Multitude Group publishes preliminary unaudited full-year results for 2021

DGAP-News: Multitude SE / Key word(s): Preliminary Results
15.03.2022 / 07:30
The issuer is solely responsible for the content of this announcement.

Multitude Group publishes preliminary unaudited full-year results for 2021

Helsinki, 15 March 2022 - Multitude SE (ISIN: FI4000106299, WKN: A1W9NS) ("Multitude" or the "Group") announces preliminary unaudited results for the year ended 31 December 2021.

Multitude introduced new strategy and brands during 2021

During the second quarter 2021 the Group rebranded previous segments Microloan, PlusLoan, CreditLimit, CapitalBox and Mobile Wallet including Primeloan. The newly introduced segments and brands within the Group are called Ferratum, CapitalBox and SweepBank. According to the new strategy, the Group's business units now have a more independent role to be even more closely aligned to their clients and their specific needs. The Group concentrates on business-critical operations, with cost advantages derived from delivering greater economies of scale.

Financial Highlights

- Selective increase in risk appetite and increased market activities resulted into significant decrease in impairment losses and increase in overall portfolio

- Stable cost baseline and positive profit from continuing operations

- Improved current asset, liquidity, and net debt-to-equity ratios

Key figures, in EUR million 2021 2020*
Revenue 213.7 230.4
Impairment to loans to customers (71.9) (91.0)
Profit before interests and taxes ('EBIT') 23.9 28.5
Profit before taxes 3.6 6.2
Profit from continuing operations 1.2 5.0
Loss from discontinued operations (3.8) (4.5)
Profit (loss) for the year (2.6) 0.5
Earnings per share, continuing operations (in EUR) 0.06 0.23
Earnings per share, discontinued operations (in EUR) (0.18) (0.21)
Earnings per share for the year (in EUR) (0.12) 0.02
 

*Restated to carve-out 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 Group's decision to discontinue lending activities in selected markets.

The 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. Accordingly, the above activities have resulted into increases in the Group's lending, selling and marketing, and amortization expenses.

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 inspite 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.

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 2021, 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 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.

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 of all of its shareholdings in Ferratum UK Ltd., 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 after-tax losses from discontinued operations amounting to EUR 3.8 million and EUR 4.5 million in 2021 and 2020, respectively for the comparative years presented. The 2021 loss from discontinued operations include a EUR 2.0 million loss on disposal relating to Ferratum UK Ltd.

The resulting after-tax profit from continuing operations amounted to EUR 1.2 million and EUR 5.0 million in 2021 and 2020, respectively.

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, but also from loan portfolio growth in Ferratum and CapitalBox

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 parts of the 2018 and 2019 bonds with a hybrid capital 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 in all three tribes.

About Multitude SE:

Multitude is a fully regulated growth platform for financial technology. Its ambition is to become the most valued financial ecosystem. This vision is backed by +15 years of solid track record in building and scaling financial technology. Through its full European banking license, profound know-how in technology, regulation, cross-selling, and funding, Multitude enables a range of sustainable banking and financial services to grow and scale. Currently, it has three independent business units on this growth platform: Ferratum as consumer lender, CapitalBox as business lender, and SweepBank as shopping and financing app. Multitude and its independent units employ over 700 people in 19 countries, and they together generated EUR 213 million turnover in 2021. 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



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