Aprila Bank ASA | Q2 2019 | 14 August 2019 Disclaimer - - PowerPoint PPT Presentation

Aprila Bank ASA | Q2 2019 | 14 August 2019

2

Disclaimer

Forward-looking statements

This presentation contains forward-looking statements that reflect management’s current views with respect to certain future events and potential financial performance. Although Aprila Bank believes that the expectations reflected in such forward-looking statements are reasonable, no assurance can be given that such expectations will prove to be correct. Accordingly, results could differ materially from those set out in the forward-looking statements as a result of various factors. Important factors that may cause such a difference for Aprila Bank include, but are not limited to: (i) the macroeconomic development, (ii) change in the competitive climate, (iii) change in the regulatory environment and other government actions and (iv) change in interest rate and foreign exchange rate levels. This presentation does not imply that Aprila Bank has undertaken to revise these forward-looking statements, beyond what is required by applicable law or other applicable regulations if and when circumstances arise that will lead to changes compared to the date when these statements were provided.

3

Table of contents

Overview

01 02 03

Highlights Key figures Outlook

04

Appendix

4

Highlights Q2 2019

Note 1: Annualised yield on average net loans. | | Note 2: Excluding deferred tax assets.

Summary

Q2-19

Our first five quarters

• Net 619 customers onboarded of which 379 have sold invoices
• NOK ~308 million purchased
• ~9,700 invoices towards ~4,000 different end customers

Building the future

• Signed new agreement for distribution in Visma eAccounting
• Deposit module to be launched in August
• Integrations with Xledger and Uni Economy close to launch
• Good progress on new product development

Positioned to capitalise on accumulated insight

• Presence in several systems will allow for benchmarking
• Building analytical predictive capabilities
• Product market fit confirmed by market survey and retention analysis

LTM

Q3-18 – Q2-19

1 2

NOKm

Q1-19 Q2-19 Purchased amount 81 89 Total income 1.6 1.8 Pre-tax operating profit

• 10.1
• 6.4

Yield on avg. net loans 24 % 30 %

NOKm

Q3-18 - Q2-19 Purchased amount 307 Total income 5.8 Pre-tax operating profit

• 31.0

Equity EOP 112

5

Table of contents

Overview

03

Key figures Outlook

02 01

Status

03 04

Appendix

6

18 112 215 144 145

2018-Q2 2018-Q3 2018-Q4 2019-Q1 2019-Q2

Key figures

Note 1: Customers at EOP, net of closed accounts. Net customers differ slightly from former reports due to different definitions in the new datawarehouse vs. the old. | | Note 2: Nominal amount of invoices purchased in the period. | | Note 3: New customers onboarded in the period, net of closed accounts.

619 onboarded customers at EOP and NOK 89m purchased in Q2-19

Purchased per net onboarded customer Net customers accumulated1 Net new customers3

# #

Key comments

• 619 customers at EOP
• NOK 89m purchased;
• 11% increase QoQ
• Net 57 new customers
• NOK 145 000 purchased per net customer

NOK million NOK thousand

88 325 467 562 619

2018-Q2 2018-Q3 2018-Q4 2019-Q1 2019-Q2

Purchased amount by quarter2

88 237 142 95 57

2018-Q2 2018-Q3 2018-Q4 2019-Q1 2019-Q2

2 37 100 81 89

2018-Q2 2018-Q3 2018-Q4 2019-Q1 2019-Q2

7

30 % 24 % 21 % 13 % 12 %

Construction Services ICT Retail Others

Active customers

Note 1: Active customers = customers who have sold one invoice or more. | | Note 2: Net active customers acc. = Active customers where the customer account has not been closed. | | Note 3: Purchased amount in the period divided by net active customers accumulated.

~60% of the onboarded customers have sold invoices

Purchased per net acc. active customer3 Active customers1 by # of sold invoices Purchased amount by customer industry (Q2-19) Active customers2 vs. total net customers Key comments

• Services, construction and ICT accounted

for 75% of purchased amount in Q2

• ~80% of the active customers sold two

invoices or more

• 379 of 619 open customer accounts

(~60%) had sold invoices at EOP

• 260 customers sold invoices in Q2
• Run-rate of NOK ~1 million purchased per

active customer per year

NOK 89.5m

25 134 256 326 379 63 191 211 236 240 88 325 467 562 619 28 % 41 % 55 % 58 % 61 %

2018-Q2 2018-Q3 2018-Q4 2019-Q1 2019-Q2

Net active customers acc. Inactive customers Net active in %

64 272 392 247 236

2018-Q2 2018-Q3 2018-Q4 2019-Q1 2019-Q2

14 % 35 % 46 % 40 % 46 % 52 % 35 % 36 % 40 % 35 % 34 % 29 % 17 % 20 % 19 %

2018-Q2 2018-Q3 2018-Q4 2019-Q1 2019-Q2 >5 2-5 1

8

22 % 22 % 13 % 11 % 8 % 24 %

Construction Services Real estate Retail ICT Others

Key invoice figures

Note 1: Estimated invoiced amount available to Aprila. | | Note 2: Gross interest and fee income in % of purchased amount, not accounting for accruals. | | Note 3: Volume weighted average number of due days granted to end customers on invoices purchased in the period. | | Note 4: Conversion rate = Purchased in % of invoiced.

~30% increase in available invoice volume

Invoiced amount1 Margin2 (volume weighted average) Purchased amt by end customer industry (Q2-19) Granted days3 (volume weighted average)

NOK million NOK million % # days

Key comments

• Available invoiced volume1 in Q2 amounted

to NOK 767m

• With a purchased amount of NOK 89.5

million, the conversion rate4 (in NOK) was 11.7% (13.6% in Q1-19)

• VWA margin in Q2-19: 2.58%
• VWA granted days in Q1-19: 22.9

NOK 89.5m

14 225 563 593 767

2018-Q2 2018-Q3 2018-Q4 2019-Q1 2019-Q2

2.20 % 2.32 % 2.60 % 2.56 % 2.58 %

2018-Q2 2018-Q3 2018-Q4 2019-Q1 2019-Q2

16.6 23.5 23.3 23.7 22.9

2018-Q2 2018-Q3 2018-Q4 2019-Q1 2019-Q2

9

0.0 0.1 1.0 0.9 0.7

2018-Q2 2018-Q3 2018-Q4 2019-Q1 2019-Q2

Loan losses and provisions

Note 1: Stage 1: All exposures <= 30 DPD, Stage 2: Exposures 31 – 90 DPD, and exposures <= 30 DPD with negative risk class migration since initial recognition, Stage 3: Exposures >90 DPD and other non-performing exposures | | Note 2: Coverage ratio = LLP in % of gross defaulted loans. | | Note 3: Sum of loan loss provisions and realised losses in the period. | | Note 4: Gross margin = Gross margin at the time of purchase = Amount due – Disbursed Amount. Final margin = Gross margin adjusted for collection income and loan losses.

Sound improvement in credit quality

LLPs by stage1 Gross defaulted loans and coverage ratio2 Loans by DPD (>30) Loan losses3

NOK million NOK million

Key comments

• LLPs of NOK 0.9m / 2.7% of gross loans at

30 Jun 2019

• Gross defaulted loans of NOK 1.2m
• Coverage ratio2 of 73%
• DPD >30: 7.7% of gross loans

% NOK million

0.1 0.1 0.1 0.2 0.0 0.1 0.8 1.9 0.8 0.0 0.1 1.1 1.9 0.9

2018-Q2 2018-Q3 2018-Q4 2019-Q1 2019-Q2 Stage 1 Stage 2 Stage 3

0.9 2.5 1.2 123 % 78 % 73 %

2018-Q2 2018-Q3 2018-Q4 2019-Q1 2019-Q2 Gross defaulted loans Coverage ratio

1.3% 11.6% 4.6% 3.6% 0.1% 1.6% 1.0% 1.8% 0.4% 6.7% 2.4% 0.0% 1.4% 13.5% 12.3% 7.7%

2018-Q2 2018-Q3 2018-Q4 2019-Q1 2019-Q2 31-60 61-90 >90

%

Gross margin vs. final margin4 (by vintage)

101 % 32 % 55 % 99 % 94 %

2018-Q2 2018-Q3 2018-Q4 2019-Q1 2019-Q2

10

Table of contents

Overview Key figures

Outlook

01

Status

03 02 04

Appendix

11

Aprila has already achieved product/market fit for invoice purchasing

Next step is to scale up penetration of this product in the Norwegian SME Market

30 32 34 32 32 30 31 30 29 29 29 29 35 42 45 6 2 1 3 4 7 5 8 9 10 11 12 13 14 30 Not disappointed 2% 52% Disappointed 46% 40 98% Very A bit

More than half of our customers would be “very disappointed” if they were not able to use the product

Product/market fit threshold

And they prove this by repeating to use the product with stable to increasing frequency

Number of months after onboarding Likelihood of an onboarded customer using the product in a given month after onboarding Percent

12

Table of contents

Overview Key figures

Outlook

01

Status

03

02

04

Appendix

13

Income statement & general administrative expenses

Income Statement General administrative expenses

Q2-19: NOK 3.0m

Amounts in NOK thousand Q2 2019 Q2 2018 YTD 2019 YTD 2018 2018 Interest income 2,346 314 4,475 364 3,668 Interest expense 20 53 38 53 158 Net interest income 2,326 261 4,436 311 3,510 Income commissions and fees 89 1 170 1 133 Expenses commissions and fees 721 10 1,357 10 982 Net commissions and fees

• 631
• 9
• 1,186
• 9
• 848

Net gains / losses (-) on certificates, bonds and currency 96 3 122 3 112 Other income 6 6 6 Total income 1,791 261 3,372 311 2,779 Salary and other personnel expenses 3,983 3,269 10,275 7,108 17,604 General administrative expenses 2,977 2,960 7,043 4,656 9,338 Total salary and administrative expenses 6,960 6,229 17,318 11,764 26,942 Ordinary depreciation 485 325 954 351 1,085 Total operating expenses excl. losses on loans 7,445 6,554 18,272 12,115 28,027 Losses on loans 708 1 1,597 1 1,052 Pre-tax operating profit

• 6,362
• 6,293
• 16,496
• 11,805
• 26,299

Tax expenses Profit after tax

• 6,362
• 6,293
• 16,496
• 11,805
• 26,299

Earnings per share (NOK)

• 0.18
• 0.17
• 0.46
• 0.33
• 0.73

Diluted earnings per share (NOK)

• 0.15
• 0.15
• 0.38
• 0.28
• 0.61

Amounts in NOK thousand Q2 2019 Q2 2018 YTD 2019 YTD 2018 2018 External services 1,199 1,165 3,272 1,820 3,632 IT operations 799 1,042 1,825 1,292 2,635 Rental of premises 309 240 554 481 961 Sales and marketing 77 196 165 543 769 Credit information 100 80 167 80 333 External audit and related services 28 188 28 28 Credit insurance 91 1 131 1 111 Other operating expenses 403 208 742 413 869 Total general administrative expenses 2,977 2,960 7,043 4,656 9,338

40 % 27 % 10 % 3 % 20 %

External services IT operations Rental of premises Sales and marketing Other

14

Balance sheet & regulatory capital

Balance Sheet Regulatory capital

Amounts in NOK thousand 30.06.2019 31.12.2018 30.06.2018 Loans and deposits with credit institutions 45,711 54,639 103,858 Net loans to customers 31,463 39,619 986 Certificates and bonds 30,235 30,112 30,003 Other intangible assets 5,728 5,838 6,487 Deferred tax assets Fixed assets 2,711 1,064 1,141 Other receivables 2,580 2,226 1,789 Total assets 118,429 133,500 144,264 Deposits from and debt to customers 1 Other debt 6,761 5,999 2,710 Total liabilities 6,761 5,999 2,710 Share capital 36,220 36,220 36,183 Share premium 127,036 127,036 127,036 Other paid-in equity 1,108 446 43 Retained earnings

• 52,697
• 36,201
• 21,706

Total equity 111,667 127,501 141,554 Total equity and liabilities 118,429 133,500 144,264

Amounts in NOK thousand 30.06.2019 31.12.2018 30.06.2018 Share capital 36,220 36,220 36,183 Share premium 127,036 127,036 127,036 Other equity

• 51,588
• 35,755
• 21,664

Total equity 111,667 127,501 141,554 Other intangible assets

• 5,728
• 5,838
• 6,487

Deferred tax assets Common equity tier 1 (CET 1) 105,940 121,663 135,068 Tier 1 capital 105,940 121,663 135,068 Total capital 105,940 121,663 135,068 Risk-weighted assets Loans and deposits with credit institutions 9,142 10,928 20,772 Loans to customers 29,955 37,500 986 Certificates and bonds Other assets 5,291 3,291 2,931 Credit risk 44,389 51,719 24,688 Operational risk 5,212 16,067 16,067 Risk-weighted assets 49,601 67,786 40,755 Common equity tier 1 ratio (%) 213.6 % 179.5 % 331.4 % Tier 1 ratio (%) 213.6 % 179.5 % 331.4 % Total capital ratio (%) 213.6 % 179.5 % 331.4 % LCR 153 % 217 % 1509 %

15

Ownership & warrant structure1

Note 1: As registered in VPS 30 April 2019.

Aligned interests among key stakeholders

Top 30 shareholders Share distribution Warrant distribution

36.2m shares 6.7m warrants 18 % 19 % 63 %

• Mgmt. &

employees Board of Directors Others

70 % 28 % 2 %

• Mgmt. &

employees Board of Directors Others # Investor Name Role # shares % Warrants 1 AMESTO GROUP AS Spandow Family Chairman 3,618,182 10.0 % 1,875,000 2 ALLIANCE VENTURE SPRING AS Bente Loe Board member 2,824,406 7.8 % 3 PRIMERA AS Per Christian Goller Chief Growth Officer 1,600,000 4.4 % 1,750,000 4 MP PENSJON PK 1,596,996 4.4 % 5 STRØMSTANGEN AS 1,595,400 4.4 % 6 NORUS AS 1,010,000 2.8 % 7 REDIVIVUS AS 950,000 2.6 % 8 SIX SIS AG 877,470 2.4 % 9 TOLUMA INVEST AS 877,470 2.4 % 10 COSIMO AS 801,000 2.2 % 11 SIRKELBUE AS Karl Erik Asbjørnsen Technologist 800,000 2.2 % 500,000 12 ØSD FINANS AS Øystein Dannevig Chief Analytics Officer 800,000 2.2 % 13 UNIVERSAL PRESENTKORT AS 797,699 2.2 % 14 SES AS 797,699 2.2 % 15 DISRUPTOR AS Israr Khan Chief Digital Officer 700,000 1.9 % 600,000 16 SANDSOLO HOLDING AS 688,565 1.9 % 17 NORDIC PRIVATE EQUITY AS 668,366 1.8 % 18 AREPO AS 658,102 1.8 % 19 SVINDAL AKSEL LUND 650,000 1.8 % 20 SPORTSMAGASINET AS 634,709 1.8 % 21 INCHOATE AS Heiki Strengelsrud Chief Customer Officer 610,000 1.7 % 500,000 22 ENIMAE AS 600,000 1.7 % 23 ELIGERE AS Lene Gridseth Chief Operating Officer 573,200 1.6 % 375,000 24 BLUE MOUNTAIN CAPITAL AS Kjetil S. Barli Chief Financial Officer 500,000 1.4 % 375,000 25 SIDEKICK INVEST AS Katrine Olsen Chief Risk Officer 500,000 1.4 % 375,000 26 OSMANI VENTURE CAPITAL AS 478,221 1.3 % 27 MERRILL LYNCH 375,000 1.0 % 28 STRIGEN AS 354,367 1.0 % 29 ASTEROIDEBAKKEN AS 319,079 0.9 % 30 KLØVNINGEN AS 300,000 0.8 % Others 8,664,153 23.9 % 312,500 Total 36,220,084 100.0 % 6,662,500 Ownership