Nordnet Ab · OMXSTO:SAVE
Nordnet Ab — Q3 2024 Earnings Presentation
38 slides from Nordnet Ab's earnings presentation, Oct 25, 2024
Slide 1: Nordnet Q3 2024 Results presentation
Nordnet Q3 2024 Results presentation
Slide 2: Key highlights third quarter 2024
Key highlights third quarter 2024 Strong financial quarter with continued Net interest income outlook growth in the core brokerage and fund stable for 2024 business The highest customer growth in Cost growth expected to trend several years – passed 2m customers in line with guidance for full year He
Slide 3: Financial highlights third quarter 2024
Financial highlights third quarter 2024 Customers Savings capital Number of trades Thousands SEKbn Million +12% +26% +13% 2,050 989 12.9 1,824 11.3 785 Q3 2023 Q3 2024 Q3 2023 Q3 2024 Q3 2023 Q3 2024 Adjusted revenues Adjusted operating expenses Adjusted profit before tax SEKm1 SEKm1 SEKm1 +6% 1 155
Slide 4: Clear rebound in customer growth and net savings
Clear rebound in customer growth and net savings New customers by month Net savings per month Thousands SEKbn 2023 2024 2023 2024 187 54 37 8 116 7 6 7 6 5 5 5 25 21 20 4 19 20 18 18 18 4 4 16 16 3 3 3 14 13 13 13 13 13 3 3 13 12 13 12 3 3 10 2 2 1 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec 202
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 +6% +26% +14% +25% 465 491 368 445 171 390 291 136 Q3 2023 Q3 2024 Q3 2023 Q3 2024 Q3 2023 Q3 2024 Q3 2023 Q3 2024 Denmark Finla
Slide 6: More customers are trading and cross-border trading remains robust
Share of all customers 10% 20% 30% 100% 40% 50% 60% 70% 80% 90% 1Q|17 2Q|17 3Q|17 4Q|17 1Q|18 2Q|18 3Q|18 Trading customers 4Q|18 1Q|19 2Q|19 3Q|19 4Q|19 Average 2017-2022 1Q|20 Share of all customers 2Q|20 3Q|20 4Q|20 1Q|21 2Q|21 3Q|21 remains robust 4Q|21 1Q|22 2Q|22 3Q|22 4Q|22 1Q|23 2Q|23 3Q|23
Slide 7: 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 0.20 72 70 0.18 233,3
Slide 8: Leading Nordic fund supermarket
Leading Nordic fund supermarket Fund capital by country Fund capital by allocation1 SEKbn SEKbn § Fund capital growing ~2X total savings capital Active Nordnet funds Other Sweden Norway Denmark Finland Index Fixed income § One quarter of fund capital is Nordnet-branded 6% 100 154 144 184 241 CAGR +2
Slide 9: Deposits/savings capital decline driven by customers net buying equities and funds
Deposits/savings capital decline driven by customers net buying equities and funds Deposits/savings capital vs stock market performance Deposit development 3Q24 SEKbn SEKbn Brokerage/Funds (LHS) % Deposits (RHS) Share of Deposits (LHS) MSCI World index AuM 1,000 20% 7.1% 7.0% 900 18% +1.3 800 16% -6
Slide 10: Liquidity portfolio snapshot: ~SEK1.65bn in 2024
Liquidity portfolio snapshot: ~SEK1.65bn in 2024* *Assumes 3Q 2024 volume with addition of unsecured loan volume (3.5bn), currency allocation, credit spreads and market consensus estimates for 3M fwd IBOR development. Volume SEKbn Deposits Lending 1 Other/equity ~SEK 1,650m ~SEK 1,650m Net interest
Slide 11: Loan portfolio snapshot: ~SEK1.55bn in 2024
Loan portfolio snapshot: ~SEK1.55bn in 2024* *Assumes 3Q 2024 volume (excl. unsecured), 3M fwd IBOR consensus estimates (p.10) and pass-through of; Margin lending (50%), Mortgage (100%) Volume1 Unsecured Mortgage Margin lending SEKbn ~SEK 1,550m ~SEK 1,350m Net interest income 30.9 31.5 31.2 403 414
Slide 12: Deposit interest cost snapshot: SEK 600m in 2024
Deposit interest cost snapshot: SEK 600m in 2024* * Assumes volumes as per September 2024 and interest as per October 9 with 100% pass through of 3M fwd IBOR changes (p10). Assumes that interest on non-savings account deposits remains at 3Q24 levels. Sep 24 Development savings accounts Share of depo
Slide 13: 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 +21% Adjusted revenue / avg. savings capital
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 59 56 32 24 17 17 17 16 25 59 67 63 69 70 28% C A GR + 4,967 4,550 R+ 60% CAG 3,639 3,382 3,471 3,160 2,689 CAGR +5% 2,451 2,115 1,524 1,398 1,576 1,210 1,
Slide 15: Select Q3 2024 product highlights
Select Q3 2024 product highlights Several new Shareville features 25 new versions of Nordnet’s award-winning app with Social investing community in Nordnet app and web brand new analyst recommendations and price targets 15
Slide 16: Capital and liquidity situation
Capital and liquidity situation
Slide 17: Strong capital situation creates flexibility
Strong capital situation creates flexibility Regulatory metrics* 69.3 Consolidated situation Actual (vs req.) Requirement § Dividend payout ratio of 70% Deposits in SEKbn Total capital ratio 23.0% (+7.5pp) 15.5% § Capital ratio targets: CET1 ratio 18.3% (+7.6pp) 10.7% § Leverage ratio between 4.0-4.
Slide 18: Strategic focus
417 Nordnet Strategic focus Baa
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 R 24 % 2,050 989 19 C AG G R CA 1,863 1,708 825 802 1,601 715 20 % GR 1,221 CA 7% 564 G R1 CA 914 765 395 669 567 272 286 490 235 395 433 200 314 344 367 136 166 193 224 90 102 90 104 86 103 128 15
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 2023 | Million Savings capital, SEKtln December 2023, 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 Shareholder remuneration % SEK (‘000) 31% Deliver superior shareholder returns 477 464 416 444 435 through a dividend payout ratio of Around SEK420k per customer 70% 15% 12% 10%1 9% 10-15% p.a. Capital ratio t
Slide 24: Key priorities for 2024
Key priorities for 2024 Launch of Danish livrente pension product Enhance high-end offering New web portal for financial advisers, strengthening our B2B2C offering across the Nordics Further strengthen brand position Maintain focus on cost control 24
Slide 25: Thank you
417 Nordnet
Slide 26: Financial highlights third quarter 2024
Financial highlights third quarter 2024 SEKm unless otherwise stated Q3 2024 Q2 2024 QoQ % Q3 2023 YoY % Condensed P&L1 Adjusted total income 1,226 1,289 (5%) 1,155 6% Adjusted operating expenses (358) (353) 1% (324) 10% Adjusted profit before tax 852 904 (6%) 807 6% KPIs New customers +74,700 +53,8
Slide 27: Summary P&L
Summary P&L SEKm Q3 2024 Q2 2024 QoQ % Q3 2023 YoY % Adjusted total income 1 226 1 289 (5%) 1 155 6% Adjusted operating expenses (358) (353) 1% (324) 10% Net credit losses (13) (28) (54%) (22) (40%) Imposed levies: Resolution fees (3) (4) (7%) (3) 25% Adjusted profit before tax 852 904 (6%) 807 6% I
Slide 28: Items affecting comparability
Items affecting comparability YTD FY FY FY FY FY FY FY SEKm 2024 2023 2022 2021 2020 2019 2018 2017 Non-recurring items – Expenses Delisting from Nasdaq (45) Acquisition of Netfonds (35) (16) Deduction right VAT 38 (20) (30) AML process upgrade (19) IPO related expenses (109) Sanction SFSA (100) Non
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 2022 2023 9,0% 9,8% 5,3% 5,9% 6
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 ~989bn SEK ~43bn SEK ~31bn ~69% ~24% ~7% ~53% ~36% ~11% Margin Mortgage Shares Funds Deposits Unsecured lending3 lending Net commission Net co
Slide 31: 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% 43% 40% 60% 40% 36% 50% 40% 30% 40% 36% 31% 29% 28% 30% 20% 13% 20% 10% 10% 7% 10% 0% 0% 2017 2018 2019 2020 2021 2022 2023 LTM Q3 2017 2018 20
Slide 32: 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 % 3Q24 | (‘000) 2 Male Female Corporation Pre 2020 2020-2021 2022 -2023 2024 2 027 5,0% 9% 2024 838 668 330 190 2 027 3% 2% 3% 3% 3% 4,0% 16% 2022-2023
Slide 33: New customers remain active, grow net savings and drive high margins
New customers remain active, grow net savings and drive high margins Revenue margin 2024 Share of cross-border trades 2024 bps % | million trades 100 25.3 7.5 4.8 1.5 39.0 26% 35% 35% 35% 29% Cross-border 67 53 58 54 Pre 2020 2020-2021 2022-2023 2024 All Pre 2020 2020-2021 2022-2023 2024 All Share o
Slide 34: Digital channel engagement
Digital channel engagement Active users Social community activity Investing activity 443k Daily Active Users (DAU) 439k Active Shareville 645k Monthly Investing Customers (MIC)* Average Q3 2024 users Average Q3 2024 1.1m Monthly Active Users (MAU) 210k Shareville posts created in Q3 2024 362k 373k A
Slide 35: Signs of recovery in customer growth and savings ratio
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 3Q14 3Q14 Annualised growth (LHS) 4Q14 4Q14 1Q15 1Q15 2Q15 2Q15 3Q15 3Q15 4Q15 Annualised
Slide 36: 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 -1.1 13.6 AFS1: +18.9 Gov/Gov reg/Supr. AA 0% Covered AAA A 4% 11% BBB 20% 2% 9.3 0% 10% 8.8 Sr./other 7
Slide 37: 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 38: Ambition: sustainable savings
Ambition: sustainable savings Share of fund capital in sustainable funds* Having a broad set of sustainable investment alternatives 87% 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