Good morning and welcome to all our guests in the room on the trading floor and everyone following us online. This is the conference presenting the financial results of the GPW Group in Q3 2024. Let me introduce the host, the speakers, Tomasz Bardziłowski, President of the Management Board of the Warsaw Stock Exchange, Marcin Rulnicki, Member of the Management Board of the Warsaw Stock Exchange, Piotr Listwoń, President of the Management Board of Towarowa Giełda Energii, and Michał Kułakowski, Director of Strategy and Investor Relations Department of the Warsaw Stock Exchange. My name is Robert Sienkiewicz. I'm the director of the Communication and Marketing Department of the Warsaw Stock Exchange hosting this meeting once again. Let's move on to the presentation of the results. Over to Tomasz Bardziłowski, President. Good morning and welcome to this conference dedicated to the results of the Warsaw Stock Exchange Group for Q3 2024.
Q3 was yet another quarter of growing revenue at a rate faster than the growth in expenses. The revenue of the group grew by 6% year on year, driven by the financial market where revenue grew by more than 9% year on year, mainly driven by revenue from trading and revenue from information services. On the commodity markets we saw stabilization of revenue, which we believe is a good outcome given the shrinking revenue from electricity trade, partly offset by growing turnover in natural gas. Operating expenses grew by 3.9% nearly 4% year on year. We are proud to say that this quarter was yet another quarter of a drop in the cost income ratio, down by half a percentage point to 69%.
EBITDA grew 7.2% in Q3, while the net profit attributable to the equity holders of the parent entity grew by almost 6% with a lower net financial income combined with a higher share of profit of associates moving on to the volumes and activity on the Polish and European markets. We are proud to say that once again the Warsaw Stock Exchange is a top European market by growth in turnover in euro, up by 35% year on year on the Warsaw Stock Exchange, the second best growth in Europe. We are also proud to say that our velocity ratio remained high on the Warsaw Stock Exchange. Our liquidity, the velocity ratio, was 37% in Q3. In the equity market, turnover in the zloty grew 29% year on year. Average fees dropped modestly, mainly due to an increased share of HVP and HVF traders and market makers.
In equity turnover, the share grew to 34% from 32% a year earlier. Revenue from equity turnover grew by 13% year on year to almost PLN 33 million. Last year we had high revenue from block trades, so the base effect means that the growth of turnover in EOB turnover was lower. In the derivatives market, we saw stabilization of turnover in WIG20 futures, turnover and stabilization in revenue from these futures, with a modest growth in volatility of indices. The HVP and HVF traders, however, were less active last quarter. The total turnover in derivatives grew by more than 8% year on year, whereas revenue from derivatives trade grew almost 4% to PLN 4.5 million in the debt market.
This was yet another quarter of high growth in turnover on Treasury BondSpot Poland, mainly driven by the fact that since April we've had a new market participant of TBSP, the Ministry of Finance. This participant uses a temporary promotion on fees, so the growth in turnover does not really impact the revenue as much. The revenue grew 8% year on year to just under 4 million PLN in Q3 in the debt market. Regarding transactions on the stock market, the SPOs, the IPOs, the ABBs, there was a strong pickup in Q3. In Q3 alone, SPOs and ABBs totaled more than 5 billion PLN as compared to under 1 billion PLN in Q3 2023. The most important development, the highlight of last week was the IPO of the Żabka Group, worth 6.5 billion PLN, one of the biggest IPOs in the history of the Warsaw Stock Exchange.
The fourth biggest and also the fourth biggest IPO in Europe this year, which of course improved turnover in equities. In October, equity turnover in Żabka stock crossed PLN 3 billion, representing more than 11% of total EOB equity turnover on the Warsaw Stock Exchange in October. We are proud to say that we quickly introduced additional instruments for investors. Futures and certificates based on shares which were traded several days after the IPO of Żabka. Żabka joined WIG 40 after the trading session on 29 October. And we hope that the IPO of the Żabka Group will be a good incentive for other companies that might want to be floated on the stock exchange. We're hoping that at least one big IPO will take place later this year. The Warsaw Stock Exchange. Turning over now to Piotr Listwoń, President of TGE. Good morning.
The commodity market in Q3 was marked by an increase in gas turnover and a decrease in electricity and Property Rights turnover. Let me move on to the different business lines of the Towarowa Giełda Energii. In the electricity market, the turnover volume grew by more than 15% quarter on quarter to 33 terawatt hours. There was a small decrease, however, year on year as 2023 had record high turnover on the spot market. We are proud with the growth in turnover in electricity year on year by 8.5% quarter on quarter by 21%. This was mainly due to better liquidity or better turnover in annual contracts. The biggest volumes traded last year. Contracting was mainly based on short-term contracts. The most popular contracts perhaps were weekly contracts with lower volumes, so the volumes were lower in Q3.
We saw good results in the gas market in the spot and forward segments, the same 34 terawatt hours compared to the electricity market, 27% up year on year. The volumes in Q3 increased thanks to the domestic production of natural gas with expanding capacity in the energy and heat sector. For instance, recently the Gryfino power plant was commissioned, RES Property Rights. Q3 was comparable to Q3 2023 for terawatt hours. The quarter on quarter, the turnover dropped by 13% due to the end of the settlement period in Q2 and the expiry of the Certificates of Origin. We are now presenting for the first time the results of another good business line, Guarantees of Origin. For ten years now, we have 3,000 participants in this register now. This comes as a response to the ESG needs of electricity buyers.
Entities which buy electricity need guarantees of origin of the electricity from renewable energy sources which are environmentally friendly. In Q3, the register sold transactions of nearly 12 TWh, up 26% year on year. The next slide presents the revenue from our markets. As you can see, the revenue is stable at PLN 202.1 million per quarter, quarter on quarter. We saw a positive impact on the gas and electricity markets as mentioned by Mr. Bardziłowski. In the beginning, however, the revenue from property rights were lower. The revenue grew 5% year on year, and we see stable revenue from clearing in our clearinghouse, a slight drop in Q3 due to lower clearing volumes on the spot electricity and property rights markets.
We are presenting the overall revenue from the operation of registers of the certificates and guarantees of Origin. In Q3, those revenues, the volumes rather on the register of certificates of origin dropped. However, we see a nice growth in volumes and revenue from the register of Guarantees of Origin, which grew 26% year on year, something we're very proud of. Good morning. Now let's turn to a number of slides which talk about our financials. Starting with an overview our P and L. In Q3 we've heard about the revenue from the previous speakers in detail. As regards the expenses, we'll move to another slide which talks about the expenses in great detail. So here let's look at the cumulative numbers year to date. Nine months into 2024, with a 7% increase in revenue and a similar growth rate in operating expenses.
The growth of revenue shows the same trends we just heard about strong growth in the financial market and flattish revenue on the commodity market. As regards the developments in the different lines under operating expenses, other expenses, GRC impairment due to a one-off of PLN 6 million. As a result, the net profit and the operating profit for the period was hit and was lower year on year. Net of that one-off, we see a modest growth between 2% and 3%. Let's move on to the expenses in Q3. I think this will be interesting to you when you look at the results. The key point for me is what we've heard about from Mr. Bardziłowski. The growth in expenses was below the growth rate of revenue for the second consecutive quarter. Improving our profit margins.
The cost optimization program we launched in Q2 is proving effective. It's important to say perhaps that many of the quick wins as regards cost savings and inefficiencies have already been implemented. But we still see some room to improve and optimize our costs as we look at our processes in detail and try to improve efficiency supported by IoT tools on a daily basis. So we see the potential. But this may take some more time than the quick wins that we've already completed. Other than that, the direction is right and we'll try to keep up this trend as long as possible. The key lines of operating expenses: employee costs up by 4.2%. Compared to the growth in general salaries in the economy, this looks quite good.
But this growth was driven by a number of factors, some one-offs included, which are listed in the box on the right-hand side at the bottom of the slide. The one-offs include the reorganization cost in Q3 2024 and also non-compete and severance pay, which adds to our costs. On the other hand, we have the inflation-linked benefit we recognized in Q3 2023 in the group, which increases the comparative base net of these two factors. The growth rate in employee costs was 7.4% and that's the number you want to look at. What else do we expect in employee costs in Q4? There's going to be more employee cost in Q4.
In October, the Warsaw Stock Exchange Group increased the salary pool by 6% in response to inflation and in implementation of the arrangement with the trade union, so expect that the costs, the employee costs in Q4, will be higher compared to Q3. External service charges, which is the other important contributor to operating expenses, grew 4%, which is not much, but this nets two important changes. A significant decrease in the costs of consultancy, down by more than 30%, on the other hand, an increase in external service charges related to the maintenance of our hardware, our infrastructure, and IT software, so these two factors net each other off, so we are not only seeing cost savings and optimizations, we are rather channeling the investments into more effective areas as a result of these measures. Let's go back to the previous slide for a moment.
As a result of these measures, the cost income ratio that we are paying a lot of attention to was reduced to 69.1%, which is 1.2 percentage points lower than in Q3 2023, and we will make best efforts to keep it down quarter after quarter. Now let's look at EBITDA, which has been discussed before. So, just as a summary, Q3 2024 EBITDA was PLN 42.5 million, up by 7.2%. Year on year, our profitability improved to 37.9%. That's the EBITDA margin. We think this was a solid result in Q3, and we hope to keep it up. Let's look at the CapEx. This is, I think, very interesting for you to look at. As you can see, our CapEx in Q3 alone was not high year on year at PLN 13.7 million. The biggest decrease was reported in infrastructure fixed assets. That's the dark navy blue part of the bar.
The same happens in Q3 2024 as you can see in the slide, especially if you look at cumulative numbers. Nine months into 2024, the CapEx in infrastructure fixed assets was only PLN 6.1 million zloty compared to PLN 16.6 million in the same period of 2023. Why are we having a smaller CapEx? That's partly the result of the changes that took place this year. Changes in the management, overall changes in the. It seems, so we needed to review and verify the investment plans. Hence the CapEx was put on hold. We had less expenses in these last two quarters, but in Q4 we expect to catch up. So the CapEx in Q4 is likely to be much higher than the average for the three quarters of the year.
I think we are not getting close this year to last year's CapEx numbers, which were very high both in absolute figures and as CapEx to revenue. Once again, Q4 will likely require bigger CapEx to catch up with the slowdown in the development of IT infrastructure later this year. It is our aspiration to keep CapEx to revenue below the numbers we've been reporting over the past two years. On this occasion, very briefly about the budget for our trading system WATS that we are currently developing, an important contributor to our CapEx. That's a result of many months of our IT officers reviewing the efforts so far in the plans to complete the WATS project. As a result of the review, we have shifted the scheduled rollout date of the WATS to November next. What does it mean?
We've had to review the budget of the project because the project will take much longer than expected. Version 1 of WATS supporting AMX Stock Exchange in the BondSpot market. That budget is PLN 134 million. The approved budget that also covers version two which will support the BondSpot, ATO all market and a preliminary analysis of version three to provide functionalities for the derivatives market. The total budget for version 1.2 and the analysis of version 3 that we've approved is PLN 152.9 million zloty. Now very briefly about our liquidity position. The cash flows, no surprise here, very solid cash flows from operating activities LTM last 12 months up to Q3 2024, nearly PLN 145 million zloty. What's important to note is that represents nearly 29% of the EBITDA. Our EBITDA is almost 100% cash based.
Looking at free cash flows 12 months ended September 2024, those stood at nearly PLN 80 million, up by 20% year on year mainly due to the lower CapEx that we reported on the previous slide. The cash position is PLN 350 million of free cash net cash, which is solid liquidity to implement our investment projects without any risks to liquidity. No surprise I guess to anyone. Thank you Marcin. Let's talk briefly about our day to day focus and priorities. As we mentioned on other occasions, we want to grow our core business. We believe there's a lot to be done to catch up with the growth of our product offering. This is what we are focusing on, development of new products, especially for retail investors. We hope that the coming months and quarters will bring more news.
We are also focusing on improving liquidity on the stock exchange, especially in the SME segment, and we are considering new products to improve liquidity there. We have new ETFs traded on the exchange. More on that later, and this is also part of our overall strategy which we will probably be discussing in more detail in the coming weeks in the broader context that we consider very important, the context to grow the market at large. We are holding meetings or participating in meetings of a group of stakeholders coordinated by the Ministry of Finance to step up the growth of the Polish capital market with a number of different initiatives. We are also working hard, as you probably know, on the introduction of REITs to the Polish market. Another area in which we are very active is the regional cooperation with other regional exchanges.
I'm also happy to say that we have the new Issuer Council at the Warsaw Stock Exchange. The first meeting will take place shortly. In addition, as we've always been saying, we are still reviewing the non core projects outside our core business and we are focusing on optimizing our costs. This process continues as Marcin said. Next year we will focus on improving the efficiency of our internal processes. Later this year, after approval from our corporate bodies, we expect to present our new strategy for the development of our Warsaw Stock Exchange Group. And now a surprise for everyone. I guess a promotion on ETFs exchange traded funds. We'd like to present this promotion by the end of the year. No fees. Zero exchange fees for exchange members on ETF trading.
This promotion will be supported by an educational and marketing campaign to spark more interest in investing in ETFs. I hope this new promotion will fit in nicely with the growing popularity of passive investment products listed on the Warsaw Stock Exchange. We hope this will improve interest in ETFs and related instruments. Long-term investments through IKE, IKZE. The savings, the pension savings accounts which are now in high season. I hope the investors in that process will also consider ETFs on the Warsaw Stock Exchange. It's a promotion for our exchange members. I hope this will generate more interest on the part of investors and grow turnover in ETFs. We hope this will also help to grow this offering with ETFs from exchanges. We now have 13 ETFs listed on the stock exchange and one ETC on gold.
We have five funds on domestic shares, five on foreign shares and we encourage all members to take advantage of our promotion. Thank you. So this was a quick overview of the Q3 results. I'm very happy that we've been so effective. I'm looking at the questions we've received online. Let's move on to the Q and A. If there are many questions and we can't take them all, please contact us by email, and after this meeting we will definitely come back to investors, shareholders, analysts and the media to take any questions. Are we ready for the Q and A? Let's begin. Question one from Przemek Staniszewski. Well, of course this question is about expenses and revenue. A 69% CI as you said. Marcin, Przemek is asking when will you reach 50% as promised by the previous management boards.
Well, we have talked about our aspiration for our cost base, but please note that our expenses are now in a different place than a couple of years ago. We've seen a substantial increase in employee costs. We have increased our headcount, especially in IT with the development of our proprietary trading system and more. We want to be a competitive employer. So we can't really promise that in this segment on this line of employee costs that there will be reductions. We actually expect to see ongoing growth in line with the growth in salaries in the economy. We want to remain competitive, but we have seen opportunities for savings, especially in external service charges. And now we are going to work, as we said, to improve the effectiveness of our processes so we can take advantage of synergies across the group's companies. Thank you.
We still have questions from Przemek about expenses. IT costs have been growing by 25% year on year. Employee benefits by, well, also a two-digit number. With these growth dynamics, is it possible for Warsaw's stock exchange to improve its profitability? You've seen Q3 results, which I believe are a good reflection of our aspiration level. We want of course, the revenue to grow even faster, but we have control over cost. Single digit numbers, low single digit numbers is something we are aspiring to achieve in the quarters to come. I hope this will help to improve our profit margins and profitability now. Thank you. A difficult question about the President's intentions. Let me read it out. Konrad Krasuski, Bloomberg News. The CEO said he's expecting new IPOs after Żabka's IPO.
However, the performance of Żabka's stock may have had a chilling effect on other candidates. What's your intuition? Why have we seen this kind of performance? This is the question from Konrad. Well, first of all, I'd like you to think about investing on the stock exchange as a long term process. It doesn't happen overnight that you make gains. I'm sure that big companies listed on the Warsaw Stock Exchange, those that generate profits now that their valuation will grow. So in the long term our investors will make gains. But this takes time. It takes time. But of course the Warsaw Stock Exchange is hoping for new big IPOs. Let's hope that this year we will see more of those. Now moving on, we have questions about the future of the Warsaw Stock Exchange relating to new products.
The Association of Individual Investors is asking what about your plans to launch foreign ETFs on GlobalConnect. Yes, this plan still stands. GlobalConnect is an important market from our perspective. You may say this is a kind of competition for domestic instruments, because now we're talking about foreign stocks. But we believe that investors had access to foreign investments at their local brokerage firms, or it's one click away really on your mobile phone. We want the investors to have access to diversified foreign investments so they can diversify their portfolios. Here on the Warsaw Stock Exchange, we are planning to continue expanding our offering the number of stocks listed on GlobalConnect. In the days to come, you'll hear more about the stocks on GlobalConnect. But our plan is to have more foreign ETFs listed in this market segment. Thank you. We have more questions from Przemek Staniszewski.
We have already addressed the issue of GlobalConnect in part concerning your plans and projects. But Przemek is asking about your investment in the Armenia Securities Exchange. What's the plan? Well, we haven't changed our plan. We are a majority investor in the Armenia Securities Exchange AMX. You've seen this year we've seen a decrease in revenue and profits of the AMX due to lower depository fees. One of the main business lines of the AMX is a central securities depository. But we hope that when it comes to the financial results, those will stabilize. We have a lot of ideas and strategic initiatives presented by the AMX management. We hope these will be implemented to improve the financials. Thank you very much. We have a number of questions from the Association of Individual Investors.
SII Michał Żuławiński is asking about the strategy the President has already hinted at. Will this strategy be presented before the end of this year? As I said, this is the plan. We are still awaiting the final approvals before we can share the directions of our development. But as we've said on a number of occasions, as the new board of the Warsaw Stock Exchange, we want to focus on the core business, on growing the capital market, because we can see a lot of opportunity and we believe that the growth of the market will help to improve our results performance, including our financials of the Warsaw Stock Exchange. Another question from Michał Żuławiński, the Association of Individual Investors. Your strategic directions of development following the update of the strategy. Are they expected to talk about acquisitions as well?
Well, we will want to be active, more active in the M and A market. We've mentioned that on other occasions as well. We see the opportunities for that. But we want to focus mainly on the financial services industry. This is the segment we are already looking at closely and I hope the first conclusions of this analysis will soon be delivered within the coming months. We have a question about ETFs. A number of questions actually. Polish Press Agency business: Are you expecting new listings of ETFs on the stock exchange? Are you talking to any potential candidates? Yes, we are working with the main provider of ETFs on the Warsaw Stock Exchange. There's been some press reports that this partner is working on ETFs relating to our dividend or total return indices.
We will present an interesting instrument shortly as an opportunity to invest in a broad range of dividend-paying companies on the Warsaw Stock Exchange. Another question about ETFs in the context of the news you've just mentioned, our program of promotions running till the end of the year. No fees on ETFs. This program for the reduction of fees in 2025, will it cover other instruments than ETFs next year? Well, at this point this program covers ETFs. Our strategy is to support the development of passive investment instruments to support long-term savings and investing on the exchange through ETFs. The current version of the program is open till the end of the year. We are also in discussions with market players and exchange members to possibly extend this promotion into 2025 next year. We want to focus when it comes to promotions and educational ETFs.
We want to focus on ETFs that are based on SME indices. We believe that greater investor activity in this segment could impact in a good way the liquidity in the SME segment, improve their valuations and open the way to raising capital for companies in this segment. Thank you. There's a question from our foreign partners. Wood & Company are asking. They congratulate you on your results in Q3, but they are also asking when are we going to publish the date for the presentation of the new strategy? We'll try to make it happen before Christmas. Just give us a little bit of time and then we will present that strategy. We will, however, be focusing on initiatives that grow the market. We will be focusing on cooperation with stakeholders in the market. This is largely dependent on legislative amendments.
We hope this kind of initiatives will in the mid term lead to improvements to the market. I'm refreshing the Q and A page. We've gone through a long list of questions. Some of the questions replicate others that have already been answered. But there's a question from Przemek Staniszewski about Q3, the annual awards 6 million up 25% year on year. Could you comment on those? Why did those annual employee benefits or bonuses increase so much? Well, concerning the annual bonuses, these are correlated with the exchange's profitability directly. The bigger our profits, the more benefits not only to the shareholders but also to our employees to participate in this growth. This is also how we talk to employees about cost optimization. We believe that they will be beneficiaries of the process as well.
We have questions from the Foundation for Polish Innovation, but these are questions to the regulator release. So we will take these questions by email if you don't mind. I'm still refreshing the Q&A page. Some of them have already been answered as they seem to replicate others. Let me see once again. We've actually answered your questions. 40 minutes. This is one of the shortest and most effective meetings we've had. Everything seems to be crystal clear after Q3 and after nine months of the thank you very much for this event. Once again, if you have more questions, if you have questions as investors, analysts, media representatives, please come and talk to us by email. We will take your questions as soon as possible. Have a great day and see you once again next quarter. Thank you.