Nordnet AB (publ)

Good morning everyone and welcome to the presentation of Notenet's fourth quarter of 2024. My name is Marcus Lindberg and I'm the Head of Investor Relations at Notenet. With me today I have our CEO Lars-Oke Noling and our CFO Lennart Krän. Lars-Oke 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. Then when we come to the Q&A session, you'll 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-Oke, please go ahead. Thank you Marcus.

We can go to the next slide. So some of the highlights for the quarter is revenue and profit record levels both in the quarter and for the full year. We see the highest customer growth and 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. Also very successful launch of the Danish Livrente pension product. And we also announced that we aim to launch our fifth market Germany in 2022-2026. OPEX is .7% for the year but that includes 10 million SEX also investment for preparation in Germany. So excluding that is .8% so close to our guidance. Mediantarget is also updated. We'll go through those and propose dividend of 8.10 SEC up from 7.2 last year. Looking at some of the numbers for the quarter, very strong customer growth, 14% -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 one trillion SEC in savings capital on the platform during the quarter. Also strong trades up 14% from the 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 -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, the underlying 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. Go to next. So a little bit the full year, of course, customer savings capital is same. Number of trades for the full year is up 8%. Also began reflecting a growing customer base. Revenues is up 12%. What we see flat -on-year net interest income for the full year but a good growth in the fund and the trading business. Expenses for the full year, 12% including marketing and .7% excluding extra marketing but then including 10 million SEC also investment in pre-study for Germany. So underlying is .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 and net savings during 2024. Customers almost quarter million, new customers 350,000, new customers versus last year 150,000. And net savings was double versus last year or 2023, 73 billion versus 35 billion. 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. And we see also down to the right that share of cross 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 of cross border trading from country mix. So we see the customers outside of Sweden trade more cross border. But also of course reflecting a strong US market during 2024. Looking at our fund business. So 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. And that's more than half of the customers also run 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, funds mainly by the Nordnet funds where we have a higher margin. But reflecting the full net buy 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 and a snapshot for the year starting with the liquidity portfolio. We see an estimate of 1.25 billion in 2025, assuming that there are quarter four volumes, currency allocation and also the market rates or consensus rates on the Iber 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 portfolio is increasing from 43 to 47 billion. That's reflecting the selling of the personal loan business. Go to next. Looking at the loan snapshot is 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 Iber rates with the pass through of margin lending of 50 percent of mortgage, 100 percent. 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 percent depending on country and mortgage 45 percent. And credit losses is going to be on very low levels in the coming quarters or coming years after we sold them the personal loans portfolio. Also looking at the margins, especially on margin lending, which is a growing product. We found stable margins in spite of lowering some of the bank rates. Go to next. Looking at the deposit snapshot, the cost for deposits is going to be around 400 million second, 25 again, assuming quarter four volumes and a high 100 percent pass through of the Iber rates. But also here say that we probably have an upside from that amount of the savings account. 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 percent per year since 19. Costs has only been growing 6 percent per year. So basically we get almost an entire increase in 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 leave-rent the product. I'm going to talk a little bit more on that next slide. But also a lot of sorry, go back. So 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 got to the next a little bit start on the leave-rent. As you know, we talked about that before the leave-rent launch enables a two trillion SEC market for us. And the start has been good. It's run 1,600 customers that signed up for leave-rent. 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. A savings capital on our platform already. But strong start and continuous strong development. We also launched our new brand concept, the Joy of Savings. We also launched some more fund savings in stocks and funds. And here we position savings versus shopping in a playful way. 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 the normal 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 percent and a total capital ratio of 24.3 percent. 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 we're going to go through a little bit of the rationale. So Germany is a very large and growing savings markets. It's twice the addressable market compared to the full Nordics. And we also made a market study that shows that what the German savings 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 live rental launch. Historically, we've been running one big product development per year. And so that we now continue with public Germany. So open in Germany, we'll secure the additional long-term growth and diversification of the business again to limited investments. That allows us also, of course, to continue to focus on the good growth from where we have in the Nordics. 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 of 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 and funds. So it's a development 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 addressable market is 38 trillion SEK. If you look at the fund and brokerage part of it, it's 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 we also see that the platforms hold around 5% market share in Germany, but are growing rapidly. Again, compared to the Nordics, the market share in Sweden is 25% and 10 to 15% in the other countries. So pretty long growth, wrong way there. Also potential with future pension reform, going from defined benefit to defined contribution and possible tax incentive for pension savings. Again, the addressable market more than twice or two and a half times as big as the Nordics. And Nordic here have included also the leave rent in the market. So long runway for growth. And so 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 low and transparent price. And of course, with the 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, our 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, and also our ETF offering. ETF is a popular savings form in Germany. Pension, nothing's going up 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 markets. And mortgage will not be in scope and savings account is going to be an important driver in that savings where we're going to have attractive rates. Next. So we utilize of course, our multi-country platform. We do this in an organization that already support multi-countries. And we do this with a limited investment. Investment in 2025 is going to be 60 million and ramp up to around 100 million SEC per year from 2028. What we focus on this year is of course, to establish a branch, recruit staff, passport license and start doing full blown tech development. And we're going to continue with tech development in 2026, finalize the go to market offering and then launch in 2022-2026. And we have a growth phase then up to 2029, but we estimate critical mass of customers and break even sometime during 2029. So have a profit of growth from 2030 and going forward. So in summary, then large investment markets extends 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 high marketing spend, but also launching Germany. Average savings capital customer from 420,000 to 500,000 reflecting both strong development in 2024, both net savings and savings capital. But also that we foresee a stronger 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, but we foresee a lower level than historic levels. And we have a higher margin on deposits than trading and funds. And operating expenses, we are just 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 80 years, it's more product and tech to deliver on our strategic initiatives like public banking and pension. But this is excluding Germany. So 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 focus areas, of course, laid the groundwork for launch of Nonnet Germany. Realize the full potential of the deliverable product and continue our focus on the fund and pension business and continue the strong net flows we see in those businesses today. Also continue to enhance a high end offering for private banking 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 US. We will continue the rollout of the new brand concepts in both print media, TV and media. And ramping up then we had 45 million spend in marketing in 2023, 100 million in 2024. And we will have 125 million spend in 2025. So the full extended marketing spend that we announced in January last year. And of course, we maintain focus on online cost, people's automation and our scalable tech platform. So without the handover 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 to the Q&A button. So first off, we'll take the question from Emil Jonsson at DNB. Please go ahead.

Thank you. 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 flat 60 euro, for example? Do you think you'll need to be cheaper than incumbents? How do you view this?

Yeah, I see. 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 often rather complex on pricing. Not really up to par on customer service and also not always having the breadth on the product offering.

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, so 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 matured resource increase rather rapidly in Germany, not least in the younger population. Same as a savings culture, countries, stocks and funds. Of course, we will really tend to do as digital 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, it has the market, the growth, the savings culture, the maturity of it. How many customers aren't 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 digital 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. We started our pre-study on a new country before Avanza announced their ambition to expand outside of Sweden. So it's more being related to, you know, we want to be one stop shopping in Nordics. And when it comes to the main products, we are there now with the leave-rente launch. When we saw that we were going to launch a leave-rente during the last fall, we started looking what should we do next. And actually thing is to open a new country. Leave-rente 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 one stop shopping in Nordics. And we normally do one big, really big product 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 leave-rente. 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 .1% of total savings capital still. If you look at what this could become in, say, three years, do you think, let's say, 10 billion would be an easier or difficult level to hit?

Yeah, but I'd say I mean, we have 5% market share of the Raterpassion market today. So I would say that we could reach around 5% market share also in leave-rente as well. And that will of course ramp up net savings. Right now we have closer to two months around 1.2 billion. So hopefully we can ramp up to be definitely a higher number on a yearly basis.

All right. Thank you very much.

Thank you, Emil. The next question comes from Jakob Heslevik at 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 replatformed, as you know as well. So we have a totally different scalability in our business today, thereby enabling shorter time to profitability. Of course, there's always some uncertainty on this. This is based on the assumption on customer growth and net savings and activity. But we've 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 a 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 to establish first.

Okay, so it's not a bolt-on acquisition that will take you into Germany? No, no, no. So we do

a green field first and then that can allow for a future bolt-on acquisitions.

Perfect. And if we move over to your updated financial targets, what do you mean with median term? Which year are you aiming to have 500k in savings up to the client?

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. You look to be really close. But if you now also hike customer growth target, you're about into 15%. I mean, they're not really going to bring in 500k per client. I know it.

But again, with the market development and net savings, it should be possible. And you know, we had 40% growth last year.

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 30 to 15%, does that include Germany?

Yeah, it includes Germany. But of course, in the first year series, it's not going to be a big contribution since we're not going to launch on to H2 2026. So the main reason why we pull up the guidance now is the increased marketing spend. We have the ambition with increased spend that we should move up into the upper range of the customer growth. And we also see that we are now. So that ambition will 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 Patrick. Please go ahead,

Patrick. 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 re-enter? Yeah,

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. And we didn't have the one stop shop. We didn't have the experience the customer expected. And we needed to do full platforming as well. So I think it was the right choice to exit Germany and 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 aimed 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 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 the cost side of it. We guide very clearly on that. And the upside is of course the revenue.

OK, 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? How do you view that?

Yeah, of course, we've done extensive market study on of course, as well pricing. So we have ideas how to price. I can comment that here. And what's given too much away, but but it is very clear that the pricing on not least brokerage is very complex. I think there are things to do there, but we'll see when we launch.

OK, fair enough. And then talking about just Sweden, because moving away from 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 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 sale of a personal loans business, it will go 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 pension. 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, Patrick. Next question comes from Edmund Kirch 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 the savings capital breakeven or what kind of revenue margin do you expect in Germany? 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, et cetera, per se. But we of course, looking at the payment for order flow. But we don't see that as really transparent pricing because as customers you need to pay a lot on the spread and liquidity is not really there on some of those markets. But again, overall, the pricing is fairly complex on brokerage. I think we can do things there. Also the PFOS regime in Germany is the only country where there is an exception on PFOS 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 PFOS is fully prevented, it's going to be good for the customer.

And did you have any savings capital breakeven 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 net 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 we 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 hand, we try to have the direct German cost in the German bucket. So 60 million in 2022, 35, the ramping up. So what we got a little bit higher in our 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 of want to have more product and tech teams, even though we're one stop shop, 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 to go in market and we have a lot of potential both in private banking, in pension, in funds, etc.

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 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 the Nordics, but we don't need to do those really big private development like Livränte, 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's 14%, partly of course due to strong market. But I think partly due to even though we launched a full marketing campaign end of last year, but we still did the tactical marketing on a high level during the year, which paid off. So 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 in 2025. So of course we see some positive signs as well. Thank you.

Thanks, Adamin. Next question comes from Eliko Bosoni from JP Morgan. Please go ahead, Eliko.

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 appreciate maybe it's not just in Germany, but it would be interesting to know what sort of customer number you expect by then. So maybe that's my first question.

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 don't 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.

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 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 it's a fair share of the spend, not least in the other years, it's 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 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 Sweden? And can you give us some extra color? You mentioned that some of the additional costs would be 90. I mean, the facts. I'm just trying to understand whether this is a defensive move or actually is a way to. I think it's

a forward leaning move. But to be clear, this year, 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 with the areas of private banking, pension and fund.

Thank you.

OK, great. Thanks, Eric. Next question comes from Nicholas from BMP Paribas exam. Let's go ahead.

Can you hear me? Yes. Good morning. Thank you very much for taking my question. The first one for me would be on Germany. A little bit of follow up from the 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 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 new country through M&A, particularly given that you're actually well capitalized?

Yeah, I think our track record is that we're really good at green field and then do involved on acquisitions, starting in operations and then do potential acquisitions like we've done in Norway and Finland and Portland, 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 unit as separate entities for quite a long time. So it's hard to see the synergy case there as well. And you can see Flatix De Jiro, 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 you've 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 increase in leverage on such positions like, for instance, on 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. Nothing out of the ordinary. I mean, there's no, there's mainly Nvidia that crashed yesterday for natural reasons. But it hasn't been an issue around that. Same as when Novo Nordics took a hit in Denmark before Christmas. It was also quite okay. So 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 25 and a bit in 26. 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, 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. I mean, we're talking about quite a small business even in 2030. And I guess, you know, 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, that was all the questions. The long term cost to start with that. Yeah, of course we don't know. I mean, it might go back to mid-single digits 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 PB 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 go on that long time. I mean, it's a 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 we get more customers, more deposits, etc., that will of course affect the negotiation a bit. I don't know if you want to comment on anything else there, Lennart?

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 plan. So we have such a strong and solid capital situation. So we will be able to adapt to that if that happens.

I think the growth runway in Germany, back to that, I think that 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 advance 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.

OK, thanks very much.

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

Hi, can you hear me?

Yes.

Just to follow up on the cost, so the 125 million in marketing, does this include location for Germany on top of what you announced for the German costs?

No, so 125 is for the Nordics. So 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 offering, you are looking to offer savings and counts 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 savings accounts at an attractive rate, as you see also in Sweden and partly in the other countries. But it's going to be a way to track the deposits to the platform.

OK, and there's 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. I think it's going to be an optionality if it's a pension reform in Germany, which it's likely going to be both moving more from defined benefit to defined contribution, but also potentially have tax incentives for private pension 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. That's an

optionality.

And then on the break event, again, a follow up question on the break event. So you said in 2019 you're looking for a break event.

That's on

the 100 million cost per year,

right? Yeah, correct.

OK, so let's say too many 100k revenues. Are you expecting like 100,000 clients? I

don't comment on the client, but it's not for the full 2019. It's due in 2019. It's going to be a break event on a monthly basis. So the full year profit growth is from 2030.

Because if I look at your, now the closest competitor in Germany, Fladex DeGiro, right? They have half a million clients in Germany and they 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 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

here. Yeah, but as I said, we don't comment specifically on the numbers, but we try to be anyway 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 really guide as you saw on the revenue margin from 55 to 45, they're reflecting a lower share of deposits versus savings capital. We have 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?

Not necessarily. I mean, our strategy is organic. If we get to see potential, we can do a bolt on acquisition, but that's not how we build the case. To buy a deposit book, the question where 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 bolt on 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 D&B 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 optics is attributable to Germany? Yes, that's the plan.

Yeah, so we're probably going to have some break out 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.

Bye.

Thanks, everyone. Bye.