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Company presentationSeptember 2020
Sweden’s leading platform for savings and investments
• Founded in 1999
• Most satisfied savings customers in Sweden for 10 consecutive years
• 1,164,000 customers
• SEK 494 bn in savings capital
• 472 employees
• 4.9% market share of the Swedish savings market
2
Customer satisfaction and employee engagement create shareholder value over time
3
Long-term targets● Customer satisfaction & Employee engagement
● Growth in customers and savings capital
● Scalability and cost efficiencies (top modern IT platform)
Customer proposition● Cheaper, better and simpler offering
● High user experience
● Broad range of product
● Information, education and decision-making tools
Growth potential● Occupational pension business
● Focus on broader customer groups
● Strong potential in existing customer base
Revenues and costs● More stable revenues through funds and
mortgages
● High scalability
● Cost control vital
High customer satisfactionCreating a better future for millions of people
Customer promise – more to you, less to the bankTo 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
• Price leadership• Wide range of products• Decision-making tools• Best customer service
and user experience
Growth strategy built on scale
5
Growth in savings capital
• Customer satisfaction
• Innovation and user experience
• Customer growth
• Net inflow
1. 2.
3.
1. Savings capital
2. Revenues/savings capital
3. Costs/savings capital
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
Costs/savings capital
• Mainly fixed costs, tight cost control
• High scalability
• Long-term aim to reach a cost/savings capital of 16 bps
0
50 000
100 000
150 000
200 000
250 000
300 000
350 000
400 000
450 000
500 000
0
20
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2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020H1
Sa
vin
gs
ca
pit
al,
SE
K m
Ba
sis
po
ints
Savings capital Income/savings capital Cost/savings capital
73
Leading cost position
6
52
18
142
In 2018, cost/savings capital exclude the Swedish Financial Supervisory Authority’s administrative fee of SEK 35 million on Försäkringsaktiebolaget Avanza Pension.
A history of growth built on innovation
7
Activate Follow &
Improve
Find & get help
Trading Trading data &
Decision-support
tools
PensionFundsInterest rate
Data plattform
Service plattform
Deliveryplatform
Userinterface plattform
Technical plattform
Open banking
Designsystem
Trading Plattform
Mort-gages
Endow-ment
insurance
Pension plattform
BOtrans-
formation
Become a customer
Cash
Perfor-mancetesting
Being a customer
In-house development by 23 teamsCustomer journey
Products
Business plattform
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
11
0,0
2,0
4,0
6,0
8,0
10,0
12,0
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16,0
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20,0
Q1
-15
Q2
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-19
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-19
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Q2
-20
Ma
rke
t s
ha
re, %
Transactions
0,0
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2,0
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10,0
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-16
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-17
Q4
-17
Q1
-18
Q2
-18
Q3
-18
Q4
-18
Q1
-19
Q2
-19
Q3
-19
Q4
-19
Q1
-20
Q2
-20
Ma
rke
t s
ha
re, %
Turnover
• Market share of 17.5% in terms of transactions and 8.4% in turnover in Q2 2020
Customer growth drives net inflow
12
0
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10 000
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70 000
80 000
90 000
100 000Q
1-1
3Q
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3-1
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2-1
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1-2
0Q
2-2
0
Ne
t in
flo
w, S
EK
m
Ne
w c
us
tom
ers
Customer inflow Net inflow
2013:Customers: +33,000Net inflow: 10,900
2014:Customers: +54,700Net inflow: 20,100
2015:Customers: +96,400Net inflow: 25,200
2016:Customers: +103,000Net inflow: 26,500
2017:Customers: +140,000Net inflow: 26,800
2018:Customers: +126,500Net inflow: 27,600
2019:Customers: +139,300Net inflow: 32,600
H1 2020:Customers: +139,100Net inflow: 41,300
Age distribution among new customers
13
0
0,5
1
1,5
2
2,5
3
3,5
4
0 3 6 91
21
51
82
12
42
73
03
33
63
94
24
54
85
15
45
76
06
36
66
97
27
57
88
18
48
79
09
39
69
9
Sh
are
, %
Age
2019
2012
2007
Strong long-term potential in existing customer base
14
Market penetration
• Total share of Swedish savings market: 4.9% as of Q2 2020
• Total share of Swedish population:9.1% as of 1 November 2019
• ages 20-29: 15.3%
• ages 30-39: 17.8%
• ages 40-49: 13.3%
• Highest penetration in urban areas. Stockholm region, snapshot (Women/Men) as of 1 November 2019:
• ages 20-29: 15%/25%
• ages 30-39: 19%/29%
• ages 40-49: 14%/23%
• ages 50-59: 12%/17%
• ages 60-69: 9%/13%
0,00
0,20
0,40
0,60
0,80
1,00
1,20
1,40
0,0%
0,5%
1,0%
1,5%
2,0%
2,5%
3,0%
3,5%
4,0%
4,5%
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
Sa
vin
gs
ca
pit
al,
SE
K m
Cu
sto
me
rs, %
Age
Savings capital by age Total customer base Age distribution among new customers
Savings capital grow by number of years at Avanza
15
0
100 000
200 000
300 000
400 000
500 000
600 000
1 month 1 year 2 years 3 years 4 years 5 years 6 years 7 years 8 years 9 years 10 years
Sa
vin
gs
ca
pit
al,
SE
K
Average savings capital per customer (excluding customers with > SEK 10m in savings capital)
Significant growth potential with a 4.9% market share of the Swedish savings market
• The Swedish savings market SEK 9,047 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
16
The white circles refer to Avanza’s share of each savings area.* An estimated 50% of the market is addressable for Avanza
Market share of 19.2% rolling 12M of net savings on the Swedish savings market
17
Long-term target by 2025 of at least 15%
Growth potential in broader customer groups
18
Do it for me Do it myselfHelp me do it
Knowledge & time
InterestBegin
Save
Invest Trade
Gamble
Strategy for more recurring income
0%
10%
20%
30%
40%
50%
60%
2012 2013 2014 2015 2016 2017 2018 2019
Sh
are
of
tota
l in
co
me
Net brokerage income Fund commissions
Net interest income Other commission income
19
Strong growth in occupational pension
20
0
5 000
10 000
15 000
20 000
25 000
30 000
2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019
Sa
vin
gs
ca
pit
al,
SE
K
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
22
Employee engagement key
Appendix
23
Operations 24-26Financials 27-35Balance sheet data 36-38Contact details 39
Performance on targets 2019
Long-term targets Outcome 2019 Comments
Sweden’s most satisfied savers according to Swedish Quality Index
√ Achieved in 2019 for the tenth consecutive year
Engaged employees, eNPS of at least 45
54 Very strong ambassadorship
Market share of at least 10% R 12Mof the total net inflow to the Swedish savings market
15.6%
1 million customers 2020 976,400 Target achieved in January 2020
Cost growth should not outpace income growth √
Income growth 13,8%Cost growth 10,6%, excluding fee and one-off write down
Dividend of at least 70% of net profit for the year
79% Dividend SEK 2.30 per share
24
New long-term targets by 2025The 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
Customer inflow of 187,500 in 2020 (+110% Y/Y)
0
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Ja
n-1
4
Ap
r-1
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Ju
l-1
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Oc
t-1
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Ja
n-1
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r-1
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Oc
t-1
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Ja
n-2
0
Ap
r-2
0
Ju
l-2
0
Nu
mb
er
of
cu
sto
me
rs
Customer inflow
26
Net inflow of SEK 51,500m in 2020 (+124% Y/Y)
-2 000
0
2 000
4 000
6 000
8 000
10 000
Ja
n-1
4
Ap
r-1
4
Ju
l-1
4
Oc
t-1
4
Ja
n-1
5
Ap
r-1
5
Ju
l-1
5
Oc
t-1
5
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n-1
6
Ap
r-1
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l-1
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Oc
t-1
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Ja
n-1
8
Ap
r-1
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l-1
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Oc
t-1
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Ja
n-1
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Ap
r-1
9
Ju
l-1
9
Oc
t-1
9
Ja
n-2
0
Ap
r-2
0
Ju
l-2
0
Ne
t in
flo
w, S
EK
m
Net inflow
27
* Net outflow in November 2017 is explained by a few withdrawals amounting to SEK 2,200m, connected to customers’ M&A activities.
Financial overview
28
Q2 20 Q1 20 ∆ % Q2 19 ∆ %
Operating income, SEK m 526 542 -3 284 85
Operating expenses, SEK m -185 -179 4 -166 12
Operating profit, SEK m 333 361 -8 117 184
Operating margin, % 63 67 -3 41 22
Income to savings capital ratio, % 0.52 0.56 -0.04 0.33 0.19
Costs to savings capital ratio, % 0.18 0.18 -0.00 0.19 -0.01
ROE, % 56 64 -8 27 29
EPS, SEK 1.83 1.98 -8 0.67 173
Relationship between long-term savings capital growth and revenue growth
0
100
200
300
400
500
600
0 50 000 100 000 150 000 200 000 250 000 300 000 350 000 400 000 450 000 500 000
Re
ven
ue
, SE
K m
Savings capital, SEK m
29
2001–2011Corel=0.95
2012–Q2 2020Corel=0.86
Q2 2020
Savings capital Q2 2020: SEK 445 bn (+24 % Y/Y)
Long-term revenue development
30
-1,0
0,0
1,0
2,0
3,0
4,0
5,0
0
200
400
600
800
1 000
1 200
1 400
2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019
Ave
rag
e r
ep
o r
ate
, %
Re
ven
ue
, SE
K m
Total income Net brokerage income Income from mutual funds
Net interest income Other income Average repo rate
Historical correlation between low market rates and growth
31
-1,0
0,0
1,0
2,0
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5,0
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5000
10000
15000
20000
25000
Q1
-03
Q3
-03
Q1
-04
Q3
-04
Q1
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Q3
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Q1
-06
Q3
-06
Q1
-07
Q3
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Q3
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Q1
-20
Re
po
ra
te, %
Ne
t in
flo
w, S
EK
m
Net inflow 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 Q2-20 volumes)
Revenue development
32
244 234 227
271 271244
267 267 268284
313329
542526
0
100
200
300
400
500
600
Q1-17 Q2-17 Q3-17 Q4-17 Q1-18 Q2-18 Q3-18 Q4-18 Q1-19 Q2-19 Q3-19 Q4-19 Q1-20 Q2-20
Re
ven
ue
, SE
K m
Total income Net brokerage income Income from mutual funds
Net interest income Other commission income
Income split 6M 2020
33
SEK m % ofincome
% of specificsavings capital
% of total savings capital
Shares, bonds, options (transactions)
528 49 0.48 0.26
Mutual funds 184 17 0.34 0.09
Net interest income 157 15 0.42 0.08
Other** 198 19 0.10
Total 1,067 100 0.52 0.52
* Based on deposits** Corporate finance fees, foreign exchange, AZA Markets, subscription and advertising income, additional services
Cost development
34
124131
123
157152 153
135
155164 166
148
179 179185
35
8
0
20
40
60
80
100
120
140
160
180
200
Q1-17 Q2-17 Q3-17 Q4-17 Q1-18 Q2-18 Q3-18 Q4-18 Q1-19 Q2-19 Q3-19 Q4-19 Q1-20 Q2-20
Op
era
tin
g e
xpe
ns
es
, SE
K m
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 Q4 2019 including one-off write-down of SEK 8.3 million
Costs 6M 2020
35
SEK m % of total costs
% of total income
Personnel -231 64 22
IT -38 11 4
External services -15 4 1
Marketing & Sales -10 3 1
Depreciation -31 9 3
Other -38 10 4
Total costs before credit losses -364 100 34
Credit losses, net -4
Profit/loss from participations in associated companies
-4
Operating margin of 63% in Q2 2020
36
121103 104
114 120
90
132
76
100117
163
140
361
333
0
10
20
30
40
50
60
70
80
90
100
0
50
100
150
200
250
300
350
400
Q1-17 Q2-17 Q3-17 Q4-17 Q1-18 Q2-18 Q3-18 Q4-18 Q1-19 Q2-19 Q3-19 Q4-19 Q1-20 Q2-20
Op
era
tin
g m
arg
in, %
Op
era
tin
g p
rofi
t, S
EK
m
Operating profit Operating margin
Operating profit in Q4 2018 is affected negatively by the Swedish Financial Supervisory Authority’s administrative fee of SEK 35 million on the subsidiary Försäkringsaktiebolaget Avanza Pension.
Balance sheet, 30 June 2020
37
Assets SEK m Liabilities & equity SEK m
Lending to credit institutions*
4,647 Deposits 45,265
Lending to the public
15,090 Liabilities in insurance operations
124,620
Bonds and other interest bearing securities
25,662 Other liabilities 1,858
Assets in insurance operations
124,619 Subordinated liabilities 100
Other assets 3,997 Equity 2,173
Total assets 174,016 Total liabilities and equity 174,016
Comments
• Mainly self-financed through shareholders’ equity and customer deposits
• Surplus-liquidity of SEK 32,406m invested in covered bonds, at the Riksbank and O/N (including SEK 2,097 m deposits in client fund accounts)
* Incl. balances at central banks and treasury bills eligible for refinancing
Capital surplus for the Group
38
SEK m 30 June 2020
Shareholders’ equity 2,173
Solvency capital 1,369
Less non-distributable solvency capital -229
Subordinated loan 70
Additional value adjustments -28
Intangible assets and deferred tax receivables -73
Own funds before dividend adjustment 3,282
Capital requirement Pillar 1 -1,788
Buffer requirement -200
Capital requirement Pillar 2 -120
Capital requirement 2,108
Capital surplus before dividend 1,175
Capital surplus per share, SEK 7.64
Total capital ratio (consolidated situation), % 17.1
Historical financial key data2001 – Q2 2020
is available in Excel at:
avanza.se/keydata
sofia.svavar@avanza.se+46 8-409 420 17
2020-09-02
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