Giełda Papierów Wartościowych S.A.

Business Model

GPW operates two-sided regulated marketplaces and related market infrastructure. It does not normally take directional positions in the securities or commodities traded on its platforms. Instead, it collects fees for providing admission, trading, information, benchmark, clearing, settlement-support and registry services. On the financial market, the largest revenue source is transaction fees from equities and other equity instruments. These fees depend primarily on turnover but are also affected by the type of transaction, instrument, participant and incentive programme. The Group additionally earns fees from derivatives, debt instruments, issuer admissions and listings, market-data subscriptions, index licensing and reference-rate administration. On the commodity market, revenue is generated from electricity, natural-gas and property-right trading, clearing and settlement, participant fees and energy-market registries. The model combines volume-sensitive revenue with subscription-like and recurring revenue. Because the cost of maintaining regulated technology and market infrastructure does not increase proportionally with each transaction, higher volumes can produce substantial operating leverage.

Competitive Positioning

GPW is the largest exchange group in Central and Eastern Europe and operates the dominant organised public markets for Polish equities, listed corporate debt and exchange-traded electricity and gas. At the end of 2025 it ranked third among European FESE exchanges by the number of listed domestic companies and remained the largest exchange in its region by domestic-equity capitalisation. Its competitive advantages include the concentration of Polish liquidity, regulatory licences, recognised indices, established relationships with brokers and issuers, integrated commodity-market infrastructure and ownership interests in strategic institutions such as KDPW. These features create strong network effects: investors prefer venues with liquidity, while issuers prefer markets with investors and analyst coverage. However, GPW competes with much larger European exchange groups, multilateral trading facilities, foreign listing venues, over-the-counter markets and international market-data providers. Its domestic equity market remains smaller relative to Poland's economy than the leading Western markets. The company must therefore expand participation, products and data services rather than rely solely on its incumbent position.

Economics & Capital Allocation

GPW Group generated PLN 551.9 million of revenue in FY2025, an increase of 18.7% year over year. Financial-market revenue rose by 23.1%, while commodity-market revenue increased by 12.5%. Operating expenses increased more slowly than revenue, by 9.9%, reducing the cost-to-income ratio to 66.1% from 71.4%. EBITDA reached PLN 216.5 million, operating profit PLN 179.8 million and net profit PLN 197.6 million. Reported results included non-recurring impairments and related grant income associated principally with non-core projects. In Q1 2026, revenue increased by 27.5% to PLN 168.8 million. Financial-market revenue rose by 34.3% to PLN 114.3 million and commodity-market revenue by 17.1% to PLN 50.6 million. EBITDA increased by 42.3% to PLN 77.9 million, while net profit attributable to shareholders reached PLN 69.6 million. Main Market equity turnover increased by 41.9% to PLN 157.8 billion, while equity-trading revenue rose by 40.0%, demonstrating strong but not perfectly proportional volume sensitivity because the average fee declined by 2.5%. The Q1 2026 cost-to-income ratio improved to 57.7%, EBITDA margin reached 46.1% and operating margin 41.7%. At 31 March 2026 the Group reported PLN 474.3 million of liquid funds and approximately PLN 453.5 million of net cash. Free cash flow for the twelve months ended March 2026 was PLN 140.2 million.

GPW's capital allocation is centred on dividends, technology investment, cybersecurity, market development and possible strategic acquisitions. The Group has a strong net-cash position and limited conventional financial debt, giving it flexibility to fund investment from internal cash generation. Its largest current project is GPW WATS, with an indicated budget of approximately PLN 164.5 million. The system is intended to replace the externally supplied UTP platform, support new products, improve technological independence and potentially create commercial opportunities. The project has nevertheless been postponed several times, and the planned production launch is now 5 October 2026. GPW is also investing in digital tools, data infrastructure and artificial intelligence. At the same time, it is liquidating, merging or reducing expenditure on subsidiaries outside the core exchange businesses after these activities failed to generate satisfactory returns. The dividend policy targets distributions of 60–80% of consolidated net profit. The recommended dividend from 2025 profit is PLN 3.40 per share, representing approximately PLN 142.7 million and a 72.2% payout ratio. The principal capital-allocation question is whether GPW can preserve an attractive and growing dividend while financing technology modernisation and avoiding further value-destructive non-core investments.

Long-term Risks

GPW's long-term performance depends on the relevance and liquidity of Poland's public markets. Strong trading years can generate excellent margins, but exchange activity is cyclical and influenced by factors management does not control, including global risk appetite, interest rates, foreign capital flows and the performance of the largest Polish companies. The decrease in the number of listed companies and historically limited IPO activity remain structural challenges. Without a stronger pipeline of attractive issuers, liquidity may become increasingly concentrated and younger companies may seek private or foreign financing. WATS is both an opportunity and a material risk. A successful launch could improve independence, product flexibility and long-term economics, but repeated delays increase execution risk, prolong dual-system expenditure and postpone expected benefits. Following implementation, higher depreciation and the expensing of previously capitalised work will initially raise reported operating costs. Commodity-market activities provide diversification, but they are exposed to energy regulation and changes in certificate-support schemes. The Group must also protect highly sensitive trading and benchmark infrastructure against operational and cyber incidents. Finally, State Treasury voting control and the possibility of politically influenced strategic decisions may result in objectives that do not always maximise value for minority shareholders.