SaveLend

Q3 - 1 July - 30 September 2023
Amounts in parentheses refer to the same period the previous year.

• Net revenue for the period was MSEK 42.4 (40.7).
• EBITDA was MSEK 6.5 (1.2).
• EBIT was MSEK 0.1 (-4.2).
• Net result was MSEK -0.1 (-4.4).
• Earnings per share before dilution were SEK 0.00 (-0.09).

Period 1 January - 30 September 2023

• Net revenue for the period was MSEK 127.4 (105.5).
• EBITDA was MSEK 12.4 MSEK (-9.5).
• EBIT was MSEK -5.6 MSEK (-24.3).
• Net result was MSEK -5.9 (-24.8).
• Earnings per share before dilution were -0.11 SEK (-0.49).

Events during Q3

• Robert Andersson resigned as a board member of SaveLend Group AB.
• Mats Röjdmark assumed the position of new CEO for the subsidiary Billecta AB.

Events after the quarter

• SaveLend Group strengthens the management team by recruiting Björn Johnson as Chief Credit Officer and Peter Balod as Chief Commercial Officer.
• SaveLend Group AB launches Project Finance - A new way for investors to actively choose their investment projects.

CEO COMMENTS

Profitability in both segments!

In the third quarter, we are seeing the effects of the restructuring we have done during the year with a greater proportion of recurring earnings over a longer period. This is reflected in higher net revenue despite a lower mediated volume. This has given us our new established baseline in terms of revenue, and I am positive about 2024, which will be a year of profitable growth throughout.

Our saving strategies that deliver returns to our savers without the need for luck or timing are performing in line with the target return – just as intended in a fluctuating world. For the five months they have been active, the accumulated return for the Balanced strategy is 3.00%, and for Yield, it is 3.71%. The difference between these two strategies is the volatility over time. For the investor who desires a more predictable return and the option to withdraw their investment annually up to SEK 50,000 prematurely, the Balanced strategy is more suitable, while those who seek the possibility of higher returns over time should opt for Yield.

According to SEB's recurring survey Sparkollen, the proportion of households planning to save more in the coming six months has increased from 19% to 22% since the previous quarter. This is of course positive news and something that indicates that households are adjusting and thinking more long-term. An adjustment that fits well with our offering and savings platform. During the quarter, we have continued to work on a number of product improvements to attract larger volumes of new capital to the platform and we recently launched our automated solution for project financing. This means that investors on the savings platform can choose for themselves which projects they want to invest in by assimilating information about the project and making their own assessment.

Before we launched our automated product for project financing, we managed the process manually via mailings to existing customers. We received a very good response to this, and some projects were fully subscribed in just a few hours. I therefore view Project Finance as an important component moving forward when it comes to expanding the mediated volume over the upcoming quarters. Both existing investors and customers who came through the Lendify acquisition have communicated that they would like to increase their savings with us if given the opportunity to choose for themselves which projects to invest in.

Our saving strategies contain clear limits on how capital can be invested in order to achieve the desired diversification. However, this results in a limitation on the size of the credits that can be financed on the platform. Recently, we have had to decline some good but large credits to ensure diversification. Thanks to Project Finance, we now have a product through which we can finance these credits with good risk/reward, even when they are larger than before. In addition, we have seen great interest in our pilot for a fixed-rate account. A product that offers investors a predetermined return with a predetermined duration. For our part, it means a lower expected return, which in turn opens up entirely new segments on the lending side. This product will be will be launched in the first half of 2024 and will play a significant role in achieving our ambitious goals.

The customers welcomed through the acquisition of Lendify continue to become more active. We are naturally seeing some outflow from the historic loan portfolio; currently, about half of the capital that is repaid each month is reinvested, but we are getting better month by month at reaching out to them. Our goal is for the total capital over time to exceed the entry value at the takeover.

The theme for the year on the development side has been user-friendliness, and many major projects are nearing completion.

• We have launched Swish for deposits on the savings platform, which has been well received.
  
• We are approaching the launch of our new onboarding flow, which is expected to improve the conversion from account creation to saving.
  
• We have started developing a new logged-in mode that will form the basis for our SaveLend app, which is to be launched next year.
  
• We have expanded our focus on monthly savings, which has resulted in a 6% increase in the number of monthly savers and a 9% increase in volume, from low levels, on a monthly basis since the initiative began at the end of September.

In Finland, things are beginning to move as we have implemented a scoring similar to the one we have in Sweden and procured a resale agreement for credits that do not follow their payment plan. These are important cornerstones for being able to take the next step, and this is something I will have reason to get back to.

Finances
Revenue amounted to 42.4 MSEK with an EBITDA of 6.5 MSEK and a positive operating result (EBIT). This clearly shows that we are right at the tipping point in terms of positive net income as the cost base remains stable and for the first time, we are profitable in both segments. The reason we do not achieve profitability for the group as a whole is due to depreciation in the parent company, but I will be surprised if we do not achieve a positive net result early next year.

The originated volume during the quarter was 267 MSEK, and we must consider that the corporate market was virtually at a standstill in July. Therefore, we expect a stronger fourth quarter, supported by, among other things, project and property investments.

Recruitment of CEO for Billecta
Mats Röjdmark assumed the position of CEO for the billing platform Billecta in September. With this, Billecta is better positioned to develop its business and continue its growth journey. Mats has a solid commercial background and has already, along with the new Chief Operating Officer for Billecta, managed to implement improvements. Billecta now has the chance, for real, to become the diamond I know it is.

Financial Targets Before New Year
With a new CEO in place at Billecta, it is only reasonable that he should provide his perspective on the strategy for the billing platform for the coming year. Therefore, the updated financial targets for SaveLend Group will be communicated later in the year but in any case before New Year's. These will consist of a revenue target as well as an EBIT target for the savings platform and the billing platform respectively. We receive many questions about growth and profitability potential and will therefore run a Q&A in connection with the publication of the updated financial targets.

Strengthening of the Management Team at SaveLend Group
With our ongoing focus on commercializing SaveLend and an increased focus on corporate credits, I am pleased to welcome Peter Balod as Chief Commercial Officer and Björn Johnson as Chief Credit Officer in January. Peter comes from his role as CEO of BigBank Sweden and is incredibly customer-oriented and data-driven. Björn comes from our industry colleague Tessin where he has been Chief Credit Officer since 2020. Before that, he was Chief Credit Officer at Swedbank Finance and Björn's extensive and broad experience from various credit organizations will be very beneficial to us. Together with Peter and Björn, we have excellent conditions to continue improving our investment offering and accelerate the inflow of capital to the platform.

2024 Will Be the Year of Leverage!
During the year, we have worked tirelessly to develop our product offering and have thus significantly grown our addressable target group, most recently through the launch of project finance. Billecta is breaking new records and has now been given more resources to ensure high growth next year.

We see that the cost side continues to be stable and in line with what we have previously communicated; gross margin ~ 90%, other external costs in line with history, and marketing a maximum of 25% of revenue. The previously communicated number of employees, with at most 85 people by the end of this year, thanks to efficiencies, will remain until the end of 2024 whereby personnel costs will increase at the same rate.

During the fourth quarter, we have begun to reallocate more of our resources to expand the focus on customers and volumes. This will continue during 2024, and I am convinced that it will have a significant effect on capital on the savings platform and the number of invoice transactions managed by Billecta. We have platforms and an organization that can handle multiple times the volume. There are players who have shown that it is possible to increase managed capital by several billion in one year - I see no reason why we could not do the same thing. All this together means that we have a stable foundation to build on, both in terms of organization and revenues, and a clear vision of how we will return value to our shareholders.

SaveLend - Money shouldn‘t sleep!