Aprila Bank ASA | Q2 2020 | 14 August 2020 Disclaimer - - PowerPoint PPT Presentation

Aprila Bank ASA | Q2 2020 | 14 August 2020

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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.

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Table of contents

Overview

01 02 03

Highlights Key figures Outlook

04

Appendix

4

Aprila in brief

Note 1: Annualised gross income in the period divided by average number of unique customers in the period. | | Note 2: From Q4 2020.

Product and technology company aiming to reinvent SME banking and enable new job creation

Making credit available for a large underserved SME market

• Offering credit to customers where they are, when they need it
• Transparent and understandable pricing; no access fees or lock-in periods
• Credit assessment based on live data from online accounting systems

Leveraging technology to create competitive advantage

• Scalable architecture developed in-house; integrations through APIs
• In-house developed data warehouse; enables data-driven decision making and

facilitates powerful predictive analytics

• Real-time credit scoring and pricing based on machine-learning technology

Access to ~130,000 SMEs from Q2 2020 and four products from Q4 2020

• Commenced operations in Q2 2018, launching spot factoring integrated in

Tripletex (online accounting system)

• Credit line up to NOK 500k launched in Tripletex on 16 Dec 2019 and in own

channels (kassekreditt.no) 20 Dec 2019

• Home rental product (in cooperation with FINN.no) and Pay with Aprila to be

launched in H2 2020

Key figures

# of SME customers

(12 Aug 2020)

2,021

Yield on net loans

(Q2 20, annualised)

21%

Funding cost

(p.a.)2

1.75%

Average net loans per customer

(NOK, 30 Jun 2020)

~41,000

Gross income per customer

(NOK, annual run-rate June 20)1

~12,000

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Highlights Q2 2020

Note 1: Gross income from lending divided by average net loans in the period.

Summary

Q2 20

50% customer growth in the quarter and 125% year-to-date

• At the end of Q2 20, Aprila had 1,812 customers
• Net 605 customers (+50%) were added in the quarter
• During the first half of 2020, Aprila has added net 1,010 new customers (+125% vs. year-end 2019)

Completed private placement, launched in Fiken and signed agreement with FINN.no

• Aprila successfully completed a private placement of NOK 75 million
• Fiken, an online accounting system with ~35,000 users, launched spot factoring from Aprila
• Primo July, Aprila entered into an agreement with FINN.no to offer a fully digital home rental
• marketplace. The service will launch in Q3 2020

Temporary drop in gross income in Q2 due to Covid-19

• Aprila implemented measures to reduce the credit risk at the end of the first quarter, resulting in

lower approval rates for spot factoring in March, April and May, and hence, a decline in purchased amount in the second quarter

• The credit rules were eased medio May and spot factoring volumes returned to pre Covid-19 level

in June

• The bank’s interest income took a planned hit in April and May as a result of a Covid-19 campaign

with 0.49% monthly interest rate on its credit line (67% discount compared to the ordinary 1.49% monthly interest rate)

LTM

1

NOKm

Q1 20 Q2 20 Purchased amount 97 80 Gross loans 58 76 Gross income from lending 3.9 3.5 Total income 2.6 2.4 Pre-tax operating profit

• 12.8
• 12.1

Yield on avg. net loans 32 % 21 %

NOKm

Q2 19 Q2 20 Purchased amount 307 380 Gross loans 32 76 Gross income from lending 7.6 13.0 Total income 5.8 9.2 Pre-tax operating profit

• 31.0
• 45.0

Yield on avg. net loans 24 % 26 %

LTM ending

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Table of contents

Overview

03

Key figures Outlook

02 01

Highlights

03 04

Appendix

7

Key figures

Note 1: Customers at EOP, net of closed accounts. | | Note 2: Nominal amount of invoices purchased in the period. | | Note 3: New customers onboarded in the period, net of closed accounts.

1,812 customers and NOK 76m in gross loans at EOP

Gross loans by product Net customers accumulated1 Net new customers3

# #

Key comments

• 1,812 customers at EOP
• 125% growth from year-end 2019
• Net 605 new customers in Q2 (+50%)
• Visma eAccounting accounted for ~35%
• f the customers added in the quarter,

followed by Fiken with ~30%, own channels with 16%, Tripletex with 14% and other channels with ~5%

• NOK 80m purchased
• Credit rules were tightened primo

March; resulted in lower approval rates in March, April and May

• The credit rules were eased medio May

and spot factoring volumes returned to pre Covid-19 level in June

• NOK 76m in gross loans at EOP of which

credit line accounted for 63%

NOK million NOK million

Purchased amount2

2 37 100 81 89 90 112 97 80

Q2 18 Q3 18 Q4 18 Q1 19 Q2 19 Q3 19 Q4 19 Q1 20 Q2 20

88 237 142 95 57 73 110 405 605

Q2 18 Q3 18 Q4 18 Q1 19 Q2 19 Q3 19 Q4 19 Q1 20 Q2 20

1 23 40 32 32 32 35 32 27 7 27 48 1 23 40 32 32 32 42 58 76

Q2 18 Q3 18 Q4 18 Q1 19 Q2 19 Q3 19 Q4 19 Q1 20 Q2 20 Credit line Spot factoring

88 325 467 562 619 692 712 993 1,337 45 128 311 45 86 164 88 325 467 562 619 692 802 1,207 1,812

Q2 18 Q3 18 Q4 18 Q1 19 Q2 19 Q3 19 Q4 19 Q1 20 Q2 20 Both Credit line Spot factoring

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57 236 416 333 344 334 371 226 159

Q2 18 Q3 18 Q4 18 Q1 19 Q2 19 Q3 19 Q4 19 Q1 20 Q2 20

Spot factoring | Active customers

Note 1: Active customers = customers who have sold one invoice or more. | | Note 2: Net active customers acc. = Active customer accounts at EOP. | | Note 3: Purchased amount in the period divided by customers active in the period. | | Note 4: conversion rate = approval rate * take up rate

~57% of the spot factoring customers have sold invoices

Purchased per active customer account3 Active customers1 by # of sold invoices Purchased amount by customer industry Active customers2 vs. total net customers Key comments

• Construction, services and retail

accounted for 75% of purchased amount in Q1 (75% in Q1 20)

• 70% of the active customers sold two

invoices or more (75% in Q1 20)

• 857 of 1,501 open customer accounts

(57%) had sold invoices at EOP

• 507 customers sold invoices in Q2 (432 in

Q1 20)

• NOK 159k purchased per customer active

in the period

• The dip in H1 20 is a result of:
• lower invoiced amount per customer

(-20% in both Q1 and Q2 vs. Q4 19)

• a (relatively) steep increase in the

number of new active customers

• lower conversion rate4

NOK 80m

14 % 35 % 46 % 40 % 46 % 40 % 47 % 36 % 36 % 52 % 35 % 36 % 40 % 35 % 39 % 29 % 39 % 34 % 34 % 29 % 17 % 20 % 19 % 21 % 24 % 25 % 30 %

Q2 18 Q3 18 Q4 18 Q1 19 Q2 19 Q3 19 Q4 19 Q1 20 Q2 20 >5 2-5 1

25 134 256 326 379 441 514 670 857 63 191 211 236 240 251 243 409 644 88 325 467 562 619 692 757 1,079 1,501 28 % 41 % 55 % 58 % 61 % 64 % 68 % 62 % 57 %

Q2 18 Q3 18 Q4 18 Q1 19 Q2 19 Q3 19 Q4 19 Q1 20 Q2 20 Inactive customers Total net customers Net active in %

33 % 26 % 16 % 11 % 14 %

Construction Services Retail ICT Others

# NOK thousand # NOK million

9

25% 25% 15% 9% 7% 19%

Construction Services Retail Real estate ICT Others

Spot factoring | 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.

Strong growth in available volume (+40%)

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

NOK million NOK million % # days

Key comments

• Available invoiced amount1 in Q1 amounted to

NOK 1.4 bn, +40% compared to Q1

• With a purchased amount of NOK 80 million, the

conversion rate4 (in NOK) was 6% (10% in Q1)

• The decline in conversion rate is a result of

the tightened credit rules (lower approval rate) and lower take-up rate

• VWA margin: 3.23% (3.16% in Q1)
• VWA granted days in Q4 20: 20.6

NOK 80m

14 225 563 592 766 787 964 969 1,370

Q2 18 Q3 18 Q4 18 Q1 19 Q2 19 Q3 19 Q4 19 Q1 20 Q2 20

2.2 %2.3 % 2.6 %2.6 %2.6 %2.5 % 3.0 %3.2 %3.2 %

Q2 18 Q3 18 Q4 18 Q1 19 Q2 19 Q3 19 Q4 19 Q1 20 Q2 20

16.6 23.5 23.3 23.7 22.9 22.2 22.6 19.7 20.6

Q2 18 Q3 18 Q4 18 Q1 19 Q2 19 Q3 19 Q4 19 Q1 20 Q2 20

10

31 % 24 % 21 % 8 % 5 % 11 %

Construction Services Retail Real estate ICT Others

Credit line | Key figures

475 customer accounts opened since medio December 2019

Customer accounts Average outstanding amount per account Outstanding amount by industry Average drawdown (per account with draw-down)

# NOK million NOK thousand NOK thousand

Key comments

• 475 credit line accounts at EOP, of which
• 47% sourced from Tripletex
• 27% from own channels
• 21% from Visma eAccounting
• 5% from other channels
• NOK 101k outstanding per account at EOP
• On average NOK 182k drawn by customers

with draw-down

NOK 48m

74 124 101

Q2 18 Q3 18 Q4 18 Q1 19 Q2 19 Q3 19 Q4 19 Q1 20 Q2 20

160 182 182

Q2 18 Q3 18 Q4 18 Q1 19 Q2 19 Q3 19 Q4 19 Q1 20 Q2 20

42 146 263 48 68 212 90 214 475 47% 68% 55%

Q2 18 Q3 18 Q4 18 Q1 19 Q2 19 Q3 19 Q4 19 Q1 20 Q2 20 Credit line accounts without draw-down at EOP Credit line accounts with draw-down at EOP Net active in %

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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.

Loan impairments and losses of NOK 1.1m in Q2

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

NOK million NOK million

Key comments

• LLPs of NOK 2.4m / 3.2% of gross loans at EOP

(2.4% in Q1 20)

• DPD >30: 3.0% of gross loans
• The improvement is primarily a result of the

change in the product mix, from 100% spot factoring in Q3 19 to 36% in Q2 20

• DPD > 30 for spot factoring has however also

declined ~15% in Q2 (from NOK 1.4m to NOK 1.2m)

• Gross defaulted loans were NOK 1.5m
• Coverage ratio2 of 160%
• The elevation in this ratio is caused by the

new product mix; credit line accounts for a relatively large portion of the LLPs, but no exposures were default at EOP Q2 20

• Total loan losses of NOK 1.1m in Q2 of which NOK

1.0m in LLPs and NOK 0.1m in net realised losses

% NOK million

• As of 30 Jun 2020, Aprila had purchased 24,998 invoices

LTD with a total nominal value of NOK 688m

• Total recognised spot factoring losses LTD amounted to

NOK 3.6m (0.53% of purchased amount) and relates to 62 claims (0.25% of all purchased invoices)

0.1 0.1 0.1 0.1 0.1 0.3 0.6 0.2 0.0 0.1 0.1 0.1 0.4 0.7 0.8 1.9 0.8 0.6 1.1 0.7 1.0 0.0 0.1 1.1 1.9 0.9 0.8 1.3 1.4 2.4

Q2 18 Q3 18 Q4 18 Q1 19 Q2 19 Q3 19 Q4 19 Q1 20 Q2 20 Stage 1 Stage 2 Stage 3

0.0% 1.4% 13.5% 12.3% 7.7% 8.6% 6.6% 6.4% 3.0%

Q2 18 Q3 18 Q4 18 Q1 19 Q2 19 Q3 19 Q4 19 Q1 20 Q2 20 31-60 61-90 >90

0.0 0.1 1.0 0.9 0.7 0.3 0.9 1.2 1.1

Q2 18 Q3 18 Q4 18 Q1 19 Q2 19 Q3 19 Q4 19 Q1 20 Q2 20

0.9 2.5 1.2 0.9 1.5 0.9 1.5 123 % 78 % 74 % 85 % 82 % 153 %160 %

Q2 18 Q3 18 Q4 18 Q1 19 Q2 19 Q3 19 Q4 19 Q1 20 Q2 20 Gross defaulted loans Coverage ratio

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Table of contents

Overview Key figures Outlook

01

Highlights

03 02 04

Appendix

13

Timeline

Note 1: Five ERP systems, own channels and FINN.no | | Note 2: ERP / online accounting systems, online classifieds (FINN.no) etc..

Aprila in 2020: expanding from one product in one distribution channel to four products and seven channels1

Q4-19: + ~15,000 Streamline Scale up Expand 2018 2020 2019 2021 →

Distribution

Digital platforms2 Accounting offices Own channels

Products

Spot factoring Credit line Pay With Aprila

Funding

Equity Deposits (~2% p.a.) Q2-18: ~40,000

Customer exposure through platforms

Q1-20: + ~40,000 Q2-20: + ~35,000 Setup Home rental

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Priorities in H2 2020

Expand value proposition

• Launch B2C spot factoring
• Launch first version of Pay With Aprila
• Continue to improve the value proposition to partners

Strengthen distribution

• Launch Finn enkel utleie
• Launch new version of aprila.no
• Accelerate marketing efforts

Build competitive advantage

• Automate > 50% of customer onboardings
• Streamline the process for customer onboarding that requires human touch
• Continue to improve the quality of credit decisions by adding new data sources and improving data

quality and models

H2 2020

15

Financial outlook

Note 1: ~40,000 Tripletex customers. | | Note 2: ~130,000 customers. | | Note 3: Of which ~2,500 customers via ERP (130 000 customers in Tripletex, Xledger, Uni Economy, Visma eAccounting and Fiken) and ~1000 customers in other channels. | | Note 4: Per average number of customers. YE 2019 = run-rate Q4 19. Q2 20 EOP = run-rate June 20. YE 2020 = estimated run-rate Q4 20.

Annual run-rate of NOK 70m in gross income at year-end and break-even in Q2 21

802

2% of customer exposure1

3,500

~2% of customer exposure3

17,748 ~20,000 14.2 ~70

# of customers

End of period

YE 2019 YE 2020E

Gross income per customer

Annual run-rate4 (NOK)

Annual gross income

Run-rate (NOKm)

• New partners
• New products
• In-house sales
• Increased approval rate
• Increased credit line limits
• Purchasing B2C invoices

Drivers

Break-even expected in Q2 21

1,812

~1.4% of customer exposure2

11,730 21.3

Q2 20 EOP

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Table of contents

Overview Key figures Outlook

01

Status

03

02

04

Appendix

17

Income statement & general administrative expenses

Income Statement General administrative expenses

Q2 20: NOK 5.8m

Amounts in NOK thousand Q2 2020 Q2 2019 YTD 2020 YTD 2019 2019 Interest income 3,366 2,346 7,224 4,475 10,465 Interest expense 561 20 917 38 562 Net interest income 2,806 2,326 6,307 4,436 9,902 Income commissions and fees 148 89 284 170 378 Expenses commissions and fees 859 721 1,941 1,357 3,019 Net commissions and fees

• 711
• 631
• 1,658
• 1,186
• 2,642

Net gains / losses (-) on certificates, bonds and currency 347 96 346 122 323 Other income Total income 2,443 1,791 4,996 3,372 7,583 Salary and other personnel expenses 6,317 3,983 13,630 10,275 24,322 General administrative expenses 5,843 2,977 11,592 7,043 14,828 Total salary and administrative expenses 12,160 6,960 25,222 17,318 39,150 Ordinary depreciation 1,353 485 2,458 954 2,227 Total operating expenses excl. losses on loans 13,513 7,445 27,680 18,272 41,377 Losses on loans 1,075 708 2,227 1,597 2,777 Pre-tax operating profit

• 12,145
• 6,362
• 24,911
• 16,496
• 36,570

Tax Profit after tax

• 12,145
• 6,362
• 24,911
• 16,496
• 36,570

Earnings per share (NOK)

• 0.32
• 0.18
• 0.68
• 0.46
• 1.01

Diluted earnings per share (NOK)

• 0.27
• 0.15
• 0.57
• 0.38
• 0.85

Amounts in NOK thousand Q2 2020 Q2 2019 YTD 2020 YTD 2019 2019 External services 2,248 1,199 4,766 3,272 6,488 IT operations 527 799 1,448 1,825 3,959 Rental of premises 569 309 1,023 554 1,277 Sales and marketing 1,758 77 2,744 165 702 Credit information 128 100 246 167 411 External audit and related services 219 188 188 Credit insurance 67 91 119 131 288 Other operating expenses 545 403 1,028 742 1,515 Total general administrative expenses 5,843 2,977 11,592 7,043 14,828

38 % 30 % 9 % 10 % 13 %

External services Sales and marketing IT operations Rental of premises Other

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Balance sheet & regulatory capital

Balance Sheet Regulatory capital

Amounts in NOK thousand 30.06.2020 31.12.2019 30.06.2019 Loans and deposits with credit institutions 95,182 60,593 45,711 Net loans to customers 73,746 40,885 31,463 Certificates and bonds 55,875 45,470 30,235 Other intangible assets 19,023 12,700 5,728 Deferred tax assets Fixed assets 5,104 5,868 2,711 Other receivables 7,808 4,522 2,580 Total assets 256,737 170,038 118,429 Deposits from and debt to customers 103,552 62,194 1 Other debt 14,135 15,642 6,761 Total liabilities 117,687 77,836 6,761 Share capital 44,590 36,220 36,220 Share premium 190,309 127,036 127,036 Unregistered Share capital 37 Other paid-in equity 1,832 1,680 1,108 Retained earnings

• 97,682
• 72,771
• 52,697

Total equity 139,050 92,202 111,667 Total equity and liabilities 256,737 170,038 118,429 Amounts in NOK thousand 30.06.2020 31.12.2019 30.06.2019 Share capital 44,590 36,220 36,220 Share premium 190,309 127,036 127,036 Other equity

• 95,850
• 71,054
• 51,588

Total equity 139,050 92,202 111,667 Other intangible assets

• 19,023
• 12,700
• 5,728

AVA adjustment

• 56
• 45

Deferred tax assets Common equity tier 1 (CET 1) 119,972 79,456 105,940 Tier 1 capital 119,972 79,456 105,940 Total capital 119,972 79,456 105,940 Risk-weighted assets Loans and deposits with credit institutions 19,036 12,119 9,142 Loans to customers 56,571 32,219 29,955 Certificates and bonds 2,518 1,502 Other assets 12,911 10,390 5,291 Credit risk 91,037 56,230 44,389 Operational risk 9,669 9,669 5,212 Risk-weighted assets 100,706 65,899 49,601 Common equity tier 1 ratio (%) 119.1% 120.6% 213.6% Tier 1 ratio (%) 119.1% 120.6% 213.6% Total capital ratio (%) 119.1% 120.6% 213.6% Leverage ratio (%) 49.1% 50.0% 94.0% LCR 1205 % 2162 % 153 %

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Ownership & warrant structure1

Note 1: As registered in VPS 11 August 2020.

Aligned interests among key stakeholders

Top 30 shareholders

44.6m shares 6.7m warrants

Selected shareholders

Investor Selected current / previous holdings

Share distribution Warrant distribution

14 % 18 % 68 %

• Mgmt. &

employees Board of Directors Others

64 % 28 % 8 %

• Mgmt. &

employees Board of Directors Others # Investor Name Role # shares % Warrants 1 AMESTO GROUP AS Spandow Family Chairman 4,284,848 9.6 % 1,875,000 2 ALLIANCE VENTURE SPRING AS Bente Loe Board member 3,174,406 7.1 % 3 MP PENSJON PK 1,930,329 4.3 % 4 STRØMSTANGEN AS 1,817,622 4.1 % 5 PRIMERA AS Per Christian Goller Chief Growth Officer 1,630,000 3.7 % 1,750,000 6 SES AS 1,175,000 2.6 % 7 REDIVIVUS AS 1,154,008 2.6 % 8 FJ LABS 1,099,400 2.5 % 9 NORUS AS 1,016,690 2.3 % 10 COSIMO AS 983,871 2.2 % 11 AREPO AS 907,747 2.0 % 12 UNIVERSAL PRESENTKORT AS 897,699 2.0 % 13 SVINDAL AKSEL LUND 874,545 2.0 % 14 SIRKELBUE AS Karl Erik Asbjørnsen Technologist 800,000 1.8 % 500,000 15 ØSD FINANS AS Øystein Dannevig Chief Analytics Officer 800,000 1.8 % 16 SIX SIS AG 777,470 1.7 % 17 DISRUPTOR AS Israr Khan Chief Product & Tech Officer 730,000 1.6 % 600,000 18 SKIPS AS TUDOR 722,226 1.6 % 19 ENIMAE AS 667,300 1.5 % 20 SPORTSMAGASINET AS 652,497 1.5 % 21 NORDA ASA 650,000 1.5 % 22 SANDSOLO HOLDING AS 634,900 1.4 % 23 INCHOATE AS Heiki Strengelsrud Growth Manager 610,000 1.4 % 500,000 24 ELIGERE AS Lene Gridseth Chief Operating Officer 573,200 1.3 % 375,000 25 STRIGEN AS 558,798 1.3 % 26 KLØVNINGEN AS 535,350 1.2 % 27 OSMANI VENTURE CAPITAL AS 533,776 1.2 % 28 BLUE MOUNTAIN CAPITAL AS Kjetil S. Barli Chief Financial Officer 530,000 1.2 % 375,000 29 ASTEROIDEBAKKEN AS 522,105 1.2 % 30 ALPINE CAPITAL AS 504,940 1.1 % Others 12,841,746 28.8 % 687,500 Total 44,590,473 100.0 % 6,662,500 Ownership