2021
Annual Report
Part 1 - Annual review
Prolog 04
Multitude’s values 06
Remarks from the CEO 08
Meeting: Multitude - The FinTech pioneer 14
Why investors trust Multitude 16
SweepBank Tribe 18
Ferratum Tribe 24
CapitalBox Tribe 30
ESG report 2021 36
Meeting our people 82
Information for shareholders 92
Legal and regulatory environment 100
Part 2 - Financial review
Board of directors report (unaudited) 106
Financial highlights 108
Key developments and process in 2021 112
Shares of company 119
Group consolidated financial statements (audited) 124
Multitude SE standalone financial statements (audited) 182
Contents
3
Prolog
The state of being many
F
rom the origins of being only Ferratum as a consumer lender, the Group has evolved into a
fully regulated financial platform. In 2021, the foundation of the next, advanced era of business
was laid – to be more precise, of businesses. To portray and serve what the Group has become
and wants to reach, it was rebranded and transformed into Multitude Group. The name Multitude
emphasises the broadness of reach, potential, and positive impact on the financial world – the
state of being many.
Multitude has three independent business units on its growth platform: Ferratum as a con-
sumer lender, CapitalBox as a business lender, and SweepBank as a financing and shopping app.
Through 16+ years in purely digital financial technology, Multitude can support and enable the
success of these, and more, next generation of financial businesses through scalable operations.
This report reveals more about this change, its reasons, and the opportunities it brings. In
2021, we took substantial steps toward our vision of becoming the most valued financial ecosys-
tem. The learnings from our past have been utilized to build the strongest today. Supported by the
past, and guided by the future.
4
The Multitude Group
• Brings a solid foundation of expertise and operations into new
financial service offerings.
• Enables growth and scale for the business units on its platform.
• Creates synergies for added value, increased customer satisfaction,
and higher earnings for its independent business units.
5
Multitude’s
values
6
Customer centricity
Our customers are at the heart of what we do, why we exist, whom we first serve, and serving
them is why we have a right to be in the market. In everything we do, we want to create solutions
that are made by thinking as if we were looking at them through the customers’ eyes and are
striving to give them the best possible customer experience.
Entrepreneurial spirit
We embrace the entrepreneurial spirit that has guided us since the beginning and that our
employees cherish so much with us. We are curious to learn new things, innovative in finding
solutions, move fast, stay agile, have low hierarchies, avoid unnecessary bureaucracy, and think
about spending money as if it was coming out of our own pocket.
Candour
We communicate openly, transparently, and honestly with each other and all our stakeholders
and do so with respect. We make no excuses and are straightforward in what we do and what we
say. We are realistic with our planning and speak up when we see issues or risks.
Respect
It is about how we feel about others and how we treat them. We respect our customers, both
internal and external, our colleagues, our partners, our investors, and all our other stakeholders
evenly in all our actions and communications. This respect is also shown by taking accountability
for our actions in a wider social context, taking care of mother nature’s limited resources and
conducting our business in a sustainable manner.
Winning teams
We can only achieve the highest outcomes by working together in winning teams. In these
teams, we support each other, stand up for each other and can make mistakes without being
judged, but we also together learn from them. We have each other’s back, and like a family across
teams, we stick together, fight together, and when we achieve our goals, we celebrate together.
7
Remarks
from the CEO
Dear Shareholders,
T
he past year was one of transformation for us – a transformation onto the next stage of
financial disruption. We successfully implemented our new, agile way of working across the
whole Group, executed our new business strategy that has led us onto a new growth path, and
rebranded the Group from Ferratum to Multitude.
As many times before during our 16+ years of history, in 2021, our resilience was tested. This
time it was the ongoing COVID-19 pandemic. I am proud to state and show that our ability as
a team to adapt, evolve and transform successfully was evident. This is shown by each of our
business units growing profitably again. We are also proud that we could stand by our customers
in these challenging times. The thank you for these achievements must go to our fantastic team
across the globe, and naturally also to our customers, stakeholders and investors.
Experience and data of 16 years as rocket fuel to true disruption
Last year, I wrote about how we believe that true disruption in finance is yet to come and that
such disruption across industries has only ever been achieved through scalable platforms. This, is
what we have built this year.
To explain how we got to this point and show how every step of our 16-year journey has led
us to a pole position in the race of disrupting finance as an industry, allow me to describe our
evolution briefly. We have evolved from our roots in pure consumer lending into a growth platform
that caters and nurtures a wider variety of financial services. Ferratum as a brand is still with us,
now solely used by our oldest business unit, consumer lending. In addition, we have CapitalBox
as a business lender, and SweepBank as a shopping and financing app. As independent units,
each can serve and execute on their own unique customer promise and experience. All of these
independent business units, and in the future more, gain in scale and from strong tailwind by
utilising the foundational skills, experience, and know-how in providing digital financial services
that we have built over more than 16 years.
S
weepBank has already moved into monetisation phase and strongly benefits from the growing
trend of online shopping. We have reached impressive unit-level profitability, even though
the overall EBIT was negative due to investing in the brand and the development of the app.
Our approach to mobile banking is proven to be unique, as SweepBank has already given us a
revolutionary ARPU (average revenue per user) in the industry. Our ARPU in 2021 was at EUR
187.5, which is as much as ten times higher than most of the neo banks in Europe. SweepBank is
8
also different by being a mobile bank with a freemium credit card to finance shorter-term needs.
Customers have praised the credit card, and our app reached the top position in app stores in
Finland after the launch. Now, we are ready to launch the card in Germany in 2022. In addition,
SweepBank offers Prime Loans for larger purchases. Overall, revenues nearly tripled in the past
year, reaching EUR 9.0 million in 2021, and we expect the growth to stay strong also going forward.
We are excited to see that CapitalBox has found its growth mode in loan sales again and
is already one of the the leading players in its field as a digital business lender in the markets it
operates in. Paired with tailwind for sales through a post-COVID-19 boost in the economy, new
services, such as Purchase Finance that was launched in Finland 2021, and the launch of the
Credit Line in Sweden, give additional opportunities for growth through further roll-outs in 2022.
Improvements in our automated decision process, and the simplification of the customer process
as a whole, have already shown increased customer satisfaction and loan sales. In 2021, CapitalBox
recorded revenues of EUR 22.0 million. Net AR was at EUR 75.4 million, with loan sales having
increased strongest in Q4.
Last but certainly not least, Ferratum achieved great results with three consecutive quarters
of revenue growth and strong profitability again. It is important to note that even though this
business unit is our oldest, it is still growing in our focus markets, and we plan to expand it further. I
am also proud that even after all these years, Ferratum continues to satisfy its customers, showing
a whopping 94% customer satisfaction score.
The changes in our brands have brought more clarity into customer communication and
allowed us to become more precise in our customer promises. Our new strategy and operations
have resulted in a solid position against the competition.
Strong turnaround
As Multitude, we have shown a revenue turnaround since Q2 2021, recording average growth of
1.8% towards Q4 2021. Yearly revenue decreased from EUR 231 million in 2020 to EUR 214 million
in 2021. The overall lending portfolio across all business units has grown from EUR 361 million to
EUR 444 million, translating to 23.0% growth year on year. The stronger revenue growth over the
loan portfolio proves our cost scalability.
We improved payment behaviour and decreased our impairment losses over net accounts
receivable to 16.2%, compared to 25.2% in 2020. We improved our asset quality and have a strong
cash and equity position at EUR 302 million and EUR 170 million respectively. Our consolidated
interest-bearing debt, excluding customer deposits stood at EUR 145 million at the end of the year.
A perpetual bond issue in Q4 allows us increased flexibility in financial planning. In addition, our
cost of debt capital has been reduced to a five-year low and stands at 1,76% at the end of the year
2021, excluding the perpetual bond.
Across all independent business units within Multitude - or as we call them, tribes - we have
successfully implemented our agile way of working that we laid the foundation for in 2020. This
new way of working has clarified responsibilities and internal ways of operating. It has allowed us
to serve our customers better and faster, and allowed us now to stand on the strongest foundation
for scalability so far.
9
Jorma Jokela
Founder & CEO
Everything we do, we do to serve our customers. I am proud to state that in addition to the
higher-than-average satisfaction levels across our brands, a further proof point to our highest
level of customer experience is that contacts handled by our customer service agents decreased
by 31% in 2021 and that our chatbots can handle 71% of all enquiries without human involvement.
This means that our processes work well and that our customers get 24/7 omnichannel service
whenever they need it.
As a purely digital player from the beginning, we have always operated in an environmentally
sustainable manner. We will continue building on our achievements so far, and with our new ESG
strategy, metrics and framework, we want to have an even stronger ESG standing going forward.
The new framework has been approved by the Board and is built upon our purpose and mission
as the foundation – changing the world by making banking and finance accessible to everybody
and positively impacting society. Our mission as Multitude is to democratise financial services
through digitalization, making them fast, easy and green. Furthermore, the framework includes our
ESG goals on Group and tribe level, ESG values, the process and governance, and reporting and
engagement. We will build on further context and content throughout 2022 and beyond.
Ready for a new era of finance
In our first-ever annual report as a stock listed company in 2014, I stated that we want to offer
more than money to everyone; our promise to customers is that we provide simple, easy-to-use
product applications, fast, and transparent, confidential loan processes. I am extremely happy
that I can state we have done precisely that and beyond. With the historical year of 2021 as the
year of substantial transformation, we have built the strongest business foundation so far and are
ready for a new era of financial disruption. Even though we have transformed and will disrupt the
industry, our customer promise remains the same as we stated in 2014.
We, as Multitude, are committed to returning to profitable growth, projecting our EBIT to grow
by 50% p.a. in 2022-2024. We will continue driving organic, profitable growth and increasing the
level of automation in our business to allow even greater scale. In addition, we are exploring new
opportunities in terms of geographies, product partners, and M&A to accelerate further growth.
One might wonder, what it is that makes a company versatile and stable at the same time?
I believe it is our entrepreneurial spirit that allows us to fail and learn fast. It is that we have
been around for so long, that we have seen and navigated successfully through so many changes
together as a team already. This allows us an expedited ability to react to changes and find the
right solutions. It is a diverse team of exceptional talent. It is that we share one goal – the goal
of becoming the most valued financial ecosystem. This ecosystem is what we have been building
toward over all these years, and it is what we will accomplish.
10
11
12
Multitude
Meeting
Multitude –
The FinTech
pioneer
14
I
t is commonly known that access to finance
and banking services is vital to the functioning
of our society. What is less widely known is that
lack of access to it is not only a problem in the
developing world. Due to cost, bureaucracy
and tightening regulation, access to financial
services is getting increasingly difficult for the
average person – the majority of our popu-
lation. According to World Savings and Retail
Banking Institute, close to 40 million EU citizens
are outside the banking mainstream.
As a result, an ever-increasing amount of
people have a decreasing number of options
available. At Multitude, we create a three-fold
positive effect by giving these people access to
finance. The businesses we foster give individu-
als access to bank accounts and can help them
out of financial distress; they allow business
ideas to prosper and build employment; and
help develop financial acumen that can lead to
economic prosperity - even wealth.
The Internet, digitalisation and automation
started to decrease the costs of providing finan-
cial services some 20 years ago as time-con-
suming processes could be automated, and
access to financial services became location
agnostic. In 2005, Founder and CEO Jorma
Jokela read an article about the Grameen Bank
in Bangladesh – a bank that served the under-
served population with small loans. The idea
of combining finance and mobile handsets in-
spired him, as it was an unestablished market in
the western world at that time. He understood
that this digital distribution of financial services
could cater to Europe’s underserved people.
Our journey to positive impact
In 2005, Ferratum as a Finnish FinTech
pioneerwas born. It had the mission to disrupt
financial services by digitalising consumer
lending and bringing the service online, fast,
and easy. Ferratum is still a part of what has
evolved into Multitude Group. Today, Multitude
is a fully regulated growth platform for financial
technology with the ambition to become the
most valued financial ecosystem. This vision is
backed by the +16 years of solid track record in
building and scaling financial technology. Multi-
tude enables a range of sustainable banking and
financial services to grow and scale through its
full European banking license, profound know-
how in technology, regulation, cross-selling,
and funding. Currently, it has three independent
business units on this growth platform: Ferra-
tum as a consumer lender, CapitalBox as a busi-
ness lender, and SweepBank as a shopping and
financing app. Multitude and its independent
units employ over 600 people in 25 countries,
and they together generated EUR 213.7 million
in revenue in 2021. Since 2015, Multitude has
been listed on the Frankfurt Stock Exchange in
Prime Standard.
15
Multitude has:
M
ultitude has continuously delivered solid profitability since its inception in 2005, with profit
from continuing operations amounting to EUR 5.0 million and EUR 1.2 million in 2020 and
2021 despite the impact of COVID-19 pandemic in 2020.
As a countermeasure to the global pandemic, Multitude has successfully navigated through the
changing market environment in 2020 and 2021 and built an even stronger foundation of profitable
growth by transforming its operations for an even stronger foundation of scalability and agility.
Established itself with a strong foothold in a market with high entry barriers:
Multitude offers financial and banking services across segments in a highly regulated field, across
19 countries and their individual regulations. The regulatory environment makes it hard for new
businesses to enter the market, even more, to operate across borders. Multitude has repeatedly
proven to successfully navigate shifts in the regulatory environment and the market while delivering
good financial results and superior customer experience.
Independent tribes focusing on unique customer segments and unique
customer experience:
Each tribe serves an attractive, growing customer base with a uniquely tailored customer
experience. These segments range from short-term consumer loans to digital wallet users and
sophisticated SME customers.
A diversified risk portfolio:
With a diversified customer portfolio across three customer segments, 10 currencies and three
continents, Multitude is well-positioned to successfully react to regional or global changes - be
they financial, geopolitical or macroeconomic.
Why investors
trust Multitude
A solid and profitable track record
despite economic challenges
16
Loyal and growing customer base:
The overall customer base of all brands under Multitude consists of over 400,000 active customers.
Our ability to attract new customers allows us to expand further across our brands. Positive
customer satisfaction numbers across business units prove the success in keeping customers
happy, leading to predictability and recurring revenues.
Positioned itself well to transform into a platform business:
A large customer base, a vast amount of intelligent and actionable data, profound scoring know-
how, funding capabilities, KYC (know your customer) processes and solutions, and unmatched
regulatory expertise in the field, give Multitude an industry-leading position to transform into a
full ecosystem for further, exponential growth of a variety of financial services. This growth can be
reached organically and in cooperation with partners to develop value-adding, next-generation
financial services to customers.
The means to democratise finance:
Through the amount of data, knowledge and technology that the Group has built over the past 16+
years, Multitude is uniquely positioned to serve customers that have been, and still today remain,
underserved by the traditional financial institutions.
Currently active in 19 markets
17
Vision: The most valuable financial
platform
S
weepBank serves the needs of tech-savvy young adults by offering a compelling and flexible,
fully digitalised combination of shopping and financing services in one intuitive app. Sweep-
Bank’s main customer segment in consumers represents approx. 35 million potential customers
in the EU and the segment is expected to grow further. This segment of young adults expects
nothing less than a strongly personalised experience in everything they do, including financial
services. SweepBank offers exactly that and more.
This segment is currently underserved by traditional banks and neo banks. Traditional finan-
cial institutions are too bureaucratic and inflexible, and neo banks lack the experience and data to
serve them successfully from a credit risk perspective. The latter is a prime example of the benefits
of synergies created from allowing independent businesses to grow on the Multitude platform, as
SweepBank can tap into Ferratum’s 16+ years of data and experience in scoring.
Draft
SweepBank Tribe
The value creator par excellence
T
he SweepBank Tribe, the first independent business unit utilising the Multitude platform, is an
intuitive shopping and financing app. It is the newest and strongest growing venture on the
platform. SweepBank is seen as a key component in achieving Multitude’s vision of becoming the
most valued financial ecosystem. It enables connecting different financial services into one place
for customers, thus creating also cross-sell opportunities and accelerated revenue generation and
profitability.
18
The intuitive SweepBank app has been created together with its customers, based on direct
feedback and the analysis of behavioural data. This combination ensures the app is tailored to
cater maximised user experience and satisfaction.
As all business units on the platform, SweepBank builds on the three, core Multitude assets of
1. 16+ years of lending and scoring experience and algorithms build across border
2. Advanced, in-house built and owned financial technology
3. Presence and regulatory expertise in 19 markets internationally
In addition, SweepBank benefits from the ability to cross-sell and offer services to the cus-
tomers of other business units on the Multitude platform. This includes e.g. offering personal credit
cards or loans to the owners of SMEs that are customers of CapitalBox. SweepBank also benefits
from deposits on the savings accounts, which act as a means to favourable funding for the lending
business.
19
Currently, SweepBank is operational and offering Prime loans in five countries throughout the EU:
Finland, Latvia, Germany, Sweden (Prime loans launched Q1 2021), and Denmark (Prime Loans
launched Q4 2021).
Services
Credit card
The virtual only credit card of SweepBank, a Mastercard, allows financing smaller, unplanned
purchases, such as shopping online and in physical stores. The integrations with Apple Pay and
NFC payments allow easy usage online and in physical points of sale. After successful onboarding
to the app, the free card is immediately ready to use. Every customer is automatically scored during
the onboarding process and can be given a maximum credit facility of EUR 8,000. In addition to
the card being free of charge, customers have a free liability coverage for their purchases and up
to 60 days payment holiday from their purchase.
Prime Loan
Prime Loans are longer-term instalment loans of up to EUR 30,000 for consumers, with loan
maturity ranging between 1-10 years.
Bank Account
SweepBank offers a current account with 0.2% interest p.a. and a fixed-term savings account
with 1% interest p.a. (max. deposit EUR 100,000) for up to three years. The current account is
complemented with a free debit card that is instantly ready to use online and in physical stores
after successful onboarding to the app.
“SweepBank’s rapid growth in the Finnish market and the Finnish top-class fintech know-
how behind it made a great impression on us, which is why we decided to start this cooperation.
We believe that SweepBank’s ambitious goals and aim to develop the service together with its
customers will support the bank’s growth in the future as well”, says Loukia Chorafa, Marketing
Director from Mastercard.
Highlights 2021
In 2021, SweepBank grew its lending portfolio (Prime loans) from EUR 33.6 million net AR on
31 December 2020 to EUR 85.8 million by 31 December 2021, translating to 155% growth y-o-y.
The main drivers of this growth were sales channels, added geographies and rolling optimisation
of underwriting and pricing. Revenue grew from EUR 3.6 million to EUR 9.0 million in the same
period, translating to a 150% revenue growth over the year. Despite the significant growth in the
portfolio, impairment loss ratio over revenue and net AR decreased by 14.10 and 1.8 percentage
points, respectively, standing at EUR 6.2 million as compared to EUR 3.6 million in 2020.
Marketing costs increased from EUR 0.9 million in 2020 to EUR 4.6 million in 2021. SweepBank
invested strongly into marketing and launching the new SweepBank brand in this year. These
investments resulted in increasing the Prime Loan portfolio substantially, the highly successful
launch of SweepBank in Finland, and a successful re-branding of SweepBank in Q1 in Latvia, which
was previously served under the brand of Ferratum Bank. By year-end 2021, SweepBank had over
48,000 users throughout its operational markets, representing a y-o-y growth of 407.5%.
20
Macroeconomic and trends: Customers demand for a
holistic and flexible solution to finance; the increase of
online shopping due to the pandemic
Technological: Implemented, unified and reusable plug-and-
play technology that allows easy and fast roll-outs into new
markets and the scaling of new services in them
Internal: Opportunity to monetise the app and cross-sell;
ability to grow and scale the Prime Loan portfolio profitably;
roll out of the app to one of the biggest markets in Europe,
Germany, where Prime Loans are already sold
Key growth drivers:
21
Tribe CEO – SweepBank
Julie Chatterjee
S
weepBank generated 4.2% of the revenues generated on the Multitude platform, with an
average revenue per user (ARPU) of EUR 187.1. An ARPU on this level is beyond comparison
in the field of neo banks to date, which average largely at 10% of the ARPU created by
SweepBank. The Sweep- Bank APRU is a strong proof point of the value added to business units
on the Multitude platform from synergies between them.
After the successful launch of the SweepBank app in Finland in Q4, it not only surpassed
market averages in conversion, but was also listed in the top list of Google Play store and rated
top 4 financial apps in Apple App Store. Following a survey among young adults, SweepBank
launched a credit card in Q3 in Finland, which represented the dream card of the target segment,
according to a survey among them.
Outlook
R
ooted in the solid foundation that SweepBank built in 2021 for serving its customers, 2022 will
be focused on continuing to build and enhance the shopping and financing experience in the
app, and on accelerating the monetisation of its growing customer base.
Cross-selling to customers in the app is a key component of the strategy for SweepBank,
and offers great opportunities for increasing value to customers, as well as opportunities to grow
revenue streams.
In 2022, SweepBank is expected to launch the app in Germany, profitably further grow the
Prime loan portfolio, and to accelerate the growth of its credit card user base. With this growth,
the SweepBank revenue share within Multitude is also expected to grow further.
In 2022 has been the launch of Sweep Deals. Sweep Deals are promotions that give
customers discounts on their purchases with selected retailers and merchants, that SweepBank
has partnerships with in the app. Sweep Deals is expected to expand further and is seen as a key
component to customer loyalty and stickiness.
22
23
Vision: To be the first choice of
customers seeking small financial
support to meet everyday needs
T
hree services under the Ferratum brand – Micro Loan, Plus Loan and Credit Limit, allow Fer-
ratum to cater to various, immediate financial needs of individuals, such as unplanned, short-
term financing needs resulting from unexpected life events. These needs are widely underserved
by traditional financial institutions.
Tailored to a variety of situations through standardised categories, all services under Ferratum
share some attributes: they are fast, intuitive, and available online. Customers choose Ferratum for
its speed, digital customer experience, and reputation as a trustworthy and reliable partner. For
the Ferratum customer, superior customer experience means that the end-to-end digital process
is intuitive, efficient, and easy.
T
he Ferratum Tribe, an independent business unit utilising the Multitude platform, offers financial
services with the longest history in the Group - in consumer lending.
Ferratum Tribe
The everyday wingman for personal finance
24
As all business units on the platform, Ferratum builds on the three, core Multitude assets of
1. 16+ years of lending and scoring experience and algorithms build across borders
2. Advanced, in-house built and owned financial technology
3. Presence and regulatory expertise in 19 markets internationally
In addition, Ferratum customers can become SweepBank customers, and thus add value to
SweepBank by increasing its earnings. The data, customer base, and technological capabilities
and solutions gathered through Ferratum over the past over 16 years, are significant enablers for a
solid foundation for all other lending in business units across Multitude.
Micro Loan
A Micro Loan is a rapid and easy loan for the instant, short-term need and quick payback. The
application takes a few minutes with only a handful of data to insert, while the in-house developed
and automated, AI-powered scoring algorithms handle the rest. Within an average of less than 15
minutes from an approved application, the customer has the money in the bank account. Micro
Loans range from EUR 25 to EUR 1,000 and are paid back in one single instalment within 7–60
days.
25
Plus Loan
A Plus Loan is a larger loan, currently ranging from EUR 300-4,000 with maturity periods of
between 2–18 months. These longer-term instalment loans with equally distributed repayments
throughout the whole term of the loan cater to the more significant needs of individuals. The loan
application is as easy, fast, and convenient as with a Micro Loan. From the approved application,
the borrowed money is transferred within, on average, less than 15 minutes to the customers’ bank
account.
Credit Limit
Credit Limit is a pre-approved credit line, also called revolving credit, allowing customers financial
flexibility. Eligible customers are pre-approved for up to EUR 5,000 and can draw money or repay
without fixed amounts or timelines. Credit limit is similar to a credit card without a physical card.
At the end of 2021, Ferratum was active in 15 countries. In each of these markets, one or several
loan products are available.
Highlights 2021
Ferratum achieved four consecutive three quarters with positive revenue growth. From EUR
45.0 million in Q1, revenues grew to EUR 46.5 million in Q4. Net AR correspondingly grew from
EUR 264.4 million to EUR 282.6 million and the EBIT increased from 20.7% in 2020 to 23.3% in
2021. As per the new strategy, the aim is to reach a 40-60% yield, depending on the country. Year
on year, revenues decreased from EUR 200.5 million in 2020 to EUR 182.7 million in 2021. Ferratum
generated 85.5% of the revenue of all businesses on the Multitude platform in 2021, with Credit
Limit generating 80% of the revenue from the Ferratum tribe.
Ferratum continued to add new data sources and enhanced its underwriting. A further contributor
to a healthier portfolio is regular sales of non-performing loan (NPL) portfolios. As an overall result
of its operations throughout the year, Ferratum improved payment behaviour. The 90 DPD (days
past due date) improved from 86.3% in 2021 to 87.3%. These actions and results justify a positive
outlook on the continuation of successfully managed portfolios with decreasing yields and build-
ing an even healthier portfolio.
During the year, Ferratum improved and optimised its marketing mix, reducing its average cus-
tomer acquisition cost by 15% while keeping the volumes. This positive development was mainly
reached by widening acquisition channels and optimising mass media investments.
Ferratum is set on building effortless experiences that allow customers to benefit from automated
self-service while at the same time reducing their need to contact customer service. Through its in-
dustry-leading digital experience, Ferratum has a 94% customer satisfaction and 66% transactional
NPS score. In 2021, Ferratum had 31% less reach outs to customer service, than 2020. By year-end
2021, Ferratum had active, conversational chatbots serving customers 24/7. The analytics show
that by year end, these virtual AI advisors were able to resolve 71% of customer queries without
the need to transfer them to human support. Automated customer interactions are also reached
through social media’s most popular messaging channels. This allows an omnichannel customer
service that scales while reducing costs and increasing customer satisfaction.
26
Macroeconomic and trends: Growing amount of
population without access to digital and easy funding;
Increasing consumer prices leading to need of finance
Technological: New features and further enhanced
customer experience
Key growth drivers for 2022:
Internal: Further roll out and growth of Credit Limit,
the most popular product in Ferratum
27
Kristjan Kajakas
Tribe CEO – Ferratum
D
uring the year Ferratum, as per a Group wide decision for all business units, exited the UK
market as other markets are seen more lucrative at this stage. The most recent country to
become operational was Slovenia, with activities beginning in Q1 2022 and a soft launch having
been initiated in Q4 2021. Ferratum is the first and only fully digital lender in the country.
During H1, the Romanian business was migrated under the Ferratum Bank to reduce funding
costs, and Credit Limit was launched.
Outlook
Credit Limit has proven to be the preferred product among customers across geographies for
more than seven years. Currently, Credit Limit is available in nine countries, with further rollouts
planned. Ferratum will continue to develop new product features for existing products, as well as
to launch new products that contribute to future sales growth.
In addition, Ferratum is planning to further expand both inside and outside of the European
Union. Ferratum will continue its greenfield approach inside the EU, while actively looking for M&A
opportunities and the utilisation of a partnership approach outside of the EU.
28
29
Draft
Vision: To become Europe’s leading
digital SME lender
W
ith its unique, fully digitalised process, CapitalBox is a one-stop-shop for SMEs needing
short- and long-term financing and credit lines. SMEs account for 99.8% of European busi-
nesses and are widely underserved by traditional banks as their processes and offer do not match
the need of SMEs.
As a pure FinTech company, CapitalBox has created innovative technology to provide SMEs with
the fastest, most convenient access to capital available. With the mission to offer this underserved
segment financial tools and services that conventional banks are not able and willing to provide,
CapitalBox successfully serves this growing segment in an innovative way that allows it to tap into
this significant market opportunity.
With traditional financial institutions, loan applications and approvals take several weeks, or even
months, and are often rejected due to the lack of know-how in profitably scoring these smaller
T
he CapitalBox Tribe, the third independent business unit utilizing the Multitude platform, offers
small and medium-sized enterprise (SME) financing through credit lines, loans and purchase
financing.
CapitalBox Tribe
Finance for the backbone of
European economy - SMEs
30
businesses. Through automated processes that are built based on the extensive know-how and
data built over years and expert loan specialists, CapitalBox can make financing decisions within
minutes, and pay-outs as quickly as on the same day of the digital application being completed
and approved.
As all business units on the platform, CapitalBox builds on the three, core Multitude assets of
1. 16+ years of lending and scoring experience and algorithms build across borders
2. Advanced, in-house built and owned financial technology
3. Presence and regulatory expertise in 19 markets internationally
In addition, CapitalBox builds bridges to other business units on the Multitude platform, such as
SweepBank for personal accounts for business owners, or by Ferratum or SweepBank serving
potential personal financing needs of the business owner.
31
A
t the end of 2021, CapitalBox was operational in five countries: Finland, Sweden, Denmark,
Lithuania and the Netherlands. Across its countries of operation, CapitalBox has scored high
levels of customer satisfaction, which is proven by its average Trust Pilot score of over 4.3 out of 5.
Services
Instalment loans
CapitalBox provides working capital instalment loans of up to EUR 350,000. These 6–36-month
solutions are designed to help SMEs, e.g. finance expansion, inventory, marketing, hiring new tal-
ent, and purchasing or leasing equipment.
Credit Line
CapitalBox offers a Credit Line as a flexible form of finance to SME’s, which can be utilised based
on their need. The Credit Line can range from EUR 2,000 to EUR 350,000, and the payback period
to extend to up to 50 months.
Purchase Finance
Through partnerships with retailers, CapitalBox financing can be offered to business customers for
their purchases at a point of sale.
Highlights 2021
CapitalBox remained profitable during 2021 and recorded an EBIT of EUR 1.8 million at the end of
the year, a decrease of 66.7% compared to 2020. Due to the ongoing pandemic in 2021 and its con-
tinued, anticipated negative impact on loan performance, lending was actively decreased during
H1. From H2 onwards, the lending volumes were slowly increased in a controlled manner, reaching
the peak in December 2021. Since the pandemic, CapitalBox has shifted its focus in customers
away from COVID-19 impacted industries, such as restaurants, travel and tourism. The payment
behaviour improved throughout the year, with impairments amounting to 27.2% of revenues in
2020 and only 25.1% of the same in 2021.
Overall, annual revenue decreased from EUR 26.3 million in 2020 to EUR 22.0 million in 2021.
The decrease resulted from an active decision of decreasing lending volumes at the beginning of
the year due to the ongoing pandemic and the therefrom resulting increased risk level. The loan
portfolio increased from EUR 62.9 million at the end of December 2020 to EUR 75.4 million at the
end of December 2021. All country portfolios, excl. Denmark, were integrated into a securitization
structure to reduce funding cost. As loan sales increased toward the end of the year, the majority
of revenues resulting therefrom is expected to be seen in 2022.
The year was characterized by focusing on profitable, sustainable growth, enhancing cus-
tomer experience and application, and developing new revenue streams. In Q3, a new CEO for
CapitalBox, Oscar Barkman, was appointed. He succeeds Peter Koning, the interim CEO since
Q2 2021 who continues to serve as agile and transformation coach. The new tribe leadership
has shown strong progress in developing and launching new products and partnerships, such as
Purchase Finance (off-and online) and a Credit Line for an enhanced and widened offering to serve
SME clients.
As per general decision on Multitude level, CapitalBox discontinued its business in the UK
due to identifying more attractive business conditions in other markets. CapitalBox increased the
maximum loan amount from the previous maximum of EUR 250,000 to EUR 350,000 in selected
markets, and the Credit Line was launched in Q4 in Sweden.
32
Internal: Improved underwriting and roll-out of new
services
Macroeconomic and trends: Increased energy prices
driving need of flexible financing for SMEs; growing
segment of SME and increased need for fast and flexible
finance; COVID-19 pandemic going over to an endemic
Technological: Ability to continuously improve
underwriting in the most attractive segments; speed of
application (at the shortest just one minute) due to more
automation
Key growth drivers for 2022:
33
Oscar Barkmann
Tribe CEO – CapitalBox
T
he first Purchase Finance partnership was launched in Q4 with furniture retailer Masku in
Finland. Masku is a country-wide furniture chain with hundreds of thousands of customers (incl.
businesses and consumers) annually, 47 physical stores, and the country’s biggest webshop for
furniture. Companies that purchase furniture from Masku can now finance their purchase through
CapitalBox. The staff of Masku is trained to guide SME owners through the application in case they
need support, and the financing decision is typically made online within minutes.
CapitalBox has been building its brand and P.R. related activities, which have increased
brand recognition as the leading pan-European SME FinTech. The increased brand recognition
has resulted from selected actions such as sponsorships, and it has contributed to an increased
number of inbound enquiries for partnerships.
CapitalBox implemented two high-profile sponsorship deals in 2021 to further enhance the
brand’s profile. CapitalBox was the main sponsor of the World Rally Championship (WRC) Arctic
Rally Finland, held in Q1 in Rovaniemi, Finland. The popular motorsports event was the perfect fit
for CapitalBox’s core values of teamwork, agility, speed, and support in a competitive environment.
CapitalBox also became an official partner of Finland’s Athletics federation and has signed
a four-year sponsorship agreement that makes it the new main partner of the federation. Team
CapitalBox includes Finland’s leading triple jump athletes Kristiina Mäkelä and Senni Salminen,
Sweden’s Olympic gold medallist in the discus, Daniel Ståhl, and Olympic gold medalist Armand
Duplantis, the world record holder in the pole vault. The Team CapitalBox, with its top athletes, will
market the brand internationally across geographies, competitions, and disciplines.
Outlook
For thousands of underserved SMEs across the EU, CapitalBox is already the preferred choice and
reliable partner. It will continue to build on this reputation and position and expand its operations
within the EU further.
The newly launched Credit Line is planned to be rolled out to further countries in 2022. In the
future, in addition to expanding the current operations, CapitalBox wants to expand its services to
new ones such as invoicing and factoring.
34
35
36
ESG Report
2021
ESG Report 2021
38
About this ESG Report 2021 40
How Multitude creates value 42
Multitude’s ESG approach – A new ESG journey 44
People and culture 52
Stakeholder engagement 59
Environmental sustainability 61
Responsible business practice 63
ESG risk management 69
ESG governance 70
Non-financial statement and GRI index 72
Contents
ESG Report 2021
39
About
this ESG
report 2021
ESG Report 2021
40
The report describes the ESG and
sustainability activities of Multitude
for the financial year from 1 January
2021 to 31 December 2021. It outlines
the ESG and sustainability approach
within the economic, social, and
environmental context.
I
n 2021, Multitude renewed its commitment to delivering transparent reporting to stakeholders,
including improving reporting on ESG and sustainability performance. The renewed focus on
ESG reporting is within a rapidly evolving ESG disclosure landscape, including the European
Commission’s adoption of the Corporate Sustainability Reporting Directive and significant steps
towards convergence of global ESG reporting standards with the establishment of the International
Sustainability Standards Board. This ESG Report 2021 demonstrates Multitude’s efforts towards
transparent ESG reporting with plans to report on further progress made in implementing the ESG
roadmap.
The report describes the ESG and sustainability activities of Multitude for the financial year
from 1 January 2021 to 31 December 2021. It outlines the ESG and sustainability approach within
the economic, social, and environmental context. The ESG Report 2021 comprises the non-financial
statement and, unless otherwise indicated, serves to meet requirements under Chapter 3a of the
Finnish Accounting Act 1336/1997, which is based on Directive 2014/95/EU.
In aligning with best practice and as part of the transitioning to an enhanced reporting
framework, Multitude has decided to proactively provide information in the ESG Report 2021 in
accordance with the Global Reporting Initiative (GRI) Universal Standards 2021, which will come
into effect in January 2023.
ESG Report 2021
41
How Multitude creates
value
INPUT
VISION
Become the most valued financial ecosystem
MISION
Democratize financial services through digitalisation, making them fast, easy & green
PURPOSE
Change the world by making banking and finance accesible to everybody
OUR VALUES
• Customer centricity • Entrepreneurial Spirit • Candour • Respect • Winning teams
OUTPUT
• Profound know-how in technology,
regulation, cross-selling, and funding
• Tribe focus on unique customer segments
and customer experience
• Diversified risk portfolio
• Transforming into platform business
• Responsible customer selection
• Diverse workforce in 25 locations and from
more than 40 different nationalities
• Hybrid Working Policy
• New ESG Strategy
• Group Revenue EUR 213.7 M
• Operating Profit EUR 23.9 M (EBIT)
• Range of sustainable banking and financial
services able to grow and scale delivered
through three independent units
• Loyal customers
• Empowered employees in a flexible working
environment
• Inclusive and multi-cultural teams
• Management of our social and
environmental impacts, risks and
opportunities
ESG Report 2021
42
Our segments and tribes
CREDIT
LIMIT
PLUSLOAN MICROLOAN
Near Prime
Digital SME Lending
Prime Loan
Wallet
D
uring 2021 we rebranded our previous segments Microloan, PlusLoan, CreditLimit, CapitalBox
and Mobile Wallet including Primeloan. The newly introduced segments and brands within
the Group were called Ferratum, CapitalBox and SweepBank. According to the new strategy, the
Group’s business units will gain a more independent role and will consequently be even more
closely aligned to their clients and their specific needs. The Group will concentrate on business-
critical operations, with cost advantages derived from delivering greater economies of scale.
The Group’s role remains as an enabler, or a platform, for the business units to flourish.
Primelending and the Mobile Wallet business has now been rebranded SweepBank, a brand with a
very clear customer focus and an ambition to make its clients’ lives easier. The brand Ferratum is
reserved for the Near Prime lending business. CapitalBox is the brand name for the Group’s SME
lending business.
ESG Report 2021
43
Multitude’s
ESG approach
A new ESG journey
The UN has called this decade the ‘Decade of Action’, as the world accelerates progress towards
delivery on the 2030 Sustainable Development Goals and efforts to combat climate change. The
EU has undertaken several initiatives towards a 2050 climate neutrality goal, and the Green Deal is
expected to drive financial investments towards a sustainable economy. In addition, the Covid-19
pandemic has further increased ESG focus, mainly on the importance of sound approaches to
addressing social issues in organisations. This includes the need to ensure employee well-being
proactively. Multitude employees have been afforded support through the pandemic, including
through active engagement, and offering a flexible working environment.
To support the transition to a more sustainable society, Multitude has been redefining its
business under a new name and new strategy, evolving the organisation into a growth platform
that aims to be the most valued financial ecosystem. There are three current tribes as independent
business units: SweepBank, Ferratum and CapitalBox. Together they serve diverse customer
segments, drive value creation, and support the shift in focus towards lending in the higher-end
prime segment of higher value loans and longer maturity.
Global efforts demonstrate the growing
recognition of the potential scale of impact ESG
matters have on economic and environmental
ecosystem resiliency and the urgency with which
these impacts need to be mitigated.
ESG Report 2021
44
E
ach independent business unit in the
Multitude ecosystem aims to provide a
seamless customer experience that is automated
and fully digital, in line with Multitude’s mission,
and continues to prioritise transparency with
regards to loan conditions with no hidden fees
For many years, Multitude has had
systems and policies to protect and improve
the lives of customers and employees. In 2021,
the Group embarked on a new journey to
significantly improve its approach to ESG and
its integration into the core business to better
serve the needs of stakeholders.
As a provider of financial services in 19
countries at the end of 2021, Multitude relies
on the ability to build and maintain trust with
customers and within the communities of the
customers served. How Multitude manages
ESG matters, including those relating to climate
change, is a key determinant of long-term value
creation by the Group. Thus, several steps
towards addressing ESG have been taken.
In 2021, Multitude developed its first-ever
ESG strategy and consequently shared it with
investors and employees. The new ESG strat-
egy supports work to deliver value in line with
the expectations and needs of customers, em-
ployees, investors, and other stakeholders. It is
reflective of the changes within Multitude’s en-
vironment. Multitude believes that it is impera-
tive to manage socio-economic, environmental
and governance impacts and risks effectively
and identify opportunities to generate positive
impact through business models, strategy, and
operations.
Defining
Multitude’s ESG
approach -
Making banking,
finance and
shopping
accessible
to everyone
The new ESG strategy builds on Multitude’s
purpose to change the world and positively
impact society by making banking and finance
accessible to everyone. Multitude’s mission to
democratise financial services through digital-
isation and make them fast, easy, and green is
central to this ESG strategy.
At the Group level, Multitude’s focus is on
social and governance matters related to peo-
ple and processes, the two areas of significant
impact and risk, whilst also embedding green
and sustainable practices in ways of working.
This includes the business functions, called
chapters, under the Group’s agile environment.
The ESG approach is defined with recogni-
tion of an ideal positioning as a digital platform
to transform finance through automation and
customisation. For the tribes, the individual
business units in the Multitude ecosystem, this
means leveraging proprietary technology and
the tribe segmentation model to drive financial
inclusion by offering customers easy access to
finance appropriate to their needs and chal-
lenges.
ESG Report 2021
45
SweepBank Tribe
SweepBank aims to provide customers with a personalised shopping and financing experience
aligned with their expectations for sustainable financial solutions, backed by innovation and
partnerships. Reaching customers that seek responsible shopping and financing solutions is at the
core of the tribe’s ESG ambitions.
The SweepBank app is built through collaboration with customers to understand their needs
and innovate on features, offering an opportunity to address shifting expectations, including
sustainable financing products and services. During the first half of 2022, the tribe will include ESG
impact in new product initiative assessment and integrate ESG deeper into the product design
process and strategy. SweepBank will also increase efforts to include businesses with a strong ESG
focus within its partnerships and Sweep Deals experience.
Customers using the SweepBank app benefit from a green banking experience by being offered
a cardless and paperless bank account. SweepBank aims to actively promote this experience whilst,
in the future, providing the option to obtain a physical card made of biodegradable material to
cater to the individual market and customer needs.
ESG Report 2021
46
Ferratum Tribe
The Ferratum tribe gives customers the freedom to finance their lifestyles on their own terms
through solutions that are appropriate to their individual financial circumstances and risk profile.
Customers who would otherwise have limited access to finance to address everyday needs, or
are at risk of entering parallel black markets, can access finance through a robust yet fast and easy
application and loan decision process enabled by Multitude’s advanced technology that utilises
AI. Ultimately, this supports customers and their households and protects them against financial
hardship due to rising costs by providing a financial safety net.
As a seamless, digital offering, any customer with a phone and internet can access finance,
regardless of personal situations such as disability or location. In addition, access to financing
supports the increased participation of women in the economy, providing them with a means to
support their personal needs, financial independence, and well-being.
The Ferratum tribe ESG approach and goal is focused on widening access responsibly through
lending to customers who can afford the loans, educating customers, and avoiding gender bias in
lending.
ESG Report 2021
47
CapitalBox
CapitalBox offers one-stop financing to SME owners with short and long-term financing needs
and aims to further leverage deep expertise in lending to SMEs in Europe to align with the
global transition towards more sustainable financial products. The tribe supports SME growth,
empowering them to further develop and contribute to the resilience of local economies.
The need of SMEs for fast, easy access to finance is addressed where traditional financing
solutions are often unavailable to the customers due to the economic environment. CapitalBox
also enables easier financing of business growth for SME customers that would be eligible for
traditional banking services but rather choose CapitalBox due to its speed and ease of access to
finance.
In collaboration with tribes and employees, Multitude has set ambitions relating to these
matters to support the delivery of its purpose and mission. The tribes as independent business
units are key to implementing ESG and sustainability actions, and each tribe has augmented the
high-level ambitions of Multitude with their goals in a manner that incorporates the uniqueness of
their customer segments.
ESG Report 2021
48
Multitude ESG goals
BY
2025
THE GROUP AIMS TO:
Embed ESG conscious practices
within the tribes and chapters
1.
2.
3.
Monitor, report on and improve
stakeholder well-being
Understand and reduce the
Group’s environmental footprint
ESG Report 2021
49
Tribe goals
Leading SME Fintech offering solutions that enable
transition to a sustainable economy
Leader in responsible lending to customers with
traditionally limited access to finance
No. 1 in sustainable and personalised shopping and
financing in the EU
ESG Report 2021
50
Multitude’s ESG values
M
ultitude’s employees are key to delivering on the ESG ambitions. As part of ensuring a
jointly committed ESG journey, in 2021, Multitude conducted a survey on ESG values to be
demonstrated in the organisation’s practices. The survey allowed a better understanding of how
employees perceive and understand ESG and what they, as key stakeholders, believe would make
the most impact. The values capture how “Multitude does ESG” across business units and functions,
or chapters, at Multitude, providing a unified approach for all employees.
Create positive change for customers and society.
Reduce our negative environmental and social impact.
Demonstrate empathy to customers and each other.
Ensure the holistic well-being of our employees.
Ensure transparency throughout the customer journey.
Conduct ourselves ethically and with integrity.
Protect the financial well-being of our customers.
ESG Report 2021
51
M
ultitude is committed to creating an inspiring and open environment where each employee
feels valued, has an equal opportunity to deliver their best, and can thrive and grow within
the organisation. The aim is to become the employer of choice within the industry and attract
and nurture new talent from the banking and FinTech sectors. This means focusing on people
development, providing tools and guidance to leaders to help them grow their teams, and actively
encouraging and promoting people within the organisation. As an international, multicultural, and
multilingual organisation, Multitude is proud of its diversity and supports employees across several
country offices, including Malta, Germany, Slovakia, Lithuania, and Estonia.
People and culture
ESG Report 2021
52
Caring for the well-being of employees
The unprecedented previous two years of the global Covid-19 pandemic have challenged
companies to reconsider their traditional ways of taking care of employee well-being and have
increased the focus on company policies regarding people. The activities at Multitude have been
oriented towards supporting employees during these times and continuously finding ways to
improve employee well-being. These activities included arranging e-sports events and providing
access to online learning. In 2022, Multitude will continue to run several initiatives to support
employees’ well-being and professional development. Examples of these initiatives include further
improvement of possibilities for remote work and providing occupational healthcare, such as
private health insurance or subsidising healthcare expenses.
The ongoing pandemic has created the need for many of Multitude’s employees to continue
working from home. In 2021, Multitude continued to support employees’ transition to a post-
Covid-19 hybrid model. All employees now work within a hybrid model set-up, and offices are
being re-assessed to support the needs of this new way of working better.
Current eNPS score 12 2025 Target 20
Employee Engagement
Multitude is proud of its open, transparent, and timely communication as an
organisation. The Group conducts bi-weekly group-wide calls to allow everyone to
ask questions or raise concerns. These calls have proven to be events that employees
find very useful and further drive an open and candid culture at Multitude.
In addition to bi-weekly meetings for all employees, Multitude actively
communicates to employees through other means, answers questions asked, and
provides follow-up information where needed. Employee satisfaction surveys are
conducted on a quarterly basis. In 2020, Multitude launched a new streamlined
employee satisfaction survey that is built on the Net Promoter Score Methodology.
This feedback enables the organisation to continuously improve employee satisfaction
in the respective areas across the Group. All results are communicated internally at
Group level, and further actions resulting from the feedback are communicated at the
tribe or function level.
ESG Report 2021
53
Employee benefits
Multitude aims to ensure that its employees are happy and satisfied throughout their career
journey in the Group. Thus, a broad range of benefits is provided to them to show appreciation
for their valued contributions. Through a hybrid working model, Multitude thrives on trusting
employees to do what they do best from anywhere and anytime. This flexibility allows all employees,
irrespective of location, together with their teams, to choose from where to work and how to work.
Employees can also access an online learning platform with over 16,000 courses in 7 languages for
personal and professional development.
In addition, Multitude offers a Matching Share Plan that allows all employees to invest up to
10% of their annual salary into Multitude shares, which the Company matches 1:1 after a two-year
holding period.
Further benefits are being piloted in several international offices and within the tribes. For
such benefits that are not limited due to local regulation, successfully piloted ones will be offered
across locations to benefit all employees.
Engaging employees in supporting communities
Multitude employees are part of decision-making regarding the Group’s support for social
and environmental causes. Multitude wants to support charities that its employees believe, both
from a personal and a Group perspective should be actively contributed to. In 2021, employees were
asked to nominate charities to donate to. These included causes on environmental and community
development, health, poverty, and human and civil rights. Employees selected the final list of
charities from each category that Multitude then donated to. In 2021, EUR 19.000 was donated
to these selected charities, including the Hunger Project, 1% of the Planet, and Doctors Without
Borders. Multitude will continue to engage employees on the new corporate social responsibility
strategy, which is to be finalised in 2022.
Partnering to develop a hybrid working policy
Being an inclusive organisation that values employee feedback, Multitude ran
several surveys throughout the pandemic to understand how employees preferred to
work. Consistent with external data, employees highlighted the preference of a hybrid
working model in every survey, meaning flexibility to work both remotely and from
the office. As a response, Multitude adopted a flexible hybrid model based on team
and individual needs through and beyond the pandemic. This response was guided
by internal values, such as customer-centricity and the belief of serving employees at
the same level as one would serve customers.
ESG Report 2021
54
Employee development
Since the pandemic’s start, all regular team meetings, internal communication,
performance reviews, and development discussions have been implemented virtually.
This has enabled Multitude to conduct formal professional development reviews. In
2021, leadership training for line managers and team leaders was continued, with a
focus on agile leadership.
The continuous professional development of employees is strongly encouraged
through:
• Performance review coupled with Personal development plans twice a year
• Advanced learning opportunities via:
• Internal Experts knowledge sharing
• External Trainers focusing on competencies & mastery
• Modern learning platform
• On the job learning & more informal teaching
• Mentoring & line management
• All open positions are advertised internally
• Group-wide onboarding program to new hires, irrespective of location
Multitude runs an IT Internship program through the Slovakian IT hub, which provides
opportunities for talented young students during their study programs. Interns can immediately
develop hands-on technical and interpersonal skills by handling challenging tasks and working
with an assigned mentor as part of an agile team whilst balancing their academic commitments.
This experience enables them to gain valuable work experience and readiness to join the job
market. Multitude’s commitment to investing in next-generation IT leaders is evidenced by the
formal employment of several interns that complete the program.
Developing local communities - Multitude IT internship
program
ESG Report 2021
55
How Multitude plans to support employees during 2022
Following the rebranding of the Group to Multitude, the Company is redefining
its employee value proposition. The objective is to become an employer of choice
in the FinTech community by continuing to build on the current strong employee
value proposition. The focus is on what makes Multitude strong and different as an
employer. This will support the Group’s overall branding and employer branding
strategies, which will be implemented internally and externally throughout 2022 and
beyond.
In 2022, in addition to surveys to determine the Employee Net Promoter Score,
Multitude will introduce focus groups to further enhance employee engagement and
understand their needs and expectations. Personal Development Plans are being
rolled out across the Group, with the aim to work together with employees to support
their personal career growth better.
Policies
Multitude has multiple people-related policies in place to support the management and
development of teams. Policies, procedures, and guidelines for all aspects of employee journey
from hire to retirement, including talent acquisition, onboarding, engaging, development, progress,
and exit, are in place. All employee policies and guidelines are introduced via info-letters, the
modern cloud-based Human Resources Information System, and learning platforms. They are also
available internally through an internal communications page. The implemented HR practices are
available to all employees, regardless of their location.
Employees follow several guidelines throughout the employee journey, including a Code of
Business Conduct and Ethics, Anti-Money Laundering, Cyber Security, and employee handbooks
to guide corporate communication and actions for equality and against bullying. These policies
and procedures provide for the fair treatment of employees and the commitment to a safe and
healthy working environment.
In addition to the Code of Business Conduct and Ethics that supports a safe working
environment for employees, the Harassment Policy outlines how to ensure an atmosphere free of
harassment, discrimination, exploitation, or intimidation of existing and prospective employees.
The Equal Opportunities policy addresses anti-discrimination and supports Multitude’s aims to
ensure all employees have equal access to opportunities and that the company culture is inclusive.
Multitude ensures compliance with local legislation concerning employee health and safety.
In 2021, no work-related injuries were recorded. In addition, given the flexibility of the hybrid way
of working, the Company registered a low rate of Covid-19 cases and little to no disruptions in
operations due to Covid-19 cases among employees.
ESG Report 2021
56
Employee information
Employees GRI 2-7
Total number of employees by employment contract and gender
Gender distribution in our 8 largest oces
Finland Latvia Malta
Estonia Germany Lithuania Slovakia Sweden
76%
73% 73%
60%
84%
60%
40%
16%
40%
24%
41%
58%
49%
51%
27% 27%
1%
274
Permanent
(Fixed-term)
Temporary (Contractors)
Includes Interns
Full-time
Part-time
316
11
267
18
62
1 1
369
9
Diversity of governance bodies and employees: GRI 405-1
14%
Board
86%
15%
Senior Officers
85%
33%
Managers
67%
42%
Other Employees
58%
Female Male Non-binary
Methodology: FTE, as at the end of reporting period (FY 2021)
Employee fluctuation: Headcount is stable with approx. 4% increase over FY 2021
ESG Report 2021
57
Headcount 664
Average hours of training per employee GRI 404-1
Percentage of employees receiving regular performance and career development reviews GRI 404-3
Employees who received a regular performance and career development review by gender
Employees who received a regular performance and career development review by employee category
Average hours of training by gender
Employees who received a regular performance and career development review
Employee turnover by gender
Average hours of training by employee category
Female: 96
Female: 13
Senior officers: 4
Senior officers: 55%
Employees: 68%
Female: 85
Female: 75%
Male: 98
Male: 19
Managers: 7
Managers: 68%
Other employees: 14
Other employees: 84%
Male: 91
Male: 61%
New employee hires and turnover GRI 401-1
New hires by gender
Total training hours: 6716
Female Male Non-binary
Methodology: FTE, as at the end of reporting period (FY 2021)
Employee fluctuation: Headcount is stable with approx. 4% increase over FY 2021
ESG Report 2021
58
Stakeholder
engagement
M
ultitude believes in engaging with stakeholders openly and actively to understand and
meet their expectations and to address their needs. An open and ongoing dialogue with
stakeholders informs the Group’s processes and strategies to create value for customers,
investors, and society. Transparent engagement with stakeholders is also in line with internal values
of candour. Through these efforts, Multitude aims to maintain and build trust and partner with
stakeholders to achieve positive outcomes for all.
Multitude undertook a materiality assessment in 2017 via an online survey and subsequently
updated the materiality matrix in 2018. In recognition of the evolving context within which Multitude
and stakeholders assess topics, such as those arising in the post-pandemic era and from increased
investor and governmental focus on ESG, an updated materiality assessment will be conducted
during 2022. The updated materiality assessment will be conducted in accordance with the GRI
reporting standards and the EU Non-financial Reporting Directive concept of double materiality.
Customers
Multitude and its business units’ engagement with customers helps deliver
better customer service as it is based on listening and responding to feedback
and on putting the customer first. This involves conducting customer surveys and
understanding each customer’s unique circumstances to serve their needs better.
An example of this relates to the development of SweepBank products and services.
SweepBank regularly engages with customers to ascertain which features and services
customers would like to have. Customer insights feed into the product design process
and development of future product features.
Employees
Employees are key stakeholders and, as such, an important element of the engagement
processes. Multitude conducts regular surveys to identify the state of all employees in terms of
well-being and satisfaction. The Group-wide bi-weekly meetings are in a format that supports deep
engagement with the Leadership Team on matters that affect the Company and its employees.
Follow-ups on topics are conducted as they are needed.
ESG Report 2021
59
Investors
Multitude wants to foster transparency in engagement with investors. This can
be achieved through strengthening reporting on financial matters and ESG matters
which affect the organisation, as well as by providing opportunities for investors to
provide feedback on how the Group can improve to meet and exceed expectations.
Regulators
Multitude proactively monitors regulatory requirements in its countries of
operation to ensure continuous compliance. Where needed, Multitude engages
with regulators on evolving requirements, seeks clarity, and ensures the continued
awareness of implications for business and customers.
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60
Environmental
sustainability
Measuring Multitude’s footprint
T
he Group recognises its role in supporting the transition to a sustainable global economy. The
Group or its business units do not have physical branches to serve customers, and it has only
limited exposure to large corporates that operate in high emitting sectors. Multitude has offices for
its employees, in which it seeks to manage its environmental footprint.
Multitude has plans to advance environmental responsibility practices during the coming
months. The Group has committed to measuring its carbon footprint in 2022, reporting on Scope
2 and 3 emissions for 2022. Currently, Multitude is working with a Swedish-based company,
Normative, to support efforts in measuring the carbon footprint of the Group.
The Group has also committed to setting targets during 2022 to accelerate further efforts
towards being a green and sustainable FinTech. This commitment will mean reducing the
Group’s emissions and contributing towards efforts to remove GHG emissions, where necessary.
Environmental sustainability is integrated into Multitude’s ESG goals for 2025, and the Group
wants to measure and reduce its environmental footprint by 2025.
Efforts to minimise the environmental footprint
A
s part of the renewed ESG approach, the Group has been increasing engagement with
employees on ESG matters, including environmental sustainability. The Group partners with
employees to identify initiatives that reduce the negative impact on the environment and has
created a forum that provides each employee with an opportunity to actively drive impact in a
coordinated manner. Multitude also aims to educate employees on environmental sustainability as
part of efforts to embed ESG-conscious practices across the organisation. In December 2021, The
Group held an interactive Holiday Green Festival online, which was aimed at raising awareness on
how employees can act towards environmental protection within their own lives.
Two of Multitude’s largest offices have changed practices that negatively impact the
environment. In the Latvian office, employees started using reusable containers instead of
disposable ones when buying their lunch at a local food store instead. In the Berlin office, employees
received personal glass bottles to eliminate the use of single-use plastic. The ability to recycle,
reuse or reduce the negative impact on the environment is considered by several of Multitude’s
offices when undertaking office purchases and in the management of technological devices. The
formalisation of this approach will be outlined in the ESG Policy published in 2022. Employees
are encouraged to take action to protect the environment at the offices, including the usage of
reusable items in office break areas.
In addition, environmental considerations are part of Multitude’s approach to product
development and service provision. As an example, all SweepBank transactions are paperless
unless otherwise required by regulation, and product development within the tribe will, in 2022,
include formalised identification of initiatives with a potentially positive impact on the environment.
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61
Reducing IT waste
Nearly every employee at Multitude uses an IT device, and the amount of IT waste that the
Group contributes to has been acknowledged. Multitude manages the use of devices with the aim
of extending the use and reducing waste. Employee laptops have a lifetime of four to five years,
depending on the make. Thereafter, employees have the option to purchase the device at a low
price. To incentivise extended use by employees, every employee is offered the option to receive
the device free of charge if they keep the device for an additional year. Old devices are in addition
offered to charities or education centres.
ESG Report 2021
62
T
he Group has implemented policies to support compliance with applicable legislation, which
is monitored regularly. Multitude is committed to maintaining the highest ethical standards as
demonstrated through policies on responsible lending, anti-bribery and corruption, tax governance,
and customer data protection. Employees are given regular training on these topics to ensure
compliance.
The company culture embodies Multitude’s values, which guide everyone in ensuring that
actions are in the best interests of prospective and existing customers, that business units are
lending responsibly to the right customers, being transparent about products and services, and
being respectful of customers’ individual circumstances. This includes considering changing life
situations that affect the ability to pay back loans. As an example, if customers face difficulties
with loan repayments, the respective tribe will work with them to identify solutions that serve all
parties and support their financial well-being.
Responsible
business practice
Responsible Marketing and Selling
The Group has been actively working to enhance marketing practices further
and to align with best practices. Existing internal guidelines obligate Multitude and
its business units to not advertise any services or products in a misleading, false, or
deceptive manner and to ensure that customers can access all information that is
relevant to their decision-making, including information on interest rates and fees. A
revised Responsible Marketing policy will be implemented during 2022 to strengthen
the efforts with regards to responsible selling and marketing.
ESG Report 2021
63
Responsible Lending
M
ultitude applies responsible lending principles collectively as an organisation, with each
employee taking care to act in a manner that places customer interests at the centre of daily
decision-making. Everyone within the Group is committed to ensuring that lending decisions are
clear, consistent, transparent, and in line with applicable regulatory and legal requirements that
have been established at the national and/or EU level.
Multitude and its business units seek to ensure customers understand the terms and conditions
and legal documentation and to provide information in a clear and transparent way that enables
informed decision-making. The customer selection process ensures that customer segmentation
is not based on ethnicity, gender, or age. Everyone within Multitude is committed to abiding by
consumer protection laws as enacted by the EU.
Affordability is a core pillar of Multitudes lending approach. It involves ensuring to only provide
loans to customers that can afford them and that these understand what they are committing
to. Therefore, comprehensive, and stringent procedures have been implemented to ensure only
lending to customers who can afford a loan while considering the ability to repay the loan fully
and on time. Due to regulatory requirements, these carefully designed procedures and processes
are implemented across the Group with variations based on location. These internal procedures
generally include a broad range of controls such as the utilisation of sophisticated policy rules,
independent credit-worthiness checks on public and private databases and credit bureaus, and
other available data sources – all carried out with the full consent of the customer. This intelligent
data analysis optimises operations and implements best-in-class underwriting within an automated
and fully digitalised process. Strict filtering supports the rejection of potential customers that
would not be able to pay back their loans.
Multitude is continuously evolving procedures to enhance responsible lending practices
further. This includes implementing new data sources for income and expense verification and
expanding new lending principles across different countries of operation. It also includes the
continuous improvement of Multitude’s sophisticated loan scoring system, which is particularly
relevant for prime loans as the amounts are higher, and loan maturities longer. The scoring includes
access to internal and publicly available data, proprietary self-learning algorithms, and customer
affordability and product suitability evaluations. This technology is at the heart of the decision-
making process for every tribe and ensures providing only the most suitable services to customers.
In selecting customers, Multitude conducts several checks and assessments depending on
the type of loan in question, including checking loan repayments against household or personal
income and other financial commitments or potential insolvency proceedings that would impact
loan applicants. These checks reduce the risk of over-indebtedness and promote customer financial
well-being. With shorter-term loans, Multitude does not grant more than one loan to the same
customer at the same time and adheres to a one day “cooling off” period after the customer has
repaid the loan. Cooling off periods are a way of ensuring that the customer does not enter a cycle
of debt. As a further effort to limit over-indebtedness of customers, except for revolving credit
products, none of the tribes allows rolling loans over or granting advances to finance a customer’s
unpaid interest or fees until the customer’s outstanding loan has been paid.
ESG Report 2021
64
Anti-bribery, anti-corruption, and whistleblowing
The Group’s approach to anti-bribery and corruption is outlined in the Code of Business
Conduct and Ethics, with varying levels of implementation depending on relevance across the
organisation. Multitude has a zero-tolerance approach to money laundering and terrorist financing,
which is reflected in a rigorous due diligence process in new business relationships.
The Code of Business Conduct and Ethics has been approved by the Board of Directors and
communicated to the Leadership Team and all employees. Most of the Group’s operations require
employees to sign declarations to confirm understanding. The Group Compliance Officer has
oversight on implementing policies and guidelines on anti-bribery and anti-corruption and ensures
compliance with the regulation. Internal audits are carried out regularly to uncover potential
violations.
External whistleblowing procedures are described in Multitude’s Code of Business Conduct
and Ethics, which has been updated in accordance with the EU Whistleblowing Directive (Directive
(EU) 2019/1937) at the end of 2021. Any corruption or bribery concerns, or other suspected
violation of financial markets regulation, can be flagged via the whistleblowing process and
would automatically be escalated to the Leadership Team. An internal or external audit could
be implemented depending on the nature, scale, and complexity of the issue in question. During
2021, there have been no reports or events of corruption, cartels, or any other unethical business
conduct.
Employee training on anti-bribery and anti-corruption
Multitude employees undergo regular training on anti-bribery and anti-corruption.
In 2021, the Group focused on targeted security awareness training on topics such as
phishing, personal safety, and security. As part of the 2022 Regulatory Compliance
Plan, training on the Code of Business Conduct and Ethics and anti-bribery and anti-
Corruption is planned for the 2nd and 3rd quarters of the year.
ESG Report 2021
65
Responsible Tax Governance
M
ultitude seeks to meet all its statutory and regulatory tax obligations, acting with reasonable
care in relation to all tax filing and payments and, where appropriate, disclosing all relevant
facts and circumstances to the tax authorities. The Group Tax Strategy is ultimately overseen by
the Tax Team and is reviewed annually and additionally when there are material changes to the tax
environment.
The Group operates based on full openness and transparency in its approach to dealing with tax
authorities of the jurisdictions in which it operates. Ongoing matters are resolved in a collaborative,
courteous and timely manner and, where appropriate, by actively engaging with Tax Authorities
on a real-time basis to minimise tax risk as part of the Group’s effective tax management.
Due to the complexity of the tax system within which Multitude operates, the Group’s long-
term tax goals are consistent with its mission and relate to avoiding tax risks and making tax
payments at the currently required level. To avoid these risks, the Group updates the identification
and analysis of risks on an ongoing basis, taking an analysis of the Company’s historical data,
analysis of external data, including court rulings and tax interpretations, reports and advice
received from tax experts, tax advisors, legal advisors or auditors into account. The assumption is
that the maximum level or type of tax risk that an organisation can accept to achieve a financial
or strategic goal is low. This means that Multitude is unwilling to bear risks and chooses a safe
solution that does not generate risks when in doubt.
In instances where a tax law issue requires additional analysis by an external advisor, personnel
reports such a need to the Tax Team. The Tax Team decides on the performance of the relevant
analyses. Legal issues that may directly or indirectly affect tax settlements are consulted with the
Tax Team.
Training our people and raising awareness
Multitude widened security awareness initiatives among employees and has increased the
focus on using techniques that provide higher engagement results, such as games, audio-visual
content, and phishing assessments. In June 2021, a new security training and awareness platform
was introduced, and employees have undergone a total of 1,763 hours of training by the end of 2021.
Training content ranged from general Information Security Awareness to targeted training content
related to topics like phishing, personal safety, and security. In addition, several awareness-raising
initiatives were organised, including a Cybersecurity Awareness Month in October. The Group’s
efforts to increase employees’ awareness towards identifying phishing attempts have resulted in
a 30% overall average improvement in phishing assessment responses between October 2021 and
December 2021.
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66
Cyber security
M
ultitude recognises cyber security risk as a key operational risk and that the prevalent threats
observed during the past year are in line with the most frequently identified cyber trends in
the FinTech and financial sector, including targeted social engineering attacks, accelerated threat
of landscape changes, and the increasing dependency on third-party integrations.
Multitude has continued to invest in cyber security risk management capabilities and processes
as part of broader operational risk management. Several initiatives were undertaken during 2021
and will continue to further increase security within systems, networks, and procedures during
2022. Administrative and technical controls are implemented in line with the Information Security
Policy Framework, which has been approved by the Board of Directors. Multitude has adopted a
“defence-in-depth” approach by implementing controls at all levels. These controls are designed
using a “plan-for-failure” approach to ensure that should one control level fail, it will not put the
Group’s systems, networks, or data at risk. Furthermore, Multitude’s Information Security Team has
joined several initiatives at the European level to continue building its security intelligence network
within the European Financial Services sector.
While the Group has not suffered any security breaches, cyber security remains an area of
critical importance. In 2022, a new Group-wide Security Information and Event Management
system was implemented to improve the Group’s security visibility, threat intelligence efforts, and
security response. The team is efficiently working on further developing the Key Risk Indicators in
Cyber Risk Monitoring and alignment towards ISO 27001/2 standards.
ESG Report 2021
67
Protecting customer privacy
O
ne of the core focus areas at Multitude is protecting customer privacy. These customer privacy
protection efforts are aimed at protecting company data from theft, damage, and destruction.
Policies and procedures that enable Group-wide compliance with data privacy regulations and
responsibilities and data subjects are implemented to exercise customers’ rights with requests
addressed in a timely and quality manner.
In 2021, Multitude did not receive any substantiated complaints concerning breaches
of customer privacy and/or personal data by any external third parties, and the Group has not
experienced any identified leaks, thefts, or losses of customer data.
Key data protection eorts
Multitude is transparent in how data is handled, informing
customers about how their data is being used, and what measures
the Company has put in place to protect personal information
of customers, as well as in ensuring that requests are responded
rapidly to.
1. Transparency in data handling
Employees complete online training on data protection
essentials once a year, while new joiners undergo this training
during their first two weeks in the Company. Further training is
provided to teams with close interaction with customers and
their personal data, for example, the customer service teams.
2. Training employees
Performance on data protection is monitored by the data
protection team, which is responsible for providing advice on
the impact of data protection efforts and assessing compliance
with regulations, including within the product design and
vendor management processes. Audits are also conducted to
ensure compliance and to address potential issues proactively.
3. Monitoring performance
ESG Report 2021
68
T
he new ESG strategy incorporates embedding ESG within the Group risk management
framework, aligning with its objectives to ensure that ESG is managed in the same manner
as other risks. The Group approach to ESG integration is incremental, with initial processes to
assess ESG risks planned for implementation during the first half of 2022. During H1, Multitude will
publish the Group ESG Policy, which sets ESG policies and processes out, including how ESG risks
are identified, assessed, managed, and monitored. The plan is to implement ESG risk assessment
processes within vendor management processes and product development. Several steps towards
this have been taken within Ferratum Bank, where ESG impacts within the vendor management
process and the New Product Assessment Processes are considered.
ESG risk management
ESG in vendor management
Improving the understanding of risks that the supply chain poses to Multitude’s reputation and
sustainability performance is an important element in developing the internal ESG risk management
framework. Therefore, ESG is already considered within some of the agreements, starting with
Ferratum Bank operations. This is in line with an evolving ESG approach and recognising the
importance of managing the impact that supplier relationships have on Multitude’s ability to be
a responsible business. These ESG considerations are made in addition to existing due diligence,
such as relating to customers and protecting their data.
During the first phase of ESG integration into the internal vendor management processes,
ESG policies are requested to be provided prior to entering an outsourcing agreement. In the next
phase, the review process will be strengthened, and the scope of a broader set of ESG matters
widened. At present, vendors are required to provide a Code of Conduct and Ethics Policy and
policies relating to the prohibition of bribery and corruption.
ESG integration into the new product approval process
P
roduct development is an important function that ensures the enhancement of long-term
value creation for the benefit of shareholders, customers, employees, and other stakeholders.
Every bank must have a well-documented new product approval policy (NPAP) in place to be in
line with the European Banking Authority Guidelines on Internal Governance. In addressing this
requirement, Multitude has developed a robust NPAP policy that incorporates ESG considerations
for Ferratum Bank. Incorporating ESG considerations into the NPAP process ensures that a risk
adequate approach and the necessary degree of intervention in relation to ESG impacts in product
development are abided to when introducing new products or entering new markets.
Under Ferratum Bank’s NPAP policy, assessments of ESG impacts not covered elsewhere are
made with reference to the UN Guiding Principles on Business and Human Rights and the OECD
Guidelines for Multinational Enterprises.
ESG Report 2021
69
Exclusion Policy
The Group understands its role in being a responsible financial services platform and serving
customers whilst taking care not to harm society. Thus, it has committed to refraining from financing
businesses operating in certain sectors. In providing finance to SMEs, CapitalBox is committed to
excluding the financing of businesses in any of the following areas:
1. Production and distribution of armaments or manufacture of products/services for military
purposes
2. Promotion of steam coal
3. Electricity generation from steam coal
4. Unconventional oil production (from tar sands and/or oil shale)
5. Unconventional gas extraction (fracking)
6. Manufacture or distribution of tobacco products
7. The offering of products or services to produce nuclear power or for the operation of nuclear
power plants
ESG governance
T
he Group ESG Officer drives ESG strategy development and integration into Group activities,
providing a dedicated internal liaison for stakeholders. ESG matters are identified within each
chapter and tribe on an ongoing basis with oversight of processes to assess and manage ESG
matters delegated to the Group ESG Officer. During 2021, Multitude convened the multi-functional
and multi-tribal ESG Steering Committee, which meets on a weekly and monthly basis to review
progress on the implementation of the ESG strategy and integration into organisational structure,
processes, and policies.
The ESG Steering Committee is chaired by the Group ESG Officer and the Group CEO. Members
include the Chief Risk Officer, Group Head of Human Resources, Head of Investor Relations, and
tribe leaders. The ESG Steering Committee reports to the Board of Directors on a quarterly basis,
which approves the ESG strategy and provides oversight on ESG matters. Currently, the Group is
in the process of integrating ESG into the Risk Committee and Audit Committee processes. This
will enable effective identification, monitoring, and management of ESG risks and strengthened
controls relating to ESG in line with forthcoming EU regulations and best practice.
ESG Report 2021
70
ESG governance structure
BOARD OF DIRECTORS
• Approval of ESG strategy and ESG performance monitoring
• ESG incorporation into long-term strategic objectives
• Integration of ESG into board and committee practice
• ESG Steering Committee participation by selected members
CEO
• Oversight of company compliance with ESG strategy.
• Regular reporting to board on ESG
RISK COMMITTEE AUDIT COMMITTEE
REMUNERATION
COMMITTEE
• Monitoring of ESG internal
controls
• Monitoring of ESG reporting
process
• Review of ESG reports
• Preparation of ESG audit
matters for board
• ESG risk management oversight
• Preparation of ESG risk matters
for the board
• Review of matters and
reporting to Board on
HR policy, leadership and
remuneration
ESG OFFICER
TRIBES & CHAPTERS
• Chaired by CEO and ESG Officer
• Supporting development and
implementation of ESG strategy
• Meets weekly and reports
quarterly to board
• Leading ESG Strategy
development initiatives
• Supporting group and tribe ESG
goal implementation
• Driving ESG consciousness in
group activities
• Reporting to board committees
and chairing ESG Steerco
• ESG Stakeholder engagement
• Development of relevant ESG
goals and initiatives
• Implementation of tribe and
chapter ESG strategy
ESG STEERING
COMMITTEE
ESG Report 2021
71
NFS disclosure
EU Non-Financial Reporting Directive
Art. 19a (1)(a-e)
Report topics
Business Model
(a) a brief description of the undertaking’s
business model
Multitude - The Fintech Pioneer,
How Multitude Creates Value
Policies and Due Diligence
“b) a description of the policy pursued by
the
undertaking in relation to those matters,
including due diligence processes
implemented;”
Policies, Responsible Business
Practice, ESG Risk Management,
ESG Governance
Outcomes (c) the outcome of those policies; Multitude ESG Goals
Principal Risks
“(d) the principal risks related to those
matters
linked to the undertaking’s operations
including,
where relevant and proportionate, its
business
relationships, products or services which
are
likely to cause adverse impacts in those
areas,
and how the undertaking manages those
risks;”
Policies, Stakeholder Enagement,
Environmental Sustainability,
Responsible Business Practice,
ESG Risk Management
Key Performance Indicators
(e) non-financial key performance
indicators relevant to the particular
business.
Multitude ESG Goals
Non-financial
statement index
Frederik Strange
Chairman of the Board
Jorma Jokela
CEO, Vice Chairman of the Board
Goutam N. Challagalla
Member of the Board
Michael A. Cusumano
Member of the Board
Clemens Krause
Member of the Board
Lea Liigus
Head of Legal and Compliance,
Member of the Board
Juhani Vanhala
Member of the Board
Approval of the non-financial statement
ESG Report 2021
72
GRI index
GRI Standard Relevant section or Direct disclosure Comments
GRI 2: General disclosures (2021)
Organizational profile
2-1 Organizational details
Multitude - The FinTech Pioneer, How
Multitude creates value
2-2
Entities included in the organization's
sustainability reporting
Consolidated Financial Statements, Group
Companies
2-3
Reporting period, frequency and contact
point
About this ESG Report 2021
2-4 Restatements of information GRI index
No
restatements in
the ESG
Report 2021
2-5 External assurance
The ESG Report 2021 has not been
externally assured. In line with EU regulation
and timelines the Group will be assuring the
report.
Activities and workers
2-6
Activities, value chain and other business
relationships
How Multitude creates value, Multitude -
The FinTech Pioneer
2-7 Employees Employee information
2-8 Workers who are not employees
43 workers are consultants or technical
sta Methodology: Headcount number
based on FTE, as at the end of reporting
period.
Governance
2-9 Governance structure and composition
1. Corporate Governance Statement 2. ESG
Governance
2-10 External initiatives Corporate Governance Statement
2-11 Chair of the highest governance body Corporate Governance Statement
2-12
Role of the highest governance body in
overseeing the management of impacts
ESG Governance
2-13
Delegation of responsibility for managing
impacts
ESG Governance
2-14
Role of the highest governance body in
sustainability reporting
ESG Governance
2-15 Conflicts of interest Corporate Governance Statement
2-16 Communication of critical concerns Corporate Governance Statement
2-17
Collective knowledge of the highest
governance body
Group ESG Ocer regularly updates board
on ESG topics. Board chairman, Frederik
Strange, is an experienced leader and
finance expert with specialization including
ESG.
2-18
"Evaluation of the performance of the
highest governance body"
Corporate Governance Statement
ESG Report 2021
73
2-19 Remuneration policies Remuneration Report
2-20 Process to determine remuneration Remuneration Report
2-21 Annual total compensation ratio Ommitted
Strategy, policies and practices
2-22
Statement on sustainable development
strategy
Our ESG Approach
2-23 Policy commitments Our ESG Approach
2-24 Embedding policy commitments Our ESG Approach
2-25 Processes to remediate negative impacts
Anti-bribery and corruption and
whistleblowing
2-26
Mechanisms for seeking advice and raising
concerns
Our Policies, Anti-bribery and corruption
and whistleblowing
2-27 Compliance with laws and regulations
Poland
Polish data protection supervisory authority
brought a complaint following a delay in the
provision of information requested by the
said authority to the attention of Pactum
Poland, an entity of the Group. The delay
was a result of Covid-19 restrictions in place
at the time. As a result of this unfortunate
delay, the authority imposed an
administrative fine of EUR 4,000.
Latvia
Marketing campaign in Latvia between the
27th of May 2021 and the 28th of June 2021
was determined by the by Latvian
Consumer Rights Protection Centre
(“CRPC”) to contain certain terms that
could be perceived as inviting consumers to
apply for consumer loans unnecessarily and
was ceased.
Malta
Malta Financial Services Authority (“MFSA”)
imposed an administrative penalty of EUR
3,750 on Ferratum Bank for failure to
submit its external auditor’s Management
Letter within the regulatory deadline. This
originated from delays in the submission of
the management letter to the Bank itself
and the law still obliged the MFSA to
impose the relative fine on the Bank.
Australia
The Australian Securities and Investment
Commission (“ASIC”) commenced civil
proceedings in the Federal Court against
Ferratum Australia Pty Ltd (“Ferratum”) for
allegedly charging prohibited fees and
overcharging consumers who paid o loans
early. Ferratum is currently investigating the
claims made by ASIC. "
2-28 Membership associations
Multitude is part of country and industry
associations under regulations.
Stakeholder engagement
2-29 Approach to stakeholder engagement Stakeholder Engagement
2-30 Collective bargaining agreements
Employees are not covered under collective
bargaining agreements. The Group does
not restrict employees from collective
bargaining agreements.
ESG Report 2021
74
GRI 3: Material Topics (2021)
3-1 Process to determine material topics Stakeholder Engagement
3-2 List of material topics Stakeholder Engagement
List of material
topics:
updated
materiality
assessment will
be conducted
during 2022.
After the new
materiality
assessment,
Multitude will
further develop
its GRI
reporting on
GRI 200, 300
and 400.
3-3 Management of material topics
1. Stakeholder Engagement 2.Responsible
Business Practice
List of material
topics:
updated
materiality
assessment will
be conducted
during 2022
ECONOMIC STANDARDS
GRI 201: Economic performance (2016)
201-1
Direct economic value generated and
distributed
Board of Director’s Report Unaudited,
Financial Highlights
GRI 202: Market presence (2016)
202-2
Proportion of senior management hired
from the local community
Senior management members are from the
local communities in our countries of
operation.
GRI 205: Anti-corruption (2016)
205-2
Communication and training about anti-
corruption policies and procedures
The anti-bribery and corruption policy is
part of the Code of Business Conduct and
Ethics, which is approved by the board.The
Code of Business Conduct and Ethics is
circulated to all the employees for
signature. No ad hoc training anti-
corruption training was organised in 2021.
Under the 2022 Regulatory Compliance
Plan training on the Code of Business
Conduct and Ethics is planned for Q2 and
Q3 2022.
205-3
Confirmed incidents of corruption and
actions taken
No incidents of corruption recorded.
GRI 206: Anti-competitive behavior(2016)
206-1
"Legal actions for anti-competitive
behavior, anti-trust,
and monopoly practices"
There were no legal actions relating to
anti-competitive behaviour, anti-trust or
monopoly practices.
GRI 207: Tax (2019)
207-1 Approach to tax Responsible Tax Governance
207-2
Tax governance, control, and risk
management
Responsible Tax Governance
207-3
Stakeholder engagement and management
of concerns related to tax
Responsible Tax Governance
207-4 Country-by-country reporting
ESG Report 2021
75
SOCIAL STANDARDS
GRI 401: Employment (2016)
401-1 New employee hires and employee turnoverEmployee information
401-2
Benefits provided to full-time employees
that are not provided to temporary or
part-time employees
Employee Benefits
401-3 Parental leave
Parental leave policy is applied according to
each country of operation's regulation.
GRI 402: Labor/ management relations (2016)
402-1
Minimum notice periods regarding
operational changes
Employees are informed of operational
changes at the earliest possible date post
decision-making.
GRI 403: Occupational health and safety (2018)
403-1
Occupational health and safety
management system
GRI index
Multitude has
no health and
management
system.
Relevant
sections:
Caring for the
well-being of
employees,
Policies
403-3 Occupational health services
Caring for the well-being of employees,
Policies
403-4
Worker participation, consultation, and
communication on occupational health and
safety
Caring for the well-being of employees,
Policies
403-6 Promotion of worker health
Caring for the well-being of employees,
Policies
403-10 Work-related ill health
Caring for the well-being of employees,
Policies
GRI 404: Training and education (2016)
404-1
Average hours of training per year per
employee
Employee information
404-2
Programs for upgrading employee skills and
transition assistance programs
Employee Development
404-3
Percentage of employees receiving regular
performance and career development
reviews
Employee information
GRI 405: Diversity and equal opportunity (2016)
405-1
Diversity of governance bodies and
employees
Employee information
GRI 406: Non-discrimination (2016)
406-1
Incidents of discrimination and corrective
actions taken
There have been no recorded incidents of
discrimination during 2021.
GRI 413: Local communities (2016)
413-2
Operations with significant actual and
potential negative impacts on local
communities
GRI index
As a FinTech
our operations
have limited
impact on local
communities.
GRI 415: Public policy (2016)
415-1 Political contributions No political contributions were made.
ESG Report 2021
76
GRI 417: Marketing and labelling (2016)
417-1
Requirements for product and service
information and labeling
Responsible Marketing and Selling,
Responsible Lending
417-2
Incidents of non-compliance concerning
product and service information and
labeling
No incidents relating to product and service
information and labeling.
417-3
Incidents of non-compliance concerning
marketing communications
Marketing campaign in Latvia between the
27th May 2021 and the 28th June 2021
determined by the by Latvian Consumer
Rights Protection Centre (“CRPC”) to
contain certain terms that could be
perceived as inviting consumers to apply
for consumer loans unnecessarily and was
ceased.
GRI 418: Customer privacy (2016)
418-1
Substantiated complaints concerning
breaches of customer privacy and losses of
customer data
There were no incidents.
ESG Report 2021
77
78
Meeting
our people
At Multitude, we understand that
exceptional people are the driving
force behind our success.
As a dynamic company with a global mindset, we are proud
of our diversity. Currently, we employ and celebrate the
success of our people in 25 locations from more than 40
different nationalities and varied walks of life.
We are humbled and proud to have attracted such incredible talent, and no matter in which
location or in which role, our employees have the freedom and support to thrive and realise their
aspirations. Our teams also strongly value flexibility; thus, we allow them to choose where they feel
they can do their best in our smart, hybrid work environment.
On the following pages you can meet some of our people; our greatest asset in ensuring
Multitude to become the most valued financial ecosystem.
80
81
Thomas
Grimm
82
Why I chose to work for Multitude
At Multitude, the company provides an atmosphere where opinions and new business ideas
are encouraged. I am happy, that this first impression proved to be right. Employees are both
empowered and responsible for delivering on their goals, which are customer-centric, and results
driven.
My role and how it impacts the Group
I am Head of Credit Risk Management for the Group and own the loan policy rules and credit
loss management. Impairment on loans is the largest expense item on the company’s income
statement and my team must ensure the credit losses staying within the budget. We monitor each
market tightly in terms of performance of paid-out loans and adjust policy rules as needed.
What motivates me in my role
I am very proud of the level of quality we have built over the years in the Credit Risk team. The
quality of the teams work and their effort motivate me in my job every day.
Why I like working at Multitude
I enjoy being part of the Credit Risk function because it requires both technical knowledge
and good communication skills. I also enjoy the fact that we work very closely with other teams,
such as marketing and data science. We are only able to succeed because all teams collaborate
and steer towards the same goal.
My life outside of work
I have three great children and the best wife, with whom I am more than happy to spend the
bulk of my free time. I enjoy all sports and especially enjoy skiing with my children.
Head of Credit Risk
Management & Analytics
83
Nontokozo
Khumalo
84
Why I chose to work for Multitude
I have a finance background and have always been interested in how the sector can create a
positive impact on society.Multitude offered an opportunity to work in this area within a growing
Fintech with a relatively flat organisational structure, while implementing an agile approach. As a
non-traditional bank, operating digitally, and given the flat hierarchies, I knew that I would be join-
ing a company that would be adaptable to the new societal demand for banking that is conscious
of environmental and social issues.
My role and how it impacts the Group
My position as the Multitude ESG Officer is to support the Group in formulating and im-
plementing an ESG (Environmental, Social, and Governance) and sustainability strategy towards
purpose-led growth that solves the problems of today. This means actively supporting the Group’s
business functions, tribes and leadership in aligning commitments and strategies with stakeholder
expectations and in demonstrating an understanding of the Group’s ESG impact, risks, and op-
portunities. As the ESG Officer, I work on ESG and sustainability topics across different market
segments with the tribes to help address their unique customer needs for ESG-conscious products
and services and support them in their contribution to the Group’s ESG and sustainability strategy,
and ultimately to the global transition to a sustainable economy.
What motivates me in my role within the Group
My role enables me to contribute to positive transformation of the way people access money
through products and services that better serve the needs of our stakeholders, including society.
We work with employees to formulate ESG values that define how we do ESG at Multitude - it is
encouraging to be part of a team that understands the importance of ESG and sustainability and
supports our values. I am excited about what lies ahead for Multitude in ESG and sustainability as
we seek to further develop the ESG programme. There is huge potential to innovate and forge
partnerships that will drive sustainable value creation.
Why I like working at Multitude
My role provides me with the opportunity to work with people from various functions to de-
velop the ESG strategic direction and how it will be embedded across the Group. I benefit from the
knowledge sharing fostered by the agile environment, whilst meaningfully contributing to how we
create positive change through finance and communicate our efforts to stakeholders. Multitude
is at the start of the ESG and sustainability journey, therefore much of my role is about education
and socialisation of the ESG topic across the Group. I like being able to support my colleagues as
they grow their knowledge on the ESG and sustainability topics, and their impact on the Group’s
journey of green and sustainable Fintech.
My life outside of work
I am a curious person, so I spend a lot of time learning about the world around me, whether
through travel or watching documentaries. I am based in Berlin where there are many coffee shops
and diverse restaurants to explore with friends. I also enjoy the lakes and camping.
Group ESG Officer
85
Ladislav
Lengyel
86
Why I chose to work for Multitude
I joined Multitude in May 2017. At that time, I had spent 13-years in the tech industry, with
experience working in a big corporation, as well as multiple mid and small-sized companies.
During that period, I had learned that the progressive mid-size companies with in-house software
development have the biggest potential to grow. When I saw the track record of Multitude and
their ambitious plans, I knew this was the company I had been searching for. Even though the
company brand was not known to me then, I felt that I could trust the people I met during the
interview. I started as a software engineer, then gradually took over more technical and leadership
responsibilities. At the beginning, our biggest technical challenge was to create a financial platform
that could support our ambitious business objectives. We ‘ve chosen Microservice architecture
based on domain driven design. It was not as widespread then as it is now, and we had many ups
and downs during the platform development process. However, we successfully delivered it to
our first countries. Later, it became our core platform that now enables us to open new countries
or products quickly and to integrate it with our new partners more easily. It also helped us to
attract new talents interested in modern technologies. Overall, Multitude offers an exceptional
combination of new technology, top people and exciting business visions.
My role and how it impacts the Group
In October 2021, I took over the software engineering chapter lead role. From the personal
side, I am responsible for recruiting new talents and our software engineer’s personal development,
coaching and performance evaluation. On the personnel side, I am responsible for our software
engineer’s personal development, performance evaluation, mentoring and recruiting of new talents.
We continuously improve our processes, evaluate our Key Value Indicators and align our targets
with the business needs to achieve the best possible customer impact. We have learned that cross
functional teams with end-to-end ownership bring us the highest productivity for colleagues as
well as the best results for customers.
What motivates me in my role within the Group
I am motivated by the responsibility I have, by the support of my colleagues, by business
success, by the technology stack we use and by the challenging goals set by our CEO and our
business leads.
Why I like working at Multitude
From my childhood onwards, I have liked to come up with algorithms and processes in order
to build valuable solutions. Now I can apply it not only technically, but also on the company level.
I also like the dynamic environment and that together with my colleagues we are pushing each
other to the next level.
My life outside of work
In 2021 I travelled to Iceland, and trips to Lapland and Corsica are planned this year. I like to
take landscape photos from nature and the urban area. In the summer I enjoy mountain biking and
kayaking. During the wintertime you can find me hiking, snowboarding and cold-water swimming.
Software Engineering
Chapter Lead
87
Thomas
Rahman
88
Why I chose to work for Multitude
I started working for Multitude while studying business administration at university. In my
mind it was supposed to be a short-term job with work involving late nights and weekends, but
little did I know that it would be the journey of my life where I’ve been able to learn in depth
the details of customer needs, accounting, collections, P&L, digital marketing, leadership, product
development and so much more.
My role and how it impacts my tribe
Today, 14 years later, I work as a Business Product Owner for the SweepBank tribe, focusing on
our Shopping and App experience. As BPO, I’m mainly responsible for the strategic product deci-
sions which requires close collaboration with our Market, Marketing and Product squads. Ensuring
that we have a clear and common vision for our products helps the tribe to align and focus on the
right things at the right time so that we can bring value to our customers faster.
What motivates me in my role within my tribe
What motivates me the most in my role are the continuous challenges we are trying to solve,
for example building a financial app that is simple to use, saves time and money for the users but at
the same time is also profitable for our company. Or how to stand out in a market that is becoming
more and more competitive with new apps being released every month. Also, seeing the hard work
and the level of engagement of my colleagues motivates me to always be on my toes and do my
very best every day.
Why I like working at Multitude
What I like in my role is that it allows you to be creative, but then also to think about the next
steps in terms of transforming a great idea into reality. You need to be able to mentally flip the
switch from exploration to execution. I’ve always felt that Multitude has supported its employees
to be creative but balanced also by focusing on results.
My life outside of work
Outside of Multitude, I enjoy spending my time with my family playing boardgames, eating
great food or hanging out with our dog. I’m not the outdoor type of person, but I like urban
environments with city life and nature. That’s why I truly enjoy living in Stockholm. Another hobby
of mine is to try newly released apps that can simplify or reduce the boring stuff in our lives.
Business Product Owner,
SweepBank
89
Kirsten
Fay
90
Why I chose to work for Multitude
I was excited by the opportunity to enter a completely new industry, one that I had not worked
in before. Multitude was appealing as a stock listed and reputable company that has already been
an industry leader in its field for 16 years. The global, international aspect was also an important
factor for me.
My role and how it impacts my tribe
I am the CMO for the Ferratum tribe and lead our marketing squad. Our focus is on building a
strong foundation and frameworks for the rest of our marketing colleagues. The marketing squad
provides scalable, cost-effective, centralised solutions for the markets to utilise in their day-to-day
operations. In addition to that, I am part of the tribe leadership team where strategy, profitability,
growth, and employee happiness are key areas. Achievements and impact are an outcome of
teamwork; everyone chipping in and working together towards mutual goals. My role is to take
part in shaping and clarifying those goals and ensuring our team members have everything they
need to be able to work to the best of their abilities.
What motivates me in my role within the tribe
Many things motivate me. Being competitive, I am thrilled by growing the business. Growth
is one driver. Challenges are another motivator. They can come in many expected or unexpected
forms, which could be related to marketing, IT, data, process or anything else that needs fixing or
sorting out. The one thing, however, that stands out above all else here in my tribe, and Multitude in
general, it is the people. I am very fortunate to have amazing colleagues. For a large company, we
have maintained a family-like feeling with very little, if any, hierarchy and genuinely lovely people
who I enjoy working with and who motivate me every day.
Why I like working at Multitude
I love working with people from around the world. The fast changing, exciting, agile environment.
In my role specifically, I like the freedom and ownership I have and the trust I have been given.
My life outside of work
Outside of Multitude, I spend most of my time with my wonderful family, enjoying Malta and
the Mediterranean lifestyle.
Chief Marketing Officer
Ferratum
91
Emil
Jönsson
92
Why I chose to work for Multitude?
The biggest reason for me to work at Multitude was the people – I immediately saw that we
have a great team that I would really enjoy working with. On top of that, Multitude is an exciting,
fast paced and growing business. We work hard to implement new ideas, initiatives, products and
projects to not only achieve but beat our ambitious targets. No day is like the other, which makes
it a lot of fun.
My role and how it impacts my tribe
I work as the Head of Sales. My job is to ensure that we are smart on an emotional level,that
we understand our clients’ needs, and can fulfil them. My role is to make sure that the sales team is
motivated and engaged, that we connect personally with our customers and that we find the best
solution for each customer.
What motivates me in my role within the tribe
I get really motivated when I see our people succeed - this includes small and big successes.
It can be one of the Loan Officers making a hard sale, for example, or someone beating their
personal targets for the month. And as I’m in sales, one can also not neglect the fact that money
is a big motivator.
Why I like working at Multitude
Again – I really enjoy working with people. On top of that I’m happy to be creative and drive
new initiatives, develop the business and see the business grow. Another big reason for me to like
my job is my boss, who continues to motivate me constantly.
My life outside of work
I’m actually engaged to a woman who also works at Multitude, and we’re getting married this
summer in Spain, Mallorca – so a big chunk of my spare time is spent planning the wedding at the
moment. Other than that, I really like downhill skiing and have four weeks of skiing planned for this
winter season in different locations. I also play a lot of Padel (a racquet sport, typically played in
doubles), which is a huge sport in a small number of countries so far.
Head of sales CapitalBox
9393
94
shareholders
Information for
Annual General Meeting 2021
M
ultitude’s Annual General Meeting will be held on 27 April 2022 at 10 EET at the offices of
Castren & Snellman Attorneys Ltd, in Helsinki. In order to limit the spread of the COVID-19
epidemic, the Company’s Board of Directors has decided to adopt the exceptional meeting
procedure provided for in the Finnish Act 375/2021, which temporarily deviates from some of the
provisions of the Finnish Limited Liability Companies Act (the so-called temporary act). The Board
of Directors has decided to take the measures permitted by the temporary legislation in order to
hold the General Meeting in a predicable manner while also taking into account the health and
safety of the Company’s shareholders, personnel and other stakeholders.
The Company’s shareholders can participate in the meeting and exercise their rights only by
voting in advance and by presenting counterproposals and questions in advance. Instructions for
shareholders are provided in the AGM notice published on the Company’s website. It will not be
possible to participate in the meeting in person, and no video link to the meeting venue will be
provided. The Company’s Board of Directors, the CEO, other management and the auditor will not
be present at the meeting venue.
96
Financial calendar
Date Publication
15.03.2022 Multitude Group: 2021 preliminary results
31.03.2022 Multitude Group: full year 2021 results
31.03.2022 Ferratum Capital Germany GmbH: full year 2021 results
31.03.2022 Ferratum Bank p.l.c.: full year 2021 results
27.04.2022 Multitude Group: Annual General Meeting
12.05.2022 Multitude Group: Q1 2022 results
18.08.2022 Multitude Group: H1 2022 results
18.08.2022 Ferratum Capital Germany GmbH: H1 2022 results
18.08.2022 Ferratum Bank p.l.c.: H1 2022 results
17.11.2022 Multitude Group: 9M 2022 results
Multitude share data
Market: Frankfurt Stock Exchange, Prime Standard
ISIN: FI4000106299
Symbol: FRU
Shares in issue: 21,723,960
High 2021: 7.70
Low 2021: 3.775
Closing 2021: 3.83
Shareholder structure
Jorma Jokela 55.2%
Multitude SE* 0.67%
Total Free Float** 44.13%
Universal Investment
Gesellschaft GmbH 9.98%
Dorval AM 5.09%
Other shareholders 29.06%
All information of shareholders holding based on the
latest shareholder notifications received
* Treasury shares held by Multitude SE (no voting right
and no dividends paid on treasury shares)
** Total free float includes shares held by institutional
investors, but not treasury shares held by Multitude SE
97
Investor relations contacts
Hannes Merlecker Bernd Egger
Head of Investor Relations Chief Financial Officer
E: hannes.merlecker@multitude.com E: bernd.egger@multitude.com
M: +49 173 546 5884 M: +49 173 793 1235
98
99
General overview
2021 enabled most businesses across the EU to start looking beyond the COVID-19 pandemic
and shift their focus towards growth opportunities and business development in 2022 and beyond.
Multitude’s Legal and Compliance function was no exception to this approach. For the greater part
of the year under review, its work was guided by the projected post-COVID economic recovery
in the countries in which it operates. It concurrently maintained the momentum of the previous
years in working towards strengthening Multitude’s compliance with the applicable regulatory and
supervisory standards in its target markets, including in internal governance, anti-money launder-
ing, adherence to consumer protection legislation and the protection of personal client data. The
resources of the Legal and Compliance function were strengthened further during 2021 to increase
performance, enhance its internal continuity planning, as well as to enable increased focus on the
ever-changing legal and regulatory needs of Multitude while supporting the business plans of the
different, independent business units on the Multitude platform.
Legal and
regulatory
enviroment
100
Legal changes
To continue complying with the applicable legal frameworks, whilst ensuring that it carries
on providing enhanced services to its customers, the Multitude Group continuously tracks legal
changes in all the countries in which it is active. During 2021, the Group actively considered and
managed a number of changes in the following countries, while monitoring legislative proposals
at a national and EU level which are expected to come into force in 2022:
Consumer credit directive
Amendments are presently being considered to the EU’s Consumer Credit Directive (CCD)
with proposals aiming to, among others, extend its scope and enhance the rights of the consumer.
In Q1 2022, a draft report on the Consumer Credit Directive 2 (CCD2) proposal by the rapporteur
from the Committee on the Internal Market and Consumer Protection will be published. Current
proposed amendments include the introduction of APR caps throughout the Union, but these
are yet to be considered by different Committees within the Institutions. It is expected that a
compromise on the proposed amendments will be agreed on in mid-April. The entire CCD2 will be
voted on in the Internal Market and Consumer Protection Committee in May 2022.
101
EBA Guidelines on Loan Origination and Monitoring
The EBA Guidelines on Loan Origination and Monitoring came into force in June 2021, and
from research carried out by the Group, it appears that most Member States have transposed
the Guidelines into their own law without material changes. Uniformity in transposition of such
Guidelines facilitates the cross-border offering of services by entities like Ferratum Bank.
Finland
On 10 November 2020, a new transitory
draft law was published in Finland in terms of
which consumer credit (except for commodity-
linked credit, such as car loans and credit cards)
carried a maximum interest rate of 10%. The
President approved this law on 29 December
2020, and it came into force on 1 January 2021.
It is no longer in force since it expired on 30
September 2021. That same month, the Ministry
of Justice established a working group to prepare
further amendments to the consumer loan
legislation. Based on its mandate, the working
group will inter alia investigate permanently
lowering the consumer loan interest cap and
include further restrictions to consumer loan
marketing legislation.
Norway
Numerous legislative initiatives originating
from Norway were tracked during the course
of the year, including a new law to substitute
the Financial Contracts Act, which, among
other matters, covers changes in interest rates
that are in obvious disproportion to the credit
and legal consequences for inadequate credit
assessments. Multitude is also closely following
reports published by the Ministry of Finance that
can provide an indication of potential new laws
and regulations, together with other ongoing
consultation exercises on the modernisation of
EU consumer protection rules and the updating
of the legal framework in line with the CRR2/
CRDV/BRRD2.
Latvia
Legal amendments monitored during
the year under review included a new law
regarding the release of natural persons
from debt obligations, amendments to the
creditworthiness guidelines published by the
Financial and Capital Markets Commission,
the coming into force of new requirements on
employee training for anti-money laundering
purposes, changes to the requirements on the
reporting of suspicious transactions, as well as
guidelines on the default interest for the delay
of the performance of civil obligations.
Croatia
The Act on Credit Institutions was amended
in December 2020. The provisions of this Act
regarding measures and instruments directed to
increase the durability and maintain the stability
of the Croatian financial system also became
applicable to an EU credit institution providing
mutually recognised services in Croatia.
In 2021, a decision was furthermore
published by the Croatian National Bank, which
regulates the conditions and the manner in
which the supervision over credit institutions is
carried out, including the obligations of a credit
institution during and after supervisory actions.
Czech Republic
A new law on allocation of payments in the
case of late loan repayments became applicable
from 1 July 2021 to agreements entered into on or
after this date. Additionally, a draft amendment
to the Consumer Credit Act was published,
which proposes to formalise an interpretation
of the law which in practice is already being
applied by the Financial Arbiter. This did not
require any changes to the loan agreements
and procedures applied by Multitude.
Denmark
The Danish Ombudsman and the Danish
Financial Services Authority issued guidelines
on consumer creditworthiness assessments
in April 2021. These provided, among others,
that lenders should obtain information and
documentation on the applicant’s actual fixed
monthly expenses, whilst also being responsible
for assessing whether the expendable income
suffices for the applicant.
102
Germany
Multitude has updated the terms and
conditions applicable to this market following
the coming into force of two laws in June
2021. The first law amended the model of the
withdrawal information for general consumer
loan agreements, in response to the decision of
the European Court of Justice (ECJ) 26.03.2020
– C-66/19. The second law concerned different
withdrawal notices that apply to loans not
considered consumer credit and other financial
services. Further legislative amendments in
Germany during 2021 concerned reducing costs
to customers in the case of early repayment
of loan agreements and the assigning by
consumers of their rights under the agreement.
Malta
The CRDV, which is primarily applicable
to the operations of Ferratum Bank, was
transposed into the Maltese legislative
framework through amendments that were
signed off into law on 28 December 2021. As
a result, a number of amendments were made
to primary acts and subsidiary legislation,
including the European Passport Rights for
Credit Institutions Regulations and the Banking
Act (Supervisory Review) Regulations. Several
regulations forming part of this framework are
yet to come into force.
A regulation governing moratoria on credit
facilities, as well as a directive issued by the
Central Bank of Malta (CBM), came into force on
13 April 2020. This was updated in June 2020
and January 2021. Banks are obliged to grant
a temporary moratorium on credit facilities/
loans to support economically vulnerable
persons who have been materially affected by
the exceptional circumstances brought about
by the COVID-19 outbreak. The moratorium is
not automatic and must be applied for by the
customer. A regulation that entered into force
in January 2021 allowed customers granted a
moratorium to extend this period to 9 months,
subject to several conditions being met.
Poland
Multitude has also been carefully tracking
a number of legislative changes discussed
on the Polish market. They cover a range of
areas, such as the amendment to many acts
adjusting the thresholds of non-interest costs,
the definition of what constitutes non-interest
costs, costs of services that are additional
to the granting of credit and new rules on
creditworthiness assessments. Other proposed
legislative measures being monitored include
draft amendments on competition and
consumer protection and the proposed transfer
of functions from the office of the Financial
Services Ombudsman (FOS) to the remit of
the Office for Competition and Consumer
Protection (OCCP).
Amendments to the Civil Code affecting
certain contractual obligations were signed
into law in December 2021. They will come into
force in mid-2022, while in December 2021, the
Monetary Policy Council decided to increase
the Lombard rate to 2.75% annually, with effect
from 5 January 2022.
Romania
In Romania, legislative amendments were
passed on creditworthiness assessments related
to instances where loans are paid out to repay
previously granted loans. In such cases, banks
are given more freedom in the creditworthiness
assessment policies. There have been further
changes to the regulations on prudential
requirements for credit institutions, based on
the CRD V.
Sweden
As part of the transposition into Swedish
law of Directive (EU) 2019/2161, a number
of measures covering repeated violations of
marketing law are being considered for inclusion
in the draft law. It is proposed that the new rules
enter into effect in July 2022. Additionally, the
Swedish FSA has proposed new general advice
on consumer credits to replace general advice
FFFS 2014:11. The new proposal encompasses
changes to its current guidance on good lending
practices and credit assessments. Most of the
proposed rules align with EBA’s Guidelines on
Loan Origination and Monitoring.
103
Lea Liigus
Legal & Compliance
104
105
Company structure and business model
business units on this growth platform: Ferratum as a consumer lender, CapitalBox as a business lender, and SweepBank
as a shopping and financing app.
Multitude, headquartered in Helsinki, Finland , was established in 2005 (in Finland ) and currently serves
approx. 400,000 active customers. These customers have or have had an active loan balance with at least one of the
independent business units within Multitude within the past 12 months or are active users of the SweepBank app, or
a combination of these. The business units within Multitude operate across 19 countries across multiple continents.
Ferratum Bank p.l.c., is a wholly-owned subsidiary of Multitude SE , a credit institution licenced by the Malta Financial
Services Authority (MFSA), allowing Multitude to passport financial services and products to all European Economic
Area (EEA) member states.
Board of Director’s
Report 2021
Unaudited
106
Board of Director’s
Report 2021
Unaudited
O
ver the past +16 years, Multitude has developed proprietary data and credit scoring algorithms that can deliver
instant credit decisions digitally, allowing to make fully risk-assessed scoring at a pace and scale unmatched by
traditional banking, neo banks, or the general lending industry. This technology and data, paired with the regulatory
experience from global operations over so many years, brings Multitude a significant competitive advantage in large
scale disruption of the financial industry.
Each offering of the independent business units within Multitude is built based on the combination of
behavioural data and direct feedback from customers, ensuring a customer experience focused offering for each
segment. Each business unit can leverage centralized core operations such as finance, customer service, IT, and legal
for lean operations and strong synergies through data exchange.
Multitude SE is listed on the Prime Standard of Frankfurt Stock Exchange under the symbol “FRU”.
107
Key figures and ratios
EUR ’000 2021 2020 2019*
Revenue, continuing operations 213,671 230,472 293,104
Profit before interests and taxes (‘EBIT’), continuing operations 23,901 28,514 45,532
Profit before tax, continuing operations 3,585 6,210 27,543
Profit before tax ratio, continuing operations, in % 0.6 2.2 9.4
Net cash flows from operating activities before movements in
loan portfolio and deposits received
67,710 110,681 135,091
Net cash flows from operating activities 71,723 140,360 22,534
Net cash flows used in investing activities (13,677) (13,701) (7, 316)
Net cash flows from (used in) financing activities 7,056 (43,313) 27,990
Net increase in cash and cash equivalents 65,102 83,345 43,208
EUR ’000 31 Dec 2021 31 Dec 2020 31 Dec 2019
Loans to customers 443,872 360,955 386,167
Impaired loan coverage ratio, in % 21.6 28.9 30.5
Deposits from customers 484,764 339,522 242,161
Cash and cash equivalents 301,592 236,564 155,518
Total assets 819,028 675,081 614,923
Non-current liabilities 140,934 242,960 174,236
Current liabilities 508,605 306,552 315,453
Total equity 169,489 125,569 125,235
Equity ratio, in % 20.7 18.6 20.4
Net debt to equity ratio 2.05 2.49 2.67
*Includes result of operations and cash flows from Ferratum UK Ltd.
Calculation of key financial ratios
Profit before tax (%) = 100x
Profit before tax
Revenue
Impaired Loan coverage ratio (%) = 100x
Credit loss allowance
Gross loans to customers
Equity ratio (%) = 100x
Total equity
Total assets
Net debt to equity ratio =
Total liabilities – cash and cash equivalents
Total equity
108
Products and services
Multitude, through its three, independent business units SweepBank, Ferratum and CapitalBox, provides customers
digital financial solutions to suit a wide range of financial needs and circumstances.
Business Unit: SweepBank
S
weepBank is the newest and strongest growing venture on Multitude’s platform that includes an intuitive
shopping and financing mobile application. SweepBank is seen as a key component in achieving Multitude’s
vision of becoming the most valued financial ecosystem enables connecting different financial services into one place
for customers, creating cross-sell opportunities and accelerated revenue generation and profitability.
SweepBank serves the needs of tech-savvy young adults by offering a compelling and flexible, fully digitalised
combination of shopping and financing services in one intuitive app. SweepBank’s main customer segment in
consumers represents approx. 35 million potential customers in the EU and the segment is expected to grow further.
This segment of young adults expects nothing less than a strongly personalised experience in everything they do,
including financial services. SweepBank offers exactly that and more.
Credit cards
The credit card of SweepBank, a Mastercard, allows financing smaller, unplanned purchases, such as shopping online
and in physical stores. The integrations with Apple Pay and NFC payments allow easy usage online and in physical
points of sale. After successful onboarding to the app, the free card is immediately ready to use. Every customer is
automatically scored during the onboarding process and can be given a maximum credit facility of EUR 8,000. In
addition to the card being free of charge, customers have a free liability coverage for their purchases and up to 60
days payment holiday from their purchase.
Prime Loan
Prime Loans are longer-term instalment loans of up to EUR 30,000 for consumers, with loan maturity ranging between
1-10 years. The average loan amount is EUR 8,000 and the average loan term five years.
Bank Account
SweepBank offers a current account with 0.2% interest p.a. and a fixed-term savings account with 1% interest p.a.
(max. deposit EUR 100,000) for up to three years. The current account is complemented with a free debit card that is
instantly ready to use online and in physical stores after successful onboarding to the app.
109
Business Unit: Ferratum
T
hree services under the Ferratum brand – Micro Loan, Plus Loan and Credit Limit, allow Ferratum to cater to
various, immediate financial needs of individuals, such as unplanned, short-term financing needs resulting from
unexpected life events. These needs are widely underserved by traditional financial institutions.
Tailored to a variety of situations through standardised categories, all services under Ferratum share some attri-
butes: they are fast, intuitive and available online. Customers choose Ferratum for its speed, digital customer experi-
ence, and reputation as a trustworthy and reliable partner. For the Ferratum customer, superior customer experience
means that the end-to-end digital process is intuitive, efficient, and easy.
Micro Loan
A Micro Loan is a rapid and easy loan for the instant, short-term need and quick payback. The application takes a
few minutes with only a handful of data to insert, while the in-house developed and automated, AI-powered scoring
algorithms handle the rest. Within an average of less than 15 minutes from an approved application, the customer
has the money in the bank account. Micro Loans range from EUR 25 to EUR 1,000 and are paid back in one single
instalment within 7–60 days. The average term of a Micro Loan is 30 days, with an average loan of EUR 279.
Plus Loan
A Plus Loan is a larger loan, currently ranging from EUR 300-4,000 with maturity periods of between 2–18 months.
These longer-term instalment loans with equally distributed repayments throughout the whole term of the loan cater
to the more significant needs of individuals. The loan application is as easy, fast, and convenient as with a Micro Loan.
From the approved application, the borrowed money is transferred within, on average, less than 15 minutes to the
customers’ bank account. The average term for a Plus Loan is 416 days and the average loan amount is EUR 927.
Credit Limit
Credit Limit is a pre-approved credit line, also called revolving credit, allowing customers financial flexibility.
Eligible customers are pre-approved for up to EUR 5,000 and can draw money or repay without fixed amounts or
timelines. Credit Limit is similar to a credit card without a physical card. The average loan amount for a Credit Limit is
EUR 1,521, and the term is open-ended.
110
Business unit: CapitalBox
C
apitalBox offers small and medium-sized enterprise (SME) financing through credit lines, loans and purchase
financing.
With its unique, fully digitalised process, CapitalBox is a one-stop- shop for SMEs needing short- and long-term
financing and credit lines. SMEs account for 99.8% of European businesses and are widely underserved by traditional
banks as their processes and offer do not match the need of SMEs.
Instalment loans
CapitalBox provides working capital instalment loans of up to EUR 350,000. These 6–36-month solutions are
designed to help SMEs, e.g., finance expansion, inventory, marketing, hiring new talent, and purchasing or leasing
equipment. The average loan amount is EUR 15,842 and the average term 482 days.
Credit Line
CapitalBox offers a Credit Line as a flexible form of finance to SME’s, which can be utilised based on their need.
The Credit Line can range from EUR 2,000 to EUR 350,000, and the payback period to extend to up to 50 months.
Purchase Finance
Through partnerships with retailers, CapitalBox financing can be offered to business customers for their
purchases at a point of sale.
111
Key
developments
and process
in 2021
Financial overview
Enhanced financial reporting structure
Following the rebranding of its tribes and the disposal of operations in certain markets, the Group has revised its
financial reporting structure as at and for the years ended 31 December 2021 and 2020. Segment information are now
presented based on the new tribes – Ferratum, CapitalBox, and SweepBank, representing its operating and reportable
segments disclosed in Note 7 of the Group’s 2021 consolidated financial statements. The Group’s consolidated state-
ments of profit or loss, total comprehensive income, and cash flows, including relevant note disclosures, have also
been adjusted to reflect the impact of discontinued operations, at the financial statement line item level, relating to
the disposal of Ferratum UK Ltd. (“FGB”).
The Group has further revised the presentation of certain financial statement line items in its consolidated
statements of profit or loss in order to provide more useful information to investors and to better align with IFRS and
ESEF reporting taxonomies. This includes presenting gains and losses that do not directly arise from the results of the
Group’s ordinary course of business operations into ‘other income’ and ‘other expenses’ below the ‘operating profit or
loss’ and enhancing the presentation of certain ‘operating expenses’ to better reflect the nature of the underlying ex-
penditures. Other similar enhancements have been made in the Group’s consolidated statement of financial position
and accompanying note disclosures.
The financial information presented in this section reflect the results of Continuing operations and as if the
new financial reporting structure had been in operation for full years ended 31 December 2021 and 2020. Results of
112
discontinued operations are separately presented in Note 6 of the Group’s 2021 consolidated financial statements.
The Group also defines ‘earnings before interests and taxes (“EBIT”) as the sum total of its operating profit (loss) and
other income (expenses), before considering the impact of financial income (costs), income tax expense (benefit), and
profit (loss) from discontinued operations.
Selective increase in risk appetite and increased market activities
Group revenue amounted to EUR 213.7 million in 2021, a decrease of EUR 16.8 million (-7.3%), as compared to
EUR 230.5 million in 2020, mainly due to the impact of COVID-19 and the Group’s decision to discontinue lending
activities in selected markets.
T
he Group has opted to apply a more strategic approach by selectively increasing its risk appetite, boosting its
marketing, and lending activities, and investing in the development of products and infrastructures, in more
stable markets and customer bases. These resulted into a steady increase of EUR 82.9 million (+23.0%) in the Group’s
collective loan portfolio, which stands at EUR 443.9 million at the end of 2021 as compared to EUR 361.0 million at the
end of 2020.
A
ccordingly, the above activities have resulted into increases in the Group’s bank and lending, selling and marketing,
and amortization expenses by EUR 1.0 million (+7.3%), EUR 3.8 million (+16.7%), and EUR 2.0 million (+14.7%),
113
respectively, when comparing 2021 and 2020 continuing operations.
On the other hand, Multitude’s cautious sales approach and enhanced scoring algorithms proved to be beneficial
in improving the overall quality of the Group’s underwriting in spite of high economic volatility as evident by the
significant decrease in impairment losses from EUR 91.0 million (39.5% of revenue) in 2020 to EUR 71.9 million (33.7%
of revenue) in 2021 – a decrease of EUR 19.0 million (-20.9%), which offsets the decrease in revenue year-on-year.
Stable personnel and general and administrative expenses year-on-year
In 2020, the Group introduced measures to streamline its operations and reduce its overall expenditures in
activities outside of lending, marketing, and product and infrastructure developments in order to counteract the
impacts of the COVID-19 pandemic and to improve overall operational efficiency and profitability, which resulted into
a sharp decline in the Group’s personnel and general and administrative expenses.
During the year, personnel expenses remained flat with a slight decrease from EUR 33.1 million in 2020 to EUR
33.0 million in 2021 (a decrease of EUR 0.1 million or -0.3%), with a minor decrease in Group average headcount from
695 HC in 2020 to 674 HC in 2021. The same is true with the Group’s general and administrative expenses which
amounted to EUR 28.9 million in both 2021 and 2020.
Positive EBIT from continuing operations
The Group’s EBIT from continuing operations resulted to profits of EUR 23.9 million and EUR 28.5 million in 2021
and 2020, respectively, which include net other income of EUR 0.3 million and EUR 0.5 million in 2021 and 2020,
respectively.
The decrease in EBIT from continuing operations amounting to EUR 4.6 million (-16.2%), was mostly driven
by the decrease in revenue and increases in the Group’s bank and lending, selling and marketing, and amortization
expenses, partially offset by the decrease in impairment loss on loans to customers, resulting from the Group’s
application of a cautious sale and scoring approach while selectively increasing risk appetite and marketing activities.
Lower net finance costs
Net finance costs decreased by EUR 2.0 million (-8.9%), amounting to EUR 20.3 million in 2021, as compared to
EUR 22.3 million in 2020, as a result of lower foreign exchange losses and interest expenses during the year – the latter
of which was a result of the conversion of a portion of the outstanding 2018 and 2019 bonds to the 2021 perpetual
bonds, which interests are charged directly against retained earnings instead of profit or loss, slightly offset by the
premiums paid by the Group in the repurchase of the converted 2018 and 2019 debt instruments.
Streamlined operations resulting to overall profitable continuing results
In line with its measures to streamline its operations and reporting structure, the Group has disposed all of its
shareholdings in FGB, requiring the need to present the results of such discontinued operations separately from that
of continuing operations in the Group’s consolidated statements of profit or loss and cash flows.
Accordingly, the Group has carved out losses from discontinued operations, after tax, amounting to EUR 3.8
million and EUR 4.5 million in 2021 and 2020, respectively, representing the results of operations from FGB for the
comparative years presented. The 2021 loss from discontinued operations include a EUR 2.0 million loss on disposal
relating to FGB.
Resulting after-tax profit from continuing operations amounted to EUR 1.2 million and EUR 5.0 million in 2021
and 2020, respectively.
114
Solid asset position
Total assets at the end of 2021 amounted to EUR 819.0 million, an increase of EUR 143.9 million (+21.3%),
as compared to EUR 675.1 million at the end of 2020. This is mainly due to the increase in loans and advances to
customers and cash and cash equivalents.
Cash and cash equivalents increased by EUR 65.0 million (+27.5%), amounting to EUR 301.6 million at the end
of 2021 (2020 - EUR 236.6 million), whereas loans to customers increased by EUR 82.9 million (+23.0%), amounting to
EUR 443.9 million at the end of 2021 (2021- EUR 361.0 million), resulting from the Group’s successful ‘increased loan
disbursement’ strategy for its Primeloan product under SweepBank.
Current assets amounted to EUR 765.0 million, representing 93.4% of the Group’s total assets at the end of 2021
(2020 - EUR 615.1 million, 91.1%), while non-current assets stood at EUR 54.1 million or 6.6% of total assets at the end
of 2021 (2020 - EUR 59.9 million, 8.9%).
Increase in customer deposits contributing to Group liquidity
Shareholders’ equity increased from EUR 125.6 million at the end of 2020 to EUR 169.5 million at the end of 2021,
resulting in a healthy equity ratio of 20.7% (2020 - 18.6%). This was coupled with a corresponding decrease in net
debt-to-equity ratio from 2.49 at the end of 2020 to 2.05 at the end of 2021. These changes were primarily driven by
the replacement of the 2018 and 2019 bonds with a hybrid bond, accounted for as an equity instrument.
Current liabilities amounted to EUR 508.6 million, representing 78.3% of the Group’s total liabilities at the end
of 2021, an increase of EUR 202.1 million (+65.9%), as compared to EUR 306.6 million at the end of 2020, representing
55.8% of total liabilities at the end of 2020. The increase in current liabilities is primarily due to the increase in current
customer deposits, which stood at EUR 402.0 million at the end of 2021 as compared to EUR 275.8 million at the end
of 2020 to - an increase of EUR 126.1 million (+45.7%), and the reclassification of the Ferratum Capital Germany GmbH
bonds issued in 2018 maturing in May 2022.
Total current and non-current customer deposits amounted to EUR 484.8 million at the end of 2021 (2020 - EUR
339.5 million), which contributed positively to the Group’s liquidity, enabling the pursuit of strategic growth initiatives
such as those in SweepBank and CapitalBox tribes.
115
Treasury update
C
ompared to 2020, Multitude successfully managed to increase its cash position by more than 27.5% to EUR 301.6
million (2020: EUR 236.6 million) at the end of 2021. Multitude continued to strengthen its funding base through
the shift towards long-term customer deposits funding. At the end of 2021, the Group’s customer deposit base totalled
EUR 484.8 million, an increase of 42.8% compared to EUR 339.5 million in 2020. Out of the customer deposit base in
2021, EUR 82.8 million is classified as long term deposits with a tenor longer than 12 months (2020 - EUR 63.7 million).
On 10 June 2021, Fitch Ratings affirmed Multitude SE’s Long-Term Issuer Default Rating (“IDR”) and the long-
term rating of the senior unsecured callable floating rate bonds, issued by Ferratum Capital Germany GmbH (ISIN:
SE0012453835 and ISIN: SE0011167972), at ‘B+’ with a ‘Stable Outlook’.
On 5 July 2021, Multitude SE launched unsecured and subordinated perpetual capital notes (ISIN: NO0011037327)
for EUR 50 million. Proceeds from the transaction were used to buy back or repay outstanding debt instruments and
for general corporate purposes. In this context, Ferratum Capital Germany GmbH offered the holders of the company’s
outstanding senior unsecured floating rate bonds, maturing in May 2022 and April 2023, who were subscribing to the
perpertual capital notes the option to tender their 2022 bonds or 2023 bonds. Accordingly, Ferratum Capital GmbH
repurchased EUR 15.6 million and EUR 21.0 million of the outstanding 2022 and 2023 bonds at a price of 101.50%
and 102.00% of their nominal amounts, respectively. The perpetual capital notes are listed in the Nasdaq Stockholm
Aktienbolag and with trading commencement date on 27 October 2021.
During the 2021 Annual General Meeting (“AGM”), the Board of Directors was authorized to repurchase a
maximum of 1,086,198 shares of Multitude SE, which represents approximately 5% of all outstanding shares of the
company. The Board of Directors were also authorized to issue a maximum of 3,258,594 shares. Board of Directors may
issue either new shares or transfer existing shares held by the Group. The authorisation also includes the right to issue
special rights, in the meaning of Chapter 10 Section 1 of the Finnish Limited Liability Companies Act, which entitles
the shareholders to receive new shares or the treasury shares held by the Group against consideration. Subscribed
shares arising from these special rights are included in the maximum number of shares authorized for issue. These
authorisations are in force until the next Annual General Meeting, but not later than 30 June 2022.
Personnel
T
he average number of employees in 2021 is equal to 674 (2020 - 695). Payroll expenses amounted to EUR 33.0
million (2020: EUR 33.1 million).
Appointment of new leadership team members
116
Oscar Barkman Joined multitude as Tribe CEO for Capital Box and Multitude’s leadership team in September
2021, as a seasoned leader with over 15 years’ experience working in the Financial Services Industry and a strong
entrepreneurship professional skilled in business relationship management, electronic payments, payment systems,
banking, and sales, with a proven track record in building companies within the FinTech field. Oscar succeeded Peter
Koning, who was Interim Tribe CEO.
Ari Tiukkanen took on the role of Deputy CEO as of October 2021 to lead and support the day-to-day operations
of the leadership team. This role is instrumental for Multitude’s strategy ensuring smooth daily operations, agile
transformation and equipping teams with tools and processes to execute. With this transition Kornel Kabele took on
the role as CTO and appointed member of Multitude’s leadership team with effect on the same date. Kornel joined
Multitude in 2017 with over 17 years’ experience, having worked in senior roles with leading companies. In his role as
CTO Kornel, will continue building on the strong foundation and drive the IT chapter to further enable the tribes and
chapters.
117
Risk factors and risk management
M
ultitude takes moderate and calculated risks in conducting its business. The prudent management of risks
minimises the probability of unexpected losses and threats to the reputation of the Group. Therefore, it can
enhance profitability and shareholder value.
The leadership team and tribe management monitor operations regularly and are ultimately responsible for adequate
risk management and ensuring that the Group has access to the appropriate software, including instructions on
controlling and monitoring risks. Each member of the leadership team ultimately bears responsibility for identifying
and controlling the risks related to their functions in line with instructions from the Board.
Multitude proactively follows all legal regulations and monitor changes that might occur in the countries it operates
in and adjusts its operations accordingly.
The Group’s risk exposures can be divided into three main categories: credit risks (receivables from customers), market
risks (including foreign exchange risks, interest rate risks and other price risks) and operational risks (such as IT risks,
legal and regulatory risks and other operational risks).
Exposure to credit risks arises principally from the Group’s lending activities. The risk is managed by proprietary risk
management tools which assist subsidiaries in evaluating the payment behaviour of customers. These tools, which
are continuously updated and refined, ensure that only customers with satisfactory credit profile are accepted. The
scoring system and the credit policies of the Group’s subsidiaries are managed by experienced risk teams. The risk
departments are also responsible for the measurement of the payment behaviour of the credit portfolio on a daily,
weekly, and monthly basis.
Market risks arise from open positions in interest rate and currency products. They are managed by the Group’s
treasury functions, which are also, in close cooperation with FP&A, responsible for Group cash flow planning and
ensure the necessary liquidity level for all Group entities. Multitude uses derivative financial instruments to hedge
certain risk exposures.
Operational risks, IT risks, as well as legal and regulatory risks, are of high relevance for the Group. Regulatory and legal
risks are managed by the Group’s legal function in close cooperation with the authorities in the respective countries
and relevant stakeholders. Potential or foreseeable changes in applicable laws are analysed on an ongoing basis and
any necessary modifications to the company’s operations are implemented proactively.
Significant investments
The Group primarily uses its funds for lending to its customers and for investing in the development of its products
and infrastructure. During the year, the Group has granted loans to its customers amounting to EUR 571.6 million and
has capitalised a total of EUR 9.0 million worth of internally generated software development costs.
118
Changes in Group structure
Disposed group companies
During 2021, the Group has disposed of Auxilium Limited, Ferratum Services Limited, Ferratum Denmark, Ferratum
UK Ltd, and Ferratum Vakuutus Oy. The impact of the disposal of Auxilium Limited, Ferratum Services Limited, and
Ferratum Vakuutus Oy to the Group consolidated financial statements were not deemed significant at Group level.
Shareholdings in Ferratum UK Ltd. and Ferratum Denmark were sold for total net proceeds of EUR 100 and EUR 27,
resulting into losses on disposals of subsidiaries amounting to EUR 1.9 million and EUR 0.2 million.
In addition, since Ferratum UK Ltd. is considered as a component of the Group that represents a major geographic
area of operations, the results of operations of the subsidiary, including the loss on its disposal, for the years ended 31
December 2021 and 2020 were reclassified and presented as a single line in ‘loss from discontinued operations’ in the
consolidated statement of profit or loss.
New strategy and rebranding
In line with its new strategy and operating model, the Group has rebranded its operating segments in Q2 2021 –
Near Prime, which includes Credit Limit, PlusLoan and MicroLoan, is now Ferratum; CapitalBox digital SME Lending, is
simply called CapitalBox; and PrimeLoan and Wallet are combined into SweepBank.
The shift in the strategy promotes an environment that allows the new Ferratum, CapitalBox and SweepBank tribes
to better understand and identify the specific needs of their customer base and develop products and services to
align with these needs in a more agile manner. Whereas the Group’s central operations focus on business-critical and
strategic decisions that are aimed at maximising cost advantages from delivering greater economies of scale, while
remaining as an enabler by setting-up a platform that allows each tribe to reach its full business potentials
Subsequent events
Fitch rating affirmation
On February 2022, Fitch Ratings affirmed Multitude SE’s Long-Term Issuer Default Rating (‘IDR’) and the long-term
rating of the senior unsecured callable floating rate bonds, issued by Ferratum Capital Germany GmbH (ISIN:
SE0012453835 and ISIN: SE0011167972), at ‘B+’ with a ‘Stable Outlook’.
Changes in shareholdings
The Group did not receive any notification of changes in the number of shares held by shareholders with at least five
percent (5%) ownership in Multitude SE.
119
Shares of the company
Largest shareholdings as at 31 December 2021
The table below summarises the shareholders with the largest holdings, excluding nominee-registered shares,
in Multitude SE as at 31 December 2021 based on information provided by Euroclear Finland Ltd. The shareholdings
representing at least five percent (5%) ownership in the Group are updated based on latest notification of major
holdings.
Largest shareholders Shares % of shares % of voting rights
Jokela, Jorma* 11,991,344 55.20% 55.57%
Universal Investment Gesellschaft mbH 2,167,660 9.98% 10.05%
Dorval AM 1,105,012 5.09% 5.12%
Timonen, Saku 96,465 0.44% 0.45%
Vanhala, Juhani 64,458 0.30% 0.30%
Pääkkönen, Roope 21,645 0.10% 0.10%
Kalliola, Sami 19,182 0.09% 0.09%
Krause, Clemens 18,923 0.09% 0.09%
Kumpulainen, Antti 18,559 0.09% 0.09%
Egger, Bernd 14,330 0.07% 0.07%
Tiukkanen, Ari 14,173 0.07% 0.07%
Total 15,531,751 71.50% 71.98%
Board of directors’ shareholdings as at 31 December 2021
Name Position
Holdings and
voting righs*
% of holdings and
voting rights
Jokela, Jorma Member 11,991,344 55.20%
Liigus, Lea Member 124,599 0.57%
Krause, Clemens Member 85,356 0.39%
Vanhala, Erkki Juhani Member 84,458 0.39%
Strange, Frederik Chairman 4,000 0.02%
Cusumano, Michael Member - 0.00%
Challagalla, Goutam Member - 0.00%
Total 12,289,757 56.57%
* Jokela, Jorma holds directly 159,470 shares (0.73%), through Jokela Capital OÜ 5,773,139 shares (26.57%) and through JT Capital Limited
6,058,735 shares (27.89%).The shares held by Jokela Capital OÜ and JT Capital Limited are nominee-registered.
*Include shareholdings held directly and indirectly by BOD
120
Distribution of holdings by number of shares held as at 31 December 2021
Distribution of holdings by group as at 31 December 2021
Name Position
Holdings and voting
righs*
% of holdings and
voting rights
Jokela, Jorma Chief Executive Officer 11,991,344 55.20%
Liigus, Lea Chief Legal and Compliance Officer 124,599 0.57%
Egger, Bernd Chief Financial Officer 27,379 0.13%
Kumpulainen, Antti CEO of Ferratum Bank 18,559 0.09%
Kajakas, Kristjan Tribe CEO - Ferratum 14,511 0.07%
Tiukkanen, Ari Deputy Chief Executive Officer 14,173 0.07%
Hanson - Tönning, Adam Chief Financial Planning Analyst 13,134 0.06%
Chatterjee, Julie Tribe CEO - SweepBank 3,205 0.01%
Barkman, Oscar Tribe CEO - CapitalBox 2,112 0.01%
Kliem, Daniel Chief Risk Officer 1,780 0.01%
Kabele, Kornel Chief Technology Officer 1,687 0.01%
Vella, Shaun Chief HR Officer 1,011 0.00%
Neilands, Aksels Chief Marketing Officer 954 0.00%
Total 12,214,448 56.23%
Lower
Limit
Number of
shareholders
% of
shareholders
Total number
of shares and
voting righs
% of share capital
and voting rights
1-100 50 27.26% 2,353 0.01%
101-500 61 33.70% 16,058 0.07%
501-1 000 23 12.71% 16,255 0.08%
1 001-5 000 29 16.02% 58,286 0.27%
5 001-10 000 3 1.66% 24,245 0.11%
10 001-50 000 9 4.97% 160,990 0.74%
50 001-100 000 2 1,11% 160,923 0.74%
100 001-500 000 2 1,11% 301,700 1.39%
500 001 and over 2 1,11% 20,983,150 96.59%
Total 181 100.00% 21,723,960 100.00%
Nominee registered 4 - 21,014,916 96.74%
Treasury shares held by Multitude SE 0 - 146,200 0.67 %
Sector Total number of shares
(book-entries)
Total number of shares
(nominee-registered)
Total number
of shares and
voting rights
% of share
capital and
voting rights
Financial and insurance
corporations
146,200 0.67% 1,269,412 5.84% 1,415,612 6.52%
Households 407,344 1.88% - - 407,344 1.88%
Shares registered in the
member states of the
Euro area
155,500 0.72% 19,745,504 90.89% 19,901,004 91.61%
Total 709,044 3.27% 21,014,916 96.74% 21,723,960 100.00%
*Include shareholdings held directly and indirectly by leadership team
Leadership team shareholdings as at 31 December 2021
121
Board of Directors’ Proposals for Profit Distribution
The operations of the Group’s parent company, Multitude SE, for the year ended 31 December 2021amounted into a
loss of EUR 4.3 million (2020 - EUR 4.9 million, loss), which resulted into a distributable equity amounting to EUR 60.1
million as at 31 December 2021 (2020 - EUR 64.3 million). Accordingly, the Board of Directors proposed during the
Annual General Meeting to not distribute any dividends in relation to the 2021 results and that 2021 loss to be carried
forward.
Corporate Governance Statement
Multitude’s Corporate Governance Statement has been prepared in accordance with the reporting requirements
set out by the Corporate Governance Code 2020 issued by the Finnish Securities Market Association. The Corporate
Governance Statement is published separately from the Board of Directors’ report and it is available on Multitude’s
website at: https://www.multitude.com/investors/corporate-governance/corporate-governance-statement.
Company Management and Auditor
Frederik Strange was appointed as Chairman by the Board on 28 April 2021. Other members of the Board were Jorma
Jokela, Lea Liigus, Michael A. Cusumano, Goutam Challagalla, Dr. Clemens Krause, and Juhani Vanhala. Christopher
Wang stepped down from the Board after the 2021 Annual General Meeting. The Chief Executive Officer is Jorma
Jokela. The 2021 Annual General Meeting re-appointed PricewaterhouseCoopers Oy as the company’s auditor, with
APA Jukka Karinen as the auditor with principal responsibility.
122
123
Consolidated Financial
Statements 2021
Audited
Consolidated statement of profit or loss
For the years ended 31 December:
EUR ’000 Notes 2021 2020
Revenue 8 213,671 230,472
Operating expenses:
Impairment loss on loans to customers 4.2, 10 (71,949 ) (90,967 )
Bank and lending costs 10 (14,338 ) (13,358 )
Personnel expense 9 (33,010 ) (33,120 )
Selling and marketing expense 10 (26,535 ) (22,744 )
General and administrative expense 10 (28,896 ) (28,868 )
Depreciation and amortisation 10, 14, 15, 16 (15,323 ) (13,354 )
Operating profit 23,620 28,061
Other income 11 2,280 485
Other expense 11 (1,999 ) (32 )
Profit before interests and taxes (‘EBIT’) 23,901 28,514
Finance income 12 3,603 521
Finance costs 12 (23,919 ) (22,825 )
Profit before income taxes 3,585 6,210
Income tax expense 13 (2,358 ) (1,215 )
Profit from continuing operations 1,227 4,995
Loss from discontinued operations (3,789 ) (4,511 )
Profit (loss) for the year (2,562 ) 484
Earnings per share:
Weighted average number of ordinary shares in issue * 21,578 21,578
Earnings per share from continuing operations, EUR 0.06 0.23
Earnings per share from discontinued operations, EUR (0.18 ) (0.21 )
Total earnings per share, EUR (0.12 ) 0.02
*There are no items that have dilutive impact on the weighted average number of ordinary shares, and as such, basic and diluted for the years
ended 31 December 2021 and 2020.
124
Multitude Group Annual Report 2021 – Consolidated Financial Statements (Audited)
Consolidated statement of comprehensive income
For the years ended 31 December:
EUR ’000 2021 2020
Profit from continuing operations 1,227 4,995
Other comprehensive income (expense) from continuing operations:
Items that may be reclassified to profit or loss
Currency translation difference from continuing operations (55 ) 34
Total other comprehensive income (loss) from continuing operations (55 ) 34
Total comprehensive income from continuing operations 1,172 5,030
Total comprehensive loss from discontinued operations (3,789 ) (4,369 )
Total comprehensive income (loss) for the period (2,617 ) 661
125
Multitude Group Annual Report 2021 – Consolidated Financial Statements (Audited)
Consolidated statement of financial position
EUR ’000 Notes 2021 2020
ASSETS
Non-current assets:
Property, plant and equipment 14 3,404 3,907
Right-of-use assets 15 1,618 4,207
Intangible assets 16 35,850 38,904
Deferred tax assets 13 6,981 7,897
Other non-current financial assets 17 6,215 5,028
Total non-current assets 54,068 59,943
Current assets:
Loans to customers 17 443,872 360,955
Other current financial assets 17 13,344 12,348
Derivative financial assets 17 324 496
Current tax assets 13 2,200 1,567
Prepaid expenses and other current assets 18 3,628 3,208
Cash and cash equivalents 17 301,592 236,564
Total current assets 764,960 615,138
Total assets 819,028 675,081
EQUITY AND LIABILITIES
Equity:
Share capital 40,134 40,134
Treasury shares (142 ) (142 )
Retained earnings 6 7, 1 7 2 73,696
Perpetual bonds 1.1 50 ,000 -
Unrestricted equity reserve 14,708 14,708
Translation differences (5,014 ) (5,458 )
Other reserves 2,631 2,631
Total equity 169,489 125,569
Liabilities
Non-current liabilities:
Long-term borrowings 19 57,656 174,849
Deposits from customers 19 82,793 63,689
Other non-current finance liabilities 1.1, 19 - 2,160
Lease liabilities 15, 19 282 1,961
Deferred tax liabilities 13 203 301
Total non-current liabilities 140,934 242,960
Current liabilities:
Short-term borrowings 19 84,158 -
Deposits from customers 19 401,971 275,833
Derivative financial liabilities 19 1,232 3,230
Lease liabilities 15, 19 1,412 2,418
Current tax liabilities 13 3,247 3,241
Trade payables 19 1,426 9,932
Accruals and other current liabilities 19, 20 15,159 11,898
Total current liabilities 508,605 306,552
Total liabilities 649,539 549,512
Total equity and liabilities 819,028 675,081
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Multitude Group Annual Report 2021 – Consolidated Financial Statements (Audited)
Consolidated statement of cash flow
For the years ended 31 December:
EUR ’000 Notes 2021 2020
CASH FLOWS FROM OPERATING ACTIVITIES
Profit (loss) for the year (2,562 ) 484
Adjustments for:
Depreciation and amortization 10, 14, 15, 16 17,237 13,354
Finance costs, net 12 19,6 48 21,201
Tax on income from operations 13 2,440 1,292
Other adjustments (1,466 ) (659 )
Impairments on loans 72,487 92,894
Working capital changes:
Increase (-) / decrease (+) in current receivables (11,4 70 ) (1,590 )
Increase (+) / decrease (-) in trade payables and other liabilities (10,464 ) 1,288
Interest paid (16,815 ) (14,465 )
Interest received 1,102 552
Income taxes paid (2,427 ) (3,670 )
Net cash flows from operating activities before movements
in loan portfolio and deposits
Deposits from customers 145,443 97,361
Movements in gross portfolio 4.2 (141, 4 3 2 ) (67,682 )
Net cash flows from operating activities 71,721 140,360
CASH FLOWS FROM INVESTING ACTIVITIES
Purchase of tangible and intagible assets 14, 15, 16 (11,542 ) (12,502 )
Purchase of investments and other assets (747 ) (1,199 )
Disposal of subsidiaries 6 (1,388 ) -
Net cash flows used in investing activities (13,677 ) (13,701 )
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from issue of equity bonds 1.1 50,000 -
Repayment of long-term borrowings 1.1 (21,441 ) -
Repayment of short-term borrowings 1.1 (15,861 ) (47,514 )
Perpetual bonds interests and issuance costs 1.1 (3,342 ) -
Repayment of finance lease liabilities (2,297 ) (2,299 )
Proceeds from long-term borrowings - 6,500
Net cash flows from (used in) financing activities 7,059 (43,313 )
Cash and cash equivalents, as at 1 January 17 236,564 155,518
Exchange gains (losses) on cash and cash equivalents (74 ) (2,300 )
Net increase in cash and cash equivalents 65,103 83,345
Cash and cash equivalents, as at 31 December 17 301,592 236,564
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Multitude Group Annual Report 2021 – Consolidated Financial Statements (Audited)
Consolidated statement of changes in equity
EUR ’000 Share
capital
Treasury
shares
Retained
earnings
Perpetual
bonds
Unrestricted
equity reserve
Translation
differences
Other
reserves
Total equity
As at 1 January 2020
Change in accounting policy
Prior period adjustment
As at 1 January 2020, restated
Comprehensive income for the year
Profit or loss
Currency translation difference
Total comprehensive income
Transactions with owners
Acquisition of own options
Share-based payments (Note 21)
Transfers between items
Other changes
Total transactions with owners
As at 31 December 2020
As at 1 January 2021
Comprehensive income
Profit or loss
Currency translation difference
Total comprehensive income
Transactions with owners
Proceeds from equity bonds
Perpetual bonds interests and issuance costs
Share-based payments (Note 21)
Other changes
Total transactions with owners
As at 31 December 2021
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Multitude Group Annual Report 2021 – Consolidated Financial Statements (Audited)
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1. GENERAL INFORMATION
company that aims to transcend the hassle of physical banking and manual financial transactions
by offering a financial ecosystem, comprising of mobile and digital platforms, that promotes
paperless, borderless, and real-time banking experience, to end customers and small and medium
enterprises ("SMEs"). The parent company Multitude SE (business identity code 1950969-1) was
established in 2005 and is headquartered at Ratamestarinkatu 11 A, FI-00520 Helsinki . Multitude
SE is listed in the Prime Standard of Frankfurt Stock Exchange under the symbol ‘FRU’. The Group
also owns Ferratum Bank p.l.c., licensed by the Malta Financial Services Authority ("MFSA"), which
allows the Group to provide financial services and products to European Economic Area ("EEA")
members states.
On 31 March 2022, Multitude’s Board of Directors authorised the Group’s consolidated financial
statements as at and for the year ended 31 December 2021 and comparative year 31 December
2020 for issuance and filing.
1.1 Significant changes in the current reporting period
New strategy and rebranding
In line with its new strategy and operating model, the Group has rebranded its operating
segments in Q2 2021 – Near Prime, which includes Credit Limit, Plus Loan and Micro Loan, is now
Ferratum; CapitalBox digital SME Lending, is simply called CapitalBox; and PrimeLoan and Wallet
are combined into SweepBank.
The shift in the strategy promotes an environment that allows the new Ferratum, CapitalBox
and SweepBank tribes to better understand and identify the specific needs of their customer base
and develop products and services to align with these needs in a more agile manner. Whereas
the Group’s central operations focus on business-critical and strategic decisions that are aimed
at maximising cost advantages from delivering greater economies of scale, while remaining as
an enabler by setting-up a platform that allows each tribe to reach its full business potentials.
Segment results from for the comparative years ended 31 December 2021 and 2020 are presented
in Note 7.
Perpetual bonds issue
On 5 July 2021, Multitude SE issued EUR 50 million worth of unsecured and subordinated
perpetual capital notes ("capital notes") at of 99.50% of the nominal amount. The capital notes
(ISIN NO0011037327) were drawn against a total authorised framework of EUR 100 million with
a floating coupon rate of 8.90% plus 3-month Euribor. On 20 October 2021, the Finnish Financial
Supervisory Authority (‘FIN-FSA’) approved the prospectus listing of the capital notes and
provided the Swedish Financial Supervisory Authority ("Finansinspektionen") with a certificate
of approval on 21 October 2021, attesting that the capital notes were draw-up in accordance with
prospectus regulation. On 27 October 2021, Nasdaq Stockholm Aktiebolag ("Nasdaq Stockholm")
has approved the listing and trading of Multitude’s capital notes.
In conjunction with the above issuance, holders of the Group 2018 (ISIN AS5772809 /
SE0011167972) and 2019 (ISIN SE0012453835) debt instruments under Ferratum Capital Germany
GmbH ("FCGE"), were given the option to tender their outstanding instruments in exchange for
holdings in the 2021 capital notes. In connection to this, the Group has purchased EUR 15.6 million
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worth of nominal 2018 FCGE debt instruments, with carrying amount of EUR 15.5 million, at a
price of 101.50% and EUR 21.0 million worth of nominal 2019 FCGE debt instruments, with carrying
amount of EUR 20.6 million, at a price of 102%. The repurchase of these debt instruments resulted
into loss on repurchase of borrowings amounting to EUR 1.2 million recognised in the consolidated
statement of profit or loss. The remaining carrying amounts of the 2018 and 2019 bonds are
presented as current and non-current liabilities, respectively, in the consolidated statement of
financial position and in Note 19.
Disposals of Ferratum UK Ltd. and Ferratum Denmark ApS
In line with its initiatives to streamline its operations and reporting structure, Multitude disposed
of its total shareholdings, representing 100% ownership interests, in Ferratum UK Ltd. ("FGB") and
Ferratum Denmark ApS ("FDK") on 31 October 2021 and 31 December 2021, respectively.
Shareholdings in FGB and FDK were sold for total net proceeds of EUR 100 and EUR 27, resulting
into losses on disposals of subsidiaries amounting to EUR 1.9 million and EUR 0.2 million. Net
assets of FGB and FDK, immediately prior to their respective disposals, are disclosed in Note 5.
In addition, since FGB is considered as a component of the Group that represents a major
geographic area of operations, the results of operations of the subsidiary, including the loss on
its disposal, for the years ended 31 December 2021 and 2020 were reclassified and presented as
a single line in 'loss from discontinued operations' in the consolidated statement of profit or loss.
Further details on the results and cash flows arising from discontinued operations are disclosed in
Note 6.
Acquisition and subsequent valuation of Spotcap Netherlands BV
On 15 October 2020, the Group acquired the SME lending business of Spotcap Netherlands BV
("Spotcap"), including part of its active portfolio. The acquisition was accounted for as a business
combination as at and for the year ended 31 December 2020 with a net purchase price of EUR 3.9
million in exchange for Spotcap’s net identifiable assets, which consisted of loans to customers
and separate identifiable intangible assets relating to Spotcap’s partner network valued at EUR 1.9
million and EUR 1.2 million, respectively, resulting into the recognition of goodwill from acquisition
valued at EUR 0.8 million. The acquisition net purchase price included a EUR 2.0 million contingent
consideration payable by Multitude to Spotcap conditional upon meeting certain revenue levels
and profitability targets expected to arise from the synergies gained from merging the acquired
Spotcap SME lending business with the Group’s operations in the Netherlands.
During 2021, it has become apparent to the Group that the agreed revenue targets in relation
to the acquired partner network and SME lending business will not be fully met within the agreed
time frame. As a result, the contingent consideration, presented as other non-current liabilities
in the consolidated statement of financial position, was written down to EUR 0.4 million with a
corresponding gain amounting to EUR 1.4 million recognised as other operating income in the
consolidated statement of profit or loss.
The Group also performed an impairment assessment of the acquired goodwill and partner
network to determine whether their carrying amounts exceed their respective recoverable amounts
as at 31 December 2021, which resulted into a full write-down of goodwill with carrying amount of
EUR 0.8 million and a partial impairment of partner network amounting to EUR 0.6 million. These
impairment losses are presented under other operating expenses in the consolidated statement of
profit or loss. (Note 11)
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Multitude Group Annual Report 2021 – Consolidated Financial Statements (Audited)
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
2.1 Basis of preparation
Multitude Group’s consolidated financial statements are prepared in accordance with
International Financial Reporting Standards ("IFRS") as issued by the International Accounting
Standards Board (‘IASB’) and as adopted by the European Union ("EU"). The consolidated financial
statements are presented in thousand euros ("EUR 000"), except as otherwise indicated, and are
prepared under the historical cost convention, except as disclosed in the summary of significant
accounting policies in Note 2.3.
2.2 New and amended standards and interpretations
On 1 January 2021, the Group adopted the following amendments to the accounting standards
issued by the IASB and endorsed by the EU with no material impact on the Group’s consolidated
financial statements:
• Amendments to IFRS 16, ’Leases’ on Covid-19-related rent concessions that provides lessees
with an option to treat rent concessions in the same way as they would if they were not lease
modifications under certain circumstances.
• Temporary amendments to IFRS 9, IAS 39, IFRS 7, IFRS 4, and IFRS 16 on interest rate benchmark
reform ("IBOR") - phase 2 that addresses issues that arise from the implementation of the reforms,
including the replacement of one benchmark with an alternative one.
The Group has not early adopted any new and amended standards and interpretations that
have been issued but are not yet effective. The Group intends to adopt these new and amended
standards and interpretations, if applicable, when they become effective and are endorsed by
the EU. The following new and amended standards and interpretations issued by the IASB are
effective in future periods are not expected to have a material impact on the consolidated financial
statements of the Group when adopted:
• Amendments to IAS 16, ‘Property, plant and equipment’ prohibit a company from deducting
from the cost of property, plant and equipment amounts received from selling items produced
while the company is preparing the asset for its intended use. Instead, a company will recognize
such sales proceeds and related cost in profit or loss.
• Amendments to IFRS 3, ’Business combinations’ update a reference in IFRS 3 to the ‘Conceptual
Framework for Financial Reporting’ without changing the accounting requirements for business
combinations.
• Amendments to IAS 37, ‘Provisions, contingent liabilities and contingent assets’ specify which
costs a company includes when assessing whether a contract will be loss-making.
• Annual improvements make minor amendments to IFRS 1, ‘First-time adoption of IFRS’, IFRS 9,
‘Financial instruments’, IAS 41, ‘Agriculture’ and the illustrative examples accompanying IFRS 16, ‘
Leases’.
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Multitude Group Annual Report 2021 – Consolidated Financial Statements (Audited)
• Amendments to IAS 1, ‘Presentation of financial statements’, IFRS Practice Statement 2 and IAS
8, ‘Accounting policies, changes in accounting policies and errors’ disclosure of accounting policies
and definition of accounting estimates presentation of financial statements on classification of
liabilities’ that aim to help the companies improve accounting policy disclosures so that they
provide more useful information to investors and other primary users of the financial statements;
and distinguish changes in accounting estimates from changes in accounting policies.
• Amendments to IAS 12, ‘Income taxes’, deferred tax related to assets and liabilities arising from
a single transaction that specifies how a company accounts for income tax, including deferred tax,
which represents tax payable or recoverable in the future.
• New standard IFRS 17, ‘Insurance contracts’, which replaces IFRS 4, that currently permits a wide
variety of practices in accounting for insurance contracts. IFRS 17 will fundamentally change the
accounting by all entities that issue insurance contracts and investment contracts with discretionary
participation features. Further amendments defer the date of application of IFRS 17 by 2 years to 1
January 2023 and change the fixed date of the temporary exemption in IFRS 4 from applying IFRS
9, Financial instrument until 1 January 2023.
2.3 Summary of significant accounting policies
Consolidation
The consolidated financial statements comprise the financial statements of the Parent
Company, and each of those companies over which it exercises control. Control over an entity
exists when the Group is exposed, or has rights, to variable returns from its involvement with the
entity and has the ability to affect those returns through its power over the entity. When the Group
has less than a majority of voting or similar rights in an entity, the Group considers all relevant
facts and circumstances in assessing whether it has power over an entity, including the contractual
arrangements, and voting rights and potential voting rights. The Group reassesses whether or not
it controls an entity if facts and circumstances indicate that there are changes to the elements of
control.
Consolidation of a subsidiary begins when the Group obtains control over the subsidiary and
ceases when the Group loses control over the subsidiary. Assets, liabilities, income and expenses
of a subsidiary acquired or disposed of during the year are included in the consolidated financial
statements from the date the Group gains control until the date the Group ceases to control
the subsidiary. A change in the ownership interest of a subsidiary, without a loss of control, is
accounted for as an equity transaction. If the Group loses control in a subsidiary, the related assets,
liabilities, non-controlling interests, and other components of equity are derecognized with any
gains or losses recognised in the consolidated statement of profit or loss. Any investment retained
in the former subsidiary is measured at fair value.
All intercompany transactions are eliminated as part of the consolidation process. Since
Multitude wholly owns all of its subsidiaries, there are no components of non-controlling interests
("NCI") presented separately as a component of the Group’s consolidated financial statements.
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Multitude Group Annual Report 2021 – Consolidated Financial Statements (Audited)
Business combinations
Business combinations are accounted for using the acquisition method. The consideration
transferred in a business combination is measured as the aggregate of the fair values of the assets
transferred, liabilities incurred towards the former owners of the acquired entity or business, and
equity instruments issued. Acquisition-related costs are recognised as expenses in the consolidated
statement of profit or loss in the period in which the costs are incurred and the related services
are received with the exception of costs directly attributable to the issuance of equity instruments
that are accounted for as a deduction from equity.
Identifiable assets acquired and liabilities assumed are measured at the acquisition date
fair values. The Group elects whether to measure the non-controlling interests in the acquiree
at fair value or at the proportionate share of the acquiree’s identifiable net assets on a business
combination by business combination basis. The excess of the consideration transferred over the
aggregate amount of the non-controlling interests and the fair values of the identifiable net assets
acquired is recorded as goodwill.
Non-current assets or disposal groups held for sale and discontinued operations
Non-current assets or disposal groups are classified as assets held for sale if their carrying
amounts will be recovered principally through a sale transaction rather than through continuing
use. For this to be the case, the asset, or the disposal group, must be available for immediate sale
in its present condition subject only to the terms that are usual and customary for sales of such
assets or disposal groups, and the sale must be highly probable. These assets, or in the case of
disposal groups, assets and liabilities, are presented separately in the consolidated statement of
financial position and measured at the lower of the carrying amount and fair value less costs to sell.
Non-current assets classified as held for sale or included in a disposal group classified as held for
sale, are not depreciated or amortised.
Discontinued operations are reported when a component of the Group, comprising operations
and cash flows that can be clearly distinguished both operationally and for financial reporting
purposes from the rest of the Group, is classified as held for sale or has been disposed of, or the
component represents a major line of business or geographical area of operations, or is a part of
a single coordinated plan to dispose of a separate major line of business or geographical area of
operations. Profit or loss from discontinued operations is reported separately from income and
expenses from continuing operations in the consolidated statement of profit or loss, with prior
periods presented on a comparative basis. Cash flows from discontinued operations are presented
separately in the consolidated financial statements and accompanying notes. Intra-group revenues
and expenses between continuing and discontinued operations are eliminated.
Revenue recognition
The Group recognises revenue from interest and fee charges arising from its banking and
lending activities when it is probable that associated economic benefits will flow to the Group and
the amount of the can be measured reliably.
Interest revenue
Interest revenue is calculated and recognised based on the effective interest rate method. The
effective interest includes fees considered to be an integral part of the effective interest rate on
loans to customers. The effective interest rate is the rate that discounts estimated future cash flows
to the net carrying amount of loans to customers. Interest revenue recognition starts on the day
when the customer loan agreement is executed and the proceeds from the loan are transferred to
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the customer and is accrued on a day-to-day basis until the derecognition of the underlying loan
to customer.
Loan servicing fees
The Group charges origination and commitment fees that can be considered to be an integral
part of the effective interest rate on loans to customers and are under the scope of IFRS 9. Other
fees, including invoicing, penalty, and other similar loan servicing fees, that are not considered to
be an integral part of the effective interest rate on loans to customers are accounted for under
IFRS 15, ‘Revenue from contracts with customers’. These fees are recognised at the point in time
when the Group satisfies the underlying performance obligations, normally when such fees are
due from the customers or upon invoicing. There are no contract assets and liabilities relating to
loan servicing fees as at 31 December 2021 and 2020.
Segment reporting
Operating segments are reported in a manner consistent with the internal reports provided
to the chief operating decision-maker. The chief operating decision-maker, who is responsible for
allocating resources and assessing the performance of the operating segments, has been identi-
fied as the senior management team that makes strategic decisions. The Group’s operating and
reportable segments comprise 100% of the Group’s external revenue.
Employee benefits
Post-retirement plans
The Group companies have various post-employment plans in accordance with local regulations
and practices in the countries in which they operate. Group companies’ pension plans are general-
ly considered to be defined contribution plans that are funded by employees and relevant Group
companies through pension insurance contracts, local government retirement schemes, and other
external post-employment retirement plan arrangements, where the Group does not retain or incur
any additional legal or constructive obligations on top of its regular contributions to such plans.
These contributions are recognised as expense in the consolidated statement of profit or loss in
period they are incurred.
Share-based payments
The Group’s share-based payments granted are equity-settled share-based payment transac-
tions. They are booked as employee benefit expense and as increases in equity based on the grant
date fair value of the options or shares granted. The total expense is recognised over the vesting
period, which is the period over which all of the specified vesting conditions are satisfied.
At the end of each period, the Group revises its estimates of the number of options or shares
that are expected to vest based on the vesting and service conditions. It recognises the impact of
the revision to original estimates, if any, in profit or loss, with a corresponding adjustment to equity.
Cancellation of a share-based payment arrangement is accounted for as an acceleration of vesting,
and the Group recognises immediately the amount that would have been settled with employees
at the end of the original vesting period. Any payment made to the employee is accounted for as
deduction from equity, except to the extent that the payment exceeds the fair value of the equity
instruments granted, measured at the cancellation date.
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Multitude Group Annual Report 2021 – Consolidated Financial Statements (Audited)
Finance income and costs
Interest income and expense
Interest income is recognised based on the amount receivable or received from deposits in bank
and other financial institutions and other financial assets at amortized cost apart from loans to
customers.
Interest expense arises primarily from current and non-current portion of borrowings, deposits
from customers, and lease liabilities. Similar to interest revenue, interest expense is calculated and
recognised based on the effective interest rate method, and considers transaction costs, premiums,
or discounts that are integral parts of the origination of the underlying financial liability.
Other operating income and expenses
Gains and losses not arising from the Group’s ordinary course of business, such as those arising
from impairment, sale, and disposal of non-current assets, among others, are recognised under
other operating income (expenses) in the Group’s consolidated statement of profit or loss.
Foreign currency translation
Functional and presentation currency
The financial statements of all Group companies are measured using functional currency, which is
the currency of the primary economic environment in which the entity operates. The consolidated
financial statements are presented in euro ("EUR"), the functional and presentation currency of
the Parent Company.
Transactions and balances in foreign currencies
Transactions in foreign currencies are recorded at exchange rates prevailing at the dates of the
individual transactions. For practical reasons, a rate that approximates the actual rate as of the
date of the transaction is often used in day-to-day accounting. Monetary assets and liabilities
denominated in foreign currency are valued at the exchange rates prevailing at the end of the
reporting period.
Foreign exchange gains and losses, realised or otherwise, arising from foreign currency denominated
transactions and balances, including those arising from hedging activities, are recognised in
financial income (cost) in the consolidated statement of profit or loss.
Group companies with different functional currencies
On consolidation, the assets and liabilities of Group companies, whose functional currency is other
than euro, are translated into euro at the exchange rates prevailing at the end of the reporting
period. The income and expenses of these foreign operations are translated into euro at the
average exchange rates for the reporting period. The exchange differences arising from translation
for consolidation are recognised as translation differences in the consolidated statement of
comprehensive income.
Income taxes
The income taxes comprise current tax and deferred tax. Income tax income or expense is rec-
ognised in the consolidated statement of profit or loss, except to the extent that it relates to items
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Multitude Group Annual Report 2021 – Consolidated Financial Statements (Audited)
recognised in other comprehensive income, or directly in equity; then the related tax is recognised
in other comprehensive income or equity, respectively.
Current taxes
Current taxes are based on the results of Group companies and are calculated using local tax reg-
ulations and tax rates that are enacted or substantively enacted at each reporting date. Corporate
taxes withheld at the source of the income, on behalf of Group companies, are accounted for in
income tax expense where they are determined to represent tax on profit or loss for the period.
Deferred taxes
Deferred tax assets and liabilities are determined using the balance sheet liability method for all
temporary differences arising between the tax bases of assets and liabilities and their carrying
amounts in the consolidated financial statements.
Deferred tax assets are recognised to the extent it is probable that future taxable profit will be
available against which the unused tax losses, unused tax credits and deductible temporary differ-
ences can be utilised in the relevant jurisdictions. Deferred tax assets are assessed for realisability
as of each reporting date. When circumstances indicate it is no longer probable that deferred tax
assets will be utilised, adjustments are made as necessary.
Deferred tax liabilities are recognised for taxable temporary differences, and for temporary dif-
ferences that arise between the fair value and the tax base of identifiable net assets acquired
in business combinations. Deferred tax liabilities are not recognised if they arise from the initial
recognition of goodwill. Deferred tax liabilities are provided for the taxable temporary differences
arising from investments in subsidiaries, except for deferred tax liability where the timing of the
reversal of the temporary difference is controlled by the Group, and it is probable that the tempo-
rary difference will not reverse in the foreseeable future.
The enacted or substantively enacted tax rates as of each reporting date, that are expected to
apply in the period when the asset is realised or the liability is settled, are used in the measurement
of deferred tax assets and deferred tax liabilities.
Deferred tax assets and liabilities are not discounted. The Group periodically evaluates positions
taken in tax returns with respect to the situations in which applicable tax regulation is subject to
interpretation. The Group adjusts the amounts of current and deferred tax assets and liabilities
recorded, where it is considered probable, i.e., more likely than not, that certain tax positions
may not be fully sustained upon review by tax authorities. The amounts recorded are based on
the most likely amount or the expected value, depending on which method the Group expects to
better predict the resolution of the uncertainty.
Deferred tax assets and deferred tax liabilities are offset for presentation purposes when there is a
legally enforceable right to set off current tax assets against current tax liabilities, and the deferred
tax assets and deferred tax liabilities relate to income taxes levied by the same taxation authority
on either the same taxable entity or different taxable entities, which intend either to settle current
tax liabilities and assets on a net basis, or to realise the assets and settle the liabilities simultane-
ously in each future period where significant amounts of deferred tax liabilities or deferred tax
assets are expected to be settled or recovered.
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Property, plant and equipment
Property, plant and equipment are recognized in the financial statements at their carrying amount,
which is equal to the cost of acquisition less cumulative depreciation, and where applicable,
cumulative impairment. The cost of acquisition includes costs directly attributable to the acquisition
of the asset.
Subsequent costs are included in the asset’s carrying amount or recognized as a separate asset,
as appropriate, only when it is probable that future economic benefits associated with the item
will flow to the Group and the cost of the item can be measured reliably. All other repairs and
maintenance costs are recognized as expense in the consolidated statement of profit or loss when
they are incurred.
Property, plant and equipment are depreciated using the straight-line method towards their
residual values and over their estimated useful lives, as follows:
Office Building 3 – 8 years
Furniture, fittings, and equipment 3 – 8 years
The asset’s residual value and useful live are reviewed and adjusted, if appropriate, at the end of
each reporting period.
Gain or loss on disposal is determined as the difference between the net disposal proceeds, if any,
and the carrying amount. The gain or loss from disposal is recognised in non-operating income
and expenses in the consolidated statement of profit or loss.
Intangible assets
The Group’s intangible assets mainly consist of internally generated and capitalised software
development costs, as well as computer software purchased from third parties. The Group also
has licenses, trademark, and goodwill that are presented under other intangible assets.
Intangible assets acquired separately are measured on initial recognition at cost. The cost of
intangible assets acquired in a business combination is their fair value as of the date of acquisition.
Research costs associated with internally generated intangible assets, except for development
costs that may be capitalised, are expensed in the period when they are incurred. Development
costs are capitalised only if the Group has the technical feasibility to complete the asset; has an
ability and intention to use or sell the asset; can demonstrate that the asset will generate future
economic benefits; has resources available to complete the asset; and has the ability to measure
reliably the expenditure during development.
The useful economic life of the Group’s intangible assets, other than goodwill, is finite. Following
initial recognition, finite intangible assets are carried at cost less accumulated amortisation and
accumulated impairment losses. Intangible assets are amortised using the straight-line method,
which is considered to best reflect the pattern in which the asset’s future economic benefits are
expected to be consumed, over their useful economic lives as follows:
Capitalized development costs: 2 – 5 years
Computer software: 2 – 10 years
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Multitude Group Annual Report 2021 – Consolidated Financial Statements (Audited)
Trademarks: 3 – 5 years
Licenses: 2 – 10 years
Leases
The Group’s lease agreements primarily consist of office buildings and equipment. At contract
inception, the Group assesses, whether a contract is, or contains, a lease if the contract conveys
the right to control the use of an identified asset for a period of time in exchange for consideration
and, accordingly, recognises a right-of-use asset and a lease liability for all leases with a lease term
exceeding 12 months. The commencement date is the date when the lessor makes the underlying
leased asset available for use by the Group.
The Group applies a practical expedient whereby leases for which the lease term is 12 months or
less at the lease commencement date ("short-term leases") are not recognised in its consolidated
statement of financial position. Instead, the Group recognises the lease payments associated with
short-term leases as an operating expense on a straight-line basis over the lease term. In addition,
as a practical expedient, the Group does not separate certain non-lease components from lease
components but instead accounts for each lease component and associated specified non-lease
component as a single lease component. Other payments for non-lease components, that are
variable based on consumption (e.g., property taxes, insurance payments and variable property
service costs), are recognised as an expense when incurred.
Right-of-use asset
The right-of-use asset is initially measured at cost, which includes the amount of the initial
measurement of the lease liability, any lease payments made at or before the commencement
date, and estimated restoration costs of leased asset to the condition required by the contract at
the end of lease period, less any lease incentives (e.g., lease-free months) and any direct costs of
the lease.
Subsequent to initial measurement, right-of-use assets are measured at cost less any accumulated
depreciation and any accumulated impairment losses and adjusted for certain remeasurements of
the lease liability. The right-of-use asset is depreciated using the straight-line method, from the
commencement date to the earlier of the end of the contractual lease term, or the estimated useful
economic lives of the right-of-use assets, as follows:
Office buildings: 3 – 6 years
Office equipment: 3 – 4 years
At the end of each reporting period, the Group assesses the lease terms of open-ended contracts
to determine whether an extension or reduction in the lease term is appropriate.
Lease liability
At commencement date, lease liabilities are measured at the present value of lease payments to
be made over the lease term. The Group determines the lease term as the non-cancellable term
of the lease, together with any periods covered by an option to extend the lease if it is reasonably
certain to be exercised, as well as any periods covered by an option to terminate the lease if it
is reasonably certain not to be exercised. The lease payments include fixed lease payments and
certain fixed non-lease components less any lease incentives receivable, variable lease payments
that depend on an index or a rate, and appropriate termination fees whenever the lease term has
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been determined based on the expectation that the Group will exercise its option to terminate. The
Group does not generally enter into lease contracts with variable lease payments linked to future
performance or use of an underlying asset.
Lease payments are allocated between principal and finance cost. The finance cost is charged
to profit or loss over the lease period so as to produce a constant periodic rate of interest on
the remaining balance of the liability for each period. In addition, the carrying amounts for the
right-of-use asset and lease liability are remeasured if there is a modification, a change in the lease
term or a change in the future lease payments resulting from a change in an index or rate used to
determine such lease payments. The interest component of the lease payments is recognised as
interest expense within finance costs in the consolidated statement of profit or loss.
Incremental borrowing rate
The lease payments are discounted using the Group’s incremental borrowing rate. This rate is
calculated at the beginning of the lease and is equal to the weighted nominal interest rate paid
on the Group’s long-term borrowings. At the beginning of each period, the Group reviews and
assesses the need to modify the applicable incremental borrowing rate based on whether there
have been significant changes in the economic conditions and assumptions used for modelling the
incremental borrowing rate.
Impairment of non-financial assets
Property, plant and equipment, intangible assets, excluding goodwill, and right-of-use assets are
reviewed annually for impairment whenever events or changes in circumstances indicate that their
carrying amounts may not be recoverable.
Goodwill arises from business combinations accounted for using the acquisition method, where the
Group is the acquirer. Goodwill is not subject to amortisation, but is tested annually for impairment,
or more frequently if events or changes in circumstances indicate impairment may have occurred.
Impairment loss is recognised as a non-operating expense in the consolidated statement of profit
or loss when the asset’s carrying amount exceeds its recoverable amount, which is the higher of
the asset’s fair value less costs of disposal and value-in-use.
Financial assets
Initial recognition and measurement
The Group recognises a financial asset in its consolidated statement of financial position when it
becomes a party to a contract that gives rise to financial instruments and when the underlying
financial instrument meets the definition of a financial asset as set out in IAS 32. At initial recognition,
the Group measures all financial assets are at fair value plus transaction costs, except for those
financial assets classified as subsequently measured at fair value through profit or loss, which are
only measured at fair value at initial recognition.
Classification and subsequent measurement
The Group classifies its financial assets as either financial assets subsequently measured at
amortised cost (carrying amount less loss allowances calculated using expected credit losses),
financial assets measured at fair value with changes recognised through other comprehensive
income ("FVOCI"), and financial assets measured at fair value with changes recognised through
profit and loss ("FVPL"). The selection of the appropriate category is made based on both
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the Group’s business model for managing the financial asset and on the contractual cash flow
characteristics of the asset.
The Group’s business model for managing financial assets is assessed at the portfolio level as this
best reflects the way the business and financial assets are managed in order to generate cash
flows, and how information is provided to management. Similarly, the Group assesses contractual
cash flow characteristics of financial assets at the portfolio level, and where applicable, at the
individual product level. The Group assesses whether the contractual cash flows are generated
solely through payments of principal and interest ("SPPI"), by considering contractual terms that
might introduce elements of variability in the contractual cash flows in relation to contingent events,
leverage features, prepayment clauses, extension of payment terms, and similar modifications to
the contract giving rise to a recognition of the financial asset.
Financial assets measured at amortised cost are debt instruments held within a business model
that has an objective to hold assets to collect contractual cash flows. The Group’s financial assets
measured at amortised cost include loans to customers, cash and cash equivalents, and other
current and non-current receivables from third parties. Subsequent to initial measurement, the
Group determines loss allowances related to financial assets, except for cash and cash equivalents,
using expected credit loss ("ECL") model. The Group’s ECL model, inputs, and assumptions are
disclosed in Note 3.1.
Financial assets at FVOCI are either debt instruments held within a business model which objective
is achieved both by holding the financial assets to collect contractual cash flows and by selling
the financial assets, or equity instruments that would otherwise be classified as financial assets at
FVPL that are irrevocably designated as Financial assets at FVOCI at initial recognition. The Group
did not have any financial assets classified as FVOCI, designated or otherwise, as at and for the
years ended 31 December 2021 and 2020.
Financial assets at FVPL are either equity instruments that do not meet the definition of equity
under IAS 32, debt instruments that do not fall in either of the preceding categories, or debt
instruments that fall in either of the preceding categories but are irrevocably designated as Financial
asset at FVPL at initial recognition to eliminate or significantly reduce measurement or recognition
inconsistency. The Group’s financial assets at FVPL consists of derivative financial assets that are
used to hedge the cash flow impact of changes in exchange rates in relation to foreign currency
denominated intercompany loans, and as a result, do not fall in either of the preceding categories.
The Group did not have any financial assets irrevocably designated as Financial asset at FVPL at
initial recognition as at and for the years ended 31 December 2021 and 2020.
Derecognition
The Group generally derecognises a financial asset, or a part of a financial asset, when its ceases
to have control of the contractual rights that comprise the financial asset, or a part of a financial
asset.
In determining the date when the Group ceases to have control of the financial asset, or a part
of a financial asset, the Group considers the earliest date when the rights to the cash flows from
the asset has expired; when the Group has transferred its rights to receive the cash flows and
substantially all risks and rewards from the asset to another entity; and when the Group has
assumed an obligation to pay the cash flows from the asset to another entity that meets the
requirements set out in IFRS 9 and has transferred substantially all risks and rewards from the
asset to the said entity.
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At derecognition, the Group recognises the difference between the net proceeds received from
the transfer of the financial asset, or a part of a financial asset, to another entity, if any, and the
carrying amount of the financial asset, or a part of a financial asset, transferred as gain or loss on
derecognition of the financial asset in the consolidated statement of profit or loss.
Modification of contractual cash flows
When the contractual cash flows of a financial asset are renegotiated or modified, and the
renegotiation or modification does not result in the derecognition of that financial asset, the Group
assesses whether there have been substantial differences between the terms and conditions, and
the contractual cash flows associated with the financial asset after the modification. If so, the Group
derecognises the carrying amount of the underlying financial asset, recalculates and recognises
the gross carrying amount of the new financial asset based on the revised contractual terms and
cash flows, and recognises any gains or losses arising from such modification in its consolidated
statement of profit or loss.
Modifications of terms and conditions and contractual cash flows related to loans to customers
normally arise from various product features included in the terms and conditions of loan agreements
with customers including rescheduling, payment holidays, due date changes, modification to the
payment schedule, and payment-free months, which do not necessarily constitute forbearance as
defined by EU Regulation 575/2013 ("CRR2"). These arrangements normally arise from short-term
consumer loans that are not considered to be individually significant at Group level, and usually
occur without substantially modifying the contractual terms and cash flows of the underlying loan
agreements apart from upfront payments of minor rescheduling and extension fees. As a result,
the Group does not usually recognise any gain or loss arising from modifications of low-value
consumer loans, rather, upfront rescheduling and extension fees are recognised as revenue at the
point in time when the Group’s performance obligation to reschedule or extended the underlying
loan agreement has been satisfied.
Financial liabilities
Classification
The Group generally recognises and classifies all its issued debt instruments as financial liabilities
subsequently measured at amortised cost, except for derivative financial liabilities that are
classified as financial liabilities at FVPL and issued debt instruments with characteristics of an
equity instrument, classified as such. The Group’s financial liabilities measured at amortised cost
consist of borrowings, deposits from customers, lease liabilities, trade payables, and other current
and non-current liabilities that will be extinguished through cash payments.
At initial recognition, the Group assesses whether an issued debt instrument should be classified
as an equity instrument. The Group considers all relevant contractual terms to determine whether
the instrument does not include a contractual obligation to deliver cash or another financial asset
to another entity, or to exchange financial assets or liabilities with another entity under conditions
that are potentially unfavourable to the Group. In applying these criteria, the Group considers that
discretionary payments of the principal amount, or any interests thereon, to the holders of the
issued debt instrument do not necessarily constitute a contractual obligation to deliver cash or
another financial asset to another entity. As at 31 December 2021, the carrying amount of issued
perpetual bonds classified as equity instrument in the Group’s consolidated statement of financial
position is EUR 50 million.
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Measurement
The Group generally recognises financial liabilities on initial measurement at their fair value including
transaction costs, and subsequently at amortised cost using the effective interest method, with
resulting interest expense recognised as a financial cost in the consolidated statement of profit
or loss, except for financial liabilities at FVPL, which are initially measured at fair value, excluding
transaction costs, and are thereafter carried at fair value, with changes in fair value recognised
through profit or loss. The Group’s financial liabilities at FVPL consists of derivative financial
liabilities that are used to hedge the cash flow impact of changes in exchange rates in relation to
foreign currency denominated intercompany loans.
Derecognition and modification
The Group derecognises a financial liability, or portion of a financial liability, when its contractual
obligations that comprise the financial liability are extinguished.
An exchange between the Group and the lender of debt instruments with substantially different
terms are accounted for as an extinguishment of the original financial liability and the recognition
of a new financial liability. Similarly, a substantial modification of the terms of an existing financial
liability, or a part of an existing financial liability, is accounted for as an extinguishment of the
original financial liability and the recognition of a new financial liability.
The Group recognises the difference between the carrying amount of a financial liability, or part
of a financial liability, extinguished or transferred to another party and the consideration paid,
including any non cash assets transferred, or liabilities assumed, as gain or loss in the consolidated
statement of profit or loss.
When the Group repurchases a part of a financial liability, the Group allocates the previous carrying
amount of the financial liability between the part that continues to be recognised and the part that
is derecognised based on the relative fair values of those parts on the date of the repurchase.
Similarly, the Group recognises the difference between the carrying amount allocated to the part
derecognised and the consideration paid, including any non cash assets transferred, or liabilities
assumed, for the part derecognised in the consolidated statement of profit or loss.
Cash and cash equivalents
Cash and cash equivalents include cash at bank and on hand as well as short-term highly liquid
investments that are readily convertible to known amounts of cash with the maturities at acquisition
of three months or less, as well as bank deposits with maturities or contractual call periods at
acquisition of three months or less.
Bank deposits that are set aside for the purpose of funding the Group’s swaps and forward
contracts and do not meet the definition of cash and cash equivalents are classified as financial
assets at amortised cost and presented as Receivables from banks under Other current financial
assets in the consolidated statement of financial position.
Derivative instruments
Foreign exchange swaps, and forward contracts are part of the Group’s risk management policy.
All derivatives arising from swaps and forward contracts are recognised initially at fair value on
the date a derivative contract is entered into and subsequently remeasured at fair value. Derivative
financial assets and liabilities are presented in the consolidated statement of financial position
under the current assets and current liabilities section, respectively.
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The Group does not apply hedge accounting. As a result, realised and unrealised gains and losses
arising from changes in fair values of the derivative financial assets and liabilities, as well as
accumulated interest income and expenses for interest swaps and forward contracts during the
financial period, are recognised as finance income or cost in the Group’s consolidated statement
of profit or loss.
Fair value measurement
Fair value is the price that would be received to sell an asset or paid to transfer a liability in an
orderly transaction between market participants at the measurement date. The fair value of an
asset or a liability is measured using the assumptions that market participants would use when
pricing the asset or liability, assuming that market participants act in their economic best interest,
by using quoted market rates, discounted cash flow analyses and other appropriate valuation
models, whereas equity instruments are mainly valued using Multitude’s market share price,
adjusted using valuation techniques that can include both observable and unobservable inputs,
where applicable. The Group uses valuation techniques that are appropriate in the circumstances
and for which sufficient data is available to measure fair value, maximising the use of relevant
observable inputs and minimising the use of unobservable inputs.
All financial instruments for which fair values are being measured or disclosed in the consolidated
financial statements are categorised within the fair value hierarchy, described as follows, based on
the lowest level input that is significant to the fair value measurement as a whole:
Level 1 - Quoted (unadjusted) market prices for exchange-traded products in active markets for
identical assets or liabilities
Level 2 - Valuation techniques for which significant inputs other than quoted prices are directly or
indirectly observable; and
Level 3 - Valuation techniques for which significant inputs are unobservable.
The Group categorises assets and liabilities that are measured at fair value on a recurring basis into
an appropriate level of the fair value hierarchy at the end of each reporting period as presented in
Notes 17 and 19 for financial assets and liabilities, respectively.
Contingent assets and contingent liabilities
The Group discloses probable assets and contingent liabilities such as commitments, guarantees,
pledges, and other items that do not meet the recognition criteria for an asset or a liability, as
outlined in the conceptual framework, to the extent that the amount can be measured reliably
and that upon meeting such measurement criteria, the underlying asset or liability could have
significant impact to the Group’s consolidated statements of financial position, profit or loss, and
cash flows. The Group does not disclose contingent assets and contingent liabilities wherein the
probability of the occurrence or non-occurrence of one or more uncertain future events that can
confirm the existence of the underlying asset or liability is considered remote.
At each reporting period, the Group performs a continuous assessment and monitoring of whether
underlying events and circumstances give rise to assets and liabilities that requires disclosure
and recognition in its consolidated statement of financial of position. As at 31 December 2021
and 2020, the Group does not have any contingent assets or contingent liabilities that require
disclosure its consolidated financial statements.
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Equity
Share capital
The Group has 21,577,760 shares issued and outstanding as at 31 December 2021 and 2020, with
par value of EUR 1.00 per share. The difference between the share par value and the fair value of
considerations received in exchange for such shares are accounted for as additional paid-in capital.
Treasury shares
The Group recognises its own equity instruments that are acquired (treasury shares) as a reduction
of equity at cost of acquisition. When cancelled or reissued, the acquisition cost of treasury shares
is recognised in retained earnings or other distributable reserves of the equity. The Group holds
146,200 shares, representing 0.7% of total shares issued, held as treasury shares as at 31 December
2021 and 2020. No consideration is paid to the treasury shares in a distribution of equity.
Perpetual bonds
The carrying amount of perpetual bonds issued by the Group, classified as an equity instrument,
is presented as part of consolidated statement of shareholders’ equity. Transaction costs, interest
payments, and principal repayments are deducted directly from retained earnings.
Unrestricted and other reserves
The unrestricted equity reserve contains the amount paid for shares in a share issue, while other
reserves include Multitude’s legal reserves.
The Group did not declare any dividend distributions in relation to the results of its operations for
the years ended 31 December 2021 and 2020.
Subsequent events
The Group monitors subsequent events or those transactions occurring after the end of the
reporting period but before its consolidated financial statements are authorised for issue. The
Group assesses whether each subsequent event provides evidence of conditions that existed at the
end of the reporting period, constituting an adjusting event, or whether such subsequent events
are indicative of conditions that arose after the reporting period, constituting a non-adjusting
event.
The Group further assesses whether each identified subsequent event would significantly impact
the fair presentation of the Group’s consolidated financial statements, including the accompanying
note disclosures, and accordingly adjusts or discloses the nature, timing, and amount relating to
each significant adjusting or non-adjusting subsequent events, respectively.
Significant adjusting or non-adjusting subsequent events that requires adjustments or additional
disclosures occurring after 31 December 2021 and 31 March 2022, when Multitude’s Board
of Directors authorised the consolidated financial statements as at and for the year ended 31
December 2021 are disclosed in Note 23.
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3. Critical accounting estimates and judgements
The preparation of financial statements requires use of management judgment in electing and
applying accounting policies as well as making estimates and assumptions about the future. These
judgments, estimates and assumptions may have a significant effect on the amounts recognised
in the financial statements.
The estimates and assumptions used in determining the carrying amounts of assets and liabilities
are based on historical experience, expected outcomes and various other factors that were
available when these consolidated financial statements were prepared, and they are believed to be
reasonable under the circumstances. The estimates and assumptions are reviewed continually and
revised if changes in circumstances occur, or as a result of new information or more experience. As
estimates and assumptions inherently contain a varying degree of uncertainty, actual outcomes may
differ resulting in adjustments to the carrying amounts of assets and liabilities in the subsequent
periods.
The accounting matters presented in this note are determined to involve the most difficult,
subjective or complex judgments, or are considered as key sources of estimation uncertainty.
3.1 ECL model, inputs, and assumptions
The Group calculates expected credit losses ("ECL") as a function of the estimated exposure of
default ("EAD"), probability of default ("PD"), loss given default ("LGD"), and where applicable,
discounting using the effective interest rate ("EIR2").
3.1.1 Exposure at default
For MicroLoans, the Group considers that the gross balance, inclusive of the principal and processing
fees charged at the inception of the loan, of its outstanding loans to customers at reporting date
to be a reasonable estimate of EAD in regard to this facility.
On the other hand, PlusLoans, PrimeLoans and SME loans facilities are typically subject to a monthly
repayment schedule which is expected to impact EAD at different points in time throughout the
residual life of such facilities. Similarly, the Group charges daily interest on outstanding balances
in relation to Credit Limit facilities and collects monthly minimum repayments, which ultimately
impacts EAD. However, due to the high volume and low value of individual PlusLoans and credit
facilities, the Group does not calculate the amortisation profile to estimate the EAD over the
different points in time throughout the residual life of such facilities, rather, the Group considers
the gross balance, inclusive of both principal and accrued interests, of its outstanding loans to
customers at reporting date to be a reasonable estimate of EAD in regard to these facilities.
3.1.2 Probability of default
For MicroLoans, the Group utilises a roll-rate methodology at the country level, which employs
statistical analysis of historical data and experience of delinquency to estimate the amount of
loans that are expected to reach default status as a result of events which the Group is not able
to identify on an individual loan basis. Under this methodology, loans are grouped into buckets
according to the number of days past due ("DPD buckets") and statistical analysis (Markov Model)
is used to estimate the likelihood that loans in each bucket will progress through the various stages
of delinquency until default status is achieved.
In line with IFRS 9, the Group adopted the curve-stitching methodology in order to estimate the
unconditional PDs for its PlusLoans, PrimeLoans, SME loans and Credit Limit facilities. Under
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this approach, an analysis of historical default data is carried out in order to estimate cumulative
monthly loss rates at various snapshot dates. Subsequently, statistical analysis is employed in
order to combine curves with different historical performance windows into a single PD curve over
the expected lifetime of the short-term credit exposures. Loans are further grouped into ranges
according to the number of days past due, with an individual lifetime PD curve being calculated
for each range. Similar to MicroLoans, this methodology is also applied at the territory or country
level in order to incorporate adaptations to reflect the nature of the different markets in which the
Group operates.
The unconditional PD for each loan portfolio is further adjusted to consider forward-looking
information through macro-economic modelling to arrive at the applicable PD.
3.1.3 Loss given default
The Group calculates LGD based on the loan sales price and loan repayment recoveries.
Based on historical data on past portfolio sales, the Group estimates that it will take a period of
approximately 12 months after occurrence of default before it can sell the underlying portfolio,
and that the average loan sales price of each portfolio will be between 20% and 51%, and that the
average loan sales price will be approximately 2% lower at each subsequent DPD bucket.
For MicroLoans, the Group utilises the statistical information the roll-rate methodology, to estimate
the level of recoveries from loan repayments it expects subsequent to loan facilities reaching non-
performing status.
For PlusLoans, PrimeLoans, SME loans and Credit Limit facilities, the Group estimates the level of
recoveries from loan repayments it expects subsequent to loan facilities reaching non-performing
status. The Group calculates the marginal recovery rates up to 12 months after default by tracking
the monthly recoveries from loan repayments experienced over each performance window as a
percentage of the total balance of defaulted exposures at each snapshot date.
3.1.4 Discounting using effective interest rate
The Group discounts the recoverable amount, which represents the future cash flows expected
to be received from loan sales and loan repayment recoveries using the EIR at the date of default
at a rate reflective of the late payment interest based on the applicable discount period, taking
into account all relevant contractual terms relating to the loan. In the case of loan sales, a time to
sell period of 12 months is assumed, whereas repayment recoveries are discounted on a monthly
basis based on the month of occurrence. Subsequently, the Group discounts the ECL at the date
of default at reporting date.
3.1.5 Forward-looking considerations
IFRS 9 requires institutions to estimate ECL by taking into account ‘reasonable and supportable
information that is available without undue cost or effort at the reporting date about past events,
current conditions and forecasts of future economic conditions’. Accordingly, the Group uses macro-
economic modelling to determine the forward-looking factors used to adjust the unconditional PD
before arriving at the final PD used in the ECL calculations.
The Group starts by identifying the key drivers of credit risk and credit losses associated with each
of its loan portfolio and then analysing the relationship between the identified key drivers and
the underlying macro-economic variables ("MEV"), taking into account variabilities in customer
behaviours and different product characteristics for each market and portfolio. The Group utilises
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various statistical techniques in order to establish relationship between the identified key economic
drivers and the Group’s historical data on customer behaviour and occurrences of default at market
and portfolio level.
Starting from 30 June 2021, the Group has shifted from a linear regression analysis to an ‘Error
Correction Model’ ("ECM") in determine the relationship between the performance of each
Market’s loan portfolios and the underlying macro-economic factors. ECM improves the overall
reliability of the ECL model by establishing better statistically significant relationship between
the portfolio performance, the underlying macro-economic variables, and market and portfolio-
specific spectrum. ECM also takes into account both short and long-term effects of identified
macro-economic variables through multiple regression analysis against the time series of defaults
observed at a specific market and portfolio. Further, ECM allows for error corrections by providing
observed deviations from long-run equilibrium that can influence short-run dynamics. It also takes
into account the speed at which defaults return to equilibrium after changing the macroeconomic
variables considering the long-term equilibrium. This shift also resulted in the establishment of
stricter requirements for new loans and overall improvement in the average quality of customer
base.
In markets where the Group has recently launched new products, the Group only uses proxy
statistical data available in other markets with close geographical and demographical similarities
due to limitations in the availability of historical data.
In regard to the MEVs, to be able to determine the way in which economic conditions will be
impacting the ECL estimates, the Group first performs an assessment to select the MEV which
has the highest correlation to credit risk factors for a certain country and product. The Group has
determined that the key drivers for microloans, PlusLoans, Credit Limit facilities and prime loans
are Gross Domestic Product ("GDP"), Personal Disposable Income ("PDI") and Unemployment
Rate ("UR"), whereas the Consumption Rate Private ("CRP") is the key driver for SME loans.
The choice of MEV to be used for a particular country and product is determined through an
optimised approach in which the ECM is run separately for each of these variables. The variable
that is ultimately applied for the respective portfolio is the one that produces the most statistically
significant result.
For these key drivers, the Group relies on the market level data published by Oxford Economics. In
order to capture a range of possible future outcomes, three possible scenarios are considered in
the determination of the ECL - ‘base line’, ‘downside’ and ‘upside’.
The ‘base line’ scenario captures business-as-usual macroeconomic expectations if the current
rhythm of economic activity is maintained. The ‘Downside’ scenario is based on a subdued level
of economic activity hypothesized to correspond to an economic recession, while the ‘Upside’
Scenario is based on the assumption that it is possible for the economy to marginally improve over
benign economic conditions.
The Group considers the ‘base line’ scenario as most likely outcome as it is based on published
authoritative sources, whereas the ‘downside’ and ‘upside’ scenarios represent a more pessimistic
and optimistic views, respectively, as they factor in current top and emergent risks and opportunities.
As the Group considers that each scenario represents plausible outcome, probability weightings
are assigned to each scenario based on current global economic outlook – 60% for ‘base line’
scenario, and 20% each for ‘downside’ and ‘upside’ scenarios.
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Personal disposable income
Billion
units
2021 2022 2023 2024
Cur. Base Down Up Base Down Up Base Down Up Base Down Up
Germany EUR 158 158 158 166 163 166 169 170 169 171 173 171
Sweden SEK 212 212 212 214 212 214 216 215 216 219 219 220
Billion
units
2021 2022 2023 2024
Cur. Base Down Up Base Down Up Base Down Up Base Down Up
Finland EUR 10.11 10.09 10.11 10.32 10.04 10.48 10.49 10.54 10.60 10.62 10.59 10.71
Gross domestic product
Billion
units
2021 2022 2023 2024
Cur. Base Down Up Base Down Up Base Down Up Base Down Up
Brazil BRL 154 154 154 156 153 157 160 161 162 164 164 166
Czechia CZS 432 431 432 454 438 462 470 474 477 483 489 488
Estonia EUR 2 2 2 2 2 2 2 2 2 2 2 3
Hungary EUR 34 34 34 35 34 35 36 36 37 37 37 37
Lithuania EUR 4 4 4 4 4 4 4 4 4 4 4 4
Latvia EUR 2 2 2 2 2 2 3 3 3 3 3 3
Netherlands EUR 65 65 65 66 64 68 67 68 68 68 69 69
Poland PLZ 187 187 187 195 190 197 202 203 204 208 209 209
Romania RON 15 15 15 16 15 16 16 16 16 16 16 17
Spain EUR 95 95 95 100 97 103 104 105 105 106 107 107
Sweden SEK 443 442 443 453 442 459 462 465 466 470 472 474
The following tables show the outlooks on the aforementioned MEVs as at 31 December 2021:
Unemployment rate
In %
2021 2022 2023 2024
Base Down Up Base Down Up Base Down Up Base Down Up
Australia 5.3 5.3 5.3 4.7 5.3 3.9 4.5 4.2 4.1 4.5 4.4 4.3
Bulgaria 5.9 5.9 5.9 5.1 6.0 4.8 4.7 4.6 4.3 4.6 4.3 4.3
Denmark 3.3 3.3 3.3 3.4 4.3 3.1 3.6 3.5 3.2 3.7 3.3 3.5
Finland 7.2 7.2 7. 2 7.0 7.4 6.7 6.9 6.9 6.7 6.7 6.6 6.5
Hungary 7.2 7.2 7. 2 6.6 7.5 6.4 6.5 6.4 6.2 6.4 6.2 6.1
Norway 3.4 3.4 3.4 3.4 3.8 2.9 3.4 3.3 3.1 3.4 3.2 3.2
Romania 3.0 3.1 3.0 3.2 4.2 3.0 3.2 3.1 2.8 3.2 2.8 2.8
Consumption rate private
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3.2. Recoverability of deferred tax assets
The Group uses judgment in determining the extent to which deferred tax assets can be recognised.
The recognition of deferred tax assets is based on the assessment of whether it is probable that
sufficient taxable profit will be available in the future to utilise the deductible temporary differences,
unused tax losses and unused tax credits before the unused tax losses and unused tax credits
expire. This assessment requires estimates of the future financial performance of a particular legal
entity or a tax group that has recognised the deferred tax asset.
3.3. Fair value of rewards shares
The Group valuation techniques to determine the fair value of the reward shares arising from the
2021 performance share plan at grant date. The Group applies a valuation methodology based on
geometric Brownian motion and the assumption that logarithmic returns are normally distributed,
taking into account the dividend adjusted share price at valuation dates, expected rate of return,
and risk-free volatility. Since the performance share plan is essentially a derivative, the Group
applies a risk-neutral valuation concept that uses risk-free rate as the expected return. Using this
methodology, the Group has calculated the performance share valuation by modelling potential
outcomes of the Group’s share price at the end of the performance period and discounted the
average calculated payoffs from each outcome to get the present value of the average payoffs
after performance period.
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4. Financial risk management
4.1 Financial risk factors
The Group’s activities are exposed to a variety of financial risks, including credit risk, market risk
(foreign exchange, cash flow and fair value interest), and liquidity risk. The Group’s overall risk
management program focuses on financial markets and seeks to minimise potential adverse effects
on the Group’s financial performance. Risk management is primarily carried out by Group treasury
that identifies, evaluates, and hedges financial risks in close cooperation with the management
of Group’s operating units, who are responsible for the overall effectiveness of risk management.
4.2 Credit risk
4.2.1 Credit risk management
Credit risk is defined as the potential for financial losses arising from financial instruments due to
the failure of the counterparty to meet their obligations to the Group. Multitude’s credit risk arises
from exposure from loans to customers, cash and cash equivalents, and other financial assets at
amortized cost, arising from receivables from sold portfolio, and other current and non-current
receivables, advances, and deposits to other third parties.
The Group’s maximum credit risk exposure without collateral held or other credit enhancements
as at 31 December are as follows:
EUR ’000 2021 2020
Loans to customers (gross) 565,881 507, 372
Cash and cash equivalents 301,592 236,564
Other financial assets at amortized cost:
Receivables from banks 5,108 5,095
Receivables from sold portfolio 4,657 3,848
Other non-current receivables 6,215 5,028
Other current financial assets 3,579 3,405
Total 887,032 761,312
Loans to customers
The Group’s loans to customers can be grouped into several portfolio based on the structure of the
underlying con-tracts with customers:
SweepBank
Prime Loans
Prime Loans are longer-term instalment loans of up to EUR 30,000 for consumers, with loan
maturity ranging between 1-10 years. The average loan amount is EUR 8,000 and the average loan
term five years.
Ferratum
Micro Loan
A Micro Loan is a rapid and easy loan for the instant, short-term need and quick payback. Micro
Loans range from EUR 25 to EUR 1,000 and are paid back in one single instalment within 7–60
days. The average term of a Micro Loan is 30 days, with an average loan of EUR 279.
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Multitude Group Annual Report 2021 – Consolidated Financial Statements (Audited)
Cash and cash equivalents
Credit risk exposure from cash and cash equivalents arise mainly from potential liquidity issues, cou-
pled with liability caps applicable in various jurisdictions, of banks and other financial institutions which
hold the Group’s cash and cash equivalents. To manage this risk, the Group diversifies its deposits
amongst 350 bank accounts in 19 countries.
The table below shows the amount of cash and cash equivalents deposited in various bank accounts,
grouped based on Fitch’s credit ratings for the years ended 31 December:
Plus Loan
A Plus Loan is a larger loan, currently ranging from EUR 300-4,000 with maturity periods of
between 2–18 months. The average term for a Plus Loan is 416 days and the average loan amount
is EUR 927.
Credit Limit
Credit Limit is a pre-approved credit line, also called revolving credit, allowing customers financial
flexibility. Eligible customers are pre-approved for up to EUR 5,000 and can draw money or repay
without fixed amounts or timelines. Credit Limit is similar to a credit card without a physical card.
The average loan amount for a Credit Limit is EUR 1,521, and the term is open-ended.
CapitalBox
Instalment loans
CapitalBox provides working capital instalment loans of up to EUR 350,000. These 6–36-month
solutions are designed to help SMEs, e.g., finance expansion, inventory, marketing, hiring new
talent, and purchasing or leasing equipment. The average loan amount is EUR 15,842 and the
average term 482 days.
Credit Line
CapitalBox offers a Credit Line as a flexible form of finance to SME’s, which can be utilised based
on their need. The Credit Line can range from EUR 2,000 to EUR 350,000, and the payback period
to extend to up to 50 months.
Purchase Finance
Through partnerships with retailers, CapitalBox financing can be offered to business customers for
their purchases at a point of sale.
Credit risk exposure from loans to customers pertain to short and long-term lending as part of
the Group’s principal activities and business model. Multitude considers this exposure as the
most critical risk and the biggest driver of risk in its operating structure. The Group carefully
manages this risk through a centralised risk governance and management framework that allows
for group-wide steering of scoring and credit policies, while measuring and monitoring of country
and portfolio-specific performances and credit risks in varying aggregation levels and frequencies.
Customer credit rating and grading systems are in place to facilitate early identification and
management of potential deteriorations in loan quality. Credit decisions are based on established
risk governance framework, business credit policies, customer behaviour scorecards and risk
categories, and country-specific legislations. Credit risk exposure, including recognition and
measurement of expected credit losses on loans to customers are discussed in more detail in Note
4.2.3.
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EUR ’000 2021 2020
AA - 1,071
AA- 1,773 2,139
A+ 103,773 84,009
A 59,757 76,603
A- 69,696 2,819
BBB+ 5,796 16,297
BBB 23 12,267
BBB- 17,48 8 74
BB+ - 1,879
BB 8,575 -
BB- 208 -
B 151 -
B- - 20
No rating available 34,352 39,385
Total 301,592 236,564
Other financial assets at amortized cost
The Group’s other financial assets are mainly comprised of receivables from banks, receivables
from sold portfolio, and other current and non-current financial assets.
Receivables from banks include bank deposits that are set aside for the purpose of funding the
Group’s swaps and forward contracts and do not meet the definition of cash and cash equivalents.
Credit risks associated with these receivables are similar to those of cash and cash equivalents
and are managed by the Group’s treasury function as part of its hedging activities as discussed in
Note 4.3.1.
Receivables from sold portfolio include mostly loans to customers that were considered to be
non-performing and credit impaired. The Group manages the credit risk associated with these
loans by selling related portfolio, in part or as a whole, to other financial institutions, normally on a
non-recourse basis. The Group has defined vetting procedures to ensure the credit risk exposure
arising from any amounts receivable from sold portfolio are minimised, and such portfolio sales
are backed by strict contractual terms and conditions in regard to payment terms and settlement
of the amount due to the Group.
Other current and non-current financial assets mostly include non-operative receivables and
deposits from various third parties. Credit risk exposure arising from underlying financial assets
are individually assessed by the Group at the end of each reporting period based on the applicable
measurement guidelines under IFRS 9.
Recognition and measurement of expected credit losses in relation to other financial assets at
amortised cost are discussed in detail in Note 4.2.3.
4.2.2 Expected credit losses
IFRS 9 requires that an entity shall recognise loss allowance for ECL relating financial assets measured
at amortised cost and financial assets at FVOCI, both at initial recognition and thereafter at each
reporting date. Since Multitude does not have any Financial assets at FVOCI, this section only
153
Multitude Group Annual Report 2021 – Consolidated Financial Statements (Audited)
applies to the Group’s financial assets measured at amortised cost, including loans to customers,
and other financial assets measured at amortised cost, as outlined in Note 3.2.1.
4.2.3 ECL for loans to customers
Following ‘three-stage’ model for recognising ECL under IFRS 9, at initial recognition, the Group
presumes that loans to customers are not credit-impaired (Stage 1) and measures the related loss
allowance at an amount equal to the portion of credit losses from expected defaults occurring
within the next 12 months (’12-month ECL’).
At each reporting period, the Group assesses whether a significant increase in credit risk (‘SICR’)
since initial recognition has been identified (Stage 2) or whether the underlying financial assets
have been credit-impaired (Stage 3). In doing this as-sessment, the Group compares the risk of
default occurring over the expected lifetime of its loans to customers at initial recognition and
as at the reporting date, considering relevant, reasonable, and supportable information based
historical data, credit scoring, delinquency status, and days past due (‘DPD’), and other forward-
looking factors.
Due to the relatively high volume and low value of the underlying loans to customers, the Group
generally considers that a significant increase in credit risk has occurred for Micro Loans, Plus Loans,
and Credit Limit facilities when the outstanding loan balances exceed 30 DPD, and accordingly
categorises the underlying loans to customers and measures ECL under Stage 2.
Accordingly, the Group considers that default has occurred when outstanding balances for
MicroLoans exceed 90 DPD, and outstanding balances for PlusLoans, PrimeLoans, Credit Limit
facilities and SME loans exceed 60 to 90 DPD, depending on the market where the portfolio
were originated. ECL for the underlying loans to customers are categorised under Stage 3. Loss
allowances on loans to customers under Stages 2 and Stage 3 are measured based on expected
credit losses occurring throughout the lifetime of the financial assets (‘lifetime ECL’).
The Group further categorises outstanding loans to customers using internal risk grading system
based on their credit quality and performance, with ‘Regular’ considered to be ’performing’ and
not-credit impaired (Stage 1), ‘Watch’ and ‘Substandard’ considered as ‘underperforming’ with
occurrence of SICR since initial recognition (Stage 2), and ‘Sub-standard’ and ‘Doubtful’ considered
to be ‘non-performing’ and credit-impaired (Stage 3).
The table below shows the Group’s gross outstanding loans to customers balances, risk grading,
and basis for ECL recognition and measurement as at the years ended 31 December:
Risk grade Category Basis for ECL
Days past due*
2021 2020
Lower
range
Upper
range
Regular Performing
Stage 1 (12-month
ECL)
0 to 30 386,621 304,113
Watch Underperforming Stage 2 (lifetime ECL) 31 - 45 31 - 60 20,207 14,813
Substandard Underperforming Stage 2 (lifetime ECL) 46 - 60 61 - 90 9,416 9,158
Doubtful Non-performing Stage 3 (lifetime ECL) 61 - 180 91 - 180 27,971 29,908
Loss Non-performing Stage 3 (lifetime ECL) More than 180 days 121,666 149,381
Total 565,881 507,373
*Lower and upper ranges of days past due are based on DPD thresholds of 60 and 90 days, respectively, to
be considered as non-performing.
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In addition, the table below summarises the movements and the balances of loss allowances for
loans to customers for the years ended and as at 31 December:
EUR ’000
Stage 1
12-month
ECL
Stage 2
Lifetime
ECL
Stage 3
Lifetime
ECL
Total
GROSS LOANS TO CUSTOMERS
As at 1 January 2021 304,113 23,971 179,289 507,373
Transfers in between stages:
Transfers out of Stage 1
(42,493) 8,358 34,135 -
Transfers out of Stage 2
2,473 (12,070) 9,597 -
Total changes from transfers in between Stages
(40,020) (3,712) 43,732 -
Other changes in gross loans to customers
New loans originated during the year
704,726 28,796 62,357 795,879
Loans derecognized during the year
(581,661) (19,509) (118,683) (719,853)
Write-offs
- - (17,451) (17,451)
Changes in forex and other movements
(537) 77 393 (67)
Net changes in gross loans to customers
82,508 5,652 (29,652) 58,508
Gross loans to customers as at 31 December 2021
386,621 29,623 149,637 565,881
LOSS ALLOWANCES
Loss allowances, as at 1 January 2021
20,589 7,818 118,011 146,418
Transfers in between stages:
Transfers out of Stage 1
(3,743) 603 3,141 -
Increase (decrease) due to transfers out of Stage 1
- 1,718 13,471 15,189
Transfers out of Stage 2
583 (3,834) 3,250 0
Increase (decrease) due to transfers out of Stage 2
(393) - 2,428 2,035
Increase (decrease) due to changes in DPD buckets
340 16 9,997 10,353
Total changes from transfers in between Stages
(3,213) (1,497) 32,287 27,577
Other changes in loss allowances:
New loans originated during the year
42,576 9,321 31,472 83,369
Loans derecognized during the year
(38,204) (6,801) (74,639) (119,644)
Write-offs
- - (17,451) (17,451)
Remeasurements from changes in model
(1,126) (58) 1,358 174
Unwind of discount
- - 787 787
Changes in forex and other movements
(14) 23 770 779
Net changes in loss allowances
19 988 (25,416) (24,409)
Loss allowances as at 31 December 2021
20,608 8,806 92,595 122,009
Impaired loan coverage ratio (‘ICLR’) 5.3% 29.7% 61.9% 21.6%
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Multitude Group Annual Report 2021 – Consolidated Financial Statements (Audited)
EUR’000
Stage 1
12-month
ECL
Stage 2
Lifetime
ECL
Stage 3
Lifetime
ECL
Total
GROSS LOANS TO CUSTOMERS
As at 1 January 2020 321,722 33,086 201,105 555,913
Transfers in between stages:
Transfers out of Stage 1
(66,191) 14,230 51,961 -
Transfers out of Stage 2 10,214 (30,752) 20,538 -
Transfers out of Stage 3 4,040 1,432 (5,472) -
Total changes from transfers in between Stages (51,937) (15,090) 67,027 -
Other changes in gross loans to customers
New loans originated during the year
621,870 29,965 66,628 718,463
Loans derecognized during the year (587,802) (23,786) (129,890) (741,478)
Write-offs - - (20,868) (20,868)
Changes in forex and other movements 260 (204) (4,713) (4,657)
Net changes in gross loans to customers
(17,609) (9,115) (21,816) (48,540)
Gross loans to customers as at 31 December 2020
304,113 23,971 179,289 507,373
LOSS ALLOWANCES
Loss allowances, as at 1 January 2020
23,330 8,822 137,594 169,746
Transfers in between stages:
Transfers out of Stage 1
(6,070) 990 5,080 -
Increase (decrease) due to transfers out of Stage 1 - 2,493 22,730 25,223
Transfers out of Stage 2 2,140 (8,601) 6,461 -
Increase (decrease) due to transfers out of Stage 2 (1,457) - 5,518 4,061
Transfers out of Stage 3 365 2,033 (2,398) -
Increase (decrease) due to transfers out of Stage 3 (69) (1,701) - (1,770)
Increase (decrease) due to changes in DPD buckets 300 154 14,734 15,188
Total changes from transfers in between Stages (4,791) (4,632) 52,125 42,702
Other changes in loss allowances:
New loans originated during the year
34,222 9,424 39,050 82,696
Loans derecognized during the year (35,669) (5,900) (87,797) (129,366)
Write-offs - - (20,868) (20,868)
Remeasurements from changes in model 3,643 203 5,434 9,280
Unwind of discount
- - (4,028) (4,028)
Changes in forex and other movements (146) (99) (3,499) (3,744)
Net changes in loss allowances
(2,741) (1,004) (19,583) (23,328)
Loss allowances as at 31 December 2020
20,589 7,818 118,011 146,418
Impaired loan coverage ratio (‘ICLR’) 6.8% 32.6% 65.8% 28.9%
Transfers out of Stage 1 are driven by the underlying gross loans to customers to have significant increase in
credit risks since initial recognition (Stage 2) or become credit-impaired (Stage 3), whereas transfers out of
Stages 2 or 3 result from the underlying gross loans to customers no longer meeting said definitions.
Transfers in between Stages or changes within DPD bucket that do not necessarily impact ECL stages could
also result to increase (decrease) in loss allowances during the year.
Remeasurements from changes in ECL model, inputs and assumptions are mainly driven by updating the
calculations, statistics and modelling parameters relating to EAD, PD, LGD, and EIR based on most recent
available information at reporting date. Unwind of discount is driven by the amortisation of the ECL present
value for long-outstanding loans to customers.
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4.2.3 ECL for other financial assets at amortised cost
IFRS 9 provides for a practical expedient for recognising 12-month ECL for financial instruments
that are deemed to have low credit risk at reporting date. Where applicable, the Group applies this
practical expedient in determining loss allowances in regard to other financial assets measured
at amortised cost. This is to the extent that the underlying receivables from counterparties are
considered to be ‘investment grade’ based on the definition of external rating agencies – between
AAA to BBB- (Standard & Poor’s, Fitch) or Aaa-Baa3 (Moody’s).
At each reporting date, the Group assesses whether there have been any changes in circumstances
that would result into significant increase in credit risk since initial recognition in relation to its other
financial assets at amortised cost and determines whether loss allowances should be recognised
using lifetime ECL.
4.2.4 Write-off policy
The Group writes off and derecognises loans to customers and other financial assets at amortised
cost when it determines that these are credit-impaired for a significant period of time, and the
Group has exhausted all practical efforts and debt recovery strategies. In some cases, the Group
may opt to conduct a one-off sale of the underlying financial assets, in part or as a whole, to third
parties.
In case of sale, the Group recognises the gain or loss from the sale of loans to customers or other
financial assets as the difference between the consideration received, and the carrying amount
(gross amount less any loss allowances) of such financial assets and costs incurred during the sale,
in the statement of profit or loss. In case of the write-offs, loss on disposal is recognised equal to
the carrying amount of such financial assets in the consolidated statement of profit or loss.
4.2.5 Credit concentration risk
Credit concentration risk exposure results from inadequate diversification of the Group’s loans
to customers. The Group manages this risk by actively and regularly monitoring, measuring, and
analysing credit concentrations at the portfolio and market levels, and where applicable, with
other counterparties.
Credit concentration risk for counterparties
The Group’s loans to customers do not include any major concentrations of credit risk and these
are comprised of retail exposures which are considered to be individually insignificant, with the
biggest value per customer arising from SME loans at a cap of EUR 350,000 or 0.01% of total
Group loans to customers for the years ended 31 December 2021 and 2020.
Credit concentration risk by geographic region
The Group has also assessed and analysed the credit concentration risk exposure by geographical
region based on the country of domicile of the respective customers or counter parties. The top
three credit exposure by country accounts for 22.5% 16.8%, and 9.0% (21.2%, 16.2% and 7.7% in
2020) of the Group’s loans to customers, cash and cash equivalents, and other financial assets at
amortised cost. The 22.6% credit concentration risk as at 31 December 2021 (21.2% in 2020) relates
to loans to customers, cash and cash equivalents, and other financial assets at amortised cost in
Finland.
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4.3 Market risk
The Group’s operations in different markets exposes it to variety of market risks, including foreign
exchange risk, interest rate risk, and fair value risk.
4.3.1 Foreign exchange risk
The Group operates in different markets, mainly within and selectively outside of the Euro zone,
and generates significant transactions and balances in various currencies. In addition, intercompa-
ny transactions, and loans between entities with different functional currencies are often carried
out within the Group due to the nature and wide geographic scope of its operations. As a result,
the Group is exposed to fluctuations in future cash flows arising from foreign currency denomi-
nated assets and liabilities, both with external and internal parties, primarily driven by changes in
foreign exchange rates between euro and other currencies.
Multitude manages foreign exchange risks through its treasury risk management policy that aims
to hedge and mitigate potential adverse impact of fluctuations in foreign exchange rates between
euro and other currencies. In order to hedge the foreign exchange risks arising from routine and
recurring transactions, the Group maintains the same functional and reporting currencies for each
group entities, depending on its market of operations.
In addition, the Group also enters into foreign exchange swaps and forward contracts in regard to
significant intercompany loans and balances that are not denominated in euros. Group treasury
policy further requires all group entities to fully manage and hedge all significant foreign currency
denominated transactions and balances against their own and, ultimately, the Group’s functional
currencies.
As at 31 December 2021 and 2020, the Group’s main foreign exchange exposure arises from inter-
company loans and other monetary assets and liabilities denominated in Polish zloty (‘PLN‘) and
Swedish crown (‘SEK’). Accordingly, the Group hedges the foreign exchange risks arising from the
net assets denominated in these currencies using PLN-to-EUR and SEK-to-EUR foreign exchange
forward contracts.
The table below shows the nominal value of the Group’s net asset exposures and the hedging cov-
erage from foreign exchange and forward contracts in relation to PLN and SEK as at 31 December:
The impact to the after-tax profit or loss if euro had weakened/strengthened by 10% against PLN
and SEK, with all other variables held constant, for the years ended 31 December are as follows:
2021 2020
EUR’000 PLN SEK PLN SEK
Currency up by 10% 1,132 962 238 1,180
Currency down by 10% (1,132) (962) (238) (1,180)
2021 2020
EUR ‘000 PLN SEK PLN SEK
Intercompany loan 18,020 30,460 14,481 22,924
Cash in bank 4,790 12,549 14,808 8,367
Portfolio 2,653 105,551 9,960 44,278
Net position 25,463 148,559 39,249 75,569
Hedging 14,143 138,943 41,634 63,773
Hedging coverage in % 56% 94% 106% 84%
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Multitude Group Annual Report 2021 – Consolidated Financial Statements (Audited)
4.3.2 Interest rate risk
The Group is exposed to interest rate risk either through market value fluctuations of items in the
consolidated statement of financial position (price risk) or through changes in interest income or
expenses. Interest rate risk mainly arises through interest-bearing liabilities and assets. Estimated
future changes in cash flows and the structure of the consolidated statement of financial position
EUR ‘000
Variable
interest rate
Fixed
interest rate
Non-interest
bearing Total
31 December 2021
Loans to customers 62,704 381,168 - 443,872
Cash and cash equivalents 134,589 125,964 41,039 301,592
Receivables from banks - 5,108 5,108
197,293 512,240 41,039 750,572
Deposits from customers 1,276 (477,969) (8,071) (484,764)
Short-term borrowings (84,371) - - (84,371)
Long-term borrowings (58,979) - - (58,979)
Lease liabilities - (1,764) - (1,764)
(142,074) (479,733) (8,071) (629,878)
Net exposure 55,219 32,507 32,968 120,694
31 December 2020
Loans to customers 62,704 298,251 - 360,955
Cash and cash equivalents 107,442 81,840 47,282 236,564
Receivables from banks - 5,095 5,095
170,146 385,186 47, 282 602,614
Deposits from customers (109,634) (227,107) (2,781) (339,522)
Long-term borrowings (180,000) - - (180,000)
Lease liabilities - (4,379) - (4,379)
(289,634) (231,486) (2,781) (523,901)
Net exposure (119,488) 153,700 44,501 78,713
The objective of interest rate risk management is to mitigate adverse impacts arising from interest
rate fluctuations on the consolidated statements of profit or loss, cash flows, and financial position,
while taking into consideration the Group’s target capital structure and the resulting net interest
rate exposure. The Group maintains a diverse portfolio of financial assets and liabilities that yield
interest income and expenses, respectively, based on fixed and variable interest rates. The Group’s
financial assets and liabilities with variable and a combination of fixed and variable interest rates
are based on Euribor, which is the basic rate of interest used in lending between banks and is
commonly used as a reference for setting the interest rate on loans within the European union
(‘EU’). In addition, the Group also enters into interest rate swaps to hedge cash flows fluctuations
relating to interest-bearing intercompany loans.
Interest rate profile of the Group's financial assets and liabilities as at 31 December are as follows:
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Multitude Group Annual Report 2021 – Consolidated Financial Statements (Audited)
The undiscounted repayment schedule for financial liabilities, including future interest payments,
as at 31 December are as follows:
EUR ‘000
Less than
12 months
Between
1-2 years
Between
2-5 years Total
31 December 2021
Deposits from customers 401,971 65,015 17,778 484,764
Borrowings:
Principal 84,731 58,979 - 143,350
Interests 5,014 995 - 6,009
Trade payables and other liabilities* 15,221 - - 15,221
Lease liabilities 1,467 181 116 1,764
Total 508,044 125,170 17, 894 651,108
31 December 2020
Deposits from customers 275,833 35,275 28,413 339,521
Borrowings:
Principal - 180,000 - 180,000
Interests 9,900 6,692 1,467 18,059
Trade payables and other liabilities* 20,478 - - 20,478
Lease liabilities 2,418 1,855 106 4,379
Total 308,629 223,822 29,987 562,438
*Trade payables and other liabilities exclude accrued interests on borrowings.
The Group analyses its interest rate exposures on a continuous basis. Various scenarios are simu-
lated taking into consideration refinancing, renewal of existing positions, alternative financing, and
hedging. Based on these scenarios, the Group calculates the impact on profit and loss of a defined
interest rate shift. For each simulation, the same interest rate shift is used for all currencies. The
scenarios are run only for liabil-ities that represent the major interest-bearing positions.
4.4 Liquidity risk
Liquidity risk is defined as financial distress or extraordinarily high financing costs arising from a
shortage of liquid funds in a situation where outstanding debt needs to be refinanced or where
business conditions unexpectedly deteriorate and require financing. Transactional liquidity risk is
defined as the risk of executing a financial transaction below fair market value or not being able
to execute the transaction at all within a specific period of time. The objective of liquidity risk
management is to maintain sufficient liquidity, and to ensure that it is readily available without
endangering its value in order to avoid uncertainty related to financial distress at all times.
Cash flow forecasting is performed at the market level in each operating entities and aggregated
centrally by Group treasury. The Group’s treasury function monitors rolling forecasts of the Group’s
liquidity requirements to ensure that it has sufficient cash to meet operational needs while main-
taining sufficient headroom for its borrowing facilities and other non-current liabilities to avoid
breaches in debt agreements. Such forecasting takes into consideration the Group’s debt financing
plans, debt covenants, internal balance sheet ratio targets, legal and regulatory requirements, and
currency restrictions. The Group invests surplus cash in interest-bearing current accounts, time
deposits, money market deposits, and marketable securities, which terms and maturities coincide
with the Group’s liquidity forecasts.
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4.5 Capital management
The Group’s objectives when managing capital are to safeguard the Group’s ability to continue as
a going concern in order to provide returns to shareholders and benefits for the Group’s stakehold-
ers and to maintain an optimal capital structure to reduce the cost of capital. In order to maintain
or adjust the capital structure, the Group may adjust the amount of dividends paid to shareholders,
issue new bonds, or sell assets to reduce debt.
The Group's funding structure and cost of capital is primarily comprised of deposits received from
customers and issued financial instruments such as the German bonds issued in 2018 and 2019,
presented as short-term and long-term borrowings, respectively, in the consolidated statement of
financial position. In order to generate additional capitaliztion, the Group has issued a perpetual
bond, accounted for as restricted reserves in equity, with a nominal value of EUR 50 million on 5
July 2021 (Note 1.1).
The nominal values, grouped by liquidity and interest characteristics, of the Group's costs of capi-
tal as compared to cash and cash equivalents ('net debt'), and the movements for the years ended
and as at 31 December are as follows:
EUR ’000 2021 2020
Cash and cash equivalents 301,592 236,564
Gross debt, due within 1 year (48 6,342) (275,833)
Gross debt, due after 1 year (141,772) (243,689)
Perpetual bonds with no maturity date (50,000) -
Net debt (376,522) (282,958)
Cash and cash equivalents 301,592 236,564
Gross debt - non-interest bearing (477,9 69) (227,107)
Gross debt - variable interest rates (192,074) (289,634)
Gross debt - fixed interest rates (8,071) (2,781)
Net debt (376,522) (282,958)
EUR ‘000 Cash
and cash
equivalents
Gross debt,
due within 1
year
Gross debt,
due after 1
year
Perpetual
bonds
Net debt
AS AT 1 JANUARY 2020
236,564 (278,252) (240,498) - (282,185)
Repayment of borrowings - 50,000 - - 50,000
Net increase in deposits - (33,672) (63,689) - (97,361)
Net increase in cash and cash equivalents 83,345 - - - 83,346
Foreign exchange adjustments (2,300) - - - (2,300)
AT 31 DECEMBER 2020
236,564 (275,833) (243,689) - (282,958)
Issuance of perpetual bonds - - - (50,000) (50,000)
Repayment of borrowings - 15,629 21,021 - 36,650
Net (increase) decrease in deposits - (226,138) 80,896 - (145,242)
Net increase in cash and cash equivalents 65,103 - - - 65,103
Foreign exchange adjustments (75) - - - (75)
AT 31 DECEMBER 2021
301,592 (486,342) (141,772) (50,000) (376,522)
161
Multitude Group Annual Report 2021 – Consolidated Financial Statements (Audited)
5. Group companies
Disposed group companies
During 2021, the Group has disposed of Auxilium Limited, Ferratum Services Limited, Ferratum
Denmark, Ferratum UK Ltd, and Ferratum Vakuutus Oy. Further details on the disposal of Ferratum
Denmark and Ferratum UK Ltd. are disclosed in Note 5. The impact of the disposal of Auxilium
Limited, Ferratum Services Limited, and Ferratum Vakuutus Oy to the Group consolidated financial
statements were not deemed significant at Group level.
The table below summarises the Group’s holdings in its subsidiaries as at the years ended 31
December:
Ownership in Group companies Country 2021 2020
Auxilium Limited Malta - 100%
Bhawana Capital Private Limited India 99% 99%
Bidellus Bangladesh Ltd Bangladesh 100% 100%
CapitalBox AB Sweden 100% 100%
CapitalBox GmbH Germany 100% 100%
Ferratum (Malta) Holding Limited Malta 100% 100%
Ferratum Australia Pty Ltd Australia 100% 100%
Ferratum Bank p.l.c. Malta 100% 100%
Ferratum Brazil Servicos De Correspondente
Bancario Ltda
Brazil 100% 100%
Ferratum Bulgaria EOOD Bulgaria 100% 100%
Ferratum Canada Inc Canada 100% 100%
Ferratum Capital Germany GmbH Germany 100% 100%
Ferratum Capital Oy Finland 100% 100%
Ferratum Czech s.r.o. Czech Republic 100% 100%
Ferratum Denmark ApS Denmark - 100%
Ferratum International Services Oy Finland 100% 100%
Ferratum Latvia SIA Latvia 100% 100%
Ferratum Mexico S. de R.L. de C.V. Mexico 100% 100%
Ferratum New Zealand Ltd. New Zealand 100% 100%
Ferratum Portfolio S.à r.l. Luxembourg 100% 100%
Ferratum Romania I.F.N.S.A. Romania 99.94% 99.94%
Ferratum Services Limited Malta - 100%
Ferratum UK Ltd Great Britain - 100%
Ferratum Vakuutus Oy Finland - 100%
fe Business Services OÜ Estonia 100% 100%
Guarantee Services OÜ Estonia 100% 100%
Global IT Services s.r.o. Slovakia 100% 100%
Inari Serviços Financeiros Ltda Brazil 100% 100%
Numeratum d.o.o. Croatia 100% 100%
Pactum Collections GmbH Germany 100% 100%
Pactum Poland Sp. z.o.o. Poland 100% 100%
Saldodipje SL Spain 100% 100%
Saldo Gestion SL Spain 100% -
Swespar AB Sweden 100% 100%
UAB “Ferratum Finance” Lithuania 100% 100%
162
Multitude Group Annual Report 2021 – Consolidated Financial Statements (Audited)
Net assets and loss on disposal of subsidiaries
Immediately prior to their disposals, the Group has determined the fair values and carrying amounts
of FGB and FDK’s assets and liabilities as follows:
In addition, immediately prior to their disposals, there were no components of non-controlling
interests or other comprehensive income attributable to FGB or FDK. Total consideration from the
disposals included cash receipts of EUR 100 and EUR 27 for FGB and FDK, respectively. Losses
from these disposals are calculated as follows:
EUR ’000
Ferratum UK
at 31 October 2021
Ferratum Denmark
at 31 December 2021
ASSETS
Right-of-use assets - 52
Loans to customers 1,058 -
Other current financial assets - 35
Current tax assets - 555
Prepaid expenses and other current assets 87 21
Cash and cash equivalents 927 461
Total assets 2,072 1,124
LIABILITIES
Lease liabilities - (53)
Trade payables (8) -
Accruals and other current liabilities (73) (863)
Total liabilities (81) (916)
Net assets 1,991 208
EUR Ferratum UK Ferratum Denmark
Consideration received 100 27
Carrying amount of net assets sold 1,990,540 208,361
Loss on disposal 1,990,440 208,324*
*Loss on disposal of FDK is presented in other income (expenses) in Note 11.
163
Multitude Group Annual Report 2021 – Consolidated Financial Statements (Audited)
6. Discontinued operations
On 31 October 2021, the Group disposed of its total shareholdings, representing 100% ownership
interest in Ferratum UK Ltd. (‘FGB'), which was accounted for as discontinued operations. Accord-
ingly, the Group has carved out the results of operations relating to FGB from its consolidated
statements of profit or loss and from the accompanying note disclosures at the financial statement
line-item level after the elimination of intra-group income and expenses.
Loss from discontinued operations
The after-tax loss from discontinued operations, including the loss arising from the disposal of FGB
for the years ended 31 December, as presented in the table below, is presented as a single line item
in the consolidated statements of profit or loss.
Net cash flows from discontinued operations
*The net cash flows (used in)/from investing activities include cash and cash equivalents transferred, net of
cash proceeds received, from the disposals of FGB amounting to EUR 0.9 million.
EUR ’000 2021 2020
Revenue (459) (907)
Operating expenses:
Impairment loss on loans to customers (538) (1,927)
Bank and lending costs (530) (2,386)
Personnel expense (403) (828)
Selling and marketing expense (1) (50)
General and administrative expense (457) 810
Operating loss (2,388) (5,288)
Loss on disposal of discontinued operations (1,991) -
Other income (expense), net 4 (249)
Loss before interests and taxes ('EBIT') (4,375) (5,537)
Finance income, net 668 1,103
Loss before income tax (3,707) (4,434)
Income tax expense (82) (77)
Loss from discontinued operations (3,789) (4,511)
The net cash flows from operating, investing, and financing activities relating to FGB for the years
ended 31 December are as follows:
EUR ’000 2021 2020
Net cash flows from (used in) operating activities 26 (16,251)
Net cash flows from investing activities* 8,755 19,515
Net cash flows from discontinued operations 8,781 3,264
164
Multitude Group Annual Report 2021 – Consolidated Financial Statements (Audited)
7. Segment information
During the second quarter 2021, the Group has rebranded its tribes, which also represented the
Group's operating and reportable segments. 'Near Prime', which includes Credit Limit, PlusLoan
and MicroLoan, is now called 'Ferratum', 'CapitalBox digital SME Lending' is simply called 'Capi-
talBox', and 'PrimeLoan' and 'Wallet' are combined into 'SweepBank'.
Accordingly, the Group has restated the comparative information presented within this note to
reflect the changes in the Group's structure. The results of operations from the Group's operating
and reportable segments for the years ended 31 December 2021 and 2020 are as follows:
EUR ’000 Ferratum
Sweep-
Bank
Capital-
Box
Central Total
Revenue
182,655 8,982 22,034 - 213,671
Share in revenue, in % 85.5% 4.2% 10.3% - 100%
Operating expenses:
Impairment loss on loans to customers
(60,206) (6,220) (5,523) - (71,949)
% of revenue
-33.0% -69.2% -25.1% - -33.7%
Bank and lending costs
(12,337) (991) (1,010) - (14,338)
Personnel expense
(18,584) (8,771) (5,656) - (33,010)
Selling and marketing expense
(17,971) (4,570) (3,994) - (26,535)
General and administrative expense
(17,469) (7,691) (3,736) - (28,896)
Depreciation and amortisation
(13,676) (1,365) (282) - (15,323)
Operating profit (loss)
42,412 (20,625) 1,833 - 23,620
Other income (expense), net
179 54 48 - 281
Profit (loss) before interests and taxes (‘EBIT’)
42,591 (20,572) 1,881 - 23,901
EBIT margin, in %
23.3% -229.0% 8.5% - 11.2%
Allocated finance costs, net
(11,623) (3,351) (2,914) - (17,888)
Unallocated foreign exchange losses, net
- - - (2,428) (2,428)
Profit before income taxes
30,968 (23,923) (1,033) (2,428) 3,585
Profit before tax margin, in %
17.0% -266.3% -4.7% - 1.7%
Loans to customers 282,641 85,794 74,438 - 443,872
Unallocated assets - - - - 375,156
Unallocated liabilities - - - - 649,539
Operating and reportable segments for the year ended 31 December 2021:
165
Multitude Group Annual Report 2021 – Consolidated Financial Statements (Audited)
EUR ’000 Ferratum
Sweep-
Bank
Capital-
Box
Central Total
Revenue 200,512 3,644 26,315 - 230,472
Share in revenue, in % 87.0% 1.6% 11.4% - 100%
Operating expenses:
Impairment loss on loans to customers (80,782) (3,037) (7,147) - (90,967)
% of revenue -40.3% -83.3% -27.2% - -39.5%
Bank and lending costs (11,767) (156) (1,436) - (13,358)
Personnel expense (23,022) (5,682) (4,415) - (33,120)
Selling and marketing expense (18,186) (1,087) (3,471) - (22,744)
General and administrative expense (17, 596) (8,289) (2,982) - (28,868)
Depreciation and amortisation (8,081) (4,026) (1,247) - (13,354)
Operating profit (loss) 41,078 (18,633) 5,617 - 28,061
Other income (expense), net 400 18 35 453
Profit (loss) before interests and taxes
(‘EBIT’)
41,478 (18,615) 5,652 - 28,514
EBIT margin, in % 20.7% -510.8% 21.5% - 12.4%
Allocated finance costs, net (13,630) (1,466) (2,955) - (18,051)
Unallocated foreign exchange losses, net - - - (4, 253) (4,253)
Profit before income taxes 27,8 48 (20,081) 2,697 (4, 253) 6,210
Profit before tax margin, in % 13.9% -551.1% 10.3% - 2.7%
Loans to customers 264,440 33,572 62,943 - 360,955
Unallocated assets - - - - 314,126
Unallocated liabilities - - - - 549,512
Operating and reportable segments for the year ended 31 December 2020:
166
Multitude Group Annual Report 2021 – Consolidated Financial Statements (Audited)
EUR ’000 Note 2021 2020
Wages and salaries 26,776 27,424
Social security costs 3,089 2,853
Post-employment benefit expense 1,572 1,669
Share-based payment expense 21 156 349
Other personnel expense 1,417 825
Total personnel expenses 33,010 33,120
9. Personnel expenses
EUR ’000 2021 2020
Northern Europe* Finland, Sweden, Denmark, Norway 94,804 104,269
Western Europe Germany, Netherlands, Spain 34,042 36,762
Eastern Europe** Bulgaria, Croatia, Czechia, Estonia, Latvia,
Lithuania, Poland, Romania
76,567 79,807
Other Australia, Brazil, Mexico, New Zealand 8,258 9,634
Total revenue 213,671 230,472
*Revenues in Northern Europe include revenue from Finland amounting to EUR 31.3 million and EUR 41.7 million in 2021
and 2020, respectively.
** There are no more active business or portfolio in Ukraine and Russian Federation.
8. Revenue
Revenue by nature
EUR ’000 2021 2020
Interest revenue 210,339 226,281
Loan servicing fees 3,332 4,191
Total revenue 213,671 230,472
Interest revenue are calculated using the effective interest rate method based on loans to cus-
tomers after considering fees directly attributable to the origination of the loans, whereas loan
servicing fees include charges to customers that are not directly attributable to loan origination
and are recognised at the point in time when the Group satisfies the underlying performance
obligations, normally when such fees are due from the customer upon invoicing.
Revenue by geographic market
The Group further analyses by geographic market that represents how economic factors impact
the nature, amount, timing, uncertainty, and cash flows of the above revenue streams. Revenue
recognized per geographic market, including the composition of each geographic market, for the
years ended 31 December 2021 and 2020 are as follows:
167
Multitude Group Annual Report 2021 – Consolidated Financial Statements (Audited)
EUR ’000 Notes 2021 2020
Impairment loss on loans to customers 4.2.3 71,949 90,967
Bank and lending costs:
Invoicing and collection costs 6,288 6,157
Scoring costs 3,877 2,853
Loan handling costs 3,600 3,778
Other bank and lending costs 574 568
Total bank and lending costs 14,339 13,356
Selling and marketing expenses:
Marketing expenses 12,597 11,943
Commissions 12,047 9,476
Other selling and marketing expense 1,892 1,324
Total selling and marketing expense 26,536 22,743
Personnel expenses 9 33,010 33,120
Depreciation and amortization:
Amortization expense 16 12,380 10,175
Depreciation expense 14, 15 2,944 3,179
Total depreciation and amortization 15,324 13,354
General and administrative expense
Professional fees 13,032 12,295
Other tax expense 6,379 6,050
Repairs and maintenance costs 6,042 6,167
Administrative expense 1,176 1,192
Fees and charges 652 805
Other operating expense 1,612 2,362
Total general and administrative expense 28,893 28,871
Total operating expenses 190,051 202,411
10. Operating expenses by nature
EUR ’000 2021 2020
PWC:
Audit fees 1,011 577
Non-audit fees:
Audit-related services 134 652
Tax advice 48 24
Other non-audit services 67 -
OTHER AUDIT COMPANIES:
Audit fees 128 132
Non-audit fees:
Tax advice 24 25
Other services - 6
Total audit fees 1,139 709
Total non-audit fees 273 707
Total fees from audit companies 1,412 1,416
Audit and non-audit fees from audit companies
168
Multitude Group Annual Report 2021 – Consolidated Financial Statements (Audited)
Only non-audit fees paid by Multitude Group companies to audit companies performing the local
statutory audits of said Multitude Group companies are included in the above disclosure.
PricewaterhouseCoopers Oy has provided non-audit services to entities of Multitude Group in
total 13 thousand euros during the financial year 2021. These services included auditors’ statements
(4 thousand euros), tax services (0 thousand euros) and other services (9 thousand euros).
11. Other income and expenses
12. Finance income and costs
*Gain from revaluation of contingent liabilities and impairment losses in 2021 both relate to the subsequent
valuation of Spotcap.
EUR ’000 Notes 2021 2020
OTHER INCOME:
Gain from revaluation of contingent liabilities* 1.1 1,417 -
Other income 886 485
Total other income 2,280 485
OTHER EXPENSES:
Impairment losses* 1.1 (1,387) -
Loss from disposal of non-current assets (404) (32)
Loss from sale of FDK 5 (208) -
Total other expenses (1,999) (32)
Net other income 281 453
*Other finance costs in 2021 include loss on repurchase of the 2018 and 2019 bonds amounting to
EUR 1.2 million.
EUR ’000 Note 2021 2020
FINANCE INCOME
Net realised foreign exchange gain 2,526 -
Interest income 1,077 521
Total finance income 3,603 521
FINANCE COSTS
Interest expense on borrowings 16,582 17,144
Net unrealised foreign exchange loss 5,194 3,857
Interest expense on lease liabilities 194 323
Net unrealised foreign exchange loss on derivatives 78 -
Net realised foreign exchange loss - 493
Other finance costs* 1.1 1,871 1,008
Total finance costs 23,919 22,825
Net finance costs 20,316 22,304
169
Multitude Group Annual Report 2021 – Consolidated Financial Statements (Audited)
13. Income tax expenses
EUR ’000 2021 2020
CURRENT TAX:
Current tax on profits for the year (921) (3,186)
Adjustments in respect of prior years (216) 650
Other direct taxes (668) (415)
Total current tax (1,805) (2,951)
DEFERRED TAX:
Origination and reversal of temporary differences (554) 1,737
Total deferred tax (554) 1,737
Total income tax expense (2,359) (1,214)
The tax on the Group’s profit before tax differs from the theoretical amount that would arise using
the weighted average tax rate applicable to profits of the consolidated entities as follows:
EUR ’000 2021 2020
Profit before tax 3,585 6,210
Tax calculated at Finnish tax rate (717) (2,206)
Tax effects of:
Difference between Finnish tax rate and rates in other countries 2,774 6,192
Income not subject to tax 2,321 4,308
Expenses not deductible for tax purposes (4,034) (7,652)
Utilization of previously unrecognized tax losses - 899
Tax losses for which no deferred income tax asset was recognized (951) (2,105)
Write down of previously recognised tax losses (875) (886)
Adjustment in respect of prior years (216) 650
Other direct taxes (660) (415)
Total income tax expense (2,358) (1,215)
EUR ’000 2021 2020
Losses on carried forward balance as at 31 December 41,136 29,913
of which
Expires in one year 2,116 1,758
Expires in two years’ time - 2,116
Expires in later than two years 39,020 26,039
As at 31 December 2021, the Group has EUR 11.0 million (2020 - EUR 15.6 million) losses carried
forward, with an average maturity of 5 years and for which no deferred tax assets have been
recognised.
170
Multitude Group Annual Report 2021 – Consolidated Financial Statements (Audited)
Deferred tax assets and liabilities
Changes in and balances of deferred tax assets and liabilities for the years ended and as at 31
December:
EUR ’000 As at
1 Jan 2020
Recognized
in profit or
loss
Translation
difference
As at
31 Dec 2020
DEFERRED TAX ASSETS:
Tax losses carried forward 4,606 854 (281) 5,157
Deferred revenue and credit loss reserve 2,278 416 (2) 2,714
Derivative 26 26
Total deferred tax assets 6,910 1,270 (283) 7,897
DEFERRED TAX LIABILITIES:
Discretionary provisions (672) 390 (18) (301)
Total deferred tax liabilities (672) 390 (18) (301)
EUR ’000 As at
1 Jan 2021
Recognized
in profit or loss
Translation
difference
As at
31 Dec 2021
DEFERRED TAX ASSETS:
Tax losses carried forward 5,157 1,234 101 6,492
Deferred revenue and credit loss
reserve
2,714 (2,226) - 488
Derivative 26 (26) - -
Total deferred tax assets 7, 897 (1,017) 101 6,980
DEFERRED TAX LIABILITIES:
Discretionary provisions (301) 92 6 (203)
Total deferred tax liabilities (301) 92 6 (203)
171
Multitude Group Annual Report 2021 – Consolidated Financial Statements (Audited)
14. Property, plant and equipment
EUR ’000 Office building Furnitures,
fittings, and
equipment
Total
ACQUISITION COSTS
As at 1 January 2020 2,563 3,634 6,197
For the year ended 31 December 2020:
Additions - 1,805 1,805
Disposals - (1,033) (1,033)
Reclassifications and adjustments - 2 2
Acquisition costs, as at 31 December 2020 2,563 4,409 6,972
ACCUMULATED DEPRECIATION
As at 1 January 2020 (446) (1,855) (2,301)
For the year ended 31 December 2020:
Depreciation (Note 10) (151) (707) (858)
Disposals - 95 95
Accumulated depreciation, as at 31 December
2020
(597) (2,468) (3,065)
Net carrying amount, as at 1 January 2020 2,117 1,778 3,895
Net carrying amount, as at 31 December 2020 1,966 1,941 3,907
ACQUISITION COSTS
As at 1 January 2021 2,563 4,409 6,972
For the year ended 31 December 2021:
Additions 67 381 448
Disposals - (234) (234)
Reclassifications and adjustments (107) - (107)
Acquisition costs, as at 31 December 2021 2,523 4,556 7,079
ACCUMULATED DEPRECIATION
As at 1 January 2021 (597) (2,468) (3,065)
For the year ended 31 December 2021
Depreciation (Note 10) (128) (725) (853)
Disposals - 136 136
Reclassifications and adjustments 107 - 107
Cumulative depreciation, as at 31 December 2021 (618) (3,057) (3,675)
Net carrying amount, as at 1 January 2021 1,966 1,941 3,907
Net carrying amount, as at 31 December 2021 1,905 1,499 3,404
172
Multitude Group Annual Report 2021 – Consolidated Financial Statements (Audited)
15. Leases
Right-of-use assets, for the years ended and as at 31 December
EUR ’000 Office
buildings
Office
equipment
Total
ACQUISITION COSTS
As at 1 January 2020 8,296 764 9.060
For the year ended 31 December 2020:
Additions 238 - 238
Disposals (588) - (588)
Acquisition costs, as at 31 December 2020 7,946 764 8,710
ACCUMULATED DEPRECIATION
As at 1 January 2020
(2,166) (201) (2,367)
For the year ended 31 December 2020:
Disposals 215 - 215
Depreciation (Note 10) (2,151) (201) (2,352)
Cumulative depreciation, as at 31 December 2021 (4,102) (402) (4,504)
Net carrying amount, as at 1 January 2020 6,130 563 6,693
Net carrying amount, as at 31 December 2020 3,845 362 4,207
ACQUISITION COSTS
Cost, at 1 January 2021 7,946 764 8,710
For the year ended 31 December 2021:
Additions 218 - 218
Disposals (727) - (727)
Reclassifications and adjustments (757) (7) (764)
Acquisition costs, as at 31 December 2021 6,680 757 7,437
ACCUMULATED DEPRECIATION
Cumulative depreciation, as at 1 January 2021 (4,102) (402) (4,504)
For the year ended 31 December 2021:
Disposals 727 - 727
Depreciation (Note 10) (1,849) (194) (2,043)
Cumulative depreciation, as at 31 December 2021 (5,233) (596) (5,819)
Net carrying amount, as at 1 January 2021 3,845 362 4,207
Net carrying amount, as at 31 December 2021 1,457 161 1,618
173
Multitude Group Annual Report 2021 – Consolidated Financial Statements (Audited)
Lease liabilities, as at 31 December
EUR'000 2021 2020
Current 1,412 2,418
Non-current 282 1,961
Total 1,694 4,379
The above lease liabilities are presented in the consolidated statement of financial position. The
maturity analysis of these lease liabilities is disclosed in Note 4.4
Rent expense on operating leases and depreciation of ROU assets are presented under other
operating expense and depreciation and amortization expenses, respectively, in operating expens-
es (Note 10). Interest expense on lease liabilities is presented under finance costs under finance
income and expense (Note 12).
Amounts recognised in the consolidated statement of profit or loss for the years ended
31 December:
Amounts presented in the in the consolidated statement of cash flows for the years
ended 31 December:
EUR'000 2021 2020
Total cash outflow for leases (2,297) (2,299)
EUR'000 Notes 2021 2020
Expenses relating to short-term leases 10 (43) (98)
Depreciation on ROU assets 10 2,043 2,352
Interest expense on lease liabilities 12 194 323
174
Multitude Group Annual Report 2021 – Consolidated Financial Statements (Audited)
16. Intangible assets
EUR ‘000 Internally
generated
software
Computer
Software
Other in-
tangible
assets
Total
ACQUISITION AND DEVELOPMENT COSTS
As at 1 January 2020 27,239 24,561 1,108 52,907
For the year ended 31 December 2020:
Additions 8,134 3,817 2,000 13,950
Disposals (216) 36 - (180)
Reclassifications and adjustments - (2) - (2)
Acquisition and development costs, as at 31
December 2020
35,156 28,412 3,108 66,676
ACCUMULATED AMORTISATION
Cumulative amortisation, as at 1 January 2020 (8,190) (8,330) (1,107) ( 17,627)
For the year ended 31 December 2020
Amortisation (Note 10) (6,081) (4,045) (20) (10,145)
Cumulative amortisation as at 31 December 2020 (14,271) (12,374) (1,127) (27,772)
Net carrying amount, as at 1 January 2020 19,049 16,232 - 35,281
Net carrying amount, as at 31 December 2020 20,886 16,037 1,981 38,904
ACQUISITION AND DEVELOPMENT COSTS
As at 1 January 2021 35,156 28,412 3,108 66,676
For the year ended 31 December 2021:
Additions 8,970 1,956 77 11,003
Disposals - (292) - (292)
Reclassifications and adjustments - - (220) (220)
Acquisition and development costs, as at 31
December 2021
44,127 30,075 2,965 77,167
ACCUMULATED AMORTISATION AND IMPAIRMENT
As at 1 January 2021 (14,271) (12,374) (1,127) (27,772)
For the year ended 31 December 2021:
Reclassifications - 195 22 217
Amortisation (Note 10) (8,483) (3,776) (117) (12,376)
Impairments (Note 1.1, 11) - - (1,386) (1,386)
Accumulated amortisation and impairment, as at 31
December 2021
(22,754) (15,955) (2,608) (41,317)
Net carrying amount, as at 1 January 2021 20,886 16,037 1,981 38,904
Net carrying amount, as at 31 December 2021 21,373 14,120 357 35,850
Other intangible assets as at 31 December 2020 include goodwill and partner networks relating to
Spotcap acquisition, amounting to EUR 0.8 million and EUR 1.2 million, respectively. During 2021,
carrying amounts have been written down to their recoverable value, which resulted to impairment
losses of EUR 0.8 million and EUR 0.6 million, respectively. Remaining carrying amounts of good-
will and amortisation, after such impairments and amortisation during the year, amounted to EUR
0 (nil) and EUR 0.5 million, respectively, as at 31 December 2021.
175
Multitude Group Annual Report 2021 – Consolidated Financial Statements (Audited)
17. Financial assets
The table below summarises the Group’s financial assets presented based on their classification
based on their subsequent measurement, at amortised cost or FVPL; and based on their fair value
measurement hierarchy, level 1, 2 or 3; as at 31 December:
EUR ’000
Fair value
measure-
ment
2021 2020
Carrying
amount
Fair value
Carrying
amount
Fair value
FINANCIAL ASSETS AT FVPL
Derivative financial assets Level 2 324 324 496 496
FINANCIAL ASSETS AT AMORTIZED COST
Loans to customers Level 3 443,872 443,872 360,955 360,955
Cash and cash equivalents Level 3 301,592 301,592 236,564 236,564
Other non-current receivables Level 3 6,215 6,215 5,028 5,028
Receivables from banks Level 3 5,108 5,108 5,095 5,095
Receivables from sold portfolios Level 2 4,657 4,657 3,848 3,848
Other current financial assets Level 3 3,579 3,579 3,405 3,405
Total 765,347 765,347 615,391 615,391
The fair value of derivative financial assets are determined using level 2 fair value measurement
and is calculated as the present value of the estimated future cash flows based on observable yield
curves.
The fair values of the remaining financial assets measured at amortised cost are determined using
level 3 fair value measurement based significantly on unobservable inputs. The Group estimates
that the carrying amounts of these financial assets reasonably approximate their fair values as at
31 December 2021 and 2020.
18. Other non-financial assets
EUR ’000 2021 2020
Prepaid expenses 3,381 2,692
VAT receivables 207 384
Other current assets 40 132
Total 3,628 3,208
176
Multitude Group Annual Report 2021 – Consolidated Financial Statements (Audited)
Long-term borrowings pertain to the 2019 bonds issued on 24 April 2019 under Ferratum Capital
Germany GmbH (ISIN - SE0012453835) with a coupon rate of 5.5% plus a floating rate of 3-month
Euribor, and maturity date of 24 April 2023. The bonds have outstanding nominal value of EUR
59.0 million as at 31 December 2021 (2020 - EUR 80.0 million).
The fair value of short-term and long-term borrowings are determined using level 1 fair value
measurement based on the published quotes in the Frankfurt Stock Exchange Open Market and
Frankfurt Exchange Prime Standard.
The fair values of the remaining financial liabilities measured at amortised cost are determined
using level 3 fair value measurement based significantly on unobservable inputs. The Group es-
timates that the carrying amounts of these financial liabilities reasonably approximate their fair
values as at 31 December 2021 and 2020.
2021 2020
EUR ’000
Fair value
hierarchy
Carrying
amount
Fair value
Carrying
amount
Fair value
FINANCIAL LIABILITIES AT FVPL
Derivative financial liabilities Level 2 1,232 1,232 3,230 3,230
FINANCIAL LIABILITIES AT
AMORTISED COST
Deposits from customers Level 3 484,764 484,764 339,522 339,522
Short-term borrowings Level 1 84,158 83,949 - -
Long-term borrowings Level 1 57,656 59,038 174,849 164,332
Lease liabilities Level 3 1,694 1,694 4,379 4,379
Trade payables Level 3 1,426 1,426 9,932 9,932
Accruals and other current liabilities Level 3 15,159 15,159 11,898 11,898
Other non-current liabilities Level 3 - - 2,160 2,160
Total 646,089 6 47, 262 545,972 535,453
The fair value of derivative financial liabilities are determined using level 2 fair value measurement
and is calculated as the present value of the estimated future cash flows based on observable yield
curves. Short-term borrowings pertain to the 2018 bonds issued on 25 May 2018 under Ferratum
Capital Germany GmbH (ISIN - AS5772809 / SE0011167972) with a coupon rate of 5.5% plus a
floating rate of 3-month Euribor, and maturity date of 25 May 2022. The bonds have a total out-
standing nominal value of EUR 84.4 million as at 31 December 2021 (2020 - EUR 100.0 million).
19. Financial liabilities
The table below summarises the Group’s fincial liabilities presented based on their classification
based on their subsequent measurement, at amortised cost or FVPL; and based on their fair value
measurement hierarchy, level 1, 2 or 3; as at 31 December:
177
Multitude Group Annual Report 2021 – Consolidated Financial Statements (Audited)
Interest payables as at 31 December 2021 and 2020 includes accrued interests on 2018 and 2019
bonds amounting to EUR 1.4 million.
20. Accruals and other liabilities
21. Share-based payments
Share option plans - 2016, 2017, and 2018
At the beginning of 2020, the Group administered three share option plans – the share option plans
for 2016, 2017, and 2018. The plans represent the Group’s commitment to deliver share options to
eligible participants, subject to a four-year average increase of 25% in EBITDA in the Group’s au-
dited consolidated financial statements, representing the vesting condition for the share options.
Upon exercise, each share option may be converted into one ordinary share at a subscription price
of EUR 11.90 for share options issued in 2016, and 2017, and EUR 13.50 for share options issued in
2018.
During Q2 2020, the Group cancelled all of its outstanding employee option plans and repur-
chased all outstanding options. Amounts recognized in the consolidated statement of profit or
loss amounted to EUR 246 thousand for the year ended 31 December 2020.
Share-based sales bonus 2020
In 2020, the Group introduced a sales bonus scheme wherein bonus earned by eligible partic-
ipants, upon meeting defined key metrics, are settled and invested in Multitude SE's shares of
stocks. The share-based expense recognized in the consolidated statement of profit or loss in rela-
tion to this share-based sales bonus for the year ended 31 December 2020 amounted to EUR 100
thousand. However, in Q1 2021, the Group has decided to cancel the share-based sales bonus plan
to give way to the new matching share plan and performance share plans introduced in 2021. As
a result, a reversal of share-based expense was recognized in the consolidated statement of profit
or loss amounting for EUR 100 thousand for the year ended 31 December 2021.
Performance share plan 2021
During 2021, the Group introduced a new performance share plan (‘PSP’) wherein key personnel
are awarded a number of Multitude shares based defined vesting conditions at the end of the
performance period.
The PSP issued on 1 June 2021 has a maximum reward share of 1,159,185, of which, 10% to 100%,
will be awarded to eligible participants if Multitude’s market share price will reach EUR 12 to EUR
30, respectively, and provided that participants will have uninterrupted employment in Multitude
at the end of the performance period, 31 December 2023.
EUR ’000 2021 2020
Interest payable 3,008 3,025
Accrued personnel expenses 2,551 2,558
Other accrued expenses 9,600 6,315
Total 15,159 11,898
178
Multitude Group Annual Report 2021 – Consolidated Financial Statements (Audited)
Difference between the number of reward shares outstanding at grant date and at reporting date,
prior to the end of the performance period, pertains to reward shares attributable to participants
who have ceased employment at Multitude and therefore are no longer eligible to receive reward
shares.
Matching share plan 2021
During 2021, the Group introduced a matching share plan (‘MSP’) that allows all employees to
invest up to a total of 10% of their annual gross salary in Multitude shares. Investment shares will
vest after 2 years provided that the participants have held the shares and have uninterrupted
employment during the holding period. After which, the Group will provide free matching shares
with a 1:1 ratio for all vested investment shares.
The Group determines the total fair value of outstanding MSP investment shares by reference
to Multitude’s share price at grant date (Level 1), assessed forfeiture rate, and applicable social
security costs. The table below summarises the outstanding MSP investment shares and related
expenses as at and for the year ended 31 December:
Performance
period
Grant date 2021
Reward
shares
Dividend
adj. share
price
Realized
volatility
Risk-
free
volatility
Total FV
in EUR
Reward
shares
Total FV
in EUR
Ex-
pense
in EUR
1 Jun 21 -
31 Dec 23
1,159,175 4.11 62.1% (0.4%) 743,285 1,064,925 682,850 154,192
Holding period
Grant date 2021
Investment
shares
Share price
in Eur
Investment
shares
Forfeiture
rate
Total FV
in EUR
Expenses
In EUR
31 Mar 21- 14 Mar 23 39,746 6.05 38,165 8% 226,446 85,155
30 Sep 21 - 30 Sep 23 27,784 4.94 27,585 9% 134,905 17,050
Total 67,530 65,750 361,351 102,205
Differences between the number of investment shares outstanding at grant date and at reporting
date, prior to the end of the holding period, pertain to either those investment shares withdrawn
from the plan or those that are attributable to participants who have seized employment in Multi-
tude, and therefore are no longer eligible to receive matching shares.
The Group determines the total fair value of outstanding PSP reward shares by reference to their
fair value at grant date, calculated by determining the present value of average payoffs at the end
of the performance period based on a range of potential outcomes in regard to Multitude’s market
share price (Level 2). The table below summarizes the outstanding PSP reward shares and related
expenses as at and for year ended 31 December:
179
Multitude Group Annual Report 2021 – Consolidated Financial Statements (Audited)
22. Related party transactions
The Group’s related parties include members of the board of directors and senior management
team, including their close family members, the companies in which the member of the board or
senior management team and their close family members has significant control or joint control.
The Group is controlled by Jorma Jokela who owns 55.20% of Multitude SE's issued and out-
standing shares as at 31 December 2021 (2020 - 55.18%). As a main principle, all transactions with
related parties are conducted at arm’s-length and are considered to be part of the ordinary course
of business. Transactions with related parties for the years ended 31 December 2021 and 2020 are
as follows:
EUR ’000 2021 2020
Purchase of consultancy fees and other services 656 831
Rent and utilities 125 132
Total 781 963
Outstanding balances arising from the above transactions with related parties as at the years
ended 31 December are as follows:
EUR ’000 2021 2020
Trade payables to related parties 49 72
Post-employment funds also meet the definition of related parties under IAS 24. The Group com-
panies have various post-employment plans in accordance with local conditions and practices in
the countries in which they operate. Total contributions made to these post-employment funds
are recognised as expense in the period they are incurred. Total post-employment benefit expense
180
Multitude Group Annual Report 2021 – Consolidated Financial Statements (Audited)
23. Subsequent events
Fitch rating affirmation
On February 2022, Fitch Ratings affirmed Multitude SE’s Long-Term Issuer Default Rating (‘IDR’)
and the long-term rating of the senior unsecured callable floating rate bonds, issued by Ferratum
Capital Germany GmbH (ISIN: SE0012453835 and ISIN: SE0011167972), at ‘B+’ with a ‘Stable Out-
look’.
EUR ’000 2021 2020
COMPENSATION FOR MEMEMBERS OF THE BOARD OF DIRECTORS AND CEO:
Jorma Jokela, CEO
Salaries and other short-term employee benefits 222 202
Frederik Strange, Chairman
Salaries and other short-term employee benefits 48 29
Lea Liigus, Member
Salaries and other short-term employee benefits 60 -
Share-based payments - 180
Clemens Krause, Member
Salaries and other short-term employee benefits* 48 186
Juhani Vanhala, Member
Salaries and other short-term employee benefits 48 39
Michael Cusumano, Member
Salaries and other short-term employee benefits 48 36
Goutam Challagalla, Member
Salaries and other short-term employee benefits 48 36
Christopher Wang, Member (until 20 April 2021)
Salaries and other short-term employee benefits 20 36
Kati Hagros, Member (until 30 June 2020)
Salaries and other short-term employee benefits - 12
Total 542 577
COMPENSATION OF KEY MANAGEMENT PERSONNEL
Salaries and other short-term employee benefits 3,009 2,861
Share-based payments 154 -
Total 3,163 2,861
The retirement age of CEO is 65 years and he has no pension plan.
Key management compensation
181
Multitude Group Annual Report 2021 – Consolidated Financial Statements (Audited)
EUR ’000 Notes 2021 2020
Other operating income 4 13,379 37,235
Material and services - -
Wages and salaries (3,697) (4,402)
Pension expenses (571) (581)
Other social expenses (101) (128)
Total personnel expenses (4,369) (5,111)
Depreciation, amortisation and impairment 5 (2,566) (31,409)
Other operating expenses 6, 7 (30,860) (19,531)
Operating loss (24,416) (18,816)
Financial income
Intra-group dividend income 20,485 8,713
Other interest and financial income Group companies 5,941 6,595
Other interest and financial income from others 292 213
Total finance income 26,717 15,522
Financial expenses
Other interest and financial expenses, Group companies (11,4 4 0) (12,450)
Other interest and financial expenses, others (3,548) (1,856)
Total financial expenses (14,988) (14,306)
Net financial income 11,729 1,216
Loss before appropriations and taxes (12,687) (17,600)
Group Contribution 8,340 12,635
Income tax - (29)
Loss for the year (4,347) (4,994)
Multitude SE standalone financial statements 2021
Statement of profit or loss
182
Multitude SE Annual Report 2021 – Standalone Financial Statements (Audited)
Statement of financial position
EUR ’000 Notes 31 Dec 2021 31 Dec 2020
ASSETS
Non-current assets
Intangible assets 8 6,585 9,964
Tangible assets 9 1,367 1,363
Investments 10 165,462 121,786
Non-current receivables 11 51,540 96,218
Total non-current assets 224,955 229,331
Current assets
Current receivables 12 28,749 40,852
Cash and bank 42,528 18,694
Total current assets 71,277 59,546
Total assets 296,232 288,877
EQUITY AND LIABILITIES
Equity
Share capital 13 40,134 40,134
Treasury shares (142) (142)
Other reserves total 14,708 14,708
Retained earnings 49,783 54,778
Profit/loss for the period (4,347) (4,994)
Total equity 100,136 104,483
Liabilities
Non-current liabilities, interest-bearing 14 190,416 162,815
Current liabilities, interest-free 15, 16 5,680 21,579
Total liabilities 196,097 184,394
Total equity and liabilities 296,232 288,877
183
Multitude SE Annual Report 2021 – Standalone Financial Statements (Audited)
Statement of cash flows
EUR ’000 31 Dec 2021 31 Dec 2020
CASH FLOWS FROM OPERATING ACTIVITIES
Loss for the year (4,347) (4,994)
Adjustments for:
Depreciation, amortization & impairment loss 3,542 3,443
Financial income and expenses (11,949) (1,216)
Other adjustments (34,350) (4,040)
Operating profit before working capital changes (47,104) (6,808)
Working capital changes:
Increase (-) /decrease(+) in trade and other receivables 5,258 (4,645)
Increase (+) / decrease (-) in trade payables (1,485) (1,485)
Cash generated from operations (42,708) (12,938)
Interest paid (29,032) (7,608)
Dividends received 20,485 15,180
Interest received 8,806 784
Other financing items (1,160) (1,788)
Income taxes paid (509) 666
Net cash from operating activities (44,118) (5,703)
CASH FLOWS FROM INVESTING ACTIVITIES
Purchase of tangible and intangible assets (168) (680)
Acquisition of subsidiaries (20,650) (3,043)
Disposal of subsidiaries - 923
Loans granted (-) / Repayments of loans (+) 49,803 (27,613)
Net cash used in investing activities 28,985 (30,414)
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from borrowings (+) / Repayment (-) 27,601 22,662
Dividends paid - -
Group contribution received (+) / paid (-) 11, 365 31,750
Net cash used in financing activities 38,966 54,412
Net increase/decrease in cash and cash equivalents 23,833 18,295
Cash and cash equivalents at the beginning of the period 18,694 399
Net increase/decrease in cash and cash equivalents 23,833 18,295
Cash and cash equivalents at the end of the period 42,528 18,694
184
Multitude SE Annual Report 2021 – Standalone Financial Statements (Audited)
1. Basis of preparation of the parent company
Parent company information
statements can be obtained from Multitude SE, located in Ratamestarinkatu 11 A, 00520 Helsinki.
Share capital
The share capital of the company is EUR 40,133,560 and the number of shares are 21,723,960. The shares have no
nominal value. All the shares are attached with equal voting rights and equal right when distributing dividend.
Accounting principles and methods
Multitude SE financial statements have been prepared in accordance with the Finnish Accounting Standards, FAS.
Valuation methods
Tangible assets have been valued at acquisition cost.
Receivables, financial assets and liabilities
Receivables are stated at face value, but no more than probable value. Securities and other financial assets included in
financial assets are carried at cost or, if lower, at their probable value at the balance sheet date. Liabilties are stated at
nominal value or, if the debt is linked to an index or other benchmark, at a higher nominal amount than the changed
benchmark.
Allocation principles and methods
The acquisition cost of tangible assets are depreciated according to plan. The difference between the acquisition cost
and residual value of the asset is booked as depreciation over the economic period of the asset.
Depreciation periods
• Renovation in own premises - 10 years
• Intangible assets - 3 to 10 years
• Tangible assets - 25% declining depreciation
Receivabled and liabilities denominated in foreign currency
Foreign currency transactions are recorded at the exchange rate on the transaction date. Other assets and liabilities
denominated in foreign currencies outstanding at the end of the financial year have been translated into Finnish cur-
rency at the exchange prevailing in the balance sheet date and exchange differencies have been recognized through
profit or loss.
Deferred tax assets and liabilities
Deferred tax assets and liabilties are disclosed in the notes to the income statement in connection with income taxes.
Comparative data
The company’s financial year is the calendar year. The comparative figures used are the previous year’s financial state-
ments.
185
Multitude SE Annual Report 2021 – Standalone Financial Statements (Audited)
2. Average personnel 2021 2020
During financial year 50 55
3. Management compensation, EUR ’000 2021 2020
Board of directors and CEO (480) (394)
4. Other operating income, EUR ’000 2021 2020
Sales to Group companies 13,379 13,291
Extraordinary income from selling to Group companies - 23,944
Notes to the income statement of the parent company
5. Depreciation and amortization by asset class category, EUR ’000 2021 2020
Intangible assets
Other capitalized expenditure (3,479) (3,381)
Tangible assets
Machinery and equipment (62) (62)
Impairment of investment
Impairment of investment in subsidiaries in UK and Poland 975 (27,9 66)
Total depreciation and amortization (2,566) (31,409)
6. Other operating expenses, EUR ’000 2021 2020
Other expenses for Group companies (8,316) (7, 096)
Other operating cost (1,710) (1,597)
Professional fees (3,383) (3,904)
Marketing cost (1,195) (1,764)
Administration costs (697) (4,684)
Audit fees (609) (475)
Other operational expenses of selling to Group companies (14,950) (2)
Total other operating expenses (30,860) (19,531)
186
Multitude SE Annual Report 2021 – Standalone Financial Statements (Audited)
7. Audit fees and other services from audit companies
EUR ’000 2021 2020
PWC
Audit fees 508 167
Non-audit fees:
Audit related services 4
Tax advice - 10
Other services 43 308
OTHER AUDIT COMPANIES
Audit fees - -
Non-audit fees:
Tax advice - -
Other services - -
Total audit fees 508 167
Total non-audit fees 47 318
8a. Intangible assets, EUR ’000 Other capitalized expenditures
Acquisition cost on 1 January 2021 19,238
Additions during the year ended 31 December 2021 102
Acquisition cost on 31 December 2021 19,340
Accumulated depreciation on 1 January 2021 (9,275)
Depreciation during the year ended 31 December 2021 (3,480)
Accumulated depreciation on 31 December 2021 (12,755)
Net Book value on 31 December 2021 6,585
Net Book value on 1 January 2021 9,964
Notes to the statement of financial position of the parent company
8b. Intangible assets, EUR ’000 Other capitalized expenditures
Acquisition cost on 1 January 2020 18,597
Additions during the year ended 31 December 2020 642
Acquisition cost on 31 December 2020 19,238
Accumulated depreciation on 1 January 2020 (5,893)
Depreciation during the year ended 31 December 2020 (3,381)
Accumulated depreciation on 31 December 2020 (9,275)
Net Book value on 31 December 2020 9,964
Net Book value on 1 January 2020 12,703
187
Multitude SE Annual Report 2021 – Standalone Financial Statements (Audited)
9a. Tangible assets, EUR ’000
Real estate
shares
Machinery and
equipment
Other tangible
assets
Total
Acquisition cost on 1 January 2021 1,241 606 1 1,848
Additions during the year ended 31 December 2021 67 - - 67
Acquisition cost on 31 December 2021 1,308 606 1 1,915
Accumulated depreciation on 1 January 2021 - (485) - (485)
Depreciation during the year ended 31 December 2021 - (62) - (62)
Accumulated depreciation at 31 December 2021 - (548) - (548)
Net Book value on 31 December 2021 1,308 59 1 1,367
Net Book value on 1 January 2021 1,241 121 1 1,363
9b. Tangible assets, EUR ’000
Real estate
shares
Machinery and
equipment
Other tangible
assets
Total
Acquisition cost on 1 January 2020 1,241 568 1 1,810
Additions during the year ended 31 December 2020 - 38 - 38
Acquisition cost on 31 December 2020 1,241 606 1 1,848
Accumulated depreciation on 1 January 2020 - (424) - (424)
Depreciation during the year ended 31 December 2020 - (62) - (62)
Accumulated depreciation at 31 December 2020 - (485) - (485)
Net Book value on 31 December 2020 1,241 121 1 1,363
Net Book value on 1 January 2020 1,241 144 1 1,386
10a. Investments, EUR ’000
Other shares and
equity interests
Acquisition cost on 1 January 2021 121,786
Additions during the year ended 31 December 2021 61,131
Disposals during the year ended 31 December 2021 (15,948)
Impairment of investment during the year ended 31 December 2021 (1,507)
Acquisition cost on 31 December 2021 165,462
Book value on 31 December 2021 165,462
Book value on 1 January 2021 121,786
188
Multitude SE Annual Report 2021 – Standalone Financial Statements (Audited)
11. Non-current receivables, EUR ’000 31 Dec 2021 31 Dec 2020
Receivables from intra-group companies 44,930 92,110
Non-current receivables from employees - 7
Non-current receivables from external parties 6,610 4,101
Total Non-current receivables 51,540 96,218
12. Current receivables, EUR ’000 31 Dec 2021 31 Dec 2020
Other receivables 790 325
Receivables from intra-group companies, accounts receivables 4,610 9,038
Receivables from intra-group companies, other 20,044 28,445
Accruals 3,306 3,044
Total Current receivables 28,750 40,852
10b. Investments, EUR ’000
Other shares and
equity interests
Acquisition cost on 1 January 2020 132,393
Additions during the year ended 31 December 2020 4,496
Disposals during the year ended 31 December 2020 (7,0 85)
Impairment of investment during the year ended 31 December 2020 (8,016)
Acquisition cost on 31 December 2020 121,786
Book value on 31 December 2020 121,786
Book value on 1 January 2020 132,393
13a. Change in equity 2021, EUR ’000
Share
capital
SVOP reserve
Retained
earnings
Equity
total
Total Equity on 1 January 2021 40,134 14,708 49,641 104,483
Other changes - - - -
Dividend distribution - - - -
Loss for the year - - (4,347) (4,347)
Total equity on 31 December 2021 40,134 14,708 45,294 100,136
13b. Change in equity 2020, EUR ’000
Share
capital
SVOP reserve
Retained
earnings
Equity
total
Total Equity on 1 January 2020 40,134 14,708 54,614 109,456
Other changes - - 21 21
Dividend distribution - - - -
Loss for the year - - (4,994) (4,994)
Total equity on 31 December 2020 40,134 14,708 49,641 104,483
189
Multitude SE Annual Report 2021 – Standalone Financial Statements (Audited)
14. Non-current liabilities, EUR ’000 31 Dec 2021 31 Dec 2020
Non-current liabilities others* 50,000 -
Non-current intra-group debts 140,416 162,815
Total non-current liabilities 190,416 162,815
* On 5 July 2021, Multitude SE issued EUR 50 million worth of unsecured and subordinated perpetual capital notes
(‘capital notes’) at of 99.50% of the nominal amount. The capital notes (ISIN NO0011037327) were drawn against a
total authorised framework of EUR 100 million with a floating coupon rate of 8.90% plus 3-month Euribor. Perpertual
bonds do not meet the definition of capital bond under Finnish companies Act 12 par. 1§ and as such, accounted and
presented as liabilities in Multitude SE financial statement. Perpertual capital notes treated according IFRS require-
ments on Group consolidated annual report (note nr. 1.1)
15. Current liabilities, EUR ’000 31 Dec 2021 31 Dec 2020
Trade payables 965 1,769
Other liabilities 417 390
Accruals 1,293 1,304
Intra-group liabilities 3,005 18 ,116
Total current liabilities 5,680 21,579
16. Accruals (current), EUR ’000 31 Dec 2021 31 Dec 2020
Accruals of personnel expenses 557 650
Other accruals 736 654
Total accruals (current) 1,293 1,304
17. Other rental liabilities, EUR ’000 31 Dec 2021 31 Dec 2020
Current rental liabilities 2 3
18. Commitments, EUR ’000 31 Dec 2021 31 Dec 2020
Corporate pledge - 20,000
Pledged subsidiary shares, book value - 11
Commitments for intra-group companies 143,350 180,000
Multitude SE is the guarantor of the bonds issued by Ferratum Capital Germany GmbH. The funds from the bond
issues are in accordance with the intercompany loan agreements being lent to Multitude SE.
19. Related party transactions
No loans and or any other commitments were issued to any related parties during 2021.
190
Multitude SE Annual Report 2021 – Standalone Financial Statements (Audited)
APPROVAL OF THE FINANCIAL STATEMENTS AND THE BOARD OF DIREC-
TORS REPORT
Helsinki, 30 March 2022
Frederik Strange Chairman of the Board
Juhani Vanhala Member of the Board
Lea Liigus Member of the Board
Jorma Jokela CEO Member of the Board
Goutam Challagalla Member of the Board
Michael Cusumano Member of the Board
Clemens Krause Member of the Board
The Auditor’s Note
A report on the audit performed has been issued today
Helsinki, 31 March 2022
PricewaterhouseCoopers Oy
Authorized Public Accountants
Jukka Karinen
Authorized Public Accountant
191
Multitude SE Annual Report 2021 – Standalone Financial Statements (Audited)