REVENUE

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The Group has three revenue-generating segments:

  • financial market,
  • commodity market,
  • other revenues.

Revenues from the financial market include revenues from:

  • trading;
  • listing;
  • information services.

Trading revenue includes fees paid by market participants in respect of:

  • transactions on markets of equities and equity-related instruments;
  • transactions in derivative financial instruments;
  • transactions in debt instruments;
  • transactions in other cash market instruments;
  • other fees paid by market participants.

Revenues from transactions in equities and equity-related securities are the Group’s main source of trading revenues and its main source of sales revenues in general.

Revenues from transactions in derivative financial instruments are the second biggest source of trading revenues on the financial market. Transactions in WIG20 index futures account for the majority of revenues from transactions in derivatives.

Revenues from other fees paid by market participants include mainly fees for services providing access to and use of the trading system.

Revenues from transactions in debt instruments are the third largest source of trading revenues on the financial market. Revenues from transactions in debt instruments are generated by the Catalyst market as well as the Treasury BondSpot Poland market operated by BondSpot S.A., a subsidiary of GPW.

Revenues from transactions in other cash market instruments include fees for trading in structured products, investment certificates, warrants and ETF (Exchange Traded Fund) units.

Listing revenues include two elements:

  • one-off fees paid for introduction of shares and other instruments to trading on the exchange;
  • periodic listing fees.

Revenues from information services mainly include fees paid by data vendors for real-time market data as well as historical and statistical data. Real-time data fees include fixed annual fees and monthly fees based on the data vendor’s number of subscribers and the scope of data feeds used by a subscriber.

Revenues of the Group in the commodity market segment include revenues of POLPX and IRGiT as well as revenues of InfoEngine from its activity as a trade operator, the entity responsible for balancing, and the operation of the OTC commodity platform.

Revenue on the commodity market includes the following:

  • trading,
  • operation of the Register of Certificates of Origin,
  • clearing.

Trading revenue on the commodity market includes:

  • revenue from trading in electricity (spot and forward),
  • revenue from trading in natural gas (spot and forward),
  • revenue from trading in property rights (spot and forward),
  • other fees paid by market participants (members).

Other fees paid by market participants include POLPX fees, including revenues from the operation of RRM and revenues from the operation of the OTC commodity platform, as well as revenues of InfoEngine as a trade operator and the entity responsible for balancing.

Revenues of the sub-segment “clearing” include revenues of the company IRGiT, which clears and settles exchange transactions concluded on POLPX, manages the resources of the clearing guarantee system and determines the amount of credits and debits of IRGiT members resulting from their transactions.

The Group’s other revenues include revenues of GPW and the POLPX Group, among others, from educational services, office space lease, and sponsorship.

The Group’s sales revenues amounted to PLN 310.9 million in 2016, a decrease of 5.2% (PLN 17.0 million) year on year.

The decrease in sales revenues year on year in 2016 was mainly driven by a decrease in revenues from the financial market segment, down by 8.0% (PLN 15.9 million). The decrease of revenues from the financial market was due to a lower value of trade, especially on the stock market, as well as reductions of fees for exchange members introduced as of 1 January 2016 to offset the change of fees for market supervision effective as of 2016. The change of the rules of financing of supervision extended the group of entities required to pay fees to the Polish Financial Supervision Authority. Furthermore, another fee reduction was implemented as of 1 November 2016 both for transaction fees on the stock market and fees for information services. The revenue from the commodity market decreased moderately by PLN 0.3 million or 0.2% year on year in 2016. The decrease in revenues from the commodity market was mainly driven by a decrease of revenues from forward transactions in energy by 38.0% or PLN 4.4 million.

The revenue of POLPX stood at PLN 83.3 million in 2016 compared to PLN 84.2 million in 2015. The revenue of IRGiT was PLN 42.4 million in 2016. The revenue of BondSpot in the periods under review stood at PLN 11.0 million and PLN 11.6 million, respectively.

The revenue of the GPW Group by segment is presented below.

Consolidated revenues of GPW Group and revenue structure in 2014 - 2016

 Year ended 31 December Change
(2016
vs
2015)
Change (%)
(2016
vs
2015)
PLN'000, %2016%2015%2016%
Financial market 184.025 59% 199.955 61% 199.962 63%  (15.930)-8,0%
Trading revenue 119.07938% 136.94842% 137.79543%  (17.869)-13,0%
Equities and equity-related instruments 89.52029% 107.94133% 105.29533%  (18.421)-17,1%
Derivative instruments 12.2024% 11.5784% 14.8215%  6245,4%
Other fees paid by market participants 6.8362% 6.3832% 5.7952%  4537,1%
Debt instruments 10.1113% 10.6693% 11.6214%  (558)-5,2%
Other cash instruments 4100% 3760% 2630%  348,9%
Listing revenue 23.9308% 24.4977% 23.9608%  (567)-2,3%
Listing fees 19.9186% 19.2296% 19.0496%  6893,6%
Introduction fees, other fees 4.0121% 5.2682% 4.9112%  (1.256)-23,8%
Information services 41.01613% 38.51012% 38.20712%  2.5066,5%
Real-time information 38.26012% 36.06911% 36.01011%  2.1916,1%
Indices and historical and statistical information 2.7561% 2.4411% 2.1971%  31512,9%
Other revenue -  0% -    -  0%   
Commodity market 124.927 40% 125.193 38% 114.453 36%  (266)-0,2%
Trading revenue 60.85720% 62.55219% 60.12119%  (1.695)-2,7%
Electricity 10.1913% 14.3904% 14.4555%  (4.199)-29,2%
Spot 2.9761% 2.7601% 2.3861%  2167,8%
Forward 7.2152% 11.6304% 12.0694%  (4.415)-38,0%
Gas 9.2353% 8.3113% 7.3852%  92411,1%
Spot 2.6551% 1.6010% 6590%  1.05465,8%
Forward 6.5802% 6.7102% 6.7262%  (130)-1,9%
Property rights in certificates of origin 32.00310% 32.36910% 31.00310%  (366)-1,1%
Other fees paid by market participants 9.4283% 7.4812% 7.2782%  1.94726,0%
Register of certificates of origin 24.9078% 24.1667% 22.4737%  7413,1%
Clearing 39.16313% 38.47512% 31.85910%  6881,8%
Other revenue -  0% -    -  0%   
Other revenue * 1.910 1% 2.743 1% 3.146 1%  (833)-30,4%
Total 310.862 100% 327.890 100% 317.561 100%  (17.028)-5,2%

Source: Consolidated Financial Statements, Company

The Group earns revenue both from domestic and foreign clients. The table below presents revenue by geographic segment.

Consolidated revenues of GPW Group by geographical segment in 2014 - 2016

 Year ended 31 DecemberChange (2016 vs 2015)Change (%) (2016 vs
2015)
PLN'000, %2016%2015%2014%
Revenue from foreign customers 71.91723% 73.30822% 66.27021% (1.391)-1,9%
Revenue from local customers 238.94577% 254.58278% 251.29179% (15.637)-6,1%
Total 310.862 100% 327.890 100% 317.561 100% (17.028)-5,2%

Source: Consolidated Financial Statements, Company

The average EUR/PLN exchange rate was 4.36 EUR/PLN in 2016, 4.18 EUR/PLN in 2015, and 4.19 EUR/PLN in 2014.

The Group is not dependent on any single client as no client has a share exceeding 10% of the total sales revenue.

FINANCIAL MARKET

TRADING

The revenues of the Group from trading on the financial market stood at PLN 119.1 million in the year ended on 31 December 2016 compared to PLN 136.9 million in 2015.

The share of trading revenue in the total revenue on the financial market was 64.7% in 2016 compared to 68.5% in 2015. The biggest share in trading revenue (85.4%) is that of the revenue on the Main Market, which stood at PLN 101.3 million in 2016 (a decrease of 17.3 million year on year). The remaining share in revenue is that of Treasury BondSpot Poland, NewConnect and Catalyst.

Equities and equity-related instruments

Revenues of the Group from trading in equities and equity-related instruments amounted to PLN 89.5 million in 2016 compared to PLN 107.9 million in 2015.

The value of trading in equities on the Main Market decreased by 10.2%, including a decrease of trading on the electronic order book by 6.9% and a decrease of the value of block trades by 41.2%; as a result, the trading revenue decreased by 17.1% year on year in 2016. The decrease in revenue from trading in equities and equity-related instruments was greater that the decrease in the value of trading due to the reductions of transaction fees introduced on 1 January 2016 and in November 2016. In addition, the share of HVP/HVF programme participants, who pay lower fees, in the total value of trading in equities increased (to 10.2%) in 2016.

The reduction of transaction fees in 2016 followed changes to the system of financing of supervision over the capital market. As of 1 January 2016, GPW reduced the transaction fees on trade in shares, rights to shares and ETF units in the part charged on the value of an order up to PLN 100 thousand from 0.033% to 0.029% in order to share savings resulting from changes of fees paid to the Polish Financial Supervision Authority with active market participants. In November 2016, GPW introduced another fee reduction: the fixed fee on an order was reduced from PLN 0.20 to PLN 0.15.

Data for the markets in equities and equity-related instruments

 Year ended 31 DecemberChange 2016 vs 2015)Change (%) (2016
vs 2015)
 201620152014
Financial market, trading revenue:
equities and equity-related instruments (PLN million)
 89,5  107,9  105,3  (18,4)-17,1%
Main Market:     
Value of trading (PLN billion) 202,3 225,3 232,9 (23,0)-10,2%
Volume of trading (billions of shares) 14,0 16,5 19,5 (2,5)-15,1%
NewConnect:     
Value of trading (PLN billion) 1,4 1,9 1,4 (0,6)-30,2%
Volume of trading (billions of shares) 3,5 3,8 2,7 (0,3)-6,8%

Source: Company

Derivatives

Revenues of the Group from transactions in derivatives on the financial market amounted to PLN 12.2 million in 2016 compared to PLN 11.6 million in 2015.

The increase in revenues from transactions in derivatives year on year in 2016 was driven mainly by an increase in the volume of trading in WIG20 futures (by 5.4%). The total volume of trade in futures decreased by 2.8% in 2016, mainly driven by a decrease in the volume of trade in FX futures and options.

Data for the derivatives market

 Year ended 31 DecemberChange (2016 vs 2015)Change (%) (2016 vs 2015)
 201620152014
      
Financial market, trading revenue:
derivatives (PLN million)
 12,2  11,6  14,8  0,6 5,4%
Volume of trading in derivatives (millions of contracts): 8,0 8,2 9,5 (0,2)-2,8%
incl.: Volume of trading in WIG20 futures (millions of contracts) 4,7 4,4 6,0 0,25,4%

Source: Company

Other fees paid by market participants

Revenues of the Group from other fees paid by market participants stood at PLN 6.8 million in 2016 compared to PLN 6.4 million in 2015. The fees mainly include fees for access to the trading system (among others, licence fees, connection fees and maintenance fees) as well as fees for use of the system.

Debt instruments

Revenues of the Group from transactions in debt instruments stood at PLN 10.1 million in 2016 compared to PLN 10.7 million in 2015. The majority of the Group’s revenues (PLN 9.3 million) from the debt instruments segment is generated by Treasury BondSpot Poland (TBSP).

The moderate decrease of the revenues year on year in 2016 was a result of lower revenues on TBSP. The lower revenues were driven by a lower value of transactions in 2016, especially conditional transactions. The total value of transactions on TBSP was PLN 412.8 billion in 2016 compared to PLN 599.4 billion in 2015, representing a decrease of 31.1%. The decrease of the revenue on TBSP was not as marked and stood at 6.1% year on year in 2016. This was because the decrease in the value of trade mainly affected conditional transactions. The value of conditional transactions was PLN 158.3 billion in 2016 compared to PLN 338.7 billion in 2015 (a decrease of 53.3%). The value of cash transactions was PLN 254.5 billion in 2016 compared to PLN 260.7 billion in 2015, a decrease of 2.4%. The value of cash transactions is decisive to the revenue level. In addition, the trading revenue on TBSP is driven among others by the structure of fees on the market and does not reflect directly changes in the value of trading.

The decrease in the value of trade on TBSP was due to lower activity of domestic and foreign investors on the market in Treasury securities in 2016. The activity of participants of the Treasury securities market, especially repo trade, was directly impacted by the introduction of a tax on bank assets effective as of the beginning of February 2016. Given the structure of the tax combined with a large overliquidity of the banking industry, banks were disinterested in repo and sell/buy back transactions so their value in the interbank segment including TBSP dropped considerably. The key events which impacted the international financial markets and indirectly also the local market included the outcome of the UK vote in the referendum on leaving the UE (Brexit) and the outcome of the US Presidential election. The prices of Polish bonds were also driven by local factors including the end of several months of deflation and the resulting increased expectations of a future change in the monetary policy, S&P’s downgrade of Poland’s credit rating, and plans of future changes in the pension fund system.

The value of trading on Catalyst increased by 12.2% year on year in 2016. Revenues from Catalyst have a small share in the Group’s total revenues from transactions in debt instruments.

Data for the debt instruments market

 Year ended 31 DecemberChange (2016 vs 2015)Change (%) (2016 vs 2015)
 201620152014
Financial market, trading revenue:
debt instruments (PLN million)
 10,1  10,7  11,6  (0,6)-5,2%
Catalyst:     
Value of trading (PLN billion) 3,1 2,5 3,1 0,624,2%
incl.: Value of trading in non-Treasury instruments (PLN billion) 2,1 1,9 2,5 0,212,2%
Treasury BondSpot Poland, value of trading:     
Conditional transactions (PLN billion) 158,3 338,7 439,2 (180,4)-53,3%
Cash transactions (PLN billion) 254,5 260,7 327,5 (6,2)-2,4%

Source: Company

Other cash market instruments

Revenues from transactions in other cash market instruments amounted to PLN 410 thousand in 2016 compared to PLN 376 thousand in 2015. The revenues include fees for trading in structured products, investment certificates, ETF units and warrants.

LISTING

Listing revenues of the Group on the financial market amounted to PLN 23.9 million in 2016 compared to PLN 24.5 million in 2015.

Revenues from listing fees amounted to PLN 19.9 million in 2016 compared to PLN 19.2 million in 2015. The main driver of revenues from listing fees is the number of issuers listed on the GPW markets and their capitalisation at the previous year’s end. The revenues from listing fees increased year on year in 2016. A year-on-year decrease in the capitalisation of companies listed on the Main Market at the end of 2015 did not affect the listing fees owing to the structure of changes in capitalisation and the structure of the fees (the annual listing fee is capped at PLN 70 thousand).

Revenues from fees for introduction and other fees amounted to PLN 4.0 million in 2016 compared to PLN 5.3 million in 2015. The revenues are driven mainly by the number and value of new listings on the GPW markets.

Listing revenues on the GPW Main Market decreased by 2.8% year on year in 2016 to PLN 19.6 million. The table below presents the key financial and operating figures for the Main Market.

Data for the GPW Main Market

 Year ended 31 DecemberChange (2016
vs
2015)
Change (%)
(2016
vs
2015)
 201620152014
Main Market     
Listing revenue (PLN million)19,620,220,1 (0,6)-2,8%
Total capitalisation of listed companies (PLN billion)1.115,71.082,91.253,0 32,93,0%
including: Capitalisation of listed domestic companies557,1516,8591,2 40,37,8%
including: Capitalisation of listed foreign companies558,6566,1661,8 (7,5)-1,3%
Total number of listed companies487487471 -  0,0%
including: Number of listed domestic companies434433420 1,00,2%
including: Number of listed foreign companies535451 (1,0)-1,9%
Value of offerings (IPO and SPO) (PLN billion)*4,944,84,6 (39,9)-89,0%
Number of new listings (in the period)193028 (11,0)-36,7%
Capitalisation of new listings (PLN billion)5,65,25,7 0,48,3%
Number of delistings19148 5,035,7%
Capitalisation of delistings** (PLN billion)7,311,13,5 (3,9)-34,8%

* including SPOs of Santander Bank at PLN 33.0 billion in Q1 2015

** based on market capitalisation at the time of delisting

Source: Company

Listing revenues from NewConnect were PLN 2.3 million in 2016 compared to PLN 2.4 million in 2015. The table below presents the key financial and operating figures.

Data for NewConnect

 Year ended 31 DecemberChange
(2016
vs
2015)
Change (%)
(2016
vs
2015)
 201620152014
NewConnect     
Listing revenue (PLN million)2,32,42,5 (0,1)-4,8%
Total capitalisation of listed companies (PLN billion)9,88,79,11,113,1%
including: Capitalisation of listed domestic companies9,58,48,81,112,6%
including: Capitalisation of listed foreign companies0,30,20,4 0,130,5%
Total number of listed companies406418431 (12,0)-2,9%
including: Number of listed domestic companies398408421 (10,0)-2,5%
including: Number of listed foreign companies81010 (2,0)-20,0%
Value of offerings (IPO and SPO) (PLN billion)0,20,40,4 (0,2)-52,1%
Number of new listings (in the period)161922 (3,0)-15,8%
Capitalisation of new listings (PLN billion) 0,5 0,6 0,6 (0,1)-10,2%
Number of delistings*303236 (2,0)-6,3%
Capitalisation of delistings** (PLN billion)1,31,53,1 (0,2)-12,4%

* includes companies which transferred to the Main Market

** based on market capitalisation at the time of delisting

Source: Company

Listing revenues from Catalyst increased year on year in 2016. The increase resulted from an increase in the number of listed instruments: 566 at the end of 2016 compared to 532 at the end of 2015. The table below presents the key financial and operating figures.

Data for Catalyst

 Year ended 31 DecemberChange
(2016
vs
2015)
Change (%)
(2016
vs
2015)
 201620152014
Catalyst     
Listing revenue (PLN million)2,12,01,40,15,9%
Number of issuers176192193 (16)-8,3%
Number of issued instruments566532517346,4%
including: non-Treasury instruments525496487295,8%
Value of issued instruments (PLN billion)707,4613,1544,694,315,4%
including: non-Treasury instruments81,869,664,112,217,6%

Source: Company

INFORMATION SERVICES

Revenues from information services amounted to PLN 41.0 million in 2016 compared to PLN 38.5 million in 2015. Despite a decrease in the number of data vendors, the number of subscribers did not decrease year on year in 2016. The increase in revenue was driven by an increase of the monthly subscription fee for the best 5 bids/asks paid by institutional subscribers other than exchange members as well as new agreements with clients who use GPW data in automatic trading and other applications (non-display).

Data for information services

 Year ended 31 DecemberChange
(2016
vs
2015)
Change (%)
(2016
vs
2015)
 201620152014
Catalyst     
Listing revenue (PLN million)2,12,01,40,15,9%
Number of issuers176192193 (16)-8,3%
Number of issued instruments566532517346,4%
including: non-Treasury instruments525496487295,8%
Value of issued instruments (PLN billion)707,4613,1544,694,315,4%
including: non-Treasury instruments81,869,664,112,217,6%

Source: Company

COMMODITY MARKET

Revenues on the commodity market include mainly the revenues of the POLPX Group.

Revenues of the POLPX Group are driven mainly by the volume of transactions in electricity, natural gas and property rights, the volume of certificates of origin issued and cancelled by members of the Register of Certificates of Origin, as well as revenues from clearing and settlement of transactions in exchange-traded commodities in the clearing sub-segment operated by IRGiT.

Revenues of the GPW Group on the commodity market stood at PLN 124.9 million in 2016 compared to PLN 125.2 million in 2015.

The moderate decrease of revenues on the commodity market year on year in 2016 was mainly driven by a decrease in revenues from forward transactions in electricity and from trade in property rights to certificates of origin.

TRADING

Revenues from trading on the commodity market stood at PLN 60.9 million in 2016, a decrease of PLN 1.7 million compared to PLN 62.6 million in 2015.

Trading revenues of the GPW Group on the commodity market included PLN 3.0 million of revenues from spot transactions in electricity, PLN 7.2 million of revenues from forward transactions in electricity, PLN 2.7 million of revenues from spot transactions in gas, PLN 6.6 million of revenues from forward transactions in gas, PLN 32.0 million of revenues from transactions in property rights in certificates of origin of electricity, and PLN 9.4 million of other fees paid by market participants.

The Group’s revenues from trade in electricity amounted to PLN 10.2 million in 2016 compared to PLN 14.4 million in 2015. The total volume of trading on the energy markets operated by POLPX amounted to 126.7 TWh in 2016 compared to 186.7 TWh in 2015. The volume of trade in electricity decreased mainly for forward transactions in view of the high uncertainty on the energy market and a reduction of the obligation to trade in electricity on the regulated market.

The Group’s revenues from trade in gas amounted to PLN 9.2 million in 2016 compared to PLN 8.3 million in 2015. The volume of trade in natural gas on POLPX was 114.5 TWh in 2016 compared to 106.9 TWh in 2015. The volume of trade in gas mainly increased for spot transactions.

The Group’s revenue from the operation of trading in property rights stood at PLN 32.0 million in 2016 compared to PLN 32.4 million in 2016, a decrease of PLN 0.4 million. The volume of trading in property rights stood at 50.5 TWh in 2016 compared to 59.0 TWh in 2015. The change of revenue from trading in property rights does not correspond directly to the change of trading volumes due to different fees for different types of property rights.

The volume of trade in property rights in green certificates of origin of electricity was 24.0 TWh in 2016 compared to 26.6 TWh in 2015. The revenue from trade in property rights in green certificates of origin of electricity (PMOZE) represented 66.8% and 76.3%, respectively, of the Group’s total revenue from trade in property rights in the periods under review. The share of other instruments, in particular red certificates (PMEC) and yellow certificates (PMGM), increased to 12.2% and 11.4%, respectively, of the revenue from trade in property rights in 2016 (9.0% and 9.8%, respectively, in 2015).

Revenues of the Group from other fees paid by commodity market participants amounted to PLN 9.4 million in 2016 compared to PLN 7.5 million in 2015, an increase of 26.0% (PLN 1.9 million). Other fees paid by commodity market participants included fees paid by POLPX market participants and revenues of InfoEngine from the activity of trade operator.

Other fees paid by market participants are driven mainly by revenues from fixed market participation fees, fees for cancellation of transactions, fees for position transfers, fees for trade reporting in the RRM (Registered Reporting Mechanism), fees for access to the system, and fees for management of the resources of the guarantee fund. Other fees paid by market participants depend mainly on the activity of IRGiT Members, in particular the number of transactions, the number of new clients of brokerage houses, and the number of new users accessing the clearing system.

The sharp increase of the Group’s revenue from other fees paid by commodity market participants in 2016 was driven by fees for RRM trade reporting services.

Data for the commodity market

 Year ended 31 DecemberChange
(2016
vs
2015)
Change (%)
(2016
vs
2015)
 201620152014
Commodity market - trading revenue (PLN million)60,962,660,1 (1,7)-2,7%
Volume of trading in electricity     
Spot transactions (TWh)27,625,123,82,59,9%
Forward transactions (TWh)99,0161,6163,0 (62,5)-38,7%
Volume of trading in gas     
Spot transactions (TWh)24,613,96,6 10,776,6%
Forward transactions (TWh)89,992,9105,1 (3,1)-3,3%
Volume of trading in property rights (TGE) (TWh)50,559,036,0 (8,5)-14,4%

Source: Company

REGISTER OF CERTIFICATES OF ORIGIN

Revenues from the operation of the Register of Certificates of Origin amounted to PLN 24.9 million in 2016 compared to PLN 24.2 million in 2015. Despite a large increase in cancelled property rights (by 92.4%), the revenues increased moderately year on year in 2016 as a result of a decrease in the volume of issued property rights (by 6.1%), which have the biggest impact on revenue due to a higher fee.

Data for the Register of Certificates of Origin

 Year ended 31 DecemberChange
(2016
vs
2015)
Change (%)
(2016
vs
2015)
 201620152014
Commodity market - revenue from operation of the Register of Certificates of Origin of electricity (PLN million)24,924,222,5 0,7 3,1%
Issued property rights (TWh)47,750,942,2 (3,1)-6,1%
Cancelled property rights (TWh)43,022,320,620,692,4%

Source: Company

CLEARING

The Group earns revenue from the clearing activities of IRGiT, which is a subsidiary of POLPX. The revenue stood at PLN 39.2 million in 2016 compared to PLN 38.5 million in 2015. The increase in the revenue was driven by increased volumes of trade on the gas market year on year in 2016 as well as promotional reduced fees on the gas market effective until mid-2015.

OTHER REVENUES

The Group’s other revenues amounted to PLN 1.9 million in 2016 compared to PLN 2.7 million in 2015. The Group’s other revenues include revenues from educational and PR services, office space lease, and sponsorship.