Nordnet AB (publ)

Good morning, everyone, and welcome to the presentation of Nordnet's fourth quarter of 2024. My name is Marcus Lindberg, and I'm the head of investor relations at Nordnet. With me today, I have our CEO, Lars-Åke Noling, and our CFO, Lennart Krän. Lars-Åke and Lennart will, as usual, start off by presenting the results, and then we'll have a Q&A session. During the presentation, all participants will be on mute. And then when we come to the Q&A session, We're going to have two alternatives to ask questions. You can either click the raise hand button, or then I'll mute you and call your name, or you can submit a question in writing through the Q&A button. The presentation itself is available on our corporate website, nonetab.com. Okay, let's start the presentation. Lars Åke, please go ahead.

Thank you, Marcus. We can go to the next slide. So some of the highlights for the quarter. So revenue and profit record levels, both in the quarter and for the full year. We see the highest customer growth in net savings in three years and very strong growth in our core business fund and trading from a growing customer base, but also positive market performance. Also very successful launch of the Danish Livrent pension product. And we also announced that we aim to launch now our fifth market, Germany, in H2 2026. OPEX is 7.7% for the year, but that includes 10 million also investment for preparating Germany. So excluding that is 6.8%, so close to our guidance. Median target is also updated. We'll go through those and propose dividend of 8.10 SEC up from 7.2 last year. Next. Looking at some of the numbers for the quarter, very strong customer growth, 40% year-on-year. Also very good growth in savings capital, up 25%, both from underlying growth of the savings capital, but also very strong net savings. And we passed 1 trillion second savings capital on the platform during the quarter. Also strong trades up 14% from then a growing customer base, but also positive markets. Looking at revenues, we had record revenues for the quarter, 1.3 billion, but we see a decline here on net interest income from lower interest rates, but also that we sold the personal loans portfolio to Econo. But very strong growth, 45% up year-on-year, both for the fund and trading business. Cost, including marketing, is growing 70%, but excluding the extra marketing cost that we had in the quarter, downline growth was 6.8%. And also record levels on profit with 900 million in the quarter, so still very good operating leverage in the business. We'll go to next. So a little bit the full year, of course, customer service capital is same. Number of trades for the full year is up 8%. Also, again, reflecting a growing customer base. Revenues is up 12%, where we see a flat year-on-year net interest income for the full year, but a good growth then in the fund and the trading business. Expenses for the full year, 12% including marketing and 7.7% excluding extra marketing, but then including them 10 million SEK also investment in pre-study for Germany. So underlying is 6.8%, so close to our guidance. And profit before taxes also record level 3.5 billion. So a strong year, also revenues record over 5 billion for the year. And we see we have very strong customer growth in net savings during 2024. Customers, almost a quarter million new customers, 250,000 new customers versus last year, 150,000. And net savings was double versus last year or 2023, 73 billion versus 35 billion customers. Go to next. We also see here to the left and the blue graph there is trading customers. And we see that's developing nicely in line with our customer growth, but also reflect a little bit positive markets. We see also down to the right that the share across borders trading is very high in the quarter, both on the country mix, but also of course, a very strong quarter four in the US. Go to next. Looking at trading overall, so trades per customer per year stabilized since 2023, but we are on a lower level than pre-COVID in 2019. But in spite of this, we almost doubled the number of trades per day because we more than doubled the customer base during that time. We also see in the graph to the right that the income per trade is a lot up, 50% versus pre-COVID in 2019. And that's from a high share cross-border trading from country mix when we see the customers outside of Sweden trade more cross-border, but also, of course, reflecting a strong U.S. market during 2024. Looking at our fund business, we see very strong continuous development here with fund capital growing 1.5 times the total savings capital. One quarter of the funds are Nordnet branded funds and half of the net buying is Nordnet branded funds. More than half of the customers, almost 1.1 million customers own funds today. And we see also that the margin in the fund business is stabilizing from slowdown in the shift from active funds to passive funds, but also when the customers buy passive funds, the funds are mainly by the Nordnet funds, where we have a higher margin. But reflecting the full net in the year is 37 billion, which is a good number. And half of that then is going to the Nordnet branded funds. Go to next. Looking a little bit on the net interest income then, a snapshot for the year, starting with the liquidity portfolio, where we see an estimate of 1.25 billion in 2025, assuming then the quarter four volumes, currency allocation, and also the market rates or consensus rates on the IBOR rate development. But here clearly the sensitivity is deposits, and we estimate that deposits will increase during the year from a growing customer base, strong net savings, but also that deposit to savings capital level is low. But looking at the volume in the quarter for the liquidity portfolios increasing from 43 to 47 billion, that's reflecting the selling of the personal loan business. Next, looking at the loan snapshot, it's 1.2 billion for 2025, again, assuming quarter four volumes. Interest rates, as we saw on January 1, and then the consensus estimates on the IBOR rates with the pass-through of margin lending of 50% and mortgage 100%. But also here, we foresee a higher margin lending volume over the year. You can also see the volume in quarter four versus quarter three for total lending is down because of the sale of the private loan portfolio. Continued low risk loan portfolio, loan to value for modern lending is 35 to 45% depending on country and mortgage 45%. And credit losses is going to be on very low levels in the coming quarters or coming years after we sold the personal loans portfolio. Also looking at the margins, especially on margin lending, which is a growing product, fairly stable margins in spite of lowering central bank rates. Looking at the deposit snapshot, the cost for deposits is going to be around 400 million second 2025, again, assuming quarter four volumes and a high 100% pass-through of the IBOR rates. But also here, I would say that we probably have an upside from that amount of the savings accounts. We see that already in quarter four here, that the amount of savings accounts will lower and be moved to transaction accounts when interest rates are falling. But all in all, very good operating leverage in our business. We grow the revenue with 30% per year since 19. Cost has only been going 6% per year. So basically, we get almost an entire increase on the top line down to the bottom line. So true position of profitable growth. Also very productive quarter when it comes to new launches. Of course, the biggest launch was the Livrenta product. I'm going to talk a little bit more on that next slide. But also a lot of new releases in our app and web. And we also launched now the new cloud-based partner web, enabling us to work even better with local wealth managers going forward. We've got the next little bit start on the Livrente then. As you know, we talked about that before, the Livrente launch enables a 2 trillion SEC market for us. And the start has been good. It's around 1,600 customers that signed up for Livrente. And they've initiated transfers of close to 1.2 billion SEC, where around 400 million of that has ended up on the savings account of Livrente. savings capital on our platform already, but a strong start and a continuous strong development. We also launched our new brand concept, the Joy of Savings, so more fun savings in stocks and funds. And here we position savings versus shopping in a playful way, where we say that savings is as fun as shopping. And we do a little bit of contrasting as well. So, for example, probably a better investment than a pair of shoes to invest on a non-net platform. And it's been a broad take out of this concept starting on December 23, both in print, in digital media and TV. And so far, it's been very well received. Then Lennart.

Yes, thank you. We can go to the next slide, please. With that strong underlying result and development of the business, we also have a solid capital and liquidity situation. That includes also the sell-off of the private loans, as we did in October last year, ending us up with a leverage ratio of 6.0% and a total capital ratio of 24.3%. All this enable us to take opportunities and do things when opportunities come up here during 2025. So a very solid capital and liquidity situation after this great year. Yes.