Speaker 1
thank you and welcome to our q2 presentation so as usual we will start with a quick strategic update with some highlights walk through the financial update and talk a bit about outlook and then end with some some q a so first of all we still see a very large opportunity to build a new european leader in composable payments we believe the infrastructure in payments is changing and we want to be the best position player for that change in the industry and that is a key driver of our current growth in market shares. We do that through delivering a world-leading experience for merchants and their customer journey and this is something that truly differentiates us versus local competition. Q2 now marks the second profitable quarter in a row so we reach break-even in Q1 and that journey continues. We are growing our volume, our total payments volume by 28% in the quarter, and our most profitable volumes, the BNPL volumes are accelerating to 47% growth in the quarter, which we're very proud about. Our net revenue growth is also accelerating now up to 24% growth, up from the 90% we saw in Q1 and the 14% we saw in Q4. So we are trending upwards in the net revenue growth that has been lagging a bit behind the volume and BNPL growth in the past. A large share of the volumes from a growth perspective is now coming from our investments and success in the SME segment across all the Nordic markets. And we continue to grow the SME business as part of our finances, both from a net revenue perspective and gross profit perspective, given the higher markets in the segment. So that's now representing more than 60% of the volume growth in the quarter. And overall in our Nordic expansion, both in Norway and Finland, we see a continued very strong momentum and large pipeline going forward. So talking about the first point, we want to build a European leader in composable payments, starting in the Nordics with global capabilities. And we're now in the process of adding more and more international payment methods into our checkouts to cater for international volumes of our Nordic merchants. From a sales perspective, we're primarily targeting Nordic merchants. But we're also with the partnership with P-Pro that was recently announced addressing European merchants with a lot of Nordic volume. And we'll come back to that later in the presentation. Our mission is to deliver a world learning experience for merchants and their customer journey. I've been in this industry for more than 10 years, and my experience is that there's no one that's doing a really good merchant experience and combining that with full focus on the merchant's customer journey, not selling a lot of other things to the consumers. And that's something differentiates us both versus local niche bank competitors, as well as the more global BNPL players. And it's a large reason for why many merchants see from a strategic perspective that they are shifting to our platform. Our ambition is to become the local market leader in the Nordics within the next three to five years and with the current growth trends we are well on the way to get there. From a product perspective, we also launched a new generation of our checkout in the quarter, Cliro Checkout Generation 4, with the focus on increasing our performance even further, both speed in the checkout, conversion as well as our new upsell functions. Overall we see a conversion uplift of 13 percent when we compare it to Lidic Nordic competitors in the first AB test that was done versus competition so when merchants are upgrading to our platform they typically do an AB test running some volumes on the former platform and some volume on kind of our platform and so far we haven't lost any of these AB tests since 2024 when we launched the second generation of the checkout which are called checkout generation 0.0. From a profitability perspective we are increasing our profit compared to the first quarter still with quite small margins but we are happy we are continuing on the profitability trend so we are breakeven and we're targeting to reach also profitability of course for the full year with increased profits going forward. So we now have the large investment phase behind us in the summer 2024 we decided to launch our international expansion with setting up the sales offices in Norway and later in Finland as well as kind of doubling down on sales and marketing also in the Swedish market that have yielded very good results in growth and have now taken us back to the profitability. So going forward we're planning to continue to grow but being profitable at the same time. And these growth investments have led to kind of good volume growth during the last kind of one two years and we are in the current quarter growing 28 percent compared to the same quarter last year and we are still seeing a very strong momentum in the SME segment and but in this specific quarter we saw slightly lower momentum in the existing enterprise portfolio with a bit less expect kind of organic growth than we had in kind of during end of last year and a bit slower ramp up of new enterprise merchants where we had expected some larger deals to be signed and onboarded before summer but but negotiations are still ongoing and so the pipeline is strong for the autumn but they didn't come live we cannot pass up now so we're growing 28 and as part of that we have also recently renewed a large share of our enterprise portfolio so we announced during this week that we are prolonging and extending the agreement with the group that's having the brands Skruvat.si and Byt Hjul, as well as Deckskiftarna, one company within a group that are not processing with us today, but are shifting to us during the next year. So we've also, during the early this year, extended contracts with both Nelly and Liko, two of our other top five merchants so we are very well positioned with secured contract in our existing portfolio which creates a lot of stability for the business going forward from a revenue perspective we are growing net revenue by 24 percent in the quarter so the net revenue have increased for kind of the last five quarters in a row a bit lagging the growth we have seen in the bnpl volume and the bnpl volume growth is now on a very high level at 47% growth in the quarter, but also partly driven by shorter duration products. So we don't expect that to fully materialize into net revenue growth, but it's still a very good leading indicator that our products are more and more used from a consumer perspective, not only for the longer duration purchases, but also for more frequent purchases with invoices and part payments being paid also on a shorter duration and that shorter duration is also coming through in lower credit losses which we will also see kind of when and coming to that part of the financial presentation. From an SME perspective we are accelerating in the SME business we're adding more than 115 kind of new active merchants on the platform in the quarter as we now have more than 800 merchants processing on our platform growing the merchant base by 120 percent and our net revenue growth from the SME segment is growing by 140 percent compared to last year so now representing 26 million in net revenue in the quarter so given that that's expected to continue going forward we're now processing more than 100 million can up a year in run rate on SME business, which is a very good number compared to this is a quite new initiative that we have launched and we see a lot of success in SME business and expect this growth momentum to continue also going forward. So SME business now represents 23% of our net revenue and more than 60% of the new volume growth in the quarter. We also see good momentum in the new markets where we've always processed consumer products or kind of pay later products also in Norway, Finland, Denmark but it was not until in kind of late 2024 where we launched our Norwegian sales office and in April last year we launched our kind of Finnish sales office that we started to sell to also local merchants in Norway, Finland. These have so far been very successful. We have more than 3 billion in signed volume from merchants locally that is expected to go live on the platform and we continue to win more and more market share and kind of build momentum as both the pipeline gets more mature and stronger in each of the markets. As part of the international expansion we, so the third arrow is on the last page, we expect to target European and global volumes from kind of merchant selling into the Nordics. More than 20 percent of Nordic e-commerce volume is coming from kind of european and global merchants the first step in this strategy is that we're launching an exclusive partnership with ppro as their nordic bnpl partner so we will have exclusivity on this this market with with our products so they are offering clear or pay later in their network of global payment service providers so basically global checkout providers as well as some global kind of really kind of tier one merchants that are selling into the Nordic market. This partnership is expected to go live kind of early next year and kind of start the process volumes during next year. So and we expect that this could be a significant kind of growth contribution going forward both from P-Pro as well as from this strategy in general of enabling Cliro as a pay later method into other global checkout providers. And the strategic highlights kind of going forward and in the midterm we expect to build a market leading position in the nordics and we're well on the way to get there we see a strong commercial momentum and we will continue to drive the market share growth both in the sme segment as well as the enterprise segment as mentioned with a slightly slower kind of conversion to sign the contracts in the enterprise space in kind of during h1 but we expect that to catch up during h2 the pipeline is still strong the deals haven't been lost but rather pushed a bit into the future and we expect the revenue growth to continue during the year and going forward as more and more of the volume build up our loan book and has started to generate more revenue SME will continue to grow with more than 30 percent growth in new volumes and as mentioned we're actually representing 60 percent volume growth in kind of the quarter but going forward we also expect some larger enterprise deals coming in and hence the SME number in absolute numbers would not go down but in share of total growth we expect it to maybe be above 30 but probably below 50. So our Nordic expansion has also kind of a lot of potential to grow further and now we created a full Nordic commercial organization. We recently announced that we are changing our organization a bit. We announced a deputy CEO and as part of that we also set up a Nordic commercial organization with kind of SME team across the Nordic, enterprise team across the Nordic and so on and we believe that will help us to drive the Nordic success even further. We will also continue to focus on improving our income generation from the volumes to continue to improve our kind of pay later performance metrics that is an important driver of our profitability we are working on our scalability and efficiency and especially due to the kind of the new platform that we are launching for our palliator products we have announced that previously that we launched for the first part payment products in in sweden that is now live for all our part payment products in sweden for a small share of our volume and we expect to ramp that up during kind of the rest of the year and then launch the platform also in our other markets and that's an important part of also ensuring compliance with the new kind of consumer credit directive that's implemented in sweden kind of during the november of this year so very well positioned for that and we will continue to drive our revenue growth and profitability for the full year 2026 and with that said let's jump into the more detailed financial update So, first of all, as mentioned before, our total payments volume is growing by 28%. That's translating into 24% growth on net revenue. And at the same time, we see credit losses declining by 14%. So, despite the growth in volume, our growth in loan book and our growth in net revenue, credit losses is actually declining. And that's very good. So we have a good momentum on gross profit, gross profit one before variable cost, we're growing 39%. We're keeping variable cost fairly flat at 2% growth despite the 28% volume growth. So we have done a lot of efficiency initiatives and cost saving initiatives on the variable cost side during last year. We now see that coming through in the numbers and that's leading to gross profits to growth of 47% in the quarter. At the same time, we are reducing our fixed costs by 4%. So that's leading to an operating profit of 0.7 million in the quarter, up from minus 29.5 last year, which was kind of our low point in profitability during the investment phase. So very proud of these financial results. And we also see good improvements on the margin metrics, both GM1 and GM2. the loan book is have a steady growth now of eight percent we expect it to increase a bit going forward as the bnpl growth have are growing rapidly the bnpl volume as share of our total payments volume is now stabilizing around 16 and we expect it to stay at that level or potentially increase a bit also going forward as we as we are continuing to improve our pay later offering our Our net revenue growth, as mentioned, is growing 24% to 120 million in the quarter and more less fairly flat in absolute numbers compared to the last quarter and that's normal in the seasonality of our business where the volumes typically are a bit weaker in kind of Q1, Q2 and then are picking up during kind of the rest of the year with a high point in Q4. Our credit losses, as mentioned, is declining 14% and the debt collection ratio is now started stabilizing. In the previous quarter, we reduced it by 30%, but we're now coming into slightly more challenging comparables. It's not that the improvement is less, it's just that the improvements were already starting in Q1 and Q2 last year, but are still declining by 11% compared to last year. That's also leading that we continue to expect improvements also from a financial perspective on credit losses going forward. The leading indicators on the credit side is good. based on all the investments we have done during the last two years in both our new credit team, new credit kind of infrastructure for both our basically all our databases, variables, credit decision models, credit limit frameworks and strategies. So we revamped that whole setup and that is now kind of yielding very good results in from both financial perspective but also from consumer experience perspective. Part of this is also driven by the improvement in consumer experience in general with the new Cliro app that have been launched in a new version also during the spring where we help consumers to pay more on time. We lose some reminder fee revenue from that so it's a bit of impact on that on the revenue side but we believe that a better consumer experience and lower credit losses will help us to build a better business long term. From a cost perspective we've been working hard on cost control since uh kind of q2 last year we did the restructuring program in september october last year to to take down uh cost as well as kind of ensure we had a more scalable foundation as well as kind of improving a bit on the tech side which you will see on the next page but uh the overall cost including the variable cost is is declining three percent and we have a six percent decline in kind of the the rest of the cost compared to last year so basically a fairly flat cost base despite the the growth we've seen in in both volumes and net revenue so we we truly see kind of the scalability of the business model now coming through in practice um we are now also developing more and more with the AI on the tech side. We're using cloud code to kind of fully in all teams. And based on that, as well as the new technical platforms we launched during last year, we have reduced our CapEx investments since Q3, and we are now running at around 22 million per quarter, so down roughly 35% compared to last year. Given the success with the P-Pro partnership, as well as some other upcoming kind of partnerships, we are expected to increase CapEx a bit again. But not to the previous levels just to finance the kind of the new business opportunities. From a profit perspective as I already mentioned the investment phase is now behind us that has yielded good results on the growth as discussed bringing us back to the profitability and we expect profitability to increase also going forward yielding kind of a full year profitable 2026. from a capital perspective no big news we are at running at the level of 21.9 percent so we're well capitalized and that's also due to the rights issue that was successfully processed in April with that was oversubscribed with 191 percent bringing in 101 million before transaction costs so that was it for the financial update and looking ahead i've already mentioned it we will expect continued net revenue growth going forward we expect profitability for the full year 2026 we'll continue to accelerate our kind of sales engine in both segments and we will continue to build growth momentum in our new market so we are now improving our processes across the nordics to even more streamlined to support the markets in the best way we have learned a lot during the last kind of year or kind of two years in Norway one year in Finland to improve even further so we expect that success to increase going forward and with that we also focus on making sure that the volumes is turning into profitable loan book that we continue to improve the scalability and efficiency with our new platform and with that we have our mission to deliver a market-leading experience for merchants and their customer journey and we'll continue on that focus going forward thank you very much and i open up for questions if you wish to ask a question please dial pound key five on your telephone keypad to enter the queue if you wish to withdraw your question please dial pound key six on your telephone keypad we have one first question of considering your projected growth how is your reasoning regarding capital injection from shareholders and meet capital requirements and as i just mentioned we did a very successful capital raise in april and we did a rights issue that was oversubscribed 191 percent we brought in 101 million swedish krona in in new capital and with that we are expected to fund our growth journey going forward we are now profitable and expect to grow profitable also going forward secondly we have a question regarding the new consumer credit directive ccd2 that is a european regulation that is implemented in november in the swedish consument credit lager and as well as kind of the also regulation in finland and denmark and we are very well prepared from that from a technical perspective that's why we're launching our new pay later platform and that will not only help us be compliant from a regulatory perspective but also increase our operational efficiency across all our processes related internally to kind of consumer experience related to our related products so we get a much more kind of modern cloud-based platform as well as kind of much more efficient processes as we can develop more tools on top of the new platform that we put on the previous kind of legacy infrastructure and that will also be a platform that we can take into new markets if we would like to going forward. So that's from a technical perspective. From a financial perspective the new regulation commits on fee caps and so on. We are already within those fee caps so we don't see kind of any large impact or any significant impact on the business from that perspective. And then there are some product changes we need to do from to kind of adapt the consumer experience to fit with new communication requirements, marketing requirements and so on. But nothing that we see currently that is impacting us from a financial perspective but of course we're working to ensure we always are compliant with all our products in all markets so that's uh that's it um and i think that's all the questions we have so far i get the text here from the moderator that there's no more questions so uh then i wish you all a great summer and uh if not before we connect in three months from now and your your vacations thank you very much
