Nordnet AB · OMXSTO:SAVE
Nordnet AB — Q2 2021 Earnings Presentation
30 slides from Nordnet AB's earnings presentation, July 2021
Slide 1: Q2 results 2021
Q2 results 2021
Slide 2: Key highlights second quarter 2021
Key highlights second quarter 2021 n Continued high customer growth, customer base increased with 38% in one year n Savings capital exceeds 700 BSEK and reaches new record levels, high net-savings n Stable growth in loans business, lending volume on new ATH n Strong development for the fund business
Slide 3: Financial highlights second quarter 2021
Financial highlights second quarter 2021 Customers Savings capital Number of trades Thousand SEKbn Million +38% +13% 1 475 +66% 703 16.3 14.5 1 069 425 Q2 2020 Q2 2021 Q2 2020 Q2 2021 Q2 2020 Q2 2021 Adjusted revenues Adjusted operating expenses Adjusted profit before tax SEKm1 SEKm1 SEKm1 +28% 830
Slide 4: Continued acceleration of long-term growth
Continued acceleration of long-term growth Customers Savings capital Thousand SEKbn 1 1 % 1 475 % 30 43 703 R R AG C AG C 1 221 565 914 7% % 395 G R1 765 R 20 CA C AG 669 567 272 286 490 235 433 200 367 395 314 344 166 136 224 193 90 102 90 104 128 157 86 103 49 55 39 21 36 2007 2012 2004 2006 2009
Slide 5: Strong quarter in customer growth and net savings
Strong quarter in customer growth and net savings New customers by month Net savings per month Thousand SEKbn 2020 2021 254 2020 2021 49 66 21 37 156 55 50 46 14 37 38 33 11 9 9 9 26 27 27 8 23 24 21 20 7 6 18 18 17 6 16 5 5 4 4 4 4 3 2 1 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec 6M 6M Jan Feb
Slide 6: Only pan-Nordic digital savings and investment platform at scale
Only pan-Nordic digital savings and investment platform at scale Sweden is still the largest market… …and other Nordic countries are …at higher margins growing faster… Nordnet’s LTM 6M 2021 revenue by country (%) Nordnet’s number of customers by country Revenue margin by country (bps)1 Jun 2020 Jun
Slide 7: Continued strong customer and savings capital growth across our geographies
Continued strong customer and savings capital growth across our geographies Sweden Norway Customers Savings capital Customers Savings capital Thousand SEKbn Thousand SEKbn +13% +65% +60% +83% 431 299 311 116 381 181 195 63 Q2 2020 Q2 2021 Q2 2020 Q2 2021 Q2 2020 Q2 2021 Q2 2020 Q2 2021 Denmark Finla
Slide 8: Strong revenue growth driven by higher savings capital and resilient margins
Strong revenue growth driven by higher savings capital and resilient margins Adjusted revenue by income type Savings capital by product SEKm1 SEKbn Brokerage Funds Deposits Net transaction related Net non-transaction related Net Interest income Other income² +43 % CAGR 703 Adjusted revenue / avg. sa
Slide 9: Significant growth in number of trading customers
Significant growth in number of trading customers with an increased interest for cross-border trading Trading customers Trades per trading customer 20 100% 700 000 15 90% 10 Number of trading customers 600 000 80% Share of all customers 5 70% 500 000 0 Q1-17 Q2-17 Q3-17 Q4-17 Q1-18 Q2-18 Q3-18 Q4-18
Slide 10: Trading seasonality shows a clear V-shape
Trading seasonality shows a clear V-shape Trades per customer per trading day Share of full year trades per month 2015-2019 2020 2021 2015-2019 9.8% 0.34 0.32 9.2% 0.30 0.28 8.7% 8.7% 0.26 8.6% 0.24 8.3% 8.2% 0.22 8.1% 0.20 7.8% 7.7% 0.18 7.5% 7.5% 0.16 0.14 0.12 Jan Feb Mar Apr May Jun Jul Aug Sep
Slide 11: 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 stable or increasing market shares across our geographies Market share based on number of trades1 on the relevant exchange (%) Q2 2020 Q2 2021 11,8% 9,2%
Slide 12: 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 13: Select Q2 2021 product releases
Select Q2 2021 product releases Re-launch of Finnish site in Swedish Improvements and new features in web & app Enhanced offering within sustainable savings Launch of Nordnet Tech Index Fund 13
Slide 14: Financial performance
Financial performance
Slide 15: Strong momentum in customer and savings capital development
Strong momentum in customer and savings capital development Customers Savings capital by asset class Thousands SEKbn 19% 19% 19% 26% 25% 27% 34% 39% 38% 412 409 409 403 401 404 416 426 449 1 475 Brokerage Funds Deposits 703 1 389 648 67 1 221 65 565 1 123 131 1 069 60 118 1 002 478 882 914 425 100 8
Slide 16: Step change in all major income streams
Step change in all major income streams… Adjusted revenue by income stream SEKm Net transaction related income Net non-transaction related income Net interest income Net financial transactions Other income LTM 6M 2021: Full year 2019: SEK1,508m Full year 2020: SEK2,679m SEK3,328m 1 114 19 168 116 83
Slide 17: …with stable operating expenses…
…with stable operating expenses… Adjusted operating expenses SEKm General administrative expenses Depreciation and amortisation Other operating expenses LTM 6M 2021: Full year 2019: SEK1,097m Full year 2020: SEK1,064m SEK1,108m 295 287 280 283 270 272 12 259 260 258 14 11 14 9 9 48 10 6 7 41 40 40 4
Slide 18: …resulting in considerable operating leverage
…resulting in considerable operating leverage Adjusted revenue Adjusted operating expenses³ Adjusted profit before tax SEKm SEKm SEKm 55 59 29 20 58 70 1 944 % + 50 1 365 1 295 3% +8 747 +9% 519 563 6M 2020 6M 2021 6M 2020 6M 2021 6M 2020 6M 2021 Income in relation to savings capital (bps)¹ Operatin
Slide 19: High quality loan portfolio with loan losses remaining at very low levels
High quality loan portfolio with loan losses remaining at very low levels 6M 2021 savings capital Usage of deposits Lending SEKbn SEKbn SEKbn 1 2 Lending Liquidity portfolio Unsecured Mortgage Margin lending Funds 67 23.2 19% 62 16.1 50% 44 703 9% Deposits 46 42% 72% 33% 33% 16 23 Brokerage 25% 17%
Slide 20: Maintained capital position
Maintained capital position Total capital ratio Leverage ratio % % Capital requirement Additional Tier 1 ratio Leverage ratio minimum requirement, CET1 ratio Buffer over total capital requirement - In addition to the minimum requirement the SFSA will add on a buffer specific for each bank 3,4% 4,2%
Slide 21: Financial performance vs. medium-term financial targets
Financial performance vs. medium-term financial targets Target Customer satisfaction Customer growth Average savings capital per customer¹ NPS % SEK (‘000) 38% 34% 449 412 409 416 ~SEK409k per 19% customer 10-15% p.a. 12% customer growth over the cycle 2010-2018 2019 2020 LTM 6M 2018 2019 2020 LTM 6
Slide 22: Key focus areas
Key focus areas Engaged § Building the best platform for savings and investments customers § #1 NPS and high customer retention § Upward trend on eNPS Engaged Profitable § Capture Nordic growth potential § Attract and retain top talent employees growth § Stable cost level § Compliance and risk manag
Slide 23: Thank you!
Thank you!
Slide 24: Appendix
Appendix Ae Nordnet
Slide 25: Financial highlights second quarter 2021
Financial highlights second quarter 2021 SEKm unless otherwise stated Q2 2021 Q1 2021 QoQ % Q2 2020 YoY % Condensed P&L1 Adjusted total income 830 1 114 (25%) 650 28% Adjusted operating expenses (283) (280) 1% (260) 9% Adjusted profit before tax 536 830 (35%) 380 41% KPIs New customers +86,600 +167,
Slide 26: Summary P&L
Summary P&L SEKm Q2 2021 Q1 2021 QoQ % Q2 2020 YoY % LTM 6M 2021 LTM 6M 2020 YoY % Adjusted total income 830 1 114 (25%) 650 28% 3 328 2 094 59% Adjusted operating expenses (283) (280) 1% (260) 9% (1 108) (1 086) 2% Net credit losses (11) (4) 166% (10) 9% (26) (43) (41%) Adjusted profit before tax 5
Slide 27: Items affecting comparability
Items affecting comparability Q2 Q1 Q4 Q3 Q2 Q1 Q4 Q3 Q2 Q1 FY FY FY FY SEKm 2021 2021 2020 2020 2020 2020 2019 2019 2019 2019 2020 2019 2018 2017 Non-recurring items – Expenses Delisting from Nasdaq (45) Acquisition of Netfonds (19) (2) (8) (6) - (35) (16) Deduction right VAT (9) (11) (30) (20) (30
Slide 28: 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 portfolio3 Credit portfolio Savings capital SEK ~703bn SEK ~44bn SEK ~23bn ~72% ~19% ~19% ~50% ~33% ~17% Margin Mortgage Shares Funds Deposits Unsecured lending4 lending Net commission Net
Slide 29: Profitable customer growth with significant long-term potential
Profitable customer growth with significant long-term potential Attractive customer lifetime value driven by low …with strong further growth outlook as younger acquisition cost and churn... customers accumulate and inherit wealth Nordnet’s customer acquisition cost vs. average lifetime customer valu
Slide 30: Share of trading per application
Share of trading per application Distribution of trades per application 100% 8% 9% 8% 9% 9% 9% 9% 9% 8% 7% 7% 7% 6% 10% 90% 15% 21% 20% 21% 19% 80% 18% 28% 28% 25% 26% 31% 29% 29% Share of total trades 31% 7% 70% 9% 5% 11% 10% 15% 60% 22% 31% 29% 27% 29% 50% 22% 26% 33% 19% 40% 37% 37% 35% 40% 38% 1