Nordnet Ab · OMXSTO:SAVE
Nordnet Ab — Q2 2023 Earnings Presentation
36 slides from Nordnet Ab's earnings presentation, Jul 25, 2023
Slide 1: Nordnet Q2 2023 Results presentation
Nordnet Q2 2023 Results presentation
Slide 2: Key highlights second quarter 2023
Key highlights second quarter 2023 Strong financial performance with Positive interest rate sensitivity – set revenue growing ~50% and profit to grow NII significantly in 2023 ~75% Good customer growth and positive Cost expected to meet full year net savings guidance Uncertain macro environment and
Slide 3: Financial highlights second quarter 2023
Financial highlights second quarter 2023 Customers Savings capital Number of trades Thousands SEKbn Million +9% +15% -16% 1,787 798 13.1 1,643 691 10.9 Q2 2022 Q2 2023 Q2 2022 Q2 2023 Q2 2022 Q2 2023 Adjusted revenues Adjusted operating expenses Adjusted profit before tax SEKm1 SEKm1 SEKm1 +47% 1,07
Slide 4: 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 94 2022 2023 30 79 27 9 20 6 14 17 16 14 5 13 12 13 13 13 12 10 10 11 11 3 3 3 3 3 8 9 8 3 3 2 2 2 1 1 1 Jan Feb Mar Apr May Jun Jul Aug Sep Oct N
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% +10% +9% +7% 437 462 299 381 124 132 271 350 Q2 2022 Q2 2023 Q2 2022 Q2 2023 Q2 2022 Q2 2023 Q2 2022 Q2 2023 Denmark Finland
Slide 6: Number of trading customers and share of all customers
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 Q2-22 Q3-22 Number of trading customers Q4-22 Q1-23
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) 0.34 285,300 80 0.32 72 70 0.30 233,3
Slide 8: Leading Nordic fund supermarket
Leading Nordic fund supermarket Fund capital by country Fund capital by allocation1 Only half of fund capital yields retrocessions2 SEKbn SEKbn Active Nordnet funds Other Retrocession Nordnet funds Platform fee Sweden Norway Denmark Finland Net fund yield (excl. FX income) | Bps, 1H 23 Index Fixed i
Slide 9: Deposits level decline driven by customer net buying of equities and mutual funds
Deposits level decline driven by customer net buying of equities and mutual funds Deposits/savings capital vs stock market performance Deposit development 2Q23 SEKbn SEKbn Brokerage/Funds (LHS) % Deposits (RHS) Avg % deposit range Share of Deposits (LHS) MSCI World index AuM 900 20% 9.7% 9.1% 800 18
Slide 10: Liquidity portfolio snapshot: ~SEK1.7bn in 2023
Liquidity portfolio snapshot: ~SEK1.7bn in 2023* *Assuming 2Q 2023 volume, currency allocation, credit spreads and market consensus estimates for IBOR development. Volume SEKbn Deposits Lending 1 Other/equity ~SEK1,700m Net interest income 61 64 58 58 52 53 50 47 47 47 389 356 SEKm 81 85 88 81 264 6
Slide 11: Loan portfolio snapshot: ~SEK1.3bn in 2023
Loan portfolio snapshot: ~SEK1.3bn in 2023* *Assuming 2Q 2023 volumes and interest as per July 1st, 2023. Unsecured Mortgage Margin lending Volume1 Net interest income ~SEK1,300m SEKbn SEKm 27.9 28.8 26.5 26.7 26.4 27.3 320 25.4 3.9 296 23.2 24.2 4.1 4.0 22.1 4.1 4.0 4.1 72 4.1 253 4.0 4.1 67 4.0 11
Slide 12: Deposit interest snapshot: SEK ~330m in 2023
Deposit interest snapshot: SEK ~330m in 2023* *Assuming 2Q 2023 volume, currency and customer account mix, and interest rates as of June 30, 2023 Estimated interest cost 2023 Development savings accounts SEKm SEKbn Share of deposits SE NO DK FI % 7.1 Interest cost on total deposits (bps) 53 5.4 20%
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 802 798 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 54 32 24 17 17 17 25 59 67 63 66 3,969 3,639 3,382 2,689 2,639 2,451 2,115 1,524 1,576 1,210 1,258 1,097 1,064 1,141 377 2019 2020 2021 2022 LTM Q2 2019 20
Slide 15: Select Q2 2023 product highlights
Select Q2 2023 product highlights New landing pages for the web in all four 15 new versions of our award-winning app countries, integrated with our new CMS with lots of user-friendly features and flows Improvements in the curated lists More Shareville in the app Deposits with Trustly in Finland 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) 72.5 SEKbn % (S&P equivalent) SEKbn HTC +12.4 AFS1: -83.3 Gov/Gov reg/Supr. Deposits in SEKbn Covered AAA 13.3 AA 22% 21% 8% 10.0 9.0 0% 4% 7.5 5% Sr./othe
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 1,787 802 798 1,708 1,601 715 565 1,221 914 395 765 669 567 272 286 490 235 433 200 367 395 166 314 344 136 193 224 90 102 90 104 157 86 103 128 21 36 49 55 39 2010 2010 2018 2018 2007 2007 2005 2020 2
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% 477 416 444 426 “Deliver superior total returns to Around SEK420k per customer shareholders via a pay-out ratio 15% of 70% of statutory net income, 10%1 9% 10-15% p.a.
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 second quarter 2023
Financial highlights second quarter 2023 SEKm unless otherwise stated Q2 2023 Q1 2023 QoQ % Q2 2023 YoY % Condensed P&L1 Adjusted total income 1,071 1,134 (6%) 728 47% Adjusted operating expenses (321) (320) 0% (296) 8% Adjusted profit before tax 729 794 (8%) 420 74% KPIs New customers 35,400 43,300
Slide 27: Summary P&L
Summary P&L LTM Q2 LTM Q2 SEKm Q2 2023 Q1 2023 QoQ % Q2 2022 YoY % YoY % 2023 2022 Adjusted total income 1 071 1 134 (6%) 728 47% 3 969 3 308 20% Adjusted operating expenses (321) (320) 0% (296) 8% (1 258) (1 170) 8% Net credit losses (18) (17) 9% (9) 108% (60) (40) 51% Imposed levies: Resolution fe
Slide 28: Items affecting comparability
Items affecting comparability H1 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 ~798bn SEK ~47bn SEK ~29bn ~70% ~21% ~9% ~48% ~38% ~14% 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% 70% 44% 43% 40% 60% 40% 36% 50% 40% 30% 40% 36% 31% 32% 30% 20% 13% 20% 10% 10% 7% 10% 0% 0% 2017 2018 2019 2020 2021 2022 LTM Q2 2017 2018 2019 2020 2021
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 % 2Q23 | (‘000) 2 1 761 852 678 163 68 Pre 2020 2020-2021 2022 2023 4% 3% 2% 3% 3% 9% 2023 6.0% 2022 29% 35% 5.0% 38% 38% 4.0% 38% 2020-2021 3.0% 2.0% 6
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 1H23 Share of cross-border trades 1H23 bps % | million trades 121 17.9 5.2 1.8 0.5 25.4 24% 32% 29% 28% 26% Cross-border 84 62 58 54 Pre 2020 2020-2021 2022 2023 All Pre 2020 2020-2021 2022 2023 All Share of trades p
Slide 34: Strong cost control drives profit despite uncertain 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 2Q15 2Q15 Annualised customer growth
Slide 35: 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 36: Ambition: sustainable savings
Ambition: sustainable savings Share of fund capital in sustainable funds* Having a broad set of sustainable investment alternatives 82% 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