Qliro AB: Interim report January-March 2022

Robust position in the market despite weaker e-commerce sales

Important events during the first quarter
• The Board of Directors proposes a directed new share issue to proposed Chairman of the Board Patrik Enblad
• Agreements on payment solutions are signed with three merchants in the quarter

Important events after the end of the period
• The company launches its new strategy, “Safe and simple payments,” together with a new graphic identity

January-March 2022 (January–March 2021)
• Total operating income increased by 10 percent to SEK 106.0 million (96.4)
• Total operating expenses increased by 2 percent to SEK 86.6 million (84.9)
• Credit losses amounted to a net of SEK –28.0 million (-16.7). The year-over-year comparison is impacted by a new provision model to calculate the credit loss reserve, which was implemented in Q1 2021. The new calculation had a positive effect on last year’s profit of SEK 7.5 million.
• Operating profit was SEK –8.6 million (–5.3)
• Net profit for the period was SEK –7.2 million (–4.5) and earnings per share amounted to SEK –0.40 (–0.25)

Comment from Jonas Arlebäck acting CEO Qliro
Robust position in the market despite weaker e-commerce sales
We began 2022 with a strong first quarter where Qliro was able to report an increase in income of 10 percent to SEK 106 million despite more unfavorable market conditions for e-commerce in general. The increase was mainly driven by higher sales in our primary segment, Payment Solutions, where we are seeing increased interest in several of our installment products. Our sales volume in the quarter was even more impressive, I feel, since Svensk Handel’s (Swedish Trade Federation) e-commerce indicator for the first quarter (January-March) showed that e-commerce sales are down 13 percent YTD compared with the same period last year. If you also include Swedish consumers’ purchases from international e-commerce firms, sales fell by as much as 15 percent according to the report. Our sales volumes in the first quarter declined by 1 percent compared with the same quarter in 2021. This shows our robust position given the market’s substantial loss. Expenses increased in line with our target, i.e., much less than income, and corresponded to an increase of 2 percent in the quarter to SEK 87.0 million.

Changing consumption patterns
We are seeing a changing consumption pattern among customers with more choosing our loan products and paying for purchases over a longer time. The result was strong growth in the loan book for PAD (Pay After Delivery), which in turn drove income growth. PAD generated the strongest sales volume since Q2 2019. According to our new strategic approach, we have chosen to reduce the marketing of personal loans, which is also reflected in a slightly smaller loan book. In spite of this, income grew by 13 percent in the quarter. In the quarter an item affecting comparability was recognized for a VAT correction in the Norwegian operations, which reduced expenses by a total of SEK 4.9 million. Total credit losses corresponded to SEK 28.0 million in the quarter, which is higher than the SEK 16.8 million we reported in the first quarter 2021 and should be seen as an abnormal quarter. The year-over-year comparison is impacted by a new provision model to calculate the credit loss reserve, which was implemented in Q1 2021. The new calculation had a positive effect on last year’s profit of SEK 7.5 million. For comparison’s sake, our credit losses corresponded to SEK 24.0 million in the fourth quarter 2021. This is closer to current credit losses, indicating that we have now reached a more normalized level. Operating profit for the quarter was SEK -8.6 million and net profit for the period was SEK -7.2 million. In the quarter we also onboarded brands such as Stronger, Skoforum and Stuvfabriken.

Launch of ‘Safe and Simple Payments’ strategy
Qliro has always placed great focus on customers and the merchants we collaborate with. It is gratifying therefore that we have now launched our “Safe and Simple Payments” strategy, which puts even clearer focus on delivering a wider range of secure and simple payment solutions to e-merchants in the Nordics. With this strategy, Qliro has an opportunity to grow as one of the few Nordic players whose core business is payments. As part of the strategy, we began standardizing our offering for the SME segment in Sweden. In the quarter we went live with additional SME merchants, received positive responses to the offering and continued to develop it. Qliro is now paving the way for more payment alternatives to improve customer friendliness and conversion by introducing new payment methods for merchants such as Vipps, MobilePay and Swish. To strengthen Qliro’s focus on secure and simple e-commerce payments, we are also updating our visual identity – an important symbol of our new strategy. Last but not least, we signed a cooperation agreement in the quarter with the e-commerce platform Brink Commerce, which will go live in 2022. We are – and will continue to be – the best partner to large e-merchants. It is in our DNA which we continue to build on. Our goal is to help merchants optimize their business at the same time that we remain secure and easy to use for our customers. I look forward to leading Qliro in this strategy.

Presentation of the report
Media, analysts and investors are invited to a conference call on the 3rd of May at 10:00 am when acting CEO Jonas Arlebäck and CFO Robert Stambro will present the results. After the presentation there will be a Q&A session:

Phonenumbers:
Sverige: +46 8 50558368
UK: +44 33 33009272
USA: +16467224903

Link to the webcast: https://tv.streamfabriken.com/qliro-q1-2022
You can also find the presentation on: qliro.com/sv-se/investor-relations/presentationer