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.

Okay, Germany. So we announced that we are going to launch our fifth market Germany and the expected launch is H2 2026. So I'm going to go through a little bit of the rationale. So Germany is a very large and growing savings market. It's twice the addressable market compared to the full Nordics. We also made a market study that shows that what German savers value is a very good fit for the Nordic offering. We have a good track record of geographic expansion. We have a multi-country organization, we have a multi-country platform, and we can launch a new country with limited investments. We also now have resources available after the Livränte launch. Historically, we've been running one big product development per year, so that we now continue with Germany. So opening Germany will secure additional long-term growth and diversification of the business, again, to limited investment. That allows us also, of course, to continue to focus on the good growth runway we have in the Nordics. The German market is large and also growing rapidly, not least investment in fund and stocks. If you look to the left, it's around 12 million of Germans that invest in stocks and funds today. That's 17% of the population compared to the Nordics, where it's 40 to 80% of the population that invest in equity funds. So it's a developing market. But it's 500,000 new customers per year that start investing in funds and equity in Germany. So that's, of course, interesting. And we also see that the total address of markets, 38 trillion SEC, if you look at the fund and brokerage part of it, is growing healthily and in line with the Nordic markets. Still, the main way of saving in Germany is deposits. But not least in the younger population, more and more also invest more in fund and brokerage and stocks. And we also see that they did platforms hold around 5% market share in Germany, but are growing rapidly again compared to the Nordics, where the market share in Sweden is 25% and 10 to 15% in the other countries. So pretty long growth runway there. Also potential with future pension reform, going from defined benefit to defined contribution and possible tax incentive for pension savings. Again, addressable market more than twice or two and a half times as big as the Nordics. And Nordic here included also the Livremte in Denmark. So a long runway for growth. And as I said, we've done a market study. It's very clear that German savers value attributes where we are strong today. They value a one-stop shop and a broad offering of savings products. They value a really good customer experience in the app and the web. And of course, also a low and transparent price range. And of course, with a platform that you really can trust both when it comes to stability and security. And we will export our one-stop shop playbook to Germany when it comes to the brokerage. Of course, at UX, not least we're going to work with more attractive and transparent pricing. Pricing today on brokerage is fairly complex in Germany. But also we will enable more exchanges than we have today that would also benefit the Nordic customers. We're going to, of course, expand our in-house leading fund business, the Nordnet Funds, but also at the same time announce our ETF offering. ETF is a popular savings form in Germany. Pension, not in scope initially, but again, like I talked about, long-term optionality and potential forward. Modern lending, I think, is a good opportunity to introduce more modern modern lending and especially to the retail market. And mortgage will not be in scope. And savings account is going to be in a ported driver. And that's savings where we're going to have attractive rates. On to next. So we utilize, of course, our multi-country platform. We do this in an organization that already supports multi-countries. And we do this with a limited investment. The investment in 2025 is going to be 60 million and ramp up to around 100 million SEK per year from 2028. and what we focus on this year is of course to establish a branch recruit staff passport license and start doing the full-blown tech development and we're going to continue with tech development in in in 2026 finalize the go-to-market offering and then launch in h2 2026. And we have a growth phase then up to 2029, but we estimate then a critical mass of customers and break even sometime during 2029. So have a profitable growth from 2030 and going forward. So in summary, then large investment markets extends the growth runway with low investments, good fit versus our USPs leveraging our strengths. And we have a track record of refilling new markets and complement with potential bolt-on acquisitions. When it comes to the medium-term financial targets, we also update those. When it comes to the customer growth, we increase from 10% to 15% to 13% to 15%, reflecting both a higher marketing spend but also launching Germany. Average savings capital per customer from 420,000 to 500,000, reflecting then both strong development in 2024, both net savings and savings capital, but also that we foresee a strong net savings going forward with the focus we have on pension, on private banking and the fund business, not the least. When it comes to income in relation to savings capital, that's down from 55 to 45. That's reflecting a little bit different mix of deposits versus savings capital in total, where we foresee a lower level than historic levels. And, you know, we have a higher margin on deposits than trading and funds. And operating expenses, we adjust slightly upward from mid-single digit to around 8% per year. In 2025, this is reflecting the last part of the extra marketing spend, 25 million. But in the outer years, it's more product and tech to deliver on our strategic initiatives like private banking and finance. But this is excluding Germany. It's actually Germany will come on top of 60 million in 2025, like I said, and wrapping up to 100 million in 2028. And all changing shareholder remuneration guidelines. So in summary, 2025 and the focus areas, of course, laid the groundwork then for launch of Nordnet Germany and realized then the full potential of delivering the product and continue or focus on the fund and pension business and continue the strong net flows we see in those businesses today. Also continue to enhance the high-end offering for private banking and active trading customers. As you know, we just launched analyst ratings. And coming up now is currency counter ISK and KF. It's algo execution and pre-trade in the U.S. We will continue the rollout of the new brand concepts in both print media, TV and digital media. And ramping up then, we had 45 million SEK spent in marketing in 2023, 100 million SEK in 2024, and we will have 125 million SEK spent in 2025. So the full extended marketing spend that we announced in January last year. And of course, we maintain focus on the underlying cost for both automation and our scalable tech platform. So with that, I hand over to you, Marcus, for Q&A.

Great. So let's start the Q&A session. So as a reminder, if you want to ask a question live here, just use the raise hand button or you can write a question through the Q&A button. So first off, we'll take the question from Emil Jonsson at BNB. Please go ahead.

Thank you. Good morning. Good morning. I'd like to start off by asking a couple of questions on Germany. What do you foresee being your sort of competitive edge versus the incumbents in Germany, if you compare to somebody like FlatXD Euro, for example? Do you think you'll need to be cheaper than incumbents? How do you view this?

Yeah, I think we can leverage our full strength, both with the breadth in the product offering, the one-stop shop. Of course, the UX, both in app and web. Pricing, I think we can do a lot, not least on transparency, especially brokerage pricing in Germany is fairly complex. And of course, allow it for a very good, stable and scalable platform. And we see, I mean, if you look at the incumbent banks, their digital offerings, they often have a good product offering, but not necessarily a good UX and definitely not a good pricing. If you look at the digital platforms in Germany, they might have a good UX, but they're often rather complex on pricing, not really up to par on customer service and also not always having the breadth on the product offerings.

All right, and what's your view on the fact that the German digital infrastructure is less developed than the one, for example, in Sweden? Have you considered whether you'll need to, for example, engage with any German paper-based systems?

Not that much paper-based, but for example, they don't have bank ID. Of course, onboarding is going to be different, but there is digital solutions for that today in Germany that we, of course, utilize. We, of course, want to do the experience as digital as possible. But I think the digital maturity has also increased rather rapidly in Germany, not least in the younger population. Same as a savings country, stocks and funds. Of course, we will really try to do this experience as we can.

All right. And what was the rationale for choosing Germany rather than a country like the Netherlands, for example?

Yeah, but we looked at a lot of different parameters, of course, just the market, the growth, the savings culture, the maturity of it, how many customers are in the platforms already, the digital maturity that you talked about, and Germany comes out on top. I think Germany is big, is less mature than the Nordics and Holland, for sure, but it's maturing rather fast, and it gives a big, long runway, and These platforms in Germany only, like I said, have 5% market share versus, I mean, in Sweden it's 25% market share. So I think it's a good long-term potential in Germany.

All right. And do you think you would have gone ahead with the same initiative if Avanza had not recently announced their intention to go out and claim a new country?

Yeah, definitely. I mean, we started our pre-study on a new country before Avanza announced their ambition to expand outside of Sweden. So it's more related to, you know, we want to be a one stop shop in the Nordics. when it comes to the main products, we are there now with the Livrente launch. When we saw that we were going to launch Livrente during the last fall, we started looking, what should we do next? And the actual thing is to open a new country. Livrente is almost like a new country because you passport a license, you build a local organization, a fully new product set. So we saw it's a good opportunity now when we are a one-stop shop in the Nordics. And we normally... We do one big, really big private development per year. We've done that for many years. So we're used to doing that.

All right, I'll finish off with one last question on the topic of livrenta. So if you include all the initiated transfers and all that, you would be at around one and a half billion SEC in capital there. So right around 0.1% of total savings capital still. But if you look at what this could become in, say, three years, do you think...

let's say 10 billion would be an easy or a difficult level to hit yeah but i'd say i mean we have five percent market share of the rata passion market today uh so i i wouldn't say that we could reach around five percent market share was in in uh in Livrentäsvall and that will of course ramp up net savings now we have yeah close to two months around 1.2 billion and so hopefully we can ramp up up to be definitely a higher number than on a yearly basis all right thank you very much thank you Emil the next question comes from Jakob Hesleviker SCB please go ahead Jakob

Good morning everyone. So when you say you will break even in 2029 in Germany, meaning three years after launch, it's quite a quick timeline. As you have stated previously, it took you 10 years to get to Denmark profitable. So how confident are you in this timeline actually?

Yeah, but we are at a different stage now, for sure. We have a good multi-country set up, both organization-wise and also platform-wise. And we re-platformed this, as you know, as well. So we have a totally different scalability in our business today. thereby enabling a shorter time to profitability. Of course, there's always some uncertainty on this. This is based on the assumption of customer growth and net savings and activity. But we tried anyway to be moderate on our assumptions.

Okay, and could you also explain what you mean with bolt-on acquisitions? What type of targets are you looking at and should we expect something in the near term?

Not in the near term, but of course, if you have a green field in Germany with the full product range on the platform, it's easier if you buy a smaller company to then migrate those customers and those products to our platform, which we've done successfully in both Norway and Finland and partly in Sweden. But it's not in the near term. We need to launch in Germany and get established first.

Okay, so it's not a Bolton acquisition that will take you into Germany?

No, no, no. So we do Greenfield first and then that can allow for future Bolton acquisitions.

Perfect. And if we move over to your updated financial targets, what do you mean with median terms? Which year are you aiming to have 500K instead of the client?

I don't know if you want to answer that, Marcus.

I mean, we're... Closing in on that now, I think that should be seen as an average over the sort of foreseeable future in this type of macro environment we're coming into, the one we're outlining where average interest rate is 2%, average stock market growth is 5%. So let's say the next couple of years.

As you know, we're already close to 480,000 from strong markets, but also very strong net savings in 2024.

No, no, I get that point. And you look to be really close. But if you now also hike customer growth target to 15 percent, I mean, they are not really going to bring in 500K per client.

Yeah, I know. But again, with the market development and net savings, it should be possible. And, you know, we had 40 percent growth last year, so. But of course, you know, it's depending on how the stock market develops. Of course, a single year can be up or down. But over time, we should be able to reach around 500k.

No, of course you will. But a final follow-up question. On the customer growth target of 13% to 15%, does that include Germany?

Yeah, it includes Germany, but of course, in the first years here, it's not going to be a big contribution since we're not going to launch until H2 2026. So the main reason why we pulled up the guidance now is the increased marketing spend, where we had the vision with increased spend that we should move up into the upper range of the customer growth, where we also see that we are now. So that ambition we also have in the coming years.

And keep in mind that we're at 14% this year without the marketing spend having had any effect really since we launched the new concept on December 23rd.

Yeah, of course. Thank you.

Thanks, Jakob. Next question comes from Patrik Battelius at ABG. Please go ahead, Patrik.

Can you hear me?

Yeah. We can, thank you.

Good morning. Thank you. Yes, I would also start off by some questions on Germany. So historically, you've been in the German market, but you chose to exit. Can you elaborate a little bit what has changed now when you reenter?

There's a few reasons for that. When we exited Germany last time, we needed to focus on the Nordics. We were very small outside of Sweden and we had a long runway to profitable growth. We didn't have the one-stop shop. We didn't have the experience the customer expected. We needed to do a full replatforming as well. I think it was the right choice to exit Germany. Also, Germany at that time... When you saw the savings culture in funds and stocks, it was very low, but it's increasing a lot since then. So I think the savings culture has also matured in Germany, but it's still a long growth runway compared to the Nordics.

Thank you. And a follow-up to Jacob's questions, where you mentioned you aim to break even in 2029. Can you then elaborate a little bit in your own plans what will be the peak loss per annum and when is that expected to occur in your budgets?

Yeah, we don't have guys specifically on that, but we guide on the cost. So, you know, the full downside is 60 million in 2025, wrapping up to 100 million in 2028, give or take. And of course, it's fairly limited revenue during that time, but we will definitely ramp up in the coming years. So.

you will know it's not going to be I mean you'll know the cost side of it we got very clearly on that and the upside that is of course the revenue okay that is fair just wanted to make sure but given that you mentioned prices have you done a study how your prices stack up to peers and is there is it in the strategy to perhaps lower prices initially in order to

attract the clients uh how do you view that yeah of course we've done a extensive market study on of course as well pricing uh so we have ideas how to price i can't comment that here and what's given too much away but but it's very clear that the the pricing on not least brokerage is very complex i think there are things to do there but you will see when we launch

okay fair enough and then talking about yes sweden because moving away from the the german topic we saw it only grew by 5 000 in 2024 do you expect a much stronger inflow now in 2025 given the the marketing and When can we expect the Swedish market to move towards the group target in customer growth rates, given it's been quite low for a number of years?

I think if you compensate for the seller-person loans business, they grow around 30,000 in Sweden, so around 5-6%. But of course, I mean, with the marketing spend that we do, not least in Sweden, we expect higher growth, not least in the saver segment, the segment that saves in funds and pensions. where we also need to I mean as you know we're really focused on our pension and fund offering and they're really good but we also need to increase awareness and that will take some time to build but of course we have higher growth expectations over time that we can match for example Denmark that's a long way to go but I think definitely we can increase the growth also in Sweden Sounds promising Thank you so much Thank you

Thank you so much, Patrik. And next question comes from Edmund Kirk at Carnegie. Please go ahead.

Good morning. Hope you can hear me. So maybe starting off, could you give us any kind of sense of what's a savings capital breakeven or what kind of revenue margin do you expect in Germany? And I suppose continuing on previous questions, just there are some players that offer commission-free trading and some are doing kind of selling the order flow. Have you considered any of that kind of structure in Germany?

I can comment on the margins as I per se, but we, of course, looking at the payment for order flow, but we don't see that as really transparent pricing because it's customary to pay a lot on the spread. And liquidity is not really there on some of those markets. But again, overall pricing is fairly complex on brokerage. I think we can do things there. Also, the PFOF regime, I mean, Germany is the only country where there's an exception on PFOF until May 2026. So it might be that it will not be allowed in Germany also going forward. But we don't count on that, of course. I think we can compete anyway in a good way. But of course, if PFOF is fully prevented, it's going to, I think, be good for the customer.

And did you have any savings capital break even for Germany?

Yeah, we have, but I don't think I want to comment on that as well. But when we've done the assumptions on growth and that savings activity, we try anyway to be fairly moderate. But of course, you never know until you start.

Thinking about the kind of expenses. You clearly say you've kind of done one big flagship product per year. Now you don't have anything more in the Nordics. How much underlying of the 8% cost growth is going for Germany as well, given that it's going to draw a lot of resources, I suppose?

Yeah, on the other line, we try to have the direct German cost in the German bucket, so 60 million in 2025 and ramping up. So what we got a little bit higher now in cost is both that we will have even higher marketing cost in 2025 versus 2024 to go all the way up to what we said in January last year. So from 100 to 125 million in marketing spend. So that's going to be part of why we grow the cost this year. In the coming years, this board, we want to have more product and tech teams. Even though we're a one-stop shop, it's still a lot of features and other development to do in the Nordics. So we will do Germany, but of course, we'll not let go of focus on the Nordics in any shape or form. We have 6% market share in the growing market, and we have a lot of potential both in in private banking, in pension, in funds, et cetera.

So that leads into my next question, actually. Is there anything we could read into this launch of Germany that you think your growth in the Nordics should be decelerating from here?

No, not at all. So I think we still have a fantastic growth potential in the Nordics and we will not let our eyes off the Nordics. We're going to continue to do a lot of development for Nordics, but we don't need to do those really big product development like Livrent, which is almost like a new country. So we can focus on Nordics, but to limit the investment, still do a launch in Germany since we know we can do one big thing per year. We have a track record of that.

Great. And then just one last question. I mean, you announced the increase of marketing spend already last year, but you left the customer base growth target unchanged. And now you're hiking it due to the higher marketing. So have you seen anything already initially from the marketing that's giving you confidence that it's going to drive higher future growth?

I think if you look at the growth, last year it was 14%, partly of course due to a strong market, but I think partly due to, even though we launched a full marketing campaign at the end of last year, but we still did the tactical marketing on a high level during the year, which paid off. In 2023, we had 45 million SEC in marketing. Last year, we had 100 million SEC. And then we go to the full 125 that we announced last year and in 2025. So, of course, we see some positive signs as well. Superb. Thank you.

Thanks, Armin. Next question comes from Enrico Bozzone from JP Morgan. Please go ahead, Enrico.

Hi, can you hear me well?

Yeah.

Hi, thank you for taking my question. So first one, going back to Germany, I wanted to understand, I know you're mentioning breakeven in 2029. Perhaps can you just give us some color in terms of what sort of customer number you expect by then? If I simplistically add the higher floor of 13% to your current customer base, that implies around 70,000 customers. So I presume maybe it's not just in Germany, but it would be interesting to know what sort of customer number you expect by that. So maybe that's my first question.

Yeah, we don't want to guide on the customers on that savings activity. Of course, like I said, we have a model where they try to be moderate, but we want to launch first and see where it's going before we comment on that. But I think it's still realistic to do breakeven in 2029 with assumptions that we have. But you don't really know until you have launched first.

Okay, fair enough. Thanks. So my second question also in Germany, can you give us some sort of breakdown of the cumulative span in Germany? Let's say, I know you target 100 million run rate, but if you think about the next three years, how much of the cumulative cost for the expansion in Germany will be marketing?

Yeah, but a fair share is going to be marketing. If you look at the state, we probably need 40-50 people. And the additional is going to be marketing. So a fair share of the spend, not least in the outer years, is going to be marketing.

Okay, thank you. And then moving away and back to the Nordics. I mean, you're clearly you're increasing your cost growth guidance by quite a bit now. Is it fair to say that you would also target quite explicitly winning market share, for example, versus Avanza? in in sweden um and and can you give us some extra color you mentioned that some of the additional costs would be in it some in effects i'm just trying to understand whether this is a defensive move or actually i think it's a forward-leaning move but but to be clear this year the the increase from from five to around eight is mainly due to more marketing

so the additional 25 billion spend to go up to the full marketing spend that we announced last year in the in 26 and 27 is more that we have more tech teams to speed up development even faster especially in the areas of private banking pension and fund thank you okay great uh thanks enrico next question comes from nicholas veselier from bmp paribas

Exan, please go ahead.

Can you hear me? Yes. Hi, good morning. Thank you very much for taking my question. The first one for me would be on Germany. It's a little bit of follow-up from a previous one, but what do you see could be the risks that you'd need to increase that sort of 100 million run rate guidance on extra costs? Because it seems to me Like it's a pretty small absolute amount if you consider but you're going organic starting from nothing and probably the brand awareness there is close to close to zero.

Yeah. I mean, the risk is, of course, to get traction on the brand, brand awareness, brand preference over time. We don't have any specific rush since we have a really good growth run rate in the Nordics. But I think we can establish a strong brand over time, but we will not entirely know until we're there. But It might be smarter to let it go another couple of years instead of spending tons of more money on marketing. We'll see when we start there. But of course, there's a risk on brand awareness and brand preference.

And why did you choose to go the organic way rather than trying to go into a new country through M&A, particularly given that you're actually well capitalized?

Yeah, I think, I mean, our track record is that we're really good at Greenfield and then doing Bolton acquisitions, starting in operations and then do potential acquisitions like we've done in Norway and Finland and partly in Sweden. To buy... Of course, you looked at assets, but to buy a big asset, did the platform outside of Sweden, both is going to be costly and it's going to be not that easy to integrate. That's going to be a very long project. You probably need to run the units as separate entities for quite a long time. So it's hard to see the synergy case there as well. And you can see if that takes the year, for example, they still not fully integrated their platforms after the acquisition.

Yeah, that makes a lot of sense. Perhaps last question and coming back a bit to the Nordics. I was just wondering, I mean, you saw the market route yesterday with the AI driven events. I was wondering if you could tell us anything about your customers. positioning into these events, like have you seen the big tech names slash Nasdaq being like a crowded trade among your clients? And I was wondering if it was also involving some increasing leverage on such positions, like for instance, through margin loans, which we've seen the volumes increasing a bit over recent months, or through the use of options or levered certificates, whatever.

Nothing out of the ordinary. I mean, it's no... It's mainly Nvidia that crashed yesterday for natural reasons, but there hasn't been any issues around that. Same as when Nova Nordisk took a hit in Denmark before Christmas. It was also quite okay. Overall, our customers are fairly low risk when it comes to loan-to-value and exposure to big movements. I would say that's okay. I think... This volatility is, of course, short-term very good. Of course, long-term, you still want the markets to be positive. But I don't think this will lead to overall market crash, but a correction in some of the AI stocks.

All right. Thank you very much. Have a good day.

Thank you. Thanks, Niklas. Next question comes from Ian White from Autonomous Research. Ian, please go ahead.

Hi there, thanks for taking my questions. Just a few follow-ups from me, please. First up on the long-term cost growth, setting aside Germany, will we ever get back to mid-single-digit growth? And if the answer to that is no, what is it that marks kind of an enduring change in the rate of cost growth compared to the sort of mid-single digits you were talking about previously? You've given us a fair bit of detail for what's happened in 2025 and a bit in 2026, but... After that, I guess, is interesting. So that's question one. Secondly, just with respect to Germany, will it be necessary to establish a local banking operation or something like that? Basically, does does this expansion present a headwind? from a group capital perspective, sort of over and above the obvious, I guess. Like, is there anything unusual here about having to inject capital into a local subsidiary or something like that that means it's a disproportionate drain on capital? And just the third question, I think there was a similar question earlier, but just in terms of the, I guess, what makes you comfortable given the growth rates that some of the digital platforms are putting up in Germany and how quickly that market is developing, how comfortable are you that your anticipated timeline for becoming significant in that market is kind of viable and appropriate? It strikes me as sort of a profitable growth from 2030 on 100 million of investment means we're talking about quite a small business, even in 2030. And I guess... What makes you comfortable that that's going to work as opposed to needing to go much harder, much faster, either via M&A or much bigger marketing spend, please? Thank you.

Yeah, those are all the questions. The long-term cost to start with that, of course, we don't know. I mean, it might go back to mid-single-digit after the three years now. We just see now that both with the additional market spend in 2025 and some more tech to focus on PBA and pension and funds. That's why it makes sense to be a little bit higher. Can that go back? Yeah, it probably can, but... We don't guide on that long time. This is the coming three, four years. When it comes to the bank in Germany, we're going to export the license we have in Sweden as a branch of the Swedish bank. There's no additional capital requirements. But of course, if you get more customers and more deposits, et cetera, that will, of course, affect leverage ratio a bit. I don't know if you want to comment anything else.

No, I think exactly what you say. It's really just the deposit that would affect the potential of leverage ratio. But that's all within plans. So we have such a strong and solid capital situation. So we will be able to adapt to that if that happens. Yeah.

I think the growth runway in Germany, back to that, I think that's going to be long. Yes, the digital platforms are growing, but they're still at a fairly low level, 5% market share. In Sweden, it's 25% market share for us in Avanza and 10% or around 15% in the other Nordic countries. So I think there is a very long growth runway. And for us also to get in at this stage, make that we can also do this in a sensible way.

Okay, thanks very much.

Thank you so much, Ian. Next question comes from Panos Alinas from Morgan Stanley. Panos, please go ahead.

Yeah, hi, can you hear me?

Yeah.

Yeah, just to follow up on the cost. So the 125 million in marketing, does this include also allocation for Germany on top of what you announced for the German costs?

No, so 125 is for the Nordics. The German marketing cost is in the German cost bucket, so to say.

All right. And then in Germany, I have seen on the slides you're saying you are looking to offer savings accounts as well. Is that like a tool to attract customers similar to Robinhood in the UK or Trade Republic was doing as well?

Yeah, I think it's important to have a savings account with an attractive rate, as we see also in Sweden and partly in other countries. But it's going to be a way to track the deposits to the platform.

And there is a lot of discussion around the pensions in Germany, maybe in the other years. Is this something, I'm thinking from your offerings, you are not offering pensions.

Is this something you can... Yeah, but it's definitely very interesting for us, an optionality, if it's a pension reform in Germany, which it's likely going to be, both moving more from defined benefit and defined contribution, but also potentially have tax incentives for private pension savings savings. So I think it's going to happen things in the pension market in Germany that can benefit us. As you know, we are very strong in pension in the Nordics.

Pension, however, is not included in our base case here.

Exactly. So that would be on top. That's an optionality.

All right, got it. And then on the break event, again, a follow-up question on the break event. So you said 2029, you're looking for a break event. That's on the 100 million cost per year, right?

Yeah, correct.

Okay. So let's say to make 100K revenues, are you expecting like 100,000 clients?

Yeah, I don't comment clients, but it's not for the full 29. It's during 29, it's going to be break evens on a monthly basis. So the full year profitable growth is from 2030.

Because if I look at your, now the closest competitor in Germany, they have half a million clients in Germany. and then book about 3.5 euros per trade so to get to the 100 million you're looking for 3 million trades and i was wondering if you know you you attract the same sort of active trader type of client then you're looking for about 100 000 clients or more by 2029 so that's why i'm

Yeah, but as I said, we don't comment specifically on the numbers, but we try to be in a way rather moderate when we have done the modeling. But we don't really know until we get there.

All right, clear. Thanks so much.

Thanks. Thanks, Panos. Next question comes from Andy Lowe at Citi. Andy, please go ahead.

Thanks, Marcus. Just a couple of follow ups. One, you mentioned about the allocation away from savings accounts into transaction accounts. So I was just curious on your expectations for the investment platform cash as a share of savings, whether that starts to rise in 2025 in your kind of base case. And then I've got a second follow up. So I don't know if you want to answer that one first.

Yeah, I think if you look at the deposit level, we re-guided, as you saw, on the revenue margin from 55 to 45, reflecting a lower share of deposits versus savings capital. We're at 7% today, and it's going to be a lower level. But we're going to grow deposit in absolute terms from a growing customer base and also high net savings. So even though the share is lower than before, the absolute number of deposits will grow. That will give a potential upside to NII.

Got it. Okay, great. And then the point on the sort of bolt-on M&A sort of understands where you're coming from in terms of wanting to sort of build the platform first before you do that. One of your competitors has sort of talked about entering markets via sort of potentially bolt-on M&A, just acquiring a sort of book of deposits and using that to sort of build scale. So do you think that that's a particularly attractive setup in Germany in terms of Maybe the opportunity to buy those types of deposit books, migrate them across. Is that sort of quite central to your growth strategy?

No, not necessarily. I mean, our strategy is organic. If we see a potential, we can do a bolt-on acquisition, but that's not how we build the case. To buy just the positive book, the question, I mean, are those customers even interested in funds and stocks? I don't know. But I think doing acquisitions, we've been successful in doing Greenfield and then doing Bolton afterwards. It's always difficult to do a totally new acquisition in the market and then try to integrate afterwards.

Got it. Thank you.

Thank you.

Thanks, Andy. Okay, we have one last question from Emil Jonsson from DMB, again with a follow-up.

Yeah, thanks. Just a quick follow-up. In the future, do you plan on reporting how much of the quarterly OPEX is attributable to Germany? Yes, that's the plan.

Yeah. So we're probably going to have some breakout of Germany like we have for the other countries.

All right.

Thanks.

Great. That was all the questions we have. So... Thank you so much for showing interest in NodeNet. If you have any follow-up questions, you can reach out to me. So thank you so much and have a good day. Goodbye, everybody.

Bye-bye. Thanks, everyone. Bye.