flatexDEGIRO AG

call with respect to our half year figures 2021 and not strategy day and this wasn't spelling effect it's great to have you on board I hope you're all doing well and we'd like to make use of the next 60 minutes to give you further insights to our press release and the preliminaries that we have published this morning After the presentation, you will have the chance, so the analysts will have the chance to raise questions and we are more than happy to answer them. Yeah, let's jump into the presentation and to the results of the first half year. It has been the best half year ever in our history. We are perfectly in line to deliver what we have promised for this year. We had record numbers for new customers reaching at the end of June 1.75 million customers. If you keep in mind, our guidance for this year was 2 to 2.2 million clients at the end of the year. So we are very well on track to meet this target. The transactions settled were close to 53 million, which is also absolutely in the range of the guidance that we as a management gave to the market reaching 90 to 110 million transactions and a significant increase in both the adjusted EBITDA margin as well as revenues, with revenues of 226 million euros and an adjusted EBITDA margin of 48%. We'll come to the financials in a second as well. We have managed to continue our outperformance of all major peers in the first half, as already we have achieved in the first quarter and a half performance of the three largest peers in Europe, Avanza, Nordnet and Fineco. We also managed again over the whole first half, so also in the second quarter, to reach a great performance. We grew in terms of clients as much as they three peers did together, which actually is evidence for our strategy, which is driven mainly obviously by our great European footprint. And having in mind that the first half year was characterized by still a lot of corporate actions on the group level with the merger of the FIRO, with the introduction of a new management with the FIRO, with the implementation of further synergies, we are absolutely satisfied and thankful to our people for this great work that resulted in these record figures in total. And with respect to the major events that we had, as I said, not only the finalization of the merger of Defero and Flatex Bank to Flatex Defero Bank AG, but also launches of various numbers of products and services, including first and foremost, the ETF and saving plans at zero fees. We have improved massively and are continuously improving with respect to ESG. We've been now just recently analyzed and rated and have managed to be rated on the top 10 of our peers with respect to our ESG setup. With respect to the further products and services, the main point is obviously to mention the introduction of early and late trading all over Europe that we have announced, which will, by the way, go live next Monday to all our 1.7 million clients. as well as the introduction of the European ETP partnerships, which are expected to go live in the third quarter. Another point that we would like to mention is the AGM that we have done successfully and that also supported us in the voting for the stock split that should also happen during this quarter. This as an intro, let's go into facts and figures. I mentioned a rapidly outgrowing structure and strategy. We've managed to grow in the first half year our client base by more than 40% to 1.75 million clients. We always said that this is for us with respect to our long-term vision and long-term mission, the first and most important metrics. It is customer growth, and it is transaction settled. We know that on the way there, there will be quarters that will be awesome. There will be quarters that might be weaker, and especially given the business model that we are all having, which depends very much on seasonality, and we will show you in a second also the seasonality structures. We truly believe that with an increasing number of clients and the sustainable trading activity over the next five years, we will manage to reach our long-term vision or mid-term vision, the vision 2026, and we'll manage to translate this commercial success in even stronger financial KPIs over the next years. If we have a look on our outgrowth over the last 18 months, you see that in each and every single month of the last 18, we managed to outperform our peers. And again, this is for us the pure evidence that we are going exactly the right direction, that we have implemented and are implementing exactly the right measures to continue this growth path. And what we also see is that obviously certain movements in the market will support us sustainably to outgrow our peers. Especially to mention is that this outperformance has nothing to do with fortune. It has also nothing to do with that we are doing things better or that we are smarter. It has to do with our clear strategy to be a pan-European player and a pan-European European player that has a unique European footprint. So that is the reason for our success. And rest assured, we are currently investing also into the future growth. We will continuously invest into our future growth. I've always highlighted that we will not judge our business on a financially quarterly basis. We are having a very clear ambition with respect to our growth story, and this is what we are absolutely going for. The seasonal patterns that I mentioned obviously impact short-term development, and in both in number of trades as well as in number of customer growth. Q2 has always been the weakest quarter. And I was quite surprised about the recent weeks when competitors and peers published figures. There was so much discussion about the weak Q2, where I have to say, this is a seasonal pattern that we are seeing for decades. Now, we have just gave you the numbers 216 to 290 that show very impressively how significantly weak usually Q2 is. And this is why we are absolutely not surprised about the fact that Q2 was weaker than Q1. Q1 is usually the strongest quarter together with Q4, especially or also given that we have in Q2, especially in Europe, a lot of bank holidays and vacations that result in slower growth, both in terms of clients as well as in transactions. So again, we were absolutely not Surprised by by the fact and the results if we were we were positively surprised about the results of h1 given the recent Growth speed and additional expenses that we have over the recent months and quarters As I said the very important point is to translate and commercial success, commercial KPIs, also into financial success and financial KPIs. We have reached, in H1 2021, our all-time record in EBITDA margin with almost 48%. Coming from the recent quarters, somewhere around the high 40s, but we never made it to 48%. Yes, we were also here expecting a slightly higher margin, but we're very well aware of the fact that there are one-off and one-off expenses. As I said, we had a lot of corporate structural changes in the company over the first six months of the year that we have digested. And we were discussing to make an adjustment to EBITDA, but we always promised that the adjustment to EBITDA will be very straightforward, will always be only related to the long-term incentive plan, and any one-time one-off personnel expenses. This is why we have not adjusted any other items, but I'm happy to explain in detail what other costs were involved during H1 that we don't expect in the future. The first one, and one with the highest impact, was that we have grown the employee base with all in all roughly 100 more employees since or over the last six months. This has to do obviously with the growth, the massive growth that we have achieved. As you remember, I always said per 10,000 clients, we need something around one, two people, additional people. So we did in total more than 500,000. So 50 times the two people ends up with 100,000. additional employees. This is what we were expecting and what we were facing. And thus, these things, these type of costs were not adjusted for because they are sustainable and will continue, but will have a big effect, a big positive effect on the profitability going with the economies of scale. We're continuously also winning the right class. And you all know this discussion about, okay, it's important to win a large number of clients, but more important is to win the right quality. If you see what type of clients we have won over the last six months, you see that we are facing exactly and targeting exactly what we are preaching. The first and most interesting point is that we managed to increase winning more and more female savers and investors. So the share increased from 13% to 17%, which is a strong figure for us, especially because it's one of the most underserved demographic in the European market of female savers and investors. Given the fact that 50% of the population, even more, is female, this is something that the market lacks of. and where we will continue to focus on targeting these young professional ladies, young professional women in a mature profile that also become more and more financially independent and are finding themselves in a situation where they have to decide where to invest long-term to end up with us. But you see it also with the assets under custody. With 40 billion euros assets under custody, we have roughly 25,000 euros per client sitting with us in cash and in securities. If you compare this to many, many, many other brokers, especially the big, big discussions about NIO brokers, you will see that we are carrying three, four, five times of what these players are carrying. And this is a very, very important metric with respect to sustainability. The bigger the account sizes, the more sticky the clients are. And I usually said that new brokers are great for us because they create awareness for the market and tend to act as incubators for the more, let's say, affluent brokerage clients. And this is what you have seen also with many of the brokers. I think it was included also within the Robinhood IPO papers that most of the clients, most of the churn is churned with high accounts, with big accounts. And this is exactly what happens. People used to start maybe with these neo-brokers, end up to develop themselves, their accounts get bigger and bigger, And then they find themselves in a limited environment. So they have to do this additional step to go for further products or further services and end up then with brokers like FlexX DeFiro. So we are happy to continue our path to win clients in the right sector with the right demographic average. This is what you see on the right-hand side. As I said, AUCs of roughly 23,000 euros, annualized trades of 71. 70% of the population that we won was in the sweet spot that we have given to ourselves, 25 to 55. Almost 60% with previous experience in brokerage, as well as higher education. And this is also what you see, what we have amongst the most named professions. I touched this point, what expenses did we have that we did not adjust for, but that we actually have digested through the P&L. I started with the operational personnel expenses, yes, mostly coming from the consolidation. On top of that, we increased the FTE number by slightly above 100, given the strong growth that we had and that we expect over the future. and additional top hires as well to continue developing the stability, the compliance, the fast execution in our systems and in our growth. This ends also up that we grew in areas like marketing where we will continue to focus on given the fact that we are aiming for four, five, six core markets additional to our domestic markets that we have to play and that we will play over the next six months very, very significantly. However, the growth was very cost sensitive. So the average personnel expenses did not increase in general. It's still very moderate. at below 40,000 euros per FTE in average. So you see we are growing, but we are not growing with high expensive people. But as I always said, especially in the area of service and customer support levels where costs per se are usually lower than on the high end with IT people or risk people, where we have had only super moderate growth that is not really reflected in the figures themselves. On top of the personnel expenses, we had some one-off other admin costs, not only coming from the consolidation, but especially from the corporate structural changes that we had in the first half. So all in all, we were at roughly around 3 million euros in other administrative expenses. resulting from mainly the consulting for the merger process that we have between DeGiro and FlatEx Bank, as well as to a certain extent provisions for potential claims coming from the federal court decision with respect to historic changes in pricing, et cetera, which is Yeah, relatively low. All in all, all these one-offs were roughly 3 million euros. On top of that, we spent almost 10 million euros more in marketing with massive client acquisition costs. We brought it down to less than 35 euros, which I would say show how great our marketing team is operating. and that the marketing strategy is absolutely the right way to continue with and that will support us in the massive growth during the future quarters and half years. Coming down from more than 100 euro client acquisition, so savings of more than 60, 70% down to 35 euros is exactly where we want to go to. Our internal guidance was always below 50 euros. First half was below 35 euros. Shows what excellent job the colleagues are doing and where we are heading to. And yes, we will continue this growth, as I said, especially by implementing additional services and products during the next month, as well as increasing marketing campaigns with an ongoing... low CAC view in all European countries, especially with the Tradegate introduction now, we will start a big European campaign that will support the growth during the second half. And despite all the high growth investments, we managed to increase the profitability. I think this is something that we have all together keep in mind. We are an absolute growth company. So if we would rest on our laurels and would say, okay, we don't want to spend any more that big marketing, saving 17 million Euro in marketing would result in a 70 cent EPS growth, which is absurd because we have a growth case and not a value case. So those are the things why, again, we will not continue to focus on quarter by quarter financials. We have a very clear long-term vision. The long-term vision is driven by customer growth and by customer activity, both on a very moderate and very reasonable expectation. And on that way, there will be in some quarters higher marketing spends and other quarters lower marketing spends. So again, the long-term vision on the EBITDA margin is a 50% plus on the shorter end. On the longer end, it's a 60%. plus EBITDA margin expectation. Last but not least, between EBITDA and the EBT, we had as well increasing depreciation and amortization. This results from, here again, one-off write-offs on intangibles that we don't use anymore and other adjustments that we digested via the P&L, often total two and a half. million euros that are sitting in the DNA that we will not see over the future anymore. Per se, the DNA increased. Obviously, it increased because we have the first-time adaption of amortization on identified intangibles out of the deferral purchase price allocation that kicked in now the first time for full six months, and thus has also an impact on the P&L results. With respect to the LTI, the long-term incentive provisions that are mainly determining the adjustment of the EBITDA, the LTIP that is based on a stock appreciation rights program, as you know, is based on stock price development, 50%, and 50% on the EPS guidance and EPS growth, the expected one that we apply in our evaluation models. The growth in this item results obviously out of the growth in the stock price coming from 62 euros end of the year that was used to value the model up to 117 as of June 30th or June 29th. This stock price growth is reflected in the higher provisions obviously as well as The change consensus for 2023, when the plan starts to become exercisable, and since the plan is depending 50% on the EPS growth, you can see that we have provisions to build the model based on relatively high EPS expectation, since we are convinced that we are going exactly that way with respect to the EPS. All in all, roughly two-thirds of the provisions have already been built based on the fair value as of June 30th, as I said, based on a stock price of roughly €117 and to condense with EPS for 2023 of more than €6. We are continuously highly convicted to reach our full-year guidance. If we would just continue as we did in the first half, we would end up with respect to number of clients in our guidance at the upper top of the guidance even. And we are very convinced that we will continue the strong growth that will ensure that we will meet both the guidance and number of clients as well as the guidance in number of transactions. We see absolutely no reason why we should change that. It's actually the other way around, given the fact, as I said in the beginning, that Q2 is the weakest quarter, assuming for Q3 and Q4 growth quarter by quarter. We are very convicted and highly convicted that we will continue very successfully in the next half year and reach also all management guidances. Yeah. As I said, P&L is always a question of what else did we have, for what did we adjust, what did we adjust, what did we digest via the P&L? For us, one of the most important figures is that we generated in half a year more than 80 million euro of operating cash flow, which is two times what we have achieved in the first half 2020. Our net cash position increased to 180 million euros, and I think this is also something that a lot of people forget, that we are operationally debt-free. We don't have any debts, any long-term debts, nor any liabilities against banks coming from non-operational debt. So that we are also very convinced to continue this operating cash flow growth for the next years and next half years. And again here, if we would double this, we would end up with something around $170 million. $170 million in one year of operating cash flow. If you would multiply this with five, we would, so assuming that we would have no growth at all, we'd end up over the next five years with almost 850, 900 million of operating cash flow accumulated. You know very clearly what our ambition is over the next five years. And given the growth that we expect, again here, we feel highly convicted to reach our operating cash flow, the accumulated operating cash flow target over five years that we gave out of 1.5 billion plus. Seeing that this goes absolutely into the right direction, It gives us a high confidence in the steps that we entered during the last quarters. Important milestones, yeah, we touched on that, the early and late trading, the introduction and rollout of the European EPP partnerships, and new marketing campaigns with Defero and FlatEx. So these things, they will kick in now in Q3 and will generate obviously also profitability and growth in the second half and going forward. Keep in mind that we are starting now in the second half with two major synergies. The one flow synergy from which we expect the high profitability contribution will only kick in in Q3. It took a bit longer. This had to do with the merger, with the hero that we wanted to finalize first, the merger before we implemented. So four weeks later than expected, TradeGate is starting. A bit later than expected, the ETP partnerships will start. But they will both start very soon and will start to contribute additional profitability and additional growth. And this is a further point why we are absolutely convinced that Q2 was rather an exception than the rule. With H2, so in the second half rather than Q4, we will start the next trading app, Next 3.0. And as we have indicated as market leader and as an online broker, we absolutely have not only the responsibility, but also the job to educate more and more people in Europe. First, we will have a very high class documentary across Europe that we will use as well. for marketing purposes to prepare people, to give them a better understanding of the financial markets and financial investments, and to educate less experienced potential customers. Yeah, we spoke about TradeGate, the early and late trading. You see what impact it might have. This is what you see here. share of early and late trading and FlatX equity trades. So with the FlatX brand only because with DeFiro we haven't had it before. And you see like what number of trades, especially in the late trading and the early trading, we can expect in the future. This applied to more than one point-ish million clients with DeFiro gives us a very, very strong upside potential on the transaction base. that we expect to kick in then starting in the second half and then in a full year swing as of 2022. The marketing push has also been discussed and starting now also the football season again as of mid-August with Borussia Mönchengladbach and the shoots and commercial ads etc. We expect here a growing a growing number of clients compared to Q2, as well as an increasing interaction between clients and broker, so higher trades. All in all, again, we feel very, very comfortable with the next quarters, so that we can continue also with the products Flatex Next 3.0 from push to pull should exactly fit into this marketing campaign and marketing strategy of winning more and more clients, of educating more and more clients. We know that our platform so far is very robust, very stable, very good, but we still see potential to reduce the complexity of these apps and to allow clients much faster, much more direct to go into long-term savings and long-term investments, combined with the zero-fee ETF schemes, combined with TradeGate, we're absolutely on the right track. The high-cost documentary, The True Stories of Investing Powered by DeFiro, will be launched at the end of Q3, beginning of Q4, and will, as I said, be broadcasted all over Europe, mainly in our growth markets and the underdeveloped G7, So that we will have a 360 campaigning in all big countries to continue supporting us, conquering market leadership after we have reached it in France, to continue with Spain, Portugal, and Italy. Yeah, the outlook for 2026 has not changed at all. Seven to eight million transaction, sorry, seven to eight million customers, 250 to 350 transactions. Revenues of up to $1.5 billion in accumulated operating cash flow of more than $1.5 billion with adjusted EBA margins of 60% plus. Again, nothing has changed on that. Nothing has changed on the short-term guidance for this year of 2.2 million clients and 90 to 110 million transactions. Yeah, that's it from my side, giving you an overview of the latest results. I'd like to make use of the next 30 minutes to allow for questions and to deep dive maybe into one or the other question.

Dear ladies and gentlemen, we will now begin our question and answer session. If you have a question for all speakers, please dial 0 and 1 on the telephone keypad now to enter the queue. Once your name has been announced, you can ask a question. If you find your question has been answered before it's your turn to speak, you can dial 0 and 2 to cancel your question. If you are using speaker equipment today, please lift the handset before making your selection. One moment, please, for the first question. We have a first question. It's from Robert DeLuca, Goldman Sachs. The line is now open for you.

Hi, morning. Thank you for the presentation. I have a couple of questions. One is actually on a number of your reports, the revenue per transaction. Can you give us a bit of an overview of how that's developing and, I mean, if we back calculate the numbers from what you've reported today, it's below the four euro target. So we kind of want to understand how it's developing and when you think you can reach that level. And then the second question is, I hear your point on second quarter being a slower quarter every year. Can you give us a bit of a sense of what your expectations, first of all, historically, how that gap has been on a quarterly basis? And if this second quarter is significantly different from previous years, given, I guess, the high volatility of the first quarter, and then kind of a bit of a reiteration of what your expectations are for the second quarter, obviously, sorry, third quarter, obviously, having summer months, if you expect any kind of further slowdown there. Thank you.

Yeah, thanks, Roberta. The first one, revenue per transaction. Yes, we were slightly below, I think, around €3.50, €3.60 revenue per trade. We expect, in general, up to €4 per trade. This is our long-term perspective. And for sure, I mean, there are products that have not been put in place to drive these revenues per trade. First and foremost, obviously, for example, the trade gate trade, TradeGate trades will be offered to clients for a price of €3.90 flat. So this will first and foremost contribute to the growth. Plus, you know that we are running very successful ETP partnership all over Europe. And this is the partnership that we will implement as well with Dechiro that will also increase the revenue per trade giving existing and future models together with our product partners. So we will still aim and continue to aim for the four euros in average per trade. Plus what we have also to keep in mind is that in some of the European countries, we are in the markets with very, very low fees. That also helps us in the growth and the growth speed. And as we always said, It doesn't mean that we will have these fees forever like this, but now the focus is on growth. We always have to find the balance between growth and profitability, and we feel absolutely 100% happy and are super satisfied with the current balance between growth and profitability, whereas we can increase both. with an increasing number of clients. This is the first and foremost focus that we have on the short term of our vision. With respect to the later end of that vision, this might change into less maybe growth and more profitability. With respect to the second quarter, I'm not sure whether I got your question 100%. but it was a bit to put the second quarter of 2021 into a historical context. So how much better or worse was it against other quarters? I mean, the first thing is, or the first, let me put it that way. The first, from my perspective, wrong assumption is to compare it to Q1 2021, because Q1 2021 was not a normal quarter, was not a normal Q1. So we have per se a very strong Q1 and had this year a massively stronger Q1. And then there's Q2, which is, yeah, super average. So with respect to trading activity, it was for us absolutely in line with what we knew in the past and what experiences we had in the past. I mean, keep in mind, Q2 was almost, was I think as good as Q2 2020. When we were in the middle of the COVID situation and everyone was saying, oh, you're winning so many clients just because of COVID. So we managed to meet the strong quarter that we had back in 2020. Again, we had a very strong Q1. We have had a very average good Q2. But given that Q1 was so good, it seems like, oh, Q2 collapsed. Q2 was totally in line with the historic data, historic evidence. and historic expectation that we always have. So I'm absolutely, again, let me put this very clear. We are absolutely not surprised what happened in Q2. It was absolutely what we expected for Q2. Actually, we're slightly above what we expected for Q2. With respect to Q3 and Q4, again, also here, let me be very clear. I don't care about Q3 and Q4. I care about next year and the year after and the year after. We want to grow. We're a growth story that will, if people want to challenge that on a quarterly basis, I'm more than happy to do it. But we are not thinking about Q3 and whether this is currently the summer break to be fair. We are here with a long-term vision to win six, seven, eight million clients over the next five years and are seeing ourselves perfectly on track to go for that goal. And again, our guidance for this year was 2 million clients. We're already at 1.75. So there's 250,000 clients that we have to win in six months, which is super absurd for us. But again, we will not end up in this quarter-by-quarter game because we have the longer-term vision in front of us. And yes, I expect Q3 to become, as I said earlier, better than Q2. And I expect that Q4, most probably, if everything goes right in the markets and markets don't go totally crazy, will outperform Q3. This is what we know from historical data and statistical analysis and expectations. Would I put my hand for this and fire? No, I would not because markets are totally going wild every now and then. But again, nothing that surprises us as of now. We were rather surprised by a very good Q1, to be fair, than by an average Q2.

Okay, thank you. You're welcome.

Our next question is by Marius Fuhrberg, Warburg Research. The line is now also open for you.

Yeah, hi Mo. A couple of questions from my side. First one, also, you are stressing the Q3 thing, even though you don't focus on Q3 and Q4, as you pointed out, but could you give us a bit of flavor how Q3 started so far? Second one, The adjustments you made were quite significant with more than 64 million, I guess it is. Obviously, the majority of this comes from the stock-based incentive program and you cannot influence that. But my question is, do you intend to implement another stock-based compensation program in the next two to three years? The current stock-based incentive program is paid out in three to four years.

Let me start with your question with respect to Q3. No, I cannot give any update how Q3 started, again, because we are now four weeks over out of 12. I don't want to start this game of monthly updates how a quarter was, sorry, or how even a month was. The next release of data will be the quarterly release. And again, it will be good. It will be strong. It will be hopefully in what our expectation is. But again, if we would just break it down to July, it is what we expected. So up till now, no surprises at all for us. With respect to the adjustment, yes, indeed, it is a significant adjustment. No, as of today, we don't plan any new long-term incentive plans. The plan has not fully distributed out. There are still czars that we can give out to employees, although the vast majority has been given out, so that we don't expect any plans as of now for the next, I would say, two, three years.

Okay, thank you. And one follow-up, if I may. Q2 margin was fairly low, but I guess it's a result of the lower top line. Is it correct that you expect significantly better EBITDA margins in Q3 and Q4?

Keep in mind, Q2 was absolutely the quarter where we did our merger. So all this, what I said, that we digested during Q2 through the P&L will not show up anymore in Q3.

Okay, thank you. Our next question is by Charlie Main, Goldman Sachs. The line is now open for you.

Morning, Mo. Thanks for taking my question. Just one on the basis for the Vision 2026. I believe you said originally that the basis was 3,000 extra clients per calendar day. You're now aiming for 2,000 to 2,500 per calendar day for the full year 21. I was just hoping you could help us to understand where the delta lies between those two numbers.

Thanks. Charlie, again, this is the 3,000 clients per day is on the long-term vision. the velocity that we see will definitely also increase over the next years. I doubt that we will grow on a daily average this year with the speed of in three years. I believe in three years we will grow faster per day than we do today. And again, the guidance was given out the beginning of or during the first half and has nothing to do with our long-term growth. What we always said is to meet our vision 2026, we have to grow in average by 3,000 clients per day. And what we've seen in the first half is that we actually met that requirement already now, not in two, not in three, not in four years. So with an increasing number of clients, our speed of growth will also I'm 100% sure about that because you have a higher awareness, you have a higher structural targeting of markets. When we become market leader in further countries, the awareness will increase and so on and so forth. So for this year, we are not aiming for 2,000 clients or 2,200 or 2,500. We have just the clear guidance, and that would end up to say, to meet that guidance, We need whatever, 250,000 flights on give or take 100, 120 days. So we would need 2,000 clients at least in average per day over the next six months to meet our guidance. And we feel again, highly, highly, highly convicted to reach that.

Okay, thank you.

You're welcome. Our next question is by Christoph Greulich, Berenberg. The line is now open for you.

Good morning, Mo. Thanks for taking my questions. A couple of questions from my side, if I may. I would like to start and come back to the stock appreciation rights plan. Could you let us know what is the total fair value as of June? And based on your current numbers, how large will it be the charge in the H2P now?

Sorry, how big is the charge in this?

In the P&L for the second half of the year? And what is the total fair value as of the end of H1?

The total fair value was, if I'm not mistaken, preliminary 105 million euros. The total fair value of the plan based on a stock price of 180 euros and the DPS somewhere in the consensus range. And as of that, 64, 65 million have been provisioned for. So two-thirds of the plan has been provisioned for. If this continues as it is, that means if we end up with the same share price at the end of the year and no consensus change, I expect to have roughly 20% to be provisioned over the second half. So another give or take 20 million euros.

Okay, and that also means that if the share price would be lower compared to where it stood at the end of June or the EPS would move down, that it would also mean a reduction in the federal rate.

Yeah, absolutely. Absolutely. It's a very simple, straightforward option plan, which is based on the EPS and the stock price. So if the stock price decreases compared to the June 30th, on 31st of December, that means that we will build lower provisions or even might release again provisions.

Okay, that's clear. And then with regard to the customer growth, when we look at the decline between Q1 and Q2, I was just wondering, have there been any positive outliers from a regional point of view? Meaning, have there been any countries which have seen an acceleration in customer growth in the second quarter?

Compared to what, to the first quarter?

Exactly, yeah.

Good question. Let me look it up. I mean, what we did very, very well is France, where we took over the market leadership now, also in terms of a number of new clients, not only in trade. There we're progressing very well. We will look it up and Achim might come back with some information. Although we will not, again, we will not disclose figures on a country-by-country basis.

That's clear. Then you have on page four the customer growth delta to some of your main peers. I was just wondering, like, why that fluctuated so much given, I mean, the seasonal patterns should be the same for all the players in the markets. So do you see any clear reasons why the delta has been so big, let's say around Q4 last year, Q1 this year, compared to where it stood at the end of Q2?

That's a good question that unfortunately I cannot answer if I look into the figures. What we see is that the amplitude depends very much on the strength of the quarter itself, right, or month itself. So the stronger the month itself, the more we outperform our peers. This has most probably to do with the European footprint, that when we are strong in a month, per se, if markets go positive in a certain month with respect to growth, to customer growth, that we are managing to outgrow our peers. And in normal months and weaker months, we rather have a relatively stable development.

Okay, that makes sense. And then regarding the EBITDA margin, so we had this 54% in Q1. And if I remember correctly, 50% was kind of understood as the new floor level, and the trajectory was towards the 60%. So now Q2, we've fallen back below the 40% level. And I was just wondering how we should think about the margin floor level from here on and what kind of trend you see for the full year.

Nothing has changed. Absolutely nothing has changed. We'll continue with the same numbers that we had last Friday before we disclose today's figures. Our expectations have not changed at all because Q2 was absolutely what we expected. This again, I can just repeat myself. if my expectations were absolutely fulfilled, there's no reason to adjust my forward expectation. The expected values for the half year, and especially for Q2, were almost perfect in line what we have guided internally. And this is, again, why we don't see any reason to adjust our full year guidance or full year expectation. We will continue to believe that we will in 2021, be somewhere in the high 40s, around 50%, for sure. And that over the next years, we will aim step-by-step for the 60%. And again, given certain one-off effects that we digested through the P&L in H1 2021, especially in Q2 2021, to be fair, because we haven't had these figures in Q1, this seems to be lower than what others might have expected. But knowing about these costs, knowing about these structural expenses that happened in Q2, it's absolutely in line with our full year expectation as well.

Okay. And just for modeling purposes, could you give us an idea how big the DNA charge was in H1 and how much of that was acquisition related?

Which charge, sorry?

The DNA, the depreciation amortization one.

I mean, we haven't disclosed it yet because the annual report is not disclosed yet. Let's wait until the report is out, because this is, again, a couple of topics with the intangible asset depreciation democratization after the purchase price allocation of the FIRO, so I don't want to give you now any figures that might end up different in four weeks. They should not, but all in all, the one-off in the DNA itself was give or take two and a half million.

And then you also mentioned that all the synergies are not fully implemented. So what does that mean in terms of additional cost savings in the second half, which you did not yet have in the first half?

Yeah, I mean, we are a step further. I mean, with IT, I always said this is a process. This is nothing that happens today or tomorrow. But with the introduction of TradeGate, with the implementation soon to happen of PPP product partnerships, we believe that we will have then, yeah, 85%, 90% of the synergies in place. On the cost side, it means that we will continue now to release Yeah, low-hanging fruits or to harvest low-hanging fruits. This starts, obviously, with admin costs. This has also to do with personnel costs. We had a lot of changes in the personnel costs. This is also why we adjusted for this one of costs related to the merger, the change in management, the change also in the second level of people. You know about this. Ends up very often with cost. to release contracts and to release responsibilities. And this has been done to the vast majority. So this is something that we don't expect anymore for the second half either. So that it will definitely not be worse than in the first half.

And then the last question from my side, you mentioned that you will start the development of the next trading apps in the second half of this year. So what kind of development costs should we expect for that?

To be fair, as of today, I don't have a value.

In a kind of ballpark number, in what range we are?

We were not talking about a double-digit million amount, for sure not.

Okay. Great. Yeah, that's all from my side. Thanks a lot for the answers.

You're welcome. The next question is by Frederik Jaschow, Hauk & Aufholzer. The line is now open for you.

Yeah, hi, Mo. Thanks for taking my question. I just have one question, and it's also regarding the Q2 number of trades. On a year-on-year base, you were flat at flat X to zero, while the peer Avanza, for example, was up year-on-year 46%, despite the fact that you clearly outgrow Avanza in terms of number of new customers. Maybe you can give us an explanation for this weakness compared to the peer. Thank you.

To be fair, I don't know how to answer it because I haven't looked into Avanza to see why their number of trades were compared to the last Q2 better or worse. Maybe you could also say that Avanza was worse off in Q2 than FlexX Zero, so that they have increased the number of trades compared to Q2 while we were flat. No clue to be fair. Again, for us, this is what we expected. And given our data and given our expectation rate, this is what we forecasted for ourselves and met. Maybe it has to do with the fact that Avanza is rather having more stable trades due to many, many saving profiles that we don't have in that case and to that extent. especially not in Europe, but because we don't also either focus on this type of investment as of today, but rather to grow as a broker all over Europe. So that could be an explanation that they have a higher level of retained trades or that Q2 2020 with Avanza was weaker than with everyone else. Yep.

Makes sense. Thank you. You're welcome.

The next question is by Benjamin Konke, KWB. The line is now open for you.

Morning, Mo. KBW, in fact. Thanks for taking my questions. A couple of smaller ones, please. The first one relating to your credit book um no you're probably not willing to give any detailed numbers but maybe just high level comments uh as to how that developed those on the um let's say both on the retail side as well as the uh maybe non-brokerage uh loan book any sort of announce anomalies uh that we should factor in here or just a sort of normal development and in line with that just um the with regard to your it segment any sort of um

uh things we should consider there or just a very normal development as well with respect to i.t services and to be honest with you i mean it's not contributing any more to any any any pmd line so it's minor of importance nothing special happened with respect to the credit book we're still um going on with our strategy super successful No anomalies at all. No significant write-offs on any of our structural credit books. All payments are coming back in time. We managed to increase the credit book. This is something that you will also see in the detailed figures with the reports to count, that we have increased the interest income on the credit book because of obviously also consolidating the DeGiro margin book and an increasing number of clients that results also in increasing number of clients using margin loads. So all in all, we are absolutely happy with the development of the credit book.

Right. Thanks. And then just a quick follow-up. Could you just confirm what you said during the strategy day that you're still on plan to launch a crypto offer in the course of the second half of the year?

We didn't say that we will launch it. We said we are currently in a deep dive due diligence to implement cryptocurrencies. We highlighted a couple of times that the biggest issue has been the custody of cryptocurrencies. And until today, we have had not found a solution that gives us the confidence, full confidence to provide cryptos to our clients. That might change on a monthly basis because we all know that the momentum in cryptos is super high. Things change every week, things change every month. If we find a good solution, a proper solution, that does not put any risk on us as a company with respect to the custody of the client's assets. We are happy to launch it. Everything is prepared technically and commercially. And the only thing is that we have to find the regulatory solution for the custody of cryptos of our clients.

Right, right. Well, thanks. And just turning that around, your 2021 guidance then on the customer side and as well as on the trade side, does not really include any sort of crypto.

No, not at all. Crypto was never in our guidance included. We gave our guidance at a point in time where we did not discuss any crypto.

Thanks, Mo.

You're welcome.

As a reminder, if you want to ask a question, please press zero and one. There are no further questions, and so I hand back to Mr. Charur.

Yeah, thanks again for joining the call. Thanks for your questions. I hope we were able to give you a deeper insight of the results. Looking forward to the next months and quarters, as much as you do. Again, let me... close that call with these sentences. We are absolutely happy and satisfied with the work of our people, with the results we have achieved in H1. Again, it is a record H1 in our history of the company. And we are super convinced to meet all our guidances and expectations on the short term, as well as on the longer end. And yeah, looking forward to speaking to you soon. Seeing you soon. Take good care of yourself. Have a great week. And thanks for joining the call.