Fortnox AB (publ)

Good morning and welcome to the Fort Knox Investor Forum. My name is Josefin Seder and I will be your host and today I will also act as your moderator once again. Our guest in the studio is of course our very own CEO Tommy Eklund. This stream will be about an hour long. The first part is dedicated to the presentation of the quarterly reports which will be presented by our very own Tommy and then this will be followed by a question and answer session. Today, we're also introducing something new. We're introducing phone calls to the stream. Anyone that's interested can call in starting now to our phone number, 0046-8559-31337, and ask your question live after our question and answer session or after our presentation. That's phone number 0046-8559-31337. We will also display this during the stream in case you missed it. Be aware that we have only one person manning the phone line, so there may be a waiting period, and we really appreciate your patience while waiting. We will, of course, also read questions from our chat. Our chat is also open now, and you can ask your questions there at any point during the stream. Here is Tommy Eklund with the presentation of quarter two.

Hi, everyone, and thank you, Josefin. Yes, so as we normally do, we keep my presentation kind of short and then we're focusing on Q&A. But anyway, just to give you some intro regarding the numbers, let's dig into the results. Yes, our head KPIs is number of customers and ARPC, as you may know. So we increased the number of customers with 16,000 compared to 15,000 last year. So solid growth in the net ads of customers. The ARPC grew with nine Swedish kronor, also a very solid number, 11 Swedish kronor last year. And that has, of course, the connection to the 27% growth. Out of 26 was organic growth. So even though there are some headwinds in the macro environment, we're still being able to deliver solid growth, and especially on the organic side. And although we hired more than usual in quarter one and also did an acquisition, we managed to keep up the EBIT level in line with last year. So almost 40% EBIT margin. And also like a fun fact, we were able to deliver more than 200 million in EBIT for a single quarter for the first time in the Fort Knox history. So that's worth celebrating. And if you combine these growth and EBIT, that takes us to the rule of Fort Knox, which is this definition of the international definition of rule of 40, which when you add growth and profit, it should exceed 40. Now we're delivering 67 on that. So all in all, stable and good quarter. So if you just look at the numbers out of a historical context and looking at our goals for 2025, so now we have reached 572,000 customers in the quarter. So really good quarter because it's better than quarter two last year, although there are definitely continuing headwinds in the macro environments. So I think that we're showing that the underlying business It's delivering better than we have done before. So yes, it will be challenging to reach the 700,000, but we have a plan to get there. And I think that the business is delivering in that direction right now. Of course, we probably need some kind of tailwind at the end to be able to reach the goal, but we have a plan to get there. So all in all, a good quarter regarding Netas. ARPC is delivering a bit better than what we have in our goals. So now we have reached 285 Swedish kronor. So it's only 15 Swedish kronor left for our five-year target, which is 300 Swedish kronor by the end of 2025. So this is, of course, driven by the growth that we have, but especially the growth in financial services are now contributing more and more. So I think this is also showing our cross-selling abilities is improving all the time right now. So now financial services, which is lending and invoicing service, is now contributing with 39 Swedish kronor to the 285 Swedish kronor. So this is really showing us how powerful the Fortnox platform is when we're taking something, you know, which was, you know, a bit out of the scope before. Now we have made that as a core product. and we're showing that we're really good at helping our customers to use what they need, and in this case, lending services and invoicing services. So, yes, it has been kind of small historically, but now it's also contributing to the ARPC. Financial performance, organically, 26%. Quite a solid quarter, I would say, so I think that we're trending quite good now. And just like a fun anecdote, the product invoice factoring actually grew with 79% product that I have spoken about many times before. It's one of those products that we're going for. We think it's a really good offer for our customers. Often, especially in the small, mid-sized sector, when you run a company, your cash flow is always a challenge. And with this product, we can really, in an easy way, help our customers to improve their cash flow. And all of that is done inside the product, so it doesn't take any marketing spend or anything like that. It's just a button. When you're distributing invoices, do you want the money now or do you want to wait 30 days? So we're taking something that, you know, is something that we are really good at because it takes technical capabilities to develop something like this. So we're taking something from a traditional business like factoring, but we're taking it in our context. And now it scales really good and it's a lot of customer value. So, you know, you're never satisfied. But when a product is growing almost 80% in a quarter, it's quite solid. And with really good margin as well. Yeah. And if you put the rule of Fort Knox, which is this rule of 40 in a historical context, it's kind of a fun anecdote that we have achieved now over 65%. If you measure your business in that way for 13 quarters in a row, which is quite impressive. You may know that we have an internal target that we want to be healthy over 60% on an annual basis. And now we have been over 65%, 13 quarters in a row. So that's quite impressive. And for you guys that have heard me talk about Fort Knox before, we normally pick up a couple of things from the platform. And in this quarter, we want to spread that. We're actually quite active in the school environments as well. So this is high school and higher degrees where we're supporting both teachers and students. So right now it's actually more than 27,000 user accounts. So that's people that are assigned for using Fortnox Skola, which is a really good stepping stone for using Fortnox later. Either you start your own business or you can use that competence when you go into work for a financial department or at an accountant. So it's an investment that we do, which we think it's an investment for the future. And also we reported in quarter one, that was the quarter four reports that was reported in quarter one this year. We reported that we were actually on the number six regarding business apps in Sweden. Now, it's a bit, as you know, it's a bit volatile, but right now we're actually number one. So from quarter one up until now, we have actually been number one now. So quite impressive growth regarding ranking of our app, which is, as you know, very important for many of our products because that's where we're developing more and more features. So more and more of your business is handled now in the app. So of course, this is really good that we are ranked so high in the app store as well. Yes. And a couple of products and business highlights from the quarter. The whole Fort Knox platform has been developed in a way where you don't need physical receipts or physical records of any kind, like invoices and all of that. So we have supported the government and authorities to update also that so that the laws and regulations are supporting that. So right now there has been approved a new law from 1st of July where you don't need to store physical receipts, physical records, physical invoices of any kind. So when you have put that in the Fort Knox platform, that's... that's seen as an original. So you don't need to store anything, which of course is a huge improvement. And, you know, the Fort Knox platform has already been developed for that purpose. But now also the law is on the right level. So now, entrepreneurs can just be in the platform and don't need to worry about any physical things at all. So we think that it's a really good administrative burden that is removed from all the entrepreneurs. But of course, this is also maybe Really good opportunities for us going forward because the Fort Knox platform will be used more and more as an archiving platform for your business. So all in all, good for our customers and good for Fort Knox. Something that we have been waiting for. We have been working on this project. law for many, many years. So it's something that is positive and especially regarding the business card, because now when you're using the Fort Knox business card, you can just take a receipt on, you can just take a picture on the receipt and then toss the receipt away because the digital copy of that receipt is all you need to store. So a few more words about the business card. So we, as you know, we released the business card like in quarter three. So it's been out now for nine months and the response has been really good. But we have just distributed it in our direct channel. As you may know, we have indirect channel, sales channel through accountants and we have direct channel through our website. Up until now, we have mainly focused on the direct channel. So customers that wants to use the card has been able to do that. But there has not been any expense approval processes, which you need to be able to promote that through your accountant, because the whole workflow with accountant is that they are involved in what happens, and then you need expense approval process connected to your expenses. So we have now developed that product. So now it has been released in quarter two. So that's kind of the last piece in the puzzle. so that now we can push the business card also through the accountant. So that's kind of the first stepping stone now to also push that through accountants. So really looking forward for that. And a lot of accountants have been asking for this. So this is a change that includes also a lot of customer value. So I'm looking forward to that going forward. Yeah, we also did a change in how we... Or we did an intent to change how we run marketplaces. So we have signed a letter of intent to merge three marketplaces, our own Oferta, EPIS, and DoRunner. And we think that... that will definitely be a really good place because it will be the leading marketplaces for services. So we think up until now, we think it's a lot of opportunities if you combine the Fortnox core platform with a marketplace, because then you're moving businesses into the Fort Knox platform. So that's still our main, but we think that Oferta can be developed even faster in a new suit, so to say. So together with EPIS and DoRunner and Oferta, we're creating a really interesting marketplace that also have a lot of synergies with Fort Knox going forward. But it's still a letter of intent, and we think it will, according to the intent, we will sign that in quarter four. So we think it's a good change for everyone involved. Yes, and we're growing in all our cities. So besides our headquarters in Växjö, we have opened a new office in Stockholm. We had two offices before. Now we have combined that into one office in Stockholm. We have extended our office in Malmö and we have moved to a new office in Linköping. So we're growing all over and we think it's really good to be situated in several places, also connected to really good universities to be able to attract the best people all over Sweden. So with this, we will be even better at attracting the really good people. Yeah, and we also had a capital market day during the quarter, as many of you probably know. So we had like 80 people here in our headquarters attending this event. It was a really appreciated event. So a big thank you for everyone that participated. And of course, all employees at Fort Knox that were contributing to this day and also evening. So it was a really good day, and I appreciate the event, and I'm looking forward next year where we will have a capital market day and communicate 2030 goals. So sometime during next year, it will be a new capital market day explaining where we're heading in the 2020-30 direction. So, thank you.

Thank you for presenting. Don't forget, we have both the chat and the phone lines are open. We're now going to move on to our question and answer session. If you missed our phone number in the beginning, take a pen, write this down. The phone number is 0046 8559 31337. Or if you're calling from Sweden, just start with 08559 31337. And we actually have our very first call. So I would like to welcome Simon Granat from ABG to the studio. Welcome to the studio. And please ask your question.