The GPW Group presented projects and initiatives that will stimulate the development of the Warsaw Stock Exchange, the most important trading floor in Central and Eastern Europe, over the next five years. The new strategy for 2023-2027 assumes an increase in revenues, investments in new businesses and the development of modern technologies.
In the years 2023-2027, the GPW Group plans to achieve average annual revenues of PLN 498 million and average annual EBITDA of PLN 215 million. The increase in revenues in 2027 compared to 2023 will amount to PLN 157 million, of which PLN 101 million will be allocated to new strategic initiatives. In the period covered by the strategy, the EBITDA margin will increase to 50%.
The Warsaw Stock Exchange announced its new, long-term development strategy at an exceptional time for the Polish and global capital market. The war in Ukraine, high inflation and anxiety related to the possible next economic slowdown raise many fears and doubts among both investors and issuers. However, over the last three decades, it is the WSE that has become a globally recognizable symbol of flexibility and resilience to successive crises. Created from scratch in 1991, it has now turned into the most important dance floor in this part of the continent, several times more than those in Prague, Bucharest or Vienna.
The strategy of the Warsaw Stock Exchange for 2023-2027 is based on three pillars: constant increase in turnover, investments in technological innovations and development of new business models. The latter, in the opinion of the President of the Management Board of the Warsaw Stock Exchange, Marek Dietl, are the future not only of the Polish stock exchange, but also of other developed financial markets.
“For the London Stock Exchange, the traditional stock exchange business is now only 28 percent. income. It may not be a margin, but it’s not much. Even such a traditional exchange as the New York Stock Exchange has only 58 percent. income from trading in financial instruments” – explained the CEO of the Warsaw Stock Exchange.
Marek Dietl emphasized that the need to look for new sources of income is the result of the decreasing number of issuers – a trend that has been going on in developed markets since 2005 – and the growing importance of competitive institutions for traditional stock exchanges. Currently, the share of new businesses on the Warsaw Stock Exchange is approaching 16 percent, but their development in the coming years – as emphasized by the President of the Warsaw Stock Exchange – will gain momentum.
The new strategy assumes that in the perspective of the years 2023-2027, on average, about 35 percent. of the GPW Group’s revenues will be the so-called recurring income, i.e. independent of the value of trading in financial instruments, including e.g. data sales services and regular fees from issuers. This will increase the financial security of the company and increase the predictability of its results.
“The barriers to entry to our industry have dropped significantly. We operate in a large economic zone and everyone has the right to choose an issuer for shares or bonds throughout the European Union. However, this did not prevent the Warsaw Stock Exchange from servicing many IPOs in recent years. We still maintain 15-16 percent. share in the European IPO market [debiutów giełdowych]” – said Marek Dietl.
The President of the Management Board of the Warsaw Stock Exchange also noted that the structure and size of the Polish economy and the fact that approximately 30% of of our GDP is created thanks to companies controlled by international corporations, which significantly hinders the acquisition of new issuers.
Izabela Olszewska, Member of the Management Board of the Warsaw Stock Exchange, also spoke about the challenges related to the growing competition. In her opinion, significant competition for the Warsaw Stock Exchange today are MTF (multilateral trading facility) platforms, as well as entities enabling investment, called systematic internalizers.
“In this context, we set ourselves the goal that within the horizon of the new strategy of the Warsaw Stock Exchange, our share in trading in Polish companies will be greater than 80%. We want shares of Polish companies to be traded on our Polish stock exchange” – explained Izabela Olszewska.
The member of the GPW Management Board emphasized that the new strategy for 2023-2027 assumes the expansion of the bond market for institutional investors.
“We want to create a new treasury securities market that will be complementary to the current TBSP market run by our subsidiary BondSpot. The market will include segments of both spot and conditional transactions. We want investment funds or insurance companies to have access to this market and its new functionalities.” – said Izabela Olszewska.
The key role of the new business initiatives included in the strategy was pointed out by Adam Młodkowski, Member of the Management Board of the Warsaw Stock Exchange.
“If we compare the first year of the new strategic perspective with the last year, the difference in revenues is PLN 157 million, of which as much as PLN 100 million is due to new strategic initiatives” – argued Adam Młodkowski.
He emphasized that the increase in revenues assumed in the five-year scenario is high, which proves the good condition of the Warsaw Stock Exchange and its growing potential.
“In the period covered by the strategy, i.e. in the years 2023-2027, the average annual revenues will reach almost half a billion zlotys. This is a very significant increase compared to the previous strategic perspective, because at that time we had PLN 377 million. It is clear that the company is growing” – explained Adam Młodkowski.
The new strategy of the WSE also assumes the implementation of a number of optimization initiatives aimed at improving operational efficiency. In 2023-2027, the GPW Group will continue to transform its operating model to gradually increase cost efficiency.
In the opinion of Monika Gorgoń, Member of the Management Board of the Warsaw Stock Exchange, issues related to communication – both inside and outside the company – are an important element of the new strategy.
“We are creating a knowledge exchange forum. We want to meet all market participants to exchange experiences, educate each other and thus influence the better development of the capital market.” – convinced Monika Gorgoń.
The member of the management board emphasized that in the new strategy the stock exchange plans to support a lot in the area of ESG (environmental, social and corporate governance).
“This is a global trend that will continue to grow. ESG regulations are becoming very demanding for public companies. This is good for investors, because such reports will provide a great deal of knowledge about companies that care about sustainable development. Issuers will be required to make efforts to implement such regulations so that the reports meet the standards. – said Monika Gorgoń.
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