Multitude SE / Key word(s): Interim Report
Multitude SE publishes restated interim results for 2022 due to prior period adjustments and change of presentation
09.05.2023 / 07:00 CET/CEST
The issuer is solely responsible for the content of this announcement.
Helsinki, 09 May 2023 - Multitude SE (ISIN: FI4000106299, WKN: A1W9NS) ("Multitude" or the "Group") announces restated unaudited results for the 3 months ended 31 March 2022, ("3 Month"), the 6 months ended 30 June 2022 ("6 Month"), and the 9 months ended 30 September 2022 ("9 Month"). These restatements are required following a review of the brokerage fee treatment according to IFRS 9, classification of cash flows on deposits from customers in consolidated statement of cash flows and classification of loans to customers as non-current or current in consolidated statement of financial position.
Brokerage fees on loans and deposits
The Group reviewed the way sales and commission fees payable to third parties of specific lending products are recognised, and the pattern and method of recognition of the fees within the consolidated statement of profit or loss. Previously these costs were expensed as incurred and presented within selling and marketing expense. Subsequent to the correction, such fees which are transaction costs directly attributable to the acquisition of loans to customers and deposits from customers, are adjusted against the initial fair value of the instrument and are amortised to the statement of profit or loss over the estimated life of the related loans and deposits received applying the effective interest rate method. The impact of the correction is that the timing of the expense recognition changes, and both the interest income and fee expenses decrease within the statement of profit or loss.
Following the adjustments to the treatment of commission fee, Multitude considers its procedures on calculating interest revenue as fully compliant with definition of effective interest rate in IFRS 9.
Classification of cash flows on deposits from customers to cash flows from financing activities
The Group corrected the presentation of cash flows from deposits from customers in the consolidated statement of cash flows to cash flows from financing and restated the comparative period. Previously the Group classified the deposit related cash flows as part of the cash flows from its net cash flows from operating activities.
Reclassification of cash flow on deposits is aimed to align with classification of interest cost on deposits in the consolidated statement of profit or loss where it is part of finance costs.
Classification of loans to customers as non-current or current
The Group has corrected the classification of loans to customers as current and non-current in the statement of financial position and restated the comparative financial information accordingly. Previously, the Group incorrectly classified loans to customers which did not meet the current asset criteria in IAS 1 as current assets. The correction relates solely to the presentation in the statement of financial position, and it has no impact on the results.
The impact of adjustments on the financial statement line items can be found in the table below:
Consolidated statement of profit or loss (EUR ’000)
| 1 Jan 2022 - 31 Mar 2022 | 1 Jan 2022 - 30 Jun 2022 | 1 Jan 2022 - 30 Sep 2022 | Type of adjustment |
Interest revenue
| (1,720) | (3,458) | (5,256) | 1 |
Selling and marketing expense
| 2,000 | 4,022 | 6,112 | 1 |
Profit (loss) before interests and taxes (‘EBIT’)
| 280 | 564 | 857 | 1 |
Finance income (cost)
| (231) | (464) | (705) | 1 |
Income Tax Expense
| (7) | (14) | (22) | 1 |
Profit (loss) for the year
| 43 | 85 | 130 | 1 |
| | | | | |
Consolidated statement of financial position (EUR ’000)
| 31 Mar 2022 | 30 Jun 2022 | 30 Sep 2022 | Type of adjustment |
Assets:
| | | | |
Non-current assets:
| | | | |
Loans to customers
| 88,428 | 100,259 | 96,947 | 3 |
Current assets:
| | | | |
Loans to customers
| (82,205) | (93,140) | (88,821) | 1, 3 |
Prepaid expenses and other current assets
| (1,362) | (2,207) | (3,163) | 1 |
Equity:
| | | | |
Retained earnings
| 4,647 | 4,689 | 4,734 | 1 |
Liabilities:
| | | | |
Non-current liabilities:
| | | | |
Deferred tax liabilities
| 215 | 222 | 230 | 1 |
| | | | | |
Consolidated statement of cash flows (EUR ’000)
| 1 Jan 2022 - 31 Mar 2022 | 1 Jan 2022 - 30 Jun 2022 | 1 Jan 2022 - 30 Sep 2022 | Type of adjustment |
Profit (loss) for the year
| 43 | 85 | 130 | 1 |
Finance costs, net
| 231 | 464 | 705 | 1 |
Increase (+) / decrease (-) in trade payables and other liabilities
| (273) | (550) | (835) | 1 |
Deposits from customers
| 66,268 | 59,947 | 32,395 | 2 |
Net cash flows from (used in) operating activities
| 66,268 | 59,947 | 32,395 | |
Deposits from customers
| (66,268) | (59,947) | (32,395) | 2 |
Net cash flows from (used in) financing activities
| (66,268) | (59,947) | (32,395) | |
| | | | | |
| | | | | |
In connection to the aforementioned adjustments the Group has also restated all subsequently published interim results and balance sheets of the financial year 2022 as follows:
Consolidated Statement of Financial Position (EUR ’000)
| 31 Mar 2022 | 30 Jun 2022 | 30 Sep 2022 |
ASSETS
| | | |
Non-current assets:
| | | |
Property, plant and equipment
| 3,240 | 3,099 | 2,933 |
Right-of-use assets
| 3,683 | 3,456 | 2,929 |
Intangible assets
| 34,832 | 34,593 | 34,094 |
Deferred tax assets
| 6,911 | 6,571 | 6,254 |
Loans to customers
| 88,428 | 100,259 | 96,947 |
Other non-current financial assets
| 6,625 | 16,706 | 16,652 |
Total non-current assets
| 143,719 | 164,684 | 159,809 |
Current assets:
| | | |
Loans to customers
| 383,205 | 384,286 | 395,915 |
Other current financial assets
| 11,369 | 15,085 | 28,789 |
Derivative financial assets
| 700 | 2,007 | 4,013 |
Current tax assets
| 2,347 | 2,081 | 2,862 |
Prepaid expenses and other current assets
| 7,053 | 161 | 2,614 |
Cash and cash equivalents
| 213,123 | 149,065 | 152,220 |
Total current assets
| 617,798 | 552,686 | 586,414 |
Total assets
| 761,517 | 717,370 | 746,223 |
EQUITY AND LIABILITIES
| | | |
Equity:
| | | |
Share capital
| 40,134 | 40,134 | 40,134 |
Treasury shares
| (142) | (142) | (142) |
Retained earnings
| 71,752 | 71,669 | 75,259 |
Perpetual bonds
| 50,000 | 50,000 | 50,000 |
Unrestricted equity reserve
| 14,708 | 14,708 | 14,708 |
Translation differences
| (3,944) | (4,794) | (5,132) |
Other reserves
| 2,631 | 2,631 | 2,630 |
Total equity
| 175,139 | 174,206 | 177,457 |
Liabilities:
| | | |
Non-current liabilities:
| | | |
Long-term borrowings
| 58,304 | 2,765 | 2,847 |
Deposits from customers
| 91,237 | 88,486 | 77,634 |
Lease liabilities
| 2,026 | 1,570 | 2,113 |
Deferred tax liabilities
| 418 | 417 | 824 |
Total non-current liabilities
| 151,985 | 93,238 | 83,418 |
Current liabilities:
| | | |
Short-term borrowings
| 84,291 | 97,644 | 95,891 |
Deposits from customers
| 326,886 | 335,953 | 374,358 |
Derivative financial liabilities
| 2,623 | 106 | 337 |
Lease liabilities
| 1,461 | 724 | 1,281 |
Current tax liabilities
| 2,081 | 210 | 23 |
Trade payables
| 3,508 | 3,254 | 2,205 |
Accruals and other current liabilities
| 13,543 | 12,035 | 11,253 |
Total current liabilities
| 434,393 | 449,926 | 485,348 |
Total liabilities
| 586,378 | 543,164 | 568,766 |
Total equity and liabilities
| 761,517 | 717,370 | 746,223 |
| | | | |
Consolidated Statement of Profit or Loss (EUR ’000)
| 1 Jan 2022 - 31 Mar 2022 | 1 Jan 2022 - 30 Jun 2022 | 1 Jan 2022 - 30 Sep 2022 |
Interest revenue
| 51,006 | 101,948 | 155,076 |
Servicing fee revenue
| 763 | 1,620 | 2,497 |
Total revenue
| 51,769 | 103,569 | 157,573 |
Operating expenses:
| | | |
Impairment loss on loans to customers
| (18,547) | (37,754) | (57,872) |
Bank and lending costs
| (3,815) | (6,854) | (10,535) |
Personnel expense
| (8,918) | (17,942) | (25,860) |
Selling and marketing expense
| (3,528) | (6,759) | (9,755) |
General and administrative expense
| (7,129) | (13,549) | (19,384) |
Depreciation and amortisation
| (4,073) | (8,071) | (12,640) |
Operating profit
| 5,759 | 12,640 | 21,528 |
Other income (expense)
| 72 | (47) | 151 |
Profit before interests and taxes ("EBIT")
| 5,831 | 12,593 | 21,679 |
Finance income (costs)
| (3,364) | (9,574) | (13,784) |
Profit before income taxes
| 2,468 | 3,019 | 7,894 |
Income tax expense
| (416) | (888) | (1,798) |
Profit (loss) from continuing operations
| 2,052 | 2,130 | 6,097 |
Loss from discontinued operations
| - | - | - |
Profit (loss) for the year
| 2,052 | 2,130 | 6,097 |
Earnings (loss) per share:
| | | |
Weighted average number of ordinary shares in issue
| 21,578 | 21,578 | 21,578 |
Earnings (loss) per share from continuing operations, EUR
| 0.10 | 0.03 | 0.17 |
Earnings (loss) per share from discontinued operations, EUR
| - | - | - |
Total earnings (loss) per share, EUR
| 0.10 | 0.03 | 0.17 |
| | | | |
Consolidated Statement of Cash Flows (EUR ’000)
| 1 Jan 2022 - 31 Mar 2022 | 1 Jan 2022 - 30 Jun 2022 | 1 Jan 2022 - 30 Sep 2022 |
CASH FLOWS FROM OPERATING ACTIVITIES
| | | |
Profit (loss) for the year
| 2,052 | 2,130 | 6,096 |
Adjustments for:
| | | |
Depreciation and amortisation
| 4,062 | 8,060 | 12,617 |
Finance costs, net
| 3,364 | 8,968 | 13,074 |
Tax on income from operations
| 409 | 874 | 1,776 |
Other adjustments
| (166) | 280 | 223 |
Impairments on loans
| 18,547 | 38,107 | 57,872 |
Working capital changes:
| | | |
Increase (-) / decrease (+) in current receivables
| (8) | (2,865) | (30,568) |
Increase (+) / decrease (-) in trade payables and other liabilities
| (62) | (624) | (6,658) |
Interest paid
| (2,953) | (6,751) | (9,337) |
Interest received
| 61 | 188 | 662 |
Income taxes paid
| (1,541) | (2,966) | (4,471) |
Net cash flows from operating activities before movements in loan portfolio
| 23,764 | 45,402 | 41,286 |
Movements in gross portfolio
| (41,609) | (72,310) | (83,413) |
Net cash flows used in operating activities
| (17,845) | (26,908) | (42,127) |
CASH FLOWS FROM INVESTING ACTIVITIES
| | | |
Purchase of tangible and intangible assets
| (2,380) | (5,753) | (9,057) |
Purchase of investments and other assets
| 900 | 784 | 784 |
Purchase of non-current financial assets
| - | (10,000) | (10,000) |
Disposal of subsidiaries
| - | (3,781) | (5,584) |
Net cash flows used in investing activities
| (1,480) | (18,750) | (23,857) |
CASH FLOWS FROM FINANCING ACTIVITIES
| | | |
Repayment of short-term borrowings
| - | (83,521) | (85,221) |
Perpetual bonds interests and issuance costs
| (729) | (1,854) | (2,403) |
Repayment of finance lease liabilities
| (763) | (1,120) | (1,881) |
Proceeds from long-term borrowings
| - | 39,400 | 39,400 |
Proceeds from short-term borrowings
| - | 2,765 | 2,770 |
Deposits from customers
| (66,268) | (59,947) | (32,395) |
Net cash flows from (used in) financing activities
| (67,760) | (104,277) | (79,730) |
Cash and cash equivalents, as at 1 January
| 301,592 | 301,592 | 301,592 |
Exchange gains (losses) on cash and cash equivalents
| (1,383) | (2,592) | (3,658) |
Net increase in cash and cash equivalents
| (87,085) | (149,935) | (145,714) |
Cash and cash equivalents, as at end of reporting period
| 213,124 | 149,065 | 152,220 |
| | | | |
| | | | |
The restatement of operating segments for each interim result of year 2022 are shown as follows:
Operating and reportable segments for 1 Jan 2022 - 31 Mar 2022
EUR ’000
| Ferratum | Sweep-Bank | Capital-Box | Central | Total |
Gross interest revenue
| 44,204 | 3,406 | 5,448 | - | 53,058 |
Transaction costs
| (1,720) | (280) | (53) | - | (2,052) |
Interest revenue
| 42,485 | 3,126 | 5,395 | - | 51,006 |
Servicing fee revenue
| 751 | 13 | - | - | 763 |
Total revenue
| 43,235 | 3,139 | 5,395 | - | 51,769 |
Share in revenue, in %
| 83.5% | 6.1% | 10.4% | - | 100.0% |
Operating expenses:
| | | | | |
Impairment loss on loans to customers
| (14,091) | (2,077) | (2,379) | - | (18,547) |
% of revenue
| 32.6% | 66.2% | 44.1% | - | 35.8% |
Bank and lending costs
| (3,288) | (339) | (188) | - | (3,815) |
Personnel expense
| (4,904) | (2,549) | (1,465) | - | (8,918) |
Selling and marketing expense
| (1,518) | (750) | (1,260) | - | (3,528) |
General and administrative expense
| (3,941) | (2,214) | (975) | - | (7,129) |
Depreciation and amortisation
| (3,452) | (485) | (136) | - | (4,073) |
Operating profit (loss)
| 12,041 | (5,275) | (1,008) | - | 5,759 |
Other income (expense), net
| 14 | 1 | 57 | - | 72 |
Profit (loss) before interests and taxes ("EBIT")
| 12,055 | (5,274) | (951) | - | 5,831 |
EBIT margin, in %
| 27.9% | -168.0% | -17.6% | - | 11.3% |
Allocated finance costs, net
| (2,463) | (744) | (640) | | (3,847) |
Unallocated foreign exchange losses, net
| | | | 483 | 483 |
Profit before income taxes
| 9,593 | (6,018) | (1,591) | 483 | 2,468 |
Profit before tax margin, in %
| 22.2% | -191.7% | -29.5% | - | 4.8% |
Loans to customers
| 290,905 | 98,386 | 82,342 | - | 471,633 |
Unallocated assets
| - | - | - | - | 291,245 |
Unallocated liabilities
| - | - | - | - | 586,163 |
| | | | | | |
| | | | | | |
Operating and reportable segments for 1 Jan 2022 - 30 Jun 2022
EUR ’000
| Ferratum | Sweep-Bank | Capital-Box | Central | Total |
Gross interest revenue
| 88,892 | 6,757 | 10,876 | - | 106,525 |
Transaction costs
| (3,458) | (656) | (462) | - | (4,577) |
Interest revenue
| 85,434 | 6,100 | 10,414 | - | 101,948 |
Servicing fee revenue
| 1,590 | 31 | - | - | 1,620 |
Total revenue
| 87,024 | 6,131 | 10,414 | - | 103,569 |
Share in revenue, in %
| 84.0% | 5.9% | 10.1% | - | 100.0% |
Operating expenses:
| | | | | |
Impairment loss on loans to customers
| (29,032) | (4,216) | (4,506) | - | (37,754) |
% of revenue
| 33.4% | 68.8% | 43.3% | - | 36.5% |
Bank and lending costs
| (5,710) | (688) | (456) | - | (6,854) |
Personnel expense
| (9,969) | (5,218) | (2,754) | - | (17,942) |
Selling and marketing expense
| (4,000) | (1,115) | (1,644) | - | (6,759) |
General and administrative expense
| (7,629) | (4,117) | (1,803) | - | (13,549) |
Depreciation and amortisation
| (6,333) | (1,450) | (289) | - | (8,071) |
Operating profit (loss)
| 24,351 | (10,673) | (1,038) | - | 12,640 |
Other income (expense), net
| (40) | (3) | (5) | - | (47) |
Profit (loss) before interests and taxes ("EBIT")
| 24,311 | (10,676) | (1,043) | - | 12,593 |
EBIT margin, in %
| 27.9% | -174.1% | -10.0% | | 12.2% |
Allocated finance costs, net
| (5,166) | (1,767) | (1,343) | - | (8,276) |
Unallocated foreign exchange losses, net
| - | - | - | (1,298) | (1,298) |
Profit before income taxes
| 19,145 | (12,443) | (2,386) | (1,298) | 3,019 |
Profit before tax margin, in %
| 22.0% | -203.0% | -22.9% | - | 2.9% |
Loans to customers
| 291,334 | 111,154 | 82,058 | - | 484,546 |
Unallocated assets
| - | - | - | - | 23,507 |
Unallocated liabilities
| - | - | - | - | 543,312 |
| | | | | | |
| | | | | | |
Operating and reportable segments for 1 Jan 2022 - 30 Sep 2022
EUR ’000
| Ferratum | Sweep-Bank | Capital-Box | Central | Total |
Gross interest revenue
| 135,087 | 11,253 | 15,883 | - | 162,222 |
Transaction costs
| (5,256) | (1,116) | (775) | - | (7,147) |
Interest revenue
| 129,831 | 10,137 | 15,108 | - | 155,075 |
Servicing fee revenue
| 2,443 | 54 | - | | 2,498 |
Total revenue
| 132,274 | 10,191 | 15,108 | - | 157,573 |
Share in revenue, in %
| 83.9% | 6.5% | 9.6% | - | 100.0% |
Operating expenses:
| | | | | |
Impairment loss on loans to customers
| (44,030) | (7,980) | (5,862) | - | (57,872) |
% of revenue
| 33.3% | 78.3% | 38.8% | | 36.7% |
Bank and lending costs
| (8,236) | (1,062) | (1,237) | - | (10,535) |
Personnel expense
| (14,476) | (7,183) | (4,201) | - | (25,860) |
Selling and marketing expense
| (5,963) | (1,674) | (2,118) | - | (9,755) |
General and administrative expense
| (10,942) | (5,541) | (2,900) | - | (19,384) |
Depreciation and amortisation
| (9,060) | (3,105) | (475) | - | (12,640) |
Operating profit (loss)
| 39,568 | (16,354) | (1,685) | - | 21,528 |
Other income (expense), net
| 128 | 9 | 14 | - | 151 |
Profit (loss) before interests and taxes ("EBIT")
| 39,696 | (16,345) | (1,671) | - | 21,679 |
EBIT margin, in %
| 30.0% | -160.4% | -11.1% | - | 13.8% |
Allocated finance costs, net
| (7,100) | (2,601) | (1,846) | - | (11,547) |
Unallocated foreign exchange losses, net
| - | - | - | (2,237) | (2,237) |
Profit before income taxes
| 32,595 | (18,946) | (3,517) | (2,237) | 7,894 |
Profit before tax margin, in %
| 24.6% | -185.9% | -23.3% | - | 5.0% |
Loans to customers
| 290,395 | 120,034 | 82,434 | - | 492,863 |
Unallocated assets
| - | - | - | - | 256,609 |
Unallocated liabilities
| - | - | - | - | 568,536 |
| | | | | | |
| | | | | | |
About Multitude Group:
Multitude aims to become the most valued financial ecosystem by acting as a growth platform that creates success stories in FinTech. With profound know-how in technology, regulation, funding and cross-selling, Multitude offers a range of sustainable banking and financial services for FinTechs to grow and scale rapidly. Multitude and its three independent business units, SweepBank, Ferratum and CapitalBox, employ around 700 people in 19 countries, and they together generated EUR 212 million revenue in 2022. Multitude was founded in 2005 in Finland and is listed in the Prime Standard segment of the Frankfurt Stock Exchange under the symbol ‘FRU’. www.multitude.com
