SaveLend

Q4 - 1 October – 31 December 2022
Amounts in parentheses refer to the same period the previous year.

• Net revenue for the period was MSEK 44.7 (30.3)
• Adjusted EBITDA was MSEK 3.0 (-3.0)
• EBITDA was MSEK 5.5 (-5.0)
• EBIT was MSEK -0.1 (-9.1)
• Net result was MSEK -3.2 (-9.2)
• Earnings per share before dilution were SEK -0.06 (-0.19).

Period - 1 January – 31 December 2022

• Net revenue for the period was MSEK 150.3 (94.1)
• Adjusted EBITDA was MSEK -5.6 (-6.0)
• EBITDA was MSEK -4.0 (-17.9)
• EBIT was MSEK -24.3 (-27.9)
• Net result was MSEK -28.1 (-28.7)
• Earnings per share before dilution were SEK -0.55 (-0.92).

Events during the quarter

• New partnership agreement through Billecta with CRM-service.
• SaveLend Group received MSEK 17.9 from payments for exercised options.

Events after the quarter

• In January, the shares from the exercised options were registered. As of January 31, the number of shares amounts to 53,553,250 and the share capital to SEK 1,217,119.34.

CEO COMMENTS

YIELD + 8.12% - Strong in an uncertain climate
What a year! Every month of 2022, savers on the savings platform earned a positive yield. In these uncertain times, we still succeeded in living up to our ticker YIELD, delivering 8.12% annual yield to our savers.

You would need to go back to 2016 to find a month with negative average yield. Which, by the way, is the only negative yield month we’ve had since opening the platform in 2014. We have never experienced an annual loss at the platform level. An accomplishment matching our vision to deliver positive yield to all our investors no matter the market conditions. This is certainly the reason behind why we could maintain net inflows of savings capital, while our competitors have experienced the opposite.

Capital on the savings platform at the year-end totaled MSEK 1,122 for an increase of 78.4% YoY. Fourth quarter net capital retention was 117%, which I am entirely satisfied with.

Looking ahead
This year we expanded our customer dialogue activities, and found that in these times savers show greater interest in low-risk savings opportunities even with lower yields. This is an opportunity we take seriously and which will be built into many of our future development projects. We have already launched the capability to invest in consumer credit where capital is fully preserved if the credit falls past due. As we implemented this, we extended maturities on these credits from 24 months to 36. This way, savers’ capital works longer, which contributes to a higher customer value for us. Meanwhile, the borrower gets lower monthly repayments costs, which should improve their repayment ability in times like these.

We are aiming to reach additional target groups in 2023. A first step in this direction is to launch diversified credit portfolios to match differing risk appetites. With this, we want to enable savers with limited experience investing in credits to get started with their savings.

My intuition tells me that more savers will invest in credit to better prepare for a possible stock market recession.

Unfortunately, our European launch is delayed since we’ve been waiting on certain suppliers who are not as quick-footed as we are. This has led to a shortage of euro capital to lend. Demand for euro credits is significant, so we are concentrating on attracting sufficient volumes of euro to achieve break even in Finland to later add greater volume. We expect to be able to welcome German investors to the savings platform in the spring.

During the fall, we completed integration activities between SaveLend and Fixura, which we anticipate will bring several synergies. We managed to prematurely terminate a costly supplier agreement linked to the technology, resulting in lower expenses of approximately MSEK 5 from 2023 to 2025 in our Fixura subsidiary. We gained a MSEK 2.5 positive impact on the bottom line for the group by eliminating the provision taken for the Fixura acquisition.

We saw reduced inflows of property investments in Q4 due primarily to stronger than normal inflows in Q3. I won't focus on quarterly revenues, as we are much more long term than that, though this may lead to revenue fluctuations from one quarter to the next. Current market conditions have hit the real estate industry hard, whereby thorough assessment of such projects will become even more important. We have not ended lending, but credit assessment activities will take somewhat longer considering the increased complexity in market conditions.

More capital with fewer clicks
2022 was the year we invested heavily in capacity and automation. This enables us to now focus our resources on the customer journey and product improvement. Looking forward to 2023, we see a year of greater focus on user friendliness. Improving the user experience will include both technology and, naturally, product and delivery.

Enabling product availability to a broader target group, by improving packaging, has become a high priority. These improvements allow us to reach new customer segments that have hitherto experienced the platform as complicated, which paves the way for continued growth. With this in mind, we will naturally keep current opportunities for our committed investors to customize their portfolios and thereby continue working to enable them to expand their savings activities with us.

Exceptional – SaveLend is the first Scandinavian business to earn the top 4thWay PLUS Rating
We are in the final phases of several vital steps in our European expansion. This includes a review by 4thWay (a valuation business specializing on savings platforms that concentrate on credit) of our lending origination which has validated the figures we presented. The ranking is the highest possible, the first in Scandinavia.

“SaveLend has earned the 3/3 “Exceptional” 4thWay PLUS Rating, meaning investors can strongly expect to make positive returns, even during a simultaneous severe recession and property crash.”

I believe this quality label, in addition to more institutional investors joining the platform, will help private customers decide on increasing their commitment to us. Our institutional investor nordIX, who expanded their investment on the savings platform from MSEK 50 to over MSEK 100, is an excellent example of an actor that I believe has a reassuring impact on private savers.

Billecta steams ahead with a new partnership
Our uncut diamond Billecta continued their profitable growth journey by helping customers digitalize and automate their billing flows. In Q4 they processed MSEK 1,218,261 invoices for a 25% increase over the previous year.

We entered partnership with CRM-service Technologies Sweden AB ("CRM") which is a subsidiary of the CRM-service OY, the leading Finnish customer relationship management provider. Implementation activities for this partnership are complete and we are now ready to launch the functionality for the Swedish market. We also welcomed a broad base of customers, including one of the more important where a larger Swedish insurance company selected Billecta as provider after conducting a thorough due diligence.

Billecta is also continuing sales activities through their partners. I like being able to scale our business in this way. It means a larger initial investment for us, but brings that much better scalability when new partners integrate us in their offering. Now that we’re ready with our technology upgrade and integration with the new banking payment platform P27, we can focus our energy and greater credibility on larger partnership discussions and other strategic initiatives.

Net revenue retention for the billing platform in the quarter was 134% YoY, showing our ability to keep growing our business with current customers. This means that while maintaining this net revenue retention level, Billecta is able to double sales in three years without entering a single new customer agreement. To ensure our continued growth, as particularly by joining P27, we instituted a price rise at the start of the new year in line with the current inflation rate.

Strong finances and positive adjusted EBITDA
We delivered net revenue of MSEK 44.7 for Q4 with adjusted EBITDA of MSEK 3 (5.5 unadjusted). The exercise period for one of our group incentive programs closed in December whereby warrants were exercised for total proceeds for the company of MSEK 17.9 – from new and current shareholders. To me this demonstrates the confidence our owners have in our business despite uncertain markets. I am confident with our liquidity, especially as Swedish operations deliver a positive result and cash flow. The new acquired Finnish business has not been able to deliver to our high expectations as it still has not shown positive cash flow figures.

As previously announced, our cost base has stabilized and my assessment is this will remain at current levels. This means that future revenue growth will have a positive impact on the bottom line.

The company has restructured lending related to NPL investments so now investors are directly exposed to the underlying assets whereby they face the entire upside, or downside. This positively impacted the cash flow for operating activities and reduced our balance sheet total by approximately MSEK 95 related with these portfolios. More about this can be read in the Financial trends for the group on page 13. While we are secure in holding this exposure on our balance sheets in an earlier stage, our objective is always for our savers to carry the risk corresponding to their earning opportunity. SaveLend thereby serves only as a platform that brokers the opportunity to invest in various types of credits rather than as an investor on that platform.

Strong momentum
We have built a strong organization and SaveLend Group today has 76 committed employees on the growth journey, compared to 62 employees in 2021. I assess that the number of employees will amount to a maximum of 85 people at the end of 2023, which means that we will recruit to a less extent than we did in recent years.

Over the years, we have maintained a high speed of both development and growth, which worked well with a smaller organization. After growing to a larger size we see a risk of becoming less efficient and loosing track of some details. Therefore, our future focus will be to maintain our momentum rather than keep running faster. Our momentum will help build capacity and increase efficiency – which is our goal for the coming year.

With core values of “accountability, intrapreneurship, and transparency”, we can lay the foundation for an organization where each unit can develop independently while driving the whole forward. We therefore aim to achieve a turnover of more than SEK 3 million per employee by 2025. If we continue on the path we have set, we will exceed our financial targets.

As we now move away from 2022, our focus for 2023 is clear – money shouldn’t sleep!