Outlook
Fourth quarter 2022 expected to show further increase of revenue per trade
In-line with typical seasonal developments, trading activity during the fourth quarter is expected to pick up again, supported by portfolio sorting to realize tax losses before the end of the fiscal year, earnings seasons with higher visibility on full-year performance and US mid-term elections. Customer account growth during the last three months is likewise expected to accelerate against the second and third quarter. Newly introduced referral programs (Member-get-member) and an ambassador program in collaboration with universities, business schools and investment clubs in key growth markets such as France, Spain, Portugal and Italy are expected to further support sustainable customer growth beyond the fourth quarter 2022.
The fourth quarter 2022 is expected to show further increases to revenue per trade due to a significantly higher interest income and further commercial measures taken already during the third quarter.
Significant benefit from increasing interest rates
Based on flatexDEGIROs existing liquidity portfolio of approx. EUR 2.5 billion as of 30 September 2022, the current ECB depository rate of 75 basis points will result in an additional interest income in the fourth quarter of approx. EUR 5 million. In case of further increases of the ECBs depository rate to a level of 125 to 200 basis points, the annualized EBT potential would amount to approx. EUR 30 to 50 million.
Higher monetization due to 50 cent more handling fee at DEGIRO
In light of general inflationary trends, DEGIRO has increased its handling fee by EUR 0.50, effective 1 September 2022. With a major and growing share of transactions settled by flatexDEGIRO stemming from DEGIRO, this relatively small increase adds up when applied to millions of transactions. For the fourth quarter 2022, management expects this measure to contribute approx. EUR 3.5 million to EBT, corresponding to an annualized EBT potential of approx. EUR 14 million.
Further commercial measures to support near-term expansion of revenue per trade
During the fourth quarter 2022, DEGIRO will significantly extend customer access to margin loans. The product will be made available to basically all of the over 1.5 million DEGIRO customers. So far, it is only available to a fraction of DEGIRO customers (approx. 250k). Under conservative assumptions, the additional margin loan potential could amount to well over EUR 300 million. At current interest rate levels of 400 basis points, this would equate to an annualized EBT potential of approx. EUR 13 million.
Following the successful introduction of DEGIROs ETP partnerships with BNP Paribas and Société Générale in the Netherlands, France and Germany in December 2021, the partnerships will be further extended during the fourth quarter 2022 to Italy, Switzerland, Spain and Portugal. By enhancing its product offering in these growth markets with such high revenue products, DEGIRO increases its attractiveness for existing and new customers while tapping into additional growth and monetarization potential of around EUR 4 million, on an annualized basis.
Seasonal increase of trading activity and customer growth
In-line with typical seasonal developments, trading activity during the fourth quarter is expected to pick up again, supported by portfolio sorting to realize tax losses before the end of the fiscal year, earnings seasons with higher visibility on full-year performance and US mid-term elections. Customer account growth during the last three months is likewise expected to accelerate against the second and third quarter. Newly introduced referral programs (Member-get-member) and an ambassador program in collaboration with universities, business schools and investment clubs in key growth markets such as France, Spain, Portugal and Italy are expected to further support sustainable customer growth beyond the fourth quarter 2022.
Full year 2022 guidance
The Management Board expects to generate revenues of at least EUR 400 million in 2022. Average revenue per transaction is expected to be significantly above the previous year's level at well over EUR 5 (2021: EUR 4.59). Due to the significantly improved monetization, the Management Board expects to achieve an Adjusted EBITDA margin on prior-years level for the full year 2022.