Nordnet Ab · OMXSTO:SAVE
Nordnet Ab — Debt Investor Presentation (February 2023)
33 slides from Nordnet Ab's debt investor presentation, February 2023
Slide 1: 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 2: Disclaimer
Disclaimer Conflicts of interest: The Bookrunner, its clients and the Representatives may hold shares, Distribution: The information in this Presentation is not for release, publication or distribution, options or other securities of the Group and/or the Company and may, as principal or agent, buy d
Slide 3: Disclaimer
Disclaimer Target market: Solely for the purposes of the manufacturers’ (as used herein, “Manufacturers” refers to the Bookrunner) 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 counterpar
Slide 4: Today's presenter
Today’s presenter SEK 715bn in savings capital 1.7 million customers in 4 Nordic countries Lennart Krän CFO With Nordnet since 2019. 522 300 (31%) MSc in Economics from Stockholm University and certified financial analyst, Stockholm 363 500 (21%) School of Economics. 449 900 (26%) He has experience
Slide 5: Transaction overview
Transaction overview Transaction Rationale SEK Benchmark Perpetual NC5.25Y Additional Tier 1 • Optimize the long-term capital structure • Secure ability to grow and meet regulatory requirements • Eligible as both CRR (AT1) & Solvency II (Tier 2) capital • Trigger event, CET1 below 7% The terms and c
Slide 6: Key Investment Highlights
Transaction overview Key Investment Highlights Clear strategic focus Pan Nordic - strong market positions across four Nordic countries Track record of scalable and profitable growth Future proof technological platform Capital light business model - solid capital and liquidity position Transaction de
Slide 7: Clear strategic focus
Clear strategic focus SAVINGS AND NORDIC DIGITAL INDIVIDUALS INVESTMENTS REGION DISTRIBUTION 7 Confidential
Slide 8: One-stop shop for savings and investments
One-stop shop for savings and investments Securities brokerage ✓ ✓ ✓ ✓ Extend lead within securities brokerage Funds ✓ ✓ ✓ ✓ Become as strong within Funds as we are in brokerage Pension ✓ ✓ ✓ ✓ Step-change in growth throughout Nordic markets Margin lending ✓ ✓ ✓ ✓ Boost trading power through capital
Slide 9: ESG embedded in Nordnet's DNA
ESG embedded in Nordnet’s DNA Democratize savings and investments ▪ Increase the general knowledge about personal finances ▪ Develop user-friendly and inspirational services for saving and investments ▪ Become the leading platform in the Nordics for sustainable savings Equality and diversity ▪ A bet
Slide 10: Key Investment Highlights
Transaction overview Key Investment Highlights Clear focus Pan Nordic - strong market positions across four Nordic countries Track record of scalable and profitable growth Future proof technological platform Capital light business model - solid capital and liquidity position Transaction details 10 C
Slide 11: 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… …but other Nordic countries are …and at good margins growing faster… Nordnet’s 2022 revenue by country (%) Nordnet’s number of customers by country Revenue margin by country (bps)2 SEKm Dec 21 Dec 22
Slide 12: Pan-Nordic powerhouse
Pan-Nordic powerhouse #1 Nordic broker #1 domestic broker on Nordic exchanges 2022 Total turnover on Nordic exchanges 2022 (SEKbn) 1,400 1,200 2022 2021 2020 1,000 NPS position in Nordics #1 #1 NPS position vs key competitors with #1 rank in DK, FI, NO; #2 in SE 800 600 400 200 #1 Market share in No
Slide 13: 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 2021 | Million Savings capital, SEKtln December 2021, SEK bn Nordnet’s share Market size current Market size extended Nordnet’s share of addres
Slide 14: Key Investment Highlights
Transaction overview Key Investment Highlights Clear focus Pan Nordic - strong market positions across four Nordic countries Track record of scalable and profitable growth Future proof technological platform Capital light business model - solid capital and liquidity position Transaction details 14 C
Slide 15: Strong long-term growth in customers and savings capital
Strong long-term growth in customers and savings capital Customers Savings capital Thousands SEKbn 1 708 802 1,601 715 1,221 565 914 395 765 669 567 272 286 490 235 367 395 433 200 314 344 166 193 224 136 128 157 90 102 90 104 86 103 49 55 39 21 36 2010 2018 2007 2011 2005 2020 2008 2022 2017 2004 2
Slide 16: Diversified across revenue streams and geographies
Diversified across revenue streams and geographies Adjusted revenue by income type1 Regionally diversified recurring income SEKm SEKm Net transaction related Net Interest income Sweden Norway Denmark Finland 1,763 Net fund related income Other income² 165 1,418 190 129 1,016 155 493 863 53 67 318 Ma
Slide 17: Rigorous focus on cost discipline to drive operating leverage
Rigorous focus on cost discipline to drive operating leverage Adjusted operating expenses SEKm General administrative expenses Depreciation and amortisation Other operating expenses Full year 2020: SEK1,064m Full year 2021: SEK1,141m Full year 2022: SEK1,210m 304 314 299 297 296 287 280 283 278 14 2
Slide 18: Revenue growth together with operating leverage driving significant profit growth
Revenue growth together with operating leverage driving significant profit growth Adjusted revenue1 Adjusted operating expenses1 Adjusted profit before tax1 SEKm SEKm SEKm 3,639 3,382 2,689 2,451 2,115 CAGR +3% 1,524 1,576 1,141 1,210 1,097 1,064 377 2019 2020 2021 2022 2019 2020 2021 2022 2019 2020
Slide 19: Key Investment Highlights
Transaction overview Key Investment Highlights Clear focus Pan Nordic - strong market positions across four Nordic countries Track record of scalable and profitable growth Future proof technological platform Capital light business model - solid capital and liquidity position Transaction details 19 C
Slide 20: A typical day on the Nordnet platform 2022
A typical day on the Nordnet platform 2022 EU market open: ~18k request/s US market open: ~8k request/s EU market close (SE/FI/DE) +40m net fund buys US market close SEK 220k 260k DAU app 110k DAU web trades 60k x-border trades +630 +140m +8m 6.4bn API order operations/s Note: Average 2022 figures p
Slide 21: Key Investment Highlights
Transaction overview Key Investment Highlights Clear focus Pan Nordic - strong market positions across four Nordic countries Track record of scalable and profitable growth Future proof technological platform Capital light business model - solid capital and liquidity position Transaction details 21
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 portfolio Credit portfolio Savings capital SEK ~715bn SEK ~58bn SEK ~27bn ~69% ~20% ~11% ~45% ~40% ~15% Margin Mortgage Shares Funds Deposits Unsecured lending3 lending Net commission Net c
Slide 23: Legal structure
Legal structure • Nordnet AB (publ) is the parent company of the group, for the purpose of both banking and insurance regulation • All operations are carried out in Nordnet AB’s subsidiaries Nordnet AB (publ) • Nordnet Bank AB holds a banking license and is supervised by the Swedish Financial Superv
Slide 24: Balance sheet and Capital requirements
Balance sheet and Capital requirements Balance Sheet Consolidated Situation | SEK bn CET1 Requirement Consolidated Situation | 2019 – 2022 (% RWE) CET1 ratio Capital requirement Other assets 48,6 51,4 50,7 Lending 33,6 26,3 28,5 Treasury 18.1% 16,1 20,3 14.8% 15.3% 15.0% 2,1 -3,0 1,9 2,2 -5,8 2,1 -5
Slide 25: Solvency Overview
Solvency Overview Solo companies and Nordnet Insurance Group Nordnet Pension AB Nordnet Insurance Group (Insurance companies & Nordnet AB) 186% Solvency breakdown - SCR Solvency breakdown - MCR 143% 151% SCR Ratio MCR Ratio 135% Existing SEK1,1bn AT1 Capital 119% AT1 Capital 260% New SEK128mn New SE
Slide 26: Liquidity – Consolidated situation
Liquidity – Consolidated situation Liquidity Coverage Ratio Net Stable Funding Ratio Loan-to-Deposit Ratio 598% 244% 80 600 80 243% 250 80 80 222% 73 217% 70 68 500 66 467% 448% 200 60 60 417% 60 56 60 60 400 150 45 42 40 300 40 40 39% 39% 40 36% 30 29 100 34% 29 29 29 25 27 26 23 200 19 20 20 20 20
Slide 27: Liquidity Portfolio
Liquidity Portfolio Portfolio volume* (SEK bn) Rating (S&P equivalent) Maturity structure (SEK bn) — 2022-12 +37% +12% 17.1 3% 1% 2% 5% 1% 9% (32.7%) 52.2 26% 23% 20% 11.2 11.3 0.1 17.5% (21.4%) (21.6%) 8.6 4.2 46.5 (16.5%) 0.1 4.1 71% 68% 71% 5.7 21.0% 21.5% (7.8%) 15.3% 16.5% 38.2 7.8% 1.3 0.0 0.4
Slide 28: High quality loan portfolio with loan losses remaining at very low levels
High quality loan portfolio with loan losses remaining at very low levels 2022 savings capital Usage of deposits Lending SEKbn SEKbn SEKbn 27.4 Lending¹ 1 Liquidity portfolio 25.4 2 Funds 85 19.7 12.3 20% 79 12.4 15.7 13.7 9.2 53 58 7.1 715 11% Deposits 5.6 10.9 Margin lending¹ 8.9 4.5 6.5 Mortgage
Slide 29: Key Investment Highlights
Transaction overview Key Investment Highlights Clear focus Pan Nordic - strong market positions across four Nordic countries Track record of scalable and profitable growth Future proof technological platform Capital light business model - solid capital and liquidity position Transaction details 29 C
Slide 30: Transaction overview
Transaction overview Transaction Rationale SEK Benchmark Perpetual NC5.25Y Additional Tier 1 • Optimize the long-term capital structure • Secure ability to grow and meet regulatory requirements • Eligible as both CRR (AT1) & Solvency II (Tier 2) capital • Trigger event, CET1 below 7% The terms and c
Slide 31: Key Terms and Conditions
Key Terms and Conditions Issuer: Nordnet AB (publ) Instrument: Additional Tier 1 and Solvency II Tier 2 Capital Notes Expected volume: SEK 200-300m. Denominations of SEK 1,250,000 + SEK 1,250,000 Tenor: Perpetual with a 5 year non-call period (PerpNC5) followed by a 3 month par call at 100% Callable
Slide 32: Brief overview of CRR (AT1) and Solvency II (Tier 2) capital notes terms
Brief overview* of CRR (AT1) and Solvency II (Tier 2) capital notes terms Existing Proposed Issuer: Notes Fulfils requirement Fulfils the requirements for regulatory capital under both CRR (banking capital adequacy • CRR (AT1) • CRR (AT1) • CRR (AT1) & Solvency II (Tier 2) for: regulations) and Solv
Slide 33: Brief overview of CRR (AT1) and Solvency II (Tier 2) capital notes terms, cont.
Brief overview* of CRR (AT1) and Solvency II (Tier 2) capital notes terms, cont. Issuer: Existing Proposed Notes Both Loss Absorption and Suspension are based on breaches that signals a distressed • Suspension of final and early institution, where Loss Absorption only has one triggering mechanic and