, mostly comprised of graduates.“

Chief Trading Officer Folkert Joling added:
“3Q19 was a good quarter from a market trading activity perspective. Flow Traders was able to benefit from this increased pace of activity, particularly in APAC, although the increase in market activity in the US was notably visible in domestic equities. Fixed Income trading performance in the US was not as expected, which resulted in a lower NTI contribution from this region. We anticipate improved performance going forward. On the OTC front, momentum remained strong and we expect this to continue with the growing use of RFQ tools. In EMEA, we consolidated our leading position as liquidity provider in ETPs.”

Preliminary Financial Calendar

10 January 2020                 Start Silent Period ahead of FY19 results
07 February 2020               Release FY19 results (incl. analyst conference call)
28 February 2020               Release Annual Report 2019
31 March 2020                   Start Silent Period ahead of 1Q20 trading update
21 April 2020                      Release 1Q20 trading update (no analyst conference call)
24 April 2020                      AGM

Contact Details

Flow Traders N.V.
Jonathan Berger / 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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¹ Source: Flow Traders analysis

Attachment

• Flow Traders 3Q19 Trading Update

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