Release Date: July 16, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Operations in Finland, Norway, and Denmark showed positive developments.
- Adjusted EBITDA margin improved to 36.7%, indicating effective cost control.
- High level of customer satisfaction with an NPS level of 36.
- Successful deployment of generative AI bots across B2B and B2C websites in the Nordic countries.
- Integration with the Finnish positive credit register was successful, receiving positive customer feedback.
Negative Points
- Challenges in the Swedish consumer credit market led to a decline in net sales.
- Organic net sales decreased by 2.9% at comparable exchange rates.
- Adjusted EBITDA decreased by 2.5% at comparable exchange rates.
- Postponement of some planned costs to the second half of the year will burden H2 financials.
- Consumer Insights business area experienced a significant revenue decline of 8% year-on-year.
Q & A Highlights
Q: You now expect stabilization in the Swedish consumer credit information market. Do you see any signs on when it could return to growth? Is 2025 realistic?
A: Jeanette Jager, CEO: The largest consequence on the decline has been market consolidation and lenders leaving the market. However, we see positive signs such as potential interest rate reductions in the autumn, which could positively affect consumer credits. The exact timing for growth resumption is difficult to predict.
Q: Regarding the conversation about over-indebtedness in Sweden and the possible licensed-based register, you expect to see some news in the autumn. What is happening then?
A: Jeanette Jager, CEO: We have been informed that there will likely be updates shared in the autumn, but no specific decisions or detailed information have been provided yet.
Q: You mentioned successful penetration in the e-commerce vertical. How significant is this vertical currently, and what potential do you see here?
A: Jeanette Jager, CEO: The e-commerce sector is important, and we have developed a specialized offering for it. We have gained additional customers and are becoming established in this sector in Sweden.
Q: Could you elaborate on the timing and amount of costs transferred from Q2 to H2?
A: Elina Strahlman, CFO: Partially due to timing, but we also plan to invest more in OpEx in the coming quarters, especially in marketing and launching new services. Additionally, cost inflation and new partner agreements will impact our cost base.
Q: Do you expect one-off cost increases in H2 due to the IT infrastructure transformation?
A: Elina Strahlman, CFO: Yes, the transformation will require significant investments in terms of both time and resources, including vendor costs.
Q: Gross margin weakened from the previous year. What is causing this mixed effect?
A: Elina Strahlman, CFO: The decline in Swedish consumer credit business, which has fixed data acquisition costs, contrasts with the growth in Finnish real estate and consumer marketing businesses, which have variable data acquisition costs. Additionally, governmental price increases impact our cost base.
Q: Are there any signs of improvement in the Swedish consumer loan demand?
A: Jeanette Jager, CEO: Yes, there are signs of improvement. The real estate market is stabilizing, and potential interest rate reductions in the autumn could positively affect consumer credit and loan broker markets.
Q: Are acquisitions favorable for Enento given the lower valuations in recent years? What would be a good addition to Enento's offering?
A: Jeanette Jager, CEO: We continuously scan the market for acquisitions that offer valuable data, technology, or customer bases. While we have not seen an acquisition that meets our criteria recently, we remain open to opportunities in areas like PSD2, marketing, and compliance.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
