Good morning, everybody, and thank you for listening in. Before I start, I just hope you are well in this pandemic testing time for us, and that you and your families are doing well. Let's get into the presentation. Let's start off with the customers. Of course, the quarter was a very strong quarter when it comes to new clients.
We added almost 80,000 new clients in the quarter, and we have added 218,000 new clients for the full year of 2020, and that means that we now have surpassed 1.2 million clients on the platform. Also to note is that we have a churn of 1.3, which means that on average, our clients actually will be on the platform for 77 years if you do the math on that.
We can also show that we have still strong customer satisfaction, strong growth in number of clients, also we have been marketing ourselves a bit more on television, banners, on social media, which also, of course, helped over recognizing us as the number one choice for the clients.
We are also in the quarter, which I believe we have enhanced number of clients, also made it easier to become a client and less friction in registration on the platform. If you go to the next slide, which is, I believe, very important going forward because the net inflow is, of course, what creates good things in the P&L for us. We had so far this year SEK 57.6 billion in net inflows.
You should compare that with 2019, which we had SEK 32.6 billion for the full year. 2019 was the best year ever and the first time we came over SEK 30 billion. The net inflows has been fantastic so far. For the quarter, we had SEK 16.3 billion. Very strong net inflows continuing throughout the quarter.
Also, when you look at the net inflows, 61% of the net inflow for the quarter was from existing clients on the platform. Changing the slide, it's a very important slide for us because we are in the business of gaining market share in the Swedish savings market. If you look at this, you can see on a rolling 12 months basis, we have now almost 20% of the net inflows in the Swedish savings market.
That means that one out of five kronor will end up on the Avanza platform on a 12-month basis. Q2 was the best Q2 ever with 14.6% of the net inflows. The reason for the Q2 always being a bit lower is that there are flows into the savings market that is not addressable for Avanza,
But we're still very happy with the figure of 14.6 and that we are taking one out of five new kronor. Our market share is, of course, 4.9%, and that's the target to grow that. Since we are gaining market share when it comes to net inflows, a lot above our market share of 4.9, we know that we are taking market share as we're speaking. Going to the next slide, we haven't shown this before, so this is a new slide.
It's about monthly saving and premium in the pension company being paid in. We have increased monthly savings in mutual fund with 39% compared to a year ago. We are now getting almost SEK 700 million or SEK 680 million every month in monthly savings from our clients. In combination with the net inflows of pension premiums in the pension company,
Which is up to almost SEK 250 million a month, we are gaining a bit more than SEK 900 million every month as getting net inflows a little bit more automatically on the platform. This is something we are focused on. We have made improvements in the mobile apps to encourage our customers and inspire our customers to do more monthly savings. It seems like it's paying off. Next slide is the market shares on the stock exchange.
We have almost 20% of all transactions on Nasdaq, OMX and First North are done through our platform. We are the only one who actually gaining market share if you look at the competitors. We also surpassed SEB now, we are almost 10% of the turnover in the stock exchange go through our systems, so to speak.
That's an interesting fact also because we don't have the institutional trading, which of course is a large part of the turnover. On the retail side, we are gaining market share. We are performing quite well. We are very happy with that, and that's a number that we are tracking. Going to the next slide, of course, we can see activity record high. We have 160,000 more customers year to date generating brokerage income.
We have monthly savings totally up 26% year-to-date. Growth on the savings capital is strongly growing with income. I always speak about that the more capital we gain in AUM, which now has surpassed SEK 500 billion, the more good things will happen in the P&L over time. More AUM will drive income for Avanza, and I think we've proven that during this year.
Of course, still always key for success for us is the employee engagement, that we are still operating with a lot of distribution when it comes to staff. 60%-70% of our people are still working from home, but we are doing that in a fantastic way, and I'm very proud of our employees who is handling this situation without delays in our innovation or without any hiccups in the processes that we have.
Also, of course, we are changing our back office system, which is a project we have taken on right now that will consume some resources from now during 2021. I believe we can manage that in a good way and we will still be able to innovate with new fantastic features for our clients. With those words, I will turn over to Birgitta.
Thank you, Rikard. As always, we start with a financial overview. As Rikard said, the customer activity has continued in a strong pace in Q3, and it's the strongest quarter in Avanza's history. As always, costs are seasonally low in Q3, but at the same time, the revenues were record high. All revenue lines improved. The revenues for the first nine months almost doubled from last year.
Operating profit increased compared to Q2, and for the nine-month period, almost tripled compared to last year. Operating profit for the quarter even exceeds the profit for the whole nine-month period last year. Consequently, the operating margin for Q3 is still at a high level at 69%, and 66% for the year to date. Income per savings capital for the nine-month period increased to 51 basis points, whereas costs per savings capital have decreased to 17 basis points.
This clearly demonstrates the scalability of Avanza's business model. Our ambition the last years have been to reduce the cost to savings capital ratio to 16 basis points, in line with the best international peers in the industry. It looks like we will achieve this already this year. Due to the continued high revenues in the quarter, return on equity for Q3 was 55%, and earnings per share were SEK 2.15.
If we look at the revenues, they were, as said, improved and up 84% compared to last year. Net brokerage income was a record high in Q3 and more than doubled compared to last year. The increase in brokerage income compared to the strong Q2 was mainly a result of 7.5 more trading days in the quarter. Number of commission-generating notes per trading day was also higher, as was the turnover.
Brokerage income per SEK of turnover increased slightly to 11.4 basis points. I will come back to brokerage in the next couple of slides. Fund commissions increased mainly due to higher average fund capital. We have seen a strong fund inflow also in this quarter. Customers also have a slightly smaller share of index and fixed income funds, which increased income per SEK of fund capital to 35 basis points,
Although it was stable at 34 basis points for the nine-month period. NII was only slightly higher than in Q2, mainly as a result of a higher margin lending volume, but higher mortgage volume also contributed somewhat.
Return on surplus liquidity decreased as a result of lower average STIBOR three month, but also lower volumes. The last month's credit spreads have tightened, which will affect income on surplus liquidity negatively when the bonds mature and new bonds are bought.
Compared to last year, NII increased mainly due to better return on surplus liquidity as the repo rate was raised by 25 basis points in January 2020, but also due to larger volumes. Higher lending volumes also contributed positively together with rate hikes in connection with the increased repo rate. Other income is also very much effective by customer activity, where FX income even increased from the already high level last quarter,
A result of increased trading in foreign equities. Income from Avanza Markets decreased slightly due to lower trading volumes and transactions, and revenues from corporate finance is seasonally low in Q3, but we saw the activity picking up in September. If we go back and look a little bit deeper into the brokerage. Net brokerage development is of course connected to the last year's market volatility and higher overall turnover on the stock exchange.
Also, as Rikard mentioned, our market share on Nasdaq and First North have increased. As seen in this graph, number of commission-generating customers had a very strong development during the year. Compare with the end of Q3 last year, we have seen an improvement of 63%.
Since the beginning of 2018, less than three years ago, the number almost doubled, a trend that actually started in 2015 when we got a negative interest rate for the first time in the history. The aftermath of COVID-19 is, of course, hard to predict, and it's not unusual for customer activity to slow after great turbulence in the market as the market stabilizes. However, as a result of the strong growth in 2020, our view is that our lowest level has been raised.
As seen in this graph, net brokerage is strongly correlated with Avanza's turnover on Nasdaq and First North, even though foreign trading is not included. It is still a very good indicator of brokerage development. During the years, brokerage per SEK of turnover has been stable but increased slightly the last year.
This is a result of higher share of brokerage income generated in lower brokerage fee classes, in line with the strong customer growth just shown. The share of brokerage income generated by private banking and pro customers who pay a lower brokerage fee accounted in the first nine months of 2020 for 20% of the income, compared to 26% in the first nine months last year.
This tells us that the increased trading is spread over a large number of individuals, which is according to our strategy to be relevant to larger customer groups. This also confirms our view of having raised the bar, as long as we keep our customers satisfied and make sure that they have no reason to leave. We look a little bit on the expenses as well, operating expenses are seasonally lower in Q3 due to lower personnel costs.
Marketing costs increased as a result of more brand-building advertising during the summer, and a TV commercial in August as part of the autumn campaign. Depreciation increased as a result of a new lease agreement, and thus to higher write-down of the leased assets. Other expenses increased mainly due to costs associated with the moving into new facilities, and due to higher costs for IT.
Total moving costs amount to SEK 13 million compared to previously estimated SEK 11 million. Moving costs are partly an effect of double rent from June to September. As previously stated, the estimated growth for 2020 of 12% includes neither these extraordinary costs associated with the move, nor the write-down on these assets of SEK 8.3 million, which we made in end of 2019.
The cost increase for the full year is estimated at 12%, and the long-term cost growth of 9%-12% remain unchanged. The tax rate this year has increased as a higher share of revenues was generated in the bank where the ordinary corporate tax rate applies, in contrast with the insurance company where most revenues are taxed according to the laws for life insurance companies.
Our capitalization is strong with a total capital ratio of 18.7% compared with the requirements of 12, including all buffers as well as Pillar 2 requirements. This improvement from June is mainly due to a new issue in connection with the exercise of warrants in the quarter. As stated earlier, our capitalization planning is mainly dependent on the regulatory requirement for the leverage ratio of 3% that will be affected in June next year.
To maintain a satisfactory margin to the requirement, regardless of the market conditions, the board yesterday resolved that the internal leverage ratio target will be 3.8%. The Tier 1 capital therefore has to be strengthened by SEK 750 million- SEK 850 million. The board decided to handle this by lowering the dividend ratio for 2020. This should be seen as a one-off and the dividend policy to distribute at least 70% of the net profit stands.
I said before, the leverage ratio can be improved through increased Tier 1 capital, either through a lower dividend ratio or by issuing additional Tier 1 capital. Due to strong results, but also the pandemic and the prevailing uncertainty when it comes to regulators' view on dividends, we assess lowering the dividend as the right way to go.
This gives us room for maneuver going forward, and at the same time, we take the dividend debate into consideration and achieve the regulatory requirements. In the quarter, the leverage ratio was positively affected by customers' lower liquidity. With that, Rikard, I think we can open up for questions.
Absolutely. Thank you. If you do wish to ask a question, please press zero one on your telephone keypad. If you wish to withdraw your question, you may do so by pressing zero two to cancel. Once again, that's zero one to ask a question. There will be a brief pause while the questions are being registered. Our first question comes from the line of Patrik Bratellius of ABG Sundal Collier. Please go ahead. Your line is now open.
Hi. Good morning. Thanks for taking my questions. My first question is just a clarification question. When you say you want to improve the Tier 1 capital with SEK 750 million-SEK 850 million, is that from the Q3 reported base level you talk about?
Well, that is what we see that we will have to increase the capital base by the end of this year or at the latest by June next summer.
Okay. I understand. My second question is with regard to this as well. How do you view your future capital structure now? How come you haven't chose to issue any AT1 capital since this decision with lowering your payout ratio, one can argue that this leads to inefficient capital structure and it would be more shareholder-friendly to issue AT1 capital.
Well, that, of course, can be discussed. As we see it right now, Avanza was the only bank in 2020 that actually made a dividend payout. We have seen that there are some uncertainties on how the regulators will look at the dividend payouts for the next year as well.
We decided that we believe it's better for us not to issue an AT1 instrument now and then have to also not paying out any dividends and then being with too much capital on our balance sheet. In this way, we can still maneuver, and if we decide in the future that we would like to increase the dividend and issue an AT1 instrument, we can still do so.
Okay. That I understand. My third and last question is regard to the securities lending. Is it still the plan to launch this during 2020? Is still the guidance of SEK 20 million-SEK 30 million as an extra return for this program during the first year, or has this changed on the back of the strong customer inflow you've seen?
No, we're actually launching it today.
Okay.
We're launching it today, and we have no new news on the.
No.
Prognose revenues or?
No, they stand.
Okay. That stands. Perfect.
We will see what happens.
Thank you.
Thank you. That's all for me then.
Our next question comes from the line of Nicolas McBeath of DNB. Please go ahead.
Thanks. A follow-up question, please, on the dividends for 2020. How we should think about the payout ratio? Should we think that everything you earn in net income on top of the SEK 750- SEK 850 will be distributed? Or do you still need to retain earnings on top of that due to normal growth in the balance sheet? If you could just clarify that, please, to start with.
Well, I would say that anything that exceeds SEK 850 million is for the board of directors to be able to propose to the shareholders to pay out as a dividend. It's of course what we plan for by the end of the year. That is the amount that actually are discussable or up for discussion how high the dividend will be.
Okay. Should we think about everything on top of SEK 850 and then apply a normal 70% payout ratio on that, or how should we think about that?
That's something that I cannot comment right now. What I can say is that we need to have at least if you take the top of it and say we need to have SEK 850 million more in own capital. Anything above that is up for discussion for payout, and I cannot comment on whether that should be 70% or 100% of that or something in between.
Okay. The SEK 850, to follow up on the earlier question, is that compared to the Q3 level?
That is for the full year.
Okay. A question, please, on the brokerage fees. You mentioned there is a kind of mix effect with broader trading. If I look on the gross or also on the net commission income per trade, that's actually down a bit now in Q3, both if you look year on year or compared to the recent quarters. Is that due to lower ticket sizes, or are customers optimizing their pricing plans better to achieve lower pricing? What's your take on that?
I would say that it's lower ticket size.
Okay. Could you say anything about what you think about brokerage expenses from here? Do you see any potential to reduce your brokerage expenses per trade given the increasing volumes you see going through your platform on the Nasdaq?
Since we have customers who like us, we have customer satisfaction in place, we have increasing market shares, it seems that our customers are getting value for money. We don't have any plans to reduce any prices at the moment, but who knows? That's something we always debate within the company, but at the moment, I don't see that coming.
Okay. That's good. I was actually thinking more about your cost relative to the trading platforms. If you could say anything about how these costs are structured, because I would think that the higher volumes you get, there should be a potential to reduce your cost to Nasdaq in absolute terms or per trade. If you could say anything about that potentially, if you see any changes in that in the future.
Well, I would say that we have an agreement with Nasdaq that's a ladder, and for every new trade that we do, we are already on the top of that ladder, so the prices are as low as it gets. Of course, we could always negotiate with the Nasdaq, but I would say that we pay very small fees for every extra trade right now.
Okay. Then you write a bit about the new rules for pension transfers in the report with the cap on how much it can cost to transfer occupational pensions in the future. Have you attempted to quantify any near-term inflow potential due to this change in legislation?
It's always very hard to say. Even though the cost for moving a pension insurance will be lowered to very acceptable levels from 1st of April next year, it's hard to predict what number that would be in net inflow for us. Of course, we will make sure that we will be a very good partner for those who want to transfer their insurances.
Absolutely. I think that the good news is the legislation. The bad news is that the administration around moving pension is still going to be a hassle for a lot of clients. Of course, we see the opportunity. We will market ourselves. We will try to grab the opportunity. At the same time, we still think we have a great offering.
We have no capital fees. We have an extremely high variety investment opportunity in our pensions. Of course, we will, in the beginning of next year, talk a lot about that with our clients and inspire them to move their pension to us. I don't think it will be like opening the floodgates or anything like that. On the margin, of course, it's a very good opportunity for Avanza.
Okay, thanks. A related question. On slide number five, as you showed the monthly savings, if you could just clarify what that monthly saving, is that monthly savings going into your pension company, or what does it refer to? Because I noticed your occupational pension inflows are still around 1 billion per quarter, it hasn't changed that much. If you could also clarify where do you see this increase coming from on that view highlight on that slide.
As you said, the increase is especially high in monthly savings in mutual fund in the more ISK wrapper, not the pension. That's just normal customers who take a few thousand of their salary and put it on a mutual fund on the platform automatically. The rest, the SEK 243, almost SEK 250 million is the premium is being paid in. That has been growing, but not in the same pace as the monthly savings.
Okay, that slide is not only showing the occupational pension, it's more like mutual funds and pension. Basically all savings excluding shares or securities, I guess.
You could say it's all savings that people more or less automatically do every month.
Okay. Then my final question on the capital because I saw that your Tier 1 capital and your total capital, I think it increased by just above SEK 100 million quarter-over-quarter. That is despite the strong earnings in Q3 and your decision to reduce the payout and also the exercise of warrants then.
Also, I think you had around SEK 500 million in profits, not audited in Q2, which I would have thought would have been included in the capital this quarter. I guess my question is, why did the capital not increase more in a quarter? If you could clarify please how much you have accrued of earnings so far in the capital.
Well, we haven't included any of this year's revenue or profits in the capital base. You can see that the capital base is always at the same size as it was by the end of June. The only difference is that we had an issue of SEK 100 million connected to the warrants that were exercised in August, September.
Since we are in a bit of a period where we cannot put in a correct figure for the dividend, we decided to not include any of the profits and not deduct the assumed payout. That's why the capital base has no increase of this year's profits.
Okay. The reason for that is because you don't know about the dividend, so you think it's more prudent to.
It's a very special year, so we decided to not include the profits, and therefore we don't have to take any.
Assumption about the dividend.
Assumption by the dividend.
Yeah.
Okay, that's clear. Thank you very much. That's all for me.
Thank you. Our next question comes from the line of Robin Rane of Kepler Cheuvreux. Please go ahead.
Hi there. Good morning. A couple of follow-up questions, I guess. First, a clarification. The Tier 1 capital at the end of the Q3 was SEK 1,529 million. The SEK 750-SEK 850 is on top of this figure. Have I understood it correctly then?
That figure you have to add the profits that we actually have done for the first nine months and then deduct the SEK 850 in order to see what can be paid out. Then again, we have a Q4 as well that probably will give us some more increased profits. Yes, you could say that anything earned above SEK 850+ the Q4 revenue or results is what the board will have to decide on whether they should pay out or not.
Okay, excellent. The leverage ratio target of 3.8, how should we think about that going forward? Should we think about that as a minimum or a target which you can be around, or how should we think about that one?
That is a target. That is not a minimum. The minimum is of course 3%. Then we have different kind of internal risk appetite from the Board, of course, in order to never be below 3%. The 3.8, you should see as our target, where we would like to be.
Okay. If we would end up a year of, say, 3.6, you would not automatically decrease the payout ratio in a normal year?
No, we would not. You could view the 3.8 as a target. If we one quarter, one month are at 3.7, and we know why we are there and what actions could be done to increase it, then we will probably be comfortable with it.
Okay. All right. A question on the fund revenues. We've seen, for example, in Norway, Nordnet and Sbanken going for a platform fee rather than gathering the distribution fees from the fund companies. How do you think about this? Is this something that you think we'll see more of in Sweden as well going forward and perhaps also from Avanza? How do you think about that?
We look at that question, of course. We are prepared to change our business model due to competitive reasons or regulatory reasons. We don't see that we need to do that right now, but we are prepared, and we believe that we will be able to do that in a constructive way. It's nothing that I lose any sleep over. We are prepared to change if the market changes.
Okay. All right. I think that was all from me this morning. Thank you. Thank you very much.
Thank you. Our next question comes from the line of Ermin Kerić of Carnegie. Please go ahead. Your line is now open.
Okay. Hi. Morning. I just have three clarifications. One, Rikard, you mentioned systems work. I just wanted to understand, are you talking about some kind of fundamental change of the back-end systems, or is this just part of your systems development?
I would say it's a bit of a bigger bite this time. We are changing the back-office system within the company. We're moving from one system to another. That will give us even better prerequisites for future innovation when we're done with that project. We always from time to time have smaller challenges and larger challenges, and now we are doing a little bit larger, moving from one back-office system to another.
Okay. Time-wise, will you do this then 2021?
Yes.
Already now, 2021?
We already started.
That's.
The project internal work, but we will finalize it in 2021.
Okay, perfect. Because you reiterated your guidance of the 9%-12% cost increases, so presumably this is included in that.
Well, actually, as I said, we restate our 9%-12% cost guidance.
Yes.
Of course we are now entering into a new budget season, so if there will be any changes to that, we will come back to that in the Q4 reports.
Okay. Just a general question on costs. As you mentioned, Rikard, you're down to 16 basis points on cost of savings capital, best in class almost however you measure it. Is it possible, or is it even desired to go below that?
I think absolutely it's possible, and I absolutely think it's wise to go below that, because that gives us room for being more aggressive when it comes to the prices that we have for our customers. Depending on how things move in the future, I definitely think we could lower that in order to be harder to compete with.
Okay. Fine. Perfect. Thank you. Final one on the revenue side. I think, Rikard, you said a few times a bad quarter in the future will be better than a bad one in the past.
Yes.
I also see on slide 13, you showed your revenues and also looking at the turnover. Are you expecting here that the income to savings capital is higher than in the past? Are we simply talking about that's probably the same, but as turnover is reducing, you have a bigger share in the future? Margin-wise, it's probably what it has been before. What we should be looking for some normalization is trading patterns, not how much you make per trade.
I would say that we have seen a very strong, or the income per turnover crown has been at the same level for a very long time. If you look at the brokerage, that is hard to predict, but I would say at the total revenues per savings capital, I definitely believe we continue to decrease somewhat. That's the reason for decreasing the cost per savings capital is in order to be even more competitive when it comes to pricing.
Okay. For us when we model this, I guess no one knows when the market's been normalized, but at some point probably it will, and then we should see it coming down.
Yeah, at the same time, we have 117,000 clients generating brokerage, more than we had a year ago. Of course, if the market goes down, all of them will not stop trading. People are getting interested in financial markets. Even though we will have more boring times in the future, I'm absolutely convinced we will perform at a higher level.
Of course, the most important thing for me is, of course, the AUM, which surpassed SEK 500 billion. Because the more AUM we have, the more things happen in the P&L. If it's brokerage or people are getting more passive and moving into mutual funds, that's okay. We will make money on that also. We are a scalable company. More assets, more AUM will create a more resilient P&L.
Okay. Yeah, makes sense. Thank you very much. That's all from me.
Thank you. Our next question comes from the line of Maths Liljedahl of SEB. Please go ahead.
Yes, good morning. Just a few short follow-ups from me. You mentioned in the report that 70% of trades are done in the mobile app now. I assume that is in terms of number of transactions. Could you specify how much of the volume that is made over a mobile phone?
You are correct. That's number of transactions in the mobile phone. I don't have the figure for volumes.
Okay.
It's still pretty high, I know.
It's higher than you would expect. It's probably something below 70.
Okay. Yeah, thanks. Another quick one, I guess. Currency-related income up by 167% or 167. I know a big part is probably just due to higher activity, but are there any other special drivers in that increase?
In the FX increase?
Yeah, in the income from currency-related income.
No, if you look at our trading, I think 13% of total trading was in foreign markets, so that's a combination with brokerage and FX. It just increased. Of course, things like Tesla and so forth generated a lot of trading in the U.S. market, and that, of course, is good for the FX income.
Okay. Yeah. Thanks. That's all from me, I think.
Thank you. Our next question comes from the line of Adela Dashian of Handelsbanken. Please go ahead. Your line is now open.
Hi, good morning, everyone. Most of my questions have already been asked and answered. I do have a question on activity levels going forward. Could you give us an indication of how that has progressed over the last three weeks? Are you starting to see a slowdown from the very high levels that you've experienced thus far in the year, or is the strong momentum holding up?
No, you have the figure for the stock exchange. The turnover is still high, activity is still high. That's the only comment I can say.
As I showed in my graph, you can very easily predict our brokerage revenues. If you follow the turnover that we have on First North and Nasdaq, you can see the activity level there, and you can predict the brokerage revenue pretty close.
Perfect. That's all from me. Thank you very much.
Thank you. Our next question comes from the line of Robin Rane of Kepler Cheuvreux. Please go ahead. Your line is now open.
Hi again. A short follow-up from my side. You talked about the churn of customers. I think it was 1.3%. How do you define this, though? Is this customers that actively close down their accounts or just customers that are inactive but still have their accounts and have no assets or very low assets on their accounts? Thanks.
These are customers that actually have left Avanza and have no savings on their accounts anymore.
A part of those clients are actually deceased.
Okay. All right. I would suspect that many clients that maybe leave Avanza for another platform maybe does not actively close down their account but leave it and just move their savings. Is this something that you follow as well?
Well, if they still have their account, it doesn't matter. It's what we calculate on when they move all their savings. Of course, there are customers that have savings on our platform as well as other platforms and maybe have moved half of it to somewhere else. Those numbers I don't have. The numbers we have is the customers that decided to take all their savings from the platform. As Rikard said, that's mainly when you actually decease.
Take all the savings from the platform and close down the account, or just take all the savings from the account?
No. They don't have to close down the account. When they move their savings, all their savings.
When their AUM is zero.
Okay. Well.
That's very seldom. We actually follow when people move out money, and mostly we talk to our clients. It's usually real estate investment, helping kids or consumption. It's very seldom somebody leaves us for another platform.
Okay. Well, thank you very much.
Thank you. Once again, I remind you if you do wish to ask a question, please press 01 on your telephone keypad. Our next question comes from the line of Nicolas McBeath of DNB. Please go ahead. Your line is now open.
Hi again. Just one or two follow-up questions from me. I've been asking about this for the past few quarters to you, Rikard, and I think you kind of answered it, like let's wait and see. Now again, in this quarter, you have a very high operating margin. It's 69%, which is way above your target level. It seems like based on the comments you're making now, you think that the lowest level has been raised and so forth.
Could you say anything about how you view this margin now compared to your target of having a 50% profit margin? Are you approaching the level or the point in time where you feel confident that the operating margin has been raised sustainably and that you maybe want to invest more into the platform to give more back to the customers? Please update on that.
Well, Nicolas, maybe I give you the same answer again. Let's wait and see. I would say that, of course, if we see these margins that we have seen for the first three quarters being sustainable, I would answer it like this, that's a factor that we are addressing in our business plan for next year.
Okay. What kind of tools do you think you would look to use if you wanted to address this? Is it more on the cost base, or is it more pricing, or something else?
You have two options, basically. Either we can lower prices and making sure that we get more growth out of that, or we could invest more in people. That would mean that we could develop and innovate more. You can also do a combination of those two. I think that's how we address it.
Okay. The new business plan, will you?
We can also increase in marketing.
Yeah. The new business plan, will you comment on that in the Q4 report and the strategy for 2021 then? When will we get to know more about that?
I think you will get more information when we release the Q4 result. We have last couple of years guided 9%-12%, but we've also added an action number with our cost budget like we did this year. We will be more precise when we come to Q4, how we view 2021.
Yeah. When it comes to cost.
When it comes to cost.
Whether we would lower our prices or do anything on that part, as you know, we never tell anything before we do it. That depends on what's happening next year.
Absolutely.
Yeah. Could you say anything about how you view the cost outlook already now? Given the very strong growth in customers and the high activity, do you think it's reasonable to expect maybe costs in the higher end of the guidance for 2021?
It's too early days to answer that, honestly. We just kicked off our, so to speak, cost budget process and looking what the needs are within the organization for 2021. I wouldn't want to comment on that because it's too early days.
Okay. Perfect. Thank you.
Thank you. There are currently no further questions. I will now hand back to the speakers.
Okay. Thank you for listening in. I wish you all a great week.
Thank you.