Nordnet Ab · OMXSTO:SAVE
Nordnet Ab — Debt Investor Presentation (November 2021)
44 slides from Nordnet Ab's debt investor presentation, November 2021
Slide 1: Investor presentation SEK Additional Tier 1
Investor presentation SEK Additional Tier 1 Nordnet AB (publ) November 2021 Nordnet AB (publ)
Slide 2: Disclaimer
Disclaimer Acceptance of limitations: The information in this presentation (the “Presentation”) is furnished Information sources: The information in this Presentation is presented by the Company or the by Nordnet AB (publ), reg. no. 559073-6681 (the “Company” and together with its direct and Group o
Slide 3: Disclaimer
Disclaimer Conflicts of interest: The Joint Bookrunners, their clients and the Representatives may hold Distribution: The information in this Presentation is not for release, publication or distribution, shares, options or other securities of the Group and/or the Company and may, as principal or dir
Slide 4: Disclaimer
Disclaimer Target market: Solely for the purposes of the manufacturers’ (as used herein, “Manufacturers” refers to the Joint Bookrunners) product approval process, the target market assessment in respect of the Notes has led to the conclusion that: (i) the target market for the Notes is eligible cou
Slide 5: Today's presenter
Today’s presenter Lennart Krän CFO With Nordnet since 2019. MSc in Economics from Stockholm University and certified financial analyst, Stockholm School of Economics. He has experience from the financial services sector and has had positions such as CEO of SalusAnsvar and CFO at SBAB and HSBC Invest
Slide 6: Agenda
Agenda Transaction overview Business update Asset quality Liquidity and capital position Proposed AT1 transaction Appendix Nordnet AB (publ)
Slide 7: Transaction overview
Transaction overview Key Investment Highlights Transaction rationale Well-diversified business model SEK Benchmark Solid geographic distribution Perpetual NC5.25Y Additional Tier 1 • Optimizing the capital structure in regards to regulatory requirements Strong organic growth • Nordnet is committed t
Slide 8: About Nordnet
About Nordnet • Attractive market fundamentals with long-term structural growth drivers • Only pan-Nordic digital investment and savings platform at SEK 728bn scale in savings capital • Superior customer experience and proposition driving market share gains • Profitable customer growth • Agile and s
Slide 9: Agenda
Agenda Transaction overview Business update Asset quality Liquidity and capital position Proposed AT1 transaction Appendix Nordnet AB (publ)
Slide 10: Business overview
10 Business overview Founded in 1996, Nordnet was a pioneer in online brokerage and has a longstanding history of innovation • Today, Nordnet is a leading digital platform focusing on savings and investments, complemented by select lending products to support the core business • ~650 employees ser
Slide 11: Clear strategic focus
Clear strategic focus SAVINGS AND NORDIC DIGITAL INDIVIDUALS INVESTMENTS REGION DISTRIBUTION 11 Public presentation
Slide 12: We have been building our competitive moat for more than two decades
We have been building our competitive moat for more than two decades Operating in all four Nordic markets with… Local Fully Strong and presence Operating licensed trusted with at scale and brand localized regulated offerings Leading customer proposition based on… One stop Leading shop for Product Co
Slide 13: One-stop shop for savings and investments
One-stop shop for savings and investments Securities brokerage Shares, bonds, warrants, options, futures, ETFs, ETPs, certificates Funds >2,000 mutual funds, index funds, hedge funds, fund-of- funds as well as fund guidance and advisory Stock lending, endowment insurance, indiv
Slide 14: Nordnet has three customer offerings targeted at three customer groups
Nordnet has three customer offerings targeted at three customer groups Customer offering Retail Private Banking2 Partner (43%) (45%) (12%) Share of September 2021 savings capital (%) Savers set aside small amounts of money each month, which Savers1 “Do it over time can grow into a meaningful buffe
Slide 15: Significant investments undertaken to enhance customer experience and scalability
Significant investments undertaken to enhance customer experience and scalability Rolled out new platform in all countries Established high pace of new product launches Unlisted holdings in Fund pricing model, endowment wrapper Denmark New margin lending Platform model, EPK Norway model Norway Digit
Slide 16: Building the best platform for savings and investments
Building the best platform for savings and investments… Delightful digital channels Automated and inspiring customer journeys Cutting-edge financial products Broadest Own index ETF range funds Customer User Customer Up-selling / acquisition experience engagement cross-selling Margin Stock lending le
Slide 17: That drives customer engagement, satisfaction and market share gains
…that drives customer engagement, satisfaction and market share gains Activity on the Nordnet app Market share across the Nordic region % of traded value originated from the app1 Estimated market share3 December 2019 September 2021 2016 2020 App 6,0% App 25% 5,8% 12% 5,5% ~250,000 ~721,000 active us
Slide 18: Nordnet competes primarily with online platforms and incumbent banks
Nordnet competes primarily with online platforms and incumbent banks Sweden Norway Denmark Finland Main online platforms Continued migration from incumbent banks to digital platforms Main incumbent banks Source: Leading third party management consulting firm 18 Public presentation
Slide 19: Sustainability focus areas
Sustainability focus areas A responsible and sustainable business Practice transparency, compliance and a high ethical standard Reduce our direct impact on the environment and climate. Promote physical and mental health through a good working environment Equality and diversity A better gende
Slide 20: We operate in an attractive market with strong and sustainable growth prospects
We operate in an attractive market with strong and sustainable growth prospects Consistent growth in the Nordic …with Nordnet’s addressable market1 …and digital platforms2 significantly savings market… growing faster… outgrowing the market Savings capital (SEKtln) Savings capital (SEKtln) Savings ca
Slide 21: Continued acceleration of long-term growth
Continued acceleration of long-term growth Customers Savings capital Thousand SEKbn 1 537 728 1 221 565 914 395 765 669 567 272 286 490 235 433 200 367 395 314 344 166 136 224 193 90 102 90 104 128 157 86 103 49 55 39 21 36 2010 2018 2005 2007 2020 2008 2011 2013 2015 2017 2004 2006 2009 9M 2021 201
Slide 22: 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 portfolio1 Credit portfolio Savings capital SEK ~728bn SEK ~48bn SEK ~24bn ~71% ~19% ~10% ~49% ~34% ~17% Margin Mortgage Shares Funds Deposits Unsecured lending2 lending Used to fund balanc
Slide 23: 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 9M 2021 revenue by country (%) Nordnet’s number of customers by country Revenue margin by country (bps)1 SEKm Sep 2020
Slide 24: Strong regional income diversification
Strong regional income diversification Revenue by country SEKm Sweden Norway Denmark Finland 3 506 19% Substantially improved regional distribution 2 679 18% 24% 1 573 22% 20% Supported by strong customer satisfaction 1 310 14% 1 196 1 244 19% 15% 16% 14% 14% 19% 18% 20% 19% Critical mass also a
Slide 25: Large part of total income is recurring
Large part of total income is recurring Adjusted revenue by income type1 Regionally diversified recurring income ² SEKm SEKm Net transaction related Other income Sweden Norway Denmark Finland 1 283 Net non-transaction related Net financial transactions 97 1 020 136 Net Interest income 3 506 54 Margi
Slide 26: Revenue growth together with operating leverage driving significant profit growth
Revenue growth together with operating leverage driving significant profit growth Adjusted revenues Adjusted operating expenses Adjusted profit before tax SEKm1 SEKm2 SEKm12 44 44 60 56 85 73 40 32 7 13 40 45 3 506 CAGR 43% 2 679 2 346 CAGR 167% 1 508 CAGR (0%) 1 576 1 310 1 117 1 097 1 064 1 128 37
Slide 27: Group income statement
Group income statement January – September (SEKm) 2020 2021 YoY % Net transaction related income 1 180 1 719 46% Net non-transaction related income 245 370 51% Net commision income 1 425 2 089 47% Net interest income 455 533 17% Net financial transactions (10) 15 - Other income 41 102 149% Adjusted
Slide 28: Agenda
Agenda Transaction overview Business update Asset quality Liquidity and capital position Proposed AT1 transaction Appendix Nordnet AB (publ)
Slide 29: High quality loan portfolio with loan losses remaining at very low levels
High quality loan portfolio with loan losses remaining at very low levels 9M 2021 savings capital Usage of deposits Lending SEKbn SEKbn SEKbn 1 2 Lending Liquidity portfolio Unsecured Mortgage Margin lending Funds 73 24.2 19% 61 17.8 11.9 48 728 10% Deposits 43 8.0 5.8 8.2 71% Brokerage 18 24 4.0 4.
Slide 30: Stable LTV and low risk in loan portfolio
Stable LTV and low risk in loan portfolio No material impact in LTV Lending volume LTV development during Feb/March 2020 SEKbn % Margin lending Mortgage 50 Margin lending¹ Mortgage Unsecured 40 30 20 25 24.2 10 0 Jan-17 Jul-17 Jan-18 Jul-18 Jan-19 Jul-19 Jan-20 Jul-20 Jan-21 Jul-21 20 19.7 11.9 Net
Slide 31: Liquidity portfolio – Conglomerate
Liquidity portfolio – Conglomerate Portfolio volume* (SEK bn) Rating (S&P equivalent) — 2021-09 Maturity structure* (SEK bn) — 2021-09 11.9 +8% +1% (27%) 9.7 43 9.0 (22%) 7.9 41 0.05 BBB (21%) 41 (18%) 0.03 A 16% 38 2 6 3% 4 3.7 1 10% 21% (9%) 21% 18% 1.1 12% (3%) 9% 1% 0.2% 3% 0 - 1Y 1 - 2Y 2 - 3Y
Slide 32: Agenda
Agenda Transaction overview Business update Asset quality Liquidity and capital position Proposed AT1 transaction Appendix Nordnet AB (publ)
Slide 33: Liquidity – Consolidated situation
Liquidity – Consolidated situation Liquidity Coverage Ratio Net Stable Funding Ratio Loan-to-Deposit Ratio SEK bn SEK bn SEK bn (%) (%) (%) 80 500 80 236 237 239 250 80 100 449 432 417 65 66 65 63 365 400 60 60 200 60 80 60 60 56 60 300 150 60 40 40 40 38 39 30 30 200 100 36 40 29 28 34 25 25 25 26
Slide 34: Capital requirements and deposit development
Capital requirements and deposit development Risk based & Leverage Ratio requirements Total customer deposits Consolidated Situation | September 2021, SEK million Conglomerate | 2007-12 – 2021-09 3,435 (21.8%) 70 000 80 3,014 Total customer deposits (SEK bn) Deposits per customer (SEK) (19.2%) 2,694
Slide 35: Balance sheet, capital requirements and LCR
Balance sheet, capital requirements and LCR Consolidated situation Balance Sheet (SEK billion) 82 76 71 70 73 74 75 9 1 4 1 3 1 4 Other assets 52 16 6 1 6 1 8 1 1 17 19 20 23 25 26 Intangibles 4 1 16 56 47 44 47 45 45 Lending 31 44 Treasury 45 Deposits 67 62 61 60 65 65 66 3 4 Other liabilities 3 6
Slide 36: Agenda
Agenda Transaction overview Business update Asset quality Liquidity and capital position Proposed AT1 transaction Appendix Nordnet AB (publ)
Slide 37: Indicative Term Sheet
Indicative Term Sheet Issuer Nordnet AB (publ) Status of Notes Additional Tier 1 Notes, constituting unsecured, subordinated obligations of the issuer Currency & Principal Amount Expected SEK 500 million Maturity date Perpetual First call date [] November 2026 At par on any date from and including [
Slide 38: Agenda
Agenda Transaction overview Business update Asset quality Liquidity and capital position Proposed AT1 transaction Appendix Nordnet AB (publ)
Slide 39: Group income statement
Group income statement MSEK 2017 2018 2019 2020 LTM 9M 2021 Adjusted total income 1 244 1 310 1 508 2 679 3 506 Adjusted operating expenses (964) (1 117) (1 097) (1 064) (1 128) Net credit losses (35) (36) (34) (39) (31) Adjusted operating profit before tax 245 157 377 1 576 2 346 Items affecting co
Slide 40: Items affecting comparability
Items affecting comparability SEKm 2021 2020 2019 2018 2017 Non-recurring items – Expenses Delisting from Nasdaq (45) Acquisition of Netfonds (35) (16) Deduction right VAT (20) (30) IPO related expenses (109) Non-recurring items – Income Revaluation of the shareholdings in Tink AB1 66 Total - (129)
Slide 41: Group balance sheet
Group balance sheet SEKm 2017 2018 2019 2020 9M 2021 Assets Cash and balances in central banks 392 1 344 410 3 100 5 271 Debt securities 17 852 20 036 23 600 32 616 39 810 Loans to credit institutions 276 333 505 604 683 Lending to the public 11 814 14 204 16 128 20 312 25 776 Insurance assets 46 51
Slide 42: Difference condensed and prudential consolidation
Difference condensed and prudential consolidation SEKm September 2021 Condensed consolidation Prudential consolidation Assets Cash and balances in central banks 5,271 5,271 Debt securities 39,810 37,127, Loans to credit institutions 683 2,605, Lending to the public 25,776 25,776 Insurance assets 136
Slide 43: 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% +48% +54% 440 308 324 +70% 120 388 208 210 70 Q3 2020 Q3 2021 Q3 2020 Q3 2021 Q3 2020 Q3 2021 Q3 2020 Q3 2021 Denmark Finla
Slide 44: Nordnet history
44 Nordnet history Public presentation