Company presentation
January 2020
Sweden's leading platform for savings and investments
- Founded in 1999
- Most satisfied savings customers in Sweden for 11 consecutive years
- 1,280,300 customers
- SEK 571 bn in savings capital
- 502 employees
- 5.4% market share of the Swedish savings market
2
Customer satisfaction and employee engagement create shareholder value over time
Long-term targets
- Customer satisfaction & Employee engagement
- Growth in customers and savings capital
- Scalability and cost efficiencies (top modern
IT platform)
Growth potential
- Occupational pension business
- Focus on broader customer groups
- Strong potential in existing customer base
Customer proposition
- Cheaper, better and simpler offering
- High user experience
- Broad range of product
- Information, education and decision-making tools
Revenues and costs
- More stable revenues through funds and
mortgages- High scalability
- Cost control vital
3
High customer satisfaction | • | Price leadership |
• | Wide range of products | |
Creating a better future for millions of people | • | Decision-making tools |
• | Best customer service | |
and user experience |
Customer promise - more to you, less to the bank
To give our customers a better return on their savings than any other bank or pension company, due to low fees, better tools and education
4
Growth strategy built on scale
1. Growth in savings capital
- Customer satisfaction
- Customer growth
-
Innovation and user
experience• Net inflow
1. Savings capital
2. Revenues/savings capital
3. Costs/savings capital
5
2. Revenues/savings capital
- No fixed fees
- Revenues mainly based on transaction fees, net interest income (NII) and distribution fees from mutual funds
- NII and transaction revenues tend to be inversely correlated
3. Costs/savings capital
- Mainly fixed costs, tight cost control
- High scalability
- Long-termaim to reach a cost/savings capital of 16 bps
Leading cost position
160 | 600 000 | ||
142 | |||
140 | 500 000 | ||
120 | |||
points | 100 | 400 000 | |
Basis | 80 | 73 | 300 000 |
capital, SEK m
60
40
20
51 200 000
100 000
17
Savings
0 | 0 | ||||||||||||||||||||
2004 | 2005 | 2006 | 2007 | 2008 | 2009 | 2010 | 2011 | 2012 | 2013 | 2014 | 2015 | 2016 | 2017 | 2018 | 2019 | 2020 | |||||
9M | |||||||||||||||||||||
Savings capital | Income/savings capital | Cost/savings capital | |||||||||||||||||||
In 2018, cost/savings capital exclude the Swedish Financial Supervisory Authority's administrative fee of SEK 35 million on | |
6 | Försäkringsaktiebolaget Avanza Pension. |
A history of growth built on innovation
7
In-house development by 24 teams
Customer journey
Activate | Follow | Find & | Design | Trans- |
& | get help | system | ferring | |
Improve | funds |
Products
Interest | Funds | Trading | Trading | Endow- | Pension | Mort- |
data & | ||||||
rate | ment | gages | ||||
Decision- | ||||||
insurance | ||||||
support | ||||||
tools | ||||||
Business platform | ||||||
BO | Become a | Being a | Cash | Pension | ||
trans- | customer | customer | platform | |||
formation | ||||||
Technical platform | ||||||
User | Data | Delivery | Open | Trading | Service | Perfor- |
interface | platform | platform | banking | Platform | platform | mance |
platform | testing |
Launches to make Avanza more relevant for a broader audience
9
Customer value with real open banking
10
Largest Swedish participant in stock market transactions on Nasdaq OMX and First North
Market share, %
25,0
20,0
15,0
10,0
5,0
0,0
Transactions
Turnover | ||||||
10,0 | ||||||
9,0 | ||||||
% | 8,0 | |||||
share, | 7,0 | |||||
6,0 | ||||||
Market | 5,0 | |||||
4,0 | ||||||
3,0 | ||||||
2,0 | ||||||
Q1-15Q2-15Q3-15Q4-15Q1-16Q2-16Q3-16Q4-16Q1-17Q2-17Q3-17Q4-17Q1-18Q2-18Q3-18Q4-18Q1-19Q2-19Q3-19Q4-19Q1-20Q2-20Q3-20Q4-20 | 1,0 | 15-Q2 | 15-Q315-Q416-Q116-Q216-Q316-Q417-Q1 | 17-Q217-Q317-Q418-Q118-Q218-Q318-Q419-Q119-Q219-Q319-Q420-Q120-Q2 | 20-Q320-Q4 | |
15-Q1 | ||||||
0,0 |
- Market share of 18.3% in terms of transactions and 8.4% in turnover in Q4 2020
11
Customer growth drives net inflow
New customers
- 000
- 000
- 000
- 000
- 000
- 000
- 000
- 000
- 000
-
000
0
25 000
2020: | ||||
Customers: +303,900 | ||||
Net inflow: 76,300 | 20 000 | |||
2017: | 2019: | m | ||
Customers: +140,000 | Customers: +139,300 | |||
Net inflow: 26,800 | Net inflow: 32,600 | SEK | ||
2016: | 2018: | 15 000 | ||
Customers: +103,000 | ||||
Net inflow: 26,500 | Customers: +126,500 | inflow, | ||
2015: | Net inflow: 27,600 | |||
Customers: +96,400 | ||||
Net inflow: 25,200 | ||||
2014: | 10 000 | Net |
Customers: +54,700
Net inflow: 20,100
2013:
Customers: +33,000
Net inflow: 10,900
5 000
0
12 | Customer inflow | Net inflow | ||
Age distribution among new customers
Share, %
4,00
3,50
3,00
2,50
2,00
1,50
1,00
0,50
0,00
13
2020
2012
2007
0 3 6 9 12 15 18 21 24 27 30 33 36 39 42 45 48 51 54 57 60 63 66 69 72 75 78 81 84 87 90 93 96 99 Age
Strong long-term potential in existing customer base
Market penetration
Customers, %
4,0% | 1,60 | ||||||
3,5% | 1,40 | ||||||
3,0% | 1,20 m | ||||||
2,5% | 1,00 | SEK | |||||
capital, | |||||||
2,0% | 0,80 | ||||||
Savings | |||||||
1,0% | 0,40 | ||||||
1,5% | 0,60 | ||||||
0,5% | 0,20 | ||||||
0,0% | 0,00 | ||||||
0 | 3 | 6 | 9 | 12 15 18 21 24 27 30 33 36 39 42 45 48 51 54 57 60 63 66 69 72 75 78 | |||
Age | |||||||
Savings capital by age | Total customer base | Age distribution among new customers |
14
- Total share of Swedish savings market: 5.4% as of Q3 2020
- Total share of Swedish population: 9.1% as of 1 November 2020
- ages 20-29: 20.8%
- ages 30-39: 22.1%
- ages 40-49: 16.5%
- Highest penetration in urban areas. Stockholm region, snapshot (Women/Men) as of 1 November 2020:
- ages 20-29: 21%/31%
- ages 30-39: 24%/34%
- ages 40-49: 18%/27%
- ages 50-59: 15%/20%
- ages 60-69: 11%/15%
Savings capital grow by number of years at Avanza
Savings capital, SEK
- 000
- 000
- 000
- 000
- 000
- 000
-
000
0
1 month 1 year 2 years 3 years 4 years 5 years 6 years 7 years 8 years 9 years 10 years
Average savings capital per customer (excluding customers with > SEK 10m in savings capital)
15
Significant growth potential with a 5.4% market share of the Swedish savings market
• The Swedish savings market SEK 9,547 bn
• Annual market growth of on average 9% last ten years
• An estimated 80% of the Swedish population saves in funds and 11% own shares
The white circles refer to Avanza's share of each savings area.
- An estimated 50% of the market is addressable for Avanza when collectively agreed pensions are excluded.
16
Market share of 19.4% rolling 12M of net savings on the Swedish savings market
Long-term target by 2025 of at least 15%
17
Growth potential in broader customer groups
Knowledge & time
Invest Trade
Save | Gamble |
Begin
Interest | ||
Do it for me | Help me do it | Do it myself |
18
Strategy for more recurring income
Share of total income
60%
50%
40%
30%
20%
10%
0% | |||||||||||
2012 | 2013 | 2014 | 2015 | 2016 | 2017 | 2018 | 2019 | ||||
Net brokerage income | Fund commissions | ||||||||||
Net interest income | Other commission income | ||||||||||
19
Strong growth in occupational pension
30 000 | ||||||||||||||
25 000 | ||||||||||||||
SEK | ||||||||||||||
capital, | 20 000 | |||||||||||||
Savings | 15 000 | |||||||||||||
10 000 | ||||||||||||||
5 000 | ||||||||||||||
0 | ||||||||||||||
2006 | 2007 | 2008 | 2009 | 2010 | 2011 | 2012 | 2013 | 2014 | 2015 | 2016 | 2017 | 2018 | 2019 | |
20 |
Growth drivers in the Swedish savings market
- Digitisation and open banking create new needs and customer behaviours
- More reasons for customers to take responsibility for their own savings
- Increased focus on sustainable investments
- Our focus is on attracting new and broader customer groups as well as keeping current customers happy
- Product innovation and evolution
- User experience increasingly important
- Price remains important
21
As always… key success factors for Avanza
- Customer satisfaction - keep the No 1 position
- Continuous growth in both number of customers and volume
- Create possibilities for continued strong innovation
Employee engagement key
22
Appendix
Operations | 24-26 |
Financials | 27-35 |
Balance sheet data | 36-38 |
Contact details | 39 |
23
Performance on targets 2019
Long-term targets | Outcome 2019 | Comments |
Sweden's most satisfied savers | √ | Achieved in 2019 for the tenth consecutive year |
according to Swedish Quality Index | ||
Engaged employees, eNPS of at | 54 | Very strong ambassadorship |
least 45 | ||
Market share of at least 10% R 12M | 15.6% | |
of the total net inflow to the | ||
Swedish savings market | ||
1 million customers 2020 | 976,400 | Target achieved in January 2020 |
Cost growth should not outpace | Income growth 13,8% | |
income growth | √ | Cost growth 10,6%, excluding fee and one-off write |
down | ||
Dividend of at least 70% of net | 79% | Dividend SEK 2.30 per share |
profit for the year | ||
24
New long-term targets by 2025
The new targets are still focused on customer satisfaction and employee engagement, but also on growth in savings capital. Targets connected to sustainability are added
Satisfied customers:
- Sweden's most satisfied savers according to SQI's (Swedish Quality Index) annual award
Engaged employees:
- eNPS (Employee Net Promoter Score) of at least 45
Long-term value growth:
- Market share of at least 15 per cent of the total net inflow to the Swedish savings market 2025
- Market share of nearly 7 per cent of the Swedish savings market by the end of 2025
- Return on equity of 25-30 per cent
- Dividend of at least 70 per cent of the profit of the year
Sustainability:
- Increased share of capital in sustainable investments
- Increased share of customers who save in sustainable alternatives
- Be regarded as the leading sustainable brand and the natural choice for sustainable savings
- Increase the share of female to 50 per cent of new customers
- Organisation with parity between women and men
• Become climate positive
26
inflow Customer
Jan-14
Apr-14
Jul-14
Oct-14
Jan-15
Apr-15
Jul-15
Oct-15
Jan-16
Apr-16
Jul-16
Oct-16
Jan-17
Apr-17
Jul-17
Oct-17
Jan-18
Apr-18
Jul-18
Oct-18
Jan-19
Apr-19
Jul-19
Oct-19
Jan-20
Apr-20
Jul-20
Okt-20
Number of customers | Customer | |||||||||||||||||
0 | 000 5 | 000 10 | 000 15 | 000 20 | 000 25 | 000 30 | 000 35 | 000 40 | ||||||||||
Y/Y) (+118% 2020 in 303,900 of inflow | ||||||||||||||||||
Net inflow of SEK 76,300m in 2020 (+134% Y/Y)
Net inflow, SEK m
- 000
- 000
- 000
- 000
-
000
0
-2 000
14-Jan14-Apr14-Jul14-Oct15-Jan15-Apr15-Jul15-Oct16-Jan16-Apr16-Jul16-Oct17-Jan17-Apr17-Jul17-Oct18-Jan18-Apr18-Jul18-Oct19-Jan19-Apr19-Jul19-Oct20-Jan20-Apr20-Jul20-Okt Net inflow
- Net outflow in November 2017 is explained by a few withdrawals amounting to SEK 2,200m, connected to customers' M&A activities.
27
Financial overview
Q3 20 | Q2 20 | ∆ % | Q3 19 | ∆ % | |
Operating income, SEK m | 575 | 526 | 9 | 313 | 84 |
Operating expenses, SEK m | -177 | -185 | -4 | -148 | 19 |
Operating profit, SEK m | 396 | 333 | 19 | 163 | 144 |
Operating margin, % | 69 | 63 | 6 | 52 | 17 |
Income to savings capital ratio, % | 0.48 | 0.52 | -0.04 | 0.34 | 0.14 |
Costs to savings capital ratio, % | 0.15 | 0.18 | -0.03 | 0.16 | -0.01 |
ROE, % | 55 | 56 | -1 | 33 | 23 |
EPS, SEK | 2.15 | 1.83 | 18 | 0.91 | 137 |
28
Relationship between long-term savings capital growth and revenue growth
Revenue, SEK m
700
600
500
400
300
200
100
0
Savings capital Q3 2020: SEK 514 bn (+36 % Y/Y)
Q3 2020
2012-Q3 2020 Corel=0.88
0 | 100 000 | 200 000 | 300 000 | 400 000 | 500 000 | 600 000 |
Savings capital, SEK m
29
Long-term revenue development
Revenue, SEK m
- 400
- 200
-
000
800
600
400
200
0
2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019
5,0
4,0
3,0
2,0
1,0
0,0
-1,0
Average repo rate, %
Total income | Net brokerage income | Income from mutual funds | ||||
30 | Net interest income | Other income | Average repo rate | |||
Historical correlation between low market rates and growth
Net inflow, SEK m
25000
20000
15000
10000
5000
0
Q1-03Q3-03Q1-04Q3-04Q1-05Q3-05Q1-06Q3-06Q1-07Q3-07Q1-08Q3-08Q1-09Q3-09Q1-10Q3-10Q1-11Q3-11 | Q1-12Q3-12Q1-13Q3-13Q1-14Q3-14Q1-15Q3-15Q1-16Q3-16Q1-17Q3-17Q1-18Q3-18Q1-19Q3-19Q1-20Q3-20 | ||||
Net inflow | Repo rate | ||||
5,0
4,0
3,0
2,0
1,0
0,0
-1,0
Repo rate, %
- Historical negative repo rate between 2015 and 2019. Repo rate raised to 0.00% on 8 January 2020
- Low repo rate creates a good growth environment but puts pressure on NII (100 bps repo rate change affects NII by around SEK 400 m at Q3-20 volumes)
31
Revenue development
Revenue, SEK m
700
600 | 575 |
542 526
500
400 | |||||||||||
313 | 329 | ||||||||||
300 | 244 | 234 | 227 | 271 | 271 | 244 | 267 | 267 | 268 | 284 | |
200 | |||||||||||
100
0
Q1-17Q2-17Q3-17Q4-17Q1-18Q2-18Q3-18Q4-18Q1-19Q2-19Q3-19Q4-19Q1-20Q2-20Q3-20
Total income | Net brokerage income | Income from mutual funds | ||
Net interest income | Other commission income | |||
32
Income split 9M 2020
SEK m | % of | % of specific | % of total | |
income | savings capital | savings capital | ||
Shares, bonds, options | 811 | 49 | 0.45 | 0.25 |
(transactions) | ||||
Mutual funds | 293 | 18 | 0.34 | 0.09 |
Net interest income | 211 | 13 | 0.37 | 0.06 |
Other** | 328 | 20 | 0.10 | |
Total | 1,643 | 100 | 0.51 | 0.51 |
- Based on deposits
-
Corporate finance fees, foreign exchange, AZA Markets, subscription and advertising income, additional services
Please note that income related to savings account+ has been transferred from NII to Other commission income. Historical figures have been adjusted
33
Cost development
Operating expenses, SEK m
200
180
160
140
120
100
80
60
40
20
0
8 | |||||||
35 | 179 | 179 | 185 | ||||
177 | |||||||
157 | 164 | 166 | |||||
152 | 153 | 155 | 148 | ||||
131 | 135 | ||||||
124 | 123 | ||||||
Q1-17Q2-17Q3-17Q4-17Q1-18Q2-18Q3-18Q4-18Q1-19Q2-19Q3-19Q4-19Q1-20Q2-20Q3-20
Total expenses | Non-reccuring items | Personnel | Marketing | Depreciation | Other expenses | ||||
Q4 | 2018 including the Swedish Financial Supervisory Authority's administrative fee of SEK 35 million on the subsidiary Försäkringsaktiebolaget Avanza Pension | |
34 | Q4 | 2019 including one-offwrite-down of SEK 8.3 million |
Costs 9M 2020
SEK m | % of total | % of total | |
costs | income | ||
Personnel | -334 | 62 | 20 |
IT | -60 | 11 | 4 |
External services | -24 | 4 | 1 |
Marketing & Sales | -17 | 3 | 1 |
Depreciation | -50 | 9 | 3 |
Other | -56 | 10 | 3 |
Total costs before credit losses | -541 | 100 | 33 |
Credit losses, net | -5 | ||
Profit/loss from participations in | -6 | ||
associated companies | |||
35
Operating margin of 69% in Q3 2020
Operating profit, SEK m
450
400
350
300
250
200
150
100
50
0
396
361
333
163 | |||||||
121 | 120 | 132 | 140 | ||||
114 | 117 | ||||||
103 | 104 | 90 | 100 | ||||
76 | |||||||
Q1-17Q2-17Q3-17Q4-17Q1-18Q2-18Q3-18Q4-18Q1-19Q2-19Q3-19Q4-19Q1-20Q2-20Q3-20
Operating profit | Operating margin | |
100
90 | |
80 | |
70 | % |
60 | margin, |
50 | Operating |
40 | |
30
20
10
0
Operating profit in Q4 2018 is affected negatively by the Swedish Financial Supervisory Authority's administrative fee of SEK 35 million on the | |
36 | subsidiary Försäkringsaktiebolaget Avanza Pension. |
Balance sheet, 30 September 2020
Assets | SEK m | Liabilities & equity | SEK m |
Lending to credit | 2,654 | Deposits | 44,421 |
institutions* | |||
Lending to the | 16,226 | Liabilities in insurance | 143,312 |
public | operations | ||
Bonds | 25,631 | Other liabilities | 1,230 |
Assets in insurance | 143,310 | Subordinated liabilities | 100 |
operations | |||
Other assets | 3,857 | Equity | 2,616 |
Total assets | 191,678 | Total liabilities and equity | 191,678 |
Comments
- Mainly self-financed through shareholders' equity and customer deposits
- Surplus-liquidityof SEK 29,806m invested in covered bonds, at the Riksbank and O/N (including SEK 1,521m deposits in client fund accounts)
* Incl. balances at central banks and treasury bills eligible for refinancing
37
Capital surplus for the Group
SEK m | 30 September 2020 |
Shareholders' equity | 2,616 |
Solvency capital | 1,585 |
Less non-distributable solvency capital | -304 |
Subordinated loan | 69 |
Additional value adjustments | -8 |
Intangible assets and deferred tax receivables | -75 |
Own funds before dividend adjustment | 3,882 |
Capital requirement Pillar 1 | -1,921 |
Buffer requirement | -197 |
Capital requirement Pillar 2 | -123 |
Capital requirement | 2,241 |
Capital surplus before dividend | 1,641 |
Capital surplus per share, SEK | 10.59 |
Total capital ratio (consolidated situation), % | 18.7 |
38
2021-01-07
Historical financial key data
2001 - Q3 2020
is available in Excel at:
avanza.se/keydata
sofia.svavar@avanza.se
+46 8-409 420 17