Nordnet Ab · OMXSTO:SAVE
Nordnet Ab — Q1 2023 Earnings Presentation
35 slides from Nordnet Ab's earnings presentation, Apr 25, 2023
Slide 1: Nordnet Q1 2023 Results presentation
Nordnet Q1 2023 Results presentation
Slide 2: Key highlights first quarter 2023
Key highlights first quarter 2023 Strong financial performance with Net interest income almost tripled due record revenue and the second to higher interest rates highest profit in Nordnet’s history Maintained cost control with operating Positive interest rate sensitivity – set expenses in line with
Slide 3: Financial highlights first quarter 2023
Financial highlights first quarter 2023 Customers Savings capital Number of trades Thousands SEKbn Million +8% -2% -17% 1,751 773 761 17.3 1,619 14.4 Q1 2022 Q1 2023 Q1 2022 Q1 2023 Q1 2022 Q1 2023 Adjusted revenues Adjusted operating expenses Adjusted profit before tax SEKm1 SEKm1 SEKm1 +27% 1,134
Slide 4: Continued growth in customers and net savings despite volatile market
Continued growth in customers and net savings despite volatile market New customers by month1 Net savings per month Thousands SEKbn 2022 2023 64 2022 2023 21 27 43 9 20 6 17 16 14 5 13 13 13 7 11 11 12 10 3 3 8 9 3 3 8 3 3 2 2 1 1 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Q1 Q1 Q1 Q1 (1) (1) 2
Slide 5: 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% -8% +9% -9% 435 455 317 375 139 292 344 126 Q1 2022 Q1 2023 Q1 2022 Q1 2023 Q1 2022 Q1 2023 Q1 2022 Q1 2023 Denmark Finland
Slide 6: Slight recovery in trading activity despite uncertain macro environment
Share of all customers 70% 10% 100% 30% 60% 80% 90% 20% 40% 50% Q1-17 Q2-17 Q3-17 Q4-17 Q1-18 Q2-18 Trading customers Q3-18 Q4-18 Q1-19 Q2-19 Average 2017-2022 Q3-19 Share of all customers Q4-19 Q1-20 Q2-20 Q3-20 Q4-20 Q1-21 Q2-21 Q3-21 Q4-21 Q1-22 macro environment Q2-22 Number of trading customers
Slide 7: Trades per day have doubled since 2019 and each trade drives more revenue
Trades per day have 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) 0.34 285,300 80 0.32 72 70 0.30 233,300 223,
Slide 8: Leading Nordic fund supermarket
Leading Nordic fund supermarket Fund capital Fund allocation Key statistics SEKbn Nordnet branded 34bn Sweden Norway Denmark Finland 22% 154bn AuM in funds SEK In Nordnet funds SEK 154 154 Fixed income 144 Index 13% 15 17 23% 16 24 26 193k 46% 100 24 81 8 39 39 6% 6 14 36 Other 10 23 18 Avg fund cap
Slide 9: Deposits level decline driven by customer net buying
Deposits level decline driven by customer net buying Deposits/savings capital vs stock market performance Deposit development 1Q23 SEKbn SEKbn Brokerage/Funds (LHS) % Deposits (RHS) Avg % deposit range Share of Deposits (LHS) MSCI World index AuM 900 20% 10.4% 9.7% 800 18% -7.6 700 16% +5.3 14% 600
Slide 10: Liquidity portfolio snapshot: ~SEK1.6bn in 2023
Liquidity portfolio snapshot: ~SEK1.6bn in 2023* *Assuming Q1 2023 volume, currency allocation, credit spreads and market consensus estimates for IBOR development. Volume 1 SEKbn Lending Liquidity portfolio Lending Liquidity portfolio Other 64 Net interest income 61 599 58 58 52 53 47 50 47 510 296
Slide 11: Loan portfolio snapshot: ~SEK1.2bn in 2023
Loan portfolio snapshot: ~SEK1.2bn in 2023* *Assuming 1Q 2023 volumes and interest as per Apr 1st, 2023. Unsecured Mortgage Margin lending Volume1 Net interest income ~SEK1,200m SEKbn 27.3 27.9 SEKm 26.5 26.7 26.4 296 25.4 23.2 24.2 4.1 4.0 22.1 4.1 4.0 4.1 253 4.1 67 4.0 4.1 4.0 60 9.6 10.9 10.9 17
Slide 12: Deposit interest snapshot: SEK ~275m in 2023
Deposit interest snapshot: SEK ~275m in 2023* *Assuming 1Q 2023 volume, currency and customer account mix, and interest rates as of April 21, 2023 Estimated interest cost 2023 SEKm Interest cost on total deposits (bps) 40 Interest cost on deposits bearing interest (bps) 150 ~SEK275m 26% Share of cus
Slide 13: In summary: Resilient revenue bolstered by diversified revenue streams
In summary: Resilient revenue bolstered by diversified revenue 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 Adjusted revenue / avg. savings capital 802 761 74
Slide 14: 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 50 32 24 17 17 17 25 59 67 63 64 3,639 3,626 3,382 2,689 2,451 2,329 2,115 1,524 1,576 1,141 1,210 1,233 1,097 1,064 377 2019 2020 2021 2022 LTM Q1 2019 20
Slide 15: Select Q1 2023 product highlights
Select Q1 2023 product highlights Move my pension – new digital service in 14 new versions of our award-winning app Sweden to move your pension to Nordnet with lots of user-friendly features and flows (SE/NO) Earning calls with Quartr Company logos Trustly instant dpoesits 15
Slide 16: Capital and liquidity situation
Capital and liquidity situation
Slide 17: Solid capital position with strong liquidity and good credit quality
Solid capital position with strong liquidity and good credit quality Exposure class Portfolio rating Maturity structure Unrealized result (SEKm) 73.5 SEKbn % (S&P equivalent) SEKbn HTC -0.6 AFS1: -99.0 Gov/Gov reg/Supr. Deposits in SEKbn Covered AAA AA 14.4 21% 20% 8% 10.7 8.5 8.7 Sr./other 4% 0% 8%
Slide 18: Strategic focus
Strategic focus Ba a
Slide 19: 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 20: Strong long-term growth in customers and savings capital
Strong long-term growth in customers and savings capital Customers Savings capital Thousands SEKbn 1,751 802 1,708 761 1,601 715 1,221 565 914 395 765 669 567 272 286 490 235 433 200 367 395 166 314 344 136 193 224 90 102 90 104 128 157 49 55 39 86 103 21 36 2010 2010 2018 2018 2007 2007 Q1 2023 Q1
Slide 21: 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 22: 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 23: Medium-term financial targets
Medium-term financial targets Target Customer growth Average savings capital per customer2 Dividend payout ratio % SEK (‘000) % 31% 477 416 444 431 “Deliver superior total returns to Around SEK420k per customer shareholders via a pay-out ratio 15% of 70% of statutory net income, 10%1 10-15% p.a. 8%
Slide 24: Key priorities for 2023
Key priorities for 2023 Launch Finnish endowment wrapper Lay foundation for Danish livrente pension product Integrate Shareville app and web Expand Nordnet-branded fund offering Maintain focus on cost control 24
Slide 25: Thank you
417 Nordnet
Slide 26: Financial highlights first quarter 2023
Financial highlights first quarter 2023 SEKm unless otherwise stated Q1 2023 Q4 2022 QoQ % Q1 2022 YoY % Condensed P&L1 Adjusted total income 1 134 952 19% 891 27% Adjusted operating expenses (320) (314) 2% (297) 8% Adjusted profit before tax 794 624 27% 580 37% KPIs New customers +43,300 +30,400 42
Slide 27: Summary P&L
Summary P&L SEKm Q1 2023 Q4 2022 QoQ % Q1 2022 YoY % Adjusted total income 1 134 952 19% 891 27% Adjusted operating expenses (320) (314) 2% (297) 8% Net credit losses (17) (11) 51% (10) 75% Imposed levies: Resolution fees (3) (3) 0% (4) (17%) Adjusted profit before tax 794 624 27% 580 37% Items affe
Slide 28: Items affecting comparability
Items affecting comparability Q1 Q4 Q3 Q2 Q1 FY FY FY FY FY FY SEKm 2023 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 rel
Slide 29: 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 2022E 9.0% 8.0% 6.5% 6.8%2
Slide 30: 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 ~761bn SEK ~50bn SEK ~28bn ~70% ~20% ~10% ~47% ~39% ~14% Margin Mortgage Shares Funds Deposits Unsecured lending3 lending Net commission Net c
Slide 31: 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 gender1 % 1Q23 | (‘000) 1 Pre 2020 2020-2022 2023 1 725 854 838 34 7.0% 2% 3% 2% 3% 2023 6.0% 29% 35% 37% 5.0% 49% 2020-2022 4.0% 3.0% 69% Male 2.0% 62% 60% 49%
Slide 32: New customers remain active, grow net savings and drive high margins
New customers remain active, grow net savings and drive high margins Revenue margin 1Q23 Share of cross-border trades 1Q23 bps % | million trades 151 10.3 4.0 0.2 14.5 24% 31% 25% 26% Cross-border 70 56 62 Pre 2020 2020-2022 2023 All Pre 2020 2020-2022 2023 All Share of trades per application 1Q23 S
Slide 33: Strong cost control drives profit despite volatile markets
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 34: Sustainability embedded in Nordnet's DNA
Sustainability embedded in Nordnet’s DNA A responsible and sustainable business ▪ Practice transparency, compliance and a high ethical standard ▪ Reduce negative impact on the environment and climate ▪ Promote physical and mental health through a good working environment Equality and diversity ▪ A b
Slide 35: Ambition: sustainable savings
Ambition: sustainable savings Share of fund capital in sustainable funds* Having a broad set of sustainable investment Share of fund capital alternatives 69% in “dark green”* funds 3% Making it easier for savers to Proportion of invest more sustainably by female customers creating user-friendly digi