Fortnox AB (publ)

Good morning everyone and very welcome to Fortnox Q1 2025 report presentation. My name is Mia Nordlander and I'm head of investor relations. With me here in the studio today in Växjö I have our acting CEO Roger Hartelius. The agenda for today is that we will start a Hearing Roger presenting the Q1 in Nambus, followed by some business highlights, and then we will have time for questions. You can either call them in to us here in the studio by dialing plus 468 559 313 37, or you can send them to us here in the chat. So once again, we're welcome and over to you, Roger.

Hi there, and thank you, Mia. So first, a short summary of the first quarter. So Q1 showed 25% organic growth and 33% EBIT growth. The RPC target of 300 Swedish kronor was surpassed, and we reached 304. And our focus on strategic changes aligned with the new direction continues. So looking into the numbers, we saw a customer growth with 14,000 customers in line with Q4 previous year, but yeah, and a little bit lower than previous year. And in Q1 last year, we acquired Board Easer, which added 3,000 customers. We had a growth in RPC with six Swedish kronor, and that made us surpass our target of 300 per month. The revenue growth was 21%, and adjusted for acquisitions and divestment, the organic growth reached 25%. We had an EBIT margin of 44%. And looking at Rurafot NOX growth and margin combined, we hit 64%. So a stable and strong first quarter in 2025. And looking at customers and average revenue per customer, we have seen a stable development towards our target that we set up in 2020. where we said that we should double the number of customers and double the average revenue per customer and now reaching the average revenue per customer. But we are slightly below on the numbers of customers. The combination, though, is of usage, which we measure in average revenue per customer and the number of customers are, as said previously, still a focus and also crucial for our revenue growth. And as a result of the new direction, we focus more on increased usage and we see significant growth opportunities to getting more usage among our existing customers. But I would like to remind you that the combination are the two targets. The number of customers and the average revenue per customer remains in place, which is based on the business plan established in 2020. And looking at the development over the last four years and closing Q1 with the net sales of 563 and organic growth by 25, An EBIT of 246 million and an EBIT growth of 33%. We think that it proves a sustainable business model. And looking at the rule of Fortnox, which is an important metric for us to balance growth with margin, we hit 64%. And that gives us 16 consecutive quarters above 60%. Some net sales highlights then. Net sales increased by 21% and organic net sales by 25%. And the major growth drivers are still existing customers, but also new customers and price adjustment. And the divestment we did last year impacted subscription negatively by 7%. And the organic growth in subscription was 23%. In business platform, which is responsible for our core SaaS offering, we had a growth of 18%. And within financial services, which is responsible for our payments and financial offer, we had a growth of 34%. On the right, you see the product per revenue type, our largest product per revenue type. And our product invoicing that stands for just above 20% of our subscription revenue had a growth by 30%. And the second largest product within subscription is bookkeeping. Invoice service, where we help our customer to send invoices, send out reminders and also collect money, stands for almost 30% of the transaction-based revenues. We have the growth of 29%. And the second largest there is capturing supplier invoices. Within lending based, our factoring product stands for over 75% of the revenue. And the growth there was 43%. And the other product there is corporate loans. So on the income statement, I've highlighted some non-recurring items. The warrants received in mint, which are expected to be converted into shares now in the second quarter, were revaluated and led to a positive impact of 17 million, where 5 million impacted the other income, and the other 12 million impacted the financial income. We also had some cost for advisory service related to the public offer on the same level, 5 million. So in taken together, we have a positive effect of 12 million on profit before tax, but on operating profit and on EBIT margin, we had no effect on the one-off items. On the balance sheet, I've highlighted the growth in factoring, and we now have one row for the factoring, as previously reported as purchase receivables and receivables factoring. And on the cash flow, highlighted also there that factoring continues to grow, but also highlighted the free cash flow adjusted for lending and acquisition, which grow by 57% in the first quarter. So looking at some business highlights, these two numbers represent our focusing on offering financing and payments as a part of the core flows in the platform. So looking at the first number in March, we surpassed 500 million of monthly value through our factoring product. And as you saw, the financial service is currently the fastest growing business area within Fortnox. And on the right, we have more than 100 million in spending that was carried out using our business card in March. And during Q1, we had more than 8000 customers using our business card. And here's another number that more reflects our focus on usage and users, where Fortnox ID now has more than 800,000 users. And to describe it briefly, Fortnox ID is a personal single sign-on solution for all products and all the companies or organizations within Fortnox and linked to the same user. And it offers a smoother experience and higher security for the user. But it also contributes to a seamless experience when you are inside the Fortnox ecosystem or the Fortnox platform. So the user perceives our offering as more as a one Fortnox and workflows instead of different isolated products. So to summarize the first quarter, given the macro environment, we once again proven our sustainable business model will 25% organic growth. In 2020, we set two kind of aggressive targets, and now we reach one of them by doubling the average revenue per customer reaching 304 Swedish kronor. And we continue our focus on the strategic changes aligned with the new direction. And we continue to work towards improved user-friendliness, increased usage, and for one Fortnox with seamless workflows and including them payments and financing as a natural part of those workflows. Oh, thank you.

So thank you so much, Roger. It's time for questions. And as I mentioned, you can dial into us by using plus 468-559-31337 or send them to us here in the chat. So do we have any questions? I think it's this, I don't have any in my computer here. Maybe this will be the fastest quarterly presentation in our history. Give them a few more minutes, but maybe... Yeah, we have Ahir actually. You are Kim Gunnell. Good morning. Can you hear us? Good morning.

Good morning. I can hear you now. Hope you can hear me well.

Great to hear from you.

Lovely. Likewise. Congratulations on reaching these five-year targets ahead of time. But I mean, it's impressive to see you grow at this scale and in this recessionary backdrop, right? But in all honesty, that target didn't include price hikes nor M&A at the start, right?

We didn't set up the goal in that detail. So we had a goal of the two in combinations. Of course, the number of customers and the revenue per customer is important for the growth. So it wasn't in that detail.

All right. Anyway, that wasn't really what I wanted to ask about. I just wanted to hear your thoughts, Roger, with regards to what extent you envision being a private company will allow Fort Knox to really accelerate and take the next step. Whether that is to say international expansion or to invest more to grow even faster, which perhaps a public setting is not that forgiving to.

um so we are we are here running our business plan as for now and we have our owners so we haven't discussed that or um thought about that so much so we are we think that we have been able to do we wanted to in this context so yeah let's see so no i won't comment i haven't we haven't discussed it or

And of course, we continue to work and making Fort Knox and our customers even more successful and of course, creating great companies out there. So the work continues, right?

Great. And then just one more question from my end. From a product perspective, you highlight here in your CEO letter the strategic importance of payments and financing. And we are seeing this coming through into numbers. But can you just highlight where your attention will primarily be over the coming year to really realize the opportunities, especially within payments?

Yeah, so we think that it is a natural part of the workflows where our customers are. So, for example, in the supplier, when you receive a supplier invoice, we have great solutions for that. We make the capturing of data automatically. We do the bookkeeping automatically. We have an improvement flow that is easy to use. But we haven't done that much on the payments. That is the next step in that flow. So we believe that to get those workflows seamless, we can add much more value. And we have the transactions and the data in real time, which we can use then to bring back value to our customers. So in more than one flow, the payments is a natural part. So that is what we are trying to aim for.

And if this is the last waltz as a private company, I wish you the best of luck on your future endeavors. Thank you.

Thank you. Next on the line, we have Mark from Morgan Stanley. Good morning, Mark. How are you?

Good morning, Mia. Good morning, Roger. Can you hear me OK?

Yes.

Perfect. Well, thanks for having me on and congrats on a good first quarter. I've got a few questions, if that's okay. The first one, just on the EBIT margin result, which was, I think, quite a bit stronger than expected for the first quarter versus consensus. It looks to me like that was mainly driven by lower employee costs. Look on my maths to be about 11% year on year. That's quite low growth versus history on that cost line. So could you just give us a few more details on what was driving this? Is there any one-off factors to be aware of in the first quarter, and how should we think about employee costs for the remainder of the year, please? That's the first one we're going to call mark.

Yeah, we have a small growth in number of employees, but it's nothing that we have been driven. So we are still employing. We're still growing. Some effects since we did the reorganization last year. So to some extent that have been fewer employments during that period. But otherwise we are growing as we have done before.

Okay, that makes sense. And I appreciate the disclosure on the Fortnox card, very impressive numbers. I think if I remember correctly, in the past, you've said you make about 1% on card volumes. So at 100 million kroner per month, that'd imply kind of annualized run rates of about 12 million kroner per year. Firstly, is that the right way to think about the magnitude of revenue contribution? And could you just tell us how fast those volumes are growing, either on a year-on-year basis or month-on-month basis, just to kind of help us gauge how fast that's growing?

So, yes, you're right with the calculation on the revenue side. And we have been, yeah, we... I've had, I think, for one year or a little bit more, but it was first in October that we had the full solution. So the accounting firm also could use it with the full improvement flow and so. So we have had a stable growth and we believe that it's still great potential in that product.

We're focusing on teaching our customers the benefits of this card. Of course, that takes time, but we feel secure that this will be very successful. Again, that's why we wanted to show this number. It's growing from a study base.

Perfect. And then just finally, kind of on the take private offer in the press release, there's a few mentions of international expansion, something that I guess hasn't been discussed that widely in the past. Has there been any change in strategy here? Is this something that you're exploring in the next business plan period? Any details would be helpful in terms of how you think about that going forward?

No, of course, no details. We are in the middle of creating the new business plan. But of course, we're looking at different opportunities. And we have been looking at M&As as well during this business period. But as I said, during this period, we have seen greater potential within Sweden. And for the next period, let's see.

Perfect. Well, appreciate the call. Congrats on the call. And thanks very much.

Thank you.

Thank you. I have a question here from the chat. Roger, can you give an update on the offer from EQT and the next steps? And do we anticipate any delays regarding regulatory approvals required?

So no, I can't comment on that offer. That's up to the consortium. So no, no information, no comments.

Yeah. And just to remind everyone, if you have questions regarding the offer, there is a website, omega-offer.com. You can find that address on the website as well. So yeah, please talk to them regarding this. Let's go to next question. Have you said anything how many cards have been issued to your customers since the launch? I don't think that's an information we have given, right?

No, so we've given more than 8,000 customers using the card in Q1.

Thank you. It looks like that was it for today. Thank you everyone for listening in to us here this morning. As always, if you have more questions, feel free to reach out to me and our departments. I hope you will have a very good day and thank you very much.