Interim Report Q3 2021 for SaveLend Group AB (publ)

SaveLend Group AB (publ) publishes report for the third quarter of 2021.

Q3 - 1 July – 30 September 2021
Amounts in parentheses refer to the same period the previous year.

  • Net revenue for the period was MSEK 23.6 (14.8), a 59% increase
  • Adjusted EBITDA totaled MSEK -0.1 (1.0). Items affecting comparability impacted profit/loss by MSEK 1.2
  • EBITDA was MSEK -1.3 (1.0)
  • EBIT was MSEK -3.3 (-0.8)
  • Net result was MSEK -3.4 (-0.9)
  • Earnings per share before dilution were SEK -0.08 (-0.27)

Period - 1 January – 30 September 2021
Amounts in parenthesis refer to the same period the previous year.

  • Net revenue for the period was MSEK 63.8 (39.0), a 64% increase
  • Adjusted EBITDA totaled MSEK -2.9 (-4.1). Items affecting comparability impacted profit/loss by MSEK 9.9
  • EBITDA totaled MSEK -12.8 (-4.1)
  • EBIT was MSEK -18.8 (-9.2)
  • Net result was MSEK -19.4 (-9.5)
  • Earnings per share before dilution were SEK -0.94 (-2.77).

Events in the quarter 1 July – 30 September 2021

  • Acquisition of P2P pioneer Fixura AB Oy for a purchase price of approximately MSEK 25. Fixura is expected to show revenues exceeding MSEK 20 and contribute positively to group EBITDA during 2022.
  • Announced new financial targets and dividend policy with an average annual organic growth of 25% or more, and net revenue not less than MSEK 300 by 2025 including acquisitions and with 25% adjusted EBITDA margin. For dividends, the target is these to be 30 - 50% of group profit after tax starting 2023.
  • Concluded a partnership agreement with Bruk Financial Services Oy. This partnership provides a distribution channel for factoring and broking capital in the Finnish market. This is expected to generate MSEK 10 in revenue to the group for 2022.
  • Expanded collaboration with Maiden General Försäkrings AB into the Finnish market which is expected to generate more than MSEK 1.5 in revenue for Sweden and Finland combined in 2022.
  • Initiated partnership with event business Trippus for billing. The partnership is expected to generate over 100,000 invoices annually and MSEK 1 in revenue after implementation and the start-up phase.
  • Carl-Richard Häggman left the SaveLend Group board of directors due to changed circumstances related to his employment situation.

Events after the period

  • SaveLend Group concluded the acquisition of the Finnish P2P pioneer Fixura Ab Oy.
  • Direct bank payments were launched on the investment platform through Trustly.

CEO comments
Another record quarter behind us
Our third quarter was filled with high energy and a strong focus on operations. We have good momentum as we now lay another record quarter behind us. We exceeded previous highs for revenues, capital on the platform, and total processed billing transactions. We also see continuing strong interest from investors wanting to become shareholders and from shareholders interested in investing. I see this as a solid measure of quality, showing strong confidence in SaveLend Group.

Q3 revenues totaled MSEK 23.6, while adjusted EBITDA was MSEK -0.1. Capital on the investment platform totaled MSEK 415 for an increase of 80% YoY, and 11% QoQ. Our private investors on the platform have had an average annual yield of 8.92%, which is within the range of our announced targets. Total billing transactions grew somewhat over expectations exceeding 870,000 for the quarter - another record after adjusting for one-off invoices (which are non-recurrent and have little or no margin) as reported last quarter. Billing transactions thereby increased 172% year-over-year, and 7% quarter-on-quarter.

Financial targets 2025
Our previous financial target was for 25% organic annual growth, which we have exceeded by good margin. We have therefore communicated our new financial targets for 2025, adding a measure for profitability.

  • Net revenue not less than MSEK 300
  • An adjusted EBITDA margin of 25%

Achieving our growth plans for 2022 will demand continued investment in growth, in Sweden and our added markets. Our financial targets are ambitious though fully realistic, and we already see the results in our Swedish operations.

Swedish operations will show positive contribution to group adjusted EBITDA in 2022. Worth stating here about our strategy is that the company will avoid credit exposure on the balance sheet, which we already do for the most part.

High investment rates
As I stated in the previous report, one of our targets was to raise the investment rate for our private investors. And we did deliver on this. This was 90% on average at the period-end, an increase of nearly 10% over the previous quarter. Over time we will have certain liquidity requirements on the platform to enable broking investments, but the larger we become, we will be able to stabilize the investment rate.

Acquisitions and partnerships in Finland
Finland is a high priority market for us where we have made strong strides in entering our eastern neighbor’s market. In addition to the announced partnerships, we also completed the acquisition of Nordic P2P pioneer Fixura. The background and logic for this acquisition is based on several factors. These include customer and transaction data, highly reputable brand, and an experienced team in a well-functioning organization. My assessment with Fixura is we save at least two years in entering the market, while we acquire highly valuable credit assessment information that creates even better opportunities for our growing numbers of investors to continue earning good yields. This competent team will be led by our county manager Miika Engström. Miika previously led Fixura as CEO and is therefore fully familiar with their operations, and he has a clear vision for how we can integrate the acquisition and ensure its success.

We are looking for acquisitions that can be integrated into our existing technology or those that add something new. In this case, we will migrate to our investment platform and expose investors to our SaveLend brand while we keep the Fixura brand for credit broking activities.

Continued investment in growth
Keeping our strategic course, we will continue to add to our sales organization. We have the benefit of significant market interest, mostly relating to our billing platform, and we need to prioritize and recruit to ensure that we can meet the demand. Recruitment will ensue going forward and we will prioritize growth investment above short-term profitability. We are currently seeking sellers, system and front-end developers, and we welcome applications and recommendations.

We’ll close the fourth quarter strongly
To conclude, I can mention that I have undergone chemotherapy and surgery for my cancer and the medical assessment is I will be fully recovered by the New Year! I am convinced that next year will be the most exciting so far in the history of SaveLend Group. Before then, we will ensure a strong conclusion to Q4 where we see that our new originators are offering new investment opportunities, Fixura begins to deliver to the group, and we complete the final stage of upgrading our billing platform. So there it is, another record quarter and a solid foundation for 2022.

Source: MFN

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