company presentation · 0. 50 000. 100 000. 150 000. 200 000. 250 000. 300 000. 350 000. 400 000....
TRANSCRIPT
Sweden’s leading platform for savings and investments
• Founded in 1999• No 1 in stock market transactions in Sweden• Most satisfied savings customers in Sweden for 10 consecutive years• 1,115,500 customers • SEK 445 bn in savings capital• 460 employees• 4.4% market share of the Swedish savings market
2
Customer satisfaction and employee engagement create shareholder value over time
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Long-term targets● Customer satisfaction & Employee engagement
● Growth in customers and savings capital● Scalability and cost efficiencies (top modern
IT platform)
Customer proposition● Cheaper, better and simpler offering
● High user experience ● Broad range of product
● 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
High customer satisfactionCreating a better future for millions of people
Customer promise – more to you, less to the bankTo give our customers a better return on their savings than any other bank or pension company, due to low fees, better tools and education
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• Price leadership• Wide range of products• Decision-making tools• Best customer service
and user experience
Growth strategy built on scale
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Growth in savings capital• Customer satisfaction
• Innovation and user experience
• Customer growth
• Net inflow
1. 2.
3.1. Savings capital
2. Revenues/savings capital
3. Costs/savings capital
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 aim to reach a cost/savings capital of 16 bps
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2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019
Savi
ngs
capi
tal,
SEK
m
Basi
s po
ints
Savings capital Income/savings capital Cost/savings capital
73
Leading cost position
6
34
19
142
In 2018, cost/savings capital exclude the Swedish Financial Supervisory Authority’s administrative fee of SEK 35 million on Försäkringsaktiebolaget Avanza Pension.
Activate Follow &
Improve
Find & get help
Trading Trading data &
Decision-support
tools
PensionFundsInterest rate
Data plattform
Service plattform
Deliveryplatform
Userinterface plattform
Technical plattform
Open banking
Designsystem
Trading Plattform
Mort-gages
Endow-ment
insurance
Pension plattform
BOtrans-
formation
Become a customer
Cash
Perfor-mancetesting
Being a customer
In-house development by 23 teamsCustomer journey
Products
Business plattform
Largest Swedish player in stock market transactions on Nasdaq OMX and First North
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0,02,04,06,08,0
10,012,014,016,018,020,0
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Transactions
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Turnover
• Market share of 17.5% in terms of transactions and 8.4% in turnover in Q2 2020
Customer growth drives net inflow
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Net
inflo
w, S
EK m
New
cus
tom
ers
Customer inflow Net inflow
2013:Customers: +33,000Net inflow: 10,900
2014:Customers: +54,700Net inflow: 20,100
2015:Customers: +96,400Net inflow: 25,200
2016:Customers: +103,000Net inflow: 26,500
2017:Customers: +140,000Net inflow: 26,800
2018:Customers: +126,500Net inflow: 27,600
2019:Customers: +139,300Net inflow: 32,600
H1 2020:Customers: +139,100Net inflow: 41,300
Age distribution among new customers
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0 3 6 9 12 15 18 21 24 27 30 33 36 39 42 45 48 51 54 57 60 63 66 69 72 75 78 81 84 87 90 93 96 99
Shar
e, %
Age
2019
2012
2007
Strong long-term potential in existing customer base
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Market penetration
• Total share of Swedish savings market: 4.4% as of Q1 2020
• Total share of Swedish population:9.1% as of 1 November 2019
• ages 20-29: 15.3% • ages 30-39: 17.8% • ages 40-49: 13.3%
• Highest penetration in urban areas. Stockholm region, snapshot (Women/Men) as of 1 November 2019:
• ages 20-29: 15%/25% • ages 30-39: 19%/29%• ages 40-49: 14%/23%• ages 50-59: 12%/17%• ages 60-69: 9%/13%
0,00
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1,20
1,40
0,0%
0,5%
1,0%
1,5%
2,0%
2,5%
3,0%
3,5%
4,0%
4,5%
0 3 6 9 12 15 18 21 24 27 30 33 36 39 42 45 48 51 54 57 60 63 66 69 72 75 78
Savi
ngs
capi
tal,
SEK
m
Cust
omer
s, %
Age
Savings capital by age Total customer base Age distribution among new customers
Savings capital grow by number of years at Avanza
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Savi
ngs
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Average savings capital per customer (excluding customers with > SEK 10m in savings capital)
Significant growth potential with a 4.4% market share of the Swedish savings market
• The Swedish savings market SEK 8,400 bn
• Annual market growth of on average 9% last ten years
• An estimated 80% of the Swedish population saves in funds and 11% own shares
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The white circles refer to Avanza’s share of each savings area.* An estimated 50% of the market is addressable for Avanza
Market share of 17.8% rolling 12M of net savings on the Swedish savings market
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Long-term target by 2025 of at least 15%
Growth potential in broader customer groups
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Do it for me Do it myselfHelp me do it
Knowledge & time
InterestBegin
Save
Invest Trade
Gamble
Strategy for more recurring income
0%
10%
20%
30%
40%
50%
60%
2012 2013 2014 2015 2016 2017 2018 2019
Shar
e of
tota
l inc
ome
Net brokerage income Fund commissionsNet interest income Other commission income
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Strong growth in occupational pension
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2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019
Savi
ngs
capi
tal,
SEK
Growth drivers in the Swedish savings market
• Digitisation and open banking create new needs and customer behaviours
• More reasons for customers to take responsibility for their own savings
• Increased focus on sustainable investments
• Our focus is on attracting new and broader customer groups as well as keeping current customers happy
• Product innovation and evolution
• User experience increasingly important
• Price remains important
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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
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Employee engagement key
Performance on targets 2019
Long-term targets Outcome 2019 Comments
Sweden’s most satisfied savers according to Swedish Quality Index
√ Achieved in 2019 for the tenth consecutive year
Engaged employees, eNPS of at least 45
54 Very strong ambassadorship
Market share of at least 10% R 12Mof the total net inflow to the Swedish savings market
15.6%
1 million customers 2020 976,400 Target achieved in January 2020
Cost growth should not outpace income growth √
Income growth 13,8%Cost growth 10,6%, excluding fee and one-off write down
Dividend of at least 70% of net profit for the year
79% Dividend SEK 2.30 per share
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New long-term targets by 2025The new targets are still focused on customer satisfaction and employee engagement, but also on growth in savings capital. Targets connected to sustainability are added
Satisfied customers: • Sweden's most satisfied savers according to SQI’s (Swedish Quality Index) annual award
Engaged employees: • eNPS (Employee Net Promoter Score) of at least 45
Long-term value growth: • Market share of at least 15 per cent of the total net inflow to the Swedish savings market 2025 • Market share of nearly 7 per cent of the Swedish savings market by the end of 2025 • Return on equity of 25-30 per cent • Dividend of at least 70 per cent of the profit of the year
Sustainability:• Increased share of capital in sustainable investments • Increased share of customers who save in sustainable alternatives • Be seen as the leading sustainable brand and the natural choice for sustainable savings • Increase the share of female to 50 per cent of new customers • Organisation with parity between women and men • Become climate positive
Customer inflow of 139,100 in 2020 (+113% Y/Y)
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n-14
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Apr-1
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Jul-1
6
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Apr-1
7
Jul-1
7
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Jan-
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Apr-1
8
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8
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Jan-
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Apr-1
9
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9
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-19
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Num
ber o
f cus
tom
ers
Customer inflow
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Net inflow of SEK 41,300m in 2020 (+161% Y/Y)
-2 000
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Jan-
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Apr-1
4
Jul-1
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Oct
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5
Oct
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Jan-
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Apr-1
6
Jul-1
6
Oct
-16
Jan-
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Apr-1
7
Jul-1
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Oct
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Jan-
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Apr-1
8
Jul-1
8
Oct
-18
Jan-
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Apr-1
9
Jul-1
9
Oct
-19
Jan-
20
Apr-2
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Net
inflo
w, S
EK m
Net inflow
27
* Net outflow in November 2017 is explained by a few withdrawals amounting to SEK 2,200m, connected to customers’ M&A activities.
Financial overview
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* Including one-off write-down of SEK 8.3 million
Q1 20 Q4 19 ∆ % Q1 19 ∆ %
Operating income, SEK m 542 329 65 268 102
Operating expenses, SEK m -179 -187* -4 -164 9
Operating profit, SEK m 361 140 158 100 261
Operating margin, % 67 43 24 37 29
Income to savings capital ratio, % 0.56 0.34 0.22 0.34 0.22
Costs to savings capital ratio, % 0.18 0.19 -0.01 0.21 -0.02
ROE, % 64 26 39 23 41
EPS, SEK 1.98 0.79 152 0.57 245
Relationship between long-term savings capital growth and revenue growth
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Reve
nue,
SEK
m
Savings capital, SEK m
29
2001–2011Corel=0.95
2012–Q1 2020Corel=0.84
Q1 2020
Savings capital Q1 2020: SEK 368 bn (+10 % Y/Y)
Long-term revenue development
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-1,0
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Aver
age
repo
rate
, %
Reve
nue,
SEK
m
Total income Net brokerage income Income from mutual fundsNet interest income Other income Average repo rate
Historical correlation between low market rates and growth
31
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Repo
rate
, %
Net
inflo
w, S
EK m
Net inflow Repo rate
• Historical negative repo rate between 2015 and 2019 . Repo rate raised to 0.00% on 8 January 2020
• Low repo rate creates a good growth environment but puts pressure on NII (100 bps repo rate change affects NII by around SEK 500 m at Q1-20 volumes)
Revenue development
32
244 234 227
271 271244
267 267 268 284313 329
542
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600
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Reve
nue,
SEK
m
Total income Net brokerage income Income from mutual funds
Net interest income Other commission income
Income split Q1 2020
33
SEK m % ofincome
% of specificsavings capital
% of total savings capital
Shares, bonds, options (transactions)
268 49 0.52 0.28
Mutual funds 96 18 0.36 0.10
Net interest income 74 14 0.40 0.08
Other** 104 18 0.11
Total 542 100 0.56 0.56
* Based on deposits** Corporate finance fees, foreign exchange, AZA Markets, subscription and advertising income, additional services
Cost development
34
124131
123
157 152 153
135
155164 166
148
179 179358
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200
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Ope
ratin
g ex
pens
es, S
EK m
Total expenses Non-reccuring items Personnel Marketing Depreciation Other expenses
Q4 2018 including the Swedish Financial Supervisory Authority’s administrative fee of SEK 35 million on the subsidiary Försäkringsaktiebolaget Avanza Pension Q4 2019 including one-off write-down of SEK 8.3 million
Costs Q1 2020
35
SEK m % of total costs
% of total income
Personnel -110 62 20
IT -19 11 3
External services -7 4 1
Marketing & Sales -8 4 1
Depreciation -14 8 3
Other -20 11 4
Total costs before credit losses -179 100 33
Credit losses, net 1
Profit/loss from participations in associated companies
-2
Operating margin of 67% in Q1 2020
36
121103 104 114 120
90
132
76100
117
163140
361
0
10
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30
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70
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90
100
0
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100
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400
Q1-17 Q2-17 Q3-17 Q4-17 Q1-18 Q2-18 Q3-18 Q4-18 Q1-19 Q2-19 Q3-19 Q4-19 Q1-20
Ope
ratin
g m
argi
n, %
Ope
ratin
g pr
ofit,
SEK
m
Operating profit Operating margin
Operating profit in Q4 2018 is affected negatively by the Swedish Financial Supervisory Authority’s administrative fee of SEK 35 million on the subsidiary Försäkringsaktiebolaget Avanza Pension.
Balance sheet, 31 March 2020
37
Assets SEK m Liabilities & equity SEK mLending to credit institutions*
2,356 Deposits 51,593
Lending to the public
13,809 Liabilities in insurance operations
104,184
Bonds and other interest bearing securities
32,725 Other liabilities 1,297
Assets in insurance operations
104,183 Subordinated liabilities 100
Other assets 5,939 Equity 1,838
Total assets 159,011 Total liabilities and equity 159,011
Comments
• Mainly self-financed through shareholders’ equity and customer deposits
• Surplus-liquidity of SEK 36,961m invested in covered bonds, at the Riksbank and O/N (including SEK 1,880 m deposits in client fund accounts)
* Incl. balances at central banks
Capital surplus for the Group
38
SEK m 31 March 2020Shareholders’ equity 1,838
Solvency capital 1,114
Less non-distributable solvency capital -161
Subordinated loan 67
Additional value adjustments -33
Intangible assets and deferred tax receivables -74
Own funds before dividend adjustment 2,750
Capital requirement Pillar 1 -1,562
Buffer requirement -189
Capital requirement Pillar 2 -119
Capital requirement 1,869
Capital surplus before dividend 881
Capital surplus per share, SEK 5.73
Total capital ratio (consolidated situation), % 18.1
Historical financial key data2001 – Q1 2020
is available in Excel at:
avanza.se/keydata
[email protected]+46 8-409 420 17
2020-07-02