Nordnet AB · OMXSTO:SAVE
Nordnet AB — Q2 2022 Earnings Presentation
33 slides from Nordnet AB's earnings presentation, July 2022
Slide 1: Nordnet Q2 2022 Results presentation
Nordnet Q2 2022 Results presentation
Slide 2: Key highlights second quarter 2022
Key highlights second quarter 2022 Considerable macro uncertainty due to war in Ukraine, high inflation and Positive interest rate sensitivity interest hikes 30,100 new customers1 and SEK 8bn Continued strong cost control net savings during the quarter UK trading launched – first new Higher interest
Slide 3: Financial highlights second quarter 2022
Financial highlights second quarter 2022 Customers Savings capital Number of trades Thousands SEKbn Million +15%1 -2% -20% 1,643 703 691 16.3 1,475 13.1 Q2 2021 Q2 2022 -52 Q2 2021 Q2 2022 Q2 2021 Q2 2022 Terminated customers 2022 Adjusted revenues Adjusted operating expenses Adjusted profit before
Slide 4: Strong long-term growth in customers and savings capital
Strong long-term growth in customers and savings capital Customers Savings capital Thousands SEKbn 1 643 802 1,601 691 1,221 565 914 765 395 669 567 490 272 286 433 235 367 395 200 314 344 166 193 224 136 157 90 102 90 104 86 103 128 49 55 39 21 36 -52 2010 2018 2007 2011 2005 2020 2008 2017 2013 20
Slide 5: New customers are younger, higher share of women and have more savings in funds
New customers are younger, higher share of women and have more savings in funds Share of customers per cohort and age1 Share of customers by cohort and gender1 % (‘000) 2019 and older 2020 2021 2022 1 1 617 861 310 365 82 5% 3% 2% 2% 3% 5.0% 2022 4.5% 23% 2021 29% 34% 36% 4.0% 39% 3.5% 2020 19% 3.0%
Slide 6: New customers remain active and drive a higher margin
New customers remain active and drive a higher margin Revenue margin H1 2022 Share of cross-border trades H1 2022 bps % | million trades 82 22.7 3.5 3.3 0.9 30.4 25% 29% 22% 27% Cross-border 34% 51 53 43 39 Pre 2020 2020 2021 2022 All Pre 2020 2020 2021 2022 All Share of trades per application H1 20
Slide 7: Strong cost control drives profit despite negative macro
40% 60% 30% 50% 0% 10% 20% 0.25 0.05 0.15 0.20 0.30 0.00 0.10 quarter 1Q11 1Q11 2Q11 2Q11 3Q11 3Q11 4Q11 4Q11 1Q12 1Q12 2Q12 2Q12 3Q12 3Q12 4Q12 4Q12 1Q13 1Q13 2Q13 2Q13 3Q13 3Q13 4Q13 4Q13 1Q14 1Q14 Annualised growth (LHS) 2Q14 2Q14 3Q14 3Q14 4Q14 4Q14 1Q15 1Q15 Annualised customer growth 2Q15 2Q15
Slide 8: Negative market climate has impacted growth in customers and net savings
Negative market climate has impacted growth in customers and net savings New customers by month1 Net savings per month Thousands SEKbn 2021 2022 254 2021 2022 49 66 11 55 9 9 9 30 46 8 76 6 6 6 94 6 6 33 5 5 27 27 27 23 23 22 20 19 20 20 3 3 3 17 10 11 2 8 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov
Slide 9: Only pan-Nordic digital savings and investment platform at scale
Only pan-Nordic digital savings and investment platform at scale Sweden is still the largest market… …but other Nordic countries are …and at higher margins growing faster… Nordnet’s LTM 6M 2022 revenue by country (%) Nordnet’s number of customers by country Revenue margin by country (bps)2 SEKm June
Slide 10: Geographical diversification enables stable development
Geographical diversification enables stable development Sweden Norway Customers1 Savings capital Customers1 Savings capital Thousand SEKbn Thousand SEKbn +8% -9% +15% +7% 431 437 299 350 116 124 271 311 -27 Q2 2021 Q2 2022 -9 Q2 2021 Q2 2022 Q2 2021 Q2 2022 Q2 2021 Q2 2022 Denmark Finland Customers1
Slide 11: Continued high revenue driven by resilient margins and diversified income streams
Continued high revenue driven by resilient margins and diversified income streams Adjusted revenue by income type Savings capital by product SEKm1 SEKbn Brokerage Funds Deposits Net transaction related Net fund related income Net Interest income Other income² 802 Adjusted revenue / avg. savings capi
Slide 12: Liquidity portfolio to generate ~SEK900m in 2023
Liquidity portfolio to generate ~SEK900m in 2023* * assuming Q2 2022’s volume, currency allocation and credit spreads Volume 1 SEKbn Lending Liquidity portfolio Lending Liquidity portfolio Other ~900 MSEK 2 61 240 Net interest income 58 52 53 205 47 47 186 184 187 170 178 SEKm 27 27 161 174 24 25 15
Slide 13: Significant growth in number of trading customers
Share of all customers 70% 10% 100% 30% 40% 80% 90% 20% 50% 60% Q1-17 Q2-17 Q3-17 Q4-17 Q1-18 Q2-18 Trading customers Q3-18 Q4-18 Q1-19 Share of all customers Q2-19 Q3-19 Q4-19 Q1-20 Q2-20 Q3-20 Q4-20 Q1-21 Q2-21 Q3-21 Number of trading customers Q4-21 Q1-22 Q2-22 100 000 700 000 200 000 300 000 500
Slide 14: Trading seasonality shows a clear V-shape
Trading seasonality shows a clear V-shape Trades per customer per trading day Share of full year trades per month 2018-2019 2020 2021 2022 2018-2019 10.4% 0.34 10.5% 0.32 10.0% 0.30 0.28 9.5% 0.26 8.9% 9.0% 8.7% 8.8% 0.24 8.5% 8.4% 0.22 8.5% 8.2% 0.20 8.0% 8.0% 7.8% 7.8% 0.18 7.5% 0.16 7.5% 0.14 7.0
Slide 15: Rigorous focus on cost discipline to drive operating leverage
Rigorous focus on cost discipline to drive operating leverage Key drivers of operating leverage Operating leverage drives improvement in cost margin Adjusted operating expenses1 in absolute terms and in relation to avg. savings capital (bps)2 Adjusted operating expenses (SEKm) Adjusted operating exp
Slide 16: Select Q2 2022 product highlights
Select Q2 2022 product highlights Nordnet One – digital tool and allocation into one Seven new versions of our award-winning app of Nordnet’s newly launched fund-of-funds with lots of user-friendly features and flows Shareville comments Allocation widget Analytics tab UK trading launched – first new
Slide 17: Financial performance
417 Nordnet Financial performance | A
Slide 18: Continuous growth in customers and savings capital
Continuous growth in customers and savings capital Customers Savings capital by asset class Thousands SEKbn 20% 15% 25% 27% 34% 39% 38% 37% 31% 17% 11% 401 404 416 426 449 463 477 479 469 Brokerage Funds Deposits 1,601 1,619 1,643 802 1,537 773 1,475 728 74 703 81 691 1,389 648 67 73 1,221 154 85 56
Slide 19: Resilient income proving diversification of Nordnet's Nordic business model
Resilient income proving diversification of Nordnet’s Nordic business model… Adjusted revenue by income stream SEKm Net transaction related income Net interest income Net other provision income Net fund related income Net financial transactions Other income Full year 2020: SEK2,689m Full year 2021:
Slide 20: …with maintained stable operating expenses…
…with maintained stable operating expenses… Adjusted operating expenses SEKm General administrative expenses Depreciation and amortisation Other operating expenses Full year 2020: SEK1,064m Full year 2021: SEK1,141m LTM 6M 2022 SEK1,170m 299 297 296 287 280 283 278 22 10 11 259 260 258 14 11 14 14 4
Slide 21: …resulting in considerable operating leverage
…resulting in considerable operating leverage Adjusted revenue Adjusted operating expenses³ Adjusted profit before tax SEKm SEKm SEKm 44 61 53 45 32 24 17 16 25 59 67 63 3,639 3,308 2,689 2,451 2,086 CAGR +3% 1,524 1,576 1,097 1,141 1,170 1,064 377 2019 2020 2021 LTM 6M 2019 2020 2021 LTM 6M 2019 20
Slide 22: High quality loan portfolio with loan losses remaining at very low levels
High quality loan portfolio with loan losses remaining at very low levels June 2022 savings capital Financial assets Lending SEKbn SEKbn SEKbn 1 1 Liquidity portfolio Lending Unsecured Mortgage Margin lending Funds 61 26.7 19% 23.2 47 12.4 11.5 691 12% Deposits 23 27 7.6 10.3 68% Brokerage 4.0 4.0 6
Slide 23: Maintained capital position
Maintained capital position Total capital ratio Leverage ratio % % Capital requirement Additional Tier 1 ratio Leverage ratio Requirement including P2 guidance CET1 ratio Buffer over total capital requirement Minimum requirement 4.9% 4.5% 2.2% 4.8% 4.3% 4.2% 3,9% 20.9% 21.6% 19.4% 3,0% 3.3% 6.3% 16.
Slide 24: Key strategic ambitions
Key strategic ambitions Engaged customers Engaged customers Building the best platform for savings and investments #1 NPS & high retention Upward trend on eNPS Engaged Attract and retain top employees talent HEADLI Profitable Capture Nordic growth NE growth potential Stable cost level
Slide 25: Medium-term financial targets
Medium-term financial targets Target Customer growth Average savings capital per customer2 Dividend payout ratio % SEK (‘000) % 34% 31% 477 469 409 416 Around SEK450k “Deliver superior total returns to per customer shareholders via a pay-out ratio 15%1 of 70% of statutory net income, 13% Around 15%
Slide 26: Nordnet is taking market share in a growing market
Nordnet is taking market share in a growing market Share of total population Addressable market growth outlook1 Market share of addressable market1 December 2021 | Million Savings capital, SEKtln December 2021, SEK bn Nordnet’s share Market size current Market size extended Nordnet’s share of addres
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Slide 28: Financial highlights second quarter 2022
Financial highlights second quarter 2022 SEKm unless otherwise stated Q2 2022 Q1 2022 QoQ % Q2 2021 YoY % Condensed P&L1 Adjusted total income 728 891 (18%) 833 (13%) Adjusted operating expenses (296) (297) (0%) (283) 4% Adjusted profit before tax 420 580 (28%) 536 (22%) KPIs New customers2 +30,100
Slide 29: Summary P&L
Summary P&L LTM 6M LTM 6M SEKm Q2 2022 Q1 2022 QoQ % Q2 2021 YoY % YoY % 2022 2021 Adjusted total income 728 891 (18%) 833 (13%) 3 308 3 337 (1%) Adjusted operating expenses (296) (297) 0% (283) 4% (1 170) (1 108) 6% Net credit losses (9) (10) (9%) (11) (20%) (40) (26) 55% Imposed levies: Resolution
Slide 30: Items affecting comparability
Items affecting comparability Q2 Q1 Q4 Q3 Q2 Q1 FY FY FY FY FY SEKm 2022 2022 2020 2020 2020 2020 2021 2020 2019 2018 2017 Non-recurring items – Expenses Delisting from Nasdaq (45) Acquisition of Netfonds - (35) (16) Deduction right VAT 38 (9) (11) (20) (30) AML process upgrade (10) (4) IPO related
Slide 31: Strong customer satisfaction driving market share gains
Strong customer satisfaction driving market share gains Customer satisfaction remains at high levels in all countries… NPS …which translates into increasing market shares across our geographies Market share based savings capital in relation to total addressable market 2020A 2021E 9.7% 7.7%2 8.0% 5.6
Slide 32: Nordnet has a capital light business model
Nordnet has a capital light business model Nordnet’s income model Off balance sheet On balance sheet Liquidity portfolio Credit portfolio Savings capital SEK ~691bn SEK ~61bn SEK ~27bn ~68% ~19% ~12% ~46% ~38% ~15% Margin Mortgage Shares Funds Deposits Unsecured lending3 lending Net commission Net c
Slide 33: Share of trading per application
Share of trading per application Distribution of trades per application 100% 8% 9% 8% 9% 9% 9% 9% 9% 8% 7% 7% 7% 6% 10% 9% 10% 11% 12% 90% 15% 21% 20% 21% 19% 17% 80% 18% 18% 17% 18% 28% 28% 25% 26% 31% 29% Share of total trades 31% 29% 7% 1% 70% 9% 5% 11% 10% 15% 60% 29% 31% 32% 30% 29% 22% 29% 50%