INDEXO — Audit Report / Information 2022

Feb 28, 2023

INDEXO

Webinar on the audited consolidated financial results of 2022

Valdis Siksnis Chairman of the Board

March 1, 2023

Henrik Karmo Board Member

40% annual growth in the last 5 years

In April 2021 launched with automated investment decisions in index funds

Launched in 2017 as a and the in Latvia

In July 2022 held a for Bank business

Passive asset management delivers results

2022

State-funded pension scheme investment plan "INDEXO Izaugsme 47-57" 0.576% 0.651% 7.5 bps

State-funded pension scheme investment plan "INDEXO Jauda 16-50" 0.600% 0.648% 4.8 bps

State-funded pension scheme investment plan "INDEXO Konservatīvais 55+" 0.523% 0.557% 3.4 bps

OCF = ongoing cost figure, which represents all costs related to INDEXO and third-party fund manager costs

an-23	Dec-21	OCF improvement for clients
0.576%	0.651%	7.5 bps
0.600%	0.648%	4.8 bps
0.523%	0.557%	3.4 bps

Key 2022 Highlights

OCF decrease

32,2 k

1 INDEXO

584,9 million EUR Total value of AUM

99,7 k Total number of customers

Up to 7.5 bps

2,3 million EUR Commission income generated

Number of new customers

Commission income Dec 2021

Commission income Dec 2022

Dec 2022 customer retention Dec 2021 customer retention

Jauda pension plan switch to 100% equities was completed

75% Equities

100% Equities

Total asset management growth since inception has been excellent despite market turmoil

Data source: annual reports, manapensija.lv data, internal data

INDEXO

Total AUM In millions EUR

Total Clients thousands

Total Market shares

INDEXO: The fastest growing 2nd Pillar Pension Manager in Latvia

Change in number of 2nd Pillar clients during 2022

Data source: manapensija.lv

Change in 2nd Pillar AUM during 2022

Data source: manapensija.lv

r ●Swedbank ●SEB ●Citadele ●Luminor ●INDEXO ●INVL ●Integrum
nk	Citadele	Luminor
	707M	587M
	INDEXO	INVL
	575M	234M

2nd pillar pension asset and client 5-year growth

Our business growth in 2nd pillar can be attributed to growing monthly contributions and new customers joining INDEXO

Millions EUR, based on management estimates

464 Q4 2021

INDEXO

2nd Pillar pension waterfall chart Q4 2021 – Q4 2022

Q4 2021 Monthly contributions new clients

4.2 million euro in Dec 2021 6.5 million euro in Dec 2022

From: To:

Our 3rd pillar pension plans have had 1 full year of operations

Clients with automatic equity/bond allocation

		Jan – Dec
		2022
Commission and other income	EUR	2 277 620
Administrative and other expenses allocation	EUR	(783 893)
Operating income before client acquisition and other business project expenses	EUR	1 493 727
Client acquisition	EUR	(1 579 333)
Pension management operating result	EUR	(85 606)
Bank development expenses	EUR	(1 186 197)
Net income	EUR	(1 271 803)

Client acquisition is partially capitalized and should be viewed on a cash flow basis

1,6M

0,5M

Capitalized

Expensed

Cash flow invested

We have invested 1,2 million EUR in bank development

Selected key systems (Mambu core banking, Nets card Processing, Microsoft Dynamics CRM and ERP)

Key staff members recruited

Mobile app development in progress

Actively engaging customers in bank

product design

Licensing applications submitted to

Bank of Latvia

Simple for everyday user, customizable for power users Potential INDEXO credit card design

	Notes	Jan – Dec 2022	Jan – Dec 2021 Group
		Group
		EUR	EUR
Commission and fee income	2	2 277 620	1 602 021
Administrative expenses	10	(3 514 964)	(1 581 787)
Interest income calculated using the effective interest rate	3	2 495	-
Interest expense	4	(3 147)	(1 386)
Other operating expenses		(32 738)	(9 947)
Profit/(loss) before corporate income tax		(1 270 734)	8 901
Corporate income tax		(1 069)	-
Profit/(loss) for the period		(1 271 803)	8 901
Total comprehensive profit/(loss) for the period, attributable to shareholders for the period		(1 271 803)	8 901
Basic earnings per share	23	(0.36)	(0.00)
Diluted earnings per share	23	(0.33)	(0.00)

ASSETS

assets

	Notes	Dec	Dec
		2022	2021
		Group	Group
		EUR	EUR
ASSETS
Placements with financial institutions	6	7 231 123	1 162 841
Receivables	7	220 190	169 055
Prepayments	8	24 279	3 465
Contract acquisition costs	9	990 417	535 977
Other assets		6 937	2 828
Intangible assets	10	177 177	108 114
Property, plant and equipment and right-of-use of assets	10	81 870	47 713
Investments in subsidiaries	11	-	-
Investments in associates	12	49 000	-
Other securities and investments	13	11 663	11 663
TOTAL ASSETS		8 792 656	2 041 656
EQUITY AND LIABILITIES
Accrued liabilities	14	193 584	120 962
Trade payables	15	89 072	35 049
Taxes and national social insurance mandatory contributions	16	95 245	48 151
Lease liabilities	10	90 468	39 332
Other liabilities	17	233 046	143 899
Total liabilities:		701 415	387 393
Equity
Share capital	18	3 568 511	3 016 987
Share options		176 960	5 436
Share premium		7 062 908	77 175
Retained losses		(2 717 138)	(1 445 335)
Total equity		8 091 241	1 654 263
TOTAL EQUITY AND LIABILITIES		8 792 656	2 041 656

EQUITY AND LIABILITIES

Equity

Consolidated Statement of Changes in Equity

	Notes	Share capital	Share options	Share premium Retained losses		Total
		EUR	EUR	EUR	EUR	EUR
At 31.12.2020		3 016 987	5 436	77 175	(1 454 236)	1 645 362
Total comprehensive profit/(loss) for the period				l	8 901	8 901
At 31.12.2021		3 016 987	5 436	77 175	(1 445 335)	1 654 263
Increase in Share option reserves			171 524			171 524
Increase in Share capital after public listing	18	535 000		6 955 000		7 490 000
Increase in Share capital after share option exercise	3	16 524		30 733		47 257
Total comprehensive profit/(loss) for the period		l		l	(1 271 803)	(1 271 803)
At 31.12.2022		3 568 211	176 960	7 062 908	(2 717 138)	8 091 241

Cash flow from operating activities

(Decrease)/increase in cash and cash equivalents from operating activities before changes in assets and liabilities

	Notes	Jan – Dec 2022	Jan – Dec 2021
		Group	Group
		EUR	EUR
Cash flow from operating activities
Profit/(loss) before corporate income tax		(1 270 734)	8 901
Depreciation of PPE and amortisation of right-of-use assets	10	69 760	28 662
Amortisation of contract acquisition costs	9	139 277	65 977
Amortization of Share option reserves		171 524	-
Interest income		(2 495)	-
Interest expense	10	3 147	1 386
(Decrease)/increase in cash and cash equivalents from operating activities before changes		(889 521)	104 926
in assets and liabilities
Increase in receivables, prepayments, and other assets		(670 111)	(400 266)
Increase in accrued liabilities		76 330	60 419
Increase in trade payables and other liabilities		192 001	155 934
Corporate income tax		(1 069)	-
Increase/(decrease) in cash and cash equivalents from operating activities		(1 292 370)	(78 987)
Cash flow from investing activities
PPE purchases	10	(97 402)	(60 737)
Investments in subsidiaries	11	-	-
Investments in associated company share capital	12	(49 000)	-
Interest income received		750
Other securities and investments	13	-	(11 663)
Decrease in cash and cash equivalents from investing activities		(145 652)	(72 400)
Cash flow from financing activities
Share issue		7 537 257	-
Payment of principal of lease liabilities	10	(27 806)	(14 815)
Interest paid on lease liabilities	10	(3 147)	(1 386)
(Decrease)/increase in cash and cash equivalents from financing activities		7 506 304	(16 201)
(Decrease)/increase in cash and cash equivalents		6 068 282	(167 588)
Cash and cash equivalents at the beginning of the reporting period		1 162 841	1 330 429
Cash and cash equivalents at the end of the reporting period	6	7 231 123	1 162 841

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