Multitude AG (0R4W) Earnings Call Transcript

Good morning, everyone. On behalf of [indiscernible], welcome to the Multitude H1 2022 Results Earnings Call. Today, we will hear presentation regarding the H1 results by the CEO Jorma Jokela; and the CFO, Bernd Egger. [Operator Instructions] Let me now hand over to you, Jorma.

Good morning, everybody. My name is Jorma Jokela, CEO and the Founder of Multitude Group. And today, I have a pleasure to go through with you our first 6 months performance and result. We have two different changes here at the conversion on the previous earnings call. But the first one, we have a little bit changed the format on the presentation, a little bit simplify to come out from this -- our strategy presentation for what we do in the last year and try to more like simplify the presentation form. And the second one, but in the first time ever, we will give the target related or the financial targets on the coming years on our three different business tribe or business unit. So those are two bigger changes, but let's start to go through the numbers there. It's -- so let's jump to the first slide. So we have it Multitude to solid performance, solid result despite the market environment. Our revenue in the Q2 was EUR 53.5 million, 2.1% year-on-year growth. Our lending portfolio growing to EUR 477 million, what is the -- over 23% growth year-on-year and EBIT was growing slightly around EUR 1 million, ending the EUR 6.5 million. Payment behavior remains robust, and we have a stable cash position, but we have been reduced over the last 6 months, what is the part of our plan to reduce the cash position there. And when we look in the future -- now when we look in our -- this end of this year, we want to reconfirm our EBIT guidance of EUR 30 million to deliver over this year. And how we've been doing that; one, what are our focus areas? We have three different focus areas on the end of the year. The first one is scaled down our fixed cost base. Second one is shifted the initiative more like shorter and midterm -- midterm like more profitability initiative, like example, the focus to more profitability countries, product and customer segments. And same time, the third one, we want to sharpen our focus to those activity who have the highest impact on our core, example the distribution channel expansion and the product and underwriting risk innovations. Good. But let's start to look to SweepBank for the next one. On the SweepBank, we have a really, really strong growth in H1. And today, we shifted our strategy for the future more to shorter-term profitability. Our revenue in the Q2 was a EUR 3 million. That's the over 70% growth year-on-year, very strong. Our lending portfolio ended EUR 108 million, what is a very impressive lending portfolio products over 130%. Our EBIT in the SweepBank was minus EUR 5.4 million. What is the part of our plan, what we have made the decision to invest in this fast-growing initiative. We have -- we launched in our SweepBank app in the German, very successful. And what was very interesting that our credit card that we launched in our digital-free credit card in our SweepBank app. And we was very positively surprised how this unit or profitability was coming much, much higher than we originally expected. When we look going forward, where we focus, we a little bit shifted our strategy on the future on the SweepBank. So we see that the fast growing like a nice growing position and focus more shorter-term profit there, especially in the product and countries. We will -- our aim is to reduce the cost base over 50% overall on the SweepBank. We will focus the prime installment loan segment, the higher yield segment. And in the mobile bank or the SweepBank app, we will suspend the short-time development project on the -- at least the next 12 months and focus to expand our free digital credit card because that's where we see there is a very good profitability growth opportunity for us. And all of that activity is leading that we are comfortable to give you the targets for the coming next 2 years, 2023 and 2024 on the way that the next year, this tribe business unit will be covered all their own cost. However, it will be doing around the EUR 10 million negative EBIT on the next year, what is the same amount, what is around the crude allocation cost and then the 2024, we will achieve the positive EBIT, and this business unit covered all direct and nondirect allocated costs as well. Good, but that's about the SweepBank and we are, as a team, very -- we have a very strong view about the SweepBank future, especially that we can turn this profitable very quickly. Let's go to look at Ferratum. So in Ferratum Tribe, we continue, again, the solid performance. Revenue in the Q2, EUR 45.5 million, EBIT EUR 12 million and lending portfolio, EUR 287 million. We have stable revenue and EBIT development. However, what this base a very well-diversified country portfolio, where some of the countries have lost their EBIT and revenue over the last year, but we have well offset this over the countries where we have seen a very strong growth and profitability improvement. Our portfolio quality remains robust. We launched our progressing mobile web application where we're piloting that one what is practically the increase our customer lifetime value and decrease our IT development cost. That was the so far come in to look at the really, really successful case. It's a little bit saying that in Ferratum Tribe, during the first 6 months this year, we're piloting the customer service further digitalization on the way that today, we have all customer connection what we [ had it ] 73% we're dealing pure AR or digital ways to sell service centers. And our customer service -- physical customer service have to only be in the remaining the customer connections. And in those relations, we have piloting to outsourcing outside of EU and this build pilots so far looked really successful as well. When we look at the future, when we look at what we're doing on the future in the Ferratum, we will shift the lending to higher profitability countries as well. And that means that we will close in the lending business in Brazil, and we will reduce the new lending on new customer intake from Australia. However, at the same time, we expand our product portfolio. So we look into launching the new product. It's mainly the same customer segment where we operate today and innovation with the credit risk and underwriting, we want to work in the product and customer segment where we can even achieve the higher return there with the lower risk appetite. We continue to open the new countries in the main and the European area, and we confident rolling our Credit Limit our biggest and most successful product so far to the new countries, continue to tight cost control process and process out of what we already -- what I already explanation example of the customer service for. About the next few years on the target, we want to give the few of our targets on Ferratum as well. And our targets on the coming years has increased at least 5% yearly our EBIT conversion to previous year. Good, but I have to say personally that Ferratum business unit and tribe how we call them, it's a really good shape, and it's going even further there. And the team is dealing with really, really well. Good, let's come to CapitalBox. The CapitalBox, we see the huge opportunity in underserved SME segment. However, today, we see that this is the turnaround position and where we have to turn around CapitalBox business back to fast growth and profitability mode. The revenue in the Q2 was EUR 5 million, EBIT point of view was a breakeven and lending portfolio was EUR 82 million. I have to say that in revenue, EBIT point of view, that was below our expectation. What was driven by two different things? The first one was the challenge from the market environment, what we faced in the first 6 months and internal performance. It's not only externally. It's both for those two impact that one. We still continue to product rollout. So we have launching in the last year, the credit line product in the CapitalBox and during the first 6 months in this year, we brought in this all our five countries where we operate. We're piloting our new scoring model machine learning to improve our underwriting capability there. And we are currently positioned to looking for the new CEO who planned to plan to start in the beginning of the next year. And during this entering time or during this turnaround time end of the year, the interim management team will be running together with the group management team on the CapitalBox turnaround. Going forward, we have three very most important -- the highest invested activity, what we do in there, get they're doing this turnaround. The first one, we expand our distribution channels. Currently, we have focused on the digital and the pure Internet-based distribution channels, and we want to go into further. We want to double our approval rate. So we actually get lots of customer question, but we want to improve our lending on the way that we don't have to invest a lot of more money to marketing on the way that we can double our approval rate -- approval rate, but at the same time remain the strong risk position what we have it today and the strong underwriting there. And that's what we can do in together with the risk underwriting and product innovations and our team is working really well there today. And we continue to fully automated all our process and back-end process behind there to even further reduction of our fixed cost on CapitalBox tribe. And that's the reason why we are so comfortable to keep the targets for the next 2 years, 2023 and 2024, and where we can see that in the next year 2023, we achieved at least a EUR 5 million EBIT and 2024 the minimum EUR 10 million. Good. That's more or less the update for all our three different business tribes. And let's go look the next one a little bit our ESG status where we are with that activity initiative. So maybe quite many of you, you remember that in the last year Q3 publication, we public our new ESG strategy. And the Q1 on this year, we actually -- under this new comprehensive strategy, we publish our first ESG report. And what we want to do today -- we want to public our clear target or KPIs, what are linked calls to achieve this our ESG costs. Our first cost related environmentalists understand and reduce the group environmental footprint. There, we have exampled the targets adopted our carbon emission reduction plan where we're currently working on the baseline plan, the learning -- understanding the first baseline and then do the reduction plan on top of that one. We have a social part, we have our monitoring report and improve the stakeholder well-being, where we example the customer point of view, measured despite the net promotion score and Responsibility Lending Index. Our own people point of view, we measure this in the ENPS employee net promotion score and for example, our hybrid work policy, what we're just launching and our thinking process behind there is that we don't want to force the people come back to office fully. We don't believe that's not good for the people, and we don't believe it's not good for the company either. And based in that one, we have launched our new hybrid working policy where we naturally want to the commitment for the people, engage the people to work in together, to socialize meeting each other together, but we want to do in this more smarter and new way. We call this is the post-COVID way. And then our government part, our core is embedded ESG. And there, we have announced our ESG policy implementation and human rights assessment and these are our 3 calls. Here, you can see the targets. And on the right hand, you can see our progress. And this is our new reporting platform or the format what we will use in the future all stakeholder to communicate our ESG development. And we will naturally involve this slide and this reporting for the future, all our earnings calls as well. Good. I think I really want to -- all of you who are interested in our ESG journey to invite you to engagement with our ESG team to learn more and understanding more what we're doing, what we think about, what are the parameters behind there and be working together because we see that that's the big things for us as a crew and we see that there is a lot of opportunity working together. Good. I want to thank my part now and hand over for the Bernd Egger, our CFO; and here our financial part.

Yes. Good morning, everybody. Let's start with the next slide and have a look at first 6 months P&L. From a revenue perspective, revenue increase of EUR 2.2 million, which is 2.1%. We will look at that a little bit more closely essentially what we can say, in order to understand it a little bit better, we need to differentiate between revenue development in Sweden, where we see a quite significant increase of EUR 2.6 million. We also see a slight increase in revenue in latam, which is partly offset by a revenue decrease in CapitalBox, which is obviously not super satisfactory. So the main driver here is Sweep in revenue growth. Credit losses increased by around about EUR 5.5 million. three drivers for that. One is volume increase in essentially Ferratum and also Sweep. But, I would also like to highlight that we have addressed the issue that we see elevated credit losses in CapitalBox. In Q1, we run about 800,000 for the first 6 months in the region of EUR 1 million. At the same time, I would like to emphasize that this has changed over the last couple of months. So we have seen still elevated credit losses in CapitalBox. April, May look better in June and July completely normalized. So the actions they can have improved the situation quite significantly. From an overall cost perspective, we see a more or less stable picture, marketing costs going down. Personnel expenses increasing, somewhat 2 drivers, essentially one is certain element of inflation cost pressure, which obviously, in all areas, we are trying to defend as fiercely as possible. Secondly, we have seen an increase of headcount, which was not massive, around about 19 to 20 people in the first half. General and administrative expenses, we've seen an increase in professional services -- some of those expenses are not of recurring nature but rather relates to a number of projects. So some of those positions will not materialize in H2. Others are a little bit more difficult to reduce basically everything that has to do with compliance, with audit, we see a permanent increase in audit requirements and compliance requirements. This obviously has an impact also on the cost level. Financing costs. H1 essentially the same level as last year. So we see a difference between Q1 and Q2, which is a pure timing difference, especially with regard to the foreign exchange hedging costs. overall, EUR 9.1 million is EUR 200,000 less than in the first half of 2021, despite the fact that we actually have quite significantly higher loan volume to finance. On the next slide, balance sheet, two statements I would like to make with regard to assets. Firstly, that is the nature of the business, and Jorma highlighted that loan portfolios have increased quite significantly during the last 6 months. Again, a key driver here is SweepBank. We will look into that also in a little bit more detail. And in parallel to that, we have reduced excess cash quite significantly. Two key drivers here. We have reduced the deposit position. You might recall, I've mentioned that in the Q1 earnings call that we have freed out some EUR 60 million cash on the bank level, which was to be held with the National Bank. This has been freed up and we've essentially reduced the cash position, but it's excess cash. And secondly, during April, we have repaid the 2022 bond entirely. Liabilities consequently have reduced by EUR 107 million. This is the combination of those two effects, which I've already mentioned, the reduction of excess deposits and the repayment of the 2022 bond. What that results in terms of net debt equity relevant for the bond -- definition bond covenants currently at 2.32%, so well below the 3.5 covenants level, so on a very good level. On the next slide, as indicated, a short look at the composition of the portfolio, the loan portfolios and the revenue composition. Again, the ring represents revenue and the circle represents the portfolio size. Portfolio size has increased in terms of -- from EUR 280 million to close to EUR 290 million. In CapitalBox, we see an increase in the region of EUR 11 million from EUR 71 million to EUR 82 million. However, a slight reduction in revenues, whereas in Sweep, we see a massive increase in revenues from EUR 3.5 million to more than EUR 6 million. And of course, corresponding also quite significant increase in portfolio size from a little bit more than EUR 60 million mid-last year to EUR 108 million this year. If we, on the next slide, take a closer look at the segment performance, let me start with Ferratum, maybe revenue EUR 90.6 million, that is around about EUR 0.5 million above the previous year's level, impairment level, EUR 29 million, that is EUR 2.7 million higher. Overall, the asset quality is still strong. We see a couple of markets where the performance in Ferratum wasn't that great then in H1 2020, but that is something we're working on I expect that to normalize. The rest of the cost position pretty much stable with the exception of selling and marketing, where we said a decrease of EUR 1.4 million and an increase in general expenses $600,000 that results in earnings before interest and tax on Ferratum of EUR 23.7 million, so it's still a very solid profitability performance. CapitalBox, the picture is slightly different. Here, we see a decrease in revenue from EUR 11.1 million to EUR 10.4 million, so around about EUR 700,000, $750,000 revenue reduction, which is not satisfactory. This is something that Jorma has highlighted, and this is certainly something that deserves and has a lot of focus currently. Impairment, I've highlighted that already. We have seen an increase of around about EUR 1 million. Also, this is something we've been working on significantly. The expectation here is that this normalizes during the second half of the year. And finally, also general [indiscernible] administrative expenses higher by some $400,000. Most of that is expected not to be recurring. This is a project character and should not materialize in the same amount during H2. Finally, SweepBank, I think, three statements are for here. Firstly, revenue development, very strong and a little bit more than EUR 6 million in the first half, impairment increase, that is normal. That's a function of the portfolio growth. So this is not to worry about cost structure. We are satisfied, especially in light and I will come to that. When we talk about the '22 guidance and the expectation for '23 and beyond, we have a very clear target that we want to bring all the tribes to profitability as quickly as possible, and that will require activities to reduce cost and develop a more lean structure in the Sweep tribe. Let me then on the next slide, spend a couple of minutes on the topic that I think is of quite significant importance, our guidance for 2022. We have given a little bit more than a year ago. In June 2021, we have given a guidance that we expect to achieve an EBIT level of EUR 20 million in 2021 and EUR 30 million in '22. '21, obviously, we have achieved 22. We see impact of changing macroeconomic and political impact quite significantly. Nonetheless, we think that we can achieve the EUR 30 million guidance for 2022. Now how do we get there? What is the plan? Of course, this is something I want to be clear about. This is a challenging situation. But nonetheless, I would like to go through the actions that we have taken that we have initiated to outline how we want to close the gap between where we are currently from a profitability perspective and the guidance level. So first assumption is that we would essentially maintain the performance level that we have in H1, also in H2. This would add some EUR 12 million would bring us space to EUR 24 million. Then secondly, we expect to see a performance improvement on the level of the Ferratum Tribe. Here, the assumption is that this would contribute incremental EUR 1 million that has essentially two elements we are focusing on. One is relative reduction of credit losses. And the second one is revenue increase. Thirdly, Sweep. Yes, the expectation is that we see a performance improvement of around about EUR 2 million with -- will be composed or should be composed of three components. One is reduction of credit losses. Secondly, shift to a slightly higher margin. So during Q2, for instance, we've seen a shift relatively low margin, which resulted in essentially during Q2, not really increasing revenues. So a shift to slightly higher margins, which means countries in which SweepBank, the prime lending portfolio sees higher margins; and thirdly, quite significant cost reductions in the Sweep tribe. Number four, CapitalBox. Here, we expect the contribution of EUR 1.5 million. Two performance components should contribute to that one is credit losses. So this is basically the expectation of our highlight just earlier that we expect to see the normalized credit loss level to maintain and stabilize over the second half of 2022. This should bring us in comparison to the run rate EBIT contribution of around about EUR 1 million and around about EUR 500,000 from cost reduction and organizational improvements. Number five, asset quality. Here, we expect a contribution in the amount of EUR 1.5 million asset quality to add a little bit of flesh to the bone and explain what it actually means. That relates to portfolio transactions, nonperforming loan transactions, and also new forward flow agreements that will help us to reduce collection costs. So the combined contribution of that is expected to be $1.5 million. Number six, cost initiatives and business initiatives. The intention is -- and actually, we've obviously started with working on that to reduce cost on all levels of the organization. And secondly, to put on hold and not necessarily discontinue or stop forever, but it is to put on hold initiatives that might become profitable at some point in the future but are not contributing to positive profitability short term. The combined effect of that expected combined effect of that is a positive EBIT contribution of EUR 1 million during the second half of 2022. And finally, we have a EUR 1 million negative reflected in this EBIT bridge. This is essentially factoring in inflation pressure that everybody experiences the same with Multitude, of course. Naturally, the ambition is to fight back as we can, but we factored in EUR 1 million increased cost levels to be on the safer side. So the combination of all those effects and initiatives is a target EBIT of EUR 30 million. I would like to reiterate this is a [ generation ] target, and this EBIT bridge is to be seen on the assumption that we do not see incremental hits from macroeconomic and geopolitical environment. So for instance, no onetime hits on macroeconomic credit losses were similar. With that, I would like to briefly move on to -- two or three words on the asset quality. I think I can be super brief here, asset quality, measured as impairment losses over net accounts receivable, stable at a very solid level. And then let's spend a couple of minutes on funding and cash position on the next slide. Cash level currently at EUR 150 million. As I've highlighted, we have reduced cash for a number of reasons. Firstly, we wanted to reduce excess cash that we have freed up, which obviously is also a cost -- a very important cost component and second, we have repaid the 2022 bond. That brings me to the funding situation. The composition of our funds on the next slide. We -- as you will see, we have now the 2022 bond has disappeared. We have repaid that in full. At the same time, we have increased the 2023 bond exposure by roughly EUR 40 million, so currently EUR 100 million outstanding, EUR 99 million to be precise outstanding of the 2023 bond. From a weighted cost of debt capital perspective, this results in a continuing trend of slightly decreasing debt capital cost. At this point, I would also like to give a short update with regards to our plans on the outstanding capital market instruments. The ambition is to start the refinancing of the 2023 bond soon. So should the market conditions be reasonably supportive we would like to rather sooner than later, refinance the instrument and will start and initiate discussions on the market in September. Good. With that, let's go to next slide, and I hand back to you, Jorma.

Good. Okay. Thanks, Bernd. So I think we want to thank all of you your attention on our earnings call, and we want to leave for you our key takeaways. What has been our practice for many years? We want to leave for you the 6 different key takeaways this time. The first one, as we as a group label, at a Multitude Group level, we have a very solid result despite this challenging market environment. We want to confirm our EBIT guidance, EUR 30 million on this year. In SweepBank, we had a very strong growth in the H1, and we have do the strategy shift for the even short term, more profitability and keep the first time the target for 2023 and 2024. In Ferratum Tribe or the business unit, we continued the solid performance with stable revenue and EBIT performance. And the CapitalBox, we have a huge opportunity currently in unserved SME segment. However, we are now in the turnaround position to go into back to fast-growing and highly profitability business model. And the last one, we will refinancing our 2023 bond is scheduled on the H2 this year, and the plan is starting this in September. So those are the 6 key takeaways, but we want to leave all of you on this call. And I think now we are ready to take all your questions.

Good. I think we have -- in this call, we have only the chat-based question, and we have first questions coming from Stefan [indiscernible]. You have several questions. I can read those. And after that, Bernd, maybe we can answer.

Yes.

So the first question is, why is the revenue development so weak? You are talking about the headwinds of the market, but other banks increased the revenue significantly in Q2. That's the first question. Then the second question is why did revenue decrease from Q1 to Q2 2022 for SweepBank even that the lending portfolio was increased significantly? Then the third question is what does substantial cost reduction initially mean into more detail? And the next question, how will you reduce the all operational cost in SweepBank over to 50%? And will there be the Capital Markets Day over end of this year? So that's the question, but maybe we can start. If I can take a first in the few questions Bernd, and then you can take the remaining. Is that okay?

Yes, absolutely.

Super. The first one related to the Capital Markets Day. I'll start the last one. We have had an original plan to do this in this spring. But now we have -- but currently, in our view is that, that we will not organize the end of the year, the Capital Markets Day. But it's highly probability at the beginning of the year, we want to give you more update on this, the reshape strategy what we have today, the public for you and more the follow-up related to that one. That's our current thinking process. Then the second one is the question on the -- why is the revenue development so weak? I think it's -- I think we have to split a little bit this question and answer in the different context in my view. The first one, the SweepBank, we have a very strong growth. And the Ferratum, like I explanation there, we have like -- we have offset very well. So we have countries where we have reduced -- where we have lost our revenue and the EBIT as well. Like example, in the Finland, where we have operated many years and there was a few years back, there was interest rate gap. And base in that one, we have lost some revenue in Finland. So we can see the very strong growth in some other markets who are offsetting that the revenue was what we see there. But when you summarize those together, it's looks like it's stable. But in the real life, it's not. And then what is coming to CapitalBox. I think the CapitalBox, there was -- we see reduce the demand on this spring on the March, April. And that was coming naturally that our customer segment is SME customers and they start to see the inflation cost. They start to see the unstability situation on how the plan for the future, and they start to hold in the investments as well. Of course, the partial is, like I mentioned earlier as well that is partial internal performance as well. It's not only that one, but it's -- that we see some of those 2 sides. I thinks one very important point is to understand at the CapitalBox is that our lending portfolio is still relatively shared, and it's mainly based into fixed interest rate where typically the traditional banks you have a floating interest rate where you practically the -- when the interest rate environment will be increased, your revenues naturally increase there as well. And of course, the portfolio is a longer portfolio. What means that your main part like 90% of your revenue is coming from the old lending portfolio, what you already have it out when our business model, it's a little bit shorter term on that way and basing that on the less revenue is coming from the older portfolio, and it's more important how much we do in the new loan sales behind the -- and when the new loan sales is -- it's coming a little bit -- it's not increased so much or stable. That's the impact for the growth rate there as well. But like I say as well, the CapitalBox, we are currently positioned to turn around that on the take a different filter as well. Okay. Then there is why revenue decrease from Q1 to Q2 for SweepBank? There is actually -- Bernd, do you want to take that one? Or do you want...

Yes, of course. Yes, of course. Essentially, the -- that is a change in accounting treatment. So we are offsetting customer acquisition cost from revenue. That is something that we're going to show growth in future reports to understand that a little bit better. Economically, revenue has increased from Q1 to Q2. So adjusting for this effect, the revenue would be around about EUR 1 million higher, so that's close to EUR 4 million in the second quarter in Sweep. So that's an accounting adjustment.

Good. And then the question, what does substantial cost reduction mean? I think it's a little bit wider question, but maybe I can answer for combo SweepBank question that where we say that cost plus on over 50%. I think as we do in the in-- we look at all our costs. We look in our Tribe direct cost. We look into our consulting cost. We look into our staff cost. We're doing the reduction from there as well. We look in the reduced initiative there. So like example -- an example, we have had a very big team on the on who take care of the opening to new countries there now. We said, okay, listen, in the next 12 months, we focus the countries where we operate today. And this team who have to take care of the new country opening on the previously, it's -- we can do in the cost savings steroids or allocated those resource activity, what bring the short-term profit for us. But there is a lot of this type of like smaller decision, what we have currently in the last few months on the looking and analyzed and facing that when we have to achieve our targets for the coming next 2 years as well. Good. I think we answered all of Stefan's questions. And then the next one is Philipp Häßler from Pareto. The first question, net loans up to 16% year-on-year, revenue up to 2% year-on-year. In example, the margin is down year-on-year. When do you think the margin to stabilize or even better improve? Let's take a question, but there is a 5 questions, so maybe we can take a question per question. So Bernd, do you want to comment on that point?

Yes. I mean we need to differentiate between the Tribes. I think in Ferratum expectation is to basically maintain going forward the current yield levels. In CapitalBox, we have actually reduced the yield levels on purpose. So the ambition here was to reduce credit losses. This is something we need to calibrate. So yes, I think we will see a little bit of decreasing yield still going forward. But at the same time, the expectation is that credit losses will remain low so that the net margin improves. As regards Sweep, the prime lending portfolio varies quite significantly between different markets. Last year, for instance, cannot be compared to Germany in that respect. And actually, we have started pushing the portfolio composition in a way that we stabilized the yield level, in fact, for the second half of this year and for '23, we want to increase the yield level in SweepBank offering a little bit step by step. So from that perspective, at least in the consumer lending business, the expectation is that we would stabilize the yield levels going forward. And CapitalBox, this is something we need to work out, but I don't expect significant drops in CapitalBox business either.

Yes. Go ahead. Maybe just a comment on the SweepBank that over there, we will future the focus more the higher yield customer segment, what's naturally the increase the yield there as well and stabilize from the group level that more.

Good. And the second question, Philipp Häßler, can you shed some additional light on the fine from the Multi's banking watch stock. Are there any restrictions for your business in Malta? Jorma, do you want to take or to continue?

Yes. Both is okay. It's a -- both is okay.

Okay. Then I will continue. First of all, I don't think that this is something that is a sustainable topic. So we don't expect recurring funds. Firstly, secondly, no, it does not limit the business. And thirdly, I think this is super important statement, at least is a super important analytical element from our perspective. The business we are doing and the bank is doing is not the high-risk business from an AML perspective. So we're essentially taking customer deposits and lending those funds to consumers on a low average volume base. So this is clearly not a high-risk AML business. Obviously, we have made the statement that we're going to appeal. We don't think that the fine on this level is justified, of course, when it comes to AML, to KYC processes, all banks have to face these challenges. The requirements increase quite significantly, and this is not something where we are the only ones or Ferratum bank is the only one that has received that fine. So no, we do not expect any fines in the future. We will appeal and we do not expect this to have any impact on the business whatsoever.

Exactly. And I think it's an important understanding put this in the right context as well that I think we as a Multitude and our debtor company, the bank, we will take extremely serious on the all AML-related topic and basing that one, of course, we take very serious in this topic as well. Of course, there is like behavior and this landscape have changed on the way that if we converge on the last 10 years, what we have now -- we have come in this September, the 10 years to operate in our -- with our banking license in Malta. And we can see that, that this topic was raised in the regulatory point of view as well. And the number of the fines, what the regulator has issued over the last 2 years is a significant increase, but at the same time, it's the main part of those have appeal as well, and we have an ending on the significant lower level as well. But it's not taken out of the topic that we have a nutshell to analyze the situation and the following have investments on the last 10 years quite significant, and we'll continue doing that one as well.

Good. Then I continue with Philipp Häßler question #3. How do you want to achieve EBIT of EUR 18 million in the second half? If I understood you correctly that it will mainly come from lower cost. The -- I would like to go back to the logic of the EBIT bridge. First of all, yes, that is the plan. And secondly, yes, this is challenging. We are absolutely aware of that. That's not an easy task. And in -- with respect to the contributors, cost is one aspect, but initiating cost reduction actions during this year will have a larger impact on '23 than in '22. So cost initiatives alone will not be sufficient in order to get us there. That is why I've tried to highlight that we also need to see and expect performance improvement in some areas, Ferratum, for instance, I've highlighted this EUR 1 million incremental EBIT contribution. CapitalBox, EUR 1.5 million. Here, 2 components: one, reduction of the credit loss level, essentially normalizing the credit loss level that was elevated during the first 4 months of the year and EUR 500,000 cost reduction. And then we have, yes, those portfolio quality, improving activity portfolio sales essentially. So those are the 3 drivers that we expect to materialize and we are working on. So cost reduction, performance improvement and improvement in the quality.