Warsaw Stock Exchange Group
Investor Presentation
April 2020
I. Executive Summary of GPW Group 3
III. Market highlights and opportunities 13
IV. GPW Group financial results in Q4 2019 38
V. Appendices 48
II. Business activity in Q4 2019 8
Key milestones
3
1817
1991
2010
2014
20172013 2019
The first stockexchange in Warsaw opens
Establishment of the WarsawStock Exchange (GPW)
GPW sharesdebut on the GPW
Announcementof new strategyGPW2020
FTSE Russel decisionabout promotionPoland to Developed Markets
Strategyupdate #GPW2022
Implementationof strategy
2012
GPW acquiresPolish Power Exchange (TGE)
2009
Launch of Catalyst (GPW bond market)
1998
Launch of derivativesmarket
2018
Selling of AquisExchange
2003
The firstforeigncompanylisted
2007
GPW aquiresAquis Exchange
Launch of UTP trading system
Launch of NewConnect(GPW alternativemarket)
The updated development strategy of the GPW Group is based on building shareholder value through the development of existing business lines and new segments at sustained profitability levels combined with risk management discipline. The strategy update focuses on four areas of development of the GPW Group: core business development development through diversification and new business areas development of new technological solutions sustained attractive dividend policy
Launch of X-StreamTrading and SAPRI trade systems
2022
Decisionto buildGPW Trading Platform
2020
AgriculturalCommodity Market
GPW share price
4Source: Bloomberg
30
35
40
45
50
55
2013 2014 2015 2016 2017 2018 2019 2020
PLN (closing price)
0
200000
400000
600000
800000
1000000
2013 2014 2015 2016 2017 2018 2019 2020
Volume
5Source: Bloomberg
0
5
10
15
20
25
EV/EBITDA 2020e
P/E 2020 P/E 2021 EV/EBITDA 2020 EV/EBITDA 2021 Dividend Yield 2020*
Market Cap (USD mn)
Median (24 global peers)
21,21 19,86 14,43 13,74 3,00 -
GPW 12,65 12,52 6,88 7,14 6,84 370,0
Discount (%) -40% -37% -52% -48% - -
(%)
0
1
2
3
4
5
6
7Dividend Yield 2020e (%)*
*Dividend Yield in 2020e from 2019 net profit
The highest dividend yield among global peers
6
7
8
9
10
11
12
13
14
15
16
17
18
2015 2016 2017 2018 2019 2020
GPW (P/E 2020e)
P/E average (5 Years)
+1 Standard Deviation from average
-1 Standard Deviation from average
Źródło: Bloomberg
Present verus historical valuation
II. Business activity in Q4 2019 8
III. Market highlights and opportunities 13
IV. GPW Group financial results in Q4 2019 38
V. Appendices 48
I. Executive summary of GPW Group 3
53,1%
48,0% 47,1%
50,1%
8
Net profit impacted by provision of PLN 15.5 mn
12M’18Q4’19Q4’18 12M’19
88.580.3
346.8336.1
-9.3%
-3.1%
Q4’18 Q4’19 12M’18 12M’18
146.9
37.1
11.2
36.8
183.7
119.3-69.8%
-35.0%
Revenue
Q4’18
47.4
Q4’19 12M’18 12M’19
181.1
42.4
173.8
+11.6%
+4.2%
Opex
Net profitEBITDA
12M’18 12M’19Q4’18 Q4’19
52.7
41.2
202.0
193.2-21.9%
-4.3%
C/IPLN mn
PLN mn
PLN mn
PLN mn
8
Revenue
Revenue decreased by 9.3% YoY in Q4’19.
Annual revenue dropped by 3.1% YoY in
2019.
Operating expenses
Operating expenses up by 11.6% YoY in
Q4’19. Annual increase of 4.2% 2019. An
increase mainly as a result of higher:
external services and total employee costs.
EBITDA
EBITDA decreased by 21.9% YoY to PLN
41.2 m in Q4’19. In 2019 down by 4.2%
YoY to PLN 193.2 mn.
Net profit
Net profit dropped by 35.0% YoY in Q4’19.
Net profit include a one-off setting up
provisions of PLN 15.5 million in respect of a
potential VAT payable in the subsidiary
commodity clearing house IRGiT. GPW
indirectly holds 100% of IRGiT.
Aquis Exchange
Velocity ratio: 31.0% in Q4’19 vs. 33.2% in Q3’19
and 32.9% in Q4’18. Velocity ratio 31.8% in 2019 vs.
32,3% w 2018 r.
WIG20 lost 5.56% in 2019 and WIG gained 0.25% in
2019.
Value of EOB trade in shares: PLN 45.0 bn in Q4’19
(-8.4 Yoy, -8,4% QoQ). vs. Value of EOB trade in
2019 PLN 191.5 bn (-6.3% YoY, PLN 204.3 bn in
2018)
Share of HVP and HVF participants in trade in shares:
10,0% in Q4’19 vs. 10.5% in 2019 and 9.3% in
2018.
9
Investor activity in equity market
Value of EOB trade on the Main Market
Activity of HVP and HVF clients vs. market turnover
58,3 53,3 58,2 53,748,0 53,5 49 51,2 46,3 49,0 45
34,9%
30,6%
33,3%
31,1%30,7%
34,3%
32,9% 32,8%
30,2%
33,2%
31,0%
27,0%
28,0%
29,0%
30,0%
31,0%
32,0%
33,0%
34,0%
35,0%
36,0%
0
10
20
30
40
50
60
70
80
Q2'17 Q3'17 Q4'17 Q1'18 Q2'18 Q3'18 Q4'18 Q1'19 Q2'19 Q3'19 Q4'19
EOB Trading
Turnover velocity (source: FESE)PLN bn
mld zł
7,9% 7,9%7,5%
8,6%9,3%
8,8%
10,3% 10,4% 10,2%
11,5%
10,0%
0%
2%
4%
6%
8%
10%
12%
14%
0
10
20
30
40
50
60
II III IV I II III IV I II III IV
2018 2019
EOB Trading HVP and HVF share
Total volume of trade in derivatives: 1.68
mn contracts in Q4’19 (-24.2% YoY, -15.2%
QoQ)
Total volume of trade in derivatives: 7.0 mn
contracts in 2019 (-14.5% YoY, 8.2 mn in
2018)
Volume of trade in WIG20 futures: 0.93 mn
contracts in Q4’19 (-21.7 % YoY, - 13.3%
QoQ)
Volume of trade in equity futures: 0.43 mn
contracts in 2019 (+24.3% YoY, +12,5%
QoQ).
WIG20 volatility: 15.0% in Q4’19. WIG
volatility: 12.2% in Q4’19
Share of proprietary traders in futures
trade: 9.8% in Q4’19 vs. 9.9% in Q3’19 and
11.0% in Q4’18.
10
Trade in derivatives
mn
Volume of trade in derivatives
Q2’18 Q3’18
2.22
Q4’17 Q1’18 Q4’18 Q2’19
2.08
Q1’19 Q3’19
1.981.73
Q4’19
2.11
1.76 1.711.60 1.68 -15.2%
-24.2%
Quarterly volatility of WIG and WIG20
12,20%
15,00%
0%
5%
10%
15%
20%
25%
30%
Q2'1
1
Q4'1
1
Q2'1
2
Q4'1
2
Q2'1
3
Q4'1
3
Q2'1
4
Q4'1
4
Q2'1
5
Q4'1
5
Q2'1
6
Q4'1
6
Q2'1
7
Q4'1
7
Q2'1
8
Q4'1
8
Q2'1
9
Q4'1
9
WIG volatility WIG20 volatility
11
Volume of spot and forward trade in electricity and gas
Volume of trade in property rights
Q4’18 Q1’19
66.7
Q2’19 Q3’19
67.3
44.3
65.0
52.9
Q4’19
Energy (TWh)
Q1’19Q4’18 Q3’19Q2’19
28.5
46.1
37.339.6
Q4’19
40.7
Gas (TWh)
2.8
Q4’18
7.7
5.0
5.9
Q2’19Q1’19
12.9
8.1
Q3’19
5.6
10.5 10.9
21.0
Q4’19
6.3
Cogeneration (TWh)
Green certificates (TWh)*
78.4
Q1’19 Q3’19Q4’18 Q2’19
63.1
175.6 172.4
Q4’19
81.0
energy efficiency (ktoe)
Trade in electricity, gas and property rights
Electricity market: Total volume of trade in electricity: 66.7 TWh
in Q4’19 (-0.9% YoY, +2.6% QoQ). Volume of spot transactions:
9.0 TWh (+15.3% YoY, +11.8% QoQ). Volume of forward
transactions: 57.7 TWh (-3.0% YoY, +1.3% QoQ). Total volume in
2019: 228.9 TWh (+1.3 YoY) – the highest total volume in history.
Gas market: Total volume of trade on the gas markets: 40.7 TWh
in Q4’19 (-11.9% YoY, +2.6% QoQ). Volume of spot transactions in
gas: 7.7 TWh (+10.3% YoY, +126.3% QoQ). Volume of forward
transactions: 33.0 TWh (-15.8% YoY, -9.1% QoQ). Total volume in
2019: 146.1 TWh (+2.0% Yoy) – the highest total volume in
history.
Property rights market :
No more trade in property rights from cogeneration as of end of
June 2019
Volume of trade in renewable energy source (RES) property
rights: 6.3 TWh in Q4’19 (-18.5% YoY, +12.5% QoQ).
Volume of trade in property rights in energy efficiency: 81.0
ktoe in Q4’19 (+3.3% YoY, -53.0% QoQ).
CO2 emission allowances: On 18 July 2019, TGE reopened the
Financial Instruments Market which lists CO2 emission allowances;
under MiFID2, allowances are a financial instrument. No trades in
2019.
White certificates: The support scheme for energy efficiency
certificates was extended on 29 June 2019 to the end of June 2021.
Cogeneration in the Register of Guarantees of Origin: On 2
October 2019, TGE introduced guarantees of origin of electricity
from high-efficiency cogeneration to trading in the Register of
Guarantees of Origin.*Trade in property rights from cogeneration expired at the end of June 2019
II. Business activity in Q4 2019 8
IV. GPW Group financial results in Q4 2019 38
III. Market highlights and opportunities 13
V. Appendices 48
I. Executive summary of GPW Group 3
Our market highlights and opportunities
13
Solid financial performance and attractive dividend
Diversified revenue structure
The largest CEE economy and growth leader in EU
Large and still growing client base
Potential for further growth in free float and liquidity in financial segment
Employee Capital Plans (ECP)
Dynamic commodity segment
Strategy update #GPW2022 (strategic initiatives)
Promotion to Developed Market status (FTSE Russell and STOXX)
1
2
3
4
5
6
7
8
9
14
… and high operating leverage
Sound financial performance
Solid top-line growth …
… underpinned by increasing diversification … and consistent profitability
CAGR
2010 2015 20182014
225.6
2009 20132011 2012
273.8
2016 2017
283.8
199.5
268.8
317.6 327.9 310.9352.0 346.8
2019
336.1
+5.4%
Total revenue, PLN mn
94.0
47.1%
20122009
48.1%55.5%
161.1
2011
51.8% 50.7%51.1%
2013
54.4%
2014
54.9%
20152010 2016
202.0
61.1%
2017
58.2%
2018 2019
108.4
149.3 142.0 144.9
183.7212.2
193.2
57.5%
180.2
EBITDA, PLN mn EBITDA margin, %
19.6%
13.6%
2010
13.9%
2011
119.3
2009 2014
18.1%
25.6%
2012
18.9%
2013
17.3%
20162015
16.1%
20.7%
2017
21.7%
20192018
100.7 94.8
131.1134.1
105.9 112.8 107.5121.5
158.7183.7
16.1%
Net profit, PLN mn ROE, %
1
70,4%
11,1%
16,5%
1,9%
26,0%
3,2%3,0%
2,8%5,8%
14,3%
44,6%
0,3%
Information services
Listing
Trading - other
Trading - fixed income
Trading - derivatives
Trading - shares
Financial Market:
including Market Data from FM (14.3%)
4,9%3,6%
10,2%
3,7%
8,3%
13,8%
0,2%
Commodity Market:Market Data
Other
Listing
Trading: Financial Market 98.1% 55.1%
0% 44.6%
2008 2019
Other 0,3%
15
Ambitious financial targets
GPW Group financial targets for 2022
1
• PLN 470 mn in 2022Revenue
• PLN 250 mn in 2022EBITDA
• ROE: 19% in 2022 (it may temporarily fall below 19% due to strategyimplementation expenditures)
ROE
• C/I under 50% after 2022 (it may temporarily range from 63% to 55% due tostrategy implementation expenditures)Cost/Income
• dividend payout rate not lower than 60% of consolidated net profit
• dividend not lower than PLN 2.4 per share from 2019 profit
• annual increase in the dividend from the 2020-2022 profits by at least PLN 0.1 per share
Dividend
DIVIDEND POLICY:
dividend payout rate not lower than 60% of consolidated net profit of GPW Group for the financial year attributable to GPW
shareholders, adjusted for the share of profit of associates
dividend at least PLN 2.4 per share from 2019 profit
annual increase in the dividend from the 2020-2022 profits by at least PLN 0.1 per share
Attractive dividend policy
16
89.9%
2010
1.40
3.20
1.20
31.0%
142.3%
70.7%
2.36
2011
45.2%3.18
0.80
2012
44.5%
2013
2.40
2014
80.1%
2.20
2015
2.15
2016
63.3%
2017
77.1%
2018
2.40
93.2%
2019
Dividend yield3
1 By financial year for which dividend was paid2 Based on the consolidated profit attributable to the shareholders of the parent entity and adjusted for the share of profit of associates3 Based on the share price as at the dividend record date
1
4.4%3.8% 2.0% 3.2% 4.9% 6.7%6.1% 5.8% 7.4% -
Dividend payout ratio (%)Dividend per share (PLN)1 2
Management Board recommendation
3
Settlement
Custody
Clearing
COR1
RGO2
Share in total revenue 4, LTM 5
Equities & other
Derivatives Bonds Commodities
Trading
Listing
Equities
Bonds
ETFs
Warrants
Structuredproducts
Financial market Commodity market
Real-timedata
Non-displaydata
Delayeddata
Historicaldata
Indices
Post-tradingincluding COR1 and
RGO2
Electricity spotand forward contracts
Natural gas spotand forward contracts
Property rights in certificates of origin
CO2 emission allowances
Corporatebonds
Municipalbonds
Bank bonds
T-bills
T-bonds
Futures:
- index
- single stock
- fx
- interest rate
Options
- index
Equities
Structuredproducts
Warrants
ETFs
Investmentcertificates
Membership
Access and useof GPW trading system
Membership and participation on the commoditymarkets
Market data
Diversified revenue structure
1 Certificate of Origin Register 2 Register of Guarantees of Origin 3 Associate company (33.33%); KDPW Group offers post-trading services on the financial market 4 Does not include other revenues, which constitute 0.3% of GPW Group revenues 5 Last twelve months ending on 31 December 20196 Does not include the KDPW revenues (associate company; equity method is applied)
17
FM: 2.6%CM: 3.7%
GPW Group
2
5,8% 26,2% 18,6% 22,0%6,3% 3,2% 3,0% 14,5%6
And 7th largest economy in the EULargest economy in CEE region…
Largest economy in the CEE region…
18Source: Eurostat
3
48
61
94
156
220
223
398
527
Slovenia
Bulgaria
Slovakia
Hungary
Czech Rep.
Romania
Austria
Poland
Nominal GDP in 2019 (EUR bn)
527
812
1245
1787
2418
2523
3435
Poland
Holand
Spain
Italy
France
UK
Germany
Nominal GDP in 2019 (EUR bn)
38,4
10,6
19,6
9,8
5,4
8,9
7,1
Population (mn)
19
…and a growth leader in the EU
Poland's GDP will fall by 2.6% in 2020 and
increase by 3.2% in 2021 - according to the NBP
Macroeconomic Survey made in April.
According to the central inflation projection path of
the NBP, the average annual consumer CPI inflation
will be + 3.7% in 2020 (in 2019, the average
annual inflation amounted to 2.3%
Poland’s macro readings1
Bloomberg GDP forecast for 2020-20222
1 Central Statistical Office of Poland2 Bloomberg3 Central Statistical Office of Poland
-19.7%
-23%
GDP growth in 20193
A2outlook stable
A-outlook stable
A-outlook stable
3
+4.1%
1,82,4
2,02,6
2,01,5
3,33,33,8
3,1
4,9 5,1
4,13,3
2,7
-4
-3
-2
-1
0
1
2
3
4
5
6
2013 2014 2015 2016 2017 2018 2019 2020 2021 2022
0,3
1,4
-3,9
-1,4
1,8
European Union (YoY%) Poland (YoY%)
Most of Poles’ savings are located in bank deposits: in view of record-low interest rates, a growth potential for direct
and indirect investments on the GPW exists
Stocks represent only 4.0% of Poles’ savings; however, individual investors are very active on the GPW (turnover
share at 1% in 2019; individual investor portfolio turnover ratio at 44% in H1 2019)
GPW initiatives: education, joint initiatives with market participants, promotion of direct and indirect investment on
the Exchange, including pension savings
New flows to be injected into the Polish capital market by Employee Capital Plans (PPK) –> more in slides 28-32
Poles’ savings (%)1 Household assets 1 (PLN bn)
11%59%
Deposits and cash Other
2
4
Potential for retail investment growth
20
15%
63%
4%
5%
10%
Cash
1%
Debt securities
2%
Deposit
LoansShares
Insurance
Investment Funds
2006
233
310
2005
1 193
382
2003 2004 2007
218
999
2008
519
20172009 2010 2011
1 270
2012 2013 2014 2015
1 317
780
107
2016
688
2018
1 346
Q3’19
369432
528607 614
1 042
752
225187
792
261
850
154
919
263
737
265120
278
342
211
426
207
585625
249
670
262 262
477
899
334
936
316
1 030
328
989
293
1 Net of pension entitlements (pension funds and Social Insurance Institution sub-accounts), non-listed shares, other equity interest2 Short and long-term debt securities, short and long-term loans3 Listed shares, insurance, investment funds, short and long-term debt securities, short and long-term loansSource: National Bank of Poland (NBP); data as of the end of June 2019, latest data available
4
3
Investment funds in Poland2Open Pension Funds1
Largest institutional investor pool in the CEE region
Open Pension Fund (OFE) net assets value amounts to PLN 154,816 bn as of December 2019
Investment funds enjoy strong confidence of retail investors who increasingly seek more sophisticated savings and investment products
As a long-term investor, pension funds freeze a large part of the free float on GPW
Part of the free float in pension fund portfolios could be released through securities lending -> necessary regulatory change
OPF’s share in GPW turnover
OPF’s share in GPW free float Non-public funds, assets PLN bn
Capital Market funds, assets PLN bn
Strong domestic institutional investor base
21
12.0
43.1
13.4
36.1
2011 Q4’19
11.8
38.8
43.043.0
20132012 Q2’19
11.2
41.8
2014
9.8
42.4
2015
8.4
2016
8.4
2017
7.6
41.5
2018
7.3
41.0
Q1’19
6.3
40.8
6.8
42.3
Q3’19
6.4
43.1
1PFSA, NBP, GPW
4
27 3862 68
89 93 9388
147
108
2011
175
2015
147
141
2012
127
2014
111105
2016
171
108
2013
167
2018 2019
146
189
1Q’20
209
114
146
252 259279
257268
239
2017
2According to the classification of funds created by IZFiA (The Chamber of Fund and Asset Management), the non-public funds sector includesthose whose assets are not investedin capital markets. Non-public funds include: securitization, real estate and non-public assets.
Focused efforts, in co-operation with issuers, to spark interest in GPW-listed companies among foreign investors
Close co-operation with investment banks
Value of GPW listed shares held by foreigninvestors accounted for 38.7%1 of the market capitalization of domestic shares listed on the GPW
22
Share of investors in trade on the futures market (%)
Strong and growing foreign investor base
Share of investors in trade in shares on the Main Market (%)
Portfolio turnover ratio of selected investors on the GPW2
1 Data as of the end of Q1 2019, latest available data2 GPW estimates; portfolio turnover ratio: value of the electronic order book (buy
and sell trades)/2/average portfolio value; data as of the end of H1 2019
Source: PFSA, NBP, GPW
4
Domestic investors Foreign Investors
Year Pension Funds Investment FundsIndividual Investors
2008 28% 71% 62% 42%
2009 26% 92% 134% 50%
2010 21% 73% 89% 53%
2011 19% 80% 100% 57%
2012 13% 69% 89% 44%
2013 14% 75% 83% 48%
2014 9% 60% 62% 41%
2015 9% 59% 59% 43%
2016 7% 60% 59% 44%
2017 7% 53% 70% 50%
2018 5% 61% 50% 57%
H12019 4% 51% 44% 43%
47 49 51 53 53 59 63
15 13 12 13 1612
12
38 38 37 34 31 29 25
201920162013 201820172014 2015
institutional individual foreign
17 18 15 18 19 17 18
50 46 47 46 51 48 47
33 37 38 36 30 35 35
20172014 20182013 2015 2016 2019
institutional foreignindividual
Information products represent an attractive opportunity for GPW to enhance revenues by leveraging its central role in the Polish capital market infrastructure
Strong reach via number of distributors and subscribers
Stable development of information services
23
285,0
327,3
288,1
261,9
240,3
221,1 225,0
247,6 247,9260,0
52 57 58 58 58 5451
52
78 83
2943
5365
94
2010 2011 2012 2013 2014 2015 2016 2017 2018 2019
Number of subscribers (LHS)
Number of distributors (RHS)
Customers non-display
4
New clients of GPW and WIBOR data in different market segments attracted in 2019
European markets equitisation and trading velocity*Turnover velocity and volatility
Material upside potential of free float
Equity market: potential for further freefloat and liquidity growth
24Source: GPW
5
20152009
270.3282.8
39% 47%
2013
165.3
48% 48%
2014
49%
2016
49%
2017
52%
2018
329.9
50%
2019
279.3
246.3
299.9276.0
Free float value, PLN bn Free float, %
* Source: Turnover, Mkt Cap - Thomson Reuters, GDP - Eurostat (except of TR, UA, IL, RU - IMF).
0,0
5,0
10,0
15,0
20,0
25,0
30,0
35,0
40,0
45,0
sty
-18
lut-
18
mar-
18
kw
i-18
maj-
18
cze-1
8
lip-1
8
sie
-18
wrz
-18
paź-1
8
lis-1
8
gru
-18
sty
-19
lut-
19
mar-
19
kw
i-19
maj-
19
cze-1
9
lip-1
9
sie
-19
wrz
-19
paź-1
9
lis-1
9
gru
-19
Velocity ratio WIG20 volatility
Main Market401 domestic companies48 foreign issuers
NewConnect369 domestic companies6 foreign issuers
Catalyst145 issuers (incl. State) 512 listed non-TreasuryIssues
Market cap:PLN 550 bnPLN 554 bn
Market cap:PLN 9,7 bn
Value of non-Treasury issues: PLN 92,1 bn
Flow of new companies to the marketIssuer activity on GPW markets1
Acquisition of issuers
On the radar: family companies, PE funds, CEE companies, state-owned companies and theirsubsidiaries
Intensive activities aimed at promoting the stock market as a place to raise capital for development
Individual meetings with companies previously inactive on the GPW markets
GPW Growth
25
Diversified issuers portfolio
Launch of a comprehensive educational program GPW
Growth oriented to support the development of small
and medium enterprises
Supporting non-public companies in building their value
through expansion using external sources of financing,
in particular with a strong accent of development
through the capital market
84 107185
351429 445 431 418 406 408 387 375
374 379
400
426
438 450 471 487 487 482 465 449
2010 2012 201720092008 2011 2013 20152014 2016 2018 2019
CAGR 5.5%
NewConnectMain MarketEquity market
Debt market
Equity market for SME
1 As of the end of 2019; Source: GPW
5
26
Strong position of NewConnect on the European SME scene
IPO’s on european SME Markets in 2019 2
Number of IPOs on NewConnect Market
5
1 Source: GPW at the end of December 20192 Source: PwC IPO Watch Europe 2019
New Connect is an offer for small and growing
companies, especially in the high-tech sector (but
companies from other sectors may naturally be
eligible for trading).
NewConnect has been operating since 2007 and
capitalization of the market has reached PLN 9,7 bn1
Since the begining of NewConnect over 6001 new
companies have joined the platform
NewConnect is the way of developing and moving to
the Main Market - 15% of companies have already
moved to the Main Market
NewConnect is dominated by domestic individual
investors – in H1 2019 the group has generated 86%
of turnover
Since the begining of NewConnect the value of IPOs
and SPOs amounted to around PLN 5.0 bln
In July 2019, NewConnect has been approved by
Polish FSA (KNF) to get the status of SME Growth
Market, and thus joined the group of only a few
markets with this status, i.e. London Stock Exchange
AIM or AIM Italia.
19
1615
10
3
1
LSE (AIM)Borsa Italiana - AIM
0
Nasdaq Nordiq (First North)
NewConnect Euronext (Alternext)
BME Alternative
Deutsche Borse -Scale
IPO’s in 2019
22
19
16
19
15 15
20152014 2016 2017 20192018
IPO’s 2014-2019
Segmentation of the corporate debt market architecture
Active role of the Exchange in attracting new issuers
Single banking licence: an opportunity to grow bank activity as debt market participants
Number of non-Treasury issues on Catalyst Total debt securities by residence of issuer as % of GDP1
Opportunities for further debt market development
27
3597
208
325
408
487 496 525566
527 512
20142010 2013 201720122009 2011 20162015 2018 2019
30.8%
1 Source: BIS (non-Treasury bonds as at the end of June 2019), IMF (GDP in 2019, World Economic Outlook Database)
5
Employee Capital Plans (ECP)
28
6
max
min
ZUS (socialsecurity) OFE (OPF -
Open PensionFunds)
EmployeeCapital Plans(PPK)
EmployeePensionPlans(PPE)
IKE IKZE
2nd pillar (obligatory since 2013 r., now optional)
3rd pilllar (voluntary)1st pillar (obligatory)
public funds private funds
Employee Capital Plans (ECP)/Pracownicze Plany Kapitałowe (PPK) are a new system of private long-term pension savings, mandatory for employers but optional for employees, based on contributions of employees, employers and the public budget.
PPK scheme are very similar to UK Workplace Pension System PPK’s impact on GPW:
Increase of market turnover and increase of the velocity rate Attracting new issuers: growing number of IPOs A stronger market in equities, corporate bonds, treasury bonds, real estate investment funds Improved trust in and promotion of the capital market
29
Equities/debt share in total assets
Employee Capital Plans (ECP)
ECP intruduction schedule
Source: Ministry of Finance of Poland
6
StageSize od company (number of
employese)
number of potential
participants (mn)Start
I >250 3.3 01.07.2019
II 50-249 2 01.01.2020*
III 20-49 1.1 01.07.2020
IV others 5.1 01.01.2021
Total 11.5
Basic contributionVoluntary
contributionMax contribution
Employeecontribution
2% of gross wageup to 2,0% gross
wage4% gross wage
Employercontribution
1,5% of grosswage
up to 2,5% grosswage
4% gross wage
Maximum total contribution 8% gross wage
Contriubution paid by publicbudget:
welcome payment – PLN 250
annual payment – PLN 240
* Stage II is delayed; will be implemented simultaneously with Stage IIISource: Ministry of Finance of Poland
The ECP bill assumes three sources of contribution
Time left to the defineddate (reaching 60 years
old)Equities Debt
>20 years 60-80% 20-40%
11-20 years 40-70% 30-60%
6-10 years 25-50% 50-75%
1-5 years 10-30% 70-90%
After reaching the defined date (60 years)
<15% >85%
Source: Ministry of Finance of Poland
40%
20%
10%
20%
WIG20
mWIG40
other local equities
foreign equities
min
max
Source: Ministry of Finance of Poland
Equity portfolio structure
max
min
I
II
III
30
Employee Capital Plans (ECP) – base scenario
Source: GPW estimates
6
max
min
Estimated yearly inflows into ECPs (PLN bn)
Estimated AUM of ECP funds (PLN bn)
„Base scenario” assumptions: participation rate 50% average portfolio structure:
30% - equities PL 10% - foreign equities 50% - debt PL 10% - foreign debt
weight of rates: 0% - highest contribution rate 8% 100% - lowest contribution rate 3.5%
0,2
0,9 1,3 1,3 1,3 1,3 1,4 1,4 1,4 1,4 1,5 1,5
1,14,5
6,3 6,4 6,5 6,6 6,8 6,9 7,0 7,1 7,3 7,40,20,9
1,3 1,3 1,3 1,3 1,4 1,4 1,4 1,4 1,5 1,5
0,6
2,7
3,8 3,8 3,9 4,0 4,1 4,1 4,2 4,3 4,4 4,4
2,2
2025
14,3
2019 2020 2021
14,0
2022 2023 2024
12,812,6
2026 2027 2028 2029 2030
8,9
13,0 13,3 13,5 13,814,5 14,8
foreign debtequities PL foreign equities debt PL
1,1 2,4 8,2 9,9 11,6 13,4 15,3 17,311,718,2
24,931,8
39,046,3
53,961,8
69,878,2
2,43,9
7,39,2
11,3
13,6
16,2
18,9
21,8
3,3 7,2
11,5
16,1
21,0
26,3
32,1
38,2
44,8
51,9
59,4
0,6
0,2
117,4
37,3
20242022
0,2
2019
5,5
176,7
2020
3,7
2021
5,5
2030
5,1
2023
6,6
99,6
20292025
51,6
2026
1,1
2027 2028
2,2
23,8
11,0
82,7
136,2
156,0
1,1
66,7
foreign equitiesequities PL foreign debtdebt PL
31
Employee Capital Plans (ECP) – pesimisticscenario
Source: GPW estimates
6
max
min
Estimated yearly inflows into ECPs (PLN bn)
Estimated AUM of ECP funds (PLN bn)
„Pesimistic scenario” assumptions: participation rate 25% average portfolio structure:
30% - equities PL 10% - foreign equities 50% - debt PL 10% - foreign debt
weight of rates: 0% - highest contribution rate 8% 100% - lowest contribution rate 3.5%
0,1
0,4 0,6 0,6 0,7 0,7 0,7 0,7 0,7 0,7 0,7 0,7
0,52,2
3,1 3,2 3,3 3,3 3,4 3,4 3,5 3,6 3,6 3,70,10,4
0,6 0,6 0,7 0,7 0,7 0,7 0,7 0,7 0,7 0,7
0,3
1,3
1,9 1,9 2,0 2,0 2,0 2,1 2,1 2,1 2,2 2,2
2022 2024 20252019 20282020 2029
7,0
2021 20262023 2027 2030
1,0
4,5
6,3 6,4 6,5 6,6 6,8 6,97,1 7,3 7,4
foreign debtequities PL foreign equities debt PL
0,5 4,1 4,9 5,8 6,7 7,7 8,75,89,1
12,415,9
19,423,1
26,930,9
34,939,0
0,5
3,64,6
5,7
6,8
8,1
9,4
10,9
3,6
5,7
8,0
10,5
13,1
16,0
19,1
22,4
25,9
29,7
2021
0,3
0,1
2023 2026
0,10,5
2019
1,62,7
2020
1,2
2029
1,2
2024
1,9
2022
1,9
41,3
2,7
2,6
2030
3,3
2025 2027
1,0
2028
11,8
18,6
25,7
33,3
5,4
58,6
68,0
77,9
88,3
49,7
equities PL foreign equities debt PL foreign debt
32
Employee Capital Plans (ECP) – optimisticscenario
Source: GPW estimates
6
max
min
„Optymistic scenario” assumptions: participation rate 75% average portfolio structure:
30% - equities PL 10% - foreign stocks 50% - debt PL 10% - foreign debt
weight of rates: 25% - highest contribution rate 8% 75% - lowest contribution rate 3.5%
Estimated yearly inflows into ECPs (PLN bn)
Estimated AUM of ECP funds (PLN bn)
0,4
1,7 2,4 2,5 2,5 2,6 2,6 2,7 2,7 2,8 2,8 2,9
1,98,5
0,41,7
2,4 2,5 2,5 2,6 2,6 2,7 2,7 2,8 2,8 2,9
1,2
5,1
7,3 7,4 7,6 7,7 7,8 8,0 8,1 8,3 8,5 8,6
13,3
2023 20242019 2020
12,2
28,2
2021 2027
12,4
2022
12,6 12,8
2025
13,1
16,9
2026
24,4
13,6 13,8
2028
14,1
27,126,6
2029
14,4
25,7
2030
3,9
24,7 25,226,1
27,728,7
equities PL foreign equities debt PL foreign debt
2,1 4,5 15,8 19,0 22,4 25,9 29,6 33,522,434,9
47,961,2
75,089,3
104,0119,2
134,9151,0
2,1 4,77,5
14,017,7
21,8
26,3
31,1
36,4
42,1
6,213,8
22,0
30,8
40,4
50,7
61,8
73,7
86,5
100,1
114,7
1,2
226,4
0,4
1,9
341,3
192,0
12,89,90,4 10,3
20212020
3,9
301,0
2019 2027
7,1
2022
10,6
20,6
2023 2024
71,5
2025 2026 2028 20302029
99,2
128,4
159,3
262,7
45,4
foreign debtequities PL foreign equities debt PL
Lunch of Agricultural Market– pilot wheat trading from March to August 2020.
Maker-Taker: On 1 January 2019, TGE opened a Maker-Taker pilot liquidity support programme to minimise operating expenses of market participants by narrowing the spread between bids and asks. After six months, TGE reviewed the programme performance and decided to continue the programme from 1 August to 31 December 2019.
CO2 emission allowances: On 18 July 2019, TGE reopened the Financial Instruments Market which lists CO2 emission allowances; under MiFID2, allowances are a financial instrument.
White certificates: The Act amending the Excise Tax Act and certain other Acts of 29 June 2019 extended the support scheme for energy efficiencycertificates to the end of June 2021.
Organised Trading Facility (OTF) - transformation of TGE’s forward commodity market into an organised trading facility (OTF) under MiFID II
Energy market – obligation to sell a proportion of Energy on the exchange – increased from 30% to 100%.
Commodity market growth drivers
Natural gas trading (spot+forward)TGE electricity trade volumes (spot+forward)
TWh
Commodity market
33
10,1 9,1
87,9
130,8 139,4
176,6186,8 186,7
126,7111,7
226,1 228,9
2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019
0,0 1,1 2,4
111,6 106,9114,5
138,7 143,3 146,1
2011 2012 2013 2014 2015 2016 2017 2018 2019
7
TWh
Commodities trading in Europe – TGE’s fullproduct offer
34
34
Exchangeelectricity
spotelectricity
futures/forwardnatural gas
spotnatural gas
futures/forward
EEX NO YES NO NO
Epex Spot YES NO NO NO
Powernext/Pegas NO NO YES YES
Nord Pool YES NO NO NO
Nasdaq Commodities NO YES NO NO
HUPX YES NO NO NO
HUDEX NO YES NO YES
TGE YES YES YES YES
Natural gas and electricity trading in Europe is usually concentrated on one-commodity dedicated exchanges.
Nonetheless there are some essential cases of many companies leading one-commodity trading being part of one capital group – e.g. EEX, Epex Spot and Powernext/Pegas from the list above are members of EEX Group.
7
Strategy update #GPW2022 (strategicinitiatives)
Stock MarketDebt Market
Commodity MarketInformation offer for
investors and issuers
New business linesDerivatives MarketStock market Debt marketCommodity
marketInformation
productsDerivatives
market
Primary MarketDevelopment
SecuritiesLendingSystem
- GPW - TGE - BondSpot PRA
Derivatives Development
Organised Trading Facility (OTF)
Waste and Secondary Raw Materials Trading Platform
GPW DataGPW Private Market
GPW TCA TOOL
BondSpot Development
Polish Rating Agency
35
AgriculturalCommodityMarket
GPW Ventures
GPW Group
8
GPW Tech
Trading Platform
Aids classification of Poland amongst the 25 Developed Markets…
Poland’s Promotion to Developed Markets: Success of Poland’s Economy and Capital Market
Well-developed and stable market infrastructure
Broad selection of listed stocks and high liquidity
Wide and unlimited access to professional market intermediaries
Independent supervision over the market and high standards of corporate
governance
Efficient and secure trading and post-trading services
Little limitations on investing by foreign investors
Extensive, legally regulated added value services including short selling
and omnibus securities accounts
Highly appreciated Polish capital market…
Ceremony at London Stock Exchange FTSE Developed Markets ranking in numbers1
developed markets
emerging, frontier, other markets
0.12%Poland’s share in FTSE Developed All Cap Index as of September ’19
1.33%Poland’s previous share in FTSE Emerging All Cap Index
September 2018 Poland’s reclassification
1 Source: FTSE Russell36
9
II. Business activity in Q4 2019 8
IV. GPW Group financial results in Q4 2019 38
III. Market highlights and opportunities 13
V. Appendices 48
I. Executive summary of GPW Group 3
49.8%42.0%
29.1%
47.7%
14.0%
38
Lower financial results in a difficult market environment
Net profit and net profit margin
Q4’18 Q1’19 Q2’19 Q3’19
37.1
24.5
Q4’19
42.6 41.1
11.2
-69.8%
PLN mn
PLN mn
Consolidated revenue: PLN 80.3 mn in Q4’19 (-9.3% YoY) due to lower revenue from the financial
market (-9.3% YoY) and the commodity market (-10.1% YoY).
GPW Group’s EBITDA: PLN 41.2 mn in Q4’19 (-21.9% YoY).
GPW Group’s net profit: PLN 11.2 mn in Q4’19 (-69.8% YoY). YoY decrease mainly driven by
provisions of PLN 15.5 million in respect of a potential VAT payable in the subsidiary commodity
clearing house IRGiT.
Revenue
Q4’18 Q2’19Q1’19 Q3’19
88.584.2
89.182.5
Q4’19
80.3
-9.3%59.6%
45.8%64.6%
51.3%67.8%
EBITDA and EBITDA margin
Q1’19Q4’18
57.6
Q2’19 Q3’19
52.7
38.6
55.9
Q4’19
41.2
-21.9%PLN mn
39
Trading revenue on the financial market
Trading revenue – financial market
Investor activity on GPW markets
Trading revenue on the financial market: PLN 27.1 mn
in Q4’19 (-11.4% YoY, -9.3% QoQ).
Average EOB turnover in shares per session: PLN
756.8 mn in Q4’19 (-8.5% YoY)
Average fee on the stock market: 2.20 bps in Q4’19 vs.
2.24 bps in Q4’18. Historical the quarterly break: 2.22
bps in Q1’19, 2.19 bps in Q2’19 and 2,16 bps in Q3’19.
In 2019 average fee at 2,19 bps. vs. 2,21 bps in 2018
vs. 2.18 bps in 2017.
PLN mn
1
1 Other cash market instruments, other fees paid by market participants
2.6
Q2’19
20.9
2.6
2.6
Other
2.4
22.0
2.9
Q4’19
2.5
30.6
Shares
Q3’19
2.4
1.5
Derivatives
32.0
28.4
29.9
2.52.6
Q1’19
27.1
2.7
22.5
2.7
Fixed income
3.2
20.4
2.8
2.1
Q4’18
24.1 -9.3%
-11.4%
Q4’19: 33,8%
1
Q4'18 Q1’19 Q2’19 Q3’19 Q4’19
Shares – value of trade (EOB, PLN bn)
49.0 51.2 46.3 49.0 44.9
-8.4% YoY
-8.4% QoQ
Futures and options – volume of trade (mn contracts)
2.2 1.7 1.6 2.0 1.7
-23.8% YoY
-14.7% QoQ
Treasury bonds – TBSP, cash transactions (PLN bn)
46.6 36.4 17.8 21.1 10.6
-77.3% YoY
-50.0% QoQ
Treasury bonds – TBSP, conditional transactions (PLN bn)
75.4 57.9 70.5 35.3 32.9
-56.4% YoY-6.7% QoQ
40
Listing revenue on the financial market
Listing revenue
Issuer activity
PLN mn
Q4’19: 5,3% One debut on the Main Market (Selvita split by
separation: Selvita + Ryvu Therapeutics) in Q4’19.
Three debuts on NewConnect in Q4’19.
Seven debuts on the Main Market in 2019 (including
five transfers from NC). Fifteen debuts on the
NewConnect in 2019.
Total listing revenue: PLN 4.3 mn in Q4’19 vs.
PLN 5.7 mn in Q4’18.
Free float on the Main Market: 50.0% at the end of
Q4’19 vs. 52.0% at he end of Q4’18.
Q4’18 Q1’19 Q2’19 Q3’19 Q4’19
Number of new listings on the Main Market
0 2 2 2 1
Capitalisation of domestic companies (PLN bn)
578.9 597.7 594.4 551.1 550.2
-5.0% YoY
-0.2% QoQ
Value of IPOs (PLN mn)
0 10 40 5 9
0.8 0.7
4.8
Q4’18
0.0
4.6
5.0
Q1’19
4.3
0.7
Q2’19
4.2
0.8
Q3’19
Listing
Introduction
5.75.3
5.1
Q4’19
4.3
4.3
-14.4%
-24.4%
1 The Group reported a decrease in revenue from listing fees and the revenue from fees for introduction although the value of issued and introduced non-Treasury debt instruments increased year on year in 2019. The main reason why the recognisedfees for introduction were lower in 2019 is the application of IFRS 15. The Exchange Management Board decided to no longer recognise one-off revenue from the introduction of debt instruments to trading as of 1 January 2019; however, the total adjustment on the recognition of the fees under IFRS 15 was recognised in Q4 2019. The revenue from fees for introduction of debt instruments to trading was adjusted by PLN 763.9 thousand and taken to deferred income.
1
41
Revenue from information services –financial market
Revenue from information services1
Data vendors, subscribers and non-display clients
PLN mn
Q4’19: 15,2%
Q1’19Q4’18 Q2’19 Q3’19
12.011.812.2
11.5
Q4’19
12.2
+6.3%
+3.5%
In Q4'19 (and in 2019) the highest quarterly (and annual) revenues
coming from information services in the history of the GPW Group
New clients in different market segments attracted in Q4’19:
4 non-display clients in Q4’19 (9 clients in 2019)
1 user of processed data (9 users in 2019)
1 client calculating indices using GPW data (2 clients in 2019)
Rapid growth in WIBOR data sales in 2019:
36 non-display clients in 2019
1 user of real-time data in 2019
3 users od delayed data in 2019
The number of GPW and TGE data subscribers rised in 2019.
Q4'18 Q1'19 Q2'19 Q3’19 Q4’19
Number of subscribers (thou.)
248.0 253.9 250.1 238.6 260.3
+5.0% YoY
+9.1% QoQ
Number of vendors
78 80 82 83 83
6.4% YoY
0% QoQ
Non-display
65 83 86 88 94
+44.6%. YoY
+6.8% QoQ
1 Following the introduction of a separate item: Commodity market information services, the presented data include only the revenue from the financial market and may differ from the presentation in previous quarters
42
Revenue from the electricity and gas markets
Trading revenue – commodity market
Investor activity on the commodity market
PLN mn
Q4’19: 22.9%
Q4’18 Q1’19 Q2’19 Q3’19 Q4’19
Electricity – volume of trade (TWh)
67.3 44.3 52.9 65.0 66.7
-0.9% YoY
+2.6% QoQ
Natural gas – volume of trade (TWh)
46.1 28.5 37.3 39.6 40.7
-11.9% YoY
+2.6% QoQ
Property rights – volume of trade (TWh)
10.5 10.9 21.1 5.6 6.3
-40.0% YoY+11.2% QoQ
3.0
Q4’18
3.2
2.4
15.9
Q2’19
7.3 Property rights
3.0
Q1’19
Other
3.5
12.5
3.0
5.74.7
3.3
20.8
Energy
7.6
4.9
3.2
Q3’19
Gas
18.8
8.7
Q4’19
6.7
3.4
3.3
18.3
3.5
3.1
22.1
-2.5%
-11.9%
1
1 Other fees paid by market participants at TGE, IRGIT and InfoEngine
Decrease in revenues from electricity trading in Q4'19 to PLN 4.9
million (-13.8% YoY), resulting from a decrease in turnover on
the forward market and reductions in transaction fees with
liquidity support programs.
Stable revenues from gas trading at the level of PLN 3.4 million
(-1.5 YoY) is the effect of maintaining a high volume in Q4'19.
A decrease in revenues from property rights trading to PLN 6.7
million (-22.4% YoY), resulting from a decrease in turnover in
property rights - mainly due to termination of trading in
cogeneration certificates at the end of June 2019.
Increase in revenues from "other fees from market participants"
to PLN 3.3 million (+ 10% YoY).
43
Revenue from clearing
Revenue from clearing
Revenue from operation of the Register1 Activity of participants of the Register of Certificates of Origin
Decline in revenues from clearing in Q4'19 to PLN 12.4
million (-4.6% YoY).
Lower revenues from Register of Certificates of Origin in
Q4'19 equal to PLN 5.1 million (-16.8% YoY) - mainly as a
result of termination of activity in the area of redemption
of cogeneration certificates of origin.
In the whole of 2019, in the Guarantees of Origin Register
for electricity generated in RES, transactions with a volume
of 19 124 096 MWh were concluded, which is the best
result in the history and a 13.5% increase YoY.
PLN mn
PLN mn
Q4’18 Q1’19 Q2’19
6.1
Q3’19
7.69.0
6.2
Q4’19
5.1 -18.0%
-16.8%
Q3’19
10.9
Q4’18
12.412.9
Q1’19 Q2’19
12.210.8
Q4’19
+14.0%
-4.6%
Q4’19: 15.4%
Q4’19: 6.3%
1 including revenue from the Register of Guarantees of Origin
Q4’18 Q1’19 Q2’19 Q3’19 Q4’19
Volume of issued property rights (TWh)
7.2 18.0 8.3 4.8 4.0
-43.7% YoY
-17.9% QoQ
Volume of cancelled certificates of origin (TWh)
6.8 7.2 19.9 13.1 5.4
-20.7% YoY
-58.8% QoQ
Guarantees of Origin – volume of trade (TWh)
9.8 6.0 4.1 4.1 4.9
-50.0% YoY
+19.5% QoQ
Cost/income ratio (C/I)2: 59.0 in Q4’19 vs. 48.0 in Q4'18. Annual C/I in 2019: 53.9 vs. 50.1 in 2018
Depreciation and amortization: PLN 9.4 mn in Q4'19 (+19.1% YoY,+5.8% QoQ). The increase in YoY depreciation is mainly due to the implementation of the new standard - IFRS 16 "Leasing". Despite the impact on the financial statements in terms of presentation, IFRS 16 did not have an impact on operating activities and cash flows in 2019.
Total employee costs: PLN 19.9 mn (+9.0% YoY and +4.0% QoQ). The increase results, among others from greater employment dictated by the implementation of the development strategy and the increase in remuneration.
External services: PLN 15.3 mn (+28.1% YoY,+33.0% QoQ). The YoY increase is due to higher IT infrastructure maintenance costs, the introduction of a pilot „Analytical Coverage Support Program” and external consultancy costs.
44
Higher operating costs due external services and salary increases
Operating expenses: PLN 47.4 mn (+11.6 % YoY and -31.2% QoQ)
Change in operating expenses
1 Other includes rent, fees and charges (net of the KNF fees), and other operating expenses2 C/I based on reported data
PLN mn
PLN mn
47.4
2.7
0.0
9.2
12.9
4.3
Total employee costs
7.9
Q2’19
11.5
18.3
43.3
Q4’18
19.319.4
10.1
Q1’19
9.40.0
11.9
9.4
3.1-6.2
External services
8.9
36.1
19.2
11.5
2.7
Q3’19
0.0
19.9
15.3
2.7
Q4’19
PFSA fees
D&A
Other
42.4
54.3
3.4
Q4’18
1.5
Depreciation and
amortization
1.6
Total employee costs
External services
-1.6
Rent
0.3
Taxes (inc. PFSA fees)
-0.3
Q4’19Other
42.4
47.4
1
The Group's share in the profits of associates in
Q4’19 was PLN 1.9 mn (+1.0% YoY and -58.6%
QoQ). In 2019, the profit share amounted to PLN
11.3 mn vs. PLN 10.6 mn in 2018
KDPW result:
in Q4’19, the Group's share in the net profit of
the associate KDPW (WSE holds 33.33% of
shares) amounted to PLN 1.8 mn vs. PLN 2.1
mn in Q4’18.
In the whole of 2019, the Group's share in the Polish
Rating Agency (PAR) loss amounted to PLN -0.6 mn
vs. -0.2 mn PLN in 2018.
In 2019 the Group’s share in the profit of the
„Centrum Giełdowe” at the level of PLN 0.5 mn vs.
PLN 0.4 mn in 2018
45
Share of profit of entities measured by the equity method
Share of profit of entities measured by the equity method
Change of share of profit of entities measured by the equity method
1.07
-0.31
4.74
-0.17-0.18
1.94
2.10
Q4’18 Q1’19
3.77
Q2’19
-0.16
Q3’19
0.00
0.991.83
Q4’19
1.92
3.64
4.69PAR KDPW CG
PLN mn
0.18
Q4’18
0.11
Q4’19
-0.271.92 1.94
PLN mn
CG
(24.79%)KDPW
(33.33%)
Polish Rating
Agency
(33.33%)
46
GPW Group’s consolidated statement of financial position
The increase in total assets
as at December 31, 2019
compared to September
30, 2019 is mainly the
result of an increase in the
balance of cash and cash
equivalents. Cash
increased quarterly by PLN
27.9 mn, annualized - by
PLN 92.6 million mainly as
a result of an increase in
cash on current accounts
of companies.
The increase in short-term
liabilities as at December
31, 2019 compared to the
balance as at September
30, 2019 is mainly the
result of an increase in
other short-term liabilities
(regarding current VAT
settlements).
PLN mn 31.12.2018 31.03.2019 30.06.2019 30.09.2019 31.12.2019
Non-current assets, including among others 580,5 598,2 586,2 585,6 590,1
Property, plant and equipment 108,2 104,5 100,6 97,3 102,0
Intangible assets 254,6 250,1 246,8 247,3 246,6
Share of profit of associates 207,3 207,9 204,8 208,4 210,3
Current assets, including among others 636,9 733,2 771,9 645,4 666,7
Trade and other receivables 69,4 66,5 73,2 56,2 45,2
Financial assets measured at amortised cost 377,5 361,7 217,7 333,7 329,0
Cash and cash equivalents 188,7 302,6 478,1 253,4 281,3
Total assets 1 217,4 1 331,4 1 358,1 1 231,1 1 256,8
PLN mn 31.12.2018 31.03.2019 30.06.2019 30.09.2019 31.12.2019
Equity 887,8 911,9 821,2 859,1 873,5
Non-current liabilities 269,0 281,0 281,2 282,6 283,5
Liability under the bond issue 244,0 244,1 244,2 244,3 244,4
Current liabilities, including among others 60,6 138,5 255,7 89,3 99,8
Trade payables 8,6 19,9 31,9 13,8 11,6
Employee benefits payable 14,3 13,0 13,6 16,5 17,2
Contract liabilities 3,6 32,7 22,2 12,0 4,4
Other current liabilities 25,3 54,6 171,9 34,0 41,7
Total equity and liabilities 1 217,4 1 331,4 1 358,1 1 231,1 1 256,8
II. Business activity in Q4 2019 8
IV. GPW Group financial results in Q4 2019 38
III. Market highlights and opportunities 13
V. Appendices 48
I. Executive summary of GPW Group 3
GPW Group’s consolidated statement of comprehensive income
48
YoY decrease in revenues is a result of the
decrease in revenues on the financial market
(by PLN 10.7 mn) and commodities (by PLN 3.6
mn).
Operating expenses YoY increased by PLN 7.3
mn compared to 2018 mainly as a result of: an
increase in employee costs and other employee
costs (an increase of PLN 9.0 mn caused mainly
by an increase in the number of employees and
higher salaries) and higher costs of external
services (increase by PLN 3.9 mn)
4Q’19 net profit includes a one-off setting up
provisions of PLN 15.5 million in respect of a
potential VAT payable in the subsidiary
commodity clearing house IRGiT (GPW
indirectly holds 100% of IRGiT). The provisions
have been charged to financial expenses (which
include interest on tax payable). Company
informed about this one-off with a current
reports 5/2020 and 6/2020 on 1 April 2020.
GPW Group net profit for 2018 includes a one-
off. In 2Q’18 GPW sold its interest in the
associate Aquis Exchange Limited (+PLN 36.8
mn impact on GPW Group net profit). Adjusted
net profit for 2018 would amount to PLN 146.9
mn.
PLN mn Q4'18 Q4'19 2018 2019
Revenue 88,5 80,3 346,8 336,1
Financial market 48,1 43,6 191,9 185,0
Trading 30,6 27,1 124,3 117,5
Listing 5,7 4,3 22,8 19,6
Information services 11,8 12,2 44,8 47,9
Commodity market 40,0 36,0 153,6 149,9
Trading 20,8 18,3 78,5 75,2
Register of Certificates of Origin 6,1 5,1 28,7 27,8
Clearing 12,9 12,4 45,9 46,3
Information services 0,1 0,2 0,5 0,7
Other operating income 0,4 0,7 1,4 1,2
Operating expenses 42,4 47,4 173,8 181,1
Other income 1,3 1,5 2,7 6,6
Impairment gains/(losses) on receivables -1,7 -1,8 -3,2 -1,9
Other expenses 0,8 0,8 2,3 3,3
Operating profit 44,8 31,7 170,2 156,3
Financial income 2,6 1,8 8,5 8,9
Financial expenses 2,6 17,8 9,0 25,5
Balance on financial income and expencies 0,0 -16,0 -0,5 -16,6
Impairment loss on investments in other entities -0,1 0,0 45,8 -1,1
Share of profit/(loss) of entities measured by
equity method1,9 1,9 10,6 11,3
Profit before income tax 46,6 17,6 226,0 149,8
Income tax 9,5 6,4 42,3 30,5
Net profit 37,1 11,2 183,7 119,3
EBITDA 52,7 41,2 202,0 193,2
GPW Group’s consolidated statement of cash flows
49
• Positive cash flow from operating activities
achieved in 2019 was higher by PLN 54.6
mn compared to 2018 mainly as a result
of favorable changes in balance sheet
volumes (in 2019, an increase in assets
and liabilities of PLN 55.6 mn in 2018 - a
decrease by PLN 26.8 mn).
• Positive cash flow from investment
activities achieved in 2019 compared to
negative cash flow from 2018 is mainly
the result of a better balance on
transactions regarding the purchase and
sale of financial assets valued at
amortized cost (corporate bonds, bank
deposits).
• Negative cash flows from financing
activities achieved in 2019, i.e. PLN 142.7
mn were lower by PLN 43 mn than cash
flows from 2018 mainly as a result of a
dividend payment higher by PLN 41.1 mn.
• The Group's capital expenditure in 2019
amounted to PLN 16.7 mn (PLN 21.2 mn
in 2018).
PLN mn 12 months period ended 31 December of 2019 2018
Total net cash f lows f rom operating activities 191,1 136,5
Net prof it of the period 119,3 183,7
Adjustments: 113,7 -5,5
Income tax 30,5 42,3
Depreciation and amortisation 37,1 31,8
Gains on investment/losses on impairment of investment in other entities 1,1 -45,8
Share of (profit)/loss of entities measured by equity method -11,3 -10,6
(Gains ) on assets measured by equity method -5,2 -4,6
Interest on bonds 7,3 7,3
Other adjustments -3,1 0,9
Change of assets and liabilities : 57,3 -26,8
Trade receivables and other receivables 24,1 -7,2
Other liabilities (excl. contracted inves tments and dividend payable) 9,1 -3,4
Provis ions for liabilities and other charges 15,5 -0,1
Interest on tax payable (paid)/refunded -1,3 -0,1
Income tax (paid)/refunded -40,7 -41,7
Total cash f lows f rom investing activities: 44,4 -84,2
In: 846,1 772,6
Sale of property, plant and equipment and intangible assets 4,3 1,4
Dividends received 7,0 0,4
Sale of financial assets measured at amortised cost 829,3 709,7
Interest on financial as sets measured at amortised cost 5,2 3,5
Out: -801,7 -856,8
Purchase of property, plant and equipment -9,2 -13,0
Purchase of intangible as sets and advances for intangible as sets -7,5 -8,3
Purchase of financ ial as sets measured at amortised cos t -780,8 -835,6
Payments towards share capital of subs idiaries exc luded from -4,0 0,0
Total cash flows from financing activities: -142,7 -99,7
In: 3,7 0,0
Grants received 3,7 0,0
Out: -146,4 -99,7
Dividend paid -133,4 -92,3
Interes t paid on bonds -7,3 -7,3
Net (decrease)/increase in cash and cash equivalents 92,9 -47,4
Cash and cash equivalents - opening balance 188,7 235,9
Cash and cash equivalents - closing balance 281,3 188,7
26,0%
3,2%
3,0%2,8%
5,8%
14,3%
44,6%
0,3%
Information services (FinancialMarket)
Listing
Trading - other
Trading - fixed income
Trading - derivatives
Trading - shares
Commodity Market: 44,6%
Financial Market: 40,8%
2019
Other revenue (0,3%)
2010 2012 20182011 20152013 20162014
311
2017
226
2019
269 274 284318 328
352 347 336
CAGR: +6,7%
GPW Group’s revenue (PLN mn)
GPW Group’s revenue structure
50
4,9%
3,6%
10,2%
3,7%
8,3%
13,8%
0,2% Information services (CM)
Clearing
Register of Certificates of Origin
Trading - other
Trading - property rights
Trading - gas
Trading - energy
including TGE Group: 149,9 PLN mn
Market Data:14,3%*
GPW Group: 336,1 PLN mn
* Information services revenue only from Financial Market
Revenue drivers:
Value of trade in equities
Structure of orders (small,
large, mid-sized)
51
Financial market: Trade in equities
Value of trade in equities and number of transactions
Volatility – WIG and WIG20
1 Share in GPW Group’s revenue in Q4 2019
26.0%1
160 167
38.2
2008 2009
51.4
2015
207
48.4
70.1
55.3
2010
251
2011
46.4
2018
188 205
2012
65.9
51.9
72.1
220
2013
55.5
236
2014
204203 190
2016
80.2
2017
73.1
191
2019
Average number of transactions per session (thous.)
Value of trading in equities, EOB (PLN mn)
10,3%
20,0% 20,1%
28,5% 28,0%
15,4%
19,3%
13,9% 14,3%12,6% 13,6%
15,4%
11,6%14,9%
12,6%
13,6%
24,4%22,7%
34,4% 35,0%
19,2%22,0%
16,5% 16,8%14,2%
16,3%18,7%
14,8%
18,6%
14,9%
2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019
WIG WIG20
52
Financial market: Trade in derivatives
Volume of trade in derivatives
Volume of trade in futures vs. volatility
1 Velocity ratio (value of trade in WIG20 futures to value of trade in WIG20 stocks)2 Share in GPW Group’s revenue in Q4 2019
20122008 2009
9.5
80.4
14.7
132.8
13.812.6
131.0
2016
168.1
2010 2014
15.5
8.0
2013
8.28.2
137.2
11.3
184.8
12.6
138.1
104.2
2015 2018
165.0
140.1
7.6
2017
143.6
171.2
7.0
20192011
Number of Open Interest (thous.)
480%
139%
404%
132%116%
439%
181%121% 116% 127%121% 106%
PLN bn
1DLR
125 124 152192
149 174 160 162 147
174160 163
602
502
668
347
207 201 212 196170
210 204174
2008 201620132009 20152010 2011 20142012 2017 2018 2019
Trading- WIG20 futures
Trading – WIG20 stocks
Revenue drivers:
Volume of trade in futures
Number of open interest
Volatility
3.2%2
53
Financial market: Other instruments and fees paid by participants
Value of trade on Treasury BondSpot Poland, PLN bn
Number of exchange members
1 Share in GPW Group’s revenue in Q4 2019, trade in debt instruments2 Share in GPW Group’s revenue in Q4 2019, other trading fees paid by market participants
3,0
188
731612
498 439339
158
338260 197
135
307450
347327
260
255
196
147
86
845
407
20092008 2015
599
20112010 2012 2013 2014
324
2016 2017 2018 2019
84
282
101
1.037 1.062
767
413
535
Cash transactions
Repo transactions
18 17 1929 27 26 26 28 25 25 25 22
31 2930
32 33 31 30 2928 28 27
28
2010
49
2008 2009 201420122011
61
2015
53
2013 2016 2017 2018 2019
4946
6057 56 57
53 52 50
Local Remote
2,9%2
Revenue drivers:
Value of trade in Treasury
bonds
Number of exchange members
3.0%1
2.6%2
54
Financial market: Listing
Capitalisation of domestic companies
IPO/SPO value and number of companies
1 Share in GPW Group’s revenue in Q4 2019
5.8%1
543446
523593 591
517 557
671579 550
2013
36.8%
2012
30.0%27.9%
20192010
36.5%
2011
32.0%
34.8%
2014
28.9%
2015 2016
34.8%
2017
30.0%
2018
25.0% Revenue drivers:
Capitalisation at YE
Value of new issue shares and
bonds
Number of issuers
Market Capitalisation/GDP (%)
Market Capitalisation of domestic companies (PLN bn)
585
777867 895 902 905 893 890 852 824
43.13
201720132011 2012 2014 2015 2016
15.69
2018 2019
22.71
9.23
2010
3.66 4.35
90.79
5.24
1.15
3.121.36
3.622.07
3.958.10
0.35
5.36
0.08
7.734.14
IPO, PLN bn
SPO, PLN bn
Number listed companies, Main Market and NewConnect
55
Financial and commodity market: Information services
Number of data vendors
Number of subscribers (thou.)
1 Total share of „information services”' from the financial and commodity markets in the revenues of the GPW Group 2019
14.5%1
18 19 20 21 24 27 24 25 25
42 46
32 33 37 37 34 3130 28 27
3637
2015201420122009
58
2016
5752
2010 2011 2013 2017 2018 2019
50
58 5854 53 52
7883
Domestic
Foreign
187
307327
288
262240
221 225248 248
260
20142009 2010 2011 20132012 2015 2016 2017 2018 2019
Revenue drivers:
Number of data vendors
Number of subscribers
56
Commodity market: Trade in electricity and gas
Volume of trade in electicity (TWh)1
Volume of trade in gas (TWh)
1 Data for 2006-2013 include trade on the GPW Energy Market poee2 Share in GPW Group’s revenue in Q4 2019
8.5%2
gaz
226.1
109.1
13.4
2008 20132009
176.6
25.2
74.5
161.6
2010
154.3
21.7
2011 2015
22.3
21.3
198.3
118.1
23.7
2012
163.0
2014
25.1
27.6
99.0
2016
86.4
2017
27.7
87.9
2018
186.7
2019
10.1 9.1
130.8139.4
186.7
126.6111.7
228.9
195.0
33.9
105.1
24.0
13.9
92.9
2015
111.6
24.6
89.9
2016
114.7
2017
23.7
2019
2.4
106.8114.5
138.7143.3
2.0
123.5
22.6
2014
119.6
2018
0.0
0.0
2012
0.4
2013
6.5
146.1
Forward
Spot
Spot
Forward
Revenue drivers:
Volume of trade in electricity
Volume of trade in gas
Share of spot and forward trade
57
Commodity market: Trade in property rights
Spot trade in property rights (TWh)
Number of participants of the Register of Certificates of Origin
1 Share in GPW Group’s revenue in Q4 2019
28.5
13.2
20162008 2012
6.825.9
35.242.4
9.6
43.9
23.1
2009
35.6
2010
15.1
35.7
17.5
2011
19.9
21.8
2013
32.1
3.9
2014
26.6
18.0
2018
32.3
2015
24.0
58.1
26.2
59.3
29.839.3
2017
30.8
2019
29.9
44.8
28.3
50.8
62.2
36.0
58.9
50.248.8
Green Certificates
Cogeneration certificates
1,862
2011 2012 2013 2014
1,445
2015 2016 20182017 2019
1,656
2,117
2,539
2,970
3,4493,706
3,980
10.2%1
Revenue drivers:
Volume of trade in property
rights
Share of certificate categories
in trade
Number of register participants
58
Commodity market: Register of Certificates of Origin
Volume of issued certificates of origin (TWh)
Volume of cancelled certificates of origin (TWh)
1 Share in GPW Group’s revenue in Q4 2019
8.3%1
21.615.3
21.5
2008
24.2
2009
10.8
25.8
20172012
10.7
2010
25.926.6
47.2
2011
11.9
17.6
27.3
2013
27.6
20.6
20152014
23.4 18.9
28.3
29.5
36.6
2016
24.5
24.0
2018
19.9
50.7
27.6
31.9
2019
37.241.1 42.2
48.5 47.5
35.1
14.1
21.0
Cogeneration
Green Certificates
9.6
2009
43.2
26.116.613.8
18.8
30.8
2008 2010
15.4
52.1
2016
10.3
2011
27.4
12.4
22.3
20152012
36.2
8.8
20172013
20.0
0.6
2014
27.89.1
13.2
16.819.025.2
26.9 28.0
2018 2019
20.1
17.8
25.8
42.9
25.027.0
20.6
47.0 45.6
Green Certificates
Cogeneration
Revenue drivers:
Volume of issued property rights
Volume of cancelled property
rights
Glossary (1)
59
Cogeneration
Colocation
COR
ECM
EOB
ETF
ETP
FESE
Free float
Green certificates
HVF
technological process where electricity and heat are generated simultaneously in a combined heat and power plant; thanks to lower consumption of fuel, cogeneration provides material economic benefits and environmental advantages over separate generation of heat in a traditional heat plant and of electricity in a condensation power plant
a service where the exchange provides physical space and allows clients to install hardware and software in direct proximity to the exchange’s trading system
Certificates of Origin Register, register maintained by the Polish Power Exchange responsible for registration and record-keeeping of certificates of origin
Equity Capital Market, value of equity raised on the financial market
Electronic Order Book, trade excluding block trades
Exchange Traded Funds, track the performance of an exchange index. Similar to other investment funds, ETFs are regulated under EU Directives and national regulations. ETF can daily create and cancel ETF units. ETF units are exchange traded on the same terms as shares.
Exchange Traded –Products, structured products – financial instruments whose price in linked to the value of a market indicator (the underlying instrument)
Federation of European Stock Exchanges
free float shares are shares other than held by shareholders which hold more than 5% each, Treasury shares for cancellation, and registered shares; free float includes all shares held by investment funds, pension funds and asset managers and shares participating in depository receipt issue programmes
Certificate of origin is a document cerifing that the Energy was produced from the renewable Energy resources
High Volume Funds, a promotion programme addressed to investment funds actively trading in shares on GPW
Glossary (2)
60
HVP
IPO
ISV
MCO
MRC
MTF
NEMO
OTC
REIT
RES
High Volume Provider, a promotion programme addressed to legal entities whose core business is to invest on financial markets only on own account
Initial Public Offering, in this presentation, PwC IPOwatch Europe reports and FESE data, IPO means all offerings where a company first raises equity on the capital market, either in a public offering or a private placement
Independent Software Vendors, providers of client software for exchange members used to trade on the trading platform
Market Coupling operator
Multi-regional Coupling, European project of operational integration of spot electricity markets
Multilateral Trading Facility, addressed mainly to institutional investors, offers trade in stocks combined with very short lead times for the execution of orders as well as low trading fees. MTFs are usually operated by investment firms (banks, brokers) or securities exchanges. MTFs offer trade in the same stocks as those listed on other markets and do not provide listings.
Nominated Electricity Market Operator is a market operator designated by the competent authority of the European Union Member State to participate in single day-ahead or single intraday coupling
Over the Counter, a non-regulated market outside the exchange, where trade in non-standard financial instruments is made directly between counterparties without the mediation of a securities exchange
Real Estate Investments Trusts are special companies and funds investing in real estate; they manage a real estate portfolio to earn a fixed income from rent, and pay out most of the earnings to shareholders as dividend
renewable energy sources
Glossary (3)
61
RGO
SPO
Post-trade services
UTP
White certificates
Velocity
Register of Guarantees of Origin, register of instruments supporting renewable energy sources, which aim to provide disclosure for the end customer as to the amount of electricity generated in a renewable source and supplied to the power distribution or transmission network
Second Public Offering
depository, clearing and settlement services
Universal Trading Platform, the trading system of the Warsaw Stock Exchange supplied by NYSE Technologies
Certificates of origin of energy efficiency
a measure of liquidity of trade in stocks equal to turnover in a period to average capitalisation at the beginning and at the end of the period
61
62
Contact:
GPW Investor Relations
Phone 22 537 72 50
www.gpw.pl/relacje_inwestorskie
Disclaimer
This presentation has been prepared by Giełda Papierów Wartościowych
w Warszawie S.A. (“Warsaw Stock Exchange”, “GPW” or “Company”) for its
shareholders, analysts, and other contractors. This presentation has been prepared
solely for information and is not an offer to buy or sell or a solicitation of an offer to
buy or sell any securities or instruments. This presentation is not an investment
recommendation or an offer to provide any services.
All efforts have been made to present the data in this presentation; however, some
data are derived from external sources and have not been independently verified.
No warranty or representation can be given that information in this presentation is
exhaustive or true.
GPW has no liability for any decisions made on the basis of any information or
opinion in this presentation. GPW informs that in order to obtain information about
the Company reference should be made to periodic and current reports published in
compliance with applicable provisions of Polish legislation.
IR events
30 April 2019
Introduction of the period of limited investor
communications preceding the publication of Q1’20
financial results
14 May 2019
Publication of consolidated quarterly report for Q1 2020
30 July 2019
Introduction of the period of limited investor
communications preceding the publication of consolidated
report for H1’20
13 August 2019
Publication of consolidated report for H1 2020
22 October 2019
Introduction of the period of limited investor
communications preceding the publication of Q3’20
financial results
5 November 2019
Publication of consolidated quarterly report for Q3 2020