Despite a challenging market environment, Smartbroker Holding AG (until the change of name wallstreet:online AG, ISIN: DE000A2GS609, FSE: SB1) can look back on the second-best financial result in the company’s history, as can be seen from the preliminary, unaudited figures for the 2022 financial year published today. Accordingly, the company achieved HGB sales of €52.6 million in the 2022 financial year (2021 on a comparable basis: €56.8 million) with EBITDA before customer acquisition costs of €13.1 million. Turnover from the transaction business and just over €34 million from the group’s media business.
The customer acquisition costs for the in-house online broker Smartbroker amounted to around €4 million last year, resulting in an EBITDA after customer acquisition costs of around €9 million. The figures show that the group’s focus last year was not on customer and sales growth, but on internal development work. This primarily included the realignment of the transaction business, whereby the Smartbroker should become the main profitable growth driver from 2024.
Clear focus on Smartbroker relaunch and migration of existing customers
The company had announced some time ago that it would be spending less on marketing for the Smartbroker temporarily reduced in order to facilitate the upcoming migration of existing customers to the new platform. Since the decision to transfer transaction processing and custody account management to Baader Bank, the 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 the web interface, the middleware and the connection to the Baader Bank systems. For this purpose, the in-house development teams have been strengthened. In addition, the termination agreement with the previous partner bank was finalized to ensure that the upcoming migration runs smoothly. The company expects further investments of around €6 million in the current year in order to complete the Smartbroker 2.0 project and is fully financed for this. The gross funds amounted to more than € 27 million at the end of 2022.
Even with a reduced marketing budget and under historically difficult capital market conditions, the Group managed to increase the number of securities accounts held to 267,000 by the end of 2022 (compared to 246,000 as of December 31, 2021). During the same period, assets under management grew to €9.2 billion (compared to €8.8 billion as of December 31, 2021). The situation was different with the number of transactions: As a result of the tense situation on the stock markets worldwide, trading activity fell again in the second half of 2022, resulting in around 18 trades per securities account for the full year 2022 (compared to 29 transactions in the previous year).
Media business with slight losses, but still highly profitable
The weak capital market environment led to a significant drop in page views in the media sector. However, the number of registered users could be kept stable. Due to the targeted orientation of the portals to above-average attractive groups of advertising customers, sales in this area fell only slightly. The profitability of the segment remained at the usual high level, the EBITDA for the media business amounted to almost € 15 million last year, which corresponds to an EBITDA margin of 43%. A similar margin level is also expected for the current financial year. New product initiatives, such as the introduction of fee-based market letters, have been well received by customers.
2023: Moderate sales development with temporarily inefficient cost basis
Despite a volatile market environment, the company expects sales of between EUR 51 million and EUR 56 million for the current year. The EBITDA after new customer acquisition costs is mainly due to the development of Smartbrokers 2.0 and the additional expense of the customer migration pending in the second half of the year Additional costs burdened and therefore between € 1 million and € 4 million planned. The new Smartbroker should develop its full sales potential from the coming year, as the migration of existing customers will be completed in the second half of 2023. Therefore, the new customer acquisition costs in the current year should be kept low at around € 2 million. Due to the migration, a one-off reduction in the number of customers is also expected, which will probably not be fully offset by new customer acquisition activities in the current year. It is planned to significantly ramp up new customer acquisition activities from 2024 and to build on the successes of 2019-2021.
André Kolbinger, founder and CEO of Smartbroker Holding AG, on the figures presented today: “We consider 2023 to be the last year of transition before Smartbroker 2.0 will contribute to sales growth throughout the year from 2024 and also to a significant extent to the profitability of the group. We are currently maintaining two systems – the well-known Smartbroker platform on the one hand and Smartbroker 2.0, which is currently being developed, including the apps and product extensions, on the other. This parallelism and the extensive investments will temporarily lead to an increased cost base as well as to a negative cash flow in 2022 and for the last time in 2023. However, we are firmly assuming a punctual relaunch and a subsequent normalization of the cost structure. It is important for me to emphasize that Smartbroker 2.0 is fully funded. We are very confident about the development in the coming months and are already looking forward to presenting the new product to our customers in the summer.”
About the Smartbroker Group:
Among other things, the Smartbroker Group operates Smartbroker – a multi-award-winning next-generation broker that is the only provider in Germany to combine the extensive product range of classic brokers with the extremely favorable conditions of neo-brokers. The portfolio also includes the digital fund broker FondsDISCOUNT.de, while the group also operates four high-coverage stock exchange portals (wallstreet-online.de, boersenNews.de, FinanzNachrichten.de and ARIVA.de). With several hundred million monthly page views, the group is by far the largest publisher-independent financial portal operator in German-speaking countries and maintains the largest financial community.