Smartbroker Holding AG: Preliminary financial results for the full year 2022 - second-best performance in the Company's history despite challenging market environment

Preliminary financial results for the full year 2022: Second-best performance in the Company's history despite challenging market environment

• 2022 group revenue of €53 million
• Operating EBITDA of €9 million, EBITDA before customer acquisition costs of €13 million
• Number of securities accounts increased to around 267,000, clients’ assets under custody increased to €9.2 billion
• Guidance for 2023: management plans revenue of between €51 million and €56 million

Berlin, 15 March 2023

Despite a challenging market environment, Smartbroker Holding AG (previously wallstreet:online AG, ISIN: DE000A2GS609, FSE: SB1) looks back on the second-best financial performance of its history, according to preliminary, unaudited figures for the 2022 financial year which have been published today. The Company generated HGB revenue of €52.6m in the 2022 financial year (2021 on a like-for-like basis: €56.8m^[1]) with EBITDA before customer acquisition costs of €13.1m. Around €19m of the revenue was generated by the transaction business and just over €34m by the Group's media segment.

Customer acquisition costs for the Group’s online broker Smartbroker amounted to around €4m last year, resulting in an EBITDA after customer acquisition costs of around €9m. The figures underline that the Group's focus during the last year rested on internal development work rather than customer or revenue growth. This primarily included the continuation of the preparations for the market launch of Smartbroker 2.0, which should become the Group’s main profitable growth driver from 2024.

Clear focus on the Smartbroker relaunch and related customer base migration

As previously announced, the marketing expenses for Smartbroker had temporarily been reduced in order to facilitate the upcoming migration of existing customers onto the new platform. Since the decision to cooperate with Baader Bank for custody account management, transaction processing and related backend functions, the internal development work for Smartbroker 2.0 has been progressing according to plan. Among other things, the Smartbroker Group is investing in the further development of its own trading app, the redesign of its web interface, its middleware and the necessary integrations to Baader Bank's systems. For this purpose, the Company extended its own development teams. In addition, the migration and termination agreement with the previous partner bank was finalized in order to ensure a smooth migration of clients. The Company expects further external capital expenditure of around €6m in the current year to complete the Smartbroker 2.0 project, and is fully financed for this purpose. Gross cash at the end of 2022 amounted to more than €27m.

Even with a reduced marketing budget and in historically difficult capital market conditions, the Group managed to increase the number of securities accounts to 267,000 by the end of 2022 (compared to 246,000 as at 31 December 2021). During the same period, clients’ assets under custody grew to €9.2bn (compared to €8.8bn as at 31 December 2021). The situation was different, however, for the number of transactions: As a result of the difficult global capital markets environment, trading activity decreased further in the second half of 2022, resulting in approximately 18 trades per account for the full year 2022 (compared to 29 trades in 2021).

Media business remains highly profitable despite slight decrease in topline

The weak capital markets background also led to a significant decline in page views in the media business. However, the number of registered users remained stable. Due to the attractive target audience addressed by the Group’s digital media properties, and its ability to address these consumer groups with high precision, the segment revenue declined only slightly. Segment profitability remained at its usual robust level, with the EBITDA for the media business amounting to almost €15m in 2022, which corresponds to a segment EBITDA margin of approximately 43%. A similar margin is expected for the current financial year 2023. New product initiatives, such as the introduction of paid premium services, have also been well received by customers.

2023: Moderate revenue development with temporarily inefficient cost base

Despite a volatile market environment, the Company expects to generate revenues between €51m and €56m in 2023. The EBITDA after customer acquisition costs is once again impacted by additional costs, primarily due to the establishment of Smartbroker 2.0 and the customer migration due in the second half of the year and is therefore planned to be between €1m and €4m. The new Smartbroker is expected to develop its full revenue potential from next year onwards, as the migration of existing customers is to be completed in the second half of 2023. Therefore, new customer acquisition costs are expected to be relatively low in the current year, at around €2m. The migration will likely entail a one-off reduction in the number of customers, which will probably not be fully offset by the new customer acquisition activities of 2023. The plan is to significantly ramp up these activities again from 2024 and build on the successes of 2019-2021.

Commenting on the figures presented today, André Kolbinger, founder and CEO of Smartbroker Holding AG, said: "We see 2023 as the final transition year before Smartbroker 2.0 will contribute to full-year revenue growth and also significantly to the Group's profitability from 2024 onwards. Currently, we continue to maintain two infrastructures - on the one hand, the current Smartbroker platform and, on the other hand, Smartbroker 2.0, which is under development, including its apps and product enhancements. These parallel efforts and the extensive investments have temporarily led to an increased cost base as well as to a negative cash flow in 2022 and for the last time in 2023. However, we firmly expect a timely relaunch and a subsequent normalization of our cost structure. It is important for me to emphasize that the Group, and its Smartbroker 2.0 project, are fully funded. We are very confident about the development of the coming months and are very much looking forward to presenting the new product to our customers in the summer."
 

About the Smartbroker Group

The Smartbroker Group operates the Smartbroker – a multiple award-winning online broker, which is the only provider in Germany to combine the extensive product range of traditional brokers with the extremely favorable conditions of neo brokers. In addition, the Group operates four high-reach stock market portals (wallstreet-online.de, boersenNews.de, FinanzNachrichten.de and ARIVA.de). With several hundred million monthly page impressions, the Group is the by far largest publisher-independent financial portal operator in German-speaking countries, and also hosts the region’s largest finance community.

Press contact:

Felix Rentzsch
Head of Communications
Phone: +49 (0)176 4165 0721
Mail: f.rentzsch@smartbroker-holding.de

Investor Relations contact:

Sabrina Kassmannhuber
Head of Investor Relations
Phone: +49 (0)30 20 456 500
Mail: ir@smartbroker-holding.de

^[1] This value corresponds to the pro forma revenue, which represents Smartbroker AG fully consolidated from 1 January 2021 according to HGB. On the basis of the management information system, the value would amount to €51.4m, without any significant effect on the EBITDA.