Avanza Bank Holding Ab · OMXSTO:AZA
Avanza Bank Holding Ab — Investor Presentation (June 2019)
37 slides from Avanza Bank Holding Ab's investor presentation, Jun 3, 2019
Slide 1: Company presentation
Company presentation June 2019
Slide 2: Sweden’s leading platform for savings and investments
Sweden’s leading platform for savings and investments • Founded in 1999 • No 1 in stock market transactions in Sweden • Most satisfied savings customers in Sweden for 9 consecutive years • 893,900 customers • SEK 345 bn in savings capital • 419 employees • 4.0% market share of the Swedish savings ma
Slide 3: Customer satisfaction and employee engagement create shareholder value over time
Customer satisfaction and employee engagement create shareholder value over time Long-term targets Customer proposition ● Customer satisfaction & Employee engagement Cheaper, better and simpler offering ● ● Growth in customers and savings capital ● High user experience ● Scalability and cost efficie
Slide 4: High customer satisfaction
• Price leadership High customer satisfaction • Wide range of products Creating a better future for millions of people • Decision-making tools • Best customer service and user experience Customer promise – more to you, less to the bank To give our customers a better return on their savings than any
Slide 5: Growth strategy built on scale
Growth strategy built on scale 1. Growth in savings capital 2. Revenues/savings capital • Customer satisfaction • No fixed fees • Customer growth • Innovation and user • Revenues mainly based on transaction experience • Net inflow fees, net interest income (NII) and distribution fees from mutual fun
Slide 6: Leading cost position
Leading cost position 160 350 000 142 140 300 000 120 Savings capital, SEK m 250 000 Basis points 100 200 000 73 80 150 000 60 100 000 40 35 20 50 000 20 0 0 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 Savings capital Income/savings capital Cost/savings capital In 2018
Slide 7: A history of growth built on innovation
A history of growth built on innovation 7
Slide 8: Launches to make Avanza more relevant for a broader audience
Launches to make Avanza more relevant for a broader audience 8
Slide 9: Customer value with real open banking
Customer value with real open banking 9
Slide 10: Largest Swedish player in stock market transactions on Nasdaq OMX and First North
Largest Swedish player in stock market transactions on Nasdaq OMX and First North Transactions Turnover 16,0 10,0 9,0 14,0 8,0 Market share, % Market share, % 12,0 7,0 10,0 6,0 8,0 5,0 6,0 4,0 3,0 4,0 2,0 2,0 1,0 0,0 0,0 Q1-14 Q2-14 Q3-14 Q4-14 Q1-15 Q2-15 Q3-15 Q4-15 Q1-16 Q2-16 Q3-16 Q4-16 Q1-17 Q
Slide 11: Customer growth drives net inflow
Customer growth drives net inflow 50 000 2017: 12 000 Customers: +140,000 Net inflow: 26,800 45 000 2016: 2018: Customers: +103,000 Customers: +126,500 Net inflow: 26,500 Net inflow: 27,600 10 000 40 000 2015: 2019 Q1: Customers: +96,400 Customers: +33,600 Net inflow: 25,200 Net inflow: 7,570 35 000
Slide 12: Age distribution among new customers
Age distribution among new customers 4,5 4 3,5 3 Share, % 2,5 2018 2012 2 2007 1,5 1 0,5 0 27 75 0 3 6 9 12 15 18 21 24 30 33 36 39 42 45 48 51 54 57 60 63 66 69 72 78 81 84 87 90 93 96 99 12 Age
Slide 13: Strong long-term potential in existing customer base
Strong long-term potential in existing customer base Market penetration 4,5% • Total share of Swedish savings market: 4.0% as of Q1 2019 1,40 4,0% • Total share of Swedish population: 3,5% 1,20 8.0% as of 1 November 2018 Savings capital, SEK m • ages 20-29: 13.4% 3,0% 1,00 • ages 30-39: 15.4% Custom
Slide 14: Savings capital grow by number of years at Avanza
Savings capital grow by number of years at Avanza 500 000 450 000 400 000 Savings capital, SEK 350 000 300 000 250 000 200 000 150 000 100 000 50 000 0 1 month 1 year 2 years 3 years 4 years 5 years 6 years 7 years 8 years 9 years 10 years Average savings capital per customer (excluding customers wi
Slide 15: Significant growth potential with a 4.0% market share of the Swedish savings market
Significant growth potential with a 4.0% market share of the Swedish savings market • The Swedish savings market SEK 8,300 bn • Annual market growth of on average 10% last ten years • An estimated 80% of the Swedish population saves in funds and 11% own shares The white circles refer to Avanza’s sha
Slide 16: Market share of 13.3% rolling 12M of net savings on the Swedish savings market
Market share of 13.3% rolling 12M of net savings on the Swedish savings market Target raised to 10% as of 2018 16
Slide 17: Growth potential in broader customer groups
Growth potential in broader customer groups Knowledge & time Invest Trade Save Gamble Begin Interest Do it for me Help me do it Do it myself 17
Slide 18: Strategy for more recurring income
Strategy for more recurring income 60% 50% Share of total income 40% 30% 20% 10% 0% 2012 2013 2014 2015 2016 2017 2018 Q1 2019 Net brokerage income Fund commissions Net interest income Other commission income 18
Slide 19: Strong growth in occupational pension
Strong growth in occupational pension 25 000 20 000 Savings capital, SEK 15 000 10 000 5 000 0 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 Q1 2019 19
Slide 20: Digitisation and new regulation potential for growth
Digitisation and new regulation potential for growth • New customer behaviors – already seen in other industries • Focus on attracting new and broader customer groups as well as keeping current customers happy • Product innovation and evolution • User experience increasingly important • Price remain
Slide 21: As always… key success factors for Avanza
As always… key success factors for Avanza • Customer satisfaction – keep the No 1 position • Continuous growth in both number of customers and volume • Create possibilities for continued strong innovation Employee engagement key 21
Slide 22: Appendix
Appendix Operations 23-25 Financials 26-34 Balance sheet data 35-36 Contact details 37 22
Slide 23: Performance on targets 2018
Performance on targets 2018 Long-term targets Outcome 2018 Comments Sweden’s most satisfied savers √ Achieved in 2018 for the ninth consecutive year according to Swedish Quality Index Engaged employees, eNPS of at 44 Very strong ambassadorship, and significantly least 45 improved from last year Mark
Slide 24: Number of customers
Number of customers 24 0 5 000 10 000 15 000 20 000 25 000 Jan-14 Mar-14 May-14 Jul-14 Sep-14 Nov-14 Jan-15 Mar-15 May-15 Jul-15 Sep-15 Nov-15 Jan-16 Mar-16 May-16 Jul-16 Sep-16 Customer inflow Nov-16 Jan-17 Mar-17 May-17 Jul-17 Sep-17 Nov-17 Jan-18 Mar-18 May-18 Jul-18 Sep-18 Customer inflow of 56,
Slide 25: Net inflow of SEK 13,400m in 2019
Net inflow of SEK 13,400m in 2019 (+21% Y/Y) 5 000 4 000 3 000 Net inflow, SEK m 2 000 1 000 0 Mar-14 Mar-15 Mar-16 Mar-17 Mar-18 Mar-19 Jul-14 Nov-14 Jul-15 Nov-15 Jul-16 Nov-16 Jul-17 Jul-18 Nov-18 Jan-14 Jan-15 Jan-16 Jan-17 Jan-18 Jan-19 May-14 May-15 May-16 Nov-17* May-18 May-19 May-17 Sep-14 S
Slide 26: Financial overview
Financial overview Q1 19 Q4 18 ∆% Q1 18 ∆% Operating income, SEK m 268 267 0 271 -1 Operating expenses, SEK m -164 -190* -13 -152 8 Operating profit, SEK m 100 76 31 120 -16 Operating margin, % 37 29 9 44 -7 EPS, SEK 2.87 1.98 45 3.45 -17 * Operating expenses in Q4 2018 include the Swedish Financial
Slide 27: Relationship between long-term savings capital growth and revenue growth
Relationship between long-term savings capital growth and revenue growth 300 Savings capital Q1 2019: SEK 336 bn (+16 % Y/Y) Q1 2019 250 2001–2011 Corel=0.95 2012–Q1 2019 200 Corel=0.93 Revenue, SEK m 150 100 50 0 0 50 000 100 000 150 000 200 000 250 000 300 000 350 000 400 000 Savings capital, SEK
Slide 28: Long-term revenue development
Long-term revenue development 1 200 5,0 1 000 4,0 800 3,0 Average repo rate, % Revenue, SEK m 600 2,0 400 1,0 200 0,0 0 -1,0 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 Total income Net brokerage income Income from mutal funds Net interest income Other income
Slide 29: Historical correlation between low market rates and growth
Historical correlation between low market rates and growth 12000 5,0 • Falling repo rate since Q3 2011 – historical negative 10000 4,0 rate since Q1 2015 • Low repo rate creates a good 8000 3,0 growth environment but puts Net inflow, SEK m pressure on NII (100 bps Repo rate, % repo rate increase aff
Slide 30: Revenue development
Revenue development 300 271 271 267 267 268 245 244 244 250 234 224 221 227 219 200 Revenue, SEK m 150 100 50 0 Q1-16 Q2-16 Q3-16 Q4-16 Q1-17 Q2-17 Q3-17 Q4-17 Q1-18 Q2-18 Q3-18 Q4-18 Q1-19 Total income Net brokerage income Income from mutual funds Net interest income Other commission income 30
Slide 31: Income split Q1 2019
Income split Q1 2019 SEK m % of % of specific % of total income savings capital savings capital Shares, bonds, options 112 42 0.26 0.14 (transactions) Mutual funds 72 27 0.33 0.09 Net interest income 39 15 0.27* 0.05 Other** 44 16 - 0.06 Total 268 100 0.34 0.34 * Based on deposits ** Corporate finan
Slide 32: Cost development
Cost development 200 180 160 164 157 155 153 Operating expenses, SEK m 152 140 135 120 128 131 124 123 100 109 109 96 80 60 40 20 0 Q1-16 Q2-16 Q3-16 Q4-16 Q1-17 Q2-17 Q3-17 Q4-17 Q1-18 Q2-18 Q3-18 Q4-18 Q1-19 Total expenses Administrative fee Personnel Marketing Depreciation Other expenses Note: Ot
Slide 33: Costs Q1 2019
Costs Q1 2019 SEK m % of total % of total costs income Personnel -103 63 38 IT -17 10 6 External services -7 4 3 Marketing & Sales -8 5 3 Depreciation -14 9 5 Other -16 10 6 Total costs before credit losses -164 100 62 Credit losses, net -1 33
Slide 34: Operating margin of 37% in Q1 2019
Operating margin of 37% in Q1 2019 160 100 90 140 132 122 121 120 80 120 115 117 111 114 70 Operating profit, SEK m 103 104 103 Operating margin, % 100 90 60 80 77 50 40 60 30 40 20 20 10 0 0 Q1-16 Q2-16 Q3-16 Q4-16 Q1-17 Q2-17 Q3-17 Q4-17 Q1-18 Q2-18 Q3-18 Q4-18 Q1-19 Operating profit Operating mar
Slide 35: Balance sheet, March 2019
Balance sheet, 31 March 2019 Comments Assets SEK m Liabilities & equity SEK m • Mainly self-financed through Lending to credit 2,592 Deposits 35,128 shareholders’ equity and institutions customer deposits Lending to the 11,568 Liabilities in insurance 98,064 • Surplus-liquidity of SEK 23,708m public
Slide 36: Capital surplus for the Group
Capital surplus for the Group SEK m 31 March 2019 Shareholders’ equity 1,416 Solvency capital 1 070 Less non-distributable solvency capital -172 Subordinated bond 84 Intangible fixed assets and deferred tax receivables -84 Capital base before dividend adjustment 2,314 Capital requirement Pillar 1 -1
Slide 37: Historical financial key data 2001 – Q1 2019
2019-06-03 Historical financial key data 2001 – Q1 2019 is available in Excel at: avanza.se/keydata sofia.svavar@avanza.se +46 8-409 420 17
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