flatexDEGIRO starts into expected record year 2024 with a jump in revenues and earnings

flatexDEGIRO starts into expected record year 2024 with a jump in revenues and earnings

• Revenues increased by 25% to € 123 million (Q1 2023: € 98 million)
• flatexDEGIRO benefits from both rising interest income and a significant increase in commission income per transaction
• EBITDA improves by 177% to € 54 million (Q1 2023: € 19 million)
• Consolidated net profit increases by 340% to € 30 million (Q1 2023: € 7 million)
• 121,000 new customer accounts in Q1 2024 increase customer base to over 2.8 million
  (March 2023: 2.5 million)
• Net cash inflows of € 1.8 billion in Q1 2024
• Revenues and consolidated net income in 2024 expected to be at the upper end of the guidance corridor (revenue growth of 5-15% and increase in consolidated net income of 25-50%)
• For the first time, the Management Board and Supervisory Board will propose to the upcoming Annual General Meeting the authorization to buy back up to 10% of the share capital as well as an additional dividend of 4 cents per share

Dr. Benon Janos, CFO and Co-CEO of flatexDEGIRO AG from 1 May 2024: "On the basis of stable transactions, we have further expanded the profitability of our brokerage business and are benefiting from consistently high interest income. We are well on track not only to make 2024 a new record year, but even to reach the upper end of our guidance corridor."

Stephan Simmang, CTO and Co-CEO of flatexDEGIRO AG from 1 May 2024: "The completed enhancement of the organizational structures and the almost complete implementation of all regulatory relevant improvement measures further create a solid and sustainable basis for the future growth of flatexDEGIRO."

Strong customer growth with declining customer acquisition costs

The increase in customer accounts (gross) in Q1 2024 amounted to approx. 121,000 and was therefore 8 percent higher than in the same quarter of the previous year (Q1 2023: approx. 112,000). A good 25 percent of these (30,700) are attributable to the flatex brand in Germany and Austria, while the broader international DEGIRO brand with its presence in a total of 15 European markets contributes a further 90,500. The customer base amounted to 2.81 million at the end of the first quarter of 2024, which corresponds to an increase of 4 percent compared to the end of 2023 (2.70 million) and an increase of 12 percent compared to the end of the first quarter of 2023 (2.50 million).

High net cash inflows and investment ratio

Customer assets under custody reached a record EUR 58 billion at the end of March 2024, an increase of 29 percent or EUR 13 billion within one year. flatexDEGIRO continues to see high net inflows of funds from existing and new clients on its platforms, which amounted to almost EUR 2 billion in the first quarter of 2024 alone. These inflows, as well as a further EUR 100 million from additional margin loans utilized by customers, were fully invested in financial instruments and confirm flatexDEGIRO's clear focus on attracting trading-active customers.

Financial position and results of operations

Revenues in the first quarter of 2024 amounted to EUR 123 million, an increase of 25 percent compared to the same quarter of the previous year (Q1 2023: EUR 98 million).

Significant increase in commission income

Despite fewer trading days in the first quarter of 2024, the number of transactions settled remained almost constant at 16.1 million (Q1 2023: 16.3 million). This also includes the reduction in less profitable transactions triggered by price adjustments in May 2023. As a result, average commission income per transaction improved from EUR 4.16 (Q1 2023) to EUR 4.64 (Q1 2024). Commission income thus increased by 10 percent to EUR 75 million in the first three months of 2024 (Q1 2023: EUR 68 million).

flatexDEGIRO continues to benefit from rising interest income

Interest income in the first quarter of 2024 amounted to EUR 44 million, an increase of 65 percent compared to the first quarter of 2023 (EUR 27 million). The increase compared to the first quarter of 2023 is the result of higher interest on deposits with the ECB, higher interest rates for securities loans at flatex and DEGIRO, higher utilization of securities loans and a slight increase in cash deposits from customers.



Overall lower cost base

Raw materials and consumables amounted to EUR 19 million or 15 percent of revenue in the first three months of 2024 (Q1 2023: EUR 17 million or 17 percent).

Operating expenses fell by 19 percent to EUR 51 million in the first quarter of 2024 (Q1 2023: EUR 62 million).

In the same period of the previous year, personnel expenses included expenses for the recognition of provisions in connection with variable long-term remuneration in the amount of EUR 11 million. In the first quarter of 2024, the corresponding expenses amounted to just EUR 1 million. Current personnel expenses rose by 16 percent to EUR 25 million in the first three months of 2024 (Q1 2023: EUR 22 million). Due to the high inflation rates at the time, flatexDEGIRO paid its employees a one-off inflation adjustment payment of just over EUR 3 million in the prior-year period and granted employees an additional salary increase of 8 percent on average.

Marketing expenses were reduced by 33 percent to EUR 12 million in the first quarter of 2024 (Q1 2023: EUR 17 million). Despite this reduction, customer account growth increased by 8 percent to around 121,000 new customer accounts compared to the first quarter of 2023, in which around 112,000 new customer accounts were opened. As a result, customer acquisition costs fell by 38 percent to EUR 95 (Q1 2023: EUR 153).

Earnings before interest, taxes, depreciation and amortization (EBITDA) amounted to EUR 54 million in the first quarter of 2024, an increase of 177 percent compared to the EUR 19 million achieved in the first quarter of 2023. The EBITDA margin thus more than doubled, reaching 44 percent in the first quarter of 2024 (Q1 2023: 20 percent).

Consolidated net profit in the first quarter of 2024 rose by 340 percent to EUR 30 million (Q1 2023: EUR 7 million). The earnings margin amounted to 24 percent in the first quarter of 2024 and was therefore more than three times as high as in the first quarter of 2023 (7 percent).

Based on current developments, the management assumes that revenues and consolidated net income for 2024 as a whole will be at the upper end of the guidance corridor communicated at the beginning of the year (revenue growth of 5-15 percent and an increase in consolidated net income of 25-50 percent). flatexDEGIRO is therefore aiming for record figures in both revenue and consolidated net income in 2024 - without relying on external tailwinds in the trading or interest business.

Improved ESG ratings

In the first quarter of 2024, flatexDEGIRO continued to improve in important, internationally recognized ESG ratings. In the MSCI ESG rating, flatexDEGIRO improved by two rating levels from BB to A, placing it at the top of all rated companies in the "Investment Banking & Brokerage" segment. flatexDEGIRO was also able to increase its score in the Morningstar/Sustainalytics ESG rating and ranks fourth worldwide in the "Investment Banking & Brokerage" segment (out of a total of 141 companies rated in this segment). The risk rating was confirmed unchanged as "low". 

 

        Q1 2024   Q1 2023   Change in %   Key financial figures                   Revenues   EUR m   123.0   98.3   +25.0   Commission income   EUR m   74.8   68.0   +10.1   Commission income per transaction   EUR   4.64   4.16   +11.6   Interest income    EUR m   43.8   26.6   +65.0   Other operating income   EUR m   4.3   3.8   +13.5                       Raw materials and consumables   EUR m   18.9   16.7   +12.6   in percent of revenues   %   15.3   17.0   -9.9                       Operating expenses   EUR m   50.5   62.2   -18.8   Current personnel expenses   EUR m   24.9   21.5   +15.8   Personnel expenses for long-term variable remuneration   EUR m   1.4   10.6   -87.2   Marketing expenses   EUR m   11.5   17.2   -33.2   Average customer acquisition costs   EUR   94.89   153.22   -38.1   Other administrative expenses   EUR m   12.8   12.9   -1.3                       EBITDA   EUR m   53.6   19.4   +176.9   EBITDA margin   %   43.6   19.7   +121.4   Net profit   EUR m   30.0   6.8   +340.5   Net profit margin   %   24.4   6.9   +252.3                                      

 

Q1 2024

Q1 2023

Change in %

Commercial KPIs

Customer accounts at the end of the reporting period

m

2.81

2.50

+12.4

New customer accounts (gross)

k

121

112

+7.8

Transactions settled

m

16.1

16.3

-1.4

Mar 2024

Mar 2023

Change in %

Customer assets under custody

EUR bn

58.0

45.1

+28.8

of which: Securities

EUR bn

54.4

41.7

+30.5

of which: Cash

EUR bn

3.6

3.3

+7.9

Q1 2024

Q1 2023

Change in %

Segments - Customer accounts

flatexDEGIRO

m

2.81

2.50

+12.4

flatex segment

m

0.69

0.63

+10.7

DEGIRO segment

m

2.11

1.87

+13.0

Q1 2024

Q1 2023

Change in %

Segments - Transactions settled

flatexDEGIRO

m

16.1

16.3

-1.4

flatex segment

m

5.7

5.5

+2.7

DEGIRO segment

m

10.4

10.8

-3.4

 

For further information please contact:

Achim Schreck     Phone +49 (0) 69 450001 0 
Head of IR & Corporate Communications  achim.schreck@flatexdegiro.com

 

 About flatexDEGIRO AG

flatexDEGIRO AG (WKN: FTG111, ISIN: DE000FTG1111, Ticker: FTK.GR) operates one of the leading and fastest growing online brokerage platforms in Europe. Based on modern, in-house state-of-the-art technology, customers of the flatex and DEGIRO brands are offered a wide range of independent products with execution on top TIER 1 exchanges. The technological edge, high efficiency and strong economies of scale enable flatexDEGIRO to continuously improve its service offering for clients and set leading standards in terms of product, price and platform quality.

With more than 2.8 million customer accounts and around 57 million securities transactions processed in 2023, flatexDEGIRO is one of the largest retail online brokers in Europe. In times of bank consolidation, low real interest rates and digitalization, flatexDEGIRO is ideally positioned for further growth.

Further information can be found at https://www.flatexdegiro.com/en.

 

Disclaimer

Preliminary results

This release contains preliminary information that is subject to change and does not claim to be complete.

Non-IFRS key figures (APMs)

This presentation contains non-IFRS measures. These measures are alternative performance measures as defined by the European Securities and Markets Authority ("ESMA"). flatexDEGIRO presents these non-IFRS measures because (i) they are used by management to measure performance, including in presentations to the Management Board and members of the Supervisory Board and as a basis for strategic planning and forecasting; and (ii) they represent measures that flatexDEGIRO believes are widely used by certain investors, securities analysts and other parties as supplemental measures of operating and financial performance. These non-IFRS measures may not be comparable to similarly titled measures of other companies and have limitations as analytical tools and should not be considered a substitute for analysis of flatexDEGIRO's results of operations as reported under IFRS. Non-IFRS measures are not a measure of flatexDEGIRO's performance or liquidity under IFRS and should not be considered as an alternative to net income or other performance measures derived in accordance with IFRS or other generally accepted accounting principles or as an alternative to cash flows from operating, investing or financing activities.

Forward-looking statements

This release may contain forward-looking statements and information, which are characterized by formulations such as "expect", "aim", "anticipate", "intend", "plan", "believe", "aim", "estimate" or "will". Such forward-looking statements are based on our current expectations and certain assumptions, which may be subject to a variety of risks and uncertainties. The results actually achieved by flatexDEGIRO AG may differ materially from these forward-looking statements. flatexDEGIRO assumes no obligation to update these forward-looking statements or to correct them in the event of developments that differ from those anticipated.