Smartbroker Holding AG (until the change of name wallstreet:online AG, ISIN: DE000A2GS609, FSE: SB1), one of the leading online broker operators in terms of customer assets under management and by far the largest financial portal operator independent of a publisher in the German-speaking region, today published the audited business figures for 2022 and thus confirmed the preliminary figures communicated on March 15, 2023.
Despite a challenging market environment, the Smartbroker Group achieved important interim goals on the way to the relaunch of its online broker Smartbroker. Even with a reduced marketing budget, it was possible to increase the number of custody accounts to 267,000 and the amount of customer assets under management by 0.3 billion to €9.2 billion.
Media business remains the sub-area with the highest turnover, but transaction business is catching up
Sales according to HGB were €52.8 million (€56.8 million on a comparable basis in 2021[1]). The transaction business, for which Smartbroker is by far the largest source of revenue, contributed almost €19 million to group revenue. The media business remained the sub-area with the highest sales. The four stock exchange portals generated sales of around €34 million and EBITDA of around €15 million, which corresponds to a margin of 43%. Group-wide, EBITDA after customer acquisition costs was €8.8 million (€4.4 million in the previous year). This corresponds to an increase of 99%. Customer acquisition costs totaled €4.0 million in 2022, meaning that EBITDA before customer acquisition costs was €12.8 million (preliminary: €13.1 million). The annual result was primarily burdened by extraordinary depreciation in the SMARTBROKER+ project[2] in the amount of almost € 13 million[3] Nevertheless, the balance sheet at the end of 2022 was still very conservative with an equity ratio of 67% and a cash balance of more than € 27 million.
Strengthening the revenue side through diversification and new product launches
After a good first quarter of 2022, the Smartbroker Group was confronted with a decline in trading activities from private investors and a reduction in the available advertising budgets as the year progressed. For example, the number of trades per portfolio fell from 29 in 2021 to 18 in 2022 (-38%). At the same time, the number of page calls on the exchange portals fell by more than 30% (2.6 billion in 2022). The management cites the ongoing war in Ukraine, the uncertainty on the markets, the reluctance of shareholders, rising inflation and the economic aftermath of the corona pandemic as the causes.
Nevertheless, the company managed to maintain profitability in the media business thanks to a targeted orientation and thus to generate the necessary investments for the expansion of the transaction business from its own resources.
In order to strengthen and diversify the revenue side, the Smartbroker Group introduced a range of premium content and invested in setting up its own video editorial team. In the same period, several market letters were also launched. At the same time, new employees were hired – especially in the areas of product and development. In 2021, an average of around 196 specialists worked for the Smartbroker Group, in 2022 it was 239 (+22%).
Partnership with Baader Bank creates the basis for a timely launch of SMARTBROKER+
With a view to the launch of SMARTBROKER+, the company concluded a cooperation agreement with Baader Bank in November 2022, which will act as custodian bank and transaction processor in the future. In addition, the squeeze-out procedure to achieve a 100% stake in the Smartbroker operating company Smartbroker AG (formerly wallstreet:online capital AG) was successfully completed. The same applies to the change of name from wallstreet:online AG to Smartbroker Holding AG and wallstreet:online capital AG to Smartbroker AG.
Stock exchange portals and SMARTBROKER+ are more closely interlinked
For the current year, the Smartbroker Group expects sales of between €51 million and €56 million. Operating EBITDA after customer acquisition costs is expected to be between €1 million and €4 million. In terms of content, the focus is on the market launch of SMARTBROKER+ and the subsequent move of existing Smartbroker customers to the new platform. The Management Board of Smartbroker Holding AG therefore regards 2023 as another, final bridging year. Accordingly, higher costs for the development of SMARTBROKER+ and the parallel operation of the current version of the online broker will probably lead to a negative cash flow. However, SMARTBROKER+ should contribute to sales growth all year round from 2024, and for the first time also strengthen the profitability of the group.
The first step in the restructuring of wallstreet-online.de – the group’s oldest brand – was successfully completed by the middle of the year. As part of the rebrush, a completely new design and typeface was developed for the website and mobile apps. In the further course, the page structure, user flows and the technical structure of the applications are to be further optimized. The group’s other media offerings will also be modernized over the course of the year, specifically tailored to the respective target group. At the same time, SMARTBROKER+ is to be linked much more closely with the four stock exchange portals. A medium-term goal is, among other things, the possibility of buying securities directly from the portals.
Presence general meeting is planned for mid-October 2023
The company will provide a detailed insight into business development at its Annual General Meeting, which will again take place this year as a face-to-face event in Berlin. October 17, 2023 was chosen as the date. Before that, the 2023 half-year report will be presented at the end of September.
Roland Nicklaus, CFO of Smartbroker Holding AG, on the final result for 2022 and the goals for 2023: “Although we were able to achieve the second highest turnover since foundation, 2022 was not an easy year for our company. The current year is once again marked by the transformation process in the area of transactions, which is now progressing according to plan after the delays of the past year. The product launch of SMARTBROKER+ is imminent, the feedback from the testers so far is very good and the interest within the industry is extremely high. There are already numerous pre-registrations for our completely revised broker. After our existing customers have migrated to the new system, we will again focus on acquiring new customers from the end of 2023. For 2024 we therefore expect the value of securities accounts and customer assets under management to increase again. At the same time, the cost structure will normalize again, there will be no one-off expenses and, at the same time, the share of transaction business in total income will increase.”
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-reach 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.
[1] This value corresponds to the pro forma sales that Smartbroker AG fully consolidated from January 1, 2021 according to HGB. Based on the management information system, the figure would be €51.4 million, with no significant impact on EBITDA
[2] Previously referred to as the “Smartbroker 2.0” project
[3] See ad hoc announcement of March 9, 2023