Fortnox AB (publ)

Good morning everyone and very welcome to Fort Knox Q4 2024 report presentation. My name is Milena Rodander and I'm head of Investor Relations here at Fort Knox and today in the studio here in Växjö I have our acting CEO Roger Hartelius. Today, we will hear Roger presenting the Q4 in numbers, followed by some business highlights, and then we have time for questions. You can call in directly to us here in the studio using the number plus 468-559-31337 or send them to us in the chat. We will have around 20 minutes for Q&A session, and we will try to answer as many questions as possible. But with that, I hand over to you, Roger.

Hi, and welcome, and thank you, Mia. So let's look at some numbers for Q4. It was a good quarter. We had an organic growth by 25% and a strong margin. We saw a customer growth of 13,000 customers, a little bit below last year, slightly affected by the divestment of Aferta, but also some slow growth among accounting firms' customers. Another important metric for us is the usage, in which we measure the average revenue per customer, which increased by five Swedish kronor in the period. The revenue growth was 20%, but the organic growth was 25%, and that's excluding then the impact of the divestment of oferta. We had an EBIT margin on 47%. And here we had some non-recurring other operating revenue by 25 million. And we had two one-offs. One was the divestment of Oferta, but also revaluating the earn-out connected to the acquisition we made earlier this year of BoardEaser and Visual Buy. And excluding those, the EBIT margin would have been 42%. And when we then combine our growth and margin, we land at 67 in our rule of Fortnox. So in 2020, we put up some kind of aggressive target. We said that we will double the number of customer and also double the average revenue per customer. And so forth, we have had a great development towards these targets, and we see already now we are about to close the average revenue per customer, landing at 298 Swedish kronor per month. But we are a little bit behind on the number of customers. But for us, it's the combination of those two, the number of customers and the usage, that has been crucial for our growth. And also as a result of what we announced in November, the new organization, we will focus even more on usage, which will drive the average revenue per customer. But still, it's the two metrics in combination that we believe drive growth. And so we stick to those according to the business plan that we established in 2020 and taking us the full year of 2025. So with the net sales of 540 and an EBIT of 254, we believe that we've proven a continued growth and scalability, despite challenging marketing conditions. And on the rule of footmarks, well, we balance the growth and the margin. We land at 67 in the quarter, but also for the full year. And I'm really pleased to say that we now, in 15 quarters in a row, have been above 60% in Rule of Fort Knox. On net sales, as I said, we had a growth with 20%, but 25 organic growth. The divestment of Oferta impacted the subscription-based revenue. And excluding those, the organic growth in subscription-based would have been 21%. The highest increase we see in lending-based revenue, where the growth was 41%. And there is mostly driven by the product where we offer customers payment directly upon invoicing, where we had the growth above 50%. On this page, you also can see how we will report net sales in the new structure, where we have business platform, which is responsible for our core SaaS offering, where we have subscription-based revenue connected to the users, but also transaction-based revenue, for example, pay slips or capturing supplier invoicing, which are largely recurring as well. And then we have financial services, which are responsible then for our financial offer, but also payments. And here we have transaction-based revenue from the invoice services, where we help our customer to send invoice and send reminders, but also collect money. And here we also have all the lending-based revenues. where we have this, as I talked about before, where we help customers get paid directly upon invoicing, also corporate loans and the upcoming pay later products. And in the quarter, as for the full year, the growth drivers have been existing customer followed by new customers, and of course, some impact of the price adjustments. And the price adjustment that we made earlier in last year accounted for just above 5% percentage points of the total net sales growth for the full year. And looking at the income statement, we highlighted the other operating income where we had a positive effect of 25 million. And these were the lower estimated earn out as well as the divestment of Oferta. And looking at the balance sheet, we have highlighted that we now are owner of a new jointly owned company, which holds Oferta, and we own 49%. And we also see on the asset side that we have an option to buy additional 3% of that company. On the liability side, we have a decrease of the lowered expected future earnouts. Yeah. And on the cash flow, we highlighted that we have a grow in our lending business, which of course impacts the cash flow. But looking down at the free cash flow adjusted for lending and acquisition, we see that it remains stable. So to summarize the year, we think it's important to maintaining the balance between usage and the number of customers. And for the full year, we added another 62,000 customers and we increased usage and the average revenue per customer increased by 30 Swedish kronor. We passed two billions in net sales. And we had the rule of Fort Knox of 67% when we add growth of 25% and an EBIT margin on 43%. So then some business highlights. These two numbers reflect the shift that we are about to broaden our offering from more compliance-driven workflows to more business-driven insights. So we are already supporting a significant portion of the Swedish businesses. And the first number is the value of all received supplier invoices in Fortnox during 2024. And with all this vital data and key metrics that we handle for our customers, We want to bring back more or provide more value to the companies. And one step towards that is that we now have more than 50,000 companies benefiting from our product insights each month since we launched that to all customers in October last year. With organizational changes we announced in Q4, we believe that we can further strengthen our ability to drive growth and scalability. And the new organization came into effect the 1st of January, enabled us to focus even more on core business flows with all the transactions in those flows. And we believe that we can create a better user experience and strengthen Fortnox as a whole and as one. But also it's important for us to integrate payments and financial products as a part of those core flows. And looking at this picture. We can see that payments are an essential part of all the workflows, and therefore we think it's important to further implement them into the ecosystem. And we see a strong benefit for our customers and their end users with simplified payments. They get better control over the payments, better user experience, but also a higher security. And the more we get the users to use Fortnox, the more insight we collect and the more insights we can give back to our customers and the decision makers around the companies. And of course, for Fortnox, this enables new revenue streams and continued growth possibilities. So to summarize, we passed 2 billion in net sales and proved the scalable business model that we have. We are increasing the focus on usage and on core business flows. And we think that we can deliver even more value to the Swedish businesses. Thank you.

Thank you, Roger, for the presentation. I think now it's time for the Q&A session. You can call in to us, as I mentioned, using plus 468 559 313 37. Or you can send them directly to us here in the chat. Actually, we already got a few questions. The first one is about the price adjustments we made last month and the impact. And the new prices, they start for new customers from 30th of January. And for current customers, the new prices will start earliest 1st of March. And the increase is expected to have similar positive impacts as January. previous increases. Also, if we got any feedback, of course, increases prices is part of business as usual, but we are constantly increasing the value of our products. We feel that we actually have more to deliver to them. Next question is the packages that you offered your new customers or all customers last year. Have you seen any impact on increasing the packages? And we did expand from three to eight. primarily as a marketing tool to offer to customers to tailor the solutions to give them better value. And when you give them better value, they use it more, and that, of course, increases the ARPC and the average revenue per customer. But we should remember that this offering is only to the customers that come through the web, and that's around 25% of the new customers. And then we have one more question. Do you see an increased demand for your business cards? Yes, we do. But adoption of new payment cards, it takes time as customers get familiar with the benefits and integrate it to their daily routines. So while progress is steady, we do focus on increasing awareness and usage to ensure a smooth and successful rollout. I think we actually have some questions from the phone. Simon Granat, ABG. Good morning.