Market announcement

AS LHV Group

LEI code

529900JG015JC10LED24

Size of the entity

Large group

Economic activities

Financial and Insurance Activities

Industry sector(s)

Credit institution

Country of registered office

Estonia

General information

Categories

Other corporate action

Unique data record identifier

7765

Submission date and time

11.02.2020 08:00:00

Content of announcement in Estonian

Title

LHV Groupi 2020. aasta finantsplaan ja viieaastane finantsprognoos

Message

AS-i LHV Group käesoleva aasta finantsplaani järgi kasvavad konsolideerimisgrupi
tulud 2020. aastal 29% ja kulud 18%, mis annab konsolideeritud puhaskasumi
kasvuks tänavu 33%. Ärimahtude osas prognoosib LHV tänavuseks aastaks 28%
laenuportfelli kasvu, 25% hoiuste mahu kasvu ja 15% hallatavate fondide mahu
kasvu.

---------------------------------------------------------------
  Võtmenäitajad                       FP2020    2019         ?
---------------------------------------------------------------
  Maksude-eelne kasum                   42,0    31,3      +34%
---------------------------------------------------------------
  Laenud (mln eurot)                    2165    1687      +28%
---------------------------------------------------------------
  Hoiused (mln eurot)                   3127    2701      +16%
---------------------------------------------------------------
  Fondide maht (mln eurot)              1576    1374      +15%
---------------------------------------------------------------
  Kulu/tulu suhe                       48,5%   53,2%   -4,7 pp
---------------------------------------------------------------
  ROE (tulumaksueelne; omanike osa)    18,1%   16,2%   +1,9 pp
---------------------------------------------------------------
  Kapitali adekvaatsus                 17,5%   18,0%   -0,5 pp
---------------------------------------------------------------

((* Ärimahud toodud miljonites eurodes))

Finantsplaani järgi kasvab 2020. aastal LHV Groupi konsolideeritud laenude maht
478 mln euro võrra, sh ettevõtete panganduse laenud 209, jaelaenud 199 ning
finantsvahendajate laenud 70 mln euro võrra. Hoiuste kasv summas 426 mln eurot
on plaanitud peamiselt tavahoiuste arvelt summas 575 mln eurot,
finanstvahendajate hoiused kasvavad 224 mln eurot ja hoiuseplatvormide kaudu
kaasatud hoiused vähenevad 373 mln eurot (plaani järgi asendatakse need
pandivõlakirjadega summas 250 mln eurot). Fondide mahu kasv on seotud klientide
maksete jätkumisega, aga ka fondide tootlusega, mida suuremate fondide XL ja L
puhul on eeldatud 5,6%.

Kulu/tulu suhe on paranemas tänu Danske eraisikute portfelli lisandumisele
2019. aasta lõpus, mis suurendab kuiseid tulusid ligi 0,9 mln eur võrra. Kuivõrd
LHV Group on väljendanud soovi tehingu tarbeks kaasatud kallima hinnaga
välishoiused asendada 2020. aastal pandivõlakirjadega, vähendab see kulusid ja
mõjutab positiivselt kulu-tulu suhet. Eesmärgiks seatud 20% suurust maksude-
eelset omakapitali tootlust me finantsplaani järgi 2020. aastal ei saavuta, sest
ühe aastaga ei õnnestu asendada 2019. aasta septembris toimunud järsku
pensionifondide valitsemistasu langust.

LHV Groupi juhataja Madis Toomsalu kommentaar:
"Tänaseks on LHV-st kujunenud suurim ja kõige kiiremini kasvav kohalikul
kapitalil põhinev finantsgrupp ja kapitalipakkuja Eestis. Oleme jõudnud
igapäevapanganduses suuruselt kolmandaks pangaks Eestis ja jätkame suuruselt
teise pensionifondide valitsejana. Finantsprognoos väljendab selgelt meie
pikaajalisi kasvuambitsioone.

Eestis on meie eesmärgiks üle-eestiline suurenev kliendibaas. Vaatamata
klientide arvu jõudsale kasvule on meie eesmärgiks pakkuda kvaliteetseimat
teenindust. Eraisikutele pakume kodulaenu kõikides Eesti linnades, laia
sularahaautomaatide võrgustikku, tugevaid elektroonilisi kanaleid ning ainsa
pangana Eestis tasuta välkmakseid. Soovime saada ülekaalukaks turuliidriks
investeerimisteenuste osutamisel, senist terviklikuimat teenuste pakkumist
täiendavad Balti aktsiate tasuta kauplemis- ja hoidmisvõimalused. Ettevõtete
suunal oleme võimelised sisuliselt finantseerima kõiki Eesti ettevõtteid.

Ühendkuningriigi filiaali kaudu pakume finantsvahendajatele makseteenuste
infrastrukuuri koos reaalaaja euro- ja naelamaksetega, sobivatel tingimustel ka
likviidsuslaenusid. Ärisuuna lähiaastate eesmärgiks on laiendada ka
tooteportfelli ja kliendisegmente.

LHV Varahalduse eesmärgiks on pensionifondide kõrge tootluse saavutamine. Saame
keskenduda börsivälistele erakapitali- ja kinnisvarainvesteeringutele, mille
eeldatav tootlus on noteeritud väärtpaberite omast kõrgem. Kõrgema klientidele
saavutatud tootluse korral on võimalik edukustasu teenimise kaudu asendada ka
langenud valitsemistasu, kuid tootluse lühiperioodide raskesti ennustatavuse
tõttu ei ole me sellega finantsprognoosis arvestanud. Kuna nii tootlused kui ka
võrdlusindeks on avalikud, on seda investoritel siiski võimalik tinglikult
arvestada. Edukustasu teenimise korral kajastame seda tuludes korra aastas.

Meie edasisele kasvule loob hea baasi klientide rekordiline lisandumine alates
2019. aasta sügisest, Danske eralaenude portfellist lisanduvad tulud ning
paranev kulu-tulu suhe. Meie laenulimiidid suurenevad ning suudame finantseerida
üha suuremat hulka kliente. Laenude allahindlused oleme võtnud arvesse pigem
konservatiivsel tasemel."

Finantsprognoos 2020-2024

Ühtlasi avalikustab AS LHV Group järgmise viie aasta finantsprognoosi. Prognoosi
kohaselt kasvavad grupi tulud järgneval viiel aastal keskmiselt 19%, samal ajal
kui kulud kasvavad keskmiselt 11% aastas. Prognoosi kohaselt jõuab LHV
konsolideeritud puhaskasum 26%-lise keskmise aastakasvuga 2024. aastaks ligi 91
miljoni euroni.

-----------------------------------------------------------------------------
  Võtmenäitajad                   FP2019   FP2021   FP2022   FP2023   FP2024
-----------------------------------------------------------------------------
  Maksude-eelne kasum               42,0     51,1     69,3     87,2    104,4
-----------------------------------------------------------------------------
  Laenud                            2165     2706     3229     3754     4304
-----------------------------------------------------------------------------
  Hoiused                           3127     3830     4427     5209     6004
-----------------------------------------------------------------------------
  Fondide maht                      1576     1395     1571     1761     1967
-----------------------------------------------------------------------------
  Kulu/tulu suhe                   48,5%    47,6%    41,4%    38,4%    36,4%
-----------------------------------------------------------------------------
  ROE (maksueelne; omanike osa)    18,1%    20,5%    22,2%    23,4%    23,4%
-----------------------------------------------------------------------------
  Kapitali adekvaatsus             17,5%    18,1%    18,3%    18,9%    19,5%
-----------------------------------------------------------------------------

(* Ärimahud toodud miljonites eurodes)

Võrreldes 2019. aasta lõpuga peaksid viie aastaga laenude-, hoiuste- ja fondide
maht kasvama vastavalt 2617 mln, 3303 mln ja 593 mln euro võrra. Laenude ja
hoiuste puhul tähendab see mahtude kahekordistamist. Kulu-tulu suhte paranamine
on seotud suurema efektiivsusega, aga ka finantsvahendajate ärisuuna madalama
kulubaasiga. Prognoosi kohaselt mõjutab 2021. aasta tulemusi negatiivselt
pensionireform, mille tulemusena tuleb LHV Varahalduses allahinnata klientide
müügikuludega seotud immateriaalne vara. See allahindlus ei ole rahavooline ega
mõjuta omavahendeid. Alates 2021. aastast on eeldatud maksude-eelse omakapitali
taastumist üle 20% ning alates 2023. aastast on eesmärgiks puhaskasumil põhineva
omakapitali tootluse 20% suurune tase.

LHV Group avaldab viie aasta finantsprognoose sooviga jagada investoritele
läbipaistvalt ettevõtte pikaajalisi sihte ja trende. Viie aasta jooksul võib
ettevõte ja majanduskeskkond oluliselt muutuda.

LHV Group muudab 2020. aasta finantsplaani juhul, kui muutub tõenäoliseks
planeeritava puhaskasumi rohkem kui 10% ulatuses erinevus finantsplaanist. Viie
aasta prognoosi uuendab ettevõte taas 2021. aasta alguses või vajadusel koos
2020. aasta finantsplaani muudatustega.

Finantsplaanide investoreile ja ajakirjanikele tutvustamiseks korraldab LHV
pressibriifingu 11. veebruaril kell 11.00 LHV Tallinna kontoris (City Plaza,
Tartu mnt 2) 21. korrusel. Palume osalemisest teatada aadressil [email protected]
(mailto:[email protected]).

LHV Group on suurim kodumaine finantskontsern ja kapitali pakkuja Eestis. LHV
Groupi peamised tütarettevõtted on LHV Pank ja LHV Varahaldus. LHV-s töötab üle
440 inimese. LHV pangateenuseid kasutab üle 207 000 kliendi ja LHV hallatavatel
pensionifondidel on üle 176 000 aktiivse kliendi.


Priit Rum
LHV kommunikatsioonijuht
Telefon: 502 0786
E-post: [email protected] (mailto:[email protected])

Content of announcement in English

Title

LHV Group financial plan 2020 and five-year financial forecast

Message

According to the financial plan of AS LHV Group for this year, the revenues of
the consolidation group will increase by 29% and expenses by 18% in 2020,
resulting in a 33%-growth of consolidated net profit for this year. In terms of
business volumes, LHV estimates a 28% increase of the loan portfolio, 25%
increase in deposit volumes and 15% increase in assets under management for this
year.

-----------------------------------------------------------------
  Key indicators                        FF2020    2019         ?
-----------------------------------------------------------------
  Profit before taxes                     42.0    31.3      +34%
-----------------------------------------------------------------
  Loans (millions of euros)               2165    1687      +28%
-----------------------------------------------------------------
  Deposits (millions of euros)            3127    2701      +16%
-----------------------------------------------------------------
  Volume of funds (millions of euros)     1576    1374      +15%
-----------------------------------------------------------------
  Cost/income ratio                      48.5%   53.2%   -4.7 pp
-----------------------------------------------------------------
  ROE (before taxes, owners' share)      18.1%   16.2%   +1.9 pp
-----------------------------------------------------------------
  Capital adequacy                       17.5%   18.0%   -0.5 pp
-----------------------------------------------------------------

(* Business volumes have been presented in millions of euros)

According to the financial plan, the consolidated loan volumes of LHV Group in
2020 will increase by 478 million euros, including corporate loans by 209,
retail loans by 199 and loans to financial intermediaries by 70 million euros.
The growth in the deposit volumes of 426 million euros is planned mainly on the
account of regular deposits in the amount of 575 million euros, with the
deposits of financial intermediaries growing by 224 million euros, and those
included via deposit platforms decreasing by 373 million euros (according to the
plan, these will be replaced by covered bonds in the amount of 250 million
euros). The growth in the volume of funds is related to continued payments by
clients, but also to the rate of return of the funds, which for larger funds XL
and L is estimated at 5.6%.

The cost/income ratio is improving thanks to the added Danske portfolio of
private individuals at the end of 2019, which increases monthly revenues by as
much as 0.9 million euros. Insofar as LHV Group has expressed its wish to
replace the foreign deposits involved for this transaction at a higher price
with covered bonds in 2020, it will also lower the costs and have a positive
impact on the cost/income ratio. According to the financial plan, we will not
achieve the 20% pre-tax return on equity set as the target in 2020, since it
will not be possible to replace the sharp decline in the management fee of
pension funds that occurred in September 2019 in just one year.

Comment by Madis Toomsalu, the CEO of LHV Group:
"For today, LHV has become the largest and the fastest growing provider of
capital and financial group based on local capital in Estonia. We are now the
third largest bank in Estonia in everyday banking and continue to be the second
largest management company of pension funds. The financial forecast clearly
demonstrates our long-term growth ambitions.

In Estonia, we aim to achieve an Estonia-wide increasing customer base. Despite
the strong growth in the number of clients, it is our goal to provide top-
quality service. We offer home loans to private persons in all Estonian cities,
as well as a broad network of ATMs, strong electronic channels and as the only
bank in Estonia, free instant payments. We want to become an overwhelming market
leader in providing investment services; our most complete service offer so far
is supplemented by free trading and safekeeping options of Baltic shares. In the
direction of companies, in essence we are able to finance all large Estonian
companies.

Through our UK branch, we offer the payment services infrastructure to financial
intermediaries together with real-time euro and pound payments; as well as
liquidity loans on suitable conditions. The goal of our business side in the
coming years is to expand the product portfolio and client segments.

LHV Varahaldus aims to achieve a high rate of return of pension funds. We can
focus on OTC private capital and real estate investments, the estimated rate of
return of which is higher than listed securities. In the case of a higher rate
of return achieved for our clients, it is also possible to replace the lower
management fee by earning a success fee, however since the short periods of the
rate of return are difficult to forecast, we have not considered this in our
financial forecast. As both the rates of return as well as the benchmark index
are public, the investors may nevertheless notionally consider it. In the case
of generating the success fee, we will record it in revenues once a year.

A good foundation for our future growth is built on the record number of new
clients starting from autumn 2019, the revenues earned on the private portfolio
of Danske and the improving cost/income ratio. Our loan limits are increasing,
and we are able to finance an ever-growing number of clients. We have considered
the impairment of loans on a rather conservative level."

Financial forecast 2020-2024

AS LHV Group also discloses the financial plan for the next five years.
According to the forecast, the group's revenues will increase by 19% over the
next five years on average, while the expenses will increase on average by 11%
in a year. Based on the forecast, the consolidated net profit of LHV will be
nearly 91 million euros by 2024, considering the average annual growth of 26%.

---------------------------------------------------------------------
 Key indicators                    FF2019 FF2021 FF2022 FF2023 FP2024
---------------------------------------------------------------------
 Profit before taxes                 42.0   51.1   69.3   87.2  104.4
---------------------------------------------------------------------
 Loans                               2165   2706   3229   3754   4304
---------------------------------------------------------------------
 Deposits                            3127   3830   4427   5209   6004
---------------------------------------------------------------------
 Funds volume                        1576   1395   1571   1761   1967
---------------------------------------------------------------------
 Cost/income ratio                  48.5%  47.6%  41.4%  38.4%  36.4%
---------------------------------------------------------------------
 ROE (before taxes; owners' share)  18.1%  20.5%  22.2%  23.4%  23.4%
---------------------------------------------------------------------
 Capital adequacy                   17.5%  18.1%  18.3%  18.9%  19.5%
---------------------------------------------------------------------

(* Business volumes have been presented in millions of euros)

Compared to the end of 2019, the volume of loans, deposits and funds should
increase in five years by 2617 million, 3303 million and 593 million euros,
respectively. For loans and deposits, this means the duplication of volumes. The
improvement of the cost/income ratio is related to higher efficiency, but also
to the lower cost base of the financial intermediaries' line of business.
According to the forecast, the results of 2021 will be adversely affected by the
pension reform, as a result of which LHV Varahaldus will have to write down the
intangible assets related to the sales costs of clients. This impairment has no
cash flow and will not influence net own funds. Starting from 2021, we expect
the recovery of pre-tax equity to be over 20% and starting from 2023 aim to
reach the level of 20% for the net profit based return on equity.

LHV Group publishes five-year financial forecasts to share the company's long-
term targets and trends with the investors in a transparent way. The company as
well as the economic environment may change significantly in five years.

LHV Group will change the financial plan 2020 if a difference of more than 10%
between the planned net profit and the financial plan becomes probable. The
company will update the five-year plan again at the beginning of 2021 or, if
necessary, together with the changes made to the financial plan of 2020.

To introduce the financial plans to investors and the press, LHV organises a
press briefing at 11:00 on 11 February, at the Tallinn office of LHV (Cityplaza
building, Tartu mnt 2) on 21st floor. Please notify us of your participation via
email using the address [email protected] (mailto:[email protected]).

LHV Group is the largest domestic financial group and capital provider in
Estonia. LHV Group's key subsidiaries are LHV Pank and LHV Varahaldus. LHV
employs over 440 people. LHV's banking services are used by more than 207,000
clients, and pension funds managed by LHV have more than 176,000 active clients.



Priit Rum
Communication Manager
Phone: +372 502 0786
Email: [email protected] (mailto:[email protected])