62
Warsaw Stock Exchange Group Investor Presentation April 2020

PREZENTACJA template A4 · Velocity ratio: 31.0% in Q4’19 vs. 33.2% in Q3’19 and 32.9% in Q4’18. Velocity ratio 31.8% in 2019 vs. 32,3% w 2018 r. WIG20 lost 5.56% in 2019 and

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Page 1: PREZENTACJA template A4 · Velocity ratio: 31.0% in Q4’19 vs. 33.2% in Q3’19 and 32.9% in Q4’18. Velocity ratio 31.8% in 2019 vs. 32,3% w 2018 r. WIG20 lost 5.56% in 2019 and

Warsaw Stock Exchange Group

Investor Presentation

April 2020

Page 2: PREZENTACJA template A4 · Velocity ratio: 31.0% in Q4’19 vs. 33.2% in Q3’19 and 32.9% in Q4’18. Velocity ratio 31.8% in 2019 vs. 32,3% w 2018 r. WIG20 lost 5.56% in 2019 and

I. Executive Summary of GPW Group 3

III. Market highlights and opportunities 13

IV. GPW Group financial results in Q4 2019 38

V. Appendices 48

II. Business activity in Q4 2019 8

Page 3: PREZENTACJA template A4 · Velocity ratio: 31.0% in Q4’19 vs. 33.2% in Q3’19 and 32.9% in Q4’18. Velocity ratio 31.8% in 2019 vs. 32,3% w 2018 r. WIG20 lost 5.56% in 2019 and

Key milestones

3

1817

1991

2010

2014

20172013 2019

The first stockexchange in Warsaw opens

Establishment of the WarsawStock Exchange (GPW)

GPW sharesdebut on the GPW

Announcementof new strategyGPW2020

FTSE Russel decisionabout promotionPoland to Developed Markets

Strategyupdate #GPW2022

Implementationof strategy

2012

GPW acquiresPolish Power Exchange (TGE)

2009

Launch of Catalyst (GPW bond market)

1998

Launch of derivativesmarket

2018

Selling of AquisExchange

2003

The firstforeigncompanylisted

2007

GPW aquiresAquis Exchange

Launch of UTP trading system

Launch of NewConnect(GPW alternativemarket)

The updated development strategy of the GPW Group is based on building shareholder value through the development of existing business lines and new segments at sustained profitability levels combined with risk management discipline. The strategy update focuses on four areas of development of the GPW Group: core business development development through diversification and new business areas development of new technological solutions sustained attractive dividend policy

Launch of X-StreamTrading and SAPRI trade systems

2022

Decisionto buildGPW Trading Platform

2020

AgriculturalCommodity Market

Page 4: PREZENTACJA template A4 · Velocity ratio: 31.0% in Q4’19 vs. 33.2% in Q3’19 and 32.9% in Q4’18. Velocity ratio 31.8% in 2019 vs. 32,3% w 2018 r. WIG20 lost 5.56% in 2019 and

GPW share price

4Source: Bloomberg

30

35

40

45

50

55

2013 2014 2015 2016 2017 2018 2019 2020

PLN (closing price)

0

200000

400000

600000

800000

1000000

2013 2014 2015 2016 2017 2018 2019 2020

Volume

Page 5: PREZENTACJA template A4 · Velocity ratio: 31.0% in Q4’19 vs. 33.2% in Q3’19 and 32.9% in Q4’18. Velocity ratio 31.8% in 2019 vs. 32,3% w 2018 r. WIG20 lost 5.56% in 2019 and

5Source: Bloomberg

0

5

10

15

20

25

EV/EBITDA 2020e

P/E 2020 P/E 2021 EV/EBITDA 2020 EV/EBITDA 2021 Dividend Yield 2020*

Market Cap (USD mn)

Median (24 global peers)

21,21 19,86 14,43 13,74 3,00 -

GPW 12,65 12,52 6,88 7,14 6,84 370,0

Discount (%) -40% -37% -52% -48% - -

(%)

0

1

2

3

4

5

6

7Dividend Yield 2020e (%)*

*Dividend Yield in 2020e from 2019 net profit

The highest dividend yield among global peers

Page 6: PREZENTACJA template A4 · Velocity ratio: 31.0% in Q4’19 vs. 33.2% in Q3’19 and 32.9% in Q4’18. Velocity ratio 31.8% in 2019 vs. 32,3% w 2018 r. WIG20 lost 5.56% in 2019 and

6

7

8

9

10

11

12

13

14

15

16

17

18

2015 2016 2017 2018 2019 2020

GPW (P/E 2020e)

P/E average (5 Years)

+1 Standard Deviation from average

-1 Standard Deviation from average

Źródło: Bloomberg

Present verus historical valuation

Page 7: PREZENTACJA template A4 · Velocity ratio: 31.0% in Q4’19 vs. 33.2% in Q3’19 and 32.9% in Q4’18. Velocity ratio 31.8% in 2019 vs. 32,3% w 2018 r. WIG20 lost 5.56% in 2019 and

II. Business activity in Q4 2019 8

III. Market highlights and opportunities 13

IV. GPW Group financial results in Q4 2019 38

V. Appendices 48

I. Executive summary of GPW Group 3

Page 8: PREZENTACJA template A4 · Velocity ratio: 31.0% in Q4’19 vs. 33.2% in Q3’19 and 32.9% in Q4’18. Velocity ratio 31.8% in 2019 vs. 32,3% w 2018 r. WIG20 lost 5.56% in 2019 and

53,1%

48,0% 47,1%

50,1%

8

Net profit impacted by provision of PLN 15.5 mn

12M’18Q4’19Q4’18 12M’19

88.580.3

346.8336.1

-9.3%

-3.1%

Q4’18 Q4’19 12M’18 12M’18

146.9

37.1

11.2

36.8

183.7

119.3-69.8%

-35.0%

Revenue

Q4’18

47.4

Q4’19 12M’18 12M’19

181.1

42.4

173.8

+11.6%

+4.2%

Opex

Net profitEBITDA

12M’18 12M’19Q4’18 Q4’19

52.7

41.2

202.0

193.2-21.9%

-4.3%

C/IPLN mn

PLN mn

PLN mn

PLN mn

8

Revenue

Revenue decreased by 9.3% YoY in Q4’19.

Annual revenue dropped by 3.1% YoY in

2019.

Operating expenses

Operating expenses up by 11.6% YoY in

Q4’19. Annual increase of 4.2% 2019. An

increase mainly as a result of higher:

external services and total employee costs.

EBITDA

EBITDA decreased by 21.9% YoY to PLN

41.2 m in Q4’19. In 2019 down by 4.2%

YoY to PLN 193.2 mn.

Net profit

Net profit dropped by 35.0% YoY in Q4’19.

Net profit include a one-off setting up

provisions of PLN 15.5 million in respect of a

potential VAT payable in the subsidiary

commodity clearing house IRGiT. GPW

indirectly holds 100% of IRGiT.

Aquis Exchange

Page 9: PREZENTACJA template A4 · Velocity ratio: 31.0% in Q4’19 vs. 33.2% in Q3’19 and 32.9% in Q4’18. Velocity ratio 31.8% in 2019 vs. 32,3% w 2018 r. WIG20 lost 5.56% in 2019 and

Velocity ratio: 31.0% in Q4’19 vs. 33.2% in Q3’19

and 32.9% in Q4’18. Velocity ratio 31.8% in 2019 vs.

32,3% w 2018 r.

WIG20 lost 5.56% in 2019 and WIG gained 0.25% in

2019.

Value of EOB trade in shares: PLN 45.0 bn in Q4’19

(-8.4 Yoy, -8,4% QoQ). vs. Value of EOB trade in

2019 PLN 191.5 bn (-6.3% YoY, PLN 204.3 bn in

2018)

Share of HVP and HVF participants in trade in shares:

10,0% in Q4’19 vs. 10.5% in 2019 and 9.3% in

2018.

9

Investor activity in equity market

Value of EOB trade on the Main Market

Activity of HVP and HVF clients vs. market turnover

58,3 53,3 58,2 53,748,0 53,5 49 51,2 46,3 49,0 45

34,9%

30,6%

33,3%

31,1%30,7%

34,3%

32,9% 32,8%

30,2%

33,2%

31,0%

27,0%

28,0%

29,0%

30,0%

31,0%

32,0%

33,0%

34,0%

35,0%

36,0%

0

10

20

30

40

50

60

70

80

Q2'17 Q3'17 Q4'17 Q1'18 Q2'18 Q3'18 Q4'18 Q1'19 Q2'19 Q3'19 Q4'19

EOB Trading

Turnover velocity (source: FESE)PLN bn

mld zł

7,9% 7,9%7,5%

8,6%9,3%

8,8%

10,3% 10,4% 10,2%

11,5%

10,0%

0%

2%

4%

6%

8%

10%

12%

14%

0

10

20

30

40

50

60

II III IV I II III IV I II III IV

2018 2019

EOB Trading HVP and HVF share

Page 10: PREZENTACJA template A4 · Velocity ratio: 31.0% in Q4’19 vs. 33.2% in Q3’19 and 32.9% in Q4’18. Velocity ratio 31.8% in 2019 vs. 32,3% w 2018 r. WIG20 lost 5.56% in 2019 and

Total volume of trade in derivatives: 1.68

mn contracts in Q4’19 (-24.2% YoY, -15.2%

QoQ)

Total volume of trade in derivatives: 7.0 mn

contracts in 2019 (-14.5% YoY, 8.2 mn in

2018)

Volume of trade in WIG20 futures: 0.93 mn

contracts in Q4’19 (-21.7 % YoY, - 13.3%

QoQ)

Volume of trade in equity futures: 0.43 mn

contracts in 2019 (+24.3% YoY, +12,5%

QoQ).

WIG20 volatility: 15.0% in Q4’19. WIG

volatility: 12.2% in Q4’19

Share of proprietary traders in futures

trade: 9.8% in Q4’19 vs. 9.9% in Q3’19 and

11.0% in Q4’18.

10

Trade in derivatives

mn

Volume of trade in derivatives

Q2’18 Q3’18

2.22

Q4’17 Q1’18 Q4’18 Q2’19

2.08

Q1’19 Q3’19

1.981.73

Q4’19

2.11

1.76 1.711.60 1.68 -15.2%

-24.2%

Quarterly volatility of WIG and WIG20

12,20%

15,00%

0%

5%

10%

15%

20%

25%

30%

Q2'1

1

Q4'1

1

Q2'1

2

Q4'1

2

Q2'1

3

Q4'1

3

Q2'1

4

Q4'1

4

Q2'1

5

Q4'1

5

Q2'1

6

Q4'1

6

Q2'1

7

Q4'1

7

Q2'1

8

Q4'1

8

Q2'1

9

Q4'1

9

WIG volatility WIG20 volatility

Page 11: PREZENTACJA template A4 · Velocity ratio: 31.0% in Q4’19 vs. 33.2% in Q3’19 and 32.9% in Q4’18. Velocity ratio 31.8% in 2019 vs. 32,3% w 2018 r. WIG20 lost 5.56% in 2019 and

11

Volume of spot and forward trade in electricity and gas

Volume of trade in property rights

Q4’18 Q1’19

66.7

Q2’19 Q3’19

67.3

44.3

65.0

52.9

Q4’19

Energy (TWh)

Q1’19Q4’18 Q3’19Q2’19

28.5

46.1

37.339.6

Q4’19

40.7

Gas (TWh)

2.8

Q4’18

7.7

5.0

5.9

Q2’19Q1’19

12.9

8.1

Q3’19

5.6

10.5 10.9

21.0

Q4’19

6.3

Cogeneration (TWh)

Green certificates (TWh)*

78.4

Q1’19 Q3’19Q4’18 Q2’19

63.1

175.6 172.4

Q4’19

81.0

energy efficiency (ktoe)

Trade in electricity, gas and property rights

Electricity market: Total volume of trade in electricity: 66.7 TWh

in Q4’19 (-0.9% YoY, +2.6% QoQ). Volume of spot transactions:

9.0 TWh (+15.3% YoY, +11.8% QoQ). Volume of forward

transactions: 57.7 TWh (-3.0% YoY, +1.3% QoQ). Total volume in

2019: 228.9 TWh (+1.3 YoY) – the highest total volume in history.

Gas market: Total volume of trade on the gas markets: 40.7 TWh

in Q4’19 (-11.9% YoY, +2.6% QoQ). Volume of spot transactions in

gas: 7.7 TWh (+10.3% YoY, +126.3% QoQ). Volume of forward

transactions: 33.0 TWh (-15.8% YoY, -9.1% QoQ). Total volume in

2019: 146.1 TWh (+2.0% Yoy) – the highest total volume in

history.

Property rights market :

No more trade in property rights from cogeneration as of end of

June 2019

Volume of trade in renewable energy source (RES) property

rights: 6.3 TWh in Q4’19 (-18.5% YoY, +12.5% QoQ).

Volume of trade in property rights in energy efficiency: 81.0

ktoe in Q4’19 (+3.3% YoY, -53.0% QoQ).

CO2 emission allowances: On 18 July 2019, TGE reopened the

Financial Instruments Market which lists CO2 emission allowances;

under MiFID2, allowances are a financial instrument. No trades in

2019.

White certificates: The support scheme for energy efficiency

certificates was extended on 29 June 2019 to the end of June 2021.

Cogeneration in the Register of Guarantees of Origin: On 2

October 2019, TGE introduced guarantees of origin of electricity

from high-efficiency cogeneration to trading in the Register of

Guarantees of Origin.*Trade in property rights from cogeneration expired at the end of June 2019

Page 12: PREZENTACJA template A4 · Velocity ratio: 31.0% in Q4’19 vs. 33.2% in Q3’19 and 32.9% in Q4’18. Velocity ratio 31.8% in 2019 vs. 32,3% w 2018 r. WIG20 lost 5.56% in 2019 and

II. Business activity in Q4 2019 8

IV. GPW Group financial results in Q4 2019 38

III. Market highlights and opportunities 13

V. Appendices 48

I. Executive summary of GPW Group 3

Page 13: PREZENTACJA template A4 · Velocity ratio: 31.0% in Q4’19 vs. 33.2% in Q3’19 and 32.9% in Q4’18. Velocity ratio 31.8% in 2019 vs. 32,3% w 2018 r. WIG20 lost 5.56% in 2019 and

Our market highlights and opportunities

13

Solid financial performance and attractive dividend

Diversified revenue structure

The largest CEE economy and growth leader in EU

Large and still growing client base

Potential for further growth in free float and liquidity in financial segment

Employee Capital Plans (ECP)

Dynamic commodity segment

Strategy update #GPW2022 (strategic initiatives)

Promotion to Developed Market status (FTSE Russell and STOXX)

1

2

3

4

5

6

7

8

9

Page 14: PREZENTACJA template A4 · Velocity ratio: 31.0% in Q4’19 vs. 33.2% in Q3’19 and 32.9% in Q4’18. Velocity ratio 31.8% in 2019 vs. 32,3% w 2018 r. WIG20 lost 5.56% in 2019 and

14

… and high operating leverage

Sound financial performance

Solid top-line growth …

… underpinned by increasing diversification … and consistent profitability

CAGR

2010 2015 20182014

225.6

2009 20132011 2012

273.8

2016 2017

283.8

199.5

268.8

317.6 327.9 310.9352.0 346.8

2019

336.1

+5.4%

Total revenue, PLN mn

94.0

47.1%

20122009

48.1%55.5%

161.1

2011

51.8% 50.7%51.1%

2013

54.4%

2014

54.9%

20152010 2016

202.0

61.1%

2017

58.2%

2018 2019

108.4

149.3 142.0 144.9

183.7212.2

193.2

57.5%

180.2

EBITDA, PLN mn EBITDA margin, %

19.6%

13.6%

2010

13.9%

2011

119.3

2009 2014

18.1%

25.6%

2012

18.9%

2013

17.3%

20162015

16.1%

20.7%

2017

21.7%

20192018

100.7 94.8

131.1134.1

105.9 112.8 107.5121.5

158.7183.7

16.1%

Net profit, PLN mn ROE, %

1

70,4%

11,1%

16,5%

1,9%

26,0%

3,2%3,0%

2,8%5,8%

14,3%

44,6%

0,3%

Information services

Listing

Trading - other

Trading - fixed income

Trading - derivatives

Trading - shares

Financial Market:

including Market Data from FM (14.3%)

4,9%3,6%

10,2%

3,7%

8,3%

13,8%

0,2%

Commodity Market:Market Data

Other

Listing

Trading: Financial Market 98.1% 55.1%

0% 44.6%

2008 2019

Other 0,3%

Page 15: PREZENTACJA template A4 · Velocity ratio: 31.0% in Q4’19 vs. 33.2% in Q3’19 and 32.9% in Q4’18. Velocity ratio 31.8% in 2019 vs. 32,3% w 2018 r. WIG20 lost 5.56% in 2019 and

15

Ambitious financial targets

GPW Group financial targets for 2022

1

• PLN 470 mn in 2022Revenue

• PLN 250 mn in 2022EBITDA

• ROE: 19% in 2022 (it may temporarily fall below 19% due to strategyimplementation expenditures)

ROE

• C/I under 50% after 2022 (it may temporarily range from 63% to 55% due tostrategy implementation expenditures)Cost/Income

• dividend payout rate not lower than 60% of consolidated net profit

• dividend not lower than PLN 2.4 per share from 2019 profit

• annual increase in the dividend from the 2020-2022 profits by at least PLN 0.1 per share

Dividend

Page 16: PREZENTACJA template A4 · Velocity ratio: 31.0% in Q4’19 vs. 33.2% in Q3’19 and 32.9% in Q4’18. Velocity ratio 31.8% in 2019 vs. 32,3% w 2018 r. WIG20 lost 5.56% in 2019 and

DIVIDEND POLICY:

dividend payout rate not lower than 60% of consolidated net profit of GPW Group for the financial year attributable to GPW

shareholders, adjusted for the share of profit of associates

dividend at least PLN 2.4 per share from 2019 profit

annual increase in the dividend from the 2020-2022 profits by at least PLN 0.1 per share

Attractive dividend policy

16

89.9%

2010

1.40

3.20

1.20

31.0%

142.3%

70.7%

2.36

2011

45.2%3.18

0.80

2012

44.5%

2013

2.40

2014

80.1%

2.20

2015

2.15

2016

63.3%

2017

77.1%

2018

2.40

93.2%

2019

Dividend yield3

1 By financial year for which dividend was paid2 Based on the consolidated profit attributable to the shareholders of the parent entity and adjusted for the share of profit of associates3 Based on the share price as at the dividend record date

1

4.4%3.8% 2.0% 3.2% 4.9% 6.7%6.1% 5.8% 7.4% -

Dividend payout ratio (%)Dividend per share (PLN)1 2

Management Board recommendation

Page 17: PREZENTACJA template A4 · Velocity ratio: 31.0% in Q4’19 vs. 33.2% in Q3’19 and 32.9% in Q4’18. Velocity ratio 31.8% in 2019 vs. 32,3% w 2018 r. WIG20 lost 5.56% in 2019 and

3

Settlement

Custody

Clearing

COR1

RGO2

Share in total revenue 4, LTM 5

Equities & other

Derivatives Bonds Commodities

Trading

Listing

Equities

Bonds

ETFs

Warrants

Structuredproducts

Financial market Commodity market

Real-timedata

Non-displaydata

Delayeddata

Historicaldata

Indices

Post-tradingincluding COR1 and

RGO2

Electricity spotand forward contracts

Natural gas spotand forward contracts

Property rights in certificates of origin

CO2 emission allowances

Corporatebonds

Municipalbonds

Bank bonds

T-bills

T-bonds

Futures:

- index

- single stock

- fx

- interest rate

Options

- index

Equities

Structuredproducts

Warrants

ETFs

Investmentcertificates

Membership

Access and useof GPW trading system

Membership and participation on the commoditymarkets

Market data

Diversified revenue structure

1 Certificate of Origin Register 2 Register of Guarantees of Origin 3 Associate company (33.33%); KDPW Group offers post-trading services on the financial market 4 Does not include other revenues, which constitute 0.3% of GPW Group revenues 5 Last twelve months ending on 31 December 20196 Does not include the KDPW revenues (associate company; equity method is applied)

17

FM: 2.6%CM: 3.7%

GPW Group

2

5,8% 26,2% 18,6% 22,0%6,3% 3,2% 3,0% 14,5%6

Page 18: PREZENTACJA template A4 · Velocity ratio: 31.0% in Q4’19 vs. 33.2% in Q3’19 and 32.9% in Q4’18. Velocity ratio 31.8% in 2019 vs. 32,3% w 2018 r. WIG20 lost 5.56% in 2019 and

And 7th largest economy in the EULargest economy in CEE region…

Largest economy in the CEE region…

18Source: Eurostat

3

48

61

94

156

220

223

398

527

Slovenia

Bulgaria

Slovakia

Hungary

Czech Rep.

Romania

Austria

Poland

Nominal GDP in 2019 (EUR bn)

527

812

1245

1787

2418

2523

3435

Poland

Holand

Spain

Italy

France

UK

Germany

Nominal GDP in 2019 (EUR bn)

38,4

10,6

19,6

9,8

5,4

8,9

7,1

Population (mn)

Page 19: PREZENTACJA template A4 · Velocity ratio: 31.0% in Q4’19 vs. 33.2% in Q3’19 and 32.9% in Q4’18. Velocity ratio 31.8% in 2019 vs. 32,3% w 2018 r. WIG20 lost 5.56% in 2019 and

19

…and a growth leader in the EU

Poland's GDP will fall by 2.6% in 2020 and

increase by 3.2% in 2021 - according to the NBP

Macroeconomic Survey made in April.

According to the central inflation projection path of

the NBP, the average annual consumer CPI inflation

will be + 3.7% in 2020 (in 2019, the average

annual inflation amounted to 2.3%

Poland’s macro readings1

Bloomberg GDP forecast for 2020-20222

1 Central Statistical Office of Poland2 Bloomberg3 Central Statistical Office of Poland

-19.7%

-23%

GDP growth in 20193

A2outlook stable

A-outlook stable

A-outlook stable

3

+4.1%

1,82,4

2,02,6

2,01,5

3,33,33,8

3,1

4,9 5,1

4,13,3

2,7

-4

-3

-2

-1

0

1

2

3

4

5

6

2013 2014 2015 2016 2017 2018 2019 2020 2021 2022

0,3

1,4

-3,9

-1,4

1,8

European Union (YoY%) Poland (YoY%)

Page 20: PREZENTACJA template A4 · Velocity ratio: 31.0% in Q4’19 vs. 33.2% in Q3’19 and 32.9% in Q4’18. Velocity ratio 31.8% in 2019 vs. 32,3% w 2018 r. WIG20 lost 5.56% in 2019 and

Most of Poles’ savings are located in bank deposits: in view of record-low interest rates, a growth potential for direct

and indirect investments on the GPW exists

Stocks represent only 4.0% of Poles’ savings; however, individual investors are very active on the GPW (turnover

share at 1% in 2019; individual investor portfolio turnover ratio at 44% in H1 2019)

GPW initiatives: education, joint initiatives with market participants, promotion of direct and indirect investment on

the Exchange, including pension savings

New flows to be injected into the Polish capital market by Employee Capital Plans (PPK) –> more in slides 28-32

Poles’ savings (%)1 Household assets 1 (PLN bn)

11%59%

Deposits and cash Other

2

4

Potential for retail investment growth

20

15%

63%

4%

5%

10%

Cash

1%

Debt securities

2%

Deposit

LoansShares

Insurance

Investment Funds

2006

233

310

2005

1 193

382

2003 2004 2007

218

999

2008

519

20172009 2010 2011

1 270

2012 2013 2014 2015

1 317

780

107

2016

688

2018

1 346

Q3’19

369432

528607 614

1 042

752

225187

792

261

850

154

919

263

737

265120

278

342

211

426

207

585625

249

670

262 262

477

899

334

936

316

1 030

328

989

293

1 Net of pension entitlements (pension funds and Social Insurance Institution sub-accounts), non-listed shares, other equity interest2 Short and long-term debt securities, short and long-term loans3 Listed shares, insurance, investment funds, short and long-term debt securities, short and long-term loansSource: National Bank of Poland (NBP); data as of the end of June 2019, latest data available

4

3

Page 21: PREZENTACJA template A4 · Velocity ratio: 31.0% in Q4’19 vs. 33.2% in Q3’19 and 32.9% in Q4’18. Velocity ratio 31.8% in 2019 vs. 32,3% w 2018 r. WIG20 lost 5.56% in 2019 and

Investment funds in Poland2Open Pension Funds1

Largest institutional investor pool in the CEE region

Open Pension Fund (OFE) net assets value amounts to PLN 154,816 bn as of December 2019

Investment funds enjoy strong confidence of retail investors who increasingly seek more sophisticated savings and investment products

As a long-term investor, pension funds freeze a large part of the free float on GPW

Part of the free float in pension fund portfolios could be released through securities lending -> necessary regulatory change

OPF’s share in GPW turnover

OPF’s share in GPW free float Non-public funds, assets PLN bn

Capital Market funds, assets PLN bn

Strong domestic institutional investor base

21

12.0

43.1

13.4

36.1

2011 Q4’19

11.8

38.8

43.043.0

20132012 Q2’19

11.2

41.8

2014

9.8

42.4

2015

8.4

2016

8.4

2017

7.6

41.5

2018

7.3

41.0

Q1’19

6.3

40.8

6.8

42.3

Q3’19

6.4

43.1

1PFSA, NBP, GPW

4

27 3862 68

89 93 9388

147

108

2011

175

2015

147

141

2012

127

2014

111105

2016

171

108

2013

167

2018 2019

146

189

1Q’20

209

114

146

252 259279

257268

239

2017

2According to the classification of funds created by IZFiA (The Chamber of Fund and Asset Management), the non-public funds sector includesthose whose assets are not investedin capital markets. Non-public funds include: securitization, real estate and non-public assets.

Page 22: PREZENTACJA template A4 · Velocity ratio: 31.0% in Q4’19 vs. 33.2% in Q3’19 and 32.9% in Q4’18. Velocity ratio 31.8% in 2019 vs. 32,3% w 2018 r. WIG20 lost 5.56% in 2019 and

Focused efforts, in co-operation with issuers, to spark interest in GPW-listed companies among foreign investors

Close co-operation with investment banks

Value of GPW listed shares held by foreigninvestors accounted for 38.7%1 of the market capitalization of domestic shares listed on the GPW

22

Share of investors in trade on the futures market (%)

Strong and growing foreign investor base

Share of investors in trade in shares on the Main Market (%)

Portfolio turnover ratio of selected investors on the GPW2

1 Data as of the end of Q1 2019, latest available data2 GPW estimates; portfolio turnover ratio: value of the electronic order book (buy

and sell trades)/2/average portfolio value; data as of the end of H1 2019

Source: PFSA, NBP, GPW

4

Domestic investors Foreign Investors

Year Pension Funds Investment FundsIndividual Investors

2008 28% 71% 62% 42%

2009 26% 92% 134% 50%

2010 21% 73% 89% 53%

2011 19% 80% 100% 57%

2012 13% 69% 89% 44%

2013 14% 75% 83% 48%

2014 9% 60% 62% 41%

2015 9% 59% 59% 43%

2016 7% 60% 59% 44%

2017 7% 53% 70% 50%

2018 5% 61% 50% 57%

H12019 4% 51% 44% 43%

47 49 51 53 53 59 63

15 13 12 13 1612

12

38 38 37 34 31 29 25

201920162013 201820172014 2015

institutional individual foreign

17 18 15 18 19 17 18

50 46 47 46 51 48 47

33 37 38 36 30 35 35

20172014 20182013 2015 2016 2019

institutional foreignindividual

Page 23: PREZENTACJA template A4 · Velocity ratio: 31.0% in Q4’19 vs. 33.2% in Q3’19 and 32.9% in Q4’18. Velocity ratio 31.8% in 2019 vs. 32,3% w 2018 r. WIG20 lost 5.56% in 2019 and

Information products represent an attractive opportunity for GPW to enhance revenues by leveraging its central role in the Polish capital market infrastructure

Strong reach via number of distributors and subscribers

Stable development of information services

23

285,0

327,3

288,1

261,9

240,3

221,1 225,0

247,6 247,9260,0

52 57 58 58 58 5451

52

78 83

2943

5365

94

2010 2011 2012 2013 2014 2015 2016 2017 2018 2019

Number of subscribers (LHS)

Number of distributors (RHS)

Customers non-display

4

New clients of GPW and WIBOR data in different market segments attracted in 2019

Page 24: PREZENTACJA template A4 · Velocity ratio: 31.0% in Q4’19 vs. 33.2% in Q3’19 and 32.9% in Q4’18. Velocity ratio 31.8% in 2019 vs. 32,3% w 2018 r. WIG20 lost 5.56% in 2019 and

European markets equitisation and trading velocity*Turnover velocity and volatility

Material upside potential of free float

Equity market: potential for further freefloat and liquidity growth

24Source: GPW

5

20152009

270.3282.8

39% 47%

2013

165.3

48% 48%

2014

49%

2016

49%

2017

52%

2018

329.9

50%

2019

279.3

246.3

299.9276.0

Free float value, PLN bn Free float, %

* Source: Turnover, Mkt Cap - Thomson Reuters, GDP - Eurostat (except of TR, UA, IL, RU - IMF).

0,0

5,0

10,0

15,0

20,0

25,0

30,0

35,0

40,0

45,0

sty

-18

lut-

18

mar-

18

kw

i-18

maj-

18

cze-1

8

lip-1

8

sie

-18

wrz

-18

paź-1

8

lis-1

8

gru

-18

sty

-19

lut-

19

mar-

19

kw

i-19

maj-

19

cze-1

9

lip-1

9

sie

-19

wrz

-19

paź-1

9

lis-1

9

gru

-19

Velocity ratio WIG20 volatility

Page 25: PREZENTACJA template A4 · Velocity ratio: 31.0% in Q4’19 vs. 33.2% in Q3’19 and 32.9% in Q4’18. Velocity ratio 31.8% in 2019 vs. 32,3% w 2018 r. WIG20 lost 5.56% in 2019 and

Main Market401 domestic companies48 foreign issuers

NewConnect369 domestic companies6 foreign issuers

Catalyst145 issuers (incl. State) 512 listed non-TreasuryIssues

Market cap:PLN 550 bnPLN 554 bn

Market cap:PLN 9,7 bn

Value of non-Treasury issues: PLN 92,1 bn

Flow of new companies to the marketIssuer activity on GPW markets1

Acquisition of issuers

On the radar: family companies, PE funds, CEE companies, state-owned companies and theirsubsidiaries

Intensive activities aimed at promoting the stock market as a place to raise capital for development

Individual meetings with companies previously inactive on the GPW markets

GPW Growth

25

Diversified issuers portfolio

Launch of a comprehensive educational program GPW

Growth oriented to support the development of small

and medium enterprises

Supporting non-public companies in building their value

through expansion using external sources of financing,

in particular with a strong accent of development

through the capital market

84 107185

351429 445 431 418 406 408 387 375

374 379

400

426

438 450 471 487 487 482 465 449

2010 2012 201720092008 2011 2013 20152014 2016 2018 2019

CAGR 5.5%

NewConnectMain MarketEquity market

Debt market

Equity market for SME

1 As of the end of 2019; Source: GPW

5

Page 26: PREZENTACJA template A4 · Velocity ratio: 31.0% in Q4’19 vs. 33.2% in Q3’19 and 32.9% in Q4’18. Velocity ratio 31.8% in 2019 vs. 32,3% w 2018 r. WIG20 lost 5.56% in 2019 and

26

Strong position of NewConnect on the European SME scene

IPO’s on european SME Markets in 2019 2

Number of IPOs on NewConnect Market

5

1 Source: GPW at the end of December 20192 Source: PwC IPO Watch Europe 2019

New Connect is an offer for small and growing

companies, especially in the high-tech sector (but

companies from other sectors may naturally be

eligible for trading).

NewConnect has been operating since 2007 and

capitalization of the market has reached PLN 9,7 bn1

Since the begining of NewConnect over 6001 new

companies have joined the platform

NewConnect is the way of developing and moving to

the Main Market - 15% of companies have already

moved to the Main Market

NewConnect is dominated by domestic individual

investors – in H1 2019 the group has generated 86%

of turnover

Since the begining of NewConnect the value of IPOs

and SPOs amounted to around PLN 5.0 bln

In July 2019, NewConnect has been approved by

Polish FSA (KNF) to get the status of SME Growth

Market, and thus joined the group of only a few

markets with this status, i.e. London Stock Exchange

AIM or AIM Italia.

19

1615

10

3

1

LSE (AIM)Borsa Italiana - AIM

0

Nasdaq Nordiq (First North)

NewConnect Euronext (Alternext)

BME Alternative

Deutsche Borse -Scale

IPO’s in 2019

22

19

16

19

15 15

20152014 2016 2017 20192018

IPO’s 2014-2019

Page 27: PREZENTACJA template A4 · Velocity ratio: 31.0% in Q4’19 vs. 33.2% in Q3’19 and 32.9% in Q4’18. Velocity ratio 31.8% in 2019 vs. 32,3% w 2018 r. WIG20 lost 5.56% in 2019 and

Segmentation of the corporate debt market architecture

Active role of the Exchange in attracting new issuers

Single banking licence: an opportunity to grow bank activity as debt market participants

Number of non-Treasury issues on Catalyst Total debt securities by residence of issuer as % of GDP1

Opportunities for further debt market development

27

3597

208

325

408

487 496 525566

527 512

20142010 2013 201720122009 2011 20162015 2018 2019

30.8%

1 Source: BIS (non-Treasury bonds as at the end of June 2019), IMF (GDP in 2019, World Economic Outlook Database)

5

Page 28: PREZENTACJA template A4 · Velocity ratio: 31.0% in Q4’19 vs. 33.2% in Q3’19 and 32.9% in Q4’18. Velocity ratio 31.8% in 2019 vs. 32,3% w 2018 r. WIG20 lost 5.56% in 2019 and

Employee Capital Plans (ECP)

28

6

max

min

ZUS (socialsecurity) OFE (OPF -

Open PensionFunds)

EmployeeCapital Plans(PPK)

EmployeePensionPlans(PPE)

IKE IKZE

2nd pillar (obligatory since 2013 r., now optional)

3rd pilllar (voluntary)1st pillar (obligatory)

public funds private funds

Employee Capital Plans (ECP)/Pracownicze Plany Kapitałowe (PPK) are a new system of private long-term pension savings, mandatory for employers but optional for employees, based on contributions of employees, employers and the public budget.

PPK scheme are very similar to UK Workplace Pension System PPK’s impact on GPW:

Increase of market turnover and increase of the velocity rate Attracting new issuers: growing number of IPOs A stronger market in equities, corporate bonds, treasury bonds, real estate investment funds Improved trust in and promotion of the capital market

Page 29: PREZENTACJA template A4 · Velocity ratio: 31.0% in Q4’19 vs. 33.2% in Q3’19 and 32.9% in Q4’18. Velocity ratio 31.8% in 2019 vs. 32,3% w 2018 r. WIG20 lost 5.56% in 2019 and

29

Equities/debt share in total assets

Employee Capital Plans (ECP)

ECP intruduction schedule

Source: Ministry of Finance of Poland

6

StageSize od company (number of

employese)

number of potential

participants (mn)Start

I >250 3.3 01.07.2019

II 50-249 2 01.01.2020*

III 20-49 1.1 01.07.2020

IV others 5.1 01.01.2021

Total 11.5

Basic contributionVoluntary

contributionMax contribution

Employeecontribution

2% of gross wageup to 2,0% gross

wage4% gross wage

Employercontribution

1,5% of grosswage

up to 2,5% grosswage

4% gross wage

Maximum total contribution 8% gross wage

Contriubution paid by publicbudget:

welcome payment – PLN 250

annual payment – PLN 240

* Stage II is delayed; will be implemented simultaneously with Stage IIISource: Ministry of Finance of Poland

The ECP bill assumes three sources of contribution

Time left to the defineddate (reaching 60 years

old)Equities Debt

>20 years 60-80% 20-40%

11-20 years 40-70% 30-60%

6-10 years 25-50% 50-75%

1-5 years 10-30% 70-90%

After reaching the defined date (60 years)

<15% >85%

Source: Ministry of Finance of Poland

40%

20%

10%

20%

WIG20

mWIG40

other local equities

foreign equities

min

max

Source: Ministry of Finance of Poland

Equity portfolio structure

max

min

I

II

III

Page 30: PREZENTACJA template A4 · Velocity ratio: 31.0% in Q4’19 vs. 33.2% in Q3’19 and 32.9% in Q4’18. Velocity ratio 31.8% in 2019 vs. 32,3% w 2018 r. WIG20 lost 5.56% in 2019 and

30

Employee Capital Plans (ECP) – base scenario

Source: GPW estimates

6

max

min

Estimated yearly inflows into ECPs (PLN bn)

Estimated AUM of ECP funds (PLN bn)

„Base scenario” assumptions: participation rate 50% average portfolio structure:

30% - equities PL 10% - foreign equities 50% - debt PL 10% - foreign debt

weight of rates: 0% - highest contribution rate 8% 100% - lowest contribution rate 3.5%

0,2

0,9 1,3 1,3 1,3 1,3 1,4 1,4 1,4 1,4 1,5 1,5

1,14,5

6,3 6,4 6,5 6,6 6,8 6,9 7,0 7,1 7,3 7,40,20,9

1,3 1,3 1,3 1,3 1,4 1,4 1,4 1,4 1,5 1,5

0,6

2,7

3,8 3,8 3,9 4,0 4,1 4,1 4,2 4,3 4,4 4,4

2,2

2025

14,3

2019 2020 2021

14,0

2022 2023 2024

12,812,6

2026 2027 2028 2029 2030

8,9

13,0 13,3 13,5 13,814,5 14,8

foreign debtequities PL foreign equities debt PL

1,1 2,4 8,2 9,9 11,6 13,4 15,3 17,311,718,2

24,931,8

39,046,3

53,961,8

69,878,2

2,43,9

7,39,2

11,3

13,6

16,2

18,9

21,8

3,3 7,2

11,5

16,1

21,0

26,3

32,1

38,2

44,8

51,9

59,4

0,6

0,2

117,4

37,3

20242022

0,2

2019

5,5

176,7

2020

3,7

2021

5,5

2030

5,1

2023

6,6

99,6

20292025

51,6

2026

1,1

2027 2028

2,2

23,8

11,0

82,7

136,2

156,0

1,1

66,7

foreign equitiesequities PL foreign debtdebt PL

Page 31: PREZENTACJA template A4 · Velocity ratio: 31.0% in Q4’19 vs. 33.2% in Q3’19 and 32.9% in Q4’18. Velocity ratio 31.8% in 2019 vs. 32,3% w 2018 r. WIG20 lost 5.56% in 2019 and

31

Employee Capital Plans (ECP) – pesimisticscenario

Source: GPW estimates

6

max

min

Estimated yearly inflows into ECPs (PLN bn)

Estimated AUM of ECP funds (PLN bn)

„Pesimistic scenario” assumptions: participation rate 25% average portfolio structure:

30% - equities PL 10% - foreign equities 50% - debt PL 10% - foreign debt

weight of rates: 0% - highest contribution rate 8% 100% - lowest contribution rate 3.5%

0,1

0,4 0,6 0,6 0,7 0,7 0,7 0,7 0,7 0,7 0,7 0,7

0,52,2

3,1 3,2 3,3 3,3 3,4 3,4 3,5 3,6 3,6 3,70,10,4

0,6 0,6 0,7 0,7 0,7 0,7 0,7 0,7 0,7 0,7

0,3

1,3

1,9 1,9 2,0 2,0 2,0 2,1 2,1 2,1 2,2 2,2

2022 2024 20252019 20282020 2029

7,0

2021 20262023 2027 2030

1,0

4,5

6,3 6,4 6,5 6,6 6,8 6,97,1 7,3 7,4

foreign debtequities PL foreign equities debt PL

0,5 4,1 4,9 5,8 6,7 7,7 8,75,89,1

12,415,9

19,423,1

26,930,9

34,939,0

0,5

3,64,6

5,7

6,8

8,1

9,4

10,9

3,6

5,7

8,0

10,5

13,1

16,0

19,1

22,4

25,9

29,7

2021

0,3

0,1

2023 2026

0,10,5

2019

1,62,7

2020

1,2

2029

1,2

2024

1,9

2022

1,9

41,3

2,7

2,6

2030

3,3

2025 2027

1,0

2028

11,8

18,6

25,7

33,3

5,4

58,6

68,0

77,9

88,3

49,7

equities PL foreign equities debt PL foreign debt

Page 32: PREZENTACJA template A4 · Velocity ratio: 31.0% in Q4’19 vs. 33.2% in Q3’19 and 32.9% in Q4’18. Velocity ratio 31.8% in 2019 vs. 32,3% w 2018 r. WIG20 lost 5.56% in 2019 and

32

Employee Capital Plans (ECP) – optimisticscenario

Source: GPW estimates

6

max

min

„Optymistic scenario” assumptions: participation rate 75% average portfolio structure:

30% - equities PL 10% - foreign stocks 50% - debt PL 10% - foreign debt

weight of rates: 25% - highest contribution rate 8% 75% - lowest contribution rate 3.5%

Estimated yearly inflows into ECPs (PLN bn)

Estimated AUM of ECP funds (PLN bn)

0,4

1,7 2,4 2,5 2,5 2,6 2,6 2,7 2,7 2,8 2,8 2,9

1,98,5

0,41,7

2,4 2,5 2,5 2,6 2,6 2,7 2,7 2,8 2,8 2,9

1,2

5,1

7,3 7,4 7,6 7,7 7,8 8,0 8,1 8,3 8,5 8,6

13,3

2023 20242019 2020

12,2

28,2

2021 2027

12,4

2022

12,6 12,8

2025

13,1

16,9

2026

24,4

13,6 13,8

2028

14,1

27,126,6

2029

14,4

25,7

2030

3,9

24,7 25,226,1

27,728,7

equities PL foreign equities debt PL foreign debt

2,1 4,5 15,8 19,0 22,4 25,9 29,6 33,522,434,9

47,961,2

75,089,3

104,0119,2

134,9151,0

2,1 4,77,5

14,017,7

21,8

26,3

31,1

36,4

42,1

6,213,8

22,0

30,8

40,4

50,7

61,8

73,7

86,5

100,1

114,7

1,2

226,4

0,4

1,9

341,3

192,0

12,89,90,4 10,3

20212020

3,9

301,0

2019 2027

7,1

2022

10,6

20,6

2023 2024

71,5

2025 2026 2028 20302029

99,2

128,4

159,3

262,7

45,4

foreign debtequities PL foreign equities debt PL

Page 33: PREZENTACJA template A4 · Velocity ratio: 31.0% in Q4’19 vs. 33.2% in Q3’19 and 32.9% in Q4’18. Velocity ratio 31.8% in 2019 vs. 32,3% w 2018 r. WIG20 lost 5.56% in 2019 and

Lunch of Agricultural Market– pilot wheat trading from March to August 2020.

Maker-Taker: On 1 January 2019, TGE opened a Maker-Taker pilot liquidity support programme to minimise operating expenses of market participants by narrowing the spread between bids and asks. After six months, TGE reviewed the programme performance and decided to continue the programme from 1 August to 31 December 2019.

CO2 emission allowances: On 18 July 2019, TGE reopened the Financial Instruments Market which lists CO2 emission allowances; under MiFID2, allowances are a financial instrument.

White certificates: The Act amending the Excise Tax Act and certain other Acts of 29 June 2019 extended the support scheme for energy efficiencycertificates to the end of June 2021.

Organised Trading Facility (OTF) - transformation of TGE’s forward commodity market into an organised trading facility (OTF) under MiFID II

Energy market – obligation to sell a proportion of Energy on the exchange – increased from 30% to 100%.

Commodity market growth drivers

Natural gas trading (spot+forward)TGE electricity trade volumes (spot+forward)

TWh

Commodity market

33

10,1 9,1

87,9

130,8 139,4

176,6186,8 186,7

126,7111,7

226,1 228,9

2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019

0,0 1,1 2,4

111,6 106,9114,5

138,7 143,3 146,1

2011 2012 2013 2014 2015 2016 2017 2018 2019

7

TWh

Page 34: PREZENTACJA template A4 · Velocity ratio: 31.0% in Q4’19 vs. 33.2% in Q3’19 and 32.9% in Q4’18. Velocity ratio 31.8% in 2019 vs. 32,3% w 2018 r. WIG20 lost 5.56% in 2019 and

Commodities trading in Europe – TGE’s fullproduct offer

34

34

Exchangeelectricity

spotelectricity

futures/forwardnatural gas

spotnatural gas

futures/forward

EEX NO YES NO NO

Epex Spot YES NO NO NO

Powernext/Pegas NO NO YES YES

Nord Pool YES NO NO NO

Nasdaq Commodities NO YES NO NO

HUPX YES NO NO NO

HUDEX NO YES NO YES

TGE YES YES YES YES

Natural gas and electricity trading in Europe is usually concentrated on one-commodity dedicated exchanges.

Nonetheless there are some essential cases of many companies leading one-commodity trading being part of one capital group – e.g. EEX, Epex Spot and Powernext/Pegas from the list above are members of EEX Group.

7

Page 35: PREZENTACJA template A4 · Velocity ratio: 31.0% in Q4’19 vs. 33.2% in Q3’19 and 32.9% in Q4’18. Velocity ratio 31.8% in 2019 vs. 32,3% w 2018 r. WIG20 lost 5.56% in 2019 and

Strategy update #GPW2022 (strategicinitiatives)

Stock MarketDebt Market

Commodity MarketInformation offer for

investors and issuers

New business linesDerivatives MarketStock market Debt marketCommodity

marketInformation

productsDerivatives

market

Primary MarketDevelopment

SecuritiesLendingSystem

- GPW - TGE - BondSpot PRA

Derivatives Development

Organised Trading Facility (OTF)

Waste and Secondary Raw Materials Trading Platform

GPW DataGPW Private Market

GPW TCA TOOL

BondSpot Development

Polish Rating Agency

35

AgriculturalCommodityMarket

GPW Ventures

GPW Group

8

GPW Tech

Trading Platform

Page 36: PREZENTACJA template A4 · Velocity ratio: 31.0% in Q4’19 vs. 33.2% in Q3’19 and 32.9% in Q4’18. Velocity ratio 31.8% in 2019 vs. 32,3% w 2018 r. WIG20 lost 5.56% in 2019 and

Aids classification of Poland amongst the 25 Developed Markets…

Poland’s Promotion to Developed Markets: Success of Poland’s Economy and Capital Market

Well-developed and stable market infrastructure

Broad selection of listed stocks and high liquidity

Wide and unlimited access to professional market intermediaries

Independent supervision over the market and high standards of corporate

governance

Efficient and secure trading and post-trading services

Little limitations on investing by foreign investors

Extensive, legally regulated added value services including short selling

and omnibus securities accounts

Highly appreciated Polish capital market…

Ceremony at London Stock Exchange FTSE Developed Markets ranking in numbers1

developed markets

emerging, frontier, other markets

0.12%Poland’s share in FTSE Developed All Cap Index as of September ’19

1.33%Poland’s previous share in FTSE Emerging All Cap Index

September 2018 Poland’s reclassification

1 Source: FTSE Russell36

9

Page 37: PREZENTACJA template A4 · Velocity ratio: 31.0% in Q4’19 vs. 33.2% in Q3’19 and 32.9% in Q4’18. Velocity ratio 31.8% in 2019 vs. 32,3% w 2018 r. WIG20 lost 5.56% in 2019 and

II. Business activity in Q4 2019 8

IV. GPW Group financial results in Q4 2019 38

III. Market highlights and opportunities 13

V. Appendices 48

I. Executive summary of GPW Group 3

Page 38: PREZENTACJA template A4 · Velocity ratio: 31.0% in Q4’19 vs. 33.2% in Q3’19 and 32.9% in Q4’18. Velocity ratio 31.8% in 2019 vs. 32,3% w 2018 r. WIG20 lost 5.56% in 2019 and

49.8%42.0%

29.1%

47.7%

14.0%

38

Lower financial results in a difficult market environment

Net profit and net profit margin

Q4’18 Q1’19 Q2’19 Q3’19

37.1

24.5

Q4’19

42.6 41.1

11.2

-69.8%

PLN mn

PLN mn

Consolidated revenue: PLN 80.3 mn in Q4’19 (-9.3% YoY) due to lower revenue from the financial

market (-9.3% YoY) and the commodity market (-10.1% YoY).

GPW Group’s EBITDA: PLN 41.2 mn in Q4’19 (-21.9% YoY).

GPW Group’s net profit: PLN 11.2 mn in Q4’19 (-69.8% YoY). YoY decrease mainly driven by

provisions of PLN 15.5 million in respect of a potential VAT payable in the subsidiary commodity

clearing house IRGiT.

Revenue

Q4’18 Q2’19Q1’19 Q3’19

88.584.2

89.182.5

Q4’19

80.3

-9.3%59.6%

45.8%64.6%

51.3%67.8%

EBITDA and EBITDA margin

Q1’19Q4’18

57.6

Q2’19 Q3’19

52.7

38.6

55.9

Q4’19

41.2

-21.9%PLN mn

Page 39: PREZENTACJA template A4 · Velocity ratio: 31.0% in Q4’19 vs. 33.2% in Q3’19 and 32.9% in Q4’18. Velocity ratio 31.8% in 2019 vs. 32,3% w 2018 r. WIG20 lost 5.56% in 2019 and

39

Trading revenue on the financial market

Trading revenue – financial market

Investor activity on GPW markets

Trading revenue on the financial market: PLN 27.1 mn

in Q4’19 (-11.4% YoY, -9.3% QoQ).

Average EOB turnover in shares per session: PLN

756.8 mn in Q4’19 (-8.5% YoY)

Average fee on the stock market: 2.20 bps in Q4’19 vs.

2.24 bps in Q4’18. Historical the quarterly break: 2.22

bps in Q1’19, 2.19 bps in Q2’19 and 2,16 bps in Q3’19.

In 2019 average fee at 2,19 bps. vs. 2,21 bps in 2018

vs. 2.18 bps in 2017.

PLN mn

1

1 Other cash market instruments, other fees paid by market participants

2.6

Q2’19

20.9

2.6

2.6

Other

2.4

22.0

2.9

Q4’19

2.5

30.6

Shares

Q3’19

2.4

1.5

Derivatives

32.0

28.4

29.9

2.52.6

Q1’19

27.1

2.7

22.5

2.7

Fixed income

3.2

20.4

2.8

2.1

Q4’18

24.1 -9.3%

-11.4%

Q4’19: 33,8%

1

Q4'18 Q1’19 Q2’19 Q3’19 Q4’19

Shares – value of trade (EOB, PLN bn)

49.0 51.2 46.3 49.0 44.9

-8.4% YoY

-8.4% QoQ

Futures and options – volume of trade (mn contracts)

2.2 1.7 1.6 2.0 1.7

-23.8% YoY

-14.7% QoQ

Treasury bonds – TBSP, cash transactions (PLN bn)

46.6 36.4 17.8 21.1 10.6

-77.3% YoY

-50.0% QoQ

Treasury bonds – TBSP, conditional transactions (PLN bn)

75.4 57.9 70.5 35.3 32.9

-56.4% YoY-6.7% QoQ

Page 40: PREZENTACJA template A4 · Velocity ratio: 31.0% in Q4’19 vs. 33.2% in Q3’19 and 32.9% in Q4’18. Velocity ratio 31.8% in 2019 vs. 32,3% w 2018 r. WIG20 lost 5.56% in 2019 and

40

Listing revenue on the financial market

Listing revenue

Issuer activity

PLN mn

Q4’19: 5,3% One debut on the Main Market (Selvita split by

separation: Selvita + Ryvu Therapeutics) in Q4’19.

Three debuts on NewConnect in Q4’19.

Seven debuts on the Main Market in 2019 (including

five transfers from NC). Fifteen debuts on the

NewConnect in 2019.

Total listing revenue: PLN 4.3 mn in Q4’19 vs.

PLN 5.7 mn in Q4’18.

Free float on the Main Market: 50.0% at the end of

Q4’19 vs. 52.0% at he end of Q4’18.

Q4’18 Q1’19 Q2’19 Q3’19 Q4’19

Number of new listings on the Main Market

0 2 2 2 1

Capitalisation of domestic companies (PLN bn)

578.9 597.7 594.4 551.1 550.2

-5.0% YoY

-0.2% QoQ

Value of IPOs (PLN mn)

0 10 40 5 9

0.8 0.7

4.8

Q4’18

0.0

4.6

5.0

Q1’19

4.3

0.7

Q2’19

4.2

0.8

Q3’19

Listing

Introduction

5.75.3

5.1

Q4’19

4.3

4.3

-14.4%

-24.4%

1 The Group reported a decrease in revenue from listing fees and the revenue from fees for introduction although the value of issued and introduced non-Treasury debt instruments increased year on year in 2019. The main reason why the recognisedfees for introduction were lower in 2019 is the application of IFRS 15. The Exchange Management Board decided to no longer recognise one-off revenue from the introduction of debt instruments to trading as of 1 January 2019; however, the total adjustment on the recognition of the fees under IFRS 15 was recognised in Q4 2019. The revenue from fees for introduction of debt instruments to trading was adjusted by PLN 763.9 thousand and taken to deferred income.

1

Page 41: PREZENTACJA template A4 · Velocity ratio: 31.0% in Q4’19 vs. 33.2% in Q3’19 and 32.9% in Q4’18. Velocity ratio 31.8% in 2019 vs. 32,3% w 2018 r. WIG20 lost 5.56% in 2019 and

41

Revenue from information services –financial market

Revenue from information services1

Data vendors, subscribers and non-display clients

PLN mn

Q4’19: 15,2%

Q1’19Q4’18 Q2’19 Q3’19

12.011.812.2

11.5

Q4’19

12.2

+6.3%

+3.5%

In Q4'19 (and in 2019) the highest quarterly (and annual) revenues

coming from information services in the history of the GPW Group

New clients in different market segments attracted in Q4’19:

4 non-display clients in Q4’19 (9 clients in 2019)

1 user of processed data (9 users in 2019)

1 client calculating indices using GPW data (2 clients in 2019)

Rapid growth in WIBOR data sales in 2019:

36 non-display clients in 2019

1 user of real-time data in 2019

3 users od delayed data in 2019

The number of GPW and TGE data subscribers rised in 2019.

Q4'18 Q1'19 Q2'19 Q3’19 Q4’19

Number of subscribers (thou.)

248.0 253.9 250.1 238.6 260.3

+5.0% YoY

+9.1% QoQ

Number of vendors

78 80 82 83 83

6.4% YoY

0% QoQ

Non-display

65 83 86 88 94

+44.6%. YoY

+6.8% QoQ

1 Following the introduction of a separate item: Commodity market information services, the presented data include only the revenue from the financial market and may differ from the presentation in previous quarters

Page 42: PREZENTACJA template A4 · Velocity ratio: 31.0% in Q4’19 vs. 33.2% in Q3’19 and 32.9% in Q4’18. Velocity ratio 31.8% in 2019 vs. 32,3% w 2018 r. WIG20 lost 5.56% in 2019 and

42

Revenue from the electricity and gas markets

Trading revenue – commodity market

Investor activity on the commodity market

PLN mn

Q4’19: 22.9%

Q4’18 Q1’19 Q2’19 Q3’19 Q4’19

Electricity – volume of trade (TWh)

67.3 44.3 52.9 65.0 66.7

-0.9% YoY

+2.6% QoQ

Natural gas – volume of trade (TWh)

46.1 28.5 37.3 39.6 40.7

-11.9% YoY

+2.6% QoQ

Property rights – volume of trade (TWh)

10.5 10.9 21.1 5.6 6.3

-40.0% YoY+11.2% QoQ

3.0

Q4’18

3.2

2.4

15.9

Q2’19

7.3 Property rights

3.0

Q1’19

Other

3.5

12.5

3.0

5.74.7

3.3

20.8

Energy

7.6

4.9

3.2

Q3’19

Gas

18.8

8.7

Q4’19

6.7

3.4

3.3

18.3

3.5

3.1

22.1

-2.5%

-11.9%

1

1 Other fees paid by market participants at TGE, IRGIT and InfoEngine

Decrease in revenues from electricity trading in Q4'19 to PLN 4.9

million (-13.8% YoY), resulting from a decrease in turnover on

the forward market and reductions in transaction fees with

liquidity support programs.

Stable revenues from gas trading at the level of PLN 3.4 million

(-1.5 YoY) is the effect of maintaining a high volume in Q4'19.

A decrease in revenues from property rights trading to PLN 6.7

million (-22.4% YoY), resulting from a decrease in turnover in

property rights - mainly due to termination of trading in

cogeneration certificates at the end of June 2019.

Increase in revenues from "other fees from market participants"

to PLN 3.3 million (+ 10% YoY).

Page 43: PREZENTACJA template A4 · Velocity ratio: 31.0% in Q4’19 vs. 33.2% in Q3’19 and 32.9% in Q4’18. Velocity ratio 31.8% in 2019 vs. 32,3% w 2018 r. WIG20 lost 5.56% in 2019 and

43

Revenue from clearing

Revenue from clearing

Revenue from operation of the Register1 Activity of participants of the Register of Certificates of Origin

Decline in revenues from clearing in Q4'19 to PLN 12.4

million (-4.6% YoY).

Lower revenues from Register of Certificates of Origin in

Q4'19 equal to PLN 5.1 million (-16.8% YoY) - mainly as a

result of termination of activity in the area of redemption

of cogeneration certificates of origin.

In the whole of 2019, in the Guarantees of Origin Register

for electricity generated in RES, transactions with a volume

of 19 124 096 MWh were concluded, which is the best

result in the history and a 13.5% increase YoY.

PLN mn

PLN mn

Q4’18 Q1’19 Q2’19

6.1

Q3’19

7.69.0

6.2

Q4’19

5.1 -18.0%

-16.8%

Q3’19

10.9

Q4’18

12.412.9

Q1’19 Q2’19

12.210.8

Q4’19

+14.0%

-4.6%

Q4’19: 15.4%

Q4’19: 6.3%

1 including revenue from the Register of Guarantees of Origin

Q4’18 Q1’19 Q2’19 Q3’19 Q4’19

Volume of issued property rights (TWh)

7.2 18.0 8.3 4.8 4.0

-43.7% YoY

-17.9% QoQ

Volume of cancelled certificates of origin (TWh)

6.8 7.2 19.9 13.1 5.4

-20.7% YoY

-58.8% QoQ

Guarantees of Origin – volume of trade (TWh)

9.8 6.0 4.1 4.1 4.9

-50.0% YoY

+19.5% QoQ

Page 44: PREZENTACJA template A4 · Velocity ratio: 31.0% in Q4’19 vs. 33.2% in Q3’19 and 32.9% in Q4’18. Velocity ratio 31.8% in 2019 vs. 32,3% w 2018 r. WIG20 lost 5.56% in 2019 and

Cost/income ratio (C/I)2: 59.0 in Q4’19 vs. 48.0 in Q4'18. Annual C/I in 2019: 53.9 vs. 50.1 in 2018

Depreciation and amortization: PLN 9.4 mn in Q4'19 (+19.1% YoY,+5.8% QoQ). The increase in YoY depreciation is mainly due to the implementation of the new standard - IFRS 16 "Leasing". Despite the impact on the financial statements in terms of presentation, IFRS 16 did not have an impact on operating activities and cash flows in 2019.

Total employee costs: PLN 19.9 mn (+9.0% YoY and +4.0% QoQ). The increase results, among others from greater employment dictated by the implementation of the development strategy and the increase in remuneration.

External services: PLN 15.3 mn (+28.1% YoY,+33.0% QoQ). The YoY increase is due to higher IT infrastructure maintenance costs, the introduction of a pilot „Analytical Coverage Support Program” and external consultancy costs.

44

Higher operating costs due external services and salary increases

Operating expenses: PLN 47.4 mn (+11.6 % YoY and -31.2% QoQ)

Change in operating expenses

1 Other includes rent, fees and charges (net of the KNF fees), and other operating expenses2 C/I based on reported data

PLN mn

PLN mn

47.4

2.7

0.0

9.2

12.9

4.3

Total employee costs

7.9

Q2’19

11.5

18.3

43.3

Q4’18

19.319.4

10.1

Q1’19

9.40.0

11.9

9.4

3.1-6.2

External services

8.9

36.1

19.2

11.5

2.7

Q3’19

0.0

19.9

15.3

2.7

Q4’19

PFSA fees

D&A

Other

42.4

54.3

3.4

Q4’18

1.5

Depreciation and

amortization

1.6

Total employee costs

External services

-1.6

Rent

0.3

Taxes (inc. PFSA fees)

-0.3

Q4’19Other

42.4

47.4

1

Page 45: PREZENTACJA template A4 · Velocity ratio: 31.0% in Q4’19 vs. 33.2% in Q3’19 and 32.9% in Q4’18. Velocity ratio 31.8% in 2019 vs. 32,3% w 2018 r. WIG20 lost 5.56% in 2019 and

The Group's share in the profits of associates in

Q4’19 was PLN 1.9 mn (+1.0% YoY and -58.6%

QoQ). In 2019, the profit share amounted to PLN

11.3 mn vs. PLN 10.6 mn in 2018

KDPW result:

in Q4’19, the Group's share in the net profit of

the associate KDPW (WSE holds 33.33% of

shares) amounted to PLN 1.8 mn vs. PLN 2.1

mn in Q4’18.

In the whole of 2019, the Group's share in the Polish

Rating Agency (PAR) loss amounted to PLN -0.6 mn

vs. -0.2 mn PLN in 2018.

In 2019 the Group’s share in the profit of the

„Centrum Giełdowe” at the level of PLN 0.5 mn vs.

PLN 0.4 mn in 2018

45

Share of profit of entities measured by the equity method

Share of profit of entities measured by the equity method

Change of share of profit of entities measured by the equity method

1.07

-0.31

4.74

-0.17-0.18

1.94

2.10

Q4’18 Q1’19

3.77

Q2’19

-0.16

Q3’19

0.00

0.991.83

Q4’19

1.92

3.64

4.69PAR KDPW CG

PLN mn

0.18

Q4’18

0.11

Q4’19

-0.271.92 1.94

PLN mn

CG

(24.79%)KDPW

(33.33%)

Polish Rating

Agency

(33.33%)

Page 46: PREZENTACJA template A4 · Velocity ratio: 31.0% in Q4’19 vs. 33.2% in Q3’19 and 32.9% in Q4’18. Velocity ratio 31.8% in 2019 vs. 32,3% w 2018 r. WIG20 lost 5.56% in 2019 and

46

GPW Group’s consolidated statement of financial position

The increase in total assets

as at December 31, 2019

compared to September

30, 2019 is mainly the

result of an increase in the

balance of cash and cash

equivalents. Cash

increased quarterly by PLN

27.9 mn, annualized - by

PLN 92.6 million mainly as

a result of an increase in

cash on current accounts

of companies.

The increase in short-term

liabilities as at December

31, 2019 compared to the

balance as at September

30, 2019 is mainly the

result of an increase in

other short-term liabilities

(regarding current VAT

settlements).

PLN mn 31.12.2018 31.03.2019 30.06.2019 30.09.2019 31.12.2019

Non-current assets, including among others 580,5 598,2 586,2 585,6 590,1

Property, plant and equipment 108,2 104,5 100,6 97,3 102,0

Intangible assets 254,6 250,1 246,8 247,3 246,6

Share of profit of associates 207,3 207,9 204,8 208,4 210,3

Current assets, including among others 636,9 733,2 771,9 645,4 666,7

Trade and other receivables 69,4 66,5 73,2 56,2 45,2

Financial assets measured at amortised cost 377,5 361,7 217,7 333,7 329,0

Cash and cash equivalents 188,7 302,6 478,1 253,4 281,3

Total assets 1 217,4 1 331,4 1 358,1 1 231,1 1 256,8

PLN mn 31.12.2018 31.03.2019 30.06.2019 30.09.2019 31.12.2019

Equity 887,8 911,9 821,2 859,1 873,5

Non-current liabilities 269,0 281,0 281,2 282,6 283,5

Liability under the bond issue 244,0 244,1 244,2 244,3 244,4

Current liabilities, including among others 60,6 138,5 255,7 89,3 99,8

Trade payables 8,6 19,9 31,9 13,8 11,6

Employee benefits payable 14,3 13,0 13,6 16,5 17,2

Contract liabilities 3,6 32,7 22,2 12,0 4,4

Other current liabilities 25,3 54,6 171,9 34,0 41,7

Total equity and liabilities 1 217,4 1 331,4 1 358,1 1 231,1 1 256,8

Page 47: PREZENTACJA template A4 · Velocity ratio: 31.0% in Q4’19 vs. 33.2% in Q3’19 and 32.9% in Q4’18. Velocity ratio 31.8% in 2019 vs. 32,3% w 2018 r. WIG20 lost 5.56% in 2019 and

II. Business activity in Q4 2019 8

IV. GPW Group financial results in Q4 2019 38

III. Market highlights and opportunities 13

V. Appendices 48

I. Executive summary of GPW Group 3

Page 48: PREZENTACJA template A4 · Velocity ratio: 31.0% in Q4’19 vs. 33.2% in Q3’19 and 32.9% in Q4’18. Velocity ratio 31.8% in 2019 vs. 32,3% w 2018 r. WIG20 lost 5.56% in 2019 and

GPW Group’s consolidated statement of comprehensive income

48

YoY decrease in revenues is a result of the

decrease in revenues on the financial market

(by PLN 10.7 mn) and commodities (by PLN 3.6

mn).

Operating expenses YoY increased by PLN 7.3

mn compared to 2018 mainly as a result of: an

increase in employee costs and other employee

costs (an increase of PLN 9.0 mn caused mainly

by an increase in the number of employees and

higher salaries) and higher costs of external

services (increase by PLN 3.9 mn)

4Q’19 net profit includes a one-off setting up

provisions of PLN 15.5 million in respect of a

potential VAT payable in the subsidiary

commodity clearing house IRGiT (GPW

indirectly holds 100% of IRGiT). The provisions

have been charged to financial expenses (which

include interest on tax payable). Company

informed about this one-off with a current

reports 5/2020 and 6/2020 on 1 April 2020.

GPW Group net profit for 2018 includes a one-

off. In 2Q’18 GPW sold its interest in the

associate Aquis Exchange Limited (+PLN 36.8

mn impact on GPW Group net profit). Adjusted

net profit for 2018 would amount to PLN 146.9

mn.

PLN mn Q4'18 Q4'19 2018 2019

Revenue 88,5 80,3 346,8 336,1

Financial market 48,1 43,6 191,9 185,0

Trading 30,6 27,1 124,3 117,5

Listing 5,7 4,3 22,8 19,6

Information services 11,8 12,2 44,8 47,9

Commodity market 40,0 36,0 153,6 149,9

Trading 20,8 18,3 78,5 75,2

Register of Certificates of Origin 6,1 5,1 28,7 27,8

Clearing 12,9 12,4 45,9 46,3

Information services 0,1 0,2 0,5 0,7

Other operating income 0,4 0,7 1,4 1,2

Operating expenses 42,4 47,4 173,8 181,1

Other income 1,3 1,5 2,7 6,6

Impairment gains/(losses) on receivables -1,7 -1,8 -3,2 -1,9

Other expenses 0,8 0,8 2,3 3,3

Operating profit 44,8 31,7 170,2 156,3

Financial income 2,6 1,8 8,5 8,9

Financial expenses 2,6 17,8 9,0 25,5

Balance on financial income and expencies 0,0 -16,0 -0,5 -16,6

Impairment loss on investments in other entities -0,1 0,0 45,8 -1,1

Share of profit/(loss) of entities measured by

equity method1,9 1,9 10,6 11,3

Profit before income tax 46,6 17,6 226,0 149,8

Income tax 9,5 6,4 42,3 30,5

Net profit 37,1 11,2 183,7 119,3

EBITDA 52,7 41,2 202,0 193,2

Page 49: PREZENTACJA template A4 · Velocity ratio: 31.0% in Q4’19 vs. 33.2% in Q3’19 and 32.9% in Q4’18. Velocity ratio 31.8% in 2019 vs. 32,3% w 2018 r. WIG20 lost 5.56% in 2019 and

GPW Group’s consolidated statement of cash flows

49

• Positive cash flow from operating activities

achieved in 2019 was higher by PLN 54.6

mn compared to 2018 mainly as a result

of favorable changes in balance sheet

volumes (in 2019, an increase in assets

and liabilities of PLN 55.6 mn in 2018 - a

decrease by PLN 26.8 mn).

• Positive cash flow from investment

activities achieved in 2019 compared to

negative cash flow from 2018 is mainly

the result of a better balance on

transactions regarding the purchase and

sale of financial assets valued at

amortized cost (corporate bonds, bank

deposits).

• Negative cash flows from financing

activities achieved in 2019, i.e. PLN 142.7

mn were lower by PLN 43 mn than cash

flows from 2018 mainly as a result of a

dividend payment higher by PLN 41.1 mn.

• The Group's capital expenditure in 2019

amounted to PLN 16.7 mn (PLN 21.2 mn

in 2018).

PLN mn 12 months period ended 31 December of 2019 2018

Total net cash f lows f rom operating activities 191,1 136,5

Net prof it of the period 119,3 183,7

Adjustments: 113,7 -5,5

Income tax 30,5 42,3

Depreciation and amortisation 37,1 31,8

Gains on investment/losses on impairment of investment in other entities 1,1 -45,8

Share of (profit)/loss of entities measured by equity method -11,3 -10,6

(Gains ) on assets measured by equity method -5,2 -4,6

Interest on bonds 7,3 7,3

Other adjustments -3,1 0,9

Change of assets and liabilities : 57,3 -26,8

Trade receivables and other receivables 24,1 -7,2

Other liabilities (excl. contracted inves tments and dividend payable) 9,1 -3,4

Provis ions for liabilities and other charges 15,5 -0,1

Interest on tax payable (paid)/refunded -1,3 -0,1

Income tax (paid)/refunded -40,7 -41,7

Total cash f lows f rom investing activities: 44,4 -84,2

In: 846,1 772,6

Sale of property, plant and equipment and intangible assets 4,3 1,4

Dividends received 7,0 0,4

Sale of financial assets measured at amortised cost 829,3 709,7

Interest on financial as sets measured at amortised cost 5,2 3,5

Out: -801,7 -856,8

Purchase of property, plant and equipment -9,2 -13,0

Purchase of intangible as sets and advances for intangible as sets -7,5 -8,3

Purchase of financ ial as sets measured at amortised cos t -780,8 -835,6

Payments towards share capital of subs idiaries exc luded from -4,0 0,0

Total cash flows from financing activities: -142,7 -99,7

In: 3,7 0,0

Grants received 3,7 0,0

Out: -146,4 -99,7

Dividend paid -133,4 -92,3

Interes t paid on bonds -7,3 -7,3

Net (decrease)/increase in cash and cash equivalents 92,9 -47,4

Cash and cash equivalents - opening balance 188,7 235,9

Cash and cash equivalents - closing balance 281,3 188,7

Page 50: PREZENTACJA template A4 · Velocity ratio: 31.0% in Q4’19 vs. 33.2% in Q3’19 and 32.9% in Q4’18. Velocity ratio 31.8% in 2019 vs. 32,3% w 2018 r. WIG20 lost 5.56% in 2019 and

26,0%

3,2%

3,0%2,8%

5,8%

14,3%

44,6%

0,3%

Information services (FinancialMarket)

Listing

Trading - other

Trading - fixed income

Trading - derivatives

Trading - shares

Commodity Market: 44,6%

Financial Market: 40,8%

2019

Other revenue (0,3%)

2010 2012 20182011 20152013 20162014

311

2017

226

2019

269 274 284318 328

352 347 336

CAGR: +6,7%

GPW Group’s revenue (PLN mn)

GPW Group’s revenue structure

50

4,9%

3,6%

10,2%

3,7%

8,3%

13,8%

0,2% Information services (CM)

Clearing

Register of Certificates of Origin

Trading - other

Trading - property rights

Trading - gas

Trading - energy

including TGE Group: 149,9 PLN mn

Market Data:14,3%*

GPW Group: 336,1 PLN mn

* Information services revenue only from Financial Market

Page 51: PREZENTACJA template A4 · Velocity ratio: 31.0% in Q4’19 vs. 33.2% in Q3’19 and 32.9% in Q4’18. Velocity ratio 31.8% in 2019 vs. 32,3% w 2018 r. WIG20 lost 5.56% in 2019 and

Revenue drivers:

Value of trade in equities

Structure of orders (small,

large, mid-sized)

51

Financial market: Trade in equities

Value of trade in equities and number of transactions

Volatility – WIG and WIG20

1 Share in GPW Group’s revenue in Q4 2019

26.0%1

160 167

38.2

2008 2009

51.4

2015

207

48.4

70.1

55.3

2010

251

2011

46.4

2018

188 205

2012

65.9

51.9

72.1

220

2013

55.5

236

2014

204203 190

2016

80.2

2017

73.1

191

2019

Average number of transactions per session (thous.)

Value of trading in equities, EOB (PLN mn)

10,3%

20,0% 20,1%

28,5% 28,0%

15,4%

19,3%

13,9% 14,3%12,6% 13,6%

15,4%

11,6%14,9%

12,6%

13,6%

24,4%22,7%

34,4% 35,0%

19,2%22,0%

16,5% 16,8%14,2%

16,3%18,7%

14,8%

18,6%

14,9%

2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019

WIG WIG20

Page 52: PREZENTACJA template A4 · Velocity ratio: 31.0% in Q4’19 vs. 33.2% in Q3’19 and 32.9% in Q4’18. Velocity ratio 31.8% in 2019 vs. 32,3% w 2018 r. WIG20 lost 5.56% in 2019 and

52

Financial market: Trade in derivatives

Volume of trade in derivatives

Volume of trade in futures vs. volatility

1 Velocity ratio (value of trade in WIG20 futures to value of trade in WIG20 stocks)2 Share in GPW Group’s revenue in Q4 2019

20122008 2009

9.5

80.4

14.7

132.8

13.812.6

131.0

2016

168.1

2010 2014

15.5

8.0

2013

8.28.2

137.2

11.3

184.8

12.6

138.1

104.2

2015 2018

165.0

140.1

7.6

2017

143.6

171.2

7.0

20192011

Number of Open Interest (thous.)

480%

139%

404%

132%116%

439%

181%121% 116% 127%121% 106%

PLN bn

1DLR

125 124 152192

149 174 160 162 147

174160 163

602

502

668

347

207 201 212 196170

210 204174

2008 201620132009 20152010 2011 20142012 2017 2018 2019

Trading- WIG20 futures

Trading – WIG20 stocks

Revenue drivers:

Volume of trade in futures

Number of open interest

Volatility

3.2%2

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53

Financial market: Other instruments and fees paid by participants

Value of trade on Treasury BondSpot Poland, PLN bn

Number of exchange members

1 Share in GPW Group’s revenue in Q4 2019, trade in debt instruments2 Share in GPW Group’s revenue in Q4 2019, other trading fees paid by market participants

3,0

188

731612

498 439339

158

338260 197

135

307450

347327

260

255

196

147

86

845

407

20092008 2015

599

20112010 2012 2013 2014

324

2016 2017 2018 2019

84

282

101

1.037 1.062

767

413

535

Cash transactions

Repo transactions

18 17 1929 27 26 26 28 25 25 25 22

31 2930

32 33 31 30 2928 28 27

28

2010

49

2008 2009 201420122011

61

2015

53

2013 2016 2017 2018 2019

4946

6057 56 57

53 52 50

Local Remote

2,9%2

Revenue drivers:

Value of trade in Treasury

bonds

Number of exchange members

3.0%1

2.6%2

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54

Financial market: Listing

Capitalisation of domestic companies

IPO/SPO value and number of companies

1 Share in GPW Group’s revenue in Q4 2019

5.8%1

543446

523593 591

517 557

671579 550

2013

36.8%

2012

30.0%27.9%

20192010

36.5%

2011

32.0%

34.8%

2014

28.9%

2015 2016

34.8%

2017

30.0%

2018

25.0% Revenue drivers:

Capitalisation at YE

Value of new issue shares and

bonds

Number of issuers

Market Capitalisation/GDP (%)

Market Capitalisation of domestic companies (PLN bn)

585

777867 895 902 905 893 890 852 824

43.13

201720132011 2012 2014 2015 2016

15.69

2018 2019

22.71

9.23

2010

3.66 4.35

90.79

5.24

1.15

3.121.36

3.622.07

3.958.10

0.35

5.36

0.08

7.734.14

IPO, PLN bn

SPO, PLN bn

Number listed companies, Main Market and NewConnect

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55

Financial and commodity market: Information services

Number of data vendors

Number of subscribers (thou.)

1 Total share of „information services”' from the financial and commodity markets in the revenues of the GPW Group 2019

14.5%1

18 19 20 21 24 27 24 25 25

42 46

32 33 37 37 34 3130 28 27

3637

2015201420122009

58

2016

5752

2010 2011 2013 2017 2018 2019

50

58 5854 53 52

7883

Domestic

Foreign

187

307327

288

262240

221 225248 248

260

20142009 2010 2011 20132012 2015 2016 2017 2018 2019

Revenue drivers:

Number of data vendors

Number of subscribers

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56

Commodity market: Trade in electricity and gas

Volume of trade in electicity (TWh)1

Volume of trade in gas (TWh)

1 Data for 2006-2013 include trade on the GPW Energy Market poee2 Share in GPW Group’s revenue in Q4 2019

8.5%2

gaz

226.1

109.1

13.4

2008 20132009

176.6

25.2

74.5

161.6

2010

154.3

21.7

2011 2015

22.3

21.3

198.3

118.1

23.7

2012

163.0

2014

25.1

27.6

99.0

2016

86.4

2017

27.7

87.9

2018

186.7

2019

10.1 9.1

130.8139.4

186.7

126.6111.7

228.9

195.0

33.9

105.1

24.0

13.9

92.9

2015

111.6

24.6

89.9

2016

114.7

2017

23.7

2019

2.4

106.8114.5

138.7143.3

2.0

123.5

22.6

2014

119.6

2018

0.0

0.0

2012

0.4

2013

6.5

146.1

Forward

Spot

Spot

Forward

Revenue drivers:

Volume of trade in electricity

Volume of trade in gas

Share of spot and forward trade

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57

Commodity market: Trade in property rights

Spot trade in property rights (TWh)

Number of participants of the Register of Certificates of Origin

1 Share in GPW Group’s revenue in Q4 2019

28.5

13.2

20162008 2012

6.825.9

35.242.4

9.6

43.9

23.1

2009

35.6

2010

15.1

35.7

17.5

2011

19.9

21.8

2013

32.1

3.9

2014

26.6

18.0

2018

32.3

2015

24.0

58.1

26.2

59.3

29.839.3

2017

30.8

2019

29.9

44.8

28.3

50.8

62.2

36.0

58.9

50.248.8

Green Certificates

Cogeneration certificates

1,862

2011 2012 2013 2014

1,445

2015 2016 20182017 2019

1,656

2,117

2,539

2,970

3,4493,706

3,980

10.2%1

Revenue drivers:

Volume of trade in property

rights

Share of certificate categories

in trade

Number of register participants

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58

Commodity market: Register of Certificates of Origin

Volume of issued certificates of origin (TWh)

Volume of cancelled certificates of origin (TWh)

1 Share in GPW Group’s revenue in Q4 2019

8.3%1

21.615.3

21.5

2008

24.2

2009

10.8

25.8

20172012

10.7

2010

25.926.6

47.2

2011

11.9

17.6

27.3

2013

27.6

20.6

20152014

23.4 18.9

28.3

29.5

36.6

2016

24.5

24.0

2018

19.9

50.7

27.6

31.9

2019

37.241.1 42.2

48.5 47.5

35.1

14.1

21.0

Cogeneration

Green Certificates

9.6

2009

43.2

26.116.613.8

18.8

30.8

2008 2010

15.4

52.1

2016

10.3

2011

27.4

12.4

22.3

20152012

36.2

8.8

20172013

20.0

0.6

2014

27.89.1

13.2

16.819.025.2

26.9 28.0

2018 2019

20.1

17.8

25.8

42.9

25.027.0

20.6

47.0 45.6

Green Certificates

Cogeneration

Revenue drivers:

Volume of issued property rights

Volume of cancelled property

rights

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Glossary (1)

59

Cogeneration

Colocation

COR

ECM

EOB

ETF

ETP

FESE

Free float

Green certificates

HVF

technological process where electricity and heat are generated simultaneously in a combined heat and power plant; thanks to lower consumption of fuel, cogeneration provides material economic benefits and environmental advantages over separate generation of heat in a traditional heat plant and of electricity in a condensation power plant

a service where the exchange provides physical space and allows clients to install hardware and software in direct proximity to the exchange’s trading system

Certificates of Origin Register, register maintained by the Polish Power Exchange responsible for registration and record-keeeping of certificates of origin

Equity Capital Market, value of equity raised on the financial market

Electronic Order Book, trade excluding block trades

Exchange Traded Funds, track the performance of an exchange index. Similar to other investment funds, ETFs are regulated under EU Directives and national regulations. ETF can daily create and cancel ETF units. ETF units are exchange traded on the same terms as shares.

Exchange Traded –Products, structured products – financial instruments whose price in linked to the value of a market indicator (the underlying instrument)

Federation of European Stock Exchanges

free float shares are shares other than held by shareholders which hold more than 5% each, Treasury shares for cancellation, and registered shares; free float includes all shares held by investment funds, pension funds and asset managers and shares participating in depository receipt issue programmes

Certificate of origin is a document cerifing that the Energy was produced from the renewable Energy resources

High Volume Funds, a promotion programme addressed to investment funds actively trading in shares on GPW

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Glossary (2)

60

HVP

IPO

ISV

MCO

MRC

MTF

NEMO

OTC

REIT

RES

High Volume Provider, a promotion programme addressed to legal entities whose core business is to invest on financial markets only on own account

Initial Public Offering, in this presentation, PwC IPOwatch Europe reports and FESE data, IPO means all offerings where a company first raises equity on the capital market, either in a public offering or a private placement

Independent Software Vendors, providers of client software for exchange members used to trade on the trading platform

Market Coupling operator

Multi-regional Coupling, European project of operational integration of spot electricity markets

Multilateral Trading Facility, addressed mainly to institutional investors, offers trade in stocks combined with very short lead times for the execution of orders as well as low trading fees. MTFs are usually operated by investment firms (banks, brokers) or securities exchanges. MTFs offer trade in the same stocks as those listed on other markets and do not provide listings.

Nominated Electricity Market Operator is a market operator designated by the competent authority of the European Union Member State to participate in single day-ahead or single intraday coupling

Over the Counter, a non-regulated market outside the exchange, where trade in non-standard financial instruments is made directly between counterparties without the mediation of a securities exchange

Real Estate Investments Trusts are special companies and funds investing in real estate; they manage a real estate portfolio to earn a fixed income from rent, and pay out most of the earnings to shareholders as dividend

renewable energy sources

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Glossary (3)

61

RGO

SPO

Post-trade services

UTP

White certificates

Velocity

Register of Guarantees of Origin, register of instruments supporting renewable energy sources, which aim to provide disclosure for the end customer as to the amount of electricity generated in a renewable source and supplied to the power distribution or transmission network

Second Public Offering

depository, clearing and settlement services

Universal Trading Platform, the trading system of the Warsaw Stock Exchange supplied by NYSE Technologies

Certificates of origin of energy efficiency

a measure of liquidity of trade in stocks equal to turnover in a period to average capitalisation at the beginning and at the end of the period

61

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62

Contact:

GPW Investor Relations

Phone 22 537 72 50

[email protected]

www.gpw.pl/relacje_inwestorskie

Disclaimer

This presentation has been prepared by Giełda Papierów Wartościowych

w Warszawie S.A. (“Warsaw Stock Exchange”, “GPW” or “Company”) for its

shareholders, analysts, and other contractors. This presentation has been prepared

solely for information and is not an offer to buy or sell or a solicitation of an offer to

buy or sell any securities or instruments. This presentation is not an investment

recommendation or an offer to provide any services.

All efforts have been made to present the data in this presentation; however, some

data are derived from external sources and have not been independently verified.

No warranty or representation can be given that information in this presentation is

exhaustive or true.

GPW has no liability for any decisions made on the basis of any information or

opinion in this presentation. GPW informs that in order to obtain information about

the Company reference should be made to periodic and current reports published in

compliance with applicable provisions of Polish legislation.

IR events

30 April 2019

Introduction of the period of limited investor

communications preceding the publication of Q1’20

financial results

14 May 2019

Publication of consolidated quarterly report for Q1 2020

30 July 2019

Introduction of the period of limited investor

communications preceding the publication of consolidated

report for H1’20

13 August 2019

Publication of consolidated report for H1 2020

22 October 2019

Introduction of the period of limited investor

communications preceding the publication of Q3’20

financial results

5 November 2019

Publication of consolidated quarterly report for Q3 2020