Initiating Coverage of Nordnet (Hold) and Avanza (U/P)

Research evidence excerpt

Initiating Coverage of Nordnet (Hold) and Avanza (U/P)

y, Avanza will face retail market with well-established incumbents, 300 30 250

including Nordnet. 200 2520

150 15

100 10

Avanza's expansion plan may have higher execution risk: Avanza is building a new platform 500 50

from scratch using AI in order to have a bespoke new offering for the Danish market. Its launch 21Sep 21Dec 22Mar 22Jun 22Sep 22Dec 23Mar 23Jun 23Sep 23Dec 24Mar 24Jun 24Sep 24Dec 25Mar 25Jun 25Sep 25Dec 26Mar 26Jun

Price P/Ein Denmark is expected to cost SEK 340m-380m over three years, vs SEK 200m-230m for .

Nordnet's in Germany. We much prefer Nordnet's set-up. If both launches go to plan, Nordnet's Source: FactSet, Jefferies

will be cheaper, faster and have a bigger prize. It also has experience of international expansion,

Exhibit 3 - ...while Nordnet's has been firmer.

which Avanza does not. 400 45

350 40

30Our base case forecasts for Nordnet are higher-growth, and its distribution policy is 300250 35 25

preferable: Even before factoring in much of a tailwind from Germany, we have 11% EPS CAGR 150 2015

to 2028 at Nordnet, vs 8% at Avanza. That gap has more risk of widening than narrowing, in our 10050 105

view. The companies' profit distributions are subtly different because of capital management. 0 21 21 22 22 22 22 23 23 23 23 24 24 24 24 25 25 25 25 26 26 0

Nordnet manages its capital to a 4-4.5% leverage ratio (5.1% at 31 Dec 25) and has bought Sep Dec Mar Jun Sep Dec Mar Jun Sep PriceDec Mar JunP/ESep Dec Mar Jun Sep Dec Mar Jun

back SEK 1bn of shares in the last 18 months. It aims to pay out 70% of profits in dividends, .Source: FactSet, Jefferies

but usually pays closer to 75%. Avanza also has a 70% pay-out policy, but exceeds that rather

than buying back shares.