SaveLend

Q2 - 1 April - 30 June 2023
Amounts in parentheses refer to the same period the previous year.

• Net revenue for the period was MSEK 40.5 (35.0).
• Adjusted EBITDA was MSEK 1.4 (-6.8).
• EBITDA was MSEK 1.4 (-6.9).
• EBIT was MSEK -4.5 (-12.0).
• Net result was MSEK -4.6 (-12.2).
• Earnings per share before dilution were SEK -0.09 (-0.24).

Period 1 January - 30 June 2023

• Net revenue for the period was MSEK 85.0 (64.8).
• Adjusted EBITDA was MSEK 5.9 (-9.8).
• EBITDA was MSEK 5.9 (-10.6).
• EBIT was MSEK-5.6 (-20.1).
• Net result was MSEK -5.8 (-20.4).
• Earnings per share before dilution were SEK -0.11 (-0.41).

Events during the quarter 1 April - 30 June 2023

• SaveLend Group acquires Lendify, the P2P lending business of Lunar Bank A/S.
• On April 19th, the annual general meeting of SaveLend Group AB was held.
• SaveLend Group introduces savings strategies on the investment platform.
• The acquisition of Lendify by SaveLend Group is approved by the Danish Financial Supervisory Authority (Finanstilsynet).
• SaveLend Group has successfully completed the migration of Lendify.

CEO COMMENTS
We keep delivering positive yields to our savers regardless of the market climate. Building customer value for the long term, we are continuing the company’s journey towards profitable growth. This quarter we successfully migrated the Lendify acquisition in record time and already experienced a positive impact on the bottom line. We have also implemented a series of changes to our products to support continued positive net returns in a constantly changing world.

SaveLend was founded on the idea of offering savings products to customers that provide attractive yield opportunities regardless of market conditions. In the current high interest conditions, which seemingly will remain with us a while, we think it natural to make changes to hone our product offering.

We previously implemented changes such as transferring NPL portfolios, launching SaveLend Flex, enabling investment in consumer credit with 100% resale agreements, and more. We have communicated the reduced contribution from NPL portfolios in previous reports. Additionally, we carried out changes this quarter regarding consumer credit since we chose to significantly raise the requirements for our internally brokered consumer credit offering. This change brought somewhat lower earning potential in the short term, but greater potential over time. In other words, this was the right choice for both our savers and ourselves. The change was made based on greater demand from our savers for investment opportunities with lower risk as market conditions at the time increased concern for credit losses. Revenue was also impacted as we did not manage to reach our target volumes for real estate lending.

The quarter also saw us complete the Lendify acquisition and migrate those investors in record time. Migrating investors to our platform followed our practiced procedures, but this was the first time we also migrated borrowers with their existing terms and conditions. Despite having an extremely tight deadline, the organization delivered on this complicated migration – a performance I am tremendously proud of.

This acquisition has already had a positive impact on both EBIT and cash flow. And, with the capital from the Lendify investors, we leave the quarter with the highest liquidity the company has had available on the savings platform. One of our highest priorities is to activate this capital, which will be accomplished by concentrating on two areas:

• Launching manual investment in real estate lending. We have seen a growing interest in investing in property projects, especially among active investors. They want more accessible information and to decide for themselves how to allocate their capital to credit and counterparty. We have started product development to enable this demand and plan for a launch in fall. Additionally, this creates opportunities to attract new customers and new capital by marketing specific cases.
  
• We have launched our two savings strategies – Balanced and Yield. This means facilitated onboarding, fewer clicks, and simpler choices. This has brought a good response, and according to the initial yield statistics, the strategies perform well within the range of the communicated target yield, with a low dispersion among portfolios.

Looking to the entire platform, we delivered an average yield of 7.74% after credit losses and fees. Credit losses amounted to 2.99% for the rolling 12 months up to the quarter-end.

Stronger management team for Billecta
We have added to the Billecta management team with Magnus Åkerblom-Wiker taking on the role of COO starting on September 1. Magnus has significant experience in the tech sector holding several senior roles in companies like Stripe, Google and Rocker. I am convinced he will contribute to further elevate Billecta and fine-tune the machinery that will take us to the next level.

Financial position
Revenue for the quarter came to MSEK 40.5 with an EBITDA of MSEK 1.4 and positive cash flow from operating activities of MSEK 2.8. We thereby continue to deliver positive EBITDA and for the second consecutive quarter, a positive operating cash flow.

The gross margin has improved compared to the previous quarter, and this is due to additional revenues from the Lendify acquisition and an increased proportion of net recognized revenues which has also negatively impacted revenue. I expect we will also have somewhat higher gross margins than previously going forward. We aspire to maintain a gross margin closer to 90% within the group in the future. I also note that marketing expenses are moving in a positive direction and appear to reach around 25% of the annual turnover, compared to the guided 30%. I anticipate that we will remain at the same level, or lower, in the upcoming year as scalability continues to show.

I have said it many times before, but can't say it enough – we will always take the better long-term decisions and accept when quarterly reporting shows some volatility – until we achieve greater profitability. Last year's Q1 saw similar changes that were tough to make right then, but for which I am now glad to have made. This time it is the same. Having said that, I want to be clear: We don't see any further big changes throughout the year, and we have no plans to slow our growth. Quite the opposite.

The conditions are there with greater liquidity on the savings platform than before, and continued strong interest in Billecta. Our strategy is set, we have an organization ready to handle twice the revenue, and a clear plan to deliver a positive net result!