Multitude SE

Good morning from Helsinki, Finland, and welcome to Multitude Group's earnings call for the first six months ended 2026. My name is Adam Tunning, head of Iron Treasury, and I'll be your host today. Today's agenda, Multitude CEO Antti Kumpulainen will walk you through the appearance results, which will be followed by a financial review by our CFO, Bernd Egger. Following the presentations, we will open up for questions over voice and chat. Antti, please go ahead.

Thank you, Adam. Good morning and thank you for joining us. My name is Antti Kumpulainen, CEO of Multitude Group. During today's call, our CFO, Berne Egger, and I will walk you through Multitude's H1 2026 results. The first half reflects continued disciplined execution of our strategy. We are seeing stronger diversification of our revenue streams, further improvement in asset quality, and a clear acceleration in profitability from the first to the second quarter. Let me first briefly recap who we are and where we are heading. Multitude is a pan-European fintech operating with one single EU-wide banking license and serving customers across Europe. We operate three business units on one shared growth platform serving consumers, SMEs and institutional customers. The company was founded in Finland in 2005 and has been listed on the Frankfurt Stock Exchange. stock exchange in the prime standard since 2015. In 2025, we generated 257 million euros in revenue and 26.6 million euros in net profit. We also continue to maintain our dividend ambition of distributing between 25 and 50% of annual net profit. So this is a business with more than two decades of operating history as established regulated platform and significant opportunities for profitable growth ahead. Today, there are six key takeaways we would like to highlight. First, H1 net profit amounted to 13.1 million euros. Importantly, profitability accelerated clearly during the second quarter in line with the expected facing of profitability through 2026. Second, asset quality continued to improve. Impairment losses decreased by 17.7% year-on-year to 34.9 million euros, while our loan and investment portfolio continued to grow. Third, fee and commission income more than doubled to 12.6 million euros compared with 5.3 million euros in H1 last year. This demonstrates continued progress in diversifying our revenue base and building recurring fee income streams. Fourthly, we completed the acquisition of Sorter. The transaction supports our revenue diversification strategy and adds complementary capital light fee income business to the group. Fifth, our strategic investments continue to perform strongly, with our share of results from associates doubling to 2 million euros from 1 million euros last year. And sixth, we confirm our 30 million net profit guidance for 2026, together with the outlook of 20% annual net profit growth in years 2027 and 2028. Turning to the group highlights for the first half of the year Revenue was almost 127 million euros The development reflects deliberate changes in product offering and portfolio composition and the corresponding lower interest income partly offset by very strong growth in fee income fee and commission income increased by over 7 million euros year on year to 12.6 million euros driven mainly by consumer banking and now also including the contribution from Sorter since the consolidation date. Sorter will continue operating as an independent company under the current management who have demonstrated their ability to build, run and scale the business extremely well. Sorte is a pure digital financial platform and a market leader in Finland with more than 30 banking and financing partners on one side of the platform offering consumers and SMEs financial solutions and on the other side of the platform over 120 000 credit applications made last quarter only. Now it's your time to make your own evaluation about Sorter business and its impact for multitude strategic value as the Sorter full year run rate for revenue is 25 million and profit of 5 million euros with a 50% growth. During the first half, our asset quality also continued to strengthen. Impairment losses decreased by 17.7% to 34.9 million euros. Net loans and investments increased by 15% year-on-year to 980 million euros, demonstrating continued strong demand across our businesses. Net profit for the first half was 13.1 million euros. This is in line with our expectations and reflects the profitability facing we have communicated with a clear step up in the second quarter. Going forward, our focus remains unchanged. Accelerate profitable and scalable growth through organic execution, partnerships and selective M&A. Continue to diversify revenues through recurring fee income and maintain high asset quality as we go forward. consumer banking. This is our largest and closest business unit. The first half reflects continued portfolio optimization, improving asset quality, and very strong progress in fee income expansion. Interest income and profitability were impacted by deliberate changes in portfolio composition and product offering, in line with the asset quality initiatives we have been implementing. At the same time, fee income increased significantly to 11.3 million euros compared with 4.3 million euros in H1 last year, now also including the shorter contribution from the consolidation date in late May this year. The portfolio continued to grow by 6.2% year on year and is now at 537 million euros, while impairment decreased by more than 20%. That's a great result. This is exactly the direction we want to see. continued growth together with a stronger risk profile. Going forward, our focus remains on diversifying revenues, increasing recurring income streams, disciplined growth through organic execution, partnerships, and again, selective M&As, and further improvements in profitability, scalability through cost discipline, asset quality, and automation. In SME banking, the key focus remains execution, efficiency, and automation on our path toward profitable growth. We do recognize that the turnaround in SME banking has taken longer than we originally expected, and we have made changes to get there faster. We can already see the growth momentum in the portfolio. Net loans and investment increased by 15.5% year-on-year to 171 million euros. And the secure lending now represents 32% of total portfolio. Revenue increased slightly year-on-year, while the contribution from recently originated loans is expected to materialize progressively over time as the portfolio matures. Profitability in the first half reflects a temporary investment phase supporting future growth, including organizational transformation, product development and technology investments. Importantly, while the absolute level of impairments increased driven by portfolio growth, the impairment ratio remained broadly stable. We can already see that these actions and results will push us to sustainable profitability and growth. We are currently close to a point of a breakeven and we trust to deliver for a full year of 2027 a solid positive EBT. The transformation is happening already and we can already see it. Wholesale banking continued its very strong growth trajectory during the first half. Net loans and investment increased by 37% year-on-year to 271 million euros, supported by strong execution across the secure debt deal pipeline. Revenue increased by almost 65% to 15.7 million euros, while profit before tax increased to 3.5 million euros from 400,000 euros in H1 last year. That's a big jump. So profitability growth continued to significantly outperform revenue growth. We are also building more scalable origination capabilities through automation and faster credit decisioning in Secure Depth, while Payment Solutions continues to onboard new customers. Going forward, the focus remains on growing the Secure Depth portfolio, expanding the Payment Solutions customer base, and increasing cross-selling opportunities. Our ambition for wholesale banking remains very clear, and we continue to see substantial long-term growth and profit potential in this business unit. With that, I will now hand over to a CFO, Bern Egger, who will guide you through the H1 financials and, of course, the underlying dynamics in more detail.

Thank you. Thank you very much. Antti, welcome everybody. Good morning from pretty cool Helsinki, Finland. Let me walk you through the H1 results. The key messages on H1 are essentially threefold. First, and this is my personal favorite, I repeat that all the time, but I think it's really from a strategic perspective, really important. We are succeeding in diversifying our revenue composition. The income has meanwhile become a real meaningful contributor. Second, credit losses improved materially again compared with last year. And third, we see a clear net profit step up in Q2, especially from Q1 to Q2, almost doubling net profit, well on track for the guidance. Let us go to the details and start with revenue. Interest income 114.3 million in H126 compared to 128 last year, a decrease of around about 10%. But as pointed out, this reflects the actively driven change in portfolio composition and product offering in consumer banking. So exiting short-term non-recurring business, focusing on recurring sustainable business. That is what the game is about. This is consistent with our group-wide focus on higher quality and sustainable risk-adjusted returns. By the way, adjusting for the impact of exiting non-core businesses and for the impact of strategic product adjustments in those markets, like-for-like revenue would actually be above 25 levels. Fee and commission income. Extremely strong development in H1 increased to 12.6 million compared to 5.3 million, to a plus of 136%. Key drivers are partnership-driven fee income. Secondly, services to external fintech partners. Number three, payment business. And finally, the acquisition of Sorter, reflected from the acquisition date and consolidation date, 20th of May, 2026. So four independent strong drivers for our fee income business. In addition to strong fee income development, net operating income was also supported by positive fair value effects of 2.2 million. This is related to positive earn-out revaluation effects from sold non-core businesses. So we're creating a lighter organization, but still benefiting via earn-out from sold businesses. Also, other income increased significantly to 2.6 million, which is a positive effect related to the sort of acquisition. And finally, on another positive note, results from Associate doubled to €2 million in the first half of this year compared to €1 million last year. As a result, net operating income was €108 million, already very close to H1-25 level, despite the deliberate portfolio optimization. Again, comparing like for like, net operating income would be significantly above 25 level. Let's take a short look. We will go into more detail on credit loss performance. This remains to be a key positive driver when it comes to net profit development. Impairment losses decreased to 35 million, an improvement of 7.5 million, almost 18%. We've touched upon this in the last couple of earnings calls. We can stay on the message of further improvements in the first half of 26, especially in the second quarter. This is extremely important for us because it was not only achieved on the basis of a stable portfolio, but achieved while net loans and investments continue to grow. On cost, personal expenses and general and admin expenses increased moderately, reflecting continued investment in our growth strategy. Selling and marketing expenses increased most visibly, some 2.5 million. 1.4 million out of that reflects the impact of the Sorter acquisition, which is money wisely spent, given Sorter's excellent net profit contribution. This all adds up to profit before tax of 15.1 million compared to 16.3 in H1 2025, net profit 13.1 compared to 14.2 million last year. Important to us is the dynamics. Q2 showed a clear acceleration. Net operating income increased from 51 million to 56 million. Profit before tax from 5.1 million to 10 million. Net profit increased from 4.4 million to 8.7 million in the second quarter. So the factor doubling and this dynamic is in the end what gives us a lot of confidence for our full year net profit guidance. Let me very briefly talk about assets. There are two main messages I want to bring across. Number one, net loans and investments. This is super important to understand as it is also going to be one of the profit drivers for the remainder of the year. All businesses are growing compared with end 2025. Net loans and investments increased by 40 million from 940 to 980 million compared to last year, plus 70 million. Also important, diversification. It's not a business or growth that is driven by one business unit. All business units' portfolios are on a clear growth path. Cash and cash equivalent, that's in the end the engine. We hold a little bit more than 420 million cash on the books. This represents sufficient resources to continue growing our business portfolios for the second half of this year and beyond. The increase, for those who are more interested in details, intangible assets and goodwill is related to the investment in SORTA. Again, a fast-growing, capitalized, fee-income-oriented fintech platform, so exactly what we have been wanting to add to our portfolio for quite some time. Very strong financial investment. In summary, the asset side shows continued customer portfolio growth, a strong liquidity position, and the positive impact of the most recent acquisition. Liability and equity. On liability and equity side, the key message remains unchanged. You're familiar with that. Customer deposits are the cornerstone of our funding model, complemented by capital market instruments and regulatory capital, apparently on the level of the bank. Deposits up to 1.2 billion. Equity increased to 243 million compared to 208 end of year. This increase was mainly driven by the successful placement of a 70 million perpetual bond instrument in the first half of 26. That in turn results in a very strong net equity ratio, including regulatory capital of 24% each one. Let's take a little bit of a closer look to the respective businesses, to the segments and talk about their performance. Consumer banking remains highly profitable while moving to a better revenue and risk profile and super important for us, it's back on growth track. SME banking continues to invest into portfolio growth and scalability and wholesale banking continues to deliver strong growth and very convincing profitability dynamics. Talking about consumer banking in more detail, interest income decreased by some 19% to 82 million compared to last year. But as pointed out, this is a temporary reduction and it's intentional. It's driven by us exiting from non-core businesses, short-term businesses that we sold, and by temporary effect related to product adjustments in a number of markets where we already see a positive turnaround trend. Like for like, business is on a growth path. Q2 revenue in consumer exceeds Q1 revenue by close to €3 million. Fee and commission income in the consumer business increased by almost 166% to €11.3 million, supported by both organic contribution, organic fee income stream and the consolidation of SORTA. But it's important to understand whilst the SORTA contribution is meaningful with some 2.9 million, also excluding SORTA, the organic growth of fee income would be equivalent to almost doubling the fee income in the consumer business. So really top performance. Extremely positive impairment loss development decreased by more than 20%, 36 million to less than 29 million, so top performance. And all that results in profit before tax, 15.1 million compared with 17.4 million last year. And again, while H1 ABT is technically in a way lower year on year, Q2 was meaningfully stronger than Q1, with consumer banking profit before tax increasing from 5.2 million to 9.8 million in Q2. So really extraordinary performance of the team. In SME banking, net loans sent to customers increased by 15.5% compared to last year, 171 million. Interest income picking up a bit, 2.5% growth, and net operating income also increasing by close to 2%. The revenue contribution from new volumes is expected to materialize progressively over time. Credit losses remained pretty much stable in its totality, profit before tax, still negative 3.5 million, but as Antti pointed out, This reflects investment in growth, in automation, in data and risk innovation. And our focus, and especially the SME team's management focus, is to turn this business into profitability. And we are very well on track, pretty close to a break-even, and super confident that for the full year 27, we will deliver positive results. Wholesale banking, very strong. H1, a little bit repetitive, but I need to stay on the message. Interest income increased by 70% to 14.5 million. Net operating income increased by 87% to almost 10 million. And profit before tax, still it's an early stage business, but already three and a half million positive in the first half of 26 compared to 0.4 growth factor in terms of profitability, more than seven, actually more than eight. Also compared with Q1, wholesale banking improved massively with profit before tax increasing by one third from one and a half million to two million in the second quarter only. Asset quality, long-term trend continues. You see on this slide impairment losses relative to our total portfolio, so net loans and investments. And we see a significant decrease, which is equivalent to an increase in asset quality. Group level credit losses down 7.7% year-on-year. to 35 million. This is a strong result, again, particularly because net loans and investments are increasing. So credit loss is down 18%, portfolios increasing 15%. What that means is we're not only growing the portfolio, we're doing so with a much, much better risk profile. Quarterly impairment loss is also improving from Q1 26, 1.8% ratio down to 1.6. So really top trend. And the key drivers, you are familiar with that in case you joined recent earnings calls. They remain the same, enhancing scoring and underwriting, continuous model upgrades, stronger operational processes, and of course, the focus on better asset classes. We can go a little bit more into detail, but I will speed up a bit on the credit loss development on a segment level. Key message is basically simple. This improvement in asset quality is visible in all businesses. In consumer banking, massive improvement, 28.7 million compared to 36 million, so 20.5 million reduction. This is really massive improvement. And this improvement continued during the second quarter. 15 million credit losses in Q1, 13.8 million in Q2. So again, really strong performance in the second quarter. SME banking, 5.5 million compared to 4.9. So technically in absolute numbers, a slight increase, but that is in the end, the investment in the portfolio growth, quite significant portfolio growth. growth already and with a time lag we now expect also revenues to come and in the end help us turn around the business to profitability so absolutely well on track and performance metrics in SME are absolutely stable and in wholesale banking very low impairment losses 0.7 million 50% less Then last year, in this business, apparently, it's a less granular business. Movements are more driven by IFRS requirements and reserves. But the full, and that's the key message here, the full portfolio remains collateralized. There are no unsecured exposures at all in the wholesale banking loan and investment book. Funding and capital structure, as pointed out, our funding base remains diversified and scalable with customer deposits as the cornerstone. H1, we successfully issued this bond I made reference to. This is important as it strengthens equity. This is an IFRS equity instrument and is an excellent addition to deposits and the tier two instrument that we issued on the level of the banks. A very solid funding and capitalization mix. An important aspect of the last couple of quotas is also that we managed to reduce funding cost, weighted cost of debt funding decreased to 3.34 in Q2 from 3.4 and around 4% last year, so quite a significant decrease. And that apparently is also quite important when it comes to net profit performance. In short, funding stable, diversified and cost effective. There's one final statement I would like to make as regards funding. We are evaluating the issuance of an additional tier one instrument at the level of the bank in order to further strengthen the capital base and hence the growth potential on the level of our regulated entities. Finally, capital market guidance and indicative targets. For 26, we confirm our net profit guidance, 30 million. H1 profit amounted to 13.1. And the sequential development from Q1 to Q2 supports our confidence. Q2 net profit, 8.7 million. So again, almost doubling from 4.4 million in Q1. So the direction is clearly positive. Expected drivers to get us to 30 million net profit are number one, growth dynamics in all businesses, including consumer banking. So we are in a positive growth trajectory mode already and expect that to continue for all businesses. Secondly, significant improvement in Capitalbox financial result. So if we manage to reduce negative contribution and we will manage, completely in the second half of the year, then this would have a seven-digit impact on net profit, apparently, and we're super confident to achieve that. Sort of the net profit contribution is one of the drivers. And finally, our excellent, I really have to use this term as it actually is even better than we had budgeted, our excellent credit risk performance development. That means for 27 and 28, we, of course, stick to the guidance to improve, increase our net profit levels by 20% respectively. I would like to go back to the key takeaways and conclude our presentation with these key takeaways that Antti used and referred to as an opener. Net profit 13.1 million, absolutely in line with the expected phasing throughout 2020. SE, so we're very optimistic to get the $30 million. Asset quality better than ever. Impairment loss is down 17.7%. Fee and commission income on all-time high, more than doubled to $12.6 million. Sorter acquisition supports revenue, but also profitability nicely. Strong strategic investment performance, doubling associate contribution to 2 million. And finally, as just pointed out, I would like to reiterate 30 million guidance remains valid for this year. With this, I hand back to you, Adam, and happy to move on.