Qliro AB (publ)

Welcome to CLIRO Q1 presentation 2026. During the questions and answers session, participants are able to ask questions by dialing pound key five on their telephone keypad. Now I will hand the conference over to CEO Christopher Rutgersen. Please go ahead.

Good morning, everyone, and welcome to our Q1 presentation for CLIRO. I'm Kristoffer Rutgersson, BDC CEO for the company for a couple of years. And today we walk through our strategic highlights, financial update, and a quick discussion on the outlook. And then we will open up for Q&A. So first of all, to share some strategic highlights for the quarter, we still see a big opportunity to build a new European leader in composable payments. And we are rapidly going in that direction. We are back to profitability in the first quarter this year after a couple of quarters or a few quarters of growth investments when we have expanded into new markets. And we're proud to be back in profitability according to plan. That is driven by our strong volume growth of 38% in total payments volume growth in the quarter. And we also see strong growth on our buy now pay later volume accelerating to 41% in the quarter. Our net revenue, what we previously called operating income, is growing at 19%, which is up from 14% in Q4. So we see an acceleration also on the net revenue level. And the growth is more and more driven by the SME segment, now representing more than 50% of the total payments volume growth in the quarter. We also see good success on our Nordic expansion, which is continuing with strong momentum in both Norway and Finland. So first of all, our vision is to build a European leader in composable payments. We believe the tech stack within the e-commerce is changing to more and more composable setup and we want to be the best fit for the e-commerce players that are choosing modern technology. We are starting in the Nordics, even if we enable our merchants to sell across the globe. We have a mission to deliver a world leading experience for merchants and their customer journey. So focus a lot on improving the consumer journey, which you also will see in the results on our credit losses in the quarter. In the mid term, we have ambition to build a local market leading position in the Nordics, and we are well on the way to get there. From a profitability perspective, as you can see, we started to make quite large investment in growth from Q3 2024, when we opened up our office in Norway, started to plan for a sales office in Finland, as well as expanding our sales and marketing efforts to expand also in our main market in Sweden. We are now back to profitability, which we are very proud of. Even if it's small profitability, it's a strong trend from Q2 when we were minus almost 30 million. So we continue good trend also going forward. And this is very much driven by the volume acceleration we now seen for a while that is starting to materialize into the P&L. So from a total payments volume perspective, we are processing 4.5 billion SEK in the quarter, up 38% from Q1 last year. And as you can see here on the yellow colors on the right hand side, we also see a strong acceleration in the BNPL volume growth now outpacing the total payments volume growth as the share of checkout for our buy now pay later products are continuing to increase. We see also that this BNPL volume growth is leading to an accelerated net revenue growth. So we're growing 90% in the quarter, up from 40% in Q4 and 3% in Q3. So for those of you that follow us for a while, you know that when we process by now, pay later, that builds up a loan book and that loan book is generating a large part of the income. Hence, we have a lag between the by now, pay later growth and the net revenue growth. But we expect net revenue growth to continue to accelerate also going forward. If you look at our SME business, so small and medium-sized e-commerce companies, we are a continued strong momentum. We're adding more than 100 merchants to the platform in the quarter, 118 merchants going live or the increase in merchant space. We're now almost 700 merchants live on the platform. more than 10% since I joined the company. We are growing 148% in number of merchants since last year. And the contribution to net revenue from our SME segment is now 21 million in the quarter. We see a bit of a spike in Q4, but it can have continued strong momentum upwards. And the spike in Q4, we're a bit driven by that. We also take more payment method income up front from kind of in our merchants fees so we expect this to continue to increase also going forward as we onboard more and more merchants to the platform if we look at our international expansion we set up our sales office in norway in kind of the autumn 2024 and we set up our sales office in finland in april last year so now roughly a year we kind of being live in finland and And we see kind of a stronger volume from those markets, which is kind of seeing a good contribution to kind of overall growth of merchants and volumes. And we are also addressing increasingly amount of volume outside the Nordics from our Nordic merchants. And we are looking into opportunities to address European merchants that are processing volume in the Nordics to kind of handle their buy now pay later solutions for their Nordic consumers. So some strategic highlights looking ahead. We have a midterm ambition to build a market leading position in the Nordics. We're well underway to get there. We see a commercial momentum that is continuing to improve. We had a stronger momentum in Q1 than we had in Q4. And we expect that to continue to drive a high volume growth also going forward. That will lead to also kind of an increase in the net revenue growth to continue to accelerate, which is maybe lagging the BNPL growth by a couple of quarters. SME will continue to grow with more than 30% of growth in new volumes. In Q1, we'll be even at more than 50%, where we expect also going forward that SME will be a large share of the business. Our Nordic expansion, we expect to accelerate even further as we are onboarding more and more local partners, which is expanding our addressable market in each market. For example, we onboarded 24 Netbutik in Norway and Vilkas in Finland just after the quarter. So we are drastically improving our addressable market in both countries. We also will have a focus to continue to improve our income generation from the volumes, increase scalability in our platform, and improve efficiency in our processes, mainly driven by our investments in AI that was also started during the autumn, has been one of the enablers of the cost reductions. So going forward, we expect a continued growth acceleration and profitability for the full year 2026. So let's jump into our financial updates. And given that I shared some financial data also in the strategic highlights, it will be partly repetition. If you look at the full P&L, volume growth is at 38%. Net revenue is growing at 90%. Credit losses is actually declining by 7%, despite the growth in both volume, revenue and loan book. So that's something we're very proud of, given the kind of improvement we see in our full consumer journey, both for app users in Sweden, Norway and Finland. That is leading to a gross profit at one that is growing by 21% or 28%. We see a variable cost that is not increasing as much as TPV. It's growing 6%, very much driven by renegotiations and efficiency initiatives we did during 2025, leading to a gross profit to growing at 32%. So overall increasing by 20 million or 20.2 million since last year. Fixed cost is overall only increasing by 6% despite the strong volume growth. And if we look at Q2, it's actually declining as we'll come back to that soon. And that is leading to an operating profit at 200,000 kronor in the quarter. So if you look at some of the other leading indicators, our loan book growth is also accelerating a bit to 8% in the quarter and our BNPL share of checkout or share of our total volume is continuing to increase. It bottomed out in Q2 last year at 14.1% and since then continued to increase and we are at 16.2% in the quarter. That is kind of the main driver of our net revenue growth to 90%. And we also see that SME is now representing around 90% of net revenue. So up more than 10 percentage points since last year. We also see that we have now improved our presentation of net revenue. If you look at the split between net interest income and net commission income, we have done a couple of reclassifications in the quarter. You can also find in the report as well as our KPI table, also kind of perform our figures for our historic data with the new split. And the new adjusted classification has intention to improve visibility of our income generation, where the majority of our consumer fees are covered in net interest income as those are driven by the loan book. And most of our or all our merchant fees are part of the net commission income. So as you can see, those are the net commission income growth of 52% is closer to the volume growth, while the net interest income growth is kind of closer to the loan book growth, even if we have also some upfront costs driven by kind of transaction by transaction. So we hope that this new way of presenting net interest income and net commission income will also kind of help US investors to better understand the business going forward. Moving on to credit losses. Credit losses overall is reducing by 7% in the quarter, despite the growth in the loan book of 8%, and despite the growth in BNPL of 41%. So that's something we're very proud of. And it's very much driven by better performance in both our credit scoring, credit modeling, and kind of our credit acceptance policy. together with improved consumer experience. So we see much less consumers going to reminders and we see much less consumers going to debt collection. Over the overall portfolio of all products in all markets, we are reducing 90% in Q1 this year compared to Q1 last year. And a bit more if you look at BNPL only, then it would be closer to minus 30%. So that's a strong performance given the growth and we believe that the better consumer experience will also help us to continue to grow our share of checkout of the BNPL and palliative products going forward. If you deep dive in cost and looking at operating expense development adjusted for items affecting comparability, the overall cost base are fairly stable compared to last year, increasing by 6%. But if you look at the cost base compared to Q2, just before we launched our restructuring program in the autumn, our operating expenses, excluding depreciation and amortization, is actually declining by 6%, despite the strong volume growth. And we expect this to be able to be fairly stable going forward, given the investments we have now done in automations and scalability on the platform, as well as the new technology platform we are launching for our Pellator products. If you look at our CapEx, we are declining that dramatically by minus 32% compared to last year and a bit more compared to Q2, Q3. driven by the restructuring program combined with the new technology platform that we launched during last year. So we are now much more efficient on our product development. This is leading to our operating profit, which I showed before. So we have done growth investments in Q3 2024. We now see the results of that. We are getting back to profitability, very much driven by the control cost as well as the income growth. And that's something we look at very positively. And we continue to expect profitability for the full year 2026. From a capital perspective, we are well covered. And we, after the quarter, finalized the rights issue, which was oversubscribed by 191%. So we have secured 101 million before transaction cost in new C81 capital that will be We added after the quarter, so that is also increasing and strengthening our capital base even further. So we're well capitalized for our growth journey going forward. And the ambition with that capital raise was primarily to fund the loan book as we continue to grow going forward. Looking at the outlook for 2026, we are expecting a continued net revenue growth acceleration. We expect profitability for the full year 2026. We will continue to accelerate our SME and enterprise sales engine. And we continue to build growth momentum on the early success of our launch in Norway and Finland, especially now as we are expanding the addressable market in both markets. And our pipeline is becoming more and more mature also for the mid and larger sized merchants in those markets. So far, the growth has been driven mostly by SME in each market. And fifth, our focus on initiatives to accelerate income generation, improve scalability and efficiency will continue. So with that said, we'll also, of course, stick to our mission of delivering a market leading experience for merchants and their consumer journey across the Nordics. And we believe that will make us winners also going forward as we see more and more merchants and partners upgrading to our platform. So with that said, thank you very much. And we will open up for Q&A.

If you wish to ask a question, please dial pound key five on your telephone keypad to enter the queue. If you wish to withdraw your question, please dial pound key six on your telephone keypad. As a reminder, if you wish to ask a question, please dial pound key five on your telephone keypad. There are no more phone questions at this time, so I hand the conference back to the speakers for any written questions and closing comments.

Okay, no spoken question. I see we have received some written questions, so let me read them and answer myself. So first of all, we have a question from Panetta Securities on BNPL volume growth accelerating in Q1 and what trends we see in the quarter and into Q2. So the trend we see in the quarter is that the BNPL volume is growing 41%, which is an acceleration since Q4, where we were growing 32%, if I remember correctly. So we see an acceleration in the BNPL volume growth, very much driven by both the strong growth in TPV, as well as the continued increase in our share of checkout or share of TPV that is BNPL volumes. We expect those trends to continue also going forward. We also have one question on that the merchant growth was very strong in Q1 and how much of the intake is from SME and what onboarding lead times we should expect going forward. And we continue to see an improvement in our onboarding process and improvement. The onboarding process as well as the tooling and automations for onboarding that we are investing in across all our markets. So we have gone to around... A bit more than 50% of merchants that are going live within the first month from signing a contract. And then many merchants that may have contract periods or cancellation periods with the previous providers of three to six months and hence kind of taking a bit longer to go live. But overall, we are improving the onboarding performance both in the SME and enterprise segment. So we expect that to be quicker and quicker also going forward. Overall on the commercial momentum, that was very strong in Q1. We had more sales in Q1 than in Q4. So we continue to expect kind of an accelerated momentum in all our markets also going forward. We also had one question on profitability in Norway and Finland as volume scale. We haven't shared profitability on a country basis and of course our markets are also supported by central resources. If we look at the local cost only, we are very close to profitability in Norway and we still have some time to get there in Finland. We also have one question about credit losses at 0.55% of total payments volume as a sustainable run rate, or is there room for further optimization? As you know, a large share of our loan book is relating also to loans or part payments that we are kind of longer term that is kind of made up from historic credit decisions. And given that our credit decision has continued to improve over the last year, We also expect the overall performance to continue to improve going forward as the loan book can continue to mature. And one leading indicator on that is what we've shown on the reduction of exports through debt collection of minus 19% for the quarter. We also have one question about if we can give any updates on the buyout interest we received during last year. And given that we haven't communicated anything more, that interest have not materialized into a firm bid yet. And there's nothing more we can share at this time. We also have one question on... how we view the development of fixed cost going forward. We haven't shared any guidance on that, but we expect the profitability for the full year and we will continue to with kind of tight cost control until we see we have kind of solid profitability from kind of the continued acceleration in income. Then we have one question on Operating costs only increased 6% despite a 38% increase in transaction volume. Do you believe the current organization structure is fully optimized or will further scaling require significant new investments? And we have during the last 18 months done significant investments in our organization. Nordic expansion. We now have a sales and marketing up and running for and processes supporting the sales organization in both Norway and Finland. We don't expect any more significant investments for our current markets and we expect to be able to grow very efficiently from here with a lot of investments in both our new technology platform and automated We are seeing more and more gains from our internal focus on AI tools. So we expect to be able to grow more cost efficient from here. Overall, we have previously guided down that if we would grow volume or operating income 100%, we expect a scale factor of around 30%. So increasing operating income 100% and we probably need around 30% cost increase to support that. given the semi-variable cost of merchant support, consumer support, IT services and similar. Then we had one question on Q1 showing EBIT of 0.2 million. How does the rest of the year look like? Do you expect each quarter to be profitable? And as you can see in the report, our guidance is on that we expect profitability also for the full year 2026. And then one more question. Of the 150% growth in new merchant, how many of these in absolute numbers how many orders in absolute numbers and how much of the revenue is driven by SME versus enterprise. And we show that on one of the pages and that is the 148% is an increase of 118 active merchants in the quarter. So we're growing from 579 active merchants in Q4 to 697 merchants in Q1. And 90% of the total net revenue is now driven by the SME segment. And we expect that to continue to increase as we see, as in the quarter, we see around 50% of the volume growth from SME. If that would continue over time, then of course, we would also see more than 50% of the net revenue from SME, given that we also have higher profitability and higher margins in the SME segment. I think that was all questions we've received so far. So if there's no more questions coming in, I will give it a short while and then we will close the presentation. Good. Thank you very much and we're happy to report a solid performance in the quarter and we expect this to continue going forward. So thank you very much and have a nice day.