Company presentation. January 2018

Transcription

1 Company presentation January 2018

2 Sweden s leading online savings platform Founded in 1999 No 1 in stock market transactions in Sweden Most satisfied savings customers in Sweden for 9 consecutive years 837,100 customers SEK 300 bn in savings capital 422 employees 4.0% market share of the Swedish savings market 2

3 Customer satisfaction and employee engagement create shareholder value over time Long-term targets Customer satisfaction & Employee engagement Growth in customers and savings capital Scalability and cost efficiencies Customer proposition Cheaper, better and simpler offering through scale, cost control and top modern IT platform High user experience Information, education and decision-making tools Growth potential Occupational pension business Focus on broader customer groups Strong potential in existing customer base Revenues and costs More stable revenues through funds and mortgages High NII sensitivity Scalability and cost control vital 3

4 High customer satisfaction Creating a better future for millions of people Customer promise Price leadership Wide range of products Better tools Excellence in customer service To give our customers a better return on their savings than with any other bank or pension company 4

5 Growth strategy built on scale 1. Growth in savings capital 2. Customer satisfaction Innovation and user experience Customer growth Net inflow 1. Savings capital 2. Revenues/savings capital 3. Revenues/savings capital No fixed fees Revenues mainly based on transaction fees, net interest income (NII) and distribution fees from mutual funds NII and transaction revenues tend to be inversely correlated Costs/savings capital Mainly fixed costs, tight cost control High scalability Long term, cost growth should never exceed revenue growth 3. Costs/savings capital 5

6 Basis points Savings capital, SEK m Leading cost position Savings capital Income/savings capital Cost/savings capital

7 A history of growth built on innovation 7

8 Q1-14 Q2-14 Q3-14 Q4-14 Q1-15 Q2-15 Q3-15 Q4-15 Q1-16 Q2-16 Q3-16 Q4-16 Q1-17 Q2-17 Q3-17 Q4-17 Q1-18 Q2-18 Q3-18 Q4-18 Q1-14 Q2-14 Q3-14 Q4-14 Q1-15 Q2-15 Q3-15 Q4-15 Q1-16 Q2-16 Q3-16 Q4-16 Q1-17 Q2-17 Q3-17 Q4-17 Q1-18 Q2-18 Q3-18 Q4-18 Market share, % Market share, % Largest Swedish player in stock market transactions on Nasdaq OMX and First North 16,0 14,0 12,0 10,0 Transactions 10,0 9,0 8,0 7,0 6,0 Turnover 8,0 5,0 6,0 4,0 2,0 0,0 4,0 3,0 2,0 1,0 0,0 Market share of 11.7% in terms of transactions and 5.6% in turnover in Q

9 Q1-12 Q2-12 Q3-12 Q4-12 Q1-13 Q2-13 Q3-13 Q4-13 Q1-14 Q2-14 Q3-14 Q4-14 Q1-15 Q2-15 Q3-15 Q4-15 Q1-16 Q2-16 Q3-16 Q4-16 Q1-17 Q2-17 Q3-17 Q4-17 Q1-18 Q2-18 Q3-18 Q4-18 New customers Net inflow, SEK m Customer growth drives net inflow : Customers: +54,700 Net inflow: 20, : Customers: +96,400 Net inflow: 25, : Customers: +103,000 Net inflow: 26, : Customers: +140,000 Net inflow: 26, : Customers: +126,500 Net inflow: 27, : Customers: +20,100 Net inflow: 5, : Customers: +33,000 Net inflow: 10, Customer inflow Net inflow

10 Age distribution among new customers ,5 1 1,5 2 2,5 3 3,5 4 4, Share, % Age

11 Customers, % Savings capital, SEK m Strong long-term potential in existing customer base Market penetration 4,5% 4,0% 3,5% 1,40 1,20 Total share of Swedish savings market: 4.0% as of Q3 Total share of Swedish population: 8.0% as of 1 November 2018 ages 20-29: 13.4% 3,0% 1,00 ages 30-39: 15.4% 2,5% 2,0% 1,5% 1,0% 0,80 0,60 0,40 ages 40-49: 11.5% Highest penetration in urban areas. Stockholm region, snapshot (Women/Men) as of 1 November 2018: ages 20-29: 13%/23% ages 30-39: 16%/27% ages 40-49: 12%/21% 0,5% 0,20 ages 50-59: 11%/16% ages 60-69: 9%/12% 0,0% Age 0,00 Savings capital by age Total customer base Age distribution among new customers 11

12 Savings capital, SEK Savings capital grow by number of years at Avanza month 1 year 2 years 3 years 4 years 5 years 6 years 7 years 8 years 9 years 10 years 12 Average savings capital per customer (excluding customers with > SEK 10m in savings capital)

13 Significant growth potential with a 4.0% market share of the Swedish savings market The Swedish savings market SEK 8,300 bn Annual market growth of on average 10% last ten years An estimated 80% of the Swedish population saves in funds and 11% own shares 13 * An estimated 50% of the market is addressable for Avanza

14 Market share of 11.0% rolling 12M of net savings on the Swedish savings market Target raised to 10% as of

15 Growth potential in broader customer groups Knowledge & time Invest Trade Save Gamble 15 Begin Do it for me Help me do it Interest Do it myself

16 Share of total income Strategy for more recurring income 60% 50% 40% 30% 20% 10% 0% Net brokerage income Net interest income Fund commissions Other commission income 16

17 Savings capital, SEK Strong growth in occupational pension

18 Digitisation and new regulation potential for growth New customer behaviors already seen in other industries Focus on attracting new and broader customer groups as well as keeping current customers happy Product innovation and evolution User experience increasingly important Price remains key Increased scalability and cost leadership a prerequisite for a continued attractive customer offering 18

19 As always key success factors for Avanza Customer satisfaction keep the No 1 position Continuous growth in both number of customers and volume Create possibilities for continued strong innovation 19 Employee engagement key

20 Appendix Operations Financials Balance sheet data Contact details 36 20

21 Performance on targets 2018 Long-term targets Outcome 2018 Comments Sweden s most satisfied savers according to Swedish Quality Index Achieved in 2018 for the ninth consecutive year Engaged employees, enps of at least 45 Market share of at least 10 per cent R 12M of the total net inflow to the Swedish savings market 44 Very strong ambassadorship, and significantly improved from last year 11.0% 1 million customers ,100 Well on track to achieve the target Cost growth should not outpace income growth Dividend of at least 70 per cent of net profit for the year Not achieved due to higher investments in future growth. Annual cost growth is expected at 9-12 per cent from %* * Proposed dividend of SEK per share 21

22 Jan-14 Mar-14 May-14 Jul-14 Sep-14 Nov-14 Jan-15 Mar-15 May-15 Jul-15 Sep-15 Nov-15 Jan-16 Mar-16 May-16 Jul-16 Sep-16 Nov-16 Jan-17 Mar-17 May-17 Jul-17 Sep-17 Nov-17 Jan-18 Mar-18 May-18 Jul-18 Sep-18 Nov-18 Number of customers Customer inflow of 126,500 in 2018 (-10% Y/Y) Customer inflow

23 Jan-14 Mar-14 May-14 Jul-14 Sep-14 Nov-14 Jan-15 Mar-15 May-15 Jul-15 Sep-15 Nov-15 Jan-16 Mar-16 May-16 Jul-16 Sep-16 Nov-16 Jan-17 Mar-17 May-17 Jul-17 Sep-17 Nov-17* Jan-18 Mar-18 May-18 Jul-18 Sep-18 Nov-18 Net inflow, SEK m Net inflow of SEK 27,600m in 2018 (+3% Y/Y) Net inflow 23 * Net outflow in November 2017 is explained by a few withdrawals amounting to SEK 2,200m, connected to customers M&A activities.

24 Financial overview Q4 18 Q3 18 % Q4 17 % Operating income, SEK m Operating expenses, SEK m Operating profit, SEK m Operating margin, % EPS, SEK

25 Revenue, SEK m Relationship between long-term savings capital growth and revenue growth 300 Savings capital Q4 2018: SEK 300 bn (+6 % Y/Y) 250 Q Corel= Corel= Savings capital, SEK m

26 Revenue, SEK m Average repo rate, % Long-term revenue development , , , , , , ,0 26 Total income Net brokerage income Income from mutal funds Net interest income Other income Average repo rate

27 Q1-03 Q3-03 Q1-04 Q3-04 Q1-05 Q3-05 Q1-06 Q3-06 Q1-07 Q3-07 Q1-08 Q3-08 Q1-09 Q3-09 Q1-10 Q3-10 Q1-11 Q3-11 Q1-12 Q3-12 Q1-13 Q3-13 Q1-14 Q3-14 Q1-15 Q3-15 Q1-16 Q3-16 Q1-17 Q3-17 Q1-18 Q3-18 Net inflow, SEK m Repo rate, % Historical correlation between low market rates and growth ,0 4,0 3,0 2,0 Falling repo rate since Q historical negative rate since Q Low repo rate creates a good growth environment but puts pressure on NII (1% repo rate increase affects NII with over SEK 250 m) , ,0 0-1,0 Net inflow Repo rate 27

28 Revenue, SEK m Revenue development Total income Net brokerage income Income from mutual funds 28 Net interest income Other commission income

29 Income split 2018 Shares, bonds, options (transactions) SEK m % of income % of specific savings capital % of total savings capital Mutual funds Net interest income * 0.04 Other** Total * Based on lending ** Corporate finance fees, foreign exchange, AZA Markets, subscription and advertising income, additional services 29

30 Operating expenses, SEK m Cost development Q1-15 Q2-15 Q3-15 Q4-15 Q1-16 Q2-16 Q3-16 Q4-16 Q1-17 Q2-17 Q3-17 Q4-17 Q1-18 Q2-18 Q3-18 Q Total expenses Personnel Marketing Depreciation Other expenses

31 Costs 2018 SEK m % of total costs % of total income Personnel IT External services Marketing & Sales Depreciation Other Total costs before credit losses Credit losses, net

32 Operating profit, SEK m Operating margin, % Operating margin of 43% in Operating profit Operating margin

33 EPS after dilution, SEK Earnings per share rolling 12M CAGR 25% per year 16,00 14,00 12,00 10,00 8,00 6,00 4,00 2,00 0,00 33

34 Balance sheet, 31 December 2018 Assets SEK m Liabilities & equity SEK m Lending to credit institutions* Lending to the public 3,821 Deposits 33,317 10,339 Liabilities in insurance operations 86,458 Bonds 16,958 Other liabilities 614 Assets in insurance operations 86,457 Subordinated liabilities 100 Other assets 4,563 Equity 1,649 Comments Mainly self-financed through shareholders equity and customer deposits Surplus-liquidity of SEK 22,354 m invested in covered bonds and O/N (including SEK 1,575 m deposits in client fund accounts) Total assets 122,138 Total liabilities and equity 122,138 * Incl. balances at central banks 34

35 Capital surplus for the Group SEK m 31 December 2018 Shareholders equity 1,649 Solvency capital 909 Less non-distributable solvency capital -138 Subordinated bond 72 Intangible fixed assets and deferred tax receivables -85 Capital base before dividend adjustment 2,407 Capital requirement Pillar 1-1,254 Buffer requirement -293 Capital requirement Pillar 2-83 Capital requirement -1,629 Capital surplus before dividend Capital surplus per share, SEK Total capital ratio (consolidated situation), % 19.8

36 Historical financial key data is available in Excel at: avanza.se/keydata