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NewConnect
PROPOSITION FOR SME COMPANIES
September 2014

POLANDS KEY POSITION IN THE ENLARGED EU

Economy:
25 years ago Poland opened a new chapter in its history
and initiated the process of important political and social
change and thorough economic transition.
Poland has become a major actor within the European Union.
One of the biggest countries among new EU members with
38m population.
One of the fastest growing economies in Europe with stable
and solid financial system.
The only EU country that have a positive growth rate during
the recent crisis.

Key statistics:
Low Inflation
Stable currency
GDP growth forecast in 2014: 2.5%
2008 - 2013 accumulated GDP: 20.15%
Ratings
- A2 - Stable by Moodys
- A - Stable by S&P
- A - Stable by Fitch

EU GDP (%)

2008

2009

2010

2011 2012 2013f 2014f

2008-2013
accumulated
GDP

Poland

5.1

1.6

3.9

4.5

2.0

1.6

2.2

20.15

Slovakia

5.8

-4.9

4.4

3.0

1.8

0.9

2.8

11.13

Malta

3.9

-2.8

4.3

1.4

1.1

2.9

1.8

11.11

Sweden

-0.6

-5.0

6.6

2.9

0.9

1.6

2.5

6.19

Romania

7.3

-6.6

-1.1

2.3

0.6

3.5

2.2

5.57

Germany
Bulgaria

1.1
6.2

-5.1
-5.5

4.0
0.4

3.3
1.8

0.7
0.6

0.4
0.9

1.8
1.7

4.21
4.12

Austria

1.4

-3.8

1.8

2.8

0.9

0.3

1.8

3.31

Belgium

1.0

-2.8

2.3

1.8

-0.1

0.2

1.2

2.34

Lithuania

2.9

-14.8

1.6

6.0

3.7

3.3

3.6

1.14

Czech Republic

3.1

-4.5

2.5

1.8

-1.0

-0.9

1.6

0.80

France

-0.1

-3.1

1.7

2.0

0.0

-0.2

1.1

0.62

Luxemburg

-0.7

-5.6

3.1

1.9

-0.2

2.1

1.6

0.35

EU (27 countries)

0.4

-4.5

2.0

1.6

-0.4

-0.1

1.4

-0.93

UK

-0.8

-5.2

1.7

1.1

0.3

1.7

1.7

-1.37

Netherlands

1.8

-3.7

1.5

0.9

-1.2

-0.8

0.9

-1.60

Euro area
(18 countries)

0.4

-4.5

1.9

1.6

0.7

-0.4

1.2

-1.82

Estonia

-4.1

-14.1

3.3

8.7

4.5

2.2

4.0

-1,21

Hungary

0.9

-6.8

1.1

1.6

-1.7

1.1

1.4

-4.10

Denmark

-0.8

-5.7

1.4

1.1

-0.4

0.4

1.7

-4.10

Cyprus

3.6

-1.9

1.3

0.4

-2.4

-5,4

-3.9

-4.56

Finland

0.3

-8.5

3.4

2.8

-1.0

-1.4

1.0

-4.78

Spain

0.9

-3.8

-0.2

0.1

-1.6

-1.2

0.9

-5.73

Slovenia

3.4

-7.9

1.3

0.7

-2.5

-1.1

-0.1

-6.33

Portugal

0.0

-2.9

1.9

-1,3

-3.2

-1.4

0.6

-6.79

Ireland

-2.2

-6.4

-1.1

2.2

0.2

-0,3

2.2

-7.57

Italy

-1.2

-5.5

1.7

0.4

-2.4

-1.9

0.7

-8.72

Latvia

-2.0

-17.7

-1.3

5.3

5.2

4.1

4.1

-8.95

Source: Ministry of Finance, Polish Central Statistical Office, Eurostat, EBOR.

THE WSE MARKETS IN BRIEF

The Warsaw Stock Exchange organises trading in financial instruments on three markets:
MAIN MARKET
in operation since 16 April 1991
supervised by the Polish FSA
notified to the European Commission as a regulated market
law and regulations implementing EU directives

NEWCONNECT
alternative trading system, working since 30 August 2007
organised, maintained and supervised by the WSE
designed for small entities and developing companies

CATALYST
debt instruments market
founded on 30 September 2009
consists of two trading platforms: as a regulated market
and as an alternative trading system

THE SME SECTOR IN POLAND

STRUCTURE BY SIZE

CONTRIBUTION TO GDP

Small (w/o micro)

2.8%

Medium & Large

1.2%
Micro
96.0%

Large
20%

Large
33%

Micro
42%

Medium
80%

Medium
14%
Small (w/o
micro)
11%

Total share in the market: 99,8%

Total contribution to the GDP: 72,3%

Division of enterprises in Poland:

Micro up to 9 employees
Small between 10 and 49 employees

Medium between 50 and 249 employees

Large over 250 employees
Source: Report on the Condition of the Small and Medium-Sized Enterprise Sector in Poland,
Polish Agency for Enterprise Development, 2011

NEWCONNECT THE MARKET FOR SMEs

SMEs
a great potential for a further growth
a driving force of the Polish economy

strong demand for capital

Benefits stemming from the NewConnect market

for SMEs

Providing solutions for the expansion of high-potential, young and innovative companies
Attracting individual investors
Allocating more resources for R&D
Performing as an enterprise incubator for start-ups
Serving as a preparatory step towards the WSE Main List
for the national economy
Developing companies that account for a substantial part of the GDP
Strengthening Polish stock market position in the CEE region as an efficient network of investors, companies and clients

A strong SME sector is a key reason for the popularity and importance of the NewConnect market.

NEWCONNECT AS A HIGH GROWTH EQUITY MARKET

Capital raised on NewConnect (EUR mln)

Markets founding date

30th August 2007

Initial offerings value *

c.a. 416 EUR (m)

350

Secondary offerings value *

c.a. 465 EUR (m)

300

Market capitalization *

2.38 EUR (bn)

250

Number of companies
of foreign companies

438
10

154

200

Number of new listings in 2014

17

Number of Authorized Advisers

78

Number of Market Animators

11

150
100
30

50
0

39

4
44

2007

2008

16
13
2009

Market cap (EUR m.*, LHS)

3 000

58
2010

IPO

Note: as of 4th September 2014

Number of companies as of 04.09.2014

173

2011

110

125
27

54

31

2012

2013

4
1H 2014

SPO

New listings (RHS)

172

200
2 579

2 500

2 493

2 381

2 001

180
160
140

2 000

120
1 500

1 227

1 000
500

61
283

24

343

100

89

80

86

60

610

42
26

40
17

20
0

2007

2008

2009

2010

2011

2012

2013

1H 2014
Note: EUR/PLN = 4.19

NEWCONNECT AS A HIGH GROWTH EQUITY PLATFORM

FOR INVESTORS
An attractive market for investors
Efficient access to dynamically growing companies from Poland and the CEE region
Lower trading fees compared to Main Market
Execution benefits from the stock exchange-organized market, including security of trading
NewConnect LEAD leaders among NewConnect issuers
The main purpose of launching the NC Lead segment was to indicate the biggest issuers and their most liquid shares, which are most likely to fulfill the WSE
Main Market criteria.
The NC Lead segment has the following requirements:
quantitative: as capitalization, liquidity, time of functioning as a public company,
qualitative: referring to corporate governance application and appropriate performance of information requirements.
Breakdown by industry*

13

11

13

8 12

68

24
19
59

37
24
45

Investors structure in 2007-2014*

Retail
Support services
Investment services
IT
Construction
Technology
Financial services
Media
Real estate
Health care
Travel&Leasure
e-Trade
Eco-energy
Recycling
Telecomunication

41
37

100%

3%

2%

2%

* as of September 2014

3%
10%

7%

6%

90%
80%
70%
60%
50%

92%

92%

89%

87%

77%

66%

62%

73%

40%
30%
20%
10%
0%

5%

6%

9%

11%

2007

2008

2009

2010

institutional

32

2%

20%

17%

2011

2012

individual

27%

32%

2013

2014

foreign
Source: WSE study
Data: as of June 2014

COMPARISON TO OTHER ALTERNATIVE MARKETS

Market Capitalization (EUR m)

Total number of transactions

9094
Warsaw Stock Exchange

6515

40091

383 397

55429
Oslo Brs

153 023

4450
1836

2580 2424

1697
639

151

618

366

NYSE Euronext

1 548 843

NASDAQ OMX Nordics & Baltics

Luxembourg Stock Exchange

922 249
541

Irish Stock Exchange

74 491

Deutsche Brse
Cyprus Stock Exchange

Number of companies listed

87

14

25

171

2 166

CEESEG - Budapest

3 883

Bratislava Stock Exchange

192

41

CEESEG - Vienna
438

181

249 669

145
Borsa Istanbul

64
23

21

18

26

34

8 516 939
BME (Spanish Exchanges)
Athens Exchange

0
497

Data: as of June 2014

ENTRY INTO NEWCONNECT

the status of a joint-stock company

nominal value of a single share - minimum 0,10 PLN (~0,024 EUR)
unlimited transferablility of shares
the company has not been declared insolvent nor is in the process of undergoing
liquidation proceedings

FORMAL
REQUIREMENTS

cooperation with an Authorized Adviser and Market Animator

preparation of an Information Document and an audited annual financial report
issuers equity worth of at least 500k PLN (~120k EUR)
issuers expectations vs. investors expectations
438 issuers on the NewConnect are competing for capital
many other enterprises interested in debut on the NewConenct
Will our equity story convince investors and win out over its competing projects in the

MARKET
ASPECTS

marketplace?
Does the offered share value keep up with dynamic changes in market share prices?
opportunity to raise capital at a lower cost
increased reliability to banks and customers
prestige and reputation of public company
the market valuation of shares
low costs of market debut and trading
excellent exposure to investors and clients

ADVANTAGES

TYPES OF LISTINGS AVAILABLE ON NEWCONNECT

PRIVATE PLACEMENT a private offering targeted at maximum of 99 entities or individuals. Regardless of the
size of the issue, admission to trading is based on a brief informational document approved by an Authorized
Adviser by the Warsaw Stock Exchange

PUBLIC SHARE ISSUE this path involves the same admission procedures as those applicable on the regular
market, in particular approval of the stock offering including the prospectus by the competent authority

CORPORATE GOVERNANCE

CORPORATE GOVERNANCE OF WSE

Corporate governance rules concern broadly
understood corporate governance practices.
The Best Practices include 4 sections:
Recommendations for Best Practices
of Listed Companies;
Best Practices of Management Boards
of Listed Companies;
Best Practices of Supervisory Board
Members;
Best Practices of Shareholders.

The Best Practices of WSE listed companies

aim at:
enhanced transparency of listed
companies,
improved quality of communication
between companies and investors,
strengthened protection of
shareholders rights, including those not
regulated by legislation, while refraining
from imposing a burden on listed
companies unbalanced by benefits
resulting from market needs.

www.corp-gov.gpw.pl - is the official

website of WSE devoted to the corporate
governance of listed companies.
provides information on the
implementation of The Best Practices
of WSE Listed Companiesand current
corporate governance initiatives of the
WSE and its EduPartners.
is a platform of communication between
the WSE and companies.
all WSE listed companies and other
interested parties are encouraged
to send questions and suggestions about
the content of this website.

DISCLOSURE REQUIREMENTS AND BEST PRACTICES

Disclosure requirements

More liberal requirements than in

Accounting Standards

the

National accounting standards applicable to

Best Practices

Based on comply or explain formula:

regulated market

the place of the issuers registered office or

Information transparency affecting the

Supported by the Authorized Adviser

(under some circumstances)

valuation of the company

Current reports (price-sensitive

Internationally recognized

Up-to-date corporate website as an

information)

element of information policy

Periodic reports

Annual report with remuneration of

quarterly

members of the companys boards and the

annual (audited)

Authorized Adviser
Monthly reports

THE NEWCONNECT AUTHORISED ADVISER

WHO IS AN
AUTHORIZED
ADVISER?

An investment firm or other entity providing business-related services, entered on the WSEs list
of NewConnect Authorized Advisers

Choosing a company of suitable quality (company verification)

Helping draw up an information document
Monitoring the progress of work on the information document and approving it
WHAT ARE THE
ADVISERS
DUTIES?

For at least three years from the debut:

working with the issuer in relation to meeting its disclosure requirements on the

NewConnect market
advising the issuer in relating to the functioning of an issuer on the NewConnect market

WHAT SHOULD
A CHOICE OF
ADVISER BE
BASED ON?

The Advisers experience in NewConnect to date

The sector in which the companies handled by the Adviser operate
The Advisers costs (information contained in companies Information Documents)
Possibility of combining the duties of Adviser with legal advice on transforming the firm into a
company with SA status

WHO PAYS FOR

THE ADVISER?

The costs of the Adviser are paid by the company

BENEFITS FROM LISTING ON NEWCONNECT

Access to inexpensive capital on average, companies on NewConnect raised 842k EUR annually
with an average cost of capital equal to 4,89%

Limited formal requirements regarding the initial public offering guarantees relatively low cost of capital
competetive to other capital sources

The prestige of a public company, listed on the exchange-regulated market and an opportunity to transfer
the stock into the Main List on Warsaw Stock Exchange (32 companies transferred in the last 7 years)

Increased exposure to foreign investors due to the steady increasing attractiveness of Polish SMEs

CONTACT

Warsaw Stock Exchange

ul. Ksica 4, 00-498 Warsaw, Poland
tel. +48 22 537 74 71

www.gpw.pl
www.newconnect.pl

Disclaimer

This presentation has been prepared by Gieda Papierw Wartociowych w Warszawie S.A. (the Company or WSE) solely for use by its shareholders, clients or analysts and should not be
treated as a part of any invitation or offer to sell any securities, invest or deal in or a solicitation of an offer to purchase any securities or recommendation to conclude any transaction, in
particular with respect to securities of WSE.
The information contained in this document has been compiled in good faith by the Company, however all users of this presentation should take note that some of the data are based or provided
to WSE by external sources and has not been independently verified. WSE does not make any representation as to accuracy, fairness, correctness or completeness of the information or the
opinions contained herein.
WSE shall not be liable for the consequences of any decision made based on information included in this presentation. WSE hereby informs persons viewing this presentation that the only source
of reliable data describing WSE financial results and events are current or periodic reports issued by WSE in satisfaction of its disclosure obligations under Polish law.