Safello publishes Interim Report for the First Quarter 2024 and delivers a historically strong quarter

Stockholm, 17 May 2024 | Today, Safello Group AB ("Safello") publishes the company's interim report for the first quarter (1 January-31 March) 2024. The report is attached hereto and can be found on safello.com/ir (https://safello.com/sv/investors/reports/).

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 turnover 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 service providers, which have been implemented with the aim to strengthen the financial infrastructure on the platform.
• Operating profit before depreciation and amortization (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 market 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 market 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 of SEK 0.7 million (0.0). 
• The number of executed orders decreased by -18 % to 52,234 orders (63,158).
• The number of total active users amounted to 28,339 (34,605) and new active users amounted to 6,831 (11,185).

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 organization, 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. Previously, 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 Handelsbanken 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 finance, 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.

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. 
• 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 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

• During 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, Safello 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.

"It feels good to be able to present a quarter with the best results in the company's history. A result driven by larger volumes combined with historically high prices on the cryptocurrency market. Our focus going forward is to continue working actively with growth both in terms of volume and number of customers, as well as product development. Our goal is to reach one million customers and meet the significant growth that the cryptocurrency market in the Nordics is facing", says Emelie Moritz, CEO of Safello.

For environmental and cost reasons, Safello Group AB has decided not to print the report. A printout may be distributed to shareholders upon request.

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This information is such that Safello Group AB is required to disclose in accordance with the EU Market Abuse Regulation. The information was provided by the contact person below, for publication at 08.00 CEST on 17 May 2024.

For more information, please contact
Viktoria Berglund Blohmé, Head of Finance, ir@safello.com

Certified Adviser
Amudova AB is Safello's certified adviser.
Safello is the leading cryptocurrency exchange in the Nordics, with over 368,000 users. The company is empowering financial independence by making crypto accessible to everyone. Safello offers a secure way to buy, sell and store crypto in seamless transactions at industry-leading speeds. Operating in Sweden, Safello has been registered as a financial institution with Finansinspektionen (Swedish Financial Supervisory Authority) since 2013 and is listed at Nasdaq First North Growth Market since 2021. For more information visit www.safello.com.