INDEXO — Interim / Quarterly Report 2022

Aug 24, 2022

Unaudited Consolidated Interim results for the period of January – June 2022

24 August 2022

Valdis Siksnis Chairman of the Board

Henrik Karmo Board Member

In April 2021 launched the first 3rd Pillar robo-advisory product with automated investment decisions in index funds

INDEXO Story

Launched in 2017 as a challenger brand and the first passive pension manager in Latvia

In July 2022 held a successful IPO by raising 7.49 million EUR for Bank business development

We did a lot of work for the IPO

Significant changes were made in the management team

Valdis Siksnis Chairman of the Board and CEO

Ieva Margeviča Board Member

4

Henrik Karmo Board Member

Key Highlights

Total value of assets under management (AUM) 484,5 million EUR

Total number of customers 82,0 k

Commission income generated 1,0 million EUR

Number of new customers in 1H 2022 14,4 k

As of 30 June 2022

INDEXO: The Best 2nd Pillar Pension Manager at Attracting Clients Over the Last 12 months (12 811) (6 578)

(13 953)

INDEXO		20 007
Competitor 1	3 250
Competitor 2	395
(2 853)	Competitor 3
(6 578)	Competitor 4
	Competitor 5
	Competitor 6

Data source: manapensija.lv

Our revenues also keep growing quickly

0,7M

Commission income 1H 2021

Commission income 1H 2022

Less clients chose to leave INDEXO than in the previous year

June 2021 churn rate June 2022 churn rate

We managed to improve OCF

All-in cost for our 2nd pillar pension clients	31.07.2022	31.12.2021	OCF improvement for clients
INDEXO Jauda 16-50	0.607%	0.651%	4.4 bps
INDEXO Izaugsme 47-57	0.622%	0.648%	2.6 bps
INDEXO Konservatīvais 55+	0.525%	0.557%	3.2 bps

OCF = ongoing cost figure, which represents all costs related to INDEXO and third party service providers.

Jauda pension plan switch to 100% equities was completed

100% Equities

75% Equities

2nd pillar pension business continued strong growth despite market volatility

2nd pillar pension clients, thousands

365

Q2 2021 – Q2 2022 Our business growth in Millions EUR, based on management estimates 2nd pillar can be attributed to growing monthly contributions and new customers joining INDEXO

Q2 2021 – Q2 2022 Millions EUR, based on management estimates

3.3 million euro in June 2021 4.8 million euro in June 2022

45% increase From: To:

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

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

Asset management growth since inception has been excellent despite market turmoil

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

Total AUM

Total Clients

Total Market shares

Data source: annual reports, 1H 2022 report 16

AUM growth has ensured strong long-term revenue growth

INDEXO keeps investing in future growth by acquiring new clients

		Jan – Jun
		2022
		Unaudited
Commission income	EUR	1 039 552
Administrative and other expenses for pension	EUR	(409 070)
management
Operating income before client acquisition	EUR
and other business project expenses		630 482
Client acquisition	EUR	(773 275)
Pension management operating result	EUR	(142 793)
IPO expenses	EUR	(63 927)
Bank development expenses	EUR	(217 134)
Net income	EUR	(423 854)

IPO expenses will be fully recognized during Q3 2022

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

0,8M Expensed

Capitalized

Cash flow invested

indexo.lv/investors/

For a better financial environment in Latvia!

Consolidated Statement of Comprehensive Income

2022	Jan-Jun 2021
Unaudited	Unaudited
EUR	EUR
(423 854)	17 815

	Notes	Jan-Jun 2022	Jan-Jun 2021
		Unaudited	Unaudited
		EUR	EUR
Commission income	2	1 039 552	691 564
Interest expense	10	(642)	0
Administrative expenses	3	(1 458 197)	(670 897)
Other operating expenses	4	(4 567)	(2 852)
Profit/(loss) before corporate income tax		(423 854)	17 815
Profit/(loss) for the period		(423 854)	17 815
Total comprehensive profit/(loss) for the period, attributable to shareholders for the period		(423 854)	17 815
Earnings per share		(0.14)	0.01
Diluted earnings per share		(0.13)	0.01

Consolidated Statement of Financial Position

	Jun	Jun	Dec
Notes	2022	2021	2021
	Unaudited	Unaudited
	EUR	EUR	EUR

		Jun	Jun	Dec
	Notes	2022	2021	2021
		Unaudited	Unaudited
		EUR	EUR	EUR
ASSETS
Placements with financial institutions	5	740 120	1 233 041	1 162 841
Receivables	6	175 075	128 081	169 055
Prepayments	7	3 587	21 975	3 465
Contract acquisition costs	8	769 522	375 213	535 977
Other assets	9	4 706	2 829	2 828
Property, plant and equipment and right-of-use of assets	10	155 671	126 274	155 826
Other securities and investments	11	11 663	11 663	11 663
Total assets:		1 860 344	1 899 076	2 041 655

EQUITY AND LIABILITIES

Accrued liabilities	12	288 933	90 565	120 961
Trade payables	13	47 108	20 852	35 049
Taxes and national social insurance mandatory contributions		18 158	36 342	48 151
Lease liabilities	10	33 635	14 696	39 332
Other liabilities	14	188 985	73 444	143 899
Total liabilities:		576 819	235 899	387 392

Equity
Share capital	15	3 033 511	3 016 987	3 016 987
Share options		11 295	5 436	5 436
Share premium		107 908	77 175	77 175
Retained losses		(1 445 335)	(1 454 236)	(1 454 236)
Profit/(loss) for the year		(423 854)	17 815	8 901
Total equity and reserves:		1 283 525	1 663 177	1 654 263
TOTAL EQUITY AND LIABILITIES		1 860 344	1 899 076	2 041 655

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
Comprehensive income for the reporting period					17 815	17 815
At 30.06.2021		3 016 987	5 436	77 175	(1 436 421)	1 663 177
Comprehensive income for the reporting period		-	-	-	(8 914)	(8 914)
At 31.12.2021		3 016 987	5 436	77 175	(1 445 335)	1 654 263
Increase in Share option reserves			5 859			5 859
Increase in Share capital		16 524		30 733		47 257
Comprehensive income for the reporting period		0	0		(423 854)	(423 854)
At 30.06.2022		3 033 511	11 295	107 908	(1 869 189)	1 283 525

Consolidated Statement of Cash Flows

Cash flow from operating activities

(Decrease)/increase in cash and cash equivalents from operating activities before changes in assets and liabilities (337 527) 46 369

		Jan – Jun	Jan – Jun 2021 Unaudited
	Notes	2022
		Unaudited
		EUR	EUR
Cash flow from operating activities
Profit/(loss) before corporate income tax		(423 854)	17 815
Depreciation of PPE and amortisation of right-of-use assets	9	22 888	2 201
Amortisation of contract acquisition costs	8	56 938	26 353
Amortization of Share option reserves		5 859	0
Interest expense	10	642	0
(Decrease)/increase in cash and cash equivalents from operating activities		(337 527)	46 369
before changes in assets and liabilities
Increase in receivables, prepayments, and other assets		(298 502)	(102 117)
Increase/(decrease) in accrued liabilities		167 719	30 021
Increase/(decrease) in trade payables and other liabilities		26 849	(17 210)
Increase/(decrease) in cash and cash equivalents from operating activities		(441 461)	(42 937)
Cash flow from investing activities
PPE purchases	10	(21 635)	(42 788)
Other securities and investments	12	0	(11 663)
Decrease in cash and cash equivalents from investing activities		(21 635)	(54 451)
Cash flow from financing activities
Share issue		47 257	0
Payments for the right-of-use of assets	10	(6 240)	0
Interest on the right-of-use asset liabilities	10	(642)	0
(Decrease)/increase in cash and cash equivalents from financing activities		40 375	0
Decrease in cash and cash equivalents		(422 721)	(97 388)
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	5	740 120	1 233 041

Increase/(decrease) in cash and cash equivalents from operating activities (441 461) (42 937)

Cash flow from investing activities

Decrease in cash and cash equivalents from investing activities (21 635) (54 451)