Investor Presentation • May 5, 2021
Investor Presentation
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Stavanger
5. May 2021
Important information and disclosures at the end of this presentation
Investing in the Huddlestock Fintech AS (the Company) involves inherent risks. Prospective investors should consider, among other things, the risk factors set out below before making an investment decision. The risks described below are not the only ones facing the Company. Additional risks not presently known to the Company or that the Company currently deems immaterial, may also impair the Company's business operations and adversely affect the price of the Company's Shares. An investment in the Shares is suitable only for investors who understand the risk factors associated with this type of investment and who can afford a loss of all or part of the investment. The information set out herein is presented as of the date hereof and is subject to change, completion or amendment without notice.
The Company is relatively newly established and its lack of operating history makes it difficult to assess the outlook for its business model, future revenues and other operating results. There can be no assurance that the reception in the market of the Company's business model will be as forecasted. If the market's reception is weak this may have a material adverse effect on the Company's business, financial condition, results of operations and/or prospects.
The situation with regard to the coronavirus pandemic is still subject to uncertainties, and the Company cannot foresee how long the coronavirus pandemic will last, nor the full extent the coronavirus pandemic may have on the Company's operations, financial results and prospects in the medium to longer term.
The operating and financial performance of the Company is influenced by a variety of general economic and business conditions, including levels of consumer spending, inflation, interest rates and exchange rates, supply and demand, industrial disruption, access to debt and capital markets, and government fiscal, monetary and regulatory policies. Changes in general economic conditions may result from many factors, including government policy, international economic conditions, significant acts of terrorism, hostilities or war, or natural disasters. A prolonged deterioration in general economic conditions, including an increase in interest rates or a decrease in consumer and business demand, could be expected to have an adverse impact on the Company's operating and financial performance and financial position. The Company's future possible revenues and share prices can be affected by these factors, which are beyond the Company's control.
The Company faces competition from international Fintechs and other companies, while the competitive landscape may continue to change. Increased competition may lead to tightening competition for new customers and/or lower net margins. If the Company is unable to compete efficiently, its competitive position may be adversely affected, which as a result, may have a material adverse effect on its business, financial condition, results of operations and/or prospects.
The Company is subject to a wide variety of laws and regulations. The Company is targeting an international market, hence failure to comply with international legislation such as anticorruption, money laundering and GDPR legislation could result in fines, criminal penalties and damage to the Company's reputation. Future changes in the domestic and international laws and regulations applicable to the Company can be unpredictable and are beyond the control of the Company, and such changes could imply the need to materially alter the Company's operations and set-up and may prompt the need to apply for permits or other approvals, which could in turn have a material adverse effect on the business, financial condition, results of operations or cash flow of the Company.
The Company has limited prior operating history and there is no actual historical operational data available for the Company's business. The Company has of today only generated limited revenues. Since its inception, the Company has incurred losses, and to date, the Company has financed its operations through inter alia private placements of equity. The Company's commercial success is inter alia dependent on the successful implementation of the products and services, and to become and remain profitable, the Company must succeed in commercialising its business and technologies such that they generate revenues. Although the Company's Board of Directors and management has considerable relevant experience from the capital markets sector, there are risks associated with the Company's ability to implement its business strategy within the projected scope, timeframe and cost level.
The Company will rely heavily on the uninterrupted operation of its IT systems for the efficient running of its business and operations, and, in particular in order to offer customers digital services. The Company will rely on certain financial infrastructure services. In addition, the Company will depend on a few third party providers for the supply of important IT services. The Company's ability to conduct its business may be adversely affected by a disruption in the infrastructure that supports the business of the Company.
The industry in which the Company operates sees frequent changes and developments in technology. Such changes and developments can be driven by competitors of the Company with substantial greater resources than those of the Company. The Company's technology and any further technology under development, may not prove to be viable or efficient, and efforts to respond to technological innovations may require significant financial investments and resources. Failure by the Company to respond to changes in technology and innovations may render the Company's operations uncompetitive and may have a material, negative effect on the Company's results of operation, financial condition and future prospects.
The Company is dependent on partners, suppliers, and other third parties to supply certain services in order to successfully conduct its operations. If the supply of such products and services is delayed, not given priority or does not meet the required quality, this could have a material adverse effect on the Company's results, financial condition, cash flows and prospects. Further, there can be no assurance that the Company will be able to enter into or maintain satisfactory agreements or relationships with third party providers in the future, or be able to maintain its arrangements with its current or new suppliers and distributors on same or other commercially reasonable terms in the future, or at all, which in each case could have a material adverse effect on the Company's results, financial condition, cash flows and prospects.
As a technology-driven business model, the Company and its customers may be subject to cyber-attacks from cybercriminals. Rapid changes in attack vectors makes it difficult to stop attacks and adapt to new threats. The Company must comply with severe security obligations, including maintaining network and system security, providing security patching, antivirus and malware detection and prevention services and intrusion detection and prevention as well as ensuring the credentials of those employees who work with the Company's customers. IT security breaches could lead to shutdowns or disruptions of the Company's systems and potential unauthorized disclosure of confidential information or data, including personal data. The Company may be required to expend significant capital or other resources to protect against the threat of security breaches or to alleviate problems caused by such breaches. The theft or unauthorized use or publication of confidential information or other proprietary business information, or any compromise of security that results in an unauthorized release, transfer or use of personally identifiable information or other customer data, could adversely affect the Company's competitive position and reputation, and reduce the market's acceptance of the Company's services and solutions. If the Company is unable to protect its digital structure from cyber-threats, this could have a material adverse effect on the Company's business, results of operations, financial condition, cash flows and/or prospects.
The Company business development is to a significant extent dependent upon key individuals that have obtained necessary and relevant experience. The Company may be unable to replace such individuals if and when needed on short notice and the loss of the services of management personnel or other key employees could therefore have a material adverse impact on the financial condition and prospects of the Company. The Company shall establish incentive programs designed to motivate employees for a long-term relationship with the Company to reduce the risk of losing personnel.
Although the Company seeks to maintain insurance or contractual coverage to protect against certain risks in such amounts as it considers reasonable, its insurance may not cover all the potential risks associated with the Company's operations, which could have a material and adverse effect on the Company's business, financial condition, results of operations and/or prospects.
The Company may in the future become involved in various disputes and legal, administrative and governmental proceedings in Norway and other jurisdictions that potentially could expose the Company to losses and liabilities.
The Company's planned expansion and future operations may be dependent on further equity injections and debt financing arrangements in order to be completed, and there is no assurance that the Company is able to raise sufficient financing to execute its current business plans. Such capital, whether in the form of debt or additional equity, may not be available on attractive terms, or at all. Further, any such development may expose the Company to additional costs and liabilities and require it to change the manner in which it conducts its business or otherwise have a material adverse effect on the Company's financial position, results of operations and/or prospects.
Foreign exchange rate fluctuations could affect the Company's financial condition, cash flow and results. The Company is targeting an international market and will earn revenue in foreign currencies. The Company does not use financial instruments to hedge its exposure to foreign exchange rate risks, and there is no guarantee that the Company's financial results will not be adversely affected by currency exchange rate fluctuations or that any efforts by the Company to engage in currency hedging activities will be effective. Currency exchange rate fluctuations, thus, could have a material adverse effect on the Company's performance in the future.
Risk and risk taking is inevitably linked to shareholding. Since an investment in shares may increase or decrease in value, there is a risk that investors will not recover a significant, or any, part of their invested capital. The price of the Company's Shares may be volatile, which could cause investors to lose all or a significant part of their investment. Securities markets have a high level of price and volume volatility, and the market price of securities of many companies have experienced wide fluctuations in price which have not necessarily been related to the operating performance, underlying asset values or prospects of such companies. It may be anticipated that any market for the Shares will be subject to market trends generally and the quoted price of the Shares on Euronext Growth Oslo may be affected by such volatility in response to numerous factors. Factors unrelated to the financial performance or prospects of the Company include macroeconomic developments, and market perceptions of the attractiveness of particular industries. Because of any of these factors, the market price of the securities of the Company at any given point in time may not accurately reflect the long-term value of the Company.
The price of the Company's Shares may in the future fluctuate significantly and rapidly as a result of, inter alia, the factors mentioned below:
The Company's ability to pay dividends is dependent on the availability of distributable reserves. The Company does not expect to pay dividends in the foreseeable future, and the Company may in the future be unwilling or unable to pay dividends.
The Company's strategy involves entering into customer, distribution, marketing, sales and other agreements with third parties across several jurisdictions. If the Company is to be successful, the Company will require such agreements to be entered into on commercially favorable terms. If the Company does not succeed in continuing to attract and retain new customers or partners, it could have a material adverse effect on its results of operations, financial condition, cash flows and prospects. Any circumstances that publicly damage the Company's goodwill, injure the Company's reputation or damage the Company's business relationships, may lead to a broader adverse effect than solely the monetary liability arising directly from the damaging events by way of loss of business, goodwill, clients, partners and employees.
The Company aims to expand its business both by organic growth and by acquisitions of other businesses. The successful integration of the future acquisitions into the Company's current business is important for the future growth and success of the Company. If this integration should prove more difficult than expected, or the acquired assets should prove less valuable for the Company than the Company's assessments, this could have a detrimental effect on the financial performance and value of the Company.
Unique software as a service solutions
Transparent end-to-end cloud-based API solutions
Saving time and cost while improving customer quality
20 expert consultants in strategic planning, implementation and post implementation support services. Implement automated algorithms based on the company's data and processes Technical solutions optimally, reduce time to market, saves costs.
| Consultancy | Service Offering | Calypso Services | |||
|---|---|---|---|---|---|
| • Project Management • Business Analyst • Migration Manager • Strategy Analyst • Technical Analyst • Test Management |
Product strategy ٠ Operations Center ٠ Capital Markets in the Cloud ٠ Automated Testing ٠ Performance Analysis ٠ |
• Project Business Analyst • Project Technical Analyst • Performance • Visigon Calypso Cloud |
Perfect symphony for delivering cutting edge digital solutions and direct market access to asset managers, custody banks, and trading platforms around the world
Regulatory licensed for complete offering in trading and asset management
HQ in Stavanger Local offices in Stockholm, Copenhagen, Oslo, Munich and Kuala Lumpur
John E. Skajem is the Chief Executive Officer of Huddlestock Fintech AS. John E. joined Huddlestock with a long carrier and experience from the financial industry. Over the years John E. has gained a thorough understanding of all aspects of the financial services industry. John E. has hands on experience from Investments Banks, Asset Managers to large global universal banks with management position while working in Chicago, NYC, London, Paris, and Oslo.
Gustav is a co-founder of Visigon and has been Nordic Group CEO since 2011. He has a strong background from both the technical side as well and the consultancy side of the business and has studied Physical Engineering and Business at Uppsala University.
Peter van Kleef is co-founder of Huddlestock Systems GmbH which developed Huddlestock's B2B platform for BNP Paribas. Peter has extensive experience in the asset management industry having initiated and supervised numerous large scale projects in the asset management and banking industry.
Petter is a co-founder of Visigon with a M.Sc in Engineering and a B.Sc. in Business from Uppsala University. He has a strong background in consulting and the financial industry with experience from many banks and financial institutions in the Nordics.
Nith is responsible for the business development and expansion in APAC. He holds a degree in B.Com (Accounting and Information Systems) from the University of New South Wales, Australia. He has worked in the Australian banking system and has spent 15 years in South East Asia founding startups and working in technology companies.
Lars joined Visigon in 2017 and has been instrumental in growing the Danish business. Lars has a M.Sc degrees Economics from University of Southern Denmark. He has taken many relevant courses at Copenhagen Business School and from London School of Economics. He has also earned a CFA Charter. Lars has a broad experience from banks and financial institutions in Denmark.
Øyvind is a serial entrepreneur with more than 20 years of experience in starting and scaling companies in various industries. Notably Cyviz AS – with offices globally, and Vision Io AS, a leading optic camera provider to the Oil and gas industry.
Murshid is an Executive Director and co-founder of Huddlestock. He is a PhD candidate in Economics, and holds a master's degree from Grenoble Ecole de Management, and a degree from NTNU. He has almost a decade of experience as an entrepreneur, primarily within the energy and financial industry.
Per Øyvind is an investor and entrepreneur in Norway, founding PXO, Quickflange and other successful companies. He has more than 20 years of experience from developing businesses and growing companies in various industries. He holds a Bachelor's degree in Financial Management from BI Business School.
Capital Markets – Asset & Wealth Management – Consulting - Trading – Custody Banking
Proforma Accounts
| Consolidated Profit (loss) statement pro-forma (NOK 1'000) |
2019P | 2020P | 2021E | 2022E | 2023E | 2024E |
|---|---|---|---|---|---|---|
| Fee income (Apex) | 0 | 225 | 4,828 | 23,613 | 64,845 | 109,889 |
| Transaction income (Bedrock) | 5,615 | 26,177 | 35,293 | 45,032 | ||
| Consultancy income (Visigon) | 22,342 | 40,780 | 40,678 | 42,712 | 44,848 | 47,090 |
| Total expenses | 26,717 | 44,171 | 45,817 | 47,554 | 51,425 | 54,232 |
| Salaries | 14,310 | 22,736 | 29,763 | 34,199 | 37,589 | 39,846 |
| Other operating expenses | 12,406 | 21,435 | 16,053 | 13,355 | 13,836 | 14,386 |
| EBITDA | -4,374 | -3,165 | 5,304 | 44,949 | 93,561 | 147,779 |
| EBITDA margin | n m |
n m |
10% | 49% | 65% | 73% |
| Depreciation | 0 | 0 | 434 | 489 | 540 | 561 |
| Net financials | -112 | -23 | -75 | -101 | -101 | -101 |
| Pre-tax profit | -4,487 | -3,188 | 4,795 | 44,360 | 92,921 | 147,117 |
| Taxes | -458 | -2,350 | -1,055 | -9,759 | -20,443 | -32,366 |
| Net profit | -4,945 | -5,538 | 3,740 | 34,601 | 72,479 | 114,751 |
| Net profit margin | n m |
n m |
7% | 37% | 50% | 57% |
| EPS (NOK) | n m |
n m |
0.03 | 0.29 | 0.60 | 0.95 |
* P: Pro-Forma; E- Estimated
| Consolidated Financial position pro-forma (NOK 1'000) |
2019P | 2020P | 2021E | 2022E | 2023E | 2024E |
|---|---|---|---|---|---|---|
| Total intangible assets | 21,248 | 65,260 | 64,827 | 64,338 | 63,799 | 63,237 |
| Research and development | 15,789 | 19,308 | 19,308 | 19,308 | 19,308 | 19,308 |
| Licenses | 5,459 | 45,952 | 45,519 | 45,030 | 44,490 | 43,929 |
| Total fixed assets | 3,174 | 1,707 | 1,707 | 1,707 | 1,707 | 1,707 |
| Total current assets | 26,190 | 35,442 | 40,710 | 85,914 | 180,120 | 328,978 |
| Receivables | 6,768 | 9,975 | 10,446 | 14,802 | 23,925 | 38,370 |
| Other assets | 5,750 | 13,409 | 13,409 | 13,409 | 13,409 | 13,409 |
| Bank deposits, cash and cash equivalents | 13,672 | 12,059 | 16,855 | 57,704 | 142,787 | 277,200 |
| Total assets | 50,611 | 102,410 | 107,244 | 151,960 | 245,626 | 393,923 |
| Total equity | 37,961 | 79,244 | 82,985 | 117,585 | 190,064 | 304,815 |
| Total long-term liabilities | 540 | 0 | 0 | 0 | 0 | 0 |
| Total short-term liabilities | 12,105 | 23,166 | 24,259 | 34,374 | 55,562 | 89,108 |
| Accounts payable | 1,791 | 5,584 | 5,848 | 8,286 | 13,393 | 21,480 |
| Other liabilities | 10,313 | 17,582 | 18,411 | 26,088 | 42,169 | 67,628 |
| Total equity and liabilities | 50,611 | 102,410 | 107,244 | 151,960 | 245,626 | 393,923 |
* P: Pro-Forma; E- Estimated
A digital breakthrough for custody banks, wealth management and online trading.
Proprietary technology solutions and cost-effective client services through the Apex and Bedrock solutions.
Expert consultancy offering strategic planning, pre- and post-implementation support services.
Accompanying you in the Nordics, across Europe and Asia.
John E. Skajem CEO +47 4188 7412 [email protected]
Øyvind Hovland Chairman +47 9096 6151 [email protected]
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