Nordnet Ab · OMXSTO:SAVE
Nordnet Ab — Q4 2023 Earnings Presentation
40 slides from Nordnet Ab's earnings presentation, Jan 30, 2024
Slide 1: Nordnet Q4 2023 Results presentation
Nordnet Q4 2023 Results presentation
Slide 2: Key highlights fourth quarter 2023
Key highlights fourth quarter 2023 Strong financial performance with Cost in line with guidance record revenue and profit Strong capital situation – SEK 7.20 Good customer growth and positive dividend (+57%), redeeming AT1 and net savings evaluating buyback program Strong results in EPSI/SKI custome
Slide 3: Financial highlights fourth quarter 2023
Financial highlights fourth quarter 2023 Customers Savings capital Number of trades Thousands SEKbn Million +9% +15% -4% 1,708 1,863 825 12.7 12.1 715 Q4 2022 Q4 2023 Q4 2022 Q4 2023 Q4 2022 Q4 2023 Adjusted revenues Adjusted operating expenses Adjusted profit before tax SEKm1 SEKm1 SEKm1 +25% 1 189
Slide 4: Financial highlights 2023
Financial highlights 2023 Customers Savings capital Number of trades Thousands SEKbn Million +9% +15% -13% 1,708 1,863 825 56.2 715 48.9 2022 2023 2022 2023 2022 2023 Adjusted revenues Adjusted operating expenses Adjusted profit before tax SEKm1 SEKm1 SEKm1 +35% 4 550 +49% 3 382 3 160 +7%2 2 115 1 2
Slide 5: Continued growth in customers and net savings despite uncertain macro environment
Continued growth in customers and net savings despite uncertain macro environment New customers by month1 Net savings per month Thousands SEKbn 2022 2023 159 2022 2023 155 36 35 27 9 20 6 17 16 14 5 13 12 13 13 13 13 13 13 13 13 4 11 12 11 12 10 10 3 3 3 34 3 3 3 8 9 3 3 8 3 3 2 2 2 1 1 1 Jan Feb Ma
Slide 6: Geographical diversification de-risks the business model and enables growth
Geographical diversification de-risks the business model and enables growth Sweden Norway Customers Savings capital Customers Savings capital Thousand SEKbn Thousand SEKbn +5% +15% +10% +11% 450 470 313 399 140 271 364 126 Q4 2022 Q4 2023 Q4 2022 Q4 2023 Q4 2022 Q4 2023 Q4 2022 Q4 2023 Denmark Finla
Slide 7: Number of trading customers and share of all customers
Share of all customers 10% 100% 20% 30% 40% 50% 60% 70% 80% 90% Q1-17 Q2-17 Q3-17 Q4-17 Q1-18 Q2-18 Q3-18 Trading customers Q4-18 Q1-19 Q2-19 Q3-19 Average 2017-2022 Q4-19 Share of all customers Q1-20 Q2-20 Q3-20 Q4-20 Q1-21 Q2-21 Q3-21 Q4-21 Q1-22 Q2-22 Q3-22 Q4-22 Number of trading customers Q1-23
Slide 8: Trades per day have almost doubled since 2019 and each trade drives more revenue
Trades per day have almost doubled since 2019 and each trade drives more revenue Trades per customer per trading day Total number of trades and net income/trade Trades per customer / day (LHS) Trades per day Cross border (m) Domestic (m) Net income / trade (SEK) 0.22 285,300 80 72 0.20 70 0.18 233,3
Slide 9: Leading Nordic fund supermarket
Leading Nordic fund supermarket Fund capital by country Fund capital by allocation1 SEKbn SEKbn Active Nordnet funds Other § Fund capital growing 2X total savings capital Sweden Norway Denmark Finland Index Fixed income § One quarter of fund capital is Nordnet branded 3% 81 100 154 144 184 CAGR +2 1
Slide 10: Deposits decline driven by customer net buying equities and mutual funds
Deposits decline driven by customer net buying equities and mutual funds Deposits/savings capital vs stock market performance Deposit development 4Q23 SEKbn SEKbn Brokerage/Funds (LHS) % Deposits (RHS) Share of Deposits (LHS) MSCI World index AuM 900 20% 8.9% 8.2% 800 18% -2.5 700 16% +2.6 -3.9 14%
Slide 11: Liquidity portfolio snapshot: ~SEK1.6bn in 2024
Liquidity portfolio snapshot: ~SEK1.6bn in 2024* *Assumes 4Q 2023 volume, currency allocation, credit spreads and market consensus estimates for IBOR development. Sensitivity on deposit / AuM Volume +300 11.0% SEKbn +300 10.0% SEKm | AuM (Dec 23) Deposits Lending 1 Other/equity ~SEK 1,650m ~SEK 1,60
Slide 12: Loan portfolio snapshot: ~SEK1.5bn in 2024
Loan portfolio snapshot: ~SEK1.5bn in 2024* *Assumes 4Q 2023 volume, 3M IBOR forecast (p.11) and pass-through of; Margin lending (50%), Mortgage (100%), Unsecured (90%). Unsecured Mortgage Margin lending Volume1 Net interest income ~SEK 1,350m ~SEK 1,500m SEKbn SEKm 29.1 29.5 385 26.7 26.4 27.3 27.9
Slide 13: Deposit interest cost snapshot: SEK 500m in 2024
Deposit interest cost snapshot: SEK 500m in 2024* * Assumes interest rates and volumes as per December 2023 with 100% pass-through of fwd IBOR changes (p11). Assumes that interest on non-savings account deposits remains at 4Q23 levels. Volume sensitivity does not account for net effect of transfer f
Slide 14: In summary: Resilient revenues bolstered by diversified revenues streams
In summary: Resilient revenues bolstered by diversified revenues 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 CAGR +20% Adjusted revenue / avg. savings capital
Slide 15: Business model with great operating leverage
Business model with great operating leverage Adjusted revenue Adjusted operating expenses³ Adjusted profit before tax SEKm SEKm SEKm 44 61 53 46 59 32 24 17 17 17 25 59 67 63 69 31% C A GR + 4,550 R+ 70% 3,639 CAG 3,382 3,160 2,689 CAGR +4% 2,451 2,115 1,524 1,576 1,210 1,300 1,097 1,064 1,141 377 2
Slide 16: Select Q4 2023 product highlights
Select Q4 2023 product highlights Inspiring new interactive content: Focus on migrating and enhancing Nordnet’s social investing Stock inspiration pages network Shareville and improved customer journeys Shareville groups Shareville profiles Shareville onboarding Shareville content (000s of posts and
Slide 17: Capital and liquidity situation
Capital and liquidity situation
Slide 18: Strong capital situation creates flexibility
Strong capital situation creates flexibility Regulatory metrics 67.4 Consolidated situation Actual (vs req.) Requirement § Dividend payout ratio of 70% Deposits in SEKbn Total capital ratio 26.4% (+10.9pp) 15.5% § Redemption of SEK 500m AT1 in March 2024 CET1 ratio 19.0% (+8.3pp) 10.7% § Capital rat
Slide 19: Strategic focus
417 Nordnet Strategic focus 7, Ai
Slide 20: 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 Profitable § Capture Nordic growth growth potential § Stable cost level § Strong com
Slide 21: Strong long-term growth in customers and savings capital
Strong long-term growth in customers and savings capital Customers Savings capital Thousands 1 SEKbn % % 19 24 R GR AG CA 1,863 C 825 802 1,708 1,601 715 564 1,221 R 20 % C AG 17% GR CA 914 395 765 669 272 286 567 235 490 200 367 395 433 166 314 344 136 193 224 90 102 90 104 157 86 103 128 21 36 49
Slide 22: 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 2022 | Million Savings capital, SEKtln December 2022, SEK tln Nordnet’s share Market size current Market size extended Nordnet’s share of addre
Slide 23: 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 24: Medium-term financial targets
Medium-term financial targets Target Customer growth Average savings capital per customer2 Shareholder remuneration % SEK (‘000) 31% Deliver superior shareholder returns 477 416 444 435 through a dividend payout ratio of Around SEK420k per customer 70% 15% 10%1 9% 10-15% p.a. Capital ratio targets:
Slide 25: Capitalizing on customer growth and platform strength to invest in marketing
Capitalizing on customer growth and platform strength to invest in marketing brand and reach § Nordnet is now well positioned in terms of size, product range, and organizational structure to maximize the impact of increased marketing efforts § Brand-building ahead of potential market turnaround to c
Slide 26: Key priorities for 2024
Key priorities for 2024 Prepare for launch of Danish livrente pension product Expand Nordnet-branded fund offering Integrate Shareville app and web Further strengthen brand position Maintain focus on cost control 26
Slide 27: Thank you
417 Nordnet
Slide 28: Net interest income sensitivity
Net interest income sensitivity *Assumes pass-through of; Liquidity portfolio (100%), Margin lending (50%), Mortgage (100%), Unsecured (90%) and Savings accounts (100%). Deposit balance changes with Deposit/AuM relation where AuM is fixed at 4Q23. Saving account balance fixed at 20% of total deposit
Slide 29: Financial highlights fourth quarter 2023
Financial highlights fourth quarter 2023 SEKm unless otherwise stated Q4 2023 Q3 2023 QoQ % Q4 2022 YoY % Condensed P&L1 Adjusted total income 1,189 1,155 3% 952 25% Adjusted operating expenses (335) (324) 3% (314) 7% Adjusted profit before tax 830 807 3% 624 33% KPIs New customers 38,600 37,800 2%
Slide 30: Summary P&L
Summary P&L SEKm Q4 2023 Q3 2023 QoQ % Q4 2022 YoY % 2023 2022 YoY % Adjusted total income 1 189 1 155 3% 952 25% 4 550 3 382 35% Adjusted operating expenses (335) (324) 3% (314) 7% (1 300) (1 210) 7% Net credit losses (23) (22) 4% (11) 105% (80) (43) 83% Imposed levies: Resolution fees (2) (3) (22%
Slide 31: Items affecting comparability
Items affecting comparability Q4 Q3 Q2 Q1 FY FY FY FY FY FY 2023 SEKm 2022 2022 2022 2022 2022 2021 2020 2019 2018 2017 Non-recurring items – Expenses Delisting from Nasdaq (45) Acquisition of Netfonds (35) (16) Deduction right VAT 38 38 (20) (30) AML process upgrade (1) (4) (10) (4) (19) IPO relate
Slide 32: 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 2020 2022 9,0% 8,0% 6,5% 6,8%2
Slide 33: 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 ~825bn SEK ~43bn SEK ~30bn ~70% ~22% ~8% ~48% ~38% ~13% Margin Mortgage Shares Funds Deposits Unsecured lending3 lending Net commission Net co
Slide 34: Strong cost to income ratio and attractive return on equity
Strong cost to income ratio and attractive return on equity Adjusted cost income ratio1 Adjusted return on equity1,2 90% 84% 60% 77% 80% 72% 50% 45% 70% 44% 40% 60% 40% 36% 50% 40% 30% 36% 40% 31% 29% 30% 20% 13% 20% 10% 10% 7% 10% 0% 0% 2017 2018 2019 2020 2021 2022 2023 2017 2018 2019 2020 2021 20
Slide 35: New customers are younger, higher share of women and own more funds
New customers are younger, higher share of women and own more funds Share of customers per cohort and age1 Share of customers by cohort and gender2 % 4Q23 | (‘000) 2 1 836 847 675 165 150 Pre 2020 2020-2021 2022 2023 5,0% 8% 3% 2% 3% 3% 2023 9% 29% 4,0% 2022 35% 38% 38% 3,0% 37% 2020-2021 2,0% 69% M
Slide 36: New customers remain active, grow net savings and drive high margins
New customers remain active, grow net savings and drive high margins Revenue margin 2023 Share of cross-border trades 2023 bps % | million trades 99 34.1 4.9 5.1 4.8 48.9 77 25% 30% 30% 35% 27% Cross-border 63 59 55 Pre 2020 2020-2021 2022 2023 All Pre 2020 2020-2021 2022 2023 All Share of trades pe
Slide 37: Strong cost control drives profit despite uncertain macro
40% 60% 20% 30% 50% 10% 0% 0.05 0.15 0.25 0.00 0.10 0.20 0.30 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 2Q14 2Q14 Annualised growth (LHS) 3Q14 3Q14 4Q14 4Q14 1Q15 1Q15 2Q15 2Q15 Annualised customer growth
Slide 38: Strong liquidity position with good credit quality and balanced maturity profile
Strong liquidity position with and good credit quality and balanced maturity profile Exposure class Portfolio rating Maturity structure SEKbn % (S&P equivalent) SEKbn Unrealized result (SEKm) HTC -7.5 15.1 AFS1: -40.8 Gov/Gov reg/Supr. 0% Covered AA AAA 5% 20% 18% 11.1 8% A Sr./other 3% BBB 8.5 0% 1
Slide 39: Sustainability at core of strategy
Sustainability at core of strategy Democratize savings and investments § Increase the general knowledge about personal finance § Develop user-friendly and inspirational services for saving and investments § A better gender distribution within savings and investments Sustainable savings § Have a broa
Slide 40: Ambition: sustainable savings
Ambition: sustainable savings Share of fund capital in sustainable funds* Having a broad set of sustainable investment alternatives 84% Share of fund capital in “dark green”* funds 5% Making it easier for savers to Proportion of invest more sustainably by female customers creating user-friendly digi