SAFELLO GROUP AB Stockholm 2025
Interim Report
First Quarter 2024 (1 January - 31 March 2024)
Safello Group AB (publ) | Interim Report First Quarter 2024
Corp.ID. 556892-3550
Safello delivers a historically strong quarter
Summary of the first quarter (Jan-Mar 2024)
- Net turnover increased by 40 % and amounted to SEK 193.1 million (138.1).
-
Gross profit increased by 24 % and amounted to SEK 14.1 million (11.4), including a profit from the sale of long-term crypto assets of SEK 0.7 million (0.0).
Why gross profit increased less than the net turno- ver is primarily due to inventory change in the period contributing with SEK 1.7 million compared to SEK 2.1 million in the same period in prior year, as well as increased costs for transaction fees to payment ser- vice providers, which have been implemented with the aim to strengthen the financial infrastructure on the platform. - Operating profit before depreciation and amortiza- tion (EBITDA) amounted to SEK 4.7 million (1.4).
- Operating profit amounted to SEK 4.7 million (3.0), impacted by a SEK 0.5 million (2.5) reversal of earlier write-downs on long-term crypto holdings. The mar- ket value of the company's long-term crypto assets now exceeds their book value, with an unrealized profit of SEK 6.7 million as of the end of the quarter.
- Net profit in the period amounted to SEK 4.7 million
(3.0).
- Earnings per share based on the average number of shares (20,449,600 shares) amounted to SEK 0.23
(0.15). - Earnings per share based on the average number of shares after potential dilution (21,440,668 shares) amounted to SEK 0.21 (0.14).
- The Group had a cash balance of SEK 18.6 million (SEK 17.3 million at year end 2023) at the end of the first quarter and in addition 15.3 BTC (17.8) and 110.2 ETH (110.2) in liquid crypto assets. The book value of the crypto assets was SEK 9.2 million (9.7) and the mar- ket value was SEK 15.9 million (10.1) as of the end of the first quarter, corresponding to an unrealized profit of SEK 6.7 million (0.4) at the end of the quarter. The change in book value during the period is mainly due to the parent company liquidating 2.5 BTC, resulting in a profit SEK of 0.7 million (0.0).
- The number of orders decreased by -18 % to 52,234 or- ders (63,158).
- The number of total active users amounted to 28,339
(34,605) and new active users amounted to 6,831
(11,185).
Volume from crypto trading (KSEK)
220 000 | ||||
165 000 | ||||
110 000 | ||||
55 000 | ||||
0 | Q1 | Q2 | Q3 | Q4 |
2024 | 2023 | 2022 | 2021 |
Number of crypto orders
70 000 | ||||
52 500 | ||||
35 000 | ||||
17 500 | ||||
0 | Q1 | Q2 | Q3 | Q4 |
2024 | 2023 | 2022 | 2021 |
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Safello Group AB (publ) | Interim Report First Quarter 2024 Corp.ID. 556892-3550
Events in the period
Significant events during the first quarter
No significant events during the first quarter.
Other events in the quarter
At the beginning of the year, Safello entered into an agreement with the Nordic Blockchain Association (NBA) for an official partnership. NBA, which is a non-profit orga- nization, is the largest professional web3 network in the Nordics. The organization is dedicated to fostering innovation and growth within the blockchain industry as well as facilitating the largest professional web3 network in the Nordics.
In January, Safello launched the feature for customers to place a sell order and receive a payout via Swish. Pre- viously, customers selling cryptocurrency had their funds transferred via bank transfers, which took at least one banking day. The new feature significantly improves the payout process on Safello's platform, as all sell orders up to 150 KSEK will be paid out approximately three times faster.
As of February, the business relationship with Handels- banken has been completely terminated in accordance with what was previously communicated and Safellos has transitioned to its new Swedish banking partner. The migration took place in accordance to plan and without any negative operational impact.
In February, Safello launched "Kryptopodden," a topical news podcast about cryptocurrencies, decentralized fi- nance, and the financial market. The podcast will offer listeners both knowledge and insights by regularly inviting well-known figures from both the crypto and finance industries as guests to analyze and discuss the latest events in the crypto world.
In March, Safello launched "swapping," a new feature for trading between cryptocurrencies, which allows users to exchange one cryptocurrency for another directly in the mobile application, without involving fiat currencies (such as SEK) in the transaction.
In March, the Swedish Customs Services extended its framework agreement with Safello for an additional year from the end of the current contract period, September 8, 2024, to September 8, 2025. The extension is on unchanged contract terms. The framework agreement meets the Swedish Customs Services' need for cryptocurrency exchange on a national basis. The Swedish Customs Service has the option to extend the contract for two additional twelve-month periods.
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Safello Group AB (publ) | Interim Report First Quarter 2024
Corp.ID. 556892-3550
Events after period end
Significant events after the end of the reporting period
On April 17, Safello published a reverse profit warning due to the strong increase in EBITDA and operating profit during the first quarter of 2024. The background to the increase in earnings during the first quarter of 2024 is mainly increased income attributable to withdrawal fees (fees for transferring cryptocurrency from the platform) and transaction fees, linked to the strong price development of Bitcoin and other crypto-assets. Historically, the first quarter has been one of the stronger quarters on an annual basis, affected by seasonality. The company's results are also strongly linked to the current market situation for crypto-assets, which will continue to apply and may lead to fluctuations in the company's results between quar- ters, in addition to seasonal variations.
On May 8, Safello's annual general meeting was held in Stockholm. The main decisions are stated in the communication from the annual general meeting on May 8 on the company's website. The annual general meeting decided, among other things, on the re-election of Frank Schuil, Jacob Jacobsson, Sepehr Alavi, and Viktor Fritzén as board members. Frank Schuil was re-elected as chairman of the board. The annual general meeting also decided on the introduction of a long-term incentive program for employees and/or consultants through a directed issuance of subscription options to the participants, as well as authorization for the board to decide on the issuance of shares or convertibles.
Other events after the end of the quarter
SDuring April and May, Safello gradually added several cryptocurrencies to its portfolio, including Aave (AAVE), Avalanche (AVAX), Bitcoin Cash (BCH), Cardano (ADA), Compound (COMP), Dogecoin (DOGE), Fantom (FTM), Litecoin (LTC), Maker (MKR), Near Protocol (NEAR), The Sandbox (SAND), Solana (SOL) and The Graph (GRT). The newly added cryptocurrencies have long been requested by Safello's customers. In selecting these currencies, Sa- fello has followed strict guidelines within the framework of the company's project management, taking into account factors such as liquidity, blockchain traceability, and how long the product has been on the market.
The Swedish Police Authority extended its framework agreement with Safello from the end of the current contract period, September 3, 2024, to September 3, 2025, and the extension is made on unchanged contract terms. The framework agreement meets the Swedish Police Authority's need for cryptocurrency exchange on a national basis. The Swedish Police Authority has the option to extend the contract for two additional twelve-month periods.
Emelie Moritz, CEO of Safello, is one of 75 young executives and leaders selected when Sweden's management organization Ledarna ranks "Future Female Leaders." The purpose of the award is to highlight the importance of a gender-equal management market and to promote outstanding women as managerial role models. The winner will be announced on Thursday, May 16, and published on ledarna.se/fkl.
Furthermore, at the end of April, Safello entered into a framework agreement with the Swedish Economic Crime Authority. The framework agreement between the parties was concluded following a public procurement process conducted by the Swedish Police Authority to meet the needs of the Swedish Police Authority, the Swedish Customs Service, and the Swedish Economic Crime Authority for cryptocurrency services, which Safello won in August 2023.
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Safello Group AB (publ) | Interim Report First Quarter 2024
Corp.ID. 556892-3550
Results Summary for the Group
Below are key ratios for the quarter and compared to the same period prior year as well as the most recent full year.
Results Summary
Group
Jan-Mar | Jan-Mar | Jan-Dec | |
2024 | 2023 | 2023 | |
Net turnover (KSEK) | 193,053 | 138,058 | 561,110 |
Gross Profit (KSEK) | 14,095 | 11,39 | 35,74 |
Gross margin (%) | 6.6 % | 8.0 % | 6.2 % |
EBITDA (KSEK) | 4 690 | 1,448 | −2,022 |
EBITDA margin (%) | 39.1 % | 15.5 % | -5.9 % |
Operating Profit/loss (KSEK) | 4,704 | 2,982 | −350 |
Net profit/loss (KSEK) | 4,729 | 2,978 | −447 |
Earnings per share before dilution | 0.23 | 0.15 | -0.02 |
Earnings per share after dilution | 0.21 | 0.14 | -0.02 |
Total number of active customers (number) | 28,339 | 34,605 | 110,596 |
New active customers (number) | 6,831 | 11,185 | 31,928 |
Average order value - buy orders (SEK) | 2,601 | 1,755 | 1,970 |
Average order value - sell orders (SEK) | 9,022 | 6,304 | 11,213 |
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Safello Group AB (publ) | Interim Report First Quarter 2024
Corp.ID. 556892-3550
Key Metrics and Graphs
Number of Crypto orders and order volume per quarter1 | Number of deposits and number of withdrawals1 |
70,000 | 220,000 | 60,000 | |||||||||||||||||||||||||||||
52,500 | 165,000 | 45,000 | |||||||||||||||||||||||||||||
35,000 | 110,000 | KSEK | 30,000 | ||||||||||||||||||||||||||||
17,500 | 55,000 | 15,000 | |||||||||||||||||||||||||||||
0 | -21 | 0 | 0 | ||||||||||||||||||||||||||||
-21 | -21 | -21 | 22 | 22 | 22 | 22 | 23 | 23 | 23 | 23 | 24 | -22 | -22 | -22 | -22 | -23 | -23 | -23 | -23 | -24 | |||||||||||
Q1 | Q2 | Q3 | Q4 | - | - | - | - | - | - | - | - | - | |||||||||||||||||||
Q1 | Q2 | Q3 | Q4 | Q1 | Q2 | Q3 | Q4 | Q1 | Q1 | Q2 | Q3 | Q4 | Q1 | Q2 | Q3 | Q4 | Q1 |
Number of orders | Number of deposits | |
Order volume | Number of withdrawals | |
Gross profit and gross margin (%) | EBITDA & operating cash flow |
13,000 | 8 % | 7,000 | 7,000 | |||||||||||||||||||||||||||||||||||
KSEK | 9,750 | 6 % | KSEK | KSEK | 3,500 | 3,500 | KSEK | |||||||||||||||||||||||||||||||
6,500 | 4 % | 0 | 0 | |||||||||||||||||||||||||||||||||||
3,250 | 2 % | −3,500 | −3,500 | |||||||||||||||||||||||||||||||||||
0 | 21 | 21 | 21 | 21 | -22 | -22 | -22 | -22 | -23 | -23 | -23 | -23 | -24 | 21 | 21 | 21 | 21 | -22 | -22 | -22 | -22 | -23 | -23 | -23 | -23 | -24 | ||||||||||||
- | - | - | - | - | - | - | - | |||||||||||||||||||||||||||||||
Q1 | Q2 | Q3 | Q4 | Q1 | Q2 | Q3 | Q4 | Q1 | Q2 | Q3 | Q4 | Q1 | Q1 | Q2 | Q3 | Q4 | Q1 | Q2 | Q3 | Q4 | Q1 | Q2 | Q3 | Q4 | Q1 |
Adjusted gross profit | EBITDA | |
Adjusted gross margin (%) | Operating cash flow | |
Active and new customers2 | Cash and Long-term Crypto assets |
40,000 | |||||||
30,000 | KSEK | ||||||
20,000 | |||||||
10,000 | |||||||
0 | |||||||
-22 | -22 | -22 | -23 | -23 | -23 | -23 | -24 |
Q2 | Q3 | Q4 | Q1 | Q2 | Q3 | Q4 | Q1 |
Active customers - new signups | |||||||
Active customers - existing |
40,000
30,000
20,000
10,000
0
−10,000
-22 | -22 | -22 | -22 | -23 | -23 | -23 | -23 |
Q1 | Q2 | Q3 | Q4 | Q1 | Q2 | Q3 | Q4 |
Unrealized crypto asset gain/loss at period end Crypto assets
Cash and cash equivalents
-24 Q1
Bitcoin (BTC) price chart the first quarter3
800,000 | ||||||||||||||||||||||||||||||||||
SEK | 600,000 | |||||||||||||||||||||||||||||||||
400,000 | ||||||||||||||||||||||||||||||||||
200,000 | ||||||||||||||||||||||||||||||||||
01 | -02 | -06 | -07 | -09 | 10 | 12 | 13 | 14 | 16 | 17 | 19 | -20 | 21 | 31 | ||||||||||||||||||||
- | - | - | - | - | - | - | - | - | - | |||||||||||||||||||||||||
-01 | -02 | -03 | -04 | -05 | -06 | -07 | -08 | -09 | -10 | 11 | -12 | -01 | -02 | -03 | ||||||||||||||||||||
- | ||||||||||||||||||||||||||||||||||
2023 | 2023 | 2023 | 2023 | 2023 | 2023 | 2023 | 2023 | 2023 | 2023 | 2023 | 2023 | 2024 | 2024 | 2024 | ||||||||||||||||||||
Ethereum (ETH) price chart the first quarter3
50,000 | ||||||||||||||||||||||||||||||||||
SEK | 37,500 | |||||||||||||||||||||||||||||||||
25,000 | ||||||||||||||||||||||||||||||||||
12,500 | ||||||||||||||||||||||||||||||||||
01 | -02 | -06 | -07 | -09 | 10 | 12 | 13 | 14 | 16 | 17 | 19 | -20 | 21 | 31 | ||||||||||||||||||||
- | - | - | - | - | - | - | - | - | - | |||||||||||||||||||||||||
-01 | -02 | -03 | -04 | -05 | -06 | -07 | -08 | -09 | -10 | 11 | -12 | -01 | -02 | -03 | ||||||||||||||||||||
- | ||||||||||||||||||||||||||||||||||
2023 | 2023 | 2023 | 2023 | 2023 | 2023 | 2023 | 2023 | 2023 | 2023 | 2023 | 2023 | 2024 | 2024 | 2024 | ||||||||||||||||||||
1 Based on Safellos internal data. | |
2 Based on Safellos internal data, where the measurement period began in Q2-22. | |
3 https://www.coingecko.com/ and https://www.riksbank.se/sv/statistik/sok-rantor--valutakurser/ | 6 |
Safello Group AB (publ) | Interim Report First Quarter 2024 Corp.ID. 556892-3550
CEO Letter
Dear shareholder,
The cryptocurrency market has been strong this year, and at the end of the first quarter, the world's largest crypto- currency, Bitcoin, reached a new record of over $71,000. Institutional interest in Bitcoin investments has increased following the launch of eleven American bitcoin Exchange Traded Products (ETFs) in January this year. The investment managers Blackrock and Fidelity have also included a small exposure to Bitcoin in some of their traditional ETFs. As a result of increased institutional interest and the talked-about halving of Bitcoin's mining rate, the cryp- tocurrency market has been hot during the first quarter.
Following the completion of the migration of banking services from Handelsbanken, Safello has focused on product development. During the first quarter of the year, a function for swapping cryptocurrencies at a market-leading price with a fee of 0.49 % was launched. Several new cryptocurrencies have been added to the offering to meet customer demand and with the ambition to increase activity on the platform. We have also streamlined the sell order flow by implementing Swish payout of sell orders, meaning a sell order is paid out up to three times faster than before. Safello's ambition is to open up the world of decentralized finance to everyone in a simple and secure way, and a key part of that work is to make the product accessible and attractive to the general public.
The framework agreements entered into with the Swedish Police Authority and the Swedish Customs Service in the autumn of 2023 have been extended, and after the end of the first quarter, the Swedish Economic Crime Authority has also chosen to enter into a framework agreement with Safello. We look forward with confidence to continued cooperation with three of the country's largest au- thorities, as their exclusive provider of cryptocurrency exchange services in their crime-fighting efforts.
Safello's result for the first quarter was the best in the company's history. The result was driven by larger volumes combined with historically high prices in the crypto- currency market. The quarterly report shows that we have fewer but larger orders, a trend that seems to be conti- nuing. The second quarter of the year has started strong, but from experience, we know that the summer months historically implies lower activity among investors, which could affect the results for the second and the third qu- arter.
Our focus going forward is to continue working aggressively on growth both in terms of volume and the number of new customers, as well as product development. We also strive to engage existing customers and activate new customers to drive growth, and our goal is to reach one million customers. Ernst & Young published the Nordic Crypto Adoption Survey report in early April, according to which the cryptocurrency market in the Nordic region is facing significant growth, which Safello is ready to address.
Kind regards
Emelie Moritz, VD
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Safello Group AB (publ) | Interim Report First Quarter 2024 Corp.ID. 556892-3550
Business Overview
Safello offers a brokerage platform for both individuals and businesses, enabling them to securely buy and sell cryp- tocurrency with SEK and EUR. Through Safello's platform, customers can also store, exchange (swap), transfer, and receive cryptocurrency. Safello's selection includes the largest cryptocurrencies Bitcoin (BTC) and Ethereum (ETH), as well as a range of other cryptocurrencies. Safello always strives to expand its product range to meet market demand.
The name Safello originates from "Safe Fellow," implying a trustworthy person to follow into the cryptocurrency eco- nomy. The company's philosophy is to strengthen financial independence by involving people in the decentralized economy. Safello achieves this by bridging the traditional financial economy and the ecosystem of digital assets. This philosophy forms an important foundation of the business.
As of March 31, Safello had over 368,000 customers (358,000 customers per 31 December 2023) and had handled 1,077,000 orders (1,025,000), equivalent to a volume of SEK 2,937 million (2,754).1 The number of active customers in the first quarter was 28,339 (34,605), and the number of new registered customers was 6,831 (11,185).
In the first quarter, order volumes2 amounted to SEK 183.7 million, compared with SEK 133.3 million in the corresponding period prior year, representing an increase of 38 %. The order volume was SEK 44.8 million (42.4) in January, SEK 67.7 million (40.7) in February and SEK 71.2 million (50.2) in March.
Number of | Number of orders | Volume |
customers | cumulatively per | cumulative per |
cumulatively per | 2024-03-31 | 2024-03-31 |
2024-03-31 | (MSEK) | |
368,000 | 1,077,000 | 2,937 |
Number of | Number of orders | Volume |
customers | cumulatively per | cumulative per |
cumulatively per | 2023-12-31 | 2023-12-31 |
2023-12-31 | (MSEK) | |
358,000 | 1,025,000 | 2,754 |
1 Based on Safello's internal data, since inception in 2013, rounded off to nearest thousand in SEK 2 Based on Safello's internal data, rounded off to the nearest thousand in SEK.
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Safello Group AB (publ) | Interim Report First Quarter 2024
Corp.ID. 556892-3550
Comments about the period
Results and development during the First Quarter 2024 (Group)
The amount in brackets refers to the corresponding period of the previous year unless otherwise stated.
Net turnover
Net turnover for the first quarter amounted to SEK 193.1 million (138.1). Net turnover refers to Safello's sale of cryptocurrency in inventory, fees on completed transactions and somewhat revenue from affiliates.
The gross margin amounted to 7.3% (8.3) in the period, and the adjusted gross margin amounted to 6.6% (8.0). The decrease in gross margin is mainly due to inventory changes during the period and increased costs for transaction fees to payment service providers, which is a result of efforts to strengthen the financial infrastructure on the platform.
Activated work for own account
Capitalized work for own account amounted to SEK 0.2 million (0.0) in the period.
Other operating income
Other operating income amounts to SEK 1.2 million (0.4) in the period, of which SEK 0.5 million (0.4) refers to exchange rate gains on operating receivables and operating liabilities and SEK 0.7 million (0.0) is attributable to profit on the sale of 2.5 BTC of the company's long-term crypto assets. The sale sum of the crypto assets amounted to SEK 1.7 million and it was the first sale made of the com- pany's long-term crypto investments.
Gross profit and gross margin
The gross profit amounted to SEK 14.1 million (11.4) and the gross profit was affected by changes in the inventory value of cryptocurrency, which in the period contributed SEK 1.7 million (SEK 2.1 million). See also the section "In- ventory" for more information. Furthermore, capitalized work for own account contributed SEK 0.2 million (0.0) to the gross profit in the period, and other operating income accounts for SEK 1.2 million (0.4). Adjusted gross profit amounted to SEK 12.7 million (11.0).
Operating expenses
Total operating expenses during the quarter amounted to SEK 9.4 million (9.9). Of these, personnel costs amounted to SEK 5.7 million (6.2), which corresponds to a decrease of -9 % compared to the same period last year, which can be attributed to two fewer employees. The remaining part consists of other operating costs, which amounted to SEK 3.7 million (3.7).
Operating profit/loss
Operating profit for the first quarter amounted to SEK
4.7 million (3.0). The background to the increase in ear- nings in the first quarter of 2024 is mainly increased inco- me attributable to withdrawal fees (fees for transferring cryptocurrency from the platform) and transaction fees, linked to the strong price development of Bitcoin and other crypto assets.
Net income
Profit/loss after tax for the first quarter amounted to SEK 4.7 million (3.0).
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Safello Group AB (publ) | Interim Report First Quarter 2024 Corp.ID. 556892-3550
Financial standing
The amount in brackets refers to the end of the prior period (31 of December 2023) unless otherwise stated.
Goodwill and intangible fixed assets
Goodwill amounted to SEK 3.2 million as of 31 March (4.9) and represents the surplus value in connection with the acquisition of Rational Money AB minus depreciation. Goodwill amortization is made linearly over 5 years.
Cryptocurrencies classified as intangible assets are investments in liquid bitcoin and ether holdings booked at acquisition value. As of March 31, the book value of the investments amounted to SEK 9.2 million (9.7) and the acquisition value of the investments amounted to SEK 9.2 million (10.1). Safello made a reversal of prior write-downs of SEK 0.5 million to reflect the market value in the first quarter. The market value at the end of the first quarter amounted to SEK 10.1 million, which means an unrealized increase in value of SEK 0.9 million. Safello may adjust the book value in the future if the change is deemed significant and reflects a long-term lasting value.
Intangible fixed assets amounted to SEK 0.8 million (0.7) as of 31 March. The balance sheet item refers to capitalized expenses for development work in Safello Technology Development AB. During the first quarter, costs for development work was capitalized of SEK 0.2 million (SEK 0.0 million corresponding period last year).
Inventory
Inventories refers to cryptocurrencies for sale in the bu- siness. As of 31 March, inventories amounted to SEK 6.3 million (3.8). The stock of cryptocurrencies is traded with high frequency and Safello mainly holds a stock of the cryptocurrencies that are part of the company's offering. Inventory levels are adapted to facilitate daily operations while minimizing exposure and price risk linked to cryp- tocurrency. The inventory is valued at the lower of acquisition value and net acquisition value, and the change in inventory has in the first quarter affected the gross profit by SEK 1.7 million (SEK 2.1 million corresponding period last year).
Current Receivables
Short-term receivables amounted to SEK 8.0 million (5.5) as of March 31. The item consists of other short-term receivables amounting to SEK 7.1 million (4.1), as well as interim receivables of SEK 0.9 million (1.3). The other short- term receivables mainly refers to Safello having liquidity
(in EUR or in other fiat currencies) with counterparties, for example other cryptocurrency trading platforms. The increase in this item is largely due to the addition of payment solutions on the platform, resulting in Safello having claims on payment service providers.
Cash and cash equivalents
Cash as of 31 March amounted to SEK 18.6 million (17.3). Cash and cash equivalents are only fiat and exclude cryp- to holdings and liquidity held at crypto liquidity providers, hence these are classified as current receivables.
Equity
As of 31 March, equity amounted to SEK 39.1 million (34.4). The change of SEK 4.7 million since the end of the prior period is related to the result in the period.
Current liabilities
Current liabilities consist of ongoing crypto transactions, accounts payable and other liabilities such as VAT, taxes and fees, holiday pay liabilities and VAT. As of March 31, current liabilities amounted to SEK 7.5 million (6.7). The increase is mainly attributable to more ongoing crypto transactions at the end of the period.
Cash flow
The amount in brackets refers to the corresponding period of the previous year unless otherwise stated.
Cash flow from operating activities amounted to SEK -0.2 million (-1.5). Change in working capital affected cash flow by SEK -4.2 million (-3.0), where change in inventory stood for SEK -2.4 million and net change in short-term receivables/liabilities affected by SEK -1.7 million in the period.
Cash flow from investment activities amounted to SEK 1.6 million (-0.1) and is mainly attributed to the sale of long- term crypto assets.
Total cash flow for the first quarter amounted to SEK 1.3 million (-1.6).
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Safello Group AB published this content on 17 May 2024 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 17 May 2024 06:05:05 UTC.
