Full Year 2020 Cembra Money Bank AG Earnings Call Transcript

The following is excerpted from the question-and-answer section of the transcript.

Question: Andreas Venditti - Bank Vontobel AG - Analyst : A couple of questions. On the auto business, you did quite well. That was a good achievement. We have now, I think, a new entrant as a -- market entrant as a partner for Tesla, which is Swissquote. Can you comment on anything that you see in terms of impact on the market from this new entrant? Then second one, maybe if you can comment on your expectations or what you see for the new IKEA partnership, which I think is going to be launched in March. What do you expect there? I guess you also had costs for the project possibly or likely already in 2020. Maybe you can quantify that. Then also in terms of the SME. Obviously, it's on hold. What's the outlook there? When do you plan a relaunch? And also, do you think there's any changes in the business case compared to pre-COVID for this business? And finally, maybe an outlook on the yield for the 3 businesses. Robert Oudmayer;Chief Executive Officer Thank you, Andreas. Almost all questions for me. But the last one, I can at least give to Pascal. But I will try to answer the first one. So the first question was about Swissquote and the entrance of a new leasing company there together with Tesla. Look, Tesla has big plans to grow their market share in the market, and they need more partners though. I mean they cannot rely on 1 or 2 partners. So I think it's logical that they have a cooperation, not just a partner. I think 3 partners is fine. I don't think you can have only 1 partner. I don't know what the effect is going to be. I mean we are still with Tesla on the commercial side. We are planning to have a loan product with Tesla as well. We did great volumes in last year. Tesla will continue to grow in that view. I mean they're in a good shape. They have new models coming out. There will be another player in the market. I mean it's completely fine because this is the market practice. On the IKEA partnership, the second question, I'm personally excited. It's -- I don't want to raise expectations that it's going to be -- that everything is going to be fantastic on day 1. However, they have 1.7 million family members in IKEA, and we're going to target those family members to get them to a credit card. We also have Swissbilling in there. We're also going to have some other products there. Cards mobile first that's going to be live in the second half of the year will be first used for IKEA customers and then for other customers. So I think over time -- and again I'm hesitant to give you a number right now because I don't even know when the shops are opening again, so -- but over time, I think it's a huge opportunity for us. It's much bigger than Conforama Fnac. It's not as big as Migros, of course, but 1.7 million family members. It's an extremely good brand. I think it gives a very good opportunity for Cembra. Hesitant to give you any numbers, Andreas, and I think you understand that. On the SME, the third question, look, the day almost that we launched the SME business, we had a nice competitor in a market that's called government. They offloaded the market with loans with no interest and no amortization for 5 years. I think that, that provided a lot of liquidity in the market, and I think the liquidity is still there. So I think it will be wrong to relaunch SME right now. I think on mid-term, I still believe in SME. I think it's a very good value proposition. It's completely online. I don't think the first 6 months in this year, we will launch it. It's probably too early. And I think after the summer, we have to see how the world is changing, how the world is developing. So it might possibly that we launch in the second half, maybe even a bit later. But for the moment, I will be very -- I don't know, Volker, I think he's agreeing with me there. I will be very restrictive in doing SME launch because I think there's still a lot of liquidity in the market. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. FEBRUARY 19, 2021 / 8:00AM, CMBN.S - Full Year 2020 Cembra Money Bank AG Earnings Call Then the fourth question was an outlook on the yield. Pascal, you want to say a word?

Question: Andreas Venditti - Bank Vontobel AG - Analyst : Just 2 smaller items. On the slides, you mentioned the Eny cooperation, which had a 2% impact from reduced activity, you say. And I'm surprised by the size 2% impact for this cooperation. It seems to me, quite large. So maybe you can explain what's going on there. And the second one, REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. FEBRUARY 19, 2021 / 8:00AM, CMBN.S - Full Year 2020 Cembra Money Bank AG Earnings Call maybe Swissbilling is growing very nicely. Maybe you can explain a bit where this comes from and where we might be heading in terms of Swissbilling growth for Cembra. Robert Oudmayer;Chief Executive Officer Yes, on Eny, we had a SPV with Eny. So -- and we don't have a lot of volumes coming into the SPV, they now do an agent agreement with us. So the agent agreement, we still get the volume. So it's not booked in the SPV anymore. Basically, we don't book a lot of volatility anymore on the SPV. So then if you know that the portfolio has a 3-year run rate, that means it goes down pretty quickly. We still work with them on an agent basis. So we still book volumes on an agent basis, which is not booked in Eny anymore, but just in Cembra. On the Swissbilling side, I think Swissbilling is doing 2 things nicely. First of all, they are Billing as a Service. So that's what they had some big cooperations there. And also, I think on the IKEA side, they're growing. So I think they're getting profitable. They're getting profitable really this year. I think they're growing nicely. I think they have a good value proposition, and we have good expectations. Is it going to be significant for '21? No. But I think Swissbilling is also incremental in getting businesses for us. I mean the IKEA deal, I think, I mean, it was great that we had Swissbilling because they are really needed for this kind of retailer. So in my view, Swissbilling pays for itself only by helping us with IKEA. But also on their own, they are profitable, they are growing nicely and we have very good expectation for them. It's not going to be a significant event in '21. Good. I think we're running a bit over time. So I think we should finalize it here. I think also, there are no more questions. So I would thank you for, first, listening into the call. To the -- all the analysts, I think most of us have been there for many, many years, so I want to personally thank you all the analysts that you've always been very fair to us, critical but very fair and very detailed. So thank you for the great cooperation. I hope you guys have the same cooperation with Holger. I think you will have the same cooperation with Holger, then you will Pascal and Volker to continue with you. So I think it will be business as usual. Thank you for listening in, and I wish you all the best. Thank you.